EXHIBIT 4.8
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
MILLENNIUM CELL INC.
[SECOND/THIRD] WARRANT
Warrant No. [ ] Date of Original Issuance: [ ], 2002
Millennium Cell Inc., a Delaware corporation (the "COMPANY"), hereby
certifies that, for value received, [Name of Holder] or its registered assigns
(the "HOLDER"), is entitled to purchase from the Company up to a total of [ ](1)
shares of common stock, $.001 par value per share (the "COMMON STOCK"), of the
Company (each such share, a "WARRANT SHARE" and all such shares, the "WARRANT
SHARES"), which shall vest pursuant to Section 4(b) hereof, at an exercise price
(as adjusted from time to time as provided in Section 9, the "EXERCISE PRICE")
per Warrant Share equal to $3.93, at any time and from time to time from and
after the date hereof and through and the fifth year anniversary of the date
hereof (the "EXPIRATION DATE"), and subject to the following terms and
conditions:
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(1) 624,029 - Second Warrant.
208,010 - Third Warrant.
1. Definitions. In addition to the terms defined elsewhere in this
Warrant, capitalized terms that are not otherwise defined herein that are
defined in the Securities Purchase Agreement, dated as of June 19, 2002, between
the Company and the original Holder (the "PURCHASE AGREEMENT"), shall have the
meanings given to such terms in the Purchase Agreement.
2. Registration of Warrant. The Company shall register this Warrant,
upon records to be maintained by the Company for that purpose (the "WARRANT
REGISTER"), in the name of the record Holder hereof from time to time. The
Company may treat the registered Holder as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.
3. Registration of Transfers. The Company shall register the transfer
of any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto duly completed and signed,
to the Transfer Agent or to the Company at its address specified herein. Upon
any such registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a "NEW WARRANT"),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Warrant.
4. Exercise, Duration and Vesting. (a) Subject to the provisions of
Section 4 and 5, this Warrant shall be exercisable by the registered Holder at
any time and from time to time on or after December 19, 2002 through and
including the Expiration Date. At 6:30 p.m., New York City time on the
Expiration Date, the portion of this Warrant available for exercise and not
exercised prior thereto shall be and become void and of no value, provided, that
if the closing sales price of the Common Stock on the Expiration Date is greater
than 102% of the Exercise Price on the Expiration Date, then this Warrant shall
be deemed to have been exercised in full (to the extent not previously
exercised) on in accordance with Section 10 hereof at 6:30 P.M. New York City
time on the Expiration Date. The Company may not call or redeem all or any
portion of this Warrant without the prior written consent of the Holder.
Notwithstanding anything herein to the contrary: (x) on the date that the
Company timely pays to the Holder the full Holder Prepayment Price (as defined
in the Debentures) pursuant to the delivery to the Company of a Holder
Prepayment Notice (as defined in the Debentures), the Holder shall, as of such
date, remain entitled to acquire the number of Warrants Shares which have vested
pursuant to the terms hereof as of such date and this Warrant shall not vest
with respect to any additional Warrant Shares, and (y) on the date that: (A) the
Company timely pays to the Holder the full Company Prepayment Price (as defined
in the Debentures) pursuant to the delivery to the Holder of a Company
Prepayment Notice (as defined in the Debentures), (B) the condition set forth in
Section 8(b)(i)(y) of the Debentures is first met, or (C) the [Initial Letter of
Credit/Additional Letter of Credit] is cancelled pursuant to and in accordance
with Section 2(b)(iii) of the Debentures, this Warrant shall, as of such date,
vest with respect to an aggregate of 100% of the maximum number of Warrant
Shares issuable under this Warrant (as such number may have been adjusted
pursuant to Section 9), less any Warrants Shares issued upon exercise hereunder
prior to such date.
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(b) Subject to Section 4(a), the Holder shall be entitled to
purchase, on a cumulative basis, the following number of Warrant Shares:
[(i) 40% of the maximum number of Warrant Shares
issuable under this Warrant (as such number may have been adjusted pursuant to
Section 9), on the date of original issuance of this Warrant;
(ii) an additional 40% of the maximum number of
Warrant Shares issuable under this Warrant (as such number may have been
adjusted pursuant to Section 9), following the conversion(s) of an aggregate of
$3,750,000 of the principal amount of the Initial Debentures (as defined in the
Purchase Agreement);
(iii) an additional 10% of the maximum number of
Warrant Shares issuable under this Warrant (as such number may have been
adjusted pursuant to Section 9), following the conversion(s) of an aggregate of
$6,000,000 of the principal amount of the Initial Debentures; and
(iv) an additional 10% of the maximum number of
Warrant Shares issuable under this Warrant (as such number may have been
adjusted pursuant to Section 9), following the conversion(s) of an aggregate of
$8,250,000 of the principal amount of the Initial Debentures.
For purposes of Section 4(b)(i)-(iv), conversions of principal
amount of Initial Debentures shall also include any Excess Principal Amount (as
defined in the Initial Debentures) required to be paid by the Company pursuant
to Section 6(d)(ii) of the Initial Debentures.](2)
(i) [40% of the maximum number of Warrant Shares
issuable under this Warrant (as such number may have been adjusted pursuant to
Section 9), on the date of original issuance of this Warrant;
(ii) an additional 40% of the maximum number of
Warrant Shares issuable under this Warrant (as such number may have been
adjusted pursuant to Section 9), following the conversion(s) of an aggregate of
$1,250,000 of the principal amount of the Additional Debentures (as defined in
the Purchase Agreement);
(iii) an additional 10% of the maximum number of
Warrant Shares issuable under this Warrant (as such number may have been
adjusted pursuant to Section 9), following the conversion(s) of an aggregate of
$2,000,000 of the principal amount of the Additional Debentures; and
(iv) an additional 10% of the maximum number of
Warrant Shares issuable under this Warrant (as such number may have been
adjusted pursuant to Section 9), following the conversion(s) of an aggregate of
$2,750,000 of the principal amount of the Additional Debentures.
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(2) Only with respect to Second Warrants.
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For purposes of Section 4(b)(i)-(iv), conversions of principal
amount of Initial Debentures shall also include any Excess Principal Amount (as
defined in the Additional Debentures) required to be paid by the Company
pursuant to Section 6(d)(ii) of the Additional Debentures.](3)
5. Delivery of Warrant Shares.
(a) Upon delivery of the Form of Election to Purchase to the
Company (with the attached Warrant Shares Exercise Log) at its address for
notice set forth in Section 13 and upon payment of the Exercise Price multiplied
by the number of Warrant Shares that the Holder intends to purchase hereunder,
the Company shall promptly (but in no event later than three Trading Days after
the Date of Exercise (as defined herein)) issue and deliver to the Holder, a
certificate for the Warrant Shares issuable upon such exercise free of
restrictive legends unless otherwise required by the Purchase Agreement. The
Company shall, upon request of the Holder and subsequent to the date on which a
registration statement covering the resale of the Warrant Shares has been
declared effective by the Securities and Exchange Commission, use its reasonable
commercial efforts to deliver Warrant Shares hereunder electronically through
the Depository Trust Corporation or another established clearing corporation
performing similar functions, if available, provided, that, the Company may, but
will not be required to change its transfer agent if its current transfer agent
cannot deliver Warrant Shares electronically through the Depository Trust
Corporation.
A "DATE OF EXERCISE" means the date on which the Holder shall have
delivered to the Company: (i) the Form of Election to Purchase attached hereto
(with the Warrant Exercise Log attached to it), appropriately completed and duly
signed and (ii) payment of the Exercise Price for the number of Warrant Shares
so indicated by the Holder to be purchased.
(b) If by the fifth Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the right to
rescind such exercise.
(c) If by the fifth Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such fifth Trading Day the
Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
which the Holder anticipated receiving upon such exercise (a "BUY-IN"), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the Holder's
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue by (B) the closing bid price of the
Common Stock at the time of the obligation giving rise to such purchase
obligation and (2) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the
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(3) Only with respect to Third Warrants.
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Company timely complied with its exercise and delivery obligations hereunder.
For example, if the Holder purchases Common Stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with a market price on the date of exercise totaled $10,000, under
clause (1) of the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In.
(d) The Company's obligations to issue and deliver Warrant
Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Holder's right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company's failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required pursuant to the
terms hereof.
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6. Charges, Taxes and Expenses. Issuance and delivery of certificates
for shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.
7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity, if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe.
8. Reservation of Warrant Shares. The Company covenants that it will at
all times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this entire Warrant. The Company covenants that all Warrant
Shares so issuable and deliverable shall, upon issuance and the payment of the
applicable Exercise Price in accordance with the terms hereof, be duly and
validly authorized, issued and fully paid and nonassessable.
9. Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.
(a) Stock Dividends and Splits. If the Company, at any time
while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock
or otherwise makes a distribution on any class of capital stock that is payable
in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock
into a larger number of shares, or (iii) combines outstanding shares of Common
Stock into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding
immediately after such event.
(b) Pro Rata Distributions. If the Company, at any time while
this Warrant is outstanding, distributes to all holders of Common Stock (i)
evidences of its indebtedness, (ii) any security (other than a distribution of
Common Stock covered by the preceding paragraph), (iii) rights or warrants to
subscribe for or purchase any security, or (iv) any other asset (in each case,
"DISTRIBUTED PROPERTY"), then, at the request of any Holder delivered on the
record date fixed for determination of stockholders entitled to receive such
distribution, the Company will deliver
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to such Holder, within five Trading Days after such request (or, if later, on
the effective date of such distribution), the Distributed Property that such
Holder would have been entitled to receive in respect of the Warrant Shares for
which such Xxxxxx's Warrant could have been exercised immediately prior to such
record date. If such Distributed Property is not delivered to a Holder pursuant
to the preceding sentence, then upon any exercise of the Warrant that occurs
after such record date, such Holder shall be entitled to receive, in addition to
the Warrant Shares otherwise issuable upon such conversion, the Distributed
Property that such Holder would have been entitled to receive in respect of such
number of Warrant Shares had the Holder been the record holder of such Warrant
Shares immediately prior to such record date.
(c) Fundamental Transactions. If, at any time while this
Warrant is outstanding: (i) the Company effects any merger or consolidation of
the Company with or into another Person, (ii) the Company effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash or
property, or (iv) the Company effects any reclassification of the Common Stock
or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a "FUNDAMENTAL TRANSACTION"), then the Holder shall have the
right thereafter to receive, upon exercise of this Warrant, the same amount and
kind of securities, cash or property as it would have been entitled to receive
upon the occurrence of such Fundamental Transaction if it had been, immediately
prior to such Fundamental Transaction, the holder of the number of Warrant
Shares then issuable upon exercise in full of this Warrant (the "ALTERNATE
CONSIDERATION"). For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and the Company
shall apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction. At the Holder's option and request, any successor to the Company or
surviving entity in such Fundamental Transaction shall, either (i) issue to the
Holder a new warrant substantially in the form of this Warrant and consistent
with the foregoing provisions and omitting subsection 9(d) below and evidencing
the Holder's right to purchase the Alternate Consideration for the aggregate
Exercise Price upon exercise thereof, or (ii) purchase the Warrant from the
Holder for a purchase price, payable in cash within five Trading Days after such
request (or, if later, on the effective date of the Fundamental Transaction),
equal to the Black Scholes value of the remaining unexercised portion of this
Warrant on the date of the Fundamental Transaction as well as assumptions
reasonably mutually acceptable to the Company and the Holder, provided that for
purposes of such calculation, the market price of the Common Stock shall be the
closing bid price of the Common Stock on the Trading Day immediately preceding
the public announcement of the Fundamental Transaction and the volatility factor
shall be determined by reference to the 12 month average industry volatility
measures. The terms of any agreement pursuant to which a Fundamental Transaction
is effected shall include terms requiring any such successor or surviving entity
to comply with the provisions of this paragraph (c) and insuring that the
Warrant (or any such replacement security)
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will be similarly adjusted upon any subsequent transaction analogous to a
Fundamental Transaction.
(d) Subsequent Equity Sales.
(i) If the Company or any subsidiary thereof, as applicable
with respect to Common Stock Equivalents (as defined below), at any time while
this Warrant is outstanding, shall issue shares of Common Stock or rights,
warrants, options or other securities or debt that is convertible into or
exchangeable for shares of Common Stock ("COMMON STOCK EQUIVALENTS") entitling
any Person to acquire shares of Common Stock, at a price per share less than the
Exercise Price (if the holder of the Common Stock or Common Stock Equivalent so
issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights issued in connection with such issuance,
be entitled to receive shares of Common Stock at a price less than the Exercise
Price, such issuance shall be deemed to have occurred for less than the Exercise
Price), then, at the option of the Holder for such exercises as it shall
indicate, the Exercise Price shall be adjusted to mirror the conversion,
exchange or purchase price for such Common Stock or Common Stock Equivalents
(including any reset provisions thereof) at issue. Such adjustment shall be made
whenever such Common Stock or Common Stock Equivalents are issued. The Company
shall notify the Holder in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalent subject to this section,
indicating therein the applicable issuance price, or of applicable reset price,
exchange price, conversion price and other pricing terms. Notwithstanding the
foregoing, no adjustment will be made under this Section 9(d) in respect of:
(A). Any grant of an option or warrant for Common
Stock or issuance of any shares of Common Stock upon the exercise of
any options or warrants to employees, officers and directors of or
consultants to the Company pursuant to any stock option plan, employee
stock purchase plan or similar plan or incentive or consulting
arrangement approved by the Company's board of directors;
(B). Any rights or agreements to purchase Common
Stock Equivalents outstanding on the date hereof and as specified in
Schedule 3.1(g) to the Purchase Agreement (but not as to any amendments
or other modifications to the number of Common Stock issuable
thereunder, the terms set forth therein, or the exercise price set
forth therein);
(C). Any Common Stock or Common Stock Equivalents
issued for consideration other than cash pursuant to a merger,
consolidation, acquisition or other similar business combination;
(D). Any issuances of Common Stock or Common Stock
Equivalents to a Person which is or will be, itself or through its
subsidiaries, an operating company in a business related to or
complementary with the business of the Company and in which the Company
receives reasonably material benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is
issuing
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securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities;
(E). Any Common Stock Equivalents that entitle the
holders thereof to acquire up to 500,000 shares of Common Stock issued
pursuant to any equipment leasing arrangement;
(F). Any Common Stock or Common Stock Equivalents
issued to pay all or a portion of any investment banking, finders or
similar fee or commission, which entitles the holders thereof to
acquire shares of Common Stock at a price not less than the market
price of the Common Stock on the date of such issuance and which is not
subject to any adjustments other than on account of stock splits and
reverse stock splits;
(G). Any shares of Common Stock issued upon the
exercise of this Warrant or any similar warrant issued pursuant to the
Purchase Agreement;
(H). Any shares of Common Stock issued upon: (i)
exercise of the Warrants (as defined in the Purchase Agreement) or (ii)
conversion of the Debentures (as defined in the Purchase Agreement);
(I). Any adjustment to the Conversion Price (as
defined in the Debentures) of the Debentures pursuant to Section 6(c)
of the Debentures or the exercise price in the Warrants; or
(J). a bona fide underwritten public offering of the
Common Stock resulting in gross proceeds in excess of $15 million to
the Company (it being understood that equity line transactions,
including any on going warrant financing, or any similar arrangements
shall not constitute a bona fide underwritten public offering of the
Common Stock for the purposes hereof).
(ii) If, at any time while this Warrant is outstanding, the
Company or any Subsidiary issues Common Stock Equivalents at a price per share
that floats or resets or otherwise varies or is subject to adjustment based on
market prices of the Common Stock (a "FLOATING PRICE SECURITY"), then for
purposes of applying the preceding paragraph in connection with any subsequent
exercise, the Exercise Price will be determined separately on each Exercise Date
and will be deemed to equal the lowest price per share at which any holder of
such Floating Price Security is entitled to acquire shares of Common Stock on
such Exercise Date (regardless of whether any such holder actually acquires any
shares on such date).
(e) Number of Warrant Shares. Simultaneously with any
adjustment to the Exercise Price pursuant to paragraphs (a), (b) or (d) of this
Section, the number of Warrant Shares that may be purchased upon exercise of
this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted
number of Warrant Shares shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment.
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(f) Calculations. All calculations under this Section 9 shall
be made to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of the Company, and the
disposition of any such shares shall be considered an issue or sale of Common
Stock.
(g) Notice of Adjustments. Upon the occurrence of each
adjustment pursuant to this Section 9, the Company at its expense will promptly
compute such adjustment in accordance with the terms of this Warrant and prepare
a certificate setting forth such adjustment, including a statement of the
adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing
the transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company's Transfer Agent.
(h) Notice of Corporate Events. If the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including without limitation any granting of rights
or warrants to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement providing for
or solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Holder a notice describing
the material terms and conditions of such transaction, at least 20 calendar days
prior to the applicable record or effective date on which a Person would need to
hold Common Stock in order to participate in or vote with respect to such
transaction, and the Company will take all steps reasonably necessary in order
to insure that the Holder is given the practical opportunity to exercise this
Warrant prior to such time so as to participate in or vote with respect to such
transaction; provided, however, that the failure to deliver such notice or any
defect therein shall not affect the validity of the corporate action required to
be described in such notice.
10. Payment of Exercise Price. The Holder shall pay the Exercise Price
in one of the following manners:
(a) Cash Exercise. The Holder may deliver immediately
available funds; or
(b) Cashless Exercise. If at any time a registration statement
covering the resale of the Warrant Shares and naming the Holder as a selling
stockholder thereunder is not then effective, the Holder may surrender this
Warrant to the Company together with a notice of cashless exercise, in which
event the Company shall issue to the Holder the number of Warrant Shares
determined as follows
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the Holder.
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Y = the number of Warrant Shares with respect to
which this Warrant is being exercised.
A = the average of the closing bid prices for the
five Trading Days immediately prior to (but not
including) the Exercise Date.
B = the Exercise Price.
For purposes of Rule 144 promulgated under the Securities Act, it is
intended, understood and acknowledged that the Warrant Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Warrant Shares shall be deemed to have
commenced, on the date this Warrant was originally issued pursuant to the
Purchase Agreement.
11. Limitations on Exercise. (a) Notwithstanding anything to the
contrary contained herein, the number of shares of Common Stock that may be
acquired by the Holder upon any exercise of this Warrant (or otherwise in
respect hereof) shall be limited to the extent necessary to insure that,
following such exercise (or other issuance), the total number of shares of
Common Stock then beneficially owned by such Holder and its Affiliates and any
other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder's for purposes of Section 13(d) of the Exchange Act, does not
exceed 9.999% of the total number of issued and outstanding shares of Common
Stock (including for such purpose the shares of Common Stock issuable upon such
exercise). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. Each delivery of an Exercise Notice hereunder will
constitute a representation by the Holder that it has evaluated the limitation
set forth in this paragraph and determined that issuance of the full number of
Warrant Shares requested in such Exercise Notice is permitted under this
paragraph. This provision shall not restrict the number of shares of Common
Stock which a Holder may receive or beneficially own in order to determine the
amount of securities or other consideration that such Holder may receive in the
event of a merger or other business combination or reclassification involving
the Company as contemplated in Section 9 of this Warrant.
(b) [If the Company has not obtained the Shareholder Approval
(as defined below), then the Company may not issue in excess of 5,404,903 shares
of Common Stock (which equals 19.999% of the number of shares of Common Stock
outstanding on the Trading Day immediately preceding the Closing Date) less: (A)
shares of Common Stock issued on the Closing Date pursuant to the Purchase
Agreement and (B) any shares of Common Stock issued upon exercise of the
Warrants issued to the original Holder on or prior to the original issue date of
this Warrant and conversion of the Debentures issued on or prior to the original
issue date of this Warrant (such number of shares, as adjusted from time to
time, the "ISSUABLE MAXIMUM"). The Holder shall be entitled to a portion of the
Issuable Maximum equal to the quotient obtained by dividing (x) the number of
shares of Common Stock issued and sold to the Holder on the Closing Date by (y)
the number of shares of Common Stock issued and sold by the Company on the
Closing Date. If the Holder shall no longer hold the Warrant due to exercise or
cancellation of the Warrant, then the Holder's remaining portion of the Issuable
Maximum shall be allocated pro-rata among the remaining Holders. If on any Date
of Exercise: (A) the aggregate number of
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shares of Common Stock that would then be issuable upon exercise in full of this
Warrant would exceed the Issuable Maximum, and (B) the Company shall not have
previously obtained the vote of shareholders (the "SHAREHOLDER APPROVAL"), if
any, as may be required by the applicable rules and regulations of the Nasdaq
National Market (or any successor entity) applicable to approve the issuance of
shares of Common Stock in excess of the Issuable Maximum pursuant to the terms
hereof, then the Company shall issue to the Holder a number of shares of Common
Stock equal to the Holder's pro-rata portion (which shall be calculated pursuant
to the terms hereof) of the Issuable Maximum and, with respect to the remainder
of the Warrant Shares then issuable under the Warrant for which an exercise in
accordance with the applicable exercise price would result in an issuance of
shares of Common Stock in excess of the Holder's pro-rata portion (which shall
be calculated pursuant to the terms hereof) of the Issuable Maximum (the "EXCESS
WARRANT SHARES"), the Holder shall have the option to require the Company to use
its best efforts to obtain the Shareholder Approval applicable to such issuance
as soon as is possible, but in any event not later than the 90th day after such
request. The Company and the Holder understand and agree that shares of Common
Stock issued to and then held by the Holder as a result of exercise of this
Warrant shall not be entitled to cast votes on any resolution to obtain
Shareholder Approval pursuant hereto. If the Company shall succeed in obtaining
the Shareholder Approval, the Excess Warrant Shares shall again become fully
exercisable by the Holder.](4)
12. No Fractional Shares. No fractional shares of Warrant Shares will
be issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing bid price of one
Warrant Share as reported on the Nasdaq National Market on the date of exercise.
13. Notices. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be: (i) if to
the Company, to Millennium Cell Inc., 0 Xxxxxxxxxx Xxx Xxxx, Xxxxxxxxx, Xxx
Xxxxxx, 00000, Facsimile No.: (000) 000-0000, Attn: Chief Financial Officer, or
(ii) if to the Holder, to the address or facsimile number appearing on the
Warrant Register or such other address or facsimile number as the Holder may
provide to the Company in accordance with this Section.
14. Warrant Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent. Any
----------
(4) Only with respect to the Second Warrant.
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corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder's last address as shown on
the Warrant Register.
15. Miscellaneous.
(a) This Warrant shall be binding on and inure to the benefit
of the parties hereto and their respective successors and assigns. Subject to
the preceding sentence, nothing in this Warrant shall be construed to give to
any Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder and their successors and
assigns.
(b) All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Warrant (whether brought
against a party hereto or its respective affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal
courts sitting in the City of New York, Borough of Manhattan. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of this Warrant), and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto (including its affiliates,
agents, officers, directors and employees) hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Warrant or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of this Warrant, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
(c) The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.
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(d) In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.
[REMAINDER OF XXXX INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.
MILLENNIUM CELL INC.
By: _______________________________
Name:
Title:
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EXHIBIT D
FORM OF ELECTION TO PURCHASE
To Millennium Cell Inc.:
In accordance with Warrant No. [ ] issued to the undersigned, the
undersigned hereby elects to purchase _____________ shares of common stock
("COMMON STOCK"), $.001 par value per share, of Millennium Cell Inc., and, if
such Holder is not utilizing the cashless exercise provisions set forth in this
Warrant, encloses herewith $________ in cash, certified or official bank check
or checks, which sum represents the aggregate Exercise Price (as defined in the
Warrant) for the number of shares of Common Stock to which this Form of Election
to Purchase relates.
By its delivery of this Form of Election To Purchase, the Holder
represents and warrants to the Company that in giving effect to the exercise
evidenced hereby the Holder will not beneficially own in excess of the number of
shares of Common Stock (determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934) permitted to be owned under Section 11 of this
Warrant to which this notice relates.
The undersigned requests that certificates for the shares of Common
Stock issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR TAX
IDENTIFICATION NUMBER
(Please print name and address)
Warrant Shares Exercise Log
Date Number of Warrant Shares Number of Warrant Shares Number of Warrant Shares
Available to be Exercised Exercised Remaining to be Exercised
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of Millennium Cell Inc.,
to which the within Warrant relates and appoints ________________ attorney to
transfer said right on the books of Millennium Cell Inc., with full power of
substitution in the premises.
Dated: _______________, ____
__________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
__________________________________________
Address of Transferee
__________________________________________
__________________________________________
In the presence of:
___________________
