REGISTRATION RIGHTS AGREEMENT
Exhibit
10.3
EXECUTION COPY
REGISTRATION
RIGHTS AGREEMENT (this
"Agreement"), dated
as of April 20, 2005, by and among Millennium Cell Inc., a Delaware corporation,
with headquarters located at Xxx Xxxxxxxxxx Xxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx
00000 (the "Company"), and
the undersigned buyers (each, a "Buyer", and
collectively, the "Buyers").
WHEREAS:
A. In
connection with the Securities Purchase Agreement by and among the parties
hereto of even date herewith (the "Securities
Purchase Agreement"), the
Company has agreed, upon the terms and subject to the conditions set forth in
the Securities Purchase Agreement, to issue and sell to each Buyer
(i) shares of Company's Series C Convertible Preferred Stock, par value
$.001 per share (the "Preferred
Shares"), which
will, among other things, be convertible into a certain number of shares of the
Company's common stock, $.001 par value per share (the "Common
Stock", as
converted, the "Conversion
Shares") in
accordance with the terms of the certificate of designations for the Preferred
Shares (the "Certificate
of Designations"), and
(ii) warrants (the "Warrants"), which
will be exercisable to purchase shares of Common Stock (as exercised
collectively, the "Warrant
Shares").
B. The
Preferred Shares may be entitled to dividends, which at the option of the
Company, subject to certain conditions, may be paid in shares of Common Stock
(the "Dividend
Shares").
C. To induce
the Buyers to execute and deliver the Securities Purchase Agreement, the Company
has agreed to provide certain registration rights under the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder, or any
similar successor statute (collectively, the "1933
Act"), and
applicable state securities or "blue sky" laws and regulations.
NOW,
THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and each of the Buyers hereby agree as
follows:
1. Definitions.
Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
a. "Business
Day" means
any day other than Saturday, Sunday or any other day on which commercial banks
in the City of New York are authorized or required by law to remain
closed.
b. "Closing
Date" shall
have the meaning set forth in the Securities Purchase Agreement.
c. "Effective
Date" means
the date the Registration Statement has been declared effective by the
SEC.
d. "Effectiveness
Deadline" means
the date that is 90 days after the Closing Date.
e. "Filing
Deadline" means
the date that is 30 days after the Closing Date.
f. "Investor" means a
Buyer or any transferee or assignee thereof to whom a Buyer assigns its rights
under this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 and any transferee or assignee thereof to
whom a transferee or assignee assigns its rights under this Agreement and who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9.
g. "Person" means
an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
h. "register,"
"registered," and
"registration" refer
to a registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.
i. "Registrable
Securities" means
(i) the Conversion Shares issued or issuable upon conversion of the Preferred
Shares, (ii) the Warrant Shares issued or issuable upon exercise of the
Warrants, (iii) any Dividend Shares issued or issuable with respect to the
Preferred Shares and (iv) any shares of Common Stock issued or issuable with
respect to the Conversion Shares, the Preferred Shares, the Dividend Shares, the
Warrant Shares and the Warrants as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on conversions of the Preferred Shares or exercises of the
Warrants.
j. "Registration
Statement" means a
registration statement or registration statements of the Company filed under the
1933 Act covering the Initial Registrable Securities.
k. "Required
Holders" means
the holders of at least a majority of the Registrable Securities.
l. "Required
Registration Amount" for the
Registration Statement means the sum of (i) 150% of the aggregate of the maximum
number of shares of Common Stock issuable upon conversion of the Preferred
Shares (assuming a Conversion Price (as defined in the Certificate of
Designations) equal to the arithmetic average of the Weighted Average Price (as
defined in the Certificate of Designations) of the Common Stock over the five
(5) consecutive Trading Days ending on the Trading Day immediately preceding the
Closing Date), (ii) 100% of the number of Dividend Shares issuable pursuant to
the terms of the Certificate of Designations and (iii) 100% of the number of
Warrant Shares issued and issuable pursuant to the issued and outstanding
Warrants as of the trading day immediately preceding the applicable date of
determination, all subject to adjustment as provided in Section
2(e).
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m. "Rule
415" means
Rule 415 promulgated under the 1933 Act or any successor rule providing for
offering securities on a continuous or delayed basis.
n. "SEC" means
the United States Securities and Exchange Commission.
2. Registration.
a. Mandatory
Registration. The
Company shall prepare, and, as soon as practicable but in no event later than
the Filing Deadline, file with the SEC the Registration Statement on Form S-3
registering for resale of a number of Registrable Securities equal to at least
the Required Registration Amount as of the date such Registration Statement is
initially filed with the SEC. In the event that Form S-3 is unavailable for such
a registration, the Company shall use such other form as is available for such a
registration, subject to the provisions of Section 2(d). The Registration
Statement shall contain (except if otherwise directed by the Required Holders)
the "Selling
Shareholders" and
"Plan
of Distribution"
sections in substantially the form attached hereto as Exhibit
B. The
Company shall use its best efforts to have the Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than the
Effectiveness Deadline.
b. Allocation
of Registrable Securities. The
initial number of Registrable Securities included in any Registration Statement
and any increase in the number of Registrable Securities included therein shall
be allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time the Registration Statement covering
such initial number of Registrable Securities or increase thereof is declared
effective by the SEC. In the event that an Investor sells or otherwise transfers
any of such Investor's Registrable Securities, each transferee shall be
allocated a pro rata portion of the then remaining number of Registrable
Securities included in such Registration Statement for such transferor. Any
shares of Common Stock included in a Registration Statement and which remain
allocated to any Person which ceases to hold any Registrable Securities covered
by such Registration Statement shall be allocated to the remaining Investors,
pro rata based on the number of Registrable Securities then held by such
Investors which are covered by such Registration Statement. In no event shall
the Company include any securities other than (i) the Registrable Securities,
(ii) the Common Stock issuable upon exercise of the warrants dated as of the
Closing Date issued to X.X. Xxxxxxxxxx & Co., Inc. and (iii) the Common
Stock issuable upon conversion of the Series A Preferred Stock or Series B
Preferred Stock (as defined in the Certificate of Designations) or the exercise
of warrants to purchase Common Stock issued by the Company to The Dow Chemical
Company ("Dow")
contemporaneously with any issuances of Series B Preferred Stock, on any
Registration Statement without the prior written consent of the Required
Holders.
c. Legal
Counsel. Subject
to Section 5 hereof, the Required Holders shall have the right to select one
legal counsel to review and oversee any registration pursuant to this Section 2
("Legal
Counsel"), which
shall be Xxxxxxx Xxxx & Xxxxx LLP or such other counsel as thereafter
designated by the Required Holders. The Company and Legal Counsel shall
reasonably cooperate with each other in performing the Company's obligations
under this Agreement.
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d. Ineligibility
for Form S-3. In the
event that Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i) register the resale of
the Registrable Securities on another appropriate form reasonably acceptable to
the Required Holders and (ii) undertake to register the Registrable Securities
on Form S-3 as soon as such form is available, provided that the Company shall
use best efforts to maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the SEC.
e. Sufficient
Number of Shares Registered. In the
event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement or an
Investor's allocated portion of the Registrable Securities pursuant to Section
2(b), the Company shall amend the applicable Registration Statement, or file a
new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover at least the Required Registration Amount
as of the trading day immediately preceding the date of the filing of such
amendment or new Registration Statement, in each case, as soon as practicable,
but in any event not later than thirty (30) days after the necessity therefor
arises. The Company shall use its best efforts to cause such amendment and/or
new Registration Statement to become effective as soon as practicable following
the filing thereof. For purposes of the foregoing provision, the number of
shares available under a Registration Statement shall be deemed "insufficient to
cover all of the Registrable Securities" if at any time the number of shares of
Common Stock available for resale under the Registration Statement is less than
the product determined by multiplying (i) the Required Registration Amount as of
such time by (ii) 0.90. The calculation set forth in the foregoing sentence
shall be made without regard to any limitations on the conversion of the
Preferred Shares or the exercise of the Warrants and such calculation shall
assume that the Preferred Shares are then convertible into shares of Common
Stock at the then prevailing Conversion Rate (as defined in the Certificate of
Designations) and that the Warrants are then exercisable for shares of Common
Stock at the then prevailing Exercise Price (as defined in the
Warrants).
f. Effect
of Failure to File and Obtain and Maintain Effectiveness of Registration
Statement. If (i)
a Registration Statement covering all of the Registrable Securities required to
be covered thereby and required to be filed by the Company pursuant to this
Agreement is (A) not filed with the SEC on or before the Filing Deadline (a
"Filing
Failure") or (B)
not declared effective by the SEC on or before the 45th day
after the Effectiveness Deadline (an "Effectiveness
Failure") or
(ii) on any day after the Effective Date sales of all of the Registrable
Securities required to be included on such Registration Statement cannot be made
for more than five (5) Business Days (other than during an Allowable Grace
Period (as defined in Section 3(r)) pursuant to such Registration Statement
(including, without limitation, because of a failure to keep such Registration
Statement effective, to disclose such information as is necessary for sales to
be made pursuant to such Registration Statement or to register a sufficient
number of shares of Common Stock) (a "Maintenance
Failure") then,
as partial relief for the damages to any holder by reason of any such delay in
or reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall pay to each holder of Registrable Securities relating
to such Registration Statement an amount in cash equal to one percent (1.0%) of
the aggregate Purchase Price (as such term is defined in the Securities Purchase
Agreement) of such Investor's Registrable Securities included in such
Registration Statement on each of the following dates: (i) the day of a Filing
Failure and on every thirtieth day (pro rated for periods totaling less than
thirty (30) days) thereafter until such Filing Failure is cured; (ii) the day of
an Effectiveness Failure and on every thirtieth day (pro rated for periods
totaling less than thirty (30) days) thereafter until such Effectiveness Failure
is cured; and (iii) the initial day of a Maintenance Failure and on every
thirtieth day (pro rated for periods totaling less than thirty (30) days)
thereafter until such Maintenance Failure is cured. The payments to which a
holder shall be entitled pursuant to this Section 2(g) are referred to herein as
"Registration
Delay Payments."
Notwithstanding the foregoing, no Investor shall be entitled to a Registration
Delay Payment if the Filing Failure, Effectiveness Failure or Maintenance
Failure, as applicable, for which such Registration Delay Payments would
otherwise be payable are the result of the failure of (A) such Investor to
provide the Company with information reasonably requested by the Company and
necessary to complete, amend or supplement the Registration Statement or (B)
Legal Counsel to timely deliver any comments or objections to the Registration
Statement to the Company in accordance with Section 3(c). Registration Delay
Payments shall be paid on the earlier of (I) the last day of the calendar month
during which such Registration Delay Payments are incurred and (II) the third
Business Day after the event or failure giving rise to the Registration Delay
Payments is cured. In the event the Company fails to make Registration Delay
Payments in a timely manner, such Registration Delay Payments shall bear
interest at the rate of one percent (1.0%) per month (prorated for partial
months) until paid in full.
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3. Related
Obligations.
At such
time as the Company is obligated to file a Registration Statement with the SEC
pursuant to Section 2(a), 2(d) or 2(e), the Company will use its best efforts to
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall
have the following obligations:
a. The
Company shall submit to the SEC, within two (2) Business Days after the Company
learns that no review of a particular Registration Statement will be made by the
staff of the SEC or that the staff has no further comments on a particular
Registration Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
48 hours after the submission of such request. The
Company shall use best efforts to keep each Registration Statement effective
pursuant to Rule 415 at all times until the earlier of (i) the date as of which
the Investors may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Subsection (k) of Rule
144 promulgated under the 1933 Act (or any successor rule thereto, "Rule
144") or
(ii) the date on which the Investors shall have sold all of the Registrable
Securities covered by such Registration Statement (the "Registration
Period"). The
Company shall use best efforts to ensure that each Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein, or necessary to make the
statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading.
b. The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in such
Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-Q, Form 10-K or any other periodic report pursuant to the
Securities Exchange Act of 1934, as amended (the "1934
Act"), the
Company shall have incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or supplements with the
SEC on the same day on which the 1934 Act report is filed which created the
requirement for the Company to amend or supplement such Registration
Statement.
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c. The
Company shall (A) permit Legal Counsel to review and comment upon (i) a
Registration Statement at least five (5) Business Days prior to its filing with
the SEC and (ii) all amendments and supplements to all Registration Statements
filed pursuant to this Agreement (except for periodic reports filed pursuant to
the 0000 Xxx) within a reasonable number of days prior to their filing with the
SEC, and (B) not file any Registration Statement or amendment or supplement
thereto in a form to which Legal Counsel reasonably objects. The Company shall
not submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto without the prior approval of
Legal Counsel, which consent shall not be unreasonably withheld, delayed or
conditioned. The Company shall furnish to Legal Counsel, without charge, (i)
copies of any correspondence from the SEC or the staff of the SEC to the Company
or its representatives relating to any Registration Statement, (ii) promptly
after the same is prepared and filed with the SEC, one copy of any Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested by an
Investor, and all exhibits and (iii) upon the effectiveness of any Registration
Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto (except for periodic reports
incorporated by reference into such Registration Statements). The Company shall
reasonably cooperate with Legal Counsel in performing the Company's obligations
pursuant to this Section 3.
d. The
Company shall furnish to each Investor whose Registrable Securities are included
in any Registration Statement, without charge, (i) promptly after the same is
prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested by such
Investor, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, ten (10) copies of the prospectus
included in such Registration Statement and all amendments and supplements
thereto (except for periodic reports incorporated by reference into such
Registration Statements) (or such other number of copies as such Investor may
reasonably request) and (iii) such other documents, including copies of any
preliminary or final prospectus, as such Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
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e. The
Company shall use its best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by Investors
of the Registrable Securities covered by a Registration Statement under such
other securities or "blue sky" laws of all applicable jurisdictions in the
United States, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided,
however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.
f. The
Company shall notify Legal Counsel and each Investor whose Registrable
Securities are included in any Registration Statement in writing of the
happening of any event, as promptly as practicable after becoming aware of such
event, as a result of which the prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (provided that in no event shall such notice contain
any material, nonpublic information), and, subject to Section 3(m), promptly
prepare a supplement or amendment to such Registration Statement to correct such
untrue statement or omission, and deliver ten (10) copies of such supplement or
amendment to Legal Counsel and each such Investor (or such other number of
copies as Legal Counsel or such Investor may reasonably request). The Company
shall also promptly notify Legal Counsel and each such Investor in writing (i)
when a prospectus or any prospectus supplement or post-effective amendment has
been filed (other than the filing of any periodic report pursuant to the 1934
Act), and when a Registration Statement or any post-effective amendment has
become effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile on the same day of such effectiveness and
by overnight mail), (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information, and
(iii) of the Company's reasonable determination that a post-effective amendment
to a Registration Statement would be appropriate.
g. The
Company shall use its best efforts to prevent the issuance of any stop order or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and to
notify Legal Counsel and each Investor who holds Registrable Securities being
sold of the issuance of such order and the resolution thereof or its receipt of
actual notice of the initiation or threat of any proceeding for such
purpose.
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h. If any
Investor is required under applicable securities law to be described in the
Registration Statement as an underwriter and which is otherwise conducting
diligence of the sort that an underwriter would conduct, at the reasonable
request of any Investor, the Company shall furnish to such Investor, on the date
of the effectiveness of the Registration Statement and thereafter from time to
time on such dates as an Investor may reasonably request (i) a letter, dated
such date, from the Company's independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
Investors, and (ii) an opinion, dated as of such date, of counsel representing
the Company for purposes of such Registration Statement, in form, scope and
substance as is customarily given in an underwritten public offering, addressed
to the Investors.
i. Upon the
written request of any Investor in connection with any Investor's due diligence
requirements, if any, and other than records, documents and properties of the
Company the provision of which would (A) compromise the ability of the Company
to assert a privilege motion or (B) result in a violation of any confidentiality
obligation of the Company to any Person other than the Buyers (including,
without limitation, confidentiality obligations to Dow), the Company shall make
available for inspection by (i) any Investor, (ii) Legal Counsel and (iii) one
firm of accountants or other agents retained by the Investors (collectively, the
"Inspectors"), all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the "Records"), as
shall be reasonably deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided, however, that each Inspector shall agree to
hold in strict confidence and shall not make any disclosure (except to an
Investor) or use of any Record or other information which the Company determines
in good faith to be confidential, and of which determination the Inspectors are
so notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the 1933 Act, (b) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement of which the Inspector has knowledge. Each Investor
agrees that it shall, upon learning that disclosure of such Records is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Company and allow the Company, at its expense,
to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing herein (or in any
other confidentiality agreement between the Company and any Investor) shall be
deemed to limit the Investors' ability to sell Registrable Securities in a
manner which is otherwise consistent with applicable laws and
regulations.
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j. The
Company shall hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws or is
otherwise required to be included in a Registration Statement (or any amendments
or supplements thereto), (ii) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement, (iii)
the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement to which the Company is bound. The Company agrees that it shall, upon
learning that disclosure of such information concerning an Investor is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to such Investor and allow such Investor, at
the Investor's expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information.
k. The
Company shall use its best efforts either to cause all of the Registrable
Securities covered by a Registration Statement to be listed for quotation on The
Nasdaq SmallCap Market (the "SmallCap
Market") of the
National Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") or, if
the Common Stock is no longer quoted on the SmallCap Market, secure listing and
quotation of all of the Registrable Securities covered by a Registration
Statement on any national securities exchange or quotation services on which the
Common Stock is listed or quoted. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(k).
l. [INTENTIONALLY
OMITTED]
m. The
Company shall cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the Investors may reasonably request and registered in such names as the
Investors may request.
n. If
requested by an Investor, the Company shall (i) as soon as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(ii) as soon as practicable make all required filings of such prospectus
supplement or post-effective amendment after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) as soon as practicable, supplement or make amendments to any Registration
Statement if reasonably requested by an Investor holding any Registrable
Securities.
o. The
Company shall use its best efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities in the United States.
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p. The
Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, the provisions of Rule 158 under the 0000 Xxx) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of a Registration
Statement.
q. The
Company shall otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC in connection with any registration
hereunder.
r. Within
two (2) Business Days after a Registration Statement which covers Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel for the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC in the form
attached hereto as Exhibit
A.
s. Notwithstanding
anything to the contrary herein, at any time after the Registration Statement
has been declared effective by the SEC, the Company may delay the disclosure of
material, non-public information concerning the Company the disclosure of which
at the time is not, in the good faith opinion of the Board of Directors of the
Company and its counsel, in the best interest of the Company and, in the opinion
of counsel to the Company, otherwise required (a "Grace
Period");
provided, that the Company shall promptly (i) notify the Investors in writing of
the existence of material, non-public information giving rise to a Grace Period
(provided that in each notice the Company will not disclose the content of such
material, non-public information to the Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing of the date on
which the Grace Period ends; and, provided further, that no Grace Period shall
exceed five (5) consecutive days and during any three hundred sixty five (365)
day period such Grace Periods shall not exceed an aggregate of twenty (20) days
and the first day of any Grace Period must be at least two (2) trading days
after the last day of any prior Grace Period (each, an "Allowable
Grace Period"). For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Investors receive the notice referred to
in clause (i) and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be applicable during the
period of any Allowable Grace Period. Upon expiration of the Grace Period, the
Company shall again be bound by the first sentence of Section 3(f) with respect
to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to deliver unlegended shares of
Common Stock to a transferee of an Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract for
sale, and delivered a copy of the prospectus included as part of the applicable
Registration Statement, prior to the Investor's receipt of the notice of a Grace
Period and for which the Investor has not yet settled.
10
4. Obligations
of the Investors.
a. Upon the
execution of this Agreement, each Investor shall deliver to the Company an
executed Selling Stockholder Questionnaire, substantially in the form set forth
as Exhibit C hereto, and at least five (5) Business Days prior to the first
anticipated filing date of a Registration Statement, the Company shall notify
each Investor in writing of the additional information the Company requires from
each such Investor if such Investor elects to have any of such Investor's
Registrable Securities included in such Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it
as shall be reasonably required to effect the effectiveness of the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.
b. Each
Investor, by such Investor's acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
such Investor has notified the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities from such Registration
Statement.
c. Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first
sentence of 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor's receipt of
a notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f) and for which the Investor has not
yet settled.
d. Each
Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it in connection with sales of
Registrable
Securities pursuant to the Registration Statement.
5. Expenses
of Registration.
All
reasonable expenses, other than underwriting discounts and commissions and as
provided in the second sentence of this Section 5, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
the Company, shall be paid by the Company. The Company shall reimburse the
Investors for the fees and disbursements of Legal Counsel in connection with
registration, filing or qualification pursuant to Sections 2 and 3 of this
Agreement which amount shall be limited to $10,000 in the
aggregate.
11
6. Indemnification.
In the
event any Registrable Securities are included in a Registration Statement under
this Agreement:
a. To the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend each Investor, the directors, officers, members,
partners, employees, agents, representatives of, and each Person, if any, who
controls any Investor within the meaning of the 1933 Act or the 1934 Act (each,
an "Indemnified
Person"),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys' fees, amounts paid in settlement or
expenses, joint or several, (collectively, "Claims")
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified
Damages"), to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction in
which Registrable Securities are offered ("Blue
Sky Filing"), or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances under which
the statements therein were made, not misleading, or (iii) any violation or
alleged violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, "Violations").
Subject to Section 6(c), the Company shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation
of the any prospectus, a Registration Statement or any such amendment thereof or
supplement thereto, if a prospectus was timely made available by the Company
pursuant to Section 3(d); (ii) with respect to any preliminary prospectus, shall
not inure to the benefit of any such Person from whom the Person asserting any
such Claim purchased the Registrable Securities that are the subject thereof (or
to the benefit of any Person controlling such Person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by the Company pursuant to Section 3(d), and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it or failed to deliver the correct
prospectus as required by the 1933 Act and such correct prospectus was timely
made available pursuant to Section 3(d); (iii) shall not be available to the
extent such Claim is based on a failure of the Investor to deliver or to cause
to be delivered the prospectus made available by the Company, including a
corrected prospectus, if such prospectus or corrected prospectus was timely made
available by the Company pursuant to Section 3(d); and (iv) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.
12
b. In
connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each, an
"Indemnified
Party"),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by such
Investor expressly for use in connection with such Registration Statement; and,
subject to Section 6(c), such Investor will reimburse any legal or other
expenses reasonably incurred by an Indemnified Party in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably withheld or
delayed; provided, further, however, that such Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does
not exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or
supplemented.
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and specifying in reasonable detail
the factual basis of the Claim, and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be;
provided,
however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party
reasonably satisfactory to the indemnifying party, the representation by counsel
of the Indemnified Person or Indemnified Party and the indemnifying party would
be inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. In the case of an Indemnified Person, legal counsel
referred to in the immediately preceding sentence shall be selected by the
Investors holding at least a majority in
interest of the Registrable Securities included in the Registration Statement to
which the Claim relates. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or Claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or Claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent; provided,
however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights and remedies
of the Indemnified Party or Indemnified Person with respect to all third
parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 6, except to the extent that the
indemnifying party is prejudiced in its ability to defend such
action.
13
d. The
indemnification required by this Section 6 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received (with accompanying detail of services rendered and
imbursements incurred) or Indemnified Damages are incurred.
e. The
indemnity agreements contained herein shall be in addition to (i) any cause of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
7. Contribution.
To the
extent any indemnification by an indemnifying party is prohibited or limited by
applicable law, public policy or otherwise, the indemnifying party agrees to
make the maximum contribution with respect to any amounts for which it would
otherwise be liable under Section 6 to the fullest extent permitted by law;
provided,
however, that:
(i) no Person involved in the sale of Registrable Securities, which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 0000 Xxx) in connection with such sale, shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
such Registration Statement.
8. Reports
Under the 1934 Act.
With a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that may
at any time permit the Investors to sell securities of the Company to the public
without registration ("Rule
144"), the
Company agrees to:
a. make and
keep public information available, as those terms are understood and defined in
Rule 144;
b. file with
the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and
c. furnish
to each Investor so long as such Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company, if true, that it has
complied with the reporting requirements of Rule 144, the 1933 Act and the 1934
Act, (ii) a copy of the most recent annual report of the Company and such other
reports and documents so filed by the Company and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration; provided, that
the Company shall not be obligated to deliver to any Investor any information
that is filed by the Company with the SEC and is available on
XXXXX.
14
9. Assignment
of Registration Rights.
The
rights under this Agreement shall be automatically assignable by the Investors
to any transferee of all or any portion of such Investor's Registrable
Securities if: (i) the Investor agrees in writing with the transferee or
assignee to assign such rights and a copy of such agreement is furnished to the
Company promptly after such assignment; (ii) the Company is, promptly after such
transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee and (b) the securities with respect to
which such registration rights are being transferred or assigned; (iii)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the 1933 Act
and applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein; and (v) such transfer shall have been made in
accordance with the applicable requirements of the Securities Purchase
Agreement.
10. Amendment
of Registration Rights.
Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.
11. Miscellaneous.
a. A Person
is deemed to be a holder of Registrable Securities whenever such Person owns or
is deemed to own of record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the basis
of instructions, notice or election received from the such record owner of such
Registrable Securities.
15
b. Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one (1) Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If to the
Company:
Xxx
Xxxxxxxxxx Xxx Xxxx
Xxxxxxxxx,
Xxx Xxxxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: President
with a
copy to:
Xxxxxxxxx
Xxxxxxx Xxxxx & Xxxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxxxxx
X. Xxxx, Esq.
16
If to
Legal Counsel:
|
Xxxxxxx
Xxxx & Xxxxx LLP |
|
000
Xxxxx Xxxxxx |
|
Xxx
Xxxx, Xxx Xxxx 00000 |
|
Telephone:
(000) 000-0000 |
|
Facsimile:
(000) 000-0000 |
|
Attention:
Xxxxxxx X. Xxxxx, Esq. |
If to a
Buyer, to its address and facsimile number set forth on the Schedule of Buyers
attached hereto, with copies to such Buyer's representatives as set forth on the
Schedule of Buyers, or to such other address and/or facsimile number and/or to
the attention of such other Person as the recipient party has specified by
written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
c. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.
d. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of
New York. Each party 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, 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 brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party 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 to such party at the address for such notices to it under
this Agreement 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.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
17
e. This
Agreement, the other Transaction Documents (as defined in the Securities
Purchase Agreement) and the instruments referenced herein and therein constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement, the other Transaction Documents and the instruments referenced herein
and therein supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
f. Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of
and be binding upon the permitted successors and assigns of each of the parties
hereto.
g. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
h. This
Agreement may be executed in identical counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
i. Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
j. All
consents and other determinations required to be made by the Investors pursuant
to this Agreement shall be made, unless otherwise specified in this Agreement,
by the Required Holders.
k. The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent and no rules of strict construction will
be applied against any party.
l. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
18
m. The
obligations of each Buyer hereunder are several and not joint with the
obligations of any other Buyer, and no provision of this Agreement is intended
to confer any obligations on any Buyer vis-à-vis any other Buyer. Nothing
contained herein, and no action taken by any Buyer pursuant hereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated herein.
* * * * *
*
19
IN
WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
COMPANY: | |
|
By: /s/ Xxxx
X.
Xxxxxx
| |
| Name: Xxxx X. Xxxxxx | |
| Title: Acting Chief Financial Officer |
IN
WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
BUYERS: | |
|
PORTSIDE
GROWTH & OPPORTUNITY FUND | |
| By: /s/ Xxxxxxx Xxxxx | |
| Name: Xxxxxxx Xxxxx | |
| Title: Authorized Signatory |
IN
WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
PROVIDENT
PREMIER MASTER FUND LTD. | |
|
By: /s/ Xxxxxx
Xxxxxxx
| |
| Name: Xxxxxx Xxxxxxx | |
| Title: Attorney-in-fact |
IN
WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
IROQUOIS
MASTER FUND LTD. | |
| By: /s/ Xxxxxx Xxxxxxxxx | |
| Name: Xxxxxx Xxxxxxxxx | |
| Title: Authorized Signatory |
IN
WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
XXXXXXX
PARTNERS, L.P. | |
| By: /s/ Xxxxxxx Xxxxx | |
| Name: Xxxxxxx Xxxxx | |
| Title: Managing Member of Xxxxxxx Capital, LLP, its General Partner |
IN
WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
JGB
CAPITAL L.P. | |
| By: /s/ Xxxxx Xxxxx | |
| Name: Xxxxx Xxxxx | |
| Title: President JGB Management Inc., as General Partner |
IN
WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
SMITHFIELD
FIDUCIARY LLC | |
| By: /s/ Xxxx X. Chill | |
| Name: Xxxx X. Chill | |
| Title: Authorized Signatory |
IN
WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date first written
above.
|
THE
TAIL WIND FUND LTD. | |
|
By:
Tail Wind Advisory and Management Ltd., as investment
manager | |
|
By:
/s/ Xxxxx
Xxxxx
| |
| Name: Xxxxx Xxxxx | |
| Title: CEO |
SCHEDULE
OF BUYERS
|
Buyer |
Buyer's
Address
and
Facsimile Number |
Buyer's
Representative's Address
and
Facsimile Number |
|
Portside
Growth & Opportunity Fund |
c/o
Ramius Capital Group, LLC
000
Xxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxxx
Xxxxxxx
Xxxxxxx
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
E-mail:
xxxxxx@xxxxxx.xxx
xxxxxxxx@xxxxxx.xxx
Residence:
Cayman Islands |
Xxxxxxx
Xxxx & Xxxxx LLP
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxx Xxxxx, Esq.
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000 |
|
Provident
Premier Master Fund Ltd. |
c/o
Gemini Investment Strategies, LLC
00
Xxxxxxxxx Xxxx.
Xxxxxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxx
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
E-mail:
Xxxxx@XxxxxxXxxxxxxxxx.xxx
Residence:
Cayman Islands |
N/A |
|
Iroquois
Master Fund Ltd. |
Iroquois
Master Fund Ltd.
000
Xxxxxxxxx Xxx.
00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
Attention:
Xxxxxx Xxxxxxxxx
Residence:
|
N/A |
|
Xxxxxxx
Partners, L.P. |
c/x
Xxxxxxx Capital, LLP
000
Xxxxxxx Xxxxxx
0xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx Xxxxx
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
Email:
XxxxxxxXxxxx@xxxx.xxx
Residence:
New York
State
of Incorporation: Delaware |
N/A |
|
JGB
Capital L.P. |
000
Xxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxx Xxxxx
Xxxxxxx
Xxxxxxxxx
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
E-mail:
xxxxxx@xxxxxx.xxx |
N/A |
|
Smithfield
Fiduciary LLC |
c/o
Highbridge Capital Management, LLC
0
Xxxx 00xx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxx X. Xxxxxx
Xxxx
X. Chill
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
Residence:
Cayman Islands |
N/A |
|
The
Tail Wind Fund Ltd. |
Notices
to the following address:
The
Tail Wind Fund Ltd.
c/o
Tail Wind Advisory and Management Ltd.
Attn:
Xxxxx Xxxxx
1st
Floor, No. 0 Xxxxxx Xxxxxx
Xxxxxx,
XX0X 0XX XX
Facsimile:
00-000-000-0000
Telephone:
00-000-000-0000
Email:
xxxxxx@xxxxxxxxxx.xxx
Any
securities should be sent to the following address:
The
Tail Wind Fund Ltd.
x/x
Xxx Xxxx xx Xxxx Xxxxxx Trust Company (Bahamas) Limited
000
Xxxx Xxx Xxxxxx
Nassau,
Bahamas
Attention:
Xxxxxx Xxxxxxxx
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
Residence:
British Virgin Islands |
Xxxxx
X. Xxxxxxx, P.C.
000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, XX 00000
Telephone:
000-000-0000
Facsimile:
000-000-0000
Email:
xxxxxxxx@xxxxxxxx.xxx |
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
American
Stock Transfer & Trust Company
00 Xxxxxx
Xxxx
Xxx Xxxx,
XX 00000
Fax: (000)
000-0000
Attn: Xx.
Xxxxx Xxxxx
Re: Millennium
Cell Inc.
Ladies
and Gentlemen:
We are
counsel to Millennium Cell Inc., a Delaware corporation (the "Company"), and
have represented the Company in connection with that certain Securities Purchase
Agreement (the "Securities
Purchase Agreement")
entered into by and among the Company and the buyers named therein
(collectively, the "Holders")
pursuant to which the Company issued to the Holders Series C Convertible
Preferred Stock (the "Preferred
Shares ")
convertible into the Company's common stock, $.001 par value per share
(the "Common
Stock") and
warrants exercisable for shares of Common Stock (the "Warrants").
Pursuant to the Securities Purchase Agreement, the Company also has entered into
a Registration Rights Agreement with the Holders (the "Registration
Rights Agreement")
pursuant to which the Company agreed, among other things, to register the
Registrable Securities (as defined in the Registration Rights Agreement),
including the shares of Common Stock issuable upon conversion of the Preferred
Shares and the shares of Common Stock issuable upon exercise of the Warrants,
under the Securities Act of 1933, as amended (the "1933
Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ____________ ___, 200_, the Company filed a Registration Statement
on Form S-3 (File No. 333-_____________) (the "Registration
Statement") with
the Securities and Exchange Commission (the "SEC")
relating to the Registrable Securities which names each of the Holders as a
selling stockholder thereunder.
In
connection with the foregoing, we advise you that a member of the SEC's staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the 1933 Act at [ENTER
TIME OF EFFECTIVENESS] on
[ENTER
DATE OF EFFECTIVENESS] and we
have no knowledge, after telephonic inquiry of a member of the SEC's staff, that
any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC and
the Registrable Securities are available for resale under the 1933 Act pursuant
to the Registration Statement.
The
Holders may offer and sell, publicly, up to _____________ Registrable
Securities; provided, that
each Holder must deliver a prospectus to the purchaser prior to, or in
connection with, its delivery of the
confirmation of sale. We note
that in connection with the Securities Purchase Agreement, each Holder
has represented that it (i) was an “Accredited Investor” as defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933 (the
“Securities
Act”) and (ii)
is able
to afford a complete loss of such investment, has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Preferred Shares
and the Warrants and that it acquired the
Preferred Shares
and the Warrants for its own account and not with a view to or for
distribution in a manner that violates the Securities Act.
1
We advise
you that, unless you are advised by the Company that the Registration Statement
is no longer
effective, you
may, under the Securities Act, record the transfer, register shares of Common
Stock in the name of the purchaser of the Registrable Securities sold by such
Holder and issue a new certificate in replacement of the Registrable Securities
without the restrictive
legend. Our opinion as set forth above is subject to any stop transfer
instructions that may be issued to you from time to time by the Company and you
should continue to comply with such instructions notwithstanding our opinion.
Members
of this Firm do not purport to be experts on, and are not expressing any view
with respect to any laws other than the Federal securities laws of the United
States of America, and are expressing no opinion with respect to any state
securities laws. We assume no obligation to supplement this letter if any
applicable laws change after the date hereof or if we become aware of any new
facts that might effect any view expressed herein after the date
hereof.
This
letter is rendered only to you and is provided solely for your benefit in
connection with the aforementioned transaction. This letter may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very
truly yours,
2
EXHIBIT
B
SELLING
STOCKHOLDERS
The
shares of Common Stock being offered by the selling stockholders are issuable
upon conversion of the preferred shares, exercise of the warrants and in payment
of certain dividend and redemption requirements as set forth in the Certificate
of Designations. See "Private Placement of Shares of Common Stock, Preferred
Shares and Warrants". We are registering such shares of Common Stock in order to
permit the selling stockholders to offer the shares for resale from time to
time. Except for the ownership of the preferred shares and the warrants issued
pursuant to the Securities Purchase Agreement, the selling stockholders have not
had any material relationship with us within the past three years.
The table
below lists the selling stockholders and other information regarding the
beneficial ownership of the shares of Common Stock by each of the selling
stockholders. The second column lists the number of shares of Common Stock
beneficially owned by each selling stockholder, based on its ownership of the
preferred shares and warrants, as of ________, 200_, assuming conversion of all
preferred shares and exercise of the warrants held by the selling stockholders
on that date, without regard to any limitations on conversions or
exercise.
The third
column lists the shares of Common Stock being offered under this prospectus by
each selling stockholder.
In
accordance with the terms of a registration rights agreement we entered into
with the selling stockholders, this prospectus generally covers the resale of at
least the sum of (i) 150% of the aggregate of the maximum number of shares of
Common Stock issuable upon conversion of the Preferred Shares (assuming a
Conversion Price (as defined in the Certificate of Designations) equal to the
arithmetic average of the Weighted Average Price (as defined in the Certificate
of Designations) of the Common Stock over the five (5) consecutive Trading Days
ending on the Trading Day immediately preceding the Closing Date), (ii) 100% of
the number of Dividend Shares issuable pursuant to the terms of the Certificate
of Designations and (iii) 100% of the number of Warrant Shares issued and
issuable pursuant to the issued and outstanding Warrants as of the trading day
immediately preceding the date the registration statement is initially filed
with the SEC. Because
the conversion price of the preferred shares and the exercise price of the
warrants may be adjusted, we may issue a number of shares of Common Stock that
may be more or less than the number of shares being offered under this
prospectus. The fourth column assumes the sale of all of the shares offered by
the selling stockholders under this prospectus.
Under the
terms and conditions of the preferred shares and the warrants, a selling
stockholder may not convert the preferred shares or exercise the warrants to the
extent such conversion or exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of Common
Stock which would exceed 4.99% of our then outstanding shares of Common Stock
following such conversion or exercise, excluding for purposes of such
determination shares of Common Stock issuable upon conversion of the preferred
shares that have not been converted and upon exercise of the warrants that have
not been exercised. The number of shares in the second column does not reflect
this limitation. The selling stockholders may sell all, some or none of their
shares of Common Stock in this offering. See "Plan of
Distribution."
1
|
Name
of Selling Stockholder |
Number
of Shares Owned Prior to Offering |
Maximum
Number of Shares to be Sold
Pursuant
to this Prospectus |
Number
of Shares Owned After Offering |
|
(1)
Portside Growth & Opportunity Fund
|
|||
|
Provident
Premier Master Fund Ltd. |
|||
|
(2)
Iroquois Master Fund Ltd. |
|||
|
Xxxxxxx
Partners, L.P. |
|||
|
JGB
Capital L.P. |
|||
|
(3)
Smithfield Fiduciary LLC |
|||
|
(4)
The Tail Wind Fund Ltd. |
(1) Ramius
Capital Group, LLC ("Ramius Capital") is the investment adviser of Portside
Growth and Opportunity Fund ("Portside") and consequently has voting control and
investment discretion over securities held by Portside. Ramius Capital disclaims
beneficial ownership of the shares held by Portside. Xxxxx X. Xxxxx, Xxxxxx X.
Xxxxx, Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx are the sole managing members of
C4S& Co., LLC, the sole managing member of Ramius Capital. As a result,
Messrs. Cohen, Stark, Xxxxxxx and Solomon may be considered beneficial owners of
any shares deemed to be beneficially owned by Ramius Capital. Messrs. Cohen,
Stark, Xxxxxxx and Xxxxxxx disclaim beneficial ownership of these
shares.
(2) Xxxxxx
Xxxxxxxxx has voting and investment control of the securities held by Iroquois
Master Fund Ltd. Xx. Xxxxxxxxx disclaims beneficial ownership of the shares held
by Iroquois Master Fund Ltd.
(3) Highbridge
Capital Management, LLC ("Highbridge"), is the trading manager of Smithfield
Fiduciary LLC ("Smithfield") and consequently has voting control and investment
discretion over the shares of Common Stock held by Smithfield. Xxxxx Xxxxx and
Xxxxx Xxxxxx control Highbridge. Each of Highbridge and Messrs. Xxxxx and Xxxxxx
disclaims beneficial ownership of the shares held by Smithfield.
(4) Tail
Wind Advisory & Management Ltd., a UK corporation authorized and regulated
by the Financial Services Authority of Great Britain (“TWAM”), is the investment
manager for The Tail Wind Fund Ltd., and Xxxxx Xxxxx is the CEO and controlling
shareholder of TWAM. Each of TWAM and Xxxxx Xxxxx expressly disclaims any
equitable or beneficial ownership of, or pecuniary interest in, the shares being
registered hereunder and held by The Tail Wind Fund Ltd.
2
PLAN
OF DISTRIBUTION
We are
registering shares of Common Stock issuable upon conversion of the preferred
shares, exercise of the warrants and in payment of certain dividends and
redemption requirements as set forth in the Certificate of Designations to
permit the resale of such shares of Common Stock by the selling stockholders,
from time to time after the date of this prospectus. We will not receive any of
the proceeds from the sale by the selling stockholders of such shares of Common
Stock. We will bear all fees and expenses incident to our obligation to register
such shares of Common Stock.
The
selling stockholders may sell all or a portion of the shares of Common Stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the shares of
Common Stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent's commissions. The shares of Common Stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions, in any one or more of the following methods:
| · |
on
any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of
sale; |
| · |
in
the over-the-counter market; |
| · |
in
transactions otherwise than on these exchanges or systems or in the
over-the-counter market; |
| · |
through
the writing of options, whether such options are listed on an options
exchange or otherwise; |
| · |
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers; |
| · |
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction; |
| · |
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account; |
| · |
an
exchange distribution in accordance with the rules of the applicable
exchange; |
| · |
privately
negotiated transactions; |
| · |
short
sales; |
1
| · |
sales
pursuant to Rule 144; |
| · |
broker-dealers
which have agreed with the selling securityholders to sell a specified
number of such shares at a stipulated price per
share; |
| · |
a
combination of any such methods of sale;
and |
| · |
any
other method permitted pursuant to applicable
law. |
If the
selling stockholders effect such transactions by selling shares of Common Stock
to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares of Common Stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of
the shares of Common Stock or otherwise, the selling stockholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of Common Stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of Common Stock short and
deliver shares of Common Stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales. The
selling stockholders may also loan or pledge shares of Common Stock to
broker-dealers that in turn may sell such shares.
The
selling stockholders may pledge or grant a security interest in some or all of
the preferred shares and warrants or shares of Common Stock owned by them and,
if they default in the performance of their secured obligations, the pledgees or
secured parties may offer and sell the shares of Common Stock from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling stockholders to include the
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer and donate the
shares of Common Stock in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.
The
selling stockholders and any broker-dealer participating in the distribution of
the shares of Common Stock may be deemed to be "underwriters" within the meaning
of the Securities Act, and any commission paid, or any discounts or concessions
allowed to, any such broker-dealer may be deemed to be underwriting commissions
or discounts under the Securities Act. At the time a particular offering of the
shares of Common Stock is made, a prospectus supplement, if required, will be
distributed which will set forth the aggregate amount of shares of Common Stock
being offered and the terms of the offering, including the name or names of any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to
broker-dealers.
2
Under the
securities laws of some states, the shares of Common Stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in
some states the shares of Common Stock may not be sold unless such shares have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.
There can
be no assurance that any selling stockholder will sell any or all of the shares
of common stock registered pursuant to the registration statement, of which this
prospectus forms a part.
The
selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.
We will
pay all expenses of the registration of the shares of common stock pursuant to
the registration rights agreement; provided,
however, that a
selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities,
including some liabilities under the Securities Act, in accordance with the
registration rights agreements, or the selling stockholders will be entitled to
contribution. We may be indemnified by the selling stockholders against civil
liabilities, including liabilities under the Securities Act, that may arise from
any written information furnished to us by the selling stockholders specifically
for use in this prospectus, in accordance with the related registration rights
agreement, or we may be entitled to contribution.
The
selling stockholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the shares, nor is there an underwriter or
coordinating broker acting in connection with the proposed sale of the shares by
the selling stockholders. If we are notified by any one or more selling
stockholders that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer, we will file, or cause to be filed, a supplement to this prospectus, if
required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the
name of each such selling stockholder and of the participating broker-dealer(s),
(ii) the number of shares involved, (iii) the price at which such shares were
sold, (iv) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus and (vi) other facts material to the
transaction.
Once sold
under the registration statement, of which this prospectus forms a part, the
shares of Common Stock will be freely tradable in the hands of persons other
than our affiliates.
3
The
selling stockholders are not restricted as to the price or prices at which they
may sell their shares. Sales of the shares may have an adverse effect on the
market price of the common stock. Moreover, the selling stockholders are not
restricted as to the number of shares that may be sold at any time, and it is
possible that a significant number of shares could be sold at the same time,
which may have an adverse effect on the market price of the common stock.
4
EXHIBIT
C
SELLING
STOCKHOLDER QUESTIONNAIRE
The
undersigned (the "Selling
Stockholder"), is a
purchaser of securities convertible into or exercisable for shares (the
"Shares") of
common stock, par value $.001 per share ("Common
Stock"), of
Millennium Cell Inc., a Delaware corporation (the "Company"), pursuant to that
certain Securities Purchase Agreement dated as of April 20, 2005 (the
"Securities
Purchase Agreement")
entered into by and among the Company and the buyers named therein
(collectively, the "Selling
Stockholders").
Pursuant to the Securities Purchase Agreement, the Company also entered into a
Registration Rights Agreement dated as of April 20, 2005 with the Selling
Stockholders (the "Registration
Rights Agreement")
pursuant to which the Company agreed, among other things, to register the
Registrable Securities (as defined in the Registration Rights Agreement),
including the shares of Common Stock issuable upon conversion of the Preferred
Shares (as defined in the Securities Purchase Agreement) and the shares of
Common Stock issuable upon exercise of the Warrants (as defined in the
Securities Purchase Agreement), under the Securities Act of 1933, as amended
(the "1933
Act"). In
accordance with the Registration Rights Agreement, the Selling Stockholder
hereby elects to include in the registration statement for the registration and
resale of the Registrable Securities, the Shares listed below in Item (3)
(unless otherwise specified under Item 3). The undersigned agrees to be bound
with respect to such Shares by the terms and conditions of this Selling
Stockholders Questionnaire, the Securities Purchase Agreement and the
Registration Rights Agreement.
The
Selling Stockholder hereby provides the following information to the Company and
represents and warrants that such information is accurate and
complete:
| (1) |
(a) |
Full Legal Name of the Selling
Stockholder: |
|
(b) |
The
exact name that the Shares are to be registered in (if not the same as in
(a) above) (this is the name that will appear on your stock certificate
(s)). The Selling Stockholder may use a nominee name if
appropriate: |
|
(c) |
Full
Legal Name of Registered Holder (if not the same as in (a) above) of the
Shares listed in (3) below: |
C-1
|
(2) |
Address, Telephone and Facsimile Numbers for the Selling Stockholder: |
|
|
Telephone: Facsimile: Contact Person: |
|
(3) |
Beneficial Ownership: |
Fill in
the number of shares of Common Stock owned of record and beneficially (see
definition) by the Selling Stockholder:
|
|
Of Record |
Beneficially |
|
|
Common
Stock (other than the Shares
to be included in the Registration
Statement) |
|
|
Shares to
be included in the Registration Statement: ___________________
|
(4) |
Other securities of the Company owned by the Selling Stockholder: |
Except as
set forth below and under Item (3) above, the undersigned Selling Stockholder is
not the beneficial or registered owner of any shares of Common Stock or any
other securities of the Company.
State any
exceptions here:
|
(5) |
Relationships with the Company: |
Except as
set forth below, neither the Selling Stockholder nor any of its affiliates,
officers (see definition), directors or principal stockholders (5% or more) has
held any position or office or has had any other material (see definition)
relationship with the Company (or its predecessors or affiliate) during the past
three years.
State any
exceptions here:
|
(6) |
Plan of Distribution: |
Please
inform us here of any changes you may require to the draft Plan of Distribution
attached to the Stock Purchase Agreement.
C-2
By
signing below, the Selling Stockholder consents to the disclosure of the
information contained herein in its answers to Items (1) through (6) above and
the inclusion of such information in the Registration Statement and related
Prospectus and for any required disclosures to any self-regulatory body,
including the NASD. The Selling Stockholder understands that such information
will be relied upon by the Company in connection with the preparation of the
Registration Statement and related Prospectus and any amendments or supplements
thereto.
To the
extent required by applicable law, the undersigned Selling Stockholder agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein which may occur subsequent to the date hereof at any time while
the Registration Statement is in effect.
Once this
Selling Stockholder Questionnaire is executed by the Selling Stockholder and
received by the Company, this Selling Stockholder Statement Questionnaire, and
the representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the respective successors,
heirs, personal representatives and assigns of the Company and the Selling
Stockholder (with respect to the Shares beneficially owned by such Selling
Stockholder and listed in Item (3) above).
C-3
In
Witness Whereof, the
undersigned, by authority duly given, has caused this Selling Stockholder
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
Dated:
_______________________ Selling
Stockholder
_________________________
(Print/type full legal name of Selling Stockholder)
By:
_______________________________________
Name:________________________________
Title:_________________________________
By:
_______________________________________
Name:________________________________
Title:_________________________________
C-4
Annex
I
DEFINITIONS
For
purposes of the representations made in this Selling Stockholders Questionnaire,
the following definitions shall be applicable:
Arrangement.
The term "arrangement" means any plan, contract, agreement, authorization or
arrangement, whether or not set forth in writing.
Beneficial
Ownership. The term "beneficially owned" as applied to an interest in securities
means (a) any direct or indirect interest in the securities which entitles you
to any of the rights or benefits of ownership, even though you are not the
holder or owner of record or (b) securities owned by you or to which you have a
right to acquire, directly or indirectly, including those held for your own
benefit (regardless of how registered) or securities held by others for your own
benefit (regardless of how registered), such as custodians, brokers, nominees,
pledgees, etc., and including securities held by an estate or trust in which you
have an interest as legatee or beneficiary, securities owned by a partnership of
which you are a partner, securities held by a personal holding company of which
you are a shareholder, etc., and securities held in the name of your spouse,
minor children and any relative (sharing the same home). "Beneficial ownership"
includes having or sharing, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise:
(1) voting
power which includes the power to vote, or to direct the voting of, such
security; and/or
(2)
investment power which includes the power to dispose, or to direct the
disposition of, such security. Any person who, directly or indirectly, creates
or uses a trust, proxy, power of attorney, pooling arrangement or any other
contract, arrangement or device with the purpose or effect of divesting such
person of beneficial ownership of a security or preventing the vesting of such
beneficial ownership as part of a plan or scheme to evade the reporting
requirements of Section 13(d) of the Exchange Act, is deemed for purposes of
such section to be the beneficial owner of such security.
The
Securities and Exchange Commission (the "SEC") has expressed the view that a
person may be regarded as the beneficial owner of securities which are held in
the name of such person's spouse, minor children or other relatives (including
relatives of the person's spouse) who share the person's home if the
relationship which exists results in such person obtaining benefits
substantially equivalent of ownership of the securities.
The SEC
has expressed the view that a person may be deemed to be the beneficial owner of
a security if that person has the right to acquire beneficial ownership of such
security within 60 days, including, but not limited to, any right to acquire:
(1) through the exercise of any option, warrant or right; (2) through the
conversion of a security; (3) pursuant to the right to revoke a trust,
discretionary account or similar arrangement; or (4) pursuant to the automatic
termination of a trust, discretionary account or similar
arrangement.
C-5
If you
have any reason to believe that any interest in securities of the Company,
however remote, which you or the above-described relatives may have is a
beneficial interest, please describe such interest.
Control.
The term "control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, direct or indirect, of the
power, either individually or with others, to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise. (Rule 405 promulgated under the
Securities Act).
Group.
The term "group" includes a partnership, syndicate or other group, whether
formally organized or not, which has as a purpose acquiring, holding or
disposing of securities of the Company.
Material.
The term "material," when used in this Shareholders Questionnaire to qualify a
requirement for the furnishing of information as to any subject, limits the
information required to those matters as to which there is a substantial
likelihood that a reasonable investor would attach importance in determining
whether to purchase securities of the Company. The materiality of any
relationship is to be determined on the basis of the significance of the
information to investors in light of all of the circumstances of the particular
case. The importance of the relationship, the relationship of the parties to the
transaction with each other and the amount involved in the transaction are among
the factors to be considered in determining the significance of the information
to investors. If you have any question as to whether or not a matter is
"material," please describe the matter, and, if such is the case, state your
belief that the matter is not "material."
NASD
Member. The term "NASD member" means either any broker or dealer admitted to
membership in the National Association of Securities Dealers, Inc. (the "NASD").
(NASD Manual, By-laws Article I, Definitions).
Officers.
The term "officers" means the president, chief executive officer, chief
financial officer, chief operational officer, secretary, treasurer, any vice
president in charge of a principal business function (such as sales,
administration or finance) and any other person who performs similar
policy-making functions for the Company.
Person
Associated with a member of the NASD. The term "person associated with a member
of the NASD" means every sole proprietor, partner, officer, director, branch
manager or executive representative of any NASD Member, or any natural person
occupying a similar status or performing similar functions, or any natural
person engaged in the investment banking or securities business who is, directly
or indirectly,
controlling
or controlled by an NASD Member, whether or not such person is registered or
exempt from registration with the NASD pursuant to its bylaws (NASD Manual,
By-laws Article I, Definitions). Underwriter or a Related Person. The term
"underwriter or a related person" means, with respect to a proposed offering,
underwriters, underwriters' counsel, financial consultants and advisors,
finders, members of the selling or distribution group, and any and all other
persons associated with or related to any of such persons. (NASD
Interpretation).
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