Re: Amendment of Certain Terms of the Joint Development Arrangement between Millennium Cell Inc. and The Dow Chemical Company.
Exhibit
10.1
July
25,
2007
The
Dow
Chemical Company
2030
Dow
Center
Midland,
MI 48674
Attention:
Xxxxx X. Xxxxxx
|
Re:
|
Amendment
of Certain Terms of the Joint Development Arrangement between Millennium
Cell Inc. and The Dow Chemical
Company.
|
Ladies
and Gentlemen:
Reference
is made to the following agreements: (i) the Joint Development Agreement, dated
as of April 25, 2005, as amended May 30, 2006, by Millennium Cell Inc. (the
“Company”),
and
The Dow Chemical Company (“TDCC”)
(the
“JDA”),
(ii)
the Registration Rights Agreement, dated as of April 25, 2005, by the Company
and TDCC (the “RRA”),
(iii)
the Investor Rights Agreement, dated as of April 25, 2005, by the Company and
TDCC (the “IRA”),
(iv)
the Stock Purchase Agreement, dated as of February 27, 2005, as amended April
25, 2005 and May 30, 2006, by the Company and TDCC (the “SPA”),
and
(v) the Letter Agreement, by the Company and TDCC, dated as of January 26,
2007
(the “Letter
Agreement”).
Reference is also made to that certain Certificate of Designations of
Preferences, Limitations, and Relative Rights of Series B Convertible Preferred
Stock of the Company, as filed with the Office of the Secretary of State of
the
State of Delaware on April 25, 2005 and as amended by the Certificate of
Amendment filed with the Office of the Secretary of State of the State of
Delaware on June 30, 2005 (the “Series
B Certificate”).
Reference is also made to that certain Certificate of Designations of
Preferences, Limitations, and Relative Rights of Series A2 Convertible Preferred
Stock of the Company, as filed with the Office of the Secretary of State of
the
State of Delaware on June 30, 2005 (the “Series
A2 Certificate”).
The
purpose of this letter is to (i) amend the JDA, the SPA, the RRA, and the Letter
Agreement, (ii) terminate the IRA, (iii) effect a waiver of certain of TDCC’s
rights under the Series A2 Certificate and the Series B Certificate, (iv) effect
a waiver of certain of the Company’s rights under the SPA and the JDA and (v)
confirm that Milestone 2 has been achieved.
Achievement
of Milestone 2
| 1) |
The
Company and TDCC hereby agree that Milestone 2 (as defined in the
JDA) was
achieved on June 30, 2007 and that the parties have satisfied all
of their
obligations under Section
9.5(a)
of
the JDA and Sections
4.10(a)
and (c)
of
the SPA necessary for Milestone 2 to be conclusively deemed to have
been
achieved as of such date.
|
Joint
Development Agreement
| 2) |
Pursuant
to Section 13.7 of the JDA, TDCC and the Company hereby consent to
amend
the JDA, and the JDA is hereby amended, as
follows:
|
|
a)
|
The
seventh “WHEREAS”
clause is hereby amended by (i) deleting “, 3 and 4” and substituting “and
3” therefor and (ii) inserting “or Common Stock” after “Series A Preferred
Stock”.
|
|
b)
|
The
eighth “WHEREAS”
clause is hereby amended by deleting “, 2, 3 and 4” and substituting “and
2” therefor.
|
|
c)
|
The
last two (2) sentences of Section
2.1
are hereby amended and restated in their entirety as follows:
|
“By
performing these obligations, MCEL will seek to cause the occurrence of the
Military Objectives and the Consumer Objectives (if any) contained in the three
(3) milestones described in this Article
2
(each, a
“Milestone”
and,
collectively, the “Milestones”)
and,
as a result of the occurrence of all the Military Objectives or the Consumer
Objectives in any such Milestone, will achieve such Milestone as set forth
in
the Milestone Table. Upon the achievement of Milestone 1 and Milestone 2, Dow
will be entitled to receive Series A Preferred Stock and to purchase Series
B
Preferred Stock and receive Warrants, subject to the terms and conditions of
this Agreement and the other Transaction Agreements. Upon the achievement of
Milestone 3, Dow will be entitled to receive Common Stock, subject to the terms
and conditions of this Agreement and the other Transaction Agreements;
provided,
however,
that
the Company may, at its option, satisfy its obligations with respect to
Milestone 3 by paying Dow in cash.”
|
d)
|
The
descriptive caption and the first sentence of Section
2.2
are hereby amended and restated in their entirety as follows:
|
“Milestones
1, 2 and 3.
Each of
the three (3) Milestones (“Milestone
1,”
“Milestone
2”
and
“Milestone
3,”
respectively) shall be achieved upon any of: (i) the achievement of all of
the
Military Objectives corresponding to such Milestone in the Milestone Table
set
forth on Exhibit
B
of this
Agreement (the “Milestone
Table”),
(ii)
the achievement of all of the Consumer Objectives corresponding to such
Milestone in the Milestone Table, or (iii) the occurrence of a Sale or
Merger.”
|
e)
|
Clause
(iii) in the second sentence of Section
2.2
is
hereby deleted in its entirety.
|
|
f)
|
Section
4.2(a)
is
hereby modified by deleting the words “Milestone 4” and substituting the
words “Milestone 3” therefor.
|
-2-
|
g)
|
Section
4.2(d)
and Section
4.2(e)
are hereby deleted in their
entirety.
|
|
h)
|
Section
4.2(f)
is
hereby modified by deleting the words “Milestone 4” and substituting the
words “Milestone 3” therefor.
|
|
i)
|
Section
4.2(i)
is
hereby amended and restated in its entirety as
follows:
|
“(i)
MCEL
Consumer Tasks -
Milestone 3.
From
the date of achievement of Milestone 2 until the achievement of the Consumer
Objectives contained in Milestone 3, MCEL shall (i) design, build and test
a
prototype solid state Hydrogen on Demand® generator (Solid State HOD™)
appropriate for consumer electronics applications; and (ii) if applicable,
identify and exercise reasonable best efforts to engage in discussions with
potential licensees and consumer electronics device manufacturers.”
|
j)
|
Section
4.2(j)
is
hereby deleted in its entirety.
|
|
k)
|
Section
5.1(a)(iii)
is
hereby amended and restated in its entirety as
follows:
|
“(iii)
from the date of achievement of Milestone 2 until March 31, 2008, Dow shall,
at
the request of MCEL, make available at a maximum one (1) FTE to use commercially
reasonable efforts to (i) perform each of the incomplete Dow Consumer Tasks
set
forth in Section 5.2(f) and (i), respectively, and (ii) provide commercial
and
technical services from Dow’s current resources related to the characterization
of chemicals, chemical processes, plastics, and plastic parts with respect
to
the then-applicable commercially reasonable efforts of Dow under Section 5.2;
provided,
however,
that in
no event will Dow be obligated to make available any FTEs after Dow has provided
MCEL with a total of [***] person hours from the date of the achievement of
Milestone 2.”
|
l)
|
Section
5.2(d)
and Section
5.2(e)
are hereby deleted in their
entirety.
|
|
m)
|
Section
5.2(i)
is
hereby amended and restated in its entirety as
follows:
|
“(i)
Dow
Consumer Tasks - Milestone 3.
To the
extent required by Section 5.1 above, from the date of achievement of Milestone
2 until the achievement of the Consumer Objectives contained in Milestone 3,
Dow
Consumer Tasks shall include (i) assisting MCEL to develop the Consumer
Prototype; and (ii) assisting MCEL in its identification and discussions with
potential licensees.”
|
n)
|
Section
5.2(j)
is
hereby deleted in its entirety.
|
|
o)
|
Section
6.1(f)
is
hereby amended and restated in its entirety as
follows:
|
“(f)
Upon
Achievement of Milestone 3.
Upon
the achievement of Milestone 3, at the Fourth Closing (as defined in the Stock
Purchase Agreement) MCEL shall issue to Dow, and Dow shall accept (subject
to
the terms of the Stock Purchase Agreement) such number of shares of Common
Stock
that equal the greater of: (i) a 1% Ownership Interest, or (ii) the number
of
shares of Common Stock that could be purchased for $250,000, based upon a
per-share purchase price equal to the VWAP for the thirty (30)-trading day
period immediately preceding the issuance thereof; provided,
however,
that
the Company may, at its option, satisfy its obligations under this Section
6.1(f) by paying to Dow an amount in cash equal to the value of such shares
of
Common Stock otherwise issuable pursuant to this Section 6.1(f), with such
value
to be determined based on the VWAP of the Common Stock for the thirty
(30)-trading day period immediately preceding the date such shares would
otherwise be issued.”
-3-
|
p)
|
Section
6.1(g)
is
hereby deleted in its entirety.
|
|
q)
|
Section
6.2(a)
is
hereby modified by deleting “or any Milestone” and substituting “Milestone
1 or Milestone 2” therefor.
|
|
r)
|
Section
6.2(b)
is
hereby modified by inserting “or Common Stock” after “any Series A
Preferred Stock”.
|
|
s)
|
Section
6.2(c) is hereby amended and restated in its entirety as
follows:
|
“Excess
Shares.
Subject
to the terms of the Stock Purchase Agreement, if, at any time during the term
of
this Agreement, an issuance of Series A Preferred Stock or Series B Preferred
Stock (or shares of Common Stock issuable upon conversion thereof or upon the
exercise of Warrants) or Common Stock would result in Dow holding greater than
a
19.9% Ownership Interest in respect of Series A Preferred, Series B Preferred,
Warrants and Common Stock acquired pursuant to the terms of the Stock Purchase
Agreement, then the amount of Series A Preferred Stock, Series B Preferred
Stock
or Common Stock, as applicable, in excess of Dow’s 19.9% Ownership Interest (the
“Excess
Shares”)
shall
be held in reserve by MCEL. Dow shall have the right, at any time and from
time
to time, when Dow’s Ownership Interest is less than 19.9%, to receive or
purchase such Excess Shares, in whole or in part, upon the same terms and
conditions that Dow would have received or purchased such Excess Shares at
the
time of the initial offering of such Excess Shares.”
|
t)
|
Section
9.2
is
hereby deleted in its entirety.
|
|
u)
|
Section
9.5(a)
is
hereby modified by deleting the words “, Milestone 3 or Milestone 4” and
substituting “or Milestone 3”
therefor.
|
|
v)
|
Section
11.4(ii)
is
hereby modified by (i) deleting the words “any Subsequent Closing (as
defined in the Stock Purchase Agreement)” and substituting the words “the
Second Closing or the Third Closing (each, as defined in the Stock
Purchase Agreement)” therefor and (ii) deleting the words “such Subsequent
Closing” and substituting the words “the Second Closing or the Third
Closing, as applicable” therefor.
|
-4-
|
w)
|
Section
11.5(b)
is
hereby modified by inserting the words “or Common Stock” after “Series A
Preferred Stock”.
|
|
x)
|
Section
13.6
is
hereby modified by deleting the words “King & Spalding LLP, 0000
Xxxxxxxxxxxx Xxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxx
Xxxxxxx,
Facsimile: 202.626.3737” and inserting the words “Xxxxxxxxx & Xxxxxxx
LLP, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000, Attention:
Xxxxx Xxxxxxx, Facsimile: 202.662.6000”
therefor.
|
|
y)
|
Section
13.7
is
hereby modified by deleting the word “Shares” and substituting the words
“Preferred Shares” therefor.
|
|
z)
|
The
defined term “Application”
in Exhibit
A
is
hereby amended and restated in its entirety as
follows:
|
“Application”
means
(A) production of hydrogen gas by storing and chemically converting
boron-hydride, alkali metal hydride, alkaline earth metal hydride, or
aluminohydride fuel formulations into hydrogen by (1) controlling the contact
of
an alkaline aqueous boron hydride solution with a contained solid catalyst
comprised of a transition metal adhered to a substrate which promotes the
chemical reaction between the boron hydride and water to release hydrogen gas;
and/or (2) [***];
and/or (3) [***];
and (B)
interconnections and related control strategies for the integration of a fuel
cell and hydrogen generator systems for delivery of hydrogen gas produced by
one
of these means for conversion to power by a fuel cell.”
|
aa)
|
The
defined term “Dow
Consumer Task”
in Exhibit
A
is
hereby modified by deleting the words “and 5.2(j)” and inserting the word
“and” between “5.2(h)” and
“5.2(i).”
|
|
bb)
|
The
defined term “Dow
Military Task”
in Exhibit
A
is
hereby modified by deleting the words “, 5.2(d) and 5.2(e)” and inserting
the word “and” between “5.2(b)” and
“5.2(c).”
|
|
cc)
|
The
defined term “MCEL
Consumer Task”
in Exhibit
A
is
hereby modified by deleting the words “and 4.2(j)” and inserting the word
“and” between “4.2(h)” and
“4.2(i).”
|
|
dd)
|
The
defined term “MCEL
Military Task”
in Exhibit
A
is
hereby modified by deleting the words “, 4.2(d) and 4.2(e)” and inserting
the word “and” between “4.2(b)” and
“4.2(c).”
|
|
ee)
|
The
following defined term shall be added to Exhibit
A:
|
-5-
“Sale
or Merger”
means
any of the following:
(A) the
merger, reorganization or consolidation of MCEL or such subsidiary or
subsidiaries of MCEL the assets of which constitute all or substantially all
the
assets of the business of MCEL and its subsidiaries taken as a whole into or
with another corporation, partnership, joint venture, limited liability company,
or other entity, in which MCEL’s stockholders holding the right to vote
generally in the election of directors, general partners, managing members
or
individuals holding similar positions (“MCEL’s
Voting Power”)
immediately preceding such merger, reorganization or consolidation (solely
by
virtue of their shares or other securities of MCEL or such subsidiaries) shall
own less than fifty percent (50%) of the securities of the surviving
corporation, partnership, joint venture, limited liability company, or other
entity entitled to vote generally in the election of directors, general
partners, managing members or individuals holding similar
positions;
(B) the
sale,
transfer or lease (but not including a transfer or lease by pledge or mortgage
to a bona fide lender) of all or substantially all the assets of MCEL, whether
pursuant to a single transaction or a series of related transactions or plan
(which assets shall include for these purposes the assets of MCEL’s
subsidiaries); or
(C) the
sale
or transfer, whether in a single transaction or a series of related
transactions, of securities of MCEL such that MCEL’s stockholders holding MCEL’s
Voting Power immediately prior to such sale or transfer or series of transfers
cease to hold a majority of XXXX’s Voting Power after such sale or transfer or
series of transfers.”
|
ff)
|
The
Milestone
Table
in
Exhibit
B
is
hereby modified by deleting the last two rows and adding a new last
row
beginning with “3” and containing the following text in its second
column:
|
“Milestone
3 will be achieved upon the occurrence of the Consumer Objective set forth
in
either subsection (a) or (b) below:
| (a) |
Development
of a solid state hydrogen generation system (Solid State HOD™) prototype
to demonstrate hydrogen storage capability which is adequate to address
significant consumer electronics markets;
or
|
| (b) |
Secure
a relationship with a consumer electronics OEM that has over $500
million
in revenues with capability to commercialize Solid State HOD™ products.”
|
| 3) |
The
Company hereby irrevocably waives its right to terminate the JDA
pursuant
to Section
11.4(ii)
of
the JDA as a result of TDCC’s failure to make a Minimum Series B
Investment (as defined in the JDA) in connection with the achievement
of
Milestone 2 (as defined in the JDA).
|
-6-
Stock
Purchase Agreement
| 4) |
Pursuant
to Section 9.9 of the SPA, TDCC and the Company hereby consent to
amend
the SPA, and the SPA is hereby amended, as
follows:
|
|
a)
|
The
fourth “WHEREAS”
clause is hereby amended by (i) deleting “, 3 and 4” and substituting “and
3” therefor and (ii) inserting “or Common Stock” after “Series A
Preferred”.
|
|
b)
|
Section
1.3(c)
is
hereby amended by adding the words “provided,
further,
that the number of shares of Series A2-2 Preferred issued at the
Third
Closing shall
be
reduced to the extent necessary so that such issuance does not result
in
result in the Purchaser beneficially owning (as determined in accordance
with Rule 13d-3 under the Exchange Act) in excess of 9.9% of the
outstanding Common Stock (as determined in accordance with Rule 13d-3
under the Exchange Act)”.
|
|
c)
|
Section
1.4(a)
is
amended and restated in its entirety as
follows:
|
the
Company shall issue to the Purchaser, and the Purchaser may choose to accept
(at
its sole discretion, subject to Section
1.8
and
Section
1.9),
a
number of shares of Common Stock equal to the greater of: (i) a 1% Ownership
Interest, or (ii) the number of shares of Common Stock that could be purchased
for $250,000, based upon a per-share purchase price equal to the VWAP of the
Common Stock for the thirty (30)-trading day period immediately preceding the
issuance thereof, but not in any event to exceed a maximum 2% Ownership
Interest; provided,
however,
that
the Company may, at its option, satisfy its obligations under this Section
1.4(a)
by
paying to the Purchaser an amount in cash equal to the value of such shares
of
Common Stock otherwise issuable pursuant to this Section
1.4(a),
with
such value to be determined based on the VWAP of the Common Stock for the thirty
(30)-trading day period immediately preceding the date such shares would
otherwise be issued; provided further
that if
the Company proposes to satisfy its obligations under this Section 1.4(a) by
issuing shares of Common Stock to TDCC, if and to the extent that such issuance
would result in the Purchaser beneficially owning (as determined in accordance
with Rule 13d-3 under the Exchange Act) in excess of 9.9% of the outstanding
Common Stock (as determined in accordance with Rule 13d-3 under the Exchange
Act), the
Company shall issue only such number of shares of Common Stock as does not
cause
Purchaser to beneficially own in excess of 9.9% of the outstanding Common Stock,
and shall pay Purchaser an amount in cash equal to the value of the number
of
shares of Common Stock the issuance of which would cause Purchaser to
beneficially own in excess of 9.9% of the outstanding Common Stock, with such
value to be determined based on the VWAP of the Common Stock for the thirty
(30)-trading day period immediately preceding the applicable issuance of Common
Stock.”
-7-
|
d)
|
Section
1.4(b),
Section
1.4(c),
and Section
1.5
are hereby deleted in their
entirety.
|
|
e)
|
Section
1.6
is
hereby modified by (i) deleting the words “and the Fifth Closing”, (ii)
inserting the word “and” immediately after the words “the Third Closing”,
(iii) deleting the words “and the Fifth Closing Date”, (iv) inserting the
word “and” immediately after the words “the Third Closing Date” and (v)
deleting the words “King & Spalding LLP, 0000 Xxxxxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, XX 00000” and substituting “Xxxxxxxxx & Xxxxxxx LLP,
0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000”
therefor.
|
|
f)
|
Section
1.7
is
hereby modified by deleting the words “the Fourth Closing or the Fifth
Closing” and by inserting the word “or” immediately after the words “the
Second Closing”.
|
|
g)
|
Section
1.8
is
hereby modified by inserting “or Common Stock” after “any Series A
Preferred”.
|
|
h)
|
Section
1.9
is
hereby amended and restated in its entirety as
follows:
|
“Excess
Shares.
If, at
any time during the term of this Agreement, an issuance of Preferred Shares
(or
shares of Common Stock issuable upon conversion thereof or upon the exercise
of
Warrants) or shares of Common Stock in accordance with this Section
1
would
result in the Purchaser owning greater than a 19.9% Ownership Interest in
respect of Series A Preferred, Series B Preferred, Warrants and Common Stock
acquired pursuant to the terms of this Agreement, then the amount of Preferred
Shares or shares of Common Stock, as applicable, in excess of the Purchaser’s
19.9% Ownership Interest (the “Excess
Shares”)
shall
be held in reserve by the Company. The Purchaser shall have the right, at any
time and from time to time, when the Purchaser’s Ownership Interest is less than
19.9%, to receive or purchase such Excess Shares, in whole or in part, upon
the
same terms and conditions that the Purchaser would have received or purchased
such Excess Shares at the time of the initial offering of such Excess Shares;
provided, however, that in no event shall the Purchaser be entitled to receive
or purchase Excess Shares pursuant to this Section 1.9 in an amount that, by
virtue of such receipt or purchase, would result in the Purchaser owning greater
than a 19.9% Ownership Interest in respect of Series A Preferred, Series B
Preferred, Warrants, and Common Stock acquired pursuant to the terms of this
Agreement.”
|
i)
|
The
following defined term is hereby added to Section
1.10:
|
“Exchange
Act”
means
the Securities Exchange
Act
of 1934,
as amended.
-8-
|
j)
|
The
defined term “Milestone
Target Payment Date”
in Section
1.10
is
hereby modified by deleting the last row of the table contained
therein.
|
|
k)
|
Section
4.1
is
hereby modified by deleting the word “or” and inserting “, or Common
Stock,” after “Warrants”.
|
|
l)
|
Section
4.2
is
hereby deleted in its entirety.
|
|
m)
|
Section
4.6(a)
is
hereby deleted in its entirety.
|
|
n)
|
Section
4.10(a)
is
hereby modified by deleting the words “, Milestone 3 and Milestone 4” and
substituting the words “and Milestone 3”
therefor.
|
|
o)
|
Section
7.2(a)
is
hereby modified by deleting the words “Fifth Closing” and substituting the
words “Fourth Closing” therefor.
|
|
p)
|
Section
7.2(f)
is
hereby modified by deleting the words “Fifth Closing” and substituting the
words “Fourth Closing” therefor.
|
|
q)
|
Section
7.2(g)
is
hereby modified by deleting the words “Fifth Closing” and substituting the
words “Fourth Closing” therefor.
|
|
r)
|
Section
7.2(h)
is
hereby modified by deleting the words “any Subsequent Closing” and
substituting “the Second Closing or the Third Closing”
therefor.
|
|
s)
|
Section
7.3(b)
is
hereby modified by (i) inserting the words “or Common Stock” after “Series
A Preferred” in clause (i)(b) and (ii) inserting the words “or Common
Stock” after “Preferred Shares” in clause
(ii).
|
|
t)
|
Section
9.6
is
hereby modified by deleting the words “King & Spalding LLP, 0000
Xxxxxxxxxxxx Xxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxx
Xxxxxxx,
Facsimile: 202.626.3737” and inserting the words “Xxxxxxxxx & Xxxxxxx
LLP, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000, Attention:
Xxxxx Xxxxxxx, Facsimile: 202.662.6000”
therefor.
|
|
u)
|
Section
9.9
is
hereby modified by deleting the word “Shares” and substituting the words
“Preferred Shares” therefor.
|
| 5) |
The
Company hereby irrevocably waives its right to terminate the SPA
pursuant
to Section
7.2(h)
of
the SPA as a result of TDCC’s failure to make a Minimum Series B
Investment (as defined in the SPA) in connection with the achievement
of
Milestone 2.
|
Investor
Rights Agreement
| 6) |
TDCC
and the Company agree that the IRA is hereby terminated pursuant
to
Section 5.7 thereof, effective as of the date hereof.
|
-9-
Registration
Rights Agreement
| 7) |
Pursuant
to Section 5.5 of the RRA, TDCC and the Company hereby consent to
amend
the RRA, and the RRA is hereby amended, as
follows:
|
|
a)
|
The
defined term “Registrable
Securities”
in Section
1
is
hereby modified by deleting the word “or” immediately preceding subsection
(ii) and inserting the following after the words “clause (i)
above”:
|
“or
(iii)
the Fourth Closing (as such term is defined in the Purchase
Agreement),”
|
b)
|
The
defined term “Special
Counsel”
in Section
1
is
hereby modified by deleting the words “King & Spalding LLP” and
substituting the words “Xxxxxxxxx & Xxxxxxx LLP”
therefor.
|
|
c)
|
Section
5.4
is
hereby modified by deleting the words “King & Spalding LLP, 0000
Xxxxxxxxxxxx Xxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxx
Xxxxxxx,
Facsimile: 202.626.3737” and inserting the words “Xxxxxxxxx & Xxxxxxx
LLP, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000, Attention:
Xxxxx Xxxxxxx, Facsimile: 202.662.6000”
therefor.
|
| 8) |
TDCC
and the Company hereby consent to amend the Letter Agreement, and
the
Letter Agreement is hereby amended, as
follows:
|
|
a)
|
Section
1
is
hereby amended and restated in its entirety as
follows:
|
“1.
Notwithstanding
anything contained in the Series B Certificate, The Dow Chemical Company
(“TDCC”),
hereby irrevocably waives any right to any adjustment to the Applicable
Conversion Price pursuant to the provisions contained in Section d(7) thereof
as
a result of any event that occurs on or after July 25, 2007, provided,
however,
that,
notwithstanding the foregoing, TDCC and the Company hereby agree that, as of
July 25, 2007 and at all times thereafter, in the event the Company issues
any
Additional Shares of Common Stock (as
defined in the Series B Certificate)
following July 25, 2007, at a per share consideration less than the Series
B-1
Conversion Price (as defined in the Series B Certificate) then in effect, then
the Series B-1 Conversion Price shall be reduced, concurrently with such
issuance, to a price (calculated to the nearest cent) determined by multiplying
such Series B-1 Conversion Price by a fraction:
(A)
the
numerator of which shall be the number of shares of Common Stock (as defined
in
the Series B Certificate) outstanding immediately prior to such issuance plus
the number of shares of Common Stock issuable upon conversion of all Common
Stock Equivalents (as defined in the Series B Certificate) outstanding
immediately prior to such issuance plus the number of shares of Common Stock
which the aggregate consideration received by the Company for the total number
of Additional Shares of Common Stock in such issuance would purchase at the
Series B-1 Conversion Price in effect immediately prior to such issuance; and
-10-
(B)
the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance plus the number of shares of Common Stock
issuable upon conversion of all Common Stock Equivalents outstanding immediately
prior to such issuance plus the number of such Additional Shares of Common
Stock
so issued.”
Waiver
of Series A2 Anti-dilution protection
| 9) |
Notwithstanding
anything contained in the Series A2 Certificate, TDCC hereby irrevocably
waives any right to any adjustment to the Series A2-2 Conversion
Price (as
defined in the Series A2 Certificate) pursuant to the provisions
contained
in Section d(7)(iii) thereof as a result of any event that occurs
on or
after July 25], 2007, provided,
however,
that TDCC and the Company hereby agree that as of July 25, 2007 and
at all
times thereafter, in the event the Company issues any Additional
Shares of
Common Stock (as
defined in the Series A2 Certificate)
following July 25, 2007, at a per share consideration less than the
Series
A2-2 Conversion Price (as
defined in the Series A2 Certificate)
then in effect, then the Series A2-2 Conversion Price shall be reduced,
concurrently with such issuance, to a price (calculated to the nearest
cent) determined by multiplying such Series A2-2 Conversion Price
by a
fraction:
|
(A)
the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance plus the number of shares of Common Stock
issuable upon conversion of all Common Stock Equivalents (as defined in the
Series A2 Certificate) outstanding immediately prior to such issuance plus
the
number of shares of Common Stock which the aggregate consideration received
by
the Company for the total number of Additional Shares of Common Stock in such
issuance would purchase at the Series A2-2 Conversion Price in effect
immediately prior to such issuance; and
(B)
the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance plus the number of shares of Common Stock
issuable upon conversion of all Common Stock Equivalents outstanding immediately
prior to such issuance plus the number of such Additional Shares of Common
Stock
so issued.
| 10) |
TDCC
hereby agrees that it will not sell, transfer or otherwise dispose
of any
shares of Series A2-2 Preferred Stock unless the transferee expressly
assumes this agreement in connection with such sale, transfer or
disposition.
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-11-
Except
as
specifically amended by this letter agreement, each of the JDA, SPA, RRA and
Letter Agreement shall continue in full force and effect in accordance with
their respective terms.
The
execution and delivery by the Company of this letter agreement and compliance
by
the Company with the provisions hereof do not and will not (a) conflict
with or result in a breach of the certificate of incorporation, bylaws of the
Company, (b) violate any agreement to which the Company is a party, or (c)
require the consent or approval of any third party.
This
letter agreement may be executed in one or more counterparts, each of which,
when executed and delivered, shall be an original, but all of which together
shall constitute but one and the same instrument. This letter agreement may
also
be executed via facsimile, which shall be deemed to be an original.
This
letter agreement shall be governed by and construed in accordance with the
laws
of the State of Delaware without regard to its principles of conflicts of
laws.
The
parties agree that the remedy at law for any breach of this letter agreement
may
be inadequate, and that, as among TDCC and the Company, any party by whom this
letter agreement is enforceable shall be entitled to specific performance in
addition to any other appropriate relief or remedy. Such party may, in its
sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunctive or such other relief as such court may deem just and proper in
order to enforce this agreement as among TDCC and the Company, or prevent any
violation hereof, and, to the extent permitted by applicable law, as among
TDCC
and the Company, each party waives any objection to the imposition of such
relief.
[Signature
page follows]
-12-
Please
sign in the space provided below and return a copy to the undersigned to confirm
your agreement to the foregoing.
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Very
truly yours
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| By: | /s/ Xxxx X. Xxxxxx | |
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Name:
Xxxx X. Xxxxxx, CPA
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Title:
Chief Financial Officer
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Agreed
to and acknowledged:
THE
DOW CHEMICAL COMPANY
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| By: /s/ Xxxxx X. Xxxxxx | |||
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Name:
Xxxxx X. Xxxxxx
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Title:
Authorized Representative
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