EXHIBIT 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of November o, 2016,
by and among Midwest Energy Emissions Corp., a Delaware corporation, with its
principal offices located at 670 D Enterprise Drive, Lewis Center, Ohio 43035
(the “Company”), and the investors identified in their respective “Investor
Signature Page” attached hereto (together with the Company, the “Parties”).

 

RECITALS

 

WHEREAS, in connection with the Stock Purchase Agreement of even date by and
among the Company and the investors identified in their respective “Buyer
Signature Page” attached thereto herewith (the “Stock Purchase Agreement”), the
Company has agreed, upon the terms and subject to the conditions of the Stock
Purchase Agreement, to issue and sell to each investor identified in their
respective “Buyer Signature Page” attached thereto shares (“Common Shares”) of
the Company’s common stock, par value $0.001 per share (the “Common Stock”);

 

WHEREAS, in accordance with the terms of the Stock Purchase Agreement, the
Company has agreed to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any
similar successor statute (collectively, the “1933 Act”).

 

AGREEMENT

 

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 Stock 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, Federal holiday 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 Stock Purchase
Agreement.

 

(c) “Effective Date” means the date on which a Registration Statement, through
which Registrable Shares shall be registered, has been declared effective by the
SEC.

 

(d) “Effectiveness Deadline” means (i) in the event that the Registration
Statement is not subject to review by the Staff, the earlier of (x) sixty (60)
days after the Closing Date, and (y) five (5) Trading Days following the date on
which the Staff notifies the Company that the Registration Statement is not
subject to review, (ii) in the event that the Registration Statement is subject
to review by the Staff, (x) one hundred twenty (120) days after the Closing
Date, and (y) five (5) Trading Days following the date on which the Staff
notifies the Company that it has no further comments on the Registration
Statement, and (iii) with respect to any additional Registration Statements
required to be filed pursuant to Section 2(b), the Effectiveness Deadline
specified in Section 2(b).

 

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(e) “Filing Deadline” means thirty-five (35) days after the Closing Date. If the
Filing Deadline falls on a Saturday, Sunday or other day that the SEC is closed
for business, the Filing Deadline shall be extended to the next business day on
which the SEC is open for business.

 

(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 for so long as any of the foregoing
continues to hold Registrable Shares.

 

(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) “Principal Market” means The OTCQB.

 

(i) “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.

 

(j) “Registrable Shares” means the Common Shares, and any shares of capital
stock of the Company issued or issuable with respect to the Common Shares as a
result of any stock split, stock dividend, recapitalization, exchange or similar
event.

 

(k) “Registration Statement” means a registration statement or registration
statements of the Company filed under the 1933 Act covering Registrable Shares.

 

(l) “Required Holders” means holders of at least a majority of the Registrable
Shares.

 

(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.

 

(o) “Staff” means the staff of the Division of Corporation Finance at the SEC.

 

(p) “Trading Day” means any day on which the Common Stock is traded on the
Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or
securities market on which the Common Stock is then traded; provided that
“Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York time).

 

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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-1 covering the resale by the Investors of
the Registrable Shares as of the date the Registration Statement is initially
filed with the SEC. The Registration Statement shall contain (except if
otherwise directed by the Required Holders or required in order to address
comments to the Registration Statement received from the Staff) the “Selling
Stockholders” and “Plan of Distribution” sections in substantially the form
attached hereto as Exhibit B. The Company shall use its commercially reasonable
efforts to have the Registration Statement declared effective by the SEC as soon
as practicable, but in no event later than the Effectiveness Deadline. By 5:30
p.m. (Eastern time) on the second Business Day following the Effective Date, the
Company shall file with the SEC, in accordance with Rule 424 under the 1933 Act,
the final prospectus to be used in connection with sales pursuant to such
Registration Statement.

 

(b) Piggyback Registrations. Without limiting any obligation of the Company
hereunder or under the Stock Purchase Agreement, if there is not an effective
Registration Statement covering all of the Registrable Shares or the prospectus
contained therein is not available for use and the Company shall determine to
prepare and file with the SEC a registration statement relating to an offering
of its Common Stock for its own account or the account of others under the 1933
Act of any of its equity securities (other than in connection with any dividend
or distribution reinvestment or similar plan or on Form S-4, F-4 or Form S-8
(each as promulgated under the 1933 Act) or their then equivalents relating to
equity securities to be issued solely in connection with any acquisition of any
entity or business, other business combination or equity securities issuable in
connection with the Company’s stock or stock option or other employee benefit
arrangement) (a “Piggyback Registration”), then the Company shall deliver to
each Investor a written notice of such determination no later than twenty (20)
days prior to the filing of such registration statement and if any such Investor
shall so request in writing within ten (10) days after the Company’s notice has
been given to such Investor, the Company shall include in such registration
statement all or any part of such Registrable Shares such Investor requests to
be registered; provided, however, the Company shall not be required to register
any Registrable Shares pursuant to this Section 2(b) that are eligible for
resale, or have been resold, pursuant to Rule 144 without restriction
(including, without limitation, volume restrictions) and without the need for
current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if
applicable) or that are the subject of a then-effective Registration Statement.

 

If a Piggyback Registration is initiated as a primary underwritten offering on
behalf of the Company and the managing underwriter advises the Company and the
holders of Registrable Shares (if any holders of Registrable Shares have elected
to include Registrable Shares in such Piggyback Registration) in writing that in
its opinion the number of Common Shares proposed to be included in such
registration, including all Registrable Shares and all other Common Shares
proposed to be included in such underwritten offering, exceeds the number of
Common Shares which can be sold in such offering and/or that the number of
Common Shares proposed to be included in any such registration would adversely
affect the price per share of the Common Shares to be sold in such offering, the
Company shall include in such registration (i) first, the number of Common
Shares that the Company proposes to sell; (ii) second, the number of Common
Shares requested to be included therein by holders of Common Shares (other than
holders of Registrable Shares), allocated among such holders pro rata in such
manner as they may agree; and (iii) third, the number of Common Shares requested
to be included therein by holders of Registrable Shares, allocated pro rata
among all such holders on the basis of the number of Registrable Shares owned by
each such holder or in such manner as they may otherwise agree.

 

If a Piggyback Registration is initiated as an underwritten offering on behalf
of a holder of Common Shares other than Registrable Shares, and the managing
underwriter advises the Company in writing that in its opinion the number of
shares of Common Shares proposed to be included in such registration, including
all Registrable Shares and all other Common Shares proposed to be included in
such underwritten offering, exceeds the number of Common Shares which can be
sold in such offering and/or that the number of Common Shares proposed to be
included in any such registration would adversely affect the price per Common
Share to be sold in such offering, the Company shall include in such
registration (i) first, the number of Common Shares requested to be included
therein by the holder(s) requesting such registration and the holders of
Registrable Shares, allocated pro rata among such holders on the basis of the
number of Common Shares and the number of Registrable Shares, as applicable,
owned by all such holders or in such manner as they may otherwise agree; and
(ii) second, the Common Shares requested to be included therein by other holders
of Common Shares, allocated among such holders in such manner as they may agree.

 

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If any Piggyback Registration is initiated as a primary underwritten offering on
behalf of the Company, the Company shall select the investment banking firm or
firms to act as the managing underwriter or underwriters in connection with such
offering.

 

(c) Rule 415; Cutback. If at any time the Staff takes the position that the
offering of some or all of the Registrable Shares in a Registration Statement is
not eligible to be made on a delayed or continuous basis under the provisions of
Rule 415 under the 1933 Act or requires any Investor to be named as an
“underwriter”, the Company shall use commercially reasonable efforts to persuade
the Staff that the offering contemplated by the Registration Statement is a
valid secondary offering and not an offering “by or on behalf of the issuer” as
defined in Rule 415 and that none of the Investors are “underwriters.” In the
event that, despite the Company’s commercially reasonable efforts and compliance
with the terms of this Section 2(b) , the Staff refuses to alter its position,
the Company shall (i) remove from the Registration Statement, such portion of
the Registrable Shares (the “Cut Back Shares”) and/or (ii) agree to such
restrictions and limitations on the registration and resale of the Registrable
Shares as the Staff may require to assure the Company’s compliance with the
requirements of Rule 415 (collectively, the “SEC Restrictions”); provided,
however, that the Company shall not agree to name any Investor as an
“underwriter” in such Registration Statement without the prior written consent
of such Investor. Any cut-back of a portion of the Registrable Shares pursuant
to this Section 2(b) shall be allocated among the Investors on a pro rata basis,
unless the SEC Restrictions otherwise require or provide or the Required Holders
otherwise agree. No liquidated damages shall accrue as to any Cut Back Shares
until such date as the Company is able to effect the registration of such Cut
Back Shares in accordance with any SEC Restrictions (such date, the “Restriction
Termination Date” of such Cut Back Shares). In furtherance of the foregoing,
each Investor shall provide the Company with prompt written notice of its sale
of substantially all of the Registrable Shares under the Registration Statement
such that the Company will be able to file one or more additional registration
statements covering the Cut Back Shares. From and after the Restriction
Termination Date applicable to any Cut Back Shares, all of the provisions of
this Section 2 shall again be applicable to such Cut Back Shares; provided,
however, that (i) the Filing Deadline for the Registration Statement including
such Cut Back Shares shall be ten (10) Business Days after such Restriction
Termination Date and (ii) the Effectiveness Deadline with respect to such Cut
Back Shares shall be the earlier of (A) sixty (60) days after the Restriction
Termination Date and (B) five (5) Trading Days following the date on which the
Staff notifies the Company that either (x) such Registration Statement is not
subject to review or (y) the Staff has no further comments to such Registration
Statement.

 

(d) Form S-3. The Company undertakes to register the Registrable Shares on Form
S-3 as soon as such form is available for use by the Company, provided that if
the Registration Statement is on Form S-1, the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Registrable Shares has been
declared effective by the SEC.

 

(e) Effect of Failure to Obtain and Maintain Effectiveness of Registration
Statement. Subject to Section 2 (b) , if (i) a Registration Statement covering
all of the Registrable Shares required to be covered thereby and required to be
filed by the Company pursuant to this Agreement is not declared effective by the
SEC on or before the Effectiveness Deadline (an “Effectiveness Failure”); or
(ii) on any day after the Effective Date sales of all of the Registrable Shares
required to be included on such Registration Statement cannot be made (other
than (x) during an Allowable Grace Period (as defined in Section 3(n) ) or (y)
if the Registration Statement is on Form S-1, for a period of fifteen (15) days
following the date on which the Company files a post-effective amendment to
incorporate the Company’s Annual Report on Form 10-K) pursuant to such
Registration Statement (including, without limitation, because of a failure to
keep such Registration Statement effective, failure to disclose such information
as is necessary for sales to be made pursuant to such Registration Statement or
failure to register a sufficient number of shares of Common Stock) (a
“Maintenance Failure”) then, in satisfaction of the damages to any holder of
Registrable Shares by reason of any such delay in or reduction of its ability to
sell the Common Shares (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each such
holder of Registrable Shares relating to such Registration Statement an amount
in Common Stock equal to one percent (1.0%) of the aggregate Common Shares
purchased of such Investor’s Registrable Shares included in such Registration
Statement on each of the following dates: (i) the day of an Effectiveness
Failure and on every thirtieth (30th) day thereafter until such Effectiveness
Failure is cured; and (ii) the initial day of a Maintenance Failure and on every
thirtieth (30th) day thereafter until such Maintenance Failure is cured. The
Common Stock to which a holder shall be entitled pursuant to this Section 2 (e)
are referred to herein as “Registration Delay Payments.” 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%) of such unpaid Registration Delay
Payment per month until paid in full. Notwithstanding anything to the contrary
herein or in the Stock Purchase Agreement, in no event shall the aggregate
amount of Registration Delay Payments exceed, in the aggregate, ten percent
(10%) of the aggregate Common Shares purchased.

 

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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(b) or 2(d) , the Company will use its
commercially reasonable efforts to effect the registration of the Registrable
Shares 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 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 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 Shares covered by such Registration Statement without restriction
pursuant to Rule 144 (or any successor thereto) promulgated under the 1933 Act,
or (ii) the date on which the Investors shall have sold all of the Registrable
Shares covered by such Registration Statement (the “Registration Period”). The
Company shall 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 necessary
to make the statements therein, in the light of the circumstances in which they
were made, not misleading.

 

(b) The Company shall (i) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the Rule 424 prospectus used in connection with such Registration
Statement as may be necessary to keep such Registration Statement effective at
all times during the Registration Period, and (ii) during such period, comply
with the provisions of the 1933 Act with respect to the disposition of all
Registrable Shares covered by such Registration Statement until such time as all
of such Registrable Shares shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers as set forth in such
Registration Statement.

 

(c) Upon the request of an Investor, the Company shall furnish to each Investor
whose Registrable Shares 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 an Investor, all exhibits and each preliminary
prospectus, (ii) upon the effectiveness of any Registration Statement, one copy
of the prospectus included in such Registration Statement and all amendments and
supplements thereto (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 Shares
owned by such Investor.

 

(d) The Company shall notify each Investor 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 a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact necessary to be stated therein 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 (n) , promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue statement or
omission, and deliver one copy of such supplement or amendment to each Investor
(or such other number of copies as such Investor may reasonably request).

 

(e) The Company shall use its commercially reasonable 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 Shares for sale in any jurisdiction. If such an order or suspension
is issued, the Company shall use its commercially reasonable efforts to obtain
the withdrawal of such order or suspension at the earliest possible moment, and
to notify each Investor who holds Registrable Shares being sold of the issuance
of such order and the resolution thereof, or its receipt of notice of the
initiation or threat of any proceeding for such purpose.

 

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(f) If any Investor is required under applicable securities law to be described
in the Registration Statement as an “underwriter,” upon the written request of
such Investor in connection with such Investor’s due diligence requirements, if
any, the Company shall make available for inspection by (i) such Investor and
its legal counsel and (ii) one firm of accountants or other agents retained 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 solely for the purpose of establishing a due diligence defense under
underwriter liability under the 1933 Act, and cause the Company’s officers,
directors and employees to supply all information in the possession of the
Company that 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 such 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, nonappealable 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 Transaction Document.
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, and cause its Inspector to 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 Shares in a manner which is
otherwise consistent with applicable laws and regulations.

 

(g) The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) the
disclosure of such information is necessary to comply with federal or state
securities laws, (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 by the Company of this Agreement or
any other agreement to which the Company is a party. 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.

 

(h) The Company shall use its commercially reasonable efforts either to cause
all of the Registrable Shares covered by a Registration Statement to be listed
on each securities exchange on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of such
Registrable Shares is then permitted under the rules of such exchange. The
Company shall pay all fees and expenses in connection with satisfying its
obligation under this Section 3 (h) .

 

(i) The Company shall cooperate with the Investors who hold Registrable Shares
being offered and, to the extent applicable, facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legend) representing
the Registrable Shares 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 the names of such
Investors.

 

(j) 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 Shares, including, without
limitation, information with respect to the number of Registrable Shares being
offered or sold, the purchase price being paid therefor and any other terms of
the offering of the Registrable Shares 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 Shares.

 

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(k) OMITTED.

 

(l) The Company shall otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.

 

(m) Within two (2) Business Days after a Registration Statement which covers
Registrable Shares 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 Shares (with copies to the Investors whose Registrable
Shares 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.

 

(n) Notwithstanding anything to the contrary herein, at any time after the
Effective Date, 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 commercially reasonable 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, nonpublic 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; provided further, such Grace Periods shall not
exceed an aggregate of sixty (60) days during any three hundred sixty five (365)
day period and the first day of any Grace Period must be at least five (5)
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) or the date
referred to in such notice. The provisions of Section 3(d) 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 Section 3(d) 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
Stock Purchase Agreement, in connection with any sale of Registrable Shares with
respect to which an Investor has entered into a contract for sale prior to the
Investor’s receipt of the notice of a Grace Period and for which the Investor
has not yet settled, and deliver a copy of the prospectus included as part of
the applicable Registration Statement (unless an exemption from such prospectus
delivery requirement exists)..

 

4. Obligations of the Investors.

 

(a) 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 information the Company requires from each such Investor if such Investor
elects to have any of such Investor’s Registrable Shares included in such
Registration Statement, including the number of Registrable Shares such Investor
wishes to include 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 Shares of a
particular Investor that (i) such Investor furnish to the Company such
information regarding itself, the Registrable Shares held by it (including the
number of Registrable Shares to be included in the Registration Statement) and
the intended method of disposition of the Registrable Shares held by it as shall
be reasonably required to effect the effectiveness of the registration of such
Registrable Shares, and (ii) the Investor 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 Shares,
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 Shares from
such Registration Statement.

 

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(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(d) or Section 3(e)
, such Investor will immediately discontinue disposition of Registrable Shares
pursuant to any Registration Statement(s) covering such Registrable Shares until
such Investor’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(b) 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 Stock Purchase
Agreement, in connection with any sale of Registrable Shares 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(d) or Section 3(e) , 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 or an exemption
therefrom in connection with sales of Registrable Shares pursuant to the
Registration Statement.

 

5. Expenses of Registration.

 

All reasonable expenses, other than underwriting discounts and commissions or
other charges of any broker-dealer acting on behalf of the Investors, 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.

 

6. Indemnification.

 

In the event any Registrable Shares are included in a Registration Statement
under this Agreement:

 

(a) To the fullest extent permitted by law, the Company will, and hereby does
agree to indemnify, hold harmless and defend each Investor, the directors,
officers, partners, employees and agents of, and each Person, if any, who
controls any Investor within the meaning of the 1933 Act or the Securities
Exchange Act of 1934, as amended (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, to which any of them is 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 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 light of the circumstances under which the statements therein were
made, not misleading, or (iii) any violation or alleged violation (i) by the
Company of the 1933 Act, or (ii) solely with respect to Claims indemnifiable
pursuant to Section 6(b), 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 Shares 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 reasonable and documented legal fees or other
reasonable and documented expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification contained in this Section 6(a)
shall not apply to: (w) a Claim sought by an Indemnified Person arising out of
or based upon a Violation that 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 Registration Statement or any such amendment thereof or supplement thereto;
(x) a Claim by an Indemnified Person arising out of or based on the use by an
Investor of an outdated or defective prospectus after the Company has notified
such Investor in writing that the prospectus is outdated or defective; (y) a
Claim by an Indemnified Person arising out of or based on an Investor’s (or any
other Indemnified Person’s) failure to send or give a copy of the prospectus or
supplement (as then amended or supplemented), if required (and not exempted) to
the Persons asserting an untrue statement or omission or alleged untrue
statement or omission at or prior to the written confirmation of the sale of
Registrable Shares; or (z) 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.

 

 8

 

  

(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, officers and
employees, each of the other holders of the Company’s securities covered by such
Registration Statement and each Person, if any, who controls the Company or any
other such Person within the meaning of the 1933 Act or the 1934 Act (each, an
“Indemnified Party”), against any Claims to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claims
arise out of or are based upon any Violation that 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 (or any
amendment thereof or supplement thereto) (it being understood that the Investor
has approved Exhibit B hereto for this purpose) and, subject to Section 6(c) ,
such Investor shall reimburse the Indemnified Party for any legal or other
expenses reasonably incurred by an Indemnified Party in connection with
investigating or defending any such Claim; provided, however, that the
indemnification 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, to the extent settled for cash, 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 the
Investor shall be liable under this Section 6(b) for only that amount of a Claim
as does not exceed the net proceeds to such Investor as a result of the sale of
Registrable Shares pursuant to such Registration Statement.

 

(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 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 all such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the Indemnified Person or
Indemnified Party, as applicable, the representation by such 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 Shares
included in the Registration Statement to which the Claim relates. The
Indemnified Party or Indemnified Person shall reasonably cooperate with the
indemnifying party in connection with any negotiation or defense of any such
action or proceeding or Claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified Party
or Indemnified Person that relates to such action or proceeding 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 that 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 and such
settlement shall not include any admission as to fault on the part of the
Indemnified Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights 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 or proceeding 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 or proceeding as a result of
such failure.

 

 9

 

 

(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.

 

(e) The indemnity agreements contained herein shall be in addition to any
liabilities the indemnifying party may be subject to pursuant to the law.

 

7. Contribution.

 

To the extent any indemnification contemplated hereby by an indemnifying party
is prohibited or limited by applicable law, the indemnifying party shall to the
extent permitted by applicable law contribute to the amount paid or payable by
such Indemnified Person or Indemnified Party as a result of such Claim in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party, on the one hand, and of the Indemnified Person or Indemnified Party, on
the other, in connection with such Violation. The relative fault of the
indemnifying party, on the one hand and of the Indemnified Person or Indemnified
Party, on the other hand, shall be determined by a court of law by reference to,
among other things, whether the Violation relates to information supplied or
actions undertaken by the indemnifying party, on the one hand, or by the
Indemnified Person or Indemnified Party, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such Violation; provided, that in no event shall any contribution by an
Investor hereunder exceed the amount of net proceeds to such Investor of the
Registrable Shares sold in any such Registration Statement. The amount paid or
payable by a party as a result of any Claim shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other reasonable fees or expenses incurred by such party in connection with any
proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in Section 6 was available to such
party in accordance with its terms. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Investors’ obligations to contribute pursuant to this
Section 7 are several and not joint.

 

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 adequate current public information(within the meaning of Rule
144) available during the Registration Period;

 

(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the 1934 Act so long as the Company remains
subject to such requirements, during the Registration Period; and

 

(c) furnish to each Investor so long as such Investor owns Registrable Shares,
promptly upon request during the Registration Period, (i) a written statement by
the Company, if true, that it has complied with the reporting requirements of
Rule 144 and the 1934 Act, (ii) a copy of the most recent annual or quarterly
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.

 

 10

 

  

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
Shares 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
within a reasonable time after such assignment; (ii) the Company is, within a
reasonable time 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 or 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 Stock
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; provided that any such amendment or waiver that complies with the
foregoing but that disproportionately, materially and adversely affects the
rights and obligations of any Investor relative to the comparable rights and
obligations of the other Investors shall require the prior written consent of
such adversely affected Investor. 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 Shares. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of this Agreement unless the same consideration is also offered to all
of the parties to this Agreement.

 

11. Miscellaneous.

 

(a) If the Company receives conflicting instructions, notices or elections from
two or more Persons with respect to the same Registrable Shares, the Company
shall act upon the basis of instructions, notice or election received from such
record owner of such Registrable Shares.

 

(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);
(iii) when sent, if sent by electronic mail; or (iv) one 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, facsimile
numbers and email addresses for such communications shall be:

 

 11

 

  

If to the Company:

 

Midwest Energy Emissions Corp.

670 D Enterprise Drive

Lewis Center, OH 43035

Telephone: (614) 505-6995

Facsimile:
Attention: Rich Gross

Email: rgross@midwestemissions.com

 

With a copy (for informational purposes only) to:

 

Kaye Cooper Kay & Rosenberg, LLP

30A Vreeland Road, Suite 230

Florham Park, NJ 07932

Telephone: (973) 443.0670
Facsimile: (973) 443.0609

Attention: David Kaye

E-mail: dmkaye@kcfkr.com

 

and

 

Kleinberg, Kaplan, Wolff & Cohen, P.C.

551 Fifth Avenue, 18th Floor

New York, NY 10176

Telephone: (212) 880-9869
Facsimile: (212) 986-8866

Attention: Jonathan Ain

E-mail: jain@kkwc.com

 

If to the Transfer Agent:

 

Transfer Online, Inc.

512 SE Salmon Street

Portland, OR 97214

Telephone: (503) 227.2950

Facsimile: (503) 227.6874

Attention: Carolyn Hall

E-mail: carolyn@transferonline.com

  

If to any Buyer:

 

At the address of such Buyer set forth on Exhibit A to the Stock Purchase
Agreement

 

With a copy to:

 

Sichenzia Ross Ference Kesner LLP

61 Broadway, 32nd Floor

New York, NY 10006

Telephone: (212) 930-9700
Facsimile: (212) 930-9725

Attention: Gregory Sichenzia

E-mail: gsichenzia@srff.com

 

 12

 

  

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 or email containing the time, date,
recipient facsimile number or recipient electronic email address, as applicable,
and an image of the first page of such transmission, if applicable, or (C)
provided by a courier or overnight courier service, shall be rebuttable evidence
of personal service, receipt by facsimile, receipt by email or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii), (iii) or (iv) above, as applicable.

 

(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.
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.

 

(e) If any provision of this Agreement is prohibited by law or otherwise
determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and
enforceable, and the invalidity or unenforceability of such provision shall not
affect the validity of the remaining provisions of this Agreement so long as
this Agreement as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that
would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as
possible to that of the prohibited, invalid or unenforceable provision(s).

 

(f) This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter, except
for, and as provided in the Transaction Documents.

 

(g) 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.

 

(h) The headings of this Agreement are for convenience of reference and shall
not form part of, or affect the interpretation of, this Agreement.

 

 13

 

  

(i) This Agreement and any amendments hereto may be executed and delivered in
two or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same agreement, and
shall become effective when counterparts have been signed by each party hereto
and delivered to the other parties hereto, it being understood that all parties
need not sign the same counterpart. In the event that any signature to this
Agreement or any amendment hereto is delivered by facsimile transmission or by
e-mail delivery of a “.pdf” format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
“.pdf” signature page were an original thereof. No party hereto shall raise the
use of a facsimile machine or e-mail delivery of a “.pdf” format data file to
deliver a signature to this Agreement or any amendment hereto or the fact that
such signature was transmitted or communicated through the use of a facsimile
machine or e-mail delivery of a “.pdf” format data file as a defense to the
formation or enforceability of a contract and each party hereto forever waives
any such defense.

 

(j) 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.

 

(k) 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.

 

(l) 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.

 

(m) 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.

 

(n) The obligations of each Investor hereunder are several and not joint with
the obligations of any other Investor, and no Investor shall be responsible in
any way for the performance of the obligations of any other Investor hereunder.
Nothing contained herein, and no action taken by any Investor pursuant hereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated herein.

 

* * * * * *

[Signature Page Follows]

 

 14

 

  

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:

 

 

 

 

MIDWEST ENERGY EMISSIONS CORP.

 

    By:

 

 

Name:   Title:     

COMPANY SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

 

 15

 

 

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.

 

BUYER:

 

INDIVIDUAL INVESTOR:

 

_________________________________________

(print name)

 

_________________________________________

(signature)

 

PARTNERSHIP, CORPORATION, TRUST, LIMITED LIABILITY COMPANY, CUSTODIAL ACCOUNT,
OR OTHER INVESTOR:

 

__________________________________________

(print name of entity)

 

By: _______________________________________

(signature of person signing on
behalf of entity)

 

Name: ____________________________________

 

Title: _____________________________________

 

Address for Notice:

_____________________________________

____________________________________

____________________________________

Tel: _________________________________

Fax:_________________________________

Email:________________________________

 

Address for Notice:

_____________________________________

_____________________________________

_____________________________________

Tel: __________________________________

Fax:__________________________________

Email: ________________________________

 

BUYER SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

 

 16

 

 

EXHIBIT A

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

 

Transfer Online, Inc.

512 SE Salmon Street

Portland, OR 97214

Attention: Carolyn Hall

 

Re: Midwest Energy Emissions Corp.

 

Ladies and Gentlemen:

 

[We are][I am] counsel to Midwest Energy Emissions Corp., a Delaware corporation
(the “Company”), and have represented the Company in connection with that
certain Stock Purchase Agreement, dated as of November o, 2016 (the “Stock
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 shares of the Company’s common stock, par value $0.001 per share
(the “Common Stock”) (the shares of Common Stock issuable pursuant to the terms
of the Stock Purchase Agreement, collectively, the “Common Shares”). Pursuant to
the Stock 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 resale of the
Registrable Shares (as defined in the Registration Rights Agreement), including
the Common Shares issuable pursuant to the Stock Purchase Agreement under the
Securities Act of 1933, as amended (the “1933 Act”). In connection with the
Company’s obligations under the Registration Rights Agreement, on ____________
___, 201__, the Company filed a Registration Statement on Form S-__ (File No.
333-_____________) (the “Registration Statement”) with the Securities and
Exchange Commission (the “SEC”) relating to the Registrable Shares that names
each of the Holders as a selling shareholder thereunder.

 

In connection with the foregoing, [we][I] advise you that a member of the SEC’s
staff has advised [us][me] 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][I] have no
knowledge, after telephonic inquiry[1] 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 Shares are available for resale under the 1933 Act pursuant to the
Registration Statement.

 

 

Very truly yours,

 

[ISSUER’S COUNSEL]

 

By:_____________________

 

CC: [LIST NAMES OF HOLDERS]

 

_____________________________________

 

 17

 

 

EXHIBIT B

 

FORM OF SELLING STOCKHOLDERS

 

The shares of common stock being offered by the selling stockholders are those
previously issued to the selling stockholders. For additional information
regarding the issuance of the common stock, see “Private Placement of Common
Shares” above. We are registering the 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 shares of common stock, 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 shareholder, based on its ownership of the
shares of common stock and the warrants, as of , 20o.

 

The third column lists the shares of common stock being offered by this
prospectus by the selling stockholders.

 

In accordance with the terms of registration rights agreement with the holders
of the shares of common stock, this prospectus generally covers the resale of
the number of shares of common stock issued. The fourth column assumes the sale
of all of the shares offered by the selling stockholders pursuant to this
prospectus.

 

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

 

 18

 

 

PLAN OF DISTRIBUTION

 

We are registering the shares of common stock previously issued to permit the
resale of these shares of common stock by the holders of the common stock 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 the shares of common
stock. We will bear all fees and expenses incident to our obligation to register
the 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,

 

·          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;

 

·          sales pursuant to Rule 144;

 

·          broker-dealers may agree 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.

 

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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 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.

 

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.

 

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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, estimated to be $[—] in total,
including, without limitation, Securities and Exchange Commission filing fees
and expenses of compliance with state securities or “Blue Sky” laws; 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 agreement, or the selling stockholders will be
entitled to contribution. We may be indemnified by the selling stockholders
against liabilities, including liabilities under the Securities Act, that may
arise from any written information furnished to us by the selling stockholder
specifically for use in this prospectus, in accordance with the related
registration rights agreement, or we may be entitled to contribution.

 

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.

 

 

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