Unassociated Document


     

    Exhibit
      10.2



    July
      25,
      2007

    


    


    


    BY
      FACSIMILE

    


    [HOLDER]

    [ADDRESS]

    


    ATTENTION:
      

     

    


    
      	 	
              Re:

            	
              Amendment
                to Series C Warrants and Convertible Debentures
                

            


    

    and
      termination of Registration Rights Agreement

    


    Ladies
      and Gentlemen:

    


    Reference
      is made to (i) the warrants to purchase shares of common stock, par value $0.001
      per share (“Common
      Stock”)
      of
      Millennium Cell Inc. (the “Company”)
      issued
      by the Company to the purchasers of the Company’s Series C Convertible Preferred
      Stock on April 25, 2005 (the “Series
      C Warrants”),
      (ii)
      the Company’s Convertible Debentures with an Original Issue Date of February 16,
      2007 in the aggregate principal amount of $6,000,000 (the “Convertible
      Debentures”)
      and
      (iii) that certain Registration Rights Agreement dated as of February 15, 2007
      by and among the Company and the purchasers of the Convertible Debentures (the
      “Registration
      Rights Agreement”).

    


    In
      consideration of the mutual covenants contained herein and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the undersigned and the Company hereby agree as
      follows:

    


    1. 
      Effective upon execution and delivery to the Company by holders of Series C
      Warrants constituting Required Holders (as such term is defined in the Series
      C
      Warrants) of signed counterparts to letter agreements identical to this letter
      agreement, Section
      1(b)
      of each
      Series C Warrant shall be amended so that it is deleted in its entirety and
      replaced with the following:

    


    “(b)
      Exercise Price.
      For
      purposes of this Warrant, “Exercise
      Price”
means
      (i) $0.60 through October 25, 2007 and (ii) $2.00 thereafter, subject in each
      case to adjustment as provided herein.”

    


    2.
      Effective upon execution and delivery to the Company by holders of Convertible
      Debentures constituting Majority Holders (as such term is defined in the
      Convertible Debentures) of signed counterparts to letter agreements identical
      to
      this letter agreement, each Convertible Debenture shall be amended as
      follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    (a)
      In
      Section 1, the definition of “Equity
      Conditions”
shall
      be amended to (1) delete clause (ii) thereof in its entirety and replace it
      with
      the following:

    


    “(ii)
      during the Equity Conditions Measuring Period, the Underlying Shares may be
      sold
      pursuant to Rule 144 under the Securities Act and without the need for
      registration under any applicable state securities laws, but, in the event
      that
      the Underlying Shares may not be sold pursuant to Rule 144(k), only to the
      extent that such number of Underlying Shares, when aggregated with all other
      Underlying Shares delivered to the Holder by the Company during the preceding
      three months pursuant to a transaction where the Equity Conditions were required
      to be satisfied, does not exceed 50% of the limitation on amount of securities
      that may be sold by the Holder in accordance with Rule 144(e) as of the date
      that the Equity Conditions must be satisfied;”

    


    and
      (2)
      delete clause (ix) thereof in its entirety and replace it with the
      following:

    


    “(ix)
      the
      Company shall have no knowledge of any fact not caused by the failure of the
      holders of Debentures to provide any required information that would cause
      any
      shares of Common Stock issuable upon conversion of the Debentures not to be
      eligible for sale in accordance with Rule 144 and any applicable state
      securities laws.”

    


    (b) 
      In
      Section 1, the definition of “Event
      of Default”
shall
      be amended to (1) remove the words “or liquidated damages (as provided for in
      the Registration Rights Agreement)” from clause (i) thereof, (2) delete clause
      (vi) thereof in its entirety and replace it with the following:

    


    “(vi)
      the
      Company (a) is not required to file reports pursuant to Section 13(a) or 15(d)
      of the Exchange Act or (b) shall fail to file when due any report, schedule,
      form, statement or other filing required to be filed by it with the Commission
      pursuant to the reporting requirements of the Exchange Act, and the Company
      does
      not cure such failure within three Trading Days thereof;”

    


    (3)
      delete clause (ix) thereof in its entirety, and (4) re-number clauses (x)
      through (xii) thereof to clauses (ix) through (xi), respectively. 

    


    (c)
      In
      Section 1, the definition of “Initial
      Conversion Price”
shall
      be amended to delete “$1.42” and replace it with “$1.00”.

    


    (d)
      In
      Section 1, for purposes of conforming to the amendments described in (b) above,
      the definition of “Mandatory
      Redemption Amount”
shall
      be amended to change the reference to “clauses (iii)-(xii) thereof” in the first
      sentence of such definition to “clauses (iii)-(xi) thereof.”

    


    (e)
      In
      Section 1, the definition of “Maturity
      Date”
shall
      be amended so that it is deleted in its entirety and replaced with the
      following:

    


    “Maturity
      Date”
means
      (1) February 16, 2009 or (2) August 16, 2009, as set forth in a written notice
      from the Holder to the Company at least 30 days prior to February 16, 2009
      (it
      being understood that, in the absence of such written notice, the Maturity
      Date
      shall be August 16, 2009), in each case as may be extended at the option of
      the
      Holder (i) in the event that, and for so long as, an Event of Default shall
      have
      occurred and be continuing on the Maturity Date (as may be extended pursuant
      hereto) or any event that shall have occurred and be continuing that with the
      passage of time and the failure to cure would result in an Event of Default
      and
      (ii) through the date that is ten (10) Business Days after the consummation
      of a
      Change of Control in the event that a Change of Control is publicly announced
      or
      a Change of Control Notice (as defined in Section 6(b)) is delivered prior
      to
      the Maturity Date.” 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (f)
      Section 2(a) shall be amended so that the first three (3) sentences thereof
      are
      deleted in its entirety and replaced with the following:

    


    “The
      Company
      shall
      pay interest to the Holder on the aggregate unconverted and then outstanding
      principal amount of this Debenture (including any interest added to such
      principal in accordance with this Section 2) at an annual rate equal to the
      Interest Rate, payable quarterly in arrears on each Interest Payment Date.
      Interest shall be calculated on the basis of a 360-day year and shall accrue
      daily commencing on the Original Issue Date. Subject to the conditions and
      limitations set forth below, the Company will pay interest under this Debenture
      in shares of Common Stock calculated using the Interest Conversion Price
      (“Interest
      Shares”)
      so
      long as there has been no Equity Conditions Failure; provided however, that
      the
      Company may, at its option following notice to the Holder, pay Interest on
      any
      Interest Date in cash (“Cash
      Interest”)
      or in
      a combination of Cash Interest and Interest Shares.”

    


    (g)
      Section 7(f) shall be amended so that the first sentence thereof is deleted
      in
      its entirety and replaced with the following:

    


    “During
      the period (i) commencing on July 25, 2007 through March 31, 2008, the Company
      shall maintain a Cash to Unsecured Indebtedness Ratio of at least 0.5 to 1.0
      and
      (ii) commencing on April 1, 2008 and ending on the date on which this Debenture
      is no longer outstanding, the Company shall maintain a Cash to Unsecured
      Indebtedness Ratio of at least 0.8 to 1.0 (in each case, the “Cash
      and Unsecured Indebtedness Ratio Test”).”

    


    3.
      As
      amended hereby, the Convertible Debentures shall remain in full force and
      effect.

    


    4.
      Effective upon execution and delivery to the Company by holders of Registrable
      Securities (as such term is defined in the Registration Rights Agreement)
      constituting Required Holders (as such term is defined in the Registration
      Rights Agreement) of signed counterparts to letter agreements identical to
      this
      letter agreement, the Registration Rights Agreement shall be terminated in
      its
      entirety and shall be of no further force or effect, provided that any terms
      defined in the Registration Rights Agreement and used in other Transaction
      Documents (as such term is defined in the Convertible Debentures) shall continue
      to have such definitions notwithstanding such termination.

    


    5.
      As
      soon as practicable upon execution and delivery to the Company by (i) holders
      of
      Series C Warrants constituting Required Holders (as such term is defined in
      the
      Series C Warrants), (ii) holders of Convertible Debentures constituting Majority
      Holders (as such term is defined in the Convertible Debentures) and (iii)
      holders of Registrable Securities (as such term is defined in the Registration
      Rights Agreement) constituting Required Holders (as such term is defined in
      the
      Registration Rights Agreement) of signed counterparts to letter agreements
      identical to this letter agreement (the “Effective
      Time”),
      the
      Company shall file an application to withdraw that certain Registration
      Statement on Form S-3 (Registration No. 333-141717), filed with the Securities
      and Exchange Commission (the “SEC”)
      on
      March 30, 2007, as amended by pre-effective Amendment No. 1 filed with the
      SEC
      on June 20, 2007 (the “Registration
      Statement”)
      in
      accordance with Rule 477 promulgated under the Securities Act of 1933, as
      amended (the “Securities
      Act”),
      and
      the Company shall use its commercially reasonable efforts to effect the
      withdrawal of the Registration Statement in accordance with such
      rule.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    6.
      On or
      before 12:00 p.m., New York time, on the first business day following the
      Effective Time, the Company shall file a Current Report on Form 8-K describing
      the terms of this letter agreement in the form required by the Securities
      Exchange Act of 1934, as amended, and attaching the form of this letter
      agreement as an exhibit to such filing.

    


    7.
      Each
      of the Company and the undersigned hereby represents and warrants to the other
      that its execution and delivery of this letter agreement and its consummation
      of
      the transactions contemplated hereby have been duly and validly authorized
      on
      its behalf and that this letter agreement constitutes its legal, valid and
      binding obligation, enforceable against it in accordance with its terms, except
      as such enforcement may be limited by applicable bankruptcy, insolvency,
      moratorium, or similar laws from time to time in effect which affect creditors’
rights generally and by legal and equitable limitations on the enforceability
      of
      specific remedies. Each of the Company and the undersigned shall cooperate
      with
      the other and execute and deliver, or cause to be executed and delivered, all
      such other instruments and to take all such other actions as may be reasonably
      requested by the other from time to time, consistent with the terms of this
      letter agreement, to effectuate the purposes and provisions of this letter
      agreement.

     

    8.
      For
      the avoidance of doubt, it is the intent of the Company and the undersigned
      that
      (i) as of the Effective Time, this letter agreement will be a valid and binding
      amendment of each Series C Warrant, a valid and binding amendment to each
      Convertible Debenture and a valid and binding termination of the Registration
      Rights Agreement and (ii) if and to the extent that the amendments to the Series
      C Warrants and the Convertible Debentures contemplated by this letter agreement
      are deemed to constitute an offer and sale of securities by the Company to
      the
      undersigned, such offer and sale is intended to be exempt from registration
      under the Securities Act by virtue of Section 3(a)(9) thereof.

    


    9.
      This
      letter agreement may be executed in one or more counterparts, each of which,
      when executed and delivered, shall be deemed to be an original, but all of
      which
      when taken together shall constitute one and the same instrument. This letter
      agreement may be executed by facsimile, which shall be binding to the same
      extent as an original signature page. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    10.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this letter 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 letter agreement and agrees that such service shall constitute good and
      sufficient service of process and notice thereof. Nothing contained herein
      shall
      be deemed to limit in any way any right to serve process in any manner permitted
      by law. If any provision of this letter agreement shall be invalid or
      unenforceable in any jurisdiction, such invalidity or unenforceability shall
      not
      affect the validity or enforceability of the remainder of this letter agreement
      in that jurisdiction or the validity or enforceability of any provision of
      this
      letter agreement in any other jurisdiction. EACH
      PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
      REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
      CONNECTION WITH OR ARISING OUT OF THIS LETTER AGREEMENT OR ANY TRANSACTION
      CONTEMPLATED HEREBY.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    


    


    
      	 	 

              Very
                truly yours, 

            
	 	 	 
	 	MILLENNIUM
              CELL INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:
                John Giolli 

              Title:
                Chief Financial Officer 

            


    

     

    ACKNOWLEDGED
      AND AGREED TO:

    


    


    [HOLDER]

    


    


    By:
      ________________________

    Name:
      

    Title: