FORM OF RIGHTS SUBSCRIPTION AGENT
AGREEMENT
THIS RIGHTS
SUBSCRIPTION AGENT AGREEMENT (this “Agreement”)
between Energy Focus, Inc., a Delaware corporation (the
“Company”), and The Bank of New York Mellon, a New York
State chartered bank (“Agent”), is dated as of
___.
(a) The
Company is making an offer (the “Subscription Offer”)
to issue to the holders of record of its outstanding shares of
Common Stock, par value $0.0001 per share (the “Common
Stock”), at the close of business on ___ (the “Record
Date”), the right to subscribe for and purchase (each a
“Right”) shares of Common Stock (the “Additional
Common Stock”) at a purchase price of $___ per share of
Additional Common Stock (the “Subscription Price”),
payable by cashier’s check, certified check, valid money
order, or wire transfer, upon the terms and conditions set forth
herein. The term “Subscribed” shall mean submitted for
purchase from the Company by a stockholder in accordance with the
terms of the Subscription Offer, and the term
“Subscription” shall mean any such submission. The
Company hereby appoints Agent to act as subscription agent in
connection with the Subscription Offer and Agent hereby accepts
such appointment in accordance with and subject to the terms and
conditions of this Agreement.
(b) The
Subscription Offer will expire at ___, Eastern Time, on ___ (the
“Expiration Time”), unless the Company shall have
extended the period of time for which the Subscription Offer is
open, in which event the term “Expiration Time” shall
mean the latest time and date at which the Subscription Offer, as
so extended by the Company from time to time, shall
expire.
(c) The
Company filed a Registration Statement relating to the Additional
Common Stock with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on ___, and such Registration
Statement was declared effective on ___. The terms of the
Additional Common Stock are more fully described in the Prospectus
forming part of the Registration Statement as it was declared
effective. All terms used and not defined herein shall have the
same meaning as in the Prospectus.
(d) Promptly
after the Record Date, the Company will furnish Agent with, or
cause to be furnished to Agent, a certified list, in a format
acceptable to Agent, of holders of Common Stock as of the Record
Date, including each such holder’s name, address, taxpayer
identification number, share amount and any certificate detail (the
“Record Stockholders List”).
2.
Subscription of Rights.
(a) The
Rights entitle the holders to subscribe, upon payment of the
Subscription Price, for shares of Additional Common Stock at the
rate of one share for each Right (the “Basic Subscription
Privilege”). No fractional shares will be issued, but the
Subscription Offer includes
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a step-up
privilege entitling the holder of fewer than ___ Rights, or a total
number of Rights not evenly divisible by
, if such holder fully exercises its Rights, to subscribe and pay
the Subscription Price for one full share of Additional Common
Stock in lieu of a fractional share without furnishing any
additional Rights (the “Step-up Privilege”).
(b) If
subscribing shareholders who exercise their Rights in full are
entitled to exercise an oversubscription right, then the Company
shall provide Agent with instructions regarding the allocation to
such shareholders of Additional Common Stock after the initial
allocation thereof.
3. Duties
of Subscription Agent.
(a) Agent
shall issue the Rights in accordance with this Agreement in the
names of the holders of the Common Stock of record on the Record
Date, keep such records as are necessary for the purpose of
recording such issuance, and furnish a copy of such records to the
Company.
(b) Promptly
after Agent receives the Record Stockholders List, Agent
shall:
(i) mail or cause
to be mailed, by first class mail, to each holder of Common Stock
of record on the Record Date whose address of record is within the
United States and Canada, (i) a subscription form with respect
to the Rights to which such stockholder is entitled under the
Subscription Offer (the “Subscription Form”), a form of
which is attached hereto as Exhibit A ,
(ii) a copy of the Prospectus, (iii) a set of
Instructions, (iv) Notice of Guaranteed Delivery, and
(iv) a return envelope addressed to the Agent; and
(ii) mail or cause
to be mailed, by courier, to each holder of Common Stock of record
on the Record Date whose address of record is outside the United
States and Canada, or is an A.P.O. or F.P.O. address, a copy of the
Prospectus. Agent shall refrain from mailing Subscription Forms to
any holder of Common Stock of record on the Record Date whose
address of record is outside the United States and Canada, or is an
A.P.O. or F.P.O. address, and hold such Subscription Forms for the
account of such stockholder subject to such stockholder making
satisfactory arrangements with the Agent for the exercise or other
disposition of the Rights described therein, and follow the
instructions of such stockholder for the exercise, sale or other
disposition of such Rights if such instructions are received at or
before 11:00 a.m., Eastern Time, on ___.
(c) Upon
request, Agent shall mail or deliver a copy of the Prospectus
(i) to each assignee or transferee of Rights upon receiving
appropriate documents to register the assignment or transfer
thereof and (ii) with shares of Additional Common Stock when
such are issued to persons other than the registered holder of the
Rights.
(d) Agent
shall accept Subscriptions upon the due exercise of Rights
(including payment of the Subscription Price) on or prior to the
Expiration Time in accordance with the Subscription Form, or
payment within three (3) business days of the Expiration Time
if the Subscription is accompanied by a proper Notice of Guaranteed
Delivery.
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(e) Agent
shall accept Subscriptions, without further authorization or
direction from the Company, without procuring supporting legal
papers or other proof of authority to sign (including without
limitation proof of appointment of a fiduciary or other person
acting in a representative capacity), and without signatures of
co-fiduciaries, co-representatives or any other person:
(i) if the Right
is registered in the name of a fiduciary and the Subscription Form
is executed by such fiduciary, provided the Additional Common Stock
is to be issued in the name of such fiduciary;
(ii) if the Right
is registered in the name of joint tenants and the Subscription
Form is executed by one of the joint tenants, provided the
Additional Common Stock is to be issued in the names of such joint
tenants; or
(iii) if the Right
is registered in the name of a corporation and the Subscription
Form is executed by a person in a manner which appears or purports
to be done in the capacity of an officer or agent thereof, provided
the Additional Common Stock is to be issued in the name of such
corporation.
(f) Agent
shall refer to the Company for specific instructions as to
acceptance or rejection all Subscriptions received after the
Expiration Time, but not including Subscriptions accompanied by a
proper Notice of Guaranteed Delivery where payment of the
Subscription Price is received within three (3) business days
after the Expiration Time, Subscriptions not authorized to be
accepted pursuant to this Section 3 and Subscriptions
otherwise failing to comply with the terms and conditions of the
Subscription Form.
4.
Acceptance of Subscriptions.
(a) Upon
acceptance of a Subscription, Agent shall hold all monies received
in a special account for the benefit of the Company. Promptly
following the Expiration Time, Agent shall distribute to the
Company the funds in such account. Agent will not be obligated to
calculate or pay interest to any holder or any other party claiming
through a holder or otherwise.
(b) Following
the first occurrence of Subscription activity, on each business
day, or more frequently if reasonably requested as to major tally
figures, forward a report by email to [___] (the “Company
Representative”) as to the following information, based upon
a preliminary review (and at all times subject to final
determination by the Company) as of the close of business on the
preceding business day or the most recent practicable time prior to
such request, as the case may be: (i) the total number of
shares of Additional Common Stock Subscribed for; (ii) the
total number of Rights sold; (iii) the total number of Rights
partially Subscribed for; (iv) the amount of funds received;
and (v) the cumulative totals in categories (i) through
(iv) above.
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(c) As
promptly as possible on the first and fourth full business days
following the Expiration Time, advise the Company Representative by
email of (i) the number of shares of Additional Common Stock
Subscribed for, (ii) the number of shares of Additional Common
Stock unsubscribed for, and the name of the subscriber.
5.
Completion of Subscription Offer.
(a) Upon
completion of the Subscription Offer, Agent shall request the
transfer agent for the Common Stock to issue the appropriate number
of shares of Additional Common Stock as required in order to
effectuate the Subscriptions; provided, however, that the Agent
shall follow the instructions of the Company Representative, given
to the Agent in writing within five (5) business days of the
Expiration Time, as to any Subscription which the Company
Representative informs the Agent may belong to a shareholder that
beneficially owns fifteen percent (15 %) or more of the
Company’s Common Stock.
(b) The
Rights shall be issued in registered, book-entry form only. Agent
shall keep books and records of the registration, transfer and
exchange of Rights (the “Rights Register”).
(c) All
Rights issued upon any registration of transfer or exchange of
Rights shall be the valid obligations of the Company, evidencing
the same obligations and entitled to the same benefits under this
Agreement as the Rights surrendered for such registration of
transfer or exchange; provided that, until such transfer or
exchange is registered in the Rights register, the Company and
Agent may treat the registered holder thereof as the owner for all
purposes.
(d) For so
long as this Agreement shall be in effect, the Company will reserve
for issuance and keep available free from pre-emptive rights a
sufficient number of shares of Additional Common Stock to permit
the exercise in full of all Rights issued pursuant to the
Subscription Offer.
(e) The
Company shall take any and all action, including without limitation
obtaining the authorization, consent, lack of objection,
registration or approval of any governmental authority, or the
taking of any other action under the laws of the United States of
America or any political subdivision thereof, to insure that all
shares of Additional Common Stock issuable upon the exercise of the
Rights (subject to payment of the Subscription Price) will be duly
and validly issued and fully paid and non-assessable shares of
Common Stock, free from all pre-emptive rights and taxes, liens,
charges and security interests created by or imposed upon the
Company with respect thereto.
(f) The
Company shall from time to time take all action necessary or
appropriate to obtain and keep effective all registrations,
permits, consents and approvals of the Securities and Exchange
Commission and any other governmental agency or authority and make
such filings under Federal and state laws which may be necessary or
appropriate in connection with the issuance, sale, transfer and
delivery of Rights or Additional Common Stock issued upon exercise
of Rights. !
6. Duties
as Information Agent. The Company hereby appoints Agent to
act as information agent in connection with the Subscription Offer
and Agent hereby accepts such appointment in accordance with and
subject to the terms and conditions of this Agreement. In its
capacity as
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information
agent, Agent shall (if required): assist in the coordination of all
printing activities and advertisement placement; establish contacts
with brokers, dealers, banks and other nominees on the
Company’s behalf; determine material requirements and assist
in document review; facilitate the distribution of materials to
registered and beneficial owners and to other interested parties;
provide a dedicated toll-free line for all shareholder queries;
provide status reporting to Company management; and facilitate
payment of all broker-forwarding invoices, subject to collection
from the Company of monies for this purpose.
7.
Procedure for Discrepancies. Agent shall follow its
regular procedures to attempt to reconcile any discrepancies
between the number of shares of Additional Common Stock that any
Subscription Form may indicate are to be issued to a stockholder
upon exercise of its Rights and the number that the Record
Stockholders List indicates may be issued to such stockholder. In
any instance where Agent cannot reconcile such discrepancies by
following such procedures, Agent will consult with the Company for
instructions as to the number of shares of Additional Common Stock,
if any, Agent is authorized to issue. In the absence of such
instructions, Agent is authorized not to issue any shares of
Additional Common Stock to such stockholder and will return to the
subscribing stockholder (at Agent’s option by either first
class mail under a blanket surety bond or insurance protecting
Agent and the Company from losses or liabilities arising out of the
non-receipt or non-delivery of the Subscription Form or by
registered mail insured separately for the value of the applicable
Rights) to such stockholder’s address as set forth in the
Subscription Form, any Subscription Form delivered to Agent, any
other documents delivered therewith and a letter explaining the
reason for the return of such documents.
8.
Procedure for Deficient Items.
(a) Agent
shall examine the Subscription Forms received by it
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