SECURITIES PURCHASE AGREEMENT
Exhibit
10.1
THIS SECURITIES PURCHASE AGREEMENT,
dated as of September 21, 2010 (this “Agreement”),
is by and between ENER1, INC., a Florida corporation (the “Company”),
and ENER1 GROUP, INC., a Florida corporation (the “Investor”).
On the
terms and subject to the conditions set forth in this Agreement, the Company
wishes to sell to the Investor, and the Investor wishes to purchase from the
Company, for an aggregate purchase price of $20,000,000 (the “Purchase
Price”), (i) 5,665,723 shares (the “Shares”)
of the Company’s common stock, par value $0.01 per share (the “Common
Stock”), (ii) a warrant in the form attached hereto as Exhibit
A, exercisable
into 910,000 shares of Common Stock at a purchase price of $3.53 per share (the
“Class C
Warrant”) and (iii) a warrant in the form attached hereto as Exhibit
B, exercisable
into 1,516,670shares of Common Stock at a purchase price of $4.46 per share (the
“Class D
Warrant” and, together with the Class C Warrant, the “Warrants”).
The shares of Common Stock issuable under the Warrants are sometimes referred to
herein as the “Warrant
Shares”, and the Shares, the Warrants and the Warrant Shares are
sometimes referred to herein as the “Securities”.
In consideration of the mutual promises
made herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor
hereby agree as follows:
1. DEFINITIONS. Capitalized
terms used in this Agreement and not otherwise defined have the respective
meanings indicated on Annex I
hereto. All definitions contained in this Agreement are applicable to the
singular and plural forms of the terms defined.
2. PURCHASE
AND SALE OF SHARES. Upon the terms and subject to the
satisfaction (or waiver by the appropriate party) of the conditions set forth
herein, the Company agrees to sell, and the Investor agrees to purchase, the
Shares and the Warrants for the Purchase Price. The date on which the
closing of such purchase and sale occurs (the “Closing”)
is hereinafter referred to as the “Closing
Date”. The Closing will be deemed to occur when (A) this
Agreement and the other Transaction Documents have been executed and delivered
by the Company and the Investor, (B) each of the conditions to the Closing
described in this Agreement has been satisfied or waived as specified therein,
and (C) payment of the Purchase Price has been made by wire transfer of
immediately available funds against delivery of certificates representing the
Shares and the Warrants, respectively.
3. REPRESENTATIONS
AND WARRANTIES OF THE INVESTOR.
The Investor hereby represents and
warrants to the Company and agrees with the Company that, as of the Execution
Date:
3.1
Authorization;
Enforceability. The Investor is duly and validly organized,
validly existing and in good standing under the laws of the state of Florida,
with the requisite corporate power and authority to purchase the Shares and
Warrants and to execute and deliver this Agreement and the other Transaction
Documents to which it is a party. This Agreement constitutes, and
upon the execution and delivery thereof, each other Transaction Document to
which the Investor is a party will constitute, the Investor’s valid and legally
binding obligation, enforceable in accordance with its terms, subject to (i)
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general application relating to or affecting
the enforcement of creditors’ rights generally and (ii) general principles of
equity.
3.2 Accredited Investor; No
Public Sale or Distribution. The Investor (i) is an
“accredited investor” as that term is defined in Rule 501 of Regulation D, (ii)
was not formed or organized for the specific purpose of making an investment in
the Company, and (iii) is acquiring the Securities being purchased by it solely
for its own account and not with a present view to the public resale or
distribution of all or any part thereof.
-1-
3.3
Information. The Company has, prior to the Execution Date,
provided the Investor with information regarding the business, operations and
financial condition of the Company and the Company Subsidiaries and has, prior
to the Execution Date, granted to the Investor the opportunity to ask questions
of and receive answers from representatives of the Company, including its
officers, directors, employees and agents, concerning the Company in order to
enable the Investor to make an informed decision with respect to its investment
in the Securities. The Investor has such knowledge and experience in business
and financial matters so as to enable it to understand the risks of and form an
investment decision with respect to its investment in the Shares. The Investor
understands that its investment in the Securities involves a high degree of
risk, and represents that it can bear the economic risk of a total loss of its
investment in the Securities. The Investor has sought such accounting, legal,
and tax advice that it has considered necessary to make an informed investment
decision with respect to its purchase of the Securities.
3.4 Limitations on
Disposition. The Investor acknowledges that the Securities
have not been and are not being registered under the Securities Act and may not
be transferred or resold without registration under the Securities Act or unless
pursuant to an exemption therefrom.
3.5 Legend. The
Investor understands that the certificates representing the Securities may bear
at issuance a restrictive legend in substantially the following
form:
“The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or any state
securities laws, and may not be offered for sale or sold unless a registration
statement under the Securities Act and applicable state securities laws shall
have become effective with respect thereto, or an exemption from registration
under the Securities Act and applicable state securities laws is available in
connection with such offer or sale.”
Notwithstanding
the foregoing, the Investor and the Company agree that, as long as (A) the
resale or transfer of any of the Securities has been made pursuant to an
effective registration statement, (B) such Securities have been sold pursuant to
Rule 144, subject to receipt by the Company of customary documentation
reasonably acceptable to the Company in connection therewith, or (C) such
Securities are eligible for resale under Rule 144 without any limitations on the
number of such Securities which may be sold, such Securities shall be issued
without any legend or other restrictive language and, with respect to
outstanding Securities upon which such legend is stamped, the Company shall
instruct its transfer agent to issue replacement Securities without such legend
to the holder upon request (but in no event later than the third (3rd)
Business Day following such request).
3.6 Reliance on
Exemptions. The Investor understands that the Securities are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations and
warranties of the Investor set forth in this Section 2
in order to determine the availability of such exemptions and the eligibility of
the Investor to acquire the Securities. The Investor acknowledges
that it did not purchase the Securities based upon any advertisement in any
publication of general circulation.
3.7 Fees. The Investor
has not agreed to pay any compensation or other fee, cost or related expenditure
to any underwriter, broker, agent or other representative in connection with the
transactions contemplated hereby.
3.8 No
Conflicts. The execution and performance of this Agreement and
the other Transaction Documents to which it is a party do not conflict in any
material respect with any agreement to which the Investor is a party or is
bound, any court order or judgment applicable to the Investor, or the
organizational documents of the Investor, except for such conflicts which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the Company or the ability of such Purchaser to perform its
obligations hereunder.
3.9 No Governmental
Review. The Investor understands that no federal or state
agency or any other Governmental Authority has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability
of an investment in the Securities nor have such authorities passed upon the
accuracy of any information provided to the Investor or made any findings or
determinations as to the merits of the offering of the Securities.
4. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company hereby represents
and warrants to the Investor and agrees with the Investor that, as of the
Execution Date:
-2-
4.1 Organization, Good Standing
and Qualification. Each of the Company and the Company
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has all
requisite power and authority to carry on its business as now
conducted. Each of the Company and the Company Subsidiaries is duly
qualified to transact business and is in good standing in each jurisdiction in
which it conducts business except where the failure so to qualify has not had or
would not reasonably be expected to have a Material Adverse Effect.
4.2 Authorization;
Consents. The Company has the requisite corporate power and
authority to enter into and perform its obligations under the Transaction
Documents, and to issue and sell the Securities to the Investors in accordance
with the terms hereof. All corporate action on the part of the
Company by its officers, directors and shareholders necessary for the
authorization, execution and delivery of, and the performance by the Company of
its obligations under, the Transaction Documents has been taken, and no further
consent or authorization of the Company, the Board of Directors, shareholders or
any other Person is required. The Board of Directors has determined
that the sale and issuance of the Shares and the Warrants, and the consummation
of the other transactions contemplated hereby, are in the best interests of the
Company.
4.3
Enforcement. This
Agreement has been duly executed and delivered by the Company and, at the
Closing, the Company will have duly executed and delivered each of the other
Transaction Documents. This Agreement constitutes and, as of the Closing, each
of the other Transaction Documents will constitute, the valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to (i) applicable bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization or other similar
laws of general application relating to or affecting the enforcement of
creditors’ rights generally and (ii) general principles of equity.
4.4 Valid Issuance; No
Registration. The Shares are duly authorized and, at the
Closing, shall be validly issued, fully-paid and non-assessable, free and clear
of any Liens imposed by or through the Company. The Warrants are duly authorized
and, at the Closing, shall be validly issued, free and clear of any Liens
imposed by or through the Company. The Warrant Shares are duly authorized and,
upon exercise of the Warrants and receipt by the Company of the exercise price
therefor, shall be validly issued, fully-paid and non-assessable, free and clear
of any Liens imposed by or through the Company. Assuming the accuracy of the
Investor’s representations contained herein, the issuance and sale of the
Securities under this Agreement will not require registration under the
Securities Act and will be effected in compliance with all applicable federal
and state securities laws.
4.5 No
Conflict. The (i) execution, delivery and performance of this
Agreement and the other Transaction Documents and (ii) consummation of the
transactions contemplated hereby and thereby (including without limitation, the
issuance of the Securities) will not (x) result in any violation of any
provisions of the Company’s charter, bylaws or any other governing document or
in a default under any provision of any Material Contract to which the Company
or Company Subsidiary is a party or by which it or any of its Property is bound,
(y) result in any violation of any provision of any Governmental Requirement
applicable to the Company or Company Subsidiary or (z) conflict with or
constitute, with or without the passage of time and giving of notice, either a
default under any such provision, instrument or contract or an event which
results in the creation of any Lien upon any assets of the Company or of any
Company Subsidiary.
4.6 Disclosure Documents;
Financial Statements. The Company is subject to the reporting
requirements of the Exchange Act and, the Company has filed with the Commission
all SEC Documents that the Company was required to file with the Commission on
or after December 31, 2009. Each SEC Document filed on or after
December 31, 2009, as of the date of the filing thereof with the Commission (or
if amended or superseded by a filing prior to the Execution Date, then on the
date of such amending or superseding filing), complied in all material respects
with the requirements of the Securities Act or Exchange Act, as applicable, and,
as of the date of such filing (or if amended or superseded by a filing prior to
the Execution Date, then on the date of such filing), and did not contain an
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All
documents required to be filed as exhibits to the SEC Documents filed on or
after December 31, 2009 have been filed as required. As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto. Such financial statements have been prepared in
accordance with GAAP consistently applied at the times and during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may exclude footnotes or may be condensed or summary statements)
and fairly present in all material respects the financial position of the
Company as of the dates thereof and the results of its operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end adjustments).
-3-
4.7 Equity
Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of (a) 235,714,286 shares of Common Stock, of
which as of the date hereof, 151,660,747shares are issued and outstanding,
7,060,064 shares are reserved for issuance pursuant to the Company’s incentive
compensation employee and stock purchase plans and 69,160,041 shares
are reserved for issuance pursuant to securities exercisable or exchangeable
for, or convertible into, shares of Common Stock, and (b) 5,000,000 shares of
preferred stock, $0.01 par value per share, of which none are issued and
outstanding as of the date hereof. All of such outstanding shares
have been validly issued and are fully paid and non-assessable.
4.8 No General Solicitation;
Placement Agent. Neither the Company, nor any of the Company
Subsidiaries or Affiliates, nor any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the
Securities. The Company has not engaged any placement agent or other
agent in connection with the sale of the Securities.
4.9 Material Adverse Change;
Taxes; Litigation.
4.9.1 Since
the date of the Company’s most recent financial statements contained in the
Disclosure Documents, there has been no (i) material adverse change to the
business, operations, properties, financial condition or results of operations
of the Company and the Company Subsidiaries taken as a whole since the date of
the most recent financial statements contained in the Disclosure Documents or
(ii) change by the Company in its accounting principles, policies and methods
except as required by changes in GAAP.
4.9.2 Each
of the Company and the Company Subsidiaries has prepared in good faith and duly
and timely filed all tax returns required to be filed by it and such returns are
complete and accurate in all material respects, and has paid all taxes required
to have been paid by it, except for taxes that it reasonably disputes in good
faith or the failure of which to pay has not had or would not reasonably be
expected to have a Material Adverse Effect
4.9.3 Neither
the Company nor any Company Subsidiary is the subject of any pending or, to the
Company’s knowledge, threatened inquiry, investigation or administrative or
legal proceeding by the Internal Revenue Service, the taxing authorities of any
state or local jurisdiction, the Commission, any state securities commission or
other Governmental Authority.
4.9.4 There
is no material claim, litigation or administrative proceeding pending, or, to
the Company’s knowledge, threatened or contemplated, against the Company or any
Company Subsidiary, or against any current officer, director or employee of the
Company or any such Company Subsidiary in connection with such Person’s
employment therewith. Neither the Company nor any Company Subsidiary
is a party to or subject to the provisions of, any order, writ, injunction,
judgment or decree of any court or Government Authority which has had or would
reasonably be expected to have a Material Adverse Effect.
4.10 Intellectual
Property. The Company and the Company Subsidiaries own, free
and clear of claims or rights or any other Person, with full right to use, sell,
license, sublicense, dispose of, and bring actions for infringement of, or, to
the knowledge of the Company, have acquired licenses or other rights to use, all
Intellectual Property necessary for the conduct of their respective businesses
as presently conducted (other than with respect to software which is generally
commercially available and open source software which may be subject to one or
more “general public” licenses), except for Intellectual Property as to which
the failure to own or license would not reasonably be expected to have a
Material Adverse Effect.
-4-
4.11 Environment. Except
as disclosed in the Disclosure Documents, the Company and the Company
Subsidiaries have no liabilities under any Environmental Law, nor, to the
Company’s knowledge, do any factors exist that are reasonably likely to give
rise to any such liability, affecting any of the properties owned or leased by
the Company or any Company Subsidiary that, individually or in the aggregate,
has had or would reasonably be expected to have a Material Adverse
Effect. Neither the Company nor any Company Subsidiary has violated
any Environmental Law applicable to it now or previously in effect, other than
such violations or infringements that, individually or in the aggregate, have
not had and would not reasonably be expected to have a Material Adverse
Effect.
4.12 Money
Laundering. The operations of the Company and the Company
Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, and other applicable
money laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering
Laws”), and no action, suit, proceeding or inquiry by or before any
Governmental Authority involving the Company or any of the Company Subsidiaries
with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.
4.13 OFAC. Neither
the Company nor any Company Subsidiary nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any Company
Subsidiary is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“OFAC”);
and the Company will not, directly or indirectly, use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds to any
Company Subsidiary, joint venture partner or other Person, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
4.14 Xxxxxxxx-Xxxxx Act; Internal
Controls and Procedures. The Company is in compliance with any
and all applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002, as amended,
and any and all applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the Effective Date. The Company
maintains internal accounting controls, policies and procedures, and such books
and records, as are reasonably designed to provide reasonable assurance that (i)
all transactions to which the Company or any Company Subsidiary is a party or by
which it is bound are effected by a duly authorized employee or agent of the
Company, supervised by and acting within the scope of the authority granted by
the Company’s senior management and/or by the Board of Directors; (ii) the
recorded accounting of the Company’s consolidated assets is compared with
existing assets at regular intervals; and (iii) all transactions to which the
Company or any Company Subsidiary is a party, or by which its properties are
bound, are recorded (and such records maintained) in accordance with all
Governmental Requirements and as may be necessary or appropriate to ensure that
the financial statements of the Company are prepared in accordance with
GAAP.
4.15 Insurance. The
Company maintains insurance for itself and the Company Subsidiaries in such
amounts and covering such losses and risks as are reasonably sufficient and
customary in the businesses in which the Company and the Company Subsidiaries
are engaged.
4.16 Property. Except
as disclosed in the Disclosure Documents, the Company and the Company
Subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by them which is
material to the business of the Company and the Company Subsidiaries, in each
case, except as disclosed in the Disclosure Documents, free and clear of all
Liens, encumbrances and defects except such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such property by the Company and any of the Company
Subsidiaries. Any real property and facilities held under lease by
the Company and any of the Company Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and the Company Subsidiaries.
4.17 Investment
Company. Neither the Company nor the Company Subsidiaries is
or, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof, will become an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.
-5-
5. COVENANTS
OF THE COMPANY AND THE INVESTOR.
5.1 Use of
Proceeds. The Company shall use the proceeds from the sale of
the Securities for working capital and general corporate purposes.
5.2 Limitations on Disposition
of Securities by Investor. The Investor shall not sell,
transfer, assign or dispose of any Securities, unless:
(a)
there is then in effect an effective registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(b)
the Investor has notified the Company in writing of any such disposition,
and furnished the Company with an opinion of counsel, reasonably satisfactory to
the Company, that such disposition will not require registration of such
Securities under the Securities Act; provided, however, that no
such opinion of counsel will be required (A) if the sale, transfer,
assignment or disposition is made to an Affiliate of the Investor, (B) if the
sale, transfer, assignment or disposition is made pursuant to Rule 144 and
the Investor provides the Company with evidence reasonably satisfactory to the
Company that the proposed transaction satisfies the requirements of Rule 144,
(C) if such Securities are eligible for resale under Rule 144 without any
limitations on the number of such Securities which may be sold or (D) if in
connection with a bona
fide pledge or hypothecation of any Securities under a financing
arrangement with a broker-dealer or other financial institution (provided that
such opinion shall be required in connection with the sale of any such
Securities by such broker-dealer or other financial institution following the
Investor’s default under any such margin arrangement).
5.3 No Integrated
Offering. None of the Company, the Company Subsidiaries, any
of their Affiliates, or any Person acting on their behalf shall, directly or
indirectly, make any offers or sales of any security or solicit any offers to
buy any security, which will be integrated with the sale of the Shares in a
manner which would require the registration of the Shares under the Securities
Act or require stockholder approval under the rules and regulations of the
Principal Market, and the Company will take all action that is appropriate or
necessary to assure that its offerings of other securities will not be
integrated with the offering of the Shares contemplated by this Agreement for
purposes of the Securities Act and the rules and regulations of the Principal
Market.
6. CONDITIONS
TO CLOSING.
6.1 Conditions to the Investor’s
Obligations at the Closing. The Investor’s obligations to
effect the Closing, including, without limitation, its obligation to purchase
the Shares and the Warrants, are conditioned upon the fulfillment (or waiver by
the Investor in its sole and absolute discretion) of each of the following
events as of the Closing Date, and the Company shall use commercially reasonable
efforts to cause each of such conditions to be satisfied:
6.1.1 the
representations and warranties of the Company set forth in this Agreement and in
the other Transaction Documents shall be true and correct in all material
respects as of such date as if made on such date (except that to the extent that
any such representation or warranty relates to a particular date, such
representation or warranty shall be true and correct in all material respects as
of that particular date);
6.1.2 the
Company shall have complied with or performed in all material respects all of
the agreements, obligations and conditions set forth in this Agreement and in
the other Transaction Documents that are required to be complied with or
performed by the Company on or before the Closing;
6.1.3 the
Company shall have executed and delivered to the Investor a certificate
representing the Shares and a certificate representing the Warrants being
purchased by the Investor at the Closing; and
6.1.4 there
shall be no injunction, restraining order or decree of any nature of any court
or Governmental Authority of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the transactions contemplated hereby
and by the other Transaction Documents.
-6-
6.2 Conditions to Company’s
Obligations at the Closing. The Company’s obligations to
effect the Closing with the Investor are conditioned upon the fulfillment (or
waiver by the Company in its sole and absolute discretion) of each of the
following events as of the Closing Date:
6.2.1 the
representations and warranties of the Investor set forth in this Agreement and
in the other Transaction Documents to which it is a party shall be true and
correct in all material respects as of such date as if made on such date (except
that to the extent that any such representation or warranty relates to a
particular date, such representation or warranty shall be true and correct in
all material respects as of that date);
6.2.2 the
Investor shall have complied with or performed all of the agreements,
obligations and conditions set forth in this Agreement that are required to be
complied with or performed by the Investor on or before the
Closing;
6.2.3 the
Investor shall have delivered to the Company the Purchase Price for the
Securities being purchased by it at the Closing by wire transfer of immediately
available funds; and
6.2.4 there
shall be no injunction, restraining order or decree of any nature of any court
or Governmental Authority of competent jurisdiction that is in effect that
restrains or prohibits the consummation of the transactions contemplated hereby
and by the other Transaction Documents.
7. MISCELLANEOUS.
7.1
Survival;
Severability. The representations, warranties, covenants and
indemnities made by the parties herein and in the other Transaction Documents
shall survive the Closing notwithstanding any due diligence investigation made
by or on behalf of the party seeking to rely thereon. In the event that any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision; provided that in such case
the parties shall negotiate in good faith to replace such provision with a new
provision which is not illegal, unenforceable or void, as long as such new
provision does not materially change the economic benefits of this Agreement to
the parties.
7.2 Successors and Assigns,
Assignment. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. The Investor may assign its rights and
obligations hereunder in connection with any private sale or transfer of the
Securities in accordance with the terms hereof, as long as, as a condition
precedent to such transfer, the transferee executes an acknowledgment agreeing
to be bound by the applicable provisions of this Agreement, in which case the
term “Investor” shall be deemed to refer to such transferee as though such
transferee were an original signatory hereto. The Company may not
assign its rights or obligations under this Agreement except in connection with
the merger involving, or sale of substantially all of the assets of, the
Company.
7.3 No
Reliance. Each party acknowledges that (i) it has such
knowledge in business and financial matters as to be fully capable of evaluating
this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, (ii) it is not relying on any advice or
representation of any other party in connection with entering into this
Agreement, the other Transaction Documents or such transactions (other than the
representations made in this Agreement or the other Transaction Documents),
(iii) it has not received from any other party any assurance or guarantee as to
the merits (whether legal, regulatory, tax, financial or otherwise) of entering
into this Agreement or the other Transaction Documents or the performance of its
obligations hereunder and thereunder, and (iv) it has consulted with its own
legal, regulatory, tax, business, investment, financial and accounting advisors
to the extent that it has deemed necessary, and has entered into this Agreement
and the other Transaction Documents based on its own independent judgment and,
if applicable, on the advice of such advisors, and not on any view (whether
written or oral) expressed by any other party.
-7-
7.4 Governing Law; Jurisdiction;
Waiver of Jury Trial. (a) This Agreement shall be
governed by and construed under the laws of the State of New York applicable to
contracts made and to be performed entirely within the State of New York. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City and County of New York for the adjudication
of any dispute hereunder or any other Transaction Document or in connection
herewith or therewith or with any transaction contemplated hereby or thereby,
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 in effect for
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.
(b) Each
party to this Agreement acknowledges and agrees that any dispute or controversy
that may arise under this Agreement or the other Transaction Documents is likely
to involve complicated and difficult issues and, therefore, each party hereby
irrevocably and unconditionally waives any right such party may have to a trial
by jury in respect of any litigation directly or indirectly arising out of or
relating to this agreement, or the breach, termination or validity of this
Agreement or the other Transaction Documents, or the transactions contemplated
hereby or thereby. Each party to this Agreement certifies and acknowledges that
(i) no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver, (ii) each such party
understands and has considered the implications of this waiver, (iii) each such
party makes this waiver voluntarily, and (iv) each such party has been induced
to enter into this agreement by, among other things, the mutual waivers and
certifications in this Section
7.4(b).
7.5 Counterparts; Facsimile
Signatures. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. An executed counterpart
of this Agreement may be delivered by verifiable facsimile transmission or by
email in a suitable electronic format.
7.6 Headings. The
headings used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
7.7 Notices. Any
notice, demand or request required or
permitted to be given by the Company or the Investor pursuant to the terms of
this Agreement shall be in writing and shall be deemed delivered (i) when
delivered personally or by verifiable facsimile transmission, unless such
delivery is made on a day that is not a Business Day, in which case such
delivery will be deemed to be made on the next succeeding Business Day, (ii) on
the next Business Day after timely delivery to an overnight courier and (iii) on
the Business Day actually received if deposited in the U.S. mail (certified or
registered mail, return receipt requested, postage prepaid), addressed as
follows:
If to the
Company:
Ener1,
Inc.
0000
Xxxxxxxx, Xxxxx 00X
Xxx Xxxx,
XX 00000
|
|
Attn:
|
Chief
Financial Officer
|
|
|
Tel:
|
(000)
000-0000
|
|
|
Fax:
|
(000)
000-0000
|
If
to the Investor:
Ener1
Group, Inc.
0000
Xxxxxxxx, Xxxxx 00X
Xxx Xxxx,
XX 00000
|
|
Attn:
|
Chief
Executive Officer
|
|
|
Tel:
|
(000)
000-0000
|
|
|
Fax:
|
(000)
000-0000
|
-8-
Any party
hereto may change its address for notice by sending notice in accordance with
this Section
7.7.
7.8 Expenses. Each
of the Company and the Investor shall pay all costs and expenses that it incurs
in connection with the negotiation, execution, delivery and performance of this
Agreement or the other Transaction Documents.
7.9 Entire Agreement;
Amendments. This Agreement and the other Transaction Documents
constitute the entire agreement between the parties with regard to the subject
matter hereof and thereof, superseding all prior agreements or understandings,
whether written or oral, between or among the parties. Except as
expressly provided herein, neither this Agreement nor any term hereof may be
amended except pursuant to a written instrument executed by the Company and the
Investor. Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
[Signature
Pages Follow]
-9-
IN
WITNESS WHEREOF, the undersigned have executed this Securities Purchase
Agreement as of the date first-above written.
ENER1,
INC.
|
By:
|
_______________________________
|
|
|
Name:
|
||
|
Title:
|
||
|
ENER1
GROUP, INC.
|
||
|
By:
|
______________________________
|
|
|
Name:
|
||
|
Title:
|
||
-10-
Annex
I to
Definitions
The following terms, when used in the
attached Note Purchase Agreement (the “Agreement”),
have the respective meanings indicated:
“Affiliate”
means, as to any Person (the “subject
Person”), any other Person (a) that directly or indirectly through
one or more intermediaries controls or is controlled by, or is under direct or
indirect common control with, the subject Person, (b) that directly or
indirectly beneficially owns or holds ten percent (10%) or more of any class of
voting equity of the subject Person, or (c) ten percent (10%) or more of
the voting equity of which is directly or indirectly beneficially owned or held
by the subject Person. For the purposes of this definition, “control”
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, through representation on such Person’s board of
directors or other management committee or group, by contract or
otherwise.
“Board of
Directors” means the Company’s board of directors.
“Business
Day” means any day other than a Saturday, a Sunday or a day on which the
Principal Market is closed or on which banks in the City of New York are
required or authorized by law to be closed.
“Closing”
and “Closing
Date” have the respective meanings specified in Section 2
of this Agreement.
“Commission”
means the Securities and Exchange Commission and any successor agency or
organization.
“Common
Stock” has the meaning specified in the recitals to this
Agreement.
“Company
Subsidiary” means a Subsidiary of the Company.
“Disclosure
Documents” means all SEC Documents filed with the Commission at least
three (3) Business Days prior to the Execution Date.
“Effective
Date” means the date of this Agreement.
“Environmental
Law” means any federal, state, provincial, local or foreign law, statute,
code or ordinance, principle of common law, rule or regulation, as well as any
permit, order, decree, judgment or injunction issued, promulgated, approved or
entered thereunder, relating to pollution or the protection, cleanup or
restoration of the environment or natural resources, or to the public health or
safety, or otherwise governing the generation, use, handling, collection,
treatment, storage, transportation, recovery, recycling, discharge or disposal
of hazardous materials.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
“Execution
Date” means the date of this Agreement.
“GAAP”
means generally accepted accounting principles, applied on a consistent basis,
as set forth in (i) opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (ii) statements of the Financial
Accounting Standards Board and (iii) interpretations of the Commission and the
staff of the Commission. Accounting principles are applied on a
“consistent basis” when the accounting principles applied in a current period
are comparable in all material respects to those accounting principles applied
in a preceding period.
-11-
“Governmental
Authority” means any nation or government, any state, provincial or
political subdivision thereof and any entity or agency exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any stock exchange, securities
market or self-regulatory organization.
“Governmental
Requirement” means any law, statute, code, ordinance, order, rule,
regulation, judgment, decree, injunction, franchise, license or other directive
or requirement of any federal, state, county, municipal, parish, provincial or
other Governmental Authority or any department, commission, board, court, agency
or any other instrumentality of any of them.
“Intellectual
Property” means any U.S. or foreign patents, patent rights, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark and
service xxxx registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, protected
formulae, formulations, processes, methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar technical
information, engineering know-how, customer and supplier information, assembly
and test data drawings or royalty rights.
“Lien”
means, with respect to any Property, any mortgage, pledge, hypothecation,
assignment, deposit arrangement, security interest, tax lien, financing
statement, pledge, charge, or other lien, charge, easement, encumbrance,
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such Property (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the
foregoing).
“Material Adverse
Effect” means an effect on (i) the consolidated business, properties,
assets, operations, results of operations or financial condition of the Company
and the Company Subsidiaries taken as a whole, or (ii) the ability of the
Company to perform its obligations under this Agreement or the other Transaction
Documents that, in any such case, is material and adverse.
“Material
Contracts” means, as to the Company and the Company Subsidiaries, any
agreement required pursuant to or Item 601 of Regulation S-K, as applicable,
promulgated under the Securities Act to be filed as an exhibit to any report,
schedule, registration statement or definitive proxy statement filed or required
to be filed by the Company with the Commission under the Exchange Act or any
rule or regulation promulgated thereunder, and any and all amendments,
modifications, supplements, renewals or restatements thereof.
“Person”
means any individual, corporation, trust, association, company, partnership,
joint venture, limited liability company, joint stock company, Governmental
Authority or other entity.
“Principal
Market” means the principal exchange, market or quotation system on which
the Common Stock is listed, traded or quoted.
“Property”
means property and/or assets of all kinds, whether real, personal or mixed,
tangible or intangible (including, without limitation, all rights relating
thereto).
“Purchase
Price” has the meaning specified in Section
2.
“Regulation
D” has the meaning specified in the recitals to this
Agreement.
“Rule 144”
means Rule 144 under the Securities Act or any successor provision.
“SEC
Documents” means all reports, forms, schedules, registration statements
and definitive proxy statements filed by the Company with the
Commission.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
-12-
“Subsidiary”
means, with respect to any Person, any corporation or other entity of which at
least a majority of the outstanding shares of stock or other ownership interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors (or Persons performing similar functions) of such corporation
or entity (regardless of whether or not at the time, in the case of a
corporation, stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such Person or one or
more of its Subsidiaries or by such Person and one or more of its
Subsidiaries.
“Transaction
Documents” means (i) this Agreement, (ii) the Warrants and (iii) any
other agreement or instrument executed and delivered by or on behalf of the
Company at the Closing in connection with the transactions contemplated by this
Agreement.
-13-
