NOTE PURCHASE AGREEMENT
EXHIBIT 10.48
Execution
Copy
THIS NOTE PURCHASE AGREEMENT (this “Agreement”) is made as of March 30, 2010 by and between
Energy Focus, Inc., a Delaware corporation (the “Company”), and EF Energy Partners LLC, an Ohio
limited liability company (the “Purchaser”).
WHEREAS, the Company desires sell to Purchaser, and the Purchaser desires to buy from the
Company, a Secured Subordinated Promissory Note Due March 15, 2013 of the Company in the form
attached hereto as Exhibit A and in the maximum principal amount indicated under the
signature of the Purchaser (the “Note”), which Note will be secured and subordinated as provided
therein;
NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Purchase and Sale. (a) The Company agrees to and will issue, sell and deliver to
the Purchaser, and the Purchaser subscribes for and agrees to purchase from the Company, the Note.
Concurrently with the execution and delivery hereof, the Purchaser will fund the principal amount
(the “Purchase Price”) indicated under the signature of the Purchaser by wire transfer in
immediately available funds to the Company in accordance with its written instructions or as
otherwise agreed by the Company.
(b) The Note will be secured by the collateral covered by a Security Agreement between the
parties. The issuance, sale, and delivery of the Note will be accompanied by Warrant Acquisition
Agreement (the “Warrant Agreement”) between the Company and each of the members of the Purchaser
(the “Members”) and the issuance by the Company to each Member of a Common Stock Purchase Warrant
(each a “Warrant”).
(c) Delivery. The sale and purchase of the Note (the “Closing“) shall take place
concurrently with the execution and delivery of this Agreement by the Purchaser on the date hereof
(the “Closing Date“). At the Closing, Company will deliver to the Purchaser the Note to be
purchased and the Purchaser shall deliver to the Company the Purchase Price. Company may conduct
one or more additional closings within 365 calendar days of the initial Closing (each, a
“Subsequent Closing” and also generally a “Closing”) to be held at such place and time as Company
and the Purchaser may determine (each, a “Subsequent Closing Date”). At each Subsequent Closing,
Company will deliver to the Purchaser either an amended and restated note or a new and separate
note to be purchased by the Purchaser upon receipt of the Purchase Price.
Section 2. Company’s Representations and Warranties. The Company makes the following
representations and warranties:
(a) The Company is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware.
(b) All corporate action on the part of the Company and its officers, directors and
shareholders necessary for the execution, delivery and performance of this Agreement and the
authorization, issuance and delivery of the Note being issued pursuant to this Agreement has been
taken as of the date hereof.
(c) The Company is not in violation of any applicable statute, rule or regulation adopted,
enacted or promulgated by any government or governmental authority the consequence of which would
have an adverse effect on consummation of the transactions contemplated by this Agreement in
accordance with its terms or a material adverse effect on the Company’s business or financial
condition.
(d) Neither execution and delivery of this Agreement, the Note, the Warrant Agreement or the
Warrants by the Company nor consummation of the transactions contemplated hereby or thereby will
(i) violate or conflict with the articles of incorporation or by-laws of the Company, (ii) violate
any provisions of law applicable to the Company, or (iii) violate, conflict with or result in a
breach of or default under any contract, instrument or other agreement to which the Company is a
party or any governmental or judicial order or decree applicable to the Company.
(e) Each of the representations and warranties made by the Company in the Warrant Agreement is
true and correct.
Section 3. Purchaser’s Representations and Warranties. (a) The Purchaser represents and
warrants to the Company that: (i) all documents, records and books relating to the Purchaser’s
investment in the Company requested by the Purchaser have been made available or delivered to the
Purchaser and that all questions of the Purchaser relating to said investment have been answered by
the Company; (ii) it understands that the Note is a speculative investment which involves a high
degree of risk of loss by the Purchaser of its investment therein; (iii) it has been offered the
opportunity to ask questions of appropriate officers of the Company with respect to its business
and affairs, and such officers have answered all such questions to its satisfaction; (iv) its
purchase of the Note is being made for the Purchaser’s own account for investment purposes and with
no intention of immediate distribution; (v) the Purchaser has the requisite knowledge and
experience in financial and business matters to enable it to evaluate the merits and risks of an
investment in the Note; (vi) it is aware that the Note may be a “restricted security” within the
meaning of such term under Rule 144 of the Rules of the SEC (“Rule 144”), that the Note may be
subject to the resale restrictions of Rule 144 (unless another exemption is available under the
Securities Act of 1933, as amended (the “Securities Act”), and that, if the Purchaser at any time
is deemed to be an affiliate of the Company, the Note may be subject to
2
the additional resale restrictions under Rule 144 applicable to affiliates; (vii) it is aware that
until the Note may be registered under the Securities Act, it may be unable to liquidate its
investment in the Note despite a need to do so; and (viii) it is aware that the Note may bear a
legend conditioning the transfer of the Note upon the receipt of a satisfactory opinion to the
effect that any proposed transfer of the Note is exempt from registration under the Securities Act,
or the like.
(b) The Purchaser represents and warrants to the Company that it is either (i) an
accredited investor under Rule 501(a) of Regulation D under the Securities Act of 1933 (the “Act”)
for the following reasons, or (ii) is not an accredited investor as marked below.
Please check each of the statements below which are applicable to you:
| o | The Purchaser is a natural person whose individual net work, or joint net worth with his/her spouse, at the time of his/her purchase exceeds $1,000,000. | ||
| o | The Purchaser is a natural person who had individual income in excess of $200,000 in each of 2007 and 2008, or joint income with his/her spouse in excess of $300,000 in each of those years, and who reasonably expects the same or greater income level in 2009. | ||
| o | The Purchaser is a pension plan whose investments are directed by a registered investment advisor or an accredited investor, or whose plan assets exceed $5,000,000. | ||
| o | The Purchaser is a corporation, partnership, or limited liability company whose assets exceed $5,000,000. | ||
| o | The Purchaser is a trust whose assets exceed $5,000,000. | ||
| o | The Purchaser is a director or officer of the Company. | ||
| o | The Purchaser is an entity in which all of the equity owners are accredited investors. | ||
| o | The Purchaser is not an accredited investor. |
(c) The Purchaser is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Ohio.
(d) All action on the part of the Purchaser and members or managers necessary for the
execution, delivery and performance of this Agreement and the authorization, issuance and delivery
of the other documents being issued pursuant to this Agreement has been taken as of the date
hereof.
3
(e) The Purchaser is not in violation of any applicable statute, rule or regulation adopted,
enacted or promulgated by any government or governmental authority the consequence of which would
have an adverse effect on consummation of the transactions contemplated by this Agreement in
accordance with its terms or a material adverse effect on the Purchaser’s business or financial
condition.
(f) Neither execution and delivery of this Agreement by the Company nor consummation of the
transactions contemplated hereby will (i) violate or conflict with the articles of organization or
operator’s agreement of the Purchaser, (ii) violate any provisions of law applicable to the
Purchaser, or (iii) violate, conflict with or result in a breach of or default under any contract,
instrument or other agreement to which the Purchaser is a party or any governmental or judicial
order or decree applicable to the Purchaser.
Section 4. Conditions to Closing of the Purchaser. Purchaser’s obligations at the Closing are
subject to the fulfillment, on or prior to the Closing Date, of all of the following conditions,
any of which may be waived in whole or in part by all of the Purchasers:
(a) Representations and Warranties. The representations and warranties made by Company in
Section 2 hereof and in the other documents shall be true and correct in all material respects.
(b) Governmental Approvals and Filings. Except for any notices required or permitted to be
filed after the Closing Date with certain federal and state securities commissions and as otherwise
disclosed and required under the terms and conditions of the Warrant Agreement, Company shall have
obtained all governmental approvals, if any, required in connection with the lawful sale and
issuance of the Notes and Warrants.
(c) Legal Requirements. At the Closing, the sale and issuance by Company, and the purchase by
the Purchaser, of the Note shall be legally permitted by all laws and regulations to which that
Purchaser, or Company is subject.
(d) Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated at the Closing and all documents and instruments incident to such
transactions shall be reasonably satisfactory in substance and form to that Purchaser.
(e) Transaction Documents. Company shall have duly executed and delivered to the Purchaser
the following documents (the “Transaction Documents”):
(i) This Agreement;
(ii)The
Note;
(iii) The
Warrant Agreement;
(iv) Each Warrant issued under the Warrant Agreement; and
4
(v) The Security Agreement in the form of Exhibit D hereto
(the “Security Agreement“); and
(f) Perfection of Liens. All documents or instruments reasonably requested by the Purchasers
necessary to create and perfect the liens described in the Security Agreement (the “Liens”) shall
have been delivered to the Purchasers, including but not limited to, taking any other action
necessary under the Uniform Commercial Code as enacted under the laws of Delaware to perfect such
Liens.
(g) Consents, Waivers, Etc. Company shall have obtained all necessary consents, approvals or
waivers of any and all third parties, relating to the transaction contemplated hereby.
(h) Legal Requirements. At the Closing, the sale and issuance by Company, and the purchase by
the Purchaser, of the Notes and the issuance by the Company of the Warrants to the Members shall be
legally permitted by all laws and regulations to which such Purchasers or Company are subject.
Section 5. Conditions to Obligations of Company. Company’s obligation to issue and sell the
Note, at the initial Closing and at each Subsequent Closing are subject to the fulfillment, on or
prior to the Closing Date, of the following conditions, any of which may be waived in whole or in
part by Company:
(a) Representations and Warranties. The representations and warranties made by the Purchaser
in Section 3 hereof shall be true and correct in all material respects.
(b) Governmental Approvals and Filings. Except for any notices required or permitted to be
filed after the Closing Date with certain federal and state securities commissions, and as required
and disclosed under the Warrant Agreement, Company shall have obtained all governmental approvals
and made all governmental filings required in connection with the lawful sale and issuance of the
Notes and Warrants.
(c) Legal Requirements. At the initial Closing and at each Subsequent Closing, the sale and
issuance by Company, and the purchase by the Purchaser, of the Notes shall be legally permitted by
all laws and regulations to which the Purchaser or Company are subject.
(d) Purchase Price. The Purchaser shall have delivered to Company the Purchase Price in
respect of the Note being purchased by such Purchaser referenced in Section 1 hereof.
(e) Securities Laws. The transactions contemplated under this Agreement shall have been
completed in compliance with all applicable securities and other laws.
Section 6. Brokers Commissions. The Purchaser will indemnify and hold harmless the Company
from the commission, fee or claim of any person, firm or corporation employed or retained or
claiming to be employed or retained by the Purchaser to bring about, or to represent it in, the
transaction contemplated hereby. The Company will indemnify and hold harmless the Purchaser from
the commission, fee or claim of any person, firm or corporation employed or
5
retained by the Company to bring about, or to represent it in, the transaction contemplated hereby.
Section 7. Amendment and Modification. The parties hereto may not amend, modify or supplement
this Agreement except by a writing signed by both of the parties hereto.
Section 8. Binding Effect, No Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, permitted assigns, heirs and
legal representatives, and neither party shall be entitled to assign its rights hereunder except
upon the other party’s prior written consent; provided, however, (a) that Company may assign this
Agreement in connection with a merger or consolidation involving Company, or a sale of
substantially all of Company’s assets, so long as the purchaser or assignee assumes Company’s
obligations under this Agreement, and (b) that Purchaser may assign this Agreement in connection
with a permitted sale or transfer of the Note.
Section 9. Entire Agreement. This instrument contains the entire agreement of the parties
hereto with respect to the purchase of the Securities and the other transactions contemplated
herein, and supersedes all prior understandings and agreements of the parties with respect to the
subject matter hereof.
Section 10. Headings. The descriptive headings in this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.
Section 11. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
Section 12. Governing Law. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Delaware applicable to contracts made and to be performed therein,
without regard to the conflicts of law principles thereof.
6
IN WITNESS WHEREOF, the parties hereto have caused this Note Purchase Agreement to be duly
executed as of the day and year first above written.
| Energy Focus, Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Name of Purchaser: EF Energy Partners LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Address: | 0000 Xxxxxxxx Xxxx Xxxx, XX 00000 |
|||
| Principal Amount: $1,150,000.00 | ||||
7
