CLASS E WARRANT TO PURCHASE COMMON STOCK OF ENER1, INC.
Exhibit
10.2
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS SHALL BE 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, SALE OR TRANSFER.
TO
PURCHASE COMMON STOCK
OF
ENER1,
INC.
Issue
Date: October 1, 2010
This Class E Warrant (this “Warrant”)
entitles ENER1 GROUP, INC., a Florida corporation, or any subsequent holder
hereof (the “Holder”),
to purchase from ENER1, INC., a Florida corporation (the “Company”),
up to one hundred seventy four thousand sixty two (174,062) fully paid and
nonassessable shares (the “Warrant
Shares”) of the Company’s common stock, par value $0.01 per share (the
“Common
Stock”), at a price per share equal to $3.7877 (the “Exercise
Price”), on the terms and subject to the conditions set forth herein.
This Warrant is issued pursuant to the terms of a Securities Purchase Agreement,
dated as of October 1, 2010 (the “Purchase
Agreement”), and the date on which this Warrant is issued is referred to
herein as the “Issue
Date”. Capitalized terms used herein and not otherwise defined have the
meanings set forth in the Purchase Agreement.
1.
Exercise.
(a) Right to Exercise; Exercise
Price. The Holder shall have the right to exercise this
Warrant at any time and from time to time during the period beginning on the
date that is six (6) months from the Issue Date (the “Commencement
Date”) and ending on the fifth (5th)
anniversary of the Commencement Date (the “Expiration
Date”); provided, however, that if the
Expiration Date occurs on a date that is not a Business Day, the immediately
following Business Day shall be deemed to be the Expiration Date. The Holder may
pay the Exercise Price in either of the following forms or, at the election of
the Holder, a combination thereof:
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(i) through
a cash exercise (a “Cash
Exercise”) by delivering immediately available funds, or
(ii) through
a cashless exercise (a “Cashless
Exercise”) by noting on the Exercise Notice that the Holder wishes to
effect a Cashless Exercise, in which case the Company shall issue to the Holder
a number of Warrant Shares determined as follows:
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X =
Y x (A-B)/A
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where:
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X =
the number of Warrant Shares to be issued to the
Holder;
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Y =
the number of Warrant Shares with respect to which this Warrant is being
exercised;
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A =
the Market Price (as defined below) as of the Exercise Date;
and
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B =
the Exercise Price.
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For
purposes of Rule 144, it is intended and acknowledged that the Warrant Shares
issued in a Cashless Exercise transaction shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares required by Rule
144 shall be deemed to have been commenced, on the Issue Date. “Market
Price” means, as of any date, the arithmetical average of daily VWAP
during the ten (10) trading days immediately preceding (but not including) such
date, and “VWAP”
means the volume weighted average price of the Common Stock on the Principal
Market as reported by Bloomberg Financial Markets or by a comparable reporting
service
(b) Exercise
Notice. In order to exercise this Warrant, the Holder shall
send to the Company by facsimile transmission, at any time prior to 6:00 p.m.,
eastern time, on the Business Day on which the Holder wishes to effect such
exercise (the “Exercise
Date”), (i) a notice of exercise in substantially the form attached
hereto as Exhibit A
(the “Exercise
Notice”), (ii) a copy of the original Warrant, and (iii) in the case of a
Cash Exercise, the Exercise Price by wire transfer of immediately available
funds. The Exercise Notice shall state the name or names in which the
shares of Common Stock that are issuable on such exercise shall be
issued. In the case of a dispute between the Company and the Holder
as to the calculation of the Exercise Price or the number of Warrant Shares
issuable hereunder (including, without limitation, the calculation of any
adjustment to the Exercise Price or the Warrant Shares pursuant to Section 5
below), the Company shall issue to the Holder the number of Warrant Shares that
are not disputed within the time periods specified in Section 2
below and shall submit the disputed calculations to a certified public
accounting firm of national reputation (other than the Company’s regularly
retained accountants) within two (2) Business Days following the date on which
the Holder’s Exercise Notice is delivered to the Company. The Company
shall cause such accountant to calculate the Exercise Price and/or the number of
Warrant Shares issuable hereunder and to notify the Company and the Holder of
the results in writing no later than three (3) Business Days following the day
on which such accountant received the disputed calculations (the “Dispute
Procedure”). Such accountant’s calculation shall be deemed conclusive
absent manifest error. The fees of any such accountant shall be borne
by the party whose calculations were most at variance with those of such
accountant.
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(c) Holder of
Record. The Holder shall, for all purposes, be deemed to have
become the holder of record of the Warrant Shares specified in an Exercise
Notice on the Exercise Date specified therein, irrespective of the date of
delivery of such Warrant Shares subject, in the case of a Cash Exercise, to
payment of the Exercise Price. Except as specifically provided
herein, nothing in this Warrant shall be construed as conferring upon the Holder
hereof any rights as a shareholder of the Company prior to the Exercise
Date.
(d) Cancellation of
Warrant. This Warrant shall be canceled upon its exercise in
full and, if this Warrant is exercised in part, the Company shall, at the time
that it delivers Warrant Shares to the Holder pursuant to such exercise as
provided herein, issue a new warrant, and deliver to the Holder a certificate
representing such new warrant, with terms identical in all respects to this
Warrant (except that such new warrant shall be exercisable into the number of
shares of Common Stock with respect to which this Warrant shall remain
unexercised); provided,
however, that the Holder shall be entitled to exercise all or any portion
of such new warrant at any time following the time at which this Warrant is
exercised, regardless of whether the Company has actually issued such new
warrant or delivered to the Holder a certificate therefor.
2.
Delivery
of Warrant Shares Upon Exercise. Upon receipt of a fax copy of
an Exercise Notice pursuant to Section 1
above, the Company shall, no later than the close of business on the third (3rd)
Business Day following the later to occur of (i) the Exercise Date specified in
such Exercise Notice and (ii) such later date on which the Company has received
payment of the Exercise Price (such later date being referred to as a “Delivery
Date”), issue and deliver or caused to be delivered to the Holder the
number of Warrant Shares determined as provided herein. The Company
shall effect delivery of Warrant Shares to the Holder, as long as the Company’s
designated transfer agent (the “Transfer
Agent”) participates in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer program (“FAST”) and
no restrictive legend is required pursuant to the terms of this Warrant or the
Purchase Agreement, by crediting the account of the Holder or its nominee at DTC
(as specified in the applicable Exercise Notice) with the number of Warrant
Shares required to be delivered, no later than the close of business on such
Delivery Date. In the event that the Transfer Agent is not a
participant in FAST or if the Holder so specifies in a Exercise Notice or
otherwise in writing on or before the Exercise Date, the Company shall effect
delivery of Warrant Shares by delivering to the Holder or its nominee physical
certificates representing such Warrant Shares, no later than the close of
business on such Delivery Date. Warrant Shares delivered to the
Holder shall not contain any restrictive legend unless such legend is required
pursuant to the terms of the Purchase Agreement.
3.
[Intentionally
Omitted]
4.
[Intentionally Omitted]
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5.
Anti-Dilution Adjustments;
Distributions; Other Events. The Exercise Price and the number of Warrant
Shares issuable hereunder shall be subject to adjustment from time to time as
provided in this Section
5. In the event that any adjustment of the Exercise Price
required herein results in a fraction of a cent, the Exercise Price shall be
rounded up or down to the nearest one hundredth of a cent.
(a)
Subdivision or Combination
of Common Stock. If the Company, at any time after the Issue
Date, subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the outstanding shares of Common
Stock into a greater number of shares, then effective upon the close of business
on the record date for effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately reduced and the
number of Warrant Shares issuable hereunder proportionately
increased. If the Company, at any time after the Issue Date, combines
(by reverse stock split, recapitalization, reorganization, reclassification or
otherwise) the outstanding shares of Common Stock into a smaller number of
shares, then, effective upon the close of business on the record date for
effecting such combination, the Exercise Price in effect immediately prior to
such combination will be proportionally increased and the number of Warrant
Shares issuable hereunder proportionately reduced.
(b) Distributions. If,
at any time after the Issue Date, the Company declares or makes any distribution
of cash or any other assets (or rights to acquire such assets) to holders of
Common Stock, as a partial liquidating dividend or otherwise, including without
limitation any dividend or distribution to the Company’s shareholders in shares
(or rights to acquire shares) of capital stock of a subsidiary) (a “Distribution”),
the Company shall deliver written notice of such Distribution (a “Distribution
Notice”) to the Holder at least thirty (30) days prior to the earlier to
occur of (i) the record date for determining shareholders entitled to such
Distribution (the “Record
Date”) and (ii) the date on which such Distribution is made (the “Distribution
Date”) (the earlier of such dates being referred to as the “Determination
Date”). In the Distribution Notice to the Holder, the Company
shall indicate whether the Company has elected (A) to deliver to the Holder,
upon any exercise of this Warrant after the Determination Date, the same amount
and type of assets being distributed in such Distribution as though the Holder
were, on the Determination Date, a holder of a number of shares of Common Stock
into which this Warrant is exercisable as of such Determination Date (such
number of shares to be determined at the Exercise Price then in effect and
without giving effect to any limitations on such exercise) or (B) upon any
exercise of this Warrant on or after the Determination Date, to reduce the
Exercise Price applicable to such exercise by reducing the Exercise Price in
effect on the Business Day immediately preceding the Record Date by an amount
equal to the fair market value of the assets to be distributed divided by the
number of shares of Common Stock as to which such Distribution is to be made,
such fair market value to be reasonably determined in good faith by the
Company’s Board of Directors. If the Company does not notify the
Holder of its election pursuant to the preceding sentence on or prior to the
Determination Date, the Company shall be deemed to have elected clause (A) of
the preceding sentence.
(c) Adjustments; Additional
Shares, Securities or Assets. In the event that at any time,
as a result of an adjustment made pursuant to this Section 5,
the Holder of this Warrant shall, upon exercise of this Warrant, become entitled
to receive securities or assets (other than Common Stock) then, wherever
appropriate, all references herein to shares of Common Stock shall be deemed to
refer to and include such shares and/or other securities or assets; and
thereafter the number of such shares and/or other securities or assets shall be
subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section
5.
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6. Fractional
Interests.
No fractional shares or scrip
representing fractional shares shall be issuable upon the exercise of this
Warrant, but instead shall be rounded up or down to the nearest whole share
amount.
7. Transfer of this
Warrant.
The Holder may sell, transfer, assign,
pledge or otherwise dispose of this Warrant, in whole or in part, as long as
such sale or other disposition is made pursuant to an effective registration
statement or an exemption from the registration requirements of the Securities
Act. Upon such transfer or other disposition (other than a pledge),
the Holder shall deliver this Warrant to the Company together with a written
notice to the Company, substantially in the form of the Transfer Notice attached
hereto as Exhibit B
(the “Transfer
Notice”), indicating the person or persons to whom this Warrant shall be
transferred and, if less than all of this Warrant is transferred, the number of
Warrant Shares to be covered by the part of this Warrant to be transferred to
each such person. Within three (3) Business Days of receiving a Transfer Notice
and the original of this Warrant, the Company shall deliver to the each
transferee designated by the Holder a Warrant or Warrants of like tenor and
terms for the appropriate number of Warrant Shares and, if less than all this
Warrant is transferred, shall deliver to the Holder a Warrant for the remaining
number of Warrant Shares.
8. Benefits of this
Warrant.
This Warrant shall be for the sole and
exclusive benefit of the Holder of this Warrant and nothing in this Warrant
shall be construed to confer upon any person other than the Holder of this
Warrant any legal or equitable right, remedy or claim hereunder.
9. Loss, theft, destruction or
mutilation of Warrant.
Upon receipt by the Company of evidence
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of indemnity reasonably satisfactory to the
Company, and upon surrender of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.
10. Notice or
Demands.
Any notice, demand or request required
or permitted to be given by the Company or the Holder pursuant to the terms of
this Warrant 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:
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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
and if to
the Holder, to such address for such party as shall appear on the records of the
Company. Any party may change its address for notice by sending notice in
accordance with this Section
10.
11. Applicable
Law.
This Warrant is issued under and shall
for all purposes be governed by and construed in accordance with 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 in
connection herewith or with any transaction contemplated hereby, 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 Warrant 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.
12. Amendments.
No amendment, modification or other
change to, or waiver of any provision of, this Warrant may be made unless such
amendment, modification, change or waiver is set forth in writing and is signed
by the Company and the Holder.
13. Entire
Agreement.
This
Warrant constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Warrant supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
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14. Headings.
The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
[Signature
Page to Follow]
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IN
WITNESS WHEREOF, the Company has duly executed and delivered this Warrant as of
the Issue Date.
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ENER1,
INC.
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By:
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Name:
Xxxxxxx Xxxxxx
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Title:
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EXHIBIT A to
WARRANT
EXERCISE
NOTICE
The undersigned Holder hereby
irrevocably exercises the right to purchase __________ shares of Common
Stock (“Warrant
Shares”) of Ener1, Inc. (the “Company”) evidenced
by the attached Class E Warrant (the “Warrant”). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.
1.
Form of Exercise
Price. The Holder intends that payment of the Exercise Price shall be
made as:
______ a Cash Exercise with
respect to _________________ Warrant Shares; and/or
______ a Cashless Exercise
with respect to _________________ Warrant Shares, as permitted by Section 1(a)
of the attached Warrant.
2.
Payment of Exercise
Price. In the event that the Holder has elected a Cash Exercise with
respect to some or all of the Warrant Shares to be issued pursuant hereto, the
Holder shall pay the sum of $________________ to the Company in accordance with
the terms of the Warrant.
Date:
______________________
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Name
of Registered Holder
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By:
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Name:
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Title:
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EXHIBIT B to
WARRANT
TRANSFER
NOTICE
FOR VALUE
RECEIVED, the undersigned Holder of the attached Class E Warrant hereby sells,
assigns and transfers unto the person or persons named below the right to
purchase ________shares of the Common Stock of _____________________ evidenced
by the attached Class E Warrant.
Date:
______________________
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Name
of Registered
Holder
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By:
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Name:
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Title:
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Transferee
Name and Address:
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