Attached files
| file | filename |
|---|---|
| 10-Q - ENER1 INC | v183881_10q.htm |
| EX-31.2 - ENER1 INC | v183881_ex31-2.htm |
| EX-32.1 - ENER1 INC | v183881_ex32-1.htm |
| EX-10.6 - ENER1 INC | v183881_ex10-6.htm |
| EX-32.2 - ENER1 INC | v183881_ex32-2.htm |
| EX-31.1 - ENER1 INC | v183881_ex31-1.htm |
| EX-10.7 - ENER1 INC | v183881_ex10-7.htm |
Exhibit
10.5
March 23,
2010
Ener1,
Inc.
1540
Broadway, Suite 25C
New York,
NY 10036
Attention: Charles
Gassenheimer
Chief
Executive Officer
Engagement
Letter
Dear Mr.
Gassenheimer:
This
confirms our understanding that Ener1, Inc. (the “Company”) has engaged Credit
Suisse Securities (USA) LLC (“Credit Suisse”) to advise the Company with
structuring one or more Private Placements (as defined herein) of equity,
equity-linked or debt securities of the Company (the “Securities”).
Section
1. Private
Placement; Services
Credit
Suisse’s services under this agreement consist of advising the Company in
structuring and completing one or more proposed Private
Placements. “Private Placement” means an offer and sale of Securities
made to one or both of the potential purchasers described on Annex B hereto
(each, a “Purchaser”) pursuant to exemptions from the registration requirements
under Section 4(2) and Regulation S under the Securities Act of 1933,
as amended (the “Act”). As used herein, the terms “offer” and “sale” have the
meanings specified in Section 2(3) of the Act. As adviser, Credit Suisse
will provide advice on the Securities to be sold; provided, however, that in no event
shall Credit Suisse be obligated to purchase the Securities for its own account
or for the account of its customers.
Section
2. Compensation
As
compensation for our services hereunder, the Company agrees to pay Credit Suisse
an advisory fee (the “Advisory Fee”) equal to $300,000 on the first date on
which the closing of a Private Placement (a “Closing”) occurs.
Section
3. Expenses;
Payments
In
addition to the compensation payable pursuant to Section 2, the Company agrees
to reimburse Credit Suisse promptly upon request for expenses resulting from or
arising out of this engagement, whether or not any Private Placement is
consummated or any Securities sold, including the fees and expenses of its legal
counsel and of any other advisor retained by Credit Suisse (it being understood
that the retention of any such advisor, other than legal counsel, will be made
with the prior approval of the Company, which approval will not be unreasonably
withheld or delayed).
All fees
and expenses payable under this agreement are payable in U.S. dollars in
immediately available funds. All fees, expenses and other payments
under this agreement shall be paid without giving effect to any withholding or
deduction of any tax or similar governmental assessment.
Section
4. Information
In
connection with Credit Suisse’s engagement, the Company will furnish to, or
cause to be furnished to, Credit Suisse all information concerning the Company
requested by Credit Suisse and will provide Credit Suisse with access to
officers, directors, employees, accountants, counsel and other representatives
(collectively, the “Representatives”) of the Company as may be requested by
Credit Suisse. In performing our services hereunder, Credit Suisse
shall be entitled to rely without investigation upon all available information,
including information supplied to us by or on behalf of the Company or its
Representatives and shall not be responsible for the accuracy or completeness
of, or have any obligation to verify, the same or conduct any appraisal of
assets or liabilities.
Credit
Suisse's undertakings under this agreement are subject to its continued
satisfaction with the results of our ongoing review of the Company's business
and affairs.
No advice
rendered by Credit Suisse, whether formal or informal, may be disclosed to third
parties, in whole or in part, or summarized, excerpted from or otherwise
referred to, without our prior written consent, other than the disclosure of
such advice to the Company’s employees, representatives and agents with a need
to know such information. In addition, neither Credit Suisse nor the
terms of this engagement may be otherwise referred to without Credit Suisse’s
prior written consent. The obligations of the Company pursuant to
this paragraph shall survive any expiration or termination of this agreement or
Credit Suisse’s engagement hereunder. Notwithstanding anything to the
contrary contained in this agreement, the Company (and each employee,
representative or other agent of the Company) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
any Private Placement and all materials of any kind (including opinions or other
tax analyses) that are provided to the Company relating to such tax treatment
and structure.
Section
5. Covenants
of the Company
In
connection with all offers and sales of the Securities, the Company covenants
that it:
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a.
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will
not offer or sell the Securities by means of any form of general
solicitation or general
advertising;
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b.
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will
not offer or sell the Securities to any person who is not an “accredited
investor” as defined in Rule 501 under the
Act;
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c.
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will
exercise reasonable care to ensure that any Purchasers of the Securities
are not underwriters within the meaning of Section 2(11) of the Act and,
without limiting the foregoing, that such purchases will comply with Rule
502(d) under the Act;
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d.
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has
not taken any action, directly or indirectly, including making any offer
or sale of Securities (or a similar class as the Securities) that would
cause any Private Placement contemplated hereby to fail to be entitled to
the exemption from the registration requirements of the Act (other than
offers or sales of securities under an employee benefit plan as defined in
Rule 405 under the Act);
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e.
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will
comply with the federal securities laws, the securities laws of any state
within the United States and any other jurisdictions identified by Credit
Suisse to permit the offer and sale of the Securities in such
jurisdictions, including making applicable filings and or notices such as
Form D pursuant to the requirements of Regulation D of the Act; provided,
however, that the Company will not make any such filings or notices
without giving Credit Suisse reasonable notice thereof and an opportunity
to review;
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f.
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will
cause to be furnished to Credit Suisse at each Closing:
(i) copies (addressed to Credit Suisse, if requested) of such
agreements, opinions, certificates and other documents (including
accountant’s letters) and (ii) opinions of Company’s outside and internal
counsel that are delivered to Purchasers (addressed to Credit Suisse, if
requested), including an opinion stating that the placement of Securities
was exempt from registration under the
Act;
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1
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g.
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shall
be deemed to make all the representations and warranties to Credit Suisse
that the Company has made to the Purchasers in any purchase agreement or
other document; and
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h.
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acknowledges
and understands that it will not communicate in any manner, either through
the media, or through the broad dissemination of electronic or hard copy
information or materials that could be deemed to violate any laws
pertaining to publicity associated with any Private
Placement.
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Section
6. Indemnification
Since
Credit Suisse will be acting on behalf of the Company in connection with this
engagement, the Company and Credit Suisse agree to the indemnity provisions and
other matters set forth in Annex A, which is incorporated by reference into this
agreement and is an integral part hereof. The obligations of the Company
pursuant to Annex A shall survive any expiration or termination of this
agreement or Credit Suisse’s engagement hereunder.
Section
7. Additional
Business
If at any
time on or before March 23, 2011, (the “Anniversary”), the Company considers any
issuance and sale of securities to the public (including for such purpose
SEC-registered, Rule 144A or Regulation S sale of securities of the Company),
and the Company determines in its sole discretion to engage an agent,
underwriter, initial purchaser, financial advisor or person acting in a similar
capacity with respect to any such transaction, the Company agrees to offer
Credit Suisse the right to the exclusive sole lead roles in connection
therewith, such as sole lead agent, arranger, bookrunning managing underwriter,
initial purchaser or placement agent and with at least 60% of the fees,
discounts or other economics. The Company further agrees that customary fees
will be paid for the services provided in connection with any such transactions
and that such engagements will involve the execution of standard Credit Suisse
form agreements. The Company agrees that, regardless of whether or
not Credit Suisse is engaged in any capacity contemplated by this Section 7, the
Company will pay to Credit Suisse aggregate fees of not less than $1.8 million
on or before September 23, 2011 (the “Guaranteed Fee” and, together with the
Advisory Fee, the “Fees”), which amount will be offset against any fees actually
earned by Credit Suisse (but specifically excluding the Advisory Fee) acting in
any such or any similar capacity.
Section
8. Termination
Credit
Suisse’s engagement hereunder may be terminated at any time by either Credit
Suisse or the Company, upon ten days’ prior written notice thereof to the other
party. No termination of Credit Suisse’s engagement hereunder shall
affect (i) the Company’s obligation to pay any Fees earned or accrued prior
to any such termination and the Advisory Fee upon any Closing or to reimburse
Credit Suisse for expenses accrued prior to such termination as provided for
herein, (ii) the Company’s obligations under Annex A or (iii) the
provisions of Sections 5, 6 or 7 of this Agreement.
Section
9. Miscellaneous
In
connection with this engagement, one or more affiliates of Credit Suisse may
perform a portion of the services to be provided hereunder and, to the extent
requested by Credit Suisse, the Company will pay a portion of the fees payable
to Credit Suisse hereunder to such affiliate(s) as long as such affiliate(s)
is/are registered with the SEC as a broker-dealer or are exempt from such
registration.
The Company acknowledges and agrees that Credit
Suisse has been retained solely to act as
its advisor in connection with one or more Private
Placements and that no fiduciary relationship between the Company
and Credit Suisse has been created in respect of any transaction contemplated by this
engagement or Credit Suisse’s engagement
hereunder, regardless of whether Credit Suisse has advised or is advising the
Company on other matters. In
connection with this engagement, Credit Suisse is acting as an independent
contractor, with obligations owing solely to the Company and not in any other
capacity.
2
The
Company agrees that Credit Suisse and/or one of its affiliates may purchase a
portion of the Securities on the same terms and conditions as the other
investors participating in any Private Placement. The
Company hereby agrees to waive all conflicts of interest, if any, that Credit
Suisse may have in connection with its engagement hereunder and any purchase of
Securities.
The
Company acknowledges that Credit Suisse is part of the Credit Suisse Group (the
"CS Group"), a worldwide group of companies that is involved in a wide range of
banking, investment banking, private banking, private equity, asset management
and other investment and financial businesses and services, both for their own
account and for the accounts of clients and customers. Credit Suisse and the
other members of the CS Group provide a full range of securities services,
including securities trading and brokerage activities. Credit Suisse
and the other members of the CS Group may acquire, hold or sell, for their own
accounts and the accounts of customers, equity, debt and other securities and
financial instruments (including bank loans and other obligations) of the
Company and any other company that may be involved in the transactions and other
matters contemplated by this agreement, as well as provide investment banking
and other financial services to such companies. Credit Suisse and the
other members of the CS Group may have interests, or be engaged in a broad range
of transactions involving interests, that differ from those of the
Company. The Company acknowledges and agrees that no member of the CS
Group has any obligation to disclose such interests or transactions (or
information relating thereto) to the Company and that Credit Suisse’s agreement
to provide services to the Company hereunder will not require any other business
or member of the CS Group to restrict its activities in any way or require the
CS Group to provide the Company with any information whatsoever about, or
derived from, those activities. Credit Suisse and the other members of the CS
Group and certain of their respective employees, including members of the team
performing this engagement, as well as certain private equity funds associated
or affiliated with the CS Group in which they may have financial interests, may
from time-to-time acquire, hold or make direct or indirect investments in or
otherwise finance a wide variety of companies, including parties with a
potential direct or indirect interest in any transaction to which this
engagement relates. The CS Group has adopted policies and procedures
designed to preserve the independence of its research analysts whose views may
differ from those of the CS Group's investment banking department. Neither
Credit Suisse nor any other member of the CS Group shall be liable to account to
the Company for, or (to the extent permitted by law) disclose to the Company,
any charges or other remuneration made or received by it.
The
Company acknowledges that Credit Suisse may, at its option and expense, and no
earlier than the first to occur of (i) the closing of definitive agreements
regarding any Private Placement or (ii) the public announcement of any Private
Placement, place announcements and advertisements or otherwise publicize such
Private Placement (which may include the reproduction of the Company’s logo and
a hyperlink to the Company’s website on Credit Suisse’s website) and in such
financial and other newspapers and journals as it may choose, stating that
Credit Suisse has acted as advisor to the Company in connection with such
Private Placement.
The
Company understands that Credit Suisse is not undertaking to provide any legal,
accounting or tax advice in connection with this agreement. Credit
Suisse shall not be responsible for the underlying business decision of the
Company to effect a transaction contemplated by this engagement or for the
advice or services provided by any of the Company’s other advisors or
contractors.
Except as
otherwise required or requested by law or judicial or regulatory authority, all
non-public information concerning the Company that is given to Credit Suisse by
the Company or its Representatives in connection with this engagement and not
otherwise available to Credit Suisse will be used solely in the course of the
performance of our services hereunder and will be treated confidentially by us
for so long as it remains non-public.
3
This
agreement shall be binding upon and inure to the benefit of the Company, Credit
Suisse and their respective successors and permitted assigns. This
agreement may not be modified, and no provision hereof may be waived, except
pursuant to a written document executed by both parties. Neither
party hereto may assign this agreement or any rights or obligations hereunder
without the prior written consent of the other party. Except as
contemplated by Annex A, this agreement is not intended to confer rights upon
any persons not a party hereto (including security holders, employees or
creditors of the Company). This agreement constitutes the entire
agreement between the parties and supersedes all prior agreements, both written
and oral, with respect to the subject matter hereof. If any term,
provision, covenant or restriction herein (including Annex A) is held by a court
of competent jurisdiction to be invalid, void or unenforceable or against public
policy, the remainder of the terms, provisions and restrictions contained herein
shall remain in full force and effect and shall in no way be modified or
invalidated.
All
aspects of the relationship created by this agreement or the engagement
hereunder, any other agreements relating to the engagement hereunder and all
claims or causes of action (whether in contract, tort or otherwise) that may be
based upon, arise out of or relate to this agreement or the engagement hereunder
shall be governed by and construed in accordance with the laws of the State of
New York, applicable to contracts made and to be performed therein and, in
connection therewith, the parties hereto consent to the exclusive jurisdiction
of the Supreme Court of the State of New York or the United States District
Court for the Southern District of New York, in each case sitting in New York
County and agrees to venue in such courts. Notwithstanding the
foregoing, solely for purposes of enforcing the Company’s obligations under
Annex A, the Company consents to personal jurisdiction, service and venue in any
court proceeding in which any claim or cause of action relating to or arising
our of this agreement or the engagement hereunder is brought by or against any
Indemnified Person. CREDIT SUISSE AND THE COMPANY EACH HEREBY AGREES
TO WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTER CLAIM OR
ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ENGAGEMENT
HEREUNDER.
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We are
delighted to accept this engagement and look forward to working with you on this
assignment. Please confirm your agreement with the foregoing by
signing and returning to us the enclosed copy of this agreement.
| Very truly yours, | |
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CREDIT
SUISSE SECURITIES (USA) LLC
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By:
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Name:
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Title:
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[Signature page to the Engagement
Letter]
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Accepted
and agreed to as of the date first written above:
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ENER1,
INC.
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By:
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Name:
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Title:
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[Signature page to the Engagement
Letter]
6
ANNEX
A
In
further consideration of the agreements contained in our engagement letter (the
“engagement”), Ener1, Inc. (the “Company”) agrees to indemnify and hold harmless
Credit Suisse Securities (USA) LLC (“Credit Suisse”), its affiliates, the
respective members, directors, officers, partners, agents and employees of
Credit Suisse and its affiliates, and any person controlling Credit Suisse or
any of its affiliates (collectively, “Indemnified Persons”) from and against,
and the Company agrees that no Indemnified Person shall have any liability to
the Company or its owners, parents, affiliates, security holders or creditors
for, any losses, claims, damages or liabilities (including actions or
proceedings in respect thereof) (collectively, “Liabilities”) (A) related to or
arising out of (i) the Company’s actions or failures to act (including
statements or omissions made or information provided by the Company or its
agents), (ii) actions or failures to act by an Indemnified Person with the
Company’s consent or in reliance on the Company’s actions or failures to act,
(iii) or based upon any untrue statement or any alleged untrue statement of any
material fact contained in any written communication provided by or on behalf of
the Company to any actual or prospective purchaser of the Securities, or related
to, arising out of or based upon the omission or alleged omission to state
therein 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, or (B) otherwise related to or arising out of the engagement,
Credit Suisse’s performance thereof or any other services Credit Suisse is asked
to provide to the Company (in each case, including related activities prior to
the date hereof), except that this Clause (B) shall not apply to any Liabilities
to the extent that they are finally determined by a court of competent
jurisdiction to have resulted primarily from the bad faith or gross negligence
of such Indemnified Person. If such indemnification is for any reason
not available or insufficient to hold an Indemnified Person harmless (other than
pursuant to the immediately preceding sentence), the Company agrees to
contribute to the Liabilities involved in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and by
Credit Suisse, on the other hand, with respect to the engagement or, if such
allocation is determined by a court of competent jurisdiction to be unavailable,
in such proportion as is appropriate to reflect other equitable considerations
such as the relative fault of the Company on the one hand and of Credit Suisse
on the other hand; provided, however, that, to the
extent permitted by applicable law, the Indemnified Persons shall not be
responsible for expenses and Liabilities which in the aggregate are in excess of
the amount of all fees actually received by Credit Suisse from the Company in
connection with the engagement. Relative benefits to the Company, on
the one hand, and Credit Suisse, on the other hand, with respect to the
engagement shall be deemed to be in the same proportion as (i) the total value
received or proposed to be received by the Company pursuant to the engagement,
as the case may be, whether or not consummated, contemplated by the engagement,
bears to (ii) all fees actually received by Credit Suisse in connection with the
engagement. Relative fault shall be determined, in the case of Liabilities
arising out of or based on any untrue statement or any alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company to Credit Suisse and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act of
1933, as amended) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Company will not permit any
settlement or compromise to include, or consent to the entry of any judgment
that includes, a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of an Indemnified Person, without such
Indemnified Person’s prior written consent. If any Indemnified Person becomes
involved in any capacity in any action, claim, suit, investigation or
proceeding, actual or threatened, brought by or against any person, including
stockholders of the Company, in connection with or as a result of the engagement
or any matter referred to in the engagement, and assuming such Indemnified
Person is entitled to indemnification hereunder pursuant to the terms hereof,
the Company also agrees to reimburse such Indemnified Persons for their expenses
(including, without limitation, reasonable legal fees and other costs and
expenses incurred in connection with investigating, preparing for and responding
to third party subpoenas or enforcing the engagement) as such expenses are
incurred. Any amounts received pursuant to this indemnity (including
any amounts representing the reimbursement of costs or expenses) by an
Indemnified Person who is subsequently held by a court of competent jurisdiction
not to be entitled to be indemnified hereunder shall be promptly returned to the
Company. No Indemnified Person shall settle or agree to settle any action to
which it is a party and as to which it seek indemnification hereunder without
the Company’s prior written consent. The Company’s obligations pursuant to this
Annex A shall inure to the benefit of any successors, assigns, heirs and
personal representatives of each Indemnified Person and are in addition to any
rights that each Indemnified Person may have at common law or
otherwise.