AMENDED AND RESTATED INTERCREDITOR AGREEMENT
THIS AMENDED
AND RESTATED INTERCREDITOR AGREEMENT (this “ Agreement
”), dated as of the 11 th day of March, 2005 (the
“ Effective Date ”), is by and among Ener1, Inc.
(“ Borrower ”), Satellite Asset Management, L.P.
(“Satellite ”), Ener1 Battery Company, Inc.,
(“ Guarantor ”), each of the entities whose
names appear on the signature pages hereof under the heading
“Existing Investors” (each such entity, an “
Existing Investor ”, and collectively, the “
Existing Investors ”), and each of the entities whose
names appear on the signature pages hereof under the heading
“New Investors” (each such entity, a “ New
Investor ”, and collectively, the “ New
Investors”). The Existing Investors and New Investors are
sometimes referred to herein collectively as the
“Investors ” and individually as an “
Investor ”.
R E C I T A L S
WHEREAS,
pursuant to that certain Securities Purchase Agreement, dated as of
January 16, 2004 (the “Existing Securities Purchase
Agreement ”), between Borrower and the Existing
Investors, each Existing Investor has made a loan to Borrower
(each, an “ Existing Loan ”) evidenced by a 5%
Senior Secured Convertible Debenture, dated January 21, 2004 (each,
an “ Existing Debenture ”);
WHEREAS,
pursuant to that certain Subsidiary Guaranty, dated January 21,
2004 (the “ Existing Subsidiary Guaranty ”),
given by the Guarantor in favor of the Existing Investors,
Guarantor has guaranteed the payment and performance of all of the
obligations of Borrower under the Existing Securities Purchase
Agreement and the Existing Debentures (collectively, the “
Existing Borrower Loan Documents ”);
WHEREAS, to
secure the obligations of Guarantor under the Existing Subsidiary
Guaranty, Guarantor has, among other things, executed and delivered
(i) that certain Mortgage, Security Agreement and Assignment of
Leases and Rents, dated January 21, 2004 (the “ Existing
Mortgage ”), in favor of the Existing Investors, covering
certain improved real property located in Broward County, Florida
owned by Guarantor, as more particularly described in Exhibit
A attached hereto (the “ Existing Mortgaged
Property ”) and (ii) that certain Security Agreement,
dated January 21, 2004 (the “ Existing Security
Agreement ” and together with the Existing Mortgage, the
“ Existing Guarantor Security Documents ”), in
favor of the Existing Investors, covering certain goods and
equipment owned by Guarantor, as more particularly described in the
Existing Security Agreement (the “ Existing UCC
Collateral ” and together with the Existing Mortgaged
Property, the “ Existing Collateral
”);
WHEREAS,
pursuant to that certain Securities Purchase Agreement, dated March
11, 2005 (the “ New Securities Purchase Agreement
”), between Borrower and the New Investors, each New Investor
is making a loan to Borrower (each, a “ New Loan
”) evidenced by a 7.5% Senior Secured Convertible Debenture,
dated the date hereof (each, a “ New Debenture
”);
WHEREAS, to
secure the obligations of Borrower under the New Securities
Purchase Agreement and the New Debentures, Borrower has, among
other things, executed and delivered that certain Security
Agreement, dated the date hereof (the “ New Security
Agreement ” and, collectively with the New Securities
Purchase Agreement and the New Debentures, the “ New
Borrower Loan Documents ”), in favor of the New
Investors, which New Security Agreement would cover certain assets
of Borrower upon the occurrence of a Springing Lien Event (as
defined therein), as more particularly described in the New
Security Agreement (the “ New UCC Collateral ”);
and
WHEREAS,
Borrower, Guarantor, Satellite and the Investors desire to enter
into this Agreement to (i) appoint a collateral agent with respect
to the exercise of remedies with respect to the Existing Collateral
and the New Collateral (collectively, the “ Collateral
”) and (ii) otherwise establish their respective rights,
obligations and interests with respect to the Collateral and the
Existing Loans and the New Loans (collectively, the “
Loans ”).
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A G R E E M E N T
NOW, THEREFORE,
in consideration of the foregoing, the mutual covenants contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which Satellite and the Investors hereby
acknowledge, Satellite and each Investor hereby agree as
follows:
1.
Definitions . The following terms, as used in this
Agreement, shall have the following meanings:
“
Agreement ” is defined in the preamble
above.
“
Bankruptcy Case ” means any proceeding commenced by or
against Guarantor and/or Borrower, under any provision of the
Bankruptcy Code or under any other federal or state bankruptcy or
insolvency law, including assignments for the benefit of creditors,
formal or informal moratoria, compositions, extensions generally
with its creditors, or proceedings seeking reorganization,
arrangement, or other similar relief, and all converted or
succeeding cases in respect thereof.
“
Bankruptcy Code ” means the United States Bankruptcy
Code (11 U.S.C. Section 101, et seq .), as
amended, and any successor statute.
“
Borrower ” is defined in the recitals to this
Agreement.
“
Borrower Loan Documents ” means the Existing Borrower
Loan Documents and the New Borrower Loan Documents.
“
Business Day ” means any day other than a Saturday, a
Sunday or a day on which the New York Stock Exchange is closed or
on which commercial banks located in New York City are required or
authorized by law to close.
“
Collateral ” is defined in the recitals to this
Agreement.
“
Collateral Agent ” is defined in Section 2.1 of
this Agreement.
“
Collateral Agent Parties ” is defined in Section
2.7 of this Agreement.
“
Collateral Notice ” is defined in Section
2.4(a) .
“
Collection Costs ” means the costs, fees and expenses
incurred by Collateral Agent in connection with the preparation
for, and the commencement and/or prosecution of, any Secured
Creditor Remedy, including, without limitation, fees of receivers
or trustees, court costs, title company charges, filing and
recording fees, appraisers’ fees and reasonable fees and
expenses of attorneys to the extent not otherwise reimbursed by
Borrower or Guarantor.
“
Debentures ” means the Existing Debentures and the New
Debentures.
“
Effective Date ” is defined in the preamble to this
Agreement.
“
Existing Borrower Loan Documents ” is defined in the
recitals to this Agreement.
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“
Existing Collateral ” is defined in the recitals to
this Agreement.
“
Existing Debenture ” is defined in the recitals to
this Agreement.
“
Existing Guarantor Security Documents ” is defined in
the recitals to this Agreement.
“
Existing Investors ” is defined in the preamble to
this Agreement.
“
Existing Loan ” is defined in the recitals to this
Agreement.
“
Existing Mortgage ” is defined in the recitals to this
Agreement.
“
Existing Mortgaged Property ” is defined in the
recitals to this Agreement.
“
Existing Securities Purchase Agreement ” is defined in
the recitals to this Agreement.
“
Existing Security Agreement ” is defined in the
recitals to this Agreement.
“
Existing Subsidiary Guaranty ” is defined in the
recitals to this Agreement.
“
Existing UCC Collateral ” is defined in the recitals
to this Agreement.
“
Guarantor ” is defined in the recitals to this
Agreement.
“
Investors ” is defined in the preamble to this
Agreement.
“
Leases ” shall have the meaning ascribed to such term
in the Existing Mortgage.
“
Loans ” is defined in the recitals to this
Agreement.
“ New
Borrower Loan Documents ” is defined in the recitals to
this Agreement.
“ New
Debenture ” is defined in the recitals to this
Agreement.
“ New
Investors ” is defined in the preamble to this
Agreement.
“ New
Loan ” is defined in the recitals to this
Agreement.
“ New
Securities Purchase Agreement ” is defined in the
recitals to this Agreement.
“ New
Security Agreement ” is defined in the recitals to this
Agreement.
“ New
UCC Collateral ” is defined in the recitals to this
Agreement.
“
Notice Period ” is defined in Section 2.4(a)
.
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“
Rents ” shall have the meaning ascribed to such term
in the Existing Mortgage.
“
Satellite ” is defined in the preamble to this
Agreement.
“
Secured Creditor Remedies ” means any action in
furtherance of the sale, foreclosure, realization upon,
repossession, liquidation, preservation or maintenance of any
Collateral or the perfection and maintenance of perfection of any
liens upon such Collateral, including without limitation,
(i) the exercise of any remedies or rights of a “Secured
Creditor” under Article 9 of the UCC, such as, without
limitation, the notification of account debtors; (ii) the
foreclosure or exercise of any rights with respect to the Existing
Mortgaged Property, the Leases or the Rents pursuant to the
Existing Mortgage; (iii) the exercise of any remedies
available to a judgment creditor; or (iv) any other remedy
available in respect of the Collateral available to any Investor
under any Existing Guarantor Security Documents or the New Security
Agreement.
“
Security Documents ” means the Existing Mortgage,
Existing Security Agreement and New Security
Agreement.
“
Transaction Documents ” means the Existing Securities
Purchase Agreement, Existing Debentures, Existing Subsidiary
Guaranty, Existing Mortgage, Existing Security Agreement, New
Securities Purchase Agreement, New Debentures, New Security
Agreement, and any other document, instrument or agreement
evidencing or securing the Loans.
“
UCC ” means the Uniform Commercial Code as adopted in
the State of Florida, or in such other jurisdiction as governs the
perfection of the liens and security interests in the Collateral
for the purposes of the provisions hereof relating to such
perfection or the effect of such perfection.
“ UCC
Collateral ” means the Existing UCC Collateral and the
New UCC Collateral.
“
Unsecured Remedies ” means any legal remedy available
to an Investor under any of the Transaction Documents that is not a
Secured Creditor Remedy. For the avoidance of doubt, it is
understood and agreed that as and for an Unsecured Remedy, any
Investor shall have the right to sue the Borrower and/or the
Guarantor with respect to a breach by Borrower and/or Guarantor
under any of the applicable Transaction Documents; provided,
however, (i) such Investor shall not have the right to enforce or
execute any judgment obtained in connection with such lawsuit
against any Collateral and (ii) the obtaining of any such judgment
shall not affect (x) the right of Collateral Agent to enforce any
Secured Creditor Remedy against any Collateral or (y) the priority
of distributions to the Investors under this Agreement with respect
to any proceeds of the exercise of any such Secured Creditor Remedy
(for example, but without limiting the generality of the foregoing,
if an Existing Investor obtains a personal judgment against
Guarantor in respect of its Existing Debenture, such Existing
Investor shall not have the right to enforce such judgment with
respect to the Existing Collateral and, if subsequently Collateral
Agent forecloses upon the Existing Collateral or any portion
thereof, the fact that such Existing Investor obtained a personal
judgment against Guarantor prior to such foreclosure shall not
afford such Existing Investor any priority over any other Existing
Investor with respect to the distribution of the proceeds of such
foreclosure, which distribution shall be made in accordance with
the terms of this Agreement notwithstanding the existence of such
prior judgment).
2.
Collateral Agent .
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2.1.
Appointment . Each of the Existing Investors hereby appoints
Satellite as its collateral agent with respect to the Existing
Mortgage and the Existing Security Agreement, and each of the New
Investors hereby appoints Satellite as its collateral agent with
respect to the New Security Agreement (Satellite, in such capacity,
the “ Collateral Agent ”). Each Investor hereby
irrevocably authorizes Collateral Agent to act as agent for such
Investor solely with respect to exercising any Secured Creditor
Remedies and to take such actions as the Investors are obligated or
entitled to take under the provisions of the Security Documents
with respect to any Secured Creditor Remedies and to exercise such
powers as are set forth herein or therein, together with such other
powers as are reasonably incidental thereto. Collateral Agent
agrees to act as such upon the express conditions contained in this
Agreement in substantially the same manner that it would act in
dealing with a loan or investment held for its own account.
Collateral Agent shall not have a fiduciary relationship with
respect to any Investor by reason of this Agreement or anything
contained in the Security Documents. The provisions of this
Agreement, other than Section 3.19, are solely for the benefit of
Collateral Agent and the Investors, and neither Borrower nor
Guarantor shall have any rights to rely on or enforce any of the
provisions hereof other than Section 3.19. In performing its
functions and duties under this Agreement, Collateral Agent shall
act solely as agent of the Investors and does not assume, and shall
not be deemed to have assumed, any obligations toward or
relationship of agency or trust with or for Borrower and/or
Guarantor.
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2.2.
Powers . Collateral Agent shall have the sole power and
authority to exercise any Secured Creditor Remedy under the
Security Documents, together with such powers as are reasonably
incidental thereto. Collateral Agent shall not be considered, or be
deemed, a separate agent of the Investors hereunder or under any
Transaction Document, but is, and shall be deemed, acting in its
contractual capacity as Collateral Agent, exercising such rights
and powers under the Security Documents as Collateral Agent is
entitled to take hereunder. Collateral Agent shall have no implied
duties to the Investors, or any obligation to the Investors to take
any action. Each Investor agrees that it will not take any action,
nor institute any actions or proceedings, against Borrower or
Guarantor or any other person hereunder or under any other
Transaction Document with respect to exercising any Secured
Creditor Remedy. With respect to any action by Collateral Agent to
exercise any Secured Creditor Remedy, each Investor hereby consents
to the jurisdiction of the court in which such action is
maintained. For the avoidance of doubt, it is understood and agreed
that the power and authority granted to Collateral Agent under this
Agreement does not include the power or authority to consent to or
approve any matter or thing provided for in the Security Documents
to be approved by or consented to by any of the Investors
thereunder (including, without limitation, approval of casualty
insurance with respect to the Existing Mortgaged Property), except
to the extent that such consent or approval relates to the exercise
of any Secured Creditor Remedy.
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2.3.
Priority upon Liquidation; Distribution and Apportionment of
Payments .
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(a)
Each Investor acknowledges and agrees that the rights of the
Debentures and the Existing Debentures shall be pari passu and
shall each rank senior to any other debt or equity securities of
the Borrower. In the event of (x) any insolvency or
bankruptcy proceedings, or any receivership, liquidation,
reorganization or other similar proceedings in connection
therewith, relative to the Borrower or any of its subsidiaries or
to its or their creditors, as such, or to its or their assets or
(y) the dissolution or other winding up of the Borrower or its
subsidiaries, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy proceedings, or (z) any
assignment for the benefit of creditors or any marshalling of the
material assets or material liabilities of the Borrower or any of
its subsidiary (each a “ Liquidation Event”),
each Investor shall be entitled, pari passu with the amounts
payable to the other Investors, to receive payment in full of all
principal of, and all interest and other amounts due or to become
due on, its Debenture before any payment on account of principal,
premium, if any, interest, dividends or any other amounts is made
on any other debt or equity securities of the Borrower, whether on
account of any purchase, exchange or redemption or other
acquisition of such debt or equity securities, at maturity or
otherwise.
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(b)
Each Investor acknowledges and agrees that each Investor shall be
solely responsible for the collection and receipt directly from
Borrower of all payments of interest and principal required to be
paid by Borrower or Guarantor, as applicable, under the applicable
Transaction Documents, other than any such payments of interest,
principal or any other sums payable to Investors thereunder in
connection with the exercise of any Secured Creditor Remedy. Any
payments of any kind or nature in connection with the exercise of a
Secured Creditor Remedy shall be made to Collateral Agent and
distributed to the Investors in accordance with this Section
2.3 . In the event that any Investor (other than Satellite, as
Collateral Agent) receives any funds or property of any kind or
nature from Borrower or Guarantor in connection with the exercise
of any Secured Creditor Remedy, such Investor shall hold same in
trust for the other Investors entitled to share in such funds or
property and shall promptly (and in any event, within not more than
three (3) Business Days after receipt thereof), deliver such funds
or property to Collateral Agent, whereupon Collateral Agent shall
distribute such funds to the Investors in accordance with this
Section 2.3 .
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(c)
Collateral Agent and the Investors hereby acknowledge and agree
that all proceeds from (i) the
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