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Hearing Date and Time: July 31, 2008 at 10:00 a.m. Objection Deadline: July 24, 2008 at 4:00 p.m.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 333 West Wacker Drive, Suite 2100 Chicago, Illinois 60606 (312) 407-0700 John Wm. Butler, Jr. (JB 4711) John K. Lyons (JL 4951) Ron E. Meisler (RM 3026) - and - SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Four Times Square New York, New York 10036 (212) 735-3000 Kayalyn A. Marafioti (KM 9632) Thomas J. Matz (TM 5986) Attorneys for Delphi Corporation, et al., Debtors and Debtors-in-Possession Delphi Legal Information Hotline: Toll Free: (800) 718-5305 International: (248) 813-2698 Delphi Legal Information Website: http://www.delphidocket.com UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x In re DELPHI CORPORATION, et al., Debtors.
: : : : : : :
Chapter 11 Case No. 05-44481 (RDD) (Jointly Administered)
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MOTION UNDER 11 U.S.C. § 363 AND FED. R. BANKR. P. 2002 AND 6004 FOR ORDER AUTHORIZING AND APPROVING ENTRY BY DELPHI AUTOMOTIVE SYSTEMS LLC INTO RESTRUCTURING AND EXCHANGE AGREEMENT WITH ENER1, INC. RELATED TO JOINT
VENTURE ENERDEL, INC.
("JOINT VENTURE MOTION")
2
Delphi Corporation ("Delphi") and certain of its subsidiaries and affiliates,
debtors and debtors-in-possession (collectively, the "Debtors"), hereby submit this motion (the
"Motion") under 11 U.S.C. § 363 and Fed. R. Bankr. P. 2002 and 6004 for an order authorizing
and approving, but not directing, the entry by Delphi Automotive Systems LLC ("DAS LLC")
into that certain Restructuring and Exchange Agreement (the "Restructuring and Exchange
Agreement") with Ener1, Inc. ("Ener1") for the restructuring and exchange of DAS LLC's
ownership interests in EnerDel, Inc. ("EnerDel"), an existing joint venture between DAS LLC
and Ener1. In support of the Motion, the Debtors respectfully represent as follows:
Background
A. The Chapter 11 Filings
1. On October 8 and 14, 2005, the Debtors filed voluntary petitions in this
Court for reorganization relief under chapter 11 of title 11 of the United States Code, 11 U.S.C.
§§ 101-1330, as then amended (the "Bankruptcy Code"). The Debtors continue to operate their
businesses and manage their properties as debtors-in-possession under Bankruptcy Code sections
1107(a) and 1108. This Court has ordered joint administration of these cases.
2. No trustee or examiner has been appointed in these cases. On October 17,
2005, the Office of the United States Trustee (the "U.S. Trustee") appointed an official
committee of unsecured creditors. On April 28, 2006, the U.S. Trustee appointed an official
committee of equity holders (together with the official committee of unsecured creditors, the
"Statutory Committees").
3. On September 6, 2007, the Debtors filed the Joint Plan Of Reorganization
Of Delphi Corporation And Certain Affiliates, Debtors And Debtors-In Possession (Docket No.
9263) and the Disclosure Statement With Respect To Joint Plan Of Reorganization Of Delphi
3
Corporation And Certain Affiliates, Debtors And Debtors-In Possession (Docket No. 9264).
Subsequently, on December 10, 2007, the Debtors filed the First Amended Joint Plan Of
Reorganization Of Delphi Corporation And Certain Affiliates, Debtors And Debtors-In-
Possession (Docket No. 11386) (the "Plan") and the First Amended Disclosure Statement with
respect to the Plan (Docket No. 11388) (the "Disclosure Statement"). The Court entered an order
approving the adequacy of the Disclosure Statement and granting the related solicitation
procedures motion on December 10, 2007 (Docket No. 11389). On January 25, 2008, the Court
entered an order confirming the Plan (as modified) (Docket No. 12359) (the "Confirmation
Order"), which became a final order on February 4, 2008.
4. On April 4, 2008, the Debtors announced that although they had met the
conditions required to substantially consummate the Plan, including obtaining $6.1 billion of exit
financing, Delphi's Plan Investors (as defined in the Plan) refused to participate in a closing that
was commenced but not completed and refused to fund their Investment Agreement (as defined
in the Plan) with Delphi. On May 16, 2008, Delphi filed complaints for damages and specific
performance against the Plan Investors and related parties who refused to honor their equity
financing commitments and refused to participate in the closing that would have led to Delphi's
successful emergence from chapter 11. The Debtors nevertheless continue to work with their
stakeholders to achieve their goal of emerging from chapter 11 as soon as practicable.
5. This Court has jurisdiction over this motion pursuant to 28 U.S.C. §§ 157
and 1334. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. This matter is a core
proceeding under 28 U.S.C. § 157(b)(2).
4
6. The statutory predicates for the relief requested herein are section 363 of
the Bankruptcy Code and rules 2002 and 6004 of the Federal Rules of Bankruptcy Procedure
(the "Bankruptcy Rules").
B. Current Business Operations Of The Debtors
7. Delphi and its subsidiaries and affiliates (collectively, the "Company") as
of December 31, 2007 had global net sales of $22.3 billion and global assets of approximately
$13.7 billion.1 At the time of its chapter 11 filing, Delphi ranked as the fifth largest public
company business reorganization in terms of revenues and the thirteenth largest public company
business reorganization in terms of assets. Delphi's non-U.S. subsidiaries are not chapter 11
debtors and have continued their business operations without supervision from the Court.2
8. The Company is a leading global technology innovator with significant
engineering resources and technical competencies in a variety of disciplines, and is one of the
largest global suppliers of vehicle electronics, transportation components, integrated systems and
modules, and other electronic technology. The Company supplies products to nearly every
major global automotive original equipment manufacturer ("OEM").
9. Delphi was incorporated in Delaware in 1998 as a wholly owned
subsidiary of General Motors Corporation ("GM"). Prior to January 1, 1999, GM conducted the
Company's business through various divisions and subsidiaries. Effective January 1, 1999, the
1 The aggregated financial data used herein generally consists of consolidated information from Delphi and
its worldwide subsidiaries and affiliates as disclosed in the Company's Form 10-K filed on February 19, 2008.
2 On March 20, 2007, Delphi Automotive Systems Espana S.L. ("DASE"), whose sole operation is a non-core automotive component plant in Cadiz, Spain, filed a "Concurso" application for a Spanish insolvency proceeding, which was approved by the Spanish court on April 13, 2007. On July 4, 2007, DASE, its Concurso receivers, and the Cadiz workers councils and unions reached a settlement on a social plan, the funding of which was approved by this Court on July 19, 2007. The Spanish court approved the social plan on July 31, 2007. The Concurso proceeding is consistent with Delphi's transformation plan to optimize its manufacturing footprint and to lower its overall cost structure.
5
assets and liabilities of these divisions and subsidiaries were transferred to the Company in
accordance with the terms of a Master Separation Agreement between Delphi and GM. In
connection with these transactions, Delphi accelerated its evolution from a North American-
based, captive automotive supplier to a global supplier of components, integrated systems, and
modules for a wide range of customers and applications. Although GM is still the Company's
single largest customer, today more than half of Delphi's revenue is generated from non-GM
sources.
C. Events Leading To The Chapter 11 Filing
10. In the first two years following Delphi's separation from GM, the
Company generated approximately $2 billion in net income. Every year thereafter, however,
with the exception of 2002, the Company has suffered losses. In calendar year 2004, the
Company reported a net loss of approximately $4.8 billion on $28.6 billion in net sales.3
Reflective of a continued downturn in the marketplace, in 2005 Delphi incurred net losses of
approximately $2.4 billion on net sales of $26.9 billion. Moreover, in 2006 the Debtors incurred
a net loss of $5.5 billion, $3.0 billion of which comprised charges related to the U.S. employee
special attrition programs, and in 2007, the Debtors incurred a net loss of $3.1 billion.
11. The Debtors believe that the Company's financial performance
deteriorated because of (i) increasingly unsustainable U.S. legacy liabilities and operational
restrictions preventing the Debtors from exiting non-profitable, non-core operations, all of which
had the effect of creating largely fixed labor costs, (ii) a competitive U.S. vehicle production
environment for domestic OEMs resulting in the reduced number of motor vehicles that GM
3 Reported net losses in calendar year 2004 reflect a $4.1 billion tax charge, primarily related to the recording
of a valuation allowance on U.S. deferred tax assets as of December 31, 2004. The Company's net operating loss in calendar year 2004 was $482 million.
6
produces annually in the United States and related pricing pressures, and (iii) increasing
commodity prices.
12. In light of these factors, the Company determined that it would be
imprudent and irresponsible to defer addressing and resolving its U.S. legacy liabilities, product
portfolio, operational issues, and forward-looking revenue requirements. Because discussions
with its major stakeholders had not progressed sufficiently by the end of the third quarter of 2005,
the Company commenced these chapter 11 cases for its U.S. businesses to complete its
transformation plan and preserve value for its stakeholders.
D. The Debtors' Transformation Plan
13. On March 31, 2006, the Company outlined the key tenets of a
transformation plan that it believed would enable it to return to stable, profitable business
operations. The Debtors stated that they needed to focus on five key areas: first, modifying the
Company's labor agreements to create a competitive arena in which to conduct business; second,
concluding their negotiations with GM to finalize GM's financial support for the Debtors' legacy
and labor costs and to ascertain GM's business commitment to the Company; third, streamlining
their product portfolio to capitalize on their world-class technology and market strengths and
make the necessary manufacturing alignment with their new focus; fourth, transforming their
salaried workforce to ensure that the Company's organizational and cost structure is competitive
and aligned with its product portfolio and manufacturing footprint; and fifth, devising a workable
solution to their current pension situation.
E. Plan Confirmation And Postconfirmation Matters
14. The confirmed Plan is based upon a series of global settlements and
compromises that involve nearly every major constituency in the Debtors' reorganization cases.
The Global Settlement Agreement and the Master Restructuring Agreement provide for a
7
comprehensive settlement with GM, and both agreements were approved by this Court in the
Confirmation Order. After the Plan was confirmed, the Debtors focused their efforts on
satisfying the conditions for the Plan to become effective. The Debtors satisfied those conditions
and on April 4, 2008 began a formal closing process attended by representatives of GM, the exit
lenders, and the Statutory Committees. The Plan Investors, however, refused to participate in the
closing or fund their obligations under the Investment Agreement. Instead, the Plan Investors
delivered written notices purporting to terminate the Investment Agreement based on both
alleged breaches by the Debtors and the failure of the Plan's effective date to occur by April 4,
2008. On May 16, 2008, Delphi filed complaints for damages and specific performance against
the Plan Investors and related parties who refused to honor their equity financing commitments
and refused to participate in the closing that would have led to Delphi's successful emergence
from chapter 11. The Debtors nevertheless are working with their stakeholders to evaluate their
options to move forward with emerging from chapter 11 as soon as reasonably practicable.
15. Upon the conclusion of the reorganization process, the Debtors expect to
emerge as a stronger, more financially sound business with viable U.S. operations that are well-
positioned to advance global enterprise objectives. In the meantime, Delphi will marshal all of
its resources to continue to deliver high-quality products to its customers globally. Additionally,
the Company will preserve and continue the strategic growth of its non-U.S. operations and
maintain its prominence as the world's premier auto supplier.
F. Background To Restructuring And Exchange Agreement
16. In 2004, DAS LLC and Ener1 entered into an agreement4 (the "Formation
Agreement") pursuant to which the parties formed a joint venture, EnerDel, to design and
4 The Formation, Subscription, And Stockholders' Agreement Of EnerDel, Inc., dated as of October 20, 2004
and amended as of December 23, 2004.
8
manufacture lithium-ion battery technologies and products. The goal of the joint venture was to
create an alternative energy source and sell and distribute its products globally. EnerDel
primarily focuses its lithium-ion batteries business in the automotive, power tool, military,
consumer appliance, and personal mobility markets. Ener1 contributed capital and intellectual
property to the joint venture and in exchange was granted 80.5% of EnerDel's common stock.
DAS LLC contributed proportionally a smaller amount of capital and intellectual property to the
joint venture and in exchange was granted 19.5% of EnerDel's common stock (the "Common
Stock"). In addition to the Common Stock, DAS LLC was also granted one of six seats on the
EnerDel board of directors,5 8,000 shares of EnerDel preferred stock (the "Preferred Stock"), and
warrants to acquire 750,000 shares of Ener1 common stock with a strike price of $7.00 per share
and an expiration date in October 20, 2011 (the "Original Warrants").
17. The low-cost, high-performance lithium-ion batteries that EnerDel has
been developing are designed for plug-in hybrid and extended-range electric vehicles. This
niche is becoming increasingly competitive. Nevertheless, EnerDel believes that it has a feasible
business plan for the development of the lithium-ion batteries, and the global market for such
alternate fuel sources is in the billions of dollars.
Relief Requested
18. By this Motion, the Debtors seek entry of an order under section 363 of
the Bankruptcy Code and Bankruptcy Rules 2002 and 6004 (a) authorizing and approving, but
not directing, DAS LLC's entry into and performance under the Restructuring and Exchange
5 The Bylaws of EnerDel generally require an affirmative vote of a majority of the total number of directors
to approve matters. Because DAS LLC holds only one of six board seats, its relative voting power on the board is generally not sufficient to alter the decisions made by EnerDel's board.
9
Agreement, a copy of which is attached hereto as Exhibit A,6 (b) finding that the transactions
contemplated by the Restructuring and Exchange Agreement and the related agreements,
documents, and instruments contemplated by the Restructuring and Exchange Agreement were
negotiated and documented in good faith and from arm's length bargaining positions, (c) finding
that the transactions contemplated by the Restructuring and Exchange Agreement and the related
agreements, documents, and instruments contemplated by the Restructuring and Exchange
Agreement satisfy the requirements of section 363 of the Bankruptcy Code, (d) finding that DAS
LLC's execution of and performance under the Restructuring and Exchange Agreement is in the
best interests of DAS LLC, its estate, its creditors, and its stakeholders, (e) finding that the terms
and conditions of the Restructuring and Exchange Agreement are fair and reasonable and
approving the terms and conditions of such agreement, thereby making such terms and
conditions valid, binding, and enforceable, (f) finding that the consideration DAS LLC receives
pursuant to this transaction is fair and at least reasonably equivalent value for its Common Stock
and Preferred Stock in EnerDel, and (g) authorizing DAS LLC to transfer, upon consummation
of the Restructuring and Exchange Agreement, its Common Stock and Preferred Stock to Ener1
free and clear of any and all Liens (as defined in the Restructuring and Exchange Agreement)7
as permitted under section 363 of the Bankruptcy Code (based upon, inter alia, compliance with
section 363(f) of the Bankruptcy Code).
6 Copies of the exhibits to the Restructuring and Exchange Agreement are available upon request to parties-
in-interest who execute a confidentiality agreement acceptable to the Debtors and who show that they would be affected by the relief requested in this Motion.
7 The term "Liens" is defined in section 1.10 of the Restructuring and Exchange Agreement as "claims (as defined in the Bankruptcy Code), pledges, options, charges, hypothecations, easement, security interest, right-of-way, encroachment, mortgage, deed of trust, imperfection of title, prior assignment or other encumbrance of any kind or nature whatsoever."
10
Basis For Relief
19. DAS LLC has determined in its business judgment that it is in its best
interests to restructure its ownership interest in EnerDel to a more liquid asset. Specifically, the
Restructuring and Exchange Agreement provides that DAS LLC would transfer its 19.5%
Common Stock interest in EnerDel (valued at approximately $18.0 million) and its EnerDel
Preferred Stock (valued at approximately $9.6 million) to its joint venture partner, Ener1, in
exchange for Ener1 common stock, warrants in Ener1 with a lower strike price, and cash, all of
which DAS LLC values at approximately $27.6 million.8 Ener1 shares were recently approved
for listing on the American Stock Exchange ("AMEX"), and as of July 10, 2008 had a closing
price of $6.53. Ener1 also owns two other subsidiaries that engage in the development and
marketing of other alternative energy sources, such as fuel cells and nanotechnology-related
manufacturing processes and materials for batteries. DAS LLC believes that the proposed
transaction to exchange its interest in EnerDel (which is not traded on an open market and is not
similarly diversified) for assets that can be sold more readily is in the best interests of its estate.9
8 On June 30, 2008, DAS LLC reviewed a fairness opinion provided by an independent investment bank
engaged by EnerDel which supports, among other things, the conclusion that the consideration DAS LLC would receive from Ener1 in exchange for its ownership in EnerDel is fair and reasonable from a financial point of view.
9 DAS LLC believes that consummating the Restructuring and Exchange Agreement is in the best interests of its estates, its creditors, and its other stakeholders. However, to the extent that before the hearing on this Motion a third party bidder submits a more valuable offer (in DAS LLC's reasonable discretion) for DAS LLC's ownership interest in EnerDel, DAS LLC would consider such an offer in the exercise of its fiduciary duty and reserves the right to take appropriate actions under the circumstances to maximize value for its estate, its creditors, and its other stakeholders.
11
G. Material Terms Of The Restructuring Agreement10
20. Pursuant to the Restructuring and Exchange Agreement, DAS LLC would
exchange its Common Stock, its Preferred Stock, and its seat on the Board of Directors of
EnerDel (the "Exchange Consideration") for the following:
(a) 2.86 million shares of the common stock in Ener1 valued at approximately $19.5 million;
(b) $8 million cash; and
(c) revised warrants to acquire Ener1 common stock at an exercise price of $5.25 per share.11
21. In addition, the Restructuring and Exchange Agreement provides that the
Formation Agreement will terminate as part of this transaction. Nonetheless, the non-compete
provision and intellectual property licenses contributed under the Formation Agreement will
remain in effect as agreed to by the parties pursuant to the Formation Agreement.
22. Covenant Not To Compete. The non-compete provision in the Formation
Agreement, which will remain in effect with respect to EnerDel's current scope of business
operations until October 20, 2010, provides DAS LLC and Ener1 limited options to engage in
operations that compete with EnerDel. For instance, DAS LLC may acquire a company if the
revenues that the company earns from business operations that compete with EnerDel do not
exceed 15% of the company's total revenues, or DAS LLC may purchase up to 5% of publicly
traded stock of an entity that engages in a business that competes with EnerDel. In addition,
10 In the event of any discrepancy between the Restructuring and Exchange Agreement and this summary, the
provisions of the Restructuring and Exchange Agreement control.
11 In valuing the warrants under the Black-Scholes method, lowering the strike price of the warrants from $7.00 to $5.25 increases the aggregate differential value of the revised warrants to DAS LLC by approximately $100,000. Although the original warrants have a strike price higher than Ener1's current stock price, the original warrants still have value, in part, because of the underlying stock's volatility and the duration of the warrants.
12
DAS LLC may continue designing and assembling lithium-based batteries if DAS LLC includes
EnerDel in the bidding process to supply the products. Because DAS LLC will continue to
benefit from any expansion in EnerDel's business through its holding of common stock and
warrants in its parent Ener1, DAS LLC believes that continuation of the existing non-compete
provision is acceptable under the circumstances.
23. Licenses And Intellectual Property. As set forth above, DAS LLC
contributed certain intellectual property in EnerDel upon the formation of the joint venture.
Pursuant to the Formation Agreement, EnerDel licensed the contributed intellectual property
back to DAS LLC as a paid-up, royalty-free, perpetual and irrevocable worldwide exclusive
license. The Restructuring and Exchange Agreement provides that EnerDel would continue to
license intellectual property to DAS LLC for the use, manufacture, and sale of products other
than lithium batteries. In addition, the Restructuring and Exchange Agreement provides that
DAS LLC will not make any claim for EnerDel's confidential company information or
intellectual property related to the patents that DAS LLC did not contribute under the Formation
Agreement.
24. Termination. The Restructuring and Exchange Agreement could be
terminated prior to closing under the following circumstances: (i) mutual agreement by the
parties, (ii) by either party, provided that the terminating party is not in material breach of its
obligations under the Restructuring and Exchange Agreement, if the closing does not occur on or
before five Business Days following the date an order approving the Motion is no longer subject
to a stay or injunction, (iii) by either party, if the other party materially breached its
representations and warranties and such breach is not cured within 10 business days of written
13
notice of such breaches, and (iv) by either party, if this Court has not entered an order approving
the Motion on or before September 12, 2008.
25. DAS LLC has sound business justifications for restructuring DAS LLC's
ownership interest in EnerDel as contemplated by the Restructuring and Exchange Agreement.
Among other things, consummation of the Restructuring and Exchange Agreement makes DAS
LLC's investment more liquid. First, because Ener1's common stock is listed on AMEX, the
Ener1 shares can be sold or transferred more readily than DAS LLC's existing equity interests in
EnerDel. DAS LLC would have the option to retain or sell its interest in Ener1 upon completion
of the terms of the Restructuring and Exchange Agreement, subject to compliance with
applicable securities laws.12 Second, DAS LLC would benefit by receiving the consideration of
$8 million in cash. Third, DAS LLC would have warrants to acquire Ener1 common stock at an
exercise price of $5.25 per share rather than $7.00, which strike price is at a discount to the
current trading price of the stock.
26. As set forth above, the aggregate value of the consideration that DAS LLC
would receive through the Restructuring and Exchange Agreement is fair and reasonable and is a
better investment for DAS LLC. Because DAS LLC currently has a minority position on
EnerDel's board of directors with limited voting rights, DAS LLC believes that exchanging that
board seat as partial consideration for cash and an ownership stake in Ener1 is justified.
Moreover, through its ownership of Ener1 common stock, DAS LLC would retain an indirect
interest in EnerDel, which will provide DAS LLC the opportunity to profit should the EnerDel
venture succeed. Moreover, Ener1's other holdings should diversify the risk of owning equity in
12 The common stock in Ener1 that DAS LLC would receive would be subject to Rule 144A of the Securities
Act of 1933 (17 C.F.R. § 230.114A), thereby restricting public sales of the common stock for six months after the transaction closes.
14
EnerDel alone. Accordingly, in its business judgment, DAS LLC has determined that it is in the
best interest of its estate, its creditors, and its other stakeholders to enter into and perform under
the Restructuring and Exchange Agreement.
Applicable Authority
H. Approval Of The Restructuring Agreement
27. Bankruptcy Code section 363(b)(1) permits a debtor-in-possession to use
property of the estate "other than in the ordinary course of business" after notice and a hearing.
11 U.S.C. § 363(b)(1). Uses of estate property outside the ordinary course of business may be
authorized if the debtor demonstrates a sound business justification for it. See Comm. Of Equity
Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1071 (2d Cir. 1983) (business
judgment rule requires finding that good business reason exists to grant debtor's application
under section 363(b)); see also In re Delaware & Hudson Ry. Co., 124 B.R. 169, 178-79 (D. Del.
1991).
28. The Second Circuit has held that, although the bankruptcy court sits as an
"overseer of the wisdom with which the bankruptcy estate's property is being managed by the . . .
debtor-in-possession," it must nevertheless resist becoming "arbiter of disputes between creditors
and the estate." Orion Pictures Corp. v. Showtime Network, Inc. (In re Orion Pictures Corp.), 4
F.3d 1095, 1098-99 (2d Cir. 1993). The Court's consideration of a debtor's section 363(b)
motion is a summary proceeding, intended merely as a means to "efficiently review the . . .
debtor's decision[s] . . . in the course of the swift administration of the bankruptcy estate. It is
not the time or place for prolonged discovery or a lengthy trial with disputed issues." Id. at 1098-
99.
29. Once a debtor articulates a valid business justification, a presumption
arises that "in making a business decision the directors of a corporation acted on an informed
15
basis, in good faith and in the honest belief that the action was in the best interests of the
company." Official Comm. of Subordinated Bondholders v. Integrated Resources, Inc. (In re
Integrated Resources, Inc.), 147 B.R. 650, 656 (S.D.N.Y. 1992). Thereafter,"[p]arties opposing
the proposed exercise of a debtor's business judgment have the burden of rebutting the
presumption of validity." Id. To satisfy its burden, it is not enough for an objector simply to
raise and argue an objection. Rather, an objector "is required to produce some evidence
respecting its objections." Lionel, 722 F.2d at 1071. As a rule, the debtor's business judgment
"should be approved by the court unless it is shown to be 'so manifestly unreasonable that it
could not be based upon sound business judgment, but only on bad faith, or whim or caprice.'" In
re Aerovox, Inc., 269 B.R. 74, 81 (Bankr. D. Del. 2001) (quoting In re Interco, Inc., 128 B.R.
229, 234 (Bankr. E.D. Mo. 1991)).
30. DAS LLC submits that the decision to enter into the Restructuring and
Exchange Agreement and to complete this proposed transaction represents a proper exercise of
DAS LLC's business judgment. DAS LLC also submits that the terms and conditions of the
Restructuring Agreement are fair and reasonable and that the company negotiated the terms with
Ener1 in good faith and at arm's length. Indeed, DAS LLC believes that the Exchange
Consideration constitutes fair and at least reasonably equivalent value for its Common Stock and
Preferred Stock. Moreover, the structure of the transaction will increase the liquidity of DAS
LLC's investment. Because of the contemplated benefits, this Court should approve the relief
requested herein.
I. Transfer Of Common Stock And Preferred Stock Free And Clear Of Liens
31. Under section 363(f) of the Bankruptcy Code, a debtor-in-possession may
transfer property free and clear of any lien, claim, or interest in such property if, among other
things, at least one of the five factors under section 363(f)(5) is satisfied. See, 11 U.S.C. § 363(f).
16
Section 363(f) enables DAS LLC to transfer the Common Stock and Preferred Stock free and
clear of Liens. DAS LLC believes that it satisfies at least one of the five conditions of 11 U.S.C.
§ 363(f) for each Lien in the Shares, if any, and DAS LLC submits that any such Lien in the
Shares will be adequately protected by attachment to the Exchange Consideration, subject to any
claims and defenses DAS LLC may possess with respect thereto. Accordingly, DAS LLC
requests that the Common Stock and Preferred Stock be transferred to Ener1 free and clear of all
Liens.
Notice
32. Notice of this Motion has been provided in accordance with the
Supplemental Order Under 11 U.S.C. §§ 102(1) And 105 And Fed. R. Bankr. P. 2002(m), 9006,
9007, And 9014 Establishing Omnibus Hearing Dates And Certain Notice, Case Management,
And Administrative Procedures, entered March 20, 2006 (Docket No. 2883), and the Tenth
Supplemental Order Under 11 U.S.C. §§ 102(1) And 105 And Fed. R. Bankr. P. 2002(m), 9006,
9007, And 9014 Establishing Omnibus Hearing Dates And Certain Notice, Case Management,
And Administrative Procedures, entered February 4, 2008 (Docket No. 12487). In light of the
nature of the relief requested, the Debtors submit, and seek a finding from this Court, that no
other or further notice is necessary.
Memorandum Of Law
33. Because the legal points and authorities upon which this Motion relies are
incorporated herein, the Debtors respectfully request that the requirement of the service and
filing of a separate memorandum of law under Local Rule 9013-1(b) of the Local Bankruptcy
Rules for the United States Bankruptcy Court for the Southern District of New York be deemed
satisfied.
17
WHEREFORE, the Debtors respectfully request that this Court enter an order (a)
authorizing and approving, but not directing, DAS LLC's entry into the Restructuring and
Exchange Agreement, (b) finding that the transactions contemplated by the Restructuring and
Exchange Agreement and the related agreements, documents, and instruments contemplated by
the Restructuring and Exchange Agreement were negotiated and documented in good faith and
from arm's length bargaining positions, (c) finding that the transactions contemplated by the
Restructuring and Exchange Agreement and the related agreements, documents, and instruments
contemplated by the Restructuring and Exchange Agreement satisfy the requirements of section
363 of the Bankruptcy Code, (d) finding that DAS LLC's execution of and performance under
the Restructuring and Exchange Agreement is in the best interests of DAS LLC, its estate, its
creditors, and its stakeholders, (e) finding that the terms and conditions of the Restructuring and
Exchange Agreement are fair and reasonable and approving the terms and conditions of such
agreement, thereby making such terms and conditions valid, binding, and enforceable, (f) finding
that the consideration DAS LLC receives pursuant to this transaction is fair and at least
reasonably equivalent value for its Common Stock and Preferred Stock in EnerDel, and (g)
authorizing DAS LLC to transfer, upon consummation of the Restructuring and Exchange
Agreement, its Common Stock and Preferred Stock to Ener1 free and clear of any and all Liens
(as defined in the Restructuring and Exchange Agreement) as permitted under section 363 of the
Bankruptcy Code (based upon, inter alia, compliance with section 363(f) of the Bankruptcy
Code), and (h) granting the Debtors such other and further relief as is just.
18
Dated: New York, New York July 11, 2008
SKADDEN, ARPS, SLATE, MEAGHER
& FLOM LLP By: /s/ John Wm. Butler, Jr. John Wm. Butler, Jr. (JB 4711) John K. Lyons (JL 4951) Ron E. Meisler (RM 3026) 333 West Wacker Drive, Suite 2100 Chicago, Illinois 60606 (312) 407-0700 - and - By: /s/ Kayalyn A. Marafioti Kayalyn A. Marafioti (KM 9632) Thomas J. Matz (TM 5986) Four Times Square New York, New York 10036 (212) 735-3000 Attorneys for Delphi Corporation, et al., Debtors and Debtors-in-Possession
Exhibit A Restructuring And Exchange Agreement
Final Execution Copy
RESTRUCTURING AND EXCHANGE AGREEMENT This Restructuring and Exchange Agreement (the “Agreement”), is entered into as of July __, 2008 by and between Delphi Automotive Systems LLC (“Delphi”), a Delaware limited liability company, with its principal place of business at 5725 Delphi Drive, Troy, Michigan 48098 and Ener1, Inc. (“Ener1”), a Florida corporation, with its principal place of business at 500 West Cypress Creek Road, Suite 100, Fort Lauderdale, Florida 33309.
WITNESSETH WHEREAS, Delphi and Ener1 each owns equity in EnerDel, Inc (the “Company”), a Delaware corporation, with its principal place of business at 8640 Hague Road, Indianapolis, IN 46256; WHEREAS, Delphi owns 19,500,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”); WHEREAS, Delphi owns eight thousand (8,000) shares of Series A preferred stock of the Company, par value $0.01 per share, having a liquidation value of $1,000 per share (the “Preferred Stock”); WHEREAS, Delphi owns warrants entitling the holder thereof to purchase up to 750,000 fully paid and non-assessable shares of Ener1 common stock, par value $0.01 per share (the “Ener1 Common Stock”) at an initial exercise price per share of $7.00, subject to adjustment in accordance with the terms of the warrants (the “Original Warrants”); WHEREAS, Ener1 currently owns 80,500,000 shares of Common Stock;
WHEREAS, Delphi commenced a case under chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sections 101 et seq. (the “Bankruptcy Code”) on October 8, 2005 in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) as Case No. 05-44481 (RDD) (the “Case”);
WHEREAS, pursuant to, inter alia, Sections 363 of the Bankruptcy Code and the applicable Federal Rules of Bankruptcy Procedure, Delphi wishes to exchange all of the shares of Common Stock and Preferred Stock owned by Delphi (the “Shares”) to Ener1, for cash, Ener1 Common Stock, and strike price adjustments to the Original Warrants, and Ener1 wishes to consummate the foregoing exchange, on the terms and subject to the conditions set forth in this Agreement; WHEREAS, the effectiveness of this Agreement and the exchange of the Shares hereunder are subject to the approval of the Bankruptcy Court; and
WHEREAS, Delphi and Ener1 are parties to a Formation, Subscription and Stockholders’ Agreement, dated as of October 20, 2004 and amended as of December 23, 2004 (the “Formation Agreement”), and, in connection with the exchange of the Shares hereunder, the parties wish to terminate certain obligations and liabilities of the parties under the Formation Agreement;
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NOW THEREFORE, in consideration of the promises and of the mutual covenants and agreements contained herein, the parties agree as follows: 1. Definitions. As used herein, the following terms have the meanings indicated:
1.1. “Affiliate” of a Person shall mean any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.
1.2. “Approval Order” means an order of the Bankruptcy Court that is in form
and substance reasonably satisfactory to Ener1 approving this Agreement and all of the terms and conditions hereof, and approving and authorizing Delphi to consummate the transactions contemplated hereby, including the transfer of all of the Shares to Ener1. The Approval Order shall approve this Agreement without any material modification or change, and the Approval Order shall also find and provide, among other things, that (i) the transactions contemplated hereby and by all other agreements, documents and instruments contemplated in connection with this Agreement are in good faith and otherwise satisfy the provisions of Section 363 of the Bankruptcy Code, (ii) Delphi has complied with the notice requirements of Rules 2002 and 6004 of the Federal Rules of Bankruptcy Procedure and any applicable rules of the Bankruptcy Court with respect to the transactions contemplated by this Agreement and by all other agreements, documents and instruments contemplated in connection with this Agreement, (iii) the terms and conditions of this Agreement are fair and reasonable, valid, binding and enforceable, (iv) the Exchange Consideration represents fair value for the Shares, (v) Delphi’s execution of and performance under this Agreement is in the best interests of Delphi’s estate and its creditors, (vi) Delphi is authorized to enter into and perform under this Agreement, and (vii) at the Closing, except as expressly set forth in this Agreement, the Shares shall be transferred to Ener1 free and clear of any and all Liens to the extent permitted under Section 363 of the Bankruptcy Code.
1.3. “Business Day” means any day other than a Saturday, Sunday or a legal
holiday on which banking institutions in the State of New York are not required to open.
1.4. “Certificate of Termination” means the certificate in the form of Exhibit B
hereto, having the effect of terminating certain provisions of the Formation Agreement.
1.5. “Confidential Information” means any of the Company’s technical or
business information, regardless of whether such information is in written, oral, graphic, physical, electronic or other form, which may include, without limitation, patents, patent applications, inventions, inventor’s rights, copyrights, utility models, industrial or other designs, trade secrets, mask works, scientific knowledge, know-how, show-how, processes, procedures, formulae, products, drawings, materials, apparatus, methods, customer or supplier specifications or requirements, computer software and other data,
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technical documentation or specifications, plans, records, test results, permissions, licenses and approvals, telephone numbers, e-mail addresses and names, techniques, business operations, financial information, customer and/or supplier information, distribution information, and other records and information.
1.6. “Consent” means any consent, waiver, authorization, order or approval, filing,
registration or notification.
1.7. “Exchange Consideration” has the meaning specified in Section 2.3 below.
1.8. “Governmental Entity” shall mean any (i) federal, state, local, municipal, foreign or other government; (ii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); or (iii) body exercising, or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitral tribunal.
1.9. “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and any successor statute and the rules and regulations thereunder or under any successor statute.
1.10. “Lien” means any claim (as defined in the Bankruptcy Code), pledge, option,
charge, hypothecation, easement, security interest, right-of-way, encroachment, mortgage, deed of trust, imperfection of title, prior assignment or other encumbrance of any kind or nature whatsoever.
1.11. “Material Adverse Effect” means, with respect to a party, an effect on (i) the
consolidated business, properties, assets, operations, results of operations or financial condition of such party, or (ii) the ability of such party to perform its obligations under this Agreement that, in any such case, is material and adverse.
1.12. “Person” shall mean an individual, a partnership, a joint venture, an
association, a corporation, a business trust, a limited liability company, a trust, an unincorporated organization, a joint stock company, a labor union, an estate, a Governmental Entity or any other entity.
2. EXCHANGE OF SHARES.
2.1. Exchange. Upon and subject to the terms and conditions of this Agreement and entry of the Approval Order, at the closing (the “Closing”), Delphi shall transfer and deliver to Ener1, and Ener1 shall acquire and accept, the Shares, free and clear of any Liens to the extent permitted under Section 363 of the Bankruptcy Code.
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2.2. Closing; Closing Date. The Closing shall occur on the first Business Day following the day on which all conditions set forth in Section 6 of this Agreement have been satisfied or waived, or on such other date as the parties hereto shall mutually agree, such date to be as soon as practicable following entry of the Approval Order and in no event later than the date specified in Section 7.1(b) hereof (the “Effective Date”).
2.3. Exchange Consideration. In consideration for the delivery of the Shares by
Delphi at the Closing, Ener1 shall deliver to Delphi, as consideration for the Shares (the “Exchange Consideration”), the following:
(a) 2,857,143 shares of Ener1 Common Stock (the “Ener1 Stock
Consideration”), registered in the name of Delphi or its designated Affiliate, containing no legends or restrictions on transfer other than a legend specifying compliance with applicable federal securities laws; and which legend, if any, shall be removed at the request of Delphi following the date on which such shares can be sold to the public without limitation pursuant to Rule 144 under the Securities Act of 1933, as amended, or the rules promulgated thereunder (the “Securities Act”);
(b) $8,000,000 cash (the “Cash Consideration”) in immediately
available funds to be delivered by wire transfer to an account or accounts specified by Delphi in writing delivered to Ener1 no later than the Business Day immediately preceding the Closing Date; and
(c) revised warrants in exchange for the Original Warrants (the
“Revised Warrants”) delivered as set forth in Section 2.4 hereof; the Revised Warrants shall be in the form of Exhibit A hereto, shall have an exercise price of per share price of $5.25 and shall be exercisable into 750,000 shares of Ener1 Common Stock, subject to adjustment in accordance with the terms of the Revised Warrants.
2.4. Delivery of Shares by Delphi. At the Closing, simultaneous with and
conditioned upon the deliveries to be made by Ener1 pursuant to Section 2.3 hereof, Delphi shall deliver certificates representing the Shares, duly endorsed for transfer to Ener1.
2.5. Currency. All dollar amounts referred to in this Agreement are in the lawful
money of the United States of America. 3. REPRESENTATIONS AND WARRANTIES OF DELPHI. Delphi makes the
following representations and warranties to Ener1 regarding, among other things, its authority to enter into this Agreement and its ownership of the Shares. Except as specifically set forth in this Section 3, Delphi makes no other representations or warranties, express or implied, with respect to the Shares or the Company.
3.1. Existence, Standing and Qualification. Delphi is a limited liability company
validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own the Shares.
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3.2. Authority, Power and Binding Effect. Subject to the entry of the Approval
Order, the execution and delivery of, and the performance of all obligations under, this Agreement and all other agreements, documents and instruments contemplated in connection with this Agreement to be executed and delivered by Delphi and the consummation by Delphi of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Delphi. Subject to the entry of the Approval Order, Delphi has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and all other agreements, documents and instruments contemplated in connection with this Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby. Delphi has duly executed and delivered this Agreement and, on or prior to the Closing Date, Delphi will duly execute and deliver all other agreements, documents and instruments required to be executed and delivered by Delphi pursuant to this Agreement. Upon the entry of the Approval Order, this Agreement will be, and the other agreements, documents and instruments executed by or on behalf of Delphi in connection herewith when executed and delivered will be, the legal, valid and binding obligations of Delphi, enforceable in accordance with their respective terms.
3.3. Conflicts and Consents. Assuming (i) the entry of the Approval Order, (ii) the
execution and delivery of the Certificate of Termination, and (iii) compliance with the requirements of the HSR Act (if any), none of the execution and delivery of, or the performance of the obligations under, this Agreement and all other agreements, documents and instruments contemplated in connection with this Agreement to be executed and delivered by Delphi and the consummation by Delphi of the transactions contemplated hereby and thereby, will (a) materially conflict with or result in a material breach of the certificate of formation, operating agreement or other organizational document of Delphi, (b) conflict with or result in a breach or default, or give rise to any right of acceleration, payment, amendment, cancellation or termination, under any agreement or other instrument to which Delphi is a party or by which Delphi or any of its respective properties or assets is bound, or (c) violate any law applicable to Delphi or any of its respective properties or assets, except, with respect to clauses (b) and (c), such conflicts, breaches, defaults or violations that would not reasonably be expected to have a Material Adverse Effect. Other than the entry of the Approval Order, no consent from any Person, including any required approvals under its debtor-in-possession financing agreements, the absence of which would reasonably be expected to have a Material Adverse Effect, is required in connection with this Agreement and all other agreements, documents and instruments contemplated in connection with this Agreement and the consummation by Delphi of the transactions contemplated hereby and thereby.
3.4. Ownership of Shares. The Shares are owned by Delphi and, subject to entry of
the Approval Order, the satisfaction (or waiver by the appropriate party) of the conditions to Closing specified herein, and Delphi's receipt of the Exchange Consideration, upon delivery of the Shares at the Closing, Delphi shall transfer
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to Ener1 good and marketable title to the Shares free and clear of all Liens to the extent permitted under section 363 of the Bankruptcy Code. At the Closing, the parties shall take all action necessary in order to render inapplicable any restrictions on transfer, rights of first refusal and preemptive rights contained in the Company’s Certificate of Incorporation or in the Formation Agreement.
3.5. Brokers. Delphi has not employed any investment bank, broker or finder or
incurred any liability for any other investment banking, brokerage, finders’ or similar fees or commissions in connection with the transactions contemplated by this Agreement.
3.6. Disclosure. None of the information contained in the representations and warranties of Delphi set forth in this Agreement, including any Exhibits and Schedules referenced herein, or in the lists and other information furnished to Ener1 in connection with the transactions contemplated hereby, or in the certificates delivered or to be delivered in connection herewith, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF ENER1. Ener1 hereby makes
the following representations and warranties to Delphi. Except as specifically set forth in this Section 4, Ener1 makes no other representations, warranties or covenants, express or implied.
4.1. Organization of Ener1. Ener1 is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Florida. Ener1 is duly qualified to do business and in good standing as a foreign corporation and licensed or qualified to transact business in each jurisdiction in which the nature of the properties owned or leased by Ener1 or used in connection with its business requires Ener1 to be so licensed or qualified, other than such failures to be so licensed or qualified which would not have a Material Adverse Effect.
4.2. Authority Relative to this Agreement. Ener1 has all necessary corporate power,
authority and capacity to enter into this Agreement, to deliver the Purchase Price and to perform its other obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Ener1 and, upon such execution and delivery, and assuming the entry of the Approval Order, this Agreement shall constitute the legal, valid and binding obligation of Ener1, enforceable in accordance with its terms. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including without limitation the delivery of the Revised Warrants, do not and will not result in a breach or violation of, or a default under, any statute applicable to Ener1, any agreement to which it is a party or by which it or any of its properties are bound, or any order, judgment, decree, rule or regulation of any court or any governmental agency or body having jurisdiction over it or its properties, which breach, violation or default is reasonably likely to have a Material Adverse Effect.
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4.3. Capitalization. The number of authorized and outstanding shares of common
stock and preferred stock of Ener1 is as described in the most recent SEC Report (as defined below) filed by Ener1. Upon issuance of the Ener1 Stock Consideration, and receipt of the consideration therefore in accordance with the terms hereof, the Ener1 Stock Consideration will be validly issued, fully paid and nonassessable. No class of capital stock of Ener1 is entitled to preemptive rights. Except for the Warrants and, except as described in the SEC Reports (as defined below) filed by Ener1 prior to the date hereof, there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, shares of any capital stock of Ener1, or contracts, commitments, understandings, or arrangements by which Ener1 is or may become bound to issue additional shares of its capital stock or options, warrants or rights to purchase any shares of its capital stock. Ener1 has not offered or sold any shares of capital stock in a manner that would require the offer or sale to Delphi of the Ener1 Stock Consideration to be registered under the Securities Act or under any state securities laws.
4.4. SEC Reports, Absence of Changes, etc. Ener1 has filed all proxy statements,
periodic, current and other reports and other documents required to be filed by it under the Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”) since December 31, 2006 (collectively, the “SEC Reports”). Each SEC Report was, at the time it was filed, in compliance in all material respects with the requirements of its form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Since December 31, 2007, except as disclosed in the SEC Reports, there has been no change in the condition of Ener1, whether as a result of any change as to accounts receivable or other assets, any loss of competitive position, any natural disaster, accident, strike, sabotage or confiscation of property, or any other event of condition directly affecting or relating to Ener1 or its business, whether or not related to any of the foregoing, except for such changes as have not and are not reasonably likely to have a Material Adverse Effect, and to Ener1’s knowledge no such changes are contemplated or pending.
4.5. Financial Statements. The financial statements of Ener1 contained in the SEC
Reports present fairly, in all material respects, the financial position of Ener1 and the results of its operations and cash flows as of the respective dates and periods thereof in conformity with United States generally accepted accounting principles (except that, in the case of unaudited interim financial statements such statements are subject to normal, recurring adjustments which would be made in the course of an audit and which would not be material).
4.6. Disclosure. None of the information contained in the representations and
warranties of Ener1 set forth in this Agreement, including any Exhibits and
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Schedules referenced herein, or in the lists and other information furnished to Delphi in connection with the transactions contemplated hereby, or in the certificates delivered or to be delivered in connection herewith, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading.
5. COVENANTS.
5.1. Bankruptcy Actions. Delphi shall file with the Bankruptcy Court a motion, pursuant to, among other things, Sections 363 of the Bankruptcy Code, seeking approval of the transactions contemplated hereby. Delphi and Ener1 shall use their reasonable best efforts to cooperate, assist and consult with each other to (a) secure the entry of the Approval Order as soon as reasonably practicable, and (b) consummate the transactions contemplated by this Agreement as soon as reasonably practicable. In the event that any orders of the Bankruptcy Court relating to this Agreement shall be appealed by any Person (or a petition for certiorari or motion for reconsideration, amendment, clarification, modification, vacation, stay, rehearing or reargument shall be filed with respect to any such order), Delphi shall take such steps as are reasonably necessary or appropriate to diligently defend against such appeal, petition or motion and Delphi shall use its reasonable best efforts to obtain an expedited resolution of any such appeal, petition or motion.
5.2. Other Actions Pending the Closing. Delphi shall not (i) sell, lend or transfer
any right, title or interest in or to any of the Shares, (ii) subject any of the Shares to any Lien, or (iii) take any action (or fail to take any action) that would cause the representations and warranties made by Delphi in this Agreement not to be true and correct in any material respect as of the Closing Date.
5.3. Supplemental Disclosure. Each party to this Agreement covenants that until
the Closing, it shall promptly advise the other party with respect to any matter arising or discovered that, if existing or known at the date of this Agreement, would have been required to be set forth or described in a schedule to this Agreement by such party, or that constitutes, or could constitute, a breach or prospective breach, of this Agreement by such party; provided, however, that no such disclosure shall cure any breach or potential breach of this Agreement.
5.4. Intellectual Property. With the exception of licenses set forth in paragraph 5.5
below, Delphi shall not claim any right, license or interest in or to any of the Company’s Confidential Information or intellectual property, including, without limitation, any trademarks, copyrights, patents, patent applications, trade secrets, know-how, or the use of the Company’s name (i.e., “EnerDel”).
5.5. Licenses. Delphi shall have a royalty-free, worldwide, perpetual license under
the patents assigned by Delphi to EnerDel pursuant to the Formation Agreement, for non-lithium battery use, manufacture or sale. Any assignments, licenses, leases, grants of security interests or other transactions involving the above-mentioned patents shall be subject to these licenses.
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5.6. Non-Compete. Paragraph 1.6 (“Non-Compete”) of the Formation Agreement
shall remain in full force and effect and will not be included in the Certificate of Termination.
6. CONDITIONS TO OBLIGATIONS OF DELPHI AND ENER1.
6.1. Conditions to Obligations of Ener1 and Delphi. The obligations of Ener1 and Delphi to consummate the transactions contemplated under this Agreement shall be subject to the satisfaction (or mutual waiver) at or prior to the Closing Date of the following conditions:
(a) No Injunction. No preliminary or permanent injunction or other order
issued by any Governmental Entity shall be in effect or instituted which materially delays, restrains, enjoins or otherwise prohibits or limits the transactions contemplated by this Agreement.
(b) Entry of Approval Order. The Bankruptcy Court shall have approved and entered the Approval Order, and the Approval Order shall be effective and not subject to any stay.
(c) HSR Act. Any applicable waiting period under the HSR Act, if required, shall have expired or shall have been earlier terminated.
6.2. Conditions to Obligations of Ener1. The obligation of Ener1 to consummate the transactions contemplated under this Agreement is subject to the satisfaction (or waiver by Ener1 in its sole discretion) at or prior to the Closing Date of each of the following additional conditions:
(a) Accuracy of Representations and Warranties. The representations and
warranties of Delphi contained herein that are qualified by materiality shall be true and correct in all respects on the date hereof and on and as of the Closing Date, and the representations and warranties of Delphi contained herein that are not qualified by materiality shall be true and correct in all material respects on the date hereof and as of the Closing Date, in each case with the same force and effect as though such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct as of such date.
(b) Performance of Agreements. Delphi shall have performed in all material respects each of the covenants, obligations and agreements contained in this Agreement required to be performed by it prior to or at the Closing Date.
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(c) Kay Resignation Letter. The Company shall have received a copy of Rick Kay’s letter of resignation from the Board of Directors of the Company, such resignation to be effective upon the Closing Date.
(d) Officer’s Certificate. Ener1 shall have received a certificate, dated as of the Closing Date, of a duly authorized officer of Delphi to the effect that the conditions specified in Sections 6.2(a) and (b) have been satisfied.
(e) Termination of Formation Agreement. Delphi shall have executed and delivered to Ener1 the Certificate of Termination.
(f) Share Certificates. Delphi shall deliver to Ener1 one or more certificates representing the Shares, duly endorsed for transfer to Ener1, and with any necessary transfer stamps attached.
(g) Other Deliveries. Delphi shall have delivered to Ener1 a certificate of its secretary or assistant secretary, certifying to and attaching certificates of good standing, charter documents and resolutions of the board of directors of Delphi in form and substance reasonably acceptable to Ener1 approving the transactions contemplated hereby, and all other customary documents, certificates and instruments reasonably requested by Ener1 in order to consummate the transactions contemplated by this Agreement.
6.3. Conditions Precedent to the Obligations of Delphi. The obligation of Delphi to consummate the transactions contemplated under this Agreement is subject to the satisfaction (or waiver by Delphi in its sole discretion) at or prior to the Closing Date of each of the following additional conditions:
(a) Accuracy of Representations and Warranties. The representations and
warranties of Ener1 contained herein that are qualified by materiality shall be true and correct in all respects on the date hereof and on and as of the Closing Date, and the representations and warranties of Ener1 contained herein that are not qualified by materiality shall be true and correct in all material respects on the date hereof and as of the Closing Date, in each case with the same force and effect as though such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct in all material respects as of such date.
(b) Performance of Agreements. Ener1 shall have performed in all material respects each of the covenants, obligations and agreements contained in this Agreement required to be performed by it prior to or at the Closing Date.
(c) Officer’s Certificate. Delphi shall have received a certificate, dated as of the Closing Date, of a duly authorized officer of Ener1 to the effect that the conditions specified in Sections 6.3(a) and (b) have been fulfilled.
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(d) Termination of Formation Agreement. Ener1 shall have executed and delivered to Delphi the Certificate of Termination.
(e) Warrant. Ener1 shall have issued and delivered to Delphi a certificate representing the Revised Warrant.
(f) Ener1 Stock Consideration. Ener1 shall have issued and delivered to Delphi one or more certificates representing the Ener1 Stock Consideration, registered in the name of Delphi or its designee and containing no legends or other restrictions on transfer or resale except those permitted by Section 2.3 hereof.
(g) Other Deliveries. Ener1 shall have delivered a certificate of its secretary or assistant secretary, certifying to and attaching certificates of good standing, charter documents and resolutions of the board of directors of Ener1 in form and substance reasonably acceptable to Delphi approving the transactions contemplated hereby, and all other customary documents, certificates and instruments reasonably requested by Delphi in order to consummate the transactions contemplated by this Agreement.
6.4. Satisfaction of Conditions. Each party shall use its reasonable best efforts to satisfy the conditions to closing to be satisfied by it pursuant to this Section 6.
7. TERMINATION.
7.1. Termination of Agreement. This Agreement may be terminated, and the transactions contemplated hereby abandoned, at any time prior to the Closing:
(a) by mutual written agreement of Ener1 and Delphi;
(b) by either party if the Closing shall not have occurred on or before 11:59 p.m. (New York time) on the date five Business Days following the date the Approval Order is no longer subject to a stay or injunction; provided, however, that the right to terminate this Agreement pursuant to this Section 7.1(b) shall not be available to a party whose material failure to fulfill any obligation under this Agreement shall have been the cause of the failure of the Closing Date to have occurred on or prior to such date;
(c) by written notice of Ener1 to Delphi, if Delphi shall have materially breached its representations, warranties or agreements contained herein; provided that any such breach is not curable or, if curable, is not cured within 10 Business Days after Ener1 gives Delphi written notice identifying such breach or breaches;
(d) by written notice of Delphi to Ener1, if Ener1 shall have materially breached its representations, warranties or agreements contained herein; provided that any such breach is not curable or, if curable, is not cured within 10 Business Days after Delphi gives Ener1 written notice identifying such breach or breaches; or
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(e) by either party if the Bankruptcy Court has not approved and entered the Approval Order on or before September 12, 2008 (or such later date as the parties may agree in writing).
7.2. Effect of Termination. Nothing in this Section 7 shall relieve any party of any liability for a breach of this Agreement prior to the termination hereof, including the failure to use reasonable best efforts to satisfy or cause to be satisfied the conditions to Closing required to be satisfied by it. Upon the termination of this Agreement in accordance with its terms, all rights and obligations of the parties hereunder shall terminate, except that the provisions of Sections 5.5, 7, 8, 9, 10 and 11 shall remain in full force and effect.
8. PUBLIC ANNOUNCEMENTS. Except as required by any and all applicable laws, rules, and regulations of any governmental authority or governmental order (and then only after prior consultation with the other party to this Agreement) or in connection with the Case and Delphi's efforts to seek entry of the Approval Order, neither party to this Agreement will make any public announcements regarding this Agreement or the transactions contemplated herein without obtaining the prior written consent of the other party (such consent not to be unreasonably withheld, delayed, or conditioned).
9. CONFIDENTIALITY.
9.1. Duty to Keep Information Confidential. Delphi agrees (i) to hold all
Confidential Information in strict confidence and to take all precautions to protect such Confidential Information, (ii) not to disclose any Confidential Information or any information derived therefrom to any third party, and (iii) not to make any use at any time of such Confidential Information. Without granting any right or license, the foregoing clauses (i), (ii) and (iii) shall not apply with respect to any information that (a) is, through no improper action or inaction by Delphi, generally available to the public, or (b) was rightfully disclosed to Delphi by a third party not under a duty of confidentiality with respect to such information, and shall not be interpreted in any way to limit or restrict the licenses provided pursuant to Section 5.5 hereof.
9.2. Right to Disclose Confidential Information. Delphi may disclose Confidential Information to the extent such disclosure is (i) determined by Delphi in its reasonable judgment, acting in good faith and upon the advice of counsel, to be necessary in order to obtain entry of the Approval Order, or (ii) required by the order of any court or regulatory authority; provided, however, that Delphi (i) shall use reasonable best efforts to limit such disclosure and (ii) shall provide Ener1 with prior written notice of such disclosure sufficient to allow Ener1 to obtain a protective order or otherwise seek to prevent such disclosure.
10. NOTICES. Unless additional means are expressly provided herein, any notice,
request, consent or other communication required or permitted to be given under this Agreement will be in writing and will be deemed to have been sufficiently given or served for all purposes: (i) when personally delivered to the recipient at
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the address below indicated; (ii) on the first (1st) Business Day after sent by a nationally or internationally recognized overnight courier service with signature to the recipient at the address below indicated; or (iii) when sent if delivered by facsimile with confirmation of receipt; provided, however, that if any such notice, request, consent or other communication is received after 5 p.m. (New York time) on a Business Day, or on a day that is not a Business Day, such receipt shall not be effective until the immediately succeeding Business Day.
If to Delphi: DELPHI CORPORATION
5725 Delphi Drive Troy, Michigan 48098 Attn: Vice President and Treasurer Fax No.: 248-813-2648
With a copy to: DELPHI CORPORATION
5725 Delphi Drive Troy, Michigan 48098 Attn: Assistant General Counsel -
Corporate and Securities Fax No.: 248-813-2491
If to Ener1: ENER1, INC
1540 Broadway Suite 25C New York, NY 10036 Attn.: Charles Gassenheimer Fax: (212) 920-3510
With a copy (which shall not constitute notice) to:
Mazzeo Song & Bradham LLP 708 Third Avenue 19th Floor New York, New York 10017 Attn: Robert L. Mazzeo Tel: (212) 599-0700 Fax: (212) 599-8400
provided, however, either Party may change its address by giving notice in accordance with this Section 10.
11. GENERAL.
11.1. Entire Agreement; Modification; Waiver. This Agreement constitutes and contains the entire agreement of the parties and supersedes any and all prior negotiations, correspondence, understandings, and agreements between the parties respecting the subject matter hereof. This Agreement may be amended only by a written instrument signed by both parties. No provision of this Agreement may be waived other than by a written instrument signed by the
14
party against whom enforcement of any such waiver is sought. Any waiver shall be effective only in the specific instance and for the specific purpose for which given.
11.2. Headings. The division of this Agreement into Sections, Articles, Paragraphs
and subparagraphs and the insertion of headings are for convenience of reference only and shall not be used in the interpretation of this Agreement.
11.3. Exhibits and Schedules. The exhibits and schedules hereto, whether or not
attached hereto, are deemed a part of this Agreement.
11.4. Jurisdiction; Governing Law. This Agreement and performance under it shall be governed by and construed in accordance with the applicable laws of the United States and the laws of the State of Delaware, without giving effect to the principles thereof relating to conflicts of laws. Each party irrevocably agrees that unless otherwise mutually agreed by the parties, any legal action, suit or proceeding brought by it in any way arising out of this Agreement must be brought solely and exclusively (a) in the Bankruptcy Court while the Case remains open, and (b) in all other instances in Oakland County, Michigan, and each party irrevocably submits to the non-exclusive jurisdiction of the Bankruptcy Court or the federal and state courts in Oakland County, Michigan, as applicable in personam, generally and unconditionally with respect to any action, suit or proceeding brought by it or against it by the other party.
11.5. Expenses. Except as specifically set forth otherwise in this Agreement, each
party will pay its own expenses incurred incident to this Agreement and the transactions contemplated hereby.
11.6. Binding Nature and Assignment. The Agreement shall be binding on the
parties and their respective successors and permitted assigns (including a reorganized or reconstituted Delphi after the Closing Date of its confirmed plan of reorganization). Except for Delphi's assignment of the Agreement to a reorganized or reconstituted Delphi after the Closing Date of its confirmed plan of reorganization, neither party may, or will have the power to assign the Agreement without the prior written consent of the other. Any attempted assignment that does not comply with the terms of this Section shall be null and void.
11.7. Counterparts. 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. This Agreement may be executed and delivered by facsimile transmission.
11.8. 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 and the transactions contemplated hereby and thereby, (ii) it is not relying on any advice or representation of the other party in connection with entering into this Agreement or such transactions (other than the representations made in this Agreement), (iii) it has not received from the other
15
party any assurance or guarantee as to the merits (whether legal, regulatory, tax, financial or otherwise) of entering into this Agreement 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 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 the other party.
11.9. Injunctive Relief. Each party agrees that a breach by it of its obligations
hereunder will cause irreparable harm to the other party, that the remedy or remedies at law for any such breach will be inadequate and, in the event of any breach of this Agreement by the other party, in addition to all other available remedies, such party shall be entitled to an injunction restraining any breach and requiring immediate and specific performance of such obligations without the necessity of showing economic loss or the posting of any bond.
[signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year above written.
ENER1, INC. By: /s/
Name: Title:
DELPHI AUTOMOTIVE SYSTEMS LLC. By: /s/
Name: Title:
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x In re DELPHI CORPORATION, et al., Debtors.
: : : : : : :
Chapter 11 Case No. 05-44481 (RDD) (Jointly Administered)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x ORDER UNDER 11 U.S.C. § 363 AND FED. R. BANKR. P. 2002 AND 6004 AUTHORIZING
AND APPROVING ENTRY BY DELPHI AUTOMOTIVE SYSTEMS LLC INTO RESTRUCTURING AND EXCHANGE AGREEMENT WITH ENER1, INC. RELATED TO
JOINT VENTURE ENERDEL, INC.
("JOINT VENTURE ORDER")
Upon the motion, dated July 11, 2008 (the "Motion"),1 of Delphi Corporation ("Delphi")
and certain of its subsidiaries and affiliates, debtors and debtors-in-possession in the above-
captioned cases (collectively, the "Debtors"), for an order pursuant to 11 U.S.C. § 363 and Fed.
R. Bankr. P. 2002 and 6004 authorizing and approving, but not directing, the entry by Delphi
Automotive Systems LLC ("DAS LLC") into that certain Restructuring and Exchange
Agreement (the "Restructuring and Exchange Agreement"), a copy of which is attached hereto as
Exhibit A, with Ener1, Inc. ("Ener1") for the restructuring and exchange of ownership interests
in the joint venture EnerDel, Inc. ("EnerDel") for cash, equity interest, and revised warrants (the
"Exchange Consideration"); and upon the record of the hearing held on the Motion; and after due
deliberation thereon, and sufficient cause appearing therefor,
1 Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Motion.
2
IT IS HEREBY FOUND AND DETERMINED THAT2:
A. The transactions contemplated by the Restructuring and Exchange Agreement and
the related agreements, documents, and instruments contemplated by the Restructuring and
Exchange Agreement have been negotiated and documented in good faith and from arm's length
bargaining positions.
B. The transactions contemplated by the Restructuring and Exchange Agreement and
the related agreements, documents, and instruments contemplated by the Restructuring and
Exchange Agreement satisfy the requirements of section 363 of the Bankruptcy Code.
C. The relief requested in the Motion and granted herein, including the execution of
and performance of the Restructuring and Exchange Agreement by DAS LLC, is in the best
interests of DAS LLC, its estate, its creditors, and its other stakeholders.
D. The Debtors have given adequate notice of the Motion, including notice as
required under rules 2002 and 6004 of the Federal Rules of Bankruptcy Procedure, and no other
or further notice of the Motion or the hearing on the Motion is necessary.
E. The terms and conditions of the Restructuring and Exchange Agreement are fair
and reasonable.
F. The Exchange Consideration provided by Ener1 represents fair and at least
reasonably equivalent value for all of the common stock and preferred stock in EnerDel owned
by DAS LLC (the "Shares").
2 Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings
of fact when appropriate. See Fed. R. Bankr. P. 7052.
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NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED THAT:
1. The Motion is GRANTED.
2. DAS LLC is authorized, but not directed, to enter into the Restructuring and
Exchange Agreement and to perform its obligations thereunder.
3. The Restructuring and Exchange Agreement and all of the terms and
conditions thereof are hereby approved pursuant to section 363 of the Bankruptcy Code and rule
6004 of the Federal Rules of Bankruptcy Procedure, and accordingly the terms and conditions of
such agreement are valid, binding and enforceable.
4. DAS LLC is authorized, but not directed, to execute and deliver, and
empowered to perform under, consummate, and implement, the Restructuring and Exchange
Agreement, together with all additional instruments and documents as may be necessary or
desirable to implement the Restructuring and Exchange Agreement.
5. Upon execution and delivery of the Restructuring and Exchange Agreement
and the transfer by DAS LLC of the Shares to Ener1, the Shares shall be free and clear of any
and all claims (as defined in the Bankruptcy Code), pledges, options, charges, hypothecations,
easement, security interest, right-of-way, encroachment, mortgage, deed of trust, imperfection of
title, prior assignment or other encumbrance of any kind or nature whatsoever as permitted under
section 363 of the Bankruptcy Code (based upon, inter alia, compliance with section 363(f) of
the Bankruptcy Code) in exchange for the Exchange Consideration.
6. The terms and provisions of the Restructuring and Exchange Agreement
and this order shall be binding in all respects upon, and shall inure to the benefit of, DAS LLC,
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its estate, and its stakeholders, Ener1, and their respective affiliates, successors and assigns,
including without limitation, any Trustee appointed in these chapter 11 cases, and any affected
third parties.
7. The Restructuring and Exchange Agreement and any related agreements,
documents or other instruments may be modified, amended or supplemented by the parties
thereto, in a writing signed by both parties, and in accordance with the terms thereof, without
further order of the Court, provided that any such modification, amendment or supplement is
disclosed to counsel to the Creditors' Committee and does not have a material adverse effect on
DAS LLC's estate in the good faith business judgment of DAS LLC.
8. This Court shall retain jurisdiction to hear and determine all matters arising
from the implementation of this Order.
9. The requirement under Rule 9013-1(b) of the Local Bankruptcy Rules for
the United States Bankruptcy Court for the Southern District of New York for the service and
filing of a separate memorandum of law is deemed satisfied by the Motion.
Dated: New York, New York July __, 2008 UNITED STATES BANKRUPTCY JUDGE
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Exhibit A Restructuring And Exchange Agreement
Final Execution Copy
RESTRUCTURING AND EXCHANGE AGREEMENT This Restructuring and Exchange Agreement (the “Agreement”), is entered into as of July __, 2008 by and between Delphi Automotive Systems LLC (“Delphi”), a Delaware limited liability company, with its principal place of business at 5725 Delphi Drive, Troy, Michigan 48098 and Ener1, Inc. (“Ener1”), a Florida corporation, with its principal place of business at 500 West Cypress Creek Road, Suite 100, Fort Lauderdale, Florida 33309.
WITNESSETH WHEREAS, Delphi and Ener1 each owns equity in EnerDel, Inc (the “Company”), a Delaware corporation, with its principal place of business at 8640 Hague Road, Indianapolis, IN 46256; WHEREAS, Delphi owns 19,500,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”); WHEREAS, Delphi owns eight thousand (8,000) shares of Series A preferred stock of the Company, par value $0.01 per share, having a liquidation value of $1,000 per share (the “Preferred Stock”); WHEREAS, Delphi owns warrants entitling the holder thereof to purchase up to 750,000 fully paid and non-assessable shares of Ener1 common stock, par value $0.01 per share (the “Ener1 Common Stock”) at an initial exercise price per share of $7.00, subject to adjustment in accordance with the terms of the warrants (the “Original Warrants”); WHEREAS, Ener1 currently owns 80,500,000 shares of Common Stock;
WHEREAS, Delphi commenced a case under chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sections 101 et seq. (the “Bankruptcy Code”) on October 8, 2005 in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) as Case No. 05-44481 (RDD) (the “Case”);
WHEREAS, pursuant to, inter alia, Sections 363 of the Bankruptcy Code and the applicable Federal Rules of Bankruptcy Procedure, Delphi wishes to exchange all of the shares of Common Stock and Preferred Stock owned by Delphi (the “Shares”) to Ener1, for cash, Ener1 Common Stock, and strike price adjustments to the Original Warrants, and Ener1 wishes to consummate the foregoing exchange, on the terms and subject to the conditions set forth in this Agreement; WHEREAS, the effectiveness of this Agreement and the exchange of the Shares hereunder are subject to the approval of the Bankruptcy Court; and
WHEREAS, Delphi and Ener1 are parties to a Formation, Subscription and Stockholders’ Agreement, dated as of October 20, 2004 and amended as of December 23, 2004 (the “Formation Agreement”), and, in connection with the exchange of the Shares hereunder, the parties wish to terminate certain obligations and liabilities of the parties under the Formation Agreement;
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NOW THEREFORE, in consideration of the promises and of the mutual covenants and agreements contained herein, the parties agree as follows: 1. Definitions. As used herein, the following terms have the meanings indicated:
1.1. “Affiliate” of a Person shall mean any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person.
1.2. “Approval Order” means an order of the Bankruptcy Court that is in form
and substance reasonably satisfactory to Ener1 approving this Agreement and all of the terms and conditions hereof, and approving and authorizing Delphi to consummate the transactions contemplated hereby, including the transfer of all of the Shares to Ener1. The Approval Order shall approve this Agreement without any material modification or change, and the Approval Order shall also find and provide, among other things, that (i) the transactions contemplated hereby and by all other agreements, documents and instruments contemplated in connection with this Agreement are in good faith and otherwise satisfy the provisions of Section 363 of the Bankruptcy Code, (ii) Delphi has complied with the notice requirements of Rules 2002 and 6004 of the Federal Rules of Bankruptcy Procedure and any applicable rules of the Bankruptcy Court with respect to the transactions contemplated by this Agreement and by all other agreements, documents and instruments contemplated in connection with this Agreement, (iii) the terms and conditions of this Agreement are fair and reasonable, valid, binding and enforceable, (iv) the Exchange Consideration represents fair value for the Shares, (v) Delphi’s execution of and performance under this Agreement is in the best interests of Delphi’s estate and its creditors, (vi) Delphi is authorized to enter into and perform under this Agreement, and (vii) at the Closing, except as expressly set forth in this Agreement, the Shares shall be transferred to Ener1 free and clear of any and all Liens to the extent permitted under Section 363 of the Bankruptcy Code.
1.3. “Business Day” means any day other than a Saturday, Sunday or a legal
holiday on which banking institutions in the State of New York are not required to open.
1.4. “Certificate of Termination” means the certificate in the form of Exhibit B
hereto, having the effect of terminating certain provisions of the Formation Agreement.
1.5. “Confidential Information” means any of the Company’s technical or
business information, regardless of whether such information is in written, oral, graphic, physical, electronic or other form, which may include, without limitation, patents, patent applications, inventions, inventor’s rights, copyrights, utility models, industrial or other designs, trade secrets, mask works, scientific knowledge, know-how, show-how, processes, procedures, formulae, products, drawings, materials, apparatus, methods, customer or supplier specifications or requirements, computer software and other data,
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technical documentation or specifications, plans, records, test results, permissions, licenses and approvals, telephone numbers, e-mail addresses and names, techniques, business operations, financial information, customer and/or supplier information, distribution information, and other records and information.
1.6. “Consent” means any consent, waiver, authorization, order or approval, filing,
registration or notification.
1.7. “Exchange Consideration” has the meaning specified in Section 2.3 below.
1.8. “Governmental Entity” shall mean any (i) federal, state, local, municipal, foreign or other government; (ii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); or (iii) body exercising, or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitral tribunal.
1.9. “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and any successor statute and the rules and regulations thereunder or under any successor statute.
1.10. “Lien” means any claim (as defined in the Bankruptcy Code), pledge, option,
charge, hypothecation, easement, security interest, right-of-way, encroachment, mortgage, deed of trust, imperfection of title, prior assignment or other encumbrance of any kind or nature whatsoever.
1.11. “Material Adverse Effect” means, with respect to a party, an effect on (i) the
consolidated business, properties, assets, operations, results of operations or financial condition of such party, or (ii) the ability of such party to perform its obligations under this Agreement that, in any such case, is material and adverse.
1.12. “Person” shall mean an individual, a partnership, a joint venture, an
association, a corporation, a business trust, a limited liability company, a trust, an unincorporated organization, a joint stock company, a labor union, an estate, a Governmental Entity or any other entity.
2. EXCHANGE OF SHARES.
2.1. Exchange. Upon and subject to the terms and conditions of this Agreement and entry of the Approval Order, at the closing (the “Closing”), Delphi shall transfer and deliver to Ener1, and Ener1 shall acquire and accept, the Shares, free and clear of any Liens to the extent permitted under Section 363 of the Bankruptcy Code.
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2.2. Closing; Closing Date. The Closing shall occur on the first Business Day following the day on which all conditions set forth in Section 6 of this Agreement have been satisfied or waived, or on such other date as the parties hereto shall mutually agree, such date to be as soon as practicable following entry of the Approval Order and in no event later than the date specified in Section 7.1(b) hereof (the “Effective Date”).
2.3. Exchange Consideration. In consideration for the delivery of the Shares by
Delphi at the Closing, Ener1 shall deliver to Delphi, as consideration for the Shares (the “Exchange Consideration”), the following:
(a) 2,857,143 shares of Ener1 Common Stock (the “Ener1 Stock
Consideration”), registered in the name of Delphi or its designated Affiliate, containing no legends or restrictions on transfer other than a legend specifying compliance with applicable federal securities laws; and which legend, if any, shall be removed at the request of Delphi following the date on which such shares can be sold to the public without limitation pursuant to Rule 144 under the Securities Act of 1933, as amended, or the rules promulgated thereunder (the “Securities Act”);
(b) $8,000,000 cash (the “Cash Consideration”) in immediately
available funds to be delivered by wire transfer to an account or accounts specified by Delphi in writing delivered to Ener1 no later than the Business Day immediately preceding the Closing Date; and
(c) revised warrants in exchange for the Original Warrants (the
“Revised Warrants”) delivered as set forth in Section 2.4 hereof; the Revised Warrants shall be in the form of Exhibit A hereto, shall have an exercise price of per share price of $5.25 and shall be exercisable into 750,000 shares of Ener1 Common Stock, subject to adjustment in accordance with the terms of the Revised Warrants.
2.4. Delivery of Shares by Delphi. At the Closing, simultaneous with and
conditioned upon the deliveries to be made by Ener1 pursuant to Section 2.3 hereof, Delphi shall deliver certificates representing the Shares, duly endorsed for transfer to Ener1.
2.5. Currency. All dollar amounts referred to in this Agreement are in the lawful
money of the United States of America. 3. REPRESENTATIONS AND WARRANTIES OF DELPHI. Delphi makes the
following representations and warranties to Ener1 regarding, among other things, its authority to enter into this Agreement and its ownership of the Shares. Except as specifically set forth in this Section 3, Delphi makes no other representations or warranties, express or implied, with respect to the Shares or the Company.
3.1. Existence, Standing and Qualification. Delphi is a limited liability company
validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own the Shares.
5
3.2. Authority, Power and Binding Effect. Subject to the entry of the Approval
Order, the execution and delivery of, and the performance of all obligations under, this Agreement and all other agreements, documents and instruments contemplated in connection with this Agreement to be executed and delivered by Delphi and the consummation by Delphi of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Delphi. Subject to the entry of the Approval Order, Delphi has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and all other agreements, documents and instruments contemplated in connection with this Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby. Delphi has duly executed and delivered this Agreement and, on or prior to the Closing Date, Delphi will duly execute and deliver all other agreements, documents and instruments required to be executed and delivered by Delphi pursuant to this Agreement. Upon the entry of the Approval Order, this Agreement will be, and the other agreements, documents and instruments executed by or on behalf of Delphi in connection herewith when executed and delivered will be, the legal, valid and binding obligations of Delphi, enforceable in accordance with their respective terms.
3.3. Conflicts and Consents. Assuming (i) the entry of the Approval Order, (ii) the
execution and delivery of the Certificate of Termination, and (iii) compliance with the requirements of the HSR Act (if any), none of the execution and delivery of, or the performance of the obligations under, this Agreement and all other agreements, documents and instruments contemplated in connection with this Agreement to be executed and delivered by Delphi and the consummation by Delphi of the transactions contemplated hereby and thereby, will (a) materially conflict with or result in a material breach of the certificate of formation, operating agreement or other organizational document of Delphi, (b) conflict with or result in a breach or default, or give rise to any right of acceleration, payment, amendment, cancellation or termination, under any agreement or other instrument to which Delphi is a party or by which Delphi or any of its respective properties or assets is bound, or (c) violate any law applicable to Delphi or any of its respective properties or assets, except, with respect to clauses (b) and (c), such conflicts, breaches, defaults or violations that would not reasonably be expected to have a Material Adverse Effect. Other than the entry of the Approval Order, no consent from any Person, including any required approvals under its debtor-in-possession financing agreements, the absence of which would reasonably be expected to have a Material Adverse Effect, is required in connection with this Agreement and all other agreements, documents and instruments contemplated in connection with this Agreement and the consummation by Delphi of the transactions contemplated hereby and thereby.
3.4. Ownership of Shares. The Shares are owned by Delphi and, subject to entry of
the Approval Order, the satisfaction (or waiver by the appropriate party) of the conditions to Closing specified herein, and Delphi's receipt of the Exchange Consideration, upon delivery of the Shares at the Closing, Delphi shall transfer
6
to Ener1 good and marketable title to the Shares free and clear of all Liens to the extent permitted under section 363 of the Bankruptcy Code. At the Closing, the parties shall take all action necessary in order to render inapplicable any restrictions on transfer, rights of first refusal and preemptive rights contained in the Company’s Certificate of Incorporation or in the Formation Agreement.
3.5. Brokers. Delphi has not employed any investment bank, broker or finder or
incurred any liability for any other investment banking, brokerage, finders’ or similar fees or commissions in connection with the transactions contemplated by this Agreement.
3.6. Disclosure. None of the information contained in the representations and warranties of Delphi set forth in this Agreement, including any Exhibits and Schedules referenced herein, or in the lists and other information furnished to Ener1 in connection with the transactions contemplated hereby, or in the certificates delivered or to be delivered in connection herewith, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF ENER1. Ener1 hereby makes
the following representations and warranties to Delphi. Except as specifically set forth in this Section 4, Ener1 makes no other representations, warranties or covenants, express or implied.
4.1. Organization of Ener1. Ener1 is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Florida. Ener1 is duly qualified to do business and in good standing as a foreign corporation and licensed or qualified to transact business in each jurisdiction in which the nature of the properties owned or leased by Ener1 or used in connection with its business requires Ener1 to be so licensed or qualified, other than such failures to be so licensed or qualified which would not have a Material Adverse Effect.
4.2. Authority Relative to this Agreement. Ener1 has all necessary corporate power,
authority and capacity to enter into this Agreement, to deliver the Purchase Price and to perform its other obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Ener1 and, upon such execution and delivery, and assuming the entry of the Approval Order, this Agreement shall constitute the legal, valid and binding obligation of Ener1, enforceable in accordance with its terms. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including without limitation the delivery of the Revised Warrants, do not and will not result in a breach or violation of, or a default under, any statute applicable to Ener1, any agreement to which it is a party or by which it or any of its properties are bound, or any order, judgment, decree, rule or regulation of any court or any governmental agency or body having jurisdiction over it or its properties, which breach, violation or default is reasonably likely to have a Material Adverse Effect.
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4.3. Capitalization. The number of authorized and outstanding shares of common
stock and preferred stock of Ener1 is as described in the most recent SEC Report (as defined below) filed by Ener1. Upon issuance of the Ener1 Stock Consideration, and receipt of the consideration therefore in accordance with the terms hereof, the Ener1 Stock Consideration will be validly issued, fully paid and nonassessable. No class of capital stock of Ener1 is entitled to preemptive rights. Except for the Warrants and, except as described in the SEC Reports (as defined below) filed by Ener1 prior to the date hereof, there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, shares of any capital stock of Ener1, or contracts, commitments, understandings, or arrangements by which Ener1 is or may become bound to issue additional shares of its capital stock or options, warrants or rights to purchase any shares of its capital stock. Ener1 has not offered or sold any shares of capital stock in a manner that would require the offer or sale to Delphi of the Ener1 Stock Consideration to be registered under the Securities Act or under any state securities laws.
4.4. SEC Reports, Absence of Changes, etc. Ener1 has filed all proxy statements,
periodic, current and other reports and other documents required to be filed by it under the Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”) since December 31, 2006 (collectively, the “SEC Reports”). Each SEC Report was, at the time it was filed, in compliance in all material respects with the requirements of its form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Since December 31, 2007, except as disclosed in the SEC Reports, there has been no change in the condition of Ener1, whether as a result of any change as to accounts receivable or other assets, any loss of competitive position, any natural disaster, accident, strike, sabotage or confiscation of property, or any other event of condition directly affecting or relating to Ener1 or its business, whether or not related to any of the foregoing, except for such changes as have not and are not reasonably likely to have a Material Adverse Effect, and to Ener1’s knowledge no such changes are contemplated or pending.
4.5. Financial Statements. The financial statements of Ener1 contained in the SEC
Reports present fairly, in all material respects, the financial position of Ener1 and the results of its operations and cash flows as of the respective dates and periods thereof in conformity with United States generally accepted accounting principles (except that, in the case of unaudited interim financial statements such statements are subject to normal, recurring adjustments which would be made in the course of an audit and which would not be material).
4.6. Disclosure. None of the information contained in the representations and
warranties of Ener1 set forth in this Agreement, including any Exhibits and
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Schedules referenced herein, or in the lists and other information furnished to Delphi in connection with the transactions contemplated hereby, or in the certificates delivered or to be delivered in connection herewith, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading.
5. COVENANTS.
5.1. Bankruptcy Actions. Delphi shall file with the Bankruptcy Court a motion, pursuant to, among other things, Sections 363 of the Bankruptcy Code, seeking approval of the transactions contemplated hereby. Delphi and Ener1 shall use their reasonable best efforts to cooperate, assist and consult with each other to (a) secure the entry of the Approval Order as soon as reasonably practicable, and (b) consummate the transactions contemplated by this Agreement as soon as reasonably practicable. In the event that any orders of the Bankruptcy Court relating to this Agreement shall be appealed by any Person (or a petition for certiorari or motion for reconsideration, amendment, clarification, modification, vacation, stay, rehearing or reargument shall be filed with respect to any such order), Delphi shall take such steps as are reasonably necessary or appropriate to diligently defend against such appeal, petition or motion and Delphi shall use its reasonable best efforts to obtain an expedited resolution of any such appeal, petition or motion.
5.2. Other Actions Pending the Closing. Delphi shall not (i) sell, lend or transfer
any right, title or interest in or to any of the Shares, (ii) subject any of the Shares to any Lien, or (iii) take any action (or fail to take any action) that would cause the representations and warranties made by Delphi in this Agreement not to be true and correct in any material respect as of the Closing Date.
5.3. Supplemental Disclosure. Each party to this Agreement covenants that until
the Closing, it shall promptly advise the other party with respect to any matter arising or discovered that, if existing or known at the date of this Agreement, would have been required to be set forth or described in a schedule to this Agreement by such party, or that constitutes, or could constitute, a breach or prospective breach, of this Agreement by such party; provided, however, that no such disclosure shall cure any breach or potential breach of this Agreement.
5.4. Intellectual Property. With the exception of licenses set forth in paragraph 5.5
below, Delphi shall not claim any right, license or interest in or to any of the Company’s Confidential Information or intellectual property, including, without limitation, any trademarks, copyrights, patents, patent applications, trade secrets, know-how, or the use of the Company’s name (i.e., “EnerDel”).
5.5. Licenses. Delphi shall have a royalty-free, worldwide, perpetual license under
the patents assigned by Delphi to EnerDel pursuant to the Formation Agreement, for non-lithium battery use, manufacture or sale. Any assignments, licenses, leases, grants of security interests or other transactions involving the above-mentioned patents shall be subject to these licenses.
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5.6. Non-Compete. Paragraph 1.6 (“Non-Compete”) of the Formation Agreement
shall remain in full force and effect and will not be included in the Certificate of Termination.
6. CONDITIONS TO OBLIGATIONS OF DELPHI AND ENER1.
6.1. Conditions to Obligations of Ener1 and Delphi. The obligations of Ener1 and Delphi to consummate the transactions contemplated under this Agreement shall be subject to the satisfaction (or mutual waiver) at or prior to the Closing Date of the following conditions:
(a) No Injunction. No preliminary or permanent injunction or other order
issued by any Governmental Entity shall be in effect or instituted which materially delays, restrains, enjoins or otherwise prohibits or limits the transactions contemplated by this Agreement.
(b) Entry of Approval Order. The Bankruptcy Court shall have approved and entered the Approval Order, and the Approval Order shall be effective and not subject to any stay.
(c) HSR Act. Any applicable waiting period under the HSR Act, if required, shall have expired or shall have been earlier terminated.
6.2. Conditions to Obligations of Ener1. The obligation of Ener1 to consummate the transactions contemplated under this Agreement is subject to the satisfaction (or waiver by Ener1 in its sole discretion) at or prior to the Closing Date of each of the following additional conditions:
(a) Accuracy of Representations and Warranties. The representations and
warranties of Delphi contained herein that are qualified by materiality shall be true and correct in all respects on the date hereof and on and as of the Closing Date, and the representations and warranties of Delphi contained herein that are not qualified by materiality shall be true and correct in all material respects on the date hereof and as of the Closing Date, in each case with the same force and effect as though such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct as of such date.
(b) Performance of Agreements. Delphi shall have performed in all material respects each of the covenants, obligations and agreements contained in this Agreement required to be performed by it prior to or at the Closing Date.
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(c) Kay Resignation Letter. The Company shall have received a copy of Rick Kay’s letter of resignation from the Board of Directors of the Company, such resignation to be effective upon the Closing Date.
(d) Officer’s Certificate. Ener1 shall have received a certificate, dated as of the Closing Date, of a duly authorized officer of Delphi to the effect that the conditions specified in Sections 6.2(a) and (b) have been satisfied.
(e) Termination of Formation Agreement. Delphi shall have executed and delivered to Ener1 the Certificate of Termination.
(f) Share Certificates. Delphi shall deliver to Ener1 one or more certificates representing the Shares, duly endorsed for transfer to Ener1, and with any necessary transfer stamps attached.
(g) Other Deliveries. Delphi shall have delivered to Ener1 a certificate of its secretary or assistant secretary, certifying to and attaching certificates of good standing, charter documents and resolutions of the board of directors of Delphi in form and substance reasonably acceptable to Ener1 approving the transactions contemplated hereby, and all other customary documents, certificates and instruments reasonably requested by Ener1 in order to consummate the transactions contemplated by this Agreement.
6.3. Conditions Precedent to the Obligations of Delphi. The obligation of Delphi to consummate the transactions contemplated under this Agreement is subject to the satisfaction (or waiver by Delphi in its sole discretion) at or prior to the Closing Date of each of the following additional conditions:
(a) Accuracy of Representations and Warranties. The representations and
warranties of Ener1 contained herein that are qualified by materiality shall be true and correct in all respects on the date hereof and on and as of the Closing Date, and the representations and warranties of Ener1 contained herein that are not qualified by materiality shall be true and correct in all material respects on the date hereof and as of the Closing Date, in each case with the same force and effect as though such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct in all material respects as of such date.
(b) Performance of Agreements. Ener1 shall have performed in all material respects each of the covenants, obligations and agreements contained in this Agreement required to be performed by it prior to or at the Closing Date.
(c) Officer’s Certificate. Delphi shall have received a certificate, dated as of the Closing Date, of a duly authorized officer of Ener1 to the effect that the conditions specified in Sections 6.3(a) and (b) have been fulfilled.
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(d) Termination of Formation Agreement. Ener1 shall have executed and delivered to Delphi the Certificate of Termination.
(e) Warrant. Ener1 shall have issued and delivered to Delphi a certificate representing the Revised Warrant.
(f) Ener1 Stock Consideration. Ener1 shall have issued and delivered to Delphi one or more certificates representing the Ener1 Stock Consideration, registered in the name of Delphi or its designee and containing no legends or other restrictions on transfer or resale except those permitted by Section 2.3 hereof.
(g) Other Deliveries. Ener1 shall have delivered a certificate of its secretary or assistant secretary, certifying to and attaching certificates of good standing, charter documents and resolutions of the board of directors of Ener1 in form and substance reasonably acceptable to Delphi approving the transactions contemplated hereby, and all other customary documents, certificates and instruments reasonably requested by Delphi in order to consummate the transactions contemplated by this Agreement.
6.4. Satisfaction of Conditions. Each party shall use its reasonable best efforts to satisfy the conditions to closing to be satisfied by it pursuant to this Section 6.
7. TERMINATION.
7.1. Termination of Agreement. This Agreement may be terminated, and the transactions contemplated hereby abandoned, at any time prior to the Closing:
(a) by mutual written agreement of Ener1 and Delphi;
(b) by either party if the Closing shall not have occurred on or before 11:59 p.m. (New York time) on the date five Business Days following the date the Approval Order is no longer subject to a stay or injunction; provided, however, that the right to terminate this Agreement pursuant to this Section 7.1(b) shall not be available to a party whose material failure to fulfill any obligation under this Agreement shall have been the cause of the failure of the Closing Date to have occurred on or prior to such date;
(c) by written notice of Ener1 to Delphi, if Delphi shall have materially breached its representations, warranties or agreements contained herein; provided that any such breach is not curable or, if curable, is not cured within 10 Business Days after Ener1 gives Delphi written notice identifying such breach or breaches;
(d) by written notice of Delphi to Ener1, if Ener1 shall have materially breached its representations, warranties or agreements contained herein; provided that any such breach is not curable or, if curable, is not cured within 10 Business Days after Delphi gives Ener1 written notice identifying such breach or breaches; or
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(e) by either party if the Bankruptcy Court has not approved and entered the Approval Order on or before September 12, 2008 (or such later date as the parties may agree in writing).
7.2. Effect of Termination. Nothing in this Section 7 shall relieve any party of any liability for a breach of this Agreement prior to the termination hereof, including the failure to use reasonable best efforts to satisfy or cause to be satisfied the conditions to Closing required to be satisfied by it. Upon the termination of this Agreement in accordance with its terms, all rights and obligations of the parties hereunder shall terminate, except that the provisions of Sections 5.5, 7, 8, 9, 10 and 11 shall remain in full force and effect.
8. PUBLIC ANNOUNCEMENTS. Except as required by any and all applicable laws, rules, and regulations of any governmental authority or governmental order (and then only after prior consultation with the other party to this Agreement) or in connection with the Case and Delphi's efforts to seek entry of the Approval Order, neither party to this Agreement will make any public announcements regarding this Agreement or the transactions contemplated herein without obtaining the prior written consent of the other party (such consent not to be unreasonably withheld, delayed, or conditioned).
9. CONFIDENTIALITY.
9.1. Duty to Keep Information Confidential. Delphi agrees (i) to hold all
Confidential Information in strict confidence and to take all precautions to protect such Confidential Information, (ii) not to disclose any Confidential Information or any information derived therefrom to any third party, and (iii) not to make any use at any time of such Confidential Information. Without granting any right or license, the foregoing clauses (i), (ii) and (iii) shall not apply with respect to any information that (a) is, through no improper action or inaction by Delphi, generally available to the public, or (b) was rightfully disclosed to Delphi by a third party not under a duty of confidentiality with respect to such information, and shall not be interpreted in any way to limit or restrict the licenses provided pursuant to Section 5.5 hereof.
9.2. Right to Disclose Confidential Information. Delphi may disclose Confidential Information to the extent such disclosure is (i) determined by Delphi in its reasonable judgment, acting in good faith and upon the advice of counsel, to be necessary in order to obtain entry of the Approval Order, or (ii) required by the order of any court or regulatory authority; provided, however, that Delphi (i) shall use reasonable best efforts to limit such disclosure and (ii) shall provide Ener1 with prior written notice of such disclosure sufficient to allow Ener1 to obtain a protective order or otherwise seek to prevent such disclosure.
10. NOTICES. Unless additional means are expressly provided herein, any notice,
request, consent or other communication required or permitted to be given under this Agreement will be in writing and will be deemed to have been sufficiently given or served for all purposes: (i) when personally delivered to the recipient at
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the address below indicated; (ii) on the first (1st) Business Day after sent by a nationally or internationally recognized overnight courier service with signature to the recipient at the address below indicated; or (iii) when sent if delivered by facsimile with confirmation of receipt; provided, however, that if any such notice, request, consent or other communication is received after 5 p.m. (New York time) on a Business Day, or on a day that is not a Business Day, such receipt shall not be effective until the immediately succeeding Business Day.
If to Delphi: DELPHI CORPORATION
5725 Delphi Drive Troy, Michigan 48098 Attn: Vice President and Treasurer Fax No.: 248-813-2648
With a copy to: DELPHI CORPORATION
5725 Delphi Drive Troy, Michigan 48098 Attn: Assistant General Counsel -
Corporate and Securities Fax No.: 248-813-2491
If to Ener1: ENER1, INC
1540 Broadway Suite 25C New York, NY 10036 Attn.: Charles Gassenheimer Fax: (212) 920-3510
With a copy (which shall not constitute notice) to:
Mazzeo Song & Bradham LLP 708 Third Avenue 19th Floor New York, New York 10017 Attn: Robert L. Mazzeo Tel: (212) 599-0700 Fax: (212) 599-8400
provided, however, either Party may change its address by giving notice in accordance with this Section 10.
11. GENERAL.
11.1. Entire Agreement; Modification; Waiver. This Agreement constitutes and contains the entire agreement of the parties and supersedes any and all prior negotiations, correspondence, understandings, and agreements between the parties respecting the subject matter hereof. This Agreement may be amended only by a written instrument signed by both parties. No provision of this Agreement may be waived other than by a written instrument signed by the
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party against whom enforcement of any such waiver is sought. Any waiver shall be effective only in the specific instance and for the specific purpose for which given.
11.2. Headings. The division of this Agreement into Sections, Articles, Paragraphs
and subparagraphs and the insertion of headings are for convenience of reference only and shall not be used in the interpretation of this Agreement.
11.3. Exhibits and Schedules. The exhibits and schedules hereto, whether or not
attached hereto, are deemed a part of this Agreement.
11.4. Jurisdiction; Governing Law. This Agreement and performance under it shall be governed by and construed in accordance with the applicable laws of the United States and the laws of the State of Delaware, without giving effect to the principles thereof relating to conflicts of laws. Each party irrevocably agrees that unless otherwise mutually agreed by the parties, any legal action, suit or proceeding brought by it in any way arising out of this Agreement must be brought solely and exclusively (a) in the Bankruptcy Court while the Case remains open, and (b) in all other instances in Oakland County, Michigan, and each party irrevocably submits to the non-exclusive jurisdiction of the Bankruptcy Court or the federal and state courts in Oakland County, Michigan, as applicable in personam, generally and unconditionally with respect to any action, suit or proceeding brought by it or against it by the other party.
11.5. Expenses. Except as specifically set forth otherwise in this Agreement, each
party will pay its own expenses incurred incident to this Agreement and the transactions contemplated hereby.
11.6. Binding Nature and Assignment. The Agreement shall be binding on the
parties and their respective successors and permitted assigns (including a reorganized or reconstituted Delphi after the Closing Date of its confirmed plan of reorganization). Except for Delphi's assignment of the Agreement to a reorganized or reconstituted Delphi after the Closing Date of its confirmed plan of reorganization, neither party may, or will have the power to assign the Agreement without the prior written consent of the other. Any attempted assignment that does not comply with the terms of this Section shall be null and void.
11.7. Counterparts. 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. This Agreement may be executed and delivered by facsimile transmission.
11.8. 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 and the transactions contemplated hereby and thereby, (ii) it is not relying on any advice or representation of the other party in connection with entering into this Agreement or such transactions (other than the representations made in this Agreement), (iii) it has not received from the other
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party any assurance or guarantee as to the merits (whether legal, regulatory, tax, financial or otherwise) of entering into this Agreement 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 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 the other party.
11.9. Injunctive Relief. Each party agrees that a breach by it of its obligations
hereunder will cause irreparable harm to the other party, that the remedy or remedies at law for any such breach will be inadequate and, in the event of any breach of this Agreement by the other party, in addition to all other available remedies, such party shall be entitled to an injunction restraining any breach and requiring immediate and specific performance of such obligations without the necessity of showing economic loss or the posting of any bond.
[signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year above written.
ENER1, INC. By: /s/
Name: Title:
DELPHI AUTOMOTIVE SYSTEMS LLC. By: /s/
Name: Title:
Hearing Date And Time: July 31, 2008 at 10:00 a.m. Objection Deadline: July 24, 2008 at 4:00 p.m.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP 333 West Wacker Drive, Suite 2100 Chicago, Illinois 60606 (312) 407-0700 John Wm. Butler, Jr. (JB 4711) George N. Panagakis (GP 0770) Ron E. Meisler (RM 3026) - and - SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Four Times Square New York, New York 10036 (212) 735-3000 Kayalyn A. Marafioti (KM 9632) Thomas J. Matz (TM 5986) Attorneys for Delphi Corporation, et al., Debtors and Debtors-in-Possession Delphi Legal Information Hotline: Toll Free: (800) 718-5305 International: (248) 813-2698 Delphi Legal Information Website: http://www.delphidocket.com UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x In re DELPHI CORPORATION, et al., Debtors.
: : : : : : :
Chapter 11 Case No. 05-44481 (RDD) (Jointly Administered)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x NOTICE OF MOTION UNDER 11 U.S.C. § 363 AND FED. R. BANKR. P. 2002 AND 6004 FOR ORDER AUTHORIZING AND APPROVING ENTRY BY DELPHI AUTOMOTIVE
SYSTEMS LLC INTO RESTRUCTURING AND EXCHANGE AGREEMENT WITH ENER1, INC. RELATED TO JOINT VENTURE ENERDEL, INC.
2
PLEASE TAKE NOTICE that on July 11, 2008, Delphi Corporation ("Delphi")
and certain of its subsidiaries and affiliates, debtors and debtors-in-possession in the above-
captioned cases (collectively, the "Debtors"), filed a Motion Under 11 U.S.C. § 363 and Fed. R.
Bankr. P. 2002 and 6004 For Order Authorizing And Approving Entry By Delphi Automotive
Systems LLC Into Restructuring And Exchange Agreement With Ener1, Inc. Related To Joint
Venture Enerdel, Inc. (the "Motion").
PLEASE TAKE FURTHER NOTICE that a hearing to consider approval of the
Motion will be held on July 31, 2008 at 10:00 a.m. (prevailing Eastern time) (the "Hearing")
before the Honorable Robert D. Drain, United States Bankruptcy Court for the Southern District
of New York, One Bowling Green, Room 610, New York, New York 10004.
PLEASE TAKE FURTHER NOTICE that objections, if any, to the Motion must
(a) be in writing, (b) conform to the Federal Rules of Bankruptcy Procedure, the Local
Bankruptcy Rules for the Southern District of New York, the Supplemental Order Under
11 U.S.C. §§ 102(1) And 105 And Fed. R. Bankr. P. 2002(m), 9006, 9007, And 9014
Establishing Omnibus Hearing Dates And Certain Notice, Case Management, And
Administrative Procedures, entered March 20, 2006 (Docket No. 2883) (the "Supplemental Case
Management Order"), and the Tenth Supplemental Order Under 11 U.S.C. §§ 102(1) And 105
And Fed. R. Bankr. P. 2002(m), 9006, 9007, And 9014 Establishing Omnibus Hearing Dates
And Certain Notice, Case Management, And Administrative Procedures, entered February 4,
2008 (Docket No. 12487) (together with the Supplemental Case Management Order, the "Case
Management Orders"), (c) be filed with the Bankruptcy Court in accordance with General Order
M-242 (as amended) – registered users of the Bankruptcy Court's case filing system must file
electronically, and all other parties-in-interest must file on a 3.5 inch disk (preferably in Portable
3
Document Format (PDF), WordPerfect, or any other Windows-based word processing format),
(d) be submitted in hard-copy form directly to the chambers of the Honorable Robert D. Drain,
United States Bankruptcy Judge, and (e) be served upon (i) Delphi Corporation, 5725 Delphi
Drive, Troy, Michigan 48098 (Att'n: General Counsel), (ii) counsel to the Debtors, Skadden,
Arps, Slate, Meagher & Flom LLP, 333 West Wacker Drive, Suite 2100, Chicago, Illinois 60606
(Att'n: John Wm. Butler, Jr.), (iii) counsel for the agent under the postpetition credit facility,
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017 (Att'n: Donald
Bernstein and Brian Resnick), (iv) counsel for the official committee of unsecured creditors,
Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022 (Att'n: Robert J.
Rosenberg and Mark A. Broude), (v) counsel for the official committee of equity security
holders, Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza, New York, New
York 10004 (Att'n: Bonnie Steingart), and (vi) the Office of the United States Trustee for the
Southern District of New York, 33 Whitehall Street, Suite 2100, New York, New York 10004
(Att'n: Alicia M. Leonhard) in each case so as to be received no later than 4:00 p.m.
(prevailing Eastern time) on July 24, 2008.
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PLEASE TAKE FURTHER NOTICE that only those objections made as set forth
herein and in accordance with the Case Management Orders will be considered by the
Bankruptcy Court at the Hearing. If no objections to the Motion are timely filed and served in
accordance with the procedures set forth herein and in the Case Management Orders, the
Bankruptcy Court may enter an order granting the Motion without further notice.
Dated: New York, New York July 11, 2008
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
By: /s/ John Wm. Butler, Jr. John Wm. Butler, Jr. (JB 4711) George N. Panagakis (GP 0770) Ron E. Meisler (RM 3026) 333 West Wacker Drive, Suite 2100 Chicago, Illinois 60606 (312) 407-0700 - and - By: /s/ Kayalyn A. Marafioti
Kayalyn A. Marafioti (KM 9632) Thomas J. Matz (TM 5986)
Four Times Square New York, New York 10036 (212) 735-3000
Attorneys for Delphi Corporation, et al., Debtors and Debtors-in-Possession