EX-10.1






Exhibit 10.1




PURCHASE AGREEMENT




THIS PURCHASE AGREEMENT (this “Agreement”), dated as of October 15, 2008 (the “Effective
Date”), is made by and among Ener1, Inc., a Florida corporation (the “Buyer”), and TVG Asian
Communications Fund II, L.P., a limited partnership organized under the laws of the Cayman Islands
(“TVGAC”), and Rosebud Securities Limited, an international business company incorporated under the
laws of the British Virgin Islands (“Rosebud”, together with TVGAC, the “Sellers” and,
individually, a “Seller”). The Buyer and the Sellers are referred to herein as the “Parties” and,
individually, as a “Party”.



WHEREAS, the Sellers together own the entire equity interest in each of TVG Saehan Holdings, a
limited company incorporated under the laws of the Federal Territories of Labuan, Malaysia (“TVG
Saehan”), and TVG SEI Holdings, a limited company incorporated under the laws of the British Virgin
Islands (“TVG SEI” and, together with TVG Saehan, the “TVG Entities”); and



WHEREAS, the TVG Entities together own 83% of the fully diluted capital stock of Enertech
International, Inc., a Korean corporation (“Enertech”), pursuant to their ownership of Enertech’s
common stock (the “Enertech Common Stock”), warrants and convertible bonds (the Enertech Common
Stock, together with such warrants and bonds, being collectively referred to herein as the
“Enertech Equity Interest”); and



WHEREAS, Enertech is primarily engaged in the business of manufacturing and assembling
lithium-ion batteries (the “Business”); and



WHEREAS, on the terms and subject to the conditions contained in this Agreement, the Buyer
wishes to purchase from the Sellers all of the issued and outstanding capital stock of TVG Saehan
and TVG SEI, respectively (collectively, the “TVG Equity Interest”), for the consideration
specified herein (the “Transaction”);



NOW, THEREFORE, in consideration of the mutual covenants herein contained, and other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties
agree as follows:



1. DEFINITIONS.




1.1 Certain Definitions. When used herein, the following terms shall have the
respective meanings indicated:



“Affiliate” means, as to any Person (the “subject Person”), any other Person (a) that directly
or indirectly through one or more intermediaries controls or is controlled by, or is under direct
or indirect common control with, the subject Person, (b) that directly or indirectly beneficially
owns or holds ten percent (10%) or more of any class of voting equity of the subject Person, or
(c) ten percent (10%) or more of the voting equity of which is directly or indirectly beneficially
owned or held by the subject Person. For the purposes of this definition, “control” when used with
respect to any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, through representation
on such Person’s board of directors or other management committee or group, by contract or
otherwise.



“Applicable Exchange Rate” means the base rate of exchange between Korean Won and the U.S.
Dollar published by the Bank of Korea at the opening of business in Seoul, Korea on the Closing
Date or, if the Closing Date occurs on a day that is not a Business Day, on the immediately
preceding Business Day.



“Business” has the meaning specified in the preamble to this Agreement.



“Business Day” means any day other than a Saturday, a Sunday or a day on which banks in the
City of New York or in Seoul, Korea are required or authorized by law to be closed.



“Buyer Indemnified Parties” has the meaning set forth in Section 9.1(a) of this Agreement.



“Buyer Reports” has the meaning specified in Section 4.7 hereof.



“Closing” has the meaning specified in Section 2.1 of this Agreement.



“Closing Date” has the meaning specified in Section 2.1 of this Agreement.



“Dollars” or “US$” means U.S. Dollars.



“Effective Date” has the meaning specified in the preamble to this Agreement.



“Ener1 Common Stock” means the common stock, US$0.01 par value per share, of the Buyer.



“Enertech Common Stock” has the meaning specified in the preamble to this Agreement.



“Enertech Equity Interest” has the meaning specified in the preamble to this Agreement.



“Enertech Subsidiary” means Emerging Power, Inc., a New Jersey corporation.



“Equity Securities” means, with respect to an entity, (i) any shares of common stock or other
voting equity of such entity, (ii) any security which by its terms is convertible into or
exchangeable or exercisable for common stock or other voting equity of such entity, or (iii) any
option, warrant or other right to subscribe for, purchase or otherwise acquire any security
described in clauses (i) or (ii).



“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.



“Excluded Securities” means (i) the Securities; (ii) shares of Ener1 Common Stock issuable or
issued to (x) employees, consultants or directors from time to time upon the exercise of options,
in such case granted or to be granted in the discretion of the board of directors of the Buyer
pursuant to one or more stock option plans or restricted stock plans in effect as of the Closing
Date, or (y) vendors pursuant to warrants to purchase Ener1 Common Stock that are outstanding on
the date hereof; and (iii) shares of Ener1 Common Stock issued in connection with any convertible
securities, options or warrants outstanding on the date hereof and disclosed in the Buyer Reports.



“Financial Statements” has the meaning specified in Section 3.8(a) hereof.



“GAAP” means generally accepted accounting principles and practices in Korea, applied on a
consistent basis. Accounting principles are applied on a “consistent basis” when the accounting
principles are applied in a current period in a manner substantially identical in all material
respects to the manner in which those accounting principles were applied in a preceding period.



“Governmental Authority” means any nation or government, any state, county, municipal, parish,
provincial or political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government, including without
limitation any stock exchange, securities market or self-regulatory organization.



“Governmental Requirement” means any law, statute, code, ordinance, order, rule, regulation,
judgment, decree, injunction, franchise, license or other directive or requirement of any
Governmental Authority or any department, commission, board, court, agency or any other
instrumentality of any of them.



“Indemnification Cap” means five million Dollars (US$5,000,000).



“Indemnification Threshold” means one million five hundred thousand Dollars (US$1,500,000).



“Indemnified Parties” means the Buyer Indemnified Parties or the Seller Indemnified Parties,
as the case may be.



“Indemnifying Party” means (i) with respect to any indemnification claims by the Buyer
Indemnified Parties hereunder, the Sellers; or (ii) with respect to any indemnification claims by
the Seller Indemnified Parties hereunder, the Buyer, as the case may be.



“Independent Accounting Firm” means KPMG.



“Institutional Shareholders” means, collectively, Shinhan Bank, IBK Capital Co., Ltd.,
MIC2001-5 KTAC Investment Partnership No. 4 and KDB Capital Co., which are shareholders of Enertech
as of the date hereof.



“Intellectual Property” means any U.S. or foreign patents, pending patents, patent rights,
patent applications, trademarks, trade names, service marks, brand names and images, logos and
other trade designations (including unregistered names and marks), trademark and service mark
registrations and applications, domain names, copyrights and copyright registrations and
applications, royalty rights, inventions, invention disclosures, designs, samples, specifications,
schematics, protected formulae, formulations, processes, methods, trade secrets, computer software
(including, without limitation, all source and object code, algorithms, architecture, structure,
display screens, layouts and development tools), manufacturing research and similar technical
information, engineering know-how, assembly and test data drawings and all documentation and media
constituting, describing or relating to the foregoing, including without limitation, manuals,
memoranda and records.



“June Balance Sheet” has the meaning specified in Section 3.8(a) of this Agreement.



“Korea” means the Republic of Korea.



“Lien” means, with respect to any Property, any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, tax lien, financing statement, pledge, charge, or other
lien, charge, easement, encumbrance, preference, priority or other security or preferential
arrangement of any kind or nature whatsoever on or with respect to such Property (including,
without limitation, any conditional sale or other title retention agreement having substantially
the same economic effect as any of the foregoing).



“Material Adverse Effect” means, with respect to a Person, an effect that is material and
adverse to (i) the business, properties, assets, operations, results of operations, financial
condition or creditworthiness of such Person and its Subsidiaries, if any, taken as a whole or (ii)
if such Person is a Party, the ability of such Person to perform its obligations under this
Agreement or the other Transaction Documents (as defined below), except for (a) any changes in
general economic or political conditions, (b) any matters generally affecting the same or similar
industries as the Business or companies in such industries, and (c) any adverse effect on
customers, revenues or operations of the Business directly caused by the public announcement of the
Transaction.



“Material Contracts” has the meaning specified in Section 3.12 hereof.



“Pension Plan” means, with respect to a Person, any employee benefit plan maintained by such
Person for its employees or those of any of its Affiliates.



“Permitted Liens” means, with respect to a Person:



(a) encumbrances consisting of easements, rights-of-way, zoning restrictions or other
restrictions on the use of Real Property or imperfections to title that do not (individually or in
the aggregate) materially impair the ability of such Person or any of its Subsidiaries, if any, to
use such Property in its businesses, and none of which is violated in any material respect by
existing or proposed structures or land use;



(b) Liens for taxes, assessments or other governmental charges (including without limitation
in connection with workers’ compensation and unemployment insurance) that are not delinquent or
which are being contested in good faith by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the Property subject to such Liens, and for which
adequate reserves (as determined in accordance with GAAP) have been established; and



(c) Liens of mechanics, materialmen, warehousemen, carriers, landlords or other similar
statutory Liens securing obligations that are not yet due and are incurred in the ordinary course
of business or which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the Property subject to such
Liens, for which adequate reserves (as determined in accordance with GAAP) have been established.



“Person” means any individual, corporation, trust, association, company, partnership, joint
venture, limited liability company, joint stock company, Governmental Authority or other entity.



“Personal Property” means all tangible personal property used or leased in connection with the
operation of the Business, excluding all cash and cash equivalents, investment securities,
Intellectual Property and other intangible properties and rights.



“Property” means property and/or assets of all kinds, whether real, personal or mixed,
tangible or intangible (including, without limitation, all rights relating thereto).



“Purchase Price Shares” has the meaning specified in Section 2.2(c).



“Real Property” means land and all land improvements including buildings sited on land.



“Registrable Securities” means the Purchase Price Shares and the Warrant Shares and any shares
of capital stock issued or issuable from time to time (with any adjustments) in replacement of, in
exchange for or otherwise in respect of the Purchase Price Shares or the Warrant Shares; provided,
however, that the term “Registrable Securities” shall not include Purchase Price Shares or Warrant
Shares that have been (i) sold or distributed pursuant to the Registration Statement, (ii) publicly
sold or transferred pursuant to Rule 144 or (iii) eligible for resale pursuant to Rule 144 without
volume restrictions.



“Registration Statement” means a registration statement or statements prepared in compliance
with the Securities Act and pursuant to Rule 415 under the Securities Act (“Rule 415”) or any
successor rule or regulation.



“Rule 144” means Rule 144 under the Securities Act or any successor rule or regulation.



“SEC” means the United States Securities and Exchange Commission.



“Securities” means, collectively, the Purchase Price Shares, the Warrants and the Warrant
Shares.



“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
thereunder.



“Securities Laws” means the Securities Act and the Exchange Act, as applicable, and other
applicable federal and state securities laws.



“Seller Indemnified Parties” has the meaning specified in Section 9.2(a) of this Agreement.



“Subsidiary” means, with respect to a Person, any corporation or other entity of which at
least a majority of the outstanding shares of stock or other ownership interests having by the
terms thereof ordinary voting power to elect a majority of the board of directors (or Persons
performing similar functions) of such corporation or entity (regardless of whether or not at the
time such ownership interest shall or might have voting power by reason of the happening of any
event or circumstance) is at the time directly or indirectly owned or controlled by such Person or
one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries.



“Taxes” means all income taxes, estimated taxes, alternative minimum taxes, excise taxes,
sales taxes, use taxes, value-added taxes, gross receipts taxes, franchise taxes, capital stock
taxes, employment and payroll-related taxes, withholding taxes, stamp taxes, transfer taxes,
windfall profit taxes, environmental taxes and property taxes, whether or not measured in whole or
in part by net income, and all deficiencies or other additions to tax, interest, fines and
penalties.



“Transaction” means the purchase and sale of the TVG Equity Interest contemplated hereby.



“Transaction Documents” means, collectively, this Agreement, the Warrants and all other
agreements, documents and other instruments executed and delivered by or on behalf of any Party at
the Closing.



“TVG Entities” has the meaning specified in the preamble to this Agreement.



“TVG Equity Interest” has the meaning specified in the preamble to this Agreement.



“Warrant”, “Warrants” and “Warrant Shares” have the respective meanings specified in Section
2.2(b) of this Agreement.




1.2 Other Definitional Provisions. All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms defined. The words “hereof”,
“herein” and “hereunder” and words of similar import referring to this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.



2. PURCHASE AND SALE.




2.1 Sale of TVG Equity Interest. On the terms and subject to the conditions
specified herein, each Seller agrees to sell and the Buyer agrees to purchase from such Seller the
portion of the TVG Equity Interest owned by such Seller, it being understood that, together, the
Sellers own the entire fully-diluted TVG Equity Interest. The date on which the closing of such
sale and purchase (the “Closing”) occurs is hereinafter referred to as the “Closing Date.” The
Closing Date shall occur at the offices of Kim, Chang & Lee, located at 5th Floor, Wonseo
Building, 171 Wonseo-dong, Chongro-ku, Seoul 110-280, Korea, on or before the third (3rd) Business
Day following the date on which all of the conditions set forth in Section 6 have been satisfied
(or waived by the appropriate Party in its sole discretion), or at such other place or time as may
be agreed in writing between the Parties.




2.2 Purchase Price. In consideration of the sale of the TVG Equity Interest by the
Sellers to the Buyer and upon the satisfaction or waiver of all of the conditions contained
herein, the Buyer agrees that it will deliver to the Sellers at the Closing (as defined below) the
following consideration (collectively, the “Purchase Price”):



(a) the Buyer will issue and deliver certificates representing five million (5,000,000) shares
of Ener1 Common Stock registered in such name or names as the Sellers shall notify the Buyer at
least three (3) Business Days prior to the Closing Date (the “Purchase Price Shares”); provided,
however, that if the Buyer issues Ener1 Common Stock or securities or instruments convertible,
exchangeable or exercisable into Ener1 Common Stock, other than Excluded Securities, for a price
less than US$7.20 per share (subject to adjustment for stock splits, stock dividends and similar
events) (the “Base Price”) at any time during the period beginning on the Closing Date and ending
on the three-month anniversary of the Closing Date, Ener1 will pay to the Sellers a ‘make-whole’
cash payment equal to the difference between the Base Price and the price at which such equity or
warrants are issued times the number of Purchase Price Shares (subject to adjustment for
stock splits, stock dividends and similar events);



(b) the Buyer will execute and deliver one or more warrants in the form set forth on Exhibit A
(each, a “Warrant” and, collectively, the “Warrants”) exercisable on or before the second
anniversary of the Closing Date into an aggregate of 2,560,000 shares of Ener1 Common Stock (the
“Warrant Shares”) at an exercise price of US$7.50 (subject in each case to adjustment as provided
therein). Each Warrant will contain full-ratchet anti-dilution protection during the three-month
period following the Closing Date and will permit “cashless exercise” thereof; and



(c) the Buyer shall pay the sum of six hundred thousand Dollars (US$600,000) by wire transfer
of immediately available funds to an account designated by the Sellers (the “Cash Payment”).



It is acknowledged and agreed by the Parties that the Purchase Price Shares, the Warrants, the
Cash Payment and all documents, certificates, notices and other instruments and communications
deliverable by the Buyer to the Sellers hereunder may be delivered to and in the name of TVGAC,
which hereby agrees to accept delivery thereof on behalf of itself and Rosebud.



3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each Seller hereby represents and warrants to
the Buyer that all statements contained in this Section 3 are true and correct:




3.1 Organization and Authority of the Sellers; Enforceability. TVGAC is a limited
partnership duly organized, validly existing and in good standing under the laws of the Cayman
Islands. Rosebud is an international business company duly organized, validly existing and in good
standing under the laws of the British Virgin Islands. Each Seller has full right, authority and
power to enter into this Agreement and each Transaction Document to be executed and delivered by
such Seller and to perform its obligations hereunder and thereunder. The execution, delivery and
due performance by each Seller of this Agreement and the other Transaction Documents to be
executed and delivered by it have been duly authorized by all necessary action (corporate and
other) on the part of such Seller and no other action on the part of such Seller is required in
connection therewith. This Agreement and the other Transaction Documents executed and delivered
by each Seller constitute, or when executed and delivered will constitute, valid and binding
obligations of such Seller enforceable against such Seller in accordance with their respective
terms subject to any applicable bankruptcy, insolvency, reorganization, moratorium or other
similar federal or state laws affecting the enforcement of creditors’ rights generally, and to
general principles of equity and public policy. Except as set forth on Schedule 3.1, the
execution, delivery and performance by each Seller of this Agreement and the other Transaction
Documents to which it is a party do not and will not (i) to the Sellers’ knowledge, violate any
laws or regulations of the United States, Korea or other Governmental Authority, (ii) require
either Seller, Enertech or either TVG Entity to obtain any approval, consent or waiver of, or make
any filing with, any Governmental Authority that has not been obtained or made or will be obtained
or made at or prior to Closing, (iii) result in a breach of, constitute a default under,
accelerate any obligation under, or give rise to a right of termination of any indenture or loan
or credit agreement or any other material agreement, contract, instrument, mortgage, lien, lease,
permit, authorization, order, writ, judgment, injunction, decree, determination or arbitration
award to which either Seller, Enertech, the Enertech Subsidiary or either TVG Entity is a party or
by which any property of either Seller, Enertech, the Enertech Subsidiary or either TVG Entity is
bound or affected, or (iv) result in the creation or imposition of any Lien on the TVG Equity
Interest, the Enertech Equity Interest or any of the assets of Enertech, the Enertech Subsidiary
or either TVG Entity, other than, in the case of each of clauses (ii) and (iii), any of which that
would not have a Material Adverse Effect on Enertech or impair either Seller’s ability to perform
its obligations hereunder.




3.2 Organization and Authority of Enertech. Enertech is a stock corporation duly
organized, validly existing and in good standing under the laws of Korea with the requisite power
and authority (corporate or otherwise) to own or lease its properties and to conduct its business
in the manner and in the places where such properties are owned or leased or such business is
currently conducted or proposed to be conducted. The copies of Enertech’s Articles of
Incorporation, as amended to date, and by-laws, as amended to date, and heretofore delivered to
the Buyer’s counsel, are complete and correct, and no amendments thereto are pending. Enertech is
not required to be licensed or qualified to conduct its business or own its property in any
jurisdiction other than Korea, except such jurisdictions where the failure to be so qualified, in
the aggregate, would not reasonably be expected to have a Material Adverse Effect on Enertech.




3.3 Organization and Authority of the TVG Entities. Each TVG Entity is a limited
company duly organized, validly existing and in good standing under the laws of, in the case of
TVG Saehan, Labuan, Malaysia and, in the case of TVG SEI, the British Virgin Islands, with the
requisite power and authority (corporate or otherwise) to own or lease its properties and to
conduct its business in the manner and in the places where such properties are owned or leased or
such business is currently conducted or proposed to be conducted. The copies of each TVG Entity’s
Articles of Incorporation, as amended to date, and by-laws, as amended to date (or similar
governing documents), and heretofore delivered to the Buyer’s counsel, are complete and correct,
and no amendments thereto are pending. Except as set forth on Schedule 3.3, neither TVG Entity
(i) owns any assets other than the Enertech Equity Interest, (ii) has any direct or indirect
ownership interest in or control over any corporation, partnership, joint venture or entity of any
kind other than Enertech, (iii) conducts any business or operations, or (iv) has any obligations
or liabilities whatsoever, whether contractual or otherwise.




3.4 Subsidiaries. Other than the Enertech Subsidiary or as set forth on Schedule
3.4, Enertech (i) has no Subsidiaries and does not own any securities issued by any other business
organization or governmental authority, except government securities, bank certificates of deposit
and money market investments acquired as short-term investments in the ordinary course of its
business and (ii) does not own or have any direct or indirect ownership interest in or control
over any corporation, partnership, joint venture or entity of any kind. Enertech owns 100% of the
issued and outstanding capital stock of the Enertech Subsidiary, subject to no claim, right or
Lien in favor of third parties or otherwise. There are no outstanding subscriptions, options,
warrants, rights, commitments, preemptive rights or agreements of any kind for the issuance or
sale of, or outstanding securities convertible into, any shares of capital stock of the Enertech
Subsidiary. The Enertech Subsidiary is a New Jersey corporation duly organized, validly existing
and in good standing under the laws of the State of New Jersey with the requisite power and
authority (corporate or otherwise) to own or lease its properties and to conduct its business in
the manner and in the places where such properties are owned or leased or such business is
currently conducted or proposed to be conducted. The copies of the Enertech Subsidiary’s Articles
of Incorporation, as amended to date, and by-laws, as amended to date (or similar governing
documents), and heretofore delivered to the Buyer’s counsel, are complete and correct, and no
amendments thereto are pending.




3.5 Equity Interests; Beneficial Ownership.



(a) Enertech Equity Interest. The authorized capital stock of Enertech consists of
60,000,000 shares of Enertech Common Stock, of which 16,687,053 shares are issued and outstanding.
The Enertech Equity Interest represents 83% of the fully diluted capital stock of Enertech
(assuming an exchange rate of 1,000 Korean Won to one Dollar for the purpose of calculating the
number of shares of Enertech Common Stock to be issued under the outstanding bonds with warrants
issued by Enertech and held by TVG Saehan); is validly issued, fully paid and nonassessable; and is
owned solely by the TVG Entities, subject to no claim, right or Lien in favor of third parties or
otherwise other than as set forth on Schedule 3.5(a). Except as set forth on Schedule 3.5(a), there
are no outstanding subscriptions, options, warrants, rights, commitments, preemptive rights or
agreements of any kind for the issuance or sale of, or outstanding securities convertible into, any
shares of capital stock of any class of Enertech. None of Enertech’s capital stock has been issued
in violation of any Governmental Requirement. The term “fully diluted capital stock”, when used in
this Section 3.5(a), means (A) all shares of Enertech Common Stock outstanding as of the date of
this Agreement plus (B) all shares of Enertech Common Stock that are subject to any
securities, instruments or rights outstanding or issuable as of the date of this Agreement and
which entitle the holder thereof to receive, through conversion, exchange, exercise or otherwise,
such shares; provided, however, that such calculation shall not give effect to any shares of
Enertech Common Stock issuable pursuant to approximately 585,361 stock options currently
outstanding and due to expire on December 14, 2008 (the “Employee Options”). In the event that any
Employee Options are validly exercised prior to their expiration, the Sellers shall pay to the
Buyer an amount of cash equal to $0.61 per share of Enertech Common Stock (subject to adjustment
for stock splits, stock dividends and similar events) issued pursuant to such exercise. Such amount
shall be paid to the Buyer in cash, in shares of Ener1 Common Stock at a value equal to the greater
of (i) $7.20 per share (subject to adjustment for stock splits, stock dividends and similar events)
and (ii) the market value of the Ener1 Common Stock on the date such payment becomes due, or in any
combination of cash and such stock. For purposes of this Section 3.5(a), “market value” shall have
the meaning set forth in Section 9.5 hereof.



(b) TVG Equity Interest. The authorized capital stock of TVG Saehan consists of
15,718,836 shares, all of which are issued and outstanding. The authorized capital stock of TVG
SEI consists of a total of 400,010,000 shares comprising 10,000 ordinary shares, 200,000,000 Class
A preference shares and 200,000,000 Class B preference shares, of which 1,001 ordinary shares and
200,000,000 Class A preference shares are issued and outstanding. The TVG Equity Interest
represents 100% of the issued and outstanding capital stock of each TVG Entity; is validly issued,
fully paid and nonassessable; is owned solely by the Sellers, subject to no claim, right or Lien in
favor of third parties or otherwise; and, upon transfer of the TVG Equity Interest to the Buyer as
contemplated by the terms of this Agreement, the Buyer will acquire good and valid title to the TVG
Equity Interest, subject to no claim, right or Lien in favor of third parties or otherwise. There
are no outstanding subscriptions, options, warrants, rights, commitments, preemptive rights or
agreements of any kind for the issuance or sale of, or outstanding securities convertible into, any
shares of capital stock of any class of either TVG Entity. None of the capital stock of either TVG
Entity has been issued in violation of any Governmental Requirement.




3.6 Other Authorization. The Sellers have obtained all authorizations, consents,
approvals and permits required to permit the consummation by the Sellers of the Transaction, and
Schedule 3.6 contains a complete list of each such authorization, consent and permit.




3.7 Real Property; Personal Property; Title.



(a) Owned Real Property. Except as set forth on Schedule 3.7(a), none of Enertech or
either TVG Entity owns any Real Property. Enertech has good and marketable title to all Real
Property owned by it.



(b) Leased Real Property. All Real Property leased by Enertech or either TVG Entity
as tenant or lessee is identified on Schedule 3.7(b) (collectively, the “Leased Real Property).
All of the leases of any of the Leased Real Property, and any amendments thereto (collectively, the
“Leases”), are attached to Schedule 3.7(b), have been heretofore delivered or furnished by the
Sellers to the Buyer, and are complete, accurate, true and correct copies thereof. Enertech has a
valid and existing leasehold interest in, and enjoys peaceful and undisturbed possession in all
material respects of, the Leased Real Property, free and clear of all Liens that would materially
affect Enertech’s use of the Leased Real Property.



(c) Personal Property. Schedule 3.7(c) sets forth all Personal Property (i) owned by
Enertech or either TVG Entity that has a book value greater than KRW50,000,000 or its equivalent or
(ii) leased by Enertech or either TVG Entity for an annual lease payment greater than KRW10,000,000
or its equivalent. Enertech has valid title to all Personal Property set forth in paragraph (i)
of Schedule 3.7(c) and none of such Personal Property is subject to any Lien except as specifically
disclosed on Schedule 3.7(c).




3.8 Financial Statements.



(a) Enertech has previously delivered to the Buyer the following financial statements (the
“Financial Statements”) (copies of which are attached hereto as Schedule 3.8(a)): (i) an audited
consolidated balance sheet of Enertech for the fiscal year ended December 31, 2006 and statements
of income, retained earnings and cash flows for the period then ended prepared in accordance with
GAAP, including footnotes thereto, (ii) an audited consolidated balance sheet of Enertech for the
fiscal year ended December 31, 2007 and statements of income, retained earnings and cash flows for
the period then ended prepared in accordance with GAAP, including footnotes thereto, and (iii) an
unaudited consolidated balance sheet of Enertech as of June 30, 2008 (the “June Balance Sheet”) and
statements of income and retained earnings for the six-month period then ended prepared in
accordance with GAAP. The Financial Statements (x) are true, accurate and complete in all material
respects; and (y) present fairly and accurately in all material respects the financial condition of
Enertech as of the respective dates thereof and the results of operations, changes in stockholder’s
equity and cash flows of Enertech on a consolidated basis for the periods covered thereby (subject
to normal year-end adjustments).



(b) Except as set forth on Schedule 3.8(b), as of the date hereof, neither Enertech nor the
Enertech Subsidiary has any liabilities of any nature, whether accrued, absolute, contingent or
otherwise, asserted or unasserted (including without limitation liabilities as guarantor or
otherwise with respect to obligations of others, or liabilities for Taxes due or then accrued or to
become due or contingent or potential liabilities relating to activities of Enertech or the conduct
of its business prior to the Closing Date, regardless of whether claims in respect thereof had been
asserted as of such date), except liabilities (i) stated or adequately reserved against on the June
Balance Sheet, or (ii) incurred in the ordinary course of business.



(c) Except as set forth on Schedule 3.8(c), neither TVG Entity has any liabilities of any
nature whether accrued, absolute, contingent or otherwise, asserted or unasserted.




3.9 Taxes. Except as disclosed in Schedule 3.9:



(a) Each of Enertech and the Enertech Subsidiary has paid or caused to be paid all federal,
state, local, foreign, and other Taxes required to be paid by it through the date hereof.



(b) Each of Enertech and the Enertech Subsidiary has in accordance with Governmental
Requirements filed all federal, state, local and foreign Tax returns required to be filed by it
through the date hereof, and all such returns are true and correct in all material respects, except
for returns which are subject to dispute or extension for which Enertech has established adequate
reserves in accordance with GAAP, all of which are listed on Schedule 3.9. Enertech has delivered,
or will deliver prior to the Closing, to the Buyer copies of all income Tax returns filed by it or
the Enertech Subsidiary with any Governmental Authority for the past three (3) tax years, and of
all examination reports and statements of deficiencies assessed against or agreed to by Enertech
with respect to said returns.




3.10 Absence of Certain Changes. Except as disclosed in Schedule 3.10, since June
30, 2008, there has not been any change in the consolidated assets, liabilities, condition
(financial or otherwise), business or operations of Enertech which change by itself or in
conjunction with all other such changes, whether or not arising in the ordinary course of
business, has had or is reasonably likely to have a Material Adverse Effect on Enertech.




3.11 Intellectual Property.



(a) Schedule 3.11(a) sets forth a list of all Intellectual Property owned by and registered in
the name of Enertech or of which Enertech is the licensor or licensee, other than with respect to
“off-the-shelf” software which is generally commercially available and open source software which
may be subject to one or more “general public” licenses (“Excluded Software”).



(b) Enertech has ownership of, free and clear of Liens, claims or rights or any other Person,
with full right to use, sell, license, sublicense, dispose of, and bring actions for infringement
of, or possesses licenses or other rights to use, all Intellectual Property necessary for the
conduct of its business as presently conducted, other than (i) the Intellectual Property indicated
in Schedule 3.11(a) as co-owned with other Persons and (ii) Excluded Software. Other than such the
Intellectual Property indicated in Schedule 3.11(a) as co-owned and Excluded Software, all
Intellectual Property that is used or incorporated into Enertech’s services, products or services
or products actively under development and which are proprietary to Enertech were developed by or
for Enertech by the current or former employees, consultants or independent contractors of Enertech
or its predecessors in interest or purchased by Enertech or its predecessors in interest and are
owned by Enertech, free and clear of claims, rights or Liens of any other Person.



(c) Except as disclosed on Schedule 3.13, the operation of the Business as presently conducted
and the production, marketing, licensing, use and servicing of any products or services of Enertech
do not, to the Sellers’ knowledge, infringe or conflict with any patent, trademark, copyright, or
trade secret rights of any third parties or any other Intellectual Property of any third parties.




3.12 Contracts. All of the following contracts to which Enertech or either TVG
Entity is a party or is bound and which are currently in effect are described in reasonable detail
on Schedule 3.12 (true and complete copies of which have been delivered, or will be delivered
prior to Closing, to the Buyer):



(a) operating agreements, partnership agreements, shareholders agreements, voting trust
agreements and other agreements relating to the organization of Enertech or either TVG Entity;



(b) agreements relating to options, warrants, convertible bonds and other share subscription
rights to purchase Equity Securities of Enertech;



(c) agreements relating to credit facilities, loans, factoring arrangements, mortgages,
indentures and other financing arrangements on the part of Enertech;



(d) agreements relating to land, buildings and leasehold improvements owned by Enertech;



(e) agreements and policies relating to insurance for physical properties and assets used in
the Business;



(f) business purchase agreements, merger agreements, stock purchase agreements, right of first
refusal agreements and other agreements relating to the purchase or disposition of securities or
the Business;



(g) agreements with service providers, suppliers or vendors, each of which involves an annual
aggregate payment by Enertech in excess of KRW50,000,000 or its equivalent;



(h) agreements with customers or potential customers, which are material to the Business;



(i) employment, consulting and management agreements;



(j) bonus, severance, savings, pension, profit sharing, deferred compensation and other
similar agreements;



(k) agreements relating to financial and foreign exchange derivatives, including futures,
forwards and swaps; and



(l) all other agreements involving annual amounts payable to or by Enertech in excess of
KRW50,000,000 (or its equivalent) per year.




3.13 Litigation. Schedule 3.13 lists all currently pending or, to the Sellers’
knowledge, threatened claims in writing, litigation and governmental or administrative proceedings
to which Enertech, the Enertech Subsidiary or either TVG Entity is a party or which relate to its
assets or properties or the Business. No investigation by any governmental or administrative
authority is pending or to the Sellers’ knowledge threatened against Enertech, the Enertech
Subsidiary or either TVG Entity.




3.14 Compliance with Laws. Except as disclosed on Schedule 3.14, each of Enertech,
the Enertech Subsidiary and each TVG Entity is in compliance in all material respects with all
applicable material statutes, ordinances, orders, judgments, decrees and rules and regulations
promulgated or proposed by any Governmental Authority in connection with the operation of the
Business. Each of Enertech, the Enertech Subsidiary and each TVG Entity has timely filed all
reports, returns and filings required to be submitted by any such Governmental Authority, the
failure of which to file has had or would be reasonably likely to have a Material Adverse Effect.
None of Enertech, the Enertech Subsidiary or any TVG Entity has received written notice of a
violation or alleged violation of any such statute, ordinance, order, judgment, decree, rule or
regulation.




3.15 Brokerage. There are no liabilities or claims for brokerage commissions,
finders’ fees or similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement binding upon either Seller or any of its
Affiliates. Each Seller shall pay, and hold the Buyer harmless against, any liability, loss or
expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses)
arising in connection with any such claim..




3.16 Permits. Schedule 3.16 lists all permits required to be obtained by the
Sellers, Enertech or either TVG Entity from any Governmental Authority in order for Enertech or
the Enertech Subsidiary to conduct its Business, the failure of which to obtain has had or would
be reasonably likely to have a Material Adverse Effect on Enertech. All such permits have been
duly obtained and are valid and in full force and effect, and Enertech is operating in compliance
therewith.




3.17 Employee Benefit Programs. Except as disclosed in Schedule 3.17, none of
Enertech, the Enertech Subsidiary or either TVG Entity has, since December 31, 2007, maintained
for its Employees (as defined below) pension plans, medical plans, life or disability plans, stock
option plans, bonus or incentive award plans, severance pay policies or agreements, deferred
compensation agreements, supplemental income arrangements, or other material employee benefit
plans, agreements, or arrangements (collectively, the “Employee Programs”). For purposes of this
Section 3.17, an entity “maintains” an Employee Program if such entity sponsors, contributes to,
or provides (or has promised to provide) benefits under such Employee Program, or has any
obligation (by agreement or under applicable law) to contribute to or provide benefits under such
Employee Program.




3.18 Employees, Directors, Officers and Consultants.



(a) Employee Labor Matters. Neither Enertech nor the Enertech Subsidiary is
delinquent in payments to any of full-time employees on its payroll (collectively, “Employees”) for
any wages, salaries, commissions, bonuses or other direct compensation for any services performed
for it to the date hereof or amounts required to be reimbursed to such employees.



(b) Employees and Contracts. Except as required by applicable law, and except as
provided in (i) the employment agreements listed in paragraph 9 of Schedule 3.12 and (ii) paragraph
6 of Schedule 3.17, no Employee has been granted by Enertech, the Enertech Subsidiary or either TVG
Entity any contractual right that is currently in effect to continued employment or to any material
compensation following termination of employment with Enertech or the Enertech Subsidiary. The
Sellers have no knowledge that any director or Employee of Enertech who acts in a management
capacity intends to terminate his or her employment or other engagement with Enertech, nor does
Enertech have a present intention to terminate the employment or engagement of any such Person.



(c) Compensation. Enertech has delivered or will deliver to the Buyer, at or prior to
the Closing, a certificate (the “Employee Certificate”) which sets forth an accurate, correct and
complete list, as of the date hereof, of all Employees of Enertech and the Enertech Subsidiary,
including each such Person’s name, title and position and present annual compensation (including
bonuses, commissions and deferred compensation).



(d) Unions. Enertech has no collective bargaining agreements with any of its
Employees. To the Sellers’ knowledge, there is no labor union organizing or election activity
pending or threatened with respect to Enertech.




3.19 Insurance. The physical properties and assets used in connection with the
Business are insured pursuant to the insurance policies described in Schedule 3.19 (the
“Policies”) and Enertech has delivered to the Buyer true, correct and complete copies of all such
Policies. The policies are binding and in full force and effect, all premiums with respect thereto
are currently paid in accordance with their terms, and Enertech is in compliance in all material
respects with the terms thereof. The insured amounts represented by the Policies are in such
amounts and coverage that Enertech believes to be commercially reasonable for the Business and to
be sufficient for material compliance by Enertech with all Governmental Requirements and all
agreements and leases to which Enertech is a party. To the Sellers’ knowledge, no event has
occurred which, with notice or the lapse of time, would constitute a breach, or permit
termination, modification, or acceleration, of any such insurance policy.




3.20 Bank Accounts. Schedule 3.20 accurately sets forth, with respect to each
account maintained by or for the benefit of Enertech or the Enertech Subsidiary at any bank or
other financial institution:



(a) the name and location of the institution at which such account is maintained;



(b) the name in which such account is maintained and the account number of such account;



(c) a description of such account and the purpose for which such account is used;



(d) the balance in such account as of the second Business Day immediately prior to the date
hereof; and



(e) the names of all individuals currently authorized to draw on or make withdrawals from such
account.



There are no safe deposit boxes or similar arrangements maintained by or for the benefit of
Enertech or the Enertech Subsidiary.




3.21 Customers and Suppliers. Except as set forth on Schedule 3.21, since June 30,
2008, no Customer or Supplier of Enertech has canceled, materially modified, or otherwise
terminated its relationship with Enertech in writing or decreased materially its usage, purchase
or supply of the services or products of Enertech, nor does any Customer or Supplier have, to the
Sellers’ knowledge, any plan or intention to do any of the foregoing. For purposes of this
Section 3.21, (i) “Customer” means each customer of Enertech accounting for at least five percent
(5%) of Enertech’s revenue during the period of twelve (12) calendar months ending on June 30,
2008, and (ii) “Supplier” means each supplier or vendor accounting for at least KRW50,000,000 (or
its equivalent), of expenses during such period.



4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer hereby represents and warrants to each
Seller that all statements contained in this Section 4 are true and correct as of the date of this
Agreement:




4.1 Organization of the Buyer. The Buyer is a Florida corporation duly formed,
validly existing and in good standing under the laws of the State of Florida with full power to
own or lease its properties and to conduct its business in the manner and in the places where such
properties are owned or leased or such business is conducted or proposed to be conducted.




4.2 Authority of the Buyer; Enforceability. The Buyer has full authority and power
to enter into this Agreement and the other Transaction Documents to be executed and delivered by
the Buyer and to perform its obligations hereunder and thereunder. The execution, delivery and due
performance by the Buyer of this Agreement and the other Transaction Documents have been duly
authorized by all necessary action of the Buyer and no other action on the part of the Buyer is
required in connection herewith. This Agreement and the other Transaction Documents to be
executed and delivered by the Buyer constitute, or when executed and delivered by the Buyer, will
constitute, valid and binding obligations of the Buyer enforceable in accordance with their
respective terms.




4.3 Valid Issuance. Prior to the Closing, the Buyer will have taken all necessary
action to permit it to issue and deliver the Purchase Price Shares, to execute and deliver the
Warrants and to issue and deliver the Warrant Shares upon exercise of the Warrants. The Purchase
Price Shares, when issued and delivered pursuant to the terms of this Agreement, will be validly
issued, fully paid and non-assessable, subject to no material claim, right or Lien in favor of
third parties or otherwise. Upon delivery of the Purchase Price Shares to the Sellers as
contemplated by the terms of this Agreement, the Sellers will acquire good and valid title to the
Purchase Price Shares, subject to no material claim, right or Lien in favor of any third party or
otherwise. The Warrants, when issued and delivered pursuant to the terms of this Agreement, will
be validly issued, subject to no material claim, right or Lien in favor of third parties or
otherwise, The Warrant Shares, when issued and delivered pursuant to the terms of the Warrants,
will be validly issued, fully paid and non-assessable, subject to no material claim, right or Lien
in favor of third parties or otherwise.




4.4 Capital Structure of the Buyer. The authorized capital stock of the Buyer
consists of 150,714,286 shares of Ener1 Common Stock, of which 104,813,016 shares were outstanding
as of August 7, 2008. Except as set forth on Schedule 4.4, since August 31, 2008, the Buyer has
not issued any shares of its capital stock, other than stock options granted by the Buyer and the
            shares of Ener1 Common Stock issued pursuant to exercise of such options. As of the date hereof,
8,051,600 shares of Ener1 Common Stock are reserved for issuance upon the exercise of outstanding
options under Ener1’s Stock Option Plans and options for 4,132,727 shares of Ener1 Common Stock
have been granted and remain outstanding. As of the date hereof, and except as set forth in the
Buyer Reports, the Buyer has no outstanding options or rights to purchase or acquire any of its
capital stock, has no shares of preferred stock outstanding and has granted no rights to register
any of its securities for resale under the Securities Act to any Person. All of the outstanding
            shares of Ener1 Common Stock have been duly authorized and validly issued, and are fully paid and
non-assessable. Except as set forth in the Buyer Reports, there are no preemptive or other
outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption
rights, repurchase rights, agreements, arrangements or commitments of any character under which
the Buyer is or may become obligated to issue or sell any shares of capital stock or other equity
interests, or any securities or obligations exercisable or exchangeable for or convertible into
any shares of capital stock or other equity interests, of the Buyer, and no securities or
obligations evidencing such rights are authorized, issued or outstanding. The outstanding shares
of capital stock and other equity interests of the Buyer are not subject to any voting trust
arrangement or other contract, agreement or arrangement restricting or otherwise relating to the
voting, dividend rights or disposition of such stock or other equity interests. Other than with
respect to options granted to employees under the Ener1 Stock Option Plans, there are no phantom
stock or similar rights providing economic benefits based, directly or indirectly, on the value or
price of such stock or other equity interests of the Buyer.




4.5 Consents and Approvals. No consent, approval, waiver, authorization, notice or
filing is required to be obtained by the Buyer from, or to be given by the Buyer to, or made by
the Buyer with, any Governmental Authority (other than filings that may be required pursuant to
applicable Securities Laws, which filings (if any) will be made in a timely manner in connection
with the issuance of the Purchase Price Shares and the Warrants) or other Person in connection
with the execution, delivery and performance by the Buyer of this Agreement and the Transaction
Documents to which it is a party.




4.6 Non-Contravention. The execution, delivery and performance by the Buyer of this
Agreement and each of the Transaction Documents to which it is a party, the consummation of the
Transaction, and the issuance of the Purchase Price Shares and the Warrants do not and will not
(i) violate any provision of the articles of incorporation, bylaws or other similar organizational
documents of the Buyer, (ii) conflict with, or result in the breach of, or constitute a default
under, or result in the termination, cancellation, modification or acceleration (whether after the
filing of notice or the lapse of time or both) of any right or obligation of the Buyer under, or a
loss of any benefit to which the Buyer is entitled under, any contract, agreement or arrangement
to which it is a party or result in the creation of any Lien upon any of its assets or (iii)
assuming the receipt of all consents, approvals, waivers and authorizations and the making of
notices and filings required to be made or obtained by the Sellers, violate or result in a breach
of or constitute a default under any law to which the Buyer is subject.




4.7 Buyer Reports. The Buyer has timely filed with the SEC all registration
statements, reports, proxy statements or information statements required to be filed by the Buyer,
including (a) the Buyer’s Annual Report on Form 10-K for the fiscal year ended 2007 and (b) the
Buyer’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2008 and June 30, 2008 and
all other reports or documents required to be filed by the Buyer pursuant to Section 13(a) or
15(d) of the Exchange Act since the filing of the Buyer’s most recent Quarterly Report on Form
10-Q, all of which are publicly available on the SEC’s EDGAR system, were timely filed and have
been prepared in accordance, and comply, in all material respects with the applicable requirements
under the Securities Laws (collectively, the “Buyer Reports”).




4.8 Compliance with Laws. Each of the Buyer and its Subsidiaries is in compliance in
all material respects with all applicable material statutes, ordinances, orders, judgments,
decrees and rules and regulations promulgated or proposed by any Governmental Authority in
connection with the operation of its business. Each of the Buyer and its Subsidiaries has timely
filed all reports, returns and filings required to be submitted by any such Governmental
Authority, the failure of which to file has had or would be reasonably likely to have a Material
Adverse Effect on the Buyer. Neither the Buyer nor any of its Subsidiaries has received written
notice of a material violation or alleged violation of any such statute, ordinance, order,
judgment, decree, rule or regulation.




4.9 Litigation. Except as disclosed in the Buyer Reports, there are no actions,
suits, proceedings, orders or investigations pending or, to the Buyer’s knowledge, threatened
against or affecting the Buyer, at law or in equity, or before or by any court, tribunal,
governmental department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which would adversely affect the Buyer’s performance under this Agreement or the other
agreements contemplated hereby or the consummation of the transactions contemplated hereby or
thereby.




4.10 Brokerage. There are no liabilities or claims for brokerage commissions,
finders’ fees or similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement binding upon the Buyer or any of its Affiliates.
The Buyer shall pay, and hold the Sellers harmless against, any liability, loss or expense
(including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in
connection with any such claim.




4.11 Financing. The Buyer currently has sufficient financial capacity and financial
resources available to enable the Buyer to consummate the Transaction.



5. COVENANTS.




5.1 Exclusive Dealing.



(a) From the date hereof until the earlier of the Closing or the termination of this
Agreement, except for the co-sale rights to be given by TVG Saehan to the Institutional
Shareholders pursuant to the shareholders agreement dated September 14, 2007 between TVG Saehan and
the Institutional Shareholders, the Sellers (and their respective Affiliates) will not, and will
cause each TVG Entity not to, and will use all commercially reasonable efforts to ensure that their
respective officers, directors, employees, investment bankers, attorneys, accountants and other
agents do not, directly or indirectly: (i) initiate, solicit or encourage, or take any action to
facilitate any inquiries or the making of, any Proposal (as defined below) or offer which
constitutes or is reasonably likely to lead to any Proposal, or (ii) engage in negotiations or
discussions with, or provide any non-public information or data concerning Enertech or the Business
to, any Person (other than the Buyer or any of its Affiliates or representatives) relating to any
Proposal whether made before or after the date of this Agreement. From the date hereof until the
earlier of the Closing or the termination of this Agreement, Enertech may not propose to approve or
recommend any Proposal (other than the Transaction), or enter into any letter of intent, agreement
in principle, acquisition agreement or other similar agreement with respect to any Proposal (other
than the Transaction).



(b) As used in this Agreement, “Proposal” shall mean (1) any proposal for a merger,
consolidation or other business combination concerning Enertech or the Enertech Subsidiary, (2) any
proposal or offer to acquire in any manner, directly or indirectly, any part of the assets or
capital stock of Enertech or the Enertech Subsidiary, and (3) any proposal or offer with respect to
any recapitalization or restructuring concerning Enertech or the Enertech Subsidiary or any
proposal or offer with respect to any other transaction similar to any of the foregoing.




5.2 Operations. Until the earlier of the Closing or the termination of this
Agreement, the Sellers shall cause Enertech and the Enertech Subsidiary to operate the Business in
the ordinary course, consistent with past practice, and to refrain from selling, transferring or
creating or permitting any Lien on their respective assets, other than the sale of inventory in
the ordinary course of the Business or the imposition of any Permitted Liens.




5.3 Cooperation. The Sellers shall reasonably cooperate with the Buyer (which
cooperation shall include without limitation, using commercially reasonable efforts to provide the
Buyer with full access to the accountants, customers and suppliers of Enertech) in order to
provide the Buyer with the opportunity to conduct such inquiries of Enertech and the Business as
it deems necessary or appropriate prior to the Closing,




5.4 Satisfaction of Conditions. Each Party shall use its commercially reasonable best
efforts to satisfy in full all conditions required to be satisfied by it under this Agreement
prior to the Closing.




5.5 Expenses. Each Party shall bear its own expenses in connection with the
negotiation and preparation of this Agreement and the other Transaction Documents.




5.6 Sale of the Purchase Price Shares and the Warrant Shares. With a view to making
available to the Sellers the benefits of Rule 144 and any other rule or regulation of the SEC that
may at any time permit the Sellers to sell the Purchase Price Shares and the Warrant Shares
without registration, the Buyer shall file all reports required to be filed by it under the
Securities Act and the Exchange Act in a timely manner, comply with all requirements of the
American Stock Exchange and, upon the receipt from the Sellers of customary documentation with
respect thereto, instruct the Buyer’s transfer agent to process promptly such sale and provide any
information within the possession of the Buyer and necessary for such sale.




5.7 Registration Statement.



(a) Filing. On or before the seventy-fifth (75th) day following the Closing
Date, the Buyer shall prepare and file with the SEC a Registration Statement on Form S-3 (or, if
the Buyer is not then eligible to use Form S-3, such other form that is then available to the Buyer
for resales of its securities) as a “shelf” registration statement under Rule 415 covering the
resale of the maximum number of Registrable Securities permitted to be included in such
Registration Statement pursuant to any Governmental Requirement. The Registration Statement shall
state, to the extent permitted by Rule 416 under the Securities Act, that it also covers such
indeterminate number of additional shares of Ener1 Common Stock as may become issuable upon
exercise of the Warrants in order to prevent dilution resulting from stock splits, stock dividends
or similar events.



(b) Effectiveness. The Buyer shall use commercially reasonable efforts to cause the
Registration Statement to become effective on or before the forty-fifth (45th) day
following the filing thereof. The Buyer shall respond promptly to any and all comments made by the
staff of the SEC on the Registration Statement, and shall submit to the SEC, within three (3)
Business Days after the Buyer learns that no review of the Registration Statement will be made by
the staff of the SEC or that the staff of the SEC has no further comments on a Registration
Statement, as the case may be, a request for acceleration of the effectiveness of such Registration
Statement to a time and date not later than three (3) Business Days after the submission of such
request. The Buyer will maintain the effectiveness of the Registration Statement during the period
beginning on the date on which the Registration Statement is declared effective and ending on the
later of (i) the date on which no Purchase Price Shares or Warrant Shares (assuming cashless
exercise of the Warrant(s)) constitute Registrable Securities or (ii) the one-year anniversary of
the date on which the Registration Statement is declared effective (the “Registration Period”).



(c) Piggyback Registration. If at any time prior to the second anniversary of the
Closing Date, (i) the Buyer proposes to register shares of Ener1 Common Stock under the Securities
Act in connection with the public offering of such shares for cash (a “Proposed Registration”)
other than a registration statement on Form S-8 or Form S-4 or any successor or other forms
promulgated for similar purposes and (ii) a Registration Statement covering the sale of all of the
Registrable Securities is not then effective and available for sales thereof by the holders of
Warrants or Registrable Securities (each, a “Holder” and, collectively, the “Holders”), the Buyer
shall, at such time, promptly give each Holder written notice of such Proposed Registration. Each
Holder shall have ten (10) Business Days from its receipt of such notice to deliver to the Buyer a
written request specifying the amount of Registrable Securities that such Holder intends to sell
and such Holder’s intended method of distribution. Upon receipt of such request, the Buyer shall
use commercially reasonable efforts to cause all Registrable Securities which the Buyer has been
requested to register to be registered under the Securities Act to the extent necessary to permit
their sale or other disposition in accordance with the intended methods of distribution specified
in the request of such Holder; provided, however, that the Buyer shall have the right to postpone
or withdraw any registration effected pursuant to the terms hereof without obligation to the
Holders. In connection with any registered offering undertaken by the Buyer or by security
holders of the Buyer, if the managing underwriter(s) thereof, in the case of an underwritten
offering, shall request a limitation on the number of shares of Ener1 Common Stock which may be
included in a registration statement because, in the judgment of such underwriter(s), marketing,
regulatory or other factors dictate such limitation is necessary to facilitate such offering or, if
the number of shares to be included on such registration statement is limited by applicable law or
regulation, then the Buyer shall be obligated to include in the registration statement only such
amount of Registrable Securities with respect to which each Holder has requested inclusion
hereunder as such underwriter(s) shall permit, in the case of an underwritten offering, or as may
be lawfully included on such registration statement, where such amount is limited by law or
regulation. Any exclusion of Registrable Securities shall be made pro rata among the Holders
seeking to include Registrable Securities in a registration statement, in proportion to the number
of Registrable Securities sought to be included by such Holders; provided, however, that the Buyer
shall not exclude any Registrable Securities unless the Buyer has first excluded all outstanding
securities, the holders of which are not entitled to inclusion of such securities in the
registration statement or are not entitled to pro rata inclusion with the Registrable Securities;
and provided, further, that, after giving effect to the immediately preceding proviso, any
exclusion of Registrable Securities shall be made pro rata with holders of other securities having
the right to include such securities in the registration statement.



(d) Additional Registration Obligations of the Buyer. In connection with the
registration of Registrable Securities hereunder, the Buyer shall:




(i) notify each Holder, as promptly as practicable, of the effectiveness of the
Registration Statement;




(ii) use commercially reasonable efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus used in
connection with the Registration Statement as may be necessary to comply with the provisions
of the Securities Act or to maintain the effectiveness of the Registration Statement during
the Registration Period, or as may be reasonably requested by a Holder in order to
incorporate information concerning such Holder or such Holder’s intended method of
distribution;




(iii) prior to or as promptly as practicable following the Closing, use commercially
reasonable efforts to secure the listing of all Registrable Securities on the American Stock
Exchange (or such other principal exchange on which the Ener1 Common Stock is then listed);




(iv) furnish to each Holder such number of copies of the prospectus included in the
Registration Statement as such Holder may reasonably request in order to facilitate the
disposition of such Holder’s Registrable Securities;




(v) notify each Holder immediately after becoming aware of the occurrence of any event
as a result of which the prospectus included in the Registration Statement, as then in
effect, contains an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing (a “Disclosure Triggering Event”), and as promptly
as practicable thereafter prepare and file with the SEC a supplement or an amendment to, or
document to be incorporated into, such prospectus as may be necessary so that such
prospectus does not contain an untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;




(vi) provide to each Holder and its representatives the reasonable opportunity to
conduct, subject to confidentiality agreements reasonably acceptable to the Buyer, a
reasonable inquiry of the Buyer’s financial and other records during normal business hours
and make available its officers, directors and employees for questions regarding information
which such Holder may reasonably request in order to fulfill any due diligence obligation on
its part;




(vii) use commercially reasonable to register or qualify the Registrable Securities
covered by the Registration Statement under the Securities Laws of such jurisdictions in the
United States as shall be reasonably requested by a Holder; provided, however, that the
Buyer shall not be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any such jurisdiction;




(viii) in the event of any underwritten public offering by the Buyer, enter into and
perform its obligations under an underwriting agreement (which agreement shall be in a form
customary for similar underwritten public offerings) with terms reasonably satisfactory to
the managing underwriter of such offering, and participate in customary “road show”
presentations;




(ix) maintain a transfer agent and registrar and a CUSIP number for the Ener1 Common
Stock; and




(x) bear all expenses, other than underwriting discounts and commissions and fees and
expenses of counsel and other advisors to the Holders, incurred by the Buyer in connection
with the filings, registrations and qualifications described in paragraphs (a) through (d)
of this Section 5.7, including (without limitation) all registration, filing and
qualification fees, printers’ and accounting fees, and the fees and disbursements of counsel
for the Buyer.



(e) Obligations of each Holder. In connection with the registration of Registrable
Securities hereunder, and as a condition to the Buyer’s obligations under this Section 5.7, each
Holder shall:




(i) timely furnish to the Buyer in writing such information regarding itself and the
intended method of disposition of such Registrable Securities as the Buyer shall reasonably
request in order to effect the registration thereof;




(ii) upon receipt of written notice from the Buyer of the occurrence of a Disclosure
Triggering Event, immediately discontinue any sale or other disposition of such Registrable
Securities pursuant to such Registration Statement until such Holder has received notice
from the Buyer that such Disclosure Trigger Event no longer exists; provided, that (A) such
notice from the Buyer shall not effect any sale executed by a Holder prior to such Holder’s
receipt of such notice and (B) Buyer shall not engage in any transaction or activity which
would constitute or result in a Disclosure Triggering Event to the extent such Disclosure
Triggering Event would prevent any Holder from disposing of Registrable Securities for more
than ninety (90) days in any 12-month period;




(iii) to the extent required by applicable law, deliver a prospectus to the purchaser
of such Registrable Securities; and




(iv) notify the Buyer when it has sold, distributed or otherwise transferred all of the
Registrable Securities held by it pursuant to either the Registration Statement or Rule 144.



(f) Indemnification. In the event any Registrable Securities are included in a
Registration Statement under this Section 5.7:




(i) To the extent permitted by law, the Buyer shall indemnify and hold harmless each
Holder, the officers, directors and partners of each Holder, and each person, if any, who
controls such Holder within the meaning of the Securities Act or the Exchange Act, against
any losses, claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations (collectively a
“Violation”): (i) any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto; or (ii) the omission
or alleged omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading; and the Buyer will reimburse each
such Holder, officer, director or partner, underwriter or controlling person for any legal
or other expenses reasonably incurred by them, as incurred, in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the Buyer’s indemnity contained in this Section 5.7(f)(i) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Buyer (which consent shall not be
unreasonably withheld), nor shall the Buyer be liable in any such case for any such loss,
claim, damage, liability, or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written information furnished
in writing and expressly stated for use in connection with such registration by such Holder
or any person acting on such Holder’s behalf.




(ii) To the extent permitted by law, each Holder whose Registrable Securities are
included for resale on the Registration Statement will indemnify and hold harmless the
Buyer, each of its directors, each of its officers who have signed the Registration
Statement, each person, if any, who controls the Buyer within the meaning of the Securities
Act, against any losses, claims, damages or liabilities (joint or several) to which any of
the foregoing persons may become subject, under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder expressly stated in a writing
for use in connection with such registration; and each such Holder will reimburse any legal
or other expenses, as incurred, where such expenses are reasonably incurred by any person
intended to be indemnified pursuant to this Section 5.7(f)(ii), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section
5.7(f)(ii) shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the Holder, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing, the liability of
each Holder under this Section 5.7(f)(ii) shall be limited to an amount equal to the net
proceeds received by such Holder with respect to the shares sold by such Holder pursuant to
the Registration Statement.




(iii) Promptly after receipt by an indemnified party under this Section 5.7(f) of
notice of the commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 5.7(f), notify the indemnifying party in writing of the
commencement thereof, and the indemnifying party shall have the right to participate in and,
to the extent the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party shall have the right
to retain its own counsel, with the reasonable fees and expenses to be paid by the
indemnifying party (subject to the last sentence of Section 5.7(f)(ii)) if the indemnified
party reasonably determines that representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or potential
conflicts between such indemnified party and any other party represented by such counsel in
such proceeding. The failure to notify an indemnifying party within a reasonable time of the
commencement of any such action, to the extent prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the indemnified party
under this Section 5.7(f), but the omission so to notify the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise than under
this Section 5.7(f).




(iv) If the indemnification provided for in this Section 5.7(f) is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to any losses,
claims, damages or liabilities referred to herein, the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall to the extent permitted by applicable
law contribute to the amount paid or payable by such indemnified party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party, on the one hand, and of the indemnified party, on
the other, in connection with that which resulted in such loss, claim, damage or liability,
as well as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by a court of law by
reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party and the parties’ relative intent,
provided that in no event shall any contribution by a Holder pursuant to this Section
5.7(f)(iv) exceed the net proceeds received by such Holder with respect to the shares sold
by such Holder pursuant to the Registration Statement.




(v) The obligations of the Buyer and Holders under this Section 5.7(f) shall survive
the completion of any offering of Registrable Securities pursuant to a Registration
Statement under this Section 5.7.



(g) Assignment of Registration Rights. The rights to cause the Buyer to register the
resale of Registrable Securities pursuant to this Section 5.7 may be assigned by a Holder to a
transferee or assignee of Registrable Securities; provided, however, that such assignment shall be
effective only if immediately following such transfer the Buyer is given written notice thereof,
the transferee agrees in writing to be bound by the terms and conditions of this Agreement and such
transfer complies with the terms of this Agreement.




5.8 Legend. The Sellers acknowledge and agree that the certificates representing the
Securities may bear at issuance a restrictive legend in substantially the following form:




“The securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of
any state, and may not be offered or sold unless a registration statement under the
Securities Act and applicable state securities laws shall have become effective with
regard thereto, or an exemption from registration under the Securities Act and
applicable state securities laws is available in connection with such offer or
sale.”



Notwithstanding the foregoing, it is agreed that, if Securities have been sold pursuant to an
effective registration statement or pursuant to Rule 144, subject in the case of a sale pursuant to
Rule 144 to receipt by the Buyer of customary documentation reasonably satisfactory to the Buyer
and its legal counsel in connection therewith, such Securities shall be issued without any legend
or other restrictive language and, with respect to Securities upon which such legend is stamped,
the Buyer shall issue new certificates without such legend to the Holder upon request.




5.9 Limitations on Disposition. Each Seller agrees that it shall not sell, transfer,
assign or otherwise dispose of any Securities, unless:



(a) such proposed disposition is made pursuant to an effective Registration Statement under
the Securities Act and complies with the plan of distribution contained therein;



(b) if such proposed disposition is to a Person that owns or operates (i) a hedge fund or
substantially similar investment vehicle or (ii) a business that competes directly with the
Business, such Seller has delivered written notice thereof to the Buyer specifying the material
terms of such disposition and offering such Securities to the Buyer upon the same terms specified
in such notice; upon receipt of such notice, the Buyer shall have five (5) Business Days in which
to notify such Seller that it wishes to purchase all (but not less than all) of such Securities
upon such terms; in the event that the Buyer either does not respond to such notice within such
five Business Day period or declines in writing to purchase such Securities, such Seller may sell
such Securities to such Person upon the same terms specified in such notice (it being understood
that if such terms are amended or modified in any material respect so that they are less favorable
to such Seller, such Seller must reoffer such Securities to the Buyer in accordance with this
subparagraph (b) on such amended or modified terms prior to selling them to such Person);



(c) if such proposed disposition is made pursuant to an exemption from registration under the
Securities Act (other than pursuant to Rule 144), such Seller has furnished the Buyer with an
opinion of counsel, reasonably satisfactory to the Buyer, that such disposition will not require
registration of such Securities under the Securities Act; and



(d) if such proposed disposition is made pursuant to Rule 144, such Seller has furnished the
Buyer with documentation reasonably satisfactory to the Buyer and its legal counsel that the
proposed transaction satisfies the requirements of Rule 144.




5.10 Purchase of Minority Shares. For the avoidance of doubt, the Buyer acknowledges
and agrees that the Sellers shall have no liability or obligation in connection with the election
by the Institutional Shareholders to exercise the co-sale rights referred to in Section 5.1(a),
and will be indemnified and held harmless by the Buyer with respect thereto.




5.11 Name Change. Within one hundred and twenty (120) days after the Closing Date,
the Buyer shall change the names of the TVG Entities to remove “TVG” or any portion thereof from
such names.




5.12 Update of Disclosure Schedules. From time to time prior to the Closing, the
Sellers may supplement or amend the Schedules referred to in Section 3 solely for the purpose of
providing disclosure with respect to matters relating to the Enertech Subsidiary as long as such
matters have not had or would not be reasonably likely to have a Material Adverse Effect on
Enertech. The representations and warranties of the Sellers hereunder as of the date hereof and as
of the Closing Date shall be deemed to be made with and after giving effect to all such
supplements and amendments.



6. CONDITIONS.




6.1 Conditions to the Obligations of the Buyer. The obligation of the Buyer to
consummate this Agreement and the transactions contemplated hereby is subject to the fulfillment
(or waiver by the Buyer), prior to or at the Closing, of the following conditions:



(a) Representations, Warranties and Covenants. (i) All of the representations and
warranties of each Seller in this Agreement and in the other Transaction Documents to which such
Seller is a party shall be true and correct in all material respects as of the Closing Date; and
(ii) each Seller shall have performed, in all material respects, all covenants and obligations
contained in this Agreement or any of the other Transaction Documents to which such Seller is a
party required to be performed by such Seller as of the Closing.



(b) Consents. The Sellers shall have delivered to the Buyer copies of all filings
with and notifications of Governmental Authorities, regulatory agencies and other entities required
to be made by the Sellers, Enertech or either TVG Entity in connection with the execution and
delivery of this Agreement and the performance of the transactions contemplated hereby, which
filings and notifications are set forth on Schedule 6.1(b). The Sellers, Enertech and each TVG
Entity shall have received all required permits, authorizations, waivers and consents necessary for
the consummation of the Transaction, in form and substance reasonably satisfactory to the Buyer,
from all third parties, including, without limitation, applicable Governmental Authorities,
regulatory agencies, lessors, lenders, licensors and contract parties, which permits,
authorizations, waivers and consents are set forth on Schedule 6.1(b).



(c) Transfer Documents. The Buyer shall have received duly executed:




(i) original certificates representing the TVG Equity Interest registered in the name
of the Buyer;




(ii) landlord or lessor consents for the Real Property leases and Personal Property
leases to the extent required by the terms of such leases as a result of the Transaction;
and




(iii) such other specific instruments of sale, transfer, conveyance and assignment as
the Buyer may reasonably request.



(d) Opinion of Counsel. The Buyer shall have received from counsel for the Sellers an
opinion as of the Closing Date, in a form mutually agreed by the Buyer and the Sellers.



(e) Good Standing Certificates. The Sellers shall have delivered to the Buyer (i)
commercial registry extracts issued by the competent court registry and showing that Enertech has
legal existence and is in good standing, (ii) good standing certificates from the Secretary of
State for the State of New Jersey certifying that the Enertech Subsidiary has legal existence and
is in good standing and (iii) certificates issued by the appropriate Governmental Authority in the
relevant jurisdiction certifying that each TVG Entity has legal existence and is in good standing.



(f) Certificates.




(i) The Sellers shall have delivered to the Buyer a certificate of a duly authorized
officer of each Seller, Enertech, the Enertech Subsidiary and the TVG Entities,
respectively, dated as of the Closing Date which shall certify as to (and attach as copies)
(x) each such entity’s Memorandum and Articles of Association and By-laws (or similar
organizational documents) then in effect, (y) the board resolutions of each Seller and, to
the extent applicable, Enertech and the TVG Entities approving the terms of this Agreement
and the performance of its obligations hereunder and (z) the names of the officers of each
Seller authorized to sign this Agreement and the other documents, instruments or
certificates to be delivered pursuant to this Agreement by such Seller or any of its
officers, together with the true signatures of such officers.




(ii) Each Seller shall have delivered to the Buyer a certificate executed by the
president or chief executive officer (or person holding a similar position) of such Seller
certifying that the conditions specified in this Section 6.1 have been satisfied.



(g) Director Resignations. All members of the Board of Directors of Enertech, the
Enertech Subsidiary and the TVG Entities, respectively, shall have tendered irrevocable letters of
resignation to their respective companies as of the Closing Date, and the Sellers shall have
delivered to the Buyer copies of all letters of resignation delivered by such persons.




6.2 Conditions to Obligations of the Sellers. Each Seller’s obligation to consummate
this Agreement and the transactions contemplated hereby is subject to the fulfillment (or waiver
by such Seller), prior to or at the Closing, of the following conditions:



(a) Representations, Warranties and Covenants. (i) All of the representations and
warranties of the Buyer in this Agreement and in the other Transaction Documents to which the Buyer
is a party shall be true and correct in all material respects as of the Closing Date; and (iii) the
Buyer shall have performed, in all material respects, all covenants and obligations contained in
this Agreement or in any other Transaction Documents to which the Buyer is a party that are
required to be performed by the Buyer as of the Closing Date.



(b) Purchase Price. The Buyer shall have delivered the Purchase Price to the Sellers.



(c) Certificates.



(i) The Buyer shall have delivered to the Sellers a certificate of the Secretary of the Buyer
which shall certify (i) the resolutions adopted by the Board of Directors of the Buyer authorizing
the Buyer to consummate the Transaction, (ii) the Buyer’s Articles of Incorporation and Bylaws, and
(iii) the names of the officers of the Buyer authorized to sign this Agreement and the other
documents, instruments or certificates to be delivered pursuant to this Agreement by the Buyer or
any of its officers, together with the true signatures of such officers.



(ii) The Buyer shall have delivered to the Sellers a certificate executed on behalf of the
Buyer by its President or Chief Executive Officer, certifying that the conditions set forth in this
Section 6.2 have been satisfied.



(d) Opinion of Counsel. The Sellers shall have received from counsel for the Buyer an
opinion as of the Closing Date, in a form mutually agreed by the Buyer and the Sellers.



7. TERMINATION OF AGREEMENT.




7.1 Right to Terminate Agreement. This Agreement may be terminated at any time prior
to the Closing:



(a) by the mutual written agreement of the Sellers and the Buyer;



(b) by the Sellers or the Buyer, if the Closing has not occurred on or prior to October 31,
2008; provided, however, that the right to terminate this Agreement pursuant to this Section 7.1(b)
may not be exercised by a Party whose failure to perform or fulfill any of its obligations
hereunder has been the cause of, or resulted in, the failure of the Closing to occur on or before
such date;



(c) by the Sellers or the Buyer, if there shall be in effect any (i) final, non-appealable
injunction or binding order of any court or other tribunal having jurisdiction over either Seller,
the Buyer, the TVG Entities, the Enertech Subsidiary or Enertech that prohibits, enjoins or makes
the Transaction illegal or (ii) law or regulation that is enacted or adopted in final form, that
prohibits or makes the Transaction illegal;



(d) by the Buyer, upon breach in any material respect of any material representation, warranty
or covenant on the part of either Seller set forth in this Agreement, or if any material
representation or warranty of either Seller shall have become untrue in any material respect, in
either case such that the conditions set forth in Section 6.1 would not be satisfied; or



(e) by the Sellers, upon breach in any material respect of any material representation,
warranty or covenant on the part of the Buyer set forth in this Agreement, or if any representation
or warranty of the Buyer shall have become untrue in any material respect, in either case such that
the conditions set forth in Section 6.2 would not be satisfied.



Such right of termination shall be exercised by written notice of termination given by the
terminating Party to the other Parties hereto in the manner hereinafter provided.




7.2 Effect of Termination. Each Party’s right of termination under Section 7.1 is in
addition to any other rights it may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an exclusive election of remedies. If this Agreement is
terminated pursuant to Section 7.1, all further obligations of the Parties under this Agreement
will terminate, except that the obligations in Section 9.1 will survive.



8. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.




8.1 Survival of Representations and Warranties. The representations and warranties
made herein or in any schedule, exhibit, certificate or financial statement delivered incident to
the transactions contemplated hereby shall lapse and have no further force or effect from and
after May 15, 2009.




8.2 Payment of Taxes. Each Party shall be responsible for any Taxes assessed against
such Party in connection with the Transaction.




8.3 Tax Returns. After the Closing, the Buyer, on the one hand, and the Sellers, on
the other hand, will make available to the other, as reasonably requested, all information,
records or documents relating to the liability for Taxes of Enertech, the Enertech Subsidiary or
the TVG Entities for all periods or partial periods ending on or prior to the Closing Date and
will preserve such information, records or documents until the expiration of any applicable
statute of limitations or extensions thereof.



9. INDEMNIFICATION.




9.1 Indemnification by the Sellers.



(a) Indemnification Obligations. Subject to the provisions of Sections 9.1(b), 9.4
and 10.14 below, from and after the Closing, each Seller agrees, jointly and severally, to
indemnify and hold the Buyer and its subsidiaries and Affiliates and persons serving as officers,
directors, members, attorneys, stockholders, partners or employees thereof (collectively the “Buyer
Indemnified Parties”) harmless from and against any actual out-of-pocket damages, liabilities,
losses, taxes, fines, penalties, costs, and expenses (including, without limitation, reasonable
fees and expenses of counsel) of any kind or nature whatsoever (whether or not arising out of
third-party claims and including all reasonable amounts, paid in investigation, defense or
settlement of the foregoing), other than consequential, speculative, punitive or similar damages or
losses, which may be sustained or suffered by any of them arising out of or based upon any breach
by either Seller of any of its representations, warranties or covenants under this Agreement or any
of the other Transaction Documents, including, without limitation, any certificate, schedule,
exhibit or other instrument delivered pursuant hereto, to which either Seller is a party



(b) Limitations on Indemnification by the Sellers. Notwithstanding the foregoing, no
indemnification shall be payable pursuant to Section 9.1(a) (i) unless the total of all claims for
such indemnification exceeds the Indemnification Threshold, in which case the full amount of any
such claims shall be recoverable in accordance with the terms hereof or (ii) after indemnification
payments equal to the amount of the Indemnification Cap in the aggregate have been made. Any
amounts paid to a Buyer Indemnified Party pursuant to this Section 9.1 shall be returned to the
Sellers in the event that it is finally determined by a court of competent jurisdiction or an
arbitration tribunal that such Buyer Indemnified Party was not entitled to be indemnified
hereunder. In no event shall the Sellers be required to provide indemnification hereunder in an
aggregate amount greater than the Indemnification Cap. Any indemnification payments by a Seller
hereunder shall be made by wire transfer of immediately available funds to an account designated by
the Buyer.




9.2 Indemnification by the Buyer.



(a) Indemnification Obligations. Subject to the provisions of Section 9.2(b) below,
from and after the Closing, and in addition to any other rights and remedies the Seller may have
under this Agreement or pursuant to applicable law, the Buyer agrees to indemnify and hold each
Seller and its subsidiaries and Affiliates and persons serving as officers, directors, members,
attorneys, stockholders, partners or employees thereof (collectively the “Seller Indemnified
Parties”) harmless from and against any actual out-of-pocket damages, liabilities, losses, taxes,
fines, penalties, costs, and expenses (including, without limitation, reasonable fees and expenses
of counsel) of any kind or nature whatsoever (whether or not arising out of third-party claims and
including all reasonable amounts, paid in investigation, defense or settlement of the foregoing),
other than consequential, speculative, punitive or similar damages or losses, which may be
sustained or suffered by any of them arising out of or based upon any breach by the Buyer of any of
its representations, warranties or covenants under this Agreement or any of the other Transaction
Documents, including, without limitation, any certificate, schedule, exhibit or other instrument
delivered pursuant hereto, to which the Buyer is a party.



(b) Limitations on Indemnification by the Buyer. Notwithstanding the foregoing, no
indemnification shall be payable pursuant to Section 9.2(a) above (i) unless the total of all
claims for such indemnification exceeds the Indemnification Threshold, in which case the full
amount of any such claims shall be recoverable in accordance with the terms hereof or (ii) after
indemnification payments equal to the amount of the Indemnification Cap in the aggregate have been
made; provided, for the avoidance of doubt, that the Indemnification Cap shall not apply to the
Buyer’s obligation to deliver the Purchase Price pursuant to Section 2.2 hereof. Any amounts paid
to a Seller Indemnified Party pursuant to this Section 9.2 shall be returned to the Buyer in the
event that it is finally determined by a court of competent jurisdiction or an arbitration tribunal
that such Seller Indemnified Party was not entitled to be indemnified hereunder. Any
indemnification payments by the Buyer hereunder shall be made by wire transfer of immediately
available funds to an account designated by the Sellers.




9.3 Notice; Defense of Claims. An Indemnified Party may make claims for
indemnification hereunder by giving written notice thereof to the Indemnifying Party within the
period in which indemnification claims can be made hereunder. If indemnification is sought for a
claim or liability asserted by a third party, the Indemnified Party shall also give written notice
thereof to the Indemnifying Party promptly after it receives notice of the claim or liability
being asserted, but the failure to do so shall not relieve the Indemnifying Party from any
liability except to the extent that it is materially prejudiced by the failure or delay in giving
such notice. Such notice shall summarize the bases for the claim for indemnification and any
claim or liability being asserted by a third party. Within thirty (30) days after receiving such
notice the Indemnifying Party shall give written notice to the Indemnified Party stating whether
it disputes the claim for indemnification and whether it will defend against any third party claim
or liability at its own cost and expense. If the Indemnifying Party fails to give notice that it
disputes an indemnification claim within such thirty (30) day period, it shall be deemed to have
accepted and agreed to provide the indemnification required hereunder. The Indemnifying Party
shall be entitled to direct the defense against a third party claim or liability with counsel
selected by it (subject to the consent of the Indemnified Party, which consent shall not be
unreasonably withheld) as long as the Indemnifying Party is conducting a good faith and reasonably
diligent defense. The Indemnified Party shall at all times have the right to fully participate in
the defense of a third party claim or liability at its own expense directly or through counsel;
provided, however, that if the named parties to the action or proceeding include both the
Indemnifying Party and the Indemnified Party and the Indemnified Party is advised in writing by
its legal counsel that representation of both parties by the same counsel would be inappropriate
under applicable standards of professional conduct, the Indemnified Party may engage separate
counsel at the expense of the Indemnifying Party. If no such notice of intent to dispute and
defend a third party claim or liability is given by the Indemnifying Party, or if such good faith
and reasonably diligent defense is not being or ceases to be conducted by the Indemnifying Party,
the Indemnified Party shall have the right, at the expense of the Indemnifying Party, to undertake
the defense of such claim or liability (with counsel selected by the Indemnified Party). The
Indemnified Party shall make available such information and assistance as the Indemnifying Party
may reasonably request and shall cooperate with the Indemnifying Party in such defense, at the
expense of the Indemnifying Party. The Indemnifying Party shall not, in the defense of any third
party claim or litigation, enter into a consent or entry of judgment or enter into a settlement
that does not provide for a full and unconditional release of all liabilities on the part of the
Indemnified Party without the consent of the Indemnified Party, which consent will not be
unreasonably withheld.




9.4 Remedies. Except for (i) the indemnification provided for in Section 5.7(f) in
connection with a sale of Registrable Securities pursuant to a Registration Statement, (ii)
equitable relief pursuant to Section 10.14 and (iii) claims alleged to have occurred as the result
of fraud or intentional misconduct, the foregoing indemnification provisions are the sole and
exclusive remedy that any Party may have with respect to losses and other matters covered by or
arising out of this Agreement.




9.5 Payment of Indemnity Amounts by Sellers. Each Seller may make any indemnity
payment required to be made by it under Section 9.1 in cash, in shares of Ener1 Common Stock at a
value equal to the greater of (i) $7.20 per share (subject to adjustment for stock splits, stock
dividends and similar events) and (ii) the market value of the Ener1 Common Stock on the date such
payment becomes due, or in any combination of cash and such stock. For purposes of this Section
9.5, “market value” means, as of any date, the average closing bid price for the Ener1 Common
Stock on the American Stock Exchange (or such other principal exchange on which the Ener1 Common
Stock is then listed) during the period of five (5) trading days immediately prior to such date.




9.6 Limitations on Liability.



(a) Insured Claims. No liability for indemnification or otherwise shall attach to
either Seller in respect of any claim if and to the extent that such claim relates to any loss or
damage recoverable by the Buyer or any of the Buyer Indemnified Parties under any policy of
insurance or which would have been so recoverable but for any change in insurance coverage since
the Closing Date.



(b) Changes in Law. No liability for indemnification or otherwise shall attach to any
Party in respect of any claim to the extent that such claim would not have arisen (or the amount of
the claim would not have been increased) but for a change in legislation made after the date hereof
or a change in the interpretation of the law after the date hereof (whether or not such change
purports to be effective retrospectively in whole or in part).



(c) No Double Recovery. No Indemnified Party shall be entitled to recover damages or
obtain payment, reimbursement, restitution or indemnity more than once for or in relation to the
same loss, damage, deficiency or breach.



(d) Opportunity to Remedy. No liability shall attach to any Party in respect of any
claim if and to the extent that the breach giving rise to such claim is capable of remedy without
cost or loss to any Indemnified Party and is in fact remedied and such claim extinguished without
such cost or loss within thirty (30) days following (i) the date on which such Party received
notice from the Indemnified Party of such breach or (ii) if earlier, the date on which such Party
first became aware of such breach.



(e) Corresponding Benefit. In assessing any losses or other amounts for which an
Indemnified Party is entitled to indemnity hereunder, there shall be taken into account the value
of any benefit accruing to such Indemnified Party as a result of the resolution of the claim
pursuant to which such losses or other amounts became recoverable, including, without limitation,
the amount of any Tax relief obtained or obtainable by such Indemnified Party.



10. MISCELLANEOUS.




10.1 Fees and Expenses. Each of the Parties will bear its own expenses in connection
with the negotiation and the consummation of the transactions contemplated by this Agreement.




10.2 Governing Law; Jurisdiction; Venue. This Agreement shall be deemed to be a
contract made under, and shall be construed under and governed by the internal laws of the State
of New York, without regard for its conflict of law provisions. Subject to the provisions of
Section 10.3, (i) each of the parties hereto hereby agrees that the appropriate Courts of England
and Wales located in London, England shall have jurisdiction to hear and determine any claims or
disputes between the parties pertaining directly or indirectly to this Agreement, and all
documents, instruments and agreements executed pursuant hereto, or to any matter arising herefrom
(unless otherwise expressly provided for herein or therein); and (ii) to the extent permitted by
law, the parties hereby expressly submit and consent in advance to such jurisdiction in any action
or proceeding commenced in any of such courts, and agree that service of such summons and
complaint or other process or papers may be made by registered or certified mail addressed to the
Party at the address to which notices are to be sent pursuant to this Agreement. Each Party
waives any claim that London, England is an inconvenient forum or an improper forum based on lack
of venue. The prevailing Party in any such litigation is entitled to recover its reasonable
attorneys’ fees and costs.




10.3 Arbitration. Any dispute, controversy or difference arising between the Parties
out of or in relation to this Agreement or for the breach thereof shall be resolved exclusively by
arbitration in London, England. Such arbitration shall be conducted in the English language in
accordance with the Rules of Arbitration of the International Chamber of Commerce (“ICC”) by three
(3) arbitrators, of whom one shall be appointed by the Sellers, another shall be appointed by the
Buyer, and the third shall be appointed by the first two (2) arbitrators. If the third arbitrator
is not so appointed within one month after the appointment of the first two arbitrators, the third
arbitrator shall be selected in accordance with the rules of the ICC. The decision of the
arbitrators shall be made on the principles of majority rule. The award made by the arbitrators
shall be final and binding upon the Parties and may be enforced in any court of competent
jurisdiction. The prevailing Party in any such arbitration is entitled to recover its reasonable
attorneys’ fees and costs, including without limitation the cost of filing the arbitration claim.




10.4 Notices. Any notice, request, demand or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been given if delivered by
hand, upon receipt, if sent by registered or certified mail or by private courier or delivery in
person, upon the date on which receipt is acknowledged, or if sent by facsimile transmission, upon
confirmation of transmission thereof. All notices to a Party will be sent to the addresses set
forth below or to such other address or person as such Party may designate by notice to the other
Party hereunder:




TO BUYER:




Ener1, Inc.




c/o Ener1 Group, Inc.


1540 Broadway, Suite 25C


New York, NY 10036




Attn: Chief Executive Officer




Tel: (212) 920-3500


Fax: (212) 920-3510




	 	 	 	With a copy (which shall not






constitute notice) to:



Mazzeo Song & Bradham LLP



708 Third Avenue




New York, NY 10017




Tel: (212) 599-0700




Fax: (212) 599-8400




TO SELLERS:




c/o TVG Capital Partners Limited


16th Floor,


No. 8 Queen’s Road central,


Hong Kong


Attn: Varun Bery / Juyoung Kim


Tel: (852) 2800-6980/ (852) 2800-6960


Fax: (852) 2147-3320




	 	 	 	With a copy (which shall not






constitute notice) to:




Paul, Hastings, Janofsky & Walker



22nd Floor, Bank of China Tower



1 Garden Road, Central



Hong Kong



Attn: Neil Torpey



Tel: +852 2867 9902




Fax: +852 3192 9677



Any notice given hereunder may be given on behalf of any Party by such Party’s counsel or other
authorized representative.




10.5 Entire Agreement. This Agreement, including the schedules and exhibits referred
to herein and the other documents and agreements specifically identified herein or delivered in
connection herewith, is complete, reflects the entire agreement of the Parties with respect to its
subject matter, and supersedes all previous written or oral negotiations, commitments and writings
with respect to its subject matter.




10.6 Assignability; Binding Effect. The rights and obligations hereunder shall not
be assigned by a Party without the prior written consent of the other Parties. This Agreement
shall be binding upon and enforceable by, and shall inure to the benefit of, the Parties and their
respective successors and permitted assigns.




10.7 Press Releases and Announcements. Except as otherwise required by applicable
law, prior to the Closing, any press releases related to this Agreement or the Transaction, or
other announcements to the employees, customers, suppliers, vendors or service providers of
Enertech or the Enertech Subsidiary will be issued jointly by the Sellers and the Buyer and only
with the prior written consent (not to be unreasonably withheld, delayed or conditioned) of the
Sellers and the Buyer. The Parties acknowledge that, upon the execution and delivery of this
Agreement, the Buyer will be required under applicable law to file a Form 8-K with the SEC
describing the terms of this Agreement and the Transaction and including this Agreement as an
exhibit.




10.8 Confidentiality. The Buyer and the Sellers shall, prior to the Closing, and the
Sellers shall, at all times following the Closing, use their respective best efforts to maintain
(and cause their respective Affiliates and representatives to maintain) the confidentiality of all
proprietary and other non-public information regarding Enertech and the Enertech Subsidiary,
except as required to file Tax returns and as required by law upon the written advice of counsel.
In the event that any Party reasonably believes upon the written advice of counsel that it is
required by law to disclose any confidential information described in this Section 10.8 the
disclosing Party will (i) provide the other Parties with prompt notice before such disclosure in
order that such other Parties may attempt to obtain a protective order or other assurance that
confidential treatment will be accorded such confidential information and (ii) use commercially
reasonable efforts to cooperate with the other Parties in attempting to obtain such order or
assurance. The provisions of this Section 10.8 shall not apply to any information, documents or
materials which are, as shown by appropriate written evidence, in the public domain or, as shown
by appropriate written evidence, shall come into the public domain, other than by reason of
default by the applicable Party bound hereunder or its Affiliates.




10.9 Waiver of Conflict of Interest. Each Party hereby acknowledges and confirms
understanding of the actual and potential conflicts of interest arising from Kim, Chang & Lee’s
current and past representations of Enertech and all Parties in the Transaction and other matters
and, after consultation with respective counsel, hereby waives any actual or potential conflicts
of interest associated with such representation of Enertech and both Parties in connection with
the Transaction, any ancillary matters and any and all other matters; provided, however, that such
waiver relates solely to such conflicts of interest and not to any other claim(s).




10.10 Captions. The captions in this Agreement are for convenience only and shall
not affect the construction or interpretation of any term or provision hereof.




10.11 Execution in Counterparts. For the convenience of the Parties and to
facilitate execution, this Agreement may be executed in two or more counterparts and may be
executed and delivered by facsimile or electronic transmission of a “pdf” file, each of which
counterparts shall be deemed an original, but all of which shall constitute one and the same
document.




10.12 Amendments. This Agreement may not be amended or modified, and no provision
hereof may be waived, except in a writing duly and validly executed by the Buyer and TVGAC. Any
waiver shall be effective only in the specific instance and for the specific purpose for which
given.




10.13 No Third Party Beneficiaries. No provision of this Agreement or any other
agreement or instrument entered into or executed in connection herewith is intended to create any
right of, or obligation to, any third party other than the Buyer and the Sellers, except to the
extent specifically provided in Section 5.7(f) and Section 9 of this Agreement with respect to the
Persons indemnified thereunder.




10.14 Equitable Remedies. It is specifically understood and agreed that a breach of
any covenant contained in this Agreement by the Party required to comply with such covenant will
result in irreparable injury to the other Party, that the remedy at law alone may be an inadequate
remedy for such breach, and that, in addition to any other remedies which they may have at law or
in equity, such other Party may enforce its rights by actions for specific performance and to seek
both temporary and permanent injunctive relief, without the necessity of proving actual damages,
but without limitation of its rights to recover such damages.




10.15 Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be deemed prohibited or invalid under such applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision or the other
provisions of this Agreement.




10.16 Interpretation. As used in this Agreement, references to the singular will
include the plural and vice versa. Unless otherwise expressly provided in this Agreement the
words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement
will refer to this Agreement as a whole and not to any particular provision of this Agreement.
The headings in this Agreement are included for convenience of reference only and will not affect
in any way the meaning or interpretation of this Agreement.




10.17 Construction. The Parties participated jointly in the negotiation and
preparation of this Agreement and the other Transaction Documents and no provision of this
Agreement shall be construed against any Party as the drafter hereof.



1




[Remainder of Page Intentionally Left Blank]




IN WITNESS WHEREOF the parties hereto have caused this Purchase Agreement to be executed as of
the date set forth above by their duly authorized representatives.




BUYER:




ENER1, INC.




By:

Name:

Title:





SELLERS:




TVG ASIAN COMMUNICATIONS FUND II, L.P.




By:      

Name:

Title:





ROSEBUD SECURITIES LIMITED




By:      

Name:

Title:





2