Document:

Exhibit 10.5

 

EXECUTION
VERSION

 

May 15,
2022

 

Dragonfly Energy Corp. 

1190 Trademark Dr. #108 

Reno, Nevada 89521

 

Chardan NexTech Acquisition 2 Corp. 

17 State Street, Suite 2130 

New York, NY 10004

 

Re:         ChEF
Proposal – Establishment of Chardan Equity Facility

 

In connection with the transactions contemplated
by the Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), by and among Chardan
NexTech Acquisition 2 Corp. (the “SPAC”), Bronco Merger Sub, Inc. and Dragonfly Energy Corp. (the “Target”),
CCM Investments 5 LLC (the “Investor”) is pleased to present to the SPAC and the Target the Summary of Indicative
Terms for the establishment of a Chardan Equity Facility (ChEF) (the “Facility”) attached hereto as Exhibit A
(the “Term Sheet” and, together with this letter agreement, this “Letter Agreement”).
The Investor, the SPAC and the Target are collectively referred to in this Letter Agreement as the “Parties.”
Capitalized terms used, but not defined, in the body of this Letter Agreement shall have the respective meanings assigned to them in the
Term Sheet.

 

1.            Definitive
Documentation. The Target and the SPAC hereby agree, prior to the Closing, to enter into the Definitive Documentation with the Investor
on terms that are (i) consistent with this Letter Agreement and (ii) customary for documentation of this nature.

 

2.            No
Specified Transactions. Following the execution of this Letter Agreement, the Issuer shall not effect or enter into an agreement to
effect any issuance of shares of Common Stock or any securities of the Issuer or its subsidiaries which entitle the holder thereof to
acquire at any time any shares of Common Stock (“Common Stock Equivalents”), or any combination thereof, or
effect or enter into an agreement to effect a Specified Transaction, in each case other than in connection with an Exempt Issuance. The
Investor shall be entitled to seek injunctive relief against the Issuer and its subsidiaries to preclude any such issuance, which remedy
shall be in addition to any right to collect damages, without the necessity of showing economic loss and without any bond or other security
being required. “Specified Transaction” means a transaction in which the Issuer (i) issues or sells any
securities with a conversion price, exercise price, exchange rate or other price or rate that is based upon and/or varies with the trading
price of shares of Common Stock after the date of issuance; (ii) issues or sells any securities at a price, or with a conversion
price, exercise price, exchange rate or other price or rate, that is subject to being reset after the date of issuance of such security
or upon the occurrence of specified or contingent events; (iii) issues or sells any securities that are subject to or contain any
put, call, redemption, buy-back, price reset or other similar provision or mechanism (including a “Black-Scholes” put or call
right) that provides for the issuance of additional equity securities of the Issuer or the payment of cash by the Issuer or (iv) enters
into any agreement, including, but not limited to, an “equity line of credit” or “at-the-market” or other continuous
offering or similar offering of shares of Common Stock or Common Stock Equivalents, whereby the Issuer may sell shares of Common Stock
or Common Stock Equivalents at a future determined price, in each case, other than with the Investor or its affiliates. “Exempt
Issuance” means the issuance of (a) shares of Common Stock, options or other equity incentive awards to employees,
officers, directors or vendors of the Issuer pursuant to any equity incentive plan duly adopted for such purpose, by the Issuer’s
board of directors (the “Issuer’s Board”) or a majority of the members of a committee of the Issuer’s
Board established for such purpose, (b) (1) any shares of Common Stock issued to the Investor, Chardan NexTech Investments 2
LLC (the “Sponsor”), Chardan Capital Markets, LLC (“Chardan Capital Markets”), Chardan
NexTech 2 Warrant Holdings LLC (“Chardan NexTech 2 Warrant Holdings” and together with the Sponsor and Chardan
Capital Markets, the “Chardan Entities”) or any of their respective affiliates or members pursuant to the Definitive
Documentation, (2) any securities issued upon the exercise or exchange of or conversion of any shares of Common Stock or Common Stock
Equivalents held by the Investor, the Chardan Entities or any of their respective affiliates or members at any time, or (3) any securities
issued upon the exercise or exchange of or conversion of any Common Stock Equivalents issued and outstanding, or for which agreements
to issue are in effect, as of the date hereof, provided that such securities have not been amended since the date hereof to increase the
number of such securities or to decrease the conversion price, exercise price, exchange rate or other price or rate, (c) securities
issued pursuant to acquisitions, divestitures, licenses, partnerships, collaborations or strategic transactions approved by the Issuer’s
Board or a majority of the members of a committee of the Issuer’s Board established for such purpose which can have a Specified
Transaction component provided that any such issuance shall only be to an operating company or an asset in a business synergistic with
the business of the Issuer and shall provide to the Issuer additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Issuer is issuing securities primarily for the purpose of raising capital or to an entity whose primary business
is investing in securities, or (d) shares of Common Stock issued by the Issuer by any method deemed to be an “at-the-market
offering” as defined in Rule 415(a)(4) under the Securities Act, exclusively to or through a registered broker dealer.

 

     

     

    

 

3.            Documentation
Fee. The Target shall pay the Investor a $50,000 fee upon execution of this Letter Agreement.

 

4.            Expenses.
The Target will pay all reasonable and documented out-of-pocket expenses and fees, including reasonable and documented legal fees and
expenses, of the parties related to the negotiation and execution of the Facility.

 

5.            Confidentiality.
This Letter Agreement shall be strictly confidential among the Investor, the SPAC and the Target and their respective advisors and shall
not be disclosed, in whole or in part, by the SPAC or the Target to any other person. Notwithstanding the foregoing, the SPAC and the
Target may disclose and (if agreed) file this Letter Agreement in connection with the public announcement of the Merger Agreement and
the transactions contemplated thereby and related SEC filings.

 

6.            Termination.
In the event that the Merger Agreement is terminated without the Closing having occurred, then this Letter Agreement shall automatically
terminate without further action or notice.

 

7.            Assignment.
This Letter Agreement shall not be assignable by the Target or the SPAC, by operation of law or otherwise, without the written consent
of the other Parties (and any purported assignment without such consent shall be null and void). The Investor may assign its rights and
obligations under this Letter Agreement to one or more of its affiliates.

 

8.            Counterparts.
This Letter Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page of this Letter Agreement by facsimile transmission
shall be effective as a delivery of a manually executed counterpart hereof.

 

9.            Entire
Agreement and Amendments. This Letter Agreement is the only agreement that has been entered into among the Parties with respect to
the Transactions and set forth the entire understanding of the Parties with respect thereto. This Letter Agreement may not be amended
or waived except by an instrument in writing signed by the Parties.

 

10.          Governing
Law; Waiver of Jury Trial; Jurisdiction. THIS LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION PERTAINING THERETO OR ARISING IN CONNECTION THEREWITH, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, (B) CONSENTS AND AGREES
THAT THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY STATE COURTS SITTING IN NEW YORK CITY, SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG ANY OF THE PARTIES PERTAINING TO OR ARISING IN CONNECTION THEREWITH,
PROVIDED, THAT THE PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF SUCH
JURISDICTION, (C) CONSENT TO SUCH JURISDICTION FOR ANY ACTION COMMENCED IN ANY SUCH COURT, AND (D) WAIVE ANY OBJECTIONS BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR INCONVENIENT FORUM.

 

[Signature Page Follows]

 

    2

     

    

 

Please indicate your agreement with the terms of
this Letter Agreement by signing a copy in the space provided and returning it to the undersigned.

 

	 	Very truly yours,

 

	 	CCM INVESTMENTS 5 LLC

 

	 	By:	/s/ Jonas Grossman

	 	Name: Jonas Grossman
	 	Title: Manager

 

Agreed and Accepted as of: 

May 15, 2022

 

TARGET:

 

Dragonfly Energy Corp.

 

	By:	/s/ Denis Phares 	 

	Name: Denis Phares 	 
	Title: Chief Executive Officer	 

 

SPAC:

 

Chardan NexTech Acquisition 2 Corp.

 

	By:	/s/ Jonas Grossman 	 

	Name: Jonas Grossman 	 
	Title: Chief Executive Officer	 

 

     

     

    

 

EXHIBIT A

 

Summary of Indicative Terms

 

See attached.

 

     

     

    

 

Chardan NexTech Acquisition 2 Corp.

 

Committed Equity Facility

 

May 15, 2022

 

Summary of Indicative Terms

 

$150MM Chardan Equity Facility (ChEF)

 

	Provision	Description
	SPAC:	Chardan NexTech Acquisition 2 Corp.
	Investor:	A newly formed entity by Chardan Capital Markets LLC (“Chardan”) or an existing affiliate of Chardan (the “Investor”).
	Issuer:	Entity that will be the post-business combination public company (the “Issuer”).
	Facility:	A three-year standing equity facility (the “Facility”) to enable the Issuer to raise a total of up to $150MM (the “Aggregate Commitment Amount”) from time to time as it elects, subject to the terms of the Facility, by putting shares (the “Facility Shares”) of its common stock (the “Common Stock”) to the Investor at then-current pricing, as specified further below. 
	
    Purchase
    Price of Facility Shares:

     
	
    VWAP on the Purchase Date (each as defined below), less three and one-half
    percent (3.5%).

     

    “VWAP” means the volume-weighted average
price of the shares of Common Stock on the applicable trading day(s), adjusted to exclude block trades and trades that individually exceed
20,000 shares.

	
    Put Right:

     

     
	
     Subject to the terms of the Definitive
Documentation, the Issuer has the right, from time to time at its discretion, to require (a “Put”) the Investor
to purchase shares of Common Stock up to the Aggregate Commitment Amount. The Issuer will initiate a Put by delivering, during the morning
prior to market open on any trading days it chooses (each, a “Purchase Date”), notice to the Investor specifying
the number of Facility Shares (the “Target Number”) to be purchased by the Investor on that trading day. The
Investor must purchase the Target Number of Facility Shares on the Purchase Date; provided that the Investor will not be obligated to
(but may, at its option, choose to) purchase Facility Shares to the extent such purchase: (a) would exceed 20% of the number of
shares of the Common Stock that would count towards VWAP on that date, (b) would cause the aggregate purchase price for that trading
day’s Put to exceed $3MM or (c) would cause the Investor, together with its affiliates, to exceed 9.9% beneficial ownership,
as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder; provided, further,
that in such case the number of Facility Shares so required to be purchased will be cut back so as to avoid triggering any of the events
in (a), (b) or (c). Promptly following the close of trading on the Purchase Date, Investor will deliver to Issuer a notice
(the “Confirmation”) confirming the total number of Facility Shares purchased on that date and their aggregate
purchase price.

     

    Any unsold portion of the Facility will
    remain outstanding so that further Puts may be initiated by the Issuer. For the avoidance of doubt, the Investor shall not be
    required to purchase any Facility Shares except to the extent that they are eligible to be resold pursuant to a Registration
    Statement (as defined below) that is at such time effective and available and FINRA, as applicable, has provided its no-objection
    letter, and subject to the other conditions specified in the Definitive Documentation.

 

     

     

    

 

	Provision	Description
	Term of Facility:	
    The Facility shall remain outstanding until three years following the
    later of (i) the business combination closing (the “Closing”) and (ii) the effective date of the Registration
    Statement, unless terminated earlier upon reasonable prior notice by the Issuer or as otherwise set forth in the Definitive Documentation
    (which shall only include customary termination provisions).

     

    In the event the merger agreement relating to the business combination
(the “Merger Agreement”) is terminated without the Closing having occurred, the Definitive Documentation (if
executed earlier) shall automatically terminate.

	Definitive Documentation:	
    The purchase agreement and registration rights agreement (collectively,
the “Definitive Documentation”) will include customary conditions, representations and warranties, registration
rights (as described herein) and other covenants and indemnities. The Definitive Documentation will also contain customary termination
rights and suspension events with respect to the Investor’s purchase obligation.

	Commitment Fee:	
    On the earlier of (a) the thirtieth (30th) trading
day following the Closing and (b) the effective date of the Registration Statement, the Issuer shall issue to the Investor a number
of shares of Common Stock (the “Commitment Shares”) equal to the quotient obtained by dividing $1MM by the
VWAP of the Issuer’s shares of common stock for the immediately prior five (5) trading days. The Commitment Shares will be
registered for resale on the Registration Statement, but will be subject, if required by the FINRA rules, to a lock-up period of six
(6) months.

	Registration of Shares:	
    The Definitive Documentation shall provide that, within thirty (30)
    calendar days following the Closing, the Issuer shall file with the SEC, and use commercially reasonable efforts to have declared effective
    as promptly as practicable thereafter, a resale registration statement registering the resale by the Investor (a “Registration
    Statement”) of the Commitment Shares and the Facility Shares; provided that the total number of shares registered in connection
    with the Facility will not exceed 19.99% of the total number of shares of Common Stock outstanding as of the execution of the Definitive
    Documentation.

     

    Commencement of the Facility and effectiveness of the Registration
    Statement are subject to receipt of a no-objection letter from FINRA. The Issuer shall be required to keep the Registration Statement
    effective for at least one year following the full term of the Facility.

     

    The Definitive Documentation shall provide for the Issuer to include
    the requisite disclosure in the Registration Statement and provide customary deliverables to the Investor for an underwritten offering
    of securities, including due diligence, legal opinions and comfort letters and related plan of distribution disclosure.

 

     

     

    

 

	Provision	Description
	Settlement:	
    The transfer agent and the Issuer will deliver the total number
of Facility Shares specified in the Confirmation on a T+1 basis; the Definitive Documentation will specify remedies, including customary
penalties, for lack of settlement by T+2.

	Conditions Precedent to Purchases of Facility Shares:	
    Conditions precedent include, among other things, completion of
customary due diligence for facilities of this type, preparation and execution of Definitive Documentation reasonably acceptable to both
parties and Dragonfly Energy Corp. (the “Target”), filing and maintaining effectiveness of the Registration
Statement, and no-objection clearance from FINRA (which the Investor will promptly obtain). 

	No Specified Transactions:	
    The Definitive Documentation will include the provision contained
in paragraph 2 of the letter agreement, dated May 15, 2022, by and among the SPAC, the Target and the Investor, which provision
shall be stated to apply from and after the date of the Definitive Documentation until the three-year anniversary of the Definitive Documentation.ex_372550.htm

Exhibit 10.1

 

CONSULTING AGREEMENT

 

This Consulting Agreement (“Agreement”) is entered into by and between Fredric Starker (the “Consultant”) and NewLake Capital Partners (the “Company”), each a “Party,” and collectively, “the Parties.”

 

RECITALS

 

WHEREAS, the Consultant’s employment with the Company will terminate as a result of Consultant’s resignation effective June 13, 2022; and

 

WHEREAS, effective on the Effective Date (as defined below), the Company desires to engage the Consultant to perform certain Services (as defined below), and the Consultant desires to be so engaged, as an independent contractor; and

 

WHEREAS, the Company and the Consultant desire to enter into this Agreement in order to set forth the terms and conditions under which the Consultant will provide such Services.

 

NOW, THEREFORE, in consideration of the promises and mutual agreements herein contained, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Company and the Consultant hereby agree as follows:

 

1.    Term. This Agreement and the Consultant’s Engagement hereunder shall commence on June 14, 2022 (the “Effective Date”), and end on the earlier of (a) August 13, 2022 (the “Term”) or (b) the date this Agreement is terminated pursuant to the provisions of Section 7.

 

2.    Services. Effective on the Effective Date, the Company hereby engages Consultant to serve in the capacity of an independent contractor to the Company under the terms of this Agreement (the “Engagement”) to provide accounting, reporting, financial operations and tax advice, in support of transitioning the Chief Financial Officer responsibilities to NewLake’s new Chief Financial Officer as requested from time to time by the Company’s Chief Executive Officer and/or his designee (the “Services”). The Parties’ expectation is that the Consultant will not be required to provide Services more than 40 hours per month.

 

3.    Services Fee. The Company shall pay the Consultant a fee of $12,500 per month (the “Services Fee”). Such Services Fee shall be payable monthly during the Term and shall be pro-rated for any partial month during the Term.

 

4.    Expenses. The Services Fee is intended to cover, and the Company shall not reimburse Consultant for, any expenses incurred by Consultant in connection with providing the Services as contemplated herein; provided, however, that upon the Consultant’s written request and the Company’s advance approval, and with reasonable supporting documentation, travel expenses, including, without limitation, transportation, food, and lodging, incurred in connection with attending Company approved meetings related to the Services shall be reimbursed by the Company. The Company is not providing Consultant with an office, a computer, a Company car, a Company email account, or any other office supplies or equipment. Although there may be certain Services that by their nature require they be performed at specified locations, generally, Consultant is free to provide the Services wherever Consultant sees fit consistent with the reasonable delivery of the Services described herein.

 

 

 

 

5.    Independent Contractor. It is expressly agreed that the Consultant is acting as an independent contractor in performing the Services hereunder. The Parties understand and agree that, so long as the Consultant performs the Services in a timely manner and in accordance with reasonable industry standards and the provisions set forth herein, the Consultant shall control and direct the performance of the Services and shall perform the Services in an independent and professional manner. Moreover, the Parties hereunder recognize that this Agreement does not create any actual or apparent agency, partnership, or relationship of employer and employee between the Parties. The Consultant shall not have any authority to enter into or commit the Company or its subsidiaries or affiliates to any agreements or bind the Company or its subsidiaries or affiliates by any promise or representation. The Consultant will not represent herself as the agent or legal representative of the Company or any of its subsidiaries or affiliates. The Company will carry no worker’s compensation insurance or any health or accident insurance coverage on the Consultant, and the Consultant will not be entitled to participate in any of the Company’s benefit plans including, without limitation, any health or retirement plans. Because the Consultant is providing Services hereunder as an independent contractor, it is understood and agreed that the Company will not withhold any amounts for payment of taxes from the Services Fee. The Consultant agrees that the Consultant shall be solely responsible for the full and timely payment of any and all taxes, liabilities, and assessments of any kind in any way arising out of or relating to the Consultant’s receipt of the Services Fee, including without limitation, social security, unemployment insurance, gross receipts taxes, withholding taxes, worker’s compensation insurance, and income taxes. The Consultant hereby agrees to fully and timely comply with all federal, state, and local laws, regulations, and rules relating to such taxes, liabilities, and assessments. The Consultant agrees further to indemnify and hold the Company and its subsidiaries and affiliates and its and their directors, officers, employees, and agents harmless from any breach by the Consultant of the provisions of this paragraph. The Consultant understands and acknowledges that the Company is not providing Consultant with tax advice with respect to this Agreement or any other aspect of the Engagement.

 

6.    Non-Exclusivity. The Parties agree that, during the Term of this Agreement, the Consultant is permitted to provide services to or work for another business entity so long as (a) any such services or work for such other business entity do not interfere with or otherwise limit the Consultant’s ability to perform Services under this Agreement; (b) such other business entity does not compete with the Company’s business; and (c) Consultant continues to comply with all other obligations under this Agreement.

 

7.    Termination. This Agreement and the Consultant’s Engagement may be terminated prior to the expiration of the Term (a) upon mutual agreement by the Parties or (b) for Cause with 30 days written notice to the other Party. For purposes of this Agreement, “Cause” shall mean (i) a material breach of the terms of this Agreement; (ii) Consultant’s conviction of, or plea of guilty or nolo contendre to, a felony or a crime involving moral turpitude; or (iii) Consultant’s intentional act of fraud, embezzlement, or theft in connection with the Services. Moreover, this Agreeement shall automatically terminate prior to the expiration of the Term upon Consultant’s death or total disability. If the Agreement is terminated prior to the expiration of the Term, the Company shall be required to pay the Services Fee through the date of termination, with a prorated payment for any partial month.

 

2

 

 

8.    Confidential Information. Consultant agrees, consistent with applicable law, to protect the Company from intrusion into its business by not disclosing to any third-party any Confidential Information of the Company and its subsidiaries and affiliates. For purposes of this Agreement, “Confidential Information” means non-public information regarding the business activities of the Company and its subsidiaries and affiliates, and information regarding their respective employees, shareholders, investors, members, services, sales and marketing strategies, business plans, operations, costs, research and development efforts, technical data and know-how, financial information, compensation or other personnel information, internal procedures, forecasts, methods, trade secrets, software programs, project requirements, inventions, trademarks, trade names, and similar information regarding their respective businesses. Consultant agrees that all such Confidential Information is and shall remain the sole and exclusive property of the Company. Except as may be expressly authorized by the Company in writing, Consultant shall not disclose, or cause any other person or entity to disclose, any Confidential Information to any person or entity as long as such information remains confidential, and Consultant agrees not to make use of any such Confidential Information for Consultant’s own purpose or for the benefit of any other person or entity. Notwithstanding the above, Consultant understands that nothing in this Agreement prohibits Consultant from reporting possible violations of law or regulation to any governmental agency or entity. Moreover, nothing in this Agreement prohibits Consultant from disclosing Confidential Information in response to a lawfully-issued subpoena or other lawful process. In the event disclosure of Confidential Information is compelled by subpoena or other lawful process, unless prohibited by applicable law, Consultant agrees to promptly notify the Company in writing of such subpoena or other lawful process so that the Company may seek a protective order to limit such disclosure, and Consultant shall ensure that any such disclosure is limited to the information being requested.

 

9.    Return of Property. Upon the termination of the Consultant’s Engagement by either Party for any reason or in response to a request from the Company, whichever is earlier, Consultant shall return to the Company all property of the Company and its subisdiaries and affiliates that was ever in Consultant’s possession or control (regardless of whether such materials are Confidential Information).

 

10.    No Assignment.  Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Consultant.

 

11.    Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to the conflict of law principles thereof.

 

[signature page follows]

 

3

 

 

IN WITNESS WHEREOF, and intending to be legally bound, the Parties hereto have caused this Agreement to be executed as of the date(s) set forth below.

 

 

	 	Fredric Starker
	 	 	 	 
	 	Signature:	/s/ Fredric Starker	 
	 	 	 	 
	 	Date:	May 16, 2022	 

 

 

	 	NewLake Capital Partners:
	 	 	 	 
	 	By:	/s/ David Weinstein 	 
	 	 	 	 
	 	Its:	Chief Executive Officer	 
	 	 	 
	 	Date:	May 16, 2022	 

 

 

[Signature page: Consulting Agreement]

 

4

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