Exhibit 10.68

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, REGULATION S OR
AN EXEMPTION FROM REGISTRATION AND OTHERWISE IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL OWNER OF THE SECURITIES, A COPY OF
WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER.

 

LITHIUM TECHNOLOGY CORPORATION

 

WARRANT

 

This Warrant is issued in connection with that certain Subscription Agreement
(the “Subscription Agreement”) by and among LITHIUM TECHNOLOGY CORPORATION, a
Delaware corporation (the “Company”), and                      (the “Investor”).
Capitalized terms used herein, but not otherwise defined, shall have the meaning
given to them in the Subscription Agreement.

 

THIS CERTIFIES THAT, for value received, the Investor or its registered assigns
is entitled to purchase from the Company at any time or from time to time during
the period specified in Paragraph 2 hereof one (1) fully paid and nonassessable
share of the Company’s Common Stock, $.01 par value per share (the “Common
Stock”) for each share of Common Stock issued upon conversion of the Series B
Preferred Stock purchased by the Investor (the “Series B Preferred Stock
Conversion”) pursuant to the Subscription Agreement (the “Series B Preferred
Stock”), at an exercise price per share of Common Stock equal to $2.70 (the
“Exercise Price”).

 

The term “Warrant Shares,” as used herein, refers to the shares of Common Stock
purchasable hereunder. The Warrant Shares and the Exercise Price are subject to
adjustment as provided in Paragraph 4 hereof. This Warrant is subject to the
following terms, provisions, and conditions:

 

I. Manner of Exercise; Issuance of Certificates; Payment for Shares. Subject to
the provisions hereof, this Warrant may be exercised by the holder hereof, in
whole or in part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the “Exercise Agreement”), to
the Company during normal business hours on any business day at the Company’s
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the holder hereof), and upon (i) payment to the
Company in cash, by certified or official bank check or by wire transfer for the
account of the Company of the Exercise Price for the Warrant Shares specified in
the Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder
is not then registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “Securities Act”), delivery to the
Company of a written notice of an election to effect a “Cashless Exercise” (as

--------------------------------------------------------------------------------

defined in Section 11(c) below) for the Warrant Shares specified in the Exercise
Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
holder hereof or such holder’s designee, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been delivered, and
payment shall have been made for such shares as set forth above. Certificates
for the Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be requested by
the holder hereof and shall be registered in the name of such holder or such
other name as shall be designated by such holder. If this Warrant shall have
been exercised only in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of such certificates, deliver to
the holder a new Warrant representing the number of shares with respect to which
this Warrant shall not then have been exercised.

 

2. Period of Exercise. This Warrant is exercisable at any time or from time to
time on or after the Series B Preferred Stock Conversion and before 5:00 p.m.,
New York, New York time on the fourth anniversary of such date (the “Exercise
Period”)

 

3. Certain Agreements of the Company. The Company hereby covenants and agrees as
follows:

 

(a) Shares to be Fully Paid. All Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, and charges with respect to the
issue thereof.

 

(b) Reservation of Shares. During the Exercise Period, the Company shall at all
times have authorized, and reserved for the purpose of issuance upon exercise of
this Warrant, a sufficient number of shares of Common Stock to provide for the
exercise of this Warrant.

 

(c) Listing. The Company shall promptly secure the listing of the shares of
Common Stock issuable upon exercise of the Warrant upon each national securities
exchange or automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance upon exercise of
this Warrant) and shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all shares of Common Stock from time to time
issuable upon the exercise of this Warrant.

 

(d) Successors and Assigns. This Warrant will be binding upon any entity
succeeding to the Company by merger, consolidation, or acquisition of all or
substantially all the Company’s assets.

 

4. Adjustment and Antidilution Provisions. On or after the date of issuance of
this Warrant, the Warrant Exercise Price and number of shares issuable pursuant
to this Warrant shall be subject to adjustment as follows:

 

(a) In case the Company shall (i) declare a dividend or make a distribution on
its outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide
or

 

-2-

--------------------------------------------------------------------------------

reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, the Exercise Price in effect at the time of the
record date for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock immediately prior to such action. Such
adjustment shall be made each time any event listed above shall occur.

 

(b) Whenever the Exercise Price payable upon exercise of each Warrant is
adjusted pursuant to Subsection (a) above, the number of shares purchasable upon
exercise of this Warrant shall simultaneously be adjusted by multiplying the
number of shares initially issuable upon exercise of this Warrant by the
Exercise Price in effect on the date hereof and dividing the product so obtained
by the Exercise Price, as adjusted.

 

(c) All calculations under this Section 4 shall be made to the nearest cent or
to the nearest one-hundredth of a share, as the case may be. Anything in this
Section 4 to the contrary notwithstanding, the Company shall be entitled, but
shall not be required, to make such changes in the Exercise Price in addition to
those required by this Section 4, as it shall determine, in its sole discretion,
to be advisable in order that any dividend or distribution in shares of Common
Stock, or any subdivision, reclassification or combination of Common Stock,
hereafter made by the Corporation shall not result in any Federal Income tax
liability to the holders of the Common Stock or securities convertible into
Common Stock (including warrants).

 

(d) Whenever the Exercise Price is adjusted, as herein provided, the Corporation
shall promptly cause a notice setting forth the adjusted Exercise Price and
adjusted number of shares issuable upon exercise of each Warrant to be mailed to
the Holder, at its last address appearing in the Company’s Warrant Register. The
Company may retain a firm of independent certified public accountants selected
by the Board of Directors (who may be the regular accountants employed by the
Company) to make any computation required by this Section 4, and a certificate
signed by such firm shall be conclusive evidence of the correctness of such
adjustment.

 

5. Issue Tax. The issuance of certificates for Warrant Shares upon the exercise
of this Warrant shall be made without charge to the holder of this Warrant or
such shares for any issuance tax or other costs in respect thereof, provided
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than the holder of this Warrant.

 

6. No Rights or Liabilities as a Shareholder. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a shareholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the holder hereof to purchase Warrant Shares, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such holder for the Exercise Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

 

-3-

--------------------------------------------------------------------------------

7. Transfer, Exchange, and Replacement of Warrant.

 

(a) Restriction on Transfer. This Warrant and the rights granted to the holder
hereof are transferable, in whole or in part, upon surrender of this Warrant,
together with a properly executed assignment in the form attached hereto, at the
office or agency of the Company referred to in Paragraph 7(e) below, provided,
however, that any transfer or assignment shall be subject to the conditions set
forth in Paragraph 7(f) hereof. Until due presentment for registration of
transfer on the books of the Company, the Company may treat the registered
holder hereof as the owner and holder hereof for all purposes, and the Company
shall not be affected by any notice to the contrary.

 

(b) Warrant Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) below, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.

 

(c) Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of any such loss, theft, or destruction, upon delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of this
Warrant, the Company, at its expense, will execute and deliver, in lieu thereof,
a new Warrant of like tenor.

 

(d) Cancellation; Payment of Expenses. Upon the surrender of this Warrant in
connection with any transfer, exchange, or replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Paragraph 7.

 

(e) Register. The Company shall maintain, at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant, in which the Company shall record
the name and address of the person in whose name this Warrant has been issued,
as well as the name and address of each transferee and each prior owner of this
Warrant.

 

(f) Exercise or Transfer Without Registration. If, at the time of the surrender
of this Warrant in connection with any exercise, transfer, or exchange of this
Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares
issuable hereunder), shall not be registered under the Securities Act of 1933,
as amended (the “Securities Act”) and under applicable state securities or blue
sky laws, the Company may require, as a condition of allowing such exercise,
transfer, or exchange, (i) that the holder or transferee of this Warrant, as the
case may be, furnish to the Company a written opinion of counsel, which opinion
and counsel are acceptable to the Company, to the

 

-4-

--------------------------------------------------------------------------------

effect that such exercise, transfer, or exchange may be made without
registration under said Act and under applicable state securities or blue sky
laws, (ii) that the holder or transferee execute and deliver to the Company an
investment letter in form and substance acceptable to the Company and (iii) that
the transferee be an “accredited investor” as defined in Rule 501(a) promulgated
under the Securities Act; provided that no such opinion, letter or status as an
“accredited investor” shall be required in connection with a transfer pursuant
to Rule 144 under the Securities Act. The first holder of this Warrant, by
taking and holding the same, represents to the Company that such holder is
acquiring this Warrant for investment and not with a view to the distribution
thereof.

 

8. Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) shall have registration rights as set forth in Section 5 of
the Subscription Agreement.

 

9. Notices. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 5115 Campus Drive,
Plymouth Meeting, Pennsylvania 19462, Attention: Chief Executive Officer, or at
such other address as shall have been furnished to the holder of this Warrant by
notice from the Company. Any such notice, request, or other communication may be
sent by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Paragraph 9, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.

 

10. Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK
WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED
INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL

 

-5-

--------------------------------------------------------------------------------

AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL
FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
IN CONNECTION WITH SUCH DISPUTE.

 

11. Miscellaneous.

 

(a) Amendments. This Warrant and any provision hereof may only be amended by an
instrument in writing signed by the Company and the holder hereof.

 

(b) Descriptive Headings. The descriptive headings of the several paragraphs of
this Warrant are inserted for purposes of reference only, and shall not affect
the meaning or construction of any of the provisions hereof.

 

(c) Cashless Exercise. Notwithstanding anything to the contrary contained in
this Warrant, if the resale of the Warrant Shares by the holder is not then
registered pursuant to an effective registration statement under the Securities
Act, this Warrant may be exercised by presentation and surrender of this Warrant
to the Company at its principal executive offices with a written notice of the
holder’s intention to effect a cashless exercise, including a calculation of the
number of shares of Common Stock to be issued upon such exercise in accordance
with the terms hereof (a “Cashless Exercise”). In the event of a Cashless
Exercise, in lieu of paying the Exercise Price in cash, the holder shall
surrender this Warrant for that number of shares of Common Stock determined by
multiplying the number of Warrant Shares to which it would otherwise be entitled
by a fraction, the numerator of which shall be the difference between the then
current Market Price per share of the Common Stock and the Exercise Price, and
the denominator of which shall be the then current Market Price per share of
Common Stock. For example, if the holder is exercising 100,000 warrants with a
per warrant exercise price of $0.75 per share through a cashless exercise when
the Common Stock’s current Market Price per share is $2.00 per share, then upon
such Cashless Exercise the holder will receive 62,500 shares of Common Stock.

 

-6-

--------------------------------------------------------------------------------

(d) Remedies. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Warrant will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Warrant, that the holder shall
be entitled, in addition to all other available remedies at law or in equity,
and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Warrant and to
enforce specifically the terms and provisions thereof, without the necessity of
showing economic loss and without any bond or other security being required.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.

 

    LITHIUM TECHNOLOGY CORPORATION     By:  

 

--------------------------------------------------------------------------------

    Name:         Title:     Dated as of                     , 2004        

 

-7-

--------------------------------------------------------------------------------

FORM OF EXERCISE AGREEMENT

 

Dated:                         , 200  

 

To:                                                              

 

The undersigned, pursuant to the provisions set forth in the within Warrant,
hereby agrees to purchase              shares of Common Stock covered by such
Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of $            , or, if the resale of such Common Stock by the
undersigned is not currently registered pursuant to an effective registration
statement under the Securities Act of 1933, as amended, by surrender of
securities issued by the Company (including a portion of the Warrant) having a
market value (in the case of a portion of this Warrant, determined in accordance
with Section 11(c) of the Warrant) equal to $            . Please issue a
certificate or certificates for such shares of Common Stock in the name of and
pay any cash for any fractional share to:

 

Name:

 

 

--------------------------------------------------------------------------------

Signature:

   

Address:

 

 

--------------------------------------------------------------------------------

   

 

--------------------------------------------------------------------------------

 

Note:   The above signature should correspond exactly with the name on the face
of the within Warra3nt, if applicable.

 

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

 

-8-

--------------------------------------------------------------------------------

FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers all the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock covered thereby set forth hereinbelow, to:

 

Name of Assignee

--------------------------------------------------------------------------------

 

Address

--------------------------------------------------------------------------------

 

No. of Shares

--------------------------------------------------------------------------------

 

, and hereby irrevocably constitutes and appoints
                                                              as agent and
attorney-in-fact to transfer said Warrant on the books of the within-named
corporation, with full power of substitution in the premises.

 

Dated:                          , 200  

 

In the presence of:

     

 

--------------------------------------------------------------------------------

    Name:  

 

--------------------------------------------------------------------------------

    Signature:  

 

--------------------------------------------------------------------------------

    Title of Signing Officer or Agent (if any):     Address:  

 

--------------------------------------------------------------------------------

       

 

--------------------------------------------------------------------------------

       

 

--------------------------------------------------------------------------------

 

Note:   The above signature should correspond exactly with the name on the face
of the within Warrant, if applicable

 

-9-