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                             EMPLOYMENT AGREEMENT

         AGREEMENT made as of January 1, 2002, by and between LITHIUM
TECHNOLOGY CORPORATION, a Delaware corporation (the "Corporation"), having an
address at 5115 Campus Drive, Plymouth Meeting, Pennsylvania 19462, and DAVID
J. CADE ("Executive"), residing at 251 Standish Road, Merion Station,
Pennsylvania 19066.

                             W I T N E S S E T H:

         WHEREAS, the Corporation wishes to employ Executive, and Executive is
willing to accept such employment, on the terms and conditions set forth in
this Agreement; and

         WHEREAS, the Corporation and the Executive are parties to an
Employment Agreement dated July 24, 1996 as amended and extended (the "1996
Agreement") which provides, among other things, for the employment of the
Executive until the later of (i) February 28, 2002 and (ii) one year after the
closing of the merger between the Corporation and Ilion Technology
Corporation, formerly Pacific Lithium Limited ("PLL").

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the parties hereto agree as follows:

         1.       Employment and Term. Subject to the terms and conditions of
this Agreement, the Corporation agrees to employ Executive, and Executive
hereby accepts employment by the Corporation, for a period of three years (the
"Term") commencing as of January 1, 2002 (the "Commencement Date")
notwithstanding that the term of the Executive's employment under the
provisions of the 1996 Agreement would have continued through and including
February 28, 2002.

         2.       Duties. During the Term, Executive shall serve the
Corporation as its Chairman and Chief Executive Officer, or in such other
capacity or capacities as may be determined by the Board of Directors of the
Corporation. Subject to the direction and control of the Board of Directors,
the Executive shall have the full authority and responsibility to operate and
manage, on a day to day basis, the business and affairs of the Corporation,
and shall perform such other duties and responsibilities as are currently
prescribed by the Bylaws of the Corporation and which are customarily vested
in the offices of chairman and chief executive officer of a corporation.
Executive shall perform such executive, administrative, development,
production, marketing and other services and duties for the Corporation, or
any subsidiary, affiliate or joint venture of the Corporation, as are
incidental to the positions he holds or as he may, from time to time, be
requested to hold by the Board of Directors of the Corporation. If requested
by the Board of Directors of the Corporation, Executive shall also serve,
without additional compensation, as an officer or director of any subsidiary,
affiliate or joint venture of the Corporation. During the Term, Executive
shall be available at all times to discharge his duties under this Agreement;
provided, however, that the Corporation agrees that Executive shall be able to
act as an independent director of other corporations and engage in other

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professional and business endeavors so long as Executive's duties in
connection therewith do not (i) unreasonably interfere with Executive's duties
under this Agreement or (ii) cause Executive to violate in any manner his
obligations under Sections 7 and 8 of this Agreement. The Executive hereby
agrees to resign immediately from the Board of Directors of the Corporation
and from all offices with each of its subsidiaries (if any) at such time as
the Executive no longer serves the Corporation as its Chief Executive Officer.

         3.       Compensation.

                  (a)      During the Term, the Corporation shall pay to
Executive, in equal installments no less frequently than twice per month (or
at such other intervals as are in effect from time to time for other executive
officers of the Corporation), a salary at the rate of $207,500.00 per year,
provided that if the Corporation completes a share exchange with GAIA
Akkumulatorenwerke GmbH ("GAIA") approved by the Corporation's Board of
Directors, then the Executive's salary shall be increased to $250,000.00 per
year effective as of the closing date of such share exchange. Commencing on
January 1, 2003 and on each anniversary of the Commencement Date thereafter
during the Term, or from time to time at the sole discretion of the Board of
Directors, the Executive's salary for the then-commencing year shall be
reviewed by the Board of Directors and may be increased, but may never be
decreased, in the sole discretion of the Board of Directors.

                  (b)      During each fiscal year of the Term, Executive
shall be eligible to receive a target bonus of up to 40% (forty percent) of
Executive's annual salary for such fiscal year of the Corporation, the exact
amount of such bonus if any to be determined in the discretion of, and by, the
Board of Directors or the applicable committee of the Board of Directors of
the Corporation in accordance with performance thresholds for such fiscal year
to be agreed upon by the Corporation and Executive prior to March 1 of the
fiscal year to which the bonus and the performance thresholds relate, provided
that with respect to the fiscal year ending December 31, 2002 the performance
thresholds shall be agreed upon by the Corporation and Executive prior to May
31, 2002. For any fiscal year of the Corporation during the Term that is not
co-terminous with the Term and with respect to which the Executive has been
granted and earned such a bonus, Executive shall receive a pro rated bonus,
based upon the length of service in such fiscal year.

                  (c)      During the Term, Executive shall be entitled to
four weeks of vacation per year, and in addition thereto such personal days,
sick leave and other similar benefits in accordance with the policies of the
Corporation from time to time in effect for executives of comparable expertise
and authority.

                  (d)      Executive agrees that the Corporation may obtain
key man life insurance with respect to Executive, and in connection therewith,
agrees to submit to all reasonable and customary examinations by the provider
of such life insurance.

                  (e)      Executive agrees to submit to, at the expense of
the Corporation, an annual physical examination by a physician of his choice.

                  (f)      Executive shall be entitled to reimbursement for
all normal and reasonable travel, entertainment and other expenses necessarily
incurred by him in the performance of his duties

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hereunder. Executive shall submit on a timely basis such itemized accounts of
such expenses, together with such vouchers or receipts for individual expense
items, as the Corporation may from time to time require under its established
policies and procedures.

                  (g)      Except as hereinafter provided, the Corporation
shall pay Executive for any period, up to a maximum of six months, during the
Term in which he is unable fully to perform his duties because of physical or
mental disability or incapacity, an amount equal to the base salary due him
for such period pursuant to Section 3(a), less the aggregate amount of all
income disability benefits which for such period he may receive or to which he
may be entitled by reason of (i) any group health insurance plan or disability
insurance plan, which is intended to function as a salary replacement plan,
(ii) any applicable compulsory state disability law, (iii) the Federal Social
Security Act, (iv) any applicable workmen's compensation law or similar law
and (v) any plan towards which the Corporation or any subsidiary or affiliate
of the Corporation (including any predecessor of any thereof) has contributed
or for which it has made payroll deductions, such as group accident or health
policies, other than those which reimburse for actual medical expenses.

                  (h)      Executive shall be paid a monthly car allowance in
the amount of $500 per month, payment of which shall be in accordance with the
Corporation's procedures from time to time in effect for executives of
comparable authority.

         4.       Stock Options. In addition to the consideration to be paid
to Executive for his services hereunder the Corporation shall issue to
Executive under an appropriate stock incentive plan (the "Plan") options to
purchase a quantity of shares of the Corporation's Common Stock as shall be
determined by the Board of Directors or the applicable committee of the Board
of Directors of the Corporation on the terms set forth in the Plan and in the
form of stock option agreement approved by the Board or such committee for the
grant of options under the Plan.

         5.       Rights of Termination.

                  (a)      For Cause. The Corporation shall have the right, at
any time effective upon notice to Executive, to terminate this Agreement and
Executive's employment hereunder for "cause" (as hereinafter defined). For
purposes of this Agreement, "cause" shall mean the breach or continued gross
neglect by Executive, or gross negligence or willful misconduct by Executive
in the performance, of any of his duties or obligations under this Agreement.

                  (b)      Disability; Death. In the event of Executive's
permanent and total disability as determined under the Corporation's long-term
disability program or, if no such program has been adopted, the continuous
absence of Executive for 180 consecutive days or more due to physical or
mental illness or incapacity, the Corporation shall have the right to
terminate this Agreement and Executive's employment hereunder upon 30 days'
prior written notice. In the event that Executive is able to and recommences
rendering services and performing his duties hereunder within such 30-day
notice period, Executive shall be reinstated and such notice shall be without
further force or effect. If Executive dies during the Term, this Agreement
shall terminate immediately upon his death.

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         6.       Effects of Termination.

                  (a)      In the event that Executive's employment is
terminated pursuant to Section 5(a) hereof, (i) Executive's employment
hereunder shall immediately cease, (ii) the Corporation shall pay to the
Executive his accrued and unpaid salary, accrued vacation time and expense
reimbursement through the date of termination in accordance with the
Corporation's usual procedures and (iii) all options shall be treated in
accordance with the terms of the applicable stock incentive plan and stock
option agreement pursuant to which such options were granted. Once the amounts
referred to in clause (ii) are paid, however, the Corporation shall have no
further obligation to Executive.

                  (b)      In the event that Executive's employment is
terminated pursuant to Section 5(b) hereof, (i) Executive's employment
hereunder shall cease in accordance with Section 5(b), (ii) the Corporation
shall pay to Executive his accrued and unpaid salary, accrued vacation time
and expense reimbursement through the date of termination (except subject to
Section 3(f) hereof in the event of disability) in accordance with the
Corporation's usual procedures, (iii) options shall be treated in accordance
with the terms of the applicable stock incentive plan and stock option
agreement pursuant to which such options were granted and (iv) in the event of
the death of Executive, any and all options (whether vested or unvested) shall
be transferred in accordance with Executive's will and become exercisable for
a period of thirty-six (36) months from the date of death, subject to the
terms of the applicable stock incentive plan.

                  (c)      In the event that Executive's employment hereunder
is terminated by the Corporation other than pursuant to Section 5(a) or (b),
then: (i) Executive shall be entitled to receive, and the Corporation shall
continue to pay to Executive, the annual salary specified in Section 3(a) for
the remainder of the Term or for six months (whichever is longer) payment of
which shall be made in one lump sum within thirty (30) days after the
termination date net of applicable deductions and withholdings, (ii) Executive
shall be entitled, during the period for which such severance payment is being
paid, to receive all benefits under the Corporation's medical insurance,
disability insurance, life insurance and other benefit plans as are then in
effect for executives of the Corporation and (iii) all options shall be
treated in accordance with the terms of the applicable stock incentive plan
and stock option agreement pursuant to which such options were granted, except
that all then exercisable options and all then unexercisable options shall
immediately become exercisable on the date of termination, and all of the same
shall remain exercisable in accordance with the terms of the applicable plan
and agreement.

                  (d)      In the event that Executive's employment hereunder
is terminated by Executive, then: (i) the Corporation shall pay to the
Executive his accrued and unpaid salary, accrued vacation time and expense
reimbursement through the date of termination in accordance with the
Corporation's usual procedures and (ii) all options shall be treated in
accordance with the terms of the applicable stock incentive plan and stock
option agreement pursuant to which such options were granted.

                  (e)      Executive's obligations pursuant to Sections 7 and
8 hereof shall survive any termination of this Agreement for any reason
whatsoever.

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         7.       Confidentiality.

                  (a)      Executive understands and acknowledges that as a
result of Executive's employment with the Corporation, and involvement with
the business of the Corporation, he is or shall necessarily become informed
of, and have access to, confidential information of the Corporation including,
without limitation, inventions, patents, patent applications, trade secrets,
technical information, know-how, plans, specifications, marketing plans and
information, pricing information, identity of customers and prospective
customers and identity of suppliers, and that such information, even though it
may have been or may be developed or otherwise acquired by Executive, is the
exclusive property of the Corporation to be held by Executive in trust and
solely for the Corporation's benefit. Executive shall not at any time, either
during or subsequent to his employment hereunder, reveal, report, publish,
transfer or otherwise disclose to any person, corporation or other entity, or
use, any of the Corporation's confidential information, without the written
consent of the Corporation's Board of Directors, except for use on behalf of
the Corporation in connection with the Corporation's business, and except for
such information which legally and legitimately is or becomes of general
public knowledge from authorized sources other than Executive.

                  (b)      Upon the termination of his employment with the
Corporation for any reason, Executive shall promptly deliver to the
Corporation all drawings, manuals, letters, notes, notebooks, reports and
copies thereof and all other materials, including, without limitation, those
of a secret or confidential nature, relating to the Corporation's business
which are in Executive's possession or control. The Corporation shall
reimburse Executive for any packing or moving costs reasonably incurred by
Executive in connection with the foregoing delivery.

For purposes of this Section 7 and Section 8, the term "Corporation" includes
the Corporation and any other predecessor corporation, and affiliates
(including, without limitation, distributors, licensees, franchisees,
subsidiaries and joint ventures).

8.       Non-Competition.

         (a)      Executive agrees that, for a period commencing on the date
hereof and ending one year after the termination of his employment with the
Corporation for any reason, he shall not, anywhere in North America, directly
or indirectly:

                  (i)      solicit or attempt to solicit business of any
         customers of the Corporation (including prospective customers
         solicited by the Corporation) for products or services the same or
         similar to those offered, sold, produced or under development by the
         Corporation during the term of his employment therewith or dealt in
         by Executive during his employment with the Corporation;

                  (ii)     otherwise divert or attempt to divert from the
         Corporation any business whatsoever;

                  (iii)    solicit or attempt to solicit for any business
         endeavor any employee of the Corporation;

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                  (iv)     interfere with any employment relationship or other
         business relationship between the Corporation and any other
         individual, person, or other entity;

                  (v)      use the name of the Corporation or a name similar
         thereto; or

                  (vi)     render any services as an officer, director,
         employee, partner, consultant or otherwise to, or have any interest
         as a stockholder, partner, lender or otherwise in, any person which
         is engaged in activities which, if performed by Executive would
         violate this Section 8.

         (b)      Executive agrees that during the term of his employment with
the Corporation, he will not, anywhere in North America, directly or
indirectly engage, directly or indirectly, as an independent contractor or
otherwise, in any activity for or on behalf of any person or entity in a
competitive line of business to that carried on by the Corporation, or engage
in any manner in the design, development, manufacturing, assembling,
installing, and/or marketing of rechargeable lithium battery technology or
other technology competitive with the business carried on by the Corporation
or dealt in by Executive during his employment with the Corporation.

         (c)      If during the one year period commencing on the termination
of his employment with the Corporation for any reason, Executive, directly or
indirectly engages, anywhere in North America, as an independent contractor or
otherwise, in any activity for or on behalf of any person or entity in a
competitive line of business to that carried on by the Corporation during the
term of his employment therewith, or engages in any manner in the design,
development, manufacturing, assembling, installing, and/or marketing of
rechargeable lithium battery technology or other technology competitive with
the business carried on by the Corporation during the term of Executive's
employment therewith or dealt in by Executive during his employment with the
Corporation, all the non-exercised vested and unvested options held by
Executive shall terminate.

         (d)      The provisions contained in paragraphs (b) and (c) of this
Section 8 shall not prevent Executive from purchasing or owning up to five
percent (5%) of the voting securities of any corporation, the securities of
which are publicly-traded.

         9.       Remedies and Survival. Because the Corporation does not have
an adequate remedy at law to protect its interest in its trade secrets,
privileged, proprietary or confidential information and similar commercial
assets, or its business from Executive's competition, the Corporation shall be
entitled to injunctive relief, in addition to such other remedies and relief
that would, in the event of a breach or a threatened breach of the provisions
of Sections 7 or 8, be available to the Corporation. The Corporation shall not
be required to plead or prove the inadequacy of damages. The provisions of
Sections 7 and 8 and this Section 9 shall survive any termination of
Executive's employment with the Corporation for any reason whatsoever.

         10.      Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to its subject matter, merges
and supersedes any prior or contemporaneous agreements or understandings with
respect to its subject matter (including without limitation the 1996
Agreement), and shall not be modified or terminated except as permitted herein
or by another agreement in writing executed by the Corporation and Executive.
Failure of a party to enforce one or more of the provisions of this Agreement
or to require at any time performance of any of the

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obligations hereof shall not be construed to be a waiver of such provisions by
such party nor to in any affect the validity of this Agreement or such party's
right thereafter to enforce any provision of this Agreement, nor to preclude
such party from taking any other action at any time which it would legally be
entitled to take. In the event of a conflict between this Agreement and any of
the stock option agreements entered into between the Corporation and
Executive, the terms and condition of this Agreement shall control.

         11.      Severability. If any provision of this Agreement is held to
be invalid or unenforceable by any court or tribunal of competent
jurisdiction, the remainder of this Agreement shall not be affected by such
judgment, and such provision shall be carried out as nearly as possible
according to its original terms and intent to eliminate such invalidity or
unenforceability.

         12.      Successors and Assigns. Neither party shall have the right
to assign this personal Agreement, or any rights or obligations hereunder,
without the consent of the other party; provided, however, that upon the sale
or transfer of all or substantially all of the assets and business of the
Corporation to another party, or upon the merger or consolidation of the
Corporation with, or acquisition of the Corporation by, another corporation or
entity, this Agreement shall inure to the benefit of, and be binding upon,
both Executive and the party purchasing such assets, business and goodwill, or
surviving such merger or consolidation or acquiring the Corporation, as the
case may be, in the same manner and to the same extent as though such other
party were the Corporation. Subject to the foregoing, this Agreement shall
inure to the benefit of, and bind, the parties hereto and their legal
representatives, heirs, successors and assigns.

         13.      Communications. All notices and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
at the time when mailed in any United States post office enclosed in a
registered or certified postage-paid envelope and addressed as set forth at
the beginning of this Agreement, or to such other address as any party may
specify by notice to the other parties, or delivered by Federal Express or a
similar overnight courier to such address; provided, however, that any notice
of change of address shall be effective only upon receipt.

         14.      Construction; Counterparts. The headings contained in this
Agreement are for convenience only and shall in no way restrict or otherwise
affect this construction of the provisions hereof. References in this
Agreement to Sections are to the sections of this Agreement. This Agreement
may be executed in multiple counterparts, each of which shall be an original
and all of which together shall constitute one and the same instrument.

         15.      Governing Law.  This Agreement shall be governed by the laws
of the Commonwealth of Pennsylvania.

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         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first set forth above.

                                  LITHIUM TECHNOLOGY CORPORATION


                                  By:  /s/ Ralph D. Ketchum
                                     ----------------------
                                     Ralph D. Ketchum
                                     Director and Authorized Signatory


                                  EXECUTIVE:




                                  /s/  David J. Cade
                                  ------------------
                                  David J. Cade



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