Document:

ex-4_11.htm

 

	

	
Lithium Technology Corporation

5115 Campus Drive

19462 Plymouth Meeting, PA

 

Exhibit 4.11

 

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION AVAILABLE UNDER SUCH ACT.

 

REVISED CONVERTIBLE PROMISSORY NOTE

 

As of 06-Sep-2010

 

Plymouth Meeting, Pennsylvania                                                                                                                                                                                                                                                                                                                             € 7.500.000

 

FOR VALUE RECEIVED, the undersigned, LITHIUM TECHNOLOGY CORPORATION, a Delaware corporation, with an address at 5115 Campus Drive, 19642 Plymouth Meeting, PA (the “Company"), hereby promises to pay to the order of , with an address at Postbus 326 , B-2930 Tiel, the Netherlands (together with his successors and permitted assigns, the "Holder"), in accordance with the terms hereinafter provided, the principal amount of One Hunderd and Twenty Five Thousand EUROS (€ ), together with all accrued but unpaid interest, all as provided in this Convertible Promissory Note (as the same may be supplemented, modified, amended or restated from time to time in the manner provided herein, the "Note").

 

Any payments hereunder shall be applied, first, against any accrued but unpaid interest and, second, against the outstanding principal balance of the Note.

 

Beginning on the date hereof, the outstanding principal balance of this Note shall bear interest, in arrears, at a rate equal to 9% per annum; provided, however, that such rate shall increase to 18% at any time following the occurrence of an Event of Default (as hereinafter defined). Interest shall be computed on the basis of a 360-day year of twelve 30-day months and shall be payable on the Maturity Date (as hereinafter defined). Notwithstanding anything to the contrary set forth in this Note, the interest payable hereunder shall not exceed the maximum rate of interest permissible to be charged under the laws of the State of New York. Any amounts paid in excess of such rate shall be considered to have been payments in reduction of principal.

 

The outstanding principal balance of this Note shall be due and payable in its entirety on September 30, 2011, or at such earlier time as provided herein (the "Maturity Date"). Principal and interest shall be payable in Euros in immediately available funds, at the address of the Holder first set forth above or at such other place, or by wire transfer of funds to such account of the Holder, as the Holder may designate from time to time in writing to the Company. This Note may, without the prior written consent of the Holder, be prepaid by the Company, only in full, at any time prior to the Maturity Date, provided that (i) the Company shall concurrently pay the Holder a prepayment premium equal to 2% of the amount so prepaid and (ii) this Note may not be prepaid without at least ten Business Days’ (as hereinafter defined) prior written notice to the Holder. For purposes hereof, "Business Day" shall mean any day, other than any Saturday, Sunday or a public holiday under the laws of the State of Pennsylvania.

 

 

  

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Article I

Transfer; Replacement

 

1.1. Payment on Non-Business Days. Whenever any payment to be made shall be due on a non-Business Day, such payment shall be made on the next succeeding Business Day and such next succeeding Business Day shall be included in the calculation of the amount of accrued interest payable on such date.

 

1.2. Transfer. This Note may, at any time, be assigned, transferred or sold, subject to the provisions of Section 6.6 of this Note, or pledged, hypothecated or otherwise granted as security, by the Holder.

 

1.3. Replacement. Upon receipt of a duly executed, notarized and unsecured written statement from the Holder with respect to the loss, theft or destruction of this Note (or any replacement hereof), and without requiring an indemnity bond or other security, or, in the case of the mutilation of this Note, upon surrender and cancellation of this Note, the Company shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.

 

Article II

Default; Acceleration

 

2.1.Events of Default. The occurrence of any of the following events shall be an “Event of Default” under this Note:

 

(a) the Company shall fail to make any payment of principal or interest on the date such payment is due hereunder, whether upon the Maturity Date or otherwise;

 

(b) default shall be made in the performance or observance of any covenant contained in this Note and such default shall continue unremedied for a period of ten days after notice from the Holder;

 

(c) any representation or warranty made by the Company in this Note shall prove to have been false or incorrect or breached in any respect on the date as of which made;

 

(d) the Company or any of its Subsidiaries (as hereinafter defined) shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or ass ets, , (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter in effect), (iv) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors’ rights generally, (v) acquiesce in writing to any petition filed against it in an involuntary case under United States Bankruptcy Code (as now or hereafter in effect) or (vi) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing;

 

(e) a proceeding or case shall be commenced in respect of the Company or any of its Subsidiaries, without its application or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of 90 days or an order for relief shall be entered in an involuntary case under United States Bankruptcy Code (as now or hereafter in effect) against the Company or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Company and shall continue undismissed, or unstayed and in effect for a period of 90 days; or

 

 

  

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2.2. Remedies Upon an Event of Default . If an Event of Default shall have occurred and shall be continuing, the Holder of this Note may at any time declare the entire unpaid principal balance of this Note, together with all interest accrued thereon, due and payable, and thereupon, the same shall be accelerated and so due and payable, without presentment, demand, protest or notice, all of which are hereby expressly, unconditionally and irrevocably waived by the Company; provided, however, that upon the occurrence of an Event of Default described in Section 2.1(d) or 2.1(e), the outstanding principal balance and accrued interest and any other amounts due hereunder shall be automatically due and payable. No course of delay on the part of the Holder shall operate as a waiver thereof or otherwise prejudice any rights of the Holder. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise.

 

2.3. Acceleration of the Note.

 

(a) Upon the occurrence of (i) a Change in Control (as hereinafter defined), or (ii) a Financing (as hereinafter defined) (each of the events described in clauses (i) and (ii) above, an “Acceleration Event"), the entire unpaid principal balance of this Note, together with all interest accrued thereon and any other amounts due hereunder, shall become due within three (3) months and payable, without presentment, demand, protest or notice, all of which are hereby expressly, unconditionally and irrevocably waived by the Company.

 

(b) In connection with the acceleration of this Note in accordance with this Section 2.3, the Company shall promptly provide the Holder with any information reasonably requested in writing by the Holder with respect to such Acceleration Event. In the event that the Holder intends to exercise its Conversion Option (as hereinafter defined) in connection with such Acceleration Event, the Holder shall provide written notice of such exercise prior to the expiration of the 15-Business Day period beginning on the delivery date of the Acceleration Event Notice. Upon the occurrence of an Acceleration Event, the Company shall pay to the Holder the entire unpaid principal balance of this Note, together with all interest accrued thereon (less the amount of any principal or interest converted by the Holder pursuant to Article III) and any other amounts due hereunder, by wire transfer of immediately available funds, against surrender to the Company of this Note, marked “Paid In Full”. Payment of all amounts due in accordance with this Section 2.3 shall discharge all of the Company’s obligations under this Note, and the Holder shall have no further rights with respect hereto.

 

(c) As used herein, the following terms have the following meanings:

 

(i) “Change in Control" of the Company would be deemed to have occurred if, at any time following the date hereof: (A) any “person” or “group” (as such terms are used in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act")) (other than the shareholders of the Company identified in (1) Amendment No. 16/6 to Schedule 13D filed with respect to the Company on April 29, 2008 and 

 

(2) Schedule 13D filed with respect to the Company on June 2, 2008) becomes a “beneficial owner” (as such term is used in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities; (B) a change in “control” of the Company (as the term “control” is defined in Rule 12b-2 or any successor rule promulgated under the Exchange Act) shall have occurred; (C) the shareholders or the Board of Directors of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or (D) the shareholders or the Board of Directors of the Company approve a merger or consolidation of the Company with any other company, other than a merger or consolidation which would result in the combined voting power of the Company’s voting securities outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation.

 

 

  

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(ii) “Financing" means the consummation by the Company or any of its Subsidiaries of any debt or equity financing in excess of $20,000,000 .

 

2.4. Mandatory Prepayment of the Note.

 

(a) In the event of the receipt by the Company or any of its Subsidiaries of any proceeds from any Asset Sale or Insurance/Condemnation Award (each as defined below), the Company shall apply within thirty (30) Business Day after the receipt thereof the net after-tax proceeds therefrom to pay in cash the principal and all accrued but unpaid interest hereunder. Any such payment shall be applied first to the accrued but unpaid interest hereunder and then to the outstanding principal hereunder.

 

(b) “Asset Sale" means any sale, transfer, conveyance or other disposition by the Company or any of its Subsidiaries of any of its property or assets, other than the sale of inventory in the ordinary course of business.

 

(c)“Insurance/Condemnation Award" means the receipt by the Company or any of its Subsidiaries of any proceeds received under any casualty insurance polity maintained by or for the benefit of the Company or any of its Subsidiaries or as a result of the taking of any assets of the Company or any of its Subsidiaries pursuant to the power of eminent domain or condemnation.

 

Article III

Conversion

 

3.1. Conversion Option.

 

(a) The outstanding principal amount of this Note and any interest outstanding hereunder shall be convertible (in whole or in part), at the option (the "Conversion Option") of the Holder, at any time during the period from the date of this Note until the payment in full by the Company of the entire principal balance of this Note, together with all interest accrued thereon and any other amounts due hereunder (the "Conversion Period"), into either: (i) such number of the Company’s shares of common stock, $0.01 par value per share (the "Common Stock"), equal to the quotient of (A) the amount of unpaid principal and interest outstanding hereunder being converted, converted from Euros into Dollars based upon the Exchange Rate of the Euro to the Dollar at the date hereof, divided by (B) the Conversion Price (as hereinafter defined) per share of Common Stock then in effect, the maximum number of shares of Common Stock in which the principal amount and the interest amount can be converted to, is given in Exhibit A; or (ii) any equity securities (or debt securities convertible into equity securities) of any series or class issued by the Company at any time following the date hereof, at an effective conversion price equal to the Conversion Price, (provided, however, that this clause (ii) shall not apply to any securities issued upon exercise of any stock option outstanding on the date hereof or securities hereafter issued to employees and directors of the Company pursuant to stock option or stock purchase plans or an arm’s length agreement adopted or approved by the Company’s Board of Directors, provided that the aggregate amount of Common Stock deemed issued or issuable under all such transactions described in this parenthetical sentence does not exceed two percent (2%) of the number of shares then outstanding on a fully-diluted basis calculated immediately post-issuance).  "Conversion Price" shall mean $0.07, as such price shall be appropriately adjusted from time to time in the event of any equity split, dividend, recapitalization, reclassification or similar event by the Company with respect to its equity securities. The Common Stock and other securities referred to in clauses (i) and (ii) of the immediately preceding sentence shall be referred to herein as the "Conversion Securities".

 

 

  

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(b) The Holder may, at any time and from time to time during the Conversion Period, exercise the Conversion Option. To convert this Note (in whole or in part) in accordance with Section 3.1(a), the Holder hereof shall deliver written notice thereof, substantially in the form of Exhibit "B" to this Note, with appropriate insertions (the “Conversion Notice”), to the Company at its address as set forth herein. The date upon which the conversion shall be effective (the “Conversion Date”) shall be deemed to be the date set forth in the Conversion Notice. Within five Business Days after the date of the receipt of the Notification of Conversion by the Company, the Company shall deliver to the Holder one or more certificates representing the number “Conversion Securities” and, in the event of a partial conversion, a confirmation that this Convertible Promissory Note will remain valid for the remainder of the principal balance and the remainder of the outstanding interest balance, such certificates and confirmation, if applicable, shall the Notice of Conversion for all purposes be deemed to be issued and outstanding as of the date of the receipt of this Note by the Company.

 

(c) The Company shall provide the Holder at least 15 Business Days prior written notice of any repayment by the Company of this Note or any other event that, if it were to occur, would impair the right of the Holder to convert this Note.

 

(d) The Company recognizes and acknowledges that a breach by the Company of the provisions of this Section 3.1 will cause irreparable and material harm to the Holder, that the Holder may bring a suit to enforce or remedy a breach of the provisions of this Section 3.1, that in any such suit an action for damages would be inadequate, and that the Holder may seek and obtain such equitable relief (without being required to post a bond or other security), including but not limited to injunctive relief, as may be appropriate in any court of competent jurisdiction, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.

 

3.2. Certain Rights of the Holder. Nothing contained in this Note shall be construed as conferring upon the Holder, prior to the conversion of this Note, the right to vote or to receive distributions or to consent or to receive notice as a member in respect of any meeting of members for the election of directors (as the case may be) of the Company or of any other matter, or any other rights as a shareholder of the Company.

 

Article IV

Secured Nature of the Note

 

All obligations of the Company under this note are and will be secured by a certain first priority security interest in all of the tangible and intangible fixed assets, including real estate, of the Company, the Company hereby represents and warrants to the Holder as follows:

 

4.1. The Company agrees to pledge in favor off all subscribers of this Note of € 7,500,000 all of the tangible and intangible fixed assets, consisting of (but not limited to) production machinery, office equipment, of-fice furniture, testing and laboratory equipment, patents, etc. it owns now or will own in the future.

 

4.2. The Company agrees not to grant any security interest in any form or fashion in the pledged assets for any other Note or any other debt, without prior written consent from the Holder.

 

4.3. The Company agrees, on the first request of the Holder, to grant a mortgage security on all real estate it now owns or will own in the future under such terms and conditions as the Holder will require. The Company will take all actions that are required to record and file all legally required documents in all relevant and applicable governmental offices.

 

 

  

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4.4. The Company agrees not to grant a mortgage or any other security interest in any form or fashion in all real estate it now owns or will own in the future. The Company further agrees not to sell, lease, rent, give in use or restrict the availability for the Company of the real estate it now owns or will own in the future in any form or fashion.

 

4.5. So long as no Event of Default (as defined in Article II of this Note) shall have occurred and be continuing:

 

(i)  the Company shall be entitled to exercise any and all rights pertaining to the pledged assets or any part thereof for any purpose not inconsistent with the terms of this article and necessary for the normal course of business; and

 

(ii) the Company shall be entitled to receive and retain any and all payments paid or made in respect of the pledged assets for use in the normal course of business.

 

Article V

Representations and Warranties of the Company

 

The Company hereby represents and warrants to the Holder as follows:

 

5.1. Organization. The Company is a corporation duly organized and validly existing under the laws of the State of Delaware and has the power and authority to enter into this Note and to carry out the transactions contemplated hereby. The Company has the requisite corporate power and authority to own, lease and operate the properties used in its business and to carry on its business as currently conducted and currently contemplated to be conducted.

 

5.2. Authority. The Company has the corporate power and authority to enter into this Note and to perform its obligations hereunder. The execution, delivery and performance by the Company of this Note and the consummation by the Company of the transactions contemplated hereby have been duly authorized and approved by the Board of Directors of the Company and no other corporate proceedings on the part of the Company or any shareholder are necessary to authorize and approve this Note and the transactions contemplated hereby. This Note has been duly executed and delivered by the Company and constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought.

 

5.3. Consents and Approvals. There is no requirement applicable to the Company which has not already been satisfied to make any filing with, or to obtain any permit, authorization, consent, waiver or approval of, any person (including, but not limited, the Board of Directors and shareholders of the Company) or any governmental or regulatory authority as a condition to the lawful consummation by the Company of the issuance of the Conversion Securities or any other transaction contemplated by this Note, except for securities filings which can legally be made after the sale of the Shares.

 

5.4. No Violation. Neither the execution and delivery of this Note by the Company nor the consummation of the transactions contemplated hereby will (i) conflict with or result in any breach of any provision of the Company’s Restated Certificate of Incorporation, as amended through the date of this Note, or Bylaws, as amended through the date of this Note, (ii) result in a default or constitutes an event of default or a breach (or gives rise to any right of termination, cancellation or acceleration, or result in any Encumbrance (as hereinafter defined) upon any property or assets of the Company or any Subsidiary) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, agreement, lease or other instrument or obligation to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of their respective properties or assets is bound, or (iii) violate any order, writ, injunction, decree, statute or regulation or any other restriction of any kind or character applicable to the Company or any Subsidiary or any of their respective properties or assets.

 

 

  

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5.5. SEC Reports; Financial Statements. The Company has filed all reports required to be filed by it under the Securities Act of 1933 as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including pursuant to Section 13(a) or Section 15(d) of the Exchange Act, for the three years preceding the date hereof (or such shorter period as the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto, being collectively referred to herein as the "SEC Reports"). The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (ÒGAAPÓ), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. Amper, Politziner & Mattia P.C., which have certified certain financial statements of the Company and its consolidated subsidiaries included in the SEC Reports, are independent public accountants as required by the Securities Act, the Exchange Act and the respective rules and regulations of the Commission thereunder and are registered and in good standing with the Public Company Accounting Oversight Board in accordance with the Sarbanes-Oxley Act of 2002.

 

5.6. Material Changes. Since December 31, 2007, other than as described in registration statements and reports filed with the Commission, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its holders of Common Stock or other capital stock, or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or affiliate, except pursuant to existing Company stock option plans.

 

5.7. Certain Definitions. For purposes of this Note, the following terms shall have the respective definitions set forth below:

 

(a)  “Encumbrance" shall mean any lien, charge, claim, pledge, security interest, conditional sale agreement or other title retention agreement, lease, mortgage, security agreement, right of first refusal, option, restriction, tenancy, license, covenant, right -of-way, easement or other encumbrance (including the filing of, or agreement to give, any financing statement under the UCC or any other law of any jurisdiction).

 

(b)  “Material Adverse Effect" shall mean any material adverse change in the business, operations or assets of the Company, financial or otherwise, taken as a whole with its Subsidiaries.

 

 

  

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(c)   “Person” shall mean any individual, corporation, partnership, joint venture, trust, unincorporated organization, limited liability company, estate, association, joint stock company, company other form of business or legal entity or governmental authority.

 

(d)   “Subsidiary” shall have the meaning provided in Rule 12b-2 under the Exchange Act.

 

Article VI

Covenants of the Company

 

6.1. The Company shall not declare or pay any dividend or other distribution to any of its shareholders until this Note has been paid in full or converted in full in accordance with the terms hereof.

 

6.2. The Company initially will take steps to reserve Common Stock a number of shares of Common Stock for the Note equal to 130% of the quotient of (i) the amount of unpaid principal and interest outstanding hereunder divided by (ii) the Conversion Price as of the Issuance Date. Thereafter, a as long as the Note is outstanding, the Company shall take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of this Note, 130% of the number of shares of Common Stock as shall from time to time be necessary to effect the conversion at the then-effective Conversion Price of the Note (the“Required  Reserve Amount”).

 

6.3. If at any time while this Note remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of this Note at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Notes then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than 90 days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each shareholder with a proxy statement and shall use its best efforts to solicit its shareholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the shareholders that they approve such proposal.

 

Article VII

Miscellaneous

 

7.1. Governing Law. This Note is being delivered as a sealed instrument in the State of Delaware and shall be governed by and construed and enforced in accordance with the laws of the State of Delaware(regardless of the laws that might otherwise govern under applicable principles of conflicts of law of such State).

 

7.2. Headings. Article and section headings in this Note are included herein for purposes of convenience of reference only and shall not constitute a part of this Note for any other purpose.

 

7.3. Certain Expenses. Each of the Company, on the one hand, and the Holder, on the other hand, shall bear all of its own expenses incurred in connection with the negotiation, execution and delivery of this Note. In the event of litigation hereunder, the non-prevailing party shall pay all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by the prevailing party 

 

 

  

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7.4. Binding Effect. The obligations of the Company and the Holder set forth herein shall be binding upon the successors and assigns of each such party, whether or not such successors or assigns are permitted by the terms hereof.

 

7.5. Amendments. This Note may not be modified or amended in any manner except in a writing executed by the Company and the Holder.

 

7.6. Compliance with Securities Laws . The Holder of this Note acknowledges that this Note is being acquired solely for the Holder’s own account and not as a nominee for any other party, and for investment, and that the Holder shall not offer, sell or otherwise dispose of this Note or any securities acquired upon conversion of this Note in the absence of a registration statement in effect with respect thereto under the Securities Act except pursuant to an exemption from registration under the Securities Act and, if requested, delivery of an opinion of counsel reasonably satisfactory to the Company that such registration is not required. Any Note issued in substitution or replacement for this Note, as well as any securities acquired upon conversion thereof, shall be stamped or imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION AVAILABLE UNDER SUCH ACT.”

 

7.7. Jurisdiction. Each of the Company and the Holder hereby irrevocably consents and submits to the exclusive jurisdiction of the United States District Court of Delaware in connection with any dispute arising out of or relating to this Note, waives any objection to venue in such District (unless such court lacks jurisdiction with respect to such dispute, in which case, each of the parties hereto irrevocably consents to the jurisdiction of the courts of the State of Pennsylvania in connection with such dispute and waives any objection to venue in Pennsylvania), and agrees that service of any summons, complaint, notice or other process relating to such dispute may be effected in the manner provided by Section 6.10.

 

7.8. No Assignment by Company. The Company shall not be permitted to assign any of its rights or obligations under this Note, and any such assignment shall be null and void ab initio.

 

7.9. Company Waivers.

 

(a) Except as otherwise specifically provided herein, the Company and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all withou t affecting the liability of the other persons, firms or corporations liable for the payment of this Note AND DO HEREBY WAIVE TRIAL BY JURY.

 

(b) No delay or omission on the part of the Holder in exercising its rights under this Note, or course of conduct relat ing hereto, shall operate as a waiver of such rights or any other right of the Holder, nor shall any waiver by the Holder of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion.

 

 

  

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(c) THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION AND, TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

 

7.10.  Notices. All notices, claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given upon receipt if personally delivered, mailed or transmitted by rec ognized international courier service (return receipt requested) or transmitted by telecopier (with receipt acknowledged by the recipient or confirmed electronically) to the respective addresses set forth on the first page hereof, or to such other address as the person to whom notice is to be given may have previously furnished to the other persons in writing in the manner set forth above.

 

7.11. Counterparts. This Note may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

 

  

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IN WITNESS WHEREOF, this Convertible Promissory Note has been executed and delivered by the Company as of the date first written above.

 

	  

	
 

	 	
LITHIUM TECHNOLOGY CORPORATION

	 	 
	 	
 

	 	By:	 
	 	 	
Name:  Theo M.M. Kremers 

	 	 	Title:    CEO 

 

 

Accepted and agreed:

 

By:

 

 

        _______________________________________________

Name: dhr. J. van Driel 

Title:

 

 

  

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EXHIBIT “A”

 

 

	
Date

	
Principal

Amount (€)

	
Principal

Amount ($)

	
Exercise

Price

	
Maximum Number

of Common

Shares

	
06-Sep-2010

	
€125,000

	
$161,061

	
$0,07

	
2,300,881

 

 

	
Maturity

in Years

	
Maximum

Interest

Amount (€)

	
Maximum

Interest

Amount ($)

	
Exercise

Price

	
Maximum Number

of Common

Shares

	
1.06

	
€11,925

	
$15,365

	
$0,07

	
219,500

 

 

  

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EXHIBIT “B”

 

NOTICE OF CONVERSION

 

(To be executed by the Holder in order to Convert the Convertible Promissary Note)

 

in whole / in part *

 

 

TO: LITHIUM TECHNOLOGY COMPANY

 

The undersigned hereby irrevocably elects to convert €                                                                   of the principal amount and accrued interest of the above Note into Shares of Common Stock of Lithium Technology Corporation, according to the conditions stated therein, as of the Conversion Date written below.

 

 

	
Conversion Date:

	 	  
	
Applicable Conversion Price:

	 	
$ 0,07

	
Applicable Exchange Rate:

	 	
0.77610 (Dollar to Euro)

	
Signature:

	 	  
	
Name:

	 	  
	
Address:

	 	  
	
Amount to be converted (Principal) :

	 	
€

	
Amount to be converted (Interest) :

	 	
€

	
Amount of Note unconverted (Principal) :

	 	
€

	
Amount of Note unconverted (Interest) :

	 	
€

	
Conversion Price per share :

	 	
€

	
Number of shares of Common Stock to be issued:

	 	  
	
Please issue the shares of Common Stock in the 

following name and to the following address:

	 	  
	
Issue to:

	 	  
	
Authorized Signature:

	 	  
	
Name:

	 	  
	
Title:

	 	  
	
Phone Number:

	 	  
	  	 	  
	
Broker DTC Participant Code:

	 	  
	
 Account Number:

	 	  

 

* elect what is applicable.

 

  

Page 13 of 13ex-10_27.htm

EXHIBIT 10.26

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (“Agreement”) is made as of October 22, 2010, between LITHIUM TECHNOLOGY CORPORATION a Delaware corporation (the “Company”), and the investor set forth on the signature page hereto (the “Purchaser”).

RECITALS

This Agreement sets forth the terms and conditions upon which the Purchaser is purchasing shares of Company Common Stock, par value $0.01 per share (the “Shares”), from the Company in the amount set forth on Schedule I.

In consideration of the mutual covenants and other agreements set forth herein, the Company and the Purchaser hereby agree as follows:

1.           Purchase and Sale of Company Securities.  Subject to the terms and conditions of this Agreement, and in reliance on the representations, warranties and covenants contained herein, the Company shall sell to the Purchaser, and the Purchaser shall purchase from the Company, the Shares at the Closing (as herein defined) for the purchase price set forth on Schedule I in U.S. funds (the “Purchase Price”).

2.           Closing.  The parties agree that the closing of the purchase and sale of the Shares (the “Closing”) shall take place on the date hereof.  At the Closing, the Company shall convey the Shares to the Purchaser.

3.           Deliveries at the Closing.

3.1           At the Closing, the Company shall deliver to the Purchaser:

(a)           Certificates representing the Shares;

(b)           a certificate, dated as of the Closing date, of the Secretary or Assistant Secretary of the Company certifying (i) a complete and accurate copy of resolutions of the board of directors of the Company authorizing the execution, delivery and performance of this Agreement and (ii) a complete and accurate copy of the Certificate of Incorporation and Bylaws of the Company, in each case, as amended (and which, in the case of the Certificate of Incorporation, shall also be certified as of a recent date by the Secretary of State of Delaware);

(c)           a certificate of good standing for the Company, issued as of a recent date by the Secretary of State of Delaware; and

(d)           Such other documents as are reasonably requested by the Purchaser.

3.2           At the Closing, Purchaser shall pay to the Company the aggregate Purchase Price by wire transfer in same-day funds.

 

 

  

  

  

 

4.           Representations and Warranties of the Company.  The Company represents and warrants to the Purchaser, except as set forth in the Company’s disclosure schedule delivered with this Agreement (the “Disclosure Schedule”), as follows:

4.1           Organization; Status.  The Company and each of its subsidiaries is an entity duly organized, validly existing and, if applicable, in good standing under the laws of its jurisdiction of organization and has full power and authority to own, operate and lease its properties and carry on its business as currently conducted.

4.2           Authorization, Enforcement.  The Company has full power and authority to execute, deliver and perform this Agreement.  This execution, delivery and performance of this Agreement by the Company have been duly and validly authorized and approved by all necessary corporate action.  This Agreement has been duly executed and delivered by the Company and is a valid and binding agreement of the Company enforceable in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

4.3           Issuance of Shares.  The Shares to be issued at the Closing have been duly authorized by all necessary corporate action and the Shares, when paid for and issued in accordance with the terms hereof, shall be validly issued and outstanding, fully paid and nonassessable, not issued in violation of any preemptive or similar rights and free and clear of all liens or encumbrances.

4.4           No Conflict.  The execution, delivery and performance of this Agreement by the Company does not and will not: (a) conflict with or violate (i) any provisions of the Certificate of Incorporation, Bylaws, board resolutions or other organizational documents of the Company, (ii) any law, ordinance, regulation or administrative guidance applicable to the Company, or (iii) any decree or order of any court or administrative or other governmental body which is either applicable to, binding upon or enforceable against the Company; or (b) result in any breach of or default (including any put, call, acceleration, termination right or other adjustment) under any mortgage, contract, agreement, indenture, trust, or other instrument which is either binding upon or enforceable against the Company.

4.5           Filings; Consents.  The execution, delivery and performance of this Agreement does not and will not require any authorization, consent, approval, license, or exemption of, or filing or registration with, any United States federal, state or local court or United States federal, state or local governmental department, commission, board, bureau, agency or instrumentality of government, or any other third party, except (a) such as shall have been lawfully and validly made or obtained on or prior to the date hereof, (b) a current report on Form 8-K by the Company relating to this Agreement, (c) the registration statement contemplated by Section 7.4 hereof, and (d) the Form D contemplated by Section 7.6 hereof.

4.6           Capitalization.  As of the date hereof, the authorized capital stock of the Company consists of 3,000,000,000 shares of Common Stock, par value $0.01 per share and 100,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”).  As of the date hereof, 1,803,839,699 shares of Common Stock and no shares of Preferred Stock are issued and outstanding.  Except as disclosed in the reports, forms and documents filed by the Company with the Securities and Exchange Commission (the “SEC”) prior to the date hereof (the “SEC Reports”) or except as set forth in the Disclosure Schedule:

 

  

- 2 - 

  

 

(a)           All of such outstanding shares have been duly authorized, validly issued and are fully paid and nonassessable, and issued in compliance with applicable securities laws.  No shares of Common Stock are subject to preemptive rights, antidilution rights, rights of first refusal or any other similar rights or any liens or encumbrances of any nature.

(b)           There are no voting trusts, proxies or other agreements to which the Company or any of its subsidiaries is a party with respect to the voting, issuance, disposition or transfer of their capital stock (or other equity interests).

(c)           The Company and its subsidiaries are not subject to any obligation to (i) repurchase, redeem or otherwise acquire any of their capital stock (or other equity interests), (ii) make any investment (in the form of a loan, capital contribution or otherwise) in any person, (iii) declare dividends or make any other distributions with respect to their capital stock (or other equity interests) or refrain from making any such distributions or (iv) grant any other person the right to elect, designate or nominate any members of the board of directors of the Company or any of its subsidiaries.

(d)           The issuance and sale of the Shares hereunder will not obligate the Company or any of its subsidiaries to issue any other securities to any person and will not result in the adjustment of the exercise, conversion, exchange or reset price of any other securities of the Company or its subsidiaries.

(e)           There are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or other rights convertible into or exchangeable or exercisable for, any shares of capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable or exercisable for, any shares of capital stock of the Company or any of its subsidiaries.

(f)           There are no outstanding debt securities and there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of their securities under the Securities Act of 1933, as amended (the “Securities Act”)

 

 

4.7           Company Organizational Documents. The Company has furnished to the Purchaser complete and accurate copies of the Company’s Amended and Restated Certificate of Incorporation, as amended and in effect on the date hereof, and the Company’s By-laws, as amended and in effect on the date hereof.

 

  

- 3 - 

  

 

4.8           Compliance.  Since the date (the “Balance Sheet Date”) of the audited balance sheet contained in the last Annual Report on Form 10-K included in the SEC Reports (the “Balance Sheet”), neither the Company nor any of its subsidiaries has (a) been in breach or violation (and no event has occurred that, with notice and/or the lapse of time, would result in any such breach or violation), in any material respect, of any indenture, loan, credit agreement, material contract, law, order, ruling or regulation or their organizational documents or (b) received any written notice, order or other communication from any person of any alleged, actual, or potential such breach or violation (or event that, with notice and/or the lapse of time would result in any such breach or violation).  The Company and each subsidiary hold all material permits, licenses, franchises and approvals required for the operation of their businesses and the Company has received no notice of the potential revocation or adverse modification thereof.

4.9           SEC Filings.  Except for the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010, since November 16, 2009 the Company has filed all forms, reports and documents required to be filed by it with the SEC on a timely basis.  Except as set forth in the Disclosure Schedule, as of their respective dates, or, if amended or superseded by a subsequent filing made prior to the date hereof, as of the date of such amendment or filing, the SEC Reports (together with any exhibits thereto and documents incorporated by reference therein) complied in all material respects with the requirements of the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable, and none of them, when filed, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.  Except as set forth in the Disclosure Schedule, the financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.  Except as set forth in the Disclosure Schedule, such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”) and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.  Except as set forth in the Disclosure Schedule, neither the Company nor any subsidiary has any liability required by GAAP to be reflected on a balance sheet other than (i) liabilities reflected on the Balance Sheet, (ii) liabilities incurred in the ordinary course since the Balance Sheet Date, or (iii) liabilities which do not exceed $25,000 individually and $250,000 in the aggregate.

4.10           Absence of Certain Changes.  Since the Balance Sheet Date, the Company and its subsidiaries have conducted their businesses only in the ordinary course and there has not been any event, condition, circumstance, development, change or effect that, individually or in the aggregate, (i) would prevent, materially delay or materially impede the consummation of the Closing or (ii) has had, or would reasonably be expected to have, a material adverse effect on the business, operations, properties, assets, liabilities, condition (financial or otherwise), prospects or results of operations of the Company and its subsidiaries, taken as a whole.

 

 

  

- 4 - 

  

 

4.11           Brokers.  The Company has not employed any broker, investment banker or finder or incurred any liability for any brokerage fees, commissions or finders fees in connection with this Agreement for which the Purchaser could have any liability.

4.12           Private Placement.  Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 5, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchaser as contemplated hereby.

5.           Representations and Warranties of Purchaser.  The Purchaser hereby represents and warrants to the Company as follows:

5.1           Organization; Status.  The Purchaser is an entity duly organized, validly existing and, if applicable, in good standing under the laws of its jurisdiction of organization and has full power and authority to own, operate and lease its properties and carry on its business as currently conducted.

5.2           Authorization, Enforcement.  The Purchaser has full power and authority to execute, deliver and perform this Agreement.  This execution, delivery and performance of this Agreement by the Purchaser have been duly and validly authorized and approved by all necessary corporate action.  This Agreement has been duly executed and delivered by the Purchaser and is a valid and binding agreement of Purchaser enforceable in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

5.3           No Conflict.  The Purchaser is not subject to or bound by any agreement, judgment, order or decree of any court or governmental agency which prevents the execution and consummation of this Agreement.

5.4           Investment Purpose.  The Purchaser is acquiring the Shares for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making  the representations herein, the Purchaser reserves the right to dispose of the Shares at any time in accordance with or pursuant to an effective registration statement covering the Shares or an available exemption under the Securities Act.

5.5           Experience.  The Purchaser is experienced in evaluating companies such as the Company, is able to fend for itself in transactions such as the one contemplated by this Agreement, has such knowledge and experience in financial and business matters that the Purchaser is capable of evaluating the merits and risks of the Purchaser’s prospective investment in the Company, and has the ability to bear the economic risks of the investment.

       5.6     Information. The Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and information it deemed material to making an informed investment decision regarding its purchase of the Shares, which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to ask questions of the Company and its management.  Neither such inquiries nor any other due diligence investigations conducted by the Purchaser or its advisors shall modify, amend or affect the Purchaser’s right to rely on the representations and warranties contained herein regarding the Company.  The Purchaser understands that its investment in the Shares involves a high degree of risk and the Purchaser has the financial wherewithal to lose its entire investment. The Purchaser is in a position regarding the Company, which, based upon economic bargaining power, enabled and enables the Purchaser to obtain information from the Company in order to evaluate the merits and risks of this investment. The Purchaser has sought such accounting, legal and tax advice, as it considered necessary to make an informed investment decision with respect to its acquisition of the Shares.   

 

  

- 5 - 

  

 

5.7           No Governmental Review. The Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares, or the fairness or suitability of the investment in the Shares, nor have such authorities passed upon or endorsed the merits of the offering of the Shares. The Purchaser understands and acknowledges that the Company has not undertaken and will undertake no efforts to comply with any laws of any jurisdiction outside the United States relating to the issuance and sale of the Shares.

 

5.8           Transfer or Resale. The Purchaser understands that: (i) the Shares have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) the Purchaser shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements; and (ii) any sale of such securities made in reliance on Rule 144 under the Securities Act (or a successor rule thereto) (“Rule 144”) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder.

 

5.9       Brokers. The Purchaser has not employed any broker, investment banker or finder or incurred any liability for any brokerage fees, commissions or finders fees in connection with this Agreement for which the Company could have any liability.

 

 

  

- 6 - 

  

 

6.           Indemnification.  The representations and warranties set forth in paragraphs 4 and 5 shall survive the Closing of this Agreement for a period of two (2) years from the Closing Date.  The Company shall indemnify and hold the Purchaser, and its affiliates, directors, officers, employees, shareholders, members, partners and agents (each, a “Purchaser Party”), harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (“Damages”) that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or (b) any action instituted against a Purchaser Party by any shareholder of the Company who is not a Purchaser Party, with respect to any of the transactions contemplated by this Agreement (unless such action is based upon a claim arising from a breach of such Purchaser’s representations, warranties or covenants under this Agreement).  The foregoing indemnification obligation shall not apply to any Damages caused by conduct of the Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance.  The Purchaser shall indemnify and hold the Company, and its affiliates, directors, officers, employees, shareholders, members, partners and agents (each, a “Company Party”), harmless from any and all Damages that any such Company Party may suffer or incur as a result of or relating to any breach of any of the representations, warranties, covenants or agreements made by the Purchaser in this Agreement (other than to the extent caused by conduct of the Company which constitutes fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against a party in respect of which indemnity may be sought pursuant to this Agreement, such indemnified party shall promptly notify the indemnifying party in writing, and the indemnifying party shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the indemnified party.  Any indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such separate counsel shall be at the expense of such indemnified party except to the extent that (i) the employment thereof has been specifically authorized by the indemnifying party in writing, (ii) the indemnifying party has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict of interest on any material issue between the position of the indemnifying party and the position of such indemnified party, in which case the indemnifying party shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.

7.           Covenants.

 

 

7.1           Confidentiality.  Each party will hold and will cause its consultants and advisors to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all documents and information concerning the other party furnished it by such other party or its representatives in connection with the transactions contemplated by this Agreement (except to the extent that such information can be shown to have been (i) previously known by the party to which it was furnished, (ii) in the public domain through no breach of this Section 7.1 by such party, or (iii) later lawfully acquired from other sources by the party to which it was furnished) and each party will not release or disclose such information to any other person, except its auditors, attorneys, financial advisors, bankers and other consultants and advisors in connection with this Agreement.  If the transactions contemplated by this Agreement are not consummated, such confidence shall be maintained except to the extent such information comes into the public domain through no breach of this Section 7.1 by the party required to hold it in confidence, and such information shall not be used to the detriment of, or in relation to any investment in, the other party and all such documents (including copies thereof) shall immediately thereafter be returned to the other party upon the written request of such other party.  Each party shall be deemed to have satisfied its obligation to hold such information confidential if it exercises the same care as it takes to preserve confidentiality for its own similar information.

 

 

  

- 7 - 

  

7.2           Publicity.  The Company and the Purchaser shall consult with each other prior to issuing any press releases or otherwise making public announcements with respect to this Agreement and will not issue or make any such release or announcement without the prior written consent of the other party, which will not be unreasonably withheld or delayed; provided, that a party may without the consent of the other party (but after prior consultation, to the extent practicable) issue or make such a release or announcement as required by law or securities exchange rules.

7.3           Legends; etc. The Purchaser understands that the certificates or other instruments representing the Shares shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

 

The Company shall, promptly following delivery by the Purchaser of a certificate for Shares bearing a restrictive legend, issue a certificate without such legend if, unless otherwise required by state securities laws, (i) such Shares are registered for resale under the Securities Act, or (ii) after such holder provides the Company with an opinion of Counsel, which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale, assignment or transfer of the Shares may be made without registration under the Securities Act.  The Company acknowledges and agrees that the Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Shares to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act.

7.4           Registration Rights.  Following December 17, 2010, Purchaser shall have the right to demand that the Company cause a registration statement relating to the resale of the Shares on a continuous or delayed basis pursuant to Rule 415 under the Securities Act to be filed with the SEC (the “Registration Statement”).  As promptly as practicable and in no event later than 45 days following a written demand for registration (such 45th day, the “Required Filing Date”) of the Shares by the Purchaser, the Company shall cause the Registration Statement be filed with the SEC and to become effective as promptly as practicable and in no event later than 90 days following the earlier of (a) the Required Filing Date and (b) the date such Registration Statement was filed, and to maintain the effectiveness thereof until the Purchaser has sold the entirety of the Shares; provided, that the Company’s obligation to cause the Registration Statement to be filed and to maintain the effectiveness thereof shall expire at such time as the entirety of the Shares can be publicly resold without restriction in the absence of registration.  For each thirty day period or portion thereof during which a breach of the obligations remains uncured, the Company shall pay to Purchaser 2% of the aggregate Purchase Price.  The Company’s obligations under this Section 7.4 shall be subject to such other terms and conditions are customary for registration rights in transactions of the type contemplated by this Agreement.  The Company and the Purchaser shall each pay 50% of the costs and expenses associated with the preparation and filing of the Registration Statement provided however the total of such costs and expenses that the Purchaser shall bear shall not exceed $50,000.

 

  

- 8 - 

  

 

7.5           Use of Proceeds.  The Company shall use the net proceeds from the sale of the Shares hereunder for working capital and general corporate purposes and shall not use such proceeds to redeem, repurchase or make any distributions with respect to its capital stock.

7.6           Form D; Securities Matters.  The Company agrees to timely file a Form D with respect to the Shares pursuant to Regulation D under the Securities Act and to provide a copy thereof to the Purchaser.  The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security that would be integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the sale of the Shares to the Purchaser.  The Company shall timely file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 and, on or prior to the date of such filing, shall have filed all other forms, reports and documents required to be filed by it under the Exchange Act.

7.7           Further Assurances.  Each party hereto shall execute and deliver such instruments and take such other actions as the other party may reasonably require in order to carry out the intent of this Agreement.

8.           Expenses.  All fees and expenses incurred by the Company in connection with this Agreement and all sales, transfer or other similar taxes payable in connection with this Agreement shall be borne by the Company, and all fees and expenses incurred by Purchaser shall be borne by Purchaser.

9.           Miscellaneous.

                                 9.1           Governing Law.  This Agreement 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 state and federal courts located in New York, New York, Borough of Manhattan with respect to any dispute arising under this Agreement or the transactions contemplated hereby. The parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. The 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 affect either party’s right to serve process in any other manner permitted by law. The 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.

                                 9.2           Headings, etc. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term and vice versa, and words denoting either gender shall include both genders as the context requires.

 

 

  

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                                 9.3           Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

 

                                 9.4           Entire Agreement; Amendments. This Agreement and the Disclosure Schedule sets forth the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or in the Disclosure Schedule, no party makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

                                 9.5           Notices. Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) at the address specified for such party on the signature page hereto, and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile or electronic mail (with confirmation of receipt and a copy by first class mail or air mail).

 

                                 9.6           Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. No party shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party; provided, that the Purchaser may assign this Agreement to an affiliate without the consent of the Company provided the representation contained in Section 5.5 hereof is true with respect to such affiliate.

                                 9.7           Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person other than the Purchaser Parties and the Company Parties.

  

                                 9.8           Counterparts; Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile or electronic transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

[signature page follows]

 

 

  

- 10 - 

  

 

IN WITNESS WHEREOF, the Company and Purchaser have duly executed this Agreement as of the date first set forth above.

 

 

 

	COMPANY:     	 LITHIUM TECHNOLOGY CORPORATION
	 	 	 
	 	By:	 
	 	 	 Name:      
	 	 	 Title:
	 	 	 
	 	 	 Address:
	 	 	 
	 	 	 Lithium Technology Corporation
	 	 	 5115 Campus Drive
	 	 	 Plymouth Meeting, PA  19462-1129
	 	 	 Facsimile No.:  610-940-6091
	 	 	 
	PURCHASER:	 	 ______________________________________
	 	 	 
	 	 By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	Address:
	 	 	 
	 	 	 ______________________________________
	 	 	 ______________________________________
	 	 	 ______________________________________
	 	 	 

 

 

  

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Schedule I

	
Name of Purchaser

	
Jurisdiction of Organization

	
Number of Shares of Company Common Stock Purchased

	
Purchase Price

	  	  	
 

 

83,333,333

	
 

 

U.S. $2,000,000 ($0.024 per share)

 

 

 

  

- 12 -

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