Document:

Stock Repurchase Agreement

 Exhibit 4.8 
  

NU SKIN ENTERPRISES, INC. 
  
 STOCK REPURCHASE AGREEMENT 
  
 This Stock Repurchase Agreement (this “Agreement”) is made as of July 27, 2004, by and among Nu Skin Enterprises, Inc., a Delaware
corporation (the “Company”), and the stockholders of the Company listed on Schedule I attached hereto (each a “Selling Stockholder” and together the “Selling Stockholders”). 
  
 In consideration of the mutual covenants and agreements contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Repurchase and Sale of Common Stock. 
  
 1.1 Sale and Issuance of Common Stock. 
  
 (a) Subject to the terms and conditions of this Agreement and the Company’s delivery of notice to the Selling
Stockholders pursuant to Section 5 of that certain Lock-Up Agreement dated as of October 22, 2003, by and among the Company and certain of its stockholders party thereto (the “Lock-Up Agreement”), (i) the Company agrees to
repurchase that number of shares of the Company’s Class A Common Stock, par value $0.001 (the “Stock”), listed opposite the name of each of the Selling Stockholders on Schedule I, and (ii) each of the Selling Stockholders,
severally and not jointly, agrees to sell that number of shares of the Stock listed opposite such Selling Stockholder’s name on Schedule I. The repurchase price of the shares of the Stock to be paid by the Company under this Agreement shall be
equal to the lesser of (A) 94% of the closing sale price of the Stock on July 27, 2004 (the “Notice Date”) which is the date the Company will give notice to the Selling Stockholders that the Company is exercising its right to
purchase shares of the Stock pursuant to the terms and conditions of the Lock-Up Agreement or (B) 94% of the average closing sale price of the Company’s Class A Common Stock on the Notice Date and the 14 trading days immediately preceding such
date (the “Per Share Purchase Price”). The aggregate Per Share Purchase Price shall be payable in cash by wire transfer or delivery of other immediately available funds pursuant to the Escrow Agreement (as defined below) and in the
amounts set forth on Schedule I. 
  
 1.2
Closing; Delivery. 
  
 (a) The repurchase and sale
of the Stock (the “Closing”) shall take place at the offices of Simpson Thacher & Bartlett LLP, 3330 Hillview Avenue, Palo Alto, California 94304 (or such other location mutually agreeable to the parties hereto) no later than
the fourth (4th) business day after the date of this Agreement. 
  
 (b) Upon execution of this Agreement, each Selling Stockholder shall deliver to American Stock Transfer & Trust Company, as custodian (the “Custodian”), a 

  

 
certificate or certificates for the number of shares of the Stock to be sold by such Selling Stockholder pursuant to this Agreement. 
  
 (c) Prior to Closing, the Company shall deliver to Bank One, N.A. (the
“Escrow Agent”) pursuant to an escrow agreement (the “Escrow Agreement”) (a form of which is attached hereto as Exhibit A) among the Escrow Agent, the Company, the Selling Stockholders and the purchasers
listed on Schedule II (the “Purchasers”) of that certain Stock Purchase Agreement, dated as of July 26, 2004 (the “Stock Purchase Agreement”), cash by wire transfer or delivery of other immediately available funds
in the amounts set forth opposite the names of the Selling Stockholders on Schedule I. 
  
 2. Representations and Warranties of the Selling Stockholders. Each Selling Stockholder severally and not jointly represents and warrants to the Company as of the date hereof and as of the Closing as
follows: 
  
 2.1 Authorization of Agreements. Such
Selling Stockholder has the full right, power and authority to enter into this Agreement, the Escrow Agreement, the Power of Attorney and the Custody Agreement referred to in Section 2.3 below and to sell, transfer and deliver the Stock to be sold
by such Selling Stockholder hereunder, and this Agreement, the Escrow Agreement, the Power of Attorney and the Custody Agreement, when executed and delivered by such Selling Stockholder, will each constitute a valid and legally binding obligation of
the Selling Stockholder, enforceable against the Selling Stockholder in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of general application
affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. The execution and delivery of this Agreement, the Escrow
Agreement, the Power of Attorney and Custody Agreement and the sale and delivery of the Stock to be sold by such Selling Stockholder and the consummation of the transactions contemplated herein and therein and compliance by such Selling Stockholder
with its obligations hereunder and thereunder have been duly authorized by such Selling Stockholder and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any tax, lien, charge or encumbrance upon the Stock to be sold by such Selling Stockholder or any property or assets of such Selling Stockholder pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other agreement or instrument to which such Selling Stockholder is a party or by which such Selling Stocking may be bound, or to which any of the property or assets of such Selling Stockholder
is subject, nor will such action result in any violation of the provisions of the charter or bylaws or other organizational instrument of such Selling Stockholder, if applicable, or any applicable treaty, law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over such Selling Stockholder or any of its properties. 
  
 2.2 Valid Title. Such Selling Stockholder has and will at the Closing have valid title to, or a valid
“security entitlement” within the meaning of Section 8-501 of the New York Uniform Commercial Code in respect of, the Stock to be sold by such Selling Stockholder hereunder, free and clear of any security interest, mortgage, pledge, lien,
charge, claim, equity or encumbrance of any kind, other than pursuant to this Agreement; and upon delivery of such 

  

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Stock and payment of the repurchase price therefor as herein contemplated, assuming the Company has no notice of any adverse claim, the Company will receive
valid title to the Stock repurchased by it from such Selling Stockholder, free and clear of any security interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of any kind. 
  
 2.3 Due Execution of Escrow Agreement, Power-of-Attorney and Custody
Agreement. Such Selling Stockholder has duly executed and delivered, in the form heretofore furnished to the Company, the Escrow Agreement, the Power of Attorney (the “Power-of-Attorney”) (the form of which is attached
hereto as Exhibit B) with Blake M. Roney and Brooke B. Roney as attorneys-in-fact (each an “Attorney-in–Fact”) and the Custody Agreement (the “Custody Agreement”) (the form of which is attached hereto as
Exhibit C) with American Stock Transfer & Trust Company as the Custodian; the Custodian is authorized to deliver the Stock to be sold by such Selling Stockholder hereunder; and each Attorney-in-Fact is authorized to execute and deliver this
Agreement on behalf of such Selling Stockholder, to sell, assign and transfer to the Company the Stock to be sold by such Selling Stockholder hereunder, to authorize the delivery of the Stock to be sold by such Selling Stockholder hereunder and
otherwise to act on behalf of such Selling Stockholder in connection with this Agreement. 
  
 2.4 Absence of Manipulation. Such Selling Stockholder has not taken, and will not take prior to the Closing, directly or indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Stock. 
  
 2.5 Absence of Further Requirements. No filing with, or consent, approval, authorization, order, registration,
qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the performance by each Selling Stockholder of its obligations under this Agreement or under the Custody Agreement, or in
connection with the sale and delivery of the Stock or the consummation of the transactions contemplated by this Agreement except such as may have previously been made or obtained or as may be required under the Securities Act of 1933, as amended
(the “Securities Act”), or state securities laws. 
  
 2.6 Certificates Suitable for Transfer. Certificates for all of the Stock to be sold by such Selling Stockholder pursuant to this Agreement in suitable form for transfer by delivery or accompanied by duly executed instruments
of transfer or assignment in blank with signatures guaranteed have been placed in custody with the Custodian with irrevocable conditional instructions to deliver such Stock to the Company pursuant to this Agreement. 
  
 2.7 Tax Advisors. Such Selling Stockholder has reviewed with
its own tax advisors the U.S. federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement. With respect to such matters, such Selling Stockholder relies solely on such advisors and not on any statements or
representations of the Company or any of its agents, written or oral. Such Selling Stockholder understands and agrees that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of the transactions
contemplated by this Agreement. 
  

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 2.8 Access to Data. Such Selling Stockholder has been given the opportunity to ask
questions of, and has received answers from, the Company with respect to the terms and conditions of this Agreement, the Power of Attorney, the Custody Agreement and the Lock-Up Agreements and publicly available information relating to the business
or financial condition of the Company. Such Selling Stockholder has also had access to and has reviewed the Company’s publicly available filings with the Securities and Exchange Commission including, but not limited to, the Risk Factors set
forth in Amendment No. 4 to the Company’s Registration Statement on Form S-3 (File Number 333-109836) filed on July 26, 2004, as well as the financial and business information contained in the Company’s most recent filings on Form 10-Q and
Form 10-K under the Securities Exchange Act of 1934, as amended. In addition, the Company has provided, on a confidential basis, to such Selling Stockholder the information set forth on Schedule II, and such Selling Stockholder has had an
opportunity to review such information and ask questions of, and has received answers from, the Company with respect to such information. Such Selling Stockholder has not been furnished with nor relied upon any representations or other information
(whether oral or written) relating to the business or financial condition of the Company from the Company or its representatives or agents other than as described above or set forth in the Company’s publicly available documents. 
  
 3. Representations and Warranties of the Company. The Company
represents and warrants to each Selling Stockholder as of the date hereof and as of the Closing as follows: 
  
 3.1 Authorization of Agreements. The Company has the full right, power and authority to enter into and deliver this Agreement and the Escrow
Agreement, and this Agreement and the Escrow Agreement, when executed and delivered by the Company, and assuming each of this Agreement and the Escrow Agreement is a valid and legally binding obligation of each of the Selling Stockholders, each of
this Agreement and the Escrow Agreement constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable
remedies. The Company has the full legal right and power and all authority and approval required to execute and deliver, or authorize execution and delivery of, this Agreement and the Escrow Agreement and all other instruments executed and delivered
by or on behalf of the Company in connection with the repurchase of the Stock to be repurchased by the Company from the Selling Stockholders hereunder. 
  
 3.2 Compliance with Other Instruments. The execution, delivery and performance of this Agreement and the Escrow Agreement by the Company and
the consummation of the transactions contemplated hereby and thereby will not result in any violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any provision of the
governing documents of the Company or any instrument, judgment, order, writ, decree or contract to which the Company or any of its subsidiaries is a party or by which it is bound, or any provision of any federal or state statute, rule or regulation
applicable to the Company or any of its subsidiaries. 
  

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 3.3 Due Execution of Escrow Agreement. The Company has duly executed and delivered the
Escrow Agreement. 
  
 4. Conditions of the Company’s
Obligations at Closing. The obligations of the Company to the Selling Stockholders under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived by the Company:

  
 4.1 Qualifications. All authorizations,
approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful sale of the Stock pursuant to this Agreement shall be obtained and effective as of
the Closing. 
  
 4.2 Opinion of Financial Advisor. A
reputable investment banking or other financial advisory firm shall have delivered a written opinion to the Special Committee of the Board of Directors of the Company, in a form acceptable to the Special Committee, with respect to fairness, from a
financial point of view, to the Company of the consideration to be paid by the Company to the Selling Stockholders for the Stock pursuant to this Agreement. 
  
 5. Waivers. 
  
 5.1 Notice of Option Exercise by Company. Each of the Selling Stockholders hereby waives the requirement that the Company provide at least
10 days’ prior written notice of its election to exercise its right to repurchase the number of shares of Stock listed opposite such Selling Stockholders’ name on Schedule I hereto pursuant to Section 5 of the Lock-Up Agreement.

  
 5.2 Partial Release from Lock-Up Agreement. The
Company hereby releases the Selling Stockholders from the provisions and restrictions of the Lock-Up Agreement in order to allow the Selling Stockholders to sell the shares of the Company’s Class A Common Stock listed opposite each Selling
Stockholders’ name on Schedule III hereto to the Purchasers pursuant to the terms of the Stock Purchase Agreement, provided, however, that such release shall only be effective (i) if the sale occurs contemporaneously with the repurchase
of the Stock pursuant to this Agreement and that (ii) if for any reason the consummation of the transactions set forth in the Stock Purchase Agreement shall not have occurred on or prior to August 15, 2004, this partial release from the
Lock-Up Agreement shall terminate and have no further force and effect. 
  
 5.3 Company Right to Purchase Additional Shares. Upon the consummation of the repurchase of the Stock pursuant to this Agreement, the Company shall be deemed to have waived its right to purchase any additional shares of the
Class A Common Stock under its rights set forth in Section 5 of the Lock-Up Agreement, provided, that it shall be a condition to this waiver that such shares be sold as set forth in the Stock Purchase Agreement contemporaneously with the
repurchase of the Stock pursuant to this Agreement. If for any reason the consummation of the transactions set forth in the Stock Purchase Agreement shall not have occurred on or prior to August 15, 2004, this waiver shall terminate and have
no further force and effect. 
  

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 6. Miscellaneous. 
  
 6.1 Survival. The representations and warranties of the Selling Stockholders and the Company contained herein
shall terminate on the first anniversary of the Closing. 
  
 6.2
Transfer; No Third-Party Beneficiaries. This Agreement shall not be assigned without the prior written consent of the Company or, if intended to be assigned by the Company, a majority-in-interest of the Selling Stockholders;
provided, that the Company may transfer its rights hereunder to an affiliate, so long as such affiliate agrees in writing to be bound by all obligations under this Agreement and confirms in writing the representations and warranties set forth
in Section 3 as if made by such affiliate. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement. For purposes of this Agreement, the term “majority-in-interest” shall mean the Selling Stockholders who hold a majority of the Stock to be sold pursuant to this Agreement. 
  
 6.3 Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to principles of conflicts of laws. 
  
 6.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. 
  
 6.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. 
  
 6.6
Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or sent by telegram or fax, or four (4) business days after
being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page hereto, or as subsequently modified by written notice, and
if to any of the Selling Stockholders with a copy to P. Christian Anderson, Snell & Wilmer L.L.P., Gateway Tower West, 15 W. South Temple, Suite 1200, Salt Lake City, Utah 84101, Facsimile: (801) 257-1800, and if to the Company with a copy to
Mark Bonham, Wilson Sonsini Goodrich & Rosati, Professional Corporation, 2795 E. Cottonwood Parkway, Suite 300, Salt Lake City, Utah 84121, Facsimile: (801) 993-6499. 
  
 6.7 Finder’s Fee. Each party represents that it neither is nor will be obligated for any finder’s
fee or commission in connection with this transaction. The Company agrees to indemnify and to hold harmless each Selling Stockholder from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and
expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees, or representatives is responsible. Each Selling Stockholder severally and not jointly agrees to indemnify and hold harmless
the Company from any liability for any commission or 

  

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compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which such
Selling Stockholder or any of its officers, employees or representatives is responsible. 
  
 6.8 Fees and Expenses. Each of the Selling Stockholders and the Company shall pay their respective fees and all other associated expenses incurred by such party in connection with the negotiation,
execution, delivery and performance of the Agreement. 
  
 6.9
Attorney’s Fees. If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of any of the Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs
and necessary disbursements in addition to any other relief to which such party may be entitled. 
  
 6.10 Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company, on the one
hand, and a majority-in-interest of the Selling Stockholders on the other hand. Any amendment or waiver effected in accordance with this Section 6.10 shall be binding upon the Company and each transferee of the Stock, each future holder of all such
Stock, and each of the Selling Stockholders. 
  
 6.11
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable
and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be
enforceable in accordance with its terms. 
  
 6.12 Delays or
Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such
non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on
the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded
to any party, shall be cumulative and not alternative. 
  
 6.13
Entire Agreement. This Agreement, and the documents referred to herein, constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to
the subject matter hereof existing between the parties hereto are expressly canceled. 
  

 -7- 

 6.14 Survival. This representations and warranties of the Company and the Selling
Stockholders contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing. 
  
 [Signature Pages Follow] 
  

 -8- 

 IN WITNESS WHEREOF, the parties have executed this Stock Repurchase Agreement as of the date first
written above. 
  

			
	 COMPANY:

	
	NU SKIN ENTERPRISES, INC.
		
	By:	 	 /s/ D. Matthew Dorny

			
	 Name:
	 	 D. Matthew Dorny

			
	 Title:
	 	 Vice President

  
 [Signature
Page to Stock Repurchase Agreement] 
  

			
	 SELLING STOCKHOLDERS:

	
	Blake M. Roney, as Attorney-In-Fact acting on behalf of each of the Selling Stockholders listed on Schedule I to this Stock Repurchase Agreement
	
	/s/ Blake M. Roney

			
	Blake M. Roney, Attorney-In-Fact

  
 [Signature
Page to Stock Repurchase Agreement] 
  

 SCHEDULE I 
  

SELLING STOCKHOLDERS 
  

						
	 Name of Selling Stockholder

	  	Selling
Stockholder
Commitment
(in shares)

	  	Amount Payable
by Escrow Agent
(in U.S. Dollars)

	 Entities affiliated with Blake M. Roney:
	  	 	  	 	 
	 BMR NS Holdings LLC
	  	1,212,288	  	$	27,421,954.56
	 Nedra D. Roney and affiliated entities:
	  	 	  	 	 
	 Nedra D. Roney, individually
	  	922,883	  	 	20,875,613.46
	 The NR Trust
	  	48,935	  	 	1,106,909.70
	 NR Rhino Company, L.C.
	  	303,835	  	 	6,872,747.70
	 Entities affiliated with Steven J. Lund:
	  	 	  	 	 
	 SJL NS Holdings LLC
	  	101,024	  	 	2,285,162.88
	 Entities affiliated with Brooke B. Roney:
	  	 	  	 	 
	 BBR NS Holdings LLC
	  	101,024	  	 	2,285,162.88
	 Entities affiliated with Sandra N. Tillotson:
	  	 	  	 	 
	 Sandra N. Tillotson Family Trust
	  	404,096	  	 	9,140,651.52
	 	  	
	  	
	

	 Total:
	  	3,094,085	  	$	69,988,202.70
	 	  	
	  	
	

  
 [Schedule I
to Stock Repurchase Agreement] 
  

 SCHEDULE II 
  
 CONFIDENTIAL INFORMATION 
  
 [Schedule II to Stock Repurchase Agreement] 
  

 SCHEDULE III 
  

			
	 Purchaser

	  	Purchase Commitment

	 Chilton International, L.P.
	  	400,125
	 Chilton QP Investment Partners, L.P.
	  	219,363
	 Chilton Investment Partners, L.P.
	  	75,545
	 Chilton Opportunity International, L.P.
	  	22,666
	 Chilton Opportunity Trust, L.P.
	  	38,578
	 Chilton Global Partners, L.P.
	  	23,723
	 Chilton Small Cap Partners, L.P.
	  	72,974
	 Chilton Small Cap International, L.P.
	  	147,026
	 Invus Public Equities L.P.
	  	500,000
	 Total
	  	1,500,000

  
 [Exhibit C
to Stock Repurchase Agreement]Form of Consulting Agreement

 Exhibit 10.64 
  
 CONSULTING AGREEMENT BETWEEN 
 LITHIUM TECHNOLOGY CORPORATION 
 AND ILION TECHNOLOGY CORPORATION 
  
 THIS CONSULTING AGREEMENT is made as of the 12th day of July, 2004 between
LITHIUM TECHNOLOGY CORPORATION, a Delaware corporation (the “Company”) and ILION TECHNOLOGY CORPORATION, a Delaware corporation (“Consultant”). 
  
 WHEREAS, the Company is in need of the special expertise of Consultant in connection with certain lithium battery technology
matters; and 
  
 WHEREAS, Consultant is recognized for its
credentials and experience in such field, and the parties desire to enter into this Agreement for their mutual benefit. 
  
 1. Term of Agreement. This Agreement shall commence on the date hereof (the “Commencement Date”) and shall end on September 15,
2004, unless extended pursuant to paragraph 4 below (the “Term”). 
  
 2. Responsibilities of Consultant. During the Term, Consultant shall: 
  
 (a) Be a consultant to the Company; 
  
 (b) Provide technology consulting services to the Company in the lithium battery field covering such matters as are mutually agreed by the
Company and the Consultant; and 
  
 (c) Be
available on as needed basis in order to perform such duties for the Company, provided, however, Consultant shall not be obligated to provide such services more than five hours per month nor shall Consultant be obligated to perform such services on
site at the Company’s facilities. 
  

 3. Compensation to Consultant. In consideration for the consulting services provided by
Consultant as specified in Section 2 above, and other good and valuable consideration, the Company agrees during the Term: 
  
 (a) To pay to Consultant $15,000 for the Term of this Agreement with payment to be made on the Commencement Date; 
  
 (b) To issue to Consultant on the Commencement Date a four
year warrant to purchase 35,000 shares of Company Common Stock at an exercise price of 110% of the closing bid price of the Company’s Common Stock on the date of this Agreement. 
  
 4. Extension of Term. If, by the end of the Term, Consultant’s shares of common stock in the Company (the
“Shares”) are not purchased in a private transaction pursuant to an Agreement of even date herewith between Consultant and the purchaser named therein or otherwise, the Term shall be extended on a month to month basis. During any such
extension, the Company agrees to make payments to Consultant of $24,100.75 per month on the fifteenth of each month commencing on September 15, 2004 and ending on August 15, 2005. Consultant has this day deposited with Gallagher, Briody & Butler
as Escrow Agent (the “Escrow Agent”) the 289,209 shares of Company Common Stock owned by them together with twelve stock powers duly endorsed in blank and containing medallion signature guarantees. If the Term is extended, the following
provisions shall apply to the Shares: 
  
 (a)
Upon receipt of notice from the Company together with evidence that it has made a monthly consulting payment, Gallagher, Briody & Butler shall notify Consultant of its intent to release 1/12 of the Shares to the Company. Unless it receives a
written objection from Consultant within five (5) days of its receipt of notice, such Shares shall be released to the Company. 
  

 (b) If a monthly consulting payment is not made within 15 days of its due date,
Consultant may give written notice of default to the Company and Escrow Agent and the Escrow Agent shall (unless it receives a written objection from the Company within five (5) days of its receipt of notice) release the Shares (or any portion of
the Shares still held by the Escrow Agent) to the Consultant. Any proceeds received by the Consultant with respect to the sale of the Shares shall reduce the amount owed by the Company hereunder. 
  
 The acceptance by the Escrow Agent of its duties as such under this Agreement
is subject to the following terms and conditions, which all parties to this Agreement hereby agree shall govern and control with respect to the rights, duties, liabilities and immunities of the Escrow Agent. 
  
 (a) The Escrow Agent is not a party to, and is not bound by,
any agreement which may be evidenced by, or arise out of, the foregoing instructions, other than as expressly therein set forth. 
  
 (b) The Escrow Agent shall be protected in acting upon any written notice, request, waiver, consent, receipt or other paper or document
which the Escrow Agent in good faith believes to be genuine and what is purports to be. 
  
 (c) The Escrow Agent shall not be liable for any error of judgment, or for any act done or step taken or omitted by it in good faith, or
for anything which it may do or refrain from doing in connection herewith, except its own negligence or misconduct. 
  
 (d) The Escrow Agent shall not be liable for any diminution in value of the Shares while held by the Escrow Agent, including during any
period of dispute between the parties as to the proper disposition of the Shares. 
  

 (e) The Escrow Agent may consult with, and obtain advice from, legal counsel in the event
of any dispute or question as to the construction of any of the provisions hereof or its duties hereunder, and it shall incur no liability and shall be fully protected in acting in good faith in accordance with the opinion and instructions of such
counsel. 
  
 [Signatures appear on next page] 
  

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

			
	LITHIUM TECHNOLOGY CORPORATION
		
	By:	 	 
	 	 	 Name:

	 	 	 Title:

  

			
	ILION TECHNOLOGY CORPORATION
		
	By:	 	 
	 	 	 Name:

	 	 	 Title:

  

			
	GALLAGHER, BRIODY & BUTLER
		
	By:	 	 
	 	 	 Name:

	 	 	 Title:

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