Document:

ex-10_6.htm

Adamis Pharmaceuticals Corporation 8-K

Exhibit 10.6

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is dated as of November 9, 2010 (the “Effective Date”) and is entered into by and between Adamis Pharmaceuticals Corporation, a Delaware corporation (“Company”), and Richard L. Aloi (“Executive”).

 

RECITALS

 

A.           Executive is currently employed by the Company as President of its Adamis Labs division.

 

B.           The Company and Executive desire to formally state the terms and conditions of Executive’s employment by the Company and to provide Executive with certain benefits upon a qualifying termination of such employment.

 

C.           The Company desires to employ Executive in the executive capacity hereinafter stated, and the Executive desires to enter into the employ of the Company in such capacity for the period and with the terms and conditions set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the promises and the covenants set forth in this Agreement and for other valuable consideration, the parties hereby agree as follows:

 

1.           Employment.  The Company hereby employs Executive as President of its Adamis Labs division, assigned with responsibilities to do and perform all services, acts, or things necessary or advisable to manage and conduct the business of the Company, subject at all times to the policies set by the Board of Directors of the Company (the “Board”), and to the consent of the Board when required by the terms of this contract.  Executive hereby accepts such employment and agrees to devote such time and energies as appropriate to fulfill all responsibilities to the Company.  Executive shall be employed at will.

 

2.           Compensation.  In consideration for all services rendered by Executive under this Agreement, Executive shall receive the compensation described in this Section 2.  All such compensation shall be paid subject to appropriate tax withholding and similar deductions.

 

(a)           Salary.  Executive shall be paid an initial annual salary of $500,000, payable in accordance with the Company’s normal practices in the payment of salary and wages practices, in equal installments, but not less than 24 increments annually.

  

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(b)           Executive Benefit and Incentive Compensation Plans.  During employment hereunder, Executive shall be entitled to receive those benefits which are routinely made available to executive officers of the Company, including participation in any executive stock ownership plan, profit sharing plan, incentive compensation or bonus plan, retirement plan, Company-provided life insurance, or similar executive benefit plans maintained or sponsored by the Company.  The Company shall not take any action that would materially diminish the aggregate value of Executive’s fringe benefits as they exist as of the Effective Date of this Agreement or as the same may be increased from time to time, except for actions taken with respect to officers or employees generally.

 

(c)           Expense Reimbursement.  The Company shall promptly reimburse Executive for all reasonable expenses necessarily incurred during conduct of Company business, and for which adequate documentation is presented, but in no event later than December 31 of the year following the year in which the expense was incurred.

 

(d)           Personal Time Off.  Executive shall be entitled to paid time off in accordance with the Company’s policies applicable to executives.

 

3.           Termination.  Executive’s employment may be terminated as follows, with the following effects:

 

(a)           Death.  Executive’s employment shall terminate immediately upon the Executive’s death, in which event the Company’s only obligations hereunder shall be to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by the Executive prior to the date of his death.  If Executive’s employment ceases as a result of death, then all unvested options to purchase Common Stock of the Company held by Executive shall immediately terminate and become unexercisable and all vested options held by Executive shall remain exercisable until the one year anniversary of the date of cessation of service.

 

(b)           Disability.  In the event the Executive is disabled from performing his assigned duties under this agreement due to illness or injury for a period in excess of sixty (60) consecutive days or a period or periods of more than one hundred and twenty (120) days in the aggregate in any twelve month period, the Board, in its sole discretion, may terminate Executive’s employment immediately upon written notice to Executive, in which event the Company’s only obligations hereunder shall be to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by the Executive prior to the effective date of termination.  If Executive’s employment ceases as a result of disability, then all unvested options to purchase Common Stock of the Company held by Executive shall immediately terminate and become unexercisable and all vested options held by Executive shall remain exercisable until the one year anniversary of the date of cessation of service.

 

(c)           For Cause.  The Company may terminate Executive’s employment for Cause immediately upon written notice from the Board to Executive.  For purposes of this Agreement, “Cause” means the occurrence of any one or more of the following: (i) Executive’s conviction of or plea of nolo contendere to any felony crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) Executive’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) Executive’s intentional, material violation of any contract or agreement between the Participant and the Company or of any statutory duty owed to the Company; (iv) Executive’s unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) Executive’s gross misconduct.  In the event Executive’s employment is terminated for Cause, the Company shall have no further obligations to Executive other than to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by Executive prior to the effective date of such termination.

 

  

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(d)           Without Cause.  The Company in its sole discretion may terminate Executive’s employment without Cause (as defined above) or prior warning immediately upon written notice from the Board to Executive, in which event, the Company shall pay to Executive all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by Executive prior to the effective date of termination, and provided such termination is a “separation from service” as such term is defined in Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”) and the applicable guidance thereunder, contingent upon Executive’s delivery to the Company of an effective Release and Waiver as provided in Section 3(e) below, the Company shall also provide the following benefits to Executive: (i) severance consisting of continued payment of Executive’s base salary at the rate in effect as of the effective date of termination, less standard deductions and withholdings, for a period of three (3) months following the effective date of termination, subject to acceleration of such payments into a single lump-sum cash severance payment in the event a Change in Control (as defined below, provided that the Change in Control is an event described in Code Section 409A(a)(2)(A)(v)) of the Company has occurred prior to the date of termination (but not more than two years prior to such termination) or a Change in Control occurs within ninety (90) days after the date of termination of Executive’s employment, provided that any such acceleration complies with the provisions of Code Section 409A(a)(3); (ii) to the extent that Executive is eligible to continue medical benefits under COBRA and upon timely election by Executive complying with COBRA, payment of all premiums required to continue Executive’s medical, dental and vision insurance coverage pursuant to COBRA for a period of three (3) months following the date of termination (with Executive being responsible to pay that amount of the portion of the premiums, if any, that Executive would have been responsible to pay if Executive had remained an employee during such period) or, if earlier, the date that Executive accepts full time employment with another employer; and (iii) immediate acceleration of the vesting of all options to purchase the common stock of the Company granted to Executive prior to the effective date of such termination (the “Options”) such that Executive shall be deemed vested as to the same number of shares as if Executive had continued to be employed by the Company for a period of three (3) months following the effective date of such termination (subject to the additional accelerated vesting provided in Section 4(b) in the event Executive is terminated by the Company without Cause within 90 days prior to or within 13 months following the effective date of a Change in Control) and all vested options held by Executive shall remain exercisable until the one year anniversary of the date of cessation of service.  As a condition to receiving the continuing benefits specified in this Section 3(d), to the maximum extent permitted by applicable law, during the three (3) month period following the Executive’s termination date, Executive shall not engage in any employment or business activity that is directly competitive with the Company’s business activities as of such termination date and Executive shall not induce any employee of the Company to leave the employ of the Company.

 

(e)           Release and Waiver. As a condition to receiving the benefits specified in Sections 3(d) and 4(b) of this Agreement, Executive must deliver to the Company a fully effective waiver and release of claims in the form attached hereto as Exhibit A (the “Release and Waiver”) within the time frame set forth therein, but in no event later than forty-five (45) days following the Executive’s termination date.

 

  

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(f)           Voluntary Termination by Executive.  Executive may terminate his employment hereunder at any time, whether with or without cause, effective thirty (30) days after delivery of written notice of such termination to the Company, except for Executive’s Emergency Need. “Emergency Need”, as used in this Section, is defined to be the advent of illness or related health issues in Executive or his immediate family which a medical doctor would conclude poses a mortal health risk to that person.  The Company shall have the option, in its sole discretion, to specify an earlier termination date than that provided by Executive in the written notice.  Upon voluntary termination pursuant to this Section, the Company shall have no further obligations to Executive other than to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by Executive prior to effective date of termination as determined by the Company.  If Executive voluntarily terminates his employment, then all unvested options to purchase Common Stock of the Company held by Executive shall immediately terminate and become unexercisable and all vested options held by Executive shall remain exercisable for six (6) months from the date of the voluntary termination.

 

(g)           Resignation as a Director.  In the event of any termination of employment pursuant to this Agreement, Executive shall be deemed to have resigned voluntarily from the Board and any Committee of the Board, and of the board of directors (and any committee thereof) of all subsidiaries of the Company, upon the effective date of termination or such earlier date as may be agreed in writing between the Company and Executive, and Executive’s signature on this Agreement shall, without the need to any further action, constitute Executive’s resignation from such boards of directors in such circumstance.

 

(h)           Returning Company Documents.  In the event of any termination of Executive’s employment hereunder, Executive shall, prior to or on such termination deliver to the Company (and will not maintain possession of or deliver to anyone else) any and all devices, records, data, data bases software, software documentation, laboratory notebooks, notes, reports, proposals, lists, customer lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any of the above aforementioned items belonging to the Company, its successors or assigns.

 

4.           Change in Control.

 

(a)           Option Acceleration Upon a Change in Control.  Effective immediately upon the closing of a Change in Control of the Company, the vesting of all of the then unvested shares of Common Stock subject to the Options shall be accelerated in full and the Options shall become fully vested and immediately exercisable as to such additional vested shares (and, if any Options have been early exercised by Executive, the reacquisition or repurchase rights held by the Company with respect to the shares of Common Stock subject to such acceleration shall lapse in full, as appropriate).

 

  

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(b)           Benefits Upon Termination.  In the event that Executive’s employment by the Company is terminated without Cause (as defined above) or Executive terminates his employment for Good Reason (as defined below) within ninety (90) days prior to or within thirteen (13) months following the effective date of a Change in Control (as defined below) of the Company, contingent upon Executive’s delivery to the Company of a fully effective Release and Waiver as provided in Section 3(e) and provided such termination is a “separation from service” as such term is defined in Code Section 409A(a)(2)(A)(i), the Executive shall be entitled to the benefits and payments specified in Sections 3(d)(i) and 3(d)(ii) above, and the vesting of the unvested shares of Common Stock subject to the Options shall immediately accelerate in full such that the Options shall become fully vested and exercisable with respect to all of the shares of Common Stock subject to such Options (and, if any Options have been early exercised by Executive, the reacquisition or repurchase rights held by the Company with respect to the shares of Common Stock subject to such acceleration shall lapse in full, as appropriate).

 

(c)           Change in Control.  “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(i)           any Exchange Act Person (as defined below) becomes the beneficial owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction.  Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person from the Company in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (B) solely because the level of beneficial ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the beneficial owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities beneficially owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur (for purposes of this Section 4(c), “Exchange Act Person” means any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)), except that “Exchange Act Person” shall not include (A) the Company or any subsidiary of the Company, (B) any employee benefit plan of the Company or any subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) an entity beneficially owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their beneficial ownership of stock of the Company; or (E) any natural person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the date of this Agreement, is the beneficial owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities);

  

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(ii)          there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not beneficially own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions relative to each other as their beneficial ownership of the outstanding voting securities of the Company immediately prior to such transaction;

 

(iii)         the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation;

 

(iv)         there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its subsidiaries to an entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are beneficially owned by stockholders of the Company in substantially the same proportions relative to each other as their beneficial ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or

 

(v)          individuals who, on the date of this Agreement, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; (provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of the Plan, be considered as a member of the Incumbent Board).

 

(d)           Good Reason.  “Good Reason” for the Executive to terminate the Executive’s employment hereunder shall mean the occurrence of any of the following events without the Executive’s consent:

 

(i)           a material adverse change in the nature of the Executive’s authority, duties or responsibilities, as they exist on the Effective Date of this Agreement;

 

(ii)          a material adverse change in the Executive’s reporting level requiring that the Executive report to a corporate officer or executive instead of reporting directly to the Board;

 

  

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(iii)         the relocation of the Company’s executive offices or principal business location to a point more than sixty (60) miles from their location as of the Effective Date of this Agreement; or

 

(iv)         a material reduction by the Company of the Executive’s base salary as initially set forth herein or as the same may be increased from time to time, except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior officers of the Company and does not exceed 15% of Executive’s base salary.

 

Provided however that, such termination by the Executive shall only be deemed for Good Reason pursuant to the foregoing definition if: (i) the Executive gives the Company written notice of the intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that the Executive believes constitutes Good Reason, which notice shall describe such condition(s); (ii) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the “Cure Period”); and (iii) the Executive terminates employment within thirty (30) days following the end of the Cure Period.

 

5.           Application of Internal Revenue Code Section 409A.  Benefits payable under the Agreement, to the extent of payments made from the date of termination of the Executive through March 15th of the calendar year following such termination, are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; to the extent such payments are made following said March 15th, they are subject to the distribution requirements of Code Section 409A(a)(2)(A), including, without limitation, the requirement of Code Section 409A(a)(2)(B)(i) that payment to the Executive be delayed until 6 months after separation from service if the Executive is a “specified Executive” within the meaning of the aforesaid section of the Code at the time of such separation from service.  In addition, if any provision of this Agreement would cause Executive to incur any penalty tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Company may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code.

 

6.           Code Section 280G.  If any payment or benefit Executive would receive pursuant to a Corporate Transaction from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Code Section 280G, and (ii) but for this sentence, be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Payment are paid to Executive, which of the following two amounts would maximize Executive’s after-tax proceeds: (i) payment in full of the entire amount of the Payment (a “Full Payment”), or (ii) payment of only a part of the Payment so that Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”), whichever amount results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes).  If a Reduced Payment is made, (i) the Payment shall be paid only to the extent permitted under the Reduced Payment alternative, and Executive shall have no rights to any additional payments and/or benefits constituting the Payment, and (ii) reduction in payments and/or benefits shall occur in the following order: reduction of cash payments, cancellation of accelerated vesting of stock awards, and reduction of other benefits.  In the event that acceleration of compensation from Executive’s equity awards is to be reduced, such acceleration of vesting shall be canceled in the reverse order of the date of grant unless Executive elects in writing a different order for cancellation.

  

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The independent registered public accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Corporate Transaction shall make all determinations required to be made under this Section 6.  If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Corporate Transaction, the Company shall appoint a different nationally recognized independent registered public accounting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such independent registered public accounting firm required to be made hereunder.  The independent registered public accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Company or Executive) or at such other time as requested by the Company.  If the independent registered public accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Company and Executive with an opinion reasonably acceptable to Executive that no Excise Tax will be imposed with respect to such Payment.  Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.

 

7.           Conflict of Interest.  During the Employment Period, Executive shall devote such time and energies as appropriate to fulfill all responsibilities to the Company in the capacity set forth in Section 1.  Executive shall be free to pursue business activities which do not interfere with the performance of his duties and responsibilities under this Agreement, however, Executive shall not engage in any outside business activity which involves actual or potential competition with the business of the Company, except with the written consent of the Board.

 

8.           Executive Benefit Plans.  All of the Executive benefit plans referred to or contemplated by this Agreement shall be governed solely by the terms of the underlying plan documents and applicable law.  Nothing in this Agreement shall impair the Company’s right to amend, modify, replace, and terminate any and all such plans in its sole discretion as provided by law.  This Agreement is for the sole benefit of Executive and the Company, and is not intended to create an Executive benefit plan or to modify existing terms of existing plans.

 

9.           Assignment.  This Agreement may not be assigned by Executive.  This Agreement shall bind and inure to the benefit of the Company’s successors and assigns, as well as Executive’s heirs, executors, administrators, and legal representatives.  The Company shall obtain from any successor, before the succession takes place, an agreement to assume the obligations and perform all of the terms and conditions of this Agreement.

 

10.           Notices.  All notices required by this Agreement may be delivered by first class mail at the following addresses:

 

To Company:

 

Adamis Pharmaceuticals Corporation

Attn: Board of Directors

2658 Del Mar Heights Road, #555

Del Mar, CA  92014

 

To Executive:

 

Richard L. Aloi

7264 NW 63rd Terrace

Parkland, FL 33067

 

  

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11.           Amendment.  This Agreement may be modified only by written agreement signed by both the Company and Executive.

 

12.           Choice of Law; Arbitration.  This Agreement shall be governed by the laws of the State of California, without regard to choice of law principles.  To provide a mechanism for rapid and economical dispute resolution, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or in equity, arising from or relating to this Agreement (including the Release and Waiver) and its enforcement, performance, breach or interpretation, will be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration before a single arbitrator held in San Diego, California and conducted by the American Arbitration Association (“AAA”), under its then-existing rules and procedures.  The parties shall be entitled to conduct adequate discovery, and they may obtain all remedies available to the parties as if the matter had been tried in court.  The arbitrator shall issue a written decision which specifies the findings of fact and conclusions of law on which the arbitrator’s decision is based.  Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof.  Unless a different allocation is required by law, the parties shall each pay one-half of all fees and costs of the arbitration.  Punitive damages shall not be awarded.  Unless otherwise required by law, the arbitrator will award reasonable expenses (including reimbursement of the assigned arbitration costs) to the prevailing party.  Nothing in this Section or in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in a court of competent jurisdiction to prevent irreparable harm pending the conclusion of any such arbitration.  Notwithstanding the above, both Executive and the Company retain the right to seek or obtain, and shall not be prohibited, limited or in any other way restricted from seeking or obtaining, equitable relief from a court having jurisdiction over the parties in order to enforce the nonsolicitation and noncompetition provisions of this Agreement or any disputes or claims relating to or arising out of the misuse or misappropriation of the Company’s intellectual property.

 

13.           Partial Invalidity.  In the event any provision of this Agreement is void or unenforceable, the remaining provisions shall continue in full force and effect.

 

14.           Waiver.  No waiver of any breach of this Agreement shall constitute a waiver of any subsequent breach.

 

15.           Complete Agreement.  As of the Effective Date, this Agreement, together with the stock option agreements and equity incentive plans governing the Options, constitutes the entire agreement between the parties in connection with the subject matter hereof and supersedes any and all prior or contemporaneous oral and written agreements or understandings between the parties.

 

16.           Headings.  Headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

 

17.           Miscellaneous.  Executive acknowledges full understanding of the matters set forth herein and the obligations undertaken upon the execution hereof.

 

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IN WITNESS WHEREOF, the parties have executed this EXECUTIVE EMPLOYMENT AGREEMENT as of the date first written above.

 

 

	
ADAMIS PHARMACEUTICALS CORPORATION

	  
	  	  	  
	
By:

	

/s/ Dennis J. Carlo

	  
	
Name:  

	Dennis J. Carlo	  
	
Title:

	

President and CEO

	  

Dated:  November 9, 2010

 

	

EXECUTIVE:

	  
	  	  	  
	
By:

	

/s/ Richard L. Aloi

	  
	
Name:  

	

Richard L. Aloi

	  

  

  

  

 

EXHIBIT A

 

RELEASE AND WAIVER OF CLAIMS

 

In consideration of the payments and other benefits set forth in the Executive Employment Agreement dated November 9, 2010 (the “Employment Agreement”), to which this form is attached, I, Richard L. Aloi, hereby furnish Adamis Pharmaceuticals Corporation (the “Company”), with the following release and waiver (“Release and Waiver”).

 

In exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its directors, officers, Executives, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, Affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Release and Waiver.  This general release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including, but not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including, but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended).  Nothing in this Release and Waiver shall be deemed to require the waiver or release of any claim that may not be released or waived under applicable federal or state law.

 

I also acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any claims I may have against the Company.

 

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company.  I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired unexercised and no benefits will be paid unless and until this Release and Waiver has become effective.  In the event that this Release and Waiver is requested in connection with an exit incentive or other employment termination program offered to a group or class of employees, I have forty-five (45) days to consider this Release and Waiver and I shall be provided with the information required by 29 U.S.C. Section 626 (f)(1)(H).

 

This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company that is not expressly stated herein.  This Release and Waiver may only be modified by a writing signed by both me and a duly authorized member of the Board of Directors of the Company.

 

	Date: November 9, 2010	  	

/s/ Richard L. Aloi

	  	  	

Richard L. Aloi

 

 

A-1ex-10_27.htm

Lithium Technology Corporation 8-K

 

 

Exhibit 10.27

 

LITHIUM TECHNOLOGY CORPORATION

AMENDED AND RESTATED TRANSACTION BONUS PLAN

1.           Purpose of the Plan.  Lithium Technology Corporation (the “Company”) has executed an Agreement on Key Terms dated September 28, 2010 (the “Term Sheet”) between the Company and the strategic party named therein (the “Strategic Investor”) relating to a series of strategic transactions (the “Acquisition Transaction”) pursuant to which the Strategic Party may over the time period set forth in the Term Sheet increase its equity ownership in the Company to more than 50% of the outstanding securities of the Company (the “Control Shares”).  This Amended and Restated Transaction Bonus Plan (the “Plan”) is designed to provide an incentive bonus to persons providing services to the Company in connection with the Strategic Transaction.

2.           Transaction Bonus Award.

(a)           The participants set forth in Schedule I who are providing services to the Company in connection with the Acquisition Transaction (each, a “Participant”) are entitled to receive, on the terms and conditions set forth in this Plan, the percentage of the Transaction Bonus Pool (as defined below) as set forth on Schedule I (the “Transaction Bonus Award”).

(b)           The term “Transaction Bonus Pool” shall be comprised of warrants to purchase shares of Common Stock of the Company in the amount and on the terms set forth on Schedule II (the “Warrants”).

(c)           The Warrants shall be executed and delivered on the date hereof by the Company and shall vest on the date subsequent to the later of the date hereof that the Company executes the definitive agreements (the “Strategic Investor Agreements”) relating to the Acquisition Transaction (the “Vesting Date”) provided that (i) the Warrants are reviewed and found to be fair to the Company by an independent person or firm with expertise in the area of transaction bonus compensation and (ii) the applicable Participant is providing services to the Company on the Vesting Date.  Notwithstanding the foregoing, the Warrants held by a Participant shall nonetheless vest on the Vesting Date if on or before the Vesting Date (1) the Participant or the Participant Consulting Entity (as defined below) was terminated by the Company other than for Cause (as defined below), (2) the Participant or Participant Consulting Entity was terminated by the Company as a result of Disability (as defined below) or death of the Participant, or (3) the Participant or the Participant Consulting Entity has terminated his or its services to the Company for Good Reason  (as defined below).

(d)           In the event of the death or Disability of any Participant on or before the Vesting Date, the applicable Participant or the estate of the deceased Participant, as the case may be, shall vest in the Warrants held by the applicable Participant notwithstanding the failure of the Participant to remain in the service of the Company.

  

  

  

(e)           In the event the Strategic Investor does not acquire or vest in all of the Control Shares provided for in the Acquisition Transaction, the Warrants shall nevertheless vest on the Vesting Date and shall remain vested provided the conditions of Section 2(c) are satisfied.

(f)           Definitions.

(i)           The term “Participant Consulting Entity” means the corporate entity associated with the Participant which corporate entity is a party to a written consulting agreement with the Company which provides for the associated Participant to provide services to the Company under such consulting agreement.

(ii)          The term “Cause” means fraud, dishonesty, competition with the Company, unauthorized use of any of the Company's trade secrets or confidential information,  failure to properly perform the duties assigned to the Participant, or a material breach or violation of any consulting or services agreement between the Company and the Participant or the Participant Consulting Entity. A determination of the existence of Cause shall be made by the Board in its reasonable discretion.

(iii)         The term “Disability” means the inability of Participant to engage in substantial gainful employment which inability to work stems from a medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of not less than twelve (12) months..

(iv)         The term “Good Reason” means a voluntary termination of his or its services to the Company by the Participant or the Participant Consulting Entity after a material breach or violation of any consulting agreement between the Company and the Participant or the Participant Consulting Entity or a substantial diminution in the compensation, or responsibility of the Participant or the Participant Consulting Entity, provided Participant provides notice to the Company of the Good Reason condition within ninety (90) days after the condition arises and the Company fails to cure such condition within thirty (30) days of the receipt of notice.

3.           General Provisions.

(a)           Effectiveness.  This Plan shall become effective on November 11, 2010.

(b)           No Right to Continue to Provide Services.  No action of the Company in establishing this Plan, and no provision of this Plan itself shall be construed to grant any person or entity the right to remain providing services to the Company or its subsidiaries for any period of specific duration.

(c)           No Company Obligation to Enter Into the Acquisition Transaction.  Neither the Company nor its stockholders are under any obligation, express or implied to enter into the Acquisition Transaction or any other transaction.

  

2

  

(d)           Construction. This Plan will be construed in accordance with and governed by the laws of the State of Delaware, without application of the principles of conflicts of laws. If any provision of this Plan is, for any reason, held to be invalid, illegal or unenforceable in any respect, such invalidity,  illegality or unenforceability will not affect any other provision of this Plan, and this Plan will be construed as if such invalid, illegal or unenforceable provision had never been herein contained.

(e)           Compliance with Laws. The Company may subject awards under this Plan to such additional conditions as it deems necessary or appropriate to comply with applicable federal, state, local, and foreign laws. The Company will not be required to make any award or take any action otherwise required under this Plan if that award or action may constitute a violation of any applicable law or regulation.

(f)           Amendment of Plan. No amendment or modification will be made to this Plan without the consent of the affected Participant if that amendment would have a material adverse economic effect on that Participant.

  

3

  

SCHEDULE I

TRANSACTION BONUS AWARD

	
Name of Participant

	 	
Amount of Transaction Bonus Award

	
Theo M.M. Kremers

	 	
1/3 of the Transaction Bonus Pool

	
Fred Mulder

	 	
1/3 of the Transaction Bonus Pool

	
Christiaan A. van den Berg

	 	
1/3 of the Transaction Bonus Pool

 

I-1

  

  

  

SCHEDULE II

TERMS OF WARRANTS

The Transaction Bonus Pool shall consist of warrants (the “Warrants”) to purchase the number of shares of Company Common Stock equal to 202,348,282 shares of Company Common Stock (the “Warrant Shares”).  The Warrants shall vest as set forth in Section 2(c) of the Plan, shall expire on December 31, 2014, and shall contain a cashless exercise provision.  The exercise price of the Warrants shall be equal to $0.0247.  The Warrants issuable to each Participant shall be in the form attached hereto as Schedule II-A.

II-1

  

  

  

SCHEDULE II-A

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION.

LITHIUM TECHNOLOGY CORPORATION

WARRANT

This Warrant is issued to ___________________________________ (the “Holder”) pursuant to the Amended and Restated Transaction Bonus Plan of LITHIUM TECHNOLOGY CORPORATION, a Delaware corporation (the “Company”) and is subject to the terms, definitions and provisions of such plan as adopted by the Company and amended from time to time (the “Plan”), which Plan is incorporated herein by reference. Capitalized terms used herein, but not otherwise defined, shall have the meaning given to them in the Plan.

WHEREAS, the Company has executed an Agreement on Key Terms dated September 28, 2010 (the “Term Sheet”) between the Company and the strategic party named therein (the “Strategic Investor”) relating to a series of strategic transactions (the “Acquisition Transaction”) pursuant to which the Strategic Party may over the time period set forth in the Term Sheet increase its equity ownership in the Company to more than 50% of the outstanding securities of the Company (the “Control Shares”).

WHEREAS, the Plan is designated to provide an incentive bonus to persons providing services to the Company in connection with the Strategic Transaction, including the Holder.

WHEREAS, the Company has authorized the issuance of this Warrant to the Holder pursuant to the Plan.

NOW, THEREFORE,

THIS CERTIFIES THAT, for value received, the Holder or his or its registered assigns is entitled to purchase from the Company at any time or from time to time during the period specified in Paragraph 2 hereof at an exercise price per share equal to $0.0247 (the “Exercise Price”) __________________ shares of the Company’s Common Stock, $0.01 par value per share (the “Common Stock”).

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

  

1

  

1.           Manner of Exercise; Issuance of Certificates; Payment for Shares.  Subject to the provisions hereof, this Warrant may be exercised by the Holder hereof, in whole or in part, by the surrender of this Warrant, together with a completed exercise agreement in the form attached hereto (the “Exercise Agreement”), to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holder hereof), and upon (i) payment to the Company in cash, by certified or offi­cial bank check or by wire transfer for the account of the Company of the Exercise Price for the Warrant Shares specified in the Exercise Agreement or (ii) delivery to the Company of a written notice of an election to effect a “Cashless Exercise” (as defined in Section 11(c) below) for the Warrant Shares specified in the Exercise Agreement.  The Warrant Shares so purchased shall be deemed to be issued to the Holder hereof or such Holder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered, the completed Exercise Agreement shall have been deliv­ered, and payment shall have been made for such shares as set forth above.  Certifi­cates for the Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be delivered to the Holder hereof within a reasonable time after this Warrant shall have been so exercised.  The certificates so delivered shall be in such denominations as may be requested by the Holder hereof and shall be registered in the name of such Holder or such other name as shall be designated by such Holder.  If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Holder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised.

2.           Vesting.

(a)           This Warrant shall vest and shall be exercisable at any time or from time to time on or after the date subsequent to the date hereof that the Company executes the definitive agreements (the “Strategic Investor Agreements”) relating to the Acquisition Transaction (the “Vesting Date”) provided that (i) this Warrant is reviewed and found to be fair to the Company by an independent person or firm with expertise in the area of transaction bonus compensation and (ii) the Holder is providing services to the Company on the Vesting Date.  Notwithstanding the foregoing, this Warrant shall nonetheless vest on the Vesting Date if on or before the Vesting Date (1) the Holder or the Participant Consulting Entity (as defined in the Plan) was terminated by the Company other than for Cause (as defined in the Plan), (2) the Holder or Participant Consulting Entity was terminated by the Company as a result of Disability (as defined in the Plan) or death of the Holder, or (3) the Holder or the Participant Consulting Entity has terminated his or its services to the Company for Good Reason  (as defined in the Plan).

 

(b)           In the event of the death or Disability of any of the Holder on or before the Vesting Date, the Holder or the estate of the deceased Holder, as the case may be, shall vest in the Warrants on the Vesting Date notwithstanding the failure of the Holder to remain in the service of the Company.

  

2

  

(c)           In the event the Strategic Investor does not acquire or vest in all of the Control Shares provided for in the Acquisition Transaction, the Warrants shall nevertheless vest on the Vesting Date and shall remain vested provided the conditions of Section 2(a) are satisfied.

 

(d)           This Warrant shall be exercisable until December 31, 2014 (the “Exercise Period”).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

  

3

  

 

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

 

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

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

7.           Transfer, Exchange, and Replacement of Warrant.

 

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

 

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

 

  

4

  

 

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

 

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

 

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

 

(f)           Exercise or Transfer Without Registration.  If, at the time of the surrender of this Warrant in connection with any exercise, transfer, or exchange of this Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares issuable hereunder), shall not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such exercise, transfer, or exchange, (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel, which opinion and counsel are acceptable to the Company, to the effect that such exercise, transfer, or exchange may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the Holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited holder” as defined in Rule 501(a) promulgated under the Securities Act; provided that no such opinion, letter or status as an “accredited holder” shall be required in connection with a transfer pursuant to Rule 144 under the Securities Act.  The first Holder of this Warrant, by taking and holding the same, represents to the Company that such Holder is acquiring this Warrant for investment and not with a view to the distribution thereof.

8.           Registration Rights.  The Holder of this Warrant (and its assignees thereof) shall have piggyback registration rights with respect to the Warrant Shares.

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

 

  

5

  

 

10.           Governing Law.  THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.  THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING.  NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

11.           Miscellaneous.

 

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

 

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

  

6

  

(c)           Cashless Exercise. Notwithstanding anything to the contrary contained in this Warrant, this Warrant may be exercised by presentation and surrender of this Warrant to the Company at its principal executive offices with a written notice of the Holder’s intention to effect a cashless exercise, including a calculation of the number of shares of Common Stock to be issued upon such exercise in accordance with the terms hereof (a “Cashless Exercise”).  In the event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the Holder shall surrender this Warrant for that number of shares of Common Stock determined by multiplying the number of Warrant Shares to which it would otherwise be entitled by a fraction, the numerator of which shall be the difference between the then current Market Price per share of the Common Stock and the Exercise Price,  and the denominator of which shall be the then current Market Price per share of Common Stock.  For example, if the Holder is exercising 100,000 warrants with a per warrant exercise price of $0.75 per share through a cashless exercise when the Common Stock’s current Market Price per share is $2.00 per share, then upon such Cashless Exercise the Holder will receive 62,500 shares of Common Stock.

 

(d)           Compliance with Laws.  The Company may postpone the time of delivery of certificate(s) for Warrant Shares for such additional time as the Company shall deem necessary or desirable to enable it to comply with the requirements of any securities exchange upon which the Company’s Common Stock may be listed, or the requirements of the Securities Act, the Securities Exchange Act of 1934, as amended, any rules or regulations of the Securities and Exchange Commission promulgated thereunder, or any applicable state laws relating to the authorization, issuance or sale of securities.

 

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

  

7

  

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized officer as of the _____ day of November, 2010.

 

 

	  	  	
LITHIUM TECHNOLOGY CORPORATION

	  	  	  
	  	  	
By:

	  
	  	  	
Name:  

	  
	  	  	
Title:

	  

 

ACCEPTED AND AGREED:

_________________________

Print Name:

  

8

  

FORM OF EXERCISE AGREEMENT

 

 

Dated:  ________ __, 200_

 

To:           ______________________

 

 

The undersigned, pursuant to the provisions set forth in the within Warrant, hereby agrees to purchase ________ shares of Common Stock covered by such Warrant, and makes pay­ment herewith in full therefor at the price per share provided by such Warrant in cash or by certified or official bank check in the amount of $________, or, by surrender of securities issued by the Company (including a portion of the Warrant) having a market value (in the case of a portion of this Warrant, determined in accordance with Section 11(c) of the Warrant) equal to $_________.  Please issue a certificate or certifi­cates for such shares of Common Stock in the name of and pay any cash for any fractional share to:

 

	  	  	
Name:

	  
	  	  	  	  
	  	  	  	  
	  	  	
Signature:  

	  
	  	  	
Address:

	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Note:    

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

 

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

  

9

  

FORM OF ASSIGNMENT

 

 

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

 

	
Name of Assignee

	 	
Address

	 	
No. of Shares

 

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

 

Dated:           ________ __, 200_

 

 

	
In the presence of:

	  	  	  
	  	  	
Name:

	  
	  	  	  	  
	  	  	  	  
	  	  	
Signature:  

	  
	  	  	
Title of Signing Officer or Agent (if any):

	  	  	  	  
	  	  	  	  
	  	  	
Address:

	  
	  	  	  	  
	  	  	  	  
	  	  	  	
Note:  

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

 

 

10

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