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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 Date of Report (Date of earliest event reported): October
25, 1996
LITHIUM TECHNOLOGY CORPORATION
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 1-10446 13-3411148
- - -------------------------------- ----------- ------------------
State or Other Jurisdiction Commission IRS Employer
of Incorporation or Organization File Number Identification No.
5115 Campus Drive, Plymouth Meeting, PA 19462
- - --------------------------------------- -----
Address of Principal Executive Offices Zip Code
Registrant's telephone number, including area code: (610) 940-6090
-----------------------------------------------------------
Former name or former address, if changed since last report
<PAGE> 2
Item 5. Other Events.
Commitment Letter for an Underwritten Public Offering.
Lithium Technology Corporation (the "Company") has received a
commitment letter from Laidlaw & Co. to underwrite a public offering of between
$7 million and $10 million of the Company's common stock on a firm commitment
basis (the "Underwritten Offering"). A copy of the press release announcing the
receipt of the commitment letter is attached hereto as an exhibit. The
Underwritten Offering is subject to the satisfaction of a number of conditions.
The Company intends to use the proceeds from the Underwritten Offering
to further the Company's accelerated production schedule, including capital
equipment to upgrade the Company's Demonstration Manufacturing Line and working
capital to complete the development of the Company's long run time
lithium-polymer batteries for notebook computers and wireless communications
handsets. Also, pursuant to the terms relating to the Company's sale of its
Convertible Notes (as defined below), the Company has agreed to use a portion
of the proceeds of the Underwritten Offering to repay such Convertible Notes.
There can be no assurance that the Underwritten Offering will be
consummated. Moreover, the offering proceeds will not satisfy the Company's
entire cash needs. The Company is also currently discussing future funding
alternatives with potential unrelated third party investors.
Sale of $1.75 Million Principal Amount Convertible Notes.
On October 25, 1996, the Company issued $1.75 million principal amount
convertible notes (the "Convertible Notes"). The principal documents concerning
the Convertible Note transaction are attached hereto as exhibits, without the
exhibits referenced therein, and the attached exhibits are incorporated herein
in their entirety. In connection with the issuance of the Convertible Notes,
the Company issued 267,176 shares of the Company's common stock as compensation
to the purchasers of the Convertible Notes. In addition, the Company issued
66,794 shares plus a warrant to purchase an additional 87,500 shares at an
exercise price of $1.31 to the placement agent and the Company also paid a
$122,500 commission in connection with the Convertible Notes transaction.
Pursuant to the terms of the Convertible Note Agreements, additional
shares may be required to be issued to the purchasers of the Convertible Notes
in the event of certain post-closing events. First, the Convertible Notes must
be repaid on the earlier to occur of (i) January 23, 1997 or (ii) the
completion of the Underwritten Offering described above. In the event that the
principal amount of the Convertible Notes is not paid when due the Noteholders
may convert the Convertible Notes into as much as $3,850,000 worth of the
Company's common stock (to be valued as of the date of specified triggering
events less a discount factor). In the event of default, commencing on the
151st day after the closing date and until the time of such conversion by the
Noteholders, the Company is required to pay the Noteholders 10% interest on the
outstanding principal balance of the Convertible Notes. The Noteholders'
conversion rights expire upon the earlier of (i) repayment of the Convertible
Notes or (ii) November 2, 1998, and such conversion rights are the Noteholders'
exclusive remedy in the event of the Company's failure
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to repay the principal amount of the Convertible Notes. The Convertible Notes,
if unpaid on November 2, 1998, are automatically converted into shares of the
Company's common stock. The terms of the Convertible Note Agreements allow the
Company two 30-day extensions of the January 23, 1997 maturity date, provided
the Company issues to the Noteholders $175,000 worth of the Company's common
stock (based on the value of the common stock at the time of the extension less
a discount factor), for each such extension. Second, if the Company does not
file a registration statement with the Securities and Exchange Commission
covering the Underwritten Offering described herein by November 24, 1996, the
Company is required to issue to the Noteholders an additional $43,750 worth of
the Company's common stock (based on the value of the common stock valued as of
that date less a discount factor). The Company must also issue to the
Noteholders an additional $8,750 worth of the Company's common stock each week
that such registration statement is not filed thereafter (based on the value of
the common stock at the beginning of each such week less a discount factor).
There can be no assurances that: (a) the registration statement for the
Underwritten Offering will be timely filed; (b) the Underwritten Offering will
be successfully concluded; (c) the Company will not exercise both extensions on
the maturity date of the Convertible Notes; or (d) the Company will be able to
repay the principal amount of the Convertible Notes by January 23, 1997.
Consequently, stockholders may incur a substantial dilution of their equity
interest. The number of shares issuable to the Noteholders could be substantial
and, pursuant to the terms of the Convertible Notes, could increase
substantially if the market value of the Company's common stock, which is a
component of the applicable conversion formulas, decreases substantially.
Item 7. Financial Statements and Exhibits
Exhibits.
10.29 Form of Convertible Note Purchase Agreement dated October 23, 1996
between the Company and the Purchasers
10.30 Form of Convertible Note dated October 23, 1996 issued by the
Company
10.31 Form of Stock Purchase Agreement dated October 23, 1996 between the
Company and the Purchasers
10.32 Form of Stock Purchase Agreement dated October 23, 1996 between the
Company and the Placement Agent
10.33 Form of Warrant Agreement dated October 23, 1996 between the
Company and the Placement Agent
10.34 Form of Registration Rights Agreement dated October 23, 1996
between the Company and the Placement Agent
99.1 Press Release dated October 14, 1996
99.2 Press Release dated October 28, 1996
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LITHIUM TECHNOLOGY CORPORATION
By: /s/ David J. Cade
--------------------------------------
David J. Cade
President and Chief Operating Officer
Date: October 28, 1996
<PAGE> 1
EXHIBIT 10.29
LITHIUM TECHNOLOGY CORPORATION
$_________ CONVERTIBLE NOTE
PURCHASE AGREEMENT
October 23, 1996
Mr. _____________________
_________________________
____________, ___________
Dear Sir:
Lithium Technology Corporation, a corporation organized under the laws
of the State of Delaware (the "Company"), proposes to issue and sell to you
(hereinafter the addressee of this Agreement is sometimes referred to
individually as the "Purchaser") $_________ principal amount of the Company's
10% Convertible Notes (the "Notes") that are convertible into shares (defined
below as the "Escrowed Shares") of the Company's common stock (the "Common
Stock"). The Notes and the Escrowed Shares will be offered and sold to you
without being registered under the United States Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon certain exemptions therefrom.
The Notes and the Escrowed Shares are sometimes collectively referred to herein
as the "Securities".
In connection with the offer and sale of the Notes and the Escrowed
Shares, the Purchaser has been provided with copies of the Company's Report on
Form 10-KSB for the year ended December 31, 1995, Reports on Form 10-QSB for the
quarters ended March 31, 1996 and June 30, 1996, all of the Company's reports on
Form 8-K filed with the United States Securities and Exchange Commission ("SEC")
during 1996, the Company's Registration Statement on Form SB-2 as filed with the
SEC on September 3, 1996, the Company's Registration Statement on Form S-8 as
filed with the SEC on October 9, 1996, and all of the Company's press releases
issued during 1996 (collectively, the "Disclosure Documents").
1. Purchase and Delivery.
(a) Upon the basis of the representations and warranties and
other terms and conditions herein contained, the Company hereby
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agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase
from the Company, the aforesaid principal amount of Notes. The Purchaser agrees
to purchase the principal amount of the Notes as set forth opposite the
Purchaser's name on the signature page of this Agreement.
(b) Payment for the Notes shall be made by the Purchaser in
United States Dollars by wire transfer or certified or official bank check or
checks, payable to the order of the Company in New York Clearing House or other
next day funds, as instructed by the Company, in the aforesaid amount at 10:00
a.m., New York City time, on the date hereof or at such other time and date as
the Purchaser and the Company may agree upon in writing, such time and date
being herein called the "Closing Date", against delivery of (i) the Notes to the
Purchaser and (ii) such other documents and closing deliveries as are mutually
agreed upon.
(c) The principal amount of the Notes shall be repaid on the
earlier to occur of (i) the expiration of the period of ninety (90) days from
and after the Closing Date or (ii) the closing of an underwritten offering of
the Company's Common Stock registered with the SEC and as described in the
commitment letter between the Company and Laidlaw & Co. attached hereto as
Exhibit A (hereinafter the "Underwritten Offering"). The repayment date shall
hereinafter be referred to as the "Maturity Date". The Company shall have the
right upon five (5) days prior written notice to extend the Maturity Date of the
Notes on two (2) occasions (respectively the "First Extension" and the "Second
Extension") for periods not to exceed thirty (30) days. The Company shall not
have the right to extend the Maturity Date of the Notes beyond the closing date
of the Underwritten Offering. In the event that (a) the Company has not
delivered either of the aforesaid extension notices and (b) the Company has not
repaid the Notes as of the then applicable Maturity Date, the Company shall
nevertheless be deemed to have elected to extend the Notes as if the Company
actually had delivered the extension notice, and the First Extension Shares
and/or the Second Extension Shares as applicable (as defined in the stock
purchase agreement referred to in Section 1(d) hereof as Exhibit B) shall be
deemed to have been earned by the Purchaser. Interest on the Notes arising on or
before the 150th day after the Closing Date shall be paid and satisfied in full
by the Investment/Interest Shares issued to the Purchaser in accordance with the
stock purchase agreement referred to in Section 1(d) hereof as Exhibit B. In the
event that any principal amount of the Notes remains unpaid or not converted
into Escrowed Shares on or after 151st day after the Closing Date, the unpaid
principal amount (until paid or converted into Escrowed Shares) shall accrue
interest at the rate of 10.0% per annum based on a 360-day year, which interest
(i) shall accrue for, and be payable in cash at the end of, the first six months
commencing on such 151st day and (ii) shall thereafter accrue and be payable in
cash on a monthly basis in arrears.
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(d) In the event that the principal amount of the Notes is not
repaid on or before the expiration of the period of ninety (90) days from and
after the Closing Date, the Company shall on the 91st day from and after the
Closing Date, in accordance with the applicable terms of the stock purchase
agreement in substantially the form of Exhibit B hereto, cause to be issued to
the Purchaser and deposited with an escrow agent mutually satisfactory to the
Purchaser and the Company, pursuant to an exemption from registration of the
Common Stock under Regulation S under the Securities Act the number of shares of
Common Stock of the Company equal to U.S. $3,500,000 divided by 70% of the
lesser of (i) the Current Market Value of the Company's Common Stock on the date
of issuance of such shares or (ii) the Current Market Value of the Company's
Common Stock on the Closing Date, which quotient shall then be multiplied by the
fraction whose numerator is the principal amount of the Purchaser's Notes on the
Closing Date and whose denominator is $1,750,000 (the "Escrowed Shares")
provided, however, that in the event that the Company exercises the First
Extension and the Current Market Value of the Company's Common Stock is less on
the 121st day after the Closing Date than the Current Market Value of the
Company's Common Stock was on the 91st day after the Closing Date, then the
number of Escrowed Shares determined in accordance with this sentence, issued to
the Purchaser, and deposited with the aforementioned escrow agent shall be
recalculated as of the 121st day as if the Current Market Value of the Company's
Common Stock referred to in sub-clause (i) of this Section 1(d) were determined
on such 121st day after the Closing Date; and further, provided, that in the
event that the Company exercises the Second Extension and the Current Market
Value of the Company's Common Stock is less on the 151st day after the Closing
Date than the Current Market Value of the Company's Common Stock was on either
the 91st day after the Closing Date or the 121st day after the Closing Date,
then the number of Escrowed Shares determined in accordance with this sentence,
issued to the Purchaser, and deposited with the aforementioned escrow agent
shall be recalculated as of the 151st day after the Closing Date as if the
Current Market Value of the Company's Common Stock referred to in sub-clause (i)
of this Section 1(d) were determined on such 151st day after the Closing Date.
It is the expressed understanding of the Purchaser and the Company that the
Escrowed Shares shall not be released from escrow until and unless an Event of
Default (as defined in the Notes) has occurred under the Notes, or as otherwise
provided herein or in the Escrow Agreement.
(e) For purposes of this Agreement, the term "Current Market
Value" shall mean the average of the daily averages of the closing bid and
closing asked prices of the Common Stock for the five (5) trading days
immediately preceding the days on which the calculation is being made and given
effect.
(f) In the event the Company pre-pays the Notes in full
on or before the 39th day after the Closing Date, the Company shall
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receive from the Purchaser (to be retired into the Company's treasury) the
number of the Purchaser's Investment/Interest Shares (as defined in the stock
purchase agreement referred to in Section 1(d) hereof as Exhibit B) or other
shares of the Company's Common Stock owned by the Purchaser that is equal to:
<TABLE>
<S> <C> <C> <C>
Principal Amount of
Purchaser's Notes on Prepayment Prepayment
$43,750 X Closing Date divided by Discount Price = Discount
--------------------
$1,750,000 Shares
</TABLE>
For purposes of this Agreement the term "Prepayment Discount Price" shall mean
the greater of (i) the Current Market Value of the Company's Common Stock on the
Closing Date or (ii) the Current Market Value of the Company's Common Stock on
the day of such pre-payment.
(g) The Notes shall be issued in substantially the form
attached hereto as Exhibit C.
2. Conversion Privilege and Conversion Rate. Subject to and upon
compliance with the provisions of this Section 2, at the option of the Purchaser
after an Event of Default, all or a portion of the outstanding Notes may be
converted into the number of Escrowed Shares (calculated as to the nearest 1/100
of a share) calculated by taking the number of Escrowed Shares issued to the
Purchaser pursuant to Section 1(d), and multiplying such number of Escrowed
Shares by the fraction whose numerator is the principal amount of the Notes
being so converted, and whose denominator is the principal amount of the
Purchaser's Notes on the Closing Date. Such conversion right shall expire upon
the earlier of (i) repayment of the Notes or (ii) November 2, 1998, and such
conversion right shall be the Purchaser's exclusive remedy in the event of the
Company's failure to pay the principal amount of the Notes. In the event that
any or all of the principal amount of the Purchaser's Notes remains unpaid at
the close of business on November 2, 1998, such unpaid principal amount shall be
converted in full into the Escrowed Shares as provided herein, which Escrowed
Shares shall be delivered to the Purchaser by the Escrow Agent and shall
constitute payment in full of any and all obligations under the Notes other than
any accrued and unpaid interest.
(a) Exercise of Conversion Privilege. In order to exercise the
conversion privilege, the Purchaser shall surrender all the Notes, duly
endorsed, in accordance with the escrow agreement substantially in the form of
Exhibit D hereto (the "Escrow Agreement") accompanied by written notice to the
Company that the Purchaser elects to convert such Notes, unless otherwise
provided herein.
(b) Notes shall be deemed to have been converted
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immediately prior to the close of business on the day of surrender of such Notes
for conversion in accordance with the foregoing provisions, and at such time the
rights of the Purchaser of such Notes shall cease except for the right of the
Purchaser to receive the specified shares, and the Purchaser shall be treated
for all purposes as the record holder of such Common Stock at such time. As
promptly as practicable on or after the conversion date but within three days
thereafter if the Purchaser has an agent in New York City to accept delivery of
the stock certificates and within five days thereafter if the Purchaser does not
have an agent in New York City to accept delivery of the stock certificates, the
Company shall issue and shall deliver to the Purchaser a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share. All shares
of Common Stock delivered upon conversion thereof shall bear a restrictive
legend to comply with applicable securities laws.
(c) Fractions of Shares. No fractional shares of Common Stock
shall be issued upon conversion of Notes. Instead of any fractional share of
Common Stock which would otherwise be issuable upon conversion of any Notes, the
Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the Current Market Value per share of Common Stock
on the business day immediately preceding the day of conversion.
3. Company's Representations and Warranties. The Company hereby
represents and warrants to, and agrees with, the Purchasers that:
(a) The Disclosure Documents do not contain any untrue
statement of a material fact or omit to state any material fact as of their
respective dates of filing with the SEC and/or issuance to the media (as
applicable) necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. There has been no
material adverse change in the Company's business or financial condition since
October 14, 1996.
(b) The Company has been duly incorporated, is validly
existing, and is in good standing under the laws of the State of Delaware with
corporate power and authority to own its property and to conduct its business as
described in the Disclosure Documents and to enter into and perform its
obligations under this Agreement.
(c) All of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and will not subject the holders thereof to personal liability by
reason of being such holders. There are no preemptive rights of any shareholder
of the Company with respect to any securities of the Company. The shares of
Common Stock issuable upon conversion of the Notes have been duly and validly
authorized
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and reserved for issuance and, when issued and delivered in accordance with the
terms of this Agreement, will be duly and validly issued, fully paid and
non-assessable. The Company is a "Domestic Issuer" and a "Reporting Issuer," as
such terms are defined by Rule 902 of Regulation S. The Company has registered
its common stock pursuant to Section 12(b) or (g) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), is in full compliance with all
reporting requirements of either Section 13(a) or 15(d) of the Exchange Act, and
the Company's common stock trades on the Electronic Bulletin Board. The Company
has not offered the Notes or its shares (which are the subject matter of this
Agreement or the note agreements, stock purchase agreements, and/or warrants of
even date herewith) to any person in the United States, any identifiable group
of U.S. citizens abroad, or to any U.S. Person (as defined by Regulation S). At
the time the buy order (if any) was originated, the Company and/or its agents
reasonably believed the Purchaser was outside the United States and was not a
U.S. Person based on the Purchaser's representations set forth herein. The
Company and/or its agents reasonably believe that the sale of Escrowed Shares
has not been prearranged with a buyer in the United States. The execution and
delivery of this Agreement and the consummation of the issuance of the Escrowed
Shares and the transactions contemplated by this Agreement do not and will not
(1) require the consent, authorization, or approval of any third party or any
government body, or (2) conflict with or result in a material breach by the
Company of any of the terms or provisions of, or constitute a material default
under, the articles of incorporation or bylaws of the Company, or any indenture,
mortgage, deed of trust or other material agreement or instrument to which the
Company is a party or by which it or any of its properties or assets are bound,
or any existing applicable decree judgment or order of any court, Federal or
State regulatory body, administrative agency or other governmental body having
jurisdiction over the Company or any of its properties or assets. The Company
will instruct its transfer agent to issue one or more share certificates
representing the Escrowed Shares with the following restrictive legend set forth
below in the name of the Purchaser and in such denominations to be specified by
the Purchaser prior to closing:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ISSUED PURSUANT TO REGULATION S UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF TO ANY U.S.
PERSON (AS SUCH TERM IS DEFINED UNDER REGULATION S) UNTIL THE
41st DAY FOLLOWING THE DATE OF THEIR PURCHASE BY THE
REGISTERED HOLDER. AS SUCH, THIS LEGEND, AND ANY EXISTING STOP
TRANSFER INSTRUCTIONS TO THE TRANSFER AGENT SHALL EXPIRE ON
_______, 1996.
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The Company further warrants that no instructions other than these
instructions, and instructions for a "stop transfer" until the end of the
Restricted Period (as defined by Regulation S), have been given to the transfer
agent and also warrants that the Escrowed Shares shall otherwise be freely
transferable on the books and records of the Company after the end of the
Restricted Period in compliance with Regulation S. The Company will notify the
transfer agent of the date of completion of the offering and of the date of
expiration of the Restricted Period. The Company has taken and will take no
action that will affect in any way the running of the Restricted Period or the
ability of the Purchaser to resell the Escrowed Shares in accordance with
applicable securities laws and this Agreement; and the Company will comply with
all applicable securities laws and regulations with respect to the sale of the
Escrowed Shares, including but not limited to the filing of all reports required
to be filed in connection therewith with the Securities and Exchange Commission
or any stock exchange or NASDAQ or any other regulatory authority.
(d) The Notes have been duly authorized by the Company and,
when issued, delivered and paid for pursuant to this Agreement, will have been
duly executed, issued and delivered and will constitute valid and legally
binding obligations of the Company, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles, and subject, as to the enforcement of the conversion right with
respect to securities held by foreign persons, to the Exon-Florio provision of
the Omnibus Trade and Competitiveness Act of 1988 ("Exon-Florio").
(e) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles, and
subject, as to the enforcement of the conversion right with respect to
securities held by foreign persons, to the Exon-Florio provision of the Omnibus
Trade and Competitiveness Act of 1988 ("Exon-Florio").
(f) Neither the Company nor any of its affiliates (as defined
in Rule 501(b) under the Securities Act, each an "Affiliate") or any person
acting on its or their behalf (other than the Purchaser) has engaged or will
engage in any directed selling efforts (as that term is defined in Regulation S
under the Securities Act ("Regulation S") with respect to the Securities and
Company, and its Affiliates and any person acting on their behalf (other than
the Purchaser) have complied, and will comply, with the offering restrictions
requirement of Rule 903 of Regulation S assuming for such purposes that the
representations, warranties and covenants of the Purchaser contained in this
Agreement are true and
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correct or have been and will be complied with. The Company has not entered
into, and will not enter into, any contractual agreement with respect to the
distribution of the Securities except for the arrangements with the Purchaser.
(g) To the best of the Company's knowledge after due
investigation none of the Company's current products are included in any of the
U.S. Government's control lists including without limitation munitions lists,
U.S. Commerce Department lists, missile control lists, and chemical control
lists.
4. Purchaser's Representations and Warranties. The Purchaser hereby
represents and warrants to, and agrees with, the Company that:
(a) The Purchaser (if not a natural person) has been duly
organized, is validly existing, and is in good standing under the laws of the
jurisdiction of its formation with corporate or other power and authority to own
its property and to conduct its business and to enter into and perform its
obligations under this Agreement.
(b) The execution, delivery and performance of this Agreement
by the Purchaser has been duly authorized by all necessary action of the
Purchaser.
(c) This Agreement constitutes the legal, valid and binding
obligation of the Purchaser enforceable in accordance with its terms, except as
the same may be modified by bankruptcy, insolvency, moratorium and other similar
laws affecting creditors' rights generally and by general principles of equity.
(d) The Purchaser has received and reviewed the Company's
Disclosure Documents and the Purchaser or the Purchaser's designated
representative has concluded a satisfactory due diligence investigation of the
Company and has had an opportunity to have all their questions regarding the
Company satisfactorily answered.
(e) The Purchaser is acquiring the Securities for investment
purposes only without intent to distribute the same, and acknowledges that (A)
the Securities have not been registered under the Securities Act and applicable
state securities laws, and accordingly, constitute "restricted securities" for
purposes of the Securities Act and such state securities laws, (B) the Purchaser
will not be able to transfer the Securities except upon compliance with the
registration requirements of the Securities Act and applicable state securities
laws or exemptions therefrom including without limitation Regulation S, (C) the
certificates evidencing the Securities may contain a legend to the foregoing
effect, (D) the Securities are speculative and involve a high degree of risk and
the Purchaser is able to sustain the loss of the entire amount
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of his/its investment, and (E) the Purchaser has previously invested in
unregistered securities and has sufficient financial and investing expertise to
evaluate and understand the risks of the Securities.
(f) The Purchaser is not a United States person, United States
citizen or resident nor an entity organized under the laws of the United States
or any of the States, nor located in the United States, nor purchasing the
Securities directly or indirectly for the account or benefit of or on behalf of
a United States citizen or resident or such entity. The Purchaser is familiar
with and understand the provisions of Regulation S promulgated under the
Securities Act.
5. Covenants of the Company. In further consideration of the
Purchaser's agreements herein contained, the Company covenants and agrees with
the Purchaser as follows:
(a) To qualify the Escrowed Shares for offer and sale under
the state securities or blue sky laws of such jurisdictions as the Purchaser
shall reasonably request and to maintain such qualifications in effect for so
long as required for the resale of the Purchaser's Escrowed Shares by the
Purchaser, in no case to exceed one year from the date of conversion and except
that the Company shall not be required in connection therewith to qualify as a
foreign corporation.
(b) The Company agrees to reserve and keep available at all
times, free of pre-emptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligations to issue shares of its Common
Stock upon conversion of the Notes.
(c) The Company agrees to prepare and cause to be filed with
the SEC not later than thirty (30) days after the Closing Date the registration
statement contemplated by that certain commitment letter between the Company and
Laidlaw & Co. pertaining to Laidlaw's firm commitment underwriting of a public
offering of the Company's Common Stock to result in gross proceeds to the
Company of approximately $7 million to $10 million. The Company shall promptly
respond to comments received from the SEC Staff regarding such registration
statement and diligently use the Company's best efforts to achieve the
effectiveness of such registration statement as soon as possible and before the
Maturity Date of the Notes, provided that no breach of this covenant shall be
deemed to have occurred if such registration statement has not been declared
effective on or before the Maturity Date if the Company has used its best
efforts.
(d) The Company agrees to pay the legal fees and other
out-of-pocket expenses of the Purchasers arising out of the transactions
contemplated by this Agreement and related agreements upon the submission of
appropriate invoices therefor up to a
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maximum of $20,000 in the aggregate for all of the Purchasers who are purchasing
the Company's Notes pursuant to agreements of even date and like terms herewith.
(e) The Company agrees to repay the principal amount of the
Notes out of the proceeds resulting from the closing of the Underwritten
Offering (as defined hereinabove). In the event that the Company has not
satisfied this Section 5(c) by the close of business on the first business day
after the closing of the Underwritten Offering, then (notwithstanding anything
to the contrary in this Agreement) the Company shall cause the Escrowed Shares
to be issued and delivered to the Escrow Agent by the close of business on the
second business day after the closing of the Underwritten Offering.
(f) The Company agrees not to take any action (except as
required by law, court order, or legal process) under Exon-Florio with respect
to the transactions contemplated by this Agreement and/or any of the agreements
relating to this Agreement.
(g) The Company acknowledges and agrees that the Company shall
permit, and use its best efforts to facilitate, the assignment and transfer of
the Escrowed Shares in order to cure any violation or asserted violation of
Exon-Florio arising out of the Purchaser's ownership of the Escrowed Shares.
6. Company's Conditions to Closing. The Company's obligation to issue
and sell the Notes will be subject to the accuracy of the representations and
warranties of the Purchaser and to the performance by the Purchaser of its/his
obligations hereunder.
7. Purchaser's Conditions to Closing. The Purchaser's obligation to
purchase and pay for the Notes will be subject to the accuracy of the
representations and warranties on the part of the Company herein as of the
Closing Date, to the performance by the Company of its obligations hereunder and
to the following additional conditions precedent:
(a) The Purchaser shall have received from Company's Chief
Executive Officer or President and the Chief Financial Officer of the Company a
certificate, dated the Closing Date, in which such officers shall state that, to
the best of their knowledge and after reasonable investigation, the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date, and the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date.
(b) The Purchaser shall have received from the Company's Chief
Executive Officer, President and Chief Financial Officer a certification in
substantially the form of Exhibit E hereto with
10
<PAGE> 11
respect to the Company's use of the proceeds resulting from the sale and
purchase of the Notes.
(c) The Purchaser shall have received on the Closing Date the
opinion of Gallagher, Briody & Butler, counsel to the Company, dated the Closing
Date, to the effect that:
(i) The Company is validly existing and is in good
standing under the laws of the State of Delaware;
(ii) This Agreement has been duly authorized,
executed and delivered by the Company;
(iii) The Notes have been duly authorized, and when
executed and delivered to and paid for by the Purchaser in accordance with the
terms of this Agreement, will constitute valid and legally binding obligations
of the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles, and
subject, as to enforcement of the conversion right of the Notes held by foreign
persons, to Exon-Florio;
(iv) Assuming that the representations, warranties
and covenants of the Purchaser contained in this Agreement are true and correct
or have been and will be complied with, no consent, approval, authorization,
order, registration or qualification of or with any court or governmental agency
or body is required for the issuance and sale of the Securities or the
performance by the Company of its obligations thereunder, the conversion of the
Notes into shares of Common Stock, the issuance of those certain shares (the
"Escrowed Shares") to be issued in accordance with a certain stock purchase
agreement of even date herewith in the event that the Notes are not repaid on or
before the expiration of the 90-day period commencing on the Closing Date, or
the consummation by the Company of the transactions contemplated by this
Agreement.
The foregoing opinion may be limited to the laws of the United
States, the laws of the State of New Jersey, and the laws of the State of
Delaware. Gallagher, Briody & Butler may rely as to questions of fact upon the
representations of the Company and the Purchasers set forth in this Agreement
and upon certificates of officers of the Company and of government officials. In
addition, Gallagher, Briody & Butler may state that it has made no special
inquiry or investigation in respect of opinions that are rendered to the
knowledge and information of such firm.
8. Offering of Securities; Restrictions on Transfer.
(a) The Purchaser acknowledges and agrees that the Notes and
the Escrowed Shares issuable upon conversion of the Notes have not been and will
not be registered under the Securities Act and
11
<PAGE> 12
have not been and may not be offered or sold within the United States or to, or
for the account or benefit of, United States persons except in accordance with
Regulation S or pursuant to an exemption from the registration requirements of
the Securities Act. The Purchaser represents and agrees that it/he will offer
and sell the Securities only in accordance with (i) Regulation S, (ii) an
exemption from registration under the Securities Act, or (iii) an effective
registration statement under the Securities Act. Without limiting the generality
of the foregoing, the Purchaser agrees that it/he will not transfer the Notes
and Escrowed Shares on or prior to forty (40) days after the Closing Date.
(b) The Purchaser further acknowledges and agrees that neither
it/he nor its/his affiliates, nor any persons acting on its/his behalf, has
engaged or will engage in any directed selling efforts in the United States (as
defined in Regulation S) with respect to the Securities, and the Purchaser,
its/his affiliates and all persons acting on each Purchaser's behalf have
complied and will comply with the offering restrictions requirement of
Regulation S. The Purchaser agrees that, at or prior to confirmation of any sale
of Securities the Purchaser will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases the
Securities from such Purchaser during the restricted period a confirmation or
notice to substantially the following effect:
"The securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may
not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of the
distribution thereof at any time or (ii) otherwise until 40
days after the later of the date of the commencement of the
offering and the closing date, except in either case in
accordance with Regulation S under the Securities Act. Terms
used above have the meanings given to them by Regulation S."
(c) The Purchaser is not a "distributor" as that term is used
in Regulation S.
(d) The Purchaser agrees that it/he will not offer or sell the
Securities purchased from the Company hereunder by means of any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act).
(e) The Purchaser represents, warrants and agrees that it/he
will not offer or sell any Securities in any jurisdiction except under
circumstances that will result in compliance with the applicable laws thereof,
and that the Purchaser will take at
12
<PAGE> 13
its/his own expense whatever action is required to permit offers, sales or the
purchase and resale by it/him of the Securities. The Purchaser understands that
no action has been taken by the Company to permit a public or private offering
in any jurisdiction outside the United States where action would be required for
such purpose.
(f) The Purchaser represents and agrees that any activities
with respect to the Securities or the Common Stock in connection with the
distribution of the Securities will be conducted in compliance with the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") including without limitation Rule 10b-7 under the Exchange Act
to the extent such Rule is applicable thereto.
(g) (1) The Purchaser agrees that any distributor shall agree
in writing that all offers and sales of the Securities prior to the expiration
of the restricted period specified in Rule 903(c)(2) or (3), as applicable,
shall be made only: in accordance with the provisions of Rule 903 or 904;
pursuant to registration of the Securities under the Securities Act; or pursuant
to an available exemption from the registration requirements of the Securities
Act; and
(2) All offering materials and documents (other than
press releases) used in connection with offers and sales of the Securities prior
to the expiration of the restricted period specified in Rule 903(c)(2) or (3),
as applicable, shall include statements to the effect that the Securities have
not been registered under the Securities Act and may not be offered or sold in
the United States or to U.S. persons (other than distributors) unless the
Securities are registered under the Securities Act, or an exemption from the
registration requirements of the Securities Act is available. Such statements
shall appear:
(i) on the cover or inside cover page of any
prospectus or offering circular used in connection with the offer or sale of the
Securities;
(ii) in the underwriting section of any
prospectus or offering circular used in connection with the offer or sale of the
Securities;
(iii) in any advertisement made or issued by
the issuer, any distributor, any of their respective affiliates, or any person
acting on behalf of any of the foregoing. Such statements may appear in summary
form on prospectus cover pages and in advertisements.
(3) The Purchaser acknowledges and agrees that any
offer or sale of the Securities, if made prior to the expiration of a 40-day
restricted period, shall not be made to a U.S. person or for the account or
benefit of a U.S. person (other than a
13
<PAGE> 14
distributor).
(4) The Purchaser acknowledges and agrees that any
distributor selling Securities to a distributor, a dealer, as defined in Section
2(12) of the Securities Act, or a person receiving a selling concession, fee or
other remuneration in respect of the securities sold, prior to the expiration of
a 40-day restricted period, shall agree to send a confirmation or other notice
to the purchaser stating that the purchaser is subject to the same restrictions
on offers and sales that apply to a distributor.
(h) The Purchaser agrees that in the case of an offer or sale
of Securities prior to the expiration of the restricted period specified in Rule
903(c)(2) or (3), a applicable, by a dealer, as defined in Section 2(12) of the
Securities Act, or a person receiving a selling concession, fee or other
remuneration in respect of the securities offered or sold:
(i) neither the seller nor any person acting on his
behalf knows that the offeree or buyer of the securities is a U.S. person; and
(ii) if the seller or any person acting on the
seller's behalf knows that the Purchaser is a dealer, as defined in Section
2(12) of the Securities Act, or is a person receiving a selling concession, fee
or other remuneration in respect of the Securities sold, the seller or a person
acting on the seller's behalf sends to the Purchaser a confirmation or other
notice stating that the Securities may be offered and sold during the restricted
period only: in accordance with the provisions of Regulation S; pursuant to
registration of the securities under the Securities Act; or pursuant to an
available exemption from the registration requirements of the Securities Act.
Terms used in this Section 8 and Section 5 have the meanings
given to them by Regulation S, unless otherwise indicated. The Purchasers agree
to indemnify and hold the Company, its officers, directors, attorneys,
representatives, and shareholders, or any person who may be deemed to control
the Company, harmless from any loss, liability, claim, damage or expense,
arising out of the inaccuracy of any of the Purchasers' representations,
warranties or statements or the breach of any of the agreements contained herein
to the extent, but only to the extent, that such loss, liability, claim, damage
or expense results primarily from the Purchasers' gross negligence, recklessness
or bad faith with respect to such representation, warranty, statement or
agreement.
9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained
in this Agreement, or contained in certificates of officers of the
Company submitted hereto shall remain operative and in full force
14
<PAGE> 15
and effect, regardless of any termination of this Agreement, or any
investigation, or any statement as to the results thereof.
10. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Purchaser shall be
directed to the Purchaser at the address set forth on the signature page of this
Agreement; and notices to the Company shall be directed to it at 5115 Campus
Drive, Plymouth Meeting, PA 19462-1129, Attn: Thomas R. Thomsen, Chairman and
Chief Executive Officer.
11. Parties. This Agreement shall inure to the benefit of and be
binding upon the Company and the Purchaser and their respective successors and
assigns, provided that the Notes shall be non-negotiable and non-transferable.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person, firm or corporation any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
15
<PAGE> 16
Please confirm your agreement to the foregoing by signing in the space
provided below for that purpose and returning to us a copy hereof, whereupon
this Agreement shall constitute a binding agreement between the Company, on the
one hand, and you on the other hand.
Very truly yours,
LITHIUM TECHNOLOGY CORPORATION
By:__________________________________
Thomas R. Thomsen, Chairman
and Chief Executive Officer
Agreed and Accepted:
PURCHASER:
Principal Amount of
Convertible Notes to
Name of Purchaser: be Purchased:
_________________________________
Signature of Purchaser's
Authorized Officer:
_________________________________
Name of Purchaser's Authorized
Officer (Please Print):
_________________________________
Title of Purchaser's Authorized
Officer:
_________________________________
Purchaser's Address:_____________
_________________________________
Purchaser's Jurisdiction of
Organization:____________________
Purchaser's Telephone
Number:__________________________
Purchaser's Fax
Number:_________________________
16
<PAGE> 1
EXHIBIT 10.30
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") OR UNDER ANY OTHER APPLICABLE
SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF REGISTRATION UNDER THE ACT OR SUCH LAWS OR
AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO LITHIUM
TECHNOLOGY CORPORATION, THAT SUCH REGISTRATION IS NOT
REQUIRED.
CONVERTIBLE NOTE
FOR VALUE RECEIVED, the undersigned (the "Borrower") promises to pay to
______________________ (the "Lender"), _______________
_________________________________ DOLLARS ($_________), together with interest,
as follows:
1. CONVERTIBLE NOTE AGREEMENT: This Note evidences a loan in the amount
of $_________ (the "Loan") arising out of and governed by the terms of a
Convertible Note Purchase Agreement dated the date hereof by and between the
Borrower and the Lender (the "Note Agreement"). Capitalized terms used herein
and not otherwise defined shall have the meaning ascribed thereto in the Note
Agreement. This Note is convertible under the terms and conditions specified in
the Note Agreement.
2. PAYMENT; INTEREST RATE: The principal amount of this Note shall be
repaid on the earlier to occur of (i) the expiration of the period of ninety
(90) days from and after the Closing Date or (ii) the closing of an underwritten
offering of the Company's Common Stock registered with the SEC and as described
in the commitment letter between the Company and Laidlaw & Co. attached to the
Note Agreement as Exhibit A (hereinafter the "Underwritten Offering"). The
repayment date shall hereinafter be referred to as the "Maturity Date". The
Company shall have the right upon five (5) days prior written notice to extend
the Maturity Date of the Notes on two (2) occasions for periods not to exceed
thirty (30) days. The Company shall not have the right to extend the Maturity
Date of the Notes beyond the closing date of the Underwritten Offering. In the
event that (a) the Company has not delivered either of the aforesaid extension
notices and (b) the Company has not repaid the Notes as of the then applicable
Maturity Date, the Company shall nevertheless be deemed to have elected to
extend the Notes as if the Company actually had delivered the extension notice,
and the First Extension Shares and/or the Second Extension Shares as applicable
(as defined in the stock purchase agreement
<PAGE> 2
referred to in Section 1(d) of the Note Agreement as Exhibit B) shall be deemed
to have been earned by the Lender. Interest on this Note arising on or before
the 150th day after the Closing Date shall be paid and satisfied in full by the
Investment/Interest Shares issued to the Purchaser in accordance with the stock
purchase agreement referred to in Section 1(d) of the Note Agreement as Exhibit
B. In the event that any principal amount of this Note remains unpaid or not
converted into Escrowed Shares on or after 151st day after the Closing Date, the
unpaid principal amount (until paid or converted into Escrowed Shares) shall
accrue interest at the rate of 10.0% per annum based on a 360-day year, which
interest (i) shall accrue for, and be payable in cash at the end of, the first
six months commencing on such 151st day and (ii) shall thereafter accrue and be
payable in cash on a monthly basis in arrears.
3. TERM: The Loan shall mature on the 90th day from and after the
Closing Date, subject to the extension periods provided for in the Note
Agreement.
4. PREPAYMENTS: Prepayment will be permitted in whole or in part at any
time without fee or penalty.
5. DEFAULT: The Borrower shall be in default under this Note upon the
occurrence: of (i) any of the events specified in Section 5(a) hereof and the
failure to cure such default within three (3) days after receipt of written
notice thereof from the Purchaser; (ii) any of the events specified in Section
5(b) hereof and the failure to cure such default within fifteen (15) days after
receipt of written notice thereof from the Purchaser; or (iii) any of the events
specified in Section 5(c) hereof (any of the foregoing being an "Event of
Default"):
(a) Failure to make any payment required under this Note on
the Maturity Date or on the due date of any other payment;
(b) Any material default shall occur under the terms and
provisions of the Note Agreement; or
(c) Insolvency of, business failure of, or an assignment for
the benefit of creditors by or the filing of a petition under bankruptcy,
insolvency or debtor's relief law, or for any readjustment of indebtedness,
composition or extension by the Borrower, or commenced against the Borrower
which is not discharged within sixty (60) days.
6. CHANGES; PARTIES: This Note can only be changed by an agreement in
writing signed by the Borrower and the Purchaser. This Note shall inure to the
benefit of and be binding upon the Borrower and the Lender and their respective
successors and assigns, provided that this Note and the obligations hereunder
shall be non-negotiable and non-transferable.
2
<PAGE> 3
7. GOVERNING LAW: This Note shall be construed according to the laws of
the State of New Jersey and the Borrower and the Lender by acceptance hereof
consent to the jurisdiction of the federal and state courts of the State of New
Jersey to determine any questions of fact or law arising under this Note. The
Borrower and Lender waive trial by jury and consent to and confer personal
jurisdiction on the courts of the State of New Jersey or of the Federal
Government, and expressly waive any objections as to venue in any of such
courts, and agree that service of process may be made by mailing a copy of the
summons to its/his respective address.
IN WITNESS WHEREOF, the Borrower has executed this Note as of the day
and year set forth below.
LITHIUM TECHNOLOGY CORPORATION
By:________________________________
Thomas R. Thomsen, Chairman
and Chief Executive Officer
October 23, 1996
3
<PAGE> 1
EXHIBIT 10.31
STOCK PURCHASE AGREEMENT
AGREEMENT made as of October 23, 1996 by and among Lithium Technology
Corporation, a Delaware corporation (the "Company"), and_____________________
(the "Purchaser").
WITNESSETH:
WHEREAS, the Company and the Purchaser have entered into a $___________
Convertible Note Purchase Agreement of even date herewith (the "Note Agreement")
pursuant to which, among other things, the Purchaser has loaned to the Company
the principal amount of $____________________; and
WHEREAS, in connection with the transactions contemplated under the
Note Agreement, the Company and the Purchaser desire to provide for and agree to
the issuance and sale of certain shares of the Company's common stock (the
"Common Stock") to the Purchaser upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants made herein and in the Note Agreement, and for other good and valuable
consideration, receipt and sufficiency of which are hereby acknowledged, the
Company and the Purchaser hereby agree as follows. Capitalized terms used herein
and not otherwise defined shall have the meaning ascribed thereto in the Note
Agreement.
1. Investment/Interest Shares. In consideration of the Purchaser's
advance of the principal amount of the Notes to the Company and other services
to be rendered, and in payment of all
<PAGE> 2
interest due on the Notes arising through and including the 150th day from and
after the Closing Date, the Company shall issue to the Purchaser on the Closing
Date___________ shares of Common Stock (the "Investment/Interest Shares"). For
purposes of this Agreement, the term "Current Market Value" shall mean the
average of the daily averages of the closing bid and closing asked prices of the
Common Stock for the five (5) trading days immediately preceding the day on
which the calculation is being made and given effect.
2. Escrowed Shares. Subject to early issuance pursuant to Section 5(e)
of the Note Agreement, in the event that the principal amount of the Notes is
not repaid on or before the expiration of the period of ninety (90) days from
and after the Closing Date, the Company agrees on the 91st day from and after
the Closing Date to issue to the Purchaser and deliver to an escrow agent
mutually satisfactory to the Purchaser and the Company pursuant to an exemption
from registration of the Common Stock under Regulation S under the Securities
Act the number of shares of Common Stock of the Company equal to U.S. $3,500,000
divided by 70% of the Current Market Value of the Company's securities on the
date of issuance of such shares which shall then be multiplied by the fraction
whose numerator is the principal amount of the Purchaser's Notes on the
2
<PAGE> 3
Closing Date and whose denominator is $1,750,000 (the "Escrowed Shares")
provided, however, that in the event that the Company exercises the First
Extension and the Current Market Value of the Company's Common Stock is less on
the 121st day after the Closing Date than the Current Market Value of the
Company's Common Stock was on the 91st day after the Closing Date, then the
number of Escrowed Shares determined in accordance with this sentence, issued to
the Purchaser, and deposited with the aforementioned escrow agent shall be
recalculated as of the 121st day as if the Current Market Value of the Company's
Common Stock referred to in subclause (i) of this Section 1(d) were determined
on such 121st day after the Closing Date; and further, provided, that in the
event that the Company exercises the Second Extension and the Current Market
Value of the Company's Common Stock is less on the 151st day after the Closing
Date than the Current Market Value of the Company's Common Stock was on either
the 91st day after the Closing Date or the 121st day after the Closing Date,
then the number of Escrowed Shares determined in accordance with this sentence,
issued to the Purchaser, and deposited with the aforementioned escrow agent
shall be recalculated as of the 151st day after the Closing Date as if the
Current Market Value of the Company's Common Stock referred to in sub-clause (i)
of this Section 1(d) were determined on such 151st day after the Closing Date.
It is the expressed understanding of the Purchaser and the Company that the
Escrowed Shares shall not be released from escrow to the Purchasers until and
unless an Event of Default (as defined in the Notes) has
3
<PAGE> 4
occurred under the Notes and the Purchaser has elected to accept all the then
outstanding Escrowed Shares as payment in full of the then outstanding Notes, or
as otherwise provided in the Note Agreement or Escrow Agreement.
3. Extension Shares. In the event that the Company exercises one or
both of the options to extend the Maturity Date as provided for in Section 1(c)
of the Note Agreement, the Company shall issue the following shares of Common
Stock to the Purchaser:
a. First Extension. In the event that the Company
exercises the first extension referred to in Section 1(c) of
the Note Agreement, the Company shall issue to the Purchaser
the number of shares of Common Stock (the "First Extension
Shares") equal to $175,000 divided by 80% of the Current
Market Value of the Common Stock as determined by the above
calculation on the first day of such first extension which
shall then be multiplied by the fraction whose numerator is
the principal amount of the Purchaser's Notes on the Closing
Date and whose denominator is $1,750,000.
b. Second Extension. In the event that the Company
exercises the second extension referred to in Section 1(c) of
the Note Agreement, the Company shall issue to the Purchaser
the number of shares of Common Stock (the "Second Extension
Shares") equal to $175,000 divided by 80% of the Current
Market Value of the Common Stock as determined by the above
calculation on the first
4
<PAGE> 5
day of such second extension which shall then be multiplied by
the fraction whose numerator is the principal amount of the
Purchaser's Notes on the Closing Date and whose denominator is
$1,750,000.
4. Late Registration Statement Shares. In the event that the
registration statement relating to the Laidlaw & Co. Underwritten Offering (the
"Registration Statement") is not filed with the U.S. Securities and Exchange
Commission within thirty (30) days after the Closing Date, then the Company
shall issue to the Purchaser shares of Common Stock based upon the following
formula:
(i) The number of shares of Common Stock equal to U.S.
$43,750 divided by 80% of the Current Market Value
of the Shares as determined by the above
calculation on the 30th day following the Closing
Date which shall then be multiplied by the fraction
whose numerator is the principal amount of the
Purchaser's Notes on the Closing Date and whose
denominator is $1,750,000. Additionally, at the
end of each seven (7) day period following the
expiration of the initial 30 day period from and
after the Closing Date that the Registration
Statement relating to the Underwritten Offering is
not filed, the Company shall issue to the Purchaser
on a weekly basis the number of Shares of Common
Stock of the Company based upon the following
formula:
5
<PAGE> 6
(a) The number of Shares of Common Stock equal
to $8,750 divided by 80% of the Current
Market Value of the Common Stock as
determined by the above calculation on the
first day of each such seven-day period that
the Registration Statement has not been
filed by the Company which shall then be
multiplied by the fraction whose numerator
is the principal amount of the Purchaser's
Notes on the Closing Date and whose
denominator is $1,750,000 and pro rated (on
the basis of a five day week) for the number
of business days during each such seven-day
period that the Registration Statement is
not filed.
5. The Company's Representations and Warranties. The Company hereby
represents and warrants to, and agrees with, the Purchaser that:
(a) The Disclosure Documents do not contain any untrue
statement of a material fact or omit to state any material fact as of their
respective dates of filing with the SEC and/or issuance to the media (as
applicable) necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. There has been no
material adverse change in the Company's business or financial condition since
October 14, 1996.
6
<PAGE> 7
(b) The Company has been duly incorporated, is validly
existing, and is in good standing under the laws of the State of Delaware with
corporate power and authority to own its property and to conduct its business as
described in the Disclosure Documents and to enter into and perform its
obligations under this Agreement.
(c) All of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and will not subject the holders thereof to personal liability by
reason of being such holders. There are no preemptive rights of any shareholder
of the Company with respect to any securities of the Company. The shares of
Common Stock issuable pursuant to this Agreement ("Shares") have been duly and
validly authorized and reserved for issuance and, when issued and delivered in
accordance with the terms of this Agreement, will be duly and validly issued,
fully paid and non-assessable. The Company is a "Domestic Issuer" and a
"Reporting Issuer," as such terms are as defined by Rule 902 of Regulation S.
The Company has registered its common stock pursuant to Section 12(b) or (g) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is in full
compliance with all reporting requirements of either Section 13(a) or 15(d) of
the Exchange Act, and the Company's common stock trades on the Electronic
Bulletin Board. The Company has not offered the Shares to any person in the
United States, any identifiable group of U.S. citizens abroad, or to any U.S.
Person (as defined by Regulation S). At the time the buy order (if any) was
originated, the Company and/or its agents reasonably believed the Purchaser was
7
<PAGE> 8
outside the United States and was not a U.S. Person based on the Purchaser's
representations set forth herein. The Company and/or its agents reasonably
believe that the sale of Shares has not been prearranged with a buyer in the
United States. The execution and delivery of this Agreement and the consummation
of the issuance of the Shares and the transactions contemplated by this
Agreement do not and will not (1) require the consent, authorization, or
approval of any third party or any government body, or (2) conflict with or
result in a material breach by the Company of any of the terms or provisions of,
or constitute a default under, the articles of incorporation or bylaws of the
Company, or any indenture, mortgage, deed of trust or other material agreement
or instrument to which the Company is a party or by which it or any of its
properties or assets are bound, or any existing applicable decree judgment or
order of any court, Federal or State regulatory body, administrative agency or
other governmental body having jurisdiction over the Company or any of its
properties or assets. The Company will instruct its transfer agent to issue one
or more share certificates representing the Shares with the following
restrictive legend set forth below in the name of the Purchaser and in such
denominations to be specified by the Purchaser prior to closing:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ISSUED PURSUANT TO REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD,
8
<PAGE> 9
TRANSFERRED, HYPOTHECATED OR OTHERWISE
DISPOSED OF TO ANY U.S. PERSON (AS SUCH TERM
IS DEFINED UNDER REGULATION S) UNTIL THE 41st
DAY FOLLOWING THE DATE OF THEIR PURCHASE BY
THE REGISTERED HOLDER. AS SUCH, THIS LEGEND,
AND ANY EXISTING STOP TRANSFER INSTRUCTIONS TO
THE TRANSFER AGENT SHALL EXPIRE ON _______,
1996.
The Company further warrants that no instructions other than these
instructions, and instructions for a "stop transfer" until the end of the
Restricted Period (as defined by Regulation S), have been given to the transfer
agent and also warrants that the Shares shall otherwise be freely transferable
on the books and records of the Company after the end of the Restricted Period
in compliance with Regulation S. The Company will notify the transfer agent of
the date of completion of the offering and of the date of expiration of the
Restricted Period. The Company has taken and will take no action that will
affect in any way the running of the Restricted Period or the ability of the
Purchaser to resell the Shares in accordance with applicable securities laws and
this Agreement; and the Company will comply with all applicable securities laws
and regulations with respect to the sale of the Shares, including but not
limited to the filing of all reports required to be filed in connection
therewith with the Securities and Exchange Commission or any stock exchange or
NASDAQ or any other regulatory authority.
9
<PAGE> 10
(d) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles, and
subject to the Exon-Florio provision of the Omnibus Trade and Competitiveness
Act of 1988 ("Exon-Florio").
6. The Purchaser's Representations and Warranties. The Purchaser hereby
represents and warrants to, and agrees with, the Company that:
(a) The Purchaser (if not a natural person) has been duly
organized, is validly existing, and is in good standing under the laws of the
jurisdiction of its formation with corporate or other power and authority to own
its property and to conduct its business and to enter into and perform its
obligations under this Agreement.
(b) The execution, delivery and performance of this Agreement
by the Purchaser has been duly authorized by all necessary action of the
Purchaser.
(c) This Agreement constitutes the legal, valid and binding
obligation of the Purchaser enforceable in accordance with its terms, except as
the same may be modified by bankruptcy, insolvency, moratorium and other similar
laws affecting creditors' rights generally and by general principles of equity.
10
<PAGE> 11
(d) The Purchaser has received and reviewed the Company's
Disclosure Documents and the Purchaser or the Purchaser's designated
representative has concluded a satisfactory due diligence investigation of the
Company and has had an opportunity to have all their questions regarding the
Company satisfactorily answered.
(e) The Purchaser is acquiring the securities referred to
herein for investment purposes only without intent to distribute the same, and
acknowledges that (A) such securities have not been registered under the
Securities Act and applicable state securities laws, and accordingly, constitute
"restricted securities" for purposes of the Securities Act and such state
securities laws, (B) the Purchaser will not be able to transfer such securities
except upon compliance with the registration requirements of the Securities Act
and applicable state securities laws or exemptions therefrom including without
limitation Regulation S, (C) the certificates evidencing such securities may
contain a legend to the foregoing effect, (D) such securities are speculative
and involve a high degree of risk and the Purchaser is able to sustain the loss
of the entire amount of his/its investment, and (E) the Purchaser has previously
invested in unregistered securities and has sufficient financial and investing
expertise to evaluate and understand the risks of such securities.
(f) The Purchaser is not a United States person, United States
citizen or resident nor an entity organized under the laws of the United States
or any of the States, nor located in the
11
<PAGE> 12
United States, nor purchasing the aforementioned securities directly or
indirectly for the account or benefit of or on behalf of a United States citizen
or resident or such entity. The Purchaser is familiar with and understand the
provisions of Regulation S promulgated under the Securities Act.
7. The Company's Covenants. In further consideration of the Purchaser's
agreements herein contained, the Company covenants and agrees with the Purchaser
as follows:
(a) To qualify the shares referred to herein for offer and
sale under the state securities or blue sky laws of such jurisdictions as the
Purchaser shall reasonably request and to maintain such qualifications in effect
for so long as required for the resale of such shares by the Purchaser, in no
case to exceed one year from the date of conversion and except that the Company
shall not be required in connection therewith to qualify as a foreign
corporation.
(b) The Company agrees to reserve and keep available at all
times, free of pre-emptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligations to issue shares of its Common
Stock upon the terms of this Agreement.
8. Offering of Securities; Restrictions on Transfer.
(a) The Purchaser acknowledges and agrees that the Shares
issuable in accordance with the terms of this Stock Purchase Agreement have not
been and will not be registered under the Securities Act and have not been and
may not be offered or sold within the United States or to, or for the account or
benefit of,
12
<PAGE> 13
United States persons except in accordance with Regulation S or pursuant to an
exemption from the registration requirements of the Securities Act. The
Purchaser represents and agrees that it/he will offer and sell the Shares only
in accordance with (i) Regulation S, (ii) an exemption from registration under
the Securities Act, or (iii) an effective registration statement under the
Securities Act. Without limiting the generality of the foregoing, the Purchaser
agrees that it/he will not transfer the Shares on or prior to forty (40) days
after the Closing Date.
(b) The Purchaser further acknowledges and agrees that neither
it/he nor its/his affiliates, nor any persons acting on its/his behalf, has
engaged or will engage in any directed selling efforts (as defined in Regulation
S) with respect to the Shares, and the Purchaser, its/his affiliates and all
persons acting on the Purchaser's behalf have complied and will comply with the
offering restrictions requirement of Regulation S. The Purchaser agrees that, at
or prior to confirmation of any sale of Shares the Purchaser will have sent to
each distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases such Shares from Purchaser during the restricted
period a confirmation or notice to substantially the following effect:
"The securities covered hereby have not been
registered under the U.S. Securities Act of
1933 (the "Securities Act") and may not be
offered or sold within the United States or
to, or for the account or benefit of, U.S.
persons (i) as part of the distribution
thereof at any time or (ii) otherwise until
40 days after the later of the date of the
commencement of the offering and the closing
date, except in either case in accordance
with
13
<PAGE> 14
Regulation S under the Securities Act. Terms
used above have the meanings given to them by
Regulation S."
(c) The Purchaser is not a "distributor" as that term is used
in Regulation S.
(d) The Purchaser agrees that it/he will not offer or sell the
Shares purchased from the Company hereunder by means of any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act).
(e) The Purchaser represents, warrants and agrees that it/he
will not offer or sell any Shares in any jurisdiction except under circumstances
that will result in compliance with the applicable laws thereof, and that the
Purchaser will take its/his own expense whatever action is required to permit
offers, sales or the purchase and resale by it/them of the Shares. The Purchaser
understands that no action has been taken by the Company to permit a public or
private offering in any jurisdiction outside the United States where action
would be required for such purpose.
(f) The Purchaser represents and agrees that any activities
with respect to the Shares or the Common Stock in connection with the
distribution of the Shares will be conducted in compliance with the Securities
Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act")
including without limitation Rule 10b-7 under the Exchange Act to the extent
such Rule is applicable thereto.
(g) (1) The Purchaser agrees that any distributor shall agree
in writing that all offers and sales of the Shares prior to
14
<PAGE> 15
the expiration of the restricted period specified in Rule 903(c)(2) or (3), as
applicable, shall be made only: in accordance with the provisions of Rule 903 or
904; pursuant to registration of the Shares under the Securities Act; or
pursuant to an available exemption from the registration requirements of the
Securities Act; and
(2) All offering materials and documents (other than
press releases) used in connection with offers and sales of the Shares prior to
the expiration of the restricted period specified in Rule 903(c)(2) or (3), as
applicable, shall include statements to the effect that the Shares have not been
registered under the Securities Act and may not be offered or sold in the United
States or to U.S. persons (other than distributors) unless the Shares are
registered under the Securities Act, or an exemption from the registration
requirements of the Securities Act is available. Such statements shall appear:
(i) on the cover or inside cover page of any
prospectus or offering circular used in connection with the offer or sale of the
Shares;
(ii) in the underwriting section of any
prospectus or offering circular used in connection with the offer or sale of the
Shares;
(iii) in any advertisement made or issued by
the issuer, any distributor, any of their respective affiliates, or any person
acting on behalf of any of the foregoing. Such
15
<PAGE> 16
statements may appear in summary form on prospectus cover pages and
in advertisements.
(3) The Purchaser acknowledges and agrees that any
offer or sale of the Shares, if made prior to the expiration of a 40-day
restricted period, shall not be made to a U.S. person or for the account or
benefit of a U.S. person (other than a distributor).
(4) The Purchaser acknowledges and agrees that any
distributor selling Shares to a distributor, a dealer, as defined in Section
2(12) of the Securities Act, or a person receiving a selling concession, fee or
other remuneration in respect of the securities sold, prior to the expiration of
a 40-day restricted period, shall agree to send a confirmation or other notice
to the purchaser stating that the purchaser is subject to the same restrictions
on offers and sales that apply to a distributor.
(h) The Purchaser agrees that in the case of an offer or sale
of Shares prior to the expiration of the restricted period specified in Rule
903(c)(2) or (3), a applicable, by a dealer, as defined in Section 2(12) of the
Securities Act, or a person receiving a selling concession, fee or other
remuneration in respect of the securities offered or sold:
(i) neither the seller nor any person acting on his
behalf knows that the offeree or buyer of the securities is a U.S. person; and
(ii) if the seller or any person acting on the
seller's behalf knows that the Purchaser is a dealer, as defined in Section
2(12) of the Securities Act, or is a person receiving a
16
<PAGE> 17
selling concession, fee or other remuneration in respect of the Shares sold, the
seller or a person acting on the seller's behalf sends to the Purchaser a
confirmation or other notice stating that the Shares may be offered and sold
during the restricted period only: in accordance with the provisions of
Regulation S; pursuant to registration of the securities under the Securities
Act; or pursuant to an available exemption from the registration requirements of
the Securities Act.
Terms used in this Section 8 and Section 5 have the meanings
given to them by Regulation S, unless otherwise indicated. The Purchasers agree
to indemnify and hold the Company, its officers, directors, attorneys,
representatives, and shareholders, or any person who may be deemed to control
the Company, harmless from any loss, liability, claim, damage or expense,
arising out of the inaccuracy of any of the Purchasers' representations,
warranties or statements or the breach of any of the agreements contained herein
to the extent, but only to the extent, that such loss, liability, claim, damage
or expense results primarily from the Purchasers' gross negligence, recklessness
or bad faith with respect to such representation, warranty, statement or
agreement.
9. Miscellaneous.
(a) Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers shall remain operative and
in full force and effect,
17
<PAGE> 18
regardless of any termination of this Agreement, or any investigation, or any
statement as to the results thereof.
(b) Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Purchaser
shall be directed to the Purchaser at the address set forth on the signature
page of the Note Agreement; and notices to the Company shall be directed to it
at 5115 Campus Drive, Plymouth Meeting, PA 19462-1129, Attn: Thomas R. Thomsen,
Chairman and Chief Executive Officer.
(c) Parties. This Agreement shall inure to the benefit of and
be binding upon the Company and the Purchaser and their respective successors
and assigns. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained.
(d) Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey.
18
<PAGE> 19
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
LITHIUM TECHNOLOGY CORPORATION
By:_________________________________
Thomas R. Thomsen, Chairman
and Chief Executive Officer
PURCHASER:
By:_________________________________
Name:____________________________
Title:___________________________
19
<PAGE> 1
EXHIBIT 10.32
STOCK PURCHASE AGREEMENT
AGREEMENT made as of October 23, 1996 by and between Lithium
Technology Corporation, a Delaware corporation (the "Company"), and the
Placement Agent ("Agent").
WITNESSETH:
WHEREAS, the Agent has rendered certain services to the Company in
connection with capital formation and certain transactions of even date
herewith, and in consider therefor the Company desires to issue to the Agent
66,794 shares of (the "Agent Shares") of the Company's common stock (the
"Common Stock") and also desires to issue a warrant to the Agent (the "Agent
Warrant") (whose 87,500 underlying shares of Common Stock are referred to
herein as the "Warrant Shares"), all upon the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants made herein, and for other good and valuable consideration, receipt
and sufficiency of which are hereby acknowledged, the Company and the Agent
hereby agree as follows.
1. Agent Shares. The Company shall issue to the Agent on the
date hereof (the "Closing Date") (i) the Agent Warrant and (ii) the Agent
Shares, which shall be equal to the number of shares of Common Stock equal to
$87,500 divided by 80% of the Current Market Value of the Common Stock. For
purposes of this Agreement, the term "Current Market Value" shall mean the
average of the daily
<PAGE> 2
averages of the closing bid and closing asked prices of the Common Stock for
the five (5) trading days immediately preceding the Closing Date.
2. The Company's Representations and Warranties. The Company
hereby represents and warrants to, and agrees with, the Agent that:
(a) The Disclosure Documents (as defined below) do not
contain any untrue statement of a material fact or omit to state any material
fact as of their respective dates of filing with the SEC and/or issuance to the
media (as applicable) necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. There
has been no material adverse change in the Company's business or financial
condition since October 12, 1996. For purposes of this Agreement the term
"Disclosure Documents" shall mean the Company's Report on Form 10-KSB for the
year ended December 31, 1995, Reports on Form 10-QSB for the quarters ended
March 31, 1996 and June 30, 1996, all of the Company's reports on Form 8-K
filed with the United States Securities and Exchange Commission ("SEC") during
1996, the Company's Registration Statement on Form SB-2 as filed with the SEC
on September 3, 1996, the Company's Registration Statement on Form S-8 as filed
with the SEC on October 9, 1996, and all of the Company's press releases issued
during 1996.
(b) The Company has been duly incorporated, is validly
existing, and is in good standing under the laws of the State of Delaware with
corporate power and authority to own its property and
2
<PAGE> 3
to conduct its business as described in the Disclosure Documents and to enter
into and perform its obligations under this Agreement.
(c) All of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and will not subject the holders thereof to personal liability
by reason of being such holders. There are no preemptive rights of any
shareholder of the Company with respect to any securities of the Company. The
shares of Common Stock issuable pursuant to this Agreement and the Agent
Warrant have been duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the terms of this Agreement and
the Agent Warrant, will be duly and validly issued, fully paid and
non-assessable. The Company is a "Domestic Issuer" and a "Reporting Issuer,"
as such terms are as defined by Rule 902 of Regulation S. The Company has
registered its common stock pursuant to Section 12(b) or (g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is in full compliance
with all reporting requirements of either Section 13(a) or 15(d) of the
Exchange Act, and the Company's common stock trades on the Electronic Bulletin
Board. The Company has not offered the Agent Shares, the Agent Warrant, and
(upon the exercise of the Agent Warrant, if any) the Warrant Shares
(collectively, the "Securities") to any person in the United States, any
identifiable group of U.S. citizens abroad, or to any U.S. Person (as defined
by Regulation S). At the time the buy order (if any) was originated, the
Company and/or its agents reasonably believed the Agent was outside the United
States
3
<PAGE> 4
and was not a U.S. Person based on the Agent's representations set forth
herein. The Company and/or its agents reasonably believe that the sale of the
Securities has not been prearranged with a buyer in the United States. The
execution and delivery of this Agreement and the consummation of the issuance
of the Securities and the transactions contemplated by this Agreement do not
and will not (1) require the consent, authorization, or approval of any third
party or any government body, or (2) conflict with or result in a material
breach by the Company of any of the terms or provisions of, or constitute a
material default under, the articles of incorporation or bylaws of the Company,
or any indenture, mortgage, deed of trust or other material agreement or
instrument to which the Company is a party or by which it or any of its
properties or assets are bound, or any existing applicable decree judgment or
order of any court, Federal or State regulatory body, administrative agency or
other governmental body having jurisdiction over the Company or any of its
properties or assets. The Company will instruct its transfer agent to issue
one or more share certificates representing the Agent Shares and Warrant Shares
with the following restrictive legend set forth below in the name of the Agent
and in such denominations to be specified by the Agent prior to closing:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ISSUED PURSUANT TO REGULATION S UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
4
<PAGE> 5
TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF TO ANY U.S. PERSON
(AS SUCH TERM IS DEFINED UNDER REGULATION S) UNTIL THE 41st DAY
FOLLOWING THE DATE OF THEIR PURCHASE BY THE REGISTERED HOLDER. AS
SUCH, THIS LEGEND, AND ANY EXISTING STOP TRANSFER INSTRUCTIONS TO THE
TRANSFER AGENT SHALL EXPIRE ON _______, 1996.
The Company further warrants that no instructions other than these
instructions, and instructions for a "stop transfer" until the end of the
Restricted Period (as defined by Regulation S), have been given to the transfer
agent and also warrants that the Securities shall otherwise be freely
transferable on the books and records of the Company after the end of the
Restricted Period in compliance with Regulation S. The Company will notify the
transfer agent of the date of completion of the offering and of the date of
expiration of the Restricted Period. The Company has taken and will take no
action that will affect in any way the running of the Restricted Period or the
ability of the Agent to resell the Securities in accordance with applicable
securities laws and this Agreement; and the Company will comply with all
applicable securities laws and regulations with respect to the sale of the
Securities, including but not limited to the filing of all reports required to
be filed in connection therewith with the Securities and Exchange Commission or
any stock exchange or NASDAQ or any other regulatory authority.
5
<PAGE> 6
(d) This Agreement and the Agent Warrant have been duly
authorized, executed and delivered by the Company and constitute the valid and
legally binding obligation of the Company, enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles, and subject to the Exon-Florio provision of the
Omnibus Trade and Competitiveness Act of 1988 ("Exon-Florio").
3. The Agent's Representations and Warranties. The Agent hereby
represents and warrants to, and agrees with, the Company that:
(a) The Agent has been duly organized, is validly
existing, and is in good standing under the laws of the jurisdiction of its
formation with corporate or other power and authority to own its property and
to conduct its business and to enter into and perform its obligations under
this Agreement.
(b) The execution, delivery and performance of this
Agreement by the Agent has been duly authorized by all necessary action of the
Agent.
(c) This Agreement constitutes the legal, valid and
binding obligation of the Agent enforceable in accordance with its terms,
except as the same may be modified by bankruptcy, insolvency, moratorium and
other similar laws affecting creditors' rights generally and by general
principles of equity.
6
<PAGE> 7
(d) The Agent has received and reviewed the Company's
Disclosure Documents and the Agent or the Agent's designated representative has
concluded a satisfactory due diligence investigation of the Company and has had
an opportunity to have all its questions regarding the Company satisfactorily
answered.
(e) The Agent is acquiring the Securities (as defined
above) for investment purposes only without intent to distribute the same, and
acknowledges that (A) such Securities have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and applicable state
securities laws, and accordingly, constitute "restricted securities" for
purposes of the Securities Act and such state securities laws, (B) the Agent
will not be able to transfer such Securities except upon compliance with the
registration requirements of the Securities Act and applicable state securities
laws or exemptions therefrom including without limitation Regulation S, (C) the
certificates evidencing such Securities may contain a legend to the foregoing
effect, (D) such Securities are speculative and involve a high degree of risk
and the Agent is able to sustain the loss of the entire amount of its
investment, and (E) the Agent has previously invested in unregistered
securities and has sufficient financial and investing expertise to evaluate and
understand the risks of such Securities.
(f) The Agent is not a United States person, United
States citizen or resident nor an entity organized under the laws of the United
States or any of the States, nor located in the United States, nor purchasing
the Securities directly or indirectly
7
<PAGE> 8
for the account or benefit of or on behalf of a United States citizen or
resident or such entity. The Agent is familiar with and understands the
provisions of Regulation S promulgated under the Securities Act.
4. The Company's Covenants. In further consideration of the
Agent's agreements herein contained, the Company covenants and agrees with the
Agent as follows:
(a) The Company agrees to reserve and keep available at
all times, free of pre-emptive rights, shares of Common Stock for the purpose
of enabling the Company to satisfy any obligations to issue shares of its
Common Stock upon the terms of this Agreement and/or the Agent Warrant.
5. Offering of Securities; Restrictions on Transfer.
(a) The Agent acknowledges and agrees that the Securities
have not been and will not be registered under the Securities Act and have not
been and may not be offered or sold within the United States or to, or for the
account or benefit of, United States persons except in accordance with
Regulation S or pursuant to an exemption from the registration requirements of
the Securities Act. The Agent represents and agrees that it will offer and
sell the Securities only in accordance with (i) Regulation S, (ii) an exemption
from registration under the Securities Act, or (iii) an effective registration
statement under the Securities Act. Without limiting the generality of the
foregoing, the Agent agrees that it will not transfer the Securities prior to
forty (40) days after the Closing Date.
8
<PAGE> 9
(b) The Agent further acknowledges and agrees that
neither it nor its affiliates, nor any persons acting on its behalf, has
engaged or will engage in any directed selling efforts (as defined in
Regulation S) with respect to the Securities, and the Agent, its affiliates and
all persons acting on the Agent's behalf have complied and will comply with the
offering restrictions requirement of Regulation S. The Agent agrees that, at
or prior to confirmation of any sale of Securities the Agent will have sent to
each distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases such Securities from the Agent during the
restricted period a confirmation or notice to substantially the following
effect:
"The securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may
not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of the
distribution thereof at any time or (ii) otherwise until 40
days after the later of the date of the commencement of the
offering and the closing date, except in either case in
accordance with Regulation S under the Securities Act. Terms
used above have the meanings given to them by Regulation S."
(c) The Agent is not a "distributor" as that term is used
in Regulation S.
(d) The Agent agrees that it will not offer or sell the
Securities purchased from the Company hereunder or pursuant to the Agent
Warrant by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act).
9
<PAGE> 10
(e) The Agent represents, warrants and agrees that it
will not offer or sell any Securities in any jurisdiction except under
circumstances that will result in compliance with the applicable laws thereof,
and that the Agent will take at its own expense whatever action is required to
permit offers, sales or the purchase and resale by them of the Securities. The
Agent understands that no action has been taken by the Company to permit a
public or private offering in any jurisdiction outside the United States where
action would be required for such purpose.
(f) The Agent represents and agrees that any activities
with respect to the Securities or the Common Stock in connection with the
distribution of the Securities will be conducted in compliance with the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") including without limitation Rule 10b-7 under the Exchange Act
to the extent such Rule is applicable thereto.
(g) (1) The Agent agrees that any distributor shall
agree in writing that all offers and sales of the Securities prior to the
expiration of the restricted period specified in Rule 903(c)(2) or (3), as
applicable, shall be made only: in accordance with the provisions of Rule 903
or 904; pursuant to registration of the Securities under the Securities Act; or
pursuant to an available exemption from the registration requirements of the
Securities Act; and
(2) All offering materials and documents (other
than press releases) used in connection with offers and sales of
10
<PAGE> 11
the Securities prior to the expiration of the restricted period specified in
Rule 903(c)(2) or (3), as applicable, shall include statements to the effect
that the Securities have not been registered under the Securities Act and may
not be offered or sold in the United States or to U.S. persons (other than
distributors) unless the Securities are registered under the Securities Act, or
an exemption from the registration requirements of the Securities Act is
available. Such statements shall appear:
(i) on the cover or inside cover page of
any prospectus or offering circular used in connection with the offer or sale
of the Securities;
(ii) in the underwriting section of any
prospectus or offering circular used in connection with the offer or sale of
the Securities;
(iii) in any advertisement made or issued by
the issuer, any distributor, any of their respective affiliates, or any person
acting on behalf of any of the foregoing. Such statements may appear in
summary form on prospectus cover pages and in advertisements.
(3) The Agent acknowledges and agrees that any
offer or sale of the Securities, if made prior to the expiration of a 40-day
restricted period, shall not be made to a U.S. person or for the account or
benefit of a U.S. person (other than a distributor).
(4) The Agent acknowledges and agrees that
any distributor selling Securities to a distributor, a dealer, as
11
<PAGE> 12
defined in Section 2(12) of the Securities Act, or a person receiving a selling
concession, fee or other remuneration in respect of the securities sold, prior
to the expiration of a 40-day restricted period, shall agree to send a
confirmation or other notice to the Agent stating that the Agent is subject to
the same restrictions on offers and sales that apply to a distributor.
(h) The Agent agrees that in the case of an offer or sale
of Shares prior to the expiration of the restricted period specified in Rule
903(c)(2) or (3), a applicable, by a dealer, as defined in Section 2(12) of the
Securities Act, or a person receiving a selling concession, fee or other
remuneration in respect of the securities offered or sold:
(i) neither the seller nor any person acting on
his behalf knows that the offeree or buyer of the securities is a U.S. person;
and
(ii) if the seller or any person acting on the
seller's behalf knows that the Agent is a dealer, as defined in Section 2(12)
of the Securities Act, or is a person receiving a selling concession, fee or
other remuneration in respect of the Securities sold, the seller or a person
acting on the seller's behalf sends to the Agent a confirmation or other notice
stating that the Securities may be offered and sold during the restricted
period only: in accordance with the provisions of Regulation S; pursuant to
registration of the securities under the Securities Act; or pursuant to an
available exemption from the registration requirements of the Securities Act.
12
<PAGE> 13
Terms used in this Section 8 and Section 5 have the meanings
given to them by Regulation S, unless otherwise indicated. The Agent agrees to
indemnify and hold the Company, its officers, directors, attorneys,
representatives, and shareholders, or any person who may be deemed to control
the Company, harmless from any loss, liability, claim, damage or expense,
arising out of the inaccuracy of any of the Agent's representations, warranties
or statements or the breach of any of the agreements contained herein to the
extent, but only to the extent, that such loss, liability, claim, damage or
expense results primarily from the Agent's gross negligence, recklessness or
bad faith with respect to such representation, warranty, statement or
agreement.
6. Miscellaneous.
(a) Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers shall remain operative and
in full force and effect, regardless of any termination of this Agreement, or
any investigation, or any statement as to the results thereof.
(b) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Agent shall be directed to the Agent at the address set forth on the
signature page hereof; and notices to the Company shall be directed to it at
5115 Campus
13
<PAGE> 14
Drive, Plymouth Meeting, PA 19462-1129, Attn: Thomas R. Thomsen, Chairman and
Chief Executive Officer.
(c) Parties. This Agreement shall inure to the benefit
of and be binding upon the Company and the Agent and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained.
(d) Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
(e) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New Jersey.
14
<PAGE> 15
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first above written.
LITHIUM TECHNOLOGY CORPORATION
By:__________________________________________
Thomas R. Thomsen, Chairman
and Chief Executive Officer
Agent
By:__________________________________________
Name:_____________________________________
Title:____________________________________
Address:__________________________________
Phone Number:_____________________________
Fax Number:_______________________________
15
<PAGE> 1
EXHIBIT 10.33
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF
COMMON STOCK ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO DISTRIBUTION, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO LITHIUM TECHNOLOGY CORPORATION THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR SUCH LAWS.
VOID AFTER 5:00 P.M., EASTERN STANDARD TIME ON OCTOBER 22, 2001.
LITHIUM TECHNOLOGY CORPORATION
WARRANT TO PURCHASE COMMON STOCK
THIS CERTIFIES that the Placement Agent, its successors and assigns
(hereinafter called the "Holder"), is the registered holder of the aggregate
number of Warrants entitling the Holder to purchase from Lithium Technology
Corporation, a corporation organized and existing under the laws of the State
of Delaware (the "Company"), subject to the terms and conditions set forth
hereinafter, up to 87,500 shares (each a "Warrant Share") of the Common Stock
of the Company, (subject to adjustment as provided in Section 3, the "Common
Stock"), at the price per Warrant Share of $1.31 (subject to adjustment as
provided herein, the "Purchase Price"). The Holder shall be entitled to
exercise the Warrants, in whole or in part, upon surrender of this Warrant
Certificate, and with the subscription form annexed hereto duly executed, and
payment in lawful money of the United States of the subscription price for the
Warrants being exercised at any time on or after the date hereof and at or
prior to 5:00 P.M. (Eastern Standard Time) on the five-year anniversary of the
date hereof, at the office of the Company or, if the Company shall designate a
warrant transfer agent, at the office of such warrant transfer agent. Upon the
partial exercise of the Warrants evidenced by this Certificate, the Company
shall issue or cause to be issued to the Holder a certificate evidencing the
balance of the Warrants not then exercised. The Warrants represented by this
Warrant Certificate may not be exercised as to a fraction of a Warrant Share.
Payment of the subscription price shall be made in cash or by certified or
official bank check or by wire transfer.
1. Upon the surrender of this Warrant Certificate and payment of the
subscription price, as herein provided, the Warrants
<PAGE> 2
shall be deemed to have been exercised and the person exercising the same shall
become the Holder of record of the Warrant Shares so purchased for all purposes
on the date of such surrender and payment; provided, however, that if such date
is a date on which the stock transfer books of the Company are closed, such
person shall be deemed to have become the record Holder of such shares of
Common Stock on the next succeeding date on which the stock transfer books are
open. As soon as practicable after such surrender and payment, the Company
shall issue and deliver to, or upon the order of, the Holder a certificate or
certificates representing the Warrant Shares so purchased and, in the case of a
fractional interest in a Warrant Share, cash as provided herein. Such delivery
shall be made as promptly as practicable but within three days if the Holder
has an agent in New York City to accept delivery and within five days if the
Holder does not have an agent in New York City to accept delivery. Upon
surrender of this Warrant Certificate to the Company (or its warrant transfer
agent, if any), the Company (or warrant transfer agent) shall cancel this
Warrant Certificate, and to the extent there is a partial exercise of the
Warrants evidenced hereby, the Holder of the Warrant Certificate shall receive a
replacement Warrant Certificate of like tenor and date evidencing the number of
Warrants that shall not have been exercised, unless such Warrants shall have
expired.
2. Notwithstanding the foregoing, if the Company shall give notice to
its stockholders of the liquidation, dissolution or winding up of the Company,
the right to exercise the Warrants evidenced hereby shall terminate at the
close of business on the date specified in such notice as the record date for
determining the Company's stockholders entitled to receive any distribution
upon liquidation, dissolution or winding up.
3. The number and kinds of shares of stock of the Company issuable
upon exercise of the Warrants evidenced hereby are subject to modification and
adjustment upon the happening of certain events set forth as follows:
(a) If, at any time after the date hereof, the Company shall
declare or pay a dividend or make a distribution to its stockholders
consisting of Common Stock of the Company, the Holder shall, upon the
exercise of such Warrants after the record date for such dividend,
receive, in addition to the Warrant Shares otherwise issuable upon such
exercise, the number of shares of Common Stock as to which such Holder
would have been entitled to receive had such Holder exercised such
Warrants immediately prior to the record date for such dividend.
(b) If, at any time after the date hereof, the Company shall,
by subdivision, combination or reclassification of Common Stock, or
through merger or consolidation, or otherwise, alter or modify the
number, kind or class of shares
2
<PAGE> 3
of Common Stock, or other securities or property of the Company, then, as of the
record date of such alteration or modification, the Warrant Shares issuable
upon the exercise of a Warrant shall be adjusted so as to consist of the number
of shares of capital stock or other securities or property of the Company that
the Holder would have owned or would have been entitled to receive had the
Warrants evidenced hereby been exercised immediately prior to the record date
for such subdivision, combination or reclassification of Common Stock, or
merger or consolidation, or other alteration or modification.
(c) If, at any time after the date hereof, the Company shall make any
distribution of its assets upon or partial liquidating dividend (other than a
liquidation, dissolution, or winding up of the Company as provided for in
paragraph 5, or other than as a cash dividend payable out of earnings legally
available for dividends under the laws of the State of Delaware), the Holder
shall, upon the exercise of such Warrants after the record date for such
distribution or, in the absence of a record date, after the date of such
distribution, receive, in addition to the Warrant Shares issuable upon such
exercise, the amount of such assets that would have been distributed to such
Holder had such Holder exercised such Warrants immediately prior to the record
date for such distribution or, in the absence of a record date, immediately
prior to the date of such distribution.
(d) Unless the context otherwise indicates, all references to Warrant
Shares in this Warrant Certificate shall, in the event of an adjustment
hereunder, be deemed to refer also to any other securities or property
receivable upon exercise of the Warrants pursuant to such adjustment.
(e) The Warrant Certificate need not be amended because of any
adjustment in the number and/or content of Warrant Shares pursuant thereto, and
any Warrant Certificate delivered after such adjustment may state the same
number of Warrant Shares as is stated in the Warrant Certificate originally
delivered. However, the Company may, with the prior written consent of the
Holder, amend the from of Warrant Certificate, provided such amendment in form
does not affect the substance thereof; and any Warrant Certificate thereafter
countersigned and delivered, whether in exchange or substitution for an
outstanding Warrant Certificate or otherwise, may be in the form as so amended.
(f) The Company shall not be required to issue fractional shares of
Common Stock upon exercise of the Warrant. If, by reason of the calculation of
the number of Warrant Shares issuable upon exercise of the Warrant, or any
adjustment made pursuant to the terms hereof, the Holder would
3
<PAGE> 4
be entitled, upon the exercise thereof, to receive a fractional interest
in a share of Common Stock, the Company shall, upon such exercise,
purchase such fractional interest for an amount in cash equal to the
Purchase Price with respect to such fractional interest.
(g) The Holder shall not, upon the exercise thereof, be
entitled to any dividends that may have accrued with respect to the
Warrant Shares issuable in respect thereof, or to any interest that may
have accrued upon any evidence of indebtedness included in the Warrant
Shares, prior to the exercise date, except as otherwise provided above.
(h) Whenever the number and/or content of Warrant Shares is
adjusted pursuant to the terms hereof, the Company shall promptly mail
to the Holder at the address registered with the Company a notice
setting forth the adjusted number and/or content of Warrant Shares.
(i) In the event that any of the circumstances described in
clauses (a) and (b) above occur, the Purchase Price of the Warrant
Shares shall be adjusted accordingly and the Company shall promptly mail
to the Holder at the address registered with the Company a notice
setting forth the adjusted Purchase Price of the Warrant Shares.
(j) Except as provided in this Section 3, there shall be no
adjustment to the number of shares of stock of the Company issuable upon
exercise of the Warrants evidenced hereby.
4. This Warrant Certificate may be exchanged either separately or
in combination with one or more other Warrant Certificates evidencing Warrants
for one or more new certificates of like tenor and date for the same aggregate
number of Warrants as are evidenced by the Warrant Certificate of Warrant
Certificates exchanged.
5. In the event of the liquidation, dissolution, or winding up of
the Company (which shall not include an event described in paragraph 6), a
notice thereof shall be filed by the Company with the warrant transfer agent,
if any shall have been designated by the Company, at least thirty (30) days
prior to the record date (which date shall be specified in such notice) for
determining security holders of the Company entitled to receive any
distribution upon such liquidation, dissolution, or winding up. Such notice
also shall specify the date on which the right to exercise the Warrants shall
expire. A copy of such notice shall be mailed to the Holder at the address
registered with the Company not more than thirty (30) nor less than twenty (20)
days before such record date.
4
<PAGE> 5
6. In the case of any consolidation or merger of the Company with or
into another corporation (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of the class or classes of the
Warrant Shares), or in the case of any sale or transfer to another corporation
of the property of the Company in its entirety or substantially in its
entirety, the Holder, upon the exercise thereof at any time after such
consolidation, merger, sale or transfer, shall be entitled to receive the kind
and amount of shares of Common Stock and other securities and property which
the Holder would have received upon such consolidation, merger, sale, or
transfer had the Holder exercised its Warrants immediately prior thereto.
7. The issue of any shares of Common Stock or other certificates upon
the exercise of the Warrant shall be made without charge to the Holder for any
tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of any certificate in a name other than that
of the Holder, and the Company shall not be required to issue or deliver any
such certificate unless and until the person or persons requesting the issue
thereof shall have paid the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
8. This Warrant Certificate and all rights hereunder are transferable
on the books of the Company only upon compliance with the provisions of the
Securities Act of 1933, as amended (the "Act"), and applicable state securities
laws or by an opinion of counsel reasonably satisfactory to the Company that
registration is not required under the Act or such laws, upon surrender of this
Warrant Certificate, with the form of assignment attached hereto duly executed
by the Holder or by its attorney duly authorized in writing, to the Company at
its principal executive offices, or at the office of the warrant transfer
agent, if any, as shall have been designated by the Company, and thereupon
there shall be issued in the name of the transferee or transferees, in exchange
for this Warrant Certificate, a new Warrant Certificate or Warrant Certificates
of like tenor and date, representing in the aggregate the number of Warrants
evidenced hereby.
9. The Holder shall be entitled to certain registration rights as set
forth in a registration rights agreement of even date herewith between the
Holder and the Company.
10. If this Warrant Certificate shall be lost, stolen, mutilated or
destroyed, the Company shall, on such terms as to indemnify or otherwise
protect the Company as the Company may in its discretion impose, issue a new
Warrant Certificate of like denomination, tenor and date as the Warrant
Certificate so lost, stolen, mutilated or destroyed. Any such new Warrant
Certificate
5
<PAGE> 6
shall constitute an original contractual obligation of the Company, whether or
not the allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall
be at any time enforceable by anyone.
11. The Company may deem and treat the Holder of this Warrant
Certificate as the absolute owner of this Warrant Certificate for all purposes
and shall not be affected by any notice to the contrary.
12. This Warrant Certificate and the Warrants evidenced hereby
shall not entitle the Holder to any rights of a stockholder of the Company
either at law in or equity including, without limitation, the right to vote, to
receive dividends and other distributions, to exercise any preemptive rights
or to receive any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided herein.
13. This Warrant Certificate, in all events, shall be wholly void
and have no effect after 5:00 P.M. (Eastern Standard Time) on the five-year
anniversary of the date hereof.
14. In the event that one or more of the provisions of this Warrant
Certificate shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Warrant Certificate, but this
Warrant Certificate shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
15. This Warrant Certificate shall be binding upon any successors
or assigns of the Company.
16. This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New Jersey without giving effect to
provisions thereof governing conflicts of law.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed and delivered by its officer hereunder duly authorized.
LITHIUM TECHNOLOGY CORPORATION
By:___________________________________________
Thomas R. Thomsen
Chairman and Chief Executive Officer
October 23, 1996
6
<PAGE> 7
[Form of Subscription]
(To be Exercised by the Holder Desiring to Exercise
Warrants Evidenced by the Within Warrant Certificate)
To: LITHIUM TECHNOLOGY CORPORATION
The undersigned hereby irrevocably elects to exercise _________________
___________Warrants, evidenced by the within Warrant Certificate, for, and to
purchase thereunder, ______________________ full shares of Class B Common Stock
of Lithium Technology Corporation issuable upon exercise of said Warrants and
delivery of $__________________ in cash.
The undersigned requests that certificates for such shares be issued in
the name of _____________________________.
SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER: _________________________________________________
_______________________________
_______________________________
(Please print name and address)
_______________________________
_______________________________
_______________________________________________
(Signature)
_______________________________________________________________________________
If said number of Warrants shall not be all of the Warrants evidenced
by the within Warrant Certificate, the undersigned requests that a new Warrant
Certificate evidencing the Warrants not so exercised be issued in the name of
and delivered to:
_____________________________________________________
(Please print name and address)
_____________________________________________________
_____________________________________________________
_____________________________________________________
(Signature)
7
<PAGE> 8
NOTICE: The signature on this subscription form must correspond with the name
as written upon the face of the within Warrant Certificate, or upon the
assignment thereof, in every particular, without alteration,
enlargement, or any change whatsoever and must be guaranteed by a bank,
other than a savings bank, or trust company having an office or
correspondent in New York, New York, or by a firm having membership on a
regional securities exchange and an office in New York, New York.
8
<PAGE> 1
EXHIBIT 10.34
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement ("Agreement") made as of this 23rd day of
October, 1996, by and between the Placement Agent ("Agent") and Lithium
Technology Corporation, a Delaware corporation (the "Company")
WITNESSETH
WHEREAS, the Company and Agent have entered into (i) a stock purchase
agreement of even date herewith (the "Stock Purchase Agreement") pertaining to
the Agent Shares (as defined therein) and (ii) a warrant certificate of even
date herewith (the "Agent Warrant") pertaining to the "Warrant Shares" (as
defined therein); and
WHEREAS, the Company and Agent desire to provide herein for certain
registration rights applicable to the Agent Shares and the Warrant Shares
(hereinafter collectively referred to as the "Registerable Securities").
NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency which are hereby acknowledged, the Company and Agent hereby agree as
follows:
Agent shall be entitled to have the Company register the Registerable
Securities pursuant to one "demand registration" as described in paragraph I
hereof and up to two "piggyback registrations" as described in paragraph II
hereof.
I. At any time on or after the date hereof, and before the five year
anniversary of the date hereof, Agent shall have the right, on one and
only one occasion, to require the Company to file a Registration
Statement covering the Registerable Securities; provided, however, that
such registration shall include the following minimum amounts: (a) at
least one-half of the Warrant Shares and (b) at least one-half of the
Agent Shares. To effect such demand right Agent shall notify the
Company in writing, and thereafter the Company shall cause to be filed
a registration statement pursuant to the provisions of paragraph III.
Upon receipt of such written request for registration from Agent, the
Company shall be entitled, but not required, to include in such
registration statement the registration of shares for sale for the
Company's account and/or selling shareholders' accounts.
II. If, at any time, the Company proposes to register any shares of the
Company's common stock or any class of common stock
<PAGE> 2
issued with respect therefor or in exchange therefor under the
Securities Act of 1933, as amended (the "Act") or similar federal
statute (other than on Form S-8 or any successor to be offered to
employees of an issuer pursuant to an employee benefit plan) except the
Laidlaw & Co. Underwritten Offering as described in the Company's Note
Purchase Agreements of even date herewith, the Company shall give at
least twenty days' prior written notice thereof to Agent and, upon the
written request of Agent (due within twenty days after Agent's receipt
of the aforesaid notice from the Company), include in such
registration, at the cost and expense of the Company, any Registerable
Securities; provided, however, that the Company shall not be obligated
to do so at Agent's request more than twice; and provided, further,
that if, in connection with any offering involving an underwriting of
Common Stock to be issued by the Company, the managing underwriter
shall impose a limitation on the number of shares of such Common Stock
which may be included in any such registration statement because, in
its reasonable judgment, such limitation is necessary to effect an
orderly public distribution, and such limitation is imposed pro rata
with respect to all securities whose holders have a contractual,
incidental ("piggy back") right to include such securities in the
registration statement and as to which inclusion has been requested
pursuant to such right and there is first excluded from such
registration statement all securities of the Company sought to be
included therein by any holder thereof not having any such contractual,
incidental registration rights, then the Company shall be obligated to
include in such registration statement only such limited portion of the
Registrable Shares with respect to which such holder has requested
inclusion hereunder. No incidental right under this Section II shall be
construed to limit any registration required under Section I. The
Company shall effect such registration referred to in this paragraph II
at its own cost and expense and shall maintain the effectiveness of
such registration so long as the expense of doing so is not unduly
burdensome and, in any event, for a period of six months subsequent to
the effective date of such registration. The Company and Agent shall
effect such registration described in paragraph II pursuant to the
provisions of paragraph III hereof.
III. In connection with any registration referred to in paragraphs I and II,
the Company shall comply with all applicable rules and regulations of
the Securities and Exchange Commission, or of any similar federal
commission, including the Rules and Regulations under the Act.
A. The Company agrees to furnish to Agent at its own expense, such
number of prospectuses conforming to the requirements of the Act or any
similar federal statute, and the rules and Regulations thereunder,
relating to the
-2-
<PAGE> 3
Registerable Securities subject thereto as may from time to time be
requested by Agent. Further, the Company shall, at its own expense in
connection with any registration under this Agreement:
(1) to register or qualify the securities covered by such
registration statement under the securities or blue sky laws of
such jurisdictions as Agent shall reasonably request, and do any
and all other acts and things which may be necessary or advisable
to enable Agent or any underwriter to offer such Registerable
Securities for them to consummate the disposition thereof in such
jurisdictions, during a period of nine months subsequent to the
effective date of such registration statement; provided, however,
that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not then so qualified;
(2) (A) notify Agent at any time when a prospectus relating
to Agent's Registerable Securities is required to be delivered
under the Act, of the happening of any event which the Company, in
its best judgment, believes would make a supplement to, or an
amendment of, such prospectus necessary or appropriate, and (B) at
the request of Agent prepare and furnish thereto a reasonable
number of copies of any supplement to, or any amendment of, such
prospectus that may be necessary so that, as thereafter delivered
to the purchasers of its shares of Common Stock, such prospectus
shall not include any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing.
B. In the event of the registration of any Registerable Securities,
the Company shall indemnify Agent and shall hold Agent harmless against
any losses, claims, damages or liabilities, joint or several, to which
Agent may become subject under the Act or any similar federal statute,
or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of, or are based upon, any
untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registerable
Securities are registered under the Act or similar federal statute, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of, or are based upon,
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse Agent for any legal or any
other expenses reasonably incurred by them in connection with
investigation
-3-
<PAGE> 4
or defending any such loss, claim, damage, liability or action;
provided, however, that to the extent that any such loss, claim, damage
or liability arises out of, or is based upon, an actual or alleged
untrue statement or omission made in such registration statement,
preliminary prospectus, final prospectus, amendment or supplement in
reliance upon, and in conformity with, written information furnished to
the Company through an instrument duly executed by Agent specifically
for use in the preparation thereof, the Company shall not be so liable
to Agent.
C. In the event of the registration of any Registerable Securities,
Agent shall indemnify (up to an aggregate of $100,000 payable in cash
or the common stock of the Company valued at the Current Market Value
(as defined in the Stock Purchase Agreement) on the date of any such
indemnity payment) the Company, each director of the Company, each
officer of the Company who signs such registration statement, and any
person who controls the Company within the meaning of the Act and shall
hold each of the same harmless against any losses, claims, damages or
liabilities, to which any of the same may become subject under the Act
or any similar federal statute, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of, or are based upon, any untrue statement or alleged untrue
statement of any material fact contained in any registration statement
under which such Registerable Securities are registered under the Act
or similar federal statute, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto,
or arise out of, or are based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such actual
or alleged untrue statement or omission was made in reliance upon, and
in conformity with, any written statement furnished to the Company
pursuant to this Section by Agent specifically for use in the
preparation of such registration statement, preliminary prospectus,
final prospectus or amendment or supplement, and Agent shall reimburse
any of the same for any legal or any other expenses reasonably incurred
by them in connection with investigation or defending any such loss,
claim, damage, liability or action.
D. It shall be a condition precedent to the obligation of the Company
to take any action pursuant to this Agreement relating to the
registration of any Registerable Securities, that the Company shall
have received from Agent and from each underwriter of such shares of
common stock, one or more written statements setting forth all
information with respect to Agent or such underwriter, Agent's shares
of Common Stock and the transaction or transactions which Agent
contemplates
-4-
<PAGE> 5
with respect thereto, which any law, rule or regulation requires to be
included in any registration statement with respect thereto.
IV. A. Agent agrees that it shall be responsible for, and shall pay to
the Company 50% of the costs and expenses (including, without
limitation printing costs and attorneys fees) in connection with
preparing the registration statement referred to in Paragraph I hereof
and related expenses covering such shares.
B. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by
any standard form of facsimile or overnight courier telecommunication.
Notices to Agent shall be directed to Agent at the address set forth on
the signature page of this Agreement; and notices to the Company shall
be directed to it at 5115 Campus Drive, Plymouth Meeting, PA
19462-1129, Attn: Thomas R. Thomsen, Chairman and Chief Executive
Officer.
C. This Agreement shall inure to the benefit of and be binding upon
the Company and Agent and their respective successors and assigns.
D. This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
E. This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey.
IN WITNESS WHEREOF, the Company and Agent have executed and delivered
this Agreement as of the date first above written.
LITHIUM TECHNOLOGY CORPORATION
By:____________________________________
Thomas R. Thomsen
Chairman and Chief Executive Officer
Agent
By:____________________________________
Name: ______________________________
Title:______________________________
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<PAGE> 1
EXHIBIT 99.1
[LITHIUM TECHNOLOGY CORPORATION LETTERHEAD]
NEWS RELEASE
FOR IMMEDIATE RELEASE
- - ---------------------
LITHIUM TECHNOLOGY CORPORATION
PLANS UPCOMING SECONDARY OFFERING
PLYMOUTH MEETING, PENNSYLVANIA, OCTOBER 14, 1996 -- Lithium Technology
Corporation (OTC Bulletin Board: LITH) today announced plans to conduct a
secondary public offering of $7 to $10 million worth of common stock to
continue its development program and manufacturing scale-up for lithium-polymer
rechargeable batteries. A focused leader in advanced battery technology,
Lithium's patented, low-cost manufacturing process is based on lightweight
fiber webs for battery construction and continuous flow thin film coating and
laminating methods. The Company is scheduled to file for registration shortly,
with the stock offering anticipated for the 4th Quarter 1996 or 1st Quarter
1997.
With the announcement, Lithium has signed a letter agreement with a New York
investment banking firm to underwrite the requisite number of shares of common
stock on a firm commitment basis. The underwriting is subject to the
satisfaction of a number of conditions, including the securing of a $2M private
financing prior to the secondary offering, and the production of working cells
from the Company's Demonstration Manufacturing Line. Under the terms of the
letter, the underwriter will receive warrants and commissions standard for the
size and nature of the proposed offering. The anticipated offering will be made
only by means of a prospectus which shall be part of a Registration Statement
filed with the Securities and Exchange Commission.
Proceeds from the upcoming sale will be used to further Lithium's accelerated
production schedule, including capital equipment to upgrade the Company's
Demonstration Manufacturing Line and working capital to complete the
development of the Company's long run time Lithium-polymer batteries for
notebook computers and wireless communications handsets. Lithium has a
technology development and commercialization alliance with a Japanese
Consortium consisting of Mitsubishi Materials Corporation and Mitsui & Co.,
Ltd.
Lithium Technology Corporation is developing a new generation of solid state
rechargeable batteries for portable electronics devices. The Company's patented
and proprietary technology uses high-performance fibers in composite battery
structures and web carrier for manufacturing.
CONTACT: Shareholder Relations
Lithium Technology Corporation
(610) 940-6090 Ext. 109
<PAGE> 1
EXHIBIT 99.2
[LITHIUM TECHNOLOGY CORPORATION LETTERHEAD]
NEWS RELEASE
FOR IMMEDIATE RELEASE
- - ---------------------
LITHIUM TECHNOLOGY CORPORATION
ANNOUNCES $1.75 MILLION PRIVATE FINANCING
PLYMOUTH MEETING, PENNSYLVANIA, OCTOBER 28, 1996 -- Lithium Technology
Corporation (OTC Bulletin Board: LITH) today announced that it has closed a
convertible note financing of $1.75 million from non-U.S. based investors. The
Company intends to repay the convertible notes with funds received in the
Company's proposed $7 to $10 million secondary public offering, announced on
October 14, 1996.
Lithium's president David J. Cade said "We are pleased that the investors have
demonstrated such confidence in the Company and its technology. This interim
financing will enable us to continue to accelerate the manufacturing scale-up
of our advanced lithium-polymer batteries".
Under the terms of the agreement, the lenders will receive shares of common
stock as compensation for the financing. The securities were issued outside
the Unitied States in accordance with Regulation S under the Securities Act of
1933.
Lithium Technology Corporation is developing a new generation of solid state
rechargeable batteries for portable electronic devices. The Company's patented
and proprietary technology uses high performance fibers in composite battery
structures and web carrier processes for manufacturing.
CONTACT: Shareholder Relations
Lithium Technology Corporation
(610) 940-6090 Ext. 109
