EXHIBIT 10.42
OPTION AGREEMENT
AGREEMENT dated as of October 4, 2002 by and between Arch Hill
Ventures, N.V., a Netherlands corporation (the "Shareholder"), GAIA Holding
B.V., a Netherlands corporation ("GAIA Holding") and Lithium Technology
Corporation, a Delaware corporation ("LTC"); and
WHEREAS, LTC has entered into a Share Exchange Agreement with the
Shareholder as of June 7, 2002 (the "Share Exchange Agreement");
WHEREAS, all terms used herein and not defined shall have the meaning set
forth in the Share Exchange Agreement);
WHEREAS, pursuant to the Share Exchange Agreement, LTC will acquire 60% of
the outstanding shares of GAIA Holding from the Shareholder and a 60% beneficial
ownership interest in GAIA; and
WHEREAS, the Shareholder is willing to grant an option to LTC to the
extent provided for herein;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
ARTICLE I
OPTION
1.1 LTC Option. During the term of this Agreement and upon the closing
of any GAIA Financing, LTC shall have the option to purchase from the
Shareholder up to the number of shares of GAIA Holding Common Stock owned by the
Shareholder that with the number of GAIA Holding Shares owned by LTC as of the
date of this Agreement (the "LTC GAIA Holding Shares") will constitute 60% of
the GAIA Holding's issued and outstanding shares and will result in LTC holding
a 60% beneficial ownership interest in GAIA (the "Option Shares") in accordance
with the following provisions:
(a) LTC shall notify the Shareholder in writing that it desires to
purchase the Option Shares.
(b) Within 30 days following the receipt of such notice, the
Shareholder shall transfer to LTC the Option Shares and LTC shall deliver to the
Shareholder the LTC Shares.
(c) The "LTC Shares" will be shares of LTC Common Stock issued at
the exchange rate of the shares exchanged by LTC and the Shareholder under the
Share Exchange Agreement.
1.2 GAIA Shares. In the event that notwithstanding the acquisition by
LTC of Option Shares, the LTC GAIA Holding Shares and the Option Shares together
constitute less than a 60% beneficial ownership interest in GAIA after any GAIA
Financing, LTC shall have the right to purchase in the GAIA Financing such
number of shares of GAIA ("GAIA Shares") so that with the LTC GAIA Holding
Shares, the Option Shares and the GAIA Shares would result in LTC holding a 60%
beneficial interest in GAIA. GAIA Holding agrees to take all action to
effectuate the foregoing. In the event that the GAIA Shares are issued to LTC
under this Section 1.2, the same procedure and exchange rate set forth in
Section 1.1 of this Agreement shall govern.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 General. Each party hereby represents and warrants to the other as
follows:
(a) Each party has all requisite power and authority to enter into
this Agreement.
(b) This Agreement constitutes the legal, valid and binding
obligation of the party, enforceable against such party in accordance with
its terms.
(c) There is no claim, action, suit, investigation, arbitration
or, proceeding, and no order, decree or judgment, in progress, pending or
threatened, which relates to or may adversely affect any of the
transactions or activities contemplated by this Agreement, and the party
has no reason to be aware of any basis for the same.
(d) This Agreement does not conflict with or violate any other
agreement of a party or to its knowledge, any law to which it is subject.
ARTICLE III
TERM AND TERMINATION
3.1 Term. This Agreement shall come into effect as of the date hereof
and shall remain in full force and effect until the earlier of (a) the consent
of the Shareholder and LTC; (b) the termination of the Strategic Alliance
Agreement; or (c) the liquidation or dissolution of GAIA Holding.
ARTICLE IV
DISPUTE RESOLUTION
4.1 Arbitration. In the event of any dispute between the Shareholder
relating to this Agreement, including its scope or validity, they shall first
try to resolve the matter through good faith negotiation and, if a resolution
cannot be achieved in that manner, then it shall be submitted
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to binding arbitration in Geneva, Switzerland (or such other place as the
Shareholder may agree to) under the applicable rules of the American Arbitration
Association. The arbitration shall be by a single arbitrator selected in
accordance with the procedures of the American Arbitration Association but who
shall be technically grounded and whose experience and training shall enable him
or her to readily comprehend the technical aspects of the issues to be decided.
At the request of the Shareholder, the arbitrator may permit discovery of
documents and things as provided in the Federal Rules of Civil Procedure of the
United States. The costs of the arbitration shall be shared by the Shareholder
and LTC but the arbitrator shall award costs, including the amount paid to the
arbitrator but excluding attorney's fees, to the prevailing Shareholder.
4.2 Arbitrator's Award. The arbitrator's award may be enforced in any
court of competent jurisdiction, and each party hereby submits itself to the
jurisdiction of the federal or state court within the State of New York for that
purpose.
ARTICLE V
MISCELLANEOUS
5.1 Amendment. This Agreement may be amended only by written agreement
of the Shareholder and LTC. Each party acknowledges that it shall have no right
to rely upon any amendment, promise, modification, statement or representation
made or occurring subsequent to the execution of this Agreement unless the same
is in writing and executed by all parties.
5.2 Severability. In the event that any one or more of the provisions of
this Agreement shall for any reason be held to be void, invalid, illegal or
unenforceable in any respect, such holding shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such void,
invalid, illegal or unenforceable provision had never been contained herein.
5.3 Headings. The headings of the Articles and sections of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
5.4 Counterparts. This Agreement may be executed by the parties and LTC
in separate counterparts (by original or facsimile signature) each of which when
so executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
5.5 Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand, telecopied (with receipt confirmed), by
overnight courier service or mailed, by certified or registered mail to the
party at its address set forth in the Share Exchange Agreement, or to such other
address as the addressee shall have furnished to other party in the manner
prescribed by this Section 5.5.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
effective as of the day and year first above written.
ARCH HILL VENTURES N.V.
By: /s/ X.X. xxx Xxxxx
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X.X. xxx Xxxxx
Executive Officer
GAIA HOLDING B.V.
By: /s/ X.X. xxx Xxxxx
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Name: X.X. xxx Xxxxx
Title: Executive Officer
LITHIUM TECHNOLOGY CORPORATION
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Chairman and Chief Executive Officer
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