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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
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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
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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
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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
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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 Xxxxxxx & 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:
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(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.
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(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
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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,
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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.
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(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-Xxxxxx provision of the Omnibus Trade and Competitiveness
Act of 1988 ("Exon-Xxxxxx").
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.
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(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
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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,
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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
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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
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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
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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
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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,
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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 0000 Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, XX 00000-0000, Attn: Xxxxxx X. Xxxxxxx,
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.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
LITHIUM TECHNOLOGY CORPORATION
By:_________________________________
Xxxxxx X. Xxxxxxx, Chairman
and Chief Executive Officer
PURCHASER:
By:_________________________________
Name:____________________________
Title:___________________________
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