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EXHIBIT 10.37
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.
TERM NOTE A
FOR VALUE RECEIVED, the undersigned (the "Company") promises to pay to
Lithium Link LLC (the "Lender") One Million Three Hundred Seventy Thousand and
00/100 Dollars ($1,370,000.00), together with interest, as follows:
1. SENIOR SECURED CONVERTIBLE NOTE PURCHASE AGREEMENT: This Note
evidences a loan in the amount of $1,370,000.00 (the "Loan") arising out of and
governed by the terms of a Senior Secured Convertible Note Purchase Agreement
dated September 22, 1997 by and between the Company and the Lender (the "Note
Agreement"). The Lender or any holder hereof is entitled to the benefits of the
Note Purchase Agreement and the Related Documents and to enforce the agreements
of the Company contained therein, and any holder may exercise the respective
remedies provided thereby or otherwise available in respect thereof, all in
accordance with the respective terms thereof. 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 in accordance with the terms of the Note Agreement. Interest on this Note
shall accrue and shall be due and payable in accordance with the Note Agreement.
3. TERM: The Loan shall be due and payable on July 1, 2002, subject to
the terms and conditions set forth in the Note Agreement.
4. PREPAYMENTS: (a) This Note and any and all interest thereon may be
prepaid, in whole or in part, by the Company at any time, and from time to time,
and without penalty, provided that no prepayment may be made by the Company
until (a) the Company itself
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shall have received all of the Investment Amount (net of any funding, if any,
failed to be made by the Lender in breach of the Note Agreement) and (b) the
Lender or any Holder hereof shall have received a written notice of the
prepayment not less than thirty (30) days prior to such prepayment.
(b) In the event the Company issues a notice of prepayment to the
Lender and the Lender desires to convert all or a portion of this Note noticed
for prepayment but, by the end of the 30-day notice period, the Lender is unable
to tender this Note due to their loss and so notifies the Company in writing,
then the notice period in such case shall be deemed extended for an additional
fifteen (15) days and at the end of such fifteen (15) days, the Lender shall
either (i) deliver this Note (if located) to the Company for the desired
conversion, (ii) deliver an indemnity satisfactory to the Company in lieu of the
lost Note and other documentation reasonably required by the Company, or (iii)
in the absence of (i) and (ii) forfeit the right of conversion and accept the
noticed prepayment. This Section 4(b) shall be applicable to any transferee of
this Note.
5. DEFAULT: The Company 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 ten (10) Business Days after receipt of
written notice thereof from the Lender; (ii) any of the events specified in
Section 5(b) hereof and the failure to cure such default within twenty (20)
Business Days after receipt of written notice thereof from the Lender; 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 principal payment required under this
Note on the Termination Date or to make any other payment due under the Note
Agreement on the due date of any such other payment;
(b) Any material default, breach or misrepresentation shall
occur under the terms and provisions of the Note Agreement; or
(c) If the Company or any of its subsidiaries shall fail to
pay when due, or within any applicable grace period, obligations for borrowed
money in the aggregate amount of not less than $100,000
(d) 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 Company, or commenced against the Company which
is not discharged within sixty (60) Business Days.
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6. Remedies Upon Event of Default. Upon the occurrence of an
Event of Default:
(a) specified in clause (d) of Section 5, then the entire amount of the
Obligations shall be automatically accelerated and immediately due and payable;
(b) specified in clauses (a) or, (b) or (c) of Section 5, then the
Lender may (1) immediately terminate the Lender's obligation to make or fund any
Term Loan (or any portion thereof) and the same shall immediately terminate; and
(ii) declare the entire amount of the Obligations immediately accelerated, due
and payable; and
(c) the Lender shall have all of the rights and remedies provided to
the Lender by the Related Documents, at law and in equity, by statute or
otherwise, and no remedy herein conferred upon the Lender is intended to be
exclusive of any other remedy and each remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law, in, equity, by statute or otherwise.
7. CHANGES; PARTIES: This Note can only be changed by an agreement in
writing signed by the Company and the Lender. This Note shall inure to the
benefit of and be binding upon the Company and the Lender and their respective
successors and assigns, provided that this Note and the obligations hereunder
shall be non-negotiable and non-transferable.
8. SECURITY: This Note is secured by a first priority security interest
in all of the Collateral pursuant to the Security Agreement.
9. Except as set forth in the Note Agreement or in this Note, the
Company and every endorser or guarantor of this Note or the obligation
represented hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, assent to any extension or postponement of
time of payment or any other indulgence, to any substitution, exchange or
release of Collateral and to the addition or release of any other party
primarily or secondarily liable.
10. GOVERNING LAW: This Note shall be construed according to the laws
of the State of New Jersey and the Company 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
Company and Lender consent to and confer personal jurisdiction on the federal
and state courts of New Jersey, and expressly waive any objections as to venue
in any of such courts, and agree that service of process
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may be made by mailing a copy of the summons to its respective address.
IN WITNESS WHEREOF, the Company has executed this Note as of the day
and year set forth below.
LITHIUM TECHNOLOGY CORPORATION
By:
Name:
Title:
September 22, 1997
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