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EXHIBIT 10.39
NEITHER THIS WARRANT NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS, AND NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT,
OR, IF AN EXEMPTION FROM REGISTRATION SHALL BE AVAILABLE, THE HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE Corporation THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on July 1, 2002.
Warrant to Purchase 500,000 Shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
LITHIUM TECHNOLOGY CORPORATION
This is to certify that Interlink Management Corporation (the "Holder")
is entitled to purchase, subject to the provisions of this Warrant, from the
Corporation 500,000 fully paid, validly issued and nonassessable shares of
common stock, $.01 par value, of the Corporation ("Common Stock") at a price of
$.40 per share on or before July 1, 2002 (the "Expiration Date"). The number of
shares of Common Stock to be received upon the exercise of this Warrant and the
price to be paid for each share of Common Stock may be adjusted from time to
time as hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Shares" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter sometimes
referred to as the "Exercise Price".
1. VESTING; EXERCISE OF WARRANT.
(a) This Warrant shall vest and be exercisable immediately
upon the closing date of the sale of certain notes in the principal amount of
$3,250,000 to a maximum of $5,500,000 pursuant to the Senior Secured Convertible
Note Purchase Agreement of even date herewith (the "Note Purchase Agreement")
between Lithium Link LLC and the Corporation and is subject to the Consulting
Agreement as defined in, and attached to, the Note Purchase Agreement.
(b) This Warrant may be exercised by presentation and
surrender hereof to the Corporation at its principal office with the Purchase
Form annexed hereto duly executed and accompanied by payment of the Exercise
Price for the number of Warrant Shares
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specified in such form. As soon as practicable after each such exercise of the
Warrants, but no later than seven (7) days from the date of such exercise, the
Corporation shall issue and deliver to the Holder a certificate or certificates
for the Warrant Shares issuable upon such exercise, registered in the name of
the Holder. Upon receipt by the Corporation of this Warrant at its office, in
proper form for exercise, the Holder shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of the Corporation shall then be closed or that
certificates representing such shares of Common Stock shall not then be
physically delivered to the Holder.
(c) Compliance with the Securities Act.
(1) The Holder may exercise its Warrants if it is
an "accredited investor" or a "qualified institutional buyer", as defined in
Regulation D and Rule 144A under the Securities Act, respectively, provided each
of the following conditions is satisfied:
(a) The Holder establishes to the reasonable
satisfaction of the Corporation that it is an
"accredited investor" or "qualified institutional
buyer"; and
(b) The Holder represents that it is acquiring the
underlying common stock for its own account and that
it is not acquiring such underlying common stock with
a view to, or for offer or sale in connection with,
any distribution thereof (within the meaning of the
Securities Act) that would be in violation of the
securities laws of the United States or any state
thereof, but subject, nevertheless, to the
disposition of its property being at all times within
its control.
(2) In the event of a proposed exercise that does
not qualify under Section (c)(1) above, the Holder may exercise its Warrants
only if:
(a) the Holder gives written notice to the
Corporation of its intention to exercise, which
notice (i) shall describe the manner and
circumstances of the proposed transaction in
reasonable detail and (ii) shall designate the
counsel for the Holder, which counsel shall be
satisfactory to the Corporation;
(b) counsel for the Holder shall render an opinion,
in form and substance satisfactory to the
Corporation, to the effect that such proposed
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exercise may be effected without registration under
the Securities Act or under applicable Blue Sky
laws; and
(c) the Holder complies with Section (c)(1)(b)
above.
(3) All stock certificates issued pursuant to the
exercise of the Warrants shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER APPLICABLE STATE
SECURITIES LAWS. SUCH SHARES MAY BE OFFERED, SOLD OR
TRANSFERRED ONLY IN COMPLIANCE WITH THE REQUIREMENTS
OF SUCH ACT AND OF ANY APPLICABLE STATE SECURITIES
LAWS.
2. RESERVATION OF SHARES. The Corporation shall at all times reserve
for issuance and/or delivery upon exercise of this Warrant such number of shares
of its Common Stock as shall be required for issuance and delivery upon exercise
of the Warrants.
3. FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.
4. LOSS OF WARRANT. Upon receipt by the Corporation of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Corporation will execute and deliver a new Warrant of
like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Corporation,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Corporation, either at law or
equity, and the rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Corporation except to the extent set
forth herein.
6. ANTI-DILUTION PROVISIONS. The Exercise Price in effect at any time
and the number and kind of securities purchasable upon
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the exercise of the Warrants shall be subject to adjustment from time to time
upon the happening of certain events as follows:
(a) In case the Corporation shall (i) declare a dividend or
make a distribution on its outstanding shares of Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding shares of Common
Stock into a greater number of shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect at the time of the record date for such dividend or distribution
or of the effective date of such subdivision, combination or reclassification
shall be adjusted so that it shall equal the price determined by multiplying the
Exercise Price by a fraction, the denominator of which shall be the number of
shares of Common Stock outstanding after giving effect to such action, and the
numerator of which shall be the number of shares of Common Stock immediately
prior to such action. Such adjustment shall be made each time any event listed
above shall occur.
(b) If the Corporation shall, at any time after the date
hereof and through and including the earlier of (A) the conversion and/or
payment in full of the Term Notes (as defined in the Note Purchase Agreement) or
(B) the eighteen-month anniversary of the date hereof, issue rights, options or
warrants exercisable into Common Stock, the Exercise Price shall be subject to
adjustment as follows. If the price at which Common Stock is issuable pursuant
to such rights, options or warrants (the "Subscription Price") is less than the
current market price of the Common Stock (as defined in Subsection (d) below) on
the record date for such distribution, the Exercise Price in effect immediately
prior to such issuance shall be multiplied by a fraction, the numerator of which
shall be the sum of the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock which the
aggregate Subscription Price of the total number of shares of Common Stock
issuable upon exercise of such rights, options or warrants would purchase at the
then current market price of the Common Stock, and the denominator of which
shall be the number of shares of Common Stock outstanding on such record date
plus the number of shares of Common Stock issuable upon exercise of such rights,
options or warrants. If the Subscription Price is greater than or equal to the
current market price (as defined in Subsection (d) below) of the Common Stock on
the record date for such distribution, but less than the then effective Exercise
Price, the Exercise Price in effect immediately prior to such issuance shall be
multiplied by a fraction, the numerator of which shall be the sum of the number
of shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock which the aggregate Subscription Price of the
total number of shares of Common Stock issuable upon exercise of such rights or
options would purchase at the Exercise Price in effect immediately prior to such
issuance, and the denominator of which shall be the number of shares of Common
Stock outstanding on such record date
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plus the number of shares of Common Stock issuable upon exercise of such rights,
options or warrants. If the Subscription Price is greater than or equal to the
current market price of the Common Stock on the record date for such
distribution, and greater than or equal to the then effective Exercise Price,
then there shall be no adjustment under this Subsection. Such adjustment shall
be made each time such rights, warrants or options are issued and shall become
effective immediately after the record date for the determination of
Shareholders entitled to receive such rights, warrants or options; and to the
extent that any such rights, warrants or options expire or are redeemed without
the exercise or conversion thereof, the Exercise Price shall be readjusted to
the Exercise Price which would then be in effect had the adjustments been made
upon the basis of the issuance of only the number of shares of Common Stock
actually issued.
(c) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsections (a) or (b) above, the number of
Shares purchasable upon exercise of this Warrant shall simultaneously be
adjusted by multiplying the number of Shares initially issuable upon exercise of
this Warrant by the Exercise Price in effect on the date hereof and dividing the
product so obtained by the Exercise Price, as adjusted.
(d) For the purpose of any computation under Subsection (b)
above, the current market price per share of Common Stock at any date shall be
deemed to be the lower of (i) the average of the mean of the high and low bid
prices for 30 consecutive business days before such date or (ii) the mean of the
high and low bid price on the business day immediately preceding such date, as
reported by the Trading and Market Services Division of the Nasdaq Stock Market,
Inc. or, if the stock is then listed on the OTC Bulletin Board, by the National
Association of Securities Dealers, Inc., if the stock is listed on the Nasdaq
system is no longer reporting such information, or if not so available, the fair
market price as determined by the Board of Directors in good faith in the
exercise of their best business judgment taking into account all relevant
information known to them.
(e) All calculations under this Section 6 shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case may be.
Anything in this Section 6 to the contrary notwithstanding, the Corporation
shall be entitled, but shall not be required, to make such changes in the
Exercise Price in addition to those required by this Section 6, as it shall
determine, in its sole discretion, to be advisable in order that any dividend or
distribution in shares of Common Stock, or any subdivision, reclassification or
combination of Common Stock, hereafter made by the Corporation shall not result
in any Federal Income tax liability to the holders of the Common Stock or
securities convertible into Common Stock (including warrants).
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(f) Whenever the Exercise Price is adjusted, as herein
provided, the Corporation shall promptly cause a notice setting forth the
adjusted Exercise Price and adjusted number of Shares issuable upon exercise of
each Warrant to be mailed to the Holder, at its last address appearing in the
Warrant Register. The Corporation may retain a firm of independent certified
public accountants selected by the Board of Directors (who may be the regular
accountants employed by the Corporation) to make any computation required by
this Section 6, and a certificate signed by such firm shall be conclusive
evidence of the correctness of such adjustment.
7. OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be adjusted
as required by the provisions of the foregoing Section, the Corporation shall
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office, an officer's certificate showing the adjusted Exercise Price
determined as herein provided, setting forth in reasonable detail the facts
requiring such adjustment, including a statement of the number of additional
shares of Common Stock, if any, and such other facts as shall be necessary to
show the reason for and the manner of computing such adjustment. Each such
officer's certificate shall be made available at all reasonable times for
inspection by the Holder or any holder of a Warrant executed and delivered
pursuant to Section 1 and the Corporation shall, forthwith after each such
adjustment, mail a copy by certified mail of such certificate to the Holder or
any such holder.
8. NOTICES TO WARRANT HOLDER. So long as this Warrant shall be
outstanding, (i) if the Corporation shall pay any dividend or make any
distribution upon the Common Stock or (ii) if the Corporation shall offer to the
holders of Common Stock for subscription or purchase by them any share of any
class or any other rights or (iii) if any capital reorganization of the
Corporation, reclassification of the capital stock of the Corporation,
consolidation or merger of the Corporation with or into another corporation,
sale, lease or transfer of all or substantially all of the property and assets
of the Corporation to another corporation, or voluntary or involuntary
dissolution, liquidation or winding up of the Corporation shall be effected,
then in any such case, the Corporation shall cause to be mailed by certified
mail to the Holder, at least ten days prior to the date specified in (x) or (y)
below, as the case may be, a notice containing a brief description of the
proposed action and stating the date on which (x) a record is to be taken for
the purpose of such dividend, distribution or rights, or (y) such
reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or other securities shall
receive cash or other property deliverable upon such reclassification,
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reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
9. RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Corporation, or in case of any consolidation or merger of
the Corporation with or into another corporation (other than the merger with the
Holder or a merger with a subsidiary in which merger the Corporation is the
continuing corporation and which does not result in any reclassification,
capital reorganization or other change of outstanding shares of Common Stock of
the class issuable upon exercise of this Warrant) or in case of any sale, lease
or conveyance to another corporation of the property of the Corporation as an
entirety, the Corporation shall, as a condition precedent to such transaction,
cause effective provisions to be made so that the Holder shall have the right
thereafter by exercising this Warrant, at any time prior to the expiration of
the Warrant, to purchase the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, capital
reorganization or other change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock which said Xxxxxx would have
received if he had exercised this Warrant immediately prior to such transaction.
Any such provision shall include provision for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments of this Section 9 and
shall similarly apply to successive reclassification, capital reorganizations
and changes of shares of Common Stock and to successive consolidations, mergers,
sales or conveyances. In the event that in connection with any such capital
reorganization or reclassification, consolidation, merger, sale or conveyance,
additional shares of Common Stock shall be issued in exchange, conversion,
substitution or payment, in whole or in part, for a security of the Corporation
other than Common Stock, any such issue shall be treated as an issue of Common
Stock covered by the provisions of Subsection (a) of Section 6 hereof.
10. REGISTRATION RIGHTS.
(a) Demand Registration. At any time after the date of this
Warrant and prior to the third anniversary of this Warrant, the Holder(s) of 90%
of the Warrant Shares (adjusted in accordance with this Warrant by any
subsequent stock splits, stock dividends, combinations and the like) may demand
registration under the Securities Act of 1933, as amended (the "Securities Act")
of the Warrant Shares. The registration requested pursuant to this Section 10 is
referred to herein as the "Demand Registration".
(b) Number of Demand Registrations. The Holder(s) shall
be entitled to a total of one (1) Demand Registration.
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(c) Priority on Demand Registrations. If the Demand
Registration is an underwritten offering, and the managing underwriters advise
the Corporation in writing that in their opinion the number of shares of Warrant
Shares requested to be included exceeds the number of shares of Warrant Shares
which, under the current market conditions, can be sold in such offering at the
price expected to be obtained for such shares by the Holder in a commercially
reasonable sale, the Corporation will include in such registration prior to the
inclusion of any securities which are not shares of Warrant Shares the number of
shares of the Holder's Warrant Shares requested to be included which in the
opinion of such underwriters can be sold, and the balance of the shares of
Warrant Shares which the Holder requested to be included in such offering shall
be withheld from sale for a period of time requested by the underwriters, but
not to exceed twelve months from the effective date of this registration
statement.
(d) Restrictions on Demand Registration. The Corporation will
not be obligated to effect a Demand Registration within one hundred twenty (120)
days after the effective date of a registration statement in which Warrant
Shares of the Holder are included pursuant to the Holder's exercise of
"piggyback rights" pursuant to Section 10 hereof. The Corporation may postpone
for a period not exceeding ninety (90) days the filing or the effectiveness of a
registration statement for a Demand Registration if the Corporation provides the
Holder with written notice that in the Corporation's good faith judgment such
Demand Registration might have an adverse effect on any proposal or plan by the
Corporation to engage in any acquisition of assets (other than in the ordinary
course of business) or any merger, consolidation, tender offer, public offering
or similar transaction, provided that, in such event, the Holder will be
entitled to withdraw such Demand Registration request and that, if such request
is withdrawn, such Demand Registration will not be considered the one (1) Demand
Registration to which the Holder is entitled.
(e) Participation in Registered Offerings ("Piggyback
Rights"). If the Corporation at any time or times after the date of this
Agreement and prior to the third anniversary of this Agreement proposes or is
required to register any of its shares or other equity securities for public
sale for cash under the Securities Act (other than on Forms S-4 or S-8 or
similar registration forms), it will at each such time or times give written
notice to the Holder of its intention to do so. Upon the written request of the
Holder given within twenty (20) days after receipt of any such notice, the
Corporation shall use its best efforts to cause to be included in such
registration any Warrant Shares held by the Holder and requested to be
registered under the Securities Act and any applicable state securities laws;
provided, that if the managing underwriter advises that less than all of the
shares to be registered should be offered for sale so as not materially and
adversely to affect the price or salability of the
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offering being registered by the Corporation, the Holder (but not the
Corporation to the extent it desires to include shares for its own account)
shall reduce on a pro rata basis the number of its shares to be included in the
registration statement as required by the underwriter to the extent requisite to
permit the sale or other disposition (in accordance with the intended method of
disposition thereof as aforesaid) by the prospective seller or sellers of the
securities so registered. The registration requested pursuant to this Section
(e) is referred to herein as the "Piggyback Registration".
(f) Number of Piggyback Registrations. The Holder shall be
entitled to a total of one (1) Piggyback Registration.
(g) Obligations of the Holder. It shall be a condition
precedent to the obligation of the Corporation to register any Warrant Shares
pursuant to subsections (a) through (f) above that the Holder shall (i) furnish
to the Corporation such information regarding the Warrant Shares held and the
intended method of disposition thereof and other information concerning the
Holder as the Corporation shall reasonably request and as shall be required in
connection with the registration statement to be filed by the Corporation; (ii)
agree to abide by such additional or customary terms affecting the proposed
offering as are applicable to shareholders in any such registration as
reasonably may be requested by the managing underwriter of such offering,
including a requirement, if applicable, to withhold from the public market for a
period of up to twelve months after any such offering, any shares excluded from
the offering at the instance of the underwriter as permitted under subsections
(a) through (f) above, and (iii) agree in writing in form satisfactory to the
Corporation to pay all underwriting discounts and commissions applicable to the
securities being sold by the Holders. If after a Demand Registration or
Piggyback Registration becomes effective the Corporation advises the Holder that
the Corporation considers it appropriate to amend or supplement the applicable
registration statement, the Holder shall suspend further sales of the Warrant
Shares until the Corporation advises the Holder that such registration statement
has been amended or supplemented.
(h) Registration Proceedings. If and whenever the Corporation
is required by the provisions of subsections (a) through (f) above to effect the
registration of Warrant Shares under the Securities Act, until the securities
covered by such registration statement have been sold or for nine (9) months
after effectiveness, whichever is the shorter period of time, the Corporation
shall:
(i) Prepare and file with the SEC a registration
statement with respect to such securities
and use its best efforts to cause such
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registration statement to become and remain
effective;
(ii) Prepare and file with the SEC such
amendments to such registration statement
and supplements to the prospectus contained
therein as may be necessary to keep such
registration statement effective;
(iii) Furnish to the Holder and to the
underwriters of the securities being
registered such reasonable number of copies
of the registration statement, preliminary
prospectus, final prospectus and such other
documents as such underwriters may
reasonably request in order to facilitate
the public offering of such securities;
(iv) Use its best efforts to register or qualify
the securities covered by such registration
statement under such state securities or
Blue Sky Laws of such jurisdictions as the
Holder may reasonably request within twenty
(20) days following the original filing of
such registration statement, except that the
Corporation shall not for any purpose be
required to execute a general consent to
service of process or to qualify to do
business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
(v) Notify the Holder, promptly after it shall
receive notice thereof, of the time when
such registration statement has become
effective or a supplement to any prospectus
forming a part of such registration
statement has been filed;
(vi) Notify the Holder promptly of any request by
the SEC for the amending or supplementing of
such registration statement or prospectus or
for additional information; and
(vii) Prepare and promptly file with the SEC and
promptly notify the Holder of the filing of
such amendment or supplement to such
registration statement or prospectus as may
be necessary to correct any statements or
omissions if, at the time when a prospectus
relating to such securities is required to
be delivered under the Securities Act, any
event shall have occurred as the result of
which any such prospectus or any other
prospectus as
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then in effect would include an untrue
statement of a material fact or omit to
state any material fact necessary to make
the statements therein, in light of the
circumstances in which they were made, not
misleading. Notwithstanding any provision
herein to the contrary, the Corporation
shall not be required to amend, supplement,
or update a prospectus contained in a Demand
Registration or Piggyback Registration if to
do so would result in an unduly burdensome
expense to the Corporation.
(i) Expenses. With respect to each inclusion of Warrant Shares
in a registration statement pursuant to subsections (a) through (f) above, all
registration expenses, fees, costs and expenses of and incidental to such
registration, inclusion and public offering in connection therewith shall be
borne by the Corporation; provided, however, that the Holder participating in
the registration shall bear its own professional fees and its pro rata share of
the underwriting discount and commissions. The fees, costs and expenses of
registration to be borne by the Corporation shall include, without limitation,
all registration, filing and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Corporation, fees and
disbursements of counsel for the underwriter or underwriters of such securities
(if the Corporation and/or selling security holders are required to bear such
fees and disbursements), and all legal fees and disbursements and other expenses
of complying with state securities or Blue Sky Laws of any jurisdiction in which
the securities to be offered are to be registered or qualified.
(j) Indemnification of the Holder. Subject to the conditions
set forth below, in connection with any registration of Warrant Shares pursuant
to subsections (a) through (f) hereof, the Corporation agrees to indemnify and
hold harmless the Holder selling securities pursuant to said subsections, any
underwriter for the Corporation or acting on behalf of the Holder selling
securities and each person, if any, who controls the Holder, within the meaning
of Section 15 of the Securities Act, as follows:
(i) Against any and all loss, claim, damage and
expense whatsoever arising out of or based
upon (including, but not limited to, any and
all expense whatsoever reasonably incurred
in investigating, preparing or defending any
litigation, commenced or threatened, or any
claim whatsoever based upon) any untrue or
alleged untrue statement of a material fact
contained in any preliminary prospectus (if
used prior to the effective date of the
registration statement), the registration
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statement or the prospectus (as from time to
time amended and supplemented), or in any
application or other document executed by
the Corporation or based upon written
information furnished by the Corporation
filed in any jurisdiction in order to
qualify the Corporation's securities under
the securities laws thereof, or the omission
or alleged omission therefrom of a material
fact required to be stated therein or
necessary to make the statements therein not
misleading, or any other violation of
applicable federal or state statutory or
regulatory requirements or limitations
relating to action or inaction by the
Corporation in the course of preparing,
filing, or implementing such registered
offering; provided, however, that the
indemnity agreement contained in this
subsection (j)(i) shall not apply to any
loss, claim, damage, liability or action
arising out of or based upon any untrue or
alleged untrue statement or omission made in
reliance upon and in conformity with any
information furnished in writing to the
Corporation by or on behalf of the Holder
expressly for use in connection therewith or
arising out of any omission of a material
fact required to be stated therein or
necessary to make the statements therein not
misleading;
(ii) Subject to the proviso contained in
subsection (j)(i) above, against any and all
loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate
amount paid in settlement of any litigation,
commenced or threatened, or of any claim
whatsoever based upon any untrue statement
or omission (including, but not limited to,
any and all expense whatsoever reasonably
incurred in investigating, preparing or
defending against any such litigation or
claim) if such settlement is effected with
the written consent of the Corporation; and
(iii) In no case shall the Corporation be liable
under this indemnity agreement with respect
to any claim made against such seller,
underwriter or any such controlling person
unless the Corporation shall be notified, by
letter or by telegram confirmed by letter,
of any action commenced against such
persons, promptly after such person shall
have been
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served with the summons or other legal
process giving information as to the nature
and basis of the claim. The failure to so
notify the Corporation, if prejudicial in
any material respect to the Corporation's
ability to defend such claim, shall relieve
the Corporation from its liability to the
indemnified person under this subsection
(j), but only to the extent that the
Corporation was prejudiced. The failure to
so notify the Corporation shall not relieve
the Corporation from any liability which it
may have otherwise than on account of this
indemnity agreement. The Corporation shall
be entitled to participate at its own
expense in the defense of any suit brought
to enforce any such claim, but if the
Corporation elects to assume the defense,
such defense shall be conducted by counsel
chosen by it, provided such counsel is
reasonably satisfactory to the sellers or
controlling persons, defendants in any suit
so brought. In the event the Corporation
elects to assume the defense of any such
suit and retain such counsel, the sellers,
underwriter or controlling persons,
defendants in the suit, shall, after the
date they are notified of such election,
bear the fees and expenses of any counsel
thereafter retained by them, as well as any
other expenses thereafter incurred by them
in connection with the defense thereof;
provided, however, that if the sellers,
underwriter or controlling persons
reasonably believe that there may be
available to them any defense or
counterclaim different than those available
to the Corporation or that representation of
such sellers, underwriters or controlling
persons by counsel for the Corporation
presents a conflict of interest for such
counsel, then such sellers, underwriter and
controlling person shall be entitled to
defend such suit with counsel of their own
choosing and the Corporation shall bear the
fees, expenses and other costs of such
separate counsel.
(k) Indemnification of the Corporation. The Holder selling
securities in any registered offering pursuant to subsections (a) through (f)
above hereof agrees to indemnify and hold harmless the Corporation, each
underwriter for the offering, and each of their officers and directors and
agents and each other person, if any, who controls the Corporation and
underwriter within the meaning of Section 15 of the Securities Act against any
and all
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such losses, liabilities, claims, damages and expenses as are indemnified
against by the Corporation under subsection (j) above; provided, however, that
such indemnification by the Holder hereunder shall be limited to any losses,
liabilities, claims, damages, or expenses to the extent caused by any untrue
statement of a material fact or omission of a material fact (required to be
stated therein or necessary to make statements therein not misleading), if any
made (or in settlement of any litigation effected with the written consent of
such sellers, alleged to have been made) in any preliminary prospectus, the
registration statement or prospectus or any amendment or supplement thereof or
in any application or other document in reliance upon, and in conformity with,
written information furnished in respect of such seller by or on behalf of such
seller expressly for use in any preliminary prospectus, the registration
statement or prospectus or any amendment or supplement thereof or in any such
application or other document or arising out of any action or inaction of such
seller in implementing such registered offering. In case any action shall be
brought against the Corporation, or any other person so indemnified, in respect
of which indemnity may be sought against any seller, such seller shall have the
rights and duties given to the Corporation, and each other person so indemnified
shall have the rights and duties given to the Holder, by the provisions of
subsection (j)(iii). The person indemnified agrees to notify the sellers
promptly after the assertion of any claim against the person indemnified in
connection with the sale of securities.
(l) If the indemnification provided for in subsections (j) and
(k) above are unavailable or insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnified
party, on one hand, and such indemnifying party, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, or liabilities (or actions in respect thereof). The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnified party, on one hand, or such indemnifying party, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. No person who has
committed fraudulent misrepresentation (within the meaning of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof referred to above in this subsection (1) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in
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connection with investigating or defending any such action or claim.
(m) Participation by Other Shareholders. The Corporation may
agree with its shareholders, other than the Holder, or others to allow their
participation in any registered offering, which may be requested pursuant to
subsections (a) through (f) above.
11. ASSIGNMENT OF WARRANT. This Warrant may not be assigned by the
Holder without the expressed written consent of the Corporation. In the event a
transfer is requested not pursuant to an effective registration statement under
the Securities Act, the transferring Holder will, if reasonably requested by the
Corporation, deliver to the Corporation an opinion of counsel, satisfactory in
form and substance to the Corporation, that such transfer is being made in
accordance with an exemption from registration under the Securities Act; and
provided further that any request for transfer be accompanied by a written
instrument of transfer in form reasonably acceptable to the Corporation.
Dated: September 22, 1997
LITHIUM TECHNOLOGY CORPORATION
By:__________________________
Name:________________________
Title:_______________________
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[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,
shares of 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 Lithium Link Management Corporation.
SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER:
INTERLINK MANAGEMENT CORPORATION
By:
(Please print name and address)
(Signature)
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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
the Holder and delivered to:
(Please print address)
(Signature)
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 Pennsylvania, or by a firm having
membership on a regional securities exchange and an
office in Pennsylvania.
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