Lithium Technology Corporation and Exide Technologies Sign Agreement to Develop and Market New Lithium Ion Battery System

PLYMOUTH MEETING, Pa., Dec. 19 /PRNewswire-FirstCall/ -- Lithium Technology Corporation ('LTC') (OTC Bulletin Board: LTHU), a leading manufacturer in the rapidly emerging large format rechargeable Lithium battery market, announced today that it has signed a development and marketing agreement with Exide Technologies (Nasdaq: XIDE) for innovative lithium ion battery systems. Exide is one of the world's largest producers and recyclers of lead-acid batteries and a global leader in stored electrical-energy solutions.

It is anticipated that the first lithium-ion system to be developed by the parties will be utilized in network power back-up applications. The system will be part of a new modular architecture that Exide has developed, and will be built on the cell technology and chemistry that LTC has developed. This system will be used in rack mounted and/or central office applications. It is expected that testing of the new system will commence at the beginning of 2006, with marketing efforts to follow by the summer of 2006.

With this collaboration, Exide and LTC are addressing the growing world need for more cost-effective, efficient and reliable back-up power solutions.

'The approach that Exide has developed takes advantage of LTC's cell technology. Exide's presence and experience in the network power market creates an excellent opportunity for LTC to reach customers who will benefit from advanced lithium ion battery systems,' said Dr. Andrew J. Manning, President and Chief Operating Officer of LTC.

About Lithium Technology Corporation

Lithium Technology Corporation is a manufacturer of large format rechargeable Lithium Ion batteries, custom engineered for military, automotive and industrial applications. LTC customers include top tier contractors to the military and suppliers to industrial concerns requiring safe, durable, high power rechargeable power supplies for their applications and the development of new technology.

During the past twelve months, LTC and LTC's GAIA Akkumulatorenwerke GmbH subsidiary operating in Nordhausen, Germany, have contracted with ThyssenKrupp (the largest builder of non-nuclear submarines) to provide power supplies for underwater propulsion of manned submarines. Other applications include a prototype of lighter-than-air communication 'stratellites'; unmanned surveillance vehicles (air, land, and underwater based); surface to air missiles; standby power applications; renewable energy generation sources (windmills); and hybrid electric vehicles ('HEV') for military uses.

LTC is leveraging its expertise in high power and large battery assemblies to commercialize advanced lithium batteries as a new power source in the military and national security systems, transportation and stationary power markets with a particular focus on the U.S. and European geographic market segments where the customers prefer a domestic supplier.

LTC manufactures the GAIA(R) product line of large, high power hermetically sealed rechargeable lithium ion cells and batteries. The Company's product portfolio includes large cells and batteries from 10 times the capacity of a standard laptop computer battery to 100,000 times greater. LTC produces high power cells designed for HEVs and military applications that can discharge hundreds of amps in times as short as a few minutes, and high capacity cells for applications such as back-up power and remote standby installations. Cells are manufactured in both cylindrical and flat form and employ proprietary extrusion, design and assembly technology. LTC manufactures a variety of standard cells that are assembled into custom large batteries complete with electronics (battery management systems) and electronics to communicate with other components of the system for performance monitoring.

Lithium Technology has two principal centers of operation - in Plymouth Meeting, Pennsylvania and in Nordhausen, Germany. The Plymouth Meeting office is also the corporate headquarters for the Company. Sales into the U.S. and European markets are managed out of each of the offices.

For additional information on the Company's technology and products, please visit http://www.lithiumtech.com or http://www.gaia-akku.com .

The foregoing information contains forward-looking statements, which involve risks and uncertainties relating to such matters as financial performance, technology development, capital raising, business prospects, strategic partnering and similar matters. A variety of factors could cause LTC's actual results and experience to differ materially from anticipated results or other expectations expressed in these forward-looking statements. This notice does not constitute an offer of any securities for sale.

About Exide Technologies

Exide Technologies, with operations in 89 countries, is one of the world's largest producers and recyclers of lead-acid batteries. The Company's four global business groups - Transportation Americas, Transportation Europe and Rest of World, Industrial Energy Americas and Industrial Energy Europe and Rest of World - provide a comprehensive range of stored electrical energy products and services for industrial and transportation applications.

Transportation markets include original-equipment and aftermarket automotive, heavy-duty truck, agricultural and marine applications, and new technologies for hybrid vehicles and 42-volt automotive applications. Industrial markets include network power applications such as telecommunications systems, electric utilities, railroads, photovoltaic (solar-power related) and uninterruptible power supply (UPS), and motive-power applications including lift trucks, mining and other commercial vehicles.

Further information about Exide, including its financial results, are available at http://www.exide.com.

Forward-Looking Statements

Except for historical information, this press release may be deemed to contain 'forward-looking' statements. The Company desires to avail itself of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the 'Act') and is including this cautionary statement for the express purpose of availing itself of the protection afforded by the Act.

Examples of forward-looking statements include, but are not limited to (a) projections of revenues, cost of raw materials, income or loss, earnings or loss per share, capital expenditures, growth prospects, dividends, the effect of currency translations, capital structure and other financial items, (b) statements of plans of and objectives of the Company or its management or Board of Directors, including the introduction of new products, or estimates or predictions of actions by customers, suppliers, competitors or regulating authorities, (c) statements of future economic performance, (d) statements of assumptions, such as the prevailing weather conditions in the Company's market areas, underlying other statements and statements about the Company or its business and (e) statements regarding the ability to comply with or alternatively obtain amendments under the Company's debt agreements.

Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following general factors such as: (i) adverse reactions by creditors, vendors, customers, and others to the going-concern modification in the Company's audit report for the fiscal year ended March 31, 2005, (ii) the Company's ability to implement and fund based on current liquidity business strategies and restructuring plans, (iii) unseasonable weather (warm winters and cool summers) which adversely affects demand for automotive and some industrial batteries, (iv) the Company's substantial debt and debt service requirements which may restrict the Company's operational and financial flexibility, as well as imposing significant interest and financing costs (v) the Company's ability to comply with the covenants in its debt agreements or obtain waivers of noncompliance, (vi) the litigation proceedings to which the Company is subject, the results of which could have a material adverse effect on the Company and its business, (vii) the realization of the tax benefits of the Company's net operating loss carry forwards, of which is dependent upon future taxable income, (viii) the fact that lead, a major constituent in most of the Company's products, experiences significant fluctuations in market price and is a hazardous material that may give rise to costly environmental and safety claims, (ix) competitiveness of the battery markets in North America and Europe, (x) the substantial management time and financial and other resources needed for the Company's consolidation and rationalization of acquired entities, (xi) risks involved in foreign operations such as disruption of markets, changes in import and export laws, currency restrictions, currency exchange rate fluctuations and possible terrorist attacks against U.S. interests, (xii) the Company's exposure to fluctuations in interest rates on its variable debt, (xiii) the Company's ability to maintain and generate liquidity to meet its operating needs, (xiv) general economic conditions, (xv) the ability to acquire goods and services and/or fulfill labor needs at budgeted costs, (xvi) the Company's reliance on a single supplier for its polyethylene battery separators, and (xvii) the Company's ability to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002.

Therefore, the Company cautions each reader of this press release carefully to consider those factors set forth above and those factors described in Amendment No. 1 to the Company's Registration Statement on Form S-3 filed with the SEC on September 14, 2005, because such factors have, in some instances, affected and in the future could affect, the ability of the Company to achieve its projected results and may cause actual results to differ materially from those expressed herein.

SOURCE Lithium Technology Corporation

Lithium Technology Corporation
Lillian Sharik, 610-940-6090
Fax: 610-940-6091
lsharik@lithiumtech.com