<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No 1 To
SCHEDULE 13D
Under the Securities Exchange Act of 1934
LITHIUM TECHNOLOGY CORPORATION (formerly Hope Technologies, Inc.)
(Name of Issuer)
COMMON STOCK, par value $.01 (formerly Class
B Common Stock, par value $.00005882)
(Title of Class of Securities)
536808306 (formerly 439498106)
(CUSIP Number)
DONALD C. TAYLOR
475 PARK AVENUE SOUTH
SUITE 3300
NEW YORK, NEW YORK 10016
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
May 30, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
/ /.
Check the following box if a fee is being paid with this Statement. / /
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class. (See Rule 13d-7)
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes.)
<PAGE> 2
CUSIP Number: 536808306
1) Name of Reporting Persons and S.S. or I.R.S. Identification
Nos. of Above Persons:
Name: Donald C. Taylor
Social Security Number: ###-##-####
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) / /
(b) / /
3) SEC Use Only
4) Source of Funds (See Instructions): OO
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
6) Citizenship or Place of Organization: U.S. Citizen
Number of (7) Sole Voting Power: 50,000
Shares Bene-
ficially (8) Shared Voting Power: 1,350,000*
Owned by
Each (9) Sole Dispositive Power: 50,000
Reporting
Person With (10) Shared Dispositive Power: 1,350,000*
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,400,000*
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions) / /
13) Percent of Class Represented by Amount in Row (11): 8.8%
14) Type of Reporting Person (See Instructions): IN
* Includes 320,000 shares of Common Stock issuable upon exercise of a Common
Stock Purchase Warrant (the "Warrant") owned by Group III Capital, Inc. to
purchase 1,500,000 shares of Common Stock. The Warrant will vest with respect to
320,000 shares of Common Stock immediately and with respect to the remaining
1,180,000 shares of Common Stock on May 1, 1997, or at such earlier time as
prescribed by the Warrant. Also includes 1,030,000 shares of Common Stock owned
by Group III Capital Ventures, Inc.
Page 2 of 6
<PAGE> 3
ITEM 1. SECURITY AND ISSUER
This Statement relates to the common stock ("Common Stock") of Lithium
Technology Corporation (the "Issuer").
Lithium Technology Corporation
5115 Campus Drive
Plymouth Meeting, PA 19462
ITEM 2. IDENTITY AND BACKGROUND
(a) Name: Donald C. Taylor
(b) 475 Park Avenue South, Suite 3300
New York, New York 10016
(c) Donald C. Taylor is President and sits on the Board of
Directors of Group III Capital Ventures, Inc. and Group III
Capital, Inc.
(d) No
(e) No
(f) U.S. Citizen
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The shares of Common Stock were obtained through the acquisition by
Group III Capital, Inc. of a Common Stock Purchase Warrant to Purchase 1,500,000
shares of the Issuer's Common Stock.
ITEM 4. PURPOSE OF TRANSACTION
Group III Capital, Inc.'s acquisition of the aforementioned securities
of the Issuer is for the purpose of investment.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The table below sets forth the aggregate number of shares and
percentage of Common Stock beneficially owned by Mr. Taylor. The information
herein pertaining to the Issuer's issued and outstanding Common Stock is as of
June 3, 1996, at which time there were issued and outstanding 15,658,704 shares
of the Issuer's Common Stock.
Page 3 of 6
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<TABLE>
<CAPTION>
Aggregate Amount of Percentage
Title of Class Beneficial Ownership of Class
- -------------- -------------------- ----------
<S> <C> <C>
Common Stock 1,400,000(1) 8.8%
</TABLE>
(1) Includes 320,000 shares of Common Stock issuable upon exercise of a
Common Stock Purchase Warrant (the "Warrant") owned by Group III Capital, Inc.
to purchase 1,500,000 shares of Common Stock. The Warrant will vest with respect
to 320,000 shares of Common Stock immediately and with respect to the remaining
1,180,000 shares of Common Stock on May 1, 1997, or at such earlier time as
prescribed by the Warrant. Also includes 1,030,000 shares of Common Stock owned
by Group III Capital Ventures, Inc.
- -------------
(b) The number of shares as to which Mr. Taylor has sole power to vote
or direct the vote, shared power to vote or direct the vote, sole power to
dispose or direct the disposition, or shared power to dispose or direct the
disposition is as follows:
(i) Sole Voting Power. Mr. Taylor has sole voting power with
respect to 50,000 shares of Common Stock beneficially owned.
(ii) Shared Voting Power. Mr. Taylor has shared voting power
with respect to 1,350,000* shares of Common Stock beneficially
owned.
(iii) Sole Dispositive Power. Mr. Taylor has sole power to
dispose or to direct the disposition with respect to 50,000
shares of Common Stock beneficially owned.
(iv) Shared Dispositive Power. Mr. Taylor has shared voting
power with respect to 1,350,000* shares of Common Stock
beneficially owned..
- -------------
* Includes 320,000 shares of Common Stock issuable upon exercise of a
Common Stock Purchase Warrant (the "Warrant") owned by Group III Capital, Inc.
to purchase 1,500,000 shares of Common Stock. The Warrant will vest with respect
to 320,000 shares of Common Stock immediately and with respect to the remaining
1,180,000 shares of Common Stock on May 1, 1997, or at such earlier time as
prescribed by the Warrant. Also includes 1,030,000 shares of Common Stock owned
by Group III Capital Ventures, Inc.
- -------------
(c) Mr. Taylor made the following transactions by June 5, 1996:
<TABLE>
<CAPTION>
Transaction Number Transaction
Date of Shares Type
----------- --------- -----------
<S> <C> <C>
May 9, 1996 320,000 Acquisition by Group III Capital Inc. of
Common Stock Purchase Warrant to Purchase
1,500,000 shares of Common Stock of which
320,000 are currently vested.
</TABLE>
Page 4 of 5
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<TABLE>
<S> <C> <C>
May 9, 1996 13,333 Right to Common Stock Purchase Options was
waived upon resignation from the Board of
Directors of the issuer.
June 5, 1996 150,000 Open-market sale of 150,000 shares of the
Common Stock of the Issuer at a price of
$3.00 per share.
</TABLE>
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Not Applicable
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Common Stock Purchase Warrant owned by Group III Capital, Inc.
Page 5 of 5
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
accurate.
/s/ Donald C. Taylor
Dated: June , 1996 ----------------------
Donald C. Taylor
Page 6 of 5
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EXHIBIT INDEX
EXHIBIT 99 Common Stock Purchase Warrant owned by Group III Capital, Inc.
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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 COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
Void after 5:00 p.m. New York Time, on May 9, 2006.
Warrant to Purchase 1,500,000 Shares of Common Stock.
WARRANT TO PURCHASE COMMON STOCK
OF
LITHIUM TECHNOLOGY CORPORATION
This is to certify that Group III Capital, Inc. (the "Holder") is
entitled to purchase, subject to the provisions of this Warrant, from the
Company, 1,500,000 fully paid, validly issued and nonassessable shares of Common
Stock, $.01 par value, of the Company ("Common Stock") at a price of $1.54 per
share on or before May 9, 2006 (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 with respect to
the first 320,000 shares immediately and with respect to the balance of the
shares on May 1, 1997; provided, however, all of the shares purchasable upon
exercise of this Warrant shall vest and be exercisable immediately upon the
closing of (i) any public or private debt or equity financing of the Company
resulting in gross proceeds to the Company of Five Million ($5,000,000) Dollars
or more or (ii) any joint venture, licensing or other similar
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transaction resulting in gross proceeds to the Company of Five Million
($5,000,000) Dollars or more including a further investment by a certain
Consortium consisting of Mitsubishi Materials Corporation, Mitsui & Co., Ltd. or
Mitsui Comtek or any other investor(s). Nothwithstanding the foregoing, in the
event the Holder shall be deemed the beneficial owner of 9.9% or more of the
common stock of the Company this Warrant shall not vest with respect to such
number of shares in excess of 9.9% until such time as the Holder shall
beneficially own less than 9.9% of the Common Stock of the Company.
(b) This Warrant may be exercised by presentation and
surrender hereof to the Company 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 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 Company 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 Company 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 Company 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 Company 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
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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:
(i) the Holder gives written notice to the
Company of its intention to exercise, which notice
(A) shall describe the manner and circumstances of
the proposed transaction in reasonable detail and
(B) shall designate the counsel for the Holder,
which counsel shall be satisfactory to the Company;
(ii) counsel for the Holder shall render an
opinion, in form and substance satisfactory to the
Company, to the effect that such proposed exercise
may be effected without registration under the
Securities Act or under applicable Blue Sky laws; and
(iii) the Holder complies with Sections
(c)(1)(a) and (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.
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2. RESERVATION OF SHARES. The Company 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 Company 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 Company 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 Company,
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 Company, 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 Company 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 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 Company 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
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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 Company shall issue rights, options or warrants
exercisable into Common Stock to all holders of its Common Stock entitling them
to subscribe for, purchase or receive shares of 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 (h) 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 (h) 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 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
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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) If the Company shall hereafter distribute to the holders
of its Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions and dividends or distributions referred to in
Subsection (a) above) or subscription rights or warrants (excluding those
referred to in Subsection (b) above), then in each such case the Exercise Price
in effect thereafter shall be determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator of which shall be
the total number of shares of Common Stock outstanding multiplied by the current
market price per share of Common Stock (as defined in Subsection (h) below),
less the fair market value (as determined by the Company's Board of Directors)
of said assets or evidences of indebtedness so distributed or of such rights or
warrants, and the denominator of which shall be the total number of shares of
Common Stock outstanding multiplied by such current market price per share of
Common Stock. Such adjustment shall be made each time such a record date is
fixed. Such adjustment shall be made whenever any such distribution is made and
shall become effective immediately after the record date for the determination
of shareholders entitled to receive such distribution.
(d) If the Company shall issue shares of its Common Stock,
(excluding shares issued (i) in any transactions described in Subsection (a)
above, (ii) upon exercise of existing or future stock options granted to the
Company's employees, (iii) upon exercise of this Warrant, and (iv) to the
shareholders of any corporation which merges into the Company in proportion to
their stockholdings of such corporation immediately prior to such merger, or (v)
in a bona fide public offering pursuant to a firm commitment underwriting) and
if no adjustment is required under any other subsection of this Section 6
(without regard to Subsection (j) below), the Exercise Price shall be subject to
adjustment as follows. If the price at which Common Stock is issued (the
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"Offering Price") is less then the current market price of the Common Stock (as
defined in Subsection (h) 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 Offering Price of the total number of
shares of Common Stock so issued 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 so issued. If the Subscription Price is greater than or equal to
the current market price (as defined in Subsection (h) below) of the Common
Stock on the date of such issuance, 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 Offering Price of the
total number of shares of Common Stock so issued would purchase at the Exercise
Price in effect immediately prior to such issuance and the denominator of which
shall be the number of shares outstanding on such record date plus the number of
shares of Common Stock so issued. If the Offering 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 an issuance is made.
(e) If the Company shall issue any securities convertible into
or exchangeable into Common Stock (excluding securities issued in transactions,
described in Subsections (b) and (d) above) the Exercise Price shall be subject
to adjustment as follows. If the price at which Common Stock is issuable
pursuant to such convertible securities (the "Conversion Price") is less than
the current market price 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 Conversion Price of the total number
of shares of Common Stock issuable upon conversion of
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the convertible securities 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 conversion of such convertible securities. If the Conversion
Price is greater than or equal to the current market price (as defined in
Subsection (h) below) of the Common Stock on the record date for such
distribution, but less than the then effective Exercise Price, the Conversion
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 Conversion Price of the total number
of shares of Common Stock issuable upon conversion of the securities 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 plus the number of shares of Common Stock issuable upon conversion
of such convertible securities. If the Conversion 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 convertible securities are issued and shall become
effective immediately after the record date for the determination of holders
entitled to receive such convertible securities; and to the extent that any such
convertible securities expire or are redeemed without the 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.
(f) Whenever the Exercise Price payable upon exercise of each
Warrant is adjusted pursuant to Subsections (a), (b), (c), (d) and (e) 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.
(g) For purposes of any computation respecting consideration
received pursuant to Subsections (d) and (e) above, the following shall apply:
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(1) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such
cash, provided that in no case shall any deduction be made for
any commissions, discounts or other expenses incurred by the
Company for any underwriting of the issue or otherwise in
connection therewith;
(2) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash,
the consideration other than cash shall be deemed to be the
fair market value thereof as determined in good faith by the
Board of Directors of the Company (irrespective of the
accounting treatment thereof), whose determination shall be
conclusive; and
(3) in the case of the issuance of securities
convertible into or exchangeable for shares of Common
Stock, the aggregate consideration received therefor
shall be deemed to be the consideration received by the
Company for the issuance of such securities plus the
additional minimum consideration, if any, to be received by
the Company upon the conversion or exchange thereof the
consideration in each case to be determined in the same manner
as provided in clauses (1) and (2) of this Subsection (g).
(h) For the purpose of any computation under Subsections (b),
(c), (d) and (e) 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.
(i) All calculations under this Section 6 shall be made to the
nearest cent or to the nearest one-hundredth of a share, as
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the case may be. Anything in this Section 6 to the contrary notwithstanding, the
Company 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 Company shall not result in
any Federal Income tax liability to the holders of the Common Stock or
securities convertible into Common Stock (including warrants).
(j) Whenever the Exercise Price is adjusted, as herein
provided, the Company 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 Company may retain a firm of independent certified public
accountants selected by the Board of Directors (who may be the regular
accountants employed by the Company) 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.
(k) In the event that any time, as a result of an adjustment
made pursuant to Subsection (a) above, the Holder of this Warrant thereafter
shall become entitled to receive any shares of the Company, other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
this Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in Subsections (a) to (j), inclusive above.
7. OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be adjusted
as required by the provisions of the foregoing Section, the Company 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
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Holder or any holder of a Warrant executed and delivered pursuant to Section 1
and the Company 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 Company shall pay any dividend or make any distribution
upon the Common Stock or (ii) if the Company 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 Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen 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,
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 Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than the merger with the Holder
or a merger with a subsidiary in which merger the Company 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 Company as an entirety,
the Company shall, as a condition precedent to such transaction, cause effective
provisions to be made so that the Holder shall have the right
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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 Holder 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 Company
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) Definitions. As used in this Section, the following terms
shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission,
or any other Federal agency at the time administering the Securities Act (as
hereinafter defined).
"Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any successor federal statute, and the rules and regulations of
the Commission issued thereunder, as they each may from time to time, be in
effect.
"Registration Statement" means a registration statement
filed by the Company with the Commission for a public offering and sale of
securities of the Company (other than a registration statement on Form S-8 or
Form S-4, or their successors, or any other forms for a limited purpose, or any
registration statement covering securities proposed to be issued in exchange for
securities or assets of another corporation.)
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"Registration Expenses" means all expenses incurred by the
Company in complying with this Section 10, including without limitation, all
registration and filing fees, exchange listing fees, printing expenses, fees and
disbursements of counsel for the Company, state Blue Sky fees and expenses, and
the expense of any special audits incident to or required by any such
registration, but excluding underwriting discounts and selling commissions
relating to Registrable Shares (as hereinafter defined) sold by the Shareholders
under a Registration Statement and the fees and expenses of Shareholders'
counsel.
"Registrable Shares" means all of the Warrant Shares and
any other shares of Common Stock of the Company issued in respect of such shares
(because of stock splits, stock dividends, reclassification, recapitalization,
or similar events).
"Securities Act" means the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and regulations of the
Commission issued thereunder, as they each may, from time to time, be in effect.
(b) Piggyback Registration.
(i) From and after the date hereof until May 9, 2006
whenever the Company proposes to file a Registration Statement at any time and
from time to time, it will prior to such filing, give written notice to the
Holders of its intention to do so and, upon the written request of the Holders,
given within thirty (30) days after the Company provides such notice (which
request shall state the intended method of disposition of such Registrable
Shares), the Company shall use its best efforts to cause all Registrable Shares
which the Company has been requested by the Holders to register to be registered
under the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of the Company.
(ii) In connection with any offering under this subsection
(b) involving an underwriting, the Company shall not be required to include any
Registrable Shares in such Registration Statement unless the Holders accepts the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by
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it (provided the terms of such underwriting agreement are typical and
customary).
(iii) In connection with an offering under this subsection
(b), if the total amount of securities that all holders of the Company's Common
Stock (or securities convertible into or exchangeable or exercisable for Common
Stock) requested to be included in such offering exceeds the amount of
securities that the underwriters in their sole discretion believe compatible
with the success of the offering (or exceeds the amount of securities that along
with the securities the Company proposes to register, can be registered on the
form that the Company proposes to use) the Company shall only be required to
include in the offering so many of the securities of the selling holders as will
not, in the written opinion of the underwriters, jeopardize the success of the
offering (or so many of the securities as can be registered on the proposed form
along with the securities the Company proposes to register), the securities so
included to be apportioned, to the extent available, pro-rata among the other
holders of Registrable Shares according to the total amount of Registrable
Shares owned by said other selling holders, or in such other proportions as
shall be mutually agreed to by such other selling holders, provided that no such
reduction shall be made with respect to any securities offered by the Company
for its own account.
(c) Registration Procedures. If and to the extent that the
Company is required by the provisions of this Agreement to use its best efforts
to effect the registration of any of the Registrable Shares under the Securities
Act, the Company shall:
(i) file with the Commission a Registration Statement
with respect to such Registrable Shares and use its best efforts to cause that
Registration Statement to become effective; and
(ii) as expeditiously as possible prepare and file
with the Commission any amendments or supplements to the Registration Statement
and the prospectus included in the Registration Statement as may be necessary to
keep the Registration Statement effective (a) for a period of not less than one
hundred eighty (180) days following the effective date or, (b) in the event the
Registrable Shares include warrants or options, for as long as said warrants or
options are exercisable; and
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(iii) as expeditiously as possible furnish to the
Holders such reasonable numbers of copies of the prospectus including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as Company may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares;
(iv) as expeditiously as possible use its best efforts
to register or qualify the Registrable Shares covered by the Registration
Statement under the Securities or Blue Sky laws of such states as the Holders
shall reasonably request and to do any and all other acts and things that may be
necessary or desirable to enable the Holders to consummate the public sale or
other disposition of such Registrable Shares in such states; and
(v) If the Company has delivered preliminary or final
prospectuses to the Holders and after having done so the prospectus is amended
to comply with the requirements of the Securities Act, the Company shall
promptly notify the Holders and, if requested, the Holders shall immediately
cease making offers of Registrable Shares and return all prospectuses then in
their possession to the Company. The Company shall promptly provide the Holders
with revised prospectuses and the Holders shall be free to resume making offers
of the Registrable Shares.
(d) Allocation of Expenses. The Company will pay all
Registration Expenses of all registrations under this Agreement.
(e) Indemnification. In the event any Registrable Shares
are included in a Registration Statement under this Agreement:
(i) To the extent permitted by law, the Company will
indemnify and hold the Holders, any agent or underwriter (as defined in the
Securities Act) for the Holders, and each person, if any, who controls the
Holders or any such agent or underwriter within the meaning of the Securities
Act, against any losses, claims, damages, or liabilities, joint or several, to
which the Holders or any of them may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based on any untrue or alleged untrue
statement of a material fact
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contained in the registration statement, including the preliminary prospectus or
final prospectus contained therein or any amendments or supplements thereto, or
arises out of or based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arise out of any violation by the Company of any rule
or regulation promulgated under the Securities Act applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration; and will reimburse Holders and any such agent, underwriter,
or controlling person for any legal or other expenses reasonably incurred by the
Holders in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the Indemnity agreement
contained in this Section 5 shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld) nor shall the Company be liable in any case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in connection with such registration statement, preliminary prospectus,
final prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by (a) the Holders' Registrable Shares or registration
rights hereunder, or any agent, underwriter, or controlling person of the
Holders or any transferee of the Holders, or (b) by any other person (excluding
the Company's directors, each of its officers who has signed the registration
statement, each person, if any, who controls the Company within the meaning of
the Act and each agent of any underwriter for the Company).
(ii) To the extent permitted by law, the Holders will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, and each agent or
any underwriter of the Company (within the meaning of the Securities Act)
against any losses, claims, damages, or liabilities to which the Company or any
such director, officer, controlling person, agent, or underwriter may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in
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respect thereto) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
including any preliminary prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such registration
statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by the Holders expressly for use in connection with such registration; and the
Holders will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, agent, or underwriter
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 5 shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the Holders' consent (which consent shall not be unreasonably withheld);
provided, however that the obligation of the Holders hereunder shall be limited
to an amount equal to the gross proceeds received by the Holders pursuant to the
sale of the Registrable Shares.
(iii) Promptly after receipt by an indemnified party
under this paragraph of notice of commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this paragraph, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties. The failure to notify
an indemnifying party promptly of the commencement of any such action, if
prejudicial to his ability to defend such action, shall relieve such
indemnifying party of any liability to indemnified party under this paragraph,
but the omission so to notify the indemnifying party will not relieve him of any
liability that he may have to any indemnified party otherwise than under this
paragraph.
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(f) Underwritten Offerings. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering, the Holders agrees to enter into an underwriting
agreement with such underwriter or underwriters containing customary
representations and warranties with respect to the business and operations of
the Company, and customary representations and warranties of a selling holder,
respectively, as well as customary covenants and agreements to be performed by
each of the Company and the Holders, including without limitation customary
provisions with respect to indemnification of the underwriter by the Company and
the Holders.
(g) Information by the Holders. The Holders shall
furnish to the Company in writing such information regarding the Holders as in
the reasonable opinion of the Company or counsel to the Company may be requested
as being required in connection with the provisions of the Securities Act.
11. ASSIGNMENT OF WARRANT. This Warrant may be assigned in
whole or part by the Holder without regard to whether the Warrant has vested in
whole or in part provided that, unless such transfer is made pursuant to an
effective registration statement under the Securities Act, the transferring
Holder will, if reasonably requested by the Company, deliver to the Company an
opinion of counsel, satisfactory in form and substance to the Company, 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 Company.
Dated: May 9, 1996
ATTEST: LITHIUM TECHNOLOGY CORPORATION
By: By:
------------------------- -------------------------------
Susan M. Gustafson, Thomas R. Thomsen, Chairman
Secretary and Chief Executive Officer
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