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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): NOVEMBER 8, 1999
BOLDER TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-28060 84-1166231
(Commission File No.) (IRS Employer Identification No.)
4403 TABLE MOUNTAIN DRIVE
GOLDEN, COLORADO 80403
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (303) 215-7200
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ITEM 5. OTHER EVENTS.
The Company has filed, in accordance with the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations thereunder,
with the Securities and Exchange Commission a registration statement on Form S-3
(File No. 333-86235), including a base prospectus, relating to $30,000,000 of
securities and the offering thereof from time to time in accordance with Rule
415 under the Securities Act, which incorporates by reference documents which
the Company has filed or will file in accordance with the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder.
On November 9, 1999, the Company filed a final prospectus supplement
relating to its offering of 2,200,000 shares of its Common Stock at $9.00 per
share in an underwritten public offering (the "Offering").
The Registrant is filing the following exhibits in connection with the
Offering.
ITEM 7. EXHIBITS.
Exhibit 1.1 Underwriting Agreement dated November 8, 1999 among the
Registrant and the several underwriters with respect to
the Offering.
Exhibit 4.1 Warrant Agreement
Exhibit 4.2 Form of Warrant
Exhibit 5.1 Opinion of Cooley Godward LLP
Exhibit 23.1 Consent of Cooley Godward LLP (included in Exhibit 5.1)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BOLDER TECHNOLOGIES CORPORATION
Date: November 9, 1999
By: /s/ Joseph F. Fojtasek
--------------------------------
Joseph F. Fojtasek
Vice President and Chief Financial
Officer (Principal Financial and
Accounting Officer)
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1.1 Underwriting Agreement dated November 8, 1999 among the
Registrant and the several underwriters with respect to
the Offering.
4.1 Warrant Agreement
4.2 Form of Warrant
5.1 Opinion of Cooley Godward LLP
23.1 Consent of Cooley Godward LLP (included in Exhibit 5.1)
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EXHIBIT 1.1
BOLDER TECHNOLOGIES CORPORATION
UNDERWRITING AGREEMENT
As of November 8, 1999
FIRST SECURITY VAN KASPER INC.
As Representative of the
Several Underwriters
First Security Van Kasper Inc.
600 California Street, Suite 1700
San Francisco, California 94111
Ladies and Gentlemen:
BOLDER Technologies Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 2,200,000 shares, each
with one associated "Right" (as described in the "Base Prospectus" (defined
below)) (including such Rights, the "Firm Shares") of the Company's Common
Stock, $0.001 par value per share (the "Common Stock"). The Company also
proposes to grant to the Underwriters an option to purchase up to 330,000
additional shares of Common Stock, each with one associated Right (including
such Rights, the "Option Shares") for the sole purpose of covering
over-allotments, if any, in connection with the sale of the Firm Shares. The
Firm Shares and any Option Shares are referred to below as the "Shares." First
Security Van Kasper Inc. is acting as representative of the several Underwriters
and in that capacity is referred to in this Agreement as the "Representative".
The Company has filed, in accordance with the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations thereunder (the
"Rules and Regulations"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-86235),
including a base prospectus, relating to $30,000,000 of securities (including
the Shares) and the offering thereof from time to time in accordance with Rule
415 under the Securities Act, which incorporates by reference documents which
the Company has filed or will file in accordance with the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder (the "Exchange Act Rules and Regulations"). As used in this
Agreement, "Base Prospectus" means the prospectus included in the Registration
Statement when it became effective under the Securities Act on September 17,
1999 and as it may have been amended subsequent to that date to the date hereof.
The Company has furnished to you and the other Underwriters, for use by you,
them and dealers, copies of a preliminary prospectus supplement or preliminary
prospectus supplements relating to the Shares, including the Base Prospectus and
all documents incorporated by reference in the Base Prospectus (collectively,
the "Preliminary Prospectus Supplement/Prospectus"). As used below in this
Agreement: (i) registration statement (File No. 333-86235), as in effect at the
time of execution of this Agreement, including the Base Prospectus and all
documents incorporated by reference in the Base Prospectus, is referred to as
the "Registration Statement"; (ii) the final prospectus supplement relating to
the Shares, including the Base Prospectus and all documents
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incorporated in the Base Prospectus by reference, in the form first filed by the
Company with the Commission pursuant to Rule 424(b) under the Securities Act, is
referred to below as the "Prospectus Supplement/ Prospectus"; and (iii) except
where otherwise stated, references to any specific Rule or Rules refers to Rules
that are part of the Rules and Regulations.
The Company agrees with the several Underwriters as set forth below.
1. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter as follows:
(a) The Company meets and has satisfied the requirements for
use of Form S-3 under the Securities Act. The Company has prepared and
filed the Registration Statement with the Commission on Form S-3, for
registration under the Securities Act of the offering and sale of the
Shares. The Registration Statement has been declared effective by the
Commission. The Company has filed the Preliminary Prospectus
Supplement/Prospectus with the Commission in accordance with Rule
424(b). The Company will next file with the Commission, in accordance
with Rules 430A and 424(b) under the Securities Act, the Prospectus
Supplement/Prospectus.
(b) The Preliminary Prospectus Supplement/Prospectus filed
pursuant to Rule 424(b) complied in all material respects with the
Securities Act, the Rules and Regulations, the Exchange Act and the
Exchange Act Rules and Regulations. When the Registration Statement
became effective and at all times subsequent thereto up to the "Time of
Purchase" (defined below) and, if applicable, the "Additional Time of
Purchase" (defined below), the Registration Statement and the
Prospectus Supplement/Prospectus, and any supplements or amendments
either of them, complied and will comply in all material respects with
the Securities Act, the Rules and Regulations, the Exchange Act and the
Exchange Act Rules and Regulations, and each of the Registration
Statement and the Prospectus Supplement/Prospectus at all such times
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided that the Company
makes no representation or warranty with respect to any statement
contained in the Prospectus Supplement/Prospectus in reliance upon and
in conformity with information concerning the Underwriters and
furnished in writing by or on behalf of any Underwriter through you to
the Company expressly for use in, and set forth in, the section of the
Prospectus Supplement/Prospectus entitled "Underwriting"; the documents
incorporated by reference in the Base Prospectus, at the time they were
filed with the Commission (or, if an amendment with respect to any of
them was filed, when it was so filed), complied in all material
respects with the requirements of the Exchange Act and the Exchange Act
Rules and Regulations and, without limitation and except to the extent,
if any, they are modified or superseded by the Registration Statement
or the Prospectus Supplement/Prospectus, did not and do not contain an
untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and the Company has
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complied and, until completion of the offering of the Shares will
continue to comply, with its obligations under the Exchange Act and the
Exchange Act Rules and Regulations.
(c) No order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary
Prospectus Supplement/Prospectus or the Prospectus
Supplement/Prospectus has been issued and no proceedings for that
purpose are pending or, to the knowledge of the Company, threatened or
contemplated by the Commission; no stop order suspending the sale of
the Shares in any jurisdiction has been issued and no proceedings for
that purpose are pending or, to the knowledge of the Company,
threatened or contemplated; and any request of the Commission for
additional information, whether to be included in the Registration
Statement, any Preliminary Prospectus Supplement/Prospectus or the
Prospectus Supplement/Prospectus or otherwise, has been complied with.
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
has the power (corporate and other) and authority to own or lease its
properties and conduct its business as described in the Registration
Statement and the Prospectus Supplement/Prospectus (or, if the
Prospectus Supplement/Prospectus is not in existence, the most recent
Preliminary Prospectus Supplement/Prospectus) and as is currently being
conducted by it and is duly qualified as a foreign corporation and in
good standing in all jurisdictions in which the character of the
property owned or leased or the nature of the business transacted by it
makes qualification necessary (except where the failure to be so
qualified would not have a material adverse effect on the business,
results of operations, condition (financial or other) or prospects of
the Company). The Company has and is operating in compliance in all
material respects with all authorizations, licenses, certificates,
consents, orders and permits from federal, state, local and other
governmental or regulatory authorities that are material to the conduct
of its business, all of which are valid and in full force and effect.
The Company does not have any "subsidiaries" ("subsidiary" meaning any
corporation, partnership, limited liability company or other entity of
which the Company directly or indirectly owns 50% or more of the equity
or that the Company directly or indirectly controls).
(e) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus
Supplement/Prospectus (or, if the Prospectus Supplement/Prospectus is
not in existence, the most recent Preliminary Prospectus
Supplement/Prospectus), there has not been any material loss or
interference with the business of the Company from fire, explosion,
flood, earthquake, riot or other civil disturbance or other calamity,
whether or not covered by insurance, or from any court or governmental
action, order or decree, or any changes in the capital stock or
long-term debt of the Company, or any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company, or any
material change, or a development known to the Company that might cause
or result in a material change, in or affecting the business, results
of operations, condition (financial or other) or prospects of the
Company, whether or not arising from transactions in the ordinary
course of business, in each case other than as may be set forth in the
Registration Statement and the Prospectus Supplement/Prospectus (or, if
the Prospectus Supplement/Prospectus is not in existence, the most
recent Preliminary Prospectus Supplement/Prospectus), and since each
such date, the Company has not entered into any material transaction
not described in the Registration Statement and the Prospectus
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Supplement/Prospectus (or, if the Prospectus Supplement/Prospectus is
not in existence, the most recent Preliminary Prospectus
Supplement/Prospectus).
(f) There is no agreement, contract, license, lease or other
document required to be described in the Registration Statement or the
Prospectus Supplement/Prospectus (or, if the Prospectus
Supplement/Prospectus is not in existence, the most recent Preliminary
Prospectus Supplement/Prospectus) or to be filed as an exhibit to the
Registration Statement which is not described or filed as required. All
contracts described in the Prospectus Supplement/Prospectus (or, if the
Prospectus Supplement/Prospectus is not in existence, the most recent
Preliminary Prospectus Supplement/Prospectus), if any, are in full
force and effect, and neither the Company nor, to the knowledge of the
Company, any other party, is in material breach of or default under any
such contract.
(g) The authorized and outstanding capital stock of the
Company is set forth in the Prospectus Supplement/Prospectus (or, if
the Prospectus Supplement/Prospectus is not in existence, the most
recent Preliminary Prospectus Supplement/Prospectus), and the
description of the Common Stock (including the Rights) therein conforms
with and accurately describes the rights set forth in the instruments
defining the Common Stock (including the Rights). The Shares to be
issued and sold by the Company are duly authorized and, when issued and
delivered in accordance with the terms of this Agreement and against
payment therefor, will be validly issued, fully paid and
non-assessable. The issuance of the Shares by the Company is not
subject to any preemptive or similar rights.
(h) The capitalization of the Company as of June 30, 1999 is
as set forth under the column entitled "June 30, 1999 - Actual" in the
section of the Prospectus Supplement/Prospectus (or, if the Prospectus
Supplement/Prospectus is not in existence, the Preliminary Prospectus
Supplement/Prospectus) entitled "Capitalization" and, as of the Time of
Purchase, assuming the Time of Purchase had been June 30, 1999, and pro
forma for the receipt of the net proceeds of the Company's July 1997
private placement of Common Stock, the capitalization of the Company
would have been as set forth under the column entitled "June 30, 1999 -
Pro Forma As Adjusted" in the section of the Prospectus
Supplement/Prospectus entitled Capitalization." All of the outstanding
shares of capital stock of the Company (including the Rights) have been
duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable
federal and state securities laws and were not issued in violation of
or subject to any preemptive rights or other rights to subscribe for or
purchase securities. The description of the Company's stock option,
stock bonus and other stock plans or arrangements, and the options or
other rights granted or exercised thereunder, set forth in the
Prospectus Supplement/Prospectus (or, if the Prospectus
Supplement/Prospectus is not in existence, in the most recent
Preliminary Prospectus Supplement/Prospectus), accurately and fairly
present the information required to be shown with respect to such
plans, arrangements,
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options and rights. Other than this Agreement, the Warrant Agreement
between the Company and First Security Van Kasper Inc. covering
warrants to purchase 66,000 shares of the Common Stock (including
associated Rights) (the "Warrant Agreement"), outstanding options to
purchase Common Stock, options to purchase 622,000 shares of Common
Stock granted to Roger Warren pursuant to his Key Employee Agreement,
dated September 1999, options to purchase 70,553 shares of Common Stock
granted pursuant to the Company's 1996 Equity Incentive Plan since June
30, 1999 and additional options to purchase Common Stock issued after
the date of this Agreement pursuant to existing stock option plans,
outstanding warrants to purchase Common Stock, outstanding securities
convertible into Common Stock, securities issuable pursuant to existing
employee compensation plans and pursuant to the Rights (provided that
the Rights are not exercisable), in each case as described in the
Prospectus Supplement/Prospectus (or, if the Prospectus
Supplement/Prospectus is not in existence, the most recent Preliminary
Prospectus Supplement/Prospectus), there are no options, warrants or
other rights outstanding to subscribe for or purchase any shares or any
securities convertible into or exchangeable for any capital stock of
the Company. There are no preemptive rights applicable to any shares of
capital stock of the Company. There are no restrictions upon the voting
or transfer of any of the Shares pursuant to the Company's Certificate
of Incorporation, bylaws or other governing documents or any agreement
to which the Company is a party or by which it may be bound. Except as
is provided in the Warrant Agreement and for the Shares, neither the
filing of the Registration Statement nor the offering or sale of the
Shares as contemplated by this Agreement gives rise to any rights,
other than those which have been waived, for or relating to the
registration of any securities of or issued by the Company. The Rights
are not now and never have been transferable separately from the shares
of Common Stock or exercisable. No Person, including any of the
Company's shareholders at the time of the issuance of the Rights, has
at any time been an Acquiring Person, a Principal Party or a
Transaction Person, and no Distribution Date, Shares Acquisition Date
or Transaction has occurred or been proposed. The execution of this
Agreement and the Warrant Agreement and the completion of the
transactions contemplated hereby and thereby, including the acquisition
of the Shares and any Common Stock purchased by any Underwriter in
connection with stabilization will not cause: (i) any Underwriter to
become an Acquiring Person, a Principal Party or a Transaction Person;
(ii) a Distribution Date, a Shares Acquisition Date or a Transaction to
occur or (iii) any Underwriter or any two or more Underwriters taken
together to be, or to have been, the "Beneficial Owner" and/or to
"beneficially own" any of (A) the Shares it or they had or have the
right to acquire under the Underwriting Agreement, (B) the Shares it or
they acquire under the Underwriting Agreement or (C) any shares of
Common Stock it or they acquire in stabilization transactions related
to the distributions or proposed distribution of the Shares
contemplated by the Underwriting Agreement. The Amendment to the
"Rights Agreement" (defined below) dated November 8, 1999, was duly
authorized, executed and delivered by the Company and the Rights Agent
and amended the Rights Agreement effective as of January 23, 1998.
There have been no other amendments to the Rights Agreement. As used in
this section the following terms have the meanings given to them in the
Rights Agreement dated as of January 23, 1998 between the Company and
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American Stock Transfer & Trust Company, as Rights Agent (the "Rights
Agreement"): "Beneficial Owner", "beneficially own", "Person",
"Acquiring Person", "Principal Party", "Transaction Person",
"Distribution Date", "Shares Acquisition Date" and "Transaction".
(i) The Company has power (corporate and other) to enter into
and perform its obligations under this Agreement and the Warrant
Agreement and to issue, sell and deliver the securities to be delivered
by it pursuant hereto and thereto. This Agreement and the Warrant
Agreement have each been duly authorized, executed and delivered by the
Company and constitute the valid and binding agreements of the Company,
and each is enforceable against the Company in accordance with its
terms except insofar as enforceability may be affected by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general equitable considerations and
except insofar as the indemnification and contribution provisions of
Section 7 of this Agreement and Section 3(f) of the Warrant Agreement
may be affected by public policy concerns.
(j) The Company is not, nor with the giving of notice or lapse
of time or both would it be, in violation of or in default under, nor
will the execution or delivery of this Agreement or the Warrant
Agreement or the completion of the transactions contemplated by this
Agreement or the Warrant Agreement result in a violation of or
constitute a breach of or a default (including without limitation with
the giving of notice, the passage of time or both) under, the
Certificate of Incorporation, bylaws or other governing documents of
the Company or any evidence of indebtedness, contract, license, joint
venture or other agreement or instrument of any type whatsoever to
which the Company is a party or by which it or any of its properties is
bound except that no representation or warranty is made with respect to
certain matters set forth in a letter delivered by the Company, dated
the date hereof, to the Representative, other than a representation
that any breaches of or defaults under the agreements referred to in
that letter, if in fact any such matters are breaches or defaults, are
not material to the Company. The Company has not incurred any
liability, direct or indirect, for any finders' or similar fees payable
on behalf of the Company or the Underwriters in connection with the
transactions contemplated by this Agreement or the Warrant Agreement.
The performance by the Company of its obligations under this Agreement
and the Warrant Agreement will not violate any law, ordinance, rule or
regulation (provided that no representation or warranty is made with
respect to the effect, if any, of public policy concerns on the
indemnification and contribution provisions of Section 7 of this
Agreement and Section 3(f) of the Warrant Agreement), or any order,
writ, injunction, judgment or decree of any governmental agency or body
or of any court or result in the creation or imposition of any lien,
charge, claim, encumbrance or right of any third party of any type or
description on any property of the Company. No consent, approval,
authorization or order of any court, governmental agency or body
(except as has been obtained), financial institution or any other
person is required for the completion of the transactions contemplated
by this Agreement or, except for filings under the Securities Act
required by Section 3 of the Warrant Agreement, the Warrant Agreement.
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(k) The Company owns, or has valid rights to use, all items of
real and personal property which are material to the business of the
Company, free and clear, except as described in the Registration
Statement and the Prospectus Supplement/Prospectus (or, if the
Prospectus Supplement/Prospectus is not in existence, the most recent
Preliminary Prospectus Supplement/Prospectus), of all liens, charges,
claims, encumbrances and rights of third parties of any type or
description that might materially interfere with the business, results
of operations, condition (financial or other) or prospects of the
Company.
(l) The Company owns or possesses adequate rights to use all
patents, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, tradenames and copyrights which are
necessary for the conduct of its business. Except as set forth in the
Prospectus Supplement/Prospectus (or, if the Prospectus
Supplement/Prospectus is not in existence, the most recent Preliminary
Prospectus Supplement/Prospectus), the Company has not received any
notice of infringement of or conflict with asserted rights of others
with respect to any patents, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, tradenames or copyrights which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, might have a material adverse effect on the
business, results of operations, condition (financial or other) or
prospects of the Company.
(m) Except as set forth in the Prospectus
Supplement/Prospectus (or, if the Prospectus Supplement/Prospectus is
not in existence, the most recent Preliminary Prospectus
Supplement/Prospectus), there is no litigation or governmental
proceeding to which the Company is a party or to which any property of
the Company is subject which is pending or, to the best knowledge of
the Company, threatened or contemplated against the Company or its
property that (i) might have a material effect on, or might result in
any material adverse change in, the business, results of operations,
condition (financial or other) or prospects of the Company, (ii) might
prevent completion of the transactions contemplated by this Agreement
or the Warrant Agreement or (iii) is required to be disclosed in the
Registration Statement or Prospectus Supplement/ Prospectus (or, if the
Prospectus Supplement/Prospectus is not in existence, the most recent
Preliminary Prospectus Supplement/Prospectus) and is not so disclosed.
(n) The Company is not in violation of any law, order,
ordinance, rule or regulation, or any order, writ, injunction, judgment
or decree of any governmental agency or body or of any court, to which
it or its properties (whether owned or leased) may be subject, which
violation might have a material adverse effect on the business, results
of operations, condition (financial or other) or prospects of the
Company.
(o) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to cause or result
in, under the Exchange Act, the Exchange Act Rules and Regulations or
otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
No bid or purchase by the Company and, to the best knowledge of the
Company, no bid or purchase that could be
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attributed to the Company (as a result of bids or purchases by an
"affiliated purchaser" within the meaning of Regulation M under the
Exchange Act) for or of the Common Stock, any securities of the same
class or series as the Common Stock or any securities convertible into
or exchangeable for or that represent any right to acquire the Common
Stock is now pending or in progress or will have commenced at any time
prior to the completion of the distribution of the Shares.
(p) Arthur Andersen LLP, whose report appears in the
Registration Statement and the Prospectus Supplement/Prospectus (or, if
the Prospectus Supplement/Prospectus is not in existence, the most
recent Preliminary Prospectus Supplement/Prospectus) is, and during the
periods covered by that report were, independent accountants as
required by the Securities Act and the Rules and Regulations. The
financial statements and schedules included in the Registration
Statement, each Preliminary Prospectus Supplement/ Prospectus and the
Prospectus Supplement/Prospectus present fairly (or, if the Prospectus
Supplement/Prospectus has not been filed with the Commission, as to the
Prospectus Supplement/Prospectus, will present fairly) the financial
condition, results of operations, changes in shareholders' equity
(deficit) and cash flows of the Company at the dates and for the
periods indicated, and each of those financial statements and schedules
present fairly the information required to be stated therein. Such
financial statements and schedules have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis throughout the periods presented, except as may be stated
therein. The selected and summary financial and statistical data
included in the Registration Statement and the Prospectus
Supplement/Prospectus present fairly (or, if the Prospectus
Supplement/Prospectus has not been filed with the Commission, as to the
Prospectus Supplement/Prospectus, will present fairly) the information
shown therein and have been compiled on a basis consistent with the
audited financial statements presented therein. No other financial
statements or schedules are required to be included in the Registration
Statement, the Base Prospectus, the Preliminary Prospectus
Supplement/Prospectus or the Prospectus Supplement/Prospectus.
(q) The books, records and accounts of the Company accurately
and fairly reflect, in reasonable detail, the transactions in and
dispositions of the assets of the Company. The systems of internal
accounting controls maintained by the Company are sufficient to provide
reasonable assurances that: (i) transactions are executed in accordance
with management's general or specific authorization; (ii) transactions
are recorded as necessary (x) to permit preparation of financial
statements in conformity with generally accepted accounting principles
and (y) to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(r) The Company has delivered to the Representative the
written agreement of each of its officers and directors (each a
"Material Holder") to the effect that each Material Holder will not,
for a period of 90 days following the date of this Agreement, without
the prior written consent of First Security Van Kasper Inc., offer,
sell or
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otherwise dispose of any Common Stock owned by him or her or any
interest therein, except for bona fide gifts and transfers of Common
Stock to immediate family members or to a trust for his or her benefit
or the benefit of an immediate family member.
(s) No labor disturbance by the employees of the Company
exists, is imminent or, to the knowledge of the Company, is
contemplated or threatened. The Company is not aware of an existing,
imminent or threatened labor disturbance by employees of any principal
suppliers, manufacturers, contractors or others that might be expected
to result in any material change in the business, results of
operations, condition (financial or other) or prospects of the Company.
No collective bargaining agreement exists with any of the Company's
employees and, to the best knowledge of the Company, no such agreement
is imminent.
(t) The Company has filed all federal, state, local and
foreign tax returns which are required to be filed or has requested
extensions thereof and has paid all taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges to the
extent that those taxes have become due and payable. No tax assessment
or deficiency has been made or proposed against the Company nor has the
Company received any notice of any proposed tax assessment or
deficiency.
(u) Except as set forth in the Prospectus
Supplement/Prospectus (or, if the Prospectus Supplement/Prospectus is
not in existence, the most recent Preliminary Prospectus
Supplement/Prospectus), there are no outstanding loans, advances or
guaranties of indebtedness by the Company to or for the benefit of any
of (i) its "affiliates", as that term is defined in the Rules and
Regulations, or (ii) any of the members of the families of any of them.
(v) The Company has not, directly or indirectly, at any time:
(i) made any contributions to any candidate for political office, or
failed to disclose fully any such contribution, in violation of law;
(ii) made any payment to any local, state, federal or foreign
governmental officer or official or other person charged with similar
public or quasi-public duties, other than payments required or allowed
by all applicable laws; or (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended.
(w) The Company has no liability, absolute or contingent,
relating to: (i) public health or safety; (ii) worker health or safety;
(iii) product defect or warranty; or (iv) pollution, damage to or
protection of the environment, including, without limitation, relating
to damage to natural resources, emissions, discharges, releases or
threatened releases of hazardous materials into the environment
(including, further without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or otherwise relating
to the manufacture, processing, use, treatment, storage, generation,
disposal, transport or handling of any hazardous materials. As used in
this Section 2(w), "hazardous material" includes lead, lead oxide,
sulfuric acid, solvents, adhesives and other chemical substances,
wastes, pollutants, contaminants and hazardous or toxic substances,
constituents, materials or wastes, in each case whether solid, gaseous
or liquid in nature.
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<PAGE> 10
(x) The Company has not distributed and will not distribute
prior to the Time of Purchase and the Additional Time of Purchase, as
the case may be, any prospectus, prospectus supplement or other
offering material in connection with the offering and sale of the
Shares other than the Preliminary Prospectus Supplement/Prospectus, the
Prospectus Supplement/Prospectus, the Registration Statement and any
other material which may be permitted by the Securities Act and the
Rules and Regulations.
(y) The Common Stock is traded on and, subject to official
notice of issuance, the Shares have been approved for inclusion for
quotation on the Nasdaq National Market.
(z) The Company is not now, and intends to conduct its affairs
in the future in such a manner so that it will not become, an
investment company within the meaning of the Investment Company Act of
1940, as amended.
2. Purchase, Sale and Delivery of Shares.
(a) On the basis of the representations, warranties, covenants and
agreements of the Company contained in this Agreement and subject to the terms
and conditions set forth in this Agreement, the Company agrees to sell to the
several Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $8.46 per share
(the "purchase price per share"), the number of Firm Shares set forth opposite
its name on Schedule I hereto.
(b) The Company hereby grants to the several Underwriters an option to
purchase from the Company, severally and not jointly, all or any portion of the
Option Shares at the same purchase price per share as the Underwriters are to
pay for the Firm Shares. This option may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters and may be
exercised in whole or in part at any time on or before the 45th day after the
date of the Prospectus Supplement/Prospectus upon written, telecopied or
telegraphic notice by the Representative to the Company setting forth the
aggregate number of Option Shares as to which the several Underwriters are
exercising the option and the settlement date. The Option Shares shall be
purchased severally, and not jointly, by each Underwriter, if purchased at all,
in the same proportion that the number of Firm Shares set forth opposite the
name of the Underwriter in Schedule I to this Agreement bears to the total
number of Firm Shares to be purchased by the Underwriters under Section 2(a)
above, subject to such adjustments as the Representative may in its discretion
make to eliminate any fractional shares. Delivery of certificates for the Option
Shares, and payment therefor, shall be made as provided in Sections 2(c) and
2(d) below.
(c) Delivery of the Firm Shares and, if the option granted by the
Company in Section 2(b) above has been exercised not later than 6:30 a.m., San
Francisco time, on the second business day preceding the Time of Purchase, the
Option Shares is to be made at the office of Gibson, Dunn & Crutcher LLP, 1801
California Street, Suite 4100, Denver, Colorado 80202 at 7:30 a.m., Denver time,
on November 12, 1999, at such time on such other day, not later than seven full
business days after that date, as is agreed to in writing by the Company and the
Representative or as provided in Section 8 of this Agreement. The date and hour
of delivery and
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<PAGE> 11
payment for the Firm Shares is referred to in this Agreement as the "Time of
Purchase". As used in this Agreement, "business day" means a day on which the
Nasdaq National Market is open for trading and on which banks in New York and
California are open for business and not permitted by law or executive order to
be closed.
(d) If the option granted by the Company in Section 2(b) above is
exercised after 6:30 a.m., San Francisco time, on the second business day
preceding the Time of Purchase, delivery of the Option Shares and payment
therefor is to be made at the office of First Security Van Kasper Inc., 600
California Street, Suite 1700, San Francisco, California 94111, at 6:30 a.m.,
San Francisco time, on the date specified by the Representative, which shall be
four or fewer business days after the exercise of the option, but not in excess
of the period of time specified in the Rules and Regulations (such date and
time, the "Additional Time of Purchase").
(e) Payment of the purchase price for the Shares by the several
Underwriters is to be made by certified or official bank check or checks drawn
in next-day funds, payable to the order of the Company. Such payment shall be
made upon delivery of certificates for the Shares to you for the respective
accounts of the several Underwriters. Certificates for the Shares to be
delivered to you must be registered in such name or names and shall be in such
denominations as the Representative may request no later than the second
business day before the Time of Purchase, in the case of Firm Shares, and at
least one business day prior to the purchase of the Option Shares, in the case
of the Option Shares. Such certificates will be made available to the
Underwriters for inspection, checking and packaging at such location as the
Representative may request, not less than one full business day prior to the
Time of Purchase or, in the case of the Option Shares, by 3:00 p.m., New York
time, on the first business day preceding the Additional Date of Purchase. The
Representative, individually and not on behalf of the Underwriters, may (but is
not be obligated to) make payment to the Company for Shares to be purchased by
any Underwriter whose check or funds has not been received by the Representative
at the Time of Purchase or, if applicable, the Additional Time of Purchase. Any
such payment shall not relieve such Underwriter from any of its obligations
hereunder.
(f) It is understood that the several Underwriters propose to offer the
Shares for sale to the public as soon as the Representative deems it advisable
to do so. The Firm Shares are to be initially offered to the public at the
public offering price set forth (or to be set forth) in the Prospectus
Supplement/Prospectus. The Representative may from time to time thereafter
change the public offering price and other selling terms.
3. Certain Additional Agreements of the Company. The Company covenants
and agrees with the several Underwriters as set forth below:
(a) The Company will file the Prospectus
Supplement/Prospectus, properly completed (and in form and substance
reasonably satisfactory to the Underwriters) pursuant to Rule 424(b)
within the time period prescribed and in any event prior to the Time of
Purchase and will provide evidence satisfactory to the Representative
of that timely filing. The Company will not file the Prospectus
Supplement/Prospectus, any amended Prospectus Supplement/Prospectus,
any amendment (including post-effective amendments) to the Registration
Statement or any supplement to the Prospectus
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<PAGE> 12
Supplement/Prospectus without (i) advising the Representative of and, a
reasonable time prior to the proposed filing of the amendment or
supplement, furnishing the Representative with copies thereof and (ii)
obtaining the prior consent of the Representative to that filing. The
Company will prepare and file with the Commission, promptly upon the
request of the Representative, any amendment to the Registration
Statement or amendment or supplement to the Prospectus
Supplement/Prospectus that may be necessary or advisable in connection
with the distribution of the Shares by the Underwriters and use its
best efforts to cause any such amendment to become effective as
promptly as possible.
(b) The Company will promptly advise the Representative (i)
when any post-effective amendment to the Registration Statement becomes
effective, (ii) of any request by the Commission for any amendment of
or supplement to the Registration Statement or the Prospectus
Supplement/Prospectus or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (iv) of the receipt
by the Company of any notification with respect to the suspension of
the registration, qualification or exemption from registration or
qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or suspension and, if issued, to obtain the withdrawal
thereof as soon as possible.
(c) Until the Time of Purchase and, if applicable, the
Additional Time of Purchase has occurred, the Company will (i) provide
to you, two business days before the filing thereof, a copy of each
document the Company intends to file or files with the Commission that
would be incorporated in the Base Prospectus, (ii) consult with you
concerning each such document and (iii) not file any such document to
which you reasonably object.
(d) The Company will (i) on or before the Time of Purchase,
deliver to you and your counsel a signed copy of the Registration
Statement as originally filed and, promptly upon the filing thereof, a
signed copy of each post-effective amendment, if any, to the
Registration Statement (together with, in each case, all exhibits
thereto unless and to the extent previously furnished to each of you
and your counsel) and all documents filed by the Company with the
Commission under the Exchange Act and deemed to be incorporated by
reference in the Base Prospectus and will also deliver to you, for
distribution to the several Underwriters, a sufficient number of
additional conformed copies of each of the foregoing (excluding
exhibits) so that one copy of each may be distributed to each
Underwriter, (ii) as promptly as possible deliver to each of you and
send to the several Underwriters, at such office or offices as you may
designate, as many copies of the Prospectus Supplement/Prospectus as
you reasonably request and (iii) thereafter from time to time during
the period in which a prospectus is required by law to be delivered by
an Underwriter or a dealer, likewise send to the Underwriters as many
additional copies of the Prospectus Supplement/Prospectus and as many
copies of any supplement to the Prospectus Supplement/Prospectus and of
any amended Prospectus
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<PAGE> 13
Supplement/Prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities
Act.
(e) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or a dealer any event
occurs as a result of which it is necessary to supplement or amend the
Prospectus Supplement/Prospectus in order to make the Prospectus
Supplement/Prospectus not misleading or so that the Prospectus
Supplement/Prospectus will not omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
in each case at the time the Prospectus Supplement/Prospectus is
delivered to a purchaser of the Shares, or if it is necessary to amend
or to supplement the Prospectus Supplement/Prospectus to comply with
the Securities Act, the Rules and Regulations, the Exchange Act or the
Exchange Act Rules and Regulations, the Company will forthwith prepare
and file with the Commission a supplement to the Prospectus
Supplement/Prospectus or an amended Prospectus Supplement/Prospectus so
that the Prospectus Supplement/Prospectus as so supplemented or amended
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading and so that it then will otherwise
comply with the Securities Act, the Rules and Regulations, the Exchange
Act and the Exchange Act Rules and Regulations. If, after the public
offering of the Shares by the Underwriters and during such period, the
Underwriters propose to vary the terms of offering thereof by reason of
changes in general market conditions or otherwise, you will advise the
Company in writing of the proposed variation and if, in the opinion
either of counsel for the Company or counsel for the Underwriters, such
proposed variation requires that the Prospectus Supplement/ Prospectus
be supplemented or amended, the Company will forthwith prepare and file
with the Commission a supplement to the Prospectus
Supplement/Prospectus or an amended Prospectus Supplement/Prospectus
setting forth that variation. The Company authorizes the Underwriters
and all dealers to whom any of the Shares may be sold by the
Underwriters to use the Prospectus Supplement/ Prospectus, as from time
to time so amended or supplemented and for the period when a prospectus
is required to be delivered, in connection with the sale of the Shares
in accordance with the applicable provisions of the Securities Act and
the Rules and Regulations.
(f) The Company will cooperate with you and your counsel in
the qualification or registration of the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you may
designate and, if applicable, in connection with exemptions from such
qualification or registration and, during the period in which a
Prospectus Supplement/Prospectus is required by law to be delivered by
an Underwriter or a dealer, in keeping those qualifications,
registrations and exemptions in effect; provided that the Company is
not obligated to file any general consent to service of process or to
qualify to do business as a foreign corporation in any jurisdiction in
which it is not so qualified. The Company will, from time to time,
prepare and file such statements, reports and other documents as are or
may be required to continue such qualifications, registrations and
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<PAGE> 14
exemptions in effect for so long a period as you may reasonably request
for the distribution of the Shares.
(g) During a period of five years commencing with the date of
this Agreement, the Company will promptly furnish to you and to each
Underwriter who may so request in writing copies of (i) all periodic
and special reports furnished by it to its shareholders, (ii) all
information, documents and reports filed by it with the Commission, the
Nasdaq National Market, any securities exchange or the National
Association of Securities Dealers, Inc., (iii) all press releases and
material news items or articles in respect of the Company, its products
or affairs released or prepared by the Company (other than promotional
and marketing materials disseminated solely to customers and potential
customers of the Company in the ordinary course of business) and (iv)
any additional information concerning the Company or its business which
the Representative reasonably requests.
(h) As soon as practicable, but not later than the 45th day
following the end of the fiscal quarter first ending after the first
anniversary of the Effective Date, the Company will make generally
available to its securities holders and furnish to the Representative
an earning statement or statements in accordance with Section 11(a) of
the Securities Act and Rule 158.
(i) Without the prior written consent of First Security Van
Kasper Inc., the Company will not, directly or indirectly, offer, sell,
grant options to purchase or otherwise dispose of any shares of its
equity securities for 90 days following the date of this Agreement,
except that no consent is required (i) for the sale of the Shares to be
sold to the Underwriters pursuant to this Agreement and the warrants to
be sold pursuant to the Warrant Agreement, (ii) with respect to
securities issued in connection with any acquisitions, (iii) for grant
and exercises of stock options under stock option plans existing at the
date of this Agreement or options that are exercisable after that
90-day period, (iv) issuances of Common Stock on exercise of warrants
and conversion of convertible securities, in each case as are
outstanding at the date of this Agreement, and (v) issuances of Common
Stock under the Company's employee compensation plans in existence at
the date of this Agreement.
(j) The Company will apply the net proceeds from the offering
received by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus Supplement/ Prospectus.
(k) As long as the Common Stock is publicly held, the Company
will use its best efforts to, and at all times for a period of at least
five years after the date of this Agreement, unless such securities are
then listed on a national securities exchange, cause the Common Stock
(including the Shares) to be included for quotation on the Nasdaq
National Market, and the Company will comply with all registration,
filing, reporting and other requirements of the Exchange Act and the
Nasdaq National Market (or, if applicable, such national securities
exchange) which may from time to time be applicable to the Company.
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<PAGE> 15
(l) The Company will timely, and in any event prior to the
Time of Purchase, file this Agreement with the Commission with a Report
on Form 8-K.
(m) The Company will as soon as possible, and in any event
prior to the Time of Purchase, amend the Rights Agreement to clarify
that neither any Underwriter nor any two or more Underwriters taken
together have been or will be the "Beneficial Owner" and/or
"beneficially own", in each case as defined in the Rights Agreement,
any of (i) the Shares it or they had or have the right to acquire under
the Underwriting Agreement, (ii) the Shares it or they acquire under
the Underwriting Agreement or (iii) any shares of Common Stock it or
they acquire in stabilization transactions related to the distributions
or proposed distribution of the Shares contemplated by the Underwriting
Agreement.
(n) For purposes of the Rights Agreement, the Company consents
to the acquisition of shares of Common Stock by the Representative and
the Underwriters pursuant to this Agreement, the Warrant Agreement and
any other acquisitions made prior to the date of the amendment to the
Rights Agreement described in Section 3(m) above.
4. Fees and Expenses.
(a) The Company will pay and bear all costs and expenses in connection
with: the preparation, printing and filing of the Registration Statement
(including financial statements, schedules and exhibits), Preliminary Prospectus
Supplement/Prospectus and the Prospectus Supplement/Prospectus, any drafts of
each of them and any amendments or supplements to any of them; the duplication
or, if applicable, printing (including all drafts thereof) of this Agreement,
the Agreement Among Underwriters, any Selected Dealer Agreements, the Warrant
Agreement, any Preliminary Blue Sky Survey or Memorandum and any Supplemental
Blue Sky Survey or Memorandum, the Underwriters' Questionnaire and the Power of
Attorney and the duplication and printing (including of drafts thereof) of any
other underwriting documents and material (including but not limited to
marketing memoranda and other marketing material) in connection with the
offering, purchase, sale and delivery of the Shares; the issuance and delivery
of the Shares under this Agreement to the several Underwriters, including all
expenses, taxes, duties, fees and commissions on the purchase and sale of the
Shares and Nasdaq National Market brokerage and transaction levies with respect
to the purchase and, if applicable, incident to the sale and delivery of the
Shares by the Company to the several Underwriters and by the several
Underwriters to the initial purchasers thereof; the cost of printing all stock
certificates; the Transfer Agents' and Registrars' fees; the fees and
disbursements of counsel for the Company; all fees and other charges of the
Company's independent public accountants; the cost of furnishing to the several
Underwriters copies of the Registration Statement (including appropriate
exhibits), Preliminary Prospectus Supplement/Prospectus and the Prospectus
Supplement/Prospectus, the agreements and other documents and instruments
referred to above and any amendments or supplements to any of the foregoing;
NASD filing fees and the cost of qualifying or registering the Shares (or
obtaining exemptions from qualification or registration) under the securities or
Blue Sky laws of such jurisdictions as you designate (including filing fees and
the fees and costs/charges of Underwriters' counsel in connection with such
state securities or Blue Sky qualifications, registrations and exemptions); all
fees and expenses in connection
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<PAGE> 16
with qualification of the Shares for inclusion for quotation on the Nasdaq
National Market; advertising and road-show expenses; and all other expenses
incurred by the Company in connection with the performance of its obligations
under this Agreement.
(b) In addition to the Company's obligations under Section 7(a) of this
Agreement, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or, based upon any
loss, claim, damage or liability referred to in Section 7(a) of this Agreement,
the Company must reimburse or advance to or for the benefit of each of the
Underwriters, on a monthly basis (or more often, if requested), for all legal
and other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and enforceability
of the Company's obligation to reimburse or advance for the benefit of the
Underwriters for such expenses or the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any portion, or all, of any such interim reimbursement payments or
advances are so held to have been improper, the Underwriters receiving the same
must severally, and not jointly, promptly return such amounts to the Company
together with interest at the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by Bank of
America, NT&SA, San Francisco, California (the "Prime Rate"), compounded
monthly, but not in excess of the maximum rate permitted by applicable law. Any
such interim reimbursement payments or advances that are not made to or for the
Underwriters within ten days of a request for reimbursement or for an advance
will bear interest at the Prime Rate, but not in excess of the maximum rate
permitted by applicable law, from the date of such request until the date paid.
(c) In addition to its obligations under Section 7(b) of this
Agreement, each Underwriter severally and in proportion to its obligation to
purchase Firm Shares as set forth on Schedule I hereto, as an interim measure
during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any loss, claim, damage or liability
referred to in Section 7(b) of this Agreement, must reimburse or advance to or
for the benefit of the Company, on a monthly basis (or more often, if
requested), for its proportion share (as so determined) of all legal and other
expenses incurred by the Company in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety or
enforceability of the Underwriters' obligation to reimburse or advance for the
benefit of the Company for such expenses and the possibility that such payments
or advances might later be held to have been improper by a court of competent
jurisdiction. To the extent that any portion, or all, of any such interim
reimbursement payments or advances are so held to have been improper, the
Company must promptly return such amounts to each Underwriter in question
together with interest at the Prime Rate, but not in excess of the maximum rate
permitted by applicable law. Any such interim reimbursement payments or advances
that are not made to the Company within ten days of a request for reimbursement
or for an advance will bear interest at the Prime Rate, but not in excess of the
maximum rate permitted by applicable law, from the date of such request until
the date paid.
(d) Any controversy arising out of the operation of the interim
reimbursement and advance arrangements set forth in Sections 4(b) and 4(c)
above, including the amounts of any
16
<PAGE> 17
requested reimbursement payments or advance, the method of determining such
amounts and the basis on which such amounts are to be apportioned among the
indemnifying parties, will be settled by arbitration conducted under the
provisions of the Constitution and Rules of the Board of Governors of the New
York Stock Exchange, Inc. or pursuant to the Code of Arbitration Procedure of
the NASD. Any such arbitration must be commenced by service of a written demand
for arbitration or a written notice of intention to arbitrate, therein electing
the arbitration tribunal. If the party demanding arbitration does not make a
designation of an arbitration tribunal in the demand or notice, then the party
responding to the demand or notice is authorized to do so. Any such arbitration
will be limited to the interpretation and obligations of the parties under the
interim reimbursement and advance provisions contained in Sections 4(b) and 4(c)
above and will not resolve the ultimate propriety or enforceability of the
obligation to indemnify for or contribute to expenses that is created by the
provisions of Section 7 of this Agreement.
(e) If the sale of the Shares provided for herein is not completed
because any condition to the obligations of the Underwriters set forth in
Section 5 of this Agreement is not satisfied, because of any termination
pursuant to Section 9 of this Agreement, by the Company under Section 6 of this
Agreement or because of any refusal, inability or failure on the part of the
Company to perform any covenant or agreement set forth in this Agreement or to
comply with any provision of this Agreement other than by reason of a default by
any of the Underwriters, the Company must reimburse the several Underwriters
immediately upon, and in any event within two business days of, demand for all
out-of-pocket expenses (including fees and costs/charges of counsel) that have
been incurred by any or all of them in connection with investigating, preparing
to market or marketing the Shares, including without limitation in connection
with the Preliminary Prospectus Supplement/Prospectus and the Prospectus
Supplement/Prospectus, or otherwise in connection with or related to this
Agreement. Any amount payable by Company under this Section 4(e) that is not
paid when due will bear interest at the Prime Rate, but not in excess of the
maximum amount permitted by law, until paid.
5. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase and pay for the Shares is subject, in the sole
discretion of the Representative, to the accuracy as of the date of execution of
this Agreement, the Time of Purchase and the Additional Time of Purchase, as the
case may be, of the representations and warranties of the Company set forth in
this Agreement, the accuracy of the statements of the Company and its officers
made in any certificate delivered pursuant to this Agreement, the performance by
the Company of all of its obligations to be performed under this Agreement at or
prior to the Time of Purchase or the Additional Time of Purchase, as the case
may be, the satisfaction of all conditions to be satisfied or performed by the
Company at or prior to the applicable date and the following additional
conditions:
(a) If a post-effective amendment to the Registration
Statement is required to be filed pursuant to Rule 430A under the
Securities Act, that post-effective amendment must have been filed and,
not later than 5:00 p.m., New York time, on the date of this Agreement
or at such later date and time as you may approve in writing, the
Company must have provided evidence satisfactory to the Representative
of the filing and the effectiveness of that amendment, and at the Time
of Purchase and, if applicable, the Additional Time of Purchase, if
filing of the Prospectus Supplement/Prospectus, or any
17
<PAGE> 18
supplement thereto, is required pursuant to Rule 424(b), the Prospectus
Supplement/Prospectus, and any supplement thereto, will be filed in the
manner and within the time period required by Rule 424(b) and prior to
the Time of Purchase or Additional Time of Purchase, as the case may
be; no stop order suspending the effectiveness of the Registration
Statement or any qualification, registration or exemption from
qualification or registration for the sale of the Shares in any
jurisdiction may have been issued and no proceedings for that purpose
may have been instituted or threatened; and any request for additional
information on the part of the Commission must have been complied with
to the reasonable satisfaction of the Representative and its counsel.
(b) You must have received from Gibson, Dunn & Crutcher LLP,
counsel for the Underwriters, an opinion, dated the day of the Time of
Purchase, with respect to the issuance and sale of the Shares and such
other related matters as the Representative reasonably requires, and
the Company must have furnished such counsel with all documents it
requests for the purpose of enabling them to pass upon those matters.
(c) You must have received at the Time of Purchase and the
Additional Time of Purchase, as the case may be, the opinion of Cooley
Godward LLP, counsel for the Company, addressed to the Underwriters and
dated the day of the Time of Purchase or of the Additional Time of
Purchase, as applicable, with reproduced copies or signed counterparts
thereof for each of the Underwriters, covering the matters set forth in
Annex A to this Agreement and in form and substance satisfactory to
you.
(d) You must be satisfied in your sole judgment that there has
not been any material change in the market for securities in general or
in political, financial or economic conditions as to render it
impracticable in your sole judgment to make a public offering of the
Shares, or a material adverse change in market levels for securities in
general (or those of companies in particular) or financial or economic
conditions which render it inadvisable to proceed.
(e) You must have received at the Time of Purchase and the
Additional Time of Purchase, as the case may be, a certificate, dated
the day of the Time of Purchase or of the Additional Time of Purchase,
as the case may be, and signed by the Chief Executive Officer and the
Chief Financial Officer of the Company stating that:
(i) the representations and warranties of the Company set
forth in Section 1 of this Agreement are true and
correct with the same force and effect as if made at
and as of the Time of Purchase or the Additional Time
of Purchase, as applicable, and the Company has
complied with all the agreements and satisfied all
the conditions on its part to be performed or
satisfied at or prior to the Time of Purchase and the
Additional Time of Purchase, as applicable;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no
proceedings for that purpose have been instituted
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<PAGE> 19
or are pending or, to the knowledge of such persons,
threatened under the Securities Act; and
(iii) (A) each person signing the certificate has carefully
examined the Registration Statement in the form in
which it originally became effective and the
Prospectus Supplement/Prospectus and any supplements
or amendments to any of them and, as of the date of
this Agreement, the statements made in the
Registration Statement, the Preliminary Prospectus
Supplement/Prospectus and the Prospectus
Supplement/Prospectus were true and correct in all
material respects and neither the Registration
Statement nor the Prospectus Supplement/Prospectus
contained a misstatement of a material fact or
omitted to state any material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances
under which they were made, not misleading, (B) since
the date of this Agreement, no event has occurred
that should have been set forth in an amendment to
the Registration Statement or a supplement or
amendment to the Preliminary Prospectus
Supplement/Prospectus or the Prospectus Supplement/
Prospectus that has not been set forth in such an
amendment or supplement, (C) since the respective
dates as of which information is given in the
Registration Statement in the form in which it
originally became effective, the Base Prospectus and
the Prospectus Supplement/ Prospectus, there has not
been any material change or any development involving
a prospective material change in or affecting the
business, results of operations, condition (financial
or other) or prospects of the Company, whether or not
arising from transactions in the ordinary course of
business, and, since such dates, the Company has not
entered into any material transaction not referred to
in the Registration Statement in the form in which it
originally became effective, the Base Prospectus or
the Prospectus Supplement/ Prospectus, (D) there are
not any pending or, to the knowledge of each person
signing the certificate, threatened legal proceedings
to which the Company is a party or of which property
of the Company is subject which is material and which
is not disclosed in the Prospectus
Supplement/Prospectus and (E) there are not any
license agreements, contracts, leases or other
documents that are required to be filed as exhibits
to the Registration Statement that have not been
filed as required.
(f) You must have received from Arthur Andersen LLP a letter
or letters, addressed to the Underwriters and dated the Time of
Purchase and the Additional Time of Purchase, as applicable, confirming
that they are independent accountants with respect to the Company
within the meaning of the Securities Act and the applicable published
Rules and Regulations thereunder and, based upon the procedures
described in their letter, referred to below, delivered to you
concurrently with the execution of this Agreement (the "Original
Letter"), but carried out to a date not more than five business days
prior to the Time of Purchase and the Additional Time of Purchase, as
applicable, (i) confirming, to the extent true, that the statements and
conclusions set forth in the Original Letter are
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<PAGE> 20
accurate as of the day of the Time of Purchase or of the Additional
Time of Purchase, as the case may be, (ii) setting forth any revisions
and additions to the statements and conclusions set forth in the
Original Letter that are necessary to reflect any changes in the facts
described in the Original Letter since the date of the Original Letter
or to reflect the availability of more recent financial statements,
data or information and (iii) if prior to the Time of Purchase or the
Additional Time of Purchase, as applicable, the documents incorporated
in the Base Prospectus include financial statements of the Company for
the quarter ended September 30, 1999 or other financial data not so
incorporated at the date of the Prospectus Supplement/Prospectus (or,
if the Prospectus Supplement/Prospectus is not in existence at the date
of this Agreement, the most recent Preliminary Prospectus
Supplement/Prospectus), a letter reasonably satisfactory to you in form
and content with respect to (x) such financial statements, with the
procedures provided in Statement of Auditing Standards No. 71 having
been performed, and (y) such other financial data with procedures with
respect thereto acceptable to you having been performed. Such letters
must not disclose any change, or any development involving a
prospective change, in or affecting the business, results of
operations, or condition (financial or other) or prospects of the
Company which, in your sole judgment, makes it impractical or
inadvisable to proceed with the public offering of the Shares or the
purchase of the Option Shares as contemplated by the Prospectus
Supplement/Prospectus (or, if the Prospectus Supplement/Prospectus is
not in existence, the most recent Preliminary Prospectus
Supplement/Prospectus).
(g) Prior to the Time of Purchase, the Shares must have been
approved for inclusion for quotation on the Nasdaq National Market
subject to official notice of issuance.
(h) On or prior to the Time of Purchase, you must have
received from all Material Holders executed agreements covering the
matters described in Section 1(r) of this Agreement.
(i) On or prior to the Time of Purchase, the Company must have
entered into the Warrant Agreement, in form satisfactory to the
Representative; and at the Time of Purchase, concurrently with the
purchase and sale of the Firm Shares, the Company must have issued,
sold and delivered the Warrants to the Representative.
(j) The Company must have furnished to you such further
certificates and documents as you reasonably request (including
certificates of officers of the Company), as to the accuracy of the
representations and warranties of the Company set forth in this
Agreement, the performance by the Company of its obligations under this
Agreement and the other conditions concurrent and precedent to the
obligations of the Underwriters under this Agreement.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement will be in compliance with the provisions of this
Agreement only if they are reasonably satisfactory to the Representative and its
counsel. The Company must furnish you
20
<PAGE> 21
with such number of conformed copies of such opinions, certificates, letters and
documents as you reasonably request.
If any of the conditions specified in this Section 5 have not been
fulfilled in all material respects when and as provided in this Agreement, time
being of the essence, or if any of the opinions and certificates mentioned above
or elsewhere in this Agreement are not in all material respects reasonably
satisfactory in form and substance to the Representative and its counsel, this
Agreement and all obligations of the Underwriters hereunder may be canceled by
the Representative at, or at any time prior to, the Time of Purchase or, with
respect to the Option Shares, the Additional Time of Purchase, as the case may
be. Notice of such cancellation must be given to the Company in writing or by
telephone, telecopy or telegraph confirmed in writing. Any such termination
shall be without liability of the Company to the Underwriters (except as
provided in Section 4 or Section 7 of this Agreement) and without liability of
the Underwriters to the Company (except to the extent provided in Section 7 of
this Agreement).
6. Conditions of the Obligation of the Company. The obligations of the
Company to sell and deliver the Shares required to be delivered as and when
specified in this Agreement are subject to the condition that, at the Time of
Purchase or, with respect to the Option Shares, the Additional Date of Purchase,
no stop order suspending the effectiveness of the Registration Statement is in
effect and no proceedings therefor are pending or threatened by the Commission.
7. Indemnification and Contribution.
(a) The Company must indemnify and hold harmless each Underwriter and
each person (including each partner or officer thereof) who controls any
Underwriter within the meaning of Section 15 of the Securities Act from and
against any and all losses, claims, damages or liabilities, joint or several, to
which such indemnified persons or any of them may become subject under the
Securities Act, the Rules and Regulations, the Exchange Act, the Exchange Act
Rules and Regulations or other federal or state statute, law or regulation, at
common law or otherwise, specifically including but not limited to losses,
claims, damages or liabilities (or actions in respect thereof) related to
negligence on the part of any Underwriter, and the Company agrees to reimburse
each such Underwriter and controlling person for any legal or other expenses
(including, except as otherwise provided below, settlement expenses and fees and
costs/charges of counsel) incurred by the respective indemnified persons in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding that may be brought against, such respective indemnified persons, in
each case insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon, in whole or in part, (i) any
breach of any representation, warranty, covenant or agreement of the Company in
this Agreement, (ii) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including in the Base
Prospectus and the documents incorporated or to be incorporated by reference
therein) or any post-effective amendment thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, (iii) any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Prospectus
Supplement/Prospectus or the Prospectus Supplement/Prospectus, including in the
documents incorporate or
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<PAGE> 22
to be incorporated in the Base Prospectus (in each case as amended or as
supplemented if the Company has filed with the Commission any amendment thereof
or supplement thereto) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (iv) any untrue statement or alleged untrue statement of a
material fact contained in any application or other document, or any amendment
or supplement thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify or register the Shares under the securities or Blue Sky laws thereof or
to obtain an exemption from such qualification or registration or filed with the
Commission (except to the extent covered by clause (ii) and (iii) of this
sentence) or any securities association, the Nasdaq National Market or any
securities exchange, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that (A) the indemnity agreements of the Company contained
in this Section 7(a) will not apply to any such losses, claims, damages,
liabilities or expenses if such statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of any Underwriter through the Representative specifically for use in the
Registration Statement, the Preliminary Prospectus Supplement/Prospectus or the
Prospectus Supplement/Prospectus or any such amendment thereof or supplement
thereto and (B) the indemnity agreement contained in this Section 7(a) with
respect to any Preliminary Prospectus Supplement/Prospectus will not inure to
the benefit of any Underwriter from whom the person asserting any such losses,
claims, damages, liabilities or expenses purchased the Shares that are the
subject thereof (or to the benefit of any person controlling such Underwriter)
if the Company demonstrates that at or prior to the written confirmation of the
sale of such Shares a copy of the Prospectus Supplement/Prospectus (or the
Prospectus Supplement/ Prospectus as amended or supplemented) (excluding the
documents incorporated therein by reference) was not sent or delivered to such
person and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus Supplement/Prospectus was corrected in the Prospectus
Supplement/Prospectus (or the Prospectus Supplement/Prospectus as amended or
supplemented), unless the failure is the result of noncompliance by the Company
with Section 3 of this Agreement. The indemnity agreements of the Company
contained in this Section 7(a) and the representations and warranties of the
Company contained in Section 1 of this Agreement will remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any person indemnified by this Section 7(a) and will survive the delivery of and
payment for the Shares. This indemnity agreement is in addition to any
liabilities which the Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its officers who signed the Registration
Statement, each of its directors, each other Underwriter and each person
(including each partner or officer thereof) who controls the Company or any such
other Underwriter within the meaning of Section 15 of the Securities Act from
and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified persons or any of them may become subject
under the Securities Act, the Rules and Regulations, the Exchange Act, the
Exchange Act Rules and Regulations or other federal or state statute, law or
regulation or at common law or otherwise and to reimburse each of them for
22
<PAGE> 23
any legal or other expenses (including, except as otherwise provided below,
settlement expenses and fees and costs/charges of counsel) incurred by the
respective indemnified persons in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding that may be brought against, the respective
indemnified persons, in each case arising out of or based upon (i) any breach of
any representation, warranty, covenant or agreement of the indemnifying
Underwriter in this Agreement, (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (including
the Base Prospectus) or any post-effective amendment thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or (iii) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus Supplement/Prospectus or the Prospectus Supplement/Prospectus (as
amended or as supplemented if the Company has filed with the Commission any
amendment thereof or supplement thereto) or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case under clauses (ii) and (iii) above, as
the case may be, only if such statement or omission was made in reliance upon
and in conformity with information furnished in writing by or on behalf of such
indemnifying Underwriter through the Representative specifically for use in the
Registration Statement, any Preliminary Prospectus Supplement/Prospectus or the
Prospectus Supplement/Prospectus or any such amendment thereof or supplement
thereto. The Company acknowledges and agrees that the information set forth in
the last paragraph on the cover of the Preliminary Prospectus
Supplement/Prospectus and in the table under the caption "Underwriting" listing
the Underwriters and the number of Firm Shares to be purchased by each, the
paragraph following that table, and the final paragraph under the caption
"Underwriting" in the Prospectus Supplement/ Prospectus (or, if the Prospectus
Supplement/ Prospectus is not in existence, to be included therein if identical
to the comparable information in the Preliminary Prospectus
Supplement/Prospectus except for changes approved by the Representative)
constitute the only information furnished by the Underwriters to the Company for
inclusion in any Preliminary Prospectus Supplement/Prospectus, the Prospectus
Supplement/Prospectus or the Registration Statement. The indemnity agreement of
each Underwriter contained in this Section 7(b) will remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any person indemnified by this Section 7(b) and will survive the delivery of and
payment for the Shares. This indemnity agreement shall be in addition to any
liabilities which each Underwriter may otherwise have.
(c) Each person indemnified by Sections 7(a) and 7(b) above agrees,
upon the service of a summons or other initial legal process upon it in any
action or suit instituted against it or upon its receipt of written notification
of the commencement of any investigation or inquiry of, or proceeding against,
it in respect of which indemnity may be sought and if a claim in respect
thereunder is to be made against the indemnifying persons under this Section 7,
to promptly give written notice (the "Notice") of the service or notification to
the person from whom indemnification may be sought under this Agreement. No
indemnification under Sections 7(a) or 7(b) above or, contribution under Section
7(e) below, will be available to any person who fails to so give the Notice if
the person to whom the Notice was not given was unaware of the action,
23
<PAGE> 24
suit, investigation, inquiry or proceeding to which the Notice would have
related, but only to the extent that person demonstrates it was materially
prejudiced by the failure to receive the Notice, and the omission so to notify
the indemnifying person will not relieve it or any other person from any
liability which either may have to the indemnified person or persons other than
under Sections 7(a), 7(b) or 7(e).
(d) Any indemnifying person will be entitled at its own expense to
participate in the defense of any action, suit or proceeding against, or
investigation or inquiry of, an indemnified person. Any indemnifying person will
be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (the "Notice of Defense") to the indemnified
person, to assume (alone or in conjunction with any other indemnifying person or
persons) the entire defense of the action, suit, investigation, inquiry or
proceeding, in which event the defense will be conducted, at the expense of the
indemnifying person or persons, by counsel chosen by such indemnifying person or
persons and reasonably satisfactory to the indemnified person or persons;
provided that if the indemnified person or persons reasonably determine that
there may be a conflict between the positions of the indemnifying person or
persons and the indemnified person or persons in conducting the defense of the
action, suit, investigation, inquiry or proceeding or that there may be legal
defenses or rights available to the indemnified person or persons different from
or in addition to those available to the indemnifying person or persons, then
separate counsel for and selected by the indemnified person or persons will be
entitled to conduct the defense of the indemnified person or persons at the
expense of the indemnifying person or persons; and provided further that the
indemnifying person or persons will not be liable for the fees and expenses of
more than one separate counsel, reasonably approved by the indemnifying person
or persons, for all of the indemnified persons, plus, if applicable, local
counsel in each jurisdiction. In addition, in any event, the indemnified person
or persons will be entitled to have counsel selected by such indemnified person
or persons participate in, but not conduct, the defense. If, within a reasonable
time after receipt of the Notice, an indemnifying person gives a Notice of
Defense and, unless separate counsel is to be chosen by the indemnified person
or persons as provided above or the counsel chosen by the indemnifying person or
persons is not reasonably satisfactory to the indemnified person or persons, the
indemnifying person or persons will not be liable under Sections 7(a) above
through this Section 7(d) for any legal expenses subsequently incurred by the
indemnified person or persons in connection with the defense of the action,
suit, investigation, inquiry or proceeding, except that (A) the indemnifying
persons or person must bear and pay the legal and other expenses incurred in
connection with the conduct of the defense as referred to in the "provided"
clause in the preceding sentence and (B) the indemnifying person or persons must
bear and pay such other expenses as it or they have authorized to be incurred by
the indemnified person or persons. If, within a reasonable time after receipt of
the Notice, no Notice of Defense has been given, the indemnifying person or
persons will be responsible for any legal or other expenses incurred by the
indemnified person or persons in connection with the defense of the action,
suit, investigation, inquiry or proceeding.
(e) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section 7
but is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right to appeal) that such indemnification may not be
enforced in the case notwithstanding that this Section 7 provides for
indemnification in that case, each
24
<PAGE> 25
indemnifying person must contribute to the amount paid or payable by such
indemnified person as a result of the losses, claims, damages, liabilities and
expenses referred to in Section 7(a) or 7(b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by each indemnifying
person from the offering of the Shares or (ii) if the allocation provided by
clause (i) of this sentence is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in that clause (i) but also the relative fault of each person in connection
with the statements, omissions or other matters that resulted in the losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriters will be deemed to be in the same respective proportions as the
total proceeds from the offering of the Shares, net of the underwriting
discounts, received by the Company and the total underwriting discount retained
by the Underwriters bear to the aggregate public offering price of the Shares.
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 a
party and the party's relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7(e) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the considerations referred to in the first paragraph of this Section 7(e). The
amount paid by an indemnified person as a result of the losses, claims, damages
or liabilities, referred to in the first sentence of this Section 7(e) will be
deemed to include any legal or other expenses reasonably incurred by that
indemnified person in connection with investigating, preparing to defend or
defending against any action or claim which is the subject of this Section 7(e).
Notwithstanding the provisions of this Section 7(e), no Underwriter will be
required to contribute any amount in excess of the underwriting discount
applicable to the Shares purchased by that Underwriter. For purposes of this
Section 7(e), each person who controls an Underwriter within the meaning of the
Securities Act will have the same rights to contribution as the Underwriter, and
each person who controls the Company within the meaning of the Securities Act,
each officer of the Company who signed the Registration Statement and each
director of the Company will have the same rights to contribution as the
Company, subject in each case to the immediately preceding sentence and the
immediately following two sentences. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute in
this Section 7(e) are several in proportion to their respective underwriting
obligations and not joint.
(f) The Company may not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought under this Section 7 (whether or
not the Underwriter or any person who controls such Underwriter within the
meaning of Section 15 of the Securities Act is a party to such claim, action,
suit or proceeding), unless the settlement, compromise or consent includes an
unconditional release of each the Underwriter and each such controlling person
from all liability arising out of the claim, action, suit or proceeding.
25
<PAGE> 26
(g) No Underwriter may, without the consent of the Company, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the Company is a party to
such claim, action, suit or proceeding), which consent shall not be unreasonably
withheld, unless such settlement, compromise or consent includes an
unconditional release of the Company, each of its officers who signed the
Registration Statement, each of its directors and each person who controls the
Company within the meaning of Section 15 of the Securities Act from all
liability arising out of such claim, action, suit or proceeding.
(h) The parties to this Agreement acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding this Agreement including, without limitation, Sections
4(b) and 4(c) of this Agreement and this Section 7 and that they are fully
informed regarding all such provisions. They further acknowledge that Sections
4(b) and 4(c) and this Section 7 fairly allocate the risks in light of the
ability of the parties to investigate the Company and its business in order to
assure that adequate disclosure is made in the Registration Statement, the
Preliminary Prospectus Supplement/Prospectus and the Prospectus
Supplement/Prospectus as required by the Securities Act, the Rules and
Regulations, the Exchange Act and the Exchange Act Rules and Regulations. The
parties are aware that federal or state policy, as interpreted by the courts in
certain jurisdictions, may be contrary to certain provisions of Sections 4(b)
and 4(c) and this Section 7 and, to the extent permitted by law, the parties
hereby expressly waive and relinquish any right or ability to assert that public
policy as a defense to a claim under Sections 4(b) or 4(c) or this Section 7 and
further agree not to attempt to assert any such defense.
(i) As used in this Agreement, the word "persons" includes individuals
and entities and the word "it" includes individuals (including without
limitation corporations, partnerships and limited liability companies).
(j) If any payment required to be made under this Section 7 is not made
within two business days after demand, the amount due will bear interest at the
Prime Rate, compounded monthly, but not in excess of the maximum rate permitted
by applicable law.
8. Substitution of Underwriters. If for any reason one or more of the
Underwriters fails or refuses (otherwise than for a reason sufficient to justify
the termination of this Agreement under Sections 5 or 9 of this Agreement) to
purchase and pay for the number of Firm Shares agreed to be purchased by such
Underwriter or Underwriters, the Company must immediately give notice thereof to
the Representative, in which event the non-defaulting Underwriters will have the
right within 24 hours after the receipt by the Representative of that notice to
purchase, or procure one or more other Underwriters to purchase, in such
proportions as may be agreed between the Representative and such purchasing
Underwriter or Underwriters and upon the terms set forth herein, all or any part
of the Firm Shares that the defaulting Underwriter or Underwriters agreed to
purchase. If the non-defaulting Underwriters fail to make such arrangements with
respect to all such Shares, the number of Firm Shares that each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement will
automatically be increased on a pro rata basis to absorb the remaining Shares
that the defaulting Underwriter or Underwriters agreed
26
<PAGE> 27
to purchase; provided, that the non-defaulting Underwriters will not be
obligated to purchase the Shares that the defaulting Underwriter or Underwriters
agreed to purchase if the aggregate number of such Shares exceeds ten percent of
the total number of Firm Shares. If the total number of Firm Shares that the
defaulting Underwriter or Underwriters agreed to purchase will not be purchased
or absorbed in accordance with the two immediately preceding sentences, the
Company will have the right, within 24 hours next succeeding the first 24-hour
period referred to above, to make arrangements with other underwriters or
purchasers satisfactory to you for purchase of those Shares on the terms set
forth in this Agreement. In any such case, either you or the Company will have
the right to postpone the Time of Purchase determined as provided in Section
2(c) of this Agreement for not more than seven business days after the Time of
Purchase initially fixed pursuant to Section 2(c) in order that any necessary
changes in the Registration Statement, the Preliminary Prospectus
Supplement/Prospectus, the Prospectus Supplement/Prospectus or any other
documents or arrangements may be made.
If neither the non-defaulting Underwriters nor the Company makes
arrangements within the time periods provided in the first three sentences of
the first paragraph of this Section 8 for the purchase of all the Firm Shares
the defaulting Underwriter or Underwriters agreed to purchase, then this
Agreement will be terminated without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter (except
as provided in Sections 4 or 7 of this Agreement) and without any liability on
the part of any non-defaulting Underwriter to the Company (except to the extent
provided in Section 7 of this Agreement). Nothing in this Section 8, and no
action taken hereunder, will relieve any defaulting Underwriter from liability,
if any, to the Company or any non-defaulting Underwriter for damages occasioned
by its default under this Agreement. The term "Underwriter" in this Agreement
shall include any persons substituted for an Underwriter under this Section 8.
9. Effective Date of Agreement and Termination. This Agreement will
become effective upon execution and delivery by you and the Company. This
Agreement may be terminated by you in your absolute discretion by giving written
notice to the Company at any time on or prior to the Time of Purchase or, with
respect to the purchase of the Option Shares, on or prior to the Additional Time
of Purchase, as the case may be, if prior to such time any of the following has
occurred or, in your opinion, is likely to occur: (i) after the respective dates
as of which information is given in the Registration Statement and the
Prospectus Supplement/Prospectus (or, if the Prospectus Supplement/Prospectus
is not in existence, the most recent Preliminary Prospectus
Supplement/Prospectus), any material adverse change or development involving a
prospective material adverse change in or affecting particularly the business,
results of operations, condition (financial or other), or prospects of the
Company, whether or not arising in the ordinary course of business, occurs which
would, in your sole judgment, make the offering or the delivery of the Shares
impracticable or inadvisable; (ii) if, on or after the date of this Agreement,
there has been (x) the engagement in hostilities or an escalation of major
hostilities by the United States or the declaration of war or a national
emergency by the United States or (y) any outbreak of hostilities or other
national or international calamity or crisis or change in economic or political
conditions, if the effect of such outbreak, calamity, crisis or change in
economic or political conditions referred to in this clause (ii)(y) on the
financial markets of the United States would, in your sole judgment, make the
offering or delivery of the Shares impracticable or inadvisable; (iii) if there
has been a suspension of trading in securities generally
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<PAGE> 28
or a material adverse decline in value of securities generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market or
limitations on prices (other than limitations on hours or numbers of days of
trading) for securities on either such exchange or system; (iv) if there has
been the enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of, or commencement of any proceeding
or investigation by, any court, legislative body, agency or other governmental
authority which in your sole judgment materially and adversely affects or may
materially and adversely affect the business, results of operations, condition
(financial or other) or prospects of the Company; (v) if there has been the
declaration of a banking moratorium by federal, New York or California state
authorities; (vi) if there has been any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
sole judgment has a material adverse effect on the securities markets in the
United States or makes the offering or delivery of the shares impractical or
inadvisable; or (vii) existing international monetary conditions have undergone
a material change which, in your sole judgment, makes the offering or delivery
of the Shares impracticable or inadvisable. If this Agreement is terminated
pursuant to this Section 9, there will be no liability of the Company to the
Underwriters (except pursuant to Section 4 and Section 7 of this Agreement) and
no liability of the Underwriters to the Company (except to the extent provided
in Section 7 of this Agreement).
10. Notices. Except as may otherwise be provided this Agreement, all
communications under this Agreement are to be in writing and mailed, telecopied
or telegraphed or delivered if to (i) the Underwriters or the Representative, to
First Security Van Kasper Inc., 600 California Street, Suite 1700, San
Francisco, California 94111, Attention: Syndicate Manager (telecopier: (415)
954-8335) and (ii) the Company, to it at 4403 Table Mountain Drive, Golden,
Colorado 80404 (telecopier: (303) 215-2500) Attention: President. All notices
given by telecopy or telegraph are to be promptly confirmed by letter.
11. Persons Entitled to the Benefit of this Agreement. This Agreement
will inure to the benefit of (i) the Company and the several Underwriters, (ii)
with respect to Sections 4 and 7 of this Agreement, the several persons (in
addition to the Company and the several Underwriters) indemnified under Sections
4 and 7 and (iii) in each case their respective personal representatives,
successors and assigns. Nothing in this Agreement is intended or may be
construed to give to any other person any legal or equitable remedy or claim
under or in respect of this Agreement. The term "successors and assigns" as
herein used does not include any purchaser, as such, of any of the Shares from
the several Underwriters.
12. General. Notwithstanding any provision of this Agreement to the
contrary, the reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties, covenants and
agreements in this Agreement will remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter, any controlling person thereof, the Company or the
respective directors or officers of each of them and (c) delivery and payment
for the Shares under this Agreement; provided that if this Agreement is
terminated prior to the Time of Purchase, Sections 3, (g), (h), (i), (j), and
(k) of this Agreement will be of no further force or effect.
28
<PAGE> 29
This Agreement may be executed in two or more counterparts, each of
which will constitute an original, but all of which together will constitute one
and the same instrument, and may be delivered by facsimile transmission of
signature and, if applicable, other pages.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS, AND NOT THE LAWS PERTAINING TO CHOICE OR CONFLICT OF LAWS, OF THE
STATE OF NEW YORK IN ACCORDANCE WITH AND AS IS SPECIFICALLY PROVIDED FOR IN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT AMONG THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY PRIOR WRITTEN OR ORAL
AND ANY CONTEMPORANEOUS ORAL AGREEMENTS AND ALL NEGOTIATIONS WITH RESPECT
THERETO.
13. Authority of the Representative. In connection with this Agreement,
the Representative will act for and on behalf of the several Underwriters, and
any action taken under this Agreement by the Representative, as representative
of the several Underwriters, will be binding on all the Underwriters.
29
<PAGE> 30
If the foregoing correctly sets forth your understanding, please so
indicate by signing in the space provided below for that purpose, whereupon this
letter will constitute a binding agreement among the Company and the several
Underwriters.
Very truly yours,
BOLDER TECHNOLOGIES CORPORATION
By: /s/ Roger Warren
----------------------------------------
Confirmed as of the date first above
mentioned as an Underwriter and as
Representative of the several Underwriters
and on behalf of the other several
Underwriters named in Schedule I hereto.
FIRST SECURITY VAN KASPER INC.
By: /s/ Bruce P. Emmeluth
-------------------------------------
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<PAGE> 31
SCHEDULE I
UNDERWRITERS
<TABLE>
<CAPTION>
Underwriter Number of Firm Shares to be Purchased
- ----------- -------------------------------------
<S> <C>
First Security Van Kasper 1,310,000
CIBC Oppenheimer Corporation 75,000
Dain Rauscher Wessels 75,000
A.G. Edwards & Sons, Inc. 75,000
Hambrecht & Quist LLC 75,000
PaineWebber Incorporated 75,000
S.G. Cowen Securities Corporation 75,000
Advest, Inc. 40,000
D.A.Davidson & Co. 40,000
L.H. Friend, Weinress, Frankson & Presson, Inc. 40,000
Hanifen, Imhoff, Inc. 40,000
John G. Kinnard & Company, Incorporated 40,000
Kirkpatrick, Pettis, Smith, Polian Inc. 40,000
Morgan Keegan & Company, Inc. 40,000
Sanders Morris Mundy 40,000
Schneider Securities, Inc. 40,000
Sutro & Company, Incorporated 40,000
Wedbush Morgan Securities Inc. 40,000
----------
Total 2,200,000
=========
</TABLE>
I-1
<PAGE> 32
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF COUNSEL FOR THE COMPANY
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Delaware;
(ii) The Company has the corporate power to own, lease and operate
its properties and to conduct its business as described in the
Prospectus Supplement/Prospectus;
(iii) The Company is duly qualified to do business as a foreign
corporation and is in good standing in all jurisdictions in
the United States, if any, in which the ownership or leasing
of its properties or the conduct of its business requires such
qualification, except where the failure so to qualify would
not have a material adverse effect on the business, results of
operations, condition (financial or other) or prospects of the
Company;
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus
Supplement/Prospectus as of the dates stated therein; the
issued and outstanding shares of capital stock of the Company
have been duly and validly authorized and issued, are fully
paid and nonassessable;
(v) The Shares, upon issuance and delivery against payment
therefor in accordance with the Agreement, will be duly
authorized, validly issued, fully paid and nonassessable and,
to the knowledge of such counsel, will not have been issued in
violation of any preemptive right or other rights to subscribe
for or purchase securities;
(vi) The Company has corporate power and authority to enter into
the Agreement and to issue, sell and deliver to the
Underwriters the Shares to be sold by it;
(vii) The Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly
executed and delivered by the Company and, assuming its due
authorization, execution and delivery by you, is the valid and
binding agreement of the Company, enforceable against the
Company in accordance with its terms, except insofar as the
indemnification and contribution provisions of the Agreement
may be limited by public policy concerns and except insofar as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally or by general equitable
principles;
(viii) The Registration Statement has become effective under the
Securities Act and, to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or threatened under the
Securities Act;
A-1
<PAGE> 33
(ix) The Registration Statement and the Prospectus
Supplement/Prospectus (including in each case the Base
Prospectus and the documents incorporated by reference
therein), and each amendment thereof or supplement thereto
(other than the financial statements and schedules and related
notes included therein, as to which such counsel need express
no opinion), as of the effective date of the Registration
Statement and the date of the Prospectus
Supplement/Prospectus, complied as to form in all material
respects with the requirements of the Securities Act, the
Rules and Regulations, the Exchange Act and the Exchange Act
Rules and Regulations;
(x) The terms and provisions of the capital stock of the Company
(including the Rights) conform in all material respects to the
description thereof contained in the Registration Statement
and Prospectus Supplement/Prospectus, the information in the
Prospectus Supplement/Prospectus under the captions
"Description of Common Stock" and "Description of Preferred
Stock" to the extent they constitute matters of law or legal
conclusions, has been reviewed by such counsel and is correct
and the forms of certificates evidencing the Common Stock
comply with Delaware law;
(xi) The description in the Registration Statement and the
Prospectus Supplement/Prospectus (including in each case the
Base Prospectus and the documents incorporated by reference
therein) of the Certificate of Incorporation and bylaws of the
Company and of statutes and contracts are accurate in all
material respects and fairly present in all material respects
the information required to be presented by the Securities
Act, the Rules and Regulations, the Exchange Act and the
Exchange Act Rules and Regulations;
(xii) To the knowledge of such counsel, there are no agreements,
contracts, licenses, leases or documents of a character
required to be described or referred to in the Registration
Statement or Prospectus Supplement/Prospectus or to be filed
as an exhibit to the Registration Statement that are not
described or referred to therein and filed as required;
(xiii) The performance by the Company of its obligations under the
Agreement and the Warrant Agreement and the completion of the
transactions contemplated by each of them will not violate or
result in the breach of or a default under (including without
limitation with the giving of notice, the passage of time or
otherwise) the Company's Certificate of Incorporation, bylaws
or other governing documents or any evidence of indebtedness,
contract, license, joint venture or other agreement or
instrument known to such counsel to which the Company is a
party or by which it or any of its properties are bound, any
law, ordinance, rule or regulation or, to the knowledge of
such counsel, any order, writ, injunction, judgment or decree
of any governmental agency or body or of any court having
jurisdiction over the Company or any of its properties;
provided that no opinion need be rendered concerning state
securities or Blue Sky laws or the Company's indemnification
and contribution obligations under the Agreement and the
Warrant Agreement;
A-2
<PAGE> 34
(xiv) No authorization, approval or consent of any governmental
authority or agency is necessary in connection with the
completion of the transactions contemplated by the Agreement
or the Warrant Agreement, except such as have been obtained
under the Securities Act, are necessary in connection with the
registration of the shares of Common Stock issuable upon
exercise of the Warrants (the "Warrant Shares") or as may be
required under state securities or Blue Sky laws in connection
with the purchase and the distribution of the Shares by the
Underwriters or the registration and sale of the Warrant
Shares;
(xv) To the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened against the
Company of a character which are required to be disclosed in
the Registration Statement or the Prospectus
Supplement/Prospectus (in each case including the Base
Prospectus and the documents incorporated by reference
therein) by the Securities Act, the Rules and Regulations, the
Exchange Act or the Exchange Act Rules and Regulations, other
than those described therein;
(xvi) To the knowledge of such counsel, no holders of securities
issued by the Company has registration rights, other than
those that have been waived, with respect to the Registration
Statement or the offering and sale of the Shares being made
pursuant to the Registration Statement and the Prospectus
Supplement/Prospectus;
(xvii) Columbine Venture Fund II, L.P. and funds managed by Patricof
& Co. Ventures, Inc. (including its and their Affiliates and
Associates) are not, and have never been, an "Acquiring
Person" under the Rights Agreement.
Under the Rights Agreement, neither any
Underwriter nor any two or more Underwriters taken together
have been or will be the "Beneficial Owner" and/or
"beneficially own", in each case as defined in the Rights
Agreement, any of (i) the Shares it or they had or have the
right to acquire under the Underwriting Agreement, (ii) the
Shares it or they acquire under the Underwriting Agreement or
(iii) any shares of Common Stock it or they acquire in
stabilization transactions related to the distribution or
proposed distribution of the Shares contemplated by the
Underwriting Agreement.
(xviii) The Warrant Agreement has been duly authorized by all
necessary corporate action of the Company and has been duly
executed and delivered by the Company and, assuming due
authorization, execution and delivery by First Security Van
Kasper Inc., is the valid and binding agreement of the
Company, enforceable against the Company in accordance with
its terms, except insofar as the indemnification and
contribution provisions of the Warrant Agreement may be
limited by public policy concerns and except as enforceability
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights
generally or by general equitable principles; and
A-3
<PAGE> 35
(xix) The Warrants have been duly and validly authorized and
constitute valid and binding obligations of the Company
enforceable in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally or by general equitable
principles; the Warrant Shares have been duly and validly
authorized for issuance upon exercise of the Warrants against
payment therefor as provided in the Warrant Agreement
(including, as provided in the Warrant Agreement, by surrender
of Warrants) and, when so issued, will be validly issued,
fully paid and nonassessable; and to the knowledge of such
counsel, no shareholder has any preemptive rights or other
rights to subscribe for or purchase with respect to the
Warrants or the Warrant Shares;
In addition, such counsel shall state that such counsel has in
connection with the preparation of the Registration Statement, and the
Prospectus Supplement/Prospectus, participated in conferences with officers and
representatives of the Company and with its independent public accountants (as
you and your counsel have done). At such conferences such counsel has made
inquiries of such officers, representatives and accountants and discussed the
contents of the Registration Statement and the Prospectus Supplement/Prospectus.
Such counsel has not independently verified and, accordingly does not render any
opinion upon, the accuracy, completeness or fairness of the Registration
Statement and the Prospectus Supplement/Prospectus (except to the extent
provided in paragraph (ix) and paragraph (x). Subject to the foregoing, no facts
have come to such counsel's attention that have caused them to believe that, as
of its effective date, the Registration Statement contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that, as
of its date or the date hereof, the Prospectus Supplement/Prospectus contained
or contains an untrue statement of a material fact or omitted or omits to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided that such counsel need not express any view as to the
financial statements and schedules, related notes, other financial data and
statistical data derived therefrom included in, or incorporated by reference
into, the Registration Statement and the Prospectus Supplement/Prospectus
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or the State of Colorado on opinions
of local counsel (provided that such counsel states that they believe they and
the Underwriters are justified in relying thereon), may assume that with respect
to the opinion regarding enforceability in paragraphs (vii) and (xviii) that the
laws of New York are identical to the laws of Colorado and, as to questions of
fact, upon representations or certificates of officers of the Company and
government officials, in which case their opinion must to state that they are so
relying thereon and that they have no knowledge of any material misstatement or
inaccuracy in such opinions, representations or certificate. Copies of any
opinion, representation or certificate so relied upon shall be delivered to you,
as Representative of the Underwriters, and to Underwriters' counsel.
A-4
<PAGE> 1
EXHIBIT 4.1
WARRANT AGREEMENT
November 8, 1999
First Security Van Kasper Inc.
600 California Street, Suite 1700
San Francisco, California 94111
Ladies and Gentlemen:
BOLDER Technologies Corporation, a Delaware corporation (the
"Company"), agrees, on the terms and subject to the conditions of this Warrant
Agreement (this "Agreement"), to sell and deliver to First Security Van Kasper
Inc. (the "Purchaser") "Warrants" (defined below) to purchase 66,000 shares of
the "Common Stock" (defined below). The Purchaser agrees, on the terms and
subject to the conditions of this Agreement, to purchase the Warrants from the
Company.
Each of the Warrants will be exercisable by the "Holder" (defined
below), as to all or any lesser number of shares of the Common Stock covered by
the Holder's Warrants, at the "Exercise Price" (defined below), at any time and
from time to time beginning at 9:00 a.m., San Francisco time, on the day that
begins one year after the day of the "Time of Purchase" (defined below) and
ending at 5:00 p.m., San Francisco time, on the day that is five years after the
date of this Agreement. The Warrants will be evidenced by instruments in the
form of Exhibit A hereto (those instruments and all instruments issued after the
date hereof in replacement thereof are referred to below as the "Warrants").
The purchase price of the Warrants is $0.01 (one cent) for each share
of Common Stock purchasable on exercise of the Warrants. The delivery of the
Warrants and payment of the purchase price of the Warrants are to be made at the
Time of Purchase and at the offices of First Security Van Kasper Inc. at 600
California Street, Suite 1700, San Francisco, California, or such other time and
place as may be agreed upon between the Company and the Purchaser (the date of
purchase of the Warrants is referred to as the "Closing Time").
1. Definitions. The following defined terms are used in this
Agreement:
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Common Stock, $0.001 par value per
share, of the Company, the associated Rights or any other rights (in
each case if and to the extent in existence at each time Warrants are
exercised) and all other shares of any class or classes (however
designated) of the common equity of the Company, now or hereafter
authorized, the holders of which (i) by operation of law have the
right, without limitation
<PAGE> 2
as to amount, either to all or to a part of the balance of current
dividends and liquidating dividends and distributions after the payment
of dividends and distributions on any shares entitled to preference and
(ii) ordinarily, in the absence of contingency, are entitled to vote
for the election of the directors of the Company (even though the right
so to vote has been suspended by the occurrence of such a contingency),
other than those directors of the Company (constituting a portion of
the Board of Directors) who, pursuant to the Certificate of
Incorporation or other charter documents of the Company, are then to be
elected by a designated class or series of the capital stock of the
Company.
"Common Stock Outstanding" means the aggregate of all Common
Stock outstanding plus all Common Stock issuable upon exercise of all
outstanding Options and stock purchase warrants (other than the
Warrants) and conversion of all outstanding Convertible Securities.
"Convertible Securities" means any indebtedness, shares of
stock or other rights granted by the Company (other than Options)
convertible into or exchangeable for Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934 or
successor law, in each case as amended from time to time.
"Exercise Price" means the per share purchase price of the
Warrant Shares that may be purchased pursuant to this Warrant
Agreement. The Exercise Price is initially $9.25 per share, subject to
adjustment as provided in Section 6 below.
"Holder", when used with respect to the Warrants or the
Warrant Shares, means the person registered on the books and records of
the Company as being the holder of record of the Warrants or the
Warrant Shares, as the case may be; provided that so long as the
Purchaser holds of record any Warrants or Warrant Shares, it must be
included in the definition of "Holder"; and provided further that,
unless otherwise provided in this Agreement, any action to be taken or
approval to be given by the Holders will require the action by, or
approval of, the Holder or Holders of at least that number issued
Warrant Shares which in the aggregate constitute a majority of all
Warrant Shares issued or issuable under this Agreement. Shares of
Common Stock acquired on exercise of Warrants, which shares have been
sold pursuant to a registration statement or Rule 144 or otherwise to a
member of the public who is free to resell them without registration
under the Securities Act or pursuant to Rule 144, will no longer be a
Warrant Shares for the purposes of this Agreement.
"Options" means any warrants, options or, without
limitation, other rights granted by the Company to purchase Common
Stock or Convertible Securities.
"Other Securities" means any stock (other than Common Stock)
and other securities of the Company or any other person (corporate or
other) which the Holders of the Warrants at any time are entitled to
receive, or have received, upon the exercise of the Warrants, in lieu
of or in addition to Common Stock, or which at any time is issuable or
2
<PAGE> 3
has been issued in exchange for or in replacement of Common Stock or
Other Securities, whether pursuant to Section 6 below or otherwise.
"Prospectus Supplement/Prospectus" means the Prospectus
Supplement dated November 8, 1999 to the Prospectus dated September 17,
1999 of the Company and that Prospectus, as amended or supplemented
from time to time after the date hereof.
"Rules and Regulations" means the Rules and Regulations
adopted by the Commission under the Securities Act.
"Rule 144" means Rule 144 of the Rules and Regulations or
successor law, in each case as amended from time to time.
"Securities Act" means the Securities Act of 1933 or
successor law, in each case as amended from time to time.
"Time of Purchase" has the meaning given to that term in the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement
dated the same date as this Agreement among the Company, the Purchaser,
in its capacity as an Underwriter and as Representative of the
Underwriters, and those other Underwriters (as those terms are defined
in the Underwriting Agreement).
"Warrant Shares" means the shares of Common Stock (or Other
Securities) issued or issuable upon the exercise, in whole or in part,
of any of the Warrants.
2.1 Representations and Warranties. The Company represents and
warrants to the Purchaser as follows:
(a) The Warrant Shares (i) are duly authorized under the
Company's Certificate of Incorporation, (ii) have been duly and validly
authorized to be issued and adequately reserved by the Board of
Directors of the Company, (iii) will, when issued and delivered to the
Holders pursuant to this Agreement, be duly and validly issued, fully
paid and non-assessable and (iv) and will be approved for inclusion,
when issued, in the Nasdaq National Market. The issuance of the Warrant
Shares by the Company is not subject to any preemptive or similar
rights.
(b) All representations and warranties made by the Company
in Section 1 of the Underwriting Agreement (x) are incorporated in this
Agreement as if set forth in full herein and (y) are and at and as of
the Closing Time will be true and correct as if made anew at the
Closing Time.
2.2 Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Company that (i) it has all requisite power
(corporate authority and other) and has taken all necessary corporate action to
enter into and perform its obligations under this
3
<PAGE> 4
Agreement and (ii) this Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and binding agreement, enforceable
against it in accordance with its terms, except insofar as (x) such
enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
generally or by general equitable considerations and (y) Section 3(f) of this
Agreement may be affected by public policy concerns.
3. Compliance with the Securities Act.
(a) The Purchaser agrees that the Warrants may not be transferred,
sold, assigned, pledged or hypothecated except: (i) to its successors in a
merger or consolidation or other business combination; (ii) to purchasers of all
or substantially all of its assets; (iii) to any officers or partners of the
Purchaser; (iv) by operation of law; or (v) as permitted below in this Section
3. The Purchaser further agrees that the Company has no obligation to effect any
transfer of the Warrants for one year after the date of this Agreement, unless
the transferee, purchaser, assignee or pledgee, as the case may be, has executed
an agreement obligating the transferee to comply with all terms and conditions
of this Warrant Agreement applicable to the transferor.
(b) Except as otherwise provided in this Section 3(b), each
certificate for Warrant Shares initially issued on the exercise of any Warrants
may bear the following legend.
"The Shares represented by this certificate are subject to a
Warrant Agreement, dated in November 1999, between BOLDER
Technologies Corporation and First Security Van Kasper Inc.
Except to the extent permitted by the Warrant Agreement, no
transfer, sale, pledge or other disposition of the shares
represented by this certificate will be valid or effective
until registered under the Securities Act of 1933, as amended
(or, if applicable, a successor law thereto) or the Company
has been advised by an opinion of counsel that those shares
will be transferred in a transaction exempt from such
registration and until any applicable conditions contained in
the Warrant Agreement have been fulfilled. A copy of the
Warrant Agreement is on file at the offices of BOLDER
Technologies Corporation. The holder of this certificate, by
acceptance of this certificate, agrees to be bound by the
provisions of the Warrant Agreement."
Prior to any transfer, sale, pledge or other disposition (each, a
"Transfer") of any Warrant Shares, the Holder of those Warrant Shares must (a)
give three business days prior written notice (a "Transfer Notice") to the
Company of the Holder's intention to effect the Transfer, generally describing
the manner and circumstances of the proposed Transfer, and (b) obtain from
counsel to the Holder (who may be in-house counsel regularly employed by the
Holder) and deliver to the Company an opinion reasonably satisfactory to the
Company that the proposed Transfer of those Warrant Shares may be effected
without registration under the Securities Act. Each certificate evidencing such
Warrant Shares issued upon a Transfer will bear the restrictive legend set forth
above in this Section 3 (b), unless in the opinion of such counsel to the
Holder, which opinion is reasonably satisfactory to the Company, that legend is
not required in order to ensure compliance with the Securities Act.
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<PAGE> 5
Notwithstanding the foregoing provisions of this Section 3(b), the
restrictions imposed by the first two paragraphs of this Section on the
transferability of the Warrant Shares and the legend requirements in the first
paragraph of this Section 3(b) will terminate as to any particular Warrant
Shares (x) when and so long as the transfer, sale, pledge, or other disposition
thereof is registered under the Securities Act or (y) when the Holder or Holders
of any Warrants or Warrant Shares has delivered to the Company an opinion of
counsel to such Holder or Holders (which may be in-house counsel regularly
employed by the Holder(s)), which opinion is reasonably satisfactory to the
Company, stating that the legend is not required for compliance with the
Securities Act. Whenever the restrictions imposed by this Section 3(b) terminate
as to any Warrant Shares, as provided above, the Holder thereof will be entitled
to receive from the Company, at the Company's expense, a new certificate
representing those Warrant Shares not bearing the restrictive legend set forth
in the first paragraph of this Section 3(b).
(c) At any time after the day that begins one year from the Closing
Time and on or before the end of the day that is five years after the date of
this Agreement, upon written, telegraphic or telecopied notice, or upon
telephonic notice followed as soon as practicable by written confirmation
thereof, from any Holder or Holders (the "Requesting Holders") of that number of
Warrant Shares which in the aggregate constitute a majority of all Warrant
Shares issued or issuable under this Agreement that such Holder or Holders
request the registration under the Securities Act of any of the Warrant Shares,
the Company must (i) immediately give notice to the other Holders and afford
them the opportunity to participate in the registration statement and (ii) as
promptly as possible after the receipt of such notice from the Requesting
Holders, but in any event within 30 days of the receipt of such notice, and
solely at the Company's cost and expense, file a registration statement with
respect to the offering and sale or other disposition of the Warrant Shares with
respect to which it has received that notice and which other Holders request be
included in that registration statement. The registration statement may, if the
Company satisfies the applicable requirements, be on Form S-3. If a registration
requested pursuant to this Section 3(c) is an underwritten registration, the
Company and other holders of securities of the Company may include securities
(other than Warrant Shares) in the registration statement without the written
consent of the Holders of the Warrant Shares for which registration has been
requested pursuant to this Section 3(c) if, but only if, the managing
underwriters of the distribution to be made pursuant to that registration
statement advise the participating Holders of Warrant Shares in writing that in
their opinion that inclusion will not materially affect the successful marketing
of the Warrant Shares. The Company will not have effected a demand registration
pursuant to this Section 3(c) unless and until the registration statement is
declared effective. The Company will be obligated to file only one registration
statement pursuant to this Section 3(c) which becomes effective, whether or not
the registration statement at the time it becomes effective covers all or a
portion of the Warrant Shares.
(d) If, at any time during the period commencing on the day that
begins one year from the Closing Time and ending at the end of the day that is
seven years after the date of this Agreement, the Company proposes to register
any shares of Common Stock or Other Securities (excluding any shares or
securities being registered pursuant to Form S-8 or Form S-4 or any successor
form to either of them), the Company must (i) give each Holder written notice,
or telecopy and telephonic notice followed as soon as practicable by written
confirmation thereof,
5
<PAGE> 6
of the proposed registration at least 20 business days prior to the filing of
the registration statement and (ii) upon written notice, or telegraphic or
telephonic notice followed as soon as practicable by written confirmation
thereof, given to the Company by any Holder within 15 days after the giving of
the written confirmation or written notice by the Company, the Company must
include or cause to be included in any such registration statement all or such
portion of the Warrant Shares as the Holder requests; provided that the Company
may at any time withdraw or cease proceeding with any such registration
statement if it at the same time withdraws or ceases proceeding with the
registration of the Common Stock or Other Securities originally proposed to be
registered; and provided further that, in connection with any registered public
offering involving an underwriting, the managing underwriter(s) may (if in its
reasonable opinion marketing factors so require) limit the number of securities
(including any Warrant Shares) included in the offering (other than securities
of the Company). In the event of any such limitation, the total number of
Warrant Shares to be offered for the account of the Holders participating in the
registration will be reduced pro rata in proportion to the respective number of
shares requested to be included therein to the extent necessary to reduce the
total number of shares proposed to be registered to the number of shares
recommended by the managing underwriter(s); provided that if the registration
statement is for holders of securities issued by the Company who have exercised
demand registration rights, the securities of those security holders as to which
the demand registration is being provided will not be subject to proration; and
provided further that, if the amount or kind of securities to be offered for the
accounts of Holders is reduced in accordance with this sentence, the Company
will not be permitted to include securities of any persons (other than the
Company and any selling securityholders for which the registration statement has
been filed pursuant to the exercise of demand registration rights) unless the
Holders are permitted to participate on a pro rata basis with other selling
securityholders. The registration rights contained in this Section 3(d) will
expire seven years after the Closing Time.
(e) If any Holder timely elects to participate in an offering by
including Warrant Shares in a registration statement pursuant to Sections 3(c)
or 3(d) above, the Company must use its best efforts to effect the registration
to permit the sale of Warrant Shares in accordance with the intended method or
methods of disposition thereof and, without limitation, pursuant thereto the
Company must:
(i) notify the Holders as to the filing of the registration
statement and of all amendments or supplements thereto filed prior to the
effective date thereof;
(ii) use its best efforts to cause any registration statement
filed under the Securities Act pursuant to Sections 3(c) or (d) above to
become effective at the earliest possible date after the filing thereof
and to comply with all applicable rules and regulations of the Commission
in connection therewith; provided that before filing a registration
statement or prospectus or any amendments or supplements thereto,
including documents which would be incorporated or deemed to be
incorporated by reference in the registration statement after the initial
filing of the registration statement, the Company must furnish to the
Holders, their respective counsel and the underwriters, if any, to be
engaged in connection with the offering (for purposes of this Section 3
(e) and Section 3(f), the "Underwriters"), copies of
6
<PAGE> 7
all such documents proposed to be filed, which documents will be subject
to the review of the Holders, their respective counsel and the
Underwriters, and the Company will not file any registration statement, or
amendment thereto, or any prospectus or any supplement thereto relating in
whole or in part to the Holders' Warrant Shares (including such documents
incorporated or deemed to be incorporated by reference) to which the
Holders or any Underwriters reasonably object;
(iii) notify the Holders immediately, and confirm the notice in
writing, (1) when the registration statement or any post-effective
amendment thereto becomes effective, (2) when a prospectus or prospectus
supplement or post-effective amendment has been filed, (3) of any request
by the Commission for amendments, supplements or additional information
related to a registration statement or prospectus or otherwise, (4) of the
issuance by the Commission of any stop order or of the initiation or
threatening of any proceedings for that purpose known to the Company, (5)
of the receipt by the Company of any notification with respect to the
suspension of qualification of the Warrant Shares for sale in any
jurisdiction or of the initiation or threatening of any proceedings for
that purpose known to the Company, (6) of the receipt of any comments from
the Commission or any state regulatory authority, (7) of the happening of
any event which requires the making of any changes in the registration
statement or the related prospectus or any prospectus supplement so that
those documents will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (8) of the
determination of the Company that a post-effective amendment to the
registration statement is necessary or appropriate;
(iv) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a registration statement and the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the Warrant Shares for sale in any jurisdiction,
each at the earliest possible moment;
(v) if reasonably requested by the Underwriters, if any, or the
Holders, immediately incorporate in a prospectus supplement or
post-effective amendment such information as the Holders and the
Underwriters, if any, agree should be included therein relating to the
sale and distribution of the Warrant Shares including, without limitation,
information with respect to the number of Warrants and Warrant Shares
being sold to the Underwriters, the purchase price being paid by the
Underwriters and with respect to any other terms of the underwritten
offering of the Warrant Shares to be sold; make all required filings of
such prospectus supplement or post-effective amendment as soon as notified
of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and supplement or amend any registration
statement if reasonably requested by the Holders or any Underwriter of
Warrant Shares covered by the registration statement;
(vi) furnish to each of the Holders whose Warrant Shares have
been included therein, their respective counsel and each Underwriter, if
any, without charge, at least one manually executed copy of the
registration statement (including all amendments thereto) and any
post-effective amendment thereto, including financial statements and
schedules, all
7
<PAGE> 8
documents incorporated therein by reference and all exhibits (including
those incorporated by reference);
(vii) during the time when a prospectus is required to be
delivered under the Securities Act in connection with the distribution of
the Warrant Shares, comply so far as it is able with all requirements
imposed upon it by the Securities Act, the Rules and Regulations, the
Exchange Act and the rules and regulations thereunder to permit the
continuance of sales of or dealings in the Warrant Shares. If at any time
when a prospectus relating to the Warrant Shares is required to be
delivered under the Securities Act any event has occurred as a result of
which, in the opinion of counsel for the Company or counsel for the
Holders, the prospectus relating to the Warrant Shares as then amended or
supplemented includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend such
prospectus to comply with the Securities Act, the Rules and Regulations,
the Exchange Act or the rules and regulations thereunder, the Company will
use its best efforts promptly to prepare and file with the Commission an
appropriate amendment or supplement in form and substance reasonably
satisfactory to the Holders;
(viii) make generally available to its security holders as soon as
practicable, but not later than 15 months following the effective date
(and each other deemed effective date) of such registration statement, an
earning statement or statements of the Company and any subsidiaries it may
then have covering a period of at least 12 months beginning after the
effective date of the registration statement (but in no event commencing
later than 90 days after such date), which satisfies Section 11(a) of the
Securities Act and Rule 158 thereunder;
(ix) prepare and promptly file with the Commission such
amendments and post-effective amendments to each registration statement as
may be necessary to keep the registration statement continuously effective
for a period of nine months; cause the related prospectus to be
supplemented by any required prospectus supplement and, as so
supplemented, to be timely filed pursuant to Rule 424 under the Securities
Act; and comply with the provisions of the Securities Act, the Rules and
Regulations, the Exchange Act or the rules and regulations thereunder with
respect to the disposition of all Warrant Shares covered by the
registration statement during the applicable period in accordance with the
intended methods of disposition set forth in the registration statement or
supplement; and in these regards the Company will not be deemed to have
used its best efforts to keep a registration statement effective during
the applicable period if it takes any action that would result in any
Holder whose Warrant Shares have been included therein not being able to
sell those Warrant Shares at any time during such period for more than 30
days, whether or not consecutive;
(x) deliver to each of the Holders, their respective counsel and
the Underwriters, if any, without charge, as many copies of the prospectus
or prospectuses (including each preliminary prospectus) and any amendment
or supplement thereto as those persons may reasonably request; and the
Company consents to the use of any such prospectus or any
8
<PAGE> 9
amendment or supplement thereto by the Holders and each of the
Underwriters, if any, in connection with the offering and sale of the
Warrant Shares covered by that prospectus or any amendment or supplement
thereto;
(xi) prior to any public offering of Warrant Shares, register or
qualify or cooperate with the Holders, the Underwriters, if any, and their
respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of those Warrant
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Holders or any Underwriter reasonably requests in
writing; keep each such registration or qualification (or exemption
therefrom) effective during the period the applicable registration
statement is required to be kept effective and do any and all other acts
necessary or advisable to enable the disposition in such jurisdictions of
the Warrant Shares covered by the applicable registration statement;
provided that the Company will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process in any
such jurisdiction where it is not then so subject;
(xii) cooperate with the Holders and the Underwriters, if any, to
facilitate the timely preparation and delivery of certificates
representing Warrant Shares to be sold, which certificates will not bear
any restrictive legends; and enable those Warrant Shares to be in such
denominations and registered in such names as the Underwriters request at
least two business days prior to any sale of Warrant Shares to the
Underwriters;
(xiii) use its best efforts to cause the Warrant Shares covered by
the applicable registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the Holders and the Underwriters, if any, to complete the
disposition of such Warrant Shares;
(xiv) enter into such agreements in form and substance reasonably
acceptable to the Company and its counsel (including an underwriting
agreement) and take all such other actions in connection therewith as may
be necessary to expedite or facilitate the disposition of the Warrant
Shares and, in that connection, whether or not an underwriting agreement
is entered into and whether or not the registration is an underwritten
registration, timely: (1) make such representations and warranties to the
Holders with respect to the Company and any subsidiaries it may then have,
the registration statement, the prospectus (and, if applicable, prospectus
supplement) and documents, if any, incorporated or deemed to be
incorporated by reference in the registration statement, in each case in
such form, substance and scope as are reasonably requested by the Holders
and confirm the same if and when requested; (2) obtain opinions of counsel
to the Company and updates thereof addressed to the Holders with respect
to the matters referred to in the preceding clause (1) in such form, scope
and substance as are reasonably requested by the Holders; (3) in the case
of an underwritten offering, enter into an underwriting agreement in form,
scope and substance as is customary in underwritten offerings and obtain
and deliver (x) to the Underwriters, if any, opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope
and substance) must be reasonably satisfactory to the Underwriters),
addressed
9
<PAGE> 10
to the Underwriters and covering the matters customarily covered in
opinions requested by underwriters in underwritten offerings and such
other matters as may be reasonably requested by the Underwriters and (y)
to the Holders of the Warrant Shares being sold in the offering, opinions
of counsel to the Company and updates thereof (which counsel and opinions
(in form, scope and substance) must be reasonably satisfactory to these
Holders) addressed to those Holders and covering matters reasonably
requested by the Holders (whether or not those matters are different from,
or in addition to, the matters described in subclause (x) of this section
3(e)(xiv)(3); (4) obtain and deliver to the Underwriters, if any, and
those Holders, "comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements
and financial data is or is required to be included in the registration
statement or any prospectus or prospectus supplement), addressed to the
Holders and each of the Underwriters, if any, such letters to be in
customary form and covering matters of the type customarily covered in
"comfort" letters to underwriters in connection with underwritten
offerings; (5) include in full in any underwriting agreement entered into,
among other matters, the indemnification and contribution provisions and
procedures of Section 3(f) hereof (or such other indemnification and
contribution provisions as are acceptable to the Holders and Underwriters
participating in the underwritten offering) with respect to all persons to
be indemnified pursuant to Section 3(f); and (6) the Company must deliver
such documents and certificates as are requested by the Holders and the
Underwriters, if any, to evidence (x) the continued truth and correctness
of the representations and warranties made pursuant to clause (1) of this
Section 3(e)(iv) above and (y) compliance with any customary conditions
contained in the underwriting agreement or other agreement entered into by
the Company;
(xv) make available for inspection by a representative of the
Holders or any Underwriter participating in any distribution pursuant to
such registration statement and any attorney or accountant retained by the
Holders or such Underwriter, all financial and other records, pertinent
corporate documents and properties of the Company and any subsidiaries it
may have at the time and cause the officers, directors and employees of
and independent accountants and attorneys for the Company and any such
subsidiaries to meet personally with and to supply all information
reasonably requested by any such representative, Underwriter, attorney or
accountant in connection with any registration and distribution of Warrant
Shares; provided that any records, information or documents that are
designated by the Company in writing as confidential are to be kept
confidential by such persons unless (i) disclosure of such records,
information or documents is required by court or administrative order,
(ii) disclosure of such records, information or document is, in the
opinion of counsel to the Holders or to any Underwriter, required pursuant
to the requirements of the Securities Act, the Rules and Regulations, the
Exchange Act or the rules and regulations thereunder or (iii) such
records, information or documents are otherwise publicly available;
(xvi) pay all costs and expenses incident to the performance of
the Company's obligations under Sections 3(c) and (d) above and under this
Section 3(e) (collectively
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<PAGE> 11
"Registration Expenses"), including without limitation the fees and
disbursements and cost/charges of the Company's auditors, legal counsel,
any special legal counsel and legal counsel (including, if applicable,
counsel to the Underwriters) responsible for qualifying the Warrant Shares
under securities or Blue Sky laws of any jurisdiction (or obtaining
exemptions from such qualification or registration requirements), all
filing fees and printing expenses, all other expenses in connection with
the transfer and delivery of the Warrant Shares, all other expenses in
connection with the qualification or registration of the Warrant Shares
under applicable securities or Blue Sky laws of such jurisdictions as are
designated by the Holders (or obtaining exemptions from such qualification
or registration requirements) and, if applicable, the fee of the National
Association of Securities Dealers, Inc. in connection with its review;
provided that in no event will Registration Expenses include any
underwriting discounts, commissions or fees or the fees of counsel
retained by the Holders or, except with respect to such securities or Blue
Sky matters in any jurisdictions, the Underwriters in connection with the
sale of Warrant Shares pursuant to Section 3(c) or 3(d) above; and
(xvii) in connection with the filing of a registration statement
pursuant to Section 3(c) or (d) above, use its best efforts to obtain
indemnification of the Holders by the Underwriters to the same extent the
Underwriter provides indemnification to the Company.
As used in this Section 3(e), the term "Holders" refers only to those Holders
who have timely elected to sell (i) Warrants Shares in an offering or (ii)
Warrants to the Underwriters, which exercise them, in connection with an
Offering.
(f) (i) The Company must indemnify and hold harmless the Purchaser,
the Holders and any underwriter (as defined in the Securities Act) for the
Purchaser and the Holders, and each person, if any, who controls (within
the meaning of Section 15 of the Securities Act) the Purchaser, any of the
Holders or such underwriter against any losses, claims, damages,
liabilities (or actions in respect thereof) and all expenses (including,
but not limited to, all expenses incurred in investigating or defending
against any litigation, commenced or threatened, or any claim), joint or
several, to which the Purchaser, any Holders, such underwriter or such
controlling person becomes subject, under the Securities Act, the Rules
and Regulations, the Exchange Act, the rules and regulations thereunder,
other federal or state statute, law or regulation, at common law or
otherwise, specifically including but not limited to losses, claims,
damages or liabilities (or actions in respect thereof) or expenses related
to negligence on the part of any such indemnified person, insofar as any
such loss, claim, damage, liability or expense (or actions in respect
thereof) (1) arises out of or is based on any breach of any
representation, warranty or covenant of the Company in this Agreement or
any untrue statement or alleged untrue statement of any material fact
contained in (A) Section 2 of this Agreement, (B) any registration
statement covering the Warrant Shares as originally filed or in any
amendment thereof, the prospectus contained therein or any amendment or
supplement thereto or (C) any application or other document, or any
amendment or supplement thereto (in this Section collectively called an
11
<PAGE> 12
"Application"), executed by or on behalf of the Company or based upon
written information furnished by or on behalf of the Company, filed in any
jurisdiction in order to qualify or register the Warrant Shares under the
securities or Blue Sky laws thereof (or to obtain exemptions from such
qualifications or registration requirements) or filed with the Commission
or any securities association or securities exchange, or (2) arises out of
or is based upon the omission or alleged omission to state in any of the
documents described in subclauses (1)(A), (B) or (C) above a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
and agrees to reimburse each such indemnified person, as incurred, for any
legal or other expenses incurred by them in connection with investigation
or defending any such loss, claim, damage, liability or action; provided
that the Company will not be obligated to indemnify in any case to the
extent the loss, claim, damage, liability or expense arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the registration statement or an amendment or
supplement thereto or in an Application, in each case in reliance upon,
and in conformity with, written information furnished to the Company by
the indemnified person, concerning itself, specifically for use therein.
The Company will not, without the prior written consent of the Purchaser
and any other indemnified person, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder
(whether or not the Purchaser is a party to such claim, action, suit or
proceeding), unless the settlement, compromise or consent includes,
without payment by the Purchaser or other indemnified persons, as the case
may be, an unconditional release of the Purchaser and all indemnified
persons from all liability arising out of such claim, action, suit or
proceeding, satisfactory in form and substance to the Purchaser and such
indemnified persons.
(ii) Any Holder that includes all or a part of such Holder's
Warrant Shares in a registration statement pursuant to Sections 3 (c) or
(d) above must indemnify and hold harmless the Company and each of its
directors and officers who signed the applicable registration statement,
any other Holder of Warrant Shares included in the registration statement
and any underwriter (as defined in the Securities Act) for the Company or
the Holders of Warrant Shares and each person, if any, who controls
(within the meaning of Section 15 of the Securities Act) the Company or
such underwriter to the same extent as the indemnity by the Company in
Section 3(f)(i), but only with respect to any untrue statement or alleged
untrue statement or omission or alleged omission, if any, made in such
registration statement, any amendment or supplement thereto or in an
Application in reliance upon and in conformity with written information
furnished by the indemnifying Holder, and concerning the indemnifying
Holder, to the Company or such controlling person expressly for use in the
registration statement, the amendment or supplement thereto or the
Application, as the case may be. If any action is brought in respect of
which indemnity may be sought against any of the Holders, such Holder(s)
will have the rights and duties given to the indemnifying person, and the
persons so indemnified will have the rights and duties given to the
indemnified person, by Section 3(f)(iii) below.
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<PAGE> 13
(iii) If any action or proceeding is brought against a person in
respect of which indemnity or contribution may be sought hereunder against
an indemnifying or contributing person, the indemnified person or person
entitled to contribution must promptly notify the indemnifying or
contributing person in writing of the institution of the action or
proceeding (but the failure to so notify will not affect the
indemnification, contribution and other rights provided for herein except
to the extent, if any, that the indemnifying person is materially
prejudiced by the failure to so give or timely give the notice). The
indemnifying person must assume the defense of the action, including the
employment of counsel satisfactory to the indemnified person and payment
as incurred of all fees and expenses related thereto. The indemnified
person will have the right to employ its own counsel in any such case, but
the fees and expenses of that counsel will be at the expense of the
indemnified person unless (1) the employment of that counsel and the
payment of their fees and expenses has been authorized in writing by the
indemnifying person in connection with the defense of the action, (2) the
indemnifying person has failed promptly after notice by the indemnified
person to assume the defense of the action or proceeding and to employ
counsel satisfactory to the indemnified person in the action or proceeding
or (3) the named parties to any such action or proceeding (including any
impleaded parties) include both the indemnified person and the
indemnifying person and the indemnified person has been advised by counsel
that there may be legal defenses or rights available to the indemnified
person which are different from or additional to those available to the
indemnifying person or there may be a conflict between their positions (in
which case, if the indemnified person notifies the indemnifying person in
writing that it elects to employ separate counsel at the expense of the
indemnifying person, the indemnifying person will not have the right to
assume the defense of the action or proceeding), provided that the
indemnifying person will not, in connection with any one such action or
proceeding, or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (together with one appropriate local
counsel) at any time for all such indemnified persons. Anything in this
paragraph to the contrary notwithstanding, the indemnifying person will
not be liable for any settlement of any claim or action effected without
its written consent. The indemnity agreements in this Section will remain
in full force and effect regardless of any investigation made by or on
behalf of any indemnified person and will survive the sale of the Warrants
and the Warrant Shares pursuant to any registration statement or otherwise
and any termination of this Agreement.
(iv) If the indemnification provided for in subsections (i), (ii)
and (iii) of this Section 3(f) is unavailable to an indemnified person in
respect of any losses, claims, damages, liabilities or expenses referred
to therein then, subject to the first sentence of Section 3(f)(iii), the
indemnifying person, in lieu of indemnifying the indemnified person, must
contribute to the amount paid or payable by the indemnified person as a
result of the losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect not only the relative benefits
received by the indemnified person and the indemnifying person,
13
<PAGE> 14
but also the relative fault of the indemnifying person and indemnified
persons in connection with the actions which resulted in the losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the indemnifying person
and indemnified person will be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information
supplied by, the indemnifying person or indemnified person and their
relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a person as
a result of the losses, claims, damages, liabilities and expenses referred
to above will be deemed to include, subject to the limitations set forth
in subsection (iii) of this Section 3(f), any legal or other fees or
expenses incurred by that person in connection with any action or
proceeding. The parties agree that it would not be just and equitable if
contribution pursuant to this subsection (iv) of this Section 3(f) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable and other considerations
referred to in this paragraph. If the full amount of the contribution
specified in this subsection (iv) of this Section 3(f) is not permitted by
applicable law, then the indemnified person will be entitled to
contribution from the indemnifying person to the full extent permitted by
applicable law. Notwithstanding the provisions of this Section 3(f)(iv),
no Holder will be required to contribute any amount in excess of the
amount by which the total price at which the Warrant Shares of the Holder
were sold to the public exceeds the amount of any damages which the Holder
has otherwise been required to pay by reason of such untrue statement or
omission. No person found guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person which was not found guilty of such fraudulent
misrepresentation.
(v) Whenever any indemnifying or contributing person is
requested by the indemnified person or the person entitled to contribution
to make a payment pursuant to the forgoing provisions of this Section
3(f), the payment must be made within five business days after the request
and, if not so paid, the amount due will thereafter bear interest at ten
percent per annum, compounded annually (but not in excess of the maximum
amount permitted by applicable law).
(vi) Amounts advanced pursuant to Section 3(f)(v) will be
reimbursed by the indemnified person with interest at the rate provided in
Section 3(f)(v) (but not in excess of the maximum amount permitted by
applicable law), if it is finally determined by a court of competent
jurisdiction that indemnification was not owing and all appeals have been
decided or the time for appeal has expired.
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<PAGE> 15
4. Exercise of Warrants.
(a) The Warrants may be exercised from time to time and in full or in
part by the Holder thereof by surrender of the Warrants, with the Election to
Purchase provided for in the Warrants duly executed by the Holder, to the
Company at its offices at 4403 Table Mountain Drive, Golden, Colorado 80403, or
at such other office or agency as the Company may from time to time designate in
writing to each Holder, accompanied by payment, in cash or by cashier's check
payable to the order of the Company or as provided in Section 4(c), in the
amount obtained by multiplying the number of Warrant Shares designated by the
Holder in the Election to Purchase by the Exercise Price per share. Exercise of
any Warrant will constitute an acknowledgment by the purchasing Holder that it
will not dispose of the Warrant Shares acquired upon exercise except in
compliance with Section 3(b) hereof and the Securities Act. Upon any partial
exercise of the Warrants, the Company at its expense will forthwith issue and
deliver to the purchasing Holder a new Warrant, in the name of the Holder and
for the number of Warrant Shares equal to the number of shares called for by the
surrendered Warrant (after giving effect to any adjustment therein as provided
in Section 6 below) minus the number of such Warrant Shares (after giving effect
to such adjustment) purchased by the Holder pursuant to that partial exercise.
(b) Holders of Warrants have no rights of share ownership until they
exercise their Warrants. On the date of any exercise of any Warrants (except
that if, on that date, the stock transfer books of the Company are closed, in
which case on the next succeeding date on which such stock transfer books are
open), each Holder exercising the Warrants will be deemed to have become, and
thereafter will be considered, a holder of record of the shares of Common Stock
purchased upon such exercise for all purposes. The Company will, at the time of
any exercise of any Warrant, upon the request of the Holder thereof, acknowledge
in writing its continuing obligation to afford to that Holder any rights
(including without limitation any right to registration of the Warrant Shares
issued upon such exercise) to which the Holder continues to be entitled after
such exercise in accordance with the provisions of this Agreement; provided that
if the Holder of a Warrant fails to make any such request, the failure will not
affect the continuing obligation of the Company to afford those rights to the
Holder.
(c) Notwithstanding anything to the contrary contained in this
Section 4, any Holder may elect to exercise any Warrant in whole or in part by
receiving shares of Common Stock equal to the value (determined below) of the
Warrant (or any part hereof), upon surrender of the Warrant (or any part
thereof) at the office or agency described in Section 4(a) above, together with
notice of such election, specifying the part of the Warrant so surrendered, in
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<PAGE> 16
which event the Company shall issue and deliver to the Holder a number of shares
of Common Stock determined using the following formula:
X = (Y) (A-B)
---------
A
where
X = the number of shares of Common Stock to be
issued to the Holder;
Y = the number of shares of Common Stock
purchasable under the Warrant, or
portion of the Warrant, surrendered;
A = the Current Market Price per share of
the Common Stock, determined pursuant to
Section 6(d) of this Agreement; and
B = the then current Exercise Price.
5. Delivery of Stock Certificates, etc., on Exercise; No Fractional
Shares.
(a) As soon as practicable after the exercise of any Warrants and in
any event within five business days thereafter, the Company, at its expense
(including the payment by it of any applicable issue taxes), will cause to be
issued in the name of and delivered to the purchasing Holder a certificate or
certificates for the number of fully paid and nonassessable Warrant Shares to
which that Holder is entitled upon that exercise, together with any Other
Securities and property (including cash, where applicable) to which that Holder
is entitled upon such exercise pursuant to Section 6 of this Agreement or
otherwise.
(b) The Company will not issue a fractional share of Common Stock
upon exercise of a Warrant. Rather, if a fractional share would otherwise be
issued, the Company will instead issue a number of whole shares equal to the
next lowest number of whole shares and pay to the exercising Holder an amount in
cash equal to amount obtained by multiplying (x) the fractional shares not
issued by (y) the Current Market Price (as defined in Section 6(d)) per share of
the Common Stock on the last trading day prior to the exercise date.
6. Anti-dilution Provisions. The Warrants are subject to the
following additional terms and conditions:
(a) If, after the date of this Agreement, the Company:
(1) pays a dividend or makes a distribution on its
Common Stock, in each case in shares of its capital
stock (including Common Stock);
(2) subdivides its outstanding shares of Common Stock into
a greater number of shares;
(3) combines its outstanding shares of Common Stock into
smaller number of shares; or
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<PAGE> 17
(4) issues by reclassification of its Common Stock any
shares of its capital stock or Other Securities
(including without limitation any such
reclassification in connection with a consolidation
or merger in which the Company is the continuing
entity);
then the Exercise Price in effect at the time of the record date of such
dividend, distribution, subdivision, combination or reclassification must be
adjusted so that the Exercise Price is equal to the price determined by
multiplying the Exercise Price in effect immediately prior to such event by a
fraction, (x) the numerator of which is the total number of outstanding shares
of Common Stock of the Company immediately prior to such event and (y) the
denominator of which is the total number of outstanding shares of Common Stock
of the Company immediately after such event and, as so adjusted or readjusted,
the Exercise Price will remain in effect until a further adjustment or
readjustment is required by this Section 6.
Whenever the Exercise Price payable upon exercise of each Warrant is
adjusted pursuant to this Section 6(a), the Warrant Shares must simultaneously
be adjusted by multiplying the number of Warrant Shares issuable upon exercise
of each Warrant immediately prior to such event by the Exercise Price in effect
on the date thereof and dividing the product so obtained by the Exercise Price
as adjusted.
These adjustments referred to in the preceding paragraph will become
effective on (x) in the case of a dividend or distribution, the earlier of the
record date thereof or the distribution date thereof and (y) in the case of a
subdivision, combination or reclassification, the earlier of the record date
thereof or the effective date thereof.
(b) If, after the date of this Agreement, the holders of Common Stock
generally have received or, on or after the record date fixed for the
determination of eligible stockholders, have become entitled to receive (i)
securities other than capital stock, (ii) evidences of its indebtedness, (iii)
assets (including cash dividends or distributions, other than regularly paid
cash dividends and distributions, but including, without limitation,
extraordinary or liquidating cash dividends or distributions), (iv) rights,
options, warrants (other than the Warrants) or convertible or exchangeable
securities (other than Convertible Securities or Options) containing the right
to subscribe for or purchase securities of the Company, then and in each such
case the Holder of each Warrant, upon the exercise thereof as provided in
Section 4 above, will be entitled to receive, in addition to the Warrant Shares
otherwise receivable on that exercise, the amount of securities, indebtedness,
assets (including cash in the case referred to in subdivision (iii) of this
Section 6(b)) and such rights, options, warrants or convertible or exchangeable
securities which that Holder would hold on the date of that exercise if on the
date of this Agreement that Holder had been the holder of record of the number
of shares of Common Stock called for by the Warrants held by the Holder and had
thereafter, during the period from the date of this Agreement to and including
the date of such exercise, retained such shares, giving effect to all
adjustments called for during that period by this Section 6.
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<PAGE> 18
(c) (i) If at any time prior to the exercise of the Warrants in full,
the Company issues or sells any Common Stock without consideration or for
consideration per share less than the Current Market Price per share (as
defined in Section 6(d)) on the date of issuance or sale and the
opportunity to purchase has been afforded to the holders of Common Stock
generally, the Exercise Price must be adjusted so that the Exercise Price
equals the price determined by multiplying the Exercise Price in effect
immediately prior to the date of such sale or issuance (which date in the
event of distribution to shareholders will be deemed to be the record date
set by the Company to determine shareholders entitled to participate in
the distribution) by a fraction, (x) the numerator of which will be (i)
the number of shares of Common Stock outstanding on the date of such sale
or issuance, plus (ii) the number of additional shares of Common Stock
which the aggregate consideration received by the Company upon such
issuance or sale would purchase at such Current Market Price per share of
the Common Stock and (y) the denominator of which will be (i) the number
of shares of Common Stock outstanding on the date of such issuance or
sale, plus (ii) the number of additional shares of Common Stock offered
for purchase. Any adjustments required by this Section 6(c) must be made
immediately after such issuance or sale or record date, as the case may
be. Such adjustments shall be made successively whenever the event occurs.
(ii) For the purpose of making any adjustment in the Exercise
Price, or number of shares of Common Stock purchasable upon exercise of
the Warrants, in each case as provided above and in Section 6(c)(vii)
below, the consideration received by the Company for any issuance or sale
of securities will:
(A) To the extent it consists of cash, be computed as
the gross amount of cash received by the Company
before deduction of any underwriting or similar
commissions, compensation, discounts or concessions
paid or allowed by the Company in connection with
the issuance or sale and before deduction of any
other expenses payable in connection therewith; and
(B) In case of the issuance (otherwise than on
conversion or exchange of Convertible Securities) or
sale of additional Common Stock, Options or
Convertible Securities for a consideration other
than cash or a consideration part of which is other
than cash, be the fair value of such consideration
as determined by the Board of Directors of the
Company in the good faith exercise of its business
judgment, regardless of the accounting treatment
thereof.
(iii) If the Company in any manner issues or grants any Options or
any Convertible Securities -- but only to the extent (i) such Options are
exercisable at less than the Current Market Price at the date of issue of
such Options and the Options are granted or made available for purchase to
the holders of Common Stock generally or (ii) the amount paid for such
Convertible Securities per share plus any additional amount payable per
share on conversion thereof is less than the Current Market Price per
share at the date of issuance of the Convertible Securities and the
Convertible Securities are granted or made available for purchase to the
holders of Common Stock generally -- the total maximum number of shares
18
<PAGE> 19
of Common Stock issuable upon the exercise of such Options or upon
conversion or exchange of the total maximum amount of such Convertible
Securities at the time such Convertible Securities first become
convertible or exchangeable will (as of the date of issuance or grant of
such Options or, in the case of the issue or sale of Convertible
Securities other than where they are issuable upon the exercise of
Options, as of the date of such issue or sale) be deemed to be issued and
to be outstanding for the purpose of this Section 6(c) and to have been
issued for the sum of the amount (if any) paid for such Options or
Convertible Securities and the amount (if any) payable upon the exercise
of such Options or upon conversion or exchange of such Convertible
Securities at the time such Convertible Securities first become
convertible or exchangeable; provided that, subject to the other
provisions of this Section 6(c), no further adjustment of the Exercise
Price will be made upon the actual issuance of any such Common Stock or
Convertible Securities or upon the conversion or exchange of any such
Convertible Securities.
(iv) If the purchase price provided for in any Option referred to
in Section 6(c)(iii), the additional consideration (if any) payable upon
the conversion or exchange of Convertible Securities referred to in
Section 6(c)(iii) or the rate or price at which any such Convertible
Securities are convertible into or exchangeable for shares of Common Stock
changes at any time (other than under or by reason of conventional
provisions designed to protect against dilution) -- but only to the extent
the change does not result in either the per share Option exercise price
or the amount per share payable for such Convertible Securities plus the
amount payable per share on the conversion of such Convertible Securities
to be greater than the lesser of the Current Market Price per share at the
time such Options or Convertible Securities were issued, as referred to in
Section 6(c)(iii), or the Current Market Price at the effective date of
such change -- the Exercise Price in effect at the time of that event will
be readjusted to the Exercise Price that would have been in effect at the
time such Options or Convertible Securities then still outstanding were
initially granted, issued or sold, as if such changed purchase price,
additional consideration or conversion rate, as the case may be, was in
effect at such initial date of grant, issuance or sale, as the case may
be. If the purchase price provided for in any such Option, the additional
consideration (if any) payable upon the conversion or exchange of any such
Convertible Securities or the rate or price at which any such Convertible
Securities are convertible into or exchangeable for shares of Common Stock
is changed at any time under or by reason of conventional provisions
designed to protect against dilution -- but only to the extent such change
does not result in either the per share Option exercise price or the
amount per share payable for such Convertible Securities plus the amount
payable per share on the conversion of such Convertible Securities to be
greater than the Current Market Price per share at the time such Options
or Convertible Securities were issued, as referred to in Section 6(c)(iii)
-- then in case of, but only to the extent of, the delivery of shares of
Common Stock upon the exercise of any such Option or upon conversion or
exchange of any such Convertible Security, the Exercise Price then in
effect will, upon issuance of such shares of Common Stock, be adjusted to
the Exercise Price that would have been in effect at the time such
exercised Options or converted or exchanged Convertible Securities were
initially granted issued or sold, as if such changed purchase price,
additional consideration or conversion or exchange
19
<PAGE> 20
rate, as the case may be, was in effect at such initial date of grant,
issuance or sale, as the case may be.
(v) In the event of the "Expiration" (defined below) of any
right to purchase Common Stock under any Option or of any right to convert
or exchange Convertible Securities, the Exercise Price will, upon the
Expiration, be changed to the Exercise Price that would have been in
effect at the time of the Expiration had the Option or Convertible
Security, to the extent outstanding immediately prior to Expiration, never
been issued, and the shares of Common Stock issuable thereunder will no
longer be deemed to be Common Stock Outstanding. As used in this Section
6.3(c)(v), the word "Expiration" includes only an expiration or
termination, without payment of consideration by the Company, of a right
to purchase, convert or exchange.
(vi) Notwithstanding anything to the contrary in this Section 6,
the Exercise Price will not be adjusted by virtue of the Warrants or the
existence or exercise of any options of the Company outstanding on the
date hereof and disclosed in the
Prospectus Supplement/Prospectus.
(vii) Whenever the Exercise Price payable upon exercise of a
Warrant is adjusted pursuant to this Section 6(c), the Warrant Shares
issuable on exercise of the Warrant must simultaneously be adjusted by (x)
multiplying (A) the number of the Warrant Shares issuable upon exercise of
the Warrant immediately prior to such adjustment in the Exercise Price by
(B) the Exercise Price in effect on the date thereof and (y) dividing the
product so obtained by the Exercise Price as adjusted.
(d) For the purpose of any computation under Section 6, the "Current
Market Price" per share of Common Stock at any date will be the average of the
daily closing prices for the 15 consecutive trading days commencing 20 trading
days before that date. The closing price for each day will be (i) the last
reported sale price, regular way or, in case no such reported sale takes place
on such day, the average of the closing bid and asked prices, regular way, for
such day, in either case on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or (ii) if the Common Stock
is not listed or admitted to trading on any national securities exchange, but is
traded in the NASDAQ, or if the Common Stock is otherwise securities for which
transaction reports are required to be made on a real-time basis pursuant to
20
<PAGE> 21
an effective transaction reporting plan under Rule 11a3-1 of the Rules of the
Commission under the Exchange Act, the last reported sales price or (iii) if the
Common Stock is not listed or admitted to trade, and if last sale data is not
then available from NASDAQ, but the Common Stock is traded in the
over-the-counter market, the average of the representative closing bid and asked
quotations for the Common Stock on NASDAQ or any comparable system, or if the
Common Stock is not listed on NASDAQ or a comparable system, the average of the
closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
independent members of the Board of Directors of the Company for that purpose.
(e) No adjustment in the number of Warrant Shares purchasable under
this Agreement will be required unless the adjustment would require an increase
or decrease of at least one percent in the number of Warrant Shares purchasable
upon the exercise of each Warrant. No adjustment in the Exercise Price payable
under this Agreement will be required unless the adjustment would require an
increase or decrease in the Exercise Price of at least $.01 per share. Any
adjustments that by reason of this Section 6(e) are not required to be made must
be carried forward and taken into account in any subsequent adjustment and,
notwithstanding the foregoing, all adjustments so carried forward will be made
at the time of, and in connection with, each exercise of any of the Warrants.
All calculations will be made to the nearest one-thousandth of a share, or cent,
as the case may be.
(f) If at any time as a result of an adjustment made pursuant to this
Section 6, the Holders become entitled to purchase any shares of capital stock
or Other Securities of the Company other than shares of Common Stock, thereafter
the number of such Other Securities so purchasable upon exercise of each Warrant
and the Exercise Price for such securities will 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 Warrant Shares contained in this Section 6 and
the provisions of Sections 3, 4, 5 and 7 with respect to the Warrant Shares will
apply on like terms to any such Other Securities.
(g) In case of any consolidation of the Company with or merger of the
Company into another corporation or entity or in case of any sale or conveyance
to another corporation or entity of the property of the Company as an entirety
or substantially as an entirety, the Company or such successor or purchasing
corporation or entity, as the case may be, must as a condition of the
consolidation, merger, sale or conveyance execute a binding agreement agreeing
that each Holder will have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
each Warrant the kind and amount of shares and other securities and property
which the Holder would have owned or have been entitled to receive after the
happening of the consolidation, merger, sale or conveyance had the Warrant been
exercised immediately prior thereto. That agreement must also provide for
adjustments, which must be as nearly equivalent as is practicable to the
adjustments provided for in this Section 6 and for other protections and rights
(including without limitation registration rights) for the Holders as are as
nearly equivalent as is practical to those they have under this Warrant
Agreement. The Company must not complete any such consolidation, merger, sale or
conveyance unless the agreement referred to in the immediately preceding
sentence is executed and delivered, is binding and the
21
<PAGE> 22
mailing thereof provided for in the immediately following sentence is done at
the time of such completion. The Company must mail by first class mail to each
Holder and the Purchaser, postage prepaid, notice of the execution of and a copy
of that agreement. The provisions of this Section 6 will similarly apply to
successive consolidations, mergers, sales or conveyances. None of any Holder or
the Purchaser will have any duty or responsibility to determine the correctness
of any provisions contained in any such agreement, including without limitation
provisions relating either to the kind or amount of shares of stock or Other
Securities or property receivable upon exercise of Warrants or with respect to
the method employed and provided therein for any adjustments.
(h) Whenever the Exercise Price or the kind or amount of securities
purchasable under the Warrants is adjusted pursuant to any of the provisions of
this Warrant Agreement, the Company must forthwith thereafter cause to be sent
to the Purchaser and all other Holders a certificate setting forth the
adjustments in the Exercise Price and the number of shares and, in addition,
setting forth in detail the facts requiring the adjustments. In addition, the
Company at its expense must within 90 days following the end of each of its
fiscal years during the term of this Agreement and promptly upon the reasonable
request of the Holders of at least ten percent of the Warrants in connection
with the exercise from time to time of all or any portion of any Warrants, cause
independent public accountants of nationally recognized standing selected by the
Company to compute any such adjustment in accordance with the terms of the
Warrants and prepare and deliver to the Holders a certificate setting forth that
adjustment and showing in detail the facts upon which that adjustment is based.
(i) In the event of (A) any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution, any
right to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any Other Securities or property or to receive any other right, (B) any
capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company or any sale or conveyance of all or
substantially all of the assets of the Company to, or consolidation or merger of
the Company with or into, any other corporation or other entity or (C) any
voluntary or involuntary dissolution or liquidation of the Company, then and in
each such event the Company will mail or cause to be mailed to each Holder and,
in addition, on the same date as the earliest such mailing, telecopied and
mailed to the Purchaser, a notice specifying the date upon which any such record
date is to be taken for the purpose of such dividend, distribution or right,
stating the amount and character of such dividend, distribution or right and the
date on which any such reorganization, reclassification, recapitalization, sale,
conveyance, consolidation, merger, dissolution, liquidation or winding-up is to
take place and the time, if any, as of which the holders of record of Common
Stock (or Other Securities) will be entitled to exchange their shares of Common
Stock (or Other Securities) for securities or other property deliverable upon
such reorganization, reclassification, recapitalization, sale, conveyance,
consolidation, merger, dissolution, liquidation or winding-up. In all events,
that notice must be mailed at least 15 business days prior to the proposed
record date therefor.
(j) Upon the occurrence of any event not specifically denominated in
this Section 6 as altering the Exercise Price and the amount of Common Stock
purchasable upon the exercise of
22
<PAGE> 23
the Warrants, if the reasonable exercise of the business judgment of the
independent members of the Board of Directors of the Company (or, if none, the
Board of Directors or the Company) requires, on equitable principles, one or
more of the alteration of the Exercise Price in a manner favorable to Holders or
a corresponding adjustment in a manner favorable to Holders to the number of
shares for which the Warrants are exercisable, the Exercise Price and such
number of shares must be so equitably altered.
7. Further Covenants of the Company. The Company hereby agrees as set
forth below in this Section 7.
(a) The Company must at all times reserve and keep
available, solely for issuance and delivery upon the exercise of the
Warrants, all Warrant Shares from time to time issuable upon the
exercise of the Warrants.
(b) All of the Warrant Shares delivered upon the exercise of
the Warrants and payment of the Exercise Price (including for this
purpose by a net exercise of Warrants as permitted by Section 4(c))
will be validly issued, fully paid and nonassessable; each Holder of a
Warrant will receive good and marketable title to the Warrant Shares,
free and clear of all voting and other trust arrangements, preemptive
rights, liens, charges, claims, encumbrances or rights of third parties
of any type or description; and the Company will at or before the time
of issuance, have paid all taxes, if any, in respect of the issuance
thereof.
(c) Subject to Section 3(a) hereof, upon surrender for
exchange of any Warrant to the Company, the Company at its expense will
promptly issue and deliver to the Holder thereof a new Warrant or
Warrants of like tenor, in the name of such Holder, calling in the
aggregate for the number of Warrant Shares called by the Warrants so
surrendered for exchange.
(d) Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of Warrants and,
in the case of any such loss, theft or destruction, upon delivery of an
indemnity agreement by the Warrant Holder reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation,
upon surrender by the Holder and cancellation of such Warrants, the
Company at its expense will execute and deliver, in lieu thereof, new
Warrants of like tenor and amount.
(e) During the term of the Warrants, the Company must use
its best efforts to keep current in the filing of all forms and other
materials which it may be required to file with the appropriate
regulatory authority pursuant to the Exchange Act and the rules and
regulations thereunder and all other forms and reports required to be
filed with any regulatory authority having jurisdiction over the
Company. The Company must also take such further action as any Holder
may reasonably request, all to the extent required from time to time to
enable the Holder to sell the Holder's Warrant Shares (x) without
registration under the Securities Act and (y) under Rule 144 or any
similar rule or regulation hereafter adopted by the Commission.
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<PAGE> 24
8. Other Holders. The Warrants are issued upon the following terms,
to all of which each Holder or owner thereof by the taking thereof consents and
agrees: (a) any person who becomes a transferee, within the limitations on
transfer imposed by Section 3(a) above, of a Warrant properly endorsed, must
take that Warrant subject to the provisions of Sections 3(a) and 3(b) above and
thereupon will be (x) authorized to represent that such transferee is the
absolute owner thereof and, subject to the restrictions contained in this
Warrant Agreement and (y) empowered to transfer absolute title by endorsement
and delivery thereof to a permitted bona fide purchaser for value; (b) each
prior taker or owner waives and renounces all equities or rights in such Warrant
in favor of each such permitted bona fide purchaser, and each such permitted
bona fide purchaser will acquire absolute title thereto and to all rights
presented thereby; and (c) until such time as the respective Warrant is
transferred on the books of the Company, absent bad faith, the Company may treat
the registered Holder thereof as the absolute owner thereof for all purposes,
notwithstanding any notice to the contrary.
9. Resolution of Disputes.
(a) If any dispute arises under or in any way with respect to this
Agreement and the matters contemplated hereby (each, a "Dispute"), the parties
to this Agreement and subsequent Holders of Warrants and Warrant Shares, in each
case who are party to the Dispute (the "Disputing Parties"), must, before they
are entitled to proceed under Sections 9(b) or (c), first attempt to resolve the
Dispute by informal negotiations within 30 days (or any mutually agreed
extension of time) after any Disputing Party requests such negotiations.
(b) If the Dispute is not resolved by those negotiations, before
there can be a proceeding under Section 9(c), the Dispute must be referred to
the San Francisco, California office of JAMS/Endispute for a confidential
non-binding mediation before a retired Judge or Justice. In this regard, the
Disputing Parties may select any mutually-acceptable panel member from the list
of retired Judges and Justices at JAMS/Endispute as the Mediator. If they cannot
agree upon a Mediator, the parties to this Agreement agree that, to the extent
JAMS/Endispute is then willing to do so, JAMS/Endispute will assign a Mediator
utilizing the following procedure or, if it does not use that or a similar
procedure, will assign a Mediator: (i) JAMS/Endispute will submit to the
Disputing Parties a list and resumes of available Mediators, numbering one more
than there are Disputing Parties; (ii) each Disputing Party may strike one name
from the list; and (iii) if more than one name remains, the designated Mediator
will be selected from those remaining by the Arbitration Administrator of
JAMS/Endispute. The mediation process will commence within 30 days of the
assignment of the Mediator (or any mutually-agreed extension of time) and will
continue until the Dispute is resolved, the Mediator makes a finding that there
is no possibility of settlement through mediation or the parties to the
mediation process mutually choose not to continue the mediation.
(c) If the mediation process set forth in Section 9(b) does not
resolve the Dispute, the Dispute must immediately be referred to the San
Francisco, California office of JAMS/Endispute for confidential, binding
arbitration in accordance with the JAMS/Endispute Comprehensive Arbitration
Rules and Procedures (or successor rules and procedures) then in effect. If the
Disputing Parties mutually agree in writing, those Arbitration Rules and
Procedures will be
24
<PAGE> 25
modified or supplemented as agreed. The Arbitrator will be a single neutral
retired Judge or Justice selected in accordance with those Arbitration Rules and
Procedures, provided that the Arbitrator chosen must not be the same person who
conducted the mediation pursuant to Section 9(b). The decision or the arbitrator
will be final and unappealable and judgment thereon may be entered by any court
having jurisdiction.
(d) Notwithstanding the foregoing, if a third party brings a claim (a
"Third Party Claim") against a party to this Agreement for which such party
believes it is entitled to indemnification under this Agreement, this Section 9
will not prevent any indemnification claim, or Dispute arising from such
indemnification claim, from being resolved in the forum in which the Third Party
Claim is originally filed.
(e) The procedures set forth in this Section 9 are the sole
procedures for resolving Disputes.
10. General Provisions. All notices, certificates and other
communications from or at the request of the Company to the Holder as such must
be mailed by first class, registered or certified mail, postage prepaid to the
Holder, with a copy to each of First Security Van Kasper Inc., 600 California
Street, Suite 1700, San Francisco, California 94111, Attn.: President or to such
other address for itself as has been furnished to the Company in writing. This
Warrant Agreement and any of the terms hereof may be changed, waived, discharged
or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. In
addition and notwithstanding the foregoing, the provisions of Section 3(c), 3(d)
and 6 above cannot be changed, waived, discharged or terminated in a manner
adverse to the Holders without the written consent of one or more Holder or
Holders who collectively own, of record, that number of Warrants Shares which in
the aggregate constitute two-thirds of all Warrant Shares issued or issuable
under this Agreement. The headings in this Warrant Agreement are for purposes of
reference only and do not limit or otherwise affect any of the terms hereof.
This Warrant Agreement, together with the forms of instruments annexed hereto,
supersedes all prior negotiations and all prior written and prior and
contemporaneous oral agreements, representations, warranties and inducements and
constitutes the full and complete agreement of the parties hereto with respect
to the subject matter hereof.
11. GOVERNING LAW. THIS WARRANT AGREEMENT WILL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS, AND NOT THE LAW PERTAINING TO
CHOICE OR CONFLICT OF LAWS, OF THE STATE OF NEW YORK IN ACCORDANCE WITH AND AS
SPECIFICALLY PROVIDED FOR IN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK.
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<PAGE> 26
12. Execution and Delivery. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument, and may be delivered by
facsimile transmission of signature and, as applicable, other pages.
BOLDER TECHNOLOGIES CORPORATION
By: /s/ Roger Warren
---------------------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written
FIRST SECURITY VAN KASPER INC.
By: /s/ Bruce P. Emmeluth
-------------------------------------------
Name:
Title:
26
<PAGE> 1
EXHIBIT 4.2
FORM OF WARRANT
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE CONDITIONS
SPECIFIED IN A WARRANT AGREEMENT, DATED NOVEMBER 8, 1999, BETWEEN BOLDER
TECHNOLOGIES CORPORATION (THE "COMPANY") AND FIRST SECURITY VAN KASPER INC.
EXCEPT TO THE EXTENT PERMITTED BY THE WARRANT AGREEMENT, NO TRANSFER, SALE,
PLEDGE, OR OTHER DISPOSITION OF THESE WARRANTS OR THE SHARES OF COMMON STOCK OF
THE COMPANY ACQUIRED ON EXERCISE OF THESE WARRANTS WILL BE VALID OR EFFECTIVE
UNTIL REGISTERED UNDER THE SECURITIES ACT OF 1933 OR, IF APPLICABLE, A SUCCESSOR
LAW THERETO (IN EACH CASE AS AMENDED FROM TIME TO TIME) OR THE COMPANY HAS BEEN
ADVISED BY AN OPINION OF COUNSEL THAT THESE WARRANTS OR THOSE SHARES OF COMMON
STOCK WILL BE TRANSFERRED IN A TRANSACTION EXEMPT FROM SUCH REGISTRATION AND
UNTIL ANY APPLICABLE CONDITIONS CONTAINED IN THE WARRANT AGREEMENT HAVE BEEN
FULFILLED. A COPY OF THE WARRANT AGREEMENT IS ON FILE AT THE OFFICES OF THE
COMPANY. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE,
AGREES TO BE BOUND BY THE PROVISIONS OF THE WARRANT AGREEMENT.
No._______
Warrant to Purchase up to 66,000 Shares of Common Stock
EXERCISABLE COMMENCING 9:00 A.M., SAN FRANCISCO TIME, ON NOVEMBER 12, 2000 AND
ENDING 5:00 P.M., SAN FRANCISCO TIME, ON NOVEMBER 12, 2004
BOLDER TECHNOLOGIES CORPORATION
COMMON STOCK PURCHASE WARRANT
This certifies that ___________________________, or registered
assigns, is the holder (the "Holder") of this Warrant to purchase, subject to
adjustment, the number of fully paid and nonassessable shares set forth above
(the "Warrant Shares") of Common Stock, par value $0.001 per share (the "Common
Stock"), of BOLDER Technologies Corporation, a Delaware corporation (the
"Company"), at the per share exercise price, subject to adjustment (the
"Exercise Price"), set forth in the Warrant Agreement, dated November 8, 1999
(the "Warrant Agreement"), between the Company and First Security Van Kasper
Inc., at any time prior to the Expiration Date (defined below), by surrendering
this Warrant, with the form of subscription set forth hereon duly executed, to
the Company at the Company's offices at 4403 Table Mountain Drive, Golden,
Colorado 80403, or at such other office or agency as the Company may designate
and by paying in full, in the manner provided in Section 4 of the Warrant
Agreement, the Exercise Price for the Warrant Shares then purchased. Payment of
the Exercise Price may be made in cash, cashier's check payable to the order of
the Company or surrender of a portion of this Warrant as provided in Section
4(c) of the Warrant Agreement.
<PAGE> 2
This Warrant may be exercised at any time and from time to time, in
whole or in part, at the option of the Holder, commencing 9:00 a.m., San
Francisco time, on November 12, 2000 until 5:00 p.m., San Francisco time, on
November 12, 2004 (the "Expiration Date"). Upon the purchase of fewer than all
of the Warrant Shares, there must be issued to the Holder a new Warrant
exercisable for the number of Warrant Shares for which this Warrant has not been
exercised or surrendered as payment. Prior to the Expiration Date, the Holder is
entitled to exchange this Warrant, without charge, for another Warrant or
Warrants exercisable for the same aggregate number of Warrant Shares.
Prior to the Expiration Date, subject to any applicable laws
restricting transferability and to any restriction on transferability that may
appear on this Warrant or is contained in the Warrant Agreement, the Holder is
entitled to transfer this Warrant upon delivery thereof, duly endorsed by the
Holder or by his, her or its duly authorized attorney-in-fact or representative,
or accompanied by proper evidence of succession, assignment or authority to
transfer, with the form of assignment set forth hereon duly executed. Upon any
such transfer, a new Warrant or Warrants exercisable for the same aggregate
number of Warrant Shares will be issued by the Company, without charge, in
accordance with instructions in the form of assignment.
This Warrant is issued under and in accordance with the Warrant
Agreement and, except as otherwise provided in this Warrant, is subject to the
terms and provisions contained in the Warrant Agreement. Upon certain events
provided for in the Warrant Agreement, the Exercise Price and the number of
shares of Common Stock (or other securities) issuable upon the exercise of this
Warrant are subject to adjustment. No fractional shares will be issued upon the
exercise of a Warrant. Instead, as provided in the Warrant Agreement, the
Company must pay the value of such fractional share to the Holder in cash.
THIS WARRANT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS, AND NOT THE LAW PERTAINING TO CHOICE OR CONFLICT OF LAWS, OF
THE STATE OF NEW YORK IN ACCORDANCE WITH AND AS SPECIFICALLY PROVIDED FOR IN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
The Company has caused this Warrant to be duly executed.
BOLDER TECHNOLOGIES CORPORATION
By:
------------------------------------
Name:
Title:
Attest:
---------------------------------
Name:
Title:
2
<PAGE> 3
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise this Warrant to
purchase _______ shares of Common Stock, acknowledges that it will not dispose
of such shares except in compliance with Section 3(b) of the Warrant Agreement
and the Securities Act of 1933, as amended, and requests that Certificates for
such shares be issued and delivered as follows:
Issue to:
---------------------------------------------------
(Name)
---------------------------------------------------
(Address, including Zip Code)
---------------------------------------------------
(Social Security or Tax Identification Number)
Deliver to:
---------------------------------------------------
(Name)
---------------------------------------------------
(Address, including Zip Code)
In full payment of the aggregate purchase price with respect to the
number of shares being purchased upon exercise of this Warrant, the undersigned
hereby (check applicable payment method): (i) |_| tenders payment of $_________
in cash, (ii) |_| tenders payment of $_________ by cashier's check payable to
the order of BOLDER Technologies Corporation or (ii) |_| surrenders to the
Company Warrants to purchase ________ shares of Common Stock. If the Warrant is
exercised hereby (and, if applicable, surrendered to purchase shares of Common
Stock) so as to purchase fewer than all the shares of Common Stock that may be
purchased pursuant to this Warrant, the undersigned requests that a new Warrant
representing the number of full shares for which the Warrant has not been
exercised or surrendered be issued and delivered as set forth below.
Name of Warrant holder or Assignee:
------------------------------
(Please Print)
Address:
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Signature Dated:
(Signature must conform in all respects to name of holder as specified on the
face of the Warrant)
3
<PAGE> 4
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers to the
Assignee named below all of the rights of the undersigned represented by the
within Warrant, with respect to the number of shares of Common Stock set forth
below:
<TABLE>
<CAPTION>
Number of
Shares of Taxpayer Identification
Name of Assignee Address Common Stock Number
- ---------------- ------- ------------ -----------------------
<S> <C> <C> <C>
</TABLE>
and hereby irrevocably authorizes the Company to make such transfer on the
Warrant Register maintained at the principal office of the Company and, if
applicable, to issue to the undersigned a Warrant for the portion of such
Warrant not so sold, assigned or transferred.
Dated:
-------------- ----- ---------------------------------
Signature
(Signature must conform in all respects to name of the Holder as specified on
the face of the Warrant.)
4
<PAGE> 1
EXHIBIT 5.1
ATTORNEYS AT LAW San Francisco, CA
415 693-2000
2595 Canyon Boulevard Palo Alto, CA
Suite 250 650 843-5000
Boulder, CO
80302-6737 Menlo Park, CA
Main 303 546-4000 650 843-5000
Fax 303 546-4099
San Diego, CA
619 550-6000
Denver, CO
303 606-4800
www.cooley.com
JAMES H. CARROLL
303 546-4024
[email protected]
November 8, 1999
BOLDER Technologies Corporation
4403 Table Mountain Parkway
Golden, Colorado 80403
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by BOLDER Technologies Corporation (the "Company") of a
Prospectus Supplement (the "Prospectus Supplement") covering the offering of up
to 2,530,000 shares of the Company's Common Stock, par value $.001 per share
(the "Shares").
In connection with this opinion, we have (i) examined the Company's Registration
Statement on Form S-3 (File No. 333-86235), the related base prospectus (the
"Prospectus") and the Supplemental Prospectus, and (ii) reviewed the Company's
Certificate of Incorporation and Bylaws, as amended, and such other documents,
records, certificates, memoranda and other instruments as we deem necessary as a
basis for this opinion. We also have assumed the genuineness and authenticity of
all documents submitted to us as originals, the conformity to originals of all
documents submitted to us as copies thereof, and the due execution and delivery
of all documents where due execution and delivery are a prerequisite to the
effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when issued and sold in accordance with the Registration
Statement, the Prospectus and the Prospectus Supplement, will be validly issued,
fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Cooley Godward LLP
By: /s/ James H. Carroll
------------------------------
James H. Carroll
