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EXHIBIT 4.1
WARRANT AGREEMENT
November 8, 1999
First Security ▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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 ▇▇▇ ▇▇▇▇▇▇
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 ▇▇▇ ▇▇▇▇▇▇ Inc. at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, 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
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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
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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
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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 ▇▇▇ ▇▇▇▇▇▇ 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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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,
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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
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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
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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
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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
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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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"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
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"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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(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,
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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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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 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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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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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(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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(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
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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
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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
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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
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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
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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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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
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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 ▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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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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/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written
FIRST SECURITY ▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
Name:
Title:
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