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EXHIBIT 10.1
336,200 SHARES
SERIES A CONVERTIBLE PREFERRED STOCK
BOLDER TECHNOLOGIES CORPORATION
PURCHASE AGREEMENT
October 3, 1997
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
BOLDER Technologies Corporation, a Delaware corporation (the
"Company"), confirms its agreement with BT Alex. ▇▇▇▇▇ Incorporated (the
"Initial Purchaser") with respect to the sale by the Company and the purchase
by the Initial Purchaser of 336,200 shares of the Company's Series A
Convertible Preferred Stock (the "Preferred Stock").
The Preferred Stock is convertible into shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), at any time after 60 days
following the latest date of the original issuance thereof, unless previously
redeemed or repurchased, at a conversion price (the "Conversion Price") equal
to $15.00 per share, subject to adjustment as described therein. The Common
Stock issuable upon conversion of the Preferred Stock is sometimes hereinafter
referred to as the "Underlying Stock."
The Company understands that the Initial Purchaser proposes to make an
offering of the Preferred Stock on the terms and in the manner set forth herein
and agrees that the Initial Purchaser may resell, subject to the conditions set
forth herein, all or a portion of the Preferred Stock to purchasers
("Subsequent Purchasers") at any time after the date of this Agreement. The
Preferred Stock will be offered and sold through the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon exemption therefrom. Pursuant to the terms of the
Preferred Stock, investors that acquire Preferred Stock may only resell or
otherwise transfer such Preferred Stock if such Preferred Stock are hereafter
registered under the Securities Act or if an exemption from the registration
requirements of the Securities Act is available (including the exemption
afforded by Rule 144A ("Rule 144A") of the rules and regulations promulgated
under the Securities Act by the Securities and Exchange Commission (the
"Commission")).
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The Company has prepared and delivered to the Initial Purchaser copies
of a preliminary offering memorandum dated July 23, 1997 (the "Preliminary
Offering Memorandum"), and has prepared and will deliver to the Initial
Purchaser, on the date hereof, copies of a final offering memorandum dated
October 3, 1997 (the "Offering Memorandum"), setting forth information
regarding the Company, the Preferred Stock and the Underlying Stock. Each of
the Preliminary Offering Memorandum and the Offering Memorandum are to be used
by the Initial Purchaser in connection with their solicitation of purchases of,
or offering of, the Preferred Stock. "Offering Memorandum," unless stated to
the contrary, means, with respect to any date or time referred to in this
Agreement, the most recent offering memorandum (whether the Preliminary
Offering Memorandum or the Offering Memorandum, or any amendment or supplement
to such documents), including exhibits thereto and any documents incorporated
therein by reference, which has been prepared and delivered by the Company to
the Initial Purchaser in connection with their solicitation of purchasers of,
or offering of, the Preferred Stock. The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum and the Offering
Memorandum in connection with the offering and sale of the Preferred Stock.
Holders (including subsequent transferees) of the Preferred Stock will
have the registration rights set forth in the Registration Rights Agreement
(the "Registration Rights Agreement"). Pursuant to the Registration Rights
Agreement, the Company has agreed to file with the Commission a shelf
registration statement on Form S-3 pursuant to Rule 415 under the Securities
Act (the "Shelf Registration Statement") to cover public resales of the
Underlying Stock by the Holders thereof. The Company has also agreed to file
with the Commission a registration statement on Form S-3 to register the resale
of the Preferred Stock.
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Offering Memorandum. For purposes hereof,
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as applicable.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," "stated," or described"
in the Offering Memorandum (or other references of like import) shall be deemed
to mean and include all such financial statements and schedules and other
information which is incorporated in the Offering Memorandum; and all
references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Exchange Act which is incorporated by reference in the Offering Memorandum.
All references in this Agreement to information which is "required to be set
forth in an amended or supplemented Offering Memorandum" shall be deemed to
refer to information which would be subject to disclosure by the Company to
Holders of the Preferred Stock pursuant to Rule 144A(d)(4) under the Securities
Act.
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Section 1. Representations and Warranties. The Company
represents and warrants to, and agrees with, the Initial Purchaser as of the
date hereof, and as of the Closing Date, as follows:
(a) The Offering Memorandum, as of its date, together
with each amendment or supplement thereto, as of its date, contains all the
information that, if requested by a prospective purchaser, would be required to
be provided pursuant to Rule 144A(d)(4) under the Securities Act. The Offering
Memorandum does not, and at the Closing Date will not, and any amendment or
supplement thereto, if any, as of its date, will not, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The preceding sentence does not apply to
information contained in or omitted from the Preliminary Offering Memorandum or
the Offering Memorandum (or any supplement or amendment thereto) in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of any Initial Purchaser specifically for use therein (the "Initial
Purchaser's Information"). The parties acknowledge and agree that the Initial
Purchaser's Information consists solely of the last paragraph at the bottom of
the front cover page concerning the terms of the offering by the Initial
Purchaser, the legend concerning overallotment and trading activities of the
Initial Purchaser on the inside front cover page and the first, second and
sixth paragraphs under the caption "Plan of Distribution" in the Offering
Memorandum. The Company is subject to Sections 13 or 15(d) of the Exchange
Act.
(b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and corporate authority to own or lease its
properties and conduct its business as described in the Offering Memorandum.
The Company is duly qualified and licensed and in good standing as a foreign
corporation in each jurisdiction in which its ownership or leasing of any
properties or the character of its operations requires such qualification or
licensing, except where the failure to be so qualified or licensed would not
have a material adverse effect on the condition, financial or otherwise,
results of operations or business of the Company, taken as a whole (a "Material
Adverse Effect"). The Company has no subsidiaries, corporate or otherwise.
(c) The information set forth under the caption
"Capitalization" in the Offering Memorandum is true and correct. The Company
is not a party to or bound by any instrument, agreement or other arrangement,
including, but not limited to, any voting trust agreement, stockholders'
agreement or other agreement or instrument, affecting the securities or rights
or obligations of securityholders of the Company or providing for any of them
to issue, sell, transfer or acquire any capital stock, rights, warrants,
options or other securities of the Company, except for this Agreement and as
set forth in the Offering Memorandum. The Preferred Stock and the Company's
other capital stock conform in all material respects to all statements with
respect thereto contained in the Offering Memorandum.
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(d) All issued and outstanding shares of capital stock or
other securities evidencing equity ownership of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, as
applicable; and none of such securities were issued in violation of the
preemptive rights of any securityholder of the Company or similar contractual
rights granted by the Company. The issuance of the Preferred Stock has been
duly authorized and, when validly issued, delivered and paid for in the manner
contemplated by this Agreement, will be duly authorized, validly issued, fully
paid and non-assessable. The shares of Common Stock issuable upon conversion
of the Preferred Stock will, upon such issuance, be duly authorized, validly
issued, fully paid and non-assessable, and the Company has duly authorized and
reserved for issuance upon conversion of the Preferred Stock the shares of
Common Stock issuable upon such conversion. The Preferred Stock and the
Underlying Stock are not and will not under existing agreements by which the
Company is bound be subject to any preemptive or other similar rights of any
securityholder of the Company; all corporate action required to be taken for
the authorization, issuance and sale of the Preferred Stock and the Underlying
Stock has been duly and validly taken; and the certificates representing the
Preferred Stock and the Underlying Stock will be in due and proper form. Upon
the issuance and delivery pursuant to the terms of this Agreement of the
Preferred Stock to be sold by the Company hereunder and thereunder, the Initial
Purchaser will acquire good and marketable title thereto free and clear of any
lien, charge, claim, encumbrance, pledge, security interest, defect or other
restriction or equity of any kind whatsoever.
(e) The historical financial statements of the Company
together with the related notes thereto incorporated by reference in the
Preliminary Offering Memorandum and the Offering Memorandum fairly present in
all material respects the financial position, income, changes in stockholders'
equity, cash flow and results of operations of the Company at the respective
dates and for the respective periods to which they apply and such historical
financial statements have been prepared in conformity with generally accepted
accounting principles and the Rules and Regulations, consistently applied
throughout the periods involved. Except as described in the Offering
Memorandum, there has been no material adverse change or development involving
a prospective material adverse change in the condition, financial or otherwise,
results of operations or business of the Company taken as a whole, whether or
not arising in the ordinary course of business, since the date of the financial
statements included in the Offering Memorandum and the outstanding debt,
property, both tangible and intangible, and business of the Company conform in
all material respects to the descriptions thereof contained in the Offering
Memorandum. Financial information set forth in the Offering Memorandum under
the headings "Offering Memorandum Summary - Summary Financial Data,"
"Capitalization" and "Selected Financial Data" and the information incorporated
by reference in the Offering Memorandum under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
fairly present in all material respects, on the basis stated in the Offering
Memorandum, the information set forth therein and have been derived from or
compiled on a basis consistent with that of the audited financial statements
included in the Offering Memorandum.
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(f) Since the respective dates as of which information is
given in the Offering Memorandum, except as otherwise stated or contemplated
therein, (i) there have been no transactions entered into by the Company, other
than those in the ordinary course of business, which are material with respect
to the Company, and (ii) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(g) The Company has filed all tax returns required to be
filed by it in any jurisdiction, other than those filings being contested in
good faith, and has paid all federal, state, local and foreign taxes shown to
be due on such returns or claimed to be due from such entities, other than
those (i) currently payable without penalty or interest or (ii) being contested
in good faith, in either case, for which the Company is liable, and has
established adequate reserves in the Company's financial statements (in
accordance with generally accepted accounting principles) for such taxes which
are not due and payable.
(h) The Company maintains liability, casualty and other
insurance (subject to customary deductions and retentions) with responsible
insurance companies against such risk as is customary for companies engaged in
similar businesses as the Company operates (which may include self-insurance in
comparable form to that maintained by such responsible companies).
(i) There is no action, suit, proceeding, litigation or
governmental proceeding pending or, to the knowledge of the Company, threatened
against, or involving the properties or businesses of, the Company which (i)
questions the validity of the capital stock of the Company or of this Agreement
or the Registration Rights Agreement or of any action taken or to be taken by
the Company pursuant to or in connection with this Agreement or the
Registration Rights Agreement or (ii) would be reasonably likely to result in a
Material Adverse Effect, except as set forth in the Offering Memorandum.
(j) The Company has full legal right, power and authority
to authorize, issue, deliver and sell the Preferred Stock and the Underlying
Stock upon conversion of the Preferred Stock, to enter into this Agreement and
the Registration Rights Agreement and to consummate the transactions provided
for in such agreements; and this Agreement has been duly and properly
authorized, executed and delivered by the Company and, when the Company has
duly executed and delivered the Registration Rights Agreement (assuming the due
execution and delivery therein by the Initial Purchaser), this Agreement and
the Registration Rights Agreement will each constitute a legal, valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or similar laws now or
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hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and except to the extent that rights to
indemnification and contribution contained in this Agreement may be limited by
federal or state securities laws or the public policy relating thereto.
(k) None of the Company's issue and sale of the Preferred
Stock and the Underlying Stock upon the conversion of the Preferred Stock, the
execution or delivery of this Agreement and the Registration Rights Agreement,
its performance hereunder and thereunder, its consummation of the transactions
contemplated herein and therein or the conduct by it of its businesses as
described in the Offering Memorandum or any amendments or supplements thereto
conflicts or will conflict with or results or will result in any breach or
violation of any of the terms or provisions of, or constitutes or will
constitute a default under, or results or will result in the creation or
imposition of any lien, charge, claim, encumbrance, pledge, security interest,
defect or other restriction or equity of any kind whatsoever upon any property
or assets of the Company pursuant to the terms of, (i) the Certificate of
Incorporation or by-laws of the Company, (ii) any license, contract, indenture,
mortgage, deed of trust, voting trust agreement, stockholders' agreement, note,
loan or credit agreement or other agreement or instrument to which the Company
is a party or by which it is or may be bound or to which its properties or
assets is or may be subject, or any indebtedness, or (iii) any statute,
judgment, decree, order, rule or regulation applicable to the Company of any
arbitrator, court, regulatory body or administrative agency or other
governmental agency or body, having jurisdiction over the Company or any of
their respective activities or properties except, in the case of clauses (ii)
and (iii), such defaults, impositions and violations that would not have a
Material Adverse Effect.
(l) No consent, approval, authorization or order of, and
no filing with, any court, arbitrator, regulatory body, government agency or
other body, domestic or foreign, is required for the execution, delivery or
performance of this Agreement, the Registration Rights Agreement (execution and
delivery only) or the transactions contemplated hereby or thereby.
(m) The Company has no material contingent obligations
which are not disclosed in the Company's financial statements which are
included in the Offering Memorandum.
(n) Except as disclosed in the Offering Memorandum, the
Company is not or with the giving of notice or lapse of time or both, will not
be, in violation of or in default under its Certificate of Incorporation or
by-laws or under any agreement, lease, contract, indenture or other instrument
or obligation to which it is a party or by which it, or any of its properties,
is bound and which default would have a Material Adverse Effect.
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(o) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions
herein contemplated (except such additional steps as may be required by the
Commission, or such additional steps as may be necessary to qualify the
Securities for sale by the Initial Purchaser under state securities or Blue Sky
laws) has been obtained or made and is in full force and effect.
(p) The Company holds all material licenses, certificates
and permits from governmental authorities which are necessary to the conduct of
its businesses; and the Company has no knowledge that either the Company has
infringed any patents, patent rights, trade names, trademarks or copyrights,
which infringement is material to the business of the Company taken as a whole.
The Company knows of no material infringement by others of patents, patent
rights, trade names, trademarks or copyrights owned by or licensed to the
Company.
(q) The Company is not an "investment company" within the
meaning of such term under the Investment Company Act of 1940 and the rules and
regulations of the Commission thereunder.
(r) The Company maintains a system of internal accounting
controls 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 to permit preparation of financial
statements in conformity with generally accepted accounting principles and 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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(s) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA)
for which the Company would have any liability; the Company has not incurred
and does not expect to incur liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any "pension plan" or (ii) Sections 412
or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.
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(t) The Company believes that it is in material
compliance with all federal, state, local and foreign laws and regulations
respecting employment and employment practices, terms and conditions of
employment and wages and hours. There are no pending investigations involving
the Company by the U.S. Department of Labor or any other governmental agency
responsible for the enforcement of such federal, state, local or foreign laws
and regulations. Except as otherwise disclosed in the Offering Memorandum,
there is no unfair labor practice charge or complaint against the Company
pending before the National Labor Relations Board or any strike, picketing,
boycott, dispute, slowdown or stoppage pending or threatened against or
involving the Company. Except as otherwise disclosed in the Offering
Memorandum, no representation question exists respecting the employees of the
Company, and no collective bargaining agreement or modification thereof is
currently being negotiated by the Company. No grievance or arbitration
proceeding is pending under any expired or existing collective bargaining
agreements of the Company. Except as disclosed in the Offering Memorandum, no
material labor dispute with the employees of the Company exists or, to the
knowledge of the Company, is imminent.
(u) Neither the Company nor any of its affiliates has
taken or will take, directly or indirectly, any action designed to or which has
constituted or which might be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Preferred Stock
or otherwise.
(v) The Company has good and marketable title to, or
valid and enforceable leasehold estates in, all items of real and personal
property which are material to its business, in each case, except as disclosed
in the Offering Memorandum, free and clear of all liens, charges, claims,
encumbrances, pledges, security interests, defects and other restrictions that
would have a Material Adverse Effect.
(w) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain of
the financial statements included as part of the Offering Memorandum, are
independent certified public accountants of the Company as required by the
Securities Act and the Rules and Regulations.
(x) The Preferred Stock satisfy the eligibility
requirements of Rule 144A(d)(3) under the Securities Act, and the Preferred
Stock are eligible for trading in the Private Offerings, Resale and Trading
through Automated Linkages ("PORTAL") market. The Company's Common Stock is
listed on the Nasdaq Stock Market (National Market).
(y) Other than payments required or allowed by applicable
law of the United States, neither the Company nor, to the knowledge of the
Company, any officer, director or employee of the Company or any other person
acting on behalf of the Company or for the benefit of the Company, has at any
time during the last five years, (i)
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made any unlawful gift or contribution to any candidate for federal, state,
local or foreign political office, or failed to disclose fully any such gift or
contribution in violation of law, or (ii) made any payment to any federal,
state, local or foreign governmental officer or official, which would be
reasonably likely to subject the Company to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or foreign). The
Company's internal accounting controls are sufficient to cause the Company to
comply with the Foreign Corrupt Practices Act of 1977, as amended.
(z) The minute books of the Company have been made
available to the Initial Purchaser, contain a complete summary of all meetings
and actions of the directors and stockholders of the Company since the time of
their respective incorporation and reflect all transactions referred to in such
minutes accurately in all respects.
(aa) The Company has not been notified or is not otherwise
aware that it is potentially liable, or is considered potentially liable, under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, or any similar law ("Environmental Laws"). To the best of
the Company's knowledge, the Company is in substantial compliance with all
applicable existing Environmental Laws, except for such instances of
non-compliance which would not have a Material Adverse Effect. The term
"Hazardous Material" means (i) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, (ii) any "hazardous waste" as defined by the Resource Conservation
and Recovery Act, as amended, (iii) any petroleum or petroleum product, (iv)
any polychlorinated biphenyl and (v) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material, waste or substance regulation under or
within the meaning of any other Environmental Law. To the best of the
Company's knowledge, no disposal, release or discharge of "Hazardous Material"
in material violation of applicable Environmental Laws has occurred on, in, at
or about any of the facilities or properties of the Company.
(bb) Assuming the accuracy of the statements contained in
Sections 2(b) and 2(c) hereof, neither the Company nor any affiliate (as such
term is defined in Rule 501(b) under the Securities Act) of the Company has,
directly or through any agent, sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any "security" (as defined in the
Securities Act), which is or will be integrated with the sale of the Preferred
Stock in a manner that would require the registration of the Preferred Stock
under the Securities Act. The Company has not incurred any liability for a
fee, commission, or other compensation on account of the employment of a broker
or finder in connection with the transactions contemplated by this Agreement
other than as contemplated hereby.
(cc) None of the Company, any affiliate (as such term is
defined in Rule 501 (b) under the Securities Act) of the Company and any other
person acting on its or their behalf has engaged, in connection with the
offering of the Preferred Stock, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
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Section 2. Sale to the Initial Purchaser.
(a) On the basis of the representations, warranties and
agreements contained herein, and subject to the terms and conditions set forth
herein, the Company agrees to issue and sell to the Initial Purchaser and the
Initial Purchaser agrees to purchase the Preferred Stock as set forth on
Schedule A attached hereto.
(b) The Initial Purchaser has advised the Company that it
is its intention, as promptly as it deems appropriate after the Company shall
have furnished the Initial Purchaser with copies of the Offering Memorandum, to
resell the Preferred Stock pursuant to the procedures and upon the terms set
forth in the Offering Memorandum, including not to solicit any offer to buy or
offer to sell the Preferred Stock by means of any form of general solicitation
or general advertising (within the meaning of Regulation D under the Securities
Act) or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act. The Initial Purchaser warrants and agrees with the
Company that it has solicited and will solicit offers (the "Exempt Resales")
for Preferred Stock only from, and will offer Preferred Stock only to, persons
that it reasonably believes to be "Qualified Institutional Buyers" or "QIBs" in
transactions that meet the requirements for an exemption from the registration
requirements of the Securities Act under Rule 144A. The QIBs are referred to
herein as "Eligible Purchasers." The Initial Purchaser represents and warrants
that it is not a pension or welfare plan (as defined in Section 3 of ERISA) and
is not acquiring the Preferred Stock on behalf of a pension or welfare plan.
The Company acknowledges and agrees that the Initial Purchaser may sell
Preferred Stock to any affiliate of the Initial Purchaser and any such
affiliate may sell Preferred Stock purchased by it to the Initial Purchaser.
The Initial Purchaser agrees that, prior to or simultaneously with the
confirmation of sale by it to any Subsequent Purchaser of any of the Preferred
Stock purchased from the Company pursuant hereto, the Initial Purchaser shall
furnish to that Subsequent Purchaser a copy of the Offering Memorandum (and any
amendment thereof or supplement thereto that the Company shall have furnished
to the Initial Purchaser prior to the date of such confirmation of sale). In
addition to the foregoing, the Initial Purchaser agrees and understands that
the Company and, for purposes of the opinions to be delivered to the Initial
Purchaser pursuant to Sections 5(b) and (c) hereof, counsel to the Company and
to the Initial Purchaser, respectively, may rely upon the accuracy and truth of
the representations, warranties and covenants in this Section 2 and the Initial
Purchaser hereby consent to such reliance.
(c) The Initial Purchaser hereby represents and warrants
to, and agrees with, the Company that (i) it is a QIB within the meaning of
Rule 144A under the Securities Act; (ii) no form of general solicitation or
general advertising (within the meaning of Regulation D under the Securities
Act) has been or will be used by the Initial
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Purchaser or any of its representatives in connection with the offer and sale
of any of the Preferred Stock including, but not limited to, articles, notices
or other communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising
except pursuant to a registered public offering as provided in the Registration
Rights Agreement; and (iii) it will otherwise act in accordance with the terms
and conditions set forth in this Agreement in connection with the placement of
the Preferred Stock contemplated hereby.
Section 3. Delivery of and Payment for the Preferred Stock.
Delivery of, and payment for, the Preferred Stock shall be made at 9:30 a.m.,
Baltimore, Maryland time, on October 8, 1997, or at such other date or time,
not later than ten full business days thereafter, as shall be agreed by the
Initial Purchaser and the Company (such date and time being referred to herein
as the "Closing Date"). Delivery of, and payment for, the Preferred Stock
shall be made at the offices of BT Alex. ▇▇▇▇▇ Incorporated, Baltimore,
Maryland, or any such other place as shall be agreed by the Initial Purchaser
and the Company. Payment shall be made to the Company by wire transfer of same
day funds payable to the order of the Company, against delivery to the Initial
Purchaser of certificates for the Preferred Stock to be purchased by it. The
Company shall make the certificates for the Preferred Stock available for
examination and packaging by the Initial Purchaser not later than 10:00 a.m.
(Baltimore, Maryland time) on the last business day prior to the Closing Date
at the offices of BT Alex. ▇▇▇▇▇ Incorporated, Baltimore, Maryland.
Section 4. Covenants and Agreements of the Company. The Company
covenants and agrees with the Initial Purchaser as follows:
(a) The Company will furnish promptly to the Initial
Purchaser and counsel for the Initial Purchaser, without charge, as many copies
of the Preliminary Offering Memorandum and the Offering Memorandum (and of any
amendments or supplements thereto) as may be reasonably requested; to furnish
to the Initial Purchaser on the date hereof a copy of the independent
accountants' report included by reference in the Offering Memorandum signed by
the accountants rendering such report; and the Company hereby consents to the
use of the Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments and supplements thereto, in connection with Exempt Resales of the
Preferred Stock.
(b) The Company will notify the Initial Purchaser
promptly, and confirm such advice in writing, of (x) any filing made by the
Company of information relating to the offering of the Preferred Stock with any
securities exchange or any other regulatory body in the United States or any
other jurisdiction, and (y) prior to the completion of the placement of the
Preferred Stock by the Initial Purchaser as evidenced by a notice in writing
from the Initial Purchaser to the Company, any material adverse changes or
developments involving any material prospective change in the condition,
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financial or otherwise, results of operations or business of the Company taken
as a whole, in or affecting the earnings, business affairs or business
prospects of the Company which (i) make any statement of a material fact made
in the Offering Memorandum false or misleading in any material respect or (ii)
if not disclosed in the Offering Memorandum, would constitute a material
omission therefrom. In such event or if during such time any event shall occur
as a result of which it is necessary, in the reasonable opinion of the Company,
its counsel, the Initial Purchaser or counsel for the Initial Purchaser, to
amend or supplement the Offering Memorandum in order that the Offering
Memorandum not include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances then existing, the Company will
forthwith amend or supplement the Offering Memorandum by preparing and
furnishing to each Initial Purchaser an amendment or amendments of, or a
supplement or supplements to, the Offering Memorandum (in form and substance
satisfactory in the reasonable opinion of counsel for the Initial Purchaser) so
that, as so amended or supplemented, the Offering Memorandum will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a Subsequent Purchaser,
not misleading.
(c) The Company agrees that if the delivery of the
Offering Memorandum is required at any time in connection with the sale of the
Preferred Stock and if at such time any events shall have occurred as a result
of which the Offering Memorandum as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when the Offering Memorandum is
delivered, not misleading, or if for any other reason it shall be necessary at
such time to amend or supplement the Offering Memorandum in order to comply
with any law, the Company will notify the Initial Purchaser immediately
thereof, and to promptly prepare and furnish to the Initial Purchaser an
amended Offering Memorandum or a supplement to the Offering Memorandum so that
statements in the Offering Memorandum, as so amended or supplemented, will not,
in light of the circumstances under which they were made when it is so
delivered, be misleading, or so that the Offering Memorandum will comply with
applicable law. The Initial Purchaser's delivery of any such amendment or
supplement shall not constitute a waiver of any of the conditions set forth in
Section 5 hereof.
(d) The Company agrees to not amend or supplement the
Offering Memorandum without the consent of the Initial Purchaser, which consent
shall not be unreasonably withheld, and to promptly advise the Initial
Purchaser when any document filed under the Exchange Act which is incorporated
into the Offering Memorandum shall have been filed with the Commission.
(e) The Company agrees, during the five-year period
following the Closing Date, to furnish to the Initial Purchaser all reports and
other communications
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furnished to shareholders and copies of all reports, documents, information and
financial statements filed with the Commission or any national securities
exchange on which any class of securities of the Company shall be listed.
(f) The Company will use the proceeds from the sale of
the Preferred Stock in the manner described in the Offering Memorandum.
(g) The Company will, in connection with the offering of
the Preferred Stock, make its officers, employees, independent accountants and
legal counsel reasonably available upon request by the Initial Purchaser.
(h) The Company will use its reasonable best efforts to
do and perform all things required to be done and performed under this
Agreement by it that are within its control prior to or after the Closing Date
and to use reasonable efforts to satisfy all conditions precedent on its part
to the delivery of the Preferred Stock.
(i) None of the Company, its affiliates (as defined in
Rule 501(b) under the ▇▇▇▇ ▇▇▇) or any person (other than the Initial Purchaser
and their respective affiliates, as to whom the Company makes no
representation) acting on its behalf will engage, in connection with the
offering of the Preferred Stock, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the 1933 Act, nor will any
person acting on its or their behalf, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Preferred Stock under
the Securities Act.
(j) The Company will not, so long as the Preferred Stock
are outstanding, be or become, or be or become owned by, an open-end investment
company, unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act, and
will not be or become, or be or become owned by, a closed-end investment
company required to be registered, but not registered thereunder.
(k) The Company agrees that no future offer and sale of
debt securities of the Company of any class will be made if, as a result of the
doctrine of "integration" referred to in Rule 502 under the Securities Act,
such offer and sale would render invalid (for the purpose of (i) the sale of
the Preferred Stock by the Company to the Initial Purchaser, (ii) the resale of
the Preferred Stock by the Initial Purchaser to Subsequent Purchasers or (iii)
the resale of the Preferred Stock by such Subsequent Purchasers to others) the
exemption from the registration requirements of the Securities Act provided by
Section 4(2) thereof or by Rule 144A.
(l) So long as any of the Preferred Stock or Common Stock
issued upon the conversion of the Preferred Stock are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Company
will, during any period in which it is not subject to and in compliance with
Sections 13 or 15(d) of the Exchange Act,
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provide to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities, upon
the request of such holder or prospective purchaser, any information required
to be provided by Rule 144A(d)(4) under the Securities Act. This covenant is
intended to be for the benefit of the holders, and prospective purchasers
designated by such holders, from time to time of such restricted securities.
(m) The Company will comply with the provisions of the
Registration Rights Agreement;
(n) The Company will maintain a transfer agent and, if
necessary under the laws of the jurisdiction of incorporation of the Company, a
registrar (which may be the same entity as the transfer agent) for the Common
Stock.
(o) The Company will use its reasonable efforts to permit
the Preferred Stock to be designated as PORTAL securities in accordance with
the rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to the PORTAL market.
Prior to the Closing Date, the Company shall have filed a Certificate
of Designation with respect to the Preferred Stock that is in form and
substance reasonably satisfactory to Piper & Marbury L.L.P.
Section 5. Payment of Expenses. The Company hereby agrees to
pay all of the expenses and fees incident to the performance of its obligations
under this Agreement and the Registration Rights Agreement, including,
regardless of whether any sale of the Preferred Stock to the Initial Purchaser
is consummated: (i) the fees and expenses of accountants and counsel for the
Company, (ii) all costs and expenses incurred in connection with the
preparation, duplication, printing (including mailing and handling charges),
and delivery to the Initial Purchaser of each Preliminary Offering Memorandum
and the Offering Memorandum and any amendments and supplements thereto, (iii)
all costs and expenses incurred in connection with the reproduction of this
Agreement, the Registration Rights Agreement and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Preferred Stock, (iv) the printing, issuance and delivery of the Preferred
Stock, (v) costs and expenses of travel, food and lodging of Company personnel
in connection with the "road show," information meetings and presentations,
(vi) fees and expenses of the transfer agent and registrar, (vii) all costs
related to the qualification, if applicable, of the Preferred Stock and the
shares of Common Stock issuable upon conversion of the Preferred Stock under
state securities laws, (viii) any fees incurred in connection with the
designation of the Preferred Stock as PORTAL securities in connection with the
PORTAL market and designation of the Underlying Stock for quotation on the
Nasdaq Stock Market (National Market), and (ix) all other costs and expenses
incident to the performance of its obligations hereunder which are not
specifically otherwise provided for in this Section. The Initial Purchaser
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shall pay its own costs and expenses, including costs and expenses of its
counsel, any transfer taxes on Preferred Stock which it may sell and expenses
incident to its sale of Preferred Stock.
Section 6. Conditions of the Initial Purchaser's Obligations.
The obligations of the Initial Purchaser hereunder are subject to the
continuing accuracy of the representations and warranties of the Company herein
as of the date hereof and as of the Closing Date as if they had been made on
and as of the Closing Date; and the performance by the Company on and as of the
Closing Date of its covenants and obligations hereunder and to the following
further conditions:
(a) The Initial Purchaser shall not have advised the
Company that the Offering Memorandum, or any supplement or amendment thereto,
contains an untrue statement of fact which is material, or omits to state a
fact which is material and is required to be stated therein or is necessary to
make the statements, in light of the circumstances under which they were made,
not misleading. No order suspending the sale of the Preferred Stock in any
jurisdiction shall have been issued on the Closing Date and no proceedings for
that purpose shall have been instituted or shall be contemplated.
(b) At Closing Date, the Initial Purchaser shall have
received the favorable opinion of ▇▇▇▇▇▇ Godward LLP, counsel to the Company,
dated the Closing Date, addressed to the Initial Purchaser and in form and
substance reasonably satisfactory to Piper & Marbury L.L.P., to the effect
that:
(i) The Company is a corporation validly existing
and in good standing under the laws of the State of Delaware.
(ii) The Company has the full corporate power and
corporate authority to own, lease and operate its business as described in the
Offering Memorandum.
(iii) The outstanding shares of capital stock of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable and to such counsel's knowledge were not issued in violation
of any preemptive rights. The Preferred Stock has been duly authorized and,
upon issuance and delivery against payment therefor, in accordance with the
terms of this Agreement, will be validly issued, fully paid and non-assessable.
(iv) The shares of Common Stock initially issuable
upon conversion of the Preferred Stock (i) have been duly authorized and
validly reserved for issuance upon such conversion, and such shares, when
issued and delivered upon such conversion in the manner provided for by the
Preferred Stock, will be validly issued, fully paid and non-assessable and (ii)
will conform to the description thereof contained in the Offering Memorandum.
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(v) The Preferred Stock and the shares of Common
Stock issuable upon conversion of the Preferred Stock, to the best of such
counsel's knowledge, are not subject to preemptive or other similar rights.
(vi) There is no restriction upon the voting or
transfer of any capital stock of the Company pursuant to the Company's
Certificate of Incorporation or by-laws, in each case as amended, or in any
agreement or other instrument to which the Company is a party of which such
counsel has knowledge except as described in the Offering Memorandum; and no
holders of securities of the Company have rights to the registration thereof
under any agreement known to such counsel except as described in the
Registration Rights Agreement and the Offering Memorandum.
(vii) This Agreement and the Registration Rights
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, and have been duly executed and delivered by the Company.
(viii) Assuming the accuracy of the Company's
representations and warranties set forth in subparagraph (a) of Section 1, the
accuracy of the Initial Purchaser's representations and warranties set forth in
subparagraphs (b) and (c) of Section 2, and compliance with the procedures set
forth in Section 7 hereof, and in reliance upon the acknowledgments,
representations and agreements made, or deemed to be made, by each purchaser of
Preferred Stock as set forth in the Offering Memorandum, the offer and sale of
the Preferred Stock to the Initial Purchaser or the initial offer and resale of
the Preferred Stock by the Initial Purchaser, in each case, in the manner
contemplated by this Agreement and the Offering Memorandum are exempt from the
registration requirements of the Securities Act it being understood that no
opinion is expressed as to any subsequent resale of any such Preferred Stock.
(ix) The Preferred Stock, the Common Stock
issuable upon the conversion of the Preferred Stock and the Registration Rights
Agreement conform in all material respects to the descriptions thereof
contained in the Offering Memorandum, and the form of certificate used to
evidence the Preferred Stock is in due and proper form under Delaware law.
(x) To the best of such counsel's knowledge, and
except as disclosed in the Offering Memorandum, there is no action, suit or
proceeding at law or in equity or by or before any governmental instrumentality
or other agency now pending or threatened against the Company which would
require disclosure in the Offering Memorandum.
(xi) The information in the Offering Memorandum
under the caption "Description of Capital Stock" to the extent that it
constitutes matters of law, summaries of legal matters, the Company's
Certificate of Incorporation, bylaws or legal proceedings, or legal
conclusions, fairly summarizes the matters referred to therein. To
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the best of such counsel's knowledge, there are no statutes or regulations that
are required to be described in the Offering Memorandum that are not described
as required.
(xii) To the best of such counsel's knowledge,
there are no franchises, contracts, indentures, mortgages, loan or credit
agreements, notes, leases or other instruments required to be described or
referred to in the Offering Memorandum, other than those described or referred
to therein.
(xiii) To the best of such counsel's knowledge, no
authorization, consent, approval of or qualification with, any governmental
authority to required for the performance by the Company of its obligations
under this Agreement or the Registration Rights Agreement, except such as may
be required under state or other blue sky laws in connection with the purchase
and distribution of the Preferred Stock (as to which we express no opinion) by
the Initial Purchaser and except such as have been made or obtained.
(xiv) The Registration Rights Agreement is a legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except (a) as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganizations, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at laws), (b) rights to indemnity and
contribution thereunder may be limited by federal or state securities laws or
the policies underlying such laws, and (c) subject to general equity principles
and to limitations on the availability of equitable relief, including specific
performance.
(xv) The Company is not and will not become, as a
result of the consummation of the transactions contemplated by the offer and
sale of the Preferred Stock, and application of the net proceeds therefrom as
described in the Offering Memorandum, an "investment company" as such term is
defined in the 1940 Act.
(c) On or prior to the Closing Date, the Initial
Purchaser shall have received from Piper & Marbury L.L.P., counsel for the
Initial Purchaser, such opinion or opinions with respect to the validity of the
Preferred Stock, the Underlying Stock, the Offering Memorandum and other
related matters as the Initial Purchaser may request and Piper & Marbury L.L.P.
shall have received such papers and information as they request to enable it to
pass upon such matters.
(d) ▇▇▇▇▇▇ Godward LLP shall state in the opinion letter
contemplated by Section 6(b) that such counsel has participated in conferences
with officers and other representatives of each of the Company and
representatives of the independent public accountants for the Company and the
Initial Purchaser, at which conferences the contents of the Offering Memorandum
and related matters were discussed, and, although such counsel is not passing
upon, and does not assume any responsibility for, the accuracy,
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completeness or fairness of the statements contained in the Offering Memorandum
and have made no independent check or verification thereof, on the basis of the
foregoing, no facts have come to the attention of such counsel which has lead
them to believe that the Offering Memorandum, as of its date contained an
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, in light of the circumstances in which they were made, except that
such counsel need express no opinion or belief with respect to the financial
statements and related notes, the pro forma financial information and other
financial, statistical or accounting data included the Offering Memorandum or
excluded therefrom).
(e) At the Closing Date, the Initial Purchaser shall have
received a certificate of the Company signed by the principal executive officer
and by the chief financial or chief accounting officer of the Company, in their
capacities as such, dated the Closing Date, to the effect that each of such
persons has carefully examined the Offering Memorandum, this Agreement and the
Registration Rights Agreement, and that:
(i) the representations and warranties of the
Company in this Agreement and the Registration Rights Agreement are true and
correct, as if made on and as of the Closing Date, and the Company has complied
with all agreements and covenants and satisfied all conditions contained in
this Agreement and the Registration Rights Agreement on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the qualification or
exemption from qualification of the Preferred Stock shall have been issued and
no proceedings for that purpose shall have been commenced or, to the knowledge
of the Company, be contemplated;
(iii) since the date of the most recent financial
statements included in the Offering Memorandum, there has been no material
adverse change in the condition, financial or otherwise, results of operation
or business of the Company, taken as a whole, except as set forth in the
Offering Memorandum;
(iv) none of the Offering Memorandum or any such
amendment or supplement includes any 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; and
(v) subsequent to the respective dates as of
which information is given in the Offering Memorandum: (a) the Company has not
incurred up to and including the Closing Date, other than in the ordinary
course of its business, any material liabilities or obligations, direct or
contingent, except as disclosed in the Offering Memorandum; (b) the Company has
not paid or declared any dividends or other distributions on its capital stock;
(c) the Company has not entered into any material transactions not in the
ordinary course of business, except as disclosed in the Offering Memorandum;
(d) there has not been any material change in the capital stock; (e) the
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Company has not sustained any material loss or damage to its property or
assets, whether or not insured; and (f) there is no litigation which is pending
or to the best of the Company's knowledge threatened against the Company or any
affiliated party of any of the foregoing which would be reasonably likely to
have a Material Adverse Effect and which is required to be set forth in an
amended or supplemented Offering Memorandum which has not been set forth.
(f) On or before the date hereof the Initial Purchaser
shall have received a letter, dated such date, addressed to the Initial
Purchaser and the Company in form and substance satisfactory in all respects to
the Initial Purchaser and Piper & Marbury L.L.P., from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Offering
Memorandum including the following:
(i) confirming that they are independent
certified public accountants with respect to the Company within the meaning of
the Securities Act and the Exchange Act and the applicable Rules and
Regulations;
(ii) stating that it is their opinion that the
consolidated financial statements of the Company included in the Offering
Memorandum or incorporated by reference therein comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act; and
(iii) stating that they have compared specific
dollar amounts, numbers of shares, percentages of revenues and earnings,
statements and/or other financial information pertaining to the Company set
forth in the Offering Memorandum in each case to the extent that such amounts,
numbers, percentages, statements and information may be derived from the
general accounting records, including work sheets, of the Company and excluding
any questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries and other
appropriate procedures (which procedures need not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement.
(g) At the Closing Date, the Initial Purchaser shall have
received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of the Closing Date to the
effect that they reaffirm that statements made in the letter furnished pursuant
to subsection (f) of this Section 6, except that the specified date referred to
shall be a date not more than five (5) days prior to the Closing Date to the
further effect that they have carried out procedures as specified in clause
(iii) of subsection (f) of this Section 6 with respect to certain amounts,
percentages and financial information as specified by the Initial Purchaser and
deemed to be a part of the Offering Memorandum and have found such amounts,
percentages and financial information to be in agreement with the records
specified in such clause (iii).
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(h) At the Closing Date, Piper & Marbury L.L.P. shall
have been furnished with such documents and opinions as they may require for
the purpose of enabling them to pass upon the issuance and sale of the
Preferred Stock as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Preferred
Stock and with respect to the shares of Common Stock issuable upon conversion
of the Preferred Stock as herein contemplated shall be satisfactory in form and
substance to the Initial Purchaser and Piper & Marbury L.L.P.
(i) The Preferred Stock shall have been approved by the
National Association of Securities Dealers, Inc. for trading in the PORTAL
market.
(j) Trading in the Common Stock shall not have been
suspended by the Nasdaq Stock Market (National Market) at any time after
October 2, 1997.
(k) Subsequent to the execution and delivery of this
Agreement and until the Closing Date there shall not have occurred any of the
following: (i) trading in securities generally on the New York Stock Exchange,
the American Stock Exchange, the Nasdaq Stock Market (National Market) or the
over-the-counter market shall have been suspended or limited, or minimum prices
shall have been established on either of such exchanges or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, or trading in securities of the Company on any
exchange or in the over-the-counter market shall have been suspended or (ii)
any moratorium on commercial banking activities shall have been declared by
Federal or New York State authorities or (iii) an outbreak or escalation of
hostilities or a declaration by the United States of a national emergency or
war or such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) as to make it, in the
judgment of the Initial Purchaser, impracticable or inadvisable to proceed with
the offering or the delivery of the Preferred Stock on the terms and in the
manner contemplated in the Offering Memorandum.
(l) The Company and the Initial Purchaser shall have
executed and delivered the Registration Rights Agreement on the Closing Date.
(m) If any event shall have occurred that requires the
Company under Section 4(b) hereof to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchaser shall have been given a reasonable opportunity to comment
thereon, and copies thereof delivered to the Initial Purchaser.
(n) There shall not have occurred any invalidation of
Rule 144A under the Securities Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Securities Act or the Exchange
Securities Act by the Commission or
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any amendment or proposed amendment thereof by the Commission which in the
judgment of the Initial Purchaser would materially impair the ability of the
Initial Purchaser to purchase, hold or effect resales of the Preferred Stock as
contemplated hereby.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to the Initial Purchaser.
If any condition to the Initial Purchaser's obligations hereunder to
be fulfilled prior to or at the Closing Date is not so fulfilled, the Initial
Purchaser may terminate this Agreement upon notice to the Company, and such
termination shall be without liability of any party to any other party or if
the Initial Purchaser so elect, they may waive any such conditions which have
not been fulfilled or extend the time for their fulfillment.
Section 7. Subsequent Offers and Resales of the Preferred Stock.
Each of the Initial Purchaser and the Company hereby
establishes and agrees to observe the following procedures in connection with
the offer and sale by the Initial Purchaser of the Preferred Stock.
(i) Offers have been and will be, and sales of
the Preferred Stock will be, made by the Initial Purchaser only to
institutional investors that are reasonably believed to qualify as Qualified
Institutional Buyers pursuant to Rule 144A under the Securities Act.
(ii) The Preferred Stock have been and will be
offered by the Initial Purchaser only by approaching prospective Subsequent
Purchasers on an individual basis. No general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act will be
used in connection with the offering of the Preferred Stock. The Initial
Purchaser agrees with respect to resales made in reliance upon Rule 144A, other
than through the PORTAL Market of any of the Preferred Stock purchased from the
Company hereunder, to deliver either with the confirmation of such resale or
otherwise prior to settlement of such resale a notice to the effect that the
resale of such Preferred Stock has been made in reliance upon the exemption
from the registration requirements of the Securities Act provided by Rule 144A.
(iii) In connection with the original distribution
of the Preferred Stock, the Company agrees that, prior to any offer or resale
of the Preferred Stock by the Initial Purchaser, the Initial Purchaser and its
counsel shall have the right to make reasonable inquiries into the business of
the Company. The Company agrees to provide answers to each prospective
Subsequent Purchaser of Preferred Stock who so requests information concerning
the Company (to the extent such information is available or can be acquired and
made available to prospective Subsequent Purchasers without unreasonable effort
or expense and to the extent the provision thereof is not prohibited by
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applicable law) and the terms and conditions of the offering of the Preferred
Stock, as provided in the Offering Memorandum.
Section 8. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Initial Purchaser (for purposes of this Section 8, "Initial Purchaser" shall
include the officers, directors, partners and employees who control the Initial
Purchaser ("controlling person") within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act) from and against any and
all losses, claims, damages, expenses or liabilities, joint or several (and
actions, proceedings, suits and litigation in respect thereof), whatsoever, as
the same are incurred, to which the Initial Purchaser or any such controlling
person may become subject, under the Securities Act, the Exchange Act or any
other statute or at common law or otherwise insofar as such losses, claims,
damages, expenses or liabilities arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Offering Memorandum (as from time to time amended and supplemented) or (ii) the
omission or alleged omission therefrom of 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; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, expense or liability arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged
omission made in the Offering Memorandum or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or through the Initial Purchaser specifically for use in the
preparation thereof. The indemnity agreement shall be in addition to any
liability which the Company may have at common law or otherwise.
(b) The Initial Purchaser will indemnify and hold
harmless the Company, each of its directors, each of its executive officers,
each person, if any, who controls the Company within the meaning of the
Securities Act, against any losses, claims, damages or liabilities to which the
Company, or any such director, officer, or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in the Preliminary Offering Memorandum, the
Offering Memorandum or any amendment or supplement thereto, or (ii) the
omission or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made; and will reimburse
any legal or other expenses reasonably incurred by the Company, or any such
director, officer, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that the Initial Purchaser will be liable in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Preliminary Offering
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Memorandum, the Offering Memorandum or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Initial Purchaser specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which the Initial Purchaser may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to any
party who shall fail to give notice as provided in this Section 8(c) if the
party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give
such notice. In case any such proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred (or within 30 days of presentation) the fees and
expenses of the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties indemnified
pursuant to Section 8(a) and by the Company in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. In
addition, the indemnifying party will not, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party
is an actual or potential party to such claim, action or proceeding) unless
such settlement,
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compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 8
is unavailable (other than by reason of the exceptions set forth in this
Section 8) to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Initial Purchaser on the other from the offering of the
Preferred Stock. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Initial
Purchaser on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchaser on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total commissions received by the
Initial Purchaser. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Initial
Purchaser on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchaser agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 8(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 8(d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) the Initial Purchaser shall not be
required to contribute any amount in excess of the commissions applicable to
the Preferred Stock purchased by the Initial Purchaser, and (ii) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
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(e) In any proceeding relating to the Preliminary
Offering Memorandum, the Offering Memorandum or any supplement or amendment
thereto, each party against whom contribution may be sought under this Section
8 hereby consents to the jurisdiction of any court already having jurisdiction
over the Company.
(f) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are incurred.
The indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of the Initial Purchaser or any person
controlling the Initial Purchaser, the Company, its directors or executive
officers or any persons controlling the Company, (ii) acceptance of any
Preferred Stock and payment therefor hereunder, and (iii) any termination of
this Agreement. A successor to the Initial Purchaser, to the Company, its
directors or executive officers, or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
Section 9. Representations and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto
shall be deemed to be representations, warranties and agreements at the Closing
Date, and the agreements of the Company and the provisions with respect to the
payment of expenses contained in Sections 5 and 10 and the respective indemnity
agreements contained in Section 8 hereof shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Initial Purchaser, the Company or any controlling person, and shall survive
termination of this Agreement or the issuance and delivery of the Preferred
Stock to the Initial Purchaser.
Section 10. Termination.
(a) Subject to subsection (b) of this Section 10, the
Initial Purchaser shall have the right to terminate this Agreement, by notice
to the Company, at any time at or prior to the Closing Date (i) if any domestic
or international event or act or occurrence has disrupted, or in the Initial
Purchaser' opinion will in the immediate future disrupt the financial markets;
(ii) if the United States shall have become involved in a war or major
hostilities, or there shall have been an escalation in an existing war or major
hostilities, or a national emergency shall have been declared in the United
States; (iii) if the Company shall have sustained a loss material or
substantial to the Company by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act which, whether or not such
loss shall have been insured, will, in the Initial Purchaser's opinion, make it
inadvisable to proceed with the delivery of the Preferred Stock; or (iv) if
there shall have been such a material adverse change in the general market,
political or economic
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conditions in the United States or elsewhere, as in the Initial Purchaser's
judgment would make it inadvisable to proceed with the offering, sale and/or
delivery of the Preferred Stock.
(b) If this Agreement is terminated by the Initial
Purchaser in accordance with the provisions of Section 10(a), such termination
shall be without liability of any party to any other party provided that
Sections 5 and 8 hereof shall survive such termination and remain in full force
and effect.
Section 11. Default by the Company. If the Company shall fail at
the Closing Date to sell and deliver the number of Preferred Stock which it is
obligated to sell hereunder on such date, then this Agreement shall terminate
without any liability on the part of any non-defaulting party other than
pursuant to Section 5, Section 8 and Section 10 hereof. No action taken
pursuant to this Section 11 shall relieve the Company from liability, if any,
in respect of such default.
Section 12. Notices. All notices and communications hereunder,
except as herein otherwise specifically provided, shall be given in writing and
shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Initial Purchaser shall be
directed to BT Alex. ▇▇▇▇▇ Incorporated, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: General Counsel, with a copy to Piper & Marbury L.L.P.,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. Notices to the Company shall be directed
to the Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and Chief Executive Officer, with a copy to
▇▇▇▇▇▇ Godward LLP, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Section 13. Parties. This Agreement shall inure to the benefit
of and shall be binding upon the Initial Purchaser and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors, heirs and legal
representatives, and the controlling persons and officers and directors
referred to in Sections 8 and 9 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof is intended to be for the sole and exclusive benefit of the
Initial Purchaser and the Company and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Preferred Stock from the Initial Purchaser shall be deemed to
be a successor by reason merely of such purchase.
Section 14. Governing Law and Time. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME UNLESS
OTHERWISE SPECIFIED.
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Section 15. Entire Agreement; Amendments. This Agreement
constitutes the entire agreement of the parties hereto and supersedes all prior
written or oral agreements, understandings and negotiations with respect to the
subject matter hereof. This Agreement may not be amended except in a writing
signed by the Initial Purchaser and the Company.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Initial Purchaser and the Company in accordance with its
terms.
Very truly yours,
BOLDER TECHNOLOGIES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Confirmed and accepted as of
the date first above written.
BT ALEX. ▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
Managing Director
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SCHEDULE A
PURCHASE PRICE TO
INITIAL PURCHASER PRICE PUBLIC
----------------- ----------- --------
BT Alex. ▇▇▇▇▇ Incorporated . . . . . . . . . . . . . . $47.00* $50.00
* The purchase indicated above reflects a 6% commission paid to the Initial
Purchaser, which commission applied to $12,810,000.00 of the gross proceeds
of this offering. Notwithstanding the foregoing, a 3% commission was paid
to the Initial Purchaser with respect to $4,000,000.00 of the gross
proceeds of this offering.
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