Exhibit 10.24
Exhibit A
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REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is made this
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____ day of _________ 1995, by ACCENT COLOR SCIENCES, INC., a Connecticut
corporation (the "Company") for the benefit of each Purchaser (individually a
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"Purchaser" and collectively, the "Purchasers") entering into a Convertible Note
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and Agreement relating to the Company's Series III Debentures (the "Convertible
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Note") with the Company of even date herewith.
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1. Securities Laws Representations and Covenants of Purchaser.
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This Agreement is made for the benefit of the Purchasers in reliance upon
each Purchaser's representations to the Company, contained in Section IV.B of
the Convertible Note. The registration rights granted pursuant to Sections 2.2
and 2.3 of this Agreement shall have no force or effect until such time as the
Company has otherwise become obligated to file periodic or other reports
pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the
"1934 Act").
2. Registration Rights.
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2.1 Certain Definitions. As used in this Agreement, the following
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terms shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
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Commission or any other federal agency at the time administering the Securities
Act.
(b) "Common Stock" shall mean the common stock, no par value, of
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the Company.
(c) "Form S-1, Form SB-1, Form S-2, Form SB-2 and Form S-3" shall
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mean Form S-1, Form SB-1, Form S-2, Form SB-2 or Form S-3, respectively,
promulgated by the Commission or any substantially similar form then in effect.
(d) The terms "Register", "Registered" and "Registration" refer
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to a registration effected by preparing and filing a Registration Statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such Registration Statement.
(e) "Registrable Securities" shall mean the Shares so long as
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such shares are ineligible for sale under subparagraph (k) of Rule 144.
(f) "Registration Expenses" shall mean all expenses incurred by
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the Company in complying with Section 2, including, without limitation, all
federal and state registration, qualification and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky fees and
expenses, the expense of any special audits incident to or required by any such
Registration and the reasonable fees and disbursements of counsel for the
Selling Shareholders, as selling shareholders.
(g) "Registration Statement" shall mean Form S-1, Form SB-1, Form
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S-2, Form SB-2 or Form S-3, whichever is applicable.
(h) "Restriction Termination Date" shall mean, with respect to
any Registrable Securities, the earliest of (i) the date that such Registrable
Securities shall have been Registered and sold or otherwise disposed of in
accordance with the intended method of distribution by the seller or sellers
thereof set forth in the Registration Statement covering such securities or
transferred in compliance with Rule 144, and (ii) the date that an opinion of
counsel to the Company containing reasonable assumptions (which opinion shall be
subject to the reasonable approval of counsel to any affected Purchaser) shall
have been rendered to the effect that the legend referred to in Section 2(i)(i)
of the Convertible Note can be properly removed and such legend shall have been
removed.
(i) "Rule 144" shall mean Rule 144 promulgated by the Commission
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pursuant to the Securities Act.
(j) "Purchasers" shall mean, collectively, the Purchasers, their
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assignees and transferees, and individually, a Purchaser and any transferee or
assignee of such Purchaser.
(k) "Securities Act" shall mean the Securities Act of 1933, as
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amended.
(l) "Selling Expenses" shall mean all underwriting discounts and
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selling commissions applicable to the sale of Registrable Securities pursuant to
this Agreement.
(m) "Selling Shareholders" shall mean a holder of Registrable
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Securities who requests Registration under Section 2 herein.
(n) "Shares" shall mean the Common Stock issuable to each
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Purchaser upon the conversion of the Convertible Note and upon exercise of the
warrant ("Warrant") issued by the Company to each Purchaser in connection with
the purchase of a Convertible Note. For the purposes of this Agreement only, a
Purchaser shall be considered a holder of the Shares issuable by the Company
upon full conversion of the Convertible Note and complete exercise of the
Warrant.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Convertible Note.
2.2 Required Registration. If the Company shall be requested by
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holders of at least a majority of the outstanding Shares to effect the
Registration of Registrable Securities, then the Company shall promptly give
written notice of such proposed Registration to all holders of Shares, and
thereupon the Company shall promptly use its best efforts to effect the
Registration of the Registrable Securities that the Company has been requested
to Register for disposition as described in the request of such holders of
Shares and in any response received from any of the holders of Shares within ten
(10) days or such longer period as shall be set forth in the notice, after
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the giving of the written notice by the Company; provided, however, that the
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Company shall not be obligated to effect any Registration except in accordance
with the following provisions:
(a) The Company shall not be obligated to file and cause to become
effective more than one (1) registration statement in which Registrable
Securities are Registered pursuant to this Section 2.2.
(b) Notwithstanding the foregoing, the Company may include in each
such Registration requested pursuant to this Section 2.2 any authorized but
unissued shares of Common Stock (or authorized treasury shares) for sale by the
Company or any issued and outstanding shares of Common Stock for sale by others,
provided, however, that, if the number of shares of Common Stock so included
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pursuant to this clause (b) exceeds the number of Registrable Securities
requested by the holders of Shares requesting such Registration, then such
Registration shall be deemed to be a Registration in accordance with and
pursuant to Section 2.3; and provided further, however, that the inclusion of
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such previously authorized but unissued shares of Common Stock by the Company or
issued and outstanding shares of Common Stock by others in such Registration
shall not prevent the holders of Shares requesting such Registration from
registering the entire number of Registrable Securities requested by them.
(c) The Company shall not be required to file a registration statement
pursuant to this Section 2: (i) within six (6) months after any other
registration by the Company (other than under "Excluded Forms," as defined in
Section 2.3(a) below) or (ii) for six (6) months after the request for
registration under this Section 2.2 if the Company is then engaged in
negotiations regarding a material transaction which has not otherwise been
publicly disclosed, or such shorter period ending on the date, whichever first
occurs, that such transaction is publicly disclosed, abandoned or consummated.
2.3 Piggyback Registration
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(a) Each time that the Company proposes to Register a public offering
solely of its Common Stock (not including an offering of Common stock issuable
upon conversion or exercise of other securities), other than pursuant to a
Registration Statement on Form S-4 or Form S-8 or similar or successor forms
(collectively, "Excluded Forms"), the Company shall promptly give written notice
of such proposed Registration to all holders of Shares, which shall offer such
holders the right to request inclusion of any Registrable Securities in the
proposed Registration.
(b) Each holder of Shares shall have ten (10) days or such longer
period as shall be set forth in the notice from the receipt of such notice to
deliver to the Company a written request specifying the number of shares of
Registrable Securities such holder intends to sell and the holder's intended
plan of disposition.
(c) In the event that the proposed Registration by the Company is, in
whole or in part, an underwritten public offering of securities of the Company,
any request under Section 2.3(b) may specify that the Registrable Securities be
included in the underwriting on the
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same terms and conditions as the shares of Common Stock, if any, otherwise being
sold through underwriters under such Registration.
(d) Upon receipt of a written request pursuant to Section 2.3(b), the
Company shall promptly use its best efforts to cause all such Registrable
Securities to be Registered, to the extent required to permit sale or
disposition as set forth in the written request.
(e) Notwithstanding the foregoing, if the managing underwriter of an
underwritten public offering, determines and advises in writing that the
inclusion of all Registrable Securities proposed to be included in the
underwritten public offering, together with any other issued and outstanding
shares of Common Stock proposed to be included therein by holders other than the
holders of Registrable Securities (such other shares hereinafter collectively
referred to as the "Other Shares"), would interfere with the successful
marketing of the securities proposed to be included in the underwritten public
offering, then the number of such shares to be included in such underwritten
public offering shall be reduced, and shares shall be excluded from such
underwritten public offering in a number deemed necessary by such managing
underwriter, first by excluding shares held by the directors, officers,
employees and founders of the Company, and then, to the extent necessary, by
excluding Registrable Securities participating in such underwritten public
offering, pro rata, based on the number of shares of Registrable Securities each
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such holder proposed to include.
(f) All Shares that are not included in the underwritten public
offering shall be withheld from the market by the holders thereof for a period,
not to exceed 12 months following a public offering, that the managing
underwriter reasonably determines as necessary in order to effect the
underwritten public offering. The holders of such Shares shall execute such
documentation as the managing underwriter reasonably requests to evidence this
lock-up.
2.4 Preparation and Filing. If and whenever the Company is under an
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obligation pursuant to the provisions of this Section 2 to use its best efforts
to effect the Registration of any Registrable Securities, the Company shall, as
expeditiously as practicable:
(a) prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities and use its best efforts to cause such
Registration Statement to become and remain effective in accordance with Section
2.4(b) hereof, keeping each Selling Shareholder advised as to the initiation,
progress and completion of the Registration;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statements and the prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective for nine months and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all Registrable Securities
covered by such registration statement;
(c) furnish to each Selling Shareholder such number of copies of any
summary prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such Selling Shareholder may
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reasonably request in order to facilitate the public sale or other disposition
of such Registrable Securities;
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under the securities or blue
sky laws of such jurisdictions as each Selling Shareholder shall reasonably
request and do any and all other acts or things which may be necessary or
advisable to enable such holder to consummate the public sale or other
disposition in such jurisdictions of such Registrable Securities; provided,
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however, that the Company shall not be required to consent to general service of
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process, qualify to do business as a foreign corporation where it would not be
otherwise required to qualify or submit to liability for state or local taxes
where it is not liable for such taxes; and
(e) at any time when a prospectus covered by such Registration
Statement is required to be delivered under the Securities Act within the
appropriate period mentioned in Section 2.3(b) hereof, notify each Selling
Shareholder of the happening of any event as a result of which the prospectus
included in such Registration, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing and, at the request of such seller, prepare,
file and furnish to such seller a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statement therein not misleading in
the light of the circumstances then existing.
2.5 Expenses. The Company shall pay all Registration Expenses
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incurred by the Company in complying with this Section 2; provided, however,
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that all underwriting discounts and selling commissions applicable to the
Registrable Securities covered by registrations effected pursuant to section 2.2
hereof shall be borne by the seller or sellers thereof, in proportion to the
number of Registrable Securities sold by such seller or sellers.
2.6 Information Furnished by Purchaser. It shall be a condition
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precedent to the Company's obligations under this Agreement as to any Selling
Shareholder that each Selling Shareholder furnish to the Company in writing such
information regarding such Selling Shareholder and the distribution proposed by
such Selling Shareholder as the Company may reasonably request.
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2.7 Indemnification.
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2.7.1 Company's Indemnification of Purchasers. The Company shall
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indemnify each Selling Shareholder, each of its officers, directors and
constituent partners, and each person controlling such Selling Shareholder, and
each underwriter thereof, if any, and each of its officers, directors,
constituent partners, and each person who controls such underwriter, against all
claims, losses, damages or liabilities (or actions in respect thereof) suffered
or incurred by any of them, to the extent such claims, losses, damages or
liabilities arise out of or are based upon any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus or any related
Registration Statement incident to any such Registration, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
the Company of any rule or regulation promulgated under the Securities Act
applicable to the Company and relating to actions or inaction required of the
Company in connection with any such Registration; and the Company will reimburse
each such Selling Shareholder, each such underwriter, each of their officers,
directors and constituent partners and each person who controls any such Selling
Shareholder or underwriter, for any legal and any other expenses as reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action; provided, however, that the indemnity contained in
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this Section 2.7.1 shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability or action if settlement is effected without the
consent of the Company (which consent shall not unreasonably be withheld); and
provided, however, that the Company will not be liable in any such case to the
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extent that any such claim, loss, damage, liability or expense arises out of or
is based upon any untrue statement or omission based upon written information
furnished to the Company by such Selling Shareholder, underwriter, controlling
person or other indemnified person and stated to be for use in connection with
the offering of securities of the Company.
2.7.2 Selling Shareholder's Indemnification of Company. Each Selling
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Shareholder shall indemnify the Company, each of its directors and officers,
each underwriter, if any, of the Company's Registrable Securities covered by a
Registration Statement, each person who controls the Company or such underwriter
within the meaning of the Securities Act, and each other Selling Shareholder,
each of its officers, directors and constituent partners and each person
controlling such other Selling Shareholder, against all claims, losses, damages
and liabilities (or actions in respect thereof) suffered or incurred by any of
them and arising out of or based upon any untrue statement (or alleged untrue
statement) of a material fact contained in such Registration Statement or
related prospectus, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by such Selling Shareholder of any rule
or regulation promulgated under the Securities Act applicable to such Selling
Shareholder and relating to actions or inaction required of such Selling
Shareholder in connection with the Registration of the Registrable Securities
pursuant to such Registration Statement; and will reimburse the Company, such
other Selling Shareholders, such directors, officers, partners, persons,
underwriters and controlling persons for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action; such indemnification and reimbursement
shall be to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
Registration
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Statement or prospectus in reliance upon and in conformity with written
information furnished to the Company by such Selling Shareholder and stated to
be specifically for use in connection with the offering of Registrable
Securities.
2.7.3 Indemnification Procedure. Promptly after receipt by an
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indemnified party under this Section 2.7 of notice of the commencement of any
action which may give rise to a claim for indemnification hereunder, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 2.7, notify the indemnifying party in
writing of the commencement thereof and generally summarize such action. The
indemnifying party shall have the right to participate in and to assume the
defense of such claim, and shall be entitled to select counsel for the defense
of such claim with the approval of any parties entitled to indemnification,
which approval shall not be unreasonably withheld. Notwithstanding the
foregoing, the parties entitled to indemnification shall have the right to
employ separate counsel (reasonably satisfactory to the indemnifying party) to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified parties unless the named parties to
such action or proceedings include both the indemnifying party and the
indemnified parties and the indemnifying party or such indemnified parties shall
have been advised by counsel that there are one or more legal defenses available
to the indemnified parties which are different from or additional to those
available to the indemnifying party (in which case, if the indemnified parties
notify the indemnifying party in writing that they elect to employ separate
counsel at the reasonable expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action or
proceeding on behalf of the indemnified parties, it being understood, however,
that the indemnifying party shall not, in connection with any such action or
proceeding or separate or substantially similar or related action or proceeding
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate counsel at any time for all indemnified parties, which counsel shall be
designated in writing by the Purchasers of a majority of the Registrable
Securities).
2.7.4 Contribution. If the indemnification provided for in this
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Section 2.7 from an indemnifying party is unavailable to an indemnified party
hereunder in respect to any losses, claims, damages, liabilities or expenses
referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified party in connection with the statements
or omissions which result in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party 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 such indemnifying party or indemnified party
and the parties' relative intent, knowledge, access to information supplied by
such indemnifying party or indemnified party and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action,
suit, proceeding or claim.
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3. Covenants of the Company.
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The Company agrees to:
(a) Notify the holders of Registrable Securities included in a
Registration Statement of the issuance by the Commission of any stop order
suspending the effectiveness of such Registration Statement or the initiation of
any proceedings for that purpose. The Company will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible time.
(b) If the Common Stock is then listed on a national securities
exchange, use its best efforts to cause the Registrable Securities to be listed
on such exchange. If the Common Stock is not then listed on a national
securities exchange, use its best efforts to facilitate the reporting of the
Registrable Securities on NASDAQ.
(c) Take all other reasonable actions necessary to expedite and
facilitate disposition of the Registrable Securities by the holders thereof
pursuant to the Registration Statement.
(d) With a view to making available to the holders of Registrable
Securities the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the Commission that may at any time permit the
Purchasers to sell securities of the Company to the public without registration,
the Company, after it has become obligated to file periodic or other reports
pursuant to Section 13 of the 1934 Act agrees to:
(i) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after 90 days after the
effective date of the first Registration Statement filed by the Company for the
offering of its securities to the general public;
(ii) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Securities and Exchange Act of 1934 (the "1934 Act"); and
(iii) furnish to each holder of Shares, so long as such holder of
Shares owns any Shares, forthwith upon written request (a) a written statement
by the Company that it has complied with the reporting requirements of Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company), the Securities Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), (b) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company and (c) such other information as may be
reasonably requested and as is publicly available in availing the holders of
Shares of any rule or regulation of the Commission which permits the selling of
any such securities without registration.
(e) Prior to the filing of the Registration Statement or any amendment
thereto (whether pre-effective or post-effective), and prior to the filing of
any prospectus or prospectus
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supplement related thereto, the Company will provide each Selling Shareholder
with copies of all pages thereto, if any, which reference such Selling
Shareholder.
4. Miscellaneous.
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(a) Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
or sent by registered mail, return receipt requested, addressed (i) if to the
Company, at Accent Color Sciences, Inc., 00 Xxxx Xxxxx Xxxxx, Xxxx Xxxxxxxx, XX
00000 and (ii) if to a Purchaser, at the address set forth in the Convertible
Note, or at such other address as each such party furnishes by notice given in
accordance with this Section 4(a).
(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
will not operate as a waiver thereof. No waiver will be effective unless and
until it is in writing and signed by the party giving the waiver.
(c) This Agreement shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Connecticut, as such laws
are applied by Connecticut courts to agreements entered into and to be performed
in Connecticut by and between residents of Connecticut. In the event that any
provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability
of any other provision hereof.
(d) This Agreement may not be assigned by the Purchaser other than to
the purchaser or transferee of more than 50% of the Purchaser's Shares, provided
that such assignee is not engaged in a business in which the Company is engaged.
(e) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by a writing executed by the Company and the holders of a majority in interest
of the Registrable Securities.
(f) This Agreement may be executed in two or more counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which together shall be deemed to be one and the same Agreement.
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IN WITNESS WHEREOF, the Company has executed this Agreement for the benefit
of the Purchasers by its duly authorized officer as of the date first above
written.
ACCENT COLOR SCIENCES, INC.
By:
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Xxxxxxx X. Xxxxxx, President
and Chief Executive Officer
Agreed and Accepted this
_____ day of _____________________, 1995
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By:
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Name:
Title:
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