EXHIBIT 10.4
LOAN AGREEMENT AND PROMISSORY NOTE
UP TO THREE MILLION ($3,000,000) DOLLARS Dated: February,2 9 1996
FOR VALUE RECEIVED, the undersigned, ACCENT COLOR SCIENCES, INC., a Connecticut
corporation (the "Company"), HEREBY PROMISES TO PAY to the order of XEROX
CORPORATION, a New York corporation (the "Payee"), the principal amount of the
amounts loaned to Company by Payee or otherwise owed hereunder to Payee by
Company, together with accrued interest.
1. (a) Payee has previously loaned the sum of five hundred thousand ($500,000)
dollars to Company as evidenced by a Promissory Note dated January 2, 1996.
Under the January 2, 1996 Promissory Note Company had agreed to repay to
Payee the principal sum of five hundred thousand ($500,000) dollars in full
on or before April 2, 1996. Company has not repaid any part of such
principal sum or any interest accruing thereon. The parties agree that the
Promissory Note dated January 2, 1996 is extinguished and that the amount
of outstanding and unpaid principal payable thereunder and accrued interest
payable thereon shall be made subject to this Promissory Note (the
"Refinanced Debt");
(b)Payee hereby agrees to loan Company up to an additional two and one-half
million ($2,500,000) dollars (for a total of up to $3,000,000 including the
principal included in the Refinanced Debt). Payee shall release to Company
the following sums provided Company timely completes the milestones set
forth in Exhibit A hereto (each a "Milestone") (and which are more
particularly described in the Product Development and Distribution
Agreement between the parties that has an effective date of February 16,
--
1996) ("Development Agreement"):
Approximate
Milestone No. Amount to be released Achievement Date
------------- --------------------- ----------------
December MOU
Advancement $500,000 January 2, 1996
Milestone 1 500,000 Upon Execution
Milestone 2 600,000 March 1, 1996
Milestone 3* 400,000 April 15, 1996
Milestone 4 350,000 May 1, 1996
Milestone 5 150,000 June 17, 1996
Milestone 6 200,000 July 1, 1996
Milestone 7 200,000 August 1, 1996
Milestone 8 100,000 September 1, 1996
*Upon the achievement of Milestone 3 and prior to the release of any further
amounts hereunder, Company will deliver to Payee a warrant to purchase 50,000
shares of Company's common stock as more particularly described in Section 13(g)
hereof.
2. Interest shall accrue at the rate of eight percent (8%) per annum on all
principal amounts remaining unpaid and outstanding hereunder (including
without limitation the principal amount included in the Refinanced Debt).
Interest on the principal amount included in the Refinanced Debt accrued
from January 2, 1996 through the date hereof at an annual rate of seven
percent (7%) but shall hereafter accrue at the rate eight percent (8%).
3. (a) Unless sooner repaid in accordance with this Loan Agreement and
Promissory Note , the principal balance hereunder, including the principal
included in the Refinanced Debt, shall be repaid by Company in four
installments as follows: (i) $500,000 on July], 1997;(ii) $500,000 on
October 1, 1997; (iii) $1,000,000 on January 2, 1998; and (iv) $1,000,000 on
April 1, 1998. In the event that less than all of the $3,000,000 maximum is
borrowed hereunder any difference will be deducted from the principal
payments due in the inverse order of their maturity (i.e. first from the
payment due April 1, 1998).
(b) Interest as provided above shall accrue until April 1, 1996 , at which time
all interest accrued to date (including all interest included in the
Refinanced Debt) will be paid, and accrued interest thereafter shall be paid
on the first (1st) day of each July, October, January and April thereafter
to and including April 1, 1998 when the entire unpaid principal balance
together with any unpaid accrued interest and all other sums due hereunder
shall become due and payable.
4. If any payment is due hereunder on a date which is not a business day, such
payment shall be made on the next succeeding business day. Payments made
hereunder shall be made in United States currency or by electronic wire
transfer of same day settlement funds, at such location or other address as
the Payee or other holder of this Note shall have notified the Company in
writing. As used herein, the term "business day" shall mean any day on which
banks are not required or authorized by law to close in New York, New York.
5. At any time upon not fewer than two business days' notice to the Payee or
other holder of this Note, the Company may prepay, in whole or part, the
principal amount then outstanding hereon, together with interest accrued
hereon without penalty or premium. Any such prepayments shall be first
applied against any accrued unpaid interest due to Payee under this Loan
Agreement and Promissory Note and thereafter against the payments of the
principal balance due hereunder in the inverse order of their maturity.
6. If one or more of the events of default set forth below (each an "Event of
Default") shall occur and be continuing, the Payee may, by notice to the
Company, declare the outstanding principal amount hereof, together with
interest accrued thereon, to be immediately due and payable, all without
diligence, presentment, demand of payment, protest or notice of any kind,
which are expressly waived by the Company. Each of the following events
shall constitute an event of Default:
a) Default in the payment of any sum owed under this Loan Agreement and
Promissory Note when due and the failure to cure such default within ten
(10) days;
b) The breach in any material respect by Company of any covenant,
representation or warranty in this Loan Agreement and Promissory Note and
the failure to cure such breach within thirty (30) days;
c) The breach in any material respect by Company of any covenant,
representation, or warranty in the Development Agreement or the Security
Agreement between the parties of even date herewith;
d) The institution by Company of proceedings to be adjudicated a bankrupt or
insolvent, or the consent by Company to institution of bankruptcy or
insolvency proceedings against it or the filing by Company of a petition or
answer or consent seeking reorganization or release under the Federal
Bankruptcy Act, or any other applicable federal or state law, or the
consent
by Company to the filing of any such petition or the appointment of a
receiver, liquidator, assignee, trustee, or other similar official of
Company or of any substantial part of its property, or the making by
Company of an assignment for the benefit of creditors, or the admission in
writing by Company of its inability to pay its debts generally as they
become due or the taking of corporate action by Company in furtherance of
any such action; or
e) If, within 60 days after the commencement of an action against Company
seeking any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar relief under any present or future law or
regulation, such action shall not have been dismissed or all orders or
proceedings thereunder affecting the operations or the business of Company
stayed, or if the stay of any such order or proceeding shall thereafter be
set aside; or if within 60 days after the appointment without the consent
or acquiescence of Company of any trustee, receiver or liquidator or
similar official of Company, or of all or any substantial part of the
property of Company, such appointment shall not have been vacated;
f) Company fails to make when due and payable any payment required to be made
by it pursuant to the terms of any contract for borrowed money, or fails
duly and punctually to perform or observe any other covenant, condition or
agreement contained in any such contract, and the effect of such failure is
to cause, or where such failure upon notice or lapse of time would, under
terms of such contract, cause, the indebtedness due and owing under such
contract to become due prior to its stated or scheduled maturity unless any
such failure is cured within the cure period.
7. Any notice or demand which by a provision of this Loan Agreement and
Promissory Note is required or permitted to be given shall be in writing,
hand-delivered or sent by Registered mail, postage prepaid, receipt
requested, and addressed as follows:
The Company: Accent Color Sciences, Inc.
Xxxxxxxxx Xxxxxx
Xxxx Xxxxx Xxxxx
Xxxx Xxxxxxxx, XX 00000
ATTENTION: Xxxxxxx X. Xxxx, Chief Financial Officer
The Payee: Xerox Corporation
Box 0000
Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
ATTENTION: Xxxxxxx X. Xxxxxx Director, Corporate Business
Development
With a Copy to: Xerox Corporation
Box 1600
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
ATTENTION: Senior Vice President and General Counsel
or to such address as the Company, on the one hand, or the Payee or other holder
of this Loan Agreement and Promissory Note, on the other, shall have notified
the other in accordance with the provisions of this paragraph. All such notices
shall be effective upon receipt.
8. This Loan Agreement and Promissory Note and any covenants and agreements of
the Company herein shall be binding upon and enforceable against the
Company and its successors and assigns, whether or not so expressed. This
Loan Agreement and Promissory Note shall not be assignable by the Company
without the consent of the Payee. This Loan Agreement and Promissory Note
shall be freely assignable by the Payee.
9. Neither the Payee nor any subsequent holder of this Loan Agreement and
Promissory Note shall be required to post any bond if the Loan Agreement
and Promissory Note is lost, stolen or mutilated and the Company shall
execute and deliver in lieu thereof a new Note, dated the date hereof, in
the same principal amount provided that reasonable satisfactory indemnity
to the Company with respect thereto is provided.
10. This note and the rights and obligations of the parties hereunder shall be
construed in accordance with and be governed by the laws of the State of
New York (without giving effect to the principles thereof relating to
conflicts of law).
11. Representations and Warranties of Company. Company represents and warrants
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to Payee that:
a) Company is a corporation duly organized, validly existing and in good
standing under the laws of Connecticut, has the necessary authority and
power to transact the business in which it is engaged, is duly qualified to
do business in each jurisdiction in which the conduct of its business or
the ownership of its assets requires such qualification;
b) Company has full power, authority and legal right to execute and deliver
this Loan Agreement and Promissory Note and to perform its obligations
hereunder;
c) this Loan Agreement and Promissory Note is a legal, valid and binding
obligation of Company enforceable in accordance with its terms;
d) no consent of any other party and no consent, license, approval or other
action or filing with any governmental instrumentality is required in
connection with the execution, delivery or performance by Company of, or
the validity or enforceability of, this Loan Agreement and Promissory Note;
e) the execution, delivery and performance by Company of this Loan Agreement
and Promissory Note do not and will not violate any provision of any
applicable law or regulation or of any judgment, order, or the like of any
court or governmental instrumentality, do not and will not violate any
provision of, or cause a default under any loan agreement, indenture,
contract, agreement or judgment to which Company is a party or which is
binding upon Company or any of its assets; and do not and will not result
in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the Company's property or assets;
f) except with respect to Payee, it has not granted any currently existing
security interests in, and to the best of its knowledge and belief, there
are no outstanding liens or other encumbrances with respect to, its
tangible or intangible assets;
g) there are no lawsuits or proceedings to which it is a party, or which are
threatened, with respect to which a result adverse to Company would
prejudice Company's ability to perform its obligations under, or affect
the validity of, this Loan Agreement and Promissory Note.
12. Covenants of Company. Company covenants and agrees that from and after the
--------------------
date hereof and until such time as all amounts of principal and interest
payable hereunder have been indefeasibility paid in full, Company shall:
a) promptly give written notice to Payee of the occurrence of any Event of
Default, of the commencement or threat of any material litigation or
proceedings affecting Company, or of any dispute between Company and any
governmental regulatory body;
b) observe all requirements of any governmental authorities relating to the
conduct of its business, to the performance of its obligations hereunder;
maintain its existence as a legal entity; and obtain and keep in full force
and effect all rights, franchises, licenses and permits which are necessary
to the proper conduct of its business;
c) pen-nit Payee or its authorized representative at any reasonable time and
upon reasonable notice to inspect the books and records of Company;
d) keep proper Company books of record and account in which full, true and
correct entries in accordance with generally accepted accounting principles
will be made of all dealings or transactions in relation to its business
and activities;
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e) (i) deliver to Payee as soon as available and in any event within thirty
(30) days after the end of each calendar quarter, a balance sheet as of the
end of each such period, statements of income and retained earnings for the
periods then ending, and a statement of cash flows all in reasonable detail
and stating in comparative form the respective figures for the
corresponding date and period in the previous year and all prepared in
accordance with generally accepted accounting principles consistently
applied and (ii) deliver to Payee as soon as available and in any event
within ninety (90) days after the end of each fiscal year, a balance sheet
as of the end of each such period, statements of income and retained
earnings for the periods then ending, and a statement of cash flows all in
reasonable detail and stating in comparative form the respective figures
for the corresponding date and
period in the previous year and all prepared in accordance with generally
accepted accounting principles consistently applied and audited by a
nationally recognized public accounting firm;
f) not effect a recapitalization, or merger or effect a combination with
another entity, or dissolve, liquidate, or wind up without the written
consent of Payee;
g) not pay any dividend or distribution of cash or assets with respect to any
shares of its capital stock, nor repurchase any capital stock.
13. Miscellaneous Provisions
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a) Remedies, Non-Waiver. No failure or delay by Payee or Company in
--------------------
exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. No
right or remedy in this Loan Agreement and Promissory Note is intended
to be exclusive but each shall be cumulative and in addition to any
other remedy referred to herein or otherwise available to Payee at law
or in equity; and the exercise by Payee of any one or more of such
remedies shall not preclude the simultaneous or late exercise by Payee
of any or all such other remedies. No express or implied waiver by
Payee of an Event of Default shall in any way be, or be construed to
be, a waiver of any other or subsequent Event of Default. The
acceptance by Payee of any regular installment payment or any other
sum owing under this Loan Agreement and Promissory Note shall not
constitute a waiver of any Event of Default in existence at the time
of such acceptance.
b) Survival of Representations and Warranties. All representations and
------------------------------------------
warranties in this Loan Agreement and Promissory Note shall survive
the execution and delivery hereof.
c) Amendment, Modification. This Loan Agreement and Promissory Note may
-----------------------
be amended or modified only by a written agreement of the parties
hereto specifically referring to this Note.
d) Binding Provisions. Except for those provisions hereof which are
------------------
expressly deemed non-binding, this shall be binding upon and inure to
the benefit of Company and Payee and their respective successors and
assigns.
e) Titles. Headings of sections are for convenience only, are not part of
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this Loan Agreement and Promissory Note and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
f) Severable Provisions. Any provision of this Loan Agreement and
--------------------
Promissory Note which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability shall not invalidate or render unenforceable such
provision in any other jurisdiction.
g) Warrants. To induce Payee to enter into this Loan Agreement and
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Promissory Note, Company has agreed to issue to Payee warrants to
purchase up to 125,000 shares of Company's common stock. Such warrants
will be issued in two steps, the first for 75,000 shares will issued
in connection with the execution and delivery of this Loan Agreement
and Promissory Note (Milestone 1), and the second for 50,000 shares
will be issued upon the achievement of Milestone 3 and simultaneously
with the release of the funds called for upon the achievement of such
Milestone 3. Such warrants will be issued pursuant to Warrant
Agreements in the form of Exhibit B hereto.
IN WITNESS WHEREOF, the parties have duly executed and delivered this Loan
Agreement and Promissory Note as of the date first written above.
ACCENT COLOR SCIENCES, INC.
By: _______________________________
Title: ____________________________
XEROX CORPORATION
By: _______________________________
Title: ____________________________
EXHIBIT A
MILESTONE / LOAN TAKE DOWN SCHEDULE
-----------------------------------
MILESTONE DATE TASK LOAN TAKE
--------- ---- ----
DOWN
---------
1 Loan Shipment of Alpha Software development $500K
Agreement unit; All Product Performance Specification
Execution Complete
2 3/1/96 BO design review complete. Preliminary $600K
documentation available
3 4/15/96 Program self assessment review completed, $400K
assembly underway, SCSI Protocol S/W available
4 5/1/96 B0-1 assembly complete $350K
5 6/17/96 B0-4 Unit installed at Xerox $150K
6 7/1/96 ACS Manufacturing Facility Functional $200K
7 8/1/96 ACS Manufacturing B1-1 Build Complete $200K
8 9/1/96 B1 production units available. Customer $100K
engagement go / wait review
completed
Exhibit B
EXERCISABLE AT ANY TIME
AFTER THE OPENING OF BUSINESS ON _________________, 1996 AND
PRIOR TO THE CLOSE OF BUSINESS ON _________________, 1999
VOID AFTER __________________, 1999 [3 YEARS FROM DATE OF ISSUE]
For the Purchase
of XX,OOO Shares
WARRANT TO PURCHASE COMMON STOCK
OF
ACCENT COLOR SCIENCES, INC.
THIS SECURITY AND ALL SECURITIES ISSUABLE UPON THE
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933,AS AMENDED,OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED,SOLD OR
OTHERWISE TRANSFERRED,PLEDGE OR HYPOTHECATED
UNLESS AND UNTIL SUCH SECURITIES ARE REGISTERED
UNDER SUCH ACT ANY APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
THEREFROM.
WHEREAS, Accent Color Sciences, Inc. (the "Company") and Xerox
Corporation, a New York corporation having its principal office at 000 Xxxx
Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("Xerox) have entered into a certain
Loan Agreement and Promissory Note dated as of February __, 1996 (the "Loan
Agreement"), pursuant to which Xerox has agreed to loan the Company up to
$3,000,000, and the Company has agreed to grant stock purchase warrants
entitling Xerox or any such other person or persons who become the registered
holder thereof to purchase an aggregate of up to One Hundred Twenty-Five
Thousand (1 25,000) shares of the Common Stock of the Company, no par value (the
"Common Stock");
NOW, THEREFORE:
Section 1. (a) The Company, in consideration of funds advanced pursuant to
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the Loan Agreement by Xerox, hereby agrees and certifies that Xerox or any such
other person or persons who become the registered holder hereof ("the Warrant
Holder) is entitled, in accordance with the terms hereof, to purchase up to
XX,000 shares [75,000 FOR THE FIRST, 50,000 FOR THE SECOND] of Common Stock (as
adjusted from time to time as provided herein, the "Warrant Shares") of the
Company at a price of $11.00 per share subject to adjustment as provided herein
(the "Exercise Price").
(b) Subject to the conditions set forth in this Warrant to Purchase Common
Stock (this "Warrant"), this Warrant may be exercised by the execution of the
purchase form attached hereto and the delivery of the executed purchase form
together with (i) a certified or bank check, (ii) a wire transfer, (iii) as
described below and at the sole discretion of Xerox, a letter as evidence of the
cancellation of debt owing under the Loan Agreement, or (iv) other form of
payment acceptable to the Company, or any combination of the foregoing, in the
amount of the Exercise Price of the Warrant Shares being purchased to the
Company, 00 Xxxx Xxxxx Xxxxx, Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000, at any time
after the opening of business on the date hereof and prior to the close of
business on [THREE YEARS FROM DATE OF ISSUE] -, 1999 (the "Expiration Date").
This Warrant is exercisable at the option of the Warrant Holder, at any time or
from time to time, up to the Expiration Date for all and any part of the Warrant
Shares (but not for a fraction of a share) which may be purchased hereunder. The
Company agrees that the Warrant Shares purchased under this Warrant shall be and
are deemed to be issued to the Warrant Holder as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares. Certificates for the Warrant
Shares purchased, together with any other securities or property to which the
Warrant Holder is entitled upon such exercise, shall be delivered to the Warrant
Holder by the Company at the Company's expense as promptly as practicable after
the rights represented by this Warrant have been so exercised. In case of a
purchase of less than all the Warrant Shares, the Company shall cancel this
Warrant and execute and deliver a new Warrant or Warrants of like tenor for the
balance of the Warrant Shares to the Warrant Holder as promptly as practicable.
Each stock certificate so delivered shall be in such denominations of Common
Stock as may be requested by the Warrant Holder and shall be registered in the
name of such Warrant Holder
or such other name as shall be designated by such Warrant Holder. In the sole
discretion of Xerox, all or a portion of the Exercise Price for any Warrant
Shares may be paid by cancelling an equal portion of the principal and accrued,
unpaid interest owed by the Company to Xerox under the Loan Agreement.
Common Stock shall include the Company's authorized Common Stock as such
class existed on the date of execution of this Document, (ii) any other stock,
securities or property as to which this Warrant becomes exercisable pursuant to
Section 3 and (iii) for purposes of Section 3, stock of the Company of any class
thereafter authorized which ranks, or is entitled to a participation as to
assets or dividends, substantially on a parity with such Common Stock.
Section 2. This Warrant may not be sold, transferred, assigned or hypothecated
---------
except with the written consent of the Company, which consent shall not be
unreasonably withheld.
Section 3. The Exercise Price and the number of Warrant Shares shall be subject
---------
to adjustment from time to time upon the occurrence of certain events described
in this Section 3. Upon each adjustment of the Exercise Price, the Warrant
Holder shall thereafter be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares hereunder immediately prior to such adjustment, and dividing the
product thereof by the Exercise Price resulting from such adjustment.
(a) In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the Exercise Price in
effect immediately prior to such subdivision shall be proportionately reduced,
and conversely, in case the outstanding shares of Common Stock of the Company
shall be combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased.
(b) If at any time or from time to time the holders of Common Stock (or
any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled
to receive, without payment therefor, (i) Common Stock or any shares
of stock or other securities which are at any time directly or
indirectly convertible into or exchangeable for Common Stock, or any
rights or
options to subscribe for, purchase or otherwise acquire any of the
foregoing by way of dividend or other distribution, (ii) any cash
paid or payable otherwise than as a cash dividend, or (iii) Common
Stock or additional stock or other securities or property (including
cash) by way of spinoff, split-up reclassification, combination of
shares or similar corporate rearrangement, (other than shares of
Common Stock issued as a stock split, adjustments in respect of
which shall be covered by the terms of Section 3(a) above), then and
in each such case, the Warrant Holder shall, upon the exercise of
this Warrant, be entitled to receive, in addition to the number of
shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefore, the amount of stock and
other securities and property (including cash in the cases referred
to in clauses (ii) and (iii) above) which such Warrant Holder would
hold on the date of such exercise had he been the holder of record
of such Common Stock as the date on which holders of Common Stock
received or became entitled to receive such shares and/or all other
additional stock and other securities and property.
(c) If any capital reorganization of the capital stock of the Company,
or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of Common
Stock shall be entitled to receive stocky securities or assets with respect
to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby the Warrant Holder shall
thereafter have the right to purchase and receive (in lieu of the shares of
the Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares
of stock, securities or assets as may be issued or payable with respect to
or in exchange for a number of outstanding shares of such Stock equal to
the number of outstanding shares of such stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented
hereby. In any such case, appropriate provision shall be made with respect
to the rights and interests of the Warrant Holder to the end that the
provisions hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable,
as nearly as may be, in relation to any shares of stock, securities or
assets thereafter deliverable upon the exercise hereof. The Company will
not effect any such consolidation, merger or sale unless, prior to the
consummation thereof, the successor corporation (if other than the Company)
resulting from such consolidation or the corporation purchasing such assets
shall assume by written instrument, executed and mailed or delivered to the
registered holder hereof at the last address of such holder appearing on
the books of the Company, the obligation to deliver to such holder such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase.
(d) If the Company shall at any time or from time to time issue or sell
any of its Common Stock, or securities convertible into its Common Stock, or
options or warrants to purchase Common Stock or securities convertible into
Common Stock, for a consideration per share of Common Stock less than the
Exercise Price in effect immediately prior to the time of such issue or sale,
the Exercise Price then in effect and then applicable for any subsequent
period or periods shall be decreased to an amount equal to the consideration
per share of Common Stock received upon such issuance or sale.
(e) Upon any adjustment of the Exercise Price, and/or any increase or
decrease in the number of Warrant Shares the Company shall give written notice
thereof, by first class mail, postage prepaid, addressed to the registered
holder of this Warrant at the address of such holder as shown on the books of
the Company. The notice shall be signed by the Company's chief financial
officer and shall state the Exercise Price resulting from such adjustment and
the increase or decrease, if any, in the number of Warrant Shares purchasable
at such price, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
(f) If any change in the outstanding Common Stock of the Company or any
other event occurs as to which the other provisions of this Section 3 are not
strictly applicable or if strictly applicable would not fairly protect the
purchase rights of the Warrant Holder in accordance with the essential intent
and principles of such provisions, then the Board of Directors of the Company
shall make an adjustment in the number and class of shares available under the
Warrant, the Exercise Price and/or the application of such provisions, in
accordance with such essential intent and principles, so as to protect such
purchase rights as aforesaid.
The adjustment shall be such as will give the Warrant Holder upon exercise for
the same aggregate Exercise Price the pro rata share, class and kind of shares
as he would have owned had the Warrant been exercised prior to the event and had
he continued to hold such shares until after the event requiring adjustment.
(g) In case at any time the total number of shares of Common Stock
obtainable upon exercise of this Warrant shall be increased or decreased
pursuant to this Section 3, such total number of shares issuable shall be
rounded to the nearest full share and no adjustment shall be made with respect
to any fractional share of Common Stock which otherwise would be obtainable as a
result of any computation made pursuant to this Section 3.
Section 4. The Company and the Warrant Holder expressly agree and
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acknowledge that any and all rights of the Warrant Holder to registration of the
Warrant Shares are contained in a certain Registration Rights Agreement, a copy
of which is attached as Exhibit 1.
Section 5. The Warrant Shares which may be transferred to the Warrant
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Holder pursuant to this Warrant shall not have been registered under the
Securities Act of 1933 or any similar state law and the Warrant Holder has no
right to receive Warrant Shares so registered, nor does it have any right to
compel the Company to register any Warrant Shares transferred pursuant hereto,
(except as set forth in Section 4 above). All Warrant Shares transferred
pursuant to this Warrant may be "restricted securities" as defined in Rule 144
under the Securities Act of 1933. The Warrant Holder for himself and his
permitted assignees agrees with the Company that any Warrant Shares obtained
upon the exercise of this Warrant shall be so obtained for investment and
without any view to the distribution thereof and shall not be sold, transferred,
assigned or hypothecated except in compliance with the registration requirements
of applicable federal and state securities laws or pursuant to an applicable
exemption therefrom. The Company covenants and agrees that all Warrant Shares
will, upon issuance, be duly authorized, validly issued, fully paid and non-
assessable and free from all preemptive rights of any shareholder and free of
all taxes, liens and charges with respect to the issue thereof. The Company
further covenants and agrees that the Company has at the date hereof, and during
the period within which the rights represented by this Warrant may be exercised
the Company will at all times have, authorized and reserved, for the purpose of
issue or transfer upon exercise of the subscription rights evidenced by this
Warrant, a sufficient number of shares of authorized but
unissued Common Stock when and as required to provide for the exercise of the
rights represented by this Warrant. The Company will take all such action as may
be necessary to assure that such shares of Common Stock may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed. The Company will not take any action which would result in any
adjustment of the Exercise Price if the total number of shares of Common Stock
issuable after such action upon exercise of all outstanding warrants, together
with all shares of Common Stock then outstanding and all shares of Common Stock
then issuable upon exercise of all options and upon the conversion of all
convertible securities then outstanding, would exceed the total number of shares
of Common Stock then authorized by the Company's Articles of Incorporation.
Section 6. Nothing contained in this Warrant shall be construed as
---------
conferring upon the Warrant Holder the right to vote or to consent or to receive
notice as a shareholder in respect of the meetings of shareholders or the
election of Directors of the Company or any other matter, or any rights
whatsoever as a shareholder of the Company, provided that if:
(i) the Company shall take action to make any dividend (whether in
cash, stock or in kind) or other distribution to the holders of
Common Stock;
(ii) the Company shall take action to offer for subscription pro-rata
to the holders of Common Stock any additional shares of stock of any
class or other rights;
(iii) the Company shall take action to accomplish any capital
reorganization, or reclassification of the capital stock of the
Company, or consolidation or merger of the Company with, or sale of
all or substantially all of its assets to, another corporation; or
(iv) the Company shall take action looking to a voluntary or
involuntary dissolution, liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall (1) at least 20 days
prior to the date on which the books of the Company shall close or a record
shall be taken for such distribution or subscription rights or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, cause
written notice thereof to be sent to the Warrant Holder as provided in Section 7
hereof, and (2) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, cause at
least 20 days prior written notice of the date when the same shall take place to
be given to the Warrant Holder in the same manner. Such notice in accordance
with the foregoing clause (1) shall also specify, in case of any such
distribution or subscription rights, the date on which the holders of Common
Stock shall be entitled thereto, and such notice in accordance with the
foregoing clause (2) shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be.
Section 7. All communications hereunder shall be in writing and, if sent to
---------
the Warrant Holder or the registered holder hereof, will be mailed, delivered
or telecopied and confirmed to him at his address as set forth above, or if
sent to the Company, shall be mailed, delivered or telecopied and confirmed to
the Company at the Company's address set forth above, subject in any case, to
such notification of change of address as either the Warrant Holder or the
Company may give to the other from time to time.
Section 8. The issuance of certificates for shares of Common Stock upon
---------
the exercise of the Warrant shall be made without charge to the Warrant Holder
for any issue tax in respect thereof; provided, however, that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the then Warrant Holder.
Section 9. The Company will at no time close its transfer books against
---------
the transfer of any warrant or of any shares of Common Stock issued or issuable
upon the exercise of any warrant in any manner which interferes with the timely
exercise of this Warrant.
Section 10. This Warrant and any provision hereof may be changed, waived,
----------
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of the same is sought.
Section 11. The Company represents and warrants to the Warrant Holder that
----------
upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction, or mutilation of any Warrant or stock certificate and, in
the case of any such loss, theft or destruction, upon receipt of any indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Warrant or stock certificate, the
Company at its expense will make and deliver a new Warrant or stock certificate,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or
stock certificate.
Section 12. The provisions contained herein will inure to the benefit of
----------
and be binding upon the Warrant Holder and the Warrant Holder's executors,
administrators and permitted assigns and the Company and the Company's
executors, administrators and assigns.
Section 13. The provisions hereof shall for all purposes be construed in
----------
accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the Company has executed this Warrant this ___ day of
_______________, 1996.
ACCENT COLOR SCIENCES, INC.
By: _______________________
Its: President
Exhibit I
---------
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (this "Agreement") is made this _____ day of
------------
February 1996, by ACCENT COLOR SCIENCES, INC., a Connecticut corporation (the
"Company") for the benefit of XEROX CORPORATION, a New York corporation
--------
("Xerox"), and each other Purchaser (individually a "Purchaser"
---------
and collectively, the "Purchasers") entering into a Warrant Purchase Agreement
----------
(the "Warrant Agreement").
-----------------
1. Securities Laws Representations and Covenants of purchaser.
----------------------------------------------------------
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 1 934, as amended (the "1934 Act").
2. Registration Rights.
-------------------
2.1 Certain Definitions. As used in this Agreement, the following terms
-------------------
shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
------------
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
the Company.
(c) "Form S1, Form SB-1, Form S-2 Form SB-2 and Form S-3" shall
---------------------------------------------------
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 or successor form
then in effect.
(d) The terms "Register", "Registered" and "Registration" refer 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 until such time
----------------------
as such shares become eligible for sale under subparagraph (k) of Rule 144 or
any successor thereto.
(f) "Registration Expenses" shall mean all expenses incurred by 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 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
----------------------
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 any restrictive legend placed upon the
Registrable Securities under the Securities Act can be properly removed and such
legend shall have been removed.
(i) "Rule 144" shall mean Rule 144 promulgated by the Commission
pursuant to the Securities Act and any successor rules thereto.
(j) "Purchasers" shall mean, collectively, the Purchasers (including
Xerox), their assignees and transferees, and individually, a
Purchaser (including Xerox) and any transferee or assignee of
such Purchaser.
(k) "Securities Act" shall mean the Securities Act of 1933, as
--------------
amended.
(l) "Selling Shareholders" shall mean all underwriting discounts
--------------------
and selling commissions applicable to the sale of Registrable
Securities pursuant to this Agreement.
(m) "Selling Shareholders" shall mean a holder of Registrable
--------------------
Securities who requests Registration under Section 2 herein.
(n) "Shares" shall mean the Common Stock issued to the
------
Purchasers pursuant to various Warrant agreements regardless
of whether such Warrant Agreements have been or in the future
are entered into between the Company and any Purchaser.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Warrant Agreement.
2.2 Required Registration. If the Company shall be requested by 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 the giving of the
written notice by the Company; provided however, that the 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 22.
(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 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 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
----------------------
(a) Each time that the Company proposesd 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 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 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
--------
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
----------------------
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 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
--------
however that the Company shall not be required to consent to general service of
-------
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 there in not misleading in
the light of the circumstances then existing.
2.5 Expenses. The Company shall pay all Registration Expenses incurred
--------
by the Company in complying with this Section 2; provided however 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
----------------------------------
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.
2.7 Indemnification.
---------------
2.7.1 Company's Indemnification of Purchasers. The Company shall
---------------------------------------
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 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 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 lndemnification of Company. Each Selling
------------------------------------------------
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 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. Anything in the
foregoing to the contrary notwithstanding, in no event shall the aggregate
obligations of a Selling Shareholder under this Section 2.7.2 to all parties
that may be entitled to indemnification hereunder exceed the amount of proceeds
received by such Selling Shareholder in connection with such offering of
Registrable Securities.
2.7.3 Indemnification Procedure. Promptly after receipt by an indemnified
-------------------------
party under this Section 2.7 of notice of any 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 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.
3. Covenants of the Company. 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 supplement related thereto, the Company
will provide each Selling Shareholder with copies of all pages thereto, if any,
which reference such Selling
4. Miscellaneous.
-------------
(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 his Warrant
Agreement, 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.
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: _______________________________
Xxxxxxx X. Xxxxxx, President
and Chief Executive Officer
Agreed and Accepted this
_____ day of _______________, 1996
XEROX CORPORATION
By: ___________________________
Name:
Title:
EXHIBIT II
PURCHASE FORM
(To be executed only upon exercise of Warrant)
The undersigned registered owner of the Warrant to' Purchase Common Stock
executed by Accent Color Sciences, Inc. irrevocably exercises the Warrant and
purchases _________ of the number of shares of Common Stock of Accent Color
Sciences, Inc. purchasable with the Warrant, and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this
Warrant.
Dated: _________________, 19___
______________________________
(Signature of Registered Owner)
______________________________
(Street Address)
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(City) (State) (Zip)
