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As filed with the Securities and Exchange Commission on October 15, 1997
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ACCENT SOFTWARE INTERNATIONAL LTD.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Israel 7372 N.A.
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Numbers) Identification No.)
</TABLE>
28 Pierre Koenig Street
Jerusalem 91530, Israel
Telephone: 972-2-679-3723
(Address and telephone number of Registrant's principal executive offices)
Todd A. Oseth
Accent Worldwide, Inc.
Suite 340
2864 South Circle Drive
Colorado Springs, CO 80906
(719) 576-2610
(Name, address and telephone number of agent for service of process)
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Copies to:
Herbert H. Davis III, Esq. Barry P. Levenfeld, Esq.
Rothgerber, Appel, Powers & Johnson LLP Yigal Arnon & Co.
1200 Seventeenth Street, Suite 3000 3 Daniel Frisch Street
Denver, CO 80202-5839 Tel Aviv 64731, Israel
Telephone: (303) 623-9000 Telephone: 972-3-692-6868
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Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
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<PAGE>
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. /X/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER ORDINARY SHARE(1) OFFERING PRICE(1) FEE
<S> <C> <C> <C> <C>
Ordinary Shares,
NIS .01 nominal
value per share 812,000 (2) $2.557 $2,076,284.00 $629.18
</TABLE>
(1) Based upon the average of the high and low sales prices of the Company's
Ordinary Shares on The Nasdaq Small Cap Market on September 5, 1997,
estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457 of the Securities Act of 1933, as
amended.
(2) Includes 500,000 Ordinary Shares, which are issuable upon the exercise of
warrants issued to consultants to the Company and 312,000 Ordinary Shares
issuable as payment to another consultant of the Company.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
PROSPECTUS
ACCENT SOFTWARE INTERNATIONAL LTD.
812,000 ORDINARY SHARES
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THIS PROSPECTUS RELATES TO THE PUBLIC OFFERING, WHICH IS NOT BEING
UNDERWRITTEN, OF UP TO 812,000 ORDINARY SHARES, NOMINAL VALUE NIS 0.01 PER SHARE
(THE "SHARES"), OF ACCENT SOFTWARE INTERNATIONAL LTD. ("ACCENT" OR THE
"COMPANY"), WHICH MAY BE OFFERED FROM TIME TO TIME BY CERTAIN SHAREHOLDERS OF
THE COMPANY OR BY AUTHORIZED TRANSFEREES (THE "SELLING SHAREHOLDERS").
THE SHARES ARE ISSUABLE TO THE SELLING SHAREHOLDERS (i) AS COMPENSATION TO
INVESTOR RESOURCE SERVICES, INC., AS COMPENSATION FOR VARIOUS FINANCIAL ADVISORY
SERVICES BEING PROVIDED TO THE COMPANY; AND (ii) UPON EXERCISE OF WARRANTS TO
PURCHASE AN AGGREGATE OF 500,000 ORDINARY SHARES ISSUED TO OTHER PARTIES FOR
SERVICES RENDERED TO THE COMPANY ("WARRANTS"). THE COMPANY WILL RECEIVE NO PART
OF THE PROCEEDS OF SALES OF THE SHARES. HOWEVER, THE COMPANY WILL RECEIVE
PROCEEDS FROM THE EXERCISE OF THE WARRANTS, IF THE WARRANTS ARE EXERCISED. THE
EXERCISE PRICE OF THE WARRANTS IS $1,415,500 IN THE AGGREGATE. THE SHARES HAVE
BEEN RESERVED BY THE COMPANY FOR ISSUANCE AND THE EXERCISE OF THE WARRANTS. THE
SHARES ARE BEING REGISTERED BY THE COMPANY PURSUANT TO VARIOUS AGREEMENTS
BETWEEN IT AND THE SELLING SHAREHOLDERS.
ONCE ISSUED, THE SHARES MAY BE OFFERED BY THE SELLING SHAREHOLDERS FROM
TIME TO TIME IN ONE OR MORE TRANSACTIONS IN THE OPEN MARKET AT PRICES PREVAILING
THEREIN, IN NEGOTIATED TRANSACTIONS AT SUCH PRICES AS MY BE AGREED UPON, OR IN A
COMBINATION OF SUCH METHODS OF SALE. SEE "PLAN OF DISTRIBUTION." THE PRICE AT
WHICH ANY OF THE SHARES MAY BE SOLD, AND THE COMMISSIONS, IF ANY, PAID IN
CONNECTION WITH ANY SUCH SALE, ARE UNKNOWN AND MAY VARY FROM TRANSACTION TO
TRANSACTION. THE COMPANY WILL PAY ALL EXPENSES INCIDENT TO THE REGISTRATION OF
THE SHARES. SEE "SELLING SHAREHOLDERS" AND "PLAN OF DISTRIBUTION."
ON OCTOBER 13, 1997, THE LAST REPORTED SALE OF THE ORDINARY SHARES ON THE
NASDAQ SMALL CAP MARKET WAS $2.50. ORDINARY SHARES ARE TRADED UNDER THE NASDAQ
SYMBOL ACNTF.
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THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE PURCHASERS OF THE
SECURITIES OFFERED HEREBY SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 7.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE COMPANY HAS RECEIVED FROM THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL AN
EXEMPTION FROM THE OBLIGATION TO PUBLISH THIS PROSPECTUS IN THE MANNER REQUIRED
PURSUANT TO THE PREVAILING LAWS OF THE STATE OF ISRAEL. NOTHING IN SUCH
EXEMPTION SHALL BE CONSTRUED AS AUTHENTICATING THE MATTERS CONTAINED
<PAGE>
IN THIS PROSPECTUS OR AS AN APPROVAL OF THEIR RELIABILITY OR ADEQUACY OR AS
AN EXPRESSION OF OPINION AS TO THE QUALITY OF THE SECURITIES HEREBY OFFERED.
The date of this Prospectus is October 15, 1997
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements and other information can be inspected and
copied at the Public Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and the following regional
offices: Northeast Regional Office, Suite 1300, Seven World Trade Center, 13th
Floor, New York, New York 10048, and Midwest Regional Office, Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and copies of such material may also be obtained from the Public
Reference Section of the Commission at prescribed rates. The Commission
maintains a Web site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The reports, proxy, information
statements and other information filed by the Company with the Commission are
also filed with The Nasdaq Small Cap Market and can be inspected at its
facility at 1735 K Street, N.W., Washington, D.C. 20006. The Company intends
to furnish its shareholders with annual reports containing audited financial
statements and such other periodic reports as the Company deems appropriate
or as may be required by law.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities offered by this
Prospectus. This Prospectus, which constitutes a part of such Registration
Statement, does not contain all of the information set forth in, or annexed as
exhibits to, the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulation of the Commission. For further
information with respect to the Company and this offering, reference is made to
the Registration Statement, including the exhibits filed therewith, which may be
inspected without charge at the offices of the Commission at the addresses set
forth above. Copies of the Registration Statement may be obtained from the
Commission at its principal office upon payment of prescribed fees. Statements
contained in this Prospectus as to the contents of any contract or other
documents are not necessarily complete and, where the contract or other document
has been filed as an exhibit to the Registration Statement, each statement is
qualified in all respects by reference to the applicable document filed with the
Commission.
The Company has received from the Securities Authority of the State of
Israel (the "Israel Securities Authority") an exemption from the reporting
obligations as specified in Chapter Six of the Israel Securities Law 5728-1968,
which include the obligation to submit periodic and immediate reports to the
Israel Securities Authority, provided that a copy of each report submitted in
accordance with applicable United States law shall be available for public
review at the Company's principal offices in Israel.
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<PAGE>
FORWARD LOOKING STATEMENTS
Certain non-historical statements contained in this Prospectus are
forward-looking statements, which involve known and unknown risks and
uncertainties. The Company is including this statement for the express
purpose of availing itself of the protections of the safe harbor provided by
the Private Securities Litigation Reform Act of 1995 with respect to all such
forward looking statements. Examples of forward looking statements include,
but are not limited to: (i) projections of capital expenditures, revenues,
growth, prospects, capital structure and other financial matters; (ii)
statements of plans or objectives of the Company; and (iii) statements using
the words "anticipate," "expect," "may," "project," "intend" or similar
expressions.
The Company's ability to predict projected results or the effects of
certain events on the Company's operating results is inherently uncertain.
Therefore, the Company wishes to caution readers of this Prospectus to carefully
consider the matters set forth under the caption "Risk Factors" and certain
other matters discussed herein and in other publicly available information.
Such factors and many other factors beyond the control of the Company's
management could cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking
statements. See "Risk Factors."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File No.
0-26394) Pursuant to the Exchange Act are hereby incorporated by reference in
this Prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended December 31,
1996;
(2) The Company's Current Report on Form 8-K dated February 5, 1997;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ending
March 31, 1997;
(4) The Company's Proxy Statement for its Annual Meeting of Shareholders held
on May 28, 1997;
(5) The Company's Quarterly Report on Form 10-Q for the quarter ending
June 30, 1997
(i. The Company's Current Report on Form 8-K dated August 20, 1997;
(ii. The Company's Registration Statement on Form S-3 dated August 27, 1997;
(iii. The Company's Amended Registration Statement on Form S-3 dated
September 29, 1997;
(iv. The Company's Proxy Statement for its Extraordinary Meeting of
Shareholders to be held on October 6, 1997; and
(10) The description of the Company's Ordinary Shares contained in its
Registration Statement on Form 8-A, filed with the Commission on July 11,
1995, as amended by the Company's Registration Statement filed on
Form 8-A/A filed on July 14, 1995.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference into this Prospectus, to the extent required, and to
be a part of this Prospectus from the date of filing of such reports and
documents.
Any statement contained in a document incorporated by reference into this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
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<PAGE>
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not, except as so modified or superseded, be deemed
to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon written or oral request of such person, a copy of any or all of
the foregoing documents incorporated by reference into this Prospectus (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be submitted in writing to Corporate Secretary, Accent Software
International Ltd., POB 53063, 28 Pierre Koenig Street, Jerusalem 91530 Israel,
or by e-mail: [email protected].
Unless the context otherwise requires, all references to Accent or the
Company include its wholly owned United States subsidiary, Accent Worldwide,
Inc. ("Accent Worldwide"), its wholly owned United Kingdom subsidiary, Accent
Software International (Europe) Ltd. ("Accent Europe"), and its majority-owned
subsidiary, AgentSoft Ltd. ("AgentSoft"). ACCENT is a registered trademark of
the Company in the United States, the United Kingdom, Germany and the Benelux
countries. The Company has applied to register AGENTSOFT, GLOBAL DEVELOPMENT KIT
and WEBTAMER as trademarks in the United States and in certain other countries.
Windows is a registered trademark and Windows NT and Windows 95 are
trademarks of Microsoft Corporation ("Microsoft"). All other trademarks
appearing in this Prospectus are the property of their respective holders.
Unless otherwise indicated, all references to Microsoft Windows are to the 3.xx
versions of Windows or Windows 95 and references to Netscape Navigator are to
2.0 and subsequent versions.
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<PAGE>
THE COMPANY
Accent is a language solutions company which designs, develops, markets and
supports multilingual software development tools as well as multilingual
Internet and text processing software products. Accent's products address the
growing need for organizations and individuals to view, create, edit and
exchange information in languages other than English and in multiple languages.
In addition, through the Company's majority-owned subsidiary AgentSoft, it also
develops and markets intelligent agent based software tools and products for
process automation over the Internet. Through 1996 and prior, Accent's products
were marketed in more than 30 countries, primarily through retail and OEM
distribution channels. Beginning in 1997, Accent's market focus has shifted to
one of providing its technology and experience in developing language solutions
and intelligent agent software primarily to OEM and corporate customers.
Accent has used its multilingual software globalization technology as a
platform to launch several multilingual Internet products addressing the needs
of its target users. In December 1995, Accent introduced INTERNET WITH AN
ACCENT, which enables users to browse the Web in a wide variety of languages and
alphabets independent of the local language version of the Windows operating
system and which contains Web authoring tools and e-mail with broad multilingual
capabilities. Accent broadened its Internet product line through the release in
June 1996 of NAVIGATE WITH AN ACCENT, a multilingual browser plug-in for
Netscape Navigator. In the first half of 1997, Accent released the first
versions of WEBTAMER, an integrated group of utilities for the World Wide Web,
which includes AgentSoft's advanced LIVE AGENT intelligent agent technology, and
the ACCENT GLOBAL DEVELOPMENT KIT, a set of standards and tools that enables the
globalization of any Windows software application.
As the Internet continues to grow in terms of the number of users,
geographic diversity and breadth of information, Accent management believes that
demand for software applications in the areas of information access and
management, electronic commerce and workflow management and systems and network
management will increase significantly. Accent management believes that many of
these software applications will be based on intelligent agent technology.
Intelligent agents are electronic assistants that will help automate the
Internet by performing complex, repetitive or time-consuming operations. Accent
established AgentSoft in February 1996 in order to capitalize on the expected
growth of this market and to broaden its Internet product line beyond
multilingual-based software. AgentSoft is dedicated to the development of
intelligent agent-based technology and applications for the Internet and
enterprise Intranet. Through the introduction of WEBTAMER and other innovative
applications of intelligent agent technology, the Company is seeking to
establish itself as a leading participant in the emerging market for Internet
software based on intelligent agent technology.
Accent is seeking to strengthen its position as a leading provider of
multilingual Internet and word processing applications and development tools. To
achieve these objectives, Accent's business strategy is to (i) emphasize
software globalization and intelligent agent technologies; (ii) leverage its
experience in multilingual software development; (iii) add new technologies,
including intelligent agents, to its core technology platforms; and (iv) develop
strategic relationships with leading industry participants.
Accent was organized in 1988 under the laws of the State of Israel. The
Company's principal executive offices are located at 28 Pierre Koenig Street,
Jerusalem 91530, Israel, and its telephone number is 972-2-679-3723.
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<PAGE>
RECENT DEVELOPMENTS
In response to the Company's recent operating results, the Company
implemented a revised business plan designed to decrease operating expenses and
to improve its operating and financial performance while maintaining product
development activities. Specifically, the Company effected a 30% reduction in
the number of its employees. In addition, the Company reduced (i) its
expenditures on marketing and advertising by approximately 50% and (ii) its
other operating expenses by approximately 50% in all areas exclusive of research
and development, which expenses have remained relatively level through the date
of this Prospectus. The Company believes that these reductions and the
maintenance of the research and development expenditures will help enable the
Company to achieve its strategic product development objectives. Roger R.
Cloutier II, who is currently a vice president of Jacobs Investors, Inc. and a
general partner of IMR (a significant shareholder of the Company), was appointed
Co-Chairman of the Board on October 23, 1996. Mr. Cloutier, along with Robert
Rosenschein, Elliott Broidy and Mark Tebbe, constitute the Executive Committee
of the Board of Directors responsible for monitoring the implementation of the
Company's revised business plan. Furthermore, the Company, in the first quarter
of 1997, successfully recruited a new President/Chief Executive Officer and a
Chief Financial Officer, both of whom have extensive industry experience. Based
in Accent's new Colorado Springs office, the new management team has begun to
shift certain sales and management functions to the United States to enable such
personnel to be more effective in targeting customers and end-users of the
Company's products.
On August 5, 1997, the Company completed a financing arrangement with CC
Investments LDC (the "Investor"), pursuant to Regulation D of the Securities Act
of 1933. The Company received $2,000,000 in cash before expenses (approximately
$1,850,000 net of expenses) and, in return, issued the Investor the debenture
carrying six percent (6%) annual interest (payable in cash or Ordinary Shares,
at the Company's option) and convertible into the Company's Ordinary Shares at a
conversion rate equal to the lesser of 135% of the average closing bid price of
the Ordinary Shares for the five trading day period preceding the closing date
or 75% of the average bid price of the Ordinary Shares for the five trading day
period preceding the date of conversion. The debenture automatically converts
into Ordinary Shares on August 5, 1999, two years after the date of the closing,
and may be converted at the Investor's option anytime after the earlier of
November 2, 1997, or that date on which the resale of the Ordinary Shares
issuable upon conversion of the debenture is registered with the SEC. At any
time prior to November 5, 1997, the Company may convert the debenture into 2000
newly authorized Preferred Shares designated Series A for purposes of such
conversion. The Series A Preferred Shares will have a liquidation preference of
$1,000 per share plus a premium of 6% per annum. The Series A Preferred Shares
will not be entitled to any dividends nor will they have any voting rights
except as provided by Israeli law with respect to extraordinary corporate
transactions. The Series A Preferred Shares will be convertible into Ordinary
Shares on the same terms as the debenture as described above. The term of the
Series A Preferred Shares will also prohibit the issuance of Preferred Shares
with terms superior or equal to the terms of the Series A Preferred Shares for
some period of time. In addition, the Company has the right to redeem the
debenture on or after July 31, 1998, as long as no event of default has occurred
thereunder, at a redemption price of not less than 125% of the principal amount
thereof and any accrued and unpaid interest or other payments thereon.
Conversion of the debenture (or Preferred Shares) will result in dilution
of the Company's current shareholders. Assuming that the Company's share price
remains at its September 25, 1997, level of $2.78 per share, the debenture (or
Preferred Shares) will be convertible into approximately 960,000 Ordinary
Shares. If the share price decreases below $2.78, the conversion price may
decrease and there would be a
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corresponding increase in the number of shares into which the debenture (or
Preferred Shares) would be converted. It cannot be predicted whether the
share price will decrease to this extent.
The Investor was also granted warrants to purchase 250,000 Ordinary Shares
of the Company at an exercise price of $2.80 per share and additional warrants
to purchase 50,000 Ordinary Shares at an exercise price of $3.20 per share. For
facilitating the completion of this investment, The Shemano Group, Inc., San
Francisco, California, and Equity Management Partners, Atlanta, Georgia, (the
"Placement Agents") were granted warrants to purchase a total of 300,000
Ordinary Shares at an exercise price of $1.725 (equal to 115% of the closing bid
price on the day of closing). The warrants expire on August 5, 2002, if not
exercised earlier.
The Company has entered into an agreement with Investor Resource Services,
Inc. ("IRSI"), by which IRSI will provide financial advisory, strategic business
planning, and investor and public relations services designed to make the
investing public knowledgeable about the benefits of stock ownership in the
Company. Pursuant to this Agreement, the Company has issued 612,000 Ordinary
Shares to IRSI as compensation for the services to be provided ("IRSI Shares").
Of these IRSI Shares, 312,000 shares are included in this Registration
Statement, and 300,000 shares are to be registered within twelve months of their
delivery to IRSI.
The Company has also engaged Mr. Brad Gillingham as a consultant in the
areas of strategic sales and marketing. Mr. Gillingham received warrants to
purchase 100,000 Ordinary Shares at $2.00 per share. The warrants expire on
August 1, 1999, if not exercised earlier. The agreement with Mr. Gillingham also
provides for the grant of additional warrants to purchase 100,000 Ordinary
Shares at an exercise price of $4.00 per share provided that the Company
receives $1,000,000 of revenue attributable to his efforts within 12 months of
the execution of the agreement.
Pursuant to the terms of the agreements between the Company and the
Placement Agents, IRSI and Gillingham, the Company must file a registration
statement on Form S-3 for the Ordinary Shares to be issued to IRSI and reserved
for issuance upon exercise of the warrants granted to the Placement Agents and
Gillingham.
On December 9, 1996, the Company issued warrants to purchase a total of
200,000 Ordinary Shares as compensation for consultant services by Robert J.
Laikin, Michael Mosher and the Manufacturers Indemnity and Insurance Company of
America ("MIICA") (the "Laikin Consultants"). Half of these warrants (100,000)
vested immediately and the remainder were to vest one year later provided that
each of the Laikin Consultants were still providing consulting services to the
Company on September 30, 1997. On August 18, 1997, the Company terminated the
consultant agreements with the Laikin Consultants. Thus, the condition precedent
to the vesting of the second 100,000 warrants do not exist. The exercise price
of the warrants to purchase 100,000 Ordinary Shares is $7.00 per share and the
warrants expire on December 9, 2003, if not exercised earlier.
The warrants issued to the Laikin Consultants provide the warrant holders
with the right to "piggyback" on certain registration statements filed by the
Company. All three of the Laikin Consultants have chosen to exercise such right.
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<PAGE>
The 812,000 Ordinary Shares being registered pursuant to this Registration
Statement are 312,000 shares which are being issued to IRSI and the shares which
have been reserved for issuance upon exercise of the warrants issued to the
Placement Agents, Gillingham and the Laikin Consultants.
LITIGATION AND OTHER CLAIMS
On September 9, 1997, AgentSoft was served with a complaint filed by its
former president and vice president. The complaint named as defendants
AgentSoft, Accent, Todd Oseth as Chief Executive Officer of AgentSoft and
Jeffrey Rosenschein as Chairman of the Board of Directors of AgentSoft, as
defendants in Israeli Labor Court. The complaint alleges wrongful termination of
the plaintiffs' employment agreements in May 1997, failure to pay the
contractually required severance, and failure to pay, in a complete and timely
manner, the statutory severance payments required by Israeli law upon the
termination of an employee. Plaintiffs seek compensation in excess of NIS
650,000 (or approximately $186,000). The Company believes that the termination
of their employment was done properly and lawfully and that, therefore, any
claim by these former employees in connection with such termination is without
grounds. Accordingly, the Company estimates that the chances of an outcome
favorable to the Company and the other defendants is high.
In the course of its business, the Company is the subject of claims, some
or which may mature into litigation. Although the Company is aware of claims
asserted against it, the Company is not aware, except as discussed in the
preceding paragraph, of any claims which have a reasonable possibility of
adverse outcome in a material amount. However, unforeseen circumstances may
cause such claims, or other, currently unknown claims, to result in adverse
outcomes in material amounts.
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS,
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, PRIOR TO MAKING AN
INVESTMENT DECISION. CERTAIN STATEMENTS IN THIS PROSPECTUS THAT ARE NOT
HISTORICAL ARE FORWARD-LOOKING, INVOLVING KNOWN AND UNKNOWN RISKS AND
UNCERTAINTIES. MANY FACTORS, INCLUDING THE RISK FACTORS IDENTIFIED BELOW, COULD
CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE
MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT
MAY BE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT; ANTICIPATED FUTURE LOSSES;
LIMITED OPERATING HISTORY
The Company has incurred net losses since 1992 of approximately $0.7
million, $3.1 million, $7.8 million and $21 million for the years ended
December 31, 1993, 1994, 1995 and 1996, respectively, and a net loss of
approximately $4.8 million for the six months ended June 30, 1997. As of June
30, 1997, the Company had an accumulated deficit of $38 million and a total
shareholders' deficit of $1.7 million. Pursuant to its revised business plan,
the Company intends to continue to make expenditures on new product
introductions, marketing, research and development, customer support and
administrative infrastructure over the near term. As a result, the Company
expects to incur net losses through the end of 1997, and possibly beyond.
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<PAGE>
The Company commenced operations in 1988 and shipped its first multilingual
word processing product in Israel in 1992, and internationally in 1994.The
Company shifted the focus of its operations in 1997 to the development and
distribution of multilingual software development tools for the non-retail
markets, and its first such products were released in the second quarter of
1997.The Company, therefore, has a limited operating history upon which to base
an evaluation of its current principal business and prospects. Operating results
for future periods are subject to numerous uncertainties, and there can be no
assurance that the Company will achieve or sustain profitability on an annual or
quarterly basis. The Company's prospects must be considered in light of the
risks encountered by companies in the early stage of development, particularly
companies in new and rapidly evolving markets. Future operating results will
depend upon many factors, including the demand for the Company's Internet
products, the level of product and price competition, the ability of the Company
to develop and market new products and product enhancements, the success of the
Company in attracting and retaining motivated and qualified personnel, the
ability of the Company to control its costs and general economic conditions.
There can be no assurance that the Company will be successful in addressing such
risks.
INDEPENDENT PUBLIC ACCOUNTANT'S DOUBT AS TO COMPANY'S ABILITY TO CONTINUE AS A
GOING CONCERN
The report of the Company's independent public accountants attached as part
of the Company's 1996 Annual Report on Form 10K contains an explanatory
paragraph as to the Company's ability to continue as a going concern. Among the
factors cited by the accountants as raising substantial doubt as to the
Company's ability to continue as a going concern is that the Company has
incurred losses from operations of approximately $21 million during the year
ended December 31, 1996, and had an accumulated deficit of approximately $33
million as of December 31, 1996.
SIGNIFICANT CAPITAL REQUIREMENTS; NEED FOR ADDITIONAL FINANCING
The Company's capital requirements in connection with its development and
marketing activities have been and will continue to be significant. The Company
has been dependent upon the proceeds of sales of its securities, as well as
various government guaranteed and private loans, to fund its development and
marketing activities. The Company is not generating sufficient revenues from its
operations to fund its activities and is, therefore, dependent on the proceeds
of the sale of equity and other financing devices to continue the development of
its technology and the marketing of its products. The Company anticipates, based
on its currently proposed assumptions relating to its operations and financing
plans, that it will have sufficient cash to satisfy its contemplated through the
end of 1997. In the event that financings and cash flow prove to be insufficient
to fund operations (due to a change in the Company's plans or a change, or an
inaccuracy, in its assumptions or as a result of unanticipated expenses,
technical difficulties, problems or otherwise), the Company would be required to
seek additional financing sooner than currently anticipated. There can be no
assurance that additional financing will be available to the Company on
commercially reasonable terms, or at all. The Company has no current arrangement
with respect to, or sources of, additional financing. The inability to obtain
additional financing, when needed, would have a material adverse effect on the
Company, including possibly requiring the Company to curtail or cease its
operations.
SUBSTANTIAL INDEBTEDNESS AND ENCUMBRANCES OF ASSETS
The Company's operations have been and continue to be financed in part from
short-term and long-term indebtedness provided by various financial
institutions. As of June 30, 1997, the outstanding balances of the Company's
short-term and long-term indebtedness were approximately $1.6 million and $1.9
million,
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respectively. All of the Company's assets are pledged as collateral to
secure the Company's indebtedness. If the Company is unable to generate
sufficient cash flow from operations to meet scheduled debt payments or
otherwise to comply with the terms of such indebtedness, it may be required
to refinance all or a portion of its existing debt or to obtain additional
financing. There can be no assurance that the Company will be able to obtain
such refinancing or additional financing. If no such refinancing or
additional financing is available when needed, the Company may be forced to
default on its debt obligations which would have a material adverse effect on
the Company, including the possibility of receivership or liquidation of the
Company. In such an event, the Company's secured creditors could elect to
foreclose on the Company's assets and it is likely that the debenture, the
warrants and the Shares would be worthless. In addition, the agreements
relating to the Company's bank indebtedness provide for an event of default
(and the ability to accelerate and demand repayment of outstanding loans) if
there is a material adverse change in the Company's financial condition.
There can be no assurance that a deterioration of the Company's results of
operations or financial condition will not result in an event of default
under the Company's bank indebtedness.
UNPROVEN ACCEPTANCE OF THE COMPANY'S PRODUCTS
The Company's future operating results will depend primarily upon its
ability to gain market acceptance of its multilingual software development tools
and its Internet productivity tools, such as WEBTAMER. Because the market for
the Company's Internet-related products is new and evolving, it is difficult to
assess or predict with any assurance the growth rate, if any, or the size of the
market for such products. There can be no assurance that the market for the
Company's products and services will develop, or that the Company's products and
services will achieve market acceptance. If the market fails to develop,
develops more slowly than expected or becomes saturated with competitors, or if
the Company's products do not achieve significant market acceptance, the
Company's business, operating results or financial condition will be materially
adversely affected.
UNCERTAINTY OF PRODUCT AND TECHNOLOGY DEVELOPMENT
The Company has not completed development and testing of a number of its
proposed products, some of which are still in the planning stage or in
relatively early stages of development. The Company's success will depend in
part upon the ability of its proposed products to meet targeted performance and
cost objectives, and will also depend upon the timely introduction of its
products into the marketplace and the acceptance of its products by end-users.
The Company will be required to commit considerable time, effort and resources
to finalize development of its proposed products and product enhancements.
Product development efforts may be subject to unanticipated delays, expenses,
difficulties, and the possible insufficiency of funding to complete development
and other risks inherent in the development of new products and technologies.
There can be no assurance as to when, or whether, such product development
efforts will be successfully completed.
DEPENDENCE ON COMPATIBLE THIRD-PARTY SOFTWARE MANUFACTURERS' PRODUCTS AND DESIGN
The Company's products are currently designed, and its proposed products
are being designed, to be utilized with the Windows operating system and with
the products and standards established by certain other software manufacturers.
Accordingly, the performance of certain of the Company's existing products
depends on the actions of other manufacturers, in particular Microsoft. Such
manufacturers may change their products or take actions that could make it more
difficult for the Company to develop its products or
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that could significantly impair the performance of the Company's products.
For example, if Microsoft were to modify future versions of Windows in ways
that required the redesign of the Company's Windows-based products, such
modification could be detrimental to the Company. Although the Company
anticipates that it will be able to adapt its products if necessary, there
can be no assurance that changes in existing products or the introduction of
new products by third parties will not have a material adverse effect on the
performance of the Company's products and technology and on the Company's
financial performance. In addition, the Company's products may need to be
adapted in the future in order to be compatible with other or new operating
systems so that the Company may maintain and expand its product offerings.
There can be no assurance that the Company will be able to make any necessary
adaptations on a timely basis.
PRODUCT CONCENTRATION
Until the beginning of 1996, substantially all of the Company's revenues
were attributable to the sale of its multilingual word processing products.
Beginning in the first quarter of 1996, a substantial portion of the
Company's revenues has been derived from the sale of the Company's
Internet-related products. During the first quarter of 1997, the Company
began to de-emphasize the retail sale of its products and increased its focus
on the development and sale of software tools and products to be sold to
other software developers, corporations and original equipment manufacturers
("OEM"). The Company currently expects that sales of these products will
account for a substantial portion of its revenues for the foreseeable future.
As a result, factors adversely affecting the pricing of or demand for such
products and services, such as competition or technological change, could
have a material adverse effect on the Company's business, operating results
or financial condition.
COMPETITION; TECHNOLOGICAL OBSOLESCENCE
The market for general and Internet-based software and services is new,
intensely competitive, rapidly evolving and subject to rapid technological
change. In addition, there are relatively few barriers to entry into the
software business in general, including into those areas in which the Company
offers and intends to offer products. The Company expects competition in the
market for multilingual software tools for the globalization of software
products and for Internet-based products to increase substantially in the
future. To the extent that the Company's multilingual Internet products are
substitutes for single or dual language products, the Company's products
presently compete with those of numerous well-established companies,
including Microsoft, Netscape Communications Corporation ("Netscape"),
CompuServe, Inc. ("CompuServe") and Quarterdeck Office Systems, Inc.
("Quarterdeck"). The Company expects that AgentSoft will continue to develop
intelligent agent technology that the Company will use in its Internet
productivity products and that the Company will apply artificial intelligence
concepts to document processing and other applications. To the extent that
the Company and AgentSoft are successful in developing such technologies, the
Company will compete with some of the same well-established companies listed
above as well as with companies to which Accent or AgentSoft will license
such technology. These companies have substantially greater financial,
technical, personnel and other resources than the Company and have
established reputations for success in the development, licensing and sale of
their products and technology. In addition, certain companies have
developed, or may be expected to develop, technologies or products that may
be functionally similar to some or all of those being developed by the
Company. The markets for the technology and products being developed by the
Company are characterized by rapid changes and evolving industry standards,
often resulting in product obsolescence or short product life cycles.
Accordingly, the ability of the Company to compete will depend upon, among
other factors, its ability to develop and introduce to the marketplace in a
timely manner new products and
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product enhancements. There can be no assurance that the Company will be
able to compete successfully, that its present or future competitors will not
develop technologies or products that render the Company's products and
technology obsolete or less marketable or that the Company will be able to
introduce new products and product enhancements that are competitive with
other products marketed by industry participants.
DEPENDENCE ON THE INTERNET
Sales of AgentSoft's products and the products of Accent which
incorporate AgentSoft technology will depend in large part upon the
development and maintenance of a robust industry and infrastructure for
providing Internet access and carrying Internet traffic. Because global
commerce and online exchange of information on the Internet and other similar
open wide area networks are new and evolving, there can be no assurance that
the Internet will prove to be a viable commercial marketplace or a viable
medium for the publication and distribution of information. Further, there
can be no assurance that the necessary infrastructure, such as a reliable
network backbone or timely development of complementary products, such as
high speed modems, necessary to make the Internet a viable commercial
marketplace or a viable medium for the publication and distribution of
information will be developed, or, if developed, that the Internet will
become a viable commercial marketplace or a viable medium for the publication
and distribution of information. If the necessary infrastructure or
complementary products are not developed, or if the Internet does not become
a viable commercial marketplace or a viable medium for the publication and
distribution of information, the Company's business, operating results or
financial condition will be materially adversely affected.
PRODUCT RETURNS; COLLECTION OF ACCOUNTS RECEIVABLE; CONSIGNMENT ARRANGEMENTS
Consistent with industry practices, the Company may accept product
returns or provide other credits in the event that a distributor or a
retailer holds excess inventory of the Company's products. Although the
Company is moving away from the retail market toward the OEM and
business-to-business market where product returns are less likely, the risk
of product returns and customer defaults from prior period activities could
have an adverse impact on the Company's future operating results. In
addition, the Company's sales are normally made on credit terms and it does
not hold collateral to secure payment. Therefore, default in payment by one
or more of the Company's customers could adversely affect the Company's
business, operating results or financial condition. There can be no assurance
that actual returns and uncollectible receivables will not exceed the
Company's reserves for such items and any significant increase in product
returns or uncollected accounts receivable beyond reserves could have a
material adverse effect on the Company's business, operating results or
financial condition. Consistent with industry practice, the Company also, on
occasion, transfers products through the distribution channel on a
consignment basis. There can be no assurance that such consignment
arrangements will result in additional sales for the Company or that they
will not result in excess inventory or increased working capital requirements
for the Company.
MANAGEMENT OF A RAPIDLY CHANGING BUSINESS
The Company's business is currently undergoing major change as its new
management shifts its focus from the retail market to the developer,
corporate and OEM markets. This shift in the Company's focus has placed, and
is expected to continue to place, a significant strain on the Company's
management and operations, including its sales, customer support, research
and development, finance and administrative
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operations. The Company has recently been able to recruit a chief executive
officer and chief financial officer who have experience in managing large or
rapidly growing business organizations. However, the Company anticipates that
continued growth, if any, may require it to recruit and hire additional new
development, managerial, finance, sales and marketing and support personnel.
There can be no assurance that the Company will be successful at hiring or
retaining such personnel. The Company's ability to compete effectively and
its future growth, if any, will require the Company to continually improve
its financial and management controls, reporting systems and procedures on a
timely basis, implement new systems as necessary and expand, train and manage
its employee workforce. There can be no assurance that the Company's
controls, systems or procedures will be adequate to support the Company's
operations. The failure of the Company's management to respond effectively to
changing business conditions could have a material adverse effect on the
Company's business, operating results or financial condition.
PRODUCT DEFECTS AND PRODUCT LIABILITY
The Company's software products are highly complex and sophisticated and
could from time to time contain design defects or software errors that could
be difficult to detect and correct. Errors, bugs or viruses may result in the
loss of or the delay in market acceptance or the loss of customer data.
Although the Company has not experienced any material adverse effect
resulting from any software defects or errors, there can be no assurance
that, despite testing by the Company and its customers, errors will not be
found in new products, which could result in a delay in or inability to
achieve market acceptance and thus could have a material adverse impact upon
the Company's business, operating results or financial condition.
DEPENDENCE ON KEY PERSONNEL
The success of the Company is substantially dependent on the performance
of its executive officers and key employees. Five members of senior
management are parties to employment agreements with the Company, three of
which expire in July 1998, and one of which expires in February 2000. The
Company believes that the loss of the services of one or more of such key
personnel could have a material effect on its ability to develop new products
and product enhancements. In addition, Dr. Jeffrey Rosenschein, Chief
Technology Officer-Agents, and one of the five senior managers with an
employment agreement, has an academic affiliation with Hebrew University in
Jerusalem. Dr. Rosenschein was granted a leave of absence from Hebrew
University for the two-year period which expires in October 1997, at which
time Dr. Rosenschein plans to return to his full-time position at the
University. Dr. Rosenschein plans to continue as a director of the Company
and as a paid consultant to the Company, and his termination as a full-time
Company employee is not expected to have a material adverse affect on the
Company. The success of the Company also is dependent upon its ability to
hire and retain additional qualified executive, scientific and marketing
personnel. There can be no assurance that the Company will be able to hire
or retain such necessary personnel. Moreover, there can be no assurance that
the loss of the services of any of its executive officers or other key
employees would not have a material adverse effect on the Company's business,
operating results or financial condition.
PROTECTION OF PROPRIETARY INFORMATION
The Company's success and ability to compete is dependent in part upon
its proprietary software technology. While the Company relies on a
combination of trade secret and copyright law, nondisclosure agreements and
technical measures to establish and protect its proprietary rights and has
also filed patent applications for certain aspects of its technology, there
can be no assurance that the steps taken by the
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Company to protect its proprietary rights will be adequate to prevent
misappropriation of the technology or independent development by others of
software products with features based upon, or otherwise similar to, those of
the Company's products. To license its retail products, the Company
primarily relies on "shrink wrap" licenses that are not signed by the
end-user and, therefore, may be unenforceable under the laws of certain
jurisdictions. In addition, effective copyright and trade secret protection
may be unavailable or limited in certain foreign countries, and the global
nature of the Internet makes it virtually impossible to control the ultimate
destination of the Company's products. Despite the Company's efforts to
protect its proprietary rights, unauthorized parties may attempt to copy
aspects of the Company's products or to obtain and use information that the
Company regards as proprietary. Litigation may be necessary in the future to
enforce the Company's intellectual property rights, to determine the validity
and scope of the proprietary rights of others, or to defend against claims of
infringement or invalidity. Such litigation could result in substantial costs
and diversion of resources and could have a material adverse effect on the
Company's business, operating results or financial condition.
IMPACT OF INFLATION AND CURRENCY FLUCTUATION
The vast majority of the Company's sales are made in dollars and most of
the Company's expenses are in dollars and New Israeli Shekels ("NIS"). The
cost of the Company's operations in Israel, as expressed in dollars, is
influenced by the extent to which any increase in the rate of inflation in
Israel over the rate of inflation in the U.S. is not offset by the
devaluation of the NIS in relation to the dollar. The change in the cost of
the Company's operations in Israel, as expressed in dollars, relates
primarily to the cost of salaries in Israel, a substantial portion of which
are paid in NIS linked to the Consumer Price Index in Israel (the "Israeli
CPI"). While the Company may in the future, to the extent it deems
advisable, purchase currency options or other hedging instruments to decrease
the risk of the NIS devaluation against the dollar being less than the rate
of inflation in Israel, no assurance can be given that any such financial
strategy will be successful in limiting the Company's risk.
CONCENTRATION OF OWNERSHIP; POTENTIAL CONFLICTS OF INTEREST
As of the date of this Prospectus, IMR and its affiliates, together with
the Company's officers and directors, will beneficially own an aggregate of
approximately 33.3% of the issued and outstanding Ordinary Shares. Such
ownership will allow such persons to have significant influence over the
outcome of any matters that require shareholder approval, including the
election of all of the Company's directors (subject, in certain instances, to
the requirement of the affirmative vote of a specified percentage of
disinterested shareholders), and thereby to potentially control the affairs
of the Company. In addition, pursuant to the Stock Purchase Agreement, dated
as of May 11, 1994, by and among the Company, IMR Investments, Accent
Software Partnership, Pal-Ron Marketing, Ltd., KZ Overseas Holding Corp.,
Robert Rosenschein and Jeffrey Rosenschein, the Company agreed that IMR
Investments will be entitled to designate one person to serve on the Board of
Directors of the Company. The current designee of IMR Investments is Roger
Cloutier. Although the director designated by IMR Investments is required
under Israeli law to vote in a manner consistent with his fiduciary duty to
the Company, there can be no assurance that conflicts of interest will not
arise with respect to the foregoing or that such conflicts will be resolved
in a manner favorable to the Company.
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SUBSTANTIAL DILUTION
The book value of the Company's Ordinary Shares was approximately $(0.15)
per share at June 30, 1997. Therefore, purchasers of Shares in this Offering
will experience immediate and substantial dilution.
NO DIVIDENDS
The Company has never paid cash dividends on its Ordinary Shares. Payment
of dividends on the Ordinary Shares is within the discretion of the Board of
Directors of the Company and will depend upon the Company's earnings, its
capital requirements and financial condition and other relevant factors. It
is the Company's intention to retain earnings, if any, to finance the
operation and expansion of its business and, therefore, it does not expect to
pay any cash dividends on its Ordinary Shares in the foreseeable future.
SIGNIFICANT OUTSTANDING TRADE PAYABLES
At June 30, 1997, the Company owed approximately $3.3 million to various
trade and other creditors of which approximately 50% was more than 60 days
past due. The inability to obtain credit on commercially reasonable terms, or
at all, resulting in an interruption of supplies or services, would have a
material adverse effect on the Company's operations.
MARKET PRICE VOLATILITY
The market price of the Company's Ordinary Shares has been highly
volatile and in the past 52 weeks the daily closing price has ranged from
$15.38 to $1.47. Factors such as the Company's financial results,
introduction of new products by the Company or its competitors, factors
affecting the software industry generally and factors relating to conditions
in the State of Israel may have a significant impact on the market price of
the Company's Ordinary Shares. Additionally, in recent years, the United
States stock markets have experienced a high level of price and volume
volatility and market prices for the stock of many companies (particularly of
small and emerging growth companies, the common stock of which trades in the
over-the-counter-market) have experienced wide price fluctuations that have
not necessarily been related to the operating performance of such companies.
POSSIBLE DELISTING OF SHARES FROM THE NASDAQ SMALL CAP MARKET;
RISKS RELATING TO PENNY STOCKS
The Ordinary Shares are quoted on the Nasdaq Small Cap Market. In order
to maintain its listing on the Nasdaq Small Cap Market, the Company must meet
certain requirements. As of June 30, 1997, the Company was in compliance
with all of the Nasdaq listing requirements except that the Company's total
capital and surplus was less than the required level. Specifically, on June
30, 1997, the Company's total capital and surplus of $(1,716,000) was below
the minimum Nasdaq requirement of $1,000,000. On August 15, 1997, the
Company was notified by The Nasdaq Stock Market, Inc. that it was no longer
in compliance with all of the Nasdaq Small Cap Market listing requirements.
The Company has responded to Nasdaq with a plan for restoring its capital and
surplus to the required level. On September 15, 1997, the Company received a
letter from Nasdaq stating that the Company's plan to restore its capital
surplus to the required level was not acceptable and that the Company's
Ordinary Shares would be delisted. The Company requested and was granted a
hearing regarding Nasdaq's decision to delist the Company's
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<PAGE>
Ordinary Shares. The hearing was held on October 9, 1997, and the Company is
currently awaiting the decision of the hearing panel. Any action to delist
the Company's shares has been stayed pending the issuance of the hearing
panel's decision. There can be no assurance that Nasdaq will agree that the
Company's plan, presented at the October 9, 1997 hearing, is adequate and,
therefore, the Company's shares may be delisted from the Nasdaq Small Cap
Market.
In addition, the Nasdaq Stock Market adopted increases in the
quantitative standards for maintenance of listings on the Nasdaq Small Cap
Market. The new standards for continued listing on the Nasdaq Small Cap
Market, which the Company anticipates will be implemented in February 1998,
include maintenance of any of (a) $2,000,000 of net tangible assets, (b)
$35,000,000 of market capitalization or (c) $500,000 of net income for two of
the last three years and the elimination of the requirements to maintain
minimum total assets and a minimum capital and surplus. There can be no
assurance that the Company will be able to meet the new standards for
maintaining its listing on the Nasdaq Small Cap Market and, if it fails to
meet such standards, that it will not be delisted.
If the Company's securities were to become delisted from trading on The
Nasdaq Small Cap Market and the trading price of such securities were to
remain below $5.00 per share or per unit, trading in such securities would
also be subject to the requirements of certain rules promulgated under the
Exchange Act, which require additional disclosure by broker-dealers in
connection with any trades involving a stock defined as a penny stock
(generally, any non-Nasdaq equity security that has a market price of less
than $5.00 per share, subject to certain exceptions). Such rules require the
delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated therewith, and
impose various sales practice requirements on broker-dealers who sell penny
stock to persons other than established customers and accredited investors
(generally institutions). For these types of transactions, the broker-dealer
must make a special suitability determination for the purchase and have
received the purchaser's written consent to the transaction prior to sale.
The additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in the Ordinary Shares
which could severely limit the market liquidity of the Ordinary Shares and
the ability of Selling Shareholders to sell their Shares in the secondary
market.
SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS
As of the date of this Prospectus, 12,308,442 Ordinary Shares are issued
and outstanding, or are to be issued under a binding agreement, of which
8,436,535 are freely tradable. There are 3,871,907 Ordinary Shares eligible
for sale, without registration, under Rule 144 subject to certain volume
limitations and other conditions prescribed by such rule and to the
contractual restrictions described below. As soon as this Registration
Statement is declared effective by the Commission, 312,000 of the IRSI Shares
will be freely tradable. There are 300,000 additional IRSI Shares that are to
be registered within twelve months of their issuance, and will be freely
tradable upon an effective Registration Statement. There are warrants
outstanding for the purchase of 3,947,413 Ordinary Shares. Most of the
shares underlying these warrants have been or are being registered and will
be freely tradable. In addition, there are options outstanding for 1,518,583
shares, of which 1,168,583 will be freely tradable upon exercise. Finally,
the shares into which the August 5, 1997 Debenture issued to CC Investments,
LDC, may be converted have been registered and will be freely tradable at
such time as that debenture is converted.
In addition, the Company has granted to certain of its security holders,
including certain of its executive officers, directors and IMR Investments,
certain registration rights. No prediction can be made as
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to the effect, if any, that sales of such securities or the availability of
such securities for sale will have on the market prices prevailing from time
to time.
LOCATION IN ISRAEL
The Company is incorporated under the laws of, and has its offices and a
significant portion of its operations (including all of its product
development activities) in, the State of Israel. Although most of the
Company's sales are currently made to customers outside Israel, the Company
is, nonetheless, directly influenced by the political, economic and security
conditions affecting Israel. Any major hostilities involving Israel, the
interruption or curtailment of trade between Israel and its trading partners
or a significant downturn in the economic or financial condition of Israel
could have a material adverse effect on the Company's business, financial
condition or results of operations. There can be no assurance that ongoing or
revived hostilities or other factors related to the political or economic
status of Israel will not have an adverse impact on the Company's business,
operating results or financial condition.
SERVICE OF PROCESS AND ENFORCEMENT OF JUDGMENTS
Service of process upon directors and officers of the Company and the
Israeli experts named herein, many of whom reside outside the United States,
may be difficult to effect within the United States. Furthermore, since the
majority of the Company's assets are located outside the United States, any
judgment obtained in the United States against the Company may not be
enforceable within the United States. The Company has been informed by its
legal counsel in Israel, Yigal Arnon & Co., that in such counsel's opinion
there is doubt as to the enforceability of civil liabilities under the
Securities Act and the Exchange Act, in original actions instituted in
Israel. However, subject to certain time limitations, Israeli courts are
empowered to enforce foreign (including United States) final executory
judgments for liquidated amounts in civil matters obtained after due trial
before a court of competent jurisdiction (according to the rules of private
international law currently prevailing in Israel) which enforces similar
Israeli judgments. The enforcement of such judgments is conditioned upon: (i)
adequate service of process having been effected and the defendant having had
a reasonable opportunity to be heard; (ii) such judgments or the enforcement
thereof not being contrary to the law, public policy, security or sovereignty
of the State of Israel; (iii) such judgments not being obtained by fraud and
not conflicting with any other valid judgment in the same matter between the
same parties; and (iv) an action between the same parties in the same matter
not pending in any Israeli court at the time the lawsuit is instituted in the
foreign court. The Company has irrevocably appointed Accent Worldwide as the
Company's agent to receive service of process in any action against the
Company in any federal or state court sitting in New York County, State of
New York arising out of the Offering or any purchase or sale of securities in
connection therewith.
Foreign judgments enforced by Israeli courts generally will be payable in
Israeli currency, and a special permit of the Israeli Controller of Foreign
Currency will be required to convert the Israeli currency into dollars and to
transfer such dollars out of Israel. The usual practice in an action to
recover an amount in a non-Israeli currency is for the Israeli court to
render judgment for the equivalent in Israeli currency at the rate of
exchange in force on the date thereof. Under existing law, a foreign judgment
payable in foreign currency may be paid in Israeli currency at the rate of
exchange on the date of payment, but the judgment debtor may also make
payment in foreign currency if the Israeli exchange control regulations then
in effect permit such foreign currency payment. Pending collection, the
amount of the judgment of an Israeli court stated in Israeli currency will
ordinarily be linked to the Israeli CPI plus interest at the annual rate (set
by Israeli regulations) prevailing at such time. Judgment creditors must bear
the risk that they will be unable to
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convert their award into foreign currency that can be transferred out of
Israel. All judgment creditors must bear the risk of unfavorable exchange
rates.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All proceeds from the sale of the Shares will be for the account of
the Selling Shareholders, as described below. The Company will use the
proceeds of any warrant exercise for general corporate purposes and working
capital. See "Selling Shareholders" and "Plan of Distribution" described
below.
SELLING SHAREHOLDERS
The following table sets forth the names of the Selling Shareholders and
the number of Ordinary Shares beneficially owned by such Selling Shareholders
as of September 5, 1997 (assuming all warrants are exercised) and offered
hereby. None of the Selling Shareholders has held any position, office or
other material relationship with the Company or any of its affiliates within
the past three years, other than as a result of its ownership of the shares
or warrants. The Shares may be offered from time to time by the Selling
Shareholders named below. However, the Selling Shareholders are under no
obligation to sell all or any portion of the Shares under this Prospectus or
otherwise. Because the Selling Shareholders may sell all or part of their
Shares, no estimate can be given as the number of Shares that will be held by
any Selling Shareholder upon termination of any offering made hereby.
<TABLE>
SHARES BENEFICIALLY OWNED
NUMBER OF SHARES AFTER OFFERING
BENEFICIALLY OWNED --------------------------
PRIOR TO THE OFFERING PERCENT
NAME OF SELLING SHAREHOLDER AND OFFERED HEREBY NUMBER OUTSTANDING
- --------------------------- --------------------- ------ -----------
<S> <C> <C> <C>
The Shemano Group
601 California Street, Suite 850
San Francisco, CA 94108 270,000 0 0%
Equity Management Partners
3340 Peachtree Road, Suite 620
Atlanta, GA 30326 30,000 0 0%
Investor Resource Services, Inc.
490 Causeway
New Smyrna Beach, FL 32169 612,000 300,000 0.02%
Brad Gillingham
201 Harrison Street, Suite 204
San Francisco, CA 94105 100,000 0 0%
</TABLE>
-18-
<PAGE>
<TABLE>
<S> <C> <C> <C>
Robert J. Laikin
c/o Brightpoint, Inc.
6402 Corporate Drive
Indianapolis, IN 46278 45,000 0 0%
Michael Mosher
c/o Brightpoint, Inc.
6402 Corporate Drive
Indianapolis, IN 46278 10,000 0 0%
Manufacturers Indemnity Insurance
Company of America
5775 Flatiron Parkway, Suite 205
Boulder, CO 80301 45,000 0 0%
</TABLE>
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be offered and sold from time
to time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The Selling Shareholders may sell the Shares
being offered hereby on the Nasdaq Small Cap Market, or otherwise, at prices
and under terms then prevailing or at prices related to the then current
market price or at negotiated prices. The Shares may be sold by on or more of
the following means of distribution: (a) a block or cross trade in which the
broker, dealer or agent so engaged will attempt to sell Shares as agent, but
may position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker, dealer or agent as principal and
resale by such broker, dealer or agent for its own account pursuant to this
Prospectus; (c) an over-the-counter distribution in accordance with the rules
of the Nasdaq Small Cap Market; (d) ordinary brokerage transactions (which
may include long and short sales) and transactions in which the broker
solicits purchasers; (e) in privately negotiated transactions; (f) "at the
market" to or through market makers or into an existing market for the
Ordinary Shares; (g) in other ways not involving market makers or into an
existing market for the Ordinary Shares; (h) through transactions in options,
swaps or other derivatives (whether listed or not); or (i) any combination of
the foregoing or other legally available means. To the extent required, this
Prospectus may be amended and supplemented from time to time to describe a
specific plan of distribution. In connection with distributions of the
Shares or otherwise, the Selling Shareholders may enter into hedging
transactions with broker-dealers or other financial institutions. In
connection with such transactions, broker-dealers or other financial
institutions may engage in short sales of the Company's Ordinary Shares in
the course of hedging the positions they assume with Selling Stockholders.
The Selling Stockholders may also sell the Company's Ordinary Shares short
and redeliver the shares to close out such short positions. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of Shares offered hereby,
which Shares such broker-dealer or other financial institution may resell
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). The Selling Stockholders may also pledge Shares to a
broker-dealer or other financial institution, and, upon a default, such
broker-dealer or other financial institution may effect sales of the pledged
Shares pursuant to this Prospectus (as supplemented or amended to reflect
such transaction). In addition, any Shares that qualify for sale pursuant to
Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus.
-19-
<PAGE>
In effecting sales, brokers, dealers or agents engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate.
Brokers, dealers or agents may receive commissions, discounts or concessions
from the Selling Shareholders in amounts to be negotiated prior to the sale.
Such brokers or dealers and any other participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Act in connection with
such sales, and any such commissions, discounts or concessions may be deemed
to be underwriting discounts or commissions under the Act. The Company will
pay all expenses incident to the registration of the Shares with the SEC.
In order to comply with the securities laws of certain states, if
applicable, the Shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states
the Shares may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with. The Company has
agreed to use its best efforts to register and qualify the Shares under such
other securities or "blue sky" laws of such jurisdictions in the Unites
States as each Selling Shareholder reasonably requests.
There can be no assurance that the Selling Shareholders will sell all or
any of the Shares.
The Company has agreed to indemnify IRSI and its agents and employees
against any losses, claims, damages or liabilities, joint or several, to
which IRSI or any such other person may become subject insofar as such
losses, claims, damages or liabilities (or actions, suits or proceedings in
respect thereof) arise out of or are based on any untrue statement or alleged
untrue statement of any material fact in this Registration Statement, any
preliminary prospectus, a final prospectus, or any amendment or supplement
thereto; or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading; and will reimburse IRSI or any
such other person for any legal or other expenses reasonably incurred by IRSI
or any such other person in connection with investigating or defending any
such loss, claim, damage, liability, or action, suit or proceeding; provide,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement, or omission or alleged
omission, from this Registration Statement, any preliminary prospectus, final
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished the Company by IRSI
specifically for use in the preparation thereof. None of the other agreements
between the Company and the Placement Agents, Gillingham or the Laikin
Consultants contain any indemnification language.
LEGAL MATTERS
The validity of the securities offered hereby and certain legal matters
in connection with the Offering with respect to Israeli law will be passed
upon for the Company by Yigal Arnon & Co., Tel Aviv, Israel. Certain legal
matters in connection with the Offering with respect to United States law
will be passed upon for the Company by Rothgerber, Appel, Powers & Johnson
LLP, Denver, Colorado.
EXPERTS
The audited consolidated financial statements referred to in this
Prospectus and/or included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996, have been audited by
-20-
<PAGE>
Luboshitz, Kasierer & Co., a Member Firm of Andersen Worldwide, SC,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm
as experts in giving said reports. Reference is made to said reports, which
include an explanatory fourth paragraph with respect to the Company's ability
to continue as a going concern.
Statements concerning Israeli law included in this Prospectus or in any
document incorporated by reference herein have been examined by Yigal Arnon &
Co., and have been included upon the authority of such counsel as an expert
in the laws of the State of Israel.
-21-
<PAGE>
No dealer, salesperson or any other individual has been authorized to
give any information or make any representations not contained in this
Prospectus in connection with the Offering covered by this Prospectus. If
given or made, such information or representations must not be relied upon as
having been authorized by the Company, any Selling Shareholder or any other
person. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the Shares in any jurisdiction where, or to
any person to whom, it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that there has not been any
change in the facts set forth in this Prospectus or in the affairs of the
Company since the date hereof or that the information contained herein is
correct as of any time subsequent to the date hereof.
-----------
TABLE OF CONTENTS
Page
----
Available Information 2
Forward Looking Statements 3
Incorporation of Certain Documents by
Reference 3
The Company 4
Recent Developments 5
Risk Factors 7
Use of Proceeds 17
Selling Shareholders 17
Plan of Distribution 18
Legal Matters 20
Experts 20
812,000 ORDINARY SHARES
Accent Software
International Ltd.
-----------
PROSPECTUS
-----------
OCTOBER 15, 1997
-22-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the issuance and distribution of the
securities registered under this Registration Statement are estimated to be
as follows:
Securities and Exchange Commission Registration Fee $ 716
Israeli Taxes 100
The Nasdaq Stock Market Filing Fee 7,500
Printing and Engraving Expenses 1,500
Legal Fees and Expenses 5,000
-------
Total $14,816
-------
-------
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Association of the Company provide that, to the fullest
extent permitted by the Israeli Companies' Ordinance (New Version), 1983, as
amended (the "Companies Ordinance"), the Company may indemnify its directors
and officers for (i) any financial liability imposed upon them for the
benefit of a third party by a judgment, including a settlement or arbitration
decision certified by a court, as a result of an act or omission of such
person in his capacity as a director or officer of the Company; and (ii)
reasonable litigation expenses, including legal fees, incurred by such
director or officer or which he is obligated to pay by a court order, in a
proceeding brought against him by or on behalf of the Company or by others,
or in connection with a criminal proceeding in which he was acquitted, in
each case relating to acts or omissions of such person in his capacity as a
director or officer of the Company ("Indemnifiable Event").
The Company's Articles of Association provide that, to the fullest extent
permitted by the Companies Ordinance, the Company may procure directors' and
officers' liability insurance for (i) breach of the duty of care by any
director or officer owed to the Company or to any other person; (ii) breach
of fiduciary duty by any officer or director owed to the Company, provided
such person acted in good faith and had reasonable cause to assume that the
action would not prejudice the interests of the Company; and (iii) any
financial liability imposed upon any director or officer for the benefit of a
third party by reason of an act or omission of such person in his capacity as
a director or officer of the Company. The Company has a directors' and
officers' liability insurance policy that insures the Company's officers and
directors against certain liabilities.
Under the Companies Ordinance, the Company may not indemnify or procure
insurance coverage for the liability of its Office Holders (as defined in the
Companies Ordinance) in respect of any monetary obligation imposed by reason
of (i) an act or omission which constitutes a breach of fiduciary duty,
except to the extent described above; (ii) a willful breach of the duty of
care or reckless disregard of the
II-1
<PAGE>
circumstances or consequences of such breach; (iii) an act or omission done
with the intent to unlawfully realize personal gain; or (iv) a fine or
penalty imposed for a criminal offense.
The Companies Ordinance defines an "Office Holder" to include a director,
general manager, chief executive officer, executive vice president, vice
president, other managers directly subordinate to the general manager, and
any person assuming the responsibilities of the foregoing positions without
regard to such person's title.
In addition, pursuant to the Companies Ordinance, indemnification of, and
procurement of insurance coverage for, an Office Holder of the Company is
permitted if it is approved by the Company's Audit Committee and Board of
Directors. In certain circumstances, the Companies Ordinance also requires
approval of such indemnification and insurance by the Company's shareholders.
ITEM 16. EXHIBITS
4.1 -- Agreement between the Company and Investor Resource Services, Inc.
4.2 -- Warrant Agreement with The Shemano Group, Inc.
4.3 -- Warrant Agreement with Equity Management Partners LLP
4.4 -- Warrant Agreement with Brad Gillingham
4.5 -- Form of Warrant Agreement covering warrant agreements with Robert J.
Laikin, Michael Mosher and Manufacturers Indemnity and Insurance
Company of America
5.1 -- Opinion of Yigal Arnon & Co.
23.1 -- Consent of Luboshitz, Kasierer & Co., a Member Firm of Andersen
Worldwide, SC.
23.2 -- Consent of Yigal Arnon & Co., contained in their opinion filed as
Exhibit 5.1.
23.3 -- Consent of Rothgerber, Appel, Powers & Johnson LLP.
24.1 -- Power of Attorney (included on page II-4 to II-5).
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, with
II-2
<PAGE>
changes in volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and (iii) To include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof;
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering; and
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Colorado Springs, State of
Colorado, on this 8 of September 1997.
ACCENT SOFTWARE INTERNATIONAL LTD.
By: /s/ Robert J. Behr
----------------------------------------------
Name: Robert J. Behr
Title: Chief Financial Officer
(Principal Financial and Accounting Officer)
II-3
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Todd
A. Oseth, Robert J. Behr and Robert Trachtenberg and each of them, as
attorneys-in-fact, each with the power of substitution, for him in any and
all capacities, to sign any amendment to this Registration Statement and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting to said
attorney-in-fact, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact, or any one of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated:
<TABLE>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Todd A. Oseth President, Chief Executive Officer and Director October 15, 1997
- ---------------------- (principal executive officer)
Todd A. Oseth
/s/ Robert J. Behr Chief Financial Officer (principal financial October 15, 1997
- ---------------------- and accounting officer)
Robert J. Behr
/s/ Robert Rosenschein Chief Technology Officer, Languages, and October 15, 1997
- ---------------------- Co-Chairman of the Board of Directors
Robert Rosenschein
/s/ Roger Cloutier Co-Chairman of the Board of Directors October 15, 1997
- ----------------------
Roger Cloutier
/s/ Elliott B. Broidy Director October 15, 1997
- ----------------------
Elliott B. Broidy
/s/ Jeffrey Rosenschein Chief Technology Officer, Intelligent Agents, October 15, 1997
- ---------------------- and Director
Jeffrey Rosenschein
/s/ Meldon E. Levine Director October 15, 1997
- ----------------------
Meldon E. Levine
/s/ Mark A. Tebbe Director October 15, 1997
- ----------------------
Mark A. Tebbe
/s/ Esther Dyson Director October 15, 1997
- ----------------------
Esther Dyson
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
Authorized Representative in the United States:
ACCENT WORLDWIDE, INC.
/s/ Todd A. Oseth October 15, 1997
- ----------------------
Todd A. Oseth
By: /s/ Robert J. Behr October 15, 1997
----------------------
Robert J. Behr
Attorney-in-fact
</TABLE>
EXHIBIT INDEX
4.1 -- Agreement between the Company and Investor Resource Services, Inc.
4.2 -- Warrant Agreement with The Shemano Group, Inc.
4.3 -- Warrant Agreement with Equity Management Partners LLP
4.4 -- Warrant Agreement with Brad Gillingham
4.5 -- Form of Warrant Agreement covering warrant agreements with Robert J.
Laikin, Michael Mosher and Manufacturers Indemnity and Insurance
Company of America
5.1 -- Opinion of Yigal Arnon & Co.
23.1 -- Consent of Luboshitz, Kasierer & Co., a Member Firm of Andersen
Worldwide, SC.
23.2 -- Consent of Yigal Arnon & Co., contained in their opinion filed as
Exhibit 5.1.
23.3 -- Consent of Rothgerber, Appel, Powers & Johnson LLP.
24.1 -- Power of Attorney (included on pages II-4 to II-6).
II-5
<PAGE>
CONSULTING AGREEMENT
THIS AGREEMENT is between Accent Software International, Ltd. (hereinafter
referred to as the "Company"), and Investor Resource Services, Inc. (hereinafter
referred to as the "Consultant").
WHEREAS, the Company is a publicly held company; and
WHEREAS, the Consultant is in the business of assisting public companies in
financial advisory, strategic business planning, and investor and public
relations services designed to make the investing public knowledgeable about the
benefits of stock ownership in the Company; and
WHEREAS, the Consultant may, during the period of time covered by this
contract, present to the Company one or more plans of public and investor
relations to utilize other business entities to achieve the Company's goals of
making the investing public knowledgeable about the benefits of stock ownership
in the Company; and
WHEREAS, the Company recognizes that the Consultant is not in the business
of stock brokerage, investment advice, activities which require registration
under either the Securities Act of 1933 or the Securities Act of 1934,
underwriting, banking, is not an insurance company nor does it offer services to
the Company which may require regulation under federal or state securities laws;
and
WHEREAS, although the Consultant may recommend to the Company the use of
certain licensed professionals and business entities with particular skills with
which the Consultant has had a successful relationship in the past, the Company
will use its independent judgment in employing such firms; and
WHEREAS, the parties agree, after having a complete understanding of the
services desired and the services to be provided, that the Company desires to
retain Consultant to provide such assistance through its services for the
Company, and the Consultant is willing to provide such services to the Company;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. DUTIES AND INVOLVEMENT.
The Company hereby engages Consultant to provide a plan and for
coordination in executing the agreed-upon plan for using various investor and
public relations services as agreed by both parties. The plan may include, but
not by way of limitation, the following services: consulting with the Company's
management concerning marketing surveys, investor accreditation, availability to
expand investor base, investor support, strategic business planning, broker
relations, conducting due diligence meetings, exhibitions and presentations at
conventions and trade shows, assistance in the preparation and dissemination of
press releases and
<PAGE>
stockholder communications, consulting of mergers, review and assistance in
updating a business plan, review and advise on the capital structure for the
company, review and assistance in updating a business plan, review and advise
on the capital structure for the company, assist in the development of an
acquisition profile and structure, recommend financing alternatives and
sources, and consult on corporate finance and/or investment banking issues.
In addition, these services may include production of a corporate profile and
fact sheets, printed media advertising designs, newsletter production, broker
solicitation campaigns and press releases. the preliminary services the plan
anticipates including are attached as Exhibit "A."
2. RELATIONSHIP BETWEEN THE PARTIES.
Consultant acknowledges that it is not an officer, director or agent of the
Company, it is not and will not be responsible for any management decisions on
behalf of the Company, and may not commit the Company to any action. The
Company represents that the Consultant does not have, through stock ownership or
otherwise, the power to control the Company, nor to exercise any dominating
influence over its management.
Consultant understands and acknowledges that this Agreement shall not
create or imply any agency relationship between the parties, and Consultant will
not commit Company in any manner except when a commitment has been specifically
authorized in writing by the Company.
The Company and Consultant agree that the relationship between the parties
shall be that of independent contractor.
3. TERM AND TERMINATION.
This Agreement shall continue until twelve (12) months from date of
execution.
In the event this Agreement is terminated for any reason whatsoever, the
shares referred to herein shall remain in full force and effect. Consultant
shall have the right of retention of said shares in consideration for services
performed.
4. COMPENSATION AND PAYMENT OF EXPENSES.
The Company agrees to pay the Consultant a total and complete consideration
for its services the total sum of Six Hundred Twelve Thousand (612,000) shares
of stock. Three Hundred Twelve Thousand (312,000) shares of free trading stock
will be delivered within thirty (30) days of execution of the Agreement, and
Three Hundred Thousand (300,000) shares of 144 stock will be delivered at the
same time. The 144 shares will be registered within twelve (12) months of
delivery.
In the event this Agreement is terminated for any reason whatsoever, the
securities or options referred to herein shall remain in full force and effect
and with respect to any shares
2
<PAGE>
which are issued or are issuable thereunder, Consultant shall have the right
of retention of said shares of common stock or options in consideration for
services performed.
5. SERVICES NOT EXCLUSIVE.
The Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities, and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
6. CONFIDENTIALITY.
Consultant acknowledges that it may have access to confidential information
regarding the Company and its business. Consultant agrees that it will not,
during or subsequent to the term of this Agreement, divulge, furnish, or make
accessible to any person (other than with the written permission of the Company)
any knowledge or information or plans of the Company with respect to the Company
or its business, including, but not limited to, the products of the Company,
whether in the concept or development stage, or being marketed, by the Company
on the effective date of this Agreement or during the term hereof.
7. COVENANT NOT TO COMPETE.
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not directly participate in the information developed for
and by the Company, and will not compete directly with the Company in the
Company's primary industry or related fields.
8. INVESTMENT REPRESENTATION.
(a) Access to Information.
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K and any subsequent filing required or filed under the
rules and regulations promulgated under the Securities Act of 1933, as amended
(the "Act"), or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), if any, (the "Disclosure Documents"). Consultant acknowledges that the
acquisition of securities to be issued to Consultant involves a high degree of
risk. Consultant represents that it and its advisors have been afforded the
opportunity to discuss the Company with its management. The Company represents
that it has and will continue to provide Consultant with any information or
documentation necessary to verify the accuracy of the information contained in
the Disclosure Documents, and will promptly notify Consultant upon the filing of
any registration statement or other periodic reporting documents filed pursuant
to the Act or the Exchange Act. Any
3
<PAGE>
additional ale or registration and filings with the NASD and SEC will be made
available to Consultant at such time by notifying in writing, at least thirty
(30) days prior to any registration or sale.
(b) Registration of Securities.
(i) Consultant understands and acknowledges that the Shares of
common stock are being acquired by Consultant for its own account and not on
behalf of any other person and is being acquired for investment purposes and not
for distribution. Consultant represents that an investment in the common stock
is a suitable investment for Consultant, taking into consideration the
restrictions on transferability affecting the common stock.
(ii) The Company agrees to file a Registration Statement on
Form S-3 with piggyback registration rights to register these Shares upon the
earlier of thirty (30) days from the date hereof or as soon as practicable after
the date of the mutual execution of the Agreement.
(iii) The Company will undertake to comply with the various
state securities laws with respect to the registration of the Shares referred to
herein. The Company undertakes to make available for review and common, on a
timely basis and prior to submission with any regulatory agency, copies of the
Registration Statement.
(iv) The Company hereby acknowledges that time is of the essence
in respect to the registration of the Shares and agrees that in the event the
Shares are not registered and qualified for public sale pursuant to an effective
registration statement within ninety (90) days from the date of this Agreement
("Penalty Date"), the Company shall agree to issue an additional number of
Shares equal to ten percent (10%) of the total number to the Consultant pursuant
to the terms of Paragraph 3(a) herein for such additional thirty (30) day delay
in providing in effective registration statement pursuant to which the Shares
may be sold. In the event of a delay less than a full thirty (30) day period,
the Consultant shall be entitled to a pro rata allocation of additional Shares.
Penalty shares, if not registered upon delivery, would come with demand
registration and piggyback registration rights.
(v) In the event that 144 shares are issued in lieu of payment
for compensation, then the Company agrees to provide an opinion letter of
counsel removing any restrictions or legend within five (5) days of demand by
Consultant after the time period for 144 stock has expired. In the event that
such legend is not lifted, as provided above, then the penalty provided above
shall apply.
9. ASSIGNMENT.
This Agreement may not be assigned by either party hereto without the
written consent of the other, but shall be binding upon the successors of the
parties.
4
<PAGE>
10. ARBITRATION.
If dispute arises out of or relates to this Agreement, or the breach
thereof, and if said dispute cannot be settled through direct discussion, the
parties agree to first endeavor to settle the dispute in an amicable manner by
mediation under the Commercial Mediation Rules of the American Arbitration
Association before resorting to arbitration. Thereafter, any unresolved
controversy or claim arising out of or relating to this Agreement or a breach
thereof shall be settled by arbitration in accordance with the Rules of the
American Arbitration Association, and judgment upon the award rendered by the
Arbitrator may be entered in any court having jurisdiction thereof. Any
provisional remedy which would be available from a court of law shall be
available to the parties to this Agreement from the Arbitrator pending
arbitration.
The situs of the arbitration shall be Orange County, Florida.
11. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Consultant
and its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto; or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; and will reimburse the Consultant or any such other
person for any legal or other expenses reasonably incurred by Consultant or any
such other person in connection with investigating or defending any such loss,
claim, damage, liability, or action, suit or proceeding; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission, from the
Registration Statement, any preliminary prospectus, the prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by the Consultant specifically for use in
the preparation thereof. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notified an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel
5
<PAGE>
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
12. NOTICES.
All notices required or permitted to be given under this Agreement shall be
given in writing and shall be delivered, either personally or by express
delivery service, to the party to be notified. Notice to each party shall be
addressed to the deemed to have been duly given upon delivery, personally or by
courier (such as Federal Express or similar express delivery service) addressed
to the attention of the officer at the address set forth beneath the signature
line below, or to such other officer or addressee as either party may designate,
upon at least ten (10) days' notice, to the other party.
13. GOVERNING LAW.
This Agreement shall be construed by and enforced in accordance with the
laws of the State of Florida.
14. REPRESENTATIONS.
Consultant and his employees represent that they are not acting as either a
broker or brokerage firm, nor are they affiliated or registered with any
securities agency and are acting merely as a consultant or investor.
(a) Company states and represents there are and will be no S-8
registrations without prior approval from Consultant during the term of this
Agreement.
(b) Company states and represents that it will not do any reg-S
placements without prior written approval from Consultant during the term of
this Agreement.
(c) Company states and agrees that there will be no additional
issuance of securities, options or warrants of any kind without prior written
approval.
Any violation of the above representations of 14(a), 14(b) and/or 14(c)
will result in a penalty of ten percent (10%) of the total amount of Shares owed
in this Agreement being paid in additional Shares to Consultant per month until
the expiration of this Agreement. Shares would be calculated as provided in
Paragraph 8(b)(iii) and registered as provided therein.
6
<PAGE>
15. ENTIRE AGREEMENT.
This Agreement contains the entire understanding and agreement between the
parties. There are no other agreements, conditions or representations, oral or
written, express or implied, with regard thereto. This Agreement may be amended
only in writing signed by both parties.
16. NON-WAIVER.
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
17. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.
18. BINDING EFFECT.
The provisions of this Agreement shall be binding upon the parties, their
successors and assigns.
19. SEVERABILITY.
If any provisions of this Agreement, except Paragraphs 1 and 3, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal, or unenforceable to any extent, the remainder of this
Agreement shall not be affected and the application of such affected provision
shall be enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first above written.
COMPANY: CONSULTANT:
ACCENT SOFTWARE INVESTOR RESOURCES SERVICES, INC.
INTERNATIONAL, LTD
/s/ Todd Osseth /s/ Daniel D. Starczewski
- ---------------------------------- --------------------------------------
7
<PAGE>
EXHIBIT A
CORPORATE PROFILE AND FACT SHEET
A two-page, two-color broker fact sheet and a four-page, full-color Company
profile will be created, each highlighting the Company and the benefits of
owning the Company's stock. These pieces are included in broker/dealer
information packages for dissemination to prospective investors, and may also be
targeted to stock analysis and newsletter editors. Consultant's services
include creative writing, artwork, layout and design and printing. Materials
updated four times per year, as applicable.
DIRECT MAIL CAMPAIGN
A four-page, full-color direct mail lead generation piece, highlighting the
Company and the benefits of owning the Company's stock, will be created. This
lead generator will be mailed to 100,000 selected, qualified investors, in one
large mailing or in smaller increments. Printed on heavy gloss stock, the piece
includes a postage-paid business reply card plus an identifying telephone number
enabling investors to respond immediately. Additionally, market makers names
and phone numbers may be listed directly on the mailing piece for call-in lead
generation. The piece includes a postage-paid business reply card, plus an
identifying telephone number enabling investors to respond immediately.
Consultant's services include creative writing, artwork, layout and design,
printing, list rentals, mail handling, postage and business-reply card
coordination.
BROKER SOLICITATION CAMPAIGN
Specialized professional financial public relations services will be
provided through an ongoing telemarketing campaign soliciting new broker
dealers, to generate interest in the Company and its stock. This campaign will
include direct personal telephone follow-up with retail brokers in active
contact with Company executives and investor relations staff. Supervised in-
house personnel will be assigned specifically to guide Company interactions with
brokers and field representatives.
PRESS RELEASES
Company press releases will be written and disseminated to newswire
services (cost: $850). Press releases will also be disseminated to the at-large
broker community by fax and mail, plus telephone and fax follow-up with 500-
1,000 active brokers (additional cost: $500). Press releases may be reproduced
in may include personal visits to newsletter editors and publishers, in order to
best expose Company benefits and to set up interviews with key Company officers.
CONFERENCES, SEMINARS AND NATIONAL TOURS
8
<PAGE>
Due Diligence Meetings: Opportunities for Company exposure before
broker/dealer audiences will be provided in New York, Boston, Chicago, Atlanta,
Orlando, Boca Raton, Denver, San Francisco, southern California and other major
metro areas. Consultant's services include overall meeting coordination and
implementation; room rental, catering (hot and cold hors d'oeuvres and snacks),
alcoholic and non-alcoholic beverages, broker/dealer invitations (printing, mail
coordination, postage and telephone contact), transportation (coach air fare and
hotel accommodations, as applicable), additional broker meetings and telephone
follow-up.
Investor Conferences: Opportunities for Company exposure before large
audiences of qualified, wealthy investors will be provided in various locations
across North America. These conferences provide executives of participating
companies with unique forums for sharing the spotlight with top financial and
investment experts while making personal contact with wealthy investors and
presenting the benefits of the companies. The most popular package for
conference participants includes an exhibit booth, private workshop, broker
presentation and distribution of collateral materials. Among the most popular
and established conferences are those produced by Investment Seminars Inc.,
Blanchard's Investment Conferences and Sound Money Investors Inc.
Institutional Conferences: Opportunities for Company exposure before
representatives of major financial institutions may be arranged for any of the
following conferences; North American Corporate Forum, Westergaard Waldorf
Conference Series, Boston Stockholders Club, Hartford Stockholders Club, Equitis
Conferences and Investment Research Institute. The conferences sponsored by the
North American Corporate Forum and Westergaard Waldorf Conference Series are
three-day events held in New York, designed to allow participating companies to
meet and consult with investment analysis and portfolio managers representing
all primary investment centers in the United States and Canada.
ELECTRONIC MEDIA
A coordinated mix of financial and investment radio and television
programming, covering major markets across the United States and designed to
serve as Company marketing and lead generation conduits will be arranged. The
Company may be featured on talk shows, special interview segments and
commercials. Program duplicates may be distributed to select brokers and
investors to heighten Company awareness.
INVESTMENT PUBLICATIONS
PERSONAL INVESTING NEWS is a glossy magazine distributed bi-monthly to
approximately 40,000 educated, affluent U.S. investors active in the emerging
growth company marketplace. A two-page interview with a key officer of the
Company, emphasizing the Company's merits and growth potential, will be created
for inclusion in PERSONAL INVESTING NEWS. An additional two-page advertorial
about the Company, with a similar emphasis on the Company's merits, will be
included in PERSONAL INVESTING NEWS and will feature the address and telephone
number of the Company and/or the address and telephone number for market makers
of the Company's stock. In addition, a photograph of the key Company officer
featured in the interview will appear on the
9
<PAGE>
front cover of PERSONAL INVESTING NEWS to draw attention to the Company's
story inside the magazine. Consultant's services include creative writing,
artwork, layout and design, printing and list rentals.
INTERNATIONAL MONEY & POLITICS is a glossy magazine distributed bi-monthly
to approximately 5,000 educated, affluent U.S. investors active in the emerging
growth company marketplace. The two-page PERSONAL INVESTING NEWS advertorial
will be reprinted for inclusion in INTERNATIONAL MONEY & POLITICS.
BULL & BEAR is a tabloid-style newspaper distributed six to nine times per
year to approximately 50,000 active investors in the United States and Canada.
The two-page PERSONAL INVESTING NEWS advertorial will be reprinted for inclusion
in BULL & BEAR.
PRINT MEDIA ADVERTISING
An advertisement, targeted to both brokers and investors, will be created
and inserted in major financial and investment magazines or newspapers.
Publications which target and deliver large numbers of active brokers, qualified
investors and other niche groups interested specifically in the Company's
product or industry category will be emphasized. Consultant's services include
creative writing, artwork, layout and design and coordination of
magazine/newspaper inserts.
NEWSLETTER CAMPAIGN
The Company will be presented to an extensive list of financial newsletter
editors and publishers whose publications specialize in charting and presenting
buy recommendation for qualified emerging growth companies.
PERSONAL CONSULTANT SERVICES
A Personal Consultant will supervise and actively assist in every facet of
the Company's overall marketing campaign. In addition to coordinating all
above-listed services, the Personal Consultant will maintain daily contact with
investor relations office staff, Company officers and active brokers; he will be
available for consultation 24 hours per day every day via cellular telephone to
address urgent needs as well as general strategic planning. The Personal
Consultant will travel extensively to meet qualified brokers one-on-one, and
will arrange specially-scheduled conference calls with audiences of brokers,
analysis and money managers. The Personal Consultant will personally arrange
invitation-only, due diligence broker meetings, and directly supervise all
logistics and follow-up. Cost: $10,000-$15,000 per month, as applicable.
10
<PAGE>
Void After 5:00 p.m., Warrant to Purchase 270,000
Eastern Standard Time Shares (Subject to Adjustment)
August 5, 2002
ACCENT SOFTWARE INTERNATIONAL LTD.
WARRANT TO PURCHASE ORDINARY SHARES
Accent Software International Ltd. (the "Company"), a corporation organized
and operating under the laws of the State of Israel, hereby certifies that,
for value received, THE SHEMANO GROUP, INC. (the "Holder") is entitled to
purchase from the Company at any time before 5:00 p.m., Eastern Standard
Time, on August 5, 2002, 270,000 shares of the Company's ordinary shares with
a nominal value of NIS .01, subject to the conditions of this Warrant and to
adjustment as hereinafter provided, at a price of $1.725 per share (the
"Warrant Price"), subject to adjustment as hereinafter provided. In the event
the aforesaid expiration date of the Warrant falls on a Saturday or Sunday,
or on a legal holiday on which the New York Stock Exchange, the American
Stock Exchange or the Nasdaq Stock Exchange is closed, then the Warrant shall
expire at 5:00 p.m. Eastern Standard Time on the next succeeding business day.
SECTION 1. VESTING SCHEDULE. This Warrant shall vest and be exercisable as of
November 5, 1997 (the "Vesting Date").
SECTION 2. METHOD OF EXERCISE. Subject to the foregoing, the Warrant may be
exercised by the Holder as to the whole or any part of the ordinary shares
covered hereby by surrender of the Warrant at the principal office of the
Company, with the Cash Purchase Form attached hereto duly executed and upon
payment to the Company of the Warrant Price for the ordinary shares to be
purchased in cash or by certified check or bank draft. Thereupon, this
Warrant shall be deemed to have been exercised and the person exercising the
same to have become a holder of record of ordinary shares purchased hereunder
for all purposes, and certificates for the appropriate number of fully paid
and non-assessable shares so purchased shall be delivered to the Purchaser
within a reasonable time thereafter. If the Warrant shall be exercised in
respect of a part only of the shares of ordinary shares covered hereby, the
Holder shall be entitled to receive a similar Warrant of like tenor and date
covering the number of ordinary shares in respect of which this Warrant shall
not have been exercised.
SECTION 3. TRANSFERS AND EXCHANGES. If permitted by the provisions of Section
10, the Company shall transfer, from time to time, any outstanding Warrant
upon the books to be maintained for that purpose, upon surrender thereof for
transfer properly endorsed or accompanied by a written assignment of such
Warrant substantially in the form attached hereto duly executed by the Holder
or his agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such a transfer. Upon any such transfer, a new
<PAGE>
Warrant shall be issued to the transferee and the surrendered Warrant shall
be canceled by the Company.
SECTION 4. REGISTRATION RIGHTS. This Warrant and the ordinary shares issuable
upon exercise hereof are not and, except as provided herein, will not be
registered under the Securities Act of 1933 (the "Act") or state securities
laws. The Holder, by acceptance hereof, and with reference to the Warrant
and the ordinary shares issuable upon exercise of the Warrant, represents and
warrants that:
(a) The Holder is acquiring such securities for the Holder's own account
for investment and not with the view to or in connection with any offering or
distribution, and the Holder has no present intention of selling or otherwise
disposing of such securities.
(b) The Holder is not acquiring such securities for resale or other
disposition upon the occurrence or nonoccurrence of some predetermined event
or circumstance such as, for example, after holding them for any specific
period to realize long-term capital gains, or upon any price rise, or upon
any price decline or for a fixed or determined period in the future.
(c) Notwithstanding anything to the contrary herein, the Holder will not
sell, assign or transfer for value this Warrant or the shares of ordinary
shares issuable upon exercise hereof except pursuant to registration under
the Act or receipt of an opinion of counsel satisfactory to the Company that
registration under the Act is not required, and the Company may place a
legend on this Warrant and on any certificates for such shares acknowledging
the foregoing restrictions.
Subject to the provisions of this Agreement, the Company will use its
reasonable business efforts to cause all the ordinary shares for which the
Holder requested the registration to be registered by the Vesting Date under
the Securities Act to the extent required to permit the disposition by the
Holder of such shares; provided that if such registration shall be in
connection with an underwritten public offering and if the managing
underwriter or underwriters shall advise the Company in writing that in their
opinion the amount of securities requested to be included in such
registration pursuant to this section and pursuant to any other rights
granted by the Company to holders of its securities to request inclusion of
any such securities in such registration exceeds the number of securities
which can be sold in the offering without materially adversely affecting the
offering price, the Company may first include in such registration all
securities the Company proposes to sell, and the Holder shall accept a
reduction (including a total elimination) in the number of shares to be
included in such registration. Nothing in this section shall limit the
Company's ability to withdraw a registration statement it has filed either
before or after effectiveness.
SECTION 5. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 4 to use reasonable business efforts to effect
the registration of any of
<PAGE>
the ordinary shares underlying this Warrant under the Securities Act, the
Company will as expeditiously as reasonably possible and at its expense:
(a) prepare and file with the SEC a registration statement with
respect to such shares and use reasonable business efforts to cause such
registration statement to become and remain effective for the period of
time required for the disposition of such shares as contemplated
thereby, not to exceed five years from the date of this Warrant (the
"Disposition Period");
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for the Disposition Period and as may be necessary to comply
with the provisions of the Securities Act with respect to the
disposition of all shares covered by such registration statement in
accordance with the method of disposition set forth in such registration
statement for such period;
(c) furnish to the Holder and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus and each document incorporated by
reference therein to the extent then required by the rules and
regulations of the SEC) as such persons may reasonably request in order
to facilitate the public sale or other disposition of the Shares covered
by such registration statement;
(d) use reasonable business efforts to register or qualify the
shares covered by such registration statement under the securities or
blue sky laws of such jurisdictions as the managing underwriter shall
reasonably request and to take all necessary action to keep such
registration or qualification effective as required by this section;
provided that the Company shall not be required to qualify to transact
business as a foreign corporation in any jurisdiction in which it would
not otherwise be required to be so qualified or to take any action which
would subject it to general service of process in any such jurisdictions
in which it is not then so subject;
(e) during the Disposition Period immediately notify in writing
the Holder and each underwriter of the happening of any event as result
of which the prospectus contained in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing (in which case, the Company shall promptly
prepare and file with the SEC and provide the Holder with revised or
supplemental prospectuses and if so requested by the Company in writing,
the Holder shall promptly take action to cease making any offers of the
shares until receipt and distribution of such revised supplemental
prospectuses).
<PAGE>
In connection with any registration hereunder, the Holder of this Warrant
shall furnish promptly to the Company in writing such information (together
with such supplements as may be necessary from time to time) with respect to
itself and the proposed disposition as shall be reasonably necessary in order
to ensure compliance with federal and applicable state securities laws.
SECTION 6. ADJUSTMENT OF WARRANT PRICE. The Warrant Price and the number of
ordinary shares subject to being purchased pursuant to this Warrant shall be
subject to adjustment from time to time as follows:
(a) In case, prior to the expiration of this Warrant by exercise or by
its terms, the Company shall issue any ordinary shares as a share dividend
or subdivide the number of outstanding ordinary shares into a greater
number of shares, then, in either of such cases, the purchase price per
share of the ordinary shares purchasable pursuant to this Warrant in effect
at the time of such action shall be proportionately reduced and the number
of shares at the time purchasable pursuant to this Warrant shall be
proportionately increased; and conversely, in the event the Company shall
contract the number of outstanding ordinary shares by combining such shares
into a smaller number of shares, then, in such case, the purchase price
per ordinary share purchasable pursuant to this Warrant in effect at the
time of such action shall be proportionately increased, and the number of
shares at that time purchasable pursuant to this Warrant shall be
proportionately decreased. If the Company, at any time during the life
of this Warrant, shall declare a dividend payable in cash on its ordinary
shares, and shall at substantially the same time offer to its shareholders
the right to purchase new ordinary shares from the proceeds of such
dividend or for an amount substantially equal to the dividend, all ordinary
shares so issued shall, for purposes of this Warrant, be deemed to have
been issued as a share dividend. Any dividends paid or distributed upon
ordinary shares in shares of any other class or securities convertible into
ordinary shares shall be treated as a dividend paid in ordinary shares to
the extent that ordinary shares are issuable upon the conversion thereof.
(b) In case, prior to the expiration of this Warrant by exercise or by its
terms, the Company shall be recapitalized by reclassifying its outstanding
ordinary shares into shares of a different par value, or the Company shall
merge into or consolidate with another corporation or shall sell all or
substantially all of its or any of its successor corporation's property
and assets to any other corporation or corporations (any such corporation
being included within the meaning of the term "successor corporation"),
the Holder shall thereafter have the right to purchase, upon the basis and
on the terms and conditions and during the time specified in this Warrant
in lieu of the ordinary shares of the Company theretofore purchasable upon
the exercise of this Warrant, such shares, securities, or assets as may
be issued or payable with respect to, or in
<PAGE>
exchange for, the ordinary shares of the Company theretofore purchasable
upon the exercise of this Warrant had such recapitalization, consolidation,
merger, or conveyance not taken place; and in any such event, the rights
of the Holder to an adjustment in the number of ordinary shares purchased
upon the exercise of this Warrant as herein provided shall continue and be
preserved in respect of any shares, securities, or assets which the Holder
becomes entitled to purchase.
(c) If the Company shall set a record date with respect to its ordinary
shares or shall propose to give notice to or take a vote of the holders
of its ordinary shares for any of the purposes set forth in paragraphs
(a) or (b) above, the Company shall give notice to the Holder at least
fifteen (15) days prior to any such action to be taken. Such notice shall
specify the date or expected date, if any is to be fixed, as of which
holders of ordinary shares of record shall be entitled to participate in
any such action.
(d) In case the Company at any time while this Warrant remains unexpired
and unexercised shall sell all or substantially all of its property or
dissolve, liquidate, or wind-up its affairs, the Holder may thereafter
receive upon exercise hereof in lieu of each ordinary share of the Company
which it would have been entitled to receive, the same kind and amount of
any securities or assets which may be issuable, distributable, or payable
upon any such sale, dissolution, liquidation, or winding-up in respect of
each ordinary share of the Company.
SECTION 7. PAYMENT OF TAXES. The Company will pay any documentary stamp taxes
attributable to the initial issuance of ordinary shares issuable upon the
exercise of this Warrant; 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 issue or delivery of any ordinary share certificates in a
name other than that of the Holder in respect of which such shares are
issued, and in such case the Company shall not be required to issue or
deliver any certificate for ordinary shares or any Warrant until the person
requesting the same has paid to the Company the amount of such tax or has
established to the Company's satisfaction that such tax has been paid or that
such person has an exemption from the payment of such tax.
SECTION 8. RESERVATION OF ORDINARY SHARES. There have been reserved, and the
Company shall at all times keep reserved out of the authorized and unissued
ordinary shares, a number of ordinary shares sufficient to provide for the
exercise of the rights of purchase represented by this Warrant. The Company
agrees that all ordinary shares issued upon exercise of this Warrant shall
be, at the time of delivery of the certificates of such shares, validly issued
and outstanding, fully paid and non assessable and listed on any national
securities exchange upon which the other ordinary shares of the Company are
then listed. All warrants surrendered in the exercise of the rights thereby
evidenced shall be canceled by the Company, and such canceled warrants shall
constitute sufficient evidence of the exercise of such warrants. Promptly after
the expiration of this Warrant, the Company shall certify the total aggregate
number of warrants then outstanding, and thereafter no ordinary shares shall be
subject to reservation in respect of such Warrant which has expired.
<PAGE>
SECTION 9. FRACTIONAL INTEREST. The Warrant may only be exercised to purchase
full ordinary shares and the Company shall not be required to issue fractions of
ordinary shares on the exercise of the Warrant. However, if the Holder exercised
all warrants then owned or record by him and such exercise would result in the
issuance of a fractional share, the Company will pay to the Holder, in lieu of
the issuance of any fractional share otherwise issuable, an amount of cash based
on the market value of the ordinary shares of the Company on the last trading
day prior to the exercise date.
SECTION 10. RESTRICTIONS ON TRANSFERABILITY. This Warrant shall not be
transferred, hypothecated or assigned before satisfaction of the conditions
specified in this Section 10, which conditions are intended to ensure compliance
with the provisions of the Securities Act with respect to the transfer of any
Warrant. The Holder, by acceptance of this Warrant, agrees to be bound by the
provisions of this Section 10.
(a) Except as otherwise provided in this Section 10, each Warrant shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"This Warrant and the securities represented hereby have not been
registered under the Securities Act of 1933, as amended, and may not
be transferred in violation of such Act, the rules and regulations
thereunder or the provisions of this Warrant."
(b) Notwithstanding the foregoing provision of this Section 10, the
restrictions imposed by this Section 10 upon the transferability of the
Warrant and the legend requirements of the subsection (a) hereof shall
terminate as to any particular Warrant (i) when and so long as such
security shall have been effectively registered under the Securities Act
and disposed of pursuant thereto; or (ii) when the Company shall have
received an opinion of counsel reasonably satisfactory to it that such
securities may be transferred without registration thereof under the
Securities Act. Whenever the restrictions on this Warrant shall terminate,
as hereinabove provided, the Holder shall be entitled to receive from the
Company a new Warrant bearing the following legend in place of the
restrictive legend set forth hereon:
"THE RESTRICTIONS ON THE TRANSFERABILITY OF THE WITHIN WARRANT
CONTAINED IN SECTION 10 HEREOF TERMINATED ________________, ______,
AND ARE OF NO FURTHER FORCE AND EFFECT.
All warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon.
<PAGE>
SECTION 11. NOTICES. Any notice pursuant to this Warrant to be given by the
Holder shall be sufficiently given if sent by registered mail, return receipt
requested, postage prepaid, addressed as follows:
Accent Software International Ltd.
28 Pierre Koenig Street
Jerusalem 91503 Israel
Attention: Robert Trachtenberg
Vice President & General Counsel
with a copy to:
Accent Software International Ltd.
2864 South Circle Drive
Suite 340
Colorado Springs, CO 80906
Attention: Robert J. Behr
Chief Financial Officer
Any notice pursuant to this Agreement to be given by the Company to the Holder
shall be sufficiently given if sent by registered mail, return receipt
requested, postage prepaid, addressed as follows:
The Shemano Group, Inc.
601 California Street
Suite 1850
San Francisco, CA 94108
Attention: Estella Trujillo
SECTION 12. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement in order to cure any ambiguity or to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the Warrant and which shall not adversely affect the interest of the Holder.
SECTION 13. GOVERNING LAW AND JURISDICTION. This Warrant shall be deemed to be a
contract made under the laws of the State of Colorado and shall be construed in
accordance with the laws of Colorado applicable to agreements to be performed
wholly within State of Colorado. Any dispute arising from this Warrant shall be
resolved in the appropriate state or federal court in Denver, Colorado and the
parties hereto consent to the personal jurisdiction of such court.
<PAGE>
SECTION 18. BENEFITS OF THIS WARRANT. Nothing in this Warrant shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or claim under this Warrant; but
this Warrant shall be for the sole and exclusive benefit of the Company and
the Holder. Notwithstanding the foregoing, this Warrant shall not entitle the
Holder to any rights as a shareholder of the Company.
SECTION 19. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holder shall bind and inure to the
benefit of their respective successors and assigns hereunder.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date written below.
Dated: August 5, 1997
ACCENT SOFTWARE INTERNATIONAL LTD.
By
-----------------------------------
Its
---------------------------
Attest:
- ---------------------------------------
Secretary
<PAGE>
TO:
--------------------------------------------------
PURCHASE FORM -- To be executed by the Holder in Order to Exercise the
Warrant.
The undersigned hereby irrevocably elects to exercise the attached Warrant to
purchase for cash, ____________________ of the shares issuable upon the
exercise of such Warrant, and requests that certificates for such shares
shall be issued in the name of:
------------------------------
Please insert social security (Name)
or other identifying number
or Holder of
certificate ( )
-----------------------
------------------------------
(Address)
------------------------------
(Signature)
------------------------------
(Signature)
<PAGE>
ASSIGNMENT FORM -- To be Executed By the Holder in Order to Transfer the
Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
___________ of the Warrants represented by the attached Warrant unto
_____________________________________________________________________ (Please
print or typewrite name and address including postal zip code OF ASSIGNEE)
(Social Security or other identifying number of assignee:
________________________) and does irrevocably constitute and appoint
________________________________________ attorney to transfer the Warrant
Certificate on the records of the Company with full power of substitution in
the premises.
Date: , 19 .
----------------------- ---
Signature(s)
---------------------------------
NOTICE -- The signature(s) to the Purchase Form or the Assignment Form must
correspond to the name as written upon the face of the Warrant
Certificate in every particular without alteration or enlargement
or any change whatsoever.
<PAGE>
Void After 5:00 p.m., Warrant to Purchase 30,000
Eastern Standard Time Shares (Subject to Adjustment)
August 5, 2002
ACCENT SOFTWARE INTERNATIONAL LTD.
WARRANT TO PURCHASE ORDINARY SHARES
Accent Software International Ltd. (the "Company"), a corporation
organized and operating under the laws of the State of Israel, hereby
certifies that, for value received, EQUITY MANAGEMENT PARTNERS (the "Holder")
is entitled to purchase from the Company at any time before 5:00 p.m.,
Eastern Standard Time, on August 5, 2002, 30,000 shares of the Company's
ordinary shares with a nominal value of NIS .01, subject to the conditions of
this Warrant and to adjustment as hereinafter provided, at a price of $1.725
per share (the "Warrant Price"), subject to adjustment as hereinafter
provided. In the event the aforesaid expiration date of the Warrant falls on
a Saturday or Sunday, or on a legal holiday on which the New York Stock
Exchange, the American Stock Exchange or the Nasdaq Stock Exchange is closed,
then the Warrant shall expire at 5:00 p.m. Eastern Standard Time on the next
succeeding business day.
SECTION 1. VESTING SCHEDULE. This Warrant shall vest and be exercisable as of
November 5, 1997 (the "Vesting Date").
SECTION 2. METHOD OF EXERCISE. Subject to the foregoing, the Warrant may be
exercised by the Holder as to the whole or any part of the ordinary shares
covered hereby by surrender of the Warrant at the principal office of the
Company, with the Cash Purchase Form attached hereto duly executed and upon
payment to the Company of the Warrant Price for the ordinary shares to be
purchased in cash or by certified check or bank draft. Thereupon, this
Warrant shall be deemed to have been exercised and the person exercising the
same to have become a holder of record of ordinary shares purchased hereunder
for all purposes, and certificates for the appropriate number of fully paid
and non-assessable shares so purchased shall be delivered to the Purchaser
within a reasonable time thereafter. If the Warrant shall be exercised in
respect of a part only of the shares of ordinary shares covered hereby, the
Holder shall be entitled to receive a similar Warrant of like tenor and date
covering the number of ordinary shares in respect of which this Warrant shall
not have been exercised.
SECTION 3. TRANSFERS AND EXCHANGES. If permitted by the provisions of Section
10, the Company shall transfer, from time to time, any outstanding Warrant
upon the books to be maintained for that purpose, upon surrender thereof for
transfer properly endorsed or accompanied by a written assignment of such
Warrant substantially in the form attached hereto duly executed by the Holder
or his agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such a transfer. Upon any such transfer, a new
Warrant shall be issued to the transferee and the surrendered Warrant shall
be canceled by the Company.
SECTION 4. REGISTRATION RIGHTS. This Warrant and the ordinary shares issuable
upon exercise hereof are not and, except as provided herein, will not be
registered under the
<PAGE>
Securities Act of 1933 (the "Act") or state securities laws. The Holder, by
acceptance hereof, and with reference to the Warrant and the ordinary shares
issuable upon exercise of the Warrant, represents and warrants that:
(a) The Holder is acquiring such securities for the Holder's own account
for investment and not with the view to or in connection with any offering or
distribution, and the Holder has no present intention of selling or otherwise
disposing of such securities.
(b) The Holder is not acquiring such securities for resale or other
disposition upon the occurrence or nonoccurrence of some predetermined event
or circumstance such as, for example, after holding them for any specific
period to realize long-term capital gains, or upon any price rise, or upon
any price decline or for a fixed or determined period in the future.
(c) Notwithstanding anything to the contrary herein, the Holder will not
sell, assign or transfer for value this Warrant or the shares of ordinary
shares issuable upon exercise hereof except pursuant to registration under
the Act or receipt of an opinion of counsel satisfactory to the Company that
registration under the Act is not required, and the Company may place a
legend on this Warrant and on any certificates for such shares acknowledging
the foregoing restrictions.
Subject to the provisions of this Agreement, the Company will use its
reasonable business efforts to cause all the ordinary shares for which the
Holder requested the registration to be registered by the Vesting Date under
the Securities Act to the extent required to permit the disposition by the
Holder of such shares; provided that if such registration shall be in
connection with an underwritten public offering and if the managing
underwriter or underwriters shall advise the Company in writing that in their
opinion the amount of securities requested to be included in such
registration pursuant to this section and pursuant to any other rights
granted by the Company to holders of its securities to request inclusion of
any such securities in such registration exceeds the number of securities
which can be sold in the offering without materially adversely affecting the
offering price, the Company may first include in such registration all
securities the Company proposes to sell, and the Holder shall accept a
reduction (including a total elimination) in the number of shares to be
included in such registration. Nothing in this section shall limit the
Company's ability to withdraw a registration statement it has filed either
before or after effectiveness.
SECTION 5. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 4 to use reasonable business efforts to effect
the registration of any of the ordinary shares underlying this Warrant under
the Securities Act, the Company will as expeditiously as reasonably possible
and at its expense:
(a) prepare and file with the SEC a registration statement with
respect to such shares and use reasonable business efforts to cause such
registration statement to become and remain effective for the period of
time required for the disposition of such shares as contemplated thereby,
not to exceed five years from the date of this Warrant (the "Disposition
Period");
<PAGE>
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for the Disposition Period and as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition
of all shares covered by such registration statement in accordance with
the method of disposition set forth in such registration statement for
such period;
(c) furnish to the Holder and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus and each document incorporated by
reference therein to the extent then required by the rules and regulations
of the SEC) as such persons may reasonably request in order to facilitate
the public sale or other disposition of the Shares covered by such
registration statement;
(d) use reasonable business efforts to register or qualify the
shares covered by such registration statement under the securities or blue
sky laws of such jurisdictions as the managing underwriter shall reasonably
request and to take all necessary action to keep such registration or
qualification effective as required by this section; provided that the
Company shall not be required to qualify to transact business as a foreign
corporation in any jurisdiction in which it would not otherwise be required
to be so qualified or to take any action which would subject it to general
service of process in any such jurisdictions in which it is not then so
subject;
(e) during the Disposition Period immediately notify in writing
the Holder and each underwriter of the happening of any event as result of
which the prospectus contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing (in which case, the Company shall promptly prepare and file with
the SEC and provide the Holder with revised or supplemental prospectuses
and if so requested by the Company in writing, the Holder shall promptly
take action to cease making any offers of the shares until receipt and
distribution of such revised supplemental prospectuses).
In connection with any registration hereunder, the Holder of this
Warrant shall furnish promptly to the Company in writing such information
(together with such supplements as may be necessary from time to time) with
respect to itself and the proposed disposition as shall be reasonably
necessary in order to ensure compliance with federal and applicable state
securities laws.
SECTION 6. ADJUSTMENT OF WARRANT PRICE. The Warrant Price and the number of
ordinary shares subject to being purchased pursuant to this Warrant shall be
subject to adjustment from time to time as follows:
(a) In case, prior to the expiration of this Warrant by exercise or
by its terms, the Company shall issue any ordinary shares as a share
dividend or subdivide the number of outstanding ordinary shares into a
greater number of
<PAGE>
shares, then, in either of such cases, the purchase price per share of
the ordinary shares purchasable pursuant to this Warrant in effect at
the time of such action shall be proportionately reduced and the number
of shares at the time purchasable pursuant to this Warrant shall be
proportionately increased; and conversely, in the event the Company
shall contract the number of outstanding ordinary shares by combining
such shares into a smaller number of shares, then, in such case, the
purchase price per ordinary share purchasable pursuant to this Warrant
in effect at the time of such action shall be proportionately increased,
and the number of shares at that time purchasable pursuant to this
Warrant shall be proportionately decreased. If the Company, at any time
during the life of this Warrant, shall declare a dividend payable in
cash on its ordinary shares, and shall at substantially the same time
offer to its shareholders the right to purchase new ordinary shares from
the proceeds of such dividend or for an amount substantially equal to
the dividend, all ordinary shares so issued shall, for purposes of this
Warrant, be deemed to have been issued as a share dividend. Any
dividends paid or distributed upon ordinary shares in shares of any
other class or securities convertible into ordinary shares shall be
treated as a dividend paid in ordinary shares to the extent that
ordinary shares are issuable upon the conversion thereof.
(b) In case, prior to the expiration of this Warrant by exercise or
by its terms, the Company shall be recapitalized by reclassifying its
outstanding ordinary shares into shares of a different par value, or the
Company shall merge into or consolidate with another corporation or
shall sell all or substantially all of its or any of its successor
corporation's property and assets to any other corporation or
corporations (any such corporation being included within the meaning of
the term "successor corporation"), the Holder shall thereafter have the
right to purchase, upon the basis and on the terms and conditions and
during the time specified in this Warrant in lieu of the ordinary shares
of the Company theretofore purchasable upon the exercise of this
Warrant, such shares, securities, or assets as may be issued or payable
with respect to, or in exchange for, the ordinary shares of the Company
theretofore purchasable upon the exercise of this Warrant had such
recapitalization, consolidation, merger, or conveyance not taken place;
and in any such event, the rights of the Holder to an adjustment in the
number of ordinary shares purchased upon the exercise of this Warrant as
herein provided shall continue and be preserved in respect of any
shares, securities, or assets which the Holder becomes entitled to
purchase.
(c) If the Company shall set a record date with respect to its
ordinary shares or shall propose to give notice to or take a vote of the
holders of its ordinary shares for any of the purposes set forth in
paragraphs (a) or (b) above, the Company shall give notice to the Holder
at least fifteen (15) days prior to any such action to be taken. Such
notice shall specify the date or expected date, if any is to be fixed,
as of which holders of ordinary shares of record shall be entitled to
participate in any such action.
(d) In case the Company at any time while this Warrant remains
unexpired and unexercised shall sell all or substantially all of its
property or dissolve, liquidate, or wind-up its affairs, the Holder may
thereafter receive upon
<PAGE>
exercise hereof in lieu of each ordinary share of the Company which it
would have been entitled to receive, the same kind and amount of any
securities or assets which may be issuable, distributable, or payable
upon any such sale, dissolution, liquidation, or winding-up in respect
of each ordinary share of the Company.
SECTION 7. PAYMENT OF TAXES. The Company will pay any documentary stamp taxes
attributable to the initial issuance of ordinary shares issuable upon the
exercise of this Warrant; 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 issue or delivery of any ordinary share certificates in a
name other than that of the Holder in respect of which such shares are
issued, and in such case the Company shall not be required to issue or
deliver any certificate for ordinary shares or any Warrant until the person
requesting the same has paid to the Company the amount of such tax or has
established to the Company's satisfaction that such tax has been paid or that
such person has an exemption from the payment of such tax.
SECTION 8. RESERVATION OF ORDINARY SHARES. There have been reserved, and the
Company shall at all times keep reserved out of the authorized and unissued
ordinary shares, a number of ordinary shares sufficient to provide for the
exercise of the rights of purchase represented by this Warrant. The Company
agrees that all ordinary shares issued upon exercise of this Warrant shall
be, at the time of delivery of the certificates of such shares, validly
issued and outstanding, fully paid and non assessable and listed on any
national securities exchange upon which the other ordinary shares of the
Company are then listed. All warrants surrendered in the exercise of the
rights thereby evidenced shall be canceled by the Company, and such canceled
warrants shall constitute sufficient evidence of the exercise of such
warrants. Promptly after the expiration of this Warrant, the Company shall
certify the total aggregate number of warrants then outstanding, and
thereafter no ordinary shares shall be subject to reservation in respect of
such Warrant which has expired.
SECTION 9. FRACTIONAL INTEREST. The Warrant may only be exercised to purchase
full ordinary shares and the Company shall not be required to issue fractions
of ordinary shares on the exercise of the Warrant. However, if the Holder
exercised all warrants then owned or record by him and such exercise would
result in the issuance of a fractional share, the Company will pay to the
Holder, in lieu of the issuance of any fractional share otherwise issuable,
an amount of cash based on the market value of the ordinary shares of the
Company on the last trading day prior to the exercise date.
SECTION 10. RESTRICTIONS ON TRANSFERABILITY. This Warrant shall not be
transferred, hypothecated or assigned before satisfaction of the conditions
specified in this Section 10, which conditions are intended to ensure
compliance with the provisions of the Securities Act with respect to the
transfer of any Warrant. The Holder, by acceptance of this Warrant, agrees to
be bound by the provisions of this Section 10.
(a) Except as otherwise provided in this Section 10, each Warrant
shall be stamped or otherwise imprinted with a legend in substantially
the following form:
<PAGE>
"This Warrant and the securities represented hereby have not been
registered under the Securities Act of 1933, as amended, and may not
be transferred in violation of such Act, the rules and regulations
thereunder or the provisions of this Warrant."
(b) Notwithstanding the foregoing provision of this Section 10, the
restrictions imposed by this Section 10 upon the transferability of the
Warrant and the legend requirements of the subsection (a) hereof shall
terminate as to any particular Warrant (i) when and so long as such
security shall have been effectively registered under the Securities Act
and disposed of pursuant thereto; or (ii) when the Company shall have
received an opinion of counsel reasonably satisfactory to it that such
securities may be transferred without registration thereof under the
Securities Act. Whenever the restrictions on this Warrant shall
terminate, as herein above provided, the Holder shall be entitled to
receive from the Company a new Warrant bearing the following legend in
place of the restrictive legend set forth hereon:
"THE RESTRICTIONS ON THE TRANSFERABILITY OF THE WITHIN WARRANT
CONTAINED IN SECTION 10 HEREOF TERMINATED ____________________,
______, AND ARE OF NO FURTHER FORCE AND EFFECT.
All warrants issued upon registration of transfer, division or combination
of, or in substitution for, any Warrant or Warrants entitled to bear such
legend shall have a similar legend endorsed thereon.
SECTION 11. NOTICES. Any notice pursuant to this Warrant to be given by the
Holder shall be sufficiently given if sent by registered mail, return receipt
requested, postage prepaid, addressed as follows:
Accent Software International Ltd.
28 Pierre Koenig Street
Jerusalem 91503 Israel
Attention: General Counsel
with a copy to:
Accent Software International Ltd.
2864 South Circle Drive
Suite 340
Colorado Springs, CO 80906
Attention: Chief Financial Officer
Any notice pursuant to this Agreement to be given by the Company to the
Holder shall be sufficiently given if sent by registered mail, return receipt
requested, postage prepaid, addressed as follows:
Equity Management Group
3340 Peachtree Road
<PAGE>
Suite 620
Atlanta, GA 30326
Attention: Scott Koch
SECTION 12. SUPPLEMENTS AND AMENDMENTS. the Company may from time to time
supplement or amend this Agreement in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the
Company may deem necessary or desirable and which shall not be inconsistent
with the provisions of the Warrant and which shall not adversely affect the
interest of the Holder.
SECTION 13. GOVERNING LAW AND JURISDICTION. This Warrant shall be deemed to
be a contract made under the laws of the State of Colorado and shall be
construed in accordance with the laws of Colorado applicable to agreements to
be performed wholly within State of Colorado. Any dispute arising from this
Warrant shall be resolved in the appropriate state or federal court in
Denver, Colorado and the parties hereto consent to the personal jurisdiction
of such court.
SECTION 18. BENEFITS OF THIS WARRANT. Nothing in this Warrant shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or claim under this Warrant; but
this Warrant shall be for the sole and exclusive benefit of the Company and
the Holder. Notwithstanding the foregoing, this Warrant shall not entitle the
Holder to any rights as a shareholder of the Company.
SECTION 19. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holder shall bind and inure to the
benefit of their respective successors and assigns hereunder.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date written below.
Dated: August 5,1997
ACCENT SOFTWARE INTERNATIONAL LTD.
By
-----------------------------------
Its
---------------------------
Attest:
- ---------------------------------------
Secretary
<PAGE>
TO:
--------------------------------------------------
PURCHASE FORM -- To be executed by the Holder in Order to Exercise the
Warrant.
The undersigned hereby irrevocably elects to exercise the attached Warrant to
purchase for cash, ____________________ of the shares issuable upon the
exercise of such Warrant, and requests that certificates for such shares
shall be issued in the name of:
lease insert social security (Name)
or other identifying number
or Holder of
certificate (___________________)
(Address)
(Signature)
(Signature)
<PAGE>
ASSIGNMENT FORM -- To be Executed By the Holder in Order to Transfer the
Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
______ of the Warrants represented by the attached Warrant unto
_____________________________________________________________________ (Please
print or typewrite name and address including postal zip code OF ASSIGNEE)
(Social Security or other identifying number of assignee: __________________)
and does irrevocably constitute and appoint
______________________________________________ attorney to transfer the
Warrant Certificate on the records of the Company with full power of
substitution in the premises.
Date: , 19 .
----------------------- ---
Signature(s)
---------------------------------
NOTICE -- The signature(s) to the Purchase Form or the Assignment Form must
correspond to the name as written upon the face of the Warrant
Certificate in every particular without alteration or enlargement or
any change whatsoever.
<PAGE>
Void After 5:00 p.m., Warrant to Purchase 100,000
Eastern Standard Time Shares (Subject to Adjustment)
August 1, 2002
ACCENT SOFTWARE INTERNATIONAL LTD.
WARRANT TO PURCHASE ORDINARY SHARES
Accent Software International Ltd. (the "Company"), a corporation
organized and operating under the laws of the State of Israel, hereby
certifies that, for value received, BRADFORD GILLINGHAM (the "Holder") is
entitled to purchase from the Company at any time before 5:00 p.m., Eastern
Standard Time, on August 1, 2000, 100,000 shares of the Company's ordinary
shares with a nominal value of NIS .01, subject to the conditions of this
Warrant and to adjustment as hereinafter provided, at a price of $2.00 per
share (the "Warrant Price"), subject to adjustment as hereinafter provided.
In the event the aforesaid expiration date of the Warrant falls on a Saturday
or Sunday, or on a legal holiday on which the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Exchange is closed, then the
Warrant shall expire at 5:00 p.m. Eastern Standard Time on the next
succeeding business day.
SECTION 1. VESTING SCHEDULE. This Warrant shall vest and be exercisable as of
August 1, 1997 (the "Vesting Date").
SECTION 2. METHOD OF EXERCISE. Subject to the foregoing, the Warrant may be
exercised by the Holder as to the whole or any part of the ordinary shares
covered hereby by surrender of the Warrant at the principal office of the
Company, with the Cash Purchase Form attached hereto duly executed and upon
payment to the Company of the Warrant Price for the ordinary shares to be
purchased in cash or by certified check or bank draft. Thereupon, this
Warrant shall be deemed to have been exercised and the person exercising the
same to have become a holder of record of ordinary shares purchased hereunder
for all purposes, and certificates for the appropriate number of fully paid
and non-assessable shares so purchased shall be delivered to the Purchaser
within a reasonable time thereafter. If the Warrant shall be exercised in
respect of a part only of the shares of ordinary shares covered hereby, the
Holder shall be entitled to receive a similar Warrant of like tenor and date
covering the number of ordinary shares in respect of which this Warrant shall
not have been exercised.
SECTION 3. TRANSFERS AND EXCHANGES. If permitted by the provisions of Section
10, the Company shall transfer, from time to time, any outstanding Warrant
upon the books to be maintained for that purpose, upon surrender thereof for
transfer properly endorsed or accompanied by a written assignment of such
Warrant substantially in the form attached hereto duly executed by the Holder
or his agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such a transfer. Upon any such transfer, a new
Warrant shall be issued to the transferee and the surrendered Warrant shall
be canceled by the Company.
SECTION 4. REGISTRATION RIGHTS. This Warrant and the ordinary shares issuable
upon exercise hereof are not and, except as provided herein, will not be
registered under the Securities Act of 1933 (the "Act") or state securities
laws. The Holder, by acceptance
<PAGE>
hereof, and with reference to the Warrant and the ordinary shares issuable
upon exercise of the Warrant, represents and warrants that:
(a) The Holder is acquiring such securities for the Holder's own account
for investment and not with the view to or in connection with any offering or
distribution, and the Holder has no present intention of selling or otherwise
disposing of such securities.
(b) The Holder is not acquiring such securities for resale or other
disposition upon the occurrence or nonoccurrence of some predetermined event
or circumstance such as, for example, after holding them for any specific
period to realize long-term capital gains, or upon any price rise, or upon
any price decline or for a fixed or determined period in the future.
(c) Notwithstanding anything to the contrary herein, the Holder will not
sell, assign or transfer for value this Warrant or the shares of ordinary
shares issuable upon exercise hereof except pursuant to registration under
the Act or receipt of an opinion of counsel satisfactory to the Company that
registration under the Act is not required, and the Company may place a
legend on this Warrant and on any certificates for such shares acknowledging
the foregoing restrictions.
Subject to the provisions of this Agreement, the Company will use its
reasonable business efforts to cause all the ordinary shares for which the
Holder requested the registration to be registered by November 5, 1997, under
the Securities Act to the extent required to permit the disposition by the
Holder of such shares; provided that if such registration shall be in
connection with an underwritten public offering and if the managing
underwriter or underwriters shall advise the Company in writing that in their
opinion the amount of securities requested to be included in such
registration pursuant to this section and pursuant to any other rights
granted by the Company to holders of its securities to request inclusion of
any such securities in such registration exceeds the number of securities
which can be sold in the offering without materially adversely affecting the
offering price, the Company may first include in such registration all
securities the Company proposes to sell, and the Holder shall accept a
reduction (including a total elimination) in the number of shares to be
included in such registration. Nothing in this section shall limit the
Company's ability to withdraw a registration statement it has filed either
before or after effectiveness.
SECTION 5. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 4 to use reasonable business efforts to effect
the registration of any of the ordinary shares underlying this Warrant under
the Securities Act, the Company will as expeditiously as reasonably possible
and at its expense:
(a) prepare and file with the SEC a registration statement with
respect to such shares and use reasonable business efforts to cause such
registration statement to become and remain effective for the period of
time required for the disposition of such shares as contemplated thereby,
not to exceed five years from the date of this Warrant (the "Disposition
Period");
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in
<PAGE>
connection therewith as may be necessary to keep such registration
statement effective for the Disposition Period and as may be necessary
to comply with the provisions of the Securities Act with respect to the
disposition of all shares covered by such registration statement in
accordance with the method of disposition set forth in such registration
statement for such period;
(c) furnish to the Holder and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus and each document incorporated
by reference therein to the extent then required by the rules and
regulations of the SEC) as such persons may reasonably request in order
to facilitate the public sale or other disposition of the Shares covered
by such registration statement;
(d) use reasonable business efforts to register or qualify the
shares covered by such registration statement under the securities or blue
sky laws of such jurisdictions as the managing underwriter shall reasonably
request and to take all necessary action to keep such registration or
qualification effective as required by this section; provided that the
Company shall not be required to qualify to transact business as a foreign
corporation in any jurisdiction in which it would not otherwise be required
to be so qualified or to take any action which would subject it to general
service of process in any such jurisdictions in which it is not then so
subject;
(e) during the Disposition Period immediately notify in writing
the Holder and each underwriter of the happening of any event as result of
which the prospectus contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing (in which case, the Company shall promptly prepare and file with
the SEC and provide the Holder with revised or supplemental prospectuses
and if so requested by the Company in writing, the Holder shall promptly
take action to cease making any offers of the shares until receipt and
distribution of such revised supplemental prospectuses).
In connection with any registration hereunder, the Holder of this
Warrant shall furnish promptly to the Company in writing such information
(together with such supplements as may be necessary from time to time) with
respect to itself and the proposed disposition as shall be reasonably
necessary in order to ensure compliance with federal and applicable state
securities laws.
SECTION 6. ADJUSTMENT OF WARRANT PRICE. The Warrant Price and the number of
ordinary shares subject to being purchased pursuant to this Warrant shall be
subject to adjustment from time to time as follows:
(a) In case, prior to the expiration of this Warrant by exercise or
by its terms, the Company shall issue any ordinary shares as a share
dividend or subdivide the number of outstanding ordinary shares into a
greater number of shares, then, in either of such cases, the purchase
price per share of the ordinary shares purchasable pursuant to this
Warrant in effect at the time of
<PAGE>
such action shall be proportionately reduced and the number of shares at
the time purchasable pursuant to this Warrant shall be proportionately
increased; and conversely, in the event the Company shall contract the
number of outstanding ordinary shares by combining such shares into a
smaller number of shares, then, in such case, the purchase price per
ordinary share purchasable pursuant to this Warrant in effect at the
time of such action shall be proportionately increased, and the number
of shares at that time purchasable pursuant to this Warrant shall be
proportionately decreased. If the Company, at any time during the life
of this Warrant, shall declare a dividend payable in cash on its
ordinary shares, and shall at substantially the same time offer to its
shareholders the right to purchase new ordinary shares from the proceeds
of such dividend or for an amount substantially equal to the dividend,
all ordinary shares so issued shall, for purposes of this Warrant, be
deemed to have been issued as a share dividend. Any dividends paid or
distributed upon ordinary shares in shares of any other class or
securities convertible into ordinary shares shall be treated as a
dividend paid in ordinary shares to the extent that ordinary shares are
issuable upon the conversion thereof.
(b) In case, prior to the expiration of this Warrant by exercise or
by its terms, the Company shall be recapitalized by reclassifying its
outstanding ordinary shares into shares of a different par value, or the
Company shall merge into or consolidate with another corporation or
shall sell all or substantially all of its or any of its successor
corporation's property and assets to any other corporation or
corporations (any such corporation being included within the meaning of
the term "successor corporation"), the Holder shall thereafter have the
right to purchase, upon the basis and on the terms and conditions and
during the time specified in this Warrant in lieu of the ordinary shares
of the Company theretofore purchasable upon the exercise of this
Warrant, such shares, securities, or assets as may be issued or payable
with respect to, or in exchange for, the ordinary shares of the Company
theretofore purchasable upon the exercise of this Warrant had such
recapitalization, consolidation, merger, or conveyance not taken place;
and in any such event, the rights of the Holder to an adjustment in the
number of ordinary shares purchased upon the exercise of this Warrant as
herein provided shall continue and be preserved in respect of any
shares, securities, or assets which the Holder becomes entitled to
purchase.
(c) If the Company shall set a record date with respect to its
ordinary shares or shall propose to give notice to or take a vote of the
holders of its ordinary shares for any of the purposes set forth in
paragraphs (a) or (b) above, the Company shall give notice to the Holder
at least fifteen (15) days prior to any such action to be taken. Such
notice shall specify the date or expected date, if any is to be fixed,
as of which holders of ordinary shares of record shall be entitled to
participate in any such action.
(d) In case the Company at any time while this Warrant remains
unexpired and unexercised shall sell all or substantially all of its
property or dissolve, liquidate, or wind-up its affairs, the Holder may
thereafter receive upon exercise hereof in lieu of each ordinary share
of the Company which it would have been entitled to receive, the same
kind and amount of any securities or
<PAGE>
assets which may be issuable, distributable, or payable upon any such
sale, dissolution, liquidation, or winding-up in respect of each
ordinary share of the Company.
SECTION 7. PAYMENT OF TAXES. The Company will pay any documentary stamp taxes
attributable to the initial issuance of ordinary shares issuable upon the
exercise of this Warrant; 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 issue or delivery of any ordinary share certificates in a
name other than that of the Holder in respect of which such shares are
issued, and in such case the Company shall not be required to issue or
deliver any certificate for ordinary shares or any Warrant until the person
requesting the same has paid to the Company the amount of such tax or has
established to the Company's satisfaction that such tax has been paid or that
such person has an exemption from the payment of such tax.
SECTION 8. RESERVATION OF ORDINARY SHARES. There have been reserved, and the
Company shall at all times keep reserved out of the authorized and unissued
ordinary shares, a number of ordinary shares sufficient to provide for the
exercise of the rights of purchase represented by this Warrant. The Company
agrees that all ordinary shares issued upon exercise of this Warrant shall
be, at the time of delivery of the certificates of such shares, validly
issued and outstanding, fully paid and non assessable and listed on any
national securities exchange upon which the other ordinary shares of the
Company are then listed. All warrants surrendered in the exercise of the
rights thereby evidenced shall be canceled by the Company, and such canceled
warrants shall constitute sufficient evidence of the exercise of such
warrants. Promptly after the expiration of this Warrant, the Company shall
certify the total aggregate number of warrants then outstanding, and
thereafter no ordinary shares shall be subject to reservation in respect of
such Warrant which has expired.
SECTION 9. FRACTIONAL INTEREST. The Warrant may only be exercised to purchase
full ordinary shares and the Company shall not be required to issue fractions
of ordinary shares on the exercise of the Warrant. However, if the Holder
exercised all warrants then owned or record by him and such exercise would
result in the issuance of a fractional share, the Company will pay to the
Holder, in lieu of the issuance of any fractional share otherwise issuable,
an amount of cash based on the market value of the ordinary shares of the
Company on the last trading day prior to the exercise date.
SECTION 10. RESTRICTIONS ON TRANSFERABILITY. This Warrant shall not be
transferred, hypothecated or assigned before satisfaction of the conditions
specified in this Section 10, which conditions are intended to ensure
compliance with the provisions of the Securities Act with respect to the
transfer of any Warrant. The Holder, by acceptance of this Warrant, agrees to
be bound by the provisions of this Section 10.
(a) Except as otherwise provided in this Section 10, each Warrant
shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"This Warrant and the securities represented hereby have not been
registered under the Securities Act of 1933, as amended, and may not
<PAGE>
be transferred in violation of such Act, the rules and regulations
thereunder or the provisions of this Warrant."
(b) Notwithstanding the foregoing provision of this Section 10, the
restrictions imposed by this Section 10 upon the transferability of the
Warrant and the legend requirements of the subsection (a) hereof shall
terminate as to any particular Warrant (i) when and so long as such
security shall have been effectively registered under the Securities Act
and disposed of pursuant thereto; or (ii) when the Company shall have
received an opinion of counsel reasonably satisfactory to it that such
securities may be transferred without registration thereof under the
Securities Act. Whenever the restrictions on this Warrant shall
terminate, as herein above provided, the Holder shall be entitled to
receive from the Company a new Warrant bearing the following legend in
place of the restrictive legend set forth hereon:
"THE RESTRICTIONS ON THE TRANSFERABILITY OF THE WITHIN WARRANT
CONTAINED IN SECTION 10 HEREOF TERMINATED ____________________,
______, AND ARE OF NO FURTHER FORCE AND EFFECT.
All warrants issued upon registration of transfer, division or combination
of, or in substitution for, any Warrant or Warrants entitled to bear such
legend shall have a similar legend endorsed thereon.
SECTION 11. NOTICES. Any notice pursuant to this Warrant to be given by the
Holder shall be sufficiently given if sent by registered mail, return receipt
requested, postage prepaid, addressed as follows:
Accent Software International Ltd.
28 Pierre Koenig Street
Jerusalem 91503 Israel
Attention: General Counsel
with a copy to:
Accent Software International Ltd.
2864 South Circle Drive
Suite 340
Colorado Springs, CO 80906
Attention: Chief Financial Officer
Any notice pursuant to this Agreement to be given by the Company to the
Holder shall be sufficiently given if sent by registered mail, return receipt
requested, postage prepaid, addressed as follows:
Bradford Gillingham
201 Harrison Street, Suite 204
San Francisco, CA 94105
<PAGE>
SECTION 12. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the
Company may deem necessary or desirable and which shall not be inconsistent
with the provisions of the Warrant and which shall not adversely affect the
interest of the Holder.
SECTION 13. GOVERNING LAW AND JURISDICTION. This Warrant shall be deemed to
be a contract made under the laws of the State of Colorado and shall be
construed in accordance with the laws of Colorado applicable to agreements to
be performed wholly within State of Colorado. Any dispute arising from this
Warrant shall be resolved in the appropriate state or federal court in
Denver, Colorado and the parties hereto consent to the personal jurisdiction
of such court.
SECTION 18. BENEFITS OF THIS WARRANT. Nothing in this Warrant shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or claim under this Warrant; but
this Warrant shall be for the sole and exclusive benefit of the Company and
the Holder. Notwithstanding the foregoing, this Warrant shall not entitle the
Holder to any rights as a shareholder of the Company.
SECTION 19. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holder shall bind and inure to the
benefit of their respective successors and assigns hereunder.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date written below.
Dated: August 1,1997
ACCENT SOFTWARE INTERNATIONAL LTD.
By
-----------------------------------
Its
---------------------------
Attest:
- ---------------------------------------
Secretary
<PAGE>
TO: __________________________________________________
PURCHASE FORM -- To be executed by the Holder in Order to Exercise the
Warrant.
The undersigned hereby irrevocably elects to exercise the attached Warrant to
purchase for cash, ____________________ of the shares issuable upon the exercise
of such Warrant, and requests that certificates for such shares shall be issued
in the name of:
Please insert social security (Name)
or other identifying number
or Holder of
certificate (___________________)
(Address)
(Signature)
(Signature)
<PAGE>
ASSIGNMENT FORM -- To be Executed By the Holder in Order to Transfer the
Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers ______
of the Warrants represented by the attached Warrant unto
_____________________________________________________________________ (Please
print or typewrite name and address including postal zip code OF ASSIGNEE)
(Social Security or other identifying number of assignee: _____________________)
and does irrevocably constitute and appoint
______________________________________________ attorney to transfer the Warrant
Certificate on the records of the Company with full power of substitution in the
premises.
Date: _______________________, 19___.
Signature(s)_________________________________
NOTICE -- The signature(s) to the Purchase Form or the Assignment Form must
correspond to the name as written upon the face of the Warrant
Certificate in every particular without alteration or enlargement or
any change whatsoever.
<PAGE>
Void After 5:00 p.m., Warrant to Purchase 90,000
Eastern Standard Time Shares (Subject to Adjustment)
December 9, 2003
ACCENT SOFTWARE INTERNATIONAL LTD.
WARRANT TO PURCHASE ORDINARY SHARES
Accent Software International Ltd. (the "Company"), a corporation
organized and operating under the laws of the State of Israel, hereby
certifies that, for value received, ROBERT J. LAIKIN (the "Holder") is
entitled to purchase from the Company at any time before 5:00 p.m., Eastern
Standard Time, on December 9, 2003, 90,000 shares of the Company's ordinary
shares with a nominal value of NIS .01, subject to the conditions of this
Warrant and to adjustment as hereinafter provided, at a price of $7.00 per
share (the "Warrant Price"), subject to adjustment as hereinafter provided.
In the event the aforesaid expiration date of the Warrant falls on a Saturday
or Sunday, or on a legal holiday on which the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Exchange is closed, then the
Warrant shall expire at 5:00 p.m. Eastern Standard Time on the next
succeeding business day.
SECTION 1. VESTING SCHEDULE. This Warrant shall vest and be exercisable as
follows:
(a) The Holder may exercise up to 45,000 warrants at any time after
the date hereof;
(b) The Holder may exercise up to 45,000 warrants (in addition to the
45,000 warrants referred to in subparagraph (a), above) at any time after
December 9, 1997, provided that on September 30, 1997, his services as a
consultant to the Company and its related companies were still being
utilized.
SECTION 2. METHOD OF EXERCISE. Subject to the foregoing, the Warrants may be
exercised by the Holder as to the whole or any part of the ordinary shares
covered hereby by surrender of the Warrant at the principal office of the
Company, with the Cash Purchase Form attached hereto duly executed and upon
payment to the Company of the Warrant Price for the ordinary shares to be
purchased in cash or by certified check or bank draft. Thereupon, this
Warrant shall be deemed to have been exercised and the person exercising the
same to have become a holder of record of ordinary shares purchased hereunder
for all purposes, and certificates for the appropriate number of fully paid
and non-assessable shares so purchased shall be delivered to the Purchaser
within a reasonable time thereafter. If the Warrant shall be exercised in
respect of a part only of the shares of ordinary shares covered hereby, the
Holder shall be entitled to receive a similar Warrant of like tenor and date
covering the number of ordinary shares in respect of which this Warrant shall
not have been exercised.
<PAGE>
SECTION 3. TRANSFERS AND EXCHANGES. If permitted by the provisions of Section
10, the Company shall transfer, from time to time, any outstanding Warrant
upon the books to be maintained for that purpose, upon surrender thereof for
transfer properly endorsed or accompanied by a written assignment of such
Warrant substantially in the form attached hereto duly executed by the Holder
or his agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such a transfer. Upon any such transfer, a new
Warrant shall be issued to the transferee and the surrendered Warrant shall
be canceled by the Company.
SECTION 4. REGISTRATION RIGHTS. PIGGYBACK REGISTRATION RIGHTS. This Warrant
and the ordinary shares issuable upon exercise hereof are not and, except as
provided herein, will not be registered under the Securities Act of 1933 (the
"Act") or state securities laws. The Holder, by acceptance hereof, and with
reference to the Warrant and the ordinary shares issuable upon exercise of
the Warrant, represents and warrants that:
(a) The Holder is acquiring such securities for the Holder's own
account for investment and not with the view to or in connection with any
offering or distribution, and the Holder has no present intention of selling
or otherwise disposing of such securities.
(b) The Holder is not acquiring such securities for resale or other
disposition upon the occurrence or nonoccurrence of some predetermined event
or circumstance such as, for example, after holding them for any specific
period to realize long-term capital gains, or upon any price rise, or upon
any price decline or for a fixed or determined period in the future.
(c) Notwithstanding anything to the contrary herein, the Holder will
not sell, assign or transfer for value this Warrant or the shares of ordinary
shares issuable upon exercise hereof except pursuant to registration under
the Act or receipt of an opinion of counsel satisfactory to the Company that
registration under the Act is not required, and the Company may place a
legend on this Warrant and on any certificates for such shares acknowledging
the foregoing restrictions.
If the Company proposes (whether or not for its own account) to register any
of its securities under the Securities Act of 1933 (the "Securities Act")
(other than on Form Form S-4), the Company shall give written notice to the
Holder of its intention to effect such a registration not later than 30 days
prior to the anticipated date of filing with the Securities and Exchange
Commission ("SEC") of a registration statement, which notice shall offer the
Holder the opportunity, with the approval of the Company's managing
underwriter or underwriters, if any, to include in such registration
statement any of the ordinary shares underlying this Warrant the Holder may
request to register ("Piggyback Registration"). Any entitlement to a
Piggyback Registration as set forth in this Warrnat shall be applicable only
to the ordinary shares underlying this Warrant, rather to this Warrant itself.
<PAGE>
Subject to the provisions of this Agreement, the Company will use its
reasonable business efforts to cause all the ordinary shares for which the
Holder requested the registration to be registered under the Securities Act
to the extent required to permit the disposition by the Holder of such
shares; provided that if such registration shall be in connection with an
underwritten public offering and if the managing underwriter or underwriters
shall advise the Company in writing that in their opinion the amount of
securities requested to be included in such registration pursuant to this
section and pursuant to any other rights granted by the Company to holders of
its securities to request inclusion of any such securities in such
registration exceeds the number of securities which can be sold in the
offering without materially adversely affecting the offering price, the
Company may first include in such registration all securities the Company
proposes to sell, and the Holder shall accept a reduction (including a total
elimination) in the number of shares to be included in such registration.
Nothing in this section shall limit the Company's ability to withdraw a
registration statement it has filed either before or after effectiveness.
SECTION 5. REGISTRATION PROCEDURES. If and whenever the Company is required
by the provisions of Section 4 to use reasonable business efforts to effect
the registration of any of the ordinary shares underlying this Warrant under
the Securities Act, the Company will as expeditiously as reasonably possible
and at its expense:
(a) prepare and file with the SEC a registration statement with
respect to such shares and use reasonable business efforts to cause such
registration statement to become and remain effective for the period of
time required for the disposition of such shares as contemplated thereby,
not to exceed six months (the "Disposition Period");
(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for the Disposition Period and as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition
of all shares covered by such registration statement in accordance with
the method of disposition set forth in such registration statement for
such period;
(c) furnish to the Holder and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus and each document incorporated by
reference therein to the extent then required by the rules and
regulations of the SEC) as such persons may reasonably request in order
to facilitate the public sale or other disposition of the Shares covered
by such registration statement;
(d) use reasonable business efforts to register or qualify the shares
covered by such registration statement under the securities or blue sky
laws of such jurisdictions as the managing underwriter
shall reasonably request and to
<PAGE>
take all necessary action to keep such registration or qualification
effective as required by this section; provided that the Company shall
not be required to qualify to transact business as a foreign corporation
in any jurisdiction in which it would not otherwise be required to be so
qualified or to take any action which would subject it to general service
of process in any such jurisdictions in which it is not then so subject;
(e) during the Disposition Period immediately notify in writing the
Holder and each underwriter of the happening of any event as result of
which the prospectus contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing (in which case, the Company shall promptly prepare and file with
the SEC and provide the Holder with revised or supplemental prospectuses
and if so requested by the Company in writing, the Holder shall promptly
take action to cease making any offers of the shares until receipt and
distribution of such revised supplemental prospectuses).
In connection with any registration hereunder, the Holder of this Warrant
shall furnish promptly to the Company in writing such information (together
with such supplements as may be necessary from time to time) with respect to
himself and the proposed disposition as shall be reasonably necessary in
order to ensure compliance with federal and applicable state securities laws.
SECTION 6. ADJUSTMENT OF WARRANT PRICE. The Warrant Price and the number of
ordinary shares subject to being purchased pursuant to this Warrant shall be
subject to adjustment from time to time as follows:
(a) In case, prior to the expiration of this Warrant by exercise or by
its terms, the Company shall issue any ordinary shares as a share dividend
or subdivide the number of outstanding ordinary shares into a greater
number of shares, then, in either of such cases, the purchase price per
share of the ordinary shares purchasable pursuant to this Warrant in
effect at the time of such action shall be proportionately reduced and the
number of shares at the time purchasable pursuant to this Warrant shall be
proportionately increased; and conversely, in the event the Company shall
contract the number of outstanding ordinary shares by combining such
shares into a smaller number of shares, then, in such case, the purchase
price per ordinary share purchasable pursuant to this Warrant in effect at
the time of such action shall be proportionately increased, and the number
of shares at that time purchasable pursuant to this Warrant shall be
proportionately decreased. If the Company, at any time during the life of
this Warrant, shall declare a dividend payable in cash on its ordinary
shares, and shall at substantially the same time offer to its shareholders
the right to purchase new ordinary shares from the proceeds of such
dividend or for an amount substantially equal to the
<PAGE>
dividend, all ordinary shares so issued shall, for purposes of this
Warrant, be deemed to have been issued as a share dividend. Any dividends
paid or distributed upon ordinary shares in shares of any other class or
securities convertible into ordinary shares shall be treated as a dividend
paid in ordinary shares to the extent that ordinary shares are issuable
upon the conversion thereof.
(b) In case, prior to the expiration of this Warrant by exercise or by its
terms, the Company shall be recapitalized by reclassifying its outstanding
ordinary shares into shares of a different par value, or the Company shall
merge into or consolidate with another corporation or shall sell all or
substantially all of its or any of its successor corporation's property and
assets to any other corporation or corporations (any such corporation being
included within the meaning of the term "successor corporation"), the
Holder shall thereafter have the right to purchase, upon the basis and on
the terms and conditions and during the time specified in this Warrant in
lieu of the ordinary shares of the Company theretofore purchasable upon
the exercise of this Warrant, such shares, securities, or assets as may be
issued or payable with respect to, or in exchange for, the ordinary shares
of the Company theretofore purchasable upon the exercise of this Warrant
had such recapitalization, consolidation, merger, or conveyance not taken
place; and in any such event, the rights of the Holder to an adjustment in
the number of ordinary shares purchased upon the exercise of this Warrant
as herein provided shall continue and be preserved in respect of any
shares, securities, or assets which the Holder becomes entitled to
purchase.
(c) If the Company shall set a record date with respect to its ordinary
shares or shall propose to give notice to or take a vote of the holders
of its ordinary shares for any of the purposes set forth in paragraphs
(a) or (b) above, the Company shall give notice to the Holder at least
thirty (30) days prior to any such action to be taken. Such notice shall
specify the date or expected date, if any is to be fixed, as of which
holders of ordinary shares of record shall be entitled to participate in
any such action.
(d) In case the Company at any time while this Warrant remains unexpired
and unexercised shall sell all or substantially all of its property or
dissolve, liquidate, or wind-up its affairs, the Holder may thereafter
receive upon exercise hereof in lieu of each ordinary share of the Company
which it would have been entitled to receive, the same kind and amount of
any securities or assets which may be issuable, distributable, or payable
upon any such sale, dissolution, liquidation, or winding-up in respect of
each ordinary share of the Company.
SECTION 7. PAYMENT OF TAXES. The Company will pay any documentary stamp taxes
attributable to the initial issuance of ordinary shares issuable upon the
exercise of this Warrant; 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 issue or delivery of any ordinary
<PAGE>
share certificates in a name other than that of the Holder in respect of which
such shares are issued, and in such case the Company shall not be required to
issue or deliver any certificate for ordinary shares or any Warrant until the
person requesting the same has paid to the Company the amount of such tax or
has established to the Company's satisfaction that such tax has been paid or
that such person has an exemption from the payment of such tax.
SECTION 8. RESERVATION OF ORDINARY SHARES. There have been reserved, and the
Company shall at all times keep reserved out of the authorized and unissued
ordinary shares, a number of ordinary shares sufficient to provide for the
exercise of the rights of purchase represented by this Warrant. The Company
agrees that all ordinary shares issued upon exercise of this Warrant shall
be, at the time of delivery of the certificates of such shares, validly
issued and outstanding, fully paid and non assessable and listed on any
national securities exchange upon which the other ordinary shares of the
Company are then listed. All warrants surrendered in the exercise of the
rights thereby evidenced shall be canceled by the Company, and such canceled
warrants shall constitute sufficient evidence of the exercise of such
warrants. Promptly after the expiration of this Warrant, the Company shall
certify the total aggregate number of warrants then outstanding, and
thereafter no ordinary shares shall be subject to reservation in respect of
such Warrant which has expired.
SECTION 9. FRACTIONAL INTEREST. The Warrant may only be exercised to purchase
full ordinary shares and the Company shall not be required to issue fractions
of ordinary shares on the exercise of the Warrant. However, if the Holder
exercised all warrants then owned or record by him and such exercise would
result in the issuance of a fractional share, the Company will pay to the
Holder, in lieu of the issuance of any fractional share otherwise issuable,
an amount of cash based on the market value of the ordinary shares of the
Company on the last trading day prior to the exercise date.
SECTION 10. RESTRICTIONS ON TRANSFERABILITY. This Warrant shall not be
transferred, hypothecated or assigned before satisfaction of the conditions
specified in this Section 10, which conditions are intended to ensure
compliance with the provisions of the Securities Act with respect to the
transfer of any Warrant. The Holder, by acceptance of this Warrant, agrees to
be bound by the provisions of this Section 10.
(a) Except as otherwise provided in this Section 10, each Warrant shall
be stamped or otherwise imprinted with a legend in substantially the
following form:
"This Warrant and the securities represented hereby have not been
registered under the Securities Act of 1933, as amended, and may
not be transferred in violation of such Act, the rules and
regulations thereunder or the provisions of this Warrant."
<PAGE>
(b) Notwithstanding the foregoing provision of this Section 10, the
restrictions imposed by this Section 10 upon the transferability of
the Warrant and the legend requirements of the subsection (a) hereof
shall terminate as to any particular Warrant (i) when and so long as
such security shall have been effectively registered under the Securities
Act and disposed of pursuant thereto; or (ii) when the Company shall have
received an opinion of counsel reasonably satisfactory to it that such
securities may be transferred without registration thereof under the
Securities Act. Whenever the restrictions on this Warrant shall terminate,
as hereinabove provided, the Holder shall be entitled to receive from the
Company a new Warrant bearing the following legend in place of the
restrictive legend set forth hereon:
"THE RESTRICTIONS ON THE TRANSFERABILITY OF THE WITHIN WARRANT
CONTAINED IN SECTION 11 HEREOF TERMINATED ____________________,
______, AND ARE OF NO FURTHER FORCE AND EFFECT.
All warrants issued upon registration of transfer, division or combination
of, or in substitution for, any Warrant or Warrants entitled to bear such
legend shall have a similar legend endorsed thereon.
SECTION 11. NOTICES. Any notice pursuant to this Warrant to be given by the
Holder shall be sufficiently given if sent by registered mail, return receipt
requested, postage prepaid, addressed as follows:
Accent Software International Ltd.
28 Pierre Koenig Street
Jerusalem 91503 Israel
Attention: Robert Trachtenberg
Vice President & General Counsel
Any notice pursuant to this Agreement to be given by the Company to the
Holder shall be sufficiently given if sent by registered mail, return receipt
requested, postage prepaid, addressed as follows:
Robert J. Laikin
Brightpoint, Inc.
6402 Corporate Drive
Indianapolis, Indiana 46278
SECTION 12. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective
or inconsistent with
<PAGE>
any other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company may deem necessary
or desirable and which shall not be inconsistent with the provisions of the
Warrant and which shall not adversely affect the interest of the Holder.
SECTION 13. GOVERNING LAW AND JURISDICTION. This Warrant shall be deemed to
be a contract made under the laws of he State of New York and shall be
construed in accordance with the laws of State of New York applicable to
agreements to be performed wholly within State of New York. Any dispute
arising from this Warrant shall be resolved in the appropriate state or
federal court in New York County and the parties hereto consent to the
personal jurisdiction of such court.
SECTION 18. BENEFITS OF THIS WARRANT. Nothing in this Warrant shall be
construed to give to any person or corporation other than the Company and the
Holder any legal or equitable right, remedy or claim under this Warrant; but
this Warrant shall be for the sole and exclusive benefit of the Company and
the Holder. Notwithstanding the foregoing, this Warrant shall not entitle the
Holder to any rights as a shareholder of the Company.
SECTION 19. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Holder shall bind an inure to the
benefit of their respective successors and assigns hereunder.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date written below.
Dated: December 9, 1996
--------------------
ACCENT SOFTWARE INTERNATIONAL LTD.
By
-----------------------------------
Its
----------------------------------
Attest:
- ---------------------------------------
Secretary
<PAGE>
TO:
--------------------------------------------------
PURCHASE FORM -- To be executed by the Holder in Order to Exercise the
Warrant.
The undersigned hereby irrevocably elects to exercise the attached Warrant to
purchase for cash, ____________________ of the shares issuable upon the
exercise of such Warrant, and requests that certificates for such shares
shall be issued in the name of:
--------------------------------
Please insert social security (Name)
or other identifying number
or Holder of
certificate ( )
-------------------
--------------------------------
(Address)
--------------------------------
(Signature)
--------------------------------
(Signature)
<PAGE>
ASSIGNMENT FORM -- To be Executed By the Holder in Order to Transfer the
Warrant.
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
______ of the Warrants represented by the attached Warrant unto
_____________________________________________________________________ (Please
print or typewrite name and address including postal zip code OF ASSIGNEE)
(Social Security or other identifying number of assignee:
_____________________) and does irrevocably constitute and appoint
______________________________________________ attorney to transfer the
Warrant Certificate on the records of the Company with full power of
substitution in the premises.
Date: , 19 .
----------------------- ---
Signature(s)
---------------------------------
NOTICE -- The signature(s) to the Purchase Form or the Assignment Form
must correspond to the name as written upon the face of the
Warrant Certificate in every particular without alteration or
enlargement or any change whatsoever.
<PAGE>
EXHIBIT 5.1
YIGAL ARNON & CO.
31 Hillel Street
P.O. Box 69
Jerusalem 91006 Israel
Accent Software International Ltd.
28 Pierre Koenig Street
Jerusalem 91530 Israel
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
you with the Securities and Exchange Commission on or about October 15, 1997
(the "Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of up to 812,000 Ordinary Shares (the
"Shares"). All of the Shares are to be issued by the Company (a) as
compensation to Investor Resource Services, Inc. for certain services being
rendered to the Company and (b) upon exercise of warrants issued to other
parties providing services to the Company, and once issued may be offered for
sale for the benefit of the selling shareholders named in the Registration
Statement. We understand that the Shares are to be sold from time to time in
the over-the-counter market at prevailing prices or as otherwise described in
the Registration Statement. As your Israeli legal counsel, we have also
examined the proceedings taken by you in connection with the issuance of the
Shares.
It is our opinion that, subject in the case of the Shares to be issued
upon exercise of warrants to the fulfillment of the terms and conditions of
the exercise of the warrants, the Shares will be validly issued, fully paid
and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in
the Registration Statement, including the Prospectus constituting a part
thereof, and any amendments thereto.
Very truly yours,
YIGAL ARNON & CO.
/s/ Yigal Arnon & Co.
-----------------------------
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 of our report dated March 20, 1997, included in
Accent Software International Ltd. Form 10-K for the year ended December 31,
1996. It should be noted that we have not audited any financial statements
of the company subsequent to December 31, 1996, or performed any audit
procedures subsequent to the date of our report.
LUBOSHITZ, KASIERER & CO.
Member Firm of Andersen Worldwide SC.
/s/ Luboshitz, Lasierer & Co.
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Tel Aviv, Israel
October 15, 1997
<PAGE>
EXHIBIT 23.3
October 14, 1997
CONSENT OF LEGAL COUNSEL
Accent Software International Ltd
28 Peirre Koenig Street
Jerusalem 91530 Israel
Ladies and Gentlemen:
We consent to the use by Accent Software International Ltd (the
"Company") in the Company's Form S-3 Registration Statement to be filed on or
about October 15, 1997, of our name and the statement with respect to our
firm under the heading of "Legal Matters" in the Registration Statement.
Sincerely yours,
ROTHGERBER, APPEL, POWERS & JOHNSON LLP
/s/ Rothgerber, Appel, Powers & Johnson LLP
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