<PAGE>
Exhibit 1.1
EXECUTION COPY
3,609,000 Shares
Color Kinetics Incorporated
Common Stock
($0.001 Par Value)
EQUITY UNDERWRITING AGREEMENT
November 9, 2006
Deutsche Bank Securities Inc.
CIBC World Markets Corp.
ThinkEquity Partners LLC
Canaccord Adams Inc.
As Representatives of the
Several
Underwriters
c/o Deutsche Bank Securities Inc.
60 Wall Street, 4th Floor
New York, New York 10005
Ladies and Gentlemen:
Color Kinetics Incorporated, a Delaware corporation (the
"Company"), and
certain stockholders of the Company (collectively the "Selling
Stockholders" and
when referenced without Cree, Inc., the "Affiliated Selling
Stockholders")
propose to sell to the several underwriters (the "Underwriters")
named in
Schedule I hereto for whom you are acting as representatives
(the
"Representatives") an aggregate of 3,609,000 shares (the "Firm
Shares") of the
Company's common stock, $0.001 par value (the "Common Stock"), of
which
2,000,000 shares will be sold by the Company and 1,609,000 shares
will be sold
by the Selling Stockholders. The respective amounts of the Firm
Shares to be so
purchased by the several Underwriters are set forth opposite their
names in
Schedule I hereto, and the respective amounts to be sold by the
Selling
Stockholders are set forth opposite their names in Schedule II
hereto. The
Company and the Selling Stockholders are sometimes referred to
herein
collectively as the "Sellers." Certain of the Selling Stockholders
also propose
to sell at the Underwriters' option an aggregate of up to 541,350
additional
shares of the Company's Common Stock (the "Option Shares") as set
forth below.
1
<PAGE>
EXECUTION COPY
As
the Representatives, you have advised the Company and the
Selling
Stockholders (a) that you are authorized to enter into this
Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters
are willing,
acting severally and not jointly, to purchase the numbers of Firm
Shares set
forth opposite their respective names in Schedule I, plus their pro
rata portion
of the Option Shares if you elect to exercise the over-allotment
option in whole
or in part for the accounts of the several Underwriters. The Firm
Shares and the
Option Shares (to the extent the aforementioned option is
exercised) are herein
collectively called the "Shares."
In
consideration of the mutual agreements contained herein and of
the
interests of the parties in the transactions contemplated hereby,
the parties
hereto agree as follows:
1.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS.
(a) The Company represents and warrants to each of the Underwriters
as
follows:
(i) A registration statement on Form S-3 (File No. 333-138002)
with respect to the Shares has been prepared by the Company in
conformity with
the requirements of the Securities Act of 1933, as amended (the
"Act"), and the
rules and regulations (the "Rules and Regulations") of the
Securities and
Exchange Commission (the "Commission") thereunder and has been
filed with the
Commission. The Company and the transactions contemplated by this
Agreement meet
the requirements and comply with the conditions for the use of Form
S-3. Copies
of such registration statement, including any amendments thereto,
the
preliminary prospectuses (meeting the requirements of the Rules and
Regulations)
contained therein and the exhibits, financial statements and
schedules, as
finally amended and revised, have heretofore been delivered by the
Company to
you. Such registration statement, together with any registration
statement filed
by the Company pursuant to Rule 462(b) under the Act, is herein
referred to as
the "Registration Statement," which shall be deemed to include all
information
omitted therefrom in reliance upon Rules 430A, 430B or 430C under
the Act and
contained in the Prospectus referred to below, has become effective
under the
Act and no post-effective amendment to the Registration Statement
has been filed
as of the date of this Agreement. "Prospectus" means the final form
of
prospectus filed with the Commission after the date hereof pursuant
to and
within the time limits described in Rule 424(b) under the Act. Each
preliminary
prospectus included in the Registration Statement prior to the time
it becomes
effective and each form of prospectus that is not the Prospectus
and that is
filed with the Commission pursuant to and within the time limits
described in
Rule 424(b) under the Act is herein referred to as a "Preliminary
Prospectus."
Any reference herein to the Registration Statement, any Preliminary
Prospectus
or to the Prospectus or to any amendment or supplement to any of
the foregoing
documents shall be deemed to refer to and include any documents
incorporated by
reference therein, and, in the case of any reference herein to any
Preliminary
Prospectus or to the Prospectus, also shall be deemed to include
any documents
incorporated by reference therein, and any supplements or
amendments thereto,
filed by the Company with the Commission after the date of filing
of the
Prospectus under Rule 424(b) under the Act, and prior to the
termination of the
offering of the Shares by the Underwriters.
2
<PAGE>
EXECUTION COPY
(ii) As of the Applicable Time (as defined below) and as of the
Closing Date or the Option Closing Date, as the case may be,
neither (i) the
General Use Free Writing Prospectus(es) (as defined below) issued
at or prior to
the Applicable Time and the Statutory Prospectus (as defined below)
and the
information included on Schedule IV, all considered together
(collectively, the
"General Disclosure Package"), nor (ii) any individual Limited Use
Free Writing
Prospectus (as defined below), when considered together with the
General
Disclosure Package, included or will include any untrue statement
of a material
fact or omitted or will omit to state a material fact necessary in
order to make
the statements therein, in the light of the circumstances under
which they were
made, not misleading; provided, however, that the Company makes
no
representations or warranties as to information contained in or
omitted from any
Preliminary Prospectus, the Statutory Prospectus or any Issuer Free
Writing
Prospectus, in reliance upon, and in conformity with, written
information
furnished to the Company by or on behalf of any Underwriter through
the
Representatives, specifically for use therein, it being understood
and agreed
that the only such information is that described in Section 13
herein. As used
in this subsection and elsewhere in this Agreement:
"Applicable Time" means 8 a.m. (New York time) on November 10, 2006
or such
other time as agreed to by the Company and the Representatives.
"Statutory Prospectus" as of any time means the Preliminary
Prospectus
relating to the Shares that is included in the Registration
Statement or filed
with the Commission pursuant to Rule 424(b) immediately prior to
that time,
including any document incorporated by reference therein.
"Issuer Free Writing Prospectus" means any "issuer free writing
prospectus," as defined in Rule 433 under the Act, relating to the
Shares in the
form filed or required to be filed with the Commission or, if not
required to be
filed, in the form retained in the Company's records pursuant to
Rule 433(g)
under the Act.
"General Use Free Writing Prospectus" means any Issuer Free
Writing
Prospectus that is identified on Schedule V to this Agreement.
"Limited Use Free Writing Prospectus" means any Issuer Free
Writing
Prospectus that is not a General Use Free Writing Prospectus.
(iii) The Company has been duly organized and is validly
existing
as a corporation in good standing under the laws of the State of
Delaware, with
corporate power and authority to own or lease its properties and
conduct its
business as described in the Registration Statement, the General
Disclosure
Package and the Prospectus. Each of the subsidiaries of the Company
as listed in
Exhibit 21.1 to the Company's Annual Report on Form 10-K for the
year ended
December 31, 2005 (collectively, the "Subsidiaries") has been duly
organized and
is validly existing as a corporation in good standing under the
laws of the
jurisdiction of its incorporation, with corporate power and
authority to own or
lease its properties and conduct its business as described in
3
<PAGE>
EXECUTION COPY
the Registration Statement, the General Disclosure Package and the
Prospectus.
The Subsidiaries are the only subsidiaries, direct or indirect, of
the Company.
The Company and each of the Subsidiaries are duly qualified to
transact business
in all jurisdictions in which the conduct of their business
requires such
qualification, except for such failures to be so qualified as could
not
reasonably be expected to have a Material Adverse Effect. The
outstanding shares
of capital stock of each of the Subsidiaries have been duly
authorized and
validly issued, are fully paid and non-assessable and are owned by
the Company
or another Subsidiary free and clear of all liens, encumbrances and
equities and
claims; and no options, warrants or other rights to purchase,
agreements or
other obligations to issue or other rights to convert any
obligations into
shares of capital stock or ownership interests in the Subsidiaries
are
outstanding.
(iv) The outstanding shares of Common Stock of the Company,
including all shares to be sold by the Selling Stockholders, have
been duly
authorized and are, or, in the case of any such shares to be issued
to any such
Selling Stockholder upon the exercise of any warrant or stock
option, at the
time of such sale by the Selling Stockholder will be, validly
issued and are
fully paid and non-assessable; the Shares to be issued and sold by
the Company
have been duly authorized and when issued and paid for as
contemplated herein
will be validly issued, fully paid and non-assessable; and no
preemptive rights
of stockholders exist with respect to any of the Shares or the
issue and sale
thereof. Neither the filing of the Registration Statement nor the
offering or
sale of the Shares as contemplated by this Agreement gives rise to
any rights,
other than those which have been waived or satisfied, for or
relating to the
registration of any shares of Common Stock.
(v) The information set forth under the caption
"Capitalization"
in the Registration Statement and the Prospectus (and any similar
section or
information contained in the General Disclosure Package) is true
and correct.
All of the Shares conform to the description thereof contained in
the
Registration Statement, the General Disclosure Package and the
Prospectus. The
form of certificates for the Shares conforms to the corporate law
of the
jurisdiction of the Company's incorporation and to any requirements
of the
Company's organizational documents. Subsequent to the respective
dates as of
which information is given in the Registration Statement, the
General Disclosure
Package and the Prospectus, except as otherwise specifically stated
therein or
in this Agreement, the Company has not: (i) issued any securities,
other than
upon the exercise, in accordance with their terms, of warrants or
options to
purchase Common Stock or other rights to purchase Common Stock that
were
outstanding at or before the date hereof, or incurred any liability
or
obligation, direct or contingent, for borrowed money; or (ii)
declared or paid
any dividend or made any other distribution on or in respect to its
capital
stock.
(vi)
The Commission has not issued an order preventing or
suspending the use of any Preliminary Prospectus, any Issuer Free
Writing
Prospectus or the Prospectus relating to the proposed offering of
the Shares,
and no proceeding for that purpose or pursuant to Section 8A of the
Act has been
instituted or, to the Company's knowledge, threatened by the
Commission. The
Registration Statement contains, and the Prospectus and any
amendments or
supplements thereto will contain, all statements which are required
to be stated
therein by, and will conform to, the requirements of the Act and
the Rules and
Regulations. The documents incorporated, or to be
4
<PAGE>
EXECUTION COPY
incorporated, by reference in the Prospectus, at the time filed
with the
Commission conformed or will conform, in all respects to the
requirements of the
Securities Exchange Act of 1934 ("Exchange Act") or the Act, as
applicable, and
the rules and regulations of the Commission thereunder. The
Registration
Statement and any amendment thereto do not contain, and will not
contain, any
untrue statement of a material fact and do not omit, and will not
omit, to state
a material fact required to be stated therein or necessary to make
the
statements therein not misleading. The Prospectus and any
amendments and
supplements thereto do not contain, and will not contain, any
untrue statement
of a material fact; and do not omit, and will not omit, to state a
material fact
necessary in order to make the statements therein, in the light of
the
circumstances under which they were made, not misleading; provided,
however,
that the Company makes no representations or warranties as to
information
contained in or omitted from the Registration Statement or the
Prospectus, or
any such amendment or supplement, in reliance upon, and in
conformity with,
written information furnished to the Company by or on behalf of any
Underwriter
through the Representatives, specifically for use therein, it being
understood
and agreed that the only such information is that described in
Section 13
herein.
(vii) Each Issuer Free Writing Prospectus, as of its issue date
and at all subsequent times through the completion of the public
offer and sale
of the Shares or until any earlier date that the Company notified
or notifies
the Representatives, did not, does not and will not include any
information that
conflicted, conflicts or will conflict with the information
contained in the
Registration Statement or the Prospectus, including any document
incorporated by
reference therein that has not been superseded or modified.
(viii) The Company has not, directly or indirectly, distributed
and will not distribute any offering material in connection with
the offering
and sale of the Shares other than any Preliminary Prospectus, the
Prospectus and
other materials, if any, permitted under the Act and consistent
with Section
4(a)(ii) below. The Company will file with the Commission all
Issuer Free
Writing Prospectuses required to be filed in the time required
under Rule 433(d)
under the Act. The Company has satisfied or will satisfy the
conditions in Rule
433 under the Act to avoid a requirement to file with the
Commission any
electronic road show.
(ix) (i) At the time of filing the Registration Statement and
(ii) as of the date hereof (with such date being used as the
determination date
for purposes of this clause (ii)), the Company was not and is not
an "ineligible
issuer" (as defined in Rule 405 under the Act, without taking into
account any
determination by the Commission pursuant to Rule 405 under the Act
that it is
not necessary that the Company be considered an ineligible issuer),
including,
without limitation, for purposes of Rules 164 and 433 under the Act
with respect
to the offering of the Shares as contemplated by the Registration
Statement.
(x) The consolidated financial statements of the Company and
the
Subsidiaries, together with related notes and schedules,
incorporated by
reference in the Registration Statement, the General Disclosure
Package and the
Prospectus, present fairly the financial position and the results
of operations
and cash flows of the Company and the consolidated Subsidiaries, at
the
5
<PAGE>
EXECUTION COPY
indicated dates and for the indicated periods. Such financial
statements and
related schedules have been prepared in accordance with generally
accepted
principles of accounting in the United States ("GAAP"),
consistently applied
throughout the periods involved, except as disclosed therein, and
all
adjustments necessary for a fair presentation of results for such
periods have
been made. The summary and selected consolidated financial and
statistical data
included in the Registration Statement, the General Disclosure
Package and the
Prospectus presents fairly the information shown therein and such
data has been
compiled on a basis consistent with the financial statements
incorporated by
reference therein and the books and records of the Company. The
Company and the
Subsidiaries do not have any material liabilities or obligations,
direct or
contingent (including any off-balance sheet obligations or any
"variable
interest entities" within the meaning of Financial Accounting
Standards Board
Interpretation No. 46), not disclosed in the Registration
Statement, the General
Disclosure Package and the Prospectus. There are no financial
statements
(historical or pro forma) that are required to be included in the
Registration
Statement, the General Disclosure Package or the Prospectus that
are not
included as required.
(xi) Deloitte & Touche LLP, who have certified certain of
the
financial statements filed with the Commission and incorporated by
reference in
the Registration Statement, the General Disclosure Package and the
Prospectus,
is an independent registered public accounting firm with respect to
the Company
and the Subsidiaries within the meaning of the Act and the
applicable Rules and
Regulations and the Public Company Accounting Oversight Board
(United States)
(the "PCAOB").
(xii) Except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus, neither the Company
nor any of
the Subsidiaries is aware of (i) any material weakness in its
internal control
over financial reporting or (ii) any change in internal control
over financial
reporting that has materially affected, or is reasonably likely to
materially
affect, the Company's internal control over financial
reporting.
(xiii) Solely to the extent that the Sarbanes-Oxley Act of
2002,
as amended, and the rules and regulations promulgated by the
Commission and the
Nasdaq Global Market thereunder (the "Sarbanes-Oxley Act") has been
applicable
to the Company, there is and has been no failure on the part of the
Company to
comply in all material respects with any provision of the
Sarbanes-Oxley Act.
The Company has taken all necessary actions to ensure that it is in
compliance
in all material respects with all provisions of the Sarbanes-Oxley
Act that are
in effect and with which the Company is required to comply.
(xiv) There is no action, suit, claim or proceeding pending or,
to the knowledge of the Company, threatened against the Company or
any of the
Subsidiaries before any court or administrative agency or otherwise
which if
determined adversely to the Company or any of the Subsidiaries
would either (i)
have, individually or in the aggregate, a material adverse effect
on the
earnings, business, management, properties, assets, rights,
operations or
condition (financial or otherwise) or prospects of the Company and
of the
Subsidiaries taken as a whole or (ii) prevent the consummation of
the
transactions contemplated hereby (the occurrence of any such effect
or any
6
<PAGE>
EXECUTION COPY
such prevention described in the foregoing clauses (i) and (ii)
being referred
to as a "Material Adverse Effect"), except as set forth in the
Registration
Statement, the General Disclosure Package and the Prospectus.
(xv) The Company and the Subsidiaries have good and marketable
title to all of the personal property owned by them and reflected
in the
consolidated financial statements hereinabove described or
described in the
Registration Statement, the General Disclosure Package and the
Prospectus,
subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except
those reflected in such financial statements or described in the
Registration
Statement, the General Disclosure Package and the Prospectus or
which do not
materially affect the value or interfere with the use thereof. The
Company and
the Subsidiaries occupy their leased properties under valid and
binding leases
conforming in all material respects to the description thereof set
forth in the
Registration Statement, the General Disclosure Package and the
Prospectus, with
such exceptions as do not materially interfere with the use by the
Company or
the Subsidiaries thereof.
(xvi) The Company and the Subsidiaries have filed all Federal,
State, local and foreign tax returns which have been required to be
filed,
subject to any permitted extensions, and have paid all taxes
indicated by such
returns and all assessments received by them or any of them to the
extent that
such taxes have become due and are not being contested in good
faith and for
which an adequate reserve for accrual has been established in
accordance with
GAAP. All tax liabilities have been adequately provided for in the
financial
statements of the Company, and the Company does not know of any
actual or
proposed additional material tax assessments.
(xvii) Since the respective dates as of which information is
given in the Registration Statement, the General Disclosure Package
and the
Prospectus, as each may be amended or supplemented, there has not
been any
material adverse change or any development involving a prospective
material
adverse change in or affecting the earnings, business, management,
properties,
assets, rights, operations or condition (financial or otherwise),
or prospects
of the Company and the Subsidiaries taken as a whole, whether or
not occurring
in the ordinary course of business, and there has not been any
material
transaction entered into or any material transaction that is
probable of being
entered into by the Company or the Subsidiaries, other than
transactions in the
ordinary course of business and changes and transactions described
in the
Registration Statement, the General Disclosure Package and the
Prospectus, as
each may be amended or supplemented. The Company and the
Subsidiaries have no
material contingent obligations which are not disclosed in the
Company's
financial statements which are incorporated by reference in the
Registration
Statement, the General Disclosure Package and the Prospectus.
(xviii) Neither the Company nor any of the Subsidiaries is or
with the giving of notice or lapse of time or both, will be, (i) in
violation of
its certificate of incorporation, by-laws, certificate of
formation, limited
liability agreement, partnership agreement or other organizational
documents or
(ii) in violation of or in default under any agreement, lease,
contract,
indenture or other instrument or obligation to which it is a party
or by which
it, or any of its properties, is bound and, solely with respect to
this clause
(ii), which violation or default would have a Material Adverse
7
<PAGE>
EXECUTION COPY
Effect. The execution and delivery of this Agreement and the
consummation of the
transactions herein contemplated and the fulfillment of the terms
hereof will
not conflict with or result in a breach of any of the terms or
provisions of, or
constitute a default under, any indenture, mortgage, deed of trust
or other
agreement or instrument to which the Company or any Subsidiary is a
party or by
which the Company or any Subsidiary or any of their respective
properties is
bound, or of the certificate of incorporation or by-laws of the
Company or any
law, order, rule or regulation judgment, order, writ or decree
applicable to the
Company or any Subsidiary of any court or of any government,
regulatory body or
administrative agency or other governmental body having
jurisdiction over the
Company or any Subsidiary or any of their respective
properties.
(xix) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement has been duly and
validly
authorized by all necessary corporate action on the part of the
Company, and
this Agreement has been duly executed and delivered by the
Company.
(xx) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other
governmental body necessary in connection with the execution and
delivery by the
Company of this Agreement and the consummation of the transactions
herein
contemplated (except such additional steps as may be required by
the Commission,
the National Association of Securities Dealers, Inc. (the "NASD")
or such
additional steps as may be necessary to qualify the Shares for
public offering
by the Underwriters under state securities or Blue Sky laws) has
been obtained
or made and is in full force and effect.
(xxi) The Company and each of the Subsidiaries hold all
material
licenses, certificates and permits from governmental authorities
which are
necessary to the conduct of their businesses; the Company and the
Subsidiaries
each own or possess the right to use all patents, patent rights,
trademarks,
trade names, service marks, service names, copyrights, license
rights, know-how
(including trade secrets and other unpatented and unpatentable
proprietary or
confidential information, systems or procedures) and other
intellectual property
rights ("Intellectual Property") necessary to carry on their
business in all
material respects; neither the Company nor any of the Subsidiaries
has infringed
any Intellectual Property of any other person or entity, which
infringement the
Company believes could reasonably be expected to have a Material
Adverse Effect.
The Company has taken all reasonable steps necessary to secure
interests in such
Intellectual Property from its contractors. There are no
outstanding options,
licenses or agreements of any kind relating to the Intellectual
Property of the
Company that are required to be described in the Registration
Statement, the
General Disclosure Package and the Prospectus and are not described
in all
material respects. The Company is not a party to or bound by any
options,
licenses or agreements with respect to the Intellectual Property of
any other
person or entity that are required to be set forth in the
Prospectus and are not
described in all material respects. None of the technology employed
by the
Company has been obtained or is being used by the Company in
violation of any
contractual obligation binding on the Company or, to the knowledge
of the
Company, on any of its officers, directors or employees or
otherwise in
violation of the rights of any persons; except as set forth in the
Registration
Statement, the General Disclosure Package and the Prospectus, the
Company has
8
<PAGE>
EXECUTION COPY
not received any written or oral communications alleging that the
Company has
violated, infringed or conflicted with, or, by conducting its
business as set
forth in the Registration Statement, the General Disclosure Package
and the
Prospectus, would violate, infringe or conflict with, any of the
Intellectual
Property of any other person or entity that the Company believes
could
reasonably be expected to have a Material Adverse Effect.
(xxii) Neither the Company, nor to the Company's knowledge, any
of its affiliates, has taken or may take, directly or indirectly,
any action
designed to cause or result in, or which has constituted or which
might
reasonably be expected to constitute, the stabilization or
manipulation of the
price of the shares of Common Stock to facilitate the sale or
resale of the
Shares. The Company acknowledges that the Underwriters may engage
in passive
market making transactions in the Shares on the Nasdaq Global
Market in
accordance with Regulation M under the Exchange Act.
(xxiii) Neither the Company nor any Subsidiary is or, after
giving effect to the offering and sale of the Shares contemplated
hereunder and
the application of the net proceeds from such sale as described in
the
Registration Statement, General Disclosure Package and the
Prospectus, will be
an "investment company" within the meaning of such term under the
Investment
Company Act of 1940 as amended (the "1940 Act"), and the rules and
regulations
of the Commission thereunder.
(xxiv) The Company and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide
reasonable
assurances that (i) transactions are executed in accordance with
management's
general or specific authorization; (ii) transactions are recorded
as necessary
to permit preparation of financial statements in conformity with
GAAP and to
maintain accountability for assets; (iii) access to assets is
permitted only in
accordance with management's general or specific authorization; and
(iv) the
recorded accountability for assets is compared with existing assets
at
reasonable intervals and appropriate action is taken with respect
to any
differences.
(xxv) The Company has established and maintains "disclosure
controls and procedures" (as defined in Rules 13a-14(c) and
15d-14(c) under the
Exchange Act); the Company's "disclosure controls and procedures"
are reasonably
designed to ensure that all information (both financial and
non-financial)
required to be disclosed by the Company in the reports that it
files or submits
under the Exchange Act is recorded, processed, summarized and
reported within
the time periods specified in the rules and regulations of the
Exchange Act, and
that all such information is accumulated and communicated to the
Company's
management as appropriate to allow timely decisions regarding
required
disclosure and to make the certifications of the Chief Executive
Officer and
Chief Financial Officer of the Company required under the Exchange
Act with
respect to such reports.
(xxvi) The statistical, industry-related and market-related
data
included in the Registration Statement, the General Disclosure
Package and the
Prospectus are based on or derived
9
<PAGE>
EXECUTION COPY
from sources which the Company reasonably and in good faith
believes are
reliable and accurate, and such data agree with the sources from
which they are
derived.
(xxvii) The operations of the Company and its subsidiaries are
and have been conducted at all times in compliance with applicable
financial
record-keeping and reporting requirements of the Currency and
Foreign
Transactions Reporting Act of 1970, as amended, applicable money
laundering
statutes and applicable rules and regulations thereunder
(collectively, the
"Money Laundering Laws"), and no action, suit or proceeding by or
before any
court or governmental agency, authority or body or any arbitrator
involving the
Company or any or its subsidiaries with respect to the Money
Laundering Laws is
pending or, to the Company's knowledge, threatened.
(xxviii) Neither the Company nor, to the Company's knowledge,
any
director, officer, agent, employee or affiliate of the Company is
currently
subject to any U.S. sanctions administered by the Office of Foreign
Assets
Control of the U.S. Treasury Department ("OFAC"); and the Company
will not
directly or indirectly use the proceeds of the offering, or lend,
contribute or
otherwise make available such proceeds to any subsidiary, joint
venture partner
or other person or entity, for the purpose of financing the
activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(xxix) The Company and each of the Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as
are reasonable
for the conduct of their respective businesses and the value of
their respective
properties and as is customary for companies engaged in similar
businesses.
(xxx) The Company and each Subsidiary is in compliance in all
material respects with all presently applicable provisions of the
Employee
Retirement Income Security Act of 1974, as amended, including the
regulations
and published interpretations thereunder ("ERISA"); no "reportable
event" (as
defined in ERISA) has occurred with respect to any "pension plan"
(as defined in
ERISA) for which the Company and each Subsidiary would have any
liability; the
Company and each Subsidiary has not incurred and does not expect to
incur
liability under (i) Title IV of ERISA with respect to termination
of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal
Revenue Code of 1986, as amended, including the regulations and
published
interpretations thereunder (the "Code"); and each "pension plan"
for which the
Company or any Subsidiary would have any liability that is intended
to be
qualified under Section 401(a) of the Code is so qualified in all
material
respects and nothing has occurred, whether by action or by failure
to act, which
would cause the loss of such qualification.
(xxxi) To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the
Company's officers,
directors or 5% or greater securityholders, except as set forth in
the
Registration Statement.
10
<PAGE>
EXECUTION COPY
(xxxii) Neither the Company nor any of the Subsidiaries is in
violation of any statute, rule, regulation, decision or order of
any
governmental agency or body or any court, domestic or foreign,
relating to the
use, disposal or release of hazardous or toxic substances or
relating to the
protection or restoration of the environment or human exposure to
hazardous or
toxic substances (collectively, "environmental laws"), owns or
operates any real
property contaminated with any substance that is subject to
environmental laws,
is liable for any off-site disposal or contamination pursuant to
any
environmental laws, or is subject to any claim relating to any
environmental
laws, which violation, contamination, liability or claim would,
individually or
in the aggregate, have a Material Adverse Effect; and the Company
is not aware
of any pending investigation which could reasonably be expected to
lead to such
a claim.
(xxxiii) The Shares have been approved for listing subject to
notice of issuance on the Nasdaq Global Market.
(xxxiv) There are no relationships or related-party
transactions
involving the Company or any of the Subsidiaries or any other
person required to
be described in the Prospectus which have not been described as
required.
(xxxv) Neither the Company nor any of the Subsidiaries has made
any contribution or other payment to any official of, or candidate
for, any
federal, state or foreign office in violation of any law which
violation is
required to be disclosed in the Prospectus.
(xxxvi) None of the information on (or hyperlinked from) the
Company's website at www.colorkinetics.com includes or constitutes
a "free
writing prospectus" as defined in Rule 405 under the Act and the
Company does
not maintain or support any website other than
www.colorkinetics.com.
(xxxvii) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company,
from making
any other distribution on such Subsidiary's capital stock, from
repaying to the
Company any loans or advances to such subsidiary from the Company
or from
transferring any of such Subsidiary's property or assets to the
Company or any
other Subsidiary of the Company.
(xxxviii) Neither the Company nor any of its Subsidiaries nor,
to
the Company's knowledge, any director, officer, agent, employee or
affiliate of
the Company or any of its Subsidiaries is aware of or has taken any
action,
directly or indirectly, that would result in a violation by such
Persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations
thereunder (the "FCPA"), including, without limitation, making use
of the mails
or any means or instrumentality of interstate commerce corruptly in
furtherance
of an offer, payment, promise to pay or authorization of the
payment of any
money, or other property, gift, promise to give, or authorization
of the giving
of anything of value to any "foreign official" (as such term is
defined in the
FCPA) or any foreign political party or official thereof or any
candidate for
foreign political office, in contravention of the FCPA and the
Company, its
subsidiaries and its affiliates
11
<PAGE>
EXECUTION COPY
have conducted their businesses in compliance with the FCPA and
have instituted
and maintain policies and procedures designed to ensure, and which
are
reasonably expected to continue to ensure, continued compliance
therewith.
(b) Each of the Selling Stockholders, including Cree, Inc.
("Cree")
and the Affiliated Selling Stockholders except as specifically set
forth below,
severally represents and warrants to each of the Underwriters as
follows:
(i) Such Selling Stockholder now has and at the Closing Date
and
the Option Closing Date, as the case may be (as such dates are
hereinafter
defined) will have (1) good and marketable title to the Firm Shares
and the
Option Shares, if any, to be sold by such Selling Stockholder, free
and clear of
any liens, encumbrances, equities and claims, and (2) full right,
power and
authority to effect the sale and delivery of such Firm Shares and
Option Shares;
and upon the delivery of, against payment for, such Firm Shares and
Option
Shares pursuant to this Agreement, the Underwriters will acquire
good and
marketable title thereto, free and clear of any liens,
encumbrances, equities
and claims.
(ii) Such Selling Stockholder has full right, power and
authority
to execute and deliver this Agreement, the Power of Attorney and
the Custodian
Agreement referred to below and to perform its obligations under
such
Agreements. This Agreement has been duly authorized, executed and
delivered by
or on behalf of such Selling Stockholder. Each of the Power of
Attorney and the
Custodian Agreement has been duly authorized, executed and
delivered by or on
behalf of such Selling Stockholder and is a valid and binding
agreement of such
Selling Stockholder, enforceable against such Selling Stockholder
in accordance
with its terms. The execution and delivery of this Agreement and
the
consummation by such Selling Stockholder of the transactions herein
contemplated
and the fulfillment by such Selling Stockholder of the terms hereof
will not
require any consent, approval, authorization, or other order of any
court,
regulatory body, administrative agency or other governmental body
(except as may
be required under the Act, state securities laws or Blue Sky laws)
and will not
result in a breach of any of the terms and provisions of, or
constitute a
default under, organizational documents of such Selling
Stockholder, if not an
individual, or any indenture, mortgage, deed of trust or other
agreement or
instrument to which such Selling Stockholder is a party, or of any
order, rule
or regulation applicable to such Selling Stockholder of any court
or of any
regulatory body or administrative agency or other governmental body
having
jurisdiction, except to the extent such contravention, breach or
default would
not be material to such Selling Stockholder or prevent the
consummation of the
transactions contemplated hereby.
(iii) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to, or which has
constituted, or
which might reasonably be expected to cause or result in the
stabilization or
manipulation of the price of the Common Stock of the Company and,
other than as
permitted by the Act, the Selling Stockholder will not distribute
any prospectus
or other offering material in connection with the offering of the
Shares.
12
<PAGE>
EXECUTION COPY
(iv) Without having undertaken to determine independently the
accuracy or completeness of either the representations and
warranties of the
Company contained herein or the information contained in the
Registration
Statement, the General Disclosure Package and the Prospectus, such
Affiliated
Selling Stockholder has no reason to believe that the
representations and
warranties of the Company contained in this Section 1 are not true
and correct,
is familiar with the Registration Statement, the General Disclosure
Package and
the Prospectus and has no knowledge that any of them contains an
untrue
statement of a material fact or omits to state a material fact
necessary in
order to make the statements therein, in the light of the
circumstances under
which they were made, not misleading; and the sale of the Firm
Shares and the
Option Shares by such Affiliated Selling Stockholder pursuant
hereto is not
prompted by any information concerning the Company or any of the
Subsidiaries
which is not set forth in the Registration Statement, the General
Disclosure
Package and the Prospectus or the documents incorporated by
reference therein.
The information pertaining to such Selling Stockholder under the
caption
"Selling Stockholders" in the Registration Statement and the
Prospectus (and any
similar section or information contained in the General Disclosure
Package) is
complete and accurate in all material respects.
(v) No consent, approval or waiver is required under any
instrument or agreement to which such Selling Stockholder is a
party or by which
such Selling Stockholder is bound or under which he, she or it is
entitled to
any right or benefit, in connection with the offering, sale or
purchase by the
Underwriters of any of the Shares which may be sold by such Selling
Stockholder
under this Agreement or the consummation by such Selling
Stockholder of any of
the other transactions contemplated hereby.
(vi) There are no affiliations or associations between any
member
of the NASD and such Selling Stockholder or any affiliate of such
Selling
Stockholder, except as set forth in the Registration Statement.
2.
PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and
covenants
herein contained, and subject to the conditions herein set forth,
the Sellers
agree to sell to the Underwriters and each Underwriter agrees,
severally and not
jointly, to purchase, at a price of $17.955 per share, the number
of Firm Shares
set forth opposite the name of each Underwriter in Schedule I
hereof, subject to
adjustments in accordance with Section 9 hereof. The number of Firm
Shares to be
purchased by each Underwriter from each Seller shall be as nearly
as practicable
in the same proportion to the total number of Firm Shares being
sold by each
Seller as the number of Firm Shares being purchased by each
Underwriter bears to
the total number of Firm Shares to be sold hereunder. The
obligations of the
Company and of each of the Selling Stockholders shall be several
and not joint.
(b) Certificates in negotiable form for the total number of the
Shares
to be sold hereunder by the Selling Stockholders have been placed
in custody
with the Company as custodian (the "Custodian") pursuant to the
Custody
Agreement (the "Custodian Agreement") executed by
13
<PAGE>
EXECUTION COPY
each Selling Stockholder for delivery of all Firm Shares and any
Option Shares
to be sold hereunder by the Selling Stockholders. Each of the
Selling
Stockholders specifically agrees that the Firm Shares and any
Option Shares
represented by the certificates held in custody for the Selling
Stockholders
under the Custodian Agreement are subject to the interests of the
Underwriters
hereunder, that the arrangements made by the Selling Stockholders
for such
custody are to that extent irrevocable, and that the obligations of
the Selling
Stockholders hereunder shall not be terminable by any act or deed
of the Selling
Stockholders (or by any other person, firm or corporation including
the Company,
the Custodian or the Underwriters) or by operation of law
(including the death
of an individual Selling Stockholder or the dissolution of a
corporate Selling
Stockholder) or by the occurrence of any other event or events,
except as set
forth in the Custodian Agreement. If any such event should occur
prior to the
delivery to the Underwriters of the Firm Shares or the Option
Shares hereunder,
certificates for the Firm Shares or the Options Shares, as the case
may be,
shall be delivered by the Custodian in accordance with the terms
and conditions
of this Agreement as if such event has not occurred. The Custodian
is authorized
to receive and acknowledge receipt of the proceeds of sale of the
Shares held by
it against delivery of such Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be made
in
Federal (same day) funds to an account designated by the Company
for the shares
to be sold by it and to an account designated by the Custodian for
the shares to
be sold by the Selling Stockholders, in each case against delivery
of
certificates therefor to the Representatives for the several
accounts of the
Underwriters. Such payment and delivery are to be made through the
facilities of
The Depository Trust Company at 10:00 a.m., New York time, on the
third business
day after the date of this Agreement or at such other time and date
not later
than five business days thereafter as you and the Company shall
agree upon, such
time and date being herein referred to as the "Closing Date." (As
used herein,
"business day" means a day on which the New York Stock Exchange is
open for
trading and on which banks in New York are open for business and
not permitted
by law or executive order to be closed.)
(d) In addition, on the basis of the representations and
warranties
herein contained and subject to the terms and conditions herein set
forth, the
Selling Stockholders listed on Schedule III hereto hereby grant an
option to the
several Underwriters to purchase the Option Shares at the price per
share as set
forth in the first paragraph of this Section 2. The maximum number
of Option
Shares to be sold by the Selling Stockholders is set forth opposite
their
respective names on Schedule III hereto. The option granted hereby
may be
exercised in whole or in part by giving written notice (i) at any
time before
the Closing Date and (ii) at any time, from time to time thereafter
within 30
days after the date of this Agreement, by you, as Representatives
of the several
Underwriters, to the Company, the Attorney-in-Fact, and the
Custodian setting
forth the number of Option Shares as to which the several
Underwriters are
exercising the option and the time and date at which such
certificates are to be
delivered. If the option granted hereby is exercised in part, the
respective
number of Option Shares to be sold by each of the Selling
Stockholders listed in
Schedule III hereto shall be allocated between them in the order of
priority set
forth on Schedule III hereto. The time and date at which
certificates for Option
Shares are to be delivered shall be determined by the
Representatives but shall
not be earlier than three nor later than 10 full business days
after the
14
<PAGE>
EXECUTION COPY
exercise of such option, nor in any event prior to the Closing Date
(such time
and date being herein referred to as the "Option Closing Date"). If
the date of
exercise of the option is three or more days before the Closing
Date, the notice
of exercise shall set the Closing Date as the Option Closing Date.
The number of
Option Shares to be purchased by each Underwriter shall be in the
same
proportion to the total number of Option Shares being purchased as
the number of
Firm Shares being purchased by such Underwriter bears to the total
number of
Firm Shares, adjusted by you in such manner as to avoid fractional
shares. The
option with respect to the Option Shares granted hereunder may be
exercised only
to cover over-allotments in the sale of the Firm Shares by the
Underwriters.
You, as Representatives of the several Underwriters, may cancel
such option at
any time prior to its expiration by giving written notice of such
cancellation
to the Company and the Attorney-in-Fact. To the extent, if any,
that the option
is exercised, payment for the Option Shares shall be made on the
Option Closing
Date in Federal (same day) funds drawn to the order of the Company
for the
Option Shares to be sold by it and to the order of "Color Kinetics
Incorporated,
as Custodian" for the Option Shares to be sold by the Selling
Stockholders
against delivery of certificates therefor through the facilities of
The
Depository Trust Company, New York, New York.
(e) If on the Closing Date or Option Closing Date, as the case may
be,
any Selling Stockholder fails to sell the Firm Shares or Option
Shares which
such Selling Stockholder has agreed to sell on such date as set
forth in
Schedule II hereto, the Company agrees that it will sell or arrange
for the sale
of that number of shares of Common Stock to the Underwriters which
represents
Firm Shares or the Option Shares which such Selling Stockholder has
failed to so
sell, as set forth in Schedule II hereto, or such lesser number as
may be
requested by the Representatives.
3.
OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a
public
offering of the Firm Shares as soon as the Representatives deem it
advisable to
do so. The Firm Shares are to be initially offered to the public at
the initial
public offering price set forth in the Prospectus. The
Representatives may from
time to time thereafter change the public offering price and other
selling
terms.
It is further understood that you will act as the Representatives
for
the Underwriters in the offering and sale of the Shares in
accordance with a
Master Agreement Among Underwriters entered into by you and the
several other
Underwriters.
4.
COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.
(a) The Company covenants and agrees with the several
Underwriters
that:
(i) The Company will (A) prepare and timely file with the
Commission under Rule 424(b) under the Act a Prospectus in a form
approved by
the Representatives containing information previously omitted at
the time of
effectiveness of the Registration Statement in reliance on Rules
430A, 430B or
430C under the Act, (B) not file any amendment to the
Registration
15
<PAGE>
EXECUTION COPY
Statement or distribute an amendment or supplement to the General
Disclosure
Package or the Prospectus or document incorporated by reference
therein of which
the Representatives shall not previously have been advised and
furnished with a
copy or to which the Representatives shall have reasonably objected
in writing
or which is not in compliance with the Rules and Regulations and
(C) file on a
timely basis all reports and any definitive proxy or information
statements
required to be filed by the Company with the Commission subsequent
to the date
of the Prospectus and prior to the termination of the offering of
the Shares by
the Underwriters.
(ii) The Company will (i) not make any offer relating to the
Shares that would constitute an Issuer Free Writing Prospectus or
that would
otherwise constitute a "free writing prospectus" (as defined in
Rule 405 under
the Act) required to be filed by the Company with the Commission
under Rule 433
under the Act unless the Representatives approve its use in writing
prior to
first use (each, a "Permitted Free Writing Prospectus"); provided
that the prior
written consent of the Representatives shall be deemed to have been
given in
respect of the Issuer Free Writing Prospectuses included in
Schedule V hereto,
(ii) treat each Permitted Free Writing Prospectus as an Issuer Free
Writing
Prospectus, (iii) comply with the requirements of Rules 164 and 433
under the
Act applicable to any Issuer Free Writing Prospectus, including the
requirements
relating to timely filing with the Commission, legending and record
keeping and
(iv) not take any action that would result in an Underwriter or the
Company
being required to file with the Commission pursuant to Rule 433(d)
under the Act
a free writing prospectus prepared by or on behalf of such
Underwriter that such
Underwriter otherwise would not have been required to file
thereunder. The
Company will satisfy the conditions in Rule 433 under the Act to
avoid a
requirement to file with the Commission any electronic road
show.
(iii) Intentionally omitted.
(iv) The Company will advise the Representatives promptly (A)
when the Registration Statement or any post-effective amendment
thereto shall
have become effective, (B) of receipt of any comments from the
Commission, (C)
of any request of the Commission for amendment of the Registration
Statement or
for supplement to the General Disclosure Package or the Prospectus
or for any
additional information, and (D) of the issuance by the Commission
of any stop
order suspending the effectiveness of the Registration Statement or
any order
preventing or suspending the use of any Preliminary Prospectus, any
Issuer Free
Writing Prospectus or the Prospectus, or of the institution of any
proceedings
for that purpose or pursuant to Section 8A of the Act. The Company
will use its
best efforts to prevent the issuance of any such order and to
obtain as soon as
possible the lifting thereof, if issued.
(v) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities
laws of such
jurisdictions as the Representatives may reasonably have designated
in writing
and will make such applications, file such documents, and furnish
such
information as may be reasonably required for that purpose,
provided the Company
shall not be required to qualify as a foreign corporation or to
file a general
consent to service of process in any jurisdiction where it is not
now so
qualified or required to file such a consent. The
16
<PAGE>
EXECUTION COPY
Company will, from time to time, prepare and file such statements,
reports, and
other documents, as are or may be required to continue such
qualifications in
effect for so long a period as the Representatives may reasonably
request for
distribution of the Shares.
(vi) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any
Preliminary Prospectus
as the Representatives may reasonably request. The Company will
deliver to, or
upon the order of, the Representatives, from time to time, as many
copies of any
Issuer Free Writing Prospectus as the Representatives may
reasonably request.
The Company will deliver to, or upon the order of, the
Representatives during
the period when delivery of a Prospectus (or, in lieu thereof, the
notice
referred to under Rule 173(a) under the Act) (the "Prospectus
Delivery Period")
is required under the Act, as many copies of the Prospectus in
final form, or as
thereafter amended or supplemented, as the Representatives may
reasonably
request. The Company will deliver to the Representatives at or
before the
Closing Date, four signed copies of the Registration Statement and
all
amendments thereto including all exhibits filed therewith, and will
deliver to
the Representatives such number of copies of the Registration
Statement
(including such number of copies of the exhibits filed therewith
that may
reasonably be requested), including documents incorporated by
reference therein,
and of all amendments thereto, as the Representatives may
reasonably request.
(vii) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of
the
Commission thereunder, so as to permit the completion of the
distribution of the
Shares as contemplated in this Agreement and the Prospectus. If
during the
period in which a prospectus (or, in lieu thereof, the notice
referred to under
Rule 173(a) under the Act) is required by law to be delivered by an
Underwriter
or dealer, any event shall occur as a result of which, in the
judgment of the
Company or in the reasonable opinion of the Underwriters, it
becomes necessary
to amend or supplement the Prospectus in order to make the
statements therein,
in the light of the circumstances existing at the time the
Prospectus is
delivered to a purchaser, not misleading, or, if it is necessary at
any time to
amend or supplement the Prospectus to comply with any law, the
Company promptly
will either (i) prepare and file with the Commission an appropriate
amendment to
the Registration Statement or supplement to the Prospectus or (
