EXHIBIT 2
REPRESENTATIONS AND REGISTRATION RIGHTS AGREEMENT (the
"Agreement") dated as of January 1, 1995 between STRATASYS, INC., a
Delaware corporation (the "Company"), and INTERNATIONAL BUSINESS
MACHINES CORPORATION, a New York corporation ("IBM").
In connection with the sale on the date hereof by the Company to IBM
of 500,000 shares of Common Stock, $.01 par value per share (the "Common
Stock"; and such 500,000 shares, the "Shares"), pursuant to the Assignment and
Sale of Rapid Prototyping Technology and Related Assets Agreement dated January
1, l995 (the "Technology Agreement"), the Company and IBM hereby agree as
follows:
1. Representations and Warranties of the Company. The Company hereby
represents and warrants to IBM that:
(a) Corporate Organization and Authority. The Company (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware; (ii) has the corporate power and authority to own its
property and conduct its business where such business is now conducted and to
carry on its business as now conducted; and (iii) has been duly qualified and is
in good standing to do business as a foreign corporation in each jurisdiction in
which the conduct of its business or ownership or leasing of its properties
requires qualification, except where failure so to qualify would not have a
material adverse effect on the business, properties or condition of the Company.
(b) Capitalization. On the date hereof, the authorized capital of
the Company consists of (i) 5,000,000 shares of Common Stock, of which 2,871,210
shares are validly issued, outstanding, fully paid and nonassessable, and (ii)
264,000 shares of preferred stock, $.01 par value per share, all of which are
issued and outstanding. Except as contemplated by this Agreement and the
Technology Agreement and except for 300,000 shares of Common Stock that have
been reserved for issuance under the Company's stock plans (of which 146,601
shares are subject to outstanding options) and up to 729,353 shares of Common
Stock that has been reserved for issuance upon exercise of warrants and options,
there are not outstanding subscriptions, warrants, options, conversion
privileges or other rights or agreements to purchase or otherwise acquire or
issue any shares of capital stock of the Company (or shares reserved for such
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purpose), and no preemptive rights or rights of first refusal exist with respect
to the issuance of Common Stock.
(c) Authorization. All corporate action on the part of the Company
necessary for the authorization, execution and delivery of this Agreement and
the Technology Agreement by the Company, the performance by the Company of all
its obligations under this Agreement and the Technology Agreement and the
issuance and delivery by the Company of the Shares has been duly taken, and this
Agreement and the Technology Agreement constitute the valid and binding
obligations of the Company. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority or any
other person is required to be obtained or made by the Company in connection
with the transactions contemplated hereby.
(d) Validity of Shares. When issued, sold and delivered in
accordance with the terms and for the consideration expressed in the Technology
Agreement, the Shares shall be duly authorized, validly issued, fully paid and
nonassessable.
(e) Disclosure. The Company's Registration Statement on Form SB-2
(Registration No. 33-83638C), a copy of which has been furnished to IBM and
which became effective on October 20, 1994, was true and complete in all
material respects as of its effective date and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which there were made, not misleading.
(f) Changes in Condition. Since October 20, 1994, no event has
occurred respecting the Company except events that both individually and in the
aggregate would not have a material adverse effect on the financial condition,
results of operations or prospects of the Company.
(g) No Defaults, Violations or Conflicts. The Company is not in
violation with respect to any term or provision of (i) its certificate of
incorporation or by-laws or any indebtedness, mortgage, indenture, contract,
agreement, license, permit, judgment, decree or order to which it is a party or
(ii) any statue, ordinance, rule or regulation, which violation would have a
material adverse
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effect on the business, properties or condition of the Company.
(h) Private Offering. Neither the Company nor anyone acting on its
behalf has offered any of the Shares for sale to, or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any prospective purchaser other than IBM. Neither the Company nor anyone acting
on its behalf has within the last twelve months issued, sold or offered any
security of the Company to any person or organization under circumstances that
would cause the issuance and sale of the Shares, as contemplated by this
Agreement and the Technology Agreement, to be subject to the registration
requirements of the Securities Act of 1933 (the "Securities Act"). The Company
agrees that neither the Company nor anyone acting on its behalf will offer the
Shares or any part thereof or any similar securities for issuance or sale to, or
solicit any offer to acquire any of the same from, anyone so as to make the
issuance and sale of the Shares subject to the registration requirements of
Section 5 of the Securities Act.
(i) Brokers and Finders. The Company has not retained any investment
banker, broker or finder in connection with the transactions contemplated by
this Agreement and the Technology Agreement.
(j) Blue Sky Compliance. The Company shall use its best efforts to
comply with all state securities or "Blue Sky" laws necessary to offer and sell
the Shares to IBM.
2. Representations and Warranties of IBM.
(a) Securities Act. IBM understands and acknowledges that the
offering of the Shares pursuant to this Agreement and the Technology Agreement
will not be registered under the Securities Act or qualified under any state
"Blue Sky" laws on the grounds that the offering and sale of the Shares are
exempt from registration and qualification, respectively, under the Securities
Act and the state "Blue Sky" laws, and that the Company's reliance upon such
exemption is predicated upon IBM's representations set forth in this Agreement.
IBM represents and warrants to the Company that IBM is acquiring the Shares for
investment only and not with a view to any distribution of all or any portion
thereof, and IBM will not offer to sell or otherwise
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dispose of all or any portion of the Shares in violation of any of the
registration requirements of the Securities Act. If, at any time in the future,
IBM should offer, sell, assign, pledge, hypothecate, transfer or otherwise
dispose of the Shares, it will do so only in accordance with the registration
requirements of the Securities Act or pursuant to an exemption therefrom.
(b) Accredited Investor. IBM represents and warrants to the Company
that IBM is an "accredited investor" as such term is defined in Regulation D
under the Securities Act.
(c) Conditions on Transfer. IBM covenants that, unless the Shares
have been registered pursuant to Section 3 hereof, IBM will not dispose of any
Shares unless and until (i) IBM shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition and (ii) IBM shall have
furnished the Company with an opinion of counsel (which may be an employee of
IBM) reasonably satisfactory in form and substance to the Company and the
Company's counsel to the effect that, or shall otherwise have satisfied the
Company that, such disposition will not require registration under the
Securities Act.
(d) Legends for the Shares. IBM acknowledges that the certificate or
certificates evidencing the Shares will bear a legend reading substantially as
follows:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS.
SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, NOR MAY SUCH SHARES BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH THE AGREEMENT DATED JANUARY 1,
1995.
3. Registration Rights.
(a) Demand Registrations. At any time after the third anniversary of
the date hereof, if IBM is unable at any time for any reason to dispose of the
Shares pursuant to Rule 144(k) under the Securities Act, then upon the written
demand of IBM, the Company shall use its best efforts to
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effect the registration (a "Demand Registration") under the Securities Act of
such number of Registration Shares (as defined below) then beneficially owned by
IBM as shall be indicated in a written demand sent to the Company by IBM;
provided, however, that (i) the Company shall be obligated to effect a total of
no more than two Demand Registrations, (ii) a Demand Registration shall not
count as such until it has become effective, except that if, after it has become
effective, the offering of Registration Shares pursuant to such registration is
interfered with by any stop order, injunction or other order or requirement of
the Securities and Exchange Commission (the "SEC") or any other governmental
authority, such registration shall be deemed not to have been effected unless
such stop order, injunction or other order or requirement shall subsequently
have been vacated or otherwise removed and (iii) a Demand Registration shall not
count as such if the Company (or any other stockholder of the Company) offers
any of its securities pursuant to the registration in accordance with the next
sentence and IBM does not sell in the offering all Registration Shares it
requested to register. If a Demand Registration is initiated by IBM and the
Company (or any other stockholder of the Company with registration rights) then
wishes to offer any of its securities in connection with the registration, no
such securities may be offered by the Company or any other stockholder until
such time as all Registration Shares registered or to be registered pursuant to
IBM's written demand have been sold by IBM. Upon receipt of IBM's written
demand, the Company shall expeditiously effect the registration under the
Securities Act of the Registration Shares and use its best efforts to have such
registration become and remain effective as provided in Section 3(h). IBM shall
have the right to select the underwriters for a Demand Registration. As used in
this Agreement, "Registration Shares" shall mean the Shares and any shares of
Common Stock issued with respect thereto or in substitution therefor, whether by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization or
otherwise.
(b) Piggyback Registrations. (i) If at any time after the second
anniversary of the date hereof, the Company proposes to register any of its
securities under the Securities Act for sale for cash (otherwise than in
connection with the registration of securities issuable pursuant to an employee
stock option, stock purchase or similar plan or pursuant to a merger, exchange
offer or
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transaction of the type specified in Rule 145(a) under the Securities Act), the
Company shall give IBM notice of such proposed registration at least 25 days
prior to the filing of a registration statement. At the written request of IBM
delivered to the Company within 20 days after the receipt of the notice from the
Company, which request shall state the number of Registration Shares that IBM
wishes to sell or distribute publicly under the registration statement proposed
to be filed by the Company, the Company shall use its best efforts to register
under the Securities Act such Registration Shares, and to cause such
registration (a "Piggyback Registration") to become and remain effective as
provided in Section 3(h).
(ii) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters thereof
advise the Company in writing that in their opinion the number of securities
requested to be included in the registration exceeds the number which can be
sold in the offering, the Company shall include in the registration (i) first,
the securities the Company proposes to sell and (ii) second, the Registration
Shares IBM proposes to sell and the securities each other holder of the
Company's securities who has registration rights and has exercised such rights
proposes to sell in proportion to the number of shares each proposes to sell
pursuant to this clause (ii).
(iii) If a Piggyback Registration is a underwritten secondary
registration on behalf of holders of the Company's securities who have demand
registration rights and the managing underwriters thereof advise the Company in
writing that in their opinion the number of securities requested to be included
in the registration exceeds the number which can be sold in the offering, the
Company shall include in the registration (i) first, the securities of the
holders of the Company's securities who have exercised their demand registration
rights and (ii) second, the securities any other securityholders of the Company
(including any Registration Shares IBM desires to sell) propose to sell in
proportion to the number of securities each proposes to sell. In the event the
Company desires to participate in such a registration of securities, the Company
shall include in the registration (A) first, the securities of the holders of
the Company's securities who have exercised their demand registration rights and
(B) second, the securities the Company and any other securityholders of the
Company propose to sell (including any Registration Shares IBM desires to
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sell) in proportion to the number of shares each proposes to sell.
(c) Indemnification by the Company. In the event of any registration
of any Registration Shares under the Securities Act, the Company shall, and
hereby does, agree to indemnity and hold harmless IBM, its directors, officers
and employees, each other person who participates as an underwriter in the
offering or sale of such Registration Shares and each other person, if any, who
controls IBM or any such underwriter within the meaning of Section 15 of the
Securities Act against (i) any losses, claims, damages or liabilities, joint or
several, to which IBM or any such director or officer or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which the
Registration Shares were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances in which there were made not
misleading, (ii) any violation by the Company of the Securities Act or any rule
or regulation promulgated under the Securities Act applicable to the Company in
connection with any such registration and (iii) any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such losses, claims, liabilities, actions or proceedings which result from the
activities set forth in the foregoing clause (i) and (ii); provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company through an instrument duly executed by or on behalf of IBM
specifically stating that it is for use in the preparation thereof; and provided
further, however, that the Company shall not be liable to any person who
participates as an underwriter in the offering or sale
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of Registration Shares or any other person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registration Shares to such person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of IBM or any
such director, officer or controlling person and shall survive the transfer of
the Registration Shares by IBM.
(d) Indemnification by IBM. The Company may require, as a condition
to including any Registration Shares in any registration statement filed
pursuant to Section 3(a) or 3(b), that the Company shall have received an
undertaking satisfactory to it from IBM to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 3(c)) the Company,
each director of the Company, each officer of the Company signing such
registration statement, any underwriter, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act with
respect to any untrue statement or alleged untrue statement in or omission or
alleged omission from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein or any amendment or
supplement thereto, if such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information about IBM as a stockholder of the Company furnished to the
Company through an instrument duly executed by IBM specifically stating that it
is for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
person and shall survive the transfer by the seller of the securities of the
Company being registered.
(e) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim
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referred to in Section 3(c) or 3(d), such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give notice to the
latter of the commencement of such action; provided, however, that the failure
of any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under Section 3(c) or 3(d) except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist or the indemnified
party may have defenses not available to the indemnifying party in respect of
such claim, the indemnifying party shall be entitled to participate in and to
assume the defense thereof, with counsel reasonably 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 shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall be liable for any settlement of any action or proceeding effected
without its written consent. No indemnifying party shall, without the consent of
the indemnified party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(f) Other Indemnification. Indemnification similar to that specified
in this Section 3 (with appropriate modifications) shall be given by the Company
and IBM with respect to any required registration or other qualification of
Registration Shares under any Federal or state law or regulation of any
governmental authority other than the Securities Act.
(g) Indemnification Payments. The indemnification required by this
Section 3 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(h) Registration Covenants of the Company. In the event that any
Registration Shares are to be registered
10
pursuant to Section 3(a) or 3(b), the Company covenants and agrees that it shall
use its best efforts to effect the registration and cooperate in the sale of the
Registration Shares to be registered and shall as expeditiously as possible:
(i) (A) prepare and file with the SEC a registration statement with
respect to the Registration Shares (as well as any necessary amendments or
supplements thereto) (a "Registration Statement") and (B) use its best
efforts to cause the Registration Statement to become effective; provided
that the Company shall be entitled to deter such filing for a period not
to exceed 120 days after receipt of IBM's written demand pursuant to
Section 3(a) if (A) the Company is contemplating an underwritten public
offering of its securities and, in the judgment of the managing
underwriter thereof, such filing would have a material adverse effect on
the contemplated offering, (B) the Company is in possession of material
information that it deems advisable not to disclose in a registration
statement or (C) the Company is prohibited (pursuant to the terms of an
underwriting agreement in connection with a public offering of its
securities effected within the previous six months) from filing such
registration statement prior to the end of such 120-day period;
(ii) prior to any filing described above in Section 3(a), furnish to
IBM copies of the Registration Statement and any amendments or supplements
thereto and any prospectus forming a part thereof proposed to be so filed,
which documents shall be subject to the review of counsel for IBM (but not
approval of such counsel except with respect to any statement in the
Registration Statement which relates to IBM);
(iii) notify IBM, promptly after the Company shall receive notice
thereof, of the time when the Registration Statement becomes effective or
when any amendment or supplement or any prospectus forming a part of the
Registration Statement has been filed;
(iv) notify IBM promptly of any request by the SEC for the amending
or supplementing of the Registration Statement or prospectus or for
additional information;
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(v)(A) advise IBM after the Company shall receive notice or
otherwise obtain knowledge of the issuance of any order by the SEC
suspending the effectiveness of the Registration Statement or any
amendment thereto or of the initiation or threatening of any proceeding
for that purpose and (B) promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal promptly if a stop
order should be issued;
(vi)(A) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus forming a
part thereof as may be necessary to keep the Registration Statement
effective for the lesser of (x) a period of time necessary to permit IBM
to dispose of all its Registration Shares and (y) the maximum period of
time permitted by law to keep effective a registration statement without
filing an amendment containing new audited financial statements and (B)
comply with the provisions of the Securities Act with respect to the
disposition of all Registration Shares covered by the Registration
Statement during such period in accordance with the intended methods of
disposition by IBM set forth in the Registration Statement;
(vii) furnish to IBM such number of copies of the Registration
Statement, each amendment and supplement thereto, the prospectus included
in the Registration Statement (including each preliminary prospectus) and
such other documents as IBM may reasonably request in order to facilitate
the disposition of the Registration Shares owned by IBM;
(viii) use its best efforts to register or qualify such Registration
Shares under such other securities or "Blue Sky" laws of such
jurisdictions as determined by the underwriters after consultation with
the Company and IBM and do any and all other acts and things which may be
reasonably necessary or advisable to enable IBM to consummate the
disposition in such jurisdictions of the Registration Shares (provided
that the Company shall not be required to (A) qualify generally to do
business in any jurisdiction in which it would not otherwise be required
to qualify but for this Section 3(h)(viii), (B) subject itself to taxation
in any such jurisdiction or (C) consent to general service of process in
any such jurisdiction);
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(ix) notify IBM, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the Registration Statement would contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and, at the request of IBM, prepare a supplement or
amendment to the Registration Statement so that the Registration Statement
shall not, to the Company's knowledge, contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(x) provide a transfer agent and registrar, which may be a single
entity, for all the Registration Shares not later than the effective date
of the Registration Statement;
(xi) enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other action, if any, as
IBM or the underwriters shall reasonably request in order to expedite or
facilitate the disposition of the Registration Shares pursuant to this
Section 3;
(xii)(A) make available for inspection by IBM, any underwriter
participating in any disposition pursuant to the Registration Statement
and any attorney, accountant or other agent retained by IBM or any such
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and (B) cause the Company's
officers, directors and employees to supply all relevant information
reasonably requested by IBM or any such underwriter, attorney, accountant
or agent in connection with the Registration Statement; and
(xiii) cause the Company's independent public accountants to provide
a comfort letter in customary form and covering such matters of the type
customarily covered by comfort letters.
(i) Expenses. The Company shall pay, on behalf of IBM, all of the
expenses in connection with any Demand Registration pursuant to Section 3(a) or
Piggyback Registration pursuant to Section 3(b), including all
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registration, filing and NASD fees, all fees and expenses of complying with
securities or "Blue Sky" laws, all word processing, duplicating and printing
expenses, all messenger and delivery expenses, the fees and disbursements of
counsel for the Company and of its independent public accountants (including the
expenses of comfort letters required by or incident to such performance and
compliance) and any fees and disbursements of underwriters customarily paid by
issuers or sellers of securities, but excluding any underwriting discounts and
commissions and transfer taxes, if any. In any registration, IBM shall pay for
its own underwriting discounts and commissions, if any, and any fees and
disbursements of counsel and accountants employed by IBM.
(j) Assignment of Registration Rights. IBM may assign its rights
under this Section 3 to anyone (other than an affiliate of the Company) to whom
IBM sells, transfers or assigns all of its beneficial interest in at least
100,000 Registration Shares (as adjusted for stock splits, stock dividends and
stock combinations), other than in sales pursuant to Rule 144 under the
Securities Act or a Demand Registration or a Piggyback Registration effected
pursuant to this Section 3; provided, however, that no assignment shall increase
the Company's obligations to effect registrations or pay expenses thereof.
(k) Rule 144. The Company shall take all actions reasonably
necessary to enable IBM to sell the Registration Shares without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the SEC, including
filing on a timely basis all reports required to be filed by the Securities
Exchange Act of 1934. Upon the request of IBM, the Company shall deliver to IBM
a written statement as to whether it has complied with such requirements.
(l) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
the Company or any holder of Registration Shares exercising its rights under
this Section 3 makes a claim for indemnification pursuant to Section 3(c) or
3(d), but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such
14
indemnification may not be enforced in such case notwithstanding that Section
3(c) or 3(d) provides for indemnification in such case, then, the Company and
such holder of Registration Shares will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and of the holder of Registration Shares on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations or, it the allocation provided herein is not permitted by
applicable law, in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and any holder of Registration Shares
from the offering of the securities covered by such registration statement. The
relative fault of the Company on the one hand and of the holder of Registration
Shares on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact related to information supplied by the
Company on the one hand or by the holder of Registration Shares on the other;
provided, however, that, in any such case, (A) no such holder of Registration
Shares will be required to contribute any amount in excess of the proceeds
received by such holder of Registration Shares offered by it pursuant to such
registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
4. Right of First Offer
(a) Mechanics. Prior to selling or otherwise disposing of any of the
Shares, IBM shall first give the Company the opportunity to purchase the Shares
(the "Transfer First Offer Right") in the following manner:
(i) IBM shall give written notice to the Company of its intent to
dispose of the Shares, setting forth the number of Shares to be disposed of (the
"Transfer Notice").
(ii) The Transfer Notice shall constitute an offer by IBM to sell
all, but not less than all, of the Shares specified in the Transfer Notice to
the Company (or a
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purchaser designated by the Company) at a cash price per Share (the "Transfer
Price") equal to the Market Price on the most recent trading date preceding the
date of the Transfer Notice. Market Price shall mean the closing sales price for
a share of Common Stock on the principal national securities exchange on which
the Common Stock is listed, or, if the Common Stock is not listed on any
national securities exchange, the closing sales price for a share of Common
Stock as reported on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), or, if such closing price shall not be reported on
NASDAQ, the average of the closing bid and asked prices of a share of Common
Stock as so reported, or, if such prices shall not be so reported, as the same
shall be reported by the National Quotation Bureau Incorporated, or, in all
other cases, the value set in good faith by the Company's Board of Directors.
(iii) The Transfer First Offer Right shall be exercisable by written
notice to IBM (the "Transfer Exercise Notice") within 10 calendar days after
receipt of the Transfer Notice.
(iv) If the Company exercises the Transfer First Offer Right, then
IBM shall sell the Shares specified in the Transfer Notice to the Company (or a
purchaser designated by the Company) at the Transfer Exercise Price. The closing
of the purchase and sale of the Shares shall take place on such date, no later
than 30 days after delivery to the Company of the Transfer Notice, as shall be
specified by the Company in the Transfer Exercise Notice.
(v) If the Company does not exercise the Transfer First Offer
Right, IBM may sell or otherwise dispose of the Shares specified in the Transfer
Notice.
(b) Exceptions. The Transfer First Offer Right shall not apply to
(i) any disposition to the Company or a person or persons approved by the
Company; (ii) in a sale pursuant to a Registration Statement in accordance with
Section 3; (iii) to a subsidiary of IBM which agrees in writing to comply with
the obligations of IBM in this Agreement; (iv) in a merger or consolidation of
the Company; or (v) in response to an offer to acquire the Shares which is
available to substantially all the holders of Common Stock.
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5. Miscellaneous.
(a) Entire Agreement; Successors and Assigns. This Agreement and the
Technology Agreement constitute the entire contract between the parties relative
to the subject matter hereof and no party shall be liable or bound to the other
in any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Any previous agreement among the
parties with respect to the sale of the Shares is superseded by this Agreement.
The terms and conditions of this Agreement shall inure to the benefit of the
parties. Except as expressly provided in Section 3(j), nothing in this
Agreement, expressed or implied, is intended to confer upon any party, other
than the parties hereto, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
(b) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
conflict of laws principles of such State.
(c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) Headings. The headings of the Sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
(e) Notices. Any notice or other communication required or permitted
hereunder shall be given in writing and shall be deemed effectively given when
delivered by hand, courier or overnight delivery service, five days after
deposit if sent by registered or certified mail, return receipt requested, or
when received if sent in the form of a telecopy, addressed to a party at its
address hereinafter shown or at such other address as such party may designate
by ten day's advance written notice to the other party. Any notice to the
Company shall be sent to Stratasys, Inc., 00000 Xxxxxx Xxxxx, Xxxx Xxxxxxx,
Xxxxxxxxx 00000, telecopy no.: (000) 000-0000, Attention: S. Xxxxx Xxxxx. Any
notice to IBM shall be sent to International Business Machines Corporation, Xxx
Xxxxxxx Xxxx, Xxxxxx, Xxx Xxxx, 00000, telecopy no.: (000) 000-0000, Attention:
Xxxxxx X. Xxxxxxxx.
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(f) Survival of Representations and Warranties. The representations
and warranties of the parties contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the issuance,
delivery and payment for the Shares.
(g) Severability. If any provision of this Agreement or the
application of such provision is invalid, illegal or unenforceable in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or invalidate or render unenforceable this
Agreement in any other jurisdiction. To the extent permitted by applicable law,
the parties waive any provision of law that renders any provision of this
Agreement invalid, illegal or unenforceable in any respect. The parties shall,
to the extent lawful and practicable, use their best reasonable efforts to enter
into arrangements to reinstate the intended benefits, net of the intended
burdens, of any such provision held invalid, illegal or unenforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
STRATASYS, INC.
by /s/ S. Xxxxx Xxxxx
------------------------------
INTERNATIONAL BUSINESS MACHINES
CORPORATION,
by /s/ Xxx X. Xxxxxx
-------------------------------
Xxx X. Xxxxxx
General Manager, Real Estate and
Business Development
