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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 2, 1999
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DTM CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Texas
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(State of Other Jurisdiction of Incorporation)
000-20993 74-2487065
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(Commission File Number) (IRS Employer
Identification No.)
1611 Headway Circle, Building 2, Austin, Texas 78754
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(Address of Principal Executive Offices) (Zip Code)
(512) 339-2922
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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Item 1. Changes in Control of Registrant.
General
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On January 5, 1999, Proactive Finance Group, LLC, a Texas limited
liability company ("Proactive") and The B.F.Goodrich Company, a New York
corporation ("BFGoodrich"), notified Registrant that they had entered into a
Stock Purchase Agreement dated as of January 2, 1999 (the "Stock Purchase
Agreement"), which, if consummated, would result in a change in control of
Registrant. Registrant is not a party to the Stock Purchase Agreement, but has
been provided with a copy by Proactive and BFGoodrich.
Assuming the consummation of the transactions contemplated by the Stock
Purchase Agreement, Proactive would beneficially own approximately 50.22% of the
voting power of Registrant's outstanding shares of Common Stock, par value
$0.0002 per share, based on the number of shares outstanding as of December 31,
1998. However, prior to the date on which the closing of the Stock Purchase
Agreement occurs, Registrant expects to issue $400,000 in shares of its Common
Stock (valued based on the average closing price for the 15 trading days prior
to the date of final court approval, which is currently scheduled for January
26, 1999) pursuant to the terms of settlement of the shareholder class action
styled Danielson, et al. v. DTM Corporation, et al., Civ. No. 97-CI-16633 (the
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"Shareholder Class Action"), currently pending against Registrant. As a result
of such issuance, Registrant expects that the Goodrich Shares will represent
less than 50% of the outstanding voting power of Registrant as of the closing of
the proposed purchase of the Goodrich Shares for Proactive.
Pursuant to the terms and conditions of the Stock Purchase Agreement,
a copy of which has been provided to Registrant, but to which Registrant is not
a party, Proactive has agreed to purchase from BFGoodrich, for an aggregate
purchase price of $3,500,000, all of the 3,157,190 shares (the "Goodrich
Shares") of the Common Stock of Registrant currently held by BFGoodrich, as well
as all right, title and interest in a $907,000 receivable (the "Goodrich
Receivable") due to BFGoodrich from Registrant. To Registrant's knowledge,
Proactive has not yet received the financing proceeds necessary to pay the
$3,500,000 purchase price for the Goodrich Shares and Goodrich Receivable. The
receipt of such financing is one of the conditions to the consummation of the
transactions contemplated by the Stock Purchase Agreement.
The Stock Purchase Agreement is scheduled to terminate if the closing
of the transactions contemplated thereby has not occurred by February 15, 1999.
BFGoodrich and Proactive have filed the Stock Purchase Agreement with
the Securities and Exchange Commission as an exhibit to their respective
statements on Schedule 13D, copies of which Schedules have been provided to
Registrant. Registrant has relied on the contents of such Schedules in preparing
certain of the information reported hereby.
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Approval of Proactive Purchase by Registrant's Board of Directors
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On January 11, 1999, in satisfaction of a condition to the Stock
Purchase Agreement, Registrant's Board of Directors (the "Board") unanimously
approved the transactions contemplated by the Stock Purchase Agreement for
purposes of Article 13.03 of the Texas Business Corporation Act (the "Texas
Business Combination Law"). By obtaining the Board's approval of Proactive's
purchase of the Goodrich Shares, Proactive will not be subject to the three-year
moratorium on additional purchases of Registrant's stock which otherwise would
have been imposed by the operation of the Texas Business Combination Law. The
Board also approved the resignation, effective upon and expressly conditioned
upon Proactive's purchase of the Goodrich Shares, of Robert D. Koney, Jr.,
Marshall O. Larsen and Les C. Vinney (collectively, the "BFGoodrich Directors")
from the Board and the conditional appointment of three persons designated by
Proactive, Anthony Mariotti, Samuel A. Myers and Larry Goldstein (collectively,
the "Proactive Designees"), to fill the resulting vacancies on the Board.
Registrant has no knowledge of any arrangements or understandings
among members of both Proactive and BFGoodrich and their respective associates
with respect to the election of Registrant's directors, other than the
resignation of the BFGoodrich Directors and the appointment of the Proactive
Designees, which is a condition to the consummation of the transactions
contemplated by the Stock Purchase Agreement.
Conditions to Consummation of the Stock Purchase Agreement
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The obligation of Proactive to consummate the transactions
contemplated by the Stock Purchase Agreement is subject to, among others, the
following conditions:
(i) the representations and warranties of BFGoodrich contained in
the Stock Purchase Agreement shall be true and correct at and as of the
closing date, and BFGoodrich shall have performed all of the covenants
required to be performed by it under the Stock Purchase Agreement prior to
the closing date.
(ii) there will not have occurred or be reasonably expected to occur
any material adverse effect upon the business, assets, liabilities,
condition, operating results, employee, customer or supplier relations,
business prospects, cash flow or working capital of Registrant.
(iii) BFGoodrich shall have delivered to Proactive certificates
representing the Goodrich Shares and the duly authorized and executed
Assignment and Assumption Agreement with respect to the Goodrich
Receivable.
(iv) the size of Registrant's Board of Directors shall be no more
than six directors and the BFGoodrich Directors shall have resigned from
the Board effective upon the consummation of the transactions contemplated
by the Stock Purchase Agreement.
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(v) by the close of business on January 11, 1999, Registrant shall
have delivered a copy of the resolutions duly adopted by Registrant's Board
of Directors, and certified by Registrant's Secretary: (1) approving the
purchase and acquisition of the Goodrich Shares by Proactive for purposes
of the Texas Business Combination Law; (2) appointing the Proactive
Designees to Registrant's Board of Directors effective upon the closing of
the transactions contemplated by the Stock Purchase Agreement; and (3)
waiving all provisions of that certain Confidentiality Agreement dated
April 24, 1998, between Registrant and Proactive, as amended, with respect
to the transactions contemplated by the Stock Purchase Agreement and the
actions and involvement of the Proactive Designees on the Board.
(vi) Registrant will not have since the execution date of the Stock
Purchase Agreement (1) entered into any transaction, arrangement or
contract except on an arms'-length basis in the ordinary course of business
consistent with past custom and practice, (2) increase any officers' or
employee's compensation, incentive arrangements or other benefits out of
the ordinary course of business and consistent with past practice, (3)
redeemed, purchased or otherwise acquired, directly or indirectly, any of
Registrant's issued and outstanding capital stock or equity interests, or
any outstanding rights or securities exercisable or exchangeable for or
convertible into capital stock of Registrant, (4) amended its articles of
incorporation or bylaws, (5) recharacterized, paid, extended, modified, or
caused a default under Registrant's obligations and liabilities with
respect to the Goodrich Receivable, or (6) bought or sold any assets out of
the ordinary course of business.
(vii) all consents, waivers or approvals required to be obtained, all
filings required to be made and all proceedings required to be taken by
BFGoodrich and Registrant shall have been obtained, made and taken.
(viii) the transactions contemplated by the Stock Purchase Agreement
shall not be prohibited by any applicable law or governmental rule or
regulation or subject Proactive to any penalty or liability.
(ix) Proactive shall have received financing proceeds necessary to
consummate the transactions contemplated by the Stock Purchase Agreement.
(x) Proactive shall be satisfied with the status of the resolution
of the claims that had been brought against any parties to the Shareholder
Class Action.
(xi) between the execution date and the closing date of the Stock
Purchase Agreement, Registrant will not have issued or entered into any
agreement to issue any shares of its capital stock other than (i) shares
issuable upon the exercise of options, warrants or securities convertible
into or exercisable for shares of its capital stock outstanding as of the
execution date of the Stock Purchase Agreement or granted prior to the
closing date of the Stock Purchase Agreement under existing option plans in
the ordinary course of business and (ii) up to 500,000 shares as required
to settle the Shareholder Class Action.
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(xii) Proactive shall have received a legal opinion of counsel to
BFGoodrich with respect to the transactions contemplated by the Stock
Purchase Agreement.
(xiii) BFGoodrich shall have delivered to Proactive certain specified
customary documents at the time the transactions contemplated by the Stock
Purchase Agreement are consummated.
(xiv) Proactive shall have had full access to all properties,
personnel, books, records, contracts and other documents of or pertaining
to Registrant for any reasonable and proper purpose.
The obligation of BFGoodrich to consummate the transactions
contemplated by the Stock Purchase Agreement is subject to, among others, the
following conditions:
(i) the representations and warranties of Proactive contained in
the Stock Purchase Agreement shall be true and correct in all material
respects at and as of the closing date and Proactive shall have performed
all of the covenants required to be performed in all material respects by
it under the Stock Purchase Agreement at or prior to the closing date.
(ii) BFGoodrich shall have received the specified consideration from
Proactive.
(iii) no action or proceeding before any court or governmental body
will be pending or threatened which will result in a judgment, decree or
order that would prevent the carrying out of the transactions contemplated
by the Stock Purchase Agreement or cause such transactions to be rescinded.
(iv) all consents and approvals of governmental agencies that are
required for the consummation of the transactions contemplated by the Stock
Purchase Agreement will have been obtained.
(v) Registrant shall have paid all amounts owing under that certain
Credit Agreement, dated August 6, 1997, between Registrant and Chase Bank
of Texas, National Association ("Chase"), as amended, and that certain
Note, dated August 6, 1997, from Registrant in favor of Chase, as amended.
Proactive Standstill Agreement
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Proactive and Registrant are parties to a Confidentiality Agreement
dated as of April 24, 1998 (the "Confidentiality Agreement"), which among other
things, subjects Proactive to certain standstill provisions (as described below)
until the occurrence of a "Significant Event". Pursuant to the standstill
provisions of the Confidentiality Agreement, without the prior consent of the
Board (or any committee delegated with responsibility for such matters), for a
period of
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two years from the date of the Letter Agreement, or earlier upon the
occurrence of a Significant Event, Proactive shall not:
(i) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of Registrant or any
subsidiary of Registrant, or of any successor to or person in control of
Registrant, or any assets of Registrant or any subsidiary or division of
Registrant or of any such successor or controlling person;
(ii) make, or in any way participate, directly or indirectly, in
any "solicitation" of "proxies" to vote, or seek to advise or influence any
person or entity with respect to the voting of any voting securities of
Registrant;
(iii) make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any extraordinary
transaction involving Registrant or any of its securities or assets;
(iv) form, join or in any way participate in a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act, as amended, in connection
with any of the foregoing;
(v) with the exception of the Proactive Directors, acting in their
fiduciary capacity as directors of DTM, otherwise act or seek to control or
influence the management, the Board or policies of Registrant; or
(vi) take any action that could reasonably be expected to require
Registrant to make a public announcement regarding the possibility of any
of the events described in clauses (i) through (v) above; or
(vii) request Registrant, directly or indirectly, to waive any of the
foregoing provisions.
"Significant Event" shall mean, with respect to Registrant, any of (A)
the acquisition by any person or "13D Group" (as defined below) of beneficial
ownership of voting securities of Registrant representing 15% or more of the
then outstanding "voting securities" (as defined below) of Registrant; (B) the
announcement or commencement by any person or 13D Group of a tender or exchange
offer to acquire voting securities of Registrant which, if successful, would
result in such person or 13D Group owning, when combined with any other voting
securities of Registrant owned by such person or 13D Group, 15% or more of the
then outstanding voting securities of Registrant; or (C) the entry into by
Registrant, or determination by Registrant to seek to enter into, any merger,
sale or other business combination transaction pursuant to which the outstanding
shares of common stock of Registrant would be converted into cash or securities
of another person or 13D Group or 50% or more of the then outstanding shares of
common stock of Registrant would be owned by persons other than the then current
holders of shares of common stock of Registrant, or which would result in all or
a substantial portion of Registrant's assets being sold to any person or 13D
Group. "Voting securities" shall mean, with
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respect to Registrant, at any time shares of any class of capital stock of
Registrant which are then entitled to vote generally in the election of
directors; provided, that for purposes of this definition any securities which
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at such time are convertible or exchangeable into or exercisable for shares of
common stock of Registrant shall be deemed to have been so converted, exchanged
or exercised. "13D Group" shall mean, with respect to the voting securities of
Registrant, any group of persons formed for the purpose of acquiring, holding,
voting or disposing of such voting securities which would required under Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules
and regulations thereunder to file a statement on Schedule 13D with the SEC as a
"person" within the meaning of Section 13(d)(3) of the Exchange Act if such
group beneficially owned voting securities representing more than 5% of the
total combined voting power of all such voting securities then outstanding.
A copy of the Confidentiality Agreement has been filed as
Exhibit 10.1 hereto, and the foregoing description is qualified by reference
thereto.
Certain Effects of Change in Control on Registrant
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Line of Credit
Upon the occurrence of the sale of the Goodrich Shares to Proactive,
BFGoodrich no longer will provide its guarantee on Registrant's $2.0 million
line of credit with Chase. As a condition to BFGoodrich's obligations under the
Stock Purchase Agreement, Registrant is required to repay all amounts owing
under its credit agreement with and note in favor of Chase. Currently, no
amounts are outstanding under this credit line. Registrant's current line of
credit with Chase bears interest at Chase's prime rate minus 1.5%. After
Proactive's purchase of the Goodrich Shares, Registrant will need to obtain a
new bank line of credit that does not require BFGoodrich's guarantee. There can
be no assurance that such new line of credit will be available to Registrant on
commercially reasonable terms, or at all. If such a line of credit is available,
Registrant believes that the terms of such credit line would be more onerous and
that the interest rate will be higher. If no new line of credit is available on
commercially reasonable terms, Registrant believes its business, operating
results and financial condition would be materially and adversely affected.
Goodrich Receivable
The Goodrich Receivable currently does not bear interest and has no
repayment terms. Proactive has indicated to Registrant that it intends to
formalize the Goodrich Receivable into an interest-bearing debt after the
closing of the transactions contemplated by the Stock Purchase Agreement.
Insurance
Additionally, BFGoodrich currently provides Registrant participation
in a group program for various types of business insurance. This arrangement is
on terms that could be considered more favorable to Registrant than those that
would be available to Registrant in
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arms'-length transactions with unrelated vendors, principally because Registrant
is able to take advantage of cost efficiencies experienced by BFGoodrich due to
the size of its operations. Registrant will be ineligible to take part in
certain BFGoodrich insurance programs once BFGoodrich no longer owns a majority
of the outstanding Common Stock of Registrant. As a result, Registrant expects
to lose these benefits effective with the earlier of (i) the consummation of the
transactions contemplated by the Stock Purchase Agreement or (ii) the issuance
of $400,000 worth of Common Stock pursuant to the proposed settlement of the
Shareholder Class Action. Registrant expects the replacement insurance coverage
to cost up to an additional $50,000 per quarter.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
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10.1 Confidentiality Agreement dated as of April 24, 1998
between Registrant and Proactive Finance Group, LLC.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DTM CORPORATION
Dated: January 19, 1999 By: /s/ GEOFFREY W. KREIGER
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Geoffrey W. Kreiger,
Vice President and Controller
(Principal Financial and Accounting
Officer)
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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10.1 Confidentiality Agreement dated as of April 24, 1998 between
Registrant and Proactive Finance Group, LLC.
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EXHIBIT 10.1
DTM CORPORATION
1611 Headway Circle
Building 2
Austin, Texas 78754-5138
April 24, 1998
Proactive Finance Group, LLC
221 W. 6th Street, Suite 1520
Austin, Texas 78701
Attention: Anthony Mariotti
Confidentiality Agreement
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Ladies and Gentlemen:
In connection with the possible transaction (the "Proposed
Transaction") between DTM Corporation ("DTM") and Proactive Finance Group, LLC
("Proactive"), and in order to allow Proactive to evaluate the Proposed
Transaction, DTM has and will deliver to Proactive, upon the execution and
delivery of this letter agreement by Proactive, certain information about DTM's
properties, employees, finances, businesses and operations. All information (i)
about DTM or (ii) about a third party (which information was provided to DTM
subject to a confidentiality agreement with such third party, and provided that
Proactive was notified of the existence of such third party confidentiality
agreement) furnished by DTM or its Representatives (as defined below) to
Proactive or its Representatives, whether furnished before or after the date
hereof in connection with the Proposed Transaction, and regardless of the manner
in which it is furnished, is referred to in this letter agreement as
"Proprietary Information." Proprietary Information shall not include, however,
information which (i) is or becomes generally available to the public other than
as a result of a disclosure by Proactive or its Representatives in violation of
this letter agreement; (ii) was available to Proactive on a nonconfidential
basis prior to its disclosure by DTM or its Representatives; (iii) becomes
available to Proactive on a nonconfidential basis from a person other than DTM
or its Representatives who is not otherwise bound by a confidentiality agreement
with DTM or any of its Representatives, or is otherwise not known to Proactive
to be under an obligation to DTM or any of its Representatives not to transmit
the information to Proactive; or (iv) was independently developed by Proactive
without reference to or use of the Proprietary Information. For purposes of
this letter agreement, (i) "Representative" shall mean, as to any person, its
directors, officers, employees, agents and advisors (including, without
limitation, financial advisors, attorneys and accountants) and debt and equity
financing sources and their advisors and Representatives; and (ii) "person"
shall be broadly interpreted to include, without limitation, any corporation,
company, partnership, other
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Confidentiality Agreement
April 24, 1998
Page 2
entity or individual. Notwithstanding anything to the contrary herein, DTM
agrees that, with its prior written consent not to be unreasonably withheld,
Proactive may provide summary information regarding the proposed transaction to
potential debt and equity financing sources. To the extent such summary
information includes Proprietary Information, Proactive will submit such
information to DTM for consent purposes as described in the prior sentence.
Subject to the immediately succeeding paragraph, unless otherwise
agreed to in writing by DTM, Proactive (i) except as required by law, shall keep
all Proprietary Information confidential, shall not disclose or reveal any
Proprietary Information to any person other than its Representatives who are
actively and directly participating in its evaluation of the Proposed
Transaction or who otherwise need to know the Proprietary Information for the
purpose of evaluating the Proposed Transaction and shall cause those persons to
observe the terms of this letter agreement; (ii) shall not use Proprietary
Information for any purpose other than in connection with its evaluation of the
Proposed Transaction or the consummation of the Proposed Transaction in a manner
that DTM has approved; and (iii) except as required by law, shall not disclose
to any person (other than those of its Representatives who are actively and
directly participating in its evaluation of the Proposed Transaction or who
otherwise need to know for the purpose of evaluating the Proposed Transaction
and, in the case of its Representatives, whom it will cause to adopt the
substance of terms of this letter agreement in writing for the express benefit
of DTM) any information about the Proposed Transaction, or the terms or
conditions or any other facts relating thereto, including, without limitation,
the fact that discussions are taking place with respect thereto or the status
thereof, or the fact that Proprietary Information has been made available to
Proactive or its Representatives. Proactive shall be responsible for any breach
of the terms of this letter agreement by it and secondarily responsible for any
breach of the terms of this letter agreement by its Representatives.
In the event that Proactive or any of its Representatives are
requested pursuant to, or required by, applicable law or regulation (including,
without limitation, any rule, regulation or policy statement of any national
securities exchange, market or automated quotation system on which any of
Proactive's securities are listed or quoted) or by legal process to disclose any
Proprietary Information or any other information concerning DTM or the Proposed
Transaction, Proactive shall provide DTM with prompt notice of such request or
requirement in order to enable DTM, at its cost, (i) to seek an appropriate
protective order or other remedy, (ii) to consult with Proactive with respect to
Proactive's taking steps to resist or narrow the scope of such request or legal
process, or (iii) to waive compliance, in whole or in part, with the terms of
this letter agreement. In the event that such protective order or other remedy
is not obtained, or DTM waives compliance, in whole or in part, with the terms
of this letter agreement, Proactive or its Representative shall use good faith
efforts to disclose only that portion of the Proprietary Information which is
legally required to be disclosed and to ensure
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Confidentiality Agreement
April 24, 1998
Page 3
that all Proprietary Information that is so disclosed will be accorded
confidential treatment to the fullest extent available. In the event that
Proactive or its Representatives, as the case may be, shall have complied with
the provisions of this paragraph, such disclosure may be made by Proactive or
its Representatives, as applicable, without any liability hereunder.
For a period (the "Restricted Period") commencing with the date of
this letter agreement and ending on the earlier of (i) the second anniversary of
the date of this letter agreement and (ii) the occurrence of a "Significant
Event" (as defined below), neither Proactive nor any of its Representatives
shall, without the prior written consent of DTM's Board of Directors or any
committee thereof delegated the responsibility for such matters:
(a) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or
direct or indirect rights to acquire any voting securities of DTM
or any subsidiary of DTM, or of any successor to or person in
control of DTM, or any assets of DTM or any subsidiary or
division of DTM or of any such successor or controlling person
(excluding in any event DTM voting securities indirectly held
through mutual funds and other such passive investment vehicles
over which neither Proactive nor any of its affiliates or
Representatives retain any investment discretion);
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in
the rules of the Securities and Exchange Commission (the "SEC")),
or seek to advise or influence any person or entity with respect
to the voting of any voting securities of DTM;
(c) make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any
extraordinary transaction involving DTM or any of its securities
or assets;
(d) form, join or in any way participate in a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), in connection with any of the
foregoing;
(e) otherwise act or seek to control or influence the management,
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Confidentiality Agreement
April 24, 1998
Page 4
Board of Directors or policies of DTM;
(f) take any action that could reasonably be expected to require DTM
to make a public announcement regarding the possibility of any of
the events described in clauses (a) through (e) above; or
(g) request DTM or any of its Representatives, directly or
indirectly, to amend or waive any provision of this paragraph.
During the Restricted Period, Proactive shall promptly advise DTM of any inquiry
or proposal made to it with respect to any of the foregoing. For purposes of
this letter agreement, (i) "Significant Event" shall mean, with respect to DTM,
any of (A) the acquisition by any person or "13D Group" (as defined below) of
beneficial ownership of "Voting Securities" (as defined below) of DTM
representing 15% or more of the then outstanding Voting Securities of DTM; (B)
the announcement or commencement by any person or 13D Group of a tender or
exchange offer to acquire Voting Securities of DTM which, if successful, would
result in such person or 13D Group owning, when combined with any other Voting
Securities of DTM owned by such person or 13D Group, 15% or more of the then
outstanding Voting Securities of DTM; or (C) the entry into by DTM, or
determination by DTM to seek to enter into, any merger, sale or other business
combination transaction pursuant to which the outstanding shares of common stock
of DTM would be converted into cash or securities of another person or 13D Group
or 50% or more of the then outstanding shares of common stock of DTM would be
owned by persons other than the then current holders of shares of common stock
of DTM, or which would result in all or a substantial portion of DTM's assets
being sold to any person or 13D Group; (ii) "Voting Securities" shall mean, with
respect to DTM, at any time shares of any class of capital stock of DTM which
are then entitled to vote generally in the election of directors; provided, that
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for purposes of this definition any securities which at such time are
convertible or exchangeable into or exercisable for shares of common stock of
DTM shall be deemed to have been so converted, exchanged or exercised; and (iii)
"13D Group" shall mean, with respect to the Voting Securities of DTM, any group
of persons formed for the purpose of acquiring, holding, voting or disposing of
such Voting Securities which would required under Section 13(d) of the Exchange
Act and the rules and regulations thereunder to file a statement on Schedule 13D
with the SEC as a "person" within the meaning of Section 13(d)(3) of the
Exchange Act if such group beneficially owned Voting Securities representing
more than 5% of the total combined voting power of all such Voting Securities
then outstanding.
Proactive agrees that neither it nor its Representatives will at any
time from the date of this letter agreement until the two year anniversary of
the date of this letter agreement, directly or indirectly, solicit for
employment any employee of DTM who serves in an executive
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Confidentiality Agreement
April 24, 1998
Page 5
capacity or who is identified by such party as a result of its evaluation or
otherwise in connection with the Proposed Transaction.
To the extent that any Proprietary Information may include material
subject to the attorney-client privilege, work product doctrine or any other
applicable privilege concerning pending or threatened legal proceedings or
governmental investigations, the parties understand and agree that they have a
commonality of interest with respect to such matters and it is their desire,
intention and mutual understanding that the sharing of such material is not
intended to, and shall not, waive or diminish in any way the confidentiality of
such material or its continued protection under the attorney-client privilege,
work product doctrine or other applicable privilege. All Proprietary
Information provided by a party that is entitled to protection under the
attorney-client privilege, work product doctrine or other applicable privilege
shall remain entitled to such protection under these privileges to the fullest
extent available under applicable law. Nothing in this letter agreement
obligates any party to reveal material subject to the attorney-client privilege,
work product doctrine or any other applicable privilege.
If either party hereto shall determine that it does not wish to
proceed with the Proposed Transaction, such party shall promptly advise the
other party of that decision. In that case, or in the event that DTM, in its
sole discretion, so requests or the Proposed Transaction is not consummated by
Proactive, Proactive shall, upon DTM's written request, promptly deliver to DTM
all Proprietary Information, and, at Proactive's election, return or destroy
(provided that any such destruction shall be certified by a duly authorized
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Representative of Proactive) all copies, reproductions, summaries, analyses or
extracts thereof, including any electronic or computer file copies, or based
thereon in Proactive's possession or in the possession of any Representative of
Proactive.
Subject to the terms and conditions of a definitive agreement
regarding the Proposed Transaction and without prejudice thereto, Proactive
acknowledges that neither DTM nor its Representatives nor any of the officers,
directors, employees, agents or controlling persons of such Representatives
makes any express or implied representation or warranty as to the completeness
of the Proprietary Information. Proactive shall not be entitled to rely on the
completeness of any Proprietary Information, but shall be entitled to rely
solely on such representations and warranties regarding the completeness of the
Proprietary Information as may be made to it in any definitive agreement
relating to the Proposed Transaction, subject to the terms and conditions of
such agreement.
Until a definitive agreement regarding the Proposed Transaction has
been executed by the parties hereto, neither party hereto shall be under any
legal obligation or have any liability to the other party of any nature
whatsoever with respect to the Proposed Transaction by
<PAGE>
Confidentiality Agreement
April 24, 1998
Page 6
virtue of this letter agreement or otherwise (other than with respect to the
confidentiality and other matters set forth herein). DTM and its
Representatives (i) may conduct the process that may or may not result in the
Proposed Transaction in such manner as DTM, in its sole discretion, may
determine (including, without limitation, negotiating and entering into a
definitive agreement with any third party without notice to Proactive) and (ii)
reserves the right to change (in its sole discretion, at any time and without
notice to Proactive) the procedures relating to the consideration of the
Proposed Transaction (including, without limitation, terminating all further
discussions with Proactive and requesting that Proactive return or destroy the
Proprietary Information as described above).
Without prejudice to the rights and remedies otherwise available to
DTM, DTM shall be entitled to equitable relief by way of injunction or otherwise
if Proactive or any of its Representatives breach or threaten to breach any of
the provisions of this letter agreement. In the event of litigation relating to
this letter agreement, if a court of competent jurisdiction determines in a
final order from which there is no appeal that this letter agreement has been
breached by Proactive or by its Representatives, the breaching party will
reimburse DTM for its costs and expenses (including, without limitation,
reasonable legal fees and expenses) incurred in connection with the enforcement
of this letter agreement and such litigation.
It is further understood and agreed that no failure or delay by DTM in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of Texas, without giving effect to its principles or
rules regarding conflicts of laws, other than such principles directing
application of Texas law. Each party hereby consents to the institution and
resolution of any action or proceeding of any kind or nature with respect to or
arising out of this agreement brought by any party hereto in the federal or
state courts located within the State of Texas.
This letter agreement contains the entire agreement between the
parties hereto concerning confidentiality of the Proprietary Information, and no
modification of this letter agreement or waiver of the terms and conditions
hereof shall be binding upon either party hereto, unless approved in writing by
each such party.
<PAGE>
Confidentiality Agreement
April 24, 1998
Page 7
Please confirm your agreement with the foregoing by signing and
returning to the undersigned the duplicate copy of this letter enclosed
herewith.
DTM CORPORATION
By: /s/ JOHN S. MURCHISON, III
_________________________________________
John S. Murchison, III
President and Chief Executive Officer
ACCEPTED AND AGREED as of
the date hereof:
PROACTIVE FINANCE GROUP, LLC
By: /s/ ANTHONY MARRIOTTI
_____________________________________
Name: Anthony Marriotti
Title: President
