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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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) December 31, 1998
STRATASYS, INC.
(Exact name of registrant as specified in charter)
Delaware 1-13400 36-3658792
(State or other jurisdiction (Commission) (IRS Employer
of incorporation) File Number) Identification No.)
14950 Martin Drive, Eden Prairie, Minnesota 55344
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 937-3000
N/A
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On December 31, 1998 (the "Effective Date"), Stratasys, Inc. (the
"Registrant") purchased certain rapid prototyping technology (the "Technology")
of SEK Technologies LLC ("SEK"), pursuant to a Technology Sale and Assignment
Agreement (the "Agreement") dated as of December 21, 1998.
The Technology consisted of (1) technological assets, including
software, documentation and know-how and (2) tangible personal property,
including machinery, equipment, supplies, tools, prototypes and components of
the rapid prototyping technology and other related assets (the "Non-Technology
Assets"). The Registrant intends to use the Non-Technology Assets in connection
with the continuing development of the Technology.
In consideration for the Technology, the Registrant agreed to pay SEK
$5,945,709.04 in cash and to issue Warrants to purchase 128,000 shares of the
Registrant's common stock, $.01 par value, exercisable at $13.875 per share. The
purchase price was based principally on the amount that the Registrant would
have paid had it exercised an existing option to purchase the Technology. The
Registrant has paid the purchase price of the Technology from cash on hand. SEK
has also submitted an invoice to the Registrant for $519,000 for ongoing
development work with respect to the Technology.
Scott Crump, the Chairman of the Board, President, Chief Executive
Officer, and Treasurer of the Registrant, and Arnold Wasserman, a Director of
the Registrant, each owns one Investment Unit in SEK, each of which constitutes
approximately 6.66% of all SEK Investment Units. Mr. Crump is also a member of
SEK's governing board, which consists of five members.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
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(c) Exhibits.
4.1. Form of Warrant issued by the Registrant to SEK on
January 4, 1998.
10.1. Technology Sale and Assignment Agreement, between the
Registrant and SEK, dated as of December 21, 1998
(without Schedules).*
10.2 User Agreement, between the Registrant and SEK, dated
as of August 21, 1997 (without Schedules).*
10.3 Option Agreement, between the Registrant and SEK,
dated as of August 21, 1997 (without Exhibit).*
10.4 Form of Registration Rights Agreement, between the
Registrant and holders of Investment Unit in SEK,
dated as of January 4, 1999.
99.1. Press Release of the Registrant, dated January 4,
1999.
* Confidential treatment has been requested from the Securities and
Exchange Commission for portions of this exhibit.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Dated: January 15, 1999
STRATASYS, INC.
By: /s/ S. Scott Crump
----------------------------
S. Scott Crump
President
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EXHIBIT INDEX
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Exhibit No. Description
----------- -----------
4.1. Form of Warrant issued by the Registrant to SEK on
January 4, 1998.
10.1. Technology Sale and Assignment Agreement, between the
Registrant and SEK, dated as of December 21, 1998
(without Schedules).*
10.2 User Agreement, between the Registrant and SEK, dated
as of August 21, 1997 (without Schedules).*
10.3 Option Agreement, between the Registrant and SEK,
dated as of August 21, 1997 (without Exhibit).*
10.4 Form of Registration Rights Agreement, between the
Registrant and holders of Investment Unit in SEK,
dated as of January 4, 1999.
99.1. Press Release of the Registrant, dated January 4,
1999.
* Confidential treatment has been requested from the Securities and
Exchange Commission for portions of this exhibit.
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EXHIBIT 4.1
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
DISPOSED OF, AND NO TRANSFER OF THE SECURITIES WILL BE MADE BY THE COMPANY OR
ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT NO. SEK-___ _________ Shares
Void after 5:00 p.m. Minnesota Time, January 4, 2002.
WARRANT CERTIFICATE
OF
STRATASYS, INC.
This Is To Certify That, FOR VALUE RECEIVED, _____, with an address at
___________________ (the "Holder"), is entitled to purchase, subject to the
provisions of this Warrant, from Stratasys, Inc., a Delaware corporation (the
"Company"), Sixteen Thousand (16,000) fully paid, validly issued and
non-assessable shares of Common Stock ("Common Stock") of the Company, without
par value, at an exercise price of $13.875 per share at any time or from time to
time during the period from the date hereof until 5:00 p.m. Minnesota time, on
January 4, 2002. The shares of Common Stock deliverable upon such exercise are
hereinafter sometimes referred to as "Warrant Shares", and the exercise price of
a Warrant Share is hereinafter sometimes referred to as the "Exercise Price".
(a) EXERCISE OF WARRANT. This Warrant may be exercised, at the option
of the Holder, in whole or in part (but no partial exercise shall be for less
than 500 Warrant Shares) at any time or from time to time on or after the date
hereof and until January 4, 2002; provided, however, that if such day is a day
on which banking institutions in the State of Minnesota are authorized by law to
close, then this Warrant may be exercised on the next succeeding day which shall
not be such a day. This
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Warrant may be exercised by presentation and surrender of this warrant
certificate (the "Warrant Certificate") to the Company at its principal office
or to the Company's warrant agent, if any has been so appointed, with the
Purchase Form annexed hereto as EXHIBIT "1" duly executed and accompanied by
payment of the Exercise Price, in cash or by certified or bank cashier's check,
for the number of Warrant Shares specified in such form. The Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
date of any such exercise, provided that such exercise is in accordance with the
provisions set forth herein. As soon as practicable after each such exercise of
the Warrant, the Company shall issue or cause to be issued and delivered to the
Holder a certificate or certificates for the Warrant Shares, registered in the
name of the Holder. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver new Warrant(s) evidencing the rights of the holder thereof to purchase
the balance of the Warrant Shares purchasable thereunder in such denominations
requested by the Holder, but not to purchase less than 500 Warrant Shares or the
balance if less. Upon exercise, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such Warrant Shares shall not then be
physically delivered to the Holder.
(b) RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
this Warrant.
(c) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share remaining upon exercise hereof, the Company
shall issue the next lower number of full shares and, if the Holder has paid any
amount in excess of the exercise price for such lower number of full shares,
return to the Holder such amount.
(d) LOSS OF WARRANT. Upon receipt by the Company or its warrant agent,
if any, of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in
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the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant, if
mutilated, the Company will execute and deliver a new Warrant of like tenor and
date.
(e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.
The acceptance of this Warrant by the Holder shall be deemed consent by the
Holder for the Company to enter into any warrant agreement with a warrant agent,
provided such warrant agreement does not adversely affect any of the rights of
the Holder set forth in this Warrant.
(f) ANTI-DILUTION PROVISIONS. After each adjustment of the Exercise
Price pursuant to this Section (f), the number of shares of Common Stock
purchasable upon the exercise of the Warrant shall be the number of Warrant
Shares receivable upon exercise hereof prior to such adjustment multiplied by a
fraction, the numerator of which shall be the original Exercise Price as defined
above and the denominator of which shall be such adjusted Exercise Price. The
Exercise Price shall be subject to adjustment as set forth below:
(i) In case the Company shall hereafter (A) pay a dividend or
make a distribution on its Common Stock in shares of its capital stock (whether
shares of Common Stock or of capital stock of any other class), (B) subdivide
its outstanding shares of Common Stock, (C) combine its outstanding shares of
Common Stock into a smaller number of shares or (D) issue by reclassification of
its shares of Common Stock any shares of capital stock of the Company, the
Exercise Price in effect immediately prior to such action shall be adjusted so
that the Holder, upon exercise, shall be entitled to receive the number of
shares of capital stock of the Company which the Holder would
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have owned immediately following such action had such Warrant been exercised
immediately prior thereto. An adjustment made pursuant to this subsection shall
become effective immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.
(ii) No adjustment in the Exercise Price shall be required to be
made unless such adjustment would require an increase or decrease of at least
$.01; provided, however, that any adjustments which by reason of this subsection
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section (f) shall be made
to the nearest cent or to the nearest one-one hundredth of a share, as the case
may be, but in no event shall the Company be obligated to issue fractional
shares upon the exercise of any Warrant.
(iii) No adjustment of the Exercise Price shall be made except on
the conditions set forth in this Section (f). Without limitation to the
foregoing, there shall be no adjustment pursuant to this Section (f) should the
Company issue any capital stock for cash or other consideration on terms
approved by the Board of Directors.
(iv) In case of any (A) reclassification or change of outstanding
shares of Common Stock issuable upon exercise of this Warrant, (B) consolidation
or merger of the Company with or into another corporation where the Company is
not the surviving entity or (C) sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety, then, as
a condition of such reclassification, change, consolidation, merger, sale or
conveyance, the Company, or such successor or purchasing corporation, as the
case may be, shall make lawful and adequate provision whereby the Holder of the
Warrant shall have the right thereafter to receive on exercise of such Warrant
the kind and amount of shares of stock and other
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securities and property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock issuable upon exercise of such Warrant immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance. Such
provisions shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided elsewhere in this
Section (f). The above provisions of this Section (f) shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales or conveyances.
(g) TRANSFERABILITY; INVESTMENT REPRESENTATIONS. This Warrant shall be
fully transferrable, except as provided herein. No transfer may take place in
violation of any securities laws or regulations. The Holder, by acceptance
hereof, represents and warrants that (a) it is acquiring this Warrant for its
own account for investment purposes only and not with a view to its resale or
distribution and (b) it has no present intention to resell or otherwise dispose
of all or part of this Warrant, other than to officers, directors, employees and
affiliates of the Holder. Other than pursuant to registration under federal and
applicable state securities laws or an exemption from such registration, the
availability of which the Company shall determine in its reasonable discretion,
neither this Warrant nor any Warrant Shares may be sold, pledged, assigned or
otherwise disposed of (whether voluntarily or involuntarily). The Company may
condition such sale, pledge, assignment or other disposition on the receipt from
the party to whom this Warrant is to be transferred or to whom Warrant Shares
are to be issued or transferred of any representations and agreements requested
by the Company in order to permit such issuance or transfer to be made pursuant
to exemptions from registration under federal and applicable state securities
laws. Each certificate representing this Warrant (or any part thereof) and any
Warrant Shares shall bear appropriate legends setting forth these restrictions
on transferability. The Holder, by acceptance hereof, agrees to
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give written notice to the Company before transferring this Warrant or any
Warrant Shares of the Holder's intention to do so, describing briefly the manner
of any proposed transfer. Within ten (10) days after receiving such written
notice, the Company shall notify the Holder as to whether such transfer may be
effected and of the conditions to any such transfer. Upon transfer, the
transferee(s) shall become Holders hereunder.
(h) CONVERSION RIGHTS.
(i) In lieu of exercise of any portion of the Warrants as
provided in Section (a) hereof, the Warrants, or any portion thereof, may, at
the election of the Holder, be converted into the nearest whole number of shares
of Common Stock equal to: (1) the product of (a) the number of Warrants to be so
converted, (b) the number of shares of Common Stock then issuable upon the
exercise of each Warrant and (c) the excess, if any, of (i) the Market Price Per
Share (as determined pursuant to Section 9.2) with respect to the date of
conversion over (ii) the Purchase Price in effect on the business day next
preceding the date of conversion, divided by (2) the Market Price Per Share with
respect to the date of conversion.
(ii) The conversion rights provided under this Section (h) may be
exercised in whole or in part and at any time and from time to time while any
Warrants remain outstanding. In order to exercise the conversion privilege, the
Holder shall surrender to the Company, at its offices, this Warrant Certificate
accompanied by a duly completed Notice of Conversion in the form attached hereto
as EXHIBIT "2". The Warrants (or so much thereof as shall have been surrendered
for conversion) shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Warrant Certificate for
conversion in accordance with the foregoing provisions. As promptly as
practicable on or after the conversion date, the
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Company shall issue and shall deliver to the Holder (i) a certificate or
certificates representing the number of shares of Common Stock to which the
Holder shall be entitled as a result of the conversion, and (ii) if the Warrant
Certificate is being converted in part only, a new certificate of like tenor and
date for the balance of the unconverted portion of the Warrant Certificate.
(i) REGISTRATION RIGHTS. The Company hereby agrees to enter into a
registration rights agreement with the Holder, a copy of which is attached
hereto as EXHIBIT "3" and made a part hereof (the "Registration Rights
Agreement"). The Registration Rights Agreement shall entitle the Holder of the
Warrants to one demand registration and two piggyback registration rights.
(j) NOTICES. All notices and other communications which are required
or may be given under this Warrant shall be in writing and shall be deemed to
have been duly given when delivered in person or transmitted by fax, one (1) day
after being sent by overnight courier service or three (3) days after being
mailed, first-class postage prepaid, in the case of the Company to Stratasys,
Inc., 14950 Martin Drive, Eden Prairie, MN 55344, and in the case of the Holder
to the address set forth herein, with a copy to Snow Becker Krauss P.C., 605
Third Avenue, New York, New York 10158, or to such other address as such party
shall have specified by notice to the other party hereto. If notice is given by
registered or certified first class mail, postage prepaid, return receipt
requested, the return receipt shall be conclusive evidence of the notice having
been mailed on the date set forth.
(k) MISCELLANEOUS. This Warrant contains the entire agreement and
supersedes all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof. This Warrant may not
be changed orally, but only by an agreement in writing signed by the party
against
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whom enforcement is sought; provided however, that this Warrant may be amended
or modified without the consent of the Holder if such amendment or modification
does not adversely affect the rights of the Holder hereunder. This Warrant will
not be assigned by either party hereto and shall be interpreted under the laws
of the State of Minnesota without application to the principles of conflicts of
laws.
STRATASYS, INC.
By:
--------------
S. Scott Crump
President
Dated:
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EXHIBIT 1
PURCHASE FORM
Dated _________________,199_
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing _________________ shares of Common Stock and hereby
makes payment of $_________________ in payment of the actual exercise price
thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name ___________________________________________________________________________
(Please typewrite or print in block letters)
Address ________________________________________________________________________
Social Security or TIN Number __________________________________________________
Signature ______________________________________________________
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EXHIBIT 2
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section
(h) of the Warrant Certificate accompanying this Notice of Conversion, Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Common Stock of the Company
(the "Shares").
The number of Shares to be received by the undersigned shall be calculated
in accordance with the provisions of Section (h)of the accompanying Warrant
Certificate.
Date:__________________________________
Name of Holder ________________________
Signature _____________________________
Address: ______________________________
_______________________________________
_______________________________________
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EXHIBIT 10.1
TECHNOLOGY SALE AND ASSIGNMENT AGREEMENT
BETWEEN
STRATASYS, INC.
("BUYER")
AND
SEK TECHNOLOGIES, LLC
("SELLER")
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TECHNOLOGY SALE AND ASSIGNMENT AGREEMENT
TECHNOLOGY SALE AND ASSIGNMENT AGREEMENT ("Agreement"), dated as of
December 21, 1998, by and between STRATASYS, INC., a Delaware corporation
("Buyer"), and SEK TECHNOLOGIES LLC, a Minnesota limited liability company
("Seller").
Preliminary Statement
Buyer and Seller are parties to an Option Agreement, dated August 21, 1997,
as amended by the First and Second Amendments thereto, dated September 1, 1998
and November 1, 1998 (the "Option Agreement"), pursuant to which Seller agreed
to use its best efforts to develop the Device (as defined in the Option
Agreement) and granted Buyer an option to purchase either the Device Rights or
the Ownership Interests (as such terms are defined in the Option Agreement).
Pursuant to a User Agreement, dated August 21, 1997 (the "User Agreement"),
Buyer agreed to provide Seller with certain Documentation (as defined in the
User Agreement) and Equipment (as defined in the User Agreement) solely for the
purposes of developing the Beta Version Advanced Modeler (as defined in the User
Agreement), and Seller agreed to use its best efforts to use such Documentation
and Equipment to develop the Beta Version Advanced Modeler and the New
Intellectual Property (as defined in the User Agreement). Pursuant to a License
Agreement, dated August 21, 1997 (the "License Agreement"), Buyer also licensed
the Owner Intellectual Property (as defined in the License Agreement) to Seller
for use in the development of the Beta Version Advanced Modeler.
As of the date of this Agreement, Seller has not developed the Beta Version
Advanced Modeler. Nevertheless, Buyer desires to purchase from Seller, and
Seller desires to sell to Buyer, the Device Rights on the terms and conditions
of this Agreement, which are different from those of the Option Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, and upon the terms and
subject to the conditions set forth in this Agreement, the parties agree as
follows:
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1. Sale of Device Rights.
1.1 On the terms and subject to the conditions set forth in this
Agreement, Seller agrees to sell, assign, transfer and convey to Buyer, and
Buyer agrees to purchase from Seller, at the closing referred to in Section 4
below (the "Closing"), all of the Device Rights, including, without limitation,
the Device, the Tooling and the Deliverables described on Schedule 1.1 hereof,
free and clear of all claims, liabilities, obligations, mortgages, liens,
security interests, charges or other encumbrances of any nature whatsoever
(hereinafter referred to collectively as "Liens"), other than the Permitted
Liens set forth in Schedule 1.1A.
1.2 Anything herein to the contrary notwithstanding, the Device
Rights do not include the assets and properties of Seller listed on Schedule 1.2
(the "Excluded Assets").
2. Assumption of Liabilities.
2.1 Buyer shall assume no obligations or liabilities of Seller in
connection with Seller's sale and assignment of the Device Rights hereunder.
2.2 Seller shall remain responsible for all claims, liabilities and
obligations of Seller with respect to the Device Rights or arising out of or
relating to the operation of Seller's business. Seller hereby agrees to
indemnify and hold Buyer harmless from and against any and all costs, losses,
damages, liabilities, claims and expenses that may be asserted by third parties
against Buyer arising out of or resulting from the Device Rights or the
operation of Seller's business and all other liabilities of Seller as provided
in Section 10 hereof.
3. Purchase Price.
3.1 In consideration for the sale of the Device Rights by Seller to
Buyer, on January 4, 1998, Buyer shall (i) pay to Seller or its designees Five
Million Nine Hundred Forty Five Thousand Seven Hundred Nine and 04/100 Dollars
($5,945,709.04)(the "Purchase Price"), by wire transfer in accordance with
Seller's instructions and (ii) deliver to Seller Warrants to purchase 128,000
shares of Buyer's Common Stock substantially in the form of Schedule 3.1.2 to
the Option Agreement registered in the name of Seller or its designees.
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4. Closing.
4.1 The closing of the purchase and sale of the Device Rights and the
other transactions contemplated by this Agreement (the "Closing") shall take
place at 3:00 P.M. New York time on December 31, 1998, or at such other date and
time mutually acceptable to Buyer and Seller (the "Closing Date"), at the
offices of Snow Becker Krauss P.C., 605 Third Avenue, 25th Floor, New York, New
York 10158.
4.2 At the Closing, Seller shall deliver or cause to be delivered to
Buyer:
4.2.1 A Bill of Sale, duly executed on behalf of Seller with respect
to the Device Rights, substantially in the form of Exhibit 4.2.1.
4.2.2 One or more Instruments of Assignment as shall be necessary or
appropriate to assign to Buyer Seller's rights in and to any of the Device
Rights not transferred to Buyer under the Bill of Sale, duly executed on behalf
of Seller, substantially in the form of Exhibit 4.2.2.
4.2.3 Such other agreements, documents and instruments as shall be
reasonably necessary or appropriate to effect the transactions contemplated by
this Agreement.
4.3 At the Closing, Buyer shall deliver or cause to be delivered to
Seller such agreements, documents and instruments as shall be necessary or
appropriate to effect the transactions contemplated by this Agreement.
4.4 Title and risk of loss with respect to the Device Rights and
Buyer's right to operate and control the Device will pass from Seller to Buyer
as of the Closing Date.
4.5 The parties expect that Seller will continue to perform services
for Buyer with respect to the Device after the Closing. Therefore, Seller and
Buyer have agreed to extend the term of the User Agreement in accordance with an
Amendment to User Agreement, substantially in the form of Exhibit 4.5 hereto
(the "User Agreement Amendment"). At the Closing, Buyer and Seller will each
execute and deliver to the other a User Agreement Amendment. In addition, all of
the Documentation, Equipment, and Device Rights will remain on Seller's premises
until Buyer instructs Seller to deliver them in accordance with Buyer's
instructions. Promptly after a written request from Buyer, Seller shall deliver
all Documentation, Equipment and Device Rights in its possession to Buyer or its
designees in accordance with Buyer's written instructions at the cost and
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expense of Buyer. With respect to the Device Rights that cannot be physically
delivered to Buyer because they are in the possession of third parties or
otherwise, Seller shall give irrevocable instructions to the party in possession
of such Device Rights, with copies to Buyer, that all right, title and interest
in such Device Rights have been vested in Buyer, and that the same are to be
held for Buyer's exclusive use and benefit.
5. Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
5.1 Seller is a limited liability company, duly organized, validly
existing and in good standing under the laws of Minnesota and has all requisite
corporate power and authority to own, operate and lease its properties and to
conduct its business as now conducted and to enter into this Agreement,
consummate the transactions contemplated by this Agreement and perform its
obligations under this Agreement.
5.2 The execution and delivery by Seller of this Agreement and the
consummation of the transactions contemplated by this Agreement, and the
performance of its obligations under this Agreement have been duly and validly
authorized by all necessary action on the part of Seller, including, but not
limited to, approval of Seller's Board of Governors and members as necessary.
This Agreement has been duly executed and delivered by the Seller and
constitutes the legal, valid and binding obligation of Seller, enforceable in
accordance with its terms. No consent, approval, or authorization of, notice to,
or declaration, filing or registration with, any governmental body is required
in connection with the execution, delivery and performance of this Agreement, or
the consummation of the transactions contemplated by this Agreement.
5.3 The execution and delivery of this Agreement, and the fulfillment
of the terms and conditions herein set forth and the consummation of the
transactions herein contemplated, will not (i) violate or conflict with any
material provision of the First Amended Member Control Agreement of Seller as in
effect on the date hereof or (ii) violate, result in a material breach of,
conflict with, or (with or without notice or the lapse of time or both) entitle
any party to terminate, cancel, accelerate or call a default under the terms,
conditions or provisions of any material agreement, contract, instrument, lease,
license, note, bond, mortgage, indenture or other obligation
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to which Seller is a party or by which Seller or any of its assets may be bound
or (iii) violate, result in a breach of, or conflict with any material statute,
rule, regulation, order, judgment or decree applicable to Seller, its assets or
its business, other than such violations, breaches or conflicts which
individually or in the aggregate will not have a material adverse effect on the
Buyer's use of the Device Rights ("Material Adverse Effect"). No consent of any
party to any agreement, contract, instrument, lease, license, note, bond,
mortgage, indenture or other obligation to which Seller is a party, or by which
Seller or any of its assets is subject, is required for the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby and the continuation thereof after the Closing, other than
those consents, the absence of which will not have a Material Adverse Effect..
5.4 Schedule 1.1 contains a true and complete list of all the Device
Rights owned by Seller as of the hereof date.
5.5 Seller has good and marketable title to all of the Device Rights
free and clear of all Liens other than the Permitted Liens. Following the
Closing, Buyer will have good and marketable title to all the Device Rights.
5.6 There are no actions, suits, claims or legal, administrative or
arbitration proceedings or investigations pending, or to its knowledge
threatened, against, involving or affecting the Device Rights, or which relate
to any Device having been assembled, produced, distributed or sold by Seller and
alleged to have been defective or improperly designed, assembled or produced.
Buyer is buying a project in progress. Consequently, the Device Rights are being
sold as is without representation or warranty of any kind, except for those
express warranties contained herein. Seller specifically disclaims any and all
implied warranties, including any implied warranties of merchantability or
fitness for a particular purpose. Seller disclaims any warranty pertaining to
infringement or the absence thereof. Buyer has inspected the Device Rights prior
to the date hereof. Seller has used reasonable efforts to disclose to Buyer any
state of facts or of the occurrence of any event known to Seller which Seller
reasonably believes is likely to form the basis of any thereof not previously
disclosed by Seller to Buyer. To the best of Seller's knowledge, there are no
outstanding orders, writs, injunctions or decrees of any court, governmental
agency or arbitration tribunal against, involving or affecting, the Device
Rights.
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<PAGE> 7
5.7 To the best of Seller's knowledge, no employee, agent or
representative of Seller has in his possession confidential information of a
nature that would allow such person or persons to duplicate Seller's products
and/or technology, unless such person has signed or is subject to a
confidentiality agreement with Seller. For purposes of this
Agreement,"confidential information" shall mean information generally
unavailable to the public that has been created, discovered, developed or
otherwise become known to Seller or in which property rights have been assigned
or otherwise conveyed to Seller, which information has economic value or
potential economic value to the business in which Seller is or will be engaged.
6. Representations and Warranties of Buyer. Buyer represents and warrants
to Seller as follows:
6.1 Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
6.2 Buyer has full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated by this Agreement and
to perform its obligations under this Agreement.
6.3 The execution and delivery by Buyer of this Agreement, and the
consummation by Buyer of the transactions contemplated by this Agreement and the
performance by Buyer of its respective obligations under this Agreement have
been duly and validly authorized by all necessary corporate action on the part
of Buyer. This Agreement has been duly executed and delivered by Buyer and
constitutes a legal, valid and binding obligation of Buyer, enforceable against
it in accordance with its terms.
6.4 Buyer has all requisite corporate power and authority necessary
or advisable to own or hold its properties and conduct its business and hold all
material licenses, permits and other required authorizations and approvals from
governmental authorities and has made all material registrations and given all
notifications required under federal, state or local law that are necessary or
advisable for the conduct of its business.
6.5 The execution, delivery and performance of this Agreement will
not (i) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a
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<PAGE> 8
default or give rise to any right of termination, cancellation or acceleration
under, or result in the creation of any lien or encumbrance on or against any of
the properties of Buyer pursuant to any of the terms or conditions of any note,
bond, mortgage, indenture, license, agreement or other instrument or obligation
to which Buyer is a party or by which any of them or any of its properties or
assets may be bound, (ii) violate any statute, law, rule, regulation, writ,
injunction, judgement, order or decree of any governmental authority, binding on
Buyer or any of its properties or assets, or (iii) result in or give rise
(whether upon demand by the holder of any such securities or by the terms of any
such security) to the issuance of any additional capital stock of Buyer or
accelerate or alter the conversion rights of any holder of any securities
exercisable into or convertible for shares of capital stock of Buyer, other than
such violation, breach, default, issuance or acceleration which individually or
in the aggregate would not have a Material Adverse Effect on the Buyer's ability
to fulfill its obligations under this Agreement.
7. Covenants of Seller.
Between the date hereof and the Closing Date:
7.1 Seller will allow Buyer and its representatives full access, at
reasonable times, to the books, records and properties of Seller relating to the
Device Rights and furnish such information concerning the Device Rights as Buyer
may reasonably request from time to time.
7.2 Seller shall promptly notify Buyer of any event, occurrence or
transaction that would have been required to have been disclosed on any Schedule
to this Agreement, had such event, occurrence or transaction existed on the date
hereof, including, without limitation, any actions, claims, or legal,
administrative or arbitration proceedings, or investigations, threatened or
commenced, which, if pending on the date first set forth above, would have been
required to be described in any Schedule hereto, or which otherwise relate to or
affect the Device Rights in any material respect. Seller shall use reasonable
commercial efforts to defend against any such actions, claims, proceedings or
investigations.
7.3 Seller and Buyer waive compliance with the California State Bulk
Sales law, and the rules and regulations promulgated thereunder. Seller will
comply with the provisions of the sales and use tax law in each state where it
is required to collect such taxes arising out of this
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<PAGE> 9
Agreement. The Seller hereby agrees to indemnify and hold Buyer harmless from
and against any and all costs, losses, damages, liabilities, claims and expenses
which may be asserted by third parties against Buyer arising out of or resulting
from the failure of Seller to comply with any such law or laws, in the manner
described in Section 10.1.
7.4 Seller will:
(a) use reasonable commercial efforts to operate its business
only in the usual, regular and ordinary course consistent with reasonable
business practice;
(b) use reasonable commercial efforts as to events within
Seller's control to prevent the occurrence of any change or event that would
prevent any of the representations and warranties of Seller contained herein
from being true at and as of the Closing Date with the same effect as though
such representations and warranties had been made at and as of the Closing Date;
(c) pay and discharge all costs and expenses of carrying on its
business consistent with past business practices;
(d) not create or suffer any Liens upon any of the Device Rights
other than Permitted Liens;
(e) not remove, sell, transfer or otherwise dispose of any of
the Device Rights or remove any such personal property or assets from the
premises where such personal property or other assets are located on the date of
execution of this Agreement and not enter into any other transaction, except in
the ordinary course of business consistent with past practice; and
(f) not modify or change in any material respect or terminate
any existing material license, lease, contract or other document relating to the
Device Rights other than in the ordinary course of business consistent with past
practice.
7.5 Seller will update by amendments or supplements each of the
Schedules and any other written disclosure in writing from Seller to reflect any
change in the information set forth in said Schedules or other disclosure.
Seller hereby represents and warrants that such Schedules and such written
disclosures, as so amended or supplemented, shall be true, correct and complete
in all material respects as of the date or dates thereof.
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<PAGE> 10
8. Buyer's Closing Conditions. The obligation of Buyer to close under
this Agreement are subject to the satisfaction at or prior to the Closing of
each of the following conditions (one or more of which may be waived by Buyer):
8.1 The representations and warranties made by Seller in this
Agreement or in any writing pursuant to this Agreement, including, without
limitation, the Schedules or any other documents, certificates or written
statements delivered or to be delivered to Buyer in connection with the
transactions contemplated by this Agreement, shall be true and correct in all
material respects as of the Closing Date as though such representations and
warranties were restated and made at and as of the Closing Date.
8.2 All of the terms, covenants and conditions of this Agreement
required to be complied with by Seller at or prior to the Closing shall have
been duly complied with and Seller shall have furnished Buyer with such other
evidence of compliance as Buyer may reasonably request.
8.3 There shall be no order of any court or governmental body
restraining or prohibiting the transactions contemplated by this Agreement, nor
shall any litigation or other proceeding be pending or threatened against Seller
or Buyer seeking to prohibit or otherwise challenge the consummation of the
transactions contemplated by this Agreement or to obtain substantial damages in
respect thereof.
9. Seller's Closing Conditions. The obligation of Seller to close under
this Agreement is subject to the satisfaction at or prior to the Closing of each
of the following conditions (one or more of which may be waived by Seller):
9.1 The representations and warranties made by Buyer in this
Agreement or in any writing pursuant to this Agreement, including without
limitation, the Schedules or any other documents, certificates or written
statements delivered or to be delivered to Buyer in connection with the
transactions contemplated by this Agreement, shall be true and correct in all
material respects as of the Closing Date as though such representations and
warranties were restated and made at and as of the Closing Date.
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<PAGE> 11
9.2 All of the terms, covenants and conditions of this Agreement
required to be complied with by Buyer at or prior to the Closing shall have been
duly complied with and Buyer shall have furnished Seller with such evidence of
compliance as Seller may reasonably request.
9.3 There shall be no order of any court or governmental body
restraining or prohibiting the transactions contemplated by this Agreement, nor
shall any litigation or other proceeding be pending or threatened against Seller
or Buyer seeking to prohibit or otherwise challenge the consummation of the
transactions contemplated by this Agreement, or to obtain substantial damages in
respect thereof.
10. Indemnities.
10.1 Seller shall indemnify, defend and hold Buyer, and its officers,
directors, employees, agents, successors and permitted assigns, free and
harmless from and against all claims, actions, liabilities and damages
(including reasonable attorneys' fees and expenses) as and when incurred by
reason of (i) the operation of Seller's business prior to the Closing Date; (ii)
any obligations or liabilities of Seller, fixed or contingent, matured or
unmatured, liquidated or unliquidated, or otherwise; (iii) the failure of Seller
to file timely any federal, state, county, local or other excise, franchise,
property, payroll, income, capital stock, sales and use, or other tax returns
which are required to be filed by it relating to the its business or the Device
Rights, whether before or subsequent to the Closing Date, or the failure of
Seller to pay any such taxes when due; (iv) any claims, obligations, liabilities
or commitments made by Seller to present and former employees of Seller, or
otherwise, arising out of or in connection with their employment or pursuant to
any pension, retirement or other employee benefit plan covering employees of
Seller, or the failure to fund properly and adequately the benefits provided
under any such plans; (v) the failure to comply with any applicable bulk sales
provisions in connection with the sale of the Device Rights to Buyer under this
Agreement (regardless of whether or not Seller used its best efforts to satisfy
such provisions or Buyer may have waived as a condition of Closing compliance
with California State Bulk Sales Law); and (vi) the breach by Seller of any of
its representations, warranties or covenants contained in this Agreement or the
failure of Seller to obtain the consent of any person whose consent is required
to effectuate the assignment to Buyer of any of the Device Rights. The aggregate
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<PAGE> 12
amount of indemnification for which Seller is liable in the aggregate shall not
exceed the Purchase Price.
10.2 Buyer agrees to indemnify, defend and hold Seller, and each of
its officers, directors, employees, agents, members successors and assigns, free
and harmless from and against all claims, actions, liabilities and damages
(including reasonable attorneys' fees and expenses) as and when incurred by
reason of (i) the breach by Buyer of any of its representations, warranties or
covenants contained in this Agreement and (ii) the operation of Buyer's business
subsequent to the Closing. The aggregate amount of indemnification for which
Buyer is liable shall not exceed the Purchase Price
10.3 In no event shall either party be liable to the other for special
or consequential damages, including, but not limited to lost profits, loss of
goodwill, loss of reputation, impairment of other goods, work stoppage or breach
of other contract.
10.4 Notwithstanding the foregoing, Seller shall have no liability for
the first $10,000 of the aggregate amount of all claims for which
indemnifications would otherwise be available under Section 10.1.
10.5 If any party seeks indemnification pursuant to Sections 10.1 or
10.2 (the "Indemnified Party") it shall notify the party required to provide
indemnification hereunder (the "Indemnifying Party") of any claim made or action
commenced against the Indemnified Party, within a reasonable time after the
Indemnified Party shall have been notified of the claim or shall have been
served with the summons or other first legal process giving information as to
the nature and basis of the claim. The Indemnifying Party shall assume the
defense of such claim or action, employ counsel of its choice, subject to the
consent of the Indemnified Party, which consent shall not be unreasonably
withheld, and bear all expenses relating to such defense. The Indemnified Party
shall have the right to participate in the defense of such claim or action and
to employ separate counsel, but the fees and expenses of such counsel shall be
at the expense of the Indemnified Party unless (a) the employment thereof shall
have been specifically authorized by the Indemnifying Party or (b) the
Indemnifying Party shall fail to assume the defense and employ counsel, in which
case the Indemnifying Party shall be liable for the fees and expense of such
counsel. In such case, the Indemnifying Party shall pay the fees and expenses of
the Indemnified Party currently within 30
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days after invoices are rendered therefor. Notwithstanding anything to the
contrary in the foregoing, the Indemnified Party, upon written notice to the
Indemnifying Party, may at its expense assume the defense of such claim or
action, and employ counsel of its choice. The parties shall each cooperate in
the defense of any such claim and shall make available to each other records and
other materials required for use in such defense. In no event shall the
Indemnifying Party be liable for any settlement of any action or claim made
without its written consent.
11. Notices. All notices, requests, demands and other communications which
are required or permitted under this Agreement shall be in writing and shall be
deemed sufficiently given upon receipt if personally delivered, faxed or mailed
by certified mail, return receipt requested, addressed to the party to be
notified at the address hereafter set forth for such party or to such other
address as such party may hereafter designate in writing:
(a) If to Seller:
SEK Technologies LLC
930 Calle Negocio, Unit D
San Clemente, CA 92673
Attention: Mr. Robert Bridigum
Fax: (949) 369-2896
with a copy to:
Maslon Edelman Borman & Brand, LLP
3300 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402-4140
Attention: Larry A. Koch, Esq.
Fax: (612) 672-8397
(b) If to Buyer:
Stratasys, Inc.
14950 Martin Drive
Eden Prairie, MN 55344
Attention: Mr. S. Scott Crump
Fax: (612) 906-2266
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<PAGE> 14
with a copy to:
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158-0125
Attn: Eric Honick, Esq.
Fax: (212) 949-7052
12. Binding Effect; Benefits. This Agreement shall inure to the benefit
of, and be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns, and no other person shall
acquire or have and other rights under this Agreement or by virtue of this
Agreement.
13. Assignment. Neither this Agreement nor any right, remedy, obligation
or liability arising hereunder or by reason hereof shall be assignable by Seller
or Buyer without the prior written consent of the other.
14. Confidentiality. Seller and Buyer shall maintain the confidentiality
of all information, written or oral, furnished to it by the other concerning the
other's business, assets and financial condition (the "Confidential
Information"), and shall not disclose such Confidential Information to others,
or use any such Confidential Information for any purpose, except in furtherance
of the transactions contemplated by this Agreement (and except as such
Confidential Information may be required to be disclosed under applicable law or
in connection with litigation arising out of this Agreement), unless and until
such Confidential Information is or becomes in the public domain by reason other
than disclosure by it. Seller acknowledges that Buyer may not commercially
exploit the Device in 1999, and therefore, both the existence of the Device and
all information pertaining to the Device is highly confidential until it is
publicly announced. In the event the transactions contemplated herein are not
consummated, (i) Buyer and its principals, shareholders, officers, employees,
agents or representatives shall not disclose to any third party or use in any
manner whatsoever any of the Confidential Information disclosed to them by
Seller, its shareholders, officers, employees, agents or representatives in
connection with the negotiations for this transaction, and (ii) Seller and its
principals, shareholders, officers, employees, agents or representatives shall
not disclose to any third party or use in any manner whatsoever any of the
Confidential Information disclosed to them by Buyer, its shareholders, officers,
employees, agents
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<PAGE> 15
or representatives in connection with the negotiations for this transaction.
This Confidential Information shall extend, but not be necessarily limited, to
the sales techniques, vendors, independent contractors, employees, and customer
lists disclosed by one party to the other. Confidential Information as used
herein shall not include that which (i) was in the public domain prior to
receipt thereof in the same context as the disclosure so made; (ii) the
receiving party can show it was in possession thereof in the same context prior
to receipt; (iii) subsequently becomes known to the receiving party by third
parties as a matter of right and without restriction on disclosure; or (iv)
subsequently comes into the public domain in the same context as the disclosure
by the disclosing party through no fault of the receiving party. In the event
this Agreement is terminated, upon written request, the shareholders, officers,
employees, agents or representatives of the respective parties hereto shall
return or destroy the Confidential Information previously disclosed to them by
the disclosing party. This provision shall survive the termination of this
Agreement.
15. Brokers. Each of the parties hereto represents and warrants to the
other that it has not dealt with any broker or finder in connection with the
transactions contemplated by this Agreement.
16. Governing Law. This Agreement shall in all respects be governed by,
construed under and enforced in accordance with the laws of the State of
Delaware.
17. Expenses; Transfer Taxes.
17.1 Each of the parties shall pay its own legal, accounting and other
expenses in connection with the negotiation and preparation of this Agreement
and the consummation of the transactions contemplated hereby.
17.2 Seller shall pay any and all transfer taxes or charges that
become due on account of the transfers of the Device Rights contemplated under
this Agreement (including use, documentary, stamp, deed, sale, ad valorem, bulk
transfer, tangible personal property, real estate and other taxes and charges),
including without limitation any such transfer charges payable to any
governmental authority, entity or subdivision in connection with any of the
transactions contemplated hereunder (collectively, the "Transfer Taxes"). In
determining the amount of Transfer Taxes that shall be payable in any
jurisdiction, Seller and Buyer shall consider the availability of
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<PAGE> 16
any exemptions from Transfer Taxes under the law of such jurisdiction. Seller
shall indemnify Buyer from and against any losses, expenses, judgments, claims,
awards, penalties and other costs or liabilities which may be imposed upon,
incurred, asserted or awarded against Buyer arising from or related to any
failure to timely pay any and all Transfer Taxes that shall become due on
account of the transfer of Assets contemplated under this Agreement, as set
forth in Section 10.1 hereof.
18. Severability. If any section, term or provision of this Agreement
shall to any extent be held or determined to be invalid or unenforceable, the
remaining sections, terms and provisions shall nevertheless remain in full force
and effect.
19. Survival. The representations and warranties of the parties set forth
in this Agreement (including the Schedules) and in any other documents,
certificates or written statements delivered by or on behalf of any party to
this Agreement shall survive the Closing for a period of one (1) year.
20. Waiver. Any waiver by any party of a breach of any of the provisions
of this Agreement shall not operate as or be construed to be a waiver of any
other breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions will not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
21. Headings. The headings in this Agreement are for convenience only and
shall not affect the construction of this Agreement.
22. Termination of Agreements. The Option Agreement is hereby terminated.
Buyer and Seller also acknowledge and agree that since Buyer although Buyer did
not exercise its Option under the Option Agreement, since the Option Agreement
has been terminated, the License Agreement shall not become effective and
neither party shall have any rights or obligations thereunder.
23. Entire Agreement; Modification. This Agreement constitutes the entire
understanding between the parties with respect to its subject matter. It
supersedes and cancels all prior agreements and understandings among the parties
relating to its subject matter. This Agreement may not be amended or
supplemented, except by subsequent written agreement of the
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<PAGE> 17
parties that specifically states that it is intended to be an amendment or
supplement to this Agreement, signed by the parties hereto. No course of dealing
or custom shall be referred to as modifying any of the terms and conditions of
this Agreement.
24. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of
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<PAGE> 18
which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Technology Sale
and Assignment Agreement as of the date first above written.
SEK TECHNOLOGIES LLC
By: /s/ Robert Bridigum
-----------------------------------
Robert Bridigum
General Manager
STRATASYS, INC.
By: /s/ S. Scott Crump
-----------------------------------
S. Scott Crump
President
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<PAGE> 19
SCHEDULE 1.1
DEVICE RIGHTS
<PAGE> 20
SCHEDULE 1.1A
PERMITTED LIENS
Liens of the members of the Sellers which Liens shall be released prior to
payment of the Purchase Price.
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<PAGE> 21
SCHEDULE 1.2
EXCLUDED ASSETS
<PAGE> 22
EXHIBIT 4.2.1
BILL OF SALE
<PAGE> 23
BILL OF SALE AND ASSIGNMENT
INDENTURE made as of December 31, 1998, by SEK TECHNOLOGIES, LLC, a
Minnesota limited liability company ("Seller"), to STRATASYS, INC., a Delaware
corporation ("Buyer").
WHEREAS, Buyer has agreed to buy all right, title and interest of Seller in
the Device Rights as defined in the Technology Sale and Assignment Agreement,
dated as of December 31, 1998, between the Seller and the Buyer (the "Sale
Agreement"), including, without limitation, the property described on Schedule I
annexed hereto (collectively, the "Assets"), and Seller has agreed to sell the
Assets to Buyer; and
WHEREAS, the execution and delivery of this Indenture for the purpose of
effecting such conveyance, transfer, assignment and delivery, have been duly
authorized in all respects by Buyer and Seller.
NOW, THEREFORE, THIS INDENTURE WITNESSETH THAT:
Pursuant to the aforementioned authority and consideration of the premises
and the Buyer's agreement to pay the Purchase Price, as defined in the Sale
Agreement, in accordance with the terms and conditions of the Sale Agreement,
the Seller does hereby convey, grant, bargain, sell, transfer, set over, assign,
alien, remise, release, deliver and confirm the Assets unto the Buyer, its
successors and assigns, forever effective as of the date hereof.
TO HAVE AND TO HOLD such Assets unto the Buyer, its successors and assigns,
as and for its own forever.
AND THE SELLER FURTHER COVENANTS AND AGREES AS FOLLOWS:
Seller owns, and has good and marketable title to, the Assets, free and
clear of all liens, claims and encumbrances of any nature whatsoever.
Seller hereby covenants that from time to time after delivery of this
instrument, at the request of Buyer and without further consideration Seller
will duly execute, acknowledge and deliver or will cause to be done, executed,
acknowledged and delivered all and every such further acts, deeds, conveyance
transfers, assignment, consents, powers of attorney and assurances Buyer may
<PAGE> 24
reasonably request in order to more effectively convey, transfer or vest in the
Buyer and to put it in possession, operation and control of, such Assets.
SELLER:
SEK TECHNOLOGIES, LLC
By: /s/ Robert Bridigum
-------------------
Robert Bridigum
General Manager
BUYER:
STRATASYS, INC.
By: /s/ S. Scott Crump
------------------
S. Scott Crump
President
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<PAGE> 25
SCHEDULE I
THE ASSETS
-3-
<PAGE> 26
EXHIBIT 4.2.2
ASSIGNMENT
<PAGE> 27
ASSIGNMENT
ASSIGNMENT made as of December 31, 1998, by SEK TECHNOLOGIES, LLC, a
Minnesota limited liability company ("Assignor"), to STRATASYS, INC., a Delaware
corporation ("Assignee").
WHEREAS, Assignee has agreed to buy all right, title and interest of
Assignor in the Device Rights as defined in the Technology Sale and Assignment
Agreement, dated as of December 31, 1998, between the Assignor and the Assignee
(the "Sale Agreement"), including, without limitation, the intellectual property
used in or necessary to the manufacture, reproduction, use of, sale, or
modification of any of the Device Rights as described on Schedule I annexed
hereto (collectively, the "Device Intellectual Property"), and Assignor has
agreed to assign the Device Intellectual Property to Assignee; and
WHEREAS, the execution and delivery of this Assignment for the purpose of
effecting such conveyance, transfer, assignment and delivery, have been duly
authorized in all respects by Assignee and Assignor.
NOW, THEREFORE, Assignor does hereby assign, grant and convey unto Assignee
and Assignee's successors and assigns from and after the date hereof all right,
title and interest in and to the Device Intellectual Property.
Assignor hereby represents and warrants that it owns, and has good and
marketable title to, the Device Intellectual Property, free and clear of all
liens, claims and encumbrances of any nature whatsoever.
Assignor acknowledges and agrees that Assignee is not assuming any claims
or liabilities in connection with the assignment of the Device Intellectual
Property. Assignor will indemnify and defend Assignor against all such claims
and liabilities as provided in the Sale Agreement.
Assignor hereby covenants that from time to time after delivery of this
instrument, at the request of Assignee and without further consideration
Assignor will duly execute, acknowledge and deliver or will cause to be done,
executed, acknowledged and delivered all and every such further acts, deeds,
conveyance transfers, assignment, consents, powers of attorney and assurances
Assignee
<PAGE> 28
may reasonably request in order to more effectively convey, transfer or vest in
the Assignee and to put it in possession, operation and control of, such Device
Intellectual Property.
Assignor:
SEK TECHNOLOGIES, LLC
By: /s/ Robert Bridigum
-----------------------
Robert Bridigum
General Manager
Assignee:
STRATASYS, INC.
By: /s/ S. Scott Crump
-----------------------
S. Scott Crump
President
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<PAGE> 29
SCHEDULE I
THE DEVICE INTELLECTUAL PROPERTY
-3-
<PAGE> 30
EXHIBIT 4.5
AMENDMENT TO USER AGREEMENT
<PAGE> 31
AMENDMENT TO USER AGREEMENT
AMENDMENT TO USER AGREEMENT, dated as of December 31, 1998, by an between
SEK TECHNOLOGIES, LLC, a Minnesota limited liability company (the "Developer"),
and STRATASYS, INC., a Delaware corporation (the "Owner").
RECITALS
The Developer and the Owner are parties to a User Agreement, dated as of
August 21, 1998 (the "User Agreement"), pursuant to which the Developer agreed,
among other things, to use its best efforts to develop, evaluate and test a Beta
Version Advanced Modeler (as defined in the User Agreement), and the Owner
agreed to deliver to developer one copy of the New Software Code, two complete
copies of the Documentation (as such terms are defined in the User Agreement)
and the Equipment and to provide support services to the Developer. Unless
otherwise defined in this Amendment, capitalized terms used in this Amendment
are defined in the User Agreement.
As of the date of this Agreement, the Developer has not developed the Beta
Version Advanced Modeler. Nevertheless, pursuant to a Technology Sale and
Assignment Agreement, dated as of December 21, 1998 (the "Sale Agreement"), the
Owner has agreed to purchase the Device Rights (as defined in the Option
Agreement) from the User, and the Owner expects to continue development of the
Advanced Modeler at its own expense and risk. In connection with the Owner's
continued development of the Advanced Modeler, Owner expects to retain the
Developer from time to time to perform services for Owner in connection with
such development. Therefore, the Owner desires to permit the Developer to
continue to use the New Software Code, the Documentation, the Equipment and the
Device Rights in accordance with the terms of the User Agreement as amended by
this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, the parties hereby
agree as follows:
1. Certain Definitions.
1.1 For purposes of the User Agreement as amended by this Amendment, the
"Owner Intellectual Property" shall include all intellectual property included
in the Device Rights as sold to the Owner by the Developer under the Sale
Agreement.
1.2 For purposes of the User Agreement as amended by this Amendment, the
"Equipment" shall include all tangible personal property included in the Device
Rights as sold to the Owner by the Developer under the Sale Agreement.
<PAGE> 32
2. Developer's Obligations.
2.1 Anything in Section 3.1 of the User Agreement (Development, Evaluation
and Testing) to the contrary notwithstanding, the Developer shall have no
further obligation under Subsections 3.1.1 or 3.1.2, and its sole obligation
with respect to the development of the Beta Version Advanced Modeler and the New
Intellectual Property will be to perform services for the Owner from time to
time as provided in one or more purchase orders submitted by the Owner to the
Developer, and accepted by Developer.
2.2 Section 3.2 of the User Agreement (Changes in Specifications) is
hereby terminated.
2.3 The Developer hereby agrees and acknowledges that anything in Section
3.3 of the User Agreement (Marketing of Advanced Modeler) to the contrary
notwithstanding, the Developer shall have no right whatsoever to sell or
distribute the Advanced Modeler without the consent or agreement of the Owner.
2.4 The Developer shall have no further responsibilities under Section 3.4
of the User Agreement (Responsibilities). All responsibilities of the Developer
shall be pursuant to the Owner's purchase orders accepted by Developer, which
shall be deemed to amend the User Agreement and is incorporated therein as
accepted by the Developer.
2.5 The Developer acknowledges that the Option Agreement has been
terminated pursuant to the Sale Agreement, that the License Agreement will not
become effective, and that the Owner will not receive any license of the Owner
Intellectual Property as contemplated by Section 3.5 of the User Agreement
(Royalties and Payments) and Article 5 of the User Agreement (Royalties and
Payments).
3. Obligation for Expenses.
Article 8 of the User Agreement (Obligation for Expenses) is hereby
terminated. All payments for the Developer's services and expenses, if any,
shall be effected by one or more purchase orders given by the Owner to the
Developer and accepted by Developer as provided in Section 2.4 above.
4. Support Services.
Article 9 of the User Agreement (Support Services) is hereby terminated.
The Owner shall provide support services to the Developer from time to time as
the parties may hereafter agree.
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5. Term of Agreement.
Anything in Article 11 of the User Agreement to the contrary
notwithstanding, the term of the User Agreement shall continue until it is
terminated in accordance with Article 12 of the User Agreement, as amended by
this Amendment.
6. Termination; Effect of Expiration or Termination.
6.1 The parties hereby amend the first sentence of Subsection 12.1.1 of
the User Agreement by deleting the first sentence thereof and inserting the
following sentence in lieu thereof:
The Owner or the Developer may terminate this Agreement at any time,
and any such Termination shall release Developer from any obligation
to perform any services under any purchase order of Owner which
involve the use of rights licensed under this Agreement.
6.2 The parties hereby amend Section 12.1 of the User Agreement
(Termination of Agreement) by deleting Subsections 12.1.2 (relating to Change
Orders) and 12.1.3 (relating to Deliverables) and renumbering Subsection 12.1.4
(Breach) as Subsection 12.1.2.
7. Miscellaneous.
7.1 The terms "this Agreement," "hereof," "hereunder," and words of like
meaning appearing in the User Agreement shall mean and refer to the User
Agreement as hereby amended.
7.2 Except as otherwise amended pursuant to this Amendment, the User
Agreement shall remain in full force and effect, and the Owner and the Developer
hereby reaffirm each of their respective agreements, covenants and obligations
set forth therein.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
STRATASYS, INC.
By: /s/ S. Scott Crump
----------------------------------------
S. Scott Crump, President
SEK TECHNOLOGIES, LLC
By: /s/ Robert Bridigum
----------------------------------------
Robert Bridigum, General Manager
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Exhibit 10.2
USER AGREEMENT
THIS USER AGREEMENT (this "Agreement") is made and entered into this
21st day of August, 1997, by and between STRATASYS, INC. (hereinafter "Owner"),
a Delaware corporation, having an address for purposes of this Agreement at
14950 Martin Drive, Eden Prairie, Minnesota 55344-2020, and SEK TECHNOLOGIES,
LLC (hereinafter "Developer"), a Minnesota limited liability company, having an
address for purposes of this Agreement at 930 D Calle Negocio, San Clemente,
California 92673:
WITNESSETH:
A. The Owner manufactures and sells certain devices used to produce
three dimensional (3-D) models from existing computer aided design ("CAD")
programs.
B. The Owner is the owner of certain U.S., foreign and common law
copyrights pertaining to certain computer programs (the "Software"), certain
U.S. and foreign patents pertaining to the method of making 3-D modelers (the
"Patents") and certain other intellectual property rights pertaining to the
manufacture, testing and operation of such 3-D modelers (the "Know-How") and
related documentation (the "Documentation") that are the subject of this
Agreement (the Software, Patents, Know-How and Documentation are herein after
sometimes referred to collectively as the "Owner Intellectual Property")
including but not limited to its patented fused deposition modeling ("FDM(R)")
technology and its Genisys technology.
C. The Developer desires to develop and test a Beta version of a new,
smaller, low cost, desk-top 3-D modeler using existing CAD programs ("Advanced
Modeler") which will be based upon Owner Intellectual Property and which will
meet the specifications set forth in Schedule 1.12 (the "Modeler
Specifications").
D. The Advanced Modeler will require the development of new computer
programs ("New Software"), new technology and new know-how ("New Technology"),
possibly new patents ("New Patents") and new documentation ("New Documentation")
(collectively the "New Intellectual Property").
E. In addition, the Advanced Modeler will require the acquisition of or
licensing of intellectual property rights and technology from third parties
("Third Party IP").
F. To develop the Advanced Modeler and the New Intellectual Property,
the Developer needs the Owner to develop the New Software and license the
Developer to use the Owner Intellectual Property for the purpose of developing
the Advanced Modeler.
G. In addition, the Developer needs the use of certain equipment of the
Owner in connection with the development of the Advanced Modeler (hereinafter
referred to as the "Equipment" and more specifically described below).
<PAGE> 2
H. The Owner is willing to develop the New Software and authorize the
Developer to use the Owner Intellectual Property in connection with the
development of the Advanced Modeler in exchange for an option (the "Option") to
acquire, in accordance with the terms of that certain Option Agreement between
the parties of even date herewith, all of the Developer's right, title and
interest to manufacture, sell and distribute the Advanced Modeler.
I. As a condition to its grant of a license hereunder to use the
Owner's Intellectual Property, the Owner will be the owner of all New
Intellectual Property.
NOW, THEREFORE, in consideration of the premises, as well as the
obligations herein made and undertaken, the parties hereto, intending to be
legally bound, do hereby agree as follows:
ARTICLE 1.
DEFINITIONS
When used in this Agreement, the definitions set forth in this Article
shall apply to the respective capitalized terms:
1.1 "Advanced Modeler." See Paragraph C of the recitals.
1.2 "Agreement Territory." The United States of America and any where
in the world.
1.3 "Code." The computer programming code,including updates, error
corrections, and revisions thereto, provided and licensed under this Agreement
by Owner object code (i.e., machine-readable), and associated procedural
code, all as more fully described in the Specifications attached hereto as
Exhibit A.
1.4 "Derivative Work." A work that is based upon one or more
preexisting works, such as a revision, modification, translation (including
compilation or recapitulation by computer), abridgement, condensation,
expansion, or any other form in which such a preexisting work may be recast,
transformed, or adapted, and that, if prepared without authorization by the
owner of the preexisting work, would constitute a copyright infringement.
1.5 "Development License." The Development License is set forth in
Article 4.
1.6 "Development Schedule." The Schedule for the development of the New
Software attached hereto as Schedule 1.6.
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1.7 "Documentation." Printed material relating to the Owner and New
Intellectual Property and instructions for its use, as more fully described in
the specifications attached hereto as Schedule 1.20. Documentation is classified
as Owner and New Documentation.
1.8 "Effective Date." The date first mentioned herein above.
1.9 "Error." A defect in the Development Code or a mistake in the
Development Documentation that prevents the Code from functioning in substantial
conformance with the Specifications.
1.10 "Error Correction." A change to the Code or the Documentation that
is in a form that allows its application to the Code or insertion in the
Documentation to establish substantial conformance with the Specifications.
All Error Correction developed by either Owner or Developer shall be
considered part of the Code and Documentation for all purposes under this
Agreement.
1.11 "Equipment." The five (5) computer work stations identified in
Schedule 1.11 which are capable of operating the Owner's Software (as defined
herein), the two FDM 1650 Modelers identified in Schedule 1.11 and the one
Genisys Modeler identified in Schedule 1.11.
1.12 "Modeler Specifications." The specifications for the size and
functionality of the Advanced Modeler as set forth in Schedule 1.12.
1.13 "New Documentation." See Paragraph D of the recitals.
1.14 "New Intellectual Property." See Paragraph D of the recitals.
1.15 "New Software." See Paragraph D of the recitals.
1.16 "New Technology." See Paragraph D of the recitals.
1.17 "Option." The Option is that option to acquire all right, title
and interest in the New Intellectual Property and the exclusive right to
manufacture the Advanced Modeler as set forth in that certain Option
Agreement of even date herewith between the Owner and the Developer.
1.18 "Option Agreement." See Paragraph H of the recitals.
1.19 "Owner Intellectual Property." See paragraph B of the recitals.
1.20 "Software Specifications." The specifications for the New Software
which are set forth in Schedule 1.20.
1.21 "Third-Party Intellectual Property." See Paragraph E of the
recitals.
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ARTICLE 2.
OWNER'S OBLIGATIONS
2.1 Delivery of Code. The Owner shall develop and deliver to the
Developer one (1) copy of the New Software Code in accordance with the
Development Schedule attached hereto as Schedule 1.6.
2.2 Delivery of Documentation. The Owner shall deliver to the Developer
two (2) complete copies of the Documentation within ten (10) days following the
Owner's receipt of the written request by the Developer for the Documentation.
2.3 Support Services. The Owner shall provide support services for the
New Software and the New Documentation, in accordance with Article 9 of this
Agreement.
2.4 Delivery of Equipment. The Owner shall deliver the Equipment to the
Developer within ten (10) days following the Owner's receipt of the written
request by the Developer for the Equipment. The Equipment shall remain the sole
property of the Owner and such Equipment shall be used by the Developer solely
for the purpose of running the Owner's Software and developing the Beta Version
of the Advanced Modeler.
ARTICLE 3.
DEVELOPER'S OBLIGATIONS
3.1 Development, Evaluation and Testing. In consideration of the
Owner's Obligations and the Owner's grant of the Development License to the
Developer as set forth in Article 4 below, the Developer shall:
3.1.1 use its best efforts to develop, evaluate and test a
beta level version of the Advanced Modeler having specifications substantially
similar to the Modeler Specifications (such beta version being hereinafter
referred to as the "Beta Version Advanced Modeler");
3.1.2 use its best efforts to develop the New Intellectual
Property (other than the New Software) necessary to produce a Beta Version
Advanced Modeler;
3.1.3 use reasonable efforts to protect and maintain the
Equipment in good working order and condition; and
3.1.4 comply with all of the terms of this Agreement.
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3.2 Changes to Specifications. During the term of this Agreement either
party may propose changes (a "Change Order") in the Modeler Specifications.
Upon submission of any Change Order, the Developer shall prepare a revised
Development Budget and Development Schedule as appropriate. Any changes to
Modeler Specifications, Development Budget and Development Schedule shall be
agreed to by both parties and incorporated into this Agreement. The parties
agreement on any Change Order shall constitute a final settlement on all items
covered therein, subject to performance thereof and payment therefor pursuant
to the terms of this Agreement.
3.3 Marketing of Advanced Modeler. Prior to the completion of the Beta
Version Advanced Modeler, the Developer shall not sell or distribute any
version of the Advanced Modeler without the prior written consent of the
Owner. If the Owner does not exercise its Option, the Developer shall use
its best efforts to manufacture, market, and distribute the Advanced Modeler
on commercially reasonable terms within the Agreement Territory.
3.4 Responsibilities. The Developer shall be responsible for the
following matters and the Owner has no responsibility therefore:
3.4.1 the development of the Advanced Modeler and any New
Intellectual Property (other than the New Software) necessary;
3.4.2 the use of the Owner's and the New Intellectual Property
pursuant to this Agreement;
3.4.3 the results obtained therefrom;
3.4.4 testing and determining the adequacy and marketability
of the Advanced Modeler;
3.4.5 protection of the Owner's rights in accordance with
Article 6 of this Agreement; and
3.4.6 the use of and reasonable care and all maintenance and
repair of the Equipment.
3.4.7 use its best efforts to develop and deliver the
"Deliverables" on or before the dates provided in the Development Schedule
attached hereto as Exhibit l.6 as amended from time to time. The Development
Schedule will be revised as necessary from time to time to reflect added or
reduced time requirements resulting from changes in Specifications or events
outside the control of the Developer.
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3.5 Royalties and Payments. The Developer shall pay royalties and
payments to the Owner and provide related information and access to records,
in accordance with Article 5 of this Agreement.
3.6 Transfer of Rights in the New Intellectual Property. In
consideration of the Owner's obligations hereunder including but not limited to
the grant of the Development License, the Developer hereby agrees to and does
hereby assign to the Owner and hereby undertakes to cause all employees and
independent contractors of the Developer to sell, assign, transfer, and convey
unto the Owner all of the right, title and interest in the New Intellectual
Property free and clear of all liens, encumbrances, licenses etc., which upon
its creation shall become Owner Intellectual Property for purposes of this
Agreement and to assign to the Owner all of its right, title and interest in any
Third-Party IP. All New Intellectual Property including but not limited to
all Derivative Works which can be protected under the Federal Copyright Act
shall be deemed to be "works for hire" as that term is used under the
Federal Copyright Act and shall be the sole property of the Owner.
3.7 Care and Return of Equipment. The Developer shall use reasonable
efforts to protect and care for the Equipment. The Developer will insure the
Equipment at all times with a reputable insurance company against loss or
destruction for an amount not less than its replacement cost. If the
Equipment is lost, stolen or damaged, the Developer shall replace the Equipment
or pay for the damage to the Equipment. The Developer shall at its own cost
and expense return the Equipment to the Owner in good condition upon the
earlier of the date upon which the Owner elects not to exercise the Option or
the date that is two (2) years from the date hereof. The Developer shall pay
all property or other taxes pertaining to the Equipment while it is in the
possession of the Developer and shall attach such label and execute such
documents as the Owner may request to notify others of the Owner's ownership
of the Equipment.
ARTICLE 4.
GRANT OF DEVELOPMENT LICENSE
4.1 The Owner hereby grants to the Developer, in the Agreement
Territory, the following nonexclusive rights and licenses (hereinafter referred
to as the "Development License"):
4.1.1 The right and license to use, test, evaluate, and
prepare Derivative Works of the Owner's Software, the New Software and the
Documentation and other Owner's Intellectual Property which is protected under
U.S. and foreign, as well as common law, copyright on not more than five (5)
Work Stations provided by Owner, which Developer shall promptly designate by
CPU serial number in writing to Owner (subject to verification as described
in Article 5 of this Agreement) solely for productive internal purposes for the
purpose of developing and testing the Beta Version Advanced Modeler.
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4.1.2 The right and license to prepare New Documentation, as
Derivative Works of the Owner Documentation, and to make copies of Owner's
Documentation, solely for productive internal purposes for the purpose of
developing and testing the Beta Version Advanced Modeler.
4.1.3 The right and license to make one (1) backup copy of the
Owner's and New Software Code solely for backup purposes.
4.2 The right and license to use and exploit the Owner Intellectual
Property consisting of Patents and Know-How is solely for the productive
internal purposes for the purpose of developing and testing the Advanced
Modeler.
4.3 The Owner specifically does not grant the Developer any right to
use any trademark, service mark, or tradename of the Owner.
ARTICLE 5.
ROYALTIES AND PAYMENTS
5.1 Royalty Schedule. So long as Developer is in compliance with the
terms of this Agreement no royalty shall be payable hereunder unless the Owner
does not exercise its Option, in which event the license granted hereunder shall
terminate and the terms of the License Agreement attached hereto as Schedule 5.
1.
ARTICLE 6.
PROTECTION
6.1 The Owner's Confidential Intellectual Property. The Developer
agrees that the Owner's Intellectual Property (other than that part thereof
which registered under U.S. or foreign copyright laws and that part thereof
consisting of claims which are part of patents protected under U.S. and foreign
patent registrations or applications (hereinafter the "Owner Confidential
Intellectual Property")) which contains confidential information of Owner, and
embody trade secrets was developed by the Owner at substantial cost and expense.
The Developer shall hold the Owner's Confidential Intellectual Property in
strict confidence for the Owner. The Developer shall employ reasonable secrecy
precautions, at least as protective as the precautions it uses to protect its
own proprietary computer programs, to protect the Owner's Confidential
Intellectual Property from unauthorized copying, use, or disclosure. The
Developer shall allow access to the Owner's Confidential Intellectual Property
only to employees and contractors of the Developer who are performing services
for the Developer related to the purposes of the Agreement, who have a need to
know information contained in the Owner's Confidential Intellectual Property,
and upon whom the Developer has imposed a legal duty to protect the Owner's
Confidential Intellectual Property
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from unauthorized copying, use, or disclosure. The Developer agrees to use its
best efforts to prevent, prosecute, and enjoin any actual or threatened
unauthorized copying, use, or disclosure of the Owner's Confidential
Intellectual Property.
6.2 Contracts. The Developer shall use its best efforts to prevent,
prosecute, and enjoin any unauthorized copying, distribution, reverse
engineering, and reverse compiling of the Owner's Software or the New Software
and the unauthorized copying, distribution of any of the Owner's Confidential
Intellectual Property or the disclosure of any Confidential Intellectual
Property through appropriate restrictive contracts entered into by its
employees, consultants, and other third parties having access thereto, and
through the use of the Product License with End-Users, and shall pursue
appropriate actions to enforce such protection provisions.
ARTICLE 7.
WARRANTIES AND LIMITATION OF LIABILITY
7.1 Ownership. The Owner warrants that it is the exclusive owner of
copyrights and patents and other intellectual property incorporated in the Owner
Intellectual Property or has a valid and enforceable license to use all
copyrights, patents and other intellectual property incorporated into the Owner
Intellectual Property and that it has all rights necessary for the grant of
rights and licenses effected by this Agreement.
7.2 Exclusive Remedy. Except as provided herein, the Owner shall have
no liability to the Developer for any claim or action arising out of this
Agreement.
7.3 Exclusive Remedy as to Software. The Developer's exclusive remedy
for breach of the Owner's obligation to deliver the New Software shall be: (1)
to request Error Corrections in accordance with Article 9 of this Agreement
or (2) if the Owner materially fails to effect Error Corrections after a
reasonable opportunity to do so and the Developer is consequently unable to
develop commercially marketable Advanced Modeler, to hire an outside computer
software consultant to effect Error Corrections. The Owner shall have no
liability to the Developer's customers or End-Users with regard to the subject
matter of this Agreement.
7.4 Disclaimer Regarding New Software. The Owner makes no warranty that
all Errors have been or can be eliminated from the New Software Code or
Documentation or that the New Software Code can be written or developed which
will permit the Developer to develop a Beta Version of the Advanced Modeler, and
the Owner shall not be liable or responsible for losses of any kind resulting
from the use of the Owner's or the New Software Code or Documentation by the
Developer for developmental or productive use or in the Advanced Modeler,
including any liability for business expense, machine downtime, or damages
caused the Developer, the Developer's customers, or End-Users by any attendant
or consequent deficiency, defect, error, or malfunction.
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7.5 General Disclaimer. EXCEPT AS SPECIFICALLY SET FORTH HEREIN ABOVE,
OWNER DISCLAIMS ANY AND ALL WARRANTIES WITH RESPECT TO THE OWNER'S OR THE NEW
INTELLECTUAL PROPERTY, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES OF FITNESS FOR ANY PARTICULAR PURPOSE OR
MERCHANTABILITY. In no event shall the Owner be liable to the Developer for any
lost profits or other incidental or consequential damages relating to the
subject matter of this Agreement.
ARTICLE 8.
OBLIGATION FOR EXPENSES
The Owner shall have no obligation whatsoever to reimburse the
Developer for any expenses or costs incurred by the Developer in the
performance of this Agreement, even at the Owner's suggestion. The Developer's
incurring of costs or expenses under this Agreement is at the Developer's sole
risk and upon the Developer's independent business judgment that such costs and
expenses are justifiable.
ARTICLE 9.
SUPPORT SERVICES
9.1 Training and Error Correction. The Owner shall provide to the
Developer, during the period beginning on the Effective Date and ending on
January 31,1999, the following support services in connection with the
Developer's attempt to develop a Beta Version of the Advanced Modeler.
9.1.1 Initial technical training in the installation and use
of the Owner's FDM and Genysis technology not to exceed five (5) person days of
instruction per week, at the Owner's facility in Eden Prairie, Minnesota, or
such other location as the parties may agree. The number and identity of
employees to be trained and the schedule of training shall be set forth in a
letter that references this Agreement and is signed by both parties.
9.1.2 Commercially reasonable efforts to achieve Error
Correction. The Developer shall provide to the Owner prompt written notice of
any Error or suspected Error in the New Software Code or Documentation,
including all documentation reasonably requested by the Owner to evaluate and/or
correct the condition. Error Correction shall be furnished by the Owner in the
form selected by the Owner, including correction documentation, corrected code,
or a restriction or bypass.
9.2 Additional Training. Additional training in the use of FDM 8000 and
as may be requested by the Developer and as may be provided by the Owner,
subject to the availability of
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resources, and upon such terms and conditions and at such rates as the Owner
offers generally or provides to other third parties for similar services.
ARTICLE 10.
MARKING OF PRODUCTS
All Owner Software Code and Documentation and all copies thereof
permitted under this Agreement shall be marked with the Owner's copyright and
other proprietary notices as the Owner may reasonably direct. All New Software
and New Documentation shall be marked with the Owner's copyright notice and
registered under the Owner's name. The parties agree to cooperate in all
copyright registrations and to provide to each other information and documents
required for such registration. To that effect, the Developer shall provide the
Owner with copies of all New Documentation within five (5) business days of its
creation.
ARTICLE 11.
TERM OF AGREEMENT
Except as provided herein, the Development License and the obligations
of the Owner and the Developer hereunder shall commence on the Effective Date
and continuing until the earlier of the exercise by the Owner of its Option,
January 31, 1999, or the Effective Date of the License Agreement unless sooner
terminated under Article 12 hereof. Notwithstanding the foregoing, the
obligations of the Developer under Articles 6 and 10 shall continue
indefinitely.
ARTICLE 12.
TERMINATION; EFFECT OF EXPIRATION OR TERMINATION
12.1 Termination of Agreement.
12.1.1 The Developer may terminate this Agreement at any time.
Upon such termination, the Developer shall return all copies of the Owner's and
the New Intellectual Property, the Equipment, and all versions and models of the
Advanced Modeler in its possession to the Owner and destroy all Derivative Works
related thereto.
12.1.2 If the Company and the Developer fail within ten (10)
days of the receipt of any Change Order to agree on adjustment in the
Development Budget, the Development Costs, the Development Schedule and the
Specifications as appropriate in light of a
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requested Change Order, either party may terminate this Agreement upon
ten (10) days prior written notice unless both parties agree to
arbitration as provided herein; and provided further, that Section 6
hereof shall survive indefinitely.
12.1.3 If Developer fails to deliver any of the Deliverables
on or before their respective Delivery Date, this Agreement shall
terminate and be of no further force or effect; provided, however, that
such termination shall have no effect on the Company's option to
purchase the Advanced Modeler as provided in this Agreement and
provided further, that Section 6 hereof shall survive indefinitely.
12.1.4 Breach. Should either party commit a material breach of
any obligation hereunder, the other party may, at its option, terminate
this Agreement by thirty (30) days' written notice to the other party.
Such notice shall state the default upon which termination is based.
Notwithstanding such notice, termination shall not occur and the
defaulting party shall not be liable for any further remedy if such
default is cured within such period.
12.2 Termination of Licenses. Upon termination or expiration of this
Agreement, the rights and licenses herein granted shall terminate.
12.3 Return of Materials. Upon the termination of this Agreement, the
Developer shall immediately deliver to the Owner all copies of the Owner's
Intellectual Property and the New Intellectual Property, Derivative Works of any
and all of the foregoing, and all sales literature produced pursuant to this
Agreement. The Developer shall warrant in writing, upon request of the Owner,
that no copies of any such material have been retained or are within the control
of the Developer. The only exception to the foregoing shall be one archival copy
of items deemed by the Developer to be necessary in enforcement of the
Developer's rights, which archival copy shall be sealed and placed in the hands
of a bonded, independent custodian under a legally enforceable obligation of
confidentiality and nonuse, for use only by the Developer in the assertion of
rights and defenses by the Developer.
ARTICLE 13.
INDEMNIFICATION
13.1 Infringement. The Owner hereby indemnifies and holds harmless the
Developer from any claim that the Owner's Intellectual Property supplied
hereunder infringes a patent, copyright, trade secret, or similar proprietary
right of a third party in the United States. If such a claim has occurred, or in
the Owner's judgment is likely to occur, the Developer agrees to allow the
Owner, at the Owner's option, to procure the right for the Developer to continue
copying, use, and distribution of such Owner's Intellectual Property to replace
or modify them in a functionally equivalent manner so they become noninfringing.
If neither of the foregoing alternatives is
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available on terms that are reasonable in the Owner's judgment, the Developer,
upon written request by the Owner, shall return the Owner's and New
Intellectual Property to the Owner and this Agreement shall terminate.
13.2 Exclusions. The Owner shall have no obligation under Section 13.1
of this Agreement with respect to any claim of infringement of copyright,
trade secret, or similar proprietary right based upon the Developer's
modification of the Owner's Intellectual Property or any New Intellectual
Property developed or created by the Developer or a third party (other than the
Owner).
13.3 Limitation. Indemnification of the Developer for claims of
infringement of third-party rights under this Agreement shall be limited to
the amount paid to the Owner with respect to the Code and/or Documentation that
is alleged to be infringing.
13.4 Indemnification by the Developer. The Developer indemnifies and
holds harmless the Owner from any and all claims, demands, or actions based upon
or relating to New Intellectual Property developed or created by the Developer
or a third party (other than the Owner).
13.5 Conditions. The foregoing indemnities in this Article 13 shall be
contingent upon the following conditions: The party seeking indemnity shall (1)
give prompt written notice to the other party of any claim, demand, or action
for which indemnity is sought; (2) fully cooperate in the defense or settlement
of any such claim, demand, or action; and (3) obtain the prior written agreement
of the indemnifying party to any settlement or proposal of settlement, which
agreement shall not unreasonably be withheld.
ARTICLE 14.
MISCELLANEOUS
14.1 No Assertion of Rights. It is expressly understood and agreed
that, as between the Owner and the Developer, all right, title, and interest in
and to the Owner's Intellectual Property or New Intellectual Property (both as
independent works and as underlying works serving as a basis for any Derivative
Works thereto) and any other material furnished to the Developer under this
Agreement vest solely and exclusively in the Owner, and the Developer shall
neither derive nor assert any title or interest in or to such items except for
the rights and licenses granted under this Agreement.
14.2 Independent Contractor Status. The Developer is an independent
contractor under this Agreement, and nothing herein shall be construed to create
any partnership, joint venture, or agency relationship between the parties
hereto. The Developer is granted no authority under this
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Agreement to enter into agreements of any kind on behalf of the Owner, or to
bind or obligate the Owner in any manner to any third party.
14.3 No Conflict of Interest. The Developer represents and warrants
that it has full power and authority to undertake the obligations set forth in
this Agreement, and that it has not entered into any other agreement, nor will
it enter into any other agreement, that would render it incapable of
satisfactorily performing its obligations hereunder or that would place it in a
position of conflict of interest or be inconsistent with its obligations
hereunder.
14.4 Compliance With Law. The Developer agrees that it shall comply
with all applicable laws and regulations of governmental bodies or agencies in
its performance under this Agreement.
14.5 No Assignment. The Developer represents that it is acting on its
own behalf and is not acting as an agent for or on behalf of any third party,
and further agrees that it may not assign its rights or obligations under this
Agreement without prior written consent of the Owner.
14.6 Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
considered effective when deposited in the U.S. mail, postage prepaid, and
addressed to the appropriate party at the address noted above, unless by such
notice a different address shall have been designated in writing.
14.7 Governing Law. All questions concerning the validity, operation,
interpretation, and construction of this Agreement shall be governed by and
determined in accordance with the laws of the State of Minnesota other than the
laws of such State pertaining to conflicts of laws.
14.8 No Waiver. Neither party shall, by mere lapse of time, without
giving notice or taking other action hereunder, be deemed to have waived any
breach by the other party of any of the provisions of this Agreement. Further,
the waiver by either party of a particular breach of this Agreement by the other
shall neither be construed as nor constitute a continuing waiver of such breach
or of other breaches of the same or any other provision of this Agreement.
14.9 Force Majeure. Neither party shall be in default if failure to
perform any obligation hereunder is caused solely by supervening conditions
beyond that party's reasonable control, including acts of God, civil commotion,
strikes, labor disputes, and governmental demands or requirements.
14.10 Other Products And Services. The Owner offers other products and
services at separate charges under applicable written standard agreements of the
Owner. The Developer and the Owner agree that any such product and/or service
cannot be the subject of an oral agreement. All such products and services can
be provided to the Developer only under the terms and conditions of a written
standard agreement of the Owner executed by the parties.
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14.11 Survival. The provisions of Articles 6, 7, 8, 10, and 13 of this
Agreement shall survive the expiration or termination of this Agreement.
14.12 Scope of Agreement; Amendment. The parties hereto acknowledge
that each has read this Agreement, understands it, and agrees to be bound by its
terms. The parties further agree that this Agreement is the complete and
exclusive statement of the Agreement between the parties and supersedes all
proposals (oral or written), understandings, representations, conditions,
warranties, covenants, and all other communications between the parties relating
to the Code and Documentation. This Agreement may be amended only by a
subsequent writing that specifically refers to this Agreement and that is signed
by both parties, and no other act, document, usage, or custom shall be deemed to
amend this Agreement.
14.13 Further Assurances. The parties shall before and after the
termination of this Agreement, provide each other with such agreements,
certificates and other documents as may be reasonably required to effectuate the
purposes and provisions of this Agreement and, from the date hereof, shall
cooperate and take such action as may be reasonably requested by any of them in
order to carry out the purposes and provisions of this Agreement.
IN WITNESS THEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized representatives as set forth below:
STRATASYS INC.
By: /s/ S. Scott Crump
------------------
Title: President
---------
Date: December 2, 1997
----------------
SEK TECHNOLOGIES, LLC
By: Joseph Lewis Calderon
---------------------
Title: Manager
-------
Date: August 21, 1997
---------------
14
<PAGE> 15
SCHEDULE 1.6
DEVELOPMENT SCHEDULE
<TABLE>
<CAPTION>
Milestone Delivery Date
--------- -------------
<S> <C>
Delivery of Fully Documented Conceptual 1st Quarter of Contract Period
Design
Delivery of Feasibility Models for 2nd Quarter of Contract Period
Subassemblies
Delivery of Fulling Integrated Subassemblies 3rd Quarter of Contract Period
Delivery of Fully Functional Beta Unit(s) 4th Quarter of Contract Period
Testing of Beta Unit(s) 5th Quarter of Contract Period
Modification of Beta Unit(s) after Testing 5th Quarter of Contract Period
</TABLE>
15
<PAGE> 16
Schedule 1.11
Equipment
16
<PAGE> 17
Schedule 1.12
Modeler Specifications
17
<PAGE> 18
Schedule 1.20
Software Specifications
18
<PAGE> 19
Schedule 5.1
License Agreement
19
<PAGE> 20
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this "Agreement") is made and entered into
this____ day of _____________, 19____, by and between STRATASYS, INC.
(hereinafter "Owner"), a Delaware corporation, having an address for purposes of
this Agreement at 14950 Martin Drive, Eden Prairie, Minnesota 55344-2020, and
SEK TECHNOLOGIES, LLC (hereinafter "Developer"), a Minnesota limited liability
company, having an address for purposes of this Agreement at 930 D Calle
Negocio, San Clemente, California 92673:
WITNESSETH:
A. The Owner manufactures and sells certain devices used to produce
three dimensional (3-D) models from existing computer aided design ("CAD")
programs.
B. The Owner is the owner of certain U.S., foreign and common law
copyrights pertaining to certain computer programs (the "Software"), certain
U.S. and foreign patents pertaining to the method of making 3-D modelers (the
"Patents") and certain other intellectual property rights pertaining to the
manufacture, testing and operation of such 3-D modelers (the "Know-How") and
related documentation (the "Documentation") that are the subject of this
Agreement (the Software, Patents, Know-How and Documentation are herein after
sometimes referred to collectively as the "Owner Intellectual Property")
including but not limited to its patented fused deposition modeling ("FDM(R)")
technology and its Genisys technology.
C. The Developer has developed and tested a Beta version of a new,
smaller, low cost, desk-top 3-D modeler using existing CAD programs ("Advanced
Modeler") based upon Owner Intellectual Property pursuant to rights granted
Developer under that certain User Agreement of even date herewith between the
parties.
D. The specifications for the Advanced Modeler are set forth in
Schedule 1.7 (the "Modeler Specifications").
E. The development of the Advanced Modeler required the development of
"New Intellectual Property" (as defined in the User Agreement).
F. The New Intellectual Property is owned by the Owner and is
incorporated into and is now part of the Owner Intellectual Property.
G. In addition, the development of the Advanced Modeler required the
acquisition of or licensing of intellectual property rights and technology from
third parties ("Third Party IP") which has been assigned to the Owner.
<PAGE> 21
H. The Owner has elected not to exercise its option (the "Option") to
acquire all of Developer's right, title and interest to manufacture, sell and
distribute the Advanced Modeler, according to the terms of that certain Option
Agreement between the parties of even date herewith.
I. The Developer needs a license to use the Owner Intellectual Property
in order to manufacture, market and sell the Advanced Modeler and the Owner is
willing to grant the Developer a license to use the Owner's Intellectual
Property in connection with the manufacture, marketing and sale of the Advanced
Modeler on the terms set forth herein.
NOW, THEREFORE, in consideration of the premises, as well as the
obligations herein made and undertaken, the parties hereto, intending to be
legally bound, do hereby agree as follows:
ARTICLE 1.
DEFINITIONS
When used in this Agreement, the definitions set forth in this Article
shall apply to the respective capitalized terms:
1.1 "Advanced Modeler." See Paragraph C of the recitals.
1.2 "Agreement Territory." The United States of America and any where
in the world.
1.3 "Code." The computer programming code, including updates, error
corrections, and revisions thereto, provided and licensed under this Agreement
by Owner object code (i.e., machine-readable), and associated procedural code.
1.4 "Derivative Work." A work that is based upon one or more
preexisting works, such as a revision, modification, translation (including
compilation or recapitulation by computer), abridgement, condensation,
expansion, or any other form in which such a preexisting work may be recast,
transformed, or adapted, and that, if prepared without authorization by the
owner of the preexisting work, would constitute a copyright infringement.
1.5 "License." The Development License is set forth in Article 3.
1.6 "Documentation." Printed material relating to the Owner
Intellectual Property and instructions for its use.
1.7 "Effective Date." The date first mentioned herein above.
1.8 "Modeler Specifications." The specifications for the size and
functionality of the Advanced Modeler as set forth in Schedule 1.7.
2
<PAGE> 22
1.9 "Net Revenues." Net Revenues are gross revenues less returns and
allowances but exclusive of sales taxes, shipping, handling or other charges
which are passed through to the customer without mark-up.
1.10 "New Intellectual Property." See Paragraph E of the recitals.
1.11 "Owner Intellectual Property." See Paragraph B of the recitals
1.12 "Option." See Paragraph H of the recitals.
1.13 "Option Agreement." See Paragraph H of the recitals.
1.14 "Owner Intellectual Property." See Paragraph B of the recitals.
1.15 "Third Party IP." See Paragraph G of the recitals.
ARTICLE 2.
DEVELOPER'S OBLIGATIONS
2.1 Marketing of Advanced Modeler. The Developer shall use its best
efforts to manufacture, market, and distribute the Advanced Modeler on
commercially reasonable terms within the Agreement Territory.
2.2 Responsibilities. The Developer shall be responsible for the
following matters and the Owner has no responsibility therefore:
2.2.1 the use of the Owner's and the New Intellectual Property
pursuant to this Agreement; and
2.2.2 the protection of the Owner's rights in accordance with
Article 5 of this Agreement.
2.3 Royalties and Payments. The Developer shall pay royalties and
payments to the Owner and provide related information and access to records, in
accordance with Article 4 of this Agreement.
2.4 Transfer of Rights in the New Intellectual Property. In
consideration of the Owner's grant of the License hereunder, the Developer
hereby agrees to and does hereby assign to the Owner
3
<PAGE> 23
and hereby undertakes to cause all employees and independent contractors of the
Developer to sell, assign, transfer, and convey unto the Owner all of the right,
title and interest in all intellectual property developed by the Developer in
connection with the manufacture, marketing or sale of the Advanced Modeler free
and clear of all liens, encumbrances, licenses etc., which upon its creation
shall become Owner Intellectual Property for purposes of this Agreement. All new
Intellectual Property including but not limited to all Derivative Works which
can be protected under the Federal Copyright Act shall be deemed to be "works
for hire" as that term is used under the Federal Copyright Act and shall be the
sole property of the Owner.
ARTICLE 3.
GRANT OF LICENSE
3.1 The Owner hereby grants to the Developer, in the Agreement
Territory, the following nonexclusive rights and licenses (hereinafter referred
to as the "License"):
3.1.1 The right and license to use the Owner Intellectual
Property solely for the purpose of manufacturing, marketing and selling
the Advanced Modeler.
3.1.2 The right and license to make copies of Owner's
Documentation solely for the purpose of manufacturing, marketing and
selling the Advanced Modeler.
3.1.3 The right and license to copy the Owner Software solely
for the purpose of allowing End-User's to operate and use the Advanced
Modeler purchased by the End-User and the right and license to make one
(1) backup copy of the Owner Software Code solely for backup purposes
and solely for the purpose of operating the Advanced Modeler.
3.2 The License shall be effective commencing on the date that the
Owner elects not to exercise its Option.
3.3 Except as specifically provided for herein, the Developer shall not
use or copy any of the Owner Intellectual Property.
3.4 Except as specifically provided for herein, the License grant
hereunder may not be sold, assigned, pledged, licensed or sublicensed by the
Developer.
3.5 The License granted hereunder shall terminate on the earlier of (a)
the date which is ten (10) years from the date that the Owner elects not to
exercise the Option; or (b) the earlier termination of this Agreement.
4
<PAGE> 24
3.6 The License granted hereunder is limited to the use of the Owner
Intellectual Property solely in connection with the manufacture, marketing and
sale of the Advanced Modeler. Specifically, the Developer may not use the Owner
Intellectual Property to develop any other product or device.
3.7 The License granted hereunder does not include any right to use any
of the trademarks, service marks, or tradenames of the Owner (the "Marks") and
the Developer is hereby prohibited form using any such Marks.
ARTICLE 4.
ROYALTIES AND PAYMENTS
4.1 Royalty Schedule. The Developer shall pay the Owner a royalty equal
to six (6%) of the Net Revenues received by the Developer from the (a) sale,
lease, manufacture or distribution of the Advanced Modeler, or any other product
or devise utilizing all or any part of the Owner Intellectual Property and (b)
support and services related to Advanced Modeler. Such Royalty shall be payable
not later than the fifteenth (15th) day after the close of each calendar month.
For purposes of this Section, the Developer means any person or entity related
to the Developer within the meaning of Sections 267 or 1563 of the Internal
Revenue Code of 1996, as amended.
4.2 Marketing, Training, and Demonstration Copies. No royalty shall be
due or payable with respect to copies of Product Code and Product Documentation
marked "Marketing, Training, and Demonstration Use Only" and used only for such
purpose.
4.3 Statements. Developer shall provide to the Owner a monthly written
statement certifying the gross revenues and Net Revenues of the Developer during
the preceding month. Further, Developer shall provide to the Owner a written
statement not later than fifteen (15) days after the close of each calendar
month certifying for such month the number of Advanced Modelers sold, leased or
otherwise distributed (including Advanced Modelers loaned or consigned)
regardless of whether rights therein have yet passed to transferees thereof and
the serial number for each such Advanced Modeler.
4.4 Audit. Upon the Owner's request, at mutually agreeable times but
not less frequently than twice each calendar year, the Owner, or an agent or
accounting firm chosen by the Owner, shall be provided reasonable access during
normal business hours to the books and records of Developer for purposes of
auditing the royalties and payments due and verifying Developer's other
obligations under this Agreement. Such records shall include all information
concerning the Net Revenues, the number of Advanced Modelers sold, leased or
otherwise distributed, the number of copies of the Owner Intellectual Property
including but not limited to the Owner Software Code and Owner Documentation.
5
<PAGE> 25
ARTICLE 5.
PROTECTION
5.1 The Owner's Confidential Intellectual Property. The Developer
agrees that the Owner's Intellectual Property (other than that part thereof
which registered under U.S. or foreign copyright laws and that part thereof
consisting of claims which are part of patents protected under U.S. and foreign
patent registrations or applications) (hereinafter the "Owner Confidential
Intellectual Property") which contains confidential information of the Owner,
and embody trade secrets was developed by the Owner at substantial cost and
expense. The Developer shall hold the Owner Confidential Intellectual Property
in strict confidence for the Owner and except as specifically provided for
herein shall not use or disclose such Owner Confidential Intellectual Property.
The Developer shall employ reasonable secrecy precautions, at least as
protective as the precautions it uses to protect its own proprietary
information, to protect the Owner Confidential Intellectual Property from
unauthorized copying, use, or disclosure. The Developer shall allow access to
the Owner Confidential Intellectual Property only to employees and contractors
of the Developer who are performing services for the Developer related to the
purposes of the Agreement, who have a need to know information contained in the
Owner Confidential Intellectual Property, and upon whom the Developer has
imposed a legal duty to protect the Owner Confidential Intellectual Property
from unauthorized copying, use, or disclosure. The Developer agrees to use its
best efforts to prevent, prosecute, and enjoin any actual or threatened
unauthorized copying, use, or disclosure of the Owner's Confidential
Intellectual Property.
5.2 Contracts. The Developer shall use its best efforts to prevent,
prosecute, and enjoin any unauthorized copying, distribution, reverse
engineering, and reverse compiling of the Owner's Software and the unauthorized
copying, distribution of any of the Owner's Confidential Intellectual Property
or the disclosure of any Confidential Intellectual Property through appropriate
restrictive contracts entered into by its employees, consultants, and other
third parties having access thereto, and through the use of the Product License
with End-Users, and shall pursue appropriate actions to enforce such protection
provisions.
ARTICLE 6.
WARRANTIES AND LIMITATION OF LIABILITY
6.1 Ownership. The Owner warrants that it is the exclusive owner of
copyrights and patents and other intellectual property incorporated in the Owner
Intellectual Property or has a valid and enforceable license to use all
copyrights, patents and other intellectual property incorporated into the Owner
Intellectual Property and that it has all rights necessary for the grant of
rights and licenses effected by this Agreement.
6
<PAGE> 26
6.2 Exclusive Remedy. Except as provided herein, the Owner shall have
no liability to the Developer for any claim or action arising out of this
Agreement.
6.3 General Disclaimer. EXCEPT AS SPECIFICALLY SET FORTH HEREIN ABOVE,
OWNER DISCLAIMS ANY AND ALL WARRANTIES WITH RESPECT TO THE OWNER INTELLECTUAL
PROPERTY, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTIES OF FITNESS FOR ANY PARTICULAR PURPOSE OR MERCHANTABILITY. In no event
shall the Owner be liable to the Developer for any lost profits or other
incidental or consequential damages relating to the subject matter of this
Agreement.
ARTICLE 7.
OBLIGATION FOR EXPENSES
The Owner shall have no obligation whatsoever to reimburse the
Developer for any expenses or costs incurred by the Developer in the performance
of this Agreement, even at the Owner's suggestion. The Developer's incurring of
costs or expenses under this Agreement is at the Developer's sole risk and upon
the Developer's independent business judgment that such costs and expenses are
justifiable.
ARTICLE 8.
SUPPORT SERVICES
The Owner shall not have any obligation to provide any support services
under this Agreement.
ARTICLE 9.
MARKING OF PRODUCTS
All Owner Software Code and Documentation and all copies thereof
permitted under this Agreement shall be marked with the Owner's copyright and
other proprietary notices as the Owner may reasonably direct. The parties agree
to cooperate in all copyright registrations and to provide to each other
information and documents required for such registration.
7
<PAGE> 27
ARTICLE 10.
TERMS OF AGREEMENT
Except as provided herein, the License and the obligations of the Owner
and the Developer hereunder shall commence on the Effective Date and continuing
until the earlier of (a) the date that is ten (10) year from the date that the
Owner elects not to exercise its Option or (b) the earlier termination of this
Agreement as provided herein. Notwithstanding the foregoing, the obligations of
the Developer under Articles 5 and 9 shall continue indefinitely.
ARTICLE 11.
TERMINATION; EFFECT OF EXPIRATION OR TERMINATION
11.1 The Developer's Option to Terminate. The Developer may terminate
this Agreement at any time. Upon such termination, the Developer shall return
all copies of the Owner Intellectual Property, all Derivative Works and all
models of the Advanced Modeler in its possession to the Owner and destroy all
Derivative Works related thereto.
11.2 Breach. Should either party commit a material breach of any
obligation hereunder, the other party may, at its option, terminate this
Agreement by thirty (30) days' written notice to the other party. Such notice
shall state the default upon which termination is based. Notwithstanding such
notice, termination shall not occur and the defaulting party shall not be liable
for any further remedy if such default is cured within such period.
11.3 Termination of Licenses. Upon termination or expiration of this
Agreement, the rights and licenses herein granted shall terminate.
11.4 Return of Materials. Upon the termination of this Agreement, the
Developer shall immediately deliver to the Owner all copies of the Owner's
Intellectual Property and the New Intellectual Property, Derivative Works of any
and all of the foregoing, and all sales literature produced pursuant to this
Agreement. The Developer shall warrant in writing, upon request of the Owner,
that no copies of any such material have been retained or are within the control
of the Developer. The only exception to the foregoing shall be one archival copy
of items deemed by the Developer to be necessary in enforcement of the
Developer's rights, which archival copy shall be sealed and placed in the hands
of a bonded, independent custodian under a legally enforceable obligation of
confidentiality and nonuse, for use only by the Developer in the assertion of
rights and defenses by the Developer.
8
<PAGE> 28
ARTICLE 12.
INDEMNIFICATION
12.1 Infringement. The Owner hereby indemnifies and holds harmless the
Developer from any claim that the Owner Intellectual Property supplied hereunder
infringes a patent, copyright, trade secret, or similar proprietary right of a
third party in the United States. If such a claim has occurred, or in the
Owner's judgment is likely to occur, the Developer agrees to allow the Owner, at
the Owner's option, to procure the right for the Developer to continue copying,
use, and distribution of such Owner's Intellectual Property to replace or modify
them in a functionally equivalent manner so they become noninfringing. If
neither of the foregoing alternatives is available on terms that are reasonable
in the Owner's judgment, the Developer, upon written request by the Owner, shall
return the Owner's and New Intellectual Property to the Owner and this Agreement
shall terminate.
12.2 Exclusions. The Owner shall have no obligation under Section 13.1
of this Agreement with respect to any claim of infringement of copyright, trade
secret, or similar proprietary right based upon the Developer's modification of
the Owner's Intellectual Property or any New Intellectual Property developed or
created by the Developer or a third party (other than the Owner).
12.3 Limitation. Indemnification of the Developer for claims of
infringement of third-party rights under this Agreement shall be limited to the
amount paid to the Owner with respect to the Code and/or Documentation that is
alleged to be infringing.
12.4 Indemnification by the Developer. The Developer indemnifies and
holds harmless the Owner from any and all claims, demands, or actions based upon
or relating to the manufacture, marketing or sale of the Advanced Modeler by the
Developer.
12.5 Conditions. The foregoing indemnities in this Article 12 shall be
contingent upon the following conditions: The party seeking indemnity shall (1)
give prompt written notice to the other party of any claim, demand, or action
for which indemnity is sought; (2) fully cooperate in the defense or settlement
of any such claim, demand, or action; and (3) obtain the prior written agreement
of the indemnifying party to any settlement or proposal of settlement, which
agreement shall not unreasonably be withheld.
ARTICLE 13.
MISCELLANEOUS
9
<PAGE> 29
13.1 No Assertion of Rights. It is expressly understood and agreed
that, as between the Owner and the Developer, all right, title, and interest in
and to the Owner Intellectual Property and any other material furnished to the
Developer under this Agreement vest solely and exclusively in the Owner, and the
Developer shall neither derive nor assert any title or interest in or to such
items except for the rights and licenses granted under this Agreement.
13.2 Independent Contractor Status. The Developer is an independent
contractor under this Agreement, and nothing herein shall be construed to create
any partnership, joint venture, or agency relationship between the parties
hereto. The Developer is granted no authority under this Agreement to enter into
agreements of any kind on behalf of the Owner, or to bind or obligate the Owner
in any manner to any third party.
13.3 No Conflict of Interest. The Developer represents and warrants
that it has full power and authority to undertake the obligations set forth in
this Agreement, and that it has not entered into any other agreement, nor will
it enter into any other agreement, that would render it incapable of
satisfactorily performing its obligations hereunder or that would place it in a
position of conflict of interest or be inconsistent with its obligations
hereunder.
13.4 Compliance With Law. The Developer agrees that it shall comply
with all applicable laws and regulations of governmental bodies or agencies in
its performance under this Agreement.
13.5 No Assignment/No Sublicensing. The Developer represents that it is
acting on its own behalf and is not acting as an agent for or on behalf of any
third party, and further agrees that it may not assign its rights or obligations
under this Agreement without the prior written consent of the Owner which
consent may be withheld for any or no reason. The Developer may not license or
sublicense any rights under the License to any person or entity without the
prior written consent of the Owner which consent may be withheld for any or no
reason.
13.6 Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
considered effective when deposited in the U.S. mail, postage prepaid, and
addressed to the appropriate party at the address noted above, unless by such
notice a different address shall have been designated in writing.
13.7 Governing Law. All questions concerning the validity, operation,
interpretation, and construction of this Agreement shall be governed by and
determined in accordance with the laws of the State of Minnesota other than the
laws of such State pertaining to conflicts of laws.
13.8 No Waiver. Neither party shall, by mere lapse of time, without
giving notice or taking other action hereunder, be deemed to have waived any
breach by the other party of any of the provisions of this Agreement. Further,
the waiver by either party of a particular breach of this Agreement by the other
shall neither be construed as nor constitute a continuing waiver of such breach
or of other breaches of the same or any other provision of this Agreement.
10
<PAGE> 30
13.9 Force Majeure. Neither party shall be in default if failure to
perform any obligation hereunder is caused solely by supervening conditions
beyond that party's reasonable control, including acts of God, civil commotion,
strikes, labor disputes, and governmental demands or requirements.
13.10 Other Products And Services. The Owner offers other products and
services at separate charges under applicable written standard agreements of the
Owner. The Developer and the Owner agree that any such product and/or service
cannot be the subject of an oral agreement. All such products and services can
be provided to the Developer only under the terms and conditions of a written
standard agreement of the Owner executed by the parties.
13.11 Survival. The provisions of Articles 5, 6, 7, 9, and 12 of this
Agreement shall survive the expiration or termination of this Agreement.
13.12 Scope of Agreement; Amendment. The parties hereto acknowledge
that each has read this Agreement, understands it, and agrees to be bound by its
terms. The parties further agree that this Agreement is the complete and
exclusive statement of the Agreement between the parties and supersedes all
proposals (oral or written), understandings, representations, conditions,
warranties, covenants, and all other communications between the parties relating
to the Code and Documentation. This Agreement may be amended only by a
subsequent writing that specifically refers to this Agreement and that is signed
by both parties, and no other act, document, usage, or custom shall be deemed to
amend this Agreement.
13.13 Further Assurances. The parties shall before and after the
termination of this Agreement, provide each other with such agreements,
certificates and other documents as may be reasonably required to effectuate the
purposes and provisions of this Agreement and, from the date hereof, shall
cooperate and take such action as may be reasonably requested by any of them in
order to carry out the purposes and provisions of this Agreement.
IN WITNESS THEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized representatives as set forth below:
STRATASYS, INC.
By: ___________________________
Title: __________________________
Date:________________, 19____
11
<PAGE> 31
SEK TECHNOLOGIES, LLC
By: ___________________________
Title: __________________________
Date: _______________, 19____
12
<PAGE> 1
Exhibit 10.3
OPTION AGREEMENT
This Option Agreement (the "Agreement") is made effective as of the
21st day of August, 1997, by and between STRATASYS, INC., a Delaware corporation
(the "Company") and SEK TECHNOLOGIES, LLC, a Minnesota limited liability company
(the "Developer").
WITNESSETH:
WHEREAS, the Company has developed conceptual specifications (the
"Specifications") for a commercially exploitable "desk-top" version of a device
that will produce three dimensional models from computer aided design programs
using a variety of materials based in part on existing technology of the Company
(the "Device");
WHEREAS, Developer is engaged in the business of developing and
building prototypes of devices and the molding and tooling to be used in the
manufacturing of the devices;
WHEREAS, the Developer desires to develop the Device and tooling (the
"Tooling") necessary for the manufacture of the parts and subassemblies of the
Device (the "Development Services") all of which will satisfy all of the
Specifications;
WHEREAS, the Developer is willing to bear the risk and cost of
developing a Device which satisfies the Specifications;
WHEREAS, the Developer and the Company previously entered into an
Option Agreement dated April 22, 1997, which they hereby terminate; and
WHEREAS, the Company and the Developer have entered into that certain
User Agreement of even date herewith (a copy of which is attached hereto as
Exhibit 1) whereby the Company has granted the Developer a license to use
certain Owner Intellectual Property and Equipment (all as
<PAGE> 2
defined in the User Agreement) in connection with the development of the Device
and the Tooling, on the condition that, the Developer and the Company enter into
this Option Agreement.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable considerations, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
AGREEMENT:
ARTICLE 1.
DEVELOPMENT
1.1 Development of Device. Developer agrees to use its best efforts to
develop and build, in conformity with the Specifications attached hereto as
Exhibit 1.1. All Development Services shall be performed by qualified
individuals and shall be completed in accordance with sound development
practices and all applicable laws. The Development Services shall include the
making of the Beta Modifications as defined below.
1.2 Development Budget. A preliminary budget for the Development
Services (the "Development Budget") is attached hereto as Exhibit 1.2. The
Development Budget will be revised as necessary from time to time to reflect
added or reduced expenses resulting from changes in Specifications or events
outside the control of the Developer. The Development Budget shall identify all
costs to be incurred by Developer, together with the cost of services and
products to be provided by third parties ("Third Party Costs and Third Party
Services"). The Development Budget shall be prepared in sufficient detail to
permit a meaningful comparison (the "Budget Analysis") of: (i) actual costs
incurred to date together with additional anticipated costs to complete the
Development Services against (ii) budgeted costs. Developer shall prepare the
Budget Analysis on a weekly basis and deliver same to the Company within one
business day following its availability. Developer shall maintain not less
than $300,000 in working capital during the term of this Agreement for the
purpose of funding the Development Services and paying Development Costs.
2
<PAGE> 3
1.3 Budget Analysis. The Developer will provide the Company with copies
of each Budget Analysis projecting a Budget Overage.
1.4 Inspection and Tests. The Company and the Developer will agree on
the appropriate inspection and testing of the Device and the Tooling for
determining whether the Device and the other Deliverables comply with the
Specifications, which inspection and testing procedures shall become part of
this Agreement. The Company shall at all times have free access to the
Developer's facility at all reasonable time for the purpose of determining
whether the Development Services are being accomplished as provided for in this
Agreement.
1.5 Development Costs. Stratasys' only obligation hereunder is to pay
the Option Price.
1.6 Technical Coordinators. The Company and the Developer shall each
from time to time designate one person to act as its Technical Coordinator. The
Technical Coordinators shall be responsible for the day to day communications
between the parties and the coordination of efforts between the parties and
third parties.
ARTICLE 2.
OPTION TO PURCHASE
2.1 Option to Purchase Device. The Company shall have the option (the
"Option") to acquire upon delivery to the Developer of the Option Price either
(a) all right, title and interest in the Device, the Tooling and all of the
Deliverables and the exclusive right to manufacture, distribute, market and
sell the Device and the Tooling, all free and clear of any and all liens and
encumbrances, ("Device Rights") or (b) all right, title and ownership interest
(the "Ownership Interest") in the Developer, free and clear of any and all liens
and encumbrances upon delivery of the Option Price determined in accordance with
Section 4. Such Option shall be exercised by the Company by delivering written
notice of the Company's exercise of the Option to the Developer on or before
December 31, 1999.
3
<PAGE> 4
2.2 Ownership of Device, Intellectual Property. As provided for in the
User Agreement, the Company shall at all times retain ownership of all right
title and interest in the Specifications, the Owner Intellectual Property, the
other tangible and intangible property and other proprietary information of the
Company provided to the Developer by the Company. Upon payment of the Option
Price due hereunder, the Developer shall deliver to the Company the Device and
any and all rights to manufacture, reproduce, use and modify the Device and all
right, title and interest in and to any and all intellectual property used in or
necessary to the manufacture, reproduction, use of, sale, modification of the
Device (the "Device Intellectual Property") other than any intellectual property
owned by an independent third party ("Third Party Intellectual Property") which
the Company has previously agreed to be included in the Device or used in its
manufacture, reproduction, use of, sale, modification on terms agreed to by the
Company and the rights of the Developer under the User Agreement and the License
Agreement shall terminate. The Developer will provide the Company with fully
paid, royalty free, perpetual licenses to use all such Third Party Intellectual
Property in connection with the manufacture, reproduction, use of, sale,
modification of the Device.
ARTICLE 3.
OPTION PRICE
3.1 Acquisition of Device Rights. If the Company elects to acquire all
of the Device Rights, the Option Price shall consist of:
3.1.1 a cash payment equal to the sum of (A) $130,000 for each
Investment Unit (as defined in that certain Private Placement
Memorandum of the Developer) of the Developer (less any amounts
distributed by the Company to the Investors with respect to their
Membership Interests (as defined in that certain Private Placement
Memorandum of the Developer)), (B) the unpaid principal balance of the
Subordinated Notes (as defined in that certain Private Placement
Memorandum of the Developer) and any accrued interest thereon, (C) any
additional capital contributions made to the Company after the
completion of the Offering (as defined in that certain Private
Placement Memorandum of the Developer)(less any amounts distributed by
the Company with respect to such additional
4
<PAGE> 5
capital contribution), (D) a return of 30% per annum up to the date of the
exercise of the Option on the aggregate gross amount received by the Company
from time to time on the sale of the Investment Units (both on the Membership
Interests and the Subordinated Note), giving effect to any Company distributions
to its Members and interest paid or accrued through the exercise date in
computing such 30% return, provided, however, that the minimum cash return per
Investor on the amounts paid for the Investment Units (both on the Membership
Interests and the Subordinated Note) shall not be less than the excess of 30% of
the Investment Unit Price of $250,000 over the sum of any distributions and the
payment of Interest to each respective Investor, and (E) a return on funds
advanced by investors after the completion of the Offering in an amount equal to
such percentage return as is offered by the Company to such investor; and
3.1.2 warrants to purchase shares of the common stock of the Company,
$.01 par value of the Company ("Common Stock") in an amount equal to the sum of
(X) 8,000 warrants for each Investment Unit sold, and (Y) the number of warrants
required to be offered to persons making additional capital contributions if the
Company exercises its Option. Such warrants shall expire three (3) years from
the date the Company exercises its Option and are exercisable at a price of
$13.875 per warrant. The warrants will be in substantially the form attached
hereto as Schedule 3.1.2.
3.1.3 a Success Fee consisting of
3.1.3.1 a cash payment corresponding to the amount set forth
in Schedule 3.1.3 for the week in which the Developer delivers the Beta
Device and Tooling to the Company. For the purposes of this Agreement,
the term Beta shall mean the fully functional and operational product
to which the term applies that represent the final saleable product
except that (a) the product may contain machined parts in lieu of parts
that would or will be produced using tooling and (b) the product may
not have been fully life cycle tested; and
3.1.3.2 options ("Stock Options") to acquire Three Thousand
(3,000) shares of the Common Stock of the Company, $.01 par value
pursuant to the Company's 1994-2 Stock Option Plan as amended on July
15, 1996, by the Board
5
<PAGE> 6
of Directors of the Company on such date subject to the approval of the
Company's shareholders. The Stock Options granted will not qualify as
incentive stock options under the Internal Revenue Code. Such Stock
Options shall be exercisable at a price per share equal to the average
of the closing bid and ask price per share hereof of the Common Stock
on the stock exchange on which the Common Stock is traded on the date
of grant. The Options shall be exercisable over a period of five (5)
years from the date of grant and shall be issuable or assignable to
employees of the Developer who work on the Device. To the extent
permitted by law, the Options shall be registered on Form S-8 as
promulgated by the United States Securities and Exchange Commission.
3.1.4 Seventy-five (75%) of the Success Fee shall be payable
on delivery of the Beta Device and Tooling. The remaining twenty-five
percent (25%) of the Success Fee shall be paid upon the successful
completion of the modifications to the Beta Device and Tooling
resulting from the completion of the testing of the Beta Device and
Tooling (the "Beta Modifications"), but not later than the date that is
four (4) months after delivery of the Beta Device and Tooling provided
Developer has not breached its obligations to successfully complete the
Beta Modifications.
3.2 Acquisition of Ownership Interests. If the Company elects to
exercise its Option to acquire the Ownership Interests of the Members of the
Developer, the Company shall pay the Option Price other than the Success Fee
to the Members in proportion to their Ownership Interests or as otherwise
allocated among the Members by agreement and the Company shall pay the Success
Fee to the Developer.
ARTICLE 4.
ACCEPTANCE AND RETURNS
4.1 Acceptance. All prototype, alpha and beta Devices to be delivered
pursuant hereto shall be received subject to the Company's inspection during
a thirty (30) day period after receipt. The Devices may be returned to
Developer if found that they do not comply with the Specifications. All
claims for defects shall be reported in writing to Developer as soon as
possible. At the request
6
<PAGE> 7
of Developer, the Company shall provide the Developer with samples of allegedly
defective Devices.
4.2 Returns. Upon report of a defect, Developer may request, at its
expense, that the Devices be returned to Developer or, in the alternative, that
the Devices be destroyed at its expense.
ARTICLE 5.
INDEMNIFICATION
5.1 Company's Indemnity. The Company agrees to indemnify and hold
Developer, its officers, directors, employees, agents and representatives
harmless from all actions, losses, damages or expenses (including reasonable
attorneys' fees) which Developer may incur by reason of the willful or negligent
action of the Company or its employees, contractors or agents or the Company's
breach of its obligations hereunder. In addition, the Company will indemnify the
Developer, its officers, directors, employees, agents and representatives
harmless from all actions, losses, damages or expenses (including reasonable
attorneys' fees) which Developer may incur by reason of any infringement of the
Development Services, the Device or any other Deliverable upon the intellectual
property rights of any other person or entity as a result of any Company
Property provided to the Developer for inclusion or use in providing the
Development Services.
5.2 Developer's Indemnity. Developer agrees to indemnify and hold
harmless the Company, its officers, directors, employees, agents and
representatives from all actions, claims, losses, damages or expenses (including
reasonable attorneys' fees) which the Company may incur by reason of the willful
or negligent action of the Developer or its employees, contractors or agents or
the Developer's breach of its obligations hereunder. In addition, the Developer
will indemnify the Company, its officers, directors, employees, agents and
representatives harmless from all actions, losses, damages or expenses
(including reasonable attorneys' fees) which Company may incur by reason of any
infringement of the Development Services, the Device or any other Deliverable
upon the intellectual property rights of any other person or entity other than
any infringement that results from the use of any Company Property provided to
the Developer by the Company for inclusion or use by the Developer in providing
the Development Services or any Third
7
<PAGE> 8
Party Property provided by the Company to the Developer for inclusion or use by
the Developer in providing the Development Services.
5.3 Investigation. The Company and the Developer shall promptly
investigate any and all complaints relating to claims for indemnification
hereunder.
5.4 Inspection. The Company shall, from time to time, have the right to
inspect Developer's facilities for purposes of determining compliance with the
terms and provisions of this Agreement. All such inspections shall be conducted
during regular business hours, and in a manner not to interfere with Developer's
business.
5.5 Insurance. The Company shall carry general products liability
insurance covering the Device and general liability insurance in an amount of
not less than $1 million. Developer shall carry product liability insurance
covering the Device and general liability insurance in an amount of not less
than $1 million, which insurance shall name the Company as an additional and/or
coinsured, as well as fire and other risks insured against by extended or
comprehensive coverage, public liability insurance and workers' compensation
insurance. Either party shall be given thirty (30)days advance written notice of
termination or cancellation of the other party's insurance. Either party shall
provide proof of insurance within ten (10) days of advance written notice. In
the event of a claim which is subject to indemnification from Developer,
Developer's product liability insurance carrier shall be the primary insurer. In
the event of a claim which is subject to indemnification from the Company, the
Company's Device liability insurance carrier shall be the primary insurer. Any
insurance required under this Section shall be issued by a company authorized to
do business in the State in which the principal offices of the party obtaining
the insurance is located and having an A.M. Best & Company, Inc. rating of A or
higher and shall require thirty (30) days advance notice to Landlord before
cancellation or alteration. Each party shall on request deliver to the other
party certificates evidencing the insurance required herein.
8
<PAGE> 9
ARTICLE 6.
TERM OF AGREEMENT AND TERMINATION
6.1 Term:Termination. This Agreement shall become effective as of the
date first above written and shall continue until terminated as provided herein.
6.1.1 Upon either party's breach of any provision of this
Agreement following expiration of a ten (10) day period (the "Notice
Period") commencing on delivery of the non-breaching party's written
notice thereof to the breaching party, the non-breaching party may
elect to immediately terminate this Agreement if the breaching party
has not cured the breach within such Notice Period and upon any such
termination, this Agreement shall have no further force or effect;
provided, however, that Section 7 hereof shall survive indefinitely.
ARTICLE 7.
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
AND
NON-COMPETITION
7.1 Non-Disclosure. Unless granted written permission by the other
party, each party, agrees not to directly or indirectly use or disclose
Confidential Information belonging to the other party (as hereinafter defined)
disclosed by such other party in connection with the performance of this
Agreement.
7.2 Confidential Information. Confidential Information means any
information or compilations of information that derives independent economic
value from not being generally known or readily ascertainable by proper means,
including, without limitation, trade secrets, customer lists, manufacturing
know-how and processes, product formulations and specifications, whether
complete or in process, and any other information which may be designated as
confidential in writing by either party. Nothing herein shall be construed to
preclude disclosure of any information:
9
<PAGE> 10
7.2.1 which is known to the recipient as evidenced by its
written records before receipt thereof under this Agreement;
7.2.2 which is disclosed in good faith to the recipient after
acceptance of this Agreement by a third person lawfully in possession
of such information and not under an obligation of nondisclosure;
7.2.3 which is or becomes part of the public domain or is
publicly divulged through no fault of the recipient;
7.2.4 which is disclosed by the disclosing party to any third
person on a non-confidential basis;
7.2.5 as may be inherent in or reasonably necessary to the
design, manufacture, and finishing of the Device or the Tooling or the
Device Intellectual Property, the testing by accredited laboratories of
samples of the Device to determine if they meet required
specifications, the securing from any governmental agency of any
necessary approval or license, or the obtaining of patents; or
7.2.6 as may be mandatorily requested in any court proceeding,
provided that the party receiving the request shall immediately notify
the other party of such request.
7.3 Documents and Tangible Items. Except as provided herein, all
documents and tangible items which contain or deal in any manner with
Confidential Information belonging to either party shall be and remain the
exclusive property of such party along with all copies, records, abstracts,
notes or reproductions of any kind made from or about the documents and tangible
items or the information they contain.
7.4 Reasonableness of Restrictions. Each party agrees that considering
their relationship and the degree of their mutual reliance, and given the other
terms of this Agreement that the restrictions set forth in this Section are
reasonable. Notwithstanding the foregoing, if any of the covenants set forth in
this Section shall be held to be invalid or unenforceable, the remaining parts
thereof shall nevertheless continue to be valid and enforceable as though the
invalid or unenforceable parts have not been included herein.
10
<PAGE> 11
7.5 Return of Confidential Information and Other Property. Except as
otherwise provided herein, upon termination of this Agreement, each party shall
return to the other party the other party's Confidential Information and any
other property of the other party in its possession.
7.6 Non-competition. Developer will not directly or indirectly assist
any other person or entity to develop a three dimensional modeler of any kind or
type for a period of five (5) years.
7.7 Business Relationships. Developer will not during the period
commencing on the date hereof and ending two (2) years after the termination of
this Agreement:
7.7.1 request, induce, advise or encourage any customer or
supplier, or any other entity having business dealings with the
Company, to withdraw, curtail or cancel such business dealings; or
7.7.2 hire as employee or independent contractor, or request,
induce, advise or encourage a termination of employment by, any other
employee of the Company, whether acting directly or indirectly and
whether acting alone or together with or on behalf of or through any
other entity.
7.8 Other Businesses. During the period commencing on the date hereof
and ending on the date of the termination of this Agreement, Developer shall not
contract to perform any other Development Services for any other person or
entity.
ARTICLE 8.
MISCELLANEOUS
8.1 Binding Nature. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their successors and permitted
assigns.
8.2 Notices. All notices, demands, requests, instructions or other
communications required or permitted to be given by any of the provisions of
this Agreement must be in writing and shall be deemed to have been sufficiently
given only if delivered by (i) hand against receipt therefor or if mailed by
certified or registered mail, postage prepaid, return receipt requested, and if
(ii) sent by facsimile as follows:
11
<PAGE> 12
If to the Company at:
STRATASYS, INC.
14950 Martin Drive
Eden Prairie, MN 55344-2020
Attention: Mr. S. Scott Crump
Telephone: 612-937-3000
Facsimile: 612-937-0070
With a copy to:
Larry A. Koch
Maslon Edelman Borman & Brand, LLP
3300 Norwest Center
90 S. Seventh Street
Minneapolis, MN 55402-4140
Telephone: 612-672-8200
Facsimile: 612-672-8397
If to Developer at:
SEK TECHNOLOGIES, LLC
930 Calle Negocio
Suite "D"
San Clemente, CA 92673-6209
Attention: Patrick Nguyen
Telephone: (714) 369-8130
Facsimile: (714) 369-8131
With a copy to:
Nicholas Yocca
Attorney At Law
660 Newport Center Drive, Suite 600
Newport Beach, CA 92660
Telephone: 714-725-4000
Facsimile: 714-725-4100
or to such other address as may be designated by a party hereto by notice
similarly given, and shall be deemed to have been duty given upon the receipt
thereof if delivered by hand or facsimile, and on the third business day after
mailing, if mailed.
12
<PAGE> 13
8.3 Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof, and any modification of this Agreement shall be in writing and shall be
signed by a duly authorized representative of each party.
8.4 Superseded Prior Understandings. This Agreement shall be deemed to
supersede any agreements heretofore entered into by and between Developer and
the Company.
8.5 Governing Law. This Agreement shall be interpreted and construed,
and the legal relationships created hereby shall be construed in accordance with
the laws of the State of Minnesota, without giving effect to conflict of law
provisions contained therein.
8.6 Assignment. This Agreement is not assignable by either party
without the prior written consent of the other party.
8.7 Severability. If any portion or provision of the Agreement shall be
held unenforceable or illegal, the illegal or unenforceable provision shall be
inoperable and the remaining provision of this Agreement shall be effective as
if such unenforceable or illegal provision were not a part thereof.
8.8 Arbitration. If any disagreements arise under this Agreement that
are not settled promptly in the ordinary course of business, the senior
management of the parties shall meet promptly to attempt to resolve the problems
on an informal basis. If the senior management is not able to resolve such
problems within a reasonable time, any dispute between the Company and the
Developer arising out of, relating to, or in connection with this Agreement
involving its interpretation or the obligations of a party thereto, shall be
determined by binding arbitration using the following procedures:
8.8.1 The arbitration shall be conducted under the administration
of and in accordance with the commercial arbitration rules of the
American Arbitration Association ("AAA") in Minneapolis, Minnesota, as
modified by this Agreement.
8.8.2 There shall be three (3) arbitrators on the panel. The
chairman shall be an attorney at law and the other two shall have a
background or training in computer law, computer science or the
computer industry. Each party shall appoint one (1) arbitrator within
thirty (30) days after the first demand for arbitration, and the third
arbitrator shall be appointed by the first two. If either party fails
to appoint its arbitrator or if a third arbitrator
13
<PAGE> 14
is not chosen by agreement of the first two within forty-five (45) days
after the first demand for arbitration, either party may request the
AAA to appoint the remaining arbitrators. All arbitrators shall be
independent of the party appointing him.
8.8.3 The validity and performance of this Agreement shall be
governed by the internal laws of the State of Minnesota without regard
to its rates on conflict of law.
8.8.4 The arbitrators shall have the authority to permit
discovery, to the extent deemed appropriate by the arbitrators, upon
request of a party. The arbitrators shall have no power or authority to
add to or detract from the agreements of the parties. The cost of the
arbitration shall be home equally pending the arbitrator's award. The
arbitrators shall have the authority to grant any temporary preliminary
or permanent injunctive or other equitable relief in a form
substantially similar to that which would otherwise be granted by a
court.
8.8.5 Any monetary award shall be in United States Dollars,
and the award may include the costs of the arbitration, reasonable
attorney fees, and interest at commercial rates from the date the
compensated loss occurred at the discretion of the arbitrators. The
resulting arbitration award may be enforced by all lawful remedies,
including, without limitation, injunctive or other equitable relief in
any court of competent jurisdiction.
8.9 Enforcement. In the event either party shall commence litigation to
enforce any provision of this Agreement and/or with regard to any dispute
associated with this Agreement not governed by the arbitration provisions
hereof, the prevailing party shall be entitled to collect its costs, including
reasonable attorneys' fees from the nonprevailing party.
14
<PAGE> 15
IN WITNESS WHEREOF, the parties execute this Agreement as of the date
and year first above written.
STRATASYS, INC SEK TECHNOLOGIES, LLC
By: /s/ S. Scott Crump By: /s/ Joseph Lewis Calderon
----------------- -------------------------
Its: President Its: Manager
--------- -------
15
<PAGE> 16
Exhibit 1
User Agreement
<PAGE> 17
Exhibit 1.1
SPECIFICATIONS
<PAGE> 18
EXHIBIT 1.2
DEVELOPMENT BUDGET
<TABLE>
<CAPTION>
1997 1998
<S> <C> <C>
EXPENSES $1,500,000 $1,000,000
TOOLING 300,000 700,000
SW 400,000 300,000
PERFORMANCE BONUS 0 300,000
---------- ----------
TOTAL $2,200,000 $2,300,000
========== ==========
</TABLE>
<PAGE> 19
Exhibit 3.1.2
Form of Warrant
<PAGE> 20
EXHIBIT 3.1.3
SUCCESS FEE
<TABLE>
<CAPTION>
Month Beginning Amount of Success Fee
--------------- ---------------------
<S> <C>
May, 1998 465,000
June,1998 425,000
July, 1998 380,000
August, 1998 330,000
September, 1998 275,000
October, 1998 215,000
November, 1998 150,000
December, 1998 80,000
January, 1999 0
</TABLE>
<PAGE> 1
Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of January 4,
1999 by and between Stratsys, Inc., a Delaware corporation (the "Company"), and
each of the signatures to this Agreement(each a "Holder" and, collectively, the
"Holders").
W I T N E S S E T H:
WHEREAS, the Holders are the holders of warrants to purchase an
aggregate of 128,000 shares of Common Stock of the Company (the "Warrants")
issued in connection with a private placement of the SEK Technologies LLC, in
the aggregate amount of up to $2.5 million (the "Private Placement"); and
WHEREAS, the Company and the Holder desire that certain terms and
provisions be applicable to the Warrants and the shares of Common Stock
underlying the Warrants (the "Registrable Securities") held by the Holders;
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, and for other good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties hereby agree as follows:
Section 1. Registration Rights. The Company covenants and agrees with
the Holders that, at any time commencing 180 days after the Final Closing of the
Offering, the Company will, upon the demand of not less than 50% of the Holders,
file with the Securities and Exchange Commission ("SEC") a Registration
Statement (the "Registration Statement"), a post-effective amendment to an
existing Registration Statement (the "Amendment"), or a Regulation A Offering
Statement (an "Offering Statement") under the Securities Act of 1933, as amended
(the "Act"), registering or qualifying the Registrable Securities for sale after
completion of the Private Placement. The Company will use its best efforts,
through its officers, directors, auditors and counsel in all matters necessary
or advisable, to cause to become effective such Registration Statement as
promptly as practicable, and, for a period of one year thereafter, to reflect in
the Amendment, Registration Statement or Offering Statement, financial
statements which are prepared in accordance with Section 10(a)(3) of the Act and
any facts or events arising that, individually, or in the aggregate, represent a
fundamental and/or material change in the information set forth in
<PAGE> 2
the Amendment, Registration Statement or Offering Statement to enable any holder
of the Registrable Securities to sell such Registrable Securities during said
period.
Section 2. Piggyback Registration Rights. The Company covenants and
agrees with the Holders and any other holder of the Registrable Securities that
if, at any time within the period commencing from the date hereof, and ending
five (5) years thereafter, it proposes to file a Registration Statement,
Amendment or Offering Statement, as the case may be (collectively, a
"Registration Statement") with respect to any class of security (other than
pursuant to a Registration Statement on Forms S-4 or S-8 or any successor form)
under the Act in a primary registration on behalf of the Company and/or in a
secondary registration on behalf of holders of securities, and the Registration
Statement to be used may be used for registration of the Registrable Securities,
the Company will give written notice to the holders of the Registrable
Securities at least thirty (30) days prior to the filing of such Registration
Statement at the addresses appearing on the records of the Company of its
intention to file a Registration Statement, and will offer to include in such
Registration Statement, all or any portion of the Shares, and limited, in the
case of a Regulation A offering, to the amount of the available exemption. The
offer to include the Shares is limited by subparagraphs (a) and (b) of this
Section 2. In any event, the maximum number of Registrable Securities which
shall be registered shall not exceed that number for which the Company has
received written requests for inclusion therein within fifteen (15) days after
the giving of notice by the Company. The Company will use its best efforts,
through its officers, directors, auditors and counsel in all matters necessary
or advisable, to cause to become effective such Registration Statement as
promptly as practicable. All registrations requested pursuant to this section 2
are referred to herein as "Piggyback Registrations." All Piggyback Registrations
pursuant to this Section 2 will be made solely at the Company's expense, except
for the Holders' counsel fees and sales commissions incurred if the Registrable
Securities are sold.
-2-
<PAGE> 3
(a) Priority on Primary Registrations. If a Piggyback
Registration includes an underwritten primary registration on behalf of
the Company and the underwriter so requests, the Company and such
holder of Registrable Securities will enter into an underwriting
agreement with such underwriter for such offering, which shall be
reasonably satisfactory in substance and form to the Company, such
holder of Registrable Securities and the underwriter, and such
agreement shall contain such representations and warranties by the
Company and such holder of Registrable Securities and such other terms
and provisions as are customarily contained in underwriting agreements
with respect to secondary distributions, including, without limitation,
indemnities substantially to the effect and to the extent provided in
Section 8. Furthermore, if the underwriter(s) for the offering being
registered by the Company shall determine in good faith and advise the
Company in writing that in its/their opinion the number of Registrable
Securities requested to be included in such registration exceeds the
number that can be sold in such offering without materially adversely
affecting the distribution of such securities by the Company (such
opinion to state the reasons therefor), then the Company will promptly
furnish the Holders of the Registrable Securities with a copy of such
opinion and the Company will include in such registration (1) first,
the securities that the Company proposes to sell and (ii) second, the
Registrable Securities requested to be included in such registration,
apportioned pro rata among the holders of the Registrable Securities,
but in any event not less than 50% of the Shares, and (iii) third,
securities of the holders of other securities requesting registration.
(b) Priority on Secondary Registrations. If a Piggyback
Registration consists only of an underwritten secondary registration on
behalf of
-3-
<PAGE> 4
holders of securities of the Company and the underwriter(s) for the
offering being registered by the Company advise the Company in writing
that in its/their opinion the number of Registrable Securities
requested to be included in such registration exceeds the number which
can be sold in such offering without materially adversely affecting the
distribution of such securities by the Company (such opinion to state
the reasons therefor) then the Company will promptly furnish the
Holders of the Registrable Securities with a copy of such opinion and,
the Company will include in such registration (i) first, the securities
requested to be included therein by the Holders requesting such
registration and the Registrable Securities requested to be included in
such registration above, pro rata, among all such Holders on the basis
of the number of shares requested to be included by each such holder,
but in any event not less than 50% of the Registrable Securities and
(ii) second, other securities requested to be included in such
registration.
Notwithstanding the foregoing, if any such underwriter shall determine
in good faith and advise the Company in writing that the distribution of the
Registrable Securities requested to be included in the registration concurrently
with the securities being registered by the Company would materially adversely
affect the distribution of such securities by the Company, then the holders of
such Registrable Securities shall delay their offering and sale for such period
ending on the earliest of (i) 90 days following the effective date of the
Company's registration statement, (ii) the day upon which the underwriting
syndicate, if any, for such offering shall have been disbanded or, (iii) such
date as the Company, managing underwriter and holders of Registrable Securities
shall otherwise agree. In the event of such delay, the Company shall file such
supplements, post-effective amendments and take any such other steps as may be
necessary to permit such holders to make their proposed offering and sale for a
period of 120 days immediately following the end of such period of delay. If any
party disapproves of the terms of any such underwriting, it may
-4-
<PAGE> 5
elect to withdraw therefrom by written notice to the Company, the underwriter,
and the Stockholders. Notwithstanding the foregoing, the Company shall not be
required to file a registration statement to include Shares pursuant to this
Section 2 if an opinion of independent counsel, reasonably satisfactory to
counsel for the Company and counsel for the Stockholders, that all of the
Registrable Securities proposed to be disposed of may be transferred pursuant to
the provisions of Rule 144 under the Act shall have been delivered to counsel
for the Company.
Section 3. Other Registration Rights. In addition to the rights above
provided, the Company will cooperate with the then holder in preparing and
signing any Registration Statement, in addition to the Registration Statements
and Offering Statements discussed above, required in order to sell or transfer
the Registrable Securities and will supply all information required therefor,
but such additional Registration Statement shall be at the then Holders' cost
and expense; provided, however, that if the Company elects to register and
qualify additional shares of Common Shares, the cost and expenses of such
Registration Statement will be pro rated, between the Company and the Holders of
the Registrable Securities according to the aggregate sales price of the
securities being registered.
Section 4. Certain Understandings. The Holder understands that the
Company makes no representations of any kind concerning its intent or ability to
offer or sell any of the Registrable Securities in a public offering or
otherwise and that its sole rights to have the Registrable Securities registered
under the Act are contained in this Agreement. So long as there are Registrable
Securities outstanding and the Company is subject to the reporting requirements
of the Act and the Securities Exchange Act of 1934 (the "Exchange Act"), the
Company will file the reports required to be filed by it under the Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder, and
will take such further action as the holders of Registrable Securities may
reasonably request, all to the extent required from time to time to enable the
holders of Registrable Securities to sell Registrable Securities without
registration under the Act within the limitation of the exemptions provided by
(i) Rule 144 under the Act, as such
-5-
<PAGE> 6
Rule may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of the holders of Registrable
Securities, the Company will deliver to the holders of Registrable Securities a
written statement as to whether it has compiled with such information
requirements.
Section 5. Company Obligations. In connection with the registration of
the Registrable Securities pursuant to this Agreement, the Company shall:
(a) furnish to the holders of the Registrable Securities and to the
underwriter(s), if any, thereof such reasonable number of copies of the
Registration Statement, preliminary prospectus, final prospectus and such other
documents as such holders and underwriters may request in order to facilitate
the public offering of such securities;
(b) use its best efforts to register or qualify the Registrable
Securities under state securities laws of the jurisdictions which the holders
thereof may reasonably request in writing within 20 days following the original
filing of such Registration Statement, and do any and all other acts and things
which may be necessary or advisable to enable the holders of Registrable
Securities to consummate the disposition of Registrable Securities in such
jurisdictions, except that the Company shall not be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(c) notify the holders of the Registrable Securities promptly when such
Registration Statement has become effective or a supplement to any prospectus
forming a part of such Registration Statement has been filed; and
(d) advise the holders of the Registrable Securities, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of any stop
order by the SEC suspending the effectiveness of such Registration Statement, or
the initiation or threatening of any proceeding for that purpose and promptly
use its
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best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued.
(e) prepare and file with the SEC such amendments and supplements to
such Registration Statement, and the prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective and to comply
with the provisions of the Act with respect to the disposition of all
Registrable Securities and other securities covered by such Registration
Statement, until the earlier of (a) such time as all of such Registrable
Securities and securities have been disposed of in accordance with the intended
methods of disposition by seller or sellers thereof set forth in such
Registration Statement, or (b) the expiration of 90 days after such Registration
Statement becomes effective;
(f) furnish to the holders of the Registrable Securities a signed
counterpart, addressed to the holders of the Registrable Securities, of (A) an
opinion of counsel for the Company dated the effective date of such registration
statement (and, if such registration includes an underwritten public offering,
dated the date of the closing of such underwritten public offering), and (B) a
"cold comfort" letter signed by the independent public accountants who have
certified the Company's financial statements included in such Registration
Statement, covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
such accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities and, in the case of the accountants' letter, such other
financial matters, as the holders of the Registrable Securities may reasonably
request;
(g) promptly notify the holders of the Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under the
Act, of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, would include an untrue
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<PAGE> 8
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 in the
light of the circumstances then existing, and at the reasonable request of the
holders of the Registrable Securities prepare and furnish to the holders of the
Registrable Securities such number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities or securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;
(h) in connection with the preparation and filing of the Registration
Statement registering Registrable Securities under the Act, the Company will
give the holders of Registrable Securities and their counsel and accountants,
the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the SEC, and each
amendment thereof or supplement thereto, and will give each of them such access
to its books and records and such opportunities to discuss the business of the
Company with its officers and the independent public accountants who have
certified its financial statements as shall be reasonably necessary, in the
opinion of the holders of Registrable Securities, or their counsel, to conduct a
reasonable investigation within the meaning of the Act.
(i) otherwise use of all of its or their reasonable efforts to comply
with all applicable rules and regulations of the SEC and make available to its
securities holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning after the effective date
of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Act; and
(j) provide and cause to be maintained a transfer agent and registrant
for such Registrable Securities from and after a date not later than the
effective date of such registration statement.
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Section 6. Expenses. The Company will bear all expenses attendant to
registering the Registrable Securities, including, without limitation, all
registration and filing fees, all listing fees, all fees and expenses of
complying with securities or blue sky laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses and the fees and
disbursements of counsel for the Company and its independent public accountants,
including the expenses of "cold comfort" letters and expenses of any special
audits required by or incident to such performance and compliance, premiums and
other costs of policies of insurance against liabilities arising out of the
public offering of the Registrable Securities being registered and any fees and
disbursements of underwriters customarily paid by issuers and sellers of
securities, but excluding underwriting discounts and commissions, if any,
applicable to the sale of such securities. Furthermore, the Company shall not be
required to pay the fees and disbursements of counsel and accountants for any
holder of Registrable Securities or other expenses incurred by any holder
thereof that are not customarily paid by an issuer in response to the exercise
of registration rights.
Section 7. Indemnification and Contribution. The Holders understand
that indemnification and contribution provisions such as the following are
customarily included in an underwriting agreement and agree that they will enter
into an agreement containing such provisions or provisions substantially similar
thereto as a condition precedent to the registration by the Company of any of
their Registrable Securities:
(a) The Company will indemnify and hold harmless each holder of
Registrable Securities which are included in a Registration Statement pursuant
to the provisions of this Agreement and any underwriter (as defined in the Act)
for such holder, each officer, director, employee, agent and counsel, if any, of
each such holder and underwriter, and each person, if any, who controls such
holder or such underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act (each, a "person who controls" or a
"controlling person"), from and against, any and all loss, claim, damage,
liability, cost and expense (including,
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<PAGE> 10
without limitation, reasonable legal expenses) to which such holder or any such
underwriter, officer, director, employee, agent, counsel or controlling person
may become subject under the Act or otherwise, insofar as such losses, claims,
damages, liabilities, costs or expenses (or actions or proceedings in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement, any
prospectus contained therein or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statement
therein, in light of the circumstances in which they were made, not misleading;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability, cost or expense arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission so made in reliance upon and in strict conformity with
information furnished by or on behalf of such holder, underwriter, officer,
director, employee, agent, counsel or controlling person in writing specifically
for use in the preparation thereof.
(b) Each holder of Registrable Securities included in a registration
pursuant to the provisions of this Agreement will indemnify and hold harmless
the Company, any underwriter, each officer, director, employee, agent, counsel
of and each person who controls the Company or such underwriter from and
against, any and all losses, damages, liabilities, costs or expenses to which
the Company or such officer, director, employee, agent, counsel or controlling
person may become subject under the Act or otherwise, insofar as such losses,
damages, liabilities, costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained in such Registration
Statement, any prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
so made in reliance upon and in strict conformity with
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written information furnished by or on behalf of such holder specifically for
use in the preparation thereof.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of Sections 7(a) or (b) of notice of the commencement of any action
involving the subject matter of the foregoing indemnity provisions, such
indemnified party will, if a claim thereof is to be made against the
indemnifying party pursuant to the provisions of said subparagraph (a) or (b),
promptly notify the indemnifying party of the commencement thereof; but the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than hereunder.
In case such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall
have the right to participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or in addition to those available
to the indemnifying party, or if there is a conflict of interest which would
prevent counsel for the indemnifying party from also representing the
indemnified party, the indemnified party or parties shall have the right to
select separate counsel to participate in the defense of such action on behalf
of such indemnified party or parties. After notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of Sections 7(a) or (b) for any legal or other expense subsequently
incurred by such indemnified party in connection with the defense thereof, other
than reasonable costs of investigation, unless (i) the indemnified party shall
have employed counsel in accordance with the provisions of the immediately
preceding sentence, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the commencement of
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the action, or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 7 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages or liabilities referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of such indemnifying party and
indemnified parties in connection with the actions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying party or
indemnified parties and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action; provided,
however, that any holder of Registrable Securities shall not be required to
contribute in an amount greater than the dollar amount of the proceeds received
by such holder of Registrable Securities with respect to the sale of any
securities. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to include,
subject to the limitations set forth in this Section 7(d), any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to
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contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 8. No Inconsistent Agreements. The Company shall not on or
after the date of this Agreement enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The Company has not previously entered into or become a party
to nor is it bound by any agreement with respect to its securities granting any
registration rights to any person, except as set forth in or as contemplated by
the Merger Agreement. The rights granted to the holders of Registrable
Securities hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the securities of the Company under
any other agreements.
Section 9. Miscellaneous.
(a) All notices or other communications given or made hereunder shall
be in writing and shall be delivered by hand, against written receipt, or mailed
by registered or certified mail, return receipt requested, postage prepaid, to
the Stockholders at their respective address appearing on the records of the
Company and to the Company at its address set forth above. Notices shall be
deemed given on the date of receipt or, if mailed, three business days after
mailing, except notices of change of address, which shall be deemed given when
received.
(b) Notwithstanding the place where this Agreement may be executed by
the Stockholders or the Company, they agree that all the terms and provisions
hereof shall be construed in accordance with and governed by the laws of the
State of Delaware without regard to principles of conflict of laws.
(c) This Agreement constitutes the entire agreement between the
Stockholders and the Company with respect to the subject matter hereof and may
be amended only by a writing executed by each of them.
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(d) This Agreement shall be binding upon and inure to the benefit of
each of the Stockholders's and the Company and their respective heirs, legal
representatives, successors and assigns.
(e) The Stockholders and the Company each hereby submit to the
non-exclusive jurisdiction of the courts of the State of New York located in New
York, New York and of the federal courts located in the Southern District of New
York with respect to any action or legal proceeding commenced by either of them
with respect to this Agreement or to the Registrable Securities. Each of them
irrevocably waives any objection they now have or hereafter may have respecting
the venue of any such action or proceeding brought in such a court or respecting
the fact that such court is an inconvenient forum and consents to the service of
process in any such action or proceeding by means of registered or certified
mail, return receipt requested, in care of the address set forth above or below
or at such other address as either of them shall furnish in writing to the
other.
(f) The parties hereto acknowledge and agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement,
this being in addition to any other remedy to which they may be entitled by law
or equity.
(g) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(h) The waiver by either the Stockholders or the Company of a breach of
any provision of this Agreement shall not operate, or be construed, as a waiver
of any subsequent breach of any provision of this Agreement.
(i) The Holders and the Company agree to execute and deliver all
further documents, agreements and instruments and to
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<PAGE> 15
take such other further action as may be necessary or appropriate to carry out
the purposes and intent of this Agreement.
(j) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
(k) References in this Agreement to the pronouns "him," "he" and "his"
are not intended to convey the masculine gender alone and are employed in a
generic sense and apply equally to the feminine gender or to an entity.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Stratasys, Inc
By: By:
------------------------------ -------------------------------
Holder S.Scott Crump, President
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KCSA
WORLDWIDE NEWS
- --------------------------------------------------------------------------------
Public & Investor Relations, Corporate & Marketing
Communications
FOR: STRATASYS, INC.(R)
CONTACT: S. Scott Crump, Chairman and President
Tom Stenoien, Chief Financial Officer
(612) 937-3000
KCSA: Joseph A. Mansi/Jeffrey Corbin
(212) 896-1205/(212) 896-1214 (phones)
(212) 697-0910 (fax)
[email protected]/[email protected] (e-mail)
FOR IMMEDIATE RELEASE
STRATASYS, INC. ACQUIRES RAPID PROTOTYPING TECHNOLOGY
Eden Prairie, Minn., January 4, 1999 -- Stratasys, Inc. (NASDAQ: SSYS) today
announced that it has acquired new rapid prototyping (RP) technology which the
Company expects will significantly enhance its product mix and capabilities.
The cost of this new RP technology, developed by a private research and
development company, is approximately $6.5 million plus warrants to purchase
128,000 shares of Stratasys common stock exercisable at $13.88 per share.
Stratasys expects to be operationally profitable in the fourth quarter and
for the entire year ended December 31, 1998, although it intends to account for
substantially all the newly acquired technology costs as in-process engineering
costs, which will negatively impact the company's December 31, 1998 year-end net
earnings.
Stratasys expects that the products derived from this new technology
should be introduced to the marketplace in approximately a year.
(more)
800 Second Avenue Tel 212 682 6300 E-mail [email protected]
New York, NY 10017 Fax 212 697 0910 http:// www.kcsa.com
<PAGE> 2
STRATASYS/2
Stratasys Inc. is a manufacturer of rapid prototyping systems for
automotive, aerospace, industrial, recreation, electronic, medical and consumer
products OEM's. The Company's patented Fused Deposition Modeling (FDM) and
Genisys rapid prototyping processes create 3-dimensional plastic and wax
prototype parts directly from 3-D CAD systems. The Company is located at 14950
Martin Drive, Eden Prairie, Minnesota 55344-2020.
# # #
Except for the historical information herein, the matters discussed in this news
release are forward-looking statements that involve risks and uncertainties,
including the timely development and acceptance of new products, the impact of
competitive products and pricing, and the other risks detailed from time to time
in the Company's SEC Reports, including the report on Form 10-KSB for the year
ended December 31, 1997, and on Form 10-QSB for the quarters ended June 30, 1998
and September 30, 1998.
This release is available on the Stratasys website at www.stratasys.com and the
KCSA Worldwide website at www.kcsa.com.
