Warrant Agreement

EXHIBIT 10.2


THE SECURITIES EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, HAVE BEEN TAKEN FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.


WARRANT AGREEMENT


This Warrant Agreement (the "Agreement") is made and entered into this 9th day of September, 1996 by and between 3D Systems Corporation, a Delaware corporation (the "Company"), and Keltool, Inc., a Minnesota corporation (the "Holder").


In consideration of the premises and mutual covenants contained herein, the Holder and the Company hereby agree as follows:


1. GRANT OF WARRANT. In consideration of the sum of $100.00 and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company hereby grants to the Holder the right and option (the "Warrant"), upon the terms and subject to the conditions set forth in this Agreement, to purchase an aggregate of 50,000 shares of Common Stock, par value $0.001 per share, (as from time to time adjusted pursuant to Section 4 below, the "Shares") of the Company for $14.75 per share (the "Exercise Price"). The number of Shares and the Exercise Price shall be subject to adjustment as set forth in Section 4 hereof.


2. TERM OF WARRANT. The Warrant shall terminate and expire at 5:00 p.m. (Los Angeles Time) on September 9, 1999.


3. EXERCISE OF WARRANT. There is no obligation to exercise all or any portion of the Warrant. The Warrant may be exercised, in whole or in minimum increments of 10,000 Shares, at any time after the date hereof only by delivery to the Company of:


3.1 Written notice of exercise in form and substance identical to Exhibit "A" attached to this Agreement; and


3.2 Payment of the Exercise Price of the Shares being exercised (the "Purchased Shares"), by (a) wire transfer in immediately available Federal funds, or (b) in the manner set forth in Section 3.5 below.


3.3 Upon receipt of the Exercise Price therefor, the Company shall promptly issue in the name of the Holder a certificate evidencing the Purchased Shares being purchased by such exercise and deliver such certificate to the address requested in the notice of exercise.


3.4 No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction.


3.5 Notwithstanding any provisions herein to the contrary, if the fair market value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company, together with the properly endorsed Notice of Exercise and notice of such election, in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:


Y (A-B)
-------
X = A


Where X = the number of shares of Common Stock to be issued to the Holder


Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised,
the portion of the Warrant being canceled (at the date of such
calculation)


A = the fair market value of one share of the Company's Common Stock
(at the date of such calculation)


B = Exercise Price (as adjusted to the date of such calculation)


For purposes of the above calculation, fair market value of one share of
Common Stock shall be determined by the Company's Board of Directors in
good faith; provided, however, that where there exists a public market for
the Company's Common Stock at the time of such exercise, the fair market
value per share shall be the average of the closing bid and asked prices of
the Common Stock quoted in the Over-The-Counter Market Summary or the last
reported sale price of the Common Stock or the closing price quoted on the
Nasdaq National Market or on any exchange on which the Common Stock is
listed, whichever is applicable, as published in the Western Edition of The
Wall Street Journal for the five (5) trading days prior to the date of
determination of fair market value.


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4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOLDER. The Holder makes the following representations, warranties and covenants:


4.1 Holder is acquiring the Warrants for its own account with the present intention of holding such securities for investment purposes only and not with a view to, or for sale in connection with, any distribution of such securities (other than a distribution in compliance with all applicable federal and state securities laws).


4.2 Holder is an experienced and sophisticated investor and has such knowledge and experience in financial and business matters that it is capable of evaluating the relative merits and the risks of an investment in the Warrants and in the Shares and of protecting its own interests in connection with this transaction.


4.3 Holder is willing to bear and is capable of bearing the economic risk of an investment in the Warrants and the Shares.


4.4 The Company has made available, prior to the date of this Agreement, to Holder the opportunity to ask questions of the Company and its officers, and to receive from the Company and its officers information concerning the terms and conditions of the Warrants and this Agreement and to obtain any additional information with respect to the Company, its business, operations and prospects, as reasonably requested by the Holder.


4.5 Holder is an "accredited investor" as that term is defined under Rule 501(a)(8) of Regulation D promulgated by the Securities and Exchange Commission under the Act.


4.6 For purposes of the application of federal and state securities laws, Holder acknowledges that the offer and sale of the Warrants to such Holder occurred in the State of Minnesota and that Holder is a resident of the State of Minnesota.


5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.


5.1 The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has the requisite corporate power and authority to carry on its business as now being conducted and to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.


5.2 All corporate action on the part of the Company, its directors and shareholders necessary for the authorization, execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby, has been taken. This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms, subject to laws of general application relating to


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bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.


5.3 The execution and delivery of this Agreement by the Company does not, and the consummation by the Company of the transactions contemplated by this Agreement will not, constitute or result in a breach or violation of, or (with or without the giving of notice or the lapse of time) a default under, (i) the Certificate of Incorporation or By-laws of the Company or (ii) any law to which the Company is subject.


5.4 The Purchased Shares, when issued in accordance with the terms of this Warrant, will be duly authorized, issued and nonassessable shares of the Common Stock of the Company, free and clear of any liens, claims or restrictions imposed by or through the Company other than as set forth in this Agreement.


5.5 The Company covenants that it will at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the issuance of the Purchased Shares upon exercise of all or part of the Warrants, such number of shares of Common Stock as shall then be issuable upon the exercise of all of the Warrants.


5.6 The Company covenants that the Company currently meets the eligibility requirements for use of Form S-3 for transactions involving secondary offerings.


6. RESTRICTIONS ON TRANSFER OR EXERCISE OF THE WARRANTS AND SHARES. Holder shall not sell, transfer (with or without consideration), assign, pledge, hypothecate or otherwise dispose of (collectively, "Transfer") any of the Purchased Shares unless the Purchased Shares are disposed of pursuant to and in conformity with an effective registration statement filed with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Act"), or pursuant to an available exemption from the registration and prospectus delivery requirements of the Act, and the proposed disposition will not result in a violation of the securities laws of any state of the United States.


If requested by the Company, Holder shall, prior to the transfer of such Purchased Shares, deliver to the Company a written opinion of counsel, satisfactory to the Company and its counsel, that the proposed disposition will comply with the requirements set forth in this Section 6.


Any attempted Transfer which is not in full compliance with this Section 6 shall be null and void AB INITIO, and of no force or effect.


The Holder further agrees that any certificate evidencing the Purchased Shares shall bear the following legend:


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THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER
HEREOF, A COPY OF WHICH AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICES OF THE COMPANY.


The Holder further acknowledges and agrees that the Company may, at its option, place notations evidencing the foregoing restrictions on transfer in its shareholders register, and may place appropriate "stop transfer" instructions with its transfer agent, if any.


7. COVENANTS OF HOLDER AND THE COMPANY.


7.1 DEMAND REGISTRATION.


(a) As soon as practical following receipt by the Company of a written request executed by the Holder and requesting registration of the resale by Holder of all of the Purchased Shares, the Company shall at its sole cos ...