UNITED STATES
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): July 12, 2022
Markforged Holding Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction
of Incorporation)
001-39453 |
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98-1545859 |
(Commission File Number) |
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(I.R.S. Employer Identification No.) |
480 Pleasant Street Watertown, MA |
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02472 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(866) 496-1805
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class: |
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Trading Symbol: |
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Name of Each Exchange on Which Registered: |
Common Stock, $0.0001 par value per share |
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MKFG |
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New York Stock Exchange |
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock, $0.0001 par value |
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MKFG.WS |
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New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement
On July 11, 2022, Markforged Holding Corporation (the “Company”) entered into a Sale and Purchase Agreement (the “Purchase Agreement”) by and between the Company and Höganäs Aktiebolag, Reg. No. 556005-0121, a limited liability company incorporated under the laws of Sweden (the “Seller”) pursuant to which the Company will acquire all of the outstanding share capital of Digital Metal AB, Reg. No. 556603-4152, a limited liability company incorporated under the laws of Sweden (“Digital Metal”). Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions thereof, the Company will pay Seller consideration composed of (i) approximately $32,000,000 payable in cash, (ii) approximately 4,100,000 unregistered shares of the Company’s common stock, par value $0.0001 (the “Stock Consideration”) and (iii) approximately $1,500,000 payable in cash to settle certain intercompany balances between the Seller and Digital Metal, subject to certain adjustments. The completion of such transaction is expected to occur in the third quarter of 2022, subject to customary conditions.
The Company has agreed to file a resale registration statement with the Securities and Exchange Commission (the “SEC”) within 5 days following the closing of the transaction to register the resale of the Stock Consideration.
The Company’s board of directors (i) determined that the Purchase Agreement and the transactions contemplated thereby are fair to, and in the best interests of, the Company and its stockholders and (ii) approved, declared advisable and adopted the Purchase Agreement.
The Purchase Agreement includes customary representations, warranties, covenants and indemnification obligations of the Company and the Seller, including with respect to the Seller’s registration rights. There are no material relationships among the Company and the Seller or any of their respective affiliates or any of the other parties to the Purchase Agreement or the related ancillary agreements, other than in respect of such agreements.
A copy of the Purchase Agreement is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. The foregoing summary of the principal terms of the Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Purchase Agreement.
The foregoing summary has been included to provide investors and security holders with information regarding the terms of the Purchase Agreement. It is not intended to provide any other factual information about the Company, the Seller or their respective subsidiaries and affiliates. The Purchase Agreement contains representations and warranties by each of the parties to the Purchase Agreement, which were made only for purposes of that agreement and as of specified dates. The representations, warranties and covenants in the Purchase Agreement were made solely for the benefit of the parties to the Purchase Agreement, are subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts, as well as by information contained in the Company’s periodic reports filed with the SEC, and may be subject to standards of materiality applicable to the contracting parties that may differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, the Seller or any of their respective subsidiaries or affiliates.
Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Item 7.01. Regulation FD Disclosure
On July 11, 2022, the Company issued a press release announcing the entry into the Purchase Agreement, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in Item 7.01 of this Form 8-K and Exhibit 99.1 attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Note Regarding Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, including without limitation, implied and express statements regarding the completion of the pending Transaction, including satisfaction or waiver of the closing conditions and the anticipated closing date; and the Company’s plans to file a registration statement to register the resale of the Stock Consideration, when issuable, pursuant to the Purchase Agreement. The words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “expect,” “estimate,” “seek,” “predict,” “future,” “project,” “potential,” “continue,” “target” and similar words or expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
Each forward-looking statement in this Current Report on Form 8-K is based on management’s current expectations and beliefs and is subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by such forward-looking statement, including, without limitation, risks associated with: the Company’s and Seller’s ability to satisfy the conditions to the closing of the Transaction on a timely basis or at all; the occurrence of events that may give rise to a right of one or both of the Company and Seller to terminate the Purchase Agreement; the Company’s inability to file a registration statement to register the resale of the Stock Consideration, when issuable; and those other risks identified under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as well as any subsequent filings the Company makes with the SEC. In addition, any forward-looking statement represents the
Company’s views only as of the date such statement is made and should not be relied upon as representing its views as of any subsequent date. Except as required by applicable law, the Company explicitly disclaims any obligation to publicly update any forward-looking statements contained herein, whether as a result of new information, future developments or otherwise. No representations or warranties, expressed or implied, are made about the accuracy of any such forward-looking statements.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
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Description |
99.1 |
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Press release issued by Markforged Holding Corporation on July 12, 2022, furnished herewith. |
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2.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
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 hereunto duly authorized.
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MARKFORGED HOLDING CORPORATION |
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Date: July 12, 2022 |
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By: |
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/s/ Stephen Karp |
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Stephen Karp |
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General Counsel and Secretary |
Exhibit 2.1
SALE AND PURCHASE AGREEMENT
dated 11 July 2022
THE SELLER
and
THE BUYER
regarding the shares in
DIGITAL METAL AB
Table of contents
1. |
DEFINITIONS, CONSTRUCTION AND INTERPRETATION |
1 |
2. |
SALE AND PURCHASE |
9 |
3. |
PURCHASE PRICE |
9 |
4. |
Conditions Precedent |
10 |
5. |
Closing |
11 |
6. |
Warranties of the Seller |
13 |
7. |
WARRANTIES OF THE BUYER |
21 |
8. |
COVENANTS |
22 |
9. |
Compensation, remedies and limitations |
27 |
10. |
Specific indemnities |
31 |
11. |
Miscellaneous |
32 |
TABLE OF SCHEDULES
Schedule 1.1DS |
Disclosure Schedule |
Schedule 1.1MA |
Material Agreements |
Schedule 1.1PLA |
Patent License Agreement |
Schedule 1.1TA |
Termination Agreement |
Schedule 1.1TSA |
Transitional Services Agreement |
Schedule 5.2(a)(ii) |
Process for delivery of Buyer Shares |
Schedule 8.7.1 |
Separation Step Plan |
Schedule 8.11 |
Terms and procedures for registration of Buyer Shares |
This SALE AND PURCHASE AGREEMENT is dated as above and made between:
The Seller and the Buyer are referred to as the “Parties”.
Background
Unless otherwise stated, capitalized terms in this Agreement shall have the meaning ascribed to them in this Clause 1.1 (Definitions).
“ABAC Laws” is defined in Clause 6.14.4.
“Accounting Principles” means the generally accepted accounting principles, rules, policies, practices, procedures, methods and estimation techniques applicable in Sweden, as further specified in the Audited Accounts.
“Accounts Date” means 31 December 2021.
“Affiliate” means, with respect to any Person, any other Person who is from time to time directly or indirectly controlling, controlled by or under common control with, such first-mentioned Person, including, in the case of individuals, such related Persons as provided for in Chapter 21, Clause 1 of the Companies Act, provided that the Company shall not be deemed to be an Affiliate of the Seller. “Control” for this purpose shall mean the ability, directly or indirectly, to direct or control the management or policies of a Person, whether through ownership, contract or otherwise.
“Agreement” means this sale and purchase agreement, including its schedules, as amended from time to time.
“Applicable Law” means, with respect to any Person, any law, regulation, judgment, legal principle or other legally binding requirement or rule of any governmental or public authority in any jurisdiction applicable from time to time to such Person.
“Assisting Party” is defined in Clause 9.8.2(a).
“Audited Accounts” means the balance sheet and profit and loss account (including notes related thereto) of the Company, as set out in the audited annual accounts of the Company as of and for the period ending on the Accounts Date.
“Business Day” means a day (other than a Saturday, Sunday or public holiday) on which commercial banks are open for general banking business in Sweden and US, other than for internet banking services only.
“Buyer” is defined in the introduction to this Agreement.
“Buyer Shares” means shares of common stock, par value USD 0.0001 per share, of the Buyer.
“CP Third Party” is defined in Clause 4.1(a).
“Cash Amount” is defined in Clause 3.2.
“Cash Pool Arrangement” means the participation by the Company in the Seller’s cash pool arrangement with Svenska Handelsbanken AB, to which the Company has acceded pursuant to the participation agreement dated 19 September 2018.
“Closing” means the completion of the Transactions by the Parties taking the actions set out in Clauses 5.2 and 5.3.
“Closing Date” means the date on which Closing takes place.
“Companies Act” means the Swedish Companies Act (Sw. Aktiebolagslagen (2005:551)).
“Company” means Digital Metal AB, Reg. No. 556603-4152, a limited liability company incorporated under the laws of Sweden.
“Conditions Precedent” is defined in Clause 4.1.
“Controlling Party” is defined in Clause 9.8.2.
“Consideration Shares” is defined in 3.2.
“Data Room” means the virtual data room provided by Datasite in respect of Project Yellow.
“Disclosed Information” means: (a) the information made available in the Data Room on the day immediately prior to the Signing Date (a storage device containing such information will be delivered separately to the Buyer prior to or on Closing); and (b) the Disclosure Schedule.
“Disclosure Schedule” means the document containing certain specific disclosures against or pursuant to the Warranties, attached hereto as Schedule 1.1DS.
“Encumbrance” means any mortgage, charge, pledge, lien, security assignment or other security interest securing any obligation of any Person or any other agreement or arrangement having a similar effect.
“Environmental Laws” means any Applicable Laws of any Governmental Authority relating to pollution or protection of the environment, natural resources, or to the extent relating to exposure to Hazardous Substances, human health or safety.
“Environmental Permits” means all permits required under any Environmental Law.
“Exchange Act” is defined in Clause 7.3.2.
“Fairly Disclosed” means a specific matter having been fairly disclosed in writing in a manner and in the relevant context and detail so that it enables a professional buyer or any of its Representatives to reasonably be in a position to identify the existence of the relevant issue without the need to draw conclusions from several unrelated documents or materials.
“Fundamental Warranties” means the Warranties set out in Clauses 6.1 (Existence, solvency, authority, due authorization, etc.), 6.2 (Ownership of the Shares) and 6.3 (Corporate).
“Governmental Authority” means any national, federal, state, provincial, county or municipal government, foreign or domestic, or any authority, agency, ministry or other similar body exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, including any court, authority or other quasi-governmental entity established to perform any of such functions.
“Hazardous Substances” means any pollutants, contaminants, wastes, or hazardous or toxic materials or substances, and any other materials or substances that would result in liability under Environmental Laws, including petroleum, petroleum products, asbestos, polychlorinated biphenyls, per- and polyfluoroalkyl substances and 1,4-dioxane.
“Intellectual Property Rights” means all intellectual property including patents, copyrights (including in Software and neighbouring rights), rights in databases, registered trademarks, registered company names, domain names, registered designs, know-how, trade secrets and any applications for any of the foregoing rights.
“Key Employees” means Christian Lönne, Fredrik Berg Lissel, Alexander Sakratidis, Hans Kimblad, Mats Persson, Mats Nilsson and Niclas Malm.
“Leakage” means, in each case in respect of, or attributable to, the period from the Accounts Date to Closing: (a) any transfer of value (Sw. värdeöverföring) as defined in Chapter 17, Clause 1 of the Companies Act from the Company; (b) any professional fees, expenses and other costs paid or incurred to any advisor by the Company in connection with the Transactions (including the Separation (to the extent such cost or expenses shall not be borne by the Buyer in accordance with the Agreement) but excluding any value added tax or similar Taxes in respect thereof actually recoverable by the Company or the Buyer); (c) any Transaction related bonuses or Transaction related retention fees incurred or paid by the Company (excluding any retention fees or similar which is put in place on the Buyer’s initiative); (d) any transaction, service, management, advisory, monitoring, consulting, director or other similar fees, charges or compensation paid by the Company to (or for the benefit of) the Seller or any Affiliate of the Seller (other than in the Ordinary Course consistent with past practice); or (e) any agreement or arrangement by the Company to do any of the matters referred to in items (a)-(d) above (regardless if such obligation is due prior to or following Closing); but shall in each case exclude any Permitted Leakage.
“Lease Agreements” is defined in Clause 6.13.2.
“Leased Real Property” means the real property leased by the Company.
“Licensed IP” means material Intellectual Property Rights to which the Company is a licensor or a licensee.
“Long Stop Date” is defined in Clause 4.2.
“Loss” means, without duplication: (a) any direct loss of the Buyer; and (b) any direct or indirect loss of the Company, if and to the extent such indirect loss is reasonably foreseeable.
“Material Adverse Effect” means, in each case as a direct or indirect result of Russia having declared war against, invaded with military forces or otherwise unequivocally and intentionally initiated an armed conflict against Sweden, any development, circumstance, condition, state of facts, event, effect or change that, individually or in the aggregate, has, or is reasonably expected to have, a material adverse effect on (a) the business, results of operations or financial condition of the Company or (b) Seller’s ability to timely perform its obligations under this Agreement.
“Material Agreement” means each agreement set out in Schedule 1.1MA.
“OFAC” is defined in Clause 6.14.5.
“Open Source License” means any license meeting the open source definition as promulgated by the Open Source Initiative or the free software definition (as promulgated by the Free Software Foundation), or any substantially similar license, including but not limited to any license approved by the Open Source Initiative, or any Creative Commons License. For the avoidance of doubt, including without limitation, copyleft licenses.
“Ordinary Course” means the ordinary course of business consistent with past practice.
“Parties” is defined in the introduction to this Agreement.
“Patent License Agreement” means the patent license agreement, substantially in the form set out in Schedule 1.1PLA, to be entered into between the Seller and the Company at Closing.
“Permitted Leakage” means: (a) any transactions in the Ordinary Course pursuant to existing intra-group relationships between the Company and the Seller or its Affiliates if and to the extent included in the Disclosed Information; (b) any payment made or liability, cost or expense incurred by the Company after the date hereof in connection with any matter undertaken at the written request, or with the prior written consent, of the Buyer; and (c) any transactions contemplated by this Agreement.
“Person” means any individual, firm, company, corporation, partnership or other entity having legal personality or any government, state or agency of a state, local or municipal authority or other governmental body; including in each case the successors of each such person.
“Purchase Price” is defined in Clause 3.1.
“Qualifying Loss” is defined in Clause 9.6.1(a).
“Registered IP” means the registered Intellectual Property Rights owned by the Company.
“Related-Party Agreement” means any agreement, transaction or arrangement (whether oral or in writing) between the Company on the one hand and the Seller or an Affiliate of the Seller on the other hand including any consultancy agreement, service agreement, sale, lease, transfer or other disposition of any property or assets, or any loan, advance or guarantee to, with or for any of their benefit.
“Related Party Claims” is defined in Clause 6.4.3.
“Representatives” means, with respect to any Person, from time to time, any of such Person’s directors, employees, agents, attorneys, accountants, advisors and any other representatives.
“Resigning Directors” means Fredrik Emilson and Magnus Eriksson.
“Restricted Business” means production, sale and services of 3D metal printers and ancillary equipment as well as sales of non-integrated 3D printed components, in each case as carried out by the Company as per Signing and Closing. Notwithstanding the foregoing, Restricted Business excludes (i) production, design and sales of other products in which 3D printed components (produced by the Seller or any of its Affiliates or a third party) have been integrated, and (ii) production, design and sale of 3D printed components (samples and pilot series) as part of research and development of (A) materials or (B) the products referred to in item (i) (in which the samples or pilot series of 3D printed components are intended to be integrated).
“Sanctioned Person” is defined in Clause 6.14.5.
“SEC” is defined in Clause 7.3.2.
“SEC Reports” is defined in Clause 7.3.2.
“Securities Act” is defined in Clause 7.3.4.
“SEK” means Swedish Kronor.
“Seller” is defined in the introduction to this Agreement.
“Seller Guarantee” means any parent company guarantee from the Seller in favour of Flextronics Industrial Ltd in relation to the agreements (the design services agreement and the manufacturing services agreement) with Data Room reference 5.51.1.
“Seller IP” means the name Höganäs or any derivative thereof or any combination of words, trademarks, trade names or company names to the extent it includes the said name or any word confusingly similar therewith.
“Seller’s Bank Account” means the bank account notified by the Seller to the Buyer no later than five (5) Business Days prior to the Closing Date.
“Seller’s Knowledge” means the actual personal knowledge of each of Magnus Eriksson, Fredrik Emilson, Amanda Sandström, Maryna Blurock and Fredrik Heidenholm and the actual knowledge that each of them has after having made due enquiry with each of the Key Employees, in each case as of the Business Day immediately prior to the Signing Date.
“Separation” is defined in Clause 8.7.1.
“Separation Activity” is defined in Clause 8.7.1.
“Separation CP” is defined in Clause 4.1(b).
“Separation Committee” is defined in Clause 8.7.6.
“Separation Step Plan” is defined in Clause 8.7.1.
“Shares” means all issued and outstanding shares in the Company, representing a share capital of SEK 122,889.6 divided into 1,228,896 shares.
“Signing” means the point in time when this Agreement was duly executed by or on behalf of the Seller and the Buyer.
“Signing Date” means the date set out on the front page of this Agreement.
“Software” means, in any form or format and however fixed, any and all computer programs and other software, including applications, operating systems, libraries, subroutines, assemblers, compilers, and any and all software implementations of algorithms, models and methodologies, whether in source code or object code.
“Stock Exchange” means any regulated market, multilateral trading facility or similar market place for the public trading of shares, debt instruments or other securities.
“Surviving Provisions” means the provisions of Clauses 9 (Compensation, remedies and limitations) and 11 (Miscellaneous).
“Systems” means all computer hardware, networks and systems owned, held or used by the Company, including internal systems and outsourced systems.
“Tax” means all taxes, charges, fees, withholdings, duties, customs and other assessments imposed by a Governmental Authority relating to taxes (including preliminary and deferred taxes), together with any interest, penalties, surcharges or other additions to such taxes.
“Termination Agreement” means the termination agreement, substantially in the form set out in Schedule 1.1TA, to be entered into between the Seller and Höganäs Japan KK on the Closing Date.
“Third Party Approval” is defined in Clause 4.1(a).
“Third Party Claim” means any claim, action, demand or similar by any Person (other than the Company, the Seller or any of its Affiliates) which may give rise to liability for the Seller under this Agreement.
“Transaction Bonuses” means the transaction bonuses payable by the Seller to certain Key Employees in accordance with the Data Room (index 5.46).
“Transaction Documents” means this Agreement, and any other agreement or document entered into or to be entered into in accordance with this Agreement.
“Transactions” means the transactions contemplated by this Agreement.
“Transfer Restrictions” means any option, warrant, right of redemption, right of pre-emption, right of first refusal or similar right.
“Transitional Services Agreement” means the transitional services agreement, substantially in the form set out in Schedule 1.1TSA, to be entered into between the Seller or any of its Affiliates and the Company on the Closing Date.
”USD” means United States dollar.
“Warranties” means the warranties set out in Clause 6.
In this Agreement:
On the terms of this Agreement and subject to the conditions, the Seller sells the Shares to the Buyer free from any Encumbrances, and the Buyer buys the Shares from the Seller, together with all accrued benefits and rights attached to the Shares. The Seller hereby waives any Transfer Restrictions with respect to the Shares or the Transactions.
and if any of the conditions set out in items (a)-(d) above is not satisfied or waived by the Seller at the Closing Date, the Seller shall be entitled to require that all or parts of the Consideration Shares Amount is instead settled by the Buyer in cash in accordance with Clause 5.2(a)(i) (as applicable) applied mutatis mutandis.
Subject to the limitations set out herein, the Seller hereby warrants to the Buyer, as of Signing, and, unless otherwise stated, as of Closing as follows.
In the period from the Accounts Date to the Signing Date, the Company has carried on its business in the Ordinary Course and the Company has not:
The Company is not involved in any pending material claim, suit, administrative proceeding, arbitral or other legal proceeding, and no such material claim, suit, administrative proceeding, arbitral or other legal proceeding is threatened by, or to the Seller’s Knowledge, against the Company. To the Seller’s Knowledge, there are no circumstances reasonably likely to give rise to such material claim or any action, suit, administrative proceeding, arbitral or other legal proceeding or other action against the Company.
The Company is, and has been in material compliance with all applicable Environmental Laws and have obtained and are in material compliance with all Environmental Permits. As per Signing, the Company has not been made aware of any actions or written claims or notices alleging violation of or liability pursuant to any Environmental Law pending or
threatened against the Company. Hazardous Substances have not been disposed of, arranged to be disposed of, or released by the Company at any location, in a manner or condition that would reasonably be expected to result in liability under or relating to Environmental Laws.
The Buyer hereby warrants to the Seller, as of Signing and as of Closing as follows.
The Buyer has secured sufficient and unconditional financing or has available internal funds to enable it to consummate the Transactions and to make any payments that the Buyer is or may become required to make hereunder.
The Transactions do not include any right for the Buyer, its Affiliates or, following Closing, the Company to use the Seller IP.
The Buyer shall use its reasonable best efforts to ensure, as soon as reasonably practicable, that in regard to the Seller Guarantee if not released at Closing in accordance Clause 5.2(b), given by the Seller or any of its Affiliates in respect of any obligations of the Company, the Seller is released in full from such Seller Guarantee. Pending release of the Seller Guarantee, the Buyer shall indemnify the Seller against any and all costs or liabilities
arising after Closing under such Seller Guarantee. Upon the end of the initial contractual term of each relevant contract the Buyer undertakes to, terminate the agreement pursuant to which a Seller Guarantee apply provided that the Seller Guarantee has not been released prior to such date.
The Seller shall use its best efforts to, at any given time after Closing, be eligible under Applicable Law for receipt of the Consideration Shares delivered pursuant to this Agreement and procure that the securities account notified to the Seller accepts and permits receipt of the Consideration Shares without any delay.
The Seller shall, with reasonable assistance from the Buyer, use commercially reasonable efforts to procure that the Company before Closing obtains consents to the Transactions from the following parties: (i) Guangzhou Xinyuan Metal Technology Co. Ltd regarding the agreement with Data Room reference 1.6.4.3.1, and (ii) a Mitsubishi Heavy Industries Machine Tool Co., Ltd regarding the agreement with Data Room reference 1.6.4.8.1.
General
Migration of data
Separation Committee
Subject to Clause 11.7, the Buyer undertakes that it will not, and will procure that its Affiliates and Representatives will not, prior to Closing contact the Company’s customers, suppliers, employees or the like without the prior written consent of the Seller, except for in the Ordinary Course of the Buyer’s business and then only when such contacts do not relate to the Transactions.
The Buyer shall on the first (and second, if applicable) annual general meeting of shareholders in the Company following the Closing Date discharge or procure the discharge of all Resigning Directors and all other directors and deputy directors of the board of directors of the Company from liability for the period up to and including Closing, provided that the auditor of the Company does not recommend otherwise. The Buyer undertakes not to make, and undertakes to procure that the Company does not make, any claim (other than for fraud) against any such directors or deputy directors for their acts or omissions in such capacity. The obligations of the Buyer pursuant to this Clause 8.9 (Replacement and discharge of director liability) are intended to also be for the benefit of the Resigning Directors and all such other directors and deputy directors, and each of them shall have the right to enforce these obligations against the Buyer.
Following Closing, upon reasonable notice and subject to the execution of a confidentiality undertaking in a form reasonably acceptable to the Buyer, the Buyer shall (with respect to any external costs, at the cost of the Seller) furnish, or cause to be furnished, to the Seller and its Affiliates and Representatives, access to such information, personnel and assistance relating to the Company as may be reasonably necessary for the Seller’s and its Affiliates’ financial reporting and accounting matters and any Tax matter, or the defence or prosecution of, or response required under or pursuant to, any lawsuit, action or proceeding, other than a claim by the Buyer under this Agreement.
No later than five (5) Business Days following Closing, the Buyer shall prepare and file with the SEC a registration statement covering the resale of all of the Consideration Shares, in accordance with the terms and procedures set forth in Schedule 8.11.
Each Party shall, and shall procure that its relevant Affiliates shall, prior to, at and after Closing, execute and deliver such certificates, agreements and other documents and writings and take such other actions, in each case if and to the extent consistent with the Transaction Documents and Applicable Law, as may be reasonably necessary in order to consummate or implement the Transactions.
The Seller shall procure that the Cash Pool Arrangement will be fully settled on the Closing Date, in accordance with what is set out in Clause 5.3(f). When settling the Cash Pool Arrangement a new stand-alone cash account of the Company will be opened in Svenska Handelsbanken. The Seller shall procure that as at Closing the balance in such account shall be (a) if Closing happens on or before 30 September 2022, an amount
corresponding to any cash actually received by the Company (net of any VAT) in the period between Signing and Closing, and (b) if Closing happens after 30 September 2022, an amount corresponding to any cash actually received by the Company (net of any VAT) in the period between Signing and 30 September 2022.
The Warranties and the undertakings included in this Agreement are the only warranties and undertakings given or made by the Seller and the Buyer expressly acknowledges and agrees that it may not rely on any other information provided, statement or warranty (express or implied).
If to the Seller: |
Höganäs Aktiebolag Attention: Magnus Eriksson 263 83 Höganäs, Sweden E-mail: Magnus.Eriksson@hoganas.com
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With a copy (not serving as a notice) to: |
Mannheimer Swartling Advokatbyrå AB Attention: Tom Wehtje Box 1711, SE-111 87 Stockholm, Sweden E-mail: tom.wehtje@msa.se
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If to the Buyer: |
Markforged Holding Corporation Attention: Mark Schwartz, Assaf Zipori and Stephen Karp 480 Pleasant Street, Watertown, MA 02472 E-mail: stephen.karp@markforged.com; assaf@markforged.com; mark.schwartz@markforged.com
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With a copy (not serving as a notice) to: |
Gernandt & Danielsson Advokatbyrå KB Attention: Corinne Ekman and Pär Johansson Hamngatan 2, SE-111 47 Stockholm E-mail: corinne.ekman@gda.se and par.johansson@gda.se
Goodwin Procter LLP Attention: Ken Gordon 100 Northern Avenue Boston, MA 02210 E-mail: KGordon@goodwinlaw.com |
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In the event this Agreement is terminated pursuant to Clauses 4.2 or 5.6, the Parties shall have no further obligations against each other under this Agreement, except with respect to breaches of this Agreement committed prior to termination or pursuant to the Surviving Provisions (which shall survive any termination of this Agreement).
No Party may assign or otherwise transfer (including by way of a merger or otherwise by operation of law), pledge or grant any other security interest in, or over, any of its rights or obligations under this Agreement without the prior written consent of the other Party.
Subject to Applicable Law, during the period between the conditions set out in Clause 4.1(a) and 4.1(b) being fulfilled and the Closing Date, the Seller shall furnish, or cause to be furnished, to the Buyer, its Affiliates and Representatives access to the Company’s employees and to such information as may be reasonably necessary for the Buyer and its Affiliates’ preparation for Closing and the Separation.
Each Party will each bear its own fees and expenses, including legal fees and expenses, incurred in connection with the negotiations, preparation and execution of the Transactions or matters ancillary thereto and the Company shall not pay or bear any such fees or expenses.
The Transaction Documents set out the entire understanding of the Parties with respect to the Transactions. This Agreement supersedes and cancels all agreements (whether written or oral) prior to the Signing Date between the Parties regarding the Transactions.
The Swedish Sale of Goods Act (Sw. Köplagen (1990:931)) shall not apply to this Agreement or the Transactions.
This Agreement may be executed by hand or by electronic signature and in any number of counterparts, and by the Parties on separate counterparts, but shall not be effective until delivery to the Parties of all counterparts (in original or by a scanned copy delivered by email).
This Agreement shall be governed by and construed in accordance with the laws of Sweden, without any reference to its conflict of law principles.
IN WITNESS WHEREOF, this Agreement is executed by or on behalf of:
the SELLER
/s/ Fredrik Emilson
Name: Fredrik Emilson
Title: Group President & CEO
/s/ Magnus Eriksson
Name: Magnus Eriksson
Title: CFO & SVP Group Finance, IT
IN WITNESS WHEREOF, this Agreement is executed by or on behalf of:
the BUYER
/s/ Shai Terem
Name: Shai Terem
Title: President & CEO
Schedule 5.2(a)(ii) - Process for delivery of Buyer Shares
At Closing, the Buyer shall deliver to the Seller a copy of the irrevocable written instructions (the “Instructions”) delivered by the Buyer to the Buyer’s transfer agent and registrar for its common stock (the “Transfer Agent”), which the Instructions shall instruct and cause the Transfer Agent to issue the Consideration Shares to the Seller as of the Closing Date to be held in Direct Registration System (DRS) book-entry form by the Transfer Agent and registered in the name of the Seller. Not less than one Business Day following the Closing, the Buyer shall cause its Transfer Agent to deliver book entry statements to the Seller evidencing the Buyer Shares.
Except as otherwise set forth below, the Buyer Shares issued to the Seller shall contain the following restrictive legend (the “Legend”):
THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The Buyer Shares issued to the Seller shall not contain any legend (including the Legend), (i) while a registration statement covering the resale of such shares is effective under the Securities Act of 1933, as amended (the “Securities Act”), (ii) following any sale of such shares pursuant to Rule 144 under the Securities Act, (iii) if such shares are eligible for sale under Rule 144 under the Securities Act or (iv) if such Legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC). Upon the Seller’s written request, the Buyer shall cause its counsel to issue a legal opinion to the Transfer Agent if required by the Transfer Agent to effect the removal of the Legend hereunder, or if requested by the Seller, respectively.
Schedule 8.11 - Terms and procedures for registration of Buyer Shares
Representations and Warranties. The Seller represents that it is an accredited investor, as defined in the Securities Act of 1933, as amended (the “Act”). The Seller acknowledges that it has had access to and the opportunity to review financial and business information concerning the Buyer, as necessary or desired to make a deliberate and informed decision as to whether to acquire the Consideration Shares on the terms provided in this Agreement. The Seller has such knowledge and experience in financial or business matters and with respect to the Buyer’s business, financial condition, operating results and prospects that the Seller is capable of evaluating the merits and risks of the sale contemplated by this Agreement. The Seller understands that although the Consideration Shares are to be registered under the Act pursuant to the next following paragraph they have not yet been so registered, that the Consideration Shares are subject to the U.S. securities laws and applicable regulations and that the Consideration Shares may be resold without registration under the Act only in certain limited circumstances.
Registration. No later than five Business Days following Closing, the Buyer shall prepare and file with the SEC a registration statement covering the resale of all of the Consideration Shares, for an offering to be made on a continuous basis pursuant to Rule 415 promulgated by the SEC pursuant to the Securities Act (the “Registration Statement”). The Registration Statement filed hereunder shall be on Form S-3 (except if the Buyer is not then eligible to register for resale the securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith). The Buyer shall use its commercially reasonable efforts to cause the Registration Statement filed to be declared effective under the Securities Act as promptly as possible after the filing thereof and shall use its commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act (i) until the date that all the Buyer Shares issued to the Seller and covered by the Registration Statement have been sold, thereunder or pursuant to Rule 144 under the Securities Act, or (ii) the later of (A) the date on which Buyer’s counsel issues a legal opinion to the Transfer Agent to effect the removal of the Legend (as defined in Schedule 5.2(a)(ii) hereto) (the “Legend Removal Date”), and (B) one year from the date of effectiveness of the Registration Statement (the “Effectiveness Period”). It shall be a condition precedent to the obligations of Buyer to take any action with respect to the registration of the Buyer Shares that the Seller shall furnish to Buyer such information regarding itself, the Buyer Shares, and the intended method of disposition of such securities as is reasonably requested by Buyer to effect the registration of such Buyers Shares. The Buyer shall, by 9:30 a.m. (New York City time) on the trading day after the effective date of the Registration Statement, file a final prospectus with the SEC as required by Rule 424 promulgated by the SEC pursuant to the Securities Act.
Registration Procedures. In connection with the registration obligations hereunder, the Buyer shall:
Partial Liquidated Damages.
Indemnification by the Buyer with respect to Registration Statements
Indemnification by the Buyer. The Buyer shall, notwithstanding any termination of this Agreement, indemnify and hold harmless the Seller and its officers, directors, members, partners, and agents, each Person who controls the Seller (within the meaning of the Securities Act) and the officers, directors, members, stockholders, partners, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in the Registration Statement, including any prospectus or any form of prospectus or in any amendment or supplement thereto, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Buyer of the Securities Act, the Exchange Act, or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under the Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding the Seller furnished in writing to the Buyer by the Seller expressly for use therein, or to the extent that such information relates to the Seller or the Seller’s proposed method of distribution of securities and was reviewed and expressly approved in writing by the Seller expressly for use in the Registration Statement, such prospectus or in any amendment or supplement thereto or (ii) the use by the Seller of an outdated, defective or otherwise unavailable prospectus after the Buyer has notified the Seller in writing that the prospectus is outdated, defective or otherwise unavailable for use by the Seller. The Buyer shall notify the Seller promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated by this Agreement.
Indemnification by the Seller with respect to the Registration Statement
Indemnification by the Seller. The Seller shall, notwithstanding any termination of this Agreement, indemnify and hold harmless the Buyer and its officers, directors, members, partners, and agents, each Person who controls the Buyer (within the meaning of the Securities Act) and the officers, directors, members, stockholders, partners, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all Losses resulting from any untrue statement of a material fact or any omission of a material fact required to be stated in the Registration Statement, including any prospectus or any form of prospectus or in any amendment or supplement thereto, or necessary to make the statements therein not misleading, to the extent that such untrue statement or omission is contained in any information furnished in writing by or on behalf of the Seller to Buyer specifically for inclusion in such Registration Statement or prospectus or amendment or supplement thereto.
Exhibit 99.1
Markforged to Expand into Mass Production of End-Use Metal Parts Through Digital Metal Acquisition
Markforged software capabilities and global coverage to accelerate adoption of Digital Metal’s reliable, production-grade binder jetting solution
WATERTOWN, Mass. – July 12, 2022 – Markforged (NYSE: MKFG), creator of the integrated metal and carbon fiber additive manufacturing platform, The Digital Forge, today announced that it has entered into a definitive agreement with Höganäs AB to acquire Digital Metal, the creator of a leading binder jetting solution known to be precise and reliable, extending Markforged’s capabilities into high-throughput production of metal additive parts.
The addition of Digital Metal furthers Markforged’s strategy to solve manufacturing challenges for industrial customers at the point of need. With this new offering, manufacturers have the opportunity to produce high volumes of functional metal parts with minimal setup required. Traditional production often requires months to move from design to manufacturing, introduces third party supplier risk, and provides poor unit economics during ramp up and in lower volumes.
Markforged sees powder binder jetting as a highly scalable additive manufacturing technology for production grade parts using a variety of metal materials. Digital Metal’s solution is designed to provide high-precision, best-in-class part quality and reliability. Powder binder jetting complements the existing Digital Forge offering, and will expand Markforged’s addressable market by solving new customer problems.
“With the Digital Metal acquisition, Markforged is advancing our vision for distributed manufacturing by enabling the reliable, high volume production of precise metal parts at the point of need. Infusing Digital Metal’s solution into The Digital Forge platform allows us to address new applications in the medical, automotive, luxury goods and other industries,” said Shai Terem, president and CEO of Markforged. “The Digital Metal team has created a robust and scalable solution that complements our existing technologies. I look forward to welcoming their talented people to Markforged.”
Founded in 2003, Digital Metal is a wholly-owned subsidiary of Höganäs AB and the creator of a proprietary binder jetting AM technology. Known for high productivity, excellent surface quality and superior resolution, Digital Metal printers have been used to produce hundreds of thousands of parts, including parts for leaders in consumer products, academia, and the automotive industry. Markforged sees significant opportunities to further accelerate Digital Metal adoption through integrated software capabilities and a global go-to-market engine.
“Markforged’s easy-to-use platform, best-in-class software capabilities and material expertise felt like a natural fit for the future of our technology,” said Christian Lönne, CEO of Digital Metal. “With Markforged’s experience and go-to-market scale, we are confident that we will be able to grow our technology together and help more manufacturers produce the high-volume metal parts they need to drive highly productive and cost efficient operations.”
As part of the transaction, Markforged will pay Höganäs approximately $32 million in cash, approximately 4.1 million shares of Markforged common stock and approximately $1.5 million in cash to settle certain intercompany balances, subject to certain adjustments. The acquisition of Digital Metal is expected to close during the third quarter of 2022, subject to customary conditions.
About Digital Metal
Digital Metal’s proprietary binder jetting technology enables the production of highly complex objects with superior surface finish and repeatable accuracy, which is not possible with competing technologies. In addition to developing, manufacturing and selling printers, Digital Metal also offers small-volume or mass-production printing services. Many of the world’s leading aerospace, automotive, industrial, MedTech, energy, luxury and academic companies are numbered among its customers.
Digital Metal® was founded in 2003, and is headquartered in Southern Sweden. The company is part of the Höganäs Group (founded in 1797), a leading metal powder producer. Read more at www.digitalmetal.tech or www.linkedin.com/company/digital-metal.
About Markforged
Markforged (NYSE: MKFG) is reimagining how humans build everything by leading a technology-driven transformation of manufacturing with solutions for enterprises and societies throughout the world. The Markforged Digital Forge brings the power and speed of agile software development to industrial manufacturing, combining hardware, software, and materials to solve supply chain problems right at the point-of-need. Engineers, designers, and manufacturing professionals all over the world rely on Markforged metal and composite printers for tooling, fixtures, functional prototyping, and high-value end-use production. Markforged is headquartered in Watertown, Mass., where it designs its products with over 400 employees worldwide. To learn more, visit www.markforged.com.
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although Markforged believes that it has a reasonable basis for each forward-looking statement contained in this press release, Markforged cautions you that these statements are based on a combination of facts and factors currently known by it and its projections of the future, about which it cannot be certain. Forward-looking statements in this press release include, but are not limited to, the anticipated synergies of the combined companies, the timing for closing of the proposed transaction, the successful and/or timely integration of the Digital Metal business with Markforged’s products and the potential benefits customers may realize from such integration and the future product and strategy plans of Markforged and Digital Metal. Markforged cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward looking statements are subject to a number of risks and uncertainties, including, among others, including, without limitation, risks associated with: Markforged’s and Höganäs’ ability to satisfy the conditions to the closing of the transaction on a timely basis or at all; the occurrence of events that may give rise to a right of one or both of the Markforged and Höganäs’ to terminate the purchase agreement; Markforged’s inability to file a registration statement to register the resale of the stock consideration, when issuable; the possibility that the anticipated synergies of this transaction may not be achieved in a timely manner or at all; general economic, the impact of COVID-19 on countries or regions in which we have operations or do business; political and business conditions and those other risks identified under the heading “Risk Factors” in Markforged’s most recent periodic and other filings with the SEC, as well as any subsequent filings Markforged makes with the SEC. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that Markforged will achieve its objectives and plans in any specified time frame, or at all. The forward-looking statements in this press release represent Markforged’s views as of the date of this press release. Markforged anticipates that subsequent events and developments will cause its views to change. However, while Markforged may elect to update these forward-looking statements at some point in the future, Markforged has no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing Markforged’s views as of any date subsequent to the date of this press release.
Media
Paulina Bucko, Head of Communications
press@markforged.com
Investors
Austin Bohlig, Director of Investor Relations
investors@markforged.com