AMENDMENT NO. 1 TO
MERGER AGREEMENT
This Amendment No. 1 to Merger Agreement (this "Amendment") is made as of
January 30, 1996, among RADIUS INC., a California corporation (the "Seller"),
SPLASH TECHNOLOGY, INC., a Delaware corporation (the "Company"), SPLASH
TECHNOLOGY HOLDINGS, INC., a Delaware corporation ("Holdco"), SPLASH MERGER
COMPANY, INC., a Delaware corporation, ("Holdco Sub"), the entities listed as
Old Investors on the signature page(s) hereof (the "Old Investors") and the
entities listed as New Investors on the signature page(s) hereof (the "New
Investors").
WHEREAS, the Seller, the Company, Holdco, Holdco Sub, and the Old Investors
are parties to that certain Merger Agreement dated December 21, 1995 (the
"Merger Agreement").
WHEREAS, the parties to the Merger Agreement wish to amend the terms
thereof as provided in this Amendment.
WHEREAS, the parties hereto also wish to waive certain requirements under
the Merger Agreement as set forth below.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein, and subject to the terms and conditions hereinafter set forth, the
parties hereby agree as follows:
1. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed thereto in the Merger Agreement.
2. The entities listed as New Investors on the signature page(s) hereto
shall be, in addition to the Old Investors, Investors, as that term is defined
in the Merger Agreement. The New Investors, along with the Old Investors, shall
have all of the rights and obligations of the Investors under the Merger
Agreement, except that the notices to each New Investor shall be delivered to
the address set forth beneath its respective signature on the signature page(s)
hereof rather than to the address specified for the Investors in Section 12.4 of
the Merger Agreement, if an address appears directly beneath such signature.
3. The Exhibits to the Merger Agreements shall be deemed modified as
follows:
EXHIBIT NAME EXHIBIT NUMBER MODIFICATION(S)
------------ -------------- ---------------
CSG Assets 1.1A addition of the items listed in
Exhibit 1 hereto
Company 1.1B Change: size of the board of
Cert. Incorp. directors from five to six
Company 1.1C Change: size of the board of
By-Laws directors from five to six
1
EXHIBIT NAME EXHIBIT NUMBER MODIFICATION(S)
------------ -------------- ---------------
Holdco Cert. 2.1A Change: size of the board of directors
of Incorp. from being fixed at five members to
being set in the bylaws at a size
between three and thirteen members
Holdco 2.1B Changes: (i) size of board of directors
By-Laws from five to six and (ii) allow
stockholders holding at least 10% of
the voting shares to call a special
stockholders meeting
Registration 4.4B Changes:(i) alter recitals to indicate
Rights that the Series B shares may be issued
Agreement after the Closing as set forth in
Section 6.6 of the Merger Agreement
and (ii) add Imperial Bank as a
beneficiary with respect to piggy back
registration rights
Stockholders 4.4C Change: size of board of directors from
Agreement five to six, with the Investors to
designate the added director
4. The recital C on the first page of the Merger Agreement shall be
modified to read in full as follows:
"C. Immediately following the transfer of the assets and certain
liabilities of CSG to the Company described above, Holdco Sub shall merge
into and with the Company, with the Company surviving, and the Seller shall
receive from Holdco $21,945,175 in cash. Prior to such Merger, the
management of the Company shall have purchased from Holdco certain shares
of Holdco Common Stock pursuant to Restricted Stock Purchase Agreement(s).
In consideration for its promises and covenants herein, after the
satisfaction of certain conditions set forth in Section 6.6 below, Holdco
shall issue to the Seller shares of Series B Redeemable and Convertible
Preferred Stock, par value $0.001, of Holdco ("Series B Preferred Stock")
convertible into approximately 19.9% of Holdco Common Stock (post-closing,
assuming the conversion into Holdco Common Stock of the shares of Series B
Preferred Stock issued to the Seller and without considering dilution by
management options). After the issuance of such shares of Series B
Preferred Stock to the Seller, the shares of Holdco Common Stock purchased
by the management of the Company prior to the Merger shall constitute
approximately 6.1% of Holdco Common Stock (post-closing, assuming the
conversion into Holdco Common Stock of the shares of Series B Preferred
Stock issued to the Seller and without considering dilution by management
options) and the shares of Holdco Common Stock purchased by the Investors
prior to the Merger shall constitute approximately 74% of Holdco Common
Stock (post-closing, assuming the conversion into Holdco Common Stock of
the shares of Series B Preferred Stock issued to the Seller and without
considering dilution by management options)."
2
5. Section 1.3 of the Merger Agreement shall be modified to read in full
as follows:
"1.3 CONVERSION OF SHARES. As of the Effective Time, by virtue of the
Merger and without any action on the part of the Seller as the sole
stockholder of the Company or Holdco as the sole stockholder of Holdco Sub:
(a) Each share of common stock, par value of $0.001, of the
Company (the "Company Common Stock") outstanding immediately prior to
the Effective Time shall be converted into the right to receive
$21,945.175, payable by wire transfer of federal clearing house funds.
(b) Each share of the common stock, par value $0.001, of Holdco
Sub (the "Holdco Sub Common Stock") outstanding immediately prior to
the Effective Time shall be converted into one share of Company Common
Stock."
6. Section 1.4 of the Merger Agreement is hereby amended by deleting the
clause (c) thereof in its entirety and by deleting the "(d)" in the tenth line
thereof and inserting "(c)" therefor.
7. The third sentence of Section 2.1(c) of the Merger Agreement is hereby
modified to read in full as follows:
"Immediately prior to the Effective Time, there will be no options,
warrants or rights to purchase shares of capital stock or other securities
of Holdco authorized, issued or outstanding other than as provided for in
Section 6.6 hereof, nor will Holdco be obligated in any other manner to
issue shares of its capital stock or other securities other than as
provided for in Section 6.6 hereof."
8. The sixth sentence of Section 2.1(c) of the Merger Agreement is hereby
modified to read in full as follows:
"Immediately after the issuance of the 4,282 shares of Series B
Preferred Stock to be issued to the Seller after the Effective Time subject
to the terms and conditions of Section 6.6, such shares shall be
convertible into 497,465 shares of Holdco Common Stock (approximately 19.9%
of the issued and outstanding Holdco Common Stock after such conversion,
not accounting for any other conversion or exercise of any options,
warrants, convertible securities or other rights to purchase Holdco Common
Stock and not accounting for any other securities issued by Holdco after
the date of the Effective Time), which shares shall have been reserved for
issuance pursuant to the terms of the Certificate of Incorporation of
Holdco."
9. Section 4.7 of the Merger Agreement is hereby amended by inserting the
words "other than the shares of Series B Preferred Stock" immediately after the
word "Securities," and immediately prior to the comma preceding the words "to
effect the Merger" contained in the fourth line thereof.
10. Section 5.5 of the Merger Agreement is hereby amended by inserting the
words "other than the shares of Series B Preferred Stock" immediately after the
word "Securities," and immediately prior to the words "and to carry out the
transactions" contained in the fifth line thereof.
11. Section 5.6 of the Merger Agreement shall be modified to read in full
as follows:
3
"5.6 BOARD OF DIRECTORS. The number of members of the board of
directors of Holdco Sub shall have been fixed at no less than five and no
more than six and no less than five members shall have been appointed as
follows: (i) Mr. Charles Berger; (ii) three designees of the Investors (one
such designee as a Series A Director, as defined in the Certificate of
Incorporation of Holdco); and (iii) Kevin Macgillivray (as the initial
designee of the management of the Company)."
12. The first sentence of Section 6.1(i) of the Merger Agreement is hereby
modified to read in full as follows: "The board of directors of Holdco
initially shall consist of six (6) directors."
13. Article VI of the Merger Agreement shall be modified by the addition
of the following Section 6.6 at the end of such Article:
"6.6 ISSUANCE OF SERIES B PREFERRED STOCK. After the later to occur
of (but in no event later than March 31, 1996) (a) the Effective Time and
(b) the issuance of a permit to Holdco by the California Department of
Corporations that qualifies the issuance of 4,282 shares of Series B
Preferred Stock to the Seller under Sections 25120 and 25121 of the
California Securities Law, in consideration for the promises and covenants
of the Seller contained herein, the Holdco shall issue to the Seller 4,282
shares of Series B Preferred Stock."
14. Holdco, Holdco Sub, the Old Investors and the New Investors hereby
waive the requirement that the third party consents with respect to the
transactions contemplated by the Merger Agreement described in items 2, 6 and 10
of Exhibit 4.7 to the Merger Agreement (the "Certain Third Party Consents") be
received prior to the Closing. The Seller agrees to take all reasonable efforts
to obtain the Certain Third Party Consents as soon as practicable after the
Closing (as defined in the Merger Agreement). Any failure by the Seller to
obtain the Certain Third Party Consents shall be considered a breach of a
covenant of the Merger Agreement for the purposes of Article 10 of the Merger
Agreement and the last sentence of Article 9 of the Merger Agreement.
15. Section 4.12 of the Merger Agreement shall be modified to read in full
as follows:
"4.12. ELECTION UNDER SECTION 338(H)(10). The Seller shall have
executed the Form 8023A to be prepared in accordance with Section 6.5(d)
hereof."
16. Section 6.5(c) of the Merger Agreement shall be amended by the
addition of the following sentence as the last sentence thereof:
"Upon the completion of the Audited Financial Statements, the Chief
Financial Officer of the Seller shall deliver to the Investors' Accountants
a representation to the effect that the Seller has provided to the
Investors' Accountants all books and records of the Business, CSG and the
Company with respect to the period extending from October 1, 1992 to the
date of the Closing, and that the Seller has disclosed, to the best
knowledge of the Seller, all financial transactions and all contingent
liabilities required to be reported or reserved for in accordance with
GAAP, existing or occurring during the period extending from October 1,
1992 to the date of the Closing, of the Business, CSG and the Company to
the Investors' Accountants"
4
17. The first sentence of Section 9.1 of the Merger Agreement is hereby
amended by the deleting the words "Section 2.1(c)" and replacing such words with
the words "Sections 2.1(c) and 2.2."
18. The definition of the term for "EFI Litigation" in Section 11.1 of the
Merger Agreement is hereby amended by deleted the three capitalized letters
"DLG" and replacing such three letters with the three capitalized letters "DLJ."
19. Except as amended hereby, the Merger Agreement shall remain in full
force and effect.
20. No failure or delay on the part of the Seller, the Company, Holdco
Sub, Holdco, any New Investor, any Old Investor, any Indemnified Party, or any
holder of the Subordinated Notes or the Preferred Stock, in exercising any
right, power or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy hereunder. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
21. Any provision in this Amendment to the contrary notwithstanding,
changes in or additions to this Amendment may be made, and compliance with any
covenant or provision herein set forth may be omitted or waived, if each of the
Seller, the Company, Holdco, Holdco Sub, the Old Investors and the New
Investors shall consent in writing. Any waiver or consent may be given subject
to satisfaction of conditions stated therein and any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
22. This Agreement shall be binding upon and inure to the benefit of the
Company, the Seller, Holdco, Holdco Sub, the Old Investors and the New Investors
and their respective successors and assigns, except that no party shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the other parties.
23. The invalidity or unenforceability of any provision hereof shall in no
way affect the validity or enforceability of any other provision.
24. This Amendment shall be governed by, and construed in accordance with,
the internal laws of the State of California without regard to principles of
conflicts of law.
25. This Amendment may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument, and
any of the parties hereto may execute this Amendment by signing any such
counterpart.
26. From and after the date of this Amendment, upon the reasonable request
by any of the other parties hereto, the Old Investors, the New Investors,
Holdco, Holdco Sub, the Seller, the Company and each of their affiliates shall
execute and deliver such instruments, documents and other writings as may be
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Amendment.
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized and in
accordance with Section 1102 of the Delaware General Corporation Law, as of the
date first above written.
SELLER:
RADIUS INC.
a California corporation
By: /s/ Charles W. Berger
-----------------------------
Name: Charles W. Berger
Title: Chairman and CEO
COMPANY:
SPLASH TECHNOLOGY, INC.
a Delaware corporation
By: /s/ Charles W. Berger
-----------------------------
Name: Charles W. Berger
Title: Chairman and CEO
HOLDCO:
SPLASH TECHNOLOGY HOLDINGS, INC.
a Delaware corporation
By:
-----------------------------
Gregory M. Avis
President and Chief Executive Officer
HOLDCO SUB:
SPLASH MERGER COMPANY, INC.
a Delaware corporation
By:
------------------------------------
Gregory M. Avis
President and Chief Executive Officer
[Signature Page of Amendment No.1 to Merger Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized and in
accordance with Section 1102 of the Delaware General Corporation Law, as of the
date first above written.
SELLER:
RADIUS INC.
a California corporation
By:
-----------------------------
Name:
Title:
COMPANY:
SPLASH TECHNOLOGY, INC.
a Delaware corporation
By:
-----------------------------
Name:
Title:
HOLDCO:
SPLASH TECHNOLOGY HOLDINGS, INC.
a Delaware corporation
By: /s/ Gregory M. Avis
-----------------------------
Gregory M. Avis
President and Chief Executive Officer
HOLDCO SUB:
SPLASH MERGER COMPANY, INC.
a Delaware corporation
By: /s/ Gregory M. Avis
------------------------------------
Gregory M. Avis
President and Chief Executive Officer
[Signature Page of Amendment No.1 to Merger Agreement]
OLD INVESTORS:
SUMMIT SUBORDINATED DEBT FUND, L.P.
By: Summit Partners SD, L.P., General Partner
By: Stamps, Woodsum & Co., III, General Partner
By: /s/ Gregory M. Avis
------------------------------------
Gregory M. Avis
General Partner
SUMMIT VENTURES IV, L.P.
By: Summit Partners IV, L.P., General Partner
By: Stamps, Woodsum & Co., IV, General Partner
By: /s/ Gregory M. Avis
------------------------------------
Gregory M. Avis
General Partner
SUMMIT INVESTORS II, L.P.
By:
------------------------------------
Gregory M. Avis
General Partner
NEW INVESTORS:
SUMMIT INVESTORS III, L.P.
By:
------------------------------------
Gregory M. Avis
General Partner
[Signature Page of Amendment No.1 to Merger Agreement]
SIGMA PARTNERS III, L.P.
By: Sigma Management III, General Partner
By: /s/ Wade Woodson
------------------------------------
Wade Woodson
General Partner
Address: c/o Sigma Partners
2884 Sand Hill Road
Suite 121
Menlo Park, CA 94025
Telecopier: (415) 854-1323
SIGMA ASSOCIATES III, L.P.
By: Sigma Management III, General Partner
By: /s/ Wade Woodson
------------------------------------
Wade Woodson
General Partner
Address: c/o Sigma Partners
2884 Sand Hill Road
Suite 121
Menlo Park, CA 94025
Telecopier: (415) 854-1323
SIGMA INVESTORS III, L.P.
By: Sigma Management III, General Partner
By: /s/ Wade Woodson
------------------------------------
Wade Woodson
General Partner
Address: c/o Sigma Partners
2884 Sand Hill Road
Suite 121
Menlo Park, CA 94025
Telecopier: (415) 854-1323
[Signature Page of Amendment No.1 to Merger Agreement]