Exhibit 2.3
ADVANCED VISUAL SYSTEMS INC.
FORM OF AFFILIATES POOLING AGREEMENT
AGREEMENT, dated as of July ____, 2000, by and among MUSE TECHNOLOGIES,
INC., a Delaware corporation ("MUSE"), on the one hand, and ADVANCED VISUAL
SYSTEMS INC., a Delaware corporation (the "Company"), and the other persons set
forth on the signature page hereto (collectively, the "AVS Affiliates"), on the
other hand.
WHEREAS, concurrently herewith, MUSE, MUSE MERGER SUB, INC., a Delaware
corporation and a wholly-owned subsidiary of MUSE ("Merger Sub"), and the
Company have entered into an Agreement and Plan of Merger dated July ____, 2000
(the "Merger Agreement"); capitalized terms used herein without definition
having the meanings ascribed thereto in the Merger Agreement;
WHEREAS, the AVS Affiliates are the beneficial owners of the number of
shares of AVS capital stock (the "AVS Affiliate Shares") and/or other
securities of the Company set forth in Schedule 1 hereto opposite their
respective names;
WHEREAS, it is a condition of the consummation of the Merger on the part
of MUSE and the Company that the Merger be treated as a Pooling for accounting
purposes;
WHEREAS, pursuant to the Merger Agreement and as a condition to the
consummation of the Merger on the part of MUSE, and in order to facilitate the
Pooling, the AVS Affiliates have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
SECTION 1. POOLING COVENANTS AND REPRESENTATIONS. Each AVS Affiliate,
severally and not jointly, hereby agrees with and covenants to MUSE and the
Company that:
(a) During the period commencing with the date of the execution
hereof and ending 30 days prior to the Effective Time, such AVS Affiliate will
not transfer, pledge, hypothecate, sell or otherwise dispose of (or agree to do
any of the foregoing) any AVS Affiliate Shares or any other securities of MUSE
or the Company held by such AVS Affiliate, except for transfers or other
dispositions by operation of law upon the death of such AVS Affiliate if
necessary to pay estate taxes.
(b) From and after 30 days prior to the Effective Time, such
AVS Affiliate will not sell, transfer, pledge, hypothecate or otherwise dispose
of, or in any way reduce such AVS Affiliate's risk of ownership or investment
in (or agree to do any of the foregoing) any AVS Affiliate Shares or any other
securities of the Company or of any shares of MUSE Common
Stock or any interest with respect to MUSE Common Stock which the undersigned
might acquire in the Merger or any securities which might be paid as a dividend
thereon or with respect thereto or issued or delivered in exchange or
substitution therefor or any other shares of capital stock of MUSE
(collectively, the "Restricted Securities") until after such time as financial
results covering at least 30 days of combined operations of the Company and MUSE
have been publicly, within the meaning of Accounting Series Release No. 130,
filed with the SEC or published by MUSE in the form of a quarterly earnings
report, an effective registration statement filed with the SEC, a report to the
SEC on Form 10-KSB, 10-QSB or 8-K, or any other public filing or announcement
which includes the combined results of operations of MUSE and the Company
(provided, however, that nothing in this paragraph will be deemed to prohibit
charitable contributions thereof without consideration to transferees who agree
to all of the restrictions in this Agreement).
SECTION 2. SECURITIES ACT COVENANTS AND REPRESENTATIONS.
Each AVS Affiliate, severally and not jointly, hereby agrees and
represents and warrants to MUSE as follows:
(a) Such AVS Affiliate has been advised that the offering, sale and
delivery of MUSE Common Stock pursuant to the Merger will be registered under
the 1933 Act on a Registration Statement on Form S-4 (the "Form S-4"). Such AVS
Affiliate has also been advised, however, that to the extent such AVS Affiliate
is considered an "affiliate" of the Company at the time the Merger Agreement is
submitted for a vote of the stockholders of the Company, any public offering or
sale by such AVS Affiliate of any MUSE Common Stock received by such AVS
Affiliate in the Merger will, under current law, require either (i) the further
registration under the 1933 Act of any MUSE Common Stock to be sold by such AVS
Affiliate, (ii) compliance with Rule 145 promulgated by the SEC under the 1933
Act or (iii) the availability of another exemption from such registration under
the 1933 Act.
(b) Such AVS Affiliate has read this Agreement and the Merger Agreement
and has discussed their requirements and other applicable limitations upon such
AVS Affiliate's ability to sell, transfer or otherwise dispose of MUSE Common
Stock, to the extent such AVS Affiliate believed necessary, with such AVS
Affiliate's counsel or counsel for the Company.
(c) Such AVS Affiliate also understands that stop transfer instructions
will be given to the Company's and to MUSE's transfer agents with respect to
certificates evidencing the Restricted Securities issued to such AVS Affiliate
in the Merger and that there will be placed (and MUSE and the Company hereby
agree to cause to be placed) on the certificates evidencing the Restricted
Securities a legend stating in substance:
"THE SECURITIES REPRESENTED HEREBY MAY ONLY BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF IN ACCORDANCE WITH THE TERMS OF AN AFFILIATES
AGREEMENT AMONG THE REGISTERED HOLDER THEREOF, ADVANCED VISUAL
SYSTEMS INC. AND MUSE TECHNOLOGIES INC. A COPY OF SUCH
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AFFILIATES AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF ADVANCED
VISUAL SYSTEMS INC. AND MUSE TECHNOLOGIES INC."
After the filing or publication of the financial results described in
Section 1(b) hereof, certificates evidencing the Restricted Securities
delivered at or after the Effective Time may, at such AVS Affiliate's election,
be surrendered for cancellation and reissuance with a legend referring only to
the applicability of Rule 145 restrictions. MUSE agrees that such stop transfer
instructions and legend will be rescinded and removed promptly if provisions of
this agreement and the 1933 Act are complied with.
(d) Each AVS Affiliate understands that since such AVS Affiliate may be
deemed an "affiliate" of the Company (within the meaning of Rule 145 as defined
below), certain restrictions may be imposed upon each AVS Affiliate's public
resales of the Restricted Securities under the provisions of Rule 145 until
such time as the undersigned has "beneficially owned" (within the meaning of
Rule 144(d)) the Restricted Securities for a period of at least one year ( or
in some cases two years) after the Effective Time and thereafter if and for so
long as the undersigned remains a MUSE affiliate. Unless and until the
restriction "cut-off" provisions of Rule 145(d)(2) or Rule 145(d)(3) become
available, public resales of Restricted Securities may only be made by each AVS
Affiliate in compliance with the requirements of Rule 145(d)(1). Rule 145(d)(1)
permits such resales only (i) while MUSE meets the public information
requirements of Rule 144(c), (ii) in broker's transactions as provided in Rules
144(f) and (g) and (iii) where the amount of Restricted Securities sold,
together with all other sales of MUSE Common Stock sold for such AVS
Affiliate's account within the preceding three months, does not exceed the
greater of (x) one percent of the MUSE Common Stock outstanding as shown by the
most recent report or statement published by MUSE, or (y) the average weekly
reported volume of trading in MUSE Common Stock on all national securities
exchanges, and/or reported through the automated quotation system of a
registered securities association, and/or reported through the consolidated
transaction reporting system during the four calendar weeks preceding any such
sale.
(e) Any transfer of the Restricted Securities in violation of the
provisions hereof shall be void and of no force or effect.
SECTION 3. FURTHER ASSURANCES .
(a) Each party shall execute and deliver such additional instruments
and other documents and shall take such further actions as may be necessary or
appropriate to effectuate, carry out and comply with all of their obligations
under this Agreement. Without limiting the generality of the foregoing, none of
the parties hereto shall enter into any agreement or arrangement (or alter,
amend or terminate any existing agreement or arrangement) if such action would
materially impair the ability of any party to effectuate, carry out or comply
with all the terms of this Agreement. If requested by MUSE, each AVS Affiliate
agrees to execute a letter to MUSE representing that such AVS Affiliate has
complied with such AVS Affiliate's obligations hereunder as of date of such
letter.
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(b) MUSE acknowledges that the provisions of Section 2(d) hereof will be
satisfied, as to any sale by an AVS Affiliate of Restricted Securities pursuant
to Rule 145(d), by such AVS Affiliate's furnishing to MUSE (i) a broker's
letter with respect to that sale stating that each of the requirements of Rule
145(d)(1), described in Section 2(d) hereof, has been met or is inapplicable by
virtue of Rule 145(d)(2) or Rule 145(d)(3); or (ii) a "no Action" letter or
other communication from the staff of the SEC, or an opinion of counsel in form
and substance satisfactory to MUSE and its counsel, to the effect that all of
the applicable requirements of Rule 145(d) have been complied with or that the
disposition may be otherwise effected in the manner requested in compliance
with the 1933 Act.
(c) The parties hereto agree that the shares of MUSE Common Stock issued,
if at all, to the AVS Affiliates as contemplated in the Merger Agreement will
be issued to the AVS Affiliates pursuant to an effective registration statement
under the 1933 Act.
(d) From and after the Effective Time and for so long as necessary in
order to permit the AVS Affiliates to sell shares of MUSE Common Stock pursuant
to Rule 145 and, to the extent applicable, Rule 144, MUSE will use commercially
reasonable efforts to file on a timely basis all reports required to be filed
by it pursuant to Section 13 of the 1934 Act referred to in paragraph (c)(1) of
Rule 144. If MUSE fails to file on a timely basis all reports required to be
filed by it pursuant to Section 13 of the 1934 Act, MUSE will use commercially
reasonable efforts to make publicly available the information regarding itself
referred to in paragraph (c)(2) of Rule 144.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF MUSE.
MUSE represents and warrants to each AVS Affiliate as follows:
(a) This Agreement has been approved by the Board of Directors of MUSE,
representing all necessary corporate action on the part of MUSE (no action by
the stockholders of MUSE being required).
(b) This Agreement has been duly executed and delivered by a duly
authorized officer of MUSE.
(c) MUSE is current in its reporting obligations as required by Rule
144(c).
(d) Each of this Agreement and the Merger Agreement constitutes a valid
and binding agreement of MUSE and, in the case of the Merger Agreement, Merger
Sub, enforceable against MUSE and, in the case of the Merger Agreement, Merger
Sub, in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general application which may affect the enforcement of creditors' rights
generally and by general equitable principles.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE AVS AFFILIATES.
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Each AVS Affiliate, as to such AVS Affiliate, severally and not jointly
represents and warrants to MUSE as follows:
(a) This Agreement has been duly executed and delivered by such AVS
Affiliate. This Agreement constitutes the valid and binding agreement of such
AVS Affiliate, enforceable against such AVS Affiliate in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general application which
may affect the enforcement of creditors' rights generally and by general
equitable principles. The AVS Affiliates Shares listed next to the name of such
AVS Affiliate on Schedule 1 hereto are the only voting securities of the
Company owned (beneficially or of record) by such AVS Affiliate as of the date
hereof.
(b) Such AVS Affiliate has no plan or intention and knows of no plan or
intention on the part of the other stockholders of the Company, to sell,
exchange, transfer, distribute, pledge, dispose of, or perform any other
transaction which would result in a direct or indirect disposition of, shares
of MUSE Common Stock to be issued to the undersigned as part of the Merger,
which shares would have an aggregate fair market value, as of the Effective
Time, in excess of fifty-percent (50%) of the aggregate fair market value,
immediately prior to the Effective Time, of the AVS Affiliate Shares held by
such AVS Affiliate. For purposes hereof, AVS Affiliate Shares (or the portion
thereof) (i) with respect to which such AVS Affiliate receives consideration in
the Merger other than MUSE Common Stock (including, without limitation, cash
received pursuant to the exercise of dissenters' rights) and/or (ii) with
respect to which a sale occurs during the period commencing with the beginning
of discussions between MUSE and the Company to consummate the Merger and ending
at the Effective Time shall be considered shares of outstanding AVS Affiliate
Shares exchanged for MUSE Common Stock in the Merger and then disposed of
pursuant to a plan.
(c) Pursuant to the Merger, such AVS Affiliate will receive no
consideration, directly or indirectly, actually or constructively, for all of
such AVS Affiliate's AVS Affiliate Shares set forth on Schedule 1 hereto other
than shares of MUSE Common Stock or cash for any fractional shares.
SECTION 6. TERMINATION. In the event the Merger Agreement is terminated in
accordance with its terms, this Agreement shall automatically terminate and be
of no further force or effect. Upon such termination, except for any rights any
party may have in respect of any breach by any other party of its or his
obligations hereunder, none of the parties hereto shall have any further
obligation or liability hereunder.
SECTION 7. MISCELLANEOUS.
(a) Notices, Etc. All notices, requests, demands or other communications
required by or otherwise with respect to this Agreement shall be in writing and
shall be deemed to have been duly given to any party when delivered personally
(by courier service or otherwise), when delivered by telecopy and confirmed by
return telecopy, or seven days after being mailed by first class mail, postage
prepared in each case to the applicable addresses for such party as
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provided or contemplated in the Merger Agreement for such party and in the case
of the AVS Affiliates shall be sent care of the Company to the address therein
set forth for the Company.
(b) Amendments, Waivers, Etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by MUSE, the Company and the parties hereto to
which such amendment, change, supplement, waiver, modification or termination
relates.
(c) Successors and Assigns. Neither this Agreement, nor any rights or
obligations hereunder, may be transferred or assigned without the prior written
consent of the other parties hereto, other than the transfer of this Agreement
to the Surviving Corporation in connection with the Merger. This Agreement
shall be binding upon and shall inure to the benefit of and be enforceable by
the parties and their respective successors and permitted assigns, including
without limitation in the case of any corporate party hereto any corporate
successor by merger or otherwise, and in the case of any individual party
hereto any trustee, executor, heir, legatee or personal representative
succeeding to the ownership of such party's AVS Affiliate Shares or other
securities subject to this Agreement. In the event of any transfer of
Restricted Securities in violation of this Agreement, the transferor shall
remain liable for the performance of all obligations under this Agreement by
the transferee.
(d) Entire Agreement. This Agreement (together with the Merger Agreement
and any agreements referred to therein) embodies the entire agreement and
understanding among the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter. There are no representations, warranties or covenants by the parties
hereto relating to such subject matter other than those expressly set forth in
this Agreement and the Merger Agreement.
(e) Severability. If any term of this Agreement or the application thereof
to any party or circumstance shall be held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such term to the
other parties or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law, provided that in
such event the parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out the
parties' intentions hereunder.
(f) Specific Performance. The parties acknowledge that money damages are
not an adequate remedy for violations of this Agreement and that any party may,
in its sole discretion, apply to a court of competent jurisdiction for specific
performance or injunctive or such other relief as such court may deem just and
proper in order to enforce this Agreement or prevent any violation hereof and,
to the extent permitted by applicable law, each party waives any objection to
the imposition of such relief.
(g) Governing Law. This Agreement and all disputes hereunder shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Delaware to the fullest extent possible and without regard to
principles of conflicts of law.
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(h) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of an
number of copies each signed by less than all, but together signed by all, the
parties hereto.
(i) Title to AVS Securities. Each AVS Affiliate has, and on the Closing
Date will have, good and valid title to the AVS Common Stock set forth opposite
such AVS Affiliate's name on Schedule 1 hereto, free and clear of all Liens.
Each AVS Affiliate has, and on the Closing Date will have, good and valid title
to the Stock Options and Warrants set forth opposite his name on Schedule 1
hereto, free and clear of all Liens. The certificates of the AVS Common Stock
surrendered by each AVS Affiliate to MUSE pursuant to Section 1.7 of the Merger
Agreement will be free and clear of all Liens. Each AVS Affiliate has sole
voting and dispositive power over such securities set forth opposite such AVS
Affiliate's name on such Schedule 1.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
MUSE TECHNOLOGIES, INC.
By: ________________________
Name:
Title:
ADVANCED VISUAL SYSTEMS INC.
By: ________________________
Name:
Title:
AVS AFFILIATES:
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Name:
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Name:
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Name:
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Name:
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Name:
------------------------
Name:
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SCHEDULE 1
AVS AFFILIATES; EQUITY OWNERSHIP
COMMON STOCK OPTIONS WARRANTS
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