SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
STRATASYS, INC.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
862685-10-4
(CUSIP Number)
Kenneth R. Koch, Esq.
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
(212) 661-6500
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 10, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with this statement [X].
Page 1 of 8 pages
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SCHEDULE 13D
CUSIP NO. 862685-10-4
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
Nathan A. Low ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
SC, PF, 00 (See Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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7 SOLE VOTING POWER
322,000 (See Item 5)
NUMBER OF --------------------------------------------------------
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED None
BY EACH
REPORTING
PERSON --------------------------------------------------------
WITH
9 SOLE DISPOSITIVE POWER
322,000 (See Item 5)
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10 SHARED DISPOSITIVE POWER
None
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
322,000 (See Item 5)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.0 %
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14 TYPE OF REPORTING PERSON*
IN
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Page 2 of 8 pages
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Item 1. Security and Issuer.
This Statement relates to shares of Common Stock, par value $.01 per
share (the "Shares"), of Stratasys, Inc., a Delaware corporation (the
"Issuer"). The principal executive offices of the Issuer are located at 14950
Martin Drive, Eden Prairie, Minnesota 55344.
Item 2. Identity and Background.
The Reporting Person is Nathan A. Low. His business address is c/o
Sunrise Securities Corp., 135 East 57th Street, New York, New York 10022. The
Reporting Person is the sole stockholder of, and his principal occupation is
serving as President of, Sunrise Securities Corp., a registered broker-dealer,
and Sunrise Financial Group, Inc., a public relations firm.
During the last five years, the Reporting Person has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). During the past five years, the Reporting Person has not been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
State securities laws or finding any violation with respect to such laws.
The Reporting Person is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
On May 10, 1996, the Reporting Person purchased warrants to acquire
an aggregate of 150,000 Shares, for an aggregate of $900,000, to be paid on a
deferred basis (as described in Item 4). On May 10, 1996, the Reporting Person
exercised such warrants and warrants to purchase an additional 50,000 Shares
for $2,000 in cash and a note for $1,348,000, as described in Item 4.
Item 4. Purposes of Transaction.
Pursuant to a Warrant Purchase and Sale Agreement, dated as of May
10, 1996 (the "Purchase Agreement"), among Vertical Financial Inc.
("Vertical") Robb Matzner ("Matzner"), and the Reporting Person, the Reporting
Person acquired, for $525,000, warrants to purchase 87,500 shares of Common
Stock from Vertical and, for $375,000, warrants to purchase 62,500 shares of
Common Stock from Matzner (collectively, the "Purchased Warrants"). The
exercise price of the Purchased Warrants was $8.00 per share and such warrants
were due to expire on October 28, 2001.
Pursuant to a Warrant Modification and Exercise Agreement, dated as
of May 10, 1996 (the "Warrant Exercise Agreement"), among the Issuer,
Vertical, Matzner, the Reporting Person, Floy L. Shaeffer, Donald Heimstaedt,
and Sunrise Securities Corp. ("Sunrise"), the Reporting Person exercised the
Purchased Warrants and
Page 3 of 8 pages
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warrants to purchase an additional 50,000 shares of Common Stock (the
"Additional Warrants"). The exercise price of the Additional Warrants was
$3.00 per share and such warrants were due to expire on October 28, 2001.
Payment of the exercise price for the 200,000 Shares (the "Warrant Shares")
underlying the warrants was made by the payment of $.01 per Share in cash (an
aggregate of $2,000) and the balance ($1,348,000) in the form of a promissory
note (the "Note"), bearing interest from and after August 10, 1996 at the prime
rate as published in the Wall Street Journal and due on May 10, 1997,subject
to mandatory prepayment on the earlier of (i) four business days after any
sale of the Warrant Shares to the extent of the net proceeds therefrom and
(ii) 60 days after the date the registration statement (the "Registration
Statement") registering the sale of the Warrant Shares is declared effective
by the Securities and Exchange Commission. On May 10, 1996, the holders of
warrants, including the Purchased Warrants and the Additional Warrants,
exercised demand registration rights in accordance with the terms of such
warrants to require the Company to use its best efforts to cause the
Registration Statement to be filed and declared effective. To secure the
Reporting Person's obligations under the Note, the Reporting Person pledged
to the Company pursuant to a Pledge Agreement (the "Pledge Agreement"),
100,000 of the Warrant Shares received upon exercise of the Purchased
Warrants and Additional Warrants.
Pursuant to the Purchase Agreement, the Reporting Person agreed to
pay Vertical and Matzner for the Purchased Warrants 50% in cash on the day
after the date the Registration Statement is declared effective and the
balance in cash on the fifth day following such effective date, provided that
if the Registration Statement is not declared effective by July 8, 1996 the
Reporting Person agreed to pay 50% of the purchase price on July 8, 1996 and
the balance on the first business day after the Registration Statement is
declared effective. To secure his obligation to pay the purchase price for the
Purchased Warrants, the Reporting Person pledged certain of the Warrant Shares
to Matzner and Vertical pursuant to a pledge agreement (the "Second Pledge
Agreement"). The pledge of the Warrant Shares to Matzner and Vertical is
subordinate to the pledge to the Issuer under the Pledge Agreement. Pursuant
to an Escrow Agreement (the "Escrow Agreement"), dated as of May 10, 1996,
among Bachner Tally, as escrow agent, Vertical, Matzner, the Reporting Person
and the Issuer, certain of the Warrant Shares are to be held in escrow until
the Reporting Person's obligations to Vertical and Matzner have been paid and,
if such obligations are not paid when due 150,000 of the Warrant Shares are to
be returned to Matzner and Vertical in return for payment to the Reporting
Person of any amounts theretofore paid to them, plus the amount of any
exercise price theretofore paid for such Warrant Shares.
Except as otherwise disclosed herein and absent any change in
personal circumstances, the Reporting Person intends to maintain his equity
position in the Issuer at least until the Registration Statement is declared
effective. At such time, the Reporting Person may liquidate a portion of his
investment. The Reporting Person intends to review on a continuing basis his
investment in the Issuer and may, depending upon his evaluation
Page 4 of 8 pages
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of the Issuer's business and prospects, the prevailing market price for the
Issuer's securities, and upon future developments business and economic
conditions, determine to increase, decrease or continue to hold or dispose of
any or all of his position in the Issuer.
Item 5. Interests in Securities of the Issuer.
(a) The Reporting Person beneficially owns 322,000 Shares,
representing approximately 6.0% of the Outstanding Shares of the Issuer.1
(b) The Reporting Person has sole voting power over 322,000 Shares
(including Shares underlying warrants, expiring December 31, 1999, to purchase
120,000 Shares at $6.00 per Share and warrants expiring November 3, 1998, to
purchase 2,000 Shares at $21 per Share). The foregoing does not include
warrants, expiring November 3, 2000, to purchase 25,000 Shares at $14 per
Share as such warrants do not become exercisable until November 3, 1996.
(c) Except for the transactions on May 10, 1996 described in Item 4,
the Reporting Person has not, in the past sixty days, engaged in any
transaction involving Shares of the Issuer, except as follows:
(a) The Nathan A. Low Individual Retirement Account sold
5,000 Shares at $18.6050 per Share on each of April 18,
1996 and April 23, 1996, (b) the Reporting Person sold
1,000 Shares on April 18, 1996 at $18.6050 per Share and
(c) the Reporting Person sold 5,000 Shares on
April 25, 1996 for $19.1875 per Share, 20,000 Shares on
May 2, 1996 for $18.875 per Share, and 5,000 Shares on
May 3, 1996 for $18.75 per Share. Each of such sales was
made on the open market through a brokerage firm.
(d) N/A.
(e) N/A.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Except as described in Items 4 and 5, the Reporting Person has no
agreements or understandings with any person or entity respecting the
securities of the Issuer.
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1 Based on 4,863,855 Shares of the Issuer reported to be outstanding as set
forth in the Issuer's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996, plus 400,000 Shares underlying warrants exercised on May 10,
1996.
Page 5 of 8 pages
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Item 7. Material to be Filed as Exhibits.
1) Warrant Exercise Agreement.
2) Purchase Agreement.
3) The Note.
4) Pledge Agreement.
5) Second Pledge Agreement.
6) Escrow Agreement.
Page 6 of 8 pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated: May 18, 1996 \s\ Nathan A. Low
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Nathan A. Low
Page 7 of 8 pages
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EXHIBIT INDEX
1) Warrant Exercise Agreement.
2) Purchase Agreement.
3) The Note
4) Pledge Agreement.
5) Second Pledge Agreement.
6) Escrow Agreement.
Page 8 of 8 pages
WARRANT MODIFICATION AND
EXERCISE AGREEMENT
WARRANT MODIFICATION AND EXERCISE AGREEMENT, dated as of May 10,
1996, by and among STRATASYS, INC., a Delaware corporation (the "Company"),
VERTICAL FINANCIAL INC., a British Virgin Islands corporation ("Vertical"),
ROBB MATZNER ("Matzner"), NATHAN LOW ("Low"), FLOY L. SHAEFFER ("Shaeffer"),
DONALD HEIMSTAEDT ("Heimstaedt"), and SUNRISE SECURITIES CORP., a New York
corporation ("Sunrise").
R E C I T A L S
Vertical, Matzner, Low, Shaeffer, and Heimstaedt (collectively, the
"Warrant Holders", and individually, a "Warrant Holder") own warrants
(collectively, the "Warrants" and individually, a "Warrant") to purchase the
number of shares of the Company's Common Stock, $.01 par value ("Common
Stock"), at the exercise price (the "Exercise Price") set forth below next to
his name:
Warrant Holder Shares Price
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Vertical 137,500 $3.00
Matzner 40,000 $3.00
Low 50,000 $3.00
Low 150,000 $8.00
Shaeffer 20,000 $3.00
Heimstaedt 2,500 $3.00
The Warrants were originally issued to Vertical on October 28, 1994,
were transferred to the other Warrant Holders directly or indirectly by
Vertical, and may only be exercised prior to October 28, 1996, with the
consent of M.H. Meyerson & Co. Inc. ("Meyerson"). In connection with the
transfer to Low by Vertical and Matzner of Warrants to purchase 150,000 shares
of Common Stock at $8.00 per share, under a Pledge Agreement of even date
herewith (the "Subordinate Pledge Agreement"), Low granted a security interest
to Matzner in 72,917 shares of Common Stock to be acquired by Low under such
Warrants and granted a security interest to Vertical in 102,083 shares of
Common Stock to be acquired by Low under such Warrants. The Company
acknowledges that it is in receipt of a copy of the Subordinate Pledge
Agreement executed by Low and that the shares of Common Stock to be pledged to
the Company as contemplated by this Agreement have also been pledged to
Vertical and Matzner pursuant to the Subordinate Pledge Agreement. Low,
Matzner, and Vertical have agreed that, subject to the terms of this
Agreement, Low will deposit the certificates representing all shares of Common
Stock pledged to Vertical and Matzner, but not pledged to the Company (the
"Escrow Shares"), with Bachner, Talley, Polevoy & Misher, LLP, as escrow agent
(the "Escrow Agent"), pursuant to an Escrow Agreement of even date herewith
(the "Escrow Agreement").
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Subject to the terms and conditions of this Agreement, each of the
Warrant Holders has notified the Company that he intends to exercise his
Warrant in full and to purchase all shares of Common Stock issuable upon
exercise of such Warrant (such shares being referred to herein as the "Warrant
Shares") and to pay the Exercise Price for such Warrant Shares as provided in
the Warrant as modified by this Agreement. The Company has agreed to accept
payment of the Exercise Price as provided in the Warrants as modified by this
Agreement and to issue certificates representing the Warrant Shares to the
Warrant Holders.
Concurrently with their exercise of the Warrants, the Warrant Holders
have demanded that the Company file a registration statement with the United
States Securities and Exchange Commission (the "SEC") with respect to the
Warrant Shares as provided under the terms of the Warrants (the "Registration
Statement"), and the Company has agreed to file the Registration Statement
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein set forth, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. Exercise of the Warrants and Payment of the Exercise Price.
(a) The Company hereby acknowledges receipt of each Warrant Holder's
notice of exercise of his Warrant and agrees to issue to such Warrant Holder
certificates representing his Warrant Shares registered in his name at a
closing (the "Closing"), which shall occur at the offices of Snow Becker
Krauss P.C., 25th Floor, 605 Third Avenue, New York, New York 10158, at 10:00
a.m. on May 10, 1996 (the "Closing Date"), or at such other time, date and
place as the parties hereto may agree. Each certificate so issued shall bear
the legend referred to in Section 11 of the Warrants until the Registration
Statement is declared effective, at which time unlegended certificates shall
be issued pursuant to Section 4(c).
(b) Anything in the Warrants to the contrary notwithstanding, each
Warrant Holder shall pay the Exercise Price by payment (x) at the Closing of
an amount equal to $.01 multiplied by the number of Warrant Shares issued to
such Warrant Holder (the "Warrant Shares' Par Value") and (y) of the balance
of the Exercise Price (the "Deferred Exercise Price") one year after the
Closing Date. Anything in the preceding sentence to the contrary
notwithstanding, each Warrant Holder shall prepay the Deferred Exercise Price
on the earlier of (i) four business days after the sale of any of the Warrant
Shares, such prepayment to be (x) made in full if the net proceeds of such
sale ("Net Proceeds") exceed the outstanding balance of and accrued interest
on the Deferred Exercise Price and (y) equal to the Net Proceeds if the Net
Proceeds are less than the then outstanding principal balance of and accrued
interest on the Deferred Exercise Price, or (ii) 60 days after the
Registration Statement is declared effective by the Securities and Exchange
Commission. If a Warrant Holder does not pay the Deferred Exercise Price in
full within 90 days after the Closing Date, then the unpaid balance thereof
shall bear interest at the prime rate of interest in effect from day to day as
published in the Wall Street Journal.
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(C) Each of the Warrant Holders acknowledges and agrees that (I) the
Exercise Price of his Warrants is the Exercise Price as set forth therein
without any adjustments as provided in Section 5 thereof or otherwise and (ii)
upon delivery of the Warrants and issuance of the Warrant Shares at the
Closing, such Warrants shall be canceled and shall be of no further force or
effect.
2. The Closing.
(a) At the Closing, each of the Warrant Holders shall deliver to the
Company the following documents, instruments and agreements (the "Closing
Documents"):
(i) such Warrant Holder's original Warrant;
(ii) the consent of Meyerson to the exercise by such
Warrant Holder of his Warrants;
(iii) a good check of such Warrant Holder or a bank check
payable to the Company in payment of the Warrant Shares' Par Value of
the Warrant Shares purchased by such Warrant Holder;
(iv) a Promissory Note, substantially in the form of Exhibit
A hereto (the "Promissory Note"), executed by such Warrant Holder, in
the principal amount of the Deferred Exercise Price of the Warrant
Shares purchased by such Warrant Holder;
(v) a Pledge Agreement, substantially in the form of Exhibit
B hereto (the "Pledge Agreement"), executed by such Warrant Holder,
with respect to one-half of his Warrant Shares;
(vi) in connection with the Pledge Agreement, one or more
certificates representing one-half of the Warrant Shares issued to
such Warrant Holder upon exercise of his Warrant, together with one
or more Stock Powers executed in blank by such Warrant Holder with
his signature medallion guaranteed; and
(vii) such other documents, instruments and agreements as
shall be reasonably requested by the Company or its counsel to
effectuate fully the transactions contemplated by this Agreement.
(b) At the Closing, the Company shall deliver to each Warrant Holder
the following documents, instruments and agreements:
(i) two or more certificates representing the Warrant Shares
registered in the name of such Warrant Holder in such denominations
as the Warrant Holder shall designate, provided that the aggregate
denominations of one or more of such certificates be equal to
one-half of the Warrant Shares purchased by such Warrant Holder (it
being the
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intention of the parties that certificates representing one-half of
the Warrant Shares be delivered to the Company pursuant to Section
2(a) (vi) above); and
(ii) such other documents, instruments and agreements as
shall be reasonably requested by such Warrant Holder or his counsel
to effectuate fully the transactions contemplated by this Agreement.
3. Sunrise and Escrow Agent Obligations.
(a) At the Closing, (i) all Warrant Holders except for Low shall
deliver to Sunrise, for placement in such Warrant Holder's brokerage account
with Sunrise, all certificates representing all Warrant Shares that were not
pledged to the Company under the Pledge Agreement (all of such Warrant
Holders' shares being referred to herein as the "Unencumbered Warrant
Shares"), and (ii) Low shall deliver to the Escrow Agent, to hold and deliver
in accordance with the Escrow Agreement, certificates representing the Escrow
Shares. Sunrise shall retain the certificates representing the Unencumbered
Shares and, upon receipt under Section 3 of the Escrow Agreement, certificates
representing the Escrow shares in its possession and shall deliver such
certificates only upon the sale of the Warrant Shares represented thereby or
as otherwise permitted by this Agreement. The Escrow Agent shall retain the
certificates representing the Escrow Shares in its possession and shall
deliver such certificates only as provided in the Escrow Agreement.
(b) Each Warrant Holder hereby designates Sunrise as its broker to
hold, transfer or sell such Warrant Holder's Warrant Shares then being held by
Sunrise at such time and in such manner as such Warrant Holder shall designate
in writing pursuant to instructions given after the effective date of the
Registration Statement. Sunrise shall receive a commission equal to six cents
per share for each Warrant Share so sold (subject to adjustment for any stock
split or recapitalization of the Company).
(C) Until such time as the unpaid balance of principal of and
interest, if any, on a Warrant Holder's Promissory Note plus all other amounts
that may be payable by such Warrant Holder to the Company under this
Agreement, the Promissory Note or the Pledge Agreement (collectively, a
Warrant Holder's "Obligations") shall have been paid in full, Sunrise, as
broker, shall collect the proceeds of any sale of such Warrant Holder's
Warrant Shares then held by Sunrise. Upon the sale of any such Warrant Shares,
each Warrant Holder hereby authorizes and directs Sunrise to pay, and Sunrise
hereby agrees to pay, the proceeds, net of any commissions and expenses of
sale (the "Net Proceeds of Sale"), first, to the Company up to an amount equal
to the then unpaid Obligations (including, in the case of Vertical and
Matzner, all unpaid amounts due under Section 4(b) hereof) by wire transfer of
immediately available funds in such amount and to such account as the Company
shall designate in writing, and, second, to the Warrant Holder, his personal
representatives, successors or assigns, or otherwise pursuant to his written
instructions of an amount equal to the balance of the Net Proceeds of Sale. In
the event that instructions given by the Company conflict with those given by
a Warrant Holder, Sunrise shall follow the instructions given by the Company.
Sunrise shall have no liability for taking any action in
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accordance with any written instructions provided to it under the terms of
this Agreement. If less than all of a Warrant Holder's Warrant Shares being
held by Sunrise are sold, then Sunrise shall continue to retain in its
possession the certificates representing such unsold Warrant Shares until
otherwise directed by the Warrant Holder, but at least until December 31,
1996.
(d) Upon payment in full of all Obligations of a Warrant Holder, the
Company shall promptly deliver the Warrant Share certificates of such Warrant
Holder then being held by it under the Pledge Agreement to the Warrant
Holders, in accordance with such Warrant Holder's written instructions, or, in
the case of Low, in accordance with the terms of the Escrow Agreement;
provided, however, that if a delivery to a Warrant Holder other than Low
occurs before December 31, 1996, such delivery shall be made to the Warrant
Holder or its designee c/o Sunrise, and Sunrise shall continue to hold such
certificates and any certificates representing such Warrant Holder's
Unencumbered Warrant Shares until the earlier of the sale of the Warrant
Shares represented thereby or December 31, 1996, at which time Sunrise shall
deliver such certificates to such Warrant Holder or pursuant to his written
instructions.
4. Registration of the Warrant Shares.
(a) The Company hereby acknowledges receipt of the Warrant Holders'
request for registration pursuant to Section 9 of the Warrants
("Registration") and agrees that, except as modified by the terms of this
Agreement, the provisions of Section 9, including, without limitation, the
obligations of Section 9(d), shall govern such Registration.
(b) Anything in the Warrants to the contrary notwithstanding, (i) the
Company shall use its best efforts to file the Registration Statement with the
Securities and Exchange Commission (the "SEC") within ten days after the
Closing Date, and (ii) Vertical and Matzner shall jointly and severally
reimburse the Company for one-half of the aggregate fees and expenses incurred
by the Company in connection with the negotiations, drafting and closing of
this Agreement and the Registration up to a maximum aggregate payment by them
of $7,500. The obligation of Vertical and Matzner to pay such fees and
expenses shall be secured under the Pledge Agreement.
(C) If the Registration Statement is declared effective by the SEC,
then the Company shall cause new replacement certificates representing the
Warrant Shares to be issued to the Warrant Holders without a restrictive
legend upon receipt by the Company's transfer agent of the certificates issued
at the Closing.
(d) If the Registration Statement is not declared effective within 90
days after the Closing Date, then upon notice given not earlier than 90 days
after the Closing Date and not later than 120 days after the Closing Date,
each Warrant Holder shall have the right to exchange his Warrant Shares then
outstanding for (i) his Promissory Note, which shall be canceled, and (ii)
warrants to purchase a number of shares of Common Stock equal to the number of
Warrant Shares so exchanged, such warrants having the same exercise price and
other terms, conditions, rights and obligations as such Warrant Holder's
original Warrants, including, without limitation, the
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registration rights provisions of Section 9(d). Such exchange shall occur not
earlier than ten days and not later than 30 days after such notice has been
given by such Warrant Holder. If, at the time that such notice is given,
Sunrise or the Escrow Agent shall have possession of certificates representing
any such Warrant Shares, Sunrise or the Escrow Agent shall deliver such
certificates to the Warrant Holder or otherwise pursuant to his instructions.
5. Representations and Warranties of the Warrant Holders.
Each Warrant Holder hereby represents and warrants as to itself or
himself that:
(a) If such Warrant Holder is a corporation, it is duly organized,
validly existing and in good standing under the laws of its state of
organization.
(b) Such Warrant Holder has the power to execute, deliver and perform
this Agreement and the Closing Documents to which it or he is a party. Such
Warrant Holder has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the Closing Documents executed
by it or him.
(C) No consent or approval of any person other than Meyerson is or
will be required in connection with the execution, delivery or performance by
such Warrant Holder of this Agreement and its or his Closing Documents.
(d) The execution and delivery by such Warrant Holder of this
Agreement and the Closing Documents to which it or he is a party and the
performance by it or him hereunder and thereunder, will not violate any
provision of law and will not conflict with or result in a breach of any
order, writ, injunction, ordinance, resolution, decree or other similar
document or instrument of any court or governmental authority, bureau or
agency or any certificate of incorporation or by-laws of a corporate Warrant
Holder, or create (with or without the giving of notice or lapse of time, or
both) a default under or breach of any material agreement, bond, note or
indenture to which such Warrant Holder is a party or by which it or he is
bound.
(e) This Agreement and each of the Closing Documents to which such
Warrant Holder is a party has been duly executed and delivered by such Warrant
Holder and each constitutes the valid and legally binding obligation of such
Warrant Holder, enforceable in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws, now or hereafter in effect,
relating to or affecting the enforcement of creditors' rights generally and
except that the remedy of specific performance and other equitable remedies
are subject to judicial discretion.
6. Representations and Warranties of the Company.
The Company hereby represents and warrants that:
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(a) It is duly organized, validly existing and in good standing under
the laws of the State of Delaware.
(b) It has the power to execute, deliver and perform this Agreement
and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement.
(C) No consent or approval of any person other than Meyerson is or
will be required in connection with the execution, delivery or performance by
it of this Agreement.
(d) The execution and delivery by it of this Agreement and the
performance by it hereunder, will not violate any provision of law and will
not conflict with or result in a breach of any order, writ, injunction,
ordinance, resolution, decree or other similar document or instrument of any
court or governmental authority, bureau or agency or its certificate of
incorporation or by-laws, or create (with or without the giving of notice or
lapse of time, or both) a default under or breach of any material agreement,
bond, note or indenture to which it is a party or by which it is bound.
(e) This Agreement has been duly executed and delivered by it and
constitutes its valid and legally binding obligation, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other
similar laws, now or hereafter in effect, relating to or affecting the
enforcement of creditors' rights generally and except that the remedy of
specific performance and other equitable remedies are subject to judicial
discretion.
7. Miscellaneous.
(a) This Agreement shall be binding upon, inure to the benefit of,
and be enforceable by, the parties hereto and their respective successors and
assigns.
(b) This Agreement and the Schedules and Exhibits attached hereto
contain the entire understanding of the parties with respect to its subject
matter. This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter. No party is entitled
to rely on any representation or warranty of the other not made in this
Agreement or the Schedules or Exhibits hereto. This Agreement may be amended
only by a written instrument duly executed by the parties.
(C) The Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) All notices, claims certificates, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed (registered or certified mail,
postage prepaid, return receipt requested) as follows:
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If to the Company: Stratasys, Inc.
14950 Martin Drive
Eden Prairie, Minnesota 55344
Attn: Chairman
With a copy to: Snow Becker Krauss P.C.
605 Third Avenue
New York, NY 10158-0125
Attn: Eric Honick, Esq.
If to Vertical: Vertical Financial Inc.
c/o Orida Capital International, Ltd.
221 East 61st Street
New York, NY 10021
If to Low: Nathan Low
c/o Sunrise Financial Group
135 East 57th Street, 11th Floor
New York, NY 10022
If to Matzner: Robb Matzner
157 East 74th Street
New York, NY 10021
With a copy to: Baer Marks & Upham, LLP
805 Third Avenue
New York, NY 10022
Attn: David L. Mathus, Esq.
If to Shaeffer: Floy Lambertson Shaeffer
119 Joan Drive
Barrington, IL 60010
If to Heimstaedt: Donald Heimstaedt
289 River Edge Drive
Chatham, NJ 07928
If to Sunrise: Sunrise Securities, Inc.
135 East 57th Street, 11th Floor
New York, NY 10022
or such other address as the person to whom notice is to be given may have
previously furnished to the others in writing in the manner set forth above.
(e) This Agreement shall be governed by, and construed and enforced
in accordance with, the internal laws of the State of New York.
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<PAGE>
(f) This Agreement may be executed simultaneously in several
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
STRATASYS, INC.
By: /s/ S. Scott Crump
-----------------------------
S. Scott Crump, President
VERTICAL FINANCIAL INC.
By: /s/ Jacob Agam
-----------------------------
Jacob Agam, President
/s/ Nathan Low
-----------------------------
Nathan Low
/s/ Robb Matzner
-----------------------------
Robb Matzner
/s/ Floy L Shaeffer
-----------------------------
Floy L. Shaeffer
/s/ Donald Heimstaedt
-----------------------------
Donald Heimstaedt
SUNRISE SECURITIES CORP.
By: /s/ Nathan Low
-----------------------------
Nathan Low, President
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<PAGE>
ESCROW AGENT ACKNOWLEDGMENT
The undersigned, acting as Escrow Agent pursuant to an Escrow
Agreement dated as of May 10, 1996, by and among Nathan Low, Sunrise
Securities Corp., Vertical Financial Inc., Robb Matzner and Stratasys, Inc.,
hereby acknowledges its obligations as Escrow Agent under the foregoing
Warrant Modification and Exercise Agreement and agrees to be bound by such
obligations.
BACHNER, TALLEY, POLEVOY &
MISHER, LLP
By: /s/ Bachner, Talley, Polevoy & Misher, LLP
-------------------------------------------
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WARRANT PURCHASE AND SALE AGREEMENT
WARRANT PURCHASE AND SALE AGREEMENT, dated as of May 10, 1996,
between Vertical Financial Inc., a corporation organized under the laws of the
British Virgin Islands, c/o Orida Capital International Ltd., 221 East 61st
Street, New York, NY 10021 ("Vertical"), Robb Matzner, having an address at
157 East 74th Street, New York, NY 10021 ("Matzner") (Vertical and Matzner,
collectively, the "Sellers"), and Nathan Low, c/o Sunrise Financial Group, 135
East 57th Street, 11th Floor, New York, NY 10021 ("Buyer").
W I T N E S S E T H:
WHEREAS, Sellers own certain warrants to purchase shares of Common
Stock, par value $.01 per share ("Common Stock"), of Stratasys, Inc., a
Delaware corporation (the "Company");
WHEREAS, Buyer desires to purchase certain of these warrants from
Sellers;
NOW, THEREFORE, in consideration of the mutual promises, covenants
and other agreements contained herein, the parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE; CLOSING
SECTION 1.1 Purchase and Sale of Purchased Warrants. Subject to the
terms and conditions set forth herein, Sellers each agree to sell, assign,
transfer and deliver to Buyer, and Buyer agrees to purchase, acquire and
accept from Sellers, Warrants, copies of which are attached hereto as Exhibit
A, to purchase the following numbers of shares of Common Stock at the
following exercise prices:
No. Warrant Shares Exercise Price
From Vertical:
87,500 $8 per share
From Matzner:
62,500 $8 per share (collectively, the
"Purchased Warrants")
<PAGE>
SECTION 1.2 Consideration. Subject to the terms and conditions set
forth herein, the purchase price (the "Purchase Price") payable by Buyer for
the Purchased Warrants shall be the aggregate sum of $900,000, payable
$525,000 to Vertical and $375,000 to Matzner (the "Purchase Price").
Buyer covenants and agrees to pay the Purchase Price in full by wire
transfer of same day funds to the accounts specified by Vertical and Matzner
as follows:
50% no later than one business day following the date (the "Effective
Date") on which the registration statement being filed by the Company
pursuant to that certain Warrant Modification and Exercise Agreement
dated as of May 10, 1996 (the "Stratasys Agreement") is declared
effective by the Securities and Exchange Commission (the "SEC"); and
the balance of the Purchase Price (50%) no later than the fifth day
following the Effective Date;
provided, however, in the event that the Effective Date has not
occurred by July 8, 1996, Buyer shall pay one-half of the Purchase Price to
Sellers on July 8, 1996 and shall pay the balance of the Purchase Price no
later than the end of the first business day following the Effective Date. If
Buyer has not paid the amounts payable hereunder when due (and a grace period
of five business days shall have elapsed without such payment being made) then
Sellers shall have the right to terminate this agreement upon notice to Buyer
and the Escrow Agent and upon receipt of such notice Buyer or the Escrow
Agent, as applicable, shall immediately cause to be returned, or in the case
of any shares then subject to that certain pledge agreement dated of even date
herewith between Buyer and the Company, assigned or transferred, to the
Sellers, their Purchased Warrants and any shares of Common Stock or other
securities received upon exercise of or by virtue of being a holder of the
Purchased Warrants, provided that Buyer shall be reimbursed, without interest
or deduction, for any portion of the Purchase Price previously paid to Sellers
or exercise price paid to the Company and Sellers shall assume responsibility
for paying any portion of the exercise price which remains due and payable to
the Company.
SECTION 1.3 Closing; Transfer Procedures. The closing (the "Closing")
of the purchase and sale of the Purchased Warrants hereunder shall be deemed
to take effect upon the execution of this Agreement by the parties hereto;
provided, however, that no closing shall occur unless and until (a) M.H.
Meyerson shall have executed a consent to (i) release from that certain
Agreement Not to Sell, dated October 20, 1994 and executed by Vertical, all of
the Purchased Warrants and all of the other warrants of the Company originally
contained in the warrants issued to Vertical and subject to such agreement,
including all shares of Common Stock issuable upon the exercise of the
Purchased Warrants and all such other warrants, (ii) permitting the demand
registration,
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<PAGE>
commencing at any time, of the shares of Common Stock issuable or issued upon
exercise of such warrants and (b) Buyer shall have executed the Pledge
Agreements.
Upon the Closing, the respective Sellers shall execute the applicable
forms of Assignment attached hereto as Exhibit B and shall deliver to the
Company, or counsel to the Company, such Assignments and such original
Warrants as are necessary for the Company to issue the Purchased Warrants to
Buyer c/o the Escrow Agent (as defined herein) and to register the Purchased
Warrants in the Buyer's name on the Company's Warrant Register.
SECTION 1.4 Pledge; Escrow. The obligations of Buyer under
this Agreement are secured by respective pledges, pursuant to pledge agreement
(the "Pledge Agreement") in favor of Vertical and Matzner in the form attached
hereto as Exhibit C, of the Purchased Warrants, certain other warrants owned
by Buyer to purchase 50,000 shares of Common Stock at $3 per share (the "Low
Warrants") and any shares of Common Stock or cash or other securities received
upon exercise of or by virtue of being a holder of the Purchased Warrants and
the Low Warrants or such shares and the proceeds thereof. Upon receipt of the
Purchased Warrants and the Low Warrants or the shares of Common Stock issuable
upon the exercise thereof, and until payment in full of the Purchase Price,
the Purchased Warrants and the Low Warrants or the shares of Common Stock
issuable upon the exercise thereof shall be held in escrow by Bachner Talley
Polevoy & Misher (the "Escrow Agent") in accordance with the Escrow Agreement
attached hereto as Exhibit D (the "Escrow Agreement").
SECTION 1.5 Order of Sale. Buyer hereby covenants and agrees that it
shall (a) pay to Sellers the full Purchase Price prior to selling the shares
of Common Stock underlying the Purchased Warrants and the Low Warrants; and
(b) sell on behalf of the respective Sellers, Donald Heimstaedt and Floy L.
Shaeffer, those certain shares of Common Stock of the Company (totaling
200,000 shares) received by Sellers, Donald Heimstaedt and Floy L. Shaeffer
upon exercise of their $3.00 warrants which are to be held in brokerage
accounts at Sunrise for the respective Sellers, Donald Heimstaedt and Floy L.
Shaeffer prior to Buyer selling any of the shares of Common Stock issued to
him upon exercise of the Purchased Warrants.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Each Seller severally represents and warrants to Buyer with respect
to the respective Purchased Warrants of each, that:
SECTION 2.1 Title to the Purchased Warrants. Seller owns and holds
title to the Purchased Warrants free and clear of any Lien (meaning any
mortgage, lien, claim,
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<PAGE>
pledge, charge, security, interest, preemptive right, right of first refusal,
option, judgment, title defect, or encumbrance of any kind) of any kind and
has not exercised any of his or its Purchased Warrants in whole or in part.
Upon the Closing and fulfillment of the procedures set forth in Section 1.3,
Buyer will acquire title to the Purchased Warrants, free and clear of any Lien
of any kind other than the Liens created by the Pledge Agreements.
SECTION 2.2 Authority Relative to this Agreement. Matzner has full
power, capacity and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby and thereby and Vertical has
full corporate power and authority to execute and deliver this Agreement and
to consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement on behalf of Vertical have been
duly authorized by all necessary corporate action on behalf of Vertical. This
Agreement has been duly and validly executed and delivered by Seller, and
constitutes the legal, valid and binding agreement of Seller enforceable
against Seller in accordance with its terms except as such obligations and
their enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought (whether at law or
in equity).
SECTION 2.3 Conflicts. Neither the execution and delivery by Seller
of this Agreement, nor the consummation of the transactions contemplated
hereby, nor the compliance by Seller with the provisions hereof, will (nor
with the giving of notice or the lapse of time or both, would) in the case of
Vertical, conflict with or result in a violation of any provision of the
memorandum of association or articles of association of Seller, or, in the
case of either Seller, in the breach of any agreement to which Seller is a
party or otherwise bound or constitute a violation of any law, rule,
regulation or decree or any other requirement of any court or governmental or
administrative body or agency applicable to Seller.
SECTION 2.4 Litigation. There are no suits or actions, or
administrative, arbitration or other proceedings or governmental
investigations, pending or, to the best knowledge of Seller threatened,
against or relating to Seller which, if determined in a manner adverse to
Seller, would adversely affect Seller's ability to perform this Agreement or
the transactions contemplated hereby. No consent or approval of any person,
entity or governmental authority is required in connection with the execution,
delivery and performance of this Agreement or the transactions contemplated
hereby by Seller.
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<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each of the Sellers that:
SECTION 3.1 Acquisition for Investment; Warrants and Shares Not
Registered. Buyer is acquiring the Purchased Warrants for its own account and
not with a present intention to make any sale, disposition, distribution or
other transfer of the Purchased Warrants or the shares of Common Stock
issuable upon exercise thereof in a manner that will be in violation of any
applicable securities laws and Buyer understands that neither the Purchased
Warrants or the shares of Common Stock issuable upon exercise thereof have
been registered under the 1933 Act or under the securities laws of any state
or other jurisdiction.
SECTION 3.2 Form of Warrant and Terms Thereof. Buyer understands and
agrees to the terms of the Purchased Warrants, as set forth in Exhibit A
hereto.
SECTION 3.3 Authority Relative to This Agreement; Binding Obligation.
Buyer has full power, capacity and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby and thereby.
This Agreement has been duly and validly executed and delivered by Buyer, and
constitutes the legal, valid and binding agreement of Buyer enforceable
against Buyer in accordance with its terms except as such obligations and
their enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought (whether at law or
in equity).
SECTION 3.4 Risks; Information. Buyer acknowledges that there are
substantial risks associated with an investment in the Purchased Warrants.
Buyer acknowledges that he has been provided with such information on the
Company and the Purchased Warrants as he has requested, including that certain
Prospectus of the Company dated October 20, 1994, and represents that he is
sophisticated and experienced in making investment decisions of this nature.
ARTICLE IV
SURVIVAL AND INDEMNIFICATION
4.1 Survival of Undertakings. Except for the representations and
warranties of Sellers in Section 2.1 hereof and the representations and
warranties of Buyer in
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<PAGE>
Sections 3.1 and 3.2 hereof which shall survive the Closing, none of the
representations and warranties of Buyer or Seller contained herein shall
survive the Closing. The respective covenants and agreements of Buyer,
including without limitation those contained in Sections 1.2, 1.4, 1.5 and
1.6, and Sellers contained herein and to be performed to any extent after the
Closing shall, to such extent, survive the Closing. Buyer and each Seller
severally agree to indemnify, defend and hold harmless the other party from
and against all demands, claims, actions or causes of action, assessments,
losses, damages, liabilities, reasonable costs and expenses, including without
limitation, reasonable attorney's fees, interest, penalties and costs of
enforcing this indemnity, asserted against or imposed upon or incurred by the
other party resulting from or arising under its nonperformance of any then
surviving covenant or agreement to be performed hereunder on or after Closing
or its material breach of any representation or warranty hereunder.
4.2 Conditions of Indemnification. The obligations and liabilities of
the parties under Section 4.1 hereof resulting from the assertion of liability
by third parties ("Claims") shall be subject to the following terms and
conditions: The indemnified party shall give indemnifying party prompt notice
of any claim asserted against or imposed upon or incurred by the indemnified
party, and the indemnifying party shall undertake the defense thereof by
counsel of its own choosing. In the event that indemnifying party shall,
within a reasonable time and after its receipt of the indemnified party's
notice of any such Claim, fail to defend, the indemnified party shall (upon
further notice to the other party) have the right to undertake the defense,
compromise or settlement of such Claim for the account of the indemnifying
party, subject to the right of the indemnifying party to assume the defense of
such Claim at any time prior to the settlement, compromise or final
determination thereof.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally by
hand or by recognized overnight courier, telecopied or mailed (by registered
or certified mail, postage prepaid) to the addresses as set forth above.
SECTION 5.2 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersede any prior agreements, written or oral, with respect thereto.
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<PAGE>
SECTION 5.3 Governing Law; Consent to Jurisdiction. This Agreement
shall be governed and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed entirely within
such State, without regard to the conflict of laws rules thereof. The parties
each hereby agrees to the personal jurisdiction of any state or federal court
within the State of New York (New York County) and waives personal service of
any and all process upon it, and consents that all service of process may be
made by registered mail direct to a party at the address indicated at the
beginning of this Agreement and service so made shall be deemed to be
completed five (5) days after the same shall have been deposited in the United
States mail, postage prepaid. Vertical waives, at the option of Buyer, any
objection based on forum non conveniens and any objection to venue of any
action instituted hereunder and consents to the granting of such legal or
equitable relief as is deemed appropriate by the court. Nothing contained in
this paragraph shall affect the right of any party to serve legal process in
any other manner permitted by law.
SECTION 5.4 Severability. If any provisions of this Agreement for any
reason shall be held to be illegal, invalid or unenforceable, such illegality
shall not affect any other provision of this Agreement, but this Agreement
shall be construed as if such illegal, invalid or unenforceable provision had
never been included herein.
SECTION 5.5 Counterparts. The Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against
any party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding
when one or more counterparts hereof, individually or taken together, shall
bear the signatures of all of the parties reflected hereon as the signatories.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date set forth above.
Sellers:
VERTICAL FINANCIAL INC.
/s/ Jacob Agam
---------------------------
Name: Jacob Agam
Title: President
/s/ Robb Matzner
---------------------------
Robb Matzner
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<PAGE>
Buyer:
/s/ Nathan Low
---------------------------
Nathan Low
-8-
<PAGE>
EXHIBIT A
Copies of Warrant
A-1
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the attached Warrant.)
FOR VALUE RECEIVED, Vertical Financial, Inc., hereby sells,
assigns, and transfers unto Nathan Low, having an address at c/o Sunrise
Financial Group, 135 East 57th Street, 11th Floor, New York, NY 10021, the
attached Warrant (having an exercise price of $8 per share) to the extent of
the right to purchase 87,500 shares of Common Stock, $.01 par value per share,
of Stratasys, Inc. (the "Company"), together with all right, title, and
interest therein, and does hereby irrevocably constitute and appoint
as attorney to transfer such Warrant on the books of the
Company, with full power of substitution.
Dated: May , 1996
Vertical Financial, Inc.
By:
------------------------------
Name:
Title:
NOTICE
The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.
B-1
<PAGE>
EXHIBIT B, continued
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the attached Warrant.)
FOR VALUE RECEIVED, Robb Matzner, having addresses of 79
Snake Bend Road, Wanaque, NJ 07465 and 157 East 74th Street, New York, NY
10021, hereby sells, assigns, and transfers unto Nathan Low, having an address
at c/o Sunrise Financial Group, 135 East 57th Street, 11th Floor, New York, NY
10021, the attached Warrant (having an exercise price of $8 per share) to the
extent of the right to purchase 62,500 shares of Common Stock, $.01 par value
per share, of Stratasys, Inc. (the "Company"), together with all right, title,
and interest therein, and does hereby irrevocably constitute and appoint
as attorney to transfer such Warrant on the books of the
Company, with full power of substitution.
Dated: May , 1996
----------------------------------
Robb Matzner
NOTICE
The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.
B-2
<PAGE>
EXHIBIT C
Pledge Agreement
[to be inserted here]
C-1
<PAGE>
EXHIBIT C-1
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the attached Warrant.)
FOR VALUE RECEIVED, Nathan Low, having an address at c/o
Sunrise Financial Group, 135 East 57th Street, 11th Floor, New York, NY 10021,
hereby sells, assigns, and transfers unto Vertical Financial Inc., (i) the
attached Warrant (having an exercise price of $8 per share) to the extent of
the right to purchase 87,500 shares (the "Warrant") of Common Stock, $.01 par
value per share, of Stratasys, Inc. (the "Company"), and (ii) any and all
shares of the Company and securities issued upon exercise of the Warrant or
issued to the holder of the Warrant with respect to the Warrant, together with
all right, title, and interest therein, and does hereby irrevocably constitute
and appoint as attorney to transfer such Warrant on the
books of the Company, with full power of substitution. This Assignment was
issued in connection with that certain Pledge Agreement dated as of May , 1996
among Vertical Financial Inc., Nathan Low and Robert Matzner.
Dated: , 1996
---------------------------------
Nathan Low
NOTICE
The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.
C-2
<PAGE>
EXHIBIT C-2
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the attached Warrant.)
FOR VALUE RECEIVED, Nathan Low, having an address at c/o
Sunrise Financial Group, 135 East 57th Street, 11th Floor, New York, NY 10021,
hereby sells, assigns, and transfers unto Robb Matzner, having addresses of 79
Snake Bend Road, Wanaque, NJ 07465 and 157 East 74th Street, New York, NY
10021, (i) the attached Warrant (having an exercise price of $8 per share) to
the extent of the right to purchase 62,500 shares (the "Warrant") of Common
Stock, $.01 par value per share, of Stratasys, Inc. (the "Company"), and (ii)
any and all shares of the Company and securities issued upon exercise of the
Warrant or issued to the holder of the Warrant with respect to the Warrant,
together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint as attorney to
transfer such Warrant on the books of the Company, with full power of
substitution. This Assignment was issued in connection with that certain
Pledge Agreement dated as of May , 1996 among Nathan Low, Robert Matzner and
Vertical Financial Inc.
Dated: , 1996
----------------------------------
Nathan Low
NOTICE
The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.
C-3
<PAGE>
EXHIBIT C-3
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the attached Warrant.)
FOR VALUE RECEIVED, Nathan Low, having an address at c/o
Sunrise Financial Group, 135 East 57th Street, 11th Floor, New York, NY 10021,
hereby sells, assigns, and transfers unto Robb Matzner, having addresses of 79
Snake Bend Road, Wanaque, NJ 07465 and 157 East 74th Street, New York, NY
10021, (i) the attached Warrant (having an exercise price of $3 per share) to
the extent of the right to purchase 20,834 shares (the "Warrant") of Common
Stock, $.01 par value per share, of Stratasys, Inc. (the "Company"), and (ii)
any and all shares of the Company and securities issued upon exercise of the
Warrant or issued to the holder of the Warrant with respect to the Warrant,
together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint as attorney to
transfer such Warrant on the books of the Company, with full power of
substitution. This Assignment was issued in connection with that certain
Pledge Agreement dated as of May , 1996 among Nathan Low, Robert Matzner and
Vertical Financial Inc.
Dated: , 1996
---------------------------------
Nathan Low
NOTICE
The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.
C-4
<PAGE>
EXHIBIT C-4
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the attached Warrant.)
FOR VALUE RECEIVED, Nathan Low, having an address at c/o
Sunrise Financial Group, 135 East 57th Street, 11th Floor, New York, NY 10021,
hereby sells, assigns, and transfers unto Vertical Financial Inc., (i) the
attached Warrant (having an exercise price of $3 per share) to the extent of
the right to purchase 29,166 shares (the "Warrant") of Common Stock, $.01 par
value per share, of Stratasys, Inc. (the "Company"), and (ii) any and all
shares of the Company and securities issued upon exercise of the Warrant or
issued to the holder of the Warrant with respect to the Warrant, together with
all right, title, and interest therein, and does hereby irrevocably constitute
and appoint as attorney to transfer such Warrant on the
books of the Company, with full power of substitution. This Assignment was
issued in connection with that certain Pledge Agreement dated as of May , 1996
among Vertical Financial Inc., Nathan Low and Robert Matzner.
Dated: , 1996
-----------------------------------
Nathan Low
NOTICE
The signature on the foregoing Assignment must correspond to
the name as written upon the face of this Warrant in every particular, without
alteration or enlargement or any change whatsoever.
C-5
<PAGE>
EXHIBIT D
ESCROW AGREEMENT
[To be inserted here]
D-1
PROMISSORY NOTE
New York, New York
May 10, 1996
FOR VALUE RECEIVED, NATHAN LOW ("Low") ("Maker"), hereby promises to pay
to the order of STRATASYS, INC., a Delaware corporation ("Payee"), at 14950
Martin Drive, Eden Prairie, Minnesota 55344, in lawful money of the United
States of America, the principal amount of ONE MILLION THREE HUNDRED
FORTY-EIGHT THOUSAND AND 00/100 DOLLARS ($1,348,000.00) on May 10, 1997 (the
"Maturity Date"). If the principal balance of this Promissory Note is not paid
in full on or before August 10, 1996, then the unpaid principal amount hereof
from time to time outstanding shall bear interest daily from and after such
date until paid in full at an annual rate of interest equal to the prime rate
of interest as published in the Wall Street Journal (the "Prime Rate"). Maker
shall pay all accrued and unpaid interest on the Maturity Date. Interest shall
be determined on the basis of a 360-day year and paid for the actual number of
days elapsed. Interest on overdue principal shall be payable at the lower of
the Prime Rate plus five percent (5%) per annum or the maximum rate permitted
by law (such rate being referred to herein as the "Default Rate") until such
overdue principal is paid in full.
This Promissory Note has been given to Payee pursuant to a Warrant
Modification and Exercise Agreement, dated May 10, 1996, among Maker, Payee,
and certain other holders of warrants to purchase Common Stock of Payee (the
"Warrant Exercise Agreement"). This Promissory Note is secured under a Pledge
Agreement, of even date herewith, between Maker and Payee.
Maker shall pay all costs of collection of all past due amounts under
this Promissory Note, including reasonable attorneys' fees and expenses if
collected by or through legal process. Maker hereby waives trial by jury and
the right to interpose any setoff or counterclaim of any nature or description
in any action brought in connection with this Promissory Note. In the event of
any default in the payment of any amount due hereunder, the outstanding
principal balance of this Promissory Note and any accrued and unpaid interest
thereon shall become immediately due and payable.
Anything herein to the contrary notwithstanding, in no event shall
interest payable under this Promissory Note exceed the maximum interest rate
permitted by law, and any interest collected hereunder that may be in excess
of such rate shall, first, be applied to the reduction of principal and,
second, be returned to Maker in the event that the principal shall have been
paid in full.
<PAGE>
If the obligation of Maker to pay any principal of or interest on this
Promissory Note becomes due on a Saturday, Sunday or legal holiday in New York
State, then such due date shall be extended to the next succeeding full
business day.
Maker hereby waives presentment for payment, protest, notice of protest,
notice of nonpayment and diligence in bringing suit.
Maker may prepay this Promissory Note in full or in part at any time
without premium or penalty. Maker shall prepay this Promissory Note on the
earlier to occur of (i) four business days after the sale of any of the
Warrant Shares (as defined in the Warrant Exercise Agreement), such prepayment
to be (x) made in full if the net proceeds of such sale ("Net Proceeds")
exceed the outstanding principal balance of and accrued interest on this
Promissory Note and (y) equal to the Net Proceeds if the Net Proceeds are less
than the then outstanding principal balance of and accrued interest on this
Promissory Note, or (ii) 60 days after the Registration Statement (as defined
in the Warrant Exercise Agreement) is declared effective by the Securities and
Exchange Commission. All prepayments received by Payee shall be applied,
first, to pay accrued and unpaid interest hereunder, and, second, to reduce
the outstanding principal balance of this Promissory Note.
Any demand or notice to be given to Maker or Payee under this Promissory
Note shall be given in the manner provided for in the Warrant Exercise
Agreement.
This Promissory Note shall be governed by and construed in accordance
with the internal laws and the State of New York, and the terms hereof may not
be changed orally.
MAKER:
/s/ Nathan Low
---------------------------
Nathan Low
-2-
PLEDGE AGREEMENT
PLEDGE AGREEMENT ("Agreement"), dated as of May 10, 1996, by and
between NATHAN LOW ("Pledgor"), and STRATASYS, INC., a Delaware corporation
("Pledgee").
R E C I T A L S
Pledgor, Pledgee and certain other holders of warrants ("Warrants")
to purchase shares of Pledgor's Common Stock, $.01 par value ("Common Stock"),
are parties to a Warrant Modification and Exercise Agreement, dated May 10,
1996 (the "Warrant Exercise Agreement"), pursuant to which Pledgor exercised
such Warrants and purchased shares of Common Stock. In partial consideration
of the sale of such shares of Common Stock, Pledgor has delivered to Pledgee a
Promissory Note in the principal amount of $1,348,000.00 (the "Promissory
Note"). Pledgor has agreed to pledge the shares of Common Stock described on
Schedule A hereto (the "Pledged Shares") as security for the payment,
performance and observance of all obligations of Pledgor (i) under the Warrant
Exercise Agreement, the Promissory Note, and this Agreement and (ii) to pay
any and all costs and expenses of collection paid or incurred by Pledgee in
connection with the enforcement or realization of Pledgee's rights in the
Pledged Collateral (as hereinafter defined in Section 1) (such obligations
being referred to herein collectively as the "Obligations").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1. Pledge by Pledgor; Deposit of Pledged Shares.
(a) To secure the due and punctual payment, performance and
observance of the Obligations, Pledgor hereby pledges, as collateral security,
and grants a security interest in, the Pledged Shares (together with all
certificates, options, rights, dividends, or distributions issued as an
addition to, in substitution or in exchange for, or on account of, any such
Pledged Shares, and all proceeds of the foregoing being referred to herein as
the "Pledged Collateral"), and all proceeds thereof and rights attributable
thereto, to Pledgee. Contemporaneously with the execution and delivery of this
Agreement, Pledgor is depositing with Pledgee the certificates representing
the Pledged Collateral, together with stock powers duly endorsed in blank for
transfer, with the signature medallion guaranteed and transfer tax stamps
affixed as necessary, receipt of which certificates and stock powers is hereby
acknowledged.
(b) If Pledgor shall become entitled to receive or shall receive, in
connection with any of the Pledged Collateral, any:
(i) stock certificate, including, but without limitation,
any certificate representing a stock dividend or in connection with any
increase or reduction of capital,
<PAGE>
reclassification, merger, consolidation, sale of assets, combination
of shares, stock split, spin-off or split-off;
(ii) option, warrant, or right, whether as an addition
to or in substitution or in exchange for any of the Pledged
Collateral, or otherwise;
(iii) dividend or distribution payable in property,
including securities issued by other than the issuer of any of the
Pledged Collateral; or
(iv) dividends or distributions of any sort;
then Pledgor will accept the same as Pledgee's agent, in trust for the benefit
of Pledgee, and the same shall be segregated from other property and funds of
Pledgor and shall forthwith be delivered to Pledgee (and in all events within
three business days following receipt by Pledgor) in the exact form received
with, as applicable, Pledgor's endorsement or stock powers duly executed in
blank and medallion guaranteed, to be held by Pledgee, subject to the terms
hereof, as part of the Pledged Collateral. The Pledgee will apply any cash
dividends or other cash payments received to pay the Obligations.
2. Representations and Warranties of Pledgor.
Pledgor represents and warrants that:
(a) It has the requisite capacity to enter into this Agreement, to
pledge the Pledged Collateral for the purposes specified in Section 1(a), and
to perform its obligations hereunder, and it does not have any disability
which would in any manner prevent or limit Pledgee from taking any action
contemplated by this Agreement.
(b) It is the legal and beneficial owner of all of the Pledged
Collateral.
(c) All of the shares of capital stock of Pledgee included in the
Pledged Collateral are owned by Pledgor of record and beneficially, free and
clear of any pledge, mortgage, hypothecation, lien, charge, encumbrance or
security interest, except for the security interest created hereby and the
security interests of Vertical Financial Inc. and Robb Matzner, which have
been fully subordinated to the security interest of Pledgee hereunder pursuant
to a Subordination Agreement of even date herewith.
(d) No authorization, approval or other action by, and no notice to
or filing with, any governmental authority or other regulatory body is
required for (i) the due execution, delivery and performance by Pledgor of
this Agreement, (ii) the grant by Pledgor, or the perfection, of the security
interest created hereby in the Pledged Collateral, or (iii) the exercise by
Pledgee of any of its rights and remedies hereunder.
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<PAGE>
(e) Upon delivery by Pledgor to Pledgee or its agent of the Pledged
Collateral, this Agreement will create a valid first lien upon, and perfected
security interest in, such Pledged Collateral subject to no prior security
interest, lien, charge or encumbrance, or agreement purporting to grant to any
third party a security interest in the property or assets of Pledgor which
would include the Pledged Collateral.
3. Covenants of Pledgor.
Pledgor hereby covenants that, until all of the Obligations have been
satisfied in full, Pledgor will:
(a) not sell, assign, exchange, or otherwise dispose of any of the
Pledged Collateral, or any interest therein or create, incur, permit or suffer
to exist any pledge, mortgage, lien, charge, encumbrance or any security
interest whatsoever in or with respect to any of the Pledged Collateral or the
proceeds thereof, other than that created hereby;
(b) at Pledgor's own expense, defend Pledgee's security interest in
and to the Pledged Collateral against the claims of any person, firm,
corporation, or other entity;
(c) deliver to Pledgee all written notices, and will promptly give
Pledgee written notice of any other notices, received by it with respect to
Pledged Collateral; and
(d) at any time, and from time to time, upon the written request of
Pledgee, execute and deliver such further documents and do such further acts
and things as Pledgee may request to effect the purposes of this Agreement,
including, without limitation, delivering to Pledgee upon the occurrence of a
Default (as defined in Section 5 hereof) irrevocable proxies with respect to
the Pledged Collateral in form satisfactory to Pledgee. Until receipt thereof,
this Agreement shall constitute a proxy of Pledgor to Pledgee or its nominee
to vote all shares of Pledged Collateral then registered in Pledgor's name
upon the occurrence of a Default.
4. Pledgor's Rights.
As long as no Default shall have occurred and be continuing, Pledgor
shall have the right, from time to time, to vote and give consents with
respect to the Pledged Collateral or any part thereof for all purposes not
inconsistent with the provisions of this Agreement or the Warrant Extension
Agreement; provided, however, that no vote shall be cast, and no consent shall
be given or action taken, which would have the effect of impairing the
position or interest of Pledgor in respect of the Pledged Collateral.
5. Default and Remedies.
(a) Pledgor's default in the payment when due of any amount
constituting a part of the Obligations or default in the performance of any of
the Obligations in any material respect and
3
<PAGE>
failure to cure such default within five days after notice thereof from the
Company shall constitute a "Default" for purposes of this Agreement.
(b) Upon the occurrence and during the continuance of a Default,
Pledgee may, without demand of performance or other demand, advertisement, or
notice of any kind (except as otherwise specified below) to or upon Pledgor or
any other person (all of which are, to the extent permitted by law, hereby
expressly waived), exercise any or all of the following rights and remedies
with respect to the Pledged Collateral:
(i) Pledgee may transfer and register in its name or in the
name of its nominee the whole or any part of the Pledged Collateral
for the purpose of exercising its rights under subsections (ii) or
(iii) below, exercise the voting rights with respect thereto, and
collect and receive all cash dividends and other distributions made
thereon.
(ii) Upon notice given to Pledgor as herein provided,
Pledgee may take ownership of Pledged Collateral having a Value (as
hereinafter defined) equal to all or any part of the Obligations. For
purposes of this Agreement, the "Value" of any Pledged Collateral
shall be equal to (x) 80% of the Current Market Price of any shares
of Common Stock constituting a part of the Pledged Collateral as
determined in accordance with Section 5(h) of the Warrants and (y)
80% of the fair market value of any other property constituting a
part of the Pledged Collateral.
(iii) Pledgee may agree to sell or otherwise dispose of and
deliver the Pledged Collateral or any part thereof or interest
therein, in one or more parcels at public or private sale or sales,
at any exchange, broker's board or at any of Pledgee's offices or
elsewhere, at such prices and on such terms (including, without
limitation, a requirement that any purchaser of all or any part of
the Pledged Collateral purchase the shares constituting the Pledged
Collateral for investment and without any intention to make a
distribution thereof) as it may deem best, for cash or on credit, or
for future delivery without assumption of any credit risk, with the
right to Pledgee or any purchaser to purchase upon any such sale the
whole or any part of the Pledged Collateral free of any right or
equity of redemption in Pledgor, which right or equity is hereby
expressly waived and released. Pledgee need not give more than five
(5) days' notice of the time and place of any public sale or of the
time after which a private sale may take place, which notice Pledgor
hereby deems reasonable. Pledgee shall not be obligated to make such
sale regardless of notice of sale having been given. Pledgee may
adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was
adjourned.
(iv) Pledgee may exercise any and all other rights or
remedies it may have at law or in equity with respect to the Pledged
Collateral, including, without limitation, its rights under the New
York Uniform Commercial Code.
4
<PAGE>
(c) In the event that the proceeds of any sale, disposition or other
realization or collection of Pledged Collateral (including, without
limitation, the value of any Pledged Collateral taken in satisfaction of all
or part of the Obligations) are insufficient to pay all amounts to which
Pledgee is legally entitled, Pledgor shall be liable for the deficiency,
together with interest thereon at the Default Rate provided in the Promissory
Note.
(d) Pledgor agrees that in any sale of any Pledged Collateral
hereunder, Pledgee is hereby authorized to comply with any limitation or
restriction in connection with such sale as it may be advised by counsel is
necessary in order to avoid any violation of applicable law, including,
without limitation, compliance with such procedures as may restrict the number
of prospective bidders and purchasers, require that such prospective bidders
and purchasers have certain qualifications, and restrict such prospective
bidders and purchasers to persons who will represent and agree that they are
purchasing for their own account for investment and not with a view to the
distribution or resale of such Pledged Collateral or in order to obtain any
required approval of the sale or of the purchasers by any governmental
regulatory authority or official, and Pledgor further agrees that such
compliance shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor shall Pledgee be
liable or accountable to Pledgor for any discount allowed by the reason of the
fact that such Pledged Collateral is sold in compliance with any such
limitation or restriction.
(e) The proceeds of any sale or other disposition by the Pledgee
(including, without limitation, the Value of any Pledged Collateral taken in
satisfaction of all or part of the Obligations) shall be applied as follows:
(i) first, to the costs and expenses incurred in connection
therewith or incidental thereto or in connection with or incidental
to the care or safekeeping of any of the Pledged Collateral or in any
way relating to the rights of Pledgee hereunder, including reasonable
attorneys' fees and legal expenses;
(ii) second, to the satisfaction of the Obligations, first,
in respect of any reasonable fees not covered by clause (i) above,
second, in respect of accrued but unpaid interest included in the
Obligations, and, third, in respect of unpaid principal included in
the Obligations;
(iii) third, to the payment of any other amounts required by
applicable law (including, without limitation, Section 9-504(1)(c) of
the Uniform Commercial Code); and
(iv) fourth, to the extent of any surplus proceeds, to the
Pledgor or such other person or persons then entitled by law to
receive the same or as a court of competent jurisdiction may direct.
(f) Pledgor hereby irrevocably appoints Pledgee as Pledgor's
attorney-in-fact and proxy, with full authority in the place and stead of
Pledgor and in the name of Pledgor or
5
<PAGE>
otherwise, from time to time in Pledgee's discretion, to take any action and
to execute any instrument which Pledgee in its sole discretion may deem
necessary or advisable to exercise its rights hereunder, including, without
limitation, to receive, indorse and collect all instruments made payable to
Pledgor representing any dividend or other distribution in respect of any
Pledged Collateral and to give full discharge for the same.
(g) If Pledgor fails to perform any agreement or obligation contained
herein, Pledgee itself may perform, or cause performance of, such agreement or
obligation, and the expenses incurred by Pledgee in connection therewith shall
be payable by Pledgor.
6. Termination
(a) This Agreement shall terminate when, and only when, there are no
Obligations of any kind outstanding in favor of Pledgee. Thereupon, all right,
title and interest in the Pledged Collateral shall revert to Pledgor or such
other person as shall be entitled to it or as a court of competent
jurisdiction shall direct, and this Agreement shall terminate. Upon
satisfaction of all of the Obligations, Pledgee shall promptly deliver the
Pledged Collateral to Pledgor or in accordance with its instructions. If
requested by Pledgor, Pledgee shall thereupon, at Pledgor's expense, execute
and file a termination statement under the Uniform Commercial Code in each
office in which any financing statement relative to the Pledged Collateral, or
any part thereof, shall have been filed.
(b) Beyond the exercise of reasonable care to assure the safe custody
of the Pledged Collateral while held hereunder, Pledgee shall have no duty or
liability to preserve rights pertaining thereto and shall be relieved of all
responsibility for the Pledged Collateral upon surrendering it or tendering
surrender of it to the Pledgor or such other person or persons then entitled
by law to receive the same or as a court of competent jurisdiction may direct.
7. Remedies Cumulative.
The remedies of the Pledgee under this Agreement shall be in addition
to all other rights and remedies it may have under the Warrant Exercise
Agreement or the Promissory Note or at law or in equity, and the exercise of
any such rights or remedies shall not preclude the simultaneous exercise by
Pledgee of any other rights or remedies available to it.
8. Miscellaneous.
(a) This Agreement may not be amended, altered, modified, terminated
or discharged orally but only in writing signed by the party against whom
enforcement of such amendment, alteration, modification, termination or
discharge is sought.
(b) No course of dealing between Pledgor and Pledgee nor any failure
on the part of Pledgee to exercise or delay in exercising any right, remedy,
power or privilege under this
6
<PAGE>
Agreement shall operate as a waiver thereof; and any exercise or partial
exercise of any right, remedy, power or privilege hereunder shall not preclude
any other or further exercise of any other right, remedy, power or privilege.
The rights and remedies provided in this Agreement are cumulative and not
exclusive of any rights provided by law, including, without limitation, the
rights and remedies of a secured party under the New York Uniform Commercial
Code.
(c) Any notice, request, demand or other communication to any party
by another party to this Agreement as provided for herein shall be given in
the manner prescribed in the Warrant Exercise Agreement.
(d) Except as specifically permitted under this Agreement, Pledgor
may assign its rights or delegate its obligations hereunder only upon the
written consent of Pledgee, and in the event of any such delegation of
Pledgor's obligations, Pledgor shall continue to remain primarily liable for
the payment and performance thereof. Pledgee may assign its rights or delegate
its obligations hereunder to any person without receiving the consent of
Pledgor, but in the event of any such delegation of Pledgee's obligations,
Pledgee shall continue to remain primarily liable for performance thereof.
This Agreement shall be binding upon, and shall inure to the benefit of, the
parties hereto and their respective heirs, administrators, executors,
successors and permitted assigns.
(e) PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE WARRANT EXERCISE
AGREEMENT OR ANY OTHER CLOSING DOCUMENT REFERRED TO THEREIN AND IN CONNECTION
WITH ANY CLAIM, COUNTERCLAIM, OFFSET OR DEFENSE ARISING IN CONNECTION WITH
SUCH ACTION OR PROCEEDING WHETHER ARISING UNDER ANY STATUTE (INCLUDING ANY
FEDERAL OR STATE CONSTITUTION) OR UNDER THE LAW OF CONTRACT, TORT OR OTHERWISE
AND INCLUDING WITHOUT LIMITATION, ANY CHALLENGE TO THE LEGALITY, VALIDITY,
BINDING EFFECT OR ENFORCEABILITY OF THIS SECTION, OR THIS AGREEMENT, THE
WARRANT EXERCISE AGREEMENT OR ANY CLOSING DOCUMENT REFERRED TO THEREIN.
FURTHER, PLEDGOR HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF PLEDGEE
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT PLEDGEE WOULD NOT, IN THE EVENT
OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION. FINALLY, PLEDGOR ACKNOWLEDGES THAT PLEDGEE HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
(f) PLEDGOR AGREES TO THE PERSONAL JURISDICTION OF ANY STATE OR
FEDERAL COURT WITHIN THE STATE OF NEW YORK (NEW YORK COUNTY) AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL SERVICE
OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECT TO
7
<PAGE>
PLEDGOR AT THE ADDRESS INDICATED AT THE END OF THIS AGREEMENT AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE
BEEN DEPOSITED IN THE UNITED STATES MAIL, POSTAGE PREPAID. PLEDGOR WAIVES, AT
THE OPTION OF THE PLEDGEE, ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING CONTAINED IN THIS PARAGRAPH SHALL AFFECT THE RIGHT OF THE
PLEDGEE TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT
ITS RIGHT TO BRING ACTION OR PROCEEDING AGAINST PLEDGOR OR ANY OF ITS PROPERTY
IN THE COURTS OF ANY OTHER JURISDICTION.
(g) PLEDGOR AGREES THAT ANY ACTION COMMENCED BY PLEDGOR ASSERTING ANY
CLAIM OR COUNTERCLAIM ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OF THE OBLIGATIONS OR ANY OTHER AGREEMENT OR INSTRUMENT RELATING TO ANY OR
ALL OF THE OBLIGATIONS SHALL BE BROUGHT IN THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND THAT SUCH COURTS SHALL HAVE
EXCLUSIVE JURISDICTION WITH RESPECT TO ANY SUCH ACTIONS.
(h) The parties hereto agree to perform such other acts and to
execute and deliver such other agreements, documents, instruments,
conveyances, transfers and assurances as are necessary or advisable for the
full and complete performance and consummation of the transactions
contemplated by this Agreement and the perfection and preservation of the
security interest created by this Agreement.
(i) This Agreement is made under, and shall be governed by and
construed in accordance with, the laws of the State of New York.
(j) No provision of this Agreement that is deemed unenforceable shall
in any way invalidate any other provision hereof, each of which shall remain
in full force and effect.
(k) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
8
<PAGE>
(l) The captions used herein are inserted for reference purposes only
and shall not affect the interpretation or meaning of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Pledge Agreement as of the date first above written.
PLEDGOR:
/s/ Nathan Low
-------------------------------
Nathan Low
ADDRESS:
Nathan Low
c/o Sunrise Financial Group
135 East 57th Street, 11th Floor
New York, NY 10022
STRATASYS, INC.
By: /s/ S. Scott Crump
--------------------------
S. Scott Crump, Chairman
9
<PAGE>
Schedule A to
Pledge Agreement
PLEDGED SHARES
Pledgor No. of Shares Certificate No.
Nathan Low 100,000 S 627
10
PLEDGE AGREEMENT
PLEDGE AGREEMENT ("Agreement"), dated as of May 10, 1996, by and
between Nathan Low, c/o Sunrise Financial Group, 135 East 57th Street, 11th
Floor, New York, New York 10021 ("Pledgor"), and Vertical Financial Inc., a
corporation organized under the laws of the British Virgin Islands, c/o Orida
Capital International Ltd., 221 East 61st Street, New York, New York 10021
("Vertical") and Robb Matzner, having an address at 157 East 74th Street, New
York, New York 10021 ("Matzner", and together with Vertical, the "Pledgees,"
and each individually, the "Pledgee".)
R E C I T A L S
Pledgor and Pledgees are parties to a Warrant Purchase and
Sale Agreement, of even date herewith (the "Warrant Purchase Agreement"),
pursuant to which Pledgor purchased from Matzner warrants ("Matzner Warrants")
to purchase 62,500 shares of Common Stock, $.01 par value ("Common Stock"), of
Stratasys, Inc. (the "Company") at $8 per share and from Vertical warrants
(the "Vertical Warrants;" and together with the Matzner Warrants, the
"Purchased Warrants") to purchase 87,500 shares of Common Stock at $8 per
share. In consideration of the sale of such Purchased Warrants, Pledgor has
agreed to pay to Pledgees their respective purchase prices for the Purchased
Warrants on a deferred basis in accordance with Section 1.2 of the Warrant
Purchase Agreement. Pledgor also owns warrants to purchase 50,000 shares of
Common Stock at $3 per share (the "Additional Warrants;" and together with the
Purchased Warrants, the "Pledged Warrants"). Pledgor has agreed to pledge the
Pledged Collateral
<PAGE>
(as hereinafter defined in Section 1) as security for the payment, performance
and observance of all obligations of Pledgor (i) under the Warrant Purchase
Agreement and this Agreement and (ii) to pay any and all costs and expenses
(including without limitation attorneys fees and brokers fees) of collection
paid or incurred by Pledgees, or any one of them, in connection with the
enforcement or realization of Pledgees' respective rights in the Pledged
Collateral (as hereinafter defined in Section 1) (such obligations being
referred to herein collectively as the "Obligations"). The Pledged Collateral
shall be held in accordance with a certain escrow agreement (the "Escrow
Agreement") dated the date hereof by and among Pledgor, Pledgees, the Company
and Bachner, Tally, Polevoy & Misher, LLP, as escrow agent (the "Escrow
Agent").
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Pledge. In order to secure the Pledgor's Obligations,
Pledgor hereby pledges to each Pledgee, and grants to each Pledgee a security
interest in his or its respective Pledged Warrants, together with all cash,
securities, dividends and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such Pledged Warrants, including all of the shares of Common
Stock issuable upon exercise of such Pledged Warrants (the "Pledged Shares")
(all of the foregoing being hereinafter collectively referred to as the
"Pledged Collateral"), provided that in the event that the Pledgor exercises
the Pledged Warrants on the date hereof, each Pledgee shall be deemed to have
released its security interest in the Pledged Warrants (but not in the
remainder of the Pledged Collateral).
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<PAGE>
Notwithstanding anything to the contrary contained in this Agreement, if the
full exercise price for the Additional Warrants has been paid and if the
Company has agreed to release from escrow the shares of Common Stock received
upon exercise of the Additional Warrants, then such underlying shares shall
not be part of the Pledged Collateral or otherwise subject to this Agreement.
2. Delivery of Pledged Collateral. Contemporaneously with
the execution and delivery hereof, the Pledgor hereby is delivering to the
Escrow Agent the certificates representing the Pledged Warrants, accompanied
by warrant assignment forms duly executed in blank (the forms of which are
attached hereto as Exhibits C-1, C- 2, C-3 and C-4) and stock powers duly
executed in blank and medallion signature guaranteed relating to all of the
Pledged Shares, provided that in the event that the Pledgor exercises the
Pledged Warrants on the date hereof, instead of delivering the Pledged
Warrants and assignment forms, each Pledgee shall instruct the Company to
deliver to the Escrow Agent certificates representing 50% of the Pledged
Shares (100,000 shares) in the following denominations: 31,253, 143,747,
10,417 and 14,583. The Pledgees acknowledge the remaining 50% of the Pledged
Shares (the "Company Shares") will be subject to a pledge agreement of even
date herewith (the "Prior Pledge Agreement") between the Pledgor and the
Company in connection with that certain Warrant Modification and Exercise
Agreement dated of even date herewith by and among the Company, Vertical,
Matzner, Pledgor, Sunrise Securities, Corp., Floy L. Shaeffer and Donald
Heimstaedt (the "Stratasys Agreement"). Pledgor agrees, and shall direct the
Company that, if the Pledgor's obligations to the Company have been satisfied
in full, then the Company shall deliver to the Escrow Agent, the Company
Shares, any
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<PAGE>
related items (including without limitation, executed stock powers) and
proceeds thereof, if any.
3. Representations and Warranties. To the extent that
Pledgor has received good title to the Purchased Warrants from Pledgees under
the Warrant Purchase Agreement free and clear of any and all liens, claims and
encumbrances, the Pledgor represents and warrants that: (a) he is the lawful
owner of the Pledged Warrants and, upon exercise thereof, will be the lawful
owner of the Pledged Shares; (b) he has the full right, power and capacity to
assign, pledge and hypothecate the Pledged Collateral to the Pledgees; (c) his
rights in the Pledged Collateral are free and clear of any and all liens,
claims or encumbrances (except for this Agreement and the Prior Pledge
Agreement); (d) he will warrant, defend and protect the Pledged Collateral
against any and all claims or demands of all persons, firms or corporations
claiming by, through or under Pledgor, except further claims or demands of the
Company under the Prior Pledge Agreement; and (e) he will not further encumber
the Pledged Collateral or create or permit to exist any lien on the Pledged
Collateral (except pursuant to this Agreement and the Prior Pledge Agreement)
without the prior written consent of the Pledgees.
4. Voting Rights, Dividends, etc. Until an Event of Default
(as defined herein) shall have occurred and is continuing, the Pledgor shall
be entitled, in the event he exercises the Pledged Warrants, to vote the
Pledged Shares and to give consents, waivers and ratifications with respect to
the Pledged Shares. Whether or not an Event of Default occurs, subject to the
Prior Pledge Agreement, all cash, securities, dividends or other property
distributed in respect of or in exchange for the Pledged
-4-
<PAGE>
Warrants or the Pledged Shares shall be subject to the pledge and security
interest created hereby.
5. Events of Default. An "Event of Default" shall exist if
one or more of the following events (herein collectively called "Events of
Default"), shall occur and be continuing: Any default shall occur in the
performance (i) of any of the obligations by Pledgor to pay the Purchase Price
in accordance with the Warrant Purchase Agreement (including, but not limited
to, Sections 1.2 and 1.5(a) thereof), (ii) of any covenants or agreements of
the Pledgor contained herein, or the Warrant Purchase Agreement which default
is not remedied within five (5) days after the Pledgor receives written notice
thereof; (iii) if any representation by Pledgor herein or in the Warrant
Purchase Agreement is untrue or incorrect in any material respect or (iv) if a
default occurs under the Stratasys Agreement or the Prior Pledge Agreement.
6. Remedies Upon Default. If an Event of Default shall have
occurred and be continuing, the Pledgees, or either one of them, may exercise,
with respect to their respective portions of the Pledged Collateral, all of
the rights and remedies of a secured party on default under the Uniform
Commercial Code in effect in the State of New York at the time, and the
Pledgees may also, without notice, except as specified below, acquire the
Pledged Collateral, sell the Pledged Collateral, or any part thereof, at
public or private sale or at any broker's board or on any securities exchange,
through any broker, for cash, upon credit or for future delivery, and at such
price or prices and upon such other terms as shall be commercially reasonable.
The Pledgor agrees that, to the extent notice of sale shall be required by
law, at least 10 business
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<PAGE>
days' notice to him of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notice.
7. Application of Proceeds of Sale. The proceeds of the
sale of the Pledged Collateral sold pursuant to paragraph 7 hereof shall be
applied by the Pledgees as follows:
First, to the Company in accordance with the provisions of
Section 3 of the Stratasys Agreement;
Second, to the payment of any and all reasonable and
necessary costs and expenses incurred by the Pledgees in connection with such
sale;
Third, to the payment of the Pledgor's then outstanding
Obligations; and
Fourth, the balance (if any) of such proceeds shall be paid
to the Pledgor or as a court of competent jurisdiction may otherwise direct.
8. Termination. This Pledge Agreement shall terminate (the
"Termination Date") upon the earlier of (i) termination by the Pledgees of the
Warrant Purchase Agreement in accordance with Section 1.6 thereof; or (ii)
upon satisfaction in full of Pledgor's Obligations, at which time the Pledgees
shall reassign and deliver to the Pledgor the Pledged Collateral as shall not
have been sold or otherwise applied by the Pledgees pursuant to the terms
hereof, together with appropriate instruments of reassignment and release.
9. Notices. All communications and notices hereunder
shall be in writing and shall be given to the parties by overnight express
mail service, by hand or by fax, provided a confirmation is received, at the
addresses first above written or to such
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<PAGE>
other address as may after be designated in writing by either party hereto.
Each notice shall be effective upon receipt or refusal.
10. Further Assurances. The parties agree to promptly
execute and deliver such further instruments and documents, and to take such
further action, as may be necessary and proper in order to effectuate the
purposes of this Agreement, including, without limitation, the execution and
delivery of financing, (including continuation and termination) statements
pursuant to the Uniform Commercial Code for filing in any applicable
jurisdiction. Pledgor hereby appoints each of the Pledgees individually, to
act as its attorney in fact to execute and deliver any instruments or
documents (including without limitations UCCs) to effectuate the purposes of
this Agreement and further Pledgor authorizes the Pledgees to file any UCC
financing statements without Pledgor's signature in such jurisdictions as
Pledgees deem advisable.
11. Binding Agreement; Assignment. This Agreement, and the
terms, covenants and conditions hereof, shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns and
personal representatives, except that the Pledgor shall not be permitted to
assign this Agreement or any interest herein or in the Pledged Collateral, or
any part thereof, or otherwise pledge, encumber or grant any option with
respect to the Pledged Collateral, or any part thereof, or any cash or
property held by the Company as Pledged Collateral under this Agreement.
12. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed entirely within
such state, without regard to the conflict of laws, rules thereof. Each of the
parties hereby agrees to the
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<PAGE>
personal jurisdiction of any state or federal court within the State of New
York (New York County) and waives personal service of any and all process upon
it, and consents that all service of process may be made by registered mail
direct to pledgor at the address indicated at the beginning of this agreement
and service so made shall be deemed to be completed five (5) days after the
same shall have been deposited in the United States mail, postage prepaid.
Vertical waives, at the option of the Pledgor, any objection based on forum
non conveniens and any objection to venue of any action instituted hereunder
and consents to the granting of such legal or equitable relief as is deemed
appropriate by the court. Nothing contained in this paragraph shall affect the
right of any party to serve legal process in any other manner permitted by
law.
13. Headings. Paragraph headings used herein are for
convenience only and are not to affect the construction of, or be taken into
consideration in interpreting, this Pledge Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement, or caused this Agreement to be duly executed, as of the day
and year first above written.
/s/ Nathan Low
------------------------------------
Nathan Low, Pledgor
/s/ Robert Matzner
------------------------------------
Robert Matzner, Pledgee
VERTICAL FINANCIAL INC., Pledgee
/s/ Jacob Agam
------------------------------------
By: Jacob Agam
Title: President
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ESCROW AGREEMENT
This Agreement, dated May 10, 1996, by and among NATHAN LOW,
c/o Sunrise Financial Group, 135 East 57th Street, 11th Floor, New York, New
York 10021 ("Buyer"), VERTICAL FINANCIAL INC., a corporation organized under
the laws of the British Virgin Islands, c/o Orida Capital International Ltd.,
221 East 61st Street, New York, New York 10021 ("Vertical"), ROBB MATZNER,
having an address at 157 East 74th Street, New York, New York 10021
("Matzner," and together with Vertical, the "Sellers"), BACHNER, TALLY,
POLEVOY & MISHER LLP, as escrow agent (the "Escrow Agent") and STRATASYS,
INC., a Delaware corporation (the "Company").
R E C I T A L S
Buyer and Sellers are parties to a Warrant Purchase and Sale
Agreement, dated the date hereof (the "Warrant Purchase Agreement"), pursuant
to which Buyer purchased from Matzner warrants ("Matzner Warrants") to
purchase 62,500 shares of Common Stock, $.01 par value ("Common Stock"), of
the Company and from Vertical warrants (the "Vertical Warrants") to purchase
87,500 shares of Common Stock. In consideration of the sale of such Warrants,
Buyer has agreed to pay to Sellers their respective purchase prices for such
Warrants on a deferred basis in accordance with Section 1.2 of the Warrant
Purchase Agreement. In order to secure the Buyer's payment obligations under
the Warrant Purchase Agreement, Buyer and Sellers entered into a certain
pledge agreement dated of even date herewith (the "Pledge Agreement") pursuant
to which Buyer has pledged to the Sellers
<PAGE>
and granted to them security interests in the Matzner Warrants, the Vertical
Warrants and other warrants owned by Buyer to purchase 50,000 shares of Common
Stock at $3 per share (the "Low Warrants," and together with the Matzner
Warrants and the Vertical Warrants, the "Warrants"), together with all cash,
securities, dividends and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the pledged Warrants, including all of the shares of Common
Stock issuable upon exercise of the Warrants (the "Pledged Shares"), subject
to certain senior liens as described herein (all of the foregoing being
hereinafter collectively referred to as the "Pledged Collateral"). Pursuant to
a certain pledge agreement between Buyer and the Company (the "Stratasys
Pledge Agreement"), 50% of the Pledged Shares (together with all certificates,
options, rights, dividends, or distributions issued as an addition to, in
substitution or in exchange for, or an account of, any such Pledged Shares)
are subject to the Stratasys Pledge Agreement. The security interests of the
Sellers with respect to the Pledged Shares are subordinate to the security
interest of the Company in the Pledged Shares in accordance with a certain
subordination agreement dated of even date herewith by and among the Company,
Vertical and Matzner (the "Subordination Agreement"). In accordance with the
Warrant Modification and Exercise Agreement dated the date hereof among the
Company, Buyer, Sellers, Sunrise, Floy L. Shaeffer and Donald Heimstaedt (the
"Stratasys Agreement"), all of the Pledged Shares other than the Stratasys
Pledged Shares (defined below) shall upon issuance be deposited with the
Escrow Agent and the Stratasys Pledged Shares (or
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<PAGE>
the balance thereof) shall be deposited with the Escrow Agent only after the
Buyer's obligations to the Company under the Stratasys Agreement have been
satisfied in full and shall, until such time, be held by the Company.
The parties, intending to be legally bound, agree as follows:
1. Appointment of Escrow Agent. Buyer and Sellers hereby
appoint Bachner, Tally, Polevoy & Misher LLP as Escrow Agent. The Escrow
Agent, by its execution and delivery of this Agreement hereby accepts its
appointment as Escrow Agent to hold the Escrow Securities (as defined in
Section 2) in escrow, upon the terms, provisions and conditions hereof.
2. Establishment of Escrow
(a) Upon the execution of the Warrant Purchase
Agreement, Buyer shall deliver to the Escrow Agent either (i), to the extent
Buyer is not contemporaneously therewith exercising the Warrants, certificates
representing the Warrants accompanied by warrant assignment forms duly
executed in blank and stock powers, duly executed in blank and signature
guaranteed (the "Stock Powers") with respect to the Pledged Shares or (ii) to
the extent Buyer is, contemporaneously therewith exercising the Warrants,
certificates representing 50% of the Pledged Shares issued upon exercise of
the Warrants and Stock Powers with respect to all of the Pledged Shares,
including without limitation the 50% delivered to the Escrow Agent; the
remaining 50% of the Pledged Shares (together with all certificates, options,
rights, dividends, or distributions issued as an addition to, in substitution
or in exchange for, or an account of, any such Pledged Shares, the "Stratasys
Pledged Shares") shall be
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<PAGE>
held by the Company subject to the Stratasys Pledge Agreement and the Stratasys
Agreement.
(b) Upon release of the certificates representing
the Stratasys Pledged Shares (or the balance thereof) under the Stratasys
Agreement and release of any other Pledged Collateral under the Stratasys
Pledge Agreement, Buyer hereby directs the Company and the Company hereby
agrees to forthwith deliver the Stratasys Pledged Shares (or the balance
thereof) and any other Pledged Collateral to the Escrow Agent.
(c) All property delivered to the Escrow Agent
pursuant hereto, whether Warrant certificates, certificates with respect to
the Pledged Shares, warrant assignments, Stock Powers, the Stratasys Pledged
Shares or any other Pledged Collateral under the Stratasys Pledge Agreement is
hereinafter referred to as the "Escrow Securities." The Escrow Agent agrees to
hold the Escrow Securities subject to, and in accordance with, the terms and
provisions of this Agreement. The Escrow Agent shall hold the Escrow
Securities separate and apart from its other property and shall keep an
accurate record of all transactions with respect thereto.
(d) Notwithstanding anything to the contrary
contained in this Agreement, if the full exercise price for the Low Warrants
has been paid and if the Company has agreed to release from escrow the shares
of Common Stock received upon exercise of the Low Warrants, then such
underlying shares shall not be part of the Escrow Securities or otherwise
subject to this Agreement.
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<PAGE>
3. Release. (a) Upon receipt by the Escrow Agent from Buyer
of one or more certified checks or wire transfers in the aggregate amount of
$900,000, the Escrow Agent shall contemporaneously deliver (i) any Escrow
Securities it is then holding to the Buyer, (who shall deliver such securities
to Sunrise Securities, Corp. ("Sunrise") in accordance with the Stratasys
Agreement) and (ii) distribute the $900,000 by certified check or wire
transfer $525,000 to Vertical and $375,000 to Matzner.
(b) If (i) the Escrow Agent receives a written
notice from the Sellers stating that an event of a default by Buyer has
occurred under the Pledge Agreement and there is no cure period provided
therefor in the Pledge Agreement or (ii) the Escrow Agent receives written
instruction from the Sellers to send to the Buyer a written notice that a
default has occurred under the Pledge Agreement which is subject to a cure
period (which default must be described by Sellers in their notice to the
Escrow Agent), then the Escrow Agent shall immediately send written notice of
such default to the Buyer and the Buyer shall have five (5) days from the date
of receipt or refusal of such notice (the "Cure/Notice Period") to cure such
default or to deliver to the Escrow Agent a written notice asserting a bona
fide dispute as to the existence of such default and if the Escrow Agent has
not received such dispute notice from Buyer prior to the end of said
Cure/Notice Period, if applicable, then: (i) if the obligations of Buyer to
the Company under the Stratasys Pledge Agreement have been paid in full to the
Company, the Escrow Securities shall be promptly released to Sellers for
disposition in accordance with the Pledge Agreement; or (ii) if the obliga-
-5-
<PAGE>
tions of Buyer to the Company under the Stratasys Pledge Agreement have not
been paid in full to the Company, (a) the Escrow Securities shall be promptly
released by the Escrow Agent for deposit into an account established in
Sellers' names at a broker-dealer of Sellers' direction for sale in accordance
with Sellers' instructions in accordance with the Pledge Agreement, (b) Escrow
Agent shall deliver to such broker dealer Sellers' irrevocable instruction
letters, copies of which are appended here to as Exhibit A, and (c) the
proceeds of such sale shall be deposited with the Escrow Agent for disposition
in accordance with the Pledge Agreement, provided that the proceeds from any
such sale shall first be paid to the Company. The Escrow Agent shall promptly
send notice to Buyer of its release of the Escrow Securities. If the Escrow
Agent receives a dispute notice from Buyer within the Cure/Notice Period, then
the Escrow Securities shall not be released in accordance with (i) and (ii)
above until the dispute is resolved by the parties or by a court of competent
jurisdiction. Buyer agrees that any notice of default sent by the Escrow Agent
in accordance with the Cure/Notice Period provided for in this section shall
fully satisfy those provisions of Section 5 of the Pledge Agreement that Buyer
receive notice and an opportunity to cure with respect to specific defaults.
(c) If the Buyer has not exercised all of the
Warrants contemporaneously with the execution and delivery hereof, then, upon
written direction from the Buyer with evidence that Buyer has sent a copy
thereof to Sellers, the Escrow Agent shall release the Warrant Certificates to
the Company and the Company
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<PAGE>
shall deliver to the Escrow Agent sufficient certificates so that the Escrow
Agent shall be holding certificates representing 50% in the aggregate of the
Pledged Shares.
4. Joint Instructions. Notwithstanding any other provision
of this Agreement, if at any time the Escrow Agent or the Company shall
receive from the Buyer and the Sellers (prior to being directed to take action
by a court), joint written instructions as to the delivery of the Escrow
Securities, the Escrow Agent shall deliver the Escrow Securities in accordance
with such joint written instructions.
5. Matters Regarding the Escrow Agent. It is understood
and agreed by the parties to this Agreement as follows:
(a) The Escrow Agent is not and shall not be deemed
to be a trustee for any party for any purpose and is merely acting as a
depository and in a ministerial capacity hereunder with the limited duties
herein prescribed.
(b) The Escrow Agent does not have and shall not
be deemed to have any responsibility in respect of any instruction,
certificate or notice delivered to it or of the Escrow Securities other than
faithfully to carry out the obligations undertaken in this Agreement and to
follow the directions in such instruction or notice provided in accordance
with the terms hereof.
(c) The Escrow Agent is not and shall not be deemed
to be liable for any action taken or omitted by it in good faith and may rely
upon, and act in accordance with, the advice of its counsel without liability
on its part for any action taken or omitted in accordance with such advice. In
any event, its liability hereunder
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<PAGE>
shall be limited to liability for gross negligence, willful misconduct or bad
faith on its part.
(d) The Escrow Agent may conclusively rely upon
and act in accordance with any certificate, instruction, notice, letter,
telegram, cablegram or other written instrument believed by it to be genuine
and to have been signed by the proper party or parties.
(e) Sellers shall pay to the Escrow Agent upon
release of the Escrow Securities a fee in the amount of $2,000. The Escrow
Agent shall not be entitled to any other fees or expenses in connection with
its duties hereunder unless there is a dispute with respect to the terms and
provisions hereof in which event, (i) if such dispute is resolved by a court
of competent jurisdiction, then the Escrow Agent's reasonable fees with
respect thereto (including attorneys fees) shall be born as directed by such
court, (ii) if such dispute is resolved by the parties, then such fees and
expenses shall be born as the parties may agree or (iii) if there is no such
direction or agreement then such fees and expenses shall be born by Vertical,
Matzner and Buyer. The Sellers hereby save harmless, indemnify and defend the
Escrow Agent for, from and against any loss, damage, liability, judgment, cost
and expense whatsoever, including counsel fees, suffered or incurred by it by
reason of, or on account of, any misrepresentation made to it or its status or
activities as Escrow Agent under this Agreement except for any loss, damage,
liability, judgment, cost or expense resulting from gross negligence, willful
misconduct or bad faith on the part of the Escrow Agent. The obligation of the
Escrow Agent to deliver the Escrow
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<PAGE>
Securities to either Buyer or the Sellers, as the case may be, shall be
subject to the prior satisfaction upon demand from the Escrow Agent, of the
Sellers' obligations to so save harmless, indemnify and defend the Escrow
Agent and to reimburse the Escrow Agent or otherwise pay its fees and expenses
hereunder.
(f) The Escrow Agent shall not, by act, delay,
omission or otherwise, be deemed to have waived any right or remedy it may
have either under this Agreement or generally, unless such waiver be in
writing, and no waiver shall be valid unless it is in writing, signed by the
Escrow Agent, and only to the extent expressly therein set forth. A waiver by
the Escrow Agent under the term of this Agreement shall not be construed as a
bar to, or waiver of the same or any other such right or remedy which it would
otherwise have on any other occasion.
(g) The Escrow Agent may resign as such hereunder
by giving 10 days prior written notice thereof to Sellers and Buyer. Within
five (5) days after receipt of such notice, Sellers and Buyer shall furnish to
the Escrow Agent written instructions for the release of the Escrow Securities
to a substitute Escrow Agent chosen by Sellers and Buyer. Such substitute
Escrow Agent shall thereafter hold any Escrow Securities and otherwise act
hereunder as if it were the Escrow Agent originally named herein. The Escrow
Agent's duties and responsibilities hereunder shall terminate upon the release
of all Escrow Securities then held in escrow according to such written
instruction or upon such delivery as provided in Section 3(a). This
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<PAGE>
Agreement shall not otherwise be assignable by the Escrow Agent without the
prior written consent of the Sellers and Buyer.
6. Notices. Each notice, instruction or other certificate
required or permitted by the terms hereof shall be in writing and shall be
communicated by personal delivery, fax or registered or certified mail, return
receipt requested, to the parties hereto at the addresses set forth below, or
at such other address as any of them may designate by notice to each of the
others:
(i) If to the Buyer, to the address set forth above, or if by fax, to:
(212) 421-5924.
(ii) If to Vertical, to the address set forth above, or if by fax to:
(212) 754-4044, c/o Orida Capital International, Ltd.
(iii) If to Matzner, to the address set forth above, or if by fax, to
(212) 262-6553
with a copy to:
Samuel Ottensoser, Esq.
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
Fax: (212) 702-5797
(iv) If to the Escrow Agent, to:
Bachner, Tally, Polevoy, & Misher LLP
380 Madison Avenue
New York, NY 10017
Attention: Michael D. Karsch, Esq.
Fax: (212) 682-5729
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<PAGE>
(v) If to the Company, to
Stratasys, Inc.
14950 Martin Drive
Eden Prairie, MN 55344
Attention: Chairman
Fax:
with a copy to:
Eric Honick, Esq.
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158
Fax: (212) 949-7052
All notices, instructions or certificates given hereunder shall be
effective upon receipt or refusal.
7. Miscellaneous. (a) This Agreement may not be modified,
altered or amended in any material respect or cancelled or terminated except
with the prior written consent of the Buyer and Sellers.
(b) This Agreement shall be governed by and construed in
accordance with the laws of New York and shall be binding upon and inure to
the benefit of all parties hereto and their respective successors in interest
and assigns.
(c) This Agreement may be executed in several counterparts,
which taken together shall constitute a single instrument.
(d) This Agreement shall terminate upon the release of the
Escrow Securities in accordance with the terms and provisions hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed by their duly authorized officers on the day and year
first above written.
VERTICAL FINANCIAL INC. /s/ Nathan Low
------------------------------
Nathan Low
By:/s/ Jacob Agam
---------------------------
STRATASYS, INC. /s/ Rob Matzner
------------------------------
Rob Matzner
By:/s/ S. Scott Crump
------------------------------
BACHNER, TALLY, POLEVOY &
MISHER LLP
By:/s/ Bachner, Tally, Polevoy & Misher LLP
----------------------------------------
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