<PAGE>
As filed with the Securities and Exchange Commission on _______________________
Registration No. 33-____________________
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
STRATASYS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 363658792
- ------------------------------- ----------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
14950 Martin Drive
Eden Prairie, Minnesota 55344-2020
(612) 937-3000
- --------------------------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including Area
Code, of Registrant's Principal Executive Offices)
S. Scott Crump
President
Stratasys, Inc.
14950 Martin Drive
Eden Prairie, Minnesota 55344-2020
(612) 937-3000
- --------------------------------------------------------------------------------
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
Copies to:
Jack Becker, Esq.
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158
Tel: (212) 687-3860 Fax: (212) 949-7052
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check this box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Each Maximum Maximum
Class of Amount Offering Aggregate Amount of
Securities to to be Price Offering Registration
be Registered Registered Per Share(1) Price (1) Fee
- ------------- ---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Common Stock, 400,000 (2) [$18.00] (3) [$7,200,000] [$2,482.76]
$.01 par value
- ----------------------------------------------------------------------------------------------------------
Total Registration Fee....................................................................[$2,482.76]
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 promulgated under the Securities Act of 1933, as
amended.
(2) Represents 400,000 shares of outstanding Common Stock held by certain
Selling Stockholders.
(3) The closing bid price of the Common Stock of the Registrant on May 17,
1996, on the NASDAQ SmallCap Market was $18.00 per share.
--------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION DATED May 21, 1996
PROSPECTUS
STRATASYS, INC.
400,000 Shares of Common Stock
This Prospectus pertains to 400,000 shares (the "Shares") of common
stock, $.01 par value per share (the "Common Stock"), of Stratasys, Inc., a
Delaware corporation (the "Company"), that may be sold by the Selling
Stockholders named herein (the "Selling Stockholders").
The Shares offered hereby were issued to the Selling Stockholders upon
the exercise of certain warrants issued by the Company (the "Warrants"). The
Warrants were originally issued to Vertical Financial, Inc. ("Vertical") as
partial consideration for consulting services rendered by Vertical. Vertical
then sold or transferred Warrants to purchase 262,500 of the Shares to the other
Selling Stockholders. See "SELLING STOCKHOLDERS." The Company will not directly
receive any proceeds from the sale of the Shares by the Selling Stockholders,
but the Selling Stockholders have agreed to apply such proceeds to pay certain
obligations to the Company to the extent that such obligations are then
outstanding. See "USE OF PROCEEDS." The registration of the Shares offered
hereby is being effected in connection with registration rights granted by the
Company pursuant to the terms of the Warrants. In accordance with the terms of
such rights, the Company will bear the expenses of such registration, which are
estimated at $20,000, except that the Selling Stockholders will bear the cost of
all brokerage commissions and discounts incurred in connection with the sale of
their portion of the Shares and their respective legal expenses, and certain
Selling Stockholders will bear one-half of the cost of registration up to
$7,500.00.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
Commencing on the effective date of this Prospectus, the Shares may be
sold, from time to time, by the Selling Stockholders directly to purchasers or,
alternatively, may be offered through agents, brokers, dealers or underwriters,
who may receive compensation in the form of commissions or discounts from the
Selling Stockholders or purchasers of the Shares. Sales of the Shares may be
made on The Pacific Stock Exchange Incorporated (the "PSE"), on the Nasdaq
SmallCap Market ("NASDAQ"), in privately negotiated transactions or otherwise,
and such sales may be made at the market price prevailing at the time of sale, a
price related to such prevailing market price or a negotiated price.
Any brokers, dealers or agents that participate in the distribution of
the Shares may be deemed to be underwriters under Section 2(11) of the
Securities Act of 1933, as amended (the "Securities Act"), and any commissions
or discounts received by them on the resale of such Shares may be deemed to be
underwriting compensation under the Securities Act. The sale of the Shares by
the Selling Stockholders is subject to the prospectus delivery and other
requirements of the Securities Act. See "PLAN OF DISTRIBUTION."
The date of this Prospectus is May , 1996.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 6.
No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus and, if given or made, such other information and
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, such securities in any circumstances in which such offer or
solicitation is unlawful.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at Seven
World Trade Center, New York, New York 10048, and at Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661. Copies of such material may be
obtained, at prescribed rates, by writing to the Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, copies of
such reports and other information concerning the Company may be inspected and
copied at the PSE, 301 Pine Street, San Francisco, California 94104.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act with respect to
the shares of Common Stock offered hereby. This Prospectus does not contain all
the information set forth in the Registration Statement and the exhibits
thereto, as permitted by the rules and regulations of the Commission. For
further information with respect to the Company and the Common Stock, reference
is hereby made to such Registration Statement and the exhibits thereto or
incorporated therein by reference. The Registration Statement, including such
exhibits, may be inspected without charge at the public reference facilities
maintained by the Commission and at the Commission's regional offices at the
addresses stated above. Copies of these documents may be obtained, at prescribed
rates, by writing to the Commission's Public Reference Section at its office set
forth above.
-2-
<PAGE>
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission are incorporated into
this Prospectus by reference:
(1) The Company's Annual Report on Form 10-KSB for the year
ended December 31, 1995.
(2) The Company's Definitive Proxy Statement dated April 19,
1996.
(3) The Company's Quarterly Report on form 10-QSB dated for
the quarter ended March 31, 1996.
(4) The description of the Company's Common Stock contained
in the Company's registration statement on Form 8A,
dated October 20, 1994, under Section 12 of the
Securities Exchange Act of 1934, as amended.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company furnishes its stockholders with annual reports which
contain financial statements audited by its independent certified public
accounts and such other interim reports containing unaudited financial
information as it deems appropriate.
The Company will provide without charge to each person who receives
this Prospectus, upon written request, a copy of any information that is
incorporated by reference in the Prospectus (not including exhibits to the
information that is incorporated by reference unless the exhibits are themselves
specifically incorporated by reference). Such requests should be directed to the
following address:
STRATASYS, INC.
14950 Martin Drive
Eden Prairie, Minnesota 55344-2020
Attention: Director of Finance
-3-
<PAGE>
THE COMPANY
The Company develops, manufactures and markets a family of rapid
prototyping devices that enable engineers and designers to create physical
models, tooling and prototypes out of plastic and other materials directly from
a computer aided design ("CAD") workstation. In many industries, the models and
prototypes required in product development are produced laboriously by
hand-sculpting or machining, a traditional process that can take days or weeks.
The Company's computerized modeling systems use its proprietary technology to
make models and prototypes more directly from a designer's three-dimensional CAD
in a matter of hours.
The Company believes that its patented fused deposition modeling
("FDM(R)") technology and new Genisys(TM) technology are the only rapid
prototyping systems commercially available that can produce parts from plastic
without relying on lasers. This affords the Company a number of significant
advantages over other commercially available three-dimensional rapid prototyping
technologies, which primarily rely on lasers to create models. Such benefits
include the ability to use the device in an office environment due to the
absence of hazardous emissions, the need for relatively little set up of the
system for a particular project, the availability of a variety of modeling
materials and the lack of any need for costly replacement lasers and laser
parts. The systems can also run virtually unattended, producing models while
designers perform other tasks.
The Company has been developing and improving its line of rapid
prototyping products since its inception in 1989. Since that time, the Company
has developed and sold the 3D Modeler, which was the Company's initial product,
a smaller benchtop version of the 3D Modeler called the FDM(R)1500 Benchtop,
introduced in June 1993, an improved benchtop modeler called the FDM(R)1600
Benchtop, introduced in November 1994, the Company's ProtoSlice operating
software package, and in some cases, a CAD workstation manufactured by SGI.
Although the Company has discontinued sales of the 3D Modeler, the FDM(R)1500
Benchtop, SGI workstations and, in early 1996, the FDM(R)1600 Benchtop system,
it continues to support and provide modeling materials for these systems. In
addition, the Company no longer sells ProtoSlice, although some of its current
customers continue to use ProtoSlice.
In March 1996, the Company introduced three new rapid prototyping
machines for commercial sale. Genisys(TM) is a 3D desktop printer which uses
rapid prototyping technology developed by International Business Machines
Corporation ("IBM") and purchased by the Company in 1995. It is useful for the
production of conceptual models employed in the early stages of the design
cycle, as it enables a designer to produce concept iterations at his desk
directly from a workstation in a simple push-button fashion. The FDM(R)1650
Benchtop, the latest in the Company's line of FDM(R) modelers, can produce
functional prototypes at three times the speed of its predecessor, the
FDM(R)1600 Benchtop, and can accommodate a variety of engineering modeling
materials. The third new product, the Stratasys 8000, is a rapid prototyping
device, which incorporates the medulla electronics and a portion of the
front-end software technology of Genisys(TM) and the filament extrusion method
of the Company's FDM(R) products. It is capable of building prototypes up to 24
inches in size at a through-put approximately 600% faster than the Company's
FDM(R)1600 Benchtop system. Like the FDM(R)1650 Benchtop, the Stratasys 8000 can
use several types of modeling materials to generate prototypes. Distribution of
the FDM(R)1650 Benchtop began in March 1996, while shipment of the Genisys(TM)
machine and the Stratasys 8000 is expected to begin in the second quarter and
fourth quarter of 1996, respectively.
-4-
<PAGE>
In 1994, the Company introduced its QuickSlice(R) operating software,
which is currently used with the FDM(R) 1650 and Stratasys 8000 machines. The
Genisys(TM) machine uses the Company's AutoGen(TM) software, which was
introduced in 1996.
The process involved in the development of a three-dimensional model
using the 3D Modeler, the FDM(R) Benchtop systems, or the Stratasys 8000 begins
with the creation of a conceptual geometric model on a CAD workstation. The
model is then imported into the ProtoSlice or QuickSlice(R) software program,
which mathematically slices the conceptual model into horizontal layers that are
downloaded into the system. These rapid prototyping machines basically draw
cross-sections of the model one layer at a time to create a three-dimensional
"blueprint." A spool of thin thermoplastic modeling material feeds into a moving
FDM(R) extruding head, which heats the material to a semi-liquid state. This
semi-liquid material is then extruded and deposited in ultra-thin flat layers on
a base in the modeling chamber. As the material is directed into place by the
computer-controlled head, layer upon layer, the material solidifies, creating a
precise and strong laminated model.
The Genisys(TM) modeling process is similar. Genisys(TM) uses
AutoGen(TM) software to slice the conceptual model created on a CAD workstation
into horizontal layers that are downloaded into Genisys(TM). Genisys(TM) then
uses wafers of modeling material, rather than spools of filament, to feed the
extrusion head. The extrusion head heats these wafers and, using a precision
hydraulic conical pump, deposits a continuous layer of plastic polymer beads
(much like squeezing toothpaste from a tube) onto a flat surface (the "X-Y
Stage") to create a three-dimensional model by building up layers. In comparison
to the FDM(R) Benchtop systems, due to its size, Genisys(TM) allows the
prototype to be created on a desktop, directly from a workstation, like a 3D
printer.
Currently, the Company has five modeling materials commercially
available for model generation using its FDM(R) technology: a machinable wax, a
tough polyamide plastic polymer that is similar to nylon, an investment casting
wax, the hard polymer material ABS (named for its three initial monomers), which
is used commercially to make products such as telephones, and a medical grade
ABS (MABS), for medical applications. Each material has specific characteristics
that make it appropriate for various applications. The ability to use different
materials allows the user to match the material to the end use application of
the prototype, whether it is a pattern for tooling or a concept model.
Genisys(TM) uses only one type of modeling material, a plastic polymer,
which is manufactured in the form of wafers. A total of 52 wafers are held in a
cassette, which allows the wafers to be fed into the machine and rapidly
extruded in layers.
The Company has positioned its products to be used as devices that
support CAD systems in a variety of manufacturing industries, including
automotive, aerospace, consumer products, electronics and medical applications.
They are also used in universities. Additional future applications may arise in
conceptual design, casting, precision prototypes, consumer packaging,
architectural design, rapid manufacturing of small-volume custom parts and fit,
form and function testing, secondary tooling, and mold-making. NASA is using the
FDM(R)1600 Benchtop system and plans to build spare parts in space, thereby
reducing the inventory of parts in a space flight payload.
The Company was incorporated in Delaware on August 8, 1989. The
Company's executive offices are located at 14950 Martin Drive, Eden Prairie,
Minnesota 55344-2020; Telephone number (612) 937-3000; facsimile number (612)
937-0070.
-5-
<PAGE>
RISK FACTORS
The shares of Common Stock offered hereby are speculative and involve a
high degree of risk. In addition to other information contained in or
incorporated by reference into this Prospectus, the following risks should be
considered carefully by each prospective purchaser before making an investment
in the Company.
Limited Operating History. The Company was incorporated in August 1989
and completed its initial public offering ("IPO") in October 1994. Since its
incorporation, the Company has developed and sold systems including the 3D
Modeler, its initial product, a smaller benchtop version of the 3D-Modeler
called the FDM(R)1500 Benchtop, introduced in June 1993, an improved benchtop
modeler called the FDM(R)1600 Benchtop, introduced in November 1994, and three
new products, the Genisys(TM), the FDM(R)1650 Benchtop and the Stratasys 8000,
introduced in March 1996. The Company faces the risks and problems associated
with businesses in their early stages and has a limited operating history upon
which an evaluation of its prospects can be made. Such prospects should be
considered in light of the risks, expenses and difficulties frequently
encountered in the establishment of a business in a new industry characterized
by a number of market entrants and intense competition and in the shift from the
development to commercialization of new products based on innovative
technologies.
Lack of and Limited Profitability. Although the Company had a net
profit of $10,163 (including $135,573 of net interest income) for the quarter
ended March 31, 1996, and an operating profit of $140,078 for its fiscal year
ended December 31, 1995, it incurred an operating loss of $125,410 for the
quarter ended March 31, 1996 and net losses of $1,133,769 and $1,047,106, for
the fiscal years ended December 31, 1994 and 1993, respectively. The ability of
the Company to generate revenues and to remain profitable depends on many
factors, including future growth of its business, the ability of the Company to
secure new customers and develop and sell new products, the ability of
management to control costs and successfully implement the Company's business
strategy and the ability of the Company to manufacture and deliver products in a
timely manner. There can be no assurance that the Company will be successful in
generating future revenues or in becoming or remaining profitable. In addition,
the Company will continue to have a high level of operating expenses and to
expend substantial amounts on research and development.
In the future, the Company's operating results and profitability may
depend on and fluctuate as a result of a number of factors including the degree
of acceptance of its new technology and products by potential customers,
increased competition, difficulties or delays in new product introduction or
development, operating costs, economic conditions and the timing of orders from,
and shipments to, major customers. The Company's operating results may vary in
part due to the introduction of new products and enhancements and continuing
research and development expenditures. Operating results may be adversely
affected if revenues do not meet the Company's expectations in any given
quarter.
Uncertain Market for Company Products. While the Company believes that
its current systems are and its future systems will be highly effective at
developing high resolution, three-dimensional prototypes and models, the
Company's FDM(R) rapid prototyping technology was first introduced in 1992, and
its Genisys(TM) System was first introduced in early 1996. Therefore, the
Company has had only a limited period to determine market acceptance of its
products. See "RISK FACTORS - Limited Operating History." In addition, having
-6-
<PAGE>
begun in approximately 1990, the rapid prototyping industry is in the early
stages of development. Successful development of a significant market for rapid
prototyping equipment by the Company and market penetration of such a market
will require education, training, and broad acceptance of the Company's current
and future products by manufacturing engineers and designers. There can be no
assurance that a significant market for the Company's products can be developed
or sustained.
Dependence on a Single Line of Business. Although the Company markets
products that can be used in all stages of the design cycle, its line of
products consists of closely interdependent products (modeling devices,
software, and modeling filament or wafers) in a single field (rapid prototyping)
based on proprietary and patented FDM(R) or Genisys(TM) technology. For the
foreseeable future, the Company plans to continue to pursue this business
strategy. The inability of the Company's products to be widely accepted in the
rapid prototyping field could lead to reduced sales and increased expenditures
on research and development for new applications in other fields. There can be
no assurance that such efforts to diversify the Company's products into other
fields would be successful. As a consequence, the prospects of the Company and
the future value of an investment in the Common Stock will be dependent on the
success of its products in the rapid prototyping field.
Additional Working Capital Requirements. From the date of its formation
through December 31, 1995, the Company incurred net losses of approximately
$5,413,306. Even though the Company earned a profit for the year ended December
31, 1995 and for the quarter ended March 31, 1996, and as of December 31, 1995
had cash reserves of approximately $11,000,000, there can be no assurance that
the Company will remain profitable or that it will not once again incur losses.
If the Company does incur losses, it may need additional debt or equity
financing to fund its operations or it may have to apply existing cash reserves
to operations and defer its current marketing and research and development
efforts. Any such deferral may have an adverse effect on the Company. There can
be no assurance that the Company will be able to obtain additional financing, if
needed, or on terms favorable to the Company, if available.
Dependence on Proprietary Technology. Proprietary technology is
important to the Company in the development and manufacture of its products. The
Company seeks to protect its technology through a combination of patents,
copyrights, trade secrets, proprietary know-how and confidentiality agreements.
In June 1992, the Company's President, Scott Crump was issued a patent, which
was subsequently assigned to the Company, covering 44 claims on its products,
various aspects of FDM(R) technology and the associated modeling process. On
August 24, 1994, Mr. Crump was issued a second patent covering additional
aspects of the FDM(R) technology, that he also assigned to the Company. In
connection with the purchase of assets from IBM in January 1995, the Company
acquired three patents and seven patent applications by IBM relating to the
Company's Genisys(TM) technology. There can be no assurance that these patents
will not be circumvented or invalidated, that additional patents will be
granted, that proprietary information will be maintained or that the Company
will be able to maintain a meaningful technological advantage. The Company could
incur substantial costs in seeking enforcement of its patent rights against
infringement or the unauthorized use of its proprietary technology by others or
in defending itself against similar claims of others. Insofar as the Company
relies on trade secrets and proprietary know-how to maintain its competitive
position, there can be no assurance that others may not independently develop
similar or superior technologies or gain access to the Company's secrets or
know-how. Prior to the Company's incorporation, a patent infringement study was
conducted in 1988 to determine whether any other parties infringed or claimed
rights to its technology. No such infringement or claims were found, and no
-7-
<PAGE>
further study has been conducted since 1988. There can be no assurance, however,
that such claims of infringement will not be asserted. Defending against such
claims could have the effect of depleting the Company's resources, and the
Company's inability to defend successfully against any such claim could impair
the Company's ability to manufacture its products.
Need for Product Enhancement and Development. Although the market for
rapid prototyping equipment has emerged only recently, the industry has made
quick advances in technology. Accordingly, the Company's ability to compete in
this market may depend, in large part, on its success in enhancing its existing
product lines and in developing new products. In addition, the Company cannot
determine how long a product will be on the market, and it may develop new
technologies for products that could render its current products obsolete or
could be sold at lower prices. Thus far, production of the Company's first three
products, the 3D Modeler, the FDM(R)1500 Benchtop and the FDM(R)1600 Benchtop,
has been discontinued, and those products have been replaced by the FDM(R)1650
Benchtop. In addition, the Company developed and has begun marketing
Genisys(TM), which uses a different technology, and the Stratasys 8000, which
uses a combination of the FDM(R) technology and the Genisys(TM) technology. Even
though the introduction of each subsequent FDM(R) product to date has been
accompanied by an increase in revenue, the introduction of these new,
cost-effective products and any future cost-effective products could cause the
Company's net income from sales to decline, notwithstanding an increase in sales
volume. There can be no assurance that the Company will succeed in its efforts
to develop additional new products or that any of its products will not be
rendered obsolete or uneconomical by technological advances made by others or by
the Company itself.
Competition. The Company believes that there are currently no companies
engaged in the commercial production of products using the FDM(R) process.
However, various companies currently offer, or are developing, rapid prototyping
devices which utilize alternative technologies. Some of these companies have
significantly greater financial, product development, manufacturing and
marketing resources than the Company. Rapid prototyping is an emerging field,
and the market for rapid prototyping devices cannot now be determined with any
degree of precision. In addition, traditional methods of producing models and
prototypes, such as machining and hand-sculpting, continue to be widely used. No
assurance can be given that the Company will be able to compete successfully
against current and future sources of competition or that the competitive
pressures faced by the Company will not adversely affect its profitability or
financial performance.
Dependence on Key Personnel. The development of new products and
advancements of existing products are dependent to a significant extent on the
abilities and efforts of the Company's President, Scott Crump, and a small
number of other persons. The loss of any of these persons could adversely affect
the timing or success of such development. On October 20, 1994, Scott Crump
signed a three-year employment contract with the Company. Mr. Crump is covered
by key-man insurance in the amount of $1,200,000, and the Company is the
beneficiary of the policy. No other employee has entered into a written
employment agreement with the Company. The success of the Company will also
depend on, among other factors, the successful recruitment and retention of key
personnel.
No Dividends Anticipated. No cash dividends have been paid on shares of
the Company's Common Stock since its inception, and none are contemplated in the
foreseeable future. The Company intends to retain any earnings to fund its
planned research, development, operations and marketing.
-8-
<PAGE>
No Assurance of Active or Continued Public Market. Although a public
trading market for the Common Stock currently exists, there can be no assurance
that such trading market will provide significant liquidity with regard to the
Common Stock or that such market will be sustained.
Use of Distinctive Materials and Ingredients; Inventory Obsolescence.
The Company is dependent on the ability to purchase distinctive materials and
ingredients for its rapid prototyping technology, particularly for the filaments
and wafers used by the Company's systems. Certain Company vendors are chosen
based upon the unique properties of the material that they supply and upon their
ability to demonstrate through extensive testing and reformulations that such
materials are the most suitable to both the Company's manufacturing processes as
well as to FDM(R) compatibility. Other vendors supply off-the-shelf components
that are specifically compounded according to Company specifications, such
compounds being Company trade secrets. Although the Company historically has
been able to purchase these materials from a number of vendors at prices
favorable to the Company, there can be no assurance that the Company will be
able to do so in the future. Furthermore, the loss of a vendor for
vendor-specific formulations would require retesting and recertification of any
new vendor. A shortage of these materials, the inability to obtain them from the
Company's usual vendors or the need to purchase them at higher prices could have
an adverse effect on the Company's operations and delay product deliveries.
The Company maintains an inventory of components for its equipment in
order to provide replacement parts. Although the Company believes that it will
realize its investment in inventory and to date has not had any material loss of
inventory as a result of obsolescence, no assurance can be given that demand for
replacement parts will continue or that the component inventory will not become
obsolete and, therefore, be of little or no value.
Control by Management and Principal Stockholders. Presently, Scott
Crump, Lisa Crump and Ralph Crump and the current officers and directors of the
Company and their affiliates (collectively, the "Affiliates") beneficially own
approximately 24% of the Company's issued and outstanding Common Stock.
Consequently, the Affiliates will have the ability to influence the election of
all the Company's directors and to direct the affairs of the Company.
Adverse Effect of Public Sales of Additional Shares. As of the date of
this Prospectus, 1,380,000 shares of Common Stock have been sold to the public
by the Company pursuant to the registration statement filed in connection with
the Company's IPO; 392,373 shares of Common Stock were sold publicly by a
stockholder on January 17, 1996, under Rule 144(k) promulgated under the
Securities Act; 1,277,121 shares of Common Stock have been or may be sold to the
public in connection with the offering by selling Stockholders pursuant to the
Company's registration statement on Form SB-2, which became effective on January
25, 1996; and up to 400,000 shares of Common Stock may be sold to the public
hereby. In addition, a maximum of 800,000 shares of Common Stock are covered by
the Company's registration statement on Form S-8 (the "S-8 Registration
Statement"). Of the 800,000 shares covered by the S-8 Registration Statement,
options to purchase 880,252 shares have been granted, 106,991 of which have been
exercised. Of these 106,991 shares, 105,554 may be sold without restriction and
1,437 are subject to a lock-up agreement until October 20, 1996. Of the balance
of options to purchase 773,261 shares that have been granted, options to
purchase 375,007, 122,489, 87,712, 79,816, 71,291, and 36,946 shares will become
exercisable and may be sold without restriction upon such exercise in 1996,
1997, 1998, 1999, 2000, and 2001, respectively. Furthermore the Board of
Directors has authorized, subject to stockholder approval, increasing the number
-9-
<PAGE>
of shares that may be issued under the Company's 1994-2 Employee Stock Option
Plan from 500,000 to 1,000,000. If such increase is approved, the Company
intends to file a Registration Statement on Form S-8 to register the sale of
500,000 additional shares.
In addition to the options described above, the Company has issued
warrants to purchase 64,355 shares of Common Stock that are not presently
exercisable and warrants to purchase 18,000 shares of Common Stock that are
presently exercisable. The warrants to purchase 64,355 shares have one demand
and certain piggyback registration rights and are exercisable between November
3, 1996 and November 3, 2001. Exercisable warrants to purchase 5,000 shares may
be exercised until November 11, 2000, and the warrants to purchase the remaining
13,000 shares of Common Stock may be exercised until January 18, 2001. Both of
such warrants have piggyback registration rights.
There are also 1,938,109 shares of Common Stock issued and outstanding,
the sale of which is restricted under the Securities Act. Of those shares, (i)
178,038 shares may presently be sold under Rule 144 of the Securities Act, (ii)
1,167,175 shares may be sold under Rule 144 after October 20, 1996, subject to
Rule 144 restrictions on sales by affiliates, (iii) 500,000 shares may be sold
under Rule 144 after January 1, 1997, (iv) 86,667 shares may be sold under Rule
144 after May 25, 1997, and (v) 6,229 shares may be sold at various times during
1997. The holder of the 500,000 of the shares described above also has piggyback
registrations rights exercisable after January 1, 1997, and two demand
registration rights exercisable after January 1, 1998.
If all of the above-described shares of restricted stock and stock
issuable upon the exercise of warrants and options are sold to the public, the
number of publicly-held shares will increase from 3,332,776 to 6,233,492, or
approximately 187% within the next five years. The issuance of such additional
shares may adversely affect prevailing market prices for the Common Stock and
may dilute the interests of existing stockholders. Moreover, the terms upon
which the Company will be able to obtain additional equity capital may be
adversely affected, because the holders of such outstanding securities can be
expected to exercise them at a time when the Company would, in all likelihood,
be able to obtain any needed capital on terms more favorable to the Company than
those provided in such options and warrants.
FOR ALL OF THE AFORESAID REASONS AND OTHERS SET FORTH HEREIN, THE
PURCHASE OF SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. ANY PERSON
CONSIDERING AN INVESTMENT IN THE SECURITIES OFFERED HEREBY SHOULD BE AWARE OF
THESE AND OTHER FACTORS SET FORTH IN THIS PROSPECTUS. THE SECURITIES SHOULD BE
PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO ABSORB A TOTAL LOSS OF THEIR
INVESTMENT IN THE COMPANY AND HAVE NO NEED FOR A RETURN ON THEIR INVESTMENT.
-10-
<PAGE>
USE OF PROCEEDS
The Shares were acquired by the Selling Stockholders upon the exercise
of warrants to purchase 400,000 shares of Common Stock (the "Vertical Warrants")
originally issued to Vertical Financial, Inc. ("Vertical") as partial
consideration for consulting services performed and to be performed by Vertical
for the Company. Certain of the Vertical Warrants were subsequently sold and
assigned to the Selling Stockholders. See "SELLING STOCKHOLDERS."
Upon exercise of the Vertical Warrants, each Selling Stockholder paid
the Company cash in an amount equal to the par value of the shares issuable upon
exercise of his or its Vertical Warrants (the "Warrant Shares") and gave the
Company a Promissory Note due on May 10, 1997, in an amount equal to the balance
of the exercise price and bearing interest commencing August 10, 1996, at the
prime rate (each, a "Promissory Note" and collectively, "Promissory Notes"). The
Company received aggregate cash of $4,000 and Promissory Notes having an
aggregate principal balance of $1,946,000. Each Warrant Holder is required to
prepay his Promissory Note on the earlier of (i) four business days after the
sale of such Selling Stockholder's Warrant Shares, or (ii) 60 days after the
effective date of the Registration Statement of which this Prospectus is a part.
Payment of each Promissory Note is secured by a pledge of one-half of the
Warrant Shares owned by such Selling Stockholder. Under each Selling
Stockholder's Pledge Agreement with the Company, upon default in the payment of
a Selling Stockholder's Promissory Note, the Company may, among other things,
sell that Selling Stockholder's pledged Warrant Shares in a public or private
sale or take possession of his or its pledged Warrant Shares having a "Value"
equal to the amount then owed under the Promissory Note. For this purpose,
"Value"is defined as 80% of the Current Market Price (as defined in the
Warrants) of the Warrant Shares. In the event that the proceeds of the sale of
any pledged Warrant Shares are insufficient to pay the amounts due in full, the
Selling Stockholder will remain personally liable for any unpaid balance.
Each Selling Stockholder entered into an agreement with Sunrise
Securities Corp. ("Sunrise") pursuant to which he agreed to use Sunrise as his
broker with respect to any sale of the Warrant Shares until December 31, 1996.
See "PLAN OF DISTRIBUTION." Sunrise agreed that if any amounts were due and
payable under a Selling Stockholder's Promissory Note at the time of the sale of
his Warrant Shares, Sunrise would pay, on the Selling Stockholders' behalf, the
net proceeds of such sale directly to the Company to the extent of the amount
due.
Therefore, although the Company may not directly receive the proceeds
of sales of the Shares by the Selling Stockholders, the Selling Stockholders
have agreed to apply those proceeds to pay the Selling Stockholders' Promissory
Notes to the extent that they are then unpaid. The Company will use the proceeds
of the payment of the Promissory Notes for operating capital and general
corporate purposes.
SELLING STOCKHOLDERS
The table below sets forth, with respect to each Selling Stockholder,
based upon information available to the Company as of the date hereof, the
number of shares of Common Stock beneficially owned, the number of Shares to be
sold, and the number and percentage of outstanding shares of Common Stock
beneficially owned before and after the sale of the Shares offered hereby. None
of the Selling Stockholders has been an affiliate of the Company during the
preceding three years. An aggregate of 400,000 Shares are being offered for the
-11-
<PAGE>
accounts of the Selling Stockholders. Although there can be no assurance that
the Selling Stockholders will sell any or all of the Shares, the following table
assumes that each of the Selling Stockholders will sell all Shares offered by
this Prospectus.
<TABLE>
<CAPTION>
Amount and Shares
Nature Beneficially Percent of Class(2)
Beneficial Shares to Owned Before After
Name Ownership(1) Be Sold After Offering Offering Offering
- ---- ------------ ------- -------------- -------- --------
<S> <C> <C> <C> <C> <C>
Vertical Financial, 137,500 137,500 -0- 2.6% -0-
Inc. (3)
Robb Matzner 40,000 40,000 -0- * -0-
Floy Shaeffer 20,000 20,000 -0- * -0-
Nathan Low (4) 322,000 (5) 200,000 122,000 6.1% 2.3%
Donald Heimstaedt 2,500 2,500 -0- * -0-
</TABLE>
- ----------
* Represents less than 1% of the issued and outstanding shares of Common
Stock.
(1) Under Securities and Exchange Commission rules, beneficial ownership
includes any shares as to which an individual has sole or shared voting
power or investment power. Unless otherwise indicated, the Company believes
that all persons named in the table have sole voting and investment power
with respect to all shares of Common Stock beneficially owned by them. A
person is also deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon the
exercise of warrants or options. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are held
by such person (but not those held by any other person) and are exercisable
within 60 days from the date hereof have been exercised.
(2) Based on a total of 5,270,885 shares of Common Stock issued and outstanding
as of May 13, 1996.
(3) Vertical is a consultant of the Company pursuant to a consulting agreement
dated June 29, 1994. Vertical has performed and currently performs services
for the Company with regard to structuring equipment leases for potential
customers, marketing the Company's products and arranging financing for the
Company. The consulting agreement expires on June 29, 1997.
(4) Mr. Low is the Company's financial public relations consultant and the
President and sole stockholder of Sunrise Securities Corp., which is acting
as a broker for the sale of the Warrant Shares until December 31, 1996. See
"PLAN OF DISTRIBUTION."
(5) Represents 200,000 shares beneficially owned by Mr. Low, 120,000 shares
issuable upon the exercise of stock options currently exercisable by Mr.
Low and 2,000 shares issuable upon the exercise of warrants currently
exercisable by Mr. Low. Does not include 25,000 shares of Common Stock
issuable upon the exercise of warrants that are not currently exercisable.
-12-
<PAGE>
PLAN OF DISTRIBUTION
The Selling Stockholders are offering the Shares for their own
account and not for the account of the Company. Each Selling Stockholder has
delivered to Sunrise the certificates representing one-half of his or its
Warrant Shares and has designated Sunrise as its broker to hold, transfer or
sell such Warrant Shares until December 31, 1996, in accordance with the Selling
Stockholder's instructions. Sunrise will 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). After December 31, 1996, the Selling
Stockholders may sell the Shares directly to purchasers or, alternatively, may
offer the Shares from time to time through other agents, brokers, dealers or
underwriters, who may receive compensation in the form of concessions or
commissions from the Selling Stockholders. Sales of the Shares may be made in
one or more transactions on the PSE, on NASDAQ, in privately negotiated
transactions or otherwise, and such sales may be made at the market price
prevailing at the time of sale, a price related to such prevailing market price
or a negotiated price. The sale of the Shares is subject to the Prospectus
delivery and other requirements of the Act.
Under the Exchange Act and the regulations thereunder, any person engaged
in a distribution of the shares of Common Stock of the Company offered by this
Prospectus may not simultaneously engage in market making activities with
respect to the Common Stock of the Company during the applicable "cooling off"
periods prior to the commencement of such distribution. In addition, and without
limiting the foregoing, the Selling Stockholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder
including, without limitation, Rules 10b-6 and 10b-7, which provisions may limit
the timing of purchases and sales of Common Stock by the Selling Stockholders.
To the extent required, the Company will use its best efforts to file,
during any period in which offers or sales are being made, one or more
amendments or supplements to this Prospectus or a new registration statement
with respect to the Shares to describe any material information with respect to
the plan of distribution not previously disclosed in this Prospectus, including
the name or names of any additional underwriters, dealers or agents, if any, the
purchase price paid by the underwriter for Shares purchased from a Selling
Stockholder, and any discounts, commissions or concessions allowed or reallowed
or paid to dealers.
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the small business
issuer pursuant to the foregoing provisions or otherwise, the small business
issuer has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
-13-
<PAGE>
LEGAL MATTERS
Snow Becker Krauss P.C., 605 Third Avenue, New York, New York 10158 is
acting as counsel to the Company and will pass upon the legality of the shares
of Common Stock offered hereby. SBK Investment Partners, a partnership
consisting of certain members of Snow Becker Krauss P.C., owns 20,122 shares of
the Company's Common Stock.
EXPERTS
The financial statements of the Company for the years ended December 31,
1995 and December 31, 1994 have been included herein in reliance upon the report
of Rothstein, Kass & Company, P.C., independent public accountants, upon the
authority of said firm as an expert in accounting and auditing.
-14-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
The expenses payable by the Company in connection with the issuance and
distribution of the securities being registered are estimated below:
SEC registration fee..................................................$2,483.00
Blue sky fees and expenses............................................$1,000.00
Legal fees and expenses..............................................$15,000.00
Printing and engraving expenses.......................................$1,000.00
Accounting fees.........................................................$500.00
Miscellaneous............................................................$17.00
Total.........................................................$20,000.00
Item 15. Indemnification of Directors and Officers.
Except to the extent hereinafter set forth, there is no statute, charter
provision, By-law, contract or other arrangement under which any controlling
person, Director or officer of Stratasys, Inc., a Delaware corporation (the
"Company or the "Registrant"), is insured or indemnified in any manner against
liability which he may incur in his capacity as such.
Article 11 of the Company's Certificate of Incorporation provides for
the indemnification of officers and directors to the fullest extent allowed by
the DGCL. In addition, ARTICLE VI of the By-laws of the Company states:
"6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS
"The Corporation shall indemnify, to the maximum extent and in the manner
permitted by the General Corporation Law of Delaware, indemnify each of its
directors and officers against expenses (including attorneys' fees), judgments,
fines, settlements, and other amounts actually and reasonably incurred in
connection with any proceeding, arising by reason of the fact that such person
is or was an agent of the corporation. For purposes of this Section 6.1, a
"director" or "officer" of the corporation includes any person (i) who is or was
a director or officer of the corporation, (ii) who is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, or (iii) who was a
director or officer of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation."
Under Section 145 of the Delaware General Corporation Law ("DGCL"),
directors and officers may be indemnified against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement in connection with
specified actions, suits or proceedings, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation--a
"derivative action") if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe their conduct was unlawful. A similar standard of care is applicable in
the case of derivative actions, except that indemnification only extends to
-15-
<PAGE>
expenses (including attorneys' fees) incurred in connection with the defense or
settlement of such an action. Moreover, the DGCL requires court approval before
there can be any indemnification where the person seeking indemnification has
been found liable to the corporation. The statute provides that indemnification
pursuant to its provisions is not exclusive of other rights of indemnification
to which a person may be entitled under the Certificate of Incorporation of the
Company or any by-law, agreement, vote of stockholders or disinterested
directors, or otherwise.
The DGCL provides, in part, that no director shall be personally liable
to a corporation or its stockholders for monetary damages for any breach of
fiduciary duty by such director as a director, except:
(i) for breach of the director's duty of loyalty to the corporation or
its stockholders;
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(iii) pursuant to Section 174 of the GCL; or
(iv) for any transaction from which the director derived an improper
personal benefit.
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the Company, as amended. (6)
3.2 By-Laws of the Company. (1)
4.1 Agent's Warrant issued to R.J. Steichen & Company dated November 12, 1993. (1)
4.2 Agent's Warrant issued to R.J. Steichen & Company dated December 13, 1993. (1)
4.3 Form of Common Stock purchase warrants issued by the Company dated as of
November 12, 1993 and December 13, 1993. (1)
4.4 Form of Underwriter's Warrant. (1)
4.5 Form of Common Stock purchase warrant issued by the Company in its August 1995
private placement (2).
4.6 Form of 3-year Common Stock purchase warrants issued by the Company in its
November 1995 offering under Regulation D and Regulation S. (5)
4.7 Form of Placement Agent's warrant issued by the Company in its November 1995
offering under Regulation D and Regulation S. (5)
</TABLE>
-16-
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.8 Form of warrant issued to Sunrise Securities Corp. by the Company in connection with
its November 1995 offering under Regulation D and Regulation S. (5)
5.1 Opinion of Snow Becker Krauss P.C.
10.1 Non-Competition Agreement between the Company and S. Scott Crump, dated October
15, 1990. (1)
10.2 Non-Competition Agreement between the Company and S. Lisa Crump, dated October
15, 1990. (1)
10.3 Employee Confidentiality Agreement between the Company and S. Scott Crump, dated
October 15, 1990. (1)
10.4 Employee Confidentiality Agreement between the Company and Lisa Crump, dated
October 15, 1990. (1)
10.5 Stratasys, Inc. Employee Stock Option Plan #1. (1)
10.6 Joint Development Agreement between the Company and 3M Corporation, dated July
2, 1993. (1)
10.7 Amended and Restated Stratasys, Inc. 1994 Stock Plan. (3)
10.8 Stratasys, Inc. 1994-2 Stock Plan. (3)
10.9 Consulting Agreement with Vertical Financial Inc. dated June 29, 1994. (1)
10.10 Employment Agreement Between the Company and S. Scott Crump, dated September
1, 1994. (2)
10.11 Consulting Agreement with Arnold Wasserman dated December 15, 1994. (3)
10.12 Asset Purchase Agreement between the Company and IBM dated January 1, 1995. (4)
10.13 Registration Rights Agreement between the Company and IBM dated January 1, 1995.
(4)
10.14 Equipment Lease Agreement between the Company and IBM dated January 1, 1995. (4)
10.15 Assignment, dated October 23, 1989, from S. Scott Crump to the Company with respect
to a patent application for an apparatus and method for creating three-dimensional
objects. (7)
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10.16 Assignment, dated June 5, 1992, from S. Scott Crump to the Company with respect to
a patent application for a modeling apparatus for three dimensional objects. (7)
10.17 Assignment, dated June 1, 1994, from S. Scott Crump, James W. Comb, William R.
Priedemann, Jr., and Robert Zinniel to the Company with respect to a patent application
for a process and apparatus of support removal for three-dimensional modeling. (7)
10.18 Warrant Modification and Exercise Agreement, dated as of May 10, 1996, by and among
the Company, Vertical Financial Inc., Robb Matzner, Nathan Low, Floy L. Shaeffer,
Donald Heimstaedt, and Sunrise Securities Corp.
23.1 Consent of Snow Becker Krauss P.C. (contained in Exhibit 5.1).
23.2 Consent of Rothstein, Kass & Company, P.C.
24.1 Power of Attorney (see Signature Page to this Registration Statement).
</TABLE>
- ----------
(1) Incorporated by reference from the Company's Registration Statement on Form
SB-2 (File No. 33-83638-C) filed September 2, 1994.
(2) Incorporated by reference from the Company's Form 8-K, dated August 24,
1995.
(3) Incorporated by reference from the Company's Form 10-KSB for the year ended
December 31, 1994.
(4) Incorporated by reference from the Company's Form 8-K, Amendment No.2,
dated January 1, 1995.
(5) Incorporated by reference from the Company's Registration Statement on Form
SB-2 (File No. 33-99108) filed November 8, 1995.
(6) Incorporated by reference from the Company's Form 10-QSB for the nine
months ended September 30, 1995.
(7) Incorporated by reference from Amendment No. 1 to the Company's
Registration Statement on Form SB-2 (File No. 33-99108) filed December 20,
1995.
Item 17. Undertakings.
The Company hereby undertakes:
(1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement; and
-18-
<PAGE>
(iii) include any additional or changed material information
on the plan of distribution.
(2) For determining liability under the Act, to treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
(4) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(6) For determining any liability under the Act, to treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the small business issuer under Rule 424(b)(1), or (4) or
497(h) under the Act as part of this registration statement as of the time the
Commission declared it effective.
(7) For determining any liability under the Act, to treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.
-19-
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and authorized this registration
statement to be signed on its behalf by the undersigned, in Eden Prairie,
Minnesota, on May 20, 1996.
STRATASYS, INC.
By: /s/ S. Scott Crump
--------------------------------
S. Scott Crump, President
POWER OF ATTORNEY
Each of the undersigned hereby authorizes S. Scott Crump as his
attorney-in-fact to execute in the name of each such person and to file such
amendments (including post-effective amendments) to this registration statement
as the Registrant deems appropriate and appoints such person as attorney-in-fact
to sign on his behalf individually and in each capacity stated below and to file
all amendments, exhibits, supplements and post-effective amendments to this
registration statement.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following person in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ S. Scott Crump Chairman of the Board of Directors, President, May 20, 1996
- --------------------------
S. Scott Crump Chief Executive Officer, Chief Financial Officer
(Principal Executive Officer and Principal
Accounting and Financial Officer)
/s/ Thomas W. Stenoien Director of Finance May 20, 1996
- -----------------------
Thomas W. Stenoien
/s/ Ralph E. Crump Director May 20, 1996
- ------------------------
Ralph E. Crump
/s/ Clifford H. Schwieter Director May 20, 1996
- -------------------------
Clifford H. Schwieter
/s/ Arnold J. Wasserman Director May 20, 1996
- -----------------------
Arnold J. Wasserman
/s/ Gregory L. Wilson Director May 20, 1996
- ------------------------
Gregory L. Wilson
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the Company, as amended. (6)
3.2 By-Laws of the Company. (1)
4.1 Agent's Warrant issued to R.J. Steichen & Company dated November 12, 1993. (1)
4.2 Agent's Warrant issued to R.J. Steichen & Company dated December 13, 1993. (1)
4.3 Form of Common Stock purchase warrants issued by the Company dated as of
November 12, 1993 and December 13, 1993. (1)
4.4 Form of Underwriter's Warrant. (1)
4.5 Form of Common Stock purchase warrant issued by the Company in its August 1995
private placement (2).
4.6 Form of 3-year Common Stock purchase warrants issued by the Company in its
November 1995 offering under Regulation D and Regulation S. (5)
4.7 Form of Placement Agent's warrant issued by the Company in its November 1995
offering under Regulation D and Regulation S. (5)
4.8 Form of warrant issued to Sunrise Securities Corp. by the Company in connection with
its November 1995 offering under Regulation D and Regulation S. (5)
5.1 Opinion of Snow Becker Krauss P.C.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C>
10.1 Non-Competition Agreement between the Company and S. Scott Crump, dated October
15, 1990. (1)
10.2 Non-Competition Agreement between the Company and S. Lisa Crump, dated October
15, 1990. (1)
10.3 Employee Confidentiality Agreement between the Company and S. Scott Crump, dated
October 15, 1990. (1)
10.4 Employee Confidentiality Agreement between the Company and Lisa Crump, dated
October 15, 1990. (1)
10.5 Stratasys, Inc. Employee Stock Option Plan #1. (1)
10.6 Joint Development Agreement between the Company and 3M Corporation, dated July
2, 1993. (1)
10.7 Amended and Restated Stratasys, Inc. 1994 Stock Plan. (3)
10.8 Stratasys, Inc. 1994-2 Stock Plan. (3)
10.9 Consulting Agreement with Vertical Financial Inc. dated June 29, 1994. (1)
10.10 Employment Agreement Between the Company and S. Scott Crump, dated September
1, 1994. (2)
10.11 Consulting Agreement with Arnold Wasserman dated December 15, 1994. (3)
10.12 Asset Purchase Agreement between the Company and IBM dated January 1, 1995. (4)
10.13 Registration Rights Agreement between the Company and IBM dated January 1, 1995.
(4)
10.14 Equipment Lease Agreement between the Company and IBM dated January 1, 1995. (4)
10.15 Assignment, dated October 23, 1989, from S. Scott Crump to the Company with respect
to a patent application for an apparatus and method for creating three-dimensional
objects. (7)
10.16 Assignment, dated June 5, 1992, from S. Scott Crump to the Company with respect to
a patent application for a modeling apparatus for three dimensional objects. (7)
10.17 Assignment, dated June 1, 1994, from S. Scott Crump, James W. Comb, William R.
Priedemann, Jr., and Robert Zinniel to the Company with respect to a patent application
for a process and apparatus of support removal for three-dimensional modeling. (7)
10.18 Warrant Modification and Exercise Agreement, dated as of May 10, 1996, by and among
the Company, Vertical Financial Inc., Robb Matzner, Nathan Low, Floy L. Shaeffer,
Donald Heimstaedt, and Sunrise Securities Corp.
23.1 Consent of Snow Becker Krauss P.C. (contained in Exhibit 5.1).
23.2 Consent of Rothstein, Kass & Company, P.C.
24.1 Power of Attorney (see Signature Page to this Registration Statement).
</TABLE>
- ----------
(1) Incorporated by reference from the Company's Registration Statement on Form
SB-2 (File No. 33-83638-C) filed September 2, 1994.
(2) Incorporated by reference from the Company's Form 8-K, dated August 24,
1995.
(3) Incorporated by reference from the Company's Form 10-KSB for the year ended
December 31, 1994.
(4) Incorporated by reference from the Company's Form 8-K, Amendment No.2,
dated January 1, 1995.
(5) Incorporated by reference from the Company's Registration Statement on Form
SB-2 (File No. 33-99108) filed November 8, 1995.
(6) Incorporated by reference from the Company's Form 10-QSB for the nine
months ended September 30, 1995.
(7) Incorporated by reference from Amendment No. 1 to the Company's
Registration Statement on Form SB-2 (File No. 33-99108) filed December 20,
1995.
SNOW BECKER KRAUSS P.C.
May 21, 1996
Stratasys, Inc.
14950 Martin Drive
Eden Prairie, Minnesota 55344
Re: Registration Statement on Form S-3
Gentlemen:
We have acted as counsel to Stratasys, Inc., a Delaware corporation
(the "Company"), in connenction with the registration by the Company pursuant to
a Registration Statement on Form S-3 (the "Registration Statement"), which has
been filed with the Securities and Exchange Commission on this date pursuant to
the Securities Act of 1933, as amended. The Registration Statement includes
400,000 issued and outstanding shares of the Company's Common Stock.
As counsel to the Company, we have examined the Company's Certificate of
Incorporation, By-laws, records of corporate proceedings, and such other
documents as we have deemed necessary or appropriate as a basis for the opinions
set forth below. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as orginals, the
accuracy and completeness of all documents submitted to us as copies and the
authenticity of the orginals of such latter documents. As to any facts material
to such opinions which we did not independently establish or verify, we have
relied upon statements or representations of officers and other representatives
of the Company, public officials or others.
Based on the foregoing, we are of the opinion that:
1. The Company has been duly organized, is validly existing, and in good
standing under the laws of the State of Delaware.
2. The Shares have been duly authorized by the Board of Directors of the
Company and are fully paid and non-assessable securities.
We hereby consent to the reference of our name in the Prospectus under the
caption "Legal Matters" and to inclusion of this opinion as Exhibit 5.1 to the
Registration Statement and all amendments thereto.
Very truly yours,
/s/ SNOW BECKER KRAUSS P.C.
--------------------------------------
SNOW BECKER KRAUSS P.C.
<PAGE>
Exhibit 10.18
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
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").
1
<PAGE>
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.
2
<PAGE>
(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 cancelled 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
3
<PAGE>
the 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 posession 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
4
<PAGE>
taking any action in 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 cancelled, 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
5
<PAGE>
other terms, conditions, rights and obligations as such Warrant Holder's
original Warrants, including, without limitation, the 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:
6
<PAGE>
(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:
7
<PAGE>
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.
8
<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
9
<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/ Michael Karsch
-----------------------------
10
<PAGE>
Exhibit A
PROMISSORY NOTE
New York, New York
May, 1996
FOR VALUE RECEIVED, ____________________ ("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 ___________________ ($_____ ) on
May __, 1997 (the "Maturity Date"). If the principal balance of this Promissory
Note is not paid in full on or before August _, 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 __, 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.
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.
11
<PAGE>
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:
-----------------------------
12
<PAGE>
Exhibit B
PLEDGE AGREEMENT
PLEDGE AGREEMENT ("Agreement"), dated as of May __, 1996, by and
between ____________ ("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 __, 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 $__________ (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, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split,
spin-off or split-off;
13
<PAGE>
(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 l(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 (in the
case of Nathan Low) the security interests of Vertical Financial Inc.
("Vertical") and Robb Matzner ("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, except as may be required by applicable
securities laws.
(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.
14
<PAGE>
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 [, except for the lien of
Vertical and Matzner];
(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 [, except for the lien of Vertical and Matzner];
(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 failure to cure such default within
five days after notice thereof from the Company shall constitute a "Default" for
purposes of this Agreement.
15
<PAGE>
(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.
(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.
16
<PAGE>
(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 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.
17
<PAGE>
(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 [(in
the case of Low) Vertical and Matzner or their escrow agent unless they have
advised Pledgee in writing that all of Pledgor's obligations to them have been
satisfied in full, in which event the Pledged Collateral shall be delivered 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 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
18
<PAGE>
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 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
19
<PAGE>
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 STATE OF NEW YORK (NEW
YORK COUNTY) OR 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.
(l) The captions used herein are inserted for reference purposes only
and shall not affect the interpretation or meaning of this Agreement.
[Balance of page intentionally left blank]
20
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Pledge Agreement as of the date first above written.
PLEDGOR:
ADDRESS:
STRATASYS, INC.
By:
-----------------------------------
S. Scott Crump, Chairman
21
<PAGE>
Schedule A to
Pledge Agreement
PLEDGED SHARES
Pledgor No. of Shares Certificate No.
22
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 22, 1996, which appears
on page F-2 of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995.
/s/ Rothstein, Kass & Company, P.C.
-----------------------------------
Rothstein, Kass & Company, P.C.
Roseland, New Jersey
May 21, 1996
