As filed with the Securities and Exchange Commission on October 1, 1999
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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LECROY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-2507777
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 CHESTNUT RIDGE ROAD, CHESTNUT RIDGE, NEW YORK 10977 (914) 425-2000
(Address and telephone number of registrant's principal executive offices)
LUTZ P. HENCKELS, PRESIDENT AND CHIEF EXECUTIVE OFFICER
LECROY CORPORATION
700 CHESTNUT RIDGE ROAD
CHESTNUT RIDGE, NEW YORK 10977
(914) 425-2000
(Name, address, including ZIP code, and telephone number, including area code,
of agent for service and registrant's principal executive offices)
Copy to:
ROGER D. FELDMAN, ESQ.
BINGHAM DANA LLP
150 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(617) 951-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this 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, please check the following 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. [ ]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED PER SHARE (1) OFFERING PRICE REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value..... 750,000 shares $17.3125 $12,984,375 $3,609.66
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(1) Calculated in accordance with Rule 457(c) based on the average of the high and low prices reported on
the Nasdaq National Market on September 29, 1999.
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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</TABLE>
<PAGE>
PROSPECTUS
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES SHALL NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion
LECROY CORPORATION
COMMON STOCK
750,000 SHARES
Selling stockholders identified in this prospectus may sell up to 750,000
shares of common stock of LeCroy Corporation. LeCroy will not receive any of
the proceeds from the sale of shares by the selling stockholders. LeCroy's
common stock is listed on the Nasdaq National Market under the symbol "LCRY."
On September 29, 1999, the closing sale price of the common stock, as reported
on the Nasdaq National Market, was $17 per share.
INVESTING IN THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS," BEGINNING ON PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES, OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The selling stockholders may sell the shares of common stock described in this
prospectus in public or private transactions, on or off the National Market
System of the Nasdaq Stock Market, at prevailing market prices, or at privately
negotiated prices. The selling stockholders may sell shares directly to
purchasers or through brokers or dealers. Brokers or dealers may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders. More information is provided in the section titled "Plan
of Distribution."
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders. We will, however, pay substantially all expenses related
to the registration of the shares.
The date of this prospectus is ______, 1999
<PAGE>
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy
these reports, proxy statements and other information at the SEC's public
reference rooms in Washington, DC, New York, New York and Chicago, Illinois.
You can request copies of these documents by writing to the SEC and paying a
fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more
information about the operation of the public reference rooms. Our SEC filings
are also available at the SEC's Web site at "http://www.sec.gov". In addition,
you can read and copy our SEC filings at the office of the National Association
of Securities Dealers, Inc. at 1735 K Street, Washington, DC 20006.
The SEC allows us to "incorporate by reference" information that we file with
them, which means that we can disclose important information to you by
referring you to those other documents. The information incorporated by
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
[] Annual Report on Form 10-K for the year ended June 30, 1999.
[] The description of the common stock contained in our Registration
Statement on Form 8-A filed with the SEC under the Securities Exchange
Act of 1934.
You may request a copy of any and all of these filings and documents at no
cost, by writing or telephoning us at the following address:
LeCroy Corporation
Attention: Investor Relations
700 Chestnut Ridge Road
Chestnut Ridge, New York 10977
(914) 578-6021
This prospectus is part of a Registration Statement on Form S-3 we filed with
the SEC to register shares of our common stock. You should rely only on the
information incorporated by reference or provided in this prospectus. No one
else is authorized to provide you with different information. We are not making
an offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus is accurate as of any
date other than the date on the front of this document.
THE COMPANY
LeCroy Corporation develops, manufactures, sells and licenses signal analyzers,
principally high-performance digital oscilloscope, LAN (Local Area Networks)/WAN
(Wide Area Networks) instruments and related products. LeCroy was founded and
incorporated in the State of New York in 1964 and reincorporated in the State
of Delaware in 1995. All references to "LeCroy," "we" or "us" are to LeCroy
Corporation and include its subsidiaries, unless the context requires
otherwise. Our principal executive offices are located at 700 Chestnut Ridge
Road, Chestnut Ridge, New York 10977. Our phone number at that location is
(914) 425-2000.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements based on our current
expectations, assumptions, estimates and projections about LeCroy and our
industry that involves risks and uncertainties. Our results, performance and
achievements may be materially different from those expressed or implied by the
forward-looking statements. We undertake no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
<PAGE>
RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE RISKS DESCRIBED BELOW BEFORE YOU DECIDE TO
BUY OUR COMMON STOCK. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE
ONLY ONES FACING US. ADDITIONAL RISKS AND UNCERTAINTIES THAT WE DO NOT
PRESENTLY KNOW ABOUT OR THAT WE CURRENTLY BELIEVE ARE IMMATERIAL MAY ALSO
ADVERSELY IMPACT OUR BUSINESS. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR,
OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS WOULD LIKELY
SUFFER. IN SUCH CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD FALL, AND YOU
MAY LOSE ALL OR PART OF THE MONEY YOU PAID TO BUY OUR COMMON STOCK.
COMPETITION COULD REDUCE OUR MARKET SHARE AND HARM OUR BUSINESS
The market for signal analyzers such as our digital oscilloscopes is highly
competitive. Our principal competitors in this market are Tektronix, Inc. and
Hewlett Packard Company. Some of our principal competitors have substantially
greater sales and marketing, development and financial resources than we do. We
believe that each of these companies offers a wide range of products that
attempt to address most segments of the digital oscilloscope market.
LeCroy believes that the principal factors of competition in the signal
analyzer market are:
o a product's performance (bandwidth, sample rate, record length and
processing power)
o a product's price and quality
o the vendor's name recognition
o reputation
o product availability
o availability and quality of post-sale support
If any of our competitors surpass us or are perceived to have surpassed us with
respect to one or more of these factors, we may lose potential customers. Our
success will depend in part on our ability to maintain and develop the advanced
technology used in our signal analyzer products, as well as our ability to
offer high-performance products at a favorable price-to-performance ratio.
LeCroy believes that it currently competes effectively with respect to each of
the principal bases of competition in the signal analyzer market in the general
price range ($5,000 to $36,000) in which our digital oscilloscopes are focused.
Although there can be no assurance, we believe that we will continue to
complete effectively.
We also participate in the communication test market. Our products are focused
on data communications applications, primarily LAN network analysis. Our
expertise in signal shape analysis has enabled us to develop the LAN analyzer
product called NEWSLine(TM), which identifies problems in critical networks
that could not be discovered with conventional networking tools. NEWSLine
functions as a diagnostic tool capable of pinpointing the root cause of network
disruptions, while the network is online. Our competitors may develop products
similar to ours or use our products as models for developing their own, which
could materially and adversely affect our business, results of operations and
financial condition.
OUR OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY
We may experience significant fluctuations in our annual and quarterly
operating results due to factors such as:
o timing of new product introductions by LeCroy and our competitors
<PAGE>
o market acceptance of new or enhanced versions of our products
o changes in the product mix of sales
o changes in the relative proportions of sales in currencies other than
the United States dollar
o changes in the relative proportions of sales among distribution
channels
o changes in manufacturing costs or other expenses
o competitive pricing pressures
o changes in our annual license fee revenues
o the gain or loss of significant customers or distribution channels
o increased research and development expenses
o general economic conditions
Consequently, there can be no assurance that our revenues will continue to
increase or that we will be profitable. Additionally, it is possible that in
some future periods, our results of operations, including gross margins, will
be below the expectations of public market analysts and investors. This may
materially and adversely affect our common stock.
IF WE DO NOT SUCCESSFULLY MANAGE OUR INTERNATIONAL OPERATIONS, OUR BUSINESS
WILL SUFFER
We purchase parts, components and sub-assemblies from suppliers around the
world in a variety of currencies. We also sell products around the world in a
variety of currencies. As a result, we are exposed to risks from:
o fluctuations in foreign currency exchange rates
o unexpected changes in government policies and legal and regulatory
requirements
o imposition of tariffs and export controls
o financial instability affecting Asian markets
o transportation delays
o political instability
o general economic conditions
The relationship among the United States dollar, Swiss franc and Japanese yen,
and, to a lesser extent, the German deutschemark, British pound, French franc
and Italian lira, is a key factor in the relative fluctuations in exchange
rates. Our local currency revenues, if any, do not generally offset local
currency expenses resulting from manufacturing and the worldwide sourcing of
parts, components and sub-assemblies. Additionally, fluctuations in exchange
rates could affect the demand for our products.
We mitigate our exposure to foreign currency exchange rate fluctuations, to
some degree, by borrowing under our multicurrency revolving credit facility in
circumstances in which we are exposed to significant local currency
receivables. We do not attempt to reduce our foreign currency exchange risks by
<PAGE>
entering into other foreign currency management programs or hedging
transactions and have no plans to do so in the near future. As a consequence,
there can be no assurance that our results of operations will not be adversely
effected by fluctuations in foreign currency exchange rates in the future, as a
result of mismatches between local currency revenues and expenses, the
translation of foreign currencies into the United States dollar, our financial
reporting currency, or otherwise.
WE RELY ON SEVERAL SINGLE-SOURCE SUPPLIERS
We obtain certain parts, components and sub-assemblies from single sources.
This is particularly true with respect to several key integrated circuits made
by single-source suppliers (Motorola, Philips, TRW and LSI Logic). Alternative
sources of supply for integrated circuits would be particularly difficult to
develop over a short period of time. An interruption in supply or an increase
in price for our parts, components and sub-assemblies would have a material
adverse affect on our business, results of operations and financial condition.
WE NEED TO MANAGE OUR GROWTH EFFECTIVELY OR WE MAY NOT SUCCEED
Our ability to continue our recent growth and to successfully manage future
growth will depend on a number of factors, such as:
o improving our operational, financial and management information systems
o integrating new products into our product line
o training, motivating and managing our employees
o attracting and retaining senior managers
Our failure to effectively manage any future growth could materially and
adversely affect our business, results of operations and financial condition.
Additionally, if we are unable to leverage our core competence into new
high-growth markets, our business, results of operations and financial
condition could be materially and adversely affected.
WE DEPEND ON OUR KEY PERSONNEL AND QUALIFIED FUTURE HIRES TO IMPLEMENT OUR
EXPANSION STRATEGY
Our success depends on the efforts and abilities of our senior management and
key employees in the sales, marketing, research and development and
manufacturing areas. Many of these employees would be difficult to replace. We
do not have employment contracts with most of our key personnel. If we cannot
retain existing key managers and employ additional qualified senior employees,
our business, financial condition and results of operations could be materially
and adversely affected. Future expansion of our operations will require us to
attract, train and retain substantial numbers of new personnel. We may
experience labor disputes or union organization attempts. These factors could
increase our operating expenses. If we are unable to recruit or retain a
sufficient number of qualified employees or the costs of compensation or
employee benefits increase substantially, our business, financial condition and
results of operations could be materially and adversely affected.
WE DEPEND ON HIGH-PERFORMANCE PRODUCTS
We are primarily engaged in the development, manufacture and sale of high-end
digital oscilloscopes. We derive a substantial portion of our revenues from
sales of our principal product families of digital oscilloscopes, the LC series
and the Waverunner(TM) series. Sales of models in the LC series and Waverunner
series accounted for 39% and 55% of our total revenues in fiscal years ended
June 30, 1998 and 1999, respectively. The LC series and the Waverunner series
are expected to continue to account for a substantial portion of our total
revenues. A reduction in demand for these products, whether due to the
introduction of competing products or otherwise, would have a material adverse
effect on our business, results of operations and financial condition.
We are also engaged in the development, manufacture and sale of embedded signal
analyzers and network test products. Sales of models of our embedded signal
<PAGE>
analyzers and network test products accounted for 7% and 10% of our total
revenues in fiscal years ended June 30, 1998 and 1999, respectively. Embedded
signal analyzers and network test products are expected to account for an
increasing portion of our revenues in the future. A reduction in demand for
these products, whether due to the introduction of competing products or
otherwise, would have a material adverse effect on our business, results of
operations and financial condition.
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS
LeCroy's success substantially depends upon our technology and products. We
rely on patent and trade secret laws to protect our proprietary rights. Despite
our efforts to protect our proprietary rights, unauthorized parties may attempt
to copy aspects of our products or obtain and use information that we regard as
proprietary. Policing unauthorized use of our proprietary rights is difficult.
In addition, litigation may be necessary in the future to enforce our
intellectual property rights, to protect our trade secrets or to determine the
validity and scope of the proprietary rights of others. Litigation might result
in substantial costs and diversion of resources and management attention. Any
infringement or misappropriation of our proprietary rights and the related
costs of enforcing those rights could have a material adverse effect on our
business.
WE MAY INFRINGE UPON OTHER PARTIES' PROPRIETARY RIGHTS
Our business activities may infringe upon the proprietary rights of others, who
may assert infringement claims against us. Such claims and any resultant
litigation could subject us to significant liability for damages, might result
in invalidation of our proprietary rights and, even if not meritorious, could
result in substantial costs and diversion of resources and management
attention.
WE COULD BE AFFECTED BY GOVERNMENT REGULATION AND OTHER LEGAL UNCERTAINTIES
We manufacture our products in the United States, and sell our products and
purchase parts, components and sub-assemblies in a number of countries. We are
therefore subject to legal and regulatory requirements, particularly the
imposition of tariffs, customs and export controls, in a variety of countries.
In addition, the export of digital oscilloscopes from the United States is
subject to regulation under the Treaty for Nuclear Non-Proliferation.
Our subsidiary, Digitech Industries, Inc., has been involved in environmental
remediation activities. We do not expect that the ultimate resolution of this
environmental matter will have a material adverse effect on our results of
future operations, financial position or competitive position.
WE ARE PARTY TO A LICENSE AGREEMENT THAT REQUIRES ROYALTY PAYMENTS
In February 1994, we settled litigation with Tektronix, Inc. involving
allegations that our digital oscilloscope products infringed patents held by
Tektronix. As part of the settlement, we entered into a license agreement with
respect to such patents. Pursuant to the license agreement, we made an initial
payment of approximately $1.5 million. In addition, we are required to make
future royalty payments in a minimum aggregate amount of $3.5 million over ten
years ending June 30, 2004. We may be required to make up to an additional $3.5
million in contingent royalty payments depending on sales of certain of our
products in certain territories over the life of the patents. The total royalty
payments made to Tektronix through June 30, 1999 were $6.3 million.
The settlement agreement with Tektronix provides that Tektronix may terminate
the license in the event that:
o LeCroy acquires 20% or more of the stock of, or a controlling interest
in, any of a number of specified companies participating in the
oscilloscope market or any of their respective affiliates
o any of the specified companies or their affiliates acquires 20% or more
of the stock of, or a controlling interest in, LeCroy or an affiliate
of ours
<PAGE>
o we attempt to transfer the Tektronix license to one of the specified
companies
These provisions could preclude us from investing in or acquiring such
companies. These provisions could also discourage companies or other third
parties from attempting to acquire control of LeCroy or limit the price that
such parties might be willing to pay for our common stock. In addition, the
terms of the license agreement could limit the price that investors might be
willing to pay in the future for our common stock.
WE HAVE ADOPTED ANTI-TAKEOVER PROVISIONS THAT COULD AFFECT THE MARKET PRICE OF
OUR STOCK OR OUR ABILITY TO SELL OUR BUSINESS
Our certificate of incorporation, by-laws and stockholders rights plan, as well
as the provisions of the Tektronix settlement described above, contain
anti-takeover provisions that could make it difficult for a third party to
acquire control of us. These provisions include:
o we can issue preferred stock with rights senior to those of common
stock without any further vote or action by the stockholders
o our board of directors can eliminate the right of stockholders to act
by written consent
o our board of directors can impose various procedural and other
requirements that could make it more difficult for stockholders to
effect certain corporate actions
These provisions could limit the price that investors might be willing to pay
in the future for our common stock. These provisions could also have the effect
of delaying or preventing a change in control of LeCroy. The issuance of
preferred stock could decrease the amount of earnings and assets available for
distribution to the holders of common stock. The issuance of preferred stock
could also adversely affect the rights and powers, including voting rights,
of the holders of common stock. In certain circumstances, the issuance of
preferred stock could decrease the market price of our common stock.
OUR STOCK PRICE MAY BE VOLATILE IN THE FUTURE
Since the completion of our initial public offering in October 1995, the market
price of our common stock has fluctuated significantly. The stock price could
fluctuate in the future due to a number of factors, some of which are beyond
our control. These factors include:
o announcements of developments related to our business
o announcements of technological innovations or new products or
enhancements by LeCroy or our competitors
o sales by competitors, including sales to our customers
o sales of common stock into the public market, including by members of
management
o developments in our relationship with our customers, partners,
distributors and suppliers
o shortfalls or changes in revenue, gross margins, earnings or losses, or
other financial results from analysts' expectations
o regulatory developments
o fluctuations in results of operations
o trends in the seasonality of our sales
o general conditions in our market or the markets served by our customers
<PAGE>
In addition, in recent years the stock market in general and the market for
shares of technology stocks in particular have experienced extreme price
fluctuations, which have often been unrelated to the operating performance of
the affected companies. There can be no assurance that the market price of our
common stock will not decline substantially, or otherwise continue to
experience significant fluctuations in the future, including fluctuations that
are unrelated to our operating performance.
WE HAVE NOT DECLARED ANY DIVIDENDS
We have never declared or paid cash dividends on our common stock. We intend to
retain all available funds for use in the operation and expansion of the
business. We therefore do not intend to declare or pay any cash dividends in
the foreseeable future.
SELLING STOCKHOLDERS
The name of each selling stockholder and the aggregate number of shares
registered by this Registration Statement that each selling stockholder may
sell are set forth in the table below. We issued and sold to the selling
stockholders on June 30, 1999 a total of 500,000 shares of Series A Convertible
Redeemable Preferred Stock, for an aggregate purchase price of $10,000,000, and
warrants to purchase an aggregate of 250,000 shares of common stock, for an
aggregate purchase price of $0.01. The transaction was exempt from the
registration requirement of the Securities Act of 1933, as amended, in reliance
on Section 4(2) of the Securities Act. All of the selling stockholders are
accredited investors, as that term is defined under Regulation D of the
Securities Act.
The selling stockholders may elect to convert the Series A Preferred Stock into
an equal number of shares of common stock at any time at their option.
Additionally, under circumstances specified in the our Certificate of
Incorporation, the Series A Preferred Stock is automatically convertible into an
equal number of shares of common stock. The selling stockholders may exercise
the warrants, at an exercise price of $20 per share of common stock, at any time
until June 30, 2006. The 750,000 shares of common stock offered through this
prospectus is the common stock issuable by us upon conversion of the Series A
Preferred Stock and the exercise of the warrants.
As of October 1, 1999, the selling stockholders, with the exception of the
shares covered by this prospectus, held of record no shares of our outstanding
common stock. No selling shareholder has within the past three years held any
position, office or had any other material relationship with LeCroy or its
affiliates, except that Douglas A. Kingsley, Vice President of Advent
International, was a director of LeCroy from 1995 until October 1998 and, as
part of the financing described above, was re-elected to our board of
directors.
As of October 1, 1999, 7,713,994 shares of common stock were issued and
outstanding.
The following table sets forth certain information regarding the selling
stockholders' beneficial ownership of common stock as of October 1, 1999 and
as adjusted to reflect the sale of all of the common stock offered by
the selling stockholders:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name of Selling Shares Owned Shares to be Owned
Stockholders Prior to Offering (1) Shares Offered (2) After Offering
Advent Global GECC III Limited 525,000 525,000 0
Partnership
EnviroTech Investment Fund I 106,875 106,875 0
Limited Partnership
Adwest Limited Partnership 30,000 30,000 0
Oakstone Ventures Limited 75,000 75,000 0
Partnership
Advent Partners Limited 13,125 13,125 0
Partnership ------ ------
750,000 750,000
</TABLE>
(1) Assuming the conversion of all Series A Preferred Stock and the
exercise of all warrants.
(2) See "Plan of Distribution."
<PAGE>
USE OF PROCEEDS
LeCroy allocated the proceeds from the issuance of the Series A Preferred Stock
and warrants for general working capital purposes. LeCroy will not receive any
of the proceeds from the sale of shares by the selling stockholders.
PLAN OF DISTRIBUTION
The shares of common stock may be sold from time to time by the selling
stockholders in one or more transactions at fixed prices, at market prices at
the time of sale, at varying prices determined at the time of sale or at
negotiated prices. The selling stockholders may offer their shares of common
stock in one or more of the following transactions:
[] on any national securities exchange or quotation service on which
the common stock may be listed or quoted at the time of sale,
including the Nasdaq National Stock Market;
[] in the over-the-counter market;
[] in private transactions;
[] through options;
[] by pledge to secure debts and other obligations; or
[] a combination of any of the above transactions.
If required, we will distribute a supplement to this prospectus to describe
material changes in the terms of the offering.
The shares of common stock described in this prospectus may be sold from time
to time directly by the selling stockholders. Alternatively, the selling
stockholders may from time to time offer shares of common stock to or through
underwriters, broker/dealers or agents. The selling stockholders and any
underwriters, broker/dealers or agents that participate in the distribution of
the shares of common stock may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933. Any profits on the resale of shares of
common stock and any compensation received by any underwriter, broker/dealer or
agent may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933.
To comply with the securities laws of certain jurisdictions, the common stock
must be offered or sold only through registered or licensed brokers or dealers.
In addition, in certain jurisdictions, the common stock may not be offered or
sold unless they have been registered or qualified for sale or an exemption is
available and complied with.
Under the Securities Exchange Act of 1934, any person engaged in a distribution
of the common stock may not simultaneously engage in market-making activities
with respect to the common stock for nine business days prior to the start of
the distribution. In addition, each selling stockholder and any other person
participating in a distribution will be subject to the Securities Exchange Act
of 1934, which may limit the timing of purchases and sales of common stock by
the selling stockholders or any such other person. These factors may affect the
marketability of the common stock and the ability of brokers or dealers to
engage in market-making activities.
All expenses of this registration will be paid by LeCroy. These expenses
include the SEC's filing fees and fees under state securities or "blue sky"
laws. The selling stockholders will pay all underwriting discounts and selling
commissions, if any.
<PAGE>
CERTAIN LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for us by
Bingham Dana LLP, 150 Federal Street, Boston, Massachusetts. Roger D. Feldman,
a partner of Bingham Dana LLP, is an Assistant Secretary of LeCroy. As of
October 1, 1999, Mr. Feldman held as trustee of certain trusts an aggregate
of 78,989 shares of common stock. Mr. Feldman disclaims beneficial ownership of
these shares. Brian Keeler, a partner of Bingham Dana LLP, is also an Assistant
Secretary.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements (and schedule) included in our Annual Report on Form 10-K
for the year ended June 30, 1999, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements (and schedule) are incorporated by
reference in reliance upon Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
<PAGE>
====================================== ==================================
We have not authorized any dealer, 750,000 SHARES
salesperson or other person to give
any information or to make any
representations not contained in
this prospectus or any prospectus
supplement. You must not rely on
any unauthorized information. This
prospectus is not an offer of these LECROY CORPORATION
securities in any state where an offer
is not permitted. The information in COMMON STOCK
this prospectus is current as of
October 1, 1999. You should not
assume that this prospectus is accurate
as of any other date. -------------------
PROSPECTUS
____________ , 1999
-------------------
TABLE OF CONTENTS
Page
Where You Can Get More
Information........... 2
The Company............. 2
Forward-looking Statements 2
Risk Factors............ 3
Selling Stockholders.... 8
Use of Proceeds......... 9
Plan of Distribution.... 9
Certain Legal Matters... 10
Experts................. 10
====================================== ==================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting compensation, are:
Securities and Exchange Commission Registration Fee ------------- $ 3,610
Nasdaq National Market Fees ------------------------------------- $15,000
Fees of Registrar and Transfer Agent ---------------------------- *$ 500
Legal Fees and Expenses ----------------------------------------- *$ 5,000
Accounting Fees and Expenses ------------------------------------ *$ 5,000
Miscellaneous --------------------------------------------------- *$ 1,000
Total -------------------------------------------------------- $ 30,110
- ---------------
* Estimates
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify its officers and directors and certain other persons
to the extent and under the circumstances set forth therein.
The Amended and Restated By-Laws of the Company provide for indemnification of
officers and directors of the Company and certain other persons against
liabilities and expenses incurred by any of them in certain stated proceedings
and under certain stated conditions.
The Company has entered into indemnification agreements with its executive
officers and directors, pursuant to which the Company has agreed to indemnify
such persons to the fullest extent permitted by law, and providing for certain
other protections.
The Company maintains insurance for the benefit of its directors and officers
insuring such persons against certain liabilities, including liabilities under
applicable securities laws.
ITEM 16. EXHIBITS.
2.1 Stock Purchase Agreement, dated as of June 30, 1999, between the
Registrant and each of the investors named in Schedule 1.1
thereto.
2.2 Stock Purchase Warrants, dated as of June 30, 1999, of the
Registrant and certain investors named therein.
2.3 Registration Rights Agreement, dated as of June 30, 1999,
between the Registrant and each of the investors named in
Schedule I thereto.
3 Certificate of Designation of the Series A Convertible
Redeemable Preferred Stock, filed by the Registrant with the
Secretary of State of the State of Delaware on June 30, 1999.
4.1 Specimen Certificate for Shares of the Registrant's Common
Stock, par value $.01 per share, incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form S-1
(Reg. No. 33-95620).
5 Opinion of Bingham Dana LLP, counsel to the Registrant.
23.1 Consent of Bingham Dana LLP (included in Exhibit 5).
23.2 Consent of independent auditors, Ernst & Young LLP.
<PAGE>
24 Power of Attorney (included on signature page).
ITEM 17. UNDERTAKINGS.
(A) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(B) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(C) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant 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 registrant 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
Securities Act and will be governed by the final adjudication of such issue.
(D) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, 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 registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(E) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a posteffective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such posteffective amendment shall be deemed to be a new
<PAGE>
registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a posteffective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
<PAGE>
SIGNATURES
Pursuant to 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 has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Village of Chestnut Ridge, State of New York, on
October 1, 1999.
LECROY CORPORATION
By: /s/ John C. Maag
-------------------------------------
JOHN C. MAAG
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints John C. Maag
and Roger D. Feldman, and each of them singly, acting alone and without the
other, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution in each of them, for him and his name, place
and stead, and in any and all capacities, to do and perform any and all acts
and to sign any and all amendments (including without limitation post-effective
amendments) to this registration statement on Form S-3 and to file the same,
with all exhibits thereto and other documents in connection therewith necessary
or advisable to enable the Registrant to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements of the Securities
and Exchange Commission in respect thereof, which amendments may make such
other changes in the Registration Statement as the aforesaid attorney-in-fact
executing the same deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURE CAPACITY(-IES) DATE
/s/ Charles A. Dickinson Chairman of the Board October 1, 1999
- ---------------------------------- of the Board of Directors
CHARLES A. DICKINSON
/s/ Lutz P. Henckels President, Chief Executive October 1, 1999
- ---------------------------------- Officer and Director
LUTZ P. HENCKELS
/s/ John C. Maag Vice President--Finance, October 1, 1999
- ---------------------------------- Chief Financial Officer,
JOHN C. MAAG Secretary and Treasurer
(Principal Financial and
Accounting Officer)
<PAGE>
/s/ Robert E. Anderson Director October 1, 1999
- ----------------------------------
ROBERT E. ANDERSON
/s/ Douglas A. Kingsley Director October 1, 1999
- ----------------------------------
DOUGLAS A. KINGSLEY
/s/ Walter O. LeCroy, Jr. Director October 1, 1999
- ----------------------------------
WALTER O. LECROY, JR.
/s/ William G. Scheerer Director October 1, 1999
- ----------------------------------
WILLIAM G. SCHEERER
/s/ Allyn C. Woodward, Jr. Director October 1, 1999
- ----------------------------------
ALLYN C. WOODWARD, JR.
</TABLE>
<PAGE>
EXHIBIT INDEX
2.1 Stock Purchase Agreement, dated as of June 30, 1999, between the
Registrant and each of the investors named in Schedule 1.1
thereto.
2.2 Stock Purchase Warrants, dated as of June 30, 1999, of the
Registrant and certain investors named therein.
2.3 Registration Rights Agreement, dated as of June 30, 1999,
between the Registrant and each of the investors named in
Schedule I thereto.
3 Certificate of Designation of the Series A Convertible
Redeemable Preferred Stock, filed by the Registrant with the
Secretary of State of the State of Delaware on June 30, 1999.
5 Opinion of Bingham Dana LLP, counsel to the Registrant.
23.1 Consent of Bingham Dana LLP (included in Exhibit 5).
23.2 Consent of independent auditors, Ernst & Young LLP.
EXHIBIT 2.1
LECROY CORPORATION
STOCK PURCHASE AGREEMENT
DATED AS OF JUNE 30, 1999
<PAGE>
LECROY CORPORATION
STOCK PURCHASE AGREEMENT
Dated as of June 30, 1999
INDEX
ARTICLE I.....................................................................1
1.1 Purchase and Sale.........................................................1
1.2 Purchase and Sale of Warrant..............................................1
1.3 The Conversion Shares.....................................................2
1.4 Closing...................................................................2
1.5 Use of Proceeds...........................................................2
ARTICLE II....................................................................2
2.1 Organization and Corporate Power..........................................2
2.2 Authorization.............................................................3
2.3 Government Approvals......................................................3
2.4 Authorized and Outstanding Stock..........................................3
2.5 Subsidiaries..............................................................4
2.6 Securities Law Compliance.................................................4
2.7 Commission Documents; Financial Information...............................5
2.8 Absence of Certain Events; No Material Adverse Change.....................6
2.9 Litigation................................................................7
2.10 Compliance with Laws and Other Instruments...............................7
2.11 Taxes....................................................................7
2.12 Intentionally Omitted....................................................8
2.13 Intentionally Omitted....................................................8
2.14 Patents, Trademarks, etc.................................................8
2.15 Intentionally Omitted....................................................8
2.16 Governmental and Industrial Approvals....................................8
2.17 Federal Reserve Regulations..............................................9
2.18 Contracts and Commitments................................................9
2.19 Intentionally Omitted....................................................9
2.20 Intentionally Omitted....................................................9
2.21 No Brokers or Finders....................................................9
2.22 Transactions with Affiliates.............................................9
2.23 Intentionally Omitted....................................................9
2.24 Restrictions on Subsidiaries.............................................9
2.25 Intentionally Omitted....................................................9
2.26 U.S. Real Property Holding Corporation..................................10
2.27 Intentionally Omitted...................................................10
2.28 Corporate Records.......................................................10
2.29 Intentionally Omitted...................................................10
<PAGE>
2.30 Intentionally Omitted...................................................10
2.31 Management Presentation.................................................10
2.32 Disclosures.............................................................10
ARTICLE III..................................................................10
3.1 Accounts and Reports.....................................................11
3.2 Payment of Taxes.........................................................12
3.3 Intentionally Omitted....................................................12
3.4 Compliance with Laws, etc................................................12
3.5 Inspection...............................................................12
3.6 Corporate Existence; Ownership of Subsidiaries...........................13
3.7 Compliance with ERISA....................................................13
3.8 Intentionally Omitted....................................................13
3.9 Intentionally Omitted....................................................13
3.10 Board of Directors Meetings.............................................13
3.11 Rule 144A Information...................................................13
3.12 Regular Course of Business..............................................14
3.13 Registration of Conversion Shares and Warrant Shares....................14
ARTICLE IV...................................................................14
4.1 Distributions............................................................14
4.2 Dealings with Affiliates.................................................15
4.3 Limitation on Restrictions on Subsidiary Dividends and Other
Distributions............................................................15
4.4 No Conflicting Agreements................................................15
4.5 Intentionally Omitted....................................................15
4.6 Intentionally Omitted....................................................15
4.7 Other Negative Covenants.................................................16
ARTICLE V....................................................................16
5.1 Representations and Warranties...........................................16
5.2 Permitted Sales; Legends.................................................18
ARTICLE VI...................................................................18
6.1 Effect of Conditions.....................................................19
6.2 Representations and Warranties...........................................19
6.3 Performance..............................................................19
6.4 Amendment to Amended Certificate of Incorporation........................19
6.5 Warrant Agreement........................................................19
6.6 Opinion of Counsel.......................................................19
6.7 Certified Documents, etc.................................................19
6.8 No Material Adverse Change...............................................19
6.9 Registration Rights Agreement............................................19
6.10 Board Election..........................................................20
6.11 Consents and Waivers....................................................20
6.12 Series A Preferred Stock Certificates...................................20
ARTICLE VII..................................................................20
7.1 Effect of Conditions.....................................................20
<PAGE>
7.2 Representations and Warranties; Performance..............................20
ARTICLE VIII.................................................................20
8. Purchase Rights...........................................................20
8.1 Right of Purchase........................................................20
8.2 Right of Over-Allotment..................................................21
8.3 Definition of New Securities.............................................21
8.4 Notice from the Company..................................................21
8.5 Sale by the Company......................................................21
8.6 Termination of Rights....................................................22
ARTICLE IX...................................................................22
ARTICLE X....................................................................24
10.1 Termination by Mutual Written Consent...................................24
10.2 Termination for Breach..................................................24
10.3 Termination for Delay...................................................24
10.4 Rights After Termination................................................24
ARTICLE XI...................................................................25
11.1 Survival of Representations.............................................25
11.2 Parties in Interest.....................................................25
11.3 Shares Owned by Affiliates..............................................25
11.4 Amendments and Waivers..................................................25
11.5 Notices.................................................................25
11.6 Expenses................................................................26
11.7 Counterparts............................................................26
11.8 Effect of Headings......................................................27
11.9 Adjustments.............................................................27
11.10 Governing Law..........................................................27
11.11 Confidentiality........................................................27
11.12 Assignment.............................................................28
11.13 Waiver of Jury Trial...................................................28
<PAGE>
June 30, 1999
To: The Persons Listed on
Schedule 1.1 attached hereto
Re: Series A Convertible Redeemable Preferred Stock
Gentlemen:
LeCroy Corporation, a Delaware corporation (the "Company"), hereby agrees
with you as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale. Subject to the terms and conditions hereinafter
set forth, at the Closing (as defined below) the Company shall issue and sell
to each of the persons listed on Schedule 1.1 hereto (collectively, the
"Purchasers" and individually, a "Purchaser"), and each Purchaser shall
purchase from the Company, the number of shares of the Company's Series A
Convertible Redeemable Preferred Stock, $.01 par value per share (the "Series A
Preferred Stock"), set forth opposite the name of such Purchaser on Schedule
1.1, for the aggregate purchase price set forth opposite the name of such
Purchaser on such Schedule 1.1. The aggregate number of shares to be sold and
purchased pursuant to this Section 1.1 shall be Five Hundred Thousand (500,000)
for an aggregate purchase price of Ten Million Dollars ($10,000,000) payable as
provided in Section 1.4. The Series A Preferred Stock shall have the rights,
terms and privileges set forth in the Certificate of Designation attached
hereto as Exhibit A (the "Certificate of Designation"), which shall be filed
with, and approved by, the Secretary of State of Delaware (the Company's
Certificate of Incorporation, as amended to date, including such Certificate of
Designation, shall be referred to herein as the "Amended Certificate of
Incorporation"). The shares of Series A Preferred Stock purchased pursuant to
this Section 1.1 (the "Purchased Shares") shall be convertible following the
Closing (as hereinafter defined) in accordance with the Company's Amended
Certificate of Incorporation into 500,000 of the then outstanding shares of the
Company's common stock, par value $.01 per share ("Common Stock"). Terms used
herein as defined terms that are not defined in the context hereof shall have
the meaning set forth in Article IX.
1.2 Purchase and Sale of Warrant. At the Closing, the Company will sell
to each Purchaser a warrant (collectively, the "Warrant") at an aggregate price
of $.01 to purchase an aggregate of 250,000 shares of Common Stock. The Warrant
will be issued pursuant to a Warrant Agreement in the form of Exhibit B
attached hereto (the "Warrant Agreement"). The warrants to be issued to each
Purchaser is set forth in Schedule 1.1. The number of shares of Common Stock
issuable upon exercise of the Warrant purchased pursuant to this Section 1.2
are referred to herein as the "Warrant Shares."
<PAGE>
1.3 The Conversion Shares. The Company has authorized and reserved and
hereby covenants that it will continue to reserve, free of any preemptive
rights or encumbrances, a sufficient number of its authorized but previously
unissued shares of Common Stock to satisfy the rights of conversion of the
holders of the Purchased Shares and the issuance of the Warrant Shares. The
shares of Common Stock issued or issuable upon conversion of the Purchased
Shares are referred to herein as the "Conversion Shares."
1.4 Closing. Subject to the satisfaction or waiver of the conditions set
forth in Articles VI and VII hereof, a closing (the "Closing") of the sale and
purchase of the Purchased Shares specified in Section 1.1 above shall take
place at the offices of Hutchins, Wheeler & Dittmar, A Professional
Corporation, 101 Federal Street, Boston, Massachusetts, at 10:00 A.M., on June
30, 1999, or such other date, time and place as shall be mutually agreed upon
by the Company and the Purchasers (the "Closing Date"). At the Closing, the
Company will deliver the Purchased Shares being acquired by each Purchaser in
the form of a certificate issued in such Purchaser's name, upon receipt by the
Company of payment of the full purchase price therefor by or on behalf of each
Purchaser to the Company by wire transfer of immediately available funds.
1.5 Use of Proceeds. As an integral part of the purpose and structure of
the financing contemplated herein, the Company shall use the proceeds received
upon the sale of the Purchased Shares at the Closing to fund general working
capital, including, but not limited to, working capital for product
development, possible acquisitions of businesses, repayment of debt,
enhancement of the Company's sales and marketing capabilities, and research and
development, all as determined by the Company's Board of Directors, subject to
compliance with the covenants and agreements contained herein and in the
Company's Amended Certificate of Incorporation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
In order to induce the Purchasers to purchase the Purchased Shares and the
Warrant, the Company makes the following representations and warranties which
shall be true, correct and complete in all respects on the date hereof.
2.1 Organization and Corporate Power. The Company and each of its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation
and has all requisite corporate power and authority to own its properties and
to carry on its business as presently conducted. The Company and each of its
Subsidiaries is duly licensed or qualified to do business as a foreign
corporation in each jurisdiction wherein the character of its property, or the
nature of the activities presently conducted by it, makes such qualification
necessary and where the failure to so qualify would have a Material Adverse
Effect.
<PAGE>
2.2 Authorization. The Company has all necessary corporate power and has
taken all necessary corporate action required for the due authorization,
execution, delivery and performance by the Company of this Agreement, the
Certificate of Designation, the Warrant Agreement, the Registration Rights
Agreement referred to in Section 6.9 (the "Registration Rights Agreement") and
any other agreements or instruments executed by the Company in connection
herewith or therewith (collectively, the "Related Agreements"), and the
consummation of the transactions contemplated herein or therein, and for the
due authorization, issuance and delivery of the Purchased Shares, the Warrant,
the Warrant Shares issuable upon exercise of the Warrant and the Conversion
Shares issuable upon conversion of the Purchased Shares. Sufficient shares of
authorized but unissued Common Stock have been reserved for issuance upon
conversion of the Purchased Shares and the Warrant Shares. The issuance of the
Purchased Shares and the Warrant does not, the Warrant Shares issuable upon
exercise of the Warrant and the Conversion Shares issuable upon conversion of
the Purchased Shares will not, require any further corporate action and is not
and will not be subject to any preemptive right, right of first refusal,
conversion rights or demands of any character relating to the capital stock of
the Company. This Agreement, the Related Agreements and the other agreements
and instruments executed by the Company in connection herewith or therewith
will each be a valid and binding obligation of the Company enforceable in
accordance with its terms.
2.3 Government Approvals. No consent, approval, license or authorization
of, or designation, declaration or filing with, any court or governmental
authority is or will be required on the part of the Company in connection with
the execution, delivery and performance by the Company of this Agreement, any
of the Related Agreements and any other agreements or instruments executed by
the Company in connection herewith or therewith, or in connection with the
issuance of the Purchased Shares and Warrant or the issuance of the Warrant
Shares upon exercise of the Warrant or the issuance of the Conversion Shares
upon conversion of the Purchased Shares, except for (i) those which have
already been made or granted and (ii) the filing of a Form D and a registration
statement with the Securities and Exchange Commission (the "Commission") and
any applicable state securities commission.
2.4 Authorized and Outstanding Stock.
(a) The authorized capital stock of the Company (immediately prior to
the Closing and the transactions contemplated by Sections 1.1 and 1.2 hereof)
will consist of (i) 45,000,000 shares of Common Stock and (ii) 5,000,000 shares
of preferred stock of which 500,000 has been designated as Series A Preferred
Stock.
(b) The issued and outstanding capital stock of the Company
(immediately prior to the Closing and the transactions contemplated by Sections
1.1 and 1.2 hereof) will consist of (i) 7,674,256 shares of Common Stock and
(ii) no shares of Series A Preferred Stock. In addition, (i) 500,000 shares of
Common Stock have been reserved for issuance upon the conversion of the Series
A Preferred Stock, (ii) options to purchase 1,960,403 shares of Common Stock
have been granted and are unexercised under the Company's Amended and Restated
<PAGE>
1993 Stock Incentive Plan, and options for 106,493 shares of Common Stock are
available for future grants under the Company's Amended and Restated 1993 Stock
Incentive Plan, (iii) options to purchase 60,000 shares of Common Stock have
been granted and are unexercised under the Company's 1995 Non-Employee Director
Stock Option Plan, and options for 440,000 shares of Common Stock are available
for future grants under the Company's 1995 Non-Employee Director Stock Option
Plan. All of the issued and outstanding shares of Common Stock are, and when
issued in accordance with the terms hereof, the Purchased Shares, the Warrant
Shares and the Conversion Shares will be, duly authorized and validly issued
and fully paid and nonassessable, with no personal liability attaching to the
ownership thereof and will be free and clear of all Liens, claims, charges,
Encumbrances, or transfer restrictions imposed by or through the Company,
except for restrictions imposed by Federal or state securities or "blue sky"
laws and except for those imposed pursuant to this Agreement or the
Registration Rights Agreement. The designations, powers, preferences, rights,
qualifications, limitations and restrictions in respect of each class or series
of capital stock of the Company are as set forth in the certified corporate
charter of the Company delivered under Section 6.7 hereof and all such
designations, powers, preferences, rights, qualifications, limitations and
restrictions are valid, binding and enforceable in accordance with their terms
and in accordance with applicable law.
(c) Except as set forth in Schedule 2.4(c) hereto or as provided in
this Agreement, (i) no subscription, warrant, option, convertible security or
other right (contingent or otherwise) to purchase or acquire any shares of
capital stock of the Company is authorized by the Company or outstanding
against the Company, (ii) there is not any commitment of the Company to issue
any subscription, warrant, option, convertible security or other such right or
to issue or distribute to holders of any shares of its capital stock any
evidences of indebtedness or assets of the Company, (iii) the Company has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any shares of its capital stock or any interest therein or to pay any dividend
or make any other distribution in respect thereof and (iv) there are no
agreements, written or oral, between the Company and any holder of its capital
stock or among any holders of its capital stock, relating to the acquisition,
disposition or voting of the capital stock of the Company. No person or entity
is entitled to (i) any preemptive right, right of first refusal or similar
rights granted by the Company with respect to the issuance of any capital stock
of the Company. Except as provided in the Registration Rights Agreement, no
person or entity currently holds rights granted by the Company with respect to
the registration of any capital stock of the Company under the Securities Act
of 1933, as amended (the "Act"). All of the issued and outstanding shares of
the Company's capital stock have been offered, issued and sold by the Company
in compliance with applicable Federal and state securities laws.
2.5 Subsidiaries. Except as set forth in Schedule 2.5, the Company has no
Subsidiaries nor any investment or other interest in any Person. Except as set
forth on Schedule 2.5, the Company owns of record and beneficially, free and
clear of all Liens, charges, restrictions, claims and Encumbrances of any
nature, all of the issued and outstanding capital stock of each of its
Subsidiaries.
2.6 Securities Law Compliance. Assuming the representations and
warranties of the Purchasers set forth in Section 5.1 hereof are true and
<PAGE>
correct in all material respects, the offer and sale of the Purchased Shares,
the Warrant, the Warrant Shares and the Conversion Shares (collectively, the
"Issuable Securities") pursuant to this Agreement will be exempt from the
registration requirements of the Act. Neither the Company nor any person acting
on its behalf has, in connection with the offering of the Issuable Securities,
engaged in (i) any form of general solicitation or general advertising (as
those terms are used within the meaning of Rule 502(c) under the Act), (ii) any
action involving a public offering within the meaning of Section 4(2) of the
Act, or (iii) any action that would require the registration under the Act of
the offering and sale of the Issuable Securities pursuant to this Agreement or
that would violate applicable state securities or "blue sky" laws. The Company
has not made and will not prior to the Closing make, directly or indirectly,
any offer or sale of the Issuable Securities or of securities of the same or
similar class as the Issuable Securities if, as a result, the offer and sale
contemplated hereby could fail to be entitled to exemption from the
registration requirements of the Act. As used herein, the terms "offer" and
"sale" have the meanings specified in Section 2(3) of the Act.
2.7 Commission Documents; Financial Information.
(a) The Company has made available to the Purchasers true and
complete copies of all SEC Documents filed with the Commission prior to the
date hereof. As of their respective filing dates, the SEC Documents complied in
all material respects with the requirements of the Act, the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and the rules and regulations of
the Commission thereunder applicable to such SEC Documents, and as of their
respective dates none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company and its Subsidiaries included in the SEC Documents
comply as of their respective dates as to form in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto (except as may be indicated in the notes
thereto or, in the case of the unaudited statements, as permitted by Form 10-Q
promulgated by the Commission), and present fairly as of their respective dates
the consolidated financial position of the Company and the Subsidiaries as at
the dates thereof and the consolidated results of their operations and their
consolidated cash flows for each of the respective periods, in conformity with
GAAP. As used in this Agreement, the consolidated balance sheet of the Company
and its Subsidiaries at March 31, 1999 previously provided to the Purchasers is
hereinafter referred to as the "Balance Sheet," and March 31, 1999 is
hereinafter referred to as the "Balance Sheet Date."
(b) Except as and to the extent expressly set forth in the Balance
Sheet, or the notes, schedules or exhibits thereto, or as disclosed in the SEC
Documents, (i) as of the Balance Sheet Date, neither the Company nor the
Subsidiaries had any material liabilities or obligations (whether absolute,
contingent, accrued or otherwise) that would be required to be included on a
balance sheet or in the notes, schedules or exhibits thereto prepared in
accordance with GAAP and (ii) since the Balance Sheet Date, the Company and its
Subsidiaries have not incurred any such material liabilities or obligations
other than in the ordinary course of business.
<PAGE>
2.8 Absence of Certain Events; No Material Adverse Change. Except as
disclosed in the SEC Documents filed with the Commission prior to the date
hereof, since the Balance Sheet Date, each of the Company and its Subsidiaries
has conducted its business operations in the ordinary course and there has not
occurred any event or condition having, or that is reasonably likely to have, a
Material Adverse Effect. Without limiting the generality of the foregoing,
other than as is disclosed in the SEC Documents filed with the Commission prior
to the date hereof or on Schedule 2.8 hereto, since the Balance Sheet Date
there has not occurred:
(a) any change or agreement to change the character or nature of the
business of the Company or any of its Subsidiaries;
(b) any purchase, sale, transfer, assignment, conveyance or pledge of
the assets or properties of the Company or any of its Subsidiaries, except in
the ordinary course of business;
(c) any waiver or modification by the Company or any of its
Subsidiaries of any right or rights of substantial value, or any payment,
direct or indirect, in satisfaction of any liability, in each case, having a
Material Adverse Effect;
(d) any liability, contract, agreement, license or other commitment
entered into or assumed by or on behalf of the Company or any of its
Subsidiaries relating to the business, assets or properties of the Company or
any of its Subsidiaries, whether oral or written, except in the ordinary course
of business;
(e) any loan, advance or capital expenditure by the Company or any of
its Subsidiaries, except for loans, advances and capital expenditures made in
the ordinary course of business;
(f) any change in the accounting principles, methods, practices or
procedures followed by the Company in connection with the business of the
Company or any change in the depreciation or amortization policies or rates
theretofore adopted by the Company in connection with the business of the
Company and its Subsidiaries;
(g) any declaration or payment of any dividends, or other
distributions in respect of the outstanding shares of capital stock of the
Company or any of its Subsidiaries (other than dividends declared or paid by
any Subsidiary of the Company);
(h) any issuance of any shares of capital stock of the Company or any
of its Subsidiaries or any other change in the authorized capitalization of the
Company or any of its Subsidiaries, except as contemplated by this Agreement or
except pursuant to employee benefit plans, programs or arrangements in
existence on the date hereof, in the ordinary course of business consistent
with past practice;
(i) any grant or award of any options, warrants, conversion rights or
other rights to acquire any shares of capital stock of the Company or any of
<PAGE>
its Subsidiaries, except as contemplated by this Agreement or except pursuant
to employee benefit plans, programs or arrangements in existence on the date
hereof, in the ordinary course of business consistent with past practice; or
(j) entering into any commitment (contingent or otherwise) to do any
of the foregoing.
2.9 Litigation. Except as otherwise set forth on Schedule 2.9, there is
no litigation or governmental proceeding or investigation pending or, to the
knowledge of the Company, threatened, against the Company or any Subsidiary or
affecting any of the Company's or such Subsidiary's properties or assets, or to
the knowledge of the Company against any officer or key employee of the Company
or any Subsidiary in his or her capacity as such. Neither the Company, any
Subsidiary, nor any officer or key employee of the Company, any Subsidiary in
his or her capacity as such is, to the knowledge of the Company, in default
with respect to any order, writ, injunction, decree, ruling or decision of any
court, commission, board or other government agency.
2.10 Compliance with Laws and Other Instruments. The Company and its
Subsidiaries are in compliance with all of the provisions of this Agreement and
of its charter and bylaws, and in all material respects with the provisions of
each mortgage, indenture, lease, license, other agreement or instrument, and
each judgment, decree, judicial order, statute, and regulation (whether issued
under domestic, foreign or international law) by which any of them is bound or
to which any of them or any of their respective properties are subject except
where the failure to be in such compliance would not result in a Material
Adverse Effect. Neither the execution, delivery or performance of this
Agreement and the Related Agreements, nor the offer, issuance, sale or delivery
of the Purchased Shares and Warrant, or the Warrant Shares upon exercise of the
Warrant or the Conversion Shares upon conversion of the Purchased Shares, with
or without the giving of notice or passage of time, or both, will violate, or
result in any breach of, or constitute a default under, or result in the
imposition of any encumbrance upon any asset of the Company or any Subsidiary
pursuant to any provision of the Company's or such Subsidiary's charter or
bylaws, or any statute, rule or regulation, contract, lease, judgment, decree
or other document or instrument by which the Company or any Subsidiary is bound
or to which the Company or any Subsidiary or any of their respective properties
are subject, or, to the knowledge of the Company, will cause the Company or any
Subsidiary to lose the benefit of any right or privilege it presently enjoys
or, to the knowledge of the Company, cause any Person who is expected to
normally do business with the Company or any Subsidiary to discontinue to do so
on the same basis.
2.11 Taxes. The Company and each Subsidiary has filed all Tax returns
(including statements of estimated Taxes owed) required to be filed within the
applicable periods for such filings and has paid all Taxes required to be paid,
and has established adequate reserves (net of estimated Tax payments already
made) for the payment of all Taxes payable in respect to the period subsequent
to the last periods covered by such returns. Except as set forth on Schedule
2.11, no deficiencies for any Tax are currently assessed against the Company or
<PAGE>
any Subsidiary, and no Tax returns of the Company or any Subsidiary have been
audited during the last three (3) years, and, there is no such audit pending
or, to the knowledge of the Company, contemplated. There is no Tax Lien,
whether imposed by any federal, state or local Taxing authority, outstanding
against the assets, properties or business of the Company or any Subsidiary
except for such Tax Liens as are currently being contested in good faith and by
appropriate proceedings diligently conducted, and for which adequate reserves
have been set aside in accordance with GAAP. For the purposes of this
Agreement, the terms "Tax" and "Taxes" shall include all federal, state, local
and foreign taxes, including income, franchise, property, sales, withholding,
payroll and employment taxes.
2.12 Intentionally Omitted.
2.13 Intentionally Omitted.
2.14 Patents, Trademarks, etc. The Company and its Subsidiaries own or
possess adequate licenses or other rights to use all patents, patent
applications, trademarks, trademark applications, service marks, service mark
applications, trade names, copyrights, manufacturing processes, formulae, trade
secrets and know how (collectively, "Intellectual Property") necessary to the
conduct of their business as conducted and as proposed to be conducted, and no
claim is pending or, to the knowledge of the Company, threatened to the effect
that the operations of the Company infringe upon or conflict with the asserted
rights of any other person under any Intellectual Property. No claim is pending
or, to the knowledge of the Company, threatened to the effect that any such
Intellectual Property owned or licensed by the Company, or which the Company or
any Subsidiary otherwise has the right to use, is invalid or unenforceable by
the Company or such Subsidiary. All technical information developed by and
belonging to the Company and its Subsidiaries which has not been patented or
copywritten has been kept confidential. Neither the Company nor any Subsidiary
has granted or assigned to any other person or entity any right to manufacture,
assemble or sell the products or proposed products or to provide the services
or proposed services of the Company or such Subsidiary. No current or former
stockholder, employee, officer or director of the Company or any of its
Subsidiaries has (directly or indirectly) any right, title or interest in any
of the Intellectual Property other than such right which such Person may enjoy
as a stockholder of the Company.
2.15 Intentionally Omitted.
2.16 Governmental and Industrial Approvals. The Company and each of its
Subsidiaries has all the permits, licenses, orders, franchises and other rights
and privileges of all federal, state, local or foreign governmental or
regulatory bodies necessary for the Company and such Subsidiaries to conduct
their respective businesses as presently conducted. All such permits, licenses,
orders, franchises and other rights and privileges are in full force and effect
and no suspension or cancellation of any of them is threatened, and none of
such permits, licenses, orders, franchises or other rights and privileges will
be affected by the consummation of the transactions contemplated in this
Agreement and the Related Agreements.
<PAGE>
2.17 Federal Reserve Regulations. Neither the Company nor any of its
Subsidiaries has engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation G of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of the sale of the Purchased Shares will be used to purchase or carry any
margin security or to extend credit to others for the purpose of purchasing or
carrying any margin security or in any other manner which would involve a
violation of any of the regulations of the Board of Governors of the Federal
Reserve System.
2.18 Contracts and Commitments. All of the material contracts of the
Company or any of its Subsidiaries that are required to be described in the SEC
Documents or to be filed as exhibits thereto prior to the date hereof are
described in the SEC Documents filed prior to the date hereof or filed as
exhibits thereto and are in full force and effect. All material contracts to
which the Company or its Subsidiaries are parties on or prior to the date
hereof which will be required to be described or filed as an exhibit in the SEC
Documents required to be filed following the date hereof have been provided to
the Purchasers or are listed on Schedule 2.18 and are in full force and effect.
Neither the Company nor any of its Subsidiaries nor, to the knowledge of the
Company, any other party is in material breach of or in default under any such
contract.
2.19 Intentionally Omitted.
2.20 Intentionally Omitted.
2.21 No Brokers or Finders. No person has or will have, as a result of the
transactions contemplated by this Agreement, any right, interest or claim
against or upon the Company or any of its Subsidiaries for any commission, fee
or other compensation as a finder or broker because of any act or omission by
the Company or any of its Subsidiaries.
2.22 Transactions with Affiliates. Except as set forth on Schedule 2.22,
there are no loans, leases or other agreements, understandings or continuing
transactions between the Company or any Subsidiary on the one hand, and any
officer or director of the Company or any Subsidiary or any person owning one
percent (1%) or more of the Common Stock of the Company or any respective
family member or affiliate of such officer, director or stockholder on the
other hand.
2.23 Intentionally Omitted.
2.24 Restrictions on Subsidiaries. Except as set forth on Schedule 2.24,
there are no restrictions on the Company or any of its Subsidiaries which
prohibit or otherwise restrict the transfer of cash or other assets between the
Company and any of its Subsidiaries or between any Subsidiaries of the Company.
2.25.Intentionally Omitted.
<PAGE>
2.26 U.S. Real Property Holding Corporation. Neither the Company nor any
Subsidiary is now or has ever been a "United States real property holding
corporation," as defined in Section 897(c)(2) of the Code and Section 1.8972(b)
of the Regulations promulgated by the Internal Revenue Service, and the Company
or any Subsidiary has filed with the Internal Revenue Service all statements,
if any, with its United States income Tax returns which are required under
Section 1.8972(h) of such Regulations.
2.27 Intentionally Omitted.
2.28 Corporate Records. The minute books of the Company and each of its
Subsidiaries contain accurate, complete and current copies of all charter
documents and of all minutes of meetings, resolutions and other proceedings of
its board of directors and stockholders, duly signed by the Secretary, an
Assistant Secretary or another appropriate officer, all directors or all
stockholders, as appropriate. The stock record book of the Company and each of
its Subsidiaries are also complete, correct and current. The Company has made
available true, correct and complete copies of such minute books and stock
record books to the Purchasers.
2.29 Intentionally Omitted.
2.30 Intentionally Omitted.
2.31 Management Presentation. The Company has previously delivered to each
Purchaser a copy of the Company's Management Presentation attached hereto as
Schedule 2.31 (the "Management Presentation"). The description in the
Management Presentation of the Company's business is true and correct in all
material respects as of the date of the specific document of the Management
Presentation in which such description is found. The pro forma financial
information and financial projections included in the Management Presentation
were prepared with due care based on assumptions believed by the Company to be
reasonable, and presents the Company's good faith estimate of future results.
Schedule 2.31 lists the assumptions and risks of pro forma financial
information.
2.32 Disclosures. Neither this Agreement, any Schedule or Exhibit to this
Agreement, the Related Agreements or the Financial Statements contains any
untrue statement of a material fact or omits a material fact necessary to make
the statements made herein or therein, in light of the circumstances in which
made, not misleading. There is no fact known to the Company which, in the
Company's reasonable business judgment on the date hereof, materially and
adversely affects the business, or financial condition of the Company or its
properties or assets, which has not been set forth herein or in any other
document delivered in connection herewith.
ARTICLE III
AFFIRMATIVE COVENANTS OF THE COMPANY
Without limiting any other covenants and provisions hereof, the Company
covenants and agrees that it will observe the following covenants on and after
<PAGE>
the date hereof and for so long as the Purchasers hold any shares of Series A
Preferred Stock, unless the Advent Representative otherwise consents:
3.1 Accounts and Reports. The Company will, and will cause each of its
Subsidiaries to, maintain a standard system of accounts in accordance with GAAP
consistently applied and the Company will, and will cause each of its
Subsidiaries to, keep full and complete financial records. The Company will
furnish to each Purchaser the information set forth in this Section 3.1.
(a) Within one hundred twenty (120) days after the end of each fiscal
year, a copy of the audited annual consolidated financial statement (including
income statements and balance sheets) and cash flow statements of the Company
and its Subsidiaries as of the end of such year, prepared in accordance with
GAAP, duly certified by an independent public accountant of national
recognition selected by the Board of Directors of the Company and accompanied
by a written discussion and analysis by management, including any relevant
supporting documentation and data of such financial statements.
(b) Within forty-five (45) days after the end of each calendar
quarter (other than the last quarter in each fiscal year) an unaudited
consolidated quarterly financial statement (including income statements,
balance sheets, cash flow statements, and comparisons to budget) of the Company
and its Subsidiaries as of the end of such quarter, setting forth in each case
in comparative form the corresponding figures for the corresponding period of
the preceding fiscal year for the Company and each of its Subsidiaries, as the
case may be, all in reasonable detail and prepared in accordance with GAAP
(except for normal year end adjustments and the absence of footnotes) and
certified to by the Chief Financial Officer of the Company.
(c) At the time of delivery of each annual statement, a certificate,
executed by either the president or chief financial officer of the Company
stating (i) that such officer has caused this Agreement to be reviewed and has
no knowledge of any default by the Company or any Subsidiary in the performance
or observance of any of the provisions of this Agreement or, if such officer
has such knowledge, specifying such default, and (ii) with respect to the
delivery of annual statements, a statement as to the then conversion value of
the Purchased Shares and the number of Conversion Shares into which each share
of Series A Preferred Stock may then be converted.
(d) Promptly upon receipt thereof and review by the Company's Board
of Directors, any written report, so called "management letter," and any other
communication submitted to the Company or any Subsidiary by its independent
public accountants relating to the business, prospects or financial condition
of the Company and its Subsidiaries;
(e) Promptly after the commencement thereof, notice of (i) all
actions, suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Company or any Subsidiary which, if successful, could have a
<PAGE>
Material Adverse Effect; and (ii) all material defaults by the Company or any
Subsidiary (whether or not declared) under any agreement for money borrowed
(unless waived or cured within applicable grace periods);
(f) Promptly upon sending, making available, or filing the same, all
reports and financial statements which the Company (or any Subsidiary) shall
send or make available generally to the stockholders of the Company as such or
to the Commission; and
(g) Such other information with regard to the business, properties or
the condition or operations, financial or otherwise, of the Company or its
Subsidiaries as the Purchasers may from time to time reasonably request.
3.2 Payment of Taxes. The Company will pay and discharge (and cause any
Subsidiary to pay and discharge) all Taxes, assessments and governmental
charges or levies imposed upon it, the Company and the Subsidiaries or upon
their respective income or profits, or upon any properties belonging to each of
them, prior to the date on which penalties attach thereto, and all lawful
claims which, if unpaid, might become a Lien or charge upon any properties of
the Company (or any Subsidiary), provided that neither the Company nor any
Subsidiary shall be required to pay any such Tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if the
Company or such Subsidiary shall have set aside on its books adequate reserves
with respect thereto.
3.3 Intentionally Omitted.
3.4 Compliance with Laws, etc. The Company will comply (and cause each of
its Subsidiaries to comply) with all applicable laws, rules, regulations and
orders of any governmental authority, the noncompliance with which could result
in a Material Adverse Effect.
3.5 Inspection. Upon prior notice, at any reasonable time during normal
business hours and from time to time, the Company and each of its Subsidiaries
will permit any one or more of the Purchasers, or any of their authorized
agents or representatives, to examine and make copies of and extracts from the
records and books of account of and visit the properties of the Company and any
of its Subsidiaries and to discuss the Company's affairs, finances and accounts
with any of its officers or directors; provided that any Person or Persons
exercising rights under this Section 3.5 shall (i) use all reasonable efforts
to ensure that any such examination or visit results in a minimum of disruption
to the operations of the Company or any of its subsidiaries and (ii) prior to
the Company disclosing or providing access to information with respect to the
Company, shall agree in writing to keep all proprietary information of the
Company or any of its subsidiaries disclosed to him in the course of such
inspection confidential in a manner consistent with prudent business practices
and treatment of such Person's or Persons' own confidential information. The
rights granted under this Section 3.5 shall be in addition to any rights which
any Purchaser may have under applicable law in its capacity as a stockholder of
the Company.
<PAGE>
3.6 Corporate Existence; Ownership of Subsidiaries. The Company will, and
will cause its Subsidiaries to, at all times preserve and keep in full force
and effect their corporate existence, and rights and franchises material to the
business of the Company and its Subsidiaries, taken as a whole, and will
qualify, and will cause each of its Subsidiaries to qualify, to do business as
a foreign corporation in any jurisdiction where the failure to do so would have
a Material Adverse Effect; provided, however, that the Company may merge or
liquidate one or more of its Subsidiaries into the Company or into another
Subsidiary. The Company or a Subsidiary shall at all times own of record and
beneficially, free and clear of all Liens, charges, restrictions, claims and
Encumbrances of any nature, all of the issued and outstanding capital stock of
each of its Subsidiaries, except for LeCroy Newco Corporation.
3.7 Compliance with ERISA. The Company will comply (and cause each of its
Subsidiaries to comply) in all material respects with all minimum funding
requirements applicable to any pension or other employee benefit plans which
are subject to ERISA or to the Code, and comply in all other material respects
with the provisions of ERISA and the Code, and the rules and regulations
thereunder, which are applicable to any such plan. Neither the Company nor any
of its Subsidiaries will permit any event or condition to exist which could
permit any such plan to be terminated under circumstances which cause the Lien
provided for in Section 3068 of ERISA to attach to the assets of the Company or
any of its Subsidiaries.
3.8 Intentionally Omitted.
3.9 Intentionally Omitted.
3.10 Board of Directors Meetings. The Company shall use its best efforts
to cause the election of, and to thereafter continue in office, the Advent
Representative (as defined below) as a member of its Board of Directors. The
Advent Representative will be nominated by Advent Global GECC III Limited
Partnership, and shall initially be Douglas A. Kingsley. The Amended
Certificate of Incorporation (and all subsequent amendments and restatements
thereof) or By-laws of the Company shall at all times provide for
indemnification of the directors and limitations on the liability of the
directors to the fullest extent permitted under applicable state law. The
Company shall reimburse the Advent Representative for his reasonable travel
expenses, including the cost of airfare and any necessary meals and lodging,
incurred in connection with attending meetings of the Board of Directors. In
addition, the Company shall maintain at all times a Compensation Committee and
an Audit Committee of the Board of Directors. A vacancy in the directorship to
be occupied by the Advent Representative shall be filled only by a nominee of
the Purchasers holding a majority of Purchased Shares who must be appointed by
the Board of Directors in accordance with the by-laws of the Company. The
Advent Representative shall be a member of the Compensation Committee and shall
have those responsibilities as may be determined from time to time by a
majority of the entire Board of Directors.
3.11 Rule 144A Information. The Company shall, upon the written request of
any Purchaser, provide to such Purchaser and to any prospective institutional
<PAGE>
transferee of the Purchased Shares or Warrant designated by such Purchaser,
such financial and other information as is available to the Company or can be
reasonably obtained by the Company without material expense and as such
Purchaser may reasonably determine is required to permit such transfer to
comply with the requirements of Rule 144A promulgated under the Act.
3.12 Regular Course of Business. The Company agrees that on and after the
date hereof the Company and each of its Subsidiaries will carry on its business
diligently and in the ordinary course and substantially in the same manner as
heretofore carried on and will use its best efforts to preserve its present
business organization intact, keep available the services of its present
officers, agents and employees, keep its insurable properties insured against
liability and the perils of casually, fire and extended coverage, maintain
adequate insurance against other hazards and risks and preserve its present
relationships with suppliers, customers and other persons having business
dealings with it.
3.13 Registration of Conversion Shares and Warrant Shares. The Company
shall, within one hundred twenty (120) calendar days from the date hereof, file
with the Commission a registration statement on Form S-3 (or any successor form
to Form S-3) for a public resale offering by the Purchasers of the Conversion
Shares and Warrant Shares issuable to the Purchasers and shall use its best
efforts to cause such registration statement to become and remain effective for
the period ending on the first to occur of (x) the date the resale of all of
the Conversion Shares and Warrant Shares registered thereunder is complete or
(y) the fifth anniversary of the date hereof. Such registration shall be
effected pursuant to the terms of the Registration Rights Agreement attached
hereto as Exhibit C.
ARTICLE IV
NEGATIVE COVENANTS OF THE COMPANY
Without limiting any other covenants and provisions hereof, the Company
covenants and agrees that it will comply (and will cause each Subsidiary to
comply) with each of the provisions of this Article IV on and after the date
hereof until conversion of all the Series A Preferred Stock.
4.1 Distributions. No dividends shall be declared or paid or set aside
for payment on any shares of any class or classes of stock of the Company or
any series thereof ranking, as to dividends, on a parity with or junior to the
Series A Preferred Stock for any period unless full cumulative dividends have
been or contemporaneously are declared and paid, or declared and sum sufficient
for the payment thereof set apart for such payment, on the Series A Preferred
Stock for all dividend payment periods terminating on or prior to the date of
payment of such full cumulative dividends. When dividends are not paid in full,
as aforesaid, upon the shares of the Series A Preferred Stock and any other
shares of any class or classes of stock or series thereof ranking on a parity
as to dividends with the Series A Preferred Stock, all dividends declared upon
<PAGE>
shares of the Series A Preferred Stock and any other shares of such class or
classes or series thereof ranking on a parity as to dividends with the Series A
Preferred Stock shall be declared pro rata so that the amount of dividends
declared per share on the Series A Preferred Stock and such other shares shall
in all cases bear to each other the same ratio that accrued and unpaid
dividends per share on the shares of the Series A Preferred Stock and such
other shares bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on
the Series A Preferred Stock which may be in arrears. In addition, when and if
the Board of Directors shall declare a dividend payable with respect to the
then outstanding shares of Common Stock of the Corporation, the holders of the
Series A Preferred Stock shall be entitled to the amount of dividends per share
as would be payable on the largest number of whole shares of Common Stock into
which each share of Series A Preferred Stock could then be converted (such
number to be determined as of the record date for the determination of holders
of Common Stock entitled to receive such dividend). Declared and unpaid
dividends on the Series A Preferred Stock will be payable upon the liquidation
or winding up of the Corporation first to the holders of Series A Preferred
Stock and then to the holders of Common Stock.
4.2 Dealings with Affiliates. Except as set forth on Schedule 4.2 and
except for transactions made on an arms-length basis, or through the Company's
normal and customary dealings, the Company will not enter into any transaction
including, without limitation, any loans or extensions of credit or royalty
agreements with any officer or director of the Company or any Subsidiary or
holder of any class of capital stock of the Company, or any member of their
respective immediate families or any corporation or other entity directly or
indirectly controlled by one or more of such officers, directors or
stockholders or members of their immediate families, except for (i) advances in
reasonable amounts made to employees of the Company or any Subsidiary for valid
business purposes, provided that such advances are repaid to the Company within
ninety (90) days, and (ii) advances made to employees of the Company, upon
approval of the Board of Directors, related to such employees' exercise of
stock options.
4.3 Limitation on Restrictions on Subsidiary Dividends and Other
Distributions. Except as set forth on Schedule 4.3, the Company shall not
permit any of its Subsidiaries, directly or indirectly, to create or suffer to
exist or become effective any Encumbrances or restrictions on the ability of
any of its Subsidiaries to (i) pay dividends or make any other distributions on
its capital stock or any other interest or participation in its profit owned by
any of the Company or any of its Subsidiaries, or pay any indebtedness owed by
any of the Subsidiaries, (ii) make loans or advances to the Company, or (iii)
transfer any of its properties or assets to the Company.
4.4 No Conflicting Agreements. The Company agrees that neither it nor any
Subsidiary will, without the consent of a majority in interest of the
Purchasers, enter into or amend any agreement, contract, commitment or
understanding which would restrict or prohibit the exercise by the Purchasers
of any of their rights under this Agreement.
4.5 Intentionally Omitted.
4.6 Intentionally Omitted.
<PAGE>
4.7 Other Negative Covenants. The Company hereby further covenants and
agrees that it will not:
(a) Create or authorize the creation of any additional class or
series of shares of stock or equity unless the same ranks junior to the Series
A Preferred Stock as to conversion, redemption, the distribution of assets on
the liquidation, dissolution or winding up of the Company, or increase the
authorized amount of the Series A Preferred Stock or any series thereof or
increase the authorized amount of any additional class or series of shares of
stock unless the same ranks junior to the Series A Preferred Stock as to
conversion, redemption, or the distribution of assets on the liquidation,
dissolution or winding up of the Company, or create or authorize any obligation
or security convertible into shares of Series A Preferred Stock or into shares
of any other class or series of stock unless the same ranks junior to the
Series A Preferred Stock as to conversion, redemption or the distribution of
assets on the liquidation, dissolution or winding up of the Company, whether
any such creation, authorization or increase shall be by means of amendment to
the Amended Certificate of Incorporation or by merger, consolidation or
otherwise;
(b) Amend, alter or repeal its Amended Certificate of Incorporation,
Bylaws or other organizational documents in any manner, or take any other
corporate action, that would alter, change or adversely affect the terms,
conditions, rights or privileges of the Series A Preferred Stock, except any
amendment to its Amended Certificate of Incorporation in connection with the
creation of an additional class or series of shares permitted pursuant to
Section 4.7(a);
(c) Redeem, purchase or otherwise acquire for value (or pay into or
set aside for a sinking fund for such purpose) any of the Common Stock of any
class, any other capital stock of the Company, or any of the Company's options,
warrants or convertible or exchangeable securities except that these provisions
shall not prohibit the Company from completing any redemption permitted by the
Certificate of Incorporation and except for acquisitions of securities of
employees of the Company or its affiliates; or
(d) within one (1) year following the Closing, merge or consolidate
with or into any other corporation or sell, lease or convey all or
substantially all of its property or business without obtaining the prior
written consent of the Purchasers.
ARTICLE V
INVESTMENT REPRESENTATIONS
5.1 Representations and Warranties. Each Purchaser hereby severally as to
itself (but not jointly) represents and warrants to the Company, understanding
and agreeing that the Company is entering into this Agreement in part in
reliance on such representations and warranties, as follows:
<PAGE>
(a) Such Purchaser is an "Accredited Investor" as that term is
defined in Rule 501(a) of Regulation D promulgated under the Act;
(b) Such Purchaser is duly authorized to execute this Agreement and
the Related Agreements, and assuming due execution and delivery by the Company
of the Agreement and the Related Agreements, this Agreement and the Related
Agreements to which such Purchaser is a party constitute legal, valid and
binding obligations of such Purchaser, enforceable against such Purchaser in
accordance with their respective terms;
(c) Such Purchaser has been advised by the Company that none of the
Purchased Shares or Warrant have been registered under the Act, that the
Purchased Shares and Warrant will be issued on the basis of the statutory
exemption provided by Section 4(2) of the Act or Regulation D promulgated
thereunder, or both, relating to transactions by an issuer not involving any
public offering and under similar exemptions under certain state securities
laws, that this transaction has not been reviewed by, passed on or submitted to
any federal or state agency or self-regulatory organization where an exemption
is being relied upon, and that the Company's reliance thereon is based in part
upon the representations made by such Purchaser in this Agreement and the
Related Agreements. Such Purchaser acknowledges that he, she or it has been
informed by the Company of, or is otherwise familiar with, the nature of the
limitations imposed by the Act and the rules and regulations thereunder on the
transfer of securities;
(d) Such Purchaser has been further advised and understands that no
public market now exists for the Purchased Shares or Warrant and that a public
market may never exist for the Purchased Shares and Warrant and may cease to
exist for the Conversion Shares;
(e) Such Purchaser is purchasing the Purchased Shares and Warrant for
investment purposes, for its own account and not with a view to, or for sale in
connection with, any distribution thereof in violation of federal or state
securities laws;
(f) By reason of its business or financial experience, such Purchaser
has the capacity to protect its own interest in connection with the
transactions contemplated hereunder;
(g) Such Purchaser is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Purchased Shares
and Warrant; provided, however, that nothing in this Section 6.1 shall be
deemed to vitiate or limit the representations, warranties and covenants of the
Company contained in this Agreement; and
(h) No person has or will have, as a result of the transactions
contemplated by this Agreement, any right, interest or claim against or upon
any Purchaser, the Company, or any of its Subsidiaries for any commission, fee
or other compensation as a finder or broker because of any act or omission by
such Purchaser.
<PAGE>
5.2 Permitted Sales; Legends. Notwithstanding the foregoing
representations, the Company agrees that it will permit (i) a distribution of
Purchased Shares, Conversion Shares or Warrant Shares by a partnership to one
or more of its partners or investors or a limited liability company and its
members, where no consideration is exchanged therefor by such members,
partners, or to a retired or withdrawn partner who retires or withdraws after
the date hereof in full or partial distribution of his interest in such
partnership, or to the estate of any such partner or the transfer by gift, will
or intestate succession of any partner to his spouse or to the siblings, lineal
descendants or ancestors of such partner or his spouse, or to a trust created
for the benefit of one or more of the foregoing, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if it were an
original Purchaser hereunder, and (ii) a sale or other transfer of any of the
Purchased Shares, Conversion Shares, the Warrant Shares or the Warrant upon
obtaining assurance satisfactory to the Company that such transaction is exempt
from the registration requirements of, or is covered by an effective
registration statement under, the Act and applicable state securities or
"blue-sky" laws, including, without limitation, receipt of an unqualified
opinion to such effect of counsel reasonably satisfactory to the Company. The
certificates representing the Purchased Shares shall bear a legend evidencing
such restriction on transfer substantially in the following form:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended ("the Act"), and have been acquired
for investment and not with a view to, or in connection with, the sale or
distribution thereof. Such shares may not be sold, offered for sale,
pledged or hypothecated in the absence of such registration unless (a) the
Corporation receives an opinion of counsel reasonably satisfactory to it
stating that such sale or transfer is exempt from the registration and
prospectus delivery requirements of the Act, (b) it is established to the
satisfaction of the Corporation that such sale or transfer is in a
transaction which is exempt under, or otherwise in compliance with, such
laws or (c) the Corporation receives a "no action" letter or similar
declaration from the Securities and Exchange Commission to the effect that
such sale or transfer without registration will not result in a
recommendation by said Commission that action be taken with respect
thereto. Copies of the agreements covering the purchase of these shares
and restricting the sale, assignment, transfer, or other disposition of,
or the voting of, the shares represented by this certificate may be
obtained at no cost by written request made by the holder of record of
this certificate to the Secretary of the Corporation at the principal
executive offices of the Corporation.
The Corporation is authorized to issue more than one class of stock.
Stockholders may obtain, upon written request and without charge, a
statement of the rights, preferences, privileges, and restrictions granted
to or imposed upon each class or series of shares authorized to be issued
and upon the holders thereof from the principal office of the
Corporation."
ARTICLE VI
<PAGE>
CONDITIONS OF PURCHASERS' OBLIGATION
6.1 Effect of Conditions. The obligation of the Purchasers to purchase
and pay for the Purchased Shares and the Warrant at the Closing, if any, shall
be subject at their election to the satisfaction of each of the conditions
stated in the following Sections of this Article VI.
6.2 Representations and Warranties. The representations and warranties of
the Company contained in this Agreement shall be true and correct on the date
of the Closing, and the Purchasers shall have received a certificate dated as
of such Closing and signed on behalf of the Company to that effect.
6.3 Performance. The Company shall have performed and complied with all
of the agreements, covenants and conditions contained in this Agreement
required to be performed or complied with by it at or prior to the Closing, and
the Purchasers shall have received a certificate dated as of such Closing and
signed on behalf of the Company to that effect.
6.4 Amendment to Amended Certificate of Incorporation. The Amended
Certificate of Incorporation of the Company shall have been amended by the
filing with, and acceptance by, the Secretary of State of Delaware of the
Certificate of Designation.
6.5 Warrant Agreement. A Warrant Agreement in the form attached hereto as
Exhibit B shall have been executed by the Company and each of the Purchasers.
6.6 Opinion of Counsel. The Purchasers shall have received an opinion,
dated the date of the Closing, from Bingham Dana LLP, counsel to the Company,
in the form attached hereto as Exhibit D.
6.7 Certified Documents, etc. Counsel for the Purchasers shall have
received a copy of the Company's Certificate of Incorporation, as amended,
certified by the Secretary of State of the State of Delaware and copies of the
Company's ByLaws certified by its Secretary, as well as any and all other
documents, including certificates as to votes adopted and incumbency of
officers and certificates from appropriate authorities as to the legal
existence and good standing of the Company and its Subsidiaries, which the
Purchasers or their counsel may reasonably request.
6.8 No Material Adverse Change. The business, properties, assets or
condition (financial or otherwise) of the Company and its Subsidiaries shall
not have been materially adversely affected since the date of this Agreement,
whether by fire, casualty, act of God or otherwise, and there shall have been
no other changes in the business, properties, assets or condition (financial or
otherwise), of the Company or any of its Subsidiaries that would have a
material adverse effect on their respective businesses or assets.
6.9 Registration Rights Agreement. The Company and the Purchasers shall
have executed the Registration Rights Agreement in the form of Exhibit C
attached hereto.
<PAGE>
6.10 Board Election. Concurrently with the Closing, the Advent
Representative shall have been appointed as a Director of the Company.
6.11 Consents and Waivers. The Company shall have obtained all consents or
waivers necessary to execute this Agreement and the other agreements and
documents contemplated herein, to issue the Purchased Shares, and the Warrant
and to carry out the transactions contemplated hereby and thereby. All
corporate and other action and governmental filings necessary to effectuate the
terms of this Agreement, the Related Agreements, the Purchased Shares, the
Conversion Shares, the Warrant and the Warrant Shares and other agreements and
instruments executed and delivered by the Company in connection herewith shall
have been made or taken.
6.12 Series A Preferred Stock Certificates. The Company shall have
delivered a stock certificate to each Purchaser representing that number of
shares of Series A Preferred Stock set forth beside such Purchaser's name on
Schedule 1.1 attached hereto.
ARTICLE VII
CONDITIONS OF THE COMPANY'S OBLIGATION
7.1 Effect of Conditions. The Company's obligation to sell the Purchased
Shares and the Warrant shall be subject at its election to the satisfaction of
each of the conditions stated in the following Sections of this Article VII.
7.2 Representations and Warranties; Performance. The representations and
warranties of the Purchasers contained in this Agreement shall be true and
correct on the date of the Closing with the same effect as though made on and
as of that date and, with respect to the Company's obligation to issue and
deliver Purchased Shares and Warrant to any Purchaser, such Purchaser shall
have tendered payment for the Purchased Shares at the Closing by wire transfer
to an account designated in writing by the Company in accordance with Section
1.4 hereof.
ARTICLE VIII
PREEMPTIVE RIGHT
8. Purchase Rights.
8.1 Right of Purchase. The Company hereby grants to each Purchaser
so long as it shall own, of record or beneficially, or have the right to
acquire from the Company, any Series A Preferred Stock, the right to purchase
all or part of his or its Pro Rata Share of New Securities (as such term is
defined herein) which the Company, from time to time, proposes to sell and
issue. For purposes of this purchase right, the term "Pro Rata Share" shall
mean the ratio of the number of shares of Series A Preferred Stock (calculated
on a fully converted basis, including without limitation the Conversion Shares
and Warrant Shares) which such Purchaser owns to the total number of shares of
Series A Preferred Stock (calculated on a fully converted basis) and shares of
Common Stock then outstanding.
<PAGE>
8.2 Right of OverAllotment. The Purchasers shall have a right of
overallotment pursuant to this Section 8.2 such that to the extent a Purchaser
does not exercise its or his purchase right in full hereunder, such additional
shares of New Securities which such Purchaser did not purchase may be purchased
by the other Purchasers in proportion to the total number of shares of Series A
Preferred Stock, which each such other Purchaser owns or has the right to
acquire from the Company compared to the total number of shares of Series A
Preferred Stock which all such other Purchasers own or have the right to
acquire from the Company.
8.3 Definition of New Securities. "New Securities" shall mean any
capital stock of the Company whether now authorized or not, and rights, options
or warrants to purchase capital stock, and securities of any type whatsoever
that are, or may become convertible into or exchangeable for capital stock,
issued on or after the date hereof; provided, however, that the term "New
Securities" does not include (a) securities purchased under this Agreement, the
Warrant, the Warrant Shares or the Conversion Shares, (b) Common Stock issued
as a stock dividend to holders of Common Stock or upon any stock split,
subdivision or combination of shares of Common Stock, (c) shares (or options or
rights to acquire such shares) of the Company's Common Stock (such number of
shares shall be proportionately adjusted to reflect any stock dividend, stock
split or other form of recapitalization occurring after the date hereof)
reserved for issuance upon exercise of options pursuant to the Company's
Amended and Restated 1993 Stock Incentive Plan and the Company's 1995
Non-Employee Director Stock Option Plan that have been or may be granted by the
Company's Board of Directors, and (d) securities issued pursuant to an
acquisition or Strategic Financing, provided that (i) any such transaction is
approved by a majority of the Company's Board of Directors. For purposes of
this Section 8.3, the term "Strategic Financing" shall mean any sale or
issuance of capital stock of the Company in connection with an operational,
technical or strategic contract, agreement, partnership or joint venture
wherein the primary purpose of such a transaction is not to raise funds, but
rather to develop a strategic partnering or alliance with the Company.
8.4 Notice from the Company. In the event the Company proposes to
undertake an issuance of New Securities, it shall give each Purchaser written
notice of its intention, describing the type of New Securities and the price
and the terms upon which the Company proposes to issue the same. Each Purchaser
shall have twenty (20) business days from the date of receipt of any such
notice to agree to purchase up to their Pro Rata Share of such New Securities
(and any overallotment amount pursuant to the operation of Section 8.2 hereof)
for the price and upon the terms specified in the notice by giving written
notice to the Company and stating therein the quantity of New Securities to be
purchased.
8.5 Sale by the Company. In the event any Purchaser fails to
exercise in full his or its purchase right (after giving effect to the
overallotment provision of Section 8.2 hereof), the Company shall have ninety
(90) days thereafter to sell the New Securities with respect to which such
Purchaser purchase right was not exercised, at a price and upon terms no more
favorable to the purchasers thereof than specified in the Company's notice. To
<PAGE>
the extent the Company does not sell all the New Securities offered within said
ninety (90) day period, the Company shall not thereafter issue or sell such New
Securities without first again offering such securities to each Purchaser in
the manner provided above.
8.6 Termination of Rights. The rights granted under this Article
VIII shall expire immediately prior to, and shall not apply in connection with
the conversion of all of the Purchased Shares.
ARTICLE IX
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Act" shall have the meaning set forth in Section 2.4(c).
"Advent Representative" shall have the meaning set forth in Section 3.10.
"Agreement" means this Stock Purchase Agreement as from time to time
amended and in effect between the parties.
"Closing" and "Closing Date" shall the meanings set forth in Section 1.4.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall have the meaning set forth in Section 2.3.
"Common Stock" will include (a) the Company's Common Stock as authorized
on the date of this Agreement, (b) any other capital stock of any class or
classes of the Company authorized on or after the date hereof, the holders of
which shall have the right, without limitation as to amount, either to all or
to a share of the balance of current dividends and liquidating dividends after
the payment of dividends and distributions on any shares entitled to
preference, and (c) any other securities of the Company into which or for which
any of the securities described in (a) or (b) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.
"Company" means and shall include LeCroy Corporation, a Delaware
corporation, its predecessors, successors and assigns.
"Confidential Information" shall have the meaning set forth in Section
11.11.
"Conversion Shares" shall have the meaning set forth in Section 1.3.
<PAGE>
"Encumbrances" means any lien, mortgage, security interest, pledge,
restriction on transferability, defect of title or other claim, charge or
encumbrance of any nature whatsoever on any property or property interest.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Intellectual Property" shall have the meaning set forth in Section 2.14.
"Knowledge" of the Company and similar terms shall mean the actual
knowledge of the Company's Chief Executive Officer, the Chief Financial Officer
and those members of the Company's senior management who report directly to the
Company's Chief Executive Officer.
"Lien" means, with respect to any asset, any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien, charge,
restriction, adverse claim by a third party, title defect or encumbrance of any
kind (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any assignment or other conveyance of any right to
receive income and any assignment of receivables with recourse against
assignor), any filing of any financing statement as debtor under the Uniform
Commercial Code or comparable law of any jurisdiction and any agreement to give
or make any of the foregoing.
"Material Adverse Effect" shall mean a material adverse effect upon the
business, condition (financial or otherwise), assets or results of operations
of the Company and the Subsidiaries taken as a whole.
"Permitted Recipients" shall have the meaning set forth in Section 11.11.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, trust or unincorporated organization or a government or
agency or political subdivision thereof.
"Purchased Shares" shall have the meaning set forth in Section 1.1.
"Purchaser" shall have the meaning set forth in Section 1.1.
"Registration Rights Agreement" shall have the meaning set forth in
Section 2.2.
"Related Agreements" shall have the meaning set forth in Section 2.2.
<PAGE>
"SEC Documents" means all reports, schedules, registration statements and
other documents (including all exhibits and schedules thereto) filed by the
Company with the Commission.
"Series A Preferred Stock" shall have the meaning set forth in Section
1.1.
"Subsidiary" or "Subsidiaries" means any corporation, association or other
business entity of which the Company and/or any of its other Subsidiaries (as
herein defined), directly or indirectly owns at the time more than fifty
percent (50%) of the outstanding voting shares of every class of such
corporation or trust other than directors' qualifying shares.
"Tax" and "Taxes" shall have the meaning set forth in Section 2.11.
"Warrant" shall have the meaning set forth in Section 1.2.
"Warrant Agreement" shall have the meaning set forth in Section 1.2.
"Warrant Shares" shall have the meaning set forth in Section 1.2.
ARTICLE X
TERMINATION
10.1 Termination by Mutual Written Consent. This Agreement may be
terminated, and the transactions contemplated hereby abandoned, at any time
prior to the Closing by the written agreement of the Company and the
Purchasers.
10.2 Termination for Breach. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time before the
Closing (or any date to which such Closing may have been extended by the
written agreement of the parties obligated to perform at such Closing) by any
party obligated to perform at such Closing if the conditions for its benefit
set forth in Article VI or VII, as the case may be, have not been satisfied on
or prior to such Closing and if the conditions for the benefit of the other
parties have been satisfied or waived, and if such performing party shall have
given written notice of termination to the nonperforming party.
10.3 Termination for Delay. Unless earlier terminated in accordance with
Section 10.1 or 10.2, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned by the Company or the Purchasers if the
Closing does not occur by June 30, 1999, provided, however, that the right to
terminate this Agreement under this Section 10.3 shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or before such
date.
10.4 Rights After Termination. Upon termination of this Agreement under
this Article X, the parties shall be released from all obligations arising
<PAGE>
hereunder, except as to any liability for misrepresentations, breach or default
in connection with any warranty, representation, covenant, duty or obligation
given, occurring or arising prior to the date of termination and except as to
the Company's obligations under Section 11.6 hereof.
ARTICLE XI
MISCELLANEOUS
11.1 Survival of Representations. The representations, warranties,
covenants and agreements made herein or in any certificates or documents
executed in connection herewith shall survive the execution and delivery hereof
and the Closing of the transaction contemplated hereby until the earlier of (i)
five (5) years from the date hereof, or (ii) the conversion of all of the
Purchased Shares.
11.2 Parties in Interest. Except as otherwise set forth herein, all
covenants, agreements, representations, warranties and undertakings contained
in this Agreement shall be binding on and shall inure to the benefit of the
respective successors and assigns of the parties hereto (including permitted
transferees of any of the Purchased Shares). Except as may be required to be
disclosed by order of a court or otherwise required by law, the parties agree
to maintain in confidence the terms of the purchase of the Purchased Shares
hereunder, except that the Purchasers may disclose such terms to their
investors in the ordinary course and except that the Company may disclose such
terms to its stockholders, accountants, bankers and advisors in the ordinary
course.
11.3 Shares Owned by Affiliates. For the purposes of applying all
provisions of this Agreement which condition the receipt of information or
access to information or exercise of any rights upon ownership of a specified
number or percentage of shares, the shares owned of record by any affiliate of
a Purchaser shall be deemed to be owned by such Purchaser. For the purpose of
this Agreement, the term "affiliate" shall mean any Person controlling,
controlled by or under common control with, a Purchaser and any general or
limited partner of a Purchaser. Without limiting the foregoing, each Purchaser
shall be considered an affiliate of each other Purchaser.
11.4 Amendments and Waivers. Amendments or additions to this Agreement may
be made and compliance with any term, covenant, agreement, condition or
provision set forth herein may be omitted or waived (either generally or in a
particular instance and either retroactively or prospectively) upon the written
consent of the Company and the holders of a majority of the Conversion Shares,
assuming for such purposes the conversion of all shares. Prompt notice of any
such amendment or waiver shall be given to any Person who did not consent
thereto. This Agreement (including the Schedules and Exhibits annexed hereto,
which are an integral part of this Agreement) constitutes the full and complete
agreement of the parties with respect to the subject matter hereof.
11.5 Notices. All notices, requests, consents, reports and demands shall
be in writing and shall be hand delivered, sent by facsimile or other
<PAGE>
electronic medium, or mailed, postage prepaid, to the Company or to the
Purchasers at the address set forth below or to such other address as may be
furnished in writing to the other parties hereto:
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The Company: LeCroy Corporation
700 Chestnut Ridge Road
Chestnut Ridge, NY 10977-6499
Attention: President
Tel: (914) 425-2000
Fax: (914) 578-6061
with copy to: Bingham Dana LLP
150 Federal Street
Boston, MA 02110
Attention: Roger Feldman, Esq.
Tel: (617) 951-8000
Fax: (617) 951-8736
The Purchasers: The address set forth opposite the Purchaser's name on Schedule 1.1
attached hereto.
with copy to: Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
Attention: Anthony J. Medaglia, Jr., P.C.
Tel: (617) 951-6600
Fax: (617) 951-1295
</TABLE>
11.6 Expenses. Each party hereto will pay its own expenses in connection
with the transactions contemplated hereby, provided, however, that the Company
shall pay the Purchasers' reasonable costs and expenses for legal counsel in
connection with the investigation, preparation, execution and delivery of this
Agreement (and due diligence related thereto) and the other instruments and
documents to be delivered hereunder and the transactions contemplated hereby
and thereby on the date of the Closing; provided, further, that in no case
shall such costs and expenses exceed $20,000.
11.7 Counterparts. This Agreement and any exhibit hereto may be executed
in multiple counterparts, each of which shall constitute an original but all of
which shall constitute but one and the same instrument. One or more
counterparts of this Agreement or any exhibit hereto may be delivered via
telecopier, with the intention that they shall have the same effect as an
original counterpart hereof.
<PAGE>
11.8 Effect of Headings. The article and section headings herein are for
convenience only and shall not affect the construction or interpretation
hereof.
11.9 Adjustments. All provisions of this Agreement shall be automatically
adjusted to reflect any stock dividend, stock split or other such form of
recapitalization.
11.10 Governing Law. This Agreement shall be deemed a contract made under
the laws of The Commonwealth of Massachusetts and together with the rights and
obligations of the parties hereunder, shall be construed under and governed by
the laws of such state. Each of the parties hereto agrees that any action or
proceeding brought to enforce the rights or obligations of any party hereto
under this Agreement may be commenced and maintained in any court of competent
jurisdiction located in The Commonwealth of Massachusetts, and that the United
States District Court for Massachusetts shall have non-exclusive jurisdiction
over any such action, suit or proceeding brought by any of the parties hereto.
Each of the parties hereto further agrees that process may be served upon it by
certified mail, return receipt requested, addressed as more generally provided
in Section 11.5 hereof, and consents to the exercise of jurisdiction over it
and its properties with respect to any action, suit or proceeding arising out
of or in connection with this agreement or the transactions contemplated hereby
or the enforcement of any rights under this Agreement.
11.11 Confidentiality. Each Purchaser covenants and agrees that such
Purchaser shall maintain the confidentiality of all financial, confidential and
proprietary information of the Company ("Confidential Information") that is
provided to such Purchaser under this Agreement or that is otherwise provided
to such Purchaser by the Company and identified by the Company in writing to
such Purchaser as being of a confidential nature. For purposes hereof,
"Confidential Information" shall not include any information which (i) was
available to or in possession of such Purchaser or any employees thereof or any
beneficial owner of a partnership interest in such Purchaser (collectively
referred to herein as "Permitted Recipients") prior to the time of disclosure
to such Purchaser by the Company or its representatives, (ii) is or becomes
generally available to the public other than as a result of a disclosure by any
of such Permitted Recipients, or (iii) is or becomes available to such
Permitted Recipients on a nonconfidential basis by a third party which is not
bound by a confidentiality agreement with the Company. Notwithstanding the
preceding sentence, a Purchaser may (a) disclose such confidential information
when required by law or governmental order or regulation or when required by a
subpoena or other process, provided that such Purchaser shall use reasonable
efforts to give the Company prior notice thereof; (b) disclose such
confidential information to the extent necessary to enforce this Agreement; (c)
disclose such confidential information to its attorneys, accountants,
consultants and other professionals to the extent necessary to obtain their
services in connection with its investment in the Company, provided that the
requirements of this Section 11.11 shall in turn be binding on any such
<PAGE>
attorney, accountant, consultant or other professional; (d) disclose such
confidential information as may be required by any prospective purchaser of any
Purchased Shares or Conversion Shares from such Purchaser, provided that such
proposed sale is in compliance with the restrictions imposed by this Agreement
and the Related Agreements and such prospective purchaser agrees in writing to
be bound by the provisions of this Section 11.11; and (e) disclose such
confidential information to any of its affiliates, provided that the
requirements of this Section 11.11 shall in turn be binding on such affiliates.
11.12 Assignment. Each Purchaser has the right to assign or transfer any
of its rights pursuant to this Agreement in connection with (and in proportion
to) its transfer of securities purchased hereunder. The Company may not assign
or transfer any of its rights pursuant to this Agreement unless the Company
first obtains the express written consent of a majority of the Purchasers.
11.13 Waiver of Jury Trial. Each of the Company and the Purchasers hereby
expressly waives its respective rights to a jury trial of any claim or cause of
action based upon or arising out of this agreement, any other related
agreements or any dealings between them relating to the subject matter of this
Agreement. The Company and Purchasers also waive any bond or surety or security
upon such bond which might, but for this waiver, be required of any party. The
scope of this waiver is intended to be all encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. The Company and
the Purchasers further warrant and represent that each has reviewed this waiver
with its legal counsel, and that each voluntarily waives its jury trial rights
following consultation with legal counsel. This waiver is irrevocable and may
only be modified either orally or in amendments, renewals, supplements or
modifications to this agreement, any other related agreement or the Purchased
Shares. In the event of litigation, this Agreement may be filed as a written
consent to a trial (without a jury) by the court.
* * * * * * *
<PAGE>
EXHIBIT 2.1
LECROY CORPORATION
COUNTERPART SIGNATURE PAGE
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to
the Company, whereupon, this letter shall become a binding agreement among us.
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LECROY CORPORATION
By: /s/ John C.Maag
______________________________________
Name: John C. Maag
Title: Vice President - Finance, Chief Financial Officer, Treasurer
and Secretary
PURCHASERS:
ADVENT GLOBAL GECC III LIMITED PARTNERSHIP
By: Advent Global Management Limited Partnership,General Partner
By: Advent International Limited Partnership, General Partner
By: Advent International Corporation, General Partner
By: /s/ Douglas A. Kingsley
______________________________________
Douglas A. Kingsley
Senior Vice President
ENVIROTECH INVESTMENT FUND I LIMITED PARTNERSHIP
By: Advent International Limited Partnership, General Partner
By: Advent International Corporation, General Partner
By: /s/ Douglas A. Kingsley
______________________________________
Douglas A. Kingsley
Senior Vice President
ADWEST LIMITED PARTNERSHIP
By: Advent International Limited Partnership, General Partner
By: Advent International Corporation, General Partner
By: /s/ Douglas A. Kingsley
______________________________________
Douglas A. Kingsley
Senior Vice President
<PAGE>
EXHIBIT 2.1
OAKSTONE VENTURES LIMITED PARTNERSHIP
By: Advent International Limited Partnership, General Partner
By: Advent International Corporation, General Partner
By: /s/ Douglas A. Kingsley
______________________________________
Douglas A. Kingsley
Senior Vice President
ADVENT PARTNERS LIMITED PARTNERSHIP
By: Advent International Corporation, General Partner
By: /s/ Douglas A. Kingsley
______________________________________
Douglas A. Kingsley
Senior Vice President
</TABLE>
<PAGE>
EXHIBIT 2.1
Schedule 1.1
<TABLE>
<CAPTION>
<S> <C> <C>
Purchaser Purchased Shares Consideration
Advent Global GECC III Limited Partnership 350,000 $7,000,000
EnviroTech Investment Fund I Limited Partnership 71,250 $1,425,000
Adwest Limited Partnership 20,000 $400,000
Oakstone Ventures Limited Partnership 50,000 $1,000,000
Advent Partners Limited Partnership 8,750 $175,000
Totals 500,000 $10,000,000
</TABLE>
c/o Advent International Corporation
75 State Street
Boston, MA 02109
Attention: Douglas A. Kingsley
EXHIBIT 2.2
COMMON STOCK PURCHASE WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE
OR TRANSFER HEREOF MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT OR AN OPINION
OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
No. W-1 Right to Purchase 175,000 Shares of
Common Stock of LeCroy Corporation
LECROY CORPORATION
Common Stock Purchase Warrant
LeCroy Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Advent Global GECC III Limited Partnership,
or registered permitted assigns, is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time before
5:00 P.M., Boston time, on June 30, 2006 fully paid and nonassessable shares of
common stock, par value $.01 per share, of the Company ("Common Stock"), at a
exercise price per share of $20.00 (such exercise price per share as adjusted
from time to time as herein provided is referred to herein as the "Exercise
Price"). The number and character of such shares of Common Stock and the
Exercise Price are subject to adjustment as provided herein.
This Warrant is one of a series of Common Stock Purchase Warrants (the
"Warrants") evidencing the right to purchase shares of Common Stock of the
Company, issued pursuant to a certain Securities Purchase Agreement (the
"Agreement"), dated as of June 30, 1999, between the Company and the Purchasers
(as defined therein), a copy of which is on file at the principal office of the
Company. The holder of this Warrant shall be entitled to all of the benefits of
the Agreement, as provided therein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include LeCroy Corporation and any
corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes the Company's Common Stock, $.01 par
value per share, as authorized on the date of the Agreement and any other
<PAGE>
securities into which or for which any of such Common Stock may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
1. Exercise of Warrant.
1.1. Full Exercise. This Warrant may be exercised at any time at the
Option of the holder hereof in full by such holder by surrender of this
Warrant, with the form of subscription at the end hereof duly executed by such
holder, to the Company at its principal office, accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock for
which this Warrant is then exercisable by the Exercise Price then in effect.
1.2. Partial Exercise. This Warrant may be exercised at any time in
the sole discretion of the holder hereof in part by surrender of this Warrant
in the manner and at the place provided in Section 1.1 except that the amount
payable by the holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of shares of Common Stock designated by the holder
in the subscription at the end hereof by (b) the Exercise Price then in effect.
On any such partial exercise the Company at its expense will forthwith issue
and deliver to or upon the order of the holder hereof a new Warrant or Warrants
of like tenor, in the name of the holder hereof or as such holder (upon payment
by such holder of any applicable transfer taxes) may request, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
for which such Warrant or Warrants may still be exercised.
1.3 Net Issue Election. The holder hereof may elect to receive,
without the payment by such holder of any additional consideration, shares of
Common Stock equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the form of
subscription at the end hereof duly executed by such holder, at the principal
office of the Company. Thereupon, the Company shall issue to such holder such
number of fully paid and nonassessable shares of Common Stock as is computed
using the following formula:
<PAGE>
X = Y (A-B)
A
where X = the number of shares to be issued to such holder pursuant to this
Section 1.3;
Y = the number of shares covered by this Warrant in respect of which the
net issue election is made pursuant to this Section 1.3;
A = the fair market value of one share of Common Stock, as determined in
accordance with the following provisions, as at the time the net issue election
is made pursuant to this Section 1.3; and
B = the Exercise Price in effect under this Warrant at the time the net
issue election is made pursuant to this Section 1.3.
For purposes of this Section 1.3, "fair market value" of one (1) share of
Common Stock shall be determined as follows:
(1) Where there exists a public market for the Company's Common
Stock at the time of such exercise, the fair market value per share
shall be the average of the closing bid and asked prices of the
Common Stock quoted in the Over-The-Counter Market Summary or the
last reported sale price of the Common Stock or the closing price
quoted on the NASDAQ System or on any exchange on which the Common
Stock is listed, whichever is applicable, as published in The Wall
Street Journal for the five (5) trading days prior to the date of
determination of fair market value. Notwithstanding the foregoing, in
the event the Warrants are exercised in connection with the Company's
secondary public offering of Common Stock, the fair market value per
share shall be the per share offering price to the public of the
Company's secondary public offering.
(2) If no public market for the Common Stock exists at the time
of such exercise, the Company and the holder hereof shall negotiate
in good faith in an effort to reach agreement upon the fair market
value of one share of Common Stock for a period of ten (10) days
after delivery of the executed subscription.
(3) If the Company and the holder hereof are unable to reach
agreement under the foregoing subparagraph (2), the fair market value
of one share of Common Stock shall be determined by appraisal. The
Company and the holder hereof shall each select an appraiser (the
"Selected Appraisers") within thirty (30) days after the expiration
of the ten-day period in subparagraph (2) above. Each Selected
Appraiser shall render its appraisal within thirty (30) days of its
appointment hereunder. In the event that either Selected Appraiser
fails to render an appraisal within such thirty-day period, the first
<PAGE>
appraisal rendered shall be conclusive. In the event that the values
determined by the Selected Appraisers differ by less than ten percent
(10%) of the lower value, the fair market value shall be the average
of the appraisals made by each of the Selected Appraisers. In the
event that the values differ by ten percent (10%) or more of the
lower value, the Selected Appraisers shall within ten (10) days
select a third appraiser (the "Neutral Appraiser") to conduct an
appraisal. The Neutral Appraiser shall render its appraisal within
thirty (30) days of its appointment hereunder. The fair market value
of one share of Common Stock shall be equal to the appraisal made by
the Neutral Appraiser if such appraisal is between the two appraisals
made by the Selected Appraisers or, if such appraisal by the Neutral
Appraiser is not between the two appraisals made by the Selected
Appraisers, then the fair market value of one share of Common Stock
shall be that one of the two appraisals made by the Selected
Appraisers that is closer to the appraisal made by the Neutral
Appraiser. All appraisals delivered pursuant to this subparagraph (3)
shall be in writing and signed by the appraiser. The fees, costs and
expenses of each of the Selected Appraisers will be borne by the
party who selected such appraiser, and the fees, costs and expenses
of the Neutral Appraiser will be borne equally by the Company and the
holder hereof.
(4) In appraising the fair market value of one share of Common
Stock, there shall be no discount for minority interests.
(5) The fair market value as determined in accordance with this
Section 1.3 shall be conclusive, final and binding upon the Company
and the holder hereof, and shall be enforceable in any court having
jurisdiction over a proceeding to enforce the terms of this Warrant.
1.4. Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrants
pursuant to Section 4.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 12 and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or
such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.
2. Delivery of Stock Certificates, etc. on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within ten (10) days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock to which such holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current market value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such holder
is entitled upon such exercise pursuant to Section 1 or otherwise.
<PAGE>
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock shall have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) shall have become entitled
to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 5.3),
then and in each such case the holder of this Warrant, on the exercise hereof
as provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) which such holder would hold on the date
of such exercise if on the date hereof he had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1. Reorganization. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in Sections 3 and 5.
4.2. Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause
to be delivered the stock and other securities and property (including cash,
<PAGE>
where applicable) receivable by the holders of the Warrants after the effective
date of such dissolution pursuant to this Section 4 to a bank or trust company
having its principal office in Boston, Massachusetts, as trustee for the holder
or holders of the Warrants.
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities
and property receivable on the exercise of this Warrant after the consummation
of such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in
the case of any such transfer, the person acquiring all or substantially all of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 6.
5. Extraordinary Events. In the event that the Company shall (i) issue
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Exercise Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 5.
The holder of this Warrant shall thereafter, on the exercise hereof as provided
in Section 1, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5) be issuable on such
exercise by a fraction of which (i) the numerator is the Exercise Price which
would otherwise (but for the provisions of this Section 5) be in effect, and
(ii) the denominator is the Exercise Price in effect on the date of such
exercise.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of all Warrants from time to
time outstanding, and (c) will not transfer all or substantially all of its
<PAGE>
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Warrants.
7. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or, if the holder of a Warrant so requests, independent
certified public accountants of recognized standing selected by the Company to
compute such adjustment or readjustment in accordance with the terms of the
Warrants and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or receivable by the Company for any additional shares of Common Stock issued
or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock outstanding or deemed to be outstanding, and (c) the Exercise
Price and the number of shares of Common Stock to be received upon exercise of
this Warrant, in effect immediately prior to such issue or sale and as adjusted
and readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to each holder of a Warrant, and will, on the
written request at any time of any holder of a Warrant, furnish to such holder
a like certificate setting forth the Exercise Price at the time in effect and
showing how it was calculated.
8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
or securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or consolidation or
merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of stock
of any class or any other securities, or any right or option to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities (other than the issue of Common Stock on the exercise of
the Warrants),
then and in each such event the Company will mail or cause to be mailed to each
registered holder of a Warrant a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
<PAGE>
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up, and (iii) the amount and
character of any stock or other securities, or rights or options with respect
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall be mailed at least 20 days prior to
the date specified in such notice on which any such action is to be taken.
9. Reservation of Stock, etc., Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock from time
to time issuable on the exercise of the Warrants.
10. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or warrants of
like tenor, in the name of such holder or as such holder (upon payment by such
holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock called for on the face or faces of the Warrant or
Warrants so surrendered.
11. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Warrant and, in the case of any such loss, theft or destruction of any
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company may, by written notice to each holder of a
Warrant, appoint an agent having an office in either Boston, Massachusetts or
New York, New York for the purpose of issuing Common Stock on the exercise of
the Warrants pursuant to Section 1, exchanging Warrants pursuant to Section 10,
and replacing Warrants pursuant to Section 11, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be,
shall be made at such office by such agent.
13. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. Negotiability, etc. This Warrant is issued upon the following terms,
to all of which each holder or owner hereof by the taking hereof consents and
agrees:
(a) subject to compliance with all applicable securities laws, title
to this Warrant may be transferred by endorsement (by the holder hereof
<PAGE>
executing the form of assignment at the end hereof) and delivery in the
same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered
to transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives and
renounces all of his equities or rights in this Warrant in favor of each
such bona fide purchaser, and each such bona fide purchaser shall acquire
absolute title hereto and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder hereof as the absolute owner
hereof for all purposes, notwithstanding any notice to the contrary.
15. Notices, etc. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to
the Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
16. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the laws of The Commonwealth of Massachusetts.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. This Warrant is being
executed as an instrument under seal. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
17. Expiration; Automatic Exercise. The right to exercise this Warrant
shall expire at 5:00 P.M., Boston time, on June 30, 2006. Notwithstanding the
foregoing, this Warrant shall automatically be deemed to be exercised in full
pursuant to the provisions of Section 1.3 hereof, without any further action on
behalf of the holder hereof, immediately prior to the time this Warrant would
otherwise expire pursuant to the preceding sentence.
<PAGE>
Dated: June 30, 1999 LECROY CORPORATION
/s/ John C. Maag_____________
John C. Maag
Vice President - Finance, Chief Financial Officer,
Treasurer and Secretary
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: LeCroy Corporation
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder__________shares
of Common Stock of LeCroy Corporation and herewith makes payment of $__________
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to whose address is
_________________________
Dated: ____________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
------------------------------
FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto ...................... the right represented by the within Warrant to
purchase shares of Common Stock of LeCroy Corporation to which the within
Warrant relates, and appoints ____________________ Attorney to transfer such
right on the books of LeCroy Corporation with full power of substitution in the
premises.
Dated: ____________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
________________________________________
(Address)
Signed in the presence of:
______________________________
<PAGE>
EXHIBIT 2.2
COMMON STOCK PURCHASE WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE
OR TRANSFER HEREOF MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT OR AN OPINION
OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
No. W-2 Right to Purchase 35,625 Shares of
Common Stock of LeCroy Corporation
LECROY CORPORATION
Common Stock Purchase Warrant
LeCroy Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, EnviroTech Investment Fund I Limited
Partnership, or registered permitted assigns, is entitled, subject to the terms
set forth below, to purchase from the Company at any time or from time to time
before 5:00 P.M., Boston time, on June 30, 2006 fully paid and nonassessable
shares of common stock, par value $.01 per share, of the Company ("Common
Stock"), at a exercise price per share of $20.00 (such exercise price per share
as adjusted from time to time as herein provided is referred to herein as the
"Exercise Price"). The number and character of such shares of Common Stock and
the Exercise Price are subject to adjustment as provided herein.
This Warrant is one of a series of Common Stock Purchase Warrants (the
"Warrants") evidencing the right to purchase shares of Common Stock of the
Company, issued pursuant to a certain Securities Purchase Agreement (the
"Agreement"), dated as of June 30, 1999, between the Company and the Purchasers
(as defined therein), a copy of which is on file at the principal office of the
Company. The holder of this Warrant shall be entitled to all of the benefits of
the Agreement, as provided therein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include LeCroy Corporation and any
corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes the Company's Common Stock, $.01 par
value per share, as authorized on the date of the Agreement and any other
<PAGE>
securities into which or for which any of such Common Stock may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
1. Exercise of Warrant.
1.1. Full Exercise. This Warrant may be exercised at any time at the
Option of the holder hereof in full by such holder by surrender of this
Warrant, with the form of subscription at the end hereof duly executed by such
holder, to the Company at its principal office, accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock for
which this Warrant is then exercisable by the Exercise Price then in effect.
1.2. Partial Exercise. This Warrant may be exercised at any time in
the sole discretion of the holder hereof in part by surrender of this Warrant
in the manner and at the place provided in Section 1.1 except that the amount
payable by the holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of shares of Common Stock designated by the holder
in the subscription at the end hereof by (b) the Exercise Price then in effect.
On any such partial exercise the Company at its expense will forthwith issue
and deliver to or upon the order of the holder hereof a new Warrant or Warrants
of like tenor, in the name of the holder hereof or as such holder (upon payment
by such holder of any applicable transfer taxes) may request, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
for which such Warrant or Warrants may still be exercised.
1.3 Net Issue Election. The holder hereof may elect to receive,
without the payment by such holder of any additional consideration, shares of
Common Stock equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the form of
subscription at the end hereof duly executed by such holder, at the principal
office of the Company. Thereupon, the Company shall issue to such holder such
number of fully paid and nonassessable shares of Common Stock as is computed
using the following formula:
<PAGE>
X = Y (A-B)
A
where X = the number of shares to be issued to such holder pursuant to this
Section 1.3;
Y = the number of shares covered by this Warrant in respect of which the
net issue election is made pursuant to this Section 1.3;
A = the fair market value of one share of Common Stock, as determined in
accordance with the following provisions, as at the time the net issue election
is made pursuant to this Section 1.3; and
B = the Exercise Price in effect under this Warrant at the time the net
issue election is made pursuant to this Section 1.3.
For purposes of this Section 1.3, "fair market value" of one (1) share of
Common Stock shall be determined as follows:
(1) Where there exists a public market for the Company's Common
Stock at the time of such exercise, the fair market value per share
shall be the average of the closing bid and asked prices of the
Common Stock quoted in the Over-The-Counter Market Summary or the
last reported sale price of the Common Stock or the closing price
quoted on the NASDAQ System or on any exchange on which the Common
Stock is listed, whichever is applicable, as published in The Wall
Street Journal for the five (5) trading days prior to the date of
determination of fair market value. Notwithstanding the foregoing, in
the event the Warrants are exercised in connection with the Company's
secondary public offering of Common Stock, the fair market value per
share shall be the per share offering price to the public of the
Company's secondary public offering.
(2) If no public market for the Common Stock exists at the time
of such exercise, the Company and the holder hereof shall negotiate
in good faith in an effort to reach agreement upon the fair market
value of one share of Common Stock for a period of ten (10) days
after delivery of the executed subscription.
(3) If the Company and the holder hereof are unable to reach
agreement under the foregoing subparagraph (2), the fair market value
of one share of Common Stock shall be determined by appraisal. The
Company and the holder hereof shall each select an appraiser (the
"Selected Appraisers") within thirty (30) days after the expiration
of the ten-day period in subparagraph (2) above. Each Selected
Appraiser shall render its appraisal within thirty (30) days of its
appointment hereunder. In the event that either Selected Appraiser
fails to render an appraisal within such thirty-day period, the first
<PAGE>
appraisal rendered shall be conclusive. In the event that the values
determined by the Selected Appraisers differ by less than ten percent
(10%) of the lower value, the fair market value shall be the average
of the appraisals made by each of the Selected Appraisers. In the
event that the values differ by ten percent (10%) or more of the
lower value, the Selected Appraisers shall within ten (10) days
select a third appraiser (the "Neutral Appraiser") to conduct an
appraisal. The Neutral Appraiser shall render its appraisal within
thirty (30) days of its appointment hereunder. The fair market value
of one share of Common Stock shall be equal to the appraisal made by
the Neutral Appraiser if such appraisal is between the two appraisals
made by the Selected Appraisers or, if such appraisal by the Neutral
Appraiser is not between the two appraisals made by the Selected
Appraisers, then the fair market value of one share of Common Stock
shall be that one of the two appraisals made by the Selected
Appraisers that is closer to the appraisal made by the Neutral
Appraiser. All appraisals delivered pursuant to this subparagraph (3)
shall be in writing and signed by the appraiser. The fees, costs and
expenses of each of the Selected Appraisers will be borne by the
party who selected such appraiser, and the fees, costs and expenses
of the Neutral Appraiser will be borne equally by the Company and the
holder hereof.
(4) In appraising the fair market value of one share of Common
Stock, there shall be no discount for minority interests.
(5) The fair market value as determined in accordance with this
Section 1.3 shall be conclusive, final and binding upon the Company
and the holder hereof, and shall be enforceable in any court having
jurisdiction over a proceeding to enforce the terms of this Warrant.
1.4. Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrants
pursuant to Section 4.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 12 and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or
such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.
2. Delivery of Stock Certificates, etc. on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within ten (10) days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock to which such holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current market value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such holder
is entitled upon such exercise pursuant to Section 1 or otherwise.
<PAGE>
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock shall have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) shall have become entitled
to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 5.3),
then and in each such case the holder of this Warrant, on the exercise hereof
as provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) which such holder would hold on the date
of such exercise if on the date hereof he had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1. Reorganization. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in Sections 3 and 5.
4.2. Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause
to be delivered the stock and other securities and property (including cash,
<PAGE>
where applicable) receivable by the holders of the Warrants after the effective
date of such dissolution pursuant to this Section 4 to a bank or trust company
having its principal office in Boston, Massachusetts, as trustee for the holder
or holders of the Warrants.
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities
and property receivable on the exercise of this Warrant after the consummation
of such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in
the case of any such transfer, the person acquiring all or substantially all of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 6.
5. Extraordinary Events. In the event that the Company shall (i) issue
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Exercise Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 5.
The holder of this Warrant shall thereafter, on the exercise hereof as provided
in Section 1, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5) be issuable on such
exercise by a fraction of which (i) the numerator is the Exercise Price which
would otherwise (but for the provisions of this Section 5) be in effect, and
(ii) the denominator is the Exercise Price in effect on the date of such
exercise.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of all Warrants from time to
time outstanding, and (c) will not transfer all or substantially all of its
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Warrants.
<PAGE>
7. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or, if the holder of a Warrant so requests, independent
certified public accountants of recognized standing selected by the Company to
compute such adjustment or readjustment in accordance with the terms of the
Warrants and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or receivable by the Company for any additional shares of Common Stock issued
or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock outstanding or deemed to be outstanding, and (c) the Exercise
Price and the number of shares of Common Stock to be received upon exercise of
this Warrant, in effect immediately prior to such issue or sale and as adjusted
and readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to each holder of a Warrant, and will, on the
written request at any time of any holder of a Warrant, furnish to such holder
a like certificate setting forth the Exercise Price at the time in effect and
showing how it was calculated.
8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
or securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or consolidation or
merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of stock
of any class or any other securities, or any right or option to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities (other than the issue of Common Stock on the exercise of
the Warrants),
then and in each such event the Company will mail or cause to be mailed to each
registered holder of a Warrant a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable on such
<PAGE>
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up, and (iii) the amount and
character of any stock or other securities, or rights or options with respect
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall be mailed at least 20 days prior to
the date specified in such notice on which any such action is to be taken.
9. Reservation of Stock, etc., Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock from time
to time issuable on the exercise of the Warrants.
10. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or warrants of
like tenor, in the name of such holder or as such holder (upon payment by such
holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock called for on the face or faces of the Warrant or
Warrants so surrendered.
11. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Warrant and, in the case of any such loss, theft or destruction of any
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company may, by written notice to each holder of a
Warrant, appoint an agent having an office in either Boston, Massachusetts or
New York, New York for the purpose of issuing Common Stock on the exercise of
the Warrants pursuant to Section 1, exchanging Warrants pursuant to Section 10,
and replacing Warrants pursuant to Section 11, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be,
shall be made at such office by such agent.
13. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. Negotiability, etc. This Warrant is issued upon the following terms,
to all of which each holder or owner hereof by the taking hereof consents and
agrees:
(a) subject to compliance with all applicable securities laws, title
to this Warrant may be transferred by endorsement (by the holder hereof
executing the form of assignment at the end hereof) and delivery in the
same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
<PAGE>
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered
to transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives and
renounces all of his equities or rights in this Warrant in favor of each
such bona fide purchaser, and each such bona fide purchaser shall acquire
absolute title hereto and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder hereof as the absolute owner
hereof for all purposes, notwithstanding any notice to the contrary.
15. Notices, etc. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to
the Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
16. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the laws of The Commonwealth of Massachusetts.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. This Warrant is being
executed as an instrument under seal. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
17. Expiration; Automatic Exercise. The right to exercise this Warrant
shall expire at 5:00 P.M., Boston time, on June 30, 2006. Notwithstanding the
foregoing, this Warrant shall automatically be deemed to be exercised in full
pursuant to the provisions of Section 1.3 hereof, without any further action on
behalf of the holder hereof, immediately prior to the time this Warrant would
otherwise expire pursuant to the preceding sentence.
<PAGE>
Dated: June 30, 1999 LECROY CORPORATION
/s/ John C. Maag
-----------------------------------------
John C. Maag
Vice President - Finance, Chief Financial Officer,
Treasurer and Secretary
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: LeCroy Corporation
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder__________shares
of Common Stock of LeCroy Corporation and herewith makes payment of $__________
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to whose address is
________________________
Dated: ____________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
______________________________
FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto ...................... the right represented by the within Warrant to
purchase shares of Common Stock of LeCroy Corporation to which the within
Warrant relates, and appoints ____________________ Attorney to transfer such
right on the books of LeCroy Corporation with full power of substitution in the
premises.
Dated: ____________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
________________________________________
(Address)
Signed in the presence of:
____________________________
<PAGE>
EXHIBIT 2.2
COMMON STOCK PURCHASE WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE
OR TRANSFER HEREOF MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT OR AN OPINION
OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
No. W-3 Right to Purchase 10,000 Shares of
Common Stock of LeCroy Corporation
LECROY CORPORATION
Common Stock Purchase Warrant
LeCroy Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Adwest Limited Partnership, or registered
permitted assigns, is entitled, subject to the terms set forth below, to
purchase from the Company at any time or from time to time before 5:00 P.M.,
Boston time, on June 30, 2006 fully paid and nonassessable shares of common
stock, par value $.01 per share, of the Company ("Common Stock"), at a exercise
price per share of $20.00 (such exercise price per share as adjusted from time
to time as herein provided is referred to herein as the "Exercise Price"). The
number and character of such shares of Common Stock and the Exercise Price are
subject to adjustment as provided herein.
This Warrant is one of a series of Common Stock Purchase Warrants (the
"Warrants") evidencing the right to purchase shares of Common Stock of the
Company, issued pursuant to a certain Securities Purchase Agreement (the
"Agreement"), dated as of June 30, 1999, between the Company and the Purchasers
(as defined therein), a copy of which is on file at the principal office of the
Company. The holder of this Warrant shall be entitled to all of the benefits of
the Agreement, as provided therein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include LeCroy Corporation and any
corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes the Company's Common Stock, $.01 par
value per share, as authorized on the date of the Agreement and any other
<PAGE>
securities into which or for which any of such Common Stock may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
1. Exercise of Warrant.
1.1. Full Exercise. This Warrant may be exercised at any time at the
Option of the holder hereof in full by such holder by surrender of this
Warrant, with the form of subscription at the end hereof duly executed by such
holder, to the Company at its principal office, accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock for
which this Warrant is then exercisable by the Exercise Price then in effect.
1.2. Partial Exercise. This Warrant may be exercised at any time in
the sole discretion of the holder hereof in part by surrender of this Warrant
in the manner and at the place provided in Section 1.1 except that the amount
payable by the holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of shares of Common Stock designated by the holder
in the subscription at the end hereof by (b) the Exercise Price then in effect.
On any such partial exercise the Company at its expense will forthwith issue
and deliver to or upon the order of the holder hereof a new Warrant or Warrants
of like tenor, in the name of the holder hereof or as such holder (upon payment
by such holder of any applicable transfer taxes) may request, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
for which such Warrant or Warrants may still be exercised.
1.3 Net Issue Election. The holder hereof may elect to receive,
without the payment by such holder of any additional consideration, shares of
Common Stock equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the form of
subscription at the end hereof duly executed by such holder, at the principal
office of the Company. Thereupon, the Company shall issue to such holder such
number of fully paid and nonassessable shares of Common Stock as is computed
using the following formula:
<PAGE>
X = Y (A-B)
A
where X = the number of shares to be issued to such holder pursuant to this
Section 1.3;
Y = the number of shares covered by this Warrant in respect of which the
net issue election is made pursuant to this Section 1.3;
A = the fair market value of one share of Common Stock, as determined in
accordance with the following provisions, as at the time the net issue election
is made pursuant to this Section 1.3; and
B = the Exercise Price in effect under this Warrant at the time the net
issue election is made pursuant to this Section 1.3.
For purposes of this Section 1.3, "fair market value" of one (1) share of
Common Stock shall be determined as follows:
(1) Where there exists a public market for the Company's Common
Stock at the time of such exercise, the fair market value per share
shall be the average of the closing bid and asked prices of the
Common Stock quoted in the Over-The-Counter Market Summary or the
last reported sale price of the Common Stock or the closing price
quoted on the NASDAQ System or on any exchange on which the Common
Stock is listed, whichever is applicable, as published in The Wall
Street Journal for the five (5) trading days prior to the date of
determination of fair market value. Notwithstanding the foregoing, in
the event the Warrants are exercised in connection with the Company's
secondary public offering of Common Stock, the fair market value per
share shall be the per share offering price to the public of the
Company's secondary public offering.
(2) If no public market for the Common Stock exists at the time
of such exercise, the Company and the holder hereof shall negotiate
in good faith in an effort to reach agreement upon the fair market
value of one share of Common Stock for a period of ten (10) days
after delivery of the executed subscription.
(3) If the Company and the holder hereof are unable to reach
agreement under the foregoing subparagraph (2), the fair market value
of one share of Common Stock shall be determined by appraisal. The
Company and the holder hereof shall each select an appraiser (the
"Selected Appraisers") within thirty (30) days after the expiration
of the ten-day period in subparagraph (2) above. Each Selected
Appraiser shall render its appraisal within thirty (30) days of its
appointment hereunder. In the event that either Selected Appraiser
<PAGE>
fails to render an appraisal within such thirty-day period, the first
appraisal rendered shall be conclusive. In the event that the values
determined by the Selected Appraisers differ by less than ten percent
(10%) of the lower value, the fair market value shall be the average
of the appraisals made by each of the Selected Appraisers. In the
event that the values differ by ten percent (10%) or more of the
lower value, the Selected Appraisers shall within ten (10) days
select a third appraiser (the "Neutral Appraiser") to conduct an
appraisal. The Neutral Appraiser shall render its appraisal within
thirty (30) days of its appointment hereunder. The fair market value
of one share of Common Stock shall be equal to the appraisal made by
the Neutral Appraiser if such appraisal is between the two appraisals
made by the Selected Appraisers or, if such appraisal by the Neutral
Appraiser is not between the two appraisals made by the Selected
Appraisers, then the fair market value of one share of Common Stock
shall be that one of the two appraisals made by the Selected
Appraisers that is closer to the appraisal made by the Neutral
Appraiser. All appraisals delivered pursuant to this subparagraph (3)
shall be in writing and signed by the appraiser. The fees, costs and
expenses of each of the Selected Appraisers will be borne by the
party who selected such appraiser, and the fees, costs and expenses
of the Neutral Appraiser will be borne equally by the Company and the
holder hereof.
(4) In appraising the fair market value of one share of Common
Stock, there shall be no discount for minority interests.
(5) The fair market value as determined in accordance with this
Section 1.3 shall be conclusive, final and binding upon the Company
and the holder hereof, and shall be enforceable in any court having
jurisdiction over a proceeding to enforce the terms of this Warrant.
1.4. Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrants
pursuant to Section 4.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 12 and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or
such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.
2. Delivery of Stock Certificates, etc. on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within ten (10) days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock to which such holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current market value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such holder
is entitled upon such exercise pursuant to Section 1 or otherwise.
<PAGE>
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock shall have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) shall have become entitled
to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 5.3),
then and in each such case the holder of this Warrant, on the exercise hereof
as provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) which such holder would hold on the date
of such exercise if on the date hereof he had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1. Reorganization. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in Sections 3 and 5.
4.2. Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause
to be delivered the stock and other securities and property (including cash,
<PAGE>
where applicable) receivable by the holders of the Warrants after the effective
date of such dissolution pursuant to this Section 4 to a bank or trust company
having its principal office in Boston, Massachusetts, as trustee for the holder
or holders of the Warrants.
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities
and property receivable on the exercise of this Warrant after the consummation
of such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in
the case of any such transfer, the person acquiring all or substantially all of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 6.
5. Extraordinary Events. In the event that the Company shall (i) issue
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Exercise Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 5.
The holder of this Warrant shall thereafter, on the exercise hereof as provided
in Section 1, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5) be issuable on such
exercise by a fraction of which (i) the numerator is the Exercise Price which
would otherwise (but for the provisions of this Section 5) be in effect, and
(ii) the denominator is the Exercise Price in effect on the date of such
exercise.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of all Warrants from time to
time outstanding, and (c) will not transfer all or substantially all of its
<PAGE>
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Warrants.
7. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or, if the holder of a Warrant so requests, independent
certified public accountants of recognized standing selected by the Company to
compute such adjustment or readjustment in accordance with the terms of the
Warrants and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or receivable by the Company for any additional shares of Common Stock issued
or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock outstanding or deemed to be outstanding, and (c) the Exercise
Price and the number of shares of Common Stock to be received upon exercise of
this Warrant, in effect immediately prior to such issue or sale and as adjusted
and readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to each holder of a Warrant, and will, on the
written request at any time of any holder of a Warrant, furnish to such holder
a like certificate setting forth the Exercise Price at the time in effect and
showing how it was calculated.
8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
or securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or consolidation or
merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of stock
of any class or any other securities, or any right or option to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities (other than the issue of Common Stock on the exercise of
the Warrants),
then and in each such event the Company will mail or cause to be mailed to each
registered holder of a Warrant a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
<PAGE>
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up, and (iii) the amount and
character of any stock or other securities, or rights or options with respect
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall be mailed at least 20 days prior to
the date specified in such notice on which any such action is to be taken.
9. Reservation of Stock, etc., Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock from time
to time issuable on the exercise of the Warrants.
10. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or warrants of
like tenor, in the name of such holder or as such holder (upon payment by such
holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock called for on the face or faces of the Warrant or
Warrants so surrendered.
11. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Warrant and, in the case of any such loss, theft or destruction of any
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company may, by written notice to each holder of a
Warrant, appoint an agent having an office in either Boston, Massachusetts or
New York, New York for the purpose of issuing Common Stock on the exercise of
the Warrants pursuant to Section 1, exchanging Warrants pursuant to Section 10,
and replacing Warrants pursuant to Section 11, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be,
shall be made at such office by such agent.
13. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. Negotiability, etc. This Warrant is issued upon the following terms,
to all of which each holder or owner hereof by the taking hereof consents and
agrees:
(a) subject to compliance with all applicable securities laws, title
to this Warrant may be transferred by endorsement (by the holder hereof
<PAGE>
executing the form of assignment at the end hereof) and delivery in the
same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered
to transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives and
renounces all of his equities or rights in this Warrant in favor of each
such bona fide purchaser, and each such bona fide purchaser shall acquire
absolute title hereto and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder hereof as the absolute owner
hereof for all purposes, notwithstanding any notice to the contrary.
15. Notices, etc. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to
the Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
16. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the laws of The Commonwealth of Massachusetts.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. This Warrant is being
executed as an instrument under seal. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
17. Expiration; Automatic Exercise. The right to exercise this Warrant
shall expire at 5:00 P.M., Boston time, on June 30, 2006. Notwithstanding the
foregoing, this Warrant shall automatically be deemed to be exercised in full
pursuant to the provisions of Section 1.3 hereof, without any further action on
behalf of the holder hereof, immediately prior to the time this Warrant would
otherwise expire pursuant to the preceding sentence.
<PAGE>
Dated: June 30, 1999 LECROY CORPORATION
/s/ John C. Maag
---------------------------------------
John C. Maag
Vice President - Finance, Chief Financial Officer,
Treasurer and Secretary
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: LeCroy Corporation
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder__________shares
of Common Stock of LeCroy Corporation and herewith makes payment of $__________
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to whose address is
______________________________
Dated: _________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
______________________________
FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto ...................... the right represented by the within Warrant to
purchase shares of Common Stock of LeCroy Corporation to which the within
Warrant relates, and appoints ____________________ Attorney to transfer such
right on the books of LeCroy Corporation with full power of substitution in the
premises.
Dated: ________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
_________________________________________
(Address)
Signed in the presence of:
______________________________
<PAGE>
EXHIBIT 2.2
COMMON STOCK PURCHASE WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE
OR TRANSFER HEREOF MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT OR AN OPINION
OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
No. W-4 Right to Purchase 25,000 Shares of
Common Stock of LeCroy Corporation
LECROY CORPORATION
Common Stock Purchase Warrant
LeCroy Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Oakstone Ventures Limited Partnership, or
registered permitted assigns, is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time before
5:00 P.M., Boston time, on June 30, 2006 fully paid and nonassessable shares of
common stock, par value $.01 per share, of the Company ("Common Stock"), at a
exercise price per share of $20.00 (such exercise price per share as adjusted
from time to time as herein provided is referred to herein as the "Exercise
Price"). The number and character of such shares of Common Stock and the
Exercise Price are subject to adjustment as provided herein.
This Warrant is one of a series of Common Stock Purchase Warrants (the
"Warrants") evidencing the right to purchase shares of Common Stock of the
Company, issued pursuant to a certain Securities Purchase Agreement (the
"Agreement"), dated as of June 30, 1999, between the Company and the Purchasers
(as defined therein), a copy of which is on file at the principal office of the
Company. The holder of this Warrant shall be entitled to all of the benefits of
the Agreement, as provided therein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include LeCroy Corporation and any
corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes the Company's Common Stock, $.01 par
value per share, as authorized on the date of the Agreement and any other
<PAGE>
securities into which or for which any of such Common Stock may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
1. Exercise of Warrant.
1.1. Full Exercise. This Warrant may be exercised at any time at the
Option of the holder hereof in full by such holder by surrender of this
Warrant, with the form of subscription at the end hereof duly executed by such
holder, to the Company at its principal office, accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock for
which this Warrant is then exercisable by the Exercise Price then in effect.
1.2. Partial Exercise. This Warrant may be exercised at any time in
the sole discretion of the holder hereof in part by surrender of this Warrant
in the manner and at the place provided in Section 1.1 except that the amount
payable by the holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of shares of Common Stock designated by the holder
in the subscription at the end hereof by (b) the Exercise Price then in effect.
On any such partial exercise the Company at its expense will forthwith issue
and deliver to or upon the order of the holder hereof a new Warrant or Warrants
of like tenor, in the name of the holder hereof or as such holder (upon payment
by such holder of any applicable transfer taxes) may request, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
for which such Warrant or Warrants may still be exercised.
1.3 Net Issue Election. The holder hereof may elect to receive,
without the payment by such holder of any additional consideration, shares of
Common Stock equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the form of
subscription at the end hereof duly executed by such holder, at the principal
office of the Company. Thereupon, the Company shall issue to such holder such
number of fully paid and nonassessable shares of Common Stock as is computed
using the following formula:
<PAGE>
X = Y (A-B)
A
where X = the number of shares to be issued to such holder pursuant to this
Section 1.3;
Y = the number of shares covered by this Warrant in respect of which the
net issue election is made pursuant to this Section 1.3;
A = the fair market value of one share of Common Stock, as determined in
accordance with the following provisions, as at the time the net issue election
is made pursuant to this Section 1.3; and
B = the Exercise Price in effect under this Warrant at the time the net
issue election is made pursuant to this Section 1.3.
For purposes of this Section 1.3, "fair market value" of one (1) share of
Common Stock shall be determined as follows:
(1) Where there exists a public market for the Company's Common
Stock at the time of such exercise, the fair market value per share
shall be the average of the closing bid and asked prices of the
Common Stock quoted in the Over-The-Counter Market Summary or the
last reported sale price of the Common Stock or the closing price
quoted on the NASDAQ System or on any exchange on which the Common
Stock is listed, whichever is applicable, as published in The Wall
Street Journal for the five (5) trading days prior to the date of
determination of fair market value. Notwithstanding the foregoing, in
the event the Warrants are exercised in connection with the Company's
secondary public offering of Common Stock, the fair market value per
share shall be the per share offering price to the public of the
Company's secondary public offering.
(2) If no public market for the Common Stock exists at the time
of such exercise, the Company and the holder hereof shall negotiate
in good faith in an effort to reach agreement upon the fair market
value of one share of Common Stock for a period of ten (10) days
after delivery of the executed subscription.
(3) If the Company and the holder hereof are unable to reach
agreement under the foregoing subparagraph (2), the fair market value
of one share of Common Stock shall be determined by appraisal. The
Company and the holder hereof shall each select an appraiser (the
"Selected Appraisers") within thirty (30) days after the expiration
of the ten-day period in subparagraph (2) above. Each Selected
Appraiser shall render its appraisal within thirty (30) days of its
appointment hereunder. In the event that either Selected Appraiser
<PAGE>
fails to render an appraisal within such thirty-day period, the first
appraisal rendered shall be conclusive. In the event that the values
determined by the Selected Appraisers differ by less than ten percent
(10%) of the lower value, the fair market value shall be the average
of the appraisals made by each of the Selected Appraisers. In the
event that the values differ by ten percent (10%) or more of the
lower value, the Selected Appraisers shall within ten (10) days
select a third appraiser (the "Neutral Appraiser") to conduct an
appraisal. The Neutral Appraiser shall render its appraisal within
thirty (30) days of its appointment hereunder. The fair market value
of one share of Common Stock shall be equal to the appraisal made by
the Neutral Appraiser if such appraisal is between the two appraisals
made by the Selected Appraisers or, if such appraisal by the Neutral
Appraiser is not between the two appraisals made by the Selected
Appraisers, then the fair market value of one share of Common Stock
shall be that one of the two appraisals made by the Selected
Appraisers that is closer to the appraisal made by the Neutral
Appraiser. All appraisals delivered pursuant to this subparagraph (3)
shall be in writing and signed by the appraiser. The fees, costs and
expenses of each of the Selected Appraisers will be borne by the
party who selected such appraiser, and the fees, costs and expenses
of the Neutral Appraiser will be borne equally by the Company and the
holder hereof.
(4) In appraising the fair market value of one share of Common
Stock, there shall be no discount for minority interests.
(5) The fair market value as determined in accordance with this
Section 1.3 shall be conclusive, final and binding upon the Company
and the holder hereof, and shall be enforceable in any court having
jurisdiction over a proceeding to enforce the terms of this Warrant.
1.4. Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrants
pursuant to Section 4.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 12 and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or
such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.
2. Delivery of Stock Certificates, etc. on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within ten (10) days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock to which such holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current market value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such holder
is entitled upon such exercise pursuant to Section 1 or otherwise.
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock shall have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) shall have become entitled
to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 5.3),
then and in each such case the holder of this Warrant, on the exercise hereof
as provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) which such holder would hold on the date
of such exercise if on the date hereof he had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1. Reorganization. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in Sections 3 and 5.
4.2. Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause
to be delivered the stock and other securities and property (including cash,
<PAGE>
where applicable) receivable by the holders of the Warrants after the effective
date of such dissolution pursuant to this Section 4 to a bank or trust company
having its principal office in Boston, Massachusetts, as trustee for the holder
or holders of the Warrants.
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities
and property receivable on the exercise of this Warrant after the consummation
of such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in
the case of any such transfer, the person acquiring all or substantially all of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 6.
5. Extraordinary Events. In the event that the Company shall (i) issue
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Exercise Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 5.
The holder of this Warrant shall thereafter, on the exercise hereof as provided
in Section 1, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5) be issuable on such
exercise by a fraction of which (i) the numerator is the Exercise Price which
would otherwise (but for the provisions of this Section 5) be in effect, and
(ii) the denominator is the Exercise Price in effect on the date of such
exercise.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of all Warrants from time to
time outstanding, and (c) will not transfer all or substantially all of its
<PAGE>
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Warrants.
7. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or, if the holder of a Warrant so requests, independent
certified public accountants of recognized standing selected by the Company to
compute such adjustment or readjustment in accordance with the terms of the
Warrants and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or receivable by the Company for any additional shares of Common Stock issued
or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock outstanding or deemed to be outstanding, and (c) the Exercise
Price and the number of shares of Common Stock to be received upon exercise of
this Warrant, in effect immediately prior to such issue or sale and as adjusted
and readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to each holder of a Warrant, and will, on the
written request at any time of any holder of a Warrant, furnish to such holder
a like certificate setting forth the Exercise Price at the time in effect and
showing how it was calculated.
8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
or securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or consolidation or
merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of stock
of any class or any other securities, or any right or option to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities (other than the issue of Common Stock on the exercise of
the Warrants),
then and in each such event the Company will mail or cause to be mailed to each
registered holder of a Warrant a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
<PAGE>
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up, and (iii) the amount and
character of any stock or other securities, or rights or options with respect
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall be mailed at least 20 days prior to
the date specified in such notice on which any such action is to be taken.
9. Reservation of Stock, etc., Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock from time
to time issuable on the exercise of the Warrants.
10. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or warrants of
like tenor, in the name of such holder or as such holder (upon payment by such
holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock called for on the face or faces of the Warrant or
Warrants so surrendered.
11. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Warrant and, in the case of any such loss, theft or destruction of any
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company may, by written notice to each holder of a
Warrant, appoint an agent having an office in either Boston, Massachusetts or
New York, New York for the purpose of issuing Common Stock on the exercise of
the Warrants pursuant to Section 1, exchanging Warrants pursuant to Section 10,
and replacing Warrants pursuant to Section 11, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be,
shall be made at such office by such agent.
13. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. Negotiability, etc. This Warrant is issued upon the following terms,
to all of which each holder or owner hereof by the taking hereof consents and
agrees:
(a) subject to compliance with all applicable securities laws, title
to this Warrant may be transferred by endorsement (by the holder hereof
<PAGE>
executing the form of assignment at the end hereof) and delivery in the
same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered
to transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives and
renounces all of his equities or rights in this Warrant in favor of each
such bona fide purchaser, and each such bona fide purchaser shall acquire
absolute title hereto and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder hereof as the absolute owner
hereof for all purposes, notwithstanding any notice to the contrary.
15. Notices, etc. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to
the Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
16. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the laws of The Commonwealth of Massachusetts.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. This Warrant is being
executed as an instrument under seal. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
17. Expiration; Automatic Exercise. The right to exercise this Warrant
shall expire at 5:00 P.M., Boston time, on June 30, 2006. Notwithstanding the
foregoing, this Warrant shall automatically be deemed to be exercised in full
pursuant to the provisions of Section 1.3 hereof, without any further action on
behalf of the holder hereof, immediately prior to the time this Warrant would
otherwise expire pursuant to the preceding sentence.
<PAGE>
Dated: June 30, 1999 LECROY CORPORATION
/s/ John C. Maag
--------------------------------------
John C. Maag
Vice President - Finance, Chief Financial Officer,
Treasurer and Secretary
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: LeCroy Corporation
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder__________shares
of Common Stock of LeCroy Corporation and herewith makes payment of $__________
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to whose address is
______________________________
Dated: _________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
____________________________
FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto ...................... the right represented by the within Warrant to
purchase shares of Common Stock of LeCroy Corporation to which the within
Warrant relates, and appoints ____________________ Attorney to transfer such
right on the books of LeCroy Corporation with full power of substitution in the
premises.
Dated: _________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
________________________________________
(Address)
Signed in the presence of:
______________________________
<PAGE>
EXHIBIT 2.2
COMMON STOCK PURCHASE WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS, AND NO SALE
OR TRANSFER HEREOF MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT OR AN OPINION
OF COUNSEL FOR THE HOLDER, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
No. W-5 Right to Purchase 4,375 Shares of
Common Stock of LeCroy Corporation
LECROY CORPORATION
Common Stock Purchase Warrant
LeCroy Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Advent Partners Limited Partnership, or
registered permitted assigns, is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time before
5:00 P.M., Boston time, on June 30, 2006 fully paid and nonassessable shares of
common stock, par value $.01 per share, of the Company ("Common Stock"), at a
exercise price per share of $20.00 (such exercise price per share as adjusted
from time to time as herein provided is referred to herein as the "Exercise
Price"). The number and character of such shares of Common Stock and the
Exercise Price are subject to adjustment as provided herein.
This Warrant is one of a series of Common Stock Purchase Warrants (the
"Warrants") evidencing the right to purchase shares of Common Stock of the
Company, issued pursuant to a certain Securities Purchase Agreement (the
"Agreement"), dated as of June 30, 1999, between the Company and the Purchasers
(as defined therein), a copy of which is on file at the principal office of the
Company. The holder of this Warrant shall be entitled to all of the benefits of
the Agreement, as provided therein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include LeCroy Corporation and any
corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes the Company's Common Stock, $.01 par
value per share, as authorized on the date of the Agreement and any other
<PAGE>
securities into which or for which any of such Common Stock may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.
1. Exercise of Warrant.
1.1. Full Exercise. This Warrant may be exercised at any time at the
Option of the holder hereof in full by such holder by surrender of this
Warrant, with the form of subscription at the end hereof duly executed by such
holder, to the Company at its principal office, accompanied by payment, in cash
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock for
which this Warrant is then exercisable by the Exercise Price then in effect.
1.2. Partial Exercise. This Warrant may be exercised at any time in
the sole discretion of the holder hereof in part by surrender of this Warrant
in the manner and at the place provided in Section 1.1 except that the amount
payable by the holder on such partial exercise shall be the amount obtained by
multiplying (a) the number of shares of Common Stock designated by the holder
in the subscription at the end hereof by (b) the Exercise Price then in effect.
On any such partial exercise the Company at its expense will forthwith issue
and deliver to or upon the order of the holder hereof a new Warrant or Warrants
of like tenor, in the name of the holder hereof or as such holder (upon payment
by such holder of any applicable transfer taxes) may request, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
for which such Warrant or Warrants may still be exercised.
1.3 Net Issue Election. The holder hereof may elect to receive,
without the payment by such holder of any additional consideration, shares of
Common Stock equal to the value of this Warrant or any portion hereof by the
surrender of this Warrant or such portion to the Company, with the form of
subscription at the end hereof duly executed by such holder, at the principal
office of the Company. Thereupon, the Company shall issue to such holder such
number of fully paid and nonassessable shares of Common Stock as is computed
using the following formula:
<PAGE>
X = Y (A-B)
A
where X = the number of shares to be issued to such holder pursuant to this
Section 1.3;
Y = the number of shares covered by this Warrant in respect of which the
net issue election is made pursuant to this Section 1.3;
A = the fair market value of one share of Common Stock, as determined in
accordance with the following provisions, as at the time the net issue election
is made pursuant to this Section 1.3; and
B = the Exercise Price in effect under this Warrant at the time the net
issue election is made pursuant to this Section 1.3.
For purposes of this Section 1.3, "fair market value" of one (1) share of
Common Stock shall be determined as follows:
(1) Where there exists a public market for the Company's Common
Stock at the time of such exercise, the fair market value per share
shall be the average of the closing bid and asked prices of the
Common Stock quoted in the Over-The-Counter Market Summary or the
last reported sale price of the Common Stock or the closing price
quoted on the NASDAQ System or on any exchange on which the Common
Stock is listed, whichever is applicable, as published in The Wall
Street Journal for the five (5) trading days prior to the date of
determination of fair market value. Notwithstanding the foregoing, in
the event the Warrants are exercised in connection with the Company's
secondary public offering of Common Stock, the fair market value per
share shall be the per share offering price to the public of the
Company's secondary public offering.
(2) If no public market for the Common Stock exists at the time
of such exercise, the Company and the holder hereof shall negotiate
in good faith in an effort to reach agreement upon the fair market
value of one share of Common Stock for a period of ten (10) days
after delivery of the executed subscription.
(3) If the Company and the holder hereof are unable to reach
agreement under the foregoing subparagraph (2), the fair market value
of one share of Common Stock shall be determined by appraisal. The
Company and the holder hereof shall each select an appraiser (the
"Selected Appraisers") within thirty (30) days after the expiration
of the ten-day period in subparagraph (2) above. Each Selected
Appraiser shall render its appraisal within thirty (30) days of its
appointment hereunder. In the event that either Selected Appraiser
<PAGE>
fails to render an appraisal within such thirty-day period, the first
appraisal rendered shall be conclusive. In the event that the values
determined by the Selected Appraisers differ by less than ten percent
(10%) of the lower value, the fair market value shall be the average
of the appraisals made by each of the Selected Appraisers. In the
event that the values differ by ten percent (10%) or more of the
lower value, the Selected Appraisers shall within ten (10) days
select a third appraiser (the "Neutral Appraiser") to conduct an
appraisal. The Neutral Appraiser shall render its appraisal within
thirty (30) days of its appointment hereunder. The fair market value
of one share of Common Stock shall be equal to the appraisal made by
the Neutral Appraiser if such appraisal is between the two appraisals
made by the Selected Appraisers or, if such appraisal by the Neutral
Appraiser is not between the two appraisals made by the Selected
Appraisers, then the fair market value of one share of Common Stock
shall be that one of the two appraisals made by the Selected
Appraisers that is closer to the appraisal made by the Neutral
Appraiser. All appraisals delivered pursuant to this subparagraph (3)
shall be in writing and signed by the appraiser. The fees, costs and
expenses of each of the Selected Appraisers will be borne by the
party who selected such appraiser, and the fees, costs and expenses
of the Neutral Appraiser will be borne equally by the Company and the
holder hereof.
(4) In appraising the fair market value of one share of Common
Stock, there shall be no discount for minority interests.
(5) The fair market value as determined in accordance with this
Section 1.3 shall be conclusive, final and binding upon the Company
and the holder hereof, and shall be enforceable in any court having
jurisdiction over a proceeding to enforce the terms of this Warrant.
1.4. Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrants
pursuant to Section 4.2, such bank or trust company shall have all the powers
and duties of a warrant agent appointed pursuant to Section 12 and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or
such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.
2. Delivery of Stock Certificates, etc. on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within ten (10) days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock to which such holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current market value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such holder
is entitled upon such exercise pursuant to Section 1 or otherwise.
<PAGE>
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock shall have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) shall have become entitled
to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate
rearrangement,
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 5.3),
then and in each such case the holder of this Warrant, on the exercise hereof
as provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) which such holder would hold on the date
of such exercise if on the date hereof he had been the holder of record of the
number of shares of Common Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and all such other or additional stock and
other securities and property (including cash in the cases referred to in
clauses (b) and (c) of this Section 3) receivable by him as aforesaid during
such period, giving effect to all adjustments called for during such period by
Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1. Reorganization. In case at any time or from time to time, the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company, then, in each such case, the holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution as the case may be, shall receive, in lieu of the
Common Stock issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such holder had so
exercised this Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in Sections 3 and 5.
4.2. Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause
to be delivered the stock and other securities and property (including cash,
<PAGE>
where applicable) receivable by the holders of the Warrants after the effective
date of such dissolution pursuant to this Section 4 to a bank or trust company
having its principal office in Boston, Massachusetts, as trustee for the holder
or holders of the Warrants.
4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities
and property receivable on the exercise of this Warrant after the consummation
of such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in
the case of any such transfer, the person acquiring all or substantially all of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 6.
5. Extraordinary Events. In the event that the Company shall (i) issue
additional shares of the Common Stock as a dividend or other distribution on
outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common Stock, then, in each such event, the
Exercise Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 5.
The holder of this Warrant shall thereafter, on the exercise hereof as provided
in Section 1, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which would
otherwise (but for the provisions of this Section 5) be issuable on such
exercise by a fraction of which (i) the numerator is the Exercise Price which
would otherwise (but for the provisions of this Section 5) be in effect, and
(ii) the denominator is the Exercise Price in effect on the date of such
exercise.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (a) will not increase the par value of any shares
of stock receivable on the exercise of the Warrants above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of all Warrants from time to
time outstanding, and (c) will not transfer all or substantially all of its
<PAGE>
properties and assets to any other person (corporate or otherwise), or
consolidate with or merge into any other person or permit any such person to
consolidate with or merge into the Company (if the Company is not the surviving
person), unless such other person shall expressly assume in writing and will be
bound by all the terms of the Warrants.
7. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or, if the holder of a Warrant so requests, independent
certified public accountants of recognized standing selected by the Company to
compute such adjustment or readjustment in accordance with the terms of the
Warrants and prepare a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or receivable by the Company for any additional shares of Common Stock issued
or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock outstanding or deemed to be outstanding, and (c) the Exercise
Price and the number of shares of Common Stock to be received upon exercise of
this Warrant, in effect immediately prior to such issue or sale and as adjusted
and readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to each holder of a Warrant, and will, on the
written request at any time of any holder of a Warrant, furnish to such holder
a like certificate setting forth the Exercise Price at the time in effect and
showing how it was calculated.
8. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
or securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or consolidation or
merger of the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of stock
of any class or any other securities, or any right or option to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities (other than the issue of Common Stock on the exercise of
the Warrants),
then and in each such event the Company will mail or cause to be mailed to each
registered holder of a Warrant a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up, and (iii) the amount and
character of any stock or other securities, or rights or options with respect
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall be mailed at least 20 days prior to
the date specified in such notice on which any such action is to be taken.
9. Reservation of Stock, etc., Issuable on Exercise of Warrants. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrants, all shares of Common Stock from time
to time issuable on the exercise of the Warrants.
10. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or on the order of the holder thereof a new Warrant or warrants of
like tenor, in the name of such holder or as such holder (upon payment by such
holder of any applicable transfer taxes and, if requested by the Company,
demonstration by such holder of compliance with applicable securities laws) may
direct, calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock called for on the face or faces of the Warrant or
Warrants so surrendered.
11. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Warrant and, in the case of any such loss, theft or destruction of any
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of such warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company may, by written notice to each holder of a
Warrant, appoint an agent having an office in either Boston, Massachusetts or
New York, New York for the purpose of issuing Common Stock on the exercise of
the Warrants pursuant to Section 1, exchanging Warrants pursuant to Section 10,
and replacing Warrants pursuant to Section 11, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be,
shall be made at such office by such agent.
13. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
14. Negotiability, etc. This Warrant is issued upon the following terms,
to all of which each holder or owner hereof by the taking hereof consents and
agrees:
(a) subject to compliance with all applicable securities laws, title
to this Warrant may be transferred by endorsement (by the holder hereof
<PAGE>
executing the form of assignment at the end hereof) and delivery in the
same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered
to transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives and
renounces all of his equities or rights in this Warrant in favor of each
such bona fide purchaser, and each such bona fide purchaser shall acquire
absolute title hereto and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder hereof as the absolute owner
hereof for all purposes, notwithstanding any notice to the contrary.
15. Notices, etc. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to
the Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
16. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or
termination is sought. This Warrant shall be construed and enforced in
accordance with and governed by the laws of The Commonwealth of Massachusetts.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. This Warrant is being
executed as an instrument under seal. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
17. Expiration; Automatic Exercise. The right to exercise this Warrant
shall expire at 5:00 P.M., Boston time, on June 30, 2006. Notwithstanding the
foregoing, this Warrant shall automatically be deemed to be exercised in full
pursuant to the provisions of Section 1.3 hereof, without any further action on
behalf of the holder hereof, immediately prior to the time this Warrant would
otherwise expire pursuant to the preceding sentence.
<PAGE>
Dated: June 30, 1999 LECROY CORPORATION
/s/ John C. Maag
--------------------------------------
John C. Maag
Vice President - Finance, Chief Financial Officer,
Treasurer and Secretary
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO: LeCroy Corporation
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder__________shares
of Common Stock of LeCroy Corporation and herewith makes payment of $__________
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to whose address is
______________________________
Dated: ___________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
______________________________
FORM OF ASSIGNMENT
(To be signed only on transfer of warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto ...................... the right represented by the within Warrant to
purchase shares of Common Stock of LeCroy Corporation to which the within
Warrant relates, and appoints ____________________ Attorney to transfer such
right on the books of LeCroy Corporation with full power of substitution in the
premises.
Dated: ________________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
________________________________________
(Address)
Signed in the presence of:
______________________________
EXHIBIT 2.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement"), dated as of June 30,
1999, is entered into by and among LeCroy Corporation (the "Company") and the
entities set forth on Schedule 1 attached hereto (collectively, the "Selling
Holders").
RECITALS
WHEREAS, the Company and the Selling Holders have entered into a Stock
Purchase Agreement of even date herewith (the "Series A Purchase Agreement")
pursuant to which the Selling Holders purchased an aggregate of 500,000 shares
of the Company's Series A Convertible Redeemable Preferred Stock, par value
$.01 per share ("Series A Preferred Stock"), convertible into shares (the
"Conversion Shares") of the Company's common stock, par value $.01 per share
("Common Stock"); and
WHEREAS, the Company has executed a Common Stock Purchase Warrant of even
date herewith (each, a "Warrant" and collectively, the "Warrants"), pursuant to
which the Selling Holders were granted warrants to purchase an aggregate of
250,000 shares of the Company's Common Stock (the "Warrant Shares"); and
WHEREAS, the Company and the Selling Holders wish to provide for certain
arrangements with respect to the registration of the Conversion Shares and
Warrant Shares under the Securities Act.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, and the consummation of the sale and purchase of
the Series A Preferred Stock pursuant to the Series A Purchase Agreement, the
issuance of the Warrants and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall have the meaning set forth in the Recitals.
"Conversion Shares" shall have the meaning set forth in the Recitals.
<PAGE>
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Registrable Shares" shall mean (i) any shares of Common Stock
purchased by, or issued to or issuable upon conversion of the Series A
Preferred Shares or exercise of the Warrants including without limitation any
Conversion Shares issued or issuable upon exercise of any and all of the Series
A Preferred Shares, (ii) any Warrant Shares issued or issuable upon exercise of
any or the Warrants and (iii) any Common Stock issued or issuable with respect
to the Conversion Shares or Warrant Shares by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.
"Registration Expenses" shall mean the expenses so described in Section
4 of Article II.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 4 of
Article II.
"Series A Preferred Shares" shall mean the 500,000 shares of Series A
Preferred Stock purchased by the Selling Holders pursuant to the terms of the
Series A Purchase Agreement.
"Warrant" and "Warrants" shall each have the meaning set forth in the
Recitals.
"Warrant Shares" shall have the meaning set forth in the Recitals.
ARTICLE II
REGISTRATION RIGHTS
1. Registration of Conversion Shares and Warrant Shares. The Company
shall, within one hundred twenty (120) calendar days from the date hereof, file
with the Commission a registration statement on Form S-3 (or any successor form
to Form S-3) for a public resale offering by the Selling Holders of the
Registrable Shares and shall use its best efforts to cause such registration
statement to become and remain effective for the period ending on the first to
occur of (x) the date the resale of all of the Registrable Shares registered
thereunder is complete or (y) the fifth anniversary of the date hereof. If for
any reason the Company is not eligible to file such registration statement on
Form S-3 (or any successor form to Form S-3), the Company shall effect such
registration using such form as the Company is then eligible to use.
2. Piggyback Registration.
<PAGE>
(a) If at any time after the date hereof the Company proposes to
register any shares of Common Stock under the Securities Act in connection with
an underwritten offering, either for its own account or the account of a
security holder or holders exercising their registration rights, (except
pursuant to a registration statement filed on Form S-4 or Form S-8 or such
other form as shall be prescribed under the Securities Act for the same
purposes), the Company will promptly at each such time give written notice to
the Selling Holders as provided in Section 2 of Article III of its intention to
do so. Within twenty (20) days after receipt of such notice, such Selling
Holders may request that the Company register all or part of the Registrable
Shares (the "Designated Shares"). Upon receipt of such request, the Company
shall use its best efforts to effect the registration of the Designated Shares
identified by including such Designated Shares in such registration statement.
(b) In the event that securities of the same class as the Designated
Shares are being registered by the Company in such registration statement and
such securities as well as any of the Designated Shares are to be distributed
in an underwritten offering, such Designated Shares shall be included in such
underwritten offering on the same terms and conditions as the securities being
issued by the Company for distribution pursuant to such underwritten offering;
provided, however, that if the managing underwriter of such underwritten
offering reasonably determines in good faith and advises the parties that the
inclusion in such underwritten offering of all the Designated Shares would
materially and adversely affect the success of the underwritten offering, then
the number of Designated Shares to be included in the registration statement
shall be reduced to the amount recommended in good faith by and set forth in
the opinion of such managing underwriter; provided, further, that as to the
Selling Holders exercising piggyback registration rights pursuant to this
Section 2, such reduction shall be pro rata (based on the number of shares held
by each) with respect to the Designated Shares with other persons holding
contractual incidental or "piggy-back" registration rights in such underwritten
offering.
3. Registration Procedures. If and whenever the Company is required by the
provisions of Sections 1 or 2 of Article II to effect the registration of any
Registrable Shares under the Securities Act, the Company will, as expeditiously
as practicable:
(a) Preparation of Registration Statement. Promptly prepare and file
with the Commission, a registration statement on such form as may be
appropriate under the Securities Act, and use its best efforts to cause such
registration statement to become effective.
(b) Maintain Effectiveness. Promptly prepare and file with the
Commission such amendments to the registration statement as may be necessary to
keep such registration statement effective for a period of (i) five (5) years
for any such registration statement filed pursuant to Section 1 hereof and (ii)
until the completion of the offering with respect to a registration statement
filed pursuant to Section 2 hereof, or in either instance such shorter period
which will terminate when all Registrable Shares covered by such registration
statement have been sold.
<PAGE>
(c) Notification. Immediately notify the Selling Holders and the
managing underwriters, if any, and (if requested by any such person) confirm
such advice in writing, (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and, with respect to a registration
statement or any post-effective amendment, when the same has become effective,
(ii) of the issuance by the Commission of any stop order suspending the
effectiveness of the registration statement or the initiation of any proceeding
for that purpose, (iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any of the Registrable Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose, and (iv) of the happening of any event which makes any
statement made in the registration statement, the prospectus or any document
incorporated therein by reference untrue or which requires the making of any
changes in the registration statement, the prospectus, or any document
incorporated therein by reference so that they will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statement therein not misleading,
provided, that upon such notification by the Company, the Selling Holders shall
not offer to sell Registrable Shares until the Company has notified the Selling
Holders that it has prepared such a supplement or amendment, filed such a
document, or filed and caused to become effective such post-effective
amendment, and has delivered copies thereof to the Selling Holders.
(d) Stop Orders. Make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of a registration statement or the
qualification of any Registrable Shares for sale in any jurisdiction at the
earliest possible moment.
(e) Consultation with Selling Holder. Prior to the filing of any
registration statement or amendment thereto, provide copies of such document to
the Selling Holders and to the managing underwriters, if any, and make the
Company's representatives and the Company's counsel available for discussion of
such document and make such changes in such document relating to the Selling
Holders prior to the filing thereof as such Selling Holders, counsel for such
Selling Holders, or underwriters may reasonably request.
(f) Copies of Registration Statements. Furnish to each Selling Holder
and each managing underwriter, if any, without charge, at least one originally
executed copy of the registration statement and any post-effective amendment
thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those
incorporated by reference).
(g) Prospectuses. Deliver to each Selling Holder and the underwriters,
if any, without charge, as many copies of the prospectus (and each preliminary
prospectus) and any amendment or supplement thereto as such persons may
reasonably request so long as the registration statement to which such
prospectus or any amendment or supplement thereto relates is effective.
(h) Blue Sky Laws. Prior to any public offering of Registrable Shares,
use its best efforts to register or qualify or cooperate with the Selling
Holders, the underwriters, if any, and their respective counsel in connection
<PAGE>
with the registration or qualification of such Registrable Shares for offer and
sale under the securities or blue sky laws of such jurisdictions within the
United States as any Selling Holder or underwriter reasonably requests, and do
any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Shares covered by the
registration statement; provided, however, that the Company will not be
required to qualify generally to do business in any jurisdiction where it is
not then so qualified or to take any action which would subject it to general
service of process or taxation in any such jurisdiction where it is not then so
subject.
(i) Amendments Upon Changes. Upon the occurrence of any event
contemplated by Sections (c)(ii), c(iii), (c)(iv) or (d) above, prepare as
promptly as practicable, a supplement or post-effective amendment to the
registration statement or related prospectus or any document incorporated
therein by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Shares being sold
thereunder, such prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading.
(j) Underwriting Agreements. Enter into such customary agreements
(including an underwriting agreement) and take all such other actions
reasonably required in connection therewith in order to expedite or facilitate
the disposition of such Registrable Shares.
(k) Compliance with Laws; Section 11(a). Otherwise use its best efforts
to comply with all applicable federal and state securities laws (including
without limitation the rules and regulations of the Commission), and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act no later than forty-five (45)
days after the end of each twelve (12) month period (or within ninety (90) days
after the end of a fiscal year).
(l) Opinions. At the request of any Selling Holder, use its best
efforts to furnish on the date that the Registrable Shares are delivered to any
underwriter for sale in connection with a registration pursuant to this
Agreement (i) an opinion of the counsel representing the Company for the
purposes of such registration, and (ii) a letter from the independent certified
public accountants of the Company, each dated such date and in form and
substance as is customarily given by counsel and independent certified public
accountants to underwriters in an underwritten public offering, addressed to
any Selling Holders' underwriter and to the Selling Holders.
4. Expenses. All expenses incurred by the Company in complying with
Sections 1, 2 and 3 of Article II, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees of the
National Association of Securities Dealers, Inc., fees of transfer agents and
registrars and costs of insurance, but excluding any Selling Expenses, are
called "Registration Expenses." All underwriting discounts and selling
commissions applicable to the sale of Registrable Shares and fees and
disbursements of counsel for the Selling Holders of Registrable Shares are
called "Selling Expenses."
<PAGE>
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 1 or 2 of Article II. All Selling
Expenses in connection with each registration statement under Sections 1 or 2
of Article II shall be borne by the participating Selling Holders in proportion
to the number of Registrable Shares sold by each, or by such participating
Selling Holders other than the Company (except to the extent the Company shall
be a seller) as they may agree.
5. Indemnification and Contribution. (a) In the event of a registration of
any of the Registrable Shares under the Securities Act pursuant to Sections 1
or 2 of Article II, the Company shall indemnify and hold harmless each Selling
Holder of such Registrable Shares thereunder and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such seller or controlling person may become subject under the Securities Act,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Registrable Shares were registered under the Securities Act pursuant
to Sections 1 or 2 of Article II, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such Selling Holder and each
such controlling person for any legal expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon (i) an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by any such Selling Holder or any such controlling person
in writing specifically for use in such registration statement or prospectus,
(ii) such Selling Holder's failure timely to deliver a copy of the prospectus,
(iii) an error or omission in a preliminary prospectus that is subsequently
corrected in a final prospectus or an error or omission in the registration
statement or any prospectus that is corrected in a supplement or amendment that
is timely delivered by the Company to such Selling Holder but which such
Selling Holder fails timely to deliver, or (iv) the violation by such Selling
Holder of Section 3(c) hereof.
(b) In the event of a registration of any of the Registrable Shares
under the Securities Act pursuant to Sections 1 or 2 of Article II, each
Selling Holder of such Registrable Shares thereunder, severally and not
jointly, shall indemnify and hold harmless the Company, each person, if any,
who controls the Company within the meaning of the Securities Act, each officer
of the Company who signs the registration statement, each director of the
Company, each underwriter and each person who controls any underwriter within
the meaning of the Securities Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such officer, director,
underwriter or controlling person may become subject under the Securities Act,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
<PAGE>
statement of any material fact contained in the registration statement under
which such Registrable Shares were registered under the Securities Act pursuant
to Sections 1 or 2 of Article II, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company and each such officer,
director, underwriter and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that such
Selling Holder will be, severally and not jointly, liable hereunder in any such
case if and only to the extent that any such loss, claim, damage or liability
arises out of or is based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to such Selling Holder, as such,
furnished in writing to the Company by such Selling Holder specifically for use
in such registration statement or prospectus, (ii) such Selling Holder's
failure timely to deliver a copy of the prospectus, (iii) an error or omission
in a preliminary prospectus that is subsequently corrected in a final
prospectus or an error or omission in the registration statement or any
prospectus that is corrected in a supplement or amendment that is timely
delivered by the Company to such Seller Holder but which such Selling Holder
fails timely to deliver, or (iv) the violation by such Selling Holder of
Section 3(c) hereof; and provided, further, that the aggregate liability of
each Selling Holder hereunder shall be limited to the aggregate price to the
public of the shares sold by such Selling Holder in such registration.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 5 and shall only relieve
it from any liability which it may have to such indemnified party under this
Section 5 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified
party, the indemnifying party shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 5 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof; provided, however,
that, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that the interests of the indemnified party reasonably may be deemed
to conflict with the interests of the indemnifying party, the indemnified party
shall have the right to select separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred. In any
such case, the indemnifying party shall not, in connection with any one action
<PAGE>
or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
for all indemnified parties. Notwithstanding anything else in this Agreement to
the contrary, no indemnified party shall, without the prior written consent of
the indemnifying party, effect any settlement or compromise of, or consent to
the entry of judgment with respect to, any pending or threatened action in
respect of which indemnification may be sought hereunder.
6. Changes in Common Stock or Preferred Stock. If, and as often as, there
is any change in the Common Stock or the Series A Preferred Stock by way of a
stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, then appropriate adjustment shall be made in the provisions hereof so
that the rights and privileges granted hereby shall continue with respect to
the Registrable Shares as so changed.
7. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Shares to the public without registration, at all
times unless any registration statement covering a public offering of
securities of the Company under the Securities Act pursuant to Section 1 of
Articles II shall have become and remains effective, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities
Act and the Exchange Act; and
(c) furnish to each holder of Registrable Shares forthwith upon request
a written statement by the Company as to its compliance with the reporting
requirements of such Rule 144.
8. Limitations on Registration Rights. From and after the date of this
Agreement, the Company shall not enter into any agreement with any holder or
prospective holder of any securities of the Company giving such holder or
prospective holder (a) the right to require the Company, upon any registration
of any of its securities, to include, among the securities which the Company is
then registering, securities owned by such holder, unless under the terms of
such agreement, such holder or prospective holder may include such securities
in any such registration only to the extent that the inclusion of its
securities will not limit the number of shares of Registrable Shares sought to
be included by the Selling Holders or reduce the offering price thereof; or (b)
the right to require the Company to initiate any registration of any securities
of the Company without the consent of the director designated by the Selling
Holders.
9. Exception to Registration. The Company shall not be required to effect
a registration under this Article II if (i) in the written opinion of counsel
for the Company, which counsel and the opinion so rendered shall be reasonably
acceptable to the Selling Holders, such Selling Holders may sell without
registration under the Act all Registrable Shares for which they requested
registration under the provisions of the Act and in the manner and in the
quantity in which the Registrable Shares were proposed to be sold, or (ii) the
Company shall have obtained from the Commission a "noaction" letter to that
effect.
<PAGE>
10. Listing of Shares. The Company shall, at its expense, list all of the
shares owned by each Selling Holder of any class of stock of the Company that
is at any time listed on a national securities exchange with such national
securities exchange.
11. Intentionally Omitted.
12. Intentionally Omitted.
13. "Black-Out" Rights. The Company may postpone for up to ninety (90)
days the filing or the effectiveness of a registration statement for any
registration filed pursuant to Section 2 of Article 2 hereof, if the Company's
Board of Directors determines that such registration would not be in the best
interests of the Company at the time.
14. Restrictions on Public Sale by the Company and Others. The Company
agrees not to effect any public sale or distribution of its Common Stock,
during a period, not to exceed forty-five (45) days, beginning on the closing
date of an underwritten offering made pursuant to a registration statement
filed under Section 2 of Article II to the extent timely notified in writing by
the managing underwriters (except as part of such underwritten registration or
pursuant to registrations on Form S-4 or Form S-8 or any successor form to such
forms).
15. Underwriting Agreement. Each Selling Holder participating in an
underwritten offering pursuant to Section 2 of Article II shall enter into a
customary underwriting agreement on terms reasonably satisfactory to the
managing underwriter.
ARTICLE III
MISCELLANEOUS
1. Assignment. All covenants and agreements contained in this Agreement by
or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto.
2. Notices. All notices, requests, consents, reports and demands shall be
in writing and shall be hand delivered, sent by facsimile or other electronic
medium, or mailed, postage prepaid, to the Company or the Selling Holders at
the address set forth below or to such other address as may be furnished in
writing to the other parties hereto:
<TABLE>
<CAPTION>
<S> <C>
The Company: LeCroy Corporation
700 Chestnut Ridge Road
Chestnut Ridge, NY 10977-6499
Attention: President
Tel: (914) 425-2000
Fax: (914) 578-6061
<PAGE>
with copy to: Bingham Dana LLP
150 Federal Street
Boston, MA 02110
Attention: Roger Feldman, Esq.
Tel: (617) 951-8000
Fax: (617) 951-8736
The Selling Holders: The address set forth opposite the Purchaser's name on Schedule 1
attached hereto.
with copy to: Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street Boston,
Massachusetts 02110
Attention: Anthony J. Medaglia, Jr., P.C.
Tel: (617)951-6600
Fax: (617) 951-1295
</TABLE>
3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts.
4. Waiver, Modification, etc. Neither this Agreement nor any provision
hereof may be waived, modified, amended or terminated except by a written
agreement signed by the parties hereto; provided, however, that Selling Holders
owning at least a majority of the Registrable Shares owned by all Selling
Holders may effect any such waiver, modification, amendment or termination on
behalf of all of the Selling Holders. Each of the Selling Holders and the
Company represents that he or it is not a party to any other agreement which
would prevent him or it from performing his or its obligations hereunder. No
waiver of any breach or default hereunder shall be considered valid unless in
writing, and no such waiver shall be deemed a waiver of any subsequent breach
or default of the same or similar nature.
5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6. Invalidity, etc. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other provision
of this Agreement, and this Agreement shall be carried out as if any such
illegal, invalid or unenforceable provision were not contained herein.
7. Captions. Captions are for convenience only and are not deemed to be
part of this Agreement.
<PAGE>
8. Term. This Agreement and the respective rights and obligations of the
parties hereto shall terminate immediately upon the earlier of (a) the sale of
all of the Registrable Shares owned by each of the Selling Holders and (b) the
tenth anniversary of the date hereof.
9. Specific Enforcement. Each Selling Holder expressly agrees that the
other Selling Holders and the Company may be irreparably damaged if this
Agreement is not specifically enforced. Upon a breach or threatened breach of
the terms, covenants and/or conditions of this Agreement by any Selling Holder
or the Company, the other Selling Holders and the Company shall, in addition to
all other remedies, each be entitled to apply for a temporary or permanent
injunction, and/or a decree for specific performance, in accordance with the
provisions hereof and that the Company will not oppose an application seeking
such specific performance.
10. Attorneys' Fees. Should any litigation be commenced (including any
proceedings in a bankruptcy court) between parties hereto or their
representatives concerning any provision of this Agreement or the rights and
duties of any person or entity hereunder, the party or parties prevailing in
such proceeding shall be entitled, in addition to such other relief as may be
granted, to the reasonable attorneys' fees and court costs incurred by reason
of such litigation.
11. Transfers of Rights. This Agreement, and the rights and obligations of
each Selling Holder hereunder, may be assigned by such Selling Holder to any
person or entity acquiring Registrable Shares owned by such Selling Holder
(subject to adjustment for stock splits, stock dividends, recapitalization or
similar events), and such transferee shall be deemed a "Selling Holder" for
purposes of this Agreement; provided that the transferee provides written
notice of such assignment to the Company.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Registration Rights Agreement as of the date first above written. LECROY
CORPORATION
<TABLE>
<CAPTION>
<S> <C>
LECROY CORPORATION
/s/ John C. Maag
--------------------------
John C. Maag
Vice President - Finance, Chief Financial Officer, Treasurer and
Secretary
SELLING HOLDERS
ADVENT GLOBAL GECC III LIMITED PARTNERSHIP
By: Advent Global Management Limited Partnership, General Partner
By: Advent International Limited Partnership, General Partner
By: Advent International Corporation, General Partner
By: /s/Douglas A. Kingsley
--------------------------
Douglas A. Kingsley
Senior Vice President
ENVIROTECH INVESTMENT FUND I LIMITED PARTNERSHIP
By: Advent International Limited Partnership, General Partner
By: Advent International Corporation, General Partner
By: /s/Douglas A. Kingsley
-------------------------
Douglas A. Kingsley
Senior Vice President
ADWEST LIMITED PARTNERSHIP
By: Advent International Limited Partnership, General Partner
By: Advent International Corporation, General Partner
By: /s/Douglas A. Kingsley
-------------------------
Douglas A. Kingsley
Senior Vice President
<PAGE>
OAKSTONE VENTURES LIMITED PARTNERSHIP
By: Advent International Limited Partnership, General Partner
By: Advent International Corporation, General Partner
By: /s/Douglas A. Kingsley
-------------------------
Douglas A. Kingsley
Senior Vice President
ADVENT PARTNERS LIMITED PARTNERSHIP
By: Advent International Corporation, General Partner
By: /s/Douglas A. Kingsley
-------------------------
Douglas A. Kingsley
Senior Vice President
</TABLE>
<PAGE>
SCHEDULE 1
SELLING HOLDERS
<TABLE>
<CAPTION>
<S> <C> <C>
Purchaser Purchased Shares Consideration
Advent Global GECC III Limited Partnership 350,000 $7,000,000
EnviroTech Investment Fund I Limited Partnership 71,250 $1,425,000
Adwest Limited Partnership 20,000 $400,000
Oakstone Ventures Limited Partnership 50,000 $1,000,000
Advent Partners Limited Partnership 8,750 $175,000
Totals 500,000 $10,000,000
</TABLE>
c/o Advent International Corporation
75 State Street
Boston, MA 02109
Attention: Douglas A. Kingsley
EXHIBIT 3
LECROY CORPORATION
CERTIFICATE OF DESIGNATION
OF THE
SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK
The undersigned officer of LeCroy Corporation (the "Corporation"), a
corporation organized and existing under the General Corporation Law of the
State of Delaware (the "General Corporation Law"), hereby certifies that,
pursuant to the authority conferred by the Certificate of Incorporation of the
Corporation and pursuant to the provisions of Section 151 of the General
Corporation Law, the Board of Directors of the Corporation, by unanimous
written consent dated as of June 11, 1999, adopted the following resolution
creating a series of the Corporation's undesignated Preferred Stock, to be
designated as the Series A Convertible Redeemable Preferred Stock, and
providing for certain powers, designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations
and restrictions thereof, of shares of such Series A Convertible Redeemable
Preferred Stock:
RESOLVED: that pursuant to authority expressly granted to and
vested in the Board of Directors of this Corporation by the
provisions of the Certificate of Incorporation, the Board of
Directors hereby designates 500,000 shares of Preferred Stock
as Series A Convertible Redeemable Preferred Stock, with the
relative rights and preferences as set forth in the
Certificate of Designation attached hereto as Exhibit A.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be duly executed in its corporate name by a duly authorized
officer as of this 30th day of June, 1999.
LECROY CORPORATION
By: /s/ Lutz P. Henckels
-------------------------------------
Lutz P. Henckels
President and Chief Executive Officer
Attest:
/s/ John C. Maag
- --------------------------------------
John C. Maag
Vice President - Finance, Chief Financial Officer, Treasurer and Secretary
<PAGE>
EXHIBIT A
DESCRIPTION AND DESIGNATION OF THE SERIES A CONVERTIBLE REDEEMABLE PREFERRED
STOCK
1. Designation. 500,000 shares of Preferred Stock, par value $.01 per
share, shall be designated the "Series A Convertible Redeemable Preferred
Stock" (being referred to herein as the "Series A Preferred Stock" ). The
shares of Series A Preferred Stock shall have the following rights, terms and
privileges:
2. Dividends.
(a) Except as otherwise set forth in paragraph (b) below, no dividends
shall be paid upon shares of Series A Preferred Stock.
(b) In the event of either (i) a liquidation event as described in
Section 3 hereof or (ii) the redemption by holders of shares of the Series A
Preferred Stock, pursuant to Section 7 hereof, prior to any payment or
distribution to the holders of common stock, par value of $.01, of the
Corporation ("Common Stock") or any other equity security of the Corporation,
the holders of shares of Series A Preferred Stock shall be entitled to receive,
out of funds legally available therefor, cumulative dividends compounded
annually at a rate per share equal to twelve percent (12%) of the original
purchase price of $20.00 paid per share of the Series A Preferred Stock (which
amount shall be subject to adjustment whenever there shall occur a stock split,
combination, reclassification or other similar event involving the Series A
Preferred Stock). Such dividends shall be deemed to accrue on the Series A
Preferred Stock from the date of the original issuance thereof and be
cumulative, whether or not earned or declared and whether or not there are
profits, surplus or other funds of the Corporation legally available for the
payment of dividends. If such cumulative dividends in respect of any prior or
current annual dividend period shall not have been declared and paid or if
there shall not have been a sum sufficient for the payment thereof set apart,
the deficiency shall first be fully paid before any dividend or other
distribution shall be paid or declared and set apart with respect to any class
of the Corporation's capital stock, now or hereafter outstanding.
(b) Dividends in Kind. In the event the Corporation shall make or
issue, or shall fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution with respect to the
Common Stock payable in (i) securities of the Corporation other than shares of
Common Stock or (ii) assets, then and in each such event the holders of Series
A Preferred Stock shall receive, at the same time such distribution is made
with respect to Common Stock, the number of securities or such other assets of
the Corporation which they would have received had their Series A Preferred
Stock been converted into Common Stock immediately prior to the record date for
determining holders of Common Stock entitled to receive such distribution.
3. Liquidation, Dissolution or Winding Up.
<PAGE>
(a) Treatment at Liquidation, Dissolution or Winding Up. In the event
of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, before any distribution may be made with respect to
the Common Stock, each holder of outstanding shares of Series A Preferred Stock
shall be entitled to, at such holder's sole discretion, elect to either (a)
convert such holder's Series A Preferred Stock into shares of Common Stock
pursuant to Section 5 hereof, or (b) be paid, prior to any payments to any
other holders of outstanding shares of Preferred Stock, out of the assets of
the Corporation available for distribution to holders of the Corporation's
capital stock of all classes, whether such assets are capital, surplus, or
capital earnings, an amount equal to (i) $20.00 per share (which amount shall
be subject to equitable adjustment whenever there shall occur a stock split,
combination, reclassification or other similar event involving the Series A
Preferred Stock) plus (ii) all accrued and unpaid 12% cumulative dividends
compounded annually thereon, whether or not earned or declared, since the date
of issue up to and including the date full payment shall be tendered to the
holders of the Series A Preferred Stock with respect to such liquidation,
dissolution or winding up (collectively, the "Series A Liquidation Amount," and
together with all other amounts to be paid in respect of shares of Preferred
Stock in preference to shares of Common Stock in the event of such liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the "Liquidation Amount"). Notice of such election shall be submitted in
writing to the Corporation at its principal offices no later than five (5)
business days prior to the effective date of such liquidation, dissolution or
winding up of the Corporation. Failure to deliver such notice by such date
shall be deemed to be an election to have such holder's Series A Preferred
Stock converted into shares of Common Stock of the Corporation pursuant to
Section 5 hereof. If the assets of the Corporation available for distribution
to its stockholders shall be insufficient to pay the holders of shares of
Series A Preferred Stock the full amount of the Series A Liquidation Amount to
which they shall be entitled, the holders of shares of Series A Preferred Stock
shall share ratably in any distribution of assets according to the amounts
which would be payable with respect to the Series A Preferred Stock held by
them upon such distribution if all amounts payable on or with respect to said
shares were paid in full.
After the payment of the Liquidation Amount shall have been made in full
to the holders of the Preferred Stock (including the payment of the Series A
Liquidation Amount) or funds necessary for such payment shall have been set
aside by the Corporation in trust for the account of the holders of Preferred
Stock so as to be available for such payments, the remaining assets of the
Corporation legally available for distribution to its stockholders shall be
distributed among the holders of Common Stock and Series A Preferred Stock,
collectively as one class. Such distribution shall be made to the holders of
Common Stock and Series A Preferred Stock ratably as if each share of the
Series A Preferred Stock had been converted into the number of shares of Common
Stock issuable upon the conversion of a share of Series A Preferred Stock
immediately prior to such liquidation, dissolution or winding up of the
Corporation.
(b) Treatment of Reorganizations. Any Reorganization (as such term is
defined in Section 5(g)), shall be regarded as a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 3.
<PAGE>
(c) Distributions in Cash. The Series A Liquidation Amount shall in all
events be paid in cash; provided, however, that if the Series A Liquidation
Amount is payable in connection with a Reorganization, then each holder of
Series A Preferred Stock may, at its election in writing to the Corporation at
its principal offices no later than five (5) business days before the effective
date of such event, receive payment of the Series A Liquidation Amount in the
same form of consideration as is payable with respect to the Common Stock. In
the event of any Reorganization which is intended to be treated as a "pooling
of interests" for accounting purposes under Accounting Board Opinion No. 16,
the Reorganization or other acquisition consideration (including any shares of
capital stock to be delivered by the acquiring corporation) shall be
reallocated among the holders of the Series A Preferred Stock in an appropriate
manner to give economic effect to the intent and purpose of Sections 3(a), 3(b)
and 3(c). Wherever a distribution provided for in this Section 3 is payable in
property other than cash, the value of such distribution shall be the fair
market value of such property as determined in good faith by the Corporation's
Board of Directors.
4. Voting Power. In addition to the special voting right expressly
provided in Section 8 hereof, or as required by law, each holder of Series A
Preferred Stock shall be entitled to vote on all matters and shall be entitled
to that number of votes equal to the largest number of whole shares of Common
Stock into which such holder's shares of Series A Preferred Stock could be
converted, pursuant to the provisions of Section 5 hereof, at the record date
for the determination of stockholders entitled to vote on such matter or, if no
such record date is established, at the date such vote is taken or any written
consent of stockholders is solicited. Except as otherwise expressly provided in
Section 8 hereof or as required by law, the holders of shares of Series A
Preferred Stock and shares of Common Stock shall vote together as a single
class on all matters.
5. Conversion Rights for the Preferred Stock. The holders of Series A
Preferred Stock shall have the following rights with respect to the conversion
of Series A Preferred Stock into shares of Common Stock:
(a) General. Subject to and in compliance with the provisions of this
Section 5, any share of Series A Preferred Stock may, at the option of the
holder, be converted at any time into fully paid and non-assessable shares of
Common Stock. The number of shares of Common Stock to which a holder of Series
A Preferred Stock shall be entitled upon conversion shall be determined by
multiplying the Conversion Rate (determined as provided in Section 5(b)) by the
number of shares of Series A Preferred Stock being converted. Upon any
conversion pursuant to the provisions of Sections 3(a), 5(g) or 5(n), the
Corporation shall, in addition to the issuance of shares of Common Stock, pay
in cash to the holder all accrued and unpaid 12% cumulative dividends
compounded annually on such shares of Series A Preferred Stock being converted.
(b) Conversion Rate. The conversion rate in effect at any time for the
conversion of Series A Preferred Stock (the "Conversion Rate") shall be
determined by dividing $20.00 by the Conversion Value, calculated as provided
in Section 5(c).
<PAGE>
(c) Conversion Value. The conversion value (the "Conversion Value")
shall initially be $20.00. Such Conversion Value shall be subject to adjustment
from time to time in accordance with this Section 5.
(d) Series A Extraordinary Common Stock Event. Upon the happening of a
Series A Extraordinary Common Stock Event (as hereinafter defined), the
Conversion Value shall, simultaneously with the happening of such Series A
Extraordinary Common Stock Event, be adjusted by multiplying the then effective
Conversion Value by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such Series A
Extraordinary Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such Series A
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the applicable Conversion Value. The Conversion Value shall be readjusted in
the same manner upon the happening of any successive Series A Extraordinary
Common Stock Event or Events.
"Series A Extraordinary Common Stock Event" shall mean (i) the issue of
additional shares of Common Stock as a dividend or other distribution
on outstanding Common Stock or on any class or series of preferred
stock, unless made pro rata to holders of Preferred Stock, (ii) a
subdivision of outstanding shares of Common Stock into a greater number
of shares of Common Stock, or (iii) a combination of outstanding shares
of the Common Stock into a smaller number of shares of Common Stock.
(e) Dividends. In the event the Corporation shall make or issue, a
dividend or other distribution with respect to the Common Stock payable in (i)
securities of the Corporation other than shares of Common Stock or (ii) assets,
then and in each such event the holders of Series A Preferred Stock shall
receive, at the same time such distribution is made with respect to Common
Stock, the number of securities or such other assets of the Corporation which
they would have received had their Series A Preferred Stock been converted into
Common Stock immediately prior to the date of such distribution. No adjustment
to the Conversion Value shall occur as a result of any such dividend.
(f) Capital Reorganization or Reclassification. If the Common Stock
issuable upon the conversion of the Series A Preferred Stock shall be changed
into the same or different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or distribution provided
for elsewhere in this Section 5 or by a Reorganization), then and in each such
event, the holder of each share of Series A Preferred Stock shall have the
right thereafter to convert such share into the kind and amount of shares of
stock and other securities and property receivable upon such capital
reorganization, reclassification or other change by holders of the number of
shares of Common Stock into which such shares of Series A Preferred Stock might
have been converted immediately prior to such capital reorganization,
reclassification or other change.
(g) Merger or Sale of Assets. If at any time or from time to time there
shall be a merger or consolidation of the Corporation with or into another
<PAGE>
corporation which results in the exchange of outstanding shares of the capital
stock of the Corporation for securities or other consideration issued or paid
by such other corporation, or the sale of all or substantially all of the
Corporation's properties and assets to any other person, or the sale of voting
securities of the Corporation in one transaction or a series of related
transactions entitling the holders thereof to elect a majority of the Board of
Directors of the Corporation (any of which events is herein referred to as a
"Reorganization"), then as a part of such Reorganization, provision shall be
made so that the holders of Series A Preferred Stock shall thereafter be
entitled to receive upon conversion of the Series A Preferred Stock, the number
of shares of stock or other securities or property of the Corporation, or of
the successor corporation resulting from such Reorganization, to which such
holder would have been entitled if such holder had converted its shares of
Series A Preferred Stock immediately prior to such Reorganization.
Notwithstanding the foregoing, a Reorganization shall not include any
reorganization, merger or consolidation involving (1) only a change in the
state of incorporation of the Corporation, (2) a merger of the Corporation with
or into a wholly-owned subsidiary of the Corporation that is incorporated in
the United States of America or (3) an acquisition by merger, reorganization or
consolidation, of which the Corporation is the surviving corporation and
operates as a going concern, of another corporation that is engaged in a
business similar or related to or complementary with the business of the
Corporation and which does not involve a recapitalization or reorganization of
the Series A Preferred Stock or Common Stock, and does not involve (in a single
transaction or series of related transactions) a transfer of more than 51% of
the voting power of the Corporation. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Section 5 with
respect to the rights of the holders of Series A Preferred Stock after the
Reorganization, to the end that the provisions of this Section 5 (including
adjustment of the Conversion Value then in effect and the number of shares
issuable upon conversion of the Series A Preferred Stock) shall be applicable
after that event in as nearly equivalent a manner as may be practicable.
Upon the occurrence of a Reorganization, under circumstances which make
the preceding paragraph applicable, each holder of Series A Preferred Stock
shall have the option of electing treatment for his shares of Series A
Preferred Stock under either this Section 5(g) or Section 3 hereof, notice of
which election shall be submitted in writing to the Corporation at its
principal offices no later than five (5) business days before the effective
date of such event. Failure to deliver such notice by such date shall be deemed
to be an election to have such shares treated under this Section 5(g).
(h) Certificate as to Adjustments; Notice by Corporation. In each case
of an adjustment or readjustment of the Conversion Rate, the Corporation at its
expense will furnish each holder of Series A Preferred Stock with a
certificate, executed by the president and chief financial officer (or in the
absence of a person designated as the chief financial officer, by the
treasurer) showing such adjustment or readjustment, and stating in detail the
facts upon which such adjustment or readjustment is based. Any adjustment shall
be calculated to five (5) decimal places.
(i) Exercise of Conversion Privilege. To exercise its conversion
privilege, a holder of Series A Preferred Stock shall surrender the certificate
<PAGE>
or certificates representing the shares being converted to the Corporation at
its principal office, and shall give written notice to the Corporation at that
office that such holder elects to convert such shares. Such notice shall also
state the name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock issuable upon such conversion shall be
issued. The certificate or certificates for shares of Series A Preferred Stock
surrendered for conversion shall be accompanied by proper assignment thereof to
the Corporation or in blank. The date when such written notice is received by
the Corporation, together with the certificate or certificates representing the
shares of Series A Preferred Stock being converted, shall be the "Conversion
Date." As promptly as practicable after the Conversion Date, the Corporation
shall issue and shall deliver to the holder of the shares of Series A Preferred
Stock being converted, or on its written order, such certificate or
certificates as it may request for the number of whole shares of Common Stock
issuable upon the conversion of such shares of Series A Preferred Stock in
accordance with the provisions of this Section 5, cash in an amount equal to
the Series A Liquidation Amount and cash, as provided in Section 5(j), in
respect of any fraction of a share of Common Stock issuable upon such
conversion. Such conversion shall be deemed to have been effected immediately
prior to the close of business on the Conversion Date, and at such time the
rights of the holder as holder of the converted shares of Series A Preferred
Stock shall cease and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares of Common Stock represented thereby. The Corporation shall pay
any taxes payable with respect to the issuance of Common Stock upon conversion
of the Series A Preferred Stock, other than any taxes payable with respect to
income by the holders thereof; provided, however, that the Corporation shall
not be required to pay any taxes or other governmental charges which may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate in a name other than that of the holder of the Series A
Preferred Stock, and the Corporation shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Corporation the amount of such tax or other
governmental charge or shall have established to the satisfaction of the
Corporation that such tax or other governmental charge has been paid or
provided for. The Corporation may also require, as a condition to the issuance
and delivery of any such certificate in a name other than that of the Holder of
any such certificate, an opinion of counsel acceptable to the Corporation to
the effect that the proposed transfer does not require registration under
federal or any state securities law.
(j) Cash in Lieu of Fractional Shares. No scrip or fractional shares
may be issued by the Corporation. Instead, the Corporation shall pay to the
holder of the shares of Series A Preferred Stock which were converted a cash
adjustment in respect of such fractional shares in an amount equal to the same
fraction of the market price per share of the Common Stock (as determined in a
reasonable manner prescribed by the Board of Directors) at the close of
business on the Conversion Date. The determination as to whether or not any
factional shares are issuable shall be based upon the total number of shares of
Series A Preferred Stock being converted at any one time by any holder thereof,
not upon each share of Series A Preferred Stock being converted.
<PAGE>
(k) Partial Conversion. In the event some but not all of the shares of
Series A Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Corporation shall execute and
deliver to or on the order of the holder, at the expense of the Corporation, a
new certificate representing the number of shares of Series A Preferred Stock
which were not converted.
(l) Reservation of Common Stock. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the shares of
Series A Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of Series A Preferred Stock, and if at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of Series A Preferred Stock, the
Corporation shall take such corporate action as may be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.
(m) Minimum Adjustment. Any provision of this Section 5 to the contrary
notwithstanding, no adjustment in the Conversion Value shall be made if the
amount of such adjustment would be less than 1% of the Conversion Value then in
effect, but any such amount shall be carried forward and an adjustment with
respect thereto shall be made at the time of and together with any subsequent
adjustment which, together with all amounts so carried forward, aggregates 1%
or more of the Conversion Value then in effect.
(n) Automatic Conversion. If at any time the Corporation shall effect a
Qualified Public Offering (as hereinafter defined), then upon the effectiveness
of the Registration Statement relating to such Qualified Public Offering, all
outstanding shares of Series A Preferred Stock shall automatically convert into
shares of Common Stock on the basis set forth in Section 5 hereof, including
the payment in cash of all accrued and unpaid 12% cumulative dividends
compounded annually on such shares of Series A Preferred Stock being so
converted. For purposes hereof, the term "Qualified Public Offering" shall mean
the effectiveness of a firmly underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Act"), covering the offer and sale of Common Stock for the account of the
Corporation with an Underwriter in which the aggregate gross proceeds to the
Corporation equal at least $20,000,000 and in which the price per share of
Common Stock is equal to or greater than (i) $28.00 per share if the Qualified
Public Offering is consummated on or before June 30, 2000; (ii) $36.00 per
share if the Qualified Public Offering is consummated between the period of
July 1, 2000 and June 30, 2001; and (iii) $40.00 per share if the Qualified
Public Offering is consummated after June 30, 2001, which amounts shall be
subject to equitable adjustment whenever there shall occur a stock split,
combination, reclassification or other similar event involving the Common
Stock. Holders of shares subject to conversion shall deliver to the Corporation
at its principal office (or such other office or agency as the Corporation may
<PAGE>
designate by notice in writing) during its usual business hours, the
certificate or certificates for shares of Series A Preferred Stock being
converted, and the Corporation shall issue and deliver to such holders
certificates for the number of shares of Common Stock to which such holders are
entitled. Until such time as holders of shares of Series A Preferred Stock
shall surrender those certificates therefor as provided above, such
certificates shall be deemed to represent the shares of Common Stock to which
the holders shall be entitled upon the surrender thereof.
The automatic conversion of the Series A Preferred Stock into shares of
Common Stock as provided above shall be subject in all circumstances to the
closing and consummation of a Qualified Public Offering.
6. No Reissuance of Preferred Stock. No share or shares of Series A
Preferred Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
canceled and retired and restored to the status of undesignated Preferred
Stock. The Corporation may from time to time take such appropriate corporate
action as may be necessary to reduce the authorized number of shares of Series
A Preferred Stock accordingly.
7. Redemption. The shares of Series A Preferred Stock shall be redeemable
as follows:
(a) Optional Redemption by Holders. At the request in writing of any
holder of Series A Preferred Stock (a "Requesting Holder"), in its sole
discretion, made on or after June 30, 2004 (the "Redemption Election Period"),
unless such date is extended as provided below, the Corporation shall, to the
extent it may do so under applicable law, redeem all or any portion of the
shares of Series A Preferred Stock held by the Requesting Holder and all other
holders of Series A Preferred Stock who elect in writing to have their shares
redeemed. Each redemption request shall be irrevocable once made. The
redemption shall occur, and the redemption payment shall be due, ninety (90)
days from the date of the Requesting Holder's notice to the Corporation (the
"Notice Date"). The Corporation is required within five (5) business days of
the Notice Date to mail appropriate written notice, postage prepaid, to each
holder of record of Series A Preferred Stock at its address shown on the
records of the Corporation on the Notice Date, providing each such holder with
notice that such holder may make an election to redeem shares of Series A
Preferred Stock at any time within thirty (30) days of the Notice Date. In the
event that the shares of Series A Preferred Stock may not be redeemed because
of a prohibition under applicable law, such shares shall be redeemed as soon as
such prohibition no longer exists. The redemption price for each share of
Series A Preferred Stock redeemed pursuant to this Section 7(a) (the
"Redemption Price") shall be equal to the Series A Liquidation Amount
(including all accrued and unpaid 12% cumulative dividends compounded annually,
whether or not declared) with the amount of all accrued dividends due thereon
to be calculated and paid through the date payment is actually made to the
holders of Series A Preferred Stock.
In the event that the holders of Series A Preferred Stock do not elect to
have any portion of the Series A Preferred Stock redeemed pursuant to this
Section 7(a), such shares of Series A Preferred Stock shall remain outstanding
and subject to the provisions hereof.
(b) Redemption Notice. If an election is made pursuant to Section 7(a)
hereof, written notice of such election shall be mailed, postage prepaid, to
the Corporation, not later than sixty (60) days before the date fixed for such
<PAGE>
redemption pursuant to Section 7(a) (each date fixed for redemption and the
extended redemption date is hereinafter referred to as a "Redemption Date"). If
such election is made and appropriate notice is given then, at least fifteen
(15) days before the Redemption Date, written notice (hereinafter referred to
as the "Redemption Notice") shall be mailed by the Corporation, postage
prepaid, to each holder of record of Series A Preferred Stock at its address
shown on the records of the Corporation; provided, however, that the
Corporation's failure to give such Redemption Notice shall in no way affect its
obligation to redeem the shares of Series A Preferred Stock or the obligation
of the holders to redeem their shares of Series A Preferred Stock as provided
in Section 7(a) hereof. The Redemption Notice shall contain the following
information:
(i) the number of shares of Series A Preferred Stock held by the
holder, the number of shares of Series A Preferred Stock held by the holder
subject to redemption as of such Redemption Date and the total number of shares
of Series A Preferred Stock held by all holders subject to redemption as of
such Redemption Date; and
(ii) the Redemption Date and the applicable Redemption Price.
(c) Surrender of Certificates. Each holder of shares of Series A
Preferred Stock to be redeemed under this Section 7 shall surrender the
certificate or certificates representing such shares to the Corporation at the
place designated in the Redemption Notice, and thereupon the Redemption Price
for such shares as set forth in this Section 7 shall be paid to the order of
the person whose name appears on such certificate or certificates. Irrespective
of whether the certificates therefor shall have been surrendered, all shares of
Series A Preferred Stock which are the subject of a Redemption Notice shall be
deemed to have been redeemed and shall be canceled effective as of the
Redemption Date, unless the Corporation shall default in the payment of the
applicable Redemption Price.
(d) Redeemed Shares Retired. Any shares of Series A Preferred Stock
redeemed pursuant to this Section 7 shall be canceled and shall not be reissued
under any circumstances; and the Corporation may from time to time take such
appropriate corporate action as may be necessary to reduce accordingly the
number of authorized shares of Series A Preferred Stock.
8. Restrictions and Limitations.
(a) Corporate Action. Except as expressly provided herein or as
required by law, so long as at least a majority of shares of Series A Preferred
Stock remain outstanding, the Corporation shall not, and shall not permit any
subsidiary (which shall mean any corporation, association or other business
entity which the Corporation and/or any of its other subsidiaries directly or
indirectly owns at the time more than fifty percent (50%) of the outstanding
voting shares of such corporation or trust to), without the approval by vote or
written consent by the holders of at least a majority of the then outstanding
shares of Series A Preferred Stock, voting as a separate class:
<PAGE>
(i) redeem, purchase or otherwise acquire for value (or pay
into or set aside for a sinking fund for such purpose), or declare and pay or
set aside funds for the payment of any dividend with respect to, any share or
shares of capital stock other than shares of Series A Preferred Stock in
accordance with their terms, except as required or permitted hereunder and
except for the purchase of shares of Common Stock from former directors,
officers, employees or consultants of the Corporation who acquired such shares
directly from the Corporation, if each such purchase is made pursuant to
contractual rights held by the Corporation relating to the termination of
employment or engagement of such former director, officer, employee or
consultant, as the case may be, and the purchase price does not exceed the fair
market value of such shares as determined by the Board of Directors of the
Corporation;
(ii) authorize or issue, or obligate itself to authorize or issue,
additional shares of Series A Preferred Stock;
(iii) authorize or issue, or obligate itself to authorize or issue,
any equity security senior to or on parity with the Series A Preferred Stock as
to liquidation preferences, redemption rights, dividend rights or voting
rights; or
(iv) amend, restate, modify or alter the by-laws of the Corporation
in any way which adversely affects the rights of the holders of Series A
Preferred Stock.
(b) Amendments to Charter. The Corporation shall not amend its
Certificate of Incorporation without the approval, by vote or written consent,
by the holders of at least two-thirds of the then outstanding shares of Series
A Preferred Stock, voting separately as a class, if such amendment would amend
any of the rights, preferences, privileges of or limitations provided for in
this Section 8 for the benefit of, or amend any other provision of this Section
8 that would materially effect the value of, any shares of Series A Preferred
Stock. Without limiting the generality of the preceding sentence, the
Corporation will not amend its Certificate of Incorporation without the
approval by the holder of at least two-thirds of the then outstanding shares of
Series A Preferred Stock, if such amendment would:
(i) change the relative seniority rights of the holders of Series A
Preferred Stock as to the payment of dividends in relation to the holders of
any other capital stock of the Corporation;
(ii) reduce the amount payable to the holders of Series A Preferred
Stock upon the voluntary or involuntary liquidation, dissolution or winding up
of the Corporation, or change the dividend rights of the holders of Series A
Preferred Stock;
(iii) cancel or modify the conversion rights of the holders of
Series A Preferred Stock provided for in Section 5 herein; or
(iv) cancel or modify the rights of the holders of Series A
Preferred Stock provided for in this Section 8.
<PAGE>
9. No Dilution or Impairment. The Corporation (a) will not increase the
par value of any shares of stock receivable on the conversion of the Series A
Preferred Stock above the amount payable therefor on such conversion, (b) will
take all such action as may be necessary or appropriate in order that the
Corporation may validly and legally issue fully paid and non-assessable shares
of stock on the conversion of all shares of Series A Preferred Stock from time
to time outstanding, or (c) will not consolidate with or merge into any other
person or permit any such person to consolidate with or merge into the
Corporation (if the Corporation is not the surviving person), unless such other
person shall expressly assume in writing and will be bound by all of the terms
of the Series A Preferred Stock set forth herein.
10. Notices of Record Date. In the event of
(a) any taking by the Corporation of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger of the Corporation, or any transfer of all or substantially all of
the assets of the Corporation to any other corporation, or any other entity or
person, or
(c) any voluntary or involuntary dissolution, liquidation or winding
up of the Corporation,
then and in each such event the Corporation shall mail or cause to be mailed to
each holder of Series A Preferred Stock a notice specifying (i) the date on
which any such record is to be taken for the purpose of such dividend,
distribution or right and a description of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
transfer, merger, dissolution, liquidation or winding up is expected to become
effective, and (iii) the time, if any, that is to be fixed, as to when the
holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, merger, dissolution, liquidation or winding up.
Such notice shall be mailed at least ten (10) days' prior to the date specified
in such notice on which such action is to be taken.
EXHIBIT 5
BINGHAM DANA LLP
150 Federal Street
Boston, MA 02110
(617) 951-8000
October 1, 1999
LeCroy Corporation
700 Chestnut Ridge Road
Chestnut Ridge, New York 10977
Ladies and Gentlemen:
We have acted as counsel for LeCroy Corporation, a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act
of 1933, as amended, of 750,000 shares of the Company's Common Stock, par value
$.01 per share (the "Shares"), pursuant to a Registration Statement on Form S-3
(the "Registration Statement"), filed with the Securities and Exchange
Commission on October 1, 1999, 500,000 of which Shares will be issued to
certain investors (the "Investors") pursuant to the terms of the Company's
Certificate of Designation of the Series A Convertible Redeemable Preferred
Stock, dated as of June 29, 1999, and up to 250,000 of which Shares will be
issued pursuant to the exercise of several Common Stock Purchase Warrants of
the Company in favor of the Investors, dated as of June 30, 1999 (the
"Warrants").
As such counsel, we have reviewed the corporate proceedings of the Company
with respect to the authorization of the issuance of the Shares. We have also
examined and relied upon originals or copies of such corporate records,
instruments, agreements or other documents of the Company, and certificates of
officers of the Company as to certain factual matters, and have made such
investigation of law and have discussed with officers and representatives of
the Company such questions of fact, as we have deemed necessary or appropriate
to enable us to express the opinions rendered hereby.
In our examination, we have assumed the genuineness of all signatures, the
conformity to originals of all documents reviewed by us as copies, the
authenticity and completeness of all original documents reviewed by us in
original or copy form and the legal competence of each individual executing a
document.
We have also assumed that the Shares will be issued and delivered in
accordance with the terms of the Company's Certificate of Incorporation and the
Warrants, as the case may be. As to all matters of fact, we have relied
entirely upon the determinations, representations and statements of the
Company; and we have assumed, without independent inquiry, the accuracy of all
such determinations, representations and statements.
<PAGE>
This opinion is limited solely to the Delaware General Corporation Law as
applied by courts located in Delaware.
Based upon and subject to the foregoing, we are of the opinion that upon
issuance in accordance with the terms of the Company's Certificate of
Incorporation or of the Warrants, as the case may be, the Shares will be
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Certain Legal Matters" in the Prospectus included in the Registration
Statement.
Very truly yours,
/s/ Bingham Dana LLP
BINGHAM DANA LLP
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of LeCroy Corporation
for the registration of 750,000 shares of its common stock and to the
incorporation by reference therein of our report dated August 2, 1999, except
for the last sentence of the second paragraph of Note 6, as to which the date
is September 7, 1999, with respect to the consolidated financial statements and
schedule of LeCroy Corporation included in its Annual Report (Form 10-K) for
the year ended June 30, 1999, filed with the Securities and Exchange
Commission.
Hackensack, New Jersey /s/ Ernst & Young LLP
September 27, 1999
ERNST & YOUNG LLP
