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EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
DATED JUNE 29, 2000
BETWEEN
COMPUTER MOTION
AND
THE INVESTORS LISTED ON
SCHEDULE A HERETO
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COMPUTER MOTION
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 29
day of June, 2000, by and between Computer Motion, Inc., a Delaware corporation
(the "Company"), and the persons or entities listed on Schedule A attached
hereto (individually, an "Investor" and collectively, the "Investors").
WHEREAS, the Company and Investors wish to enter into this Agreement to
set forth the terms of Investors' purchase of Common Stock from the Company.
NOW THEREFORE, BE IT RESOLVED, that the parties hereto, intending to be
legally bound, hereby agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK.
1.1 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, each Investor agrees to purchase, and the Company
agrees to sell and issue to each Investor, at the Closing, that number of shares
of the Company's Common Stock set forth opposite such Investor's name on
Schedule A (the "Shares") for the purchase price set forth thereon, which shall
equal the average of the high and low prices for the Company's Common Stock
reported on the Nasdaq National Market of the five business days prior to the
date of this agreement.
1.2 CLOSING.
(a) Subject to the satisfaction or waiver of the conditions set
forth in Sections 4 and 5 hereof, the purchase and sale of the Shares to the
Investors shall take place at 10:00 a.m., on June 30, 2000, or at such other
time as the Company and Investors mutually agree upon, either orally or in
writing (which time and place is designated as the "Closing").
(b) Subject to the terms of this Agreement, at the Closing, the
Company shall deliver to each Investor a certificate representing that number of
Shares set forth opposite such Investor's name on Schedule A, against payment of
the purchase price therefor by check, wire transfer, the cancellation of
indebtedness, or any combination thereof, or such form of payment as shall be
mutually agreed upon by each Investor and the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as disclosed in the Schedules attached hereto by reference to the
specific Section or Sections hereof to which the disclosure pertains, the
Company represents and warrants to the Investors as follows:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own and operate its properties and assets and to carry on its business as
presently conducted. The Company is duly qualified and authorized to transact
business and is in good standing as a foreign corporation in each jurisdiction
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where the nature of its activities and of its properties makes such
qualification necessary, except where failure to so qualify would not have a
material adverse effect upon the Company.
2.2 CAPITALIZATION. The authorized capital stock of the Company
consists of 25,000,000 shares of Common Stock, $.001 par value, and 5,000,000
shares of Preferred Stock, $.001 par value. As of May 11, 2000, there were
issued and outstanding 8,731,345 shares of Common Stock and no shares of
Preferred Stock. Immediately following the Closing all issued and outstanding
shares of the Company's capital stock will have been duly authorized, validly
issued, fully paid and non-assessable and issued in compliance with federal and
state securities laws. The Company has reserved (a) an aggregate of 1,308,894
shares of Common Stock for issuance upon the exercise of certain other warrants
at an exercise price ranging from $4.57 to $7.71 per share (the "Warrants") and
(b) an aggregate of 3,493,361 shares of Common Stock for issuance pursuant to
the Company's Incentive Stock Option, Nonqualified Stock Option and Restricted
Stock Purchase Plans, of which 1,842,349 shares are subject to currently
outstanding options. Except as set forth in the immediately preceding sentence,
none of the Common Stock is subject to any preemptive or subscription right, any
voting trust agreement or other contract, agreement, arrangement, option,
warrant, call, commitment or other right of any character obligating or
entitling the Company to issue, sell, redeem or repurchase any of its
securities, and there is no outstanding security of any kind convertible into or
exercisable or exchangeable for Common Stock. Except as set forth on Schedule
2.2 attached hereto, there are no agreements or arrangements pursuant to which
the Company is or could be required to register shares of the Company's capital
stock or other securities under the Securities Act of 1933, as amended (the
"Securities Act"), or other agreements or arrangements (including voting
agreements) with or, to the knowledge of the Company, among any security holders
of the Company with respect to any securities of the Company.
2.3 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the performance of the Company's
obligations hereunder and the authorization, issuance, sale and delivery of the
Shares has been taken or will be taken prior to the Closing. This Agreement when
executed and delivered by the Company, shall constitute a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (b) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies, or (c) to the extent the indemnification provisions in Section 6.6
below may be limited by applicable federal or state securities law.
2.4 VALID ISSUANCE OF THE SHARES; COMPLIANCE WITH SECURITIES LAWS.
When issued, sold and delivered in compliance with the provisions of this
Agreement and the Company's certificate of incorporation, the Shares will be
duly and validly issued, fully paid and nonassessable and will be free of any
liens, encumbrances, and restrictions on transfer other than restrictions on
transfer under this Agreement and applicable state and federal securities laws.
Assuming the accuracy of the representations and warranties of the Investors set
forth in this Agreement, the offer, sale and issuance of the Shares as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act, and have been registered or qualified (or are exempt from
registration or qualification) under the registration, permit, or qualification
requirements under all applicable state securities laws.
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2.5 GOVERNMENTAL CONSENTS. All consents, approvals, orders, or
authorizations of, or registrations, qualifications, designations, declarations,
or filings with, any governmental authority, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Shares, or the consummation of any other
transaction contemplated hereby have been obtained, or will be effective at the
Closing, except for notices required or permitted to be filed with certain state
and federal securities commissions after the Closing, which notices will be
filed by the Company on a timely basis.
2.6 SEC FILINGS. The Company has filed with the Securities and
Exchange Commission (the "SEC") all reports, schedules, forms, statements and
other documents required pursuant to the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), since August 11, 1997
(collectively, and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the "SEC Documents"). As of their
respective dates, the SEC Documents complied as to form in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such SEC Documents. As of their respective dates, (i) none of the SEC
Documents (including any and all financial statements included therein) filed
pursuant to the Securities Act or any rule or regulation thereunder 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 not misleading, and (ii) none of the SEC Documents (including any and
all financial statements included therein) filed pursuant to the Exchange Act or
any rule or regulation thereunder 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 the light of the
circumstances under which they were made, not misleading. Except to the extent
that information contained in any SEC Document has been revised or superseded by
a later filed SEC Document, none of the SEC Documents (including any and all
financial statements included therein) contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in all SEC Documents filed since
August 11, 1997 (the "SEC Financial Statements") comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case of
unaudited consolidated quarterly statements, as permitted by Form 10-Q of the
SEC), applied on a consistent basis during the periods involved (except as may
be indicated in the notes thereto). The SEC Financial Statements fairly present
the consolidated financial position of the Company as of the dates thereof and
the consolidated results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited quarterly statements, to normal
recurring audit adjustments). The Company does not have any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by generally accepted accounting principles to be recognized or
disclosed on a consolidated balance sheet of the Company or in the notes
thereto, except (i) liabilities reflected in the consolidated unaudited balance
sheet of the Company as of December 31, 1999 or the notes thereto (subject to
ordinary year-end adjustments), (ii) liabilities disclosed in any SEC Documents
filed by the Company prior to the date of this Agreement with respect to any
period ending, or date occurring, after December 31, 1999, and (iii) liabilities
incurred since December 31, 1999 in the ordinary course of business consistent
with past practice.
2.7 FULL DISCLOSURE. The Company has provided Investors with all the
information that Investors have requested for deciding whether to purchase the
Shares. Neither this
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Agreement nor the representations and warranties contained herein, nor any other
written statements or certificates made or delivered in connection herewith,
when read together, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements herein or therein not
misleading.
2.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in SEC
documents, since December 31, 1999, the Company has conducted its business only
in the ordinary course consistent with past practice, and there is not and has
not been: (i) since December 31, 1999, any condition, event or occurrence which
has had a material adverse effect on the business, properties, financial
condition or results of operations of the Company (a "Material Adverse Effect");
(ii) since December 31, 1999, any condition, event or occurrence which as of the
date of this Agreement, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect with respect to the Company; or (iii)
since December 31, 1999, any condition, event or occurrence which, individually
or in the aggregate, could reasonably be expected to prevent or materially delay
the ability of the Company to consummate the transactions contemplated by this
Agreement or perform its obligations hereunder.
2.9 LITIGATION. Except as disclosed in SEC documents, there is (a) no
suit, action, arbitration or proceeding pending, and (b) to the knowledge of the
Company, no suit, action, arbitration or proceeding threatened against or
investigation pending with respect to the Company that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect with
respect to the Company or prevent or materially delay the ability of the Company
to consummate the transactions contemplated by this Agreement or to perform its
obligations hereunder, nor is there any judgment, decree, citation, injunction,
rule or order of any court or administrative or governmental body or agency (a
"Governmental Entity") or arbitrator outstanding against the Company which,
individually or in the aggregate, has or could reasonably be expected to have,
any such effect.
2.10 NO CONFLICTS OR DEFAULTS. The execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
hereby do not and will not (a) contravene the certificate of incorporation or
by-laws of the Company or (b) with or without the giving of notice or the
passage of time, (i) violate, conflict with, or result in a breach of, or a
default or loss of rights under, any material covenant, agreement, mortgage,
indenture, lease, instrument, permit or license to which the Company is a party
or by which the Company or any of its assets is bound, or any judgment, order or
decree, or any law, rule or regulation to which the Company or any of its assets
is subject, or (ii) result in the creation of, or give any party the right to
create, any lien, charge, security interest, encumbrance or any other right or
adverse interest upon any of the capital stock or assets of the Company.
2.11 COMPLIANCE WITH LAWS. The Company holds all permits, licenses,
variances, exemptions, orders and approvals of all Governmental entities which
are material to the operation of the businesses of the Company (the "Company
Permits"). The Company is in compliance with the terms of the Company Permits,
except where the failure so to comply, individually or in the aggregate, would
not have a Material Adverse Effect with respect to the Company. The businesses
of the Company are not being conducted in violation of any law (domestic or
foreign), ordinance or regulation of any Governmental Entity, except for
possible violations which, individually or in the aggregate, do not and could
not reasonably be expected to have a Material Adverse Effect with respect to the
Company.
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3. REPRESENTATIONS AND WARRANTIES OF INVESTORS.
Each Investor, severally and not jointly, hereby represents and warrants
to the Company as follows:
3.1 LEGAL POWER. Investor has the power and authority to enter into
this Agreement, to purchase the Shares hereunder and to carry out and perform
its obligations under the terms of this Agreement.
3.2 DUE EXECUTION. This Agreement has been duly authorized, executed
and delivered by Investor, and, upon due execution and delivery by the Company,
this Agreement will be a valid and binding obligation of Investor, enforceable
in accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, (b) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, or (c) to the extent the indemnification provisions in
Section 6.6 below may be limited by applicable federal or state securities law.
3.3 INFORMATION. Investor believes that it, or its representatives,
have received all information Investor considers necessary for evaluating the
risks and merits of acquiring the Shares. Investor further represents that
Investor has had the opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the Shares and the business,
properties, prospects and financial condition of the Company. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 2 of this Agreement or the right of Investor to rely thereon.
3.4 INVESTMENT REPRESENTATIONS.
(a) Investor is acquiring the Shares for its own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act .
(b) Investor understands that (i) the Shares have not been
registered under the Securities Act by reason of a specific exemption therefrom,
that the securities are "restricted securities" and the Investor must hold the
Shares indefinitely, and that it must, therefore, bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration; (ii) each
certificate representing the Shares will be endorsed with the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "1933 ACT") AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT COVERING SUCH
SECURITIES OR IF THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933
ACT."
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and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied; provided, however, that no such opinion of counsel shall
be necessary if the sale, transfer or assignment is made pursuant to SEC Rule
144 and the Investor provides the Company with evidence reasonably satisfactory
to the Company and its counsel that the proposed transaction satisfies the
requirements of Rule 144. The Company agrees to remove the foregoing legend from
any securities if the requirements of SEC Rule 144(k) (or any successor rule or
regulation) apply with respect to such securities and the Company and its
counsel are provided with reasonably satisfactory evidence that the requirements
of Rule 144(k) apply.
(c) Investor has not been offered the Shares by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by such media.
(d) Investor acknowledges that it is able to fend for itself, can
bear the economic risk of its investment and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of acquisition of the Shares and of making an informed investment
decision with respect thereto.
(e) Investor's principal place of business or address is as set
forth on the signature page hereto, and, if it is an individual, it does not
reside in any state of the United States other than the state, if any, specified
in its address on the signature page.
(f) Investor acknowledges that an investment in the Shares is
speculative and involves a high degree of risk of loss of all or part of
Investor's investment therein.
(g) Investor is an "accredited investor" within the meaning of
SEC Rule 501(a) of Regulation D of the Securities Act of 1933, as presently in
effect (the "Securities Act").
(h) Investor understands that the foregoing representations and
warranties are to be relied upon by the Company as a basis for exemption of the
sale of the Shares under the Securities Act, under the securities laws of all
applicable states and for other purposes. In the event any of such
representations and warranties become inaccurate or untrue prior to the Closing,
the Investor will promptly notify the Company.
(i) Investor was not formed for the specific purpose of acquiring
the Shares.
3.5 FURTHER REPRESENTATIONS BY FOREIGN INVESTORS. If Investor is not
a U.S. person or entity such Investor hereby represents that it is satisfied as
to the full observance of the laws of such Investor's jurisdiction in connection
with the purchase of the Shares or any use of this Agreement, including (i) the
legal requirements with such Investor's jurisdiction for the purchase of the
Shares, (ii) any foreign exchange restrictions applicable to such purchase,
(iii) any governmental or other consents that may need to be obtained, and (iv)
the income tax and other tax consequences, if any, which may be relevant to the
purchase, holding, redemption, sale, or transfer of the Shares.
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Such Investor's purchase of and payment for, and such Investor's continued
beneficial ownership of, the Shares will not violate any applicable securities
or other laws of such Investor's jurisdiction.
4. CONDITIONS OF THE INVESTORS' OBLIGATIONS AT CLOSING.
The obligations of Investors under subsection 1.1 of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against Investors unless
consented to by Investors in writing thereto:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of the Closing, except those representations and
warranties qualified by materiality, which shall be true and correct in all
respects, with the same force and effect as though such representations and
warranties had been made on and as of the Closing.
4.2 PERFORMANCE OF OBLIGATIONS. The Company shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained herein that are required to be performed or complied with
by it on or prior to the Closing.
4.3 COMPLIANCE CERTIFICATE. The Company shall deliver to Investors at
the Closing a Certificate, executed by the President of the Company, certifying
that the conditions specified in subsections 4.1 and 4.2 have been fulfilled.
4.4 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States, of
any state or any foreign country that are required in connection with the lawful
sale and issuance of the Shares pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing. No stop order or other
order enjoining the sale of the Shares shall have been issued and no proceedings
for such purpose shall be pending or, to the knowledge of the Company,
threatened by the SEC, the California Commissioner of Corporations, or any
commissioner of corporations or similar officer of any other state or foreign
country having jurisdiction over this transaction. At the time of the Closing,
the sale and issuance of the Shares shall be legally permitted by all laws and
regulations to which Investor and the Company are subject.
4.5 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
and instruments incident thereto shall be reasonably satisfactory in form and
substance to Investor, which shall have received all such counterpart original
and certified or other copies of such documents as it may reasonably request.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.
The obligations of the Company to Investors under this Agreement are
subject to the fulfillment, on or before the Closing, of each of the following
conditions by Investor:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Investors contained in Section 3 hereof shall be true and correct
in all material respects on and as of the Closing, except those representations
and warranties qualified by materiality, which shall be true
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and correct in all respects, with the same force and effect as though such
representations and warranties had been made on and as of the Closing.
5.2 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States, of
any state or any foreign country that are required in connection with the lawful
sale and issuance of the Shares pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing. No stop order or other
order enjoining the sale of the Shares shall have been issued and no proceedings
for such purpose shall be pending or, to the knowledge of the Company,
threatened by the SEC, the California Commissioner of Corporations, or any
commissioner of corporations or similar officer of any other state or foreign
country having jurisdiction over this transaction. At the time of the Closing,
the sale and issuance of the Shares shall be legally permitted by all laws and
regulations to which Investor and the Company are subject.
5.3 PERFORMANCE. All covenants, agreements and conditions contained
in this Agreement to be performed by Investors on or prior to the Closing shall
have been performed or complied with in all material respects.
6. REGISTRATION OF SHARES.
The Company hereby grants to each of the Investors the registration
rights set forth in this Section 6 with respect to the Registrable Securities
(as hereinafter defined) owned by such Investors. The Company and the Investors
agree that the registration rights provided herein set forth the sole and entire
agreement on the subject matter between the Company and the Investors.
6.1 DEFINITIONS.
(a) The terms "register," "registered," and "registration" refer
to a registration effected by filing with SEC a registration statement (the
"Registration Statement") in compliance with the Securities Act and applicable
rules and regulations thereunder, and the declaration or ordering by the SEC of
the effectiveness of such Registration Statement.
(b) The term "Registrable Shares" means the Shares issued to the
Investors pursuant to this Agreement and any Common Stock of the Company issued
as (or issuable upon the conversion or exercise of any warrant, right, or other
security that is issued as) a dividend or other distribution with respect to, or
in exchange or in replacement of, such Registrable Shares. In the event of any
recapitalization by the Company, whether by stock split, reverse stock split,
stock dividend or the like, the number of shares of Registrable Shares used
throughout this Agreement for various purposes shall be proportionately
increased or decreased, provided, however, that any such security shall cease to
be a Registrable Share at such time as it is publicly saleable without
restriction, pursuant to Rule 144(k) of the Securities Act, or otherwise.
(c) The term "Initiating Investors" means any Investor or
Investors of not less than fifty percent (50%) of the Registrable Shares held by
all of the Investors then outstanding and not registered pursuant to paragraph
6.3 of this Agreement.
6.2 "PIGGY BACK" REGISTRATION. If at any time the Company shall
determine to register under the Securities Act (including pursuant to a demand
of any stockholder of the Company exercising registration rights other than
pursuant to Section 6.3 hereof) any of its Common Stock
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(other than a registration relating solely to the sale of securities to
participants in a Company employee benefits plan, a registration on any form
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of Registrable
Shares or a registration in which the only Common Stock being registered is
common stock issuable upon conversion of debt securities which are also being
registered), it shall send to each Investor written notice of such determination
and, if within fifteen (15) days after receipt of such notice, such Investor
shall so request in writing, the Company shall use its commercially reasonable
best efforts to include in such registration statement all or any part of the
Registrable Shares that such Investor requests to be registered. If such
registration involves an underwritten public offering and the total amount of
securities, including Registrable Shares, requested by stockholders to be
included in such offering exceeds the amount of securities that the managing
underwriter determines in its sole discretion is compatible with the success of
the offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Shares, which the managing
underwriter determines in its sole discretion will not jeopardize the success of
the offering (the securities so included to be apportioned in the following
order of priority (A) first, to the Company, (B) second, among the Investors,
and (C) third, to the extent additional securities may be included therein, pro
rata among the other selling stockholders according to the total amount of
securities owned by each such stockholder). For purposes of the preceding
parenthetical concerning apportionment, for any selling stockholder which is a
holder of Registrable Shares and which is a partnership or corporation, the
partners, retired partners and stockholders of such holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "selling
stockholder", and any pro-rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence. If any Investor disapproves
of the terms of such underwriting, he may elect to withdraw therefrom by written
notice to the Company and the underwriter. No incidental right under this
Section 6.2 shall be construed to limit any registration required under Section
6.3.
6.3 DEMAND REGISTRATION. If the Company shall receive from the
Initiating Investors a written demand (a "Demand Registration") that the Company
effect any registration under the Securities Act with respect to all or a part
of the Registrable Shares held by the Initiating Investors the Company will (i)
as soon as reasonably practicable, give written notice of such request to all
Investors; (ii) use its best efforts to effect such registration as soon as
practicable and as will permit or facilitate the sale and distribution of all or
such portion of the Initiating Investors' Registrable Shares as are specified in
such demand (including any Registrable Shares which are held by Investors, which
such Investors request to include in such registration within twenty (20) days
after the receipt of the notice given pursuant to (i) above), and (iii) use its
best efforts to cause such registration to remain effective until the earlier to
occur of the date (A) the Registrable Shares covered thereby have been sold, or
(B) the Investors are able to use Rule 144 of the Securities Act to sell the
Shares without restriction, provided that the Company shall not be obligated to
take any action to effect any such registration, pursuant to this Section 6.3:
(a) At any time prior to three (3) months following the Closing;
(b) After the Company has effected one registration pursuant to
this Section 6.3; or
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(c) If the Company shall furnish to the Initiating Investors a
certificate signed by the President of the Company, stating that in the good
faith judgment of the Board of Directors of the Company it would be seriously
detrimental to the Company and its shareholders for such Registration Statement
to be filed at the date filing would be required, in which case the Company
shall have an additional period of not more than 180 days within which to file
such Registration Statement.
6.4 REGISTRATION PROCEDURES. When the Company effects the
registration of the Registrable Shares under the Securities Act pursuant to
Section 6.3 hereof, the Company will, at its expense, as expeditiously and as
reasonably possible, use its reasonable best efforts, to:
(a) In accordance with the Securities Act and the rules and
regulations of the SEC, prepare and file with the SEC a Registration Statement
with respect to such securities and use its best efforts to cause such
Registration Statement to become and remain effective for the period described
in Section 6.3, and prepare and file with the SEC such amendments to such
Registration Statement and supplements to the prospectus contained therein as
may be necessary to keep such Registration Statement effective for such period
and such Registration Statement and prospectus accurate and complete for such
period;
(b) Furnish to Investors such reasonable number of copies of the
Registration Statement, preliminary prospectus, final prospectus and such other
documents as Investor may reasonably request in order to facilitate the public
offering of such securities;
(c) Use its best efforts to register or qualify the securities
covered by such Registration Statement under such state securities or blue sky
laws of such jurisdictions as Investor may reasonably request within twenty (20)
days following the original filing of such Registration Statement, except that
the Company shall not for any purpose be required to execute a general consent
to service of process or to qualify to do business as a foreign corporation in
any jurisdiction where it is not so qualified;
(d) Notify Investors, promptly after it shall receive notice
thereof, of the date and time when such Registration Statement and each
post-effective amendment thereto has become effective or a supplement to any
prospectus forming a part of such Registration Statement has been filed;
(e) Notify Investors promptly of any request by the SEC for the
amending or supplementing of such Registration Statement or prospectus or for
additional information;
(f) Notify Investors promptly if, at the time when a prospectus
relating to such securities is required to be delivered under the Securities
Act, any event has occurred as the result of which any such prospectus or any
other prospectus as then in effect would include an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and prepare and
promptly file with the SEC, and promptly notify Investors of the filing of, such
amendments or supplements to such Registration Statement or prospectus as may be
necessary to correct such statements or omissions;
(g) In case any Investor is required to deliver a prospectus at a
time when the prospectus then in circulation is not in compliance with the
Securities Act or the rules and
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regulations of the SEC, prepare promptly upon request such amendments or
supplements to such Registration Statement and such prospectus as may be
necessary in order for such prospectus to comply with the requirements of the
Securities Act and such rules and regulations;
(h) Advise Investors, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such Registration Statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued; and
(i) Cause all such securities to be listed on each securities
exchange on which similar securities issued by the Company are then listed,
provided that the applicable listing requirements are satisfied.
6.5 EXPENSES. With respect to any registration effected pursuant to
Section 6.2 or 6.3 hereof, the Company agrees to bear all fees, costs and
expenses of and incidental to such registration and the public offering in
connection therewith, provided however, that Investors shall bear all
underwriting discounts and commissions, state transfer taxes and brokerage
commissions. The fees, costs and expenses of registration to be borne by the
Company as provided in this Section 6.5 shall include, without limitation, all
registration, filing and NASD fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, and all legal fees and disbursements
and other expenses of complying with state securities or blue sky laws of any
jurisdictions in which the securities to be offered are to be registered or
qualified.
6.6 INDEMNIFICATION.
(a) The Company will, and does hereby undertake to, indemnify and
hold harmless each Investor, each of such Investor's officers, directors,
partners and agents, and each person controlling such Investor, with respect to
any registration, qualification, or compliance effected pursuant to this Section
6, and each underwriter, if any, and each person who controls within the meaning
of Section 15 of the Securities Act any underwriter, of the Registrable Shares
held by or issuable to such Investor, against all claims, losses, damages, and
liabilities (or actions in respect thereto) to which they may become subject
under the Securities Act, the Exchange Act, or other federal or state law
arising out of or based on (i) any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular, or
other similar document (including any related Registration Statement,
notification, or the like) incident to any such registration, qualification, or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any violation or alleged violation by the
Company of any federal, state or common law rule or regulation applicable to the
Company in connection with any such registration, qualification, or compliance,
and will reimburse, as incurred, each Investor, each underwriter, and each
director, officer, partner, agent and controlling person, for any legal and any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability, or action; provided that the Company
will not be liable in any such case to the extent that any such claim, loss,
damage, liability or expense, arises out of or is based on any untrue statement
or omission based upon written information furnished to the Company by an
instrument duly executed by any of the Investors or underwriter and stated to be
specifically for use therein.
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(b) Each Investor will, if Registrable Securities held by or
issuable to such Investor are included in such registration, qualification, or
compliance, severally and not jointly, indemnify the Company, each of its
directors, officers, legal counsel and accountants and each underwriter, if any,
of the Company's securities covered by such Registration Statement, each person
controlling the Company or such underwriter, within the meaning of Section 15 of
the Securities Act, against all claims, losses, damages, and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such Registration
Statement, prospectus, offering circular, or other document, or any 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,
as incurred, the Company, and each such underwriter or other person, for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability, or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) was made in such
Registration Statement, prospectus, offering circular, or other document, in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Investor and stated to be
specifically for use therein; provided, however, that the liability of each such
Investor hereunder shall be limited to the gross proceeds received by such
Investor from the sale of securities under such Registration Statement. In no
event will any Investor be required to enter into any agreement or undertaking
in connection with any registration under this Section 6 providing for any
indemnification or contribution obligations on the part of such Investor greater
than such Investor's obligations under this Section 6.
(c) Promptly after receipt by a party indemnified pursuant to the
provisions of paragraph (a) or (b) of this Section 6.6 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party shall, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of such Sections
6.6(a) or 6.6(b), notify the indemnifying party of the commencement thereof;
provided, however, that the failure to so notify the indemnifying party shall
not relieve the indemnifying party from any liability which it may have to the
indemnified party otherwise than hereunder unless the failure to give such
notice is materially prejudicial to the idemnifying party's ability to defend
such action. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and to the extent that it may
wish, jointly assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election to so assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party pursuant to the
provisions of Section 6.6(a) or 6.6(b) for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation (except if representation
of such indemnified party by counsel to the indemnifying party would be
inappropriate due to actual or potential conflicting interests between the
indemnified party and any other party represented by such counsel). No
indemnifying party shall be liable to an indemnified party for any settlement of
any action or claim without the consent of the indemnifying party.
6.7 REPORTING REQUIREMENTS UNDER THE EXCHANGE ACT. The Company shall
timely file such information, documents and reports as the SEC may require or
prescribe under Section 13 or 15(d) of the Exchange Act. The Company
acknowledges and agrees that the purposes of the requirements contained in this
Section 6.7 are to enable Investors to comply with the current public
information requirement contained in paragraph (c) of Rule 144 should any
Investor ever wish
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to dispose of any of the Registrable Shares without registration under the
Securities Act in reliance upon Rule 144 (or any other similar exemptive
provision).
6.8 INVESTOR INFORMATION. The Company may require Investors to
furnish the Company such information with respect to Investors and the
distribution of the Registrable Shares as the Company may from time to time
reasonably request in writing as shall be required by law or by the SEC in
connection therewith.
6.9 TRANSFER OF REGISTRATION RIGHTS. The registration rights of the
Investors under this Agreement may be transferred (i) in the case of an
individual, to any member of the immediate family of such individual or to any
trust for the benefit of the individual or any such family member or members,
(ii) to any partner or affiliate of such Investor, (iii) to any transferee
provided (1) that the transferee receives the lesser of (A) at least __________
Registrable Shares (as constituted on the date hereof) or (B) all of the
Registrable Shares held by such Investor; (2) the transferee is bound by the
terms of this Agreement; and (3) the Company is given written notice prior to
such transfer. Notwithstanding the foregoing, the registration rights of
Investors under this Agreement may not be transferred to an entity, or a person
controlled by, under common control with or controlling such entity, which is a
direct competitor of the Company.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Agreement, the Schedules hereto, and the
documents referred to herein constitute the full and entire understanding and
agreement between the parties and no party shall be liable or bound to any to
any other party in any manner by any warranties, representations or covenants
except as specifically set forth herein or therein.
7.2 SURVIVAL OF WARRANTIES. Unless otherwise set forth in this
Agreement, the warranties, representations and agreements of the Company and
Investors contained herein shall survive the execution and delivery of this
Agreement and the Closing and shall in no way be affected by any investigation
of the subject matter thereof made by or on behalf of Investors or the Company.
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including permitted transferees of any Shares sold hereunder). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
7.4 GOVERNING LAW; JURISDICTION AND VENUE; ATTORNEY'S FEES. This
Agreement and all acts and transactions pursuant hereto and the rights and
obligations of the parties hereto shall be governed by and construed under the
laws of the State of California without reference to principles of conflicts of
laws. The parties hereby consent and agree that the United States District for
the Central District of California or the California Superior Court for Santa
▇▇▇▇▇▇▇ County will have exclusive jurisdiction over any legal action or
proceeding arising out of or relating to this Agreement, and each party consents
to the in personam jurisdiction of such courts for the purpose of any such
action or proceeding and agrees that venue is proper in such courts. If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be
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entitled to reasonable attorney's and expert witness fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
7.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
7.6 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.7 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery, delivery by nationally recognized
overnight courier or five days after deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed to the party to
be notified at the address indicated for such party on the signature page
hereto, or at such address as such party may designate by ten days advance
written notice to the other party.
7.8 FINDERS' FEES. Each Investor agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finders' fee to any broker or other person or firm (and the
costs and expenses of defending against such liability or asserted liability)
for which such Investor or any of its officers, partners, employees or
representatives is responsible. The Company agrees to indemnify and hold
harmless Investors from any liability for any commission or compensation in the
nature of a finders' fee to any broker or other person or firm (and the costs
and expenses of defending against such liability or asserted liability) for
which the Company or any of its officers, employees or representatives is
responsible.
7.9 EXPENSES. Irrespective of whether the Closing is effected, the
Company and each Investor shall each pay all costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of this
Agreement.
7.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors
holding a majority of the Shares purchased hereunder. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon all the
Investors and the securities purchased under this Agreement at the time
outstanding (including securities into which such securities have been
converted), each future holder of all such securities and the Company.
7.11 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and the balance of the Agreement shall be
enforceable in accordance with its terms.
7.12 INFORMATION CONFIDENTIAL. Each Investor acknowledges that the
information received by it pursuant hereto is confidential and for such
Investor's use only, and it will refrain from using such information or
reproducing, disclosing, or disseminating such information to any other person
(other than its employees, affiliates, agents, or partners having a need to know
the contents of such information and its attorneys), except in connection with
the exercise of rights under this Agreement, unless the Company has made such
information available to the public generally or it is required by a
governmental body to disclose such information.
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
Address: COMPUTER MOTION, INC.
▇▇▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chief Financial Officer and Secretary
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Address: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:
-------------------------------- ---------------------------------
--------------------------------
Address: BLAZON PROFIT SHARING PLAN
By:
-------------------------------- ---------------------------------
--------------------------------
Address: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
-------------------------------- ---------------------------------
--------------------------------
Address: ▇▇▇▇ ▇▇▇▇▇
By:
-------------------------------- ---------------------------------
--------------------------------
Address: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
-------------------------------- ---------------------------------
--------------------------------
Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:
-------------------------------- ---------------------------------
--------------------------------
Address: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By:
-------------------------------- ---------------------------------
--------------------------------
Address: ▇.▇. ▇▇▇▇▇▇▇
By:
-------------------------------- ---------------------------------
--------------------------------
Address: PEI ▇▇▇ ▇▇▇▇▇
By:
-------------------------------- ---------------------------------
--------------------------------
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SCHEDULE A
TOTAL
NO. OF SHARES OF PRICE PER PURCHASE
PURCHASER COMMON STOCK SHARE PRICE
---------------- --------- --------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 260,790 $7.669 $1,999,998.51
Blazon Profit Sharing Plan 195,593 $7.669 $1,500,002.72
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 75,778 $7.669 $ 581,141.48
▇▇▇▇ ▇▇▇▇▇ 5,067 $7.669 $ 38,858.82
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 6,520 $7.669 $ 50,001.88
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 6,520 $7.669 $ 50,001.88
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 40,000 $7.669 $ 306,760.00
▇.▇. ▇▇▇▇▇▇▇ 1,363 $7.669 $ 10,452.85
Pei ▇▇▇ ▇▇▇▇▇ 3,260 $7.669 $ 25,000.94
TOTAL SHARES PURCHASED AT CLOSING 594,891 $7.669 $4,562,219.08