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FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
- ----- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934)
For the transition period from to
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Commission File Number 1-14160
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HelpMate Robotics Inc.
(Exact name of small business issuer as
specified in its charter)
Connecticut 06-1110906
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Shelter Rock Lane; Danbury, Connecticut; 06810
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(Address of principal executive offices)
(203) 798-8988
--------------
(Issuer's telephone number)
----------------------------------------------------
(Former name, former address and formal fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING
DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the registrant's common stock as of
April 30, 1997 is 6,294,031 shares.
Transitional Small Business Disclosure Format (Check One) Yes No X
----- -----
1
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PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
HelpMate Robotics Inc.
Balance Sheet (Unaudited)
March 31, 1997
ASSETS
Current assets:
Cash....................................................... $513,802
Accounts receivable, net of allowance for doubtful
accounts of $40,000....................................... 637,085
Inventory, net of reserve for obsolescence of $50,000...... 1,478,632
Other...................................................... 78,626
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Total current assets........................................ 2,708,145
Installation costs, net of accumulated amortization of
$577,219.................................................. 284,556
Equipment leased to others, net of accumulated depreciation
of $747,491............................................... 1,289,404
Property and equipment, net of accumulated depreciation of
$647,461.................................................. 503,905
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$4,786,010
----------
----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................... $816,028
Accrued expenses........................................... 348,704
Accrued compensation and employee benefits................. 289,995
Current portion notes payable.............................. 413,454
Deferred revenue........................................... 142,299
Customer advances.......................................... 52,767
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Total current liabilities................................... 2,063,247
Deferred revenue............................................ 261,716
Notes payable, less current portion......................... 1,246,279
Stockholders' equity:
Common stock, no par value; 10,000,000 shares authorized;
6,294,031 shares issued and outstanding................... 16,964,504
Capital surplus............................................ 5,112,225
Accumulated deficit........................................ (20,861,961)
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Total stockholders' equity.................................. 1,214,768
----------
$4,786,010
----------
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SEE ACCOMPANYING NOTES
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HelpMate Robotics Inc.
Statements of Operations (Unaudited)
Three months ended March 31, 1997 and 1996
Three Months Ended March 31
---------------------------
1997 1996
---- ----
Revenues:
Sales revenues................................. $ 344,069 $ 212,938
Rental revenues................................ 317,747 252,272
Research and development contracts............. 154,536 --
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Total revenues.................................. 816,352 465,210
Cost of revenues:
Cost of sales.................................. 190,900 113,511
Cost of rental revenues........................ 193,289 268,274
Cost of research and development contracts..... 154,536 --
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Total costs of revenues......................... 538,725 381,785
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Gross profit.................................... 277,627 83,425
Selling, general and administrative expenses.... 834,720 901,305
---------- ----------
Operating loss.................................. (557,093) (817,880)
Other income.................................... 23,002 --
Interest expense................................ (70,334) (90,227)
Interest income................................. 7,432 28,885
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(39,900) (61,342)
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Loss before preferred stock dividends........... (596,993) (879,222)
Preferred stock dividends paid.................. -- 57,147
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Net loss applicable to common stock............. $ (596,993) $ (936,369)
---------- ----------
---------- ----------
Per share amounts:
Net loss applicable to common stock........... $ (0.10) $ (0.21)
---------- ----------
---------- ----------
Weighted average. number of shares of common
stock outstanding............................ 6,288,507 4,572,365
---------- ----------
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SEE ACCOMPANYING NOTES
3
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HelpMate Robotics Inc.
Statements of Cash Flows (Unaudited)
Three months ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
Three Months Ended March
31
-------------------------
<S> <C> <C>
1997 1996
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OPERATING ACTIVITIES
Net loss........................................................... $ (596,993) $ (879,222)
Adjustments to reconcile net loss to net cash used by operating
activities:
Interest.......................................................... 54,558 77,699
Compensation...................................................... 30,362 --
Provision for doubtful accounts................................... (10,000) --
Depreciation and amortization..................................... 176,981 247,571
Changes in operating accounts:
(Increase) in accounts receivable................................. (291,596) (7,083)
(Increase) decrease in inventory.................................. 76,042 (484,027)
(Increase) in other assets........................................ (65,626) (2,901)
Increase in accounts payable and accrued expenses................. 48,975 209,773
(Decrease) in deferred revenue.................................... (23,002) --
(Decrease) in customer advances................................... (43,944) (43,258)
----------- ------------
Total adjustments.................................................. (47,250) (82,115)
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Net cash used by operating activities.............................. (644,243) (881,448)
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INVESTING ACTIVITIES
Proceeds from sale of equipment leased to others................... 1,180,000 --
Installation costs................................................. (78,077) (23,376)
Equipment leased to others......................................... (544,044) (181,874)
Purchase of property and equipment................................. (12,358) (95,760)
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Net cash provided by (used in) investing activities................ 545,521 (301,010)
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FINANCING ACTIVITIES
Proceeds from capital lease obligation............................. 144,012 --
Repayments of notes payable and capital lease obligation........... (144,659) (91,199)
Proceeds from exercise of stock options............................ 3,363 450
Redemption of common stock issued for rent......................... -- (210,000)
Proceeds from issuance of common stock, net of expenses............ -- 6,093,441
Preferred stock dividends paid..................................... -- (57,147)
----------- ------------
Net cash provided by financing activities.......................... 2,716 5,735,545
----------- ------------
Net increase (decrease) in cash and cash equivalents............... (96,006) 4,553,087
Cash and cash equivalents at beginning of period................... 609,808 419,752
----------- ------------
Cash and cash equivalents at end of period......................... $ 513,802 $ 4,972,839
----------- ------------
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</TABLE>
SEE ACCOMPANYING NOTES
4
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HelpMate Robotics Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 1997
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Rule 310
of Regulation S-B. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments,
consisting only of normal recurring accruals, considered necessary for a fair
presentation have been included in the accompanying unaudited financial
statements. In addition, certain amounts for prior periods have been
reclassified to be comparable with the current period presentation. Operating
results for the three-month period ended March 31, 1997 are not necessarily
indicative of the results that may be expected for the full year ending
December 31, 1997. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form 10-KSB
for the year ended December 31, 1996.
SALE AND LEASEBACK TRANSACTION
On February 7, 1997, HelpMate Robotics Inc. ("HRI" or the "Company") entered
into a Purchase, Security and Remarketing Agreement and a Master Lease
Agreement with Leasing Technologies International, Inc. ("LTI") for the sale
and leaseback of fifteen of its robotic courier systems which are currently
under rent from the Company to hospitals across the United States ("sold
units"). The total proceeds obtained from this transaction was $1,230,000. As
part of the transaction, the Company assigned all of its rights, title and
interest in the underlying rental agreements for the sold units and granted a
security interest in fifteen additional rental agreements for units that were
not sold to LTI ("collateral units"). The Purchase, Security and Remarketing
Agreement requires the Company to, among other things, refurbish any sold
unit that ceases to be rented by a hospital and place that sold unit on rent
with another hospital prior to the Company placing one of its own units with
another hospital. In addition, the Company is responsible for the maintenance
of both the sold units and the collateral units. Upon the expiration of the
Master Lease Agreement (36 months), the Company shares in residual rental
payments from the sold units in the following manner: a) 75% for the Company
and 25% for LTI until such time as the Company receives an additional
$372,032 and b) 50% for the Company and 50% for LTI thereafter. Finally, the
Company has no right to repurchase the sold units from LTI. The Master Lease
Agreement will be classified as an operating lease in accordance with
Statement of Financial Accounting Standards No. 13, "Accounting for Leases".
The book value and related depreciation of the sold units, approximately
$935,000 and $350,000, respectively, have been removed from the accounts and
the gain (net of expenses of approximately $60,000) realized on the sale of
approximately $585,000 has been deferred and amortized over the term of the
Master Lease Agreement, 36 months. The maintenance costs expected to be
incurred for the sold units during the lease term have been accrued as of the
date of the sale, amortized over the term of the Master Lease Agreement and
correspondingly reduced the gain on the sale. Such costs approximate $158,000
thereby reducing the gain deferred and amortized to approximately $427,000.
No provision for the refurbishment of the sold units has been made, as the
Company's historical experience demonstrates that units do not cease being
rented. Payments under the Master Lease Agreement are payable monthly
commencing in March, 1997 and approximate $526,000 annually.
INSTALLATION COSTS
The Company incurs certain direct expenses associated with the installation
of its equipment leased to others. The Company recast its March 31, 1996
statements of operations, cash flows and stockholders' equity to reflect a
change in the period over which the Company's installation costs related to
its equipment leased to others is amortized. The Company previously amortized
such costs over a five year period. Under the new policy such costs are
amortized over the initial term of the lease in accordance with the generally
accepted accounting principles prescribed for leases. In 1996, such costs
increased in significance in relation to the Company's financial statements,
which was attributable to among other things, the Company's increased volume
of business and current market conditions which required the Company to incur
more of these costs. This change affects the financial statements of the
Company primarily by amortizing such costs more rapidly, as typically the
initial term of the leases entered into by the Company range from one to
three years. The net loss for first quarter of 1996 increased by $79,889 or
($0.02 per share) as a result of this change.
5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
GENERAL
HelpMate Robotics Inc. (the "Company"), a Connecticut corporation, was
co-founded in 1984 as a robotics "think-tank" by its chairman, Joseph F.
Engelberger. During its early years, the Company's primary focus was contract
engineering and research and development for third parties. Through the
years, however, the focus of the Company has evolved into the development of
products having commercial applications.
The Company designs, manufactures and markets autonomous robot transport
systems for use by the institutional healthcare industry. The Company's
flagship product, called HelpMate-TM-, is an intelligent, self-navigating,
battery-powered robot, which travels throughout a hospital free of fixed
tracks or guidewires. HelpMate robots provide repetitive, around-the-clock
transport of meals, medications, lab samples, supplies and medical records
within a hospital environment, relieving staff of unscheduled
"fetch-and-carry" tasks, and thus, the Company believes, reducing labor costs
and improving productivity. Using proprietary sensory technology and a
preprogrammed map of the facility, the HelpMate robot can avoid obstacles and
people, making almost instantaneous stops when necessary, and via radio link,
can summon elevators to travel between floors. The HelpMate system's
technology allows it to be a more flexible and cost-effective alternative to
systems such as dumbwaiters, pneumatic tubes or automated guided vehicles.
HelpMate development began in 1987, and in 1991, following extensive testing
at Danbury Hospital in Connecticut, the first HelpMate became operational.
Further, in connection with the development of its HelpMate robots, the
Company also has developed other applications of its robotics technology. The
Company has sold and continues to sell, on a limited basis, components of its
autonomous robotics navigation technology to universities, laboratories and
other research facilities. Moreover, the Company has licensed some of its
technologies for use in floor-cleaning and automated prescription-filling
applications. The Company also believes that there are opportunities for
expanding its HelpMate product lines to other uses, both within the hospital
environment and for other healthcare users such as nursing homes, and for
developing non-healthcare related applications and products.
The Company also engages in and continues to solicit research and development
contract opportunities in the areas of service robotics and robotics
technology applications. However, the Company only intends to engage in such
contract research and development to the extent that the incremental costs
for such activities are fully funded by the contracting party or other
outside sources.
The Company's near-term objective is to attain profitability by establishing
the HelpMate robotics system as a flexible, cost-efficient and preferred
method for transporting materials within hospitals and other healthcare
facilities. The Company's business strategy has been to (a) build a marketing
and customer service staff that will implement its marketing program for the
rental and sale of HelpMates to hospital users within North America, and (b)
enhance its HelpMate robotics systems through product improvement, cost
reduction and new feature development.
The Company's cash requirements and overall profitability are, among other
things, highly dependent upon the Company's mix of robot rentals and robot
sales. While the cost of producing and installing a unit is recouped
immediately when a unit or its related revenue stream is sold, it currently
takes approximately 18 months for the Company to recoup such costs when a
unit is rented. (This payback period has been reduced from 23 months at the
beginning of 1996 due to the Company's efforts to reduce costs in the
manufacturing and installation process. )
6
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REVENUES
Total revenues increased by $351,142 or 75% from the quarter ended March 31,
1996 compared to the quarter ended March 31, 1997. Rental revenues increased
by $65,475 or 26% and sales revenues increased by $131,131 or 62%. Also, the
Company earned revenues from research and development contracts of $154,536
during the quarter ended March 31, 1997 as a result of phase II of a NASA
sponsored program entitled "Two Armed, Mobile, Sensate Research Robot."
The increase in rental revenues is reflective of the Company's expanded fleet
of rental units which at March 31, 1997 was 61, a 27% increase from the 48
units under rent at December 31, 1996. The increase in sales revenues was
attributable to an increase in sales of robotic components to universities
and researchers around the world coupled with the sale of one HelpMate
compared to the quarter ended March 31, 1996 where no HelpMates were sold.
COST OF REVENUES
Cost of revenues increased by $156,940 or 41% from the quarter ended March
31, 1996 compared to the quarter ended March 31, 1997. The increase in cost
of revenues generally reflects the increase in revenues discussed above.
GROSS PROFIT
Gross profit increased by 233% or $194,202 from the quarter ended March 31,
1996 compared to the quarter ended March 31, 1997. The increase in gross
profit percentage and dollars for the quarter reflects the Company's on-going
strategy to reduce costs associated with manufacturing and installing its
HelpMate robots coupled with the fact that several of the Company's rental
units are now fully depreciated.
SELLING GENERAL AND ADMINISTRATIVE EXPENSES
Selling, General and Administrative Expenses decreased by $66,585 or 7% from
the quarter ended March 31, 1996 compared to the quarter ended March 31,
1997. The decrease reflects the Company's on going efforts to control costs
and reduce its unabsorbed overhead.
INTEREST EXPENSE AND INTEREST INCOME
Interest expense decreased by $19,893 or 22% from the quarter ended March 31,
1996 compared to the quarter ended March 31, 1997. The decrease in interest
expense reflects interest expense related to loans received by the Company in
the latter half of 1995, which were repaid in conjunction with the Company's
initial public offering in the first quarter of 1996. Interest income
decreased by $21,453 or 74% as a result of a decline in cash on hand from
March 31, 1996 to March 31, 1997. The Company's use of cash in expanding its
fleet of rental units should further result in a decrease in the amount of
interest income earned.
LOSSES
The Company incurred a net loss from continuing operations of $596,993 and
$879,222 for each of the quarters ending March 31, 1997 and 1996,
respectively. These losses were sustained primarily because the Company has
not achieved the volume of sales and rentals of HelpMates required to cover
the overhead expenses associated with the commercialization of its HelpMate
systems, and to the increase in staffing and sales and marketing expenses
noted above. It should further be mentioned that while the Company's order
flow continues to increase it has increased substantially for rentals not for
sales thereby resulting in a more rapid depletion of cash than originally
anticipated. The Company anticipates that such losses will continue until the
volume of sales and rentals of HelpMates necessary to cover overhead expenses
is achieved. As noted above, the overall profitability and cash flow of the
Company is highly dependent upon its mix of robot rentals and robot sales,
(i.e., more robot rentals than sales results in larger losses and a quicker
depletion of cash in the short run.)
7
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EARNINGS (LOSS) PER SHARE
Earnings (loss) per share of common stock for the quarter ended March 31,
1997 and 1996 was ($0.10) and ($0.21), respectively. The reduction in the net
loss per share is attributable to the increase in number of shares
outstanding from the aforementioned initial public offering. Earnings per
common share is computed using the treasury stock method based on the
weighted average number of common shares and common stock equivalent shares
outstanding during the period, as adjusted for the stock split that occurred
in conjunction with the initial public offering. Shares from the assumed
exercise of options and warrants granted by the Company and shares issuable
in connection with the Company's convertible preferred stock have been
included in the computations of earnings per share for all periods unless
their inclusion would be anti-dilutive.
LIQUIDITY AND CAPITAL RESOURCES
The Company historically has been dependent upon sources other than
operations to finance its working capital requirements. These sources include
loans and/or investments from stockholders and their affiliates, private
placements of its debt and equity securities, the Company's initial public
offering and certain financing transactions pursuant to which the Company
assigned the revenue stream from certain HelpMate robots and assigned the
existing rental agreements related thereto in exchange for lump sum payments
to the Company.
As of March 31, 1997 the Company's capital requirements in connection with
the design, development and commercialization of its HelpMate system continue
to be significant, principally due to the increased rate at which rental
orders have been received (discussed above). As of March 31, 1997, the
Company had orders to rent an additional 29 HelpMate robotics systems, an
increase from the 26 units in the rental backlog at December 31, 1996.
However, the manufacture and installation of the units required to satisfy
this backlog is expected to utilize a significant amount of cash. Further, as
rental order receipts continue, it will continue to put pressure on the
Company's limited cash liquidity.
In addition, by mid 1996, the Company had determined that the results that it
expected to experience had varied from the Company's estimates in that (i.)
Otis Elevator had reduced its forecast of purchases from 26 units to 6 units
(and for fiscal 1996 only purchased 4 units); (ii.) the distribution
agreement established with Bell & Howell Mailmobile Company had resulted in
no placements of HelpMates and was consequently terminated; (iii.) the mix of
robot rentals versus robot sales was significantly weighted to rentals,
resulting in a slower replenishment of cash, and (iv.) the time by which the
Company was able to fully train its sales force and establish its marketing
program was delayed by three months until June 30, 1996.
In light of the foregoing liquidity issues, the Company took the following
actions effective November 1, 1996; a) the Company terminated ten employees
from all of its departments; b) nine senior executives of the Company,
including the Company's Chairman, its President, Vice President of
Engineering and Controller agreed to partial salary deferrals for a period of
up to six months. (The Chairman has elected to receive no pay and the
President has elected to receive 25% of his pay.) If not then repaid, it is
anticipated that the salary deferred by these executives would be exchanged
sometime in the Spring of 1997 for non-qualified options to purchase the
Company's Common Stock. The terms of such options have not yet been
finalized, although it is anticipated that they will have a below market
exercise price and will be exercisable for no more than 100,000 shares of the
Company's Common Stock in the aggregate, and that their issuance would
require the approval by the Company's stockholders of an amendment to the
Company's existing Amended and Restated 1995 Stock Option Plan; c) the
Company's Chairman agreed to a grace period of up to six months for which
principal and interest due on outstanding obligations owed him be waived
until such time as the Company is better able to satisfy such obligations;
and d) the Company postponed research and development related to new products
until such time that the Company would be better able to finance the
projects. The foregoing actions were taken with the objective of ensuring
that the Company's cash on hand and cash generated from operations would be
sufficient to satisfy its contemplated cash requirements until such time as
it was able to complete the sale and leaseback transaction described below.
On February 7, 1997, the Company entered into a Purchase, Security and
Remarketing Agreement and a Master Lease Agreement with Leasing Technologies
International, Inc. ("LTI") for the sale and leaseback of fifteen of its
robotic courier systems which are currently under rent from the Company to
hospitals across the United States ("sold units"). The total proceeds
obtained from this transaction was $1,230,000. As part of the transaction,
the Company assigned all of its right, title and interest in the underlying
rental agreements for the sold units and granted a security interest in
fifteen additional rental agreements for units that were not sold to LTI
("collateral units"). The Purchase, Security and Remarketing Agreement
requires the Company to, among other things, refurbish any sold
8
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unit that ceases to be rented by a hospital and place that sold unit on rent
with another hospital prior to the Company placing one of its own units with
another hospital. In addition, the Company is responsible for the maintenance
of both the sold units and the collateral units. Upon the expiration of the
Master Lease Agreement (36 months), the Company shares in residual rental
payments from the sold units in the following manner: a)75% for the Company
and 25% for LTI until such time as the Company receives an additional
$372,032 and b) 50% for the Company and 50% for LTI thereafter. Finally, the
Company has no right to repurchase the sold units from LTI. Concurrent with
the closing of the above transaction, the Company a) hired two employees, b)
restored the salaries of the nine senior executives discussed above and c)
resumed making principal and interest due on outstanding obligations. The
Company has continued to postpone research and development related to new
products until such time and the Company would be better able to finance the
projects.
Further on May 5, 1997, the Company entered into another Purchase, Security
and Remarketing Agreement and a Master Lease Agreement with LTI for the sale
and leaseback of nine of its robotic courier systems which are currently
under rent from the Company to hospitals across the United States ("sold
units"). The total proceeds obtained from this transaction was $810,000. As
part of the transaction, the Company assigned all of its right, title and
interest in the underlying rental agreements for the sold units and granted a
security interest in three additional rental agreements for units that were
not sold to LTI ("collateral units"), and issued to LTI 98,182 warrants to
purchase the Company's common stock at $1.2375 . The warrants expire on May
4, 2006. The Purchase, Security and Remarketing Agreement requires the
Company to, among other things, refurbish any sold unit that ceases to be
rented by a hospital and place that sold unit on rent with another hospital
prior to the Company placing one of its own units with another hospital. In
addition, the Company is responsible for the maintenance of both the sold
units and the collateral units. Upon the expiration of the Master Lease
Agreement (32 months), the Company shares in residual rental payments from
the sold units in the following manner: a)75% for the Company and 25% for LTI
until such time as the Company receives an additional $225,400 and b) 50% for
the Company and 50% for LTI thereafter. Finally, the Company has no right to
repurchase the sold units from LTI. It should further be noted that until
such time as additional rental units are installed, financing vehicles such
as this will not be available to the Company.
The Company anticipates obtaining additional working capital financing during
the Summer of 1997 which will allow HRI to utilize an existing commitment for
up to $5 million in additional rental financing and up to $10 million in
lease financing. The Company has however taken actions and will institute
other measures such as employee termination, salary deferrals, and the
curtailment of sales, marketing and production activity to ensure that
operations would continue throughout 1997 if the additional financing
transactions are not consummated. These actions could however have a material
and adverse impact on the Company its business and financial condition in the
following manner: a) increase the time in which the Company will be able to
fulfill its backlog requirements, b) negatively impact the Company's
reputation in the marketplace and consequently negatively impact order
receipts, c) indefinitely postpone the Company's ability to generate positive
cash flow and / or income and d) adversely affect the Company's ability to
generate new orders and / or obtain additional financing. However, subject to
the forgoing, the Company believes that even at a reduced level of
operations, it will be able to produce, rent and/or sell, and install those
units for which it has received firm orders. The Company continues to
actively seek additional financing alternatives in order to strengthen its
liquidity situation in the short term, and although the Company has
identified some potential sources of such financing, the Company has no
current commitments or agreements with respect to such and there can be no
assurance that any additional financing will be available to the Company on
acceptable terms, or at all. Such alternatives include, but are not limited
to transactions similar in nature to that entered into with LTI; private
placement of the Company's securities in the United States or abroad; and /
or mezzanine type financing (including senior or subordinated debt). Further,
additional equity financing may involve substantial dilution of the stock
ownership of the Company's existing stockholders. Moreover, financial or
other covenants imposed by future financing sources might further adversely
affect the Company's ability to pay dividends and management's ability to
control the Company. Additionally, by transferring the title and rental
agreements to a third party for an immediate cash payment, the Company could
lose all or a portion of its opportunity to benefit from ongoing rentals in
the future or from the residual value of the units upon the expiration of the
rental agreements. Finally, no assurances can be given that any such
financing will provide sufficient cash required for the Company to attain an
operating revenue stream of cash sufficient to support the Company's
continued operations. It is also not anticipated that current stockholders
will provide any additional financing. (This paragraph contains forward
looking statements and the Company's actual results may differ if (a) the mix
of robot rentals versus sales changes; (b) existing orders are canceled; (c)
the Company's own order / installation forecast changes; (d) the Company is
unable to secure additional financing and (e) the actions and measures
described above are not sufficient to ensure that operations will continue
throughout 1997.)
9
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For the foreseeable future, the Company does not anticipate paying dividends
and the Company anticipates retaining any earnings to fund its operations.
Moreover, the ability of the Company to pay dividends is subject to
contractual restrictions through September 2001. Specifically, during that
period, the Company may not, unless otherwise approved by one of its lenders,
directly or indirectly declare, order, pay or reserve any sum or property for
the payment of any dividend or other distribution on the Company's capital
stock until such time as the Company has achieved a net profit for three
consecutive fiscal quarters.
SAFE HARBOR STATEMENT
Statements which are not historical facts in this report are forward looking
statements, made on a good faith basis. Such forward looking statements,
including those concerning the Company's expectations for demand and sales or
rentals of new or existing products, profitability, cash flow, etc. all
involve risk and uncertainties. Actual results may differ materially from
forward looking statements for reasons including, but not limited to, changes
in the healthcare industry, mix of robot rentals versus sales and the
Company's ability to finance its ongoing operations.
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
On May 5, 1997, the Company entered into another Purchase, Security and
Remarketing Agreement and a Master Lease Agreement with LTI for the sale and
leaseback of nine of its robotic courier systems which are currently under
rent from the Company to hospitals across the United States ("sold units").
(See Item 2. Management's Discussion and Analysis or Plan of Operation,
Liquidity and Capital Resources for a more detailed description of this
transaction.)
10
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A Form 8-K was filed on February 21, 1997 describing the sale and leaseback
transaction consummated on February 7, 1997 discussed above.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NO. DESCRIPTION OF EXHIBIT
- --------- ----------------------------------------------------------------------------------------------------------
<C> <S>
3.01 Amended and Restated Certificate of Incorporation of Registrant as filed on December 28, 1995
(Incorporated by reference to Form SB2 No. 33-99348 filed January 31, 1996, Exhibit No. 3.02)
3.02 Form of By-Laws of the Registrant, as amended .(Incorporated by reference to Form SB2 No, 33-99348 filed
January 31, 1996, Exhibit No. 3.03)
4.01* Form of Common Stock Certificate
4.02* Form of Warrant Certificate
4.03* Form of Unit Certificate
4.04* Form of Warrant Agreement
4.05* Form of Underwriters' Unit Purchase Option
4.06* Pages of the Registrant's Certificate of Incorporation that define the rights of holders of the securities
being registered hereby are incorporated herein by reference to pages 3, 4, 6 and 7 of Exhibit 3.01
4.07* Pages of the Registrant's By-Laws that define the rights of holders of the securities being registered
hereby are incorporated herein by reference to pages 1, 2, 3, 4, 5, 6, 12 and 13 of Exhibit 3.02
10.01* Loan Agreement dated November 20, 1990 with Connecticut Innovations, Incorporated ("CII").
10.02* $500,000 Promissory Note dated November 20, 1990 in favor of CII.
10.03* Security Agreement dated November 20, 1990 in favor of CII.
10.04* Loan Agreement May 26, 1995 with Joseph F. Engelberger ("Mr. Engelberger").
10.05* $320,000 Promissory Note dated May 26, 1995 in favor of Mr. Engelberger.
10.06* Financing Agreement dated June 14, 1995 with CII.
10.07* $500,000 Senior Note dated June 14, 1995 in favor of CII.
10.08* Security Agreement dated June 14, 1995 in favor of CII.
10.09* Subordination Agreement dated June 14, 1995 among the Registrant, Mr. Engelberger and CII.
10.10* First Amendment to Financing Agreement dated September 20, 1995 with CII.
10.11* $300,000 Senior Convertible Note dated September 20, 1995 in favor of CII.
10.12* First Amendment to Security Agreement dated September 20, 1995 with CII.
10.13* Amendment to Subordination Agreement dated September 20, 1995 with CII.
10.14* Loan Agreement dated October 3, 1995 with Minnesota Mining and Manufacturing Company ("3M").
10.15* $250,000 Note dated October 3, 1995 in favor of 3M.
10.16* Loan Agreement dated September 28, 1995 with Landmark Partners Inc. ("Landmark").
10.17* $150,000 Note dated September 28, 1995 in favor of Landmark.
10.18* Loan Agreement dated September 27, 1995 with Connecticut Financial Developments, L.P. ("CFD").
10.19* $100,000 Note dated September 27, 1995 in favor of CFD.
10.20* Sales and Maintenance Agreement with Hospital Transporters, Limited Partnership dated as of August 19,
1994, with letter agreement dated October 14, 1994, and letter agreement dated August 4, 1995.
10.21* Program Agreement dated May 30, 1995 with Center Capital Corporation.
10.22* Employment Agreement with Mr. Engelberger dated June 1, 1995 and amended as of November 1, 1995.
10.23* Employment Agreement with John M. Evans, Jr. dated April 17, 1987 and amended as of February 1, 1995 and
10.24* as of November 1, 1995. Employment Agreement dated April 17, 1987 with Carl Weiman.
10.25* Employment Agreement dated April 17, 1987 with Bala Krishnamurthy.
10.26* Employment Agreement dated as of November 1, 1995 with Thomas K. Sweeny ("Mr. Sweeny")
10.27* Stock Option Agreement dated as of November 1, 1995 with Mr. Sweeny.
10.28* Service Agreement dated February 1, 1995 with Landmark (terminated pursuant to Exhibit 10.29)
10.29* Termination Agreement with Landmark dated as of November 1, 1995
10.30* Amended and Restated Buy and Sell Agreement dated April 17, 1987, as amended on September.
10.31* Development Agreement dated May 1985 with Aktiebolaget Electrolux ("Electrolux").
10.32* Development Agreement dated April 15, 1987 with Electrolux.
10.33* Development Agreement dated May 1986 between Consolidated Controls Corporation and Connecticut Product
Development Corporation (assumed by the Registrant and CII, respectively).
<PAGE>
10.34* Royalty Reduction Agreement with CII.
10.35* Joint Venture Agreement, dated July 1, 1988 with Thrift Drug Company, Automated Prescription Systems, Inc.
("APS") and Retired Persons Services, Inc.
10.36* Agreement for Representation of Manufacturer/Licensee dated August, 1988 with APS.
10.37* Distributor Agreement, dated August 14, 1991, with Yaskawa Electric Manufacturing Company, Ltd.
("Yaskawa").
10.38* Technology Transfer and License Agreement with Yaskawa dated as of May 15, 1992.
10.39* License Agreement Dated as of December 21, 1992 with Electrolux.
10.40* Distribution Agreement dated on or about December 1, 1994 with a subsidiary of Otis Elevator Company
("Otis").
10.41* Agreement for Sales with Bell & Howell Mailmobile dated October 18, 1995.
10.42* Lease dated as of November 1, 1992 with Westinghouse Electric Corporation ("Westinghouse") for premises
located at Shelter Rock Lane in Danbury, Connecticut.
10.43* Letter Agreement dated October 21, 1992, with Westinghouse.
10.44* Directors and Officers Liability Insurance Policy.
10.45* Product Liability Insurance Policy.
10.46* Stock Purchase Agreement dated July 29, 1987 with Transitions Two, Limited Partnership ("Transitions
Two").
10.47* Stock Purchase Agreement, dated July 29, 1987 with 3M.
10.48* Stock Purchase Agreement dated February 24, 1989 with 3M, White Consolidated Industries, Inc. ("White"),
which is a subsidiary of Electrolux, and Transitions Two, as amended by Amendment to Stock Purchase
Agreement, dated March 9, 1989.
10.49* Stock Purchase Agreement, dated August 14, 1991 with Yaskawa.
10.50* Preferred Stock Purchase Agreement dated as of May 28, 1993 with CFD.
10.51* Registration Rights Agreement dated as of May 28, 1993 with CFD.
10.52* Co-Sale Agreement among the Registrant, Mr. Engelberger, Margaret Engelberger, Technology Transitions,
Inc., 3M, White, Transitions Two, Yaskawa and CFD.
10.53* Stock Purchase Agreement dated December 1, 1994 with Otis.
10.54* Warrant dated November 20, 1990, as amended on June 14, 1995, issued to CII for 5,000 shares of the
Registrant's Common Stock, expiring on July 1, 2000.
10.55* Warrant dated January 16, 1991, issued to 3M for 3,000 shares of the Registrant's Common Stock, expiring
on February 1, 1997.
10.56* Warrant dated January 16, 1991, issued to Mr. Engelberger for 3,000 shares of the Registrant's Common
Stock, expiring on February 1, 1997.
10.57* Warrant dated January 16, 1991, issued to White for 3,000 shares of the Registrant's Common Stock,
expiring on February 1, 1997.
10.58* Warrant dated January 16, 1991, issued to Transitions Two for 3,000 shares of the Registrant's
Common Stock, expiring on February 1, 1997.
10.59* Warrant dated July 6, 1992, issued to Mr. Engelberger for 2,000 shares of the Registrant's Common Stock,
expiring on August 1, 1998.
10.60* Warrant dated July 6, 1992, issued to Transitions Two for 2,000 shares of the Registrant's Common Stock,
expiring on August 1, 1998.
10.61* Warrant dated March 22, 1993, issued to Transitions Two for 5,000 shares of the Registrant's Common Stock,
expiring on March 21, 1999.
10.62* Warrant dated July 1, 1993, issued to Electrolux for 4,300 shares of the Registrant's Common Stock,
expiring on June 30, 1999.
10.63* Warrant dated May 26, 1995, issued to Mr. Engelberger for 4,000 shares of the Registrant's Common Stock,
expiring May 25, 2005.
10.64* Stock Subscription Warrant dated June 14, 1995, issued to CII for 10,000 shares of the Registrant's Common
Stock, expiring June 14, 2005.
10.65* Warrant and Stock Put Agreement dated June 14, 1995 between the Registrant and CII.
10.66* Stock Subscription Warrant dated September 20, 1995, issued to CII for 6,000 shares of the Registrant's
Common Stock, expiring September 20, 2005.
10.67* Warrant and Stock Put Agreement dated September 20, 1995 with CII.
10.68* Stock Subscription Warrant dated October 3, 1995, issued to 3M for 5,000 shares of the Registrant's Common
Stock, expiring September 30, 2005.
12
<PAGE>
10.69* Stock Subscription Warrant dated September 28, 1995, issued to Landmark for 3,000 shares of the
Registrant's Common Stock, expiring September 30, 2005.
10.70* Stock Subscription Warrant dated September 27, 1995, issued to CFD for 2,000 shares of the Registrant's
Common Stock, expiring September 30, 2005.
10.71* 1984 Nonqualified Stock Option Plan dated September 21, 1984.
10.72* 1988 Nonqualified Stock Option Plan dated October 27, 1988.
10.73* Form of 1995 Stock Option Plan.
10.74 Purchase, Security and Remarketing Agreement with Leasing Technologies International, Inc. dated as of
February 7, 1997. (Incorporated by reference to Form 8-K filed February 21, 1997, Exhibit No. 10.01)
10.75 Master Lease Agreement with Leasing Technologies International, Inc. dated as of January 23, 1997 and
related Equipment Schedules No. 01 through No. 05. (Incorporated by reference to Form 8-K No. filed
February 21, 1997, Exhibit No. 10.02)
10.76 Letter Agreement with Leasing Technologies International, Inc. dated as of February 7, 1997. (Incorporated
by reference to Form 8-K filed February 21, 1997, Exhibit No. 10.03)
10.77 HelpMate Robotics Inc. 1996/1997 Vendor Marketing Program dated 12/12/96. (Incorporated by reference to
Form 10-KSB filed March 28, 1997, Exhibit No. 10.77)
10.78 Purchase, Security and Remarketing Agreement with Leasing Technologies International, Inc. dated as of May 5, 1997.
10.79 Equipment Schedules No. 08 through No. 10. To Master Lease Agreement with Leasing Technologies
International, Inc. dated as of January 23, 1997.
10.80 Stock Subscription Warrant dated May 5, 1997, issued to Leasing Technologies International for 98,182
shares of the Registrant's Common Stock, expiring May 4, 2006.
11.01 Statement Re: Computation of Primary Per Share Earnings.
27.1 Financial Data Schedule for the quarter ended March 31, 1997
</TABLE>
* Incorporated by reference to Form SB2 Number 33-99348 filed January 31, 1996
under the same exhibit number as filed therein.
13
<PAGE>
SIGNATURES
In accordance with requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned , thereunto duly
authorized.
Helpmate Robotics Inc.
Date: May 7, 1997 /S/ JOSEPH F. ENGELBERGER
-------------------------
Joseph F. Engelberger,
Chairman and Director
Date: May 7, 1997 /S/ THOMAS K. SWEENY
---------------------
Thomas K. Sweeny,
President, and Chief Executive Officer,
Director, Treasurer and Principal Financial
Officer
14
<PAGE>
Exhibit 10.78
PURCHASE, SECURITY AND REMARKETING AGREEMENT
THIS AGREEMENT, dated the 5th day of May, 1997 by and between
LEASING TECHNOLOGIES INTERNATIONAL, INC. ("Buyer"), a Delaware
corporation with a principal place of business at 221 Danbury
Road, Wilton, Connecticut 06897 and HELPMATE ROBOTICS INC.
("Seller"), a Connecticut corporation with a principal place of
business at Shelter Rock Lane, Danbury, Connecticut 06810,
WITNESSETH
WHEREAS, Seller manufactures, rents, owns and markets trackless,
robotic couriers and courier systems consisting of a HelpMate
robot, backpack, two extended coverage radios, one elevator
interface and communication devices (hereafter a "Courier" or the
"Couriers"), as more particularly described on Exhibit A annexed
hereto; and
WHEREAS, Seller rents Couriers to the hospitals (the "Users")
listed on Schedules 1 - A and 1 - B pursuant to rental agreements
(the "User Agreements") between each User and Seller; and
WHEREAS, Buyer wishes to purchase from Seller nine Couriers
listed on Schedule 1 - A (hereafter the Couriers listed on
Schedule 1 - A are referred to as the "Equipment") subject to the
User Agreements pertaining to the Equipment, and to lease the
Equipment to Seller pursuant to the Master Lease (as hereafter
defined) between Buyer, as lessor and Seller, as lessee; and
WHEREAS, Seller wishes to (a) sell the Equipment to, and lease
the Equipment back from Buyer, and (b) assign all of its right,
title and interest in the User Agreements listed on Schedule 1 -
A and the User Agreements (and in the Couriers subject thereto)
listed on Schedule 1 - B to Buyer as security for the obligations
arising under the Master Lease (the User Agreements set forth on
Schedule 1 - B are hereafter referred to as the "Collateral User
Agreements" and the Couriers set forth on Schedule 1 - B are
hereafter referred to as the "Collateral Equipment"), subject to
the terms and conditions hereof;
NOW THEREFORE, the parties hereto do hereby agree as follows:
1. SALE AND PURCHASE OF EQUIPMENT.
Seller agrees to sell and Buyer agrees to purchase from Seller, the Equipment
listed on Schedule 1 - A, annexed hereto. Title to the
<PAGE>
Equipment shall be conveyed by Seller to Buyer in accordance
with the terms and conditions of this Agreement.
2. PURCHASE PRICE.
The purchase price ("Purchase Price") of the Equipment is
$810,000, plus sales tax, if applicable, based upon the purchase
of 9 Couriers at a purchase price per Courier of $90,000, which
amount Buyer agrees to pay to Seller in full on or before May 5,
1997 (the "Closing Date"), or on such later date as Buyer and
Seller may agree. Upon receipt of the Purchase Price in full,
Seller shall deliver to Buyer a Bill of Sale in the form of
Exhibit B, annexed hereto, accurately describing the Equipment
and warranting title thereto, and that each item thereof is free
of liens, claims, or encumbrances (other than the User Agreement
pertaining to the Equipment). Buyer may offset the Retained
Amount (as defined in Section 7) against the Purchase Price.
3. DELIVERY.
Buyer shall accept delivery of the Equipment at the respective
sites of installation set forth in the applicable User
Agreements, as of the Closing Date.
4. LEASE.
On the Closing Date, immediately after consummation of the sale
and purchase contemplated by this Agreement, Seller shall execute
and deliver to Buyer an executed Master Lease Agreement (the
"Master Lease") and Schedules 08 - 10 thereto, pursuant to which
Seller shall lease the Equipment from Buyer. The Master Lease
shall be in the form of Exhibit C, annexed hereto; the Schedules
shall be in the form of Exhibit C - 1. Seller shall, in
addition, deliver to Buyer, on or prior to the Closing Date, such
other documents as Buyer shall reasonably request relating to the
Master Lease, including but not limited to the following:
(a) Insurance certificates from Seller naming Seller, Buyer,
and their respective successors and assigns as loss payees and
additional insureds;
(b) Uniform Commercial Code Financing Statements;
(c) Incumbency certificates;
(d) Tax exemption certificates from each of the Users (if
not tax exempt, Seller or User shall be responsible for tax
payments). Notwithstanding the provisions of this Section 4, tax
exemption certificates may be furnished within 45 days of the
Closing Date;
(e) Insurance certificates from each of the Users, naming
Seller, Buyer and their respective successors and assigns as loss
2
<PAGE>
payees and additional insureds. Notwithstanding the provisions
of this Section 4, the insurance certificates set forth in this
Section 4(e) may be furnished within 30 days of the Closing Date;
and
(f) Such other documents as Buyer may reasonably request.
5. USER AGREEMENTS.
Seller shall, on the Closing Date, also deliver to Buyer, the
following documents relating to the User Agreements:
(a) Original counterparts of each User Agreement, signed by
the Seller and by the User;
(b) Original acceptance certificates. Notwithstanding any
provision in this Section 5 to the contrary, the original
acceptance certificates may be furnished by Seller within 45 days
of the Closing Date;
(c) Uniform Commercial Code Financing Statements, if
available;
(d) An assignment, in the form of Exhibit D, assigning all
of Seller's rights with respect to (i) any and all payments due
under the User Agreement, (ii) the enforcement of the User
Agreement, (iii) the enforcement of the User's obligations under
the User Agreement (but none of Seller's obligations thereunder)
to Buyer; and
(e) A notice of assignment and payment direction notice to
each User, in the form of Exhibit E with respect to the User
Agreements and in the form of Exhibit E - 1 with respect to the
Collateral User Agreements, directing payment to the Lockbox
Account (as hereafter defined) of payments due under the User
Agreements.
6. SECURITY.
To secure the prompt and full performance of all of Seller's
obligations under the Master Lease, Seller hereby grants to Buyer
a first priority security interest in the Collateral Equipment
and the Collateral User Agreements (hereafter the Collateral User
Agreements and the Collateral Equipment are sometimes
collectively referred to as the "Collateral"). Seller agrees to
deliver to Buyer, on or prior to the Closing Date, any Uniform
Commercial Code Financing Statements and amendments and all other
agreements, documents, and instruments reasonably requested by
Buyer to perfect and maintain Buyer's security interest in the
Collateral.
If (i) a default occurs with respect to any Collateral Equipment
which is not cured within any applicable grace or cure period
3
<PAGE>
contained in the applicable User Agreement or (ii) the Collateral
Equipment is destroyed, damaged or sold without Buyer's prior
written consent (such default or such damage, destruction or sale
hereafter sometimes referred to as a "Substitution Event"), then
Buyer may, within forty-five days after the occurrence of such
Substitution Event (or within forty-five days after Seller
becomes aware that such Substitution Event has occurred), require
Seller to substitute another Courier and User Agreement for the
Collateral Equipment and Collateral User Agreement then in
default. Such substitute Courier and applicable User Agreement
shall then serve as security for the Seller's obligations in
accordance with the provisions of this Agreement. Seller shall
furnish to Buyer such documents as may be reasonably requested by
Buyer to effectuate such substitution.
7. BILLING; PAYMENTS; REPORTS.
(a) So long as Seller as Seller is not in default under this
Agreement or under the Master Lease, Seller shall continue to
invoice the Users in accordance with the terms and conditions of
the User Agreements and of the Collateral User Agreements;
provided however, that (i) all invoices shall, on and after the
Closing Date, direct payment to a lockbox account (the "Lockbox
Account") to be established at a depository institution selected
by Buyer, (ii) Seller shall simultaneously send a copy of each
invoice to Buyer and (iii) Buyer shall have the right, upon prior
notice to Seller, to invoice the Users in the event of a default
under this Agreement. Seller shall cooperate with Buyer and with
such depository institution in connection with the creation of
the Lockbox Account. To the extent that, notwithstanding the
payment direction set forth in the preceding sentence, any
payments pertaining to the User Agreements are received by Seller
after the date of this Agreement, such payments shall be held by
Seller for the benefit of Buyer and shall be immediately paid by
Seller to Buyer.
(b) Subject to the next succeeding sentence, all payments
received in the Lockbox Account shall be applied against the
Monthly Rent due from Seller to Buyer pursuant to the Master
Lease. Not later than the fifteenth (15th) day of each month
beginning with the month of June, 1997, provided that Seller is
not in default of its obligations under the Master Lease, Buyer
shall remit to Seller at the address set forth above (a) any
amounts generated by the User Leases in excess of $31,584 (the
"Retained Amount") and (b) any sales taxes paid pertaining to the
User Agreements paid the Users to the Lockbox Account. In
addition to the security provided by the Collateral Equipment and
the Collateral User Agreements, the Retained Amount shall secure
the obligations arising under this Agreement and under the Master
Lease Agreement, including but not limited to any obligations of
Seller relating to property or sales taxes, insurance or the
qualification by Seller to do business as a foreign corporation
in any state where the Equipment or
4
<PAGE>
Collateral Equipment is located. The balance of the Retained
Amount shall be returned by Buyer to Seller upon the expiration
of the Initial Term of Schedules 08 - 10 to the Master Lease,
provided Seller is not in default thereunder.
(c) Buyer shall, on the first and fifteenth day of each month,
furnish Seller with a report of payments received in the Lockbox
Account, such report to set forth the appropriate Seller invoice,
name of payor, payor customer account number, payor's check
number and the amount of payment. So long as Seller is not in
default under this Agreement or under the Master Lease, Buyer
shall not contact any User with respect to any payments due under
a User Lease until such payment is more than thirty (30) days
past due.
(d) Notwithstanding any provision to the contrary contained in
this Agreement, Seller agrees that the Retained Amount shall
secure all of Seller's obligations arising under the Purchase,
Security and Remarketing Agreement (the "February 1997
Agreement") between Buyer and Seller dated February 7, 1997, the
Master Lease and all Schedules thereto and this Agreement.
8. REMARKETING; REFURBISHMENT; SUBSTITUTION.
(a) So long as (a) Buyer owns the Equipment or (b) seven years
from the date hereof, whichever occurs first, Seller shall, on a
priority basis, maximize the revenue produced by the Equipment by
remarketing the Equipment, whether by sale, rental or lease to
the User, or to a third party. In connection therewith, Seller
shall remarket the Equipment at Seller's expense, on a priority
basis, such that the Equipment shall be sold, leased or rented
prior to the sale, rental or lease of other Couriers or similar
equipment sold, rented or leased by Seller. Seller shall keep
Buyer reasonably informed of the status of its remarketing
efforts. No remarketing arrangement shall be consummated without
the prior written consent of Buyer, which shall not be
unreasonably withheld or delayed.
(b) Until the earlier of the date that (i) the Equipment is no
longer revenue generating or (ii) seven years from the date of
this Agreement, any Equipment which is not renewed or purchased
by the User shall, at Buyer's request, be refurbished at Seller's
expense (to a commercially acceptable standard).
(c) If during the period beginning on the date of this Agreement
and ending twelve months thereafter, any Equipment or Collateral
Equipment is purchased by the User thereof, Seller may (provided
Seller is not in default under this Agreement), at its option,
either (i) promptly remit to Buyer the proceeds of such sale or
(ii) substitute, with Buyer's written consent (which consent
shall not be unreasonably withheld or delayed) a Courier of equal
or greater value and a User Agreement with respect to such
substitute
5
<PAGE>
Courier with a User whose credit is equal to or better than the User that
purchased the Courier.
(d) So long as Seller is not in default under this Agreement or
under the Master Lease, if any Equipment is sold in accordance
with the provisions of this Agreement, Buyer shall release its
security interest in a like item of Collateral Equipment selected
by Buyer promptly after Buyer's receipt of the proceeds of sale
from such Equipment.
9. RESIDUALS.
After Buyer has received, from the Monthly Rentals generated by
the Master Lease (or from the proceeds generated by the sale,
lease, loss, damage or other involuntary conversion of the
Equipment), the Purchase Price of the Equipment (together with
any unreimbursed expenses incurred by Buyer as a result of a
default by Seller in the performance of its obligations under
this Agreement, the Master Lease, the User Agreements or the User
Collateral Agreements), plus interest thereon calculated at the
rate of 1 1/2% per month, proceeds from remarketing by sale,
lease or rental (the "Remarketing Proceeds") derived from the
Equipment shall be allocated as follows:
(a) Buyer shall be entitled to 25% of Remarketing Proceeds,
and Seller shall be entitled to 75% of Remarketing Proceeds,
until Seller has received from such proceeds, $225,400.00; and
(b) thereafter, Remarketing Proceeds shall be shared equally
between Buyer and Seller.
All Remarketing Proceeds, unless otherwise agreed upon by Buyer,
shall be remitted to the Lockbox Account. Buyer shall, upon
receipt and clearance of such proceeds, promptly pay Seller's
appropriate share of Remarketing Proceeds to Seller.
10. BUYER'S REPRESENTATIONS AND WARRANTIES.
Buyer represents and warrants as follows:
(a) Buyer is a duly organized and validly existing corporation
in good standing under the laws of the State of Delaware.
(b) Buyer has the authority to execute and deliver this
agreement and other documents required thereunder. This
Agreement will, on delivery, constitute the valid and binding
obligation of Buyer, enforceable in accordance with its terms,
subject to any bankruptcy, insolvency or similar laws affecting
the rights of creditors generally, and to judicial
interpretation.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated thereunder will not
6
<PAGE>
result in any breach of or constitute a default under any
agreement to which Buyer is a party, nor will it violate the
certificate of incorporation or any by-law of Buyer.
11. SELLER'S REPRESENTATIONS AND WARRANTIES.
(a) Seller is a duly organized and validly existing Corporation
in good standing under the laws of the State of Connecticut.
(b) Seller has the authority to execute and deliver this
Agreement and the other documents contemplated thereunder. This
Agreement will, on execution and delivery, constitute the valid
and binding obligation of Seller, enforceable in accordance with
its terms, subject to any bankruptcy, insolvency or similar laws
affecting the rights of creditors generally, and to judicial
interpretation.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated thereunder will not
result in any breach of or constitute a default under any
agreement to which Buyer is a party, nor will it violate the
certificate of incorporation or any by-law of Buyer.
(d) With respect to each User Agreement and Collateral User
Agreement, and the Equipment and Collateral Equipment subject
thereto, Seller represents and warrants as follows:
(i) To the best of Seller's knowledge, each User Agreement
represents the valid and binding obligation of the User
thereunder, enforceable in accordance with its terms, subject to
any bankruptcy, insolvency or similar laws affecting the rights
of creditors generally and may not be terminated or cancelled
except as specifically set forth therein;
(ii) Except as set forth on Schedule 2, the User is not in
default of its obligations under the applicable User Lease;
(iii) The Rent and Term of each User Agreement are as set
forth on Schedule 2, annexed hereto;
(iv) Seller has no knowledge of any material adverse change
in the User's financial condition;
(v) All material documents (or true and correct copies
thereof) pertaining to the use, operation and maintenance of the
Equipment have been delivered to Buyer;
(vi) Except as set forth on Schedule 2, the User Agreements
have not been modified or amended;
(vii) Seller shall maintain (or cause to be maintained) "all
risk" property insurance and public liability insurance policies
7
<PAGE>
covering the Equipment and the Collateral Equipment. The "all
risk" property insurance and the public liability insurance shall
be in such amounts as are reasonably acceptable to Buyer. Buyer,
its successors and assigns shall be named as additional insureds
and loss payees on such policies, which shall be written by an
insurance company of recognized responsibility which is
reasonably acceptable to Owner;
(viii) Seller shall during the Term of this Agreement,
maintain (or cause to be maintained) the Equipment and the
Collateral Equipment, at no expense to Buyer, keep the Equipment
and the Collateral Equipment in good working order and condition
and make all necessary adjustments, repairs and replacements; and
(ix) No User Agreement shall be modified, amended or
terminated or any defaults declared or remedies exercised
without, in each case, obtaining the prior written approval of
Buyer (or Buyer's assignee) which approval shall not be
unreasonably withheld or delayed.
12. NOTIFICATIONS; INDEMNIFICATIONS.
(a) So long as Buyer owns Equipment or has a security interest in
the Collateral Equipment (hereafter the Equipment and the
Collateral Equipment are sometimes referred to as the "Owner
Equipment"), Seller shall notify Buyer of:
(1) Any change in the location of the Owner Equipment, and
in connection therewith, will furnish to Buyer, at the end of
each calendar quarter, a current listing of the Owner Equipment
identified by serial number and location (including street
address);
(2) To the extent known to Seller, the details of each
accident resulting in personal injury, or damage to the Owner
Equipment or other property arising out of the alleged or
apparent improper manufacture, function or operation of any of
the Owner Equipment, stating the time, place, extent and nature
of the accident and damage;
(3) The receipt of any and all correspondence, papers,
notices, documents and process whatsoever at any time received by
Seller in connection with any claim or demand involving or
related to improper manufacture, function or operation of any of
the Owner Equipment or alleging Buyer or Seller with liability
therefor;
(4) The filing of any tax lien against any of the Owner
Equipment specifying the location and serial number of the items
involved; and
(5) The termination, cancellation, default or violation of
any of the provisions of a User Agreement by any User of the
Owner
8
<PAGE>
Equipment and/or any adverse credit information with respect to such User, of
which Seller is aware.
(b) Seller hereby agrees to indemnify Buyer against and hold
Buyer harmless from any and all loss, cost, liability or expense,
including attorney's fees arising or incurred whether or not this
Agreement is terminated because of or in connection with:
(1) The claim of any person, corporation or firm engaged by
the Seller for fees, charges, commissions or other compensation
for services rendered with respect to this Agreement or the
transactions contemplated under this Agreement as broker,
salesman, finder or otherwise;
(2) Any claim with respect to the Owner Equipment,
including but not limited to the improper manufacture, operation,
function or other inadequacy of the Owner Equipment, any
deficiency or defect therein or any injury or damage which may
have been caused by the Owner Equipment; or
(3) Any misrepresentation or breach of warranty from Seller
to Buyer contained in this Agreement.
(c) Buyer hereby agrees to indemnify Seller against and hold
Buyer harmless from any and all loss, cost, liability or expense,
including attorney's fees arising or incurred whether or not this
Agreement is terminated because of or in connection with:
(1) The claim of any person, corporation or firm engaged by
the Buyer for fees, charges, commissions, or other compensation
for services rendered with respect to this Agreement or the
transactions contemplated under this Agreement as broker,
salesman, finder or otherwise; or
(2) Any misrepresentation or breach of warranty from Buyer
to Seller contained in this Agreement.
With respect to any expenditure by Buyer hereunder for which
Buyer is entitled to reimbursement, Seller shall pay interest at
the rate of 1 1/2% per month, or the highest lawful contract
rate, whichever is less, from the date of expenditure until the
date of reimbursement.
13. EXCLUSIVITY.
(a) Seller acknowledges that Buyer has and will be incurring
expenses, making financial and other commitments and providing
information and expertise to Seller to enable Seller to engage in
the program hereunder. Accordingly, until Seller has offered at
least $5 million of Couriers subject to rental agreements to
Buyer in accordance with the provisions of the "1996/1997 Vendor
Marketing Program", among Buyer, Seller and Neptune Technology
9
<PAGE>
Leasing Corp., Seller shall not offer any rental agreements with
respect to Couriers to any other leasing or finance company or
other entity to finance equipment during the term hereof, it
being understood and agreed by Seller that Buyer shall be
Seller's exclusive source for lease financing during the term of
this Agreement.
(b) Further, for the period beginning on the date of this
Agreement and ending February 6, 2000, Seller shall not offer any
lease agreements with respect to its Couriers to any other
leasing or finance company or other entity to finance Couriers.
For purposes of this Section, a lease agreement shall be defined
as an agreement for the lease of equipment which is not
cancelable by lessor or lessee (except in the event of default)
for at least a two year period.
(c) Thereafter, for the term of this Agreement with respect to
the financing of any leases or rentals, Buyer shall have the
right of first refusal with respect to the financing of any
Couriers or other equipment subject to lease agreements or rental
agreements, such right to be exercisable as follows: If, at any
time during the term of this Agreement (but after the
requirements of Sections 13 (a) and 13 (b) have been satisfied),
Seller receives a bona fide offer to finance any Couriers subject
to lease agreements or rental agreements from another entity (the
"First Offeror"), Seller shall furnish to Buyer a notice
describing in detail the terms and conditions of such financing.
Buyer shall have the right to provide such financing in
accordance with the terms and conditions of the offer, which
right Buyer must exercise by giving Seller notice (the "Offer
Notice") within ten (10) business days after Buyer receives
Seller's notice. If Buyer fails to provide such financing in
accordance with the terms and conditions of the Offer Notice,
Seller shall have the right to obtain such financing from the
First Offeror; provided however, that if the terms and conditions
of the First Offeror's financing thereafter vary from that first
specified, Buyer shall have the right to match such revised offer
in accordance with the provisions of this Section.
14. PATENTS, COPYRIGHTS, TRADE SECRETS.
Seller shall defend, at its own expense, any action brought
against Buyer to the extent that such action is based on a claim
that the Equipment sold by Seller to Buyer infringes a patent,
copyright, trade secret or license, and Seller shall pay any
costs and damages awarded against Buyer in any such action which
are attributable to any such claim, with such defense and
payments conditioned upon the following: (i) Seller shall be
notified promptly in writing by or on behalf of Buyer of any
notice of such claim; (ii) Seller shall have sole control of the
defense of any such action on such claim and all negotiations for
its settlement or compromise, utilizing counsel reasonably
acceptable to Buyer; (iii) should the Equipment become, or in
Seller's reasonable opinion be likely to become, the
10
<PAGE>
subject of a claim of infringement of a patent, copyright, trade secret or
license, then Buyer, subject to the rights of the User as provided for in the
applicable User Agreement, shall permit Seller, at its option and expense,
either to procure for Buyer and User the right to continue using the
Equipment, or replace or modify the same (without altering the capability,
operation, marketability or value thereof) so that the Equipment becomes
noninfringing, or pay Buyer an amount equal to its unamortized investment
therein with interest thereon at the rate of 18% per annum plus Buyer's share
of any projected residual value for such Equipment.
15. ASSIGNMENT
(a) Buyer shall have the right to assign, or grant a security
interest with respect to, any or all of its interests under this
Agreement, and/or the Equipment, the Master Lease (in accordance
with the terms thereof) and any Schedules thereunder, the
Collateral Equipment, the User Agreements and the Collateral User
Agreements to one or more banks, other lending institutions or
financing companies (hereinafter the "Secured Party"), Seller
acknowledges that the Secured Party will, be acting in reliance
upon and entitled to the benefits of this Section 15.
Accordingly, Seller hereby agrees that Buyer may assign, pledge,
transfer or otherwise grant a security interest in any and all of
Buyer's rights and interests in and to the Equipment, the User
Leases, the Collateral Equipment or the Collateral User Leases
upon notice to, but without the consent of, Seller.
(b) In the event of the assignment, pledge, transfer,
disposition or grant of a security interest as set forth in
Section 15(a), Seller shall, after due notice thereof, (i)
promptly pay to the Secured Party when due, any payments due
under this Agreement or under the Master Lease; (ii) furnish such
documents as may reasonably be requested by the Secured Party in
connection with such assignment, pledge, transfer, disposition or
granting of security interest; and (iii) not require the Secured
Party to perform any of Buyer's obligations hereunder or under
the Master Lease. Notwithstanding such assignment, pledge,
transfer, disposition or grant of a security interest as set
forth in this Section, Buyer shall remain liable for the
performance of its obligations hereunder and under the Master
Lease.
(c) Seller shall not, without Buyer's prior written consent,
assign, pledge, transfer, dispose of or grant any security or
other interest in, any rights or interests that Seller may have
pursuant to this Agreement, nor shall Seller permit, without such
consent, any of the Equipment or Collateral Equipment to be used
by or made subject to any claim of any party other than a User
pursuant to a User Agreement or otherwise in accordance with this
Agreement.
11
<PAGE>
16. TERM.
The term of this Agreement shall commence on the date of this
Agreement and shall end (unless otherwise terminated in
accordance with the provisions of this Agreement) on (a) the date
that all of the Equipment has been sold or is no longer
generating revenue or (b) ten years from the date hereof,
whichever event occurs later.
17. BOOKS AND RECORDS; INSPECTION
(a) So long as this Agreement is in effect, Seller shall
maintain books and records pertaining to the Equipment,
Collateral Equipment, User Agreements and the Collateral User
Agreements and
its business in such detail, form and scope as Buyer shall
reasonably require. If at any time, Seller is no longer acting
as remarketing agent for Buyer with respect to the Equipment,
Seller shall promptly deliver to Buyer all such books and records
relating to the items set forth in the preceding sentence.
(b) Seller shall permit Buyer, or Buyer's representatives to
enter Seller's premises and those of any User (to the extent that
Seller is able to do so) at any time during normal business hours
upon at least 48 hours notice for the purpose of inspecting the
Equipment or Seller's books and records or those of a User. All
employees, accountants, and other agents engaged by Seller at any
time while this Agreement is in effect are hereby irrevocably
authorized and directed to exhibit and/or permit Buyer to make
abstracts from any of Seller's books and records pertaining to
the Equipment, the Users or this Agreement.
18. DEFAULT. The following events shall constitute defaults by
Seller:
(a) Any failure by Seller to observe or perform any of its
obligations hereunder or under any other agreement between Seller
and Buyer, including but not limited to the February 1997
Agreement and Schedules 06 and 07 to the Master Lease, which
failure continues for ten (10) days after written notice from
Buyer to Seller or any default under any other agreement between
Seller and Buyer which continues beyond any applicable cure
period;
(b) The breach of any representation or warranty made by
Seller to Buyer herein, provided such breach is not cured to
Buyer's satisfaction within fifteen (15) days after written
notice from Buyer to Seller of such breach;
(c) Seller's failure, within fifteen (15) days after Buyer's
request, to furnish any information Seller is required to furnish
under this Agreement or any other agreement with Buyer, or to
permit the inspection of Seller's books and records;
(d) The issuance of any injunction or attachment against
12
<PAGE>
Seller which shall not have been vacated, bonded or otherwise
ceased to continue in effect within thirty (30) days after the
date of entry thereof;
(e) The termination of the operation of Seller's present
business, the sale of all or substantially all of Seller's
assets, or the acquisition of Seller (including a merger in the
nature of an acquisition) by any other entity without Buyer's
prior written consent;
(f) The filing by or against Seller of any petition under any
provision of any Federal or State bankruptcy laws; provided
however, that if Seller notifies Buyer promptly after the filing
any involuntary petition, that Seller intends in good faith to
contest such petition, such filing shall not be deemed to be a
default hereunder unless Seller fails, within fifteen (15) days
after the filing of such petition, to file with the appropriate
court such documents as may be reasonably calculated to result in
the dismissal or withdrawal of such petition, or, if such
documents are filed, such petition is not dismissed, withdrawn or
otherwise eliminated within sixty (60) days after the filing of
such petition.
In the event of a default pursuant to the provisions of Sections
18 (a) through 18 (f), Buyer shall have the right, on three days
written notice to Seller, to terminate this Agreement and all
rights of Seller thereunder and to pursue such other legal
remedies as may be appropriate.
In the event of a breach by Buyer of its obligations hereunder,
which breach is not cured by Buyer within fifteen (15) days after
written notice thereof from Seller, Seller shall have the right,
upon twenty (20) days written notice to terminate this Agreement,
and to pursue such other legal remedies as may be appropriate.
19. MISCELLANEOUS.
(a) The terms and conditions herein contained constitute the
entire agreement between the parties with respect to the subject
matter hereof, except to the extent other agreements are referred
to herein or contemplated hereby, and supersede all previous
communications whether oral or written between Buyer and Seller
with respect to such subject matter, and no agreement or
understanding varying or extending any rights or obligations
hereunder of either party shall be binding unless in writing and
signed by a duly authorized officer or representative of the
party against which such variance is sought to be enforced.
(b) Any notices given under this Agreement shall be in writing
and deemed given when sent by overnight courier or by certified
mail, return receipt requested, to the addressees of the parties
set forth at the beginning of this Agreement, unless changed by
13
<PAGE>
notice as provided in this section.
(c) No waiver by either party of any of the terms and
conditions of this Agreement shall be effective unless such
waiver is signed and in writing.
(d) This Agreement may be executed in one or more counterparts
and each of such counterparts shall for all purposes be deemed to
be an original, but all such counterparts shall together
constitute but one and the same instrument.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
LEASING TECHNOLOGIES INTERNATIONAL, INC.
BUYER
[ILLEGIBLE] President
- ----------------------------------------------------------
By Title
HELPMATE ROBOTICS INC.
SELLER
[ILLEGIBLE] Asst. Treas.
- ----------------------------------------------------------
By Title
<PAGE>
Exhibit 10.79
EQUIPMENT SCHEDULE NO. 08 ("EQUIPMENT SCHEDULE")
TO
MASTER LEASE AGREEMENT DATED January 23, 1997 ("LEASE")
BETWEEN Leasing Technologies International, Inc. ("LESSOR")
AND HelpMate Robotics Inc. ("LESSEE")
1. EQUIPMENT:
Mfr./ Purchase Serial
Qty Description Vendor Price Number
--- ----------- ----- ------- ------
SEE EXHIBIT B ATTACHED HERETO AND MADE A PART HEREOF.
2. EQUIPMENT LOCATION: See Exhibit B attached hereto and made
a part hereof.
3. INSTALLATION DATE: N/A; Equipment previously installed. If
this space is not completed, the Installation Date shall be:
the date which the Vendor(s) determines to be the date of
installation, which, Lessee agrees, will not occur without
Lessor's prior written consent or the fifth day following
delivery of the Equipment to the location set forth in
Section 2, whichever is earlier; or in the case of Equipment
which is the subject of a sale and leaseback between Lessor
and Lessee, the date upon which Lessor obtains title to the
Equipment from Lessee (but not later than the date Lessor
pays for the Equipment).
4. COMMENCEMENT DATE: May 1, 1997 . (Subject to the terms and
conditions of Section 3 of the Lease, if all of the
Equipment is not installed on the same date).
5. INITIAL TERM: 32 months.
6. MONTHLY RENTAL: $ 10,528.00 . The Monthly Rental set forth
in this section is conditional upon Lessor acquiring the
Equipment at a purchase price of $270,000.00 based on an
8.50% Prime Interest Rate. Lessor and Lessee agree that the
Monthly Rental shall be increased by $31.00 for each
one-quarter of one percent (1/4 of 1%) by which the Prime
Interest Rate (as stated by Citibank N.A.) increases prior
to the Commencement Date, or the date Lessor has received
sufficient documentation so as to finance the Lease,
whichever is later. Lessee agrees that it shall confirm the
amount of the rental payable hereunder after adjustment, if
any, in such form as Lessor may request.
7. LESSOR'S OBLIGATIONS: Lessor's obligations under this
Equipment Schedule are subject to there being no tax
legislation enacted prior to the Installation Date which
would have an adverse effect on the rights or anticipated
benefits to Lessor or any Assignee.
8. SECURITY DEPOSIT: $ 0.00 .
Page 1 0f 2
<PAGE>
EQUIPMENT SCHEDULE NO. 08 ("EQUIPMENT SCHEDULE")
TO
MASTER LEASE AGREEMENT DATED January 23, 1997 ("LEASE")
BETWEEN Leasing Technologies International, Inc. ("LESSOR")
AND HelpMate Robotics Inc. ("LESSEE")
9. LEASE AGREEMENT: For purposes of this Equipment Schedule,
"May 5, 1997" is substituted for "dated concurrently" in
Section 13(b) of the Lease. All other terms, covenants and
conditions set forth in the Lease remain unchanged.
LESSOR: LESSEE:
Leasing Technologies International, Inc. HelpMate Robotics Inc.
BY:/s/F. Jared Sprole BY: /s/Marc D. Greenberg
------------------------------------- ---------------------------
NAME: F. Jared Sprole NAME: Marc D. Greenberg
----------------------------------- -------------------------
TITLE: President TITLE: Assistant Treasurer
--------------------------------- -------------------------
DATE: 5-5-97 DATE:
---------------------------------- --------------------------
This is Counterpart No. 3 of 3 executed Counterparts of this
-- --
Equipment Schedule. Counterpart No. 1 of this Equipment Schedule
shall constitute the only original executed counterpart of this
Equipment Schedule. For purposes of perfection of a security
interest in chattel paper by possession under the Connecticut
Uniform Commercial Code, (a) such Counterpart shall be deemed the
only original counterpart of this Equipment Schedule, and
transfer or possession of such Counterpart shall effect such
perfection, (b) transfer or possession of no other purported
Counterpart of this Equipment Schedule shall effect such
perfection and (c) transfer or possession of an original
counterpart of the Master Lease Agreement shall not be necessary
to effect such perfection.
Page 2 of 2
<PAGE>
EQUIPMENT SCHEDULE NO. 08
TO
MASTER LEASE AGREEMENT DATED January 23, 1997
EXHIBIT A
STATEMENT OF CASUALTY VALUES
Monthly Stipulated Monthly Stipulated Loss
Pmt. Made Value* Pmts. Made Value*
---------- ----------- ---------- ----------------
1 120.00 17 88.00
2 118.00 18 86.00
3 116.00 19 84.00
4 114.00 20 82.00
5 112.00 21 80.00
6 110.00 22 78.00
7 108.00 23 76.00
8 106.00 24 74.00
9 104.00 25 72.00
10 102.00 26 70.00
11 100.00 27 68.00
12 98.00 28 66.00
13 96.00 29 64.00
14 94.00 30 62.00
15 92.00 31 60.00
16 90.00 32 58.00
* Expressed as a percentage of Lessor's original purchase price for the
equipment.
LESSOR: LESSEE:
Leasing Technologies International, Inc. HelpMate Robotics Inc.
BY:/s/F. Jared Sprole BY:/s/Marc D. Greenberg
-------------------------------------- -----------------------
NAME: F. Jared Sprole NAME:
------------------------------------ ---------------------
TITLE: President TITLE:
----------------------------------- --------------------
DATE: 5-5-97 DATE:
------------------------------------ --------------------
<PAGE>
EQUIPMENT SCHEDULE NO. 09 ("EQUIPMENT SCHEDULE")
TO
MASTER LEASE AGREEMENT DATED January 23, 1997 ("LEASE")
BETWEEN Leasing Technologies International, Inc. ("LESSOR")
AND HelpMate Robotics Inc. ("LESSEE")
1. EQUIPMENT:
Mfr./ Purchase Serial
Qty Description Vendor Price Number
--- ----------- ----- --------- ------
SEE EXHIBIT B ATTACHED HERETO AND MADE A PART HEREOF.
2. EQUIPMENT LOCATION: See Exhibit B attached hereto and made
a part hereof.
3. INSTALLATION DATE: N/A; Equipment previously installed. If
this space is not completed, the Installation Date shall be:
the date which the Vendor(s) determines to be the date of
installation, which, Lessee agrees, will not occur without
Lessor's prior written consent or the fifth day following
delivery of the Equipment to the location set forth in
Section 2, whichever is earlier; or in the case of Equipment
which is the subject of a sale and leaseback between Lessor
and Lessee, the date upon which Lessor obtains title to the
Equipment from Lessee (but not later than the date Lessor
pays for the Equipment).
4. COMMENCEMENT DATE: May 1, 1997 . (Subject to the terms and
conditions of Section 3 of the Lease, if all of the
Equipment is not installed on the same date).
5. INITIAL TERM: 32 months.
6. MONTHLY RENTAL: $ 10,528.00 . The Monthly Rental set forth
in this section is conditional upon Lessor acquiring the
Equipment at a purchase price of $270,000.00 based on an
8.50% Prime Interest Rate. Lessor and Lessee agree that the
Monthly Rental shall be increased by $31.00 for each
one-quarter of one percent (1/4 of 1%) by which the Prime
Interest Rate (as stated by Citibank N.A.) increases prior
to the Commencement Date, or the date Lessor has received
sufficient documentation so as to finance the Lease,
whichever is later. Lessee agrees that it shall confirm the
amount of the rental payable hereunder after adjustment, if
any, in such form as Lessor may request.
7. LESSOR'S OBLIGATIONS: Lessor's obligations under this
Equipment Schedule are subject to there being no tax
legislation enacted prior to the Installation Date which
would have an adverse effect on the rights or anticipated
benefits to Lessor or any Assignee.
8. SECURITY DEPOSIT: $ 0.00 .
Page 1 of 2
<PAGE>
EQUIPMENT SCHEDULE NO. 09 ("EQUIPMENT SCHEDULE")
TO
MASTER LEASE AGREEMENT DATED January 23, 1997 ("LEASE")
BETWEEN Leasing Technologies International, Inc. ("LESSOR")
AND HelpMate Robotics Inc. ("LESSEE")
9. LEASE AGREEMENT: For purposes of this Equipment Schedule,
"May 7, 1997" is substituted for "dated concurrently" in
Section 13(b) of the Lease. All other terms, covenants and
conditions set forth in the Lease remain unchanged.
LESSOR: LESSEE:
Leasing Technologies International, Inc. HelpMate Robotics Inc.
BY:/s/F. Jared Sprole BY:/s/Marc D. Greenberg
-------------------------------------- ------------------------
NAME: F. Jared Sprole NAME: Marc D. Greenberg
------------------------------------ ------------------------
TITLE: President TITLE: Assistant Treasurer
---------------------------------- ------------------------
DATE: 5-5-97 DATE: 5-5-97
----------------------------------- ------------------------
This is Counterpart No. 3 of 3 executed Counterparts of this
-- --
Equipment Schedule. Counterpart No. 1 of this Equipment Schedule
shall constitute the only original executed counterpart of this
Equipment Schedule. For purposes of perfection of a security
interest in chattel paper by possession under the Connecticut
Uniform Commercial Code, (a) such Counterpart shall be deemed the
only original counterpart of this Equipment Schedule, and
transfer or possession of such Counterpart shall effect such
perfection, (b) transfer or possession of no other purported
Counterpart of this Equipment Schedule shall effect such
perfection and (c) transfer or possession of an original
counterpart of the Master Lease Agreement shall not be necessary
to effect such perfection.
Page 2 of 2
<PAGE>
EQUIPMENT SCHEDULE NO. 09
TO
MASTER LEASE AGREEMENT DATED January 23, 1997
EXHIBIT A
STATEMENT OF CASUALTY VALUES
Monthly Stipulated Monthly Stipulated Loss
Pmt. Made Value* Pmts. Made Value*
--------- ---------- ---------- ---------------
1 120.00 17 88.00
2 118.00 18 86.00
3 116.00 19 84.00
4 114.00 20 82.00
5 112.00 21 80.00
6 110.00 22 78.00
7 108.00 23 76.00
8 106.00 24 74.00
9 104.00 25 72.00
10 102.00 26 70.00
11 100.00 27 68.00
12 98.00 28 66.00
13 96.00 29 64.00
14 94.00 30 62.00
15 92.00 31 60.00
16 90.00 32 58.00
* Expressed as a percentage of Lessor's original purchase price
for the equipment.
LESSOR: LESSEE:
Leasing Technologies International, Inc. HelpMate Robotics Inc.
BY:/s/F. Jared Sprole BY:/s/Marc D. Greenberg
------------------------------------- ----------------------------
NAME: F. Jared Sprole NAME: Marc D. Greenberg
----------------------------------- ----------------------------
TITLE: President TITLE:
---------------------------------- -------------------------
DATE: 5-5-97 DATE: 5-5-97
----------------------------------- -------------------------
<PAGE>
EQUIPMENT SCHEDULE NO. 10 ("EQUIPMENT SCHEDULE")
TO
MASTER LEASE AGREEMENT DATED January 23, 1997 ("LEASE")
BETWEEN Leasing Technologies International, Inc. ("LESSOR")
AND HelpMate Robotics Inc. ("LESSEE")
1. EQUIPMENT:
Mfr./ Purchase Serial
Qty Description Vendor Price Number
--- ----------- ------ -------- ------
SEE EXHIBIT B ATTACHED HERETO AND MADE A PART HEREOF.
2. EQUIPMENT LOCATION: See Exhibit B attached hereto and made
a part hereof.
3. INSTALLATION DATE: N/A; Equipment previously installed. If
this space is not completed, the Installation Date shall be:
the date which the Vendor(s) determines to be the date of
installation, which, Lessee agrees, will not occur without
Lessor's prior written consent or the fifth day following
delivery of the Equipment to the location set forth in
Section 2, whichever is earlier; or in the case of Equipment
which is the subject of a sale and leaseback between Lessor
and Lessee, the date upon which Lessor obtains title to the
Equipment from Lessee (but not later than the date Lessor
pays for the Equipment).
4. COMMENCEMENT DATE: May 1, 1997 . (Subject to the terms and
conditions of Section 3 of the Lease, if all of the
Equipment is not installed on the same date).
5. INITIAL TERM: 32 months.
6. MONTHLY RENTAL: $ 10,528.00 . The Monthly Rental set forth
in this section is conditional upon Lessor acquiring the
Equipment at a purchase price of $270,000.00 based on an
8.50% Prime Interest Rate. Lessor and Lessee agree that the
Monthly Rental shall be increased by $31.00 for each
one-quarter of one percent (1/4 of 1%) by which the Prime
Interest Rate (as stated by Citibank N.A.) increases prior
to the Commencement Date, or the date Lessor has received
sufficient documentation so as to finance the Lease,
whichever is later. Lessee agrees that it shall confirm the
amount of the rental payable hereunder after adjustment, if
any, in such form as Lessor may request.
7. LESSOR'S OBLIGATIONS: Lessor's obligations under this
Equipment Schedule are subject to there being no tax
legislation enacted prior to the Installation Date which
would have an adverse effect on the rights or anticipated
benefits to Lessor or any Assignee.
8. SECURITY DEPOSIT: $ 0.00 .
page 1 of 2
<PAGE>
EQUIPMENT SCHEDULE NO. 10 ("EQUIPMENT SCHEDULE")
TO
MASTER LEASE AGREEMENT DATED January 23, 1997 ("LEASE")
BETWEEN Leasing Technologies International, Inc. ("LESSOR")
AND HelpMate Robotics Inc. ("LESSEE")
9. LEASE AGREEMENT: For purposes of this Equipment Schedule,
"May 7, 1997" is substituted for "dated concurrently" in
Section 13(b) of the Lease. All other terms, covenants and
conditions set forth in the Lease remain unchanged.
LESSOR: LESSEE:
Leasing Technologies International, Inc. HelpMate Robotics Inc.
BY:/s/F. Jared Sprole BY:/s/Marc D. Greenberg
------------------------------------ -----------------------------
NAME: F. Jared Sprole NAME: Marc D. Greenberg
---------------------------------- ---------------------------
TITLE: President TITLE: Assistant Treasurer
---------------------------------- ----------------------------
DATE: 5-5-97 DATE: 5-5-97
----------------------------------- ----------------------------
This is Counterpart No. 3 of 3 executed Counterparts of this
--- ---
Equipment Schedule. Counterpart No. 1 of this Equipment Schedule
shall constitute the only original executed counterpart of this
Equipment Schedule. For purposes of perfection of a security
interest in chattel paper by possession under the Connecticut
Uniform Commercial Code, (a) such Counterpart shall be deemed the
only original counterpart of this Equipment Schedule, and
transfer or possession of such Counterpart shall effect such
perfection, (b) transfer or possession of no other purported
Counterpart of this Equipment Schedule shall effect such
perfection and (c) transfer or possession of an original
counterpart of the Master Lease Agreement shall not be necessary
to effect such perfection.
Page 2 of 2
<PAGE>
EQUIPMENT SCHEDULE NO. 10
TO
MASTER LEASE AGREEMENT DATED January 23, 1997
EXHIBIT A
STATEMENT OF CASUALTY VALUES
Monthly Stipulated Monthly Stipulated Loss
Pmt. Made Value* Pmts. Made Value*
---------- ---------- ----------- ---------------
1 120.00 17 88.00
2 118.00 18 86.00
3 116.00 19 84.00
4 114.00 20 82.00
5 112.00 21 80.00
6 110.00 22 78.00
7 108.00 23 76.00
8 106.00 24 74.00
9 104.00 25 72.00
10 102.00 26 70.00
11 100.00 27 68.00
12 98.00 28 66.00
13 96.00 29 64.00
14 94.00 30 62.00
15 92.00 31 60.00
16 90.00 32 58.00
* Expressed as a percentage of Lessor's original purchase price
for the equipment.
LESSOR: LESSEE:
Leasing Technologies International, Inc. HelpMate Robotics Inc.
BY:/s/F. Jared Sprole BY:/s/Marc D. Greenberg
------------------------------------- ----------------------------
NAME: F. Jared Sprole NAME:
----------------------------------- ----------------------------
TITLE: President TITLE:
---------------------------------- ----------------------------
DATE: 5-5-97 DATE: 5-5-97
----------------------------------- --------------------------
<PAGE>
Exhibit 10.80
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY
NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
WARRANT TO PURCHASE A MAXIMUM OF
98,182 SHARES OF COMMON STOCK OF
HELPMATE ROBOTICS INC.
(Void after May 4, 2006)
This certifies that Leasing Technologies International, Inc., its
nominees, successors or assigns (the "Holder"), for value received, is
entitled to purchase from HelpMate Robotics Inc., a Connecticut corporation
(the "Company"), a maximum of 98,182 fully paid and nonassessable shares of
the Company's Common Stock ("Common Stock") for cash at a price of $1.2375
per share (the "Stock Purchase Price") at any time or from time to time up to
and including 5:00 p.m. (Eastern time) on May 6, 2006, (the "Expiration
Date"), upon surrender to the Company at its principal office at Shelter Rock
Lane, Danbury, CT 06810-8159 (or at such other location as the Company may
advise Holder in writing) of this Warrant properly endorsed with the Form of
Subscription attached hereto duly filled in and signed and upon payment in
cash or by check of the aggregate Stock Purchase Price for the number of
shares for which this Warrant is being exercised determined in accordance
with the provisions hereof. The Stock Purchase Price and the number of shares
purchasable hereunder are subject to adjustment as provided in Section 3 of
this Warrant.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment of Shares. (a) Unless an
election is made pursuant to clause (b) of this Section 1, this Warrant is
exercisable at the option of the Holder of record hereof, at any time or from
time to time, up to the Expiration Date for all and any part of the shares of
Common Stock (but not for a fraction of a share) which may be purchased
hereunder, for the Stock Purchase Price multiplied by the number of shares to
be purchased. The Company agrees that the shares of Common Stock purchased
under this Warrant shall be and are deemed to be issued to the Holder hereof
as the record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered and payment made for such
shares. Certificates for the shares of Common Stock so purchased, together
with any other securities or property to which the Holder hereof is entitled
upon such exercise, shall be delivered to the Holder hereof by the Company at
the Company's expense within a reasonable time after the rights represented
by this Warrant have been so exercised. Except as provided in clause (b) of
this Section 1, in case of a purchase of less than all the shares which may
be purchased under this Warrant, the Company shall cancel this Warrant and
execute and deliver a new Warrant or Warrants of like tenor for the balance
of the shares purchasable under the Warrant surrendered upon such purchase to
the Holder hereof within a reasonable time. Each stock certificate so
delivered shall be in such denominations of Common Stock as may be requested
by the Holder hereof and
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shall be registered in the name of such Holder or such other name as shall be
designated by such Holder.
(b) The Holder, in lieu of exercising this Warrant by the payment of
the Stock Purchase Price pursuant to clause (a) of this Section 1, may elect,
at any time on or before the Expiration Date, to receive that number of
shares of Common Stock equal to the quotient of: (i) the difference between
(A) the Per Share Price (as hereinafter defined) of the Common Stock, less
(B) the Stock Purchase Price then in effect, multiplied by the number of
shares of Common Stock the Holder would otherwise have been entitled to
purchase hereunder pursuant to clause (a) of this Section 1 (or such lesser
number of shares as the Holder may designate in the case of a partial
exercise of this Warrant) over (ii) the Per Share Price.
(c) For purposes of clause (b) of this Section 1, "Per Share Price"
means the greater of (A) the average of the closing bid and asked prices of
the Company's Common Stock as quoted by NASDAQ or listed on any exchange,
whichever is applicable, as published in the Western Edition of The Wall
Street Journal for the ten (10) trading days prior to the date of the
Holder's election hereunder or if applicable, (B) the gross sales price of
one share of the Company's Common Stock pursuant to a registered public
offering or that amount which shareholders of the Company will receive for
each share of Common Stock pursuant to a registered public offering or that
amount which shareholders of the Company will receive for each share of
Common Stock pursuant to a merger, reorganization or sale of assets. If the
Company's Common Stock is not quoted by NASDAQ or listed on an exchange, the
Per Share Price of the Common Stock shall be determined in good faith by the
Company's Board of Directors.
2. Shares to be Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares of Common Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable and free
from all preemptive rights of any shareholder and free of all taxes, liens
and charges with respect to the issue thereof. The Company further covenants
and agrees that during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issue or transfer upon exercise of the
subscription rights evidenced by this Warrant, a sufficient number of shares
of authorized but unissued Common Stock, or other securities and property,
when and as required to provide for the exercise of the rights represented by
this Warrant. The Company will take all such action as may be necessary to
assure that such shares of Common Stock may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements
of any domestic securities exchange upon which the Common Stock may be
listed. The Company will not take any action which would result in any
adjustment (pursuant to Section 3 hereof) of the Stock Purchase Price if the
total number of shares of Common Stock issuable after such action, together
with all shares of Common Stock then outstanding and then issuable upon
exercise of all options and upon the conversion of all convertible securities
then outstanding, would exceed the total number of shares of Common Stock
then authorized by the Company's Articles of Incorporation.
3. Adjustment of Stock Purchase Price and Number of Shares. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time upon the occurrence of
certain events described in this Section 3. Upon each
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adjustment of the Stock Purchase Price, the Holder of this Warrant shall
thereafter be entitled to purchase, at the Stock Purchase Price resulting
from such adjustment, the number of shares obtained by multiplying the Stock
Purchase Price in effect immediately prior to such adjustment by the number
of shares purchasable pursuant hereto immediately prior to such adjustment,
and dividing the product thereof by the Stock Purchase Price resulting from
such adjustment.
3.1 Subdivision or Combination of Stock. In case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Stock Purchase Price in effect immediately
prior to such subdivision shall be proportionately reduced, and conversely,
in case the outstanding shares of Common Stock of the Company shall be
combined into a smaller number of shares, the Stock Purchase Price in effect
immediately prior to such combination shall be proportionately increased.
3.2 Dividends in Common Stock, Other Stock, Property,
Reclassification. If at any time or from time to time the holders of Common
Stock (or any shares of Stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to
receive, without payment therefor,
(a) Common Stock or any shares of stock or other securities which
are at any time directly or indirectly convertible into or exchangeable for
Common Stock, or any rights or options to subscribe for, purchase or
otherwise acquire any of the foregoing by way of dividend or other
distribution,
(b) any cash paid or payable otherwise than as a cash dividend at
a rate which is substantially consistent with past practice (or in the case
of an initial dividend, at a rate which is substantially consistent with
industry practice), or
(c) Common Stock or other or additional stock or other securities
or property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares
of Common Stock issued as a stock split, adjustments in respect of which
shall be covered by the terms of Section 3.1 above), then and in each such
case, the Holder hereof shall, upon the exercise of this Warrant, be entitled
to receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefore, the
amount of stock and other securities and property (including cash in the
cases referred to in clauses (b) and (c) above) which such Holder would hold
on the date of such exercise had he been the holder of record of such Common
Stock as of the date on which holders of Common Stock received or became
entitled to receive such shares and/or all other additional stock and other
securities and property.
3.3 Reorganization, Reclassification, Consolidation, or Merger.
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale
of all or substantially all of its assets to another corporation shall be
effected in such a way that holders of Common Stock shall be entitled to
receive stock, securities or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger of sale, lawful and adequate provisions shall be made
whereby the Holder hereof shall thereafter have the right to purchase and
receive (in lieu
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of the shares of the Common Stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented
hereby) such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented hereby. In any such case, appropriate provision shall be made
with respect to the rights and interests of the Holder of this Warrant to the
end that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares
purchasable and receivable upon the exercise of this Warrant) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise hereof.
The Company will not effect any such consolidation, merger or sale unless,
prior to the consummation thereof, the successor corporation (if other than
the Company) resulting from such consolidation or the corporation purchasing
such assets shall assume by written instrument, executed and mailed or
delivered to the registered Holder hereof at the last address of such Holder
appearing on the books of the Company, the obligation to deliver to such
Holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such Holder may be entitled to purchase.
3.4 Sale or Issuance Below Purchase Price. If the Company shall
at any time or from time to time issue or sell any of its Common Stock,
Preferred Stock, or any other securities convertible into Common Stock, for a
consideration per share less than the Stock Purchase Price in effect
immediately prior to the time of such issue or sale, the Stock Purchase Price
then in effect and then applicable for any subsequent period or periods shall
be adjusted to a price determined by multiplying the Stock Purchase Price by
a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to such issue or sale plus the number of
shares of Common Stock that the aggregate consideration received or to be
received on the full exercise or conversion into Common Stock by the Company
for such issue or sale would purchase the current Stock Purchase Price; and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to the issue or sale plus the number of shares
of Common Stock (on an as converted basis) issued or to be issued on the full
exercise or conversion into Common Stock. For purposes of this Section 3.4,
all shares of Common Stock issuable upon the exercise and/or conversion of
all outstanding warrants (including this Warrant), options and convertible
securities shall be deemed to be outstanding. The foregoing notwithstanding,
no adjustment shall be made pursuant to this Section 3.4 on account of a
given issue or sale to the extent that the Stock Purchase Price is adjusted
pursuant to any other Section of this Warrant.
3.5 Notice of Adjustment. Upon any adjustment of the Stock
Purchase Price, and/or any increase or decrease in the number of shares
purchasable upon the exercise of this Warrant, the Company shall give written
notice thereof, by first class mail, postage prepaid, addressed to the
registered Holder of this Warrant at the address of such Holder as shown on
the books of the Company. The notice shall be signed by the Company's chief
financial officer and shall state the Stock Purchase Price resulting from
such adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
3.6 Other Notices. If at any time:
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(a) the Company shall declare any cash dividend upon its Common
Stock;
(b) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;
(c) the Company shall offer for subscription pro-rata to the
holders of its Common Stock any additional shares of stock of any class or
other rights;
(d) there shall be any capital reorganization or reclassification
of the capital stock of the Company, or consolidation or merger of the
Company with, or sale of all or substantially all of its assets to, another
corporation; or
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
(f) the Company shall take or propose to take any other action,
notice of which is actually provided to (or is required to be provided,
pursuant to any written agreement,) to holders of Common Stock;
then, in any one or more of said cases, the Company shall give, by first
class mail, postage prepaid, addressed to the Holder of this Warrant at the
address of such Holder as shown of the books of the Company, (i) at least 10
days prior written notice of the date on which the books of the Company shall
close or a record shall be taken for such dividends, distribution or
subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, at least 20 days written notice of the date when the same shall
take place. Any notice given in accordance with the foregoing clause (i)
shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto. Any notice given in accordance with the foregoing clause
(ii) shall also specify the date on which the holders of Common Stock shall
be entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, as the case may be.
3.7 Certain Events. If any change in the outstanding Common Stock
of the Company or any other event occurs as to which the other provisions of
this Section 3 are not strictly applicable or if strictly applicable would
not fairly protect the purchase rights of the Holder of the Warrant in
accordance with the essential intent and principles of such provisions, then
the Board of Directors of the Company shall make an adjustment in the number
and class of shares available under the Warrant, the Stock Purchase Price
and/or the application of such provisions, in accordance with such essential
intent and principles, so as to protect such purchase rights as aforesaid.
The adjustment shall be such as will give the Holder of the Warrant upon
exercise for the same aggregate Stock Purchase Price the total number, class
and kind of shares as he would have owned had the Warrant been exercised
prior to the event and had he continued to hold such shares until after the
event requiring adjustment.
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4. Issue Tax. The issuance of certificates for shares of Common Stock
upon the exercise of the Warrant shall be made without charge of the Holder
of the Warrant for any issue tax in respect thereof; provided, however, that
the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the Holder of the Warrant being
exercised.
5. Closing of Books. The Company will at no time close its transfer
books against the transfer of any Warrant or of any shares of Common Stock
issued or issuable upon the exercise of any Warrant in any manner which
interferes with the timely exercise of this Warrant.
6. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder
in respect of meetings of shareholders for the election of directors of the
Company or any other matters or any rights whatsoever as a shareholder of the
Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
holder to purchase shares of Common Stock, and no mere enumeration herein of
the rights or privileges of the Holder hereof, shall give rise to any
liability of such Holder for the Stock Purchase Price or as a shareholder of
the Company, whether such liability is asserted by the Company or by its
creditors.
7. Registration Rights
7.1 Certain Definitions. As used in this Section 7, the following
terms shall have the following meanings:
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act.
"Holder" shall mean any holder of the Warrant or of
Registrable Securities as hereinafter defined.
The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness
of such registration statement.
"Registrable Securities" shall mean (i) shares of Common
Stock issued or issuable upon exercise of the Warrant and (ii) any Common
Stock issued in respect of such securities upon any stock split, stock
dividend, recapitalization or similar event.
"Registration Expenses" shall mean all expenses
incurred by the Company in compliance with Section 7.2 hereof,
including, without limitation, all registration and filing fees,
printing expenses, fees and disbursement of counsel for the
Company, blue sky fees and expenses,
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and the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company and expenses of regular annual and periodic audits, which shall be
paid in any event by the Company) and the expenses associated with the
Company's obligations under Section 7.4 hereof.
"Restricted Securities" shall refer collectively to the
securities of the Company required to bear the legend set forth in Section
8.2 hereof.
"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 all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursement of counsel for any Holder.
7.2 Piggyback Registration Rights.
(a) If the Company shall determine to register any of its
securities either for its own account or the account of any security holder
or holders, other than a registration relating solely to employee benefit
plans, the Company will:
(i) Promptly give to each Holder written notice thereof; and
(ii) Except as set forth in Section 7.2 (b), include in such
registration (and any related qualification under state blue sky laws and
other compliance filings, and in any underwriting involved therein), all the
Registrable Securities specified in a written request or requests, given by
any Holder within 15 days after the written notice from the Company is given.
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as part of the written notice given pursuant to Section
7.2 (a) (i). In such event the right of any Holder to registration pursuant
to Section 8.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with
the Company and the other persons distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected or approved for underwriting by the
Company. Notwithstanding any other provision of this Section 7.2 (b), if the
underwriter determines that the marketing factors require a limitation of the
number of securities to be underwritten, the underwriter may (subject to the
allocation priority set forth below) exclude some or all of the Holder's
securities from such registration and underwriting. In such event, the
Company shall so advise the Holder and all other holders of securities
requesting piggyback registration who are entitled by contract with the
Company to have securities included in a registration of the Company's
securities (the Other Shareholders") of such limitation, and the number of
shares of securities that are entitled to be included in the registration and
underwriting shall be allocated in the following manner: (1) first,
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all securities which the Company or the holder who has exercised demand
registration rights desires to sell shall be included; and (2) next, the
number of securities which, in the opinion of the underwriter, can be
included in the registration and underwriting on behalf of the Holder and the
Other Shareholders, shall be included, allocated pro rata among the Holder
and the Other Shareholders, as nearly as practicable, on the basis of the
number of securities of the Holder and the Other Shareholders requested to be
included therein. If any Holder of Registrable Securities or any officer,
director or other security holder requesting registration disapproves of the
terms of any such underwriting, such person may elect to withdraw therefrom
by written notice to the Company and the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
7.3 Expenses of Registration. All Registration Expenses incurred
on behalf of Holders in connection with any registration, qualification or
compliance pursuant to this Section 7 shall be borne by the Company, and all
Selling Expenses shall be borne by the Holders of the securities so
registered pro rata on the basis of the number of their shares so registered.
7.4 Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 7, the Company will advise
each Holder in writing as to the initiation of each registration and as to
the completion thereof. The Company will:
(a) Keep such registration effective for a period of 120 days or
until the Holder or Holders have completed the distribution described in the
registration statement relating thereto, whichever first occurs; and
(b) Furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request.
7.5 Indemnification.
(a) The Company will indemnify each Holder, each of
its officers, directors, and partners, and each person
controlling such Holder, with respect to which registration,
qualification or compliance has been effected pursuant to this
Section 7, and each underwriter, if any, and each person who
controls any underwriter, 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 prospectus, offering circular or
other 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 any violation by the Company of the Securities Act
or any rule or regulation thereunder applicable to the Company
and relating to action or inaction required of the Company in
connection with any such registration, qualification or
compliance. The Company will reimburse each such Holder, each of
its officers, directors and partners, and each person controlling
such Holder, each such underwriter and each person who controls
any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action;
provided, however, 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 (i) any untrue
statement or
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omission based upon written information furnished to the Company by such
Holder or underwriter and stated to be specifically for use therein, or (ii)
any failure by any such Holder or underwriter or comply with the prospectus
delivery requirements of the Securities Act.
(b) Each Holder and other security holder will, if Registrable
Securities held by him are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers and each underwriter, if any, of
the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of the
Securities Act and the rules and regulations thereunder, each other such
Holder and other security holder and each of their officers, directors and
partners, and each person controlling such Holder or other security holder,
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 necessary to make the statements
made therein not misleading. Each Holder and other security holder will, if
Registrable Securities held by him are included in the securities as to which
such registration, qualification or compliance is being affected, reimburse
the Company and such Holders, other security holders, directors, officers,
partners, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending
any such claim, loss, damage, liability or action. The obligation to
indemnify and reimburse assumed under this Section 7.5 (b) shall be limited
to an untrue statement (or alleged untrue statement) or omission (or alleged
omission) 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 such Holder or other security holder (as the case
may be) and stated to be specifically for use therein; provided, however,
that the obligations of such Holders and other security holders hereunder
shall be limited to an amount equal to the proceeds to each such Holder or
other security holder (as the case may be) of securities sold as contemplated
herein.
(c) Each party entitled to indemnification under this Section 7.5
(the "Indemnified party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party's expense, and provided
further that the failure of any Indemnifying Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 7.5 No Indemnified Party, in the defense of any such claim of
litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect to such
claim or litigation.
7.6 Information by Holder. Each Holder of Registrable
Securities, and each person holding securities included in any
registration, shall furnish to the Company such information
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regarding such Holder or other person as the Company may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Section 7.
7.7 Limitations on Registration of Issues of Securities. From and
after the date of this Warrant, 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 the right to require the
Company to register any securities of the Company unless such agreement
specifically provides that, in the case of any registration initiated by such
holders, the Holders shall have the right to participate in such registration
to the extent and in the manner specified in Section 7.2 hereof.
7.8 Rule 144 Reporting. With a view of making available the
benefits of certain rules and regulations of the Commission which may permit
the sale of the Restricted Securities to the public without registration, the
Company agrees to:
(a) Use its best efforts to make and keep public information
available as those terms are understood and defined in Rule 144 under the
Securities Act, at all time from and after 90 days following the effective
date of the first registration under the Securities Act file by the Company
for an offering of its securities of the general public;
(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 Securities Exchange Act of 1934, as amended (the
"Exchange Act") at any time during which it is subject to such reporting
requirements; and
(c) So long as a Holder owns any Restricted Securities, furnish to
the Holder forthwith upon request a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 (at any time from
and after 90 days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the
general public), and of the Securities Act and the Exchange Act (at any time
during which it is subject to such reporting requirements), a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents so filed as a Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing a Holder to sell any
such securities without registration.
7.9 Transfer of Registration Rights. The rights to cause the
Company to register securities granted by the Company under Section 7.2 may
be assigned by any Holder to transferees or assignees of Restricted
Securities, who after such assignment or transfer hold at least 10% of such
Holder's Restricted Securities; provided, however, that the Company is given
written notice at the time of or within a reasonable time after said
transfer, stating the name and address of said transferees or assignees and
identifying the securities with respect to which such registration rights are
being assigned; and, provided, further, that the transferees or assignees of
such rights assume the obligations of such Holder under this Section 7. The
foregoing requirement as to the minimum percentage of shares to be
transferred or assigned in connection with any assignment of registration
rights shall not apply to an assignment by a Holder to any person or entity
which is affiliated with such Holder.
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7.10 Intentionally omitted.
7.11 Termination of Registration Rights. The right to cause the
Company to register securities granted by the Company under Section 7.2 shall
terminate with respect to any Holder at such time as all of the Registrable
Securities of such Holder can be sold (in a single transaction) in accordance
with Rule 144 of the Commission.
8. Restrictions on Transferability of Securities; Compliance with
Securities Act.
8.1 Restrictions on Transferability. The Warrant and the Common
Stock shall not be transferable except upon the conditions specified in this
Section 8, which conditions are intended to insure compliance with the
provisions of the Securities Act or, to assist in an orderly distribution.
Each Holder of this Warrant or the Common Stock issuable hereunder will cause
any proposed transferees of the Warrant or Common Stock to agree to take and
hold such securities subject to provisions and upon the conditions specified
in this Section 9.
8.2 Restrictive Legend. Each certificate representing (i) this
Warrant, (ii) the Common Stock, (iii) any other securities issued in respect
of the Common Stock or Common Stock issued upon conversion of the Common
Stock upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of Section 8.3 below or unless such securities have been
registered under the Securities Act or sold under Rule 144) be stamped or
otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.
8.3 Restrictions on Transfer. The Holder of this Warrant and each
person to whom this Warrant is subsequently transferred represents and
warrants to the Company (by acceptance of such transfer) that it will not
transfer the statement under the Securities Act was in effect with respect to
such securities at the time of issuance thereof except pursuant to (i)an
effective registration statement under the Securities Act, (ii) Rule 144
under the Securities Act (or any other rule under the Securities Act relating
to the disposition of securities), or (iii) an opinion of counsel, reasonably
satisfactory to counsel for the Company, that an exemption from such
registration is available.
9. Warrants Transferable. Subject to the provisions of
Section 8, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the Holder
hereof (except for transfer taxes), upon surrender of this
Warrant properly endorsed. Each taker and Holder of this
Warrant, when endorsed in blank, shall be deemed negotiable, and
that the Holder hereof, when this Warrant shall have been so
endorsed, may be treated by the Company and all other persons
dealing
11
<PAGE>
with this Warrant as the absolute owner hereof for any purpose and as the
person entitled to exercise the right represented by this Warrant, or to the
transfer hereof on the books of the Company any notice to the contrary
notwithstanding; but until such transfer on such books, the Company may treat
the registered owner hereof as the owner for all purposes.
10. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, of the Holder of this Warrant and of the holder
of shares of Common Stock issued upon exercise of this Warrant, contained in
Sections 7, 8, and 9 shall survive the exercise of this Warrant.
11. Modification and Waiver. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
12. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall
be delivered or shall be sent by certified or registered mail, postage
prepaid, to each such Holder at its address as shown on the books of the
Company or to the Company at the address indicated therefor in the first
paragraph of this Warrant.
13. Binding Effect on Successors. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets. All of the
obligations of the Company relating to the Common Stock issuable upon the
exercise of this Warrant shall survive the exercise and termination of this
Warrant. All of the covenants and agreements of the Company shall inure to
the benefit of the successors and assign of the Holder hereof. The Company
will, at the time of the exercise of this Warrant, in whole or in part, upon
request of the Holder hereof but at the Company's expense, acknowledge in
writing its continuing obligation to the Holder hereof in respect of any
rights (including, without limitation, any right to registration of the
shares of Common Stock) to which the Holder hereof shall continue to be
entitled after such exercise in accordance with this Warrant; provided, that
the failure of the Holder hereof to make any such request shall not affect
the continuing obligation of the Company to the Holder hereof in respect of
such rights.
14. Descriptive Headings and Governing Law. The descriptive headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of Connecticut.
15. Lost Warrants of Stock Certificates. The Company represents and
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant or stock certificate and, in the case of any such loss, theft,
destruction, or mutilation of any Warrant or stock certificate and, in the
case of any such loss, theft or Company, or in the case of any such
mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company at its expense will make and deliver a new Warrant
or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed
or mutilated Warrant or stock certificate.
12
<PAGE>
16. Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any
fractional share, pay the Holder entitled to such fraction a sum in cash
equal to such fraction multiplied by the then effective Stock Purchase Price.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto daily authorized this 7th day of May,
1997.
HelpMate Robotics Inc.
By:/s/Marc D. Greenberg
-------------------------
Title: Assistant Treasurer
----------------------
13
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To:
---------------------------------
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, (1) ( ) shares of Common Stock of
------------- ------- --
and herewith makes payment of Dollars
- ------- ------------------------------
($ ) therefore, and requests that the certificates for such shares
--------------
be issued in the name of, and delivered to, ,
------------------------------
whose address is .
------------------------------------------------------------
The undersigned represent that it is acquiring such Common Stock for its
own account for investment and not with a view to or sale in connection with
any distribution thereof (subject, however, to any requirement of law that
the disposition thereof shall at all times be within its control).
DATED:
-------------------
------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
------------------------------
------------------------------
(Address)
- --------------
(1) Insert here the number of shares called for on the face of the
Warrant (or, in the case of a partial exercise, the portion thereof as
to which the Warrant is being exercised), in either case without making
any adjustment for additional Common Stock or any other Stock or other
securities or property or cash which, pursuant to the adjustment
provisions of the Warrant, may be deliverable upon exercise.
14
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned, the Holder of the within
Warrant, hereby sells, assigns and transfers all of the rights of the rights
of the undersigned under the within Warrant, with respect to the number of
shares of Common Stock covered thereby set forth herein below unto:
Name of Assignee Address No. of Shares
DATED:
------------------
------------------------------
(Signature must conform in all
respects to name of Holder as
specified on the face of the
Warrant)
15
<PAGE>
Exhibit 11.01
<TABLE>
<CAPTION>
HelpMate Robotics Inc.
Calculation of Net Loss Per Common Share
----------------------------------------
QUARTER QUARTER
ENDED ENDED
PRIMARY EARNINGS PER SHARE 03/31/97 03/31/96
- -------------------------------------------------------------------- ---------- ----------
<S> <C> <C>
Historical
Net Loss............................................................ $(596,993) $(879,222)
Preferred Dividends................................................. (57,147)
---------- ----------
Net Loss Applicable to Common Shareholders.......................... $(596,993) $(936,369)
---------- ----------
---------- ----------
Weighted Average Common Shares Outstanding.......................... 6,288,507 4,533,812
Incremental Shares Issuable Pursuant to SAB Topic 4D................ 38,553
---------- ----------
Total Shares........................................................ 6,288,507 4,572,365
---------- ----------
---------- ----------
Historical Net Loss per Common Share................................ $(0.10) $(0.21)
---------- ----------
---------- ----------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 513,802
<SECURITIES> 0
<RECEIVABLES> 637,085
<ALLOWANCES> (40,000)
<INVENTORY> 1,478,632
<CURRENT-ASSETS> 2,708,145
<PP&E> 2,077,865
<DEPRECIATION> (1,972,171)
<TOTAL-ASSETS> 4,786,010
<CURRENT-LIABILITIES> 2,063,247
<BONDS> 0
0
0
<COMMON> 16,964,504
<OTHER-SE> (15,749,736)
<TOTAL-LIABILITY-AND-EQUITY> 1,214,768
<SALES> 344,069
<TOTAL-REVENUES> 816,352
<CGS> 190,900
<TOTAL-COSTS> 538,725
<OTHER-EXPENSES> 834,720
<LOSS-PROVISION> (10,000)
<INTEREST-EXPENSE> (70,334)
<INCOME-PRETAX> (596,993)
<INCOME-TAX> 0
<INCOME-CONTINUING> (536,993)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (596,993)
<EPS-PRIMARY> $(0.10)
<EPS-DILUTED> 0
</TABLE>
