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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 23, 1999
ROBOTIC VISION SYSTEMS, INC.
(Exact name of Registrant as specified in Charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 000-8623 11-2400145
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(State or other jurisdiction of incorporation) (Commission File No.) (IRS Employer Identification Number)
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5 Shawmut Road, Canton, Massachusetts 02021
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 821-0830
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Item 5. Other Events.
On July 23, 1999, Registrant completed a private sale to "accredited
investors", as that term is defined in Rule 501, promulgated under the
Securities Act of 1933, as amended, of (i) five-year common stock purchase
warrants at a price of $1.375 per warrant and (ii) 1,063,593 shares of common
stock at a price of $3.05 per share, for aggregate proceeds to Registrant of
approximately $7.5 million. The warrants entitle the holders to acquire up to
3,090,907 shares of Registrant's common stock at an exercise price of $4.02 per
share. Registrant expects to derive net proceeds of $6.7 million from this
transaction.
The exercise price of the warrants is subject to possible downward
adjustment on one occasion, as follows: if on January 14, 2000 the average of
the closing bid prices of Registrant's common stock for the 30 trading days
prior to that date shall have been less than $4.02, then the exercise price
shall be reduced to an amount equal to such average. The warrants contain
provisions to protect the respective holders against dilution, including any
future sales of Registrant's equity securities at below then prevailing market
prices (subject to enumerated exceptions).
The Zanett Securities Corporation acted as placement agent and
received placement fees and a non-accountable expense allowance totaling 7.9% of
the gross proceeds of the offering, and five-year warrants to acquire 150,000
shares of Registrant's common stock at an exercise price of $5.00 per share.
Registrant has agreed that it will file a registration statement with
the Securities and Exchange Commission to effect a registration of both the
shares of common stock sold in this transaction and the shares of common stock
issuable upon exercise of the warrants.
Registrant intends to use the net proceeds of this private equity
placement for working capital purposes.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements:
None
(b) Exhibits:
Exhibit No. Description
7.1 Form of Securities Purchase Agreement dated
as of July 19, 1999 among Robotic Vision
Systems, Inc. and the purchasers parties
thereto.
7.2 Form of Common Stock Purchase Warrant
7.3 Registration Rights Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: July 23, 1999 ROBOTIC VISION SYSTEMS, INC.
(Registrant)
By: /s/ Ira Roxland
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Ira Roxland
Assistant Secretary
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SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of July 19,
1999, by and among ROBOTIC VISION SYSTEMS, INC., a corporation organized under
the laws of the State of Delaware (the "COMPANY"), and each of the purchasers
(the "PURCHASERS") set forth on the execution pages hereof (the "EXECUTION
PAGES").
WHEREAS:
A. The Company and each Purchaser are executing and delivering
this Agreement in reliance upon the exemption from securities registration
afforded by the provisions of Regulation D ("REGULATION D"), as promulgated by
the United States Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "SECURITIES ACT").
B. The Company desires to sell, and the Purchasers collectively
desire to purchase, upon the terms and conditions stated in this Agreement in
the amounts set forth on the Execution Pages, (i) Common Stock Purchase
Warrants in the form attached hereto as Exhibit A (the "WARRANTS"), which
entitle the holders thereof to acquire up to an aggregate of 3,090,907 shares
of the Company's common stock, par value $.01 per share (the "COMMON STOCK")
and (ii) 1,085,888 shares of Common Stock (the "COMMON SHARES"). The shares of
Common Stock issuable upon exercise of or otherwise pursuant to the Warrants
are referred to herein as the "WARRANT SHARES." The Warrants, the Common
Shares and the Warrant Shares are collectively referred to herein as the
"SECURITIES" and each of them may individually be referred to herein as a
"SECURITY."
C. Contemporaneous with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement, in the form attached hereto as Exhibit B (the "REGISTRATION
RIGHTS AGREEMENT"), pursuant to which the Company has agreed to provide certain
registration rights under the Securities Act and the rules and regulations
promulgated thereunder, and applicable state securities laws.
NOW, THEREFORE, the Company and the Purchasers hereby agree as
follows:
1. PURCHASE AND SALE OF SECURITIES.
a. Purchase of Securities. The issuance, sale and purchase of
the Warrants and the Common Shares shall take place in a closing (the
"CLOSING"). The purchase price for each Warrant Share subject to a Warrant
shall be equal to One Dollar and Thirty Seven and One-Half Cents ($1.375) (the
"WARRANT PURCHASE PRICE") and the purchase price for each Common Share shall be
equal to Three Dollars and Five Cents ($3.05) (the "COMMON SHARE PURCHASE
PRICE"). The Warrant Purchase Price and the Common Share Purchase Price are
collectively referred to as the "PURCHASE PRICE". Each Purchaser's obligation
to purchase Securities hereunder is distinct and separate from each other
Purchaser's obligation to purchase Securities and no Purchaser shall be
required to purchase hereunder more than the number or types of Securities set
forth on such
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Purchaser's Execution Page hereto notwithstanding any failure by any other
Purchaser to purchase Securities hereunder. On the date of the Closing,
subject to the satisfaction (or waiver) of the conditions set forth in Section
6 and Section 7 below, the Company shall issue and sell to each Purchaser, and
each Purchaser severally agrees to purchase from the Company, such type and
number of Securities as is set forth on such Purchaser's Execution Page as
being purchasable by such Purchaser at the Closing.
b. Form of Payment. At the Closing hereunder, each Purchaser
shall pay the aggregate Purchase Price for the Securities being purchased by
such Purchaser at the closing by wire transfer to the Company, in accordance
with the Company's written wiring instructions, against delivery of the Common
Shares or duly executed Warrants, as the case may be, being purchased by such
Purchaser at the closing and the Company shall deliver such Common Shares and
Warrants against delivery of such aggregate Purchase Price.
c. Closing Date. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Section 6 and Section 7 below, the date and
time of the issuance and sale of the Securities pursuant to this Agreement
shall be 12:00 noon, New York City time, on July 20, 1999, or such other time
as may be mutually agreed upon by the Company and the Purchasers purchasing
Securities. The Closing shall occur at the offices of Klehr, Harrison, Harvey,
Branzburg & Ellers, LLP, 1401 Walnut Street, Philadelphia, Pennsylvania 19102.
2. PURCHASERS' REPRESENTATIONS AND WARRANTIES
Each Purchaser severally represents and warrants to the Company as
follows:
a. Investment Purpose. Purchaser is purchasing the Warrants or
the Common Shares, as the case may be, for Purchaser's own account for
investment purposes only and not with a present view towards the public sale or
distribution thereof, except pursuant to sales that are exempt from the
registration requirements of the Securities Act and/or sales registered under
the Securities Act. Purchaser understands that Purchaser must bear the
economic risk of this investment indefinitely, unless the Securities are
registered pursuant to the Securities Act and any applicable state securities
or blue sky laws or an exemption from such registration is available, and that
the Company has no present intention of registering the resale of any such
Securities other than as contemplated by the Registration Rights Agreement.
Notwithstanding anything in this Section 2(a) to the contrary, by making the
representations herein, the Purchaser does not agree to hold the Securities for
any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption from the registration requirements under the
Securities Act.
b. Accredited Investor Status. Purchaser is an "ACCREDITED
INVESTOR" as that term is defined in Rule 501(a) of Regulation D or Purchaser
with such "PURCHASERS REPRESENTATIVE" as that term is defined in Rule 501(h) of
Regulation D has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of the
prospective investment.
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c. Reliance on Exemptions. Purchaser understands that the
Securities are being offered and sold to Purchaser in reliance upon specific
exemptions from the registration requirements of United States federal and
state securities laws and that the Company is relying upon the truth and
accuracy of, and Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of Purchaser set forth herein in
order to determine the availability of such exemptions and the eligibility of
Purchaser to acquire the Securities.
d. Information. Purchaser and its counsel, if any, have been
furnished all materials relating to the business, finances and operations of
the Company and materials relating to the offer and sale of the Securities
which have been specifically requested by Purchaser or its counsel (including
the SEC Documents (as defined in Section 3(f) hereof)). Purchaser and its
counsel have been afforded the opportunity to ask questions of the Company and
have received what Purchaser believes to be satisfactory answers to any such
inquiries. Neither such inquiries nor any other investigation conducted by
Purchaser or its counsel or any of its representatives shall modify, amend or
affect Purchaser's right to rely on the Company's representations and
warranties contained in Section 3 below. Purchaser understands that
Purchaser's investment in the Securities involves a high degree of risk.
e. Governmental Review. Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.
f. Transfer or Resale. Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the sale or resale of the
Securities have not been and are not being registered under the Securities Act
or any state securities laws, and the Securities may not be transferred unless
(a) the resale of the Securities has been registered thereunder; or (b)
Purchaser shall have delivered to the Company an opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel
in comparable transactions) to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; or (c) the Securities are sold under Rule 144 promulgated under
the Securities Act (or a successor rule) ("RULE 144"); or (d) the Securities
are sold or transferred to an affiliate of Purchaser who agrees to sell or
otherwise transfer the Securities only in accordance with the provisions of
this Section 2(f) and who is an Accredited Investor; and (ii) neither the
Company nor any other person is under any obligation to register such
Securities under the Securities Act or any state securities laws (other than
pursuant to the Registration Rights Agreement). Notwithstanding the foregoing
or anything else contained herein to the contrary, the Securities may be
pledged as collateral in connection with a bona fide margin account or other
lending arrangement.
g. Legends. Purchaser understands that the Warrants and, until
such time as the Common Shares and the Warrant Shares have been registered
under the Securities Act as contemplated by the Registration Rights Agreement
or otherwise may be sold by Purchaser under Rule 144, the certificates for the
Common Shares and Warrant Shares may bear a restrictive legend in substantially
the following form:
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The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state of the United States. The securities
represented hereby may not be offered, sold, transferred or assigned
in the absence of an effective registration statement for the
securities under applicable securities laws unless offered, sold,
transferred or assigned under an available exemption from the
registration requirements of those laws.
The legend set forth above shall be removed and the Company shall
issue a certificate without such legend to the holder of any Security upon
which it is stamped, if, unless otherwise required by state securities laws,
(a) the sale of such Security is registered under the Securities Act as
contemplated by the Registration Rights Agreement; (b) such holder provides the
Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public
sale or transfer of such Security may be made without registration under the
Securities Act; or (c) such holder provides the Company with reasonable
assurances that such Security can be sold under Rule 144. Purchaser agrees to
sell all Securities, including those represented by a certificate(s) from which
the legend has been removed, pursuant to an effective registration statement or
under an exemption from the registration requirements of the Securities Act.
In the event the above legend is removed from any Security and thereafter the
effectiveness of a registration statement covering such Security is suspended
or the Company determines that a supplement or amendment thereto is required by
applicable securities laws, then upon reasonable advance notice to Purchaser
the Company may require that the above legend be placed on any such Security
that cannot then be sold pursuant to an effective registration statement or
under Rule 144 and Purchaser shall cooperate in the replacement of such legend.
Such legend shall thereafter be removed when such Security may again be sold
pursuant to an effective registration statement or under Rule 144.
h. Authorization; Enforcement. This Agreement and the
Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of Purchaser and are valid and binding agreements of
Purchaser enforceable in accordance with their terms.
i. Residency. Purchaser is a resident of the jurisdiction set
forth under such Purchaser's name on the Execution Page hereto executed by such
Purchaser.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser as follows:
a. Organization and Qualification. The Company and each of its
subsidiaries is a corporation or limited liability company duly organized and
existing in good standing under the laws of the jurisdiction in which it is
incorporated or formed, as the case may be, and has the requisite corporate or
limited liability company power, as applicable, to own its properties and to
carry on its business as now being conducted. The Company and each of its
subsidiaries is duly qualified as a foreign corporation or limited liability
company, as applicable, to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary and where the failure so to qualify would have a
Material Adverse Effect.
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"MATERIAL ADVERSE EFFECT" means any material adverse effect on (i) the
Securities, (ii) the ability of the Company to perform its obligations
hereunder or under the Warrants or the Registration Rights Agreement or (iii)
the business, operations, properties, prospects or financial condition of the
Company and its subsidiaries, taken as a whole.
b. Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Warrants and the Registration Rights Agreement, to issue
and sell the Warrants and the Common Shares in accordance with the terms
hereof, and to issue the Warrant Shares upon exercise of the Warrants in
accordance with the terms of such Warrants; (ii) the execution, delivery and
performance of this Agreement, the Warrants and the Registration Rights
Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Warrants and the Common Shares and the issuance and reservation for
issuance of the Warrant Shares) have been duly authorized by the Company's
Board of Directors and no further consent or authorization of the Company, its
Board of Directors, any committee of the Board of Directors, or the Company's
stockholders is required (under Rules 4310(c)(25)(H) or 4460(i) promulgated by
the National Association of Securities Dealers ("NASD") or otherwise); (iii)
this Agreement has been duly executed and delivered by the Company; and (iv)
this Agreement constitutes, and, upon execution and delivery by the Company of
the Warrants and the Registration Rights Agreement, such agreements will
constitute, valid and binding obligations of the Company enforceable against
the Company in accordance with their terms.
c. Capitalization. The capitalization of the Company as of the
date hereof, including the authorized capital stock, the number of shares
issued and outstanding, the number of shares issuable and reserved for issuance
pursuant to the Company's stock option plans, the number of shares issuable and
reserved for issuance pursuant to securities (other than the Warrants)
exercisable or exchangeable for, or convertible into, any shares of capital
stock and the number of shares to be reserved for issuance upon exercise of the
Warrants is set forth on Schedule 3(c). All of such outstanding shares of
capital stock have been, or upon issuance in accordance with the terms of any
such warrants or options, will be, validly issued, fully paid and
non-assessable. None of the authorized but unissued shares of capital stock of
the Company (including the Warrant Shares) are subject to preemptive rights or
any other similar rights of the stockholders of the Company or any liens or
encumbrances created by the Company. Except for the Securities and as set
forth on Schedule 3(c), as of the date of this Agreement, (i) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital
stock of the Company or any of its subsidiaries, or arrangements by which the
Company or any of its subsidiaries is or may become bound to issue additional
shares of capital stock of the Company or any of its subsidiaries, and (ii)
there are no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of its or their
securities under the Securities Act (except the Registration Rights Agreement).
Except as set forth on Schedule 3(c), there are no securities or instruments
containing antidilution or similar provisions that will be triggered by the
issuance of the Securities in accordance with the terms of this Agreement or
Warrants. The Company has furnished to the Purchasers true and correct copies
of the Company's Certificate of Incorporation as in effect on the date hereof
("CERTIFICATE OF INCORPORATION"), the Company's By-laws as in effect on the
date
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hereof (the "BY-LAWS"), and all other forms of instruments and agreements
governing securities convertible into or exercisable or exchangeable for
capital stock of the Company.
d. Issuance of Common Shares and Warrant Shares. The Common
Shares and Warrant Shares are duly authorized and reserved for issuance, and,
upon the issuance of the Common Shares in accordance with the terms hereof and
upon the exercise of the Warrants in accordance with the terms thereof, as the
case may be, will be validly issued, fully paid and non-assessable, and free
from all taxes, liens, claims and encumbrances and will not be subject to
preemptive rights or other similar rights of stockholders of the Company and
will not impose personal liability upon the holder thereof.
e. No Conflicts. The execution, delivery and performance of this
Agreement, the Warrants and the Registration Rights Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and reservation for
issuance of the Warrant Shares) will not (i) result in a violation of the
Certificate of Incorporation or By-laws or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment
(including, without limitation, the triggering of any anti-dilution
provisions), acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its subsidiaries is a party, or
result in a violation of any law, rule, regulation, order, judgment or decree
(including U.S. federal and state securities laws and regulations and rules or
regulations of any self-regulatory organizations to which either the Company or
its securities are subject) applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected (except, with respect to clause (ii), for
such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect). Neither the Company nor any of its
subsidiaries is in violation of its Certificate of Incorporation, By-laws or
other organizational documents and neither the Company nor any of its
subsidiaries is in default (and no event has occurred which, with notice or
lapse of time or both, would put the Company or any of its subsidiaries in
default) under, nor has there occurred any event giving others (with notice or
lapse of time or both) any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its subsidiaries is a party, except for (i) actual or possible
violations, defaults or rights as would not, individually or in the aggregate,
have a Material Adverse Effect and (ii) as set forth in Schedule 3(e) hereto.
The businesses of the Company and its subsidiaries are not being conducted, and
shall not be conducted so long as a Purchaser owns any of the Securities, in
violation of any law, ordinance or regulation of any governmental entity,
except for possible violations the sanctions for which either singly or in the
aggregate would not have a Material Adverse Effect. Except as specifically
contemplated by this Agreement and the Registration Rights Agreement, the
Company is not required to obtain any consent, approval, authorization or order
of, or make any filing or registration with, any court or governmental agency
or any regulatory or self regulatory agency or any other person or entity in
order for it to execute, deliver or perform any of its obligations under this
Agreement, the Warrants or the Registration Rights Agreement, in each case in
accordance with the terms hereof or thereof. The Company is not in violation
of the listing requirements of the Nasdaq National Market (the "NATIONAL
MARKET") and does not reasonably anticipate that the Common Stock will be
delisted by the National Market for the foreseeable future.
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f. SEC Documents, Financial Statements. Except as set forth in
Schedule 3(f) hereof, since September 30, 1995, the Company has filed (within
applicable extension periods) all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT") (all of the foregoing and all exhibits included therein and
financial statements and schedules thereto and documents incorporated by
reference therein, being hereinafter referred to herein as the "SEC
DOCUMENTS"). The Company has delivered to the Purchasers true and complete
copies of the SEC Documents. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Exchange Act or
the Securities Act, as the case may be, and the rules and regulations of the
SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. None of the
statements made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings made prior to the date hereof).
As of their respective dates, the financial statements of the Company included
in the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC applicable with respect thereto. Such financial statements have been
prepared in accordance with U.S. generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to immaterial year-end audit adjustments).
Except as set forth in the financial statements of the Company included in the
SEC Documents filed prior to the date hereof or on Schedule 3(f) hereto, the
Company has no liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to the date of such
financial statements, (ii) liabilities not required by generally accepted
accounting principles ("GAAP") to be disclosed on a balance sheet prepared in
accordance with GAAP, and (iii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under GAAP to be
reflected in such financial statements, which liabilities and obligations
referred to in clauses (i), (ii) and (iii), individually or in the aggregate,
are not material to the financial condition or operating results of the
Company.
g. Absence of Certain Changes. Since September 30, 1998, there
has been no material adverse change and no material adverse development in the
business, properties, operations, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, except as
disclosed in Schedule 3(g) or in the SEC Documents filed with the SEC prior to
the date hereof.
h. Absence of Litigation. Except as disclosed in the SEC
Documents filed with the SEC prior to the date hereof, there is no action,
suit, proceeding, inquiry or investigation before or by any
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court, public board, government agency, self-regulatory organization or body
pending or, to the knowledge of the Company or any of its subsidiaries,
threatened against or affecting the Company, any of its subsidiaries, or any of
their respective directors or officers in their capacities as such, which could
reasonably be expected to have a Material Adverse Effect. To the Company's
knowledge, there are no facts which, if known by a potential claimant or
governmental authority, could give rise to a claim or proceeding which, if
asserted or conducted with results unfavorable to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse Effect.
i. Intellectual Property. Each of the Company and its
subsidiaries owns or is licensed to use all patents, patent applications,
trademarks, trademark applications, trade names, service marks, copyrights,
copyright applications, licenses, permits, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) and other similar rights and proprietary
knowledge (collectively, "INTANGIBLES") necessary for the conduct of its
business as now being conducted and as described in the Company's Annual Report
on Form 10-K for the fiscal year ended September 30, 1998. To the best
knowledge of the Company, neither the Company nor any subsidiary of the Company
infringes or is in conflict with any right of any other person with respect to
any Intangibles which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect.
Neither the Company nor any of its subsidiaries has received notice of any
pending conflict with or infringement upon such third party Intangibles, which
alleged pending conflict or alleged infringement, if adversely determined,
would result in a Material Adverse Effect. Except as disclosed in the SEC
Documents, the termination of the Company's ownership of, or right to use, any
single Intangible would not result in a Material Adverse Effect on the Company.
Neither the Company nor any of its subsidiaries has entered into any consent
agreement, indemnification agreement, forbearance to sue or settlement
agreement with respect to the validity of the Company's or its subsidiaries'
ownership or right to use its Intangibles and, to the best knowledge of the
Company, there is no reasonable basis for any such claim to be successful. The
Intangibles are valid and enforceable and no registration relating thereto has
lapsed, expired or been abandoned or canceled or is the subject of cancellation
or other adversarial proceedings, and all applications therefor are pending and
in good standing. The Company and its subsidiaries have complied, in all
material respects, with their respective contractual obligations relating to
the protection of the Intangibles used pursuant to licenses. To the best
knowledge of the Company, no person is infringing on or violating the
Intangibles owned or used by the Company or its subsidiaries.
j. Foreign Corrupt Practices. Neither the Company, nor any of its
subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any subsidiary has, in the course of his actions
for, or on behalf of, the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or
is in violation of any provision of the U.S. Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
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k. Disclosure. All information relating to or concerning the
Company set forth in this Agreement or provided to the Purchasers pursuant to
Section 2(d) hereof and otherwise in connection with the transactions
contemplated hereby is true and correct in all material respects and the
Company has not omitted to state any material fact necessary in order to make
the statements made herein or therein, in light of the circumstances under
which they were made, not misleading. No event or circumstance has occurred or
exists with respect to the Company or its subsidiaries or their respective
businesses, properties, prospects, operations or financial conditions, which
has not been publicly disclosed but, under applicable law, rule or regulation,
would be required to be disclosed by the Company in a registration statement
filed on the date hereof by the Company under the Securities Act with respect
to the primary issuance of the Company's securities.
l. Acknowledgment Regarding Purchasers' Purchase of the
Securities. The Company acknowledges and agrees that none of the Purchasers or
the Placement Agent is acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to this Agreement or the
transactions contemplated hereby, the relationship between the Company and the
Purchasers and the Placement Agent is "arms-length" and any statement made by
any Purchaser or the Placement Agent or any of their respective representatives
or agents in connection with this Agreement and the transactions contemplated
hereby is not advice or a recommendation and is merely incidental to such
Purchaser's purchase of Securities or such Placement Agent's role as a
placement agent and has not been relied upon by the Company, its officers or
directors in any way. The Company further acknowledges that the Company's
decision to enter into this Agreement has been based solely on an independent
evaluation by the Company and its representatives.
m. Absence of Form S-3 Eligibility. The Company is not currently
eligible to register the resale of its Common Stock on a registration statement
on Form S-3 under the Securities Act.
n. No General Solicitation. Neither the Company nor any
distributor participating on the Company's behalf in the transactions
contemplated hereby (if any) nor any person acting for the Company, or any such
distributor, has conducted any "general solicitation," as such term is defined
in Regulation D, with respect to any of the Securities being offered hereby.
o. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause this offering of
Securities to be integrated with any prior offering of securities of the
Company for purposes of the Securities Act or for purposes of any applicable
stockholder approval provisions, and, neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would require registration of the
Securities being offered hereby under the Securities Act.
p. Intentionally Left Blank.
q. Title. The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them
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<PAGE> 10
which is material to the business of the Company and its subsidiaries, in each
case free and clear of all liens, encumbrances and defects except such as are
described in Schedule 3(q) or such as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries. Any real
property and facilities held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with the use
made and proposed to be made of such property and buildings by the Company and
its subsidiaries.
r. Tax Status. Except as set forth on Schedule 3(r) and except to
the extent that the failure to do so would not have a Material Adverse Effect,
the Company and each of its subsidiaries has made or filed all foreign,
federal, state and local income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provisions reasonably adequate for the payment
of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. Except as set forth on Schedule 3(r), there are
no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim. The Company has not executed a waiver with respect to any
statute of limitations relating to the assessment or collection of any federal,
state or local tax. Except as set forth on Schedule 3(r), none of the
Company's tax returns is presently being audited by any taxing authority.
s. No other Agreements. The Company has not, directly or
indirectly, made any agreements with the Purchasers relating to the terms or
conditions of the transactions contemplated hereby except as set forth in this
Agreement, the Warrants and the Registration Rights Agreement.
4. COVENANTS.
a. Best Efforts. The parties shall use their best efforts timely
to satisfy each of the conditions described in Section 6 and Section 7 of this
Agreement.
b. Form D: Blue Sky Laws. The Company agrees to file a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof to each Purchaser promptly after such filing. The Company shall,
on or before the date of the Closing, take such action as the Company shall
reasonably determine is necessary to qualify the Securities for sale to the
Purchasers pursuant to this Agreement under applicable securities or "blue sky"
laws of the states of the United States or obtain exemption therefrom, and
shall provide evidence of any such action so taken to the Purchasers on or
prior to the date of the Closing.
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<PAGE> 11
c. Reporting Status. So long as any Purchaser beneficially owns
any of the Securities, the Company shall timely file all reports required to be
filed with the SEC pursuant to the Exchange Act, and the Company shall not
terminate its status as an issuer required to file reports under the Exchange
Act even if the Exchange Act or the rules and regulations thereunder would
permit such termination. In addition, the Company shall take all actions
necessary to be eligible to register the resale of its Common Stock on a
registration statement on Form S-3 under the Securities Act.
d. Use of Proceeds. The Company shall use the proceeds from the
sale of the Securities as set forth in Schedule 4(d).
e. Expenses. Except as otherwise provided herein and in Section
5 of the Registration Rights Agreement, each party hereto shall be responsible
for its own expenses incurred in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement and the other agreements
to be executed in connection herewith. Notwithstanding the foregoing, within
one (1) business day of the Closing, the Company shall reimburse Wingate
Capital Ltd. and Fisher Capital Ltd. for their expenses (including attorneys'
fees and expenses) in connection with negotiating and preparing this Agreement
and the related documents and consummating the transactions contemplated
thereby up to an aggregate of $15,000.
f. Financial Information. The Company agrees to send the
following reports to each Purchaser until such Purchaser transfers, assigns or
sells all of its Securities: (i) within ten (10) days after the filing with the
SEC, a copy of its Annual Report on Form 10-K, its Quarterly Reports on Form
10-Q, its proxy statements and any Current Reports on Form 8-K; and (ii) within
one (1) day after release, copies of all press releases issued by the Company
or any of its subsidiaries.
g. Reservation of Shares. The Company shall at all times have
authorized and reserved for the purpose of issuance 100% of the number of
shares of Common Stock issuable upon exercise of the Warrants (without regard
to any limitations on the exercise of the Warrants), to provide for the full
exercise of the Warrants and the issuance of the Warrant Shares in connection
therewith, subject to and as otherwise required by the Warrants.
h. Listing. The Company shall promptly secure the listing of the
Common Shares and Warrant Shares upon each national securities exchange or
automated quotation system, if any, upon which shares of Common Stock are then
listed (subject to official notice of issuance) and shall maintain, so long as
any Purchaser (or any of their affiliates) own any Securities, such listing of
all Common Shares and all Warrant Shares from time to time issuable upon
exercise of the Warrants. The Company will use its best efforts to continue
the listing and trading of its Common Stock on the National Market and will
comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the NASD and such exchanges, as
applicable. The Company shall promptly provide to each holder of Common Shares
and Warrants copies of any notices it receives regarding the continued
eligibility of the Common Stock for trading on the National Market or, if
applicable, any securities exchange or
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<PAGE> 12
automated quotation system on which securities of the same class or series
issued by the Company are then listed or quoted, if any, provided that the
Company shall publicly disclose any material information contained in such
notice prior to or concurrently with the giving of such notice to the
Purchasers.
i. Corporate Existence. So long as a Purchaser beneficially owns
any Securities, the Company shall maintain its corporate existence, and in the
event of a merger, consolidation or sale of all or substantially all of the
Company's assets, the Company shall ensure that the surviving or successor
entity in such transaction (i) assumes the Company's obligations hereunder and
under the Warrants and the agreements and instruments entered into in
connection herewith regardless of whether or not the Company would have had a
sufficient number of shares of Common Stock authorized and available for
issuance in order to effect the exercise in full of all Warrants outstanding as
of the date of such transaction and (ii) is a publicly traded corporation whose
common stock is listed for trading on the National Market, the New York Stock
Exchange ("NYSE") or the American Stock Exchange ("AMEX").
j. No Integrated Offerings. The Company shall not make any
offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold
hereunder under the Securities Act or cause this offering of Securities to be
integrated with any other offering of securities by the Company for purposes of
any stockholder approval provision applicable to the Company or its securities.
k. Legal Compliance. The Company shall conduct its business and
the business of its subsidiaries in compliance with all laws, ordinances or
regulations of governmental entities applicable to such businesses, except
where the failure to do so would not have a Material Adverse Effect.
l. Filing of Form 8-K. On or before the 1st business day
following the Closing Date, the Company shall file a Form 8-K with the SEC
describing the terms of the transactions contemplated hereby.
5. TRANSFER AGENT INSTRUCTIONS.
a. The Company shall instruct its transfer agent to issue
certificates, registered in the name of each Purchaser or its nominee, for the
Warrant Shares in such amounts as specified from time to time by such Purchaser
to the Company upon exercise of the Warrants. To the extent and during the
periods provided in Section 2(f) and 2(g) of this Agreement, all such
certificates shall bear the restrictive legend specified in Section 2(g) of
this Agreement.
b. The Company warrants that no instruction other than such
instructions referred to in this Section 5, and stop transfer instructions to
give effect to Section 2(f) hereof in the case of the transfer of the Warrant
Shares prior to registration of the Warrant Shares under the Securities Act or
without an exemption therefrom, will be given by the Company to its transfer
agent and that the Securities shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this
Agreement and the Registration Rights
-12-
<PAGE> 13
Agreement. Nothing in this Section shall affect in any way each Purchaser's
obligations and agreement set forth in Section 2(g) hereof to resell the
Securities pursuant to an effective registration statement or under an
exemption from the registration requirements of applicable securities law.
c. If a Purchaser provides the Company and the transfer agent
with an opinion of counsel, which opinion of counsel shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions, to the effect that the Securities to be sold or transferred may
be sold or transferred pursuant to an exemption from registration, or a
Purchaser provides the Company with reasonable assurances that such Securities
may be sold under Rule 144, the Company shall permit the transfer, and, in the
case of the Warrant Shares or the Common Shares, promptly instruct its transfer
agent to issue one or more certificates in such name and in such denominations
as specified by such Purchaser.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Warrants
and Common Shares to a Purchaser at the Closing hereunder is subject to the
satisfaction, at or before the Closing, of each of the following conditions
thereto, provided that these conditions are for the Company's sole benefit and
may be waived by the Company at any time in its sole discretion by providing
written notice of such waiver to each Purchaser. The obligation of the Company
to issue and sell the Warrants and Common Shares to any Purchaser hereunder is
distinct and separate from its obligation to issue and sell Warrants and Common
Shares to any other Purchaser hereunder and any failure by one or more
Purchasers to fulfill the conditions set forth herein or to consummate the
purchase of Warrants and Common Shares hereunder will not relieve the Company
of its obligations with respect to any other Purchaser.
a. The applicable Purchaser shall have executed the signature
page to this Agreement and the Registration Rights Agreement, and delivered the
same to the Company.
b. The applicable Purchaser shall have delivered the Purchase
Price for the Warrants and Common Shares purchased at the Closing in
accordance with Section 1(b) above.
c. The representations and warranties of the applicable Purchaser
shall be true and correct as of the date when made and as of the date and time
of the Closing as though made at that time (except for representations and
warranties that speak as of a specific date, which representations and
warranties shall be true and correct as of such date), and the applicable
Purchaser shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the applicable Purchaser at or prior
to the date of the Closing.
d. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction or
any self-regulatory organization having authority over the
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<PAGE> 14
matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.
7. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE.
The obligation of each Purchaser hereunder to purchase the Warrants
and Common Shares to be purchased by it at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for such Purchaser's sole
benefit and may be waived by such Purchaser at any time in the Purchaser's sole
discretion:
a. The Company shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to such Purchaser.
b. The Company shall have delivered to such Purchaser the Common
Shares and the duly executed Warrants (each in such denominations as such
Purchaser shall request) being so purchased by such Purchaser at the Closing in
accordance with Section 1(b) above.
c. The Common Stock shall be authorized for quotation and listed
on the National Market and trading in the Common Stock (or the National Market
generally) shall not have been suspended by the SEC or the National Market.
d. The representations and warranties of the Company shall be
true and correct as of the date when made and as of the date of the Closing as
though made at that time (except for representations and warranties that speak
as of a specific date, which representations and warranties shall be true and
correct as of such date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the date of the Closing. Such Purchaser shall have
received a certificate, executed by the Chief Executive Officer of the Company,
dated as of the date of the Closing to the foregoing effect and as to such
other matters as may be reasonably requested by such Purchaser.
e. No litigation, statute, rule, regulation, executive order,
decree, ruling, injunction, action or proceeding shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which questions the validity of, or
challenges or prohibits the consummation of any of the transactions
contemplated by this Agreement.
f. Such Purchaser shall have received an opinion of the Company's
counsel, dated as of the date of the Closing, in form, scope and substance
reasonably satisfactory to the Purchaser and in substantially the form of
Exhibit C attached hereto.
g. The Company shall have delivered evidence reasonably
satisfactory to the Purchasers that the Company's transfer agent has agreed to
act in accordance with irrevocable instructions in the form attached hereto as
Exhibit D.
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<PAGE> 15
h. There shall have been no material adverse changes and no
material adverse developments in the business, properties, operations,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, since the date hereof, and no information, of
which the Purchasers are not currently aware, shall come to the attention of
the Purchasers that is materially adverse to the Company.
i. The aggregate number of Securities being purchased hereunder
by all Purchasers at the Closing hereunder shall be (a) Warrants covering the
aggregate of 3,090,907 Warrant Shares and (b) 1,085,888 Common Shares.
j. Such Purchaser shall have received from the Company, certified
by the Secretary of the Company, a true and complete copy of each of (i) the
Company's articles of incorporation, (ii) the Company's bylaws and (iii)
resolutions of the Company's Board of Directors approving the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby.
k. Such Purchaser shall have received from the Company a copy of
the Company's articles of incorporation certified by the Office of the
Secretary of State of the State of Delaware and a Certificate of Good Standing
from the State of Delaware and the State of Massachusetts.
8. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law; Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed in the State of New York. The
Company irrevocably consents to the jurisdiction of the United States federal
courts and the state courts located in the City of New York in the State of New
York in any suit or proceeding based on or arising under this Agreement and
irrevocably agrees that all claims in respect of such suit or proceeding may be
determined in such courts. The Company irrevocably waives the defense of an
inconvenient forum to the maintenance of such suit or proceeding. The Company
further agrees that service of process mailed by first class mail shall be
deemed in every respect effective service of process in any such suit or
proceeding. Nothing herein shall affect the right of any Purchaser to serve
process in any other manner permitted by law. The Company agrees that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
b. Waiver of Jury Trial. IN ANY LITIGATION ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER OBLIGATIONS IN WHICH THE PARTIES TO
THIS AGREEMENT ARE ADVERSE PARTIES, THE COMPANY AND THE PURCHASERS HEREBY WAIVE
TRIAL BY JURY.
c. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement,
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<PAGE> 16
once executed by a party, may be delivered to the other parties hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.
d. Headings. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.
e. Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
f. Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein. No provision of this
Agreement may be waived other than by an instrument in writing signed by the
party to be charged with enforcement and no provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and each
Purchaser.
g. Notices. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier or by
confirmed telecopy or by facsimile, and shall be effective five days after
being placed in the mail, if mailed, or upon receipt or refusal of receipt, if
delivered personally or by courier or confirmed telecopy, in each case
addressed to a party. The addresses for such communications shall be:
If to the Company:
Robotic Vision Systems, Inc.
5 Shawmut Road
Canton, MA 02021
Telephone: (781) 821-0830
Telecopy: (781) 828-9852
Attn: Pat V. Costa, Chairman and Chief Executive Officer
with a copy to:
Cooperman Levitt Winikoff Lester & Newman, P.C.
800 Third Avenue
New York, NY 10022
Telephone: (212) 407-1289
Telecopy: (212) 755-2839
Attn: Ira Roxland, Esq.
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<PAGE> 17
If to any Purchaser, to such address set forth under such Purchaser's
name on the Execution Page hereto executed by such Purchaser. Each party shall
provide notice to the other parties of any change in address.
h. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns.
Except as provided herein or therein, neither the Company nor any Purchaser
shall assign this Agreement, the Registration Rights Agreement, the Warrants or
any rights or obligations hereunder or thereunder. Notwithstanding the
foregoing, any Purchaser may assign its rights hereunder to any of its
"affiliates" (as that term is defined under the Exchange Act) who are
Accredited Investors without the consent of the Company (provided such
assignees agree to be bound by all of the terms and conditions hereof), or to
any other person or entity with the consent of the Company, which consent shall
not be unreasonably withheld. This provision shall not limit a Purchaser's
right to transfer the Securities pursuant to the terms of the Warrants and this
Agreement or to assign such Purchaser's rights hereunder and/or thereunder to
any such transferee.
i. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person, except for the provisions of Section 3(l) which
are in part for the benefit of, and may be enforced by, the Placement Agent.
j. Survival. The representations, warranties, agreements and
covenants of the Company set forth in Sections 3, 4, 5 and 8 hereof shall
survive the closings hereunder notwithstanding any investigation conducted by
or on behalf of any Purchasers and the representations, warranties, covenants
and agreements of the Purchasers set forth in Section 2 hereof shall survive
the closings hereunder notwithstanding any investigation conducted by or on
behalf of the Company. Moreover, none of the representations and warranties
made by the Company herein shall act as a waiver of any rights or remedies a
Purchaser may have under applicable federal or state securities laws. The
Company agrees to indemnify and hold harmless each Purchaser and each of such
Purchaser's officers, directors, employees, partners, members, agents and
affiliates for expense, loss or damage arising as a result of or related to any
breach or alleged breach by the Company of any of its representations or
covenants set forth herein, including advancement of reasonable expenses as
they are incurred.
k. Publicity. The Company and each Purchaser shall have the
right to review before issuance any press releases, SEC or NASD filings, or any
other public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior review
of the Purchasers, to make any press release or SEC or NASD filings with
respect to such transactions as is required by applicable law and regulations
(although the Purchasers shall be consulted by the Company in connection with
any such press release and filing prior to its release and shall be provided
with a copy thereof) and such press release shall not name the Purchasers.
l. Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other
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<PAGE> 18
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.
m. Termination. In the event that the Closing shall not have
occurred on or before that date which is five days after the date hereof,
unless the parties agree otherwise, this Agreement shall terminate at the close
of business on such date. Notwithstanding any termination of this Agreement,
any party not in breach of this Agreement shall preserve all rights and
remedies it may have against another party hereto for a breach of this
Agreement prior to or relating to the termination hereof.
n. Joint Participation. Each party to this Agreement has
participated in the negotiation of this Agreement, the Warrants and the
Registration Rights Agreement. As such, the language used herein and therein
shall be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction will be applied against
any party to this Agreement.
o. Equitable Relief. The Company acknowledges that a breach by
it of its obligations hereunder will cause irreparable harm to a Purchaser by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of
its obligations hereunder (including, but not limited to, its obligations
pursuant to Section 5 hereof) will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Agreement
(including, but not limited to, its obligations pursuant to Section 5 hereof),
that a Purchaser shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach and requiring immediate
compliance by the Company, including the issuance and transfer of the
Securities, without the necessity of showing economic loss and without any bond
or other security being required.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 19
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
ROBOTIC VISION SYSTEMS, INC.
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
PURCHASER:
By:
------------------------------------------------
RESIDENCE:
ADDRESS:
SUBSCRIPTION AMOUNT
Number of Common Shares:
Purchase Price ($3.05 per Common Share): $
Number of Warrant Shares Subject to Warrant
Purchase Price ($1.375 per Warrant Share) $
Total Purchase Price $
<PAGE> 1
EXHIBIT A
VOID AFTER 5:00 P.M., NEW YORK CITY
TIME, ON JULY __, 2004
(UNLESS EXTENDED PURSUANT TO SECTION 2 HEREOF)
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED
HEREBY MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES
LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
Right to Purchase __________ Shares of
Common Stock, par value $.01 per share
Date: July __, 1999
ROBOTIC VISION SYSTEMS, INC.
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, _________________________, or
its registered assigns, is entitled to purchase from ROBOTIC VISION SYSTEMS,
INC., a corporation organized under the laws of the State of Delaware (the
"COMPANY"), at any time or from time to time during the period specified in
Section 2 hereof, _______________________ (__________) fully paid and
nonassessable shares of the Company's common stock, par value $.01 per share
(the "COMMON STOCK"), at an exercise price per share equal to the Exercise
Price (as defined below). The number of shares of Common Stock purchasable
hereunder (the "WARRANT SHARES") and the Exercise Price are subject to
adjustment as provided in Section 4 hereof. The term "WARRANTS" means this
Warrant and the other warrants of the Company issued pursuant to, and
identified as Warrants in, that certain Securities Purchase Agreement, dated as
of July 19, 1999, by and among the Company and the other signatories thereto
(the "SECURITIES PURCHASE AGREEMENT").
<PAGE> 2
This Warrant is subject to the following terms, provisions and
conditions:
1. Exercise Price; Manner of Exercise; Issuance of Certificates;
Payment for Shares.
(a) Exercise Price and Six Month Adjustments. The
Exercise price for each Warrant Share shall initially be $4.02, subject to
adjustment as provided herein (the "EXERCISE PRICE"). In the event that the
Reset Price (as defined below) of the Common Stock on January 14, 2000 (the
"RESET DATE") is less than the Exercise Price in effect immediately prior to
such Reset Date, then on and after such Reset Date the Exercise Price shall
equal 100% of the Reset Price of the Common Stock on such Reset Date, subject
to adjustment as provided elsewhere herein. "RESET PRICE" means that price
which shall be computed as the arithmetic average of the Closing Bid Prices (as
defined below) for the Common Stock during the thirty (30) consecutive trading
days immediately preceding such date of determination. All such determinations
shall be appropriately adjusted for any stock dividend, stock split or other
similar transaction during such period. "CLOSING BID PRICE" means, for any
security as of any date, the last closing bid price for such security on the
Nasdaq National Market as reported by Bloomberg Financial Markets
("BLOOMBERG"), or, if the Nasdaq National Market is not the principal trading
market for such security, the last closing bid price of such security on the
principal securities exchange or trading market where such security is listed
or traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or, if no
closing bid price is reported for such security by Bloomberg, the last closing
trade price for such security as reported by Bloomberg, or, if no last closing
trade price is reported for such security by Bloomberg, the average of the bid
prices of any market makers for such security as reported in the "pink sheets"
by the National Quotation Bureau, Inc. If the Closing Bid Price cannot be
calculated for such security on such date on any of the foregoing bases, the
Closing Bid Price of such security on such date shall be the fair market value
as mutually determined by the Company and the holders of the Warrants. If a
market value cannot be calculated as of such date on any of the foregoing
bases, the Closing Bid Price shall be the average fair market value as
reasonably determined by an investment banking firm selected by the Company and
reasonably acceptable to a majority in interest of the holders of Warrants,
with the costs of the appraisal to be borne by the Company.
(b) Subject to the provisions hereof, including, without
limitation, the limitations contained in Section 7 hereof, this Warrant may be
exercised by the holder hereof, in whole or in part, by the surrender of this
Warrant, together with a completed exercise agreement in the form attached
hereto (the "EXERCISE AGREEMENT"), to the Company during normal business hours
on any business day at the Company's principal executive offices (or such other
office or agency of the Company as it may designate by notice to the holder
hereof), and upon (i) payment to the Company in cash, by certified or official
bank check or by wire transfer for the account of the Company, of the Exercise
Price for the Warrant Shares specified in the Exercise Agreement or (ii) if the
holder is effectuating a Cashless Exercise (as defined in Section 11(c) hereof)
pursuant to Section 11(c) hereof, delivery to the Company of a written notice
of an election to effect a Cashless Exercise for the Warrant Shares specified
in the Exercise Agreement. The Warrant Shares so purchased shall be
<PAGE> 3
deemed to be issued to the holder hereof or such holder's designee, as the
record owner of such shares, as of the close of business on the date on which
this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for such shares as
set forth above or, if such date is not a business date, on the next succeeding
business date. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not exceeding three
(3) business days, after this Warrant shall have been so exercised (the
"DELIVERY PERIOD"). The certificates so delivered shall be in such
denominations as may be requested by the holder hereof and shall be registered
in the name of such holder or such other name as shall be designated by such
holder. If this Warrant shall have been exercised only in part, then, unless
this Warrant has expired, the Company shall, at its expense, at the time of
delivery of such certificates, deliver to the holder a new Warrant representing
the number of shares with respect to which this Warrant shall not then have
been exercised.
If, at any time, a holder of this Warrant submits this Warrant, an
Exercise Agreement and payment to the Company of the Exercise Price for each of
the Warrant Shares specified in the Exercise Agreement (including pursuant to a
Cashless Exercise), and the Company fails for any reason to deliver, on or
prior to the fourth business day following the expiration of the Delivery
Period for such exercise, the number of shares of Common Stock to which the
holder is entitled upon such exercise (an "EXERCISE DEFAULT"), then the Company
shall pay to the holder payments ("EXERCISE DEFAULT PAYMENTS") for an Exercise
Default in the amount of (a) (N/365), multiplied by (b) the amount by which the
Market Price (as defined in Section 4(l) hereof) on the date the Exercise
Agreement giving rise to the Exercise Default is transmitted in accordance with
this Section 1 (the "EXERCISE DEFAULT DATE") exceeds the Exercise Price,
multiplied by (c) the number of shares of Common Stock the Company failed to so
deliver in such Exercise Default, multiplied by (d) .24, where N = the number
of days from the Exercise Default Date to the date that the Company effects the
full exercise of this Warrant which gave rise to the Exercise Default. The
accrued Exercise Default Payment for each calendar month shall be paid in cash
by the fifth (5th) day of the month following the month in which it has
accrued; and
Nothing herein shall limit the holder's right to pursue actual damages
for the Company's failure to maintain a sufficient number of authorized shares
of Common Stock as required pursuant to the terms of Section 3(b) hereof or to
otherwise issue shares of Common Stock upon exercise of this Warrant in
accordance with the terms hereof, and the holder shall have the right to pursue
all remedies available at law or in equity (including a decree of specific
performance and/or injunctive relief).
2. Period of Exercise.
(a) This Warrant is immediately exercisable, at any time
or from time to time on or after the date of initial issuance of this Warrant
(the "ISSUE DATE") and before 5:00 p.m., New York City time, on the fifth (5th)
anniversary of the Issue Date (the "EXERCISE PERIOD"). The Exercise Period
shall automatically be extended by one (1) day for each day on which the
Company
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<PAGE> 4
does not have a number of shares of Common Stock reserved for issuance upon
exercise hereof at least equal to the number of shares of Common Stock issuable
upon exercise hereof.
3. Certain Agreements of the Company. The Company hereby
covenants and agrees as follows:
(a) Shares to be Fully Paid. All Warrant Shares will,
upon issuance in accordance with the terms of this Warrant, be validly issued,
fully paid, and nonassessable and free from all taxes, liens, claims and
encumbrances.
(b) Reservation of Shares. During the Exercise Period,
the Company shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of Common
Stock to provide for the exercise in full of this Warrant (without giving
effect to the limitations on exercise set forth in Section 7(g) hereof).
(c) Listing. The Company shall promptly secure the
listing of the shares of Common Stock issuable upon exercise of this Warrant
upon each national securities exchange or automated quotation system, if any,
upon which shares of Common Stock are then listed or become listed (subject to
official notice of issuance upon exercise of this Warrant) and shall maintain,
so long as any other shares of Common Stock shall be so listed, such listing of
all shares of Common Stock from time to time issuable upon the exercise of this
Warrant; and the Company shall so list on each national securities exchange or
automated quotation system, as the case may be, and shall maintain such listing
of, any other shares of capital stock of the Company issuable upon the exercise
of this Warrant if and so long as any shares of the same class shall be listed
on such national securities exchange or automated quotation system.
(d) Certain Actions Prohibited. The Company will not, by
amendment of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed by it hereunder, but will at all times
in good faith assist in the carrying out of all the provisions of this Warrant
and in the taking of all such action as may reasonably be requested by the
holder of this Warrant in order to protect the economic benefit inuring to the
holder hereof and the exercise privilege of the holder of this Warrant against
dilution or other impairment, consistent with the tenor and purpose of this
Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.
(e) Successors and Assigns. This Warrant will be binding
upon any entity succeeding to the Company by merger, consolidation, or
acquisition of all or substantially all of the Company's assets.
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<PAGE> 5
(f) Blue Sky Laws. The Company shall, on or before the
date of issuance of any Warrant Shares, take such actions as the Company shall
reasonably determine are necessary to qualify the Warrant Shares for, or obtain
exemption for the Warrant Shares for, sale to the holder of this Warrant upon
the exercise hereof under applicable securities or "blue sky" laws of the
states of the United States, and shall provide evidence of any such action so
taken to the holder of this Warrant prior to such date; provided, however, that
the Company shall not be required to qualify as a foreign corporation or file a
general consent to service of process in any such jurisdiction.
4. Antidilution Provisions. During the Exercise Period, the
Exercise Price and the number of Warrant Shares issuable hereunder and for
which this Warrant is then exercisable pursuant to Section 2 hereof shall be
subject to adjustment from time to time as provided in this Section 4.
In the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall be rounded up
or down to the nearest cent.
(a) Adjustment of Exercise Price. Except as otherwise
provided in Sections 4(c) and 4(e) hereof, if and whenever during the Exercise
Period the Company issues or sells, or in accordance with Section 4(b) hereof
is deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share less than the Market Price (as
hereinafter defined) on the date of issuance (a "DILUTIVE ISSUANCE"), then
effective immediately upon the Dilutive Issuance, the Exercise Price will be
adjusted in accordance with the following formula:
E' = E x O + P/M
---------------------
CSDO
where:
E' = the adjusted Exercise Price;
E = the then current Exercise Price;
M = the then current Market Price (as defined in
Section 4(1)(ii));
O = the number of shares of Common Stock
outstanding immediately prior to the
Dilutive Issuance;
P = the aggregate consideration, calculated as set
forth in Section 4(b) hereof, received by the
Company upon such Dilutive Issuance; and
CSDO = the total number of shares of Common Stock
Deemed Outstanding (as defined in Section
4(l)(i)) immediately after the Dilutive
Issuance.
(b) Effect on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under Section 4(a) hereof,
the following will be applicable:
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<PAGE> 6
(i) Issuance of Rights or Options. If the
Company in any manner issues or grants any warrants, rights or options, whether
or not immediately exercisable, to subscribe for or to purchase Common Stock or
other securities exercisable, convertible into or exchangeable for Common Stock
("CONVERTIBLE SECURITIES") (such warrants, rights and options to purchase
Common Stock or Convertible Securities are hereinafter referred to as
"OPTIONS") and the price per share for which Common Stock is issuable upon the
exercise of such Options is less than the Market Price in effect on the date of
issuance of such Options ("BELOW MARKET OPTIONS"), then the maximum total
number of shares of Common Stock issuable upon the exercise of all such Below
Market Options (assuming full exercise, conversion or exchange of Convertible
Securities, if applicable) will, as of the date of the issuance or grant of
such Below Market Options, be deemed to be outstanding and to have been issued
and sold by the Company for such price per share. For purposes of the
preceding sentence, the "price per share for which Common Stock is issuable
upon the exercise of such Below Market Options" is determined by dividing (i)
the total amount, if any, received or receivable by the Company as
consideration for the issuance or granting of all such Below Market Options,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the exercise of all such Below Market Options, plus, in the
case of Convertible Securities issuable upon the exercise of such Below Market
Options, the minimum aggregate amount of additional consideration payable upon
the exercise, conversion or exchange thereof at the time such Convertible
Securities first become exercisable, convertible or exchangeable, by (ii) the
maximum total number of shares of Common Stock issuable upon the exercise of
all such Below Market Options (assuming full conversion of Convertible
Securities, if applicable). No further adjustment to the Exercise Price will
be made upon the actual issuance of such Common Stock upon the exercise of such
Below Market Options or upon the exercise, conversion or exchange of
Convertible Securities issuable upon exercise of such Below Market Options.
(ii) Issuance of Convertible Securities.
(A) If the Company in any manner issues
or sells any Convertible Securities, whether or not immediately convertible
(other than where the same are issuable upon the exercise of Options) and the
price per share for which Common Stock is issuable upon such exercise,
conversion or exchange (as determined pursuant to Section 4(b)(ii)(B) if
applicable) is less than the Market Price in effect on the date of issuance of
such Convertible Securities, then the maximum total number of shares of Common
Stock issuable upon the exercise, conversion or exchange of all such
Convertible Securities will, as of the date of the issuance of such Convertible
Securities, be deemed to be outstanding and to have been issued and sold by the
Company for such price per share. For the purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon such exercise,
conversion or exchange" is determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the issuance or sale
of all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the exercise,
conversion or exchange thereof at the time such Convertible Securities first
become exercisable, convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise, conversion or
exchange of all such Convertible Securities. No further adjustment to the
Exercise Price will be made upon the
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<PAGE> 7
actual issuance of such Common Stock upon exercise, conversion or exchange of
such Convertible Securities.
(B) If the Company in any manner issues
or sells any Convertible Securities with a fluctuating conversion or exercise
price or exchange ratio (a "VARIABLE RATE CONVERTIBLE SECURITY"), then the
"price per share for which Common Stock is issuable upon such exercise,
conversion or exchange" for purposes of the calculation contemplated by Section
4(b)(ii)(A) shall be deemed to be the lowest price per share which would be
applicable (assuming all holding period and other conditions to any discounts
contained in such Convertible Security have been satisfied) if the Market Price
on the date of issuance of such Convertible Security was 75% of the Market
Price on such date (the "ASSUMED VARIABLE MARKET PRICE"). Further, if the
Market Price at any time or times thereafter is less than or equal to the
Assumed Variable Market Price last used for making any adjustment under this
Section 4 with respect to any Variable Rate Convertible Security, the Exercise
Price in effect at such time shall be readjusted to equal the Exercise Price
which would have resulted if the Assumed Variable Market Price at the time of
issuance of the Variable Rate Convertible Security had been 75% of the Market
Price existing at the time of the adjustment required by this sentence.
(iii) Change in Option Price or Conversion Rate.
If there is a change at any time in (i) the amount of additional consideration
payable to the Company upon the exercise of any Options; (ii) the amount of
additional consideration, if any, payable to the Company upon the exercise,
conversion or exchange of any Convertible Securities; or (iii) the rate at
which any Convertible Securities are convertible into or exchangeable for
Common Stock (in each such case, other than under or by reason of provisions
designed to protect against dilution), the Exercise Price in effect at the time
of such change will be readjusted to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities still
outstanding provided for such changed additional consideration or changed
conversion rate, as the case may be, at the time initially granted, issued or
sold.
(iv) Treatment of Expired Options and Unexercised
Convertible Securities. If, in any case, the total number of shares of Common
Stock issuable upon exercise of any Option or upon exercise, conversion or
exchange of any Convertible Securities is not, in fact, issued and the rights
to exercise such Option or to exercise, convert or exchange such Convertible
Securities shall have expired or terminated, the Exercise Price then in effect
will be readjusted to the Exercise Price which would have been in effect at the
time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such expiration or
termination (other than in respect of the actual number of shares of Common
Stock issued upon exercise or conversion thereof), never been issued.
(v) Calculation of Consideration Received. If
any Common Stock, Options or Convertible Securities are issued, granted or sold
for cash, the consideration received therefor for purposes of this Warrant will
be the amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable
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<PAGE> 8
expenses paid or incurred by the Company in connection with such issuance,
grant or sale. In case any Common Stock, Options or Convertible Securities are
issued or sold for a consideration part or all of which shall be other than
cash, the amount of the consideration other than cash received by the Company
will be the fair market value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Company will be the Market Price thereof as of the date of
receipt. In case any Common Stock, Options or Convertible Securities are
issued in connection with any merger or consolidation in which the Company is
the surviving corporation, the amount of consideration therefor will be deemed
to be the fair market value of such portion of the net assets and business of
the non-surviving corporation as is attributable to such Common Stock, Options
or Convertible Securities, as the case may be. The fair market value of any
consideration other than cash or securities will be determined in good faith by
an investment banker or other appropriate expert of national reputation
selected by the Company and reasonably acceptable to the holder hereof, with
the costs of such appraisal to be borne by the Company.
(vi) Exceptions to Adjustment of Exercise Price.
No adjustment to the Exercise Price will be made (i) upon the exercise of any
warrants, options or convertible securities issued and outstanding on the Issue
Date and set forth on Schedule 3(c) of the Securities Purchase Agreement in
accordance with the terms of such securities as of such date; (ii) upon the
grant or exercise of any stock or options which may hereafter be granted or
exercised under any employee benefit plan of the Company now existing or to be
implemented in the future, so long as the issuance of such stock or options is
approved by a majority of the non-employee members of the Board of Directors of
the Company or a majority of the members of a committee of non-employee
directors established for such purpose; (iii) upon the issuance of any Warrants
issued or issuable in accordance with the terms of the Securities Purchase
Agreement; (iv) upon exercise of the Warrants; or (v) upon issuance of Common
Stock in a firm commitment underwritten public offering.
(c) Subdivision or Combination of Common Stock. If the
Company, at any time during the Exercise Period, subdivides (by any stock
split, stock dividend, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a greater number of shares, then,
after the date of record for effecting such subdivision, the Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced.
If the Company, at any time during the Exercise Period, combines (by reverse
stock split, recapitalization, reorganization, reclassification or otherwise)
its shares of Common Stock into a smaller number of shares, then, after the
date of record for effecting such combination, the Exercise Price in effect
immediately prior to such combination will be proportionately increased.
(d) Adjustment in Number of Shares. Upon each adjustment
of the Exercise Price pursuant to the provisions of this Section 4, the number
of shares of Common Stock issuable upon exercise of this Warrant and for which
this Warrant is or may become exercisable shall be adjusted by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable or for which this
Warrant is or may become
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<PAGE> 9
exercisable (as applicable) upon exercise of this Warrant immediately prior to
such adjustment and dividing the product so obtained by the adjusted Exercise
Price.
(e) Consolidation, Merger or Sale.
(i) In case of any consolidation of the Company
with, or merger of the Company into any other corporation, or in case of any
sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company at
any time during the Exercise Period, then as a condition of such consolidation,
merger or sale or conveyance, adequate provision will be made whereby the
holder of this Warrant will have the right to acquire and receive upon exercise
of this Warrant in lieu of the shares of Common Stock immediately theretofore
acquirable upon the exercise of this Warrant, such shares of stock, securities,
cash or assets as may be issued or payable with respect to or in exchange for
the number of shares of Common Stock immediately theretofore acquirable and
receivable upon exercise of this Warrant had such consolidation, merger or sale
or conveyance not taken place. In any such case, the Company will make
appropriate provision to insure that the provisions of this Section 4 hereof
will thereafter be applicable as nearly as may be in relation to any shares of
stock or securities thereafter deliverable upon the exercise of this Warrant.
The Company will not effect any consolidation, merger or sale or conveyance
unless prior to the consummation thereof, the successor corporation (if other
than the Company) assumes by written instrument the obligations under this
Warrant and the obligations to deliver to the holder of this Warrant such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, the holder may be entitled to acquire. Notwithstanding the
foregoing, in the event of any such sale or conveyance, the holder of this
Warrant shall, at its option, have the right to receive, and, in the event of
any such merger, consolidation, sale or conveyance which involves the receipt
of cash consideration by the equity holders of the Company's capital stock or
in which the surviving or continuing entity is not a publicly traded
corporation whose common stock is listed for trading on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market or the Nasdaq
SmallCap Market, the holder of this Warrant shall be entitled to receive, in
connection with such transaction, cash consideration equal to the fair market
value (as determined in good faith by the holder of this Warrant) of this
Warrant.
(ii) No adjustment shall be made to the Exercise
Price pursuant to the provisions of this Section 4 upon the issuance by the
Company of any securities as consideration in a merger, consolidation or
acquisition of assets, or in connection with any strategic partnership or joint
venture (the primary purpose of which is not to raise equity capital), or as
consideration for the acquisition of a business, product or license by the
Company.
(f) Distribution of Assets. In case the Company shall
declare or make any distribution of its assets (or rights to acquire its
assets) to holders of Common Stock as a partial liquidating dividend, stock
repurchase by way of return of capital or otherwise (including any dividend or
distribution to the Company's shareholders of cash or shares (or rights to
acquire shares) of capital stock of a subsidiary) (a "DISTRIBUTION"), at any
time during the Exercise Period, then the holder of this Warrant shall be
entitled upon exercise of this Warrant for the purchase of any or all
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<PAGE> 10
of the shares of Common Stock subject hereto, to receive the amount of such
assets (or rights) which would have been payable to the holder had such holder
been the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution.
(g) Notice of Adjustment. Upon the occurrence of any
event which requires any adjustment of the Exercise Price, then, and in each
such case, the Company shall give notice thereof to the holder of this Warrant,
which notice shall state the Exercise Price resulting from such adjustment and
the increase or decrease in the number of Warrant Shares purchasable at such
price upon exercise, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based, provided that
such notice shall not contain any material nonpublic information. Such
calculation shall be certified by the chief financial officer of the Company.
(h) Minimum Adjustment of Exercise Price. No adjustment
of the Exercise Price shall be made in an amount of less than 1% of the
Exercise Price in effect at the time such adjustment is otherwise required to
be made, but any such lesser adjustment shall be carried forward and shall be
made at the time and together with the next subsequent adjustment which,
together with any adjustments so carried forward, shall amount to not less than
1% of such Exercise Price.
(i) No Fractional Shares. No fractional shares of Common
Stock are to be issued upon the exercise of this Warrant, but the Company shall
pay a cash adjustment in respect of any fractional share which would otherwise
be issuable in an amount equal to the same fraction of the Market Price of a
share of Common Stock on the date of such exercise.
(j) Other Notices. In case at any time:
(i) the Company shall declare any dividend upon
the Common Stock payable in shares of stock of any class or make any other
distribution (other than dividends or distributions payable in cash out of
retained earnings consistent with the Company's past practices with respect to
declaring dividends and making distributions) to the holders of the Common
Stock;
(ii) the Company shall offer for subscription pro
rata to the holders of the Common Stock any additional shares of stock of any
class or other rights;
(iii) there shall be any capital reorganization of
the Company, or reclassification of the Common Stock, or consolidation or
merger of the Company with or into, or sale of all or substantially all of its
assets to, another corporation or entity; or
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a
record shall be taken for determining the holders of Common Stock entitled to
receive any such dividend, distribution, or subscription rights or for
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<PAGE> 11
determining the holders of Common Stock entitled to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, notice of the date (or, if not then known, a reasonable estimate
thereof by the Company) when the same shall take place. Such notice shall also
specify the date on which the holders of Common Stock shall be entitled to
receive such dividend, distribution, or subscription rights or to exchange
their Common Stock for stock or other securities or property deliverable upon
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding-up, as the case may be. Such notice shall
be given at least seventy-five (75) days prior to the record date or the date
on which the Company's books are closed in respect thereto, but in no event
prior to the public disclosure thereof. Failure to give any such notice or any
defect therein shall not affect the validity of the proceedings referred to in
clauses (i), (ii), (iii) and (iv) above.
(k) Certain Events. If, at any time during the Exercise
Period, any event occurs of the type contemplated by the adjustment provisions
of this Section 4 but not expressly provided for by such provisions, the
Company will give notice of such event as provided in Section 4(g) hereof, and
the Company's Board of Directors will make an appropriate adjustment in the
Exercise Price and the number of shares of Common Stock acquirable upon
exercise of this Warrant so that the rights of the holder shall be neither
enhanced nor diminished by such event.
(l) Certain Definitions.
(i) "COMMON STOCK DEEMED OUTSTANDING" shall mean
the number of shares of Common Stock actually outstanding (not including shares
of Common Stock held in the treasury of the Company), plus (x) in the case of
any adjustment required by Section 4(a) resulting from the issuance of any
Options, the maximum total number of shares of Common Stock issuable upon the
exercise of the Options for which the adjustment is required (including any
Common Stock issuable upon the conversion of Convertible Securities issuable
upon the exercise of such Options), and (y) in the case of any adjustment
required by Section 4(a) resulting from the issuance of any Convertible
Securities, the maximum total number of shares of Common Stock issuable upon
the exercise, conversion or exchange of the Convertible Securities for which
the adjustment is required, as of the date of issuance of such Convertible
Securities, if any.
(ii) "MARKET PRICE," as of any date, (i) means the
average of the Closing Bid Prices for the shares of Common Stock for the five
(5) consecutive trading days immediately preceding such date.
(iii) "COMMON STOCK," for purposes of this Section
4, includes the Common Stock and any additional class of stock of the Company
having no preference as to dividends or distributions on liquidation, provided
that the shares purchasable pursuant to this Warrant shall include only Common
Stock in respect of which this Warrant is exercisable, or shares resulting from
any subdivision or combination of such Common Stock, or in the case of any
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<PAGE> 12
reorganization, reclassification, consolidation, merger, or sale of the
character referred to in Section 4(e) hereof, the stock or other securities or
property provided for in such Section.
5. Issue Tax. The issuance of certificates for Warrant Shares
upon the exercise of this Warrant shall be made without charge to the holder of
this Warrant or such shares for any issuance tax or other costs in respect
thereof, provided 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 the holder of this Warrant.
6. No Rights or Liabilities as a Shareholder. This Warrant shall
not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase Warrant Shares, 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 Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
7. Transfer, Exchange, Redemption and Replacement of Warrant.
(a) Restriction on Transfer. This Warrant and the rights
granted to the holder hereof are transferable, in whole or in part, upon
surrender of this Warrant, together with a properly executed assignment in the
form attached hereto, at the office or agency of the Company referred to in
Section 7(e) below, provided, however, that any transfer or assignment shall be
subject to the conditions set forth in Sections 7(f) and (g) hereof and to the
provisions of Sections 2(f) and 2(g) of the Securities Purchase Agreement.
Until due presentment for registration of transfer on the books of the Company,
the Company may treat the registered holder hereof as the owner and holder
hereof for all purposes, and the Company shall not be affected by any notice to
the contrary. Notwithstanding anything to the contrary contained herein, the
registration rights described in Section 8 hereof are assignable only in
accordance with the provisions of that certain Registration Rights Agreement,
dated as of July 19, 1999, by and among the Company and the other signatories
thereto (the "REGISTRATION RIGHTS AGREEMENT").
(b) Warrant Exchangeable for Different Denominations.
This Warrant is exchangeable, upon the surrender hereof by the holder hereof at
the office or agency of the Company referred to in Section 7(e) below, for new
Warrants of like tenor of different denominations representing in the aggregate
the right to purchase the number of shares of Common Stock which may be
purchased hereunder, each of such new Warrants to represent the right to
purchase such number of shares as shall be designated by the holder hereof at
the time of such surrender.
(c) Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant and, in the case of any such loss, theft, or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon
surrender and
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<PAGE> 13
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
(d) Cancellation; Payment of Expenses. Upon the
surrender of this Warrant in connection with any transfer, exchange, or
replacement as provided in this Section 7, this Warrant shall be promptly
canceled by the Company. The Company shall pay all taxes (other than
securities transfer taxes) and all other expenses (other than legal expenses,
if any, incurred by the Holder or transferees) and charges payable in
connection with the preparation, execution, and delivery of Warrants pursuant
to this Section 7. The Company shall indemnify and reimburse the holder of
this Warrant for all costs and expenses (including legal fees) incurred by such
holder in connection with the enforcement of its rights hereunder.
(e) Warrant Register. The Company shall maintain, at its
principal executive offices (or such other office or agency of the Company as
it may designate by notice to the holder hereof), a register for this Warrant,
in which the Company shall record the name and address of the person in whose
name this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.
(f) Exercise or Transfer Without Registration. If, at
the time of the surrender of this Warrant in connection with any exercise,
transfer, or exchange of this Warrant, this Warrant (or, in the case of any
exercise, the Warrant Shares issuable hereunder), shall not be registered under
the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such exercise, transfer, or
exchange, (i) that the holder or transferee of this Warrant, as the case may
be, furnish to the Company a written opinion of counsel (which opinion shall be
in form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such exercise, transfer, or exchange may be
made without registration under the Securities Act and under applicable state
securities or blue sky laws (the cost of which shall be borne by the Company if
the Company's counsel renders such an opinion and up to $250 of such cost shall
be borne by the Company if the holder's counsel is requested to render such
opinion), (ii) that the holder or transferee execute and deliver to the Company
an investment letter in form and substance acceptable to the Company and (iii)
that the transferee be an "ACCREDITED INVESTOR" as defined in Rule 501(a)
promulgated under the Securities Act; provided that no such opinion, letter, or
status as an "accredited investor" shall be required in connection with a
transfer pursuant to Rule 144 under the Securities Act.
(g) Additional Restrictions on Exercise or Transfer. In
no event shall any holder have the right to exercise this Warrant for shares of
Common Stock to the extent that, after giving effect to such exercise, the
holder hereof (together with such holder's affiliates), through exercise of
this Warrant or otherwise, would have acquired beneficial ownership of a number
shares of Common Stock during the 60-day period ending on and including the
date such exercise was implemented (the "60 DAY PERIOD"), which when added to
the number of shares of Common Stock beneficially owned by such holder and its
affiliates at the beginning of the 60 Day Period, is in excess of 10.00% of the
shares of the Common Stock outstanding immediately after giving effect
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<PAGE> 14
to such exercise. For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by a holder and its affiliates shall include
the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but
shall exclude the number of shares of Common Stock which would be issuable (i)
upon exercise of the remaining unexercised Warrants beneficially owned by such
holder and its affiliates and (ii) upon conversion or exercise of the
unconverted or unexercised portion of any other securities of the Company
beneficially owned by such holder and its affiliates subject to a limitation on
conversion or exercise analogous to the limitation contained in this paragraph,
it being agreed that Article II, Section c(ii) of the Prepaid Warrants and
Section 7(g) of the Incentive Warrants issued to Wingate Capital Ltd. and
Fisher Capital Ltd. on February 18, 1999 are analogous provisions. Except as
set forth in the preceding sentence, for purposes of this paragraph beneficial
ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended. For purposes of this paragraph,
in determining the number of outstanding shares of Common Stock a holder may
rely on the number of outstanding shares of Common Stock as reflected in (1)
the Company's most recent Form 10-Q or Form 10-K, as the case may be, (2) a
more recent public announcement by the Company or (3) any other notice by the
Company or its transfer agent setting forth the number of shares of Common
Stock outstanding. For any reason at any time, upon the written or oral
request of the holder hereof, the Company shall immediately confirm orally and
in writing to such holder the number of shares Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of this Warrant
and other securities by such holder or its affiliates since the date as of
which such number of outstanding shares of Common Stock was reported.
8. Registration Rights. The initial holder of this Warrant (and
certain assignees thereof) is entitled to the benefit of such registration
rights in respect of the Warrant Shares as are set forth in the Registration
Rights Agreement, including the right to assign such rights to certain
assignees, as set forth therein.
9. Notices. Any notices required or permitted to be given under
the terms of this Warrant shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier, or by confirmed telecopy, in each case addressed to a party. The
addresses for such communications shall be:
If to the Company:
Robotic Vision Systems, Inc.
5 Shawmut Road
Canton, MA 02021
Telephone: (781) 821-0830
Telecopy: (781) 828-9852
Attn: Pat V. Costa, Chairman and Chief Executive
Officer
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<PAGE> 15
with a copy to:
Cooperman Levitt Winikoff Lester & Newman, P.C.
800 Third Avenue
New York, NY 10022
Telephone: (212) 407-1287
Telecopy: (212) 755-2839
Attn: Ira Roxland, Esq.
If to the holder, at such address as such holder shall have provided in writing
to the Company, or at such other address as such holder furnishes by notice
given in accordance with this Section 9.
10. Governing Law; Jurisdiction. This Warrant shall be governed
by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed in the State of New York. The
Company irrevocably consents to the jurisdiction of the United States federal
courts and state courts located in the City of New York in the State of New
York in any suit or proceeding based on or arising under this Warrant and
irrevocably agrees that all claims in respect of such suit or proceeding may be
determined in such courts. The Company irrevocably waives any objection to the
laying of venue and the defense of an inconvenient forum to the maintenance of
such suit or proceeding. The Company further agrees that service of process
upon the Company mailed by certified or registered mail shall be deemed in
every respect effective service of process upon the Company in any such suit or
proceeding. Nothing herein shall affect the holder's right to serve process in
any other manner permitted by law. The Company agrees that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
11. Miscellaneous.
(a) Amendments. This Warrant and any provision hereof
may only be amended by an instrument in writing signed by the Company and the
holder hereof.
(b) Descriptive Headings. The descriptive headings of
the several Sections of this Warrant are inserted for purposes of reference
only, and shall not affect the meaning or construction of any of the provisions
hereof.
(c) Cashless Exercise. Notwithstanding anything to the
contrary contained in this Warrant, if the resale of the Warrant Shares by the
holder is not then registered pursuant to an effective registration statement
under the Securities Act, this Warrant may be exercised at any time after the
first anniversary of the Issue Date until the end of the Exercise Period, by
presentation and surrender of this Warrant to the Company at its principal
executive offices with a written notice of the holder's intention to effect a
cashless exercise, including a calculation of the number of shares of Common
Stock to be issued upon such exercise in accordance with the terms hereof (a
"CASHLESS EXERCISE"). In the event of a Cashless Exercise, in lieu of paying
the Exercise Price in cash, the
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<PAGE> 16
holder shall surrender this Warrant for that number of shares of Common Stock
determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price of a share of the Common Stock
on the date of exercise and the Exercise Price, and the denominator of which
shall be the then current Market Price per share of Common Stock.
(d) Business Day. For purposes of this Warrant, the term
"business day" means any day, other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by
law, regulation or executive order to close.
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<PAGE> 17
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
ROBOTIC VISION SYSTEMS, INC.
By:
--------------------------------
Name:
-----------------------------
Title:
----------------------------
<PAGE> 18
FORM OF EXERCISE AGREEMENT
(TO BE EXECUTED BY THE HOLDER IN ORDER TO EXERCISE THE WARRANT)
To: Robotic Vision Systems, Inc.
5 Shawmut Road
Canton, MA 02021
Telecopy: (781) 828-9852
The undersigned hereby irrevocably exercises the right to purchase
_____________ shares of the Common Stock of ROBOTIC VISION SYSTEMS, INC., a
corporation organized under the laws of the State of Delaware (the "COMPANY"),
evidenced by the attached Warrant, and herewith makes payment of the Exercise
Price with respect to such shares in full, all in accordance with the
conditions and provisions of said Warrant.
(i) The undersigned agrees not to offer, sell, transfer or
otherwise dispose of any Common Stock obtained on exercise of the Warrant,
except under circumstances that will not result in a violation of the
Securities Act of 1933, as amended, or any state securities laws, and agrees
that the following legend may be affixed to the stock certificate for the
Common Stock hereby subscribed for if resale of such Common Stock is not
registered or if Rule 144 is unavailable:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE
SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
(ii) The undersigned requests that stock certificates for such
shares be issued, and a Warrant representing any unexercised portion hereof be
issued, pursuant to the Warrant in the name of the Holder and delivered to the
undersigned at the address set forth below:
Dated:
----------------- --------------------------------------
Signature of Holder
--------------------------------------
Name of Holder (Print)
Address:
-------------------------------------
-------------------------------------
-------------------------------------
<PAGE> 19
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:
<TABLE>
<S> <C> <C>
Name of Assignee Address No of Shares
- ---------------- ------- ------------
</TABLE>
, and hereby irrevocably constitutes and appoints ______________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.
Dated: ____________, ____
In the presence of
- ------------------
Name:
----------------------------
Signature:
-----------------------
Title of Signing Officer or Agent (if any):
--------------------------
Address:
--------------------------
--------------------------
Note: The above signature should correspond
exactly with the name on the face of
the within Warrant.
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of July 19,
1999, by and among ROBOTIC VISION SYSTEMS, INC., a corporation organized under
the laws of the State of Delaware (the "COMPANY"), and the undersigned
(together with affiliates, the "INITIAL INVESTORS").
WHEREAS:
A. In connection with the Securities Purchase Agreement of even
date herewith by and between the Company and the Initial Investors (the
"SECURITIES PURCHASE AGREEMENT"), the Company has agreed, upon the terms and
subject to the conditions contained therein, to issue and sell to the Initial
Investors, in the amounts set forth on the execution pages of the Securities
Purchase Agreement, (i) common stock purchase warrants (the "WARRANTS") which
entitle the holder thereof to acquire shares of the Company's common stock, par
value $.01 per share (the "COMMON STOCK"), upon the terms and subject to the
limitations and conditions set forth in the Warrants (the shares of Common
Stock issuable upon exercise of, or otherwise pursuant to, the Warrants shall
be deemed "WARRANT SHARES") and (ii) shares of Common Stock (the "COMMON
SHARES");
B. To induce the Initial Investors to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"SECURITIES ACT"), and applicable state securities laws; and
NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investors hereby agree as follows:
1. DEFINITIONS.
a. As used in this Agreement, the following terms shall
have the following meanings:
(i) "INVESTORS" means the Initial Investors and
any transferees or assignees who agree to become bound by the provisions of
this Agreement in accordance with Section 9 hereof.
(ii) "REGISTER," "REGISTERED," and "REGISTRATION"
refer to a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act and pursuant to
Rule 415 under the Securities Act or any successor rule providing for offering
securities on a continuous basis ("RULE 415"), and the declaration or ordering
of effectiveness of such Registration Statement by the United States Securities
and Exchange Commission (the "SEC").
<PAGE> 2
(iii) "REGISTRABLE SECURITIES" means the Common
Shares and the Warrant Shares issued or issuable upon exercise of, or otherwise
with respect to, the Warrants and any shares of capital stock issued or
issuable, from time to time (with any adjustments), as a distribution on or in
exchange for or otherwise with respect to any of the foregoing.
(iv) "REGISTRATION STATEMENT" means a registration
statement of the Company under the Securities Act.
b. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the Securities
Purchase Agreement and the Warrants.
2. REGISTRATION.
a. Mandatory Registration. The Company shall prepare,
and, on or before the ninetieth (90th) day following the date of the Closing
under the Securities Purchase Agreement (the "FILING DATE"), file with the SEC
a Registration Statement on Form S-1, subject to Section 2(e) (or, if Form S-1
is not then available, on such form of Registration Statement as is then
available to effect a registration of all of the Registrable Securities
required to be included in such Registration Statement, subject to the consent
of the Initial Investors (as determined pursuant to Section 11(j) hereof))
covering the resale of at least 100% of the maximum number of shares of Common
Stock issuable upon the full exercise of the Warrants issued at the Closing
plus 100% of the Common Shares issued at closing. The Registration Statement
filed hereunder, to the extent allowable under the Securities Act and the Rules
promulgated thereunder (including Rule 416), shall state that such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable, either (i) to the holders of the Common Shares
and (ii) upon exercise of the Warrants, to prevent dilution resulting from
stock splits, stock dividends or similar transactions. The Registrable
Securities included in any Registration Statement filed hereunder shall be
allocated to the Investors as set forth in Section 11(k) hereof. The
Registration Statement filed hereunder (and each amendment or supplement
thereto, and each request for acceleration of effectiveness thereof) shall be
provided to (and subject to the approval of) the Initial Investors and their
counsel prior to its filing or other submission.
b. Underwritten Offering. If any offering pursuant to
the Registration Statement pursuant to Section 2(a) hereof involves an
underwritten offering, the Investors who hold a majority in interest of the
Registrable Securities subject to such underwritten offering, with the consent
of the Initial Investors, shall have the right to select one legal counsel to
represent the Investors (at the Investors' expense) and an investment banker or
bankers and manager or managers to administer the offering, which investment
banker or bankers or manager or managers shall be reasonably satisfactory to
the Company. In the event that any Investors elect not to participate in such
underwritten offering, the Registration Statement covering all of the
Registrable Securities shall contain appropriate plans of distribution
reasonably satisfactory to the Investors participating in such underwritten
offering and the Investors electing not to participate in such underwritten
offering (including, without limitation, the ability of nonparticipating
Investors to sell from time to time and at any time during the effectiveness of
such Registration Statement).
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<PAGE> 3
c. Payments by the Company. The Company shall cause
each Registration Statement required to be filed pursuant to Section 2(a)
hereof to become effective as soon as practicable, but in no event later than
the ninetieth (90th) day following the date it was required to be filed
hereunder (each a "REGISTRATION DEADLINE"). If (i) (A) the Registration
Statement required to be filed by the Company pursuant to Section 2(a) hereof
is not declared effective by the SEC on or before the Registration Deadline
applicable to such Registration Statement or (B) the Registration Statement
required to be filed by the Company pursuant to Section 3(b) hereof is not
declared effective by the SEC within sixty (60) days after the applicable
Registration Trigger Date (as defined in Section 3(b) hereof), or (ii) if,
after any such Registration Statement has been declared effective by the SEC,
sales of all of the Registrable Securities required to be covered by such
Registration Statement (including any Registrable Securities required to be
registered pursuant to Section 3(b) hereof) cannot be made pursuant to such
Registration Statement (by reason of a stop order or the Company's failure to
update the Registration Statement or any other reason outside the control of
the Investors) or (iii) the Common Stock (including any Registrable Securities)
is not listed or included for quotation on the Nasdaq National Market ("NNM"),
the New York Stock Exchange (the "NYSE") or the American Stock Exchange (the
"AMEX") at any time after the initial Registration Deadline hereunder, then the
Company will make payments to the Investors in such amounts and at such times
as shall be determined pursuant to this Section 2(c) as partial relief for the
damages to the Investors by reason of any such delay in or reduction of their
ability to sell the Registrable Securities (which remedy shall not be exclusive
of any other remedies available at law or in equity). The Company shall pay to
each Investor an amount equal to the product of (i) the aggregate Purchase
Price of the Warrants and the Common Shares held by such Investor (including,
without limitation, Warrants that have been exercised for Warrant Shares then
held by such Investor) (the "AGGREGATE SHARE PRICE"), multiplied by (ii) twelve
ten thousandths (.0012), for each day during the first thirty (30) day period
(A) after a Registration Deadline and prior to the date the applicable
Registration Statement filed pursuant to Section 2(a) is declared effective by
the SEC, (B) after the sixtieth (60th) day following a Registration Trigger
Date (as defined in Section 3(b)) and prior to the date the Registration
Statement filed pursuant to Section 3(b) hereof is declared effective by the
SEC, and (C) during which sales of any Registrable Securities cannot be made
pursuant to any such Registration Statement after the Registration Statement
has been declared effective or the Common Stock (including any Registrable
Securities) is not listed or included for quotation on the NNM, NYSE or AMEX.
In addition, the Company shall pay to each Investor an amount equal to the
product of (i) the Aggregate Share Price, multiplied by (ii) eight-teen ten
thousandths (.0018), for each day following the initial thirty (30) day period
referred to in the preceding sentence (A) after a Registration Deadline and
prior to the date the applicable Registration Statement filed pursuant to
Section 2(a) is declared effective by the SEC, (B) after the sixtieth (60th)
day following a Registration Trigger Date and prior to the date the
Registration Statement filed pursuant to Section 3(b) hereof is declared
effective by the SEC, and (C) during which sales of any Registrable Securities
cannot be made pursuant to any such Registration Statement after the
Registration Statement has been declared effective or the Common Stock
(including any Registrable Securities) is not listed or included for quotation
on the NNM, NYSE or AMEX; provided, however, that there shall be excluded from
each such period any delays which are solely attributable to changes (other
than corrections of Company mistakes with respect to information previously
provided by the Investors) required by the Investors in the Registration
Statement with respect to information relating to the Investors, including,
without limitation, changes to the plan of distribution. (For example, if
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<PAGE> 4
a Registration Statement is not effective by the Registration Deadline
applicable thereto, the Company would pay $1,200 for each day during the first
thirty (30) days and $1,800 for each day thereafter with respect to each
$1,000,000 of Aggregate Share Price until the Registration Statement becomes
effective.) Such amounts shall be paid in cash. Payments of cash pursuant
hereto shall be made within five (5) days after the end of each period that
gives rise to such obligation, provided that, if any such period extends for
more than thirty (30) days, interim payments shall be made for each such thirty
(30) day period.
d. Piggy-Back Registrations. If at any time prior to
the expiration of the Registration Period (as hereinafter defined) when the
Registrable Securities are not the subject of an effective registration
statement the Company shall file with the SEC a Registration Statement relating
to an offering for its own account or the account of others under the
Securities Act of any of its equity securities (other than on Form S-4 or Form
S-8 or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee benefit
plans), the Company shall send to each Investor who is entitled to registration
rights under this Section 2(d) written notice of such determination and, if
within five (5) business days after the date of such notice, such Investor
shall so request in writing, the Company shall include in such Registration
Statement all or any part of the Registrable Securities such Investor requests
to be registered, except that if, in connection with any underwritten public
offering, the managing underwriter(s) thereof shall impose a limitation on the
number of shares of Common Stock which may be included in the Registration
Statement because, in such underwriter(s)' judgment, marketing or other factors
dictate such limitation is necessary to facilitate public distribution, then
the Company shall be obligated to include in such Registration Statement only
such limited portion of the Registrable Securities with respect to which such
Investor has requested inclusion hereunder as the underwriter shall permit.
Any exclusion of Registrable Securities shall be made pro rata among the
Investors seeking to include Registrable Securities, in proportion to the
number of Registrable Securities sought to be included by such Investors;
provided, however, that the Company shall not exclude any Registrable
Securities unless the Company has first excluded all outstanding securities,
the holders of which are not entitled to inclusion of such securities in such
Registration Statement or are not entitled to pro rata inclusion with the
Registrable Securities; and provided, further, however, that, after giving
effect to the immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities having the
right to include such securities in the Registration Statement other than
holders of securities entitled to inclusion of their securities in such
Registration Statement by reason of demand registration rights. No right to
registration of Registrable Securities under this Section 2(d) shall be
construed to limit any registration required under Section 2(a) hereof. If an
offering in connection with which an Investor is entitled to registration under
this Section 2(d) is an underwritten offering, then each Investor whose
Registrable Securities are included in such Registration Statement shall,
unless otherwise agreed by the Company, offer and sell such Registrable
Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same
terms and conditions as other shares of Common Stock included in such
underwritten offering.
e. Eligibility for Form S-3. The Company agrees that
when it meets the requirements for the use of Form S-3 it shall register the
Registrable Securities on Form S-3 (or file
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<PAGE> 5
a Post Effective Amendment on Form S-3 to the Registration Statement on Form
S-1, if applicable) for the sale by the Initial Investors and any other
Investor of the Registrable Securities and the Company shall file all reports
required to be filed by the Company with the SEC in a timely manner so as to
maintain such eligibility for the use of Form S-3. Notwithstanding the
foregoing, the Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement on Form
S-3 (or such Post Effective Amendment) covering the Registrable Securities has
been declared effective by the SEC.
3. OBLIGATIONS OF THE COMPANY.
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations:
a. The Company shall prepare and file with the SEC the
Registration Statements required by Section 2(a) (but in no event later than
the applicable Filing Date with respect thereto), and cause such Registration
Statements relating to Registrable Securities to become effective as soon as
practicable after such filing (but in no event later than the Registration
Deadline applicable thereto), and keep such Registration Statements effective
pursuant to Rule 415 at all times until such date as is the earlier of (i) the
date on which all of the Registrable Securities have been sold and (ii) the
date on which all of the Registrable Securities (in the reasonable opinion of
counsel to the Initial Investors) may be immediately sold to the public without
registration or restriction pursuant to Rule 144(k) under the Securities Act or
any successor provision (the "REGISTRATION PERIOD"), which Registration
Statements (including any amendments or supplements thereto and prospectuses
contained therein and all documents incorporated by reference therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein
not misleading.
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to the
Registration Statements and the prospectus used in connection with the
Registration Statements as may be necessary to keep the Registration Statements
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities of the Company covered by the
Registration Statements until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof as set forth in the Registration Statements. In
the event the number of shares available under all Registration Statements
filed pursuant to this Agreement is, for any three (3) consecutive trading days
(the last of such three (3) trading days being the "REGISTRATION TRIGGER
DATE"), insufficient to cover one hundred percent (100%) of the Registrable
Securities issued or issuable upon exercise of the Warrants (without giving
effect to any limitations on exercise contained in the Warrants), the Company
shall amend the Registration Statements, or file a new Registration Statement
(on the short form available therefor, if applicable), or both, so as to cover
one hundred percent (100%) of the Registrable Securities issued or issuable
(without giving effect to any limitations on exercise contained in the
Warrants) as of the Registration Trigger Date, in each case, as soon as
practicable, but in any event within fifteen (15) days after the Registration
Trigger Date (based on the market price then in effect of the Common Stock and
other relevant factors on
-5-
<PAGE> 6
which the Company reasonably elects to rely). The Company shall cause such
amendment(s) and/or new Registration Statement to become effective as soon as
practicable following the filing thereof, but in any event within sixty (60)
days after the applicable Registration Trigger Date.
c. The Company shall furnish to each Investor whose
Registrable Securities are included in any Registration Statement and its legal
counsel (i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one copy of each such Registration
Statement and any amendment thereto, each preliminary prospectus and prospectus
and each amendment or supplement thereto, and, in the case of any Registration
Statement referred to in Section 2(a), each letter written by or on behalf of
the Company to the SEC or the staff of the SEC (including, without limitation,
any request to accelerate the effectiveness of any Registration Statement or
amendment thereto), and each item of correspondence from the SEC or the staff
of the SEC, in each case relating to any such Registration Statement (other
than any portion, if any, thereof which contains information for which the
Company has sought confidential treatment), (ii) on the date of effectiveness
of any Registration Statement or any amendment thereto, a notice stating that
such Registration Statement or amendment has been declared effective, and (iii)
such number of copies of a prospectus, including a preliminary prospectus, and
all amendments and supplements thereto and such other documents as such
Investor may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor.
d. The Company shall use its best efforts to (i)
register and qualify the Registrable Securities covered by each Registration
Statement under such other securities or "blue sky" laws of such jurisdictions
in the United States as each Investor who holds Registrable Securities being
offered reasonably requests, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications
in effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not
be required in connection therewith or as a condition thereto to (a) qualify to
do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (b) subject itself to general taxation in
any such jurisdiction, (c) file a general consent to service of process in any
such jurisdiction, (d) provide any undertakings that cause the Company undue
expense or burden, or (e) make any change in its charter or bylaws, which in
each case the Board of Directors of the Company determines to be contrary to
the best interests of the Company and its stockholders.
e. In the event the Investors who hold a majority in
interest of the Registrable Securities being offered in an offering select
underwriters for the offering, the Company shall enter into and perform its
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the underwriters of such offering.
f. As promptly as practicable after becoming aware of
such event, the Company shall notify each Investor of the happening of any
event, of which the Company has knowledge, as
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a result of which the prospectus included in a Registration Statement, as then
in effect, includes an untrue statement of a material fact or omission to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and use its best efforts promptly to prepare
a supplement or amendment to the Registration Statement to correct such untrue
statement or omission, and deliver such number of copies of such supplement or
amendment to each Investor as such Investor may reasonably request.
g. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest practicable moment (including in each
case by amending or supplementing such Registration Statement) and to notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance of such
order and the resolution thereof (and if such Registration Statement is
supplemented or amended, deliver such number of copies of such supplement or
amendment to each Investor as such Investor may reasonably request).
h. The Company shall permit a single firm of counsel
designated by the Initial Investors to review each Registration Statement (at
the Initial Investors' expense) and all amendments and supplements thereto in a
reasonable period of time prior to their filing with the SEC, and not file any
document in a form to which such counsel reasonably objects and will not
request acceleration of the effectiveness of any Registration Statement without
prior notice to such counsel.
i. The Company shall make generally available to its
security holders as soon as practical, but not later than ninety (90) days
after the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the Securities Act) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of a Registration Statement.
j. At the request of any Investor, the Company shall
furnish, on the date of effectiveness of any Registration Statement which
involves an underwritten offering (i) an opinion, dated as of such date, from
counsel representing the Company addressed to the Investors and in form, scope
and substance as is customarily given in an underwritten public offering and
(ii) a letter, dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and the Investors.
k. The Company shall make available for inspection by
(i) any Investor, (ii) any underwriter participating in any disposition
pursuant to a Registration Statement, (iii) one firm of attorneys and one firm
of accountants or other agents retained by the Investors, and (iv) one firm of
attorneys retained by all such underwriters (collectively, the "INSPECTORS")
all pertinent financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the "RECORDS"), as shall be
reasonably deemed necessary by each Inspector to enable each Inspector to
exercise its due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information which any Inspector may
reasonably request for purposes of such due
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<PAGE> 8
diligence; provided, however, that each Inspector shall hold in confidence and
shall not make any disclosure (except to an Investor) of any Record or other
information which the Company determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless (a) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in any Registration Statement, (b) the release of such Records is
ordered pursuant to a subpoena or other order from a court or government body
of competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement. The Company shall not be required to disclose any
confidential information in such Records to any Inspector until and unless such
Inspector shall have entered into confidentiality agreements (in form and
substance satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(k). Each Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing herein shall be
deemed to limit the Investors' ability to sell Registrable Securities in a
manner which is otherwise consistent with applicable laws and regulations.
l. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws (as determined in good faith by the Company upon advice of
outside legal counsel), (ii) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement,
(iii) the release of such information is ordered pursuant to a subpoena or
other order from a court or governmental body of competent jurisdiction, (iv)
such information has been made generally available to the public other than by
disclosure in violation of this or any other agreement, or (v) such Investor
consents to the form and content of any such disclosure. The Company agrees
that it shall, upon learning that disclosure of such information concerning an
Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Investor prior
to making such disclosure, and allow the Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
m. The Company shall use its best efforts to promptly
either (i) cause all of the Registrable Securities covered by any Registration
Statement to be listed on the NYSE or the AMEX or another national securities
exchange and on each additional national securities exchange on which
securities of the same class or series issued by the Company are then listed,
if any, if the listing of such Registrable Securities is then permitted under
the rules of such exchange, or (ii) secure the designation and quotation of all
of the Registrable Securities covered by any Registration Statement on the NNM
and, without limiting the generality of the foregoing, to arrange for or
maintain at least two market makers to register with the National Association
of Securities Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities.
n. The Company shall provide a transfer agent for the
Registrable Securities not later than the effective date of any Registration
Statement.
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<PAGE> 9
o. The Company shall cooperate with the Investors who
hold Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to any Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
managing underwriter or underwriters, if any, or the Investors may reasonably
request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request, and, within three (3)
business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and
shall cause legal counsel selected by the Company to deliver, to the transfer
agent for the Registrable Securities (with copies to the Investors whose
Registrable Securities are included in such Registration Statement) an opinion
of such counsel in the form attached hereto as EXHIBIT 1.
p. At the request of any Investor, the Company shall
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus used
in connection with such Registration Statement as may be necessary in order to
change the plan of distribution set forth in such Registration Statement.
q. The Company shall comply with all applicable laws
related to a Registration Statement and offering and sale of securities and all
applicable rules and regulations of governmental authorities in connection
therewith (including, without limitation, the Securities Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated by
the SEC.)
r. The Company shall take all such other actions as any
Investor or the underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of the Registrable Securities.
s. From and after the date of this Agreement, the
Company shall not, and shall not agree to, allow the holders of any securities
of the Company to include any of their securities in any Registration Statement
under Section 2(a) hereof or any amendment or supplement thereto under Section
3(b) hereof without the consent of the holders of a majority in interest of the
Registrable Securities.
4. OBLIGATIONS OF THE INVESTORS.
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
a. It shall be a condition precedent to the obligations
of the Company to complete the registration pursuant to this Agreement with
respect to the Registrable Securities of a particular Investor that such
Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company
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<PAGE> 10
may reasonably request. At least five (5) business days prior to the first
anticipated filing date of the Registration Statement, the Company shall notify
each Investor of the information the Company requires from each such Investor.
b. Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of each
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from such Registration Statement.
c. In the event Investors holding a majority in interest
of the Registrable Securities being offered determine to engage the services of
an underwriter, each Investor agrees to enter into and perform such Investor's
obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities, unless such Investor has notified
the Company in writing of such Investor's election not to participate in such
underwritten distribution.
d. Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
Sections 3(f) or 3(g), such Investor will immediately discontinue disposition
of Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Sections 3(f) or 3(g) and,
if so directed by the Company, such Investor shall deliver to the Company (at
the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in such Investor's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice.
e. No Investor may participate in any underwritten
distribution hereunder unless such Investor (i) agrees to sell such Investor's
Registrable Securities on the basis provided in any underwriting arrangements
in usual and customary form entered into by the Company, (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements, and (iii) agrees to pay its pro rata share of all
underwriting discounts and commissions and any expenses in excess of those
payable by the Company pursuant to Section 5 below.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees,
the fees and disbursements of counsel for the Company and the fees and
disbursements contemplated by Section 3(k) hereof shall be borne by the
Company. In addition, the Company shall pay all of the Investors' reasonable
costs and expenses (including reasonable legal fees) incurred in connection
with the enforcement of the rights of the Investors hereunder.
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6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. To the extent permitted by law, the Company will
indemnify, hold harmless and defend (i) each Investor who holds such
Registrable Securities, and (ii) the directors, officers, partners, members,
employees, agents and each person who controls any Investor within the meaning
of Section 15 of the Securities Act or Section 20 of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), if any, (each, an "INDEMNIFIED
PERSON"), against any joint or several losses, claims, damages, liabilities or
expenses (collectively, together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened, in
respect thereof, "CLAIMS") to which any of them may become subject insofar as
such Claims arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or the omission
or alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary
to make the statements made therein, in light of the circumstances under which
the statements therein were made, not misleading, or (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
other applicable securities law, including, without limitation, any state
securities law, or any rule or regulation thereunder relating to the offer or
sale of the Registrable Securities (the matters in the foregoing clauses (i)
through (iii) being, collectively, "VIOLATIONS"). Subject to the restrictions
set forth in Section 6(c) with respect to the number of legal counsel, the
Company shall reimburse the Investors and each other Indemnified Person,
promptly as such expenses are incurred and are due and payable, for any
reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a): (i) shall not apply to a Claim arising out of
or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person
expressly for use in the Registration Statement or any such amendment thereof
or supplement thereto; (ii) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld; and (iii) with
respect to any preliminary prospectus, shall not inure to the benefit of any
Indemnified Person if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely basis in the
prospectus, as then amended or supplemented, if such corrected prospectus was
timely made available by the Company pursuant to Section 3(c) hereof, and the
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Violation and such Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9 hereof.
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<PAGE> 12
b. In connection with any Registration Statement in
which an Investor is participating, each such Investor agrees severally and not
jointly to indemnify, hold harmless and defend, to the same extent and in the
same manner set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement, its employees, agents and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, and any other
stockholder selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such stockholder within
the meaning of the Securities Act or the Exchange Act (collectively and
together with an Indemnified Person, an "INDEMNIFIED PARTY"), against any Claim
to which any of them may become subject, under the Securities Act, the Exchange
Act or otherwise, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement; and subject to Section 6(c) such Investor will
reimburse any legal or other expenses (promptly as such expenses are incurred
and are due and payable) reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior written consent of such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be liable under
this Agreement (including this Section 6(b) and Section 7) for only that amount
as does not exceed the net proceeds actually received by such Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9 hereof. Notwithstanding anything to the contrary contained herein,
the indemnification agreement contained in this Section 6(b) with respect to
any preliminary prospectus shall not inure to the benefit of any Indemnified
Party if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented, and the Indemnified Party failed to utilize such
corrected prospectus.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that such indemnifying party shall not be
entitled to assume such defense and an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential conflicts of interest between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding or the actual or potential defendants in, or targets
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<PAGE> 13
of, any such action include both the Indemnified Person or the Indemnified
Party and the indemnifying party and any such Indemnified Person or Indemnified
Party reasonably determines that there may be legal defenses available to such
Indemnified Person or Indemnified Party which are different from or in addition
to those available to such indemnifying party. The indemnifying party shall
pay for only one separate legal counsel for the Indemnified Persons or the
Indemnified Parties, as applicable, and such legal counsel shall be selected by
Investors holding a majority-in-interest of the Registrable Securities
included in the Registration Statement to which the Claim relates (with the
approval of the Initial Investors if they hold Registrable Securities included
in such Registration Statement), if the Investors are entitled to
indemnification hereunder, or by the Company, if the Company is entitled to
indemnification hereunder, as applicable. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6, except to
the extent that the indemnifying party is actually prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
7. CONTRIBUTION.
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6, (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
such fraudulent misrepresentation, and (iii) contribution (together with any
indemnification or other obligations under this Agreement) by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities under the
Registration Statement.
8. REPORTS UNDER THE EXCHANGE ACT.
With a view to making available to the Investors the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration ("RULE 144"), the
Company agrees to:
a. file with the SEC in a timely manner and make and
keep available all reports and other documents required of the Company under
the Securities Act and the Exchange Act so long as the Company remains subject
to such requirements (it being understood that nothing herein shall limit the
Company's obligations under Section 4(c) of the Securities Purchase Agreement)
and the filing and availability of such reports and other documents is required
for the applicable provisions of Rule 144; and
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<PAGE> 14
b. furnish to each Investor so long as such Investor
owns Warrants or Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements
of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Investors to sell such securities under Rule
144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights of the Investors hereunder, including the right to have the
Company register Registrable Securities pursuant to this Agreement, shall be
automatically assignable by each Investor to any transferee of all or any
portion of the Warrants or the Registrable Securities if: (i) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company after such assignment, (ii)
the Company is furnished with written notice of (a) the name and address of
such transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned, (iii) following such
transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act and applicable
state securities laws, (iv) the transferee or assignee agrees in writing for
the benefit of the Company to be bound by all of the provisions contained
herein, and (v) such transfer shall have been made in accordance with the
applicable requirements of the Securities Purchase Agreement.
10. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company and
Investors who hold a majority in interest of the Registrable Securities;
provided, however, that no amendment hereto which restricts the ability of an
Investor to elect not to participate in an underwritten offering shall be
effective against any Investor which does not consent in writing to such
amendment; provided, further, however, that no consideration shall be paid to
an Investor by the Company in connection with an amendment hereto unless each
Investor similarly affected by such amendment receives a pro-rata amount of
consideration from the Company. Unless an Investor otherwise agrees, each
amendment hereto must similarly affect each Investor. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon each Investor
and the Company.
11. MISCELLANEOUS.
a. A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
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<PAGE> 15
b. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier or by
confirmed telecopy, and shall be effective five (5) days after being placed in
the mail, if mailed, or upon receipt or refusal of receipt, if delivered
personally or by courier or confirmed telecopy, in each case addressed to a
party. The addresses for such communications shall be:
If to the Company:
Robotic Vision Systems, Inc.
5 Shawmut Road
Canton, MA 02021
Telephone: (781) 821-0830
Telecopy: (781) 828-9852
Attn: Pat V. Costa, Chairman and Chief Executive Officer
with a copy to:
Cooperman Levitt Winikoff Lester & Newman, P.C.
800 Third Avenue
New York, NY 10022
Telephone: (212) 407-1289
Telecopy: (212) 755-2839
Attn: Ira Roxland, Esq.
and if to any Investor, at such address as such Investor shall have provided in
writing to the Company, or at such other address as each such party furnishes
by notice given in accordance with this Section 11(b).
c. Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.
d. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed in the State of New York. The Company irrevocably consents
to the jurisdiction of the United States federal courts and the state courts
located in the City of New York in the State of New York in any suit or
proceeding based on or arising under this Agreement and irrevocably agrees that
all claims in respect of such suit or proceeding may be determined in such
courts. The Company irrevocably waives the defense of an inconvenient forum to
the maintenance of such suit or proceeding. The Company further agrees that
service of process upon the Company, mailed by first class mail shall be deemed
in every respect effective service of process upon the Company in any such suit
or proceeding. Nothing herein shall affect the Investors' right to serve
process in any other manner permitted by law. The Company agrees that a final
non-appealable judgment in any such suit or proceeding shall be
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<PAGE> 16
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.
e. This Agreement, the Securities Purchase Agreement
(including all schedules and exhibits thereto) and the Warrants constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. This Agreement, the Securities Purchase Agreement and the
Warrants supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
f. Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a
party, may be delivered to the other party hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the party so delivering this
Agreement.
i. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
j. All consents, approvals and other determinations to
be made by the Investors or the Initial Investors pursuant to this Agreement
shall be made by the Investors or the Initial Investors holding a majority in
interest of the Registrable Securities (determined as if all Warrants then
outstanding had been exercised for Registrable Securities) held by all
Investors or Initial Investors, as the case may be.
k. The initial number of Registrable Securities included
on any Registration Statement and each increase (if any) to the number of
Registrable Securities included thereon shall be allocated pro rata among the
Investors based on the number of Registrable Securities held by each Investor
at the time of such establishment or increase, as the case may be. In the
event an Investor shall sell or otherwise transfer any of such holder's
Registrable Securities, each transferee shall be allocated a pro rata portion
of the number of Registrable Securities included on a Registration Statement
for such transferor. Any shares of Common Stock included on a Registration
Statement and which remain allocated to any person or entity which does not
hold any Registrable Securities shall be allocated to the remaining Investors,
pro rata based on the number of shares of Registrable Securities then held by
such Investors. For the avoidance of doubt, the number of Registrable
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<PAGE> 17
Securities held by any Investor shall be determined as if all Warrants then
outstanding were exercised for Registrable Securities.
l. Each party to this Agreement has participated in the
negotiation and drafting of this Agreement. As such, the language used herein
shall be deemed to be the language chosen by the parties hereto to express
their mutual intent, and no rule of strict construction will be applied against
any party to this Agreement.
m. For purposes of this Agreement, the term "business
day" means any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law,
regulation or executive order to close.
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<PAGE> 18
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first above written.
ROBOTIC VISION SYSTEMS, INC.
By:
------------------------------------------------
Name:
----------------------------------------------
Its:
-----------------------------------------------
INITIAL INVESTORS:
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<PAGE> 19
EXHIBIT 1
TO
REGISTRATION
RIGHTS
AGREEMENT
[Date]
[Name and address
of transfer agent]
RE: ROBOTIC VISION SYSTEMS, INC.
Ladies and Gentlemen:
We are counsel to ROBOTIC VISION SYSTEMS, INC., a corporation
organized under the laws of the State of Delaware (the "COMPANY"), and we
understand that [Name of Investor] (the "HOLDER") has purchased from the
Company (i) common stock purchase warrants (the "WARRANTS") which entitle the
holder thereof to acquire shares of the Company's common stock, par value $.01
per share (the "COMMON STOCK"), and (ii) shares of Common Stock (the "COMMON
SHARES"). Pursuant to a Registration Rights Agreement, dated as of July 19,
1999, by and among the Company and the signatories thereto (the "REGISTRATION
RIGHTS AGREEMENT"), the Company agreed with the Holder, among other things, to
register the Registrable Securities (as that term is defined in the
Registration Rights Agreement) under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), upon the terms provided in the Registration Rights
Agreement. In connection with the Company's obligations under the Registration
Rights Agreement, on _____________, 1999, the Company filed a Registration
Statement on Form S-___ (File No. 333- _____________) (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "SEC") relating to
the Registrable Securities, which names the Holder as a selling stockholder
thereunder. The Registration Statement was declared effective by the SEC on
_____________, 1999.
[Other customary introductory and scope of examination language to be
inserted]
Based on the foregoing, we are of the opinion that the Registrable
Securities have been registered under the Securities Act.
[Other customary language to be included.]
Very truly yours,
cc: [Name of Investor]
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