Exhibit 10.4
COMPUTER MOTION, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 19th
day of February, 2002, by and between Computer Motion, Inc., a Delaware
corporation (the "Company"), and Corlund Electronics (the "Investor").
WHEREAS, the Company and Investor wish to enter into this Agreement to
set forth the terms of Investor's purchase of Common Stock from the Company.
NOW THEREFORE, BE IT RESOLVED, that the parties hereto, intending to be
legally bound, hereby agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK.
1.1 CLOSING. Subject to the satisfaction or waiver of the conditions
set forth in Sections 4 and 5 hereof, the closing of the sale and issuance of
Common Stock of the Company to Investor shall take place at the offices of
Computer Motion Inc, 000-x Xxxxxxx Xxxxx, Xxxxx Xxxxxxx, XX 00000. As soon as
practicable after Closing, the Company shall deliver to Investor a certificate
representing that number of Shares as determined according to Section 1.2
hereof, against payment of the purchase price therefor by cancellation of
indebtedness as described below.
1.2 SALE AND ISSUANCE OF COMMON STOCK. Subject to the terms and
conditions of this Agreement, Investor agrees to purchase, and the Company
agrees to sell and issue to Investor, at the Closing, 134,518 shares of the
Company's Common Stock (the "Shares") for an aggregate purchase price of
$551,525 or $4.10 per share (the "Purchase Price"). The Purchase Price for the
Shares shall be paid by the cancellation of $374,073 of outstanding accounts
receivable amounts owed to Investor by the Company for prior vendor purchases
made by the Company and for the payment of $177,452 of inventory purchases made
by the Investor on behalf of the Company for future shipments of product during
2002. See Exhibit A attached for the detailed Accounts Receivable Aging from the
Investor as of January 30, 2002 and the detailed Inventory Listing with such
inventory to be consigned to the Company by the Investor who is obligated to
warehouse and insure the inventory with a release schedule provided by the
Company with all inventory shipped within six months of this Agreement. Should
the shares not be fully registered as provided in Section 6. "Registration
Rights" of this Agreement, Investor forbearance shall be deemed to be the full
and adequate consideration for the Shares with the Investor having the right to
collect from the Company the amounts due under the Accounts Receivable and
Inventory sums owed to the Investor as described above.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to Investor as follows:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own and operate its properties and assets and to carry on its business as
presently conducted. The Company is duly qualified and authorized to transact
business and is in good standing as a foreign corporation in each jurisdiction
where the nature of its activities and of its properties makes such
qualification necessary, except where failure to so qualify would not have a
material adverse effect upon the Company.
2.2 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the performance of the Company's
obligations hereunder and the authorization, issuance, sale and delivery of the
Shares has been taken or will be taken prior to the Closing. This Agreement when
executed and delivered by the Company, shall constitute a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, or (b) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
2.3 VALID ISSUANCE OF THE SHARES; COMPLIANCE WITH SECURITIES LAWS.
When issued, sold and delivered in compliance with the provisions of this
Agreement and the Company's certificate of incorporation, the Shares will be
duly and validly issued, fully paid and nonassessable and will be free of any
liens, encumbrances, and restrictions on transfer other than restrictions on
transfer under this Agreement and applicable state and federal securities laws.
Assuming the accuracy of the representations and warranties of Investor set
forth in this Agreement, the offer, sale and issuance of the Shares as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act, and have been registered or qualified (or are exempt from
registration or qualification) under the registration, permit, or qualification
requirements under all applicable state securities laws.
3. REPRESENTATIONS AND WARRANTIES OF INVESTOR
Investor hereby represents and warrants to the Company as follows:
3.1 LEGAL POWER. Investor has the power and authority to enter into
this Agreement, to purchase the Shares hereunder and to carry out and perform
its obligations under the terms of this Agreement.
3.2 DUE EXECUTION. This Agreement has been duly authorized, executed
and delivered by Investor, and, upon due execution and delivery by the Company,
this Agreement will be a valid and binding obligation of Investor, enforceable
in accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally, or (b) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies.
3.3 INVESTMENT REPRESENTATIONS.
(a) Investor is acquiring the Shares for its own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act, provided that the Investor may determine to transfer the
shares to an affiliated Corporation.
(b) Investor understands that (i) the Shares have not been
registered under the Securities Act by reason of a specific exemption therefrom,
that the securities are "restricted securities" and Investor must hold the
Shares indefinitely, and that it must, therefore, bear the
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economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration; (ii) each certificate representing the Shares will be endorsed
with the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"1933 ACT") AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR IF THE
COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933
ACT."
and (iii) the Company will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied; provided, however, that no such opinion of counsel shall
be necessary if the sale, transfer or assignment is made pursuant to SEC Rule
144 and Investor provides the Company with evidence reasonably satisfactory to
the Company and its counsel that the proposed transaction satisfies the
requirements of Rule 144. The Company agrees to remove the foregoing legend from
any securities if the requirements of SEC Rule 144(k) (or any successor rule or
regulation) apply with respect to such securities and the Company and its
counsel are provided with reasonably satisfactory evidence that the requirements
of Rule 144(k) apply.
(c) Investor has not been offered the Shares by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by such media.
(d) Investor acknowledges that it is able to fend for itself, can
bear the economic risk of its investment and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of acquisition of the Shares and of making an informed investment
decision with respect thereto.
(e) Investor's principal place of business or address is as set
forth on the signature page hereto, and, if it is an individual, it does not
reside in any state of the United States other than the state, if any, specified
in its address on the signature page.
(f) Investor acknowledges that an investment in the Shares is
speculative and involves a high degree of risk of loss of all or part of
Investor's investment therein.
(g) Investor is an "accredited investor" within the meaning of
SEC Rule 501(a) of Regulation D of the Securities Act of 1933, as presently in
effect (the "Securities Act").
(h) Investor understands that the foregoing representations and
warranties are to be relied upon by the Company as a basis for exemption of the
sale of the Shares under the Securities Act, under the securities laws of all
applicable states and for other purposes. In the event
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any of such representations and warranties become inaccurate or untrue prior to
each closing, Investor will promptly notify the Company.
4. CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING.
The obligations of Investor under subsection 1.1 of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against Investor unless
consented to by Investor in writing thereto:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of each closing, except those representations
and warranties qualified by materiality, which shall be true and correct in all
respects, with the same force and effect as though such representations and
warranties had been made on and as of the Closing.
4.2 PERFORMANCE OF OBLIGATIONS. The Company shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained herein that are required to be performed or complied with
by it on or prior to the Closing.
4.3 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States, of
any state or any foreign country that are required in connection with the lawful
sale and issuance of the Shares pursuant to this Agreement shall have been duly
obtained and shall be effective on and as of the Closing. No stop order or other
order enjoining the sale of the Shares shall have been issued and no proceedings
for such purpose shall be pending or, to the knowledge of the Company,
threatened by the SEC, the California Commissioner of Corporations, or any
commissioner of corporations or similar officer of any other state or foreign
country having jurisdiction over this transaction. At the time of the Closing,
the sale and issuance of the Shares shall be legally permitted by all laws and
regulations to which Investor and the Company are subject.
4.4 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
and instruments incident thereto shall be reasonably satisfactory in form and
substance to Investor, which shall have received all such counterpart original
and certified or other copies of such documents as it may reasonably request.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.
The obligations of the Company to Investor under this Agreement are
subject to the fulfillment, on or before the Closing, of each of the following
conditions by Investor:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Investor contained in Section 3 hereof shall be true and correct
in all material respects on and as of the Closing, except those representations
and warranties qualified by materiality, which shall be true and correct in all
respects, with the same force and effect as though such representations and
warranties had been made on and as of the Closing.
5.2 QUALIFICATIONS. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States, of
any state or any foreign country
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that are required in connection with the lawful sale and issuance of the Shares
pursuant to this Agreement shall have been duly obtained and shall be effective
on and as of the Closing. No stop order or other order enjoining the sale of the
Shares shall have been issued and no proceedings for such purpose shall be
pending or, to the knowledge of the Company, threatened by the SEC, the
California Commissioner of Corporations, or any commissioner of corporations or
similar officer of any other state or foreign country having jurisdiction over
this transaction. At the time of the Closing, the sale and issuance of the
Shares shall be legally permitted by all laws and regulations to which Investor
and the Company are subject.
5.3 PERFORMANCE. All covenants, agreements and conditions contained
in this Agreement to be performed by Investor on or prior to the Closing shall
have been performed or complied with in all material respects.
6. REGISTRATION RIGHTS.
The Company will promptly file a registration statement on Form S-3 (or
similar short form registration) under the Securities Act of 1933 covering the
Shares, and such registration shall become effective within ninety (90) days
following the date of the Agreement. The Company shall keep such registration
effective at all times until the Investor has either sold all the Shares or the
Investor is able to use Rule 144 of the Securities Act to sell all the Shares.
All fees, costs and expenses of and incidental to such registration statement
shall be borne entirely by the Company. The fees, costs and expenses to be borne
by the Company as provided in the preceding sentence shall include, without
limitation, all registration, filing, qualification and NASD fees, printing
expenses, fees and disbursements of counsel and accountants for the Company, and
all legal fees and disbursements and other expenses of complying with state
securities or blue sky laws of any jurisdictions in which the Shares to be
offered are to be registered or qualified.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Agreement, the Schedules hereto, and the
documents referred to herein constitute the full and entire understanding and
agreement between the parties and no party shall be liable or bound to any to
any other party in any manner by any warranties, representations or covenants
except as specifically set forth herein or therein.
7.2 SURVIVAL OF WARRANTIES. Unless otherwise set forth in this
Agreement, the warranties, representations and agreements of the Company and
Investor contained herein shall survive the execution and delivery of this
Agreement and the Closing and shall in no way be affected by any investigation
of the subject matter thereof made by or on behalf of Investor or the Company.
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including permitted transferees of any Shares sold hereunder). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
8. GOVERNING LAW; ARBITRATION. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed by and
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construed under the laws of the State of California without reference to
principles of conflicts of laws. The Company and the Investor agree that, if any
dispute arises out of or relating to this Agreement, such dispute will be
resolved by submission to binding arbitration in Santa Xxxxxxx County,
California before a retired judge or justice. If the parties unable to agree on
a retired judge or justice, each party will name a retired judge or justice and
the two named persons will select a neutral judge or justice who will act as the
sole arbitrator. BY AGREEING TO ARBITRATE, THE COMPANY WAIVES ANY RIGHT THE
COMPANY MAY HAVE TO A COURT OR JURY TRIAL.
8.1 By signing this letter, the Company and the Investor agree that,
if any dispute arises out of or relating to this agreement, our relationship, or
the services performed (including but not limited to disputes regarding
attorneys' fees or costs and claims of professional errors or omissions, breach
of contract or fiduciary duty, fraud or any claim based upon a statute), such
dispute will be resolved by submission to binding arbitration in Santa Barbara,
California before a retired judge or justice. If we are unable to agree on a
retired judge or justice, each party will name a retired judge or justice and
the two named persons will select a neutral judge or justice who will act as the
sole arbitrator. BY AGREEING TO ARBITRATE, THE COMPANY WAIVES ANY RIGHT THE
COMPANY MAY HAVE TO A COURT OR JURY TRIAL.
8.2 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
8.3 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
8.4 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery, delivery by nationally recognized
overnight courier or five days after deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed to the party to
be notified at the address indicated for such party on the signature page
hereto, or at such address as such party may designate by ten days advance
written notice to the other party.
8.5 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and Investor. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon Investor and
the securities purchased under this Agreement at the time outstanding (including
securities into which such securities have been converted), each future holder
of all such securities and the Company.
8.6 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and the balance of the Agreement shall be
enforceable in accordance with its terms.
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
Address: COMPUTER MOTION, INC.
000-x Xxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000 By: /s/ Xxxxxx X. Xxxxxx
Phone: 000-000-0000 ------------------------------------
Fax: 000-000-0000 Xxxxxx X. Xxxxxx,
President and Chief Executive Officer
Address:
0000 X. Xxxxxxxx Xxxxxx Xxxx
By: /s/ Xxxxx XxxXxxxxx
------------------------------------
Xxxxxxxxx, XX 00000
Corlund Electronics
Phone: 000-000-0000
Xxxxx XxxXxxxxx, President
Fax: 000-000-0000
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EXHIBIT A -- INVESTOR ACCOUNTS RECEIVABLE LISTING (TOTAL 1 PAGE)
AND COMPANY OWNED INVENTORY LISTING (TOTAL 9 PAGES)
