SERIES B PREFERRED STOCK PURCHASE AGREEMENT
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This SERIES B PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of October 14, 1998 by and between ADVANCED MACHINE VISION
CORPORATION, a California corporation (the "Company"), and FMC CORPORATION, a
Delaware corporation ("Purchaser").
RECITALS:
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WHEREAS, the Company has authorized the sale and issuance of an aggregate
of one hundred, nineteen thousand, one hundred, six (119,106) shares of Series B
Preferred Stock (the "Shares");
WHEREAS, Purchaser desires to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to Purchaser on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth and other good and valuable consideration (the
receipt, sufficiency and adequacy of which are acknowledged), the parties hereto
agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 Authorization of Shares. On or prior to the Closing (as defined in
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Section 2 below), the Company shall have authorized: (i) the sale and issuance
to Purchaser of the Shares and (ii) the issuance of shares of Common Stock to be
issued upon conversion the Shares (the "Conversion Shares"). The Shares shall
have the rights, preferences, privileges and restrictions set forth in the
Certificate of Determination of the Company in the form attached hereto as
Exhibit A (the "Certificate of Determination").
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1.2 Sale and Purchase. Subject to the terms and conditions hereof, at
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the Closing (as hereinafter defined) the Company hereby agrees to issue and sell
to Purchaser and Purchaser agrees to purchase from the Company the Shares, at a
purchase price of twenty-two dollars ($22.00) per share.
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2. CLOSING, DELIVERY AND PAYMENT.
2.1 Closing. The closing of the sale and purchase of the Shares under
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this Agreement (the "Closing") shall take place at 5:00 p.m. at such time or
place as the Company and Purchaser mutually agree (such date is hereinafter
referred to as the "Closing Date").
2.2 Delivery. At the Closing, subject to the terms and conditions
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hereof, the Company will deliver to Purchaser certificates representing the
number of Shares to be purchased at the Closing by Purchaser, against payment of
the purchase price therefor by wire transfer made payable to the order of the
Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on a Schedule of Exceptions delivered by the Company to
Purchaser at the Closing, the Company hereby represents and warrants to
Purchaser as of the date of this Agreement as follows:
3.1 Organization, Good Standing and Qualification. The Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of California. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Option Agreement in the form attached hereto as Exhibit B,
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the Registration Rights Agreement in the form attached hereto as Exhibit C (the
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"Registration Rights Agreement") and all other documents, instruments,
agreements and certificates executed in connection herewith and therewith
(collectively, the "Related Agreements"), to issue and sell the Shares and the
Conversion Shares and to carry out the provisions of this Agreement, the Related
Agreements and the Certificate of Determination and to carry on its business as
currently conducted and as currently proposed to be conducted. The Company is
duly qualified and is authorized to do business and is in good standing as a
foreign corporation in all jurisdictions in which the nature of its activities
and of its properties (both owned and leased) makes such qualification
necessary, except for those jurisdictions in which failure to do so would not
have a material adverse effect on the business, assets, condition, affairs or
prospects of the Company or any of its subsidiaries, financially or otherwise
("Material Adverse Effect").
3.2 Subsidiaries. The Company owns no equity securities of any other
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corporation, limited partnership or similar entity, except as set forth in
Schedule 3.2. The Company is not a participant in any joint venture,
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partnership or similar arrangement.
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3.3 Capitalization; Voting Rights. The authorized capital stock of
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the Company, immediately prior to the Closing, is set forth in Exhibit D. All
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issued and outstanding shares of the Company's Common Stock: (i) have been duly
authorized and validly issued; and (ii) are fully paid and nonassessable; and
(iii) were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. The rights, preferences, privileges and
restrictions of the Shares are as stated in the Certificate of Determination.
The Shares are initially convertible into Common Stock on a ten (10)-for-one (1)
basis. The Conversion Shares have been duly and validly reserved for issuance.
Except as set forth on Exhibit D or may be granted pursuant to the Related
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Agreements, there are no outstanding options, warrants, rights (including,
without limitation, conversion or preemptive rights and rights of first
refusal), convertible debt instruments, proxy or shareholder agreements, or
agreements of any kind for the purchase or acquisition from the Company of any
of its securities. When issued in compliance with the provisions of this
Agreement and the Certificate of Determination, the Shares and the Conversion
Shares will be validly issued, fully paid and nonassessable, and shall be free
of any liens or encumbrances; provided, however, that the Shares and the
Conversion Shares may be subject to restrictions on transfer under state and/or
federal securities laws as set forth herein or as otherwise required by such
laws at the time a transfer is proposed. Except as set forth on Exhibit D, no
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stock plan, stock purchase, stock option or other agreement or understanding
between the Company and any holder of any equity securities or rights to
purchase equity securities provides for acceleration or other changes in the
vesting provisions or other terms of such agreement or understanding as the
result of any merger, consolidated sale of stock or assets, change in control or
other similar transaction by the Company.
3.4 Authorization; Binding Obligations. All corporate action on the
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part of the Company, its officers and directors necessary for the authorization
of this Agreement and the Related Agreements, the performance of all obligations
of the Company hereunder and thereunder at the Closing and the authorization,
sale, issuance and delivery of the Shares pursuant hereto and the Conversion
Shares pursuant to the Certificate of Determination has been taken or will be
taken prior to the Closing. The Agreement and the Related Agreements, when
executed and delivered, will be valid and binding obligations of the Company
enforceable in accordance with their terms, except: (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions in Section 5 of
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the Registration Rights Agreement may be limited by applicable laws. The sale
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of the Shares and the subsequent conversion of the Shares into Conversion Shares
are not and will not be subject to any preemptive rights or rights of first
refusal that have not been properly waived or complied with.
3.5 Financial Statements. The Company has delivered to Purchaser: (a)
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its audited balance sheet as at December 31, 1997 and audited statement of
income and cash flows for the twelve months ending December 31, 1997; and (b)
its unaudited balance sheet as at June 30, 1998 (the "Statement Date") and
unaudited consolidated statement of income and cash flows for the three month
period ending on the Statement Date (collectively, the "Financial Statements").
The Financial Statements, together with the notes thereto, are complete and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated, except as disclosed therein, and present
fairly the financial condition and position of the Company as of December 31,
1997 and the Statement Date; provided, however, that the unaudited financial
statements do not contain all disclosures and footnotes required under generally
accepted accounting principles.
3.6 Liabilities. The Company has no material liabilities and, to the
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best of its knowledge, knows of no material contingent liabilities not disclosed
in the Financial Statements, except current liabilities incurred in the ordinary
course of business subsequent to the Statement Date that might result in, either
in any individual case or in the aggregate, a Material Adverse Effect.
3.7 Agreements; Action.
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(a) Except for the agreements contemplated by this transaction, the
Representative Agreement dated April 16, 1998, or as set forth in filings with
the Securities and Exchange Commission (the "SEC Filings"), there are no
agreements, understandings or proposed transactions between the Company and any
of its officers, directors, affiliates or any affiliate thereof.
(b) Except as set forth in the SEC Filings, there are no material
agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party or to its
knowledge by which it is bound which may involve (i) obligations (contingent or
otherwise) of, or payments to, the Company (other than obligations of, or
payments to, the Company arising in the ordinary course of business); (ii) the
license of any patent, copyright, trade secret or other proprietary right to or
from the Company; (iii) provisions restricting or affecting the development,
manufacture or distribution of the
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Company's products or services, or (iv) indemnification by the Company with
respect to infringements of proprietary rights (other than indemnification
obligations arising from purchase or sale agreements entered into in the
ordinary course of business).
(c) Except as set forth in the SEC Filings, the Company has not: (i)
declared or paid any dividends, or authorized or made any distribution upon or
with respect to any class or series of its capital stock; (ii) incurred any
indebtedness for money borrowed or any other liabilities (other than with
respect to indebtedness and other obligations incurred in the ordinary course of
business or as disclosed in the Financial Statements) individually in excess of
$10,000 or, in the case of indebtedness and/or liabilities individually less
than $10,000, in excess of $10,000 in the aggregate; (iii) made any loans or
advances to any person, other than ordinary advances for travel expenses except
as set forth in Schedule 3.7(c)(iii); or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.
(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
(e) Except for the transaction contemplated in this Agreement, the
Company has not engaged in the past three (3) months in any discussion: (i) with
any representative of any corporation or corporations regarding the
consolidation or merger of the Company with or into any such corporation or
corporations; (ii) with any corporation, partnership, association or other
business entity or any individual regarding the sale, conveyance or disposition
of all or substantially all of the assets of the Company, or a transaction or
series of related transactions in which more than fifty percent (50%) of the
voting power of the Company is disposed of; or (iii) regarding any other form of
acquisition, liquidation, dissolution or winding up of the Company.
3.8 Obligations to Related Parties. Except for debt owed to the former
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owners of Ventec, Inc., there are no obligations of the Company to officers,
directors, shareholders, or employees of the Company other than: (a) for payment
of salary for services rendered, (b) reimbursement for reasonable expenses
incurred on behalf of the Company and (c) for other standard employee benefits
made generally available to all employees (including stock option agreements
outstanding under any stock option plan
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approved by the Board of Directors of the Company). Except as disclosed in
Schedule 3.7(c)(iii) none of the officers, directors or shareholders of the
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Company, or any members of their immediate families, are indebted to the Company
or have any direct or indirect ownership interest in any firm or corporation
with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation which competes with the Company, except
that officers, directors and/or shareholders of the Company may own stock in
publicly traded companies which may compete with the Company. No officer,
director or shareholder, or any member of their immediate families, is, directly
or indirectly, interested in any material contract with the Company (other than
such contracts as relate to any such person's ownership of capital stock or
other securities of the Company). Except as may be disclosed in the Financial
Statements, the Company is not a guarantor or indemnitor of any indebtedness of
any other person, firm or corporation.
3.9 Changes. Since the Statement Date, there has not been:
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(a) Any change in the assets, liabilities, financial condition or
operations of the Company from that reflected in the Financial Statements, other
than changes in the ordinary course of business, none of which individually or
in the aggregate has had or is expected to have a Material Adverse Effect;
(b) Any resignation or termination of any key officers of the
Company and the Company, to the best of its knowledge, does not know of the
impending resignation or termination of employment of any such officer;
(c) Any material change in the contingent obligations of the Company
by way of guaranty, endorsement, indemnity, warranty or otherwise;
(d) Any damage, destruction or loss, whether or not covered by
insurance, that might result in a Material Adverse Effect;
(e) Any waiver by the Company of a valuable right or of a material
debt owed to it;
(f) Any direct or indirect loans made by the Company to any
shareholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;
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(g) Any material change in any compensation arrangement or agreement
with any employee, officer, director or shareholder;
(h) Any declaration or payment of any dividend or other distribution
of the assets of the Company;
(i) Any labor organization activity;
(j) Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except for current liabilities incurred in the
ordinary course of business;
(k) Any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(1) Any change in any material agreement to which the Company is a
party or by which it is bound that might result in a Material Adverse Effect; or
(m) Any other event or condition of any character that, either
individually or cumulatively, might result in a Material Adverse Effect.
3.10 Title to Properties and Assets; Liens, etc. The Company has good
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and marketable title to its properties and assets, including, without
limitation, the properties and assets reflected in the most recent balance sheet
included in the Financial Statements, and good title to its leasehold estates,
in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge,
other than: (a) those resulting from taxes which have not yet become delinquent;
(b) minor liens and encumbrances which do not materially detract from the value
of the property subject thereto or materially impair the operations of the
Company; and (c) those that have otherwise arisen in the ordinary course of
business. All facilities, machinery, equipment, fixtures, vehicles and other
properties owned, leased or used by the Company are in good operating condition
and repair and are reasonably fit and usable for the purposes for which they are
being used. The Company is in compliance with all material terms of each lease
to which it is a party or is otherwise bound.
3.11 Patents and Trademarks The Company owns or possesses sufficient
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legal rights to all "Intellectual Property" (as defined below) for its business
as now conducted and as currently proposed to be conducted, without any known
infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to
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the foregoing, nor is the Company bound by or a party to any options, licenses
or agreements of any kind with respect to the Intellectual Property of any other
person or entity other than such licenses or agreements arising from the
purchase of "off the shelf" or standard products or the license agreement with
Key Technology. The Company has not violated or, by conducting its business,
shall not violate any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other person or
entity. The Company is not aware that any of its employees is obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with their duties to the Company or
that would conflict with the Company's business as currently proposed to be
conducted. Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's business as currently proposed, will, to the Company's
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any employee is now obligated. The Company does not
believe it is or will be necessary to utilize any inventions, trade secrets or
proprietary information of any of its employees made prior to their employment
by the Company, except for inventions, trade secrets or proprietary information
that have been assigned to the Company. To the knowledge of the Company, no
third party has interfered with, infringed upon, misappropriated or violated any
material Intellectual Property of the Company. "Intellectual Property" means (a)
all inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent applications, and
patent disclosures, together with all reissuances, continuations, continuations-
in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks,
service marks, trade dress, logos, trade names, and corporate names, together
with all translations, adaptations, derivations, and combinations thereof and
including all good-will associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all computer software (including data and related documentation), (g) all
other proprietary rights, and (h) all copies and tangible embodiments thereof
(in whatever form or medium).
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3.12 Compliance with Other Instruments. The Company is not in violation
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or default of any term of its Restated Articles of Incorporation or By-laws, or
of any provision of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it is bound or of any judgment,
decree, order, writ or, to its knowledge, any statute, rule or regulation
applicable to the Company that might result in a Material Adverse Effect. The
execution, delivery, and performance of and compliance with this Agreement, and
the Related Agreements, and the issuance and sale of the Shares pursuant hereto
and of the Conversion Shares pursuant to the Certificate of Determination, will
not, with or without the passage of time or giving of notice, result in any such
material violation, or be in conflict with or constitute a default under any
such term, or result in the creation of any mortgage, pledge, lien, encumbrance
or charge upon any of the properties or assets of the Company or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit license,
authorization or approval applicable to the Company, its business or operations
or any of its assets or properties.
3.13 Litigation. Except as set forth in Schedule 3.13, or disclosed in
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any SEC Filing, there is no action, suit, proceeding or investigation pending,
or to the Company's knowledge, currently threatened against the Company that
questions the validity of this Agreement or the Related Agreements or the right
of the Company to enter into any of such agreements, or to consummate the
transactions contemplated hereby or thereby, or that might result, either
individually or in the aggregate, in a Material Adverse Effect, or any change in
the current equity ownership of the Company, nor is the Company aware that there
is any basis for the foregoing. The foregoing includes, without limitation,
actions pending or threatened (or any basis therefor known to the Company)
involving the prior employment of any of the Company's employees, their use in
connection with the Company's business of any information or techniques
allegedly proprietary to any of their former employers, or their obligations
under any agreements with prior employers. The Company is not a party or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company currently pending or which the
Company intends to initiate.
3.14 Tax Returns and Payments. The Company has timely filed all tax
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returns (federal, state and local) required to be filed by it. All taxes shown
to be due and payable on such returns, any assessments imposed, and to the
Company's knowledge all other taxes due and payable by the Company on or before
the Closing have been paid or will be paid prior to the time they become
delinquent. The Company has not been advised (a) that any of its returns,
federal, state or other, have been or are
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being audited as of the date hereof, or (b) of any deficiency in assessment or
proposed judgment to its federal, state or other taxes. The Company has no
knowledge of any liability of any tax to be imposed upon its properties or
assets as of the date of this Agreement that is not adequately provided for.
3.15 Employees. The Company has no collective bargaining agreements
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with any of its employees. There is no labor union organizing activity pending
or, to the Company's knowledge, threatened with respect to the Company. Except
as set forth in Schedule 3.15, no employee has any agreement or contract,
written or verbal, regarding his employment. Except as set forth in Schedule
3.15, the Company is not a party to or bound by any currently effective
employment contract, deferred compensation arrangement, bonus plan, incentive
plan, profit sharing plan, retirement agreement or other employee compensation
plan or agreement. To the Company's knowledge, no employee of the Company, nor
any consultant with whom the Company has contracted, is in violation of any term
of any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company because of the nature of the business to be conducted
by the Company; and to the Company's knowledge the continued employment by the
Company of its present employees, and the performance of the Company's contracts
with its independent contractors, will not result in any such violation. The
Company has not received any notice alleging that any such violation has
occurred. Except as set forth in Schedule 3.15 or disclosed in any SEC Filing,
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no employee of the Company has been granted the right to continued employment by
the Company or to any material compensation following termination of employment
with the Company. The Company is not aware that any officer or key employee, or
that any group of key employees, intends to terminate their employment with the
Company, nor does the Company have a present intention to terminate the
employment of any officer, key employee or group of key employees.
3.16 Proprietary Information and Inventions Agreements. Each former
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employee who joined SRC Vision, Inc. within the immediately preceding 36 months
and each current employee, officer and consultant of the Company's SRC Vision,
Inc. subsidiary has executed an Employee Proprietary Rights and Non-Disclosure
Agreement and Confidentiality Agreement in the form of Exhibit E attached
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hereto. No current employee, officer or consultant of the Company has excluded
works or inventions made prior to his or her employment with the Company from
his or her assignment of inventions pursuant to such employee, officer or
consultant's Employee Proprietary Rights and Non-Disclosure Agreement and
Confidentiality Agreement
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3.17 Obligations of Management. Each officer of the Company is currently
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devoting one hundred percent (100%) of his or her business time to the conduct
of the business of the Company. The Company is not aware of any officer or key
employee of the Company planning to work less than full time at the Company in
the future.
3.18 Registration Rights. Except as required pursuant to the
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Registration Rights Agreement and the Stock Option Agreements, dated as of
August 5, 1998, between the Company and Lyon Securities, Inc. and SRG &
Associates, Ltd., and possible registration resulting from the Company's Stock
Rights Plan, the Company is currently not under any obligation, and has not
granted any rights, to register any of the Company's current outstanding
securities or any of its securities that may hereafter be issued.
3.19 Compliance with Laws; Permits. The Company is not in violation of
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any applicable statute, rule, regulation, order or restriction of any domestic
or foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
result in a Material Adverse Effect. No governmental orders, permissions,
consents, approvals or authorizations are required to be obtained and no
registrations or declarations are required to be filed by the Company in
connection with the execution and delivery of this Agreement and the issuance of
the Shares or the Conversion Shares, except such as has been duly and validly
obtained or filed, or with respect to any filings that must be made after the
Closing, as will be filed in a timely manner. The Company has all franchises,
permits, licenses and any similar authority necessary for the conduct of its
business as now being conducted by it, the lack of which might result in a
Material Adverse Effect. The Company believes it can obtain, without undue
burden or expense, any similar authority for the conduct of its business as
planned to be conducted.
3.20 Environmental and Safety Laws. The Company is not in material
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violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulations.
3.21 Offering Valid. Assuming the accuracy of the representations and
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warranties of Purchaser contained in Section 4.2 hereof, the offer, sale and
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issuance of the Shares and the Conversion Shares are exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state
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securities laws. Neither the Company nor any agent on its behalf has solicited
or will solicit any offers to sell or has offered to sell or will offer to sell
all or any part of the Shares to any person or persons so as to bring the sale
of such Shares by the Company within the registration provisions of the
Securities Act or any state securities laws.
3.22 Full Disclosure. This Agreement, the Exhibits hereto, the Related
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Agreements and all other documents delivered by the Company to Purchaser or
their attorneys or agents in connection herewith or therewith or with the
transactions contemplated hereby or thereby, do not contain any untrue statement
of a material fact nor, to the Company's knowledge, omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.23 Insurance. The Company has fire and casualty insurance policies
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with coverage customary for companies similarly situated to the Company.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to the Company as follows (such
representations and warranties do not lessen or obviate the representations and
warranties of the Company set forth in this Agreement):
4.1 Requisite Power and Authority. Purchaser has all necessary power
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and authority under all applicable provisions of law to execute and deliver this
Agreement and the Related Agreements and to carry out their provisions. All
action on Purchaser's part required for the lawful execution and delivery of
this Agreement and the Related Agreements have been or will be effectively taken
prior to the Closing. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions of Section 5 of
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the Registration Rights Agreement may be limited by applicable laws.
4.2 Investment Representations. Purchaser understands that neither the
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Shares nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser's representations
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contained in the Agreement. Purchaser hereby represents and warrants as follows:
(a) Purchaser Bears Economic Risk. Purchaser has substantial
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experience in evaluating and investing in transactions of securities so that it
is capable of evaluating the merits and risks of its investment in the Company
and has the capacity to protect its own interests. Purchaser must bear the
economic risk of this investment indefinitely until the Shares (or the
Conversion Shares) are registered pursuant to the Securities Act, or an
exemption from registration is available and the Shares or Conversion Shares are
subsequently sold. Purchaser also understands that there is no assurance that
any exemption from registration under the Securities Act will be available and
that, even if available, such exemption may not allow Purchaser to transfer all
or any portion of the Shares or the Conversion Shares under the circumstances,
in the amounts or at the times Purchaser might propose.
(b) Acquisition for Own Account. Purchaser is acquiring the Shares
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and the Conversion Shares for Purchaser's own account for investment only, and
not with a view towards their distribution.
(c) Purchaser Can Protect Its Interest. Purchaser represents that by
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reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements.
Further, Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in the Agreement. Purchaser has carefully
reviewed and understands the risks of, and other considerations relating to, a
purchase of Shares and the Conversion Shares, including, but not limited to, the
risks set forth under "Risk Factors" in the Company's Form 10-K/A dated March 9,
1998 and Form 10-Q dated August 4, 1998.
Purchaser has been afforded the opportunity to obtain any
information necessary to make an informed investment decision and has had all
inquiries to the Company answered, and has been furnished all requested
materials relating to the Company and the offering and sale of the Shares and
the Conversion Shares.
(d) Accredited Investor. Purchaser represents that it is an
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accredited investor within the meaning of Regulation D under the Securities Act.
(e) Rule 144. Purchaser acknowledges and agrees that the Shares,
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and, if issued, the Conversion Shares must be held
Page 13
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. Purchaser has been advised or
is aware of the provisions of Rule 144 promulgated under the Securities Act as
in effect from time to time, which permits limited resale of shares purchased in
a private placement subject to the satisfaction of certain conditions,
including, among other things: the availability of certain current public
information about the Company, the resale occurring following the required
holding period under Rule 144 and the number of shares being sold during any
three-month period not exceeding specified limitations.
4.3 Transfer Restrictions. Purchaser acknowledges and agrees that the
---------------------
Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Registration Rights Agreement.
5. COVENANTS.
For as long as the Shares are outstanding and held by Purchaser, the
Company (and, with respect to Sections 5.1 and 5.2, Ventec, Inc. and SRC Vision,
Inc.) hereby covenant and agree that, without the consent of Purchaser, it (and,
with respect to Sections 5.1 and 5.2, they) shall not:
5.1 Consolidations, Mergers or Acquisitions. Until October 14, 2002,
---------------------------------------
merge with or into any entity or enter into any reorganization,
recapitalization, consolidation, sale of control or any transaction that,
directly or indirectly results in all or substantially all of the assets or
properties of the Company, Ventec, Inc. or SRC Vision, Inc. being sold,
licensed, leased, transferred, conveyed or otherwise disposed of.
5.2 Intellectual Property. Until October 14, 2002, sell, license,
---------------------
lease, transfer, convey or otherwise dispose of the Intellectual Property of the
Company, SRC Vision, Inc. or Ventec, Inc. (as the case may be).
5.3 Issuance of Stock. Issue or distribute any additional equity
-----------------
securities or other securities convertible or exchangeable into equity
securities (other than issuance of shares pursuant to employee stock options or
other stock plans in effect in effect on the date hereof and, with the approval
of the Board of Directors, shares to unrelated third parties, that do not exceed
100,000 for any fiscal year.
5.4 Amendment of Charter or By-laws. Amend its charter or By-laws.
-------------------------------
6. CONDITIONS TO CLOSING.
Page 14
6.1 Conditions to Purchaser Obligations at the Closing. Purchaser's
--------------------------------------------------
obligations to purchase the Shares at the Closing are subject to the
satisfaction, at or prior to the Closing Date, of the following conditions:
(a) Representations and Warranties True; Performance of Obligations.
---------------------------------------------------------------
The representations and warranties made by the Company in Section 3 hereof shall
---------
be true and correct in all material respects as of the Closing Date with the
same force and effect as if they had been made as of the Closing Date, and the
Company shall have performed all obligations and conditions herein required to
be performed or observed by it on or prior to the Closing.
(b) Legal Investment. On the Closing Date, the sale and issuance of
----------------
the Shares and the proposed issuance of the Conversion Shares shall be legally
permitted by all laws and regulations to which Purchaser and the Company are
subject.
(c) Consents, Permits, and Waivers. The Company shall have obtained
------------------------------
any and all consents, permits and waivers necessary or appropriate for
consummation by the Company of the transactions contemplated by the Agreement
and the Related Agreements (except for such as may be properly obtained
subsequent to the Closing).
(d) Filing of Certificate of Determination. The Certificate of
--------------------------------------
Determination shall have been filed with the Secretary of State of California.
(e) Corporate Documents. The Company shall have delivered to
-------------------
Purchaser or its counsel, copies of all corporate documents of the Company as
Purchaser shall reasonably request.
(f) Reservation of Conversion Shares. The Conversion Shares issuable
--------------------------------
upon conversion of the Shares shall have been duly authorized and reserved for
issuance upon such conversion.
(g) Compliance Certificate. The Company shall have delivered to
----------------------
Purchaser a Compliance Certificate, executed by the Chairman of the Company,
dated the Closing Date, to the effect that the conditions specified in
subsections (a), (c), (d) and (f) of this Section 6.1 have been satisfied.
-----------
(h) Option Agreement. An Option Agreement substantially in the form
----------------
attached hereto as Exhibit B shall have been executed and delivered by the
---------
parties thereto.
Page 15
(i) Registration Rights Agreement. A Registration Rights Agreement
-----------------------------
substantially in the form attached hereto as Exhibit C shall have been executed
----------
and delivered by the parties thereto.
(j) Collateral Documents. All documents necessary to grant Purchaser
--------------------
a perfected security interest in the Intellectual Property of the Company and
its subsidiaries shall have been executed and delivered by the parties thereto.
(k) Board of Directors. Upon the Closing, the authorized size of the
------------------
Board of Directors of the Company shall be eight (8) members, and Xxxx Xxxxx,
Xxxx Xxxxxxx or another person designated by Purchaser shall have been elected
to the Board.
(l) Legal Opinion. Purchaser shall have received from legal counsel
-------------
to the Company an opinion addressed to it, dated as of the Closing Date, in
substantially the form attached hereto as Exhibit F.
---------
(m) Proceedings and Documents. All corporate and other proceedings
-------------------------
in connection with the transactions contemplated at the Closing hereby and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to Purchaser and its counsel, and Purchaser
and its counsel shall have received all such counterpart originals or certified
or other copies of such documents as they may reasonably request.
6.2 Conditions to Obligations of the Company. The Company's obligation
----------------------------------------
to issue and sell the Shares at each Closing is subject to the satisfaction, on
or prior to such Closing, of the following conditions:
(a) Representations and Warranties True. The representations and
-----------------------------------
warranties made by Purchaser acquiring Shares in Section 4 hereof shall be true
---------
and correct in all material respects at the date of the Closing, with the same
force and effect as if they had been made on and as of said date.
(b) Performance of Obligations. Purchaser shall have performed and
--------------------------
complied with all agreements and conditions herein required to be performed or
complied with by Purchaser on or before the Closing.
(c) Wire Transfer. Purchaser shall have paid to the Company the
-------------
amount of $2,620,332 in immediately available funds.
Page 16
(d) Option Agreement. An Option Agreement substantially in the form
----------------
attached hereto as Exhibit B shall have been executed and delivered by
---------
Purchaser.
(e) Registration Rights Agreement. A Registration Rights Agreement
-----------------------------
substantially in the form attached hereto as Exhibit C shall have been executed
---------
and delivered by Purchaser.
(f) Consents, Permits, and Waivers. The Purchaser shall have
------------------------------
obtained any and all consents, permits and waivers necessary or appropriate for
consummation by Purchaser of the transactions contemplated by the Agreement and
the Related Agreements (except for such as may be property obtained subsequent
to the Closing).
7. TRANSFERS OF STOCK.
7.1 Right of First Refusal. If (a) Purchaser has received a bona fide
---------------------- ---- ----
offer to purchase any of the Shares from a third party unaffiliated with
Purchaser (the "Third Party") and (b) Purchaser intends to sell such Shares to
such Third Party, Purchaser shall notify the Company in writing (the "Written
Notice") of such proposed sale no less than sixty (60) days prior to the closing
(the "Proposed Closing") for such proposed sale. The Written Notice shall
contain all material terms of the proposed sale, including, without limitation,
the proposed price and the date of the Proposed Closing (the "Proposed Closing
Date"). Unless: (i) Purchaser receives from the Company on or before the day
occurring thirty (30) days prior to the Proposed Closing, a written offer from
the Company to purchase the Shares; and (ii) such offer by the Company to
purchase the Shares (A) is for a price equal to or greater than the purchase
price of the Shares set forth in the Written Notice; (B) provides for the
payment to Purchaser for the Shares of such amount in the form and in accordance
with the same payment schedule as set forth in the Written Notice; and (C)
otherwise contains the same terms for purchasing the Shares as is provided for
in the Written Notice ("Written Offer"), then Purchaser may sell the Shares to
the Third Party on the terms provided for in the Written Notice on the Proposed
Closing Date. If Purchaser receives a Written Offer from the Company on or
before the day occurring thirty (30) days before the Proposed Closing Date, then
Purchaser shall accept the Written Offer and Purchaser shall sell, and the
Company shall purchase, the Shares on the terms provided for in the Written
Offer on the Proposed Closing Date.
7.2 Purchaser Issuance of Shares. For as long as the Shares are
----------------------------
outstanding and are owned by Purchaser, if the Company intends to issue or sell
any shares of its capital stock, or any securities convertible or exchangeable
into such shares, except for securities issued or sold (i) in any
Page 17
merger or acquisition, (ii) to Purchaser; and (iii) securities permitted under
Section 5.3; provided that such securities are sold and issued in accordance
with the terms of this Agreement (collectively "Permitted Securities"), it shall
notify Purchaser in writing no less than forty-five (45) days prior to such
issuance or sale, which notice shall contain the terms of the proposed
securities. Purchaser shall then have the right to purchase a portion of such
securities on the same terms so that, after such proposed issuance, Purchaser
retains the right to own, convert or exchange the same percentage of shares of
the Company's capital stock it had immediately preceding such issuance or sale
minus Permitted Securities. Purchaser shall notify the Company of its intention
to purchase such securities no later than thirty (30) days after its receipt of
such notice.
7.3 Sale of Shares Upon Change in Control. If a "Change of Control" (as
-------------------------------------
defined below) occurs, Purchaser may notify the Company that Purchaser intends
to sell all or any portion of the shares of Series B Preferred Stock that
Purchaser holds ("Selling Shares"). Subject to California General Corporation
Law Chapter 5, the Company shall purchase such Selling Shares on the fifteenth
(15th) day after the date of such notice. On such day, Purchaser shall deliver
the stock certificates for the Selling Shares, and in exchange for such
delivery, the Company shall pay Purchaser in immediately available funds an
amount equal to: (a) the number of Selling Shares being sold, multiplied by (b)
-------------
the greater of: (i) $22.00; and (ii) the average closing bid of the Common Stock
of the Company for the consecutive forty-five day period immediately preceding
the day before the date of such purchase and sale.
"Change of Control" means the occurrence of any of the following:
(1) the sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets
of the Corporation,
(2) the adoption of a plan relating to the liquidation or
dissolution of the Corporation;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is
that any person or entity becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that in calculating the beneficial
ownership of any particular "person", such "person" shall be
deemed to have
Page 18
beneficial ownership of all securities that such person has the
right to acquire, whether such right it currently exercisable
or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 37.5% of the
Voting Stock of the Corporation (measured by voting power
rather than number of shares);
(4) the first day on which a majority of the members of the Board
of Directors of the Corporation are not Continuing Directors
(as defined below); or
(5) the shareholders of the Corporation approve a consolidation of
the Corporation with, or a merger of the Corporation with or
into, any entity, or the shareholders of the Corporation (if
required) or the shareholders of any entity approve a
consolidation of such entity with, or merger of such entity
with or into, the Corporation, other than any such transaction
whether the Corporation's shareholders of record immediately
prior to such transaction hold more than 80% of the Voting
Stock of the surviving corporation or entity immediately after
giving effect to such issuance.
A Change of Control shall not be deemed to have occurred if any of the above
events occur by virtue of transactions effected by FMC or its affiliates.
"Continuing Director" means any member of the Board of Directors of
the Corporation who (i) was a member of such Board of Directors on the date on
which a share of Series B Preferred Stock is first issued (the "Original Issue
Date") or (ii) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were members of
such Board at the time of such nomination or election.
8. MISCELLANEOUS.
8.1 Governing Law. This Agreement shall be governed in all respects by
-------------
the internal laws of the State of Illinois.
8.2 Survival. The representations, warranties, covenants and agreements
--------
made herein shall not survive the Closing. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection
Page 19
with the transactions contemplated hereby shall be deemed to be representations
and warranties by the Company hereunder solely as of the date of such
certificate or instrument.
8.3 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by the
holder of 100% of the Shares from time to time.
8.4 Indemnity. The Company agrees to defend, protect, indemnify and
---------
hold harmless Purchaser and each and all of its respective officers, directors,
employees, attorneys and agents ("Indemnified Parties") from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including without limitation the fees and disbursements of counsel
for the Indemnified Parties in connection with any investigative, administrative
or judicial proceeding, whether or not the Indemnified Parties shall be
designated by a party thereto), which may be imposed on, incurred by, or
asserted against any Indemnified Party (whether direct, indirect or
consequential and whether based on any federal or state laws or other statutory
regulations, including without limitation securities, environmental and
commercial laws and regulations, under common law or at equitable cause, or on
contract or otherwise) in any manner relating to or arising out of the operation
of the businesses operated by the Company, or any act, event or transaction
related or attendant thereto; provided, that the Company shall not have any
obligation to any Indemnified Party hereunder with respect to matters caused by
or resulting from the willful misconduct or gross negligence of such Indemnified
Party; provided further, that this indemnity shall not be deemed to obligate the
Company for any liability arising in connection with products manufactured by
Purchaser. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all matters incurred by the Indemnified Parties.
8.5 Entire Agreement. This Agreement, the Exhibits and Schedules
----------------
hereto, the Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
Page 20
8.6 Severability. In case any provision of the Agreement shall be
------------
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
8.7 Amendment. This Agreement may be amended or modified only upon the
---------
written consent of the Company and Purchaser.
8.8 Delays or Omissions. It is agreed that no delay or omission to
-------------------
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Related
Agreements or the Certificate of Determination, shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is further agreed
that any waiver, permit, consent or approval of any kind or character on
Purchaser's part of any breach, default or noncompliance under this Agreement,
the Related Agreements or under the Certificate of Determination or any waiver
on such party's part of any provisions or conditions of the Agreement, the
Related Agreements, or the Certificate of Determination must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement, the Related Agreements, the
Certificate of Determination, by law, or otherwise afforded to any party, shall
be cumulative and not alternative.
8.9 Notices. All notices required or permitted hereunder shall be in
-------
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (d) one (1) day after deposit with
Federal Express or other nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All communications
shall be sent to the parties at the addresses as set forth on the signature page
hereof or at such other address as the Company or Purchaser, as the case may be,
may designate by ten (10) days advance written notice to the other parties
hereto.
8.10 Expenses. Each party shall pay all costs and expenses that it
--------
incurs with respect to the negotiation, execution, delivery and performance of
the Agreement.
8.11 Titles and Subtitles. The titles of the sections and subsections
--------------------
of the Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
Page 21
8.12 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.13 Broker's Fees. Each party hereto represents and warrants that no
-------------
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 8.13 being untrue.
8.14 Pronouns. All pronouns contained herein, and any variations
--------
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
8.15 California Corporate Securities Law. THE SALE OF THE SECURITIES
-----------------------------------
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE
COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION
BEING AVAILABLE.
Page 22
IN WITNESS WHEREOF, the parties have executed this SERIES B PREFERRED STOCK
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.
ADVANCED MACHINE VISION
CORPORATION FMC CORPORATION
By /s/ Xxxxxxx X. Xxxxx By /s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------ --------------------------
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxxx, Xx.
Chief Financial Officer Vice President
The undersigned acknowledge and agree to Sections 5.1 and 5.2 above.
SRC VISION, INC. VENTEC, INC.
By /s/ Xxxx X. Steel By /s/ Xxxx X. Steel
------------------------ --------------------------
Xxxx X. Steel Xxxx X. Steel
Chief Financial Officer Chief Financial Officer
Page 23
EXHIBIT D
Capitalization; Voting Rights
Class A Shares
Reserved
Shares for Outstanding
Security Authorized Issuance Shares
-------- ---------- -------------- -----------
Advanced Machine Vision Corporation:
Class A Common Stock 60,000,000 10,655,218
Class B Common Stock 3,000,000 64,335
Series A Preferred Stock 400,000
Series B Preferred Stock 119,106 1,191,060 119,106
Issuable upon exercise or conversion:
Stock Option Plans (A)
Options outstanding 3,088,501
Available for grant 138,817
Non-plan options 631,538
FMC 15% option 1,598,282
Ventek convertible note 1,000,000
Ventek stock note 1,800,000
6.75% convertible debt 423,529
Class G & I Warrants 540,000
Ventek warrants 250,000
1997 restricted stock plan (B) 1,800,000
SRC Vision, Inc.: (C)
Options outstanding 317,425
Available for grant 78,575
(A) Includes 1991, 1994 and 1997 stock option plans.
(B) Excludes 200,000 issued shares included in Class A Common Stock
outstanding.
(C) The SRC Vision Plan was established on 1/10/97. Vesting of options will
accelerate if SRC Vision or its parent (currently Advanced Machine Vision
Corporation) consummates an agreement to sell a majority of SRC Vision's
business or assets, or merge with another entity that is not at least 50%
owned by its parent company or other affiliated entity owned by its parent
company.
Exhibit E
---------
Proprietary Information Agreement
---------------------------------
EMPLOYEE PROPRIETARY RIGHTS
AND NON-DISCLOSURE AGREEMENT
I recognize that Advanced Machine Vision, SRC VISION(R), Inc., ARC Netherlands
b.v. and each of their current or future subsidiaries, divisions, affiliated
entities, successor entities or assigns, (hereafter called "the Company") must
initiate, make and develop technological innovations and inventions, develop
valuable information, and trade secrets, and protect its legal rights in such
matters. Therefore, in consideration of my employment by the Company, I hereby
agree:
To maintain in strictest confidence, both during the term of my employment and
thereafter, all confidential technical and business information, trade secrets,
inventions and innovations of the Company, its successors or assigns, and my co-
workers, either learned or developed by me during the term of my employment; and
To promptly disclose and assign to the Company all rights to any and all
inventions or innovations that are conceived or first actually reduced to
practice by me, either alone or jointly with others, during my term of
employment by the Company; except that I need not assign to the Company title in
any invention for which no equipment, supplies, facility, or trade secret
information of the Company was used and which was developed entirely on my own
time, and (a) which does not relate (1) to the business of the Company or (2) to
the Company's actual or demonstrably anticipated research or development, or (b)
which does not result from any work performed by me for the Company, unless full
title in the United States or any other country to the invention is required by
contract between the Company and the United States or any other country or any
of their agencies. I understand that all those disclosures of my inventions and
innovations made to the Company under this paragraph for which I need not assign
title to the Company shall be held in confidence by the Company.
To advise the Company prior to entering into a consulting agreement with any
outside agency while in the Company's employ, and to exercise my best judgment
before accepting such consulting agreement as not to compromise the Company.
I understand that a breach of any of the above clauses may cause termination of
my employment, in addition to giving rise to claims for remedies or damages as
provided by applicable law.
--------------------------- --------------------------------------
Date Employee (please type or print)
--------------------------- --------------------------------------
Place of Signing Employee's signature
CONFIDENTIALITY AGREEMENT
1. COMPANY AND JURISDICTION
1.1 Definition of Company. As used in this agreement, the term "Company" means
Advanced Machine Vision (AMV), SRC VISION(R), Inc., ARC Netherlands b.v. and
each of their current or future subsidiaries, divisions, affiliated entities,
successor entities or assigns. This agreement shall be governed by the laws of
the Employee's country of employment, whether it be the United States of
America, the Netherlands, or any other country. Notwithstanding the previous
sentence, the parties to this agreement agree to submit to the laws of any
jurisdiction in which a breach of this agreement may occur.
2. CONFIDENTIALITY
2.1 Definition of Confidential Information. As used in this agreement, the term
"Confidential Information" means: (a) proprietary information of the Company;
(b) information marked or designated by the Company as confidential; (c)
information, whether or not in written form and whether or not designated as
confidential, which is known to me ("Employee") as being treated by the Company
as confidential; and (d) information provided to the Company by third parties
which the Company is obligated to keep confidential. Confidential Information
includes, but is not limited to, know-how, customer lists, marketing plans,
financial and technical information, prospect lists and data base, development
plans, business plans, project development plans, long range and strategic
plans, budgets and compensation information.
2.2 Acknowledgment of Receipt of Confidential Information. Employee
acknowledges that in the course of performing duties for the Company, he or she
will have access to Confidential Information, the ownership and confidential
status of which are highly important to the Company, and Employee agrees in
addition to the specific covenants contained herein, to comply with all Company
policies and procedures for the protection of such Confidential Information.
2.3 Ownership. Employee acknowledges that all Confidential Information is and
shall continue to be the exclusive property of the Company, whether or not
prepared in whole or part by Employee and whether or not disclosed to or
entrusted to Employee in connection with employment by the Company.
2.4 Acknowledgment of Irreparable Harm. Employee acknowledges that any
disclosure of Confidential Information will cause irreparable harm to the
Company.
2.5 Covenant of Nondisclosure. Employee agrees not to disclose Confidential
Information, directly or indirectly, under any circumstances or by any means, to
any third person without the express written consent of the Company.
2.6 Covenant of Nonuse. Employee agrees that Employee will not copy, transmit,
reproduce, summarize, quote or make any commercial or other use whatsoever of
the Confidential Information, except as may be necessary to perform work done by
Employee for the Company.
2.7 Safeguard of Confidential Information. Employee agrees to exercise the
highest degree of care in safeguarding Confidential Information against loss,
theft, or other inadvertent disclosure and agrees generally to take all steps
necessary or requested by the Company to ensure maintenance of confidentiality.
2.8 Exclusions. This section shall not apply to the following information:
(a) information now and hereafter voluntarily disseminated by the Company to the
public or which otherwise becomes part of the public domain through lawful
means; (b) information already known or acquired by Employee other than in
conjunction with Employment by the Company and as documented by written records
which predate this Agreement; (c) information subsequently and rightfully
received from third parties and not subject to any obligation of
confidentiality; (d) information independently developed by Employee after
termination of employment.
2.9 Prior Employment. Employee acknowledges and understands that the Company is
not employing Employee to obtain any information which is the property of any
previous employers or any other person for whom Employee has performed services.
Employee also acknowledges that the Company expects that the product of any
services performed hereunder, or knowledge or information, such as trade
secrets, trade lists, plans, or other confidential information developed in the
course of or as a result of service hereunder will be the property of the
Company in accordance with the terms hereof. Accordingly, Employee warrants and
represents to the Company that Employee will not, in performing services
hereunder, make use of information which is the property of and/or confidential
to any previous employer or other person or entity for whom services have been
furnished and that Employee has disclosed to the Company all prior employment
agreements which may impose restrictions on Employee's activities.
3. DELIVERY OF MATERIALS
Upon termination of employment status, Employee will deliver to the Company all
materials, including without limitation customer lists, documents, records,
drawings, prototypes, models and schematic diagrams, which describe, depict,
contain, constitute, reflect, record or in any way relate to inventions or
Confidential Information, which are in
Employee's possession or under Employee's control, whether or not the materials
were prepared by Employee.
4. SUBPOENAS
If Employee, during and after employment, is served with any subpoena or other
compulsory judicial or administrative process calling for production of
Confidential Information or if Employee is otherwise required by law or
regulation to disclose Confidential Information, Employee will immediately, and
prior to production or disclosure, notify the Company and provide it with such
information as may be necessary in order that the Company may take such action
as it deems necessary to protect its interest.
5. REMEDIES
Employee acknowledges that breach of the obligations imposed by this Agreement
will cause irreparable harm to the Company and, in that event, if Employee fails
to abide by these obligations, the Company will be entitled to specific
performance, including immediate issuance of temporary restraining order or
preliminary injunction enforcing this Agreement, and to judgment for damages
caused by Employee's breach, and to other remedies provided by applicable law.
6. DURATION
The obligations set forth in this Agreement will continue beyond the terms of
Employee's employment by the Company.
I understand and agree to the terms of this Confidentiality Agreement.
--------------------------------------
Employee's signature
--------------------------------------
Date
EXHIBIT F
[LETTERHEAD OF XXXX & XXXXX]
October 14, 0000
XXX Xxxxxxxxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
We have acted as special counsel to Advanced Machine Vision
Corporation, a California corporation (the "Company") in connection with the
issuance on the date hereof by the Company of 119,106 shares (the "Shares") of
the Company's Series B Preferred Stock, without par value (the "Series B
Preferred Stock") pursuant to a Series B Preferred Stock Purchase Agreement of
even date herewith (the "Purchase Agreement") between the Company and FMC
Corporation, a Delaware corporation ("FMC"). This opinion is rendered to you
pursuant to Section 6.1(1) of the Purchase Agreement.
As such counsel, we have made such legal and factual examinations and
inquiries as we have deemed necessary or appropriate for purposes of this
opinion, except where a statement is qualified as to knowledge or awareness, in
which case we have made no or limited inquiry as specified below. In connection
with this transaction, we have examined the following:
(a) The Purchase Agreement;
(b) The Registration Rights Agreement of even date herewith between
the Company and FMC (the "Registration Rights Agreement");
(c) The Option of even date herewith, issued by the Company;
(d) The Intellectual Property Security Agreement of even date herewith
between the Company and FMC;
(e) The Certificate of Determination of the Company (the
"Certificate");
(f) The agreements listed on Schedules to the Purchase Agreement (the
"Material Agreements").
FMC Corporation
October 14, 1998
Page 2
The documents described in subsections (a), (b), (c), (d) and (e)
above are referred to herein collectively as the "Transaction Documents."
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.
As to facts material to the opinions, statements and assumptions
expressed herein, we have, with your consent, relied upon written
representations of officers of the Company and others. In addition, we have
obtained and relied upon such certificates and assurances from public officials
as we have deemed necessary. Except as set forth above, we have made no
independent investigation of factual information contained in any of the
documents reviewed by us.
We are opining herein as to the effect on the subject transaction only
of the federal securities laws of the United States and the laws of the State of
California, and we express no opinion with respect to the applicability thereto,
or the effect thereon, of the laws of any other jurisdiction, or as to any
matters of municipal law or the laws of any local agencies within any state.
Whenever a statement herein is qualified by "to our knowledge" or a
similar phrase, it is intended to indicate that those attorneys in this firm who
have rendered legal services in connection with the above transaction do not
have current actual knowledge of the inaccuracy of such statement. However,
except as otherwise expressly indicated, we have not undertaken any independent
investigation to determine the accuracy of any such statement, and no inference
that we have any knowledge of any matters pertaining to such statement should be
drawn from our representation of the Company.
Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:
1. The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of California with corporate power
and authority to enter into the Transaction Documents and perform its
obligations thereunder and to carry on its business as presently conducted.
2. The execution, delivery and performance of the Transaction
Documents have been duly authorized by all necessary corporate action of the
Company, and the Transaction Documents have been duly executed and delivered by
the Company.
3. Each of the Transaction Documents constitutes a legally valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms.
FMC Corporation
October 14, 1998
Page 3
4. The execution, delivery and performance by the Company of the
Transaction Documents do not (i) violate any federal or California statute, rule
or regulation; (ii) violate the provisions of the Company's Articles of
Incorporation or By-laws; (iii) to our knowledge result in the breach of or a
default under any of the Material Agreements; (iv) to our knowledge require any
consents, approvals, authorizations or filings by the Company under any federal
or California statute, rule or regulation, except under federal or state
securities or Blue Sky laws or (v) to our knowledge, based solely on a
certificate of an officer of the Company, violate the terms of any judgment,
writ or court order applicable to the Company. No opinion is expressed in this
paragraph 4 as to the application of any antifraud laws, antitrust laws or trade
regulation laws.
5. The authorized capital stock of the Company consists or 60,000,000
shares of authorized Class A Common Stock (the "Common Stock"), of which
10,655,218 are issued and outstanding; 3,000,000 authorized shares of Class B
Common Stock, of which 64,335 shares are issued and outstanding; 400,000
authorized shares of Series A Preferred Stock, of which no shares are issued and
outstanding; and 119,106 authorized shares of Series B Preferred Stock, of which
119,106 are issued and outstanding as of the closing of the transactions set
forth in the Purchase Agreement. The Shares have been duly and validly
authorized and are validly issued, fully paid and nonassessable.
6. The Shares have been duly and validly authorized, and, when issued
and delivered against payment therefor pursuant to the Purchase Agreement, will
be validly issued, fully paid and nonassessable.
7. Subject to the accuracy of FMC's representations as set forth in
the Purchase Agreement and assuming that FMC's principal executive offices are
located outside the State of California and that payment for and delivery of the
shares takes place outside of California, the Shares, upon issuance, delivery
and payment therefor in the manner described in the Purchase Agreement, will be
issued in a transaction exempt from the registration requirements of the
Securities Act and the qualification requirements of Section 25110 of the
California Corporate Securities Law.
8. The shares of Common Stock of the Company issuable upon conversion
of the Shares have been duly reserved for issuance and when issued in compliance
with the provisions of the Certificate, will be validly issued, fully paid and
nonassessable.
9. The certificates representing the Shares are in compliance with the
requirements of the California General Corporations Law and have been duly and
validly executed by the officers of the Company named thereon.
The opinions expressed in paragraph 3 and paragraph 4 are subject to
the following limitations, qualifications and exceptions:
FMC Corporation
October 14, 1998
Page 4
(a) the effect of bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights of creditors,
including, without limitation, section 548 of the federal Bankruptcy Code
and section 547 of the federal Bankruptcy Code and comparable provisions of
state law;
(b) the effect of any antifraud laws, antitrust or trade regulation
laws;
(c) the effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or
injunctive relief regardless of whether considered in a proceeding in equity
or at law;
(d) certain rights, remedies and waivers contained in the Transaction
Documents may be limited or rendered ineffective by applicable California
laws or juridical decisions governing such provisions, but such laws or
judicial decisions do not render the Transaction Documents invalid or
unenforceable as a whole;
(e) the unenforceability under certain circumstances under law or
court decisions of provisions in Section 5 of the Registration Rights
Agreement and Section 8.4 of the Purchase Agreement providing for the
indemnification of or contribution to a party with respect to a liability
where such indemnification or contribution is contrary to public policy or
prohibited by law;
(f) the effect of Section 1717 of the California Civil Code, which
provides that, where a contract permits one party to the contract to recover
attorneys' fees, the prevailing party in any action to enforce any provision
of the contract shall be entitled to recover its reasonable attorneys' fees;
and
(g) the effect of California law, which provides that a court may
refuse to enforce, or may limit the application of, a contract or any clause
thereof which the court finds as a matter of law to have been unconscionable
at the time it was made or contrary to public policy.
In addition, with respect to our opinion expressed in paragraph 2 as
to authorization by all necessary corporate action of the Company, we call your
attention to the fact that in conversations with the Nasdaq Stock Market
("Nasdaq"), we have been informed by Nasdaq that it will not require shareholder
approval for the issuance of the Shares or the Option. However, Nasdaq has
indicated that in the event any additional shares are issued to FMC by the
Company, Nasdaq will "link the transactions" (quoted from conversation with
Nasdaq) and require shareholder approval for such additional issuance of shares.
In rendering the opinions expressed in paragraph 3 and paragraph 4
insofar as they require interpretation of the Material Agreements (i) we have
assumed with your permission the
FMC Corporation
October 14, 1998
Page 5
application of all internal laws of the State of California without giving
effect to any choice of law provisions contained therein or any choice of law
principles which would result in application of the internal laws of any other
state and (ii) to the extent that any questions or legality or legal
construction have arisen in connection with our review, we have applied the laws
of the State of California in resolving such questions. We advise you that
certain of the Material Agreements may be governed by other laws, that such laws
may vary substantially from the law assumed to govern for purposes of this
opinion, and that this opinion may not be relied upon as to whether or not a
breach or default would occur under the law actually governing such Material
Agreements.
We express no opinion as to the title of any property subject to the
Intellectual Property Security Agreement, the adequacy of any description of the
collateral, or the perfection or priority of any security interests granted
pursuant to such agreement.
To the extent that the obligations of the Company may be dependent
upon such matters, we assume for purposes of this opinion that: all parties to
the Transaction Documents other than the Company have complied with all
applicable requirement to file returns and pay taxes under the Franchise Tax Law
of the State of California; all parties to the Transaction Documents other than
the Company are duly incorporated or formed, and are validly existing and in
good standing under the laws of their respective jurisdictions of incorporation
or formation, all parties to the Transaction Documents other than the Company
have the requisite power to perform their respective obligations under the
Transaction Documents; and the Transaction Documents have been duly authorized,
executed and delivered by all parties to the Transaction Documents other than
the Company and constitute their legally valid and binding obligations,
enforceable against them in accordance with their terms. We express no opinion
as to compliance by any party to the Transaction Documents other than the
Company with any state or federal law or regulations applicable to the subject
transactions because of the nature of their business.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to, or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very truly yours,
XXXX & XXXXX
Professional Corporation
