Execution Copy
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated
as of November 11, 2003 (the "Effective Date"), is made by and among FARO
Technologies, Inc., a Florida corporation (the "Company"), with headquarters
located at 125 Technology Park, Lake Mary, Florida 32746, the investors named on
the signature pages to this Agreement (each of whom is referred to as the
"Investor" and all of whom collectively are referred to as the "Investors") and
Xenon Research, Inc., a Florida corporation, and Gregory A. Fraser, a Florida
resident (each of Xenon Research, Inc. and Gregory A. Fraser are referred to as
the "Selling Shareholder" and both of whom collectively are referred to as the
"Selling Shareholders"). Capitalized terms used herein and not otherwise defined
have the meanings given them in Article IX.
RECITALS:
A. The Company, the Selling Shareholders and the Investors are
executing and delivering this Agreement in accordance with and in reliance upon
the exemption from securities registration afforded by Sections 4(1) and 4(2) of
the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506
under Regulation D ("Regulation D") as promulgated by the United States
Securities and Exchange Commission (the "SEC") under the Securities Act.
B. The Investors desire, upon the terms and conditions stated
in this Agreement, to purchase from the Company and the Selling Shareholders
shares of the Company's common stock, par value $.001 per share (the "Common
Stock"), for an aggregate purchase price of up to $41,495,500. The purchase
price per share of the Common Stock is $21.50.
C. Contemporaneously with the execution and delivery of this
Agreement, the Company and the Investors are executing and delivering a
Registration Rights Agreement in the form of Exhibit A hereto under which the
Company has agreed to provide to the Investors certain rights with respect to
registration of the resale of the Securities under the Securities Act.
AGREEMENT:
In consideration of the premises and the mutual
representations, warranties and covenants contained herein, the Company, the
Selling Shareholders and the Investors hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SECURITIES
1.1. Purchase and Sale of Securities. At the Closing, subject to
the terms of this Agreement and the satisfaction or waiver of the conditions set
forth in Articles VII and VIII hereof, (i) the Company will sell to the
Investors the Company Shares, (ii) the Selling Shareholders (on a several and
not a joint basis) will sell to the Investors the Selling Shareholder Shares
(which the Company shall reissue and deliver in the name of the Investors at the
Closing) and (iii) each Investor will (on a several and not a joint basis)
purchase from the Company and the Selling Shareholders the number of Securities
set forth beneath such Investor's name on the signature pages hereof.
1.2. Payment at Closing. On the Closing Date, (i) each Investor
will pay the aggregate purchase price for the Securities as set forth beneath
its name on the signature pages hereof, by wire transfer to the Company of
immediately available funds in accordance with the written wire instructions set
forth on the signature page hereto of the Company, (ii) the Company will deliver
to the Selling Shareholders the aggregate purchase price paid by the Investors
for the Selling Shareholder Shares pursuant to Section 1.2(i)
hereof, by wire transfer to the respective Selling Shareholders of immediately
available funds in accordance with the written wire instructions set forth on
the signature page hereto of each Selling Shareholder and (iii) the Company (on
its behalf and on behalf of the Selling Shareholders) will deliver to each
Investor a certificate (bearing a restrictive legend as set forth in Section
2.8) representing the Securities so purchased by such Investor against delivery
of the purchase price therefor as described above.
1.3. Closing Date. Subject to the satisfaction or waiver of the
conditions set forth in Articles VII and VIII hereof, the Closing will take
place at 10:00 a.m. Eastern Time on November 12, 2003, or at another date or
time agreed upon by each of the parties to this Agreement (the "Closing Date").
The Closing will be held at the offices of Foley & Lardner, 100 N. Tampa Street,
Suite 2700, Tampa, Florida 33602, or at such other place as the parties agree.
1.4. Independent Nature. The rights and obligations of each
Investor under this Agreement, the Registration Rights Agreement and all other
agreements, documents and instruments contemplated hereby and thereby (the
"Transaction Documents") are several and not joint with the rights and
obligations of each other Investor, and an Investor shall not be responsible in
any way for the performance of the obligations of any other Investor under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Investor pursuant hereto or thereto, shall
constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Investor confirms
that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each
Investor shall be entitled to independently protect and enforce its rights,
including, without limitations, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for the other
Investors to be joined as an additional party in any proceeding for such
purposes.
ARTICLE II
INVESTOR'S REPRESENTATIONS AND WARRANTIES
Each Investor, severally and solely with respect to itself and
its purchase hereunder and not with respect to any other Investor, represents
and warrants to the Company and the Selling Shareholders that:
2.1. Investment Purpose. The Investor is purchasing the
Securities in the ordinary course of its business for its own account and not
with a view to the distribution thereof; and it does not have any contract,
undertaking, agreement or arrangement with any person or entity to sell,
transfer, distribute or grant participation to any third person or entity with
respect to any of the Securities; provided, however, that by making the
representation herein, the Investor does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities in accordance with or pursuant to an effective registration statement
or an exemption from registration under the Securities Act. The Investor
understands that the Investor may be required to bear the economic risk of this
investment indefinitely, unless the Securities are registered pursuant to the
Securities Act and any applicable state securities or blue sky laws or an
exemption from such registration is available, and that the Company has no
present intention of registering the Securities other than as contemplated by
the Registration Rights Agreement.
2.2. Investor Status. The Investor is either: (i) a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act; or
(ii) an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D. The Investor is not registered as a broker or dealer under Section
15(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or
a member of the National Association of Securities Dealers, Inc. If an Investor
is subject to the Employee Retirement Income Security Act of 1974, as amended,
and is acquiring the Securities as a fiduciary or agent for another investor's
account, then the Investor will have sole investment and voting discretion with
respect to such account and will have full
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power to make the acknowledgments, representations and agreements contained
herein on behalf of such account.
2.3. Reliance on Exemptions. The Investor understands that the
Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of the United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Investor's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein to determine
the availability of such exemptions and the eligibility of the Investor to
acquire the Securities.
2.4. Information. The Investor and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company, and materials relating to the offer and sale of the
Securities, that have been requested by the Investor or its advisors, if any.
The Investor and its advisors, if any, have been afforded the opportunity to ask
questions of the Company and have received what the Investor and its advisors,
if any, believe to be satisfactory answers to any such inquiries. The Investor
acknowledges and understands that its investment in the Securities involves a
significant degree of risk, including the risks reflected in the SEC Documents.
2.5. Experience. The Investor is experienced in evaluating
companies such as the Company, is able to fend for itself in transactions such
as the one contemplated by this Agreement, has such knowledge and experience in
financial and business matters that such Investor is capable of evaluating the
merits and risks of such Investor's prospective investment in the Company, and
has the ability to bear the economic risks of the investment in the Securities.
2.6. Governmental Review. The Investor understands that no
United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the
Securities or an investment therein.
2.7. Transfer or Resale. The Investor understands that:
(a) the delivery of the Securities has not been registered
under the Securities Act or any applicable state securities laws, and
consequently, the Investor may have to bear the risk of owning the
Securities for an indefinite period of time because the Securities may
not be transferred unless (i) the resale of the Securities is registered
pursuant to an effective registration statement under the Securities
Act; (ii) if requested by the Company, the Investor has delivered to the
Company an opinion of counsel (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions
and which counsel shall be reasonably satisfactory to the Company) to
the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration; (iii) the
Securities are sold or transferred pursuant to Rule 144; or (iv) the
Securities are sold or transferred to an affiliate (as defined in Rule
144) of the Investor;
(b) any sale of the Securities made in reliance on Rule
144 may be made only in accordance with the terms of Rule 144 (including
the holding period requirement, the volume limitations and the manner of
sale restrictions, if applicable); and
(c) except as set forth in the Registration Rights
Agreement, neither the Company nor any other person is under any
obligation to register the Securities under the Securities Act or any
state securities laws or to comply with the terms and conditions of any
exemption thereunder.
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2.8. Legends. The Investor understands that, until (a) the
Securities may be sold under Rule 144(k) or (b) such time as the Securities have
been sold pursuant to an effective registration statement under the Securities
Act in compliance with Rule 144 or pursuant to another exemption from
registration under the Securities Act, the certificates representing the
Securities will bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the certificates
for such Securities):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN SOLD
IN RELIANCE UPON AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
The legend set forth above will be removed, and the Company
will issue a certificate without the legend to the holder of any certificate
upon which it is stamped, in accordance with the terms of Article VI hereof.
2.9. Organization and Existence. To the extent indicated on the
signature pages hereto, each Investor is either (i) a limited partnership duly
organized and validly existing under the laws of its respective jurisdiction of
formation, (ii) a limited liability company duly organized and validly existing
under the laws of its respective jurisdiction of formation, (iii) a corporation
duly organized and validly existing under the laws of its respective
jurisdiction of incorporation, (iv) a series of a registered investment company,
(v) a trust fund whose trustee is a bank or trust company or (vi) an individual.
Such Investor represents that it was not organized solely for the purpose of
making an investment in the Company.
2.10. Authorization; Enforcement. This Agreement, the
Registration Rights Agreement and all other agreements, documents and
instruments contemplated hereby and thereby have been duly and validly
authorized, executed and delivered on behalf of the Investor and are valid and
binding agreements of the Investor enforceable against the Investor in
accordance with their respective terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and the application of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law) and except as the indemnification provisions in the
Registration Rights Agreement may be legally unenforceable.
2.11. No Conflicts; No Violation.
(a) The execution, delivery and performance of this
Agreement by the Investor will not (i) conflict with or result in a
violation of any provision of its charter documents or (ii) to its
knowledge, result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Investor.
(b) The Investor is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any
court or governmental agency or any regulatory or self regulatory agency
for the Investor to execute, deliver or perform any of its obligations
under this Agreement.
2.12. Acknowledgments Regarding Placement Agent. The Investor
acknowledges that Robert W. Baird & Co. Incorporated is acting as placement
agent (the "Placement Agent") for the Securities being offered hereby and
will be compensated by the Company for acting in such capacity. The Investor
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further acknowledges that the Placement Agent has acted solely as placement
agent for the Company in connection with the offering of the Securities by the
Company, that certain of the information and data provided to the Investor in
connection with the transactions contemplated hereby have not been subjected to
independent verification by the Placement Agent, and that the Placement Agent
makes no representation or warranty with respect to the accuracy or completeness
of such information, data or other related disclosure material. The Investor
further acknowledges that, in making its decision to enter into this Agreement
and purchase the Securities, it has relied on its own examination of the Company
and the terms of, and consequences, of holding the Securities. The Investor
further acknowledges that the provisions of this Section 2.12 are also for the
benefit of, and may also be enforced by, the Placement Agent.
2.13. No Public Offering. Investor has not received any
information relating to the Securities or the Company, and is not purchasing the
Securities as a result of, any form of general solicitation or general
advertising, including, but not limited to, any advertisement, article, notice
or other communication published in any newspaper, magazine or similar media or
broadcast over television or radio or pursuant to any seminar or meeting whose
attendees were invited by any general solicitation or general advertising.
2.14. Representation. The Investor has had an opportunity to
consult with an attorney in connection with the Investor's investment in the
Company.
2.15. Certain Trading Activities. During the 15 calendar days
before the date of this Agreement, the Investor has not directly or indirectly,
nor has any person or entity acting on behalf of or pursuant to any
understanding with the Investor, engaged in any trading of the Common Stock,
including Short Sales of the Common Stock, and no open position or Short Sale
relating to the Common Stock exists on the date hereof in the name or on behalf
of the Investor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject to such matters as are disclosed in the Company's SEC
Documents, the Company represents and warrants to the Investors that:
3.1. Organization and Qualification. The Company is duly
incorporated, validly existing and in good standing under the laws of the State
of Florida, with full corporate power and authority to own, lease, use and
operate its properties and to carry on its business as and where now owned,
leased, used, operated and conducted. The Company and its subsidiaries are duly
qualified to do business and are in good standing in every jurisdiction in which
the nature of the business conducted by them makes such qualification necessary,
except where the failure to be so qualified or in good standing in each such
jurisdiction would not have a Material Adverse Effect.
3.2. Authorization; Enforcement. (a) The Company has all
requisite corporate power and authority to enter into and to perform its
obligations under the Transaction Documents, to consummate the transactions
contemplated hereby and thereby and to deliver the Securities in accordance with
the terms hereof; (b) the execution, delivery and performance of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without limitation the
issuance and sale of the Company Shares, have been duly authorized by the
Company's Board of Directors and no further consent or authorization of the
Company, its Board or Directors or its shareholders is required; (c) each of the
Transaction Documents have been or will be duly executed by the Company; and
(d) each of the Transaction Documents constitutes or will upon execution
constitute a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency, reorganization, or moratorium or similar laws
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affecting the rights of creditors generally and the application of general
principles of equity and except as the indemnification provisions in the
Registration Rights Agreement may be legally unenforceable.
3.3. Capitalization. The authorized capital stock of the Company
consists of (i) 50,000,000 shares of the Common Stock, of which 12,100,022
shares were issued and outstanding as of September 27, 2003, and (ii) 10,000,000
shares of preferred stock, par value $.001 per share, none of which are issued
and outstanding. Other than (a) grants or issuances pursuant to employee benefit
plans or director plans disclosed in the Company's SEC Documents (the "Plans")
or (b) as disclosed in the Company's SEC Documents, the Company has not issued
any capital stock since September 27, 2003. All of such outstanding shares of
Common Stock are duly authorized, validly issued, fully paid and nonassessable.
The Company Shares have been duly authorized, and when delivered and paid for in
accordance with the terms of this Agreement, will be validly issued, fully paid
and nonassessable, free from all taxes, liens, claims, encumbrances and charges
with respect to the delivery thereof (other than those imposed through acts or
omissions of an Investor). No shares of capital stock of the Company, including
the Securities, are subject to preemptive rights or any other similar rights of
the shareholders of the Company or any liens or encumbrances imposed through the
actions or failure to act of the Company. Other than pursuant to this Agreement
and as contemplated by the Plans, there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims, antidilution protection or other commitments
or rights of any character whatsoever that could require the Company to issue
additional shares of capital stock of the Company or adjust the purchase or
exercise price of any such instrument. There are no agreements or arrangements,
including any set forth in the SEC Documents, (other than the Registration
Rights Agreement) under which the Company is obligated to register the sale of
any of its securities under the Securities Act. Assuming the accuracy of each of
the representations and warranties of the Investors contained in Section 2, the
issuance by the Company of the Company Shares is exempt from registration under
the Securities Act.
3.4. No Conflicts; No Violation.
(a) The execution, delivery and performance of each of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby including, without limitation, the
delivery of the Securities will not (i) conflict with or result in a violation
of any provision of the Articles of Incorporation or By-laws of the Company or
(ii) violate or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or both
could become a default) under, or give to others any rights of termination,
amendment (including without limitation, the triggering of any anti-dilution
provision), acceleration or cancellation of, any agreement, indenture, patent,
patent license or instrument to which the Company or any of its subsidiaries is
a party, or (iii) assuming the accuracy of the representations of the Investors,
result in a violation of any law, rule, regulation, order, judgment or decree
(including United States federal and state securities laws and regulations and
regulations of any self-regulatory organizations to which the Company, any of
subsidiaries, or its securities are subject), applicable to the Company or by
which any property or asset of the Company or any of its subsidiaries is bound
or affected, except in the case of clauses (ii) and (iii) for such conflicts,
breaches, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect.
(b) The Company is not in violation of its Articles of
Incorporation or By-laws. To the knowledge of the Company, the Company is not in
violation of any law, ordinance or regulation of any governmental entity. The
Company is not in default (and no event has occurred which with notice or lapse
of time or both could put the Company in default) under any agreement, indenture
or instrument to which the Company or any of its subsidiaries is a party or by
which any property or assets of the Company or any of its subsidiaries is bound
or affected, except for such defaults as would not, individually or in the
aggregate, have a Material Adverse Effect.
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(c) Without limiting the generality of the foregoing, the
Company is not in violation of any of the rules, regulations or requirements of
the Nasdaq National Market (the "Principal Market"), where such violation
(individually or in the aggregate) reasonably would be expected to result in the
delisting or suspension of the Common Stock from the Principal Market, and has
no knowledge of any facts or circumstances which would reasonably lead to
delisting or suspension of the Common Stock on the Principal Market in the
foreseeable future. Since January 31, 2003, (i) the Common Stock has been
designated for quotation on the Principal Market, (ii) trading in the Common
Stock has not been suspended by the Securities and Exchange Commission (the
"SEC") or the Principal Market and (iii) the Company has received no
communication, written or oral, from the SEC or the Principal Market regarding
the suspension or delisting of the Common Stock from the Principal Market. The
Company and its subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such subsidiary has received any notice of proceedings relating
to the revocation or modification of any such certificate, authorization or
permit.
3.5. Approvals. Assuming the accuracy of the representations of
the Investors, except for the filing of a Form D and as may be required under
the Securities Act and any applicable state securities laws and any listing
agreement with any securities exchange or automated quotation system, the
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court or governmental agency or any
regulatory or self regulatory agency for it to execute, deliver or perform any
of its obligations under this Agreement or the Registration Rights Agreement, in
each case in accordance with the terms hereof or thereof, or sell the Securities
in accordance with the terms hereof. All consents, authorizations, orders,
filings and registrations that the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date
hereof.
3.6. SEC Documents; Financial Statements. Since September 30,
2002, the Company has timely filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Exchange Act (all of the foregoing filed after
December 31, 2002 and prior to the date hereof and all exhibits included therein
and financial statements and schedules thereto and documents incorporated by
reference therein being referred to herein as the "SEC Documents"). The Company
has delivered to each Investor, or each Investor has had access to, true and
complete copies of the SEC Documents. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Documents have been prepared in accordance with United
States generally accepted accounting principles, consistently applied, during
the periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
3.7. Absence of Certain Changes. Except as disclosed in the
SEC Documents, since December 31, 2002, there has been no material adverse
change in the assets, liabilities, business, properties, operations, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole. The Company has not taken any steps to seek protection pursuant to any
bankruptcy law nor does the
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Company have any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings or any actual knowledge of any fact
which would reasonably lead a creditor to do so.
3.8. No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or
exists that would be required to be disclosed by the Company under applicable
securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly announced or disclosed in an SEC Document.
3.9. Sarbanes-Oxley Act. The Company is in compliance with any
and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are
effective as of the date hereof, and any and all applicable rules and
regulations promulgated by the SEC thereunder that are effective as of the date
hereof, except where such noncompliance would not have, individually or in the
aggregate, a Material Adverse Effect.
3.10. Absence of Litigation. Except as disclosed in the SEC
Documents, there is no action, suit, claim, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company, any of its officers or directors acting as
such, or any of its subsidiaries that could, individually or in the aggregate,
have a Material Adverse Effect.
3.11. Intellectual Property Rights. The Company and its
subsidiaries own or possess the licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and copyrights
necessary to enable it to conduct its business as now operated (the
"Intellectual Property"), except where the failure to possess such licenses or
rights to use would not have, individually or in the aggregate, a Material
Adverse Effect. None of the Company's or its subsidiaries' Intellectual Property
have expired or terminated, or are expected to expire or terminate, within three
years from the date of this Agreement. The Company does not have any knowledge
of any infringement by the Company or any of its subsidiaries of Intellectual
Property of others. There is no claim, action or proceeding being made or
brought, or to the knowledge of the Company, being threatened against the
Company or any of its subsidiaries regarding the Company's or its subsidiaries'
Intellectual Property. The Company is unaware of any facts or circumstances
which might reasonably give rise to any of the foregoing infringements or
claims, actions or proceedings. The Company and its subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of its intellectual properties.
3.12. Tax Status. The Company and its subsidiaries have made or
filed all federal, state and foreign income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them are subject
(unless and only to the extent that the Company or a subsidiary has set aside on
its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and have paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith.
To the knowledge of the Company, there are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction.
3.13. No Integrated Offering. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances within the prior six months that would
require registration under the Securities Act of the delivery of the Securities
to the Investors.
3.14. No Brokers. The Company has taken no action that would
give rise to any claim by any person for brokerage commissions, finder's fees or
similar payments relating to this Agreement or the
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transactions contemplated hereby, except with respect to the Placement Agent
whose commissions and fees with respect to the Company Shares will be paid for
by the Company.
3.15. Insurance. The Company and its subsidiaries maintain
insurance of the types and in such amounts as management of the Company believes
to be prudent and customary in the businesses in which the Company and its
subsidiaries are engaged.
3.16. Eligibility to use Form S-3. The Company satisfies the
"registrant eligibility" requirements for a secondary offering and otherwise
satisfies the requirements for registering the resale of the Securities by the
Investors as set forth in the general instructions to Form S-3 to enable the
registration of the Registrable Securities (as defined in the Registration
Rights Agreement).
3.17. No General Solicitation. Neither the Company nor, to the
knowledge of the Company, any person acting for the Company, has conducted any
"general solicitation" (as such term is defined in Regulation D) with respect to
any of the Common Stock being offered hereby.
3.18. Investment Company Status. The Company is not and upon
consummation of the sale of the Securities will not be an "investment company,"
a company controlled by an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended.
3.19. Application of Takeover Protections; Rights Agreement. The
transactions contemplated by this Agreement, including without limitation the
sale and delivery of the Securities, will not trigger any control share
acquisition, business combination, or other similar anti-takeover provision
under the Articles of Incorporation or the laws of the state of the Company's
incorporation. The Company does not have a "poison pill" or stockholder rights
plan in effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE Selling shareholders
Each Selling Shareholder, severally and solely with respect to
itself or himself and not with respect to the Company or the other Selling
Shareholder, represents and warrants to the Investors that:
4.1. Organization and Existence. Xenon Research, Inc. is a
Florida corporation duly organized and validly existing under the laws of the
State of Florida.
4.2. Authorization; Enforcement. This Agreement has been duly
and validly authorized, executed and delivered by the Selling Shareholder and is
a valid and binding agreement of the Selling Shareholder enforceable against
the Selling Shareholder in accordance with its terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). Assuming the accuracy of each of the
representations and warranties of the Investors contained in Section 2, the sale
by the Selling Shareholders of the Selling Shareholder Shares is exempt from
registration under the Securities Act.
4.3. No Conflicts; No Violation.
(a) The execution, delivery and performance of this
Agreement by the Selling Shareholder will not, to its or his knowledge,
result in a violation of any law, rule, regulation, order, judgment or
decree applicable to the Selling Shareholder.
9
(b) The Selling Shareholder is not required to obtain any
consent, authorization or order of, or make any filing or registration
with, any court or governmental agency or any regulatory or self
regulatory agency for the Selling Shareholder to execute, deliver or
perform any of its or his obligations under this Agreement.
4.4. Title. The Selling Shareholder is the sole record and
beneficial owner of the Selling Shareholder Shares to be sold by it or him
pursuant to this Agreement and owns such shares free from all taxes, liens,
claims, encumbrances and charges with respect to the delivery thereof (other
than those imposed through acts or omissions of an Investor). There are no
outstanding rights, options, subscriptions, or other agreements or commitments
obligating the Selling Shareholder with respect to the Selling Shareholder
Shares. The Selling Shareholder Shares, when delivered and paid for in
accordance with the terms of this Agreement, will be validly issued, fully paid
and nonassessable, free from all taxes, liens, claims, encumbrances and charges
with respect to the delivery thereof (other than those imposed through acts or
omissions of an Investor).
4.5. Absence of Litigation. There is no action, suit, claim,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Selling Shareholder, threatened against or affecting the
Selling Shareholder or any applicable officers or directors acting as such that
could, individually or in the aggregate, have any affect on the ability of the
Selling Shareholder to perform its obligations pursuant to the transactions
contemplated by this Agreement or under the agreements or instruments to be
entered into or filed in connection herewith.
4.6. No Brokers. The Selling Shareholder has taken no action
that would give rise to any claim by any person for brokerage commissions,
finder's fees or similar payments relating to this Agreement or the transactions
contemplated hereby, except with respect to the Placement Agent whose
commissions and fees with respect to the Selling Shareholder Shares
will be paid for by the Selling Shareholders.
ARTICLE V
COVENANTS
5.1. Best Efforts. Each party will use its best efforts to
satisfy in a timely fashion each of the conditions to be satisfied by it under
Articles VII and VIII of this Agreement.
5.2. Form D; Blue Sky Laws. The Company will file a Notice of
Sale of Securities on Form D with respect to the Securities, if required under
Regulation D. The Company will take such action as it reasonably determines to
be necessary, if any, to qualify the Securities for sale to the Investors under
this Agreement under applicable securities (or "blue sky") laws of the states of
the United States (or to obtain an exemption from such qualification).
5.3. Reporting Status. The Common Stock is registered under
Section 12 of the Exchange Act. The Company will not terminate its status as an
issuer required to file reports under the Exchange Act even if the Exchange Act
or the rules and regulations thereunder would permit such termination.
5.4. Expenses. Except as set forth in Sections 3.14 and 4.6, the
Company, the Selling Shareholders and each Investor are liable for, and will
pay, their own expenses incurred in connection with the negotiation,
preparation, execution and delivery of this Agreement and the other agreements
to be executed in connection herewith, including, without limitation, attorneys'
and consultants' fees and expenses.
10
5.5. Listing. The Company shall promptly secure the listing of
all of the Registrable Securities (as defined in the Registration Rights
Agreement) upon each national securities exchange and automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance) and shall use its reasonable best efforts to
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all Registrable Securities. The Company shall use its reasonable best
efforts to maintain the Common Stock's authorization for quotation on the
Principal Market. The Company shall not take any action which would be
reasonably expected to result in the delisting or suspension of the Common Stock
on the Principal Market. The Company shall pay to the Principal Market all fees
and expenses in connection with satisfying its obligations under this Section
5.5.
5.6. No Integration. The Company will not make any offers or
sales of any security (other than the Company Shares) under circumstances that
would cause the offering of the Company Shares to be integrated with any other
offering of securities by the Company (i) for the purpose of any shareholder
approval provision applicable to the Company or its securities or (ii) for
purposes of any registration requirement under the Securities Act.
5.7. Sales by Investors. Each Investor will sell any Securities
sold by it in compliance with applicable prospectus delivery requirements, if
any, or otherwise in compliance with the requirements for an exemption from
registration under the Securities Act and the rules and regulations promulgated
thereunder. No Investor will make any sale, transfer or other disposition of the
Securities in violation of federal or state securities laws.
5.8. Disclosure of Transactions and Other Material Information.
Before 9:30 a.m., New York Time, on the first business day following the
Effective Date of this Agreement (provided that each Investor has executed and
delivered a counterpart of this Agreement before 8:30 a.m., New York Time, on
such date and time), the Company will issue a press release describing the terms
of the transactions contemplated by the Transaction Documents (the "Press
Release"). In addition, within one business day following the Closing Date, the
Company shall file a Current Report on Form 8-K describing the terms of the
transactions contemplated by the Transaction Documents in the form required by
the 1934 Act, and attaching the material Transaction Documents (including,
without limitation, this Agreement and the Registration Rights Agreement) as
exhibits to such filing (including all attachments, the "8-K Filing"). From and
after issuing the Press Release, no Investor shall be in possession of any
material, nonpublic information received from the Company or any of its
respective officers, directors, employees or agents, that is not disclosed in
the Press Release. The Company shall not, and shall cause each of its officers,
directors, employees and agents, not to, provide any Investor with any material,
nonpublic information regarding the Company from and after the filing of the
Press Release without the express written consent of such Investor. Neither the
Company nor any Investor shall issue any press releases or any other public
statements with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of any
Investor, to make any press release or other public disclosure with respect to
such transactions (i) in substantial conformity with the 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) Schulte Roth & Zabel LLP
shall be consulted by the Company in connection with any such press release or
other public disclosure prior to its release).
ARTICLE VI
TRANSFER AGENT INSTRUCTIONS; REMOVAL OF LEGENDS
6.1. Issuance of Certificates. The Company will instruct its
transfer agent to issue a certificate, registered in the name of each Investor
or its nominee, for the respective Securities. All such certificates will bear
the restrictive legend described in Section 2.8, except as otherwise specified
in this Article VI. In addition, the Company will issue irrevocable Transfer
Agent Instructions to the transfer agent in the form of Exhibit B hereto. The
Company will not give to its transfer agent any instruction with respect
11
to the Securities other than as contemplated by Article VI and stop transfer
instructions to give effect to Section 2.8 hereof (prior to registration of the
Securities under the Securities Act). Nothing in this Section will affect in any
way the Investors' obligations and agreements set forth in Section 5.7 hereof to
comply with all applicable prospectus delivery requirements, if any, upon resale
of the Securities.
6.2. Unrestricted Securities. If, unless otherwise required by
applicable state securities laws, (a) the Securities represented by a
certificate have been sold under an effective registration statement filed under
the Securities Act, (b) a holder of Securities provides the Company with an
opinion of counsel in form, substance and scope customary for opinions of
counsel in comparable transactions, which counsel shall be reasonably
satisfactory to the Company, to the effect that a public sale or transfer of
such Securities may be made without registration under the Securities Act or
(c) the Securities represented by a certificate can be sold without restriction
as to the number of securities sold under Rule 144(k), then the transfer agent
will issue one or more certificates, free from any restrictive legend, in such
name and in such denominations as specified by such holder in accordance with
the Transfer Agent Instructions. Notwithstanding anything herein to the
contrary, (i) the Securities may be pledged as collateral in connection with a
bona fide margin account or other lending arrangement; provided that such pledge
will not alter the provisions of this Article VI with respect to the removal of
restrictive legends, and (ii) any Investor that is a registered investment
company may transfer shares to any other fund or account advised by such
Investor's investment manager or its affiliates if the transferee is a qualified
institutional buyer (as defined in Rule 144A under the Securities Act) and
agrees in writing to be bound by the terms hereof and the terms of the
Registration Rights Agreement.
6.3. Enforcement of Provision. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the
Investor by invalidating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Article VI will be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions
of this Article VI that the Investor will be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring
immediate transfer, without the necessity of showing economic loss and without
any bond or other security being required.
ARTICLE VII
CONDITIONS TO THE COMPANY'S AND THE
SELLING SHAREHOLDERS' OBLIGATION TO SELL
The obligations of the Company and the Selling Shareholders
under Article I of this Agreement are subject to the fulfillment at or before
the Closing of each of the following conditions. These conditions are for the
benefit of the Company and the Selling Shareholders and may be waived by the
Company and the Selling Shareholders in whole or in part at any time in their
sole discretion. Without limitation, the Company and the Selling Shareholders
may in their sole discretion proceed with the Closing with respect to each
Investor as to whom each condition has been satisfied whether or not conditions
have been satisfied as to other Investors:
7.1. The Investors will have executed this Agreement and the
Registration Rights Agreement and will have delivered such executed agreements
to the Company.
7.2. The Investors will have delivered the purchase price for
the Securities to the Company in accordance with this Agreement.
7.3. The representations and warranties of the Investors must be
true and correct in all material respects as of the Closing Date as though made
at that time (except for representations and warranties that speak as of a
specific date, which representations and warranties must be correct as of such
12
date), and the Investors will have performed and complied with the covenants and
conditions required by this Agreement to be performed or complied with by the
Investors at or prior to the Closing.
7.4. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction will have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
7.5. As of the Closing Date and immediately following the
consummation of the transactions contemplated herein no Investor will
beneficially own 10% or more of the Common Stock as determined in accordance
with Section 13(d) of the Securities Act and the rules and regulations
promulgated thereunder.
ARTICLE VIII
CONDITIONS TO EACH INVESTOR'S OBLIGATION TO PURCHASE
The obligation of each Investor hereunder to purchase the
Securities from the Company and the Selling Shareholders at the Closing is
subject to the fulfillment at or before the Closing of each of the following
conditions. These conditions are for each Investor's respective benefit and may
be waived by such Investor at any time in its sole discretion:
8.1. The Company will have executed this Agreement and the
Registration Rights Agreement and will have delivered such executed agreements
to the Investor.
8.2. The Company will have delivered to such Investor a duly
executed certificate, against payment therefor, representing the Securities as
specified in Section 1.1.
8.3. The representations and warranties of the Company and the
Selling Shareholders must be true and correct in all material respects as of the
Closing as though made at that time (except for representations and warranties
that speak as of a specific date, which representations and warranties must be
true and correct as of such date), and the Company and the Selling Shareholders
must have performed and complied with the covenants and conditions required by
this Agreement to be performed or complied with by the Company and the Selling
Shareholders (as the case may be) at or prior to the Closing.
8.4. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction will have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.
8.5. The Common Stock (I) shall be designated for quotation or
listed on the Principal Market and (II) shall not have been suspended, as of the
Closing Date, by the SEC or the Principal Market from trading on the Principal
Market nor shall suspension by the SEC or the Principal Market have been
threatened, as of the Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market.
8.6. Such Investor will have received an opinion of the
Company's counsel, dated as of the Closing Date, in form reasonably satisfactory
to the Investors, addressing the matters set forth in Exhibit C hereto.
8.7. The irrevocable Transfer Agent Instructions, in
substantially the form attached hereto as Exhibit B, will have been delivered to
the Company's transfer agent and acknowledged in writing by such transfer agent.
13
8.8. The Company shall have delivered to such Investor a
certificate, executed by the Secretary of the Company and dated as of the
Closing Date, as to (i) the resolutions as adopted by the Company's Board of
Directors, (ii) the Articles of Incorporation and (iii) the Bylaws, each as in
effect at the Closing.
ARTICLE IX
DEFINITIONS
9.1. "Closing" means the closing of the purchase and sale of the
Securities under this Agreement.
9.2. "Closing Date" has the meaning set forth in Section 1.3.
9.3. "Common Stock" has the meaning set forth in the Recitals.
9.4. "Company" has the meaning set forth in the introduction to
this Agreement.
9.5. "Company Shares" means the 1,158,000 shares of Common Stock
being sold by the Company pursuant to this Agreement.
9.6. "Exchange Act" has the meaning set forth in Section 2.2.
9.7. "Intellectual Property" has the meaning set forth in
Section 3.9.
9.8. "Investors" means the investors whose names are set forth
on the signature pages of this Agreement, and their permitted transferees.
9.9. "Material Adverse Effect" means (a) a material adverse
effect on the assets, liabilities, financial condition or results of operation
of the Company and its subsidiaries, taken as a whole or (b) any affect on the
ability of the Company to perform its obligations pursuant to the transactions
contemplated by this Agreement or under the agreements or instruments to be
entered into or filed in connection herewith.
9.10. "Placement Agent" has the meaning set forth in Section
2.12.
9.11. "Plans" has the meaning set forth in Section 3.3.
9.12. "Registration Rights Agreement" means the Registration
Rights Agreement, dated as of the Closing Date, by and among the Company and the
Investors, in the form attached hereto as Exhibit A.
9.13. "Regulation D" is defined in the Recitals.
9.14. "Rule 144" and "Rule 144(k)" mean Rule 144 and Rule
144(k), respectively, as promulgated under the Securities Act, or any successor
rule.
9.15. "SEC" is defined in Section 3.4(c).
9.16. "SEC Documents" has the meaning set forth in Section 3.6.
9.17. "Securities" means the Company Shares and the Selling
Shareholder Shares that are being sold pursuant to this Agreement.
14
9.18. "Securities Act" is defined in the Recitals.
9.19. "Selling Shareholders" has the meaning set forth in the
introduction to this Agreement.
9.20. "Selling Shareholder Shares" means the 772,000 shares of
Common Stock being sold by the Selling Shareholders pursuant to this Agreement,
663,920 shares of which are being sold by Xenon Research, Inc. and 108,080
shares of which are being sold by Gregory A. Fraser.
9.21. "Short Sales" means all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps
(including on a total return basis), and sales and any other transactions having
the effect of hedging any position in the Common Stock.
9.22. "Transfer Agent Instructions" means the transfer agent
instructions attached hereto as Exhibit B.
Article X
GOVERNING LAW; MISCELLANEOUS
10.1. Governing Law; Jurisdiction; Jury Trial. This Agreement
will be governed by and interpreted in accordance with the laws of the State of
New York without regard to the principles of conflict of laws. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
10.2. Counterparts; Signatures by Facsimile. This Agreement may
be executed in two or more counterparts. Each executed counterpart will be
considered an original document, and all executed counterparts, are considered
one and the same agreement. This Agreement will become effective as of the
Effective Date when counterparts have been signed and delivered (i) by the
Investors and the Selling Shareholders to Foley & Lardner on behalf of the
Company and (ii) by the Company to Schulte Roth & Zabel LLP on behalf of the
Investors. This Agreement, once executed by a party, may be delivered by
facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.
10.3. Headings. The headings of this Agreement are for
convenience of reference only, are not part of this Agreement and do not affect
its interpretation.
10.4. Severability. If any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such
provision will be deemed modified to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law will
not affect the validity or enforceability of any other provision hereof.
10.5. Entire Agreement; Amendments. This Agreement and the
Registration Rights Agreement (including all schedules and exhibits hereto and
thereto) and the instruments contemplated hereby and thereby constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof
15
and thereof. There are no restrictions, promises, representations, warranties or
undertakings, other than those set forth or referred to herein or therein. This
Agreement and the Registration Rights Agreement supersede all prior agreements
and understandings among the parties hereto with respect to the subject matter
hereof. No provision of this Agreement may be waived or amended other than by an
instrument in writing signed by the party to be charged with
enforcement.
10.6. Notices. Any notices required or permitted to be given
under the terms of this Agreement must be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile and will be effective
five days after being placed in the mail, if mailed by regular United States
mail, or upon receipt, if delivered personally or by facsimile, in each case
addressed to a party. Any notice sent by courier (including a recognized
overnight delivery service) will be deemed received one business day after being
sent. The addresses for such communications are:
If to the Company or the
Selling Shareholders: FARO Technologies, Inc.
125 Technology Park
Lake Mary, Florida 32746
Attention: Simon Raab and Gregory A. Fraser
Facsimile: (407) 333-4181
With a copy to:
Foley & Lardner
100 N. Tampa St., Suite 2700
Tampa, Florida 33602
Attention: Martin A. Traber and Steven Vazquez
Facsimile: (813-221-4210)
If to an Investor: To the address set forth immediately below
such Investor's name on the signature pages
hereto.
With a copy to:
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention: Eleazer Klein
Facsimile: (212) 593-5955
Each party will provide written notice to the other parties of any change in its
address.
10.7. Indemnification. In consideration of each Investor's
execution and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company's other obligations under the
Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless each Investor and all of their stockholders, partners, members,
officers, directors, employees and direct or indirect investors and any of the
foregoing persons' agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the "Investor Indemnitees") from and against any
and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"), incurred
16
by any Investor Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents, (b) any breach of any covenant, agreement
or obligation of the Company contained in the Transaction Documents or (c) any
cause of action, suit or claim brought or made against such Investor Indemnitee
by a third party (including for these purposes a derivative action brought on
behalf of the Company) and arising out of or resulting from the execution,
delivery, performance or enforcement of the Transaction Documents. To the extent
that the foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 10.7
shall be the same as those set forth in Article VI of the Registration Rights
Agreement.
10.8. Termination. In the event that the Closing shall not have
occurred with respect to an Investor on or before five (5) business days from
the date hereof due to the Company's or such Investor's failure to satisfy the
conditions set forth in Articles VII and VIII above (and the nonbreaching
party's failure to waive such unsatisfied condition(s)), the nonbreaching party
shall have the option to terminate this Agreement with respect to such breaching
party at the close of business on such date without liability of any party to
any other party.
10.9. Successors and Assigns. This Agreement is binding upon and
inures to the benefit of the parties and their successors and permitted assigns.
The Company will not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Investors, and no Investor
may assign this Agreement or any rights or obligations hereunder without the
prior written consent of the Company (which shall not be unreasonably withheld
or delayed). Notwithstanding the foregoing, an Investor or a Selling Shareholder
may assign all or part of its rights and obligations hereunder to any of its
"affiliates," as that term is defined under the Securities Act, without the
consent of the Company so long as the affiliate is a "qualified institutional
buyer" or an "accredited investor" as defined in Section 2.2 and agrees in
writing to be bound by this Agreement. This provision does not limit the
Investor's right to transfer the Securities pursuant to the terms of this
Agreement. Notwithstanding any assignment as provided herein to an affiliate of
an Investor or a Selling Shareholder, each Investor and Selling Shareholder
shall thereafter remain fully responsible and liable for performance of all of
its obligations under this Agreement. Notwithstanding the foregoing, any
transferee who purchases the Securities in a public sale shall not have any
rights under this Agreement.
10.10. Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person or entity; provided, however, that the provisions in
Section 2.12 relating to acknowledgments regarding the Placement Agent are
intended for the benefit of the Placement Agent.
10.11. Survival. The representations and warranties of the
Company and the Selling Shareholders set forth herein will survive for two (2)
years following the Closing hereunder. Neither the Company nor the Selling
Shareholders make any representations or warranties in any oral or written
information provided to Investors, other than the representations and warranties
included herein.
10.12. Further Assurances. Each party will do and perform, or
cause to be done and performed, all such further acts and things, and will
execute and deliver all other agreements, certificates, instruments and
documents, as another party may reasonably request to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
17
10.13. No Strict Construction. The language used in this
Agreement is deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against any
party.
* * * * *
18
IN WITNESS WHEREOF, the undersigned Investors, Selling
Shareholders and the Company have caused this Securities Purchase Agreement to
be duly executed as of the date first above written.
COMPANY:
FARO TECHNOLOGIES, INC.
By: /s/ Simon Raab
-------------------------------------
Simon Raab
Chairman of the Board, President and
Chief Executive Officer
WIRE TRANSFER INSTRUCTIONS:
Bank Name: Suntrust Bank
ABA Number: 061000104
Account Number: 1000009578625
Account Name: FARO Technologies, Inc.
SELLING SHAREHOLDERS:
XENON RESEARCH, INC.
By: /s/ Simon Raab
-------------------------------------
Simon Raab
President
WIRE TRANSFER INSTRUCTIONS:
Bank Name: Chase Manhattan Bank, New
York, NY
ABA Number: 0210-0002-1 for the account
at NFS account number 066196-221
Reference: FBO Xenon Research, Inc.
Account Number: W65-170682
/s/ Gregory A. Fraser
----------------------------------------
GREGORY A. FRASER
WIRE TRANSFER INSTRUCTIONS:
Bank Name: Wachovia (800-275-3862)
ABA Number: 063000021
Account Number: 3464070004475
Reference: FBO Linda C. and Gregory A.
Fraser
19
005.312260.4
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: American Century Mutual
Funds, Inc., on behalf
of New Opportunities
Fund
By: /s/ Charles C.S. Park
----------------------------------------
Print Name: Charles C.S. Park
Title: Vice President and Secretary
Address: 4500 Main Street
Kansas City, MO 64111
Telephone: 816.340.9410
Facsimile: 816.340.4964
Number of Shares: 221,080
----------------------
Name in which Shares Are to Be Held (please
print):
CUDD & CO
--------------------------------------------
Aggregate Purchase Price: $ 4,753,220
------------------
Social Security or Tax ID Number: 43-6718248
----------
005.312260.4
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: American Century Mutual
Funds, Inc., on behalf of
New Opportunities II Fund
By: /s/ Charles C.S. Park
----------------------------------------
Print Name: Charles C.S. Park
Title: Vice President and Secretary
Address: 4500 Main Street
Kansas City, MO 64111
Telephone: 816.340.9410
Facsimile: 816.340.4964
Number of Shares: 23,920
----------------------
Name in which Shares Are to Be Held (please
print):
CUDD & CO
--------------------------------------------
Aggregate Purchase Price: $ 514,280
------------------
Social Security or Tax ID Number: 43-1911448
-----------
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: SMITHFIELD FIDUCIARY LLC
By: /s/ Adam J. Chill
----------------------------------------
Print Name: Charles C.S. Park
Title: Authorized Signatory
-
Address: c/o Highbridge Capital Management,
LLC
9 West 57th Street, 27th Floor
New York, New York 10019
Attn: Ari J. Storch/Adam J. Chill
Telephone: (212) 287-4720
Facsimile: (212) 751-0755
Number of Shares: 100,000
----------------------
Name in which Shares Are to Be Held (please
print):
Smithfield Fiduciary LLC
Aggregate Purchase Price: $ 2,150,000.00
------------------
Social Security or Tax ID Number: N/A
---------
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Endeavor LP* Posner Partners Microcap*
First American Insurance SCG Fund* Paul M. Posner Agency*
John J.Frautschi City of Springfield Missouri Policemen and Firemens
Life Trust Microcap * Retirement Fund*
First American Small Cap Growth Opportunity Fund* St. Paul Electrical Constr. Pension SC*
Lyndhurst Associates* St. Paul Electrical Constr. Supp. SC*
Milwaukee Jewish Federation* ES Tallmadge Residuary Trust 2*
Greater Milwaukee Foundation - Micro Cap* WM Chester - Chester Children Small Cap*
Henry Posner III Agency* Oregon Retail Employees Pension Trust*
Richard D. Waterfield - Small Cap*
*BY: U.S. BANCORP ASSET MANAGEMENT
Attorney-in-fact
By: /s/ Joseph A. Frohna
------------------------------------------------------
Name: Joseph A. Frohna
Title: Managing Director
[For Additional Information Regarding the Investors Set Forth on this Signature
Page See Appendix I]
Address/Telephone Name in which Aggregate Social Security
Number and Facsimile Number of Shares are to Purchase or Tax ID
Name Number Shares be Held Price Number
- ------------------------------------------------------------------------------------------------------------------------------------
Endeavor LP US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402
Attn: Sean Goudy
Tel: (612) 303-3333 1,600 Endeavor LP $34,400 91-1740115
Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402 First American
Attn: Sean Goudy Insurance Small
Tel: (612) 303-3333 Cap Growth Fund
First American Insurance Fax: (612) 303-4264 1,410 $30,315 41-1981152
SCG Fund
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402
Attn: Sean Goudy John J. Frautschi
Tel: (612) 303-3333 Life Trust Microcap
John J.Frautschi Fax: (612) 303-4264 10,930 $234,995 ###-##-####
Life Trust Microcap
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402
Attn: Sean Goudy First American
First American Small Cap Tel: (612) 303-3333 211,960 Small Cap Growth $4,557,140 39-1829200
Growth Opportunity Fund Fax: (612) 303-4264 Opportunities Fund
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402
Attn: Sean Goudy Lyndhurst
Tel: (612) 303-3333 2,870 Associates $61,705 25-1539579
Lyndhurst Associates Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402 Milwaukee Jewish
Attn: Sean Goudy Federation
Milwaukee Jewish Tel: (612) 303-3333 2,640 $56,760 39-0806312
Federation Fax: (612) 303-4264
Address/Telephone Name in which Aggregate Social Security
Number and Facsimile Number of Shares are to Purchase or Tax ID
Name Number Shares be Held Price Number
- ------------------------------------------------------------------------------------------------------------------------------------
US Bank Asset Management
800 Nicollet Mall Greater Milwaukee
Minneapolis, MN 55402 Foundation Micro
Attn: Sean Goudy Cap
Greater Milwaukee Tel: (612) 303-3333 2,320 $49,880 39-6036407
Foundation - Micro Cap Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402
Attn: Sean Goudy Henry Posner III
Tel: (612) 303-3333 750 Agency $16,125 ###-##-####
Henry Posner III Agency Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402
Attn: Sean Goudy Posner Partners
Tel: (612) 303-3333 3,210 Microcap. $69,015 25-1580624
Posner Partners Microcap Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402
Attn: Sean Goudy Paul M. Posner
Tel: (612) 303-3333 850 Agency $18,275 ###-##-####
Paul M. Posner Agency Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall St. Paul
Minneapolis, MN 55402 Electrical
Attn: Sean Goudy Construction
St. Paul Electrical Tel: (612) 303-3333 1,520 Pension SC $32,680 41-6846858
Constr. Pension SC Fax: (612) 303-4264
Address/Telephone Name in which Aggregate Social Security
Number and Facsimile Number of Shares are to Purchase or Tax ID
Name Number Shares be Held Price Number
- ------------------------------------------------------------------------------------------------------------------------------------
US Bank Asset Management
800 Nicollet Mall St. Paul
Minneapolis, MN 55402 Electrical
Attn: Sean Goudy Construction
St. Paul Electrical Tel: (612) 303-3333 1,730 Supply SC $37,195 41-6846858
Constr. Supp. SC Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402 E.S. Tallmadge
Attn: Sean Goudy Residuary Trust 2
ES Tallmadge Residuary Tel: (612) 303-3333 600 $12,900 39-6404914
Trust 2 Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402 W.M.
Attn: Sean Goudy Chester-Chester
WM Chester - Chester Tel: (612) 303-3333 370 Children SC $7,955 39-6093692
Children Small Cap Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402 Oregon Retail
Attn: Sean Goudy Employees Pension
Oregon Retail Employees Tel: (612) 303-3333 4,580 Trust $98,470 93-6041029
Pension Trust Fax: (612) 303-4264
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402
Attn: Sean Goudy
Richard D. Waterfield - Tel: (612) 303-3333 Richard D.
Small Cap Fax: (612) 303-4264 1,040 Waterfield SCG $22,360 39-6721043
US Bank Asset Management
800 Nicollet Mall
Minneapolis, MN 55402
City of Springfield Attn: Sean Goudy
Missouri Policemen and Tel: (612) 303-3333 Richard D.
Firemens Retirement Fund Fax: (612) 303-4264 1,620 Waterfield SCG 34,830 44-6000268
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: Cranshire Capital, L.P.
By: /s/ Mitchell P. Kopin
----------------------------------------
Print Name: Mitchell P. Kopin
Title: President - Downsview Capital
The General Partner
Address: 666 Dundee Road, Suite 1901
Northbrook, IL 60062
Telephone: 847-562-9030
Facsimile: 847-562-9031
Number of Shares: 150,000
----------------------
Name in which Shares Are to Be Held (please
print):
Cranshire Capital, L.P.
Aggregate Purchase Price: $ 3,225,000
------------------
Social Security or Tax ID Number: 36-4055954
-----------
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: Portside Growth &
Opportunity Fund
By: /s/ Jeff Smith
----------------------------------------
Print Name: Jeff Smith
Title: Authorized Signatory
Address: c/o Ramius Capital Group, LLC
666 Third Avenue, 26th Floor
New York, New York 10017
Telephone: 212-845-7955
Facsimile: 212-845-7999
Number of Shares: 200,000
----------------------
Name in which Shares Are to Be Held (please
print):
Portside Growth & Opportunity Fund
Aggregate Purchase Price: $ 4,300,000
------------------
Social Security or Tax ID Number: 98-0216878
-----------
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: UBS O'Connor LLC f/b/o
O'Connor PIPES Corporate
Strategies Ltd.
By: Jeffrey F. Putnam
-----------------------------------
Print Name: Jeffrey F. Putnam
Title: Executive Director
Address: 1 North Wacker Drive
Chicago, IL 60606
Attn: Tim Goldenman
Telephone: 312-525-5868
Facsimile: 312-525-6271
Number of Shares: 50,000
----------------------
Name in which Shares Are to Be Held (please
print):
UBS O'Connor LLC f/b/o
O'Connor PIPES
Corporate Strategies
Ltd.
Aggregate Purchase Price: $ 1,075,000
------------------
Social Security or Tax ID Number: __________
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: UBS O'Connor LLC f/b/o
O'Connor Global Convertible
Arbitrage Master Ltd.
By: /s/ Jeffrey F. Putman
----------------------------------------
Print Name: Jeffrey F. Putman
Title: Executive Director
Address: 1 North Wacker Drive
Chicago, IL 60606
Attn: Tim Goldenman
Telephone: 312-525-5868
Facsimile: 312-525-6271
Number of Shares: 50,000
----------------------
Name in which Shares Are to Be Held (please
print):
UBS O'Connor LLC f/b/o
O'Connor Global
Convertible Arbitrage
Master Ltd.
Aggregate Purchase Price: $ 1,075,000
------------------
Social Security or Tax ID Number: __________
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: Citadel Equity Fund Ltd.
By: Citadel Limited
Partnership, its
Portfolio Manager
By: GLB Partners, LP, its
General Partner
By: Citadel Investment
Group LLC, its General
Partner
By: /s/ Kenneth A. Simpler
----------------------------------------
Print Name: Kenneth A. Simpler
Title: Managing Director
Address: c/o Citadel Limited
Partnership
131 S. Dearborn St.
Chicago, IL 60603
Telephone: 312-395-2100
Facsimile: 312-977-0275
Number of Shares: 100,000
----------------------
Name in which Shares Are to Be Held (please
print):
Citadel Equity Fund Ltd.
Aggregate Purchase Price: $ 2,150,000
------------------
Social Security or Tax ID Number: 98-0339176
----------
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: SF Capital Partners Ltd.
By: /s/ Brian H. Davidson
----------------------------------------
Print Name: Brian H. Davidson
Title: Authorized Signatory
Address: c/o Staro Asset Management, LLC
3600 South Lake Drive
St. Francis, WI 53235
Telephone: 414-294-7000
Facsimile: 414-294-7700
Number of Shares: 305,000
----------------------
Name in which Shares Are to Be Held (please
print):
SF Capital Partners Ltd.
Aggregate Purchase Price: $ 6,557,500
------------------
Social Security or Tax ID Number: 98-0363554
----------
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: Deephaven Small Cap Growth
Fund, LLC
By: /s/ Bruce Lieberman
----------------------------------------
Print Name: Bruce Lieberman
Title: Director of Private Placements
Address: 130 Cheshire Lane, Suite 102
Minnetonka, MN 55305
Telephone: 952-249-5543
Facsimile: 952-249-5320
Number of Shares: 225,000
----------------------
Name in which Shares Are to Be Held (please
print):
Deephaven Small Cap Growth Fund, LLC
Aggregate Purchase Price: $ 4,837,500
------------------
Social Security or Tax ID Number: 41-1963797
----------
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: Gamma Opportunity Capital
Partners, LP
By: /s/ Christopher Rossman
Print Name: Christopher Rossman
Address: British Colonial Centre of
Commerce
One Bay Street, Suite 401
Nassau, The Bahamas
Telephone: 242-322-6656
Facsimile: 242-322-6657
Number of Shares: 15,000
----------------------
Name in which Shares Are to Be Held (please
print):
Gamma Opportunity Capital Partners, LP
Aggregate Purchase Price: $ 322,500
------------------
Social Security or Tax ID Number: N/A
-----------
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: Alpha Capital AG
By: /s/ Konrad Ackerman
Print Name: Konrad Ackerman
Address: Pradafaut 7
Fursrenrurns 9490
Vaduz Liechtenstein
Telephone: 011-423-232-3195
Facsimile: 011-423-232-3196
Number of Shares: 30,000
----------------------
Name in which Shares Are to Be Held (please
print):
Alpha Capital AG
Aggregate Purchase Price: $ 645,000
------------------
Social Security or Tax ID Number: __________
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: Elliott Associates, L.P.
By: Elliott Capital
Advisors, L.P., as
general partner
By: Braxton Associates,
Inc., as general partner
By: /s/ Elliot Greenberg
----------------------------------------
Print Name: Elliot Greenberg
Title: Vice President
Address: 712 5th Avenue
New York, NY 10019
Telephone: 212-974-6000
Facsimile: 212-974-2092
Number of Shares: 55,000
----------------------
Name in which Shares Are to Be Held (please
print):
Elliott Associates, L.P.
Aggregate Purchase Price: $ 1,182,500
------------------
Social Security or Tax ID Number: 22-2140975
-----------
OMNIBUS SIGNATURE PAGE TO
FARO TECHNOLOGIES, INC.
SECURITIES PURCHASE AGREEMENT
The undersigned hereby executes and delivers the Securities
Purchase Agreement to which this Signature Page is attached, which, together
with all counterparts of the Securities Purchase Agreement and Signature Pages
of the other Investors and the Company to the Securities Purchase Agreement,
shall constitute one and the same document in accordance with the terms of the
Securities Purchase Agreement.
Investor Name: Longview International
Equity Fund, LP
By: /s/ Wayne H. Coleson
----------------------------------------
Print Name: Wayne H. Coleson
Title: Investment Manager, CEO
Address: 25 Longview Court
Hillsborough, CA 94010
Attn: S. Michael Rudolph, CFO
Telephone: 650-340-1074
Facsimile: 650-343-2506
With a copy to: 415-283-3386
718-493-7499
Number of Shares: 155,000
----------------------
Name in which Shares Are to Be Held (please
print):
Longview International Equity Fund, LP
Aggregate Purchase Price: $ 3,332,500.00
------------------
Social Security or Tax ID Number: N/A
----------
This is an offshore fund domiciled in the
B.V.I.
Exhibit A
Registration Rights Agreement
See attached.
Exhibit B
Transfer Agent Instructions
November __, 2003
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Attn: Donna Ansbro
Re: Private Placement of 1,158,000 Shares of Common Stock Issued
by the Company and 770,000 Shares of Common Stock Sold by Selling Shareholders
Ladies and Gentlemen:
This letter refers to that certain Securities Purchase
Agreement, dated as of November 11, 2003 (the "Securities Purchase Agreement"),
by and among FARO Technologies, Inc., a Florida corporation (the "Company"),
Xenon Research, Inc., a Florida corporation, and Gregory A. Fraser, a Florida
resident (each of Xenon Research, Inc. and Gregory A. Fraser are referred to as
the "Selling Shareholder" and both of whom collectively are referred to as the
"Selling Shareholders"), and the parties set forth on the attached Exhibit I
(the "Investors") relating to, among other things, the issuance and sale by the
Company of 1,155,000 shares of the Company's common stock, par value $.001 per
share (the "Company Shares") to the Investors, and the transfer and sale by the
Selling Shareholders of 772,000 shares of the Company's common stock, par value
$.001 per share (the "Selling Shareholder Shares") to the Investors.
The Company hereby authorizes and instructs you (provided that
you are the transfer agent of the Company at such time) to issue (from
authorized but unissued shares), countersign and register certificates
representing 1,158,000 of the Company Shares and the Selling Shareholders hereby
authorize and instruct you (provided that you are the transfer agent of the
Company at such time) to transfer 772,000 of the Selling Shareholder Shares as
set forth on Exhibit II in such names and in such share amounts as specified on
the attached Exhibit I, and to cause such certificates to be delivered via
Federal Express to the addresses specified on the attached Exhibit I. The. The
closing of the purchase of the Company Shares and the Selling Shareholder Shares
(collectively referred to herein as the "Shares") will occur on November 12,
2003, and accordingly, the certificates should be dated as of such date. The
certificates representing the Shares shall bear the legend set forth below:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN SOLD
IN RELIANCE UPON AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS."
The Company further instructs you not to acknowledge or record
the transfer of any Shares in the shareholder records of the Company or to issue
certificates representing any Shares to any person or entity other than the
transferor thereof unless the requirements set forth below are satisfied with
respect to such Shares, in which case such Shares are to be transferred free
from any restrictive legend
(unless otherwise required by applicable state securities laws or the laws of
any applicable foreign jurisdiction) and registered in such name and in such
denominations as specified by the Investor in question:
You receive written notice from the Company that a registration
statement covering resales of the Shares has been declared effective by
the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Securities Act"), in the form attached hereto
as Exhibit III, and written confirmation from the Investor in
question that the resale of such Shares was made pursuant to such
effective registration statement; or
You receive written notice from the Company, accompanied
by an opinion of counsel, that the sale of such
Shares may be effected under Rule 144 of the
Securities Act.
You are further instructed to notify the Secretary of the
Company in writing of any request that you receive pertaining to the proposed
transfer of any of the Shares.
These instructions may not be rescinded or revoked other than
by means of a communication signed by the Company, the Selling Shareholders, and
the Investor in whose name the Shares in question are registered.
Please execute this letter in the space indicated to
acknowledge your agreement to act in accordance with these instructions. Should
you have any questions concerning this matter, please contact me at (407)
333-9911 or Steven Vazquez of Foley & Lardner, our outside legal counsel, at
(813) 225-4177.
Very truly yours,
THE COMPANY:
FARO TECHNOLOGIES, INC.
By:_____________________________________
Gregory Fraser, Executive Vice
President and Chief Financial
Officer
THE SELLING SHAREHOLDERS:
XENON RESEARCH, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
________________________________________
Gregory Fraser
2
THE FOREGOING INSTRUCTIONS ARE
ACKNOWLEDGED AND AGREED TO
this ___ day of _______, 2003
American Stock Transfer & Trust Company
By:_______________________________
Name:__________________________
Title: __________________________
3
Exhibit C
Matters to be Covered in Opinion of Counsel to the Company
1. The Company is a corporation duly organized, validly
existing and its status is active under the laws of the State of Florida and has
the requisite corporate power to own, lease and operate its properties and to
conduct its business as presently conducted.
2. The Company has the requisite corporate power and authority
to execute, deliver and perform its obligations under the Transaction Documents
including, without limitation, the issuance of the Common Stock. The Selling
Shareholders have the requisite corporate power and authority to execute,
deliver and perform their respective obligations under the Transaction Documents
including, without limitation, the sale of the Common Stock.
3. All necessary corporate action has been taken by the
Company to authorize the execution, delivery and performance by the Company of
each of the Transaction Documents. The execution and delivery by the Company and
the Selling Shareholders of each of the Transaction Documents and the
performance by it of its obligations do not violate (i) their governing
documents, if any, (ii) to our knowledge, any applicable law, rule or regulation
of the United States or the State of Florida, or (iii) any applicable rule or
regulation of the Principal Market.
4. The issuance and sale of the Securities have been duly
authorized. When issued in accordance with the terms of the Securities Purchase
Agreement, the Securities will be validly issued, fully paid and non-assessable
and free of all taxes, liens, charges and preemptive rights with respect to the
issue thereof.
5. Subject to the accuracy as to factual matters of the
Investors' representations in Section 2 of the Securities Purchase Agreement,
the offer and sale of the Securities in the manner contemplated by the
Securities Purchase Agreement are exempt from the registration requirements of
Section 5 of the Securities Act.
6. No consent or authorization of, filing with, notice to or
registration with, any federal or state governmental body, regulatory agency,
stock exchange or market, or the stockholders of the Company is required to be
obtained by the Company or the Selling Shareholders (i) to enter into and
perform their respective obligations under the Transaction Documents, (ii) for
the issuance and sale of the Common Stock as contemplated by the Transaction
Documents (except for the listing of the Common Stock on the Nasdaq National
Market, the filing of the Registration Statement with the SEC, and normal
post-closing filings in connection with qualifying for exemptions from the
registration requirements of applicable state securities laws), or (iii) for the
exercise of any rights and remedies under any Transaction Document.
7. Except as disclosed in the SEC Documents, to our knowledge,
no action, suit, proceeding, inquiry or investigation before or by any court,
public board or body or any governmental agency or self-regulatory organization
is pending or threatened against the Company, any of its subsidiaries or the
Selling Shareholders that could have a Material Adverse Effect or that into
questions the validity or enforceability of, or seeks to enjoin the performance
of, the Transaction Documents.
8. The execution, delivery and performance by the Company of
the Transaction Documents, the consummation by the Company of the transactions
contemplated thereby and the compliance by the Company with the terms thereof do
not violate, conflict with or constitute a default (or an event which, with the
giving of notice or lapse of time or both, constitutes or would constitute a
default) under, give rise to any right of termination, cancellation or
acceleration under, or result in the creation of any lien, charge or encumbrance
on or against any of the properties of the Company pursuant to (i) the Articles
of
Incorporation or By-laws of the Company; (ii) any other agreement, note,
lease, mortgage, deed or other instrument which is filed with the SEC to which
the Company is a party or by which the Company is bound or affected; or (iii) to
our knowledge, any statute, law, rule or regulation applicable to the Company or
any order, writ, injunction or decree.
9. Each of the Transaction Documents has been duly executed
and delivered by or on behalf of the Company and the Selling Shareholders, and
constitutes (assuming Florida law is identical to New York law) a valid and
binding obligation of the Company and the Selling Shareholders enforceable
against the Company and the Selling Shareholders in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency,
liquidation, reorganization, moratorium, fraudulent conveyance or transfer or
other similar laws relating to or affecting the rights of creditors generally
and except as the enforceability thereof is subject to the application of
general principles of equity (regardless of whether considered in a proceeding
in equity or at law), including, without limitation, (a) the possible
unavailability of specific performance, injunctive relief or any other equitable
remedy and (b) concepts of materiality, reasonableness, good faith and fair
dealing.
2