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EXHIBIT 4.4
February 28, 2001
To the purchasers of Series B Convertible Preferred Stock of Computer Motion,
Inc. pursuant to that certain Securities Purchase Agreement dated February 16,
2001.
Ladies and Gentlemen:
This letter is delivered in connection with the execution and delivery
by Computer Motion, Inc. (the "Company") of that certain Securities Purchase
Agreement dated as of February 16, 2001 (the "Purchase Agreement") among the
Company and the purchasers (the "Investors") of shares of Series B Convertible
Preferred Stock (the "Series B Shares") pursuant to the Purchase Agreement. All
capitalized terms used herein and defined in the Purchase Agreement shall have
the same meanings as ascribed to them in the Purchase Agreement.
If you, as an investor in Series B Shares, hereby agree to waive your
right to the payment of any dividends (the "Dividend Right") that have accrued
or would otherwise accrue on the Series B Shares as provided for in Section 2 of
the Certificate of Designations, then in the event of a firm commitment,
registered, follow-on offering of the Company's Common Stock registered under
the Securities Act of 1933, as amended, prior to February 16, 2004 (a
"Registered Offering"), the Company shall grant you the right to purchase (the
"Purchase Right"), for a purchase price per share equal to the Initial
Conversion Price of the Series B Shares, such number of shares of Common Stock
of the Company obtained by dividing (A) an amount equal to ten percent (10%) of
the aggregate stated value of your Series B Shares by (B) the Initial Conversion
Price. In the event of a Change of Control (as defined below) that occurs before
the Company completes a Registered Offering, the Company shall at its option
either (i) grant you the right to purchase, concurrent with and conditioned upon
the effective date of the proposed transaction, for a purchase price per share
equal to the Initial Conversion Price of the Series B Shares, such number of
shares of Common Stock of the Company obtained by dividing (A) an amount equal
to ten percent (10%) of the aggregate stated value of your Series B Shares by
(B) the Initial Conversion Price (a "Change in Control Participation Right"), or
(ii) pay to you a cash amount equal to the difference between (A) the committed
offer price in the merger or acquisition and (B) the Initial Conversion Price of
the Series B Shares multiplied by (C) an amount equal to ten percent (10%) of
the aggregate stated value of your Series B Shares divided by (B) the Initial
Conversion Price (a "Cash Payment"). The Initial Conversion Price shall at all
times be subject to adjustment as provided in Section 4(e) of the Company's
Certificate of Designations.
The Company shall use its commercially reasonable efforts to register
the shares of its Common Stock for issuance to you upon exercise of your
Purchase Right or Change in Control Participation Right by preparing and filing
with the Securities and Exchange Commission (the "SEC") a registration statement
on Form S-3 (or such other form promulgated by the SEC for which the Company
qualifies and that counsel for the Company shall deem appropriate). The number
of shares of Common Stock covered by the initial registration statement shall be
equal to 870,711 shares of Common Stock of the Company. In the event that an
adjustment to the Initial Conversion
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February 28, 2001
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Price requires that shares greater than this initial registration amount be
issued to you, the Company shall as expeditiously as possible (and in no event
more than thirty (30) days from the date of the event that results in such
change) file a post-effective amendment to the initial registration statement
(or, if necessary file or cause to be filed a new or additional registration
statement) to reflect the registration of the offer and resale of such
additional shares.
The Company shall promptly mail written notice (with a copy to be sent
by facsimile) to you of either the occurrence of, or the announcement of, the
Company's intent to file a registration statement (a "Registration Statement")
in connection with a Registered Offering or engage in a Change in Control
transaction (a "Company Notice"). Such Company Notice shall not be given less
than ten (10) days prior to the filing of a Registration Statement or twenty
(20) days prior to the effective date of such Change in Control transaction. If
a Company Notice is delivered in connection with a Change in Control
transaction, such Company Notice shall state whether the Company elects to
provide you with a Change in Control Participation Right or a Purchase Right. If
you elect to exercise either a Purchase Right or a Change in Control
Participation Right, then within ten (10) days of receipt of the corresponding
Company Notice, you must give written notice to the Company confirming your
investment intent. Payment of the purchase price, as determined pursuant to the
formula above, must be received (i) on or before the effective date of the
Registered Offering in connection with your exercise of a Purchase Right or (ii)
immediately prior to the effective date of a Change of Control transaction in
connection with your exercise of a Change in Control Participation Right.
As used herein, "Change of Control" means (i) the acquisition, directly
or indirectly, by any person or group (within the meaning of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) of the beneficial ownership of
securities of the Company possessing more than fifty percent (50%) of the total
combined voting power of all outstanding securities of the Company; (ii) a
merger or consolidation in which the Company is not the surviving entity, except
for a transaction in which the holders of the outstanding voting securities of
the Company immediately prior to such merger or consolidation hold, in the
aggregate, securities possessing more than fifty percent (50%) of the total
combined voting power of all outstanding voting securities of the surviving
entity immediately after such merger or consolidation; (iii) a reverse merger in
which the Company is the surviving entity but in which securities possessing
more than fifty percent (50%) of the total combined voting power of all
outstanding voting securities of the Company are transferred to or acquired by a
person or persons different from the persons holding those securities
immediately prior to such merger; or (iv) the sale, transfer or other
disposition (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company.
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Please acknowledge your waiver of the Dividend Right and acceptance of
the terms of this letter by signing on the space provided below. Should you have
any questions or comments, please contact me directly at (000) 000-0000 (Ext.
115). Thank you again for your participation in the private placement of the
Series B Shares and the future success of Computer Motion.
Sincerely,
Xxxxxx Xxxxxx,
Chief Financial Officer
AGREED AND ACCEPTED:
CATALPA ENTERPRISES LTD.
By:
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Name:
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Title:
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Xxxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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Xxxxxx Xxxxxxxx
