Exhibit 4.2


 


REGISTRATION RIGHTS
AGREEMENT


 


THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of March 11, 2008 is entered into
between PPT Vision, Inc., a Minnesota corporation (the “Company”) and the
P. R. Peterson Co. Keogh Plan (“Investor”).


 


WHEREAS, pursuant to a Warrant issued by the Company
to the Investor today (the “Warrant”) the Investor is entitled to acquire from
the Company fully paid and nonassessable shares of the Company’s common stock,
$.10 par value (“Common Stock”); and


 


WHEREAS, the Company and the Investor believe it is
in each of their best interest to provide for registration and other rights
with respect to the shares of Common Stock to be issued under the Warrant.


 


NOW
THEREFORE, the
parties agree as follows:


 


1.                                                                                       CERTAIN DEFINITIONS.  As
used in this Agreement, the following terms have the following respective
meanings:


 


“Business Day” means any day other than a Saturday, Sunday
or other day on which commercial banks in the Sate of Minnesota are authorized
or required by law or executive order to close.


 


“Exchange Act” means the Exchange Act of 1934, as amended,
and the rules and regulations adopted under that Act.


 


“Form S-3”
means such form of Registration Statement as in effect on the date hereof or
any Registration Statement subsequently adopted by the SEC that permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.


 


“Holders”
means the Investor and any other person to whom the Warrant or the Registrable
Securities and the registration rights granted hereunder have been duly
assigned or transferred by the Investor in accordance with this Agreement and
the provisions of the Warrant, respectively.


 


“Register,”
“registration” and “registered”
refer to a registration effected under the Securities Act by preparing and
filing a Registration Statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of the Registration Statement by the
Commission.


 


“Registrable
Securities” means:


 


(i)                                                           shares of Common Stock issued or issuable to
Holders upon proper exercise of the Warrant;


 


(ii)                                                        all shares of Common Stock to be issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security that is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of the shares referenced in clauses (i).


 


Registrable Securities will cease to be Registrable
Securities when


 


(i)                                   a Registration Statement covering the
Registrable Securities has been declared effective under the Securities Act by
the Commission and the Registrable Securities have been disposed of pursuant to
the Registration Statement,


 


(ii)                                all of the Registrable Securities owned by a
Holder may be sold in a period of three months, in the opinion of counsel
satisfactory to the Company, without any limitation as to volume pursuant to Rule 144,


 


(iii)                             the Registrable Securities are proposed to be
sold or distributed by a person not entitled to the registration rights granted
by this Agreement,


 

















 


(iv)                            they have been transferred to a person in a
private transaction to whom the rights under this Agreement have not been
assigned,


 


(v)                               they have been transferred in violation of
the terms of the Warrant or


 


(vi)                            they have previously been registered or have
been sold to the public either pursuant to a Registration Statement or Rule 144.


 


Wherever reference is made in this Agreement to a
request or consent of Holders of a certain percentage of Registrable Shares,
the determination of that percentage will include shares of Common Stock
issuable upon exercise of the Warrant, even if the conversion or exercise has
not yet been effected.


 


“Registration
Expenses” means all expenses incurred by the Company in complying
with this Agreement, including, without limitation, all registration and filing
fees, exchange listing fees, printing expenses, fees and disbursements of
counsel for the Company, state blue sky fees and expenses, and the expense of
any special audits incident to or required by any registration, but
specifically exclude any Selling Holder Expense.


 


“Registration Statement” means a registration statement filed
pursuant to the Securities Act.


 


“Rule 144”
means Rule 144 promulgated under the Securities Act, or any successor
provision then in effect.


 


“SEC”
or “Commission” means the U.S. Securities
and Exchange Commission.


 


“Securities Act” means the Securities Act of 1933, as
amended.


 


“Selling
Holder Expenses” means all discounts, commissions or other amounts
payable to underwriters in connection with a registration that are to be paid
by the Holders of Registrable Securities included in a Registration Statement
and all fees and expenses for counsel or other advisors for the Holders of
Registrable Securities included in a Registration Statement.


 


2.                                                                                       REGISTRATION
RIGHTS.


 


a.                                                               Demand
Registration.


 


i.                       Demand
Rights.  The Holders holding a
majority of the Registrable Securities held by all of the Holders may at any
time make a written request (the “Demand Notice”) that the Company register,
and the Company must register (other than pursuant to a Registration Statement
on Form S-4 or S-8 or any successor thereto) (a “Demand Registration”),
the number of Registrable Securities stated in such request if the Registrable
Securities have an anticipated aggregate public offering price (net of
underwriting discounts and commissions) of One Hundred Thousand Dollars
($100,000) (a “Demand Registration Statement”). 
The Company must use its reasonable best efforts to cause any Demand
Registration Statement to be filed with the Commission not later than 60 days
after it receives a request under this Section.


 


ii.                    Other Shareholders.  Any
other person entitled to participate in a Demand Registration Statement (“Other
Shareholders”) and the Company will be permitted to register equity securities
of the Company in any Demand Registration Statement or to participate in the
offering, but only as provided in this subparagraph, by requesting that
securities of the same class as the Registrable Securities be included in the
Demand Registration Statement for sale in the offering on the following terms
and conditions:


 


2

















 


a)              Each Other
Shareholder must give written notice of election to the Holders within 15 days
of the date the Demand Notice was given to the Company, such notice to specify
the number of shares proposed to be sold by each Other Shareholder in the
offering;


 


b)             the Company must give written notice of
election to the Holders within 15 days of the date the Demand Notice was given
to the Company, such notice to specify the number of shares proposed to be sold
by the Company in the offering (the Other Shareholder and Company shares are “Other
Shares”);


 


c)              Each Other Shareholder and the Company must
agree to sell such Other Shares on the same basis provided in the underwriting
arrangements approved by the Holders and to timely complete and execute all
questionnaires, powers of attorney, indemnities, hold-back agreements,
underwriting agreements and other documents required under the terms of such
underwriting arrangements or by the Commission or by any state securities
regulatory body;


 


d)             Notwithstanding any other provision of this
Agreement, if the managing underwriter(s) determine(s) in good faith
that marketing factors require a limitation of the number of shares to be
underwritten, then the managing underwriter(s) may exclude Other Shares
from the registration and the underwriting, and the number of Other Shares that
may be included in the registration and the underwriting will be allocated pro
rata among each Other Shareholder and the Company based upon the respective
number of Other Shares sought to be included in the offering; and


 


e)              If any Other Shareholder or the Company
desire to withdraw their Other Shares from the Demand Registration Statement,
they may only do so during the time period and on the terms to be determined by
the Holders, the Company and the underwriters.


 


iii.                 Limits.  Notwithstanding anything
contained in this Section 2.1 to the contrary, the Company will not be
obligated to effect more than one Demand Registration for the Holders during
the term of this Agreement.  In addition,
notwithstanding anything contained in this Section 2.1 to the contrary,
the Company may delay the Demand Registration of the Registrable Securities if
upon receipt of such Demand Notice if


 


a)              the Company notifies the Holders that it is
contemplating filing a Registration Statement within 90 days of the demand
(which notice will not affect the Holders’ other rights hereunder, including
without limitation the Holders’ rights under Section 2.2 below) or


 


b)             the Company notifies Holders that in the good
faith judgment of the Company a material event has occurred that has not been
publicly disclosed and if disclosed would have a material adverse effect on the
Company.


 


In the case of clause (i) of this paragraph, the Company will use
its best efforts, as soon as practical, upon the first to occur of the
abandonment of such contemplated Registration Statement or the expiration of
the 90-day period, to file the Demand Registration Statement for 


 


3

















 


the Registrable
Securities to which a Demand Notice relates, unless such Demand Notice is
withdrawn.  In the case of clause (ii) of
this paragraph, the Company may not delay the filing of the Demand Registration
Statement for more than 90 days from the time of the demand unless such Demand
Notice is withdrawn. The Company may not exercise the rights of postponement set
forth above more than once in any twelve month period.  If there is a postponement under either
clause (i) or (ii) above, the Demand Notice may be withdrawn by
notice to the Company by the Holders of a majority of the Registrable
Securities.  In this case, no demand will
have been made for the purposes of this Section 2.1.


 


iv.                Expenses.  The Company will pay all
Registration Expenses incurred in connection with a Demand Registration.


 


v.                   Other Demand Rights.  Each
of the Holders may offer such Holder’s Registrable Securities under any Demand
Registration pursuant to this Section 2.1(e).  Within five days after the receipt of a
request for a Demand Registration, the Company will (i) give written
notice thereof to all of the Holders (other than Holders that have requested a
Demand Registration under Section 2.1(a)) and (ii) include in such
registration all of the Registrable Securities held by such Holders from whom
the Company has received a written request within ten  days of the receipt by such Holders of the
Company’s notice referred to in clause (i) above.  In the request referred to in clause (ii) above,
the Holders must specify the number of Registrable Securities proposed to be
registered.  The failure of any Holder to
respond within such 10-day period referred to in clause (ii) above will be
deemed to be a automatic waiver of such Demand Registration.  Any Holder may waive its rights under Section 2.1
with respect to such Demand Registration. 
Any Holder may waive its rights under this Section 2.1(e) prior
to the expiration of the 10-day period by giving written notice to the Company,
with a copy to the other Holders.  If a
Holder sends the Company a written request for inclusion of part of all of the
Holder’s Registrable Securities in a registration, the Holder will not be
entitled to withdraw or revoke the request without the prior written consent of
the Company in its sole discretion.


 


b.                                                              Piggyback Registrations.


 


i.                       Company Registration.  The
Company will promptly notify Holders in writing at least twenty days prior to
filing any Registration Statement for purposes of effecting a public offering
of securities of the Company (excluding any Registration Statements on Form S-8
or on Form S-4 or any Registration Statement in connection with a public
offering of any security that is not of the same class as the Registrable
Securities) (a “Piggyback Registration”), and the Company will afford each
Holder an opportunity to register on such Registration Statement (a “Piggyback
Registration Statement”) all or any part of the Registrable Securities of the
Holder.  Each Holder desiring to include
in the Piggyback Registration Statement all or any part of the Registrable
Securities held by such Holder must, within ten days after receipt of the
notice from the Company, notify the Company in writing and inform the Company
of the number of Registrable Securities the Holder wishes to include in the
Piggyback Registration Statement.  If a
Holder decides not to include all of its Registrable Securities in the
Piggyback Registration Statement, the Holder will nevertheless continue to have
the right to include any Registrable Securities in any subsequent Piggyback
Registration, all upon the terms and conditions of this Agreement.  The Company will not be required to include
any Registrable Securities in more than two Piggyback Registration during the
term of this Agreement.


 


4

















 


ii.                    Underwriting.  If a
Piggyback Registration is an underwritten offering, then the Company will so
advise the Holders of Registrable Securities. 
In this event, the right of any Holder’s Registrable Securities to be
included in a Piggyback Registration will be conditioned upon the Holder’s
participation in the offering in the same terms and conditions as the
Securities for the account of the Company or other shareholders, as the case
may be, and the inclusion of the Holder’s Registrable Securities in the
underwriting to the extent provided herein. 
All Holders proposing to distribute their Registrable Securities through
such underwriting will enter into an underwriting agreement in customary form
with the managing underwriter or underwriters selected for the
underwriting.  Notwithstanding any other
provision of this Agreement, if the managing underwriter(s) determine(s) in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, then the managing underwriter(s) may exclude shares
(including Registrable Securities) from the Piggyback Registration and the
underwriting, and the number of shares that may be included in the Piggy
Registration and the Piggyback Registration will be allocated, first, to
the Company, and second, to each of the Holders requesting inclusion of
their Registrable Securities in such Registration Statement on a pro rata basis
based on the total number of Registrable Securities then held by each such
Holder and third, any other securities requested to be included in such
offering by any other shareholders of the Company.  If any Holder disapproves of the terms of any
underwriting, the Holder may elect to withdraw form it by written notice to the
Company and the underwriter, delivered at least ten Business Days prior to the
effective date of the Registration Statement. 
Any Registrable Securities excluded or withdrawn from such underwriting
will be excluded and withdrawn from the Piggyback Registration.  For any Holder that is a partnership or
corporation, the partners, retired partners and shareholders of such Holder, or
the estates and family members of any such partners and retired partners and
any trusts for the benefit of any of the foregoing persons will be deemed to be
a single “Holder,” and any pro rata reduction with respect to such “Holder”
will be based upon the aggregate amount of shares carrying registration rights
owned by all entities and individuals included in such “Holder,” as defined in
this sentence.


 


iii.                 Expenses.  The Company will pay all
Registration Expenses incurred in connection with a Piggyback Registration.


 


c.                                                               Form S-3
Registrations.  In case the Company
receives from the Holders of a majority of the Registrable Securities a written
request that the Company effect a registration on Form S-3 with respect to
all or a part of the Registrable Securities owned by such Holders, the Company
must:


 


i.                       promptly
give written notice of the proposed registration to all other eligible Holders
of Registrable Securities; and


 


ii.                    as
soon as practicable, file the Registration Statement and use commercially
reasonable efforts to have the Registration Statement declared effective as
would permit or facilitate the sale and distribution of all or such portion of
such Holders’ Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other eligible
Holders joining in such request as are specified in a written request given
within fifteen days after receipt of such written notice from the Company.  The Company will not be obligated to effect
any such registration, pursuant to this Section 2.3:


 


5

















 


a)              if Form S-3 is
not available for such offering by the Holders;


 


b)             if the Company
furnishes to the Holders a certificate signed by the Chief Executive Officer or
Chief Financial Officer of the Company stating that, in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its shareholders for such Form S-3 registration to be
effected at such time, in which event the Company will have the right to defer
the filing of the Form S-3 Registration Statement for a period of not more
than sixty days after receipt of the request of the Holders under this Section 2.3
provided.  The Company may not utilize
this right more than once in any twelve month period, and may register any
other of its shares during such sixty day period;


 


c)              if the Company has,
within the nine month period preceding the date of the request, already
effected one registration on Form S-3 for the Holders pursuant to this Section 2.3;


 


d)             if the Company has
already effected two registrations on Form S-3 for the Holders pursuant to
this Section 2.3;


 


e)              if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters’ discounts or commissions) of less than $100,000;


 


f)                if the Holders
would not be entitled to request a Demand Registration under Section 2.1.


 


iii.                 Subject
to the foregoing, the Company must file a Registration Statement covering the
Registrable Securities as soon as practicable after receipt of the request of
the Holders.


 


iv.                Each
registration demanded pursuant to this Section 2.3 will be deemed to be a
Demand Registration for the purposes of Section 2.1(c).


 


v.                   Expenses.  The Company will pay all Registration
Expenses incurred in connection with a registration pursuant to this Section 2.3.


 


d.                                                              Obligations
of the Company.  Whenever required to effect the registration of any
Registrable Securities under this Agreement, the Company will, as expeditiously
as reasonably possible:


 


i.                       Prepare
and file with the SEC a Registration Statement, on such form as is then available
to the Company in connection with such registration, with respect to the
Registrable Securities and use commercially reasonable, diligent efforts to
cause the Registration Statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep the Registration Statement effective for up to ninety days, or if earlier,
then until the Holders have completed the distribution related thereto. This
ninety day period will be extended for a period of time equal to the period the
Holders refrain from 


 


6

















 


selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company and in the case of any
registration of Registrable Securities on Form S-3 that are intended to be
offered on a continuous or delayed basis, the ninety day period will be
extended, if necessary, to keep the Registration Statement effective until all
such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Securities Act, permits an offering on a
continuous or delayed basis, and provided further that applicable rules under
the Securities Act governing the obligation to file a post-effective amendment
permit, in lieu of filing a post-effective amendment that (A) includes any
prospectus required by Section 10(a)(3) of the Securities Act or (B) reflects
facts or events representing a material or fundamental change in the
information set forth in the Registration Statement, the incorporation by
reference of information required to be included in (A) or (B) above
to be contained in periodic reports filed pursuant to section 13 or 15(d) of
the Exchange Act in the Registration Statement.


 


ii.                    Prepare and file with the SEC such amendments
and supplements to the Registration Statement and the prospectus used in
connection with the Registration Statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement.


 


iii.                 Furnish to the Holders such number of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and other documents as they may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by them that are included in the registration.


 


iv.                Use reasonable, diligent efforts to register
and qualify the securities covered by such Registration Statement under such
other securities or blue sky laws of such jurisdictions as will be reasonably
requested by the Holders,.  provided that
the Company will not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.


 


v.                   In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter(s) of
such offering.  Each Holder participating
in the underwriting must also enter into and perform its obligations under such
an agreement.


 


vi.                Notify each Holder of Registrable Securities
covered by the Registration Statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the occurrence
of any event as a result of which the required to be included in such
Registration Statement, as then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading in the light
of the circumstances then existing and the Company must promptly prepare a
supplement or amendment to such prospectus and furnish to each seller of
Registrable Securities a reasonable number of copies of such supplement to or
an amendment of such prospectus as may be necessary so that, after delivery to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.


 


7

















 


e.                                                               Furnish Information.  It will be a condition precedent to
the obligations of the Company to take any action pursuant to Sections 2.1, 2.2
and 2.3 hereof that the selling Holders will furnish to the Company information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of the securities as will be required to timely effect
the registration of their Registrable Securities.


 


f.                                                                 Delay of Registration.  No Holder will have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Agreement.


 


g.                                                              Notice to Discontinue.  Each
Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2.4(f) the
Holder will forthwith discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until the Holder’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 2.4(f) and, if so directed by the
Company, the Holder will deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies then in the Holder’s possession,
possession, of the prospectus covering such Registrable Securities that is
current at the time of receipt of the notice.


 


h.                                                              Indemnification.  In the event any Registrable Securities
are included in a Registration Statement under Sections 2.1, 2.2 or 2.3 hereof:


 


i.                       By the Company.  To
the extent permitted by law, the Company will indemnify and hold harmless each
Holder, the partners, officers and directors of each Holder, any underwriter
(as defined in the Securities Act) for such Holder and each person, if any, who
controls (within the meaning of the Securities Act) the Holder against any
losses, claims, damages, or liabilities (joint or several) under the Securities
Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations (each a
“Violation”):


 


a)              any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto;


 


b)             the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading under the circumstances such statement were
made; or


 


c)              any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any federal or state
securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any federal or state securities law in connection with
the offering covered by such Registration Statement;


 


and the Company will reimburse each such Holder, partner, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability or action; provided however,
that the indemnity agreement contained in this Section 2.8(a) will
not 


 


8

















 


apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if the
settlement is effected without the consent of the Company, nor will the Company
be liable in any such case for any loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by such Holder, partner, officer,
director or controlling person of such Holder.


 


ii.                    By Selling Holders.  To
the extent permitted by law, each selling Holder whose Registrable Securities
are included in a Registration Statement will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement, each person, if any, who controls the Company within the
meaning of the Securities Act, and each underwriter, if any, and each person,
if any, who controls any underwriter within the meaning of the Securities Act
or the Exchange Act, and any other Holder selling securities under such
Registration Statement or any of such other Holder’s partners, directors or
officers or any person who controls such Holder within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities (joint or several) under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such
registration; and each such Holder will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or other Holder, or partner, officer, director or
controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 2.8(b) will
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder, which consent will not be unreasonably withheld; and provided further,
that the total amounts payable in indemnity by a Holder under this Section 2.8(b) in
respect of any violation will not exceed the proceeds received by such Holder
in the Registration Statement out of which such Violation arises unless the
Violation is a result of fraud on the part of such Holder.


 


iii.                 Notice.  Promptly after receipt by an
indemnified party under this Section 2.8 of notice of the commencement of
any action (including any governmental action), the indemnified party will, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 2.8, deliver to the indemnifying party a written notice of
the commencement thereof, and the indemnifying party will have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties. An indemnified party
will have the right, however, to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party (or, if there is more than one
indemnified party, the indemnifying party will pay the fees and expenses of one
counsel for any and all indemnified parties, to be mutually agreed upon by such
indemnified parties), if representation of the indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other
party represented by such counsel in the proceeding.  The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability 


 


9

















 


to defend such action, will relieve such indemnifying party of any
liability to the indemnified party under this Section 2.8, but the
omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 2.8.


 


iv.                Defect Eliminated in Final Prospectus.  The
foregoing indemnity agreements are subject to the condition that, insofar as
they relate to any Violation made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the SEC at the time the
Registration Statement in question becomes effective or the amended prospectus
is filed with the SEC pursuant to SEC Rule 424(b), such indemnity agreement
will not inure to the benefit of any person if a copy of such final prospectus
was furnished to the indemnified party and was not furnished to the person
asserting the loss, liability, claim, or damage at or prior to the time such
action is required by the Securities Act.


 


v.                   Contribution.  In
order to provide for just and equitable contribution to joint liability under
the Securities Act in any case in which either (i) any Holder exercising
rights under this Agreement, or any controlling person of any such Holder,
makes a claim for indemnification pursuant to this Section 2.7 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 2.8 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling Holder or any such controlling
person in circumstances for which indemnification is provided under this Section 2.8;
then, and in each such case, the Company and such Holder will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that such Holder is
responsible for the portion represented by the percentage that the public
offering price of its Registrable Securities offered by and sold under the
Registration Statement bears to the public offering price of all securities
offered by and sold under such Registration Statement, and the Company and
other selling Holders are responsible for the remaining portion; provided,
however, that, in any such case, (A) no such Holder will be required to
contribute any amount in excess of the public offering price of all such
Registrable Securities offered and sold by such Holder pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 1.1(f) of the
Securities Act) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.


 


vi.                Survival.  The obligations of the Company
and Holders under this Section 2.8 will survive the completion of any
offering of Registrable Securities in a Registration Statement, and otherwise.


 


i.                                                                  Rule 144 Reporting.  With a view to making available the
benefits of certain rules and regulations of the Commission that may at
any time permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use reasonable efforts to:


 


i.                       to make and keep public information
available, as those terms are understood and defined in Rule 144 at all times;


 


10

















 


ii.                    to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Exchange Act; and


 


iii.                 so long as a Holder owns any Registrable
Securities, to furnish to the Holders forthwith upon request a written
statement by the Company as to its compliance with the reporting requirements
of Rule 144 and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents of the Company as a Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing a Holder to
sell any such securities without registration.


 


j.                                                                  Termination of the Company’s Obligations.  The
obligations of the Company to register Registrable Securities under Sections
2.1, 2.2 and 2.3 will terminate on the earlier to occur of


 


i.                       the sale, lease or other disposition of all
or substantially all of the assets of the Company;


 


ii.                    an acquisition of the Company by another
entity by consolidation, merger or other reorganization in which the holders of
the Company’s outstanding voting shares immediately prior to such transaction
own, immediately after such transaction, securities representing less than
fifty percent (50%) of the voting power of the entity surviving such
transaction; or


 


iii.                 with respect to each Holder, whenever such
Holder holds no Registrable Securities or may sell all such Holder’s
Registrable Securities without registration pursuant to an exemption under Rule 144
or other exemption then applicable.


 


3.                                       ASSIGNMENT AND AMENDMENT.


 


a.                                                               Assignment.  No person may be assigned the registration rights of a Holder
under this Agreement (a) unless the Company is given written notice by the
assigning Holder at the time of such assignment stating the name and address of
the assignee and identifying the securities of the Company as to which the
rights in question are being assigned; and (b) only to persons that are
permitted transferees of the Warrant, or the Registrable Securities and
provided further that prior to such assignment, any such assignee must execute
a agreement to be bound by this Agreement in a form reasonably satisfactory to
the Company and the assigning Holder.


 


b.                                                              Amendment of Rights.  Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of (i) the Company, and (ii) Holders then holding at
least a majority of all of the Registrable Securities.  Any amendment or waiver effected in
accordance with this Section 3.2 will be binding upon (i) each
Holder, (ii) each permitted successor or assignee of such Holder and (iii) the
Company.


 


4.                                       GENERAL PROVISIONS.


 


a.                                                               Third Parties.  Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the parties hereto
and their successors and assigns, any rights or remedies under or by reason of
this Agreement.


 


11

















 


b.                                                              Adjustments for Stock Splits.  Wherever in this Agreement there is a
reference to a specific number of shares of Common Stock of the Company or any
class or series, then, upon the occurrence of any subdivision, combination or
share dividend of such class or series of shares, the specific number of shares
so referenced in this Agreement will automatically be proportionally adjusted
to reflect the affect on the outstanding shares of such class or series of
shares by such subdivision, combination or share dividend.


 


c.                                                               Severability. 
Whenever possible, each provision of this Agreement must be interpreted
in a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, the
invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction as if the invalid, illegal or unenforceable
provision had never been contained herein.


 


d.                                                              Entire Agreement. 
Except as otherwise expressly set forth herein or in agreements executed
contemporaneously herewith, this document embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, that may have related
to the subject matter hereof in any way.


 


e.                                                               Successors and Assigns. 
Except as otherwise provided herein, this Agreement will shall bind and
inure to the benefit of and be enforceable by the Company and its successors
and assigns and the Holders and their respective successors and assigns.


 


f.                                                                 Counterparts.  This
Agreement may be executed in separate counterparts each of which will be an
original and all of which taken together will constitute one and the same agreement.


 


g.                                                              Remedies.  The Company and each Holder
will be entitled to enforce its rights under this Agreement specifically to
recover damages by reason of any breach of any provision of this Agreement and
to exercise all other rights existing in its favor.  The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that the Company and each Holder may in its sole discretion
apply to any court of law or equity of competent jurisdiction for specific
performance and injunctive relief (without posting a bond or other security) in
order to enforce or prevent any violation of the provisions of this Agreement.


 


12

















 


h.                                                              Notices.  All notices, requests,
consents and other communications hereunder to any party will be deemed to be
sufficient if contained in a written instrument delivered in person, including
delivery by recognized express courier, fees prepaid, or sent by facsimile transmission,
or duly sent by first class registered or certified mail, return receipt
requested, postage prepaid, in each case addressed:  if to the Company, at


 


PPT Vision, Inc.


12988 Valley View Road


Eden Prairie, MN   55344


Attention:


Mr. Joseph
C. Christenson


Chief
Executive Officer


 


or
at such other address or addresses as may have been furnished in writing by the
Company to the Holders, with a copy to


 


Lindquist & Vennum, P.L.L.P.


4200
IDS Center


80
South Eighth Street


Minneapolis,
MN 55402


Facsimile:
(612) 371-3207,


Attention:
Thomas G. Lovett, IV


 


if to a Holder, at the address and facsimile number set forth therefore
for the Holder on Annex I attached hereto, or such other address as may
hereafter be designated in writing by the addressee to the addressor pursuant
to this Section 4.08.  All such
notices, requests, consents and other communications will be deemed to have
been received in the case of personal delivery, including delivery by express
courier, on the date of such delivery; in the case of facsimile transmission,
on the date of transmission; and in the case of mailing, on the third day after
deposit in the U.S. mail, proper postage prepaid.


 


i.                                                                  Governing Law.  This
Agreement will be governed by and construed in accordance with the internal laws
of the State of Minnesota, without giving effect to any choice of law or other
conflict of law provision or rule (whether of the State of Minnesota or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Minnesota.


 


j.                                                                  Descriptive Headings.  The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.


 


13

















 


IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.


 


	
   

  	
  COMPANY:

  
	
   

  	
  PPT Vision, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Joseph C. Christenson

  
	
   

  	
  Its:

  	
   Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  INVESTOR:

  
	
   

  	
  P.R. Peterson Co. Keogh Plan

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Peter R. Peterson

  
	
   

  	
  Its:

  	
    Trustee

  



 


14

















 


ANNEX I


 


HOLDER(S)


 


Name & Address


 


P.R. Peterson Co. Keogh Plan


6111 Blue Circle,


Minnetonka, Minnesota


55343-9102


 


15