Document:

Exhibit
10.1

SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT
is made effective this 30th day of August, 2007, by and between PPT Vision,
Inc., a Minnesota corporation (the “Company”) and P.R. Peterson, a resident of
the state of Minnesota, who is investing through the P.R. Peterson Keogh Plan
(collectively “Subscriber”).

The
Company and Subscriber hereby agree as follows:

1.                                 Purchase and Delivery. 
Subject to the terms and conditions of this Agreement, the Company sells
to Subscriber and Subscriber purchases from the Company as of the Closing Date:

a.             2,500,000 shares of common stock, $.10 par
value of the Company (“Stock”) at a purchase price of $0.20 per share for an
aggregate purchase price of $1,000,000; and

b.             Seven-year Warrants to purchase 1,000,000
shares of Stock at a price of $0.25 per share.

2.             Closing.

a.             Closing Date.  The
closing of the transactions contemplated by this Agreement (the “Closing”) will
take place at the offices of the Company on August 30, 2007 or such other
different time or day as may be mutually acceptable to Subscriber and the
Company (the “Closing Date”).

b.             Delivery by Company.  At
the Closing, the Company will deliver to Subscriber:

i.              A letter indicating it will issue the share
certificate as soon as possible after approval by the shareholders of the
Company of an amendment to the Company’s Articles of Incorporation to increase
the number of authorized shares of common stock from 10,000,000 to 20,000,000,
and

ii.             Warrants to purchase 1,000,000 shares of
Stock at a price of $0.25 per share.

c.             Delivery by Subscriber.  At
the Closing, the Subscriber will deliver the aggregate purchase price for the
Stock stated in Section 1 by personal check.

3.             Certain Representations of Subscriber.  In
order to induce the Company to sell the Stock and Warrants to Subscriber,
Subscriber hereby represents and warrants to the Company follows:

a.             Securities Representations.

i.              Information About the Company. 
Subscriber has been furnished with the Company’s Annual Report on Form
10-KSB for the year ended October 31, 2006 as filed with the Securities and
Exchange Commission (the “Commission”) together with all subsequently Quarterly
Reports on Form 10-QSB, Current Reports on Form 8-K, and other publicly
available filings made with the Commission (the “Reports”).  In addition, the Subscriber has received from
the Company such other information concerning its operations, financial
condition and other matters as the Subscriber has requested (the “Other Written
Information”), and considered all factors the Subscriber deems material in 

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deciding on the advisability
of investing in the stock.  Further, Mr.
Peterson Subscriber is a director of the Company and has access to information
about the Company.

ii.             High Degree of Risk. 
Subscriber acknowledges that an investment in the Stock involves a high
degree of risk, including, but not limited to, the risk that Subscriber may
receive no return on his investment in the Stock and the risk that Subscriber
may lose his entire investment in the Company. 
Subscriber is able to bear the economic risk of investment in the Stock,
including the total loss of the investment. 
Subscriber acknowledges the risks inherent in an investment in the
Stock, including those set forth in the section entitled “Risk Factors” in the
Company’s Annual Report on Form 10-KSB for the year ended October 31, 2006, as
well as those other risks described in or referred to in the Reports and the
Other Written Information.

iii.            Restrictions on Transfer. 
Subscriber acknowledges that there are substantial restrictions on the
transfer of the Stock and Warrants under the Securities Act of 1933, (the “Act”)
and applicable state securities laws (the “State Laws”) and accordingly,
Subscriber may not liquidate an investment in the Stock for an indefinite
period.  Subscriber acknowledges that
neither the Stock being issued nor Stock underlying the Warrants has been
registered for sale under the Act or State Laws.  Subscriber acknowledges and agrees that the
Stock may be resold only pursuant to registration under the Act and the State
Laws, or an opinion of counsel acceptable to the Company that registration is
not required.

iv.            Suitability.  Subscriber believes that an
investment in the Stock is suitable for Subscriber based upon Subscriber’s
investment objectives and financial needs, and Subscriber has adequate means
for providing for his current financial needs and particular contingencies and
has no need for liquidity of investment with respect to the Stock.  Subscriber has sufficient knowledge and
experience in financial and business matters to enable Subscriber to evaluate
the merits and risks of an investment in the Stock and to make an informed
investment decision with respect to the purchase of the Stock.

v.             No General Solicitation.  The
offer to sell the Stock and Warrants was directly communicated to
Subscriber.  Subscriber has not received
any general solicitation or general advertising (including communications
published in any newspaper, magazine or other broadcast) in connection with his
purchase of the Stock.

vi.            Residence; Accredited Investor Status. 
Subscriber is a resident of the state of Minnesota.  Subscriber is an “accredited investor” as
that term is defined by Rule 501 under the Act by virtue of being a natural
person whose individual net worth (assets less liabilities), or joint net worth
with his spouse, exceeds $1,000,000 or a natural person whose individual income
was in excess of $200,000, or whose joint income with his spouse was in excess
of $300,000, in each of the two most recent years, and who has a reasonable
expectation of reaching the same income level for the current year.  Mr. Peterson is also a director of the
Company.

b.             No Market Manipulation. 
Subscriber has not taken, and will not take, directly or indirectly, any
action designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of the Stock to facilitate the sale
or resale of the Stock or affect the price at which the Stock may be issued.

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c.             Brokers or Finders.  The
Company has not, and will not, incur, directly or indirectly, as a result of
any action taken by Subscriber, any liability for brokerage or finders’ fees or
agents’ commissions or any similar charges in connection with this Agreement.

d.             Tax Liability. 
Subscriber has reviewed with Subscriber’s own tax advisors the tax
consequences of an investment in the Stock and the transactions contemplated by
this Agreement, and has and will rely solely on such advisors and not on any
statements or representations of the Company or any of its agents.  Subscriber understands that Subscriber (and
not the Company) is responsible for Subscriber’s own tax liability that may
arise as a result of his investment in the Stock or the transactions contemplated
by this Agreement.

e.             Counsel.  Subscriber acknowledges that
Lindquist & Vennum P.L.L.P. is legal counsel to the Company, whose
interests are in conflict with those of Subscriber, and that Lindquist &
Vennum P.L.L.P., as counsel for the Company, does not represent Subscriber or
Subscriber’s interests in connection with the purchase of the Stock and
warrants, and that Subscriber has had timely opportunity, if desired, to have
Subscriber’s own legal counsel advise Subscriber regarding the purchase of the
Stock and Warrants.

f.              Due Authorization.  This
Agreement has been duly authorized by all necessary action on the part of
Subscriber, has been duly executed by Subscriber, and is a legal, valid, and
binding obligation of Subscriber enforceable in accordance with its terms,
subject to general limitations on the availability of equitable remedies and
the effect of bankruptcy, insolvency, reorganization and other laws of general
application affecting the enforcement of creditors’ rights.  The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby do not and will
not violate or conflict with any agreement or instrument to which Subscriber is
a party or any legal requirement or order applicable to Subscriber.

g.             Required Shareholder Approval. 
Subscriber acknowledges that issuance of the Stock and the Stock
underlying the Warrants is dependent upon shareholder approval of an amendment
to the Company’s Articles of Incorporation increasing the Company’s authorized
shares of common stock from 10,000,000 to 20,000,000.

4.             Restrictive Legend. 
Subscriber acknowledges and agrees that the Company will place a
restrictive legend on any certificate representing of the Stock and warrants
(and any Stock issuable upon exercise of the warrants) containing substantially
the following language:

The securities represented
by this certificate have not been registered under the Securities Act of 1933,
as amended (the “Act”), and have not been registered under any state securities
laws.  These securities may not be sold,
offered for sale, or transferred in the absence of either an effective
registration under the Act and under applicable state securities laws, or an
opinion of counsel satisfactory to the company that such transaction is exempt
from registration under the Act and under applicable state securities laws.

Subscriber agrees that, to
enforce the above legend, the Company may place a stop transfer order with its
registrar and transfer agent covering all certificates representing any of the
Stock.

5.             Certain
Representations of the Company.  In order to induce Subscriber to purchase the
Stock from the Company, the Company hereby represents and warrants to
Subscriber as of the date hereof and as of the Closing Date follows:

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a.             Capitalization.  The authorized capital stock of the Company
consists of 10,000,000 shares of Stock and 10,000,000 shares of Preferred
Stock.  Immediately prior to the sale of
Stock by this Agreement, there are outstanding 7,402,916 shares of common stock
and no shares of Preferred Stock.  There
are no outstanding agreements or preemptive or similar rights affecting the
Stock or equity and no outstanding rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of any shares of Stock or
equity of the Company or other equity interest in the Company except as
described in the Reports or otherwise known to Subscriber.

b.             Organization and Authority.  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of Minnesota and has all requisite corporate power and authority
to own, lease and operate its properties and to conduct its business as
currently conducted.  The Company is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary, other than those jurisdictions in
which the failure to so qualify would not have a material adverse effect on the
business, operations or financial condition of the Company.

c.             Due Authorization.  The
Company has all requisite power and authority under applicable law to execute
and deliver this Agreement and to perform the transactions contemplated
hereby.  Other than the approval of the
Company’s Board of Directors, which approval has been obtained, and approval by
the shareholders of an increase in the Company authorized common stock, no
other approval of any kind is necessary under applicable law for the execution,
delivery and performance of this Agreement. This Agreement constitutes a legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, subject to general limitations on the availability of equitable remedies
and the effect of bankruptcy, insolvency, reorganization and other laws of
general application affecting the enforcement of creditors’ rights.

d.             No Violation. 
Except for the required approval by the Company shareholders of an
increase in the Company’s authorized common stock, the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not violate or conflict with the articles of incorporation or
by-laws of the Company, or violate any legal requirement or order applicable to
the Company.  The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
do not and will not require any third-party action with respect to the Company
under, or conflict with or constitute a default under, or result in the
acceleration or right of acceleration of any obligations, or any termination or
right of termination under, any agreement, instrument, contract or obligation
of the Company. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby do not and will not result
in the creation or imposition of any material lien, claim, charge, restriction,
equity or encumbrance of any kind upon or give any person any interest or right
in or with respect to any of the properties, assets, business or contracts of
the Company or to any of the Stock.

e.             Status of the Stock.  The
Stock upon issuance and the stock issuable upon exercise of the Warrants will
(i) be free and clear of any security interests, liens, claims or other
encumbrances, subject to restrictions upon transfer under the Act and State
laws; (ii) duly and validly issued and be fully paid and non-assessable; (iii)
not have been issued or sold in violation of any preemptive or other similar
rights of the holders of any securities of the Company; and (iv) be not subject
the Subscriber to personal liability by reason of being a shareholder of the
Company.

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f.              No General Solicitation.  Neither the Company nor to its knowledge, any
person acting on its behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D under the Act) in connection
with the offer or sale of the Stock.

6.             Covenants of the Company.  The
Company agrees to reissue certificates representing the Stock without the
legend set forth in Section 4 at such time as (a) the holder thereof is
permitted to and disposes of the Stock pursuant to Rule 144(d) or Rule 144(k)
under the Act in the opinion of counsel reasonably satisfactory to the Company,
or (b) upon resale subject to an effective registration statement after the
Stock are registered under the Act.  The
Company agrees to cooperate with the Subscriber in connection with all resales
pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions necessary to
allow such resales, so long as the Company and its counsel receive all
reasonably requested written representations from the Subscriber and selling broker,
if any.

7.             Miscellaneous.

a.             Survival of Representations and Warranties;
Indemnification.  The parties agree that the agreements,
representations and warranties of each party will survive and remain in full
force and effect after the execution of this Agreement through the Closing Date
and after the Closing Date and payment for and delivery of the Stock. Each
party agrees to indemnify and hold harmless the other party from and against
any and all loss, damage or liability due to, or arising out of, a breach of
any agreement, representation or warranty of this Agreement by such party.

b.             No Assignment; Binding Effect. 
Neither this Agreement, nor any interest herein, is assignable by either
party without prior written consent of the other.  The provisions of this Agreement are binding
upon and inure to the benefit of the parties hereto, and their respective
successors and assigns.

c.             Choice of Law.  This
Agreement will be construed and interpreted in accordance with Minnesota law,
without regard to its choice of law or conflicts of law provisions.

d.             Notices.  All notices, requests,
consents and other communications required or permitted hereunder must be in
writing and be delivered, personally, by facsimile, by overnight courier or
mailed first-class postage prepaid, registered or certified mail,

	
  

  	
  if to Subscriber:

  	
  P.R. Peterson Keogh Plan 

  6111 Blue Circle 

  Minnetonka, MN 55343-9108

  

 

	
  

  	
  if to the Company:

  	
  PPT Vision, Inc. 

  12988 Valley View Road 

  Eden Prairie, MN 55344

  

 

and such notices and other
communications will for all purposes of this Agreement be treated as being
effective or having been given (i) upon personal delivery to the party to
be notified, (ii) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day;
(iii) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt.

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e.             Counterparts.  This
Agreement may be executed concurrently in two or more counterparts, each of
which is an original, but all of which together will constitute one and the
same instrument.

The parties have executed
this Agreement as of the date first written.

	
  

  	
  PPT VISION, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Joseph C. Christenson

  
	
   

  	
   

  	
   Joseph C. Christenson 

   Chief Executive Officer

  
	
   

  	
   

  	
   

  

 

	
  

  	
  P.R. PETERSON KEOGH PLAN

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ P. R. Peterson

  
	
   

  	
   

  	
   P.R. Peterson, Trustee

  

 

 6Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of August 30, 2007 is entered into between
PPT Vision, Inc., a Minnesota corporation (the “Company”) and the P.R. Peterson
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:

Article I.                                               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.

Article II.                                           REGISTRATION
RIGHTS.

Section 2.1              Demand Registration.

(a)               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.

(b)              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:

(i)             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;

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(ii)          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”);

(iii)       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;

(iv)      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

(v)         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.

(c)               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

(i)             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

(ii)           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
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.

(d)              Expenses.  The Company will pay all Registration
Expenses incurred in connection with a Demand Registration.

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(e)               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.

Section 2.2              Piggyback Registrations.

(a)               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.

(b)              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

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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.

(c)               Expenses.  The Company will pay all
Registration Expenses incurred in connection with a Piggyback Registration.

Section 2.3              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 :

(a)               promptly give written notice of the
proposed registration to all other eligible Holders of Registrable Securities;
and

(b)              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:

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

(ii)          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;

(iii)       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;

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

(v)         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;

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

 5
 

(c)               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.

(d)              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).

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

Section 2.4              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:

(a)               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 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.

(b)              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.

(c)               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.

(d)              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.

(e)               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.

 6
 

(f)                 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.

Section 2.5              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.

Section 2.6              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.

Section 2.7              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.

Section 2.8              Indemnification.  In the event any Registrable
Securities are included in a Registration Statement under Sections 2.1, 2.2 or
2.3 hereof:

(a)               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”):

(i)             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;

(ii)          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

 7
 

(iii)       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 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.

(b)              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.

(c)               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

 8
 

commencement
of any such action, if materially prejudicial to its ability 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.

(d)              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.

(e)               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.

(f)                 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.

Section 2.9              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:

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

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

(c)               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

 9
 

reasonably
request in availing itself of any rule or regulation of the Commission allowing
a Holder to sell any such securities without registration.

Section 2.10        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

(a)               the sale, lease or other disposition of all
or substantially all of the assets of the Company;

(b)              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

(c)               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.

Article
III.                                       ASSIGNMENT AND AMENDMENT.

Section 3.1              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.

Section 3.2              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.

Article IV.                                      GENERAL PROVISIONS.

Section 4.1              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.

Section 4.2              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.

Section 4.3              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

 10
 

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.

Section 4.4              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.

Section 4.5              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.

Section 4.6              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.

Section 4.7              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.

Section 4.8                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

 11
 

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.

Section 4.9              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.

Section 4.10        Descriptive Headings.  The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.

 12
 

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: President

  
	
   

  	
   

  
	
   

  	
  INVESTOR:

  
	
   

  	
  P.R. Peterson
  Keogh Plan

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ P. R.
  Peterson

  	
   

  
	
   

  	
  Its: Trustee

  

 

 13
 

ANNEX I

HOLDER(S)

Name
& Address

 

P.R.
Peterson Keogh Plan

6111
Blue Circle,

Minnetonka,
Minnesota

55343-9102

 14

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