Exhibit 4.3
FOURTH AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
STEREOTAXIS, INC.
FOURTH AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
This Fourth Amended and Restated Investor Rights Agreement (the
"Agreement") is entered into as of the 17th day of December, 2002, by and among
Stereotaxis, Inc., a Delaware corporation (the "Company"), persons holding at
least two-thirds of the Registrable Securities under the Third Amended and
Restated Investor Rights Agreement (as defined below), and the D-2 Purchasers
(as defined below).
RECITALS
WHEREAS, the Company is issuing shares of its Series D-2 Preferred Stock
pursuant to that certain Series D-2 Preferred Stock Purchase Agreement as of the
date hereof (the "Purchase Agreement") and in connection with the offer, sale
and issuance of the Series D-2 Preferred Stock is issuing Warrants to purchase
shares of Common Stock;
WHEREAS, as a condition of entering into the Purchase Agreement, the
purchasers thereunder (the "D-2 Purchasers") have requested that the Company
extend to them registration rights and other rights and the Company desires to
grant such rights to the D-2 Purchasers; and
WHEREAS, the Company has previously extended registration rights and other
rights to certain of its stockholders pursuant to that certain Third Amended and
Restated Investor Rights Agreement among the Company and certain of the
Company's stockholders party thereto (the "Third Amended and Restated Investor
Rights Agreement"), and wishes to set forth the rights of such stockholders and
of the D-2 Purchasers (collectively, the "Investors") in a single integrated
agreement as set forth below;
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Purchase Agreement, the Investors and the Company hereby agree as follows:
SECTION 1. REGISTRATION RIGHTS
1.1 DEFINITIONS. As used in this Agreement the following terms shall have
the following respective meanings:
(a) The term "Holder" shall mean (i) each Investor, for so long as
it holds or has the right to acquire Registrable Securities; and (ii) any other
person holding or having the right to acquire Registrable Securities to whom
these registration rights have been transferred pursuant to paragraph 1.8
hereof.
(b) The terms "register," "registered," and "registration" refer to
a registration effected by filing with the Securities and Exchange Commission
(the "SEC") a registration
statement (the "registration statement") in compliance with the Securities Act
of 1933, as amended (the "Securities Act"), and the declaration or ordering by
the SEC of the effectiveness of such registration statement.
(c) The term "Registrable Securities" means (i) Common Stock issued
or issuable upon conversion of shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series D-1
Preferred Stock and Series D-2 Preferred Stock held by Investors; (ii) any
Common Stock held by Investors; (iii) any Common Stock of the Company 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, Registrable Securities; and (iv) any
Common Stock issued or issuable to the Investors upon the exercise of warrants
issued in connection with the offer, sale and issuance of the Series D-1
Preferred Stock and Series D-2 Preferred Stock. In the event of any
recapitalization by the Company, whether by stock split, reverse stock split,
stock dividend or the like, the number of shares of Registrable Securities used
throughout this Agreement for various purposes shall be proportionately
increased or decreased.
(d) The term "Initiating Holders" means any Holder or Holders of not
less than twenty percent (20%) of the Registrable Securities then outstanding
and not registered at the time of any request for registration pursuant to
paragraph 1.2 of this Agreement.
1.2 DEMAND REGISTRATION.
(a) DEMAND FOR REGISTRATION. If the Company shall receive from
Initiating Holders a written demand (a "Demand Registration") that the Company
effect any registration under the Securities Act of all or a portion of the
Registrable Securities (other than a registration on Form S-3 or any related
form of registration statement, such a request being provided for under
paragraph 1.9 hereof) the Company will:
(i) promptly (but in any event within 10 days) give written
notice of the proposed registration to all other Holders; and
(ii) use its diligent best efforts to effect such registration
as soon as practicable and as soon as will permit or facilitate the sale and
distribution of all or such portion of such Initiating Holders' Registrable
Securities as are specified in such demand, together with all or such portion of
the Registrable Securities of any Holder or Holders joining in such demand as
are specified in a written demand received by the Company within 30 days after
such written notice is given, provided that the Company shall not be obligated
to take any action to effect any such registration pursuant to this paragraph
1.2:
(A) Within 180 days immediately following the effective
date of any registration statement pertaining to an underwritten public
offering of securities of the Company for its own account (other than a
registration relating solely to employee benefit plans);
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(B) After the Company has effected one such registration
pursuant to this paragraph 1.2 and the sale of the shares of Common Stock
under such registration has closed;
(C) If the Company shall furnish to such Holders a
certificate signed by the President 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
registration statement to be filed at the date on which filing would be
required, in which case the Company shall have an additional period of not
more than 120 days within which to file such registration statement;
provided, however, that the Company shall not use this right more than
once in any twelve-month period; or
(D) If more than 50% of the Registrable Securities
requested to be registered by Initiating Holders are withdrawn from such
registration.
(b) UNDERWRITING. If the Initiating Holders intend to distribute the
Registrable Securities covered by their demand by means of an underwriting, they
shall so advise the Company as part of their demand made pursuant to this
paragraph 1.2; and the Company shall include such information in the written
notice referred to in subparagraph 1.2(a)(i). In such event, the right of any
Holder to registration pursuant to this paragraph 1.2 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein.
The Company shall, together with all Holders proposing to distribute their
securities through such underwriting, enter into an underwriting agreement in
customary form with the underwriter or underwriters selected by a majority in
interest of the Initiating Holders and reasonably satisfactory to the Company.
Notwithstanding any other provision of this paragraph 1.2, if the underwriter
shall advise the Company in writing that marketing factors (including, without
limitation, an adverse effect on the per share offering price) require a
limitation of the number of shares to be underwritten, then the Company shall so
advise all Holders of Registrable Securities that would otherwise be registered
and underwritten pursuant hereto, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated pro rata among such Holders thereof in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders at the time of filing the registration statement. No Registrable
Securities excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration.
If any Holder disapproves of the terms of the underwriting, such Holder
may elect to withdraw therefrom by written notice to the Company, the
underwriter, and the Initiating Holders. The Registrable Securities so withdrawn
shall also be withdrawn from registration.
If the underwriter has not limited the number of Registrable Securities to
be underwritten, the Company may include securities for its own account (or for
the account of other stockholders) in such registration if the underwriter so
agrees and if the number of Registrable
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Securities that would otherwise have been included in such registration and
underwriting will not thereby be limited.
1.3 COMPANY REGISTRATION.
(a) If at any time or from time to time the Company shall determine
to register any of its securities, either for its own account or the account of
security holders (other than the Holders), other than a registration relating
solely to employee benefit plans, a registration on Form S-4, or a registration
pursuant to paragraph 1.2 hereof, the Company will:
(i) promptly give to each Holder written notice thereof (which
shall include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or other state
securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 20 days after receipt of such written notice from the
Company, by any Holder or Holders, except as set forth in subparagraph 1.3(b)
below.
(b) UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to subparagraph 1.3(a)(i). In such event the right of any Holder to
registration pursuant to this paragraph 1.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall, together with the Company and the other parties distributing their
securities through such underwriting, enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
paragraph 1.3, if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may limit
the number of Registrable Securities to be included in the registration and
underwriting, or may exclude Registrable Securities entirely from such
registration and underwriting subject to the terms of this paragraph. The
Company shall so advise all holders of the Company's securities that would
otherwise be registered and underwritten pursuant hereto, and the number of
shares of such securities, including Registrable Securities, that may be
included in the registration and underwriting shall be allocated in the
following manner: shares, other than Registrable Securities, requested to be
included in such registration by stockholders shall be excluded, and if a
limitation on the number of shares is still required, the number of Registrable
Securities that may be included shall be allocated among the Holders thereof in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by each such Holder at the time of filing the registration
statement. In the event of any underwriter cutback, any selling shareholder
which is a Holder of Registrable Securities and which 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
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benefit of any of the foregoing persons shall be deemed to be a single "selling
Holder", and any pro rata reduction with respect to such "selling Holder" shall
be based upon the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such "selling Holder", as defined in
this sentence. No securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of the underwriting, it may elect to
withdraw therefrom by written notice to the Company and the underwriter. The
Registrable Securities so withdrawn shall also be withdrawn from registration.
1.4 EXPENSES OF REGISTRATION. All expenses incurred in connection with the
registration effected pursuant to paragraph 1.2 and all expenses incurred in
connection with the first two registrations effected pursuant to paragraphs 1.3
and 1.9, including without limitation all registration, filing, and
qualification fees (including blue sky fees and expenses), printing expenses,
escrow fees, fees and disbursements of counsel for the Company, reasonable fees
and disbursements of one special counsel for the participating Holders, and
expenses of any special audits incidental to or required by such registration
(collectively, "Registration Expenses"), shall be borne by the Company;
provided, however, that the term Registration Expenses shall not include, and in
no event will the Company be obligated to pay, stock transfer taxes or
underwriters' discounts, or commissions relating to Registrable Securities.
Registration Expenses incurred in any further registration pursuant to paragraph
1.3 shall be paid by the Company and the Holders including Registrable
Securities in such registration, pro rata according to the amount of securities
included by such parties in such registration, and Registration Expenses
incurred in any further registration pursuant to paragraph 1.9 shall be paid by
the Holders including Registrable Securities in such registration pro rata
according to the amount of securities so included. Notwithstanding anything to
the contrary above, the Company shall not be required to pay any Registration
Expenses of any registration pursuant to paragraph 1.2 in which more than 50% of
the Registrable Securities requested to be included in such registration are
withdrawn other than as a result of actions by the Company or a material adverse
change in its condition (financial or otherwise), unless the Initiating Holders
so requesting withdrawal of their Registrable Securities from such registration
agree to forfeit their right to one demand registration pursuant to paragraph
1.2 (in which event such right shall be forfeited by all Holders). In the
absence of such an agreement to forfeit, the Holders of Registrable Securities
to have been registered shall bear all such expenses pro rata on the basis of
the Registrable Securities to have been registered. Notwithstanding the
foregoing, however, if at the time of the withdrawal, the Holders have learned
of a material adverse change in the condition, business, or prospects of the
Company from that known to the Holders at the time of their request, of which
the Company had knowledge at the time of the request, then the Holders shall not
be required to pay any of said expenses and shall retain their full rights
pursuant to paragraph 1.2.
1.5 OBLIGATIONS OF THE COMPANY. Whenever required under this Section 1 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities (within ninety (90) days after a demand,
if pursuant to Sections 1.2 or 1.9)
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and use its diligent best efforts to cause such registration statement to become
effective, and, upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration statement effective for
up to ninety (90) days or until the Holder or Holders have completed the
distribution relating thereto.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
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 numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall 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 of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus 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 therein not misleading in the light of the circumstances then
existing.
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 1, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 1, if such securities are being
sold through underwriters, and on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated such date,
of the counsel representing the Company for the purposes of such registration,
in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities and (ii) a letter dated such
date, from the independent accountants of the Company, in form and substance as
is customarily given by independent accountants to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities.
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1.6 INDEMNIFICATION.
(a) The Company will, and does hereby undertake to, indemnify and
hold harmless each Holder of Registrable Securities, each of such Holder's
officers, directors, partners and agents, and each person controlling such
Holder, with respect to any registration, qualification, or compliance of the
Registrable Securities held by or issuable to such Holder effected pursuant to
this Section 1, and each underwriter of such registration, if any, and each
person who controls any underwriter, against all claims, losses, damages, and
liabilities (or actions in respect thereto) to which they may become subject
under the Securities Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or other federal or state law arising out of or based on (i)
any untrue statement (or alleged untrue statement) of a material fact contained
in any prospectus, offering circular, or other similar document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any violation
or alleged violation by the Company of any federal, state or common law rule or
regulation applicable to the Company in connection with any such registration,
qualification, or compliance, and will reimburse, as incurred, each such Holder,
each such underwriter, and each such director, officer, partner, agent and
controlling person, for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action; provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense,
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by such
Holder or underwriter and stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by or issuable
to such Holder are included in such registration, qualification, or compliance
of the Company's securities, severally and not jointly, indemnify the Company,
each of its directors, and each officer who signs a registration statement in
connection therewith, and each person controlling the Company, each underwriter
of such registration, if any, and each person who controls any such underwriter,
and each other Holder, each of such other Holder's officers, partners, directors
and agents and each person controlling such other Holder, against all claims,
losses, damages, and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any prospectus, offering circular, or other similar document
(including any related registration statement, notification, or the like)
incident to any such registration, qualification, or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse, as incurred, the Company, each such underwriter, each such other
Holder, and each such director, officer, partner, and controlling person, for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability, or action,
in each case to the extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged omission) was made in such
registration statement, prospectus, offering circular, or other document, in
reliance upon and in conformity with written information furnished to the
Company
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by an instrument duly executed by such Holder and stated to be specifically for
use therein. In no event will any Holder be required to enter into any agreement
or undertaking in connection with any registration under this Section 1
providing for any indemnification or contribution obligations on the part of
such Holder greater than such Holder's obligations under this paragraph 1.6. The
liability of each Holder hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of the shares sold by such Holder under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not in any event to exceed the net proceeds
received by such Holder from the sale of Registrable Securities covered by such
registration statement.
(c) Each party entitled to indemnification under this paragraph 1.6
(the "Indemnified Party") shall give notice to the party required to provide
such indemnification (the "Indemnifying Party") of any claim as to which
indemnification may be sought promptly after such Indemnified Party has actual
knowledge thereof, and shall permit the Indemnifying Party to assume the defense
of any such claim or any litigation resulting therefrom; provided that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be subject to approval by the Indemnified Party (whose
approval shall not be unreasonably withheld) and the Indemnified Party may
participate in such defense at the Indemnifying Party's expense if
representation of such Indemnified Party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding; and provided further that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 1, except
to the extent that such failure to give notice shall materially adversely affect
the Indemnifying Party in the defense of any such claim or any such litigation.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff therein, to such
Indemnified Party, of a release from all liability in respect to such claim or
litigation.
1.7 INFORMATION BY HOLDER. The Holder or Holders of Registrable Securities
included in any registration shall furnish to the Company such information
regarding such Holder or Holders and the distribution proposed by such Holder or
Holders as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification, or compliance
referred to in this Section 1.
1.8 TRANSFER OF REGISTRATION RIGHTS. The rights contained in paragraphs
1.2, 1.3 and 1.9 hereof, to cause the Company to register the Registrable
Securities, may be assigned or otherwise conveyed to a transferee or assignee of
Registrable Securities, who shall be considered a "Holder" for purposes of this
Section 1, provided that (a) such transferee or assignee acquires at least
50,000 shares (as presently constituted) and (b) the Company is given written
notice by such Holder at the time of or within a reasonable time after said
transfer, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being assigned.
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1.9 FORM S-3. If the Company's stock becomes publicly traded, the Company
shall use its best efforts to qualify for registration on Form S-3 or any
successor short-form registration statement. After the Company has qualified for
the use of Form S-3, or any successor short-form registration statement, the
Holders of Registrable Securities shall have the right to request an unlimited
number of registrations on Form S-3, or any successor short-form registration
statement, thereafter under this paragraph 1.9. The Company shall give notice to
all Holders of Registrable Securities of the receipt of a request for
registration pursuant to this paragraph 1.9 and shall provide a reasonable
opportunity for other Holders to participate in the registration. Subject to the
foregoing, the Company will use its best efforts to effect promptly the
registration of all shares of Registrable Securities on Form S-3, to the extent
requested by the Holder or Holders thereof for purposes of disposition;
provided, however, that the Company shall not be obligated to effect any such
registration if (a) 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 of less than $500,000 or (b) in the event that the
conditions set forth in subparagraph 1.2(a)(ii)(C) occur (but subject to the
limitations set forth therein).
1.10 DELAY OF REGISTRATION. No Holder shall 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 Section 1.
1.11 RULE 144 REPORTING. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act ("Rule 144"), at all times commencing
ninety (90) days after the effective date of the first registration filed by the
Company for an offering of its securities to the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Securities Act and Exchange Act;
(c) So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act and of the Exchange Act (at any time after it has become subject to such
reporting requirements); a copy of the most recent annual or quarterly report of
the Company; and such other reports and documents as a Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to
sell any such securities without registration.
1.12 "MARKET STAND OFF" AGREEMENT. Each Holder hereby agrees that during a
period of up to 180 days (or such shorter period as the underwriter may permit)
following the effective date of a registration statement of the Company filed
under the Securities Act, it shall not, to the extent requested by the Company
and any underwriter, sell or otherwise transfer or
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dispose of (other than to transferees who agree to be similarly bound) any
Common Stock of the Company held by it at any time during such period except
Common Stock included in such registration; provided, however, that:
(a) Such agreement shall be applicable only to: (i) the first such
registration statement of the Company which covers Common Stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;
and (ii) a Demand Registration with respect to an underwritten offering; and
(b) All officers and directors of the Company and all other persons
with registration rights (whether or not pursuant to this Agreement) enter into
similar agreements.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
1.13 TERMINATION OF REGISTRATION RIGHTS. All rights and duties provided
for in this Section 1 shall terminate (a) on the eighth anniversary of the
closing of the sale of securities pursuant to a registration statement filed by
the Company under the Securities Act in connection with the initial firm
commitment underwritten offering of its securities to the general public, or (b)
as to each individual Holder, at such time after the Company's initial
registered offering as all of the Registrable Securities held by and issuable to
such Holder may be sold in one ninety (90) day period under Rule 144 of the
Securities Act and as long as such Holder holds less than 1% of the then
outstanding Registrable Securities.
SECTION 2. COVENANTS OF THE COMPANY
Until such time as the earlier of (i) the Company becoming subject to all
applicable reporting requirements arising under the Exchange Act or any
successor statute and any applicable rules promulgated thereunder by the SEC, or
(ii) the closing of the Company's first firm commitment underwritten public
offering registered under the Securities Act, the Company hereby covenants and
agrees as follows:
2.1 BASIC FINANCIAL INFORMATION AND INSPECTION RIGHTS.
(a) The Company shall furnish the following reports:
(i) To each Investor, within 120 days after the end of each
fiscal year, consolidated and consolidating balance sheets of the Company and
its subsidiaries, if any, as at the end of such fiscal year, and consolidated
and consolidating statements of income and retained earnings and consolidated
and consolidating statements of cash flows of the Company and its subsidiaries,
if any, for such fiscal year, prepared in accordance with generally accepted
accounting principles and setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and accompanied
by a report and opinion thereon (except as to the consolidating balance sheets
and statements of income and retained earnings and cash flows) by independent
certified public accountants of recognized national standing
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selected by the Company's board of directors and by a copy of such accountants'
management letter prepared in connection therewith.
(ii) To each Investor holding at least 225,000 Registrable
Securities, as soon as practicable after the end of each calendar quarter, the
Company's unaudited consolidated and consolidating balance sheet as of the end
of such quarter, and its unaudited consolidated and consolidating statements of
income and retained earnings and cash flows for such quarter, all in reasonable
detail and prepared in accordance with generally accepted accounting principles
and certified by the principal financial or accounting officer of the Company.
(b) Each Investor holding at least 225,000 Registrable Securities
shall have the right to visit and inspect any of the properties of the Company
or any of its subsidiaries, and to discuss the affairs, finances and accounts of
the Company or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as often
as may be reasonably requested; provided, however, that the Company shall not be
obligated under this Section 2.1(b) with respect to a competitor of the Company
or with respect to information which the Board of Directors determines in good
faith is confidential and should not, therefore, be disclosed.
(c) The rights granted pursuant to this paragraph 2.1 may not be
assigned or otherwise conveyed by the Investors or by any subsequent transferee
of any such rights without prior written notice to the Company; provided that
the Company may edit the information made available to such subsequent
transferee if the Company reasonably believes that it is necessary to protect
its proprietary information of the Company.
2.2 CONFIDENTIALITY OF RECORDS. Each Investor agrees to use, and to use
its best efforts to insure that its authorized representatives use, the same
degree of care as such Investor uses to protect its own confidential information
to keep confidential any information furnished to it, which the Company
identifies as being confidential or proprietary (so long as such information is
not in the public domain), except that such Investor may disclose such
proprietary or confidential information to any partner, subsidiary or parent of
such Investor for the purpose of evaluating its investment in the Company as
long as such partner, subsidiary or parent is advised of the confidentiality
provisions of this paragraph 2.3.
2.3 PROPRIETARY INFORMATION. The Company shall require all employees of
and consultants to the Company who have access to proprietary information of the
Company to enter into agreements in the Company's standard form providing for
the protection of proprietary information and inventions.
2.4 RESERVATION OF COMMON STOCK The Company will at all times reserve and
keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to time upon such
conversion.
11
SECTION 3. MISCELLANEOUS
3.1 SUPERSEDES. Upon the execution of this Agreement by Holders of not
less than two-thirds (2/3) of the Registrable Securities covered by the Third
Amended and Restated Investor Rights Agreement, this Agreement shall supersede
and replace the Third Amended and Restated Investor Rights Agreement.
3.2 GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of Missouri without regard to the conflicts of law
provisions therein.
3.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with respect to the
subject matter hereof. This Agreement, or any provision thereof, may be amended,
waived, discharged or terminated only by written consent of the Company and the
Holders of not less than two-thirds (2/3) of the Registrable Securities then
outstanding, provided that any amendment or waiver that adversely affects any
Holder in a manner that is not uniformly applied to all Holders as a class shall
require the written consent of such adversely affected Holder.
3.4 NOTICES. Any notice, request or other communication required or
permitted hereunder shall be given in writing and shall be deemed to have been
duly given if personally delivered or if telegraphed or mailed by registered or
certified mail, postage prepaid, at the address of the Holders as reflected in
the books and records of the Company as of the date of such notice. Any party
hereto may by notice so given change its address for future notices hereunder.
Notice shall conclusively be deemed to have been given when personally delivered
or when deposited in the mail or telegraphed in the manner set forth above and
shall be deemed to have been received when delivered.
3.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.6 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
3.7 CAPTIONS. The captions and headings to Sections of this Agreement have
been inserted for identification and reference purposes only and shall not be
used to construe the meaning or the interpretation of this Agreement.
12
3.8 REMEDIES. The Company hereby acknowledges that irreparable injury will
result to the Investors in the event of a breach of this Agreement by the
Company. It is therefore agreed that, subject to the provisions of paragraph
1.10, in the event that the Company breaches this Agreement, the Investors shall
be entitled, in addition to any other remedies which may be available: (a) to an
injunction to restrain the violation thereof by such party or partners, agents,
servants, employers or employees of such party, and (b) to compel specific
performance of the terms and conditions of this Agreement. Nothing herein shall
be construed to prohibit the Investors from pursuing any other legal or
equitable remedy available for such breach, including recovery of damages.
* * * *
13
IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amended
and Restated Investor Rights Agreement as of the date set forth in the first
paragraph hereof.
STEREOTAXIS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President
AMPERSAND 1999 LIMITED PARTNERSHIP
By: AMP-99 Management Company Limited
Liability Company, its General
Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Member
AMPERSAND 1999 COMPANION FUND LIMITED
PARTNERSHIP
By: AMP-99 Management Company Limited
Liability Company, its General
Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Member
ADVENT HEALTHCARE AND LIFE SCIENCES II
LIMITED PARTNERSHIP
By: Advent International Limited
Partnership, General Partner
By: Advent International Corporation,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Vice President
14
ADVENT HEALTHCARE AND LIFE SCIENCES II
BETEILIGUNG GMBH & CO. KG
By: Advent International Limited
Partnership, Managing Limited Partner
By: Advent International Corporation,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Vice President
ADVENT PARTNERS HLS II LIMITED PARTNERSHIP
By: Advent International Corporation,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Vice President
ADVENT PARTNERS LIMITED PARTNERSHIP
By: Advent International Corporation,
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Vice President
ASCENSION HEALTH, as Fiscal Agent and
Nominee of certain of its wholly-owned
subsidiaries
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President & CEO
15
EGS PRIVATE HEALTHCARE PARTNERSHIP, L.P.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Managing Director
EGS PRIVATE HEALTHCARE COUNTERPART, L.P.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Managing Director
ADVANTAGE CAPITAL MISSOURI PARTNERS III,
L.P.
By: Advantage Capital Company MO-GP-III,
L.L.C., its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name:
Title:
ADVANTAGE CAPITAL MISSOURI
PARTNERS I, L.P.
ADVANTAGE CAPITAL MISSOURI
PARTNERS II, L.P.
By: /s ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name:
Title:
16
A.G.E. INVESTMENTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
ALAFI CAPITAL COMPANY, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Partner
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, an individual
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CID EQUITY CAPITAL V, L.P.
By: CID Equity Partners V,
Its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, General Partner
EMERSUB XXXVIII, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Secretary
17
FERI TRUST GMBH
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Partner
BOME INVESTORS III, L.L.C.
By: GATEWAY CAPCO III, L.L.C.,
its Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Member
BOME INVESTORS II, LLC
By: GATEWAY CAPCO, LLC,
its Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Member
BOME INVESTORS, INC.
By: GATEWAY CAPCO, LLC,
its Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Member
18
GATEWAY VENTURE PARTNERS III, L.P.
By: Gateway Associates III, L.P.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
GRAYSTONE VENTURE DIRECT EQUITY, L.P.
By: Graystone Venture Partners, LLC,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
PORTAGE FOUNDERS, L.P.
By: Portage Venture Partners, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Managing Director
PORTAGE VENTURE FUND, L.P.
By: Portage Venture Partners, L.L.C.,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Managing Director
19
SANDERLING VENTURES LIMITED, L.P.
SANDERLING VENTURE PARTNERS II, L.P.
SANDERLING VENTURE PARTNERS IV CO-
INVESTMENT FUND, L.P.
SANDERLING IV BIOMEDICAL CO-INVESTMENT
FUND, L.P.
SANDERLING II LIMITED PARTNERSHIP
SANDERLING VENTURE PARTNERS V CO-INVESTMENT
FUND, L.P.
SANDERLING V BETEILIGUNGS GMBH & CO. KG
SANDERLING V LIMITED PARTNERSHIP
SANDERLING V BIOMEDICAL CO-INVESTMENT
FUND, L.P.
SANDERLING VENTURES MANAGEMENT V
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: General Partner
MITSUBISHI INTERNATIONAL CORPORATION
By: /s/ MOTOATSU SAKURAI
------------------------------------------
Name: Motoatsu Sakurai
Title: Executive Vice President & COO
MIC CAPITAL LLC
By: MC Financial Services Ltd., as Manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
20
STIFEL CAPCO II, L.L.C.
By: /s/ ▇. ▇▇▇▇▇▇ SCHLOFLY
-----------------------------------------
Name: ▇. ▇▇▇▇▇▇ Schlofly
Title: President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, JOINT
TENANTS WITH RIGHT OF SURVIVORSHIP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III, M.D.
21
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
JOINT TENANTS WITH RIGHT OF SURVIVORSHIP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
22
PROLOG CAPITAL A, L.P.
By: Prolog Ventures A, LLC
Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: A Managing Director
PROLOG CAPITAL B, L.P.
By: Prolog Ventures B, LLC
Its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: A Managing Director
23
MITSUBISHI CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: General Manager
Technology & Business Development
Dept.
24
