Exhibit 10.28
ENDOCARDIAL SOLUTIONS, INC.
STOCK PURCHASE AND RESTRICTION AGREEMENT
THIS STOCK PURCHASE AND RESTRICTION AGREEMENT (this "AgreemenT") is
made and entered into as of January 22, 2001, by and between Endocardial
Solutions, Inc. a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇ (the
"Purchaser").
WHEREAS, the Company desires to sell shares of the Company's Common
Stock to Purchaser to increase Purchaser's equity interest in the Company;
WHEREAS, the Company desires to provide a loan to Purchaser to
enable Purchaser to purchase shares of the Company's Common Stock; and
WHEREAS, the Company desires to incentivize Purchaser to help build
value for the Company.
NOW THEREFORE, in consideration of the foregoing premises, the
mutual covenants and promises set forth herein, the mutual benefits to be
gained by the performance thereof, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged and accepted, the Purchaser and the Company hereby agree as
follows:
1. SALE OF COMMON STOCK.
Subject to the terms and conditions of this Agreement, the Company
hereby sells to the Purchaser and the Purchaser hereby purchases from the
Company, on the Closing Date (as defined below) 110,000 shares of the
Company's Common Stock (the "Shares") at a price per share equal to the last
sale price of the Company's Common Stock as reported on the Nasdaq National
Market on the last business day preceding the Closing Date. The term "Shares"
refers to the Shares purchased herein and all securities received in
replacement thereof pursuant to or in consequence of other similar change in
the Company's capitalization.
2. CLOSING: ISSUANCE OF CERTIFICATE.
(a) CLOSING. The purchase and sale of the Shares shall
occur at a closing (the "Closing") to be held at the principal offices of the
Company or such other place as the parties shall agree, as of the date hereof
(the "Closing Date").
(b) PAYMENT AND DELIVERY OF CERTIFICATE. At the Closing,
the Company shall deliver to the Purchaser a certificate or certificates
representing the Shares to be purchased by the Purchaser pursuant hereto
(which Shares shall be issued in the name of the Purchaser) against payment
of the purchase price therefor. The purchase price for the Shares shall be
paid on the Closing Date by delivery of a promissory note substantially in
the form of Exhibit A hereto payable to the Company.
3. LIMITATIONS ON TRANSFER.
In addition to any other limitation on transfer created by
applicable securities laws, the Purchaser shall not assign, encumber or
dispose of any interest in the Shares except in compliance with the
restrictions set forth in this Section 3.
(a) REPURCHASE OPTION. In the event of the voluntary or
involuntary termination or cessation of employment of the Purchaser with the
Company for any reason whatsoever, with or without cause (including death or
disability), the Company shall, upon the date of such termination (the
"Termination Date"), have an irrevocable, exclusive option to repurchase (the
"Repurchase Option") all or any portion of the Subject Shares (as defined
below) held by the Purchaser as of the Termination Date at the lesser of (i)
the original purchase price per Share specified in Section 1 hereof or (ii)
the Fair Market Value of the Shares. The term "Fair Market Value" shall mean
the price per share equal to the last sale price of the Company's Common
Stock as reported on the Nasdaq National Market on the last business day
preceding the date of repurchase.
Initially, all of the Shares purchased by the Purchaser shall be
subject to the Company's Repurchase Option as set forth above (such Shares,
until released from the Repurchase Option, the "Subject Shares"); provided,
however, the Company's Repurchase Option shall cease to exist from and after
the date of a Change of Control (as defined below), and the Subject Shares
shall be released from the Company's Repurchase Option from and after the
date of such Change of Control. One-thirty-sixth (1/36) of the Subject Shares
(i.e., 3,056 Shares) held by the Purchaser (or any permitted transferee)
shall be released from the Company's Repurchase Option under this Section
3(a) on the first day of each of the thirty-six (36) months following the
Closing Date; provided in each such case the Purchaser is still employed with
the Company on such dates.
The continuation of the Purchaser's employment with the Company is a
material inducement to the Company in selling the Shares to the Purchaser and
failure to provide services to the Company for any reason whatsoever shall
trigger the Company's Repurchase Option.
(b) EXERCISE OF REPURCHASE OPTION. Unless the Company
notifies the Purchaser within forty-five (45) days from the Termination Date
that it does not intend to exercise the Repurchase Option with respect to
some or all of the Subject Shares, the Repurchase Option shall be deemed
automatically exercised by the Company with respect to all of the Subject
Shares as of the forty-fifty (45th) day following the Termination Date,
provided that the Company may notify the Purchaser that it is exercising the
Repurchase Option as of a date prior to such forty-fifty (45th) day. Unless
the Purchaser is otherwise notified by the Company pursuant to the preceding
sentence that the Company does not intend to exercise the Repurchase Option
as to some or all of the Subject Shares, execution of this Agreement by the
Purchaser constitutes written notice to the Purchaser of the Company's
intention to exercise the Repurchase Option with respect to all Subject
Shares. The Company, at its choice, may satisfy its payment obligation to the
Purchaser with respect to exercise of the Repurchase Option by either (A)
delivering a check to the Purchaser in the amount of the purchase price for
the Subject Shares being repurchased, or (B) in the event the Purchaser is
indebted to the Company, canceling an amount of such indebtedness equal to
the purchase price for the Subject Shares being repurchased, or (C) by a
combination of (A) and (B) so that the combined
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payment and cancellation of indebtedness equals such purchase price, provided
that the Company shall use good faith efforts to satisfy its payment
obligation to the Purchaser within fifteen (15) days after the Company's
notice of exercise of the Repurchase Option (or deemed exercise), and that if
such check is not delivered or such cancellation is not effective within such
fifteen (15) day period, the amount of the Company's unsatisfied payment
obligation shall bear interest at a rate of nine percent (9%) per annum until
the Company has satisfied its payment obligation under this Section 3(b). In
the event the Purchaser is indebted to the Company at the time of any deemed
automatic exercise of the Repurchase Option pursuant to this Section 3(b),
the amount of such indebtedness equal to the purchase price of the Subject
Shares being repurchased shall be deemed automatically canceled as of the
date of the Company's deemed exercise. As a result of any repurchase of
Subject Shares pursuant to this Section 3(b), the Company shall become the
legal and beneficial owner of the Subject Shares being repurchased and shall
have all rights and interest therein or related thereto, and the Company
shall have the right to transfer to its own name the number of Subject Shares
being repurchased by the Company, without further action by the Purchaser.
The Purchaser hereby authorizes and directs the secretary or transfer agent
of the Company to transfer the Shares as to which the Repurchase Option has
been exercised (or deemed to have been exercised) from the Purchaser to the
Company. Except as provided under Section 3 hereof, the Purchaser shall not
transfer by sale, assignment, hypothecation, donation or otherwise any of the
Subject Shares or any interest therein prior to the release of such Shares
from the Repurchase Option. The Purchaser further authorizes the Company to
refuse or to cause its Transfer Agent to refuse to transfer or record any
Shares to be transferred in violation of this Agreement.
(c) OBLIGATIONS BINDING UPON TRANSFEREES. Any sale,
transfer or other disposition of the Shares or any interest therein in
violation of this Agreement shall be void and without effect.
(d) REPLACEMENT CERTIFICATE. In the event the restrictions
imposed by this Agreement shall be terminated as provided in this Section 3,
a new certificate or certificates representing the Shares shall be issued, on
request, without the legend referred to in Section 6 hereof.
(e) A "Change in Control" shall mean:
(i) A change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not the Company is then subject to
such reporting requirement;
(ii) The public announcement (which, for purposes of
this definition, shall include, without limitation, a report filed pursuant
to Section 13(d) of the Exchange Act) by the Company or any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) that such
person has become the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act) directly or indirectly, of securities of
the Company representing twenty percent (20%) or more of the combined voting
power of the Company's then outstanding securities;
(iii) The Continuing Directors (as defined below) cease
to constitute a majority of the Company's Board of Directors;
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(iv) The shareholders of the Company approve: (a) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of Company
stock would be converted into cash, securities, or other property, other than
a merger of the Company in which shareholders immediately prior to the merger
have the same proportionate ownership of stock of the surviving corporation
immediately after the merger; (b) any sale, lease, exchange, or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company; or (c) any plan of
liquidation or dissolution of the Company; or
(v) The majority of the Continuing Directors (as
defined below) determine in their sole and absolute discretion that there has
been a Change in Control of the Company.
(f) "Continuing Director" shall mean any person who is a
member of the Board of Directors of the Company, while such person is a
member of the Board of Directors, who is not an Acquiring Person (as defined
below) or an Affiliate or Associate (as defined below) of an Acquiring
Person, or a representative of an Acquiring Person or any such Affiliate or
Associate, and who:
(i) was a member of the Board of Directors on the date
of this Agreement as first written above; or
(ii) subsequently becomes a member of the Board of
Directors, if such person's initial nomination for election or initial
election to the Board of Directors is recommended or approved by a majority
of the Continuing Directors. For purposes of this Section 3(f), "Acquiring
Person" shall mean any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) who or which, together with all Affiliates and
Associates of such person, is the "beneficial owner" (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or indirectly, of
securities of the Company representing twenty percent (20%) or more of the
combined voting power of the Company's then outstanding securities, but shall
not include the Company, any subsidiary of the Company, or any employee
benefit plan of the Company, or of any subsidiary of the Company, or any
entity holding shares of common stock organized, appointed, or established
for, or pursuant to the terms of, any such plan; and "Affiliate" and
"Associate" shall have the respective meanings described to such terms in
Rule 12b-2 promulgated under the Exchange Act.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser that:
(a) ORGANIZATION AND CORPORATE AUTHORIZATION. The Company
is a corporation duly incorporated, validly existing and in good standing
under the laws of Delaware and has the requisite corporate power and
authority to enter into and to carry out its obligations under this Agreement
(including, without limitation, the corporate power and authority to sell,
transfer and convey the Shares as required by this Agreement).
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(b) EXECUTION, DELIVERY; VALID AND BINDING AGREEMENT. The
execution and delivery of this Agreement by the Company and the consummation
of the transactions contemplated hereby have been or will be before Closing
duly authorized by all requisite corporate action. The Company has duly and
validly executed and delivered this Agreement. This Agreement constitutes a
valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except to the extent that enforceability
thereof may be limited by bankruptcy, insolvency, reorganization and other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity.
(c) SEC DOCUMENTS. As of their respective dates, the
reports, schedules, registration statements and definitive proxy statements
filed by the Company with the Securities and Exchange Commission (the "SEC")
since January 1, 2000 (as such documents have since the time of their filing
been amended, the "SEC Documents") complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a 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.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company that:
(a) EXECUTION, DELIVERY; VALID AND BINDING AGREEMENT.
Purchaser has duly and validly executed and delivered this Agreement. This
Agreement constitutes a valid and binding agreement of Purchaser, enforceable
against Purchaser in accordance with its terms, except to the extent that
enforceability thereof may be limited by bankruptcy and other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
(b) BROKERAGE. No third party shall be entitled to receive
any brokerage commissions, finder's fees, fees for financial advisory
services or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by
or on behalf of Purchaser.
(c) Investment Representations.
(i) The Shares are being acquired for investment
purposes only and not with the view toward the distribution or sale thereof
in a public offering within the meaning of the Securities Act of 1933 (the
"Securities Act") or any rule or regulation under the Securities Act.
(ii) Purchaser qualifies as an "accredited
investor" for purposes of Regulation D under the Securities Act.
(iii) Purchaser acknowledges that:
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(A) The Shares have not been registered
under either the Securities Act or applicable state
securities law, and the Company will be relying upon
the foregoing investment representations in issuing
the Shares to Purchaser;
(B) The Company has no obligation or current
intention to register the Shares under the Securities
Act;
(C) The Shares cannot be sold, transferred
or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption
from registration is then available; and
(D) The transferability of the Shares will
be subject to restrictions imposed by all applicable
federal and state securities laws, and the
certificates evidencing such Shares will be imprinted
with a legend substantially in the following form:
"The shares represented by this certificate
have not been registered under the Securities Act of
1933, as amended, and may not be sold, transferred or
otherwise disposed of in the absence of an effective
registration statement under that Act, an available
exemption therefrom or an opinion of counsel
satisfactory to the corporation to the effect that
registration is not required."
6. LEGENDS.
The certificate or certificates representing the Shares shall bear, in
addition to the legend referred in Section 5(c), the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO REPURCHASE
PROVISIONS IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND
THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
7. MISCELLANEOUS.
(a) AMENDMENT. This Agreement may be amended by written
agreement between the Company and the Purchaser.
(b) NOTICES. All notices, consents, requests, instructions,
approvals or other communications provided for herein shall be in writing and
delivered by personal delivery, overnight courier, mail, electronic facsimile
or e-mail addressed to the receiving party at the address set forth herein.
All such communications shall be effective when received.
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Facsimile: 651/644-7897
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E-Mail: ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Endocardial Solutions, Inc.
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Facsimile: 651/644-7897
E-Mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Any party may change the address set forth above by notice
to each other party given as provided herein.
(c) ASSIGNMENT. The rights and benefits of this Agreement
shall inure to the benefit of and be enforceable by the Company's successors
and assigns. The rights and obligations of the Purchaser under this Agreement
may only be assigned with the prior written consent of the Company.
(d) FURTHER ASSURANCES. Both parties agree to execute any
additional documents necessary to carry out the purposes of this Agreement.
(e) STOCKHOLDER RIGHTS. Subject to the foregoing, the
Purchaser shall, during the term of this Agreement, exercise all rights and
privileges of a stockholder of the Company with respect to the Shares.
(f) SPECIFIC PERFORMANCE. The Purchaser agrees that the
Company and/or other shareholders shall be entitled to a decree of specific
performance of the terms hereof or an injunction restraining violations of
this Agreement, said right to be in addition to any of the remedies of the
Company.
(g) GOVERNING LAW. This Agreement shall be construed under
the laws of the State of Minnesota, and covers the entire understanding of
the parties hereto, superseding all prior written or oral agreements and no
amendment or addition hereto shall be deemed effective unless agreed to in
writing by the parties hereto.
(h) SEVERABILITY. If any provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void or
unenforceable, to the extent that the economic benefits of this Agreement to
both parties remain substantially unimpaired, the remaining provisions shall
nevertheless continue in full force and effect without being impaired or
invalidated in any way and shall be construed in accordance with the purposes
and tenor and effect of this Agreement.
(i) NO CONTINUING OBLIGATIONS. THIS AGREEMENT IS NOT AN
EMPLOYMENT CONTRACT AND NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO CREATE
IN ANY WAY WHATSOEVER ANY OBLIGATION ON THE PART OF THE COMPANY TO CONTINUE
THE PURCHASER'S EMPLOYMENT WITH THE COMPANY.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first set forth above.
THE "COMPANY"
ENDOCARDIAL SOLUTIONS, INC.
a Delaware Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President and Chief Executive Officer
THE "PURCHASER"
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Address:
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[SIGNATURE PAGE TO STOCK PURCHASE AND RESTRICTION AGREEMENT]
EXHIBIT A
PROMISSORY NOTE
$371,250.00 January 22, 2001
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇ ▇▇▇▇ (the "Maker"),
hereby promises to pay to the order of ENDOCARDIAL SOLUTIONS, INC. (the
"Payee", which term includes any subsequent holder hereof) at St. ▇▇▇▇,
Minnesota or at such other place as the Payee may from time to time hereafter
designate to the Maker in writing, on January 22, 2006, the principal sum of
Three Hundred Seventy One Thousand Two Hundred Fifty Dollars ($371,250.00).
The unpaid principal balance hereof from time to time outstanding
shall bear interest at the rate of 9.5% per annum. Interest shall be computed
on the basis of actual days elapsed and a year of 360 days. Upon the
happening of any Event of Default, this Note, at the option of the Payee,
shall bear interest until paid in full at a rate per annum equal to the rate
of interest applicable immediately prior to such Event of Default plus 4.0 %.
Interest hereon shall be payable in arrears quarterly on the 15th
day of each of March, June, September and December commencing March 15, 2001,
and at final maturity.
This note may be prepaid by the Maker at any time in whole or from
time to time in part (in minimum partial payments of at least $10,000)
without premium or penalty. Any prepayment shall be applied first against
accrued and unpaid interest and the balance shall be applied principal.
The occurrence of any one or more of the following events shall
constitute an Event of Default, and upon the occurrence of any Event of
Default the Payee may declare this Note to be, and the same shall forthwith
become, immediately due and payable and the Payee may exercise all rights and
remedies as may otherwise be allowed by law:
(a) The Maker shall fail to make any payment of interest
hereon when due and such failure to pay interest shall continue for 30 days
after the due date thereof.
(b) The Maker shall become insolvent or shall generally not
pay his debts as they mature or shall apply for, shall consent to, or shall
acquiesce in the appointment of a custodian, trustee or receiver for the
Maker or for a substantial part of the property thereof or, in the absence of
such application, consent or acquiescence, a custodian, trustee or receiver
shall be appointed for the Maker or for a substantial part of the property
thereof; or any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted by or
against the Maker and, if instituted against the Maker, shall have been
consented to or acquiesced in by the Maker or shall remain undismissed for 60
days, or an order for relief shall have been entered against the Maker.
THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT
TO CONFLICT OF LAWS PRINCIPLES THEREOF.
AT THE OPTION OF THE PAYEE THIS NOTE MAY BE ENFORCED IN ANY FEDERAL
COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN OR ▇▇▇▇▇▇ COUNTY,
MINNESOTA; AND THE MAKER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH
COURT AND WAIVES ANY ARGUMENT THAT THE VENUE IN SUCH FORUMS IS NOT
CONVENIENT. IF THE MAKER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR
VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM
THE RELATIONSHIP CREATED BY THIS NOTE, THE PAYEE AT ITS OPTION SHALL BE
ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES
ABOVE-DESCRIBED, OR, IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE
LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
The Maker hereby waives presentment for payment, notice of dishonor,
protest and notice of protest.
If this Note is not paid when due, the Maker shall pay all of the
Payee's costs of collection including reasonable attorneys' fees.
MAKER:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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