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STOCK PURCHASE AGREEMENT
by and between
ENDOCARDIAL SOLUTIONS, INC.
and
MEDTRONIC ASSET MANAGEMENT, INC.
Dated as of March __, 1997
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into as of March __, 1997
by and between ENDOCARDIAL SOLUTIONS, INC. (the "Company"), a Delaware
corporation, and MEDTRONIC ASSET MANAGEMENT, INC. ("Medtronic"), a Minnesota
corporation.
RECITALS
WHEREAS, the Company is currently engaged in an initial public offering
(the "Initial Public Offering") of its Common Stock, $.01 par value per share
(the "Common Stock"), for which it has filed a registration statement on Form
S-1 and amendments thereto (File No. 333-20677, the "Registration Statement")
with the Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act"); and
WHEREAS, concurrently with the Initial Public Offering, the Company desires
to issue and sell to Medtronic, and Medtronic desires to purchase from the
Company, upon the terms and subject to the conditions set forth in this
Agreement, 750,000 shares (the "Shares") of the Company's Common Stock.
AGREEMENT
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 SPECIFIC DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth or as referenced below:
"AGREEMENT" means this Agreement and all exhibits and schedules hereto.
"CLOSING DATE" means the date of the First Closing Date (as defined in the
Purchase Agreement) of the Initial Public Offering.
"COMMON STOCK" has the meaning assigned to such term in the recitals of
this Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"FINAL PROSPECTUS" means the final prospectus relating to the Initial
Public Offering filed with the SEC pursuant to Rule 424(b) under the Securities
Act.
"FORM S-3" means such form under the Securities Act in effect on the date
hereof or any successor registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
"HOLDER" means Medtronic or any person owning of record Registrable
Securities that have not been sold to the public or any assignee of record of
such Registrable Securities in accordance with Article VI hereof.
"INITIAL PUBLIC OFFERING" has the meaning assigned to such term in the
recitals of this Agreement.
"INITIATING HOLDERS" means Holders of more than fifty percent (50%) of the
Registrable Securities then outstanding.
"INVESTMENT AGREEMENT" means that certain Investment Agreement, dated April
26, 1996, between the Company and Medtronic.
"INVESTORS' RIGHTS AGREEMENT" means that certain Amended and Restated
Investors' Rights Agreement, dated as of January 31, 1995, as amended April 26,
1996, between the Company and the purchasers of the Company's Series A Preferred
Stock and Series B Preferred Stock identified on the signature pages thereto.
"LIENS" means liens, mortgages, charges, security interests, claims, voting
trusts, pledges, encumbrances, options, assessments, restrictions, or
third-party or spousal interests of any nature.
"KNOWLEDGE" means actual knowledge of a fact or the knowledge which such
person could reasonably be expected to have based on reasonable inquiry. The
knowledge of an entity shall include the knowledge of such entity's officers.
"PRELIMINARY PROSPECTUS" means the preliminary prospectus delivered in
connection with the Initial Public Offering.
"PURCHASE AGREEMENT" means the Purchase Agreement to be entered into
between the Company and the Representatives in connection with the underwriting
of the Initial Public Offering.
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"REGISTER," "REGISTER," and "REGISTRATION" means a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such registration
statement.
"REGISTRABLE SECURITIES" means (i) the Shares and (ii) any shares of Common
Stock of the Company issued (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued) as a dividend or other
distribution with respect to, or in exchange for or in replacement of, the
Shares. Notwithstanding the foregoing, Registrable Securities shall not include
any securities sold by a person to the public either pursuant to a registration
statement or Rule 144 under the Securities Act or sold in a private transaction
in which the transferror's rights under Article VI of this Agreement are not
assigned.
"REGISTRABLE SECURITIES THEN OUTSTANDING" means the number of Shares
determined by calculating the total number of Shares that are Registrable
Securities and are then issued and outstanding.
"REGISTRATION EXPENSES" means all expenses incurred by the Company in
complying with Section 6.2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements not to exceed Ten
Thousand Dollars ($10,000) of a single special counsel for the holders of
Registrable Securities, blue sky fees and expenses (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company).
"REGISTRATION STATEMENT" has the meaning assigned to such term in the
recitals of this Agreement.
"REPRESENTATIVES" means ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. and ▇▇▇▇▇, ▇▇▇▇▇ & Company as
representatives of the Underwriters named in the Purchase Agreement.
"SEC" has the meaning assigned to such term in the recitals of this
Agreement.
"SECURITIES ACT" has the meaning assigned to such term in the recitals of
this Agreement.
"SELLING EXPENSES" means all underwriting discounts and commissions
applicable to a sale of Registrable Securities.
"SHARES" has the meaning assigned to such term in the recitals of this
Agreement.
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"UNDERWRITERS" means the underwriters to be named in the Purchase
Agreement.
1.2 DEFINITIONAL PROVISIONS.
(a) The words "hereof," "herein," and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this Agreement
as a whole and not to any particular provisions of this Agreement.
(b) Terms defined in the singular shall have a comparable meaning
when used in the plural, and vice-versa.
(c) References to an "Exhibit" or to a "Schedule" are, unless
otherwise specified, to one of the Exhibits or Schedules attached to or
referenced in this Agreement, and references to an "Article" or a "Section"
are, unless otherwise specified, to one of the Articles or Sections of this
Agreement.
(d) The term "person" includes any individual, partnership, joint
venture, corporation, trust, unincorporated organization or government or
any department or agency thereof.
ARTICLE II
PURCHASE OF COMMON STOCK
2.1 PURCHASE AND SALE OF SHARES. On the Closing Date and subject to the
conditions set forth in this Agreement, the Company hereby agrees to issue, sell
and deliver to Medtronic, and Medtronic hereby agrees to accept and purchase
from the Company, the Shares.
2.2 PURCHASE PRICE. The purchase price for the Shares shall be an amount
equal to (a) the number of Shares (750,000) multiplied by (b) the Price to
Public set forth in the Final Prospectus, payable on the Closing Date by wire
transfer of immediately available funds to the Company's account designated by
the Company to Medtronic.
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ARTICLE III
CONDITIONS TO CLOSING
3.1 CONDITIONS OF OBLIGATION OF MEDTRONIC. The obligation of Medtronic to
complete the purchase of the Shares on the Closing Date in accordance with the
terms set forth herein is subject to the satisfaction (or waiver by Medtronic)
of each of the following conditions:
(a) The representations and warranties made by the Company in this
Agreement shall be correct in all material respects on and as of the
Closing Date with the same force and effect as though such representations
and warranties had been made on the Closing Date.
(b) The Registration Statement shall have been declared effective by
the SEC under the Securities Act and no stop order suspending the
effectiveness thereof shall have been issued and no proceedings for that
purpose shall have been initiated or, to the knowledge of the Company,
threatened by the SEC, and any request of the SEC for additional
information (to be included in the Registration Statement or the Final
Prospectus or otherwise) shall have been complied with to the satisfaction
of the Representatives.
(c) The Company shall have obtained the consent or consents required
under the Investors' Rights Agreement in order to enter into this Agreement
and grant to Medtronic the registration rights granted to Medtronic in
Article VI hereof.
(d) Medtronic shall have received a certificate, dated the Closing
Date, of the President and Chief Executive Officer and the Chief Financial
Officer of the Company, to the effect that to the best of the knowledge of
each such officer:
(i) the representations of the Company in this Agreement
are true and correct as if made on and as of the Closing Date, and the
Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied at or prior to
the Closing Date; and
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been instituted or, to their knowledge, are contemplated
by the SEC.
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(e) The First Closing (as defined in the Purchase Agreement) with
respect to the Initial Public Offering shall have occurred.
Medtronic shall be under no obligation to purchase the Shares hereunder
if the Closing Date has not occurred on or before May 17, 1997.
3.2 CONDITIONS OF OBLIGATION OF THE COMPANY. The obligation of the
Company to complete the sale of the shares on the Closing Date in accordance
with the terms set forth herein is subject to the satisfaction (or waiver by the
Company) of each of the following conditions:
(a) The representations and warranties made by Medtronic in this
Agreement shall be correct in all material respects on and as of the
Closing Date with the same force and effect as though such representations
and warranties had been made on the Closing Date.
(b) The Registration Statement shall have been declared effective by
the SEC under the Securities Act and no stop order suspending the
effectiveness thereof shall have been issued and no proceedings for that
purpose shall have been initiated or, to the knowledge of the Company,
threatened by the SEC, and any request of the SEC for additional
information (to be included in the Registration Statement or the Final
Prospectus or otherwise) shall have been complied with to the satisfaction
of the Representatives.
(c) The Company shall have received a certificate, dated the Closing
Date, of an appropriate officer of Medtronic, to the effect that to the
best of the knowledge of such officer the representations of Medtronic in
this Agreement are true and correct as if made on and as of the Closing
Date, and Medtronic has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied at or prior
to the Closing Date.
(d) The First Closing (as defined in the Purchase Agreement) with
respect to the Initial Public Offering shall have occurred.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Medtronic as follows:
4.1 ORGANIZATION, QUALIFICATIONS AND CORPORATE POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and is duly licensed or qualified to transact
business as a foreign corporation and is in good standing in each jurisdiction
in which the nature of the business transacted by it or the character of the
properties owned or leased by it requires such licensing or qualification and
where the failure to be so licensed or
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qualified could have material adverse effect upon the Company or its business.
The Company has the corporate power and authority to own and hold its properties
and to carry on its business as now conducted and as proposed to be conducted,
to execute, deliver and perform this Agreement, and to issue, sell and deliver
the Shares. The Company has no subsidiaries.
4.2 AUTHORIZATION OF AGREEMENT, ETC.
(a) The execution and delivery by the Company of this Agreement, the
performance by the Company of its obligations hereunder, and the issuance,
sale and delivery of the Shares have been duly authorized by all requisite
corporate action and will not violate any provision of law, any order of
any court or other agency of government, the Certificate of Incorporation
or the By-laws of the Company, in each case as amended, or any provision of
any material indenture, agreement or other instrument to which the Company
or any of its properties or assets is bound, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any such material indenture, agreement or other instrument,
or result in the creation or imposition of any material Lien upon any of
the properties or assets of the Company.
(b) The Shares have been duly authorized and validly issued, and upon
receipt of payment therefor on the Closing Date in accordance with the
terms of this Agreement, will be fully paid and nonassessable. Upon
issuance and delivery of the Shares pursuant to this Agreement, the Shares
will be free and clear of all Liens imposed by or through the Company.
4.3 VALIDITY. This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject, as to the enforcement of
remedies, to the discretion of the courts in awarding equitable relief and to
applicable bankruptcy, reorganization, insolvency, moratorium and similar laws
affecting the rights of creditors generally.
4.4 REGISTRATION STATEMENT. The Registration Statement, as amended by
Amendments ▇▇. ▇, ▇▇. ▇ and No. 3 thereto, including the Preliminary Prospectus,
copies of which have heretofore been delivered to Medtronic, has been prepared
by Seller in conformity with the requirements of the Securities Act and the
rules and regulations (the "Rules and Regulations") of the SEC under the
Securities Act, and has been filed with the Commission under the Securities Act;
such amendment or amendments to such Registration Statement, copies of which
have heretofore been delivered to Medtronic, as may have been made prior to the
date of this Agreement have been so prepared and filed; and Seller has so
prepared and proposes so to file
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the Final Prospectus in accordance with Rule 424 promulgated under the
Securities Act.
4.5 NO STOP ORDER; ERRORS AND OMISSIONS. The Commission has not issued
any order preventing or suspending the use of the Preliminary Prospectus. At
the time of filing the Preliminary Prospectus, such prospectus did not include
any 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 in which they were made, not misleading. The
Registration Statement when it becomes effective and Final Prospectus when
filed with the SEC pursuant to Rule 424 of the Rules and Regulations and at
all times subsequent thereto up to the Closing Date and any amendments or
supplements thereto will contain as of their respective dates all material
statements and information which are required to be included therein in
accordance with the Securities Act and the Rules and Regulations and will in
all material respects conform to the requirements of the Securities Act and
the Rules and Regulations, and neither the Registration Statement nor the
Final Prospectus, nor any amendment or supplement thereto, will include as of
such dates any 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 in which they were made,
not misleading.
4.6 ABSENCE OF CERTAIN CHANGES. Except as contemplated in the
Registration Statement, subsequent to the respective dates as of which
information is given in the Registration Statement, the Company has not
incurred any direct or, to the best of the Company's knowledge, contingent
material liabilities or material obligations, or entered into any material
transactions or contracts, not in the ordinary course of business, and there
has not been any material increase or decrease in any thereof or in any debt,
except pursuant to the terms of the instruments governing the same, or any
material adverse change in the present or, the Company's best knowledge,
prospective, general affairs, business, management, or financial condition of
the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MEDTRONIC
Medtronic represents and warrants to the Company as follows:
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5.1 PURCHASE OF SHARES. Medtronic is an "accredited investor" within the
meaning of Rule 501 under the Securities Act and was not organized for the
specific purpose of acquiring the Shares. Medtronic has sufficient knowledge
and experience in investing in companies similar to the Company in terms of the
Company's stage of development so as to be able to evaluate the risks and merits
of Medtronic's investment in the Company and Medtronic is able financially to
bear the risks thereof. Medtronic, in its capacity as a shareholder of the
Company and through its representative on the Company's Board of Directors, has
received copies of the Registration Statement, and all amendments thereto, and
the Preliminary Prospectus, and has had an opportunity to discuss the Company's
business, management and financial affairs with the Company's management. The
Shares are being acquired for Medtronic's own account for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof. Medtronic understands that (i) the Shares have not been
registered under the Securities Act by reason of their issuance in a transaction
exempt from the registration requirements of the Securities Act pursuant to
Section 4(2) thereof or Regulation D promulgated under the Securities Act, (ii)
the Shares must be held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration, (iii)
the Shares will bear a legend to such effect and (iv) the Company will make a
notation on its transfer books to such effect.
5.2 CORPORATE AUTHORITY. The execution, delivery and performance by
Medtronic of this Agreement and the transactions contemplated hereby has been
duly and validly authorized and approved by all requisite corporate action on
the part of Medtronic, and the execution and the delivery of this Agreement and
consummation of the transactions contemplated hereby and compliance with and
fulfillment of the terms and provisions hereof will not (i) conflict with or
result in a breach of the terms, conditions or provisions of or constitute a
default under the Articles of Incorporation or Bylaws of Medtronic, or (ii)
require any affirmative approval, consent, authorization or other order or
action of any court, governmental authority, regulatory body, creditor or any
other person. Medtronic has all requisite power and authority to do and perform
all acts and things required to be done by it under this Agreement and the
agreements contemplated hereby. This Agreement constitutes the valid and
binding obligation of Medtronic enforceable in accordance with their terms
except as may be limited by laws affecting creditors' rights generally or by
judicial limitations on the right to specific performance.
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ARTICLE VI
RESTRICTIONS ON TRANSFER, REGISTRATION RIGHTS
6.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all or any
portion of the Shares (excluding Shares that are no longer Registrable
Securities by reason of having been sold by a person to the public either
pursuant to a registration statement or Rule 144 under the Securities Act
or sold in a private transaction in which the transferror's rights under
Article VI of this Agreement are not assigned) unless and until the
transferee has agreed in writing for the benefit of the Company to be
bound by this Article VI, provided and to the extent this Article is then
applicable and:
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(ii) (A) Such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed
disposition, and (B) if requested by the Company, such Holder shall
have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require
registration of such shares under the Securities Act. It is agreed
that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
(iii) Notwithstanding the provisions of clauses (i) and (ii)
above, no such registration statement or opinion of counsel shall be
necessary for a transfer by a Holder which is (A) a partnership to its
partners in accordance with partnership interests, or (B) to the
Holder's family member or trust for the benefit of an individual
Holder, provided the transferee will be subject to the terms of this
Section 6.1 to the same extent as if he were an original Holder
hereunder.
(b) Each certificate representing the Shares or Registrable
Securities shall (unless otherwise permitted by the provisions of the
Agreement) be stamped or otherwise imprinted with a legend substantially
similar to the following (in addition to any legend required under
applicable state securities laws or as provided elsewhere in the
Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL OR
BASED ON OTHER WRITTEN
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EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
IN COMPLIANCE THEREWITH.
(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the
securities proposed to be disposed of may lawfully be so disposed of
without registration, qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
6.2 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 6.2, if the Company
shall receive at any time after the date hereof, a written request from
Initiating Holders that the Company file a registration statement under the
Securities Act covering the registration of Registrable Securities having
an aggregate offering price to the public in excess of $2,000,000, then the
Company shall, within thirty (30) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of
Section 6.2(b), effect, as soon as practicable, the registration under the
Securities Act of all Registrable Securities that the Holders request to be
registered.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall
so advise the Company as a part of their request made pursuant to this
Section 6.2 and the Company shall include such information in the written
notice referred to in Section 6.2(a). In such event, the right of any
Holder to include his Registrable Securities in such registration 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. All
Holders proposing to distribute their securities through such underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders (which underwriter or underwriters shall
be reasonably acceptable to the Company). Notwithstanding any other
provision of this Section 6.2, if the
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underwriter advises the Company in writing that marketing factors require a
limitation of the number of securities to be underwritten (including
Registrable Securities) then the Company shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant
hereto, and the number of shares that may be included in the underwriting
shall be allocated to the Holders of such Registrable Securities on a pro
rata basis based on the number of Registrable Securities held by all
Holders participating in the related registration (including the Initiating
Holders). Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(c) The Company shall not be obligated to effect more than two (2)
registrations pursuant to this Section 6.2.
6.3 PIGGYBACK REGISTRATIONS.
(a) The Company shall notify all Holders of Registrable Securities in
writing at least thirty (30) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company,
but excluding registration statements relating to employee benefit plans
and corporate reorganizations) and will afford each such Holder an
opportunity to include in such registration statement all or part of such
Registrable Securities held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the
Registrable Securities held by it shall, within twenty (20) days after
receipt of the above-described notice from the Company, so notify the
Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities by such Holder. If a Holder of
Registrable Securities decides not to include all of its Registrable
Securities in any registration statement thereafter filed by the Company,
such Holder shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth
herein.
(b) If the registration statement under which the Company gives
notice under this Section 6.3 is for an underwritten offering, the Company
shall so advise the Holders of Registrable Securities. In such event, the
right
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of any such Holder to be included in a registration pursuant to this
Section 6.3 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 Registrable Securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriter
or underwriters selected for such underwriting. Notwithstanding any other
provisions of this Agreement, if the underwriter determines in good faith
that marketing factors require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the underwriting
shall be allocated, first, to the Company; second, to the Holders on a pro
rata basis based on the total number of Registrable Securities held by such
Holders; and third, to any shareholder of the Company (other than a Holder)
on a pro rata basis. No such reduction shall reduce the securities being
offered by the Company for its own account to be included in the
registration and underwriting, except that in no event shall the amount of
securities of the selling Holders included in he registration be reduced
below twenty-five percent (25%) of the total amount of securities included
in such registration. In no event will shares of any other selling
shareholder be included in such registration which would reduce the number
of shares which may be included by Holders without the written consent of
such Holders of not less than seventy percent (70%) of the Registrable
Securities proposed to be sold in the offering.
6.4 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of Registrable Securities a written request or requests that
the Company effect the registration under the Securities Act, and any related
qualification or compliance with respect to, all or a part of the Registrable
Securities owned by such Holder or Holders by the filing with the SEC of a
registration statement on Form S-3 covering such Registrable Securities, the
Company will:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders of
Registrable Securities; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within fifteen (15) days after receipt of such
written notice from the Company; provided, however, that the Company shall
not be obligated to effect any such registration, qualification or
compliance pursuant to this Section 6.4: (i) if
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Form S-3 under the Securities Act is not available for such offering by the
Holders, (ii) 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 of less than $500,000, (iii) if the
Company shall furnish to the Holders a certificate signed by the Chief
Executive Officer stating that in the good faith judgment of the Board, it
would be seriously detrimental to the Company and its shareholders for such
registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the Form S-3 registration statement
for a period of not more than one hundred twenty (120) days after receipt
of the request of the Holder or Holders under this Section 6.4, (iv) if the
Company has already effected two (2) registrations for the Holders pursuant
to this Section 6.4, or (v) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification
or compliance.
(c) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after
receipt of the request or requests of the Holders.
6.5 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Section 6.2 or any registration under Section 6.3 or Section 6.4 shall be borne
by the Company. All Selling Expenses incurred in connection with any such
registration shall be borne by the holders of the securities so registered pro
rata on the basis of the number of shares so registered. The Company shall not,
however, be required to pay for expenses of any registration proceeding begun
pursuant to Section 6.2 or Section 6.4, the request of which has been
subsequently withdrawn by the Initiating Holders unless (a) the withdrawal is
based upon material adverse information concerning the Company of which the
Company was aware but the Initiating Holders were not aware at the time of such
request or (b) the Holders of a majority of Registrable Securities agree to
forfeit their right to one requested registration pursuant to Section 6.2 or
Section 6.4 (in which event such right shall be forfeited by all Holders). If
the Holders are required to pay the Registration Expenses, such expenses shall
be borne by the holders of securities (including Registrable Securities)
requesting such registration in proportion to the number of shares for which
registration was requested. If the Company is required to pay the Registration
Expenses of a withdrawn offering pursuant to Section 6.5, then the Holders shall
not forfeit their rights pursuant to Section 6.2 or Section 6.4 to a demand
registration.
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6.6 OBLIGATIONS OF THE COMPANY. Whenever required 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 on Form S-
3 (or such other Form as is then available to the Company in connection
with such registration) with respect to such Registrable Securities and use
its 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 one year.
(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 number 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(s) of such offering. Each
Holder participating is 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.
-15-
(g) Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities
are being sold through underwriters, or, if such securities are not being
sold through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated as of
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 and reasonably satisfactory to a
majority in interest of the Holders requesting registration, addressed to
the underwriters, if any, and to the Holders requesting registration of
Registrable Securities and (ii) a letter dated as of such date, from the
independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
6.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Article VI shall terminate and be of no further force and effect five
(5) years after the date following the Closing Date.
6.8 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 Article VI.
6.9 INDEMNIFICATION. In the event any Registrable Securities are included
in a registration statement under Sections 6.2; 6.3 or 6.4:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers and directors of each
Holder and each person, if any, 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) to which they may become subject
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 (collectively a "Violation") by the
Company: (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, or
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(iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any 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, or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided however, that
the indemnity agreement contained in this Section 6.9(a) shall 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 Company
(which consent shall not be unreasonably withheld), nor shall the Company
be liable in any such case for any such loss, claim, damage, liability or
action to the extent that it arises out of or is based upon a Violation
which 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) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers, each person, if any, who controls the Company within the meaning
of the Securities 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, against any losses,
claims, damages or liabilities (joint or several) to which the Company or
any such director, officer, controlling person, or other such Holder, or
partner, director, officer or controlling person of such other Holder may
become subject 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 and stated to be specifically 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 if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in
this Section 6.9(b) shall 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 shall not be
unreasonably withheld; provided further that in no event shall any
indemnity under this Section
-17-
6.9(b) exceed the gross proceeds from the offering received by such Holder
unless the Violation is the result of fraud on the part of such Holder.
(c) Promptly after receipt by an indemnified party under this Section
6.9 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section 6.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall 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; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party provided however,
that if there is more than one indemnified party, the indemnifying party
shall pay for 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 such 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 such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability
to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 6.9, 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 6.9.
(d) If the indemnification provided for in this Section 6.9 is held
by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred
to herein, the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
Violation(s) that resulted in such loss, claim, damage or liability, as
well as any other relevant equitable considerations. The relative fault of
the indemnifying party and of the indemnified party shall be determined by
a court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or
by the indemnified party and the
-18-
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(e) The foregoing indemnity agreements of the Company and Holders 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 final prospectus filed with the SEC
pursuant to SEC Rule 424(b), such indemnity agreement shall 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.
(f) The obligations of the Company and Holders under this Section 6.9
shall survive the completion of any offering of Registrable Securities in a
registration statement, and otherwise.
6.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register Registrable Securities pursuant to this Article VI may be assigned by a
Holder to a transferee or assignee of Registrable Securities; provided, however,
that no such transferee or assignee shall be entitled to registration rights
under this Article VI hereof unless it acquires at least fifty thousand (50,000)
shares of Registrable Securities (as adjusted for stock splits and combinations)
and the Company shall, within twenty (20) days after such transfer, be furnished
with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being
assigned; provided, however, that a Holder's failure to provide such notice to
the Company shall not in any way impair a Holder's right to make an assignment
under this Section 6.10, but until such notice is provided the Company may
continue to treat the original Holder (and not the Holder's assignee) as the
Holder of the registration rights. Notwithstanding the foregoing, rights to
cause the Company to register securities may be assigned to any person or entity
who is a subsidiary, parent, general partner or limited partner of a Holder
regardless of the number of shares transferred to such person or entity.
6.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Article VI
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 the Company and the Holders of at least seventy percent (70%)
of the Registrable Securities. Any amendment or waiver effected in accordance
with this Section 6.11 shall be binding upon each Holder and the Company. By
acceptance of any benefits under this Article VI, Holders of Registrable
Securities hereby agree to be bound by the provisions hereunder.
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6.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. From and after the date
of this Agreement, the Company shall not, without the prior written consent of
the Holders of at least a majority of the outstanding Registrable Securities,
enter into any agreement with any person or persons providing for the granting
to such holder of registration rights pari passu or senior to those granted to
Holders pursuant to this Article VI, or of registration rights which might cause
a reduction in the number of shares includable by the Holders in any offering
pursuant to Section 6.2 or in any offering subject to Section 6.3.
6.13 REGISTRATION RIGHTS SEPARATE FROM OTHER REGISTRATION RIGHTS. The
registration rights granted to any Holder hereunder shall be deemed to be
separate and distinct from any other registration rights (the "Other
Registration Rights") granted by the Company to any such Holders or any other
holder of the Company's securities, including without limitation, registration
rights granted by the Company to holders of its securities pursuant to the
Investment Agreement or the Investors' Rights Agreement. In addition, any
registration of Registrable Securities pursuant to the rights granted hereunder
shall not affect the rights of any Holder or any other person under the Other
Registration Rights, and any registration of the Company's securities under the
Other Registration Rights shall not affect the rights of any Holder of
Registrable Securities hereunder.
ARTICLE VII
INDEMNIFICATION
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7.1 INDEMNIFICATION OF MEDTRONIC. The Company shall indemnify, defend and
hold harmless Medtronic and each of its subsidiaries, officers, directors and
stockholders (Medtronic and such other indemnitees referred to in this Article
VII as "Medtronic") from and against and in respect of any and all demands,
claims, actions or causes of action, assessments, losses, damages, liabilities,
interest and penalties, costs and expenses (including, without limitation,
reasonable legal fees and disbursements incurred in connection therewith and in
seeking indemnification therefor, and any amounts or expenses required to be
paid or incurred in connection with any action, suit, proceeding, claim, appeal,
demand, assessment or judgment) ("Indemnifiable Losses"), resulting from,
arising out of, or imposed upon or incurred by any person to be indemnified
hereunder by reason of any breach of any representation, warranty, covenant or
agreement of the Company contained in this Agreement or any agreement,
certificate or document executed and delivered by the Company pursuant hereto or
in connection with any of the transactions contemplated by this Agreement.
7.2 INDEMNIFICATION OF THE COMPANY. Medtronic shall indemnify, defend and
hold harmless the Company and each of its subsidiaries, officers, directors and
stockholders (the Company and such other indemnitees referred to in this Article
VII as the "Company") from and against and in respect of any and all demands,
claims, actions or causes of action, assessments, losses, damages, liabilities,
interest and penalties, costs and expenses (including, without limitation,
reasonable legal fees and disbursements incurred in connection therewith and in
seeking indemnification therefor, and any amounts or expenses required to be
paid or incurred in connection with any action, suit, proceeding, claim, appeal,
demand, assessment or judgment), resulting from, arising out of, or imposed upon
or incurred by any person to be indemnified hereunder by reason of any breach of
any representation, warranty, covenant or agreement of Medtronic contained in
this Agreement or any agreement, certificate or document executed and delivered
by Medtronic pursuant hereto or in connection with the transactions contemplated
by this Agreement.
7.3 THIRD-PARTY CLAIMS. If a claim by a third party is made against an
indemnified party and if the indemnified party intends to seek indemnity with
respect thereto under this Article VII, such indemnified party shall promptly
notify the indemnifying party of such claim; provided, however, that failure to
give timely notice shall not affect the rights of the indemnified party so long
as the failure to give timely notice does not adversely affect the indemnifying
party's ability to defend such claim against a third party. The indemnified
party shall not settle such claim without the consent of the indemnifying party,
which consent shall not be unreasonably withheld or delayed. If the
indemnifying party acknowledges in writing its indemnity obligations for
Indemnifiable Losses resulting therefrom, the indemnifying party may participate
at its own cost and expense in the settlement or
-21-
defense of any claim for which indemnification is sought; PROVIDED THAT such
settlement or defense shall be controlled by the indemnified party.
7.4 COOPERATION AS TO INDEMNIFIED LIABILITY. Each party hereto shall
cooperate fully with the other parties with respect to access to books, records,
or other documentation within such party's control, if deemed reasonably
necessary or appropriate by any party in the defense of any claim which may give
rise to indemnification hereunder.
ARTICLE VIII
OTHER PROVISIONS
8.1 FURTHER ASSURANCES. At such time and from time to time on and after
the date hereof upon request by Medtronic, the Company will execute, acknowledge
and deliver, or will cause to be done, executed, acknowledged and delivered, all
such further acts, certificates and assurances that may be required for the
better conveying, transferring, assigning, delivering, assuring and confirming
to Medtronic, or to its respective successors and assigns, all of the Shares or
to otherwise carry out the purposes of this Agreement.
8.2 COMPLETE AGREEMENT. The schedules and exhibits to this Agreement
shall be construed as an integral part of this Agreement to the same extent as
if they had been set forth verbatim herein. This Agreement and the schedules
and exhibits hereto constitute the entire agreement between the parties hereto
with respect to the subject matter hereof and supersede all prior agreements
whether written or oral relating hereto.
8.3 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations, warranties, covenants and agreements contained herein shall
survive the purchase of the Shares and remain in full force and effect. No
independent investigation of the Company by Medtronic, its counsel, or any of
its agents or employees shall in any way limit or restrict the scope of the
representations and warranties made by the Company in this Agreement.
8.4 WAIVER, DISCHARGE, AMENDMENT, ETC. The failure of any party hereto to
enforce at any time any of the provisions of this Agreement shall not, absent an
express written waiver signed by the party making such waiver specifying the
provision being waived, be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or any part thereof or the
right of the party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to be a waiver of any other
or subsequent breach. This Agreement may be amended by the Company and
Medtronic, by mutual action approved by their respective Boards of Directors or
their respective
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officers authorized by such Board of Directors, at any time prior to the Closing
Date. Any amendment to this Agreement shall be in writing and signed by the
Company and Medtronic.
8.5 NOTICES. All notices or other communications to a party required or
permitted hereunder shall be in writing and shall be delivered personally or by
telecopy (receipt confirmed) to such party (or, in the case of an entity, to an
executive officer of such party) or shall be sent by a reputable express
delivery service or by certified mail, postage prepaid with return receipt
requested, addressed as follows:
if to Medtronic to:
Medtronic Asset Management, Inc.
Corporate Center
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice President Corporate Development
and Associate General Counsel
FAX (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company to:
Endocardial Solutions, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President and Chief Executive Officer
FAX (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change the above-specified recipient and/or mailing address
by notice to all other parties given in the manner herein prescribed. All
notices shall be deemed given on the day when actually delivered as provided
above (if delivered personally or by telecopy) or on the day shown on the return
receipt (if delivered by mail or delivery service).
8.6 PUBLIC ANNOUNCEMENT. In the event any party proposes to issue any
press release or public announcement concerning any provisions of this Agreement
or the transactions contemplated hereby, such party shall so advise the other
parties hereto, and the parties shall thereafter use their best efforts to cause
a mutually agreeable release or announcement to be issued. Neither party will
publicly disclose or divulge any provisions of this Agreement or the
transactions contemplated hereby without the other parties' written consent,
except as may be required by
-23-
applicable law or stock exchange regulation, and except for communications to
employees.
8.7 EXPENSES. Except as otherwise provided in this Agreement, the
Company and Medtronic shall each pay their own expenses incident to this
Agreement and the preparation for, and consummation of, the transactions
provided for herein.
8.8 GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Minnesota, including all matters of
construction, validity, performance and enforcement, without giving effect to
principles of conflict of laws.
8.9 TITLES AND HEADINGS; CONSTRUCTION. The titles and headings to the
Articles and Sections herein are inserted for the convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement. This Agreement shall be construed without regard to any
presumption or other rule requiring construction hereof against the party
causing this Agreement to be drafted.
8.10 BENEFIT. Nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties hereto or their respective
successors or assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement.
8.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed as original and all of which
together shall constitute one instrument.
8.12 PARTIES IN INTEREST. All representations, covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed as of the date first written above.
ENDOCARDIAL SOLUTIONS, INC.
By
-------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:President and Chief
Executive Officer
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MEDTRONIC ASSET MANAGEMENT, INC.
By
------------------------
Name:
Title:
-25-
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Specific Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Definitional Provisions . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
PURCHASE OF COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Purchase and Sale of Shares . . . . . . . . . . . . . . . . . . . 4
2.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Conditions of Obligation of Medtronic . . . . . . . . . . . . . . 5
3.2 Conditions of Obligation of the Company . . . . . . . . . . . . . 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . 6
4.1 Organization, Qualifications and Corporate Power . . . . . . . . . 6
4.2 Authorization of Agreement, Etc . . . . . . . . . . . . . . . . . 7
4.3 Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.4 Registration Statement . . . . . . . . . . . . . . . . . . . . . . 7
4.5 No Stop Order; Errors and Omissions . . . . . . . . . . . . . . . 8
4.6 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . 8
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MEDTRONIC . . . . . . . . . . . . . . 8
5.1 Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI
RESTRICTIONS ON TRANSFER, REGISTRATION RIGHTS . . . . . . . . . . . . . 9
6.1 Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . 9
6.2 Demand Registration . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Piggyback Registrations . . . . . . . . . . . . . . . . . . . . . 12
6.4 Form S-3 Registration . . . . . . . . . . . . . . . . . . . . . . 13
6.5 Expenses of Registration . . . . . . . . . . . . . . . . . . . . . 14
6.6 Obligations of the Company . . . . . . . . . . . . . . . . . . . . 14
6.7 Termination of Registration Rights . . . . . . . . . . . . . . . . 16
6.8 Delay of Registration . . . . . . . . . . . . . . . . . . . . . . 16
6.9 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.10 Assignment of Registration Rights . . . . . . . . . . . . . . . . 19
i
6.11 Amendment of Registration Rights . . . . . . . . . . . . . . . . . 19
6.12 Limitation on Subsequent Registration Rights . . . . . . . . . . . 19
6.13 Registration Rights Separate from Other Registration Rights . . . 20
ARTICLE VII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.1 Indemnification of Medtronic . . . . . . . . . . . . . . . . . . . 20
7.2 Indemnification of the Company . . . . . . . . . . . . . . . . . . 21
7.3 Third-Party Claims . . . . . . . . . . . . . . . . . . . . . . . . 21
7.4 Cooperation as to Indemnified Liability . . . . . . . . . . . . . 21
ARTICLE VIII
OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 22
8.2 Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . 22
8.3 Survival of Representations, Warranties and Agreements . . . . . . 22
8.4 Waiver, Discharge, Amendment, Etc . . . . . . . . . . . . . . . . 22
8.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.6 Public Announcement . . . . . . . . . . . . . . . . . . . . . . . 23
8.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.9 Titles and Headings; Construction . . . . . . . . . . . . . . . . 24
8.10 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.12 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . 24
