Minnesota
(State or other jurisdiction of incorporation or organization) |
3841
(Primary Standard Industrial Classification Code Number) |
41-1698056
(I.R.S. Employer Identification No.) |
Robert K. Ranum, Esq.
Alexander Rosenstein, Esq. Fredrikson & Byron, P.A. 200 South Sixth Street, Suite 4000 Minneapolis, Minnesota 55402 (612) 492-7000 |
Alan F. Denenberg, Esq.
Davis Polk & Wardwell 1600 El Camino Real Menlo Park, California 94025 (650) 752-2000 |
Proposed Maximum
|
Amount of
|
|||||||||
Title of Each Class of
|
Aggregate
|
Registration
|
||||||||
Securities to be Registered | Offering Price (1)(2) | Fee | ||||||||
Common stock, no par value per share
|
$ | 86,250,000 | $ | 3,390 | ||||||
(1) | Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(o) under the Securities Act. | |
(2) | Includes shares of common stock that the underwriters have an option to purchase to cover over-allotments, if any. |
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. The prospectus is not an offer to sell securities and
it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
|
Per Share | Total | |||||||
Initial public offering price
|
$ | $ | ||||||
Underwriting discounts
|
$ | $ | ||||||
Proceeds, before expenses, to Cardiovascular Systems, Inc.
|
$ | $ |
Morgan Stanley | Citi |
Table of Contents
ii
Table of Contents
1
Table of Contents
difficulty treating calcified lesions, diffuse disease and
lesions below the knee;
potential safety concerns relating to damage of the arterial
wall;
the inability to create lumens larger than the catheter itself
in a single insertion;
the creation of rough, uneven lumens with deep grooves;
the potential requirement for greater physician skill,
specialized technique or multiple operators to deliver the
catheter and remove plaque;
the potential requirement for reservoirs or aspiration to
capture and remove plaque;
the potential need for ancillary distal embolization protection
devices to prevent large particles of dislodged plaque from
causing distal embolisms or blockages downstream;
the potential requirement for large, expensive capital equipment
used in conjunction with the procedure; and
the potential requirement for extensive use of fluoroscopy and
increased emitted radiation exposure for physicians and patients
during the procedure.
Strong Safety Profile.
The differential
sanding of the device reduces the risk of arterial perforation
and damage to the arterial wall. Moreover, the plaque particles
sanded away by the device are so small that they reduce the risk
of distal embolization and allow continuous blood flow during
the entire procedure, which reduces the risk of complications
such as excessive heat and tissue damage.
Proven Efficacy.
The orbital motion of the
device enables the continuous removal of plaque in both soft and
calcified lesions, increasing blood flow through the resulting
smooth lumen. The efficacy of the device was demonstrated in our
pivotal OASIS trial.
2
Table of Contents
Ease of Use.
Utilizing familiar techniques, a
physician trained in endovascular surgery can complete the
treatment with a single insertion while utilizing limited
amounts of fluoroscopy during plaque removal.
Cost and Time Efficient Procedure.
The
Diamondback 360° can create various lumen sizes using a
single sized crown, which limits hospital inventory costs and
allows a physician to complete a procedure with a single
insertion, potentially reducing procedural time. Use of the
Diamondback 360° may also require less expensive capital
equipment than other atherectomy procedures.
driving device adoption with key opinion leaders through our
direct sales organization;
collecting additional clinical evidence of the benefits of the
Diamondback 360°;
expanding our product portfolio within the peripheral market;
increasing referrals to interventional cardiologists and
radiologists through practice development programs or referral
physician education;
leveraging core technology into the coronary market; and
pursuing strategic acquisitions and partnerships.
3
Table of Contents
Common stock offered by us
Shares
Common stock to be outstanding after this offering
Shares
Use of proceeds
We intend to use the net proceeds from this offering for working
capital and general corporate purposes. See Use of
Proceeds.
Risk Factors
You should read the Risk Factors section of this
prospectus for a discussion of factors to consider carefully
before deciding to invest in shares of our common stock.
Proposed Nasdaq Global Market symbol
CSII
4,930,361 shares of common stock issuable upon the exercise
of outstanding stock options at a weighted average exercise
price of $6.08 per share;
1,035,413 shares of common stock issuable upon the exercise
of outstanding warrants at a weighted average exercise price of
$5.50 per share; and
1,865,745 additional shares of common stock reserved and
available for future issuances under our 2007 Equity Incentive
Plan.
the conversion of all our outstanding shares of preferred stock
upon the closing of this offering into 9,088,136 shares of
common stock and the conversion of all of our outstanding
warrants to purchase preferred stock upon the closing of this
offering into warrants to purchase 662,439 shares of common
stock and no exercise of such warrants; and
no exercise of the underwriters over-allotment option.
4
Table of Contents
Three Months Ended
Years Ended June 30,
September 30,
2005
2006
2007
(1)
2006
(1)
2007
(1)
(in thousands, except share and per share amounts)
$
$
$
$
$
539
(539
)
1,177
1,735
6,691
823
3,552
2,371
3,168
8,446
749
3,328
3,548
4,903
15,137
1,572
6,880
(3,548
)
(4,903
)
(15,137
)
(1,572
)
(7,419
)
(48
)
(1,340
)
(13
)
(300
)
37
56
881
256
278
37
8
(459
)
243
(22
)
(3,511
)
(4,895
)
(15,596
)
(1,329
)
(7,441
)
(16,835
)
(3,878
)
(4,853
)
$
(3,511
)
$
(4,895
)
$
(32,431
)
$
(5,207
)
$
(12,294
)
$
(0.61
)
$
(0.79
)
$
(5.22
)
$
(0.84
)
$
(1.95
)
5,779,942
6,183,715
6,214,820
6,199,204
6,291,512
5
Table of Contents
(1)
Operating expenses in the year
ended June 30, 2007 and the three months ended
September 30, 2006 and 2007 include stock based
compensation expense as a result of the adoption of Financial
Accounting Standards Board (FASB) Statement of Accounting
Standards (SFAS) No. 123(R),
Share-Based Payment
on
July 1, 2006, as follows:
Year Ended
Three Months Ended
June 30,
September 30,
2007
2006
2007
(in thousands)
$
327
$
9
$
277
63
2
73
(2)
See Notes 1 and 9 of the notes
to our consolidated financial statements for discussion of the
accretion of redeemable convertible preferred stock.
(3)
See Note 11 of the notes to
our consolidated financial statements for a description of the
method used to compute basic and diluted net loss per common
share and basic and diluted weighted-average number of shares
used in pro forma per common share calculations.
As of September 30, 2007
Pro Forma
Actual
Pro
Forma
(1)
as
Adjusted
(2)
(in thousands)
$
3,265
$
3,265
$
18,499
18,499
21,695
21,695
25,973
25,973
27,316
27,316
3,394
7,760
4,366
63,637
(44,081
)
42,900
(1)
On a pro forma basis to reflect the
adoption of our amended and restated articles of incorporation,
the issuance of 2,162,150 shares of Series B
convertible preferred stock on December 17, 2007, and the
conversion of all our outstanding shares of preferred stock into
shares of common stock upon the closing of this offering and the
conversion of Series A convertible preferred stock warrants
into common stock warrants.
(2)
On a pro forma as adjusted basis to
further reflect the receipt of the estimated net proceeds from
the sale
of shares
of common stock in this offering at an assumed initial public
offering price of $ per share, the
midpoint of the range on the cover page of this prospectus,
after deducting underwriting discounts and commissions and
estimated offering expenses payable by us. A $1.00 increase
(decrease) in the assumed initial public offering price of
$ per share would increase
(decrease) cash, cash equivalents and short-term investments,
working capital, total assets and total shareholders
(deficiency) equity by
$ million, assuming that the
number of shares offered by us, as set forth on the cover page
of this prospectus, remains the same and after deducting
underwriting discounts and commissions.
(3)
Working capital is calculated as
total current assets less total current liabilities as of the
balance sheet indicated.
6
Table of Contents
7
Table of Contents
the actual and perceived effectiveness and reliability of our
products;
the prevalence and severity of any adverse patient events
involving our products, including infection, perforation or
dissection of the artery wall, internal bleeding, limb loss and
death;
the results of any long-term clinical trials relating to use of
our products;
the availability, relative cost and perceived advantages and
disadvantages of alternative technologies or treatment methods
for conditions treated by our systems;
the degree to which treatments using our products are approved
for reimbursement by public and private insurers;
the strength of our marketing and distribution
infrastructure; and
the level of education and awareness among physicians and
hospitals concerning our products.
8
Table of Contents
9
Table of Contents
develop and patent processes or products earlier than us;
obtain regulatory clearances or approvals for competing medical
device products more rapidly than us;
market their products more effectively than us; or
develop more effective or less expensive products or
technologies that render our technology or products obsolete or
non-competitive.
10
Table of Contents
interruption of supply resulting from modifications to, or
discontinuation of, a suppliers operations;
delays in product shipments resulting from defects, reliability
issues or changes in components from suppliers;
price fluctuations due to a lack of long-term supply
arrangements for key components with our suppliers;
our suppliers may make errors in manufacturing components, which
could negatively affect the efficacy or safety of our products
or cause delays in shipment of our products;
our suppliers may discontinue production of components, which
could significantly delay our production and sales and impair
operating margins;
we may not be able to obtain adequate supplies in a timely
manner or on commercially acceptable terms;
we may have difficulty locating and qualifying alternative
suppliers for our sole-source supplies;
switching components may require product redesign and new
regulatory submissions, either of which could significantly
delay production and sales;
we may experience production delays related to the evaluation
and testing of products from alternative suppliers and
corresponding regulatory qualifications;
our suppliers manufacture products for a range of customers, and
fluctuations in demand for the products these suppliers
manufacture for others may affect their ability to deliver
components to us in a timely manner; and
our suppliers may encounter financial hardships unrelated to our
demand for components, which could inhibit their ability to
fulfill our orders and meet our requirements.
11
Table of Contents
the costs of expanding our sales and marketing infrastructure
and our manufacturing operations;
the degree of success we experience in commercializing the
Diamondback 360°;
the number and types of future products we develop and
commercialize;
the costs, timing and outcomes of regulatory reviews associated
with our future product candidates;
12
Table of Contents
the costs of preparing, filing and prosecuting patent
applications and maintaining, enforcing and defending
intellectual property-related claims; and
the extent and scope of our general and administrative expenses.
13
Table of Contents
14
Table of Contents
failure to obtain approval from the FDA or any foreign
regulatory authority to commence an investigational study;
conditions imposed on us by the FDA or any foreign regulatory
authority regarding the scope or design of our clinical trials;
delays in obtaining or maintaining required approvals from
institutional review boards or other reviewing entities at
clinical sites selected for participation in our clinical trials;
insufficient supply of our future product candidates or other
materials necessary to conduct our clinical trials;
difficulties in enrolling patients in our clinical trials;
negative or inconclusive results from clinical trials, results
that are inconsistent with earlier results, or the likelihood
that the part of the human anatomy involved is more prone to
serious adverse events, necessitating additional clinical trials;
serious or unexpected side effects experienced by patients who
use our future product candidates; or
failure by any of our third-party contractors or investigators
to comply with regulatory requirements or meet other contractual
obligations in a timely manner.
15
Table of Contents
warning letters or untitled letters from the FDA;
fines, injunctions and civil penalties;
product recall or seizure;
unanticipated expenditures;
delays in clearing or approving or refusal to clear or approve
products;
withdrawal or suspension of approval or clearance by the FDA or
other regulatory bodies;
orders for physician notification or device repair, replacement
or refund;
operating restrictions, partial suspension or total shutdown of
production or clinical trials; and
criminal prosecution.
16
Table of Contents
17
Table of Contents
18
Table of Contents
19
Table of Contents
20
Table of Contents
our ability to develop, obtain regulatory clearances or
approvals for and market new and enhanced products on a timely
basis;
changes in governmental regulations or in the status of our
regulatory approvals, clearances or future applications;
our announcements or our competitors announcements
regarding new products, product enhancements, significant
contracts, number of hospitals and physicians using our
products, acquisitions or strategic investments;
announcements of technological or medical innovations for the
treatment of vascular disease;
delays or other problems with the manufacturing of the
Diamondback 360°;
volume and timing of orders for the Diamondback 360° and
any future products, if and when commercialized;
changes in the availability of third-party reimbursement in the
United States and other countries;
quarterly variations in our or our competitors results of
operations;
changes in earnings estimates or recommendations by securities
analysts, if any, who cover our common stock;
failure to meet estimates or recommendations by securities
analysts, if any, who cover our stock;
changes in healthcare policy;
product liability claims or other litigation involving us;
product recalls;
accusations that we have violated a law or regulation;
sales of large blocks of our common stock, including sales by
our executive officers, directors and significant shareholders;
disputes or other developments with respect to intellectual
property rights;
changes in accounting principles; and
general market conditions and other factors, including factors
unrelated to our operating performance or the operating
performance of our competitors.
21
Table of Contents
22
Table of Contents
23
Table of Contents
24
Table of Contents
25
an actual basis;
a pro forma basis to reflect the adoption of our amended and
restated articles of incorporation, the issuance of
2,162,150 shares of Series B convertible preferred
stock on December 17, 2007, the conversion of all our
outstanding shares of preferred stock into shares of common
stock upon the closing of this offering, and the conversion of
all Series A warrants into common stock warrants; and
a pro forma as adjusted basis to further reflect the receipt of
the estimated net proceeds from the sale
of shares
of common stock in this offering at an assumed initial public
offering price of $ per share, the
midpoint of the range on the cover page of this prospectus,
after deducting underwriting discounts and commissions and
estimated offering expenses payable by us.
As of September 30, 2007
Pro Forma
Actual
Pro Forma
as
Adjusted
(1)
(in thousands, except
share and per share data)
$
3,394
$
$
43,503
20,134
26,564
88,463
1,366
3,133
(1
)
(1
)
(72,010
)
(48,695
)
(44,081
)
42,900
$
22,950
$
42,900
$
(1)
A $1.00 increase or decrease in the
assumed initial public offering price would result in an
approximately $ million
increase or decrease in each of pro forma as adjusted additional
paid-in capital, pro forma as adjusted total shareholders
equity and pro forma as adjusted total capitalization, assuming
the number of shares offered by us, as set forth on the cover
page of this prospectus, remains the same and after deducting
underwriting discounts and commission and estimated offering
expenses payable by us.
26
Table of Contents
4,599,361 shares of common stock issuable upon the exercise
of outstanding stock options as of September 30, 2007 at a
weighted average exercise price of $4.95 per share;
1,068,277 shares of common stock issuable upon the exercise
of outstanding warrants at a weighted average exercise price of
$5.47 per share;
242,583 additional shares of common stock reserved and available
for future issuances under our 2003 Stock Option Plan; and
3,000,000 additional shares of common stock reserved and
available for future issuances under our 2007 Equity Incentive
Plan.
27
Table of Contents
Weighted
Shares Purchased
Total Consideration
Average Price
Number
Percent
Amount
Percent
per Share
%
$
%
$
100
%
100
%
28
Table of Contents
4,599,361 shares of common stock issuable upon the exercise
of outstanding stock options as of September 30, 2007 at a
weighted average exercise price of $4.95 per share;
1,068,277 shares of common stock issuable upon the exercise
of outstanding warrants at a weighted average exercise price of
$5.47 per share;
242,583 additional shares of common stock reserved and available
for future issuances under our 2003 Stock Option Plan; and
3,000,000 additional shares of common stock reserved and
available for future issuances under our 2007 Equity Incentive
Plan.
the number of shares of our common stock held by existing
shareholders would decrease to
approximately % of the total number
of shares of our common stock outstanding after this offering;
the number of shares of our common stock held by new investors
would increase to approximately %
of the total number of shares of our common stock outstanding
after this offering; and
our pro forma as adjusted net tangible book value at
September 30, 2007 would have been
$ million, or
$ per share of common stock,
representing an immediate increase in pro forma net tangible
book value of $ per share of
common stock to our existing shareholders and an immediate
dilution of $ per share to
investors purchasing shares in this offering.
29
Table of Contents
Years Ended June 30,
Three Months Ended September 30,
2003
2004
2005
2006
2007
(1)
2006
(1)
2007
(1)
(in thousands, except share and per share amounts)
Operations Data:
$
$
$
$
$
$
$
539
(539
)
829
984
1,177
1,735
6,691
823
3,552
681
3,246
2,371
3,168
8,446
749
3,328
1,510
4,230
3,548
4,903
15,137
1,572
6,880
(1,510
)
(4,230
)
(3,548
)
(4,903
)
(15,137
)
(1,572
)
(7,419
)
(275
)
(48
)
(1,340
)
(13
)
(300
)
10
18
37
56
881
256
278
(265
)
18
37
8
(459
)
243
(22
)
(1,775
)
(4,212
)
(3,511
)
(4,895
)
(15,596
)
(1,329
)
(7,441
)
(16,835
)
(3,878
)
(4,853
)
$
(1,775
)
$
(4,212
)
$
(3,511
)
$
(4,895
)
$
(32,431
)
$
(5,207
)
$
(12,294
)
$
(0.44
)
$
(0.78
)
$
(0.61
)
$
(0.79
)
$
(5.22
)
$
(0.84
)
$
(1.95
)
4,001,111
5,375,795
5,779,942
6,183,715
6,214,820
6,199,204
6,291,512
30
Table of Contents
(1)
Operating expenses in the year
ended June 30, 2007 and three months ended
September 30, 2006 and 2007 include stock-based
compensation expense as a result of the adoption of
SFAS No. 123(R),
Share-Based Payment
on
July 1, 2006, as follows:
Year Ended
Three Months Ended
June 30,
September 30,
2007
2006
2007
(in thousands)
$
327
$
9
$
277
63
2
73
(2)
See Notes 1 and 9 of the notes
to our consolidated financial statements for a discussion of the
accretion of redeemable convertible preferred stock.
(3)
See Note 11 of the notes to
our consolidated financial statements for a description of the
method used to compute basic and diluted net loss per common
share and basic and diluted weighted-average number of shares
used in pro forma per common share calculations.
As of
As of June 30,
September 30,
2003
2004
2005
2006
2007
2007
(in thousands)
$
3,851
$
3,144
$
1,780
$
1,554
$
7,908
$
3,265
11,615
18,499
3,415
2,868
1,349
(1,240
)
18,171
21,695
3,871
3,166
2,116
2,424
20,828
25,973
4,550
4,031
2,874
3,296
22,025
27,316
3,094
3,394
456
298
767
3,723
5,830
7,760
48,498
63,637
4,094
3,733
2,107
(427
)
(32,303
)
(44,081
)
(1)
Working capital is calculated as
total current assets less total current liabilities as of the
balance sheet date indicated.
31
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
32
Table of Contents
33
Table of Contents
our common stocks volatility;
the length of our options lives, which is based on future
exercises and cancellations;
the number of shares of common stock pursuant to which options
which will ultimately be forfeited;
the risk-free rate of return; and
future dividends.
34
Table of Contents
Fair Market Value Per Share
Assigned by Management and
Date of Option Grant
Number of Shares
Exercise Price
Board of Directors
132,000
$
5.71
$
2.43
230,000
5.71
2.43
239,500
5.71
2.43
375,000
5.71
2.58
446,100
5.71
2.79
48,000
5.71
3.58
540,000
5.71
3.58
299,250
5.71
4.63
315,000
5.11
5.95
402,500
5.11
5.95
35
Table of Contents
Series A
Series A-1
Date
Convertible Preferred Stock
Convertible Preferred Stock
$
5.71
$
6.64
7.57
8.50
8.50
9.20
9.20
36
Table of Contents
Years Ended June 30,
Years Ended June 30,
Three Months Ended September 30,
Percent
Percent
Percent
2005
2006
Change
2006
2007
Change
2006
2007
Change
$
$
$
$
$
$
539
(539
)
1,177
1,735
47.4
%
1,735
6,691
285.6
%
823
3,552
331.6
%
2,371
3,168
33.6
3,168
8,446
166.6
749
3,328
344.3
3,548
4,903
38.2
4,903
15,137
208.7
1,572
6,880
337.7
(3,548
)
(4,903
)
38.2
(4,903
)
(15,137
)
208.7
(1,572
)
(7,419
)
371.9
(48
)
0
(48
)
(1,340
)
2,691.7
(13
)
(300
)
2,207.7
37
56
51.4
56
881
1,473.2
256
278
8.6
37
8
78.3
8
(459
)
5,837.5
243
(22
)
1,090.5
(3,511
)
(4,895
)
39.4
(4,895
)
(15,596
)
218.6
(1,329
)
(7,441
)
459.9
(16,835
)
(3,878
)
(4,853
)
$
(3,511
)
$
(4,895
)
39.4
%
$
(4,895
)
$
(32,431
)
562.5
%
$
(5,207
)
$
(12,294
)
136.1
%
37
Table of Contents
38
Table of Contents
39
Table of Contents
net proceeds from the sale of common stock of $2.3 million
in each of fiscal 2005 and 2006;
issuance of a note payable to a shareholder of $350,000 in
fiscal 2005;
proceeds from the issuance of convertible promissory notes of
$3.1 million in fiscal 2006;
proceeds from the issuance of Series A and
Series A-1
convertible preferred stock of $30.3 million in fiscal 2007
and $20.1 million and $10.3 million in the three
months ended September 30, 2006 and 2007,
respectively; and
issuance of convertible preferred stock warrants of
$1.8 million in fiscal 2007.
repurchase of common stock of $700,000 in fiscal 2005;
repayment of a note payable to a shareholder of $350,000 in
fiscal 2006; and
payment of Series A offering costs of $1.8 million in
the three months ended September 30, 2006.
Payments Due by Period
Less Than
More Than
Contractual Obligations
Total
1 Year
1-3 Years
3-5 Years
5 Years
(in thousands)
$
1,722
$
346
$
733
$
643
$
0
2,122
2,122
$
3,844
$
2,468
$
733
$
643
$
0
(1)
The amounts reflected in the table
above for operating leases represent future minimum payments
under a non-cancellable operating lease for our office and
production facility.
(2)
This amount reflects open purchase
orders.
40
Table of Contents
41
Table of Contents
42
Table of Contents
43
Table of Contents
Surgical Procedures.
Bypass surgery and
amputation are the most common surgical interventions that are
used to treat PAD. In bypass surgery, the surgeon reroutes blood
around a lesion using a vessel from another part of the body or
a tube made of synthetic fabric. Bypass surgery has a high risk
of procedure-related complications from blood loss,
post-procedural infection or reaction to general anesthesia. Due
to these complications, patients may have to remain hospitalized
for several days and are exposed to mortality risk. According to
clinical research published by EuroIntervention in 2005, bypass
surgery has a five year survival rate of 60%. Amputation of all
or a portion of a limb may be necessary as critical limb
ischemia progresses to an advanced state, which results in
approximately 160,000 to 180,000 amputations per year in the
United States, according to an article published in Podiatry
Today in July 2007.
Catheter-Based Interventions.
Minimally
invasive catheter-based interventions include angioplasty,
stenting and atherectomy procedures. Angioplasty involves
inserting a catheter with a balloon tip into the site of
arterial blockage and then inflating the balloon to compress
plaque and expand the artery wall. Stenting involves implanting
and expanding a cylindrical metal tube into the diseased artery
to hold the arterial wall open. Both angioplasty and stenting
can improve blood flow in plaque-lined arteries by opening
lumens and are relatively fast and inexpensive compared to
surgical procedures. However, these techniques are not as
effective in long or calcified lesions or in lesions located
below the knee, nor do they remove any plaque from the artery.
Moreover, most stents are not FDA-approved for use in arteries
in the lower extremities. Additional concerns include the
potential to damage the artery when the balloon is expanded in
angioplasty and the potential for stent fracture during normal
leg movement. Both angioplasty and stenting have also been
associated with high rates of restenosis, or re-narrowing of the
arteries, in the months following the procedure.
44
Table of Contents
potential safety concerns, as these methods of plaque removal do
not always discriminate between compliant arterial tissue and
plaque, thus potentially damaging the arterial wall;
difficulty treating calcified lesions, diffuse disease and
lesions located below the knee;
an inability to create lumens larger than the catheter itself in
a single insertion (resulting in device-to-lumen ratios of 1.00
to 1.00 or worse), necessitating the use of multiple catheters,
which increases the time, complexity and expense of the
procedure;
the creation of rough, uneven lumens with deep grooves, which
may impact blood flow dynamics following the procedure;
the potential requirement for greater physician skill,
specialized technique or multiple operators to deliver the
catheter and remove plaque;
the potential requirement for reservoirs or aspiration to
capture and remove plaque, which often necessitates larger
catheters and adds time, complexity and expense to the procedure;
the potential need for ancillary distal embolization protection
devices to prevent large particles of dislodged plaque from
causing distal embolisms or blockages downstream;
the potential requirement for large, expensive capital equipment
used in conjunction with the procedure; and
the potential requirement for extensive use of fluoroscopy and
increased emitted radiation exposure for physicians and patients
during the procedure.
45
Table of Contents
Differential Sanding Reduces Risk of Adverse
Events.
The Diamondback 360° is designed to
differentiate between plaque and compliant arterial tissue. The
diamond grit coated offset crown engages and removes plaque from
the artery wall with minimal likelihood of penetrating or
damaging the fragile, internal elastic lamina layer of the
arterial wall because compliant tissue flexes away from the
crown. Furthermore, the Diamondback 360° rarely penetrates
even the middle inside layer of the artery and the two elastic
layers that border it. The Diamondback 360°s
perforation rates were 1.6% during our pivotal OASIS trial.
Analysis by an independent pathology laboratory of more than 436
consecutive cross sections of porcine arteries treated with the
Diamondback 360° revealed there was minimal to no damage,
on average, to the medial layer, which is typically associated
with restenosis. In addition, the safety profile of the
Diamondback 360° was found to be non-inferior to that of
angioplasty, which is often considered the safest of
interventional methods. This was demonstrated in our OASIS
trial, which had a 4.8% rate of device-related serious adverse
events, or SAEs, versus an FDA target rate of 8%.
Reduces the Risk of Distal Embolization.
The
Diamondback 360° sands plaque away from artery walls in a
manner that produces particles of such a small size
generally smaller than red blood cells that they are
carried away by the blood stream. The small size of the
particles avoids the need for plaque collection reservoirs on
the catheter and reduces the need for ancillary distal
protection devices, commonly used with directional cutting
atherectomy, and also significantly reduces the risk that larger
pieces of removed plaque will block blood flow downstream.
Allows Continuous Blood Flow During
Procedure.
The Diamondback 360° allows for
continuous blood flow during the procedure, except when used in
chronic total occlusions. Other atherectomy devices may restrict
blood flow due to the size of the catheter required or the use
of distal protection devices, which could result in
complications such as excessive heat and tissue damage.
Efficacy Demonstrated in a 124-Patient Clinical
Trial.
Our pivotal OASIS clinical trial was a
prospective 20-center study that involved 124 patients with
201 lesions and performance targets established cooperatively
with the FDA before the trial began. Despite 55% of the lesions
consisting of calcified plaque and 48% of the lesions having a
length greater than three centimeters, the performance of the
device in the OASIS trial met or outperformed the FDAs
efficacy targets.
Treats Difficult and Calcified Lesions.
The
Diamondback 360° enables physicians to remove plaque from
long, calcified or bifurcated lesions in peripheral arteries
both above and below the knee. Existing PAD devices have
demonstrated limited effectiveness in treating calcified lesions.
Orbital Motion Improves Device-to-Lumen
Ratio.
The orbiting action of the Diamondback
360° can create a lumen of approximately 2.0 times the
diameter of the crown. The variable device-to-lumen ratio allows
the continuous removal of plaque as the opening of the lumen
increases during the operation of the device.
Differential Sanding Creates Smooth
Lumens.
The differential sanding of the
Diamondback 360° creates a smooth surface inside the lumen.
This feature reduces the need to introduce a balloon after
treatment to improve the surface of the artery, which is
commonly done after cutting atherectomy. We believe that the
smooth lumen created by the Diamondback 360° increases the
velocity of blood flow and decreases the resistance to blood
flow which may decrease potential for restenosis, or renarrowing
of the arteries.
Utilizes Familiar Techniques.
Physicians using
the Diamondback 360° employ techniques similar to those
used in angioplasty, which are familiar to interventional
cardiologists, vascular surgeons and interventional radiologists
who are trained in endovascular techniques. The Diamondback
360°s simple user interface
46
Table of Contents
requires minimal additional training and technique. The
systems ability to differentiate between diseased and
compliant tissue reduces the risk of complications associated
with user error and potentially broadens the user population
beyond those currently using atherectomy devices.
Single Insertion to Complete Treatment.
The
Diamondback 360°s orbital technology and differential
sanding process in most cases allows for a single insertion to
treat lesions. Because the particles of plaque sanded away are
of such small sizes, the Diamondback 360° does not require
a collection reservoir that needs to be repeatedly emptied or
cleaned during the procedure. Rather, the Diamondback 360°
allows for multiple passes of the device over the lesion until
plaque is removed and a smooth lumen is created.
Limited Use of Fluoroscopy.
The relative
simplicity of our process and predictable crown location allows
physicians to significantly reduce fluoroscopy use, thus
limiting radiation exposure.
Single Crown Can Create Various Lumen Sizes Limiting Hospital
Inventory Costs.
The Diamondback 360°s
orbital mechanism of action allows a single-sized device to
create various diameter lumens inside the artery. Adjusting the
rotational speed of the crown changes the orbit to create the
desired lumen diameter, thereby potentially avoiding the need to
use multiple catheters of different sizes. The Diamondback
360° can create a lumen that is 100% larger than the actual
diameter of the device, for a device-to-lumen ratio of
approximately 1.0 to 2.0.
Less Expensive Capital Equipment.
The control
unit used in conjunction with the Diamondback 360° has a
current retail list price of $20,000, significantly less than
the cost of capital equipment used with laser atherectomy, which
may cost from $125,000 to more than $150,000.
Single Insertion Reduces Procedural
Time.
Since the physician does not need to insert
and remove multiple catheters or clean a plaque collection
reservoir to complete the procedure, there is a potential for
decreased procedure time.
Drive Adoption with Key Opinion Leaders Through Direct Sales
Organization.
We expect to continue to drive
adoption of the Diamondback 360° through our direct sales
force, which targets interventional cardiologists, vascular
surgeons and interventional radiologists. Initially, we plan to
focus primarily on key opinion leaders who are early adopters of
new technology and can assist in peer-to-peer selling. We
commenced a limited commercial introduction in September 2007
and as of December 17, 2007 had 18 direct sales
representatives. We anticipate broadening our commercialization
efforts and adding additional sales representatives in 2008. As
a key element of our strategy, we focus on educating and
training physicians on the Diamondback 360° through
seminars where industry leaders discuss case studies and
treatment techniques using the Diamondback 360°.
Collect Additional Clinical Evidence on Benefits of the
Diamondback 360°.
We are focused on using
clinical evidence to demonstrate the advantages of our system
and drive physician acceptance. We have conducted three clinical
trials to demonstrate the safety and efficacy of the Diamondback
360° in treating PAD, involving 207 patients,
including our pivotal OASIS trial.
Expand Product Portfolio within Peripheral
Market.
We are currently developing a new product
generation to further reduce treatment times and allow treatment
of larger vessels.
Leverage Technology Platform into Coronary
Market.
We have initiated preclinical studies
investigating the use of the Diamondback 360° in the
treatment of coronary artery disease. We believe that the key
product attributes of the Diamondback 360° will also
provide substantial benefits in treating the coronary arteries,
subject to FDA approval.
47
Table of Contents
Pursue Strategic Acquisitions and
Partnerships.
In addition to adding to our
product portfolio through internal development efforts, we
intend to explore the acquisition of other product lines,
technologies or companies that may leverage our sales force or
complement our strategic objectives. We may also evaluate
distribution agreements, licensing transactions and other
strategic partnerships.
a control handle, which allows precise movement of the crown and
predictable crown location;
a flexible drive shaft with a diamond grit coated offset crown,
which tracks and orbits over the guidewire; and
a sheath, which covers the drive shaft and permits delivery of
saline or medications to the treatment area.
48
Table of Contents
Speed.
An increase in speed creates a larger
lumen. Our current system allows the user to choose between
three rotational speeds. The fastest speed can result in a
device-to-lumen ratio of 1.0 to 2.0, for a lumen that is
approximately 100% larger than the actual diameter of the device.
Crown Characteristics.
The crown can be
designed with various weights (as determined by different
materials and density) and coated with diamond grit of various
width, height and configurations. Our current system offers the
choice between a hollow, lightweight crown and a solid, heavier
crown, which could potentially increase the device-to-lumen
ratio.
Drive Shaft Characteristics.
The drive shaft
can be designed with various shapes and degrees of rigidity. We
are developing a drive shaft that we call the
Sidewinder, which is a heat-set, pre-bent shaft.
When the guidewire is inserted into the Sidewinder, the shaft is
straightened, allowing for deliverability to the lesion.
However, the propensity of the Sidewinders pre-bent shaft
to return to its bent shape creates a larger diameter orbit,
which will potentially allow for the creation of a larger lumen.
We are also developing a version of our shaft that has a diamond
grit coated tip for ease of penetrating a chronic total
occlusion.
93.1% of particles were smaller than a red blood cell, with a
99% confidence interval; and
99.3% of particles were smaller than the lumen of the
capillaries (which provide the connection between the arterial
and venous system), with a 99% confidence interval.
49
Table of Contents
Metric
Description
Absolute plaque reduction is the difference between the
pre-treatment percent stenosis, or the narrowing of the vessel,
and the post-treatment percent stenosis as measured
angiographically.
Target lesion revascularization rate, or TLR rate, is the
percentage of patients at
follow-up
who have another peripheral intervention precipitated by their
worsening symptoms, such as an angioplasty, stenting or surgery
to reopen the treated lesion site.
The Ankle Brachial Index, or ABI, is a measurement that is
useful to evaluate the adequacy of circulation in the legs and
improvement or worsening of leg circulation over time. The ABI
is a ratio between the blood pressure in a patients ankle
and a patients arm, with a ratio above 0.9 being normal.
Metric
Description
Serious adverse events, or SAEs, include any experience that is
fatal or life-threatening, is permanently disabling, requires or
prolongs hospitalization, or requires intervention to prevent
permanent impairment or damage. SAEs may or may not be related
to the device.
Perforations occur when the artery is punctured during
atherectomy treatment. Perforations may be nonserious or an SAE
depending on the treatment required to repair the perforation.
50
Table of Contents
an ABI of less than 0.9;
a Rutherford Class score of V or lower; and
treated arteries of between 1.5 mm and 4.0 mm or less in
diameter via angiogram measurement, with a well-defined lesion
of at least 50% diameter stenosis and lesions of no greater than
10.0 cm in length.
Item
FDA Target
OASIS Result
55%
59.4%
8% mean, with an upper bound of 16%
4.8% mean, device-related 9.7% mean, overall
20% or less
2.4%
N/A
1 serious perforation
N/A
0.68 ± 0.2*
N/A
0.9 ± 0.18*
N/A
0.83 ± 0.23*
*
Mean ± Standard Deviation
51
Table of Contents
educating physicians regarding the proper use and application of
the Diamondback 360°;
developing relationships with key opinion leaders; and
facilitating regional referral marketing programs.
52
Table of Contents
safety and efficacy;
predictable clinical performance;
ease of use;
53
Table of Contents
price;
physician relationships;
customer service and support; and
adequate third-party reimbursement.
54
Table of Contents
the systems may not be safe or effective to the FDAs
satisfaction;
the data from preclinical studies and clinical trials may be
insufficient to support approval;
55
Table of Contents
the manufacturing process or facilities used may not meet
applicable requirements; and
changes in FDA approval policies or adoption of new regulations
may require additional data.
56
Table of Contents
the FDA or other regulatory authorities do not approve a
clinical trial protocol or a clinical trial (or a change to a
previously approved protocol or trial that requires approval),
or place a clinical trial on hold;
patients do not enroll in clinical trials or follow up at the
rate expected;
patients do not comply with trial protocols or experience
greater than expected adverse side effects;
institutional review boards and third-party clinical
investigators may delay or reject the trial protocol or changes
to the trial protocol;
third-party clinical investigators decline to participate in a
trial or do not perform a trial on the anticipated schedule or
consistent with the clinical trial protocol, investigator
agreements, good clinical practices or other FDA requirements;
third-party organizations do not perform data collection and
analysis in a timely or accurate manner;
regulatory inspections of the clinical trials or manufacturing
facilities, which may, among other things, require corrective
action or suspension or termination of the clinical trials;
changes in governmental regulations or administrative actions;
the interim or final results of the clinical trial are
inconclusive or unfavorable as to safety or efficacy; and
the FDA concludes that the trial design is inadequate to
demonstrate safety and efficacy.
establishment registration and device listing upon the
commencement of manufacturing;
the QSR, which requires manufacturers, including third-party
manufacturers, to follow design, testing, control, documentation
and other quality assurance procedure during medical device
design and manufacturing processes;
labeling regulations, which prohibit the promotion of products
for unapproved or off-label uses and impose other
restrictions on labeling and promotional activities;
medical device reporting regulations, which require that
manufacturers report to the FDA if a device may have caused or
contributed to a death or serious injury or malfunctioned in a
way that would likely cause or contribute to a death or serious
injury if malfunctions were to recur; and
corrections and removal reporting regulations, which require
that manufacturers report to the FDA field corrections and
product recalls or removals if undertaken to reduce a risk to
health posed by the device or to remedy a violation of the FDCA
caused by the device that may present a risk to health.
warning letters or untitled letters;
fines, injunctions and civil penalties;
product recall or seizure;
unanticipated expenditures;
delays in clearing or approving or refusal to clear or approve
products;
withdrawal or suspension of FDA approval;
57
Table of Contents
orders for physician notification or device repair, replacement
or refund;
operating restrictions, partial suspension or total shutdown of
production or clinical trials; and
criminal prosecution.
58
Table of Contents
59
Table of Contents
60
Table of Contents
F-14
II-4
Name
Position
70
Chairman
43
President, Chief Executive Officer, Interim Chief Financial
Officer, and Director
54
Chief Administrative Officer and Secretary
59
Chief Scientific Officer, Director
40
Vice President of Sales
44
Vice President of Marketing
53
Executive Vice President
50
Vice President of Business Development
45
Vice President of Manufacturing
49
Director
54
Director
61
Director
64
Director
66
Director
36
Director
(1)
Member of the Audit Committee.
(2)
Member of the Compensation
Committee.
(3)
Member of the Nominating and
Governance Committee.
61
Table of Contents
62
Table of Contents
63
Table of Contents
reviewing and pre-approving the engagement of our independent
registered public accounting firm to perform audit services and
any permissible non-audit services;
evaluating the qualifications, independence and performance of
our independent registered public accounting firm;
reviewing and monitoring the integrity of our financial
statements;
reviewing and approving all related-party transactions;
reviewing with our independent registered public accounting firm
and management the performance of our internal audit function,
financial reporting process, systems of internal controls over
financial reporting and disclosure of controls and
procedures; and
establishing procedures for the receipt, retention and treatment
of complaints received by us regarding financial controls,
accounting or auditing matters.
64
Table of Contents
identifying individuals qualified to become members of the board
of directors;
recommending director nominees for each annual meeting of
shareholders and director nominees to fill any vacancies that
may occur between meetings of the shareholders; and
reviewing and updating our corporate governance standards and
performing those functions specified therein and in the
committee charter.
Name
Option
Awards
(1)(2)
$
5,611
16,540
16,540
21,148
24,810
5,611
65
Table of Contents
(1)
The value of options in this table
includes (a) the dollar amount we recognized for financial
statement reporting purposes in accordance with
SFAS No. 123(R) for stock options granted in fiscal
year 2007 and (b) the dollar amount that we would have
recognized for financial statement reporting purposes in fiscal
2007 under the disclosure provisions of SFAS No. 123
for awards of stock options granted prior to fiscal 2007. For a
discussion of valuation assumptions and additional
SFAS No. 123(R) disclosures, see Note 5 to our
consolidated financial statements regarding stock compensation
at
page F-16
of this prospectus. The value of options in this table includes
the compensation cost for fiscal year 2007 of option awards
granted in and prior to fiscal year 2007.
(2)
Our stock option agreements provide
that in the event of a change of control, the vesting of all
options will accelerate and the options will be immediately
exercisable as of the effective date of the change of control.
Change of control is defined as the sale by the
company of substantially all of its assets and the consequent
discontinuance of its business, or in the event of a merger,
exchange or liquidation of the company.
(3)
Mr. Blackey was elected to our
board of directors on October 9, 2007.
(4)
In connection with their initial
election to the board of directors, Mr. Friedman and
Ms. Wyskiel were each granted a five-year option to
purchase 60,000 shares of our common stock at $5.71 per
share on August 15, 2006, such option to vest one-third on
each of the first three anniversaries of the date of grant. The
options held by Mr. Friedman are held for the benefit of
Easton Capital Partners, LP. The options held by
Ms. Wyskiel are held for the benefit of Maverick
Fund II, Ltd., Maverick Fund, L.D.C. and Maverick
Fund USA, Ltd.
(5)
As compensation for their continued
board service, on December 19, 2006 each of
Messrs. Hartzler, Howe, Nelson and Petrucci were granted
options to purchase 20,000 shares of our common stock at
$5.71 per share. Mr. Petrucci was granted an option to
purchase an additional 10,000 shares in connection with his
service as chairman of the board.
66
Table of Contents
attract and retain talented and dedicated executives to manage
and lead our company;
align the interests of our executives and shareholders by
implementing cash incentive and equity programs designed to
reward the achievement of corporate and individual objectives
that promote growth in our business; and
motivate individuals to work as a team for the success of the
company by fairly recognizing the contributions of each
individual, including their experience, abilities and
performance, to our collective success.
each executives position within the company and the level
of responsibility;
the skills and experience required by an executives
position;
the executives individual experience and qualifications;
the competitive environment for comparable executive talent
having similar experience, skills and responsibilities;
company performance compared to specific objectives;
the executives current and historical compensation levels;
the executives length of service to our company;
compensation equity and consistency across all executive
positions; and
the executives existing holdings and rights to acquire
equity.
67
Table of Contents
base salary;
annual and quarterly cash incentive compensation;
equity-based compensation, in the form of stock options; and
employment benefits and limited perquisites.
68
Table of Contents
Annual Base Salary Rates
Name
Start Date
Fiscal 2006
Fiscal 2007
% Change
3/11/03
$
148,315
$
185,000
25
%
12/1/02
210,000
250,000
19
10/17/05
175,000
185,573
6
69
Table of Contents
Target Bonus as
Total 2007
Name
% of Base Salary
Bonus Payments
25
%
$
0
40
76,562
40
100,000
100
200,000
50
83,333
40
86,695
70
Table of Contents
recommending the annual compensation packages, including base
salaries, incentive compensation, deferred compensation and
stock-based compensation, for our executive officers;
recommending cash incentive compensation plans and deferred
compensation plans for our executive officers, including
corporate performance objectives;
administering our stock incentive plans, and subject to board
approval in the case of executive officers, approving grants of
stock, stock options and other equity awards under such plans;
reviewing and making recommendations regarding the terms of
employment agreements for our executive officers;
reviewing and discussing the compensation discussion and
analysis with management; and
following the completion of this offering, preparing the
compensation committee report to be included in our annual proxy
statement.
71
Table of Contents
Non-Equity
Option
Incentive Plan
All Other
Name and
Salary
Bonus
Awards
(1)
Compensation
Compensation
Total
Principal Position
Year
($)
($)
($)
($)
($)
($)
2007
$
129,573
$
0
$
99,108
$
0
$
67,000
$
295,681
2007
166,658
39,562
26,179
37,000
0
269,399
2007
246,923
50,000
49,184
50,000
0
396,107
2007
196,154
0
19,729
200,000
7,800
423,683
2007
167,692
0
12,774
83,333
6,825
270,624
2007
180,287
49,581
48,269
37,114
0
315,251
(1)
The value of options in this table
includes (a) the dollar amount we recognized for financial
statement reporting purposes in accordance with
SFAS No. 123(R) for stock options granted in fiscal
year 2007 and (b) the dollar amount that we would have
recognized for financial statement reporting purposes in fiscal
2007 under the disclosure provisions of SFAS No. 123
for awards of stock options granted prior to fiscal 2007. For a
discussion of valuation assumptions and additional
SFAS No. 123(R) disclosures, see Note 5 to our
consolidated financial statements regarding stock compensation
at
page F-16
of this prospectus. The value of options in this table includes
the compensation cost for fiscal year 2007 of option awards
granted in and prior to fiscal year 2007.
(2)
Mr. Martin commenced
employment on February 15, 2007 with an annual base salary
of $370,000. The amounts under All Other
Compensation for Mr. Martin consist of a housing
allowance of $6,000 per month, a car allowance of $900 per month
and a moving allowance of $40,000.
(3)
Effective January 14, 2008,
Mr. Flaherty was promoted to serve as our Chief
Administrative Officer. Mr. Martin was appointed our
Interim Chief Financial Officer pending the appointment of a new
Chief Financial Officer.
(4)
Mr. Borrell commenced
employment on July 1, 2006 with an annual base salary of
$200,000 per year. The amounts under All Other
Compensation for Mr. Borrell consist of a car
allowance of $650 per month.
(5)
Mr. Tyska commenced employment
on August 23, 2006 with an annual base salary of $200,000
per year. The amounts under All Other Compensation
for Mr. Tyska consist of a car allowance of $650 per month.
72
Table of Contents
All Other
Estimated Future
Option
Payouts Under
Awards:
Grant Date
Non-Equity
Number of
Exercise or
Fair Market
Incentive Plan
Securities
Base Price
Value of Stock
Awards
Underlying
of Option
and Option
Name
Grant Date
Target/Maximum
Options
Awards
(1)
Awards
(2)
7/17/06
$
92,500
180,000
$
5.71
$
437,400
8/15/06
60,000
5.71
145,800
2/15/07
540,000
5.71
1,933,200
6/12/07
140,000
5.11
833,000
12/19/06
80,000
14,500
5.71
40,455
4/18/07
39,000
5.71
180,570
7/17/06
100,000
50,000
5.71
121,500
12/19/06
100,000
5.71
279,000
7/1/06
200,000
132,000
5.71
320,760
12/19/06
8,000
5.71
22,320
4/18/07
34,000
5.71
157,420
10/3/06
100,000
140,000
5.71
361,200
12/19/06
80,000
12,000
5.71
33,480
4/18/07
46,000
5.71
212,980
(1)
See Note 5 to our consolidated
financial statements regarding stock compensation at
page F-16
of this prospectus for a discussion of the methodology for
determining the exercise price.
(2)
Reflects the grant date fair market
value of option awards granted in 2007, computed in accordance
with SFAS No. 123(R). For a discussion of valuation
assumptions, see Note 5 to our consolidated financial
statements regarding stock compensation at
page F-16
of this prospectus.
73
Table of Contents
Option Awards
Number of
Number of
Securities
Securities
Underlying
Underlying
Unexercised
Unexercised
Option
Option
Options
Options
Exercise
Expiration
Name
Grant Date
Exercisable
Unexercisable
Price
(1)
Date
7/17/06
55,000
125,000
$
5.71
7/16/11
8/15/06
0
60,000
5.71
8/14/11
2/15/07
60,000
480,000
5.71
2/14/12
6/12/07
0
140,000
5.11
6/11/17
2/17/04
20,000
0
6.00
2/16/09
11/16/04
5,000
2,500
6.00
11/15/09
7/01/05
8,333
16,667
8.00
6/30/10
11/08/05
4,000
8,000
8.00
11/7/10
12/19/06
0
14,500
5.71
12/18/16
4/18/07
0
39,000
5.71
4/17/17
3/11/03
40,000
0
5.00
3/10/08
6/21/04
25,000
0
6.00
2/16/09
11/16/04
13,334
6,666
6.00
11/15/09
11/08/05
16,667
33,333
8.00
11/07/10
7/17/06
0
50,000
5.71
7/16/11
12/19/06
0
100,000
5.71
12/18/16
12/18/02
260,000
0
1.00
12/17/07
7/01/06
0
132,000
5.71
6/30/11
12/19/06
0
8,000
5.71
12/18/16
4/18/07
0
34,000
5.71
4/17/17
10/03/06
0
140,000
5.71
10/02/11
10/17/05
33,333
66,667
8.00
10/16/10
12/19/06
0
12,000
5.71
12/18/16
4/18/07
0
46,000
5.71
4/17/17
(1)
See Note 5 to our consolidated
financial statements regarding stock compensation at
page F-16
of this prospectus for a discussion of the methodology for
determining the exercise price.
(2)
The July 2006 options vest at the
rate of 5,000 shares per month starting on August 17,
2006. The August 2006 and June 2007 options vest at the rate of
one-third per year starting on the first anniversary of the
grant date. The February 2007 options vest at the rate of
15,000 shares per month starting March 15, 2007.
(3)
All option awards vest at the rate
of one-third per year starting on the first anniversary of the
grant date.
74
Table of Contents
Name
Value of Accelerated Options
$
305,000
51,000
1,323,000
42,000
34,000
14,000
12 Months
12 Months Health
Name
Base Salary
Insurance Costs
Bonus
Total
$
370,000
$
15,000
$
N/A
$
385,000
225,000
15,000
100,000
340,000
75
Table of Contents
76
Table of Contents
77
Table of Contents
78
Table of Contents
79
Table of Contents
Number of Shares of
Series B
Approximate
Convertible
Aggregate Purchase
Name
Preferred Stock
Price ($)
5,000
$
46,250
54,054
500,000
3,784
35,002
108,108
999,999
(1)
Glen Nelson, one of our directors,
is the sole owner of GDN Holdings, LLC.
(2)
Christy Wyskiel, one of our
directors, is a Managing Director of Maverick Capital, Ltd.
(3)
Consists of shares issued to
Maverick Fund II, Ltd., Maverick Fund, L.D.C. and Maverick
Fund USA, Ltd.
Number of Shares of
Series A-1
Approximate
Convertible
Aggregate Purchase
Name
Preferred Stock
Price ($)
5,900
$
50,150
11,764
99,994
41,913
356,261
235,394
2,000,850
117,647
1,000,000
12,000
102,000
(1)
Glen Nelson, one of our directors,
is the sole owner of GDN Holdings, LLC.
(2)
Christy Wyskiel, one of our
directors, is a Managing Director of Maverick Capital, Ltd.
(3)
Consists of shares issued to
Maverick Fund II, Ltd., Maverick Fund, L.D.C. and Maverick
Fund USA, Ltd.
(4)
Mitsui & Co. Venture
Partners II, L.P. is a 5% holder, as set forth in the section
entitled Principal Shareholders.
80
Table of Contents
Number of Series
Number of Shares of
A Convertible
Approximate
Series A Convertible
Preferred Stock
Aggregate Purchase
Name
Preferred Stock
Warrant Shares
Price ($)
1,225,920
174,080
$
7,000,000
1,751,313
248,686
9,999,997
131,349
18,652
750,003
36,124
5,130
206,268
675,148
95,871
3,855,095
(1)
John Friedman, one of our
directors, is the Managing Partner of the Easton Capital
Investment Group. Mr. Friedman disclaims any beneficial
ownership of the shares held by entities affiliated with Easton
Capital Investment Group.
(2)
Consists of shares issued to Easton
Hunt Capital Partners, L.P. and Easton Capital Partners, LP.
(3)
Christy Wyskiel, one of our
directors, is a Managing Director of Maverick Capital, Ltd.
(4)
Consists of shares issued to
Maverick Fund II, Ltd., Maverick Fund, L.D.C. and Maverick
Fund USA, Ltd.
(5)
Glen Nelson, one of our directors,
is the sole owner of GDN Holdings, LLC.
(6)
Mr. Petrucci acquired
Series A convertible preferred stock pursuant to the
conversion of an 8% convertible promissory note in the principal
amount of $200,000 that was issued to him in connection with our
bridge financing that occurred from February 2006 through July
2006.
(7)
Mitsui & Co. Venture
Partners II, L.P. is a 5% holder, as set forth in the section
entitled Principal Shareholders.
81
Table of Contents
82
Table of Contents
each person, or group of affiliated persons, known by us to
beneficially own more than 5% of our common stock;
each of our named executive officers;
each of our directors; and
all of our executive officers and directors as a group.
83
Table of Contents
Number of
Shares
Beneficially
Percentage of Shares Beneficially Owned
Beneficial Owner
Owned
Before
Offering
(1)
After Offering
296,000
1.9
%
102,499
*
133,834
*
81,431
*
28,233
*
56,666
*
3,784
*
82,666
*
50,000
*
325,663
2.0
%
139,500
*
10,900
*
532,135
3.3
%
548,329
3.4
%
50,000
*
2,441,640
15.3
%
1,450,000
9.1
%
2,393,501
15.0
%
888,666
5.6
%
*
Less than 1% of the outstanding
shares.
(1)
Based on 15,952,945 shares of
common stock outstanding as of December 17, 2007, assuming
the conversion of all outstanding shares of our preferred stock
into common stock. Unless otherwise indicated, each person or
entity listed has sole investment and voting power with respect
to the shares listed.
(2)
Consists of 76,000 shares of
our common stock and options to acquire a total of
220,000 shares of our common stock currently exercisable or
exercisable within 60 days after December 17, 2007
held by Mr. Martin.
(3)
Consists of 45,000 shares of
our common stock and options to acquire a total of
56,999 shares and warrants to acquire a total of
500 shares of our common stock currently exercisable or
exercisable within 60 days after December 17, 2007
held by Mr. Flaherty.
(4)
Consists of 5,000 shares of
our common stock and options to acquire a total of
128,334 shares and warrants to acquire a total of
500 shares of our common stock currently exercisable or
exercisable within 60 days after December 17, 2007
held by Dr. Kallok.
(5)
Consists of 34,764 shares of
our common stock and options to acquire a total of
46,667 shares of our common stock currently exercisable or
exercisable within 60 days after December 17, 2007
held by Mr. Borrell.
(6)
Consists of 4,900 shares of
our common stock and options to acquire a total of
23,333 shares of our common stock currently exercisable or
exercisable within 60 days after December 17, 2007
held by Mr. Doughty.
(7)
Consists of 10,000 shares of
our common stock held by Mr. Tyska and options to acquire a
total of 46,666 shares of our common stock currently
exercisable or exercisable within 60 days after
December 17, 2007 held by Mr. Tyska.
(8)
Consists of 3,784 shares of
our common stock held by Mr. Koehn.
(9)
Consists of 12,000 shares of
our common stock held by Mr. Thatcher and options to
acquire a total of 70,666 shares of our common stock
currently exercisable or exercisable within 60 days after
December 17, 2007 held by Mr. Thatcher.
84
Table of Contents
(10)
Consists of options to acquire a
total of 50,000 shares of our common stock currently
exercisable or exercisable within 60 days after
December 17, 2007 held by Mr. Friedman. These options
are held for the benefit of entities affiliated with Easton
Capital Investment Group.
(11)
Consists of 177,063 shares of
our common stock and options to acquire a total of
145,000 shares and warrants to acquire a total of
3,600 shares of our common stock currently exercisable or
exercisable within 60 days after December 17, 2007
held by Dr. Hartzler.
(12)
Consists of 41,500 shares of
our common stock and warrants to acquire a total of
13,000 shares of our common stock currently exercisable or
exercisable within 60 days after December 17, 2007
held by Sonora Web LLLP , of which Dr. Howe is the general
partner, and options to acquire a total of 85,000 shares of
our common stock currently exercisable or exercisable within
60 days after December 17, 2007 held by Dr. Howe.
(13)
Consists of 10,900 shares of
our common stock held by Mr. Blackey.
(14)
Consists of
(i) 376,483 shares of our common stock and warrants to
acquire a total of 20,652 shares of our common stock
currently exercisable or exercisable within 60 days after
December 17, 2007 held by GDN Holdings, LLC; and
(ii) options to acquire a total of 135,000 shares of
our common stock currently exercisable or exercisable within
60 days after December 17, 2007 held by
Dr. Nelson.
(15)
Consists of
(i) 50,000 shares held by Applecrest Partners LTD
Partnership, of which Mr. Petrucci is the General Partner,
and (ii) 351,949 shares of our common stock, options
to acquire a total of 110,000 shares and warrants to
acquire a total of 36,380 shares of our common stock
currently exercisable or exercisable within 60 days after
December 17, 2007 held by Mr. Petrucci.
(16)
Consists of options to acquire a
total of 50,000 shares of our common stock currently
exercisable or exercisable within 60 days after
December 17, 2007 held by Ms. Wyskiel. These options
are held for the benefit of Maverick Fund II, Ltd.,
Maverick Fund, L.D.C. and Maverick Fund USA, Ltd.
(17)
Consists of 612,960 shares of
our common stock held and 87,040 shares which may be
purchased by Easton Hunt Capital Partners, L.P. upon exercise of
currently exercisable warrants, 612,960 shares of our
common stock held and 87,040 shares which may be purchased
by Easton Capital Partners, LP upon exercise of currently
exercisable warrants, and options to acquire a total of
50,000 shares of our common stock currently exercisable or
exercisable within 60 days after December 17, 2007
held by Mr. Friedman, one of our directors.
Mr. Friedman disclaims any beneficial ownership of the
shares held by entities affiliated with Easton Capital
Investment Group. The address for the entities affiliated with
Easton Capital Investment Group is 767 Third Avenue, 7th Floor,
New York, NY 10017.
(18)
Consists of 921,281 shares of
our common stock held and 109,370 shares which may be
purchased by Maverick Fund, L.D.C. upon exercise of currently
exercisable warrants, 371,942 shares of our common stock
held and 44,155 shares which may be purchased by Maverick
Fund USA, Ltd. upon exercise of currently exercisable
warrants, 801,592 shares of our common stock held and
95,161 shares which may be purchased by Maverick
Fund II, Ltd. upon exercise of currently exercisable
warrants, and options to acquire a total of 50,000 shares
of our common stock currently exercisable or exercisable within
60 days after December 17, 2007 held by
Ms. Wyskiel, one of our directors. These options are held
for the benefit of Maverick Fund II, Ltd., Maverick Fund,
L.D.C. and Maverick Fund USA, Ltd. Maverick Capital, Ltd.
is an investment adviser registered under Section 203 of
the Investment Advisers Act of 1940 and, as such, has beneficial
ownership of the shares held by Maverick Fund II, Ltd.,
Maverick Fund, L.D.C. and Maverick Fund USA, Ltd. through
the investment discretion it exercises over these accounts.
Maverick Capital Management, LLC is the general partner of
Maverick Capital, Ltd. Lee S. Ainslie III is the manager of
Maverick Capital Management, LLC who possesses sole investment
discretion pursuant to Maverick Capital Management, LLCs
regulations. The address for the entities affiliated with
Maverick Capital, Ltd. is 300 Crescent Court, 18th Floor,
Dallas, TX 75201.
(19)
Consists of 792,795 shares of
our common stock held and 95,871 shares which may be
purchased by Mitsui & Co. Venture Partners II, L.P.
upon exercise of currently exercisable warrants. The address of
Mitsui & Co. Venture Partners II, L.P. is 200 Park
Avenue, New York, NY 10166.
85
Table of Contents
86
Table of Contents
372,974 shares of our common stock at a weighted average
exercise price of $5.12 per share. These warrants are currently
exercisable through July 2013.
662,439 shares of our Series A convertible preferred
stock at an exercise price of $5.71 per share. These warrants
are currently exercisable through March 2008. Upon the
conversion of the preferred stock and the closing of this
offering, the Series A warrants will automatically become
exercisable for up to 662,439 shares of our common stock.
87
Table of Contents
88
Table of Contents
89
Table of Contents
1% of the number of shares of our common stock then outstanding,
which will equal
approximately shares
immediately after this offering; or
the average weekly trading volume of our common stock on the
Nasdaq Global Market during the four calendar weeks preceding
the filing of a notice on Form 144 with respect to that
sale.
90
Table of Contents
during the last 17 days of the
180-day
restricted period, we issue an earnings release or disclose
material news or a material event relating to our company
occurs; or
prior to the expiration of the
180-day
restricted period, we announce that we will release earnings
results during the
16-day
period beginning on the last day of the
180-day
restricted period;
91
Table of Contents
an individual citizen or resident of the United States;
a corporation organized under the laws of the United States or
any state;
a trust that is (i) subject to the primary supervision of a
U.S. court and the control of one or more U.S. persons
or (ii) has a valid election in effect under applicable
U.S. Treasury regulations to be treated as a
U.S. person; or
an estate the income of which is subject to U.S. federal
income taxation regardless of source.
92
Table of Contents
the gain is effectively connected with the conduct by the
non-U.S. holder
of a U.S. trade or business or, if a treaty applies, is
attributable to a permanent establishment of the
non-U.S. holder
in the United States, in which case the special rules described
below apply;
the
non-U.S. holder
is an individual who holds our common stock as a capital asset
and who is present in the United States for 183 days or
more in the taxable year of the sale, exchange, or other
disposition, and certain other requirements are met; or
the rules of the Foreign Investment in Real Property Tax Act, or
FIRPTA (described below), treat the gain as effectively
connected with a U.S. trade or business.
93
Table of Contents
94
Table of Contents
Underwriter
Number of Shares
No Exercise
Full Exercise
$
$
95
Table of Contents
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any
shares of common stock or any securities convertible into or
exercisable or exchangeable for common stock; or
enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences
of ownership of the common stock;
the sale by us of shares to the underwriters in connection with
the offering;
the issuance by us of shares of common stock upon the exercise
of an option or a warrant or the conversion of a security
outstanding on the date of this prospectus of which the
underwriters have been advised in writing;
the establishment of a trading plan pursuant to
Rule 10b5-1
under the Exchange Act for the transfer of shares of common
stock, provided that the plan does not provide for the transfer
of common stock during the restricted period; or
the transfer of shares of common stock or any security
convertible into shares of common stock as a bona fide gift, as
a distribution to general or limited partners, shareholders,
members or wholly-owned subsidiaries of our shareholders, or by
will or intestate succession.
during the last 17 days of the
180-day
restricted period we issue a release regarding earnings or
regarding material news or events relating to us; or
prior to the expiration of the
180-day
restricted period, we announce that we will release earnings
results during the
16-day
period beginning on the last day of the
180-day
restricted period,
96
Table of Contents
to legal entities which are authorized or regulated to operate
in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts; or
in any other circumstances which do not require the publication
by us of a prospectus pursuant to Article 3 of the
Prospectus Directive.
97
Table of Contents
98
Table of Contents
99
Page(s)
F-2
F-3
F-4
F-5
F-6
F-7
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
Three Months Ended
Year Ended June 30,
September 30,
2005
2006
2007
2006
2007
(unaudited)
(unaudited)
$
$
$
$
$
539
(539
)
1,177
1,735
6,691
823
3,552
2,371
3,168
8,446
749
3,328
3,548
4,903
15,137
1,572
6,880
(3,548
)
(4,903
)
(15,137
)
(1,572
)
(7,419
)
(48
)
(1,340
)
(13
)
(300
)
37
56
881
256
278
37
8
(459
)
243
(22
)
(3,511
)
(4,895
)
(15,596
)
(1,329
)
(7,441
)
(16,835
)
(3,878
)
(4,853
)
$
(3,511
)
$
(4,895
)
$
(32,431
)
$
(5,207
)
$
(12,294
)
$
(.61
)
$
(.79
)
$
(5.22
)
$
(.84
)
$
(1.95
)
5,779,942
6,183,715
6,214,820
6,199,204
6,291,512
F-4
Table of Contents
Accumulated
Other
Comprehensive
Comprehensive
Common Stock
Accumulated
(Loss)
(Loss)
Shares
Amount
Warrants
Deficit
Income
Total
Income
5,679,180
$
21,375
$
1,236
$
(18,879
)
$
$
3,732
$
(4,211
)
155,967
936
936
166,542
1,319
1,319
6,640
36
36
3,250
3
3
(100,000
)
(700
)
(700
)
279
13
292
(3,511
)
(3,511
)
$
(3,511
)
5,911,579
23,248
1,249
(22,390
)
2,107
$
(3,511
)
287,625
2,281
2,281
49
31
80
(4,895
)
(4,895
)
$
(4,895
)
6,199,204
25,578
1,280
(27,285
)
(427
)
$
(4,895
)
68,250
86
(17
)
69
103
103
(16,835
)
(16,835
)
390
390
(7
)
(7
)
$
(7
)
(15,596
)
(15,596
)
(15,596
)
6,267,454
26,054
1,366
(59,716
)
(7
)
(32,303
)
$
(15,603
)
26,667
160
160
(4,853
)
(4,853
)
350
350
6
6
$
6
(7,441
)
(7,441
)
(7,441
)
6,294,121
$
26,564
$
1,366
$
(72,010
)
$
(1
)
$
(44,081
)
$
(7,435
)
F-5
Table of Contents
Three Months Ended
Year Ended June 30,
September 30,
2005
2006
2007
2006
2007
(unaudited)
(unaudited)
$
(3,511
)
$
(4,895
)
$
(15,596
)
$
(1,329
)
$
(7,441
)
67
73
153
18
47
44
45
45
14
14
1,327
(59
)
300
390
11
350
327
80
(3
)
(293
)
(34
)
(52
)
(1,395
)
(289
)
(438
)
(322
)
(116
)
(1,522
)
(24
)
(96
)
(113
)
26
13
106
30
1,709
41
(430
)
13
216
424
(52
)
632
1,428
(3,267
)
(4,988
)
(12,276
)
(1,480
)
(8,056
)
(7
)
(235
)
(465
)
(49
)
(207
)
2
7
(23,169
)
(12,700
)
11,840
(6,998
)
5,874
(58
)
(5
)
(228
)
(11,852
)
(7,047
)
(7,033
)
2,255
2,281
30,294
20,116
10,296
(1,776
)
(1,742
)
(10
)
103
99
1,767
1,638
3
69
160
3,059
25
25
350
(350
)
(700
)
1,908
4,990
30,482
20,136
10,446
(1,364
)
(226
)
6,354
11,609
(4,643
)
3,144
1,780
1,554
1,554
7,908
$
1,780
$
1,554
$
7,908
$
13,163
$
3,265
$
$
$
(3,145
)
$
(3,145
)
$
16,835
3,878
4,853
(7
)
(4
)
6
F-6
Table of Contents
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
1.
Summary
of Significant Accounting Policies
F-7
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
June 30, 2007
Net
Amortized
Aggregate
Unrealized
Cost
Fair Value
Losses
$
3,267
$
3,264
$
(3
)
3,655
3,651
(4
)
4,700
4,700
$
11,622
$
11,615
$
(7
)
September 30, 2007
Net
Amortized
Aggregate
Unrealized
Cost
Fair Value
Losses
(unaudited)
$
1,100
$
1,099
$
(1
)
17,400
17,400
$
18,500
$
18,499
$
(1
)
F-8
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
F-9
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
F-10
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
F-11
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
F-12
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
2.
Selected
Consolidated Financial Statement Information
June 30,
September 30,
2006
2007
2007
(unaudited)
$
220
$
513
$
1,761
65
134
304
443
403
507
$
728
$
1,050
$
2,572
F-13
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
June 30,
September 30,
2006
2007
2007
(unaudited)
$
379
$
804
$
974
53
85
97
6
14
39
438
903
1,110
(165
)
(318
)
(365
)
$
273
$
585
$
745
$
932
$
990
$
990
(333
)
(378
)
(392
)
$
599
$
612
$
598
$
31
45
45
45
45
387
$
598
June 30,
September 30,
2006
2007
2007
(unaudited)
$
309
$
748
$
703
668
48
$
357
$
748
$
1,371
3.
Convertible
Promissory Notes
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
4.
Common
Stock Warrants
Price
Warrants
Range
Outstanding
per Share
219,675
$
1.00-$5.00
43,500
$
6.00
(3,250
)
$
1.00
259,925
$
1.00-$6.00
6,400
$
8.00
(3,600
)
$
5.00
262,725
$
1.00-$8.00
137,349
$
5.71
(3,250
)
$
1.00
396,824
$
1.00-$8.00
396,824
$
1.00-$8.00
F-15
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
Year Ended June 30,
2005
2006
2007
$
3.62
$
4.90
$
0.69-$0.76
3.56
%
4.34
%
4.70%-5.02
%
5 years
5 years
5-7 years
70.0
%
70.0
%
44.9%-45.1
%
None
None
None
5.
Stock
Options
F-16
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
Weighted
Shares
Number
Average
Available
of
Exercise
for
Grant
(a)
Options
(b)
Price
127,751
1,470,360
$
3.06
1,000,000
(181,500
)
181,500
$
6.00
51,499
(100,999
)
$
7.28
997,750
1,550,861
$
3.12
(484,500
)
484,500
$
7.53
113,500
(213,500
)
$
2.96
626,750
1,821,861
$
3.91
2,500,000
(2,624,850
)
2,624,850
$
5.64
(65,000
)
$
1.00
79,850
(94,850
)
$
1.04
581,750
4,286,861
$
4.96
(402,500
)
402,500
$
5.11
(26,667
)
$
6.00
63,333
(63,333
)
$
5.68
242,583
4,599,361
$
4.95
(a)
Excludes the effect of options
granted, exercised, forfeited or expired related to activity
from the 1991 Plan and options granted outside the stock option
plans described above.
(b)
Includes the effect of options
granted, exercised, forfeited or expired from the 1991 Plan,
2003 Plan and options granted outside the stock option plans
described above.
F-17
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
Number
Estimated
of Shares
Fair Value
Subject to
Exercise
of Common
Grant Date
Options
Price
Stock
132,000
$
5.71
$
2.43
230,000
$
5.71
$
2.43
239,500
$
5.71
$
2.43
375,000
$
5.71
$
2.58
446,100
$
5.71
$
2.79
48,000
$
5.71
$
3.58
540,000
$
5.71
$
3.58
299,250
$
5.71
$
4.63
315,000
$
5.11
$
5.95
402,500
$
5.11
$
5.95
Options Outstanding
Options Exercisable
Remaining
Weighted
Weighted
Weighted
Number of
Average
Average
Number of
Average
Range of
Outstanding
Contractual
Exercise
Exercisable
Exercise
Exercise Prices
Shares
Life (Years)
Price
Shares
Price
845,000
0.48
$
1.00
845,000
$
1.00
174,000
1.05
$
5.00
174,000
$
5.00
315,000
9.96
$
5.11
$
5.11
2,366,750
6.03
$
5.71
286,222
$
5.71
230,500
2.17
$
6.00
209,168
$
6.00
307,000
3.33
$
8.00
157,666
$
8.00
48,611
8.76
$
12.00
48,611
$
12.00
4,286,861
4.65
$
4.96
1,720,667
$
3.75
Remaining
Weighted
Weighted
Average
Average
Aggregate
Number of
Contractual
Exercise
Intrinsic
Life (Years)
Price
Value
4,072,518
4.65
$
4.96
$
4,922
F-18
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
Options Outstanding
Options Exercisable
Remaining
Weighted
Weighted
Weighted
Number of
Average
Average
Number of
Average
Range of
Outstanding
Contractual
Exercise
Exercisable
Exercise
Exercise Prices
Shares
Life (Years)
Price
Shares
Price
845,000
0.23
$
1.00
845,000
$
1.00
174,000
0.80
$
5.00
174,000
$
5.00
712,500
9.79
$
5.11
10,000
$
5.11
2,311,750
5.82
$
5.71
490,554
$
5.71
200,500
1.96
$
6.00
185,334
$
6.00
307,000
3.08
$
8.00
161,999
$
8.00
48,611
8.51
$
12.00
48,611
$
12.00
4,599,361
4.90
$
4.95
1,915,498
$
3.95
Remaining
Weighted
Weighted
Average
Average
Aggregate
Number of
Contractual
Exercise
Intrinsic
Shares
Life (Years)
Price
Value
4,369,393
4.90
$
4.95
$
10,901
F-19
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
Three Months Ended
Year Ended June 30,
September 30,
2005
2006
2007
2006
2007
(unaudited)
(unaudited)
$
0.79
$
1.16
$
1.07
$
0.32
$
3.16
3.56%-3.64
%
3.71%-4.77
%
4.56%-5.18
%
5.02
%
4.63
%
4-6 years
4 years
3.5-6 years
3.5 years
6 years
None
None
43.8%-45.1
%
44.9
%
43.2
%
None
None
None
None
None
F-20
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
6.
Income
Taxes
June 30,
2006
2007
$
$
76
68
54
50
226
10,473
16,524
10,591
16,880
(32
)
(24
)
(1
)
(15
)
(33
)
(39
)
(10,558
)
(16,841
)
$
$
7.
Commitment
and Contingencies
F-21
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
$
297
451
460
470
476
202
$
2,356
8.
Employee
Benefits
9.
Redeemable
Convertible Preferred Stock and Convertible Preferred Stock
Warrants
F-22
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
F-23
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
10.
Legal
Matters
F-24
Table of Contents
Notes to Consolidated Financial
Statements (Continued)
(Information presented as of and for the three months ended
September 30, 2006
and 2007, is unaudited)
(dollars in thousands, except per share and share
amounts)
11.
Earnings
Per Share
Three Months Ended
Year Ended June 30,
September 30,
2005
2006
2007
2006
2007
(unaudited)
(unaudited)
$
3,511
$
4,895
$
15,596
$
1,329
$
7,441
16,835
3,878
4,853
(a)
$
3,511
$
4,895
$
32,431
$
5,207
$
12,294
5,779,942
6,183,715
6,214,820
6,199,204
6,291,512
(b)
(c)
5,779,942
6,183,715
6,214,820
6,199,204
6,291,512
$
(0.61
)
$
(0.79
)
$
(5.22
)
$
(0.84
)
$
(1.95
)
(a)
The calculation for accretion of
redeemable convertible preferred stock marks the redeemable
convertible preferred stock to fair value, which equals or
exceeds the amount of any undeclared dividends on the redeemable
convertible preferred stock.
(b)
At June 30, 2005, 2006 and
2007, 259,925, 262,725 and 1,068,277 warrants, respectively, and
at September 30, 2006 and 2007 (unaudited), 1,015,790 and
1,068,277 warrants, respectively, were outstanding. The effect
of the shares that would be issued upon exercise of these
options has been excluded from the calculation of diluted loss
per share because those shares are anti-dilutive.
(c)
At June 30, 2005, 2006, and
2007, 1,550,861, 1,821,861 and 4,286,861 stock options,
respectively, and at September 30, 2006 and 2007
(unaudited), 2,411,361 and 4,599,361 stock options,
respectively, were outstanding. The effect of the shares that
would be issued upon exercise of these options has been excluded
from the calculation of diluted loss per share because those
shares are anti-dilutive.
12.
Authorized
Shares
F-25
Table of Contents
Morgan
Stanley
Citi
Table of Contents
ITEM 13.
Other
Expenses of Issuance And Distribution.
Amount
$
3,390
9,125
100,000
*
*
*
*
*
*
*
*
To be filed by amendment
ITEM 14.
Indemnification
of Directors and Officers.
II-1
Table of Contents
ITEM 15.
Recent
Sales of Unregistered Securities.
Between November 13, 2007 and December 17, 2007, we
raised $20 million in gross proceeds and sold
2,162,150 shares of our Series B convertible preferred
stock at a purchase price of $9.25 per share to 89 accredited
investors.
Between May 16, 2007 and September 19, 2007, we raised
$18.6 million in gross proceeds and sold
2,188,425 shares of our Series
A-1
convertible preferred stock at a purchase price of $8.50 per
share to 192 accredited investors.
Between July 19, 2006 and October 3, 2006, we raised
$27 million in gross proceeds and sold
4,728,547 shares of our Series A convertible preferred
stock and warrants to purchase 671,453 shares of our
Series A convertible preferred stock at a purchase price of
$5.71 per unit to 44 accredited investors. In connection with
the Series A offering, we paid a sales agent fee of
$1,525,653 plus expenses and issued warrants to purchase
131,349 shares of our common stock at an exercise price of
$5.71 per share.
Between April 15, 2005 and August 25, 2005, we raised
$3.6 million in gross proceeds and sold 452,500 shares
of our common stock at a purchase price of $8.00 per share to 27
accredited investors.
Between January 2, 2004 and March 2, 2005, we raised
$3.6 million in gross proceeds and sold 600,504 shares
of our common stock at a purchase price of $6.00 per share to 42
accredited investors.
II-2
Table of Contents
ITEM 16.
Exhibits and
Financial Statement Schedules.
(A)
EXHIBITS.
Exhibit No.
Description
1
.1*
Form of Underwriting Agreement.
3
.1
Amended and Restated Articles of Incorporation.
3
.2
Amended and Restated Bylaws.
4
.1*
Specimen Common Stock Certificate of the registrant.
4
.2
Investors Rights Agreement, dated July 19, 2006, by
and among the shareholders party thereto and the registrant.
4
.3
Amendment No. 1 to Investors Rights Agreement, dated
October 3, 2006.
4
.4
Amendment No. 2 to Investors Rights Agreement, dated
September 19, 2007.
4
.5
Amendment No. 3 to Investors Rights Agreement, dated
December 17, 2007.
5
.1*
Opinion of Fredrikson & Byron, P.A.
10
.1
2007 Equity Incentive Plan.**
10
.2
Form of Incentive Stock Option Agreement under the 2007 Equity
Incentive Plan.**
10
.3
Form of Non-Qualified Stock Option Agreement under the 2007
Equity Incentive Plan.**
10
.4
Form of Restricted Stock Agreement under the 2007 Equity
Incentive Plan.**
10
.5
Form of Restricted Stock Unit Agreement under the 2007 Equity
Incentive Plan.**
10
.6
Form of Performance Share Award under the 2007 Equity Incentive
Plan.**
10
.7
Form of Performance Unit Award under the 2007 Equity Incentive
Plan.**
10
.8
Form of Stock Appreciation Rights Agreement under the 2007
Equity Incentive Plan.**
10
.9
2003 Stock Option Plan.**
10
.10
Form of Incentive Stock Option Agreement under the 2003 Stock
Option Plan.**
10
.11
Form of Non-Qualified Stock Option Agreement under the 2003
Stock Option Plan.**
10
.12
1991 Stock Option Plan.**
10
.13
Form of Non-Qualified Stock Option Agreement outside the 1991
Stock Option Plan.**
10
.14
Employment Agreement, dated December 19, 2006, by and
between the registrant and David L. Martin.**
10
.15
Amended and Restated Employment Agreement, dated May 31,
2003, by and between the registrant and Michael J. Kallok.**
II-3
Table of Contents
Exhibit No.
Description
10
.16
Amendment to Employment Agreement, dated December 19, 2007,
by and between the registrant and Michael J. Kallok.**
10
.17
Form of Standard Employment Agreement.**
10
.18
Lease, dated September 26, 2005, by and between the
registrant and Industrial Equities Group LLC.
10
.19
First Amendment to the Lease, dated February 20, 2007, by
and between the registrant and Industrial Equities Group LLC.
10
.20
Second Amendment to the Lease, dated March 9, 2007, by and
between the registrant and Industrial Equities Group LLC.
10
.21
Third Amendment to the Lease, dated September 26, 2007, by
and between the registrant and Industrial Equities Group LLC.
23
.1
Consent of PricewaterhouseCoopers, LLP, Independent Registered
Public Accounting Firm.
23
.2*
Consent of Fredrikson & Byron, P.A. (included in
Exhibit 5.1).
24
.1
Power of Attorney (included on the signature page).
*
To be filed by amendment.
**
Indicates management contract or
compensatory plan or arrangement.
(B)
FINANCIAL
STATEMENT SCHEDULES.
ITEM 17.
Undertakings.
Table of Contents
II-5
Table of Contents
By:
Signature
Title
Date
President, Chief Executive Officer (principal executive
officer), Interim Chief Financial Officer (principal financial
and accounting officer) and Director
January 22, 2008
Chairman of the Board and Director
January 22, 2008
Director
January 22, 2008
Director
January 22, 2008
Director
January 22, 2008
Director
January 22, 2008
Table of Contents
Signature
Title
Date
Chief Scientific Officer and Director
January 22, 2008
Director
January 22, 2008
Director
January 22, 2008
Table of Contents
Exhibit No.
Description
1
.1*
Form of Underwriting Agreement.
3
.1
Amended and Restated Articles of Incorporation.
3
.2
Amended and Restated Bylaws.
4
.1*
Specimen Common Stock Certificate of the registrant.
4
.2
Investors Rights Agreement, dated July 19, 2006, by
and among the shareholders party thereto and the registrant.
4
.3
Amendment No. 1 to Investors Rights Agreement, dated
October 3, 2006.
4
.4
Amendment No. 2 to Investors Rights Agreement, dated
September 19, 2007.
4
.5
Amendment No. 3 to Investors Rights Agreement, dated
December 17, 2007.
5
.1*
Opinion of Fredrikson & Byron, P.A.
10
.1
2007 Equity Incentive Plan.**
10
.2
Form of Incentive Stock Option Agreement under the 2007 Equity
Incentive Plan.**
10
.3
Form of Non-Qualified Stock Option Agreement under the 2007
Equity Incentive Plan.**
10
.4
Form of Restricted Stock Agreement under the 2007 Equity
Incentive Plan.**
10
.5
Form of Restricted Stock Unit Agreement under the 2007 Equity
Incentive Plan.**
10
.6
Form of Performance Share Award under the 2007 Equity Incentive
Plan.**
10
.7
Form of Performance Unit Award under the 2007 Equity Incentive
Plan.**
10
.8
Form of Stock Appreciation Rights Agreement under the 2007
Equity Incentive Plan.**
10
.9
2003 Stock Option Plan.**
10
.10
Form of Incentive Stock Option Agreement under the 2003 Stock
Option Plan.**
10
.11
Form of Non-Qualified Stock Option Agreement under the 2003
Stock Option Plan.**
10
.12
1991 Stock Option Plan.**
10
.13
Form of Non-Qualified Stock Option Agreement outside the 1991
Stock Option Plan.**
10
.14
Employment Agreement, dated December 19, 2006, by and
between the registrant and David L. Martin.**
10
.15
Amended and Restated Employment Agreement, dated May 31,
2003, by and between the registrant and Michael J. Kallok.**
10
.16
Amendment to Employment Agreement, dated December 19, 2007,
by and between the registrant and Michael J. Kallok.**
10
.17
Form of Standard Employment Agreement.**
10
.18
Lease, dated September 26, 2005, by and between the
registrant and Industrial Equities Group LLC.
10
.19
First Amendment to the Lease, dated February 20, 2007, by
and between the registrant and Industrial Equities Group LLC.
10
.20
Second Amendment to the Lease, dated March 9, 2007, by and
between the registrant and Industrial Equities Group LLC.
10
.21
Third Amendment to the Lease, dated September 26, 2007, by
and between the registrant and Industrial Equities Group LLC.
23
.1
Consent of PricewaterhouseCoopers, LLP, Independent Registered
Public Accounting Firm.
23
.2*
Consent of Fredrikson & Byron, P.A. (included in
Exhibit 5.1).
24
.1
Power of Attorney (included on the signature page).
*
To be filed by amendment.
**
Indicates management contract or
compensatory plan or arrangement.
/s/ James E. Flaherty | ||||
James E. Flaherty | ||||
Chief Financial Officer | ||||
- 2 -
- 2 -
- 3 -
- 4 -
- 5 -
- 6 -
- 7 -
- 8 -
- 9 -
- 10 -
- 11 -
- 12 -
- 13 -
Anniversary of First | Optional | |
Issuance of | Redemption | |
Preferred Stock | ||
5th
|
30% of the original amount of such holders shares | |
|
||
6th
|
30% of the original amount of such holders shares | |
|
||
7th
|
40% of the original amount of such holders shares |
(i) | the price per share paid for the Preferred Stock, plus all accrued and unpaid dividends; or | ||
(ii) | the fair market value of the Preferred Stock at the time of redemption. Such value shall be determined at the time of the redemption by a professional appraiser acceptable to both the corporation and the two (2) Preferred Stock Directors. |
- 14 -
- 15 -
- 16 -
- 17 -
Years From Transaction Date | Days After 1.5 Years (1) | Cap Multiple (2) | ||||||
0 1.5
|
0 | 2.00 | ||||||
2
|
183 | 2.29 | ||||||
2.5
|
365 | 2.57 | ||||||
3
|
548 | 2.86 | ||||||
3.5
|
730 | 3.14 | ||||||
4
|
913 | 3.43 | ||||||
4.5
|
1095 | 3.71 | ||||||
5*
|
1278 | 4.00 |
(1) | Assumes 365 days in a year. | |
(2) | Cap multiple equals maximum investment return multiple (including any paid or accrued dividends and original investment) on original investment amount. | |
(3) | Includes rounding. |
Minimum Cap Multiple
|
2 | |
Maximum Cap Multiple
|
4 | |
Days After 1.5 Years (Liquidation Event)
|
548 | |
Days After 1.5 Years (5 Years)
|
1278 | |
|
||
Participation Cap Multiple
|
2 + (4-2) * (548/1278) = 2.86 |
1
2
3
4
(a) | Call of roll | ||
(b) | Proof of due notice of meeting or waiver of notice | ||
(c) | Determination of existence of quorum | ||
(d) | Reading and disposal of any unapproved minutes | ||
(e) | Reports of officers and committees | ||
(f) | Election of directors | ||
(g) | Unfinished business | ||
(h) | New business | ||
(i) | Adjournment. |
5
6
(a) | Roll call | ||
(b) | Proof of due notice of meeting or waiver of notice, or unanimous presence and declaration by presiding chairman | ||
(c) | Determination of existence of quorum | ||
(d) | Reading and disposal of any unapproved minutes | ||
(e) | Reports of officers and committees | ||
(f) | Election of officers | ||
(g) | Unfinished business | ||
(h) | New business | ||
(i) | Adjournment. |
7
8
9
10
11
12
/s/ David L. Martin | ||||
David L. Martin, Chief Executive Officer | ||||
/s/
James Flaherty
|
||
|
||
|
13
Page | ||||||
1.
|
Automatic and Demand Registration | 3 | ||||
|
||||||
2.
|
Piggyback Registration | 4 | ||||
|
||||||
3.
|
Registration on Form S-3 | 5 | ||||
|
||||||
4.
|
Holdback Agreement | 5 | ||||
|
||||||
5.
|
Registration Procedures | 6 | ||||
|
||||||
6.
|
Expenses | 10 | ||||
|
||||||
7.
|
Indemnification and Contribution | 10 | ||||
|
||||||
8.
|
Changes in Capital Stock | 12 | ||||
|
||||||
9.
|
Rule 144 Reporting | 13 | ||||
|
||||||
10.
|
Representations and Warranties of the Company | 13 | ||||
|
||||||
11.
|
Successors and Assigns | 13 | ||||
|
||||||
12.
|
Limitations on Subsequent Registration Rights | 14 | ||||
|
||||||
13.
|
Information Rights | 14 | ||||
|
||||||
14.
|
Auditing Firm | 14 | ||||
|
||||||
15.
|
Special Actions | 14 | ||||
|
||||||
16.
|
Compensation Committee | 15 | ||||
|
||||||
17.
|
Enforcement | 15 | ||||
|
||||||
18.
|
Miscellaneous | 16 |
-i-
2
3
4
(A) | a holder or holders of Series A Registrable Securities then outstanding request that the Company file a registration statement on Form S-3 or any successor thereto for a public offering of all or any portion of the Series A Registrable Securities held by such requesting holder or holders, the reasonably anticipated aggregate price to the public of which would exceed $1,000,000; and | ||
(B) | the Company is a registrant entitled to use Form S-3 or any successor thereto to register such Series A Registrable Securities, |
5
6
7
8
9
10
11
12
13
14
15
16
CARDIOVASCULAR SYSTEMS, INC.
|
||||
By: | /s/ Michael J. Kallok | |||
Name: | Michael J. Kallok, Ph.D. | |||
Title: | Chief Executive Officer |
17
EASTON HUNT CAPITAL PARTNERS, L.P. | ||||||
|
||||||
|
By: | EHC GP, L.P. its General Partner | ||||
|
By: | EHC GP, Inc., its General Partner | ||||
|
||||||
|
By: |
/s/
Charles B. Hughes
|
||||
|
Name: Charles B. Hughes | |||||
|
Title: Vice President | |||||
|
||||||
EASTON CAPITAL PARTNERS, LP | ||||||
|
||||||
|
By: | ECP GP, LLC | ||||
|
By: | ECP GP, Inc., its Manager | ||||
|
||||||
|
By: |
/s/
Charles B. Hughes
|
||||
|
Name: Charles B. Hughes | |||||
|
Title: Vice President |
18
MAVERICK FUND, L.D.C. | ||||||
|
||||||
|
By: | Maverick Capital, Ltd. | ||||
|
Investment Advisor for Each Fund | |||||
|
||||||
|
By: |
/s/
John T. McCafferty
|
||||
|
Title: Limited Partner & General Counsel | |||||
|
||||||
MAVERICK FUND USA, LTD. | ||||||
|
||||||
|
By: | Maverick Capital, Ltd. | ||||
|
Investment Advisor for Each Fund | |||||
|
||||||
|
By: |
/s/
John T. McCafferty
|
||||
|
Title: Limited Partner & General Counsel | |||||
|
||||||
MAVERICK FUND II, LTD. | ||||||
|
||||||
|
By: | Maverick Capital, Ltd. | ||||
|
Investment Advisor for Each Fund | |||||
|
||||||
|
By: |
/s/
John T. McCafferty
|
||||
|
Title: Limited Partner & General Counsel |
19
MITSUI & CO. VENTURE PARTNERS II, L.P. | ||||||
|
||||||
|
By: | Mitsui & Co. Venture Partners, Inc. | ||||
|
Its General Partner | |||||
|
||||||
|
By: | /s/ Koichi Ando | ||||
|
||||||
|
Name: Koichi Ando | |||||
|
Title: President & CEO |
20
GDN HOLDINGS LLC | ||||||
|
||||||
|
By: | /s/ John Flottmeier | ||||
|
||||||
|
Name: John Flottmeier | |||||
|
Title: Attorney-in-fact for Glen D. | |||||
|
Nelson, Governor and Chief | |||||
|
Managing Member | |||||
|
||||||
CURTIS L. CARLSON FAMILY FOUNDATION | ||||||
|
||||||
|
By: | /s/ John Flottmeier | ||||
|
||||||
|
Name: John Flottmeier | |||||
|
Title: Authorized Agent | |||||
|
||||||
CONVERTIBLE NOTE HOLDERS | ||||||
|
||||||
|
By: | /s/ Michael J. Kallok | ||||
|
||||||
|
Name: Michael J. Kallok, Ph.D. | |||||
|
Title: Attorney-in-fact for convertible | |||||
|
note holders set forth on | |||||
|
Schedule A |
21
Series A | Series A | Aggregate | ||||||||||
Preferred | Preferred | Purchase | ||||||||||
Name of Investor | Shares | Warrant | Price | |||||||||
Easton Hunt Capital Partners, L.P.
|
612,960 | 87,040 | $ | 3,500,000.00 | ||||||||
Easton Hunt Partners, LP
|
612,960 | 87,040 | $ | 3,500,000.00 | ||||||||
Maverick Fund, L.D.C.
|
770,212 | 109,370 | $ | 4,397,910.52 | ||||||||
Maverick Fund USA, Ltd.
|
310,952 | 44,155 | $ | 1,775,535.92 | ||||||||
Maverick Fund II, Ltd.
|
670,149 | 95,161 | $ | 3,826,550.79 | ||||||||
Mitsui & Co. Venture Partners II,
L.P.
|
675,148 | 95,871 | $ | 3,855,095.96 | ||||||||
|
||||||||||||
Total
|
3,652,381 | 518,637 | $ | 20,855,093.19 |
22
Series A | Series A | Aggregate | ||||||||||
Preferred | Preferred | Purchase | ||||||||||
Name of Stockholders | Shares | Warrant | Price | |||||||||
Leonard Samuels and Leah
Kaplan-Samuels JTWROS
|
35,805 | 5,084 | $ | 204,444.44 | ||||||||
Jeffrey Reiss
|
7,226 | 1,026 | $ | 41,262.22 | ||||||||
Eric L. Reynolds
|
5,420 | 770 | $ | 30,946.67 | ||||||||
Gary M. Petrucci (to be held by
Piper Jaffray as Cust FBO Gary M.
Petrucci)
|
36,124 | 5,130 | $ | 206,266.67 | ||||||||
Robert J. Foster
|
17,890 | 2,540 | $ | 102,157.77 | ||||||||
Michael J. Murray Investments, LLC
|
15,443 | 2,193 | $ | 88,181.43 | ||||||||
Christopher D. Yost
|
4,507 | 640 | $ | 25,733.33 | ||||||||
Loyal M. Peterman, Jr.
|
20,564 | 2,920 | $ | 117,422.98 | ||||||||
Dave B. Radovich
|
7,203 | 1,023 | $ | 41,128.89 | ||||||||
Daryl L. Peterman
|
1,027 | 146 | $ | 5,863.54 | ||||||||
Michael J. Antonello
|
35,937 | 5,103 | $ | 205,200.00 | ||||||||
David Brink
|
10,260 | 1,457 | $ | 58,584.60 | ||||||||
Thomas Kelleher
|
20,444 | 2,903 | $ | 116,737.78 | ||||||||
Pearson M. Grieve
|
8,949 | 1,271 | $ | 51,100.00 | ||||||||
Jay M. Ovsak (to be held by
Millennium Trust Co. as Cust FBO
Jay M. Ovsak)
|
4,478 | 636 | $ | 25,572.22 | ||||||||
Gerald E. Bowers (to be held by
Piper Jaffray as Cust FBO Gerald E.
Bowers)
|
8,947 | 1,270 | $ | 51,088.89 | ||||||||
Michael D. Aafedt (to be held by
Piper Jaffray as Cust FBO Michael
D. Aafedt)
|
4,473 | 635 | $ | 25,538.89 | ||||||||
Paul W. Schaffer
|
10,216 | 1,451 | $ | 58,330.82 | ||||||||
Larry Brandt and Judy Brandt JTWROS
|
8,943 | 1,270 | $ | 51,066.67 | ||||||||
James R. Gray (to be held by Piper
Jaffray as Cust FBO James R. Gray)
|
3,064 | 435 | $ | 17,495.44 | ||||||||
Patrick J. Toutant (to be held by
Piper Jaffray as Cust FBO Patrick
J. Toutant)
|
15,320 | 2,175 | $ | 87,477.20 | ||||||||
CSI Investment, LLC
|
16,402 | 2,329 | $ | 93,654.15 | ||||||||
Morgan Schlief
|
3,569 | 507 | $ | 20,377.78 |
23
Series A | Series A | Aggregate | ||||||||||
Preferred | Preferred | Purchase | ||||||||||
Name of Stockholders | Shares | Warrant | Price | |||||||||
Robert K. McCrea, Jr. (to be held
by Piper Jaffray as Cust FBO Robert
K. McCrea, Jr.)
|
5,351 | 760 | $ | 30,553.33 | ||||||||
Michael Adrian
|
8,943 | 1,270 | $ | 51,066.67 | ||||||||
Michael Barish
|
44,474 | 6,315 | $ | 253,944.44 | ||||||||
Cardio Partners, LLC
|
50,722 | 7,203 | $ | 289,623.89 | ||||||||
H. Leigh Severance
|
22,208 | 3,154 | $ | 126,805.56 | ||||||||
H. Leigh Severance, Trustee, H. L.
Severance, Inc. Profit Sharing Plan
and Trust
|
13,325 | 1,892 | $ | 76,083.33 | ||||||||
H. Leigh Severance, Trustee, H. L.
Severance, Inc. Pension Plan and
Trust
|
8,883 | 1,261 | $ | 50,722.22 | ||||||||
TMP, LLLP
|
53,217 | 7,557 | $ | 303,866.67 | ||||||||
Andrew J. Iseman and Shelly D.
Iseman JTWROS
|
17,657 | 2,507 | $ | 100,822.22 | ||||||||
Polly McCrea
|
5,297 | 752 | $ | 30,246.67 | ||||||||
Steven J. Healy
|
8,815 | 1,252 | $ | 50,333.33 | ||||||||
David W. Smith Investments, LLC
|
5,281 | 750 | $ | 30,153.33 | ||||||||
Christopher J. Wagner (to be held by
Piper Jaffray as Cust FBO
Christopher J. Wagner SEP IRA)
|
4,387 | 623 | $ | 25,050.00 | ||||||||
GDN Holdings LLC
|
131,349 | 18,652 | $ | 750,000.00 | ||||||||
Curtis L. Carlson Family Foundation
|
43,783 | 6,217 | $ | 250,000.00 | ||||||||
Total
|
725,903 | 103,079 | $ | 4,144,904.04 |
24
1. | Defined Terms. Capitalized terms not defined herein shall have the meanings ascribed to them in the Investors Rights Agreement. | ||
2. | Schedule A is hereby amended in its entirety as follows and ITX shall be deemed an Investor as that term is used in the Investors Rights Agreement: |
Series A | Series A | Aggregate | ||||||||||
Name of Investor | Preferred Shares | Preferred Warrant | Purchase Price | |||||||||
Easton Hunt Capital Partners, L.P.
|
612,960 | 87,040 | $ | 3,500,000.00 | ||||||||
Easton Hunt Partners, LP
|
612,960 | 87,040 | $ | 3,500,000.00 | ||||||||
Maverick Fund, L.D.C.
|
770,212 | 109,370 | $ | 4,397,910.52 | ||||||||
Maverick Fund USA, Ltd.
|
310,952 | 44,155 | $ | 1,775,535.92 | ||||||||
Maverick Fund II, Ltd.
|
670,149 | 95,161 | $ | 3,826,550.79 | ||||||||
Mitsui & Co. Venture Partners II, L.P.
|
675,148 | 95,871 | $ | 3,855,095.96 | ||||||||
ITX International Equity Corp.
|
350,263 | 49,737 | $ | 2,000,000.00 | ||||||||
Total
|
4,002,644 | 568,374 | $ | 22,855,093.19 |
1
3. | This Amendment No. 1 may be executed in any number of original or facsimile counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Any counterpart or other signature to this Amendment No. 1 that is delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery by such party of this Amendment No. 1. | ||
4. | Except as set forth herein, all other terms and conditions of the Investors Rights Agreement remain the same. |
2
CARDIOVASCULAR SYSTEMS, INC.
|
||||
By: | /s/ Michael J. Kallok | |||
Name: | Michael J. Kallok, Ph.D. | |||
Title: | Chief Executive Officer and President | |||
3
EASTON HUNT CAPITAL PARTNERS, L.P. | ||||||
|
||||||
|
By: | EHC GP, L.P. its General Partner | ||||
|
By: | EHC GP, Inc., its General Partner | ||||
|
||||||
|
By: | /s/ John H. Friedman | ||||
|
|
|||||
|
Title: President | |||||
|
||||||
EASTON CAPITAL PARTNERS, LP | ||||||
|
||||||
|
By: | ECP GP, LLC | ||||
|
By: | ECP GP, Inc., its Manager | ||||
|
||||||
|
By: | /s/ John H. Friedman | ||||
|
|
|||||
|
Title: President |
4
MAVERICK FUND, L.D.C.
|
||||
By: | Maverick Capital, Ltd. | |||
Its Investment Advisor | ||||
By: | /s/ Christy Wyskiel | |||
Name: | Christy Wyskiel | |||
Title: | Managing Director | |||
MAVERICK FUND USA, LTD.
|
||||
By: | Maverick Capital, Ltd. | |||
Its Investment Advisor | ||||
By: | /s/ Christy Wyskiel | |||
Name: | Christy Wyskiel | |||
Title: | Managing Director | |||
MAVERICK FUND II, LTD.
|
||||
By: | Maverick Capital, Ltd. | |||
Its Investment Advisor | ||||
By: | /s/ Christy Wyskiel | |||
Name: | Christy Wyskiel | |||
Title: | Managing Director | |||
5
MITSUI & CO. VENTURE PARTNERS II, L.P.
|
||||
By: | Mitsui & Co. Venture Partners, Inc. | |||
Its General Partner | ||||
By: | /s/ Koichi Ando | |||
Name: | Koichi Ando | |||
Title: | President & CEO | |||
6
ITX INTERNATIONAL EQUITY CORP.
|
||||
By: | /s/ Takehito Jimbo | |||
Name: | Takehito Jimbo | |||
Title: | President and Chief Executive Officer | |||
7
1. | Defined Terms. Capitalized terms not defined herein shall have the meanings ascribed to them in the Investors Rights Agreement. | ||
2. | The Series A-1 Convertible Preferred Stock sold in the Offering shall be deemed additional shares of Series A Convertible Preferred Stock for purposes of the Investors Rights Agreement. |
1
3. | Schedule A is hereby amended in its entirety as follows and each of the Series A-1 Investors shall be deemed an Investor as that term is used in the Investors Rights Agreement: |
Series A | Series A | Series A-1 | ||||||||||||||
Preferred | Preferred | Preferred | Aggregate | |||||||||||||
Name of Investor | Shares | Warrant | Shares | Purchase Price | ||||||||||||
Easton Hunt Capital Partners, L.P.
|
612,960 | 87,040 | | | ||||||||||||
Easton Hunt Partners, LP
|
612,960 | 87,040 | | | ||||||||||||
Maverick Fund, L.D.C.
|
770,212 | 109,370 | 103,524 | $ | 879,954.00 | |||||||||||
Maverick Fund USA, Ltd.
|
310,952 | 44,155 | 41,795 | $ | 355,257.50 | |||||||||||
Maverick Fund II, Ltd.
|
670,149 | 95,161 | 90,075 | $ | 765,637.50 | |||||||||||
Mitsui & Co. Venture Partners II, L.P.
|
675,148 | 95,871 | 117,647 | $ | 999,999.50 | |||||||||||
ITX International Equity Corp.
|
350,263 | 49,737 | 47,079 | $ | 400,171.50 | |||||||||||
Abrasive Technology, Inc. Profit Shar Pl
|
| | 32,000 | $ | 272,000.00 | |||||||||||
Michael Adrian
|
8,943 | 1,270 | 3,552 | $ | 30,200.00 | |||||||||||
Mark R. Alvig
|
| | 6,000 | $ | 51,000.00 | |||||||||||
Shahla Amiri
|
| | 5,000 | $ | 42,500.00 | |||||||||||
Anthony Angelini
|
| | 12,000 | $ | 102,000.00 | |||||||||||
Michael J. Antonello
|
35,937 | 5,103 | 18,255 | $ | 155,167.50 | |||||||||||
Massoud Arbabzadeh, MD
|
| | 5,882 | $ | 49,997.00 | |||||||||||
Naoum Baladi
|
| | 28,000 | $ | 238,000.00 | |||||||||||
Michael S. Barish
|
44,474 | 6,315 | 11,928 | $ | 101,388.00 | |||||||||||
Frederick L. Betz and
Cynthia A. Betz, JTWROS
|
| | 6,000 | $ | 51,000.00 | |||||||||||
RBC Dain Rauscher Cust
FBO Frederick L. Betz IRA
|
| | 9,500 | $ | 80,750.00 | |||||||||||
Charles Schwab & Co. Cust
FBO John A. Beyer IRA
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Thomas M. Bies and
Edith C. Bies, JTWROS
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Gerry Black
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Brent G. Blackey
|
| | 5,900 | $ | 50,150.00 | |||||||||||
Pensco Trust Company Cust
FBO Michael J. Bogart IRA
|
| | 4,900 | $ | 41,650.00 | |||||||||||
William Bold
|
| | 3,600 | $ | 30,600.00 | |||||||||||
John R. Borrell
|
| | 11,764 | $ | 99,994.00 | |||||||||||
Robert Brady
|
| | 9,000 | $ | 76,500.00 | |||||||||||
Larry Brandt and Judy Brandt JTWROS
|
8,943 | 1,270 | 4,120 | $ | 35,020.00 | |||||||||||
David Brink
|
10,260 | 1,457 | 17,000 | $ | 144,500.00 | |||||||||||
Gerald F. Bubnick
|
| | 2,942 | $ | 25,007.00 | |||||||||||
Brian P. Burns, Jr.
|
| | 7,500 | $ | 63,750.00 | |||||||||||
Marlyn and Margaret Buss, Trustees,
Marlyn and Margaret Buss Rev.
Living Trust dated 4/12/04
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Wedbush Morgan Securities Cust
FBO Richard E. Bye IRA
|
| | 7,050 | $ | 59,925.00 | |||||||||||
Timothy Byrne and Sandra Byrne,
Trustees, Byrne Family Trust
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Christopher Campbell
|
| | 2,941 | $ | 25,000.00 |
2
Series A | Series A | Series A-1 | ||||||||||||||
Preferred | Preferred | Preferred | Aggregate | |||||||||||||
Name of Investor | Shares | Warrant | Shares | Purchase Price | ||||||||||||
H. Daniel Caparo
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Charles Schwab & Co., Inc. Cust
FBO Franklin G. Capitanini IRA
|
| | 5,800 | $ | 49,300.00 | |||||||||||
Joseph Anthony Cardenas
|
| | 29,400 | $ | 249,900.00 | |||||||||||
Curtis L. Carlson Family Foundation
|
43,783 | 6,217 | 29,414 | $ | 250,019.00 | |||||||||||
Charles Schwab & Co., Inc. Cust
FBO Steven W. Carter IRA
|
| | 5,882 | $ | 50,000.00 | |||||||||||
CAVA Partners, LLC
|
| | 5,882 | $ | 50,000.00 | |||||||||||
John F. Cavanaugh
|
| | 3,000 | $ | 25,500.00 | |||||||||||
Vijay T. Char
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Scott Chase
|
| | 17,647 | $ | 150,000.00 | |||||||||||
Richard J. Cherry and
JoAnn Cherry, JTWROS
|
| | 2,942 | $ | 25,007.00 | |||||||||||
George Jean Chilazi
|
| | 6,777 | $ | 57,604.50 | |||||||||||
Charles Schwab & Co., Inc. Cust
FBO Bruce A. Church IRA
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Pershing LLC Custodian
FBO Walter Douglas Clark IRA
|
| | 5,882 | $ | 50,000.00 | |||||||||||
David E. Cohen, M.D.
|
| | 5,884 | $ | 50,014.00 | |||||||||||
Sean Collins
|
| | 11,765 | $ | 100,002.50 | |||||||||||
Wachovia Securities Cust
FBO Sean Collins IRA
|
| | 12,941 | $ | 110,000.00 | |||||||||||
Tom Correia
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Ralph D. Crawford
|
| | 11,750 | $ | 99,875.00 | |||||||||||
Carla C. Dahl
|
| | 590 | $ | 5,015.00 | |||||||||||
Thomas P. Davis, MD
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Keith Donnan
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Peter S. Dougan, M.D.
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Charles Schwab & Co., Inc. Cust
FBO Mark W. DuPont IRA
|
| | 6,000 | $ | 51,000.00 | |||||||||||
Keith M. Eastman
|
| | 4,000 | $ | 34,000.00 | |||||||||||
Joane Evans and
Lyell Evans JTWROS
|
| | 2,942 | $ | 25,007.00 | |||||||||||
Ryan E. Evans
|
| | 5,883 | $ | 50,005.50 | |||||||||||
Gary Jay Fishbein, MD
|
| | 6,000 | $ | 51,000.00 | |||||||||||
Jeffrey Fleming
|
| | 2,942 | $ | 25,007.00 | |||||||||||
James Flynn
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Linda M. Foster
|
17,890 | 2,540 | 2,404 | $ | 20,434.00 | |||||||||||
Michael D. Fugit, M.D.
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Michael Furlong
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Geoffrey T. Gainor
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Dennis R. Gancarz
|
| | 5,882 | $ | 50,000.00 | |||||||||||
GDN Holdings, LLC
|
131,349 | 18,652 | 41,913 | $ | 356,260.50 | |||||||||||
Kenneth L. Gibbs, MD and
Beverly T. Gibbs JTWROS
|
| | 2,950 | $ | 25,075.00 | |||||||||||
Scott Kean Goodman
|
| | 19,059 | $ | 162,001.50 | |||||||||||
UBS Financial Services, Inc. Cust
FBO R. Hunt Greene IRA
|
| | 6,500 | $ | 55,250.00 |
3
Series A | Series A | Series A-1 | ||||||||||||||
Preferred | Preferred | Preferred | Aggregate | |||||||||||||
Name of Investor | Shares | Warrant | Shares | Purchase Price | ||||||||||||
Daniel Patrick Greenleaf and
Diane Francis Greenleaf
|
| | 10,000 | $ | 85,000.00 | |||||||||||
Barry K. Griffith
|
| | 18,750 | $ | 159,375.00 | |||||||||||
Edith Guglielmi
|
| | 7,060 | $ | 60,010.00 | |||||||||||
David J. Gunther
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Rob Hadley
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Fiserv ISS & Co. Cust
FBO Rob Hadley IRA
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Scott Robert Hannum
|
| | 11,764 | $ | 100,000.00 | |||||||||||
Scott Merle Hanson
|
| | 600 | $ | 5,100.00 | |||||||||||
Steven J. Healy
|
8,815 | 1,252 | 9,431 | $ | 80,173.50 | |||||||||||
Syntel, LLC Profit Sharing Plan FBO
Alfred Harry Herget, Alfred Harry
Herget, Trustee
|
| | 5,882 | $ | 49,997.00 | |||||||||||
Richard R. Heuser and Sharon L.Heuser,
Trustees, R&S Trust dated 8/3/99
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Charles Schwab & Co., Inc. Cust
FBO David Richard Hewitt IRA
|
| | 13,000 | $ | 110,500.00 | |||||||||||
Robert C. Hinckle
|
| | 17,647 | $ | 150,000.00 | |||||||||||
William Hoffman and
Lilia Helen Hoffman JTWROS
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Jeremy Houseman
|
| | 2,942 | $ | 25,007.00 | |||||||||||
Derek J. Howe
|
| | 8,000 | $ | 68,000.00 | |||||||||||
Wende S. Hutton, Trustee,
Hutton Living Trust dtd 12/10/96
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Innovasc, LLC
|
| | 4,500 | $ | 38,250.00 | |||||||||||
Michael Iovanni and
Linda Iovanni, JTWROS
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Andrew J.
Iseman and Shelly D. Iseman JTWROS
|
17,657 | 2,507 | 7,108 | $ | 60,418.00 | |||||||||||
Sean Janzer
|
| | 11,765 | $ | 100,000.00 | |||||||||||
Sara Jay
|
| | 5,900 | $ | 50,150.00 | |||||||||||
Takemito Jimbo
|
| | 11,765 | $ | 100,002.50 | |||||||||||
Charles David Joffe, MD
|
| | 6,000 | $ | 51,000.00 | |||||||||||
Darla R. Johnson and
John A. Beyer JTWROS
|
| | 3,529 | $ | 30,000.00 | |||||||||||
Elias H. Kassab
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Salva Kassab and
Suha Kassab JTWROS
|
| | 3,529 | $ | 30,000.00 | |||||||||||
KD Holding, Inc.
|
| | 6,000 | $ | 51,000.00 | |||||||||||
Puneet K. Khanna and
Monica Khanna JTWROS
|
| | 17,647 | $ | 150,000.00 | |||||||||||
Yazan Khatib
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Farhad Khosravi, Ttee, Farhad Khosravi
and Flora Shirzad Khosravi Trust U/A
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Bertram W. Klein
|
| | 10,000 | $ | 85,000.00 | |||||||||||
E*Trade as Cust
FBO Joseph F. Koziol IRA
|
| | 5,883 | $ | 50,005.50 |
4
Series A | Series A | Series A-1 | ||||||||||||||
Preferred | Preferred | Preferred | Aggregate | |||||||||||||
Name of Investor | Shares | Warrant | Shares | Purchase Price | ||||||||||||
Al Kraus and
Eileen Kraus JTWROS
|
| | 8,825 | $ | 75,012.50 | |||||||||||
Al Kraus
|
| | 2,942 | $ | 25,007.00 | |||||||||||
David Kraus, M.D.
|
| | 3,000 | $ | 25,500.00 | |||||||||||
Scott Kraus
|
| | 22,600 | $ | 192,100.00 | |||||||||||
John T. Kuzara
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Habib John Lahlouh
|
| | 6,000 | $ | 51,000.00 | |||||||||||
David Lamadrid
|
| | 2,942 | $ | 25,007.00 | |||||||||||
Aaron Lew
|
| | 17,000 | $ | 144,500.00 | |||||||||||
MLPF&S Cust FBO Aaron Lew IRA
|
| | 23,529 | $ | 199,996.50 | |||||||||||
Robert Lindmeier and
Sheryl Lindmeier
|
| | 11,764 | $ | 100,000.00 | |||||||||||
William Andrew Lindmeier and
Susan J. Lindmeier JTWROS
|
| | 5,000 | $ | 42,500.00 | |||||||||||
Wells Fargo Bank, N.A. as Trustee of the
Donald M. Longlet Rev Trust
|
| | 11,764 | $ | 99,994.00 | |||||||||||
Louis Lopez, MD
|
| | 11,765 | $ | 100,000.00 | |||||||||||
Richard A. Lotti
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Jonathan K. Lubkert
|
| | 600 | $ | 5,100.00 | |||||||||||
Kenneth H. Lubkert and
Elizabeth R. Lubkert JTWROS
|
| | 4,706 | $ | 40,001.00 | |||||||||||
Satyaprakash Makam
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Louis Manfredo and
Genevieve Manfredo JTWROS
|
| | 2,942 | $ | 25,007.00 | |||||||||||
Carol A. Martin, Sole Trustee of the
Martin Family Revocable Trust
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Lynne Martin and
Tevis P. Martin III
|
| | 1,200 | $ | 10,200.00 | |||||||||||
MaxBee Holding Company LLC
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Gary McCord
|
| | 17,647 | $ | 150,000.00 | |||||||||||
Christopher W. McNeill
|
| | 5,882 | $ | 50,000.00 | |||||||||||
John J. Mehalchin
|
| | 11,765 | $ | 100,002.50 | |||||||||||
Jacob P. Mercer
|
| | 3,000 | $ | 25,500.00 | |||||||||||
Amir Motarjeme, Trustee of the Amir
Motarjeme Profit Sharing Plan FBO
Amir Motarjeme
|
| | 5,882 | $ | 49,997.00 | |||||||||||
Padmini Natarajan and
B. R. Natarajan JTWROS
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Fiserv ISS & Co. Cust
FBO Thomas P. Neslund IRA
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Thomas P. Neslund
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Hajime Oshita
|
| | 2,400 | $ | 20,400.00 | |||||||||||
Marco Ovikian and
Catherine Ovikian, JTWROS
|
| | 8,823 | $ | 75,000.00 | |||||||||||
Ashish Pal
|
| | 30,000 | $ | 255,000.00 | |||||||||||
Tom Pardubeck
|
| | 3,000 | $ | 25,500.00 | |||||||||||
Daryl L. Peterman
|
1,027 | 146 | 5,000 | $ | 42,500.00 | |||||||||||
Loyal M. Peterman, Jr.
|
20,564 | 2,920 | 16,124 | $ | 137,054.00 | |||||||||||
John N. Phillips
|
| | 5,882 | $ | 50,000.00 |
5
Series A | Series A | Series A-1 | ||||||||||||||
Preferred | Preferred | Preferred | Aggregate | |||||||||||||
Name of Investor | Shares | Warrant | Shares | Purchase Price | ||||||||||||
Cassandra Piippo
|
| | 589 | $ | 5,006.50 | |||||||||||
Pinnacle Investment Group, LLC
|
| | 9,000 | $ | 76,500.00 | |||||||||||
Sridhar Prativadi
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Rolando E. Prieto
|
| | 2,941 | $ | 24,998.50 | |||||||||||
Dave B. Radovich
|
7,203 | 1,023 | 25,169 | $ | 213,936.50 | |||||||||||
Robert K. Ranum
|
| | 2,941 | $ | 24,998.50 | |||||||||||
Ambika Ravindran
|
| | 12,000 | $ | 102,000.00 | |||||||||||
Redmile Capital, LP
|
| | 7,569 | $ | 64,341.00 | |||||||||||
Redmile Ventures, LLC
|
| | 5,882 | $ | 49,997.00 | |||||||||||
Redmile Capital Offshore, Ltd.
|
| | 27,725 | $ | 235,658.00 | |||||||||||
Michael Reilly and Lisa Reilly
|
| | 11,764 | $ | 99,994.00 | |||||||||||
Ronald Reuss and
Rita Reuss JTWROS
|
| | 3,000 | $ | 25,500.00 | |||||||||||
Stacey Rickert
|
| | 10,000 | $ | 85,000.00 | |||||||||||
Benjamin S. Rinkey
|
| | 4,000 | $ | 34,000.00 | |||||||||||
Caleb Rivera
|
| | 2,940 | $ | 24,990.00 | |||||||||||
Edward Todd Robbins
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Cecilia S.
Roberts, Trustee David K. Roberts Residuary Trust
|
| | 21,200 | $ | 180,200.00 | |||||||||||
David K. Roberts
|
| | 11,800 | $ | 100,300.00 | |||||||||||
Todd A. Roberts and
Debra D. Roberts
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Peter Lars Runquist
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Paul W. Schaffer
|
10,216 | 1,451 | 20,000 | $ | 170,000.00 | |||||||||||
James W. Schlesing and
Dona Connelly
|
| | 7,059 | $ | 60,001.50 | |||||||||||
Marc S. Schwartzberg
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Gary M. Scott and Malisa M. Scott, Ttees
of the Gary and Malisa Scott Rev
Trust
|
| | 29,500 | $ | 250,750.00 | |||||||||||
R. Randolph Scott
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Gino J. Sedillo, MD
|
| | 5,882 | $ | 50,000.00 | |||||||||||
David Shaskey
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Pamela Shaw and
James Shaw JTWROS
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Neil J. Sheehan
|
| | 2,000 | $ | 17,000.00 | |||||||||||
Chiemsee Money Purchase Plan, dtd
03/11/97, FBO Robert T. Shepard
|
| | 6,000 | $ | 51,000.00 | |||||||||||
Robert Shepard and Celia Shepard, Ttees
of the Shepard Family Trust dated
2/1/99
|
| | 6,000 | $ | 51,000.00 | |||||||||||
Harvinder Paul Singh, MD
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Kevin Spanier
|
| | 1,200 | $ | 10,200.00 | |||||||||||
Kathleen A. Stauter
|
| | 1,775 | $ | 15,087.50 | |||||||||||
Steven Mendelow, Trustee, Teledata
Financial Services Corp. Profit Shar Plan
|
| | 23,529 | $ | 200,000.00 | |||||||||||
Charles Schwab & Co., Inc. Cust
FBO Robert J. Thatcher IRA
|
| | 12,000 | $ | 102,000.00 | |||||||||||
Kimberley J. Thomas and
A. Conrade Thomas JTWROS
|
| | 5,890 | $ | 50,065.00 |
6
Series A | Series A | Series A-1 | ||||||||||||||
Preferred | Preferred | Preferred | Aggregate | |||||||||||||
Name of Investor | Shares | Warrant | Shares | Purchase Price | ||||||||||||
TMP, LLLP
|
53,217 | 7,557 | 56,768 | $ | 482,529.00 | |||||||||||
Top Medical Holding B.V.
|
| | 4,000 | $ | 34,000.00 | |||||||||||
Leslie Trigg and Michael Trigg,
Trustees,
Trigg Family Trust
|
| | 2,942 | $ | 25,007.00 | |||||||||||
Edwin C. Tyska
|
| | 11,765 | $ | 100,000.00 | |||||||||||
Hector J. Vasquez and
Sandra L. Vasquez
|
| | 3,000 | $ | 25,500.00 | |||||||||||
Greg Vella and Michelle Vella, Ttees,
Greg Vella and Michelle Vella Family
Tr
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Chris Vieira
|
| | 4,588 | $ | 39,000.00 | |||||||||||
Douglas A. Waldo, MD
|
| | 3,000 | $ | 25,500.00 | |||||||||||
Joseph A. Wasselle and Stacie Poole
|
| | 2,941 | $ | 24,998.50 | |||||||||||
Charles Schwab & Co., Inc. Cust
FBO Burton M. Waxman IRA
|
| | 7,058 | $ | 60,000.00 | |||||||||||
Wellspring Capital
|
| | 176,470 | $ | 1,500,000.00 | |||||||||||
Wellspring Management, LLC
|
| | 58,823 | $ | 500,000.00 | |||||||||||
Martin F. Whalen
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Fiserv ISS & Co. Cust
FBO Kimberly Williamson IRA
|
| | 5,882 | $ | 50,000.00 | |||||||||||
Steven Wishnia
|
| | 3,000 | $ | 25,500.00 | |||||||||||
Sharon T. Wooster
|
| | 2,941 | $ | 25,000.00 | |||||||||||
Total
|
4,002,644 | 568,374 | 2,188,425 | $ | 18,601,821.50 |
4. | This Amendment No. 2 may be executed in any number of original or facsimile counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Any counterpart or other signature to this Amendment No. 2 that is delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery by such party of this Amendment No. 2. | ||
5. | Except as set forth herein, all other terms and conditions of the Investors Rights Agreement remain the same. |
7
CARDIOVASCULAR SYSTEMS, INC.
|
||||
By: | /s/ James E. Flaherty | |||
Name: | James E. Flaherty | |||
Title: | Chief Financial Officer |
8
IN WITNESS WHEREOF , the parties hereto have executed this Amendment No. 2 to Investors Rights Agreement effective the date first written above. |
EASTON HUNT CAPITAL PARTNERS, L.P. | ||||
|
||||
|
By: | EHC GP, L.P. its General Partner | ||
|
By: | EHC GP, Inc., its General Partner | ||
|
||||
|
By: | /s/ John H. Friedman | ||
|
||||
|
Name: John H. Friedman
Title: President |
|||
|
||||
EASTON CAPITAL PARTNERS, LP | ||||
|
||||
|
By: | ECP GP, LLC | ||
|
By: | ECP GP, Inc., its Manager | ||
|
||||
|
By: | /s/ John H. Friedman | ||
|
||||
|
Name: John H. Friedman | |||
|
Title: President |
9
MAVERICK FUND, L.D.C. | ||||
|
||||
|
By: | Maverick Capital, Ltd. | ||
|
Its Investment Advisor | |||
|
||||
|
By: | /s/ John T. McCafferty | ||
|
||||
|
Name: John T. McCafferty | |||
|
Title: Limited Partner and General Counsel | |||
|
||||
MAVERICK FUND USA, LTD. | ||||
|
||||
|
By: | Maverick Capital, Ltd. | ||
|
Its Investment Advisor | |||
|
||||
|
By: | /s/ John T. McCafferty | ||
|
||||
|
Name: John T. McCafferty | |||
|
Title: Limited Partner and General Counsel | |||
|
||||
MAVERICK FUND II, LTD. | ||||
|
||||
|
By: | Maverick Capital, Ltd. | ||
|
Its Investment Advisor | |||
|
||||
|
By: | /s/ John T. McCafferty | ||
|
||||
|
Name: John T. McCafferty | |||
|
Title: Limited Partner and General Counsel |
10
|
MITSUI & CO. VENTURE PARTNERS II, L.P. | |||
|
||||
|
By: | Mitsui & Co. Venture Partners, Inc. | ||
|
Its General Partner | |||
|
||||
|
By: | /s/ Koichi Ando | ||
|
||||
|
Name: Koichi Ando | |||
|
Title: President & CEO |
11
SERIES A-1 CONVERTIBLE PREFERRED INVESTORS
|
||||
By: | /s/ James E. Flaherty | |||
James E. Flaherty, as Attorney-in-Fact for the Series A-1 Convertible | ||||
Preferred Investors named on Exhibit A hereto |
12
Abrasive Technology, Inc.
Profit Sharing Plan |
Michael Adrian
|
Mark R. Alvig
|
Shahla Amiri
|
Anthony Angelini
|
Michael J. Antonello
|
Massoud Arbabzadeh, MD
|
Naoum Baladi
|
Michael S. Barish
|
Frederick L. Betz and
Cynthia A. Betz, JTWROS |
RBC Dain Rauscher Cust
FBO Frederick L. Betz IRA |
Charles Schwab & Co. Cust
FBO John A. Beyer IRA |
Thomas M. Bies and
Edith C. Bies, JTWROS |
Gerry Black
|
Brent G. Blackey
|
Pensco Trust Company Cust
FBO Michael J. Bogart IRA |
William Bold
|
John R. Borrell
|
Robert Brady
|
Larry Brandt and
Judy Brandt JTWROS |
David Brink
|
Gerald F. Bubnick
|
Brian P. Burns, Jr.
|
Marlyn and Margaret Buss,
Ttees, Marlyn and Margaret Buss Rev. Living Trust |
Wedbush Morgan Securities
Cust FBO Richard E. Bye IRA |
Timothy Byrne and Sandra Byrne, Trustees,
|
Byrne Family Trust
|
Christopher Campbell
|
H. Daniel Caparo
|
Charles Schwab & Co., Inc. Cust
FBO Franklin G. Capitanini IRA |
Joseph Anthony Cardenas
|
Curtis L. Carlson Family
Foundation |
Charles Schwab & Co., Inc.
Cust FBO Steven W. Carter IRA |
CAVA Partners, LLC
|
John F. Cavanaugh
|
Vijay T. Char
|
Scott Chase
|
Richard J. Cherry and
JoAnn Cherry, JTWROS |
George Jean Chilazi
|
Charles Schwab & Co., Inc. Cust
FBO Bruce A. Church IRA |
Pershing LLC Custodian
FBO Walter Douglas Clark IRA |
David E. Cohen, M.D.
|
Sean Collins
|
Wachovia Securities Cust
FBO Sean Collins IRA |
Tom Correia
|
Ralph D. Crawford
|
Carla C. Dahl
|
Thomas P. Davis, MD
|
Keith Donnan
|
Peter S. Dougan, M.D.
|
Charles Schwab & Co., Inc. Cust
FBO Mark W. DuPont IRA |
Keith M. Eastman
|
Joane Evans and
Lyell Evans JTWROS |
Ryan E. Evans
|
Gary Jay Fishbein, MD
|
Jeffrey Fleming
|
James Flynn
|
Linda M. Foster
|
Michael D. Fugit, M.D.
|
Michael Furlong
|
Geoffrey T. Gainor
|
Dennis R. Gancarz
|
GDN Holdings, LLC
|
Kenneth L. Gibbs, MD and
Beverly T. Gibbs JTWROS |
Scott Kean Goodman
|
UBS Financial Services, Inc. Cust
FBO R. Hunt Greene IRA |
Daniel Patrick Greenleaf and
Diane Francis Greenleaf |
Barry K. Griffith
|
Edith Guglielmi
|
David J. Gunther
|
Rob Hadley
|
Fiserv ISS & Co. Cust
FBO Rob Hadley IRA |
Scott Robert Hannum
|
Scott Merle Hanson
|
Steven J. Healy
|
Syntel, LLC Profit Sharing Plan
FBO Alfred Harry Herget, Alfred Harry Herget, Trustee |
Richard R. Heuser and Sharon L.
Heuser, Trustees, R&S Trust dated 8/3/99 |
Charles Schwab & Co., Inc. Cust
FBO David Richard Hewitt IRA |
Robert C. Hinckle
|
13
William Hoffman and
Lilia Helen Hoffman JTWROS |
Jeremy Houseman
|
Derek J. Howe
|
Wende S. Hutton, Trustee,
Hutton Living Trust dtd 12/10/96 |
Innovasc, LLC
|
Michael Iovanni and
Linda Iovanni, JTWROS |
Andrew J. Iseman and
Shelly D. Iseman JTWROS |
ITX International Equity Corp.
|
Sean Janzer
|
Sara Jay
|
Takemito Jimbo
|
Charles David Joffe, MD
|
Darla R. Johnson and
John A. Beyer JTWROS |
Elias H. Kassab
|
Salva Kassab and
Suha Kassab JTWROS |
KD Holding, Inc.
|
Puneet K. Khanna and
Monica Khanna JTWROS |
Yazan Khatib
|
Farhad Khosravi, Ttee, Farhad Khosravi
and Flora Shirzad Khosravi Trust U/A |
Bertram W. Klein
|
E*Trade as Cust
FBO Joseph F. Koziol IRA |
Al Kraus and
Eileen Kraus JTWROS |
Al Kraus
|
David Kraus, M.D.
|
Scott Kraus
|
John T. Kuzara
|
Habib John Lahlouh
|
David Lamadrid
|
Aaron Lew
|
MLPF&S Cust FBO
Aaron Lew IRA |
Robert Lindmeier and
Sheryl Lindmeier |
William Andrew Lindmeier and
Susan J. Lindmeier JTWROS |
Wells Fargo Bank, N.A. as Trustee
of the Donald M. Longlet Rev Tr |
Louis Lopez, MD
|
Richard A. Lotti
|
Jonathan K. Lubkert
|
Kenneth H. Lubkert and
Elizabeth R. Lubkert JTWROS |
Satyaprakash Makam
|
Louis Manfredo and
Genevieve Manfredo JTWROS |
Carol A. Martin, Sole Trustee,
Martin Family Revocable Trust |
Lynne Martin and
Tevis P. Martin III |
Maverick Fund, L.D.C.
|
Maverick Fund USA, Ltd.
|
Maverick Fund II, Ltd.
|
MaxBee Holding Company LLC
|
Gary McCord
|
Christopher W. McNeill
|
John J. Mehalchin
|
Jacob P. Mercer
|
Mitsui & Co. Venture Partners II, LP
|
Amir Motarjeme, Trustee, Amir
Motarjeme Profit Sharing Plan FBO Amir Motarjeme |
Padmini Natarajan and
B. R. Natarajan JTWROS |
Fiserv ISS & Co. Cust
FBO Thomas P. Neslund IRA |
Thomas P. Neslund
|
Hajime Oshita
|
Marco Ovikian and
Catherine Ovikian, JTWROS |
Ashish Pal
|
Tom Pardubeck
|
Daryl L. Peterman
|
Loyal M. Peterman, Jr.
|
John N. Phillips
|
Cassandra Piippo
|
Pinnacle Investment Group, LLC
|
Sridhar Prativadi
|
Rolando E. Prieto
|
Dave B. Radovich
|
Robert K. Ranum
|
Ambika Ravindran
|
Redmile Capital, LP
|
Redmile Ventures, LLC
|
Redmile Capital Offshore, Ltd.
|
Michael Reilly and Lisa Reilly
|
Ronald Reuss and
Rita Reuss JTWROS |
Stacey Rickert
|
Benjamin S. Rinkey
|
Caleb Rivera
|
Edward Todd Robbins
|
Cecilia S. Roberts, Trustee
David K. Roberts Residuary Trust |
David K. Roberts
|
Todd A. Roberts and
Debra D. Roberts |
Peter Lars Runquist
|
Paul W. Schaffer
|
James W. Schlesing and
Dona Connelly |
Marc S. Schwartzberg
|
Gary M. Scott and Malisa M. Scott,
Ttees of the Gary and Malisa Scott Rev Trust |
R. Randolph Scott
|
14
Gino J. Sedillo, MD
|
David Shaskey
|
Pamela Shaw and
James Shaw JTWROS |
Neil J. Sheehan
|
Chiemsee Money Purchase Plan,
dtd 03/11/97, FBO Robert T. Shepard |
Robert Shepard and Celia Shepard,
Ttees of the Shepard Family Trust dated 2/1/99 |
Harvinder Paul Singh, MD
|
Kevin Spanier
|
Kathleen A. Stauter
|
Steven Mendelow, Trustee,
Teledata Financial Services Corp. Profit Shar Plan |
Charles Schwab & Co., Inc. Cust
FBO Robert J. Thatcher IRA |
Kimberley J. Thomas and
A. Conrade Thomas JTWROS |
TMP, LLLP
|
Top Medical Holding B.V.
|
Leslie Trigg and Michael Trigg,
Trustees, Trigg Family Trust |
Edwin C. Tyska
|
Hector J. Vasquez and
Sandra L. Vasquez |
Greg Vella and Michelle Vella,
Ttees, Greg Vella and Michelle Vella Family Tr |
Chris Vieira
|
Douglas A. Waldo, MD
|
Joseph A. Wasselle and
Stacie Poole |
Charles Schwab & Co., Inc. Cust
FBO Burton M. Waxman IRA |
Wellspring Capital
|
Wellspring Management, LLC
|
Martin F. Whalen
|
Fiserv ISS & Co. Cust
FBO Kimberly Williamson IRA |
Steven Wishnia
|
Sharon T. Wooster
|
15
1. | Defined Terms. Capitalized terms not defined herein shall have the meanings ascribed to them in the Investors Rights Agreement. | ||
2. | The definition of Qualified Public Offering is hereby amended as follows: |
1
3. | The following paragraph is hereby added to Section 2, Piggyback Registration: |
4. | The Series B Convertible Preferred Stock sold in the Offering shall be deemed additional shares of Series A Convertible Preferred Stock for purposes of the Investors Rights Agreement. | ||
5. | Schedule A is hereby amended in its entirety as set forth at Exhibit B and each of the Series B Investors shall be deemed an Investor as that term is used in the Investors Rights Agreement. | ||
6. | This Amendment No. 3 may be executed in any number of original or facsimile counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Any counterpart or other signature to this Amendment No. 3 that is delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery by such party of this Amendment No. 3. | ||
7. | Except as set forth herein, all other terms and conditions of the Investors Rights Agreement remain the same. |
2
CARDIOVASCULAR SYSTEMS, INC.
|
||||
By: | /s/ James E. Flaherty | |||
Name: | James E. Flaherty | |||
Title: | Chief Financial Officer |
EASTON HUNT CAPITAL PARTNERS, L.P. | ||||
By: | EHC GP, L.P. its General Partner | |||
By: | EHC GP, Inc., its General Partner | |||
By: | /s/ John Friedman | |||
Name: | John Friedman | |||
Title: | President |
EASTON CAPITAL PARTNERS, LP | ||||
By: | ECP GP, LLC | |||
By: | ECP GP, Inc., its Manager | |||
By: | /s/ John Friedman | |||
Name: | John Friedman | |||
Title: | President |
MAVERICK FUND, L.D.C. | ||||
By: |
Maverick Capital, Ltd.
Its Investment Advisor |
|||
By: | /s/ John T. McCafferty | |||
Name: | John T. McCafferty | |||
Title: | Limited Partner & General Counsel | |||
MAVERICK FUND USA, LTD. | ||||
By: |
Maverick Capital, Ltd.
Its Investment Advisor |
|||
By: | /s/ John T. McCafferty | |||
Name: | John T. McCafferty | |||
Title: | Limited Partner & General Counsel |
MAVERICK FUND II, LTD. | ||||
By: |
Maverick Capital, Ltd.
Its Investment Advisor |
|||
By: | /s/ John T. McCafferty | |||
Name: | John T. McCafferty | |||
Title: | Limited Partner & General Counsel |
MITSUI & CO. VENTURE PARTNERS II, L.P. | ||||
By: |
Mitsui & Co. Venture Partners, Inc.
Its General Partner |
|||
By: | /s/ Koichi Ando | |||
Name: | Koichi Ando | |||
Title: | President & CEO |
ITX INTERNATIONAL EQUITY CORP.
|
||||
By: | /s/ Takehito Jimbo | |||
Name: | Takehito Jimbo | |||
Title: | President & CEO |
WELLSPRING CAPITAL
|
||||
By: | /s/ George Griffin | |||
Name: | George Griffin | |||
Title: | CFO |
GDN HOLDINGS LLC
|
||||
By: | /s/ Glen D. Nelson | |||
Name: | Glen D. Nelson | |||
Title: |
SERIES B CONVERTIBLE PREFERRED INVESTORS
|
||||
By: | /s/ James E. Flaherty | |||
James E. Flaherty, as Attorney-in-Fact for the Series B Convertible Preferred Investors named on Exhibit A hereto | ||||
Name | Amount | Shares | ||||||
Shahla Amiri
|
$ | 9,250.00 | 1,000 | |||||
Anthony Angelini
|
$ | 351,500.00 | 38,000 | |||||
John T. Arvold
|
$ | 25,000.00 | 2,702 | |||||
Londa Benjamini and Everett ___
|
$ | 20,000.00 | 2,162 | |||||
Thomas M. Bies and
Edith C. Bies JTWROS
|
$ | 25,002.75 | 2,703 | |||||
Brent G. Blackey
|
$ | 46,250.00 | 5,000 | |||||
Claude A. Brachfeld
|
$ | 25,000.00 | 2,702 | |||||
Larry Brandt and
Judy Brandt JTWROS
|
$ | 46,250.00 | 5,000 | |||||
David Brink
|
$ | 11,867.75 | 1,283 | |||||
Calmedica Capital L.P.
|
$ | 900,000.00 | 97,297 | |||||
Stephen Carito
|
$ | 25,000.00 | 2,702 | |||||
The Curtis L. Carlson Family Foundation
|
$ | 300,005.25 | 32,433 | |||||
Charles Schwab & Co., Inc. Cust
FBO Steven W. Carter IRA
|
$ | 20,000.00 | 2,162 | |||||
Scott Chase
|
$ | 26,371.75 | 2,851 | |||||
Sandra Novak Cohen
|
$ | 50,005.50 | 5,406 | |||||
Kenneth J. Crowell and
Veronica J. Crowell JTWROS
|
$ | 75,000.00 | 8,108 | |||||
Steven Crowell
|
$ | 100,000.00 | 10,810 | |||||
Marc Daniels
|
$ | 5,000.00 | 540 | |||||
Tony S. Das
|
$ | 157,250.00 | 17,000 | |||||
Ronit Eres
|
$ | 50,000.00 | 5,405 | |||||
Joane Evans and Lyell Evans JTWROS
|
$ | 25,002.75 | 2,703 | |||||
Ryan E. Evans
|
$ | 25,002.75 | 2,703 | |||||
Donald E. Fischer III
|
$ | 25,000.00 | 2,702 | |||||
Joseph D. Flynn, Jr. and
Lori G. Flynn JTWROS
|
$ | 50,005.50 | 5,406 | |||||
Linda M. Foster
|
$ | 32,375.00 | 3,500 | |||||
GDN Holdings, LLC
|
$ | 499,999.50 | 54,054 | |||||
GFTH Investment Club
|
$ | 44,955.00 | 4,860 |
A-1
Name | Amount | Shares | ||||||
The Gramercy Fund
|
$ | 75,000.00 | 8,108 | |||||
Ron B. Guillot, Jr.
|
$ | 25,002.75 | 2,703 | |||||
Scott Hannum
|
$ | 100,000.00 | 10,810 | |||||
Kimberly B. Haynie
|
$ | 30,007.00 | 3,244 | |||||
James C. Hays
|
$ | 25,000.00 | 2,702 | |||||
Steven J. Healy
|
$ | 27,269.00 | 2,948 | |||||
AG Edwards Custodian Richard R. Heuser
Rollover IRA
|
$ | 75,000.00 | 8,108 | |||||
Andrew J. Iseman and
Shelly D. Iseman JTWROS
|
$ | 50,005.50 | 5,406 | |||||
ITX International Equity Corp.
|
$ | 3,000,006.25 | 324,325 | |||||
Darla R. Johnson and
John A. Beyer JTWROS
|
$ | 5,272.50 | 570 | |||||
William Michael Keith
|
$ | 35,002.00 | 3,784 | |||||
Bertram W. Klein
c/o Bessemer Trust
|
$ | 61,188.75 | 6,615 | |||||
Paul A. Koehn
|
$ | 35,002.00 | 3,784 | |||||
David Kraus, M.D.
|
$ | 9,250.00 | 1,000 | |||||
Robert Lindmeier and
Sheryl Lindmeier JTWROS
|
$ | 50,000.00 | 5,405 | |||||
Wells Fargo Bank, N.A. as Trustee of the
Donald M. Longlet Rev Trust dtd 9/12/89
|
$ | 199,800.00 | 21,600 | |||||
Carleen Lunceford and
Marvin Lunceford JTWROS
|
$ | 25,002.75 | 2,703 | |||||
Maverick Fund, L.D.C.
|
$ | 439,791.25 | 47,545 | |||||
Maverick Fund USA, Ltd.
|
$ | 177,553.75 | 19,195 | |||||
Maverick Fund II, Ltd.
|
$ | 382,654.00 | 41,368 | |||||
Guy S. Mayeda and Amy A. Mayeda,
Ttees, Guy and Amy Mayeda Living Trust
|
$ | 50,000.00 | 5,405 | |||||
Heather J. McHugh
|
$ | 50,005.50 | 5,406 | |||||
Michael G. Micheli and
Lisa Micheli JTWROS
|
$ | 50,000.00 | 5,405 | |||||
Steven Nelson
|
$ | 25,000.00 | 2,702 | |||||
Ashish Pal
|
$ | 124,875.00 | 13,500 | |||||
James B. Park
|
$ | 55,500.00 | 6,000 | |||||
Daryl L. Peterman
|
$ | 46,250.00 | 5,000 | |||||
Loyal M. Peterman, Jr.
|
$ | 185,000.00 | 20,000 | |||||
Jeffrey Peterson
|
$ | 64,750.00 | 7,000 | |||||
John Phillips
|
$ | 99,992.50 | 10,810 |
A-2
Name | Amount | Shares | ||||||
Pinnacle Investment Group LLC
|
$ | 55,500.00 | 6,000 | |||||
Steven A. Points and
Wanda J. Points JTWROS
|
$ | 50,000.00 | 5,405 | |||||
Sridhar Prativadi
|
$ | 13,875.00 | 1,500 | |||||
Thomas L. Press
|
$ | 500,000.00 | 54,054 | |||||
Dave B. Radovich
|
$ | 75,276.50 | 8,138 | |||||
Michael Reilly and
Lisa Reilly JTWROS
|
$ | 50,875.00 | 5,500 | |||||
Derrick Carlton Rice
|
$ | 20,000.00 | 2,162 | |||||
RKV Limited Partnership
|
$ | 50,000.00 | 5,405 | |||||
Ameriprise Trust Co FBO Dr. Caleb Rivera IRA
|
21,293.50 | 2,302 | ||||||
E. Todd Robbins
|
$ | 9,250.00 | 1,000 | |||||
Sajaitha Salvaji
|
$ | 50,005.50 | 5,406 | |||||
David Saphiere
|
$ | 24,975.00 | 2,700 | |||||
Saratoga Ventures IV LP
|
$ | 499,999.50 | 54,054 | |||||
Saratoga Ventures V LP
|
$ | 499,999.50 | 54,054 | |||||
Saratoga Ventures VI LP
|
$ | 249,999.75 | 27,027 | |||||
Rakesh R. Shah and
Hetal R. Shah JTWROS
|
$ | 25,002.75 | 2,703 | |||||
Murray L. Shames
|
$ | 25,000.00 | 2,702 | |||||
Shanti Global Limited Partnership
|
$ | 50,000.00 | 5,405 | |||||
Robert and Celia Shepard, Trustees of the
Shepard Family Trust dated 2/1/1999
|
$ | 37,000.00 | 4,000 | |||||
Chiemsee Money Purchase Plan dtd
3/11/97 FBO Robert Shepard
|
$ | 18,500.00 | 2,000 | |||||
Greg Smart
|
$ | 45,000.00 | 4,864 | |||||
Kathleen Stauter
|
$ | 5,087.50 | 550 | |||||
Stell Investments LLC
|
$ | 50,875.00 | 5,500 | |||||
Michael P. Swenson
|
$ | 49,950.00 | 5,400 | |||||
Thadd C. Taylor
|
$ | 25,002.75 | 2,703 | |||||
Top Medical Holding B.V.
|
$ | 74,000.00 | 8,000 | |||||
Greg and Michelle Vella, Trustees,
Vella Family Trust
|
$ | 50,000.00 | 5,405 | |||||
Erik Vollbrecht
|
$ | 32,745.00 | 3,540 | |||||
Pattie A. White
|
$ | 24,975.00 | 2,700 | |||||
Whitebox Hedged High Yield Partners, LP
|
$ | 8,690,532.25 | 939,517 |
A-3
Name | Amount | Shares | ||||||
Delano Franklin Young and
Melissa Kay Young JTWROS
|
$ | 25,002.75 | 2,704 | |||||
Mark Zuzga D.O. and
Melynda Zuzga D.O. JTWROS
|
$ | 50,000.00 | 5,405 | |||||
|
||||||||
TOTAL
|
$ | 19,999,996.25 | 2,162,150 | |||||
|
A-4
Series A | Series A | Series A-1 | Series B | |||||||||||||||||
Preferred | Preferred | Preferred | Preferred | Aggregate | ||||||||||||||||
Name of Investor | Shares | Warrant | Shares | Shares | Purchase Price | |||||||||||||||
Easton Hunt Capital Partners,
L.P.
|
612,960 | 87,040 | | | $ | 3,500,000.00 | ||||||||||||||
Easton Hunt Partners, LP
|
612,960 | 87,040 | | | $ | 3,500,000.00 | ||||||||||||||
Maverick Fund, L.D.C.
|
770,212 | 109,370 | 103,524 | 47,545 | $ | 1,319,745.25 | ||||||||||||||
Maverick Fund USA, Ltd.
|
310,952 | 44,155 | 41,795 | 19,195 | $ | 532,811.25 | ||||||||||||||
Maverick Fund II, Ltd.
|
670,149 | 95,161 | 90,075 | 41,368 | $ | 1,148,291.50 | ||||||||||||||
Mitsui & Co. Venture Partners
II, L.P.
|
675,148 | 95,871 | 117,647 | | $ | 999,999.50 | ||||||||||||||
ITX International Equity Corp.
|
350,263 | 49,737 | 47,079 | 324,325 | $ | 400,177.75 | ||||||||||||||
Abrasive Technology, Inc.
Profit Shar Pl
|
| | 32,000 | | $ | 272,000.00 | ||||||||||||||
Michael Adrian
|
8,943 | 1,270 | 3,552 | | $ | 30,200.00 | ||||||||||||||
Mark R. Alvig
|
| | 6,000 | | $ | 51,000.00 | ||||||||||||||
Shahla Amiri
|
| | 5,000 | 1,000 | $ | 51,750.00 | ||||||||||||||
Anthony Angelini
|
| | 12,000 | 38,000 | $ | 453,500.00 | ||||||||||||||
Michael J. Antonello
|
35,937 | 5,103 | 18,255 | | $ | 155,167.50 | ||||||||||||||
Massoud Arbabzadeh, MD
|
| | 5,882 | | $ | 49,997.00 | ||||||||||||||
Naoum Baladi
|
| | 28,000 | | $ | 238,000.00 | ||||||||||||||
Michael S. Barish
|
44,474 | 6,315 | 11,928 | | $ | 101,388.00 | ||||||||||||||
Frederick L. Betz and
Cynthia A. Betz, JTWROS
|
| | 6,000 | | $ | 51,000.00 | ||||||||||||||
RBC Dain Rauscher Cust
FBO Frederick L. Betz IRA
|
| | 9,500 | | $ | 80,750.00 | ||||||||||||||
Charles Schwab & Co. Cust
FBO John A. Beyer IRA
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Thomas M. Bies and
Edith C. Bies, JTWROS
|
| | 5,882 | 2,703 | $ | 75,002.75 | ||||||||||||||
Gerry Black
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Brent G. Blackey
|
| | 5,900 | 5,000 | $ | 96,400.00 | ||||||||||||||
Pensco Trust Company Cust
FBO Michael J. Bogart IRA
|
| | 4,900 | | $ | 41,650.00 | ||||||||||||||
William Bold
|
| | 3,600 | | $ | 30,600.00 | ||||||||||||||
John R. Borrell
|
| | 11,764 | | $ | 99,994.00 | ||||||||||||||
Robert Brady
|
| | 9,000 | | $ | 76,500.00 | ||||||||||||||
Larry Brandt and Judy Brandt
JTWROS
|
8,943 | 1,270 | 4,120 | 5,000 | $ | 81,270.00 | ||||||||||||||
David Brink
|
10,260 | 1,457 | 17,000 | 1,283 | $ | 156,367.75 | ||||||||||||||
Gerald F. Bubnick
|
| | 2,942 | | $ | 25,007.00 | ||||||||||||||
Brian P. Burns, Jr.
|
| | 7,500 | | $ | 63,750.00 | ||||||||||||||
Marlyn and Margaret Buss,
Trustees,
Marlyn and Margaret Buss Rev.
Living Trust dated 4/12/04
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Wedbush Morgan Securities Cust
FBO Richard E. Bye IRA
|
| | 7,050 | | $ | 59,925.00 |
B-1
Series A | Series A | Series A-1 | Series B | |||||||||||||||||
Preferred | Preferred | Preferred | Preferred | Aggregate | ||||||||||||||||
Name of Investor | Shares | Warrant | Shares | Shares | Purchase Price | |||||||||||||||
Timothy Byrne and Sandra
Byrne, Trustees, Byrne Family
Trust
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Christopher Campbell
|
| | 2,941 | | $ | 25,000.00 | ||||||||||||||
H. Daniel Caparo
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Charles Schwab & Co., Inc. Cust
FBO Franklin G. Capitanini IRA
|
| | 5,800 | | $ | 49,300.00 | ||||||||||||||
Joseph Anthony Cardenas
|
| | 29,400 | | $ | 249,900.00 | ||||||||||||||
Curtis L. Carlson Family
Foundation
|
43,783 | 6,217 | 29,414 | 32,433 | $ | 550,024.25 | ||||||||||||||
Charles Schwab & Co., Inc. Cust
FBO Steven W. Carter IRA
|
| | 5,882 | 2,162 | $ | 70,000.00 | ||||||||||||||
CAVA Partners, LLC
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
John F. Cavanaugh
|
| | 3,000 | | $ | 25,500.00 | ||||||||||||||
Vijay T. Char
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Scott Chase
|
| | 17,647 | 2,851 | $ | 176,371.75 | ||||||||||||||
Richard J. Cherry and
JoAnn Cherry, JTWROS
|
| | 2,942 | | $ | 25,007.00 | ||||||||||||||
George Jean Chilazi
|
| | 6,777 | | $ | 57,604.50 | ||||||||||||||
Charles Schwab & Co., Inc. Cust
FBO Bruce A. Church IRA
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Pershing LLC Custodian
FBO Walter Douglas Clark IRA
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
David E. Cohen, M.D.
|
| | 5,884 | | $ | 50,014.00 | ||||||||||||||
Sean Collins
|
| | 11,765 | | $ | 100,002.50 | ||||||||||||||
Wachovia Securities Cust
FBO Sean Collins IRA
|
| | 12,941 | | $ | 110,000.00 | ||||||||||||||
Tom Correia
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Ralph D. Crawford
|
| | 11,750 | | $ | 99,875.00 | ||||||||||||||
Carla C. Dahl
|
| | 590 | | $ | 5,015.00 | ||||||||||||||
Thomas P. Davis, MD
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Keith Donnan
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Peter S. Dougan, M.D.
|
| | 2,941 | | $ | 25,000.00 | ||||||||||||||
Charles Schwab & Co., Inc. Cust
FBO Mark W. DuPont IRA
|
| | 6,000 | | $ | 51,000.00 | ||||||||||||||
Keith M. Eastman
|
| | 4,000 | | $ | 34,000.00 | ||||||||||||||
Joane Evans and
Lyell Evans JTWROS
|
| | 2,942 | 2,703 | $ | 50,009.75 | ||||||||||||||
Ryan E. Evans
|
| | 5,883 | 2,703 | $ | 75,008.25 | ||||||||||||||
Gary Jay Fishbein, MD
|
| | 6,000 | | $ | 51,000.00 | ||||||||||||||
Jeffrey Fleming
|
| | 2,942 | | $ | 25,007.00 | ||||||||||||||
James Flynn
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Linda M. Foster
|
17,890 | 2,540 | 2,404 | 3,500 | $ | 52,809.00 | ||||||||||||||
Michael D. Fugit, M.D.
|
| | 2,941 | | $ | 25,000.00 | ||||||||||||||
Michael Furlong
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Geoffrey T. Gainor
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Dennis R. Gancarz
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
GDN Holdings, LLC
|
131,349 | 18,652 | 41,913 | 54,054 | $ | 856,260.00 | ||||||||||||||
Kenneth L. Gibbs, MD and
Beverly T. Gibbs JTWROS
|
| | 2,950 | | $ | 25,075.00 | ||||||||||||||
Scott Kean Goodman
|
| | 19,059 | | $ | 162,001.50 | ||||||||||||||
UBS Financial Services, Inc.
Cust
FBO R. Hunt Greene IRA
|
| | 6,500 | | $ | 55,250.00 |
B-2
Series A | Series A | Series A-1 | Series B | |||||||||||||||||
Preferred | Preferred | Preferred | Preferred | Aggregate | ||||||||||||||||
Name of Investor | Shares | Warrant | Shares | Shares | Purchase Price | |||||||||||||||
Daniel Patrick Greenleaf and
Diane Francis Greenleaf
|
| | 10,000 | | $ | 85,000.00 | ||||||||||||||
Barry K. Griffith
|
| | 18,750 | | $ | 159,375.00 | ||||||||||||||
Edith Guglielmi
|
| | 7,060 | | $ | 60,010.00 | ||||||||||||||
David J. Gunther
|
| | 2,941 | | $ | 25,000.00 | ||||||||||||||
Rob Hadley
|
| | 2,941 | | $ | 25,000.00 | ||||||||||||||
Fiserv ISS & Co. Cust
FBO Rob Hadley IRA
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Scott Robert Hannum
|
| | 11,764 | 10,810 | $ | 200,000.00 | ||||||||||||||
Scott Merle Hanson
|
| | 600 | | $ | 5,100.00 | ||||||||||||||
Steven J. Healy
|
8,815 | 1,252 | 9,431 | 2,948 | $ | 107,442.50 | ||||||||||||||
Syntel, LLC Profit Sharing
Plan FBO
Alfred Harry Herget, Alfred
Harry
Herget, Trustee |
| | 5,882 | | $ | 49,997.00 | ||||||||||||||
Richard R. Heuser and Sharon
L. Heuser,
Trustees, R&S Trust dated
8/3/99
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Charles Schwab & Co., Inc. Cust
FBO David Richard Hewitt IRA
|
| | 13,000 | | $ | 110,500.00 | ||||||||||||||
Robert C. Hinckle
|
| | 17,647 | | $ | 150,000.00 | ||||||||||||||
William Hoffman and
Lilia Helen Hoffman JTWROS
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Jeremy Houseman
|
| | 2,942 | | $ | 25,007.00 | ||||||||||||||
Derek J. Howe
|
| | 8,000 | | $ | 68,000.00 | ||||||||||||||
Wende S. Hutton, Trustee,
Hutton Living Trust dtd
12/10/96
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Innovasc, LLC
|
| | 4,500 | | $ | 38,250.00 | ||||||||||||||
Michael Iovanni and
Linda Iovanni, JTWROS
|
| | 2,941 | | $ | 25,000.00 | ||||||||||||||
Andrew J. Iseman and
Shelly D. Iseman JTWROS
|
17,657 | 2,507 | 7,108 | 5,406 | $ | 110,423.50 | ||||||||||||||
Sean Janzer
|
| | 11,765 | | $ | 100,000.00 | ||||||||||||||
Sara Jay
|
| | 5,900 | | $ | 50,150.00 | ||||||||||||||
Takemito Jimbo
|
| | 11,765 | | $ | 100,002.50 | ||||||||||||||
Charles David Joffe, MD
|
| | 6,000 | | $ | 51,000.00 | ||||||||||||||
Darla R. Johnson and
John A. Beyer JTWROS
|
| | 3,529 | 570 | $ | 35,272.50 | ||||||||||||||
Elias H. Kassab
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Salva Kassab and
Suha Kassab JTWROS
|
| | 3,529 | | $ | 30,000.00 | ||||||||||||||
KD Holding, Inc.
|
| | 6,000 | | $ | 51,000.00 | ||||||||||||||
Puneet K. Khanna and
Monica Khanna JTWROS
|
| | 17,647 | | $ | 150,000.00 | ||||||||||||||
Yazan Khatib
|
| | 2,941 | | $ | 25,000.00 | ||||||||||||||
Farhad Khosravi, Ttee, Farhad
Khosravi
and Flora Shirzad Khosravi
Trust U/A
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Bertram W. Klein
|
| | 10,000 | 6,615 | $ | 146,188.75 |
B-3
B-4
Series A | Series A | Series A-1 | Series B | |||||||||||||||||
Preferred | Preferred | Preferred | Preferred | Aggregate | ||||||||||||||||
Name of Investor | Shares | Warrant | Shares | Shares | Purchase Price | |||||||||||||||
Loyal M. Peterman, Jr.
|
20,564 | 2,920 | 16,124 | 20,000 | $ | 322,054.00 | ||||||||||||||
John N. Phillips
|
| | 5,882 | 10,810 | $ | 149,992.50 | ||||||||||||||
Cassandra Piippo
|
| | 589 | | $ | 5,006.50 | ||||||||||||||
Pinnacle Investment Group, LLC
|
| | 9,000 | 6,000 | $ | 132,000.00 | ||||||||||||||
Sridhar Prativadi
|
| | 5,882 | 1,500 | $ | 63,875.00 | ||||||||||||||
Rolando E. Prieto
|
| | 2,941 | | $ | 24,998.50 | ||||||||||||||
Dave B. Radovich
|
7,203 | 1,023 | 25,169 | 8,138 | $ | 289,213.00 | ||||||||||||||
Robert K. Ranum
|
| | 2,941 | | $ | 24,998.50 | ||||||||||||||
Ambika Ravindran
|
| | 12,000 | | $ | 102,000.00 | ||||||||||||||
Redmile Capital, LP
|
| | 7,569 | | $ | 64,341.00 | ||||||||||||||
Redmile Ventures, LLC
|
| | 5,882 | | $ | 49,997.00 | ||||||||||||||
Redmile Capital Offshore, Ltd.
|
| | 27,725 | | $ | 235,658.00 | ||||||||||||||
Michael Reilly and Lisa Reilly
|
| | 11,764 | 5,500 | $ | 150,869.00 | ||||||||||||||
Ronald Reuss and
Rita Reuss JTWROS
|
| | 3,000 | | $ | 25,500.00 | ||||||||||||||
Stacey Rickert
|
| | 10,000 | | $ | 85,000.00 | ||||||||||||||
Benjamin S. Rinkey
|
| | 4,000 | | $ | 34,000.00 | ||||||||||||||
Caleb Rivera
|
| | 2,940 | | $ | 24,990.00 | ||||||||||||||
Edward Todd Robbins
|
| | 2,941 | 1,000 | $ | 34,250.00 | ||||||||||||||
Cecilia S. Roberts, Trustee
David K. Roberts Residuary
Trust
|
| | 21,200 | | $ | 180,200.00 | ||||||||||||||
David K. Roberts
|
| | 11,800 | | $ | 100,300.00 | ||||||||||||||
Todd A. Roberts and
Debra D. Roberts
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Peter Lars Runquist
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Paul W. Schaffer
|
10,216 | 1,451 | 20,000 | | $ | 170,000.00 | ||||||||||||||
James W. Schlesing and
Dona Connelly
|
| | 7,059 | | $ | 60,001.50 | ||||||||||||||
Marc S. Schwartzberg
|
| | 2,941 | | $ | 25,000.00 | ||||||||||||||
Gary M. Scott and Malisa M.
Scott, Ttees
of the Gary and Malisa Scott
Rev Trust
|
| | 29,500 | | $ | 250,750.00 | ||||||||||||||
R. Randolph Scott
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Gino J. Sedillo, MD
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
David Shaskey
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Pamela Shaw and
James Shaw JTWROS
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Neil J. Sheehan
|
| | 2,000 | | $ | 17,000.00 | ||||||||||||||
Chiemsee Money Purchase Plan,
dtd 03/11/97, FBO Robert T.
Shepard
|
| | 6,000 | 2,000 | $ | 69,500.00 | ||||||||||||||
Robert Shepard and Celia
Shepard, Ttees
of the Shepard Family Trust
dated 2/1/99
|
| | 6,000 | 4,000 | $ | 88,000.00 | ||||||||||||||
Harvinder Paul Singh, MD
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Kevin Spanier
|
| | 1,200 | | $ | 10,200.00 | ||||||||||||||
Kathleen A. Stauter
|
| | 1,775 | 550 | $ | 20,175.00 | ||||||||||||||
Steven Mendelow, Trustee,
Teledata Financial Services
Corp. Profit Shar Plan
|
| | 23,529 | | $ | 200,000.00 | ||||||||||||||
Charles Schwab & Co., Inc. Cust
FBO Robert J. Thatcher IRA
|
| | 12,000 | | $ | 102,000.00 |
B-5
Series A | Series A | Series A-1 | Series B | |||||||||||||||||
Preferred | Preferred | Preferred | Preferred | Aggregate | ||||||||||||||||
Name of Investor | Shares | Warrant | Shares | Shares | Purchase Price | |||||||||||||||
Kimberley J. Thomas and
A. Conrade Thomas JTWROS
|
| | 5,890 | | $ | 50,065.00 | ||||||||||||||
TMP, LLLP
|
53,217 | 7,557 | 56,768 | | $ | 482,529.00 | ||||||||||||||
Top Medical Holding B.V.
|
| | 4,000 | 8,000 | $ | 108,000.00 | ||||||||||||||
Leslie Trigg and Michael
Trigg, Trustees,
Trigg Family Trust
|
| | 2,942 | | $ | 25,007.00 | ||||||||||||||
Edwin C. Tyska
|
| | 11,765 | | $ | 100,000.00 | ||||||||||||||
Hector J. Vasquez and
Sandra L. Vasquez
|
| | 3,000 | | $ | 25,500.00 | ||||||||||||||
Greg Vella and Michelle Vella,
Ttees,
Greg Vella and Michelle Vella
Family Tr
|
| | 5,882 | 5,405 | $ | 100,000.00 | ||||||||||||||
Chris Vieira
|
| | 4,588 | | $ | 39,000.00 | ||||||||||||||
Douglas A. Waldo, MD
|
| | 3,000 | | $ | 25,500.00 | ||||||||||||||
Joseph A. Wasselle and Stacie
Poole
|
| | 2,941 | | $ | 24,998.50 | ||||||||||||||
Charles Schwab & Co., Inc. Cust
FBO Burton M. Waxman IRA
|
| | 7,058 | | $ | 60,000.00 | ||||||||||||||
Wellspring Capital
|
| | 176,470 | | $ | 1,500,000.00 | ||||||||||||||
Wellspring Management, LLC
|
| | 58,823 | | $ | 500,000.00 | ||||||||||||||
Martin F. Whalen
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Fiserv ISS & Co. Cust
FBO Kimberly Williamson IRA
|
| | 5,882 | | $ | 50,000.00 | ||||||||||||||
Steven Wishnia
|
| | 3,000 | | $ | 25,500.00 | ||||||||||||||
Sharon T. Wooster
|
| | 2,941 | | $ | 25,000.00 | ||||||||||||||
John T. Arvold
|
2,702 | $ | 25,000.00 | |||||||||||||||||
Londa
Benjamini & Everett
|
2,162 | $ | 20,000.00 | |||||||||||||||||
Claude A. Brachfeld
|
2,702 | $ | 25,000.00 | |||||||||||||||||
Calmedica Capital L.P.
|
97,297 | $ | 900,000.00 | |||||||||||||||||
Stephen Carito
|
2,702 | $ | 25,000.00 | |||||||||||||||||
Sandra Novak Cohen
|
5,406 | $ | 50,005.50 | |||||||||||||||||
Kenneth J. Crowell and
Veronica J. Crowell JTWROS
|
8,108 | $ | 75,000.00 | |||||||||||||||||
Steven Crowell
|
10,810 | $ | 100,000.00 | |||||||||||||||||
Marc Daniels
|
540 | $ | 5,000.00 | |||||||||||||||||
Tony S. Das
|
17,000 | $ | 157,250.00 | |||||||||||||||||
Ronit Eres
|
5,405 | $ | 50,000.00 | |||||||||||||||||
Donald E. Fischer III
|
2,702 | $ | 25,000.00 | |||||||||||||||||
Joseph D. Flynn, Jr. and Lori
G. Flynn JTWROS
|
5,406 | $ | 50,005.50 | |||||||||||||||||
GFTH Investment Club
|
4,860 | $ | 44,955.00 | |||||||||||||||||
The Gramercy Fund
|
8,108 | $ | 75,000.00 | |||||||||||||||||
Ron B. Guillot, Jr.
|
2,703 | $ | 25,002.75 | |||||||||||||||||
Kimberly B. Haynie
|
3,244 | $ | 30,007.00 | |||||||||||||||||
James C. Hays
|
2,702 | $ | 25,000.00 | |||||||||||||||||
AG Edwards Custodian Richard
R. Heuser Rollover IRA
|
8,108 | $ | 75,000.00 | |||||||||||||||||
William Michael Keith
|
3,784 | $ | 35,002.00 | |||||||||||||||||
Paul A. Koehn
|
3,784 | $ | 35,002.00 | |||||||||||||||||
Carleen Lunceford and Marvin
Lunceford JTWROS
|
2,703 | $ | 25,002.75 |
B-6
Series A | Series A | Series A-1 | Series B | |||||||||||||||||
Preferred | Preferred | Preferred | Preferred | Aggregate | ||||||||||||||||
Name of Investor | Shares | Warrant | Shares | Shares | Purchase Price | |||||||||||||||
Guy S. Mayeda and Amy A.
Mayeda, Ttees, Guy and Amy
Mayeda Living Trust
|
5,405 | $ | 50,000.00 | |||||||||||||||||
Heather J. McHugh
|
5,406 | $ | 50,005.50 | |||||||||||||||||
Michael G. Micheli and Lisa
Micheli JTWROS
|
5,405 | $ | 50,000.00 | |||||||||||||||||
Steven Nelson
|
2,702 | $ | 25,000.00 | |||||||||||||||||
James B. Park
|
6,000 | $ | 55,500.00 | |||||||||||||||||
Jeffrey Peterson
|
7,000 | $ | 64,750.00 | |||||||||||||||||
Steven A. Points and Wanda J.
Points JTWROS
|
5,405 | $ | 50,000.00 | |||||||||||||||||
Thomas L. Press
|
54,054 | $ | 500,000.00 | |||||||||||||||||
Derrick Carlton Rice
|
2,162 | $ | 20,000.00 | |||||||||||||||||
RKV Limited Partnership
|
5,405 | $ | 50,000.00 | |||||||||||||||||
Ameriprise Trust Co FBO Dr.
Caleb Rivera IRA
|
2,302 | 21,293.50 | ||||||||||||||||||
Sajaitha Salvaji
|
5,406 | $ | 50,005.50 | |||||||||||||||||
David Saphiere
|
2,700 | $ | 24,975.00 | |||||||||||||||||
Saratoga Ventures IV LP
|
54,054 | $ | 499,999.50 | |||||||||||||||||
Saratoga Ventures V LP
|
54,054 | $ | 499,999.50 | |||||||||||||||||
Saratoga Ventures VI LP
|
27,027 | $ | 249,999.75 | |||||||||||||||||
Rakesh R. Shah and Hetal R.
Shah JTWROS
|
2,703 | $ | 25,002.75 | |||||||||||||||||
Murray L. Shames
|
2,702 | $ | 25,000.00 | |||||||||||||||||
Shanti Global Limited
Partnership
|
5,405 | $ | 50,000.00 | |||||||||||||||||
Greg Smart
|
4,864 | $ | 45,000.00 | |||||||||||||||||
Stell Investments LLC
|
5,500 | $ | 50,875.00 | |||||||||||||||||
Michael P. Swenson
|
5,400 | $ | 49,950.00 | |||||||||||||||||
Thadd C. Taylor
|
2,703 | $ | 25,002.75 | |||||||||||||||||
Erik Vollbrecht
|
3,540 | $ | 32,745.00 | |||||||||||||||||
Pattie A. White
|
2,700 | $ | 24,975.00 | |||||||||||||||||
Whitebox Hedged High Yield
Partners, LP
|
939,517 | $ | 8,690,532.25 | |||||||||||||||||
Delano Franklin Young and
Melissa Kay Young JTWROS
|
2,704 | $ | 25,002.75 | |||||||||||||||||
Mark Zuzga D.O. and Melynda
Zuzga D.O. JTWROS
|
5,405 | $ | 50,000.00 | |||||||||||||||||
|
||||||||||||||||||||
Total
|
4,002,644 | 568,374 | 2,188,425 | 2,162,150 | $ | 42,601,817.75 | ||||||||||||||
|
B-7
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Cumulative Percentage | ||
Vesting Date | of Shares | |
|
2
3
4
5
CARDIOVASCULAR SYSTEMS, INC. | ||||||
|
||||||
|
By: | |||||
|
Its: | |||||
|
||||||
|
||||||
Participant |
6
Cumulative Percentage | ||
Vesting Date | of Shares | |
|
2
3
4
5
CARDIOVASCULAR SYSTEMS, INC. | ||||||
|
||||||
|
By: | |||||
|
Its: | |||||
|
||||||
|
||||||
Participant |
6
1
Cumulative Percentage | ||
Vesting Date | of Shares | |
|
||
|
||
|
2
3
4
CARDIOVASCULAR SYSTEMS, INC. | ||||||
|
||||||
|
By: | |||||
|
Its: | |||||
|
||||||
|
||||||
Participant |
5
Cumulative Percentage | ||
Vesting Date | of Units | |
|
||
|
||
|
2
3
CARDIOVASCULAR SYSTEMS, INC. | ||||||
|
||||||
|
By: | |||||
|
Its: | |||||
|
||||||
|
||||||
Participant |
4
- 1 -
|
Percentage or Number of | |||
Performance Objective(s)
|
Achievement | Shares Vested | ||
|
- 2 -
- 3 -
- 4 -
CARDIOVASCULAR SYSTEMS, INC. | ||||||||
|
||||||||
|
By: | |||||||
|
Its: | |||||||
|
|
|||||||
|
||||||||
Participant |
- 5 -
- 1 -
|
Percentage or Number of | |||
Performance Objective(s)
|
Achievement | Units Vested | ||
|
- 2 -
- 3 -
CARDIOVASCULAR SYSTEMS, INC. | ||||||||
|
||||||||
|
By: | |||||||
|
Its: | |||||||
|
|
|||||||
|
||||||||
Participant |
- 4 -
Cumulative Percentage | ||
Vesting Date | of Shares | |
2
3
4
5
6
CARDIOVASCULAR SYSTEMS, INC. | ||||||||
|
||||||||
|
By: | |||||||
|
Its: | |||||||
|
|
|||||||
|
||||||||
Participant |
7
- 2 -
- 3 -
- 4 -
- 5 -
- 6 -
- 7 -
- 8 -
- 9 -
- 10 -
Vesting Date | Percentage/Number of Shares |
-1-
-2-
-3-
-4-
-5-
CARDIOVASCULAR SYSTEMS, INC. | ||||||
|
||||||
|
By: | |||||
|
Michael J. Kallok, President and | |||||
|
Chief Executive Officer | |||||
|
COMPANY | |||||
|
||||||
|
||||||
|
OPTIONEE |
-6-
Vesting Date | Percentage/Number of Shares |
-1-
-2-
-3-
-4-
-5-
CARDIOVASCULAR SYSTEMS, INC. | ||||||
|
||||||
|
By: | |||||
|
||||||
|
Michael J. Kallok, President and | |||||
|
Chief Executive Officer | |||||
|
||||||
OPTIONEE | ||||||
|
||||||
-6-
- 1 -
- 2 -
- 3 -
- 4 -
- 5 -
- 6 -
- 7 -
- 8 -
- 9 -
- 10 -
- 1 -
- 2 -
- 3 -
SHTURMAN CARDIOLOGY SYSTEMS, INC. | ||||||||
|
||||||||
|
By | |||||||
|
Its | |||||||
|
||||||||
|
COMPANY | |||||||
|
||||||||
|
OPTIONEE |
- 4 -
- 1 -
- 2 -
- 3 -
SHTURMAN CARDIOLOGY SYSTEMS, INC. | ||||||||
|
||||||||
|
By | |||||||
|
Its | |||||||
|
||||||||
|
Company | |||||||
|
||||||||
|
Optionee |
- 4 -
Vesting Date | Number of Shares |
-1-
-2-
-3-
CARDIOVASCULAR SYSTEMS, INC. | ||||||
|
||||||
|
By | |||||
|
|
|||||
|
COMPANY | |||||
|
||||||
|
|
|||||
|
OPTIONEE |
-4-
- 1 -
- 2 -
a. | Reimbursement of all ordinary and necessary expenses incurred by Executive for CSI, in accordance with CSIs policies and practices with regard to documentation and payment of such expenses. | ||
b. | Paid time off (PTO), in lieu of vacation, sick, or personal time, in an amount consistent with CSI policies as determined by the Board of Directors. |
a. | Termination by Employer with Cause . For purposes of this Article 3, Cause shall be defined as: |
(1) | Executives neglect of any of his material duties or his failure to carry out reasonable directives from the Board of Directors or its designees; | ||
(2) | Any willful or deliberate misconduct that is injurious to CSI; |
- 3 -
(3) | Any statement, representation or warranty made to the Board or its designees by Executive that Executive knows is false or materially misleading; or | ||
(4) | Executives commission of a felony, whether or not against CSI and whether or not committed during Executives employment. |
b. | Termination by Executive for Good Reason . For purposes of this Article 3, Good Reason shall be defined as: |
(1) | The assignment to Executive, without Executives written consent, of employment responsibilities that are not of comparable responsibility and status to the employment responsibilities described in this Agreement; | ||
(2) | CSIs reduction of Executives base salary without Executives written consent; or | ||
(3) | CSIs failure to provide Executive, without Executives written consent, those employee benefits specifically required by this Agreement. |
a. | Confidential Information shall mean any information not generally known or readily ascertainable by CSIs competitors or the general public. Confidential Information includes, but is not limited to, use of or customization to product designs, plans, drawings or prototypes; data of any type that is created by Executive, is provided, or to which access is provided, in the course of Executives employment by CSI; data or conclusions or opinions formed by Executive in the course of employment; manuals; trade secrets; methods, procedures, or techniques pertaining to the business of CSI; specifications; systems; price lists; marketing plans; sales or service analyses; financial information; customer names or other information; supplier names or other information; employee names or other information; research and development data; diagrams; drawings; videotapes, audiotapes, or computerized media used |
- 4 -
as training regimens; and notes, memoranda, notebooks, and records or documents that are created, handled, seen, or used by Executive in the course of employment. Confidential Information does not include information that Executive can demonstrate by reliable, corroborated documentary evidence (1) is generally available to the public or (2) became generally available through no act or failure to act by Executive. |
b. | Corporate Product means any product or service, (including any component thereof and any research to develop information useful in connection with a product or service) that is being designed, developed, manufactured, marketed or sold by CSI or with respect to which CSI has acquired Confidential Information that it intends to use in, or made plans or statements regarding its intention to undertake, the design, development, manufacture, marketing or sale of a product or service. | ||
c. | Competitive Product means any product or service, (including any component thereof and any research to develop information useful in connection with a product or service) that is being designed, developed, manufactured, marketed or sold by anyone other than the Corporation, and is of the same general type, performs similar functions, or is used for the same purposes as a Corporate Product which Executive worked on or assisted the Corporation in marketing or about which Executive received or had knowledge of Confidential Information. | ||
d. | Render services shall mean directly or indirectly, owning, managing, operating, controlling, providing services to, being employed by, consulting for, or otherwise participating in, a business. | ||
e. | Sell and sold shall mean sell, lease, license, market, or otherwise provide or attempt to provide for compensation or advantage. | ||
f. | Customer shall mean any person or entity that (1) has a contract or business relationship with CSI, (2) is negotiating to contract or enter into a business relationship with CSI, or (3) has, within the last two (2) years of Executives employment with CSI, purchased or leased products or services from CSI. | ||
g. | Invention shall mean any invention, discovery, design, improvement, business method, or idea, whether patentable or copyrightable or not, and whether or not shown or described in writing or reduced to practice. |
- 5 -
a. | solicit or sell, or attempt to solicit or sell, to any CSI customer, services or products that compete with services or products provided by CSI, or that were in the process of being developed by CSI during Executives employment; or | ||
b. | interfere in any way with CSIs relationships with any customer or supplier, or induce any such person or entity to terminate or alter its business relationship with CSI. |
- 6 -
a. | Assignment . Executive shall promptly and fully disclose in writing to CSI, and will hold in trust for CSIs sole right and benefit, any Invention that Executive, during the period of employment and for one year thereafter, makes, conceives, or reduces to practice or causes to be made, conceived, or reduced to practice, either alone or in conjunction with others, that: |
(1) | Relates to any subject matter pertaining to Executives employment; or | ||
(2) | Relates to or is directly or indirectly connected with CSIs business, products, processes, or Confidential Information; or | ||
(3) | Involves the use of any of CSIs time, material, or facility. |
Executive shall keep accurate, complete, and timely records for such Inventions, which records shall be CSIs property. Executive hereby assigns to CSI all of Executives right, title, and interest in and to all such Inventions and, upon CSIs request, Executive shall execute, verify, and deliver to CSI such documents, including without limitation, assignments and patent applications, and shall perform such other acts, including, without limitation, appearing as a witness in any action brought in connection with this Agreement that is necessary to enable CSI to obtain the sole right, title, and benefit to all such Inventions. |
b. | Notice of Excluded Inventions . Executive agrees, and is hereby notified, that the above agreement to assign Inventions to CSI does not apply to any Invention for which no equipment, supplies, facility, or Confidential Information of CSIs was used, which was developed entirely on Executives own time, and (a) which does not relate: (i) directly to CSIs business; or (ii) to CSIs actual or demonstrably anticipated research or development; or (b) which does not result from any work performed by Executive for CSI. |
- 7 -
- 8 -
(a)
|
If to CSI: | Cardiovascular Systems, Inc. | ||
|
651 Campus Drive | |||
|
St. Paul, MN 55112 | |||
|
||||
|
and | |||
|
||||
|
Fredrikson & Byron, P.A. | |||
|
200 South Sixth Street, Suite 4000 | |||
|
Minneapolis, MN 55402 | |||
|
||||
(b)
|
If to Executive: | David L. Martin | ||
|
2016 Stockbridge Avenue | |||
|
Redwood City, CA 94061 |
- 9 -
/s/ David L. Martin | ||||||
David L. Martin | ||||||
|
||||||
Cardiovascular Systems, Inc. | ||||||
|
||||||
|
By: | /s/ Gary Petrucci | ||||
|
||||||
|
Its: | Chairman |
- 10 -
a. | During his employment with CSI, Kallok shall serve CSI faithfully and to the best of his ability. Except as approved in writing by the Board of Directors, which approval shall not be unreasonably withheld, Kallok shall devote his full business and professional time, energy, and diligence to the performance of the duties of such office. Kallok shall perform such duties for CSI (i) as are customarily incident to his office and (ii) as may be assigned or delegated to him from time to time by the Board of Directors of CSI or its designees. During his employment with CSI, Kallok shall not engage in any other business activity that would conflict or interfere with his ability to perform his duties under this Agreement. |
- 1 -
b. | Kallok agrees to be subject to CSIs control, rules, regulations, policies and programs. Kallok further agrees that he shall not enter into any contract on behalf of CSI except as expressly authorized by CSI. |
1) | Design Freeze | ||
2) | Raising $5 million. |
1) | CE Mark | ||
2) | Start of Human Trials |
- 2 -
a. | Reimbursement of all ordinary and necessary expenses incurred by Kallok for CSI, in accordance with CSIs policies and practices with regard to documentation and payment of such expenses. | ||
b. | Paid time off (PTO), in lieu of vacation, sick, or personal time, in an amount consistent with CSI policies as determined by the Board of Directors. |
- 3 -
a. | Termination by Employer with Cause . For purposes of this Article 4, Cause shall be defined as: |
(1) | Kalloks neglect of any of his material duties or his failure to carry out reasonable directives from the Board of Directors or its designees; | ||
(2) | Any willful or deliberate misconduct that is injurious to CSI; | ||
(3) | Any statement, representation or warranty made to the Board or its designees by Kallok that Kallok knows is false or materially misleading; or | ||
(4) | Kalloks commission of a felony, whether or not against CSI and whether or not committed during Kalloks employment. |
b. | Termination by Kallok for Good Reason . For purposes of this Article 4, Good Reason shall be defined as: |
(1) | The assignment to Kallok, without Kalloks consent, of employment responsibilities that are not of comparable responsibility and status to the employment responsibilities described in this Agreement; | ||
(2) | CSIs reduction of Kalloks base salary without Kalloks consent; or | ||
(3) | CSIs failure to provide Kallok, without Kalloks consent, those employee benefits specifically required by this Agreement. |
c. | Severance Benefits Upon Termination by CSI Without Cause or Termination by Kallok for Good Reason . In the event that (A) Kalloks employment is terminated by CSI without Cause or terminated by Kallok for Good Reason, and (B) Kallok executes a release of claims in a form supplied by CSI, then CSI shall: (i) pay Kallok in a lump sum or at regular payroll intervals, at CSIs option, an amount equal to twelve (12) months of Kalloks then current base salary plus the greater of (x) the annual bonus received by Kallok in the previous fiscal year or (y) the annual bonus which would be paid to Kallok for the fiscal year in which termination occurs assuming CSIs financial results for each month subsequent to termination are the same as the average monthly financial results for months prior to termination, which salary and bonus amounts shall be subject to required and authorized deductions and withholdings; |
- 4 -
and (ii) continue to pay CSIs ordinary share of premiums for twelve (12) calendar months for Kalloks COBRA continuation coverage in CSIs group medical, dental, and life insurance plans (as applicable), provided Kallok elects such continuation coverage and timely pays Kalloks share of such premiums, if any. |
a. | Confidential Information shall mean any information not generally known or readily ascertainable by CSIs competitors or the general public. Confidential Information includes, but is not limited to, use of or customization to product designs, plans, drawings or prototypes; data of any type that is created by Kallok, is provided, or to which access is provided, in the course of Kalloks employment by CSI; data or conclusions or opinions formed by Kallok in the course of employment; manuals; trade secrets; methods, procedures, or techniques pertaining to the business of CSI; specifications; systems; price lists; marketing plans; sales or service analyses; financial information; customer names or other information; supplier names or other information; employee names or other information; research and development data; diagrams; drawings; videotapes, audiotapes, or computerized media used as training regimens; and notes, memoranda, notebooks, and records or documents that are created, handled, seen, or used by Kallok in the course of employment. Confidential Information does not include information that Kallok can demonstrate by reliable, corroborated documentary evidence (1) is generally available to the public or (2) became generally available through no act or failure to act by Kallok. | ||
b. | Corporate Product means any product or service, (including any component thereof and any research to develop information useful in connection with a product or service) that is being designed, developed, manufactured, marketed or sold by CSI or with respect to which CSI has acquired Confidential Information which it intends to use in the design, development, manufacture, marketing or sale of a product or service. | ||
c. | Competitive Product means any product or service, (including any component thereof and any research to develop information useful in connection with a product or service) that is being designed, developed, manufactured, marketed or sold by anyone other than the Corporation, and is of the same general type, performs similar functions, or is used for the |
- 5 -
same purposes as a Corporate Product which Employee worked on or assisted the Corporation in marketing or about which Employee received or had knowledge of Confidential Information. |
d. | Render services shall mean directly or indirectly, owning, managing, operating, controlling, providing services to, being employed by, consulting for, or otherwise participating in, a business. | ||
e. | Sell and sold shall mean sell, lease, license, market, or otherwise provide or attempt to provide for compensation or advantage. | ||
f. | Customer shall mean any person or entity that (1) has a contract or business relationship with CSI, (2) is negotiating to contract or enter into a business relationship with CSI, or (3) has, within the last two (2) years of Kalloks employment with CSI, purchased or leased products or services from CSI. | ||
g. | Invention shall mean any invention, discovery, design, improvement, business method, or idea, whether patentable or copyrightable or not, and whether or not shown or described in writing or reduced to practice. |
- 6 -
a. | solicit or sell, or attempt to solicit or sell, to any CSI customer, services or products that compete with services or products provided by CSI, or that were in the process of being developed by CSI during Kalloks employment; or | ||
b. | interfere in any way with CSIs relationships with any customer or supplier, or induce any such person or entity to terminate or alter its business relationship with CSI. |
a. | Assignment . Kallok shall promptly and fully disclose in writing to CSI, and will hold in trust for CSIs sole right and benefit, any Invention that Kallok, during the period of employment and for one year thereafter, makes, conceives, or reduces to practice or causes to be made, conceived, or reduced to practice, either alone or in conjunction with others, that: |
(1) | Relates to any subject matter pertaining to Kalloks employment; or |
- 7 -
(2) | Relates to or is directly or indirectly connected with CSIs business, products, processes, or Confidential Information; or | ||
(3) | Involves the use of any of CSIs time, material, or facility. |
Kallok shall keep accurate, complete, and timely records for such Inventions, which records shall be CSIs property. Kallok hereby assigns to CSI all of Kalloks right, title, and interest in and to all such Inventions and, upon CSIs request, Kallok shall execute, verify, and deliver to CSI such documents, including without limitation, assignments and patent applications, and shall perform such other acts, including, without limitation, appearing as a witness in any action brought in connection with this Agreement that is necessary to enable CSI to obtain the sole right, title, and benefit to all such Inventions. |
b. | Notice of Excluded Inventions . Kallok agrees, and is hereby notified, that the above agreement to assign Inventions to CSI does not apply to any Invention for which no equipment, supplies, facility, or Confidential Information of CSIs was used, which was developed entirely on Kalloks own time, and (a) which does not relate: (i) directly to CSIs business; or (ii) to CSIs actual or demonstrably anticipated research or development; or (b) which does not result from any work performed by Kallok for CSI. |
- 8 -
(a)
|
If to CSI: | Cardiovascular Systems, Inc. |
- 9 -
|
2715 Nevada Avenue North | |||
|
New Hope, MN 55427 | |||
|
||||
|
and | |||
|
||||
|
Fredrikson & Byron, P.A. | |||
|
4000 Pillsbury Center | |||
|
200 South Sixth Street | |||
|
Minneapolis, MN 55402 | |||
|
||||
(b)
|
If to Kallok: | Michael J. Kallok, Ph.D. | ||
|
2715 Nevada Avenue North | |||
|
New Hope, MN 55427 |
/s/ Michael J. Kallok | ||||||
Michael J. Kallok | ||||||
|
||||||
Cardiovascular Systems, Inc. | ||||||
|
||||||
|
By: | /s/ Gary Petrucci | ||||
|
||||||
|
Its: | Director |
- 10 -
CARDIOVASCULAR SYSTEMS, INC
.
|
||||
Date: December 19, 2007 | By | /s/ James E. Flaherty | ||
James E. Flaherty | ||||
Chief Financial Officer | ||||
MICHAEL J. KALLOK, PH.D.
|
||||
Date: December 19, 2007 | By | /s/ Michael J. Kallok | ||
Michael J. Kallok, Ph.D. | ||||
Page 2 of 8
Page 3 of 8
Page 4 of 8
Page 5 of 8
Page 6 of 8
CARDIOVASCULAR SYSTEMS, INC. | ||||||||
|
||||||||
By:
|
Date: | |||||||
|
||||||||
|
James E. Flaherty
Its Chief Financial Officer |
|||||||
|
||||||||
EMPLOYEE: | ||||||||
|
||||||||
|
Date: | |||||||
Page 7 of 8
|
||||||||
Date:
|
Signed: | |||||||
|
||||||||
|
Print Name: | |||||||
|
Page 8 of 8
1.1 | LANDLORD AND TENANT. This Lease (Lease) is entered into this 26 th day of September 2005 by and between Industrial Equities Group LLC (Landlord) and Cardiovascular Systems, Inc. (Tenant). | |
1.2 | PREMISES. Landlord hereby rents, leases, lets and demises to Tenant the following described property (Premises) as illustrated on the site plan attached hereto as Exhibit A; approximately 3,105 square feet of warehouse space and 22,364 square feet of office space and 107 square feet of common area ( 25,576 total square feet) located at Lakeview Business Campus III, 651 Campus Drive, New Brighton, Minnesota which consists of approximately 46,970 square feet (Building). A floor plan of the Premises is attached as Exhibit B and a description of improvements, if any, to be constructed is attached hereto as Exhibit C. | |
1.3 | LEASE TERM. The term of this Lease shall commence on November 1, 2005 (Commencement Date) and shall terminate January 31, 2012 unless sooner terminated as hereinafter provided. In the event that Tenant does not vacate the Premises upon the expiration or termination of this Lease, Tenant shall be a tenant at will for the holdover period and all the terms and provisions of this Lease shall be applicable during that period, except that Tenant shall pay Landlord as base rental for the period of such holdover an amount equal to one & one-half (1½) times the base rent which would have been payable by Tenant had the holdover period been a part of the original term of this Lease, together with all additional rent as provided in this Lease. Tenant agrees to vacate and deliver the Premises to Landlord upon Tenants receipt of notice from Landlord to vacate. The rental payable during the holdover period shall be payable to Landlord on demand. No holding over by Tenant, whether with or without the consent of Landlord, shall operate to extend the term of this Lease. | |
1.4 | BASE RENT. Base Rent is: |
Total Annual | ||||||||
Months | Monthly Base Rent | Base Rent | ||||||
Nov. 1, 2005 Jan. 31, 2006
|
$ | 0.00 | ||||||
Feb. 1, 2006 Jan. 31, 2007
|
$ | 19,177.00 | $ | 230,124.00 | ||||
Feb. 1, 2007 Jan. 31, 2008
|
$ | 19,560.54 | $ | 234,726.48 | ||||
Feb. 1, 2008 Jan. 31, 2009
|
$ | 19,951.75 | $ | 239,421.01 | ||||
Feb. 1, 2009 Jan. 31, 2010
|
$ | 20,350.79 | $ | 244,209.43 | ||||
Feb. 1, 2010
Jan. 31, 2011
|
$ | 20,757.80 | $ | 249,093.62 | ||||
Feb. 1,
2011 Jan. 31, 2012
|
$ | 21,172.96 | $ | 254,075.49 |
Landlords Address: | Tenants Address: | |||||||
Industrial Equities Group LLC
|
Cardiovascular Systems, Inc. | |||||||
c/o Industrial Equities LLP
|
651 Campus Drive | |||||||
321 First Avenue North
|
New Brighton, MN 55112 | |||||||
Minneapolis, MN 55401
|
Attn: James Flaherty | |||||||
Phone: 612/ 332-1122
|
Phone: (763) 544-1890 |
1
2.1 | BASE RENT. Tenant agrees to pay monthly as Base Rent during the term of this Lease the sum of money set forth in Section 1.4 of this Lease, which amount shall be payable to Landlord at the address shown above. One monthly installment shall be due and payable on or before the first day of each calendar month succeeding the Commencement Date during the term of this Lease; provided, if the Commencement Date should be a date other than the first day of a calendar month, then the base rent shall be pro rated on a per diem basis, and all succeeding installments of rent shall be payable on or before the first day of each succeeding calendar month during the term of this Lease. Tenant shall pay, as additional rent, all other sums due under this Lease. Notwithstanding anything in this Lease to the contrary, if Landlord, for any reason whatsoever (other than Tenants default), cannot deliver possession of the Premises to the Tenant on the Commencement Date, this Lease shall not be void or voidable, nor shall Landlord be liable for any loss or damage resulting therefrom, nor shall the expiration of the term be extended, but all rent shall be abated until Landlord delivers possession. Notwithstanding the foregoing, in the event Landlord fails to deliver the Premises to Tenant in the condition required by the Commencement Date, then Tenant shall have the right to terminate this Lease after December 31, 2005 by providing five (5) days written notice to Landlord. | |
2.2 | OPERATING EXPENSES. Tenant shall also pay as additional rent Tenants pro rata share of the Operating Expenses of Landlord for the Building. Landlord may invoice Tenant monthly for Tenants pro rata share of the estimated Operating Expenses for each calendar year, which amount shall be adjusted from time to time by Landlord based upon anticipated operating expenses. Within six (6) months following the close of each calendar year, Landlord shall provide Tenant an accounting showing in reasonable detail the computations of additional rent due under this Section. In the event the accounting shows that the total of the monthly payments made by Tenant exceeds the amount of additional rent due by Tenant under this Section, the accounting shall be accompanied by evidence of a credit to Tenants account. In any event, if the accounting shows that the total of the monthly payments made by Tenant is less than the amount of additional rent due by Tenant under this Section, the accounting shall be accompanied by an invoice for the additional rent. Notwithstanding any other provisions in this Lease, during the year in which this Lease terminates, Landlord, prior to the termination date, shall have the option to invoice Tenant for Tenants pro rata share of the Operating Expenses based upon the previous calendar years Operating Expenses. If this Lease shall terminate on a day other than the last day of a calendar year, the amount of any additional rent payable by Tenant applicable to the year in which the termination shall occur shall be pro rated on the ratio that the number of days from the commencement of the calendar year to and including such termination date bears to 365. Tenant agrees to pay any additional rent due under this Section within ten (10) days following receipt of the invoice or accounting showing additional rent due. Tenants pro rata share set forth in Section 1.7 shall, subject to reasonable adjustment by Landlord, be equal to a percentage based upon a fraction, the numerator of which is the total area of the Premises as set forth in Article 1 and the denominator of which shall be the net rentable area of the Building, as the same may change from time to time. Landlord shall maintain books and records showing, in reasonable detail, actual Operating Expenses in accordance with generally accepted accounting principles. All such books and records shall be made available to Tenant for inspection upon reasonable prior notice. | |
2.3 | DEFINITION OF OPERATING EXPENSES. The term Operating Expenses includes all expenses incurred by Landlord with respect to the maintenance and operation of the Building, including, but not limited to, the following: maintenance, repair and replacement costs; electricity, fuel, water, sewer, gas and other common Building utility charges; equipment used for maintenance and operation of the Building; operational expenses; exterior window washing and janitorial services; trash and snow removal; landscaping and pest control; management fees, wages and benefits payable to employees of Landlord whose duties are directly connected with the operation and maintenance of the Building; all services, supplies, repairs, replacements or other expenses for maintaining and operating the Building or project including parking and common areas; improvements made to the Building which are required under any governmental law or regulation that was not applicable to the Building at the time it was constructed; installation of any device or other equipment which improves the operating efficiency of any system within the Premises and thereby reduces Operating Expenses; all other expenses which would generally be regarded as operating, repair, replacement and maintenance expenses; all real property taxes and installments of special assessments, including dues and assessments by means of deed restrictions and/or owners association which accrue against the Building during the term of |
2
this Lease and legal fees incurred in connection with actions to reduce the same; and all insurance premiums Landlord is required to pay or deems necessary to pay, including fire and extended coverage, and rent loss and public liability insurance. | ||
Notwithstanding the foregoing, Operating Expenses shall not include the following: |
i. | repairs or other work occasioned by fire, windstorm or other casualty, to the extent that the costs thereof are reimbursed to Landlord by insurers, or would have been reimbursed had the insurance required hereunder been maintained, or by governmental authorities in eminent domain; | ||
ii. | leasing commission, attorneys fees and other expenses incurred in connection with negotiations or disputes with tenants, or prospective tenants of the Building; | ||
iii. | costs incurred in renovating or otherwise improving or decorating or redecorating space for tenants in the Building or other space leased or held for lease in the Building; | ||
iv. | Landlords costs of utilities, janitorial and other services sold to tenants for which Landlord is entitled to be reimbursed by tenants; | ||
v. | Depreciation and amortization; | ||
vi. | Costs which under generally accepted accounting principles, consistently applied, must be capitalized, and such costs shall be amortized over there useful life, not to exceed fifteen (15) years, at 10% interest; | ||
vii. | Interest on debt or amortization payments on any mortgage or mortgages, and rental under any ground or underlying lease or leases; | ||
viii. | The cost of changes to the Building, parking structure, or the appurtenances in compliance with any laws, statutes, ordinances, rules or directives enacted prior to the Commencement Date; and | ||
ix. | Any charges for ground leases or other underlying leases, easements or any other similar or dissimilar use fees or other costs. |
2.4 | INCREASE IN INSURANCE PREMIUMS. If an increase in any insurance premiums paid by Landlord for the Building is caused by Tenants use of the Premises or if Tenant vacates the Premises and causes an increase in such premiums, then Tenant shall pay as additional rent the amount of such increase to Landlord. | |
2.5 | SECURITY DEPOSIT. The security deposit set forth in Section 1.6 shall be held by Landlord for the performance of Tenants covenants and obligations under this Lease, it being expressly understood that the security deposit shall not be considered an advance payment of rental or a measure of Landlords damage in case of default by Tenant. Upon the occurrence of any event of default by Tenant or breach by Tenant of Tenants covenants under this Lease, and Tenants failure to cure within the applicable time frame, Landlord may, from time to time, without prejudice to any other remedy, use the security deposit to the extent necessary to make good any arrears of rent, or to repair any damage or injury, or pay any expense or liability reasonably incurred by Landlord as a result of the event of default or breach of covenant, and any remaining balance of the security deposit shall be returned by Landlord to Tenant upon termination of this Lease. If any portion of the security deposit is so used or applied, Tenant shall upon ten (10) days written notice from Landlord, deposit with Landlord by cash or cashiers check an amount sufficient to restore the security deposit to its original amount. | |
2.6 | LATE CHARGES. Tenants failure to pay rent promptly may cause Landlord to incur unanticipated costs. The exact amount of such costs are impractical or extremely difficult to ascertain, such costs may include, but are not limited to, processing and accounting charges and late charges which may be imposed on Landlord by any ground lease, mortgage or trust deed encumbering the Property. Therefore, if Landlord doesnt receive any rent payment within five (5) days after it becomes due, Tenant shall pay Landlord a late charge equal to ten percent (10%) of the overdue amount. The parties agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of such late payment. Tenant shall have two (2) annual late payment waivers provided payment is received within five (5) business days of written notice from Landlord. | |
2.7 | INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by Tenant to Landlord which is not paid when due shall bear interest at the rate of fifteen percent (15%) per annum from the due date of such amount. However, interest shall not be payable on late charges to be paid by Tenant under this Lease. The payment of interest on such amounts shall not excuse or cure any default by Tenant under this Lease. If the interest rate specified in this Lease is higher than the rate permitted by law, the interest rate is hereby decreased to the maximum legal interest rate permitted by law. |
3
3.1 | USE . Tenant warrants and represents to Landlord that the Premises shall be used and occupied only for the purpose as set forth in Section 1.5. Tenant shall occupy the Premises, conduct its business and control its agents, employees, invitees and visitors in such a manner as is lawful, reputable and will not create a nuisance. Tenant shall not permit any operation which emits any odor or matter which intrudes other portions of the Building or otherwise interfere with, annoy or disturb any other portions of the Building or otherwise interfere with, annoy or disturb any other lessee in its normal business operations or Landlord in its management of the Building. Tenant shall neither permit any waste on the Premises nor permit the Premises to be used in any way which would in the opinion of Landlord, be extra hazardous on account of fire or which would in any way increase or render void the fire insurance on the Building. | |
3.2 | SIGNS . No sign or stickers of any type or description (to include security stickers) shall be erected, placed or painted in or about the Premises or Building which are visible from the exterior of the Premises, except those submitted to, and approved by Landlord in writing, which approval shall not be unreasonably withheld, and are in conformance with Landlords sign criteria, if any, established for the Building. Security stickers may be placed on glass surfaces only. | |
3.3 | COMPLIANCE WITH LAWS, RULES AND REGULATIONS . Tenant, at Tenants sole cost and expense, shall comply with all laws, ordinances, orders, rules and regulations of state, federal, municipal or other agencies or bodies having jurisdiction over the use, condition or occupancy of the Premises but only if the requirements apply to Tenants specific use of the Premises and not to office or retail use generally, and otherwise Landlord shall be responsible for such compliance. Tenant will comply with the reasonable rules and regulations of the Building adopted by Landlord. Landlord shall have the right at all times to change and amend the rules and regulations in any reasonable manner as may be deemed advisable for the safety, care, cleanliness, preservation of good order and operation or use of the Building or the Premises. All rules and regulations of the Building will be sent by Landlord to Tenant in writing and shall thereafter be carried out and observed by Tenant. | |
3.4 | WARRANTY OF POSSESSION . Landlord warrants that it has the right and authority to execute this Lease, and Tenant, upon payment of the required rents and subject to the terms, conditions, covenants and agreements contained in this Lease, shall have possession of the Premises during the full term of this Lease as well as any extension or renewal thereof. Landlord shall not be responsible for the acts or omissions of any other Lessee or third party that may interfere with Tenants use and enjoyment of the Premises. | |
3.5 | RIGHT OF ACCESS . Upon reasonable prior notice, Landlord or its authorized agents shall at any and all reasonable times during usual business hours have the right to enter the Premises to inspect the same, to show the Premises to prospective purchasers, Lessees, mortgagees, insurers or other interested parties, and to alter, improve or repair the Premises or any other portion of the Building. Tenant hereby waives any claim for damages for injury or inconvenience to or interference with Tenants business, any loss of occupancy or use of the Premises, and any other loss occasioned thereby. Notwithstanding the foregoing, Landlord agrees to exercise the rights set forth herein in a manner that does not unreasonably interrupt or impair Tenants use of the Premises. Tenant shall not change Landlords lock system or in any other manner prohibit Landlord from entering the Premises. Landlord shall have the right to use any and all means which Landlord may deem proper to open any door in an emergency without liability therefore. Tenant shall permit Landlord to erect, use, maintain and repair pipes, cables, conduits, plumbing, vents and wires in, to and through the Premises as often and to the extent that the Landlord may now or hereafter deem to be necessary or appropriate for the proper use, operation and maintenance of the Building, provided the same does not unreasonably interfere with Tenants use or operation of the Premises. |
4.1 | BUILDING SERVICES . Tenant shall pay when due, all charges for utilities furnished to or for the use or benefits of Tenant or the Premises. Tenant shall have no claim for rebate of rent on account of any interruption in service. | |
4.2 | THEFT OR BURGLARY . Landlord shall not be liable to Tenant for losses to Tenants |
4
property or personnel caused by criminal acts or entry by unauthorized persons into the Premises or the Building. |
5.1 | LANDLORD REPAIRS. Landlord shall not be required to make any improvements, replacements or repairs of any kind or character to the Premises or the Building during the term of this Lease except as are set forth in this Section. Landlord shall maintain only the roof, foundation, parking and common areas, the structural soundness of the exterior walls, doors, corridors and other structures serving the Premises, provided that Landlords cost of maintaining, replacing and repairing the items set forth in this Section are operating expenses subject to the additional rent provisions in Section 2.2 and 2.3. Landlord shall not be liable to Tenant, except as expressly provided in this Lease, for any damage or inconvenience and Tenant shall not be entitled to any abatement or reduction of rent by reason of any repairs, alterations or additions made by Landlord under this Lease; provided, however, if Landlord fails to complete a repair obligation within (15) days after receipt of notice from Tenant, Tenant shall have the right to complete the repair and bill Landlord for the reasonable cost of said repair. | |
5.2 | TENANT REPAIRS. Tenant shall, at all times throughout the term of this Lease, including renewals and extensions, at its sole expense, keep and maintain the Premises in a clean, safe, and sanitary condition and in compliance with all applicable laws, codes, ordinances, rules and regulations. Tenants obligations hereunder shall include, but not be limited to, the maintenance, repair and replacement, if necessary, of all heating, ventilation, air conditioning, lighting and plumbing fixtures and equipment, fixtures, motors and machinery, all interior walls, partitions, doors and windows, including the regular painting thereof, all exterior entrances, windows, doors and docks and the replacement of all broken glass. When used in this provision, the term repairs shall include replacements or renewals when necessary, and all such repairs made by the Tenant shall be equal in quality and class to the original work. The Tenant shall keep and maintain all portions of the Premises and the sidewalk and areas adjoining the same in a clean and orderly condition, free of accumulation of dirt, rubbish, snow and ice. If Tenant fails, refuses or neglects to maintain or repair the Premises as required in this Lease after notice shall have been given Tenant, in accordance with this Lease, Landlord may make such repairs without liability to Tenant for any loss or damage that may accrue to Tenants merchandise, fixtures or other property or to Tenants business by reason thereof, and upon completion thereof, Tenant shall pay to Landlord all costs plus fifteen percent (15%) for overhead incurred by Landlord in making such repairs upon presentation to Tenant of bill therefore. Notwithstanding the foregoing, provided Tenant has engaged in a consistent, professional maintenance contract for the HVAC equipment serving the Premises, then Tenant shall not be required at lease termination to replace any HVAC equipment serving the Premises. | |
5.3 | TENANT DAMAGES. Tenant shall not allow any damages to be committed on any portion of the Premises or Building or common areas, and at the termination of this Lease, by lapse of time or otherwise, Tenant shall deliver the Premises to Landlord in as good condition as existed at the Commencement Date of this Lease, ordinary wear and tear excepted. The cost and expense of repairs necessary to restore the Premises to the condition required herein shall be borne by Tenant. |
6.1 | LANDLORD IMPROVEMENTS. Landlord shall provide the improvements (as outlined on Exhibit B), consistent with the attached Exhibit C, to include: |
0 | Demo walls as required per plan | ||
1 | Construct new walls as required per plan | ||
2 | Paint all drywall walls | ||
3 | Furnish and install new carpet and base | ||
4 | VCT to be cleaned, patched and repaired as necessary | ||
5 | Replace ceiling tiles as necessary | ||
6 | Re-lamp lights as necessary | ||
7 | Existing electrical to remain for Tenants future use; provided, however, that Landlord shall provide all required electrical that may be necessary due to wall modifications | ||
8 | Restrooms cleaned and all plumbing certified in good working order | ||
| Service and certify that the HVAC unit(s) serving the Premises are in good |
5
working order, and replace the compressor unit(s), if required, within one year following the Commencement Date |
Landlord further agrees to provide the additional improvements as discussed in the meeting with Paul Robinson on August 31, 2005 to upgrade the existing clean room to Class 10,000, to include the following: |
0 | Furnish and install (8) 120v cord drops and (?) 102/220 cord drops | ||
1 | Furnish and install (6) HEPA filters for clean room | ||
2 | Provide plentium drop vent covers | ||
3 | Furnish and install (5) argon lines | ||
4 | Furnish and install (23) air lines | ||
5 | Construct drywall chases for floor air ducting | ||
6 | Furnish and install (3) stainless steel double sinks and (4) stainless steel sink sinks | ||
7 | Furnish and install cabinets (upper and/or lower and countertops) in machine shop, chemical lab and production per plan |
6.2 | TENANT IMPROVEMENTS. Tenant shall not make or allow to be made any alterations or physical additions in or to the Premises without first obtaining the written consent of Landlord, which consent may in the sole and absolute discretion of Landlord be denied. Any alterations, physical additions or improvements to the Premises made by Tenant shall at once become the property of Landlord and shall be surrendered to Landlord upon the termination of this Lease, provided, however, Landlord, at its option, may require Tenant to remove any physical additions and/or repair any alterations in order to restore the Premises to the conditions existing at the time Tenant took possession, all costs of removal and/or alterations to be borne by Tenant. This clause shall not apply to moveable equipment or furniture owned by Tenant, which may be removed by Tenant at the end of the term of this Lease if Tenant is not then in default and if such equipment and furniture are not subject to any other rights, liens and interests of Landlord. |
7.1 | SUBSTANTIAL DESTRUCTION. If all or a substantial portion of the Premises or the Building should be totally destroyed by fire or other casualty, or if the Premises or the Building should be damaged so that rebuilding cannot reasonably be completed within one hundred eighty (180) working days after the date written notification by Tenant to Landlord of the destruction, or if insurance proceeds are not made available to Landlord, or are inadequate for restoration, this Lease shall terminate at the option of either party by written notice to the other party within sixty (60) days following the occurrence, and the rent shall be abated for the unexpired portion of the Lease effective as of the date of this written notification. | |
7.2 | PARTIAL DESTRUCTION. If the Premises should be partially damaged by fire or other casualty, and rebuilding or repairs can reasonably be completed within one hundred eighty (180) working days from the date of written notification by Tenant to Landlord of the destruction, and insurance proceeds are adequate and available to Landlord for restoration, this Lease shall not terminate, and Landlord shall at its sole risk and expense proceed with reasonable diligence to rebuild or repair the Building or other improvements to substantially the same condition in which they existed prior to the damage. If the Premises are to be rebuilt or repaired and are untenantable in whole or in part following the damage and the damage or destruction was not caused or contributed to by act of negligence of Tenant, its agents, employees, invitees or those for whom Tenant is responsible, the rent payable under this Lease during the period for which the Premises are untenantable shall be adjusted to such an extent as may be fair and reasonable under the circumstances. In the event Landlord fails to complete the necessary repairs or rebuilding within one hundred eighty (180) working days from the date of written notification by Tenant to Landlord of the destruction, Tenant may at its option to terminate this Lease by delivering written notice of termination to Landlord, whereupon all rights and obligations under this Lease shall cease to exist. | |
7.3 | PROPERTY INSURANCE. Landlord shall not be obligated in any way or manner to insure any personal property (including, but not limited to, any furniture, machinery, goods or supplies) of Tenant upon or within the Premises, any fixtures installed or paid for by Tenant upon or within the Premises, or any improvements which Tenant may construct on the Premises. Tenant shall maintain property insurance on its personal property and shall |
6
also maintain plate glass insurance. Tenant shall have no right in or claim to the proceeds of any policy of insurance maintained by Landlord even if the cost of such insurance is borne by Tenant as set forth in Article 2. Landlord shall maintain commercially reasonable casualty insurance on the Building and all improvements. | ||
7.4 | WAIVER OF SUBROGATION. Anything in this Lease to the contrary not withstanding, Landlord and Tenant hereby waive and release each other of and from any and all right of recovery, claim, action or cause of action, against each other, their agents, officers and employees, for any loss or damage that may occur to the Premises, the improvements of the Building or personal property within the Building, by reason of fire or the elements, regardless of cause or origin, including negligence of Landlord or Tenant and their agents, officers and employees. Landlord and Tenant agree immediately to give their respective insurance companies which have issued policies of insurance covering all risk of direct physical loss, written notice of the terms of the mutual waivers contained in this Section. | |
7.5 | HOLD HARMLESS. Landlord shall not be liable to Tenants employees, agents, invitees, licensees or visitors, or to any other person, for an injury to a person or damage to property on or about the Premises caused by any act or omission of Tenant, its agents, servants or employees, or of any other person entering upon the Premises under express or implied invitation by Tenant, or caused by the improvements located on the Premises becoming out of repair, the failure or cessation of any service provided by Landlord (including security service and devices), or caused by leakage of gas, oil, water or steam or by electricity emanating from the Premises, except to the extent that liability for damage or loss is caused by the gross negligence of Landlord, its agents, contractors or employees. Tenant agrees to indemnify and hold harmless Landlord of and from any loss, attorneys fees, expenses or claims arising out of any such damage or injury. | |
7.6 | PUBLIC LIABILITY INSURANCE. Tenant shall during the term hereof keep in full force and effect at its expense a policy or policies of public liability insurance with respect to the Premises and the business of Tenant, on terms and with companies reasonably approved in writing by Landlord; in which both Tenant and Landlord shall be covered by being named as insured parties under reasonable limits of liability not less than $1,000,000, or such greater coverage as landlord may reasonably require, combined single limit coverage for injury or death. Such policy or policies shall provide that thirty (30) days written notice must be given to Landlord prior to cancellation thereof. Tenant shall furnish evidence satisfactory to Landlord at the time this Lease is executed that such coverage is in full force and effect. |
8.1 | SUBSTANTIAL TAKING. If all or a substantial part of the Premises are taken for any public or quasi-public use under any governmental law, ordinance or regulation, or by right of eminent domain or by purchase in lieu thereof, and the taking would prevent or materially interfere with the use of the Premises for the purpose for which it is then being used, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease effective on the date physical possession is taken by the condemning authority. Tenant shall have no claim to the condemnation award or proceeds in lieu thereof, except that Tenant shall be entitled to a separate award granted to Tenant. | |
8.2 | PARTIAL TAKING. If all or a substantial part of this Premises are taken for an public or quasipublic use under any governmental law, ordinance or regulation, or by right of eminent domain or by purchase in lieu thereof, and this Lease is not terminated as provided in Section 8.1 above, the rent payable under this Lease during the unexpired portion of the term shall be adjusted to such an extent as may be fair and reasonable under the circumstances. If not so terminated, then landlord shall restore the Building and the Premises to a complete architectural unit and rent shall abate until Landlord completes its restoration obligation. Tenant shall have no claim to the condemnation award or proceeds in lieu thereof, except that Tenant shall be entitled to any separate award grated to Tenant. Landlord shall commence restoration and shall restore the Building and the Premises with reasonable promptness, subject to delays beyond Landlords control and delays in the making of condemnation or sale proceeds adjustment by Landlord; and Tenant shall have no right to terminate this Lease except as herein provided. Upon completion of such restoration, the rent shall be adjusted based upon the portion, if any, of the Premises restored. |
7
9.1 | LANDLORD ASSIGNMENT. Landlord shall have the right to sell, transfer or assign, in whole or in part, its rights and obligations under this Lease and in the Building. Any such sale, transfer or assignment shall operate to release Landlord from any and all liabilities under this Lease arising after the date of such sale, assignment or transfer. | |
9.2 | TENANT ASSIGNMENT. Tenant shall not assign, in whole or in part, this Lease, or allow it to be assigned, in whole or in part, by operation of law or otherwise (including without limitation by transfer of a majority interest of stock, merger, or dissolution, which transfer of majority interest of stock, merger or dissolution shall be deemed an assignment) or mortgage or pledge the same, or sublet the Premises, in whole or in part, without the prior written consent of Landlord, which shall not be unreasonably withheld or delayed, and in no event shall said such assignment or sublease ever release Tenant or any guarantor from any obligation or liability hereunder. Notwithstanding anything in this Lease to the contrary, in the event of any assignment or sublease, any option or right of first refusal granted to Tenant shall not be assignable by Tenant to any assignee or subleasee. No assignee or subleasee of the Premises or any portion thereof may assign or sublet the Premises or any portion thereof. Notwithstanding the foregoing, Tenant shall have the right to assign or sublet the Premises without without Landlords consent to any of the following (a Permitted Transferee): (i) any successor corporation or other entity resulting from the merger or consolidation of Tenant; (ii) any entity that which controls, is controlled by, or is under common control with Tenant; or, (iii) any purchaser of all or substantially all of Tenants assets. | |
9.3 | CONDITIONS OF ASSIGNMENT. With the exception of an assignment or sublease to a Permitted Transferee, if Tenant desires to assign or sublet all or any part of the Premises, it shall so notify Landlord at least thirty (30) days in advance of the date on which Tenant desires to make such assignment or sublease. Tenant shall provide Landlord With a copy of the proposed assignment or sublease and such information as Landlord might request concerning the proposed sublessee or assignee to allow Landlord to make informed judgments as to the financial condition, reputation, operations and general desirability of the proposed sublessee or assignee. Within fifteen(15) days after Landlords receipt of Tenants proposed assignment or sublease and all required information concerning the proposed sublessee or assignee, Landlord shall have the following options: (1) cancel this Lease as to the Premises or portion thereof proposed to be assigned or sublet; (2) consent to the proposed assignment or sublease, and, if the rent due payable by any assignee or sublessee under any such permitted assignment or sublease (or a combination of the rent payable under such assignment or, sublease plus any bonus or any other consideration or any payment incident thereto) exceeds the rent payable under this Lease for such space, Tenant shall pay to Landlord all such excess rent and other excess consideration within ten (10) days following receipt thereof by Tenant; or (3) refuse, in its sole and absolute discretion and judgment, to consent to the proposed assignment or sublease, which refusal shall be deemed to have been exercised unless Landlord gives Tenant written notice providing otherwise. Upon the occurrence of an event of default, if all or any part of the Premises are then assigned or sublet, Landlord, in addition to any other remedies provided by this Lease or provided by law, may, at its option, collect directly from the assignee or sublessee all rents becoming due to Tenant by reason of this assignment or sublease, and Landlord shall have a security interest in all properties on the Premises to secure payment of such sums. Any collection directly by Landlord from the assignee or sublessee shall not be construed to constitute a novation or a release of Tenant or any guarantor from the further performance of its obligation under this Lease. | |
9.4 | RIGHTS OF MORTGAGE. Tenant accepts this Lease subject and subordinate to any recorded mortgage presently existing or hereafter created upon the Building and to all existing recorded restrictions, covenants, easements and agreements with respect to the Building. Landlord is hereby irrevocably vested with full power and authority to subordinate Tenants interest under this Lease to any first mortgage lien hereafter placed on the Premises, and Tenant agrees upon demand to execute additional instruments subordinating this Lease as landlord may require. If the interests of Landlord under this Lease shall be transferred by reason of foreclosure or other proceedings for enforcement of any first mortgage or deed of trust on the Premises, Tenant shall be bound to the transferee (sometimes called the Purchaser) at the option of the Purchaser, under the terms, covenants and conditions of this Lease for the balance of the term remaining, including any extensions or renewals, with the same force and effect as if the Purchaser were Landlord under this Lease, and, if requested by the Purchaser, Tenant agrees to attorn to the Purchaser, including the first mortgagee under any such mortgage if it be the Purchaser, as its Landlord. Notwithstanding the foregoing, Tenant shall not be disturbed in its possession of the Premises so long as Tenant is not in default hereunder. |
8
9.5 | TENANTS STATEMENT. Tenant agrees to furnish, from time to time, within fifteen (15) days after receipt of a request from Landlord to Landlords mortgagee, a statement certifying, if applicable, the following: Tenant is in possession of the Premises; the Premises are acceptable; the Lease is in full force and effect; the Lease is unmodified; Tenant claims no present charge, lien, or claim or offset against rent; the rent is paid for the current month, but is not prepaid for more than one month and will not be prepaid for more then one month in advance; there is no existing default by reason of some act or omission by Landlord; and such other matters may be reasonably required by Landlord or Landlords mortgagee. Tenants failure to deliver such statement, in addition to being a default under this Lease, shall be deemed to establish conclusively that this Lease is in full force and effect except as declared by Landlord, that Landlord is not in default of any of its obligations under this Lease, and that Landlord has not received more than one months rent in advance. Tenant agrees to furnish, from time to time, within ten (10) days after receipt of request from Landlord, a current financial statement of Tenant, certified as true and correct by Tenant. |
11.1 | DEFAULT BY TENANT. The following shall be deemed to be events of default (Default) by Tenant under this Lease: (1) Tenant shall fail to pay when due any installment of rent or any other payment required pursuant to this Lease; (2) Tenant shall fail to comply with any term, provision or covenant of this Lease, other than the payment of rent, and the failure is not cured within ten (10) days after written notice to Tenant or such additional time period as is reasonably necessary to cure such default, provided Tenant commences such cure and proceeds with due diligence to cure such default: (3) Tenant shall file a petition or if an involuntary petition is filed against Tenant, or becomes insolvent, under any applicable federal or state bankruptcy or insolvency law or admits that it cannot meet its financial obligation as they become due, or a receiver or trustee shall be appointed for all or substantially all of the assets of Tenant; or Tenant shall make a transfer in fraud of creditors or shall make an assignment for the benefit of creditors; or (4) Tenant shall do or permit to be done any act which results in a lien being filed against the Premises or the Building and/or project of which the Premises are a part. | |
In the event that an order for relief is entered in any case under Title 11, U.S.C. (the Bankruptcy Code) in which Tenant is the debtor and: (A) Tenant as debtor-in-possession, or any trustee who may be appointed in the case (the Trustee) seeks to assume the Lease, then Tenant, or Trustee if applicable, in addition to providing adequate assurance described in applicable provisions of the Bankruptcy Code, shall provide adequate assurance to Landlord of Tenants future performance under this Lease by depositing with Landlord a sum equal to the lesser of twenty-five percent (25%) of the rental or other charges due for the balance of this Lease term or six (6) months rent (Security), to be held (without any allowance or interest thereon) to secure Tenants obligation under the Lease, and (B) Tenant, or Trustee if applicable, seeks to assign the Lease after assumption of the same, then Tenant, in addition to providing adequate assurance described in applicable provisions of the Bankruptcy Code, shall provide adequate assurance to Landlord of the proposed assignees future performance under the Lease by depositing with Landlord, a sum equal to the Security to be held (without any allowance or interest thereon) to secure performance under the Lease. Nothing contained herein expresses or implies, or shall be construed to express or imply, that Landlord is consenting to assumption and/or assignment of the Lease by Tenant, and Landlord expressly reserves all of its rights to object to any assumption and/or assignment of the Lease. Neither Tenant nor any Trustee shall conduct or permit the conduct of any fire, bankruptcy, going out of business or auction sale in or from the Premises. | ||
11.2 | REMEDIES FOR TENANTS DEFAULT. Upon the occurrence of a Default as defined above, Landlord may elect either (i) to cancel and terminate this Lease and this Lease shall not be treated as an asset of Tenants bankruptcy estate, or (ii) to terminate Tenants right to possession only without canceling and terminating Tenants continued liability under this Lease. Notwithstanding the fact that initially Landlord elects under (ii) to terminate Tenants right to possession only, Landlord shall have the continuing right to cancel and terminate this Lease by giving three (3) days written notice to Tenant of such further election, and shall have the right to pursue any remedy at law or in equity that may be available to Landlord. |
9
In the event of election under (ii) to terminate Tenants right to possession only, Landlord may, at Landlords option, enter the Premises and take and hold possession thereof, without such entry into possession terminating this Lease or releasing Tenant in whole or in part from Tenants obligation to pay all amounts hereunder for the full stated term. Upon such re-entry, Landlord may remove all persons and property from the Premises and such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant, without becoming liable for any loss or damage which may be occasioned thereby. Such re-entry shall be conducted in the following manner: without resort to judicial process or notice of any kind if Tenant has abandoned or voluntarily surrendered possession of the Premises, and, otherwise, by resort to judicial process. Upon and after entry into possession without termination of the Lease, Landlord may, but is not obligated to, relet the Premises, or any part thereof, to any one other than the Tenant for such time and upon such terms as Landlord, in Landlords reasonable discretion, shall determine. Landlord may make alterations and repairs to the Premises to the extent deemed by Landlord necessary or desirable. | ||
Upon such re-entry, Tenant shall be liable to Landlord as follows: |
A. | For reasonable attorneys fees incurred by Landlord in connection with exercising any remedy hereunder. | ||
B. | For the unpaid installments of base rent, additional rent or other unpaid sums which were due prior to such re-entry, including interest and late payment fees, which sums shall be payable immediately. | ||
C. | For the installments of base rent, additional rent, and other sums falling due pursuant to the provisions of this Lease for the period after re-entry during which the Premises remain vacant, including late payment charges and interest, which sums shall be payable as they become due hereunder. | ||
D. | For all reasonable expenses incurred in releasing the Premises, including leasing commissions, attorneys fees, and costs of alteration or repairs, which shall be payable by Tenant as they are incurred by Landlord: and | ||
E. | While the Premises are subject to any new lease or leases made pursuant to this Section, for the amount by which the monthly installments payable under such new lease or leases is less than the monthly installment for all charges payable pursuant to this Lease, which deficiencies shall be payable monthly. |
Notwithstanding Landlords election to terminate Tenants right to possession only, and notwithstanding any reletting without termination, Landlord, at any time thereafter, may elect to terminate this Lease, and to recover (in lieu of the amounts which would thereafter be payable pursuant to the foregoing, but not in diminution of the amounts payable as provided above before termination), as damages for loss of bargain and not as a penalty, an aggregate sum equal to the amount by which the rental value of the portion of the term unexpired at the time of such election is less than an amount equal to the unpaid base rent, percentage rent, and additional rent and all other charges which would have been payable by Tenant for the unexpired portion of the term of this Lease, which deficiency and all expenses incident thereto, including commissions, attorneys fees, expenses of alterations and repairs, shall be due to Landlord as of the time Landlord exercises said election, notwithstanding that the term had not expired. If Landlord, after such re-entry, leases the Premises, then the rent payable under such new Lease shall be conclusive evidence of the rental value of the unexpired portion of the term of this Lease. | ||
If this Lease shall be terminated by reason of bankruptcy or insolvency of Tenant, Landlord shall be entitled to recover from Tenant or Tenants estate, as liquidated damages for loss of bargain and not as a penalty, the amount determined by the immediately preceding paragraph. | ||
11.3 | LANDLORDS RIGHT TO PERFORM FOR ACCOUNT OF TENANT. If Tenant shall be in Default under this Lease, Landlord may cure the Default at any time for the account and at the expense of Tenant. If Landlord cures a Default on the part of Tenant, Tenant shall reimburse Landlord upon demand for any amount expended by Landlord in connection with the cure, including, without limitation, attorneys fees and interest. | |
11.4 | INTEREST AND LEASE ENFORCEMENT COSTS. In the event of a Default by Tenant, then, in addition to all other remedies allowed by this Lease or by law, interest will |
10
accrue on any delinquent sum at the rate of the lesser of eighteen percent (18%) per annum or the highest rate permitted by law, and (b) Tenant will be liable for all expenses incurred by Landlord in order to enforce Landlords rights and remedies on account of that Default. Such enforcement expenses include, without limitation, attorneys fees (whether or not suit is actually filed, and, if filed, whether or not incurred in seeking a judgment or order, in defending against any claim or defense raised by Tenant, enforcing a judgment or order, defending a judgment or order on appeal, or successfully appealing any judgment or order); sheriffs fees; process servers fees; filing fees; court imposed fees for obtaining any writ; expert witness fees; and, in the case of each suit filed on account of a Tenant Default (including, without limitation, each unlawful detainer action), an automatic charge (in addition to the late charge authorized by Section 2.6), set at the liquidated amount of $300, to cover additional landlord administrative expense associated with litigation. Furthermore, and whether or not Tenant is in default, Tenant will be liable for all expenses incurred by Landlord in successfully establishing its rights or successfully defending against any claim asserted by Tenant in any action in which a court or other tribunal is asked to adjudicate any such matters. | ||
11.5 | ADDITIONAL REMEDIES, WAIVER, ETC. |
A. | The rights and remedies of Landlord set forth herein shall be in addition to any other right and remedy now and hereafter provided by law. All rights and remedies shall be cumulative and not exclusive of each other. Landlord may exercise its rights and remedies at any time, in any order, to any extent, and as often as Landlord deems advisable without regard to whether the exercise of one right or remedy precedes, concurs with or succeeds the exercise of another. | ||
B. | A single or partial exercise of a right or remedy shall not preclude a further exercise thereof, or the exercise of another right or remedy from time to time. | ||
C. | No delay or omission by Landlord in exercising a right or remedy shall exhaust or impair the same or constitute a waiver of, or acquiesce to, a Default. | ||
D. | No waiver of Default shall extend to or affect any other Default or impair any right or remedy with respect thereto. | ||
E. | No action or inaction by Landlord shall constitute a waiver of Default. | ||
F. | No waiver of a Default shall be effective unless it is in writing and signed by Landlord. |
13.1 | ENTIRE AGREEMENT. It is expressly agreed by Tenant, as a material consideration for the execution of this Lease, that this, Lease, with the specific references to written extrinsic documents, is the entire agreement of the parties: that there are, and were, no verbal representations, warranties, understandings, stipulations, agreements or promises pertaining to this Lease or to the expressly mentioned written extrinsic documents not incorporated in writing in this Lease. | |
13.2 | AMENDMENT. The Lease may not be altered, waived, amended or extended except by a instrument in writing signed by Landlord and Tenant. | |
13.3 | LIMITATION OF WARRANTIES. Landlord and Tenant expressly agree that there are and shall be no implied warranties or merchantability, habitability, fitness for a particular purpose or of any other kind arising out of this Lease, and there are not warranties which extend beyond those expressly set forth in this Lease. |
11
14.1 | SUCCESSORS AND ASSIGNS . This Lease shall be binding upon and inure to the benefit of Landlord and Tenant and their respective heirs, personal representatives, successors and assigns. It is hereby covenanted and agreed that should Landlords interest in the Premises cease to exist for any reason during this Lease, then notwithstanding the happening of such event this Lease nevertheless shall remain unimpaired and in full force and effect, and Tenant hereunder agrees to attorn to the then owner of the Premises. | |
14.2 | USE OR RENT TAX. If applicable in the jurisdiction where the Premises are issued, Tenant shall pay and be liable for all rental, sales and use taxes or other similar taxes, if any, levied or imposed by any city, state, county or other similar taxes, if any, levied or imposed by any city, state, county or other governmental body having authority, such payments to be in addition to all other payments required to be paid to Landlord under the terms of this Lease. Any such payment shall be paid concurrently with the payment of the rent, additional rent, operating expenses or other charges upon which the tax is based as set forth above. | |
14.3 | ACT OF GOD. Landlord shall not be required to perform any covenant or obligation in this Lease, or be liable in damages to Tenant, so long as the performance or non-performance of the covenant or obligation is delayed, caused or prevented by an act of God, force majeure or by Tenant. | |
14.4 | HEADINGS. The section headings appearing in this Lease are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or intent of any Section. | |
14.5 | NOTICE . All rent and other payments required to be made by Tenant shall be payable to Landlord at the address set forth in Section 1.9. All payments required to be made by Landlord to Tenant shall be payable at the address set forth in Section 1.9, or at any other address within the United States as Tenant may specify from time to time by written notice. Any notice or document required or permitted to be delivered by the terms of this Lease shall be deemed to be delivered (whether or not actually received) when deposited in the United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the parties at the respective addresses set forth in Section 1.9. | |
14.6 | HAZARDOUS SUBSTANCES . Tenant shall not bring or permit to remain on the Premises or Building any asbestos, petroleum or petroleum products, explosives, toxic materials, or substances defined as hazardous wastes, hazardous material, or hazardous substances under any federal, state or local law or regulation (Hazardous Materials), unless such materials are properly classed, described, packaged, marked, labeled and in condition for shipment as required or authorized by applicable provisions of Title 49, Code of Federal Regulations, Subtitle B, Chapter I, Subchapter C (Hazardous Materials Regulations). Landlord authorizes Tenant to bring or permit to remain on the Premises, as an integral part of Tenants business, hazardous materials which comply with the applicable requirements or authorizations of Title 49, Code of Federal Regulations. Tenants violation of the foregoing prohibition shall constitute a material breach and default hereunder and Tenant shall indemnify, hold harmless and defend Landlord from and against any claims, damages, penalties, liabilities, and costs (including reasonable attorney fees and court costs) caused by or arising out of (i) a violation of the foregoing prohibition or (ii) the presence of any Hazardous Materials on, under, or about the Premises or the Building during the term of the Lease in conformance with the requirements of applicable law, Tenant shall immediately give Landlord written notice of any suspected breach of this paragraph; upon learning of the presence of any release of any Hazardous Materials, and upon receiving any notices from governmental agencies pertaining to Hazardous Materials which may affect the Premises or the Building. The obligations of Tenant hereunder shall survive the expiration of earlier termination, for any reason, of this Lease. Tenant shall indemnify, hold harmless and defend Landlord from and against any claims, damages, penalties, liabilities, and costs (including reasonable attorney fees and court costs) caused by or arising out of the presence of any Hazardous Materials on, under, or about the Premises or the Building during the term of the Lease, except to the extent caused by Tenant. | |
14.7 | SEVERABILITY. If any provision of this Lease or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this |
12
Lease and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. | ||
14.8 | LANDLORDS LIABILITY. If Landlord shall be in default under this Lease and, if as a consequence of such default, Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied only out of the right, title and interest of Landlord in the Building as the same may then be encumbered and neither Landlord nor any person or entity comprising Landlord shall be liable for any deficiency. In no event shall Tenant have the right to levy execution against any property of Landlord nor any person or entity comprising Landlord other than its interest in the Building as herein expressly provided. | |
14.9 | BROKERAGE. Landlord and Tenant each represents and warrants to the other that there is no obligation to pay any brokerage fee, commission, finders fee or other similar charge in connection with this Lease, other than fees due to Steve Chirhart/Griffin Companies which are the responsibility of Landlord. Each party covenants that it will defend, indemnify and hold harmless the other party from and against any loss or liability by reason of brokerage or similar services alleged to have been rendered to, at the instance of, or agreed upon by said indemnifying party. | |
14.10 | BROKER AS OWNER/MANAGEMENT AGENT. Landlord hereby notifies Tenant that the person authorized to execute this Lease and manage the Premises is John N. Allen, who is a licensed Real Estate Broker in the State of Minnesota and Tenant hereby acknowledges and consents to this Landlord/Broker relationship. | |
14.11 | SUBMISSION OF LEASE. Submission of this Lease to Tenant for signature does not constitute a reservation of space or an option to lease. This Lease is not effective until execution by and delivery to both Landlord and Tenant. | |
14.12 | OPTION TO RENEW. By written notice given to Landlord at least twelve (12) months prior to the expiration of the term of this Lease, Tenant may elect to renew this Lease for one (1) additional term of five (5) years. The renewal shall be upon all the terms and conditions of this Lease, except the base rent shall be at the then prevailing market rate with annual increases for similar spaces in the market area and provided further that Tenant shall have no further renewal options. If the parties cannot agree on the amount of the prevailing market rate, the matter shall be submitted to binding arbitration in accordance with the rules of the American Arbitrators Association. The arbitrator shall be a Real Estate professional with at least (10) years experience in evaluating properties similar to this building. The arbitrators determined market rate and annual increases shall take effect as of the renewal date of the Lease. This Right of Renewal is not assignable to a sublessee or third party. | |
14.13 | RIGHT OF FIRST REFUSAL. Tenant shall have the Right of First Refusal on any contiguous space within the building for ten (10) days after written notice from Landlord of its availability, provided Tenant is not in default under the terms and conditions of this Lease and provided further that at least five (5) years remain on the Lease term or Tenant agrees to modify the Lease to provide for not less than five (5) years on the total Leased premises. Tenant shall exercise this Right of First Refusal by written notice to Landlord. In the event Tenant so notifies Landlord, then Tenant shall commence rental payments on the date first indicated in Landlords notice and Tenant shall accept such space in its current condition without obligation of Landlord to make Leasehold improvements. If Tenant does not so notify Landlord within ten (10) days thereafter, then Tenant shall be deemed to have waived its Right of First Refusal and Landlord shall proceed to Lease the space. The Right of First Refusal is not assignable. The base rental rate shall be at the then prevailing market rate and annual increases for similar space in the market area. If the parties cannot then agree on the amount of the prevailing market rate, then the matter shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association. |
13
14
15
16
17
1 | INTERIOR FINISHES | |
1.1 | Ceilings | |
Ceilings throughout the office shall be 2 x 4 Second Look II acoustical ceiling tile or equivalent installed in the building standard exposed grid system at a height of 90 above finished concrete floor. The ceiling grid will be installed continuous throughout the suite. The warehouse ceiling shall be exposed prime painted structural steel and metal deck. | ||
1.2 | Floors | |
The typical floor finish in office area shall be carpet. A 28-ounce direct glue down installation is the building standard. Toilet rooms hall receive a 4 foot high wainscoat USPCU071 4 1/4 x 4 1/4 tile or comparable on plumbing wall and wall adjacent to toilet only. Floor area shall be Lonestar 2 x 2 1050 Gray or comparable. The floor in the entry vestibule shall receive Floorgress 12 x 12 tile or comparable. The warehouse floor shall be existing sealed concrete floor. | ||
1.3 | Walls | |
Typically, interior partition walls throughout the suite will be constructed of 3-5/8 metal studs at 24 on center with one layer each side of 5/8 drywall and shall extend to the underside of the acoustical ceiling grid. Exterior walls in finished areas shall be furred out, insulated, and receive one layer 5/8 drywall. Partition walls in demising location and warehouse separation walls, as shown on the plan, shall be built to the underside of the structural deck above. All walls to deck will include insulation in the stud cavity if required by code. Toilet room walls shall be built to 9 foot A.F.F. with a sheetrock and stud ceiling cap and will include insulation in the stud cavity. All walls in the office will be taped and sanded smooth and shall receive two finish coats of Sherwin Williams flat latex paint. 4 vinyl cove base is included throughout the office. The warehouse walls shall remain unfinished. | ||
2. | DOORS, FRAMES, HARDWARE, INTERIOR WINDOWS AND COUNTER TOPS | |
2.1 | Doors | |
All swing doors shall be 30 x 70 solid core plain sliced red oak veneer doors. Doors shall be stained and sealed. | ||
2.2 | Finish Hardware | |
All interior door hardware shall be Schlage AL Saturn 605 Polished Brass series and exterior door shall be Schlage AL Saturn 626 Bell Chrome series or equal. Locksets are included at suite access doors only. | ||
2.3 | Frames | |
All wood swing doors shall be set in painted 18 gauge hollow metal frames. Exterior door frame to be 16 gauge hollow metal frame. | ||
2.4 | Main Entry Doors | |
The main entry door shall be a 30 x 70 building standard aluminum and glass door. | ||
2.5 | Toilet Room Signage | |
One restroom sign indicating handicap accessibility shall be included for each restroom as required by code. | ||
2.6 | Counter Tops, Window Sills and Cabinets. | |
All window sills and counter tops shall be light gray Formica laminate S612T NEV-A-MAR. | ||
3. | MECHANICAL | |
3.1 | HVAC | |
The HVAC in the office and the warehouse will be accomplished with gas heating/cooling roof top units. In areas with finished ceilings all equipment and duct runs, shall be overhead within the ceiling plenum. Diffusers will be building standard, ceiling mounted. Return air grilles are included as required. Positive Room Ventilation is included for the toilet rooms as required. The warehouse shall be heated only by means of gas fired unit heaters to maintain 65°F. |
18
19
1. | The Lease for the Expansion Space shall commence on May 1, 2007. Landlord will make its best efforts to complete the space by April 1, 2007 and that any occupancy prior to the May 1 st commencement date will be at no additional cost other than utilities which Tenant may use which shall be separately metered. | |
2. | The Lease term shall terminate May 31, 2012. | |
3. | For purposes of this Amendment, effective May 1, 2007, the Leased Premises shall contain approximately 34,513 total square feet. | |
4. | Base Rent for the Leased Premises shall be amended and paid according to the following schedule: |
Base | Expansion Base | Total Monthly | ||||||||||
Period
|
Rent/Month | Rent/Month | Base Rent | |||||||||
May.1, 2007Jul. 31, 2007
|
$ | 19,560.54 | $ | 0.00 | $ | 19,560.54 | ||||||
Aug.1, 2007Jan. 31, 2008
|
$ | 19,560.54 | $ | 7,169.03 | $ | 26,729.57 | ||||||
Feb. 1, 2008Jan. 31, 2009
|
$ | 19,951.75 | $ | 7,312.41 | $ | 27,264.16 | ||||||
Feb. 1, 2009Jan. 31, 2010
|
$ | 20,350.79 | $ | 7,458.66 | $ | 27,809.45 | ||||||
Feb. 1, 2010Jan. 31, 2011
|
$ | 20,757.80 | $ | 7,607.84 | $ | 28,365.65 | ||||||
Feb. 1, 2011May 31, 2012
|
$ | 21,172.96 | $ | 7,759.99 | $ | 28,932.95 |
5. |
Tenants Proportionate Share, as defined in the Lease,
shall be
73.48%
.
|
6. | PARKING. An additional thirty-two (32) non-exclusive parking stalls shall be provided for a total of one-hundred twenty-two (122) non-exclusive parking stalls. | |
7. | Landlord shall provide the following Tenant Improvements to the Expansion Space: |
| Replace carpet in front half of bay to match existing office. | ||
| Replace existing VCT with new VCT tile entirely in back half for lab area. | ||
| Replace ceiling tiles as needed throughout the entire area. | ||
| Ensure all lighting is in good working order, evenly and adequately spaced. | ||
| Demo existing cabinetry and sink in front half of office. | ||
| Add 3 new private offices/conference rooms in a location to be determined. | ||
| Replace cabinetry and sink in break area adjacent to restrooms. | ||
| Repaint all walls to match current office and lab areas. | ||
| Electrical service shall be ample to serve the office and lab consistent with Tenants current use in its existing Premises. | ||
| Open existing demising wall five (5) feet in an area to be determined to join lab area to existing premises lab area. | ||
| Restrooms cleaned and all plumbing certified in good working order. Repair and replace all damaged tile as necessary and repaint all walls. | ||
| Complete new demising wall and paint to match premises. | ||
| Service and certify that HVAC units serving the premises are in good working order and replace the compressor units if required within one year following the commencement date. | ||
| Tenant space plan shall be provided at Landlords expense. |
Other than the improvements outlined above, Tenant agrees to accept the Premises in its AS-IS condition. Any additional improvements shall be completed at the Tenants sole cost and expense and must receive the Landlords prior written approval. |
8. | OPTION TO RENEW. By written notice given to Landlord at least twelve (12) months prior to the expiration of the term of this Lease, Tenant may elect to renew this Lease for one (1) additional term of five (5) years. The renewal shall be upon all the terms and conditions of this Lease, except the base rent shall be at the then prevailing market rate with annual increases for similar spaces in the market area and provided further that Tenant shall have no further renewal options. If the parties cannot agree on the amount of the prevailing market rate, the matter shall be submitted to binding arbitration in accordance with the rules of the American Arbitrators Association. The arbitrator shall be a Real Estate professional with at least (10) years experience in evaluating properties similar to this building. The arbitrators determined market rate and annual increases shall take effect as of the renewal date of the Lease. This Right of Renewal is not assignable to a sublessee or third party. | |
9. | RIGHT OF FIRST REFUSAL. Tenant shall have the Right of First Refusal on any contiguous space within the building for ten (10) days after written notice from Landlord of its availability, provided Tenant is not in default under the terms and conditions of this Lease and provided further that at least five (5) years remain on the Lease term or Tenant agrees to modify the Lease to provide for not less than five (5) years on the total Leased premises. Tenant shall exercise this Right of First |
Refusal by written notice to Landlord. In the event Tenant so notifies Landlord, then Tenant shall commence rental payments on the date first indicated in Landlords notice and Tenant shall accept such space in its current condition without obligation of Landlord to make Leasehold improvements. If Tenant does not so notify Landlord within ten (10) days thereafter, then Tenant shall be deemed to have waived its Right of First Refusal and Landlord shall proceed to Lease the space. The Right of First Refusal is not assignable. The base rental rate shall be at the then prevailing market rate and annual increases for similar space in the market area. If the parties cannot then agree on the amount of the prevailing market rate, then the matter shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association. | ||
10. | BROKERAGE. Landlord shall pay TaTonka Real Estate Advisors a commission on the expansion premises in the amount of 5% of the base rent paid over the term. No commission shall be due on the initial premises extended term from 1/31/12 to 5/31/12. |
LANDLORD | TENANT | |||||||||
INDUSTRIAL EQUITIES GROUP LLC | CARDIOVASCULAR SYSTEMS, INC. | |||||||||
|
||||||||||
By:
|
By: | /s/ JAMES E. FLAHERTY | ||||||||
|
||||||||||
|
John N. Allen | |||||||||
Its:
|
Managing Agent | Its: | CFO | |||||||
|
||||||||||
Date:
|
Date: | 2/26/07 |
1. |
The Lease for the Expansion Space shall commence on
May 1, 2007
.
Landlord will make its best efforts to complete the space by
April 1, 2007 and that any occupancy prior to the May 1 st commencement date will be at no additional cost other than utilities which Tenant may use which shall be separately metered. |
|
2. | The Lease term shall terminate May 31, 2012 . | |
3. | For purposes of this Amendment, effective May 1, 2007 , the Leased Premises shall contain approximately 37,856 total square feet. | |
4. | Base Rent for the Leased Premises shall be amended and paid according to the following schedule: |
Expansion Base | Total Monthly | |||||
Period | Base Rent/Month | Rent/Month | Base Rent | |||
May. 1, 2007 Jul. 31, 2007
|
$19,560.54 | $ 0.00 | $19,560.54 | |||
Aug. 1, 2007 Jan. 31, 2008
|
$26,729.57 | $2,668.83 | $29,398.40 | |||
Feb. 1, 2008 Jan. 31, 2009
|
$27,264.16 | $2,722.21 | $29,986.37 | |||
Feb. 1, 2009 Jan. 31, 2010
|
$27,809.45 | $2,776.65 | $30,586.10 | |||
Feb. 1, 2010 Jan. 31, 2011
|
$28,365.65 | $2,832.19 | $31,197.84 | |||
Feb. 1, 2011 May 31, 2012
|
$28,932.95 | $2,888.83 | $31,821.78 |
5. | Tenants Proportionate Share, as defined in the Lease, shall be 80.60% . | |
6. | PARKING . An additional twelve (10) non-exclusive parking stalls shall be provided for a total of one-hundred thirty-four (132) non-exclusive parking stalls. |
7. | Landlord shall provide the following Tenant Improvements to the Expansion Space: |
| Replace carpet in front half of bay (conference room and existing carpeted areas) to match existing office. | ||
| Replace existing VCT with new VCT tile entirely in back half for lab area. | ||
| Replace ceiling tiles as needed throughout the entire area. | ||
| Ensure all lighting is in good working order, evenly and adequately spaced. | ||
| Repaint all walls to match current office and lab areas. | ||
| Electrical service shall be ample to serve the office and lab consistent with Tenants current use in its existing Premises. | ||
| Restrooms cleaned and all plumbing certified in good working order. Repair and repaint all drywall walls. | ||
| Complete new demising wall and paint to match premises. | ||
| Service and certify that HVAC units serving the premises are in good working order and replace the compressor units if required within one year following the commencement date. | ||
| Tenant space plan shall be provided at Landlords expense. |
Other than the improvements outlined above, Tenant agrees to accept the Premises in its AS-IS condition. Any additional improvements shall be completed at the Tenants sole cost and expense and must receive the Landlords prior written approval. |
8. | OPTION TO RENEW . By written notice given to Landlord at least twelve (12) months prior to the expiration of the term of this Lease, Tenant may elect to renew this Lease for one (1) additional term of five (5) years. The renewal shall be upon all the terms and conditions of this Lease, except the base tent shall be at the then prevailing market rate with annual increases for similar spaces in the market area and provided further that Tenant shall have no further renewal options. If the parties cannot agree on the amount of the prevailing market rate, the matter shall be submitted to binding arbitration in accordance with the rules of the American Arbitrators Association. The arbitrator shall be a Real Estate professional with at least (10) years experience in evaluating properties similar to this building. The arbitrators determined market rate and annual increases shall take effect as of the renewal date of the Lease. This Right of Renewal is not assignable to a sublessee or third party. | |
9. | RIGHT OF FIRST REFUSAL . Tenant shall have the Right of First Refusal on any contiguous space within the building for ten (10) days after written notice from Landlord of its availability, provided Tenant is not in default under the terms and conditions of this Lease and provided further that at least five (5) years remain on the Lease term or Tenant agrees to modify the Lease to provide for not less than five (5) years on the total Leased premises. Tenant shall exercise this Right of First Refusal by written notice to Landlord. In the event Tenant so notifies Landlord, then Tenant shall commence rental payments on the date first indicated in Landlords notice and Tenant shall accept such space in its current condition without obligation of Landlord to make Leasehold improvements. If Tenant does not so notify Landlord within ten (10) days thereafter, then Tenant shall be deemed to have waived its Right of First Refusal and Landlord shall proceed to Lease the space. The Right of First Refusal is not assignable. The base rental rate shall be at the then prevailing market rate and annual increases for similar space in the market area. If the parties cannot then agree on the amount of the prevailing market rate, then the matter shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association. |
10. | BROKERAGE. Landlord shall pay TaTonka Real Estate Advisors a commission on the expansion premises in the amount of 5% of the base rent paid over the term. |
LANDLORD | TENANT | |||||||||
INDUSTRIAL EQUITIES GROUP LLC | CARDIOVASCULAR SYSTEMS, INC. | |||||||||
|
||||||||||
By:
|
|
By: |
/s/ JAMES E. FLAHERTY
|
|||||||
|
||||||||||
Its:
|
Managing Agent | Its: | CFO | |||||||
Date:
|
Date: | 3/16/07 | ||||||||
|
||||||||||
|
1. | The Lease for the Expansion Space shall commence on January 1, 2008 . | |
2. | The Lease term shall terminate November 30, 2012 . | |
3. | For purposes of this Amendment, effective January 1, 2008 , the Leased Premises shall contain approximately 47,033 total square feet. | |
4. | Base Rent for the Leased Premises shall be amended and paid according to the following schedule: |
Base | Expansion Base | Total Monthly | ||||||||||
Period | Rent/Month | Rent/Month | Base Rent | |||||||||
Jan. 1, 2008 Jan. 31, 2008
|
$ | 29,398.40 | $ | 0.00 | $ | 29,398.40 | ||||||
Feb. 1, 2008 Feb. 29, 2008
|
$ | 29,986.37 | $ | 0.00 | $ | 29,986.37 | ||||||
Mar. 1, 2008 Jan. 31, 2009
|
$ | 29,986.37 | $ | 7,326.31 | $ | 37,222.68 | ||||||
Feb. 1, 2009 Feb. 28, 2009
|
$ | 30,586.10 | $ | 7,326.31 | $ | 37,912.41 | ||||||
Mar. 1, 2009 Jan. 31, 2010
|
$ | 30,586.10 | $ | 7,472.84 | $ | 38,058.94 | ||||||
Feb. 1, 2010 Feb. 28, 2010
|
$ | 31,197.84 | $ | 7,472.84 | $ | 38,670.68 | ||||||
Mar. 1, 2010 Jan. 31, 2011
|
$ | 31,197.84 | $ | 7,622.30 | $ | 38,820.14 | ||||||
Feb. 1, 2011 Feb. 28, 2011
|
$ | 31,821.78 | $ | 7,622.30 | $ | 39,444.08 | ||||||
Mar. 1, 2011 Feb. 29, 2012
|
$ | 31,821.78 | $ | 7,774.75 | $ | 39,596.53 | ||||||
Mar.
1, 2012 May 31, 2012
|
$ | 31,821.78 | $ | 7,930.25 | $ | 39,752.03 | ||||||
Jun. 1, 2012 Nov. 30, 2012
|
$ | 32,458.22 | $ | 7,930.25 | $ | 40,388.47 |
5. | Tenants Proportionate Share, as defined in the Lease, shall be 100.00% . |
6. | LANDLORD IMPROVEMENTS . Landlord agrees to the following expansion space improvements: |
| Re-paint all drywall walls. Tenant to choose colors. | ||
| Add or demo one (1) office. | ||
| Re-carpet existing carpeted areas. | ||
| Reinstall all missing doors. | ||
| Make any necessary drywall repairs. | ||
| Replace any missing or damaged ceiling tiles. | ||
| Create up to two openings into the existing space. | ||
| Service and certify HVAC system servicing the Premises is in good working order as of the commencement date. | ||
| Ensure all lighting is in working order and candles are consistent with current space. |
Other than the above listed improvements, Tenant agrees to accept the Premises in its AS-IS condition. Any additional improvements shall be completed at the Tenants sole cost and expense and must receive the Landlords prior written approval. | ||
7. | OPTION TO RENEW . By written notice given to Landlord at least twelve (12) months prior to the expiration of the term of this Lease, Tenant may elect to renew this Lease for one (1) additional term of five (5) years. The renewal shall be upon all the terms and conditions of this Lease, except the base rent shall be at the then prevailing market rate with annual increases for similar spaces in the market area and provided further that Tenant shall have no further renewal options. If the parties cannot agree on the amount of the prevailing market rate, the matter shall be submitted to binding arbitration in accordance with the rules of the American Arbitrators Association. The arbitrator shall be a Real Estate professional with at least (10) years experience in evaluating properties similar to this building. The arbitrators determined market rate and annual increases shall take effect as of the renewal date of the Lease. This Right of Renewal is not assignable to a sublessee or third party. | |
8. | BROKERAGE . Landlord shall pay TaTonka Real Estate Advisors a commission on the expansion premises in the amount of 5% of the base rent paid over the term. | |
9. | EARLY ACCESS . Landlord shall allow Tenant to access the expansion space effective November 1, 2007, as long as all utilities servicing the expansion space are paid by Tenant. |
LANDLORD | TENANT | |||||||||
INDUSTRIAL EQUITIES GROUP LLC | CARDIOVASCULAR SYSTEMS, INC. | |||||||||
|
||||||||||
By:
|
|
By: |
/s/ JAMES E. FLAHERTY
|
|||||||
Its:
|
Managing Agent
|
Its: |
CFO
|
|||||||
|
||||||||||
Date:
|
Date: | 9/26/07 | ||||||||
|
|
|