EXHIBIT 4.5
VASCULAR SOLUTIONS, INC.
AMENDED AND RESTATED
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RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
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This Amended and Restated Right of First Refusal and Co-Sale Agreement (the
"Agreement") is made and entered into as of December 9, 1998, by and among
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Howard Root, Gary Gershony and Mike Nagel (the "Founders"), Vascular Solutions,
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Inc., a Minnesota corporation (the "Company") and the holders of shares of
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Series A Preferred Stock (the "Series A Preferred Shareholders") and Series B
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Preferred Stock (the "Series B Preferred Shareholders") listed on Exhibit A
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hereto (collectively, the "Investors" and individually, an "Investor").
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RECITALS
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On December 19, 1997 the Company and the Series A Preferred Shareholders
entered into a Series A Preferred Stock Purchase Agreement (the "Series A
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Purchase Agreement") pursuant to which the Company sold to the Series A
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Preferred Shareholders and the Series A Preferred Shareholders purchased from
the Company shares of the Company's Series A Preferred Stock. On the date
hereof, the Company and the Series B Preferred Shareholders have entered into a
Series B Preferred Stock Purchase Agreement (the "Series B Purchase Agreement")
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pursuant to which the Company desires to sell to the Series B Preferred
Shareholders and the Series B Preferred Shareholders desire to purchase from the
Company shares of the Company's Series B Preferred Stock. A condition to the
Investors' obligations under each of the Series A Purchase Agreement and the
Series B Purchase Agreement is that the Company, the Founders and the Investors
enter into a right of first refusal and co-sale agreement in order to provide
the Investors the opportunity to purchase and/or participate, upon the terms and
conditions set forth in such agreement, in subsequent sales by the Founders of
shares of the Company's Common Stock. On December 19, 1997 the Company and the
Series A Preferred Shareholders entered into such a right of first refusal and
co-sale agreement (the "Original Right of First Refusal Agreement"), which the
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parties thereto now desire to amend and restate as provided herein. The
Company, the Series A Preferred Shareholders, the Series B Preferred
Shareholders and the Founders each desire to agree to the terms and conditions
set forth herein.
AGREEMENT
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The parties hereby agree as follows:
1. Sales by Founders
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(a) Right of First Refusal.
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(i) Should any Founder propose to accept one or more bona fide
offers (collectively, a "Purchase Offer") from any persons to purchase shares of
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the Company's Common Stock (the "Shares") from such Founder (other than as set
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forth in subsection 1(e) hereof), such Founder shall promptly deliver a notice
(the "Notice") to the Company and each Investor stating the
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terms and conditions of such Purchase Offer including, without limitation, the
number of shares of the Company's capital stock to be sold or transferred, the
nature of such sale or transfer, the consideration to be paid and the name and
address of each prospective purchaser or transferee. For a period of thirty (30)
days following receipt by the Company of the Notice, the Company shall have a
right to purchase such Shares upon the same terms as (or terms as similar as
reasonably possible to) the terms contained in the Notice (the "Right of First
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Refusal"). If the Company desires to exercise the Right of First Refusal, it
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shall so notify the Founder in writing within such thirty (30) day period.
(ii) In the event that the Company declines to exercise in full
the Right of First Refusal between such Founder and the Company, the Company
will provide each Investor with notice of such determination at least fifteen
(15) days prior to the end of the period in which the Right of First Refusal
expires under Section 1(a)(i). Each Investor shall then have the right,
exercisable by notice prior to the end of such period, to exercise such Right of
First Refusal as the Company's assignee on a pro rata basis (based upon the
number of Conversion Shares (as defined below) held by such Investor relative to
the aggregate number of Conversion Shares held by all Investors); provided that
if fewer than all Investors elect to participate, the Shares that would
otherwise be allocated to non-participating Investors shall be allocated to each
participating Investor in a manner such that each participating Investor is
entitled to purchase at least such Investor's pro rata portion of such
unallocated Shares (based upon the number of Conversion Shares held by all
participating Investors) or such different number of shares as the participating
Investors shall mutually agree. Upon expiration or exercise of the Right of
First Refusal, the Company will provide notice to all Investors as to whether or
not the Right of First Refusal has been exercised by the Company or the
Investors. In the event the Shares are not disposed of on the terms proposed in
the Notice within thirty (30) days following the lapse of the Right of First
Refusal, or if at any time the Founder proposes to change the price or other
terms to make them more favorable to the buyer, then the Shares shall once again
be subject to the Right of First Refusal.
(b) Co-Sale Right. To the extent that the Right of First Refusal is
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not exercised by the Company or the Investors, each Investor shall have the
right (the "Co-Sale Right"), exercisable upon written notice to the Company
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within fifteen (15) business days after the expiration of the Right of First
Refusal, to participate in such Founder's sale of Shares pursuant to the
specified terms and conditions of such Purchase Offer. To the extent an
Investor exercises such Co-Sale Right in accordance with the terms and
conditions set forth below, the number of Shares which such Founder may sell
pursuant to such Purchase Offer shall be correspondingly reduced. The Co-Sale
Right of each Investor shall be subject to the following terms and conditions:
(i) Calculation of Shares. Each Investor may sell all or any
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part of that number of shares of Common Stock of the Company issued or issuable
upon conversion of Preferred Stock or Common Stock received in connection with
any stock dividend, stock split or other reclassification thereof (the
"Conversion Shares") equal to the product obtained by multiplying (x) the
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aggregate number of shares of Common Stock covered by the Purchase Offer by (y)
a fraction, the numerator of which is the number of Conversion Shares at the
time owned by such Investor and the denominator of which is the combined number
of shares of Common Stock of the Company at the time owned by all Investors and
all Founders participating in such sale, including
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shares transferred by such Founder to Permitted Transferees (as hereinafter
defined) in accordance herewith. The provisions of this Agreement do not confer
any Co-Sale rights with respect to any shares of Common Stock or other
securities held by an Investor that are not Conversion Shares.
(ii) Delivery of Certificates. Each Investor may effect its
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participation in the sale by delivering to the selling Founder for transfer to
the purchase offeror one or more certificates, properly endorsed for transfer,
which represent the number of shares of Preferred Stock, or Common Stock issued
upon conversion thereof, which such Investor elects to sell.
(c) Transfer. The stock certificate or certificates which the
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Investor delivers to the selling Founder pursuant to Section 1(b) shall be
delivered by such Founder to the purchase offeror in consummation of the sale
pursuant to the terms and conditions specified in the Notice, and such Founder
shall promptly thereafter remit to such Investor that portion of the sale
proceeds to which such Investor is entitled by reason of its participation in
such sale. To the extent that any prospective purchaser or purchasers prohibits
such assignment or otherwise refuses to purchase shares of capital stock of the
Company from an Investor exercising its Co-Sale Right hereunder, the selling
Founder or Founders shall not sell to such prospective purchaser or purchasers
any shares of Company stock unless and until, simultaneously with such sale, the
selling Founder or Founders shall purchase such shares from such Investor for
the same consideration and on the same terms and conditions as the proposed
transfer described in the Notice (which terms and conditions shall be no less
favorable than those governing the sale to the purchaser by the Founder or
Founders).
(d) No Adverse Effect. The exercise or non-exercise of the rights of
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the Investors hereunder to participate in one or more sales of Shares made by a
Founder shall not adversely affect their rights to participate in subsequent
sales of Common Stock by a Founder.
(e) Permitted Transactions. The provisions of Section 1 of this
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Agreement shall not pertain or apply to:
(i) Any repurchase of Common Stock by the Company;
(ii) Any bona fide gift;
(iii) Any transfer to a Founder's ancestors, descendants or
spouse or to a trust for their benefit;
(iv) any sale or transfer by a Founder of up to ten percent
(10%) of the total number of shares of Common Stock held by such Founder on the
date of this Agreement; or
(v) In the event that a Founder shall die or become disabled
(within the meaning of Code Section 22(e)(3)), any sale or transfer by a Founder
or by his personal representative, administrator or guardian, as applicable, or
by any person or persons to whom any of the Shares are transferred by will or
the applicable laws of descent and distribution.
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provided, that (x) the Founder(s) shall inform the Investors of such transfer or
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gift prior to effecting it, and (y) the transferee or donee (collectively, the
"Permitted Transferees") shall furnish the Investors with a written agreement to
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be bound by and comply with all provisions of this Agreement applicable to the
Founders.
(f) Notwithstanding the foregoing and any other provision hereof and
notwithstanding the failure of any holder of Series B Preferred Stock to
exercise any of its rights under this Section 1, except as set forth in
Subsection 1(e) hereof, a Founder must obtain the written consent of the holders
of a majority of the Series B Preferred Stock prior to accepting any Purchase
Offer.
2. Prohibited Transfers. Any attempt by a Founder to transfer shares of
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the Company in violation of Section 1 hereof shall be void and the Company
agrees it will not effect such a transfer nor will it treat any alleged
transferee as the holder of such shares without the written consent of the
holders of a majority of the Series A Preferred Stock and a majority of the
Series B Preferred Stock.
3. Legended Certificates. Each certificate representing shares of the
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Common Stock of the Company now or hereafter owned by the Founders or issued to
any Permitted Transferee pursuant to Section 1(e) shall be endorsed with the
following legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AND
CO-SALE AGREEMENT BY AND BETWEEN THE SHAREHOLDER, THE
CORPORATION AND CERTAIN HOLDERS OF COMMON AND PREFERRED
STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."
The foregoing legend shall be removed upon termination of this Agreement in
accordance with the provisions of Section 4(a).
4. Miscellaneous Provisions.
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(a) Termination. This Agreement shall terminate upon the earliest to
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occur of any one of the following events (and shall not apply to any transfer by
a Founder in connection with any such event):
(i) The liquidation, dissolution or indefinite cessation of the
business operations of the Company;
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(ii) The execution by the Company of a general assignment for
the benefit of creditors or the appointment of a receiver or trustee to take
possession of the property and assets of the Company;
(iii) The closing of the Company's initial public offering of
securities; provided that all shares of the Company's Preferred Stock are
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converted into shares of Common Stock prior to or in connection with such
offering; or
(iv) The closing of any acquisition, merger, reorganization or
other transaction which results in the shareholders of the Company immediately
prior to such transaction owning less than 50% of the Company's voting stock
immediately after such transaction.
(b) Notices. Any notice required or permitted by this Agreement shall
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be in writing and shall be deemed sufficient on the date of delivery, when
delivered personally or by overnight courier or sent by telegram or fax, or
forty-eight (48) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, and addressed to the party to be notified
at such party's address as set forth below or on Exhibit A hereto, or as
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subsequently modified by written notice.
(c) Successors and Assigns. This Agreement and the rights and
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obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal representatives.
The rights of the Investors hereunder shall be assignable only (i) by each of
such Investors to any other Investor or (ii) an assignee or transferee who
acquires not less than 100,000 Conversion Shares (as adjusted for stock splits,
stock dividends and the like, and assuming conversion of all Preferred Stock
held by such Investor); provided that such limitation shall not apply to
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transfers by an Investor to partners, members or shareholders of such Investor
or an affiliate of such Investor (i.e. an entity controlled by, under common
control with or controlling such Investor), including spouses and ancestors,
lineal descendants and siblings of such persons or their spouses who acquire the
Preferred Stock or Common Stock issued upon conversion thereof, if all such
transferees or assignees irrevocably agree in writing to appoint a single
representative as their attorney in fact for the purpose of receiving any
notices and exercising their rights under this Agreement.
(d) Severability. If one or more provisions of this Agreement are
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held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
(e) Modifications and Amendments. Any term hereof may be amended or
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waived with the written consent of the Company and of holders of a majority of
the shares of Common Stock held by the Founders and the holders of a majority of
each of the Series A Preferred Stock and the Series B Preferred Stock (or their
respective successors and assigns). Any amendment or waiver effected in
accordance with this Section 4(e) shall be binding upon the Company, the
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holders of Series A Preferred Stock and Series B Preferred Stock and any holder
of Founders' Shares, and each of their respective successors and assigns.
(f) Attorney's Fees. If any action at law or in equity (including
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arbitration) is necessary to enforce or interpret the terms of any of the
Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
(g) Governing Law. This Agreement and all acts and transactions
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pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Minnesota, without giving effect to principles of conflicts of law.
(h) Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(i) No Employment Rights. Nothing in this Agreement shall affect in
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any manner whatsoever the right or power of the Company, or a parent or
subsidiary of the Company, to terminate the Founder's employment, for any
reason, with or without cause.
(j) Complete Agreement. This Agreement contains the complete
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agreement between the parties and supersedes any prior understandings,
agreements or representations by or between the parties, written or oral, which
may have related to the subject matter hereof in any way, including, without
limitation, the Original Right of First Refusal Agreement.
[Signature Page Follows]
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The parties have executed this Amended and Restated Right of First Refusal
and Co-Sale Agreement as of the date first written above.
COMPANY:
VASCULAR SOLUTIONS, INC.
By: /s/ Howard Root
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Howard Root
Chief Executive Officer and
President
Address: 2495 Xenium Lane North
Minneapolis, MN 55441
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COMMON HOLDERS:
HOWARD ROOT
/s/ Howard Root
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Address: 25 Farihope Avenue
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Tonka Bay, MN 55331
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GARY GERSHONY
/s/ Gary Gershony
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Address: 3131 Roundhill Road
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Alamo, CA 94507
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MIKE NAGEL
/s/ Mike Nagel
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Address: 9495 Woodbridge Drive
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Eden Prairie, MN 55397
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SERIES A PREFERRED SHAREHOLDERS:
OLYMPIC VENTURE PARTNERS III, L.P.
By: OVMC III, L.P.
Its: General Partner
By: /s/ Gerard Langeler
-----------------------------------
Gerry Langeler
General Partner
Address: 340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
OVP III ENTREPRENEURS FUND, L.P.
By: OVMC III, L.P.
Its: General Partner
By: /s/ Gerard Langeler
-----------------------------------
Gerry Langeler
General Partner
Adddress: 340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
OLYMPIC VENTURE PARTNERS IV, L.P.
By: OVMC IV, L.L.C.,
Its: General Partner
By: /s/ Gerard Langeler
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Gerry Langeler
Managing Member
Address: 340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
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OVP IV ENTREPRENEURS FUND
By: OVMC IV, L.L.C.
Its: General Partner
By: /s/ Gerard Langeler
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Gerry Langeler
Managing Member
Address: 340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
By: TGI Fund II, L.C.
Its: TREDEGAR INVESTMENTS, INC., Manager
By /s/ Steven M. Johnson
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Name: Steven M. Johnson
President
Address: 701 5/th/ Ave., 65/th/ Floor
Seattle, WA 98104
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SERIES B PREFERRED SHAREHOLDERS:
STEPHENS VASCULAR PREFERRED, LLC
By: /s/ Jackson Farrow, Jr.
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Vice President, Stephens Group, Inc. Manager
Address: 111 Center Street, Suite 2500
Little Rock, AR 72201
OLYMPIC VENTURE PARTNERS IV, L.P.
By OVMC IV LLC
Its General Partner
By: /s/ Gerard Langeler
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Gerry Langeler
Managing Member
Address: 340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
OVP IV ENTREPRENEURS FUND
By OVMC IV LLC
Its General Partner
By: /s/ Gerard Langeler
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Gerry Langeler
Managing Member
Address: 340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
OLYMPIC VENTURE PARTNERS III, L.P.
By OVMC IV LLC
Its General Partner
By: /s/ Gerard Langeler
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Gerry Langeler
General Partner
Address: 340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
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By: TGI Fund II, L.C.
Its: TREDEGAR INVESTMENTS, INC., Manager
By /s/ Steven M. Johnson
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Name: Steven M. Johnson
President
KIRLAN VENTURE PARTNERS II, L.P.
By /s/ Daniel C. Regis, President
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Of Kirlan Venture Capital, Inc.
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Name: Daniel C. Regis
General Partner
Address: 221 - 1/st/ Avenue West
Suite 108
Seattle, WA 98119
/s/ Eldon C. Miller
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Eldon C. Miller
Address: 5820 Long Brake Trail
Edina, MN 55439
/s/ David B. Johnson
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David B. Johnson
Address: 5500 Wayzata Blvd., #800
Minneapolis, MN 55416
/s/ Paul K, Kuehn
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Paul K. Kuehn
Address: Miller, Johnson & Kuehn, Inc.
5500 Wayzata Boulevard, Suite 800
Minneapolis, MN 55416
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/s/ Stanley D. Rahm
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Stanley D. Rahm
Address: 5500 Wayzata Blvd., #800
Minneapolis, MN 55416
/s/ Jeffrey D. Rahm
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Jeffrey D. Rahm
Address: Miller, Johnson & Kuehn
5500 Wayzata Blvd., Suite 800
Minneapolis, MN 55416
/s/ Gunnar M. Pah
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Gunnar M. Pah
Address: AM Boggen 3
8552 Otto Brunn
GERMANY
/s/ Arne J. Tofte, M.D.
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Arne J. Tofte, M.D.
Address: Bogstadveien 6
0355 Oslo
NORWAY
/s/ Tor Ole Kjellevand
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Tor Ole Kjellevand
Address: Sagveien 110
1414 Trollasen
NORWAY
/s/ John Parkey
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John Parkey
Address: 2425 60/th/ Ave. S.E.
Mercer, Island, WA 92040
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/s/ Dennis LaValle
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Dennis LaValle
Address: 1201 Yale Place #1409
Minneapolis, MN 55403
/s/ Andrew O'Connell
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Andrew O'Connell
Address: 2710 Ashbourne Rd.
Wayzata, MN 55391
/s/ Marlin Torguson
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Marlin Torguson
Address: 1073 Hillsboro Mile
4th South
Hillsboro Beach, FL 33062
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COMMON HOLDERS:
HOWARD ROOT
/s/ Howard Root
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Address: 25 Farihope Avenue
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Tonka Bay, MN 55331
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GARY GERSHONY
/s/ Gary Gershony
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Address: 3131 Roundhill Road
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Alamo, CA 94507
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MIKE NAGEL
/s/ Mike Nagel
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Address: 9495 Woodbridge Drive
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Eden Prairie, MN 55397
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Exhibit A
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SERIES A INVESTORS
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Name/Address/Fax No. No. of Shares
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Olympic Venture Partners III, L.P. 476,000
340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
OVP III Entrepreneurs Fund, L.P. 25,053
340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
Olympic Venture Partners IV, L.P. 664,000
340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
OVP IV Entrepreneurs Fund, L.P. 34,947
340 Oswego Pointe Drive, Suite 200
Lake Oswego, OR 97034-3230
Tredegar Investments, Inc. 800,000
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Market Place One
2003 Western Avenue, Suite 360
Seattle, WA 98121-2140
TOTAL 2,000,000
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SERIES B INVESTORS
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Name/Address/Fax No. No. of Shares
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Stephens Group 1,221,466
[Address]
Olympic Venture Partners 100,000
[Address]
Tredegar Investments 100,000
[Address]
Kirlan Investments 222,000
[Address]
Eldon C. Miller 10,000
[Address]
David B. Johnson 25,000
[Address]
Paul K. Kuehn 25,000
[Address]
Stanley D. Rahm 7,500
[Address]
Jeffrey D. Rahm 2,500
[Address]
Gunnar M. Pah 15,500
[Address]
Arne J. Toffe, M.D. 6,611
[Address]
Tor Ole Kjellevand 2,200
[Address]
John Parkey 10,000
[Address]
Dennis LaValle 17,700
[Address]
Andrew O'Connell 2,300
[Address]
Marlin Torguson 10,000
[Address]