EXHIBIT 4.12
NEITHER THIS SECURITY NOR THE SHARES OF STOCK ISSUABLE UPON CONVERSION HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (AS AMENDED, THE "ACT") OR
UNDER THE SECURITIES LAWS OF ANY STATE. NEITHER THIS SECURITY NOR THE SHARES OF
STOCK ISSUED UPON CONVERSION HEREOF MAY BE TRANSFERRED, SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, (B) AN EXEMPTION OR QUALIFICATION UNDER APPLICABLE
SECURITIES LAWS OR (C) DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
ANY ATTEMPT TO TRANSFER, SELL, PLEDGE OR HYPOTHECATE THIS SECURITY OR SUCH
SHARES IN VIOLATION OF THESE RESTRICTIONS SHALL BE VOID.
PURSUANT TO THE NOTE AGREEMENT PURSUANT TO WHICH THIS SECURITY WAS ISSUED (THE
"AGREEMENT"), INDEBTEDNESS UNDER THIS SECURITY IS SUBORDINATED TO THE PRIOR
PAYMENT IN FULL OF ALL SENIOR OBLIGATIONS (AS DEFINED IN THE AGREEMENT) OF THE
COMPANY ON THE TERMS SET FORTH IN THE AGREEMENT, A COPY OF WHICH IS AVAILABLE
FROM THE COMPANY UPON REQUEST OF THE HOLDER HEREOF.
STEREOTAXIS, INC.
8% CONVERTIBLE NOTE
Due August 1, 2006
$2,000,000 August 1,2003
St. Louis, Missouri
1. General. Stereotaxis, Inc., a Delaware corporation (the "Company"),
for value received, hereby promises to pay to the order of Siemens
Aktiengesellschaft (the "Holder") the principal sum of Two Million Dollars
($2,000,000), on the date that is three years from the date hereof (the
"Maturity Date"), in such coin or currency of the United States of America as at
the time of payment shall be legal tender therein for the payment of public and
private debts, and to pay interest on the unpaid balance of the principal hereof
from the date hereof, at the rate of eight percent (8%) per annum, in like coin
or currency, on the Maturity Date (subject to Section 5 below); all payments of
principal and interest on this Note to be made at the offices of the attorneys
of the Company, Xxxxx Xxxx LLP, One Metropolitan Square, St. Louis, Missouri
63102. In the event that the principal amount of this Note is not paid in full
when such amount becomes due and payable, interest at the rate of ten percent
(10%) (the "Default Rate") shall continue to accrue on the balance of any unpaid
principal until such balance is paid.
This Note is issued in connection with that certain Open Architecture
Letter Agreement between the Company and the Holder, dated as of May 28, 2003,
as the same may from time to time be amended, modified or supplemented (the
"Agreement"). The holder of this Note is subject to certain restrictions set
forth in the Agreement and shall be entitled to certain rights and privileges
set forth in the Agreement
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2. Optional Prepayment. The Company may at any time, prepay the unpaid
principal amount of this Note, or any part thereof, without penalty or premium,
but with interest accrued to the date fixed for prepayment. Notice of prepayment
shall be given by the Company by mail and shall be mailed to the holder of this
Note not less than 30 days prior to the date fixed for prepayment. Upon giving
of notice of prepayment as aforesaid, this Note (or the portion thereof to be
prepaid, as the case may be) shall on the prepayment date specified in such
notice become due and payable; and from and after the prepayment date so
specified (unless the Company shall default in making such prepayment) interest
on this Note (or the portion thereof to be prepaid, as the case may be) shall
cease to accrue and, on presentation and surrender hereof to the Company for
cancellation, this Note (or the portion thereof to be prepaid as the case may
be) shall be paid by the Company at the prepayment price aforesaid.
3. Events of Default. If any of the events specified in this Section 3
shall occur (herein individually referred to as an "Event of Default"), the
Holder of the Note may, so long as such condition exists, declare the entire
principal and unpaid accrued interest hereon immediately due and payable, by
notice in writing to the Company:
(i) Default in the payment of the principal and unpaid accrued
interest of this Note when due and payable if such default is not cured
by the Company within ten (10) days after the Holder has given the
Company written notice of such default; or
(ii) The institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to
institution of bankruptcy or insolvency proceedings against it or the
filing by it of a petition or answer or consent seeking reorganization
or release under the federal Bankruptcy Act, or any other applicable
federal or state law, or the consent by it to the filing of any such
petition or the appointment of a receiver, liquidator, assignee,
trustee or other similar official of the Company, or of any substantial
part of its property, or the making by it of an assignment for the
benefit of creditors, or the taking of corporate action by the Company
in furtherance of any such action; or
(iii) If, within sixty (60) days after the commencement of an
action against the Company (and service of process in connection therewith
on the Company) seeking any bankruptcy, insolvency, reorganization,
liquidation, dissolution or similar relief under any present or future
statute, law or regulation, such action shall not have been resolved in
favor of the Company or all orders or proceedings thereunder affecting the
operations or the business of the Company stayed, or if the stay of any
such order or proceeding shall thereafter be set aside, or if, within sixty
(60) days after the appointment without the consent or acquiescence of the
Company of any trustee, receiver or liquidator of the Company or of all or
any substantial part of the properties of the Company, such appointment
shall not have been vacated.
At any time that the unpaid principal balance of this Note,
together with all accrued and unpaid interest owing thereon, shall have
become due and payable in full pursuant to this Section 3, the aggregate of
all such sums shall thereafter bear interest, both before and after
judgment, at the Default Rate until such sums have been paid. In such
event, all payments made thereafter shall be applied first to unpaid
interest hereon, then to the principal of this Note.
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4. Subordination. The indebtedness evidenced by this Note is hereby
expressly subordinated, to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of all the Company's Senior
Indebtedness, as hereinafter defined.
4.1 Senior Indebtedness. As used in this Note, the term "Senior
Indebtedness" shall mean the principal of and unpaid accrued interest on: (i)
all indebtedness of the Company to banks, commercial finance lenders, insurance
companies or other financial institutions regularly engaged in the business of
lending money, which is for money borrowed by the Company (whether or not
secured), and (ii) any such indebtedness or any debentures, notes or other
evidence of indebtedness issued in exchange for or to refinance such Senior
Indebtedness, or any indebtedness arising from the satisfaction of such Senior
Indebtedness by a guarantor.
4.2 Default on Senior Indebtedness. If there should occur any
receivership, insolvency, assignment for the benefit of creditors, bankruptcy,
reorganization or arrangements with creditors (whether or not pursuant to
bankruptcy or other insolvency laws), sale of all or substantially all of the
assets, dissolution, liquidation or any other marshalling of the assets and
liabilities of the Company, then (i) no amount shall be paid by the Company in
respect of the principal of or interest on this Note at the time outstanding,
unless and until the principal of and interest on the Senior Indebtedness then
outstanding shall be paid in full, and (ii) no claim or proof of claim shall be
filed with the Company by or on behalf of the Holder of this Note that shall
assert any right to receive any payments in respect of the principal of and
interest on this Note, except subject to the payment in full of the principal of
and interest on all of the Senior Indebtedness then outstanding. If there occurs
an event of default that has been declared in writing with respect to any Senior
Indebtedness, or in the instrument under which any Senior Indebtedness is
outstanding, permitting the holder of such Senior Indebtedness to accelerate the
maturity thereof, then, unless and until such event of default shall have been
cured or waived or shall have ceased to exist, or all Senior Indebtedness shall
have been paid in full, no payment shall be made in respect of the principal of
or interest on this Note.
4.3 Effect of Subordination. Subject to the rights, if any, of the
holders of Senior Indebtedness under this Section 4 to receive cash, securities
or other properties otherwise payable or deliverable to the Holder of this Note,
nothing contained in this Section 4 shall impair, as between the Company and the
Holder, the obligation of the Company, subject to the terms and conditions
hereof, to pay to the Holder the principal hereof and interest hereon as and
when the same become due and payable, or shall prevent the Holder of this Note,
upon default hereunder, from exercising all rights, powers and remedies
otherwise provided herein or by applicable law.
4.4 Subrogation. Subject to the payment in full of all Senior
Indebtedness and until this Note shall be paid in full, the Holder shall be
subrogated to the rights of the holders of Senior Indebtedness (to the extent of
payments or distributions previously made to such holders of Senior Indebtedness
pursuant to the provisions of Section 4.2 above) to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness. No
such payments or distributions applicable to the Senior Indebtedness shall, as
between the Company and its creditors, other than the holders of Senior
Indebtedness and the Holder, be
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deemed to be a payment by the Company to or on account of this Note; and for the
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness to which the Holder would be entitled except for the
provisions of this Section 4 shall, as between the Company and its creditors,
other than the holders of Senior Indebtedness and the Holder, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness.
4.5 Undertaking. By its acceptance of this Note, the Holder agrees to
execute and deliver such documents as may be reasonably requested from time to
time by the Company or the lender of any Senior Indebtedness in order to
implement the foregoing provisions of this Section 4.
5. Conversion.
5.1 Automatic Conversion. The entire principal amount of this Note,
together with all accrued but unpaid interest owing thereon, shall be
automatically converted into shares of Common Stock at the Conversion Price (as
hereinafter defined) at the time in effect immediately prior to the closing of a
firmly underwritten public offering pursuant to a registration statement filed
by the Company under the Securities Act of 1933, as amended (the "Act"), with
aggregate gross proceeds in excess of $20,000,000 (a "Qualified IPO"). The
"Conversion Price" shall be equal to the gross per share proceeds to the Company
of the Common Stock in such Qualified IPO, prior to deduction of underwriting
commissions and discounts.
5.2 Notice of Conversion. If this Note is automatically converted,
written notice shall be delivered to the Holder of this Note at the address last
shown on the records of the Company for the Holder or given by the Holder to the
Company for the purpose of notice or, if no such address appears or is given, at
the place where the principal executive office of the Company is located,
notifying the Holder of the conversion to be effected, specifying the Conversion
Price, the principal amount of the Note to be converted, the amount of accrued
interest to be converted, the date on which such conversion will occur and
calling upon such Xxxxxx to surrender to the Company, in the manner and at the
place designated, the Note.
5.3 Delivery of Stock Certificates. As promptly as practicable after
the conversion of this Note, the Company at its expense will issue and deliver
to the Holder of this Note a certificate or certificates for the number of full
shares of Common Stock issuable upon such conversion.
5.4 Mechanics and Effect of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of this Note. In lieu of the Company
issuing any fractional shares to the Holder upon the conversion of this Note,
the Company shall pay to the Holder the amount of outstanding principal or
interest that is not so converted, such payment to be in the form as provided
below. Upon the conversion of this Note pursuant to Section 5.1 above, the
Holder shall surrender this Note, duly endorsed, at the principal office of the
Company. At its expense, the Company shall, as soon as practicable thereafter,
issue and deliver to such Holder at such principal office a certificate or
certificates for the number of shares of such Common Stock to which the Holder
shall be entitled upon such conversion (bearing such legends as are required by
the Agreement and applicable state and federal
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securities laws in the opinion of counsel to the Company), together with any
other securities and property to which the Holder is entitled upon such
conversion under the terms of this Note, including a check payable to the
Holder for any cash amounts payable as described above. In the event of any
conversion of this Note pursuant to Section 5.1 above, such conversion shall be
deemed to have been made immediately prior to the closing of the issuance and
sale of such Common Stock and on and after such date the Holder of this Note
entitled to receive the shares of such Common Stock issuable upon such
conversion shall be treated for all purpose as the record Holder of such
shares. Upon conversion of this Note, the Company shall be forever released
from all its obligations and liabilities under this Note, except that the
Company shall be obligated to pay the Holder, within ten (10) days after the
date of such conversion, any interest accrued and unpaid or unconverted to and
including the date of such conversion, and no more.
6. Notice of Certain Events; Reservation of Common Stock.
6.1 Notices of Record Date, etc. In the event of:
6.1.1 Any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of all
or substantially all of the assets of the Company to any other person or any
consolidation or merger involving the Company; or
6.1.2 Any voluntary or involuntary dissolution, liquidation or winding
up of the Company,
the Company will mail to the holder of this Note at least ten (10) days prior to
the earliest date specified therein, a notice specifying the date on which any
such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up is expected to become effective.
6.2 Reservation of Stock Issuable Upon Conversion. The Company shall,
at a reasonable time prior to effecting a Qualified IPO, reserve and keep
available out of its authorized but unissued shares of Common Stock solely for
the purpose of effecting the conversion of the Note a number of its shares of
Common Stock as shall be sufficient to effect the conversion of the Note, based
on the good faith estimate of the Company; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of the entire outstanding principal amount of this Note, in
addition to such other remedies as shall be available to the holder of this
Note, the Company will use its reasonable efforts to take such corporate action
as may, in the opinion of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purposes.
7. Assignment. Subject to the restrictions on transfer described in
Section 9 below, the rights and obligations of the Company and the Holder of
this Note shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
8. Waiver and Amendment. Any provision of this Note may be amended,
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waived or modified upon the written consent of the Company and the Holder.
9. Transfer of this Note or Securities Issuable on Conversion Hereof.
With respect to any offer, sale or other disposition of this Note or securities
into which such Note may be converted, the Holder will give written notice to
the Company prior thereto, describing briefly the manner thereof, together with
a written opinion of such Xxxxxx's counsel, to the effect that such offer, sale
or other distribution may be effected without registration or qualification
(under any federal or state law then in effect). Promptly upon receiving such
written notice and reasonably satisfactory opinion, if so requested, the
Company, as promptly as practicable, shall notify such Holder that such Holder
may sell or otherwise dispose of this Note or such securities, all in accordance
with the terms of the notice delivered to the Company. If a determination has
been made pursuant to this Section 9 that the opinion of counsel for the Holder
is not reasonably satisfactory to the Company, the Company shall so notify the
Holder promptly after such determination has been made. Each Note thus
transferred and each certificate representing the securities thus transferred
shall bear a legend as to the applicable restrictions on transferability in
order to ensure compliance with the Act, unless in the opinion of counsel for
the Company such legend is not required in order to ensure compliance with the
Act. The Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions.
10. Heading; References. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.
Except where otherwise indicated, all references herein to Sections refer to
Sections hereof.
11. Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if telegraphed or mailed by registered or
certified mail, postage prepaid, at the respective addresses of the parties as
set forth herein. Any party hereto may by notice so given change its address for
future notice hereunder. Notice shall conclusively be deemed to have been given
when personally delivered or when deposited in the mail or telegraphed in the
manner set forth above and shall be deemed to have been received when delivered.
12. No Stockholder Rights. Nothing contained in this Note shall be
construed as conferring upon the Holder or any other person the right to vote or
to consent or to receive notice as a stockholder in respect of meetings of
stockholders for the election of directors of the Company or any other matters
or any rights whatsoever as a stockholder of the Company; and no dividends or
interest shall be payable or accrued in respect of this Note or the interest
represented hereby or the Conversion Shares obtainable hereunder until, and only
to the extent that, this Note shall have been converted.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, excluding that body of law
relating to conflict of laws.
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IN WITNESS WHEREOF, the Company has caused this Note to be issued this
1st day of August, 2003,
STEREOTAXIS, INC.
By /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: CFO
Name of Holder: Siemens Aktiengesellschaft
Address:
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