Exhibit 10.3
FIRST AMENDMENT OF TRANSACTION AGREEMENT
This First Amendment of Transaction Agreement (this "Agreement") is
entered into as of September 30, 2004, by and among Boston Scientific
Corporation, a Delaware corporation ("Parent"), Nemo I Acquisition, Inc., a
Delaware corporation and a wholly owned subsidiary of Parent ("Purchaser"),
Rubicon Medical Corporation, a Delaware corporation (the "Company"), and Xxxxxxx
X. Xxxxxx ("Xxxxxx") (in his capacity as Stockholders' Representative). Parent,
Purchaser, the Company and Xxxxxx are sometimes referred to herein collectively
as the "Parties" and individually as a "Party."
A. The Parties have entered into a Transaction Agreement dated as of
October 29, 2003 (the "Transaction Agreement") providing, among other things,
for the purchase by Parent of 1,090,147 shares of the Preferred Stock of the
Company and for Purchaser to acquire all the outstanding capital stock of the
Company in accordance with the Transaction Agreement in the event Parent or
Purchaser exercises its option rights under certain option agreements entered
into with the Controlling Stockholders of the Company. Capitalized terms used in
this Agreement shall, unless otherwise defined or unless the context otherwise
requires, have the same meaning as capitalized terms in the Transaction
Agreement.
B. Article V of the Transaction Agreement provides for Earn-out
Payments to the Earn-out Recipients upon the achievement of Milestone 2 and
Milestone 3, subject, among other things, to the exercise by Parent or Purchaser
of their option rights.
C. The Parties by this Agreement wish to amend the Transaction
Agreement to extend the time for performance under Milestone 3 by 18 months.
NOW, THEREFORE, for and in consideration of the mutual undertakings and
promises set forth below, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Parties hereby agree
as follows.
Definition of Milestone 3. The definition of "Milestone 3" in Section
1.01 of the Transaction Agreement is hereby deleted in its entirety and replaced
with the following:
"Milestone 3" means the date on which one of the following conditions
has been satisfied:
(A) On or before March 31, 2006, (i) the Disinterested Physicians
meet and use the Clot Retrieving Device in a vascular bench
model and the Disinterested Physicians unanimously agree that
such Clot Retrieving Device is superior to the Comparative
Devices and (ii) the Disinterested Physicians test such Clot
Retrieving Device in an animal model and unanimously agree
that such Clot Retrieving Device is superior to the
Comparative Devices; or
(B) The Disinterested Physicians (i) on or before March 31, 2006,
determine that the Clot Retrieving Device would be superior to
the Comparative Devices with commercially reasonable and
technically feasible additional development, (ii) on or before
June 30, 2006, retest such Clot Retrieving Device in the same
vascular bench and animal models and (iii) on or before June
30, 2006, unanimously determine that such Clot Retrieving
Device is superior to the Comparative Devices.
For purposes of clause (A) and (B) above, the Clot Retrieving
Device shall be "superior" to the Comparative Device if it is
determined to be equal to the Comparative Device in all, and better
than the Comparative Device in one, of the following categories: ease
of use, safety and efficacy.
Milestone 3 Earn-out Payments. Section 5.04 of the Transaction
Agreement is hereby deleted in its entirety and replaced with the following:
SECTION 5.04. Milestone 3 Earn-out Payments.
(b) As additional consideration to the Earn-out Recipients, upon
the later to occur of (i) the achievement of Milestone 3 or
(ii) the Effective Time, provided that Milestone 3 has been
achieved, Parent shall pay or cause to be paid to each
Earn-out Recipient as soon as practicable thereafter, either
(x) a number of shares of Parent Common Stock having a value
(based on the Average Parent Stock Price prior to the date of
payment) equal to the number of shares of Common Stock
purchased by Parent or Purchaser from such Earn-out Recipient
pursuant to the Option or the Offer or converted into the
right to receive Consideration pursuant to Section 4.04
multiplied by $0.50 or (y) an amount of cash equal to the
number of shares of Common Stock purchased by Parent or
Purchaser from such Earn-out Recipient pursuant to the Option
or the Offer or converted into the right to receive
Consideration pursuant to Section 4.04 multiplied by $0.50
(such payments calculated pursuant to either clause (x) or
(y), the "Milestone 3 Earn-out Payment"). Parent shall have
the right to determine whether the Milestone 3 Earn-out
Payment takes the form provided for in (x) or (y), but shall
provide the same form of compensation to all Earn-out
Recipients. Notwithstanding the foregoing, to the extent the
achievement of Milestone 3 occurs before Parent has exercised
an Option, upon exercise of an Option, the Cash Consideration
or Exchange Ratio, as applicable, shall include the amount of
the Milestone 3 Earn-out Payment owing pursuant to this
Section 5.04.
(c) For each of the tests referred to in Milestone 3, all of the
devices that are being tested in such test shall be tested by
each Disinterested Physician in the same test fixtures/models
during the same testing session. The Company and Parent shall
agree on which models will be used on or before July 1, 2005,
and the Company shall be granted reasonable access to those
models for the purpose of preparing its devices for
satisfaction of Milestone 3. The Company and Parent also agree
as follows:
(i) On or before June 15, 2005, Parent and either the
Company, if the Disinterested Physicians are selected
prior to the exercise of an Option, or the Former
Stockholders Committee, if the Disinterested
Physicians are selected after the exercise of an
Option, shall by mutual agreement select the
Disinterested Physicians. If Parent and either the
Company or the Former Stockholders Committee, as the
case may be, are unable to agree on the Disinterested
Physicians by June 15, 2005, Parent shall appoint one
of the Disinterested Physicians, the Company or the
Former Stockholders Committee, as the case may be,
shall appoint another of the Disinterested Physicians
and such Disinterested Physicians designated by
Parent and the Company or the Former Stockholders
Committee, as the case may be, shall select by mutual
agreement, within 10 business days of their
selection, the third Disinterested Physician who is
not affiliated with either the Company or Parent,
including as a medical director, consultant or
employee.
(ii) On or before July 15, 2005, Parent and the Company or
the Former Stockholders Committee, as the case may
be, shall agree on the method of testing to be used,
the fixtures and models to be used in the testing,
the Comparative Devices to be used in the testing and
the location of testing (such determinations, the
"Testing Parameters"); provided, that the test of the
Clot Retrieving Device in the animal model shall be
performed at the Xxxxxx Neurological Institute in
Phoenix, Arizona or another location mutually
acceptable to Parent and the Company or the Former
Stockholders Committee, as the case may be, and the
test of the Clot Retrieving Device in the vascular
bench model shall be performed at a neutral third
party facility. If Parent and the Company or the
Former Stockholders Committee, as the case may be,
are unable to agree on the Testing Parameters by July
15, 2005, then the Disinterested Physicians shall
select, by majority vote, on or before September 1,
2005, between each item of the Testing Parameters
proposed by Parent and each item of the Testing
Parameters proposed by the Company or the Former
Stockholders Committee, as the case may be. When
Parent and the Company (or the Former Stockholders
Committee) or the Disinterested Physicians, as the
case may be, determine the models to be used in the
testing, the same models shall be made available to
the Company, the Former Stockholders Committee (if
applicable) and Parent for testing at reasonable
times and locations. After coordinating with the
Disinterested Physicians and upon not fewer than 60
days advance notice, the Company or the Former
Stockholders Committee, as the case may be, shall
notify Parent of the date, time, place, and
parameters of any scheduled test.
(iii) Immediately following each test, each of the
Disinterested Physicians shall prepare a report
summarizing the test, stating such Disinterested
Physician's opinion as to the superiority of the Clot
Retrieving Device over the Comparative Devices in
each of the following categories: ease of use, safety
and efficacy, and, if necessary, identifying in such
Disinterested Physician's independent opinion any
commercially reasonable and technically feasible
additional developments to the Clot Retrieving Device
that would render the Clot Retrieving Device superior
to the Comparative Devices. The Company or the Former
Stockholders Committee, as the case may be, may
schedule any number of tests and retests on or before
March 31, 2006 and any number of retests on or before
June 30, 2006.
(iv) The costs and expenses of the Disinterested
Physicians shall be borne equally by Parent and the
Company; provided that Parent shall not be obligated
to contribute any monies for more than an aggregate
of five tests and retests.
Entire Agreement. Except as expressly amended by this Agreement, the
Transaction Agreement shall continue in full force and effect.
Counterparts. This Agreement may be executed and delivered (including
by facsimile transmission) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
Public Announcements. The initial press release or releases relating to
this Agreement shall have been agreed to by each of Parent and the Company.
Thereafter, (a) unless otherwise required by Law, the Company shall not issue
any press release or otherwise make any public statements with respect to this
Agreement without the prior written consent of Parent and (b) unless otherwise
required by Law or the requirements of the NYSE, Parent shall not issue any
press release or otherwise make any public statements with respect to this
Agreement without the prior written consent of the Company.
Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
this Agreement is not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that this Agreement
be consummated as originally contemplated to the fullest extent possible.
Further Assurances. Each Party shall execute such additional documents
and take such further actions as may reasonably be requested by any other Party
to carry out the purposes of this Agreement or to more fully vest in the
requesting Party the rights intended to be conferred by this Agreement.
Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined
exclusively in any Delaware state or federal court sitting in Wilmington,
Delaware. The parties hereto hereby (a) submit to the exclusive jurisdiction of
any state or federal court sitting in Wilmington, Delaware for the purpose of
any Action arising out of or relating to this Agreement brought by any party
hereto, and (b) irrevocably waive, and agree not to assert by way of motion,
defense, or otherwise, in any such Action, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the Transactions may not be enforced in or by any of the
above-named courts.
IN WITNESS WHEREOF, Xxxxxx has executed this Agreement as of the date
first written above and the other Parties have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
BOSTON SCIENTIFIC CORPORATION
By /s/ Xxxxxxxx X. Best
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Name: Xxxxxxxx X. Best
Title: Chief Financial Officer
NEMO I ACQUISITION, INC.
By /s/ Xxxxxxxx X. Best
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Name: Xxxxxxxx X. Best
Title: Chief Financial Officer
RUBICON MEDICAL CORPORATION
By /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President/CEO
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
