EXHIBIT 4.9
SHARE TRANSFER RESTRICTION AGREEMENT
THIS SHARE TRANSFER RESTRICTION AGREEMENT (this "Agreement") is made
and entered into as of January 23, 2006 (the "Effective Date"), by and between
ATS Medical, Inc., a Minnesota corporation ("Parent"), and _____, [a _____
corporation OR an individual resident of the state of _____] (the "Significant
Stockholder"). Each term used herein but not otherwise defined herein shall have
the meaning ascribed thereto in that certain Agreement and Plan of Merger, dated
of even date herewith, by and among Parent, 3F Therapeutics, Inc. (the
"Company"), Seabiscuit Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Merger Subsidiary"), and the other parties
thereto (the "Merger Agreement").
WHEREAS, upon the Closing, and pursuant to the terms and conditions of
the Merger Agreement, the Merger Subsidiary shall be merged with and into the
Company (the "Merger"), with the Company as the surviving corporation in the
Merger;
WHEREAS, pursuant to the terms and conditions of the Merger Agreement,
Parent will issue to the Stockholders, or deposit in escrow with an escrow
agent, a number of shares of its common stock, $0.01 par value per share
("Parent Common Stock"), following the consummation of the Merger ("Initial
Merger Consideration"), and thereafter may issue to the Stockholders additional
Parent Common Stock if certain milestones are achieved ("Contingent Merger
Consideration" and together with Initial Merger Consideration, "Merger
Consideration");
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated in the Merger Agreement that the Significant
Stockholder execute this Agreement to restrict the transfer of Parent Common
Stock received as Merger Consideration on the terms and conditions contained
herein; and
WHEREAS, the Significant Stockholder has agreed to enter into this
Agreement and to restrict the sale, assignment, transfer, conveyance,
hypothecation, or alienation of Parent Common Stock received as Merger
Consideration in order to provide for an orderly market for Parent Common Stock
subsequent to the Closing.
NOW, THEREFORE, in consideration of the premises and covenants
contained herein, and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Transfer Restrictions.
(a) Transfer Restriction upon Certain Initial Merger Consideration.
The Significant Stockholder hereby agrees not to sell, pledge,
hypothecate, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option, right or warrant
to purchase or otherwise transfer, assign, or dispose of,
directly or indirectly ("Transfer"), any shares of Parent Common
constituting Initial Merger Consideration, but not including
Escrow Shares ("Initial Shares") prior to the six-month
anniversary of the Effective Time (the "Initial Restriction
Period"). Upon the expiration of the Initial Restriction Period,
the Initial Shares shall be subject to
an additional Transfer restriction (the "Subsequent Restriction
Period"), which Transfer restriction will lapse as follows: on
the one-month anniversary of the commencement of the Subsequent
Restriction Period, and on each of the five successive monthly
anniversaries thereafter, the Transfer restriction shall lapse
with respect to one-sixth (1/6th) of the Initial Shares, with all
Transfer restrictions under this Section 1(a) lapsing upon the
expiration of the Subsequent Restriction Period.
(b) Transfer Restriction upon Escrow Shares. The Significant
Stockholder hereby agrees not to Transfer any shares of Parent
Common constituting Escrow Shares, except that during each of the
five months following the Distribution Date, this Transfer
restriction shall lapse with respect to one-sixth (1/6th) of the
Escrow Shares. On the date that is six months after the
Distribution Date, the transfer restriction shall lapse with
respect to the remaining portion of such Escrow Shares.
(c) Transfer Restriction upon Contingent Merger Consideration. The
Significant Stockholder hereby agrees not to Transfer any shares
of Parent Common Stock received as Contingent Merger
Consideration ("Contingent Shares"), if any, during the six-month
period following the date of receipt of any Contingent Shares
(each such date, a "Contingent Share Receipt Date"), if such
Transfer would violate the provisions of this Section 1(c). The
Transfer restriction described in this Section 1(c) will lapse as
follows: on the one-month anniversary of a Contingent Share
Receipt Date, and on each of the five successive monthly
anniversaries thereafter, the Transfer restriction shall lapse
with respect to one-sixth (1/6th) of the Contingent Shares
received on such Contingent Share Receipt Date, with all Transfer
restrictions under this Section 1(c) lapsing upon the expiration
of such six-month period.
(d) No Transfer in violation of Section 1(a), (b) or (c) will be
effective for any purpose or confer on any transferee or
purported transferee any rights whatsoever.
(e) Permitted Parent Common Stock Transfers. Notwithstanding anything
contained in this Agreement to the contrary, the Significant
Stockholder may transfer Parent Common Stock received as Merger
Consideration in accordance with the Exchange Act and the
Securities Act to (i) a spouse, a lineal ancestor or descendant,
or adopted child, of the Significant Stockholder, (ii) a trust
for the primary benefit of the Significant Stockholder or the
foregoing individuals, (iii) if the Significant Stockholder is a
partnership, any Person that is a current or former limited or
general partner of such partnership; (iv) if the Significant
Stockholder is a limited liability company, any Person that is a
current or former member of the Significant Stockholder; or (v)
to any Affiliate of the Significant Stockholder; provided,
however, that the transferee of such Parent Common Stock shall
agree to be bound by the limitations set forth in this Agreement.
(f) Beneficial Rights of Significant Stockholder. Except as otherwise
provided in any agreements between Parent and the Significant
Stockholder, the Significant
2
Stockholder shall be entitled to its beneficial rights of
ownership of Parent Common Stock received as Merger
Consideration, including without limitation the right to receive
dividends and to vote such Parent Common Stock for any and all
purposes; provided, however, that the Significant Stockholder
shall not be entitled to any beneficial rights of ownership,
including the right to vote, of the Escrow Shares until such
shares have been released from escrow to the Significant
Stockholder in accordance with the terms of the Escrow Agreement.
(g) Legends. In addition to any legends that may be required by state
securities or other applicable laws, the Significant Stockholder
acknowledges that the stock certificates evidencing Parent Common
Stock issued as Merger Consideration will be endorsed with the
following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, AS SET
FORTH IN A SHARE TRANSFER RESTRICTION AGREEMENT
ENTERED INTO BETWEEN PARENT AND THE HOLDER OF THIS
CERTIFICATE, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF PARENT.
Parent shall remove and/or to cause the transfer agent of the
Parent Common stock to remove, the above legend set forth on any
and all stock certificate(s) representing shares of Parent Common
Stock, and to issue to the Significant Stockholder a new stock
certificate or certificates without such legend, promptly
following (a) expiration of any Transfer restrictions imposed
hereunder upon shares of Parent Common Stock as to which such
Transfer restrictions have expired and (b) the surrender to
Parent or the transfer agent by the Significant Stockholder of
the stock certificate or certificates bearing such legend for
reissuance of stock certificates without such legend as to those
shares as to which the Transfer restrictions have expired.
(h) Waiver of Transfer Restrictions by Parent. Notwithstanding
anything to the contrary set forth in this Agreement, Parent may,
in its sole and absolute discretion, at any time and from time to
time, waive any of the restrictions contained in this Agreement
as such restrictions apply to the Parent Common Stock held by the
Significant Stockholder to increase the liquidity of Parent
Common Stock or if such waiver would otherwise be in the best
interests of Parent.
(i) Stock Splits and Stock Dividends. The restrictions on the
Transfer of Parent Common Stock covered by this Agreement shall
also apply to any securities issued to Significant Stockholder in
the event of a stock dividend or distribution, a forward or a
reverse stock split, or otherwise reclassification of shares of
Parent Common Stock to the extent and for the duration that the
shares of Parent Common stock with respect to which such
securities were issued are subject to the Transfer restrictions
hereunder.
3
2. Representations and Warranties of the Significant Stockholder. The
Significant Stockholder represents, warrants, and agrees as follows:
(a) Authorization. If the Significant Stockholder is not an
individual, this Agreement has been duly authorized by all
necessary action on the part of the Significant Stockholder, has
been duly executed by an authorized officer or representative of
the Significant Stockholder and is a legal, valid and binding
agreement of the Significant Stockholder, enforceable against the
Significant Stockholder in accordance with its terms. If the
Significant Stockholder is an individual, the Significant
Stockholder has the legal capacity to enter into this Agreement,
and the Agreement has been duly executed by the Significant
Stockholder and is a legal, valid and binding agreement of the
Significant Stockholder, enforceable against the Significant
Stockholder in accordance with its terms.
(b) Enforcement of Transfer Restrictions. As long as shares of Parent
Common Stock of the Significant Stockholder are subject to
Transfer restrictions pursuant to Section 1 hereof and in order
to permit enforcement of the restrictions contained herein,
Significant Stockholder agrees that Parent may note in the stock
transfer records of Parent the restrictions contained in this
Agreement as and to the extent then applicable, and the
Significant Stockholder agrees and consents to the entry of stop
transfer instructions with the transfer agent acting on behalf of
Parent with respect to Parent Common Stock subject to this
Agreement until such shares are no longer subject to such
Transfer restrictions.
3. Miscellaneous.
(a) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Except as expressly permitted
hereunder, no party hereto may assign either this Agreement or
any of its rights, interests or obligations hereunder without the
prior written approval of the other party.
(b) Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the internal laws of the State of
Delaware (regardless of the laws that might otherwise govern
under applicable principles of conflicts of law).
(c) Injunctive and Equitable Relief. If the Significant Stockholder
fails to adhere fully to the terms and conditions of this
Agreement, the Significant Stockholder shall be liable to Parent
for any damages suffered by reason of any such breach of the
terms and conditions hereof. The Significant Stockholder
acknowledges and agrees that irreparable damage would occur in
the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were
otherwise breached. The Significant Stockholder further agrees
that in the event of a breach of any of the terms or conditions
of this Agreement by the Significant Stockholder, and in addition
to all other remedies that may be available in law or in equity
to Parent, a preliminary and permanent injunction, without bond
or surety, and an order of a court requiring the Significant
4
Stockholder to cease and desist from violating the terms and
conditions of this Agreement and specifically requiring the
Significant Stockholder to perform its obligations hereunder is
fair and reasonable.
(d) Cumulative Remedies. Except as otherwise provided herein, the
rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
(e) Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations,
both written and oral, between the parties with respect to the
subject matter of this Agreement. Neither this Agreement nor any
provision hereof is intended to confer upon any Person other than
the parties hereto any rights or remedies hereunder.
(f) Amendments; No Waivers.
(i) Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by both parties
hereto, or in the case of a waiver, by the party against
whom the waiver is to be effective.
(ii) No waiver by a party of any default, misrepresentation or
breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior
or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any
rights arising by virtue of any prior or subsequent
occurrence. No failure or delay by a party in exercising
any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies
provided by law.
(g) Construction. The parties hereto intend that each representation,
warranty and covenant contained herein shall have independent
significance. If any party has breached any representation,
warranty or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative
levels of specificity) that the party has not breached shall not
detract from or mitigate the fact that the party is in breach of
the first representation, warranty or covenant.
(h) Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice,
request, demand, claim, or other communication hereunder shall be
deemed duly given (a) if personally delivered, when so delivered,
(b) if mailed, two (2) Business Days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid and
5
addressed to the intended recipient as set forth below, (c) if
given by facsimile, once such notice or other communication is
transmitted to the facsimile number specified below and
electronic confirmation is received; provided, however, that such
notice or other communication is promptly thereafter mailed in
accordance with the provisions of clause (b) above, or (d) if
sent through an overnight delivery service in circumstances to
which such service guarantees next day delivery, the day
following being so sent::
If to Parent:
To: ATS Medical, Inc.
0000 Xxxxxxxxx Xxxx #000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx Xxxxxx, Vice President Marketing and
Business Development
Fax: (000) 000-0000
With a copy to:
Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP
3300 Plaza VII
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Significant Stockholder:
To:
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
Fax:
(i) Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary
mail or electronic mail), but no such notice, request, demand,
claim or other communication shall be deemed to have been duly
given unless and until it actually is received by the individual
for whom it is intended. Any party may change the address to
which notices, requests, demands, claims and other communications
hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
(j) Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts and the signatures delivered by facsimile,
each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto
shall have received a counterpart hereof signed by the other
party hereto.
6
(k) Severability. If any provision of this Agreement, or the
application thereof to any person, place or circumstance, shall
be held by a court of competent jurisdiction to be invalid,
unenforceable or void, the remainder of this Agreement and such
provisions as applied to other Persons, places and circumstances
shall remain in full force and effect only if, after excluding
the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated
hereby in substantially the same manner as originally set forth
at the later of the date this Agreement was executed or last
amended.
(l) Further Assurances. The Significant Stockholder agrees upon
request to execute any further documents or instruments necessary
or desirable to carry out the purposes or intent of this
Agreement.
(m) Termination of Agreement. In the event of (a) a tender offer to
purchase all or substantially all of Parent's issued and
outstanding securities, or (b) a merger, consolidation, or other
reorganization of Parent with or into an unaffiliated entity, and
if in the case of any such merger, consolidation or other
reorganization, the requisite number of the record and beneficial
owners of Parent's securities then outstanding are voted in favor
of such merger, consolidation, or other reorganization, and such
merger, consolidation, or other reorganization is completed, then
this Agreement shall terminate as to any securities of the
Significant Stockholder then subject to the Transfer restrictions
hereunder as of (1) in the case of such tender offer, immediately
prior to the tender by the Significant Stockholder of any such
securities in such tender offer and (2) in the case of a merger,
consolidation or other reorganization, immediately prior to the
closing of such event and, in all such cases, any and all
securities of Parent, including without limitation Parent Common
Stock, restricted pursuant hereto shall be released from such
restrictions as of such applicable time.
[Remainder of Page Intentionally Left Blank]
7
IN WITNESS WHEREOF, the parties hereby execute this Agreement effective
the day and year first above written.
ATS MEDICAL, INC.
By:
-------------------------------------
Name:
Title:
SIGNATURE PAGE
SHARE TRANSFER RESTRICTION AGREEMENT
SHARE TRANSFER RESTRICTION AGREEMENT
COUNTERPART SIGNATURE PAGE
This is a counterpart signature page to that certain Share
Transfer Restriction Agreement (the "Agreement"), dated effective as of January
23, 2006 and entered into by and between Parent and the undersigned. The
undersigned, through execution and delivery of this counterpart signature page,
hereby intends to be legally bound by the terms of the Agreement.
-------------------------------------------
(Printed Name)
-------------------------------------------
(Signature)
-------------------------------------------
(Street Address)
-------------------------------------------
(City and State)
SHARE TRANSFER RESTRICTION AGREEMENT
COUNTERPART SIGNATURE PAGE
This is a counterpart signature page to that certain Share
Transfer Restriction Agreement (the "Agreement"), dated effective as of January
23, 2006 and entered into by and between Parent and the undersigned. The
undersigned, through execution and delivery of this counterpart signature page,
hereby intends to be legally bound by the terms of the Agreement.
[NAME]
By:
-----------------------------------------
Name:
Title:
