Exhibit 10.53

 

CONTRIBUTION AND EXCHANGE AGREEMENT

 

This Contribution and Exchange Agreement, dated as of April 4, 2005 (the “Agreement”), is entered into by and among the institutional stockholders listed on Schedule I hereto (each, a “Stockholder” and collectively, the “Stockholders”), ev3 LLC, a Delaware limited liability company (“ev3 LLC”), ev3 Inc., a Delaware corporation (the “Company”), and Micro Therapeutics, Inc., a Delaware corporation (“MTI”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Section 9.1 of this Agreement.

 

R E C I T A L S

 

WHEREAS, the Stockholders are the owners of the number of shares of common stock, par value $0.001 per share, of MTI (“MTI Common Stock”) set forth opposite such Stockholders’ names on Schedule II hereto (collectively, the “MTI Shares”), representing all of the MTI Common Stock owned directly by the Stockholders (but excluding any shares of MTI Common Stock the Stockholders may be deemed to beneficially own by virtue of their respective ownership of ev3 LLC);

 

WHEREAS, the Company intends to file a Registration Statement on Form S-1 (the “Registration Statement”) with the SEC pursuant to which it will pursue the Initial Public Offering of its common stock, par value $0.01 per share (“Company Common Stock”);

 

WHEREAS, simultaneously with the execution of this Agreement, the Company and ev3 LLC will enter into an agreement and plan of merger (the “Merger Agreement”) pursuant to which ev3 LLC will agree, on the terms and subject to the conditions set forth in the Merger Agreement, to merge (the “Merger”) with and into the Company with the Company surviving the Merger, as more fully described in the Merger Agreement;

 

WHEREAS, simultaneously with the execution of this Agreement, the Company and certain noteholders named therein will enter into a note contribution and exchange agreement (the “Note Contribution Agreement”) pursuant to which the noteholders will agree, on the terms and subject to the conditions set forth in the Note Contribution Agreement, to contribute to the Company notes of ev3 Endovascular, Inc., which following the Merger will be a wholly owned subsidiary of the Company, in exchange for Company Common Stock, as more fully described in the Note Contribution Agreement;

 

WHEREAS, on the terms and subject to the conditions set forth in this Agreement, including, without limitation, Article VII herein, effective at the Closing (as defined in Section 2.1) the Stockholders desire to contribute to ev3 LLC, and ev3 LLC desires to accept from the Stockholders, the shares of MTI Common Stock owned by them as a contribution to capital (the “Contribution”), in exchange (the “Exchange”) for the issuance to the Stockholders of the number of common membership units of ev3 LLC determined in the manner set forth in Section 1.3 below (collectively, the “Common Membership Units”); and

 

WHEREAS, for the purpose of Section 203 of the Delaware General Corporation Law (“DGCL”) and the Rights Agreement, MTI desires to acknowledge the Contribution and Exchange and make certain representations, warranties and covenants related thereto.

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NOW, THEREFORE, in consideration of the premises and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

ARTICLE I.

CONTRIBUTION AND EXCHANGE

 

Section 1.1. Contribution of MTI Common Stock. On the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions hereof, including, without limitation, the satisfaction (or waiver, to the extent permitted by this Agreement and applicable law) of the conditions set forth in Article VII of this Agreement, effective at the Closing each of the Stockholders hereby agrees to contribute, transfer, assign and convey to ev3 LLC all right, title and interest in and to all of the shares of MTI Common Stock owned directly by such Stockholder, which MTI Shares are set forth opposite such Stockholder’s name on Schedule II hereto, together with any and all rights, privileges, benefits, obligations and liabilities appertaining thereto, reserving unto such Stockholder no rights or interests therein whatsoever, to have and to hold the same unto ev3 LLC and its heirs, legal representatives, successors and assigns, from and after the Closing to its own proper use forever.

 

Section 1.2. Acceptance of Contribution. On the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions hereof, effective at the Closing ev3 LLC hereby agrees to accept the Contribution of the MTI Common Stock pursuant to Section 1.1.

 

Section 1.3. Exchange. In consideration of the Contribution by the Stockholders and on the basis of the representations, warranties and agreements contained herein, and subject to the terms and conditions hereof, on the Closing Date and in exchange for the MTI Shares contributed to ev3 LLC pursuant to Section 1.1, ev3 LLC shall issue and deliver to each Stockholder the number of Common Membership Units determined by dividing (i) the product obtained by multiplying (A) the number of shares of MTI Common Stock owned directly by such Stockholder (as set forth opposite the respective Stockholder’s name on Schedule II hereto) by (B) the quotient obtained by dividing (1) the sum of the daily closing prices per share of MTI Common Stock as quoted on the NASDAQ National Market (symbol “MTIX”) and reported in The Wall Street Journal (Northeast Edition), absent manifest error, for the twenty (20) consecutive trading days from and including the date the Registration Statement is first filed by the Company with the SEC by (2) twenty (20), by (ii) the per share Split-Adjusted Midpoint (as defined below). In the event the daily closing price per share of MTI Common Stock as quoted on the NASDAQ National Market differs from the daily closing price reported in The Wall Street Journal (Northeast Edition), the daily closing price per share of MTI Common Stock as quoted on the NASDAQ National Market shall control. The “Split-Adjusted Midpoint” shall equal the quotient obtained by dividing (i) the midpoint of the range of estimated initial public offering prices as set forth on the cover of the Preliminary Prospectus by (ii) the number of shares of Company Common Stock necessary to obtain one share of Company Common Stock in connection with the reverse split to be declared with respect to Company Common Stock that is to take effect prior to the consummation of the Initial Public Offering (the “Reverse Split”). For example, if the Preliminary Prospectus states that the Company will effect a 1 for 5 Reverse Split, clause (ii) of the definition of Split-Adjusted Midpoint shall equal 5.

 

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Section 1.4. No Fractional Units Notwithstanding anything to the contrary contained herein, no certificates or scrip representing fractional Common Membership Units shall be issued to any Stockholder in connection with the Exchange. Instead, any fractional Common Membership Units that a Stockholder would otherwise be entitled to receive as a result of the Exchange shall be rounded up to the nearest whole number of Common Membership Units.

 

Section 1.5. Power of Attorney. From and after the Closing Date, each Stockholder constitutes and appoints ev3 LLC, its successors and assigns, as the Stockholder’s true and lawful attorney-in-fact, with full power of substitution, in the name of ev3 LLC or in the name of the Stockholder, to execute, deliver, file and/or record such documents, agreements and instruments as shall be necessary or appropriate to effect the Contributions pursuant to this Article I. The foregoing powers are coupled with an interest and shall be irrevocable.

 

Section 1.6. Characterization. The Contribution, the transactions described in the Merger Agreement and the Note Contribution Agreement and the public’s purchase of stock in the Initial Public Offering are part of an integrated plan and are intended together to qualify as a tax-free transaction under Section 351 of the Internal Revenue Code of 1986, as amended.

 

ARTICLE II.

CLOSING

 

Section 2.1. Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at 9:30 a.m., New York City time, on a date as may be mutually agreed to by ev3 LLC and the Stockholders that is within two (2) business days of the date the Preliminary Prospectus is first filed by the Company with the SEC (the “Closing Date”); provided, that on or before the Closing Date, all of the conditions set forth in Article VII shall have been fulfilled or waived in accordance with this Agreement, at the offices of King & Spalding LLP, 1185 Avenue of the Americas, New York, New York, or such other location as ev3 LLC the Company and the Stockholders shall mutually select.

 

Section 2.2. Closing Deliveries. At the Closing,

 

(a) Each Stockholder shall deliver to ev3 LLC the stock certificates representing the MTI Shares being contributed by such Stockholder, duly endorsed or accompanied by a duly executed stock power, all in appropriate form and sufficient for transfer of the MTI Shares to ev3 LLC.

 

(b) ev3 LLC shall deliver to each Stockholder an amended Schedule B to the operating agreement of ev3 LLC (the “Operating Agreement”) reflecting the Contribution and Exchange as contemplated by Section 4.1 thereof.

 

(c) MTI shall deliver to ev3 LLC, the Company and each Stockholder a certificate, dated the Closing Date, of the Secretary of MTI certifying to and attaching the resolutions of its Board of Directors and the Special Independent Committee setting forth the authorizations and approvals contemplated by Sections 5.2 and 5.3 of this Agreement.

 

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ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF ev3 LLC

 

ev3 LLC represents and warrants to each of the Stockholders as follows:

 

Section 3.1. Organization. ev3 LLC is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.

 

Section 3.2. Authority. The Board of Managers of ev3 LLC has authorized the execution, delivery and performance of this Agreement and the transactions contemplated hereby, including, without limitation, the issuance and delivery of the Common Membership Units to the Stockholders in accordance with the terms of this Agreement and the Operating Agreement. No other action is necessary to authorize such execution, delivery and performance, and upon such execution and delivery, this Agreement shall constitute a valid and binding obligation of ev3 LLC, enforceable against ev3 LLC in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditor’s rights generally or by general principles of equity.

 

Section 3.3. Issuance of Common Membership Units. The Common Membership Units to be issued by ev3 LLC pursuant to this Agreement, when issued in accordance with the provisions hereof, will be validly issued by ev3 LLC, fully paid and nonassessable, and no member of ev3 LLC has, or will have, any preemptive rights to subscribe for any Common Membership Units.

 

Section 3.4. Consents; Conflicts. Except with respect to filings made in connection with exemptions from registration under state or federal securities laws, the creation, authorization, issuance, offer and sale of the Common Membership Units hereunder do not require any consent, approval or authorization of, or filing, registration or qualification with, any Person or governmental authority on the part of ev3 LLC or the vote, consent or approval in any manner of the holders of any security of ev3 LLC as a condition to the execution and delivery of this Agreement or the creation, authorization, issuance, offer and sale of the Common Membership Units hereunder. The execution and delivery by ev3 LLC of this Agreement and the performance by ev3 LLC of its obligations hereunder will not violate (i) the terms and conditions of the Operating Agreement of ev3 LLC, or any agreement or instrument to which ev3 LLC is a party or by which it is bound or (ii) subject to the accuracy of the Stockholders’ representations and warranties contained herein, including, without limitation, the representations and warranties contained in Section 4.3 hereof, or any federal or state law.

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

 

Each of the Stockholders, severally and not jointly, represents and warrants to ev3 LLC as follows:

 

Section 4.1. Title to Securities. The Stockholder is the direct owner and holder of the respective number of shares of MTI Common Stock set forth opposite such Stockholder’s name on Schedule II hereto and has good and valid title to such MTI Common Stock, free and clear of all liens, claims and encumbrances.

 

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Section 4.2. Authority. The Stockholder has full right, power and authority to contribute, transfer, assign and convey to ev3 LLC the full legal and beneficial ownership in the MTI Common Stock to be surrendered by such Stockholder pursuant to this Agreement and to consummate the transactions contemplated herein. This Agreement has been duly and validly executed and delivered by the Stockholder and is a legal, valid and binding obligation of such Stockholder enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditor’s rights generally or by general principles of equity. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby nor compliance with any of the provisions hereof will (a) result in any conflict with, breach of, or default (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any agreement or other instrument or obligation to which such Stockholder is a party or by which such Stockholder or any of such Stockholder’s properties or assets may be bound or (b) violate any order, writ, injunction, judgment, decree, law, statute, rule or regulation applicable to such Stockholder or any of such Stockholder’s properties or assets. No action, consent or approval by, or filing with, any federal, state, municipal, foreign or other court or governmental or administrative body or agency, or any other regulatory or self-regulatory body, is required in connection with the execution and delivery by the Stockholder of this Agreement or the consummation by such Stockholder of the transactions contemplated hereby.

 

Section 4.3. Accredited Investor.

 

(a) Offering Exemption. The Stockholder acknowledges that transfer of the Common Membership Units pursuant to this Agreement has not been registered under the Securities Act, nor registered or qualified under any state securities laws, and that the Common Membership Units are being offered and sold pursuant to an exemption from such registration and qualification based in part upon such Stockholder’s representations contained herein.

 

(b) Knowledge of Offer. The Stockholder is familiar with the business and operations of ev3 LLC and has been given the opportunity to obtain from ev3 LLC all information that such Stockholder has requested regarding its business plans and prospects.

 

(c) Knowledge and Experience; Ability to Bear Economic Risks. The Stockholder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment contemplated by this Agreement, and is able to bear the economic risk of this investment in ev3 LLC (including a complete loss of the value of the Common Membership Units).

 

(d) Limitations on Disposition. The Stockholder recognizes that no public market exists for the Common Membership Units, and none may exist in the future. The Stockholder acknowledges that it must bear the economic risk of this investment indefinitely unless such Stockholder’s Common Membership Units are registered pursuant to the Securities Act, or an exemption from such registration is available, and unless the disposition of such Common Membership Units is qualified or registered under applicable state securities laws or an

 

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exemption from such qualification or registration is available, and that ev3 LLC has no present intention of so registering the Common Membership Units. The Stockholder acknowledges that there is no assurance that any exemption from the Securities Act will be available, or, if available, that such exemption will allow such Stockholder to transfer any or all of the Common Membership Units, in the amounts, or at the times such Stockholder might propose. The Stockholder acknowledges that at the present time Rule 144 promulgated under the Securities Act by the SEC (“Rule 144”) is not applicable to sales of the Common Membership Units because such units are not registered under Section 12 of the Exchange Act, and there is not publicly available the information concerning ev3 LLC specified in Rule 144. The Stockholder acknowledges that ev3 LLC is not presently under any obligation to register under Section 12 of the Exchange Act or to make publicly available the information specified in Rule 144 and that it may never be required to do so.

 

(e) Accredited Investor. The Stockholder is an “accredited investor” as such term is defined in Rule 501(a) promulgated under the Securities Act.

 

Section 4.4. Capacity. The Stockholder has full power and legal right to execute and deliver this Agreement and to perform such Stockholder’s obligations hereunder.

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF MTI

 

MTI represents and warrants to the Company, ev3 LLC and each of the Stockholders as follows:

 

Section 5.1. Organization. MTI is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

 

Section 5.2. Authority. The Board of Directors of MTI, including the Special Independent Committee, has authorized the