Document:

exv10w24

 

Exhibit 10.24

	 	 	 
	UBS

	 	UBS Financial Services Inc.

CLIENT’S AGREEMENT

	 	 	 	 	 	 	 	 	 
	FULL ACCOUNT TITLE
	 	BRANCH	 	ACCOUNT NUMBER	 	BROKER
	Cardiovascular Systems, Inc.
	 	CP	 	03041	 	2F

Introduction

1.     This Agreement contains the terms governing an account(s) in my name for the purchase or sale of
property. In the Agreement, “I,” “me” or “my” means each person who signs below. “You,” “your” or
“UBS Financial Services” means UBS Financial Services Inc., its successor firms, subsidiaries,
correspondents or affiliates, or employees. “Property” means all securities, including but not
limited to monies, stocks, options, bonds, notes, futures, contracts, commodities, certificates of
deposit and other obligations, contracts or securities.

Applicable Rules and Regulations

2.     All transactions for me shall be subject to the constitution, rules, regulations, bylaws,
interpretations, customs and usages of the exchange or market and its clearing house, if any, where
the transactions are executed. Such transactions are also subject, where applicable, to the
provisions, rules and regulations of the Securities and Exchange Commission, the Commodity Futures
Trading Commission, the Board of Governors of the Federal Reserve System in existence at this time
and as later amended and supplemented.

Amendment or Waiver

3.     I agree that you may change the terms of this agreement at any time upon prior written notice to
me. By continuing to accept the services offered by you, I indicate to you my acceptance of these
changes. If I do not accept the changes, I must notify you in writing of my refusal and my account
will be cancelled. However, I will remain liable for any outstanding Debits and/or Charges on my
account.

Transactions and Settlements

4.     All orders for the purchase and sale of any property will be given by me and executed with the
distinct understanding that an actual purchase or sale is intended and that it is my intention and
obligation in every case to deliver property to cover any and all sales and in the case of
purchases to receive and pay for property that I will do so upon your demand. In case you make a
short sale of any property at my direction or in case I fail to deliver to you any property which
you have sold at my direction, you are authorized to borrow the property necessary to enable you to
make delivery to the purchaser and I agree to be responsible for the cost or loss you may incur, or
the cost of obtaining the property if you are unable to borrow it. No settlement of my account(s)
may occur without your first receiving all property for which the account is short and all property
in which the account(s) are long being paid for in full and the property then delivered. You and
your correspondents are my constituted agents to complete all such transactions and are authorized
to make advances and expend monies as are required.

Marking Sell Orders Long or Short

5.     When placing with you any sell order for a short account, I will designate it as such and hereby
authorize you to mark the order as being “short.” When placing with you any order for a long
account, I will designate it as such and hereby authorize you to mark the order as being “long.”
Any sell order which I shall designate as being for a long account, is for property which is owned
by me and, if you are unable to deliver this property from any account(s), the placing of the order
will constitute my representation that the property will be delivered as required and that I will
reimburse you for any expense incurred.

Binding Order

6.     Any order which I give shall be binding upon me, and (my/our) personal representative until you
receive notice of my death. Such death and notice will not affect your right to take any action
which you could have taken if I had not died.

Lien Provisions

7.     All property held or purchased shall be subject to a lien in your favor for the discharge of all
my indebtedness and any other obligations that I may owe to you, however and whenever arising, and
may be held by you as security for the payment of any such obligations or indebtedness to you in
any account you maintain for me including any accounts in which I may have an interest. You are
authorized without notice to me whenever you deem it advisable from time to time (a) to transfer
interchangeably between any accounts I have with you any or all of the Property so held, without
regard to whether you have in your possession or subject to your control other Property of the same
kind and amount; (b) in

 

 

the usual course of business pledge, repledge, hypothecate (either for the amount I owe you or for
a greater or lesser sum) and lend the same to you as broker or to others from time to time,
separately or commingled with Property carried for other clients and you shall not be required to
deliver to me the same Property but only Property of the same kind and amount.

Payment of Indebtedness Upon Demand

8.     I shall at all times be liable for the payment of any amounts advanced, any debit balance or
other obligations owing in any of my account(s) with you and I shall be liable to you for any
deficiency remaining in any such account(s) in the event of the liquidation thereof, in whole or in
part, by you or by me. I shall make payment of any such debit balance, obligation, deficiency,
indebtedness, including interest and commissions, upon demand and any costs of collection,
including attorney’s fees, if incurred by you.

Interest Provision

9.     All amounts advanced and other balances due shall be charged interest in accordance with your
usual custom, which may include the compounding of interest, including any increases in rates which
reflect adjustments in the UBS Financial Services Base Loan Rate, and such other charges as you may
make to cover your facilities and extra services. Payment of all amounts advanced and other
balances due, together with the interest thereon, shall be made by me to you at any of your offices
which will act as my agent for the transmittal of such amounts and other balances due to you at New
York, New York.

I HAVE READ AND UNDERSTAND THE STATEMENT OF CREDIT PRACTICES DESCRIBING INTEREST CHARGES PRINTED ON
THE REVERSE SIDE.

Sub-Agents

10.   You may employ sub-brokers and shall be responsible only for reasonable care in their
selection. You may deal with market makers or members of any exchange known as specialists or
known as odd lot dealers and in the execution of my orders they may act as sub-brokers for me and
may also buy or sell the property for themselves as dealers for their own account.

Margin Requirements

11.   I agree to maintain in account(s) with you such positions and margin as required by all
applicable statutes, rules, regulations, procedures, and customs, or as you deem necessary or
advisable, and where applicable, to satisfy any and all margin calls issued in connection with such
business.

Liquidations and Covering Positions

12.   You shall have the right in accordance with your general policies regarding your margin
maintenance requirements in existence at the time or, if in your discretion you consider it
necessary for your protection to require additional collateral or the liquidation of any account of
mine, or, in the event a petition in bankruptcy, or for appointment of a receiver is filed by or
against me, or, an attachment is levied against the account(s) of mine, or, in the event of my
death; to sell any or all property in the account(s) of mine with you, whether carried individually
or jointly with others, to buy any or all property which may be short in such account(s), to cancel
any open orders and to close any or all outstanding contracts, all without demand for margin or
additional margin, other notice or sale or purchase, or other notice of advertisement. Any such
sales or purchases may be made at your discretion on any exchange or other market where such
business is usually transacted, or at public auction or private sale, and you may be the purchasers
for your own account. It is understood a prior demand, or call, or prior notice of the time and
place of such sale or purchase shall not be considered a waiver of your right to sell or buy
without demand or notice as herein provided. You shall not be liable to me in any way for any
adverse tax consequences resulting from the liquidation of any appreciated Property in any account.

Binding Notice of Agreement

13.   I expressly agree you will not be bound by any representation or agreement made by any of your
employees or agents which purports to affect or diminish your rights under this agreement.

Effect Of Law or Rule Change

14.   In the event any one or more of the provisions contained in this agreement shall for any reason
be held to be invalid, illegal, or unenforceable in any respect, such finding or holding shall only
affect the provision(s) involved and the remainder of this agreement and the application of all
other provisions shall not be affected.

Address

15.   My address below is and will continue to be a correct address until UBS Financial Services
receives written notice of any change. Notices and communications sent to me at such address will
constitute personal delivery to me, whether actually received or not.

PAGE 2

 

Client Representation

16.   I represent to have reached the age of majority according to the laws of the state of my
residence. I agree to abide by the rules of the regulatory agencies and your firm’s policy if I am
employed by any; exchange or any corporation of which any exchange owns a majority of the capital
stock; member or firm registered on any exchange, bank, trust company, insurance company; or any
company or individual dealing, either as broker or principal, in stocks, bonds, or any other
securities, commodities, or commercial paper. If during this agreement I become such an employee,
you will be notified. No one other than me has or will have an interest in any account(s) of mine
unless you are notified in writing by me.

Jurisdiction

17.   All transactions made for my account(s) shall be governed by the terms of this agreement. This
agreement and its enforcement shall be construed and governed by the laws of the State of New York,
and shall be binding upon my heirs, executors, administrators, successors, and assigns.

Credit Review

18.   An investigation of my personal and business credit may be made and, I may make written
request, within a reasonable time, for disclosure of the nature of the investigation.

ARBITRATION

19.   THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE. BY SIGNING AN ARBITRATION AGREEMENT
THE PARTIES AGREE AS FOLLOWS:

     •  ARBITRATION IS FINAL AND BINDING ON THE PARTIES. ALL PARTIES TO THIS AGREEMENT ARE
GIVING UP THE RIGHT TO SUE EACH OTHER IN COURT, INCLUDING THE RIGHT TO A TRIAL BY JURY, EXCEPT AS
PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN WHICH A CLAIM IS FILED.

     •  THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THE RIGHT TO
JURY TRIAL. ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY’S ABILITY TO HAVE A COURT
REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED.

     •  PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND DIFFERENT FROM COURT
PROCEEDINGS. THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS AND OTHER
DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN COURT PROCEEDINGS.

     •  THE ARBITRATOR’S AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING
AND ANY PARTY’S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY
LIMITED. THE ARBITRATORS DO NOT HAVE TO EXPLAIN THE REASON(S) FOR THEIR AWARD.

     •  THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR
ARE AFFILIATED WITH THE SECURITIES INDUSTRY.

     •  THE RULES OF SOME ARBITRATION FORUMS MAY IMPOSE TIME LIMITS FOR BRINGING A CLAIM IN
ARBITRATION. IN SOME CASES, A CLAIM THAT IS INELIGIBLE FOR ARBITRATION MAY BE BROUGHT IN COURT.

     •  THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS FILED, AND ANY AMENDMENTS
THERETO, SHALL BE INCORPORATED INTO THIS AGREEMENT.

     •  CLIENT AGREES, AND BY CARRYING AN ACCOUNT FOR YOU UBS FINANCIAL SERVICES INC. AGREES,
THAT ANY AND ALL CONTROVERSIES WHICH MAY ARISE BETWEEN YOU AND UBS FINANCIAL SERVICES INC.
CONCERNING ANY ACCOUNT(S), TRANSACTION, DISPUTE OR THE CONSTRUCTION, PERFORMANCE, OR BREACH OF THIS
OR ANY OTHER AGREEMENT, WHETHER ENTERED INTO PRIOR, ON OR SUBSEQUENT TO THE DATE HEREOF, SHALL BE
DETERMINED BY ARBITRATION. ANY ARBITRATION UNDER THIS AGREEMENT SHALL BE HELD UNDER AND PURSUANT
TO AND BE GOVERNED BY THE FEDERAL ARBITRATION ACT, AND SHALL BE CONDUCTED BEFORE AN ARBITRATION
PANEL CONVENED BY THE NEW YORK STOCK EXCHANGE, INC. OR THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC. CLIENT MAY ALSO SELECT ANY OTHER NATIONAL SECURITY

PAGE 3

 

EXCHANGE’S ARBITRATION FORUM UPON WHICH UBS FINANCIAL SERVICES INC. IS LEGALLY REQUIRED TO
ARBITRATE THE CONTROVERSY WITH CLIENT, INCLUDING, WHERE APPLICABLE, THE MUNICIPAL SECURITIES
RULEMAKING BOARD. SUCH ARBITRATION SHALL BE GOVERNED BY THE RULES OF THE ORGANIZATION CONVENING
THE PANEL. CLIENT MAY ELECT IN THE FIRST INSTANCE THE ARBITRATION FORUM, BUT IF CLIENT FAILS TO
MAKE SUCH ELECTION, BY REGISTERED LETTER OR TELEGRAM ADDRESSED TO UBS FINANCIAL SERVICES INC. AT
1200 HARBOR BOULEVARD, 10TH FLOOR, WEEHAWKEN, NJ 07086, ATTN: LEGAL DEPARTMENT, BEFORE THE
EXPIRATION OF FIVE DAYS (5) AFTER RECEIPT OF A WRITTEN REQUEST FROM UBS FINANCIAL SERVICES INC. TO
MAKE SUCH ELECTION, THEN UBS FINANCIAL SERVICES INC. MAY MAKE SUCH ELECTION. THE AWARD OF THE
ARBITRATORS, OR OF THE MAJORITY OF THEM, SHALL BE FINAL, AND JUDGMENT UPON THE AWARD RENDERED MAY
BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION.

     •  NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO ARBITRATION, NOR SEEK TO
ENFORCE ANY PRE-DISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A
PUTATIVE CLASS ACTION; WHO IS A MEMBER OF A PUTATIVE CLASS WHO HAS OPTED OUT OF THE CLASS WITH
RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION. UNTIL:

     (I)  THE CLASS CERTIFICATION IS DENIED; (II) THE CLASS IS DECERTIFIED; OR (III) THE CUSTOMER IS
EXCLUDED FROM THE CLASS BY THE COURT.

     •  SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF
ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.

     •  CLIENT EXPRESSLY AGREES THAT SERVICE OF PROCESS IN ANY ACTION SHALL BE SUFFICIENT IF
SERVED BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT YOUR LAST ADDRESS KNOWN TO UBS FINANCIAL
SERVICES INC.

CLIENT EXPRESSLY WAIVES ANY DEFENSE TO SERVICE OF PROCESS AS SET FORTH ABOVE.

Assignment

20.   This agreement may be assigned by you and will inure to the benefit of your successors and
assigns and you may transfer or assign the account(s) of mine to them, which shall be binding on me
and my personal representatives.

Accuracy of Reports

21.   ALL REPORTS OF EXECUTION OF ORDERS AND ACCOUNT STATEMENTS SHALL BE CONCLUSIVE IF NOT OBJECTED
TO BY ME IN WRITING IMMEDIATELY BY NOTICE SENT TO YOU BY REGISTERED MAIL.

Joint and Several Liability and Joint Accounts

22.   If more than one person signs this agreement, our obligations under this agreement shall be
joint and several. If more than one person signs this agreement, you may accept any orders and
instructions from each, and upon receipt of inconsistent instructions or a court order, may suspend
or terminate my account.

Liability for Costs of Collection

23.   I agree to pay you the reasonable costs and expenses of collection, including attorney’s fees,
for any unpaid Debits, Charges, and other amounts owing you.

Ineligible Accounts

24.   Your account cannot have margin if it is a UGMA/UTMA, ERISA Plan, Retirement, 529 Plan or
Estate account. Most managed programs cannot have margin.

Suitability

25.   Margin is not suitable for all clients. Please review UBS Financial Service’s Loan Disclosure
Statement carefully for information on the risks involved with using margin.

Loan Consent

26.   BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE THAT YOU AND YOUR SUCCESSORS AND ASSIGNS ARE
AUTHORIZED IN THE USUAL COURSE OF BUSINESS TO LEND, RELEND, HYPOTHECATE, REHYPOTHECATE, PLEDGE OR
REPLEDGE SEPARATELY OR TOGETHER WITH THE PROPERTY OF OTHERS EITHER TO YOURSELVES OR TO OTHERS ANY
PROPERTY WHICH YOU MAY BE CARRYING

PAGE 4

 

FOR ME ON MARGIN. THIS AUTHORIZATION SHALL APPLY TO ALL ACCOUNTS CARRIED BY YOU FOR ME AND SHALL
REMAIN IN FULL FORCE UNTIL WRITTEN NOTICE OF REVOCATION IS RECEIVED BY YOU.

IN RETURN FOR YOUR EXTENSION OR MAINTENANCE OF CREDIT IN CONNECTION WITH MY ACCOUNT, I ACKNOWLEDGE
THAT THE SECURITIES IN MY MARGIN ACCOUNT, TOGETHER WITH ALL ATTENDANT RIGHTS OF OWNERSHIP, MAY BE
LENT TO YOU OR LENT OUT TO OTHERS. IN CONNECTION WITH SUCH LOANS, YOU MAY RECEIVE AND RETAIN
CERTAIN BENEFITS TO WHICH I WILL NOT BE ENTITLED. IN CERTAIN CIRCUMSTANCES, SUCH LOANS MAY LIMIT,
IN WHOLE OR IN PART, MY ABILITY TO EXERCISE VOTING RIGHTS OF THE SECURITIES LENT.

BY SIGNING THIS AGREEMENT THE CUSTOMER ACKNOWLEDGES THAT:

     1.   THE SECURITIES IN THE CUSTOMER’S MARGIN ACCOUNT MAY BE LOANED TO THE BROKER OR LOANED OUT
TO OTHERS AND;

     2.   THAT THE CUSTOMER HAS RECEIVED A COPY OF THIS AGREEMENT. THIS AGREEMENT CONTAINS A
PRE-DISPUTE ARBITRATION CLAUSE AT PAGE 2 AT PARAGRAPH 19.

Do you intend to engage in “pattern day trading” as defined by NYSE Rule 431*

     o  Yes          þ  No

* “Day Trading” means purchasing and selling or selling and purchasing the same security in the
same day in a margin account. “Pattern day trading” means executing four or more day trades within
five business days if the number of day trades exceeds six percent of the total trades during that
period.

[CLIENT: BE SURE TO RETAIN YOUR COPY]

	 	 	 	 	 	 	 	 	 	 	 
	 
	 	/s/ James E. Flaherty	 	C.A.O.	 	3/24/08	 	 
	 	 	 
	 

	 	Signature of Principal (Name and Title if a corporation)
	 	 	 	Date	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 
	 

	 	(Signature of Second Party, If a Joint Account)
	 	 	 	Date	 	 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	No. of Street Address

	 	City or Town
	 	State
	 	Postal Code

PAGE 5

 

Re:  Account Number CP 03041 (the “Account”)

ADDENDUM TO CLIENT’S AGREEMENT

The attached “Client’s Agreement” sets forth certain terms related to the extension of credit with
respect to certain assets held through the above-referenced non-discretionary corporate cash
management Account with UBS Financial Services Inc. (the “Firm”). The party signing this Addendum
as Client where indicated below (the “Client”) understands and agrees that, notwithstanding
anything to the contrary contained in either the Client’s Agreement or the existing Master Account
Agreement applicable to the Account, as amended by the attached letter dated June 29, 2007 (the
“Account Agreement”), the terms of the Client’s Agreement supplement, but do not replace, the
existing Account Agreement as follows: (i) the terms of the Client’s Agreement (as amended from
time to time, in accordance with its terms) shall govern with respect to any matters, issues or
disputes related directly to, or arising directly from, the extension of credit and/or the status
of Client as borrower and the Firm as lender pursuant to the Client’s Agreement (e.g., matters
relating to the terms of any borrowing or extension of credit under the Client’s Agreement, the
indemnification of the Firm as a lender, and/or applicable margin requirements); and (ii) the terms
of the Account Agreement (as amended from time to time, in accordance with its terms) shall govern
with respect to all other matters (e.g., matters relating to the Firm’s trading authority and
activities and/or the indemnification of the Firm for the services it provides under the Account
Agreement).

Without limiting the generality of the foregoing, Client further understands and agrees that:

	(A)	 	If applicable, Client may continue to receive Financial Advisor Reports with respect to the
Account, as described in the sixth paragraph of the attached letter dated June 29, 2007 (the
“Updated Terms”), and Client’s receipt of such reports remains subject to the provisions of
the sixth paragraph of the Updated Terms.
	 
	(B)	 	Solely with respect to disputes arising out of the extension of credit and/or the status of
Client as borrower and the Firm as lender pursuant to the Client’s Agreement, the choice of
law provisions of Paragraph 17 of the Client’s Agreement and the arbitration provisions of
Paragraph 19 of the Client’s Agreement shall govern. With respect to any other disputes
relating to the Account, the “Applicable Law” and “Arbitration” sections of the Account
Agreement shall continue to govern.
	 
	(C)	 	If Client elected or in the future elects to adopt the “Money Market Addendum” described in
the Updated Terms, the Firm may continue to exercise the limited discretion described therein
with respect to the Account.
	 
	(D)	 	If Client elected or in the future elects to adopt the “Investment Policy Addendum” described
in the Updated Terms, the terms set forth in the Investment Policy Addendum shall continue to
govern with respect to the Account and any investment policy statement associated with the
Account.

 

 

Acknowledged and agreed this   24   day of      March          ,   2008  

Client’s Name: Cardiovascular Systems, Inc.

	 	 	 	 	 	 	 
	By:

	 	 	 	/s/ James E. Flaherty
	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	 	 	James E. Flaherty	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Title:

	 	 	 	C.A.O.	 	 
	 

	 	 
	 	 	 	 

 

 

Re:  Account Number CP 03041 (the “Account”)

SECOND ADDENDUM TO CLIENT’S AGREEMENT

     This Second Addendum (this “Second Addendum”) is attached to, incorporated by reference into
and is fully a part of the Client’s Agreement (as amended, supplemented or otherwise modified from
time to time, the “Client’s Agreement”) between UBS Financial Services Inc. (“UBS Financial
Services”) and the party signing this Second Addendum as Client where indicated below (the
“Client”) with respect to the Account. Any conflict between the terms of the Client’s Agreement
and this Second Addendum shall be resolved in accordance with the terms of this Second Addendum.
Defined terms used herein shall have the respective meanings set forth in the Client’s Agreement
unless otherwise defined in this Second Addendum.

     UBS Financial Services and the Client acknowledge and agree that:

	 	1.	 	The Client’s Agreement is amended by adding the following at the end of Section
12:

             “I expressly agree that your right to liquidate any account of mine if in your discretion you
consider it necessary for your protection to do so shall include, without limitation, the right to
liquidate any such account in the event of a breach by me of any provision of this or any other
agreement with you or your affiliates or as a result of my insolvency. I further agree that in the
event you determine to liquidate any property credited to any of my accounts, you shall, to the
fullest extent permitted by applicable law, have the right to do so in any manner, including,
without limitation, the sale of my property individually or in a block, for cash or for credit, in
a public or private sale, with or without public notice, through the use of sealed bids or
otherwise, with the aid of any advisor or agent who may be your affiliate or in any other manner as
you in your sole discretion shall choose. I acknowledge that the price you obtain for my property
in your chosen method of sale may be lower than might be otherwise obtained in another method of
sale, and I hereby agree that any such sale shall not be considered to be not commercially
reasonable solely because of such lower price. I understand that there may not be a liquid market
for the property in my accounts and that, as a result, the price received for my property upon your
liquidation may be substantially less than I paid for such property or than the last market value
available for it, if any. I further agree that any sale by you shall not be considered to be not
commercially reasonable solely because there are few (including only one) or no third parties who
submit bids or otherwise offer to buy my property. I understand that your sale of any of the
property in my accounts may be subject to various state and federal property and/or securities laws
and regulations, and that compliance with such laws and regulations may result in delays and/or a
lower price being obtained for my property. I agree that you shall have the right to restrict any
prospective purchasers to those who, in your sole discretion, you deem to be qualified. I
acknowledge that you shall have sole authority to determine, without limitation, the time, place,
method of advertisement and manner of sale and that you may delay or adjourn any such sale in your
sole discretion. I expressly authorize you to take any action with respect to my property as you
deem necessary or advisable to facilitate any liquidation, and I agree that you shall not be held
liable for taking or failing to take any such action, regardless if a greater price may have been
obtained for my property if such action was or was not taken, as applicable. I

 

 

hereby waive, to the fullest extent permitted by law, any legal right of appraisal, notice,
valuation, stay, extension, moratorium or redemption that I would otherwise have with respect to a
sale of my property.”

	 	2.	 	The Client’s Agreement is amended by adding the following at the end of Section 7:

        “I also hereby grant you a lien on my right to receive proceeds under any loan or
financing agreement entered into subsequent to the date hereof or under any issuance of
shares by me subsequent to the date hereof under an initial public offering I may undertake.
I agree to promptly notify you about the occurrence of or my intention to conduct any
transaction contemplated by the prior sentence.”

	 	3.	 	The Client’s Agreement is amended by adding the following as Section 27:

        “I understand, acknowledge and agree that you shall have no obligation to extend any
further credit to me.”

Acknowledged and agreed this   24   day of   March  , 2008.

	 	 	 	 	 
	 	
Client’s Name: Cardiovascular Systems, Inc.

 	 
	 	By:  	 	/s/ James E. Flaherty 	 
	 	Name:  	 	James E. Flaherty 	 
	 	Title:  	 	C.A.O. 	 
	 

4349129

 

 

	 	 	 
	 

	 	UBS Bank USA
	 

	 	c/o UBS Financial Services Inc.
	 

	 	1000 Harbor Boulevard, 7th Floor
	 

	 	Weehawken, NJ 07086
	 
	 	 
	 

	 	March 24, 2008

UBS Financial Services, Inc.

One North Wacker Drive

Suite 2500

Chicago, IL 60606

Dear Sir/Madam:

          Reference is hereby made to that certain Client Agreement (the “Credit Agreement”)
dated as of March 24, 2008 by and between UBS Financial Services, Inc. (the “Lender”) and
Cardiovascular Systems Inc (the “Borrower”) and any and all agreements and documents
related thereto, including without limitation, any and all pledge agreements, guaranties and/or
other similar agreements (any and all such agreements and documents, together with the Credit
Agreement, the “Loan Documents”).

          The Borrower wishes to enter into a credit facility with UBS Bank USA and/or one or more of
its affiliates (collectively “UBS”) and in connection therewith, wishes to pledge and grant
a security interest in a securities account with UBS Financial Services Inc. bearing account number
CP-03041-2F and any and all securities and other assets held therein (collectively, the
“Proposed Collateral”). The foregoing credit facility and pledge and grant to UBS of a
security interest in the Proposed Collateral is individually and collectively referred to herein as
the “Proposed Loan.”

          We understand that the consummation of all or certain aspects of the Proposed Loan could
potentially violate certain terms and conditions of the Loan Documents, unless the Borrower obtains
the Lender’s consent thereto and/or waiver thereof. Accordingly, by signing below and returning a
counterpart of this letter to UBS at the address above, you indicate: (a) your consent to the
Proposed Loan, including, without limitation, the pledge of and grant of a security interest in the
Proposed Collateral by the Borrower to UBS; (b) your waiver of any terms or conditions of the Loan
Documents which may restrict or limit the Borrower’s ability to (i) incur any debt, obligations or
liabilities other than those specified in the Loan Documents or (ii) pledge, assign, grant a
security interest in, or otherwise encumber any of the Proposed Collateral; (c) your
acknowledgement and agreement that the Proposed Collateral does not form any part of the collateral
securing the Borrower’s obligations under the Loan Documents; (d) your acknowledgement and
agreement that the Borrower is not in default under any of the Loan Documents and that there are no
existing or claimed conditions which with the passage of time would constitute a default by the
Company under the Loan Documents (including, without limitation, the Proposed Loan or, to the
extent that the Proposed Loan may constitute an event of default under the Loan Documents, your
waiver of any such event of default); and (e) your acknowledgement and confirmation that the Lender
has not heretofore assigned, transferred, sold, hypothecated or pledged the Lender’s interest in
the Loan Documents.

[Signature page follows]

 

 

	 	 	 	 	 
	 	UBS FINANCIAL SERVICES INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 
	The foregoing is hereby acknowledged and agreed this 24 day of March, 2008 	 	 	 	 
	 

	 	 	 	 	 	 
	 	LENDER:

Cardiovascular Systems, Inc.

 	 
	 	By:  	/s/ James E. Flaherty
 	 
	 	 	Name:  	James E. Flaherty 	 
	 	 	Title:  	C.A.O.exv10w25

 

Exhibit 10.25

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is by and between Cardiovascular Systems, Inc. (the
“Corporation”) and Larry Betterley (“Employee”).

RECITALS

A. The Corporation is engaged in the business of designing, developing, manufacturing and marketing
its Orbital Atherectomy System.

B. The Corporation, through its research, development and expenditure of funds, has developed
confidential and proprietary information, including trade secrets.

C. The Corporation understands from you that you are not subject to any agreement that would
restrict your ability to work for the Corporation, such as a non-compete agreement with a former
employer. If our understanding is incorrect, please contact James Flaherty immediately. It is the
Corporation’s expectation that you will not disclose or use the confidential or trade secret
information of any former employer or third party in connection with your employment with the
Corporation or to benefit the Corporation in any way.

D. Employee desires to commence his/her employment with the Corporation and the Corporation desires
to employ Employee under the terms and conditions of this Agreement.

E. During his/her employment, Employee will have access to the Corporation’s valuable Confidential
Information (as defined below), may contribute to Confidential Information and acknowledges that
the Corporation will suffer irreparable harm if Employee uses Confidential Information outside
his/her employment or makes unauthorized disclosure of Confidential Information to any third party.

AGREEMENT

In consideration of the above recitals and the promises set forth in the Agreement, the parties
agree as follows:

1. Nature and Capacity of Employment. The Corporation hereby agrees to employ Employee as
Chief Financial Officer, pursuant to the terms of this Agreement. Employee agrees to perform, on a
full time basis, the functions of this position, pursuant to the terms of this Agreement. The
employee will report to the CEO, Dave Martin.

2. Term of Employment. The term of employment under this Agreement shall commence on a
date on or about April 14, 2008 with the Employee’s execution of this
Agreement and continue until terminated by either party as provided for in Paragraph 8 hereunder.

 

 

3. Base Salary. The full-time base salary for this position currently is eight thousand
six hundred fifty three dollars and eighty four cents ($8,653.84), payable biweekly, equivalent of
two hundred twenty five thousand dollars ($225,000.00) per year, less required and authorized
deductions and withholdings. Employee will be eligible for a performance and salary review
approximately one year following the date of this Agreement.

4. Bonus. Employee will be eligible to participate in the Management Bonus Plan, payable
up to 40% of base salary annualized.

5. Restricted Stock Grant. Employee will be eligible to receive a restricted stock grant
in the amount of 75,000 shares of common stock. The restricted stock will vest over a three year
period, 1/3 of the total shares on each of the first three anniversaries of the date of grant
provided continuous employment with the Company through these dates. Further details of the
restricted stock grant will be provided in a separate RESTRICTED STOCK GRANT AGREEMENT. The
restricted stock grant may be made only by the Company’s Board of Directors and will be effective
only upon such approval. Management of the Company will present the proposed grant to the Board for
approval by the Board at its next regularly scheduled meeting.

6. Employee Benefits; Vacation. Employee will be entitled to participate in all retirement
plans and all other employee benefits and policies made available by the Corporation to its
full-time employees, to the extent Employee meets applicable eligibility requirements. All
payments or other benefits paid or payable to Employee under such employee benefit plans or
programs of the Corporation shall not be affected or modified by this Agreement and shall be in
addition to the annual base salary payable by the Corporation to Employee from time to time under
this Agreement. Employee will be eligible to accrue and use paid vacation pursuant to the
Corporation’s normal vacation accrual policies. Nothing in this Agreement is intended to or shall
in any way restrict the Corporation’s right to amend, modify or terminate any of its benefits or
benefit plans during Employee’s employment.

7. Best Efforts/Undertakings of Employee. During Employee’s employment with the
Corporation, Employee shall serve the Corporation faithfully and to the best of his/her ability and
shall devote his/her full business and professional time, energy, and diligence to the performance
of the duties assigned to him/her. Employee shall perform such duties for the Corporation (i) as
are customarily incident to Employee’s position and (ii) as may be assigned or delegated to
Employee from time to time by the Chief Employee Officer, or his/her designees. During Employee’s
employment with the Corporation, Employee shall not engage in any other business activity that
would conflict or interfere with his/her ability to perform his/her duties under this Agreement (to
include not providing any services to any individual, company or other business entity that is a
competitor, supplier,
or customer of the Corporation, except in connection with Employee’s employment with the
Corporation). Furthermore, Employee agrees to be subject to the Corporation’s

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control, rules,
regulations, policies and programs. Employee further agrees that he/she shall carry on all
business and commercial correspondence, publicity and advertising in the Corporation’s name and
he/she shall not enter into any contract on behalf of the Corporation except as expressly
authorized by the Corporation.

8. Termination of Employment.

     8.1 Employment At Will. Employee is employed “at-will.” That is, either Employee or
Corporation may terminate the employment relationship and this Agreement at any time, for any
reason, with or without cause, and with or without advance notice.

     8.2 Payment Upon Termination. Except as provided in Section 8.3, after the effective
date of termination, Employee shall not be entitled to any compensation, benefits, or payments
whatsoever except for compensation earned through his last day of employment and any accrued
benefits.

     8.3 Severance. If at any time after Employee has been continuously employed by the
Corporation for six months, Employee is terminated by the Corporation without Cause (as defined
below), or Employee terminates his employment for Good Reason (as defined below), and Employee
executes, returns and does not rescind a release of claims agreement in a form supplied by the
Corporation, then the Corporation shall: (i) pay Employee in a lump sum or at regular payroll
intervals, at the Corporation’s option (subject to the application of Code Section 409A as set
forth in Section 8.4 below), an amount equal to twelve (12) months of Employee’s then current base
salary; and (ii) continue to pay the Corporation’s ordinary share of premiums for twelve (12)
calendar months for Employee’s COBRA continuation coverage in the Corporation’s group medical,
dental, and life insurance plans (as applicable), provided Employee timely elects such continuation
coverage and timely pays Employee’s share of such premiums, if any.

	 	a.	 	Termination by the Corporation with Cause. For
purposes of this Section 8.3, “Cause” shall be defined as:

	 	(1)	 	Employee’s neglect of any of his material
duties or his failure to carry out reasonable directives from the
Chief Executive Officer or the Board of Directors or its designees;
	 
	 	(2)	 	Any willful or deliberate misconduct that
is injurious to the Corporation;
	 
	 	(3)	 	Any statement, representation or warranty
made to the Chief Executive Officer, the Board or its designees by
Employee that Employee knows is false or materially misleading; or

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	 	(4)	 	Employee’s commission of a felony, whether
or not against the Corporation and whether or not committed during
Employee’s employment.

	 	b.	 	Termination by Employee for Good Reason. For
purposes of this Section 8.3, “Good Reason” shall be defined as:

	 	(1)	 	The assignment to Employee, without
Employee’s written consent, of employment responsibilities that are
not of comparable responsibility and status to the employment
responsibilities described in this Agreement;
	 
	 	(2)	 	The Corporation’s reduction of Employee’s
base salary without Employee’s written consent, unless pursuant to a
cost reduction effort approved by the Board of Directors that also
results in the reduction of salaries of other executive officers; or
	 
	 	(3)	 	The Corporation’s failure to provide
Employee, without Employee’s written consent, those employee benefits
specifically required by this Agreement.

     8.4 IRC Section 409A. Notwithstanding the foregoing Section 8.3, if the severance
payments described in Section 8.3 are subject to the requirements of Internal Revenue Code Section
409A and the Corporation determines that Employee is a “specified employee” as defined in Code
Section 409A as of the date of the termination, such payments shall not be paid or commence earlier
than the date that is six months after the termination, but shall be paid or commence during the
calendar year following the year in which the termination occurs and within 30 days of the earliest
possible date permitted under Code Section 409A.

9. Return of Property. Immediately upon termination for any reason (or at such earlier
time as requested by the Corporation), Employee shall deliver to the Corporation all of its
property, including but not limited to all work in progress, research data, equipment, models,
prototypes, originals and copies of documents and software, customer information and lists,
financial information, and all other material in his/her possession or control that belongs to the
Corporation or its customers or contains Confidential Information.

10. Confidential Information. “Confidential Information” means any information that
Employee learns or develops or has learned or developed during the course of employment that
derives independent economic value from being not generally known or readily ascertainable by other
persons who could obtain economic value from its
disclosure or use, and includes, but is not limited to, trade secrets, and may relate to such
matters as research and development, manufacturing processes, management systems and techniques of
sales and marketing.

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Employee agrees not to directly or indirectly use or disclose any Confidential Information for the
benefit of anyone other than the Corporation either during the course of employment or after the
termination of employment. For purposes hereof, Confidential Information shall also include any
information beneficial to the Corporation or its subsidiaries which is not generally known and
shall include, but is not limited to, methods of research and testing, customer lists, vendor lists
and financial information. Employee recognizes that the Confidential Information constitutes a
valuable asset of the Corporation and hereby agrees to act in such a manner as to prevent its
disclosure and use by any person unless such use is for the benefit of the Corporation. Employee’s
obligations under this paragraph are unconditional and shall not be excused by any conduct on the
part of the Corporation, except prior voluntary disclosure to the general public by the Corporation
of the information.

11. Inventions. “Invention” shall mean any invention, discovery, design, improvement,
business method, or idea, whether patentable or copyrightable or not, and whether or not shown or
described in writing or actually or constructively reduced to practice. Employee shall promptly
and fully disclose in writing to the Corporation, and will hold in trust for the Corporation’s sole
right and benefit, any Invention that Employee, during the period of employment and for two (2)
years thereafter, makes, conceives, or reduces to practice or causes to be made, conceived, or
reduced to practice, either alone or in conjunction with others, that:

(1) Relates to any subject matter pertaining to Employee’s employment; or

(2) Relates to or is directly or indirectly connected with the Corporation’s business,
products, processes, or Confidential Information; or

(3) Involves the use of any of the Corporation’s time, material, or facility.

Employee shall keep accurate, complete, and timely records for such Inventions, which records shall
be the Corporation’s property. Employee hereby assigns to the Corporation all of Employee’s right,
title, and interest in and to all such Inventions and, upon the Corporation’s request, Employee
shall execute, verify, and deliver to the Corporation such documents, including without limitation,
assignments, affidavits, declarations, and patent applications, and shall perform such other acts,
including, without limitation, appearing as a witness in any action brought in connection with this
Agreement that is necessary to enable the Corporation to obtain the sole right, title, and benefit
to all such Inventions. Employee agrees, and is hereby notified, that the above agreement to
assign Inventions to the Corporation does not apply to any Invention for which no equipment,
supplies, facility, or Confidential Information of the Corporation’s was used, which was developed
entirely on Employee’s own time, and (a) which does not relate: (i) directly to the Corporation’s
business; or (ii) to the Corporation’s actual or demonstrably anticipated
research or development; or (b) which does not result from any work performed by Employee for the
Corporation. Employee has disclosed and identified in the attached Exhibit A entitled
“Inventions and Developments Prior to Employment with the

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Corporation” all of the Inventions in
which Employee possesses any right, title, or interest prior to his/her employment with the
Corporation or execution of this Agreement and which are not subject to this Agreement’s terms.

12. Copyrights. Employee agrees that he/she is employed by the Corporation and that any
computer, software, and/or network (including internet) applications, designs, documentation, or
other work of authorship (hereinafter referred to as “Works”) prepared by Employee for the benefit
of the Corporation or its customers or prepared at the request of the Corporation or its customers
(as well as Employee’s contributions to any other Works relating to the Corporation), shall each be
considered “work made for hire” within the meaning of U.S. Copyright law and that all such Works
shall belong to the Corporation. To the extent that any such Works cannot be considered a “work
made for hire,” Employee agrees to disclose and assign, and hereby does assign, to the Corporation
all right, title, and interest in and to such Works, and agrees to assist the Corporation by
executing any such documents or applications as may be useful to evidence such ownership of such
Works. To the extent such Works are based on preexisting work in which Employee has an ownership
interest, Employee grants the Corporation all right, title, and interest in such Works free and
clear of any claim based on the preexisting work. To the extent that any Works cannot be so
assigned under any applicable law, Employee hereby grants an exclusive, perpetual, fully paid,
transferable, sublicenseable, irrevocable, worldwide right and license to use, display, perform,
copy, modify, distribute, sell, create derivative works of, and otherwise exploit the Works.

13. Non-Competition. “Corporate Product” means any product or service, (including any
component thereof and any research to develop information useful in connection with a product or
service) that is being designed, developed, manufactured, marketed or sold by the Corporation or
with respect to which the Corporation has acquired Confidential Information which it intends to use
in the design, development, manufacture, marketing or sale of a product or service.

“Competitive Product” means any product or service (including any components thereof and any
research to develop information useful in connection with the product or service) that is being
designed, developed, manufactured, marketed or sold by anyone other than the Corporation, and is of
the same general type, performs similar functions, or is used for the same purposes as a Corporate
Product which Employee worked on or assisted the Corporation in marketing or about which Employee
received or had bad knowledge of Confidential Information.

Employee agrees that, during employment and for one (1) year following termination of employment
with the Corporation, whether voluntary or involuntary, Employee will not, directly or indirectly,
attempt to or render services (as an employee, director, officer, agent, partner of or consultant
to, a stockholder of (except a stockholder of a public company in which Employee owns less than
five percent (5%) of the issued and
outstanding capital stock of such company) or otherwise) to any person or entity in connection with
the design, development manufacture, marketing or sale of a Competitive Product that is sold or
intended for use or sale in any geographic area in

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which the Corporation actively markets a
Corporate Product, or intends to actively market a Corporate Product of the same general type or
function.

Employee understands and acknowledges that, at the present time, (i) Corporate Products include the
products currently being sold by the Corporation, and (ii) the geographic market in which the
Corporation is actively marketing its Corporate Products is the United States of America. Employee
understands and acknowledges that the foregoing description of Corporate Products and geographic
market may change, and the provisions of this section shall apply to the Corporate Products and
geographic market of the Corporation in effect upon the termination of Employee’s employment with
the Corporation.

14. Miscellaneous.

     14.1 Survival of Restrictions. The parties agree that the obligations and
restrictions contained in Paragraphs 9, 10, 11, 12 and 13 of this Agreement shall survive the
termination of this Agreement and Employee’s employment and shall apply no matter how Employee’s
employment terminates and regardless of whether his/her termination is voluntary or involuntary.
The parties also agree that the obligations and restrictions contained in Section 8.3 of this
Agreement shall survive the termination of this Agreement and Employee’s employment.

     14.2 Remedies. The parties acknowledge and agree that, if Employee breaches or
threatens to breach the terms of Paragraphs 9, 10, 11, 12 and 13 of this Agreement, the Corporation
shall be entitled as a matter of right to injunctive relief and reasonable attorneys’ fees, costs,
and expenses, in addition to any other remedies available at law or equity. The parties further
agree that, if Employee breaches any of the restrictions contained in Paragraph 13 of this
Agreement, then the time period for such restriction shall be extended by the length of time that
Employee was in breach.

     14.3 Understandings. Employee acknowledges and agrees that Paragraphs 9, 10, 11, 12
and 13 of this Agreement are reasonable and necessary in order to allow Corporation to protect its
valuable confidential and proprietary information which comprise trade secrets of Corporation.
Employee further acknowledges and agrees that Paragraphs 9, 10, 11, 12 and 13 of this Agreement
will not prevent him/her from earning a living. Employee agrees that the restrictions and
obligations in Agreement are reasonable and necessary to protect the Corporation’s business.

     14.4 Integration. This agreement embodies the entire agreement and understanding
among the parties relative to subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter.

     14.5 Applicable Law. This Agreement and the rights of the parties shall be governed
by and construed and enforced in accordance with the laws of the state of
Minnesota. The venue for any action hereunder shall be in the state of Minnesota, whether or not
such venue is or subsequently becomes inconvenient, and the parties

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consent to the jurisdiction of
the courts of the state of Minnesota, County of Hennepin, and the U.S. District Court, District of
Minnesota.

     14.6 Counterparts. This Agreement may be executed in counterparts and as so executed
shall constitute one agreement binding on the parties hereto.

     14.7 Successor and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Corporation and its successors and assigns. The Corporation may assign this
Agreement without the consent of Employee. The services to be performed by Employee are personal
and are not assignable by Employee.

     14.8 Captions. The captions set forth in this Agreement are for the convenience only
and shall not be considered as part of this Agreement or as in any way limiting or amplifying the
terms and conditions hereof.

     14.9 No Conflicting Obligations. Employee represents and warrants to the Corporation
that he/she is not under, or bound to be under in the future, any obligation to any person or
entity that is or would be inconsistent or in conflict with this Agreement or would prevent, limit,
or impair in any way the performance by him/her of obligations hereunder, including but not limited
to any duties owed to any former employers not to compete or use or disclose confidential
information.

     14.10 Waivers. The failure of a party to require the performance or satisfaction of
any term or obligation of this Agreement, or the waiver by a party of any breach of this Agreement,
shall not prevent subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.

     14.11 Severability. In the event that any provision hereof is held invalid or
unenforceable by a court of competent jurisdiction, the Corporation and Employee agree that that
part should be modified by the court to make it enforceable to the maximum extent possible. If the
part cannot be modified, then that part may be severed and the other parts of this Agreement shall
remain enforceable.

     14.12 Notices. Any notices given hereunder shall be in writing and delivered or
mailed by registered or certified mail, return receipt requested:

          (a) If to the Corporation: The Corporation’s principal place of business, addressed to the
attention of the Chief Executive Officer.

          (b) If to Employee: The Employee’s last known address on record with the Corporation.

NOW, THEREFORE, with the intention of being bound hereby, the parties have executed this Agreement
as of the dates set forth below.

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	CARDIOVASCULAR SYSTEMS, INC.

 	 	 
	By:  	/s/ James E. Flaherty 	 	Date: 4/7/08 
	 	James E. Flaherty 	 	 
	 	Its Chief Administrative Officer 	 	 
	 
	EMPLOYEE:

 	 	 
	/s/ Laurence L. Betterley 	 	Date: 4/7/08 
	Larry Betterley 	 	 
	 	 	 

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EXHIBIT A

INVENTIONS AND DEVELOPMENTS PRIOR TO EMPLOYMENT

WITH THE CORPORATION

In the space provided below, please disclose and identify all of the Inventions in which you
currently possess any right, title, or interest and which you believe are not subject to the terms
and conditions of the attached Employment Agreement.

     If none, please write NONE.

NONE. 

 

 

 

 

 

     I verify that the information I have written above is truthful and complete.

	 	 	 	 	 
	 	 	 
	Date: 4/7/08 	Signed:  	/s/ Laurence L. Betterley
 	 
	 	 	Print Name:  	Larry Betterley  	 
	 	 	 	 
	 

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