Document:

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Exhibit 4.2

EXECUTION COPY

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

     THIS AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (the “Agreement”) is made as of the
16th day of April, 2003 by and between ST. FRANCIS MEDICAL TECHNOLOGIES, INC., a
Delaware corporation (the “Company”), and the investors listed on Schedule A hereto, each
of which is herein referred to as an “Investor.”

RECITALS

     A. The Company and certain holders of the Company’s Series A Preferred Stock and Series B
Preferred Stock entered into a certain Amended and Restated Investors’ Rights Agreement as of
October 6, 2000.

     B. The Company and the holders of the Company’s Series C Preferred Stock entered into a Series
C Preferred Stock Purchase Agreement dated as of the date hereof (the “Purchase Agreement”).

     C. A condition to the holders of the Company’s Series C Preferred Stock’s obligations under
the Purchase Agreement is that the Company, the holders of shares of Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock (the “Series Holders”) enter into this
Agreement in order to provide the Series Holders registration rights, information rights, rights of
first refusal, and other rights pursuant to this Agreement.

     NOW, THEREFORE, the parties hereby agree that, effective upon the Closing, as defined in the
Purchase Agreement, the Amended and Restated Investors’ Rights Agreement dated as of October 6,
2000 is hereby amended and restated to read in its entirety as set forth herein:

     1. Registration Rights. The Company covenants and agrees as follows:

          1.1 Definitions. For purposes of this Section 1:

               (a) The terms “register,” “registered,” and “registration” refer to a registration effected by
preparing and filing a registration statement or similar document in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such registration statement or document;

               (b) The term “Registrable Securities” means (i) the shares of Common Stock issuable or issued
upon conversion of the Series A Preferred Stock, the Series B Preferred Stock and Series C
Preferred Stock and (ii) any Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, such Preferred

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Stock or
Common Stock, excluding in all cases, however, any Registrable Securities sold by a person in a
transaction in which such person’s registration rights are not assigned;

               (c) The number of shares of “Registrable Securities then outstanding” shall be determined by
the number of shares of Common Stock outstanding which are, and the number of shares of Common
Stock issuable pursuant to then exercisable or convertible securities which are exercisable or
convertible into, Registrable Securities;

               (d) The term “Holder” means any person owning or having the right to acquire Registrable
Securities or any assignee thereof in accordance with Section 1.13 hereof; and

               (e) The term “Form S-3” means such form under the Securities Act as in effect on the date
hereof or any registration form under the Securities Act subsequently adopted by the SEC in lieu of
Form S-3 which permits inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.

               (f) The term “Securities Act” means the Securities Act of 1933, as amended.

               (g) The term “Exchange Act” means the Securities and Exchange Act of 1934, as amended.

               (h) The term “SEC” means the United States Securities and Exchange Commission.

          1.2 Request for Registration.

               (a) If the Company shall receive at any time after the earlier of (i) the fourth anniversary
of the date hereof or (ii) six months after the effective date (the “Effective Date”) of the first
registration statement for a public offering of securities of the Company (other than a
registration statement relating either to the sale of securities to employees of the Company
pursuant to a stock option, stock purchase or similar plan or a SEC Rule 145 transaction), a
written request from the Holders of at least 50% of the Registrable Securities then outstanding
that the Company file a registration statement under the Securities Act covering the registration
of (i) in the case of an initial registered public offering, at least 20% of the Registrable
Securities then outstanding (or a lesser percent if the anticipated aggregate offering price, net
of underwriting discounts and commission, would exceed $10,000,000) or (ii) in the case of any
demand after the first registered public offering, any number of Registrable Securities, then the
Company shall, within 10 days of the receipt thereof, give written notice of such request to all
Holders and shall, subject to the limitations of subsection 1.2(b), file as soon as practicable,
and in any event within 90 days of the receipt of such request, a registration statement under the
Securities Act covering all Registrable Securities which the Holders request to be registered
within 20 days of the mailing of such notice by the Company in accordance with Section 5.5.

               (b) If the Holders initiating the registration request hereunder (“Initiating Holders”) intend
to distribute the Registrable Securities covered by their request by means of an

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underwriting, they
shall so advise the Company as a part of their request made pursuant to this Section 1.2 and the
Company shall include such information in the written notice referred to in subsection 1.2(a). In
such event, the right of any Holder to include such Holder’s Registrable
Securities in such registration shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders and consented to by the Company
(which consent shall not be unreasonably withheld). Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the Company shall so advise
all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and
the number of shares of Registrable Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating Holders, in proportion (as nearly as
practicable) to the amount of Registrable Securities of the Company owned by each Holder; provided,
however, that the number of shares of Registrable Securities to be included in such underwriting
shall not be reduced unless all other Securities are first entirely excluded from the underwriting.

               (c) The Company is obligated to effect only three such registrations pursuant to this Section
1.2; provided, however, that the Company shall not be obligated to effect a registration pursuant
to this Section 1.2 if within the six months immediately preceding a request hereunder the Company
has effected a demand registration under this Section 1.2.

               (d) Notwithstanding the foregoing, if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 1.2 a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors of the Company it would
be seriously detrimental to the Company and its stockholders for such registration statement to be
filed and it is therefore essential to defer the filing of such registration statement, the Company
shall have the right to defer such filing for a period of not more than 90 days after receipt of
the request of the Initiating Holders; provided, however, that the Company may not utilize this
right more than once in any 12-month period.

          1.3 Company Registration. If (but without any obligation to do so) the Company
proposes to register (including for this purpose a registration effected by the Company for
stockholders other than the Holders) any of its stock or other securities under the Securities Act
in connection with the public offering of such securities solely for cash (other than the Company’s
first such registration and other than a registration relating solely to the sale of securities to
participants in a Company stock plan), or a registration on any form that does not permit secondary
sales, the Company shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within 20 days after mailing of such
notice by the Company in accordance with Section 5.5, the Company shall, subject to the provisions
of Section 1.8, cause to be registered under the Securities Act all of the Registrable Securities
that each such Holder has requested to be registered.

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          1.4 Obligations of the Company. Whenever required under this Section 1 to effect the
registration of any Registrable Securities, the Company shall, as expeditiously as reasonably
possible:

               (a) Prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use its reasonable best efforts to cause such registration statement to become
effective, and, upon the request of the Holders of a majority of the Registrable Securities
registered thereunder, keep such registration statement effective for up to 120 days, provided,
however, that in the case of any registration of Registrable Securities on Form S-3 or a
comparable or successor form which are intended to be offered on a continuous or delayed basis,
such 120 day period shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, but not longer than 180 days.

               (b) Prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement for up to 120 days, provided, however, that
in the case of any registration of Registrable Securities on Form S-3 or a comparable or successor
form which are intended to be offered on a continuous or delayed basis, such 120 day period shall
be extended, if necessary, to keep the registration statement effective until all such Registrable
Securities are sold, but not longer than 180 days.

               (c) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such other documents as
they may reasonably request in order to facilitate the disposition of Registrable Securities owned
by them.

               (d) Use its reasonable best efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.

               (e) In the event of any underwritten public offering, enter into and perform its obligations
under an underwriting agreement, in usual and customary form, with the managing underwriter of such
offering. Each Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

               (f) Notify each Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such registration statement,
as then in effect, includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing.

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               (g) Furnish, at the request of any Holder requesting registration of Registrable Securities
pursuant to this Section 1, on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this Section 1, if such
securities are being sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to underwriters in an
underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Holders requesting registration of Registrable
Securities.

               (h) Cause all such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange on which similar securities issued by the Company are then listed.

               (i) permit any Holder, which Holder, in the sole and exclusive judgment of such, exercised in
good faith, might be deemed to be a controlling person of the Company, to participate in good faith
in the preparation of such registration or comparable statement (at such Holders’ expense) and to
require the insertion therein of material, furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be included.

          1.5 Furnish Information. It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 1.1, 1.2 and 1.12 that the selling Holders shall
furnish to the Company such information regarding themselves, the Registrable Securities held by
them, and the intended method of disposition of such securities as shall be required to effect the
registration of the Registrable Securities.

          1.6 Expenses of Demand Registration. All reasonable expenses, other than underwriting
discounts and commissions, incurred in connection with registrations, filings or qualifications
pursuant to Section 1.2, including (without limitation) all registration, filing and qualification
fees, primers’ and accounting fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for the selling Holders selected by the Selling
Holders, shall be borne by the Company; provided, however, that the Company shall not be required
to pay for any expenses of any registration proceeding begun pursuant to Section 1.2 if the
registration request is subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all participating Holders shall bear such
expenses), unless the Holders of a majority of the Registrable Securities agree to forfeit their
right to one demand registration pursuant to Section 1.2; provided further, however, that if at the
time of such withdrawal, the Holders have learned of a material adverse change in the condition,
business or prospects of the Company from that known to the Holders at the time of their request,
then the Holders shall not be required to pay any of such expenses and shall retain their rights
pursuant to Section 1.2.

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          1.7 Expenses of Company Registration. The Company shall bear and pay all expenses
incurred in connection with any registration, filing or qualification of Registrable Securities
with respect to the first three registrations pursuant to Section 1.3 for each Holder (which right
may be assigned as provided in Section 1.13), including (without limitation) all registration,
filing and qualification fees, primers’ and accounting fees relating or apportionable thereto and
the reasonable fees and disbursements of one counsel for the selling Holders selected by the
Selling Holders but excluding underwriting discounts and commissions relating to Registrable
Securities.

          1.8 Underwriting Requirements. In connection with any offering involving an
underwriting of shares of the Company’s capital stock being issued by the Company, the Company
shall not be required under Section 1.3 to include any of the Holders’ securities in such
underwriting unless they accept the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it, and then only in such quantity as will not, in the opinion of
the underwriters, jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that the underwriters
reasonably believe compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including Registrable Securities,
which the underwriters believe will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the Holders and other selling stockholders according to
the total amount of securities entitled to be included therein owned by each Holder and selling
stockholder or in such other proportions as shall mutually be agreed to by such Holders and selling
stockholders) but in no event, except in connection with the Company’s initial public offering,
shall (i) the amount of securities of the selling Holders included in the Offering be reduced below
20% of the total amount of securities included in such offering and (ii) any shares being sold by a
Holder or selling stockholder exercising a demand registration right similar to that granted in
Section 1.2 be excluded from such offering.

          1.9 Delay of Registration. No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result of any controversy
that might arise with respect to the interpretation or implementation of this Section 1.

          1.10 Indemnification. In the event any Registrable Securities are included in a
registration statement under this Section 1:

               (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder,
the partners, officers and directors of each Holder, legal counsel and accountants for each Holder,
any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations (collectively, a “Violation”): (i)
any untrue statement or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to state therein a
material

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fact required to be stated therein, or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law; and the Company will reimburse each such Holder,
officer or director, underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement contained in this
subsection 1.10(a) shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for
any such loss, claim, damage, liability or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder, officer, director,
underwriter or controlling person.

               (b) To the extent permitted by law, each selling Holder, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company within the meaning
of the Securities Act, any underwriter and any other Holder selling securities in such registration
statement or any of its directors or officers or any person who controls such Holder, against any
losses, claims, damages or liabilities (joint or several) to which the Company or any such
director, officer, controlling person, or underwriter or controlling person, or other such Holder
or director, officer or controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection with such
registration; and each such Holder will reimburse any legal or other expenses reasonably incurred
by the Company or any such director, officer, controlling person, underwriter or controlling
person, other Holder, officer, director, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 1.10(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected without the consent of
the Holder, which consent shall not be unreasonably withheld; provided, that, in no event shall any
indemnity under this subsection 1.10(b) exceed the net proceeds from the offering received by such
Holder.

               (c) Promptly after receipt by an indemnified party under this Section 1.10 of notice of the
commencement of any action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this Section 1.10,
deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential differing interests between such
indemnified party

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and any other party represented by such counsel in such proceeding. The failure
to deliver written
notice to the indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party
of any liability to the indemnified party under this Section 1.10, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 1.10.

               (d) If the indemnification provided for in this Section 1.10 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim,
damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage or expense as well as any other relevant equitable considerations;
provided, that in no event shall contribution by a Holder under this Section 1.10(d) exceed the net
proceeds from the offering received by such Holder, except in the case of willful conduct by such
Holder. The relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement.

               (e) Notwithstanding the foregoing Section 1.10(d), to the extent that the provisions on
indemnification and contribution contained in an underwriting agreement entered into in connection
with an underwritten public offering are in conflict with the foregoing Section 1.10(d), the
provisions in such underwriting agreement shall control.

               (f) The obligations of the Company and Holders under this Section 1.10 shall survive the
completion of any offering of Registrable Securities in a registration statement under this Section
1, and otherwise.

          1.11 Reports Under Securities Exchange Act of 1934. With a view to making available
to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the
public without registration or pursuant to a registration on Form S-3, the Company agrees to:

               (a) make and keep public information available, as those terms are understood and defined in
SEC Rule 144, at all times after 90 days after the effective date of the first registration
statement filed by the Company for the offering of its securities to the general public;

               (b) take such action, including the voluntary registration of its Common Stock under section
12 of the Exchange Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of
their Registrable Securities, such action to be taken as soon as practicable after the end of the
fiscal year in which the first registration statement filed by the Company for the offering of its
securities to the general public is declared effective;

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               (c) file with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and

               (d) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has complied with the reporting
requirements of SEC Rule 144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company), the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company and (iii) such other information as may be reasonably requested
in availing any Holder of any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.

          1.12 Form S-3 Registration. In case the Company shall receive from any Holder or
Holders a written request or requests that the Company effect a registration on Form S-3 and any
related qualification or compliance with respect to all or a part of the Registrable Securities
owned by such Holder or Holders, the Company will:

               (a) promptly give written notice of the proposed registration, and any related qualification
or compliance, to all other Holders; and

               (b) use reasonable best efforts to effect, as soon as practicable, such registration and all
such qualifications and compliances as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as
are specified in such request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a written request given
within 15 days after receipt of such written notice from the Company; provided, however, that the
Company shall not be obligated to effect any such registration, qualification or compliance
pursuant to this Section 1.12: (i) if Form S-3 is not available for such offering by the Holders;
(ii) if the Holders, together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such other securities
(if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of
less than $5,000,000; (iii) if the Company shall furnish to the Holders a certificate signed by the
President of the Company stating that in the good faith judgment of the Board of Directors of the
Company it would be seriously detrimental to the Company and its stockholders for such Form S-3
Registration to be effected at such time, in which event the Company shall have the right to defer
the filing of the Form S-3 Registration Statement for a period of not more than 90 days after
receipt of the request of the Holder or Holders under this Section 1.12; provided, however, that
the Company shall not utilize this right more than once in any 12-month period; (iv) if the Company
has, within the twelve-month period preceding the date of such request, already effected a
registration on Form S-3 for such Holders pursuant to this Section 1.12 and other similar
provisions granting rights to registration on Form S-3; or (v) in any particular jurisdiction in
which the Company would be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance.

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               (c) Subject to the foregoing, the Company shall file a registration statement covering the
Registrable Securities and other securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Holders. The Company shall pay all expenses (other
than underwriting discounts and commissions) incurred in connection with the first three
registrations requested pursuant to Section 1.12, including (without limitation) all registration,
filing, qualification, printer’s and accounting fees and the reasonable fees and disbursements of
one counsel for all selling Holders selected by the selling Holders and counsel for the Company.
All expenses incurred in additional registrations pursuant to this Section 1.12 shall be borne pro
rata by the Holder or Holders participating in the Form S-3 Registration. Registrations effected
pursuant to this Section 1.12 shall not be counted as demands for registration effected pursuant to
Section 1.2.

          1.13 Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Section 1 may be assigned by a Holder to a transferee which
(i) is a subsidiary, parent, partner, limited partner, retired partner, shareholder or other
affiliate of the Holder or (ii) after such transfer such transferee holds all, or at least 250,000
shares, of such Holder’s Registrable Securities; provided, in each case, the Company is, within a
reasonable time after such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such registration rights are being
assigned; and provided, further, that such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.

          1.14 Limitations on Subsequent Registration Rights. From and after the date of this
Agreement, the Company shall not, without the prior written consent of the Holders of a majority of
the outstanding Registrable Securities, enter into any agreement with any holder or prospective
holder of any securities of the Company which would allow such holder or prospective holder (a) to
include such securities in any registration filed under Section 1.3 hereof unless, under the terms
of such agreement, such holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of such holder’s securities will not reduce the
amount of the Registrable Securities of the Holders which is included or (b) to make a demand
registration of their securities.

          1.15 Amendment of Registration Rights. Any provision of this Section 1 may be amended
and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and the holders of at
least a majority of the Registrable Securities then outstanding. Any amendment or waiver effected
in accordance with this paragraph shall be binding upon each holder of any securities purchased
under this Agreement at the time outstanding (including securities into which such securities are
convertible), each future holder of all such securities and the Company.

          1.16 Termination of Registration Rights. The Company’s obligations pursuant to this
Section 1 (other than its obligations pursuant to Section 1.11) shall terminate as to any Holder of
Registrable Securities on the earlier of (i) when the Holder (and any affiliate of the Holder with
whom such Holder must aggregate its sales under Rule 144) can sell all of such Holder’s shares
without registration pursuant to Rule 144 under the Securities Act during any 90-day period or (ii)
on the third anniversary of the closing of the Company’s sale of its Common Stock in a bona

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fide, firm commitment underwriting pursuant to a registration statement on Form S-1 under the
Securities Act which results in gross offering proceeds of at least $20,000,000 at a price of not
less than $5.25 per share,(as adjusted for any stock splits, stock dividends, recapitalizations and
the like) (a “Qualified Public Offering”).

     2. Covenants.

          2.1 Delivery of Financial Statements.

               (a) The Company shall deliver to each holder of more than 750,000 shares of Registrable
Securities (“Major Investor”):

                    (i) as soon as practicable, but in any event within 90 days after the end of each fiscal year
of the Company, a statement of operations for such fiscal year, a balance sheet of the Company as
of the end of such year, and a statement of cash flows for such year, such year-end financial
reports to be in reasonable detail, prepared in accordance with generally accepted accounting
principles (“GAAP”), and audited and certified by independent public accountants of nationally
recognized standing selected by the Company;

                    (ii) as soon as practicable after the end of each month but in any event within 30 days of the
end of each month, an unaudited statement of operations, statement of cash flows and balance sheet
for and as of the end of such month, in reasonable detail; such monthly statements shall also
contain the foregoing information on a year-to-date basis and shall also compare actual performance
to budget; and

                    (iii) not less than 30 days prior to the close of each fiscal year, a comprehensive business
plan and operating budget for the next fiscal year forecasting the Company’s revenues, expenses and
cash position, prepared on a monthly basis, including balance sheets and statements of operations
and statements of cash flow for such months and, promptly following approval by the Board of
Directors, any other comprehensive operating budgets or revised such budgets prepared by the
Company.

               (b) For purposes of determining the 750,000 share holding requirements of this Section 2.1 and
Section 2.2 only, each Major Investor shall be deemed to hold the shares of Common Stock and
Preferred Stock held by any affiliate of such Major Investor.

          2.2 Inspection. The Company shall permit each Major Investor, at such Major
Investor’s expense, to visit and inspect the Company’s properties, to examine its books of account
and records and to discuss the Company’s affairs, finances and accounts with its officers, all at
such reasonable times as may be requested by Major Investor; provided, however, that the Company
shall not be obligated pursuant to this Section 2.2 to provide access to any information which it
reasonably considers to be a trade secret or similar confidential information. The inspection
privileges set forth in this Section 2.2 shall not be assignable.

          2.3 Termination of Covenants. The covenants set forth in Section 2.1 and 2.2 hereof
shall terminate and be of no further force or effect when the sale of securities pursuant to a

- 11 -

 

registration statement filed by the Company under the Securities Act in connection with the firm
commitment underwritten offering of its securities to the general public is consummated or
when the Company first becomes subject to the periodic reporting requirements of section 13(a) or
15(d) of the Exchange Act, whichever event shall first occur.

          2.4 Right of First Offer. Subject to the terms and conditions specified in this
Section 2.4, the Company hereby grants to each Major Investor a right of first offer with respect
to future sales by the Company of its Shares (as hereinafter defined). Each Major Investor shall
be entitled to apportion the right of first offer hereby granted it among itself and its partners
and affiliates in such proportions as it deems appropriate.

     Each time the Company proposes to offer any shares of, or securities convertible into or
exercisable for, any class of its capital stock (“Shares”), the Company shall first make an
offering of such Shares to each Major Investor in accordance with the following provisions:

               (a) The Company shall deliver a notice by certified mail (“Notice”) to each Major Investor
stating (i) its bona fide intention to offer or issue such Shares, (ii) the number of such Shares
to be offered, and (iii) the price, if any, for which it proposes to offer such Shares.

               (b) Within 15 calendar days after receipt of the Notice, the Major Investor may elect to
purchase or obtain, at the price and on the terms specified in the Notice, up to that portion of
such Shares which equals the proportion that the number of shares of Common Stock issued and held,
or issuable upon conversion of the shares of the Company’s Preferred Stock then held, by such Major
Investor bears to the total number of shares of outstanding Common Stock and Common Stock issuable
upon conversion of the Preferred Stock then outstanding. The Company shall promptly, in writing,
inform each Major Investor which purchases all the shares available to it (each, a “Fully
Exercising Investor”) of any other Major Investor’s failure to do likewise. During the 10-day
period commencing after receipt of such information, each Fully Exercising Investor shall be
entitled to obtain that portion of the Shares subject to such right of first refusal and not
subscribed for by the Major Investors which is equal to the proportion that the number of shares of
Common Stock issued and held, or issuable upon conversion of the Preferred Stock then held, by such
Fully Exercising Investor bears to the total number of shares of Common Stock issued and held, or
issuable upon conversion of the Preferred Stock then held, by all Fully Exercising Investors who
wish to purchase some of the unsubscribed shares.

               (c) If all such Shares referred to in the Notice are not elected to be obtained as provided in
subsection 2.4(b) hereof, the Company may, during the 60-day period following the expiration of the
period provided in subsection 2.4(b) hereof, offer the remaining unsubscribed Shares to any person
or persons at a price not less than that, and upon terms no more favorable to the offeree than
those, specified in the Notice. If the Company does not enter into an agreement for the sale of
the Shares within such period, or if such agreement is not consummated within 60 days of the
execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall
not be offered unless first reoffered to the Major Investors in accordance herewith.

- 12 -

 

               (d) The right of first offer granted in this Section 2.4 shall not be applicable (i) to the
issuance or sale of shares of Common Stock (or options therefor) to employees,
directors, consultants or advisors of the Company under such plans or agreements as may be
approved by the Company’s Board of Directors for the purpose of soliciting or retaining their
services, (ii) to the issuance and sale of the Company’s securities to a corporation, partnership,
educational institution or other entity in connection with a research and development partnership,
joint venture, licensing or other collaborative arrangement or similar transaction between the
Company and such institution or entity, which issuance and sale is approved by the Company’s Board
of Directors, (iii) to the issuance and sale of the Company’s securities in connection with an
equipment lease financing or other commercial credit transaction, which issuance and sale is
approved by the Company’s Board of Directors, and (iv) to or after consummation of a Qualified
Public Offering.

          2.5 Proprietary Information and Inventions Agreement. The Company will cause each
person now or hereafter employed by it or any subsidiary with access to confidential information to
enter into a proprietary information and inventions agreement substantially in the form approved by
the Board of Directors.

          2.6 Certain Vesting and Repurchase Provisions. The Company will cause the shares sold
after the date hereof to, or subject to any option granted to, employees, directors, consultants or
advisors of the Company to vest over not less than a four-year period from the date of sale or
grant, as applicable, with 25% of the total vesting at the first year anniversary of the sale or
grant and the balance vesting on a monthly basis thereafter except as approved by the Board of
Directors including all of the Investor Directors (as such term is defined in the Amended and
Restated Voting Agreement of even date herewith). Further, with respect to such stock sales or
option grants, the Company will not permit any transfers of the shares or options prior to the
vesting of such shares or options and the Company will have a right of first refusal on all
proposed transfers of vested shares or options, which right of first refusal will terminate upon
the consummation of an initial public offering by the Company.

          2.7 Key Person Insurance. The Company will use reasonable commercial efforts to
obtain and maintain term life insurance, the proceeds of which shall be payable to the Company, in
the amount of $2,000,000 on the life of Henry A. Klyce except as otherwise decided in accordance
with policies adopted by the Company’s Board of Directors.

     3. “Market Stand-Off” Agreement. Each Investor hereby agrees that it shall not,
without the prior consent of the managing underwriters, to the extent requested by the Company and
an underwriter of Common Stock (or other securities) of the Company, sell or otherwise transfer or
dispose (other than to donees who agree to be similarly bound) of any Registrable Securities, as
such termed is defined in Section 1.1(b) hereof, during a reasonable and customary period of time,
as agreed to by the Company and the underwriters, not to exceed 180 days, following the effective
date of a registration statement of the Company filed under the Securities Act relating to the
Company’s initial public offering; provided that all officers and directors of the Company and
greater than 1% stockholders and all other persons with registration rights (whether or not
pursuant to this Agreement) enter into similar agreements.

- 13 -

 

     In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions
with respect to the Registrable Securities of each Investor (and the shares or securities of every
other person subject to the foregoing restriction) until the end of such reasonable and customary
period.

     4. Confidentiality. Each Investor hereby represents, warrants and covenants that it
shall maintain in confidence, and shall not use or disclose without the prior written consent of
the Company, any written information identified in writing as confidential that is furnished to it
by the Company in connection with this Agreement, including (without limitation) all financial
statements, budgets and other information delivered or provided to Investors pursuant to Section 2
hereof. This obligation of confidentiality shall not apply, however, to any information (a) in the
public domain through no unauthorized act or failure to act by any Investor, (b) lawfully disclosed
to such Investor by a third party who possessed such information without any obligation of
confidentiality or (c) lawfully developed by such Investor independent of any disclosure by the
Company. Each Investor further covenants that it shall return to the Company or destroy all
tangible materials containing such information upon request by the Company.

     5. Miscellaneous.

          5.1 Successors and Assigns. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the parties. Nothing
in this Agreement, express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement.

          5.2 Governing Law. This Agreement shall be governed by and construed under the laws
of the State of California (irrespective of its choice of law principles).

          5.3 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

          5.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.

          5.5 Notices. Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to
the party to be notified (or upon the date of attempted delivery where delivery is refused) or, if
sent by telecopier, telex, telegram, or other facsimile means, upon receipt of appropriate
confirmation of successful transmission, or five days after deposit with the United States Postal
Service, by registered or certified mail, or one day after deposit with next day air courier, with
postage and fees prepaid and addressed to the party entitled to such notice at the address
indicated for such party on the signature page hereof, or at such other address as such party may
designate by ten days’ advance written notice to the other parties to this Agreement.

-14-

 

          5.6 Amendments and Waivers. Except as specified in Section 1.15, any term of this
Agreement may be amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of a majority of the Common Stock issued or issuable
upon conversion of the Registrable Securities. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any securities purchased under this Agreement
at the time outstanding (including securities into which such securities are convertible), each
future holder of all such securities, and the Company. Notwithstanding the foregoing, no amendment
or waiver which adversely affects an Investor in a manner that is different from the effect of such
waiver or amendment on all Investors shall be effective without the consent of such Investor.

          5.7 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.

          5.8 Aggregation of Stock. All Registrable Securities held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining the availability of
any rights under this Agreement.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.

	 	 	 	 	 
	 	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

 	 
	 	By:  	/s/
Henry 	 
	 	 	Henry A. Klyce 	 
	 	 	President 	 

	 	 	 	 	 
	 

	 	Address:
	 	1900 Bates Avenue
	 

	 	 	 	Suites L & M
	 

	 	 	 	Concord, CA 94520

-15-

 

ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 
	 	PREFERRED HOLDERS:

U.S. VENTURE PARTNERS VI, L.P.

USVP VI AFFILIATES FUND, L.P.

USVP ENTREPRENEUR PARTNERS VI, L.P.

2180 ASSOCIATES FUND VI, L.P.

By Presidio Management Group VI, L.L.C.

The General Partner of Each

 	 
	 	By:  	/s/
M. Maher 	 
	 	 	Michael P. Maher 	 
	 	 	Attorney-In-Fact 	 

	 	 	 	 	 
	 

	 	Address:
	 	2735 Sand Hill Road
	 

	 	 	 	Menlo Park, CA 94025
	 

	 	 	 	Attn: Michael P. Maher

-16-

 

ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 
	 	VERSANT VENTURE CAPITAL L L.P.

By Versant Ventures I, LLC

Its General Partner

 	 
	 	By:  	/s/
Ross Jaffe 	 
	 	 	Ross A. Jaffe, M.D. 	 
	 	 	Managing Partner 	 

	 	 	 	 	 
	 

	 	Address:
	 	Versant Ventures
	 

	 	 	 	3000 Sand Hill Road
	 

	 	 	 	Bldg 1, Suite 260
	 

	 	 	 	Menlo Park, CA 94025
	 

	 	 	 	Attn: Ross A. Jaffe, M.D.

	 	 	 	 	 
	 	VERSANT SIDE FUND I, L.P.

By Versant Ventures I, LLC

Its General Partner

 	 
	 	By:  	/s/
Ross Jaffe 	 
	 	 	Ross A. Jaffe, M.D. 	 
	 	 	Managing Partner 	 

	 	 	 	 	 
	 

	 	Address:
	 	Versant Ventures
	 

	 	 	 	3000 Sand Hill Road
	 

	 	 	 	Bldg 1, Suite 260
	 

	 	 	 	Menlo Park, CA 94025
	 

	 	 	 	Attn: Ross A. Jaffe, M.D.

-17-

 

ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 
	 	VERSANT AFFILIATES FUND I-A, L.P.

By Versant Ventures I, LLC

Its General Partner

 	 
	 	By:  	/s/
Ross Jaffe 	 
	 	 	Ross A. Jaffe, M.D. 	 
	 	 	Managing Partner 	 

	 	 	 	 	 
	 

	 	Address:
	 	Versant Ventures
	 

	 	 	 	3000 Sand Hill Road
	 

	 	 	 	Bldg 1, Suite 260
	 

	 	 	 	Menlo Park, CA 94025
	 

	 	 	 	Attn: Ross A. Jaffe, M.D.

	 	 	 	 	 
	 	VERSANT AFFILIATES FUND I-B, L.P.

By Versant Ventures I, LLC

Its General Partner

 	 
	 	By:  	/s/
Ross Jaffe 	 
	 	 	Ross A. Jaffe, M.D. 	 
	 	 	Managing Partner 	 

	 	 	 	 	 
	 

	 	Address:
	 	Versant Ventures
	 

	 	 	 	3000 Sand Hill Road
	 

	 	 	 	Bldg 1, Suite 260
	 

	 	 	 	Menlo Park, CA 94025

	 	 	 	 	 
	 	TRELLIS HEALTH VENTURES, L.P.

By THV Management LLC

Its General Partner

 	 
	 	By:  	 	 
	 	 	Paul J. Felton 	 
	 	 	Manager, THV Management LLC 	 

	 	 	 	 	 
	 

	 	Address:
	 	One Sansome Street
	 

	 	 	 	Suite 2100
	 

	 	 	 	San Francisco, CA 94104
	 

	 	 	 	Attn.: Paul J. Felton

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ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 	 	 	 	 
	 	 	VERSANT AFFILIATES FUND I-A, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By Versant Ventures I, LLC	 	 
	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Ross A. Jaffe, M.D.	 	 
	 	 	 	 	Managing Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	Versant Ventures	 	 
	 

	 	 	 	 	 	3000 Sand Hill Road	 	 
	 

	 	 	 	 	 	Bldg 1, Suite 260	 	 
	 

	 	 	 	 	 	Menlo Park, CA 94025	 	 
	 

	 	 	 	 	 	Attn: Ross A. Jaffe, M.D.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	VERSANT AFFILIATES FUND I-B, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By Versant Ventures I, LLC	 	 
	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Ross A. Jaffe, M.D.	 	 
	 	 	 	 	Managing Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	Versant Ventures	 	 
	 

	 	 	 	 	 	3000 Sand Hill Road	 	 
	 

	 	 	 	 	 	Bldg 1, Suite 260	 	 
	 

	 	 	 	 	 	Menlo Park, CA 94025	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TRELLIS HEALTH VENTURES, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By THV Management LLC	 	 
	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Paul Felton 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Paul J. Felton	 	 
	 	 	 	 	Manager, THV Management LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	One Sansome Street, Suite 2100	 	 
	 

	 	 	 	 	 	San Francisco, CA 94104	 	 
	 

	 	 	 	 	 	Attn.: Paul J. Felton	 	 

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ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 	 	 	 	 
	 	 	Alan L. Kaganov and Carol M. Kaganov,	 	 
	 	 	Trustees of the Kaganov Family Revocable	 	 
	 	 	Trust of October 16, 2002	 	 
	 
	 	/s/ Alan L. Kaganov 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	c/o U.S. Vcn/ure Partners	 	 
	 

	 	 	 	 	 	2735 Sand Hill Road	 	 
	 

	 	 	 	 	 	Menlo Park, CA 94025	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Telephone:	 	(650) 854-9080	 	 
	 	 	Facsimile:	 	(650) 854-3018	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Henry A. Klyce	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	321 Sandringham Road	 	 
	 

	 	 	 	 	 	Piedmont, CA 9461	 	 

-20-

 

ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 	 	 	 	 
	 	 	Alan L. Kaganov	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	c/o U.S. Venture Partners	 	 
	 

	 	 	 	 	 	2735 Sand Hill Road	 	 
	 

	 	 	 	 	 	Menlo Park, CA 94025	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Telephone:	 	(650) 854-9080	 	 
	 	 	Facsimile:	 	(650) 854-3018	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Henry A. Klyce	 	 
	 
	 	/s/ Henry 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	231 Sandringham Road	 	 
	 

	 	 	 	 	 	Piedmont, CA 9461	 	 

-21-

 

ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 	 	 	 	 
	 	 	ESSEX WOODLANDS HEALTH VENTURES	 	 
	 	 	FUND V, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:.	 	Essex Woodlands Health Ventures V, L.L.C.,	 	 
	 	 	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ J. Douglas Eplett 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: J. Douglas Eplett	 	 
	 	 	 	 	Title: Managing Director	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	c/o Essex Woodlands Health Ventures	 	 
	 

	 	 	 	 	 	19000 MacArthur Blvd.	 	 
	 

	 	 	 	 	 	Suite 500	 	 
	 

	 	 	 	 	 	Irvine, CA 92612	 	 
	 

	 	 	 	 	 	Attn: Douglas Eplett, M.D.	 	 
	 

	 	 	 	 	 	Fax: (949) 261-8391	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	With a copy to:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Testa, Hurwitz & Thibeault, LLP	 	 
	 

	 	 	 	 	 	125 High Street	 	 
	 

	 	 	 	 	 	Boston, MA 02110	 	 
	 

	 	 	 	 	 	Attn: Andrew E. Taylor, Esq.	 	 
	 

	 	 	 	 	 	Fax: (617) 248-7100	 	 

-22-

 

ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 	 	 	 	 
	 	 	Augustus A. White, III, MD, PHD	 	 
	 
	 	/s/ A. A. White 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	20 Westerly Road	 	 
	 

	 	 	 	 	 	Weston, MA 02493	 	 
	 	 	Telephone:	 	(781) 891-9048	 	 
	 	 	Facsimile:	 	(781) 891-7435	 	 

-23-

 

ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 	 	 	 	 
	 	 	Evergreen Ventures, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kenneth Sikora 	 	 
	 	 	 	 	 	 	 
	 	 	Title: Managing Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	Evergreen Ventures, LLC	 	 
	 

	 	 	 	 	 	50 Fremont Street	 	 
	 

	 	 	 	 	 	San Francisco, CA 94105	 	 
	 

	 	 	 	 	 	Attn: Ken Sikora	 	 
	 	 	Telephone:	 	(415) 983-1667	 	 
	 	 	Facsimile:	 	(415) 983-1200	 	 

-24-

 

ST. FRANCIS MEDICAL TECHNOLOGIES, INC.

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

Counterpart Signature Page

	 	 	 	 	 	 	 	 	 
	 	 	Cameo F. Jones	 	 
	 
	 	/s/ Cameo Jones 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address:	 	179 Beaumont Avenue	 	 
	 

	 	 	 	 	 	San Francisco, CA 94118	 	 
	 	 	Telephone:	 	(415) 983-6300	 	 
	 	 	Facsimile:	 	(415) 983-1200	 	 

-25-

 

SCHEDULE A

INVESTORS:

U.S. VENTURE PARTNERS VI, L.P.

USVP VI AFFILIATES FUND, L.P.

USVP ENTREPRENEUR PARTNERS VI, L.P.

2180 ASSOCIATES FUND VI, L.P.

ALAN L. KAGANOV

BRUCE WAGNER, M.D.

BRAD DELONG, M.D.

JERREL GLASSMAN, M.D.

STEVE MCCARTHY

JUDY SILVERMAN, M.D.

KATHLEEN LISS

HENRY and JULIET KUNG

LYDIA LEE

TRELLIS HEALTH VENTURES, L.P.

VERSANT VENTURE CAPITAL I, L.P.

VERSANT SIDE FUND I, L.P.

VERSANT AFFILIATES FUND I-A, L.P.

VERSANT AFFILIATES FUND I-B,

ALAN L. KAGANOV AND CAROL M. KAGANOV, TRUSTEES OF THE KAGANOV FAMILY REVOCABLE TRUST OF OCTOBER 

     16, 2002

HENRY A. KLYCE

ESSEX WOODLANDS HEALTH VENTURES, V, L.P.exv10w1

 

Exhibit 10.1

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (the “Agreement”), dated as of «Date», between St. Francis
Medical Technologies, Inc., a Delaware corporation (the “Corporation”), and «Name» (“Indemnitee”),

W I T N E S S E T H:

     WHEREAS, Indemnitee is either a member of the board of directors of the Corporation (the
“Board of Directors”) or an officer of the Corporation, or both, and in such capacity or
capacities, or otherwise as an Agent (as hereinafter defined) of the Corporation, is performing a
valuable service for the Corporation; and

     WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service
for or on behalf of the Corporation on the condition that he or she be indemnified as herein
provided; and

     WHEREAS, it is intended that Indemnitee shall be paid promptly by the Corporation all amounts
necessary to effectuate in full the indemnity provided herein:

     NOW, THEREFORE, in consideration of the premises and the covenants in this Agreement, and of
Indemnitee continuing to serve the Corporation as an Agent and intending to be legally bound
hereby, the parties hereto agree as follows:

     1. Services by Indemnitee. Indemnitee agrees to serve (a) as a director or an officer
of the Corporation, or both, so long as Indemnitee is duly appointed or elected and qualified in
accordance with the applicable provisions of the Certificate of Incorporation and bylaws of the
Corporation, and until such time as Indemnitee resigns or fails to stand for election or is removed
from Indemnitee’s position, or (b) otherwise as an Agent (as hereinafter defined) of the
Corporation. Indemnitee may from time to time also perform other services at the request or for
the convenience of, or otherwise benefiting the Corporation. Indemnitee may at any time and for
any reason resign or be removed from such position (subject to any other contractual obligation or
other obligation imposed by operation of law), in which event the Corporation shall have no
obligation under this Agreement to continue Indemnitee in any such position.

     2. Indemnification. Subject to the limitations set forth herein and in Section 6
hereof, the Corporation hereby agrees to indemnify Indemnitee as follows:

     The Corporation shall, with respect to any Proceeding (as hereinafter defined) associated with
Indemnitee’s being an Agent of the Corporation, indemnify Indemnitee to the fullest extent
permitted by applicable law and the Certificate of Incorporation of the Corporation in effect on
the date hereof or as such law or Certificate of Incorporation may from time to time be amended
(but, in the case of any such amendment, only to the extent such amendment permits the Corporation
to provide broader indemnification rights than the law or Certificate of Incorporation permitted
the Corporation to provide before such amendment). The right to indemnification conferred herein and
in the Certificate of Incorporation shall be presumed to have been relied upon by Indemnitee in
serving or continuing to serve the Corporation as an Agent and shall be enforceable as a contract
right. Without in any way diminishing the scope of the indemnification provided by this Section 2,

 

 

the Corporation will indemnify Indemnitee to the full extent permitted by law if and wherever
Indemnitee is or was a party or is threatened to be made a party to any Proceeding, including any
such Proceeding brought by or in the right of the Corporation, by reason of the fact that
Indemnitee is or was an Agent or by reason of anything done or not done by Indemnitee in such
capacity, against Expenses (as hereinafter defined) and Liabilities (as hereinafter defined)
actually and reasonably incurred by Indemnitee or on his or her behalf in connection with the
investigation, defense, settlement or appeal of such Proceeding. In addition to, and not as a
limitation of, the foregoing, the rights of indemnification of Indemnitee provided under this
Agreement shall include those rights set forth in Sections 3 and 8 below. Notwithstanding the
foregoing, the Corporation shall be required to indemnify Indemnitee in connection with a
Proceeding commenced by Indemnitee (other than a Proceeding commenced by Indemnitee to enforce
Indemnitee’s rights under this Agreement) only if the commencement of such Proceeding was
authorized by the Board of Directors.

     3. Advancement of Expenses; Letter of Credit.

     (a) Advancement of Expenses. All reasonable Expenses incurred by or on behalf of
Indemnitee (including costs of enforcement of this Agreement) shall be advanced from time to time
by the Corporation to Indemnitee within thirty (30) days after the receipt by the Corporation of a
written request for an advance of Expenses, whether prior to or after final disposition of a
Proceeding (except to the extent that there has been a Final Adverse Determination (as hereinafter
defined) that Indemnitee is not entitled to be indemnified for such Expenses), including without
limitation any Proceeding brought by or in the right of the Corporation. The written request for
an advancement of any and all expenses under this paragraph shall contain reasonable detail of the
Expenses incurred by Indemnitee. In the event that such written request shall be accompanied by an
affidavit of counsel to Indemnitee to the effect that such counsel has reviewed such expenses and
that such expenses are reasonable in such counsel’s view, then such expenses shall be deemed
reasonable in the absence of clear and convincing evidence to the contrary. By execution of this
Agreement, Indemnitee shall be deemed to have made whatever undertaking may be required by law at
the time of any advancement of Expenses with respect to repayment to the Corporation of such
Expenses. In the event that the Corporation shall breach its obligation to advance Expenses under
this Section 3, the parties hereto agree that Indemnitee’s remedies available at law would not be
adequate and that Indemnitee would be entitled to specific performance.

     (b) Letter of Credit. In order to secure the obligations of the Corporation to
indemnify and advance Expenses to Indemnitee pursuant to this Agreement, the Corporation shall
obtain at the time of any Change in Control (as hereinafter defined) an irrevocable standby letter
of credit naming Indemnitee as the sole beneficiary (the “Letter of Credit”). The Letter of Credit
shall be in an appropriate amount not less than one million dollars ($1,000,000), shall be issued
by a commercial bank headquartered in the United States having assets in excess of $10 billion and
capital according to its most recent published
reports equal to or greater than the then applicable minimum capital standards promulgated by
such bank’s primary federal regulator and shall contain terms and conditions reasonably acceptable
to Indemnitee. The Letter of Credit shall provide that Indemnitee may from time to time draw
certain amounts thereunder, upon written certification by Indemnitee to the issuer of the Letter of
Credit that (i) Indemnitee has made written request upon the Corporation for an amount not less
than the amount Indemnitee is drawing under the Letter of Credit and that the Corporation has
failed or refused to provide Indemnitee with such amount in full within thirty (30) days after
receipt of the request, and (ii) Indemnitee believes that he or she is

 - 2 - 

 

entitled under the terms of
this Agreement to the amount that Indemnitee is drawing upon under the Letter of Credit. The
issuance of the Letter of Credit shall not in any way diminish the Corporation’s obligation to
indemnify Indemnitee against Expenses and Liabilities to the full extent required by this
Agreement.

     (c) Term of Letter of Credit. Once the Corporation has obtained the Letter of Credit,
the Corporation shall maintain and renew the Letter of Credit or a substitute letter of credit
meeting the criteria of Section 3(b) during the term of this Agreement so that the Letter of Credit
shall have an initial term of five (5) years, be renewed for successive five-year terms, and always
have at least one (1) year of its term remaining.

     4. Presumptions and Effect of Certain Proceedings. Upon making a request for
indemnification, Indemnitee shall be presumed to be entitled to indemnification under this
Agreement and the Corporation shall have the burden of proof to overcome that presumption in
reaching any contrary determination. The termination of any Proceeding by judgment, order,
settlement, arbitration award or conviction, or upon a plea of nolo contendere or its equivalent
shall not affect this presumption or, except as determined by a judgment or other final
adjudication adverse to Indemnitee, establish a presumption with regard to any factual matter
relevant to determining Indemnitee’s rights to indemnification hereunder. If the person or persons
so empowered to make a determination pursuant to Section 5 hereof shall have failed to make the
requested determination within ninety (90) days after any judgment, order, settlement, dismissal,
arbitration award, conviction, acceptance of a plea of nolo contendere or its equivalent, or other
disposition or partial disposition of any Proceeding or any other event that could enable the
Corporation to determine Indemnitee’s entitlement to indemnification, the requisite determination
that Indemnitee is entitled to indemnification shall be deemed to have been made.

     5. Procedure for Determination of Entitlement to Indemnification.

     (a) Whenever Indemnitee believes that Indemnitee is entitled to indemnification pursuant to
this Agreement, Indemnitee shall submit a written request for indemnification to the Corporation.
Any request for indemnification shall include sufficient documentation or information reasonably
available to Indemnitee for the determination of entitlement to indemnification. In any event,
Indemnitee shall submit Indemnitee’s claim for indemnification within a reasonable time, not to
exceed five (5) years after any judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendere or its equivalent, or final termination,
whichever is the later date for which Indemnitee requests indemnification. The Secretary or other
appropriate officer shall, promptly upon receipt of Indemnitee’s request for indemnification,
advise the Board of
Directors in writing that Indemnitee has made such request. Determination of Indemnitee’s
entitlement to indemnification shall be made not later than ninety (90) days after the
Corporation’s receipt of Indemnitee’s written request for such indemnification, provided that any
request for indemnification for Liabilities, other than amounts paid in settlement, shall have been
made after a determination thereof in a Proceeding.

     (b) The Corporation shall be entitled to select the forum in which Indemnitee’s entitlement to
indemnification will be heard; provided, however, that if there is a Change in Control of the
Corporation, Independent Legal Counsel (as hereinafter defined) shall determine whether Indemnitee
is entitled to indemnification. The forum shall be any one of the following:

 - 3 - 

 

     (i) the stockholders of the Corporation;

     (ii) a majority vote of Disinterested Directors (as hereinafter defined), even though
less than a quorum;

     (iii) Independent Legal Counsel, whose determination shall be made in a written
opinion; or

     (iv) a panel of three arbitrators, one selected by the Corporation, another by
Indemnitee and the third by the first two arbitrators; or if for any reason three
arbitrators are not selected within thirty (30) days after the appointment of the first
arbitrator, then selection of additional arbitrators shall be made by the American
Arbitration Association. If any arbitrator resigns or is unable to serve in such capacity
for any reason, the American Arbitration Association shall select such arbitrator’s
replacement. The arbitration shall be conducted pursuant to the commercial arbitration
rules of the American Arbitration Association now in effect.

     6. Specific Limitations on Indemnification. Notwithstanding anything in this
Agreement to the contrary, the Corporation shall not be obligated under this Agreement to make any
payment to Indemnitee with respect to any Proceeding:

     (a) To the extent that payment is actually made to Indemnitee under any insurance policy, or
is made to Indemnitee by the Corporation or an affiliate otherwise than pursuant to this Agreement.
Notwithstanding the availability of such insurance, Indemnitee also may claim indemnification from
the Corporation pursuant to this Agreement by assigning to the Corporation any claims under such
insurance to the extent Indemnitee is paid by the Corporation;

     (b) Provided there has been no Change in Control, for Liabilities in connection with
Proceedings settled without the Corporation’s consent, which consent, however, shall not be
unreasonably withheld;

     (c) For an accounting of profits made from the purchase or sale by Indemnitee of securities of
the Corporation within the meaning of section 16(b) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or similar provisions of any state statutory or common law; or

     (d) To the extent it would be otherwise prohibited by law, if so established by a judgment or
other final adjudication adverse to Indemnitee.

     7. Fees and Expenses of Independent Legal Counsel. The Corporation agrees to pay the
reasonable fees and expenses of Independent Legal Counsel or a panel of three arbitrators should
such Independent Legal Counsel or such arbitrators be retained to make a determination of
Indemnitee’s entitlement to indemnification pursuant to Section 5(b) of this Agreement, and to
fully indemnify such Independent Legal Counsel or arbitrators against any and all expenses and
losses incurred by any of them arising out of or relating to this Agreement or their engagement
pursuant hereto.

 - 4 - 

 

     8. Remedies of Indemnitee.

     (a) In the event that (i) a determination pursuant to Section 5 hereof is made that Indemnitee
is not entitled to indemnification, (ii) advances of Expenses are not made pursuant to this
Agreement, (iii) payment has not been timely made following a determination of entitlement to
indemnification pursuant to this Agreement, or (iv) Indemnitee otherwise seeks enforcement of this
Agreement, Indemnitee shall be entitled to a final adjudication in the Court of Chancery of the
State of Delaware of the remedy sought. Alternatively, unless (i) the determination was made by a
panel of arbitrators pursuant to Section 5(b)(iv) hereof, or (ii) court approval is required by law
for the indemnification sought by Indemnitee, Indemnitee at Indemnitee’s option may seek an award
in arbitration to be conducted by a single arbitrator pursuant to the commercial arbitration rules
of the American Arbitration Association now in effect, which award is to be made within ninety (90)
days following the filing of the demand for arbitration. The Corporation shall not oppose
Indemnitee’s right to seek any such adjudication or arbitration award. In any such proceeding or
arbitration Indemnitee shall be presumed to be entitled to indemnification and advancement of
Expenses under this Agreement and the Corporation shall have the burden of proof to overcome that
presumption.

     (b) In the event that a determination that Indemnitee is not entitled to indemnification, in
whole or in part, has been made pursuant to Section 5 hereof, the decision in the judicial
proceeding or arbitration provided in paragraph (a) of this Section 8 shall be made de novo and
Indemnitee shall not be prejudiced by reason of a determination that Indemnitee is not entitled to
indemnification.

     (c) If a determination that Indemnitee is entitled to indemnification has been made pursuant
to Section 5 hereof, or is deemed to have been made pursuant to Section 4 hereof or otherwise
pursuant to the terms of this Agreement, the Corporation shall be bound by such determination in
the absence of a misrepresentation or omission of a material fact by Indemnitee in connection with
such determination.

     (d) The Corporation shall be precluded from asserting that the procedures and presumptions of
this Agreement are not valid, binding and enforceable. The Corporation shall stipulate in any such
court or before any such arbitrator that the Corporation is bound by all the provisions of this
Agreement and is precluded from making any assertion to the contrary.

     (e) Expenses reasonably incurred by Indemnitee in connection with Indemnitee’s request for
indemnification under, seeking enforcement of or to recover damages for breach of this
Agreement shall be borne by the Corporation when and as incurred by Indemnitee irrespective of
any Final Adverse Determination (as hereinafter defined) that Indemnitee is not entitled to
indemnification.

     9. Contribution. To the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Corporation, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in
light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits
received by the Corporation and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such

 - 5 - 

 

Proceeding; and/or (ii) the relative fault of the Corporation (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

     10. Maintenance of Insurance. Upon the Corporation’s purchase of directors’ and
officers’ liability insurance policies covering its directors and officers, then, subject only to
the provisions within this Section 10, the Corporation agrees that so long as Indemnitee shall have
consented to serve or shall continue to serve as a director or officer of the Corporation or both,
or as an Agent of the Corporation, and thereafter so long as Indemnitee shall be subject to any
possible Proceeding (such periods being hereinafter sometimes referred to as the “Indemnification
Period”), the Corporation will use all reasonable efforts to maintain in effect for the benefit of
Indemnitee one or more valid, binding and enforceable policies of directors’ and officers’
liability insurance providing, in all respects, coverage both in scope and amount which is no less
favorable than that provided by such preexisting policies. Notwithstanding the foregoing, the
Corporation shall not be required to maintain said policies of directors’ and officers’ liability
insurance if such insurance is not reasonably available or if it is in good faith determined by the
then directors of the Corporation either that:

     (i) The premium cost of maintaining such insurance is substantially disproportionate to
the amount of coverage provided thereunder; or

     (ii) The protection provided by such insurance is so limited by exclusions, deductions
or otherwise that there is insufficient benefit to warrant the cost of maintaining such
insurance.

     Anything in this Agreement to the contrary notwithstanding, to the extent that and for so long
as the Corporation shall choose to continue to maintain any policies of directors’ and officers’
liability insurance during the Indemnification Period, the Corporation shall maintain similar and
equivalent insurance for the benefit of Indemnitee during the Indemnification Period (unless such
insurance shall be less favorable to Indemnitee than the Corporation’s existing policies).

     11. Modification, Waiver, Termination and Cancellation. No supplement, modification,
termination, cancellation or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver.

     12. Subrogation. In the event of payment under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who
shall execute all papers required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable the Corporation effectively
to bring suit to enforce such rights.

     13. Notice by Indemnitee and Defense of Claim. Indemnitee shall promptly notify the
Corporation in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any matter, whether civil, criminal,
administrative or investigative, but the omission so to notify the Corporation will not relieve it
from any liability that it may have to Indemnitee if such omission does not prejudice the
Corporation’s rights. If such omission does prejudice the Corporation’s rights, the Corporation
will be relieved

 - 6 - 

 

from liability only to the extent of such prejudice; nor will such omission
relieve the Corporation from any liability that it may have to Indemnitee otherwise than under this
Agreement. With respect to any Proceeding as to which Indemnitee notifies the Corporation of the
commencement thereof:

     (a) The Corporation will be entitled to participate therein at its own expense; and

     (b) The Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee;
provided, however, that the Corporation shall not be entitled to assume the defense of any
Proceeding if there has been a Change in Control or if Indemnitee shall have reasonably concluded
that there may be a conflict of interest between the Corporation and Indemnitee with respect to
such Proceeding. After notice from the Corporation to Indemnitee of its election to assume the
defense thereof, the Corporation will not be liable to Indemnitee under this Agreement for any
Expenses subsequently incurred by Indemnitee in connection with the defense thereof, other than
reasonable costs of investigation or as otherwise provided below. Indemnitee shall have the right
to employ Indemnitee’s own counsel in such Proceeding, but the fees and expenses of such counsel
incurred after notice from the Corporation of its assumption of the defense thereof shall be at the
expense of Indemnitee unless:

     (i) the employment of counsel by Indemnitee has been authorized by the Corporation;

     (ii) Indemnitee shall have reasonably concluded that counsel engaged by the Corporation
may not adequately represent Indemnitee; or

     (iii) the Corporation shall not in fact have employed counsel to assume the defense in
such Proceeding or shall not in fact have assumed such defense and be acting in connection
therewith with reasonable diligence; in each of which cases the fees and expenses of such
counsel shall be at the expense of the Corporation.

     (c) The Corporation shall not settle any Proceeding in any manner that would impose any
penalty or limitation on Indemnitee without Indemnitee’s written consent; provided, however, that
Indemnitee will not unreasonably withhold his or her consent to any proposed settlement.

     14. Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted
for by the party to whom said notice or other communication shall have been directed, or (ii)
mailed by certified or registered mail with postage prepaid, on the third business day after the
date on which it is so mailed:

     (a) If to Indemnitee, to:

«Name»

«Address1»

«Address2»

 - 7 - 

 

     (b) If to the Corporation, to:

St. Francis Medical Technologies, Inc.

960 Atlantic Avenue, Suite 102

Alameda, CA 94501

Attn: President & Chief Executive Officer

     with a copy to:

Wilson Sonsini Goodrich & Rosati

650 Page Mill Road

Palo Alto, CA 94304-1050

Attn: Christopher D. Mitchell

or to such other address as may have been furnished to Indemnitee by the Corporation or to the
Corporation by Indemnitee, as the case may be.

     15. Nonexclusivity. The rights of Indemnitee hereunder shall not be deemed exclusive
of any other rights to which Indemnitee may be entitled under applicable law, the Corporation’s
Certificate of Incorporation or bylaws, or any agreements, vote of stockholders, resolution of the
Board of Directors or otherwise, and to the extent that during the Indemnification Period the
rights of the then existing directors and officers are more favorable to such directors or officers
than the rights
currently provided to Indemnitee thereunder or under this Agreement, Indemnitee shall be
entitled to the full benefits of such more favorable rights.

     16. Certain Definitions.

     (a) “Agent” shall mean any person who is or was, or who has consented to serve as, a
director, officer, employee, agent, fiduciary, joint venturer, partner, manager or other official
of the Corporation or a subsidiary or an affiliate of the Corporation, or any other entity
(including without limitation, an employee benefit plan) either at the request of, for the
convenience of, or otherwise to benefit the Corporation or a subsidiary of the Corporation.

     (b) “Change in Control” shall mean the occurrence of any of the following:

     (i) Both (A) any “person” (as defined below) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing at least 20% of the total voting power represented by the
Corporation’s then outstanding voting securities; and (b) the beneficial ownership by such
person of securities representing such percentage has not been approved by a majority of the
“continuing directors” (as defined below);

     (ii) Any “person” is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Corporation representing at
least 50% of the total voting power represented by the Corporation’s then outstanding voting
securities;

     (iii) A change in the composition of the Board occurs, as a result of which fewer

 - 8 - 

 

than two-thirds of the incumbent directors are directors who either (A) had been directors of the
Corporation on the “look-back date” (as defined below) (the “Original Directors”) or (B)
were elected, or nominated for election, to the Board with the affirmative votes of at least
a majority in the aggregate of the Original Directors who were still in office at the time
of the election or nomination and directors whose election or nomination was previously so
approved (the “continuing directors”);

     (iv) The stockholders of the Corporation approve a merger or consolidation of the
Corporation with any other corporation, if such merger or consolidation would result in the
voting securities of the Corporation outstanding immediately prior thereto representing
(either by remaining outstanding or by being converted into voting securities of the
surviving entity) 50% or less of the total voting power represented by the voting securities
of the Corporation or such surviving entity outstanding immediately after such merger or
consolidation; or

     (v) The stockholders of the Corporation approve (A) a plan of complete liquidation of
the Corporation or (B) an agreement for the sale or disposition by the Corporation of all or
substantially all of the Corporation’s assets.

     For purposes of Subsection (i) above, the term “person” shall have the same meaning as when
used in sections 13(d) and 14(d) of the Exchange Act, but shall exclude (x) a trustee or other
fiduciary holding securities under an employee benefit plan of the Corporation or of a parent or
subsidiary of the Corporation or (y) a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same proportions as their ownership of the
common stock of the Corporation.

     For purposes of Subsection (iii) above, the term “look-back date” shall mean the later of (x)
November 9, 2000 or (y) the date 24 months prior to the date of the event that may constitute a
“Change in Control.”

     Any other provision of this Section 17(b) notwithstanding, the term “Change in Control” shall
not include a transaction, if undertaken at the election of the Corporation, the result of which is
to sell all or substantially all of the assets of the Corporation to another corporation (the
“surviving corporation”); provided that the surviving corporation is owned directly or indirectly
by the stockholders of the Corporation immediately following such transaction in substantially the
same proportions as their ownership of the Corporation’s common stock immediately preceding such
transaction; and provided, further, that the surviving corporation expressly assumes this
Agreement.

     (c) “Disinterested Director” shall mean a director of the Corporation who is not or
was not a party to or otherwise involved in the Proceeding in respect of which indemnification is
being sought by Indemnitee.

     (d) “Expenses” shall include all direct and indirect costs (including, without
limitation, attorneys’ fees, retainers, court costs, transcripts, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, all other disbursements or out-of-pocket expenses and reasonable
compensation for time spent by Indemnitee for which Indemnitee is otherwise not compensated by the
Corporation or any third party) actually and reasonably incurred in connection with either the
investigation, defense,

 - 9 - 

 

settlement or appeal of a Proceeding or establishing or enforcing a right
to indemnification under this Agreement, applicable law or otherwise; provided, however, that
“Expenses” shall not include any Liabilities.

     (e) “Final Adverse Determination” shall mean that a determination that Indemnitee is
not entitled to indemnification shall have been made pursuant to Section 5 hereof and either (1) a
final adjudication in the Court of Chancery of the State of Delaware or decision of an arbitrator
pursuant to Section 8(a) hereof shall have denied Indemnitee’s right to indemnification hereunder,
or (2) Indemnitee shall have failed to file a complaint in a Delaware court or seek an arbitrator’s
award pursuant to Section 8(a) for a period of one hundred twenty (120) days after the
determination made pursuant to Section 5 hereof.

     (f) “Independent Legal Counsel” shall mean a law firm or a member of a firm selected
by the Corporation and approved by Indemnitee (which approval shall not be unreasonably withheld)
or, if there has been a Change in Control, selected by Indemnitee and approved by the Corporation
(which approval shall not be unreasonably withheld), that neither is presently nor in the past five
(5) years has been retained to represent: (i) the Corporation or any of its subsidiaries or
affiliates, or Indemnitee or any corporation of which Indemnitee was or is a director, officer,
employee or agent, or any subsidiary or affiliate of such a corporation, in any material matter, or
(ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Legal Counsel” shall not include any person
who, under the applicable standards of professional conduct then prevailing, would have a conflict
of interest in representing either the Corporation or Indemnitee in an action to determine
Indemnitee’s right to indemnification under this Agreement.

     (g) “Liabilities” shall mean liabilities of any type whatsoever including, but not
limited to, any judgments, fines, ERISA excise taxes and penalties, penalties and amounts paid in
settlement (including all interest assessments and other charges paid or payable in connection with
or in respect of such judgments, fines, penalties or amounts paid in settlement) of any Proceeding.

     (h) “Proceeding” shall mean any threatened, pending or completed action, claim, suit,
arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any
other proceeding whether civil, criminal, administrative or investigative, that is associated with
Indemnitee’s being an Agent of the Corporation.

     17. Binding Effect; Duration and Scope of Agreement. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the
Corporation), spouses, heirs and personal and legal representatives. This Agreement shall continue
in effect during the Indemnification Period, regardless of whether Indemnitee continues to serve as
an Agent.

     18. Severability. If any provision or provisions of this Agreement (or any portion
thereof) shall be held to be invalid, illegal or unenforceable for any reason whatsoever:

     (a) the validity, legality and enforceability of the remaining provisions of this Agreement
shall not in any way be affected or impaired thereby; and

 - 10 - 

 

     (b) to the fullest extent legally possible, the provisions of this Agreement shall be
construed so as to give effect to the intent of any provision held invalid, illegal or
unenforceable.

     19. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, as applied to contracts between Delaware
residents entered into and to be performed entirely within the State of Delaware, without regard to
conflict of laws rules.

     20. Consent to Jurisdiction. The Corporation and Indemnitee each irrevocably consent
to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any
action or proceeding that arises out of or relates to this Agreement and agree that any action
instituted under this Agreement shall be brought only in the state courts of the State of Delaware.

     21. Entire Agreement. This Agreement represents the entire agreement between the parties hereto, and there are no
other agreements, contracts or understandings between the parties hereto with respect to the
subject matter of this Agreement, except as specifically referred to herein or as provided in
Section 15 hereof.

     22. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of which together shall constitute
one and the same Agreement.

	 	 	 	 	 	 	 
	 	 	ST. FRANCIS MEDICAL TECHNOLOGIES,	 	 
	 	 	INC., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 

       Kevin K. Sidow

       President & Chief Executive Officer
	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	«Name»	 	 	 	 

 - 11 -

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