Document:

EX-4.6

Exhibit 4.6

AMENDMENT NO. 4 TO INVESTORS’ RIGHTS AGREEMENT

     THIS AMENDMENT NO. 4 TO INVESTORS’ RIGHTS AGREEMENT is entered into effective this 12th day of
September, 2008 (this “Amendment No. 4”), by and among Cardiovascular Systems, Inc., a Minnesota
corporation (the “Company”), Silicon Valley Bank (“SVB”), and the Investors signatory hereto.

RECITALS

     WHEREAS, this Amendment No. 4 amends an Investor’s Rights Agreement, dated July 19, 2006 (the
“Investors’ Rights Agreement”) by and between the Company and the “Investors” set forth on Schedule
A thereto and “Stockholders” set forth on Schedule B thereto, as amended by Amendment No. 1 to
Investor’s Rights Agreement, dated October 3, 2006 by and between the Company, ITX International
Equity Corp. and the “Investors” signatory thereto, and Amendment No. 2 to Investor’s Rights
Agreement, dated September 19, 2007 by and between the Company, the Series A-1 Convertible
Preferred Stockholders and the “Investors” signatory thereto, and Amendment No. 3 to Investor’s
Rights Agreement, dated December 17, 2007 by and between the Company, the Series B Convertible
Preferred Stockholders and the “Investors” signatory thereto;

     WHEREAS, the Company has agreed to issue a warrant to SVB to purchase up to 13,000 shares of
Series B Convertible Preferred Stock (the “Warrant”) in connection with that certain Loan and
Security Agreement between SVB and the Company, dated September 12, 2008;

     WHEREAS, the Warrant provides that SVB will become a party to the Investor’s Rights Agreement
upon exercise or conversion of the Warrant;

     WHEREAS, on July 22, 2008, the Company’s Board of Directors approved the SVB transaction,
including the issuance of the Warrant and the granting of registration rights thereunder pursuant
to the Investors’ Rights Agreement; and

     WHEREAS,
Investors executing this Amendment No. 4 hold at least 662/3% of the combined voting
power of the outstanding shares of Series A Preferred Stock and any Common Stock issued upon
conversion of the Series A Preferred Stock.

     NOW THEREFORE, in consideration of the mutual covenants and agreements contained in this
Amendment No. 4, the sufficiency of which is hereby acknowledged, the parties hereto agree as set
forth below:

	 	1.	 	Defined Terms. Capitalized terms not defined herein shall have the meanings ascribed
to them in the Investor’s Rights Agreement.
	 
	 	2.	 	The Series B Convertible Preferred Stock to be issued pursuant to the Warrant shall be
deemed additional shares of Series A Preferred Stock for purposes of the Investor’s Rights
Agreement. For purposes of clarity, it is acknowledged and agreed that any shares of
Common Stock that are issued upon conversion of any such Series B Convertible

1

 

	 	 	 	Preferred Stock shall be deemed “Series A Registrable Securities” for purposes of the
Investor’s Rights Agreement.
	 
	 	3.	 	Automatically upon the exercise or conversion of the Warrant by SVB (or any successors
or permitted transferees or assigns under the Warrant) (the “Warrant Holder”), Schedule A
shall be amended to add the Warrant Holder as an Investor and the Warrant Holder shall be
deemed an Investor as that term is used in the Investor’s Rights Agreement.
	 
	 	4.	 	This Amendment No. 4 may be executed in any number of original or facsimile
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one agreement. Any
counterpart or other signature to this Amendment No. 4 that is delivered by facsimile shall
be deemed for all purposes as constituting good and valid execution and delivery by such
party of this Amendment No. 4.
	 
	 	5.	 	Except as set forth herein, all other terms and conditions of the Investor’s Rights
Agreement remain the same.
	 
	 	6.	 	This Amendment No. 4 shall be effective upon the issuance of the Warrant to SVB. If
the Warrant is not so issued, this Amendment No. 4 shall have no force or effect.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

2

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to Investor’s Rights
Agreement effective the date first written above.

	 	 	 	 	 
	 	CARDIOVASCULAR SYSTEMS, INC.

 	 
	 	By:  	/s/ Laurence L. Betterley
 	 
	 	 	Name:  	Laurence Betterley 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to Investor’s Rights
Agreement effective the date first written above.

	 	 	 	 	 	 	 
	 	 	EASTON HUNT CAPITAL PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	EHC GP, L.P. its General Partner	 	 
	 

	 	By:
	 	EHC GP, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Richard P. Schneider	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Richard P. Schneider	 	 
	 

	 	 	 	Title: Vice President and Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	EASTON CAPITAL PARTNERS, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	ECP GP, LLC	 	 
	 

	 	By:
	 	ECP GP, Inc., its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Richard P. Schneider	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Richard P. Schneider	 	 
	 

	 	 	 	Title: Vice President and Secretary	 	 

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to Investor’s
Rights Agreement effective the date first written above.

	 	 	 	 	 	 	 
	 	 	MAVERICK FUND, L.D.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Maverick Capital, Ltd.	 	 
	 

	 	 	 	Its Investment Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John T. McCafferty	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John T. McCafferty	 	 
	 

	 	 	 	Title: Limited Partner and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	MAVERICK FUND USA, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Maverick Capital, Ltd.	 	 
	 

	 	 	 	Its Investment Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John T. McCafferty	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John T. McCafferty	 	 
	 

	 	 	 	Title: Limited Partner and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	MAVERICK FUND II, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Maverick Capital, Ltd.	 	 
	 

	 	 	 	Its Investment Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John T. McCafferty	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John T. McCafferty	 	 
	 

	 	 	 	Title: Limited Partner and General Counsel	 	 

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to Investor’s Rights
Agreement effective the date first written above.

	 	 	 	 	 	 	 
	 	 	MITSUI & CO. VENTURE PARTNERS II, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Mitsui & Co. Venture Partners, Inc.	 	 
	 

	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Koichi Ando	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Koichi Ando	 	 
	 

	 	 	 	Title: President and CEO	 	 

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to Investor’s Rights
Agreement effective the date first written above.

	 	 	 	 	 
	 	ITX INTERNATIONAL EQUITY CORP.

 	 
	 	By:  	/s/ Takehito Jimbo
 	 
	 	 	Name:  	Takehito Jimbo 	 
	 	 	Title:  	President and CEO 	 

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to Investor’s Rights
Agreement effective the date first written above.

	 	 	 	 	 
	 	WHITEBOX HEDGED HIGH YIELD PARTNERS, LP

 	 
	 	By:  	/s/ Jonathan Wood
 	 
	 	 	Name:  	Jonathan Wood 	 
	 	 	Title:  	Director and COO 	 

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to Investor’s Rights
Agreement effective the date first written above.

	 	 	 	 	 
	 	WELLSPRING CAPITAL

 	 
	 	By:  	/s/ George White
 	 
	 	 	Name:  	George White 	 
	 	 	Title:  	Managing Member 	 

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to Investor’s Rights
Agreement effective the date first written above.

	 	 	 	 	 
	 	GDN HOLDINGS LLC

 	 
	 	By:  	/s/ Glen D. Nelson
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to Investor’s Rights
Agreement effective the date first written above.

	 	 	 	 	 
	 	SILICON VALLEY BANK

 	 
	 	By:  	/s/ Benjaman Johnson
 	 
	 	 	Name:  	Benjaman Johnson 	 
	 	 	Title:  	Deal Team LeaderEX-4.7

Exhibit 4.7

STOCKHOLDERS AGREEMENT

     STOCKHOLDERS AGREEMENT made this 19th day of July, 2006 by and among (i) Cardiovascular
Systems, Inc., a Minnesota corporation (the “Company”), (ii) certain holders of Common Stock or
options or warrants to acquire Common Stock whose names are set forth under the heading “Holders”
on Schedule I hereto and each person who shall, after the date hereof, acquire shares of
Common Stock and join in and become a party to this Agreement by executing and delivering to the
Company an Instrument of Accession in the form of Schedule II hereto (the persons described
in this clause (ii) such persons being referred to collectively as the “Holders” and singularly as
a “Holder”); (iii) those persons whose names are set forth under the heading “Investors” on
Schedule I hereto (the persons described in this clause (iii) being referred to
collectively as the “Investors”) and (iv) those persons whose names are set forth under the heading
“Section 5 Holders” on Schedule I hereto (who shall be subject only to Section 5 of this
Agreement and are referred to collectively herein as the “Section 5 Holders.”)

WITNESSETH:

     WHEREAS, the Holders currently own collectively six hundred fifty-one thousand, five hundred
fifty-five (651,555) shares of the Common Stock, no par value per share (the “Common Stock”), of
the Company, options to purchase an aggregate of one million two hundred eighty-nine thousand five
hundred (1,289,500) shares of Common Stock and/or warrants to purchase an aggregate of fifty
thousand eight hundred fifty (50,850) shares of Common Stock; and

     WHEREAS, the Investors are acquiring simultaneously herewith an aggregate of up to 4,378,284
shares of the Company’s Series A Convertible Preferred Stock, no par value (the “Preference
Stock”), pursuant to a certain Series A Convertible Preferred Stock Purchase Agreement dated as of
the date hereof, by and among the Investors and the Company (the “Purchase Agreement”).

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company,
the Holders and the Investors agree as follows:

     1. Prohibited Transfers. The Holders shall not sell, assign, transfer, pledge,
hypothecate, mortgage or dispose of, by gift or otherwise, or in any way encumber, all or any part
of the Shares (as hereinafter defined) owned by them except in compliance with the terms of this
Agreement. For purposes of this Agreement, the term “Shares” shall mean and include all (i) shares
of Common Stock and Preferred Stock of the Company owned by the Holders, whether now outstanding or
hereafter issued in any context, (ii) shares of Common Stock issued or issuable upon conversion of
Preferred Stock and (iii) shares of Common Stock issued or issuable upon exercise or conversion, as
applicable, of stock options, warrants or other convertible securities of the Company, in each case
now owned or subsequently acquired by any Holder or its successors or permitted transferees or
assigns. The Company shall not transfer on its books any shares of its capital stock which are
subject to this Agreement unless the provisions hereof

 

 

Stockholders
Agreement – Page 2

have been complied with in full. Any purported transfer by a Holder of capital stock of the
Company without full compliance with the provisions of this Agreement shall be null and void.

     2. Right of First Refusal on Dispositions by the Holders. If at any time any of the
Holders wishes to sell, assign, transfer or otherwise dispose of any or all Shares owned by him
pursuant to the terms of a bona fide offer received from a third party, he shall submit a written
offer to sell such Shares to the Company and the Investors on terms and conditions, including
price, not less favorable to the Company and the Investors than those on which he proposes to sell
such Shares to such third party (the “Offer”). The Offer shall disclose the identity of the
proposed purchaser or transferee, the Shares proposed to be sold or transferred, the agreed terms
of the sale or transfer, including price, and any other material facts relating to the sale or
transfer. Within fifteen (15) days after receipt of the Offer, the Company shall give notice to
the Holder of its intent to purchase all or any portion of the offered Shares on the same terms and
conditions as set forth in the Offer. If, for any reason whatever, the Company shall not exercise
its right to purchase all of the offered Shares as provided herein, then each of the Investors
shall have the right to purchase, on the same terms and conditions set forth in the Offer, that
portion of the offered Shares which the Company shall not have agreed to purchase from the Holder
(all such remaining shares being referred to as the “Remaining Offered Shares”) to be determined in
the manner set forth herein. Each Investor shall have the right to purchase that number of the
Remaining Offered Shares as shall be equal to the aggregate Remaining Offered Shares multiplied by
a fraction, the numerator of which is the number of shares of Stock (as defined in Section 7 below)
of the Company then owned by such Investor (including any shares of Stock deemed to be beneficially
owned by such Investor pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934
(“Rule 13d-3”)) and the denominator of which is the aggregate number of shares of said Stock then
issued and outstanding and held by (and deemed to be beneficially owned pursuant to Rule 13d-3 by)
all the Investors. The amount of Shares each Investor or Qualified Transferee, as that term is
defined below, is entitled to purchase under this Section 2 shall be referred to as such Investor’s
“Pro Rata Fraction.” Each Investor shall have the right to transfer his right to any Pro Rata
Fraction or part thereof to any Qualified Transferee. In the event an Investor does not wish to
purchase or to transfer his right to purchase his Pro Rata Fraction, then any Investors who so
elect shall have the right to purchase, on a pro rata basis with any other Investors who so elect,
any Pro Rata Fraction not purchased by an Investor or Qualified Transferee. Each Investor shall
act upon the Offer as soon as practicable after receipt from the Company of notice that it has not
elected to purchase all of the offered Shares, and in all events within fifteen (15) days after
receipt thereof. Each Investor shall have the right to accept the Offer as to all or part of the
Remaining Offered Shares offered thereby. In the event that an Investor shall elect to purchase
all or part of the Remaining Offered Shares covered by the Offer, said Investor shall individually
communicate in writing such election to purchase to whichever of the Holders has made the Offer,
which communication shall be delivered by hand or mailed to such Holder at the address set forth in
Section 9 below and shall, when taken in conjunction with the Offer be deemed to constitute a
valid, legally binding and enforceable agreement for the sale and purchase of the Shares covered
thereby.

     In the event that the Company and the Investors, taken together, do not purchase all of the
Shares offered by a Holder pursuant to and within forty-five (45) days after the Offer, each such
agreement to purchase the Shares shall be deemed null and void, and such Shares may be sold by such
Holder at any time within 90 days after the expiration of the Offer, but subject to the

 

 

Stockholders
Agreement – Page 3

provisions of Section 3 below. Any such sale shall be at not less than the price and upon
other terms and conditions, if any, not more favorable to the purchaser than those specified in the
Offer. Any Shares not sold within such 90-day period shall continue to be subject to the
requirements of a prior offer and re-sale pursuant to this Section.

     For purposes of this Section 2, a “Qualified Transferee” of an Investor shall mean any person
(i) who is an Investor, (ii) who is an “affiliated person” of an Investor, as that term is defined
in the Investment Company Act of 1940, (iii) who is a partner of an Investor, or (iv) who acquires
at least 100,000 shares of Preference Stock (as adjusted for stock splits, stock dividends,
reclassifications, recapitalizations or other similar events).

     3. Right of Participation in Sales by Holders. If at any time any Holder wishes to
sell, or otherwise dispose of any Shares owned by him to any person (the “Purchaser”) in a
transaction which is subject to the provisions of Section 2 hereof and subject to the exercise of
rights under such Section 2, each Investor shall have the right to require, as a condition to such
sale or disposition, that the Purchaser purchase from said Investor at the same price per Share and
on the same terms and conditions as involved in such sale or disposition by the Holder (provided
that if an Investor wishes to sell Preference Stock, the price set forth in the Offer shall be
appropriately adjusted based on the conversion ratio of the Preference Stock into Common Stock) the
same percentage of shares of Stock owned (and deemed to be beneficially owned under Rule 13d-3) by
such Investor as such sale or disposition represents with respect to said shares of Stock then
owned by whichever of the Holders is selling. Each Investor wishing so to participate in any such
sale or disposition shall notify the selling Holder of such intention as soon as practicable after
receipt of the Offer made pursuant to Section 2, and in all events within fifteen (15) days after
receipt thereof. In the event that an Investor shall elect to participate in such sale or
disposition, said Investor shall individually communicate such election to the selling Holder,
which communication shall be delivered by hand or mailed to such Holder at the address set forth in
Section 9 below. The Holder and/or each participating Investor shall sell to the Purchaser all, or
at the option of the Purchaser, any part of the Stock proposed to be sold by them at not less than
the price and upon other terms and conditions, if any, not more favorable to the Purchaser than
those originally offered; provided, however, that any purchase of less than all of such Stock by
the Purchaser shall be made from the Holder and/or each participating Investor based upon a
fraction, the numerator of which is the number of shares of Stock of the Company then owned by the
Holder or such participating Investor (including any shares of Stock deemed to be owned under Rule
13d-3) and the denominator of which is the aggregate number of shares of Stock held by (and deemed
to be held pursuant to Rule 13d-3) the Holder and all of the participating Investors. The selling
Holder or Investor shall use his or its best efforts to obtain the agreement of the Purchaser to
the participation of the participating Investors in the contemplated sale, and shall not sell any
Stock to such Purchaser if such Purchaser declines to permit the participating Investors to
participate pursuant to the terms of this Section 3. The provisions of this Section 3 shall not
apply to the sale of any Shares by a Holder to an Investor pursuant to an Offer under Section 2.

     4. No Sales in Excess of 10% of a Holder’s Shares. Notwithstanding anything in
Sections 1, 2 or 3 to the contrary, no Holder shall be permitted to sell in excess of 10% of his
holdings in one or a series of transactions without the consent in writing from the holder or
holders of a majority in interest of the Preference Stock, such majority to include Easton Hunt

 

 

Stockholders
Agreement – Page 4

Capital Partners, L.P. (“EHCP”) and Easton Capital Partners, LP (“ECP” and together with EHCP,
“Easton”) and Maverick Fund LDC, Maverick Fund USA, Ltd., and Maverick Fund II, Ltd.
(collectively, “Maverick”).

     5. Drag-Along Rights.

     (a) At any time prior to a Qualified Public Offering, in the event that (i) stockholders
representing at least fifty percent (50%) of the voting power of the then outstanding shares
(excluding those of the Holders and the Section 5 Holders), vote to approve any Sale Transaction
(as defined below), or (ii) if after the fourth anniversary of the date hereof, the Investors
holding a majority of the Preference Stock, such majority to include Easton and Maverick, request
that the Holders and the Section 5 Holders vote to approve any Sales Transaction, then at the
request of Easton and Maverick, each Holder and Section 5 Holder (collectively the “Drag-Along
Stockholders”) will be required to (1) vote such Drag-Along Stockholders’ shares of capital
stock in favor thereof, and otherwise consent to and raise no objection to such transaction, and
waive any dissenters’ rights, appraisal rights or similar rights that such Drag-Along Stockholder
may have in connection therewith, and (2) sell such Drag-Along Stockholder’s shares, and take all
necessary and desirable actions as directed by the Board of Directors of the Company and the
Investors representing at least two-thirds of the voting power of the then outstanding shares of
the Investors, in connection with the consummation of such Sale Transaction, including, to the
extent applicable, granting consents to such Sale Transaction under other agreements between the
Company and such Drag-Along Stockholders or voting the Stock of such Drag-Along Stockholders in
favor of such Sale Transaction in votes (whether at a meeting of stockholders or by written
consent) provided for under the Company’s charter documents, executing a purchase agreement and
selling, exchanging or otherwise transferring all of the shares of the Company’s capital stock (or
warrants or other rights to subscribe for or purchase capital stock) held by such Drag-Along
Stockholders; provided, however that no Drag-Along Stockholder shall be required
hereunder to indemnify or otherwise accept liability to any person for damages in excess of amounts
actually received by such Drag-Along Stockholder in connection with any Sale Transaction.

     (b) If a Drag-Along Stockholder fails or refuses to vote or sell, as the case may be, his, her
or its shares of capital stock of the Company as required by the terms of this Section 5, the Chief
Executive Officer or President of the Company shall be deemed to be (i) granted by such Drag-Along
Stockholder an irrevocable proxy, coupled with an interest, to vote such Drag-Along Stockholder’s
shares of capital stock in accordance with this Section 5(a), or (ii) appointed attorney-in-fact to
sell (including the power to sign and deliver appropriate documentation) such Drag-Along
Stockholder’s shares, all in accordance with this Section 5.

     (c) For the purposes of this Section 5, “Sale Transaction” shall mean the
consolidation or merger of the Company into or with any other entity (other than with or into a
wholly-owned domestic subsidiary of the Company) where the stockholders of the Company immediately
prior to such transaction shall own less than 50% of the outstanding voting capital stock of the
surviving entity immediately following the closing of such transaction (provided that in
calculating the percentage ownership of the surviving entity, immediately following the closing of
such transaction, held by the stockholders of the Company, any shares of capital stock of any other
constituent entity owned by the stockholders of the Company prior to the transaction

 

 

Stockholders Agreement – Page 5

shall be excluded), or the sale, lease or other disposition by the Company or the Company’s
stockholders of all or substantially all of its assets or exclusive license of all or substantially
all the Company’s material intellectual property, in a single transaction or a series of related
transactions, or the sale, exchange or transfer by the Company or the Company’s stockholders, in a
single transaction or series of related transactions, of capital stock representing a majority of
the voting power at elections of directors of the Company, and/or any other similar sale or
reorganization transaction.

     6. Permitted Transfers.

          (i) Anything herein to the contrary notwithstanding, the provisions of Sections 1, 2 and 3
shall not apply to: (a) any transfer of Shares by a Holder by gift or bequest or through
inheritance to, or for the benefit of, any member or members of his or her immediate family (which
shall include any spouse, lineal ancestor or descendant or sibling) or to a trust, partnership or
limited liability company for the benefit of such members; (b) any transfer of Shares by a Holder
to a trust in respect of which he or she serves as trustee, provided that the trust instrument
governing said trust shall provide that such Holder, as trustee, shall retain sole and exclusive
control over the voting and disposition of said Shares until the termination of this Agreement; (c)
any sale of Common Stock in a public offering pursuant to a registration statement filed by the
Company with the Securities and Exchange Commission; and (d) any repurchase of shares of Common
Stock from officers, employees, directors or consultants of the Company which are subject to
restrictive stock purchase agreements under which the Company has the option to repurchase such
shares upon the occurrence of certain events, including termination of employment.

          (ii) In the event of any such transfer, other than pursuant to subsection (i)(c) of this
Section 6, the transferee of the Shares shall hold the Shares so acquired with all the rights
conferred by, and subject to all the restrictions imposed by this Agreement, and as a condition to
such transfer, each such transferee shall execute and deliver an instrument of accession in the
form of Schedule II agreeing to be bound by the provisions of this Agreement.

     7. Election of Directors.

     Each of the parties hereto agrees to vote all of the Stock (as hereinafter defined) of the
Company now owned or hereafter acquired by such party (and attend, in person or by proxy, all
meetings of stockholders called for the purpose of electing directors), and the Company agrees to
take all actions (including, but not limited to the nomination of specified persons) to cause and
maintain the election to the Board of Directors of the Company, to the extent permitted pursuant to
the Company’s certificate of incorporation, the following:

          (i) the holders of the Common Stock, voting as a separate class, shall be entitled to elect
two (2) directors of the Company, who shall be designated by the Company and who initially shall be
Gary Petrucci and Roger Howe;

          (ii) the then current Chief Executive Officer of the Company;

          (iii) so long as at least 20% of the Preference Stock remains outstanding, the holders of the
Preference Stock, voting as a separate class, shall be entitled to elect two (2)

 

 

Stockholders
Agreement – Page 6

directors of the Company, and if less than 20% but at least 10% of the Preference Stock
remains outstanding, the holders of the Preference Stock, voting as a separate class, shall be
entitled to elect one (1) director of the Company;

          (iv) three (3) outside board members with relevant industry experience and not otherwise
affiliated persons (as defined in Section 2) of the Company or of any Investor, who shall initially
be Glen Nelson, Geoffrey Hartzler and Larry Lehmkuhl, and provided that any successor to any of
these directors shall be mutually acceptable to the Company and to the directors elected pursuant
to (iii) above, and .

     Each of the parties further covenants and agrees to vote, to the extent possible, all shares
of Stock of the Company now owned or hereafter acquired by such party so that the Company’s Board
of Directors shall consist of no more than eight (8) members.

     So long as Easton holds at least 20% of the Preference Stock that it originally purchased,
Easton shall be entitled to designate one of the directors elected pursuant to (iii) above, who
shall initially be John Friedman (the “Easton Director”). So long as Maverick holds at least 20%
of the Preference Stock that Maverick originally purchased, Maverick shall be entitled to designate
one of the directors elected pursuant to (iii) above, who shall initially be Christy Wyskiel. In
the event that either Easton or Maverick loses its right to designate a director by falling below
the 20% threshold stated in the preceding sentences of this paragraph, the director or directors to
be elected to fill the resulting vacancy or vacancies shall be determined by majority vote of the
holders of the Preference Stock.

     In the absence of any designation from the persons or groups so designating directors as
specified above, the director previously designated by them and then serving shall be reelected if
still eligible to serve as provided herein.

     No party hereto shall vote to remove any member of the Board of Directors designated in
accordance with the aforesaid procedure unless the persons or groups so designating directors as
specified above so vote, and, if such persons or groups so vote then the non-designating party or
parties shall likewise so vote.

     Any vacancy on the Board of Directors created by the resignation, removal, incapacity or death
of any person designated under this Section 7 shall be filled by another person designated in a
manner so as to preserve the constituency of the Board as provided above.

     8. Board Observer Rights. The Company shall invite Mitsui & Co. Venture Partners II,
L.P. (“Mitsui”) to send its representative to attend in a nonvoting observer capacity all meetings
of the Company’s Board of Directors and committees thereof and, in this respect, shall give Mitsui
copies of all notices, minutes, consents and other material that it provides to its Directors and
committee members; provided, however, that the Company reserves the right to exclude Mitsui’s
representative from access to any material or meeting or portion thereof if the Company believes in
good faith based on advice of counsel that such exclusion is necessary to preserve the
attorney-client privilege or to comply with the board’s fiduciary duties.

     9. Termination. This Agreement, and the respective rights and obligations of the
parties hereto, shall terminate upon the earlier of (i) the completion of a fully underwritten,
firm

 

 

Stockholders
Agreement – Page 7

commitment public offering pursuant to an effective registration under the Securities Act
covering the offering or sale by the Company of its Common Stock in which (x) the net proceeds
received by the Company shall be at least $40 million, and (y) the price paid by the public for
such shares shall be at least three (3) times the original purchase price per share paid to the
Company for the Preference Stock pursuant to the Purchase Agreement (appropriately adjusted to
reflect any subdivision or combination of the Common Stock) (a “Qualified Public Offering) and (ii)
such time as less than 20% of the Preference Stock remains outstanding, provided that in the event
of termination pursuant to this clause (ii) each Investor holding Preference Stock shall continue
to have the right of participation set forth in Section 3 hereof with respect to any proposed sale
or disposition by a Holder of more than 25% of that Holder’s Shares and each of the parties hereto
shall continue to comply with Section 7 to elect one person to represent the Investors until less
than 10% of the Preference Stock remains outstanding.

     10. Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been given when delivered or mailed by first class, registered or certified
mail (air mail if to or from outside the United States), return receipt requested, postage prepaid,
if to each Holder at his respective address set forth on Schedule I hereto or on the Instrument of
Accession pursuant to which he became a party to this Agreement, and if to the Investors, at their
respective addresses set forth on Schedule I hereto or to such other address as the addressee shall
have furnished to the other parties hereto in the manner prescribed by this Section 10.

     11. Lock-up Agreement. Each of the Holders and the Investors hereby agrees in
connection with a Qualified Public Offering, upon the request of the principal underwriter managing
the initial public offering of the Company, not to sell publicly any Shares held immediately prior
to the effectiveness of the registration statement for such initial public offering without the
prior written consent of such underwriter for a period of time (not to exceed one hundred eighty
(180) days) from the consummation of such Qualified Public Offering as the underwriter may specify,
in all events subject to all relevant provisions of that certain Investor Rights Agreement dated as
of the date hereof.

     12. Failure to Deliver Shares. If a Holder becomes obligated to sell any Shares owned
by, or held for the benefit of, such Holder to an Investor or a Qualified Transferee under this
Agreement and fails to deliver such shares in accordance with the terms of this Agreement, such
Investor may, at its option, in addition to all other remedies it may have, send to the Company for
the benefit of such Holder the purchase price for such Shares as is herein specified. Thereupon,
the Company upon written notice to said Holder, (a) shall cancel on its books the certificate(s)
representing the Shares to be sold and (b) shall issue, in lieu thereof, in the name of such
Investor, a new certificate(s) representing such Shares, and thereupon all of said Holder’s rights
in and to such shares shall terminate. The Company may exercise a similar remedy in enforcing its
rights under Section 2. If a Holder transfers any shares to a Purchaser in violation of this
Agreement, the Company may, at the election of a majority of the disinterested members of the Board
of Directors, cancel on the books of the Company any shares of capital stock then held by such
Holder, and any such breaching Holder agrees to purchase from the Purchasers and any transferee a
number of shares of capital stock equal to the amount so transferred in violation of this
Agreement.

 

 

Stockholders Agreement – Page 8

     13. Specific Performance. The rights of the parties under this Agreement are unique
and, accordingly, the parties shall, in addition to such other remedies as may be available to any
of them at law or in equity, have the right to enforce their rights hereunder by actions for
specific performance to the extent permitted by law.

     14. Legend. The certificates representing the Shares shall bear on their face a
legend indicating the existence of the restrictions imposed hereby.

     15. Entire Agreement. This Agreement and the Purchase Agreement (including any and
all exhibits, schedules and other instruments contemplated thereby) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all prior agreements and
understandings between them or any of them as to such subject matter.

     16. Waivers and Further Agreements. Any of the provisions of this Agreement may be
waived by an instrument in writing executed and delivered by Investors holding at least two-thirds
in interest of the Common Stock (including shares of Common Stock into which any shares of
Preference Stock are convertible) then held or deemed to be held by all Investors. Any waiver by
any party of a breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach of that provision or of any other provision hereof. Each of the
parties hereto agrees to execute all such further instruments and documents and to take all such
further action as any other party may reasonably require in order to effectuate the terms and
purposes of this Agreement. Notwithstanding the foregoing, no waiver approved in accordance
herewith shall be effective if and to the extent that such waiver grants to any one or more
Investors any rights more favorable than any rights granted to all other Investors or otherwise
treats any one or more Investors differently than all other Investors and in no event shall the
provisions of Section 8 be waived without the prior written consent of Mitsui.

     17. Amendments. Except as otherwise expressly provided herein, this Agreement may not
be amended except by an instrument in writing executed by (i) the Company, (ii) Investors holding
at least a majority in interest of the shares of Common Stock issued or issuable to the Investors
(including shares of Common Stock into which any shares of Preference Stock are convertible), such
majority to include Easton and Maverick, and (iii) Holders holding a majority of the Shares subject
to this Agreement. Notwithstanding the foregoing, no amendment approved in accordance with clause
(i) above shall be effective if and to the extent that such amendment creates any additional
affirmative obligations to be complied with by any or all of the Investors and in no event shall
Section 8 be amended without the prior written consent of Mitsui.

     18. Assignment; Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs, executors, legal
representatives, successors and permitted transferees, except as may be expressly provided
otherwise herein.

     19. Severability. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision of this

 

 

Stockholders
Agreement – Page 9

Agreement and such invalid, illegal and unenforceable provision shall be reformed and
construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

     20. 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.

     21. Section Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

     22. Governing Law. This Agreement shall be construed and enforced in accordance with
and governed by the General Corporation Law of the State of New York as to matters within the scope
thereof, and as to all other matters shall be construed and enforced in accordance with and
governed by the internal laws of the State of New York, without regard to its principles of
conflicts of laws.

     23. Additional Parties. Any purchaser of Preference Stock pursuant to the Purchase
Agreement shall become a party to this Agreement by executing and delivering to the Company a
counterpart to this Agreement. Upon such execution and delivery, such purchaser shall be deemed to
be an “Investor” hereunder with all of the rights and obligations thereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

Stockholders
Agreement – Page 10

     IN WITNESS WHEREOF, the undersigned have executed this Stockholders Agreement as a sealed
instrument as of the day and year first above written.

	 	 	 	 	 
	 	COMPANY

CARDIOVASCULAR SYSTEMS, INC.

 	 
	 	By:  	/s/ Michael J. Kallok
 	 
	 	 	Name:  	Michael J. Kallok 	 
	 	 	Title:  	Chief Executive Officer and
President 	 

 

 

Stockholders
Agreement – Page 11

	 	 	 	 	 

     IN WITNESS WHEREOF, the undersigned have executed this Stockholders Agreement as a sealed
instrument as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS	 	 
	 
	 	 	 	 	 	 
	 	 	EASTON HUNT CAPITAL PARTNERS, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	EHC GP, L.P. its General Partner	 	 
	 

	 	By:
	 	EHC GP, Inc., its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Charles B. Hughes	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Charles B. Hughes	 	 
	 

	 	 	 	Title: VP	 	 
	 
	 	 	 	 	 	 
	 	 	EASTON CAPITAL PARTNERS, LP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	ECP GP, LLC	 	 
	 

	 	By:
	 	ECP GP, Inc., its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Charles B. Hughes	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Charles B. Hughes	 	 
	 

	 	 	 	Title: VP	 	 

 

 

Stockholders
Agreement – Page 12

     IN WITNESS WHEREOF, the undersigned have executed this Stockholders Agreement as a sealed
instrument as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS	 	 
	 
	 	 	 	 	 	 
	 	 	MAVERICK FUND, L.D.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Maverick Capital, Ltd.	 	 
	 

	 	 	 	Its Investment Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John T. McCafferty	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John T. McCafferty	 	 
	 

	 	 	 	Title: Limited Partner & General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	MAVERICK FUND USA, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Maverick Capital, Ltd.	 	 
	 

	 	 	 	Its Investment Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John T. McCafferty	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John T. McCafferty	 	 
	 

	 	 	 	Title: Limited Partner & General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	MAVERICK FUND II, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Maverick Capital, Ltd.	 	 
	 

	 	 	 	Its Investment Advisor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John T. McCafferty	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: John T. McCafferty	 	 
	 

	 	 	 	Title: Limited Partner & General Counsel	 	 

 

 

Stockholders Agreement – Page 13

     IN WITNESS WHEREOF, the undersigned have executed this Stockholders Agreement as a sealed
instrument as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	INVESTORS	 	 
	 
	 	 	 	 	 	 
	 	 	MITSUI & CO. VENTURE PARTNERS II, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Mitsui & Co. Venture Partners, Inc.	 	 
	 

	 	 	 	Its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Koichi Ando	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Koichi Ando	 	 
	 

	 	 	 	Title: President & CEO	 	 

 

 

Stockholders Agreement – Page 14

     IN WITNESS WHEREOF, the undersigned have executed this Stockholders Agreement as a sealed
instrument as of the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	HOLDERS 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	APPLECREST PARTNERS LTD PARTNERSHIP	 	 	 	LEHMKUHL FAMILY LIMITED PARTNERSHIP	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gary M. Petrucci
	 	 	 	By:
	 	/s/ Larry A. Lehmkuhl	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name: Gary M. Petrucci
	 	 	 	 	 	Name: Larry A. Lehmkuhl	 	 
	 

	 	Title: General Partner
	 	 	 	 	 	Title: General Partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ James E. Flaherty	 	 	 	/s/ Larry A. Lehmkuhl	 	 
	 	 	 	 	 	 	 
	James E. Flaherty	 	 	 	Larry A. Lehmkuhl	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Judith L. Flaherty	 	 	 	/s/ Gary M. Petrucci	 	 
	 	 	 	 	 	 	 
	Judith L. Flaherty	 	 	 	Gary M. Petrucci	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	GDN HOLDINGS, LLC	 	 	 	SONORA WEB LIMITED LIABILITY PARTNERSHIP
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John Flottmeier
	 	 	 	By:
	 	/s/ Roger J. Howe	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name: John Flottmeier
	 	 	 	 	 	Name: Roger J. Howe	 	 
	 

	 	Title: Attorney-in-fact for Glen D.
Nelson, Governor 
          and Chief Managing Member
	 	 	 	 	 	Title: CEO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	/s/ Roger J. Howe	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Roger J. Howe, Ph. D.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Geoffrey O. Hartzler	 	 	 	/s/ Robert J. Thatcher	 	 
	 	 	 	 	 	 	 
	Geoffrey O. Hartzler, individually and as Trustee,	 	 	 	Robert J. Thatcher	 	 
	Geoffrey O. Hartzler
Rev. Trust dtd 1/8/97, as amended	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Michael J. Kallok	 	 	 	/s/ Cindy M. Setum	 	 
	 	 	 	 	 	 	 
	Michael J. Kallok	 	 	 	Cindy M. Setum, Ph.D.	 	 

 

 

Stockholders Agreement – Page 15

     IN WITNESS WHEREOF, the undersigned have executed this Stockholders Agreement as a sealed
instrument as of the day and year first above written.

	 	 	 	 	 
	 	SECTION 5 HOLDERS

 	 
	 	By:  	/s/ Michael J. Kallok
 	 
	 	 	Name:  	Michael J. Kallok, Ph.D. 	 
	 	 	Title:  	Attorney-in-fact for Section 5 Holders
set forth on Schedule I 	 
	 

 

 

SCHEDULE I

CARDIOVASCULAR SYSTEMS, INC.

SCHEDULE OF HOLDERS AND INVESTORS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	No. of	 	 	 	 	 	 
	 	 	Shares of	 	No. of	 	No. of Shares	 	 
	 	 	Common	 	Option/Warrant	 	of Series A	 	No. of Series A
	Names and Addresses	 	Stock	 	Common Shares	 	Preferred Stock	 	Warrant Shares
	HOLDERS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applecrest Partners LTD
Partnership

Attn. Gary Petrucci, General Partner

2975 County Road 24

Long Lake, MN 55419
	 	 	50,000	 	 	 	0	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	James E. Flaherty & Judith L.
Flaherty JTWROS

3658 Robinwood Terrace

Minnetonka, MN 55305
	 	 	5,000	 	 	 	105,000	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GDN Holdings, LLC

Attn: Glen D. Nelson

301 Carlson Parkway, Suite 315

Minnetonka, MN 55305
	 	 	49,167	 	 	 	2,000	 	 	 	131,349	 	 	 	18,652	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Geoffrey O. Hartzler, TTEE

     Geoffrey O. Hartzler Rev Trust dtd
1/8/97, as amended

2600 Verona Road

Mission Hills, KS 66208
	 	 	177,063	 	 	 	3,600	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Geoffrey O. Hartzler

2600 Verona Road

Mission Hills, KS 66208
	 	 	0	 	 	 	119,000	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael J. Kallok(1)

2910 13th Terrace NW

St. Paul, MN 55112
	 	 	5,000	 	 	 	405,500	 	 	 	0	 	 	 	0	 

 

 

Stockholders
Agreement – Page 17

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	No. of	 	 	 	 	 	 
	 	 	Shares of	 	No. of	 	No. of Shares	 	 
	 	 	Common	 	Option/Warrant	 	of Series A	 	No. of Series A
	Names and Addresses	 	Stock	 	Common Shares	 	Preferred Stock	 	Warrant Shares
	Lehmkuhl Family Limited
Partnership

134 Dellwood Avenue

Dellwood, MN 55110
	 	 	58,000	 	 	 	0	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Larry A. Lehmkuhl

134 Dellwood Avenue

Dellwood, MN 55110
	 	 	0	 	 	 	95,000	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gary M. Petrucci(2)

c/o Piper Jaffray & Co.

800 Nicollet Mall, Ste. 800

Minneapolis, MN 55440-7020
	 	 	265,825	 	 	 	311,250	 	 	 	36,124	 	 	 	5,130	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sonora Web Limited Liability
Partnership

Attn. Roger J. Howe, Ph.D.

5375 Mira Sorrento Place, Ste. 100

San Diego, CA 92121
	 	 	41,500	 	 	 	13,000	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Roger J. Howe, Ph.D.

5375 Mira Sorrento Place, Ste. 100

San Diego, CA 92121
	 	 	0	 	 	 	135,000	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Robert J. Thatcher

2106 Arnold Palmer Drive

Blaine, MN 55449
	 	 	0	 	 	 	100,000	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cindy M. Setum, Ph.D.

17410 29th Ave. N.

Plymouth, MN 55447
	 	 	0	 	 	 	75,000	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Totals Held by Holders
	 	 	651,555	 	 	 	1,364,350	 	 	 	167,473	 	 	 	23,782	 

 

			
	(1)	 	Includes 5,000 shares of Common Stock and a warrant to purchase 500 shares held by Charles
Schwab & Co., Inc. Cust. FBO Michael J. Kallok IRA.
	 
	(2)	 	Includes 39,080 shares of Common Stock and warrants to purchase 11,250 shares held by USB
Piper Jaffray Cust. FBO Gary M. Petrucci IRA; Series A Stock and Series A warrants also held
by USB Piper Jaffray Cust. FBO Gary M. Petrucci IRA.

 

 

Stockholders
Agreement – Page 18

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	No. of	 	 	 	 	 	 
	 	 	Shares of	 	No. of	 	No. of Shares	 	 
	 	 	Common	 	Option/Warrant	 	of Series A	 	No. of Series A
	Names and Addresses	 	Stock	 	Common Shares	 	Preferred Stock	 	Warrant Shares
	SECTION 5 HOLDERS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Jeffrey Reiss

2965 Spindletop Drive

Cumming, GA 30041
	 	 	5,000	 	 	 	0	 	 	 	7,226	 	 	 	1,026	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Robert J. Foster

3308 Belden Drive

St. Anthony, MN 55418
	 	 	2,500	 	 	 	0	 	 	 	17,890	 	 	 	2,540	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael J. Murry Investments, LLC

7575 Golden Valley Road, Suite 119

Golden Valley, MN 55427
	 	 	0	 	 	 	0	 	 	 	15,443	 	 	 	2,193	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Loyal M. Peterman, Jr.

8565 Dunsinane Dr.

Dublin, OH 43017
	 	 	25,000	 	 	 	0	 	 	 	20,564	 	 	 	2,920	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dave B. Radovich

27612 Schoolhouse Rd.

Golden, CO 80403
	 	 	5,000	 	 	 	500	 	 	 	7,203	 	 	 	1,023	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Daryl L. Peterman

251 Daniel Burnham Sq., #605

Columbus, OH 43215
	 	 	0	 	 	 	0	 	 	 	1,027	 	 	 	146	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael J. Antonello

3013 13th Terrace

New Brighton, MN 55112
	 	 	99,883	 	 	 	17,450	 	 	 	35,937	 	 	 	5,103	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	David Brink

937 Via Los Padres

Santa Barbara, CA 93111
	 	 	40,000	 	 	 	0	 	 	 	10,260	 	 	 	1,457	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Leah Kaplan-Samuels and
Leonard Samuels JTWROS

1011 Centennial Road

Penn Valley, PA 19072
	 	 	0	 	 	 	0	 	 	 	35,805	 	 	 	5,084	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Thomas Kelleher

18885 Brookwood Road

Prior Lake, MN 55372
	 	 	0	 	 	 	0	 	 	 	20,444	 	 	 	2,903	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pierson M. Grieve

80 S. 8th Street, Suite 4900

Minneapolis, MN 55402
	 	 	0	 	 	 	0	 	 	 	8,949	 	 	 	1,271	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Jay M. Ovsak

720 N. 5th St., Box 290

Breckenridge, MN 56520
	 	 	0	 	 	 	0	 	 	 	4,478	 	 	 	636	 

 

 

Stockholders
Agreement – Page 19

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	No. of	 	 	 	 	 	 
	 	 	Shares of	 	No. of	 	No. of Shares	 	 
	 	 	Common	 	Option/Warrant	 	of Series A	 	No. of Series A
	Names and Addresses	 	Stock	 	Common Shares	 	Preferred Stock	 	Warrant Shares
	Gerald E. Bowers

4852 Irving Ave. S.

Minneapolis, MN 55419
	 	 	84,500	 	 	 	1,800	 	 	 	8,947	 	 	 	1,270	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael D. Aafedt

14 Forestdale Road

Minneapolis, MN 55410
	 	 	27,500	 	 	 	0	 	 	 	4,473	 	 	 	635	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Paul W. Schaffer

10408 Zion Ave. S.

Bloomington, MN 55437
	 	 	0	 	 	 	0	 	 	 	10,216	 	 	 	1,451	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Larry Brandt and
Judy Brandt JTWROS

15231 Edgewater Circle

Prior Lake, MN 55372
	 	 	12,500	 	 	 	0	 	 	 	8,943	 	 	 	1,270	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	James R. Gray

5429 Highwood Dr. W.

Minneapolis, MN 55436-1224
	 	 	58,500	 	 	 	0	 	 	 	3,064	 	 	 	435	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Patrick J. Toutant

3842 Cottonwood Drive

Eau Claire, WI 54701
	 	 	0	 	 	 	0	 	 	 	15,320	 	 	 	2,175	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CSI Investment, LLC

Attn: Daniel J. Egan, Chief Manager

6225 Sheridan Ave. S.

Richfield, MN 55423
	 	 	0	 	 	 	0	 	 	 	16,402	 	 	 	2,329	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Morgan Schleif

8173 Xene Lane

Osseo, MN 55311
	 	 	0	 	 	 	0	 	 	 	3,569	 	 	 	507	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Robert K. McCrea, Jr.

19000 24th Ave. N.

Plymouth, MN 55447
	 	 	0	 	 	 	0	 	 	 	5,351	 	 	 	760	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael Adrian

37843 County Road 9

Mountain Lake, MN 56159
	 	 	50,000	 	 	 	5,000	 	 	 	8,943	 	 	 	1,270	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Michael Barish

2401 East Second Ave., #400

Denver, CO 80206
	 	 	0	 	 	 	0	 	 	 	44,474	 	 	 	6,315	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	H. Leigh Severance

14282 E. Caley Ave.

Aurora, CO 80016
	 	 	0	 	 	 	0	 	 	 	22,208	 	 	 	3,154	 

 

 

Stockholders
Agreement – Page 20

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	No. of	 	 	 	 	 	 
	 	 	Shares of	 	No. of	 	No. of Shares	 	 
	 	 	Common	 	Option/Warrant	 	of Series A	 	No. of Series A
	Names and Addresses	 	Stock	 	Common Shares	 	Preferred Stock	 	Warrant Shares
	H. Leigh Severance, Trustee, 

     H. L. Severance, Inc. Profit Sharing
Plan and Trust

14282 E. Caley Ave.

Aurora, CO 80016
	 	 	0	 	 	 	0	 	 	 	13,325	 	 	 	1,892	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	H. Leigh Severance, Trustee,

     H. L. Severance, Inc. Pension Plan
and Trust

14282 E. Caley Ave.

Aurora, CO 80016
	 	 	0	 	 	 	0	 	 	 	8,883	 	 	 	1,261	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TMP, LLP

1830 Timber Ridge Dr.

Burnsville, MN 55306
	 	 	106,550	 	 	 	7,000	 	 	 	53,217	 	 	 	7,557	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Andrew J. Iseman and
Shelly D. Iseman JTWROS

780 Harbour Isles Place

North Palm Beach, FL 33410
	 	 	0	 	 	 	0	 	 	 	17,657	 	 	 	2,507	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Steven J. Healy

One Catbird Circle

North Oaks, MN 55127
	 	 	0	 	 	 	0	 	 	 	8,815	 	 	 	1,252	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	David W. Smith Investments, LLC

3 Badwall Lane

North Oaks, MN 55127
	 	 	0	 	 	 	0	 	 	 	5,281	 	 	 	750	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Christopher J. Wagner

6630 Jackson Ave.

Lonsdale, MN 55046
	 	 	0	 	 	 	0	 	 	 	4,387	 	 	 	623	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Randall L. Johnson

4111 Heatherton Pl.

Minnetonka, MN 55345
	 	 	152,464	 	 	 	0	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Kyle B. Berger

12150 County Rd. 30

Waconia, MN 55387
	 	 	100,000	 	 	 	0	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	T. Trent Gegax

105 E. 15th St., #64

New York, NY 10003-2135
	 	 	3,500	 	 	 	0	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gegax Investments, LLC

Gegax Management Systems

P.O. Box 16323

Minneapolis, MN 55416
	 	 	3,640	 	 	 	0	 	 	 	0	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Totals Held by Section 5 Holders
	 	 	776,537	 	 	 	31,750	 	 	 	448,701	 	 	 	63,715	 

 

 

Stockholders Agreement – Page 21

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	No. of	 	 	 	 	 	 
	 	 	Shares of	 	No. of	 	No. of Shares	 	 
	 	 	Common	 	Option/Warrant	 	of Series A	 	No. of Series A
	Names and Addresses	 	Stock	 	Common Shares	 	Preferred Stock	 	Warrant Shares
	INVESTORS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Easton Hunt Capital Partners, L.P.

767 Third Avenue, 7th Floor

New York, NY 10017
	 	 	0	 	 	 	0	 	 	 	612,960	 	 	 	87,040	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Easton Capital Partners, L.P.

767 Third Avenue, 7th Floor

New York, NY 10017
	 	 	0	 	 	 	0	 	 	 	612,960	 	 	 	87,040	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Maverick Fund, L.D.C.

300 Crescent Court, Suite 1700

Dallas, TX 75201
	 	 	0	 	 	 	0	 	 	 	770,212	 	 	 	109,370	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Maverick Fund USA, Ltd.

300 Crescent Court, Suite 1700

Dallas, TX 75201
	 	 	0	 	 	 	0	 	 	 	310,952	 	 	 	44,155	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Maverick Fund II, Ltd.

300 Crescent Court, Suite 1700

Dallas, TX 75201
	 	 	0	 	 	 	0	 	 	 	670,149	 	 	 	95,161	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mitsui & Co. Venture Partners

200 Park Avenue

New York, NY 10166
	 	 	0	 	 	 	0	 	 	 	675,268	 	 	 	95,888	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total Held by Investors
	 	 	0	 	 	 	0	 	 	 	3,652,501	 	 	 	518,654

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