-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NmwWzuIRK1zF6DPnVOaCT16f0Qc6pqRhttljvOH3AJEaUmIsy51QqdH+1LwlnZ3v sfFjg82Iu0MiNWK3Ng0D6g== 0000899140-04-000889.txt : 20040629 0000899140-04-000889.hdr.sgml : 20040629 20040629085930 ACCESSION NUMBER: 0000899140-04-000889 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20040629 GROUP MEMBERS: EV3 LLC GROUP MEMBERS: WARBURG PINCUS & CO. GROUP MEMBERS: WARBURG PINCUS EQUITY PARTNERS LP GROUP MEMBERS: WARBURG PINCUS LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MICRO THERAPEUTICS INC CENTRAL INDEX KEY: 0000311407 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 330569235 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-51975 FILM NUMBER: 04886898 BUSINESS ADDRESS: STREET 1: 2 GOODYEAR CITY: IRVINE STATE: CA ZIP: 92618 BUSINESS PHONE: 9498373700 MAIL ADDRESS: STREET 1: 2 GOODYEAR CITY: IRVINE STATE: CA ZIP: 92618 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MICRO INVESTMENT LLC CENTRAL INDEX KEY: 0001141701 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O WARBURG PINCUS EQUITY PARTNERS LP STREET 2: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: C/O WARBURG PINCUS EQUITY PARTNERS LP STREET 2: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D/A 1 m2571778b.txt AMENDMENT NO. 9 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A (Amendment No. 9) Under the Securities Exchange Act of 1934* MICRO THERAPEUTICS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.001 Par Value - -------------------------------------------------------------------------------- (Title of Class of Securities) 59500W100 - -------------------------------------------------------------------------------- (CUSIP Number) Scott A. Arenare, Esq. Managing Director and General Counsel Warburg Pincus LLC 466 Lexington Avenue New York, New York 10017 (212) 878-0600 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Steven J. Gartner, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019-6099 (212) 728-8000 June 25, 2004 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D/A - ------------------------------ ------------------------------ CUSIP No. 59500W100 Page 2 of 9 pages - ------------------------------ ------------------------------ - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Micro Investment, LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- --------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 24,336,759 OWNED BY EACH --------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH -0- --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 24,336,759 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 24,336,759 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 58.7% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - -------------------------------------------------------------------------------- SCHEDULE 13D/A - ------------------------------ ------------------------------ CUSIP No. 59500W100 Page 3 of 9 pages - ------------------------------ ------------------------------ - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Warburg, Pincus Equity Partners, L.P. I.R.S. #13-3986317 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- --------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 31,896,083 OWNED BY EACH --------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH -0- --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 31,896,083 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 31,896,083 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 71.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN - -------------------------------------------------------------------------------- SCHEDULE 13D/A - ------------------------------ ------------------------------ CUSIP No. 59500W100 Page 4 of 9 pages - ------------------------------ ------------------------------ - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Warburg Pincus & Co. I.R.S. #13-6358475 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- --------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 31,896,083 OWNED BY EACH --------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH -0- --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 31,896,083 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 31,896,083 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 71.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN - -------------------------------------------------------------------------------- SCHEDULE 13D/A - ------------------------------ ------------------------------ CUSIP No. 59500W100 Page 5 of 9 pages - ------------------------------ ------------------------------ - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Warburg Pincus LLC I.R.S. #13-3536050 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- --------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 31,896,083 OWNED BY EACH --------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH -0- --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 31,896,083 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 31,896,083 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 71.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - -------------------------------------------------------------------------------- SCHEDULE 13D/A - ------------------------------ ------------------------------ CUSIP No. 59500W100 Page 6 of 9 pages - ------------------------------ ------------------------------ - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) ev3 LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) N/A - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- --------------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 24,336,759 OWNED BY EACH --------------------------------------------------------------- REPORTINIG 9 SOLE DISPOSITIVE POWER PERSON WITH -0- --------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 24,336,759 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 24,336,759 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 58.7% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - -------------------------------------------------------------------------------- This Amendment No. 9 amends the Schedule 13D originally filed on June 5, 2001, as amended by Amendment No. 1, filed on June 21, 2001, as further amended by Amendment No. 2, filed on July 27, 2001, as further amended by Amendment No. 3, filed on September 6, 2002, as further amended by Amendment No. 4, filed on October 2, 2002, as further amended by Amendment No. 5, filed on February 21, 2003, as further amended by Amendment No. 6, filed on September 3, 2003, as further amended by Amendment No. 7, filed on December 8, 2003, and as further amended by Amendment No. 8, filed on February 3, 2004 (as so amended, the "Original 13D"), on behalf of ev3 LLC, a Delaware limited liability company ("ev3 LLC"), Micro Investment, LLC, a Delaware limited liability company ("Micro LLC"), Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership (together with three affiliated entities, "WPEP"), Warburg Pincus LLC, a New York limited liability company ("WP LLC"), and Warburg Pincus & Co., a New York general partnership ("WP", and together with WPEP and WP LLC, the "Warburg Pincus Reporting Persons"). This Amendment No. 9 to the Original 13D relates to the common stock, par value $0.001 per share (the "Common Stock"), of Micro Therapeutics, Inc., a Delaware corporation (the "Company"). Unless otherwise indicated herein, each capitalized term used but not defined herein shall have the meaning ascribed to such term in the Original 13D. ev3 LLC, Micro LLC and the Warburg Pincus Reporting Persons are hereinafter collectively referred to as the "Reporting Persons." Item 3. Source and Amount of Funds or Other Consideration. Item 3 of the Original 13D is hereby amended by adding the following paragraph at the end of the discussion: Pursuant to a Note Purchase Agreement, dated as of June 25, 2004, by and among the Company, WPEP and the other investors named therein (the "Note Purchase Agreement"), WPEP agreed to purchase an aggregate principal amount of $10,000,000 of exchangeable promissory notes from the Company (the "Exchangeable Notes"). The Exchangeable Notes accrue interest at 7% per annum, which interest compounds quarterly. Pursuant to the Note Purchase Agreement, the Company has agreed to call a special meeting of its stockholders to approve, among other things, an exchange of the Exchangeable Notes for shares of its Common Stock. If stockholder approval is obtained at the special meeting, the Exchangeable Notes will be exchanged for such number of shares of Common Stock determined by dividing (i) the aggregate principal balance on such Exchangeable Notes plus accrued and unpaid interest thereon at the time of the exchange by (ii) $3.10 (subject to appropriate adjustment in the event of any stock dividend, stock split, stock distribution or combination or other corporate actions having the similar effect with respect to the Common Stock). The holders of the Exchangeable Notes will not be obligated to exchange the notes if, among other things, there shall have occurred any developments in the business of the Company and its subsidiaries which, individually or in the aggregate, has had, or would be reasonably likely to have, a material adverse effect on the Company and its subsidiaries. If stockholder approval is not obtained, then the Exchangeable Notes will remain outstanding pursuant to their terms and will not be exchanged for shares of Common Stock. Concurrent with the execution and delivery of the Note Purchase Agreement, WPEP and Micro LLC entered into a Voting Agreement, dated as of June 25, 2004 (the "Voting Agreement"), with the Company. Pursuant to the Voting Agreement, WPEP and Micro LLC have agreed that, until the termination of the Voting Agreement, they will vote the shares of Common Stock owned by them in favor of, among other things, the issuance of the Common Stock upon exchange of the Exchangeable Notes (as further described in Item 6 herein). For the purpose of this Amendment No. 9 to the Original 13D, it has been assumed that the Exchangeable Notes will be exchanged into 3,225,806 shares of Common Stock (determined by dividing $10,000,000 by $3.10). This assumption, however, does not give effect to interest accruing on the Exchangeable Notes which will also be exchanged for shares of Common Stock determined in the manner summarized above. When and if the Exchangeable Notes are exchanged for shares of Common Stock, an amendment to the Original 13D will be filed reflecting the actual number of shares of Common Stock acquired upon consummation of the exchange. All of the funds required to acquire the Exchangeable Notes held by WPEP were obtained from the working capital of WPEP. A copy of the Note Purchase Agreement is filed as Exhibit 1 hereto. A copy of the form of Exchangeable Note is filed as Exhibit 2 hereto. A copy of the Voting Agreement is filed as Exhibit 3 hereto. The Note Purchase Agreement, the Exchangeable Note and the Voting Agreement are incorporated herein by reference and the foregoing summary of the Note Purchase Agreement, the Exchangeable Note and the Voting Agreement is qualified in its entirety by reference to those exhibits. Item 5. Interest in Securities of the Issuer. Items 5(a), (b) and (c) are hereby amended and restated in their entirety to read as follows: (a) As of June 25, 2004, ev3 LLC and Micro LLC may be deemed to beneficially own 24,336,759 shares of Common Stock, representing 58.7% of the outstanding Common Stock, and the Warburg Pincus Reporting Persons may be deemed to beneficially own 31,896,083 shares of Common Stock, representing 71.4% of the outstanding Common Stock. The foregoing percentage for ev3 LLC and Micro LLC is calculated by dividing (a) the shares of Common Stock ev3 LLC and Micro LLC may be deemed to beneficially own by (b) the 41,428,671 shares of Common Stock outstanding as of April 29, 2004, as represented by the Company in its Form 10-QSB for the quarter ended April 4, 2004 (the "Form 10-QSB"). The foregoing percentage for the Warburg Pincus Reporting Persons is calculated by dividing (x) the shares of Common Stock Warburg Pincus Reporting Persons may be deemed to own by (y) the sum of (i) the 41,428,671 shares of Common Stock outstanding as of April 29, 2004, as represented by the Company in its Form 10-QSB plus (ii) the 3,225,806 shares of Common Stock assumed to be issued upon the exchange of the Exchangeable Notes by WPEP. By reason of their respective relationships with ev3 LLC and each other, each of the Warburg Pincus Reporting Persons may be deemed under Rule 13d-3 of the Exchange Act to own beneficially all of the shares of Common Stock that ev3 LLC owns. (b) Each of ev3 LLC and Micro LLC share the power to vote or to direct the vote and to dispose or to direct the disposition of the 24,336,759 shares of Common Stock ev3 LLC and Micro LLC may be deemed to beneficially own. Each of the Warburg Pincus Reporting Persons shares with ev3 LLC the power to vote or to direct the vote and to dispose or to direct the disposition of 24,336,759 shares of Common Stock ev3 LLC may be deemed to beneficially own. Each of the Warburg Pincus Reporting Persons shares with the other Warburg Pincus Reporting Persons, the power to vote or to direct the vote and to dispose or to direct the disposition of all of the shares of Common Stock it may be deemed to beneficially own. The Reporting Persons are making this single, joint filing because they may be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the Exchange Act. (c) Other than the acquisition of beneficial ownership of 3,225,806 shares of Common Stock by WPEP on June 25, 2004 pursuant to the Note Purchase Agreement, no transactions in the Common Stock were effected during the past sixty days by the Reporting Persons or any of the persons set forth on Schedule I, Schedule II or in Item 2(d) hereto. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Item 6 of the Schedule 13D is hereby amended to add the following: As described in Item 3 hereto, the Company, WPEP and certain other investors a party thereto have entered into the Note Purchase Agreement. Pursuant to the Note Purchase Agreement, the Company has issued the Exchangeable Notes (as described in Item 3 hereto) to WPEP. The information set forth in Item 3 with respect to the Note Purchase Agreement and the Exchangeable Notes is incorporated into this Item 6 by reference. As described in Item 3 hereto, the Company, WPEP and Micro LLC have entered into the Voting Agreement. Pursuant to the Voting Agreement, WPEP and Micro LLC have agreed that, until the termination of the Voting Agreement, they will vote the shares of Common Stock owned by them in favor of (i) the issuance of the Common Stock upon exchange of the Exchangeable Notes and (ii) such other matters as may be necessary or advisable to consummate the transactions contemplated by the Note Purchase Agreement. Pursuant to the Voting Agreement, WPEP and Micro LLC appointed the Company, or any nominee of the Company, as each of WPEP's and Micro LLC's true and lawful attorney and proxy, for and in its name, place and stead, to vote the shares of Common Stock owned by WPEP and Micro LLC in favor of the matters set forth above. The information set forth in Item 3 with respect to the Voting Agreement is incorporated into this Item 6 by reference. Item 7. Material to Be Filed as Exhibits. Exhibit 1. Note Purchase Agreement, dated as of June 25, 2004, by and among the Company, WPEP and the other investors a party thereto. Exhibit 2. Form of Exchangeable Promissory Note. Exhibit 3. Voting Agreement, dated as of June 25, 2004, among WPEP, Micro LLC and the Company. SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: June 25, 2004 EV3 LLC By: /s/ Jim Corbett ---------------- Name: Jim Corbett Title: President and Chief Executive Officer Dated: June 25, 2004 MICRO INVESTMENT, LLC By: ev3 LLC, Managing Member By: /s/ Jim Corbett --------------- Name: Jim Corbett Title: President and Chief Executive Officer Dated: June 25, 2004 WARBURG, PINCUS EQUITY PARTNERS, L.P. By: Warburg Pincus & Co., General Partner By: /s/ Sean D. Carney ------------------- Name: Sean D. Carney Title: Partner Dated: June 25, 2004 WARBURG PINCUS & CO. By: /s/ Sean D. Carney ------------------- Name: Sean D. Carney Title: Partner Dated: June 25, 2004 WARBURG PINCUS LLC By: /s/ Sean D. Carney ------------------- Name: Sean D. Carney Title: Member EX-1 3 m2586020.txt NOTE PURCHASE AGREEMENT EXHIBIT 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NOTE PURCHASE AGREEMENT by and among THE INVESTORS NAMED HEREIN and MICRO THERAPEUTICS, INC. June 25, 2004 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TABLE OF CONTENTS ----------------- SECTION 1. AUTHORIZATION OF SECURITIES....................................1 SECTION 2. PURCHASE AND SALE OF SECURITIES................................1 2.1. Issuance and Sale of Exchangeable Notes........................1 2.2. Closings and Closing Dates.....................................2 SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................2 3.1. Corporate Organization.........................................2 3.2. Subsidiaries...................................................3 3.3. Capitalization.................................................3 3.4. Corporate Proceedings, etc.....................................4 3.5. Consents and Approvals.........................................4 3.6. Absence of Defaults, Conflicts, etc............................4 3.7. Reports and Financial Statements...............................5 3.8. Absence of Certain Developments................................6 3.9. Compliance with Law............................................6 3.10. Litigation.....................................................7 3.11. Absence of Undisclosed Liabilities.............................8 3.12. Change in Ownership............................................8 3.13. Employment Matters.............................................8 3.14. Tax Matters....................................................9 3.15. Intellectual Property..........................................9 3.16. Title to Tangible Assets.......................................9 3.17. Insurance.....................................................10 3.18. Transactions with Related Parties.............................10 3.19. Interest in Competitors.......................................10 3.20. Registration Rights...........................................10 3.21. Private Offering..............................................10 3.22. Brokerage.....................................................11 3.23. Takeover Statute; Rights Plan.................................11 3.24. Nasdaq Compliance.............................................11 3.25. Reporting Status..............................................11 3.26. No Manipulation of Stock......................................11 3.27. Accountants...................................................12 3.28. Transfer Taxes................................................12 3.29. Investment Company............................................12 3.30. Listing.......................................................12 3.31. Material Facts................................................12 SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS...............12 SECTION 5. ADDITIONAL AGREEMENTS OF THE PARTIES..........................14 5.1. Resale of Securities..........................................14 5.2. Covenants Pending Closing.....................................14 5.3. Further Assurance.............................................14 5.4. Indemnity.....................................................15 5.5. Exchange of Exchangeable Notes for Common Stock...............15 5.6. Consents and Approvals; HSR Act; Proxy........................17 5.7. Use of Proceeds...............................................18 5.8. Takeover Statute..............................................18 5.9. Rights Agreement Inapplicable.................................18 5.10. Registration Rights...........................................18 5.11. Registration and Listing......................................19 5.12. Private Offering..............................................19 SECTION 6. INVESTORS' CLOSING CONDITIONS.................................19 6.1. Representations and Warranties................................19 6.2. Compliance with Agreement.....................................20 6.3. Injunction....................................................20 6.4. Counsel's Opinion.............................................20 6.5. Adverse Development...........................................20 6.6. Stockholder Approval..........................................20 6.7. Listing of the Shares.........................................20 6.8. Nasdaq Trading................................................21 6.9. Officers' Certificate.........................................21 6.10. Secretary's Certificate.......................................21 6.11. Approval of Proceedings.......................................21 6.12. Fairness Opinion..............................................21 6.13. Second Closing Date...........................................22 SECTION 7. COMPANY CLOSING CONDITIONS....................................22 7.1. Representations and Warranties................................22 7.2. Compliance with Agreement.....................................22 7.3. Investors' Certificates.......................................22 7.4. Injunction....................................................22 7.5. Stockholder Approval..........................................22 SECTION 8. INTERPRETATION OF THIS AGREEMENT..............................22 8.1. Terms Defined.................................................22 8.2. Accounting Principles.........................................26 8.3. Directly or Indirectly........................................26 8.4. Governing Law.................................................26 8.5. Paragraph and Section Headings................................26 -ii- SECTION 9. MISCELLANEOUS.................................................26 9.1. Notices.......................................................26 9.2. Expenses and Taxes............................................27 9.3. Reproduction of Documents.....................................27 9.4. Termination and Survival......................................28 9.5. Successors and Assigns........................................28 9.6. Entire Agreement; Amendment and Waiver........................28 9.7. Severability..................................................28 9.8. Limitation on Enforcement of Remedies.........................29 9.9. Counterparts..................................................29 Exhibit A Form of Exchangeable Promissory Note Exhibit B Certificate of Incorporation Exhibit C Bylaws Exhibit D Registration Rights Provisions Exhibit E Opinion of Stradling Yocca Carlson & Rauth (delivered at the First Closing) Exhibit F Opinion of Stradling Yocca Carlson & Rauth (delivered at the Second Closing) -iii- MICRO THERAPEUTICS, INC. NOTE PURCHASE AGREEMENT Dated as of June 25, 2004 TO THE INVESTORS WHOSE NAMES APPEAR ON THE SIGNATURE PAGES HERETO Ladies and Gentlemen: Micro Therapeutics, Inc., a Delaware corporation (the "Company"), hereby agrees with the investors named on the signature pages hereto (each, an "Investor" and collectively, the "Investors") as follows: SECTION 1. AUTHORIZATION OF SECURITIES --------------------------- The Company has duly authorized the issue and sale of (i) $21,007,500 aggregate principal amount of the Exchangeable Notes (as defined below), each such Exchangeable Note to be in the form attached hereto as Exhibit A and (ii) the Company's common stock, par value $0.001 per share (the "Common Stock"), issuable upon exchange of the Exchangeable Notes in accordance with the terms of this Agreement. As used herein, the term "Exchangeable Notes" shall mean all exchangeable promissory notes originally delivered pursuant to this Agreement and all notes delivered in substitution or exchange for any such Exchangeable Note and, where applicable, shall include the singular number as well as the plural. References to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Section 8.1 of this Agreement. SECTION 2. PURCHASE AND SALE OF SECURITIES ------------------------------- 2.1. Issuance and Sale of Exchangeable Notes. Subject to the terms and conditions set forth in this Agreement, and in reliance upon the Company's and the Investors' representations set forth below, on the First Closing Date (as defined below), the Company shall sell to each Investor, and each Investor shall purchase from the Company, the Exchangeable Notes in the aggregate principal amount set forth opposite such Investor's name on Schedule 2.1. The sale and purchase of the Exchangeable Notes shall be effected on the First Closing Date by the Company executing and delivering to each Investor, duly registered in such Investor's name or in the name of its nominee or other designee designated in writing to the Company at least one day prior to the First Closing Date, the Exchangeable Notes, against delivery by such Investor to the Company of the aggregate principal amount set forth opposite such Investor's name on Schedule 2.1, by wire transfer of immediately available funds to such account as the Company shall designate in writing addressed to the Investors at least two Business Days prior to the First Closing (as defined below). The parties hereto acknowledge that the Company's agreements with each of the Investors are separate agreements and the sale to each of the Investors are separate sales. 2.2. Closings and Closing Dates -------------------------- (a) First Closing. The closing of the transactions contemplated by Section 2.1 (the "First Closing") shall take place at 10:00 A.M., New York City time, on the second Business Day following the date on which the last to be fulfilled or waived of the conditions set forth in Section 6 and Section 7 hereof pertaining to the First Closing Date shall have been fulfilled or waived in accordance with this Agreement, or on such other date as may be mutually agreed by the Company and the Investors (the "First Closing Date"), at the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York, or such other location as the Investors and the Company shall mutually select. (b) Second Closing. The closing of the transactions contemplated by Section 5.5 (the "Second Closing" and, together with the First Closing, the "Closings" and each, a "Closing") shall take place at 10:00 A.M., New York City time, on the second Business Day following the date on which the last to be fulfilled or waived of the conditions set forth in Section 6 and Section 7 hereof pertaining to the Second Closing Date shall have been fulfilled or waived in accordance with this Agreement, or on such other date as may be mutually agreed by the Company and the Investors (the "Second Closing Date"), at the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York, or such other location as the Investors and the Company shall mutually select. SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY --------------------------------------------- The Company represents and warrants to each Investor that, except as set forth on the correspondingly numbered section of the Disclosure Schedule delivered to the Investors in connection herewith or as disclosed in the Company SEC Reports (as defined herein) filed prior to the date hereof: 3.1. Corporate Organization ---------------------- (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Attached hereto as Exhibit B and Exhibit C, respectively, are true and complete copies of the Certificate of Incorporation and Bylaws of the Company, as amended through the date hereof (collectively, the "Organizational Documents"). (b) The Company has all requisite power and authority to own its properties and to carry on its business as now conducted. The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder. (c) The Company has filed all necessary documents to qualify to do business as a foreign corporation in, and the Company is in good standing under, the laws of each jurisdiction in which the conduct of the Company's business or the nature of the property owned requires such qualification, except where the failure to so qualify would not have a material adverse effect on the business, properties, assets, liabilities, profits, prospects, results of operations or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole (a "Material Adverse Effect"). -2- 3.2. Subsidiaries ------------ Except as set forth in the Company SEC Reports, the Company has no Subsidiaries and no interests or investments in any partnership, trust or other entity or organization. Each Subsidiary has been duly organized, is validly existing and in good standing under the laws of the jurisdiction of its organization, has the corporate power and authority to own its properties and to conduct its business and is duly registered, qualified and authorized to transact business and is in good standing in each jurisdiction in which the conduct of its business or the nature of its properties requires such registration, qualification or authorization; all of the issued and outstanding capital stock or other interests of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable, and is owned by the Company free and clear of any mortgage, pledge, lien, encumbrance, security interest, claim or equity. 3.3. Capitalization -------------- (a) On the date hereof, the authorized capital stock of the Company consists of 70,000,000 shares of its Common Stock and 5,000,000 shares of preferred stock, par value $0.001 per share (the "Preferred Stock"), consisting of 170,000 shares which have been designated as Series A Preferred Stock. The issued and outstanding shares of capital stock of the Company consists of 41,428,671 shares of Common Stock, and no shares of Preferred Stock. (b) All the outstanding shares of capital stock of the Company have been duly and validly issued and are fully paid and non-assessable, and were issued in accordance with the registration or qualification requirements of the Securities Act and any relevant state securities laws or pursuant to valid exemptions therefrom. Upon issuance, sale and delivery as contemplated by this Agreement (i) the Exchangeable Notes will be duly authorized and (ii) the Second Closing Shares (upon receipt of the Stockholder Approval (as defined herein)), will be duly authorized, validly issued, fully paid and non-assessable, and, with respect to both subsections (i) and (ii) above, free and clear of any and all security interests, pledges, liens, charges, claims, options, restrictions on transfer, preemptive or similar rights, proxies and voting or other agreements, or other encumbrances of any nature whatsoever, except for those provided for herein and other than restrictions on transfer imposed by federal or state securities laws. (c) Except for the conversion rights which attach to the Exchangeable Notes and the warrants, options and convertible securities which are listed on Schedule 3.3, on the Closing Dates, there will be no shares of Common Stock or any other equity security of the Company issuable upon conversion, exchange or exercise of any security of the Company or any Subsidiary nor will there be any rights, options, calls or warrants outstanding or other agreements to acquire shares of Common Stock nor will the Company be contractually obligated to purchase, redeem or otherwise acquire any of its outstanding shares. Except as set forth on Schedule 3.3, (i) no stockholder of the Company is entitled to any preemptive or similar rights to subscribe for shares of capital stock of the Company, (ii) no stockholder of the Company has any rights, contractual or otherwise, to designate members of the Company's Board of Directors (the "Board"), other than in accordance with the DGCL, and (iii) there are no stockholder, voting or other agreements relating to the rights and obligations of the Company's stockholders. -3- 3.4. Corporate Proceedings, etc. --------------------------- The Company has the requisite authority to execute, deliver, and perform its obligations under this Agreement and to consummate each of the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the performance by the Company of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by the special independent committee of the Board consisting of Richard Randall and George Wallace (the "Special Committee"), under the authority vested in the Special Committee by the Board. No other corporate or stockholder action (other than the Stockholder Approval (as defined herein)) is necessary to authorize such execution, delivery and performance of this Agreement, and upon such execution and delivery this Agreement shall constitute the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights and general principles of equity. The Company has authorized the issuance and delivery of the Exchangeable Notes and the Second Closing Shares in accordance with this Agreement and, except for receipt of the Stockholder Approval, no further corporate or stockholder action is required in connection with such issuance and delivery. Upon execution and delivery of the Exchangeable Notes, the Exchangeable Notes shall constitute the valid and binding obligation of the Company, enforceable against the Company in accordance with their terms, except that such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights and general principles of equity. 3.5. Consents and Approvals ---------------------- The execution and delivery by the Company of this Agreement, the issuance of any of the Exchangeable Notes and Second Closing Shares, the performance by the Company of its obligations hereunder and the consummation by the Company of the transactions contemplated hereby do not require the Company or any of its Subsidiaries to obtain any consent, approval, clearance or action of, or make any filing, submission or registration with, or give any notice to, any Person or judicial authority, except for the confirmation or approval referred to in Sections 5.5 and 5.6 hereof, which such confirmation or approval the Company shall use its best efforts to obtain within the periods described in Sections 5.5 and 5.6 herein, and except for certain consents and waivers to be obtained from Micro Investment, LLC, a Delaware limited liability company ("Micro Investment"), with respect to the subscription right of Micro Investment to purchase its pro rata portion of securities issued by the Company. 3.6. Absence of Defaults, Conflicts, etc. ------------------------------------ (a) The execution and delivery of this Agreement by the Company does not, and the fulfillment of the terms hereof by the Company, and the issuance, sale and delivery of the Exchangeable Notes and the Second Closing Shares will not, result in a breach of any of the terms, conditions or provisions of, or constitute a default under, or result in the modification of, or permit the acceleration of rights under or termination of, any material Contract of the Company or any of its Subsidiaries (collectively the "Key Agreements and Instruments"), or the -4- Organizational Documents, or (subject to receipt of the Stockholder Approval) any law, ordinance, standard, judgment, rule or regulation of any court or federal, state or foreign regulatory board or body or administrative agency having jurisdiction over the Company or any of its Subsidiaries or over their respective properties or businesses. (b) Neither the Company nor any of its Subsidiaries is in default under or in violation of (and no event has occurred and no condition exists which, upon notice or the passage of time (or both), would constitute a default under) (i) the Organizational Documents, (ii) any Key Agreement and Instrument, (iii) any license, permit or authorization to which the Company or any Subsidiary is a party or by which any of them may be bound or (iv) any order, writ, injunction or decree of any court or any Federal, state, municipal or other domestic or foreign governmental department, commission, board, bureau, agency or instrumentality except, in the case of clause (ii), for defaults or violations which would not have a Material Adverse Effect. 3.7. Reports and Financial Statements -------------------------------- (a) The Company has furnished the Investors with true and complete copies of the Company's (i) Annual Reports on Form 10-KSB for the fiscal years ended December 31, 2001, as amended, December 31, 2002, as amended, and December 31, 2003, as filed with the SEC, (ii) Quarterly Reports on Form 10-QSB for the quarter ended April 4, 2004, as filed with the SEC, (iii) proxy statements related to all meetings of its stockholders (whether annual or special) held since January 1, 2002, and (iv) all other reports filed with or registration statements declared effective by the SEC since January 1, 2002, except registration statements on Form S-8 relating to employee benefit plans, which are all the documents (other than preliminary material) that the Company was required to file with the SEC since that date (clauses (i) through (iv) being referred to herein collectively as the "Company SEC Reports"). The Company has timely made all filings required under the Exchange Act during the 12 months preceding the date of this Agreement. As of their respective dates, the Company SEC Reports were duly filed and complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Company SEC Reports, including, but not limited to, the Sarbanes-Oxley Act. As of their respective dates, the Company SEC Reports did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (b) The audited consolidated financial statements and unaudited interim financial statements of the Company included in the Company SEC Reports (i) complied as to form in all material respects with applicable accounting requirements of the Securities Act and with the published rules and regulations of the SEC with respect thereto, (ii) have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") applied on a consistent basis (except (A) as may be indicated therein or in the notes thereto, or (B) in the case of unaudited interim financial statements, to the extent they may not include footnotes or may be condensed or summary statements), (iii) present fairly, in all material respects, the financial position of the Company and its Subsidiaries as at the dates thereof and the results of their operations and cash flow for the periods then ended subject, in the case of the unaudited interim financial statements, to normal year-end audit adjustments and any -5- other adjustments described therein and the fact that certain information and notes have been condensed or omitted in accordance with the Exchange Act and the rules promulgated thereunder, and (iv) are in all material respects in accordance with the books of account and records of the Company except as indicated therein. 3.8. Absence of Certain Developments ------------------------------- Since December 31, 2003, there has been no (i) change or event which could reasonably be expected to have a Material Adverse Effect, (ii) declaration, setting aside or payment of any dividend or other distribution with respect to the capital stock of the Company, (iii) issuance of capital stock (other than pursuant to the exercise of options, warrants, or convertible securities outstanding at such date) or options, warrants or rights to acquire capital stock (other than the rights granted to the Investors hereunder or options or common stock granted or issued pursuant to the Company's 1996 Stock Incentive Plan or Employee Stock Purchase Plan), (iv) material loss, destruction or damage to any property of the Company or any Subsidiary, whether or not insured, (v) acceleration or prepayment of any indebtedness for borrowed money or the refunding of any such indebtedness, (vi) labor trouble involving the Company or any Subsidiary or any material change in their personnel or the terms and conditions of employment, (vii) waiver of any valuable right in favor of the Company or any Subsidiary, (viii) loan or extension of credit to any officer or employee of the Company or any Subsidiary or (ix) acquisition or disposition of any material assets (or any Contract or arrangement therefor), or any other material transaction by the Company or any Subsidiary otherwise than for fair value in the ordinary course of business. 3.9. Compliance with Law ------------------- (a) Neither the Company nor any of its Subsidiaries is in material violation of any laws, ordinances, governmental rules or regulations to which it is subject, including, without limitation, laws or regulations relating to the environment or to occupational health and safety, and no material expenditures are or will be required in order to cause its current operations or properties to comply with any such law, ordinances, governmental rules or regulations. (b) The Company and its Subsidiaries have all licenses, permits, franchises or other governmental authorizations necessary for the ownership of their property or for the conduct of their respective businesses, which if violated or not obtained might have a Material Adverse Effect. Neither the Company nor any Subsidiary has finally been denied any application for any such licenses, permits, franchises or other governmental authorizations necessary to its business. (c) The Company and its Subsidiaries manufacture and distribute, and for the past three years have manufactured and have distributed, their products in all material respects in accordance with all applicable rules and regulations of the United States Food and Drug Administration ("FDA") (including the "Good Manufacturing Practices" and the "Medical Device Reporting" regulations) and the Company's quality control procedures in effect at the time of manufacture. All of the products currently sold by the Company and its Subsidiaries in the United States (i) are under FDA-approved investigational studies, or (ii) have been approved -6- or cleared for sale by the FDA and all other applicable federal and state regulatory agencies. All of the products currently sold by the Company and its Subsidiaries outside the United States have, to the best knowledge of the Company, been approved or cleared for sale by the appropriate foreign regulatory agencies. Neither the Company nor any Subsidiary has received any notice from the FDA or any other federal, state or foreign regulatory agency questioning its manufacturing practices or threatening to revoke or curtail any product clearance or approval, and the Company is not aware of any intent to deliver any such notice. All United States and international regulatory approvals or premarket notifications for the products currently sold by the Company and its Subsidiaries are owned by and registered in the name of the Company or one of its Subsidiaries and are in full force and effect and, except as set forth on Schedule 3.9, none of the products manufactured or marketed by the Company or its Subsidiaries have been the subject of any voluntary or involuntary recall or any governmental investigation other than routine inspections of the Company's facilities. (d) The Company and each of its officers are in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act. Except as permitted by the Exchange Act, including, without limitation, Sections 13(k)(2) and (3), since the enactment of the Sarbanes-Oxley Act, neither the Company nor any of its Affiliates has made, arranged or modified (in any material way) personal loans to any executive officer or director of the Company. (e) The management of the Company has (i) designed disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the management of the Company by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date hereof, to the Company's auditors and the audit committee of the Board (A) any significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data and have identified for the Company's auditors any material weaknesses in internal controls and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls. 3.10. Litigation ---------- Except as set forth on Schedule 3.10 hereto, there is no legal action, suit, arbitration or other legal, administrative or other governmental investigation, inquiry or proceeding (whether federal, state, local or foreign) pending or, to the best of the Company's knowledge, threatened against or affecting the Company or any Subsidiary or any of their respective properties, assets or businesses. After reasonable inquiry of its officers and employees, the Company is not aware of any fact which might result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other proceeding. Except as set forth on Schedule 3.10, neither the Company nor any Subsidiary is subject to any order, writ, judgment, injunction, decree, determination or award of any court or of any governmental agency or instrumentality (whether federal, state, local or foreign). -7- 3.11. Absence of Undisclosed Liabilities ---------------------------------- Neither the Company nor any of its Subsidiaries has any debt, obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether due or to become due, whether or not known to the Company) arising out of any transaction entered into at or prior to either Closing, or any act or omission at or prior to either Closing, or any state of facts existing at or prior to either Closing, including taxes with respect to or based upon the transactions or events occurring at or prior to either Closing, and including, without limitation, unfunded past service liabilities under any pension, profit sharing or similar plan, except for liabilities disclosed in the financial statements included in the Company's SEC Reports and liabilities incurred in the usual and ordinary course of business subsequent to April 4, 2004 and liabilities of the type not required under GAAP to be reflected in such financial statements, none of which liabilities incurred subsequent to April 4, 2004 (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. 3.12. Change in Ownership ------------------- Neither (a) the purchase of the Exchangeable Notes by the Investors, (b) the issuance of the Second Closing Shares to the Investors nor (c) the consummation of the transactions contemplated by this Agreement will result in (i) any material adverse change in the business operations of the Company or any of its Subsidiaries, (ii) the acceleration of the vesting of any outstanding option, warrant, call, commitment, agreement, conversion right, preemptive right or other right to subscribe for, purchase or otherwise acquire any of the shares of the capital stock of the Company or any of the stock of the Company or any of its Subsidiaries, or debt securities of the Company or any of its Subsidiaries (collectively "Commitments", and each individually a "Commitment"), (iii) any obligation of the Company to grant, extend or enter into any Commitment, or (iv) any right in favor of any Person to terminate or cancel any Key Agreement or Instrument. 3.13. Employment Matters ------------------ (a) The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting employment and employment practices, terms and conditions of employment and wages and hours, as applicable, except where failure to be in compliance would not have a Material Adverse Effect. The Company is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the Company's knowledge, has sought to represent any of the employees, representatives or agents of the Company. There is no strike or other labor dispute involving the Company pending, or to the Company's knowledge, threatened, that could have a Material Adverse Effect nor is the Company aware of any labor organization activity involving its employees. The Company is not aware that any officer or key employee, or that any group of officers or key employees, intends to terminate their employment with the Company, nor does the Company have a present intention to terminate the employment of any of the foregoing. -8- (b) The Company and its Subsidiaries have no employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974) covering former or current employees of the Company or any of its Subsidiaries, or under which the Company or any of its Subsidiaries has any obligation or liability other than withholding obligations. (c) The transactions contemplated by this Agreement will not cause the acceleration of the vesting of any options or other rights issued under the Company's 1993 Incentive Stock Option, Non Qualified Stock Option and Restricted Stock Purchase Plan, 1996 Stock Incentive Plan, Employee Stock Purchase Plan or any other similar plan, arrangement, agreement or understanding. 3.14. Tax Matters ----------- There are no federal, state, county or local taxes due and payable by the Company or any of its Subsidiaries which have not been paid. The provisions for taxes on the audited and unaudited balance sheets described in Section 3.7 are sufficient for the payment of all accrued and unpaid federal, state, county and local taxes of the Company whether or not assessed or disputed as of the respective dates of such balance sheets. The Company and its Subsidiaries have duly filed all federal, state, county and local tax returns required to have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to taxes for any year. Neither the Company nor any of its Subsidiaries is currently subject to a federal or state tax audit of any kind. 3.15. Intellectual Property --------------------- The Company owns or possesses the licenses or rights to use all Intellectual Property necessary to enable it to conduct its business as now operated or as currently proposed to be operated. There are no material outstanding options, licenses or agreements relating to the Intellectual Property of the Company or its Subsidiaries. Neither the Company nor any Subsidiary is bound by or a party to any material options, licenses or agreements relating to the Intellectual Property of any other person or entity. There is no claim or action or proceeding pending or, to the Company's knowledge, threatened that (a) challenges the rights of the Company or its Subsidiaries with respect to any Intellectual Property owned by the Company or its Subsidiaries, or (b) arises out of or related to the Company's or any Subsidiary's alleged infringement or alleged misappropriation of any third party's Intellectual Property. 3.16. Title to Tangible Assets ------------------------ The Company and its Subsidiaries have good title to their properties and assets and good title to all their leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than or resulting from taxes which have not yet become delinquent and minor liens and encumbrances which do not in any case materially detract from the value of the property subject thereto or materially impair the operations of the Company and its Subsidiaries and which have not arisen otherwise than in the ordinary course of business. -9- 3.17. Insurance --------- The Company and its Subsidiaries and their respective properties are insured in such amounts, against such losses and with such insurers as are prudent when considered in light of the nature of the properties and businesses of the Company and its Subsidiaries. No notice of any termination or threatened termination of any of such policies has been received and such policies are in full force and effect. 3.18. Transactions with Related Parties --------------------------------- Neither the Company nor any Subsidiary is a party to any agreement with any of the Company's directors, officers or stockholders or any Affiliate or family member of any of the foregoing under which it: (i) leases any real or personal property (either to or from such Person); (ii) licenses technology (either to or from such Person); (iii) is obligated to purchase any tangible or intangible asset from or sell such asset to such Person; (iv) purchases products or services from such Person; or (v) has borrowed money from or lent money to such Person. Neither the Company nor any Subsidiary employs as an employee or engages as a consultant any family member of any of the Company's directors, officers or stockholders. To the best knowledge of the Company, there exist no agreements among stockholders of the Company to act in concert with respect to their voting or holding of Company securities. 3.19. Interest in Competitors ----------------------- Except for any interest held directly or indirectly by those officers and directors set forth in the Company SEC Reports or interests held by Affiliates of Micro Investment, neither the Company nor any of its officers or, to the best of its knowledge, directors, has any interest, either by way of contract or by way of investment (other than as holder of not more than 2% of the outstanding capital stock of a publicly traded Person) or otherwise, directly or indirectly, in any Person other than the Company that (i) provides any services or designs, produces or sells any product or product lines or engages in any activity similar to or competitive with any activity currently proposed to be conducted by the Company or any of its Subsidiaries or (ii) has any direct or indirect interest in any asset or property, real or personal, tangible or intangible, of the Company or its Subsidiaries. 3.20. Registration Rights ------------------- Except as provided pursuant to Section 5.10 or as set forth on Schedule 3.20, the Company will not, as of the First Closing Date or the Second Closing Date, be under any obligation to register any of its securities under the Securities Act. 3.21. Private Offering ---------------- Neither the Company nor anyone acting on its behalf has sold or has offered any of the Exchangeable Notes or Second Closing Shares for sale to, or solicited offers to buy from, or otherwise approached or negotiated with respect thereto with, any prospective purchaser, other than the Investors. Based upon the representations of the Investors set forth in Section 4 of this Agreement, the offer, issuance and sale of the Exchangeable Notes and the Second Closing -10- Shares are and will be exempt from the registration and prospectus delivery requirements of the Securities Act, and have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws. 3.22. Brokerage --------- There are no claims for brokerage commissions or finder's fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement made by or on behalf of the Company, and the Company agrees to indemnify and hold the Investors harmless against any costs or damages incurred as a result of any such claim. 3.23. Takeover Statute; Rights Plan ----------------------------- The Company has taken all necessary actions such that the provisions of Section 203 of the DGCL do not and will not apply to this Agreement or to any of the transactions contemplated hereby. No other Takeover Statute is applicable to the transactions contemplated hereby. The Board has approved this Agreement and the transactions contemplated hereby as contemplated by Section 1(a)(iii) of the Rights Agreement. As a result, as a consequence of this Agreement and the transactions contemplated hereby, (i) the Investors shall not be an "Acquiring Person" within the meaning of the Rights Agreement, (ii) a "Triggering Event" (as defined in the Rights Agreement) shall not have occurred and (iii) the Rights (as defined in the Rights Agreement) shall not separate from the Common Stock as a result of any of the transactions contemplated hereby. 3.24. Nasdaq Compliance ----------------- The Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and is listed on The Nasdaq National Market (the "Nasdaq Stock Market"), and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the Nasdaq Stock Market. 3.25. Reporting Status ---------------- The Company is currently eligible to register the resale of Common Stock in a secondary offering on a registration statement on Form S-3 under the Securities Act. 3.26. No Manipulation of Stock ------------------------ The Company has not taken and will not, in violation of applicable law, take any action outside the ordinary course of business designed to or that might reasonably be expected to cause or result in unlawful manipulation of the price of the Common Stock to facilitate the sale or resale of the Second Closing Shares. -11- 3.27. Accountants ----------- PricewaterhouseCoopers LLP have advised the Company that they are, and to the best knowledge of the Company they are, an independent accountant as required by the Sarbanes-Oxley Act and the Securities Act. 3.28. Transfer Taxes -------------- On the Closing Dates, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Second Closing Shares hereunder will be, or will have been, fully paid or provided for by the Company and the Company will have complied with all laws imposing such taxes. 3.29. Investment Company ------------------ The Company is not an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for an investment company, within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder. 3.30. Listing ------- The Company complies with all requirements of the NASD with respect to the issuance of the Second Closing Shares and the listing thereof on the Nasdaq Stock Market. 3.31. Material Facts -------------- This Agreement, the schedules furnished contemporaneously herewith, and the other agreements, documents, certificates or written statements furnished or to be furnished to the Investors through the Closing Dates by or on behalf of the Company in connection with the transactions contemplated hereby taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein or herein, in light of the circumstances in which they were made, not misleading. Notwithstanding the foregoing, the projections and business plans furnished to the Investor by the Company have been prepared in good faith on the basis of reasonable assumptions consistent with earlier assumptions and represent the Company's best estimate on the date hereof of its future performance. SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS ----------------------------------------------- Each Investor represents and warrants to the Company severally and solely with respect to itself and its purchase hereunder and not with respect to any other Investor as follows: (a) It is acquiring the Exchangeable Notes and, will be acquiring the Second Closing Shares, for its own account for investment and not with a view towards the resale, transfer or distribution thereof, nor with any present intention of distributing the Exchangeable Note or the Second Closing Shares, but subject, nevertheless, to any requirement of law that the -12- disposition of the Investor's property shall at all times be within the Investor's control, and without prejudice to the Investor's right at all times to sell or otherwise dispose of all or any part of such securities under a registration under the Securities Act or under an exemption from said registration available under the Securities Act. (b) It has full power and legal right to execute and deliver this Agreement and to perform its obligations hereunder. (c) It is a resident of the jurisdiction set forth immediately below such Investor's name on the signature pages hereto. (d) It has taken all action necessary for the authorization, execution, delivery, and performance of this Agreement and its obligations hereunder, and, upon execution and delivery by the Company, this Agreement shall constitute the valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms, except that such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights and general principles of equity. (e) There are no claims for brokerage commissions or finder's fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement made by or on behalf of the Investor and the Investor agrees to indemnify and hold the Company harmless against any costs or damages incurred as a result of any such claim. (f) It has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment in the Company as contemplated by this Agreement, and is able to bear the economic risk of such investment for an indefinite period of time. It has been furnished access to such information and documents as it has requested and has been afforded an opportunity to ask questions of and receive answers from representatives of the Company concerning the terms and conditions of this Agreement and the purchase of the Shares contemplated hereby. It is an "accredited investor" within the meaning of Rule 501 of Regulation D under the Securities Act. (g) It hereby acknowledges that no action has been taken by the Company, and the Company does not intend to take any action, in any jurisdiction outside of the United States that would permit an offering of the Exchangeable Notes or the Second Closing Shares, or possession or distribution of offering materials in connection with the issuance of the Exchangeable Notes or Second Closing Shares, in any jurisdiction outside of the United States. (h) It understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Exchangeable Notes or the Second Closing Shares or an investment therein. -13- SECTION 5. ADDITIONAL AGREEMENTS OF THE PARTIES ------------------------------------ 5.1. Resale of Securities -------------------- (a) Each Investor covenants that it will not sell or otherwise transfer the Exchangeable Notes or the Second Closing Shares except pursuant to an effective registration under the Securities Act or in a transaction which, in the opinion of counsel reasonably satisfactory to the Company, qualifies as an exempt transaction under the Securities Act and the rules and regulations promulgated thereunder; provided, however, without any obligation to deliver an opinion of counsel, each Investor shall be able to transfer the Exchangeable Notes or the Second Closing Shares to Affiliates and to ev3 LLC, a Delaware limited liability company, and its Affiliates. (b) Until the Second Closing Shares are registered pursuant to Section 5.10 hereof, the certificates evidencing the Second Closing Shares will bear the following legend reflecting the foregoing restrictions on the transfer of such securities: "The securities evidenced hereby have not been registered under the Securities Act of 1933, as amended (the "Act"), and may not be transferred except pursuant to an effective registration under the Act or in a transaction which, in the opinion of counsel reasonably satisfactory to the Company, qualifies as an exempt transaction under the Act and the rules and regulations promulgated thereunder." 5.2. Covenants Pending Closing ------------------------- Pending the Closings, the Company will conduct and will cause its Subsidiaries to conduct their respective businesses in the ordinary course, and will not, and will not permit any of its Subsidiaries to, without the Investors' prior written consent, take any action which would result in any of the representations or warranties contained in this Agreement not being true at and as of the time immediately after such action, or in any of the covenants contained in this Agreement becoming incapable of performance. The Company will promptly advise the Investors of any action or event of which it becomes aware which has the effect of making incorrect any of such representations or warranties or which has the effect of rendering any of such covenants incapable of performance. 5.3. Further Assurance ----------------- Each of the parties shall execute such documents and other papers and take such further actions as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated hereby. Each such party shall use its reasonable efforts to fulfill or obtain the fulfillment of the conditions to either Closing as promptly as practicable. -14- 5.4. Indemnity --------- (a) The Company agrees to indemnify and hold each Investor, its members and its Affiliates and each of their respective officers, directors, partners, members, employees and agents, and each person who controls the Investor or any of its members (within the meaning of the Exchange Act) (the "Indemnified Parties") harmless against any and all losses, liabilities, damages, expenses and other costs ("Losses") arising from any actual or threatened claims brought against the Company or such Indemnified Parties in connection with or arising out of entering into this Agreement and the transactions contemplated hereby or any other legal, administrative or other proceeding arising out of the transactions contemplated hereby, other than such Losses which are judicially determined to have resulted from (i) the gross negligence or willful misconduct of the Investor or such other Indemnified Party or (ii) the breach by the Investor of any of the terms of this Agreement. (b) Each Indemnified Party under this Section 5.4 will, promptly after the receipt of notice of the commencement of any action against such Indemnified Party in respect of which indemnity may be sought from the Company on account of an indemnity agreement contained in this Section 5.4, notify the Company in writing of the commencement thereof. The omission of any Indemnified Party so to notify the Company of any such action shall not relieve the Company from any liability which it may have to such Indemnified Party other than pursuant to this Section 5.4 or, unless the Company shall have been prejudiced by the omission of such Indemnified Party so to notify the Company, pursuant to this Section 5.4. In case any such action shall be brought against any Indemnified Party and it shall notify the Company of the commencement thereof, the Company shall be entitled to participate therein and, to the extent that it may wish, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Party, and after notice from the Company to such Indemnified Party of its election so to assume the defense thereof, the Company will not be liable to such Indemnified Party under this Section 5.4 for any legal or other expense subsequently incurred by such Indemnified Party in connection with the defense thereof; provided, however, that (1) if the Company shall elect not to assume the defense of such claim or action or (2) if the Indemnified Party reasonably determines (A) that there may be a conflict between the positions of the Company and of the Indemnified Party in defending such claim or action or (B) that there may be legal defenses available to such Indemnified Party different from or in addition to those available to the Company, then separate counsel for the Indemnified Party shall be entitled to participate in and conduct the defense, in the case of (1) and (2)(A), or such different defenses, in the case of (2)(B), and the Company shall be liable for any reasonable legal or other expenses incurred by the Indemnified Party in connection with the defense. 5.5. Exchange of Exchangeable Notes for Common Stock ----------------------------------------------- (a) Upon the receipt of the Stockholder Approval and the satisfaction of the other conditions to the Second Closing, all of the outstanding principal and accrued but unpaid interest on the Investors' Exchangeable Notes shall be exchanged for such number of shares of Common Stock as shall be equal to the quotient obtained by dividing (i) the aggregate outstanding principal balance plus any accrued but unpaid interest then outstanding on such Investor's Exchangeable Notes by (ii) $3.10 (subject to appropriate adjustment in the event of -15- any stock dividend, stock split, stock distribution or combination, subdivision, reclassification or other corporate actions having the similar effect with respect to the Common Stock, the "Exchange Price"); provided, however, the Investors shall have no obligation to exchange the Exchangeable Notes for Common Stock if the conditions precedent to the Second Closing set forth in Section 6 have not been satisfied on or prior to the date that is ninety (90) days following the date of the First Closing Date (the "Exchange Termination Date"), including, without limitation, if on or before the Exchange Termination Date, there shall have occurred any developments in the business of the Company or any of its Subsidiaries which, individually or in the aggregate, have had, or would be reasonably likely to have, a Material Adverse Effect (but excluding any Material Adverse Effect resulting from the actions of any Investor or their Affiliates). If Stockholder Approval at the Special Meeting (as defined herein) is not obtained, then the Investors shall not have the option to, and the Company shall not be required to, exchange all or any portion of the outstanding principal and accrued but unpaid interest then outstanding on the Exchangeable Notes for shares of Common Stock and such Exchangeable Notes shall remain outstanding pursuant to their terms. (b) If the Second Closing has not occurred by the Exchange Termination Date, each Investor shall have the right, but not the obligation, at anytime following such date and from time to time, upon receipt of the Stockholder Approval, to exchange all or any portion of the outstanding principal and accrued but unpaid interest on such Investor's Exchangeable Notes for such number of shares of Common Stock as shall be equal to the quotient obtained by dividing (i) the aggregate outstanding principal balance plus any accrued but unpaid interest then outstanding on such Investor's Exchangeable Notes by (ii) the Exchange Price. If an Investor elects to exchange all or any portion of the outstanding principal balance and accrued but unpaid interest on such Investor's Exchangeable Note, the Investor shall give notice to the Company of the principal amount of the Exchangeable Note and/or accrued but unpaid interest thereon to be exchanged and the name(s) in which the certificate(s) for the shares of Common Stock are to be issued. If at the time of exchange of the Exchangeable Notes for shares of Common Stock there are insufficient authorized shares of Common Stock to permit exchange in full of the Exchangeable Notes proposed to be so exchanged, then the Company shall take all corporate action necessary to authorize a sufficient number of shares of Common Stock to permit such exchange in full. Upon any partial exchange by an Investor pursuant to which only a portion of the outstanding principal balance and unpaid accrued interest of an Exchangeable Note (a "Partial Exchange"), the Company shall issue to such Investor a new Exchangeable Note (dated as of the date of the Exchangeable Note that was exchanged) representing the aggregate amount of the outstanding principal balance and unpaid accrued interest of the Exchangeable Note that was not exchanged in connection with the Partial Exchange, which note shall be in the same form and containing the same terms as the Exchangeable Note that was exchanged in the Partial Exchange. (c) No fractional shares of the Common Stock will be issued upon exchange of the Exchangeable Notes for shares of Common Stock. In lieu of any fractional share to which the Investor would otherwise be entitled, the Company will pay to the Investors in cash the amount of the unexchanged principal balance plus accrued but unpaid interest then outstanding on the Exchangeable Notes that would otherwise be exchanged for such fractional share. Upon exchange of the Exchangeable Notes, the Investors shall surrender the Exchangeable Notes, duly -16- endorsed, at the principal offices of the Company or any transfer agent of the Company. At its expense, the Company will, as soon as practicable thereafter, issue and deliver to such Investors, at such principal office, a certificate or certificates for the number of shares to which each such Investor is entitled upon such exchange, including a check payable to such Investor for any cash amounts payable as described herein. Upon exchange of the Exchangeable Notes and payment for fractional shares as provided above, the Company will be forever released from all of its payment obligations and liabilities under the Exchangeable Notes with regard to that portion of the principal and accrued but unpaid interest being exchanged. 5.6. Consents and Approvals; HSR Act; Proxy -------------------------------------- (a) From and after the date hereof, the Company shall use its best efforts to obtain as promptly as practicable any consent or approval of any Person, including any regulatory authority, required in connection with the transactions contemplated hereby, including without limitation, the approval by the required vote of the Company's stockholders to (i) the issuance of the Second Closing Shares upon exchange of the Exchangeable Notes and (ii) such other matters as may be necessary or advisable to consummate the transactions contemplated by this Agreement (such approval by the Company's stockholders of the matters referred to in (i), (ii) and (iii) is referred to herein as the "Stockholder Approval"). (b) To the extent required, the Company and the Investors agree to make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated hereby as promptly as practicable and to supply as promptly as practicable any additional information and documentary material that may be requested pursuant to the HSR Act and to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as practicable. (c) In furtherance of the above, as promptly as practicable after the First Closing Date, but in no event later than ten Business Days following the First Closing Date, the Company shall prepare and file with the SEC, and shall use all reasonable efforts to have cleared by the SEC, a preliminary proxy statement, and as soon as practicable thereafter (subject to applicable waiting periods under the Exchange Act and review by the SEC) file with the SEC and promptly thereafter mail a definitive proxy statement to the Company's stockholders (the "Proxy Statement"). Any Proxy Statement filed under this Section 5.6(c) shall, to the extent required, contain the recommendation of the Board that the Company's stockholders approve the transactions contemplated by this Agreement. Each Investor will be given a reasonable opportunity to review and comment on drafts of the Proxy Statement and the Company will use its reasonable best efforts to accept comments thereto given by each Investor and its representatives. The Company shall promptly take all action necessary in accordance with applicable law and its Organizational Documents to convene a special meeting of the Company's stockholders (the "Special Meeting") no later than the date that is sixty (60) days following the First Closing Date or, if such date is impracticable due to review by the SEC, as soon as practicable thereafter. The Company shall use its best efforts to solicit from the Company's stockholders proxies in favor of the transactions contemplated by this Agreement and shall take all other action necessary or, in the reasonable opinion of the Investors, advisable to secure any vote of stockholders necessary for approval of the transactions contemplated by this Agreement. -17- 5.7. Use of Proceeds --------------- The proceeds received by the Company from the issuance and sale of the Exchangeable Notes shall be used by the Company for general corporate purposes. 5.8. Takeover Statute ---------------- If any Takeover Statute shall become applicable to the transactions contemplated hereby, including, without limitation, any takeover provision under the laws of the State of Delaware, the Company and the members of the Board shall grant such approvals and take such actions as are necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of such statue or regulation on the transactions contemplated hereby. 5.9. Rights Agreement Inapplicable ----------------------------- If the transactions contemplated hereby or the conversion or exchange or exercise of any of the Exchangeable Notes for Second Closing Shares upon its terms would (a) result in the occurrence of a "Triggering Event" under the Rights Agreement, (b) cause any Investor to become an "Acquiring Person" as defined in the Rights Agreement or (c) otherwise cause the exercise of any "Right" issued pursuant to the Rights Agreement or the issuance or exercise of any "Rights Certificate" under the Rights Agreement, the Company will promptly cause the Rights Agreement to be duly amended to prevent any such characterization. 5.10. Registration Rights ------------------- The Company shall file a registration statement (the "Registration Statement") covering the Second Closing Shares on behalf of the Investors and their respective Affiliates and any subsequent transferee with the SEC. Such Registration Statement will be filed as soon as practicable after the Second Closing Date and in no event later than five (5) Business Days following the Second Closing Date or, if the Second Closing Date shall not occur, as soon as practicable after the first date on which an Investor exchanges all or any portion of such Investor's Exchangeable Note pursuant to Section 5.5(b) and in no event later than five (5) Business Days following such date. The Company will use its reasonable best efforts to cause the Registration Statement to become effective within sixty (60) days of filing. The expenses of the preparation and filing of the Registration Statement shall be borne by the Company. Upon filing the Registration Statement, the Company will use its reasonable best efforts to keep the Registration Statement effective with the SEC at all times until the Investors or any transferee who would require such registration to effect a sale of the Second Closing Shares no longer holds the Second Closing Shares or can effect a sale of the Second Closing Shares pursuant to Rule 144(k) under the Securities Act, whichever is sooner. Provisions relating to the registration rights discussed in this Section 5.10 are set forth in Exhibit D hereto. The registration rights shall be assignable by each Investor to any purchaser who acquires from the Investor (i) 5% or more of the aggregate principal amount of the Exchangeable Notes held by such Investor as of the First Closing Date if the Second Closing does not occur or (ii) 5% or more of the Second -18- Closing Shares held by such Investor after the exchange of the Exchangeable Notes for Second Closing Shares on the Second Closing Date. 5.11. Registration and Listing ------------------------ (a) So long as any Investor Owns any Second Closing Shares, the Company will cause the Common Stock to continue at all times to be registered under Section 12(g) of the Exchange Act, will comply in all respects with its reporting and filing obligations under the Exchange Act, and will not take any action or file any document (whether or not permitted by the Exchange Act or the rules thereunder) to terminate or suspend such reporting and filing obligations. (b) So long as any Investor Owns any Second Closing Shares, the Company shall continue the listing or trading of the Common Stock on the Nasdaq Stock Market or one of the other Approved Markets and comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Approved Market on which the Common Stock is listed. (c) So long as any Investor Owns any Second Closing Shares, the Company shall use its best efforts to comply with all requirements of the NASD with respect to the issuance of the Second Closing Shares and listing thereof on the Nasdaq Stock Market. 5.12. Private Offering ---------------- Neither the Company nor anyone acting on its behalf shall offer the Exchangeable Notes or the Second Closing Shares for issue or sale to, or solicit any offer to acquire any of the same from, anyone so as to bring the issuance and sale of such Exchangeable Notes or Second Closing Shares within the provisions of Section 5 of the Securities Act. SECTION 6. INVESTORS' CLOSING CONDITIONS ----------------------------- The obligation of each Investor to purchase and pay for the Exchangeable Notes on the First Closing Date and exchange the Exchangeable Notes for Second Closing Shares on the Second Closing Date shall be subject to the performance by the Company of its agreements theretofore to be performed hereunder and to the satisfaction, prior thereto or concurrently therewith, of the following further conditions: 6.1. Representations and Warranties ------------------------------ The representations and warranties of the Company contained in this Agreement shall be true in all material respects (except for such representations and warranties that are qualified as to materiality or Material Adverse Effect, which shall be true in all respects) on and as of the First Closing Date. -19- 6.2. Compliance with Agreement ------------------------- The Company shall have performed and complied in all material respects with all agreements, covenants and conditions contained in this Agreement which are required to be performed or complied with by the Company prior to or on the First Closing Date. 6.3. Injunction ---------- There shall be no effective injunction, writ, preliminary restraining order or any order of any nature issued by a court of competent jurisdiction directing that the transactions provided for herein or any of them not be consummated as herein provided. 6.4. Counsel's Opinion ----------------- (a) At the First Closing, the Investors shall have received an opinion from the Company's counsel, Stradling Yocca Carlson & Rauth, dated the First Closing Date, and substantially in the form of Exhibit E hereto. (b) At the Second Closing, the Investors shall have received an opinion from the Company's counsel, Stradling Yocca Carlson & Rauth, dated the Second Closing Date, and substantially in the form of Exhibit F hereto. 6.5. Adverse Development ------------------- From the date of this Agreement, there shall have been no developments in the business of the Company or any of its Subsidiaries which, individually or in the aggregate, have had, or would be reasonably expected to have, a Material Adverse Effect. 6.6. Stockholder Approval -------------------- On or prior to the Second Closing Date, the Company shall have received the Stockholder Approval. 6.7. Listing of the Shares --------------------- At least 15 calendar days prior to the Second Closing Date, the Company shall have delivered to the Nasdaq Stock Market the notice of issuance of the Second Closing Shares in accordance with Nasdaq Marketplace Rule 4310(c)(17) and the Company shall have delivered to each of the Investors satisfactory evidence of the delivery of such notice. The Company shall not have received any communication (whether written or oral) from the Nasdaq Stock Market requesting additional information regarding the transactions contemplated by this Agreement, including, without limitation, the issuance of the Second Closing Shares, or indicating that the Nasdaq Stock Market has any objections to the transactions contemplated by this Agreement, including, without limitation, the issuance of the Second Closing Shares. -20- 6.8. Nasdaq Trading -------------- From the date hereof to the Second Closing Date, trading in the Common Stock shall not have been suspended by the SEC or the Nasdaq Stock Market, and trading in securities generally as reported by the Nasdaq Stock Market shall not have been suspended or limited, and the Common Stock shall not have been delisted on the Nasdaq Stock Market. 6.9. Officers' Certificate --------------------- The Investors shall have received a certificate, dated the First Closing Date or the Second Closing Date, as the case may be, signed by each of the President and the Chief Financial Officer of the Company, certifying that the pertinent conditions specified in the foregoing Sections have been fulfilled. 6.10. Secretary's Certificate ----------------------- The Investors shall have received a certificate, dated the First Closing Date of the Secretary of the Company attaching (i) a true and complete copy of the Certificate of Incorporation of the Company as filed with the Secretary of State of the State of Delaware, with all amendments thereto, (ii) true and complete copies of the Company's Bylaws in effect as of such date, (iii) certificates of good standing of the appropriate officials of the jurisdictions of incorporation of the Company and of each state in which the Company is qualified to do business as a foreign corporation and (iv) resolutions of the Special Committee authorizing the execution and delivery of this Agreement and the transactions contemplated hereby, including (a) the issuance of the Second Closing Shares upon exchange of the Exchangeable Notes and (b) the approvals required by Section 3.23 of the Agreement. 6.11. Approval of Proceedings ----------------------- All proceedings to be taken in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be satisfactory in form and substance to the Investors and to Willkie Farr & Gallagher LLP, counsel to certain of the Investors; and the Investors shall have received copies of all documents or other evidence which they and Willkie Farr & Gallagher LLP may request in connection with such transactions and of all records of corporate proceedings in connection therewith in form and substance satisfactory to the Investors and Willkie Farr & Gallagher LLP. 6.12. Fairness Opinion ---------------- On or prior to the First Closing Date, the Special Committee shall have received a fairness opinion relating to the transactions contemplated by this Agreement from an investment banking firm chosen by the Special Committee and approved the transactions contemplated by this Agreement and the Investors shall have received a copy of such fairness opinion. -21- 6.13. Second Closing Date ------------------- With respect to the Second Closing, the conditions set forth in Sections 6.3, 6.4(b), 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11 and 6.12 shall have been satisfied by the Exchange Termination Date. SECTION 7. COMPANY CLOSING CONDITIONS -------------------------- The obligation of the Company to deliver the Exchangeable Notes on the First Closing Date and exchange the Exchangeable Notes for Second Closing Shares on the Second Closing Date shall be subject to the performance by each Investor of its agreements theretofore to be performed hereunder and to the satisfaction, prior thereto or concurrently therewith, of the following further conditions: 7.1. Representations and Warranties ------------------------------ The representations and warranties of each Investor contained in this Agreement shall be true on and as of the First Closing Date. 7.2. Compliance with Agreement ------------------------- Each Investor shall have performed and complied with all agreements, covenants and conditions contained in this Agreement which are required to be performed or complied with by it prior to or on the First Closing Date. 7.3. Investors' Certificates ----------------------- The Company shall have received a certificate from each Investor, dated the First Closing Date, signed by a duly authorized representative of such Investor, certifying that the conditions specified in the foregoing Sections 7.1 and 7.2 have been fulfilled. 7.4. Injunction ---------- There shall be no effective injunction, writ, preliminary restraining order or any order of any nature issued by a court of competent jurisdiction directing that the transactions provided for herein or any of them not be consummated as herein provided. 7.5. Stockholder Approval -------------------- On or prior to the Second Closing Date, the Company shall have received the Stockholder Approval. SECTION 8. INTERPRETATION OF THIS AGREEMENT -------------------------------- 8.1. Terms Defined ------------- As used in this Agreement, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term: -22- Affiliate: shall mean any Person or entity, directly or indirectly, controlling, controlled by or under common control with such Person or entity. Agreement: shall mean this Note Purchase Agreement, dated as of June 25, 2004, among the Company and the Investors, as the same may be amended from time to time. Approved Markets: shall mean the Nasdaq Stock Market (including the Nasdaq National Market and Nasdaq SmallCap Market), the New York Stock Exchange or the American Stock Exchange. Board: shall have the meaning set forth in Section 3.3(c). Business Day: shall mean a day other than a Saturday, Sunday or other day on which banks in the State of New York are required or authorized to close. Closing: shall have the meaning set forth in Section 2.2(b). Code: shall mean the Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated thereunder. Commitments: shall have the meaning set forth in Section 3.12. Common Stock: shall have the meaning set forth in Section 1. Company: shall have the meaning set forth in the preamble. Company SEC Reports: shall have the meaning set forth in Section 3.7(a). Contract: shall mean any agreement, contract, commitment, understanding, arrangement, restriction or other instrument to which the Company or any of its Subsidiaries is a party, which includes any rights or obligations thereof, or which otherwise relates to or affects any of their respective assets, including, without limitation, any indenture, lease, mortgage, deed of trust, loan, credit or security agreement, note or other evidence of indebtedness, guaranty, stockholders agreement, license, joint venture agreement, distribution agreement, or employment, severance or consulting agreement. DGCL: shall mean the Delaware General Corporation Law. Exchange Act: shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. Exchange Price: shall have the meaning set forth in Section 5.5(a). Exchange Termination Date: shall have the meaning set forth in Section 5.5(a). Exchangeable Notes: shall have the meaning set forth in Section 1. FDA: shall have the meaning set forth in Section 3.9(c). -23- First Closing: shall have the meaning set forth in Section 2.2(a). First Closing Date: shall have the meaning set forth in Section 2.2(a). GAAP: shall have the meaning set forth in Section 3.7(b). HSR Act: shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. Indemnified Parties: shall have the meaning set forth in Section 5.4(a). Intellectual Property: shall mean all of the following, owned by the Company or any Subsidiary, or owned by a third party and used in the current or contemplated business of the Company or any Subsidiary: (i) trademarks and service marks, trade dress, product configurations, trade names and other indications of origin, applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith; (ii) patentable inventions, discoveries, improvements, ideas, know-how, formula methodology, processes, technology, software (including password unprotected interpretive code or source code, object code, development documentation, programming tools, drawings, specifications and data) and applications and patents in any jurisdiction pertaining to the foregoing, including re-issues, continuations, divisions, continuations-in-part, renewals or extensions; (iii) trade secrets, including confidential information and the right in any jurisdiction to limit the use or disclosure thereof; (iv) copyrights in writings, designs software, mask works or other works, applications or registrations in any jurisdiction for the foregoing and all moral rights related thereto; (v) database rights; (vi) Internet Web sites, domain names and applications and registrations pertaining thereto and all intellectual property used in connection with or contained in all versions of the Company's Web sites; (vii) rights under all agreements relating to the foregoing; and (viii) books and records pertaining to the foregoing. Investor: shall have the meaning set forth in the preamble. Investors: shall have the meaning set forth in the preamble. Key Agreements and Instruments: shall have the meaning set forth in Section 3.6(a). Losses: shall have the meaning set forth in Section 5.4(a). Material Adverse Effect: shall have the meaning set forth in Section 3.1(c). Micro Investment: shall have the meaning set forth in Section 3.5. NASD: shall mean the NASD Inc. Nasdaq Stock Market: shall have the meaning set forth in Section 3.24. Organizational Documents: shall have the meaning set forth in Section 3.1(a). -24- Owns, Own, Owned: shall mean the aggregate beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of the Investor and any of its Affiliates, its current or former members and Affiliates thereof. Partial Exchange: shall have the meaning set forth in Section 5.5(b). Person: shall mean an individual, partnership, joint-stock company, corporation, limited liability company, trust or unincorporated organization, and a government or agency or political subdivision thereof. Preferred Stock: shall have the meaning set forth in Section 3.3(a). Proxy Statement: shall have the meaning set forth in Section 5.6(c). Registration Statement: shall have the meaning set forth in Section 5.10. Rights Agreement: shall mean the Rights Agreement, dated as of June 3, 1999, between the Company and U.S. Stock Transfer Corporation, as Rights Agent, as amended. Sarbanes-Oxley Act: shall mean the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder. SEC: shall mean the Securities and Exchange Commission. Second Closing: shall have the meaning set forth in Section 2.2(b). Second Closing Date: shall have the meaning set forth in Section 2.2(b). Second Closing Shares: shall mean the Common Stock issuable upon exchange of the Exchangeable Notes pursuant to the terms of this Agreement and the terms of the Exchangeable Notes. Securities Act: shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. Special Committee: shall have the meaning set forth in Section 3.4. Special Meeting: shall have the meaning set forth in Section 5.6(c). Special Situations: shall mean Special Situations Fund III, L.P., a Delaware limited partnership and Special Situations Cayman Fund, L.P. Stockholder Approval: shall have the meaning set forth in Section 5.6(a). Subsidiary: shall mean a partnership, joint-stock company, corporation, limited liability company, trust or unincorporated organization of which a Person owns, directly or indirectly, more than 50% of the stock or other interests the holder of which is generally entitled to vote for the election of the board of directors or other governing body of such entity. -25- Takeover Statute: shall mean any corporate takeover provision under laws of the State of Delaware or any other state or federal "fair price", "moratorium", "control share acquisition" or other similar antitakeover statute or regulation. Vertical: shall mean Vertical Fund I, L.P., a Delaware limited partnership, and Vertical Fund II, L.P., a Delaware limited partnership. Warburg Pincus: shall mean Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership, Warburg, Pincus Netherlands Equity Partners I, C.V., a Netherlands limited partnership, Warburg, Pincus Netherlands Equity Partners II, C.V., a Netherlands limited partnership, and Warburg, Pincus Netherlands Equity Partners III, C.V., a Netherlands limited partnership. 8.2. Accounting Principles --------------------- Where the character or amount of any asset or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, this shall be done in accordance with GAAP at the time in effect, to the extent applicable, except where such principles are inconsistent with the requirements of this Agreement. 8.3. Directly or Indirectly ---------------------- Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. 8.4. Governing Law ------------- This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to any contrary result otherwise required by conflict or choice of law rules. 8.5. Paragraph and Section Headings ------------------------------ The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof. SECTION 9. MISCELLANEOUS ------------- 9.1. Notices ------- (a) All communications under this Agreement shall be in writing and shall be delivered by hand or facsimile or mailed by overnight courier or by registered mail or certified mail, postage prepaid: -26- (1) if to an Investor, at the address or facsimile number set forth next to such Investor's name on Schedule 2.1, or at such other address or facsimile number as such Investor may have furnished the Company in writing, and if the communication is to (i) Warburg Pincus or Vertical, with a copy to Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY 10019 (facsimile: (212) 728-8111), Attention: Steven J. Gartner, Esq., and (ii) Special Situations, with a copy to Lowenstein Sandler PC, 65 Livingston Avenue, Roseland, New Jersey 07068 (facsimile: (973) 597-2383), Attention: John D. Hogoboom, Esq.; and (2) if to the Company, at: 2 Goodyear, Irvine, CA 92618 (facsimile: (949) 465-1743), Attention: Thomas C. Wilder, III, or at such other address or facsimile number as it may have furnished the Investors in writing, with a copy to Stradling Yocca Carlson & Rauth, 600 Newport Center Drive, Suite 1600, Newport Beach, CA 92660 (facsimile: (949) 725-4100), Attention: Bruce Feuchter, Esq. (b) Any notice so addressed shall be deemed to be given: if delivered by hand or facsimile, on the date of such delivery; if mailed by courier, on the first Business Day following the date of such mailing; and if mailed by registered or certified mail, on the third Business Day after the date of such mailing. 9.2. Expenses and Taxes ------------------ (a) The Company agrees to pay the Investors' out-of-pocket expenses, including the fees and disbursements of Willkie Farr & Gallagher LLP, incurred in connection with the negotiation, preparation, execution and delivery of this Agreement and the other instruments and agreements entered into pursuant to this Agreement or such other agreements, and any amendments to the same. (b) The Company will pay, and save and hold each Investor harmless from any and all liabilities (including interest and penalties) with respect to, or resulting from any delay or failure in paying, stamp and other taxes (other than income taxes), if any, which may be payable or determined to be payable on the execution and delivery or acquisition of either the Exchangeable Notes or Second Closing Shares. 9.3. Reproduction of Documents ------------------------- This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications which may hereafter be executed, (b) documents received by the Investors on the Closing Dates (except for documents evidencing the Exchangeable Notes and certificates evidencing Second Closing Shares themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to the Investors, may be reproduced by the Investors by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process and the Investors may destroy any original document so reproduced. All parties hereto agree and stipulate that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was -27- made by the Investor in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. 9.4. Termination and Survival ------------------------ Notwithstanding any termination of the parties' obligation to consummate the Closings, all other terms of this Agreement shall remain in full force and effect. All warranties, representations, and covenants made by the Investors and the Company herein or in any certificate or other instrument delivered by the Investors or the Company under this Agreement shall be considered to have been relied upon by the Company or the Investors, as the case may be, and shall survive all deliveries to the Investors of the Exchangeable Notes and Second Closing Shares, or payment to the Company for such Exchangeable Notes and Second Closing Shares, regardless of any investigation made by the Company or the Investors, as the case may be, or on the Company's or the Investors' behalf. All statements in any such certificate or other instrument shall constitute warranties and representations by the Company hereunder. 9.5. Successors and Assigns ---------------------- This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. The Company may not assign its rights or obligations hereunder without the prior written consent of the Investors. Each Investor may assign its rights and obligations hereunder to any of its members or Affiliates or to any Affiliates of its members. 9.6. Entire Agreement; Amendment and Waiver -------------------------------------- This Agreement and the agreements attached as Exhibits hereto constitute the entire understandings of the parties hereto and supersede all prior agreements or understandings with respect to the subject matter hereof among such parties. This Agreement may be amended, and the observance of any term of this Agreement may be waived, with (and only with) the written consent of the Company and the Investors holding a majority of the Exchangeable Notes or Second Closing Shares, as applicable; provided, however, if the Second Closing has not occurred on or prior to the Exchange Termination Date, then following such date this Agreement may be amended and the observance of any term of this Agreement may be waived, with (and only with) the written consent of the Company and the Investors holding a majority of (i) the Exchangeable Notes or (ii), if a majority of the Exchangeable Notes (determined by reference to the aggregate principal amount of Exchangeable Notes issued on the date hereof) have been exchanged pursuant to Section 5.5(b), the Second Closing Shares. 9.7. Severability ------------ In the event that any part or parts of this Agreement shall be held illegal or unenforceable by any court or administrative body of competent jurisdiction, such determination shall not affect the remaining provisions of this Agreement which shall remain in full force and effect. -28- 9.8. Limitation on Enforcement of Remedies ------------------------------------- The Company hereby agrees that it will not assert against the limited partners of any members of any Investor any claim it may have under this Agreement by reason of any failure or alleged failure by the Investor to meet its obligations hereunder. 9.9. Counterparts ------------ This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed an original and all of which together shall be considered one and the same agreement. [SIGNATURE PAGE FOLLOWS] -29- Very truly yours, MICRO THERAPEUTICS, INC. By: /s/ Thomas C. Wilder, III -------------------------- Name: Thomas C. Wilder, III Title: President and Chief Executive Officer ACCEPTED AND AGREED: INVESTORS: WARBURG, PINCUS EQUITY PARTNERS, L.P. By: Warburg Pincus & Co., General Partner By: /s/ Sean D. Carney -------------------- Name: Sean D. Carney Title: Partner Resident in: Delaware WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS I, C.V. By: Warburg Pincus & Co., General Partner By: /s/ Sean D. Carney -------------------- Name: Sean D. Carney Title: Partner Resident in: Netherlands WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS II, C.V. By: Warburg Pincus & Co., General Partner By: /s/ Sean D. Carney ------------------ Name: Sean D. Carney Title: Partner Resident in: Netherlands WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS III, C.V. By: Warburg Pincus & Co., General Partner By: /s/ Sean D. Carney ------------------ Name: Sean D. Carney Title: Partner Resident in: Netherlands VERTICAL FUND I, L.P. By: Vertical Group, L.P., General Partner By: /s/ John E. Runnells --------------------- Name: John E. Runnells Title: General Partner Resident in: Delaware VERTICAL FUND II, L.P. By: Vertical Group, L.P., General Partner By: /s/ John E. Runnells --------------------- Name: John E. Runnells Title: General Partner Resident in: Delaware SPECIAL SITUATIONS CAYMAN FUND, L.P. By: /s/ David Greenhouse --------------------- Name: David Greenhouse Title: General Partner Resident in: Delaware SPECIAL SITUATIONS FUND III, L.P. By: /s/ David Greenhouse --------------------- Name: David Greenhouse Title: General Partner Resident in: Delaware URSUS CAPITAL, L.P. By: /s/ Evan Sturza ---------------- Name: Evan Sturza Title: Managing Director Resident in: Delaware URSUS OFFSHORE LTD. By: /s/ Evan Sturza ---------------- Name: Evan Sturza Title: Managing Director Resident in: Cayman Islands Schedule 2.1 Aggregate Principal Amount Investor's Name and Address of Exchangeable Notes - ----------------------------------------------------- -------------------------- Warburg, Pincus Equity Partners, L.P. $9,450,000 c/o Warburg Pincus & Co. 466 Lexington Avenue New York, NY 10017 Facsimile: (212) 716-5068 Attention: Sean D. Carney Elizabeth H. Weatherman Warburg, Pincus Netherlands Equity Partners I, C.V. $300,000 c/o Warburg Pincus & Co. 466 Lexington Avenue New York, NY 10017 Facsimile: (212) 716-5068 Attention: Sean D. Carney Elizabeth H. Weatherman Warburg, Pincus Netherlands Equity Partners II, C.V. $200,000 c/o Warburg Pincus & Co. 466 Lexington Avenue New York, NY 10017 Facsimile: (212) 716-5068 Attention: Sean D. Carney Elizabeth H. Weatherman Warburg, Pincus Netherlands Equity Partners III, C.V. $50,000 c/o Warburg Pincus & Co. 466 Lexington Avenue New York, NY 10017 Facsimile: (212) 716-5068 Attention: Sean D. Carney Elizabeth H. Weatherman Vertical Fund I, L.P. $4,025,000 c/o Vertical Group, L.P. 25 Deforest Avenue Summit, New Jersey 07901 Facsimile: (908) 273-9434 Attention: John Runnells Aggregate Principal Amount Investor's Name and Address of Exchangeable Notes - ----------------------------------------------------- -------------------------- Vertical Fund II, L.P. $975,000 c/o Vertical Group, L.P. 25 Deforest Avenue Summit, New Jersey 07901 Facsimile: (908) 273-9434 Attention: John Runnells Special Situations Cayman Fund, L.P. $1,250,000 153 E. 53rd Street, 55th Floor New York, New York 10022 Facsimile: (212) 207-6515 Attention: Steven Becker Special Situations Fund III, L.P. $3,750,000 153 E. 53rd Street, 55th Floor New York, New York 10022 Facsimile: (212) 207-6515 Attention: Steven Becker Ursus Capital, L.P. $589,000 156 West 56th Street, Ste 1603 New York, NY 10019 Facsimile: (212) 541-8288 Attention: Adam Stone Jeff Zatkowsky Ursus Offshore Ltd. $418,500 156 West 56th Street, Ste 1603 New York, NY 10019 Facsimile: (212) 541-8288 Attention: Adam Stone Jeff Zatkowsky EX-2 4 m2586017.txt FORM OF EXCHANGEABLE PROMISSORY NOTE Exhibit 2 The securities evidenced hereby have not been registered under the Securities Act of 1933, as amended (the "SECURITIES Act"), and may not be transferred except pursuant to an effective registration under the SECURITIES Act or in a transaction which, in the opinion of counsel reasonably satisfactory to the Company, qualifies as an exempt transaction under the SECURITIES Act and the rules and regulations promulgated thereunder. EXCHANGEABLE PROMISSORY NOTE ---------------------------- $____________ ___________, 2004 FOR VALUE RECEIVED, Micro Therapeutics, Inc., a Delaware corporation (the "Maker"), hereby unconditionally promises to pay to the order of __________________ (the "Holder"), having an address at ____________________, at such address or at such other place as may be designated in writing by the Holder, or its permitted assigns, the aggregate principal sum of ______________ ($________.00), together with interest from ____________, 2004 on the unpaid principal balance of this Note outstanding at a rate equal to seven percent (7%) (computed on the basis of the actual number of days elapsed in a 365-day year) per annum and continuing on the outstanding principal until this Exchangeable Promissory Note (the "Note") is exchanged pursuant to the terms set forth in the Purchase Agreement (as defined in Section 1 below) or indefeasibly and irrevocably paid in full by the Maker. Interest on this Note shall accrue and be compounded quarterly until the obligation of Maker with respect to the payment of such interest has been discharged (whether before or after judgment). All payments of principal and interest by the Maker under this Note shall be made in cash in immediately available funds on the Maturity Date (as defined in Section 1 below). From and after the Maturity Date (as defined in Section 1 below), every amount due and owing under this Note shall automatically, and without action by any party hereto, bear interest at an annual rate of twelve percent (12%). Commencing after the Maturity Date, any accrued but unpaid interest on this Note shall be payable on demand and shall accrue and be compounded quarterly until the obligation of the Maker with respect to the payment of such interest has been discharged (whether before or after judgment). In no event shall any interest charged, collected or reserved under this Note exceed the maximum rate then permitted by applicable law and if any such payment is paid by the Maker, then such excess sum shall be credited by the Holder as a payment of principal. 1. Definitions. Unless the context otherwise requires, when used herein the following terms shall have the meaning indicated: "Board" shall mean the Board of Directors of Maker. "Business Day" shall mean any day except a Saturday or Sunday or day on which banking institutions are legally authorized to close in the City of New York. "Change of Control" shall mean (i) a consolidation, merger, reorganization or other form of acquisition of or by Maker in which Maker's stockholders immediately prior to the transaction retain less than 50% of the voting power of or economic interest in the surviving or resulting entity (or its parent), (ii) a sale of Maker's assets in excess of a majority of Maker's assets (valued at fair market value as determined in good faith by the Board), or (iii) the individuals who were directors of Maker as of the date hereof (together with any new directors whose election or appointment was approved by the directors then in office who were either directors as of the date hereof or whose election or appointment was previously approved) ceasing to constitute a majority of the Board or the board of directors of the surviving or resulting entity (or its parent). "Common Stock" shall mean the common stock, par value $0.001 per share, of the Maker. "Event of Default" shall have the meaning ascribed to such term in Section 5 herein. "Exchangeable Notes" shall have the meaning ascribed to such term in the Purchase Agreement. "Holder" shall have the meaning ascribed to such term in the first paragraph herein. "Investors" shall have the meaning ascribed to such term in the Purchase Agreement. "Maker" shall have the meaning ascribed to such term in the first paragraph herein. "Maturity Date" shall mean the earliest of (i) the date on which any Event of Default shall have occurred and (ii) the date that is twelve (12) months from the execution date of the Purchase Agreement. "Note" shall have the meaning ascribed to such term in in the first paragraph herein. "Purchase Agreement" shall mean the Note Purchase Agreement, dated as of __________, 2004, and as that agreement may be amended from time to time, by and among the Maker and the Investors. "Required Holders" shall mean the holders of at least a majority of the outstanding aggregate principal amount of the Exchangeable Notes. "Securities Act" shall have the meaning ascribed to such term in the Purchase Agreement. "Special Meeting" shall have the meaning ascribed to such term in the Purchase Agreement. -2- "Subsidiaries" shall have the meaning ascribed to such term in the Purchase Agreement. 2. Purchase Agreement. This Note is one of the several Exchangeable Notes of the Maker issued pursuant to the Purchase Agreement. This Note is subject to the terms and conditions of, and entitled to the benefit of, the provisions of the Purchase Agreement. This Note is transferable and assignable to any person to whom such transfer is permissible under the Purchase Agreement and applicable law. The Maker agrees to issue from time to time a replacement Note in the form hereof to facilitate such transfers and assignments. In addition, after delivery of an indemnity in form and substance reasonably satisfactory to the Maker, the Maker also agrees to promptly issue a replacement Note if this Note is lost, stolen, mutilated or destroyed. 3. Payments; Exchange. This Note cannot be prepaid prior to the Maturity Date. The Holder may exchange this Note for shares of Common Stock in accordance with the terms set forth in the Purchase Agreement, including, without limitation, Section 5.5 therein. Payments on this Note shall be applied first to the payment of interest accrued and unpaid on this Note and second to the payment of principal. All payments by the Maker under this Note shall be made without set-off, defense or counterclaim and be free and clear and without any deduction or withholding for any taxes or fees of any nature whatever, unless the obligation to make such deduction or withholding is imposed by law. The principal balance and all accrued but unpaid interest on this Note shall be paid in full on the Maturity Date. 4. Waiver. No delay or omission on the part of the Holder in exercising any right under this Note shall operate as a waiver of such right or of any other right of the Holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right on any future occasion. The Maker hereby forever waives presentment, demand, presentment for payment, protest, notice of protest, notice of dishonor of this Note and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note. 5. Event of Default. The Maker agrees that: (a) if the Maker fails to pay when due the principal balance and accrued interest hereunder; (b) if the Maker shall fail or omit to perform, observe or satisfy any agreement, covenant or other provision (other than that referred to in Section 5(a) herein) contained or referred to in any other section of this Note and such failure shall not have been fully corrected within 10 days after the Maker's receipt from the Holder of written notice that the specified possible default is to be remedied or ten (10) days after the Maker shall become aware thereof or if the failure cannot be cured within ten (10) days after the Maker's attempts in such 10-day period, and the failure may be cured within a reasonable time, then the Maker shall have an additional period of not more than ten (10) days to attempt to cure the failure; (c) if any representation, warranty or statement made by the Maker in or pursuant to this Note or the Purchase Agreement shall be false or incorrect in any material respect when made; -3- (d) if the Maker (1) commences any voluntary proceeding under any provision of Title 11 of the United States Code, as now or hereafter amended, or commences any other proceeding, under any law, now or hereafter in force, relating to bankruptcy, insolvency, reorganization, liquidation, or otherwise to the relief of debtors or the readjustment of indebtedness, (2) makes any assignment for the benefit of creditors or a composition or similar arrangement with such creditors, or (3) appoints a receiver, trustee or similar judicial officer or agent to take charge of or liquidate any of its property or assets or upon the commencement against the Maker of any involuntary proceeding of the kind described in this paragraph; (e) if any event of default occurs and is continuing in respect of any other indebtedness of the Maker or its Subsidiaries for borrowed money that has an outstanding principal amount in excess of $100,000; (f) if after the date of this Note a judgment or judgments are entered against the Maker or any of its Subsidiaries involving a cumulative amount in excess of $250,000, provided, however, that the foregoing shall not apply to any judgment against Maker or any of its Subsidiaries if such judgment is for infringement by the Maker's embolic coils in the Maker's pending patent litigation in the Netherlands, the United Kingdom or Germany; or (g) upon a Change of Control. (any of (a) through (g), an "Event of Default"), then upon the occurrence of any such Event of Default all unpaid principal and accrued interest under this Note shall become immediately due and payable (A) upon election of the Required Holders, with respect to (a) through (c) and (e) through (g), and (B) automatically, with respect to (d). 6. Additional Remedies Upon Default. Subject to Section 5 hereof, upon an Event of Default hereunder, and during the continuation thereof, the Holder may exercise any other right, power or remedy as may be provided herein or as may be provided at law or in equity, including, without limitation, the right to recover judgment against the Maker for any amount. 7. Amendment. None of the terms or provisions of this Note may be excluded, modified or amended except by a written instrument duly executed by the Holder and the Maker expressly referring to this Note and setting forth the provision so excluded, modified or amended. 8. Costs. If action is instituted to collect on this Note, the Maker promises to pay all costs and expenses, including reasonable attorney's fees, incurred in connection with such action. 9. Governing Law. This Note shall be governed by, and construed in accordance with, the laws of the State of New York. -4- 10. Notices. All notices hereunder shall be given in writing and shall be deemed delivered when received by the other party hereto at the address set forth in the Purchase Agreement or at such other address as may be specified by such party from time to time in accordance with the Purchase Agreement. [Remainder of Page Intentionally Left Blank] -5- This Note shall be binding upon the successors or assigns of the Maker and shall inure to the benefit of the successors and assigns of the Holder. MICRO THERAPEUTICS, INC. By: -------------------- Name: Title: [Exchangeable Promissory Note Signature Page] EX-3 5 m2586018.txt VOTING AGREEMENT EXHIBIT 3 VOTING AGREEMENT VOTING AGREEMENT, dated as of June 25, 2004 (the "Agreement"), among Micro Therapeutics, Inc., a Delaware corporation (the "Company"), Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership ("WPEP"), Warburg, Pincus Netherlands Equity Partners I, C.V., a Netherlands limited partnership ("WPNEP I"), Warburg, Pincus Netherlands Equity Partners II, C.V., a Netherlands limited partnership ("WPNEP II"), Warburg, Pincus Netherlands Equity Partners III, C.V., a Netherlands limited partnership ("WPNEP III" and together with WPEP, WPNEP I and WPNEP II, collectively, "Warburg Pincus"), and Micro Investment, LLC, a Delaware limited liability company ("Micro LLC" and together with Warburg Pincus, collectively, the "Stockholders"). W I T N E S S E T H WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Company and the Investors are entering into a Note Purchase Agreement, dated as of the date hereof (as such agreement may hereafter be amended from time to time, the "Purchase Agreement"), which provides for, upon the terms and subject to the conditions set forth therein, the sale of $21,007,500 aggregate principal amount of exchangeable promissory notes by the Company (the "Exchangeable Notes"); WHEREAS, the Exchangeable Notes accrue interest at 7% per annum, which interest compounds quarterly; WHEREAS, pursuant to the Purchase Agreement, upon the satisfaction of certain conditions, the Exchangeable Notes will be exchanged for such number of shares of Common Stock determined by dividing (i) the aggregate principal balance on such Exchangeable Notes plus accrued and unpaid interest thereon at the time of the exchange by (ii) $3.10 (subject to appropriate adjustment in the event of any stock dividend, stock split, stock distribution or combination, subdivision, reclassification or other corporate actions having the similar effect with respect to the Common Stock) (the "Exchange"); WHEREAS, the issuance of the Second Closing Shares upon the Exchange will require a vote in favor of such issuance by the stockholders of the Company pursuant to NASD rules; WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to call a special meeting of its stockholders to approve (i) the issuance of the Second Closing Shares upon exchange of the Exchangeable Notes and (ii) such other matters as may be necessary or advisable to consummate the transactions contemplated by the Purchase Agreement; WHEREAS, as of the date hereof, each Stockholder owns beneficially the number of shares of Common Stock set forth opposite such Stockholder's name on Schedule I hereto (all such shares so owned and which may hereafter be acquired by such Stockholder prior to the termination of this Agreement, whether upon the exercise of options, conversion of convertible securities, exercise of warrants or by means of purchase, dividend, distribution or otherwise, being referred to herein as the Stockholder's "Shares"); WHEREAS, as a condition to the Investors' willingness to enter into the Purchase Agreement, the Investors have requested that the Stockholders enter into this Agreement; and WHEREAS, in order to induce the Investors to enter into the Purchase Agreement, the Stockholders are willing to enter into this Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Company and each of the Stockholders hereby agree as follows: ARTICLE I. TRANSFER AND VOTING OF SHARES; AND OTHER COVENANTS OF THE STOCKHOLDERS SECTION 1.1. Voting of Shares. From the date hereof until termination of this Agreement pursuant to Section 4.2 hereof (the "Term"), at any meeting of the stockholders of the Company, however called and at any adjournment or postponement thereof, and in any action by consent of the stockholders of the Company, each Stockholder shall (A) appear at such meeting or otherwise cause its Shares to be counted as present thereat for purposes of establishing a quorum and (B) vote (or cause to be voted) its Shares in favor of (i) the issuance of the Second Closing Shares upon exchange of the Exchangeable Notes and (ii) such other matters as may be necessary or advisable to consummate the transactions contemplated by the Purchase Agreement. SECTION 1.2. No Inconsistent Arrangements. Except as contemplated by this Agreement, the Stockholders shall not during the Term (i) transfer, or consent to any transfer of, any or all of the Stockholders' Shares or any interest therein, or create or permit to exist any lien or other encumbrance on such Shares, (ii) enter into any contract, option or other agreement or understanding with respect to any transfer of any or all of such Shares or any interest therein, (iii) grant any proxy, power-of-attorney or other authorization in or with respect to such Shares, (iv) deposit such Shares into a voting trust or enter into a voting agreement or arrangement with respect to such Shares, or (v) take any other action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the transactions contemplated hereby or by the Purchase Agreement; provided, however, the Stockholders shall be permitted to transfer any or all of such Shares to their respective Affiliates, provided that such Affiliates agree to be bound by the terms of this Agreement. SECTION 1.3. Proxy; Reliance. Each Stockholder hereby revokes any and all prior proxies or powers of attorney in respect of any of such Stockholder's Shares and constitutes and appoints the Company, or any nominee of the Company, with full power of substitution and resubstitution, at any time during the Term, as such Stockholder's true and lawful attorney and proxy (its "Proxy"), for and in its name, place and stead, to vote each of such Shares as its Proxy in favor of the matters set forth in Section 1.1, at every annual, special, adjourned or postponed meeting of the stockholders of the Company, including the right to sign its name (as stockholder) to any consent, certificate or other document relating to the Company that the General Corporation Law of the State of Delaware may permit or require as provided in Section 1.1. -2- THE FOREGOING PROXY AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN INTEREST THROUGHOUT THE TERM. SECTION 1.4. Stop Transfer. The Stockholders shall not request that the Company register the transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any of the Stockholders' Shares, unless such transfer is made in compliance with this Agreement. SECTION 1.5. Additional Shares. Each Stockholder hereby agrees, while this Agreement is in effect, to promptly notify the Company of the number of any new Shares acquired (whether upon the exercise of options, conversion of convertible securities, exercise of warrants or by means of purchase, dividend, distribution or otherwise) by such Stockholder, if any, after the date hereof. SECTION 1.6. Disclosure. Each Stockholder hereby authorizes the Company to publish and disclose in the Proxy Statement (including all documents and schedules filed with the SEC), its identity and ownership of the Shares and the nature of its commitments, arrangements and understandings under this Agreement. ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS Each Stockholder hereby severally and not jointly represents and warrants to the Company as follows: SECTION 2.1. Due Authorization, etc. The Stockholder has all requisite power and authority to execute, deliver and perform this Agreement, to appoint the Company as its Proxy and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement, the appointment of the Company as Stockholder's Proxy and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Stockholder. This Agreement has been duly executed and delivered by or on behalf of the Stockholder and constitutes a legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any proceeding for such remedy may be brought. SECTION 2.2. Required Filings and Consents. The execution and delivery of this Agreement by the Stockholder does not, and the performance of this Agreement by the Stockholder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority (other than any necessary filing under the Exchange Act), domestic or foreign, except where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or delay the performance by the Stockholder of the Stockholder's obligations under this Agreement. -3- SECTION 2.3. Ownership of Shares. The Stockholder is the record and beneficial owner of the Shares set forth opposite its name on Schedule I hereto. On the date hereof, such Shares constitute all of the Shares owned of record or beneficially by such Stockholder. ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to the Stockholders as follows: SECTION 3.1. Due Organization, Authorization, etc. The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby by the Company have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or other similar laws and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any proceeding for such remedy may be brought. ARTICLE IV. MISCELLANEOUS SECTION 4.1. Definitions. Terms used but not otherwise defined in this Agreement have the meanings ascribed to such terms in the Purchase Agreement. SECTION 4.2. Termination. This Agreement shall terminate and be of no further force and effect (i) by the written mutual consent of each of the parties hereto, (ii) automatically and without any required action of the parties hereto upon the Second Closing, (iii) automatically and without any required action of the parties hereto upon the Exchange Termination Date (unless the failure of the Second Closing to occur prior to the Exchange Termination Date results from a breach of Section 1.1, 1.2, 1.3 or 1.4 of this Agreement by the Stockholders or any transferee of the Shares, in which case termination of this Agreement pursuant to this clause (iii) will not be permitted until such time as the breach has been either (x) waived by the Company or (y) cured and the Exchangeable Notes have been exchanged for the Second Closing Shares) or (iv) automatically and without any required action of the parties hereto upon termination of the Purchase Agreement in accordance with its terms. No such termination of this Agreement shall relieve any party hereto from any liability for any breach of this Agreement prior to termination. -4- SECTION 4.3. Further Assurance. From time to time, at another party's request and without consideration, each party hereto shall execute and deliver such additional documents and take all such further action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement. SECTION 4.4. No Waiver. The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, or any custom or practice of the parties at variance with the terms hereof shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance. SECTION 4.5. Specific Performance. Each Stockholder acknowledges that if such Stockholder fails to perform any of its obligations under this Agreement, immediate and irreparable harm or injury would be caused to the Company for which money damages would not be an adequate remedy. In such event, each Stockholder agrees that the Company shall have the right, in addition to any other rights it may have, to specific performance of this Agreement. Accordingly, should the Company institute an action or proceeding seeking specific enforcement of the provisions hereof, each Stockholder hereby waives the claim or defense that the Company has an adequate remedy at law and hereby agrees not to assert in any such action or proceeding the claim or defense that such a remedy at law exists. SECTION 4.6. Notice. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made (i) as of the date delivered or sent by facsimile if delivered personally or by facsimile, and (ii) on the third business day after deposit in the U.S. mail, if mailed by registered or certified mail (postage prepaid, return receipt requested), in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice, except that notices of changes of address shall be effective upon receipt): (a) If to the Company: 2 Goodyear Irvine, California 92618 Attention: Thomas C. Wilder, III Facsimile: (949) 465-1743; and (b) If to a Stockholder, at the address set forth below such Stockholder's name on Schedule I hereto. SECTION 4.7. Expenses. All fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Company, including, without limitation, the fees, costs and expenses incurred by the Stockholders. -5- SECTION 4.8. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 4.9. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the maximum extent possible. SECTION 4.10. Entire Agreement; No Third-Party Beneficiaries. This Agreement constitutes the entire agreement and supersedes any and all other prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof, and this Agreement is not intended to confer upon any other person any rights or remedies hereunder. SECTION 4.11. Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise. SECTION 4.12. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed entirely within that State. SECTION 4.13. Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of the Company and each Stockholder. SECTION 4.14. Waiver. Any party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties of the other parties hereto contained herein or in any document delivered pursuant hereto and (c) waive compliance by the other parties hereto with any of their agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only as against such party and only if set forth in an instrument in writing signed by such party. The failure of any party hereto to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. SECTION 4.15. Descriptive Headings; Interpretation. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. SECTION 4.16. Counterparts. This Agreement may be executed (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in -6- separate counterparts, each of which when executed shall be deemed to be an original but all of which shall constitute one and the same agreement. [Remainder of this page intentionally left blank] -7- IN WITNESS WHEREOF, the Company and the Stockholders have caused this Agreement to be executed as of the date first written above. MICRO THERAPEUTICS, INC. By: /s/ Thomas C. Wilder, III -------------------------- Name: Thomas C. Wilder, III Title: President and Chief Executive Officer MICRO INVESTMENT, LLC By: ev3 LLC, its Sole Member By: /s/ Jim Corbett ---------------- Name: Jim Corbett Title: President and Chief Executive Officer IN WITNESS WHEREOF, the Company and the Stockholders have caused this Agreement to be executed as of the date first written above. MICRO THERAPEUTICS, INC. By: /s/ Thomas C. Wilder, III -------------------------- Name: Thomas C. Wilder, III Title: President and Chief Executive Officer WARBURG, PINCUS EQUITY PARTNERS, L.P. By: Warburg Pincus & Co., its General Partner By: /s/ Sean D. Carney ------------------- Name: Sean D. Carney Title: Partner IN WITNESS WHEREOF, the Company and the Stockholders have caused this Agreement to be executed as of the date first written above. MICRO THERAPEUTICS, INC. By: /s/ Thomas C. Wilder, III -------------------------- Name: Thomas C. Wilder, III Title: President and Chief Executive Officer WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS I, C.V. By: Warburg Pincus & Co., its General Partner By: /s/ Sean D. Carney ------------------- Name: Sean D. Carney Title: Partner IN WITNESS WHEREOF, the Company and the Stockholders have caused this Agreement to be executed as of the date first written above. MICRO THERAPEUTICS, INC. By: /s/ Thomas C. Wilder, III -------------------------- Name: Thomas C. Wilder, III Title: President and Chief Executive Officer WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS II, C.V. By: Warburg Pincus & Co., its General Partner By: /s/ Sean D. Carney ------------------- Name: Sean D. Carney Title: Partner IN WITNESS WHEREOF, the Company and the Stockholders have caused this Agreement to be executed as of the date first written above. MICRO THERAPEUTICS, INC. By: /s/ Thomas C. Wilder, III -------------------------- Name: Thomas C. Wilder, III Title: President and Chief Executive Officer WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS III, C.V. By: Warburg Pincus & Co., its General Partner By: /s/ Sean D. Carney ------------------- Name: Sean D. Carney Title: Partner Schedule I ---------- Number of Shares ---------------- Name and Address of Stockholder Beneficially Owned - ------------------------------- ------------------ Micro Investment, LLC 24,336,759 c/o ev3 LLC 4600 Nathan Lane North Plymouth, MN 55442 Facsimile: (763) 398-7200 Attention: Paul Buckman Warburg, Pincus Equity Partners, L.P. 4,095,174(1) c/o Warburg Pincus & Co. 466 Lexington Avenue New York, NY 10017 Facsimile: (212) 716-5068 Attention: Sean D. Carney Elizabeth H. Weatherman Warburg, Pincus Netherlands Equity Partners I, C.V. 130,006(2) c/o Warburg Pincus & Co. 466 Lexington Avenue New York, NY 10017 Facsimile: (212) 716-5068 Attention: Sean D. Carney Elizabeth H. Weatherman Warburg, Pincus Netherlands Equity Partners II, C.V. 86,670(3) c/o Warburg Pincus & Co. 466 Lexington Avenue New York, NY 10017 Facsimile: (212) 716-5068 Attention: Sean D. Carney Elizabeth H. Weatherman Warburg, Pincus Netherlands Equity Partners 21,6684 III, C.V. c/o Warburg Pincus & Co. 466 Lexington Avenue New York, NY 10017 Facsimile: (212) 716-5068 Attention: Sean D. Carney Elizabeth H. Weatherman - -------- 1 Does not included Shares that are owned by Micro LLC, WPNEP I, WPNEP II or WPNEP III. 2 Does not included Shares that are owned by Micro LLC, WPEP, WPNEP II or WPNEP III. 3 Does not included Shares that are owned by Micro LLC, WPEP, WPNEP I or WPNEP III. 4 Does not included Shares that are owned by Micro LLC, WPEP, WPNEP I or WPNEP II. -----END PRIVACY-ENHANCED MESSAGE-----