Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Merger Agreement" or "Agreement")
dated
as of April 28, 2007, by and among ENPATH MEDICAL, INC. ("Enpath")
, a Minnesota
corporation having its principal executive office at 2300 Berkshire
Lane North,
Minneapolis, Minnesota, 55441, GREATBATCH, LTD. ("Purchaser"), a
New York
corporation having its principal executive office at 9645 Wehrle
Drive,
Clarence, New York 14031; CHESTNUT ACQUISITION CORPORATION ("Merger
Sub"), a
Minnesota corporation and a wholly-owned subsidiary of Purchaser
having its
offices at 9645 Wehrle Drive, Clarence, New York 14031.
WITNESSETH:
WHEREAS, it is proposed that Merger Sub shall commence a tender
offer
(as it may be amended from time to time in accordance with this
Agreement, the
"Offer") to purchase all of the outstanding shares of Enpath Common
Stock (as
defined herein), at a price of $14.38 per share (such amount, or
any different
amount per share offered pursuant to the Offer in accordance with
the terms of
this Agreement, the "Offer Price"), on the terms and subject to the
conditions
set forth herein;
WHEREAS, it is also proposed that, following the consummation of
the
Offer, Merger Sub will merge with and into Enpath with Enpath
surviving as a
wholly-owned subsidiary of Purchaser (the "Merger"), and each share
of Enpath
Common Stock that is not tendered and accepted pursuant to the
Offer will
thereupon be canceled and converted into the right to receive cash
in an amount
equal to the Offer Price, on the terms and subject to the
conditions set forth
herein;
WHEREAS, the Board of Directors of each of Enpath, Purchaser and
Merger
Sub have approved this Agreement and deem it advisable and in the
best interests
of their respective shareholders to consummate the Offer, the
Merger and the
other transactions contemplated hereby, on the terms and subject to
the
conditions set forth herein; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, and as a condition and inducement to Purchaser's and
Merger Sub's
willingness to enter into this Agreement, certain shareholders of
Enpath are
entering into a Tender and Support Agreement substantially in the
form attached
as Exhibit A (the "Tender and Support Agreement").
NOW, THEREFORE, in consideration of the premises and of the
mutual
representations, warranties and covenants herein contained and
intending to be
legally bound hereby, the parties hereto do hereby agree as
follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings
set forth or as referenced below:
<PAGE>
1.1 "Acquisition Proposal" means (i) any proposal or offer for
a
merger, consolidation, dissolution, recapitalization or other
business
combination involving Enpath, (ii) any proposal or offer for the
issuance by
Enpath of over 10% of its equity securities as consideration for
the assets or
securities of another Person, or (iii) any proposal or offer to
acquire in any
manner, directly or indirectly, over 10% of the equity securities
or
consolidated total assets of Enpath, in each case other than the
Merger.
1.2 "Affiliates" means with respect to a specified Person, a Person
who
directly or indirectly through one or more intermediaries,
controls, is
controlled by, or is under common control with, such specified
Person.
1.3 "Business Day" means a day, other than Saturday, Sunday or
other
day on which commercial banks in New York, New York are authorized
or required
by any applicable Legal Requirement to close.
1.4 "Cleanup" means all actions required to (a) cleanup, remove,
treat
or remediate Hazardous Materials in the indoor or outdoor
environment; (b)
prevent the Release of Hazardous Materials so that they do not
migrate, endanger
or threaten to endanger public health or welfare or the indoor or
outdoor
environment; (c) perform pre-remedial studies and investigations
and
post-remedial monitoring and care; or (d) respond to any government
requests for
information or documents in any way relating to cleanup, removal,
treatment or
remediation or potential cleanup, removal, treatment or remediation
of Hazardous
Materials in the indoor or outdoor environment.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
1.6 "Disclosure Schedule" means the Disclosure Schedule delivered
by
Enpath to Purchaser dated the date of this Agreement. Any
information with
respect to a matter that is disclosed by Enpath to Purchaser for
any purpose in
the Disclosure Schedule shall be deemed to be disclosed with
respect to each
other representation or warranty to the extent such relationship is
reasonably
apparent on the face of disclosure in the Disclosure Statement. The
inclusion of
any item in the Disclosure Schedule shall not be deemed an
admission that such
item is a material fact, event or circumstance or that such item
has or had,
individually or in the aggregate, a Material Adverse Effect.
1.7 "Enpath Common Stock" means Enpath common stock with $0.01
par
value.
1.8 "Enpath Credit Agreement" means the Revolving Credit and Term
Loan
Agreement, dated as of October 17, 2003, between Enpath and M&I
Marshall &
Ilsley Bank, as amended.
1.9 "Environmental Claim" means any claim, action, cause of
action,
investigation or written notice by an Person alleging potential
liability
(including, without limitation, potential liability for
investigatory costs,
Cleanup costs, governmental response costs, natural resources
damages, property
damages, personal injuries or penalties) arising out of, based on
or resulting
from (a) the presence or Release of any Hazardous Materials at any
location
operated by Enpath, or (b) circumstances forming the basis of any
violation, or
alleged violation, of any Environmental Law.
2
<PAGE>
1.10 "Environmental Law" means any and all applicable Legal
Requirements, and without limiting the foregoing, any regulations,
orders,
decrees, judgments or injunctions promulgated or entered into by
any
Governmental Entity, relating to the preservation or reclamation of
natural
resources, or to the management, Release (as hereinafter defined)
or threatened
Release of Hazardous Material (as hereinafter defined), including
but not
limited to, the Comprehensive Environmental Response, Compensation
and Liability
Act, 42 U.S.C. ss.ss. 9601 et seq. ("CERCLA"), the Federal Water
Pollution
Control Act, 33 U.S.C. ss.ss. 1251 et seq., the Clean Air Act, 42
U.S.C. ss.
7401 et seq., the Toxic Substances Control Act, 15 U.S.C. ss. 2601
et seq., the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., the
Emergency
Planning and Community Right to Know Act of 1986, 42 U.S.C. ss.
11001 et. seq.,
the Safe Drinking Water Act, 42 U.S.C. ss. 300(f) et seq., the
Hazardous
Materials Transportation Act, 49 U.S.C. ss.ss. 1801 et seq., and
any similar or
implementing state or local law, and all amendments or regulations
promulgated
thereunder.
1.11
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
1.12 "GAAP" means generally accepted accounting principles and
practices in effect in the United States from time to time, applied
consistently
throughout the time periods involved.
1.13 "Governmental Authorization" means any permit, license,
franchise,
approval, consent, permission, confirmation, endorsement, waiver,
certification,
registration, qualification, clearance or other authorization
issued, granted,
given or otherwise made available by or under the authority of any
Governmental
Entity or pursuant to any Legal Requirement.
1.14 "Governmental Entity" means any nation, state, municipality
and
any federal, state, local, foreign, provincial or supranational
court or
governmental agency, authority, instrumentality or regulatory
body.
1.15 "Hazardous Material" means all explosive or regulated
radioactive
materials or substances; petroleum and petroleum products
(including crude oil
or any fraction thereof); asbestos or asbestos-containing
materials; and any
hazardous or toxic materials, wastes or chemicals designated,
defined, listed or
regulated as such pursuant to any Environmental Law.
1.16 "HSR Act" means Hart-Scott-Rodino Antitrust Improvements Act
of
1976, as amended.
1.17 "Intellectual Property Rights" means all U.S. and foreign
(i)
patents, patent applications, patent disclosures, and all related
continuations,
continuations-in-part, divisionals, reissues, re-examinations,
substitutions,
and extensions thereof ("Patents"), (ii) trademarks, service marks,
trade names,
Internet domain names, logos, slogans, trade dress, and other
similar
designations of source or origin, together with the goodwill
symbolized by any
of the foregoing ("Trademarks"), (iii) copyrights and copyrightable
subject
matter ("Copyrights"), (iv) rights of publicity, (v) computer
programs (whether
in source code, object code, or other form), databases,
compilations and data,
technology supporting the foregoing, and all documentation,
including user
manuals and training materials, related to any of the foregoing
("Software"),
(vi) trade secrets and all confidential information, know-how,
inventions,
proprietary processes, formulae, models, and methodologies, (vii)
all rights in
the foregoing and in other similar intangible assets, (viii) all
applications
and registrations for the foregoing and (ix) all rights and
remedies against
infringement, misappropriation, or other violation thereof with
respect to the
foregoing.
3
<PAGE>
1.18 "Leased Real Property" means all of the real property
currently
leased by Enpath, whether or not used in its business, all of which
is disclosed
in more detail in the Disclosure Schedule.
1.19 "Legal Requirement" means any applicable federal, state,
county,
municipal, local or foreign statute, constitution, principle of
common law,
resolution ordinance, code, rule regulation, permit, consent,
waiver, notice,
approval, registration, license, judgment, order, decree,
injunction or other
authorization issued, enacted, adopted, promulgated, implemented or
otherwise
put into effect by or under the authority of any Governmental
Entity or under
the authority of The NASDAQ Stock Market, LLC.
1.20 "Material Adverse Effect" means any effect, change, fact,
event,
occurrence, development or circumstance (any such item, an
"Effect") that,
individually or together with any other Effect that has occurred
prior to the
date of determination of the Material Adverse Effect, that (i) is
materially
adverse (financial or otherwise), to the properties, business,
operations,
financial condition, results of operations, assets or liabilities
of Enpath,
taken as a whole or (ii) prohibits, or materially impedes the
timely
consummation of the Merger; provided, however, that in no event
shall any of the
following occurring after the date hereof, alone or in combination,
be deemed to
constitute, nor be taken into account in determining whether there
has been or
will be, a Material Adverse Effect:
(A) any change in Enpath's stock price or trading volume, or
any
failure by Enpath to meet published or internal revenue or earnings
projections
(it being understood that, except as set forth in clauses B, C, E,
G and H of
this definition, any cause of any such failure may be deemed to
constitute, in
and of itself, a Material Adverse Effect and may be taken into
consideration
when determining whether a Material Adverse Effect has
occurred),
(B) any Effect that results from changes affecting Enpath's
industry
generally (to the extent such Effect is not disproportionate with
respect to
Enpath in any material respect) or the United States economy
generally (to the
extent such Effect is not disproportionate with respect to Enpath
in any
material respect),
(C) any Effect that results from changes affecting general
worldwide
economic or capital market conditions,
(D) any Effect resulting from compliance with the terms and
conditions
of this Agreement,
(E) any Effect caused by an impact to Enpath's relationships with
its
employees, customers, suppliers or partners as a result of the
announcement or
pendency of the of the Offer or the Merger, or the transactions
contemplated by
this Agreement,
4
<PAGE>
(F) any Effect resulting from the litigation filed as Pressure
Products, Inc. v. Enpath Medical, Inc., Civil Action No.
9:06-CV-121, filed in
U.S. Dist. Ct. for Eastern District of Texas, Lufkin Division,
(G) any Effect resulting from any change in any Legal Requirement
after
the date hereof, or
(H) any shareholder litigation arising from allegations of a breach
of
fiduciary duty relating to this Agreement and the transactions
contemplated
hereby.
1.21 "Permitted Lien" means (a) liens for Taxes that are not yet
due or
delinquent or are being contested in good faith by appropriate
proceedings and
for which adequate reserves have been taken on the financial
statements
contained in Enpath's SEC Reports; (b) statutory liens or
landlords', carriers',
warehousemen's, mechanics', suppliers', materialmen's or
repairmen's liens
arising in the ordinary course of business with respect to amounts
not yet
overdue or are being contested in good faith by appropriate
proceedings and for
which adequate reserves have been taken on the financial statements
contained in
Enpath's SEC Reports; (c) with respect to any Leased Real Property,
a Lien
affecting solely the interest of the landlord thereunder and not
the interest of
the tenant thereunder, which does not materially impair the value
or use of such
Leased Real Property; (d) purchase money liens and liens securing
rental
payments under capital lease arrangements; and (e) liens securing
indebtedness
under the Enpath Credit Agreement.
1.22 "Person" means any individual and any corporation,
partnership,
limited liability company, firm, trust, or other business entity
and any
Governmental Entity.
1.23 "Proceeding" means any claim, action, suit, arbitration,
grievance, proceeding or investigation.
1.24 "Product Liability" means any liability, claim or expense
(including attorneys' fees) arising in whole or in part out of a
breach of any
product warranty (whether express or implied), strict liability in
tort,
negligent design or manufacture of product, negligent provision for
services,
product recall, or any other liability, claim or expense arising
from the
manufacturing, packaging, labeling (including instructions for
use), marketing,
or sale of products.
1.25 "Release" shall have the same meaning as in CERCLA.
1.26 "Representatives" means, with respect to any Person, the
directors, officers, employees, financial advisors, attorneys,
accountants,
consultants, agents and other authorized representatives of such
Person, acting
in such capacity.
1.27 "Rights" means options, warrants, and all other rights,
convertible securities and arrangements or commitments which
obligate Enpath to
issue or dispose of any of its capital stock, and stock
appreciation rights,
performance units and other similar stock-based rights whether they
obligate
Enpath to issue stock or other securities or to pay cash.
5
<PAGE>
1.28 "Securities Act" means the Securities Act of 1933, as amended,
and
the rules and regulations promulgated thereunder.
1.29 "Subsidiary" or "Subsidiaries" means with respect to any
party,
any corporation, company, partnership or other organization,
whether
incorporated or unincorporated, which is or was consolidated with
such party for
financial reporting purposes.
1.30 "Superior Acquisition Proposal" means any proposal made by a
third
party to acquire directly or indirectly more than 50% of the voting
power of the
equity securities of Enpath then outstanding or all or
substantially all of the
assets of Enpath, pursuant to a purchase, tender or exchange offer,
a merger, a
consolidation, a liquidation or dissolution, a recapitalization, a
sale of all
or substantially all of its assets or otherwise, which Enpath's
Board of
Directors determines in good faith, after consultation with Greene
Holcomb &
Fisher or other independent financial advisor of nationally
recognized
reputation and consultation with outside legal counsel, to be (i)
on terms more
favorable from a financial point of view to the holders of Enpath
Common Stock
than the Offer, the Merger, and the other transactions contemplated
by this
Agreement, taking into account all the terms and conditions of such
proposal and
this Agreement (including any proposal by Purchaser to amend the
terms of the
Offer, the Merger and the other transactions contemplated by this
Agreement),
(ii) is not subject to any financing condition or, if financing is
required,
such financing is then fully committed to the Third Party or
reasonably
determined to be available by Enpath's Board of Directors, and
(iii) reasonably
capable of being completed, taking into account all financial,
regulatory,
legal, timing and other aspects of such proposal.
1.31 "Tax," collectively, "Taxes" means all federal, state, local
or
foreign taxes, however denominated, including any interest,
penalties, criminal
sanctions or additions to tax (including, without limitation, any
underpayment
penalties for insufficient estimated tax payments) or other
additional amounts
that may become payable in respect thereof (or in respect of a
failure to file
any Tax Return when and as required), imposed by any Governmental
Entity, which
taxes shall include, without limiting the generality of the
foregoing, all
income taxes, payroll and employment taxes, withholding taxes
(including
withholding taxes in connection with amounts paid or owing to any
employee,
independent contractor, creditor, shareholder or other person or
entity),
unemployment insurance taxes, social security (or similar) taxes,
sales and use
taxes, excise taxes, franchise taxes, gross receipts taxes,
occupation taxes,
real and personal property taxes, stamp taxes, value added taxes,
transfer
taxes, profits or windfall profits taxes, licenses in the nature of
taxes,
estimated taxes, severance taxes, duties (custom and others),
workers'
compensation taxes, premium taxes, environmental taxes (including
taxes under
Section 59A of the Code), disability taxes, registration taxes,
alternative or
add-on minimum taxes, estimated taxes, and other fees, assessments,
charges or
obligations of the same or of a similar nature.
1.32 "Tax Return," collectively, "Tax Returns" means all
returns,
reports, estimates, information statements or other written
submissions, and any
schedules or attachments thereto, required or permitted to be filed
pursuant to
Legal Requirements of any Governmental Entity Tax authority,
including but not
limited to, original returns and filings, amended returns, claims
for refunds,
information returns, ruling requests, administrative or judicial
filings,
accounting method change requests, responses to revenue agents'
reports
(federal, state or local) and settlement documents.
6
<PAGE>
1.33 "Triggering Event" shall occur if:
(A) a tender offer or exchange offer relating to the securities
of
Enpath shall have commenced by a Third Party and Enpath shall not
have sent to
securityholders, within ten business days after the commencement of
such tender
offer or exchange offer, a statement disclosing that Enpath's Board
of Directors
recommends rejection of such tender offer or exchange offer;
(B) an Acquisition Proposal is announced, and Enpath fails to issue
a
press release announcing its opposition to the Acquisition Proposal
within ten
business days after such Acquisition Proposal is announced;
(C) Enpath's Board of Directors fails to reaffirm, unanimously
and
without qualification, its recommendation, or fails to publicly
state,
unanimously and without qualification, that the Merger is in the
best interests
of Enpath's shareholders within ten business days after Purchaser
requests in
writing that such action be taken; or
(D) Enpath's fails to file the Schedule 14D-9 as provided in
Section
2.2.3 of this Agreement.
1.34 "Third Party" means any Person or "group" as defined in
Section
13(d) of the 1934 Act, other than Purchaser or any of its
Affiliates or
Representatives.
1.35 "Warrants" means the right to purchase, in the aggregate,
10,000
shares of Enpath Common Stock, at a price of $8.36 per share,
granted by Enpath
pursuant to a Warrant Agreements dated October 23, 2003 and issued
to Joseph W.
Caruso and Burton F. Meyers, III in connection with Enpath's
acquisition of the
operating assets of BIOMEC Cardiovascular, Inc. on October 23,
2003.
1.36 The following terms have the meaning set forth in the Sections
set
forth below:
7
<PAGE>
<TABLE>
<CAPTION>
Defined Term
Location of Definition
----------
-------------------
<S>
<C>
Adverse Recommendations
Change.....................................ss. 6.21
Affiliate
Transaction..............................................ss.
4.19
Agreement..........................................................ss.
Preamble Board
Recommendation.....................................................ss.
2.2.1
CERCLA.............................................................ss.
1.10
Certificate(s).....................................................ss.
3.6.2
Certifications.....................................................ss.
4.7.1
Closing............................................................ss.
3.10
Closing
Date.......................................................ss.
3.10
Compensation
Committee.............................................ss.
4.12.13
Confidential
Information...........................................ss.
7.4.1
Confidentiality
Agreement..........................................ss. 6.2.2
Contemplated
Transactions..........................................ss.
4.4.1
Continuing
Directors...............................................ss.
2.3.3
Continuing
Employees...............................................ss.
7.8.1
Copyrights.........................................................ss.
1.17
Dissenting
Shares..................................................ss.
3.8
EDGAR..............................................................ss.
4.7.1
Effect.............................................................ss.
1.20
Effective
Time.....................................................ss.
3.10
Employee
Plans.....................................................ss.
4.12.1
Employment Compensation
Arrangement................................ss. 4.12.13
End
Date...........................................................ss.
9.1.4
Enpath.............................................................ss.
Preamble
Enpath Board
Recommendation........................................ss.
7.2.2
Enpath Compensation
Approvals......................................ss. 4.12.13
Enpath Compensation
Arrangement....................................ss. 4.12.13
Enpath Disclosure
Documents........................................ss. 4.7.9
Enpath Shareholder
Approval........................................ss. 4.4.1
Enpath Shareholders'
Meeting.......................................ss. 7.1.1
ERISA..............................................................ss.
4.12.1
ERISA
Affiliate....................................................ss.
4.12.1
Exchange
Agent.....................................................ss.
3.6.1
Exchange
Fund......................................................ss.
3.6.1
Existing
Policy....................................................ss.
7.7.2
FDA................................................................ss.
4.6.2
Filed SEC
Reports..................................................ss.
4.7.1
Financial
Statements...............................................ss.
4.7.4
Foreign Competition
Laws...........................................ss. 7.6.2
Indemnified
Parties................................................ss.
7.7.1
Lien...............................................................ss.
4.5.1
Material
Contracts.................................................ss.
4.16.1
Maximum
Amount.....................................................ss.
7.7.2
MBCA...............................................................ss.
2.2.1
Merger.............................................................ss.
Preamble
Merger
Agreement...................................................ss.
Preamble
Merger
Consideration...............................................ss.
3.5.1
Merger
Sub.........................................................ss.
Preamble
Minimum
Condition..................................................ss.
2.1.1
Off-Balance Sheet
Arrangements.....................................ss. 4.7.4
Offer..............................................................ss.
Preamble
Offer
Documents....................................................ss.
2.1.2
Offer
Price........................................................ss.
Preamble
Options............................................................ss.
3.7.1
Patents............................................................ss.
1.17
Permits............................................................ss.
4.13
Proxy
Statement....................................................ss.
4.7.9
Purchaser..........................................................ss.
Preamble
Required
Approvals.................................................ss.
7.6.1
Restricted Stock
Grant.............................................ss. 3.7.1
Restricted Stock Incentive
Plan....................................ss. 4.2.1
Sarbanes-Oxley.....................................................ss.
4.7.1
Schedule
14D-9.....................................................ss.
2.2.3
Schedule
TO........................................................ss.
2.1.2
SEC
Reports........................................................ss.
4.7.1
Software...........................................................ss.
1.17
Stock
Plans........................................................ss.
3.7
Subsequent Offering
Period.........................................ss. 2.1.1
Trademarks.........................................................ss.
1.17
90% Top-Up
Option..................................................ss.
2.4.1
90% Top-Up Option
Shares...........................................ss. 2.4.1
</TABLE>
In addition, the following terms shall be interpreted as set
forth
below:
(A) The words "hereof," "herein," and "hereunder" and words of
similar
import, when used in this Agreement, shall refer to this Agreement
as a whole
and not to any particular provisions of this Agreement.
(B) Terms defined in the singular shall have a comparable meaning
when
used in the plural, and vice-versa.
(C) References to the "knowledge" of Enpath shall refer to (i)
the
actual knowledge of any fact or matter by any member of Enpath's
Board of
Directors, or (ii) the actual knowledge, after a reasonable inquiry
in
connection with the preparation of the Disclosure Schedule, by
Enpath's officers
and Enpath's executive level employees listed on Section 1.36(C) of
the
Disclosure Schedule hereto, of any fact or matter.
(D) References to an "Exhibit" or to a "Schedule" are, unless
otherwise
specified, to one of the Exhibits or Schedules attached to or
referenced in this
Agreement, and references to an "Article" or a "Section" are,
unless otherwise
specified, to one of the Articles or Sections of this
Agreement.
8
<PAGE>
ARTICLE 2
THE OFFER
2.1 THE OFFER
2.1.1 Provided that nothing shall have occurred that, had the
Offer
been commenced, would give rise to the right to terminate the Offer
pursuant to
any of the conditions set forth in Annex I, as promptly as
practicable after the
date hereof (and in any event no later than seven Business Days
after the date
hereof), Merger Sub shall, and Purchaser shall cause Merger Sub to,
commence
(within the meaning of Rule 14d-2 under the Exchange Act) the
Offer. The Offer
shall be subject to the condition that there shall be validly
tendered in
accordance with the terms of the Offer, prior to the scheduled
expiration of the
Offer (as it may be extended hereunder) and not withdrawn, a number
of shares of
Enpath Common Stock that, together with the shares of Enpath Common
Stock then
directly or indirectly owned by Purchaser, represents at least a
majority of all
Enpath Common Stock then outstanding on a fully-diluted basis (the
"Minimum
Condition") and to the other conditions set forth in Annex I,
Merger Sub
expressly reserves the right to waive any of the conditions to the
Offer and to
make any change in the terms of or conditions to the Offer;
provided that unless
otherwise provided by this Agreement or previously approved by
Enpath in
writing,
(A) the Minimum Condition may not be waived,
(B) no change may be made that changes the form of consideration to
be
paid pursuant to the Offer, decreases the Offer Price or the number
of shares of
Enpath Common Stock sought in the Offer, imposes conditions to the
Offer in
addition to those set forth in Annex I, or otherwise amends or
modifies the
Offer in any manner materially adverse to the holders of Enpath
Common Stock,
and
(C) the Offer may not be extended except as set forth in this
Section
2.1.1.
Subject to the terms and conditions of this Agreement, the Offer
shall expire at
midnight, New York City time, on the date that is 20 Business Days
(for this
purpose calculated in accordance with Section 14d-1(g)(3) under the
Exchange
Act) after the date that the Offer is commenced. Merger Sub shall
extend the
Offer for successive periods of up to twenty (20) Business Days
each:
(i) if, at the scheduled or extended expiration date of the Offer,
any
of the conditions to the Offer shall not have been satisfied or
waived, from
time to time, until the earliest to occur of:
(a) the satisfaction or waiver of such conditions,
(b) the reasonable determination by Purchaser that any such
condition to the Offer is not capable of being satisfied on or
prior to the End
Date, provided that the inability to satisfy such condition does
not result from
any breach of any provision of this Agreement by Purchaser or
Merger Sub, and
(c) the End
Date, and
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<PAGE>
(ii) for any period required by any rule, regulation,
interpretation or
position of the SEC or the staff thereof applicable to the Offer or
any period
set forth by any applicable Legal Requirement.
Following expiration of the Offer, Merger Sub may, in its sole
discretion,
provide one or more subsequent offering periods (each, a
"Subsequent Offering
Period") in accordance with Rule 14d-11 of the Exchange Act, if, as
of the
commencement of each such period, there shall not have been validly
tendered and
not withdrawn pursuant to the Offer and any prior Subsequent
Offering Period
that number of shares of Enpath Common Stock necessary to permit
the Merger to
be effected without a meeting of shareholders of Enpath, in
accordance with
Section 302A.621 of the Minnesota Business Corporation Act
("MBCA"). Subject to
the foregoing, including the requirements of Rule 14d-11, and upon
the terms and
subject to the conditions of the Offer, Merger Sub shall, and
Purchaser shall
cause Merger Sub to, accept for payment and pay for, as promptly as
practicable,
all shares of Enpath Common Stock that were either:
(A) validly tendered and not withdrawn pursuant to the Offer after
the
final expiration of the Offer, or
(B) validly tendered in any Subsequent Offering Period.
The Offer Price payable in respect of each share of Enpath Common
Stock validly
tendered and not withdrawn pursuant to the Offer or validly
tendered in any
Subsequent Offering Period shall be paid net to the holder thereof
in cash,
subject to reduction for any applicable withholding Taxes.
2.1.2 As soon as practicable on the date of the commencement of
the
Offer, Purchaser and Merger Sub shall:
(A) file with the SEC a Tender Offer Statement on Schedule TO
with
respect to the Offer (together with all amendments and supplements
thereto and
including exhibits thereto, the "Schedule TO") that shall include
the summary
term sheet required thereby and, as exhibits or incorporated by
reference
thereto, the Offer to Purchase and forms of letter of transmittal
and summary of
advertisement, if any, in respect of the Offer (collectively,
together with any
amendments or supplements thereto, the "Offer Documents").
(B) cause the Offer Documents to be disseminated to the holders
of
Enpath Common Stock. Enpath shall promptly furnish to Purchaser and
Merger Sub
in writing all information concerning Enpath that may be required
by applicable
securities laws or reasonably requested by Purchaser or Merger Sub
for inclusion
in the Schedule TO or the Offer Documents.
(C) Parent and Merger shall timely file with the Commissioner of
the
State of Minnesota any registration statement relating to the Offer
required to
be filed pursuant to Chapter 80B of the Minnesota Statutes and
shall disseminate
to the holders of Enpath Common Stock via the Offer Documents the
information
set forth in any such registration statement to the extent and
within the time
period required by Chapter 80B of the Minnesota Statutes.
Each of Purchaser, Merger Sub and Enpath agrees promptly to correct
any
information provided by it for use in the Schedule TO or the Offer
Documents if
and to the extent that such information shall have become false or
misleading in
any material respect. Purchaser and Merger Sub agree to take all
steps necessary
to cause the Schedule TO as so corrected to be filed with the SEC
and the Offer
Documents as so corrected to be disseminated to holders of Enpath
Common Stock,
in each case as and to the extent required by applicable U.S.
federal securities
laws. Enpath and its counsel shall be given a reasonable
opportunity to review
and comment on the Schedule TO and the Offer Documents each time
before any such
document is filed with the SEC, and Purchaser and Merger Sub shall
give
reasonable and good faith consideration to any comments made by
Enpath and its
counsel.
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Purchaser and Merger Sub shall promptly provide Enpath and its
counsel with:
(i) any comments or other communications, whether written or oral,
that
Purchaser or Merger Sub or their counsel may receive from time to
time from the
SEC or its staff with respect to the Schedule TO or Offer Documents
promptly
after receipt of those comments or other communications, and
(ii) a reasonable opportunity to participate in the response of
Purchaser and Merger Sub to those comments and to provide comments
on that
response (to which reasonable and good faith consideration shall be
given),
including by participating with Purchaser and Merger Sub or their
counsel in any
discussions or meetings with the SEC.
2.2 ACTIONS BY ENPATH
2.2.1 Enpath hereby consents to the Offer and represents that at
a
meeting duly called and held prior to the execution of this
Agreement at which
all directors of Enpath were present, Enpath's Board of Directors
duly and
unanimously adopted resolutions:
(A) declaring that this Agreement and the transactions
contemplated
hereby, including the Offer and the Merger, are fair to and in the
best
interests of Enpath's shareholders,
(B) approving and declaring advisable this Agreement and the
transactions contemplated hereby, including the Offer and the
Merger, and
(C) recommending that the shareholders of Enpath accept the
Offer,
tender their shares of Enpath Common Stock to Merger Sub pursuant
to the Offer
and grant Enpath Shareholder Approval (such recommendation, the
"Enpath Board
Recommendation").
At a meeting duly called and held prior to the execution of this
Agreement at
which all "disinterested directors" (as defined in Section 302A.673
of the MBCA)
of Enpath were present, a duly authorized special committee of
Enpath's Board of
Directors duly and unanimously adopted resolutions approving this
Agreement and
the transactions contemplated hereby for purposes of Section
302A.673 of the
MBCA. Enpath hereby consents to the inclusion of the foregoing
determinations
and approvals in the Offer Documents and, to the extent that no
Adverse
Recommendation Change shall have occurred in accordance with
Section 6.2, Enpath
hereby consents to the inclusion of the Enpath Board Recommendation
in the Offer
Documents.
2.2.2
Enpath shall cause its transfer agent to promptly furnish
Purchaser with a list of its shareholders, mailing labels and any
available
listing or computer file containing the names and addresses of all
record
holders of Enpath Common Stock and lists of securities positions of
Enpath
Common Stock held in stock depositories, in each case true and
correct as of the
most recent practicable date, and shall provide to Purchaser such
additional
information (including updated lists of shareholders, mailing
labels and lists
of securities positions) and such other assistance as Purchaser may
reasonably
request in connection with the Offer. Purchaser and Merger Sub
shall treat the
information contained in such labels, listing or files and any
additional
information referred to in the preceding sentence as Confidential
Information,
as defined in Section 7.4.1 herein.
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2.2.3 As soon as practicable on the day that the Offer is
commenced,
Enpath shall file with the SEC and disseminate to the holders of
Enpath Common
Stock, in each case, as to the extent required by applicable U.S.
federal
securities laws, a Solicitation/Recommendation Statement of
Schedule 14D-9
(together with any amendments or supplements thereto, the "Schedule
14D-9")
that, subject to Section 6.2.2, shall reflect the Enpath Board
Recommendation.
Each of Purchaser and Merger Sub shall promptly furnish to Enpath
in writing all
information concerning Purchaser and Merger Sub that may be
required by
applicable securities laws or reasonably requested by Enpath for
inclusion in
the Schedule 14D-9. Each of Enpath, Purchaser and Merger Sub agrees
promptly to
correct any information provided by it for use in the Schedule
14D-9 if and to
the extent that it shall have become false or misleading in any
material
respect. Enpath agrees to take all steps necessary to cause the
Schedule 14D-9
as so corrected to be filed with the SEC and to be disseminated to
holders of
Enpath Common Stock, in each case as and to the extent required by
applicable
U.S. federal securities laws. Purchaser and its counsel shall be
given a
reasonable opportunity to review and comment on the Schedule 14D-9
each time
before it is filed with the SEC, and Enpath shall give reasonable
and good faith
consideration to any comments made by Purchaser, Merger Sub and
their counsel.
Enpath shall promptly provide Purchaser, Merger Sub and their
counsel with:
(A) any comments or other communications, whether written or oral,
that
Enpath or its counsel may receive from time to time from the SEC or
its staff
with respect to the Schedule 14D-9 promptly after receipt of those
comments or
other communications, and
(B) a reasonable opportunity to participate in Enpath's response
to
those comments and to provide comments on that response (to which
reasonable and
good faith consideration shall be given), including by
participating with Enpath
or its counsel in any discussions or meetings with the SEC.
2.3 DIRECTORS
2.3.1 Effective upon the acceptance for payment by Merger Sub of
Enpath
Common Stock equal to at least a majority of the then outstanding
shares of
Enpath Common Stock entitled to vote on any matter at a meeting of
the
shareholders of Enpath pursuant to the Offer, Purchaser shall be
entitled to
designate the number of directors, rounded up to the next whole
number, on the
Enpath Board of Directors that equals the product of:
(a) the total number of directors on Enpath's Board of
Directors
(giving effect to the election of any additional directors pursuant
to this
Section), and
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(b) the percentage that the number of shares of Enpath Common
Stock
beneficially owned by either Purchaser or Merger Sub (including
shares of Enpath
Common Stock accepted for payment) bears to the total number of
shares of Enpath
Common Stock outstanding, and Enpath shall take all action
necessary to cause
Purchaser's designees to be elected or appointed to Enpath's Board
of Directors,
including increasing the number of directors, and seeking and
accepting
resignations of incumbent directors. At such time, Enpath shall use
all
reasonable best efforts to cause individuals designated by
Purchaser to
constitute the number of members, rounded up to the next whole
number, on each
committee of the Enpath Board that represents the same percentage
as such
individuals represent on the Enpath Board, to the fullest extent
permitted by
any applicable Legal Requirements. Notwithstanding the foregoing,
until
Purchaser and Merger Sub together acquire a majority of the
outstanding shares
of Enpath Common Stock on a fully diluted basis, Enpath shall use
its reasonable
best efforts to ensure that all members of the Enpath Board and
such committees
as of the date hereof who are not officers or employees of Enpath
shall remain
members of Enpath's Board and such committees and boards.
2.3.2 Enpath's obligations to appoint Purchaser's designees to
Enpath's
Board shall be subject to Section 14(f) of the Exchange Act and
Rule 14f-1
promulgated thereunder. Enpath shall promptly take all actions, and
shall
include in the Schedule 14D-9 such information with respect to
Enpath and its
officers and directors, as Section 14(f) and Rule 14f-1 require in
order to
fulfill its obligations under this Section. Purchaser shall supply
to Enpath in
writing any information with respect to itself and its nominees,
officers,
directors and affiliates required by Section 14(f) and Rule
14f-1.
2.3.3 Following the election or appointment of Purchaser's
designees
pursuant to Section 2.3.1 and until the Effective Time, the
approval of a
majority of the directors of Enpath then in office who were not
designated by
Purchaser (the "Continuing Directors") (or the approval of the sole
Continuing
Director if there shall be only one Continuing Director) shall be
required to
authorize (and such authorization shall constitute the
authorization of the
Enpath Board and no other action on the part of Enpath, including
any action by
any other director of Enpath, shall be required to authorize) any
termination of
this Agreement by Enpath, any amendment of this Agreement, any
extension of time
for performance of any obligation or action hereunder by Purchaser
or Merger
Sub, any waiver of compliance with any of the agreements or
conditions contained
herein for the benefit of Enpath, and any amendment or change to
Section 7.7.
Following the election of appointment of Purchaser's designees
pursuant to
Section 2.3.1 and until the Effective Time, any actions with
respect to the
enforcement of this Agreement by Enpath shall be effected only by
the action of
a majority of the Continuing Directors (or the approval of the sole
Continuing
Director if there shall be only one Continuing Director). Between
the time
Merger Sub becomes entitled to designate directors pursuant to this
Section 2.3
and the Effective Time, none of Purchaser, Merger Sub or their
respective
Affiliates shall take any action to remove a Continuing Director
from office.
2.4 90% TOP-UP OPTION
2.4.1 Subject to the terms and conditions set for herein, Enpath
hereby
irrevocably grants to Merger Sub an option (the "90% Top-Up
Option"),
exercisable upon the terms and conditions set forth in this Section
2.4, to
purchase that number of shares of Enpath Common Stock (the "90%
Top-Up Option
Shares") equal to the lowest number of newly issued shares of
Enpath Common
Stock that, when added to the number of shares of Enpath Common
Stock directly
or indirectly owned by Purchaser at the time of such exercise,
shall constitute
one share more than 90% of shares of Enpath Common Stock then
outstanding
(taking into account the issuance of the 90% Top-Up Option Shares)
at a cash
price per share equal to the Offer Price; provided that:
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<PAGE>
(i) in no event may the 90% Top-Up Option be exercisable unless
following the time of acceptance by Purchaser of Enpath Common
Stock tendered in
the Offer or after a Subsequent Offering Period, more than 80% of
the then
outstanding shares of Enpath Common Stock have been validly
tendered and not
withdrawn pursuant to the Offer;
(ii) in no event shall the 90% Top-Up Option be exercisable for
a
number of shares of Enpath Common Stock (a) which exceeds that
number which is
equal to nineteen and nine-tenths percent (19.9%) of the shares of
Enpath Common
Stock outstanding on the date of this Agreement, (b) that would
require Enpath
to obtain shareholder approval under any applicable Legal
Requirement, or (c) in
excess of Enpath's then authorized and unissued shares of Enpath
Common Stock
(giving effect to shares of Enpath Common Stock reserved for
issuance under the
Warrants and Stock Plans (both as defined herein) as if such shares
were
outstanding); and
(iii) the 90% Top-Up Option may not be exercised if any provision
of
any Legal Requirement or any judgment, injunction, order or decree
of any
Governmental Entity shall prohibit, or require any action, consent,
approval,
authorization or permit of, action by, or filing with or
notification to, any
Governmental Entity or Enpath's shareholders in connection with the
exercise of
the 90% Top-Up Option or the delivery of the 90% Top-Up Option
Shares in respect
of such exercise, which action, consent, approval, authorization or
permit,
action, filing or notification has not theretofore been obtained or
made, as
applicable.
2.4.2 Subject to the terms and conditions herein, Merger Sub
may
exercise the 90% Top-Up Option, in whole but not in part, at any
time after the
time of acceptance of Enpath Common Stock tendered in the Offer or
after a
Subsequent Offering Period and prior to the earlier to occur of (a)
the
Effective Time and (b) the termination of this Agreement in
accordance with its
terms.
2.4.3 If Merger Sub wishes to exercise the 90% Top-Up Option,
Merger
Sub shall send to Enpath a written notice (a "90% Top-Up Exercise
Notice, and
the date of receipt of such notice the "90% Top-Up Notice Date")
specifying the
place for the closing of the purchase and sale of shares of Enpath
Common Stock
pursuant to the 90% Top-Up Option (the "90% Top-Up Closing").
Enpath shall,
promptly after receipt of the 90% Top-Up Exercise Notice, deliver a
written
notice to Merger Sub confirming (i) the number of shares of Enpath
Common Stock
then outstanding on a fully-diluted basis, and (ii) the number of
90% Top-Up
Shares and the aggregate purchase price therefor.
2.4.4 At the 90% Top-Up Closing, subject to the terms and
conditions of
this Agreement, Enpath shall deliver to Merger Sub a certificate or
certificates
evidencing the applicable number of 90% Top-Up Option Shares, and
Merger Sub
shall purchase each Top-Up Option Share from Enpath at a price per
share equal
to the Offer Price. Payment by Merger Sub of the purchase price for
the 90%
Top-Up Option Shares may be made, at Merger Sub's option, by
delivery of
immediately available funds by wire transfer to an account
designated by Enpath.
The parties shall cooperate to ensure that the issuance of the 90%
Top-Up Option
Shares is accomplished consistent with all applicable Legal
Requirements,
including all federal and state securities laws.
14
<PAGE>
2.4.5 Upon the delivery by Merger Sub to Enpath of the 90%
Top-Up
Exercise Notice, and the tender of the consideration described in
Section 2.4.4,
Merger Sub shall be deemed to be the holder of record of the 90%
Top-Up Option
Shares issuable upon that exercise, notwithstanding that the stock
transfer
books of the Company shall then be closed or that certificates
representing
those 90% Top-Up Option Shares shall not then be actually delivered
to Merger
Sub or Enpath shall have failed or refused to designate the account
described in
Section 2.4.4.
2.4.6 Purchaser and Merger Sub acknowledge that the shares of
Enpath
Common Stock which Merger Sub may acquire upon exercise of the 90%
Top-Up Option
will not be registered under the 1933 Act and will be issued in
reliance upon an
exemption thereunder for transactions not involving a public
offering. Purchaser
and Merger Sub represent and warrant to Enpath that Merger Sub is,
or will be
upon the purchase of the 90% Top-Up Option Shares, an "accredited
investor", as
defined in Rule 501 of Regulation D under the Securities Act.
Merger Sub agrees
that the 90% Top-Up Option and the 90% Top-Up Option Shares to be
acquired upon
exercise of the 90% Top-Up Option are being and will be acquired by
Merger Sub
for the purpose of investment and not with a view to, or for resale
in
connection with, any distribution thereof (within the meaning of
the Securities
Act). Any certificates evidencing 90% Top-Up Option Shares may
include any
legends required by applicable securities Laws.
ARTICLE 3
THE PLAN OF MERGER; CLOSING
3.1 THE MERGER
Subject to the terms and conditions of this Agreement, at the
Effective
Time (as hereinafter defined), Merger Sub shall be merged with and
into Enpath,
pursuant to the provisions of, and with the effect provided in the
MBCA. At the
Effective Time, the separate existence of Merger Sub shall cease
and Enpath, as
the Surviving Corporation, shall possess all the rights, powers,
privileges,
immunities and franchises and be subject to all of the duties,
obligations, and
liabilities of Enpath and Merger Sub, all as provided under the
MBCA.
3.2 ARTICLES OF INCORPORATION AND BY-LAWS
(A) The Articles of Incorporation of Enpath in effect immediately
prior
to the Effective Time shall be amended to read as set forth on
Exhibit B and, as
so amended, shall be the Articles of Incorporation of the Surviving
Corporation
until amended in accordance with applicable law.
(B) The Bylaws of Merger Sub in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation,
until
thereafter amended in accordance with applicable law.
15
<PAGE>
3.3 BOARD OF DIRECTORS
The directors and officers of Merger Sub immediately prior to
the
Effective Time shall be the directors and officers of the Surviving
Corporation,
each to hold office in accordance with the Articles of
Incorporation and Bylaws
of the Surviving Corporation.
3.4 MERGER SUB STOCK
At the Effective Time, each issued and outstanding share of the
common
stock, $.01 par value per share, of Merger Sub shall be
automatically converted
into one validly issued, fully paid and nonassessable share of
common stock,
$.01 par value per share, of the Surviving Corporation. Each stock
certificate
of Merger Sub evidencing ownership of any such shares of common
stock of the
Merger Sub shall continue to evidence ownership of such shares of
common stock
of the Surviving Corporation.
3.5 MERGER CONSIDERATION
The manner and basis of converting the Enpath Common Stock in
conjunction with the Merger shall be as set forth in this Section
3.5.
3.5.1 At the Effective Time, by virtue of the Merger and without
any
action on the part of the holder thereof, each share of Enpath
Common Stock that
is issued and outstanding immediately prior to the Effective Time
(other than
any shares of Enpath Common Stock to be cancelled in accordance
with Section
3.5.3) shall be converted into the right to receive from the
Surviving
Corporation or the Purchaser (through the Exchange Agent), and
become
exchangeable for, $14.38 in cash or any different amount as may
have been paid
per share of Enpath Common Stock in the Offer, without interest,
(the "Merger
Consideration"). As of the Effective Time, all shares of Enpath
Common Stock
upon which the Merger Consideration is payable pursuant to this
Section 3.5
shall no longer be outstanding and shall automatically be cancelled
and retired
and shall cease to exist, and each holder of a certificate
representing any such
shares of Enpath Common Stock shall cease to have any rights with
respect
thereto, except the right to receive the Merger Consideration.
3.5.2 At the Effective Time, each share of common stock, par value
$.01
per share, of Merger Sub that is issued and outstanding immediately
prior to the
Effective Time shall be converted into and become one fully paid
and
non-assessable share of common stock, $.01 par value per share, of
the Surviving
Corporation.
3.5.3 All shares of Enpath Common Stock owned by Purchaser, Merger
Sub
or any subsidiary of Purchaser or Merger Sub shall, by virtue of
the Merger and
without any action on the part of the holder thereof, be cancelled
and retired
and shall cease to exist, and no cash or other consideration shall
be delivered
or deliverable in exchange therefor.
3.6 EXCHANGE OF SHARES
3.6.1 Prior to the Effective Time, Purchaser shall deposit or
shall
cause to be deposited with a bank or trust company designated by
Purchaser after
consultation with Enpath (the "Exchange Agent"), for the benefit of
the holders
of shares of Enpath Common Stock that have been converted into the
right to
receive, and become exchangeable for, the Merger Consideration
pursuant to
Section 3.5, for exchange in accordance with this Article 3, an
amount equal to
the aggregate Merger Consideration (such consideration being
hereinafter
referred to as the "Exchange Fund"). The Exchange Agent shall,
pursuant to
irrevocable instructions of the Surviving Corporation, and in
accordance with
the provisions of Section 3.6.2 make payments of the Merger
Consideration out of
the Exchange Fund. The Exchange Fund shall not be used for any
purpose other
than as described in this Section 3.6.
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3.6.2 As soon as reasonably practicable after the Effective Time,
the
Surviving Corporation shall cause the Exchange Agent to mail to
each holder of
record of shares of Enpath Common Stock that are represented by
either (a) a
certificate or certificates that immediately prior to the Effective
Time
represented outstanding shares of Enpath Common Stock (the
"Certificates") or
(b) an entry to that effect in the shareholder records maintained
on behalf of
the Company Stock transfer agent (the "Book Entry Shares") whose
shares were
converted into the right to receive the Merger Consideration
pursuant to Section
3.5.1:
(A)
a letter of transmittal (which shall specify that delivery shall
be
effected, and risk of loss and title to the Certificates (if any)
shall pass,
only upon delivery of the Certificates to the Exchange Agent and
shall be in
such form and have such other customary provisions as the Surviving
Corporation
may reasonably specify); and
(B) instructions for use by such holders in effecting the surrender
of
the Certificates or authorizing transfer and cancellation of Book
Entry Shares
in exchange for the Merger Consideration.
Upon surrender of a Certificate for cancellation to the Exchange
Agent or to
such other agent or agents as may be appointed by the Surviving
Corporation, or
authorizing transfer of Book Entry Shares, together with such
letter of
transmittal, duly executed, and such other documents as may
reasonably be
required by the Exchange Agent, the holder of such shares of Enpath
Common Stock
shall be entitled to receive in exchange therefor the Merger
Consideration into
which the shares of Enpath Common Stock shall have been converted
pursuant to
Section 3.5.1 (less any withholding Taxes pursuant to Section
3.6.7), and any
Certificate so surrendered shall forthwith be marked as cancelled.
In the event
of a transfer of ownership of such Enpath Common Stock which is not
registered
in the transfer records of Enpath, payment may be made to a Person
other than
the Person in whose name the Certificate so surrendered is
registered, if such
Certificate shall be properly endorsed or otherwise be in proper
form for
transfer and the Person requesting such payment shall pay any
transfer or other
Taxes required by reason of the payment to a Person other than the
registered
holder of such Certificate or establish to the satisfaction of the
Surviving
Corporation that such Taxes have been paid or are not applicable.
Until
surrendered as contemplated by this Section 3.6.2, each Certificate
(other than
a Certificate representing shares of Enpath Common Stock that has
been cancelled
in accordance with Section 3.5.3) and any Book Entry Shares shall
be deemed at
any time after the Effective Time to represent only the right to
receive upon
such surrender the Merger Consideration, without interest, to be
paid in
consideration therefor upon surrender of such Certificate or
transfer of the
Book Entry Shares, as the case may be, pursuant to Section 3.5.1.
No interest
will be paid or will accrue on the Merger Consideration payable
upon the
surrender of any Certificate or transfer of Book Entry Shares.
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<PAGE>
3.6.3 At the Effective Time (a) all holders of Certificates and
Book
Entry Shares that were outstanding prior to the Effective Time
shall cease to
have any rights as shareholders of Enpath other than the right to
receive the
Merger Consideration and (b) the stock transfer books of Enpath
shall be closed
and there shall be no further registration of transfers on the
stock transfer
books of the Surviving Corporation of the shares of Enpath Common
Stock which
were outstanding immediately prior to the Effective Time. If, after
the
Effective Time, the Certificates (other than Certificates cancelled
in
accordance with Section 3.5.3) or Book Entry Shares are presented
to the
Surviving Corporation or the Exchange Agent for any reason, they
shall be
cancelled and exchanged as provided in this Article 3, except as
otherwise
provided by any Legal Requirement. The Merger Consideration paid
upon the
surrender of Certificates or transfer of Book Entry Shares in
accordance with
the terms of this Article 3 shall be deemed to have been paid in
full
satisfaction of all rights pertaining to the shares of Enpath
Common Stock
surrendered.
3.6.4 Any portion of the Exchange Fund which remains undistributed
to
the former shareholders of Enpath for six months after the
Effective Time shall
be delivered to the Surviving Corporation and any former
shareholders who have
not theretofore complied with this Article 3 shall thereafter look
only to the
Surviving Corporation and only as general creditors thereof for
payment of their
claim for the Merger Consideration. To the extent permitted by
applicable law,
all rights of any former holder of Enpath Common Stock to receive
the Merger
Consideration from the Surviving Corporation, to the extent the
Merger
Consideration remains unclaimed, terminate on the later of the date
on which the
Surviving Corporation is obligated to, and transfer payment to a
public official
pursuant to any applicable abandoned property, escheat or similar
Legal
Requirement.
3.6.5 None of Enpath, Merger Sub, Purchaser, the Surviving
Corporation
or the Exchange Agent, or any of their respective employees,
officers,
directors, shareholders, agents or affiliates, shall be liable to
any Person in
respect of any unclaimed Merger Consideration delivered to a public
official
pursuant to any applicable abandoned property, escheat or similar
Legal
Requirement.
3.6.6 The Exchange Agent shall invest any cash included in the
Exchange
Fund, as directed by the Surviving Corporation, on a daily basis.
Any interest
and other income resulting from such investments shall be paid to
the Surviving
Corporation. To the extent that there are losses with respect to
such
investments, or the Exchange Fund diminishes for other reasons
below the level
required to make prompt payments of the Merger Consideration as
contemplated
hereby, Purchaser and /or the Surviving Corporation shall promptly
replace or
restore the portion of the Exchange Fund lost through investments
or other
events so as to ensure that the Exchange Fund is, at all times,
maintained at a
level sufficient to make such payments. In the event this Agreement
is
terminated, the Exchange Fund, including any interest and other
income earned
thereon, shall be paid to Purchaser.
3.6.7 The Surviving Corporation and the Exchange Agent shall be
entitled to deduct and withhold from the Merger Consideration
otherwise payable
pursuant to this Agreement to any holder of shares of Enpath Common
Stock such
amounts as the Surviving Corporation is required to deduct and
withhold with
respect to the making of such payment under the Code, or any
provision of state,
local or foreign tax law. To the extent that amounts are so
deducted and
withheld by the Surviving Corporation and the Exchange Agent and
paid to the
applicable taxing authority when due, such withheld amounts shall
be treated for
all purposes of this Agreement as having been paid to the holder of
the shares
of Enpath Common Stock or Enpath Stock Option in respect of which
such deduction
and withholding was made by the Surviving Corporation.
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3.6.8 If any Certificate shall have been lost, stolen or
destroyed,
upon the making of an affidavit of that fact by the Person claiming
such
Certificate to be lost, stolen or destroyed and, if required by the
Surviving
Corporation, the posting by such Person of a bond in such
reasonable amount as
the Surviving Corporation may require as indemnity against any
claim that may be
made against it with respect to such Certificate, the Exchange
Agent will pay to
such Person in exchange for such lost, stolen or destroyed
Certificate the
Merger Consideration payable pursuant to this Agreement in respect
of the shares
of Enpath Common Stock represented by such Certificate (less any
withholding
Taxes pursuant to Section 3.6.7).
3.7 WARRANT; STOCK PLANS; RESTRICTED STOCK GRANTS
Enpath's Board of Directors (or, if appropriate, any committee
thereof
administering any of Enpath's stock option and equity incentive
plans listed in
Section 4.2 of the Disclosure Schedule, each as amended
(collectively, the
"Stock Plans")) shall adopt such resolutions or take such other
actions as may
be required to effect the following:
3.7.1
Prior to the Effective Time, Enpath shall take all actions
necessary to provide that, at the Effective Time,
(A) the Warrant and each then outstanding option granted under
any
Stock Plan, or granted other than pursuant to such Stock Plans
(collectively,
the "Options"), whether or not then exercisable or vested, shall
automatically
accelerate so that each outstanding Option shall, immediately prior
to the
Effective Time become fully vested and fully exercisable for all
the shares of
Enpath Common Stock at the time subject to such Option and may be
exercised by
the holder thereof for any and all of such shares as fully vested
shares of
Enpath Common Stock and to the extent not exercised immediately
prior to the
Effective Time, shall be cancelled in exchange for the right to
receive from the
Surviving Corporation an amount in cash in respect thereof equal to
the product
of (i) as applicable, the excess, if any, of the Merger
Consideration over the
per share purchase price of the Warrant or the per share exercise
price of such
Option, multiplied by (ii) the number of shares of Enpath Common
Stock subject
to the Warrant or such Option, and
(B) if any shares of Enpath Common Stock outstanding immediately
prior
to the Effective Time granted under any Stock Plan ("Restricted
Stock Grant") is
unvested or subject to a repurchase option or forfeiture in favor
of Enpath,
each then outstanding Restricted Stock Grant shall be cancelled in
exchange for
the right to receive from the Surviving Corporation an amount in
cash in respect
thereof equal to the Merger Consideration. All amounts payable
pursuant to this
Section 3.7.1 shall be subject to any required withholding of Taxes
and shall be
paid without interest.
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3.7.2 Except as provided herein or as otherwise agreed to by
the
parties, Enpath shall (a) cause the Stock Plans to terminate as of
the Effective
Time and cause the provisions in any other plan, program or
arrangement
providing for the issuance or grant by Enpath of any interest in
respect of the
capital stock of Enpath, including the Warrant, to terminate and
have no further
force or effect as of the Effective Time, and (b) ensure that
following the
Effective Time no holder of Options, the Warrant, Restricted Stock
Grants or
other awards or any participant in the Stock Plans or anyone other
than
Purchaser shall hold or have any right to acquire any equity
securities of
Enpath or the Surviving Corporation.
3.8 DISSENTING SHARES
Notwithstanding anything in this Agreement to the contrary, shares
of
Enpath Common Stock outstanding immediately prior to the Effective
Time and held
by a holder who has not voted in favor of the Merger and who has
delivered a
written demand for appraisal of such shares in accordance with
Section 302A.473
of the MBCA (the "Dissenting Shares") shall not be converted into
the right to
receive the Merger Consideration pursuant to Section 3.5.1, unless
and until
such holder fails to perfect or effectively withdraws or otherwise
loses such
holder's right to appraisal and payment under the MBCA. Such holder
shall be
entitled to receive payment of the appraised value of such shares
of Enpath
Common Stock in accordance with the provisions of the MBCA,
provided that such
holder complies with the provisions of Section 302A.473 of the
MBCA. If, after
the Effective Time, any such holder fails to perfect or effectively
withdraws or
otherwise loses such holder's right to appraisal, such Dissenting
Shares shall
thereupon be treated as if they had been converted as of the
Effective Time into
the right to receive the Merger Consideration, without interest
thereon. Enpath
shall give Purchaser and Merger Sub prompt notice of any demands
received by
Enpath for appraisal of shares of Enpath Common Stock, and, prior
to the
Effective Time, Purchaser and Merger Sub shall have the right to
participate in
all negotiations and proceedings with respect to such demands.
Prior to the
Effective Time, Enpath shall not, except with the prior written
consent of
Purchaser, make any payment with respect to, or settle or offer to
settle, any
such demands.
3.9 ADJUSTMENTS TO OUTSTANDING EQUITY INTERESTS
If during the period between the date of this Agreement and the
Effective Time, any change in the outstanding shares of capital
stock of Enpath
shall occur by reason of any stock split (including reverse stock
split), or any
stock dividend thereon with a record date during such period, the
Offer Price,
the Merger Consideration and any other amounts payable pursuant to
this
Agreement shall be appropriately adjusted.
3.10 THE CLOSING
The Merger and the transactions contemplated by this Agreement
(the
"Closing"), subject to and in accordance with all of the terms and
conditions
contained therein, shall be consummated at a closing to be held at
10:00 a.m.
New York City time, as soon as practicable (and in any event within
two Business
Days) following satisfaction of the conditions to consummation of
the Merger set
forth in Article 7 hereof (the "Closing Date"). In connection with
such Closing,
Merger Sub and Enpath shall execute Articles of Merger in the form
required by
and executed in accordance with the MBCA and Articles of Merger in
the form
required by and executed in accordance with the MBCA, and shall
cause to be
delivered and filed, as soon as practicable on the Closing Date,
the Articles of
Merger to the Minnesota Secretary of State in accordance with the
MBCA. The
Merger shall be effective at the time and on the date (the
"Effective Time") not
later than two Business Days after the Closing Date, specified in
such Articles
of Merger.
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ARTICLE 4
REPRESENTATIONS AND
WARRANTIES OF ENPATH
Except as set forth in the Enpath Disclosure Schedule, Enpath
hereby
represents and warrants to Purchaser and Merger Sub as follows:
4.1 ORGANIZATION AND QUALIFICATION
Enpath is a corporation duly organized, validly existing and in
good
standing under the laws of the jurisdiction in which it is
organized and has the
requisite corporate power and authority necessary to own, possess,
license,
operate or lease the properties that it purports to own, possess,
license,
operate or lease and to carry on its business as it is now being
conducted.
Enpath is duly qualified or licensed as a foreign corporation to do
business,
and is in good standing, in each jurisdiction where its business or
the
character of its properties owned, possessed, licensed, operated or
leased, or
the nature of its activities, makes such qualification necessary,
except for
such failure which, when taken together with all other such
failures, would not
constitute a Material Adverse Effect.
4.2 CAPITALIZATION
4.2.1 The authorized capital stock of Enpath consists of (i)
20,000,000
shares of Enpath Common Stock, and (ii) 1,000,000 shares of
undesignated
preferred stock. As of the date of this Agreement: (a) 6,361,727
shares of
Enpath Common Stock are issued and outstanding, of which 47,440
shares are
Restricted Stock Grants under Enpath's 1999 Incentive Plan; (b) no
shares of
preferred stock are issued and outstanding; (c) 10,000 shares of
Enpath Common
Stock are subject to the Warrant; (d) no shares of Enpath Common
Stock are
subject to issued and outstanding Options granted under Enpath's
1989 Incentive
Plan; (e) 7,500 shares of Enpath Common Stock are subject to issued
and
outstanding Options granted under Enpath's 1991 Non-Qualified Plan;
(f)
1,100,000 shares of Enpath Common Stock are reserved for issuance
under Enpath's
1999 Incentive Plan, of which 628,150 shares of Enpath Common Stock
are subject
to issued and outstanding Options granted under Enpath's 1999
Incentive Plan;
and (g) 400,000 shares of Enpath Common Stock are reserved for
issuance under
Enpath's 1999 Non-Employee Director and Medical Advisory Board
Plan, of which
148,500 are subject to issued and outstanding Options granted under
Enpath's
1999 Non-Employee Director and Medical Advisory Board Plan. Set
forth on Section
4.2 of the Disclosure Schedule is a correct and complete list of
each Stock
Plan, each Option, each Restricted Stock Grant, the Warrant, and
each other
equity award, including the holder, date of grant, exercise price,
if
applicable, vesting schedule and number of shares of Enpath Common
Stock subject
thereto. Other than the Warrant, all Options or other grants were
granted under
the Stock Plans and not under any other plan, program or agreement
(other than
any individual award agreements, forms of which have been made
available to
Parent). The shares of Enpath Common Stock issuable pursuant to the
Stock Plans
and the Warrant have been duly reserved for issuance by Enpath, and
upon any
issuance of such shares in accordance with the terms of the Stock
Plans or
Warrant, such shares will be duly authorized, validly issued, fully
paid and
non-assessable and free and clear from any preemptive or other
similar rights.
Since December 31, 2006, Enpath has not issued any shares of its
capital stock
or Rights in respect thereof, except for 95,000 Stock Options and
16,695 shares
subject to Restricted Stock Grants under the 1999 Incentive Plan
and 3,500 Stock
Options under the 1999 Non-Employee Director and Medical Advisory
Board Plan and
except upon the conversion of the securities or the exercise of the
Options
referred to above. The outstanding equity securities or other
securities of
Enpath were issued in compliance in all material respects with the
Securities
Act or any other applicable federal and state securities laws. All
outstanding
shares of Enpath Common Stock are duly authorized, validly issued,
fully paid
and non-assessable and free and clear from any preemptive or other
similar
rights.
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4.2.2 Except as disclosed in Section 4.2 of the Disclosure
Schedule,
there are (a) no other Rights, agreements, arrangements,
restrictions, or
commitments of any character obligating Enpath to issue, sell,
redeem,
repurchase, acquire or exchange any shares of capital stock of or
other equity
interests in Enpath or any securities convertible into or
exchangeable for any
capital stock or other equity interests, or any debt securities of
Enpath or to
provide funds to or make any investment (in the form of a loan,
capital
contribution or otherwise) and (b) no bonds, debentures, notes or
other
indebtedness having the right to vote (or convertible into, or
exchangeable for,
securities having the right to vote) on any matters on which
shareholders of
Enpath may vote (whether or not dependent on conversion or other
trigger event).
Except as disclosed in Section 4.2 of the Disclosure Schedule,
there are no
existing registration covenants with respect to Enpath Common Stock
or any other
securities of Enpath.
4.2.3 Enpath is not a party to, nor does it hold shares of
Enpath
Common Stock or other equity securities of Enpath bound by or
subject to, any
voting agreement, voting trust, proxy or similar arrangement. To
Enpath's
knowledge, no shareholder is a party to or holds shares of Enpath
Common Stock
or other equity securities of Enpath bound by or subject to any
voting
agreement, voting trust, proxy or similar arrangement.
4.3 NO SUBSIDIARIES
Enpath has no Subsidiaries and does not own, directly or
indirectly,
five percent (5%) or more of the outstanding capital stock or other
voting
securities of any corporation or other Person.
4.4 AUTHORITY
4.4.1 The execution, delivery and performance by Enpath of this
Agreement and the consummation by Enpath of the Merger and the
other
transactions contemplated hereby (the "Contemplated Transactions")
are within
Enpath's corporate authority and powers, and, except for obtaining
the Enpath
Shareholder Approval (as defined below), if required, have been
duly authorized
by all necessary corporate action on the part of Enpath. The
affirmative vote of
the holders of a majority of the outstanding shares of Enpath
Common Stock in
favor of the approval and adoption of this Agreement and the Merger
(the "Enpath
Shareholder Approval") is the only vote of the holders of any of
the Company's
capital stock necessary in connection with the consummation of the
Merger and
the other transactions contemplated by this Agreement. This
Agreement
constitutes a valid and binding agreement of the Company
enforceable against
Enpath in accordance with its terms, except as such enforceability
may be
limited by bankruptcy, insolvency, moratorium and other similar
applicable Legal
Requirements affecting creditors rights generally and by general
principles of
equity.
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4.5 NO CONFLICT; GOVERNMENTAL AUTHORIZATION; REQUIRED FILINGS
AND
CONSENTS
4.5.1 Except as set forth in Section 4.5.1 of Enpath Disclosure
Schedule, neither the execution and delivery of this Agreement nor
the
consummation of any of the Contemplated Transactions do, or will,
directly or
indirectly (with or without notice or lapse of time or both), (a)
contravene,
violate or conflict with the Articles of Incorporation or By-Laws
of Enpath, (b)
result in any breach of or constitute a default (or an event which
with notice
or lapse of time or both would become a default) under, or
terminate or cancel
or give to others any rights of termination, acceleration or
cancellation of
(with or without notice or lapse of time or both), or result in the
creation of
a lien, security interest, pledge, claim, charge or encumbrance of
any nature
whatsoever ("Lien"), except for Permitted Liens, on any of the
properties or
assets of Enpath pursuant to, any of the terms, conditions or
provisions of any
Material Contract except for breaches, defaults or violations that
would not
reasonably be expected to have a Material Adverse Effect.
4.5.2 The execution and delivery of this Agreement by Enpath does
not,
and the performance of this Agreement and the consummation of the
Contemplated
Transactions by Enpath will not, require any consent of or filing
with or
notification to, any Governmental Entity, except (a) for applicable
requirements
of the Exchange Act, including the filing of the Proxy Statement
(as defined in
Section 4.7.9), the Securities Act, State securities laws or "blue
sky laws,"
(b) the pre-merger notification requirements of the HSR Act and the
expiration
or termination of any applicable waiting period thereunder, (c)
registration of
the Offer pursuant to Section 80B.03 of the Minnesota Statutes, and
(d) the
filing of the Articles of Merger under the MBCA, except where such
failure would
not reasonably be expected to have a Material Adverse Effect.
4.6 COMPLIANCE WITH LAW
4.6.1 To the knowledge of Enpath and except as set forth in Section
4.6
of the Disclosure Schedule, Enpath has been, and is now being,
operated in
compliance with applicable Legal Requirements for any instances
of
non-compliance which could not reasonably be expected to have,
individually or
in the aggregate, a Material Adverse Effect on Enpath. This Section
4.6.1 does
not apply to environmental or pollution-related Legal Requirements
or matters,
it being the intent and agreement of the Parties that such matters
be
exclusively the subject of Section 4.14.
4.6.2 Without limiting the provisions of Sections 4.5.2 above,
Enpath
has complied in all material respects with all requirements
pursuant to the
Federal Food Drug and Cosmetic Act, regulations promulgated
thereunder by the
U.S. Food and Drug Administration ("FDA"), and all Legal
Requirements
administered or issued by any other Governmental Entity having
regulatory
authority over products developed, tested, manufactured,
distributed or sold by
Enpath in the United States, including without limitation
applicable FDA,
premarket approval and premarket notification requirements. All
required
notifications and applications have been filed with the FDA and any
other such
Governmental Entity and have been cleared or approved, as
applicable, by the FDA
and each such Governmental Entity, for any products tested,
distributed or sold
by Enpath. Except as set forth in Section 4.6 of the Disclosure
Schedule, no
Governmental Entity having regulatory authority over Enpath's
products has
issued any notice, warning letter or other similar communication to
Enpath
stating that it is in violation of any Legal Requirements. Except
as set forth
in Section 4.6 of the Disclosure Schedule, none of Enpath's
products have been
recalled, whether voluntary or otherwise, or are or have been
subject to device
removal or correction reporting requirements, and Enpath has not
received
notice, either completed or pending or to Enpath's knowledge, of
any proceeding
seeking a recall, removal, or corrective action of any products. To
Enpath's
knowledge, no employees or agents of Enpath have made an untrue
statement of
material fact to any Governmental Entity with respect to any
product tested,
manufactured, distributed, or sold by Enpath, or failed to disclose
a material
fact required to be disclosed to any Governmental Entity. Except as
set forth in
Section 4.6 of the Disclosure Schedule, there has been and is no
pending or, to
Enpath's knowledge, threatened or anticipated FDA or other
Government Entity
proceeding, investigation, review, or inquiry relating to Enpath's
development,
testing, manufacture distribution, or sale of its products.
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4.7 SEC FILINGS; FINANCIAL STATEMENTS
4.7.1 Except as set forth in Section 4.7.1 of the Disclosure
Schedule,
Enpath has timely filed or otherwise furnished all forms, reports,
registration
statements, schedules, all certifications and statements required
by Rules
13a-14 and 15d-14 under the Exchange Act and Sections 302 and 906
of the
Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley"), and the rules and
regulations
promulgated thereunder, and other documents required to be filed by
it with the
SEC since January 1, 2004 (the "SEC Reports").
To Enpath's knowledge, except as disclosed in the SEC Reports or
Section 4.7.1
of the Disclosure Schedule, each director and officer (as defined
in Rule
16a-1(f) of the Exchange Act) of Enpath has filed with the SEC on a
timely basis
all statements required by Section 16(a) of the Exchange Act and
the rules and
regulations thereunder since the beginning of January 1, 2004.
As used in this Section 4.7.1, the term "file" or "filed" shall be
broadly
construed to include any manner in which a document or information
is furnished,
transmitted or otherwise made available to the SEC. Each of
Enpath's SEC
Reports:
(i) complied in all material respects, as of its respective date
of
filing with the SEC, with the requirements of the Securities Act,
and the
Exchange Act, as the case may be, and, to the extent then
applicable,
Sarbanes-Oxley, including in each case, the rules and regulations
promulgated
thereunder, and
(ii) did not at the time its were filed and on the date it was
amended
and supplemented, if applicable, contain any untrue statement of a
material fact
or omit to state a material fact required to be stated therein or
necessary in
order to make the statements therein, in light of the circumstances
under which
they were made, not misleading.
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4.7.2 The financial statements contained in the SEC Reports
complied as
to form in all material respects, as of their respective dates of
filing with
the SEC, with applicable accounting requirements and the published
rules and
regulations of the SEC with respect thereto have been prepared in
accordance
with GAAP (except, in the case of unaudited financial statements,
subject to
normal year-end adjustments consistent with GAAP), and fairly
present, in all
material respects, the financial condition of Enpath as of the
respective dates
indicated and the statements of operations, cash flows and changes
in
shareholders'
