REVISED AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
REVISED AMENDMENT No. 1, dated as of March 28, 1997 (this "Amendment"), to
that certain AGREEMENT AND PLAN OF MERGER, dated as of October 23, 1996 (the
"Agreement"), among VENTRITEX, INC., a Delaware corporation (the "Company"), ST.
JUDE MEDICAL, INC., a Minnesota corporation ("Parent"), and PACESETTER, INC., a
Delaware corporation and a direct wholly-owned subsidiary of Parent
("Acquisition").
WHEREAS, the Boards of Directors of the Company, Parent and Acquisition
each have previously approved the Merger (as defined in Section 1.1 of the
Agreement);
WHEREAS, pursuant to Section 6.4 of the Agreement, the Boards of Directors
of the Company, Parent and Acquisition determined to amend certain terms of
the Merger and provisions of the Agreement as set forth in Amendment No. 1
thereto, dated as of March 28, 1997 ("Amendment No. 1"); and
WHEREAS, the Boards of Directors of the Company, Parent and Acquisition
desire to revise and restate Amendment No. 1 to read in its entirety as set
forth below.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the Company, Parent and Acquisition hereby agree as
follows:
1. Defined Terms. All capitalized terms used and not otherwise defined in
this Amendment shall have the meanings ascribed thereto in the Agreement.
2. Modification of Exchange Ratio. a. The first sentence of subsection
(a) of Section 1.8 of the Agreement hereby is amended and restated in its
entirety to read as follows:
At the Effective Time, each share of common stock, par value $0.001
per share, of the Company ("Company Common Stock") issued and
outstanding immediately prior to the Effective Time (individually a
"Share" and collectively, the Shares") (other than Shares held by
Parent, Acquisition or any other subsidiary of Parent) shall, by
virtue of the Merger and without any action on the part of
Acquisition, the Company or the holder thereof, be converted into and
shall become exchangeable for 0.5 of a fully paid and nonassessable
share of common stock, par value $0.10 per share, of Parent ("Parent
Common Stock") (the "Exchange Ratio").
b. Clause (ii) of Section 5.2(g) of the Agreement hereby is amended
and restated in its entirety as follows:
(ii) the holder of each Convertible Note outstanding immediately
following the Merger thereafter shall have the right to convert such
Convertible Note into Parent Common Stock at the rate of 29.0909
shares of Parent Common Stock for each $1,000 principal amount of the
Convertible Notes, and
3. Deletion of Certain Representations and Warranties of the Company. The
representations and warranties made by the Company in the following Sections of
the Agreement hereby are deleted retroactive to the date of the Agreement: 2.4;
2.7; 2.8; 2.9; 2.10; 2.11; 2.12; 2.13 (a) - (d) and (f) - (l); 2.14; 2.18; and
2.19. The deletion of such Sections shall not affect the numbering of any other
Section of the Agreement.
4. Additional Representation and Warranty by Parent and Acquisition. The
Agreement hereby is amended by the addition of the following new Section 3.18:
"3.18. Representations and Warranties True as of March 28, 1997.
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To the knowledge of Parent, as of March 28, 1997, all of the
representations and warranties of Parent and Acquisition set forth in
this Agreement are true and correct in all material respects and to
the knowledge of Parent there has not occurred any breach of any such
representation or warranty in any material respect."
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5. Modification of Parent Disclosure Schedule. Section 3.9 of the Parent
Disclosure Schedule hereby is modified by the addition of the information set
forth in Schedule 3.9 attached hereto.
6. Modification of Section 4.1. a. The language contained in the
parentheticals appearing in the third and fourth lines of Section
4.1(a)(vii) of the Agreement hereby is amended and restated in its entirety as
follows:
(except for grants, in amounts consistent with past practice,
made to employees prior to March 28, 1997, and except for
new-hire grants, in amounts consistent with past practice, made
to newly hired employees to whom offers of employment were made
prior to March 28, 1997, as set forth in Section 4.1 of the
Company Disclosure Schedule).
b. Clause (B) of Section 4.1(a)(xi) of the Agreement hereby is
amended and restated in its entirety to read as follows:
(B) enter into any contract or agreement, other than in the ordinary
course of business, or amend in any material respect any of the
Contracts.
c. Section 4.l(a) (xiii) is hereby amended to add at the end thereof
the following:
; provided, however, that notwithstanding the foregoing, the
Company may, without the prior written consent of Parent, pay,
discharge, satisfy or settle claims or potential claims, related
to or arising out of crystal hermeticicity failures in certain
implanted Cadence V-110 devices, for which insurance carriers
have acknowledged coverage or for which the Company's
out-of-pocket expenditures do not exceed, in the aggregate, the
reserve previously established in the Company's financial
statements in respect of such matters and may provide
reprogramming services and/or replacement devices to any existing
users of Cadence V-110 devices consistent with the Company's
policies as publicly announced prior to the date of this
Amendment.
7. Modification of Section 4.2. The second sentence of Section 4.2 hereby
is amended and restated in its entirety to read as follows:
Parent will, as promptly as practicable, but in all events not later
than April 4, 1997, prepare and file with the SEC the S-4, containing
a proxy statement/prospectus and form of proxy, for the registration
under the Securities Act of the shares of Parent Common Stock issuable
in the Merger.
8. Modification of Section 4.3. a. The first sentence of Section 4.3(a)
of the Agreement hereby is amended by deleting clause (ii) appearing in the
proviso such that the proviso reads in its entirety as follows:
; provided, however, that nothing in this Agreement shall prohibit the
Company Board from complying with Rule 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal.
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b. Section 4.3(b) of the Agreement hereby is amended to read in its
entirety as follows:
b. The Company Board shall not (i) approve or recommend, or
propose to approve or recommend, any Acquisition Proposal or (ii) cause the
Company to enter into any agreement with respect to any Acquisition
Proposal.
9. Modification of Section 4.8. Section 4.8 of the Agreement hereby is
amended to add at the end thereof the following:
Parent has entered into a cross-license agreement with Angeion
Corporation ("Angeion") in the form of the cross-license agreement
furnished on March 28, 1997 by counsel to Parent to counsel to the
Company. FTC staff has informed Parent that this cross-license
agreement eliminates the competitive concerns raised by the trans-
action. Both Parent and the Company understand that the Commissioners
of the FTC have the sole authority to close the investigation of the
Merger.
10. Modification of Closing Conditions. a. Subsection (g) of Section 5.1
of the Agreement hereby is deleted.
b. Subsections (d) and (f) of Section 5.3 of the Agreement hereby are
deleted.
11. Modification of Termination Provisions. a. The date "May 1, 1997" set
forth in subsections (b), (c) and (d) of Section 6.1 of the Agreement hereby is
deleted and replaced with the date "June 30, 1997."
b. Subsection (c) of Section 6.1 hereby is amended by deleting clause
(iii) thereof in its entirety, by adding the word "or" immediately before the
number "(ii)" and by adding a period after the word "thereof" appearing at the
end of clause (ii) of such subsection.
c. The words ", or the Company shall have entered into a definitive
agreement relating to a Superior Proposal" appearing at the end of subsection
(d) of Section 6.1 hereby are deleted and a period shall be placed after the
word "foregoing" immediately preceding such deleted words.
d. The reference to "Section 4.6(c)" set forth in Section 6.2 of the
Agreement hereby is deleted and replaced with the reference "Section 4.6(d)".
e. References to Section 6. l(c)(iii) appearing in Section 6.3 of the
Agreement hereby are deleted.
f. The Agreement hereby is amended by adding the following as Section
6.3(d) of the Agreement.
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"(d) If the Merger is not consummated by reason of (i) the
termination of this Agreement pursuant to Section 6.1(c)(i) or
a failure of the condition set forth in Section 5.2(a) to be
satisfied (in either case due to a breach of a representation and
warranty in a material respect of Parent or Acquisition set forth
in Sections 3.4, 3.7, 3.8, 3.9, 3. 10, 3.12 or 3.13 or any of the
foregoing representations and warranties of Parent or Acquisition
having become untrue in a material respect) or (ii) a failure of
the condition set forth in Section 5.2(f) to be satisfied, then
the Company shall pay Parent the amount of Seven Million Two
Hundred Fifty Thousand Dollars ($7,250,000) (and not as a
penalty). Any amount due and owing pursuant to this Section
6.3(d) shall be made, in the case of the termination of this
Agreement pursuant to Section 6. l(c)(i), on the date of such
termination and, in the case of the nonconsummation of the Merger
by reason of a failure of the conditions set forth in either
Section 5.2(a) or Section 5.2(f) to be satisfied, on the date the
Company notifies Parent of such failure. Any payments made by the
Company to Parent pursuant to this Section 6.3(d) shall be in
full satisfaction and settlement of any claims that Parent
otherwise might have against the Company in respect of the
failure of the Merger to be consummated."
12. Definitions. The following new Section 7.12 hereby is added to the
Agreement:
SECTION 7.12. Certain Defined Terms. As used in this Agreement,
the capitalized terms set forth below shall have the following
meanings:
"Company SEC Reports" means all reports, proxy statements and
registration statements filed by the Company with the SEC since
January 1, 1995.
"Contracts" means all agreements and contracts to which the
Company or any of its Subsidiaries is a party that are required to be
filed as an exhibit to an Annual Report on Form 10-K filed by the
Company with the SEC as of the date of this Agreement.
"Employee Benefit Plans" means the plans and other agreements,
arrangements or practices listed on Section 2.1l(a) of the Company
Disclosure Schedule.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means U.S. generally accepted accounting principles.
"knowledge of the Company" means the actual knowledge of any
executive officer or member of the Company Board as listed in Section
2.8 of the Company Disclosure Schedule.
"knowledge of the Parent" means the actual knowledge of any
executive officer or member of the Board of Directors of the Parent as
listed in Section 3.8 of the Parent Disclosure Schedule.
"Parent SEC Reports" means all reports, proxy statements and
registration statements filed by the Parent with the SEC since January
1, 1995.
"SEC" means the U.S. Securities and Exchange Commission.
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"Telectronics Agreements" means that certain Asset Purchase
Agreement (United States) dated as of September 24, 1996, among O
Acquisition, Inc., Telectronics Pacing Systems, Inc. and TPLC, Inc.,
the International Purchase Agreements referred to in such Asset
Purchase Agreement (United States), the other agreements to be
executed pursuant to such Asset Purchase Agreement (United States) and
International Purchase Agreements and all amendments to the foregoing.
13. Certain Representations and Warranties by the Company. The Company
hereby represents and warrants to each of Parent and Acquisition as follows:
a. The Company has all necessary corporate power and authority to
execute and deliver this Amendment and to consummate the transactions
contemplated by the Agreement as amended hereby (the "Amended Agreement"). The
execution and delivery of this Amendment and the consummation of the
transactions contemplated by the Amended Agreement have been duly and validly
authorized by the Company Board and no other corporate proceedings on the part
of the Company are necessary to authorize this Amendment or to consummate the
transactions contemplated by the Amended Agreement (other than, with respect to
the Merger, the approval and adoption of the Amended Agreement by the holders of
a majority of the then outstanding shares of Company Common Stock). This
Amendment has been duly and validly executed and delivered by the Company and
constitutes a valid, legal and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to the Bankruptcy and
Equity Exception.
b. The Company Board has, by unanimous vote of those present, duly and
validly approved, and taken all corporate actions required to be taken by the
Company Board for the consummation of, the transactions, including the Merger,
contemplated by the Amended Agreement and resolved to recommend that the
stockholders of the Company approve and adopt the Amended Agreement.
c. The Financial Advisor has delivered to the Company Board its
opinion to the effect that, as of the date of this Amendment, the Exchange Ratio
(as modified by this Amendment) is fair to the holders of Shares, and such
opinion has not been withdrawn.
d. The Company has made available to Parent all material information
requested by Parent and within the knowledge of the Company as of the date
hereof relating to each of the recent crystal hermeticicity failures in certain
implanted Cadence Model V-110 devices. As of the date hereof, the Company has
provided the FDA with all material information, within the knowledge of the
Company as of the date hereof, required to be provided, and has filed with the
FDA all material notices and filings which to the knowledge of the Company as of
the date hereof are required to be filed, in connection with such crystal
hermeticicity failures. To the knowledge of the Company as of the date hereof,
all such information, notices and filings are true, complete and accurate in all
material respects. The notification and reprogramming procedure undertaken by
the Company in response to such crystal hermeticicity failures has been
authorized by the FDA and, to the knowledge of the Company as of the date
hereof, the Company has no basis to believe that such reprogramming will not
prevent the delivery of inappropriately rapid pacing pulses by the Cadence Model
V-110. To the knowledge of the Company as of the date hereof, the Company has no
basis to believe that such reprogramming (which is intended to disable the
antitachycardia pacing function of the devices), in and of itself, will result
in any malfunctions causing harm to a patient. The Company has furnished to
Parent true and complete copies of all material correspondence and other written
information between the Company and the FDA prior to the date hereof with
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respect to the recent crystal hermeticicity failures. To the knowledge of the
Company as of the date hereof, the Company has no basis to believe that a
crystal hermeticicity failure similar to the recent crystal hermeticicity
failures in certain implanted Cadence Model V-110 devices would result in the
delivery of inappropriately rapid pacing pulses in any other devices
manufactured by the Company other than the Cadence Model V-112.
To the knowledge of the Company as of the date hereof, except for the
crystal hermeticicity failures described above, all devices presently being
manufactured and marketed by the Company comply in all respects with applicable
requirements of the U.S. Food and Drug Act, except for such failures to comply
as would not have a Company Material Adverse Effect.
Except as have been provided to Parent prior to the date hereof, to the
knowledge of the Company as of the date hereof, from October 23, 1996 to the
date hereof, there have been no written statements, citations, warning letters,
FDA Forms 483, or decisions issued by any Governmental Entity stating that any
device produced, manufactured, marketed or distributed at any time by the
Company or any of its subsidiaries is defective or fails to satisfy in any
material respect any applicable standards promulgated by any such Governmental
Entity. Except as have been provided to Parent prior to the date hereof, to the
knowledge of the Company as of the date hereof, there is no proceeding by the
FDA or any other Governmental Entity, including, but not limited to, a grand
jury investigation, a 405 hearing or a civil proceeding, pending or threatened
as of the date hereof against the Company or any of its subsidiaries.
14. Certain Representations and Warranties by Parent and Acquisition.
Parent and Acquisition hereby represent and warrant to the Company that each of
Parent and Acquisition has all necessary corporate power and authority to
execute and deliver this Amendment and to consummate the transactions
contemplated by the Amended Agreement. The execution and delivery of this
Amendment and the consummation of the transactions contemplated by the Amended
Agreement have been duly and validly authorized by the boards of directors of
Parent and Acquisition and by Parent as the sole stockholder of Acquisition, and
no other corporate proceedings on the part of Parent or Acquisition are
necessary to authorize this Amendment or to consummate the transactions
contemplated by the Amended Agreement. This Amendment has been duly and validly
executed and delivered by each of Parent and Acquisition and constitutes a
valid, legal and binding agreement of each of Parent and Acquisition,
enforceable against each of Parent and Acquisition in accordance with its terms,
subject to the Bankruptcy and Equity Exception.
15. Effect of Amendment. As amended hereby, the Agreement shall remain and
continue in full force and effect pursuant to its terms, and the Company, Parent
and Acquisition hereby confirm all of the terms of the Amended Agreement.
References in the Agreement to representations and warranties, covenants and
other provisions shall be deemed to reflect the modifications, deletions and
additions made by this Amendment (including, without limitation, the
representations and warranties set forth in paragraphs 12 and 13 above, which
are deemed to be added to the Agreement).
16. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of law thereof.
15. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same instrument.
[signature page follows]
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IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
duly executed on its behalf by the undersigned, thereunto duly authorized, as of
the day and year first above written.
ST. JUDE MEDICAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. Matricaria
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Name: ▇▇▇▇▇▇ ▇. Matricaria
Title: Chairman/CEO/President
PACESETTER, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Treasurer
VENTRITEX, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and General Counsel
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