Exhibit 10.18
Letter Agreement
This letter agreement is entered into as of this 15th day of March 2005 among
Enpath Medical, Inc., a Minnesota corporation formerly known as Medamicus, Inc.
("Enpath"), BIOMEC Inc., an Ohio corporation ("BIOMEC") and BIOMEC Technology
Inc., a Minnesota corporation formerly known as BIOMEC Cardiovascular Inc.
("Subsidiary") to document the agreement and understanding of the parties.
Enpath, BIOMEC and Subsidiary agree as follows:
1.
IN A LETTER AGREEMENT DATED
FEBRUARY 26, 2004 ("FEBRUARY 26 AGREEMENT"), ENPATH AND BIOMEC AGREE TO AMEND
THE ASSET PURCHASE AGREEMENT DATED JULY 21, 2003 TO SET A VALUE FOR THE SHARES
OF COMMON STOCK OF ENPATH TO BE DELIVERED TO BIOMEC UNDER THE 2004 CONTINGENT
PAYMENT EQUAL TO A BASE PRICE OF $13.62, WITH THE PRICE TO BE NO HIGHER THAN
$15.63 PER SHARE AND NO LOWER THAN $11.56 PER SHARE.
2.
IN THE FEBRUARY 26 AGREEMENT, BIOMEC
AND ENPATH ALSO AGREED THAT THAT 20 PERCENT OF THE VALUE OF THE 2004 CONTINGENT
PAYMENT WOULD BE MADE IN CASH, AND 80 PERCENT OF THE VALUE WOULD BE MADE IN
ENPATH COMMON STOCK AS COMPUTED ABOVE.
3.
IN THE FEBRUARY 26 AGREEMENT, ENPATH
ALSO AGREE THAT BIOMEC WOULD BE ALLOWED TO DISTRIBUTE TO ITS SHAREHOLDERS
1,066,901 SHARES OF ENPATH COMMON STOCK IMMEDIATELY AFTER MARCH 31, 2004, RATHER
THAN ONLY DISTRIBUTE 500,000 SHARES AS ALLOWED UNDER THE AGREEMENT, AND BIOMEC
DISTRIBUTED SUBSTANTIALLY ALL THE 1,066,901 SHARES TO ITS SHAREHOLDERS IN
APRIL 2004.
4.
IN THE FEBRUARY 26 AGREEMENT, ENPATH
AGREED THAT IT WOULD CONTINUE TO NOMINATE AND SOLICIT PROXIES FOR RE-ELECTION OF
THE CHAIRMAN OF BIOMEC UNTIL THE LATER OF (A) THE DATE ON WHICH THE 2004
CONTINGENT PAYMENT IS PAID (OR, IF NO 2004 CONTINGENT PAYMENT IS DUE, MARCH 31,
2005) OR (B) SUCH TIME AS BIOMEC AND ITS AFFILIATES HELD LESS THAN 5% IN THE
AGGREGATE OF THE OUTSTANDING VOTING POWER OF ENPATH.
5.
BIOMEC ADVISED ENPATH THAT ACTION #1
AND #2 WOULD REQUIRE APPROVAL BY BIOMEC SHAREHOLDERS AND BIOMEC RECEIVED
SHAREHOLDER APPROVAL IN APRIL 2004 AND, AS A RESULT THE PRICE AND PAYMENT
PROVISONS OF THE FEBRUARY 26 AGREEMENT AND THIS LETTER ARE IN EFFECT.
6.
ENPATH AND BIOMEC TOGETHER WITH
SUBSIDIARY SUBSEQUENTLY ENTERED INTO AMENDMENT NO.1 SUBSTANTIALLY IN THE FORM
APPROVED BY SHAREHOLDERS OF BIOMEC, WHICH MEMORIALIZED CHANGES TO SECTION 2.4,
SECTION 2.5.3 AND SECTION 7.6 OF THE AGREEMENT.
7.
THE FEBRUARY 26 AGREEMENT AND THE
AMENDMENT TO SECTION 7.6 OF THE AGREEMENT STATED THAT ENPATH AND BIOMEC WOULD
COOPERATE AND NEGOTIATE IN GOOD FAITH WITH RESPECT TO THE DESIGNATION OF THE
AFFILIATES OF BIOMEC AND THE PROCESS FOR DETERMINING THE OWNERSHIP INTERESTS OF
SUCH AFFILIATES.
8.
ENPATH AND BIOMEC HEREBY AGREE, THAT IN
ORDER TO ENABLE ENPATH TO PREPARE AND MAIL ITS PROXY STATEMENTS IN A TIMELY
MANNER AND INCLUDE THE CHAIR OF BIOMEC (OR SUCH OTHER PERSON AS ENPATH AND
BIOMEC MAY MUTUALLY AGREE) AS A DIRECTOR, ON OR PRIOR TO MARCH 15, 2005 AND ON
OR PRIOR TO FEBRUARY 1 OF EACH SUBSEQUENT YEAR IN