AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF REORGANIZATION
Amendment No. 1 dated as of August 1, 1995 (this "Amendment") to the
Agreement and Plan of Reorganization dated as of April 21, 1995 (the "Merger
Agreement") between Alamar Biosciences, Inc., a California corporation
("Alamar"), and AccuMed, Inc., an Illinois corporation doing business as AccuMed
International, Inc. ("AccuMed").
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth herein and for other good and valuable consideration, the adequacy,
sufficiency and receipt of which are hereby acknowledged, and intending to be
legally bound, in accordance with Section 9.4 of the Merger Agreement, the
parties agree as follows:
1. Section 1.6 of the Merger Agreement is hereby deleted and the following
is inserted in lieu thereof:
"1.6 Effect on Capital Stock and Warrants. At the Effective Time, by virtue
of the Merger and without any action on the part of AccuMed or the holders
of any of the following securities:
(a) Conversion of AccuMed Capital Stock and Warrants. Each share of
Common Stock, no par value, of AccuMed (the "AccuMed Capital Stock") and
each Warrant to purchase a share of AccuMed Capital Stock (the "AccuMed
Warrants") issued and outstanding immediately prior to the Effective Time
will be cancelled and extinguished and will be converted automatically into
the right to receive, in the case of AccuMed Capital Stock, or the right to
purchase, in the case of AccuMed Warrants, the former holder's pro rata
portion of 5,750,000 shares of Common Stock, no par value, of Alamar (the
"Alamar Common Stock"). Each share of AccuMed Capital Stock shall be
cancelled and converted as set forth in this Section 1.6(a) upon surrender
of the certificate representing such share of AccuMed Capital Stock in the
manner provided in Section 1.7 (or in the case of a lost, stolen or
destroyed certificate, upon delivery of an affidavit (and bond, if
required) in the manner provide in Section 1.9). Each AccuMed Warrant shall
be cancelled and converted into a warrant to purchase the holder's pro rata
portion of the Alamar Common Stock (an "Alamar Warrant") as set forth in
Section 1.13 upon surrender of the warrant certificate representing such
AccuMed Warrant.
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(b) Adjustments to exchange Ratio. The number of shares of Alamar
Common Stock and Alamar Warrants into which each share of AccuMed Common
Stock and each AccuMed Warrant, respectively, shall convert pursuant to
this Article I shall be adjusted to reflect fully the effect of any split,
reverse stock split, stock dividend (including any dividend or distribution
of securities convertible into Alamar Common Stock), reorganization,
recapitalization or other like change with respect to Alamar Common Stock
or AccuMed Capital Stock occurring after the date hereof and prior to the
Effective Time, except for the issuance of any shares of Alamar Common
Stock pursuant to the S Private Placement and/or the D private Placement.
(c) Fractional Shares. No fraction of a share of Alamar Common Stock
will be issued by virtue of the Merger; in lieu thereof each AccuMed
Shareholder who would otherwise be entitled receive to a fraction of a
share of Alamar Common Stock (after aggregating all fractional shares of
Alamar Common Stock to be received by such holder) shall receive one
additional share of Alamar Common Stock if such fraction is one-half or
more and no additional share of Alamar Common Stock if such fraction is
less than one-half. Likewise, Alamar Warrants will be issued for the
purchase of whole shares only and not for any fraction of a share of Alamar
Common Stock; each holder of an AccuMed Warrant who would otherwise be
entitled to receive an Alamar Warrant for the purchase of a fraction of a
share of Alamar Common Stock (after aggregating all fractional shares of
Alamar Common Stock such holder would be entitled to purchase pursuant to
the Alamar Warrants to be received by such holder) shall receive a Warrant
to purchase one additional share of Alamar Common Stock if such fraction is
one-half or more and no additional share of Alamar Common Stock if such
fraction is less than one-half.
2. A new Section 1.13 is hereby added to the Merger Agreement to read in
its entirety as follows:
1.13 Exchanqe of AccuMed Warrants.
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(a) Alamar to Provide Alamar Warrants. Promptly after the Effective
Time, Alamar shall make available to each former AccuMed Warrant holder for
exchange in accordance with this Article I, through such reasonable
procedures as Alamar may adopt, the Alamar Warrants issuable pursuant to
Section 1.6 in exchange for outstanding AccuMed Warrants.
(b) Exchange Procedures. Promptly after the Effective Time, Alamar
shall cause to be mailed to each holder of record of a warrant certificate
(a "Warrant Certificate") which immediately prior to the Effective Time
represented outstanding AccuMed Warrants which were converted into Alamar
Warrants pursuant to Section 1.6(a) (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title
to the Warrant Certificates shall pass, only upon delivery of the Warrant
Certificates to Alamar and shall be in such form and have such provisions
as Alamar may reasonably specify) and (ii) instructions for use in
effecting the surrender of a Warrant Certificate in exchange for a
certificate representing an Alamar Warrant. Upon surrender of a Warrant
Certificate for cancellation to Alamar together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, the former holder of such Warrant Certificate shall
be entitled to receive in exchange therefor a certificate representing the
Alamar Warrants which such holder has the right to receive pursuant to
Section 1.6(a).
(c) Provisions of Alamar Warrants. Each Alamar Warrant certificate
shall be of like tenor to the cancelled AccuMed Warrant for which the
Alamar Warrant is exchanged, except as provided in this Section 1.13 and
shall specify (i) the number of shares of Alamar Common Stock underlying
the Alamar Warrant determined in accordance with Section 1.6 which the
holder is or may become entitled to purchase (in accordance with Sections
1.13(d), (e) and (f) ), (ii) the purchase price or prices per each such
share (which shall be based on the purchase price or prices set forth in
the exchanged AccuMed
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Warrant and adjusted as appropriate to correspond to the adjustment in the
number of shares of Alamar Common Stock underlying the Alamar Warrant),
(iii) that 65.2% of such shares are "Vested Alamar Warrant Shares", (iv)
17.4% of such shares are "First Year Performance Warrant Shares" and (v)
17.45% of such shares are "Second Year Performance Warrant Shares".
(d) Vested Alamar Warrant Shares. Each Alamar Warrant shall be
immediately exercisable with respect to the Vested Alamar Warrant Shares.
(e) First Year Performance Warrant Shares. If the Surviving
Corporation achieves the First Year Performance Targets (as defined in
Section 3.1), the right to purchase the First Year Performance Warrant
Shares shall become vested on the date on which the Surviving Corporation
shall have determined that the First Year Performance Targets have been
achieved, in accordance with Section 3.4 such date shall be as soon as
practicable after the end of the First Year Performance Period (as defined
in Section 3.1).
(e) Second Year Performance Warrant Shares. If the Surviving
Corporation achieves the Second Year Performance Targets (as defined in
Section 3.2), the right to purchase the Second Year Performance Warrant
Shares shall become vested on the date on which the Surviving Corporation
shall have determined that the First Year Performance Targets have been
achieved, in accordance with Section 3.4 such date shall be as soon as
practicable after the end of the Second Year Performance Period (as defined
in Section 3.2).
(f) Earn-Back Provisions. If the Surviving Corporation fails to
achieve the First Year Performance Targets but does achieve the Earn-Back
Targets (as defined in Section 3.3) for the Second Year Performance Period,
the right to purchase the First Year Performance Warrant Shares shall
become vested on the date on which the Surviving Corporation shall have
determined that the
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Earn-Back Targets have been achieved, such date shall be as soon as
practicable following the end of the Second Year Performance Period.
(g) Failure to Achieve Performance Targets, Earn-Back Targets. If the
Surviving Corporation fails to achieve the First Year Performance Targets
and the Earn-Back Targets, the right to purchase the First Year Performance
Warrant Shares shall at no time become vested. If the Surviving Corporation
fails to achieve the Second Year Performance Targets, the right to purchase
the Second Year Performance Warrant Shares shall at no time become vested.
If the Surviving Corporation shall determine that the right to acquire the
First Year Performance Warrant Shares and/or the Second Year Performance
Warrant Shares shall at no time become vested, the Surviving Corporation
may, in its discretion, issue a new warrant in exchange for an outstanding
Alamar Warrant; any such new warrant shall be of like tenor but shall not
include such First Year Performance Warrant Shares and/or Second Year
Performance Warrant Shares, as the case may be.
3. Section 7.17(c) of the Merger Agreement is hereby deleted and the
following is inserted in lieu thereof:
(c) During the Interim Period, the Interim Board shall take all
actions necessary to create an "Expenses Committee". During the Interim
Period the Expenses Committee shall consist of Xxxx Xxxxxxxx, Xxxxxxx
Xxxxxx and Xxxxxxx Xxxxxxxx. From and after the Effective Time the Expenses
Committee shall consist of three directors appointed by the Board of
Directors of the Surviving Corporation. During (i) the Interim Period and
(ii) from and following the Effective Time until such time, if any, as the
Expenses Committee is dissolved by the Board of Directors of the Surviving
Corporation, the Expenses Committee shall approve all the following
expenditures by Alamar or the Surviving Corporation, as the case may be,
(x) any expenditure of $25,000 or more and (y) capital expenditures of
$5,000 or more ("capital expenditures" for the purposes of this Section
7.17(c), shall mean any
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expenditure which is required by GAAP to be capitalized and which appears
on Alamar's balance sheet in the category of property, plant or equipment).
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date first above written.
ALAMAR BIOSCIENCES, INC.
By: /s/XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
Acting Chief Executive Officer
ACCUMED, INC.
By: /s/XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
Chief Executive Officer
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