AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
AND MERGER
THIS AMENDMENT, made and entered into this 14th
day of October, 1998, by and among VENTANA MEDICAL
SYSTEMS, INC., a Delaware corporation ("Parent"),
VENTANA ACQUISITION CORPORATION, a Delaware corporation
and wholly-owned, direct subsidiary of Parent
("Subsidiary"), BIOTECHNOLOGY TOOLS, INC., a Delaware
corporation (the "Company"), and XXXXX X. XXXXXXX and
XXXXX X. XXXXXX ("the "Principal Shareholders").
W I T N E S S E T H:
WHEREAS, Parent, Subsidiary, the Company, and
Principal Shareholders are parties to that certain
Agreement and Plan of Reorganization and Merger dated
as of August 18, 1998 (the "Agreement"); and
WHEREAS, the parties desire to amend the Agreement
as set forth herein.
NOW, THEREFORE, in consideration of the promises
set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do mutually
promise and agree as follows:
1. Defined Terms. Capitalized terms used herein
shall have the meanings assigned in the Agreement,
unless the context clearly indicates otherwise.
2. Additional Definitions. The following defined
term shall be added to the "ARTICLE I DEFINITIONS"
section of the Agreement.
"Management Shareholders" shall mean the
Principal Shareholders, Xxxxx X. Xxxxxxx, X.X.
Xxxxx, Xxxxx X. Xxxx, Xxxxxxx Xxxxx, Biomatics,
Inc. and Xxxxxxx Xxxxx."
The definition of the term "Proportionate Share" shall
be deleted and replaced with the following:
"Proportionate Share" (i) of a Shareholder
shall mean the proportion based on the fraction,
the numerator of which is the number of Company
Shares owned by such Participating Shareholder and
the denominator of which is the total number of
issued and outstanding shares of Company Common
Stock as of the Closing Date; and "Proportionate
Share" (ii) of a Management Shareholder shall mean
the proportion based on the fraction, the
numerator of which is the number of Company Shares
owned by such Management Shareholder (excluding
any shares purchased prior to September, 1994) and
the denominator of which is the total number of
issued and outstanding shares of Company Common
Stock owned by all Management Shareholders as of
the Closing Date (excluding any shares purchased
prior to September, 1994).
3. Amendment to Subsection 4.3. The first
sentence of Section 4.3 of the Agreement shall be
deleted in its entirety and replaced with the
following:
"For purposes of this Agreement, "Total
Company Value" means the amount of $6,457,132;
provided, however, that if the Closing Net Worth
(as defined below) is either greater than
$1,657,132 or less than $1,257,132, Total Company
Value means an amount equal to $6,457,132, plus
the amount by which the Closing Net Worth exceeds
$1,486,838.43 (the "Target Net Worth"), or less
the amount by which the Closing Net Worth is less
than $1,486,838.43."
The second sentence of Section 4.3 of the Agreement
shall be deleted in its entirety.
Subsection 4.3(b)(vi) of the Agreement shall be, and it
hereby is, amended by deleting the reference to
"Section 8.5" and inserting in lieu thereof "Section
8.3."
The following new Subsection 4.3(b)(vii) shall be added
to the Agreement:
"(vii) The Closing Date Balance Sheet shall
reflect and account for the receipt of the
payments required to be made under Paragraph
4.4(e), below."
The following new Subsection 4.3(b)(viii) shall be
added to the Agreement:
"(viii) The Closing Date Balance Sheet shall set
forth any adjustment to Closing Net Worth based on the
re-valuation of inventory pursuant to Section 4.3(b)(i)
and shall include a schedule of all such items of
inventory and the amount of the adjustment to the
inventory value (the "Re-valued Inventory"). In the
event of the sale of Re-valued Inventory in whole or
part at any time prior to November 1, 1999 (the "Sale
Period") each Company Shareholder shall be entitled to
receive its Proportionate Share of the amount received
by Surviving Corporation up to the amount of the
adjustment value set forth on the schedule (net of
reasonable transaction expenses). Such amount shall
be paid to the Company Shareholders within 10 days of
the sale of the Re-valued Inventory. In the event of a
sale of the Cryogenic and/or Ultramicrotomy business
lines involving the sale in bulk of Re-valued
Inventory, the following additional provisions shall
apply:
(i) A sale shall be deemed to have occurred if
the parties have entered into good
faith negotiations during the Sale Period
and the closing occurs within a
reasonable time thereafter.
(ii) A reasonable portion of the total
consideration received for the business line
shall be allocated to the Re-valued
Inventory in light of all relevant facts
and circumstances and the parties
shall not assign an artificially low value to
the Re-valued Inventory for the purposes
of circumventing the provisions
of this subsection; and
(iii) The terms of the payment due the Company
Shareholders shall be payable in
substantially the same manner as the
purchase price is paid to the Surviving
Corporation.
4. Amendment to Subsection 4.3(c). Subsection
4.3(c) of the Agreement shall be, and it hereby is,
amended by deleting the reference to "forty-five (45)"
in the first sentence and inserting in lieu thereof
"sixty (60)."
5. Section 4.4(a) - Total Company Value/Estimated
Merger Consideration. Pursuant to Section 4.4(a)
Parent and Subsidiary have determined that the total
Merger Consideration shall be reduced by $200,000.
Such reduction is based on the determination that
certain adjustments must be made to Total Company
Value. Provided however, that if the adjustments to
Closing Net Worth do not necessitate an adjustment
greater than $200,000 then, the difference between such
$200,000 and the actual adjustment shall be paid to the
shareholders of Company pro rata with interest at the
Applicable Rate. If such adjustment is greater than
$200,000 the excess shall be paid pursuant to the terms
of Section 4.5.
6. Amendment to Subsection 4.4. The first
sentence of Subsection 4.4(b) of the Agreement shall
be, and it hereby is, deleted in its entirety and
replaced with the following:
"(b) At the Effective Time, Parent shall
make available to a bank or trust company, or such
other paying agent designated by Parent and
reasonably acceptable to the Company for the
benefit of the Company Shareholders (the "Paying
Agent"), an amount in cash equal to the sum of (i)
the Estimated Merger Consideration less (ii) (x)
the amount of $500,000 to be retained by Parent
from the amounts to be paid to all Company
Shareholders to satisfy any reduction of the
Merger Consideration pursuant to Section 4.3,
above (the "Adjustment Retention"); and (y) the
amount of $500,000 to be retained by Parent from
the amounts to be paid to the Management
Shareholders to satisfy any claims for
indemnification pursuant to Article X, below (the
"Indemnity Retention") (such amount being
hereinafter referred to as the "Merger Payment
Fund"). Attached hereto as Schedule 4.4(b) is a
detailed breakdown of the calculation of the
estimated Merger Consideration, Adjustment
Retention, Indemnity Retention and the resulting
payments due the Company Shareholders."
The following new Subsection 4.4(e) shall be added to
the Agreement:
"(e) Simultaneously upon Closing, the
Management Shareholder shall be required to pay in
full all amounts of principal and interest due
under those certain Promissory Notes dated
September 29, 1994 in the aggregate principal
amount of $1,172,619.
7. Amendment to Subsection 4.5. The last
sentence of Subsection 4.5 shall be deleted in its
entirety and replaced with the following:
"In the absence of such payment, the Parent shall
be entitled to deduct the Shortfall Amount from
the Indemnity Retention up to $200,000 on a dollar
for dollar basis, and if any Shortfall Amount
exists thereafter the Parent shall be entitled to
set off 67% of the remaining Shortfall Amount
against the balance of the Indemnity Retention. "
8. Amendment to Subsection 4.6. Subsection 4.6
of the Agreement shall be deleted in its entirety and
replaced with the following:
The Indemnity Retention shall be funded solely by
the Management Shareholders and shall not affect,
in any way, the Merger Consideration payable to
the Shareholders other than the Management
Shareholders. Schedule 4.4(b) sets forth a
detailed analysis of the adjustments that are
necessary to ensure that the Indemnity Retention
is funded solely by the Management Shareholders.
Parent shall deliver to the Paying Agent cash (or
other immediately available funds) for
distribution to Management Shareholders in the
manner set forth in Section 4.4, above, the
following amounts on the following dates: (i)
within ten (10) days after the expiration of the
Retention Period, the Unused Indemnity Retention;
and (ii) within ten (10) days after the Resolution
Date, the Balance. Interest shall accrue on the
amounts payable under this Section from the
Closing Date to the date of payment at the
Applicable Rate , and shall be payable together
with such amounts. In the event that any amounts
were deducted against the Indemnity Retention
pursuant to Paragraph 4.5, above, Parent shall
instruct the Paying Agent to make such adjustments
to the payments due to Management Shareholders as
are necessary to ensure that each Management
Shareholder has paid its Proportionate Share of
the Shortfall Amount.
9. Amendment to Subsection 6.25(a). Subsection
6.25(a) of the Agreement shall be, and it hereby is,
amended by deleting the reference to "6.13."
10. Confirming Amendment to Subsection 7.1. It
is hereby confirmed that the last line of Subsection
7.1(c) of the Agreement was amended in handwriting,
initialed by the parties, to read "Principal
Shareholders" on August 18, 1998.
11. Amendment to Article VIII. The following new
Section 8.10 shall be inserted at the end of Article
VIII.
Section 8.10. Outstanding Debentures.
Parent shall cause the Company to pay in full
within thirty (30) days after the date of Closing,
all amounts of principal and interest accrued
through the date of payment at a per annum rate of
12% under those certain debentures of the Company
identified and described on attached Exhibit 8.10.
12. Amendment to Section 9.3(g)(x). Section
9.3(g)(x) of the Agreement shall be deleted in its
entirety.
13. Amendment to Subsection 10.1. Subsection
10.1 of the Agreement shall be, and it hereby is,
amended by deleting the reference to "11.1(b)(ii)" and
inserting in lieu thereof "11.1(b)(iii)."
14. Continuing Effect. Except as amended herein,
the terms, provisions and conditions of the Agreement
shall remain in full force and effect and shall
continue to govern the parties thereto.
15. Counterparts. This Amendment may be executed
in two or more counterparts, each of which shall be
deemed an original but all of which together shall
constitute one and the same document.
16. Governing Law. This Amendment and all
questions of its interpretation, performance,
enforceability and the rights and remedies of the
parties hereto, shall be determined in accordance with
the laws of the State of Delaware.
IN WITNESS WHEREOF, the undersigned have executed
this Amendment to the Agreement as of the day, month
and year first above written.
PARENT:
VENTANA MEDICAL SYSTEMS, INC.
By: /s/ Xxxxxx Xxxx
----------------------------
SUBSIDIARY:
VENTANA ACQUISITION CORPORATION
By: /s/ Xxxxxx Xxxx
----------------------------
COMPANY:
BIOTECHNOLOGY TOOLS, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx, Chief
Executive Officer
PRINCIPAL SHAREHOLDERS:
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
