EXHIBIT 2.1
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "Amendment") is
made and entered into as of December 9, 2004 by and among VitalWorks Inc., a
Delaware corporation (the "Buyer"); Amicas, Inc., a Delaware corporation and a
subsidiary of the Buyer (the "Company"); and Xxxx Xxxxxxx, Xxxxx Xxxxxxxxxx and
Xxxxxxxxx Xxxxx solely in their respective capacity as the "Committee Members"
constituting the Stockholders' Representative.
RECITALS
A. Buyer, Company and Stockholders' Representative (collectively, the
"Parties") are parties to a certain Agreement and Plan of Merger dated as of
November 25, 2003 (the "Agreement").
B. The Parties have determined to terminate the obligations relating to
the Earn-Out Consideration set forth in the Agreement in exchange for the
Buyer's payment of the Substitute Consideration (as defined below).
C. Buyer, Company and Stockholders' Representative desire to amend the
Agreement in the manner hereinafter set forth pursuant to the terms of Section
10.9 of the Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties hereby agree as follows:
1. Capitalized terms used herein and not defined herein shall have the
meaning given to them in the Agreement.
2. Schedule 1.11(a) attached hereto is hereby inserted into the Agreement.
3. Schedule 4.9 of the Agreement is hereby deleted in its entirety and
replaced by Schedule 4.9 attached hereto.
4. Section 1.11 of the Agreement is hereby deleted in its entirety and the
following provision shall be inserted in lieu thereof:
"1.11 Substitute Consideration. The Buyer will pay up to a total of
$14,485,094 (the "Substitute Consideration") to the Company Stockholders and the
Eligible Employees (as defined in Schedule 4.9) subject to the employee bonus
plan (the "Employee Bonus Plan") set forth in Schedule 4.9 attached hereto as
follows:
(a) The Buyer (or a representative thereof) will pay $9,985,094
of the Substitute Consideration (the "Stockholder Substitute Consideration") to
each Company Stockholder at his, her or its addresses set forth on Schedule
1.11(a) attached hereto (based on
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his, her or its pro rata share of the Stockholder Substitute Consideration set
forth opposite such Company Stockholder's name on Schedule 1.11(a) attached
hereto) in three installments as set forth below:
(i) $4,318,427 in cash (and the portion of the Escrow Fund
payable to the Company Stockholders pursuant to the
escrow notice dated December 9, 2004 (the "Escrow
Notice")) on the date that is three (3) business days
after the receipt by the Buyer of the Escrow Fund
pursuant to the Escrow Notice;
(ii) $3,333,333 in cash on April 2, 2005; and
(iii) $2,333,334 in cash on the earlier of (i) December 31,
2005 or (ii) two (2) days after the end of any fiscal
quarter end during which the Buyer's cash and cash
equivalents balance reflected on the Buyer's
consolidated balance sheet as of the end of such fiscal
quarter exceeds $30,000,000.
(b) The Buyer (or a representative thereof) will pay up to
$4,500,000 (the "Employee Substitute Consideration") to the Eligible Employees
pursuant to the terms of the Employee Bonus Plan in two installments as set
forth below:
(i) up to $2,250,000 in cash within five (5) business days
after the date of this Amendment; and
(ii) up to $2,250,000 in cash on December 31, 2005.
The installment payments of the Employee Substitute Consideration shall be made
to Eligible Employees pursuant to the terms of Schedule 4.9. Notwithstanding the
above, no payments shall be made pursuant to this Section 1.11(b) until the
Company delivers to the Buyer a consent executed by each Eligible Employee in a
form approved by the Buyer pursuant to which such Eligible Employee has
consented to the terms of Schedule 4.9.
(c) The Parties acknowledge that a portion of the Stockholder
Substitute Consideration constitutes interest ("Imputed Interest") for income
Tax purposes. The amount of the Stockholder Substitute Consideration
constituting Imputed Interest shall be determined in accordance with the rules
under Sections 483 and 1274 of the Code and the Treasury Regulations promulgated
thereunder. The parties hereto agree to the extent allowable by law (i) to file
all income Tax Returns in a manner consistent with this Section 1.11(c), and
(ii) not to take any income Tax position inconsistent with this Section 1.11(c).
(d) On the date that is three (3) business days after the receipt
by the Buyer of the Escrow Fund pursuant to the Escrow Notice, the Buyer will
pay (i) $9,906 to LeBoeuf, Lamb, Xxxxxx and XxxXxx, LLP (000 Xxxxxx Xxxxxx,
Xxxxxxxx, XX 00000, Attention: Xxxxxx Xxxxxxx) and (ii) $5,000 to Xxxxxx &
Xxxxx, PLLC (Suite 120, 00000 Xxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000,
Attention Xxxxxx Xxxx)."
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5. Section 1.12(b) of the Agreement is hereby amended to read in its
entirety as follows:
"(b) On the Closing Date, the Buyer shall also hold back
$185,435.69 that would otherwise be paid in the Merger to the Company
Stockholders pursuant to Section 1.5(a) of this Agreement (the "Holdback
Amount") for the purpose of securing the indemnification, Merger Consideration
adjustment and Expense reimbursement obligations of the Company Stockholders set
forth in this Agreement. The Parties agree that as of the date of this
Amendment, the Holdback Amount, as adjusted pursuant to this Section 1.12(b)
since the Closing Date, is $174,847.00 (the "Adjusted Holdback Amount"). Within
five (5) business days of the date of this Amendment, the Buyer shall pay fifty
percent (50%) of the Adjusted Holdback Amount in the aggregate (the "Total
Holdback Recipient Amount") to the individuals set forth on Schedule 1.12(b)
(the "Holdback Recipients"), each such Holdback Recipient to receive the same
proportion of the Total Holdback Recipient Amount as such Holdback Recipient
would have received of the Holdback Amount set forth opposite his name on
Schedule 1.12(b). The Buyer shall be entitled to retain the remaining fifty
percent (50%) of the Adjusted Holdback Amount."
6. The terms and conditions of Sections 1.12(c), 1.12(d) and 1.12(e) of
the Agreement are hereby deleted in their entirety and shall be of no further
force or effect.
7. Sections 4.12 and 4.16 of the Agreement are hereby deleted in their
entirety and shall be of no further force or effect.
8. Article VI of the Agreement is hereby deleted in its entirety and the
following provision shall be inserted in lieu thereof:
"Except in the case of fraud or misrepresentation made with intent
to deceive, the parties to this Agreement agree that there shall be no basis for
the assertion of any claim against, or the imposition of any liability on, any
party to this Agreement or any Company Stockholder under, pursuant to, or in
connection with this Agreement, the Merger, or the other transactions and
matters set forth in, contemplated by, or related to this Agreement, whether
based on contract, tort, statute or otherwise except for Buyer's obligation to
(a) pay the Substitute Consideration as set forth in Section 1.11 of this
Agreement, (b) pay the Total Holdback Recipient Amount to the Holdback
Recipients as set forth in Section 1.12(b) and (c) pay the Applicable Share
Consideration to any Company Stockholder that has not received the Applicable
Share Consideration in accordance with Section 1.7 of this Agreement."
9. Article VII is hereby deleted in its entirety and shall be of no
further force or effect.
10. This Amendment may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
will be deemed to be an original but all of which taken together will constitute
one and the same agreement. Facsimile copies will be treated as, and will have
the same effect as, an original.
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11. Except as modified hereby, the Agreement is in all other respects
ratified and confirmed. In the event of any conflict between the terms of this
Amendment and the Agreement, the terms of this Amendment shall control and
prevail.
12. This Amendment shall not confer any rights or remedies upon any person
other than the Parties and their respective successors and permitted assigns;
provided, however, that from and after the effectiveness of this Amendment, the
provisions in this Amendment that benefit the Company and the Company
Stockholders are intended for the benefit of the Company Stockholders and
certain provisions of Section 4 are intended for the benefit of the Eligible
Employees. From and after the effective date of this Amendment, each of the
intended third-party beneficiaries referred to in this Section 12 shall be
entitled to enforce the provisions hereof that are specified above as being for
his benefit, except that only the Stockholders' Representative, and no
individual Company Stockholder, shall be entitled to enforce the provisions
hereof that are specified above as being for the benefit of the Company
Stockholders.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date first written above.
VITALWORKS INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------
Title: President and CEO
AMICAS, INC.
By: /s/ Xxxxx Xxxxxxxxxx
--------------------------
Title: CEO and President
STOCKHOLDERS' REPRESENTATIVE
/s/ Xxxx Xxxxxxx
------------------------------
Xxxx Xxxxxxx
/s/ Xxxxx Xxxxxxxxxx
------------------------------
Xxxxx Xxxxxxxxxx
/s/ Xxxxxxxxx Xxxxx
------------------------------
Xxxxxxxxx Xxxxx
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SCHEDULE 1.11(a)
DISTRIBUTION OF STOCKHOLDER SUBSTITUTE CONSIDERATION
OMITTED
SCHEDULE 4.9
AMICAS, INC. AMENDED AND RESTATED EMPLOYEE BONUS PLAN DATED AS OF
DECEMBER 9, 2004
INCORPORATED BY REFERENCE TO EXHIBIT 10.1 TO CURRENT REPORT ON FORM 8-K FILED
DECEMBER 10, 2004
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