EXHIBIT 2.2
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDMENT NO. 1 (the "Amendment") to the AGREEMENT AND PLAN OF
REORGANIZATION dated January 16, 2002 (the "Merger Agreement") is dated as of
March 8, 2002, by and among Scanner Technologies Corporation, a Minnesota
corporation ("Scanner") and Southwest Capital Corporation, a New Mexico
corporation ("Southwest").
WHEREAS, Southwest has filed with the Securities and Exchange Commission in
Washington, D.C. (the "SEC") a preliminary proxy statement regarding a special
meeting of Southwest shareholders at which the shareholders are asked to approve
the Merger Agreement (the "Proxy Statement"), and the Proxy Statement is
currently under review by the SEC;
WHEREAS, the parties agree that the review of the Proxy Statement will
delay the approval of the Merger Agreement by the shareholders of both companies
and thus, the consummation of the Merger;
WHEREAS, due to such delay, Scanner is in need of additional financing
prior to the Effective Date of the Merger and has negotiated a loan agreement
with Xxxxxx Bank pursuant to which Scanner will receive a bridge loan in the
principal amount of up to One Million Dollars ($1,000,000) (the "Bridge Loan").
WHEREAS, the Bridge Loan will be guaranteed by several individual investors
who will receive as consideration for their guarantees 5-year warrants to
purchase Scanner common stock at an exercise price of $2.75 per share (the
"Bridge Warrants") which shall convert into warrants to purchase common stock of
the company surviving the Merger upon the consummation of the Merger; and
WHEREAS, the parties hereto desire to make any amendments necessary to take
the aforesaid facts and developments into account;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements contained herein, the parties hereto agree as follows:
1. DEFINITIONS. Except as otherwise defined herein, all capitalized terms
used in this Amendment shall have the meaning given to them in the Merger
Agreement.
2. NEW SECTION 1.11 OF THE MERGER AGREEMENT. The following new Section 1.11
is hereby inserted into the Merger Agreement:
"1.11 CONVERSION OF SCANNER WARRANTS.
(a) Each warrant to purchase shares of Scanner Common Stock that is outstanding
at the Effective Time, whether or not exercisable and whether or not vested (a
"Scanner Warrant"), shall, without any action on the part of Scanner or the
holder thereof, be assumed by the Surviving Corporation. From and after the
Effective Time, all references to Scanner in the Scanner Warrants shall be
deemed to refer to the Surviving Corporation. The Scanner Warrants assumed by
Southwest shall be exercisable upon the same terms and conditions as under the
Scanner Warrants except that (i) such Scanner Warrants shall entitle the holder
to purchase from the Surviving Corporation the number of shares of Surviving
Corporation Common Stock (rounded down to the nearest whole number of such
shares) plus the number of Merger Warrants to purchase shares of Common Stock of
the Surviving Corporation that equals the product of the conversion ratios
established in Section 1.3(a)(i) and 1.3(a)(ii), respectively, multiplied by the
number of shares of Scanner Common Stock subject to such Scanner Warrant
immediately prior to the Effective Time, (ii) the warrant exercise price per
share of Surviving Corporation Common Stock shall be an amount (rounded up to
the nearest full cent) equal to the exercise price per share of Scanner Common
Stock in effect immediately prior to the Effective Time divided by the
conversion ratios established in Section 1.3(a)(i) and 1.3(a)(ii), and (iii) the
Scanner Warrants shall be exercisable pursuant to the current terms of such
Scanner Warrants.
(b) As promptly as practicable after the Effective Time, the Surviving
Corporation shall issue to each holder of a Scanner Warrant a written instrument
informing such holder of the assumption by the Surviving Corporation of such
Scanner Warrant. The Surviving Corporation shall take all corporate action
necessary to reserve for issuance a sufficient number of shares of Surviving
Corporation Common Stock for delivery upon exercise of Scanner Warrants pursuant
to the terms set forth in this Section 1.11.
(c) The provisions of this Section 1.11 do not apply to options granted by
Scanner under its 1996 Stock Option Plan. The parties agree that these options
will not be assumed by the Surviving Corporation. The parties acknowledge that
these options are accelerated pursuant to the terms of the 1996 Stock Option
Plan and the underlying option agreements and can be exercised up to ten (10)
days prior to the Effective Date."
3. CONSENT PURSUANT TO SECTION 5.2. Scanner will issue to each investor
guaranteeing the Bridge Loan one Bridge Warrant for each Four Dollars ($4)
guaranteed by the investor, e.g. a total of 25,000 Bridge Warrants if the
investor guarantees $100,000 of the Bridge Loan. As required by Section 5.2 of
the Merger Agreement, Southwest hereby consents to the issuance of the Bridge
Warrants under these terms and conditions.
4. TERMINATION OF MERGER AGREEMENT. The date "April 30, 2002" in Section
7.1(b) is hereby replaced with "July 31, 2002."
5. EFFECTIVENESS OF MERGER AGREEMENT. Except as otherwise provided herein,
the Merger Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
SCANNER TECHNOLOGIES CORPORATION
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, Chief Executive Officer
SOUTHWEST CAPITAL CORPORATION
By: /s/ Xxxxxxxx Xxxxxx
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Xxxxxxxx Xxxxxx, President
