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EXHIBIT 2.1
AMENDMENT TO REORGANIZATION AGREEMENT
This Amendment to Reorganization Agreement (the "Amendment") is made and
entered into as of the 2nd day of January, 1998, by and among Robert Kusher, an
individual ("Kusher"), Craig Lowy, an individual ("Lowy")(Lowy and Kusher are
referred to herein individually as "Target" and collectively as "Targets"),
MiniMed Distribution Corp., a Delaware corporation ("Acquiror") and MiniMed
Inc., a Delaware corporation ("MiniMed").
R E C I T A L S
A. Targets, Acquiror and MiniMed have entered into that certain
Reorganization Agreement, dated as of October 19, 1997 (the "Agreement"), for
the purpose of effecting the purchase of the stock of the Corporations, as such
term is defined in the Agreement.
B. Targets, Acquiror and MiniMed now desire to amend the Agreement to
address certain matters that have arisen since the execution of the Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Amendment, and for their mutual reliance, the parties hereto
agree as follows:
1. Defined Terms. Except to the extent it is specifically indicated to
the contrary in this Amendment, defined terms used in this Amendment shall have
the same meanings as in the Agreement.
2. Purchase Price. Section 1.4.1 of the Agreement shall be amended to
replace the amount "Sixteen Million Dollars ($16,000,000)" with the amount
"Fourteen Million One Hundred Ninety Eight Thousand Seven Hundred Fifty Dollars
and Thirty Cents ($14,198,750.30)."
3. Compliance With Laws A new Section 2.7(d) of the Agreement shall read
as follows:
"(d) Except as may be otherwise disclosed on Schedule 2.7, no
Target, Corporation, or employee or agent of any Corporation (i) has or has had
any knowledge of, any involvement with or any responsibility for, the billing
practices of any dialysis facility providing services in connection with any
Corporation's provision, or billing, of the drugs Epoetin alfa (a/k/a
Erythropoietin, EPO), Calcijex or Infed, or (ii) has knowledge of any billing
practices of any such dialysis facility which is not in compliance with all
applicable laws."
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4. Disclosures. Section 2.23 of the Agreement shall be amended to add
the following at the end thereof:
"Notwithstanding any provision to the contrary contained in Article
II hereof, to the extent the representations and warranties made by Lowy in
Article II hereof relate to the Corporations, such representations and
warranties shall relate solely to the Corporations in which Lowy owned Shares
immediately prior to the Closing."
5. Medicaid Recoupment. A new Section 5.1.13 of the Agreement shall read
as follows:
"5.1.13 Medicaid Recoupment. Targets shall have caused Pharmax, Inc.
to provide recoupment to the State of Florida Agency for Health Care
Administration ("Florida Medicaid") in the amount of $1,584,870.01 in accordance
with that certain letter dated December 2, 1997 addressed to Pharmax, Inc., a
copy of which is attached hereto as Exhibit 5.1.13. Targets shall also have
caused the Corporations, as applicable, to provide recoupment to Florida
Medicaid in the amount of $216,379.69 with respect to the Corporations'
provision and billing of the drugs Calcijex and Infed. Targets shall provide to
Acquiror, prior to the time of making all such recoupment required by this
Section 5.1.13, drafts of any and all correspondence addressed to Florida
Medicaid in connection therewith, the form of which correspondence shall be
reasonably acceptable to Acquiror."
6. Right to Proceed and Effect of Investigation. Notwithstanding
anything to the contrary contained in Sections 5.4 and 5.5 hereof and in any
certificate delivered at Closing pursuant to Section 5.5 hereof, Acquiror and
MiniMed shall not be deemed to waive their rights under the Agreement (including
indemnification rights) with respect to breaches, conditions and events relating
to Targets' breach of Section 4.1.1(v) in connection with bringing into
compliance any items reflected on Schedule 2.7 of the Agreement.
7. Payment of Indemnification. Section 6.4.4 of the Agreement shall be
amended to add the following at the end thereof:
"Notwithstanding any provision to the contrary contained in the
Agreement, any and all Damages fixed and payable by Acquiror or MiniMed to any
Target pursuant to Sections 6.4.1 or 6.4.3 hereof shall be payable solely in
Common Stock, the number of shares of which shall be equal to (A) the average
closing price of the Common Stock on the NASDAQ National Market for a period of
ten (10) consecutive business days ending two (2) days prior to the date the
Damages are fixed and payable, divided into (B) such amount of Damages, rounded
down to the nearest whole number."
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8. Indemnification Limitations. A new Section 6.4.6 of the Agreement
shall read as follows:
"6.4.6 Indemnification Limitations. Notwithstanding any provision to
the contrary contained in the Agreement, Lowy shall be under no liability to
indemnify Acquiror or MiniMed under Sections 6.4.1 or 6.4.2 (and Acquiror and
MiniMed shall not make a claim against Lowy under Sections 6.4.1 or 6.4.2) with
respect to Damages related to, caused by or arising from any Corporation in
which Lowy did not own any Shares immediately prior to the Closing."
9. Effect on Agreement; General Provisions. Except as set forth in this
Amendment, the terms and provisions of the Agreement are hereby ratified and
declared to be in full force and effect. This Amendment shall be governed by the
provisions of the Agreement regarding choice of law, attorneys' fees, and
successors and assigns. This Amendment shall become effective upon its
execution, which may occur in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. Captions and paragraph headings are used herein for convenience
only, are not a part of this Amendment or the Agreement as amended by this
Amendment and shall not be used in construing either document. Each reference to
the Agreement and any agreement contemplated thereby or executed in connection
therewith, whether or not accompanied by reference to this Amendment, shall be
deemed a reference to the Agreement as amended by this Amendment.
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IN WITNESS WHEREOF, the parties have duly executed this Amendment
as of the date first above written.
TARGETS:
"Kusher"
By /s/ Robert A. Kusher
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Robert A. Kusher
"Lowy"
By /s/ Craig Lowy
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Craig Lowy
ACQUIROR:
MINIMED DISTRIBUTION CORP.
By /s/ Eric S. Kentor
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Name: Eric S. Kentor
Title: President
MINIMED:
MINIMED INC.
By /s/ Terrance H. Gregg
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Name: Terrance H. Gregg
Title: President and Chief
Operating Officer