FIFTH AMENDMENT TO AGREEMENT AND PLAN OF MERGER BY AND AMONG EQUITEX, INC., EI ACQUISITION CORP., AND HYDROGEN POWER, INC. March 10, 2006
Exhibit
10.9
FIFTH
AMENDMENT TO AGREEMENT
AND
PLAN OF MERGER
BY
AND AMONG
EQUITEX,
INC.,
EI
ACQUISITION CORP.,
AND
HYDROGEN
POWER, INC.
March
10, 2006
FIFTH
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This
Fifth Amendment to Agreement and Plan of Merger (this
“Agreement”)
is
entered into as of March 10, 2006, by and among Hydrogen Power, Inc., a Delaware
corporation (the “Company”),
Equitex, Inc., a Delaware corporation (“Equitex”),
and
EI Acquisition Corp., a Delaware corporation that is wholly owned by Equitex
(the “Merger
Sub”).
INTRODUCTION
A. The
Company, Equitex and Merger Sub have entered into that certain Agreement and
Plan of Merger and Reorganization dated September 13, 2005, as amended in that
certain First Amendment to Agreement and Plan of Merger and Reorganization
dated
October 31, 2005, that certain Second Amendment to Agreement and Plan of Merger
and Reorganization dated November 11, 2005, that certain Third Amendment to
Agreement and Plan of Merger and Reorganization dated December 15, 2005 and
that
certain Fourth Amendment to Agreement and Plan of Merger and Reorganization
dated January 30, 2006 (as amended, the “Merger Agreement”) whereby the Company
and Merger Sub will merge with the surviving corporation being a subsidiary
of
Equitex (the “Merger”).
B. The
Company, Equitex and Merger Sub have agreed to enter into this Agreement in
order to amend the Merger Agreement by entering into this Agreement in order
to
(i) extend the termination date of the Merger Agreement to March 17, 2006,
and
(ii) set forth further additional agreements of the parties regarding the
completion of the Merger.
C. The
parties to this Agreement intend to adopt the Merger Agreement, as amended
by
this Agreement, as a plan of reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the
“Code”),
and
the regulations promulgated thereunder, and intend that the Merger and the
transactions contemplated by this Agreement be undertaken pursuant to that
plan.
Accordingly, the parties to the Merger Agreement, as amended by this Agreement,
confirm their intention that the Merger qualify as a “reorganization,” within
the meaning of Code Section 368(a) and a “foreign merger” within the
meaning of Section 87(8.1) of the Income Tax Act (Canada), and that, with
respect to the Merger, Equitex, Merger Sub and the Company will each be a “party
to a reorganization,” within the meaning of Code
Section 368(b).
AGREEMENT
Now,
Therefore,
in
consideration of the foregoing premises, and the representations, warranties
and
covenants contained herein, the parties hereto agree as follows:
Article
1
Amendment
to Termination Date
1.1 Amendment
to Termination Date. In order to reflect a change in the termination date of
the Merger Agreement, Section 7.1(e) of the Merger Agreement is hereby deleted
in its entirety and replaced with the following:
“(e) by
either
the Company or Equitex if the Effective Date is not on or before March 17,
2006,
or such later date as the Company and Equitex may mutually agree (unless the
failure to consummate the Merger by such date shall be due to the action or
failure to act of the party seeking to terminate this Agreement in breach of
such party’s obligations under this Agreement).”
Article
2
Closing
Advance
2.1 Closing
Advance. In order to give effect to the agreement of the parties that
Equitex will advance to EI Acquisition the principal amount of $5,000,000 as
a
condition of closing of the Merger, Section 6.3(g) is hereby added to the Merger
Agreement:
“(g) Equitex
will have advanced to EI Acquisition the principal amount of $5,000,000 (the
“Closing Advance”) as an equity contribution and shall provide the Company
evidence of such Closing Advance, in a manner reasonably acceptable to the
Company, and such wire transfer may be completed concurrently with Closing.
Notwithstanding the foregoing, Equitex may, at its sole option, provide such
Closing Advance from other sources, including without limitation, pursuant
to a
loan from FastFunds Financial Corporation (“FastFunds”). Equitex acknowledges
and agrees that the Closing Advance will not be in any way secured by the
Security Agreement. The Company acknowledges and agrees that the completion
of
the Closing Advance will constitute satisfaction of Equitex’s obligation to
advance $5,000,000 toward the exploitation and commercialization of the Company
Intellectual Property within 45 days of the Closing, as contemplated by Section
5.12 of this Agreement. Notwithstanding the above, in order to facilitate a
loan
by FastFunds to Equitex and the grant of security by Equitex to FastFunds in
order to enable Equitex to complete the Closing Advance, the parties agree
that
the Closing will be completed as follows:
(i) documents
required to effect the Closing pursuant to this Agreement will be delivered
by
each party in escrow to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Brand, LLP (“Maslon”), as
attorneys for Equitex, to be held in trust pending Closing;
(ii) Equitex
will deliver or will cause FastFunds to deliver the Closing Advance in escrow
to
▇▇▇▇▇ to be held in trust pending Closing;
(iii) Maslon
will be entitled to file the Certificate of Merger with the Delaware Secretary
of State upon: (A) delivery of the Closing Advance to Maslon in escrow, and
(B)
delivery by Equitex and FastFunds of an irrevocable direction to release the
Closing Advance to the Company, as the surviving corporation, upon confirmation
of filing of the Certificate of Merger with the Delaware Secretary of
State;
(iv)
upon
receipt of confirmation of filing of the Certificate of Merger with the Delaware
Secretary of State, Maslon will deliver the Closing Advance to the Company,
as
the surviving corporation, by wire transfer to a bank account designated by
the
Company and will release the documents required to effect Closing to the
respective parties to whom the documents are to be delivered upon
Closing.
Article
3
Loan
Amount
3.1 Loan
Amount. In order to give effect to the agreement of the parties that Equitex
and EI Acquisition will either (i) convert the principal of the Loan Amount
and
all accrued interest into shares of
2
common
stock of the Company, or (ii) forgive repayment of the Loan Amount and all
accrued interest, Section 6.3(h) is hereby added to the Merger
Agreement:
“(h) Concurrent
with and as a condition to Closing, Equitex will, at the Company’s direction,
either (i) convert the principal of the Loan Amount plus accrued interest into
shares of common stock of HPI, or (ii) forgive the indebtedness, liabilities
and
obligations of the Company to Equitex for repayment of the Loan Amount, plus
accrued interest. In each case, the Company will be released of its
indebtedness, liability and obligations under the Promissory Note and the
Security Agreement and each of the Promissory Note and the Security Agreement
will be cancelled and will be of no further force or effect.”
Article
4
Nasdaq
4.1 Nasdaq.
In order address the requirement of Nasdaq that Equitex submit a new listing
application in order to maintain the continued listing of Equitex common stock
following completion of the Merger, Section 6.3(i) is hereby added to the Merger
Agreement:
“(i) Equitex
will have submitted to Nasdaq a listing application, as required by Nasdaq
in
its letter dated February 28, 2006, and Equitex will not have been notified
by
Nasdaq of any refusal (a) to list Equitex common stock pursuant to such new
listing application and (b) to maintain the continued listing of Equitex common
stock pursuant to Equitex’s current listing application following the completion
of the Merger.”
Article
5
UBC
Amended Sublicense Agreement
5.1 UBC
Amended Sublicense Agreement. In order to give effect to the agreement of
the parties as to the final form of the First Amendment to the Sublicense
Agreement and Consent to be entered into between the Company, the Amended
Sublicense Agreement attached as Exhibit E to the Merger Agreement is hereby
replaced with the Amended Sublicense Agreement attached hereto as Exhibit
A.
Article
6
Consent
of Company to Equitex Actions
6.1 Company
Consents to Equitex Conduct of Business. Pursuant to the terms of Section
4.1 of the Merger Agreement, the Company hereby acknowledges and consents to
the
actions of Equitex set forth on Exhibit B hereto. The Company further
acknowledges that such actions do not constitute breach of any covenant,
representation or warranty of Equitex or Merger Sub under the Merger
Agreement.
Article
7
General
Provisions
7.1 Merger
Agreement in Full Force and Effect.
The Merger Agreement shall continue in full force and effect without amendment
except as expressly provided for in this Agreement.
3
7.2 Interpretation.
The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
References to Sections and Articles refer to Sections and Articles of this
Agreement unless otherwise stated.
7.3 Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties shall negotiate in good faith to modify this
Agreement and to preserve each party’s anticipated benefits under this
Agreement.
7.4 Amendment.
This
Agreement may not be amended or modified except by an instrument in writing
approved by the parties to this Agreement and signed on behalf of each of the
parties hereto.
7.5 Miscellaneous.
This
Agreement (together with all other documents and instruments referred to
herein): (a) constitutes the entire agreement, and supersedes all other prior
agreements and undertakings, both written and oral, among the parties, with
respect to the subject matter hereof; and (b) shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
and
assigns, but shall not be assignable by either party hereto without the prior
written consent of the other party hereto.
7.6 Counterparts;
Delivery.
This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement. In addition, executed
counterparts may be delivered by means of facsimile or other electronic
transmission; and signatures so delivered shall be fully and validly binding
to
the same extent as the delivery of original signatures.
7.7 Governing
Law.
This
Agreement is governed by the internal laws of the State of Delaware without
regard to its conflicts-of-law principles.
[SIGNATURE
PAGE TO FOLLOW.]
4
In
Witness Whereof,
the
parties hereto have caused this Agreement to be executed effective as of the
date first written above.
|
HYDROGEN
POWER, INC.:
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇
▇▇▇▇▇▇
Title: Chairman
|
EQUITEX,
INC.:
By: /s/
▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇
▇▇▇▇
Title: President
|
|
EI
ACQUISITION CORP.:
By: /s/
▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇
▇▇▇▇
Title: President
|