EXHIBIT 10.2
AMENDMENT NO. 1 TO THE
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ENHANCE BIOTECH, INC.,
ARDENT ACQUISITION CORP.
AND
ARDENT PHARMACEUTICALS, INC.
This Amendment No. 1 ("Amendment") to the Agreement and Plan of Merger
(the "Agreement") made and entered into as of the 20th day of November, 2004, by
and among ENHANCE BIOTECH, INC., a Delaware Corporation ("Parent"), ARDENT
ACQUISITION CORP., a North Carolina corporation and wholly owned subsidiary of
Parent ("Merger Sub"), and ARDENT PHARMACEUTICALS, INC., a North Carolina
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, capitalized terms used but not defined herein shall have the
meaning ascribed to such terms in the Agreement.
WHEREAS, each of Parent, Merger Sub and the Company desire to amend the
Agreement to (i) delete all obligations of Parent related to filing and
maintaining an effective Form S-4, (ii) provide for the private placement of
Parent Common Stock to the Company's shareholders, in accordance with federal
and state securities laws, (iii) create registration rights for the benefit of
Company shareholders who will receive Parent Common Stock, (iv) revise the
allocation of the Merger Consideration to the Company's shareholders, (v) allow
the implementation of procedures to allow the selection of the persons who shall
be Directors after the Merger, and (vi) clarify the parties' immediate
intentions in terms of listing the Parent Common Stock on the American Stock
Exchange;
WHEREAS, the Board of Directors of the Company has determined that it is
in the best interest of the holders of the Company's securities to amend the
Agreement and has adopted this Amendment in accordance with the NCBCA;
WHEREAS, the Board of Directors of Parent has determined that it is in the
best interest of the holders of Parent Common Stock to amend the Agreement and
has adopted this Amendment in accordance with the DGCL, and Parent as the sole
shareholder of Merger Sub, has adopted this Amendment in accordance with the
NCBCA;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
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ARTICLE 1. Exhibit A attached to the Agreement shall be deleted in its
entirety and replaced with the Registration Rights Agreement referenced herein
and attached as Exhibit A hereto.
ARTICLE 2. Exhibit B attached to the Agreement shall be deleted in its
entirety and replaced with Exhibit B attached hereto.
ARTICLE 3. All references to the "Proxy/Information Statement" shall be
deleted from the Agreement.
ARTICLE 4. All references to "Form S-4" shall be deleted from the
Agreement.
ARTICLE 5. All references to "Initial Lock Up Period" shall be deleted
from the Agreement.
ARTICLE 6. All references to "Resale Prospectus" shall be deleted from the
Agreement."
ARTICLE 7. Section 2.1(c) (SERIES A CONVERTIBLE EXHANGEABLE PREFERRED
STOCK) of the Agreement shall be amended by deleting the percentage
0.000041762166263% of the Residual Merger Consideration to be issued to holders
for each share of Series A Preferred Stock, and substituting the following
percentage: 0.000041587422187%.
ARTICLE 8. Section 2.1(d) (SERIES B CONVERTIBLE EXHANGEABLE PREFERRED
STOCK) of the Agreement shall be amended by deleting the percentage
0.000029233509085% of the Residual Merger Consideration to be issued to holders
for each share of Series B Preferred Stock, and substituting the following
percentage: 0.000029111188262%.
ARTICLE 9. Section 2.1(e) (SERIES C CONVERTIBLE EXHANGEABLE PREFERRED
STOCK) of the Agreement shall be amended by deleting the percentage
0.000002923350909% of the Residual Merger Consideration to be issued to holders
for each share of Series C Preferred Stock, and substituting the following
percentage: 0.000003202230709%.
ARTICLE 10. Section 2.1(f) (SERIES D-1 CONVERTIBLE PREFERRED STOCK) of the
Agreement shall be amended by deleting the ratio of 1.111111111 shares of Parent
Common Stock for each share of Series D-1 Convertible Preferred Stock, and
substituting therefore the ratio of 1.228070175438600 shares of Parent Common
Stock for each share of Series D-1 Convertible Preferred Stock.
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ARTICLE 11. Section 2.1(g) (SERIES D-2 CONVERTIBLE PREFERRED STOCK) of the
Agreement shall be amended by deleting the ratio of 0.761904487 shares of Parent
Common Stock for each share of Series D-2 Convertible Preferred Stock, and
substituting therefore the ratio of 0.842105263157895 shares of Parent Common
Stock for each share of Series D-2 Convertible Preferred Stock.
ARTICLE 12. Section 2.1(h) (COMPANY COMMON STOCK) of the Agreement shall
be amended by deleting the percentage 0.000002923350909% of the Residual Merger
Consideration to be ISSUED to holders for each share of Company Common Stock,
and substituting the following percentage: 0.000002911118826%.
ARTICLE 13. Section 2.1(j) of the Agreement presently reads as follows:
"Shares of Parent Common Stock issued as Merger Consideration shall be
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to Section 6.1 hereof. Notwithstanding the foregoing, (A) if Parent has
consummated a Qualified Financing on or prior to the Closing Date, all shares
issued to each holder of Company Common Stock or Company Preferred Stock, as the
case may be, as Merger Consideration, in excess of 30,000 shares of Parent
Common Stock shall be subject to a lock-up period restricting transfer of such
shares for a period of 12 months after the Closing Date (the "Lock-Up Period")
and each certificate representing such shares shall bear a restrictive legend
substantially as set forth on Exhibit A attached hereto or (B) if Parent has not
consummated a Qualified Financing on or prior to the Closing Date, the first
30,000 (or fewer) shares issued to each holder of Company Common Stock or
Company Preferred Stock, as the case may be, as Merger Consideration shall be
subject to a lock-up period (the "Initial Lock-Up Period") restricting transfer
of such shares for a period ending on the earlier of (i) the 30th day following
the date of consummation by Parent of a Qualified Financing or (ii) the 180th
day following the Closing Date, and each certificate representing such shares
shall bear a restrictive legend substantially as set forth on Exhibit B attached
hereto, and all additional shares issued to such holders as Merger Consideration
shall be subject to a restriction on transfer of such shares for the Lock-Up
Period, and each certificate representing such shares shall bear a restrictive
legend substantially as set forth on Exhibit A attached hereto. Separate stock
certificates shall be issued representing the shares of Merger Consideration
subject to either the Initial Lock-Up Period or the Lock-Up Period."
Section 2.1(j) of the Agreement shall be deleted in its entirety and
replaced with the following:
"In accordance with and pursuant to a Registration Rights Agreement (the
"Registration Rights Agreement") substantially in the form attached hereto as
Exhibit A and Section 6.1(a) of this Agreement, Parent (x) shall file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), to register up to 30,000 shares of Common Stock issued to
each Company shareholder as Merger Consideration as soon as practicable after a
Qualified Financing but no later than 150 days following the Effective Time, and
(y) shall use Parent's commercially reasonable best efforts thereafter to cause
such registration statement to be declared effective by
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the Securities and Exchange Commission ("SEC") as soon as practicable on or
after the 180th day following the Effective Time. The parties to this Agreement
acknowledge and agree that Parent has agreed to furnish corresponding
registration rights to Parent's existing shareholders who do not have
freely-trading shares. All shares of Parent Common Stock issued as Merger
Consideration shall be subject to a lock-up period restricting transfer of such
shares for a period of 12 months after the Closing Date (the "Lock-Up Period")
and each certificate representing such shares shall bear a restrictive legend
reflecting such lock-up arrangement substantially as set forth on Exhibit B
attached hereto. Notwithstanding the foregoing, the lock-up arrangement shall
end as to any shares covered by the registration statement to be filed by Parent
pursuant to this Paragraph simultaneously with such shares being sold by the
holder thereof pursuant to such registration statement after that registration
statement has been declared effective by the SEC. Upon termination of this
lock-up arrangement with respect to any shares, the holder thereof may submit
the certificate evidencing the same to Parent and Parent shall cause the
restrictive legend to be removed from such certificate in respect of that number
of shares and shall instruct Parent's transfer agent to remove such restriction
in such transfer agent's records."
ARTICLE 14. Section 2.1(1)(i) (AGGREGATE MERGER CONSIDERATION) of the
Agreement shall be amended by deleting the reference to "233,807 shares of
Parent Common Stock" in subsection (d) thereof and substituting therefor
"234,171 shares of Parent Common Stock".
ARTICLE 15. Section 2.6(c) (STOCK OPTIONS) is hereby amended by striking
therefrom the terms "the Securities and Exchange Commission ("SEC")" and
substituting therefor the term "the SEC".
ARTICLE 16. Section 2.7(c) (WARRANTS) of the Agreement presently reads as
follows:
"The Merger Consideration allocated to the Company Warrants shall be
reserved for issuance out of the Common Stock Merger Consideration by Parent for
issuance upon exercise in full of all Company Warrants after the Effective Time
and shall register such Parent Common Stock reserved for issuance upon the
exercise of the Company Warrants on the Form S-4. Notwithstanding the foregoing,
upon the expiration of the Company Warrants, such Parent Common Stock reserved
for issuance upon the exercise of the Company Warrants shall no longer be
reserved and shall be released as treasury stock to Parent."
Section 2.7(c) of the Agreement shall be amended by deleting from the
first sentence thereof the words "and shall register such Parent Common Stock
reserved for issuance upon the exercise of the Company Warrants on the Form
S-4."
ARTICLE 17. Section 2.10 (ISSUANCE OF RESTRICTED SHARES) of the Agreement
presently reads as follows:
"Any shares of Parent Common Stock issued upon exercise of any Company
Stock Option or Company Warrant, or upon conversion of any Company Convertible
Promissory Note, after the Effective Time shall be issued as "restricted
securities," as defined in the Securities Act, unless such shares have been
registered by Parent under the Securities Act in a registration statement filed
with, and declared effective by, the SEC after the Effective Time."
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Section 2.10 shall be deleted in its entirety and replaced with the
following:
"All shares of Parent Common Stock issued as Merger Consideration,
including, without limitation, any shares of Parent Common Stock issued upon
exercise of any Company Stock Option or Company Warrant, or upon conversion of
any Company Convertible Promissory Note, shall be issued as "restricted
securities," as defined under the Securities Act, and shall be subject to
transfer restrictions under each of Rule 145 and Rule 144 under the Securities
Act and, therefore, may not be sold, transferred or otherwise disposed of except
pursuant to an effective registration statement under, or in accordance with an
available exemption from the registration and prospectus delivery requirements
of, the Securities Act, and the certificates evidencing such shares of Parent
Common Stock or other Parent securities, if applicable, shall bear appropriate
restrictive legends and stop transfer orders shall be maintained by the Parent's
transfer agent in respect of such shares until such time as such shares are so
registered."
ARTICLE 18. Section 3.12(b) (LABOR MATTERS) of the Agreement presently
reads as follows:
Section 3.12(b) of the Company Disclosure Schedule lists the name,
title, date of employment and compensation (whether cash or otherwise, including
such items as options) of each current officer and director of the Company or
any of its subsidiaries, and each current salaried employee of the Company or
any of its subsidiaries. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and thereby will not (i)
result in any payment (including severance, unemployment compensation, tax
gross-up, bonus or otherwise) becoming due to any current or former director,
employee or independent contractor of the Company or any of its subsidiaries,
from the Company or any of its subsidiaries under any Employee Plan or
otherwise, (ii) materially increase any benefits otherwise payable under any
Employee Plan or otherwise, or (iii) result in the acceleration of the time of
payment, exercise or vesting of any such benefits.
Subsection (iii) of the second sentence of Section 3.12(b) shall be
amended by adding at the end of such clause the words "other than the vesting of
the Company Stock Options at the Effective Time."
ARTICLE 19. Section 3.24 (ACCURACY OF INFORMATION) of the Agreement
presently reads as follows:
"To the knowledge of the Company, neither this Agreement, the Company
Disclosure Schedule nor any other document, schedule, exhibit, certificate or
instrument provided by the Company or any of the Company's subsidiaries or any
of their respective employees or agents to Parent in connection with the
transactions contemplated hereby contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained
therein, not misleading. None of the information supplied or to be supplied by
the Company in writing specifically for inclusion or incorporation by reference
in (i) the Form S-4 will, at the time the Form S-4 becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, not misleading or (ii) the Proxy/Information Statement will,
at the date it is first mailed to the Company's shareholders and at the time of
the Company Shareholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading, except that no representation or warranty
is made by the Company with respect to statements made based on information
supplied by Parent specifically for inclusion or incorporation by reference in
the Form S-4 or Proxy/Information Statement."
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Section 3.24 shall be deleted in its entirety and replaced with the
following:
"To the knowledge of the Company, neither this Agreement, the Company
Disclosure Schedule nor any other document, schedule, exhibit, certificate or
instrument provided by the Company or any of the Company's subsidiaries or any
of their respective employees or agents to Parent or to the Company's
shareholders in connection with the transactions contemplated hereby, including,
without limitation, the Company's Proxy Statement prepared by the Company and
delivered to the Company's shareholders, or the information concerning the
Company, its business, its properties, its condition (financial or otherwise),
its plans and its prospects which has been included in Parent's Private
Placement Memorandum, contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements contained therein, in
light of the circumstances under which they are made, not misleading. The
Company specifically acknowledges that the foregoing representation shall be
true in respect of the Company's Proxy Statement prepared by the Company and the
aforesaid information included in Parent's Private Placement Memorandum,
respectively, at the date of such Proxy Statement and such Private Placement
Memorandum, and at all times thereafter through the Effective Date. The Company
makes no representation whatsoever as to any other information in Parent's
Private Placement Memorandum."
ARTICLE 20. Section 4.3(a) (CAPITAL STRUCTURE) of the Agreement presently
reads as follows:
"The authorized capital stock of Parent consists of 100,000,000 shares of
common stock, $0.001 par value (the "Parent Common Stock"), and 25,000,000
shares of preferred stock, par value $0.001 per share, of Parent ("Parent
Authorized Preferred Stock"). As of the date hereof: (i) 28,704,861 shares of
Parent Common Stock were issued and outstanding; (ii) no (0) shares of Parent
Common Stock were held by Parent in its treasury; (iii) no (0) shares of Parent
Common Stock were held by subsidiaries of Parent; (iv) approximately 8,680,000
shares of Parent Common Stock were reserved for issuance pursuant to the
stock-based plans identified in Section 4.3 of the Parent Disclosure Schedule
(such plans, collectively, the "Parent Stock Plans"), of which approximately no
(0) shares are subject to outstanding employee stock options or other rights to
purchase or receive Parent Common Stock granted under the Parent Stock Plans
(collectively, "Parent Employee Stock Options"); and (v) 7,637,500 shares of
Parent Common Stock are reserved for issuance pursuant to convertible securities
or warrants (including 5,500,000 warrants at $1.50 heretofore issued to
Bioaccelerate, Inc. and 1,500,000 warrants at $3.00 to be issued to
Bioaccelerate in consideration of the $4,000,000 bridge financing heretofore
agreed among the parties, and 637,500 shares reserved for issuance in respect of
contingent obligations)."
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Section 4.3(a) shall be deleted in its entirety and replaced with the
following:
"The authorized capital stock of Parent consists of 100,000,000 shares of
common stock, $0.001 par value (the "Parent Common Stock"), and 25,000,000
shares of preferred stock, par value $0.001 per share, of Parent ("Parent
Authorized Preferred Stock"). As of the date hereof: (i) 29,172,833 shares of
Parent Common Stock were issued and outstanding; (ii) no (0) shares of Parent
Common Stock were held by Parent in its treasury; (iii) no (0) shares of Parent
Common Stock were held by subsidiaries of Parent; (iv) approximately 8,680,000
shares of Parent Common Stock were reserved for issuance pursuant to the
stock-based plans identified in Section 4.3 of the Parent Disclosure Schedule
(such plans, collectively, the "Parent Stock Plans"), of which approximately no
(0) shares are subject to outstanding employee stock options or other rights to
purchase or receive Parent Common Stock granted under the Parent Stock Plans
(collectively, "Parent Employee Stock Options"); and (v) 7,258,618 shares of
Parent Common Stock are reserved for issuance pursuant to convertible securities
or warrants (including 5,500,000 warrants at $1.50 heretofore issued to
Bioaccelerate, Inc. and 1,500,000 warrants at $3.00 to be issued to
Bioaccelerate in consideration of the $4,000,000 bridge financing heretofore
agreed among the parties, and 258,618 shares reserved for issuance in respect of
contingent obligations)."
ARTICLE 21. Section 4.22 (ACCURACY OF INFORMATION) of the Agreement
presently reads as follows:
"To the knowledge of Parent, neither this Agreement, the Parent Disclosure
Schedule nor any other document, schedule, exhibit, certificate or instrument
provided by the Parent, any of the Parent's subsidiaries, Merger Sub or any of
their respective employees or agents to the Company in connection with the
transactions contemplated hereby contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained
therein, not misleading. None of the information supplied or to be supplied by
Parent specifically for inclusion or incorporation by reference in (i) the Form
S-4 will, at the time the Form S-4 becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) the Proxy/Information Statement will, at the date it is
first mailed to the Company's shareholders and at the time of the Company
Shareholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading, in either case, no representation or warranty is made by
Parent with respect to statements made or incorporated by reference therein
based on information supplied by the Company specifically for inclusion or
incorporation by reference in the Form S-4 or Proxy/Information Statement. The
Form S-4 will comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations thereunder."
Section 4.22 shall be deleted in its entirety and replaced with the
following:
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"To the knowledge of Parent, neither this Agreement, the Parent Disclosure
Schedule nor any other document, schedule, exhibit, certificate or instrument
provided by the Parent, any of the Parent's subsidiaries, Merger Sub or any of
their respective employees or agents to the Company or to the Company's
shareholders in connection with the transactions contemplated hereby including,
without limitation, Parent's Private Placement Memorandum, contains an untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained therein, in light of the circumstances under which they
are made, not misleading. Parent specifically acknowledges that the foregoing
shall be true in respect of Parent's Private Placement Memorandum at the date of
such Private Placement Memorandum and at all times thereafter through the
Effective Date. Notwithstanding the foregoing, Parent makes no representation
with respect to information in the Private Placement Memorandum concerning the
Company, its business, its properties, its condition (financial or otherwise),
its plans and its prospects insofar as such information was furnished to Parent
by the Company and Parent has relied upon the accuracy of such information
furnished by the Company."
ARTICLE 22. Section 5.4 (CONDUCT OF BUSINESS BY PARENT) of the Agreement
is amended by addition of the following at the end of the Section:
"In addition, notwithstanding the foregoing, and anything to the contrary
in this Agreement, the parties acknowledge and agree that Parent may amend its
bylaws as necessary or appropriate by resolution of its Board of Directors (x)
to ratify the number of directors constituting Parent's Board of Directors, (y)
to increase the number of directors constituting Parent's Board of Directors in
order that the number of directors constituting Parent's Board of Directors
shall be four (4) directors thereafter up until the Effective Time, and (z) to
increase the number of directors constituting Parent's Board of Directors as of
the Effective Time in order that the number of directors constituting Parent's
Board of Directors shall be seven (7) directors as of the Effective Time. In
addition, Parent's Board of Directors may fill the vacancies so created in
accordance with Section 6.9 of this Agreement. Each of the foregoing actions
shall constitute a "Permitted Parent Action", and no such Permitted Parent
Action shall be deemed to breach any Parent representation, warranty, covenant
or agreement in this Agreement."
ARTICLE 23. Section 6.1 (PREPARATION OF THE FORM S-4, PROXY/INFORMATION
STATEMENT) of the Agreement presently reads as follows:
"SECTION 6.5 PREPARATION OF THE FORM S-4, PROXY/INFORMATION STATEMENT .
(A) As promptly as practicable following the date of this Agreement, Parent
shall prepare and file with the SEC (and the Company shall cooperate and
participate in the preparation of) a Registration Statement on Form S-4 (the
"Form S-4"), in which an information statement (the "Proxy/Information
Statement") shall be included as a prospectus and in which a resale prospectus
(the "Resale Prospectus") shall be included for the purpose of permitting the
Parent Common Stock issued to those affiliates of the Company identified in
Section 6.10 of the Company Disclosure Schedule to be resold by such affiliates
as provided in the last sentence of this Section 6.1(a), subject to the Initial
Lock-Up Period and the Lock-Up Period.). Each of Parent and the Company shall
use their reasonable best efforts to have the Form S-4 and the Resale Prospectus
declared effective under the Securities Act and the Proxy/Information Statement
"cleared" by the SEC's staff for mailing in connection with the Company
Shareholder Meeting as promptly as practicable after such filing. As promptly as
practicable after the Form S-4 is declared effective, the Company shall cause
the Proxy/Information Statement to be mailed to its shareholders. In the event
that the Resale Prospectus has not remained in effect, Parent shall file, with
the SEC, no later than one (1) year after the Effective Date, a registration
statement under the Securities Act and a resale prospectus covering all shares
subject to the Resale Prospectus and those shares held by affiliates of the
Parent.
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(B) The Company and Parent shall cooperate with one another (i) in
connection with the preparation of the Proxy/Information Statement and the Form
S-4, (ii) in determining whether any other action by or in respect of, or filing
with, any governmental body, agency or official, or authority or any actions,
consents, approvals or waivers are required to be obtained from parties to any
leases and other material contracts in connection with the consummation of the
Merger, and (iii) in seeking any such actions, consents, approvals or waivers or
making any such filings, furnishing information required in connection therewith
or with the Proxy/Information Statement or the Form S-4 and seeking timely to
obtain any such actions, consents, approvals or waivers.
(C) Parent shall use its commercially reasonable efforts to obtain consent
from its shareholders for all other actions contemplated herein which require
the consent of the shareholders of Parent, including without limitation the
actions set forth in Section 6.9.
(D) The Company shall furnish to Parent and to Parent's independent
certified public accountants such workpapers and supporting documentation, as
well as such consents by the Company's independent public certified accountants,
as Parent or Parent's independent certified public accountants may reasonably
require in order to include the Company's financial statements and the related
reports of Company's independent certified public accountants in Parent's filing
with the SEC on Form S-4 or any other filing required to be made by Parent with
the SEC.
(E) On or prior to the filing of Parent's registration statement on Form
S-4 contemplated by this Agreement, the Company shall have furnished or arranged
to be furnished to Parent and to Parent's independent certified public
accountants such Company financial statements, audited and unaudited (including,
without limitation, the Company Financial Statements and financial statements
for such additional periods as may be required under applicable laws and
regulations), workpapers and supporting documentation, as well as such consents
by the Company's independent public certified accountants, as are Parent or
Parent's independent certified public accountants shall have reasonably
requested or may reasonably require in order to include the Company financial
statements and the related reports of Company's independent certified public
accountants, in satisfaction of all applicable SEC rules and regulations, in
Parent's registration statement on Form S-4 to be filed with the SEC as
contemplated by this Agreement and rely upon the same. The Company's financial
statements included in the Form S-4 shall, at the time of filing of the Form
S-4, satisfy the relevant SEC financial reporting and filing requirements.
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(F) On or prior to the Effective Time, the Company shall have furnished or
arranged to be furnished to Parent and to Parent's independent certified public
accountants such workpapers and supporting documentation, as well as such
consents by the Company's independent public certified accountants, as are
Parent or Parent's independent certified public accountants shall have
reasonably requested or may reasonably require in order to include the Company
financial statements and the related reports of Company's independent certified
public accountants, in satisfaction of all applicable SEC rules and regulations,
in Parent's registration statement on Form S-4 as the same shall have been
amended, if at all, by Parent and as the Parent same shall have requested
acceleration of effectiveness by the SEC as contemplated by this Agreement, and
rely upon the same. The Company's financial statements included in the Form S-4
shall, at the time of effectiveness of the Form S-4, satisfy the relevant SEC
financial reporting and filing requirements.
(G) On or prior to the Effective Time, and in any event, as required prior
to such date in connection with any filings or disclosures Parent may deem
necessary to make under applicable securities laws, the Company will furnish to
Parent and to Parent's independent certified public accountants such financial
statements, and such workpapers and supporting documentation, as well as such
consents by the Company's independent public certified accountants, as Parent or
Parent's independent certified public accountants have reasonably requested or
may reasonably require in order to include the Company Financial Statements and
the related reports of Company's independent certified public accountants in
Parent's filing with the SEC on Form 8-K covering this Agreement or in other
disclosures or filings that Parent may deem it necessary to make under
applicable securities laws, and rely upon the same."
Section 6.1 of the Agreement shall be deleted in its entirety and replaced
with the following:
"SECTION 6.1 Preparation of the Proxy Statement and Preparation of
the Private Placement Memorandum.
(A) Following the date of this Agreement, the Company shall prepare
the Proxy Statement (the "Proxy Statement") which shall be mailed by the Company
to the Company's security holders in connection with the Company Shareholder
Meeting as promptly as practicable upon completion. In addition, following the
date of this Agreement, Parent shall prepare the Private Placement Memorandum
(the "PPM") of Parent covering the Parent securities to be issued in connection
with the Merger, and which also shall be delivered to the Company's security
holders.
(B) The Company and Parent shall cooperate with one another (i) in
connection with the preparation of the Proxy Statement and the PPM, (ii) in
determining whether any filings are required under federal and state securities
laws, (iii) in determining whether any
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other action by or in respect of, or filing with, any governmental body, agency
or official, or authority or any actions, consents, approvals or waivers are
required to be obtained from parties to any leases and other material contracts
in connection with the consummation of the Merger, and (iv) in seeking any such
actions, consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith or with the Proxy Statement and the
PPM and seeking timely to obtain any such actions, consents, approvals or
waivers.
(C) Parent shall use its commercially reasonable efforts to obtain
consent from its shareholders for all other actions contemplated herein which
require the consent of the shareholders of Parent, including without limitation
the actions set forth in Section 6.9.
(D) The Company shall furnish to Parent and to Parent's independent
certified public accountants such workpapers and supporting documentation, as
well as such consents by the Company's independent public certified accountants,
as Parent or Parent's independent certified public accountants may reasonably
require in order to include the Company's financial statements and the related
reports of Company's independent certified public accountants in any filing
required to be made by Parent with the SEC as a result of the Merger.
(E) On or prior to the Effective Time, and in any event, as required
on prior to such date in connection with any filings or disclosures Parent may
deem necessary to make under applicable securities laws as a result of the
Merger, including without limitation any Current Report on Form 8-K to be filed
after the Merger with respect to the consummation of the Merger, the Company
will furnish to Parent and to Parent's independent certified public accountants
such financial statements, and such workpapers and supporting documentation, as
well as such consents by the Company's independent public certified accountants,
as Parent or Parent's independent certified public accountants have reasonably
requested or may reasonably require in order to include the Company Financial
Statements and the related reports of Company's independent certified public
accountants in Parent's filings with the SEC on Form 8-K covering this Agreement
or the consummation of the Merger or in other disclosures or filings that Parent
may deem it necessary to make under applicable securities laws, and rely upon
the same.
ARTICLE 24. Section 6.2 (SHAREHOLDERS' MEETING) of the Agreement presently
reads as follows:
"The Company shall cause a meeting of its shareholders (the "Company
Shareholders Meeting") to be duly called and held within 30 days following the
effective date of the Form S-4 for the purpose of voting on the adoption of this
Agreement."
Section 6.2 of the Agreement shall be deleted in its entirety and replaced
with the following:
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"The Company shall cause a meeting of its shareholders (the "Company
Shareholders Meeting") to be duly called and held by December 13, 2004 for the
purpose of voting on the adoption of this Agreement."
ARTICLE 25. Section 6.3 (LETTERS OF COMPANY'S ACCOUNTANTS) of the
Agreement shall be deleted in its entirety and replaced with the following:
"SECTION 6.3 INTENTIONALLY DELETED."
ARTICLE 26. Section 6.7 (FEES AND EXPENSES) of this Agreement presently
reads as follows:
"All costs, fees and expenses incurred in connection with the Merger, this
Agreement (including all instruments and agreements prepared and delivered in
connection herewith), and the transactions contemplated by this Agreement shall
be paid by the party incurring such fees or expenses; provided that, the Company
shall cause all of its fees and expenses to be paid prior to the Merger, and
shall cause it's principal creditors (including, without limitation, its
investment bankers, attorneys and accountants) in respect of transaction costs
to confirm to Parent immediately prior to the Effective Time that all such fees
and expenses are paid and none are unbilled. In further explication of the
preceding sentence, but without limiting the same, all costs, fees and expenses
(including, but not limited to, legal and accounting fees) incurred by the
Company in connection with the Proxy/Information Statement shall be paid by the
Company; provided, that the parties acknowledge and agree that the Parent shall
take the lead in preparing the Form S-4, and the Parent shall pay its legal and
accounting expenses in connection with the Form S-4 and the Resale Prospectus."
The second sentence of Section 6.7 of the Agreement shall be deleted in
its entirety and replaced with the following:
"In further explication of the preceding sentence, but without limiting
the same, all costs, fees and expenses (including, but not limited to, legal and
accounting fees) incurred by the Company in connection with the Proxy Statement
and the PPM shall be paid by the Company, and the Company shall take the lead in
preparing the Proxy Statement, provided, that the parties acknowledge and agree
that Parent shall take the lead in preparing the PPM, and Parent shall pay the
legal and accounting expenses that Parent incurs in connection with the PPM and
the Proxy Statement."
ARTICLE 27. Section 6.9(b) (CORPORATE GOVERNANCE OF PARENT) presently
reads as follows:
"At the Effective Time, (i) Parent's directors not continued in office as
hereinafter provided shall resign, (ii) the board shall be increased from five
to seven directors, and (iii) the seven seats initially shall be filled by vote
of the Parent's directors continuing in office to fill the vacancies so created,
as follows: the Chairman and CEO shall be ▇▇▇▇▇▇▇▇▇▇▇ Every, three directors (at
least two (2) of whom shall be independent) shall be appointed by Parent with
the consent of Company, not to be unreasonably withheld, and three directors (at
least two (2) of whom shall be independent) shall be appointed by the Company
with the consent of Parent, not to be unreasonably withheld, to serve in
accordance with Parent's articles of incorporation and by-laws."
-12-
Section 6.9(b) of the Agreement shall be deleted in its entirety and
replaced as follows:
"At the Effective Time, if it has not already done so, Parent shall take
such actions, to cause the number of directors comprising the Parent's Board of
Directors to be increased to seven (7) directors effective as of the Effective
Time. Of the individuals comprising those seven (7) directors as of the
Effective Time, (i) one of the directors of Parent shall be ▇▇▇▇▇▇▇▇▇▇▇ Every,
the Chairman and CEO, (ii) three (3) of those directors shall be such
individuals as shall have been elected by Parent's shareholders or by Parent's
Board of Directors to fill vacancies created on Parent's Board of Directors,
provided that at least two (2) of such three (3) shall be independent, and (iii)
three directors (at least two (2) of whom shall be independent) shall be
nominees designated by the Company's Board of Directors prior to the Effective
Time and appointed by Parent's Board of Directors to fill vacancies on Parent's
Board of Directors effective as of the Effective Time. All such directors shall
serve in accordance with Parent's articles of incorporation and by-laws."
ARTICLE 28. Section 6.10 (AGREEMENTS WITH HOLDERS OF COMPANY SECURITIES)
presently reads as follows:
"AGREEMENTS WITH HOLDERS OF COMPANY SECURITIES. The Company shall use its
reasonable best efforts to obtain and deliver to Parent not later than 30 days
after the date hereof a written agreement, reasonably acceptable to Parent in
form and in substance, of all persons who are (or may deemed to be) "affiliates"
of the Company for purposes of Rule 145 under the Securities Act (each of whom
shall be so identified in Section 6.10 of the Company Disclosure Schedule).
Notwithstanding any other provision of this Agreement, any person whatsoever who
shall not have executed and delivered to Parent a written agreement reasonably
acceptable to Parent in form and substance as provided in this Section 6.10
shall not be entitled to have the Merger Consideration issued in the Merger to
such person covered by (and shall not be entitled to be included as a "selling
stockholder" in) the Resale Prospectus. The written agreement shall include,
without limitation, provisions setting forth the restrictions under the Initial
Lock-Up Period and the Lock-Up Period, customary stockholder information for
inclusion of shares in the Resale Prospectus, and customary agreements and
indemnifications by such stockholders in connection with the Resale Prospectus.
Promptly after the expiration of such 30-day period, the Company shall cause to
be delivered to each affiliate that shall not so execute such written agreement
as provided in this Section 6.10 a statement disclosing that the shares of
Parent Common Stock or other Merger Consideration (including, without
limitation, securities issuable to holders of Company Options, Company Warrants,
and Company Convertible Promissory Notes) to be issued to such person are
subject to transfer restrictions under each of Rule 145 and Rule 144 under the
Securities Act and, therefore, may not be sold, transferred or otherwise
disposed of except pursuant to an effective registration statement under, or in
accordance with an available exemption from the registration and prospectus
delivery requirements of, the Securities Act, and that the certificates
evidencing such shares of Parent Common Stock or other Parent securities, if
applicable, shall bear appropriate restrictive legends and stop transfer orders
shall be maintained by the Parent's transfer agent in respect of such shares."
-13-
Section 6.10 shall be deleted in its entirety and replaced with the
following:
"AGREEMENTS WITH HOLDERS OF COMPANY SECURITIES. The Company shall use its
reasonable best efforts to obtain and deliver to Parent not later than 30 days
after the date hereof a written agreement, reasonably acceptable to Parent in
form and in substance, of all persons who are (or may deemed to be) "affiliates"
of the Company for purposes of Rule 145 under the Securities Act (each of whom
shall be so identified in Section 6.10 of the Company Disclosure Schedule).
Promptly after the expiration of such 30-day period, the Company shall cause to
be delivered to each affiliate that shall not so execute such written agreement
as provided in this Section 6.10 a statement disclosing that the shares of
Parent Common Stock or other Merger Consideration (including, without
limitation, securities issuable to holders of Company Options, Company Warrants,
and Company Convertible Promissory Notes) to be issued to such person are
subject to transfer restrictions under each of Rule 145 and Rule 144 under the
Securities Act and, therefore, may not be sold, transferred or otherwise
disposed of except pursuant to an effective registration statement under, or in
accordance with an available exemption from the registration and prospectus
delivery requirements of, the Securities Act, and that the certificates
evidencing such shares of Parent Common Stock or other Parent securities, if
applicable, shall bear appropriate restrictive legends and stop transfer orders
shall be maintained by the Parent's transfer agent in respect of such shares."
ARTICLE 29. Section 6.16(a) (CONTINGENT FEE SHARES) of the Agreement shall
be amended by deleting the reference to "233,807 shares of Parent Common Stock"
and substituting therefor "234,171 shares of Parent Common Stock".
ARTICLE 30. A new Section 6.17 (APPLICATION TO LIST MERGER CONSIDERATION
SHARES ON THE AMERICAN STOCK EXCHANGE) shall be added to the Agreement as
follows:
"SECTION 6.17 APPLICATION TO LIST MERGER CONSIDERATION SHARES ON THE
AMERICAN STOCK EXCHANGE. Parent will use its commercially reasonable best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable in order to effectuate the
listing of the shares of Common Stock constituting the Merger Consideration on
the American Stock Exchange as soon as practicable after the Effective Time of
the Merger; provided that the foregoing shall not require Parent to take any
action or agree to any condition or incur any expense or liability that might,
in the reasonable judgment of Parent, have a material adverse effect on Parent
or its shareholders, or that, in the reasonable exercise of the fiduciary
responsibilities of Parent's Board of Directors (as constituted subsequent to
the Merger), is deemed by them to not be in the best interests of Parent or its
shareholders."
ARTICLE 31. A new Section 6.18 (REGISTRATION OF PARENT OUTSTANDING
WARRANTS) shall be added to the Agreement as follows:
-14-
"SECTION 6.18. REGISTRATION OF PARENT OUTSTANDING WARRANTS. (a) With
respect to the shares of Parent Common Stock issuable upon the exercise by
Bioaccelerate, Inc. of warrants to purchase Parent Common Stock issued to
Bioaccelerate, Inc. prior to the date hereof, Parent shall file, no later than
180 days after the Effective Time, with the SEC a registration statement
registering the shares of Parent Common Stock underlying such warrants. Parent
will use its best efforts to have such registration statement become and remain
continuously effective under the Securities Act and, if the Company is then
listed on a national stock exchange, file with such exchange a listing
application and use its best efforts to have such shares admitted to trading
thereon upon exercise of such warrants.
(b) Prior to the Effective Time, Parent shall obtain and deliver to
Company a written agreement, reasonably satisfactory to Company in form and
substance, from Bioaccelerate, Inc. agreeing that all shares of Parent Common
Stock received after the Effective Time upon exercise of warrants held by
Bioaccelerate, Inc., other than 1,500,000 shares of Parent Common Stock, will be
subject to the lock-up provisions set forth in Section 2.1(j) during the Lock-Up
Period."
ARTICLE 32. Section 7.1 (d) (CONDITIONS TO EACH PARTY'S OBLIGATION TO
EFFECT THE MERGER) which pertains to the Form S-4, shall be deleted in its
entirety and replaced with the following:
"(D) Registration Rights Agreement. The parties each shall have executed
and delivered to the other the Registration Rights Agreement substantially in
the form of Exhibit A to this Agreement."
ARTICLE 32. Section 7.1(e) (STOCK EXCHANGE LISTING) shall be deleted in
its entirety and replaced with the following:
"Parent shall have endeavored to cause the shares of Common Stock issuable
to the Company's shareholders pursuant to this Agreement to meet all
requirements for listing on the AMEX other than any requirement of a minimum
market price of Enhance's Common Stock, and shall have filed an application for
listing on the AMEX. However, the parties acknowledge and agree that Parent may
not have satisfied all such requirements prior to closing (including, without
limitation, election of sufficient independent directors and Board committee
members prior to the Effective Time), and satisfaction of all listing
requirements is not a condition of closing."
[Remainder of page intentionally left blank.]
-15-
IN WITNESS WHEREOF, Parent, the Company and Merger Sub have caused this
Amendment to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
ENHANCE BIOTECH, INC.
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ Every
--------------------------------
▇▇▇▇▇▇▇▇▇▇▇ Every
President and CEO
ARDENT ACQUISITION CORP.
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ Every
--------------------------------
▇▇▇▇▇▇▇▇▇▇▇ Every
President and CEO
ARDENT PHARMACEUTICALS, INC.
By /s/ Kwen-▇▇▇ ▇▇▇▇▇
--------------------------------
Kwen-▇▇▇ ▇▇▇▇▇
President and CEO
EXHIBIT B
LOCK-UP PERIOD LEGEND
The shares represented by this Certificate are subject to restrictions on
transfer until ___________, 2005 (one year from the date of the consummation of
the transactions contemplated by that certain Merger Agreement dated August 11,
2004, as amended (the "Merger Agreement"), among the Company, Ardent Acquisition
Corp., and Ardent Pharmaceuticals, Inc.) as set forth in Section 2.1(j) of the
Merger Agreement. Copies of the Merger Agreement are maintained and are
available for inspection at the principal office of the Company.
