EXHIBIT 2(a.2)
FIRST AMENDMENT TO MERGER AGREEMENT
THIS FIRST AMENDMENT TO MERGER AGREEMENT (this "First Amendment") is made
on the 6th day of February, 2006, by and among DUSA Pharmaceuticals, Inc., a
publicly traded pharmaceutical company incorporated in the State of New Jersey,
with principal offices at 00 Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx ("DUSA"),
Sirius Laboratories, Inc., a privately held specialty pharmaceutical company
incorporated in the State of Illinois, with principal offices at 000 Xxxxxxx
Xxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxx ("Sirius"), and those shareholders of
Sirius set forth on the signature pages hereto (each a "Principal Shareholder"
and collectively the "Principal Shareholders"). DUSA, Sirius and the Principal
Shareholders are at times referred to each as a "Party" and collectively as the
"Parties." All capitalized terms used, but not specifically defined herein,
shall have the meaning provided for such terms in the Merger Agreement (as
defined below).
R E C I T A L S
WHEREAS, the Parties entered into that certain Merger Agreement, dated
December 30, 2005 (as the same may be amended from time to time, the "Merger
Agreement") whereby the Parties have agreed to effect a merger of Sirius with
and into a wholly-owned subsidiary of DUSA ("DUSA Sub"), resulting in DUSA Sub
being the surviving entity, the Sirius Shareholders receiving the consideration
provided for therein, and DUSA owning all of the issued and outstanding common
stock of DUSA Sub; and
WHEREAS, the Parties wish to amend certain terms of the Merger Agreement
in accordance with Section 15.8 of the Merger Agreement, as provided for herein.
NOW, THEREFORE, the Parties, in furtherance of the foregoing and for good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, intending to be legally bound, agree as follows:
1. The following is added as a new Section 1.50a:
1.50a "First Amendment" means the First Amendment to Merger
Agreement between the Parties dated February 6, 2006.
2. The following is added as a new Section 1.109a:
1.109a "Sirius Share Equivalents" means the interest in the
Consideration held by former holders of Sirius Options who elect to
cancel their Sirius Options in exchange for treatment (without the
need for any payment) as if such holders had exercised two-thirds
(2/3) of their Sirius Options for Sirius Shares. Holders of Sirius
Options who elect such treatment are not considered holders of
shares of Sirius common stock.
3. Sections 1.21, 1.22 and 1.23 are amended as follows:
(a) In Section 1.21, replace "Thirty Million Dollars
($30,000,000)" with "Twenty-Five Million Dollars ($25,000,000)."
(b) Delete Section 1.22 in its entirety and replace it with
the following: ""Dissenters Multiplier" means the total number of
Sirius Shares and Sirius Share Equivalents held by the Dissenting
Shareholders as of the Closing Date divided by the total number of
Sirius Shares on a fully diluted, as converted to common stock basis
plus all Sirius Share Equivalents as of the Closing Date."
(c) The following is added to the end of Section 1.23:
"including any Non-Participating Sirius Option Holders (For sake of
clarity, it is understood that the Non-Participating Sirius Option
Holders are not, as result of holding Sirius Options, stockholders
of Sirius, and the Dissenting Shareholders are not entitled to the
Consideration set forth herein)."
4. The first sentence of Section 1.47 is deleted and replaced with the
following:
""Fair Market Value" means for purposes of Section 2.2(c)(ii),
the average closing price of DUSA Shares on the NASDAQ Stock Market
for the last twenty (20) trading days of the month in which the
applicable milestone is achieved, which average closing price shall
be calculated by adding the closing price of DUSA Shares for each of
the twenty (20) designated days and dividing the sum by twenty (20);
and shall mean for purposes of Sections 2.2(b) and 2.5 the lesser of
(i) the average closing price of DUSA Shares on the NASDAQ Stock
Market for the twenty (20) trading days prior to the Closing Date,
which average closing price shall be calculated by adding the
closing price of DUSA Shares for each of the twenty (20) designated
days and dividing the sum by twenty (20), or (ii) Ten Dollars and
10/100 ($10.10)."
5. The following is added as a new Section 1.80a:
1.80 "Non-Participating Sirius Option Holders" means any
holders of Sirius Options who refuse or fail to participate in or
take part in the Transaction, except those holders of Sirius Options
who waive any and all rights under their Sirius Options, the
Transaction and the Merger Agreement by completing, executing and
delivering a waiver in a form and substance mutually acceptable to
the Parties, provided that DUSA's acceptance shall not be
unreasonably withheld or delayed."
6. The following is added to the end of Section 1.84: "including those
holders of Sirius Options who elect to cancel their Sirius Options in exchange
for Sirius Share Equivalents."
7. The following is added to the end of Section 2.2(a) and Section 2.2(b):
"In addition, Schedule 3.3(a) shall set forth the amount paid with respect to
Sirius Share Equivalents held by the Participating Shareholders. No amount shall
be paid under this Section 2.2(a) with respect to any Dissenting Shareholder."
8. Section 2.3 is amended by deleting "February" and replacing it with
"March."
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9. The following is added to the end of Section 2.4(b)(i): "(it being
understood that those Participating Shareholders who do not provide wire
instructions shall be mailed a check within five (5) Business Days of the
Closing Date);"
10. The third sentence of Section 2.6 is deleted and replaced with the
following:
"In addition, each other Sirius Shareholder receiving DUSA
Shares hereunder who also receives (as determined by Sirius in
advance of the Closing) the estimated 2006 revenue and loss ranges
for DUSA (following the consummation of the Transaction) shall agree
to be subject to a lock-up of such DUSA Shares until the earlier of
(i) the date on which DUSA releases its 2006 earnings to the public
(which is estimated to be in February 2007), or (ii) the date on
which such estimated 2006 revenue and loss ranges for DUSA
(following the consummation of the Transaction) is announced to the
public by DUSA or such information is deemed by DUSA in its
reasonable discretion (in which case it will so notify such
locked-up Sirius Shareholders) no longer Material to the business
and operations of DUSA and/or DUSA Sub."
11. The following is added to the end of Section 2.9(a): "The Dissenters
Escrow Agreement shall provide that, following the Closing, to the extent DUSA
provides consideration to a Non-Participating Sirius Option Holder upon the
exercise of, or in exchange for, a Sirius Option, including without limitation
XXXX'x xxxxx of a stock option to purchase shares of DUSA's common stock in
exchange for a Sirius Option, DUSA shall be entitled to receive from the Escrow
Agent the amount corresponding to the lesser of (i) the amount such
Non-Participating Sirius Option Holder is entitled to receive as a Dissenting
Shareholder, or (ii) the actual value of any cash or shares of DUSA common stock
issued by DUSA less any consideration received by DUSA by such Non-Participating
Sirius Option Holder."
12. The following is added to the end of Section 6.3(a)(i): "and (C) the
legal fees and expenses actually and reasonably incurred by Sirius in connection
with the preparation of the First Amendment and any Information Statement dated
after February 6, 2006; provided, further, that Sirius and its counsel shall
provide DUSA with a detailed accounting of all such legal fees and expenses."
13. Section 11.1(k) and Section 11.3 are revised by deleting "February"
and replacing it with "March."
14. All other terms and conditions of the Merger Agreement shall remain in
full force and effect. This First Amendment shall not constitute a waiver or
modification of any of the Parties' rights and remedies or of any of the terms,
conditions, warranties, representations, or covenants contained in the Merger
Agreement, except as specifically set forth above.
15. This First Amendment may be executed in counterparts, each of which,
when taken together, shall be deemed to be one and the same instrument.
[Signature Pages Follow.]
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IN WITNESS WHEREOF, the parties have executed and delivered this First
Amendment to Merger Agreement as of the date first written above.
SIRIUS LABORATORIES, INC.
By:/s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Vice Chairman
DUSA PHARMACEUTICALS, INC.
By:/s/ D. Xxxxxxxx Xxxxxxx
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Name: D. Xxxxxxxx Xxxxxxx, MD, FRCPC
Title: Chairman and Chief Executive Officer
THE SHAREHOLDERS
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx Ph.D.
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
/s/ Xxxx Xxxxxxxxx, M.D.
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Xxxx Xxxxxxxxx, M.D.
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
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/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Xx.
(Signature Page to First Amendment to
Merger Agreement Continued)
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
/s/ Keymoumars Xxxxxxx
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Xxxxxxxxx Xxxxxxx
For Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Power of attorney copy enclosed
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
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