Document:

Exhibit
10.27

 

AMENDMENT TO
RIGHTS AGREEMENT

 

This Amendment to Rights Agreement, dated as of
October 31, 2005 (the “Amendment”), is by and between Access
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and
American Stock Transfer & Trust Company, a New York corporation (the “Rights
Agent”), amending certain provisions of the Rights Agreement, dated as of
October 31, 2001 (as amended and in effect from time to time, the “Agreement”),
by and between the Company and the Rights Agent. Terms not otherwise defined
herein which are defined in the Agreement shall have the same respective
meanings herein as therein.

 

WHEREAS, in accordance with Section 28 of the
Agreement, the Company has directed prior to the Distribution Date that it and
the Rights Agent amend certain provisions of the Agreement as specifically set
forth in this Amendment.

 

NOW, THEREFORE, in consideration of the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1.             Amendment
to Agreement. The Agreement is hereby amended as follows:

 

(a)           The
defined term “Acquiring Person” in Section 1(a) of the Agreement is hereby
deleted in its entirety and replaced with the following:

 

“Acquiring Person” means any Person who,
together with all Affiliates and Associates of such Person, is the Beneficial
Owner of 15% or more of the Common Shares of the Company then outstanding or
who was such a Beneficial Owner at any time after the date hereof, whether or
not such Person continues to be the Beneficial Owner of 15% or more of the
Common Shares then outstanding, but will not include the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any Subsidiary
of the Company, or any entity holding securities of the Company organized,
appointed, or established by the Company or any Subsidiary for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, (i) Heartland, will
not be deemed to be an Acquiring Person so long as Heartland does not own, in
the aggregate, in excess of 20% of the issued and outstanding Common Shares,
(ii) Oracle will not be deemed to be an Acquiring Person so long as Oracle does
not own, in the aggregate, in excess of 35% of the issued and outstanding
Common Shares, and (iii) no Person will become an “Acquiring Person” solely as
the result of an acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the Common Shares of the
Company then outstanding, or in the case of Heartland or Oracle, to 20% or 35%,
respectively, or more of the Common Shares of the Company then outstanding; provided, however, that if a Person becomes the Beneficial
Owner of 15% or more, or in the case of Heartland or Oracle, 20% or 35%,
respectively, or more, of the

 

 

Common Shares of the
Company then outstanding by reason of share purchases by the Company, and after
such share purchases by the Company becomes the Beneficial Owner of any
additional Common Shares of the Company, then such Person will be deemed to be
an “Acquiring Person.”  Notwithstanding
the foregoing, if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an “Acquiring Person,” as defined
pursuant to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer be an “Acquiring
Person,” as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an “Acquiring Person” for any
purposes of this Rights Agreement.”

 

(b)           Section
3(a) of the Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(a)         Until
the earlier of:

 

(i)            the
close of business on the tenth Business Day after the Shares Acquisition Date;
or

 

(ii)           the
tenth Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant
to the terms of any such plan) to commence, a tender or exchange offer, the
consummation of which would result in any Person (other than Heartland or
Oracle) becoming the Beneficial Owner of Common Shares aggregating 15% or more
of the then outstanding Common Shares, or in the case of Heartland or Oracle,
the consummation of which would result in such Person becoming the Beneficial
Owner of Common Shares aggregating 20% or 35%, respectively, or more of the
then outstanding Common Shares;

 

(including any such date which is after the date of
this Agreement and prior to the issuance of the Rights; the earliest of such
dates being herein referred to as the “Distribution Date”):

 

(x)            no
Right may be exercised;

 

(y)           the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by
the certificates for Common Shares registered in the

 

2

 

names of the holders thereof (which certificates will
also be deemed to be certificates for Rights) and not by separate certificates;
and

 

(z)            the
Rights (and the right to receive certificates therefor) will be transferable
only in connection with the transfer of the underlying Common Shares.

 

As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and if requested, the Rights Agent
will send) by first-class, postage-prepaid mail or other appropriate means, to
each record holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a certificate for Rights, in substantially the form of the attached Exhibit
B (collectively, “Rights Certificates”), evidencing one Right for
each Common Share so held. As of and after the Distribution Date, the Rights
will be evidenced solely by Rights Certificates.”

 

(c)           The
second paragraph of Exhibit C of the Agreement is hereby deleted in its
entirety and replaced with the following:

 

“Initially, the Rights will be attached to all
certificates representing Common Shares then outstanding, and no separate
Rights certificates will be distributed. Until the earlier to occur of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an “Acquiring Person”) have acquired
beneficial ownership of 15% or more, or in the case of Heartland Advisors,
Inc., together with all of its affiliates and associates (“Heartland”),
or Oracle Partners LP, together with all of its affiliates and associates (“Oracle”),
20% or 35%, respectively, or more, of the outstanding Common Shares (the date
of such an announcement being a “Shares Acquisition Date”), or (ii) 10
business days (or such later date as may be determined by action of the Board
of Directors prior to such time as any Person becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group (other than Heartland or Oracle) 15%
or more, or in the case of Heartland or Oracle, 20% or 35%, respectively, or
more, of such outstanding Common Shares (in either case, (i) or (ii), the “Distribution
Date”), the Rights will be evidenced, with respect to any of the Common
Share certificates outstanding as of the Record Date, by such Common Share
certificates together with a copy of this Summary of Rights.”

 

2.             Condition
to Effectiveness. This Amendment shall not become effective until executed
by the Company and the Rights Agent.

 

3.             Ratification,
Etc. Except as expressly amended hereby, all terms and conditions of the
Agreement are hereby ratified and confirmed in all respects and shall continue
in full force and effect. The Agreement and this Amendment shall be read and

 

3

 

construed as a single
agreement. All references to the Agreement shall hereafter refer to the
Agreement, as amended hereby.

 

4.             No
Waiver. Nothing contained herein shall constitute a waiver of, impair or
otherwise affect, any obligation of the Company under the Agreement or any
rights of any party consequent thereon.

 

5.             Counterparts.
This Amendment may be executed in one or more counterparts, each of which shall
be deemed an original but which together shall constitute one and the same
instrument.

 

6.             Governing
Law. This amendment shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without reference to conflict of
laws).

 

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remainder of this page is left blank intentionally]

 

4

 

IN WITNESS
WHEREOF, the parties hereto have executed this Amendment as a document under
seal as of the date first above written.

 

	
   

  	
  ACCESS PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Stephen B. Thompson

  
	
   

  	
   

  	
  Name:  Stephen B. Thompson

  
	
   

  	
   

  	
  Title:  Vice President CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN STOCK TRANSFER &

  TRUST COMPANY, as Rights Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Herbert J. Lemmer

  
	
   

  	
  Name:  Herbert J. Lemmer

  
	
   

  	
  Title:  Vice PresidentExhibit
10.28

 

AMENDMENT TO 7.0%
(SUBJECT TO ADJUSTMENT) CONVERTIBLE

PROMISSORY NOTES DUE SEPTEMBER 13, 2005

 

This Amendment to 7.0% (Subject to Adjustment)
Convertible Promissory Notes Due September 13, 2005, dated as of November 3,
2005 (the “Amendment”), is by and among Access Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), and each of Oracle Partners LP,
Oracle Institutional Partners LP, SAM Oracle Investments Inc. and Oracle
Offshore Ltd. (each, a “Holder”), amending certain provisions of those
certain 7.0% (Subject to Adjustment) Convertible Promissory Notes Due September
13, 2005 No. R-1 (each as amended and in effect from time to time, a “Note”)
from the Company to each Holder in the original principal amount of $2,524,500,
$698,500, $660,000 and $132,000, respectively. Terms not otherwise defined
herein which are defined in any Note shall have the same respective meanings
herein as therein.

 

WHEREAS, the Company and each Holder have agreed to
modify certain terms and conditions of each Note as specifically set forth in
this Amendment.

 

NOW, THEREFORE, in consideration of the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:

 

1.             Amendment
to Each Note. Each Note is hereby amended as follows:

 

(a)           The
title of each Note is hereby deleted in its entirety and replaced with the
following:

 

“7.0% (Subject to Adjustment) Convertible Promissory
Note Due April 28, 2007.”

 

(b)           All
references to “September 13, 2005” in the preamble (the “Preamble”) of
each Note and the first sentence of Section 2(a) of each Note are hereby
deleted and replaced with “April 28, 2007.”

 

(c)           The
following text is hereby added following the word “annum” and before the word “provided”
in the first sentence of the Preamble:

 

“(and shall pay interest from September 13, 2006, or
from the most recent interest payment date to which interest has been paid or
duly provided for, on April 28, 2007).”

 

(d)           The
following text is hereby added following the words “September 1” and before the
word “(whether” in the second sentence of the Preamble:

 

“(and April 1 in the case of the interest payment due
on April 28, 2007).”

 

 

(e)           All
references to “$5,500” in each Note, including, without limitation, in the
first sentence of Section 1 of each Note, the first sentence of Section 2(a) of
each Note, the defined term “Conversion Price” in Section 2(j) of each Note and
the second sentence of Section 7(c) of each Note, are hereby deleted and
replaced with “$1,000.”

 

(f)            The
following text is hereby added as a new paragraph following the first paragraph
of Section 2(a) of each Note:

 

“Automatically and without further action, immediately
upon the Closing Price of the Company Stock exceeding 1.5 times the Conversion
Price for any period of 20 consecutive Trading Days, this Security (or any
portion of the principal amount hereof then outstanding) shall convert into
fully paid and nonassessable shares (calculated to the nearest 1/100 of a
share) of Common Stock of the Company at the rate of 1,000 shares of Common
Stock for each $1,000 principal amount of Security. Upon such conversion of
this Security (or any portion of the principal amount hereof then outstanding),
the holder of this Security shall surrender this Security, duly endorsed or
assigned to the Company or in blank to the Company at the Designated Office. Upon
surrender of this Security upon such conversion, the holder will be entitled to
receive the interest accruing on the principal amount of this Security then
being converted from the interest payment date next preceding the date of such
conversion to such date of conversion. No payment or adjustment is to be made
on conversion for dividends on the Common Stock issued on conversion hereof. No
fractions of shares or scrip representing fractions of shares will be issued on
conversion, but instead of any fractional interest, the Company shall pay a
cash adjustment, computed on the basis of the Closing Price of the Common Stock
on the date of conversion, or, at its option, the Company shall round up to the
next higher whole share.”

 

(g)           Sections
3(a) through (i) of each Note are hereby deleted in their entirety and replaced
with the following:

 

“3.           Conversion
Upon Change in Control. (a) In the event that a Change in Control (as
hereinafter defined) shall occur, then automatically and without further action
immediately prior to such Change in Control, this Security (or any portion of
the principal amount hereof then outstanding) shall convert into fully paid and
nonassessable shares (calculated to the nearest 1/100 of a share) of Common
Stock at the rate of 1,000 shares of Common Stock for each $1,000 principal
amount of Security. Upon such conversion of this Security (or any portion of
the principal amount hereof then outstanding), the holder of this Security
shall surrender this Security, duly endorsed or assigned to the Company or in
blank to the Company at the Designated Office. Upon surrender of this Security
upon such conversion, the holder will be entitled to receive the interest
accruing on the principal amount of this Security then being converted from the
interest payment date next preceding the date of such conversion to such date
of conversion. No payment or adjustment is to be made on conversion for
dividends on the

 

2

 

common stock issued on
conversion hereof. No fractions of shares or scrip representing fractions of
shares will be issued on conversion, but instead of any fractional interest,
the Company shall pay a cash adjustment, computed on the basis of the amount
payable per share of Common Stock upon such Change in Control, or, at its
option, the Company shall round up to the next higher whole share. Notwithstanding
the foregoing, this Security (or any portion of the principal amount hereof
then outstanding) shall not convert automatically under this Section 3(a) in
the event of a Change in Control in which the amount payable per share of
Common Stock is less than 1.5 times the Conversion Price unless,
immediately prior to the consummation of such Change in Control, the Company
pays to the holder of this Security, in cash or, subject to the fulfillment by
the Company of the conditions set forth in Section 3(b), by delivery of shares
of Common Stock, an amount such that the aggregate amount per share of Common
Stock payable to the holder of this Security in connection with such Change in
Control equals 1.5 times the Conversion Price. The Company agrees to give the
holder of this Security notice of any Change in Control, by facsimile
transmission confirmed in writing by overnight courier service, promptly and in
any event within two Trading Days of the occurrence thereof.

 

(b)           The
Company may elect to deliver shares of Common Stock in payment under Section
3(a), if and only if the following conditions have been satisfied:

 

(1)  Each share
of Common Stock deliverable as payment under Section 3(a) shall have a fair
market value as of the date of the consummation of the Change in Control (the “Change
in  Control  Closing  Date”) of not less than the sum
obtained by subtracting the amount payable per share of Common Stock
upon such Change in Control from the Conversion Price. For purposes of
this Section 3(b), the fair market value of a share of Common Stock shall be
equal to 95% of the average of the Closing Prices for the five consecutive
Trading Days ending on and including the third Trading Day immediately
preceding the Change in Control Closing Date;

 

(2)  In the event
any shares of Common Stock to be issued under Section 3(a) require registration
under any Federal securities law before such shares may be freely transferable
without being subject to any transfer restrictions under the Securities Act of
1933, as amended, upon issuance, such registration shall have been completed
and shall have become effective prior to the Change in Control Closing Date;

 

(3)  In the
event any shares of Common Stock to be issued under Section 3(a) require
registration with or approval of any governmental authority under any State law
or any other Federal law before such shares may be validly issued or delivered
upon repurchase, such registration shall have been completed, have become
effective and such approval shall have been obtained, in each case, prior to
the Change in Control Closing Date;

 

(4)  Immediately
prior to the Change in Control Closing Date the shares of Common Stock
deliverable as payment under Section 3(a) shall have been approved for trading
or listed on the American Stock Exchange or the principal national securities

 

3

 

exchange or interdealer
quotation system on which the Common Stock is then admitted to trading or
listed; and

 

(5)  All shares
of Common Stock deliverable as payment under Section 3(a) shall be issued out
of the Company’s authorized but unissued Common Stock and will, upon issue, be
duly and validly issued and fully paid and non-assessable and free of any
preemptive rights.

 

If all of the conditions set forth in this Section
3(b) are not satisfied in accordance with the terms thereof, the Company shall
pay the holder of this Security all amounts payable under Section 3(a) only in
cash.”

 

(h)           Section
3(j) of each Note is hereby re-numbered as Section 3(c).

 

2.             Condition
to Effectiveness. This Amendment shall not become effective until each
Holder receives a counterpart of this Amendment executed by the Company.

 

3.             Ratification,
Etc. Except as expressly amended hereby, all terms and conditions of each
Note are hereby ratified and confirmed in all respects and shall continue in
full force and effect. Each Note and this Amendment shall be read and construed
as a single agreement. All references to any Note shall hereafter refer to such
Note, as amended hereby.

 

4.             No
Waiver. Nothing contained herein shall constitute a waiver of, impair or
otherwise affect, any obligation of the Company under any Note or any rights of
any Holder consequent thereon.

 

5.             Counterparts.
This Amendment may be executed in one or more counterparts, each of which shall
be deemed an original but which together shall constitute one and the same
instrument.

 

6.             Governing
Law. This amendment shall be governed by, and construed in accordance
with, the laws of the State of Texas (without reference to conflict of laws).

 

[the
remainder of this page is left blank intentionally]

 

4

 

IN WITNESS
WHEREOF, the parties hereto have executed this Amendment as a document under
seal as of the date first above written.

 

	
   

  	
  Company:

  
	
   

  	
   

  
	
   

  	
  ACCESS PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Rosemary Mazanet

  	
   

  
	
   

  	
   

  	
  Name:  Rosemary Mazanet

  
	
   

  	
   

  	
  Title:  Acting CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Holders:

  
	
   

  	
   

  
	
   

  	
  ORACLE PARTNERS LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry Feinberg

  	
   

  
	
   

  	
   

  	
  Name: Larry Feinberg

  
	
   

  	
   

  	
  Title: Managing Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ORACLE
  INSTITUTIONAL PARTNERS

  LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry Feinberg

  	
   

  
	
   

  	
   

  	
  Name: Larry Feinberg

  
	
   

  	
  Title:

  	
  Managing Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SAM ORACLE
  INVESTMENTS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry Feinberg

  	
   

  
	
   

  	
   

  	
  Name: Larry Feinberg

  
	
   

  	
  Title:

  	
  Managing Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ORACLE OFFSHORE
  LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Larry Feinberg

  	
   

  
	
   

  	
   

  	
  Name: Larry Feinberg

  
	
   

  	
  Title:

  	
  Managing Partner

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