Document:

EXHIBIT 10.2

Agreement and Plan Of Reorganization dated as of December 20, 2004 by and among
Secured Data, Inc., Northwest Bio-Technic Inc., and the shareholders of
Northwest Bio- Technic Inc.; and Convertible Promissory Note

                      AGREEMENT AND PLAN OF REORGANIZATION

                               Secured Data, Inc.
                                       and
                           Northwest Bio-Technic Inc.

      This Agreement and Plan of Reorganization ("Agreement"), dated as of
December 20, 2004, among Secured Data, Inc. (SCRE), a Nevada corporation,
Northwest Bio-Technic Inc. ("NBTI"), a British Virgin Islands corporation, and
the subscribing shareholders of Northwest Bio-Technic Inc. ("NBTI Shareholders")
who will join this Agreement by execution.

                              W I T N E S S E T H:

      A. WHEREAS, NBTI and SCRE are corporations duly organized under the laws
of the British Virgin Islands ("BVI") and the State of Nevada, respectively.

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      B. Plan of Reorganization. The subscribing NBTI Shareholders are the
owners of at least 100% of the issued and outstanding common stock of NBTI; and
NBTI solely owns directly the entire issued share capital of Huifeng
Biochemistry Joint Stock Company ("Huifeng"), which is a joint stock company
established under the laws of the People's Republic of China ("PRC") and
responsible for the production and sales of plant extracts, biochemical products
and pharmaceutical raw products in the PRC. It is the intention that 30% of the
issued and outstanding stock of NBTI shall be acquired by SCRE in exchange
solely for its voting stock at the Closing Date; and; subsequently, up to the
remaining 70% of the issued and outstanding stock of NBTI shall be acquired by
SCRE in exchange for a promissory note convertible into SCRE common stock.

      C. Exchange of Shares. SCRE and the subscribing NBTI Shareholders agree
that 30% of the 500,000 common shares issued and outstanding of NBTI shall be
exchanged with SCRE for 80,735,590 shares of the common stock of SCRE. The SCRE
shares, on the Closing Date, shall be delivered ratably divided to the
individual subscribing NBTI Shareholders (or their designees) in exchange for
their NBTI shares as hereinafter set forth. Further, SCRE and the subscribing
NBTI Shareholders agree that subsequently, and subject to certain conditions,
the remaining 70% of the 500,000 common shares issued and outstanding of NBTI
shall be exchanged with SCRE for the purchase price of $1,900,000 (the "Purchase
Price"), payable by the issuance by SCRE of a convertible promissory note, the
form of which is set forth in Exhibit A hereof (the "Convertible Note"). The
Convertible Note may be convertible into 10,465,725 shares of SCRE common stock,
subject to effecting a 1:18 reverse split of the common stock.

      NOW, THEREFORE, it is agreed among the parties as follows:

                                    ARTICLE I

                                The Consideration

      1.1 Subject to the conditions set forth herein on the "Effective Date" (as
herein defined), the subscribing Shareholders of NBTI ("NBTI Shareholders")
shall exchange 30% of their shares of NBTI (constituting at least 30% of the
issued and outstanding common stock of NBTI) for 80,735,590 shares of SCRE
common stock. The transactions contemplated by this Agreement shall be completed
at a closing ("Closing") on a closing date ("Closing Date") which shall be as
soon as practicable after joinder in this exchange by NBTI Shareholders holding
at least 30% of the outstanding NBTI common shares, except that such transaction
must be completed on or before ____, 2004, or this Agreement shall expire unless
extended in writing.

      On the Closing Date, all of the documents to be furnished to SCRE and
NBTI, including the documents to be furnished pursuant to Articles VII and X of
this Agreement, shall be delivered to Gary L. Blum, Esq., to be held in escrow
until the Effective Date or the date of termination of this Agreement, whichever
first occurs, and thereafter shall be promptly distributed to the parties as
their interests may appear.

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      1.2 At the Effective Date, NBTI's shareholders shall receive pro rata
shares of $0.001 par value SCRE common stock as follows:

            SCRE shall issue 80,735,590 of its shares of common stock, for 30%
            of the outstanding common shares of NBTI, to the subscribing
            shareholders of NBTI, ratably according to their interests.

      1.3   If this Agreement is duly executed by the holders of 30% of the
            outstanding common stock of NBTI, subject to the other provisions
            hereof, it shall become effective, and such date of final execution
            shall be the "Effective Date" of this Agreement.

      1.4   Provided the transaction described in paragraphs 1.2 and 1.3 above
            have been consummated, and the conditions described in the
            Convertible Note have been effected, SCRE shall, upon conversion of
            the entirety of the Convertible Note, issue 10,465,725 (post a 1:18
            reverse split) of its shares of common stock for the remaining 70%
            of the outstanding common shares of NBTI to the subscribing
            shareholders of NBTI, ratably according to their interests.

                                   ARTICLE II

                         Issuance and Exchange of Shares

      2.1 The 80,735,590 shares of $0.001 par value common stock of SCRE shall
be issued by it to the subscribing NBTI Shareholders at Closing.

      2.2 SCRE represents that no outstanding options or warrants for its
unissued shares exist.

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      2.3 The stock transfer books of NBTI shall be closed on the Effective
Date, and thereafter no transfers of the stock of NBTI shall be made (except
pursuant to the Convertible Note). NBTI shall appoint Gary L. Blum, Esq. as an
exchange agent ("Exchange Agent"), to accept surrender of the certificates
representing the common shares of NBTI, and to deliver in exchange for such
surrendered certificates, shares of common stock of SCRE. The authorization of
the Exchange Agent may be terminated by SCRE after six months following the
Effective Date.

      2.4 No fractional shares of SCRE stock shall be issued as a result of the
Agreement. Shares shall be rounded up to nearest whole share.

      2.5 At the Effective Date, each holder of a certificate or certificates
representing common shares of NBTI, upon presentation and surrender of such
certificate or certificates to the Exchange Agent, shall be entitled to receive
the consideration set forth herein, except that holders of those shares as to
which dissenters' rights shall have been validly asserted and perfected pursuant
to BVI law shall not be converted into shares of SCRE common stock, but shall
represent only such dissenters' rights. Upon such presentation, surrender, and
exchange as provided in this Section 2.5, certificates representing shares of
NBTI previously held shall be canceled. Until so presented and surrendered, each
certificate or certificates which represented issued and outstanding shares of
NBTI at the Effective Date shall be deemed for all purposes to evidence the
right to receive the consideration set forth in Section 1.2 of this Agreement.
If the certificates representing shares of NBTI have been lost, stolen,
mutilated or destroyed, the Exchange Agent shall require the submission of an
indemnity agreement and may require the submission of a bond in lieu of such
certificate.

                                   ARTICLE III

                           Representations, Warranties
                   and Covenants of Northwest Bio-Technic Inc.

      No representations or warranties are made by any director, officer,
employee or shareholder of NBTI as individuals, except as and to the extent
stated in this Agreement or in a separate written statement (the "NBTI
Disclosure Statement"), if any. NBTI hereby represents, warrants and covenants
to SCRE except as stated in the NBTI Disclosure Statement, as follows:

      3.1 NBTI is a corporation duly organized, validly existing and in good
standing under the laws of British Virgin Islands, and has the corporate power
and authority to own or lease its properties and to carry on its business as it
is now being conducted. NBTI solely owns directly the entire issued share
capital of Huifeng Biochemistry Joint Stock Company ("Huifeng"), which is a
joint stock company established under the laws of the People's Republic of China
("PRC") and responsible for the production and sales of plant extracts,
biochemical products and pharmaceutical raw products in the PRC. The Certificate
of Incorporation and Bylaws of NBTI are complete and accurate, and the minute
books of NBTI contain a record, which is complete and accurate in all material
respects, of all meetings, and all corporate actions of the shareholders and
board of directors of NBTI.

      3.2 The aggregate number of shares which NBTI is authorized to issue is
500,000 shares of common stock of which 500,000 shares are issued and
outstanding.

      3.3 NBTI has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.

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<PAGE>

      3.4 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated herein by
NBTI will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of NBTI.

      3.5 The execution, delivery and performance of this Agreement has been
duly authorized and approved by NBTI Board of Directors.

      3.6 There are no legal proceedings or regulatory proceedings involving
material claims pending, or to the knowledge of the executive officers of NBTI,
threatened against NBTI or affecting any of its assets or properties, and to the
knowledge of NBTI' officers, NBTI is not in any material breach or violation of
or default under any contract or instrument to which NBTI is a party, or under
its respective Articles of Incorporation or Bylaws, nor is there any court or
regulatory order pending, applicable to NBTI.

      3.7 The representations and warranties of NBTI shall be true and correct
as of the date hereof and as of the Effective Date.

      3.8 No representation or warranty by NBTI in this Agreement, the NBTI
Disclosure Statement or any certificate delivered pursuant hereto contains any
untrue statement of a material fact or omits to state any material fact
necessary to make such representation or warranty not misleading.

      3.9 To the knowledge of the executive officers of NBTI, all trade names,
inventions, discoveries, ideas, research, engineering, methods, practices,
processes, systems, formulae, designs, drawings, products, projects,
improvements, developments, know-how, and trade secrets which are used in the
conduct of NBTI's business, whether registered or unregistered (collectively the
Proprietary Rights) are owned by NBTI. To the knowledge of the executive
officers of NBTI, NBTI created or developed such Proprietary Rights and such
Proprietary Rights are not subject to any restriction, lien, encumbrance, right,
title or interest in others. All of the Proprietary Rights stand solely in the
name of NBTI and not in the name of any shareholder, director, officer, agent,
partner or employee or anyone else known to the executive officers of NBTI, and
none of the same have any right, title, interest, restriction, lien or
encumbrance therein or thereon or thereto. To the knowledge of the executive
officers of NBTI, NBTI's ownership and use of the Proprietary Rights do not and
will not infringe upon, conflict with or violate in any material respect any
patent, copyright, trade secret or other lawful proprietary right of any other
party, and no claim is pending or, to the knowledge of the executive officers of
NBTI, threatened to the effect that the operations of NBTI infringe upon or
conflict with the asserted rights of any other person under any of the
Proprietary Rights, and to the knowledge of the executive officers of NBTI there
is no reasonable basis for any such claim (whether or not pending or
threatened). No claim is pending, or to the knowledge of the executive officers
of NBTI, threatened to the effect that any such Proprietary Rights owned or
licensed by NBTI, or which NBTI otherwise has the right to use, is invalid or
unenforceable by NBTI.

      3.10 (i) NBTI has not received notice of any material violation of or
investigation relating to any environmental or pollution law, regulation, or
ordinance with respect to assets now or previously owned or operated by NBTI
that has not been fully and finally resolved; (ii) to the knowledge of the
executive officers of NBTI, all permits, licenses and other authorizations which
are required under United States, federal, state, provincial and local laws with
respect to pollution or protection of the environment ("Environmental Laws"),
including Environmental Laws relating to actual or threatened emissions,
discharges or releases of pollutants, contaminants or hazardous or toxic
materials or wastes ("Pollutants") have been obtained; (iii) to the knowledge of
the executive officers of NBTI, no conditions exist on, in or about the
properties now or previously owned or operated by NBTI or any third-party

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<PAGE>

properties to which any Pollutants generated by NBTI were sent or released that
could give rise on the part of NBTI to material liability under any
Environmental Laws, material claims by third parties under Environmental Laws or
under common law or the occurrence of material costs to avoid any such liability
or claim; and (iv) to the knowledge of the executive officers of NBTI, all
operators of Huifeng's assets are in material compliance with all terms and
conditions of such Environmental Laws, permits, licenses and authorizations, and
are also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in such laws or contained in any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder, relating to Huifeng's assets.

      3.11 NBTI has delivered to SCRE financial statements of Huifeng dated
September 30, 2004. All such statements, herein sometimes called " Huifeng I
Financial Statements," are (and will be) complete and correct in all material
respects and, together with the notes to these financial statements, present
fairly the financial position and results of operations of Huifeng for the
periods indicated. All financial statements of Huifeng will have been prepared
in accordance with generally accepted accounting principles.

      3.12 Since the dates of the Huifeng Financial Statements, there have not
been any material adverse changes in the business or condition, financial or
otherwise, of Huifeng, Huifeng does not have any material liabilities or
obligations, secured or unsecured except as shown on the updated financials of
Huifeng dated September 30, 2004 (whether accrued, absolute, contingent or
otherwise).

                                   ARTICLE IV

                  Representations, Warranties and Covenants of
                               Secured Data, Inc.

      No representations or warranties are made by any director, officer,
employee or shareholder of SCRE as individuals, except as and to the extent
stated in this Agreement or in a separate written statement.

      SCRE hereby represents, warrants and covenants to NBTI and its
shareholders, except as stated in the SCRE Disclosure Statement, if any, as
follows:

      4.1 SCRE is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, and has the corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. The Articles of Incorporation and Bylaws of SCRE, copies of
which have been delivered to NBTI, are complete and accurate, and the minute
books of SCRE contain a record, which is complete and accurate in all material
respects, of all meetings, and all corporate actions of the shareholders and
Board of Directors of SCRE.

      4.2 The aggregate number of shares which SCRE is authorized to issue is
100,000,000 shares of common stock with $.001 par value per share and 5,000,000
shares of Preferred Stock of which 12,869,368 shares of such common stock are
issued and outstanding, fully paid and non-assessable. SCRE will have, on the
Closing Date, no outstanding options, warrants or other rights to purchase, or
subscribe to, or securities convertible into or exchangeable for any shares of
capital stock. No preferred stock of SCRE is outstanding.

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<PAGE>

      4.3 SCRE has complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.

      4.4 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated herein by
SCRE will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of SCRE.

      4.5 The execution of this Agreement has been duly authorized and approved
by the Board of Directors of SCRE.

      4.6 SCRE has delivered to NBTI audited financial statements of SCRE dated
December 31, 2003 and interim unaudited for September 30, 2004. All such
statements, herein sometimes called "SCRE Financial Statements," are (and will
be) complete and correct in all material respects and, together with the notes
to these financial statements, present fairly the financial position and results
of operations of SCRE for the periods indicated. All statements of SCRE will
have been prepared in accordance with generally accepted accounting principles.

      4.7 Since the dates of the SCRE Financial Statements, there have not been
any material adverse changes in the business or condition, financial or
otherwise, of SCRE. SCRE does not have any material liabilities or obligations,
secured or unsecured except as shown on the updated financials of SCRE dated
September 30, 2004 (whether accrued, absolute, contingent or otherwise). SCRE
shall have, at Closing, no outstanding assets or liabilities except as described
in Schedule 4.7 attached hereto.

      4.8 There are no legal proceedings or regulatory proceedings involving
material claims pending, or, to the knowledge of the officers of SCRE,
threatened against SCRE or affecting any of its assets or properties, and SCRE
is not in any material breach or violation of or default under any contract or
instrument to which SCRE is a party, and no event has occurred which with the
lapse of time or action by a third party could result in a material breach or
violation of or default by SCRE under any contract or other instrument to which
SCRE is a party or by which they or any of their respective properties may be
bound or affected, or under their respective Articles of Incorporation or
Bylaws, nor is there any court or regulatory order pending, applicable to SCRE.

      4.9 SCRE shall not enter into or consummate any transactions prior to the
Effective Date other than in the ordinary course of business and will issue no
securities, pay no dividend, or increase the compensation of officers and will
not enter into any agreement or transaction which would adversely affect its
financial condition except pursuant to the proposed minutes of the Board of
Directors of SCRE presented herewith for approval by NBTI.

      4.10 The representations and warranties of SCRE shall be true and correct
as of the date hereof and as of the Effective Date.

      4.11 SCRE corporate books and records are true records of its actions.
SCRE will also deliver to NBTI on or before the Closing Date any reports
relating to the financial and business condition of SCRE which occur after the
date of this Agreement and any other reports sent generally to its shareholders
after the date of this Agreement.

      4.12 SCRE has no employee benefit plan in effect at this time.

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      4.13 SCRE is current in its filing obligations under the federal
securities laws. No report filed by SCRE with the Securities and Exchange
Commission contains any untrue statement of a material fact or omits to state
any material fact necessary to make such representation or warranty not
misleading, and all such reports comply as to form and substance in all material
respects with all applicable SEC requirements.

      4.14 SCRE ("Indemnifying Party") hereby agrees to indemnify NBTI, the NBTI
Shareholders and each of the officers, agents and directors of NBTI or the NBTI
Shareholders against any loss, liability, claim, damage or expense (including,
but not limited to, any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever) (each an "Indemnified Party") to which it
or they may become subject arising out of or based on either (i) any breach of
or inaccuracy in any of the representations and warranties or covenants or
conditions made by SCRE and/or its officers or directors herein in this
Agreement; or (ii) any and all liabilities arising out of or in connection with:
(A) any of the assets of SCRE prior to the Closing; or (B) the operations of
SCRE prior to the Closing.

                                    ARTICLE V

1 Obligations of the Parties Pending the Effective Date

      5.1 At all times prior to the Effective Date during regular business
hours, each party will permit the other to examine its books and records and the
books and records of its subsidiaries and will furnish copies thereof on
request. It is recognized that, during the performance of this Agreement, each
party may provide the other parties with information which is confidential or
proprietary information. The recipient of such information shall at all times
protect such information from disclosure, other than disclosure required by
rule, regulation, or law, other than to members of its own or affiliated
organizations and its professional advisers, in the same manner as it protects
its own confidential or proprietary information from unauthorized disclosure,
and not use such information to the competitive detriment of the disclosing
party. In addition, if this Agreement is terminated for any reason, each party
shall promptly return or cause to be returned all documents or other written
records of such confidential or proprietary information, together with all
copies of such writings and, in addition, shall either furnish or cause to be
furnished, or shall destroy, or shall maintain with such standard of care as is
exercised with respect to its own confidential or proprietary information, all
copies of all documents or other written records developed or prepared by such
party on the basis of such confidential or proprietary information. No
information shall be considered confidential or proprietary if it is (a)
information already in the possession of the party to whom disclosure is made,
(b) information acquired by the party to whom the disclosure is made from other
sources, or (c) information in the public domain or generally available to
interested persons or which at a later date passes into the public domain or
becomes available to the party to whom disclosure is made without any wrongdoing
by the party to whom the disclosure is made.

      5.2 SCRE and NBTI shall promptly provide each other with information as to
any significant developments in the performance of this Agreement, and shall
promptly notify the other if it discovers that any of its representations,
warranties and covenants contained in this Agreement or in any document
delivered in connection with this Agreement was not true and correct in all
material respects or became untrue or incorrect in any material respect.

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      5.3 All parties to this Agreement shall take all such action as may be
reasonably necessary and appropriate and shall use their best efforts in order
to consummate the transactions contemplated hereby as promptly as practicable.

                                   ARTICLE VI

                             Procedure For Exchange

      6.1 At the Closing Date, the exchange shall be effected within 4 business
days after receipt by Gary L. Blum, Esq., as attorney for SCRE, of the NBTI
common stock certificates representing 30% of the issued and outstanding common
stock of NBTI, by instructing the transfer agent of SCRE to issue the new
certificates and sending the certificates of SCRE by Federal Express to the
exchanging NBTI Shareholders.

                                   ARTICLE VII

            Conditions Precedent to the Consummation of the Exchange

      The following are conditions precedent to the consummation of the
Agreement on or before the Effective Date:

      7.1 NBTI and SCRE shall have performed and complied with all of its
respective obligations hereunder which are to be complied with or performed on
or before the Effective Date and SCRE and NBTI shall provide one another at the
Closing with a certificate to the effect that such party has performed each of
the acts and undertakings required to be performed by it on or before the
Closing Date pursuant to the terms of this Agreement.

      7.2 This Agreement, the transactions contemplated herein shall have been
duly and validly authorized, approved and adopted, at meetings of the
shareholders of NBTI duly and properly called for such purpose in accordance
with the applicable laws.

      7.3 No action, suit or proceeding shall have been instituted or shall have
been threatened before any court or other governmental body or by any public
authority to restrain, enjoin or prohibit the transactions contemplated herein,
or which might subject any of the parties hereto or their directors or officers
to any material liability, fine, forfeiture or penalty on the grounds that the
transactions contemplated hereby, the parties hereto or their directors or
officers, have violated any applicable law or regulation or have otherwise acted
improperly in connection with the transactions contemplated hereby, and the
parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.

      7.4 All actions, proceedings, instruments and documents required to carry
out this Agreement and the transactions contemplated hereby and the form and
substance of all legal proceedings and related matters shall have been approved
by counsel for NBTI and SCRE.

      7.5 The representations and warranties made by NBTI and SCRE in this
Agreement shall be true as though such representations and warranties had been
made or given on and as of the Closing Date.

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      7.6 Securities Laws Compliance. Each shareholder of NBTI ("NBTI
Shareholder"), by executing this Agreement hereby represents and warrants to
SCRE as follows: (a) Ownership of the NBTI shares. The NBTI Shareholder owns,
beneficially and of record, good and marketable title to its NBTI shares, free
and clear of all security interests, liens, adverse claims, encumbrances,
equities, proxies, options or stockholders' agreements. At the Closing, the NBTI
Shareholder will convey to SCRE good and marketable title to the NBTI shares,
free and clear of any security interests, liens, adverse claims, encumbrances,
equities, proxies, options, stockholders' agreements or restrictions.

      (b) Authority Relative to this Agreement. The execution, delivery and
performance of this Agreement by the NBTI Shareholder and the consummation by
the NBTI Shareholder of the transactions contemplated hereby have been duly
authorized by the NBTI Shareholder, and no other actions on the part of the NBTI
Shareholder are necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the NBTI Shareholder and constitutes a valid and binding agreement
of the NBTI Shareholder, enforceable against the NBTI Shareholder in accordance
with its terms, except as such enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity.

      (c) Consents and Approvals; No Violations. Except for requirements of
applicable laws, no filing with, and no permit, authorization, consent or
approval of, any public body or authority is necessary for the consummation by
the NBTI Shareholder of the transactions contemplated by this Agreement. Neither
the execution and delivery of this Agreement by the NBTI Shareholder nor the
consummation by the NBTI Shareholder of the transactions contemplated hereby,
nor compliance by the NBTI Shareholder with any of the provisions hereof, will
(a) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, contract,
agreement or other instrument or obligation to which the NBTI Shareholder is a
party or by which the NBTI Shareholder or his property may be bound or (b)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the NBTI Shareholder, except in the case of clauses (a) and (b)
for violations, breaches or defaults which are not in the aggregate material to
the NBTI Shareholder.

      (d) Restricted Securities. The NBTI Shareholder acknowledges that the SCRE
shares will not be registered pursuant to the Securities Act of 1933, as amended
(the "Securities Act") or any applicable state securities laws, that the SCRE
shares will be characterized as "restricted securities" under federal securities
laws, and that under such laws and applicable regulations the SCRE shares cannot
be sold or otherwise disposed of without registration under the Securities Act
or an exemption therefrom. In this regard, the NBTI Shareholder is familiar with
Rule 144 promulgated under the Securities Act, as currently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.

      (e) Accredited Investor. The NBTI Shareholder is either an "Accredited
Investor" as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act, or, if not, the NBTI Shareholder is a sophisticated investor
and is able to bear the economic risk of acquiring the SCRE Shares pursuant to
the terms of this Agreement, including a complete loss of the NBTI Shareholder's
investment in the SCRE shares.

      (f) Legend. The NBTI Shareholder acknowledges that the certificate(s)
representing the SCRE shares shall each conspicuously set forth on the face or
back thereof a legend in substantially the following form:

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         THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
         HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
         TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM
         REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
         SUCH REGISTRATION IS NOT REQUIRED.

      7.7 SCRE shall furnish NBTI with a certified copy of a resolution or
resolutions duly adopted by the Board of Directors of SCRE, approving this
Agreement and the transactions contemplated by it.

                                  ARTICLE VIII

                           Termination and Abandonment

      8.1 Anything contained in this Agreement to the contrary notwithstanding,
the Agreement may be terminated and abandoned at any time prior to the Effective
Date:

            (a) By mutual consent of NBTI and SCRE;

            (b) By NBTI, or SCRE, if any condition set forth in Articles VII or
X relating to the other party has not been met by the Effective Date or has not
been waived in writing by the other party;

            (c) By NBTI, or SCRE, if any suit, action or other proceeding shall
be pending or threatened by the federal or a state government before any court
or governmental agency, in which it is sought to restrain, prohibit or otherwise
affect the consummation of the transactions contemplated hereby;

            (d) By any party, if there is discovered any material error,
misstatement or omission in the representations and warranties of another party;

            (e) By any party if the Effective Date is not within 15 days from
the date hereof, or if the Closing Date passes without performance.

      8.2 Any of the terms or conditions of this Agreement may be waived in
writing at any time by the party which is entitled to the benefit thereof, by
action taken by its Board of Directors provided; however, that such action shall
be taken only if, in the judgment of the Board of Directors taking the action,
such waiver will not have a materially adverse effect on the benefits intended
under this Agreement to the party waiving such term or condition.

                                   ARTICLE IX

                        Termination of Representation and
                        Warranties and Certain Agreements

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<PAGE>

      9.1 The respective representations and warranties of the parties hereto
shall expire with, and be terminated and extinguished four years after the
Effective Date of the Agreement; provided, however, that the covenants and
agreements of the parties hereto shall survive in accordance with their terms.

                                    ARTICLE X

                                  Miscellaneous

      10.1 This Agreement embodies the entire agreement between the parties, and
there have been and are no agreements, representations or warranties among the
parties other than those set forth herein or those provided for herein.

      10.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument.

      10.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances as are
deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.

      10.4 This Agreement may be amended upon approval of the Board of Directors
of each party provided that the shares issuable hereunder shall not be amended
without approval of the requisite shareholders of NBTI.

      10.5 Any notices, requests, or other communications required or permitted
hereunder shall be delivered personally or sent by overnight courier service,
fees prepaid, addressed as follows:

          To Northwest Bio-Technic Inc.:

                         c/o Law Offices of Gary L. Blum
                         3278 Wilshire Boulevard, Suite 603
                         Los Angeles, CA 90010
                         Attn: Gary L. Blum, Esq.

                         Facsimile: 213-381-7450

To:  Secured Data, Inc.:

                         409 Calle San Pablo, Suite 100-101
                         Camarillo, CA 93010
                         Attn: President
                         Facsimile: 805-445-0070

                                       39
<PAGE>

or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.

      10.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of NBTI and
SCRE. However, either NBTI or SCRE may issue at any time any press release or
other public statement it believes on the advice of its counsel it is obligated
to issue to avoid liability under the law relating to disclosures, but the party
issuing such press release or public statement shall make a reasonable effort to
give the other party prior notice of and opportunity to participate in such
release or statement.

      10.7 The Parties to this Agreement hereby agree as follows: (a) Subsequent
to the Closing, and as a condition of the effectiveness of the Convertible Note
and purchase of the remaining 70% of the issued and outstanding stock of NBTI,
SCRE shall effect the 1) name change to a name selected by NBTI and 2) a reverse
split of one for eighteen (1:18) shares of the issued and then outstanding
shares of common stock of SCRE, which reverse split will become effective at the
same time as the name change; and further, SCRE shall , within 48 hours of
filing, provide NBTI with time stamped file copies of duly authorized Articles
of Amendment as filed with the Secretary of the State of Nevada, which effects
the reverse split and name change.

      10.8 Any controversy arising out of, connected to, or relating to any
matters herein of the transactions with the Parties hereto on behalf of the
undersigned, or this Agreement, or the breach thereof, including, but not
limited to any claims of violations of federal and/or state securities laws,
banking statutes, consumer protection statutes, federal and/or state
anti-racketeering (e.g. RICO) claims as well as any common law claims and any
state law claims of fraud, negligence, negligent misrepresentations, and/or
conversion, or the laws of any territory, country or jurisdiction, shall be
settled by arbitration; and in accordance with this paragraph any judgment on
the arbitrator's award may be entered in any court having jurisdiction thereof.
In the event of such a dispute, each party agrees to arbitration conducted
through the auspices of American Arbitration Association. Venue for any action
shall lie in Los Angeles, California.

                                       40
<PAGE>

      IN WITNESS WHEREOF, the parties have entered into this Agreement this 20th
day of December, 2004.

                                            Secured Data, Inc.

                                            By: /s/ Wang Jing An
                                                --------------------------------
                                                President & CEO

                                            Northwest Bio-Technic Inc.

                                            By: /s/ Wang Jing An
                                                --------------------------------
                                                President

                                      NORTHWEST BIO-TECHNIC INC. SHAREHOLDERS

         Signatures                          Please Print Names

         1_________________________         Wang Jing An: 250,000 NBTI shares

         2_________________________         Hou Xin Wen: 50,000 NBTI shares

         3_________________________         Zhang Junqi: 50,000 NBTI shares

         4_________________________         Wang Bijun: 50,000 NBTI shares

         5_________________________         Wang Zhilan: 50,000 NBTI shares

         6_________________________         Wang Xugang: 50,000 NBTI shares

                                       41
<PAGE>

                                  SCHEDULE 4.7

                         CHANGES IN FINANCIAL CONDITION

                  List of Liabilities and Amount:

                                    EXHIBIT A

                           CONVERTIBLE PROMISSORY NOTE
                                DUE JUNE 3O, 2005

      THIS CONVERTIBLE PROMISSORY NOTE is issued by Secured Data, Inc., a Nevada
corporation (the "Company"), designated as its Convertible Promissory Note, due
June 30, 2005 (the "CONVERTIBLE NOTE") issued pursuant to the Agreement And Plan
of Reorganization dated December 20, 2004 between Northwest Bio-Technic Inc.
("NBTI"), a British Virgin Islands corporation, its shareholders
("Shareholders") and the Company (the "Reorganization Agreement").

      FOR VALUE RECEIVED, the Company promises to pay (ratably as per their
shareholdings in NBTI) to the Shareholders or their registered assigns (the
"HOLDERS"), the principal sum of $1,900,000 on June 30, 2005 or such earlier
date as the Convertible Note is required or permitted to be repaid as provided
hereunder (the "MATURITY DATE"), and to pay interest to the Holders on the
aggregate unconverted and then outstanding principal amount of this Convertible
Note at the rate of 5% per annum, payable on the Maturity Date as set forth
herein. Interest shall be calculated on the basis of a 360-day year and shall
accrue on the Maturity Date. On the Maturity Date, the Company may, in its sole
discretion, pay the principal sum (and interest accrued) by issuing to the
Holder 10,465,725 shares of the Company's restricted common stock at $0.1815 per
share, provided a required 1 for 18 reverse stock split of the common stock has
been effected.

      This Convertible Note is subject to the following additional provisions:

1. SUBJECT TO REORGANIZATION AGREEMENT. This Convertible Note has been issued
subject to certain investment representations of the original Holders set forth
in the Reorganization Agreement and may be transferred or exchanged only in
compliance with the Reorganization Agreement and applicable federal and state
securities laws and regulations. Prior to due presentment to the Company for
transfer of this Convertible Note, the Company and any agent of the Company may
treat the persons in whose names this Convertible Note is duly registered on the
Convertible Note Register as the owners hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this
Convertible Note is overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.

                                       42
<PAGE>

2. EVENTS OF DEFAULT.

      (a) "EVENT OF DEFAULT", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

            (i) any default in the payment of the principal of, interest on, or
liquidated damages in respect of, any Convertible Note, free of any claim of
subordination, as and when the same shall become due and payable (whether on a
Conversion Date or the Maturity Date or by acceleration or otherwise) which
default is not cured, if possible to cure, within 30 days of notice of such
default sent by the Holder;

            (ii) the Company or any of its subsidiaries shall commence, or there
shall be commenced against the Company or any such subsidiary a case under any
applicable bankruptcy or insolvency laws as now or hereafter in effect or any
successor thereto, or the Company commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Company or any subsidiary thereof or there
is commenced against the Company or any subsidiary thereof any such bankruptcy,
insolvency or other proceeding which remains undismissed for a period of 60
days; or the Company or any subsidiary thereof is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Company or any subsidiary thereof suffers any
appointment of any custodian or the like for it or any substantial part of its
property which continues undischarged or unstayed for a period of 60 days; or
the Company or any subsidiary thereof makes a general assignment for the benefit
of creditors; or the Company shall fail to pay, or shall state that it is unable
to pay, or shall be unable to pay, its debts generally as they become due; or
the Company or any subsidiary thereof shall call a meeting of its creditors with
a view to arranging a composition, adjustment or restructuring of its debts; or
the Company or any subsidiary thereof shall by any act or failure to act
expressly indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate or other action is taken by the Company or any
subsidiary thereof for the purpose of effecting any of the foregoing.

      (b) REMEDIES UPON DEFAULT. If any Event of Default occurs and is
continuing, the full principal amount of this Convertible Note, together with
interest and other amounts owing in respect thereof, to the date of acceleration
shall become at the Holders' election, immediately due and payable in cash. The
Holder need not provide and the Company hereby waives any presentment, demand,
protest or other notice of any kind, and the Holders may immediately and without
expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable law. Such
declaration may be rescinded and annulled by Holders at any time prior to
payment hereunder and the Holders shall have all rights as Convertible Note
holders until such time, if any, as the full payment under this Section shall
have been received by it. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.

                                       43
<PAGE>

3. CONVERSION.

      (a) CONVERSION RIGHT. At any time after the Original Issue Date until this
Convertible Note is no longer outstanding, this Convertible Note shall be
convertible into shares of Common Stock at the option of the Holder, in whole
(and not in part) at any time and from time to time (subject to the limitations
on conversion set forth in this Section 3(a) hereof). The Holders shall effect
conversions by delivering to the Company the form of Notice of Conversion
attached hereto as ANNEX A (a "NOTICE OF CONVERSION"), specifying therein the
principal amount of Convertible Note to be converted and the date on which such
conversion is to be effected (a "CONVERSION DATE"). If no Conversion Date is
specified in a Notice of Conversion, the Conversion Date shall be the date that
such Notice of Conversion is provided hereunder. Conversions hereunder shall
have the effect of lowering the outstanding principal amount of this Convertible
Note in an amount equal to the applicable conversion. The Holders and the
Company shall maintain records showing the principal amount converted and the
date of such conversion. The Holders and any assignee, by acceptance of this
Convertible Note, acknowledge and agree that, by reason of the provisions of
this paragraph, following conversion of this Convertible Note, the principal
amount of this Convertible Note may be less than the amount stated on the face
hereof.

      (b) UNDERLYING SHARES ISSUABLE UPON CONVERSION AND PURSUANT TO THE
CONVERSION OF PRINCIPAL AMOUNT. The number of shares of Common Stock issuable
upon conversion shall be 10,465,725 (post a required 1 for 18 reverse stock
split) shares of the Company's restricted common stock (the "Underlying
Shares").

      (d) DELIVERIES UPON CONVERSION. Not later than 10 Business Days after any
Conversion Date, the Company will deliver to the Holders a certificate or
certificates representing the Underlying Shares representing the number of
shares of Common Stock being acquired upon the conversion of Convertible Note
(including, if so timely elected by the Company, shares of Common Stock
representing the payment of accrued interest).

      (f) ADJUSTMENTS.

            (i) If the Company, at any time while the Convertible Note is
outstanding: (A) shall pay a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company
pursuant to this Convertible Note, including interest thereon), (B) subdivide
outstanding shares of Common Stock into a larger number of shares, (C) combine
(including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (D) issue by reclassification of shares of
the Common Stock any shares of capital stock of the Company, then the number of
Underlying Shares into which this Convertible Note is convertible into shall be
correspondingly adjusted by multiplying such number of shares by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding after such
event. Any adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
re-classification.

                                       44
<PAGE>

            (ii) All calculations under this Section 3 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be outstanding
as of a given date shall be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) outstanding on a fully diluted basis.

      (g) The Company covenants that all shares of Common Stock that shall be so
issuable shall, upon issue, be duly and validly authorized, issued and fully
paid, nonassessable.

      (h) The issuance of certificates for shares of the Common Stock on
conversion of the Convertible Note shall be made without charge to the Holders
thereof for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificate, provided that the Company
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate upon
conversion in a name other than that of the Holder of such Convertible Note so
converted and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

4. DEFINITIONS. For the purposes hereof, in addition to the terms defined
elsewhere in this Convertible Note: (a) capitalized terms not otherwise defined
herein have the meanings given to such terms in the Reorganization Agreement,
and (b) the following terms shall have the following meanings:

      "BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday in the United States or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.

      "COMMISSION" means the Securities and Exchange Commission.

      "COMMON STOCK" means the common stock, $0.001 par value per share, of the
Company and stock of any other class into which such shares may hereafter have
been reclassified or changed.

      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

      "ORIGINAL ISSUE DATE" shall mean the date of the first issuance of the
Convertible Note regardless of the number of transfers of any Convertible Note
and regardless of the number of instruments which may be issued to evidence such
Convertible Note. "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.

                                       45
<PAGE>

      "UNDERLYING SHARES" means the shares of Common Stock issuable upon
conversion of Convertible Note or as payment of interest in accordance with the
terms hereof.

5. DEBT OBLIGATION. This Convertible Note is a direct debt obligation of the
Company. This Convertible Note ranks PARI PASSU with all other Convertible Notes
now or hereafter issued under the terms set forth herein.

6. REPLACEMENT OF NOTE. If this Convertible Note shall be mutilated, lost,
stolen or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Convertible Note, or in
lieu of or in substitution for a lost, stolen or destroyed Convertible Note, a
new Convertible Note for the principal amount of this Convertible Note so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Convertible Note, and of the ownership
hereof, and indemnity, if requested, all reasonably satisfactory to the Company.

7. INTERPRETATION; CHOICE OF LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Convertible Note shall be
governed by and construed and enforced in accordance with the internal laws of
the State of California, without regard to the principles of conflicts of law
thereof. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Convertible Note or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of this Convertible Note, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys' fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.

8. WAIVER. Any waiver by the Company or the Holders of a breach of any provision
of this Convertible Note shall not operate as or be construed to be a waiver of
any other breach of such provision or of any breach of any other provision of
this Convertible Note. The failure of the Company or the Holders to insist upon
strict adherence to any term of this Convertible Note on one or more occasions
shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Convertible Note. Any waiver must be in writing.

9. MISCELLANEOUS. If any provision of this Convertible Note is invalid, illegal
or unenforceable, the balance of this Convertible Note shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances. If it
shall be found that any interest or other amount deemed interest due hereunder
violates applicable laws governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum permitted rate of

                                       46
<PAGE>

interest. The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other
law which would prohibit or forgive the Company from paying all or any portion
of the principal of or interest on the Convertible Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has
been enacted. Whenever any payment or other obligation hereunder shall be due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.

      IN WITNESS WHEREOF, the Company has caused this Convertible Note to be
duly executed by a duly authorized officer as of the date first above indicated.

                                           SECURED DATA, INC.

                                           By:
                                                --------------------------------
                                                Name: Wang Jin An
                                                Title: Chief Executive Officer

                                       47EXHIBIT 10.1

                          AGREEMENT AND PLAN OF MERGER

                                  BY AND AMONG

                             ENHANCE BIOTECH, INC.,

                            ARDENT ACQUISITION CORP.

                                       AND

                          ARDENT PHARMACEUTICALS, INC.

                              DATED AUGUST 11, 2004

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                ----
<S>                                                                                                             <C>
ARTICLE I  THE MERGER.............................................................................................8
     SECTION 1.1  The Merger......................................................................................8
     SECTION 1.2  Closing.........................................................................................9
     SECTION 1.3  Effective Time..................................................................................9
     SECTION 1.4  Effects of the Merger...........................................................................9
     SECTION 1.5  Certificate of Incorporation and By-laws of the Surviving Corporation...........................9
     SECTION 1.6  Directors and Officers..........................................................................9

ARTICLE II  EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES..10
     SECTION 2.1    Effect on Capital Stock......................................................................10
     SECTION 2.2    Fractional Shares............................................................................12
     SECTION 2.3    Exchange of Certificates.....................................................................13
     SECTION 2.4    Certain Adjustments..........................................................................14
     SECTION 2.5    Shares of Dissenting Shareholders............................................................15
     SECTION 2.6    Stock Options................................................................................15
     SECTION 2.7    Warrants.....................................................................................16
     SECTION 2.8.   Convertible Promissory Notes.................................................................16
     SECTION 2.9.   Tax-Free Reorganization......................................................................16
     SECTION 2.10.  Issuance of Restricted Shares................................................................17

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................................17
     SECTION 3.1  Organization, Standing and Corporate Power.....................................................17
     SECTION 3.2  Subsidiaries...................................................................................17
     SECTION 3.3  Capital Structure..............................................................................18
     SECTION 3.4  Authority; Noncontravention....................................................................19
     SECTION 3.5  Financial Statements; Undisclosed Liabilities..................................................19
     SECTION 3.6  Company Contracts..............................................................................20
     SECTION 3.7  Absence of Certain Changes.....................................................................22
     SECTION 3.8  Permits; Compliance with Applicable Laws.......................................................24
     SECTION 3.9  Absence of Litigation..........................................................................25
     SECTION 3.10  Tax Matters...................................................................................26
     SECTION 3.11  Employee Benefit Plans........................................................................27
     SECTION 3.12  Labor Matters.................................................................................30
     SECTION 3.13  Environmental Matters.........................................................................31
     SECTION 3.14  Intellectual Property.........................................................................32
     SECTION 3.15  Insurance Matters.............................................................................34
     SECTION 3.16  Transactions with Affiliates..................................................................34
     SECTION 3.17  Voting Requirements...........................................................................34
     SECTION 3.18  Brokers.......................................................................................35
     SECTION 3.19  Real Property.................................................................................35
     SECTION 3.20  Tangible Personal Property....................................................................35

<PAGE>

     SECTION 3.21  Investment Company............................................................................36
     SECTION 3.22  Board Approval................................................................................36
     SECTION 3.23  Books and Records.............................................................................36
     SECTION 3.24  Accuracy of Information.......................................................................36

ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF PARENT.............................................................36
     SECTION 4.1  Organization, Standing and Corporate Power.....................................................37
     SECTION 4.2  Subsidiaries...................................................................................37
     SECTION 4.3  Capital Structure..............................................................................37
     SECTION 4.4  Authority; Noncontravention....................................................................38
     SECTION 4.5  Parent Documents...............................................................................39
     SECTION 4.6  Parent Contracts...............................................................................40
     SECTION 4.7  Absence of Certain Changes.....................................................................42
     SECTION 4.8  Permits; Compliance with Applicable Laws.......................................................43
     SECTION 4.9  Absence of Litigation..........................................................................43
     SECTION 4.10  Tax Matters...................................................................................43
     SECTION 4.11  Employee Benefit Plans........................................................................44
     SECTION 4.12  Labor Matters.................................................................................45
     SECTION 4.13  Environmental Matters.........................................................................45
     SECTION 4.14  Intellectual Property.........................................................................46
     SECTION 4.15  Insurance Matters.............................................................................47
     SECTION 4.16  Transactions with Affiliates..................................................................48
     SECTION 4.17  Voting Requirements...........................................................................48
     SECTION 4.18  Brokers.......................................................................................48
     SECTION 4.19  Investment Company............................................................................48
     SECTION 4.20  Board Approval................................................................................48
     SECTION 4.21  Books and Records.............................................................................48
     SECTION 4.22  Accuracy of Information.......................................................................48

ARTICLE V  COVENANTS RELATING TO CONDUCT OF BUSINESS.............................................................49
     SECTION 5.1  Conduct of Business by the Company.............................................................49
     SECTION 5.2  Advice of Changes..............................................................................50
     SECTION 5.3  No Solicitation by the Company.................................................................50
     SECTION 5.4  Conduct of Business by Parent..................................................................51
     SECTION 5.5  No Solicitation by Parent......................................................................53
     SECTION 5.6  Transition.....................................................................................53

ARTICLE VI  ADDITIONAL AGREEMENTS................................................................................53
     SECTION 6.1  Preparation of the Form S-4, Proxy/Information Statement.............. ........................53
     SECTION 6.2  Shareholders' Meeting..........................................................................55
     SECTION 6.3  Letters of Company's Accountants...............................................................55
     SECTION 6.4  Access to Information; Confidentiality.........................................................55
     SECTION 6.5  Commercially Reasonable Efforts...................................... .........................56
     SECTION 6.6  Indemnification, Exculpation and Insurance.....................................................56
     SECTION 6.7  Fees and Expenses..............................................................................57
     SECTION 6.8  Public Announcements...........................................................................58
     SECTION 6.9  Corporate Governance of Parent.................................................................58

<PAGE>

     SECTION 6.10  Agreements with Holders of Company Securities.................................................58
     SECTION 6.11  Shareholder Litigation........................................................................59
     SECTION 6.12  Voting Agreements and Lock-Up Agreements......................................................59
     SECTION 6.13  Employee Benefits.............................................................................60
     SECTION 6.14  Cashless Exercise of Stock Options............................................................60
     SECTION 6.15  Directors and Officers Insurance..............................................................60
     SECTION 6.16  Contingent Fee Shares.........................................................................61

ARTICLE VII  CONDITIONS PRECEDENT................................................................................61
     SECTION 7.1  Conditions to Each Party's Obligation to Effect the Merger.....................................61
     SECTION 7.2  Conditions to Obligations of Parent and Merger Sub.............................................62
     SECTION 7.3  Conditions to Obligations of the Company.......................................................63
     SECTION 7.4  Frustration of Closing Conditions..............................................................63

ARTICLE VIII  TERMINATION, AMENDMENT AND WAIVER..................................................................64
     SECTION 8.1  Termination....................................................................................64
     SECTION 8.2  Effect of Termination..........................................................................65
     SECTION 8.3  Amendment......................................................................................65
     SECTION 8.4  Extension; Waiver..............................................................................65

ARTICLE IX  GENERAL PROVISIONS...................................................................................65
     SECTION 9.1  Nonsurvival of Representations, Warranties and Agreements......................................65
     SECTION 9.2  Notices........................................................................................66
     SECTION 9.3  Definitions....................................................................................66
     SECTION 9.4  Interpretation.................................................................................67
     SECTION 9.5  Counterparts...................................................................................68
     SECTION 9.6  Entire Agreement; No Third-Party Beneficiaries.................................................68
     SECTION 9.7  Governing Law..................................................................................68
     SECTION 9.8  Assignment.....................................................................................68
     SECTION 9.9  Consent to Jurisdiction........................................................................68
     SECTION 9.10  Headings......................................................................................69
     SECTION 9.11  Severability..................................................................................69
     SECTION 9.12  Enforcement...................................................................................69
</TABLE>

<PAGE>

                                    EXHIBITS

Exhibit A  -        Lock-Up Period Legend

Exhibit B  -        Initial Lock-Up Period Legend

Exhibit C  -        Form of Employment Agreement for Christopher Every

Exhibit D  -        Form of Employment Agreement for Kwen-Jen Chang

Exhibit E  -        Form of Employment Agreement for Phillip S. Wise

                                       iv
<PAGE>

                             INDEX OF DEFINED TERMS

DEFINED TERMS                                       SECTION DEFINED
-------------                                       ---------------

5% Holder                                           Section 6.12
Action                                              Section 3.9(a)
Adjustment Event                                    Section 2.4
affiliate                                           Section 9.3(a)
Agreement                                           Preamble
Aggregate Merger Consideration                      Section 2.1(l)(i)
Aggregate Series D-1 Merger Consideration           Section 2.1(f)
Aggregate Series D-2 Merger Consideration           Section 2.1(g)
AMEX                                                Section 4.5(d)
Articles of Merger                                  Section 1.3
Century Capital                                     Section 6.16
Closing                                             Section 1.2
Closing Date                                        Section 1.2
Code                                                Section 2.6(a)
Common Stock Merger Consideration                   Section  2.1(h)
Company                                             Preamble
Company Acquisition Proposal                        Section 5.3(a)
Company Articles of Incorporation                   Section 3.3(d)
Company Convertible Promissory Note                 Section 2.8
Company Common Stock                                Recitals
Company Contract                                    Section 3.6(b)
Company Disclosure Schedule                         Article III
Company Financial Statements                        Section 3.5
Company Material Contracts                          Section 3.6(b)
Company Preferred Stock                             Section 9.3(f)
Company Series A Preferred Stock                    Section 2.1(c)
Company Series B Preferred Stock                    Section 2.1(d)
Company Series C Preferred Stock                    Section 2.1(e)
Company Series D-1 Preferred Stock                  Section 2.1(f)
Company Series D-2 Preferred Stock                  Section 2.1(g)
Company Shareholder Meeting                         Section 6.2
Company Stock Certificates                          Section 2.3(b)
Company Stock Option                                Section 2.6(a)
Company Stock Plans                                 Section 3.3(a)
Company Warrant                                     Section 2.7
Contract                                            Section 3.6(b)
Continuing Employees                                Section 6.3(a)
DGCL                                                Recitals
Dissenting Shares.                                  Section 2.5
Effective Time                                      Section 1.3
Employee Plans                                      Section 3.11(a)

                                       v
<PAGE>

Environmental Laws                                  Section 3.13(d)(i)
Environmental Permits                               Section 3.13(d)(ii)
ERISA                                               Section 3.11(a)
ERISA Affiliate                                     Section 3.11(a)
Exchange Act                                        Section 4.4(c)
Exchange Agent                                      Section 2.3(a)
Excluded Parent Shares                              Section 2.1(l)(ii)
Feasibility Study, Option and License Agreement     Section 2.1(l)(i)
Fiduciary                                           Section 3.11(e)
Form S-4                                            Section 6.1(a)
GAAP                                                Section 3.5
Government Entities                                 Section 3.4(c)
Governmental Entity                                 Section 3.4(c)
Hazardous Substances                                Section 3.13(d)(iii)
Indemnified Parties                                 Section 6.6(a)
Indebtedness                                        Section 3.6(b)(xii)
Initial Lock-Up Period                              Section 2.1(j)
Intellectual Property                               Section 3.4(a)
IRS                                                 Section 3.11(g)
ISO                                                 Section 2.6(a)
knowledge                                           Section 9.3(e)
Letter of Transmittal                               Section 2.3(b)
Liens                                               Section 3.2
Lock-Up Period                                      Section  2.1(j)
material adverse change                             Section 9.3(b)
material adverse effect                             Section 9.3(b)
Merger                                              Recitals
Merger Consideration                                Section 2.1(h)
Merger Sub                                          Preamble
Multi-Employer Plans                                Section 3.11(d)
NCBCA                                               Recitals
Other Company Documents                             Section 3.8(c)
Other Parent Documents                              Section 4.8(c)
Parent                                              Preamble
Parent Acquisition Proposal                         Section 5.5(a)
Parent Authorized Preferred Stock                   Section 4.3
Parent Common Stock                                 Section 4.3(a)
Parent Contracts                                    Section 4.6
Parent Disclosure Schedule                          Article IV
Parent Employee Plans                               Section 4.11(a)
Parent Employee Stock Options                       Section 4.3(b)
Parent SEC Documents                                Section 4.5
Parent Stock Plans                                  Section 4.3(a)
Permits                                             Section 3.8(a)
Permitted Liens                                     Section 3.9(b)
Permitted Parent Action                             Section 5.4

                                       vi
<PAGE>

person                                              Section 9.3(c)
Preferred Merger Consideration                      Section 2.1(g)
Proxy/Information Statement                         Section 6.1(a)
Qualified Financing                                 Section 2.1(l)(iii)
Related Person                                      Section 3.16
Release                                             Section 3.13(d)(iv)
Requisite Regulatory Approvals                      Section 7.1(b)
Resale Prospectus                                   Section 6.1(a)
Residual Merger Consideration                       Section 2.1(l)(iv)
Restraints                                          Section 7.2(c)
SEC                                                 Section 2.6(c)
Secretary                                           Section 1.3
Securities Act                                      Section  2.1(j)
Series A Merger Consideration                       Section 2.1(c)
Series B Merger Consideration                       Section 2.1(d)
Series C Merger Consideration                       Section 2.1(e)
Series D-1 Merger Consideration                     Section 2.1(f)
Series D-2 Merger Consideration                     Section 2.1(g)
Software                                            Section 3.14(a)
SOXA                                                Section 4.5(a)
subsidiary                                          Section 9.3(d)
Surviving Corporation                               Section 1.1
Tangible Personal Property                          Section 3.20
Tax                                                 Section 3.10(i)(i)
Taxes                                               Section 3.10(i)(i)
Tax Return                                          Section 3.10(i)(ii)

                                      vii
<PAGE>

AGREEMENT  AND PLAN OF MERGER (this  "Agreement")  made and entered into on this
11th day of  August  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,  each of Parent, Merger Sub and the Company desire Parent to consummate
a business combination with the Company in a transaction whereby, upon the terms
and subject to the conditions set forth in this Agreement, Merger Sub will merge
with and into the  Company  (the  "Merger"),  each  outstanding  share of common
stock, no par value, of the Company  ("Company Common Stock") (other than shares
cancelled and retired pursuant to Section 2.1(b) and Dissenting Shares), will be
converted  into the right to receive the Common Stock Merger  Consideration  and
each  outstanding  share of  preferred  stock of the Company  (other than shares
cancelled and retired pursuant to Section 2.1(b) and Dissenting  Shares) will be
converted into the right to receive the Preferred Merger Consideration,  and the
Company will be the surviving corporation in the Merger;

WHEREAS,  the Board of Directors of the Company has determined and resolved that
the Merger and all of the transactions contemplated by this Agreement are in the
best  interest of the  holders of Company  Common  Stock and  Company  Preferred
Stock, that the Merger is fair and advisable, and has approved this Agreement in
accordance  with the North Carolina  Business  Corporation  Act, as amended (the
"NCBCA"), and has further resolved to recommend to all holders of Company Common
Stock and Company  Preferred Stock that they  authorize,  approve and adopt this
Agreement and the transactions contemplated hereby; and

WHEREAS,  the Board of Directors of Parent has  determined and resolved that the
Merger and all of the  transactions  contemplated  by this  Agreement are in the
best  interest of Parent and the holders of Parent  Common Stock and has adopted
this  Agreement in  accordance  with the Delaware  General  Corporation  Law, as
amended (the "DGCL"), and Parent, as sole shareholder of Merger Sub, has adopted
this Agreement 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:

                                    ARTICLE I

                                   THE MERGER

      SECTION 1.1 THE MERGER.  Upon the terms and subject to the  conditions set
forth in this Agreement and in accordance  with the NCBCA, at the Effective Time
Merger Sub shall be merged with and into the  Company  and the Company  shall be
the surviving  corporation in the Merger (the "Surviving  Corporation")  and, as
such,  the Company shall  continue its corporate  existence as a direct,  wholly
owned  subsidiary of Parent under the laws of the State of North  Carolina,  and
the separate corporate existence of Merger Sub thereupon shall cease.

<PAGE>

      SECTION  1.2  CLOSING.  Subject  to the  satisfaction  or,  to the  extent
permitted by applicable  law,  waiver of the conditions to  consummation  of the
Merger  contained  in  Article  VII  hereof,  the  closing  of the  Merger  (the
"Closing")  shall  take  place at 10:00  a.m.,  New York  time,  on a date to be
specified by the parties  (the  "Closing  Date"),  which date shall not be later
than the third  business day next following the  satisfaction  or, to the extent
permitted by applicable  law,  waiver of the conditions set forth in Article VII
(other than those  conditions  that by their  nature are to be  satisfied at the
Closing,  but  subject  to the  fulfillment  or,  to  the  extent  permitted  by
applicable  law,  waiver of those  conditions),  unless  another time or date is
agreed to by the  parties  hereto.  The  Closing  will be held at the offices of
Parent at 712 Fifth  Avenue,  19th  Floor,  New York,  New York 10019 or at such
other location as is agreed to by the parties hereto.

      SECTION 1.3 EFFECTIVE  TIME.  Upon the terms and subject to the conditions
set forth in this  Agreement,  at the Closing the parties shall cause the Merger
to be  consummated  by filing with the  Secretary of State of the State of North
Carolina (the  "Secretary")  articles of merger (the  "Articles of Merger") duly
executed  and so filed in  accordance  with the NCBCA  and shall  make all other
filings and recordings required under the NCBCA to effectuate the Merger and the
transactions  contemplated by this Agreement.  The Merger shall become effective
at such time as the Articles of Merger is duly filed with the  Secretary,  or at
such subsequent date or time as Parent and the Company  mutually shall agree and
specify in the  Articles  of Merger  (the time the Merger  becomes so  effective
being hereinafter referred to as the "Effective Time").

      SECTION 1.4 EFFECTS OF THE MERGER.  The Merger  shall have the effects set
forth in Section 55-11-06 of the NCBCA.

      SECTION 1.5  CERTIFICATE  OF  INCORPORATION  AND BY-LAWS OF THE  SURVIVING
CORPORATION. The certificate of incorporation of the Surviving Corporation shall
be amended and restated to mirror the certificate of incorporation of the Merger
Sub and as so amended shall be the certificate of incorporation of the Surviving
Corporation  until  thereafter  amended or restated  as  provided  therein or by
applicable  law.  The by-laws of Merger Sub in effect  immediately  prior to the
Effective  Time  shall  be  the  by-laws  of  the  Surviving  Corporation  until
thereafter amended or restated as provided therein or by applicable law.

      SECTION 1.6  DIRECTORS  AND  OFFICERS.  The directors of Merger Sub at the
Effective  Time  shall,  from and after the  Effective  Time,  be and become the
directors of the Surviving  Corporation  until their  successors shall have been
duly elected and qualified or until their earlier death,  resignation or removal
in accordance with the certificate of incorporation and by-laws of the Surviving
Corporation  and the NCBCA.  The  officers of Merger Sub at the  Effective  Time
shall,  from and after the  Effective  Time,  be and become the  officers of the
Surviving  Corporation until their successors shall have been duly appointed and
qualified or until their  earlier  death,  resignation  or removal in accordance
with  the  certificate  of  incorporation  and  the  by-laws  of  the  Surviving
Corporation.

                                       9
<PAGE>

                                   ARTICLE II

                    EFFECT OF THE MERGER ON THE CAPITAL STOCK
                        OF THE CONSTITUENT CORPORATIONS;
                            EXCHANGE OF CERTIFICATES

      SECTION 2.1 EFFECT ON CAPITAL STOCK.  At the Effective  Time, by virtue of
the Merger  and  automatically  without  any action on the part of any holder of
capital stock of Parent, Merger Sub or the Company, respectively:

            (A) Capital  Stock of Merger  Sub.  Each then  outstanding  share of
common stock, no par value, of Merger Sub shall be converted into and become one
duly authorized,  validly issued,  fully paid and nonassessable  share of common
stock, no par value, of the Surviving Corporation.

            (B)  Cancellation  of Treasury  Stock and Parent Owned  Stock.  Each
share of Company Common Stock and Company  Preferred  Stock then issued and held
in the  Company's  treasury  and each share of Company  Common Stock and Company
Preferred  Stock  then owned by Parent,  Merger  Sub or any other  wholly  owned
subsidiary  of Parent,  shall be canceled  and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.

            (C) Series A Convertible Exchangeable Preferred Stock. Each share of
the Series A Convertible  Exchangeable  Preferred  Stock,  no par value,  of the
Company ("Company Series A Preferred Stock") issued and outstanding  immediately
prior to the Effective Time (other than shares cancelled and retired pursuant to
Section  2.1(b) and Dissenting  Shares),  shall be converted into and become the
right to receive,  subject to Section  2.2,  0.000041762166263%  of the Residual
Merger Consideration (the "Series A Merger Consideration").

            (D) Series B Convertible Exchangeable Preferred Stock. Each share of
the Series B Convertible  Exchangeable  Preferred  Stock,  no par value,  of the
Company ("Company Series B Preferred Stock") issued and outstanding  immediately
prior to the Effective Time (other than shares cancelled and retired pursuant to
Section  2.1(b) and Dissenting  Shares),  shall be converted into and become the
right to receive,  subject to Section  2.2,  0.000029233509085%  of the Residual
Merger Consideration (the "Series B Merger Consideration").

            (E) Series C Convertible Preferred Stock. Each share of the Series C
Convertible  Preferred  Stock, no par value, of the Company  ("Company  Series C
Preferred Stock") issued and outstanding immediately prior to the Effective Time
(other  than  shares  cancelled  and  retired  pursuant  to  Section  2.1(b) and
Dissenting  Shares),  shall be  converted  into and become the right to receive,
subject to Section 2.2,  0.000002923350909% of the Residual Merger Consideration
(the "Series C Merger Consideration").

            (F) Series D-1 Convertible Preferred Stock. Each share of the Series
D-1 Convertible  Preferred Stock, no par value, of the Company  ("Company Series
D-1 Preferred Stock") issued and outstanding  immediately prior to the Effective
Time (other than shares  cancelled  and retired  pursuant to Section  2.1(b) and
Dissenting  Shares),  shall be  converted  into and become the right to receive,
subject to Section 2.2,  1.111111111  shares of Parent Common Stock (the "Series
D-1 Merger  Consideration").  The  "Aggregate  Series D-1 Merger  Consideration"
shall be calculated by  multiplying  (i) the number of shares of Company  Series
D-1 Preferred Stock outstanding immediately prior to the Effective Time and (ii)
the Series D-1 Merger Consideration.

                                       10
<PAGE>

            (G) Series D-2 Convertible Preferred Stock. Each share of the Series
D-2 Convertible  Preferred Stock, no par value, of the Company  ("Company Series
D-2 Preferred Stock") issued and outstanding  immediately prior to the Effective
Time (other than shares  cancelled  and retired  pursuant to Section  2.1(b) and
Dissenting  Shares),  shall be  converted  into and become the right to receive,
subject to Section 2.2,  0.761904487  shares of Parent Common Stock (the "Series
D-2 Merger Consideration,  together with the Series A Merger Consideration,  the
Series B Merger Consideration,  the Series C Merger Consideration and the Series
D-1 Merger Consideration, the "Preferred Merger Consideration").  The "Aggregate
Series D-2 Merger  Consideration"  shall be  calculated by  multiplying  (i) the
number of shares of Company Series D-2 Preferred Stock  outstanding  immediately
prior to the Effective Time and (ii) the Series D-2 Merger Consideration.

            (H) Company  Common Stock.  Each then  outstanding  share of Company
Common Stock (other than shares cancelled and retired pursuant to Section 2.1(b)
and Dissenting Shares), shall be converted into and become the right to receive,
subject to Section 2.2,  0.000002923350909% of the Residual Merger Consideration
(the "Common Stock Merger  Consideration",  together  with the Preferred  Merger
Consideration,   the   "Merger   Consideration").   The  Common   Stock   Merger
Consideration  includes the amount of Parent Common Stock  reserved for issuance
pursuant to Sections 2.6, 2.7 and 2.8 with respect to the Company Stock Options,
Company Warrants and Company  Convertible  Preferred Notes.  Except as expressly
stated in writing elsewhere in this Agreement, the Merger Consideration consists
exclusively of shares of Parent Common Stock.

            (I) If after the date hereof but prior to the  Effective  Time,  any
holder of Company  Preferred  Stock converts such  preferred  stock into Company
Common Stock,  in accordance  with the terms of such preferred  stock,  then the
Preferred  Merger  Consideration  allocated  to such  preferred  stock  shall be
reallocated to the Common Stock Merger Consideration.

            (J) 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.

                                       11
<PAGE>

            (K) At the  Effective  Time,  the  Company  Preferred  Stock and the
Company Common Stock shall cease to be outstanding and be cancelled and retired.

            (L) As used in this Agreement:

                  (i) "Aggregate Merger Consideration" means the amount equal to
the following:  (a) the sum of the number of Parent Common Stock  outstanding at
the Effective Time, on a fully diluted basis,  less any "Excluded Parent Shares"
as hereinafter  defined, (b) divided by fifty-five percent (55%), (c) multiplied
by forty-five  percent (45%) and (d) less 233,807 shares of Parent Common Stock.
The Aggregate Merger  Consideration shall be further reduced (x) by 85,000, if a
Qualified  Financing is not consummated  prior to or on the Closing Date and (y)
by 85,000,  if the Company does not enter into a Feasibility  Study,  Option and
License  Agreement  as  described  in  Section  3.18 of the  Company  Disclosure
Schedule (the "Feasibility  Study, Option and License Agreement") prior to or on
the Closing Date.

                  (ii)  "Excluded  Parent Shares" means (a) any shares of Parent
Common  Stock  issued in a Qualified  Financing  between the date hereof and the
Effective  Time or (b) any shares of Parent Common Stock that may be issued upon
exercise,  exchange or conversion of (x) any Parent securities sold to investors
in a Qualified  Financing  between the date hereof and the Effective Time or (y)
the warrant to purchase  1,500,000  shares of Parent Common Stock at an exercise
price of $3.00 per share issued to Bioaccelerate, Inc. on August 11, 2004.

                  (iii)  "Qualified  Financing"  means an  equity  financing  by
Parent of at least  $10,000,000  with a minimum  valuation of at least $1.50 per
share of Parent Common Stock.

                  (iv) "Residual Merger Consideration" means the amount equal to
the following:  (a) the Aggregate Merger  Consideration,  (b) less the Aggregate
Series D-1 Merger  Consideration  and (c) less the  Aggregate  Series D-2 Merger
Consideration.

      SECTION 2.2 FRACTIONAL  SHARES.  No certificates  representing  fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange of
Company  Stock  Certificates.  In the event  that a holder  of a  Company  Stock
Certificate  would be  entitled  to  receive in the  Merger a  fractional  share
interest in  exchange  for such  Company  Stock  Certificate,  then (i) any such
fractional  share  greater  than or equal to  one-half of a share (0.5) shall be
rounded up to the next whole  share  number and (ii) any such  fractional  share
less than one-half of a share (0.5) shall be rounded down to the preceding whole
share number.

                                       12
<PAGE>

      SECTION 2.3 EXCHANGE OF CERTIFICATES.

            (A) As soon as reasonably  practicable following the Effective Time,
Parent shall deposit with Parent's transfer agent, Liberty Stock Transfer,  or a
nationally  reputable  bank or trust  company  in the  United  States  as may be
designated by Parent (the "Exchange  Agent"),  for the benefit of the holders of
shares of Company Common Stock and Company  Preferred  Stock and for exchange in
accordance with this Section 2.3, the Aggregate  Merger  Consideration  issuable
pursuant to Section 2.1 less the merger  consideration  allocated  and  reserved
with respect to the (i) Company Stock Options, (ii) Company Warrants,  and (iii)
Company Convertible Promissory Notes.

            (B) As soon as reasonably  practicable after the Effective Time, the
Exchange  Agent  shall  mail to each  holder  of  record  of a  certificate  (or
certificates)   which  immediately  prior  to  the  Effective  Time  represented
outstanding  shares of Company Common Stock or Company  Preferred  Stock, as the
case may be (the  "Company  Stock  Certificates"),  (i) a letter of  transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the  Company  Stock  Certificate(s)  shall  pass,  only upon  delivery of the
Company  Stock   Certificate(s)   (or   affidavits  of  loss  in  lieu  of  such
certificates)  (the "Letter of  Transmittal") to the Exchange Agent and shall be
in such form and have such  other  provisions  as Parent or the  Exchange  Agent
reasonably  may  specify,   together  with  a  substitute  Form  W-9)  and  (ii)
instructions  for use thereof in surrendering  Company Stock  Certificate(s)  in
exchange for the Merger Consideration. Upon surrender to the Exchange Agent of a
Company Stock Certificate in proper form for cancellation,  together with a duly
executed  letter of  transmittal,  the holder of such Company Stock  Certificate
shall  be  entitled  to  receive  in  exchange   therefor  a   certificate   (or
certificates)  representing  such whole number of shares of Parent  Common Stock
such  Company  shareholder  is entitled  to receive  pursuant to Section 2.1 and
Section 2.2 in such  denominations  and  registered in such names as such holder
may  request.  The  shares  represented  by the  Company  Stock  Certificate  so
surrendered  shall  forthwith  be  cancelled.  The Letter of  Transmittal  shall
provide (i)  procedures for holders whose Company Stock  Certificates  are lost,
stolen or destroyed to receive the Merger  Consideration and (ii) procedures for
the  transfer of  ownership  of shares of the Company  Common  Stock that is not
registered  on the  stock  transfer  books and  records  of the  Company.  Until
surrendered  in accordance  with this Section 2.3 and as specified in the Letter
of Transmittal, each Company Stock Certificate shall be deemed at all times from
and after the  Effective  Time to represent  only the right to receive upon such
surrender the Merger Consideration as provided in this Article II.

            (C)  Notwithstanding  any other  provisions  of this  Agreement,  no
dividends or other  distributions  declared or made after the Effective  Time in
respect  of  shares  of  Parent  Common  Stock  having a record  date  after the
Effective  Time shall be paid to the holder of any  unsurrendered  Company Stock
Certificate  until the holder shall surrender such Company Stock  Certificate as
provided in this Section 2.3. Subject to applicable law, following  surrender of
any such  Company  Stock  Certificate,  there shall be paid to the holder of the
certificates  representing  shares of Parent  Common  Stock  issued in  exchange
therefor,  in each case  without any interest  thereon,  (i) at the time of such
surrender,  the amount of dividends  or other  distributions,  if any,  having a
record date after the  Effective  Time  theretofor  payable with respect to such
shares of Parent  Common  Stock and not paid,  less the  amount of all  required
withholding Taxes in respect thereof,  and (ii) at the appropriate  payment date
subsequent to surrender, the amount of dividends or other distributions having a
record date after the Effective Time but prior to the date of such surrender and
having a payment date  subsequent to the date of such surrender and payable with
respect to such shares of Parent Common  Stock,  less the amount of all required
withholding Taxes in respect thereof.

                                       13
<PAGE>

            (D) All shares of Parent  Common  Stock  issued  upon  surrender  of
Company Stock  Certificates  in accordance with this Article II and as specified
in the  Letter of  Transmittal  shall be deemed to have been  issued and paid in
full  satisfaction  of all rights  pertaining  to such shares of Company  Common
Stock or Company  Preferred Stock  represented  thereby and, as of the Effective
Time,  the stock  transfer  books and records of the Company shall be closed and
there shall be no further  registration of transfers on the stock transfer books
and  records  of the  Company  of shares of  Company  Common  Stock and  Company
Preferred Stock  outstanding  immediately prior to the Effective Time. If, after
the Effective Time,  Company Stock  Certificates  are properly  presented to the
Surviving  Corporation  for any reason (but  otherwise in  accordance  with this
Article  II and as  specified  in the  Letter  of  Transmittal),  they  shall be
cancelled and exchanged as provided in this Section 2.3.

            (E) At any time following the six-month anniversary of the Effective
Time,  Parent shall be entitled to require the  Exchange  Agent to deliver to it
any remaining portion of the Merger Consideration not theretofore distributed to
former  holders of shares of Company  Common Stock and Company  Preferred  Stock
(including any interest received with respect thereto and other income resulting
from investments thereof by the Exchange Agent, as directed by Parent), and such
former  holders  shall  be  entitled  to look  only to the  Parent  (subject  to
abandoned  property,  escheat and other similar laws) with respect to the Merger
Consideration and dividends or other distributions with respect to Parent Common
Stock, if any,  payable upon due surrender of their Company Stock  Certificates,
in all cases  without any  interest  thereon and less all  required  withholding
Taxes.  Notwithstanding the foregoing, neither the Parent nor the Exchange Agent
shall be  liable  to any  holder  of a  Company  Stock  Certificate  for  Merger
Consideration (or dividends or distributions in respect thereof)  delivered to a
public  official  pursuant  to any  applicable  abandoned  property,  escheat or
similar law.

      SECTION 2.4 CERTAIN ADJUSTMENTS. If after the date hereof and prior to the
Effective Time and to the extent  permitted by this  Agreement,  the outstanding
shares of Parent Common Stock,  Company Common Stock or Company  Preferred Stock
shall be changed into a different number, class or series of shares by reason of
any  reclassification,  recapitalization  or  combination,  forward stock split,
reverse stock split,  stock  dividend or rights issued in respect of such stock,
or any similar event shall occur (any such action, an "Adjustment  Event"),  the
Merger Consideration shall be adjusted correspondingly to provide to the holders
of Company Common Stock and the Company Preferred Stock the right to receive the
same economic effect as contemplated by this Agreement immediately prior to such
Adjustment   Event  and  Parent's   payment   obligations   likewise   shall  be
correspondingly  adjusted  such that it shall be required to pay and deliver not
more than the aggregate Merger Consideration contemplated by this Agreement. The
parties  acknowledge and agree that Parent intends to increase it's  authorized,
but unissued  securities  pursuant to Section 5.4(a),  and that change shall not
result in any adjustment pursuant to this Section.

                                       14
<PAGE>

      SECTION 2.5 SHARES OF DISSENTING SHAREHOLDERS. Notwithstanding anything in
this  Agreement to the contrary,  any shares of Company Common Stock and Company
Preferred  Stock that are outstanding as of the Effective Time and that are held
by a shareholder who has properly  exercised his appraisal rights under Sections
55-13-20  through  55-13-28 of the NCBCA (the  "Dissenting  Shares) shall not be
converted into the right to receive the Merger Consideration; provided, however,
if any such  holder  shall have  failed to  perfect  or shall  have  effectively
withdrawn or lost such shareholder's  right to dissent from the Merger under the
NCBCA and to receive  such  consideration  as may be  determined  to be due with
respect to such Dissenting Shares pursuant to and subject to the requirements of
the NCBCA,  each share of such holder's Company Common Stock or Preferred Stock,
as the case may be, thereupon shall be deemed to have been converted into and to
have  become,  as of the  Effective  Time,  the right to  receive,  without  any
interest  thereon,  the Common Stock Merger  Consideration  or Preferred  Merger
Consideration  respectively,  in accordance  with Section 2.1. The Company shall
give Parent  prompt  written  notice of (i) all demands for appraisal or payment
for shares of Company  Common Stock or Company  Preferred  Stock received by the
Company  prior to the Effective  Time in accordance  with the NCBCA and (ii) any
settlement or offer to settle any such demands.

      SECTION 2.6 STOCK OPTIONS.

            (A) At the Effective Time each outstanding option to purchase shares
of Company Common Stock (a "Company  Stock Option")  granted under the Company's
1997 stock  option plan and  granted  outside  said plan shall be  automatically
amended  to   constitute   an  option  to  acquire   such  Common  Stock  Merger
Consideration  as the  holder  of such  Company  Stock  Option  would  have been
entitled to receive in the Merger had such holder  exercised  such Company Stock
Option in full immediately prior to the Effective Time; provided,  however, that
with respect to any Company Stock Option which is an incentive  stock option (an
"ISO") within the meaning of Section 422A of the Internal  Revenue Code of 1986,
as amended (the "Code"),  the  determination  of the exercise  price,  number of
shares  purchasable  and terms and  conditions  of vesting shall in all respects
comply with Section 424(a) of the Code.

            (B) As promptly as  practicable  after the  Effective  Time,  Parent
shall deliver to each holder of a Company Stock Option a notice that  accurately
reflects the changes to such options as  contemplated  by subsection (a) of this
Section 2.6.

            (C) The Merger Consideration  allocated to the Company Stock Options
shall be reserved  out of the Common Stock  Merger  Consideration  by Parent for
issuance  upon the exercise of all Company  Stock  Options  after the  Effective
Time.  Notwithstanding the foregoing,  if any Company Stock Option expires or is
forfeited or cancelled,  pursuant to its terms,  after the Effective  Date,  the
Parent Common Stock underlying such stock option shall no longer be reserved and
shall be  released  as  treasury  stock to Parent.  With  respect to such Parent
Common  Stock,  Parent  shall file,  no later than 180 days after the  Effective
Time,  with the  Securities  and  Exchange  Commission  ("SEC")  a  Registration
Statement  on Form  S-8  and 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  exercises of Company  Stock  Options.  Parent
shall also use its best efforts to ensure that all ISO's  continue to qualify as
such at all times after the Effective Time.

                                       15
<PAGE>

      SECTION 2.7 WARRANTS.

            (A) At the Effective  Time, to the extent not exercised prior to the
Effective  Time, each  outstanding  warrant to purchase shares of Company Common
Stock (a "Company  Warrant") set forth on Schedule 2.7 of the Company Disclosure
Schedule  hereof  shall be  automatically  amended  to  constitute  a warrant to
acquire  such Common Stock  Merger  Consideration  as the holder of such Company
Warrants  would have been  entitled  to  receive  in the Merger had such  holder
exercised such Company Warrant in full immediately prior to the Effective Time.

            (B) As promptly as  practicable  after the  Effective  Time,  Parent
shall  deliver  to each  holder of a Company  Warrant a notice  that  accurately
reflects the Common Stock Merger  Consideration  each such holder is entitled to
receive upon the exercise of such holder's Company Warrant.

            (C) 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 2.8.  CONVERTIBLE  PROMISSORY  NOTES.  At the  Effective  Time the
Convertible  Promissory  Note dated  October  19,  1999 of the  Company  and the
Convertible  Promissory Note dated April 14, 2000 of the Company  (collectively,
the "Company Convertible Promissory Notes") shall remain as debt on the books of
the Surviving  Company and Parent shall cause the Surviving  Entity to exchange,
pursuant to the terms of such Company Convertible  Promissory Notes, the Company
Convertible  Promissory  Notes for notes of the  Surviving  Entity.  The  Merger
Consideration  allocated to the Company  Convertible  Promissory  Notes shall be
reserved by Parent for issuance  out of the Common  Stock  Merger  Consideration
upon conversion of the Company Convertible  Promissory Notes after the Effective
Time.  Notwithstanding  the foregoing,  upon the repayment and retirement of the
outstanding debt evidenced by the Company  Convertible  Promissory  Notes,  such
Parent  Common Stock  reserved for issuance  upon the  conversion of the Company
Convertible  Promissory  Notes shall no longer be reserved and shall be released
as treasury stock to Parent.

      SECTION  2.9.  TAX-FREE  REORGANIZATION.  The Merger is  intended  to be a
reorganization within the meaning of Section 368 of the Code, and this Agreement
is  intended  to be a  "plan  of  reorganization"  within  the  meaning  of  the
regulations promulgated under Section 368 of the Code.

                                       16
<PAGE>

      SECTION 2.10.  ISSUANCE OF RESTRICTED  SHARES. 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.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      Except as set forth on the Disclosure Schedule delivered by the Company to
Parent prior to the execution of this Agreement  which hereby is incorporated by
reference in and  constitutes  an integral part of this  Agreement (the "Company
Disclosure   Schedule")  and  making   specific   reference  to  the  particular
subsection(s)  of this Agreement to which exception is being taken,  the Company
hereby represents and warrants to Parent and Merger Sub as follows:

      SECTION 3.1 Organization, Standing and Corporate Power.

            (A) Each of the Company and its  subsidiaries  is a  corporation  or
other legal entity duly organized,  validly  existing and in good standing under
the laws of the  jurisdiction  in which it is  organized  and has the  requisite
corporate or other power,  as the case may be, and requisite  authority to carry
on its  business  as  presently  being  conducted.  Each of the  Company and its
subsidiaries  is duly  qualified or licensed to conduct  business and is in good
standing in each  jurisdiction  listed in Section 3.1 of the Company  Disclosure
Schedule. Each of the Company and its subsidiaries is duly qualified or licensed
to conduct business in each  jurisdiction in which the nature of its business or
the ownership,  leasing or operation of its properties makes such  qualification
or licensing  necessary,  except for those jurisdictions where the failure to be
so  qualified  or  licensed  or to be in good  standing  individually  or in the
aggregate would not reasonably be expected to have a material  adverse effect on
the Company.

            (B) The Company has  delivered or made  available to Parent prior to
the execution of this Agreement  complete and correct copies of the  certificate
of incorporation  and by-laws or other  organizational  documents of the Company
and its  subsidiaries,  as in  effect at the date of this  Agreement,  and which
shall be in effect as of the Closing Date.

      SECTION 3.2 SUBSIDIARIES.  Section 3.2 of the Company Disclosure  Schedule
lists the names and  jurisdiction  of  incorporation  or organization of all the
subsidiaries  of  the  Company,  whether  consolidated  or  unconsolidated.  The
outstanding  securities  of the  subsidiaries  of the  Company  are set forth in
Section 3.2 of the Company  Disclosure  Schedules and all outstanding  shares of
capital stock of, or other equity interests in, each such  subsidiary:  (i) have
been duly authorized, validly issued and are fully paid and nonassessable;  (ii)
are owned directly or

                                       17
<PAGE>

indirectly  by the Company,  free and clear of all pledges,  claims,  liens,
charges,  encumbrances,  adverse claims, mortgages and security interests of any
kind or nature  whatsoever  (collectively,  "Liens");  and (iii) are free of all
other  restrictions  (including  restrictions  on the  right  to  vote,  sell or
otherwise dispose of such capital stock or other ownership interests) that would
prevent the operation by the Surviving Corporation of such subsidiary's business
as  presently  conducted.  Except as set forth  above or in  Section  3.2 of the
Company Disclosure  Schedule,  the Company does not own, directly or indirectly,
any capital stock of or other equity or voting interests in any person.

      SECTION 3.3 CAPITAL STRUCTURE. The authorized capital stock of the Company
consists  of  100,000,000  shares of Company  Common  Stock,  200,000  shares of
Company Series A Preferred  Stock,  200,000 shares of Company Series B Preferred
Stock,  2,500,000 shares of Company Series C Preferred Stock,  2,200,000 Company
Series D-1 shares of Preferred Stock and 4,600,000  shares of Company Series D-2
Preferred Stock. As of the date hereof:

            (A) (i)  23,943,307  shares of Company  Common  Stock are issued and
outstanding;  (ii) no (0) shares of Company Common Stock are held by the Company
in its  treasury  and no  (0)  shares  of  Company  Common  Stock  are  held  by
subsidiaries of the Company; (iii) 5,000,000 shares of Company Common Stock were
reserved for issuance  pursuant to the  Company's  1997  incentive  stock option
plan, agreements and arrangements providing for equity-based compensation to any
director,  employee,  consultant or independent contractor of the Company or any
of  its  subsidiaries  (collectively,  the  "Company  Stock  Plans"),  of  which
4,062,000  shares are  subject to  outstanding  Company  Stock  Options  (iv) an
additional  1,377,360  shares are subject to  outstanding  Company Stock Options
issued  outside the Company Stock Plans and (v)  1,218,046  warrants to purchase
shares of Company Common Stock are issued and outstanding;

            (B) (i)  120,150  shares of  Company  Series A  Preferred  Stock are
issued and outstanding,  (ii) 120,150 shares of Company Series B Preferred Stock
are issued and outstanding, (iii) 1,000,000 shares of Company Series C Preferred
Stock are issued and  outstanding,  (iv)  795,715  shares of Company  Series D-1
Preferred Stock are issued and  outstanding and (v) 2,453,333  shares of Company
Series D-2 Preferred Stock are issued and outstanding;

            (C) Section 3.3 of the Company Disclosure  Schedule lists, as of the
close of business on the date hereof, all outstanding Company Stock Options, the
number of shares  subject to each such  Company  Stock  Option,  the grant date,
exercise price,  term and vesting schedule of each such Company Stock Option and
the names of the holders thereof.

            (D) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and  nonassessable and are
not subject to preemptive rights created by statute,  the Company's  Articles of
Incorporation  as amended by the Articles of Amendment (the "Company's  Articles
of  Incorporation") or any agreement to which the Company is a party or by which
the  Company  may be bound.  Except as set forth in this  Section and except for
changes since the date of this Agreement  resulting from the exercise of Company
Stock Options  outstanding on such date,  there are outstanding (i) no shares of
capital stock or other voting  securities of the Company,  (ii) no securities of
the Company  convertible  into or  exchangeable  for shares of capital  stock or
voting  securities of the Company,  other than the Company  Preferred  Stock and
Company  Convertible  Promissory  Notes, and (iii) no options or other rights to
acquire from the Company, and no obligation of the Company to issue, any capital
stock,  voting  securities or securities  convertible  into or exchangeable  for
capital stock of the Company, other than the Company Warrants.

                                       18
<PAGE>

      SECTION 3.4 AUTHORITY; NONCONTRAVENTION. (A) The Company has the corporate
power and  authority  to  execute,  deliver and perform  this  Agreement  and to
consummate  the  transactions  contemplated  hereby.  Except  for  any  required
approval by the Company's  shareholders in connection  with the  consummation of
the Merger, all corporate acts and proceedings required to be taken by or on the
part of the Company to  authorize  the  Company to execute,  deliver and perform
this Agreement and to consummate the transactions  contemplated hereby have been
duly and validly taken. This Agreement constitutes a valid and binding agreement
of the Company.

            (B) The  execution and delivery of this  Agreement  does not and the
consummation of the transactions  contemplated  hereby will not conflict with or
result in a violation of, or default  (with or without  notice or lapse of time,
or  both)  under,  or give  rise  to a right  of  termination,  cancellation  or
acceleration of any material obligation under (i) any provision of the Company's
Articles of Incorporation,  (ii) any loan or credit agreement,  note,  mortgage,
indenture, lease or other Company Material Contract or (iii) instrument, permit,
license,  judgment,  order, decree, statute, law, ordinance,  rule or regulation
applicable to the Company or its properties or assets.

            (C) The execution,  delivery and  performance by the Company of this
Agreement and the  consummation of the Merger by the Company require no consent,
approval, order or authorization of, action by or in respect of, or registration
or filing with, any  governmental  body,  court,  agency,  official or authority
(each, a "Governmental  Entity," collectively  "Government Entities") other than
the filing of a certificate of merger in accordance with the Secretary.

            (D)  The   execution   and  delivery  of  this   Agreement  and  the
consummation  of the Merger will not result in the creation of any Lien upon any
asset of the Company.

            (E) Except as set forth in Section 3.4(e) of the Company  Disclosure
Schedule, no consent, approval, waiver or other action by any person (other than
the  governmental  authorities  referred to in (b) above)  under any  indenture,
lease, instrument or other material contract, agreement or document to which the
Company is a party or by which the  Company is bound is  required  or  necessary
for, or made necessary by reason of, the execution,  delivery and performance of
this Agreement by the Company or the consummation of the Merger.

      SECTION 3.5 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES. (A) The Company
has  furnished to the Parent true,  correct and complete  copies of: (i) audited
balance sheets of the Company and its  subsidiaries  as of December 31, 2002 and
December  31  2003  and an  unaudited  balance  sheet  of the  Company  and  its
subsidiaries  as of June 30, 2004;  and (ii) audited  income  statements  of the
Company and its  subsidiaries  as of December 31, 2002 and December 31, 2003 and
an  unaudited  income  statement  of the  Company and its  subsidiaries  for the
three-month

                                       19
<PAGE>

periods  ended  March 31,  2004 and June 30, 2004  (collectively,  the  "Company
Financial  Statements").  The Company Financial Statements have been prepared by
the  Company  and  its  subsidiaries  on the  basis  of the  books  and  records
maintained  by the  Company  and its  subsidiaries  in the  ordinary  course  of
business  in a manner  consistently  used and  applied  throughout  the  periods
involved.  The  Financial  Statements  have been  prepared  in  accordance  with
generally  accepted  accounting  principles  ("GAAP") and fairly  present in all
material respects the financial condition of the Company and its subsidiaries as
at the respective dates thereof,  except that the Company and its  subsidiaries'
unaudited  balance  sheet as of June  30,  2004 and  income  statements  for the
three-month periods ended March 31, 2004 and June 30, 2004 are subject to normal
year end adjustments in the ordinary course of business.

            (B)  Except  for  liabilities  (i) set forth in  Section  3.5 of the
Company Disclosure Schedule or (ii) reflected in the Company's audited financial
statements as at, and for the period ending,  December 31, 2003, the Company has
no material liabilities or obligations, whether absolute, accrued, contingent or
otherwise.  Since  December  31,  2003,  the  Company  has  incurred no material
liabilities or obligations,  whether absolute,  accrued, contingent or otherwise
except (x) in the ordinary course of the Company's business consistent with past
practices or (y) in connection  with the  negotiation  and  consummation of this
Agreement and the transactions contemplated hereby.

      SECTION 3.6 COMPANY  CONTRACTS.  (A) Section 3.6 of the Company Disclosure
Schedule lists all Company Material Contracts. Each Company Material Contract is
valid and binding on and  enforceable  against the Company  (or, to the extent a
subsidiary of the Company is a party,  such subsidiary) and, to the knowledge of
the Company,  each other party thereto and is in full force and effect.  Neither
the  Company  nor any of its  subsidiaries  is in  breach or  default  under any
Company Material Contract. Neither the Company nor any subsidiary of the Company
knows  of,  or  has  received  notice  of,  any  violation,  default,  right  of
acceleration of any obligation or loss of a material  benefit under (nor, to the
knowledge of the Company,  does there exist any condition which with the passage
of time or the  giving  of  notice or both  would  result  in such a  violation,
default,  right of acceleration of any obligation or loss of a material benefit,
under) any Company  Material  Contract by any other party thereto.  Prior to the
date hereof, the Company has delivered to Parent true and complete copies of all
Company Material Contracts.

            (B) As used in this Agreement,  "Contract"  shall mean any contract,
note, bond, restrictive agreement of any kind, mortgage,  indenture, evidence of
indebtedness,  guarantee,  make-well or make-whole agreement, license agreement,
lease,  arrangement,  commitment  or other  instrument  or obligation to which a
person or any of its  subsidiaries  is a party or by which such person or any of
its  subsidiaries  is  bound  or to  which  any of such  person's  or any of its
subsidiaries'  assets or  properties  are  subject,  in each  such case  whether
written or oral. As used in this  Agreement,  "Company  Contract" shall mean any
Contract of the Company or any of its  subsidiaries.  As used in this Agreement,
"Company  Material  Contract"  shall mean any Contract  which is material to the
Company including, without limitation, each of the following:

                  (i) any  Contract  that (A)  involves the payment or potential
payment, pursuant to the terms of any such Contract, by or to the Company or any
of its subsidiaries,  of more than $50,000 individually or more than $200,000 in
the  aggregate  and (B) cannot be  terminated  within  thirty (30) calendar days
after giving  notice of  termination  without  resulting in any material cost or
penalty to the Company or any of its subsidiaries;

                                       20
<PAGE>

                  (ii)  any  Contract  which  contains  provisions  which in any
non-de  minimis  manner  restrict,  or may restrict,  the conduct of business as
presently conducted by the Company or any of its subsidiaries;

                  (iii)  any  Contract  restricting  in any way the right of the
Company or any subsidiary to engage in business or to compete in any business;

                  (iv) any Contract providing for the  indemnification or surety
by the Company or any subsidiary of the Company;

                  (v) any strategic  alliance,  revenue sharing joint venture or
partnership agreement of the Company or any subsidiary of the Company;

                  (vi) any  Contract  which  grants  any  right of first or last
refusal  or right of first or last  offer or  similar  right or that  limits  or
purports to limit the ability of the Company or any of its  subsidiaries to own,
operate,  sell, transfer,  pledge or otherwise dispose of any material amount of
assets or business;

                  (vii) any Contract  providing for any material future payments
that are conditioned, in whole or in part, on a change of control of the Company
or any of its subsidiaries;

                  (viii)  any   employment   agreement   or  any   agreement  or
arrangement  with any  officer,  director or key  employee of the Company or any
subsidiary of the Company;

                  (ix) any  Contract of the  Company or any of its  subsidiaries
providing  for or  pertaining  to  employment  or  consultation  services  for a
specified or unspecified term except for (A) Contracts involving payment of less
than  $50,000  individually  or less than  $200,000  in the  aggregate,  and (B)
Contracts which can be terminated  within thirty (30) calendar days after giving
notice of termination  without  resulting in any material cost or penalty to the
Company or any of its subsidiaries,  including, without limitation, any material
severance pay or  post-employment  liabilities  or obligations of the Company or
any of its subsidiaries;

                  (x) any Contract  pertaining  to the use of or granting of any
right to use or  practice  any rights  under any  Intellectual  Property  of the
Company, whether the Company is the licensee or licensor thereunder,  except for
Contracts  under which the Company or any of its  subsidiaries  is a licensee or
"off-the-shelf" software provided that, to the Company's knowledge,  there is no
default under any such Contract;

                  (xi) any Contract  pursuant to which the Company or any of its
subsidiaries leases or uses any real property;

                  (xii) any Contract  relating to Indebtedness of the Company or
any of its subsidiaries in excess of $50,000 or to preferred stock issued by the
Company  or  any  of its  subsidiaries  (other  than  Indebtedness  owing  to or
preferred stock owned by the Company or any

                                       21
<PAGE>

of  its  wholly-owned  subsidiaries).   As  used  in  this  Agreement  the  term
"Indebtedness"  means, with respect to a person,  all obligations of such person
(i) for borrowed money,  (ii) evidenced by notes,  bonds,  debentures or similar
instruments,  (iii) for the deferred  purchase price of goods or services (other
than trade  payables or accruals  incurred in the ordinary  course of business),
(iv) under capital  leases,  (v) in the nature of guarantees of the  obligations
described  in  clauses  (i)  through  (iv) above of any other  person,  and (vi)
make-well or make-whole agreements entered into on behalf of any other person;

                  (xiii) any Contract with distributors, dealers, manufacturers,
manufacturer's representatives,  sales agencies, franchisees, or pre-clinical or
clinical trial testing entities;

                  (xiv) any Contract  relating to (A) the future  disposition or
acquisition  of  any  assets  or  properties  of  the  Company  or  any  of  its
subsidiaries,  other than dispositions or acquisitions in the ordinary course of
business  consistent  with past  practice,  and (B) any  merger or other type of
business combination;

                  (xv) any  Contract  between or among the Company or any of its
subsidiaries,   on  the  one  hand,  and  any  officer,  director,  employee  or
shareholder  of the  Company or any of its  subsidiaries,  or any  affiliate  or
associate  of the Company  (other  than the Company or any of its  subsidiaries,
which  inter-company  transactions  are not the subject of this clause),  on the
other hand;

                  (xvi) any collective bargaining or similar labor Contracts;

                  (xvii) any Contracts that (A) limit or contain restrictions on
the  ability  of  the  Company  or any of its  subsidiaries  to  declare  or pay
dividends  on,  to make any  other  distribution  in  respect  of or to issue or
purchase,  redeem or otherwise acquire its capital stock, to incur Indebtedness,
to incur or suffer  to exist  any  lien,  to  purchase  or sell any  assets  and
properties,  to change the lines of business in which it participates or engages
or to engage in any  business  combination  or (B) require the Company or any of
its subsidiaries to maintain  specified  financial ratios or levels of net worth
or other indicia of financial condition;

                  (xviii)  any  Contract   that  (A)  involves  the  payment  or
potential  payment,  pursuant  to the terms of any such  Contract,  by or to the
Company  or any of its  subsidiaries,  of more than  $50,000  and (B)  cannot be
terminated  within thirty (30) calendar days after giving notice of  termination
without  resulting in any material  cost or penalty to the Company or any of its
subsidiaries; and

                  (xix) any Contract not made in the ordinary course of business
which is  material to the Company  and its  subsidiaries,  taken as a whole,  or
which  reasonably  would be expected (x) to delay the consummation of the Merger
or any of the  transactions  contemplated  by  this  Agreement  or (y) to have a
material adverse effect on the Company.

      SECTION  3.7  ABSENCE OF CERTAIN  CHANGES.  Except for the  execution  and
delivery of this Agreement and the transactions to take place pursuant hereto on
the Closing Date,  since  December 31, 2003, (i) there has not been any material
adverse  change in the Company or any event which  either  individually  or when
aggregated  with other  event(s) has or  reasonably  would be expected to have a
material adverse effect on the Company,  or (ii) there are not, to the Company's
knowledge,  any facts,  circumstances  or events that make it reasonably  likely
that  the  Company  will  not be able to  fulfill  its  obligations  under  this
Agreement in all material  respects.  Without limiting the foregoing,  except as
set forth in  Section  3.7 of the  Company  Disclosure  Schedule,  there has not
occurred between December 31, 2003 and the date hereof: .

                                       22
<PAGE>

            any  declaration,  setting aside or payment of any dividend or other
distribution  in respect of the capital  stock of the Company or any  subsidiary
not wholly owned by the Company, or any direct or indirect redemption,  purchase
or other  acquisition by the Company or any subsidiary of any such capital stock
of or any option or warrant  with respect to the Company or any  subsidiary  not
wholly owned by the Company;

            any  authorization,  issuance,  sale  or  other  disposition  by the
Company or any subsidiary of any shares of capital stock of or option or warrant
with respect to the Company or any subsidiary,  or any modification or amendment
of any right of any holder of any outstanding  shares of capital stock of or any
option or warrant with respect to the Company or any subsidiary;

            (x) any increase in the salary,  wages or other  compensation of any
officer,  employee or consultant of the Company or any  subsidiary  whose annual
salary is, or after giving effect to such change would be,  $50,000 or more; (y)
any  establishment  or  modification  of (A)  targets,  goals,  pools or similar
provisions in respect of any fiscal year under any compensation or benefit plan,
employment  Contract or other  employee  compensation  arrangement or (B) salary
ranges, increase guidelines or similar provisions in respect of any compensation
or benefit plan, employment Contract or other employee compensation arrangement;
or (z) any adoption,  entering  into,  amendment,  modification  or  termination
(partial or complete) of any  compensation  or benefit plan except to the extent
required by applicable law and, in the event compliance with legal  requirements
presented  options,  only to the  extent  that the option  which the  Company or
subsidiary reasonably believed to be the least costly was chosen;

            (A)  incurrences  by the  Company  or any  of  the  subsidiaries  of
Indebtedness  in an aggregate  principal  amount  exceeding  $50,000 (net of any
amounts  discharged  during  such  period),   or  (B)  any  voluntary  purchase,
cancellation,  prepayment  or  complete  or  partial  discharge  in advance of a
scheduled payment date with respect to, or waiver of any right of the Company or
any  subsidiary  under,  any  Indebtedness  of or  owing to the  Company  or any
subsidiary  (in  either  case other than any  Indebtedness  of the  Company or a
subsidiary owing to the Company or a wholly-owned subsidiary);

            any physical damage,  destruction or other casualty loss (whether or
not covered by insurance)  affecting any of the plant, real or personal property
or equipment of the Company or any subsidiary in an aggregate  amount  exceeding
$50,000;

            any  material  change in (x) any  pricing,  investment,  accounting,
financial reporting,  inventory,  credit, allowance or tax practice or policy of
the  Company  or any  subsidiary,  (y) any method of  calculating  any bad debt,
contingency or other reserve of the Company or any  subsidiary  for  accounting,
financial reporting or tax purposes or (z) the fiscal year of the Company or any
subsidiary;

                                       23
<PAGE>

            any write-off or write-down of or any  determination to write off or
down any of the assets and  properties  of the Company or any  subsidiary  in an
aggregate amount exceeding $50,000;

            any acquisition or disposition of, or incurrence of a lien upon, any
assets  and  properties  of the  Company  or any  subsidiary,  other than in the
ordinary course of business consistent with past practice;

            any (x) amendment of the certificate or articles of incorporation or
by-laws (or other comparable  corporate charter documents) of the Company or any
subsidiary, (y) reorganization, liquidation or dissolution of the Company or any
subsidiary  or (z) merger or other type of business  combination  involving  the
Company  or any  subsidiary  and any other  person  (other  than the  Company or
another wholly-owned subsidiary of the Company);

            any entering into, amendment, modification,  termination (partial or
complete)  or granting of a waiver  under or giving any consent  with respect to
any  Contract  which is  required  (or had it been in effect on the date  hereof
would have been required) to be disclosed in the Disclosure Schedule pursuant to
Section 3.6;

            any  lapse,  or  any  material  breach  or  default  under,  or  the
incurrence of any material  penalty or loss or  diminishment of rights under, or
the  occurrence of any event which,  with notice or the passage of time or both,
could constitute the same, with respect to any Company Material Contract;

            capital expenditures or commitments for additions to property, plant
or equipment of the Company and any subsidiary constituting capital assets in an
aggregate amount exceeding $50,000, in the aggregate;

            any  commencement or termination by the Company or any subsidiary of
any line of business;

            any  transaction by the Company or any subsidiary  with any officer,
director,  or shareholder of the Company or any subsidiary,  or any affiliate or
associate of any of them (other than the Company or any  subsidiary)  other than
on an arm's-length basis on terms substantially the same as those available from
unrelated third parties; or

            any  entering  into of an  agreement  to do or  engage in any of the
foregoing after the date hereof.

      SECTION 3.8 PERMITS; COMPLIANCE WITH APPLICABLE LAWS.

            (A) The Company and its subsidiaries own and/or possess all permits,
licenses,  variances,  authorizations,  exemptions,  orders,  registrations  and
approvals of all  Governmental  Entities which are required for the operation of
the respective businesses of the Company and its subsidiaries (the "Permits") as
presently  conducted,  except for those the failure to own or possess

                                       24
<PAGE>

would not  reasonably  be  expected  to have a  material  adverse  effect on the
Company.  Each such Permit is listed in Section  3.8 of the  Company  Disclosure
Schedule.  Each of the Company and its  subsidiaries  is in compliance  with the
terms of its  Permits  and all the  Permits  are in full force and effect and no
suspension,  modification  or  revocation  of any of them is pending  or, to the
knowledge of the Company,  threatened  nor, to the knowledge of the Company,  do
grounds exist for any such action,  except where the failure to be in full force
and effect  individually or in the aggregate would not reasonably be expected to
have a material adverse effect on the Company.

            (B) Each of the Company and its subsidiaries is in compliance in all
respects with all applicable statutes, laws, regulations,  ordinances,  Permits,
rules,  writs,  judgments,  orders,  decrees  and  arbitration  awards  of  each
Governmental Entity applicable to the Company or its subsidiaries,  except where
the failure to be in compliance,  individually  or in the  aggregate,  would not
reasonably be expected to have a material adverse effect on the Company.

            (C) Except for filings with respect to Taxes which is the subject of
Section 3.10,  and not covered by this Section  3.8(c),  the Company and each of
its  subsidiaries  have  filed  all  regulatory   reports,   schedules,   forms,
registrations and other documents,  together with any amendments  required to be
made  with  respect  thereto,   that  they  were  required  to  file  with  each
Governmental Entity (the "Other Company Documents"),  and have paid all fees and
assessments,  if any, due and payable in connection therewith,  except where the
failure to make such payments and filings individually or in the aggregate would
not have a material adverse effect on the Company.

      SECTION  3.9 ABSENCE OF  LITIGATION.  (a) As used in this  Agreement  with
respect to any person,  an  "Action"  is any  litigation,  action,  suit,  case,
proceeding,  administrative  charge or citation,  investigation  or  arbitration
against, relating to, or affecting such person or any of its subsidiaries or any
of  their  respective  assets  or  properties.  Section  3.9(a)  of the  Company
Disclosure  Schedule  contains a true and current  summary  description  of each
pending and, to the Company's  knowledge,  threatened Action with respect to the
Company or any of its subsidiaries.

            (B) Except as disclosed in Section 3.9(b) of the Company  Disclosure
Schedule,  there is no Action relating to the Company or any of its subsidiaries
by or before any Governmental Entity or otherwise pending or, to the best of the
Company's  knowledge,  threatened,  which could reasonably be expected to have a
material adverse effect on the Company, nor are there any facts or circumstances
known to the  Company  or any of its  subsidiaries  which  could  reasonably  be
expected to give rise to any such Action.

            (C) Except as disclosed in Section 3.9(c) of the Company  Disclosure
Schedule,  there is no Action relating to the Company or any of its subsidiaries
by or before any Governmental Entity or otherwise pending or, to the best of the
Company's  knowledge,  threatened,  which could reasonably be expected to delay,
prohibit, make illegal, or have a material adverse effect on the consummation of
this Agreement or the transactions  contemplated  hereby, or the benefits to the
parties hereto intended hereby and thereby.

            (D)  Prior to the  execution  of this  Agreement,  the  Company  has
delivered  to  Parent  all   responses  of  counsel  for  the  Company  and  its
subsidiaries to auditors' requests for information  delivered in connection with
the Company  Financial  Statements  (together with any updates  provided by such
counsel)  regarding  Actions  pending  or  threatened  against,  relating  to or
affecting the Company or any of its subsidiaries.

                                       25
<PAGE>

      SECTION 3.10 TAX MATTERS.

            (A) Each of the Company and each of its  subsidiaries has (i) timely
filed (or there  have been  timely  filed on its  behalf)  with the  appropriate
Governmental  Entities all United  States  federal  income and other Tax Returns
required to be filed by it (giving effect to all  extensions),  except where the
failure  to file any such Tax  Returns  in a timely  fashion or at all would not
reasonably  be expected to have a material  adverse  effect on the Company,  and
such Tax Returns are true, correct and complete in all material  respects;  (ii)
timely  paid in full (or there has been  timely  paid in full on its behalf) all
United States federal income and other material Taxes required to have been paid
by it; and (iii) made adequate provision (or adequate provision has been made on
its behalf) for all accrued Taxes not yet due. The accruals and  provisions  for
Taxes reflected in the Company's Financial Statements are adequate in accordance
with  GAAP  for  all  Taxes  accrued  or  accruable  through  the  date  of such
statements.

            (B) As of the date of this Agreement,  no Federal,  state,  local or
foreign audits, suits or other  administrative  proceedings or court proceedings
are presently  pending with regard to any Taxes or Tax Returns of the Company or
any of its  subsidiaries,  and neither the  Company  nor any  subsidiary  of the
Company  has  received a written  notice of any  material  pending  or  proposed
claims, audits or proceedings with respect to Taxes.

            (C) No deficiency or proposed  adjustment which has not been settled
or otherwise  resolved  for any amount of Tax has been  proposed,  asserted,  or
assessed in writing by any Governmental  Entity against, or with respect to, the
Company or any of its  subsidiaries.  There is no  action,  suit or audit now in
progress,  pending or, to the  knowledge of the Company,  threatened  against or
with  respect to the  Company  or any of its  subsidiaries  with  respect to any
material Tax.

            (D)  Neither  the  Company  nor  any of its  subsidiaries  has  been
included in any  "consolidated,"  "unitary" or "combined" Tax Return (other than
Tax Returns which include only the Company and any of its subsidiaries) provided
for under the laws of the United States,  any foreign  jurisdiction or any state
or locality with respect to Taxes for any taxable year.

            (E) No election  under  Section  341(f) of the Code has been made by
the Company or any of its subsidiaries.

            (F) No claim has been made in writing by any  Governmental  Entities
in a jurisdiction where the Company or any of its subsidiaries does not file Tax
Returns  that any  such  entity  is,  or may be,  subject  to  taxation  by that
jurisdiction.

            (G)  Each of the  Company  and  each of its  subsidiaries  has  made
available to Parent correct and complete  copies of (i) all of their Tax Returns
filed  within the past three  years,  (ii) all audit  reports,  letter  rulings,
technical advice memoranda and similar documents issued by a Governmental Entity
within the past three years  relating to the  Federal,  state,  local or foreign
Taxes due from or with  respect to the Company or any of its  subsidiaries,  and
(iii) any closing  letters or  agreements  entered into by the Company or any of
its subsidiaries with any Governmental Entities within the past three years with
respect to Taxes.

                                       26
<PAGE>

            (H) Neither the Company nor any of its subsidiaries has received any
notice of deficiency or assessment from any  Governmental  Entity for any amount
of Tax that has not been fully settled or satisfied, and to the knowledge of the
Company and its subsidiaries no such deficiency or assessment is proposed.

            (I) For purposes of this Agreement:

                  (i) "Tax" or "Taxes" shall mean shall mean all federal, state,
county,  local,  foreign  and  other  taxes of any kind  whatsoever  (including,
without limitation,  income,  profits,  premium,  excise, sales, use, occupancy,
gross receipts,  franchise,  ad valorem,  severance,  capital levy,  production,
transfer, license, stamp, environmental,  withholding,  employment, unemployment
compensation,  payroll  related  and  property  taxes,  import  duties and other
governmental  charges and  assessments),  whether or not measured in whole or in
part by net income, and including  deficiencies,  interest,  additions to tax or
interest,  and penalties with respect thereto, and including expenses associated
with contesting any proposed adjustment related to any of the foregoing.

                  (ii) "Tax Return" shall mean any return, information report or
filing with  respect to Taxes,  including  any  schedules  attached  thereto and
including any amendments thereof.

      SECTION 3.11 EMPLOYEE BENEFIT PLANS.

            (A) As used in this Agreement,  the term "Employee Plan" shall mean,
with respect to any person, all pension,  stock option, stock purchase,  phantom
stock,  bonus,  compensation,  benefit,  welfare,  profit-sharing,   retirement,
disability,  vacation,  severance,  hospitalization,  medical, surgical, dental,
optical, psychiatric,  insurance,  incentive,  deferred compensation,  death and
other similar fringe or employee benefit plans, funds, programs or arrangements,
whether  written  or oral,  in each of the  foregoing  cases  which  covers,  is
maintained  for the  benefit  of, or  relates  to any or all  current  or former
employees of such person or any other entity (an "ERISA  Affiliate")  related to
such person  under  Section  414(b),  (c),  (m) and (o) of the Code,  including,
without  limitation,  subsidiaries  of such person.  Section 3.11 of the Company
Disclosure  Schedule  contains a true and complete  list of all of the Company's
Employee Plans.  Section 3.11 of the Company Disclosure  Schedule identifies and
includes  but is not limited to, each of the  Company's  Employee  Plans that is
subject to Section 302 or Title IV of the Employee  Retirement  Income  Security
Act of 1974,  as amended  ("ERISA")  or  Section  412 of the Code.  Neither  the
Company nor any ERISA  Affiliate  of the Company  has any  commitment  or formal
plan, whether or not legally binding,  to create any additional Employee Plan or
modify or change any existing Employee Plan other than as may be required by the
express terms of such Employee Plan or applicable law.

            (B) With respect to each Employee Plan that has been qualified or is
intended  or  required to be  qualified  under the Code or that is an  "Employee
Benefit Plan" within the meaning of Section 3.3 of ERISA, such Employee Plan has
been duly approved and adopted by all necessary  and  appropriate  action of the
Board of Directors of the Company (or a duly constituted committee thereof).

                                       27
<PAGE>

            (C) With respect to the Employee Plans,  all required  contributions
for all periods ending before the Closing Date have been or will be paid in full
by the Closing Date.  Subject only to normal  retrospective  adjustments  in the
ordinary course,  all required  insurance  premiums have been or will be paid in
full with regard to such  Employee  Plans for policy  years or other  applicable
policy  periods  ending on or before the Closing Date by the Closing Date. As of
the date hereof, none of the Employee Plans has unfunded benefit liabilities, as
defined in Section 4001(a)(16) of ERISA.

            (D) The Company has no "multi-employer plans," as defined in Section
3(37) or Section  4001(a)(3) of ERISA or Section 414  ("Multi-Employer  Plans"),
and never has had any such plans.

            (E)  With  respect  to  each   Employee   Plan  (i)  no   prohibited
transactions as defined in Section 406 of ERISA or Section 4975 of the Code have
occurred or are expected to occur as a result of the Merger or the  transactions
contemplated by this Agreement, (ii) no action, suit, grievance,  arbitration or
other type of  litigation,  or claim with  respect to the assets of any Employee
Plan (other than routine claims for benefits made in the ordinary course of plan
administration  for which plan  administrative  review  procedures have not been
exhausted)  is  pending  or, to the  knowledge  of the  Company,  threatened  or
imminent against the Company, any ERISA Affiliate or any fiduciary, as such term
is defined in Section 3(21) of ERISA ("Fiduciary"),  including,  but not limited
to, any action,  suit,  grievance,  arbitration or other type of litigation,  or
claim regarding conduct that allegedly  interferes with the attainment of rights
under any  Employee  Plan and (iii) the  Company has no  knowledge  of any facts
which  would  give  rise to or  could  give  rise to any  such  actions,  suits,
grievances,  arbitration or other type of litigation,  or claims with respect to
any Employee Plan. To the knowledge of the Company, neither the Company, nor its
directors, officers, employees or any Fiduciary has any liability for failure to
comply  with ERISA or the Code for any  action or  failure to act in  connection
with the  administration  or investment of such plan. None of the Employee Plans
is subject to any  pending  investigations  or to the  knowledge  of the Company
threatened  investigations from any Governmental Agencies who enforce applicable
laws under ERISA and the Code.

            (F)  Each of the  Employee  Plans  is,  and has  been,  operated  in
accordance  with its terms and each of the Employee  Plans,  and  administration
thereof,  is, and has been in compliance  with the  requirements  of any and all
applicable  statutes,  orders or governmental rules or regulations  currently in
effect,  including,  but not limited to,  ERISA and the Code,  except  where the
failure to comply  individually  or in the  aggregate  would not have a material
adverse  effect on the Company.  All required  reports and  descriptions  of the
Employee Plans (including but not limited to Form 5500 Annual Reports, Form 1024
Application for  Recognition of Exemption  Under Section 501(a),  Summary Annual
Reports and Summary Plan Descriptions) have been timely filed and distributed as
required by ERISA and the Code. Any notices required by ERISA or the Code or any
other state or federal law or any ruling or  regulation  of any state or federal
administrative  agency with respect to the  Employee  Plans,  including  but not
limited to any notices  required by Section 204(h),  Section 606 or Section 4043
of ERISA or Section 4980B of the Code, have been appropriately given.

                                       28
<PAGE>

            (G) The Internal  Revenue Service (the "IRS") has issued a favorable
determination  letter with respect to each Employee Plan intended or required to
be  "qualified"  within the  meaning of Section  401(a) of the Code that has not
been revoked and, to the knowledge of the Company,  no circumstances  exist that
could adversely  affect the qualified  status of any such plan and the exemption
under  Section  501(a)  of the Code of the  trust  maintained  thereunder.  Each
Employee Plan intended to satisfy the requirements of Section 125,  501(c)(9) or
501(c)(17) of the Code has satisfied such requirements in all material respects.

            (H) With respect to each  Employee  Plan to which the Company or any
ERISA  Affiliate made, or was required to make,  contributions  on behalf of any
employee  during the five-year  period ending on the last day of the most recent
plan year end prior to the  Closing  Date,  (i) no  liability  under Title IV or
Section 302 of ERISA has been  incurred  by the  Company or any ERISA  Affiliate
that has not been  satisfied in full,  and (ii) to the knowledge of the Company,
no condition  exists that  presents a material  risk to the Company or any ERISA
Affiliate of incurring any such liability and (iii) the present value of accrued
benefits under such plan, based upon the actuarial  assumptions used for funding
purposes in the most recent  actuarial  report  prepared by such plan's  actuary
with respect to such plan did not exceed,  as of its latest  valuation date, the
then  current  value  of the  assets  of such  plan  allocable  to such  accrued
benefits. No Employee Plan or any trust established  thereunder has incurred any
"accumulated funding deficiency" (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, as of the last day of the most recently
ended fiscal year.

            (I) No Employee Plan provides  medical,  surgical,  hospitalization,
death or similar  benefits  (whether or not insured) for  employees  for periods
extending  beyond their retirement or other  termination of service,  other than
(i)  coverage  mandated  by Section  4980B of the Code,  Section 601 of ERISA or
other  applicable  law,  (ii) death  benefits  under any  "pension  plan," (iii)
benefits the full cost of which is borne by the employee (or his beneficiary) or
(iv) Employee  Plans that can be amended or  terminated  by the Company  without
consent.  The Company  does not have any  current or  projected  liability  with
respect to  post-employment  or  post-retirement  welfare  benefits for retired,
former, or current employees of the Company.

            (J) No material  amounts  payable under the Employee Plans will fail
to be deductible  for Federal income tax purposes by virtue of Section 162(m) of
the Code.

            (K) To the extent  that the  Company or any of its  subsidiaries  is
deemed to be a fiduciary with respect to any Plan that is subject to ERISA,  the
Company or such  subsidiary (i) during the past five years has complied with the
requirements  of  ERISA  and  the  Code in the  performance  of its  duties  and
responsibilities  with  respect to such  employee  benefit plan and (ii) has not
knowingly caused any of the trusts for which it serves as an investment manager,
as defined in Section 3(38) of ERISA, to enter into any  transaction  that would
constitute a "prohibited transaction" under Section 406 of ERISA or Section 4975
of the Code, with respect to any such trusts,  except for transactions  that are
the subject of a statutory or administrative exemption.

            (L) No person  will be  entitled  to a "gross  up" or other  similar
payment in respect of excise  taxes under  Section 4999 of the Code with respect
to the transactions contemplated by this Agreement.

                                       29
<PAGE>

            (M) None of the  Employee  Plans have been  completely  or partially
terminated and none has been the subject of a "reportable event" as that term is
defined in Section  4043 of ERISA.  No amendment  has been  adopted  which would
require  the  Company or any ERISA  Affiliate  to provide  security  pursuant to
Section 307 of ERISA or Section 401(a)(29) of the Code.

      SECTION 3.12 LABOR MATTERS.

            (A) With respect to  employees of the Company and its  subsidiaries:
(i) to the knowledge of the Company, no senior executive or key employee has any
plans to terminate employment with the Company or any of its subsidiaries;  (ii)
there is no unfair labor practice charge or complaint against the Company or any
of its  subsidiaries  pending or, to the  knowledge of the Company or any of its
subsidiaries,  threatened before the National Labor Relations Board or any other
comparable Governmental Entity; (iii) there is no demand for recognition made by
any labor  organization  or petition for election  filed with the National Labor
Relations Board or any other comparable Governmental Entity; (iv) there are, and
have been, no collective bargaining agreements;  and (v) there is no litigation,
arbitration  proceeding,  governmental  investigation,   administrative  charge,
citation or action of any kind  pending  or, to the  knowledge  of the  Company,
proposed or threatened  against the Company or any of its subsidiaries  relating
to  employment,  employment  practices,  terms and  conditions  of employment or
wages, benefits, severance and hours.

            (B) 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.

            (C) Section  3.12(c) of the Company  Disclosure  Schedule  lists all
contracts,  agreements,  plans or arrangements covering any employee, officer or
director  of the Company or its  subsidiaries  containing  "change of  control,"
"stay-put,"  transition,  retention,  severance or similar provisions,  and sets
forth the names and titles of all such  employees,  officers or  directors,  the
amounts  payable under such  provisions,  whether such  provisions  would become
payable  as a result of the  Merger and the  transactions  contemplated  by this
Agreement, and when such amounts would be payable to such employees, officers or
directors,  all of which are in writing,  have  heretofore been duly approved by
the Company's  Board of Directors,  and true and complete copies of all of which
have heretofore been delivered to Parent. There is no contract,  agreement, plan
or arrangement (oral or written)  covering any employee,  officer or director of
the Company that individually or collectively  could give rise to the payment of
any amount that would not be deductible pursuant to the terms of Section 280G of
the Code.

                                       30
<PAGE>

      SECTION 3.13  ENVIRONMENTAL  MATTERS.  Except for such matters which would
not,  individually  or in the  aggregate,  reasonably be expected to result in a
material adverse effect on the Company:

            (A) (i) The Company and its  subsidiaries are in compliance with all
applicable  Environmental  Laws;  (ii)  neither  the  Company  nor  any  of  its
subsidiaries  has  received  any  written   communication  from  any  person  or
governmental entity that alleges that the Company or any of its subsidiaries are
not in compliance with applicable  Environmental  Laws; and (iii) there have not
been  any  Releases  in  any  reportable  quantity,   or  in  violation  of  any
Environmental  Law,  of  Hazardous  Substances  by  the  Company  or  any of its
subsidiaries,  or, by any other  party,  at any  property  currently or formerly
owned,  leased  or  operated  by the  Company  or any of its  subsidiaries  that
occurred  during  the  period  of the  Company's  or  any  of its  subsidiaries'
ownership,  lease or  operation  of such  property  or, to the  knowledge of the
Company and its subsidiaries,  prior thereto,  and no property now or previously
owned or leased by the  Company  or any  subsidiary  is listed or  proposed  for
listing on the National Priorities List promulgated pursuant to CERCLA or on any
similar state list of sites requiring investigation or clean-up.

            (B) The Company and its subsidiaries have all Environmental  Permits
necessary for the conduct and operation of their business,  and all such permits
are in good standing or, where applicable, a renewal application has been timely
filed and is pending agency  approval,  and the Company and its subsidiaries are
in compliance  with all terms and conditions of all such  Environmental  Permits
and are not  required  to make any  expenditure  in order to obtain or renew any
Environmental Permits.

            (C) There are no  Environmental  claims  pending  or, to  knowledge,
threatened,  against the Company or any of its subsidiaries, or against any real
or personal  property or operation  that the Company or any of its  subsidiaries
owns, leases or manages.

            (D) Except as set forth on Section 3.13(d) of the Company Disclosure
Schedules,  neither the Company, any of its subsidiaries,  nor, to the knowledge
of the Company and its  subsidiaries,  any prior owner or lessee of any property
now or previously owned or leased by the Company or any subsidiary,  has handled
any Hazardous Substance on any property now or previously owned or leased by the
Company or any subsidiary; and, without limiting the foregoing, to the knowledge
of the Company, (i) no polychlorinated  biphenyl is or has been present, (ii) no
asbestos  is or has been  present,  and (iii) there are no  underground  storage
tanks, active or abandoned.

            (E)  Neither  the  Company nor any  subsidiary  has  transported  or
arranged for the transportation of any Hazardous Substance to any location which
is the subject of any Action that could lead to claims  against  Parent,  Merger
Sub, the Company or any subsidiary for clean-up costs, remedial work, damages to
natural  resources or personal  injury  claims,  including,  but not limited to,
claims under CERCLA.

            (F)  There  are  no  Liens   arising   under  or   pursuant  to  any
Environmental  Law on any real  property  owned or leased by the  Company or any
subsidiary,  and no action of any  Governmental  Authority has been taken or, to
the  knowledge of the Company and the  subsidiaries,  is in process  which could
subject any of such  properties  to such Liens,  and neither the Company nor any
subsidiary would be required to place any notice or restriction  relating to the
presence of any Hazardous  Substance at any property  owned by it in any deed to
such property.

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<PAGE>

            (G)  There  have  been  no  environmental  investigations,  studies,
audits,  tests,  reviews  or other  analyses  conducted  by, or which are in the
possession  of, the Company or any  subsidiary  in  relation to any  property or
facility  now or  previously  owned or leased by the  Company or any  subsidiary
which  have  not  been  delivered  to  Parent  prior  to the  execution  of this
Agreement.

            (H) As used in this Agreement:

                  (i)  "Environmental  Laws"  shall mean any and all binding and
applicable  local,  municipal,  state,  federal or international  law,  statute,
treaty, directive,  decision, judgment, award, regulation, decree, rule, code of
practice, guidance, order, direction, consent, authorization,  permit or similar
requirement,  approval or standard concerning (A) occupational,  consumer and/or
public health and safety,  and/or (B) environmental  matters  (including without
limitation  clean-up  standards  and  practices),  with  respect to  operations,
buildings,  equipment,  soil,  sub-surface strata, air, surface water, or ground
water,  whether set forth in applicable  law or applied in practice,  whether to
facilities such as those of the Company Properties in the jurisdictions in which
the Company  Properties are located or to facilities  such as those used for the
transportation,  storage or disposal of  Hazardous  Substances  generated by the
Company and/or its subsidiaries or otherwise.

                  (ii)  "Environmental  Permits" shall mean Permits  required by
Environmental Laws.

                  (iii) "Hazardous Substances" shall mean any and all chemicals,
materials, substances, wastes, dangerous substances, hazardous substances, toxic
substances, radioactive substances, hazardous wastes, special wastes, controlled
wastes,  oils,  petroleum and petroleum  products,  hazardous  chemicals and any
other materials which are regulated by the Environmental Laws or otherwise found
or determined to be potentially harmful to human health or the environment,  and
any other chemical,  material,  substance or waste,  exposure to which is now or
hereafter prohibited, limited or regulated by any Governmental Authority.

                  (iv)  "Release"  shall mean any  spilling,  leaking,  pumping,
emitting,  emptying,  discharging,  injecting,  escaping,  leaching,  migrating,
dumping or disposing of Hazardous Substances (including, without limitation, the
abandonment  or  discarding of barrels,  containers or other closed  receptacles
containing Hazardous Substances) into the environment.

      SECTION 3.14 INTELLECTUAL PROPERTY.

            (A) Section 3.14(a) of the Company  Disclosure  Schedule sets forth,
for the  Intellectual  Property  (as defined  below) owned by or licensed by the
Company or any of its subsidiaries, a complete and accurate list (including date
of registration, expiration date, and whether owned or licensed) of all U.S. and
foreign (i) patents and patent  applications,  (ii)  trademark  or service  mark
registrations and applications,

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<PAGE>

(iii) copyright registrations and applications,  and (iv) Internet domain names.
The  Company or one of its  subsidiaries  owns or has the valid right to use all
patents and patent applications, trademarks, service marks, trademark or service
mark  registrations  and applications,  trade names,  logos,  designs,  Internet
domain names, slogans and general intangibles of like nature,  together with all
goodwill related to the foregoing, copyrights, copyright registrations, renewals
and  applications,  Software (as defined below),  technology,  trade secrets and
other  confidential  information,  know-how,  proprietary  processes,  formulae,
algorithms,  models  and  methodologies,  licenses,  agreements  and  all  other
proprietary rights  (collectively,  the "Intellectual  Property"),  owned by the
Company or used in the  business of the Company as it  currently  is  conducted.
"Software"  means  any and  all (i)  computer  programs,  including  any and all
software  implementations of algorithms,  models and  methodologies,  whether in
source code or object code, (ii) databases and  compilations,  including any and
all data and collections of data,  whether machine readable or otherwise,  (iii)
descriptions,  flow-charts and other work product used to design, plan, organize
and develop any of the  foregoing,  (iv) the  technology  supporting and content
contained on any owned or operated Internet site(s),  and (v) all documentation,
including user manuals and training materials, relating to any of the foregoing.
The Company and its  subsidiaries  have taken  reasonable  security  measures to
protect the secrecy,  confidentiality and value of their trade secrets.  Neither
the Company nor any  subsidiary  is, or has  received  any notice that it is, in
default  (or with the  giving of  notice  or lapse of time or both,  would be in
default) under any license to use such Intellectual  Property,  nor is there any
default (or any condition  which,  with the giving of notice or lapse of time or
both,  would  constitute a default)  under any license out by the Company of any
such  Intellectual  Property.  This Agreement and the transactions  contemplated
hereby  will not  conflict  with,  or result in a default  in  respect  of, or a
diminishment  of rights with  respect to  (whether  with the giving of notice or
lapse of time or both), any Intellectual Property licensed by the Company.

            (B) All of the Intellectual  Property owned by the Company or one of
its  subsidiaries  is free and clear of all  Liens.  The  Company  or one of its
subsidiaries  is listed in the records of the appropriate  United States,  state
or, to the Company's knowledge,  foreign agency as, the sole owner of record for
each  application  and  registration  listed in Section  3.14(a) of the  Company
Disclosure Schedule.

            (C) All of the  registrations  owned by the  Company  and  listed in
Section  3.14(a) of the  Company  Disclosure  Schedule  are  valid,  subsisting,
enforceable,  in full force and effect,  and have not been  cancelled,  expired,
abandoned or otherwise  terminated and all renewal fees in respect  thereof have
been  duly  paid  and  are  currently  in  compliance   with  all  formal  legal
requirements (including the timely post-registration filing of affidavits of use
and incontestability and renewal  applications).  There is no pending or, to the
Company's  knowledge,  threatened  opposition,  interference,   invalidation  or
cancellation  proceeding  before  any  court or  registration  authority  in any
jurisdiction against the registrations and applications owned by the Company and
listed  in  Section  3.14(a)  of the  Company  Disclosure  Schedule  or,  to the
Company's knowledge, against any other Intellectual Property used by the Company
or its subsidiaries.

            (D) To the  knowledge of the Company,  the conduct of the  Company's
and its subsidiaries'  business as currently conducted or planned by the Company
to be  conducted  does not,  in any  material  respect,  infringe  upon  (either
directly or indirectly such as through  contributory  infringement or inducement
to  infringe),  dilute,  misappropriate  or otherwise  violate any  Intellectual
Property owned or controlled by any third party.

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<PAGE>

            (E) To the Company's knowledge,  no third party is misappropriating,
infringing,  diluting,  or  violating  any  Intellectual  Property  owned  by or
licensed to or by the Company or its  subsidiaries  and no such claims have been
made against a third party by the Company or its subsidiaries.

            (F) Each material item of Software,  which is used by the Company or
its  subsidiaries  in  connection  with the  operation  of their  businesses  as
currently  conducted,  is either (i) owned by the  Company or its  subsidiaries,
(ii)  currently  in the public  domain or  otherwise  available  to the  Company
without  the need of a license,  lease or consent of any third  party,  or (iii)
used under  rights  granted to the  Company or its  subsidiaries  pursuant  to a
written agreement, license or lease from a third party.

      SECTION 3.15 INSURANCE MATTERS.  The Company and its subsidiaries have all
material  primary  insurance with  financially  sound and nationally  recognized
insurance carriers providing  insurance coverage that is customary in amount and
scope  for  other  companies  in the  industry  in  which  the  Company  and its
subsidiaries  operate. All such insurance policies are listed in Section 3.15 of
the Company  Disclosure  Schedule and are in full force and effect, all premiums
due and  payable  thereon  have  been  paid and no  written  or oral  notice  of
cancellation or termination has been received and is outstanding.  The insurance
coverage  provided  by the  policies  listed  in  Schedule  3.15 of the  Company
Disclosure  Schedule will not  terminate or lapse by reason of the  transactions
contemplated  by this  Agreement.  Neither the Company  nor any  subsidiary  has
received notice that any insurer under any policy listed in Schedule 3.15 of the
Company  Disclosure  Schedule  is  denying  liability  with  respect  to a claim
thereunder or defending under a reservation of rights clause.

      SECTION 3.16 TRANSACTIONS WITH AFFILIATES.  Except as disclosed in Section
3.16 of the Company Disclosure  Schedule;  there are (i) no outstanding  amounts
payable  to or  receivable  from,  or  advances  by  the  Company  or any of its
subsidiaries  to,  and  neither  the  Company  nor  any of its  subsidiaries  is
otherwise a creditor of or debtor to, any officer,  director,  or shareholder of
the Company or any of its subsidiaries,  or any affiliate or associate of any of
them (any such person, a "Related Person"), other than as part of the normal and
customary terms of such persons'  employment or service as an officer,  director
or employee of the Company or any of its  subsidiaries;  (ii) no Related  Person
provides or causes to be  provided  any assets,  services or  facilities  to the
Company or any subsidiary; (iii) neither the Company nor any subsidiary provides
or causes to be provided  any  assets,  services  or  facilities  to any Related
Person;  and (iv)  neither  the Company nor any  subsidiary  beneficially  owns,
directly or indirectly, any assets or property of any Related Person, that would
be  required  to be  disclosed  pursuant  to Item 404 of  Regulation  S-K of the
Exchange Act if the Company were subject to Regulation  S-K. Except as disclosed
in Section 3.16 of the Company Disclosure Schedule,  each of the liabilities and
transactions  listed in Section  3.16 of the  Company  Disclosure  Schedule  was
incurred or engaged in, as the case may be, on an arm's-length basis.

      SECTION 3.17 VOTING  REQUIREMENTS.  The affirmative  vote (in person or by
duly  authorized  and valid  proxy at the  Company  Shareholders  Meeting of the
holders of a majority of the  outstanding  shares of Company Common Stock and of
each class or series of Company Preferred Stock in favor of the adoption of this
Agreement  is the  only  vote of the  holders  of any  class  or  series  of the
Company's   capital  stock   required  by  applicable   law  and  the  Company's
organizational instruments to duly effect such adoption.

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<PAGE>

      SECTION 3.18  BROKERS.  Except as set forth in Section 3.18 of the Company
Disclosure Schedule, no broker,  investment banker,  financial advisor,  finder,
consultant  or other  person is entitled to any  broker's,  finder's,  financial
advisor's or other similar fee, compensation or commission, however and whenever
payable, in connection with the Merger and the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company.

      SECTION 3.19 REAL PROPERTY.  (A) Each of the Company and its  subsidiaries
has good and marketable  title in fee simple to all real properties  owned by it
and all buildings,  structures and other improvements  located thereon and valid
leaseholds in all real estate leased by it, other than Permitted Liens.  Section
3.19(a) of the Company Disclosure Schedule sets forth a complete list of all (i)
real property owned by the Company or its subsidiaries as of the date hereof and
(ii) real  property  leased,  subleased,  or  otherwise  occupied or used by the
Company and its Subsidiaries as lessee.

            (B) As used in this  Agreement,  "Permitted  Liens" shall mean:  (i)
Liens for Taxes not yet due or  delinquent  or as to which there is a good faith
dispute and for which there are adequate  provisions on the books and records of
the Company in accordance  with GAAP,  (ii) with respect to real  property,  any
Lien,  encumbrance  or other title defect  which is not in a  liquidated  amount
(whether  material or  immaterial)  and which does not,  individually  or in the
aggregate,  interfere materially with the current use or materially detract from
the value or marketability  of such property  (assuming its continued use in the
manner  in  which  it is  currently  used)  and  (iii)  inchoate  materialmen's,
mechanics',  carriers',  workmen's and repairmen's liens arising in the ordinary
course and not past due and payable or the  payment of which is being  contested
in good faith by appropriate proceedings. As used with respect to real property,
the term  "Permitted  Liens"  shall also include any Lien  reflected  (A) on the
Company's and its subsidiaries'  title reports and (B) in Section  3.19(b)(i) of
the  Company  Disclosure  Schedule,  provided,  that  none  of  the  same  shall
materially interfere with the use of such real property by the Company or any of
its  subsidiaries  as the same is currently used or planned to be used, and that
none of the same  materially  detracts  from  the  economic  value of such  real
property.

      SECTION 3.20 TANGIBLE  PERSONAL  PROPERTY.  Except as would not materially
impair the Company and its operations or the operations of its subsidiaries, the
machinery,  equipment,  furniture, fixtures and other tangible personal property
(the "Tangible Personal  Property") owned,  leased or used by the Company or any
of its  subsidiaries  is in the  aggregate  sufficient  and adequate to carry on
their respective  businesses in all material respects as presently conducted and
is, in the aggregate and in all material respects,  in good operating  condition
and  repair,  normal  wear  and  tear  excepted.  Section  3.20  of the  Company
Disclosure  Schedule lists the Company's  Tangible  Personal  Property  having a
replacement  cost of not less  than  $500 for each  item.  The  Company  and its
subsidiaries  are in  possession  of and have good title to, or valid  leasehold
interests  in or valid  rights  under  contract to use,  the  Tangible  Personal
Property  material to the Company and its  subsidiaries,  taken as a whole, free
and clear of all Liens,  other than Permitted  Liens.  No related party owns any
Tangible  Personal Property utilized by the Company in its business as currently
conducted.

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<PAGE>

      SECTION  3.21  INVESTMENT  COMPANY.  Neither  the  Company  nor any of its
subsidiaries is an investment company required to be registered as an investment
company pursuant to the Investment Company Act.

      SECTION  3.22 BOARD  APPROVAL.  Pursuant  to  meetings  duly  noticed  and
convened in accordance  with all  applicable  laws and at each of which a quorum
was present,  the Board of Directors of the Company,  after full and  deliberate
consideration, has (i) duly approved this Agreement and resolved that the Merger
and the transactions  contemplated hereby are fair to, advisable and in the best
interests of the Company's  shareholders,  (ii)  resolved to recommend  that the
Company's  shareholders  approve  the Merger and the  transactions  contemplated
hereby and (iii) directed that the Merger be submitted for  consideration by the
holders of Company Common Stock and Company Preferred Stock.

      SECTION 3.23 BOOKS AND RECORDS.  Each of the Company and the  subsidiaries
maintains and has maintained  accurate books and records in accordance with GAAP
reflecting its assets and liabilities and accounts,  notes and other receivables
and inventory are recorded  accurately,  and proper and adequate  procedures are
implemented to effect the collection thereof on a current and timely basis.

      SECTION 3.24  ACCURACY OF  INFORMATION.  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.

                                   ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES OF PARENT

      Except as set forth on the Disclosure  Schedule delivered by Parent to the
Company  prior to the  execution  of this  Agreement  which is  incorporated  by
reference in and  constitutes  an integral part of this  Agreement  (the "Parent
Disclosure   Schedule")  and  making   specific   reference  to  the  particular
subsection(s) of this Agreement to which exception is being taken, Parent hereby
represents and warrants to the Company as follows:

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<PAGE>

      SECTION 4.1 ORGANIZATION, STANDING AND CORPORATE POWER.

            (A) Each of Parent, its subsidiaries and Merger Sub is a corporation
or other legal entity duly  organized,  validly  existing  and in good  standing
under  the  laws  of the  jurisdiction  in  which  it is  organized  and has the
requisite  corporate or other power, as the case may be, and requisite authority
to carry on its business as presently  being  conducted.  Each of Parent and its
subsidiaries  is  duly  qualified  or  licensed  to do  business  and is in good
standing in each  jurisdiction  listed in Section  4.1 of the Parent  Disclosure
Schedule.  Each of Parent and its  subsidiaries is duly qualified or licensed to
conduct business in each jurisdiction in which the nature of its business or the
ownership,  leasing or operation of its properties  makes such  qualification or
licensing  necessary,  except for those jurisdictions where the failure to be so
qualified or licensed or to be in good standing individually or in the aggregate
would not reasonably be expected to have a material adverse effect on Parent.

            (B) Parent has  delivered or made  available to the Company prior to
the execution of this Agreement  complete and correct copies of the  certificate
of incorporation and by-laws or other  organizational  documents of Parent,  its
subsidiaries  and Merger  Sub, as in effect at the date of this  Agreement,  and
which  shall be in effect as of the  Closing  Date  (subject  to any  amendments
permitted under Section 5.4(a) hereof).

      SECTION  4.2  SUBSIDIARIES.  (A)  Section  4.2  of the  Parent  Disclosure
Schedule lists the names and  jurisdiction of  incorporation  or organization of
all the  subsidiaries of Parent,  whether  consolidated or  unconsolidated.  The
outstanding  securities of the  subsidiaries  of Parent are set forth in Section
4.2 of the Parent  Disclosure  Schedules and all  outstanding  shares of capital
stock of, or other equity interests in, each such subsidiary: (i) have been duly
authorized,  validly  issued and are fully paid and  nonassessable  and (ii) are
owned directly or indirectly by Parent,  free and clear of all Liens.  Except as
set forth above or in Section 4.2 of Parent Disclosure Schedule, Parent does not
own,  directly or  indirectly,  any capital  stock of or other  equity or voting
interests in any person.

            (B) Merger Sub is a newly formed corporation with no material assets
or liabilities,  except for liabilities arising under this Agreement. Merger Sub
will not  conduct  any  business or  activities  other than the  issuance of its
capital stock to Parent prior to the Merger.

      SECTION 4.3 CAPITAL STRUCTURE.  (A) 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

                                       37
<PAGE>

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).

            (B) All shares of capital stock of Parent outstanding as of the date
hereof have been,  and all shares  thereof which may be issued  pursuant to this
Agreement or otherwise will be, when issued,  duly authorized and validly issued
and are fully paid and  nonassessable.  All  shares of  capital  stock of Parent
outstanding  as of the date  hereof  have been,  and all shares  which  shall be
issued as part of the Merger  Consideration will be, when issued, not subject to
preemptive rights created by statute,  the Parent's Articles of Incorporation or
any agreement to which Parent is a party or by which Parent may be bound. Except
as set forth in this  Section  and  except  for  changes  since the date of this
Agreement  resulting  from the  exercise  of  Parent's  employee  stock  options
outstanding on such date,  there are  outstanding (i) no shares of capital stock
or other voting securities of Parent,  (ii) no securities of Parent  convertible
into or exchangeable for shares of capital stock or voting securities of Parent,
and (iii) no options or other rights to acquire from Parent,  and no  obligation
of  Parent  to  issue,  any  capital  stock,  voting  securities  or  securities
convertible into or exchangeable for capital stock of Parent.

            (C) Parent has a sufficient  number of duly  authorized but unissued
shares  of  Parent  Common  Stock to issue the  maximum  number  of such  shares
contemplated by Article II of this Agreement as the Merger Consideration.

      SECTION 4.4  AUTHORITY;  NONCONTRAVENTION.  (A) Parent and Merger Sub have
the corporate power and authority to execute, deliver and perform this Agreement
and to consummate the transactions  contemplated hereby. Except for any required
approval by Parent's  shareholders  in connection  with the  consummation of the
Merger,  all corporate  acts and  proceedings  required to be taken by or on the
part of Parent and Merger Sub to  authorize  Parent and Merger  Sub, as the case
may be, to execute,  deliver and perform this  Agreement and to  consummate  the
transactions  contemplated  hereby  have  been  duly  and  validly  taken.  This
Agreement constitutes a valid and binding agreement of Parent and Merger Sub.

            (B) The  execution and delivery of this  Agreement  does not and the
consummation of the transactions  contemplated  hereby will not conflict with or
result in a violation of, or default  (with or without  notice or lapse of time,
or  both)  under,  or give  rise  to a right  of  termination,  cancellation  or
acceleration of any material  obligation  under (i) any provision of Parent's or
Merger Sub's articles of incorporation, (ii) any loan or credit agreement, note,
mortgage, indenture, lease or other Parent Contract or (iii) instrument, permit,
license,  judgment,  order, decree, statute, law, ordinance,  rule or regulation
applicable to Parent or Merger Sub or their properties or assets.

            (C) The execution, delivery and performance by Parent and Merger Sub
of this  Agreement and the  consummation  of the Merger by Parent and Merger Sub
requires  no  consent,  approval,  order or  authorization  of,  action by or in
respect of, or registration or filing with, any  Governmental  Entity other than
the filing of a certificate of merger in accordance  with the Secretary and with
respect  to Parent,  (ii)  compliance  with any  applicable  requirement  of the
Securities  Exchange  Act of  1934,  as  amended  (the  "Exchange  Act");  (iii)
compliance  with  the  Securities  Act;  and  (iv)  compliance  with  any  state
securities or blue sky laws.

                                       38
<PAGE>

            (D)  The   execution   and  delivery  of  this   Agreement  and  the
consummation  of the Merger will not result in the creation of any Lien upon any
asset of Parent.

            (E) Except as set forth in Section  4.4(e) of the Parent  Disclosure
Schedule, no consent, approval, waiver or other action by any person (other than
the  governmental  authorities  referred to in (b) above)  under any  indenture,
lease,  instrument or other  material  contract,  agreement or document to which
Parent is a party or by which Parent is bound is required or  necessary  for, or
made  necessary by reason of, the  execution,  delivery and  performance of this
Agreement by Parent or the consummation of the Merger.

      SECTION 4.5 PARENT DOCUMENTS. (A) As of their respective filing dates, (i)
Parent's  Annual  Report on Form  10-KSB for its fiscal  year ended  January 31,
2004,  and all  reports,  schedules,  forms,  information  statements  and other
documents  (including  exhibits) filed by Parent with the SEC subsequent to such
fiscal  year end  (together  with all  certifications  required  pursuant to the
Sarbanes-Oxley Act of 2002 ("SOXA"), the "Parent SEC Documents") complied in all
material  respects with the  requirements  of the Securities Act or the Exchange
Act,  as the case may be, and the rules and  regulations  of the SEC  thereunder
applicable to such Parent SEC Documents,  except as amended or supplemented by a
subsequently filed Parent SEC Document, and (ii) no Parent SEC Documents,  as of
their respective  dates,  contained  (except for such matters as were amended or
supplemented by a subsequently filed Parent SEC Document, if any), and no Parent
SEC Document  filed  subsequent to the date hereof through the Closing Date will
contain as of their respective dates, any untrue statement of a material fact or
omitted,  and no Parent SEC  Document  filed  subsequent  to the date hereof and
through  the Closing  Date will omit as of their  respective  dates,  to state a
material fact required to be stated  therein or necessary to make the statements
therein (in the case of  registration  statements of Parent under the Securities
Act, in light of the  circumstances  under which they were made) not  misleading
(excluding,  for information furnished by Company or shareholders of Company for
inclusion  therein,  as to  which  no  representation  or  warranty  is given by
Parent).

            (B) The financial  statements  of Parent  included in the Parent SEC
Documents  (including  the  related  notes)  complied  as to  form,  as of their
respective  dates of filing  with the SEC  (except  as  subsequently  amended or
supplemented  by a subsequent  Parent SEC Document,  if at all), in all material
respects with  applicable  accounting  requirements  and the published rules and
regulations  of the SEC with respect  thereto,  have been prepared in accordance
with  GAAP  (except,  in the  case of  unaudited  statements,  as  permitted  by
Quarterly Report on Form l0-QSB of the SEC) applied on a consistent basis during
the periods and at the dates  involved  (except as may be indicated in the notes
thereto) and fairly present the consolidated  financial  condition of Parent and
its subsidiaries at the dates thereof and the consolidated results of operations
and cash flows for the periods  then ended  (subject,  in the case of  unaudited
statements,  to notes and normal  year-end audit  adjustments  that were not, or
with  respect  to any such  financial  statements  contained  in any  Parent SEC
Documents  to be  filed  subsequently  to the  date  hereof  are not  reasonably
expected to be,  material in amount or effect).  Except for  liabilities (i) set
forth in Section  4.5 of the  Parent  Disclosure  Schedule,  (ii)  reflected  in
Parent's audited financial statements as at, and for the period ending,  January
31, 2004, including,  without limitation, any liabilities described in any notes
thereto (or  liabilities  for which neither  accrual nor footnote  disclosure is
required  pursuant to GAAP),  (iii) incurred in the ordinary  course of business
since  January 31, 2004  consistent  with Parent's  past  practices,  or (iv) in
connection  with the  negotiation  and  consummation  of this  Agreement and the
transactions   contemplated  hereby,  Parent  has  no  material  liabilities  or
obligations,  whether absolute,  accrued,  contingent or otherwise.  Cacciamatta
Accountancy  Corporation,  who have expressed  their opinion with respect to the
financial  statements of Parent and its subsidiaries  included in the Parent SEC
Documents  (including the related notes),  are  independent  public or certified
public accountants as required by the Securities Act and the Exchange Act.

                                       39
<PAGE>

            (C) Each of Parent,  its directors and its senior financial officers
has consulted to the extent  necessary  with Parent's  independent  auditors and
with Parent's outside counsel with respect to, and (to the extent  applicable to
Parent) is familiar in all material  respects with all of the  requirements  of,
SOXA.  Parent  hereby  reaffirms,  represents  and  warrants  to the Company the
matters and statements made in the certifications filed with the SEC pursuant to
Sections  302 and 906 of SOXA  as if  such  certifications  were  made as of the
Closing Date.

            (D) Parent has applied for listing of the Parent Common Stock on the
American  Stock  Exchange  (the  "AMEX").  Parent  shall  use  its  commercially
reasonable efforts to effectuate the listing of the Parent Common Stock on AMEX.
If prior to the Effective  Time,  Parent Common Stock is listed on AMEX,  Parent
shall comply with all the rules and regulations of such exchange.

      SECTION 4.6 PARENT  CONTRACTS.  (A)  Section 4.6 of the Parent  Disclosure
Schedule lists all Parent  Contracts.  Each Parent Contract is valid and binding
on and enforceable against Parent (or, to the extent a subsidiary of Parent is a
party,  such  subsidiary)  and,  to the  knowledge  of Parent,  each other party
thereto  and  is in  full  force  and  effect.  Neither  Parent  nor  any of its
subsidiaries  is in breach or default  under any Parent  Contract.  Neither  the
Parent nor any subsidiary of the Parent knows of, or has received notice of, any
violation,  default,  right  of  acceleration  of any  obligation  or  loss of a
material  benefit under (nor, to the knowledge of the Company,  does there exist
any  condition  which  with the  passage of time or the giving of notice or both
would  result  in  such a  violation,  default,  right  of  acceleration  of any
obligation  or loss of a material  benefit,  under) any Parent  Contract  by any
other party thereto.  Prior to the date hereof, Parent has made available to the
Company true and complete copies of all Parent Contracts.

            (B) As used in this Agreement, "Parent Contracts" shall mean:

                  (i) any  Contract  that (A)  involves the payment or potential
payment,  pursuant to the terms of any such Contract,  by or to Parent or any of
its subsidiaries, of more than $50,000 individually or more than $200,000 in the
aggregate  and (B) cannot be  terminated  within thirty (30) calendar days after
giving notice of termination  without  resulting in any material cost or penalty
to Parent or any of its subsidiaries;

                                       40
<PAGE>

                  (ii)  any  Contract  which  contains  provisions  which in any
non-de  minimis  manner  restrict,  or may restrict,  the conduct of business as
presently conducted by Parent or any of its subsidiaries;

                  (iii) any Contract  restricting in any way the right of Parent
or any subsidiary to engage in business or to compete in any business;

                  (iv) any Contract providing for the  indemnification or surety
by Parent or any of its subsidiaries;

                  (v) any strategic  alliance,  revenue sharing joint venture or
partnership agreement of Parent or any subsidiary of Parent;

                  (vi) any  Contract  which  grants  any  right of first or last
refusal  or right of first or last  offer or  similar  right or that  limits  or
purports  to limit the  ability  of Parent  or any of its  subsidiaries  to own,
operate,  sell, transfer,  pledge or otherwise dispose of any material amount of
assets or business;

                  (vii) any Contract  providing for any material future payments
that are  conditioned,  in whole or in part, on a change of control of Parent or
any of its subsidiaries;

                  (viii)  any   employment   agreement   or  any   agreement  or
arrangement  with  any  officer,  director  or key  employee  of  Parent  or any
subsidiary of Parent;

                  (ix)  any  Contract  of  Parent  or any  of  its  subsidiaries
providing  for or  pertaining  to  employment  or  consultation  services  for a
specified or unspecified term except for (A) Contracts involving payment of less
than  $50,000  individually  or less than  $200,000  in the  aggregate,  and (B)
Contracts which can be terminated  within thirty (30) calendar days after giving
notice of  termination  without  resulting  in any  material  cost or penalty to
Parent or any of its subsidiaries,  including,  without limitation, any material
severance pay or post-employment  liabilities or obligations of Parent or any of
its subsidiaries;

                  (x) any Contract  pertaining  to the use of or granting of any
right to use or practice any rights under any  Intellectual  Property of Parent,
whether  Parent is the  licensee or licensor  thereunder,  except for  Contracts
under which Parent or any of its  subsidiaries is a licensee or  "off-the-shelf"
software  provided  that, to Parent's  knowledge,  there is no default under any
such Contract;

                  (xi)  any  Contract  pursuant  to which  Parent  or any of its
subsidiaries leases or uses any real property;

                  (xii) any Contract  relating to  Indebtedness of Parent or any
of its  subsidiaries in excess of $50,000 or to preferred stock issued by Parent
or any of its subsidiaries  (other than Indebtedness owing to or preferred stock
owned by Parent or any of its wholly-owned subsidiaries);

                                       41
<PAGE>

                  (xiii) any Contract with distributors, dealers, manufacturers,
manufacturer's representatives,  sales agencies, franchisees, or pre-clinical or
clinical trial testing entities;

                  (xiv) any Contract  relating to (A) the future  disposition or
acquisition  of any assets or properties  of Parent or any of its  subsidiaries,
other than  dispositions  or  acquisitions  in the  ordinary  course of business
consistent  with past  practice,  and (B) any merger or other  type of  business
combination;

                  (xv)  any  Contract  between  or  among  Parent  or any of its
subsidiaries,   on  the  one  hand,  and  any  officer,  director,  employee  or
shareholder of Parent or any of its subsidiaries,  or any affiliate or associate
of any Parent (other than Parent or any of its subsidiaries, which inter-company
transactions are not the subject of this clause), on the other hand;

                  (xvi) any collective bargaining agreement or labor contracts;

                  (xvii) any Contracts that (A) limit or contain restrictions on
the ability of Parent or any of its subsidiaries to declare or pay dividends on,
to make any other distribution in respect of or to issue or purchase,  redeem or
otherwise acquire its capital stock, to incur  Indebtedness,  to incur or suffer
to exist any lien, to purchase or sell any assets and properties,  to change the
lines of  business  in which it  participates  or  engages  or to  engage in any
business  combination  or (B)  require  Parent  or any  of its  subsidiaries  to
maintain  specified  financial ratios or levels of net worth or other indicia of
financial condition;

                  (xviii)  any  Contract   that  (A)  involves  the  payment  or
potential payment,  pursuant to the terms of any such Contract,  by or to Parent
or any of its  subsidiaries,  of more than $50,000 and (B) cannot be  terminated
within  thirty (30) calendar  days after giving  notice of  termination  without
resulting in any material cost or penalty to Parent or any of its  subsidiaries;
and

                  (xix) any Contract not made in the ordinary course of business
which is material  to Parent and its  subsidiaries,  taken as a whole,  or which
reasonably  would be expected (x) to delay the consummation of the Merger or any
of the  transactions  contemplated  by this  Agreement or (y) to have a material
adverse effect on Parent.

      SECTION 4.7 ABSENCE OF CERTAIN CHANGES. Except for liabilities incurred in
connection  with this Agreement or the  transactions  contemplated  hereby,  and
except as disclosed  in the Parent SEC  Documents  filed and publicly  available
prior to the date hereof,  since January 31, 2004, there has not been any of the
following:  (i) any material  adverse change in Parent or any event which either
individually or when  aggregated with other event(s) has or reasonably  would be
expected  to have a  material  adverse  effect on  Parent,  or (ii) to  Parent's
knowledge,  any facts,  circumstances  or events that make it reasonably  likely
that Parent will not be able to fulfill its obligations  under this Agreement in
all material  respects,  or (iii) any  occurrence  which would be required to be
disclosed in Parent's  annual report on Form 10-KSB if the end of the period for
which such report was due was the date hereof,  but not including,  with respect
to this  clause  (iii),  disclosure  that would be  reported  only in  financial
statements or notes thereto,  or management's  discussion or analysis concerning
the same, in respect of periods ending on the date hereof.

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<PAGE>

      SECTION 4.8 PERMITS; COMPLIANCE WITH APPLICABLE LAWS.

            (A) Each of Parent and its  subsidiaries  is in compliance  with all
applicable  statutes,  laws,  regulations,  ordinances,  permits,  rules, writs,
judgments,  orders,  decrees or arbitration  awards of any  Governmental  Entity
applicable  to Parent or its  subsidiaries  except  where the  failure  to be in
compliance  individually or in the aggregate  would not have a material  adverse
effect on the Parent.

            (B) Except for  filings  with the SEC and  filings  with  respect to
Taxes,  which are the subject of Sections  4.5 and 4.10,  respectively,  and not
covered by this Section  4.8(b),  the Parent and each of its  subsidiaries  have
filed  all  regulatory  reports,   schedules,  forms,  registrations  and  other
documents,  together  with  any  amendments  required  to be made  with  respect
thereto,  that they were  required  to file with each  Governmental  Entity (the
"Other  Parent  Documents"),  and have  paid all  fees and  assessments  due and
payable in connection therewith,  except where the failure to make such payments
and filings  individually or in the aggregate would not have a material  adverse
effect on the Parent.

      SECTION 4.9 ABSENCE OF LITIGATION. (a) Section 4.9(a) of Parent Disclosure
Schedule contains a true and current summary description of each pending and, to
Parent's  knowledge,  threatened  Action  with  respect  to Parent or any of its
subsidiaries.

            (B)  Except as  disclosed  in  Section  4.9(b) of Parent  Disclosure
Schedule, there is no Action relating to Parent or any of its subsidiaries by or
before any Governmental  Entity or otherwise pending or, to the best of Parent's
knowledge,  threatened,  which could  reasonably  be expected to have a material
adverse  effect on  Parent,  nor are there any facts or  circumstances  known to
Parent or any of its  subsidiaries  which could  reasonably  be expected to give
rise to any such Action.

            (C)  Except as  disclosed  in  Section  4.9(c) of Parent  Disclosure
Schedule, there is no Action relating to Parent or any of its subsidiaries by or
before any Governmental  Entity or otherwise pending or, to the best of Parent's
knowledge,  threatened,  which could reasonably be expected to delay,  prohibit,
make illegal,  or have a material  adverse  effect on the  consummation  of this
Agreement  or the  transactions  contemplated  hereby,  or the  benefits  to the
parties hereto intended hereby and thereby.

            (D) Prior to the execution of this  Agreement,  Parent has delivered
to the  Company all  responses  of counsel  for Parent and its  subsidiaries  to
auditors' requests for information delivered in connection with Parent's audited
financial  statements  for the period ended January 31, 2004  (together with any
updates  provided  by such  counsel)  regarding  Actions  pending or  threatened
against, relating to or affecting the Company or any of its subsidiaries

      SECTION 4.10 TAX MATTERS.

            (A) Each of the Parent and each of its  subsidiaries  has (i) timely
filed (or there  have been  timely  filed on its  behalf)  with the  appropriate
Governmental  Entities all United  States

                                       43
<PAGE>

federal  income and other Tax Returns  required to be filed by it (giving effect
to all  extensions),  except  where the  failure to file any such Tax Returns in
timely  fashion or at all would not  reasonably  be  expected to have a material
adverse  effect,  and such Tax  Returns are true,  correct  and  complete in all
material  respects;  (ii)  timely paid in full (or there has been timely paid in
full on its behalf) all income and other  material  Taxes  required to have been
paid by it; and (iii) made adequate  provision  (or adequate  provision has been
made on its  behalf)  for all  accrued  Taxes  not yet  due.  The  accruals  and
provisions  for Taxes  reflected in the Parent's  audited  consolidated  balance
sheet as of  January  31,  2004  (and the  notes  thereto)  and the most  recent
quarterly  financial   statements  (and  the  notes  thereto)  are  adequate  in
accordance  with  GAAP for all  Taxes  accrued  or  accruable  through  the date
thereof.

            (B) As of the date of this Agreement,  no Federal,  state,  local or
foreign audits, suits or other  administrative  proceedings or court proceedings
are  presently  pending with regard to any Taxes or Tax Returns of the Parent or
any of its subsidiaries, and neither the Parent nor any subsidiary of the Parent
has received a written notice of any material pending or proposed claims, audits
or proceedings with respect to Taxes.

            (C) No claim has been made in writing by any  Governmental  Entities
in a  jurisdiction  where  Parent or any of its  subsidiaries  does not file Tax
Returns  that any  such  entity  is,  or may be,  subject  to  taxation  by that
jurisdiction.

            (D) Neither the Parent nor any of its  subsidiaries has received any
notice of deficiency or assessment from any  Governmental  Entity for any amount
of Tax that has not been fully settled or satisfied, and to the knowledge of the
Parent and its subsidiaries no such deficiency or assessment is proposed.

      SECTION 4.11 EMPLOYEE BENEFIT PLANS.

            (A) Section 4.11 of the Parent  Disclosure  Schedule contains a true
and complete list of all of Parent's and its subsidiaries'  Employee Plans as of
the date hereof ("Parent Employee  Plans").  With respect to the Employee Plans,
all required  contributions  for all periods ending before the Closing Date have
been or will be paid in full by the Closing Date.

            (B) None of the Parent  Employee  Plans is  subject  to any  pending
investigations or to the knowledge of Parent threatened  investigations from any
Governmental Agencies who enforce applicable laws under ERISA and the Code.

            (C) Each of the Parent Employee Plans is, and has been,  operated in
accordance  with  its  terms  and  each  of  the  Parent  Employee  Plans,   and
administration  thereof, is, and has been in compliance with the requirements of
any and all applicable  statutes,  orders or  governmental  rules or regulations
currently in effect,  including,  but not limited to, ERISA and the Code, except
where the failure to comply  individually  or in the aggregate  would not have a
material adverse effect on Parent.

            (D) No material amounts payable under the Parent Employee Plans will
fail to be  deductible  for  Federal  income tax  purposes  by virtue of Section
162(m) of the Code.

                                       44
<PAGE>

            (E) Neither  Parent nor any  subsidiary of Parent has any current or
projected  liability with respect to post-employment or post-retirement  welfare
benefits for retired,  former,  or current employees of Parent or any subsidiary
of Parent.

      SECTION 4.12 LABOR MATTERS.

            (A) With respect to employees (and to the extent applicable,  former
employees) of Parent and its  subsidiaries:  (i) to the knowledge of Parent,  no
senior  executive or key employee  has any plans to  terminate  employment  with
Parent or any of its subsidiaries; (ii) there is no unfair labor practice charge
or  complaint  against  Parent  or any of its  subsidiaries  pending  or, to the
knowledge of Parent or any of its  subsidiaries,  threatened before the National
Labor Relations Board or any other comparable  Governmental  Entity; (iii) there
is no demand for  recognition  made by any labor  organization  or petition  for
election filed with the National Labor Relations  Board or any other  comparable
Governmental  Entity;  (iv) there are, and have been, no  collective  bargaining
agreements; and (v) there is no litigation, arbitration proceeding, governmental
investigation, administrative charge, citation or action of any kind pending or,
to the knowledge of Parent,  proposed or threatened against Parent or any of its
subsidiaries relating to employment,  employment practices, terms and conditions
of employment or wages, benefits, severance and hours.

            (B)  Section  4.12(b) of the Parent  Disclosure  Schedule  lists the
name,  title,  date of  employment  and current  annual  salary of each  current
salaried employee of Parent.

            (C)  Section  4.12(c) of the Parent  Disclosure  Schedule  lists all
contracts,  agreements,  plans or arrangements covering any employee, officer or
director  of  Parent or its  subsidiaries,  all of which  are in  writing,  have
heretofore  been duly approved by the Parent's Board of Directors,  and true and
complete copies of all of which have heretofore been delivered to the Company.

      SECTION 4.13  ENVIRONMENTAL  MATTERS.  Except for such matters which would
not,  individually  or in the  aggregate,  reasonably be expected to result in a
material adverse effect on Parent:

            (A) (i)  Parent  and its  subsidiaries  are in  compliance  with all
applicable  Environmental  Laws; (ii) neither Parent nor any of its subsidiaries
has received any written  communication  from any person or governmental  entity
that alleges that Parent or any of its  subsidiaries  are not in compliance with
applicable Environmental Laws; and (iii) there have not been any Releases in any
reportable  quantity,  or in  violation of any  Environmental  Law, of Hazardous
Substances by Parent or any of its subsidiaries,  or, by any other party, at any
property currently or formerly owned, leased or operated by Parent or any of its
subsidiaries  that  occurred  during  the  period  of  Parent's  or  any  of its
subsidiaries'  ownership,  lease  or  operation  of  such  property  or,  to the
knowledge of Parent and its subsidiaries,  prior thereto, and no property now or
previously owned or leased by Parent or any subsidiary is listed or proposed for
listing on the National Priorities List promulgated pursuant to CERCLA or on any
similar state list of sites requiring investigation or clean-up.

                                       45
<PAGE>

            (B)  Parent  and its  subsidiaries  have all  Environmental  Permits
necessary for the conduct and operation of their business,  and all such permits
are in good standing or, where applicable, a renewal application has been timely
filed and is pending agency  approval,  and Parent and its  subsidiaries  are in
compliance with all terms and conditions of all such  Environmental  Permits and
are not  required  to make  any  expenditure  in order to  obtain  or renew  any
Environmental Permits.

            (C) There are no  Environmental  claims  pending  or, to  knowledge,
threatened,  against Parent or any of its  subsidiaries,  or against any real or
personal  property or  operation  that Parent or any of its  subsidiaries  owns,
leases or manages.

            (D) Neither Parent,  any of its subsidiaries,  nor, to the knowledge
of Parent and its subsidiaries, any prior owner or lessee of any property now or
previously  owned or  leased  by  Parent  or any  subsidiary,  has  handled  any
Hazardous  Substance on any property now or previously owned or leased by Parent
or any  subsidiary;  and,  without  limiting the foregoing,  to the knowledge of
Parent (i) no polychlorinated  biphenyl is or has been present, (ii) no asbestos
is or has been present, and (iii) there are no underground storage tanks, active
or abandoned.

            (E) Neither Parent nor any  subsidiary  has  transported or arranged
for the  transportation of any Hazardous  Substance to any location which is the
subject of any Action that could lead to claims against Parent,  Merger Sub, the
Company or any subsidiary for clean-up costs,  remedial work, damages to natural
resources or personal injury claims, including, but not limited to, claims under
CERCLA.

            (F)  There  are  no  Liens   arising   under  or   pursuant  to  any
Environmental  Law on any  real  property  owned  or  leased  by  Parent  or any
subsidiary,  and no action of any  Governmental  Authority has been taken or, to
the knowledge of Parent and the subsidiaries,  is in process which could subject
any of such  properties  to such Liens,  and neither  Parent nor any  subsidiary
would be required to place any notice or restriction relating to the presence of
any  Hazardous  Substance  at any  property  owned  by it in any  deed  to  such
property.

            (G)  There  have  been  no  environmental  investigations,  studies,
audits,  tests,  reviews  or other  analyses  conducted  by, or which are in the
possession  of, Parent or any subsidiary in relation to any property or facility
now or  previously  owned or leased by Parent or any  subsidiary  which have not
been delivered to the Company prior to the execution of this Agreement.

      SECTION 4.14 INTELLECTUAL PROPERTY.

            (A) Section 4.14(a) of Parent  Disclosure  Schedule sets forth,  for
the Intellectual Property licensed to, or used in the business of, Parent or any
of its  subsidiaries,  a complete and accurate  list of all U.S. and foreign (i)
patents and patent  applications,  (ii) trademark or service mark  registrations
and applications,  (iii) copyright registrations and applications, (iv) Internet
domain  names,  and (v) all licenses  granted to or by Parent for the use of the
foregoing and all license agreements.  To the knowledge of Parent, Parent or one
of its  subsidiaries  has the  valid  right  to use the  Intellectual  Property,
licensed  to  Parent  or used in the  business  of  Parent  as it  currently  is
conducted.

                                       46
<PAGE>

            (B) Neither Parent nor any of its subsidiaries owns any Intellectual
Property  whether  used in its  business or  otherwise  except as  disclosed  in
Section 4.14 of Parent Disclosure  Schedule,  including Parent's rights, if any,
as a licensor under licenses disclosed therein.

            (C)  Except  as  disclosed  in  Section  4.14 of  Parent  Disclosure
Schedule,  all Intellectual  Property utilized in the business of Parent and its
subsidiaries  is pursuant to license  agreements  with third parties,  copies of
which have previously been provided to the Company.  Each such license agreement
listed in Section 4.14 of Parent Disclosure Schedule is valid and binding on and
enforceable against Parent (or, to the extent a subsidiary of Parent is a party,
such subsidiary)  and, to the knowledge of Parent,  each other party thereto and
is in full force and effect.  To the  knowledge of Parent there is no pending or
threatened  opposition,  interference,  invalidation or cancellation  proceeding
before any court or  registration  authority  in any  jurisdiction  against  any
Intellectual Property used by Parent or its subsidiaries.

            (D) To the  knowledge  of Parent,  the conduct of  Parent's  and its
subsidiaries'  business  as  currently  conducted  or  planned  by  Parent to be
conducted does not, in any material  respect,  infringe upon (either directly or
indirectly such as through contributory infringement or inducement to infringe),
dilute,  misappropriate or otherwise violate any Intellectual  Property owned or
controlled by any third party.

            (E) To  Parent's  knowledge,  no third  party  is  misappropriating,
infringing,  diluting,  or violating any Intellectual Property licensed to or by
Parent or its  subsidiaries  and no such claims  have been made  against a third
party by Parent or its subsidiaries.

            (F)  Parent and its  subsidiaries  have  taken  reasonable  security
measures  to  protect  the  secrecy,  confidentiality  and value of their  trade
secrets.  Neither  Parent nor any subsidiary is, or has received any notice that
it is, in default (or with the giving of notice or lapse of time or both,  would
be in default) under any license to use such Intellectual Property, nor is there
any default (or any condition which,  with the giving of notice or lapse of time
or both, would constitute a default) under any license out by Parent of any such
Intellectual Property.  This Agreement and the transactions  contemplated hereby
will not conflict  with, or result in a default in respect of, or a diminishment
of rights with respect to (whether with the giving of notice or lapse of time or
both), any Intellectual Property licensed by Parent.

      SECTION 4.15 INSURANCE  MATTERS.  No later than the Effective Time, Parent
and its subsidiaries  will have all material primary  insurance with financially
sound and nationally recognized insurance carriers providing insurance coverage,
including, but not limited to, directors and officers liability insurance,  that
is  customary  in amount and scope for other  companies in the industry in which
Parent  and  its  subsidiaries  operate.  As of the  Effective  Time,  all  such
insurance  policies  will be in full force and effect and all  premiums  due and
payable thereon will be paid. The insurance  coverage  provided by such policies
will not terminate or lapse by reason of the  transactions  contemplated by this
Agreement. As of the Effective Time, neither Parent nor any subsidiary will have
received notice that any insurer under any policy of Parent is denying liability
with respect to a claim  thereunder or defending  under a reservation  of rights
clause.

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<PAGE>

      SECTION 4.16  TRANSACTIONS  WITH AFFILIATES.  There are (i) no outstanding
amounts  payable to or  receivable  from,  or  advances  by Parent or any of its
subsidiaries  to, and neither Parent nor any of its  subsidiaries is otherwise a
creditor of or debtor to, any officer, director, or shareholder of Parent or any
Related  Person,  other than as part of the normal and  customary  terms of such
persons' employment or service as an officer,  director or employee of Parent or
any of its  subsidiaries;  (ii) no  Related  Person  provides  or  causes  to be
provided any assets,  services or facilities to Parent or any subsidiary;  (iii)
neither Parent nor any subsidiary  provides or causes to be provided any assets,
services or facilities to any Related  Person;  and (iv) neither  Parent nor any
subsidiary beneficially owns, directly or indirectly,  any assets or property of
any Related Person,  which, in the case of clauses (i) - (iv) above, if required
to be  disclosed  in Parent's  Form  10-KSB,  is not so  disclosed.  Each of the
liabilities  and  transactions  identified on Parent's Form 10-KSB or in Section
4.16 of the Parent  Disclosure  Schedule,  if such action occurred after January
31,  2004,  was  incurred or engaged in, as the case may be, on an  arm's-length
basis.

      SECTION 4.17 VOTING  REQUIREMENTS.  The consent or approval of the holders
of the  outstanding  shares of Parent  Common Stock or any other class of Parent
capital  stock is not  required  to  approve  the  Merger  and the  transactions
contemplated   by  this  Agreement   under   applicable  law  and  the  Parent's
organizational instruments.

      SECTION  4.18  BROKERS.  Except as set forth in Section 4.18 of the Parent
Disclosure Schedule, no broker,  investment banker,  financial advisor,  finder,
consultant  or other  person is entitled to any  broker's,  finder's,  financial
advisor's or other similar fee, compensation or commission, however and whenever
payable, in connection with the Merger and the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent or Merger Sub.

      SECTION  4.19   INVESTMENT   COMPANY.   Neither  Parent  nor  any  of  its
subsidiaries is an investment company required to be registered as an investment
company pursuant to the Investment Company Act.

      SECTION  4.20 BOARD  APPROVAL.  Pursuant  to  meetings  duly  noticed  and
convened in accordance  with all  applicable  laws and at each of which a quorum
was  present,  the Board of  Directors  of  Parent,  after  full and  deliberate
consideration,  has duly adopted this Agreement and resolved that the Merger and
the  transactions  contemplated  hereby are in the best  interests  of  Parent's
shareholders.  The Board of  Directors  of  Merger  Sub has duly  approved  this
Agreement and has determined that the Merger is advisable.

      SECTION  4.21  BOOKS  AND  RECORDS.  Each of Parent  and its  subsidiaries
maintains and has maintained  accurate books and records in accordance with GAAP
reflecting its assets and liabilities and accounts,  notes and other receivables
and inventory are recorded  accurately,  and proper and adequate  procedures are
implemented to effect the collection thereof on a current and timely basis.

      SECTION 4.22 ACCURACY OF INFORMATION.  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

                                       48
<PAGE>

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.

                                    ARTICLE V

                    COVENANTS RELATING TO CONDUCT OF BUSINESS

      SECTION  5.1 CONDUCT OF  BUSINESS  BY THE  COMPANY.  Except as required by
applicable  law or  regulation  and  except as  otherwise  contemplated  by this
Agreement,  until  the  earlier  of the  termination  of this  Agreement  or the
Effective Time, the Company shall,  and cause its  subsidiaries to conduct their
respective businesses in the ordinary course and consistent with past practices.
Except  as set forth in  Section  5.1 of the  Company  Disclosure  Schedule,  as
required by applicable law or regulation and except as otherwise contemplated by
this Agreement or except as previously consented to by Parent, in writing, after
the date  hereof  the  Company  shall  not,  and  shall  not  permit  any of its
subsidiaries to:

      (A) amend or otherwise change its certificate of incorporation or by-laws;

      (B) issue, sell, pledge,  dispose of, encumber, or authorize the issuance,
sale, pledge, disposition, grant or encumbrance of (i) any shares of its capital
stock of any class, or options, warrants, convertible securities or other rights
of any kind to acquire  shares of such  capital  stock,  or any other  ownership
interest,  thereof,  other than (x) any  issuance  pursuant  to any  outstanding
security or  agreement of Company,  or (y) any issuance or sale  pursuant to any
plan for or agreement with any officer, director or employee of Company, or (ii)
any of its assets, tangible or intangible;

      (C) declare,  set aside,  make or pay any dividend or other  distribution,
payable in cash,  stock,  property  or  otherwise,  with  respect to its capital
stock;

      (D) (i) reclassify,  combine, split, or subdivide, directly or indirectly,
any of its  capital  stock,  or (ii)  redeem,  purchase  or  otherwise  acquire,
directly or  indirectly,  any of its  capital  stock,  except from any  officer,
director or employee upon termination of such officer, director or employee;

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      (E) (i)  acquire  (including,  without  limitation,  for cash or shares of
stock, by merger, consolidation, or acquisition of stock or assets) any interest
in any  corporation,  partnership  or other  business  organization  or division
thereof or any  assets,  or make any  investment  either by purchase of stock or
securities,  contributions  of capital or property  transfer,  or  purchase  any
property or assets of any other person, (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume,  guarantee or endorse or otherwise
as an accommodation  become  responsible for, the obligations of any person,  or
make any loans or advances, or (iii) enter into any Contract which constitutes a
Company Material Contract;

      (F) make any capital  expenditure or enter into any contract or commitment
therefor;

      (G) amend, terminate or extend any Company Material Contract;

      (H) delay or accelerate  payment of any account payable or other liability
of the  Company  beyond  or in  advance  of its due date or the date  when  such
liability  would have been paid in the  ordinary  course of business  consistent
with past practice;

      (I) take any action,  or permit any event or  condition to occur or exist,
which would cause any representation or warranty of the Company to be untrue; or

      (J) agree,  in  writing  or  otherwise,  to take or  authorize  any of the
foregoing actions or any action which would make any  representation or warranty
contained in Article III untrue or incorrect.

      SECTION  5.2 ADVICE OF CHANGES.  Each of the  Company,  as one party,  and
Parent and Merger Sub,  together as the second party,  shall promptly advise the
other  party  orally and in writing  to the extent it has  knowledge  of (i) any
representation  or  warranty  made by it  contained  in this  Agreement  that is
qualified as to materiality  becoming untrue or inaccurate in any respect or any
such  representation  or warranty  that is not so qualified  becoming  untrue or
inaccurate  in any  material  respect,  (ii) the failure by it to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it  under  this  Agreement;  (iii)  any  suspension,  termination,   limitation,
modification, change or other alteration of any agreement, arrangement, business
or other relationship with any of the Company's or its subsidiaries'  respective
customers,  suppliers or sales or design personnel; and (iv) any change or event
having, or which,  insofar as reasonably can be foreseen,  could have a material
adverse  effect  on  such  party  or on the  accuracy  and  completeness  of its
representations  and  warranties  or the  ability of such  party to satisfy  the
conditions  set  forth  in  Article  VII;  provided,   however,   that  no  such
notification  shall  affect  the  representations,   warranties,   covenants  or
agreements of the parties (or remedies with respect  thereto) or the  conditions
to the  obligations of the parties under this  Agreement;  and provided  further
that a failure to comply with this Section 5.2 shall not constitute a failure to
be satisfied  of any  condition  set forth in Article VII unless the  underlying
untruth,  inaccuracy,  failure to comply or  satisfy,  or change or event  would
independently  result in a failure of a condition set forth in Article VII to be
satisfied.

      SECTION 5.3 NO SOLICITATION BY THE COMPANY.  (A) The Company will promptly
notify  Parent  after  receipt  of any offer or  indication  that any  person is
considering  making an offer with respect to a Company  Acquisition  Proposal or
any request for nonpublic  information  relating to the Company or for access to
the  properties,  books or  records of the  Company  by any  person  that may be
considering  making, or has made, an offer with respect to a Company Acquisition
Proposal  and will keep Parent  fully  informed of the status and details of any
such offer,  indication or request.  "Company  Acquisition  Proposal"  means any
proposal for a merger or other business combination involving the Company or the
acquisition  of any equity  interest in, or a substantial  portion of the assets
of, the Company, other than the transactions contemplated by this Agreement.

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<PAGE>

      (B) From the date hereof until the termination hereof, the Company and the
officers of the Company  will not and the Company  will use its best  efforts to
cause its  directors,  employees  and agents  not to,  directly  or  indirectly,
subject to the directors'  fiduciary  obligations under applicable law, (i) take
any action to solicit, initiate or encourage any offer or indication of interest
from any person or entity with respect to any Company Acquisition Proposal, (ii)
engage in negotiations with, or disclose any nonpublic  information  relating to
the Company or (iii) afford  access to the  properties,  books or records of the
Company to, any person or entity that may be considering making, or has made, an
offer with respect to a Company Acquisition Proposal.

      SECTION  5.4  CONDUCT  OF  BUSINESS  BY  PARENT.  Except  as  required  by
applicable  law or  regulation  and  except as  otherwise  contemplated  by this
Agreement,  until  the  earlier  of the  termination  of this  Agreement  or the
Effective  Time,  Parent  shall,  and cause its  subsidiaries  to conduct  their
respective businesses in the ordinary course and consistent with past practices.
Except  as set  forth in  Section  5.4 of the  Parent  Disclosure  Schedule,  as
required by applicable law or regulation and except as otherwise contemplated by
this Agreement or except as previously  consented to by the Company, in writing,
after  the date  hereof  Parent  shall  not,  and shall  not  permit  any of its
subsidiaries to:

      (A) amend or otherwise change its certificate of incorporation or by-laws,
other than to increase the number of authorized shares of Parent Common Stock or
Parent  preferred  stock, or to otherwise  implement the terms and conditions of
this Agreement, or as permitted by this Agreement;

      (B) issue, sell,  pledge,  dispose of, encumber or authorize the issuance,
sale, pledge disposition,  grant or encumbrance of (i) any shares of its capital
stock of any class, or options, warrants, convertible securities or other rights
of any kind to acquire  shares of such  capital  stock,  or any other  ownership
interest  thereof,  other than (x) any issuance in  connection  with a Qualified
Financing, (y) any issuance pursuant to any outstanding security or agreement of
Parent,  or (z) any issuance or sale pursuant to any plan for or agreement  with
any officer, director or employee of Parent; or (ii) any of its assets, tangible
or intangible,  except pursuant to contracts or agreements  identified in Parent
Disclosure Schedule;

      (C) declare,  set aside,  make or pay any dividend or other  distribution,
payable in cash,  stock,  property  or  otherwise,  with  respect to its capital
stock,  except,  if at all,  with  respect  to  shares  which may be issued in a
Qualified Financing;

      (D) (i) reclassify,  combine, split, or subdivide, directly or indirectly,
any of its  capital  stock,  or (ii)  redeem,  purchase  or  otherwise  acquire,
directly or  indirectly,  any of its  capital  stock,  except from any  officer,
director or employee upon termination of such officer, director or employee;

                                       51
<PAGE>

      (E) (i)  acquire  (including,  without  limitation,  for cash or shares of
stock, by merger, consolidation, or acquisition of stock or assets) any interest
in any  corporation,  partnership  or other  business  organization  or division
thereof or any  assets,  or make any  investment  either by purchase of stock or
securities,  contributions  of capital or property  transfer,  or  purchase  any
property or assets of any other person, (ii) incur any indebtedness for borrowed
money  other than  pursuant to  agreements  disclosed  in the Parent  Disclosure
Schedule,  or issue  any debt  securities  other  than  pursuant  to  agreements
disclosed in the Parent Disclosure  Schedule or assume,  guarantee or endorse or
otherwise as an  accommodation  become  responsible  for, the obligations of any
person,   or   make   any   loans   or   advances   other   than   pursuant   to
licensing/development agreements entered into in the ordinary course of Parent's
business,  consistent  with past  practice,  or (iii)  enter into any new Parent
Contract not otherwise permitted pursuant to this Agreement;

      (F) make any capital  expenditure or enter into any contract or commitment
therefore other than pursuant to  licensing/development  agreements disclosed in
Section 4.6 of the Parent Disclosure Schedule;

      (G) amend, terminate or extend any Parent Contract;

      (H) delay or accelerate  payment of any account payable or other liability
of the  Company  beyond  or in  advance  of its due date or the date  when  such
liability  would have been paid in the  ordinary  course of business  consistent
with past practice;

      (I) take any action,  or permit any event or  condition to occur or exist,
which would cause any representation or warranty of Parent to be untrue; or

      (I) agree,  in  writing  or  otherwise,  to take or  authorize  any of the
foregoing actions or any action which would make any  representation or warranty
contained in Article IV untrue or incorrect.

      Notwithstanding  the  foregoing,  and  anything  to the  contrary  in this
Agreement, the parties acknowledge and agree that Parent may negotiate, execute,
deliver and perform  agreements to establish  customary benefit and compensation
arrangements  for its officers,  directors  and  employees,  appoint  additional
officers or directors and hire new employees and enter into customary agreements
with them, enter in to customary  arrangements to obtain  insurance,  enter into
formal arrangements concerning its occupancy and use of its current headquarters
space in New York, New York, amend,  create and adopt such corporate  governance
policies, procedures, rules and regulations, as may be appropriate in connection
with Parent's listing application or SOXA, take actions which are appropriate or
necessary to enhance the corporate  staffing and operations of Parent,  and take
actions  which are  appropriate  or necessary to  memorialize  the  registration
rights of Parent's  stockholders as heretofore disclosed to Company's management
(each of the  foregoing,  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, provided, that no such Permitted Parent
Action  shall have a material  adverse  effect on Parent and that  Parent  shall
notify the Company of each such Permitted Parent Action. In appointing  officers
or directors between the date of this Agreement and the Closing Date pursuant to
this  paragraph,  Parent  shall only  appoint,  if any at all,  (i)  independent
directors,  (ii) other directors to replace existing directors, and (iii) one or
more  officers  to  replace  functions  currently  performed  by any  officer or
officers being replaced. In no event will any contract with any officer be in an
amount which  individually,  or taken together with all other contracts with any
such newly appointed officers, in the aggregate, is material to Parent.

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<PAGE>

      SECTION 5.5 NO SOLICITATION BY PARENT. (A) Parent will promptly notify the
Company after receipt of any offer or indication  that any person is considering
making an offer with respect to a Parent Acquisition Proposal or any request for
nonpublic information relating to Parent or for access to the properties,  books
or records of Parent by any person that may be considering  making, or has made,
an offer with respect to a Parent Acquisition Proposal and will keep the Company
fully  informed  of the status  and  details of any such  offer,  indication  or
request.  "Parent Acquisition Proposal" means any proposal for a merger or other
business combination  involving Parent or the acquisition of any equity interest
in, or a  substantial  portion  of the  assets  of,  Parent,  other than (a) the
transactions  contemplated by this Agreement or (b) a Qualified  Financing,  (c)
any other  transaction which Parent may enter into without violating Section 5.4
of this Agreement.

      (B) From the date  hereof  until the  termination  hereof,  Parent and the
officers of Parent  will not and Parent  will use its best  efforts to cause its
directors,  employees and agents not to, directly or indirectly,  subject to the
directors'  fiduciary  obligations  under applicable law, (i) take any action to
solicit,  initiate or encourage  any offer or  indication  of interest  from any
person or entity with respect to any Parent Acquisition Proposal, (ii) engage in
negotiations with, or disclose any nonpublic  information  relating to Parent or
(iii) afford access to the properties, books or records of Parent to, any person
or entity that may be considering  making, or has made, an offer with respect to
a Parent Acquisition Proposal.

      SECTION 5.6 TRANSITION.  To the extent permitted by applicable law, Parent
and  the  Company  shall,  and  shall  cause  their   respective   subsidiaries,
affiliates, officers and employees to, use their commercially reasonable efforts
to  facilitate  the  integration  of the Company and its  subsidiaries  with the
businesses  of Parent and its  subsidiaries  to be  effective  as of the Closing
Date.

                                   ARTICLE VI

                              ADDITIONAL AGREEMENTS

      SECTION 6.1 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

                                       53
<PAGE>

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.

            (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.

                                       54
<PAGE>

            (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 6.2  SHAREHOLDERS'  MEETING.  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 6.3 LETTERS OF COMPANY'S  ACCOUNTANTS.  The Company shall cause to
be delivered to Parent two letters from the Company's  independent  accountants,
one dated a date not later than the second  business day next preceding the date
on which the Form S-4 shall become effective and one dated a date not later than
the second  business day next  preceding  the Closing  Date,  each  addressed to
Parent, in form and substance reasonably satisfactory to Parent and customary in
scope  and  substance  for  comfort  letters  delivered  by  independent  public
accountants in connection with registration statements similar to the Form S-4.

      SECTION 6.4 ACCESS TO INFORMATION;  CONFIDENTIALITY. (A) Each party shall,
and  shall  cause its  subsidiaries  to,  afford  to the other  party and to the
officers, current employees,  accountants,  counsel, financial advisors, agents,
lenders and other representatives of such party and its subsidiaries, reasonable
access  during  normal  business  hours during the period prior to the Effective
Time to all its respective properties, books, contracts, commitments,  personnel
and records and, during such period,  each party shall,  and shall cause each of
its  subsidiaries  to,  furnish  promptly  to the other party (a) a copy of each
material report, schedule, registration statement and other document filed by it
with any  Governmental  Entity  and (b) all  other  information  concerning  its
business, properties and personnel as such other party may reasonably request.

                                       55
<PAGE>

            (B) The parties  will hold,  and will use its best  efforts to cause
its officers, directors, employees, consultants, advisors and agents to hold, in
confidence,  unless compelled to disclose by judicial or administrative  process
or by other  requirements  of law, all  confidential  documents and  information
concerning  the other party and its  subsidiaries  furnished to it in connection
with the  transactions  contemplated  hereby,  except  to the  extent  that such
information can be shown to have been (i) previously known on a  nonconfidential
basis by the disclosing party, (ii) in the public domain through no fault of the
disclosing  party, or (iii) later lawfully acquired by the disclosing party from
sources; provided that each party may disclose such information to its officers,
directors,  employees,  consultants,  advisors and agents in connection with the
Merger so long as such persons are informed of the  confidential  nature of such
information  and are  directed to treat such  information  confidentially.  Each
parties' obligation to hold such information in confidence shall be satisfied if
it exercises the same care with respect to such information as it would exercise
to preserve the confidentiality of its own similar information.  Notwithstanding
any other  provision of this  Agreement,  if this Agreement is terminated,  such
confidence shall be maintained and all confidential materials shall be destroyed
or delivered to their owner, upon request.

      SECTION  6.5  COMMERCIALLY  REASONABLE  EFFORTS.  Except  where  otherwise
provided  in this  Agreement,  each party will use its  commercially  reasonable
efforts  to take,  or cause to be taken,  all  action  and to do, or cause to be
done,  all things  necessary,  proper or  advisable  under  applicable  laws and
regulations  to  consummate  the  Merger  as  soon  as  practicable   after  the
satisfaction  of the conditions set forth in Article VIII hereof,  provided that
the  foregoing  shall not require the Company,  Parent or Merger Sub to take any
action or agree to any condition that might,  in the reasonable  judgment of the
Company or Parent,  as the case may be,  have a material  adverse  effect on the
Company or Parent, respectively.

      SECTION 6.6 INDEMNIFICATION,  EXCULPATION AND INSURANCE. (A) All rights to
indemnification and exculpation from liabilities for acts or omissions occurring
at or prior to the Effective Time now existing in favor of the current or former
directors or officers of the Company and its  subsidiaries  as provided in their
respective   certificates   of   incorporation   or   by-laws   (or   comparable
organizational  instruments  and  agreements)  and any existing  indemnification
agreements or arrangements of the Company and its subsidiaries shall survive the
Merger and shall  continue  in full force and  effect in  accordance  with their
terms, and shall not be amended,  repealed or otherwise modified for a period of
five years after the Effective  Time in any manner that would  adversely  affect
the rights thereunder of such individuals for acts or omissions  occurring at or
prior to the Effective Time.

            (B) In the event of any  threatened or actual claim,  action,  suit,
proceeding  or  investigation,   whether  civil,   criminal  or  administrative,
including,  without  limitation,  any such claim,  action,  suit,  proceeding or
investigation  in which any  individual who is now or has been at any time prior
to the date of this  Agreement,  or who becomes prior to the  Effective  Time, a
director or officer of the Company or any of its subsidiaries  (the "Indemnified
Parties"),  is, or is  threatened  to be,  made a party,  or  arising  out of or
pertaining  to (i) the fact that he is or was a  director,  officer  or  current
employee  of  the  Company  or  any  of its  subsidiaries  or  their  respective
predecessors  or (ii) this  Agreement  or any of the  transactions  contemplated
hereby,  whether in any case  asserted or arising  before or after the Effective
Time,  the parties  hereto  agree to  cooperate  and use their  reasonable  best
efforts to defend against and respond thereto.

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            (C) For a period of five (5) years  after the  Effective  Time,  the
Surviving  Corporation  shall  maintain  in  effect  the tail  insurance  policy
purchased by the Company  prior to the  Effective  Time  providing the Company's
current directors' and officers'  liability insurance covering acts or omissions
occurring prior to the Effective  Time;  provided,  however,  that the Surviving
Corporation  may  substitute  therefor  policies  of Parent or its  subsidiaries
(including  self-insurance)  containing  terms with respect to scope of coverage
and  amount no less  favorable  to such  directors  or  officers;  and  provided
further,  that Surviving Corporation shall not be obligated to maintain any such
insurance to the extent that doing so would require  payments in addition to the
amounts  paid  for  that  tail  insurance  policy  by the  Company  prior to the
Effective Time.

            (D) From and after the  Effective  Time,  the Parent shall cause the
Surviving Corporation to maintain in effect a directors' and officer's liability
insurance policy covering acts or omissions occurring after the Effective Time.

            (E) Parent shall cause the  Surviving  Corporation  or any successor
thereto,  whether by  consolidation,  merger or transfer of substantially all of
its properties or assets, to comply with its obligations under this Section 6.6.
The  provisions  of this Section 6.6 shall  survive the  Effective  Time and are
intended to be for the benefit of, and shall be enforceable by, each Indemnified
Party and other person named herein and his or her heirs and representatives.

            (F) Prior to the  Effective  Time Parent shall obtain the  insurance
policies required by Section 4.15 hereof.

      SECTION 6.7 FEES AND EXPENSES.  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.

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      SECTION 6.8 PUBLIC  ANNOUNCEMENTS.  Parent and the Company  shall  consult
with each other before issuing,  and shall provide each other the opportunity to
review,  comment  upon  and  concur  with any  press  release  or  other  public
statements or announcements (including pursuant to Rule 165 under the Securities
Act and Rule 14a-12 under the Exchange Act) and any broadly distributed internal
communications  with respect to the Merger,  this Agreement and the transactions
contemplated  by this  Agreement,  and shall not issue any such press release or
make any such  public  statement  or  announcement  prior to such  consultation,
except as either  party may  determine  is required  by  applicable  law,  court
process or by  obligations  pursuant to any listing  agreement with any national
securities  exchange or inter-dealer  quotation system of a registered  national
securities association (provided prior notice is given to the other party with a
copy of any such disclosure).

      SECTION 6.9 CORPORATE GOVERNANCE OF PARENT. At the Effective Time,

            (A) Parent's  principal place of operations shall be in the State of
North  Carolina and the Parent may maintain its  corporate  headquarters  in New
York, New York.

            (B) 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  Christopher
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.

            (C) Christopher  Every will continue as Chief  Executive  Officer of
Parent pursuant to an Employment  Agreement  substantially  in the form attached
hereto as Exhibit C.

            (D) Parent's  Board of Directors  shall appoint  Kwen-Jen  Chang and
Phillip S. Wise as officers of the Parent  pursuant  to  employment  agreements,
substantially in the form attached hereto as Exhibits D and E, respectively.

            (E) Prior to the  Effective  Time,  the Parent will be in compliance
with the  provisions  of SOXA  applicable  to it as of such  time and will  have
implemented such programs and will have taken reasonable  steps, upon the advice
of the Parents independent auditors and outside counsel, respectively, to ensure
Parent's  future  compliance  with all  provisions  of SOXA  which  will  become
applicable to Parent after the Effective Time.

      SECTION 6.10  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

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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.

      SECTION 6.11 SHAREHOLDER LITIGATION.  Each of the Company and Parent shall
give the other the  reasonable  opportunity to participate in the defense of any
shareholder  litigation  against the Company or Parent,  as applicable,  and its
directors relating to the transactions contemplated by this Agreement.

      SECTION 6.12 VOTING AGREEMENTS AND LOCK-UP AGREEMENTS

            (a) Within thirty (30) days of the date hereof, Parent shall use its
reasonable best efforts to obtain and deliver to the Company written agreements,
reasonably  satisfactory  to Company in form and in  substance,  from holders of
Parent  Common Stock owning more than five percent (the "5%  Holders") of Parent
Common Stock agreeing to be bound by the lock-up provisions set forth in Section
2.1(j) with respect to Parent  Common Stock owned by such 5% Holders  during the
Lock-Up Period.

            (b) Within  thirty (30) days of the date hereof,  Company  shall use
its  reasonable  best  efforts  to obtain  and  deliver  to  Parent  irrevocable
agreements,  reasonably  satisfactory  in form and in substance to Parent,  from
Company's executive officers and directors and from the holders of not less than
a majority  of the  outstanding  shares of each class of the  Company's  capital
stock that is required by applicable  law to consent to the Merger,  agreeing to
vote to approve the proposal to adopt this Agreement.

            (c) Within  thirty (30) days of the date hereof,  Company  shall use
its reasonable best efforts to obtain and deliver to Parent written  agreements,
reasonably  satisfactory  to Parent  in form and in  substance,  from  Company's
executive officer and directors who hold Company Stock Options agreeing that all
shares of Parent Common Stock  received  after the  Effective  Time by them upon
exercise of such options will be subject to the lock-up  provision  set forth in
Section 2.1(j) during the Lock-Up Period.

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      SECTION  6.13  EMPLOYEE  BENEFITS.  (A) Parent  shall,  or shall cause the
Surviving Corporation and its subsidiaries to, (i) give those employees who are,
as of the  Effective  Time,  employed by the Company and its  subsidiaries  (the
"Continuing  Employees")  full credit for purposes of  eligibility,  vesting and
benefit  accruals (other than for purposes of benefit accruals under any defined
benefit  pension  plan)  under  any  employee   benefit  plans  or  arrangements
maintained by Parent,  the Surviving  Corporation or any subsidiary of Parent or
the Surviving Corporation for which such Continuing Employees shall be eligible,
for such Continuing Employees' service with the Company or any subsidiary of the
Company (or any predecessor entity) to the same extent recognized by the Company
and  its  subsidiaries,  and  (ii)  waive  all  limitations  as  to  preexisting
conditions, exclusions and waiting periods, to the extent the same may be waived
under any such plan,  with respect to  participation  and coverage  requirements
applicable  to the  Continuing  Employees  under  any  welfare  plan  that  such
employees may be eligible to participate in after the Effective Time, other than
limitations  or waiting  periods that are already in effect with respect to such
employees and that have not been  satisfied as of the  Effective  Time under any
welfare plan maintained for the Continuing  Employees  immediately  prior to the
Effective  Time,  and (iii)  provide  credit under any such welfare plan for any
copayments,  deductibles and out-of-pocket expenditures for the remainder of the
coverage period during which any transfer of coverage occurs.

            (B) At the Effective Time,  Surviving  Corporation shall provide, or
shall  cause  to be  provided,  to the  Continuing  Employees  compensation  and
employee benefit plans,  programs and  arrangements  that are, in the aggregate,
comparable to those generally  provided to such employees as of the date hereof;
provided,  however, that nothing herein shall restrict Parent's or the Surviving
Corporation's  ability to amend or  terminate  such  compensation  and  employee
benefit  plans,  programs  and  arrangements  in  accordance  with their  terms.
Notwithstanding  anything  contained  herein to the  contrary,  each  Continuing
Employee whose employment is terminated during the twelve-month  period (or such
longer period as may be required by the terms of the  applicable  severance plan
or other  agreement  of the Company as listed on Section  3.12(b) of the Company
Disclosure  Schedule)  following the Effective Time shall be entitled to receive
severance pay and benefits  equal to the  severance  pay and benefits  under the
applicable  severance  plan or other  agreement of the Company listed on Section
3.12(b) of the Company Disclosure Schedule.

            (C) Subject to performance of the  obligations  set forth in Section
6.13(a) and (b) above,  from and after the Effective  Time,  Parent shall not be
obligated to assume any  compensation or employment  benefit plans,  programs or
arrangements of the Company or its subsidiaries.

      SECTION  6.14  CASHLESS  EXERCISE  OF  STOCK  OPTIONS.  Promptly  upon the
effectiveness  of the  Registration  Statement  on Form S-8 with  respect to the
Company Stock Options,  Parent shall provide, either through an arrangement with
a  broker-dealer  or other Parent program,  a procedure  whereby holders of such
options can effect a cashless  exercise  of such  options at the expense of such
holders.

      SECTION 6.15  DIRECTORS  AND OFFICERS  INSURANCE.  Prior to the  Effective
Time, Parent shall obtain,  from a financially  sound and nationally  recognized
insurance  carrier,  directors' and officers'  liability  insurance,  reasonably
acceptable to the Company,  covering its and any of its  subsidiaries  directors
and officers.

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      SECTION 6.16 CONTINGENT FEE SHARES.

            (A) Parent hereby  covenants and agrees to issue to Century  Capital
Associates, LLC ("Century Capital") 233,807 shares of Parent Common Stock at the
Effective Time.

            (B) If a Qualified  Financing is not consummated  within ninety (90)
days of the consummation of the transactions  contemplated hereby, Parent hereby
covenants and agrees to issue to Century Capital, 85,000 shares of Parent Common
Stock if Century Capital exercises its option to receive such shares pursuant to
the  terms  of the  letter  agreement  listed  in  Section  3.18 of the  Company
Disclosure Schedule.

            (C) If the Company does not enter into the Feasibility Study, Option
and  License  Agreement  within  ninety  (90)  days of the  consummation  of the
transactions contemplated hereby, Parent hereby covenants and agrees to issue to
Century  Capital  85,000  shares  of  Parent  Common  Stock if  Century  Capital
exercises its option to receive such shares  pursuant to the terms of the letter
agreement listed in Section 3.18 of the Company Disclosure Schedule.

                                   ARTICLE VII

                              CONDITIONS PRECEDENT

      SECTION 7.1  CONDITIONS  TO EACH PARTY'S  OBLIGATION TO EFFECT THE MERGER.
The  respective  obligation of each party to effect the Merger is subject to the
satisfaction  or, to the extent  permitted by applicable  law, waiver by each of
Parent  and the  Company  on or  prior  to the  Closing  Date  of the  following
conditions:

            (A)  Shareholder  Approvals.  The Company  shall have  obtained  the
consent of the  holders of each class of its capital  stock to the Merger,  this
Agreement and the transactions contemplated hereby.

            (B) Governmental and Regulatory Approvals.  Other than the filing of
the Articles of Merger  provided for under Section 1.3, all consents,  approvals
and actions of, filings with and notices to any Governmental  Entity required by
the  Company,  Parent  or any of  their  subsidiaries  under  applicable  law or
regulation to consummate the Merger and the  transactions  contemplated  by this
Agreement,  the  failure  of which to be  obtained  or made  would  result  in a
material  adverse  effect on  Parent's  ability to conduct  the  business of the
Company in substantially the same manner as presently conducted, shall have been
obtained or made (all such  approvals  and the  expiration  of all such  waiting
periods, the "Requisite Regulatory Approvals")

            (C) No Injunctions or Restraints.  No judgment,  order,  restraining
order  and/or  injunction  (temporary  or  otherwise),   decree,  statute,  law,
ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued
by  any  court  or  other  Governmental  Entity  or  other  legal  restraint  or
prohibition  (collectively,  "Restraints")  shall  be in  effect  preventing  or
materially delaying the consummation of the Merger; provided, however, that each
of the parties shall have used its best efforts to have such  Restraint  lifted,
vacated or rescinded.

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<PAGE>

            (D) Form S-4.  The Form S-4 shall have  become  effective  under the
Securities  Act  prior  to  the  mailing  by  the  Company  and  Parent  of  the
Proxy/Information  Statement to the  shareholders  of the  Company,  and no stop
order or proceedings  seeking a stop order shall have been entered or be pending
by the SEC.

            (E) Stock  Exchange  Listing.  The  shares of  Parent  Common  Stock
issuable to the Company's  shareholders as contemplated by Article II shall meet
all listing  requirements  for listing on AMEX,  other than any requirement with
respect to the minimum market price of Parent's Common Stock.

      SECTION  7.2  CONDITIONS  TO  OBLIGATIONS  OF PARENT AND MERGER  SUB.  The
obligation  of Parent and Merger Sub to effect the Merger is further  subject to
satisfaction or waiver of the following conditions:

            (A)   Representations   and   Warranties   of   the   Company.   The
representations  and  warranties  of the  Company  set forth  herein  and in the
Company  Disclosure  Schedule shall be true and correct at and as of the Closing
Date, as if made at and as of such time (except to the extent  expressly made as
of an earlier date, in which case such  representations  and warranties shall be
true and correct as of such date);  provided that no  representation or warranty
of the Company  shall be deemed untrue or incorrect for purposes of this Section
7.2(a) as a  consequence  of the  existence of any fact,  event or  circumstance
inconsistent with such  representation  or warranty,  unless such fact, event or
circumstance,  individually or when  aggregated with all other facts,  events or
circumstances  inconsistent with any  representation or warranty of the Company,
has had or would be  expected  to result  in a  material  adverse  effect on the
Company,  disregarding for these purposes any qualification or exception for, or
reference to, materiality in any such  representation or warranty.  Parent shall
have received a certificate of the Company's Chief  Executive  Officer and Chief
Financial Officer to the foregoing effect.

            (B)  Performance of  Obligations  of the Company.  The Company shall
have  performed,  in all  material  respects,  all  obligations  required  to be
performed  by  it  at  or  prior  to  the  Closing  Date  under  this  Agreement
disregarding for these purposes any qualification or exception for, or reference
to,  materiality in any such covenant.  Parent shall have received a certificate
of the Company's  Chief  Executive  Officer and Chief  Financial  Officer to the
foregoing effect.

            (C) Regulatory  Condition.  No condition or  requirement  shall have
been  imposed  by one or more  Governmental  Entities  in  connection  with  any
required  approval by them of the Merger that requires the Company or any of its
subsidiaries  to be  operated  in a manner  that would  have a material  adverse
effect on the Company or the Parent or on the consummation of this Agreement and
the transactions contemplated hereby.

            (D) No Company Material Adverse Effect.  There shall not be or exist
any change, effect, event,  circumstance,  occurrence or state of facts that has
had,  has or which  reasonably  could be  expected to have,  a material  adverse
effect on the Company.

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<PAGE>

            (E) Legal  Opinion.  Parent shall have  received an opinion of Pryor
Cashman  Sherman & Flynn LLP,  counsel to the Company,  in a form to be mutually
agreed by the parties to this Agreement prior to the Effective Time.

      SECTION 7.3 CONDITIONS TO  OBLIGATIONS  OF THE COMPANY.  The obligation of
the Company to effect the Merger is further subject to satisfaction or waiver of
the following conditions:

            (A)   Representations   and  Warranties.   The  representations  and
warranties  of Parent set forth  herein and in the  Parent  Disclosure  Schedule
shall be true and correct at and as of the Closing Date, as if made at and as of
such time (except to the extent  expressly  made as of an earlier date, in which
case such  representations  and warranties  shall be true and correct as of such
date);  provided  that no  representation  or warranty of Parent shall be deemed
untrue or incorrect for purposes of this Section 7.3 (a) as a consequence of the
existence  of  any  fact,   event  or   circumstance   inconsistent   with  such
representation   or  warranty,   unless  such  fact,   event  or   circumstance,
individually or when aggregated  with all other facts,  events or  circumstances
inconsistent with any  representation or warranty of Parent, has had or would be
expected to result in a material adverse effect on Parent disregarding for these
purposes any qualification or exception for, or reference to, materiality in any
such  representation or warranty.  The Company shall have received a certificate
of Parent's Chief Executive Officer and Chief Financial Officer to the foregoing
effect.

            (B)  Performance  of  Obligations  of  Parent.   Parent  shall  have
performed in all material  respects all obligations  required to be performed by
it at or prior to the Closing Date under this Agreement  disregarding  for these
purposes any qualification or exception for, or reference to, materiality in any
such  covenant.  The Company shall have received a certificate of Parent's Chief
Executive Officer and Chief Financial Officer to the foregoing effect.

            (C) Regulatory  Condition.  No condition or  requirement  shall have
been  imposed  by one or more  Governmental  Entities  in  connection  with  any
required  approval  by them of the  Merger  that  requires  Parent or any of its
subsidiaries  to be  operated  in a manner  that would  have a material  adverse
effect on Parent or  Company or on the  consummation  of this  Agreement  or the
transactions contemplated hereby.

            (D) No Parent Material  Adverse Effect.  There shall not be or exist
any change, effect, event,  circumstance,  occurrence or state of facts that has
had,  has or which  reasonably  could be  expected to have,  a material  adverse
effect on Parent.

            (E) Legal  Opinion.  The Company  shall have  received an opinion of
counsel  to  Parent,  in a form to be  mutually  agreed by the  parties  to this
Agreement prior to the Effective Time.

      SECTION 7.4  FRUSTRATION  OF CLOSING  CONDITIONS.  Neither  Parent nor the
Company may rely on the failure of any  condition  set forth in Section 7.1, 7.2
or 7.3, as the case may be, to be  satisfied  if such failure was caused by such
party's  failure to use its own reasonable best efforts to consummate the Merger
and the other  transactions  contemplated by this Agreement,  as required by and
subject to Section 6.5.

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                                  ARTICLE VIII

                        TERMINATION, AMENDMENT AND WAIVER

      SECTION 8.1  TERMINATION.  This  Agreement  may be  terminated at any time
prior to the  Effective  Time,  whether or not the Company's  shareholders  have
approved the Agreement:

            (A) by mutual written consent of Parent and the Company;

            (B) by either Parent or the Company:

                  (I) if the Merger shall not have been  consummated at or prior
to 5:00 p.m., New York time, on December 31, 2004, provided,  however,  that the
right to terminate this Agreement  pursuant to this Section  8.1(b)(i) shall not
be available to any party whose failure to perform any of its obligations  under
this  Agreement  results in the failure of the Merger to be  consummated by such
time and date;

                  (II) if the Company's  shareholders  have not consented to the
Merger, this Agreement and the transactions contemplated hereby;

                  (III) if any Restraint  having any of the effects set forth in
Section 7.1(c) shall be in effect and shall have become final and nonappealable;
provided,  however,  that the party seeking to terminate this Agreement pursuant
to this  Section  8.1(b)  (iv) shall have used its  reasonable  best  efforts to
prevent  the entry of such  Restraint  and to have  such  Restraint  vacated  or
removed;

                  (IV) if any  Governmental  Entity  that must grant a Requisite
Regulatory  Approval  shall have  denied  the  applicable  Requisite  Regulatory
Approval and such denial shall have become final and nonappealable;

                  (V) if the Parent's  Common Stock price closes below $1.50 per
share on any five (5) trading days  (whether such days are  consecutive  or not)
during the thirty (30) day period  ending five (5) days before the Closing Date;
provided that the party desiring to terminate  this  Agreement  pursuant to this
Section  8.1(b)(v)  gives  written  notice to the other party at least three (3)
days prior to exercising  its right to terminate the Agreement  pursuant to this
Section 8.1(b)(v) and provides an opportunity for the  non-terminating  party to
meet with the terminating party to discuss the termination; or

                  (VI) if the other  party  shall  have  failed to  deliver  the
agreements  it is to deliver  pursuant to Section  6.10 or Section  6.12 of this
Agreement within thirty (30) days of the date hereof;

            (C) by  Parent,  if  the  Company  shall  have  breached  any of its
representations,  warranties,  covenants or other  agreements  contained in this
Agreement,  which  breach (i) would give rise to the failure of a condition  set
forth in Section  7.2(a) or (b), and (ii) is either  incapable of being cured by
the Company or, if curable,  is not cured  within 15 days of receipt from Parent
of written notice thereof; or

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<PAGE>

            (D) by  the  Company,  if  Parent  shall  have  breached  any of its
representations,  warranties,  covenants or other  agreements  contained in this
Agreement,  which  breach (i) would give rise to the failure of a condition  set
forth in Section  7.3(a) or (b), and (ii) is either  incapable of being cured by
Parent or, if curable,  is not cured  within 15 days of receipt from the Company
written notice thereof.

      The party desiring to terminate this Agreement pursuant to clause (b), (c)
      or  (d)  of  this  Section  8.1  shall  provide  written  notice  of  such
      termination to the other party in accordance with Section 8.2,  specifying
      in  reasonable   detail  the  provision  hereof  pursuant  to  which  such
      termination is effected.

      SECTION 8.2 EFFECT OF  TERMINATION.  If this  Agreement is  terminated  by
either  the  Company  or Parent as  provided  in  Section  8.1,  this  Agreement
forthwith  shall  become  void and have no  effect,  without  any  liability  or
obligation on the part of Parent or the Company. This Section 8.2 and Article IX
shall survive such  termination,  provided,  however,  that nothing herein shall
relieve  any party from any  liability  (in  contract,  tort or  otherwise,  and
whether  pursuant  to an action at law or in equity)  for any knowing or willful
breach  by a  party  of any of its  representations,  warranties,  covenants  or
agreements set forth in this Agreement or in respect of fraud by any party.

      SECTION 8.3 AMENDMENT. This Agreement may be amended by the parties at any
time;  provided,  however,  that after  receipt  of  approval  by the  Company's
shareholders,  there shall not be made any  amendment  that by law  requires any
further approval by the shareholders of the Company without the further approval
of such shareholders.  This Agreement may not be amended except by an instrument
in writing signed on behalf of all of the parties to be bound thereby.

      SECTION 8.4 EXTENSION;  WAIVER. At any time prior to the Effective Time, a
party may (a) extend the time for the  performance of any of the  obligations or
other acts of the other party, (b) waive any inaccuracies in the representations
and warranties of the other party contained in this Agreement or in any document
delivered  pursuant to this  Agreement  or (c) subject to the proviso of Section
8.3,  waive  compliance  by the  other  party  with  any of  the  agreements  or
conditions contained in this Agreement.  Any agreement on the part of a party to
any such  extension or waiver shall be valid only if set forth in an  instrument
in  writing  signed on behalf of such  party.  The  failure of any party to this
Agreement  to assert any of its rights under this  Agreement or otherwise  shall
not constitute a waiver of such rights.

                                   ARTICLE IX

                               GENERAL PROVISIONS

      SECTION 9.1  NONSURVIVAL OF  REPRESENTATIONS,  WARRANTIES AND  AGREEMENTS.
None  of  the  representations  and  warranties  in  this  Agreement  or in  any
instrument  delivered  pursuant to this  Agreement  shall  survive the Effective
Time.  This Section 9.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.

                                       65
<PAGE>

      SECTION 9.2 NOTICES.  All  notices,  requests,  claims,  demands and other
communications  under this  Agreement  shall be in  writing  and shall be deemed
given if  delivered  personally,  telecopied  (which  is  confirmed)  or sent by
overnight courier  (providing proof of delivery) to the parties at the following
addresses  (or at such other  address for a party as shall be  specified by like
notice):

            (A)   if to Parent or Merger Sub, to:

                        Enhance Biotech, Inc.
                        712 Fifth Avenue
                        New York, New York  10019
                        Fax No.: (212) 581-1922
                        Attention: Andrew J. Cosentino

                        with a copy (which shall not constitute  notice pursuant
                        to this Section 9.2) to:

                        such counsel to Parent as may be designated by Parent by
                        written notice to Company.

            (B)   if to the Company, to:

                        Ardent Pharmaceuticals, Inc.
                        631 United Drive, Suite 200
                        Durham, North Carolina  27713
                        Fax No.: (919) 806-1161
                        Attention: Phillip S. Wise

                        with a copy (which shall not constitute  notice pursuant
                        to this Section 9.2) to:

                        Pryor Cashman Sherman & Flynn LLP
                        410 Park Avenue
                        New York, New York 10022
                        Fax No.: (212) 326-0806
                        Attention: Eric M. Hellige, Esq.

      SECTION 9.3 DEFINITIONS. For purposes of this Agreement:

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<PAGE>

            (A) an  "affiliate" of any person means another person that directly
or indirectly,  through one or more intermediaries,  controls, is controlled by,
or is under common control with,  such first person,  where  "control" means the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction of the management policies of a person,  whether through the ownership
of voting securities, by contract, as trustee or executor, or otherwise.

            (B) "material  adverse  change" or "material  adverse effect" means,
when used in  reference  to the Company or Parent,  any change,  effect,  event,
circumstance, occurrence or state of facts that is, or which reasonably could be
expected  to be,  materially  adverse  to  the  business,  assets,  liabilities,
condition (financial or otherwise),  cash flows or results of operations of such
party and its subsidiaries,  considered as an entirety;  provided, however, that
the  following  shall  not  be  taken  into  account  or  given  effect,  either
individually or in the aggregate,  in determining  whether there has occurred or
there  reasonably  could be expected to occur, or whether there exists a change,
effect,  event,  circumstance,  occurrence  or state  of facts  that is or which
reasonably  could be  expected  to be, a material  adverse  change or a material
adverse effect: (i) any change, effect, event, circumstance, occurrence or state
of facts  relating  to the United  States  economy or  financial  or  securities
markets in general, unless (A) constituting or arising from a banking moratorium
or general  suspension of trading for more than 10  consecutive  trading days on
any national  securities  exchange or U.S.  inter-dealer  quotation  system of a
registered national securities association or (B) involving a decline in the Dow
Jones  Industrial  Average of more than 35% measured over any five  AMEX-trading
day period), (ii) any adverse change, effect, event, circumstance, occurrence or
state of facts relating to the biotech  industry to the extent not affecting the
referent  person to a  disproportionately  greater  extent than other persons in
industries  in which the referent  person  competes are or could  reasonably  be
expected to be  affected,  or (iii) any  change,  effect,  event,  circumstance,
occurrence or state of facts directly  relating to and arising out of the public
announcement or performance of this Agreement and the transactions  contemplated
hereby.

            (C) "person" means an individual, corporation,  partnership, limited
liability   company,   joint   venture,   association,   trust,   unincorporated
organization or other entity.

            (D) a "subsidiary" of any person means another person,  an amount of
the voting securities, other voting ownership or voting partnership interests of
which is  sufficient to elect not less than a majority of its Board of Directors
or other governing body (or, if there are no such voting interests,  50% or more
of the equity  interests of which) is owned directly or indirectly by such first
person.

            (E)  "knowledge"  means,  (i)  with  respect  to  the  Company,  the
knowledge after reasonable due inquiry,  of the Company's executive officers and
(ii) with  respect to Parent,  the  knowledge  after  reasonable  due inquiry of
Parent's executive officers.

            (F)  "Company  Preferred  Stock"  means,  collectively,  the Company
Series A Preferred  Stock,  the Company  Series B Preferred  Stock,  the Company
Series C Preferred Stock, the Company Series D-1 Preferred Stock and the Company
Series D-2 Preferred Stock

      SECTION 9.4  INTERPRETATION.  Whenever the words "include,"  "includes" or
"including" are used in this  Agreement,  they shall be deemed to be followed by
the  words

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<PAGE>

"without  limitation  unless  the  word  "only"  follows  the  words  "include,"
"includes" or  "including."  The words  "hereof,"  "herein" and  "hereunder" and
words  of  similar  import  when  used in this  Agreement  shall  refer  to this
Agreement as a whole and not to any particular provision of this Agreement.  The
parties  have  participated  jointly in the  negotiation  and  drafting  of this
Agreement.  In the event an  ambiguity  or question of intent or  interpretation
arises,  this Agreement  shall be construed as if drafted jointly by the parties
and no presumption  or burden of proof shall arise  favoring or disfavoring  any
party by virtue of the authorship of any of the provisions of this Agreement.

      SECTION 9.5  COUNTERPARTS.  This  Agreement may be executed in one or more
counterparts,  all of which shall be considered  one and the same  agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.  A facsimile copy of a signature
page shall be deemed to be an original signature page.

      SECTION 9.6 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
(including the documents and instruments  referred to herein) (a) constitute the
entire agreement,  and supersede all prior agreements and  understandings,  both
written and oral, between the parties with respect to the subject matter of this
Agreement and (b) except for the  provisions of Section 6.6 which shall inure to
the benefit of and be  enforceable by the persons  referred to therein,  are not
intended  to  confer  upon any  person  other  than the  parties  any  rights or
remedies.

      SECTION 9.7  GOVERNING  LAW.  This  Agreement  shall be  governed  by, and
construed in accordance  with, the internal  substantive  and procedural laws of
the State of Delaware,  regardless of the laws that might otherwise govern under
applicable principles of conflicts of law of such state.

      SECTION 9.8  ASSIGNMENT.  Neither  this  Agreement  nor any of the rights,
interests or obligations under this Agreement shall be assigned,  in whole or in
part, by operation of law or otherwise by any of the parties  hereto without the
prior written consent of the other parties.  Subject to the preceding  sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.

      SECTION  9.9  CONSENT  TO  JURISDICTION.  Each of the  parties  hereto (a)
consents to submit  itself to the  personal  jurisdiction  of any Federal  court
located in the Southern District of New York or any New York state court located
in New York county in the event any dispute  arises out of this Agreement or any
of the transactions  contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal  jurisdiction by motion or other request
for leave from any such court,  and (c) agrees that it will not bring any action
relating  to this  Agreement  or any of the  transactions  contemplated  by this
Agreement  in any court  other  than a Federal  court  sitting  in the  Southern
District  of New York or any New York state  court  located in New York  county,
except for any action in another jurisdiction to enforce any judgment previously
obtained in any such Federal court sitting in the Southern  District of New York
or New York state court located in New York county. The parties  irrevocably and
unconditionally  waive any objection to the laying of venue of any action,  suit
or  proceeding  arising  out of  this  Agreement  or  any  of  the  transactions
contemplated  by this  Agreement  in any Federal  court  located in the Southern
District of New York or any New York state court located in New York county, and
hereby further irrevocably and  unconditionally  waive and agree not to plead or
claim in any such court that any such action,  suit or proceeding brought in any
such court has been brought in an inconvenient forum.

                                       68
<PAGE>

      SECTION 9.10  HEADINGS.  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.

      SECTION  9.11  SEVERABILITY.  If any  term  or  other  provision  of  this
Agreement is invalid,  illegal or incapable of being enforced by any rule of law
or public policy,  all other  conditions and provisions of this Agreement  shall
nevertheless  remain in full force and effect.  Upon such determination that any
term or other provision is invalid,  illegal or incapable of being enforced, the
parties  hereto shall  negotiate in good faith to modify this Agreement so as to
effect the original  intent of the parties as closely as possible to the fullest
extent  permitted by applicable law in an acceptable  manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

      SECTION 9.12 ENFORCEMENT.  The parties agree that irreparable damage would
occur  in the  event  that  any of the  provisions  of this  Agreement  were not
performed in accordance with their specific terms or were otherwise breached. It
is  accordingly  agreed that the parties  shall be entitled to an  injunction or
injunctions to prevent  breaches of this  Agreement and to enforce  specifically
the terms and provisions of this Agreement,  this being in addition to any other
remedy to which they are entitled at law or in equity.

            [The remainder of this page is intentionally left blank.]

                                       69
<PAGE>

      IN WITNESS  WHEREOF,  Parent,  the Company and Merger Sub have caused this
Agreement to be signed by their respective  officers  thereunto duly authorized,
all as of the date first written above.

                                ENHANCE BIOTECH, INC.

                                By  /s/Christopher Every
                                    ---------------------------------
                                      Name:  Christopher Every
                                      Title:    President and CEO

                                ARDENT ACQUISITION CORP.

                                By  /s/Christopher Every
                                    ---------------------------------
                                      Name:  Christopher Every
                                      Title:    President and CEO

                                ARDENT PHARMACEUTICALS, INC.

                                By  /s/Kwen-Jen Chang
                                    ---------------------------------
                                     Name:  Kwen-Jen Chang
                                     Title:    President and CEO

                                       70
<PAGE>

                                    EXHIBIT A

                              LOCK-UP PERIOD LEGEND

      The shares  represented by this Certificate are subject to restrictions on
transfer until ________,  2005 (one year from the date of issuance) as set forth
in Section 2.1(j) of that certain Merger Agreement, dated as of August 11, 2004,
among the Company,  Ardent Acquisition Corp., and Ardent  Pharmaceuticals,  Inc.
Copies of the Merger  Agreement are  maintained and are available for inspection
at the principal office of the Company.

                                       71
<PAGE>

                                    EXHIBIT B

                          INITIAL LOCK-UP PERIOD LEGEND

      The shares  represented by this Certificate are subject to restrictions on
transfer until the earlier of (i) the 30th day following the consummation by the
Company of a Qualified Financing (as defined in the Merger Agreement dated as of
August 11, 2004 (the "Merger Agreement"),  among the Company, Ardent Acquisition
Corp., and Ardent Pharmaceuticals, Inc.) or (ii) __________, 2005 (180 days from
the date of  issuance) 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.

                                       72

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