AMENDMENT NO. 1 TO MERGER PARTNER NOTEHOLDER AGREEMENT
Exhibit 2.5
EXECUTION VERSION
AMENDMENT NO. 1 TO
MERGER PARTNER NOTEHOLDER AGREEMENT
MERGER PARTNER NOTEHOLDER AGREEMENT
This Amendment No. 1 (this “Amendment No. 1”) to Merger Partner Noteholder Agreement
(the “Noteholder Agreement”), dated as of May 1, 2008, among Critical Therapeutics, Inc., a
Delaware corporation (“Public Company”), Cornerstone BioPharma Holdings, Inc., a Delaware
corporation (“Merger Partner”), Cornerstone BioPharma, Inc., a Nevada corporation and a
wholly owned subsidiary of Merger Partner (“Operating Company”), and Carolina
Pharmaceuticals Ltd., a Bermuda Exempted Company (“Noteholder”) is entered into as of
August 7, 2008. Terms that are used herein with initial capital letters and that are not otherwise
defined shall have the meanings given to them in the Noteholder Agreement.
BACKGROUND
Public Company, Merger Partner, Operating Company, and Noteholder (collectively, the
“Parties”) previously entered into the Noteholder Agreement on May 1, 2008.
The Parties desire to amend the Noteholder Agreement as described herein.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as
follows:
1. Effective as of July 22, 2008, Section 2 of the Noteholder Agreement is hereby deleted in
its entirety and replaced with a new Section 2 that reads as follows:
“2. Conversion or Exchange of Carolina Note.
(a) Prior to the Effective Time, Noteholder shall surrender for cancellation
the Carolina Note to Operating Company along with written instructions to Operating
Company and Merger Partner to cancel the Carolina Note and issue shares of Merger
Partner Common Stock in exchange for, at Noteholder’s option, all or a portion of
the Carolina Note (but in an amount not less than the principal amount outstanding
under the Carolina Note on the date of exchange) (such amount to be converted or
exchanged, the “Purchase Amount”). Following receipt of the surrendered
Carolina Note by Operating Company, Noteholder will, immediately prior to the
Effective Time, be deemed to be the holder of record of the shares of Merger Partner
Common Stock issuable with respect to the Purchase Amount (as calculated under
Section 2(b)) , and Merger Partner will, immediately prior to the effective time,
execute or cause to be executed and delivered to Noteholder a certificate or
certificates representing such
number
of shares. If Noteholder chooses not to convert or exchange the entire amount of principal and accrued interest then outstanding under the Carolina Note,
Operating Company will, concurrently with Merger Partner’s delivery of said stock
certificate or certificates, deliver to Noteholder a new promissory note of like
tenor evidencing the remaining outstanding amount of the Carolina Note not so
converted or exchanged for shares of Merger Partner Common Stock. Upon surrender of
the Carolina Note to Operating Company by Noteholder, all shares of Merger Partner
Common Stock deliverable and issued hereunder will be duly authorized, duly and
validly issued and outstanding, fully paid and nonassessable, and free from taxes,
liens or charges.
(b) Upon receipt of the written instructions from Noteholder pursuant to
Section 2(a), Merger Partner shall, immediately prior to the Effective Time, issue
to Noteholder in respect of the Purchase Amount a number of shares of Merger Partner
Common Stock equal to (i) the quotient of (A) the Purchase Amount, divided by (B)
the product of (1) $0.62 (which was the last reported sales price of Public
Company’s common stock at the end of regular trading hours on The NASDAQ Global
Market on April 30, 2008, the last trading day prior the date of the Merger
Agreement) times (2) 2.3333 times (3) 43,479,198 (which was the number of
outstanding shares of Public Company’s common stock on April 30, 2008) (such
quotient, the “Noteholder Percentage”), multiplied by (ii) the sum of (A) the number
of shares of Merger Partner Common Stock outstanding immediately prior to the
conversion or exchange plus (B) the number of shares of Merger Partner Common Stock
issuable upon exercise of Merger Partner Stock Options and Merger Partner Warrants
outstanding immediately prior to the conversion or exchange, divided by (iii) the
difference between one and the Noteholder Percentage.”
2. The terms and conditions of the Noteholder Agreement shall continue in full force and
effect except as modified by this Amendment No. 1.
[signature page follows]
[Signature Page to Amendment No. 1 to Merger Partner Noteholder Agreement]
IN WITNESS WHEREOF, Public Company, Merger Partner, Operating Company, and Noteholder have
caused this Amendment No. 1 to be signed by their respective officers thereunto duly authorized as
of the Effective Date.
CRITICAL THERAPEUTICS, INC. | ||||
By: Name: |
/s/ Xxxxxx Xxxxxxxx, Ph.D.
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Title:
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President and Chief Executive Officer | |||
CORNERSTONE BIOPHARMA HOLDINGS, INC. | ||||
By: Name: |
/s/ Xxxxx X. Xxxxxxx
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Title:
|
President and Chief Executive Officer | |||
CORNERSTONE BIOPHARMA, INC. | ||||
By: Name: |
/s/ Xxxxx X. Xxxxxxx
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Title:
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President and Chief Executive Officer | |||
CAROLINA PHARMACEUTICALS LTD. | ||||
/s/ Xxxxx X. Xxxxxxx
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Name:
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Xxxxx X. Xxxxxxx | |||
Title:
|
Chief Executive Officer |