Exhibit 4.2
FIRST AMENDMENT TO CEPTOR AGREEMENT
First Amendment dated this __ day of April, 2004 to that certain Ceptor
Agreement ("Agreement") by and among Xxxxxxx Xxxxxxx ("WP"), Ceptor Corporation
("Ceptor") and Xechem International, Inc. ("Xechem"). Capitalized terms used
herein and not otherwise defined shall have the same meaning as set forth in the
Agreement.
RECITALS:
WHEREAS, the parties entered into the Agreement on March 31, 2004 to
provide a mechanism for among other things, facilitating the independent
financing of Ceptor, and a means of liquidity for Xechem.
WHEREAS, Ceptor and Xechem have agreed to enter into a "Note Purchase
Agreement" in the form attached as EXHIBIT 1, calling for the funding of a
bridge loan in the original principal amount of 1,100,000 to Ceptor, to be
evidenced by a promissory note in the form of EXHIBIT A to the Note Purchase
Agreement, subject to the undertakings set forth herein.
WHEREAS, the parties are desirous of amending the Agreement as set forth
below to further delineate their respective rights and obligations as set forth
below, which will supersede any inconsistencies or ambiguities with the
Agreement.
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the parties agree as follows:
1. RECITALS. The recitals set forth above are incorporated herein by
reference as if fully rewritten.
2. PUT OPTION. Notwithstanding anything to the contrary contained in
Section 5.0(b) of the Agreement, the number of shares of Ceptor to be "Put" by
Xechem pursuant to the "Put" obligation shall be that amount of shares equal to
the quotient of (a)25% of the gross cash raised (before any commissions or other
expenses) in each tranche of equity financing by Ceptor; divided by (b) the
price per share (the "Issue Price") at which such equity tranche is raised (and
if in the form of preferred stock, then the price per share will be computed
based upon the number of shares of common stock into which such preferred stock
would be converted were the preferred stock to immediately convert to common
stock); provided that Xechem's "Put" obligation will cease once it has "Put"
stock resulting in aggregate payments to Xechem of $2,000,000 by Ceptor. Each
tranche of shares of common stock to be "Put" by Xechem shall be priced at the
Issue Price per share for the tranche of equity corresponding to the "Put." For
example, if Ceptor raises $1,000,000 of equity based upon a price of $2.50 per
share in tranche 1 (i.e., 400,000 shares) and $10,000,000 of equity based upon a
price of $4.00 per share in tranche 2 (i.e., 2,500,000 shares), then Xechem
would Put 100,000 shares to Ceptor for $2.50 per share in tranche 1 and 437,500
shares in tranche 2, resulting in aggregate capped Put proceeds of $2,000,000.
Xechem shall continue to be entitled to the royalty of two percent (2%) of gross
revenues received by Ceptor, its subsidiaries, affiliates and assigns with
respect to the sale of any products incorporating any of the Ceptor IP or the
licensing of any of the Ceptor IP (or the sale of the licensing rights to any of
the Ceptor IP or the sale of any of the Ceptor IP).
The remainder of the substantive provisions of Section 5.0(b) of the
Agreement shall remain in place, subject to the modification of the terms of the
bridge loan to reflect the terms of the Note Purchase Agreement referenced in
the recitals to this First Rider.
3. MILESTONE EQUITY ISSUANCE. Pursuant to the original agreement and plan
of merger among Xechem, Ceptor Acquisition Corporation and Ceptor ("Merger
Agreemen"), Xechem agreed to issue certain "Contingent Consideration" (as that
term is defined in the Merger Agreement) to the former stockholders of Ceptor
("Former Stockholders") on the achievement of certain milestone accomplishments
of Ceptor. Ceptor agrees to cause the Former Stockholders beneficially entitled
to not less than 80% of any such Contingent Consideration to execute and deliver
to Xechem counterpart copies of a waiver of the right to receive such Contingent
Consideration and deliver the same to Xechem simultaneous with Xechem's delivery
to Ceptor of Exhibit 1, in consideration for certain stock and/or options to
acquire Ceptor common stock (the "Substitute Consideration"). Should less than
100% of the Former Stockholders execute and deliver to Xechem the aforesaid
waiver within 30 days following the date of this Agreement, then Ceptor shall
provide to Xechem the amount of the Substitute Consideration that the nonwaiving
Former Stockholders would have received for the milestone entitlements that they
did not relinquish, had they executed the waiver (e.g. if only 80% execute the
waiver, then Xechem would get 20% of the aggregate Substitute Consideration that
would be provided). Ceptor will use its best efforts to cause 100% of the Former
Stockholders to accept the Substitute Consideration.
IN WITNESS WHEREOF, the undersigned have executed this First Amendment as
of the date first set forth above, which First Amendment shall be binding if
delivered in counterpart or one integrated document by original, photocopy or
facsimile.
CEPTOR CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
XECHEM INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Director
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