Document:

exv10w3

Exhibit 10.3

 

GOVERNANCE AGREEMENT

by and among

CORNERSTONE THERAPEUTICS INC.,

THE STOCKHOLDERS NAMED HEREIN

(solely with respect to Sections 3.1(c), 3.4(d) and 3.4(e))

and

CHIESI FARMACEUTICI SPA

Dated as of May 6, 2009

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	Section 1.1 Certain Definitions
	 	 	1	 
	 
	 	 	 	 
	Section 1.2 Interpretation
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II LIMITATIONS ON TRANSACTIONS INVOLVING COMMON STOCK
	 	 	3	 
	 
	 	 	 	 
	Section 2.1 Limitations on Purchases of Additional Common Stock
	 	 	3	 
	 
	 	 	 	 
	Section 2.2 Mandatory Offer to Purchase
	 	 	3	 
	 
	 	 	 	 
	Section 2.3 Limitations on Transfers of Common Stock
	 	 	4	 
	 
	 	 	 	 
	Section 2.4 Standstill
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III CORPORATE GOVERNANCE
	 	 	5	 
	 
	 	 	 	 
	Section 3.1 Board Composition Following the Effective Date
	 	 	5	 
	 
	 	 	 	 
	Section 3.2 Committees
	 	 	6	 
	 
	 	 	 	 
	Section 3.3 Annual Nomination Process
	 	 	6	 
	 
	 	 	 	 
	Section 3.4 Solicitation and Voting of Shares
	 	 	6	 
	 
	 	 	 	 
	Section 3.5 Charter; Bylaws
	 	 	7	 
	 
	 	 	 	 
	Section 3.6 Change in Law
	 	 	7	 
	 
	 	 	 	 
	ARTICLE IV INTERESTED TRANSACTIONS
	 	 	7	 
	 
	 	 	 	 
	Section 4.1 Interested Transactions
	 	 	7	 
	 
	 	 	 	 
	Section 4.2 Right of First Offer of the Company
	 	 	7	 
	 
	 	 	 	 
	Section 4.3 Right of First Offer of Purchaser
	 	 	8	 
	 
	 	 	 	 
	ARTICLE V MISCELLANEOUS
	 	 	8	 
	 
	 	 	 	 
	Section 5.1 Effectiveness
	 	 	8	 
	 
	 	 	 	 
	Section 5.2 Termination
	 	 	8	 
	 
	 	 	 	 
	Section 5.3 Notice
	 	 	9	 
	 
	 	 	 	 
	Section 5.4 Entire Agreement
	 	 	10	 
	 
	 	 	 	 
	Section 5.5 Waiver
	 	 	10	 
	 
	 	 	 	 
	Section 5.6 Amendment
	 	 	11	 
	 
	 	 	 	 
	Section 5.7 No Third Party Beneficiaries
	 	 	11	 
	 
	 	 	 	 
	Section 5.8 Assignment; Binding Effect
	 	 	11	 
	 
	 	 	 	 
	Section 5.9 GOVERNING LAW
	 	 	11	 
	 
	 	 	 	 
	Section 5.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL
	 	 	11	 
	 
	 	 	 	 
	Section 5.11 Invalid Provisions
	 	 	12	 
	 
	 	 	 	 
	Section 5.12 Counterparts
	 	 	12	 
	 
	 	 	 	 
	Section 5.13 Remedies
	 	 	12	 

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GOVERNANCE AGREEMENT

     This GOVERNANCE AGREEMENT, dated as of May 6, 2009 (this “Agreement”), is by and among
CORNERSTONE THERAPEUTICS INC., a Delaware corporation, (the “Company”), and solely with
respect to Sections 3.1(c), 3.4(d) and 3.4(e), LUTZ FAMILY LIMITED
PARTNERSHIP, a North Carolina limited partnership, CORNERSTONE BIOPHARMA HOLDINGS, LTD., a limited
liability company organized under the laws of Anguilla, CAROLINA PHARMACEUTICALS LTD., a limited
liability company organized under the laws of Bermuda, CRAIG A. COLLARD and STEVEN M. LUTZ (the
“Stockholders”), and CHIESI FARMACEUTICI SPA, a corporation organized under the laws of
Italy (“Purchaser”).

RECITALS

     WHEREAS, concurrently with the execution and delivery of this Agreement, (i) Purchaser and
certain of the Stockholders are entering into a Stock Purchase Agreement (the “Initial Stock
Purchase Agreement”), dated the same date as this Agreement, and (ii) the Company and Purchaser
are entering into a Stock Purchase Agreement (the “Company Stock Purchase Agreement”), also
dated the same date as this Agreement;

     WHEREAS, following consummation of the transactions contemplated by the Initial Stock Purchase
Agreement and the Company Stock Purchase Agreement, Purchaser will own approximately 13,502,741
shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”); and

     WHEREAS, the parties wish to provide for certain governance arrangements and registration
rights that are to take effect upon the closings of the transactions provided for in the Initial
Stock Purchase Agreement and the Company Stock Purchase Agreement;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions
herein contained, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1 Certain Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:

     “Affiliate” means, with respect to any person, any other person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is under common
control with the person specified.

     “Beneficially Own” means, with respect to any security, having or sharing the power to
direct or control the voting or disposition of such security and “Beneficial Ownership” has
a correlative meaning.

     “Blackout Period” means the period beginning on the Effective Date and ending at 11:59
p.m. New York City time on the second anniversary of the Effective Date.

     “Board” or “Board of Directors” means the Board of Directors of the Company
except where the context otherwise requires.

 

 

     “Business Day” means any day other than a Saturday, Sunday or day when commercial
banks in New York City are permitted or required by law to be closed for the conduct of regular
banking business.

     “Charter Amendment” means the amendment to the Company’s certificate of incorporation
set forth in Exhibit F to the Company Stock Purchase Agreement.

     “Control” (including the terms “controlling,” “controlled by” and “under common
control with”) means possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a person, whether through the ownership of voting securities, by
contract or otherwise.

     “DGCL” means the General Corporation Law of the State of Delaware.

     “Director” means a member of the Board of Directors of the Company.

     “Effective Date” means the date of the Closing provided for in the Company Stock
Purchase Agreement.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the SEC promulgated thereunder.

     “Fully Diluted Basis” means as of any date a calculation that gives effect to the
number of shares of Common Stock then issued and outstanding plus the aggregate number of all
shares of Common Stock that the Company may be required to issue as of such date pursuant to all
options, warrants, rights, convertible or exchangeable securities or similar obligations then
outstanding, whether or not such securities are then exercisable and exchangeable but excluding,
however, any options, warrants or other similar rights outstanding at the date hereof that have an
exercise price equal to or greater than $26.00 per share.

     “hereto”, “hereunder”, “herein”, “hereof” and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement.

     “Independent Director” means a Director that meets the requirements for independence
under the NASDAQ Marketplace Rules and who is not a Purchaser Designee.

     “Nominee Calculation Date” means with respect to any meeting of the Nominating
Committee held to select nominees for election at an annual meeting of the Company’s stockholders,
the close of business on the last Business Day of the month before the meeting.

     “Person” means any natural person, corporation, general partnership, limited
partnership, limited or unlimited liability company, proprietorship, joint venture, other business
organization, trust, union, association or any U.S. or non-U.S. government, regulatory or
administrative authority, agency, instrumentality or commission or any court, tribunal, judicial or
arbitral body or other similar authority.

     “Purchaser Designee” means a Person designated by Purchaser for election or
appointment as a Director pursuant to the provisions of this Agreement.

     “SEC” means the Securities and Exchange Commission.

     “Stockholders Agreement” means the Stockholders Agreement, dated the same date as this
Agreement, by and among Purchaser, the stockholders of the Company named therein and the Company.

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     Section 1.2 Interpretation.

          (a) When a reference is made in this Agreement to an Article or a Section hereof, such
reference shall be to an Article or a Section of this Agreement unless otherwise indicated.

          (b) The table of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement.

          (c) The parties have participated jointly in negotiating and drafting this Agreement. If an
ambiguity or a 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 provisions of this Agreement.

          (d) The definitions contained in this Agreement are applicable to the singular as well as the
plural forms of such terms.

          (e) References to a Person are also to its permitted successors and assigns.

          (f) The use of “or” is not intended to be exclusive unless expressly indicated otherwise.

ARTICLE II

LIMITATIONS ON TRANSACTIONS INVOLVING COMMON STOCK

     Section 2.1 Limitations on Purchases of Additional Common Stock. Purchaser agrees
that, except for purchases of Common Stock made in accordance with this Article II, during
the Blackout Period, neither Purchaser nor any Affiliate of Purchaser shall, directly or
indirectly, purchase or otherwise acquire, or propose or offer to purchase or acquire, any shares
of Common Stock or any Beneficial Ownership thereof, whether by tender offer, market purchase,
privately negotiated purchase, merger or otherwise, except as follows:

          (a) through acquisitions of shares of Common Stock (i) effected pursuant to transactions
approved by the Board or by a majority of the Independent Directors; (ii) effected solely to the
extent necessary to maintain the Beneficial Ownership of Purchaser and its Affiliates at an amount
equal to 51% of the shares of Common Stock on a Fully Diluted Basis; (iii) in aggregate amounts
not in excess of the aggregate number of shares of Common Stock sold after the Effective Date by
the Stockholders or (iv) in order to effect the acquisition of all of the outstanding capital
stock of the Company by Purchaser and/or any Affiliate of Purchaser, in accordance with the
provisions of this Agreement; and

          (b) through acquisitions of shares of Common Stock required by Section 2.2.

     Section 2.2 Mandatory Offer to Purchase. If at any time Purchaser and its Affiliates
collectively Beneficially Own shares of Common Stock that represent 85% (or more) of the shares of
capital stock of the Company on a Fully Diluted Basis, Purchaser shall offer to purchase, through a
tender offer commenced within 60 days thereafter and completed as soon as practicable after
commencement, all of the shares of Common Stock not then owned by Purchaser or its Affiliates
(i.e., the remaining 15% of the outstanding capital stock of the Company), at a cash price
per share at least equal to the highest per share price paid by Purchaser or any of its Affiliates,
directly or indirectly, to acquire any share of Common Stock in the 18 months prior to the
commencement of such tender offer.

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Purchaser shall purchase and pay for all shares duly tendered
in response to the tender offer promptly after the expiration of the tender offer. In addition, if
Purchaser and/or its Affiliates have acquired at least 90% of the outstanding capital stock of the
Company, following such tender offer, Purchaser may cash out the remaining stockholders of the
Company by a short form merger as provided for under Section 253 of the DGCL at the same price per
share paid by Purchaser in such tender offer.

     Section 2.3 Limitations on Transfers of Common Stock.

          (a) During the Blackout Period, neither Purchaser nor any of its Affiliates shall, directly
or indirectly, sell or otherwise transfer or dispose of any shares of Common Stock except pursuant
to a bona fide acquisition of the Company by a third party by way of merger,
consolidation, stock exchange or tender offer that was not solicited by Purchaser or any of its
Affiliates and that is approved by the Board and by a majority of the Independent Directors.

          (b) Neither Purchaser nor any of its Affiliates shall, directly or indirectly, sell or
otherwise transfer any shares of Common Stock to any Person if immediately following the sale or
transfer such Person would Beneficially Own (together with such Person’s Affiliates) a number of
 shares of Common Stock representing more than five percent of all shares of Common Stock then
outstanding. The preceding limitation shall not apply to a sale to a bona fide
underwriter if the underwriter certifies to the Company that the shares are being acquired
pursuant to a distribution and that upon completion of the distribution, no purchaser will own in
excess of five percent of all shares of Common Stock then outstanding.

     Section 2.4 Standstill. Purchaser agrees that during the Blackout Period, other than
pursuant to the Purchaser Voting Agreement (as defined in the Company Stock Purchase Agreement),
Purchaser nor any Affiliate of Purchaser shall, directly or indirectly:

          (a) “solicit,” or become a “participant” in any “solicitation” of, any “proxy ” (as such
terms are defined in Regulation 14A under the Exchange Act) from any holder of Common Stock in
connection with any vote on any matter (whether or not relating to the election or removal of
Directors), or agree or announce its intention to vote with any Person undertaking a
“solicitation,” except as otherwise expressly provided in this Agreement;

          (b) form, join or in any way participate in any group of Persons formed for the purpose of
acquiring, holding, voting or disposing of Common Stock that would be required under Section 13(d)
of the Exchange Act, and the rules and regulations thereunder (as in effect on, and based on legal
interpretations thereof existing on, the date hereof), to file a statement on Schedule 13D with
the SEC as a “person” within the meaning of Section 13(d)(3) of the Exchange Act if such group
Beneficially Owned Common Stock representing more than five percent of any class of voting stock
of the Company then outstanding, unless approved by the majority of the Independent Directors;

          (c) grant any proxies with respect to any Common Stock to any Person (other than as
recommended by the Board of Directors) or deposit any Common Stock in a voting trust or enter into
any other arrangement or agreement with respect to the voting thereof;

          (d) seek, alone or in concert with other Persons, additional representation on the Board of
Directors (in addition to that provided for in this Agreement) or seek the removal of any member
of the Board that is not a Purchaser Designee or a change in the composition or size of the Board
of Directors that is inconsistent with this Agreement; or

- 4 -

 

          (e) enter into any arrangements, understandings or agreements (whether written or oral) with,
or advise, finance or assist any other Persons in connection with any of the foregoing.

ARTICLE III

CORPORATE GOVERNANCE

     Section 3.1 Board Composition Following the Effective Date.

          (a) If on the Effective Date the Charter Amendment shall not have been duly authorized,
adopted and implemented or otherwise shall not have become effective, each of the parties to this
Agreement shall cooperate in good faith to take such actions as may be necessary or appropriate to
cause the Charter Amendment to be authorized, adopted and implemented, and to take effect, as soon
as reasonably practicable, including by holding a special meeting of the Company’s Stockholders
for the purpose of approving and adopting the Charter Amendment.

          (b) On the Effective Date, (whether or not the Charter Amendment shall have become effective)
the Board shall be reconstituted so as to consist of (i) the Chief Executive Officer of the
Company; (ii) three persons selected prior to the Effective Date by the Board, each of whom
qualifies as an independent director under the NASDAQ Marketplace Rules; and (iii) the four
persons designated by Purchaser to serve as Directors as of the Effective Date.

          (c) From and after the Effective Date, the Company, the Stockholders and Purchaser shall
cooperate to ensure that, to the greatest extent possible, the Board consists of (i) the Chief
Executive Officer of the Company or, if there is none, the most senior executive officer of the
Company (the “Management Director”); (ii) three Independent Directors; and (iii) a number
of Purchaser Designees as follows: (A) if Purchaser and its Affiliates Beneficially Own Common
Stock constituting not less than 50% of all outstanding Common Stock on a Fully Diluted Basis,
there shall be four Purchaser Designees; (B) if Purchaser and its Affiliates Beneficially Own
Common Stock constituting less than 50% but 35% or more of all outstanding Common Stock on a Fully
Diluted Basis, there shall be three Purchaser Designees; (C) if Purchaser and its Affiliates Own
Common Stock constituting less than 35% but 25% or more of all outstanding Common Stock on a Fully
Diluted Basis, there shall be two Purchaser Designees; (D) if Purchaser and its Affiliates
Beneficially Own Common Stock constituting less than 25% but 10% or more of all outstanding Common
Stock on a Fully Diluted Basis, there shall be one Purchaser Designee; and (E) if Purchaser and
its Affiliates Beneficially Own Common Stock constituting less than 10% of all outstanding Common
Stock on a Fully Diluted Basis, Purchaser shall not have the right to designate any Directors.

          (d) If at any time the number of Purchaser Designees serving as Directors exceeds the number
provided for in Section 3.1(c), Purchaser promptly shall procure the resignation or
removal of such number of Purchaser Designees as shall be required to cause the composition of the
Board to be consistent with Section 3.1(c). If at any time there is no Management
Director or there are fewer than
three Independent Directors, Purchaser shall procure that the applicable vacancies are filled
by persons selected by the remaining Independent Director or Directors.

          (e) While the Charter Amendment is in effect, the Independent Directors and the Management
Director shall be collectively referred to as the Class A Directors and the Purchaser Designees
shall be referred to as the Class B directors. A majority of the total authorized number of
directors, including at least one Class B director, shall constitute a quorum for the transaction
of business. If at any meeting of the Board of Directors there shall be less than such a quorum,
a majority

- 5 -

 

of the directors present may adjourn the meeting from time to time without further
notice other than announcement at the meeting, until a quorum shall be present.

     Section 3.2 Committees. The Board of Directors at all times during the term of this
Agreement shall maintain the following committees: an Audit Committee, a Nominating Committee and a
Compensation Committee. Each of the Audit Committee, the Nominating Committee and the Compensation
Committee shall consist solely of Independent Directors. Purchaser shall procure that the
Purchaser Designees vote in favor of the foregoing arrangements.

     Section 3.3 Annual Nomination Process. Subject to compliance with applicable laws and
the regulations of any exchange on which the Common Stock may from time to time be traded, in
connection with each annual meeting of the Company’s stockholders the following director nomination
procedures shall be followed:

          (a) the Nominating Committee of the Board shall nominate for election to the Board at the
annual meeting of stockholders (i) the Chief Executive Officer or, if there is none, the most
senior executive officer of the Company; and (ii) three additional candidates, each of whom shall
be an Independent Director;

          (b) Purchaser shall designate for nomination by the Nominating Committee the number of
persons Purchaser is entitled to designate pursuant to Section 3.1(c), based on Beneficial
Ownership levels as of the applicable Nominee Calculation Date;

          (c) in the event the number of persons Purchaser is entitled to designate pursuant to
Section 3.1(c), based on Beneficial Ownership levels as of the applicable Nominee
Calculation Date, falls below four persons, the Nominating Committee of the Board shall nominate
for election to the Board at the annual meeting the number of directors equal to the difference
between four and the number of persons Purchaser is entitled to designate; and

          (d) each individual designated by Purchaser for nomination as a director of the Company shall
be nominated by the Nominating Committee for election as a Director unless the Nominating
Committee reasonably determines that such individual lacks such business or technical experience,
stature and character as is commensurate with service on the board of directors of a publicly held
enterprise or if such individual is an officer, director, partner or principal stockholder of any
competitor of the Company and its subsidiaries (other than Purchaser and its Affiliates). If the
Nominating Committee determines that any individual designated by Purchaser does not satisfy the
criteria set forth in the preceding sentence, the Nominating Committee will promptly notify
Purchaser of such determination and Purchaser will be entitled to designate another individual for
nomination.

     Section 3.4 Solicitation and Voting of Shares.

          (a) The Company shall use its best efforts to solicit from the stockholders of the Company
eligible to vote for the election of Directors proxies in favor of the nominees designated in
accordance with Section 3.3.

          (b) In any election of Directors or any meeting of the stockholders of the Company called for
the election of directors, Purchaser shall cause the record holder(s) of all shares of Common
Stock Beneficially Owned by Purchaser and its Affiliates to attend such meeting in person or by
proxy for purposes of establishing a quorum and to vote all such shares of Common Stock in favor
of the election as Directors of any persons who have been nominated for election by the Nominating
Committee in accordance with the procedures set forth in Section 3.3.

- 6 -

 

          (c) Purchaser agrees not to permit any shares of Common Stock Beneficially Owned by Purchaser
or any of its Affiliates to be voted in a manner inconsistent with the provisions of this
Agreement, or in a manner that would frustrate or prevent implementation of the provisions of this
Agreement.

          (d) In any election of Directors or any meeting of the stockholders of the Company called for
the election of directors, each of the Stockholders shall cause the record holder(s) of all shares
of Common Stock Beneficially Owned by such Stockholder to attend such meeting in person or by
proxy for purposes of establishing a quorum and to vote all such shares of Common Stock in favor
of the election as Directors of any persons who have been nominated for election by the Nominating
Committee in accordance with the procedures set forth in Section 3.3.

          (e) Each of the Stockholders agrees not to permit any shares of Common Stock Beneficially
Owned by such Stockholder to be voted in a manner inconsistent with the provisions of this
Agreement, or in a manner that would frustrate or prevent implementation of the provisions of this
Agreement.

     Section 3.5 Charter; Bylaws. The Company shall take or cause to be taken all lawful
action necessary to ensure at all times that the Company’s certificate of incorporation, bylaws and
any other governance documents are not at any time inconsistent with the provisions of this
Agreement.

     Section 3.6 Change in Law. In the event any law, rule or regulation comes into force
or effect (including by amendment) which conflicts with the terms and conditions of this Agreement,
the parties shall negotiate in good faith to revise the Agreement to achieve the parties’ intention
set forth herein.

ARTICLE IV

INTERESTED TRANSACTIONS

     Section 4.1 Interested Transactions. The approval by the affirmative vote of a
majority of the Independent Directors shall be required (in addition to any other Board or
stockholder approval required by any law, rule or regulation) for Purchaser or any of its
Affiliates to enter into or effect, or agree to enter into or effect, any material contract or
transaction between or involving Purchaser or any of its Affiliates, on the one hand, and the
Company or any of its subsidiaries, on the other hand, the terms of which are not expressly
provided for in an agreement in effect before the Effective Date.

     Section 4.2 Right of First Offer of the Company.

          (a) Purchaser shall provide the Company with a right of first offer with respect to the
distribution and marketing in the United States of any pharmaceutical products owned or Controlled
by Purchaser or any of its Affiliates that Purchaser makes available for distribution in the
United States. Purchaser shall grant the Company an exclusive right of offer with respect to the
distribution of such product for a period of 30 days following receipt by the Company of written
notice by Purchaser that such product will be available for distribution (the “Company
Negotiation Period”). If the parties do not reach an agreement with respect to the
distribution of the product within the Company Negotiation Period and enter into a definitive
agreement within 45 days thereafter or if the Company notifies Purchaser in writing during the
Company Negotiation Period that it does not wish to distribute such product, then Purchaser shall
have no further obligation with respect to that product under this Section 4.2(a).

- 7 -

 

     Section 4.3 Right of First Offer of Purchaser.

          (a) The Company shall provide Purchaser with a right of first offer with respect to the
distribution and marketing outside the United States of any pharmaceutical products owned or
Controlled by the Company that the Company makes available for the distribution in any territory
outside the United States. The Company shall grant Purchaser an exclusive right of negotiation
with respect to the distribution of such product for such territories for a period of 30 days
following receipt by Purchaser of written notice by the Company that such product will be
available for distribution (the “Purchaser Negotiation Period”). If the parties do not
reach an agreement with respect to the distribution of the product within the Purchaser
Negotiation Period and enter into a definitive agreement within 30 days thereafter or if Purchaser
notifies the Company in writing during the Purchaser Negotiation Period that it is not interested
or unable to distribute such product, then the Company shall have no further obligation with
respect to that product under this Section 4.3(a).

          (b) For the avoidance of doubt, the provisions of this Section 4.3 shall apply to
each territory outside the United States that the Company intends to distribute a product and as
such if the Company initially only intends to distribute a product in a portion of the territories
outside the United States, the provisions of this Section 4.3 shall apply each time and
for each territory that the Company intends to distribute such product.

ARTICLE V

MISCELLANEOUS

     Section 5.1 Effectiveness. The provisions of this Agreement shall become effective on
the Effective Date.

     Section 5.2 Termination.

          (a) This Agreement shall terminate automatically, without the action of Purchaser, the
Company or the Stockholders, if the Company Stock Purchase Agreement is terminated pursuant to
Section 6.1 thereof prior to the Effective Date.

          (b) This Agreement shall terminate with respect to any Stockholder at such time when such
Stockholder is no longer employed by the Company.

          (c) This Agreement shall terminate at 11:59 p.m. New York City time on the second anniversary
of the Effective Date.

          (d) This Agreement shall terminate at the earliest of (i) such time as Purchaser and its
Affiliates Beneficially Own Common Stock constituting 100% of all outstanding Common Stock on a
Fully Diluted Basis, (ii) such time as Purchaser and its Affiliates Beneficially Own Common Stock
constituting less than 10% of all outstanding Common Stock on a Fully Diluted Basis, or (iii) the
effective time of a Change in Control. “Change in Control” means, with respect to (A) the
Company, any transaction or series of related transactions (including mergers, consolidations and
other forms of business consolidations) following which continuing stockholders of the Company
hold less than 50% of the outstanding voting securities of either the Company, the entity
surviving such transaction or any direct or indirect parent entity of such continuing or surviving
entity or (B) the sale, lease, license, transfer or other disposal of all or substantially all of
the business or assets of the Company (provided, however, that the sale, license
or transfer to another party, in the ordinary course of business, of any Company asset (regardless
of its value or what portion of the Company’s business or assets it may represent) over which
Purchaser has no contractual rights in shall not be considered a Change in Control transaction).

- 8 -

 

          (e) This Article V shall survive termination of this Agreement.

     Section 5.3 Notice.

          (a) All notices and other communications under this Agreement must be in writing and
delivered to the applicable party or parties in person or by delivery to the address or facsimile
number specified below (or to such other address or facsimile number as the recipient previously
shall have specified by notice to the other parties hereunder):

If to the Company:

c/o Cornerstone Therapeutics Inc.

1255 Crescent Green Drive, Suite 250

Cary, NC 27518

Attention: Chief Financial Officer

Copy to: General Counsel

Facsimile: (888) 443-3092

With a copy (which shall not constitute notice) to:

Clifford Chance US LLP

31 West 52nd Street

New York, New York 10019

Attention: John A. Healy

Facsimile: (212) 878-8375

If to any Stockholder:

c/o Cornerstone Therapeutics Inc.

1255 Crescent Green Drive, Suite 250

Cary, NC 27518

Attention: Chief Financial Officer

Copy to: General Counsel

Facsimile: (888) 443-3092

With a copy (which shall not constitute notice) to:

Clifford Chance US LLP

31 West 52nd Street

New York, New York 10019

Attention: John A. Healy

Facsimile: (212) 878-8375

- 9 -

 

If to Purchaser:

Chiesi Farmaceutici S.p.A.

Via Palermo 26/A

43100 Parma

Italy

Attention: President

Copy to: Head of Corporate Development and Legal and

Corporate Affairs Director

Facsimile: +39 0521 774468

With copies (which shall not constitute notice) to:

Morgan, Lewis & Bockius LLP

1111 Pennsylvania Avenue, NW

Washington, DC 20004

Attention: Stephen Paul Mahinka

Facsimile: (202) 739-3001

and

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, New York 10178

Attention: Emilio Ragosa and Steven Navarro

Facsimile: (212) 309-6001

          (b) All notices and other communications sent to the applicable address or facsimile number
specified above shall be deemed to have been delivered at the earlier of (i) the time of actual
receipt by the addressee; (ii) if the notice is sent by facsimile transmission, the time indicated
on the transmitting party’s receipt of confirmation of transmission that time is during the
addressee’s regular business hours on a Business Day, and otherwise at 9:00 a.m. on the next
Business Day after such time; and (iii) if the notice is sent by a nationally recognized,
reputable overnight courier service, the time shown on the confirmation of delivery provided by
that service if that time is during the recipient’s regular business hours on a Business Day, and
otherwise at 9:00 a.m. on the next Business Day after such time.

     Section 5.4 Entire Agreement. This Agreement and the exhibits, annexes and schedules
hereto constitute the sole and entire agreement among the parties to this Agreement with respect to
the subject matter of this Agreement, and supersede all prior and contemporaneous representations,
agreements and understandings, written or oral, with respect to the subject matter hereof.

     Section 5.5 Waiver. Subject to applicable law and except as otherwise provided in
this Agreement, any party to this Agreement may, at any time prior to termination of this
Agreement, extend the time for performance of any obligation under this Agreement of any other
party or waive compliance with any term or condition of this Agreement by any other party. No such
extension or waiver shall be effective unless set forth in a written instrument duly executed by
the party granting such extension or waiver. No delay in asserting or exercising a right under
this Agreement shall be deemed a wavier of that right.

- 10 -

 

     Section 5.6 Amendment. Subject to applicable law and except as otherwise provided in
this Agreement, this Agreement may be amended, supplemented or modified at any time;
provided, that no such amendment, supplement or modification shall be effective unless it
is set forth in a written instrument duly executed by each of the parties hereto.

     Section 5.7 No Third Party Beneficiaries. The terms and provisions of this Agreement
are intended solely for the benefit of each party hereto and their respective successors or
permitted assigns, and it is not the intention of the parties to confer third-party beneficiary
rights upon any other person.

     Section 5.8 Assignment; Binding Effect. Neither this Agreement nor any right,
interest or obligation under this Agreement may be assigned by any party to this Agreement, by
operation of law or otherwise, without the prior written consent of the other parties to this
Agreement and any attempt to do so will be void. Subject to the foregoing, this Agreement is
binding upon, inures to the benefit of and is enforceable by the parties to this Agreement and
their respective successors and assigns.

     Section 5.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD FOR ANY OF THE CONFLICTS OF LAWS
PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

     Section 5.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
DELAWARE CHANCERY COURT SITTING IN THE COUNTY OF NEW CASTLE, OR IF SUCH COURT SHALL NOT HAVE PROPER
JURISDICTION, OF THE UNITED STATES FEDERAL DISTRICT COURT SITTING IN DELAWARE, AND ANY APPELLATE
COURT THEREOF, IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND AGREES THAT ANY SUCH ACTION, SUIT OR
PROCEEDING SHALL BE BROUGHT ONLY IN SUCH COURTS (AND WAIVES AND AGREES NOT TO ASSERT ANY OBJECTION
BASED ON FORUM NON CONVENIENS OR ANY OTHER OBJECTION TO VENUE THEREIN OR JURISDICTION THEREOF);
PROVIDED, HOWEVER, THAT SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS
SECTION 5.10 AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE JURISDICTION OF SAID
COURTS OR IN THE STATE OF DELAWARE OTHER THAN FOR SUCH PURPOSE. Any and all process may be served
in any action, suit or proceeding arising in connection with this Agreement by complying with the
provisions of Section 5.3. Such service of process shall have the same effect as if the
party being served were a resident in the State of Delaware and had been lawfully served with such
process in such jurisdiction. The parties hereby waive all claims
of error by reason of such service. Nothing herein shall affect the right of any party to
serve process in any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the other in any other jurisdiction to enforce judgments or rulings of the
aforementioned courts. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS

- 11 -

 

CONTEMPLATED HEREBY, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
5.10.

     Section 5.11 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this Agreement a legal,
valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and the parties hereto shall cooperate in good faith to formulate and
implement such provision.

     Section 5.12 Counterparts. This Agreement may be executed manually or by facsimile,
in any number of counterparts, all of which will constitute one and the same instrument, and will
become effective when a counterpart shall have been executed and delivered by each party to the
other parties (except that parties that are affiliates need not deliver counterparts to each other
in order for this Agreement to be effective).

     Section 5.13 Remedies. The parties hereto agree that if any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached,
irreparable damage would occur, no adequate remedy at law would exist and damages would be
difficult to determine, and that the parties shall be entitled to injunctive relief to prevent
breaches of this Agreement and to specific performance of the terms hereof, in addition to any
other remedy at law or equity to which the parties may be entitled. Except as otherwise provided
herein, all remedies available under this Agreement, at law or otherwise, shall be deemed
cumulative and not alternative or exclusive of other remedies. The exercise by any party of a
particular remedy shall not preclude the exercise of any other remedy.

- 12 -

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered
as of the day and year first above written.

	 	 	 	 	 
	 	CORNERSTONE THERAPEUTICS INC.

 	 
	 	By:  	/s/
Craig A. Collard	 
	 	 	Name:  	Craig A. Collard	 
	 	 	Title:  	CEO	 
	 
	 	CHIESI FARMACEUTICI S.P.A.

 	 
	 	By:  	/s/
Alberto Chiesi	 
	 	 	Name:  	Alberto Chiesi	 
	 	 	Title:  	President	 
	 

[Signature Page to Governance Agreement]

 

 

	 	 	 	 	 
	 	STOCKHOLDERS (solely with respect to Sections 3.1(c),

3.4(d) and 3.4(e))

/s/ Craig A. Collard
                                                            

Craig A. Collard

 	 
	 	 	 
	 
	 	CORNERSTONE BIOPHARMA HOLDINGS, LTD.

 	 
	 	By:  	/s/
Craig A. Collard	 
	 	Name: Craig A. Collard	 
	 	Title: CEO	 
	 
	 	CAROLINA PHARMACEUTICALS LTD.

 	 
	 	By:  	/s/
Craig A. Collard	 
	 	 	Name:  	Craig A. Collard	 
	 	 	Title:  	Director	 
	 

[Signature Page to Governance Agreement]

 

 

	 	 	 	 	 
	 	STOCKHOLDERS (solely with respect to Sections 3.1(c),

3.4(d) and 3.4(e))

/s/ Steven M. Lutz      
              
              
             
             

Steven M. Lutz

 	 
	 	 	 
	 	 	 
	 	 	 
	 
	 	LUTZ FAMILY LIMITED PARTNERSHIP

 	 
	 	By:  	STEVEN M. LUTZ, it general partner

 	 
	 	/s/ Steven M. Lutz	 
	 	 	 	 
	 

[Signature Page to Governance Agreement]exv10w4

Exhibit 10.4

 

STOCKHOLDERS AGREEMENT

by and among

CHIESI FARMACEUTICI SPA,

CRAIG A. COLLARD,

STEVEN M. LUTZ,

CORNERSTONE BIOPHARMA HOLDINGS, LTD.,

CAROLINA PHARMACEUTICALS, LTD.,

LUTZ FAMILY LIMITED PARTNERSHIP

and

CORNERSTONE THERAPEUTICS INC.

Dated as of May 6, 2009

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	Section 1.1. Defined Terms
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
	 	 	3	 
	 
	 	 	 	 
	Section 2.1. Ownership of Shares
	 	 	3	 
	 
	 	 	 	 
	Section 2.2. Authority
	 	 	3	 
	 
	 	 	 	 
	Section 2.3. Consents and Approvals; No Violations
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III LIQUIDITY AND TRANSFER RESTRICTIONS
	 	 	                                                                                               4	 
	 
	 	 	 	 
	Section 3.1. Ownership of Shares; Legend
	 	 	4	 
	 
	 	 	 	 
	Section 3.2. Limitations on Transfers of Common Stock During the Blackout Period
	 	 	5	 
	 
	 	 	 	 
	Section 3.3. Purchaser’s Call Option
	 	 	5	 
	 
	 	 	 	 
	Section 3.4. Limitations on Purchases of Additional Common Stock
	 	 	6	 
	 
	 	 	 	 
	ARTICLE IV VOTING
	 	 	6	 
	 
	 	 	 	 
	Section 4.1. Agreement to Vote
	 	 	6	 
	 
	 	 	 	 
	ARTICLE V MISCELLANEOUS
	 	 	7	 
	 
	 	 	 	 
	Section 5.1. Further Assurances
	 	 	7	 
	 
	 	 	 	 
	Section 5.2. Notices
	 	 	7	 
	 
	 	 	 	 
	Section 5.3. Entire Agreement
	 	 	8	 
	 
	 	 	 	 
	Section 5.4. Waiver
	 	 	8	 
	 
	 	 	 	 
	Section 5.5. Amendment
	 	 	9	 
	 
	 	 	 	 
	Section 5.6. No Third-Party Beneficiaries
	 	 	9	 
	 
	 	 	 	 
	Section 5.7. Assignment; Binding Effect
	 	 	9	 
	 
	 	 	 	 
	Section 5.8. Governing Law
	 	 	9	 
	 
	 	 	 	 
	Section 5.9. CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL
	 	 	9	 
	 
	 	 	 	 
	Section 5.10. Remedies
	 	 	10	 
	 
	 	 	 	 
	Section 5.11. Invalid Provisions
	 	 	10	 
	 
	 	 	 	 
	Section 5.12. Counterparts
	 	 	10	 
	 
	 	 	 	 
	Section 5.13. Effectiveness; Termination
	 	 	10	 
	 
	 	 	 	 
	Annex A            Covered Shares
	 	 	 	 

i

 

STOCKHOLDERS AGREEMENT

     This STOCKHOLDERS AGREEMENT, dated as of May 6, 2009 (this “Agreement”), is by and
among CHIESI FARMACEUTICI SPA, a corporation organized under the laws of Italy
(“Purchaser”), CRAIG A. COLLARD, CORNERSTONE BIOPHARMA HOLDINGS, LTD., a limited liability
company organized under the laws of Anguilla, CAROLINA PHARMACEUTICALS, LTD., a limited liability
company organized under the laws of Bermuda, LUTZ FAMILY LIMITED PARTNERSHIP, North Carolina
limited partnership, and STEVEN M. LUTZ (the “Stockholders”), and CORNERSTONE THERAPEUTICS
INC., a Delaware corporation (the “Company”).

RECITALS

     WHEREAS, concurrently with the execution and delivery of this Agreement, (i) Purchaser and
certain of the Stockholders are entering into a Stock Purchase Agreement (the “Initial Stock
Purchase Agreement”), dated the same date as this Agreement, and (ii) the Company and Purchaser
are entering into a Stock Purchase Agreement (the “Company Stock Purchase Agreement”), also
dated the same date as this Agreement;

     WHEREAS, following consummation of the transactions contemplated by the Initial Stock Purchase
Agreement and the Company Stock Purchase Agreement, Purchaser will own approximately 13,502,741
shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”); and

     WHEREAS, the parties to this Agreement desire to set forth certain agreements regarding future
transfers of Common Stock by any of the Stockholders, and regarding an option on the part of
Purchaser to purchase certain shares of Common Stock from the Stockholders;

     NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1. Defined Terms. As used in this Agreement, the following terms shall have
the respective meanings set forth below:

     “Beneficially Own” shall mean, with respect to any security, having the power to
direct or control the voting or disposition of such security, and “Beneficially Owned”
shall have a correlative meaning. For this purpose, securities underlying an immediately
exercisable option or conversion or similar right are deemed Beneficially Owned by the holder of
the option or other such right.

     “Beneficial Owner” shall mean, with respect to any security, a Person who Beneficially
Owns such security, and “Beneficial Ownership” shall have a correlative meaning.

     “Blackout Period” shall mean the period beginning on the Closing and ending at
11:59 p.m. New York City time on the second anniversary of the Closing.

     “Business Day” shall mean any day other than a Saturday, Sunday or other day on which
commercial banks located in New York City, New York are required or permitted by law to be closed
for the conduct of regular banking business.

 

 

     “Call Option Period” shall mean as to any Stockholder the period beginning at
9:00 a.m. New York City time on the earlier to occur of the (i) the expiration of the Blackout
Period and (ii) the date following the date of the Employment Termination Event and ending on the
date that is 30 days after such date.

     “Closing” shall mean the Closing provided for in the Company Stock Purchase Agreement.

     “Corporate Affiliate” shall mean, with respect to any Stockholder, a corporation of
which all the capital stock is owned, directly or indirectly, by such Stockholder.

     “Covered Shares” shall mean, with respect to each Stockholder, the number of shares of
Common Stock set forth opposite the name of such Stockholder on Annex A under “Covered
Shares”, ratably and equitably adjusted to take into account any stock split, stock dividend,
reverse stock split or similar adjustment to capital stock occurring after the date of this
Agreement.

     “Employment Termination Event” shall mean (i) as to Craig A. Collard, Cornerstone
Biopharma Holdings, Ltd. and Carolina Pharmaceuticals, Ltd. the date of termination of Mr.
Collard’s employment with the Company and (ii) as to Steven M. Lutz and Lutz Family Limited
Partnership the date of termination of Mr. Lutz’s employment with the Company; provided,
that in each such case, a termination that results from a resignation without Good Reason and
termination for Cause (as those terms are defined in the applicable employment agreements with the
Company) shall not constitute an Employment Termination Event.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Exempt Transfer” shall mean any direct or indirect Transfer of Beneficial Ownership
of Common Stock made:

	 	(i)	 	to any Trust Affiliate, Partnership Affiliate or Corporate Affiliate of the
transferor; provided, that after giving effect to such Transfer, the transferor
continues to own at least one share of Common Stock and continues to be a party to this
Agreement and bound by the terms and provisions hereof; and further
provided, that if on a later date the condition in the foregoing proviso ceases
to be satisfied or such Trust Affiliate, Partnership Affiliate or Corporate Affiliate
ceases to be a Trust Affiliate, Partnership Affiliate or Corporate Affiliate of the
transferor, a Transfer (which shall not constitute an Exempt Transfer) of the amount of
Common Stock originally Transferred to such transferee shall be deemed to have
occurred; or
	 
	 	(ii)	 	by operation of the laws of descent and distribution.

     “Partnership Affiliate” shall mean, with respect to any Stockholder, a limited
partnership, the general partner of which is, or is under the exclusive control of, and the
majority of the limited liability partnership interests of which are owned by, such Stockholder.

     “Per Share Option Price” shall mean $12.00, ratably and equitably adjusted to take
into account any stock split, stock dividend, reverse stock split or similar adjustment to capital
stock occurring after the date of this Agreement.

     “Person” shall mean any individual, partnership, firm, corporation, association, joint
venture, trust or other entity, or any government or political subdivision or agency, department or
instrumentality thereof.

2

 

     “Transfer” shall mean any sale, assignment or other outright transfer of Beneficial
Ownership of any shares of Common Stock. “Transferred” shall have a correlative meaning.

     “Trust Affiliate” shall mean, with respect to any Stockholder, a trust established for
the primary benefit of such Stockholder, so long as the only Persons entitled to direct the voting
of any Common Stock held by the trust are the transferor, another Stockholder, or a bank or other
corporation having trust powers.

     In addition, the following terms are defined elsewhere in the Agreement:

	 	 	 
	“Agreement”

	 	Preamble
	“Call Option

	 	Section 3.3(a)
	“Call Option Closing Date

	 	Section 3.3(b)
	“Call Option Notice”

	 	Section 3.3(b)
	“Company”

	 	Preamble
	“Company Stock Purchase Agreement”

	 	Recitals
	“Common Stock”

	 	Recitals
	“contract”

	 	Section 2.3(b)
	“Encumbrances”

	 	Section 2.1
	“Governmental Authority”

	 	Section 2.3(a)
	“Purchaser”

	 	Preamble
	“Stockholders”

	 	Preamble

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

     Each Stockholder represents and warrants, severally but not jointly and solely with respect to
such Stockholder and not with respect to the other Stockholder, to Purchaser as follows:

     Section 2.1. Ownership of Shares. As of the date of this Agreement, such Stockholder
is the lawful record and beneficial owner of the number of shares of Common Stock set forth next to
such Stockholder’s name on Exhibit A free and clear of all liens, charges, security
interests, mortgages, pledges, options, preemptive rights, rights of first refusal or first offer,
proxies, levies, voting trusts or agreements, or other adverse claims or restrictions on title or
transfer of any nature whatsoever (collectively, “Encumbrances”), other than restrictions
on transfer imposed under applicable securities laws.

     Section 2.2. Authority. Such Stockholder is either (a) an individual with the
requisite legal capacity and authority or (b) an entity with the requisite partnership or limited
liability company power and authority to execute and deliver this Agreement and to perform the
transactions contemplated by this Agreement. This Agreement has been duly and validly executed and
delivered by such Stockholder and, assuming the due authorization, execution and delivery of this
Agreement by each other party hereto, constitutes legal, valid and binding obligations of such
Stockholder, enforceable against such Stockholder in accordance with its terms.

     Section 2.3. Consents and Approvals; No Violations.

     (a) The execution, delivery and performance by such Stockholder of this Agreement and the
consummation by such Stockholder of the transactions contemplated hereby do not and will not
require any filing or registration with, notification to, or authorization, permit, consent or
approval of, or other action

3

 

by or in respect of, any U.S. or non-U.S. government, regulatory or administrative authority,
agency, instrumentality or commission or any court, tribunal, judicial or arbitral body or other
similar authority (a “Governmental Authority”) other than where the failure to obtain such
consents, approvals, authorizations or permits or to make such filings or notifications would not
reasonably be expected to have a Material Adverse Effect (as defined in the Company Stock Purchase
Agreement).

     (b) The execution, delivery and performance by such Stockholder of this Agreement and the
consummation by such Stockholder of the transactions contemplated hereby do not and will not (i)
result in a violation or breach of, or constitute (with or without notice or lapse of time or both)
a default under, or give rise to any right of termination, amendment, cancellation, acceleration or
loss of benefits or the creation or acceleration of any right or obligation under or result in the
creation of any Encumbrance upon any of the properties or assets of such Stockholder under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, loan,
credit agreement, lease, license, permit, concession, franchise, purchase order, sales order,
contract, agreement or other instrument, understanding or obligation, whether written or oral (a
“contract”), to which such Stockholder is a party or by which any of its properties or
assets may be bound or (ii) violate any law applicable to such Stockholder or any of his properties
or assets, except in each such case as would not reasonably be expected to prevent or delay the
consummation of the transactions contemplated hereby.

ARTICLE III

LIQUIDITY AND TRANSFER RESTRICTIONS

     Section 3.1. Ownership of Shares; Legend.

     (a) Each certificate representing any of the shares of Common Stock held by a Stockholder
shall bear the following legend in addition to any other legend required under applicable law:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A STOCKHOLDERS AGREEMENT BY AND AMONG THE
COMPANY AND THE PERSONS SPECIFIED THEREIN, A COPY OF WHICH AGREEMENT
IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. THE SALE,
TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS SUBJECT TO THE
TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE TRANSFERABLE ONLY
UPON PROOF OF COMPLIANCE THEREWITH.

     (b) A notation will be made in the appropriate transfer records of the Company with respect
to the restrictions on Transfer of the shares of Common Stock referred to in this Agreement.

     (c) It shall be a condition precedent to any Exempt Transfer of shares of Common Stock to
any Person who is not a party to this Agreement that such Person agree in writing to be bound by
the obligations of such Person’s transferor under this Agreement and for all purposes thereafter
the definition of Stockholder as used in this Agreement shall include transferees. If the
transferee acquires its shares pursuant to an Exempt Transfer, upon consummation of such Exempt
Transfer in accordance with this Agreement the transferee will succeed to the rights of the
transferor under this Agreement.

4

 

     Section 3.2. Limitations on Transfers of Common Stock During the Blackout Period.

     (a) During the Blackout Period, no Stockholder shall, directly or indirectly, Transfer any
Covered Shares except (i) pursuant to an Exempt Transfer or (ii) as permitted or required
pursuant to any other provision of this Article III.

     (b) During the Blackout Period, no Stockholder shall knowingly Transfer any shares of
Common Stock in a privately negotiated transaction to a pharmaceutical company.

     (c) Following the Blackout Period, there shall be no further restriction on Transfers of
Shares of Common Stock by any Stockholder. Any Transfer or purported Transfer in violation of
the foregoing restrictions shall be void and of no effect and shall not be recognized by the
Company.

     Section 3.3. Purchaser’s Call Option.

     (a) Purchaser shall have an option (the “Call Option”), exercisable in whole but
not in part on a single occasion during the Call Option Period applicable to any Stockholder and
such Stockholder’s affiliates, to acquire all the Covered Shares then owned by such Stockholder
and such Stockholder’s affiliates, for a price per Covered Share equal to the Per Share Option
Price on the terms set forth in this Section 3.3.

     (b) The Call Option may be exercised by Purchaser by delivery of a notice (the “Call
Option Notice”) to the Stockholders stating (i) that Purchaser is exercising the Call
Option; and (ii) the date (the “Call Option Closing Date”) on which the sale of Covered
Shares pursuant to the Call Option is to occur (which shall be a Business Day not less than 5
Business Days and not more than 15 Business Days after the later of (x) the date of the Call
Option Notice, or (y) the first date on which all applicable governmental and third party
permits, approvals and notices applicable to the exercise of the Call Option have been given or
obtained, and all legally required waiting periods have expired). Purchaser and the
Stockholders will use reasonable best efforts (and cause the Company to use its reasonable best
efforts) to obtain and give all applicable governmental permits, approvals and notices required
for the exercise of the Call Option as promptly as reasonably practicable.

     (c) Delivery of a Call Option Notice shall create a binding obligation on the part of
Purchaser to purchase all the Covered Shares from the recipients of the Call Option Notice for a
purchase price, payable in full in cash at the closing of the sale, equal to the aggregate Per
Share Option Price of the Covered Shares, and a binding obligation on the part of such recipient
to sell those shares for that price. The closing of the purchase and sale of the shares shall
take place at the principal business offices of the Company at 10:00 AM local time on the Call
Option Closing Date. At the closing, each selling Stockholder shall deliver (1) one or more
stock certificates, duly endorsed or with duly executed stock powers attached, conveying the
requisite number of shares to Purchaser or its nominee, duly authorized and validly issued, free
and clear of all Encumbrances (other than restrictions imposed under applicable securities laws
or this Agreement), and (2) a certificate representing that the selling Stockholder is
transferring good and marketable title to such shares (or interests therein) free of all such
Encumbrances. Purchaser shall pay the applicable purchase price to each selling Stockholder at
the closing against delivery of the stock certificates by certified or bank check or, if
requested by the selling Stockholder, by wire transfer of immediately available funds to an
account specified by the selling Stockholder.

     (d) If any Covered Shares in respect of which a Call Option is exercised are Beneficially
Owned pursuant to an unexercised but immediately exercisable stock option, so long as the Per
Share Option Price is greater than the exercise price per share of the option, then at or prior
to the applicable Call Option Closing Date, the applicable selling Stockholder shall exercise
such option in accordance with the applicable stock option plan and stock option agreement
governing such stock option and the

5

 

Purchaser shall purchase such underlying shares for delivery at the closing of the Call
Option exercise. Any purported exercise of the Call Option with respect to Covered Shares that
are subject to a stock option shall be invalid unless the Per Share Option Price is at least
equal to the exercise price per share of the option and the stock option is immediately
exerciseable.

     Section 3.4. Limitations on Purchases of Additional Common Stock. Each Stockholder
agrees that, during the Blackout Period, such Stockholder shall not, directly or indirectly,
purchase or otherwise acquire, or propose or offer to purchase or acquire, any shares of Common
Stock or any Beneficial Ownership thereof, whether by tender offer, market purchase, privately
negotiated purchase, merger or otherwise, except through acquisitions of shares of Common Stock (i)
effected pursuant to transactions approved by the Company’s board of directors or by a majority of
the independent directors on the Company’s board of directors; (ii) effected solely to the extent
necessary to maintain the Stockholder’s level of Beneficial Ownership of the shares of Common Stock
as of the date hereof; and (iii) pursuant to the Company’s equity compensation arrangements or the
exercise of any options or warrants or similar rights granted or awarded under such arrangements.

ARTICLE IV

VOTING

     Section 4.1. Agreement to Vote. Each Stockholder agrees that, at any meeting of the
stockholders of the Company called to consider a transaction in which Purchaser or its affiliate
will acquire all the outstanding capital stock of the Company, such Stockholder shall vote all
shares of Common Stock owned by such Stockholder at the applicable record date set for such meeting
in the same proportions that the shares of Common Stock Beneficially Owned by the other
stockholders of the Company (other than Purchaser and its affiliates) are voted on such matter.
The Stockholders’ obligations under this Section 4.1 shall apply only if (i) the directors
of the Company who were not designated by, and are otherwise independent of, Purchaser and its
affiliates (other than the Company) shall have approved the transaction to be voted on at the
meeting, and shall have recommended that the Company’s stockholders vote to approve the
transaction, by the affirmative vote of a majority of such directors; and (ii) such approval and
recommendation shall not have been withdrawn.

6

 

ARTICLE V

MISCELLANEOUS

     Section 5.1. Further Assurances. Each party shall execute and deliver such additional
instruments and other documents and shall take such further actions as may be necessary or
appropriate to effectuate, carry out and comply with all of the terms of this Agreement and the
transactions contemplated hereby, including making application for all consents and approvals
required in connection with the transactions contemplated hereby and diligently pursuing the
receipt of such consents and approvals in good faith thereafter at such time as may be necessary to
comply with all of the terms of this Agreement and the transactions contemplated hereby.

     Section 5.2. Notices.

     (a) All notices and other communications under this Agreement must be in writing and
delivered to the applicable party or parties in person or by delivery to the address or
facsimile number specified below (or to such other address or facsimile number as the recipient
previously shall have specified by notice to the other parties hereunder):

If to Purchaser:

Chiesi Farmaceutici SpA

Via Palermo 26/A

43100 Parma

Italy

Attention: President

Copy to: Head of Corporate Development and Legal and

Corporate Affairs Director

Facsimile: +39 0521 774468

with copies to:

Morgan, Lewis & Bockius LLP

1111 Pennsylvania Avenue, NW

Washington, DC 20004

Attention: Stephen Paul Mahinka

Facsimile: (202) 739-3001

and

7

 

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, New York 10178

Attention: Emilio Ragosa and Steven Navarro

Facsimile: (212) 309-6001

If to the Stockholders:

c/o Cornerstone Therapeutics Inc.

1255 Crescent Green Drive, Suite 250

Cary, NC 27518

Attention: Chief Financial Officer

Copy to: General Counsel

Facsimile: (888) 443-3092

If to the Company:

c/o Cornerstone Therapeutics Inc.

1255 Crescent Green Drive, Suite 250

Cary, NC 27518

Attention: Chief Financial Officer

Copy to: General Counsel

Facsimile: (888) 443-3092

with a copy to:

Clifford Chance US LLP

31 West 52nd Street

New York, New York 10019

Attention: John A. Healy

Facsimile: (212) 878-8375

     (b) All notices and other communications sent to the applicable address or facsimile number
specified above shall be deemed to have been delivered at the earlier of (i) the time of actual
receipt by the addressee; (ii) if the notice is sent by facsimile transmission, the time indicated
on the transmitting party’s receipt of confirmation of transmission that time is during the
addressee’s regular business hours on a Business Day, and otherwise at 9:00 a.m. on the next
Business Day after such time; and (iii) if the notice is sent by a nationally recognized, reputable
overnight courier service, the time shown on the confirmation of delivery provided by that service
if that time is during the recipient’s regular business hours on a Business Day, and otherwise at
9:00 a.m. on the next Business Day after such time.

     Section 5.3. Entire Agreement. This Agreement and the exhibits, annexes and schedules
hereto, constitute the sole and entire agreement among the parties to this Agreement with respect
to the subject matter of this Agreement, and supersede all prior and contemporaneous
representations, agreements and understandings, written or oral, with respect to the subject matter
hereof.

     Section 5.4. Waiver. Subject to applicable law and except as otherwise provided in
this Agreement, any party to this Agreement may, at any time prior to the Closing, extend the time
for performance of any obligation under this Agreement of any other party or waive compliance with
any term or condition of this Agreement by any other party. No such extension or waiver shall be
effective

8

 

unless set forth in a written instrument duly executed by the party granting such extension or
waiver. No delay in asserting or exercising a right under this Agreement shall be deemed a wavier
of that right.

     Section 5.5. Amendment. Subject to applicable law and except as otherwise provided in
this Agreement, this Agreement may be amended, supplemented or modified at any time;
provided, that no such amendment, supplement or modification shall be effective unless it
is set forth in a written instrument duly executed by the Company, Purchaser and by each
Stockholder whose rights or obligations are altered thereby.

     Section 5.6. No Third-Party Beneficiaries. The terms and provisions of this Agreement
are intended solely for the benefit of each party hereto and their respective successors or
permitted assigns, and it is not the intention of the parties to confer third-party beneficiary
rights upon any other person.

     Section 5.7. Assignment; Binding Effect. Except as otherwise expressly provided; this
Agreement, neither this Agreement nor any right, interest or obligation under this Agreement may be
assigned by any party to this Agreement, by operation of law or otherwise, without the prior
written consent of the other parties to this Agreement and any attempt to do so will be void.
Subject to the foregoing, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties to this Agreement and their respective successors and assigns.

     Section 5.8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD FOR ANY OF THE CONFLICTS OF LAWS
PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

     Section 5.9. CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL.
EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
DELAWARE CHANCERY COURT SITTING IN THE COUNTY OF NEW CASTLE, OR IF SUCH COURT SHALL NOT HAVE PROPER
JURISDICTION, OF THE UNITED STATES FEDERAL DISTRICT COURT SITTING IN DELAWARE, AND ANY APPELLATE
COURT THEREOF, IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND AGREES THAT ANY SUCH ACTION, SUIT OR
PROCEEDING SHALL BE BROUGHT ONLY IN SUCH COURTS (AND WAIVES AND AGREES NOT TO ASSERT ANY OBJECTION
BASED ON FORUM NON CONVENIENS OR ANY OTHER OBJECTION TO VENUE THEREIN OR JURISDICTION THEREOF);
PROVIDED, HOWEVER, THAT SUCH CONSENT TO JURISDICTION IS SOLELY FOR THE PURPOSE REFERRED TO IN THIS
SECTION 5.9 AND SHALL NOT BE DEEMED TO BE A GENERAL SUBMISSION TO THE JURISDICTION OF SAID
COURTS OR IN THE STATE OF DELAWARE OTHER THAN FOR SUCH PURPOSE. Any and all process may be served
in any action, suit or proceeding arising in connection with this Agreement by complying with the
provisions of Section 5.2. Such service of process shall have the same effect as if the
party being served were a resident in the State of Delaware and had been lawfully served with such
process in such jurisdiction. The parties hereby waive all claims of error by reason of such
service. Nothing herein shall affect the right of any party to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against the other in any
other jurisdiction to enforce judgments or rulings of the aforementioned courts. EACH PARTY TO
THIS AGREEMENT HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES

9

 

HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.9.

     Section 5.10. Remedies. The parties hereto agree that if any of the provisions of
this Agreement were not performed in accordance with their specific terms or were otherwise
breached, irreparable damage would occur, no adequate remedy at law would exist and damages would
be difficult to determine, and that the parties shall be entitled to injunctive relief to prevent
breaches of this Agreement and to specific performance of the terms hereof, in addition to any
other remedy at law or equity to which the parties may be entitled. Except as otherwise provided
herein, all remedies available under this Agreement, at law or otherwise, shall be deemed
cumulative and not alternative or exclusive of other remedies. The exercise by any party of a
particular remedy shall not preclude the exercise of any other remedy.

     Section 5.11. Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this Agreement a legal,
valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and the parties hereto shall cooperate in good faith to formulate and
implement such provision.

     Section 5.12. Counterparts. This Agreement may be executed manually or by facsimile,
in any number of counterparts, all of which will constitute one and the same instrument, and will
become effective when a counterpart shall have been executed an delivered by each party to the
other parties (except that parties that are affiliates need not deliver counterparts to each other
in order for this Agreement to be effective).

     Section 5.13. Effectiveness; Termination. This Agreement shall become effective as of
the Closing Date (as defined in the Stock Purchase Agreement, dated the same date as this
Agreement, among the Company and Purchaser). Notwithstanding the foregoing, this Agreement shall
terminate automatically, without action of any of the Stockholders, Purchaser or the Company, if
the Company Stock Purchase Agreement is terminated pursuant to Section 6.1 thereof. This
Agreement may be terminated at any time by an instrument in writing signed by all of the parties
hereto and shall terminate automatically as to the relevant Stockholders upon an Employment
Termination Event and as to all parties when the Common Stock is no longer registered under Section
12 of the Exchange Act.

10

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	CORNERSTONE THERAPEUTICS INC.

 	 
	 	By:  	/s/
Craig A. Collard	 
	 	 	Name:  	Craig A. Collard	 
	 	 	Title:  	CEO	 
	 
	 	CHIESI FARMACEUTICI SPA

 	 
	 	By:  	/s/
Alberto Chiesi	 
	 	 	Name:  	Alberto Chiesi	 
	 	 	Title:  	President	 
	 

[Signature Page to Stockholders Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	/s/
Craig A. Collard
	 	 
	 	 	Craig A. Collard	 	 
	 
	 	 	 	 	 	 
	 	 	CORNERSTONE BIOPHARMA HOLDINGS, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Craig A. Collard	 	 
	 

	 	Name:
	 	Craig A. Collard
	 	 
	 

	 	Title:	 	CEO	 	 
	 
	 	 	 	 	 	 
	 	 	CAROLINA PHARMACEUTICALS LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/
Craig A. Collard	 	 
	 

	 	Name:
	 	Craig A. Collard
	 	 
	 

	 	Title:	 	Director	 	 

[Signature Page to Stockholders Agreement]

 

 

	 	 	 	 	 
	 

	 	/s/
 Steven M. Lutz
	 	 
	 

	 	Steven M. Lutz
	 	 
	 
	 	 	 	 
	 

	 	LUTZ FAMILY LIMITED PARTNERSHIP	 	 
	 
	 	 	 	 
	 

	 	By: STEVEN M. LUTZ, its general partner	 	 
	 
	 	 	 	 
	 

	 	/s/ Steven M. Lutz
	 	 
	 

	 	Steven M. Lutz
	 	 

[Signature Page to Stockholders Agreement]

 

 

ANNEX A

COVERED SHARES

	 	 	 	 	 
	Stockholder	 	Number of Covered Shares
	Craig Collard
	 	 	228,559	 
	Cornerstone Biopharma Holdings, Ltd.
	 	 	2,561,780	 
	Carolina Pharmaceuticals Ltd.
	 	 	947,207	 
	Lutz Family Limited Partnership
	 	 	541,878	 
	Steven M. Lutz
	 	 	195,227

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