Exhibit 10.1
SECOND AMENDMENT TO ACQUISITION
AGREEMENT
This SECOND AMENDMENT TO
ACQUISITION AGREEMENT (this “ Amendment ”)
is made and entered into as of August 6, 2009, by and among
Cell Therapeutics, Inc., a Washington corporation (“
CTI ” or “ Parent ”), and each of
Tom Hornaday and Lon Smith (collectively, the “
Stockholder Representatives ”) in their capacities as
Stockholder Representatives of the former stockholders (the “
Company Stockholders ”) of Systems Medicine, Inc., a
Delaware corporation (the “ Company ”),
identified in the Acquisition Agreement (as defined
below).
RECITALS
WHEREAS, CTI, Cactus Acquisition Corp., a Delaware
corporation and then a wholly owned subsidiary of CTI, Saguaro
Acquisition Company LLC, a Delaware limited liability company and a
wholly owned subsidiary of CTI, the Company and the Stockholder
Representatives entered into that certain Acquisition Agreement
dated as of July 24, 2007 (the “ Acquisition
Agreement ”), pursuant to which CTI acquired the Company
by Merger and paid to the Company Stockholders the Total Closing
Consideration, as further described therein; capitalized terms used
but not otherwise defined herein shall have the respective meanings
set forth in the Acquisition Agreement;
WHEREAS, CTI and the Stockholder Representatives entered
into that certain First Amendment to Acquisition Agreement dated as
of January 6, 2009 (the “ First Amendment
”), pursuant to which the Earn Out Payment under
Section 2.3(a) of the Acquisition Agreement would be satisfied
by an immediate substitute earn out payment;
WHEREAS, pursuant to that certain Cancellation Agreement
dated as of January 23, 2009 (the “ Cancellation
Agreement ”), CTI and the Stockholder Representatives
nullified the First Amendment and agreed that the original
Acquisition Agreement would be reinstated without modification and
continue in full force and effect as of the date
thereof;
WHEREAS, prior to the cancellation of the First
Amendment, the three (3) Company Stockholders who were
Nonaccredited Holders were paid substitute cash in full
satisfaction of their rights to any Earn Out Payment under the
Acquisition Agreement;
WHEREAS, under the terms of the Acquisition Agreement,
the Company Stockholders (other than the Nonaccredited Holders)
have a contingent right to receive the Earn Out Payment subject to
and upon satisfaction of certain regulatory milestones relating to
the Food & Drug Administration approval process in the
development of Brostallicin, as identified in
Section 2.3(a)(i) and (ii) of the Acquisition Agreement
(collectively, the “ Earn Out Milestones ”),
which Earn Out Milestones have not been achieved as of the date
hereof;
WHEREAS, pursuant to the Acquisition Agreement, the
Company Stockholders appointed the Stockholder Representatives as
attorneys-in-fact to take any and all actions and make any
decisions required or permitted to be taken by the Stockholder
Representatives under the Acquisition Agreement, including, without
limitation, taking such actions as may be necessary or desirable in
connection with the Earn Out Payment under Section 2.3 of the
Acquisition Agreement; and
WHEREAS, CTI believes that it is in the best interests of
CTI and its shareholders, and each of the Stockholder
Representatives believes that it is in the best interests of the
Company Stockholders, to enter into this Amendment to modify the
terms and conditions of the Earn Out Payment as set forth
below.
AGREEMENT
NOW, THEREFORE,
in consideration of the foregoing
and the mutual promises, covenants and conditions contained herein,
the parties hereby agree as follows:
1. Earn Out Payment
Substitute . Section 2.3(a) of the Acquisition
Agreement is hereby deleted in its entirety and shall have no
further force or effect as of the date hereof. In consideration of
the foregoing, upon satisfaction of the Conditions to Closing set
forth in Section 2 of this Amendment (the “ Closing
Date ”), CTI shall pay to the Company Stockholders (other
than the Nonaccredited Holders) an aggregate amount of Six Million
Dollars ($6,000,000) based upon each such Company
Stockholder’s Pro Rata Share as determined in accordance with
this Agreement, by delivery of Parent Common Stock to each such
Company Stockholder (the “ Substitute Shares ”)
based on the Parent Stock Price (as defined below). The Pro Rata
Share is as set forth on the Spreadsheet provided to CTI pursuant
to Section 5.12 of the Acquisition Agreement except for the
amounts related to the Nonaccredited Holders which have been
deleted, as their rights to the Earn Out Payment have previously
been satisfied. For purposes of this Amendment and the calculation
of the number of Substitute Shares to be issued hereunder, “
Parent Stock Price ” shall mean the closing share
price of the Parent Common Stock on The NASDAQ Capital Market (or
if the Parent Common Stock is not then traded on The NASDAQ Capital
Market, such other market or exchange where the Parent Common Stock
is then traded) on the day the Required Parent Shareholders (as
defined below) approve the issuance contemplated by this Amendment.
The Pro Rata Share of the Substitute Shares to be issued to each
Company Stockholder is set forth on Schedule 1 attached
hereto.
2. Conditions to Closing
. The respective obligations of each party under this Amendment
shall be subject to the satisfaction of the following
conditions:
(a) Shareholder Approval .
CTI shall obtain shareholder approval of the issuance of the
Substitute Shares as required by The NASDAQ Capital Market and
applicable law (which shall not require greater than a majority of
the total votes cast on the proposal, by person or by proxy) at
CTI’s annual shareholder meeting (the “ Required
Parent Shareholders ”), which is scheduled to be held on
October 20, 2009 (the “ Annual Meeting
”).
(b) Voting Agreement . The
Stockholder Representatives shall use commercially reasonable
efforts to cause all of the Company Stockholders, including the
Required Company Stockholders (as defined below), to execute and
deliver a voting agreement in respect of Registrable Shares owned,
acquired hereunder or hereinafter acquired, in form and substance
reasonably acceptable to CTI and the Stockholder Representatives
(the “ Voting Agreement ”). For purposes of this
Amendment, the “ Required Company Stockholders ”
shall include those Company Stockholders who immediately prior to
the Merger owned and held of record at least a majority of the
Company Capital Stock.
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