Chiesi Agreement to Purchase Shares from Carolina — March 16, 2012 On March 16, 2012, Carolina Pharmaceuticals Ltd., a Bermuda company (“Carolina”) and Chiesi entered into a stock purchase agreement (the “March 16, 2012 Stock Purchase Agreement”), whereby Carolina agreed to sell, and Chiesi agreed to purchase, 1,443,913 shares of Common Stock held by Carolina for $6.25 per share for aggregate proceeds of approximately $9.0 million. Chiesi had approached Carolina regarding its willingness to sell additional shares in a private transaction to allow Chiesi to increase its ownership in the Company. The parties agreed that a private sale was in the best interests of the parties, the Company and the Company’s other stockholders in that it would avoid potential short-term market distortions that could have occurred had Chiesi sought to purchase the shares in the open market. The closing of the transaction contemplated by the March 16, 2012 Stock Purchase Agreement occurred on April 3, 2012 following approval of the transaction by the boards of directors of Chiesi and Carolina on March 30, 2012 and March 31, 2012, respectively. Credit Agreement between Chiesi and the Company — June 21, 2012 On June 21, 2012, the Company entered into a senior secured term loan facility (the “Facility”) with Chiesi, pursuant to a credit agreement (the “2012 Credit Agreement”) between the Company and Chiesi executed on June 21, 2012. The Facility is comprised of (i) a five-year Term Loan A of $60 million at 7.5% interest per annum and (ii) a five-year Term Loan B of $30 million at 6.5% interest per annum. Principal amounts outstanding under Term Loan B may be converted into Common Stock at $7.098 per share at Chiesi’s option at any time during the 24 months following the closing of the Facility, up to an aggregate of 4,226,542 shares of Common Stock. The source of the consideration provided by Chiesi for the purchases of Common Stock and Term Loan B described above was working capital. No borrowed funds were used to purchases of Common Stock described above, other than any borrowed funds used for working capital purposes in the ordinary course of business. The descriptions of the Stock Purchase Agreement, the Stockholders Stock Purchase Agreement, the Governance Agreement, the Stockholders Agreement, the Chiesi Registration Rights Agreement, the Stockholders Registration Rights Agreement, the Chiesi Voting Agreement, the Stockholders Voting Agreement, the December 16, 2010 Stock Purchase Agreement, the March 16, 2012 Stock Purchase Agreement and the 2012 Credit Agreement do not purport to be complete and are qualified in their entirety by the following, which are incorporated herein by reference: (i) the Stock Purchase Agreement, which is referenced herein as Exhibit 1; (ii) the Stockholders Stock Purchase Agreement, which is referenced herein as Exhibit 2; (iii) the Governance Agreement, which is referenced herein as Exhibit 3; (iv) the Stockholders Agreement, which is referenced herein as Exhibit 4, as amended by Exhibit 5; (v) the Chiesi Registration Rights Agreement, which is referenced herein as Exhibit 6; (vi) the Stockholders Registration Rights Agreement, which is referenced herein as Exhibit 7; (vii) the Chiesi Voting Agreement, which is referenced herein as Exhibit 8; (viii) the Stockholders Voting Agreement, which is referenced herein as Exhibit 9; (ix) the December 16, 2010 Stock Purchase Agreement, which is referenced herein as Exhibit 10; (x) the March 16, 2012 Stock Purchase Agreement, which is referenced herein as Exhibit 11; and (xi) the 2012 Credit Agreement, which is referenced herein as Exhibit 12. |