UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): October 31, 2019
AYTU BIOSCIENCE, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-38247
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47-0883144
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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373 Inverness Parkway, Suite 206
Englewood, CO 80112
(Address
of principal executive offices, including Zip Code)
Registrant’s
telephone number, including area code: (720) 437-6580
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
☐
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common
Stock, par value $0.0001 per share
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AYTU
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The
NASDAQ Stock Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
rging
growth company
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Asset Purchase Agreement
On October 10, 2019 Aytu BioScience, Inc. (the
“Company”) and Cerecor Inc.
(“Seller”) entered into an asset purchase agreement
(the “Purchase
Agreement”), pursuant to
which Seller agreed to transfer certain assets and assign certain
liabilities to the Company (the “Acquisition”). On November 1, 2019, the Company and
Seller entered into the first amendment to the Purchase Agreement
(the “Purchase Agreement
Amendment”). The Purchase
Agreement Amendment amends certain definitions of the Purchase
Agreement, modifies certain indemnification obligations and amends
and restates certain schedules and exhibits of the Purchase
Agreement.
The
foregoing description of the Purchase Agreement Amendment is
qualified in its entirety by the full text of the Purchase
Agreement Amendment, a copy of which is filed as Exhibit 10.1 to
this Current Report on Form 8-K and is incorporated herein by
reference.
Registration Rights Agreement
In connection with closing of the Acquisition, the Company and
Seller entered into a Registration Rights Agreement dated
November 1, 2019 providing for the
registration of shares of the Company’s common stock issuable
upon conversion of the Series G Preferred Stock issued to Seller
under the Purchase Agreement. The Registration Rights Agreement
provides that the Company will use its reasonable best efforts to
cause a registration statement to be declared effective under the
Securities Act of 1933, as amended (the “Securities
Act”) as promptly as
possible following the occurrence of certain events defined
therein. Information regarding the Registration Rights Agreement
included in the Prior Form 8-K is hereby incorporated by
reference.
The
foregoing description of the Registration Rights Agreement is
qualified in its entirety by the full text of the Registration
Rights Agreement, a copy of which is filed as Exhibit 10.2 to this
Current Report on Form 8-K and is incorporated herein by
reference.
Voting Agreements
In connection with closing of the Acquisition, the Company and
Seller entered into a Voting Agreement dated November 1, 2019 (the
“Seller Voting
Agreement”). Seller
agrees for a period of twelve months from the date of the Seller
Voting Agreement to vote all shares held by it: (i) in favor of the
proposed transactions set forth in the agreement and plan of merger
dated September 12, 2019 among the Company, Innovus
Pharmaceuticals, Inc., and other parties thereto (the
“Merger
Agreement”); and (ii)
against any proposal, amendment, matter of agreement that would
impede, frustrate, prevent, or nullify the Merger Agreement. The
Seller Voting Agreement shall terminate automatically upon the
approval of the Merger Agreement; provided
that the Seller Voting
Agreement shall automatically terminate if the Company has elected
to terminate the Merger Agreement prior to stockholder
approval.
The
foregoing description of the Seller Voting Agreement is qualified
in its entirety by the full text of the Seller Voting Agreement, a
copy of which is filed as Exhibit 10.3 to this Current Report on
Form 8-K and is incorporated herein by reference.
In connection with closing of the Acquisition, the Company, Seller,
and certain stockholders of the Company listed on Schedule A
thereto (the “Securityholder”)
entered into a Voting Agreement dated November 1, 2019 (the
“Securityholder Voting
Agreement”).
Securityholder agrees for a period of twelve months from the date
of the Securityholder Voting Agreement to vote all shares held by
it: (i) in favor of conversion into common stock of all the
outstanding shares of Series G Preferred Stock (the
“Preferred
Conversion”); (ii)
against any proposal, amendment, matter, or agreement that would
impede, frustrate, prevent, or nullify the Preferred Conversion;
and (iii) in favor of the proposed transactions set forth in the
Merger Agreement. The Securityholder Voting Agreement shall
terminate automatically upon the later of the approval of Preferred
Conversion or the Merger Agreement; provided
that the Securityholder Voting
Agreement shall automatically terminate if the approval of the
Preferred Conversion has occurred and the Company has elected to
terminate the Merger Agreement.
The
foregoing description of the Securityholder Voting Agreement is
qualified in its entirety by the full text of the Securityholder
Voting Agreement, a copy of which is filed as Exhibit 10.4 to this
Current Report on Form 8-K and is incorporated herein by
reference.
In
connection with closing of the Acquisition, certain officers of the
Company have agreed to enter into a Voting Agreement. Each of
Joshua Disbrow, David Green, and Jarrett Disbrow (the
“Officers”)
entered into a Voting Agreement with the Company and Seller dated
November 1, 2019 (the “Officer Voting Agreement”). The
Officers agree for a period of twelve months from the date of the
Officer Voting Agreement to vote all shares held by him: (i) in
favor of the Preferred Conversion; (ii) against any proposal,
amendment, matter, or agreement that would impede, frustrate,
prevent, or nullify the Preferred Conversion; and (iii) in favor of
the proposed transactions set forth in the Merger Agreement. The
Officer Voting Agreement shall terminate automatically upon the
later of the approval of the Preferred Conversion or the Merger
Agreement;provided
that the
Officer Voting Agreement shall automatically terminate if the
approval of the Preferred Conversion has occurred and the Company
has elected to terminate the Merger Agreement.
The
foregoing description of the Officer Voting Agreements is qualified
in its entirety by the full text of the form of Officer Voting
Agreement, a copy of which is filed as Exhibit 10.5 to this Current
Report on Form 8-K and is incorporated herein by
reference.
Consent and Limited Waiver Agreement
Under
the Purchase Agreement, the Company has assumed from Seller a fixed
payment obligation to Deerfield CSF, LLC (“Deerfield”) of approximately
$16.575 million (the “Deerfield Obligation”). The
Deerfield Obligation was previously assigned to Seller pursuant to
an asset purchase agreement between Seller and Avadel U.S.
Holdings, Inc. (“Avadel”) dated February 12, 2018.
In order to assign the Deerfield Obligation to the Company, each of
Deerfield and certain of its affiliates (collectively, the
“Deerfield
Parties”) and Avadel must consent to the assignment of
the Deerfield Obligation to the Company. Accordingly, the Company
has entered into a Consent and Limited Waiver Agreement among the
Deerfield Parties, Avadel, Armistice Capital Master Fund, Ltd.
(“Armistice”),
and Seller, dated October 31, 2019 (the “Waiver”), pursuant to which: (i)
Armistice has agreed to enter into a guarantee of the Deerfield
Obligation (the “Armistice
Guarantee”); (ii) Seller has agreed to enter into a
guarantee of the Deerfield Obligation (the “Seller Guarantee” together with the Armistice
Guarantee, the “Guarantees”); and (iii) Armistice
has agreed to enter into an escrow agreement with the Deerfield
Parties (the “Escrow
Agreement”), pursuant to which Armistice will deposit
$15,262,500 into an escrow account. In consideration for the
Company assuming the Deerfield Obligation, the Guarantees, and the
Escrow Agreement, each of the Deerfield Parties and Avadel have
agreed to execute the Waiver and provide for assignment of the
Deerfield Obligation. Steven Boyd, a member of the Company’s
board of directors, is the founder and chief investment officer of
Armistice.
The
foregoing description of the Waiver, the Armistice Guarantee, the
Seller Guarantee, and the Escrow Agreement is qualified in its
entirety by the full text of: (i) the Waiver, a copy of which is
attached hereto as Exhibit 10.6; (ii) the Armistice Guarantee, a
copy of which is attached as Exhibit A-1 to the Waiver; (iii) the
Seller Guarantee, a copy of which is attached as Exhibit A-2 to the
Waiver; and (iv) the Escrow Agreement, a copy of which is attached
as Exhibit B to the Waiver.
Transition Services Agreement
On
November 1, 2019, the Company entered into that certain Transition
Services Agreement (the “Transition Services
Agreement”), by and between the Company and Seller. Pursuant
to the terms of the Transition Services Agreement, from and after
the closing of the Purchase Agreement, the Company and Seller will
each provide, or will cause their respective affiliates to provide,
to such other party certain services relating to the purchase and
acquisition of certain assets, in each case on a transitional basis
and subject to the fees, terms and conditions set forth
therein.
The
foregoing description of the Transition Services Agreement does not
purport to be complete and is qualified in its entirety by the full
text of the Transition Services Agreement, which is being filed as
Exhibit 10.7 to this Current Report on Form 8-K and is incorporated
herein by reference.
Item 2.01 Completion of Acquisition or Disposition of
Assets.
On
November 1, 2019, the Company and Seller closed the Acquisition
contemplated by the Purchase Agreement. Pursuant to the Purchase
Agreement, Seller transferred certain assets and assigned certain
liabilities to a newly formed subsidiary established by the Buyer
to hold the assets which are the subject of the Purchase Agreement,
Aytu Therapeutics, LLC (“Aytu Therapeutics”).
Information regarding the Acquisition included in Item 1.01 and in
the Company’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 15, 2019 (the
“Prior Form
8-K”) is hereby incorporated by
reference.
Item 2.03 Creating of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The
information regarding the Deerfield Obligation set forth in Item
1.01 is hereby incorporated by reference.
Item 3.02 Unregistered Sales of Equity Securities.
As
consideration for the Acquisition, the Company issued Seller
9,805,845 shares of
the Company’s Series G Convertible Preferred Stock (the
“Series G Preferred
Stock”) at a price of $1.2747 per share pursuant to
section 4(a)(2) of the Securities Agreement. The aggregate value of
the Series G Preferred Stock issued to Seller is $12.5 million. The
per-share value of the Series G Preferred Stock was determined
pursuant to a formula averaging the VWAP of the Company’s
common stock for the 30-day period ending immediately prior to
August 30, 2019 and the 30-day period ending on October 28, 2019. Information regarding the Series G
Preferred Stock included in Item 5.03
and the Prior Form 8-K is hereby incorporated by
reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change
in Fiscal Year.
As
described above, on November 1, 2019, the Company closed
the Acquisition and issued to Seller 9,805,845 shares of Series G
Preferred Stock. The preferences and rights of the Series G
Preferred Stock are set forth in the Certificate of Designation of
Preferences, Rights and Limitations of Series G Convertible
Preferred Stock (the “Certificate of Designation”) filed
with the Delaware Secretary of State on October 31, 2019. A
description of the Series G Preferred Stock is included
below.
Conversion. Each share of Series G
Preferred Stock is initially non-convertible until the
Company’s stockholders approve conversion of the Series G
Preferred Stock and issuance of all shares of common stock issuable
upon conversion of the Series G Preferred Stock (as set forth in
the Purchase Agreement), such approval meeting the requirement of
applicable Nasdaq Stock Market Rules (the “Stockholder Approval”). On the
date of the Stockholder Approval each share of Series G Preferred
Stock shall be convertible, at the option of the holder and solely
in connection with: (i) distribution of the underlying shares of
common stock issuable upon conversion to such holder’s
stockholders; or (ii) the sale of the underlying shares of common
stock issuable upon conversion in open market broker transactions
or private sales to unaffiliated third parties, into that number of
shares of common stock determined by multiplying the number of
shares of Series G Preferred Stock to be converted by each holder
by the Conversion Ratio. Each share of Series G Preferred Stock
shall convert, without payment or additional consideration to
holder, on a one-for-one basis, as subject to adjustment for
stock splits, stock dividends,
distributions, subdivisions and combinations in the
Certificate of Designation (the “Conversion Ratio”). The shares of
common stock issuable upon conversion of the Series G Preferred
Stock are subject to a lock-up through July 1, 2020 per a lock-up
agreement with Seller.
Fundamental Transaction. If, at any
time the Series G Preferred Stock is outstanding, the Company
consummates: (i) a merger or consolidation with or into another
person; (ii) a sale or other disposition of substantially all of
its assets; (iii) any direct or indirect purchase offer, tender
offer, or exchange offer in which holders of 50% or more of the
Company’s common stock dispose of their shares in exchange
for other securities, cash, or property; (iv) a reclassification,
reorganization, or recapitalization of the Company’s common
stock pursuant to which such common stock is converted into or
exchanged for other securities, cash, or property; or (v) a
business combination whereby a third party acquires more than 50%
of the outstanding shares of the Company’s common stock,
then following such event, the holders
of the Series G Preferred Stock
will be entitled to receive upon conversion of such Series G
Preferred Stock the same kind and
amount of securities, cash or property which the holders would have
received had they converted their Series G Preferred Stock immediately prior to such
fundamental transaction.
Liquidation Preference. In the event of
a liquidation, the holders of Series G Preferred Stock will be
entitled to participate on an as-converted-to-common-stock basis
with holders of the common stock in any distribution of assets of
the Company to holders of the common stock.
Voting Rights. With certain exceptions,
as described in the Certificate of Designation, the Series G
Preferred Stock has no voting rights. However, as long as any
shares of Series G Preferred Stock remain outstanding, the
Certificate of Designation provides that the Company shall not,
without an affirmative vote of holders of a majority of the
then-outstanding shares of Series G Preferred Stock: (i) alter or
change adversely the powers, preferences, or rights given to the
Series G Preferred Stock or alter or amend the Certificate of
Designation; (ii) amend the Company’s certificate of
incorporation or other charter documents in any manner that
adversely affects any rights of the holders of Series G Preferred
Stock; (iii) increase the number of authorized shares of Series G
Preferred Stock; or (iv) enter into any agreement with respect to
any of the foregoing.
Dividends. The Certificate of
Designation provides, among other things, that the Company shall
not pay any dividends on shares of the Company’s common stock
(other than dividends in the form of common stock) unless and until
such time as it pays dividends on each share of Series G Preferred
Stock on an as-if-converted-to-common-stock basis. Other than as
set forth in the previous sentence, the Certificate of Designation
provides that no other dividends shall be paid on shares of the
Series G Preferred Stock and that the Company shall pay no
dividends (other than dividends in the form of common stock) on
shares of common stock unless the Company simultaneously complies
with the previous sentence.
Repurchase Restrictions. The
Certificate of Designation does not provide for any restriction on
the repurchase of Series G Preferred Stock by the Company. There is
no sinking fund provision applicable to the Series G Preferred
Stock.
Redemption. The Company is not
obligated to redeem or repurchase any shares of Series G Preferred
Stock. Shares of Series G Preferred Stock are not otherwise
entitled to any redemption right or mandatory sinking fund or
analogous fund provision.
Exchange Listing. The Series G
Preferred Stock is not listed on any securities exchange or other
trading system.
The
foregoing description of the Certificate of Designation and Series
G Preferred Stock is qualified in its entirety by the full text of
the Certificate of Designation, a copy of which is filed as Exhibit
3.1 to this Current Report on Form 8-K and is incorporated herein
by reference.
Item 7.01 Regulation FD Disclosure.
On
November 4, 2019,
the Company issued a press release announcing closing of the
transactions contemplated by the Purchase Agreement described above
in Item 1.01. A copy of the press release is furnished herewith as
Exhibit 99.1 to this Current Report on Form 8-K. The information
contained in the accompanying Exhibit 99.1 is being furnished
pursuant to Item 7.01 of this Current Report on Form 8-K and shall
not be deemed to be “filed” for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”),
or otherwise subject to the liabilities of that section. The
information contained in the press release shall not be
incorporated by reference in any filing under the Securities Act or
the Exchange Act, whether made before or after the date hereof,
except as shall be expressly set forth by specific reference in
such filing.
Item 9.01 Financial Statements and Exhibits.
(a) The financial statements of the business operations received
from Seller in connection with the Acquisition that are required by
this Item 9.01 are not included in this Current Report on Form 8-K.
Such financial statements will be filed no later than 71 calendar
days after the date that this Current Report on Form 8-K is
required to be filed.
(d)
The following exhibit is being filed herewith:
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Exhibit
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Description
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Certificate
of Designation of Preferences, Rights and Limitations of Series G
Convertible Preferred Stock
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First
Amendment to Asset Purchase Agreement, dated November 1, 2019
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Registration
Rights Agreement, dated November 1, 2019
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Form of
Cerecor Voting Agreement, dated November 1, 2019
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Form of
Security Holder Voting Agreement, dated November 1, 2019
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Form of
Officer Voting Agreement, dated November 1, 2019
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Consent
and Limited Waiver Agreement, dated November 1, 2019
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Transition
Services Agreement, dated November 1, 2019
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Press
Release, dated November 4, 2019
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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AYTU
BIOSCIENCE, INC.
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Date:
November 4, 2019
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By:
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/s/ Joshua R. Disbrow
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Joshua
R. Disbrow
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Chief
Executive Officer
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AYTU
BIOSCIENCE, INC.
CERTIFICATE
OF DESIGNATION OF PREFERENCES,
RIGHTS
AND LIMITATIONS
OF
SERIES
G CONVERTIBLE PREFERRED STOCK
PURSUANT TO SECTION
151 OF THE DELAWARE GENERAL CORPORATION LAW
The
undersigned, Joshua R. Disbrow and David A. Green, do hereby
certify that:
1.
They
are the Chairman and Chief Executive Officer, and the Chief
Financial Officer, Secretary, and Treasurer, respectively, of Aytu
BioScience, Inc., a Delaware corporation (the “Corporation”).
2.
The Corporation is authorized to issue 50,000,000 shares of
preferred stock, 410,000 of which have been issued.
3.
The
following resolutions were duly adopted by the board of directors
of the Corporation (the “Board of
Directors”):
WHEREAS, the
certificate of incorporation of the Corporation provides for a
class of its authorized stock known as preferred stock, consisting
of 50,000,000 shares, $0.0001 par value per share, issuable from
time to time in one or more series;
WHEREAS, the Board
of Directors is authorized to fix the dividend rights, dividend
rate, voting rights, conversion rights, rights and terms of
redemption and liquidation preferences of any wholly unissued
series of preferred stock and the number of shares constituting any
series and the designation thereof, of any of them;
and
WHEREAS, it is the
desire of the Board of Directors, pursuant to its authority as
aforesaid, to fix the rights, preferences, restrictions and other
matters relating to a series of the preferred stock, which shall
consist of up to 9,805,845 shares of the preferred stock which the
Corporation has the authority to issue, as follows:
NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issuance of a series of preferred stock for cash or
exchange of other securities, rights or property and does hereby
fix and determine the rights, preferences, restrictions and other
matters relating to such series of preferred stock as
follows:
TERMS
OF PREFERRED STOCK
Section 1. Definitions. For the purposes
hereof, the following terms shall have the following
meanings:
“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 405 of the Securities Act.
“Business Day” means any
day except any Saturday, any Sunday, any day which is a federal
legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.
“Commission” means the
United States Securities and Exchange Commission.
“Common Stock” means the
Corporation’s common stock, par value $0.0001 per share, and
stock of any other class of securities into which such securities
may hereafter be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Corporation or the Subsidiaries which
would entitle the holder thereof to acquire at any time Common
Stock, including, without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise
entitles the holder thereof to receive, Common Stock.
“Conversion Date” shall
have the meaning set forth in Section 6(a).
“Conversion Ratio” shall
have the meaning set forth in Section 6(b).
“Conversion Shares” means,
collectively, the shares of Common Stock issuable upon conversion
of the shares of Preferred Stock in accordance with the terms
hereof.
“Delaware Courts” shall
have the meaning set forth in Section 8(d).
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Fundamental Transaction”
shall have the meaning set forth in Section 7(c).
“GAAP” means United States
generally accepted accounting principles.
“Holder” shall have the
meaning given such term in Section 2.
“Liquidation” shall have
the meaning set forth in Section 5.
“Notice of Conversion”
shall have the meaning set forth in Section 6(a).
“Original Issue Date”
means the date of the first issuance of any shares of the Preferred
Stock regardless of the number of transfers of any particular
shares of Preferred Stock and regardless of the number of
certificates which may be issued to evidence such Preferred
Stock.
“Person” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Preferred Stock” shall
have the meaning set forth in Section 2.
“Purchase Agreement” means
the Asset Purchase Agreement, dated as of the Original Issue Date,
among the Corporation and the original Holder, as amended, modified
or supplemented from time to time in accordance with its
terms.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Share Delivery Date”
shall have the meaning set forth in Section 6(c).
“Shareholder Approval”
means such approval as required by the applicable Nasdaq Stock
Market Rules by the shareholders of the Corporation with respect to
the conversion of all Preferred Stock and the issuance of all of
the shares of Common Stock issuable upon conversion of the
Preferred Stock, as set forth in the Purchase
Agreement.
“Trading Day” means a day
on which the principal Trading Market is open for
business.
“Trading Market” means any
of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE
American, the Nasdaq Capital Market, the Nasdaq Global
Market, the Nasdaq Global Select Market or the New York Stock
Exchange (or any successors to any of the foregoing).
“Transfer Agent” means
Issuer Direct Corporation, the current transfer agent of the
Corporation with a mailing address of 500 Perimeter Park Drive,
Suite D, Morrisville, NC 27560 and a facsimile number of (919)
481-6222, and any successor transfer agent of the
Corporation.
Section 2. Designation, Amount and Par
Value. The series of preferred stock shall be designated as
Series G Convertible Preferred Stock (the “Preferred Stock”) and the
number of shares so designated shall be up to 9,805,845 (which
shall not be subject to increase without the written consent of all
of the holders of the Preferred Stock (each, a “Holder” and collectively,
the “Holders”)). Each share of
Preferred Stock shall have a par value of
$0.0001
per share. The Preferred Stock will initially be issued in
book-entry form. As between the Corporation and a beneficial owner
of Preferred Stock, such beneficial owner of Preferred Stock shall
have all of the rights and remedies of a Holder
hereunder.
Section 3. Dividends. Except for stock
dividends or distributions for which adjustments are to be made
pursuant to Section 7, Holders shall be entitled to receive, and
the Corporation shall pay, dividends on shares of Preferred Stock
equal (on an as-if-converted-to-Common-Stock basis, disregarding
for such purpose any conversion limitations hereunder) to and in
the same form as dividends actually paid on shares of the Common
Stock when, as and if such dividends are paid on shares of the
Common Stock. No other dividends shall be paid on shares of
Preferred Stock. The Corporation shall not pay any dividends on the
Common Stock unless the Corporation simultaneously complies with
this provision.
Section 4. Voting Rights. Except as
otherwise provided herein or as otherwise required by law, the
Preferred Stock shall have no voting rights. However, as long as
any shares of Preferred Stock are outstanding, the Corporation
shall not, without the affirmative vote of the Holders of a
majority of the then outstanding shares of the Preferred Stock, (a)
alter or change adversely the powers, preferences or rights given
to the Preferred Stock (including by the designation,
authorization, or issuance of any shares of preferred stock of the
Corporation that purports to be pari passu with, or senior in
rights or preferences to, the Preferred Stock) or alter or amend
this Certificate of Designation, (b) amend its certificate of
incorporation or other charter documents in any manner that
adversely affects any rights of the Holders, (c) increase the
number of authorized shares of Preferred Stock, or (d) enter into
any agreement with respect to any of the foregoing. Holders of
shares of Common Stock acquired upon the conversion of shares of
Preferred Stock shall be entitled to the same voting rights as each
other holder of Common Stock.
Section 5. Liquidation. Upon any
liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary (a “Liquidation”), the
Holders shall be entitled to receive out of the assets, whether
capital or surplus, of the Corporation the same amount that a
holder of Common Stock would receive if the Preferred Stock were
fully converted to Common Stock, which amounts shall be paid pari
passu with all holders of Common Stock. The Corporation shall mail
written notice of any such Liquidation, not less than 45 days prior
to the payment date stated therein, to each Holder.
Section 6. Conversion.
(a) Conversion
of Preferred Stock. Prior to Shareholder Approval, the
Preferred Stock is non- convertible. As of 5:00 p.m. Eastern time
on the date of the Shareholder Approval, each share of the
Preferred Stock shall be convertible, at the option of the Holder
and solely in connection with either (i) distribution of the
underlying shares of Common Stock issuable upon conversion to
Holder’s shareholders or (ii) sale of the underlying shares
of Common Stock issuable upon conversion in open market broker
transactions or private sales to unaffiliated third parties, into
that number of shares of Common Stock determined by multiplying the
number of shares of Preferred Stock held by each Holder by the
Conversion Ratio. Holders shall effect conversion by providing the
Corporation with the form of conversion notice attached hereto as
Annex A (a
“Notice of
Conversion”). Each Notice of Conversion shall specify
the number of shares of Preferred Stock to be converted, the number
of shares of Preferred Stock owned prior to the conversion at
issue, the number of shares of Preferred Stock owned subsequent to
the conversion at issue and the date on which such conversion is to
be effected, which date may not be prior to the date the applicable
Holder delivers by facsimile or e-mail such Notice of Conversion to
the Corporation (such date, the “Conversion Date”). If
no Conversion Date is
specified in a Notice of Conversion, the Conversion Date shall be
the date that such Notice of Conversion to the Corporation is
deemed delivered hereunder. No ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Conversion form be
required. The calculations and entries set forth in the Notice of
Conversion shall control in the absence of manifest or mathematical
error. To effect conversions of shares of Preferred Stock, a Holder
shall not be required to surrender the certificate(s) representing
the shares of Preferred Stock to the Corporation unless all of the
shares of Preferred Stock represented thereby are so converted, in
which case such Holder shall deliver the certificate representing
such shares of Preferred Stock promptly following the Conversion
Date at issue. Shares of Preferred Stock converted into Common
Stock or redeemed in accordance with the terms hereof shall be
canceled and shall not be reissued. Immediately following any
conversion, the rights of the Holders of any converted Preferred
Stock shall cease and the Persons entitled to receive Common Stock
upon the conversion of Preferred Stock shall be treated for all
purposes as having become the owners of such Common
Stock.
(b) Conversion
Ratio. Each share of Preferred Stock shall convert, without
the payment of additional consideration by the Holder, on a one for
one basis into shares of Common Stock, subject to adjustment herein
(the “Conversion
Ratio”).
(c) Mechanics
of Conversion
i.
Delivery of Conversion Shares Upon
Conversion. Promptly following the Conversion Date, but not
later than the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period
(as defined below) after the Conversion Date (the
“Share Delivery
Date”), the Corporation shall deliver, or cause to be
delivered, to the converting Holder of Preferred Stock (A) the
number of Conversion Shares to be issued upon the conversion of the
Preferred Stock, which Conversion Shares, on or after the earlier
of (i) the six month anniversary of the Original Issue Date or (ii)
the date a registration statement covering the resale of such
shares by the Holder is declared effective by the Commission, shall
be free of restrictive legends and trading restrictions (other than
those which may then be required by the Purchase Agreement), and
(B) a bank check in the amount of accrued and unpaid dividends, if
any. When delivering the Conversion Shares as provided herein, the
Corporation shall use commercially reasonable efforts to deliver
the Conversion Shares required to be delivered by the Corporation
under this Section 6 electronically through the Depository Trust
Company or another established clearing corporation performing
similar functions, unless otherwise agreed to with the Holders. As
used herein, “Standard Settlement Period” means the
standard settlement period, expressed in a number of Trading Days,
on the Corporation’s primary Trading Market with respect to
the Common Stock as in effect on the Conversion Date. As used
herein, “Standard
Settlement Period” means the
standard settlement period, expressed in a number of Trading Days,
on the Corporation’s primary Trading Market with respect to
the Common Stock as in effect on the date of delivery of the Notice
of Conversion.
ii.
Obligation Absolute; Partial
Liquidated Damages. The Corporation’s obligation to
issue and deliver the Conversion Shares upon conversion of
Preferred Stock in accordance with the terms hereof are absolute
and unconditional, irrespective of any action or inaction by a
Holder to enforce the same, any waiver or consent with respect to
any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by such Holder or any other Person of any
obligation to the Corporation or any violation or alleged violation
of law by such Holder or any other person, and irrespective of any
other circumstance which might otherwise limit such obligation of
the Corporation to such Holder in connection with the issuance of
such Conversion Shares;provided, however, that such delivery
shall not operate as a waiver by the Corporation of any such action
that the Corporation may have against such Holder. Nothing herein
shall limit a Holder’s right to pursue actual damages for the
Corporation’s failure to deliver Conversion Shares within the
period specified herein and such Holder shall have the right to
pursue all remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance,
injunctive relief, or both specific performance and injunctive
relief. The exercise of any such rights shall not prohibit a Holder
from seeking to enforce damages pursuant to any other Section
hereof or under applicable law.
iii.
Reservation of Shares Issuable Upon
Conversion. The Corporation covenants that it will at all
times reserve and keep available out of its authorized and unissued
shares of Common Stock for the sole purpose of issuance upon
conversion of the Preferred Stock as herein provided, free from
preemptive rights or any other actual contingent purchase rights of
Persons other than the Holder (and the other holders of the
Preferred Stock), not less than such aggregate number of shares of
the Common Stock as shall be issuable (taking into account the
adjustments and restrictions of Section 7) upon the conversion of
the then outstanding shares of Preferred Stock. The Corporation
covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid
and nonassessable.
iv.
Fractional Shares. No
fractional shares or scrip representing fractional shares shall be
issued upon the conversion of the Preferred Stock. As to any
fraction of a share which the Holder would otherwise be entitled to
purchase upon such conversion, the Corporation shall round up to
the next whole share.
v.
Transfer Taxes and Expenses.
The issuance of Conversion Shares on conversion of this Preferred
Stock shall be made without charge to any Holder for any
documentary stamp or similar taxes that may be payable in respect
of the issue or delivery of such Conversion Shares. The Corporation
shall pay all transfer agent fees required for same-day processing
and all fees to the Depository Trust Company (or another
established clearing corporation performing similar functions)
required for same-day electronic delivery of the Conversion
Shares.
Section 7. Certain
Adjustments.
(a) Stock Dividends and Stock
Splits. If the Corporation, at any time while this Preferred
Stock is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions payable in shares of Common Stock
on shares of Common Stock or any other Common Stock Equivalents
(which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Corporation upon conversion of, or
payment of a dividend on, this Preferred Stock), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of a reverse stock split)
outstanding shares of Common Stock into a smaller number of shares,
or (iv) issues, in the event of a reclassification of shares of the
Common Stock, any shares of capital stock of the Corporation, then
the Conversion Ratio shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding
immediately after such event, and of which the denominator shall be
the number of shares of Common Stock (excluding any treasury shares
of the Corporation) outstanding immediately before such event. Any
adjustment made pursuant to this Section 7(a) shall become
effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in
the case of a subdivision, combination or
re-classification.
(b) Pro Rata Distributions. During
such time as this Preferred Stock is outstanding, if the
Corporation declares or makes any dividend or other distribution of
its assets (or rights to acquire its assets) to holders of shares
of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin
off, reclassification, corporate rearrangement, scheme of
arrangement or other similar transaction) (a “Distribution”), at any
time after the issuance of this Preferred Stock, then, in each such
case, the Holder shall be entitled to participate in such
Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete conversion of this Preferred
Stock immediately before the date of which a record is taken for
such Distribution, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be
determined for the participation in such Distribution.
(c) Fundamental Transaction. If, at
any time while this Preferred Stock is outstanding, (i) the
Corporation, directly or indirectly, in one
or more related transactions effects any merger or consolidation of
the Corporation with or into another Person, (ii) the Corporation,
directly or indirectly, effects any sale, lease, license,
assignment, transfer, conveyance or other disposition of all or
substantially all of its assets in one or a series of related
transactions, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Corporation or another
Person) is completed pursuant to which holders of Common Stock are
permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders
of 50% or more of the outstanding Common Stock, (iv) the
Corporation, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property,
or (v) the Corporation, directly or indirectly, in one or more
related transactions consummates a stock or share purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a
“Fundamental
Transaction”), then each Holder shall automatically
receive, for each Conversion Share that would have been issuable
upon such conversion immediately prior to the occurrence of such
Fundamental Transaction, the same consideration receivable as a
result of such Fundamental Transaction by a holder of the number of
shares of Common Stock for which the Preferred Stock is convertible
immediately prior to such Fundamental Transaction.
(d) Calculations. All calculations
under this Section 7 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of
this Section 7, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding any treasury shares of
the Corporation) issued and outstanding.
(e) Notice to the
Holders.
i. Adjustment
to Conversion Ratio. Whenever the Conversion Ratio is
adjusted pursuant to any provision of this Section 7, the
Corporation shall promptly deliver to each Holder by facsimile or
email a notice setting forth the Conversion Ratio after such
adjustment and setting forth a brief statement of the facts
requiring such adjustment.
ii. Notice
to Allow Conversion by Holder.
If (A) the Corporation shall declare a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the
Corporation shall declare a special nonrecurring cash
dividend on or a redemption of the Common Stock, (C) the
Corporation shall authorize the granting to all holders of the
Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Corporation shall be required
in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Corporation is a party, any
sale or transfer of all or substantially all of the assets of the
Corporation, or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property or (E)
the Corporation shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the
Corporation, then, in each case, the Corporation shall cause to be
filed at each office or agency maintained for the purpose of
conversion of this Preferred Stock, and shall cause to be delivered
by facsimile or email to eachHolder at its last facsimile number or
email address as it shall appear upon the stock books of the
Corporation, at least twenty (20) calendar days prior to the
applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be
determined or the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be
entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share
exchange, provided that the failure to deliver such notice or any
defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such
notice. To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information
regarding the Corporation, the Corporation shall simultaneously
file such notice with the Commission pursuant to a Current Report
on Form 8-K.
Section 8. Miscellaneous.
(a) Notices. Any and all notices or
other communications or deliveries to be provided by the Holders
hereunder shall be in writing and delivered personally, by
facsimile or e-mail, or sent by a nationally recognized overnight
courier service, addressed to the Corporation, at the following
address: 373 Inverness Parkway, Suite 206, Englewood, Colorado
80112, Attention: Controller, facsimile number (720) 437-6527,
e-mail address btowne@aytubio.com, or such other facsimile number,
e-mail address or address as the Corporation may specify for such
purposes by notice to the Holders delivered in accordance with this
Section 8. Any and all notices or other communications or
deliveries to be provided by the Corporation hereunder shall be in
writing and delivered personally, by facsimile, e-mail, or sent by
a nationally recognized overnight courier service addressed to each
Holder at the facsimile number, e-mail address or address of such
Holder appearing on the books of the Corporation and the Transfer
Agent. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date
of transmission, if such notice or communication is delivered via
facsimile at the facsimile number or e-mail at the e-mail address
set forth in this Section 8 prior to 5:30 p.m. (New York City time)
on any date, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number or e-mail at the e-mail address
set forth in this Section on a day that is not a Trading Day or
later than 5:30 p.m. (New York City time) on any Trading Day, (iii)
the second Trading Day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be
given.
(b) Absolute Obligation. Except as
expressly provided herein, no provision of this Certificate of
Designation shall alter or impair the obligation of the
Corporation, which is absolute and unconditional, to pay liquidated
damages, and accrued dividends, as applicable, on the shares of
Preferred Stock at the time, place, and rate, and in the coin or
currency, herein prescribed.
(c) Lost or Mutilated Preferred Stock
Certificate. If a Holder’s Preferred Stock certificate
shall be mutilated, lost, stolen or destroyed, the Corporation
shall execute and deliver, in exchange and substitution for and
upon cancellation of a mutilated certificate, or in lieu of or in
substitution for a lost, stolen or destroyed certificate, a new
certificate for the shares of Preferred Stock so mutilated, lost,
stolen or destroyed, but only upon receipt of evidence of such
loss, theft or destruction of such certificate, and of the
ownership thereof reasonably satisfactory to the
Corporation.
(d) Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Certificate of Designation shall be governed
by and construed and enforced in accordance with the internal laws
of the State of Delaware without regard to the principles of
conflict of laws thereof. All legal proceedings concerning the
interpretation, enforcement and defense of the transactions
contemplated by this Certificate of Designation (whether brought
against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in
the Court of Chancery of the State of Delaware or, to the extent
such court does not have subject matter jurisdiction, the United
States District Court for the District of Delaware or, to the
extent that neither of the foregoing courts has jurisdiction, the
Superior Court of the State of Delaware in Wilmington, Delaware
(the “Delaware
Courts”). The Corporation and each Holder hereby
irrevocably submits to the exclusive jurisdiction of the Delaware
Courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such Delaware Courts, or
such Delaware Courts are improper or inconvenient venue for such
proceeding. The Corporation and each Holder hereby irrevocably
waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect
for notices to it under this Certificate of Designation and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any
other manner permitted by
applicable law. The Corporation and each Holder hereto hereby
irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Certificate of Designation or
the transactions contemplated hereby. If the Corporation or any
Holder shall commence an action or proceeding to enforce any
provisions of this Certificate of Designation, then the prevailing
party in such action or proceeding shall be reimbursed by the other
party for its attorneys’ fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such
action or proceeding.
(e) Waiver. Any waiver by the
Corporation or a Holder of a breach of any provision of this
Certificate of Designation shall not operate as or be construed to
be a waiver of any other breach of such provision or of any breach
of any other provision of this Certificate of Designation or a
waiver by any other Holders. The failure of the Corporation or a
Holder to insist upon strict adherence to any term of this
Certificate of Designation on one or more occasions shall not be
considered a waiver or deprive that party (or any other Holder) of
the right thereafter to insist upon strict adherence to that term
or any other term of this Certificate of Designation on any other
occasion. Any waiver by the Corporation or a Holder must be in
writing.
(f) Severability. If any provision
of this Certificate of Designation is invalid, illegal or
unenforceable, the balance of this Certificate of Designation shall
remain in effect, and if any provision is inapplicable to any
Person or circumstance, it shall nevertheless remain applicable to
all other Persons and circumstances. If it shall be found that any
interest or other amount deemed interest due hereunder violates the
applicable law governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum rate
of interest permitted under applicable law.
(g) Next Business Day. Whenever any
payment or other obligation hereunder shall be due on a day other
than a Business Day, such payment shall be made on the next
succeeding Business Day.
(h) Headings. The headings
contained herein are for convenience only, do not constitute a part
of this Certificate of Designation and shall not be deemed to limit
or affect any of the provisions hereof.
(i) Status of Converted or Redeemed
Preferred Stock. If any shares of Preferred Stock shall be
converted, redeemed or reacquired by the Corporation, such shares
shall resume the status of authorized but unissued shares of
preferred stock and shall no longer be designated as Series G
Convertible Preferred Stock.
*********************
RESOLVED, FURTHER,
that the Chairman, the president or any vice-president, and the
secretary or any assistant secretary, of the Corporation be and
they hereby are authorized and directed to prepare and file this
Certificate of Designation of Preferences, Rights and Limitations
in accordance with the foregoing resolution and the provisions of
Delaware law.
[Remainder of Page Intentionally Left
Blank]
IN
WITNESS WHEREOF, the undersigned have executed this Certificate
this 30th day of October, 2019.
|
/s/ Joshua R. Disbrow
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/s/ David A. Green
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Name:
Joshua R. Disbrow
|
|
Name:
David A. Green
|
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Title:
Chairman and Chief Executive Officer
|
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Title:
Chief Financial Officer, Secretary, and Treasurer
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ANNEX
A
NOTICE
OF CONVERSION
(TO BE
EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF
PREFERRED STOCK)
The
undersigned hereby elects to convert the number of shares of Series
G Convertible Preferred Stock indicated below into shares of common
stock, par value $0.0001 per share (the “Common Stock”), of Aytu
BioScience, Inc., a Delaware corporation (the “Corporation”), according
to the conditions hereof, as of the date written below. If shares
of Common Stock are to be issued in the name of a Person other than
the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto. No fee will be charged to the Holders
for any conversion, except for any such transfer
taxes.
Conversion
calculations:
|
Date to
Effect Conversion:
|
|
Number
of shares of Preferred Stock owned prior to Conversion:
|
|
Number
of shares of Preferred Stock to be Converted:
|
|
Stated
Value of shares of Preferred Stock to be Converted:
|
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Number
of shares of Common Stock to be Issued:
|
|
Applicable
Conversion Price:
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Number
of shares of Preferred Stock subsequent to Conversion:
|
|
Address
for Delivery:
|
|
or
|
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DWAC
Instructions:
|
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Broker
no:
|
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Account
no:
|
|
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[HOLDER]
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|
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By:
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|
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Name:
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|
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Title:
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Exhibit 10.1
FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
This First Amendment to Asset Purchase Agreement
(this “First Amendment”) is entered into by and
between Aytu Bioscience, Inc., a Delaware corporation
(“Buyer”), and Cerecor
Inc., a Delaware corporation (“Seller”), as of November
1, 2019.
WHEREAS, Buyer and Seller are parties to
that certain Asset Purchase Agreement
dated October 10, 2019 (the “Original
Agreement”);
and
WHEREAS, pursuant to Section 7.10 thereof, Buyer and
Seller wish to amend the Original Agreement on the terms and
conditions set forth in this First Amendment.
NOW,
THEREFORE, in consideration of
the foregoing and the mutual promises set forth herein and in the
Original Agreement, the parties agree as
follows:
1. Capitalized
Terms. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed
to them in the Original
Agreement.
2. Amendment of Section 1.1. The
definition of “Aytu Preferred Stock” in Section 1.1 of
the Original Agreement is hereby deleted in its entirety and
replaced with the following:
“Aytu Preferred Stock”
means a series of convertible preferred stock of Buyer having the
terms and conditions set forth in the form of Preferred Stock
Designation in Exhibit 1.1 hereto, which shall be
non-transferable for a period beginning on the date of issuance and
ending on the earlier of (i) July 1, 2020 or (ii) the date such
preferred stock is converted into shares of AYTU Common
Stock.”
3. Amendment of Section 1.1. The
definition of “Deerfield Obligation” in Section 1.1 of
the Original Agreement is hereby deleted in its entirety and
replaced with the following:
“Deerfield Obligation”
means (i) the remaining Fixed Payments (as defined in the Deerfield
Agreement and amended by the Deerfield Waiver) beginning on October
31, 2019, totaling $16,575,000, and detailed on Appendix A of the
Deerfield Waiver, and (ii) the Deferred Consideration (as
defined in the Deerfield Agreement and amended by the Deerfield
Waiver).”
Additionally, any
references to the Deerfield Obligation in the Schedules are also
hereby amended to reflect such obligations as stated in Appendix A
to the Deerfield Waiver.
4. Amendment of Section 6.3(f).
Section 6.3(f) of the Original Agreement is hereby deleted in its
entirety and replaced with the following:
“The
aggregate amount required to be paid by Seller under Sections 6.1(a)-(b) or by Buyer
under Sections 6.2
(a)-(b) shall not exceed the Cash
Consideration.”
5. Amendment of Schedule
2.2(a)(ii). Schedule 2.2(a)(ii) attached to the Original
Agreement is hereby deleted in its entirety and replaced with
Schedule 2.2(a)(ii) attached hereto as Exhibit A.
6. Amendment to Schedule
2.2(a)(iii). Schedule 2.2(a)(iii) attached to the Original
Agreement is modified such that the information under the heading
“Domain Name
Registrations” is hereby deleted in its entirety and
replaced with the information attached hereto as Exhibit B.
7. Amendment to Supply Agreement
Reference. All references to the “Supply and
Distribution Agreement between Tris Pharmaceuticals, Inc. and FSC
Laboratories, Inc., dated August 9, 2013, as amended August 13,
2014 and February 24, 2016 (related to Karbinal ER)” included
in the Original Agreement and Schedules are hereby deleted in their
entirety and replaced with the “Supply and Distribution
Agreement between Tris Pharmaceuticals, Inc. and FSC Laboratories,
Inc., dated August 9, 2013, as amended August 13, 2014, February
24, 2016 and October 29, 2019 (related to Karbinal
ER)”.
8. Amendment of Exhibit 1.1. The
Form of Preferred Stock Designation attached as Exhibit 1.1 of the
Original Agreement is hereby deleted in its entirety and replaced
with the Form of Preferred Stock Designation attached hereto as
Exhibit
C.
9. Full Force and Effect. Except
as modified and amended by this First Amendment, the terms and
conditions of the Original Agreement remain in full force and
effect.
10.
Conflict. In the event of
conflict between the provisions of the Original Agreement and this
First Amendment, the provisions of this First Amendment shall
control.
11. Counterparts; Electronic
Signatures. This First Amendment may be executed in one or
more counterparts (including by transmission-mail), all of which
shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
[signature page follows]
IN
WITNESS WHEREOF, the parties have caused this First Amendment to be
duly executed as of the date first set forth above.
BUYER:
AYTU
BIOSCIENCE, INC.
By:
/s/ Joshua R.
Disbrow
Name:
Joshua R.
Disbrow
Title
___________________________
SELLER:
CERECOR
INC.
By:
_____________________________
Name:
__________________________
Title:
___________________________
REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of November 1, 2019, between Aytu BioScience, Inc.,
a Delaware corporation (the “Company”), and Cerecor,
Inc. (“Cerecor”).
November
This
Agreement is made pursuant to the Asset Purchase Agreement, dated
as of the date hereof, between the Company and Cerecor (the
“Purchase
Agreement”).
The
Company and Cerecor hereby agrees as follows:
1.
Definitions.
Capitalized
terms used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:
“Commission” means the
United States Securities and Exchange Commission.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“Effectiveness Date”
means, with respect to the Registration Statement required to be
filed hereunder, the 120th calendar day
following the date that is the later of (i) the effectiveness date
of the registration statement related to the Pipe Transaction and
(ii) the effectiveness date of the registration statement related
to the Innovus Transaction (or, in the event of a “full
review” by the Commission, the 150th calendar day
following the date hereof).
“Effectiveness Period”
shall have the meaning set forth in Section 2(a).
“Event” shall have the
meaning set forth in Section 2(d).
“Event Date” shall have
the meaning set forth in Section 2(d).
“Filing Date” means, with
respect to the Registration Statement required hereunder, the
45th
calendar day following the date of the later of (i) the
effectiveness date of the registration statement related to the
Pipe Transaction and (ii) the effectiveness date of the
registration statement related to the Innovus
Transaction.
“Holder” or
“Holders” means the holder
or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified Party” shall
have the meaning set forth in Section 5(c).
“Indemnifying Party” shall
have the meaning set forth in Section 5(c).
“Innovus Transaction”
means the Company’s potential acquisition of Innovus, Inc.
pursuant to that Agreement and Plan of Merger, dated September 12,
2019.
“Losses” shall have the
meaning set forth in Section 5(a).
“Pipe Tranaction” means
the brokered private placement transaction of the Company’s
securities pursuant to that Placement Agency Agreement, dated
October 11, 2019, by and between the Company and Ladenburg Thalmann
& Co. Inc.
“Prospectus” means the
prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated by
the Commission pursuant to the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable Securities
covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments,
and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable Securities”
means, as of any date of determination all shares of Common Stock
issued upon conversion in full of the Preferred Stock, including if
distributed on a pro rata basis to stockholders of Cerecor;
provided,
however, that any
such Registrable Securities shall cease to be Registrable
Securities (and the Company shall not be required to maintain the
effectiveness of any, or file another, Registration Statement
hereunder with respect thereto) for so long as (a) a Registration
Statement with respect to the sale of such Registrable Securities
is declared effective by the Commission under the Securities Act
and such Registrable Securities have been disposed of by the Holder
in accordance with such effective Registration Statement, (b) such
Registrable Securities have been previously sold in accordance with
Rule 144, or (c) with respect to Registrable Securities held by a
particular Holder, such Registrable Securities are or become
eligible for resale pursuant to Rule 144 and all the Registrable
Securities held by such Holder can be sold within a three-month
period notwithstanding volume and manner-of-sale restrictions under
Rule 144 and without the requirement for the Company to be in
compliance with the current public information requirement under
Rule 144.
“Registration Statement”
means any registration statement required to be filed hereunder
pursuant to Section 2(a), including (in each case) the Prospectus,
amendments and supplements to any such registration statement or
Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in any such registration
statement.
“Rule
415” means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended or
interpreted from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Rule 424” means Rule 424
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“Securities Act” means the
United States Securities Act of 1933, as amended.
“Selling Stockholder
Questionnaire” shall have the meaning set forth in
Section 3(a).
“SEC Guidance” means (i)
any publicly-available written or oral guidance of the Commission
staff, or any comments, requirements or requests of the Commission
staff and (ii) the Securities Act.
2.
Shelf
Registration.
(a) On or prior to the
Filing Date, the Company shall prepare and file with the Commission
a Registration Statement covering the resale of all of the
Registrable Securities that are not then registered on an effective
Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement filed
hereunder shall be on Form S-3 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form
S-3, in which case such registration shall be on another
appropriate form). Subject to the terms of this Agreement, the
Company shall use its reasonable best efforts to cause a
Registration Statement filed under this Agreement to be declared
effective under the Securities Act as promptly as possible after
the filing thereof, but in any event no later than the applicable
Effectiveness Date, and shall use its reasonable best efforts to
keep such Registration Statement continuously effective under the
Securities Act until the date that all Registrable Securities
covered by such Registration Statement (i) have been sold,
thereunder or pursuant to Rule 144, or (ii) may be sold without
volume or manner-of-sale restrictions pursuant to Rule 144 and
without the requirement for the Company to be in compliance with
the current public information requirement under Rule 144, as
determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent (the “Effectiveness Period”).
The Company shall telephonically request effectiveness of a
Registration Statement as of 5:00 p.m. (New York City time) on a
Trading Day. The Company shall immediately notify the Holders via
facsimile or by e-mail of the effectiveness of a Registration
Statement on the same Trading Day that the Company telephonically
confirms effectiveness with the Commission, which shall be the date
requested for effectiveness of such Registration Statement. The
Company shall, by 9:30 a.m. (New York City time) on the Trading Day
after the effective date of such Registration Statement, file a
final Prospectus with the Commission as required by Rule
424.
(b) Notwithstanding
the registration obligations set forth in Section 2(a), if the
Commission informs the Company that all of the Registrable
Securities cannot, as a result of the application of Rule 415, be
registered for resale as a secondary offering on a single
registration statement, the Company agrees to promptly inform each
of the Holders thereof and use its commercially reasonable efforts
to file amendments to the Registration Statement as required by the
Commission, covering the maximum number of Registrable Securities
permitted to be registered by the Commission, on Form S-3 or such
other form available to register for resale the Registrable
Securities as a secondary offering; provided, however, that prior to filing
such amendment, the Company shall be obligated to use diligent
efforts to advocate with the Commission for the registration of all
of the Registrable Securities in accordance with the SEC Guidance,
including without limitation, Compliance and Disclosure
Interpretation 612.09.
(c) If Form S-3 is not
available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the resale of
the Registrable Securities on another appropriate form and (ii)
undertake to register the Registrable Securities on Form S-3 as
soon as such form is available, provided that the Company shall
maintain the effectiveness of the Registration Statement then in
effect until such time as a Registration Statement on Form S-3
covering the Registrable Securities has been declared effective by
the Commission.
3.
Registration
Procedures.
In
connection with the Company’s registration obligations
hereunder, the Company shall:
(a) Not less than five
(5) Trading Days prior to the filing of the Registration Statement
and not less than one (1) Trading Day prior to the filing of any
related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated or deemed to be
incorporated therein by reference), the Company shall (i) furnish
to each Holder copies of all such documents proposed to be filed,
which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such
Holders, and (ii) cause its officers and directors, counsel and
independent registered public accountants to respond to such
inquiries as shall be necessary, in the reasonable opinion of
respective counsel to each Holder, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company
shall not file a Registration Statement or any such Prospectus or
any amendments or supplements thereto to which the Holders of a
majority of the Registrable Securities shall reasonably object in
good faith, provided that, the Company is notified of such
objection in writing no later than five (5) Trading Days after the
Holders have been so furnished copies of a Registration Statement
or one (1) Trading Day after the Holders have been so furnished
copies of any related Prospectus or amendments or supplements
thereto. Each Holder agrees to furnish to the Company a completed
questionnaire in the form attached to this Agreement as
Annex A (a
“Selling Stockholder
Questionnaire”) on a date that is not less than two
(2) Trading Days prior to the Filing Date or by the end of the
fourth (4th) Trading Day
following the date on which such Holder receives draft materials in
accordance with this Section.
(b) (i) Prepare and
file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep a Registration
Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with
the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable
Securities, (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and, as so supplemented or amended, to be
filed pursuant to Rule 424, (iii) respond as promptly as reasonably
possible to any comments received from the Commission with respect
to a Registration Statement or any amendment thereto, and (iv)
comply in all material respects with the applicable provisions of
the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration
Statement during the applicable period in accordance (subject to
the terms of this Agreement) with the intended methods of
disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the Holders
of Registrable Securities to be sold (which notice shall, pursuant
to clauses (iii) through (vi) hereof, be accompanied by an
instruction to suspend the use of the Prospectus until the
requisite changes have been made) as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than one (1)
Trading Day prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one (1)
Trading Day following the day (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment to a Registration
Statement is proposed to be filed, (B) when the Commission notifies
the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in
writing on such Registration Statement, and (C) with respect to a
Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the Commission or
any other federal or state governmental authority for amendments or
supplements to a Registration Statement or Prospectus or for
additional information, (iii) of the issuance by the Commission or
any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement covering
any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose, (iv) of the receipt by the Company of
any notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose, (v)
of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a
Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to a Registration
Statement, Prospectus or other documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (vi) of the occurrence or
existence of any pending corporate development with respect to the
Company that the Company believes may be material and that, in the
determination of the Company, makes it not in the best interest of
the Company to allow continued availability of a Registration
Statement or Prospectus.
(d) Furnish to each
Holder, without charge, at least one conformed copy of the
Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested
by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such
documents with the Commission, provided that any such item which is
available on the EDGAR system (or successor thereto) need not be
furnished in physical form.
(e) Subject to the
terms of this Agreement, the Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of
the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment
or supplement thereto, except after the giving of any notice
pursuant to Section 3(c).
(f) Prior to any
resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or
qualification (or exemption from the Registration or qualification)
of such Registrable Securities for the resale by the Holder under
the securities or Blue Sky laws of such jurisdictions within the
United States as any Holder reasonably requests in writing, to keep
each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all
other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by the
Registration Statement, provided that the Company shall not be
required to qualify generally to do business in any jurisdiction
where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so
subject or file a general consent to service of process in any such
jurisdiction.
(g) If requested by a
Holder, cooperate with such Holder to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the
extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holder may
request.
(h) Upon the occurrence
of any event contemplated by Section 3(c), as promptly as
reasonably possible under the circumstances taking into account the
Company’s good faith assessment of any adverse consequences
to the Company and its stockholders of the premature disclosure of
such event, prepare a supplement or amendment, including a
post-effective amendment, to a Registration Statement or a
supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, neither a
Registration Statement nor such Prospectus will contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. If the Company
notifies the Holders in accordance with clauses (iii) through (vi)
of Section 3(c) above to suspend the use of any Prospectus until
the requisite changes to such Prospectus have been made, then the
Holders shall suspend use of such Prospectus. The Company will use
its reasonable best efforts to ensure that the use of the
Prospectus may be resumed as promptly as is
practicable.
(i) Otherwise use
commercially reasonable efforts to comply with all applicable rules
and regulations of the Commission under the Securities Act and the
Exchange Act, including, without limitation, Rule 172 under the
Securities Act, file any final Prospectus, including any supplement
or amendment thereof, with the Commission pursuant to Rule 424
under the Securities Act, promptly inform the Holders in writing
if, at any time during the Effectiveness Period, the Company does
not satisfy the conditions specified in Rule 172 and, as a result
thereof, the Holders are required to deliver a Prospectus in
connection with any disposition of Registrable Securities and take
such other actions as may be reasonably necessary to facilitate the
registration of the Registrable Securities hereunder.
(j) The Company shall
use its reasonable best efforts to maintain eligibility for use of
Form S-3 (or any successor form thereto) for the registration of
the resale of Registrable Securities.
(k) The Company may
require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially
owned by such Holder and, if required by the Commission, the
natural persons thereof that have voting and dispositive control
over the shares. During any periods that the Company is unable to
meet its obligations hereunder with respect to the registration of
the Registrable Securities solely because any Holder fails to
furnish such information within three Trading Days of the
Company’s request, any liquidated damages that are accruing
at such time as to such Holder only shall be tolled and any Event
that may otherwise occur solely because of such delay shall be
suspended as to such Holder only, until such information is
delivered to the Company.
4.
Registration
Expenses. All fees and expenses incident to the performance
of or compliance with, this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold
pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses of the Company’s
counsel and independent registered public accountants) (A) with
respect to filings made with the Commission, (B) with respect to
filings required to be made with any Trading Market on which the
Common Stock is then listed for trading, and (C) in compliance with
applicable state securities or Blue Sky laws reasonably agreed to
by the Company in writing (including, without limitation, fees and
disbursements of counsel for the Company in connection with Blue
Sky qualifications or exemptions of the Registrable Securities),
(ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) the reasonable fees and disbursements
of a single counsel for all of the holders of Registrable
Securities in connection with the registration, (v) Securities Act
liability insurance, if the Company so desires such insurance, and
(vi) fees and expenses of all other Persons retained by the Company
in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be
responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder. In no
event shall the Company be responsible for any broker or similar
commissions of any Holder or, except to the extent provided for in
the Transaction Documents, any legal fees or other costs of the
Holders.
5.
Indemnification.
(a) Indemnification by the Company.
The Company shall, notwithstanding any termination of this
Agreement, indemnify and hold harmless each Holder, the officers,
directors, members, partners, agents, brokers, investment advisors
and employees (and any other Persons with a functionally equivalent
role of a Person holding such titles, notwithstanding a lack of
such title or any other title) of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers,
directors, members, stockholders, partners, agents and employees
(and any other Persons with a functionally equivalent role of a
Person holding such titles, notwithstanding a lack of such title or
any other title) of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without
limitation, reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred,
arising out of or relating to (1) any untrue or alleged untrue
statement of a material fact contained in a Registration Statement,
any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or supplement
thereto, in light of the circumstances under which they were made)
not misleading or (2) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any state
securities law, or any rule or regulation thereunder, in connection
with the performance of its obligations under this Agreement,
except to the extent, but only to the extent, that (i) such untrue
statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in a
Registration Statement, such Prospectus or in any amendment or
supplement thereto or (ii) in the case of an occurrence of an event
of the type specified in Section 3(c)(iii)-(vi), the use by such
Holder of an outdated, defective or otherwise unavailable
Prospectus after the Company has notified such Holder in writing
that the Prospectus is outdated, defective or otherwise unavailable
for use by such Holder. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by
this Agreement of which the Company is aware.
(b) Indemnification by Holders.
Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable
law, from and against all Losses, as incurred, to the extent
arising out of or based solely upon: any untrue or alleged untrue
statement of a material fact contained in any Registration
Statement, any Prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or supplement thereto, in
light of the circumstances under which they were made) not
misleading (i) to the extent, but only to the extent, that such
untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company expressly for
inclusion in such Registration Statement or such Prospectus or (ii)
to the extent, but only to the extent, that such information
relates to such Holder’s information provided in the Selling
Stockholder Questionnaire or the proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in
writing by such Holder expressly for use in a Registration
Statement, such Prospectus or in any amendment or supplement
thereto. In no event shall the liability of a selling Holder be
greater in amount than the dollar amount of the proceeds (net of
all expenses paid by such Holder in connection with any claim
relating to this Section 5 and the amount of any damages such
Holder has otherwise been required to pay by reason of such untrue
statement or omission) received by such Holder upon the sale of the
Registrable Securities included in the Registration Statement
giving rise to such indemnification obligation.
(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an
“Indemnified
Party”), such Indemnified Party shall promptly notify
the Person from whom indemnity is sought (the “Indemnifying Party”) in
writing, and the Indemnifying Party shall have the right to assume
the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof, provided
that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have materially and
adversely prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party or Parties unless: (1) the Indemnifying
Party has agreed in writing to pay such fees and expenses, (2) the
Indemnifying Party shall have failed promptly to assume the defense
of such Proceeding and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Proceeding, or (3) the named
parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and
counsel to the Indemnified Party shall reasonably believe that a
material conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party
notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense
thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld or
delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a
party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.
Subject
to the terms of this Agreement, all reasonable fees and expenses of
the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing
to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred,
within ten Trading Days of written notice thereof to the
Indemnifying Party, provided that the Indemnified Party shall
promptly reimburse the Indemnifying Party for that portion of such
fees and expenses applicable to such actions for which such
Indemnified Party is finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or
further review) not to be entitled to indemnification
hereunder.
(d) Contribution. If the
indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party,
in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party and Indemnified Party in connection with
the actions, statements or omissions that resulted in such Losses
as well as any other relevant equitable considerations. The
relative fault of such Indemnifying Party and Indemnified Party
shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any
Losses shall be deemed to include, subject to the limitations set
forth in this Agreement, any reasonable attorneys’ or other
fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for
such fees or expenses if the indemnification provided for in this
Section was available to such party in accordance with its
terms.
The
parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the
immediately preceding paragraph. In no event shall the contribution
obligation of a Holder of Registrable Securities be greater in
amount than the dollar amount of the proceeds (net of all expenses
paid by such Holder in connection with any claim relating to this
Section 5 and the amount of any damages such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission) received by it upon the
sale of the Registrable Securities giving rise to such contribution
obligation.
The
indemnity and contribution agreements contained in this Section are
in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
6.
Miscellaneous.
(a) Amendments and Waivers. The
provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers
or consents to departures from the provisions hereof may not be
given, unless the same shall be in writing and signed by the
Company and the Holders of 50.1% or more of the then outstanding
Registrable Securities (for purposes of clarification, this
includes any Registrable Securities issuable upon exercise or
conversion of any Security), provided that, if any amendment,
modification or waiver disproportionately and adversely impacts a
Holder (or group of Holders), the consent of such
disproportionately impacted Holder (or group of Holders) shall be
required. If a Registration Statement does not register all of the
Registrable Securities pursuant to a waiver or amendment done in
compliance with the previous sentence, then the number of
Registrable Securities to be registered for each Holder shall be
reduced pro rata among all Holders and each Holder shall have the
right to designate which of its Registrable Securities shall be
omitted from such Registration Statement. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof
with respect to a matter that relates exclusively to the rights of
a Holder or some Holders and that does not directly or indirectly
affect the rights of other Holders may be given only by such Holder
or Holders of all of the Registrable Securities to which such
waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the first sentence of this
Section 6(f). No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any
provision of this Agreement unless the same consideration also is
offered to all of the parties to this Agreement.
(b) Notices. Any and all notices or
other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in the Purchase
Agreement.
(c) Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties and shall
inure to the benefit of each Holder.
(d) Execution and Counterparts.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or
“.pdf” signature page were an original
thereof.
(e) Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be determined in accordance
with the provisions of the Purchase Agreement.
(f) Cumulative Remedies. The
remedies provided herein are cumulative and not exclusive of any
other remedies provided by law.
(g) Severability. If any term,
provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(h) Headings. The headings in this
Agreement are for convenience only, do not constitute a part of the
Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
********************
(Signature Pages Follow)
IN
WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
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AYTU BIOSCIENCE, INC.
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By:
/s/ Joshua R.
Disbrow
Name:
Joshua R. Disbrow
Title:
Chief Executive Officer
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CERECOR, INC.
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By:
/s/ Joseph
Miller
Name:
Joseph Miller
Title:
Chief Financial Officer
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[SIGNATURE
PAGE OF HOLDERS TO AYTU RRA]
Name of
Holder: __________________________
Signature of Authorized Signatory of
Holder: __________________________
Name of
Authorized Signatory: _________________________
Title
of Authorized Signatory: __________________________
[SIGNATURE PAGES
CONTINUE]
Annex
A
AYTU BIOSCIENCE, INC.
Selling Stockholder Notice and Questionnaire
The
undersigned beneficial owner of common stock (the
“Registrable
Securities”) of Aytu BioScience, Inc., a Delaware
corporation (the “Company”), understands
that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”) a
registration statement (the “Registration Statement”)
for the registration and resale under Rule 415 of the Securities
Act of 1933, as amended (the “Securities Act”), of the
Registrable Securities, in accordance with the terms of the
Registration Rights Agreement (the “Registration Rights
Agreement”) to which this document is annexed. A copy
of the Registration Rights Agreement is available from the Company
upon request at the address set forth below. All capitalized terms
not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.
Certain
legal consequences arise from being named as a selling stockholder
in the Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable
Securities are advised to consult their own securities law counsel
regarding the consequences of being named or not being named as a
selling stockholder in the Registration Statement and the related
prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling Stockholder”) of
Registrable Securities hereby elects to include the Registrable
Securities owned by it in the Registration Statement.
The
undersigned hereby provides the following information to the
Company and represents and warrants that such information is
accurate:
QUESTIONNAIRE
1. Name.
(a)
Full Legal Name of
Selling Stockholder
(b)
Full Legal Name of
Registered Holder (if not the same as (a) above) through which
Registrable Securities are held:
(c)
Full Legal Name of
Natural Control Person (which means a natural person who directly
or indirectly alone or with others has power to vote or dispose of
the securities covered by this Questionnaire):
2.
Address for Notices to Selling Stockholder:
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Telephone:
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Fax:
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Contact
Person:
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3.
Broker-Dealer Status:
(a)
Are you a
broker-dealer?
Yes
☐
No ☐
(b)
If
“yes” to Section 3(a), did you receive your Registrable
Securities as compensation for investment banking services to the
Company?
Yes
☐
No ☐
Note:
If “no”
to Section 3(b), the Commission’s staff has indicated that
you should be identified as an underwriter in the Registration
Statement.
(c)
Are you an
affiliate of a broker-dealer?
Yes
☐
No ☐
(d)
If you are an
affiliate of a broker-dealer, do you certify that you purchased the
Registrable Securities in the ordinary course of business, and at
the time of the purchase of the Registrable Securities to be
resold, you had no agreements or understandings, directly or
indirectly, with any person to distribute the Registrable
Securities?
Yes
☐
No ☐
Note:
If “no”
to Section 3(d), the Commission’s staff has indicated that
you should be identified as an underwriter in the Registration
Statement.
4.
Beneficial Ownership of Securities of the Company Owned by the
Selling Stockholder.
Except as set forth below in this Item 4, the undersigned is not
the beneficial or registered owner of any securities of the Company
other than the securities issuable pursuant to the Purchase
Agreement.
(a)
Type and Amount of
other securities beneficially owned by the Selling
Stockholder:
5.
Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners
of 5% of more of the equity securities of the undersigned) has held
any position or office or has had any other material relationship
with the Company (or its predecessors or affiliates) during the
past three years.
State any
exceptions here:
The
undersigned agrees to promptly notify the Company of any material
inaccuracies or changes in the information provided herein that may
occur subsequent to the date hereof at any time while the
Registration Statement remains effective; provided, that the
undersigned shall not be required to notify the Company of any
changes to the number of securities held or owned by the
undersigned or its affiliates.
By
signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to Items 1 through 5
and the inclusion of such information in the Registration Statement
and the related prospectus and any
amendments or supplements thereto. The undersigned
understands that such information will be relied upon by the
Company in connection with the preparation or amendment of the
Registration Statement and the related prospectus and any
amendments or supplements thereto.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.
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Date:___________________________
______________________________
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Beneficial
Owner:
By:
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PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND
EXECUTED NOTICE AND QUESTIONNAIRE TO:
VOTING AGREEMENT
THIS
VOTING AGREEMENT (this “Agreement”) is made and entered
into as of November 1,
2019, by and between Cerecor, Inc., a Delaware corporation
(“Cerecor”) and
Aytu Bioscience Inc., a Delaware corporation (the
“Company”).
Capitalized terms used but not defined herein are used as they are
defined in the Purchase Agreement (as defined below).
RECITALS:
A. Cerecor
owns beneficially and of record the shares of capital stock set
forth opposite its name on Schedule A hereto (such shares
of capital stock, together with any other shares of capital stock
of the Company acquired by Cerecor after the date hereof and during
the term of this Agreement, being collectively referred to herein
as the “Subject
Securities”).
B. Upon
the date hereof, Cerecor and the Company have consummated that
certain Asset Purchase Agreement, dated as of October 10, 2019 (the
“Purchase
Agreement”) between Cerecor and the
Company.
C. Pursuant
to its agreement under the Purchase Agreement and in order to
facilitate the consummation of the Merger Agreement (as defined
below), Cerecor has entered into this Agreement and agrees to be
bound hereby.
NOW
THEREFORE, in consideration of the promises and the covenants and
agreements set forth below, and for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Agreement to Vote Shares. At
any meeting of stockholders of the Company or at any adjournment
thereof that may take place between now and the date that is twelve
(12) months from the date hereof (the “Agreement Period”), in any action
by written consent or in any other circumstances upon which
Cerecor’s vote, consent or other approval is sought during
such period relating to that certain Agreement and Plan of Merger,
dated as of September 12, 2019, by and among the Company, Innovus
Pharmaceuticals, Inc., a Nevada corporation, and the other parties
thereto (the “Merger
Agreement”), Cerecor shall vote (or cause to be
voted), as applicable, all of the Subject Securities that are then
entitled to be voted (i) in favor of the proposed transactions set
forth in the Merger Agreement and (ii) against any proposal,
amendment, matter or agreement that would in any manner impede,
frustrate, prevent or nullify the Merger Agreement. Cerecor agrees
that the Subject Securities that are entitled to be voted shall be
voted (or caused to be voted) as set forth in the preceding
sentences whether or not Cerecor’s vote, consent or other
approval is sought and at any time or at multiple times during the
term of this Agreement.
2. Opportunity to Review. Cerecor
acknowledges receipt of the Merger Agreement and represents that
he, she, or it has had (i) the opportunity to review, and has read,
reviewed and understands, the terms and conditions of the Merger
Agreement and this Agreement, and (ii) the opportunity to review
and discuss the Merger Agreement and this Agreement with his, her
or its own advisors and legal counsel.
3. Public Disclosure;
Confidentiality.
(a) Cerecor understands
that it may be the recipient of confidential information of the
Company (“Confidential
Information”) during the term of this Agreement and
that such information may contain or constitute material non-public
information concerning the Company. Cerecor acknowledges that
trading in the securities of any party to this Agreement while in
possession of material nonpublic information or communicating that
information to any other Person who trades in such securities could
subject the applicable party to liability under the U.S. federal
and state securities laws, and the rules and regulations
promulgated thereunder, including Section 10(b) of the Securities
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Cerecor agrees that it and its Affiliates will not
disclose Confidential Information in its possession, nor will it
trade in the securities of the Company while in possession of
material nonpublic information or at all until Cerecor and its
Affiliates can do so in compliance with all applicable laws and
without breach of this Agreement.
(b) If Cerecor is
required to disclose any Confidential Information by legal process,
Cerecor shall: (a) take reasonable steps to preserve the privileged
nature and confidentiality of the Confidential Information,
including requesting that the Confidential Information not be
disclosed to non-parties or the public; (b) give the Company prompt
prior written notice of such request or requirement so that the
Company may seek an appropriate protective order or other remedy;
and (c) cooperate with the Company (at the Company’s expense)
to obtain such protective order. In the event that such protective
order or other remedy is not obtained, Cerecor (or such other
Persons to whom such request is directed) will furnish only that
portion of the Confidential Information which, on the advice of
Cerecor’s counsel, is legally required to be disclosed and,
upon the Company’s request, use its commercially reasonable
efforts to obtain assurances that confidential treatment will be
accorded to such information.
4. Representations and Warranties of
Cerecor. Cerecor hereby represents and warrants as
follows:
(a) Cerecor (i) is the
record and beneficial owner of the Subject Securities, free and
clear of any liens, adverse claims, charges or other encumbrances
of any nature whatsoever (other than pursuant to (x) restrictions
on transfer under applicable securities laws, or (y) this
Agreement), and (ii) does not beneficially own any securities of
the Company (including options, warrants or convertible securities)
other than the Subject Securities.
(b) Except with respect
to obligations under the Company’s Bylaws, Cerecor has the
sole right to transfer, to vote (or cause to vote) and to direct
(or cause to direct) the voting of the Subject Securities, and none
of the Subject Securities are subject to any voting trust or other
agreement, arrangement or restriction with respect to the transfer
or the voting of the Subject Securities (other than restrictions on
transfer under applicable securities laws), except as set forth in
this Agreement.
(c) Cerecor, if not a
natural person: (i) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and
(ii) has the requisite corporate, company, partnership or other
power and authority to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to comply with
the terms hereof. The execution and delivery by Cerecor of this
Agreement, the consummation by Cerecor of the transactions
contemplated hereby and the compliance by Cerecor with the
provisions hereof have been duly authorized by all necessary
corporate, company, partnership or other action on the part of
Cerecor, and no other corporate, company, partnership or other
proceedings on the part of Cerecor are necessary to authorize this
Agreement, to consummate the transactions contemplated hereby or to
comply with the provisions hereof.
(d) This Agreement has
been duly executed and delivered by Cerecor, constitutes a valid
and binding obligation of Cerecor and, assuming due authorization,
execution and delivery by the other parties thereto, is enforceable
against Cerecor in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar
laws affecting or relating to creditors’ rights generally,
and (ii) the availability of injunctive relief and other equitable
remedies.
(e) The execution and
delivery of this Agreement, the consummation of the transactions
contemplated hereby and compliance with the provisions hereof do
not and will not conflict with, or result in (i) any violation or
breach of, or default (with or without notice or lapse of time, or
both) under, any provision of the organizational documents of
Cerecor, if applicable, (ii) any material violation or breach of,
or default (with or without notice or lapse of time, or both) under
any (A) statute, Law, ordinance, rule or regulation or (B)
judgment, order or decree, in each case, applicable to Cerecor or
its properties or assets, or (iii) any material violation or breach
of, or default (with or without notice or lapse of time, or both)
under any material contract, trust, commitment, agreement,
understanding, arrangement or restriction of any kind to which
Cerecor is a party or by which Cerecor or Cerecor’s assets
are bound.
5. Termination. This Agreement
shall terminate automatically upon the approval of the Merger
Agreement by the Company’s stockholders; provided, however, that this Agreement
will also terminate if the Company has elected to terminate the
Merger Agreement in accordance with its terms prior to approval of
the Merger Agreement by the Company’s stockholders. In the
event of the termination of this Agreement, this Agreement shall
forthwith become null and void, there shall be no liability on the
part of any of the parties, and all rights and obligations of each
party hereto shall cease; provided, however, that no such
termination of this Agreement shall relieve any party hereto from
any liability for any breach of any provision of this Agreement
prior to such termination.
6. Further Covenants and
Assurances. During the term of this Agreement, Cerecor
hereby, to the extent permitted by Laws, waives and agrees not to
exercise any dissenters’ or appraisal rights, or other
similar rights, with respect to any Subject Securities which may
arise in connection with the transactions contemplated by the
Merger Agreement.
7. Successors, Assigns and Transferees
Bound. Without limiting Section 1 hereof in any way, Cerecor
agrees that this Agreement and the obligations hereunder shall
attach to the Subject Securities from the date hereof through the
termination of this Agreement and shall, to the extent permitted by
applicable Laws, be binding upon any Person to which legal or
beneficial ownership of the Subject Securities shall pass, whether
by operation of law or otherwise, including Cerecor’s heirs,
guardians, administrators or successors, and Cerecor further agrees
to take all reasonable actions necessary to effectuate the
foregoing.
8. Deposit. Cerecor shall cause a
counterpart of this Agreement to be deposited, in electronic or
physical form, with the Company at its principal place of business
or registered office where it shall be subject to the same right of
examination by any stockholder, in person or by agent or attorney,
as are the books and records of the Company.
9. Remedies. Cerecor acknowledges
that money damages would be both incalculable and an insufficient
remedy for any breach of this Agreement by it, and that any such
breach would cause the Company and Cerecor irreparable harm.
Accordingly, Cerecor agrees that in the event of any breach or
threatened breach of this Agreement, the Company and Cerecor, in
addition to any other remedies at law or in equity each may have,
shall be entitled to seek immediate equitable relief, including
injunctive relief and specific performance, without the necessity
of proving the inadequacy of money damages as a remedy and without
the necessity of posting any bond or other security, to prevent
breaches of this Agreement and to enforce specifically the terms
and provisions hereof in any court of the United States or any
state having jurisdiction.
10. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to
have been duly given when personally delivered, or if sent by
United States certified mail, return receipt requested, postage
prepaid, shall be deemed duly given on delivery by United States
Postal Service, or if sent by e-mail or receipted overnight courier
services shall be deemed duly given on the Business Day received if
received prior to 5:00 p.m. local time or on the following Business
Day if received after 5:00 p.m. local time or on a non-Business
Day, addressed to the respective parties as follows:
(i)
if to the Company,
to:
Aytu
Bioscience, Inc.
373
Inverness Parkway, Suite 206
Englewood,
CO 80112
Attention:
Joshua Disbrow
with a
required copy (which shall not constitute notice) to:
Dorsey & Whitney LLP
111
S. Main Street, Suite 2100
Salt
Lake City, UT 84111
Attention: Nolan Taylor
Cerecor,
Inc.
540
Gaither Road, Suite 400
Baltimore,
MD 20850
Attention:
Joseph Miller
with a
required copy (which shall not constitute notice) to:
Wyrick
Robbins Yates & Ponton LLP
4101
Lake Boone Trail, Suite 300
Raleigh, NC
27607
Attention: Don
Reynolds
(iii)
if to Cerecor, to
the address set forth on Schedule A hereto.
11. Severability. Any provision
hereof that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the
extent permitted by Law, each party hereby waives any provision of
Law that renders any such provision prohibited or unenforceable in
any respect.
12. Entire Agreement/Amendment.
This Agreement (including the provisions of the Purchase Agreement
referenced herein) represent the entire agreement of the parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof. This Agreement
may not be amended, modified, altered or supplemented except by
means of a written instrument executed and delivered by the parties
hereto.
13. Governing Law. This Agreement,
and all claims or causes of action (whether in contract, tort or
otherwise) that may be based upon, arise out of or relate to this
Agreement or the negotiation, execution or performance of this
Agreement, shall be governed by and construed in accordance with
the internal Laws of the State of Delaware without reference to its
choice of law rules. Each party agrees that any legal action or
other legal proceeding relating to this Agreement or the
enforcement of any provision of this Agreement shall be brought or
otherwise commenced exclusively in the Court of Chancery of the
State of Delaware or any federal court of competent jurisdiction in
the State of Delaware. Each of the parties consents to service of
process in any such proceeding in any manner permitted by the Laws
of the State of Delaware, and agrees that service of process by
registered or certified mail, return receipt requested, at its
address specified pursuant to Section 11 of this Agreement is reasonably calculated
to give actual notice. Each party waives and agrees not to assert
(by way of motion, as a defense or otherwise), in any such legal
proceeding commenced in such courts, any claim that such party is
not subject personally to the jurisdiction of such courts, that
such legal proceeding has been brought in an inconvenient forum,
that the venue of such proceeding is improper or that this
Agreement or the subject matter hereof or thereof may not be
enforced in or by such courts. EACH PARTY HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF.
14. Counterparts. This Agreement
may be executed by delivery of electronic signatures and in two or
more counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement or the
terms hereof to produce or account for more than one of such
counterparts.
[SIGNATURE
PAGES FOLLOW]
In Witness Whereof, the parties
have caused this Agreement to be executed as of the date first
above written.
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Cerecor
By: /s/ Joseph
Miller
Name:
Joseph Miller
Title:
Chief Financial Officer
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[Signature
Page to Voting Agreement]
In Witness Whereof, the parties
have caused this Agreement to be executed as of the date first
above written.
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AYTU
BIOSCIENCE INC.
By: /s/ Joseph R.
Disbrow
Name:
Joseph R. Disbrow
Title:
Chief Executive Officer
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[Signature Page to
Voting Agreement]
VOTING AGREEMENT
THIS
VOTING AGREEMENT (this “Agreement”) is made and entered
into as of November 1, 2019, by and among Cerecor, Inc., a Delaware
corporation (“Cerecor”), Aytu Bioscience Inc., a
Delaware corporation (the “Company”) and the stockholder of
the Company listed on Schedule A hereto
(“Securityholder”). Capitalized
terms used but not defined herein are used as they are defined in
the Purchase Agreement (as defined below).
RECITALS:
A. Securityholder
owns beneficially and of record the shares of capital stock set
forth opposite Securityholder’s name on Schedule A hereto (such shares
of capital stock, together with any other shares of capital stock
of the Company acquired by Securityholder after the date hereof and
during the term of this Agreement, being collectively referred to
herein as the “Subject
Securities”).
B. Upon
the date hereof, Cerecor and the Company have consummated that
certain Asset Purchase Agreement, dated as of November 1, 2019 (the
“Purchase
Agreement”) between Cerecor and the Company, pursuant
to which the Company has issued 9,805,845 shares of its Series G
Preferred Stock to Cerecor (the “Preferred Stock”).
C. Pursuant
to the Purchase Agreement the Company has also agreed to seek
approval by its stockholders of the conversion into common stock of
the Company of all the outstanding shares of Preferred Stock (the
“Preferred
Conversion”).
D. In
order to facilitate the Preferred Conversion and the consummation
of the Merger Agreement (as defined below), Securityholder, solely
in Securityholder’s capacity as holder of the Subject
Securities, has entered into this Agreement and agrees to be bound
hereby.
NOW
THEREFORE, in consideration of the promises and the covenants and
agreements set forth below, and for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Agreement to Vote Shares. At
any meeting of stockholders of the Company or at any adjournment
thereof that may take place between now and the date that is twelve
(12) months from the date hereof (the “Agreement Period”), in any action
by written consent or in any other circumstances upon which
Securityholder’s vote, consent or other approval is sought
during such period relating to the Preferred Conversion,
Securityholder shall vote (or cause to be voted), as applicable,
all of the Subject Securities that are then entitled to be voted
(i) in favor of the Preferred Conversion and (ii) against any
proposal, amendment, matter or agreement that would in any manner
impede, frustrate, prevent or nullify the Preferred Conversion.
Additionally, during the Agreement Period, Securityholder agrees to
vote all of the Subject Securities in favor of the proposed
transactions set forth in that certain Agreement and Plan of
Merger, dated as of September 12, 2019, by and among the Company,
Innovus Pharmaceuticals, Inc., a Nevada corporation, and the other
parties thereto (the “Merger
Agreement”). Securityholder agrees that the Subject
Securities that are entitled to be voted shall be voted (or caused
to be voted) as set forth in the preceding sentences whether or not
Securityholder’s vote, consent or other approval is sought on
only one or on any combination of the matters set forth in this
Section 1 and at any time or at multiple times during the term of
this Agreement.
2. Opportunity to Review.
Securityholder acknowledges receipt of the Purchase Agreement and
the Merger Agreement and represents that he, she, or it has had (i)
the opportunity to review, and has read, reviewed and understands,
the terms and conditions of the Purchase Agreement, the Merger
Agreement and this Agreement, and (ii) the opportunity to review
and discuss the Purchase Agreement, the Merger Agreement and this
Agreement with his, her or its own advisors and legal
counsel.
3. Public Disclosure;
Confidentiality.
(a) The Securityholder
understands that it may be the recipient of confidential
information of the Company (“Confidential Information”) during
the term of this Agreement and that such information may contain or
constitute material non-public information concerning the Company.
The Securityholder acknowledges that trading in the securities of
any party to this Agreement while in possession of material
nonpublic information or communicating that information to any
other Person who trades in such securities could subject the
applicable party to liability under the U.S. federal and state
securities laws, and the rules and regulations promulgated
thereunder, including Section 10(b) of the Securities Exchange Act
of 1934, as amended, and Rule 10b-5 promulgated thereunder. The
Securityholder agrees that it and its Affiliates will not disclose
Confidential Information in its possession, nor will it trade in
the securities of the Company while in possession of material
nonpublic information or at all until the Securityholder and its
Affiliates can do so in compliance with all applicable laws and
without breach of this Agreement.
(b) If the
Securityholder is required to disclose any Confidential Information
by legal process, the Securityholder shall: (a) take reasonable
steps to preserve the privileged nature and confidentiality of the
Confidential Information, including requesting that the
Confidential Information not be disclosed to non-parties or the
public; (b) give the Company prompt prior written notice of such
request or requirement so that the Company may seek an appropriate
protective order or other remedy; and (c) cooperate with the
Company (at the Company’s expense) to obtain such protective
order. In the event that such protective order or other remedy is
not obtained, the Securityholder (or such other Persons to whom
such request is directed) will furnish only that portion of the
Confidential Information which, on the advice of the
Securityholder’s counsel, is legally required to be disclosed
and, upon the Company’s request, use its commercially
reasonable efforts to obtain assurances that confidential treatment
will be accorded to such information.
4. Representations and Warranties of
Securityholder. Securityholder hereby represents and
warrants as follows:
(a) Securityholder (i)
is the record and beneficial owner of the Subject Securities, free
and clear of any liens, adverse claims, charges or other
encumbrances of any nature whatsoever (other than pursuant to (x)
restrictions on transfer under applicable securities laws, or (y)
this Agreement), and (ii) does not beneficially own any securities
of the Company (including options, warrants or convertible
securities) other than the Subject Securities.
(b) Except with respect
to obligations under the Company’s Bylaws, Securityholder has
the sole right to transfer, to vote (or cause to vote) and to
direct (or cause to direct) the voting of the Subject Securities,
and none of the Subject Securities are subject to any voting trust
or other agreement, arrangement or restriction with respect to the
transfer or the voting of the Subject Securities (other than
restrictions on transfer under applicable securities laws), except
as set forth in this Agreement.
(c) Securityholder, if
not a natural person: (i) is duly organized, validly existing and
in good standing under the laws of its jurisdiction of
organization, and (ii) has the requisite corporate, company,
partnership or other power and authority to execute and deliver
this Agreement, to consummate the transactions contemplated hereby
and to comply with the terms hereof. The execution and delivery by
Securityholder of this Agreement, the consummation by
Securityholder of the transactions contemplated hereby and the
compliance by Securityholder with the provisions hereof have been
duly authorized by all necessary corporate, company, partnership or
other action on the part of Securityholder, and no other corporate,
company, partnership or other proceedings on the part of
Securityholder are necessary to authorize this Agreement, to
consummate the transactions contemplated hereby or to comply with
the provisions hereof.
(d) This Agreement has
been duly executed and delivered by Securityholder, constitutes a
valid and binding obligation of Securityholder and, assuming due
authorization, execution and delivery by the other parties thereto,
is enforceable against Securityholder in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws affecting or relating to creditors’ rights
generally, and (ii) the availability of injunctive relief and other
equitable remedies.
(e) The execution and
delivery of this Agreement, the consummation of the transactions
contemplated hereby and compliance with the provisions hereof do
not and will not conflict with, or result in (i) any violation or
breach of, or default (with or without notice or lapse of time, or
both) under, any provision of the organizational documents of
Securityholder, if applicable, (ii) any material violation or
breach of, or default (with or without notice or lapse of time, or
both) under any (A) statute, Law, ordinance, rule or regulation or
(B) judgment, order or decree, in each case, applicable to
Securityholder or its properties or assets, or (iii) any material
violation or breach of, or default (with or without notice or lapse
of time, or both) under any material contract, trust, commitment,
agreement, understanding, arrangement or restriction of any kind to
which Securityholder is a party or by which Securityholder or
Securityholder’s assets are bound.
5. Termination. This Agreement
shall terminate automatically upon the later to occur of the
approval of the Preferred Conversion by the Company’s
stockholders or the approval of the Merger Agreement by such
stockholders; provided, however, that this Agreement
will also terminate if the approval of the Preferred Conversion has
occurred and the Company has elected to terminate the Merger
Agreement in accordance with its terms prior to approval of the
Merger Agreement by the Company’s stockholders. In the event
of the termination of this Agreement, this Agreement shall
forthwith become null and void, there shall be no liability on the
part of any of the parties, and all rights and obligations of each
party hereto shall cease; provided, however, that no such
termination of this Agreement shall relieve any party hereto from
any liability for any breach of any provision of this Agreement
prior to such termination.
6. Further Covenants and
Assurances. During the term of this Agreement,
Securityholder hereby, to the extent permitted by Laws, waives and
agrees not to exercise any dissenters’ or appraisal rights,
or other similar rights, with respect to any Subject Securities
which may arise in connection with the transactions contemplated by
the Merger Agreement.
7. Deposit. Securityholder shall
cause a counterpart of this Agreement to be deposited, in
electronic or physical form, with the Company at its principal
place of business or registered office where it shall be subject to
the same right of examination by any stockholder, in person or by
agent or attorney, as are the books and records of the
Company.
8. Remedies. Securityholder
acknowledges that money damages would be both incalculable and an
insufficient remedy for any breach of this Agreement by it, and
that any such breach would cause the Company and Cerecor
irreparable harm. Accordingly, Securityholder agrees that in the
event of any breach or threatened breach of this Agreement, the
Company and Cerecor, in addition to any other remedies at law or in
equity each may have, shall be entitled to seek immediate equitable
relief, including injunctive relief and specific performance,
without the necessity of proving the inadequacy of money damages as
a remedy and without the necessity of posting any bond or other
security, to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction.
9. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to
have been duly given when personally delivered, or if sent by
United States certified mail, return receipt requested, postage
prepaid, shall be deemed duly given on delivery by United States
Postal Service, or if sent by e-mail or receipted overnight courier
services shall be deemed duly given on the Business Day received if
received prior to 5:00 p.m. local time or on the following Business
Day if received after 5:00 p.m. local time or on a non-Business
Day, addressed to the respective parties as follows:
(i)
if to the Company,
to:
Aytu
Bioscience, Inc.
373
Inverness Parkway, Suite 206
Englewood,
CO 80112
Attention:
Joshua Disbrow
with a
required copy (which shall not constitute notice) to:
Dorsey & Whitney LLP
111
S. Main Street, Suite 2100
Salt
Lake City, UT 84111
Attention: Nolan Taylor
Cerecor,
Inc.
540
Gaither Road, Suite 400
Baltimore,
MD 20850
Attention:
Joseph Miller
with a
required copy (which shall not constitute notice) to:
Wyrick
Robbins Yates & Ponton LLP
4101
Lake Boone Trail, Suite 300
Raleigh, NC
27607
Attention: Don
Reynolds
(iii)
if to
Securityholder, to the address set forth on Schedule A hereto.
10. Severability. Any provision
hereof that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the
extent permitted by Law, each party hereby waives any provision of
Law that renders any such provision prohibited or unenforceable in
any respect.
11. Entire Agreement/Amendment.
This Agreement (including the provisions of the Purchase Agreement
referenced herein) represent the entire agreement of the parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof. This Agreement
may not be amended, modified, altered or supplemented except by
means of a written instrument executed and delivered by the parties
hereto.
12. Governing Law. This Agreement,
and all claims or causes of action (whether in contract, tort or
otherwise) that may be based upon, arise out of or relate to this
Agreement or the negotiation, execution or performance of this
Agreement, shall be governed by and construed in accordance with
the internal Laws of the State of Delaware without reference to its
choice of law rules. Each party agrees that any legal action or
other legal proceeding relating to this Agreement or the
enforcement of any provision of this Agreement shall be brought or
otherwise commenced exclusively in the Court of Chancery of the
State of Delaware or any federal court of competent jurisdiction in
the State of Delaware. Each of the parties consents to service of
process in any such proceeding in any manner permitted by the Laws
of the State of Delaware, and agrees that service of process by
registered or certified mail, return receipt requested, at its
address specified pursuant to Section 11 of this Agreement is reasonably calculated
to give actual notice. Each party waives and agrees not to assert
(by way of motion, as a defense or otherwise), in any such legal
proceeding commenced in such courts, any claim that such party is
not subject personally to the jurisdiction of such courts, that
such legal proceeding has been brought in an inconvenient forum,
that the venue of such proceeding is improper or that this
Agreement or the subject matter hereof or thereof may not be
enforced in or by such courts. EACH PARTY HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF.
13. Counterparts. This Agreement
may be executed by delivery of electronic signatures and in two or
more counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement or the
terms hereof to produce or account for more than one of such
counterparts.
[SIGNATURE
PAGES FOLLOW]
In Witness Whereof, the parties
have caused this Agreement to be executed as of the date first
above written.
|
|
Securityholder
By:__________________________________
Name:
Title:
|
[Signature
Page to Voting Agreement]
In Witness Whereof, the parties
have caused this Agreement to be executed as of the date first
above written.
|
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AYTU
BIOSCIENCE INC.
By:
/s/ Joshua R.
Disbrow
Name:
Joshua R. Disbrow
Title:
Chief Executive Officer
|
[Signature
Page to Voting Agreement]
In Witness Whereof, the parties
have caused this Agreement to be executed as of the date first
above written.
|
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CERECOR,
INC.
By: /s/ Joseph
Miller
Name:
Joseph Miller
Title:
Chief Financial Officer
|
[Signature Page to
Voting Agreement]
VOTING AGREEMENT
THIS
VOTING AGREEMENT (this “Agreement”) is made and entered
into as of November 1,
2019, by and among Cerecor, Inc., a Delaware corporation
(“Cerecor”),
Aytu Bioscience Inc., a Delaware corporation (the
“Company”) and
the stockholder of the Company listed on Schedule A hereto
(“Securityholder”). Capitalized
terms used but not defined herein are used as they are defined in
the Purchase Agreement (as defined below).
RECITALS:
A. Securityholder
is an officer of the Company and owns beneficially and of record
the shares of capital stock set forth opposite
Securityholder’s name on Schedule A hereto (such shares
of capital stock, together with any other shares of capital stock
of the Company acquired by Securityholder after the date hereof and
during the term of this Agreement, being collectively referred to
herein as the “Subject
Securities”).
B. Upon
the date hereof, Cerecor and the Company have consummated that
certain Asset Purchase Agreement, dated as of October 31, 2019 (the
“Purchase
Agreement”) between Cerecor and the Company, pursuant
to which the Company has issued 9,805,845 shares of its Series G
Preferred Stock to Cerecor (the “Preferred Stock”).
C. Pursuant
to the Purchase Agreement the Company has also agreed to seek
approval by its stockholders of the conversion into common stock of
the Company of all the outstanding shares of Preferred Stock (the
“Preferred
Conversion”).
D. In
order to facilitate the Preferred Conversion and the consummation
of the Merger Agreement (as defined below), Securityholder, solely
in Securityholder’s capacity as holder of the Subject
Securities and as an officer of the Company, has entered into this
Agreement and agrees to be bound hereby.
NOW
THEREFORE, in consideration of the promises and the covenants and
agreements set forth below, and for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Agreement to Vote Shares. At
any meeting of stockholders of the Company or at any adjournment
thereof that may take place between now and the date that is twelve
(12) months from the date hereof (the “Agreement Period”), in any action
by written consent or in any other circumstances upon which
Securityholder’s vote, consent or other approval is sought
during such period relating to the Preferred Conversion,
Securityholder shall vote (or cause to be voted), as applicable,
all of the Subject Securities that are then entitled to be voted
(i) in favor of the Preferred Conversion and (ii) against any
proposal, amendment, matter or agreement that would in any manner
impede, frustrate, prevent or nullify the Preferred Conversion.
Additionally, during the Agreement Period, Securityholder agrees to
vote all of the Subject Securities in favor of the proposed
transactions set forth in that certain Agreement and Plan of
Merger, dated as of September 12, 2019, by and among the Company,
Innovus Pharmaceuticals, Inc., a Nevada corporation, and the other
parties thereto (the “Merger
Agreement”). Securityholder agrees that the Subject
Securities that are entitled to be voted shall be voted (or caused
to be voted) as set forth in the preceding sentences whether or not
Securityholder’s vote, consent or other approval is sought on
only one or on any combination of the matters set forth in this
Section 1 and at any time or at multiple times during the term of
this Agreement.
2. Opportunity to Review.
Securityholder acknowledges receipt of the Purchase Agreement and
the Merger Agreement and represents that he, she, or it has had (i)
the opportunity to review, and has read, reviewed and understands,
the terms and conditions of the Purchase Agreement, the Merger
Agreement and this Agreement, and (ii) the opportunity to review
and discuss the Purchase Agreement, the Merger Agreement and this
Agreement with his, her or its own advisors and legal
counsel.
3. Public Disclosure;
Confidentiality.
(a) The Securityholder
understands that it may be the recipient of confidential
information of the Company (“Confidential Information”) during
the term of this Agreement and that such information may contain or
constitute material non-public information concerning the Company.
The Securityholder acknowledges that trading in the securities of
any party to this Agreement while in possession of material
nonpublic information or communicating that information to any
other Person who trades in such securities could subject the
applicable party to liability under the U.S. federal and state
securities laws, and the rules and regulations promulgated
thereunder, including Section 10(b) of the Securities Exchange Act
of 1934, as amended, and Rule 10b-5 promulgated thereunder. The
Securityholder agrees that it and its Affiliates will not disclose
Confidential Information in its possession, nor will it trade in
the securities of the Company while in possession of material
nonpublic information or at all until the Securityholder and its
Affiliates can do so in compliance with all applicable laws and
without breach of this Agreement.
(b) If the
Securityholder is required to disclose any Confidential Information
by legal process, the Securityholder shall: (a) take reasonable
steps to preserve the privileged nature and confidentiality of the
Confidential Information, including requesting that the
Confidential Information not be disclosed to non-parties or the
public; (b) give the Company prompt prior written notice of such
request or requirement so that the Company may seek an appropriate
protective order or other remedy; and (c) cooperate with the
Company (at the Company’s expense) to obtain such protective
order. In the event that such protective order or other remedy is
not obtained, the Securityholder (or such other Persons to whom
such request is directed) will furnish only that portion of the
Confidential Information which, on the advice of the
Securityholder’s counsel, is legally required to be disclosed
and, upon the Company’s request, use its commercially
reasonable efforts to obtain assurances that confidential treatment
will be accorded to such information.
4. Representations and Warranties of
Securityholder. Securityholder hereby represents and
warrants as follows:
(a) Securityholder (i)
is the record and beneficial owner of the Subject Securities, free
and clear of any liens, adverse claims, charges or other
encumbrances of any nature whatsoever (other than pursuant to (x)
restrictions on transfer under applicable securities laws, or (y)
this Agreement), and (ii) does not beneficially own any securities
of the Company (including options, warrants or convertible
securities) other than the Subject Securities.
(b) Except with respect
to obligations under the Company’s Bylaws, Securityholder has
the sole right to transfer, to vote (or cause to vote) and to
direct (or cause to direct) the voting of the Subject Securities,
and none of the Subject Securities are subject to any voting trust
or other agreement, arrangement or restriction with respect to the
transfer or the voting of the Subject Securities (other than
restrictions on transfer under applicable securities laws), except
as set forth in this Agreement.
(c) Securityholder, if
not a natural person: (i) is duly organized, validly existing and
in good standing under the laws of its jurisdiction of
organization, and (ii) has the requisite corporate, company,
partnership or other power and authority to execute and deliver
this Agreement, to consummate the transactions contemplated hereby
and to comply with the terms hereof. The execution and delivery by
Securityholder of this Agreement, the consummation by
Securityholder of the transactions contemplated hereby and the
compliance by Securityholder with the provisions hereof have been
duly authorized by all necessary corporate, company, partnership or
other action on the part of Securityholder, and no other corporate,
company, partnership or other proceedings on the part of
Securityholder are necessary to authorize this Agreement, to
consummate the transactions contemplated hereby or to comply with
the provisions hereof.
(d) This Agreement has
been duly executed and delivered by Securityholder, constitutes a
valid and binding obligation of Securityholder and, assuming due
authorization, execution and delivery by the other parties thereto,
is enforceable against Securityholder in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws affecting or relating to creditors’ rights
generally, and (ii) the availability of injunctive relief and other
equitable remedies.
(e) The execution and
delivery of this Agreement, the consummation of the transactions
contemplated hereby and compliance with the provisions hereof do
not and will not conflict with, or result in (i) any violation or
breach of, or default (with or without notice or lapse of time, or
both) under, any provision of the organizational documents of
Securityholder, if applicable, (ii) any material violation or
breach of, or default (with or without notice or lapse of time, or
both) under any (A) statute, Law, ordinance, rule or regulation or
(B) judgment, order or decree, in each case, applicable to
Securityholder or its properties or assets, or (iii) any material
violation or breach of, or default (with or without notice or lapse
of time, or both) under any material contract, trust, commitment,
agreement, understanding, arrangement or restriction of any kind to
which Securityholder is a party or by which Securityholder or
Securityholder’s assets are bound.
5. Termination. This Agreement
shall terminate automatically upon the later to occur of the
approval of the Preferred Conversion by the Company’s
stockholders or the approval of the Merger Agreement by such
stockholders; provided, however, that this Agreement
will also terminate if the approval of the Preferred Conversion has
occurred and the Company has elected to terminate the Merger
Agreement in accordance with its terms prior to approval of the
Merger Agreement by the Company’s stockholders. In the event
of the termination of this Agreement, this Agreement shall
forthwith become null and void, there shall be no liability on the
part of any of the parties, and all rights and obligations of each
party hereto shall cease; provided, however, that no such
termination of this Agreement shall relieve any party hereto from
any liability for any breach of any provision of this Agreement
prior to such termination.
6. Further Covenants and
Assurances. During the term of this Agreement,
Securityholder hereby, to the extent permitted by Laws, waives and
agrees not to exercise any dissenters’ or appraisal rights,
or other similar rights, with respect to any Subject Securities
which may arise in connection with the transactions contemplated by
the Merger Agreement.
7. Deposit. Securityholder shall
cause a counterpart of this Agreement to be deposited, in
electronic or physical form, with the Company at its principal
place of business or registered office where it shall be subject to
the same right of examination by any stockholder, in person or by
agent or attorney, as are the books and records of the
Company.
8. Remedies. Securityholder
acknowledges that money damages would be both incalculable and an
insufficient remedy for any breach of this Agreement by it, and
that any such breach would cause the Company and Cerecor
irreparable harm. Accordingly, Securityholder agrees that in the
event of any breach or threatened breach of this Agreement, the
Company and Cerecor, in addition to any other remedies at law or in
equity each may have, shall be entitled to seek immediate equitable
relief, including injunctive relief and specific performance,
without the necessity of proving the inadequacy of money damages as
a remedy and without the necessity of posting any bond or other
security, to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction.
9. Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to
have been duly given when personally delivered, or if sent by
United States certified mail, return receipt requested, postage
prepaid, shall be deemed duly given on delivery by United States
Postal Service, or if sent by e-mail or receipted overnight courier
services shall be deemed duly given on the Business Day received if
received prior to 5:00 p.m. local time or on the following Business
Day if received after 5:00 p.m. local time or on a non-Business
Day, addressed to the respective parties as follows:
(i)
if to the Company,
to:
Aytu
Bioscience, Inc.
373
Inverness Parkway, Suite 206
Englewood,
CO 80112
Attention:
Joshua Disbrow
with a
required copy (which shall not constitute notice) to:
Dorsey & Whitney LLP
111
S. Main Street, Suite 2100
Salt
Lake City, UT 84111
Attention: Nolan Taylor
Cerecor,
Inc.
540
Gaither Road, Suite 400
Baltimore,
MD 20850
Attention:
Joseph Miller
with a
required copy (which shall not constitute notice) to:
Wyrick
Robbins Yates & Ponton LLP
4101
Lake Boone Trail, Suite 300
Raleigh, NC
27607
Attention: Don
Reynolds
(iii)
if to
Securityholder, to the address set forth on Schedule A hereto.
10. Severability. Any provision
hereof that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the
extent permitted by Law, each party hereby waives any provision of
Law that renders any such provision prohibited or unenforceable in
any respect.
11. Entire Agreement/Amendment.
This Agreement (including the provisions of the Purchase Agreement
referenced herein) represent the entire agreement of the parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof. This Agreement
may not be amended, modified, altered or supplemented except by
means of a written instrument executed and delivered by the parties
hereto.
12. Governing Law. This Agreement,
and all claims or causes of action (whether in contract, tort or
otherwise) that may be based upon, arise out of or relate to this
Agreement or the negotiation, execution or performance of this
Agreement, shall be governed by and construed in accordance with
the internal Laws of the State of Delaware without reference to its
choice of law rules. Each party agrees that any legal action or
other legal proceeding relating to this Agreement or the
enforcement of any provision of this Agreement shall be brought or
otherwise commenced exclusively in the Court of Chancery of the
State of Delaware or any federal court of competent jurisdiction in
the State of Delaware. Each of the parties consents to service of
process in any such proceeding in any manner permitted by the Laws
of the State of Delaware, and agrees that service of process by
registered or certified mail, return receipt requested, at its
address specified pursuant to Section 11 of this Agreement is reasonably calculated
to give actual notice. Each party waives and agrees not to assert
(by way of motion, as a defense or otherwise), in any such legal
proceeding commenced in such courts, any claim that such party is
not subject personally to the jurisdiction of such courts, that
such legal proceeding has been brought in an inconvenient forum,
that the venue of such proceeding is improper or that this
Agreement or the subject matter hereof or thereof may not be
enforced in or by such courts. EACH PARTY HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF.
13. Counterparts. This Agreement
may be executed by delivery of electronic signatures and in two or
more counterparts, each of which shall be deemed an original, and
it shall not be necessary in making proof of this Agreement or the
terms hereof to produce or account for more than one of such
counterparts.
[SIGNATURE
PAGES FOLLOW]
In Witness Whereof, the parties
have caused this Agreement to be executed as of the date first
above written.
|
|
Securityholder
Name:
Title:
|
[Signature
Page to Voting Agreement]
In Witness Whereof, the parties
have caused this Agreement to be executed as of the date first
above written.
|
|
AYTU
BIOSCIENCE INC.
Name:
Title:
|
[Signature
Page to Voting Agreement]
In Witness Whereof, the parties
have caused this Agreement to be executed as of the date first
above written.
|
|
CERECOR,
INC.
Name:
Title:
|
[Signature Page to
Voting Agreement]
CONSENT AND LIMITED WAIVER AGREEMENT
This
Consent and Limited Waiver Agreement (this “Waiver”) is entered into
as of the November 1, 2019, by and among Peter Steelman
(“Steelman”), James Flynn
(“Flynn”), and Deerfield
CSF, LLC, on behalf of itself and its affiliates
(“Deerfield”, and
collectively with Steelman and Flynn, the “Deerfield Parties”),
Avadel U.S. Holdings, Inc. and its subsidiaries and affiliates
(collectively, “Avadel”), Armistice
Capital Master Fund, Ltd. (“Armistice”), Cerecor Inc.
(“Cerecor”), Aytu
BioScience, Inc. (“Buyer”) and Aytu
Therapeutics LLC (“Aytu
Therapeutics”).
RECITALS
WHEREAS, the
Deerfield Parties and Avadel (including through its affiliated
entities) are parties to that certain Membership Interest Purchase
Agreement dated as of February 5, 2016, as may be amended from time
to time (the “Deerfield
Agreement”);
WHEREAS, pursuant
to that certain Asset Purchase Agreement dated February 12, 2018
(the “Prior
APA”), Cerecor purchased from Avadel certain assets
and assumed certain liabilities, including certain of
Avadel’s liabilities under the Deerfield
Agreement;
WHEREAS, Cerecor
and Buyer have entered into an Asset Purchase Agreement dated as of
October 10, 2019 (the “APA”) pursuant to which
Buyer will purchase certain assets from Cerecor and assume certain
of Cerecor’s liabilities, including all of Cerecor’s
assets and liabilities arising under the Deerfield Agreement and,
to the extent related to or arising out of the operation of the
Business (as defined in the APA) after the Closing (as defined in
the APA), the Prior APA (the “Asset
Purchase”);
WHEREAS, each of
Armistice and Cerecor have agreed to enter into Guarantees in favor
of the Deerfield Parties in substantially the forms attached hereto
as Exhibits A-1 and
A-2 (the “Armistice Guaranty” and
“Cerecor
Guarantee”, respectively, and collectively, the
“Guarantees”);
WHEREAS, Armistice
has agreed to deposit $15,000,000 (the “Escrow Funds”) in an
escrow account (the “Escrow Account”) governed
by that certain escrow agreement dated on or about the date hereof
by and among Armistice, the Deerfield Parties and JPMorgan Chase
Bank, N.A. (the “Escrow Agent”), in
substantially the form attached hereto as Exhibit B (the “Escrow Agreement”) for
the purpose of securing the portion of the Primary Obligations
under the Armistice Guarantee comprised of the balloon payment of
$15,000,000 due to the Deerfield Parties by Buyer on the last
business day of January 2021 or earlier in accordance with Section
1.6(g) of the Deerfield Agreement (the “Balloon Payment
Obligation”);
WHEREAS, neither
Buyer nor Cerecor would agree to consummate the Asset Purchase
without the prior written consent, release and limited waiver of
and by Avadel and the Deerfield Parties as set forth herein;
and
WHEREAS, in
consideration of Buyer’s agreement to assume certain
liabilities under the Deerfield Agreement as set forth in the APA,
as well as the Escrow Agreement and the Guarantees, the Deerfield
Parties and Avadel desire to provide this consent, release and
limited waiver.
NOW,
THEREFORE, in consideration of the premises and of the mutual
covenants, conditions and agreements set forth herein and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows.
1. Defined Terms. Capitalized
terms used herein (including in the preamble and recitals above)
but not otherwise defined herein have the meanings ascribed to them
in the Deerfield Agreement.
2. Reliance. The parties hereto
acknowledge and agree that the effectiveness of the Deerfield
Parties’ consent and waiver, as set forth in Sections 6 and 7
below, is contingent upon (a) Armistice entering into the Escrow
Agreement and depositing $15,000,000 in the Escrow Account
thereunder, (b) Armistice and Cerecor entering into the Guarantees
and (c) payment by Cerecor of the attorney fees incurred by the
Deerfield Parties in connection with transactions contemplated
hereby.
3. Security
Arrangements.
(a) In the event that
the Deerfield Parties do not receive payment of the Balloon Payment
Obligation in full when due and the Escrow Funds are still in the
Escrow Account, then, upon written request from Deerfield,
Armistice and the Deerfield Parties shall sign and deliver to the
Escrow Agent a joint written instruction sufficient under the
Escrow Agreement to cause the Escrow Agent to deliver Escrow Funds
to the Deerfield Parties in an amount sufficient such that the
Deerfield Parties receive the amount of the Balloon Payment
Obligation in full with any excess Escrow Funds being disbursed to
Armistice. The Deerfield Parties acknowledge and agree that they
will seek payment from the Escrow Funds pursuant to this Section
3(a) before requesting payment from Avadel pursuant to the Avadel
Guarantee; provided, that such agreement
does not limit the rights of the Deerfield Parties pursuant to the
Avadel Guarantee in the event that payment is not timely made from
the Escrow Funds with respect to the Balloon Payment
Obligation.
(b) In the event that
the Deerfield Parties do receive payment of the Balloon Payment
Obligation in full when due and the Escrow Funds are still in the
Escrow Account, then, upon written request from Armistice,
Armistice and the Deerfield Parties shall sign and deliver to the
Escrow Agent a joint written instruction sufficient under the
Escrow Agreement to cause the Escrow Agent to deliver the Escrow
Funds to Armistice.
(c) In
the event that Armistice arranges for an Acceptable Letter of
Credit to be issued in favor of the Deerfield Parties, then, upon
written request from Armistice, Armistice and the Deerfield Parties
shall sign and deliver to the Escrow Agent a joint written
instruction sufficient under the Escrow Agreement to cause the
Escrow Agent to deliver the Escrow Funds to Armistice. An
“Acceptable Letter of Credit” means a letter of credit
that is (i) issued by a bank domiciled in the United States
acceptable to Deerfield, (ii) on a form acceptable to Deerfield,
(iii) is in the amount of $15,000,000, (iv) is for the benefit of
the Deerfield Parties, (v) does not expire until the last business
day of February 2021, and (vi) permits the Deerfield Parties to
draw on such letter of credit immediately if the Deerfield Parties
do not receive payment of the Balloon Payment Obligation in full
when due.
4. Assumption. Buyer acknowledges
and agrees that: (i) it has assumed all obligations under the
provisions of the Deerfield Agreement set forth on Appendix A; (ii)
this limited waiver of the Asset Purchase as an Acceleration
Trigger Event only applies to the Asset Purchase and any future
events, facts or circumstances that constitute an Acceleration
Trigger Event are not waived; (iii) the definition of “Net
Sales” in the Deerfield Agreement shall hereby be deemed to
include, among other items, the amounts invoiced for sales of
Products by or on behalf of Buyer or any of its Affiliates or any
direct or indirect assignee or licensee of Buyer or any of its
Affiliates; and (iv) the audit rights of the Deerfield Parties in
Section 1.6(d) of the Deerfield Agreement shall apply to the books
and records of Buyer and its Affiliates.
5. Security Interest.
Buyer’s subsidiary, Aytu Therapeutics, which will hold the
Purchased Assets (as defined below), hereby pledges, assigns,
hypothecates, transfers and grants to the Deerfield Parties, a
first priority lien upon and security interest in, all of its
right, title and interest in and to the Purchased Assets (as
defined in the APA) to the extent such Purchased Assets were also
“Purchased Assets” under the Prior APA. The Purchased
Assets shall secure the full and prompt payment, at any time and
from time to time as and when due (whether at the stated payment
date, by acceleration or otherwise), of Buyer’s obligations
under the provisions of the Deerfield Agreement set forth on
Appendix A. Buyer and the Deerfield Parties acknowledge that the
Purchased Assets constitute the FSC Assets Collateral for purposes
of Buyer’s obligations under the provisions of the Deerfield
Agreement set forth on Appendix A (including, without limitation,
Sections 1.7(b) and (c)).
6. Deerfield Consent and Limited
Waiver. The Deerfield Parties hereby (i) consent to the
Asset Purchase and Cerecor and Buyer’s entry into the APA for
all purposes, (ii) represent and warrant to Cerecor and Buyer that
to the actual knowledge of Steelman and Flynn no breach of the
Deerfield Agreement exists as of the date hereof and no such breach
will occur as a result of the consummation of the Asset Purchase,
(iii) agree that the Asset Purchase is not, and will not be deemed
to be, an Acceleration Trigger Event, (iv) irrevocably waive all
rights with respect to Section 1.6(g) of the Deerfield Agreement
only in connection with the Asset Purchase (but not any future
events), (v) irrevocably waive, discharge and release Cerecor and
Buyer from any claim that Cerecor or Buyer is in breach of Section
1.6(g) of the Deerfield Agreement only as a result of the Asset
Purchase (but not any future events), (vi) agree that the
provisions of the Deerfield Agreement set forth on Appendix A hereto (as such obligations
may be expressly modified therein with respect to the Deferred
Consideration and each Deferred Payment related thereto), and all
obligations of Cerecor arising thereunder, are assigned to Buyer,
and (vii) agree that if (a) Buyer is current in its payment
obligations to the Deerfield Parties and (b) makes a payment
to the Deerfield Parties in advance of such payment being due and
payable (a “Prepayment”), then Buyer
may designate whether such Prepayment is deemed to be a Fixed
Payment or a Deferred Payment.
7. Avadel Consent and Release. In
accordance with Section 7.6 of the Prior APA, Avadel hereby (a)
consents to Cerecor’s assignment to Buyer of all
Cerecor’s rights, interests and obligations under the Prior
APA and Cerecor and Buyer’s entry into the APA for all
purposes, and (b) represents and warrants to Cerecor and Buyer that
to the actual knowledge of Avadel no breach of the Prior APA exists
as of the date hereof and no such breach will occur as a result of
the consummation of the Asset Purchase. Avadel, on behalf of itself
and its Affiliates, hereby releases Cerecor from all obligations
under the Prior APA. Avadel further acknowledges and agrees to the
modification of the payment terms with respect to the Deferred
Consideration and Deferred Payments pursuant to the APA and agrees
that such modification is hereby incorporated into the terms of the
Deerfield Agreement, subject to the guarantee of such obligations
by Armistice pursuant to the Armistice Guarantee. Avadel also
acknowledges and agrees that its Guarantee (the “Avadel Guarantee’) issued
on February 16, 2018, in favor of the Deerfield Parties remains in
full force and effect notwithstanding the assignment of the
Obligations (as defined in the Avadel Guarantee) to Buyer and the
modification of the payment terms with respect to the Deferred
Consideration and Deferred Payments.
8. No Breach. Cerecor hereby
represents and warrants that no breach of the Deerfield Agreement
exists as of the date hereof.
9. No Modification. Except as
amended, waived or consented to hereby, the Deerfield Agreement
remains unmodified and in full force and effect.
10. Successors and Assigns. The
provisions of this Waiver will inure to the benefit of and be
binding on each of the Deerfield Parties, Cerecor and Buyer and
their permitted assigns (if any).
11. Governing Law. This Waiver
shall be governed by, and construed, interpreted and enforced in
accordance with, the laws of the Delaware. Any legal action or
proceeding with respect to this Waiver will be brought solely and
exclusively in any state or federal court of competent jurisdiction
in Delaware. By execution and delivery of this Waiver, each party
hereto hereby irrevocably consents to and accepts, for itself and
in respect of its property, generally and unconditionally the sole
and exclusive jurisdiction of such courts. Each party hereto hereby
further irrevocably waives any objection, including any objection
to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of
any action or proceeding in such jurisdiction in respect of this
Waiver.
12. Notice. Each party and express
beneficiary irrevocably consents to the service of process out of
any of the courts referred to in this Waiver in any such suit,
action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to it at its address set forth
in the Deerfield Agreement, or with respect to Cerecor, to:
Cerecor, Inc., 540 Gaither Road, Suite 400, Rockville, Maryland
20850, attention: Joe Miller, via email: jmiller@cerecor.com, with
a copy (that does not constitute notice) to Wyrick Robbins Yates
& Ponton LLP, 4101 Lake Boone Trail, Suite 300, Raleigh, North
Carolina 27607, attention: Don Reynolds, via email:
dreynolds@wyrick.com, or with respect to Buyer, to: Aytu
BioScience, Inc., 373 Inverness Parkway, Suite 206, Englewood,
Colorado 80112, attention: David Green, CFO, via email:
dgreen@aytubio.com, with a copy (that does not constitute notice)
to Dorsey & Whitney, 111 S Main Street, Suite 2100, Salt Lake
City, UT 84111, attention: Nolan Taylor, or with respect to
Armistice, to: Armistice Capital Master Fund, Ltd., 510 Madison
Avenue, 22nd Floor, New York, NY
10022, attention: Anthony Cordone, via email:
acordone@armisticecapital.com. Each party irrevocably waives any
objection to such service of process and further irrevocably waives
and agrees not to plead or claim in any suit, action or proceeding
commenced hereunder that service of process was in any way invalid
or ineffective. Nothing herein shall affect the right of a party to
serve process on the other party in any other manner permitted by
law.
13. Counterparts. This Waiver may
be executed in any number of counterparts, and by different parties
hereto in separate counterparts, each of which when so delivered
shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument. Any counterpart may be
executed by facsimile or pdf signature and such facsimile or pdf
signature shall be deemed an original.
14.
Disclosure.
On or before 8:00 a.m.,
New York time, on the business day immediately following the date
hereof, Buyer shall file a
Current Report on Form 8-K meeting all of the requirements of Item
1.01 thereof, which Form 8-K shall disclose the closing of the
transactions contemplated by the APA, disclose all the material
terms of the transactions contemplated by this Waiver and the
Guarantees (and any previously undisclosed terms of the APA) and
shall attach each of the APA (to the extent not previously publicly
filed), this Waiver and the Guarantees, in each of their
entireties. Each of Avadel, Cerecor, and Buyer (each a
“Disclosing Party”) expressly acknowledges, represents
and agrees that after such filing, (i) all material, non-public information
(if any) provided or made available to the Deerfield Parties and
their affiliates (and their respective agents and representatives)
by such Disclosing Party or any of its officers, directors,
employees, affiliates or agents in connection with the transactions
contemplated by the APA, the Prior APA, this Waiver, the Guarantees, or
otherwise prior to the date hereof, shall have been publicly
disclosed. and (ii) that from and after such filing, the
Deerfield Parties and their affiliates (and their respective agents
and representatives) shall not have any duty to any Disclosing
Party of trust or confidence with respect to, or a duty to any
Disclosing Party not to trade in any securities on the basis of,
any information regarding such Disclosing Party (unless expressly
agreed to by such Deerfield Party in a written definitive and
binding and binding agreement executed by such Disclosing Party and
Deerfield Party or customary oral (confirmed by e-mail) “wall
cross” agreement).
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties hereto have executed this Consent and
Limited Waiver Agreement as of the day and year first above
written.
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DEERFIELD
PARTIES:
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Deerfield
CSF, LLC
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By:_________________________________
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Name:_______________________________
Title:________________________________
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____________________________________
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Peter
Steelman
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____________________________________
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James
Flynn
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[Signature
Page to Consent, Release and Limited Waiver Agreement]
AVADEL:
Avadel
U.S. Holdings, Inc.
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By:
____________________________________
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Name: ____________________________________
Title:
____________________________________
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[Signature
Page to Consent, Release and Limited Waiver Agreement]
ARMISTICE
Armistice
Capital Master Fund, Ltd.
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By:
____________________________________
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Name: ____________________________________
Title:
____________________________________
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[Signature
Page to Consent, Release and Limited Waiver Agreement]
CERECOR:
Cerecor
Inc.
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By:
____________________________________
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Name: ____________________________________
Title:
____________________________________
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[Signature
Page to Consent, Release and Limited Waiver Agreement]
BUYER:
Aytu
BioScience, Inc.
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By:
____________________________________
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Name: ____________________________________
Title:
____________________________________
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BUYER
SUBSIDIARY:
Aytu
Therapeutics LLC
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By:
____________________________________
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Name: ____________________________________
Title:
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[Signature
Page to Consent, Release and Limited Waiver Agreement]
Schedule I
Fixed Payments
TRANSITION SERVICES AGREEMENT
This
Transition Services Agreement (this “Agreement”), dated as of
November 1, 2019 (the “Effective Date”), is made
by and between Aytu Bioscience, Inc., a Delaware
corporation (“Buyer”) and Cerecor,
Inc., a Delaware corporation (“Seller”). All capitalized
terms used herein (or in any schedule) but not defined herein have
the meanings given to them in the Purchase Agreement (defined
below).
Recitals
A. Buyer and Seller
are parties to an Asset Purchase Agreement, dated as of October 10,
2019, (the “Purchase
Agreement”), under which Buyer agreed to purchase from
Seller certain assets of Seller used in the operation of the
Business.
B. In connection
with the Purchase Agreement and transactions contemplated thereby,
and for purposes of easing the transition of the Business to Buyer
and minimizing interruptions to the continuing operations of
Seller, the parties have agreed to enter into this Agreement for
the purpose of providing certain transition services to each
other.
Agreement
In
consideration of the mutual covenants contained herein, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Buyer and Seller agree:
1. Transition
Services.
(a) Applicable
Transition Services. Upon the terms
and subject to the conditions contained herein and in the Schedules
hereto, Seller shall provide, or cause its Affiliates to provide,
to Buyer the services described on Schedule A-1 and Schedule A-3 (together with the
services described in the other provisions of this Agreement that
Seller is obligated to provide to Buyer, collectively, the
“Seller-Provided
Services”) and Buyer shall provide, or cause its
Affiliates to provide, to Seller the services described on
Schedule A-2 and
Schedule A-3
(together with the services described in the other provisions of
this Agreement that Buyer is obligated to provide to Seller
collectively, “Buyer-Provided Services,”
and together with the Seller-Provided Services, the
“Transition
Services,” it being understood that the services
described on Schedule
A-3 are mutual services that each party will provide to the
other). The parties agree to negotiate in good faith the provision
of any additional related services reasonably requested by Buyer to
be provided by Seller, or by Seller to be provided by Buyer,
including any applicable pricing. Any such additional services so
provided by Seller or Buyer, as applicable, shall constitute
Transition Services under this Agreement and be subject to this
Agreement as if fully set forth on Schedule A-1, Schedule A-2, or Schedule A-3, as applicable,
beginning as of the commencement of such additional services.
During the first three (3) months following Closing, Buyer will
provide the Transition Services free of charge. Thereafter, Seller
will pay Buyer for any continuing Buyer-Provided Services related
to the continued commercialization of the Excluded Products at the
rate specified in Schedule A-2. The Transition Services provided by
Sellers will be free of charge throughout the term of this
agreement.
(b) Non-Assignable
Assets. In connection
with the Transition Services, the parties agree that Buyer and
Seller shall use, each at its own cost and expense, commercially
reasonable efforts to enter into such arrangements (such as
subleasing, sublicensing or subcontracting) to provide to the
parties the economic and, to the extent permitted under applicable
law, operational equivalent of the transfer to Buyer of those
Purchased Assets and Assumed Liabilities that cannot be transferred
to Buyer following the Closing, each as described on Schedule B hereto
(collectively, the “Non-Assignable Assets”).
To the extent permitted under applicable Law, Seller shall hold for
the benefit of Buyer, and pay to Buyer promptly upon receipt
thereof, such Purchased Assets and all income, proceeds and other
monies received by Seller to the extent related to such Purchased
Assets for the post-Closing period in connection with the
arrangements under this Agreement. Notwithstanding anything herein
to the contrary, the provisions of this Section 1(b) shall not apply to any
consent or approval required under any antitrust, competition or
trade regulation law.
(c) Excluded Assets. In connection
with the Transition Services, the parties agree that Buyer and
Seller shall use, each at its own cost and expense, commercially
reasonable efforts to enter into such arrangements (such as
subleasing, sublicensing or subcontracting) to provide to the
parties the economic and operational equivalent of the retention of
the Excluded Assets and Excluded Liabilities by Seller. To the
extent permitted by applicable Law, Buyer shall hold for the
benefit of Seller, and pay to Seller promptly upon receipt thereof,
such Excluded Assets and all income, proceeds, and other monies
received by Buyer to the extent related to such Excluded Assets for
the post-Closing period in connection with the arrangements under
this Agreement.
(d) Subcontracting
of Transition Services. Each party agrees
that Seller may, without Buyer’s consent, provide any or all
of such Seller-Provided Services, in whole or in part, directly or
through one or more of Seller’s Affiliates or third-party
subcontractors. Seller shall in all cases retain responsibility for
any Seller-Provided Services to be performed by any subcontractor
or any of its Affiliates. Each party agrees that Buyer may, without
Seller’s consent, provide any or all of such Buyer-Provided
Services, in whole or in part, directly or through one or more of
Buyer’s Affiliates or third-party subcontractors. Buyer shall
in all cases retain responsibility for any Buyer-Provided Services
to be performed by any subcontractor or any of its
Affiliates.
(e) Standards
for Transition Services. Except as
otherwise set forth on Schedule A-1, Seller shall
provide the Seller-Provided Services to Buyer in a commercially
reasonable manner reasonably consistent with how such
Seller-Provided Services were performed in the ordinary course by
Seller or its Affiliates regarding the Business prior to the
Closing Date. Except as otherwise set forth on Schedule A-2, Buyer shall
provide the Buyer-Provided Services to Seller in a commercially
reasonable manner as if Buyer were performing the services for its
own benefit.
(f) No Representations or
Warranties. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PARTIES MAKE
NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE TRANSITION
SERVICES AND HEREBY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE PARTIES
SHALL HAVE NO LIABILITY IN RELATION TO THE TRANSITION SERVICES
(EXCEPT IN THE CASE OF ANY BREACH OF CONFIDENTIALITY) FOR ANY
PUNITIVE, EXEMPLARY, OR INCIDENTAL DAMAGES EVEN IF THEY HAVE BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(g) Key
Contacts. During the term
of this Agreement (including any extensions thereof), the parties
shall each appoint primary and secondary contacts for purposes of
coordinating the provision of Transition Services under this
Agreement. Each party shall provide the other party with the name
and contact information of a senior level employee who will serve
as the primary point of contact for such party regarding Transition
Services (referred to herein as the “Primary Employee” of
Seller or Buyer, respectively), and another senior level employee
to serve as a secondary point of contact for such party regarding
Transition Services and an alternative point of contact if the
Primary Employee is unavailable (referred to herein as the
“Secondary
Employee” of Seller or Buyer,
respectively).
(h) Cooperation.
The parties will cooperate, and will cause their respective
Affiliates, officers, employees, agents, and representatives to
cooperate, to provide such information, and to take such actions in
good faith and as may be reasonably required to assist each other
to implement or give effect to this Agreement.
(i) No
Assignment of Property or Rights. This Agreement
shall not constitute an assignment, sale or transfer of any
technology, third-party agreements, intellectual property, licensed
rights, or other property of Seller, Buyer or any of their
respective Affiliates.
(j) Additional Services.
Notwithstanding anything to the contrary herein, this Agreement
does not apply to the services that are expressly agreed to be
provided by, or the other obligations of, a particular party (or
any of its subsidiaries) pursuant to the Purchase Agreement or any
commercial agreement.
2. Access.
(a) To enable the
provision or obtain the benefit of the Transition Services, during
the Term each party will provide to the other party, their
Affiliates, employees and any third-party service providers or
subcontractors that perform the Transition Services, upon
reasonable advance notice and at reasonable business hours, with
access to the facilities of such party, in all cases to the extent
necessary for the parties to fulfill their obligations under this
Agreement. When on the property of a party or when given access to
any equipment or files owned or controlled by such party, the other
party shall conform to (and its access shall be subject to) the
policies and procedures of such party concerning health, safety and
security made known to the other party in advance and such other
party shall cause its Affiliates, employees, and third-party
subcontractors to do likewise.
(b) During the Term,
Seller shall provide Buyer with reasonable access (which shall not
unreasonably interfere with the business of Seller), upon
reasonable written notice and during normal business hours, to the
management and other personnel of Seller for the purpose of (i)
discussing all reasonable inquiries regarding the Purchased Assets
or the Business and (ii) providing such other assistance as Buyer
may reasonably request related to the sale, conveyance, delivery,
transfer and assignment of the Purchased Assets
3. Grant of License.
(a) Seller
hereby grants (on behalf of itself and its relevant Affiliates) to
Buyer a limited, royalty-free, world-wide, fully paid-up,
non-exclusive, sublicensable right and license to use, display, and
reproduce the marks “Avadel®”,
“Zylera™”, “Zylera
Pharmaceuticals®” and “Cerecor®” (in
each case, in word and/or logo form) (the “Trademarks”), if needed
in connection with the conduct of the Business by Buyer for the
period beginning on the Closing Date and ending on the date that is
the later of 180 days following the Closing Date or the expiration
of any currently labeled product. Buyer shall use commercially
reasonable efforts to develop its own marketing, promotional and
sales materials for the Purchased Assets as soon as reasonably
possible following the Closing Date. Buyer may use, display, and
reproduce the Trademarks for other purposes if Buyer submits a
written consent to Seller and Seller consents to the additional use
(which consent Seller may not withhold unreasonably).
(b) Buyer agrees that:
(i) Seller retains full ownership of the Trademarks and the
goodwill associated with the Trademarks; and (ii) Buyer shall
acquire no rights in the Trademarks other than those rights
expressly granted pursuant to and during the term of this
Agreement. In connection with its use of the Trademarks as
authorized herein, Buyer will use commercially reasonable efforts
to comply with any applicable written trademark usage guidelines of
which Seller has notified Buyer, and to assure that the quality of
Products commercialized by Buyer under the Trademarks will be
materially consistent with the quality of such Products as
commercialized by Seller prior to the Closing.
(c) Buyer agrees to
keep accurate information concerning transactions relating to the
use of the Trademarks. Seller and its authorized representatives
shall have the right to examine and copy such information upon at
least ten days’ prior written notice.
(d) THE TRADEMARKS ARE
LICENSED AS IS. SELLER MAKES NO WARRANTIES REGARDING THE
TRADEMARKS, EXPRESS OR IMPLIED, ARISING BY STATUTE OR OTHERWISE IN
LAW, OR FROM A COURSE OF DEALING, OR USAGE OF TRADE INCLUDING, BUT
NOT LIMITED TO, THE WARRANTY OF TITLE, THE IMPLIED WARRANTY OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. SELLER SHALL
NOT HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SAVINGS, OR FOR
CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES RELATED TO THE
LICENSE OF THE TRADEMARKS HEREUNDER EVEN IF IT HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
(e) It is the
parties’ understanding and belief that following the Closing,
Seller and its Affiliates do not own or Control any Intellectual
Property Rights, other than the Trademarks, that would necessarily
be infringed by, or that are otherwise reasonably necessary for,
Buyer’s conduct of the Business (such Intellectual Property
Rights, “Necessary
IP”). Notwithstanding the foregoing, and without
implying any limitation in the scope or content of the Purchased
Assets, in the event and to the extent that any Necessary IP is
discovered to be owned or Controlled by Seller or its Affiliates
after Closing, upon Seller’s written consent (which consent
will not be unreasonably withheld), Seller will grant (on behalf of
itself and its Affiliates) to Buyer a limited, royalty-free,
world-wide, fully paid-up, non-exclusive, sublicensable right and
license to use, practice, and exploit such Necessary Retained IP
solely in connection with Buyer’s conduct of the Business for
a term to be reasonably determined by Seller.
4. Force
Majeure.
(a) A party shall not
be deemed to have breached this Agreement for any failure of
performance attributable to acts, events or causes beyond such
party’s control to the extent that they prevent or delay in
whole or in part performance by such party, including war, riot,
rebellion, terrorism, civil disturbances, power failures, failure
of telephone lines and equipment, flood, storm, fire, earthquake,
or other acts of God or conditions or events of nature
(“Force Majeure
Events”). The obligations of each party under this
Agreement regarding any Transition Services shall be suspended
during the period and to the extent that a party is prevented or
hindered from providing such Transition Service, or a party is
prevented or hindered from receiving such Transition Service, due
to a Force Majeure Event.
(b) Buyer may, by
written notice to Seller, terminate any Seller-Provided Services
(in addition and without prejudice to its rights to terminate this
Agreement in accordance with Section 5 or Section 9) and perform such
Seller-Provided Services internally or engage one or more third
parties to provide such Seller-Provided Services during the
occurrence of a Force Majeure Event if after five (5) days (or a
shorter period if a lack of Seller-Provided Services beyond such
shorter period could substantially impair Buyer’s operations
or interests) Seller remains unable to perform such Seller-Provided
Services due to the Force Majeure Event. Each party shall
reasonably cooperate with the other party and any third parties
designated by Buyer to provide such replacement Seller-Provided
Services; provided,
that the other provisions of this Agreement shall remain in full
force and effect.
(c) Seller may, by
written notice to Buyer, terminate any Buyer-Provided Services (in
addition and without prejudice to its rights to terminate this
Agreement in accordance with Section 5 or Section 9) and perform such
Buyer-Provided Services internally or engage one or more third
parties to provide such Buyer-Provided Services during the
occurrence of a Force Majeure Event if after five (5) days (or a
shorter period if a lack of Buyer-Provided Services beyond such
shorter period could substantially impair Seller’s operations
or interests) Buyer remains unable to perform such Buyer-Provided
Services due to the Force Majeure Event. Each party shall
reasonably cooperate with the other party and any third parties
designated by Seller to provide such replacement Buyer-Provided
Services; provided,
that the other provisions of this Agreement shall remain in full
force and effect.
5. Events of
Default. A party will be
in default only if (a) such party commits a breach of any term
or condition of this Agreement and such party receives written
notice thereof from the other party; (b) there is a filing of
an involuntary case for the entry of relief against such party
under any bankruptcy, insolvency or similar Law for the relief of
debtors and such case remains undismissed for ninety (90) days
or more; (c) a trustee or receiver is appointed for such party
or its assets or any substantial part thereof; or (d) such
party files a voluntary petition under any bankruptcy, insolvency
or similar Law for the relief of debtors. Upon a default by a
party, the other party may terminate this Agreement by written
notice and/or pursue any and all remedies available to it under
applicable Law based on such default. Either party’s failure
to send a notice of default or to pursue legal remedies available
to it shall not constitute or be construed as a waiver or
acquiescence, and each party expressly reserves the right to
subsequently pursue such remedies for the same or any other
default, either of the same or different character. Notwithstanding
the foregoing, if a default occurs, prior to any party terminating
this Agreement and/or pursuing any and all remedies available to it
under applicable Law, the defaulting party shall have fifteen
(15) days after giving written notice of such default by the
non-defaulting party to cure such default.
6. Mutual Confidentiality
Covenants.
(a) Subject to the
exceptions set forth below in this Section 6(a), and further
subject to the provisions of Section 6(c), each party shall
not, and each party shall ensure that such party’s Affiliates
do not, disclose, directly or indirectly, nor use for any purpose
other than the provision or receipt of Transition Services, any
documents, work papers or other materials of a confidential or
proprietary nature (“Confidential
Information”) related to the other party or any of its
Affiliates and shall have all such Confidential Information kept
confidential in accordance with its past practices; provided, however, that such party may
disclose or use any such Confidential Information (a) that was
in the public domain at the time of its disclosure by the other
party or thereafter becomes part of the public domain by
publication or otherwise subsequent to the time of disclosure by
the other party under this Agreement, (b) that is
independently developed by the receiving party without use of the
other party’s Confidential Information, (c) that the
other Party has approved for unrestricted disclosure in writing,
(d) that is furnished to the receiving party by a third party
having the authority to disclose such Confidential Information and,
to the knowledge of the receiving party, the disclosure of such
Confidential Information by the third party to the receiving party
is not subject to a confidentiality obligation, or (e) that is
required to be included in any filings made with the U.S.
Securities and Exchange Commission (the “Commission”) pursuant to
the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended (which, for the avoidance of doubt, shall
include filing a copy of this Agreement with the Commission,
redacted to protect sensitive information to the extent requested
by either party and allowed by the Commission). Notwithstanding the
foregoing, if a party or its Affiliates becomes legally compelled
to disclose any such Confidential Information by any Governmental
Entity or if such party or any of its Affiliates is required to
disclose in order to avoid violating any Law, such party or its
Affiliates may disclose such Confidential Information but only
after, if applicable or relevant, it has used commercially
reasonable efforts to afford the other party, at such other
party’s sole cost and expense, the opportunity to obtain an
appropriate protective order, or other satisfactory assurance of
confidential treatment, for the Confidential Information required
to be disclosed; provided, however, that such party may
only disclose such Confidential Information to the extent necessary
to comply with applicable Law or regulation, or to enforce its
obligations under this Agreement.
(b) Upon the expiration
of the applicable Term (as defined below), upon the disclosing
party’s request, the receiving party shall promptly either
return, destroy or erase (including expunging all Confidential
Information from any computer, server or other device containing
such information) all Confidential Information (including all
copies, reproductions, summaries, analyses or extracts thereof or
based thereon) in the possession or control of the receiving party
or any of its representatives (and, in the case of destruction or
erasure, provide to the disclosing party a certificate addressed to
the disclosing party confirming such destruction or erasure).
Notwithstanding any such return, destruction or erasure of the
Confidential Information, the receiving part and its
representatives (a) may retain the Confidential Information to
comply with applicable law or bona fide internal record-keeping
policies and (b) shall not be required to erase or expunge any
Confidential Information residing on the receiving party’s
automatic electronic backup or archival systems to the extent
impracticable; provided, that the receiving
party and its representatives shall continue to be bound by the
obligations of confidentiality and use hereunder until the sooner
of the time such Confidential Information is returned or destroyed
in accordance herewith or the two year anniversary of the
expiration of the applicable Term.
(c) The foregoing
provisions of this Section 6 will not be construed as
creating exceptions to, or otherwise limiting or diminishing, the
obligations and restrictions imposed upon Seller under Section 5.1
of the Purchase Agreement in relation to Confidential Information
as defined therein, nor as imposing any obligations or restrictions
upon Buyer, or limiting or diminishing Buyer’s rights, in
relation to Confidential Information as defined in Section 5.1 of
the Purchase Agreement. For clarity, however, Buyer hereby consents
to Seller’s use of relevant Confidential Information as
defined in Section 5.1 of the Purchase Agreement during the
applicable Term for the purposes of providing the Seller-Provided
Services and receiving the Buyer-Provided Services in accordance
with this Agreement.
7. Indemnification. Each party
agrees to indemnify, defend and hold the other party and its
officers, directors, agents, Affiliates, and their respective
successors and permitted assigns, harmless from and in respect of
any and all actual losses, damages, costs and reasonable expenses
(including, without limitation, reasonable legal expenses)
(individually a “Loss” and collectively,
“Losses”) that they may
incur arising out of or due to the breach of any covenant,
undertaking or other agreement of the indemnifying party contained
in this Agreement, or fraud or willful misconduct of the
indemnifying party, except that the parties shall have no liability
in relation to the Transition Services (except in the case of any
breach of confidentiality) for any punitive, exemplary, or
incidental damages or Losses even if they have been advised of the
possibility of such damages or Losses.
(a)
Each
party shall keep accurate and complete books and records relating
to the Transition Services in compliance with applicable Law and,
subject to Section
8(e) of this
Agreement, such party’s record management practices.
Following the termination of this Agreement, each party shall keep
accurate and complete books and records relating to the Transition
Services in compliance with applicable Law and, subject to
Section
8(e) of this
Agreement, such party’s record management
practices.
(b) Following the
Effective Date, each party shall afford, and will cause its
Affiliates to afford, to the other party and any of its Affiliates,
counsel, accountants or designated representatives, at such other
party’s expense, during normal business hours, the right to
examine and make copies of the books and records relating to the
Transition Services for such period as this Agreement is in effect
or for as long thereafter as required by applicable Law or any
rights or obligations of any party survives or to the extent that
such access may be required by the requesting party in connection
with (i) the preparation of financial statements, (ii) responding
to regulatory inquiries or other regulatory purposes, (iii) the
preparation of tax returns or in connection with any audit, amended
return, claim for refund or any proceeding with respect thereto,
(iv) the investigation, arbitration, litigation and final
disposition of any claims that may have been or may be made against
the party (or its Affiliates), as the case may be, in connection
with the party’s business or which such party (or its
Affiliates), as the case may be, may make with respect to the
Transition Services, (v) compliance with the party’s
respective obligations under this Agreement, and (vi) as the
parties otherwise mutually agree. Notwithstanding anything to the
contrary in the this Agreement, neither party will be required to
provide access to any information that is protected by
attorney-client privilege, attorney work product, or similar
theories of confidentiality.
(c) If and to the
extent required by Section 1395(x)(v)(1)(I) of Title 42 of the
United States Code, until the expiration of four (4) years after
the furnishing of Transition Services under this Agreement, each
party shall make available to the Secretary of the U.S. Department
of Health and Human Services, the U.S. Comptroller General, or any
of their duly authorized representatives, upon written request, a
copy of this Agreement and such books, documents and records as are
necessary to verify the nature and extent of the costs incurred by
a party with respect to such Transition Services for which payment
may be made under Title XVIII or XIX of the United States Social
Security Act.
(d) If any party
carries out any of the duties of this Agreement through a
subcontract, with a value or cost of ten thousand dollars ($10,000)
or more over twelve (12) months with a related organization, such
subcontract shall contain a clause to the effect that until the
expiration of four (4) years after the furnishing of such
Transition Services pursuant to such subcontract, the related
organization shall make available, upon written request by the
Secretary of the U.S. Department of Health and Human Services or
the Comptroller General of the United States, or any their duly
authorized representatives, the subcontract and books, documents
and records of such organization that are necessary to verify the
nature and extent of the cost of Transition Services provided
pursuant to such subcontract.
(e) Each party will
not, and will cause its Affiliates to not, dispose of, alter or
destroy any such books and records relating to the Transition
Services except in accordance with each party’s respective
record retention policies or as otherwise provided in the Purchase
Agreement.
(a) Term. Except as otherwise
stated in Schedule
A-1, Schedule
A-2, or Schedule
A-3 for any particular Transition Services (including the
18-month term in respect of the Buyer-Provided Services related to
the commercialization of Millipred), the initial term of this
Agreement shall commence on the Effective Date and end on the first
anniversary thereof, unless earlier terminated in accordance with
Section
5 above or
Section
9(b) below;
provided,
however, that if
either party wishes to extend the initial term for which it will
receive any of the Transition Services hereunder beyond the initial
term (as stated above or, where applicable, as specified in
Schedule A-1,
Schedule A-2, or
Schedule A-3 for
the particular Transition Services), the parties shall, upon such
party’s request, enter into good faith negotiations at least
three (3) months prior to the termination of the initial term,
which initial term may then be extended upon mutual agreement for
such Transition Services for an additional period not to exceed
twelve (12) months from the scheduled initial expiration of the
initial term for such Transition Services (the foregoing time
periods, as the case may be, including any applicable extension,
referred to herein as the applicable “Term”).
(b) Termination of Seller-Provided
Services. Any particular Seller-Provided Service may be
terminated by Buyer when it determines such Seller-Provided Service
is no longer needed; provided, that except as
otherwise provided in Schedule A-1, Buyer shall give Seller at
least fifteen (15) days’ prior written notice specifying the
date that such termination is to be effective (or such shorter
notice as may be agreed upon by Buyer and Seller). Notwithstanding
the foregoing, no prior notice period is required to terminate any
Seller-Provided Service for which the transition of such
Seller-Provided Service has been completed (that is, where Seller
has ceased providing such Seller-Provided Services in accordance
with Buyer’s confirmation that they are no longer needed or
are being performed by Buyer or a third party that it has engaged
directly), which termination shall be effective immediately upon
receipt of such notice by Buyer.
(c) Termination of Buyer-Provided
Services. Any particular Buyer-Provided Service may be
terminated by Seller when it determines such Buyer-Provided Service
is no longer needed; provided, that except as
otherwise provided in Schedule A-2, Seller shall give
Buyer at least fifteen (15) days’ prior written notice
specifying the date that such termination is to be effective (or
such shorter notice as may be agreed upon by Buyer and Seller).
Notwithstanding the foregoing, no prior notice period is required
to terminate any Buyer-Provided Service for which the transition of
such Buyer-Provided Service has been completed (that is, where
Buyer has ceased providing such Buyer-Provided Services in
accordance with Seller’s confirmation that they are no longer
needed or are being performed by Seller or a third party that it
has engaged directly), which termination shall be effective
immediately upon receipt of such notice by Seller.
10. Amendments
and Waiver. This Agreement
may not be amended, modified or supplemented in any manner, whether
by course of conduct or otherwise, except by written agreement
signed by each party. No failure or delay of either party in
exercising any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce
such right or power, or any course of conduct, preclude any other
or further exercise thereof or the exercise of any other right or
power. Any agreement by a party to any extension or waiver of any
provision of this Agreement will be valid only if set forth in an
instrument in writing signed by each party. A waiver by a party of
the performance of any provision hereof will not be construed as a
waiver of any other provision. THE PROVISIONS OF THIS AGREEMENT
SHALL IN NO WAY MODIFY OR AMEND, OR BE CONSTRUED TO MODIFY OR
AMEND, ANY TERMS OR CONDITIONS OF THE PURCHASE
AGREEMENT.
11. Notices. All notices,
requests, demands, waivers and other communications required or
permitted to be given under this Agreement to any party hereunder
shall be in writing and shall be deemed duly given upon
(a) personal delivery, (b) confirmed delivery by a
standard overnight carrier or when delivered by hand or (c) five
(5) Business Days after the date mailed in the United States by
certified or registered mail, return receipt requested, postage
prepaid, addressed at the following addresses (or at such other
address for a party as shall be specified by notice given
hereunder):
Aytu
Bioscience, Inc.
373
Inverness Parkway, Suite 206
Englewood, CO
80112
Email:
dgreen@aytubio.com
Attention: David
Green, Chief Financial Officer
with a
copy (which shall not constitute notice) to:
Dorsey
& Whitney LLP
111 S.
Main St., Suite 2100
Salt
Lake City, UT 84111
Email:
taylor.nolan@dorsey.com
Attention: Nolan
Taylor
Cerecor,
Inc.
540
Gaither Road, Suite 400
Rockville, MD
20850
Email:
jmiller@cerecor.com
Attention: Joseph
Miller, Chief Financial Officer
with a
copy (which shall not constitute notice) to:
Wyrick
Robbins Yates & Ponton LLP
4101
Lake Boone Trail, Suite 300
Raleigh, NC
27607
Email: dreynolds@wyrick.com;
dcreekman@wyrick.com
Attention: Don
Reynolds and David Creekman
or to
such other representative or at such other address as such party
may furnish to the other parties in writing.
12. Interpretation.
When a reference is made in this Agreement to a Section or Schedule
such reference shall be to a Section or Schedule of this Agreement
unless otherwise indicated. The headings contained in this
Agreement or in any Schedule are for convenience of reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All words used in this Agreement
will be construed to be of such gender or number as the
circumstances require. All Schedules annexed hereto or referred to
herein are hereby incorporated in and made a part of this Agreement
as if set forth herein. The word “including” and words
of similar import when used in this Agreement will mean
“including, without limitation,” unless otherwise
specified.
13. Counterparts.
This Agreement may be executed in any number of counterparts, each
of which when executed, shall be deemed to be an original and all
of which together will be deemed to be one and the same instrument
binding upon each of the parties hereto notwithstanding the fact
that each party is not signatory to the original or the same
counterpart. For purposes of this Agreement, facsimile signatures
and electronically delivered signatures shall be deemed
originals.
14. Entire
Agreement. This Agreement
(including the Schedules) constitutes the entire agreement
regarding Transition Services, and supersedes all prior written
agreements, arrangements, communications and understandings and all
prior and contemporaneous oral agreements, arrangements,
communications and understandings between the parties with respect
to the subject matter hereof; provided, however, that this Agreement
shall not supersede, modify or amend the Purchase Agreement in any
respect.
15. Severability.
If any term or other provision of this Agreement is finally
adjudicated by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced by any law or public policy,
all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. Upon
such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
16. Governing
Law. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE
GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
(a) Each Party
irrevocably submits to the exclusive jurisdiction of the Delaware
Court of Chancery or in the event (but only in the event) that such
court does not have subject matter jurisdiction, in any federal
court within the State of Delaware, for the purposes of any suit,
action or other proceeding arising out of this Agreement. Each
Party agrees to commence any such action, suit or proceeding either
in the Delaware Court of Chancery or if such suit, action or other
proceeding may not be brought in such court for jurisdictional
reasons, in any federal court within the State of Delaware. Each
Party further agrees that service of any process, summons, notice
or document by the U.S. registered mail to such Party’s
respective address set forth above shall be effective service of
process for any action, suit or proceeding in Delaware with respect
to any matters to which it has submitted to jurisdiction in this
Section
17. Each Party
irrevocably and unconditionally waives any objection to the laying
of venue of any action, suit or proceeding arising out of this
Agreement in (x) the Delaware Court of Chancery, and (y) any
federal court within the State of Delaware, and hereby and thereby
further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an
inconvenient forum.
(b) EACH PARTY WAIVES
ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY. Each Party (i) certifies
that no representative, agent or attorney of the other Party has
represented, expressly or otherwise, that such Party would not, in
the event of any action, suit or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other Party
has been induced to enter into this Agreement, by, among other
things, the mutual waiver and certifications in this Section 17(b).
18. Assignment.
Neither this Agreement, nor any rights hereunder, may be assigned
by any party (in whole or in part) without the prior written
consent of the other party hereto, except that Seller may assign
its rights to receive the Buyer-Provided Services to a third-party
purchaser of Seller’s rights and assets in respect of
Millipred upon Buyer’s prior written consent (which consent
shall not be unreasonably withheld, conditioned or delayed);
provided that any such assignment shall not result in a significant
increase in the service levels provided hereunder as compared to
historical levels (i.e., that service levels do not significantly
change as a result of such third-party purchase).
19. No
Third Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and their successors and
permitted assigns, and nothing herein expressed or implied shall
give or be construed to give to any person, other than the parties
hereto and such successors and assigns, any legal or equitable
rights hereunder.
20. Independent Contractor. For all
purposes hereof, except as explicitly set forth herein, or as
necessary to provide the Transition Services, each party shall at
all times solely act as an independent contractor and Seller, on
the one hand, and Buyer, on the other hand, shall not be deemed an
agent, lawyer, employee, representative, joint venture or fiduciary
of one another, nor shall this Agreement or the Transition Services
or any activity or any transaction contemplated hereby, or any
commission or omission by any party, be deemed to create any
partnership, joint venture, agency or employment between the
parties or among their Affiliates.
21.
Dispute
Resolution. The Primary
Employee for each of Seller and Buyer shall work together in good
faith to promptly and fully resolve any disputes arising out of or
related to this Agreement or the relationship between the parties.
Any dispute hereunder which cannot be resolved by the Primary
Employee for each of Seller and Buyer within thirty (30) days may
be escalated by either party and in its reasonable discretion, to
an executive officer of each party empowered to resolve such
matter, which executive officers shall meet and attempt in good
faith to resolve such matter prior to pursuit of other
remedies.
22. Survival. Sections 1(f), 3(e), 6 (as it relates to
Confidential Information received during the Term), 7, 8, 11-21 and any schedule(s) thereto
shall survive the termination of this Agreement.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives on the
Effective Date.
|
|
AYTU
BIOSCIENCE INC.
Name:
Title:
|
[Signature Page to Transition
Service Agreement]
Exhibit 99.1
Aytu BioScience Announces Closing of $12.4M Prescription Product
Portfolio Purchase
Asset Purchase
Increases Combined Company Annual Revenue to $44M, Including
Previously Announced Acquisition of Innovus
Pharmaceuticals
Over $5 Million
in Near-Term Cost Savings Expected Through Efficient Sales Force
Integration and Removal of Redundant Operations
ENGLEWOOD, CO / ACCESSWIRE / November 4, 2019 / Aytu
BioScience, Inc. (NASDAQ: AYTU), a specialty pharmaceutical company
focused on global commercialization of novel products addressing
significant medical needs, today announced the closing of the
previously announced purchase of a
$12.4M
annual revenue prescription product portfolio (the
“Commercial Portfolio”) and accompanying commercial
infrastructure from Cerecor. With this acquisition, along with the
previously announced acquisition of Innovus Pharmaceuticals,
combined company annual revenue increases to over $44 million,
based on combined company revenue for the twelve months ending June
30, 2019.
The
asset acquisition increases Aytu’s prescription portfolio to
nine differentiated products primarily promoted to high prescribing
primary care and pediatric physicians.
Aytu
and Cerecor signed a letter of intent to acquire the $12.4M
Commercial Portfolio and accompanying commercial infrastructure
earlier last month and closed the transaction November 4, 2019.
Aytu paid Cerecor consideration of $4.5M in cash and issued
approximately 9.8 million convertible preferred Aytu shares. These
shares are locked up until July 1, 2020 and, upon the expiry of the
holding period, are convertible into common shares subject to
various conditions. Total consideration paid, based on Aytu’s
closing share price on November 1, 2019 is approximately $14.6M, or
1.2x LTM revenue, plus the assumption of debt as previously
described.
Complete
details of the acquisition and full description of the acquired
Commercial Portfolio were provided in a press release on October
14, 2019 and can be found on the Investors and News pages of
company’s website, aytubio.com, and on Form 8-K as filed with
the Securities and Exchange Commission on October 15, 2019 and
November 4, 2019.
In
conjunction with the closing of the transaction, the company
announced an integration and cost saving plan designed to
significantly accelerate the company’s time to profitability.
The company has completed an immediate headcount reduction through
the removal of overlapping sales representatives, sales managers,
and other redundant employees. Through this rationalization, the
company expects to realize over $5 million in savings on an annual
basis once employee separation and other transaction-related
expenses have been paid.
This
removal of $5 million in expenses is expected to result in a cash
burn reduction of approximately 40% across the two entities.
Increasing product sales along with additional expense reductions
through removal of redundant processes and commercial service
providers are expected to further accelerate the company’s
time to achieve profitability.
Josh
Disbrow, Chief Executive Officer of Aytu BioScience stated,
“We are pleased to have completed this asset purchase so
quickly and are looking forward to implementing our growth plan
through this combination. This asset purchase enables greater
commercial scale as we now have a three-fold larger Rx product
portfolio. Each product is unique, and all products are well
positioned in their respective categories. The opportunity for
growth across the product line is exciting. Further, through the
reduction of redundant, overlapping sales territories and
personnel, we expect to save more than $5 million and accelerate
our time to profitability. Achieving profitability is an important
aspect of driving shareholder value in the near term, and
we’ve taken a significant step to accelerate that
timeline.
Mr.
Disbrow continued, “We have begun integrating a
high-performing sales team, and through sales force cross training
that is underway, we expect to increase the promotional noise on
our growth products and increase prescription sales. Combining the
two sales teams has enabled us to evaluate all aspects of our
commercial organization and implement the best practices from both
teams. Through the reduction in headcount completed last week, we
are retaining the highest performing people from both
organizations. I’m looking forward to seeing these
individuals drive near-term prescription and revenue growth. This
is an exciting time as we welcome new high-performing sales
professionals to complement the high performers already at Aytu and
accelerate the growth trajectory of the new Aytu
BioScience.”
About Aytu BioScience, Inc.
Aytu
BioScience is a commercial-stage specialty pharmaceutical company
focused on commercializing novel products that address significant
patient needs. The company currently markets Natesto®, the
only FDA-approved nasal formulation of testosterone for men with
hypogonadism (low testosterone, or "Low T"). Aytu also has
exclusive U.S. and Canadian rights to ZolpiMist™, an
FDA-approved, commercial-stage prescription sleep aid indicated for
the short-term treatment of insomnia characterized by difficulties
with sleep initiation. Aytu is the exclusive U.S. licensee with
commercial rights to Tuzistra® XR, the only FDA-approved
12-hour codeine-based antitussive syrup. Tuzistra XR is a
prescription antitussive consisting of codeine polistirex and
chlorpheniramine polistirex in an extended-release oral suspension.
Additionally, Aytu is developing MiOXSYS®, a novel, rapid
semen analysis system with the potential to become a standard of
care for the diagnosis and management of male infertility caused by
oxidative stress. MiOXSYS is commercialized outside of the U.S.
where it is a CE Marked, Health Canada cleared, Australian TGA
approved, Mexican COFEPRAS approved product, and Aytu is planning
U.S.-based clinical trials in pursuit of 510k de novo medical
device clearance by the FDA. Aytu's strategy is to continue
building its portfolio of revenue-generating products, leveraging
its focused commercial team and expertise to build leading brands
within large therapeutic markets. For more information visit
aytubio.com.
Forward-Looking Statements
This
press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, or the
Exchange Act. All statements other than statements of historical
facts contained in this presentation, are forward-looking
statements. Forward-looking statements are generally written in the
future tense and/or are preceded by words such as ''may,''
''will,'' ''should,'' ''forecast,'' ''could,'' ''expect,''
''suggest,'' ''believe,'' ''estimate,'' ''continue,''
''anticipate,'' ''intend,'' ''plan,'' or similar words, or the
negatives of such terms or other variations on such terms or
comparable terminology. These statements are just predictions and
are subject to risks and uncertainties that could cause the actual
events or results to differ materially. These risks and
uncertainties include, among others: the effects of the
business combination of Aytu and the Commercial Portfolio and the
previously announced, but not yet consummated, merger
(“Merger”) with Innovus Pharmaceuticals, including the
combined company's future financial condition, results of
operations, strategy and plans, the ability of the combined company
to realize anticipated synergies in the timeframe expected or at
all, changes in capital markets and the ability of the combined
company to finance operations in the manner expected, the diversion
of management time on Merger-related issues and integration of the
Commercial Portfolio, the ultimate timing, outcome and results of
integrating the operations the Commercial Portfolio and Innovus
with Aytu’s existing operations, the failure to obtain the
required votes of Innovus’ shareholders or Aytu’s
shareholders to approve the Merger and related matters, the risk
that a condition to closing of the Merger may not be satisfied,
that either party may terminate the merger agreement or that the
closing of the Merger might be delayed or not occur at all, the
price per share utilized in the formula for the initial $8 million
merger consideration in the Merger may not be reflective of the
current market price of Aytu’s common stock on the closing
date, potential adverse reactions or changes to business or
employee relationships, including those resulting from the
announcement or completion of the Merger, risks relating to
gaining market acceptance of our products, obtaining or maintaining
reimbursement by third-party payors, the potential future
commercialization of our product candidates, the anticipated start
dates, durations and completion dates, as well as the potential
future results, of our ongoing and future clinical trials, the
anticipated designs of our future clinical trials, anticipated
future regulatory submissions and events, our anticipated future
cash position and future events under our current and potential
future collaboration. We also refer you to the risks described in
''Risk Factors'' in Part I, Item 1A of the company's Annual Report
on Form 10-K and in the other reports and documents we file with
the Securities and Exchange Commission from time to
time.
Contact for Investors:
James
Carbonara
Hayden
IR
(646)
755-7412
james@haydenir.com
Source: Aytu BioScience, Inc.
