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.