WAIVER AND AMENDMENT
This
Waiver and Amendment (this “Waiver”) is made effective as of
November 29, 2019, by and between Acerus Pharmaceuticals
Corporation, a Canadian corporation, having offices at 0000 Xxxxxx
Xxxxx, Xxxxxxxxxxx, XX X0X XX0, Xxxxxx (“Acerus”), and Aytu Bioscience,
Inc., Delaware corporation, having offices at 000 Xxxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 (“Aytu”). Reference is made herein
to the Amended and Restated License and Supply Agreement, dated as
of July 29, 2019 (the “Agreement”), by and between Acerus
and Aytu. Capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to them in the
Agreement.
WHEREAS, Section 2.5(a) of the Agreement
provides that the closing of the Agreement and the other
transactions contemplated thereby shall take place following the
satisfaction or waiver (to the extent not prohibited by Applicable
Law) of the conditions set forth in Section 2.5(c) of the
Agreement, which requires that Acerus raise at least $10,000,000 of
gross proceeds of additional capital through one or more series of
transactions occurring prior to the date that is six months after
the A&R Signing Date (the “Closing Condition”);
WHEREAS, the Parties desire to waive the
Closing Condition, as well as certain other closing deliverables,
and to close the transactions contemplated by the Agreement as of
November 29, 2019;
WHEREAS, in connection with the A&R
Closing, the Parties desire to set forth certain additional
amendments and agreements of the Parties relating to, among other
things, the Sales Representatives on each Party’s Sales
Force; and
WHEREAS, in accordance with Section 15.9
of the Agreement the Parties desire to set forth the waivers,
amendments and agreements described below.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:
1. A&R
Closing. The Parties hereby agree to waive as of the date
hereof: (a) the Closing Condition set forth in Section 2.5(c) of
the Agreement and (b) the requirement set forth in Section
2.5(d)(i)(2) that Acerus deliver at the A&R Closing a
certificate certifying that the capital raise has been closed.
Accordingly, A&R Closing Date shall occur simultaneously with
the execution of this Waiver, and Acerus shall deliver the
following deliverables set forth in Section 2.5(d) promptly
following the A&R Closing Date and in any event no later than
December 6, 2019:
a.
Acerus shall
deliver, or cause to be delivered, to Aytu (i) a payment of
$[●] to reimburse Aytu for half of specific direct costs that
were previously paid by Aytu to Acerus associated with
serialization of Product and (ii) a payment of $[●], which is
its portion of the 2020 FDA user fee; and
2. Transfer
of Regulatory Submissions. Promptly following the A&R
Closing (and in any event within ten (10) Business Days thereafter,
the Parties agree to cooperate in good faith to execute and submit
all letters and documents necessary to transfer the Product NDA to
Acerus, in accordance with Section 4.1 of the
Agreement.
3. Sales
Force Matters.
a.
Employee Transition. In
accordance with Section 6.2(c) of the Agreement, the Parties agree
that the individuals listed on Schedule 1 attached hereto (the
“Transitioned
Employees”) will be transitioned to Acerus as of
December 1, 2019 in accordance with this Section 3.
i.
Promptly following
the A&R Closing Date, Aytu will execute and deliver to each
Transitioned Employee a letter, in substantially the form attached
hereto as Exhibit
A, describing such transition, including the proposed formal
transfer of employment to Acerus (the “Transition Letter”). Aytu will use
commercially reasonable efforts to ensure that each Transitioned
Employee promptly executes a Transition Letter.
ii.
In connection with
such transition, from December 1, 2019 until the date on which the
Parties and the applicable Transitioned Employee mutually agree to
formally transfer such Transitioned Employee’s employment to
Acerus, but in no case later than June 30, 2020, (such period, the
“Employee Transition
Period”), Acerus shall (A) assume commercial
responsibility and costs for the sales territories for which such
Transitioned Employees are responsible, as listed on Schedule 1, as well as the
additional sales territories listed on Schedule 1 for which a Sales
Representative is not currently assigned, and (B) assume sole
responsibility for management direction and hiring and firing
decisions regarding such Transitioned Employee. The Parties intend
that during the Employee Transition Period the Transitioned
Employees will present themselves during Details as representatives
of Acerus (or its Affiliate), including carrying Acerus business
cards, and will report directly to the applicable members of
Acerus’ management team. For clarity, following December 1,
2019, Aytu will ensure that none of its Sales Representatives
Detail or otherwise Promote the Product in the sales territories
listed on Schedule
1 in the Acerus Sales Channel (as defined in the A&R
Agreement).
iii.
During the Employee
Transition Period, Aytu shall maintain such Transitioned Employee
on its payroll and other administrative plans as an employee of
Aytu, subject to voluntary resignation by such Transitioned
Employee and Ordinary Course Terminations and Reassignments, as
determined by Acerus; provided that, for clarity, in no event shall
Aytu terminate employment of or reassign any Transitioned Employee
during the Employee Transition Period without Acerus’ prior
written consent.
b.
Employee Costs. During the
Employee Transition Period, all employment and other direct costs
associated with the Transitioned Employees (i.e., meal budget, car
reimbursement, travel, etc.) set forth on Schedule 2 (the
“Employee
Costs”) will be paid for by Acerus on a quarterly
basis (in arrears), which amounts will be deducted from the
quarterly Acerus Commissions Payments payable by Aytu to Acerus
pursuant to Section 7.1(a) of the Agreement. For the avoidance of
doubt, the Employee Costs set forth on Schedule 2 are actual costs
incurred by Aytu from January through October 31, 2019 (T&E
costs) and November 15, 2019 (all other Employee Costs) are
illustrative of the expected Employee Costs. Actual Employee Costs
for which Aytu will be reimbursed by Acerus are expected to differ
based on Transitioned Employees’ actual sales performance,
medical and other benefit plan selections for calendar 2020,
travel, meal spending, car utilization, etc. following Closing. If
the Employee Costs for a given quarter exceed the Acerus
Commissions Payment for such quarter, such negative balance will be
rolled over to the next quarter; provided, that if Employee Costs
exceed Acerus Commissions Payments for three consecutive quarters,
any remaining balance payable to Aytu will be paid by Acerus at the
end of the next quarter.
c.
Transition Period
Activities.
i.
The Parties
acknowledge and agree that Schedule 6.2(a) of the Agreement is
hereby deleted in its entirety and replaced with the attached
Schedule
3.
ii.
In addition to the
activities described on Schedule 3, the Parties agree
that until the earlier of (1) written notice from Acerus and (2)
June 30, 2020, Aytu will continue to provide the following
materials and access to Acerus and the Transitioned
Employees:
1.
Promotional
Materials in amounts and at times consistent with that which was
provided to the Transitioned Employees as Aytu employees prior to
the A&R Closing Date;
2.
Access to the call
reporting and data management tools specific to the Transitioned
Employees and their respective customers and territories/region;
and
3.
The items set forth
on Schedule 4 hereto.
d.
Sales Force Size
Requirements.
i.
The Parties hereby
acknowledge and agree that the requirements for the Aytu
Product-Specific Sales Force set forth in Section 6.3(a)(i)(1) of
the Agreement shall be deleted in their entirety and replaced with
the following:
“(1) for the
first twelve (12) months following the A&R Closing Date, a
number of Sales Representatives on a Full Time Basis that is not
less than twenty (20) and a mutually agreed number of sales force
managers appropriate to manage the Sales
Representatives;”
ii.
The Parties hereby
acknowledge and agree that the requirements for the Acerus
Product-Specific Sales Force set forth in Section 6.3(a)(ii)(1)-(2)
of the Agreement shall be deleted in their entirety and replaced
with the following:
“(1) at least
fifteen (15) Sales Representatives on a Full Time Basis on the date
that is the twelve (12)-month anniversary of the A&R Closing
Date; and”
For
clarity, the Transitioned Employees shall count towards the
requirements for the Acerus Product-Specific Sales Force during the
Employee Transition Period.
iii.
After the first
twelve (12) months following the A&R Closing Date, each Party
will be responsible for employing a Product-Specific Sales Force
consistent with the requirements set forth in Section 6.3 of the
Agreement.
4. This
Waiver shall be effective immediately after its due execution by
the undersigned. This Waiver may be executed in any number of
counterparts, each such counterpart shall be deemed an original
instrument, and all such counterparts together shall constitute but
one agreement. This Waiver may be executed and delivered by email
(.pdf), and upon such delivery the email (.pdf) signature will be
deemed to have the same effect as if the original signature had
been delivered. This Waiver shall be governed by the internal law
of the State of Delaware, without regard to its principles of
conflicts of laws.
5. Except
for the specific provisions waived or amended herein, the Agreement
shall remain in full force and effect and in accordance with its
terms. This Waiver shall be limited solely for the purpose and to
the extent expressly set forth herein and nothing herein expressed
or implied shall constitute an amendment, supplement, modification
or waiver to any of other term, provision or condition of the
Agreement.
[SIGNATURE
PAGES FOLLOW]
IN
WITNESS WHEREOF, the parties hereto have executed this Waiver to be
executed by their duly authorized representatives, as of the date
first written above.
ACERUS
PHARMACEUTICALS CORPORATION
By:
/s/ Xxxxxx
Xxxxxxxx
Name:
Xxxxxx Xxxxxxxx
Title:
President and Chief Executive Officer
By:
/s/ Xxxxxx
Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
Chief Executive Officer
[Signature
Page to Waiver]
Schedule 1
Transitioned Employees and Territories
[Omitted
Intentionally]
Schedule 2
Employee Costs*
[Omitted Intentionally]
Schedule 3
Schedule 6.2(a)
Transition Period Activities
[Omitted
Intentionally]
Schedule 4
[Omitted Intentionally]
Exhibit A
Form of Transition Letter
