Exhibit 10.1

 

RESTRICTED STOCK CANCELATION AND EXCHANGE AGREEMENT

 

THIS RESTRICTED STOCK CANCELATION AND EXCHANGE AGREEMENT (the “Agreement”) is
entered into as of June 30, 2020 by and between Aytu BioScience, Inc., a
Delaware corporation (the “Company”), and ____________ (the “Holder”).

 

RECITALS

 

WHEREAS, on November 14, 2019 the Company’s compensation committee (the
“Compensation Committee”) approved a grant of such number shares of restricted
stock as set forth in Exhibit A at a per share price of $0.98 which represented
the closing price of the Company’s common stock on the Nasdaq Capital Market on
November 14, 2019 (the “Closing Price”) to the Holder (the “Equity Grant”);

 

WHEREAS, the Equity Grant was duly approved by the Company through valid
corporate action but the Equity Grant was never issued to the Holder; and

 

WHEREAS, in lieu of issuing the Equity Grant, the Compensation Committee and the
Holder agree that it be in the best interest of the Company and its stockholders
for the Company and the Holder to enter into the Agreement whereby the Holder’s
right title and interest to the Equity Grant will be canceled in exchange for a
cash payment on the terms and subject to the conditions set forth in this
Agreement (the “Restricted Stock Exchange”).

 

NOW, THEREFORE, in consideration of the promises, covenants and agreements
herein contained, the parties agree as follows:

 

AGREEMENT

 

SECTION 1. EXCHANGE AND CANCELATION OF RESTRICTED STOCK FOR CASH.

 

1.1 Restricted Stock Cancelation and Exchange. At the Closing, the Company
hereby agrees to cancel the Equity Grant, and the Holder hereby agrees to
surrender the Equity Grant in exchange for the cash payment as set forth in
Exhibit A (the “Restricted Stock Exchange Amount”), subject to applicable tax
withholding. The Restricted Stock Exchange Amount, net of applicable tax
withholding, shall be paid by cash, check or wire transfer of immediately
available funds to an account or accounts to be designated by the Holder.

 

1.2 Closing. The closing of the Restricted Stock Exchange (the “Closing”) shall
take place at such other time and place as the parties hereto shall mutually
agree. The obligations of the Company to pay the Restricted Stock Exchange
Amount shall be subject to the accuracy of the representations and warranties on
the part of the Holder contained herein as of the date hereof and as of the date
of the Closing and to the performance by the Holder of his obligations
hereunder.

 

1.3 Termination of Rights to the Equity Grant. Upon the payment of the
Restricted Stock Exchange Amount and completion of the Restricted Stock Exchange
in accordance with the terms of this Agreement, the Equity Grant shall cease to
be outstanding for any and all purposes, neither the Holder nor any other person
shall have any rights as a holder of the Equity Grant.

 

 

 

 

SECTION 2. HOLDER REPRESENTATIONS AND WARRANTIES.

 

In connection with the transactions provided for hereby, the Holder represents
and warrants to the Company as follows:

 

2.1 Authorization. The Holder has all necessary right, capacity, power and
authority to execute, deliver and perform the Holder’s obligations under this
Agreement and all agreements, instruments and documents contemplated hereby and
to surrender the Equity Grant for the Restricted Stock Exchange, and this
Agreement constitutes a valid and binding obligation of the Holder.

 

2.2 No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in a breach
by the Holder of, or constitute a default by the Holder under, any agreement,
instrument, decree, judgment or order to which the Holder is a party or by which
the Holder may be bound.

 

2.3 Tax Matters. The Holder has had an opportunity to review with the Holder’s
tax advisers the federal, state, local and foreign tax consequences of the
Restricted Stock Exchange and the transactions contemplated by this Agreement.
The Holder is relying solely on such advisers and not on any statements or
representations of the Company or any of its agents. The Holder understands that
the Holder (and not the Company) shall be responsible for the Holder’s tax
liability and any related interest and penalties that may arise as a result of
the transactions contemplated by this Agreement.

 

2.4 Finders. The Holder has not engaged any investment banker, broker, or finder
in connection with the transactions contemplated hereunder, and no broker’s or
similar fee is payable by the Holder or any of its affiliates in connection with
the surrender of the Equity Grant for the Restricted Stock Exchange hereunder.

 

SECTION 3. COMPANY REPRESENTATIONS AND WARRANTIES; COMPANY COVENANTS.

 

In connection with the transactions provided for hereby, the Company represents
and warrants to the Holder as follows:

 

3.1 Organization. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.

 

3.2 Authorization. The Company has all necessary power and authority to execute,
deliver and perform the Company’s obligations under this Agreement and all
agreements, instruments and documents contemplated hereby and this Agreement
constitutes a valid and binding obligation of the Company.

 

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3.3 No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (i) will not result in a
breach by the Company of, or constitute a default by the Company under, any
agreement, instrument, decree, judgment or order to which the Company is a party
or by which the Company may be bound, and (ii) will not result in a breach or
violation of any law, rule or regulation applicable to the Company, including
the Securities Act of 1933, as amended (and the rules and regulations
promulgated thereunder) (the “Securities Act”), the Exchange Act, and the rules
and regulations of the Nasdaq Capital Market.

 

3.4 No Consents. No consent, approval, authorization, filing, order,
registration or qualification of or with any court or governmental or regulatory
agency or body is required in connection with the transactions contemplated
hereby, other than as may be required under the Exchange Act.

 

3.5 Brokers. No broker or finder has acted for the Company in connection with
this Agreement or the transactions contemplated hereby, and no broker or finder
is entitled to any brokerage or finder’s fee or other commissions in respect of
such transactions.

 

3.6 Sufficient Funds. At the Closing, the Company will have sufficient funds
available to deliver the Restricted Stock Exchange Amount in full and to
consummate the transactions contemplated hereby.

 

SECTION 4. CHANGE IN CONTROL OR SEPARATION EVENT

 

4.1 In the event a “Change of Control” or a “Separation Event” occurs prior to
the payment of the Restricted Stock Exchange Amount, the Company or its
successor shall pay the remainder of the Restricted Stock Exchange Amount within
thirty (30) days of the occurrence of such event.

 

4.2 “Change in Control” shall mean (1) a merger or consolidation in which the
Company is a constituent party (or in which a subsidiary of the Company is a
constituent party and the Company issues shares of its capital stock pursuant to
such merger or consolidation), other than a merger or consolidation in which the
voting securities of the Company outstanding immediately prior to such merger or
consolidation continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the surviving entity
outstanding immediately after such merger or consolidation, (2) any transaction
or series of related transactions in which in excess of 50% of the Company’s
voting power is transferred, other than the sale by the Company of stock in
transactions the primary purpose of which is to raise capital for the Company’s
operations and activities, or (3) a sale, lease, exclusive license or other
disposition of all or substantially all (as determined by the Board in its sole
discretion) of the assets of the Company, other than a sale, lease, license or
other disposition of all or substantially all of the consolidated assets of the
Company to an entity, more than 50% of the combined voting power of the voting
securities of which are beneficially owned by stockholders of the Company in
substantially the same proportions as their beneficial ownership of the
outstanding voting securities of the Company immediately prior to such sale,
lease, exclusive license or other disposition.

 

4.3 “Separation Event” shall mean “separation from service” within the meaning
of Treasury Regulation Section 1.409A-1(h).

 

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SECTION 5. SUCCESSORS AND ASSIGNS.

 

Except as otherwise provided herein, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of any Shares). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

 

SECTION 6. GOVERNING LAW.

 

This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware, except the choice-of-law provisions thereof.

 

SECTION 7. WAIVER OF JURY TRIAL.

 

EACH OF THE PARTIES TO THIS AGREEMENT, AFTER CONSULTING OR HAVING HAD THE
OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR
AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF
CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY OF
THEM. No party to this Agreement will seek to consolidate, by counterclaim or
otherwise, any action in which a jury trial has been waived with any other
action in which a jury trial cannot be or has not been waived.

 

SECTION 8. SPECIFIC PERFORMANCE.

 

Each party to this Agreement acknowledges and agrees that money damages would
not be a sufficient remedy for any breach (or threatened breach) of this
Agreement by it and that, in the event of any breach or threatened breach of
this Agreement, (a) the party seeking specific performance will be entitled to
injunctive and other equitable relief, without proof of actual damages; (b) the
party against whom specific performance is sought will not plead in defense that
there would be an adequate remedy at law; and (c) the party against whom
specific performance is sought agrees to waive any applicable right or
requirement that a bond be posted. Such remedies will not be the exclusive
remedies for a breach of this Agreement, but will be in addition to all other
remedies available at law or in equity.

 

SECTION 9. ENTIRE AGREEMENT.

 

This Agreement contains the entire understanding of the parties, and there are
no further or other agreements or understandings, written or oral, in effect
between the parties relating to the subject matter hereof, except as expressly
referred to herein.

 

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SECTION 10. AMENDMENTS AND WAIVERS.

 

Any term of this Agreement may be amended, and the observance of any term of
this Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of the
Holder and the Company.

 

SECTION 11. FURTHER ACTION.

 

Each party hereto agrees to execute any additional documents and to take any
further action as may be necessary or desirable in order to implement the
transactions contemplated by this Agreement.

 

SECTION 12. SURVIVAL.

 

The representations and warranties herein shall survive the Closing.

 

SECTION 13. SEVERABILITY.

 

Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

SECTION 14. NOTICES.

 

All notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed effectively given (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed facsimile or electronic mail,
if sent during normal business hours of the recipient or, if not, then on the
next business day, (c) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one day after
deposit with a nationally recognized overnight courier, specifying next-day
delivery, with written verification of receipt. All communications shall be sent
to the respective parties at the addresses set forth on the signature pages
attached hereto (or at such other addresses as shall be specified by notice
given in accordance with this SECTION 14).

 

SECTION 15. COUNTERPARTS.

 

This Agreement and any amendments to this Agreement may be executed in one or
more textually-identical counterparts, all of which will be considered one and
the same agreement and will become effective when one or more counterparts have
been signed by each of the parties to this Agreement and delivered to the other
parties to this Agreement, it being understood that all parties to this
Agreement need not sign the same counterpart. Any such counterpart, to the
extent delivered by fax or .pdf, .tif, .gif, .jpg or similar attachment to
electronic mail (any such delivery, an “Electronic Delivery”), will be treated
in all manner and respects as an original executed counterpart and will be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person. No party to this Agreement may raise
the use of an Electronic Delivery to deliver a signature, or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of an Electronic Delivery, as a defense to the formation of a contract, and
each party to this Agreement forever waives any such defense, except to the
extent such defense relates to lack of authenticity.

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the
day and year first above written.

 

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  COMPANY:       AYTU BIOSCIENCE, INC.       By:     Name: Joshua Disbrow  
Title: Chief Executive Officer       HOLDER:       By:     Name:  

 

[Signature Page to Restricted Stock Exchange Agreement]

 

 

 

 

EXHIBIT A

 

Holder
Name   Equity
Grant   Closing
Price   Restricted Stock Exchange Amount   Q-1 2021
Payment   Q-2 2022
Payment                               $0.98                               
                                                                      

 

 

 

 

 

 

 

Exhibit A