Document:

EX-10.4

 Exhibit 10.4 

Execution Version 

Series C 

Shareholders’ Agreement 

			
		  	Execution Version
		
	Shareholders’ Agreement	  	Auris Medical AG

  

 This Shareholders’ Agreement (“Agreement”) is made as of 5 April 2013 by and among
Auris Medical AG, Falknerstrasse 4, 4001 Basel, Switzerland (“Company”) and the shareholders of the Company listed in Annex I attached to this Agreement (each a “Shareholder” and together the
“Shareholders”). Company and Shareholders are collectively referred to as “Parties”. 
 WHEREAS, Thomas
Meyer (the “Founder”) incorporated the Company as Fimacom AG with registered office in Lüterkofen, Switzerland, on 1 April 1998. The Company’s name was changed to Auris Medical AG and its purpose to its current
purpose on 22 May 2003. The Company’s registered office was moved to Düdingen, Switzerland, on 21 June 2006 and moved again to Basel, Switzerland, on 28 March 2008; 

WHEREAS, the Founder was issued with common shares (the “Common Shares”) and A shares in consideration for his investments in
the Company prior to 2007; 
 WHEREAS, in 2007 a syndicate of investors (“B Investors”) made a Series B investment of CHF
11,000,000 in the Company, in the course of which they were issued with B shares in the Company (the “B Shares”); 

WHEREAS, in March 2011, a newly constituted syndicate of investors (the “B2 Investors”), all of whom were already
B Investors and shareholders in the Company, made an investment of CHF 3,260,000 by way of subscription for B shares in the Company; 

WHEREAS, in December 2011 a further syndicate of investors (the “B3 Investors”) made an investment of CHF 5,053,680 by way of
subscription for B shares in the Company (the “Series B3 Investment”); 
 WHEREAS, following the closing of the Series B3
Investment, the Shareholders have amended and restated the initial 2007 Series B Shareholders’ Agreement; 
 WHEREAS, a further
syndicate of investors (the “C Investors Syndicate”) has agreed to make an equity investment in the Company of up to CHF 47,124,000, possibly with at least one additional financial institutional investor (such financial
institutional investor, as the case may be, and the C Investors Syndicate altogether the “C Investors”, and each a “C Investor”), in exchange for which the C Investors shall receive new Series C Shares in the
Company (the “C Shares”) with rights and privileges as set forth in the amended articles of association of the Company attached to the investment agreement of this day (the “Investment Agreement”) (as amended from
time to time, the “Articles”) and in this Shareholders’ Agreement; 
 WHEREAS, the Parties wish to agree on and
re-state the terms governing their relationship and the rights and obligations by and among them.  

  
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	Shareholders’ Agreement	  	Auris Medical AG

  

 Now, therefore, the Parties agree as follows: 

 

	1.	Condition Precedent 

 This Agreement shall only come into force and be binding on a Party upon the entry
of the relevant Party as a shareholder in the Company’s share register or the entry into the trade registry of the capital increase reflecting the subscription of shares in the Company by such Party, whichever comes first. 

 

	2.	General Principles 

  

	2.1.	Scope 

 This Agreement shall govern the relationship and set forth the principles of cooperation between the
Parties in their capacity as shareholders of the Company. This Agreement shall bind the Parties with respect to all of the shares in the Company (the “Shares”). If further Shares are acquired or obtained by the Parties, the
provisions of this Agreement will also apply with respect to such further Shares. 
 This Agreement replaces the shareholders’ agreement between the
Company and its shareholders dated 22 December 2011 and any prior shareholders’ agreement of the Company that may be in place. 
 In the event of
a conflict or inconsistencies between the provisions of this Agreement and the Articles or the organizational rules of the Board of Directors of the Company, this Agreement shall prevail in all matters among and regarding the Shareholders. 

 

	2.2.	General Undertaking 

 The Shareholders acknowledge their common interest in an exit within 12 months as from the
date of the initial closing of the Series C investment, either (i) through a trade sale, pursuant to which the C Shareholders shall receive in cash at closing an amount equal to at least 2 times the applicable per share price of the C Shares,
or (ii) through an IPO, where the per share price of the common shares being sold to the public is at least 2,5 times the applicable per share price of the C Shares (altogether a “Qualified Exit Event”). 

In particular, to the extent that the terms and conditions of a Qualified Exit Event are customary and reasonable, the C Shareholders shall support such
Qualified Exit Event. 
  

	2.3.	Compliance 

 Each Shareholder undertakes to vote its Shares and to instruct its representative(s) on the board
of directors of the Company (the “Board”) to comply with this Agreement and to cast their votes accordingly, so as to give effect to the provisions and principles laid down in this Agreement. Notwithstanding the foregoing, the
members of the Board will not be bound by any instructions that contravene the applicable law, the Articles or resolutions validly adopted at a shareholders’ meeting. 

  
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	3.	General Assembly of Shareholders 

 Decisions of the General Assembly of Shareholders shall require a
simple majority of the Shareholders present or represented, unless the Articles of Association of the Company, this Agreement or the mandatory provisions of the Swiss Code of Obligations require a qualified majority. 

In particular, the Shareholders agree that the following decisions shall be resolved by the General Assembly of Shareholders and require the approval of
Shareholders holding at least two thirds of the outstanding shares in the Company being present or represented by proxy, including at least two thirds of the present or represented votes of the C Shares, and at least 50% of the present or
represented votes of the B Shares, as well as the absolute majority of the present or represented nominal values: 
  

	 	(i)	amending the corporate purposes of the Company; 

  

	 	(ii)	creating or cancelling Shares with preferred rights, or amending the rights attached to such Shares; 

  

	 	(iii)	restricting the transfer of registered Shares; 

  

	 	(iv)	creating authorized or conditional share capital; 

  

	 	(v)	increasing the share capital by incorporation of reserves, by contribution in kind or for the purpose of acquiring specific assets and granting specific advantages; 

 

	 	(vi)	incurring debt of more than CHF 3,000,000 in aggregate at any time outstanding; 

  

	 	(vii)	limiting or suppressing the Shareholders’ pre-emptive rights; 

  

	 	(viii)	changing the domicile or registered address of the Company (however, by way of exception, changes within Basel shall be subject to a decision of the Board and shall, therefore, not require any decision of the General
Assembly); 

  

	 	(ix)	selling or transferring all or substantially all the assets of the Company or the granting of any option to do the foregoing, in one or a series of transactions; 

 

	 	(x)	merging, consolidating or splitting the Company and effecting any transaction or granting any right to effect any transaction or series of transactions which would affect the allocation of voting rights among the
Shareholders; 

  

	 	(xi)	appointing and removing the auditors; 

  

	 	(xii)	changing the number of Directors; 

  

	 	(xiii)	voting or paying a dividend or buying back any Shares; and 

  

	 	(xiv)	dissolving or liquidating the Company. 

 In addition, and to the extent it is not included in the list above,
the approval of the holders of two thirds of the C Shares shall be required for (i) any trade sale, merger or consolidation, sale, lease, transfer or other disposition of all or substantially all of the assets of the Company or transaction in
which 50% or more of the voting power of the Company is transferred (an “Exit Event”) or (ii) the approval of any IPO (as defined in the Investment Agreement); unless, however, both (A) such transaction takes place within
12 months from the Initial Closing Date (as defined in the Investment Agreement) and (B) in the case of (i) above, the per share cash return for the C Shares at the closing of the Exit Event (such per share cash return to include the
value of any separate cash distribution to the holders of C Shares made prior to 

  
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or concurrently with the Exit Event) is 2 or more times the applicable per share price of the C Shares (i.e. the price actually paid by the C Investor for each such C Share, as appropriately
adjusted for stock splits, stock combinations or the like and hereinafter, the “Applicable Series C Per Share Price”), or in the case of (ii) above, the per share price of the Common Shares being sold to the public is 2.5 or
more times the Applicable Series C Per Share Price. 
  

	4.	Board of Directors; Observers 

 The Board shall consist of between 3 and 6 members
(“Directors”) comprised of 
  

	 	(i)	2 members as the representatives of the C Investors, one of which shall be designated by Sofinnova Ventures and the other by Sofinnova Partners (the “C Directors”); 

 

	 	(ii)	Up to 2 members as the representatives of the B Investors, B2 Investors and B3 Investors as follows: (a) as long as the aforementioned investors hold, together, at least 20% of the Company’s undiluted share
capital, they shall be entitled to designate two representatives; (b) if the aforementioned investors hold, together, between 20% and 10% of the Company’s undiluted share capital, they shall be entitled to designate one representative (the
up to two seats being allocated among eligible B Investors in the order of their percent stakes in the Company’s undiluted share capital); 

  

	 	(iii)	1 independent member jointly designated by the Founder and the Investors, with the consent of C Investors holding at least two thirds of the C Shares, of B Investors holding at least 50% of the B Shares as well as the
absolute majority of the share capital; 

  

	 	(iv)	the Founder, who will serve as the Board’s Chairman. 

 The term for the Chairman shall be one year. 

If the share in the Company of a Shareholder directly represented on the Board subsequently falls below 10%, such Shareholder shall no longer be entitled to
participate in the designation of Board representatives. 
 If an Investor holding at least 10% of the Company’s undiluted share capital is not
represented on the Board, the Board shall upon reasonable notice invite a representative designated by such Investor (the “Observer”) to attend all Board meetings in a non-voting observer capacity. Each Observer shall receive copies
of all notices, minutes, consents and other materials provided to Directors, provided however that the Observer shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and provided
further, that the Company reserves the right to withhold any information and to exclude the Observer from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege
between the Company and its counsel or result in a conflict of interest. 

  
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 The Board shall have a quorum when a majority of Directors are present. The decisions of the Board require a
simple majority of the Directors who are in attendance. In case of a tied vote, the Chairman shall have a casting vote. 
 The following decisions shall
require the approval of at least four (4) Directors, at least two of whom are representatives designated by Investors (including a representative of the C Investors): 
  

	 	(i)	developing new products (other than the products described in the Company’s business plan); 

  

	 	(ii)	approving the Company’s business plan; 

  

	 	(iii)	appointing or removing the Managing Director without important reasons; 

  

	 	(iv)	payments to and agreements with Shareholders, their affiliates or employees or consultants of Shareholders or their affiliates except when such payments or agreements are made at arm’s length terms.

 Furthermore, shareholders’ meetings requiring specific majorities as provided for under clause 3. may only be validly convened if
specific notice of such meetings is given to the C Directors simultaneously with the sending of the invitation. 
 Non-executive Directors shall receive
part or all of their remuneration in stock options on Common Shares of the Company as resolved by the Board from time to time; travel and out of pocket expenses shall be reimbursed in cash by the Company on production of appropriate receipts.
Executive Directors and Directors delegated and remunerated by a Shareholder for its representation on the Board shall not be entitled to any specific remuneration for their Board membership and work. 

 

	5.	Restrictions on Transfer of Shares 

  

	5.1.	No encumbrances 

 Subject to the provisions of this clause 5., no Party shall, except with the prior written
consent of the other Parties, create or permit to subsist any pledge, lien, encumbrance, charge over or other collateral interest in, or grant any option or other rights in, all or any of its Shares. 

 

	5.2.	Right of first refusal and tag along rights 

 5.2.1. Right of first refusal 

5.2.1.1. Exercise of Right of First Refusal 
 The Investors have a
right of first refusal (the “Right of First Refusal”) with respect to any Shares proposed to be sold by other Shareholders with a follow-on right to purchase any Shares offered for sale but not purchased by the other Investors.
Before any Shareholder may sell Shares, he will give each Investor an opportunity, in accordance with the following paragraph, to purchase such Shares on a basis proportionate to the amount of Shares held by that Investor in proportion to the total
of Shares held by the participating Investors. 

  
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 Any Shareholder wishing to sell Shares (“Selling Shareholder”) shall first send to each
Investor (the “Other Parties”) and the Company a written notice (the “Notice”), stating the number of Shares for sale, the price per Share, the name, domicile or registered office of the contemplated transferee (the
“Transferee”) and the other terms and conditions of the offer. Each of the Investors willing to exercise their right of first refusal shall give a notice thereof to the Selling Shareholder and the Company within 15 business days
upon receipt of the notice of the selling intention. In no case shall the offering price and offering conditions be less favourable than those proposed to or by a third party within the last 180 days. If part or all of the Shares offered by the
Selling Shareholder are not purchased by the Investors, but sold to one or more third parties, such sale must be on the same conditions and at the same price as offered to the Investors and the conditions of such sale must be communicated by the
Selling Shareholder to the Board within 15 business days. 
 5.2.1.2. Implementation of Right of First Refusal 

If the applications made by Other Parties represent a number of Shares in excess of those subject to the Right of First Refusal, they shall be allocated
between them by the Company: 
  

	 	(i)	based on their rights in the share capital within the limit of the applications made by them, 

  

	 	(ii)	any possible surplus Shares being allocated between the Other Parties having manifested their intent to be allocated a number of Shares in excess of that to which they are entitled, pro rata to their interest in the
share capital and within the limit of their application. 

 For the purposes of this clause, in determining each Party’s respective
rights to the share capital, account shall be taken of all Shares held by each Party on the date of the Notice by the Selling Shareholder. 
 If, within the
imparted time period, meaning fifteen (15) days, no purchase offer is made or if the exercise of the Right of First Refusal does not cover all of the Shares subject to such right, the Selling Shareholder shall once again be entirely free to
dispose of all of the Shares he/she/it contemplates selling but only on the same prices, terms and conditions as those proposed or agreed upon with the contemplated Transferee as set forth in the Notice by the Selling Shareholder, without prejudice
to the other provisions of the Agreement (in particular the exit rights). 
 If, for any reason whatsoever, a sale of the Shares pursuant to the above
paragraph does not take place within a period of sixty (60) days from the expiry of the period of fifteen (15) days referred to above, the Right of First Refusal procedure set forth above shall be repeated once again. 

  
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 5.2.1.3. Exceptions to the Right of First Refusal 

Subject to the Transferee’s prior adherence to this Agreement, the following transactions shall fall outside the scope of the Right of First Refusal but
shall be first notified to the Board (or to any other collegial body replacing it in the event of amendment to the bylaws of the Company), which shall be responsible for promptly informing the Parties thereof, through any means: 

 

	•	 	any transfer of Shares by an Investor to any entity that (i) is under the control (direct or indirect) of that Investor or of the management company managing (directly or through a management agency agreement) that
Investor, or (ii) holds (directly or indirectly) the control over that Investor or the management company managing (directly or through a management agency agreement) that Investor, and vice versa; 

 

	•	 	any transfer of Shares by an Investor to its members, shareholders or partners, and vice versa, or to a secondary fund in case of liquidation or winding up of such Investor; 

 

	•	 	any transfer of Shares by an Investor to a private holding company or trust of which it is the sole owner or beneficiary respectively, and vice versa; 

 

	•	 	any transfer of Shares by the Founder to an asset holding company in which the Founder holds at least 95% of the voting rights, and vice versa; 

 

	•	 	sales of Shares taking place pursuant to clauses 5.2.2 and 5.3 of this Agreement. 

 Transfers or sales of
Shares pursuant to this clause shall only become effective when the acquiring party has agreed in writing to be bound by and to observe the provisions of this Agreement. 

5.2.2. Tag along rights 
 If one or more Shareholders (the
“Selling Majority”) declares his/their intent to the other Shareholders to sell Shares representing 50% or more of the voting share capital to one or more acquirers in a single or related transactions, the other Shareholders will be
entitled, as an alternative to the exercise of the right of first refusal, to sell their Shares on the same conditions and at the same price as the Selling Majority. 
  

	5.3.	Drag along rights 

 Shareholders will vote in favour of an Exit Event, provided that such transaction is
approved by (i) the Board, and (ii) Shareholders representing at least 75% of the Shares, and (iii) holders of C Shares representing at least two thirds of the then outstanding C Shares. The separate Series C vote as per subsection
(iii) hereof shall however not apply in the event the holders of Series C receive in cash at the closing of the Exit Event an amount equal to at least 2 times the Applicable Per Share Series C Price. In any event, Shareholders will not be
obliged to vote in favour of any Exit Event where other Shareholders own a majority by voting power of the shares of the acquiring corporation or will own a majority by voting power of the shares of the surviving corporation. 

  
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	5.4.	Board approval to transfer 

 For any sale of Shares in compliance with the requirements of this Agreement, the
Parties shall procure that the Board approves the transfers and makes the respective entries in the share register of the Company. For any sale of Shares not made in compliance with the requirements of this Agreement, the Parties shall procure that
the transfer is not approved by the Board, nor recorded in the share register of the Company. 
 Notwithstanding the foregoing, the Board may refuse its
approval without giving reasons provided the Company offers to the disposing Shareholder to acquire the Shares on its own account, on the account of other Shareholders or for the account of third parties and at the actual value at the point in time
of the request for approval. 
  

	5.5.	Future shareholders 

 The parties agree that any person becoming a shareholder in the Company and having agreed
in writing to be bound by this Shareholders’ Agreement shall, by virtue thereof, become a party to, and shall be deemed a Shareholder under, this Shareholders’ Agreement. 

 

	6.	Subsequent Increase of Capital and Anti-dilution 

 New Shares or other participation instruments issued
by the Company (excluding issuances in connection with acquisitions by the Company) must first be offered to the existing Shareholders on a pro rata basis in proportion to their existing shareholdings, unless such right of first subscription or
participation has been waived by the Shareholders. Should any Shareholder choose not to subscribe for its full pro rata share, the remaining Investors shall have the right to subscribe for the remaining pro rata shares. Any remaining Shares may be
offered to third parties for the same price and for the same terms and conditions. The Shareholders undertake to approve and to vote in favour of any issue of Shares to third parties on the terms of this clause 6. 

 

	7.	Liquidation and Exit Preferences 

  

	7.1.	Liquidation Preference 

 In the event of a dissolution or winding up of the Company with voluntary or
involuntary liquidation (“Deemed Liquidation”), subject to clause 7.2, the proceeds available for distribution to the Company’s shareholders after redemption of all third parties’ claims and liquidation costs, shall be
allocated to the Shareholders in the following order of precedence: 
  

	(a)	 First to the holders of C Shares then outstanding in the amount corresponding to the value of their investment and no more, up to a total amount of
CHF 47,124,000 (such figure to be adjusted accordingly, both in this Shareholders’ Agreement and in the Articles, in case of a Qualified Investor investing in the Company pursuant to the Investment Agreement) before any amount shall be paid or
any assets of the Company shall be distributed in respect of preference rights of other Shares. If the Deemed Liquidation proceeds of the 

  
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Company available for distribution to its shareholders shall be insufficient to permit such payment in full to the holders of C Shares, then the Deemed Liquidation proceeds of the Company
available for distribution to its shareholders shall be distributed among the holders of C Shares in proportion to their investment in respect of C Shares; 

  

	(b)	Thereafter, the remaining Deemed Liquidation proceeds of the Company shall be distributed to the holders of B Shares then outstanding in the amount corresponding to the value of their investment and no more, up to a
total amount of CHF 20,000,000 before any amount shall be paid or any assets of the Company shall be distributed in respect of preference rights of other Shares. If the Deemed Liquidation proceeds of the Company available for distribution to its
shareholders shall be insufficient to permit such payment in full to the holders of B Shares, then the Deemed Liquidation proceeds of the Company available for distribution to its shareholders shall be distributed among the holders of B Shares in
proportion to their investment in respect of B Shares; 

  

	(c)	Thereafter, the remaining Deemed Liquidation proceeds of the Company shall be distributed among the holders of A Shares up to the value of their investment, up to a total amount of CHF 5,872,345, before any amount shall
be paid or any assets of the Company shall be distributed in respect of preference rights of other Shares. If the Deemed Liquidation proceeds of the Company available for distribution to holders of A Shares shall be insufficient to permit such
payment in full to the holders of A Shares, then the Deemed Liquidation proceeds of the Company available for distribution to holders of A Shares shall be distributed among the holders of A Shares in proportion to their investment in A Shares.

  

	(d)	Thereafter, the remaining Deemed Liquidation proceeds of the Company shall be distributed among the holders of Common Shares up to the value of their investment, up to a total of CHF 232,320, before any amount shall be
paid or any assets of the Company shall be distributed in respect of preference rights of other Shares. If the Deemed Liquidation proceeds of the Company available for distribution to holders of Common Shares shall be insufficient to permit such
payment in full to the holders of Common Shares, then the Deemed Liquidation proceeds of the Company available for distribution to the holder of Common Shares shall be distributed among the holders of Common Shares in proportion to their investment
in Common Shares. 

 Thereafter, the remaining Deemed Liquidation proceeds of the Company available for distribution to shareholders shall be
paid to all of the Shareholders in proportion to their shareholding in the Company. 
 Without limiting the generality of the foregoing, the Shareholders
acknowledge and agree that in case of a Deemed Liquidation by way of a transfer of all or part of the Company’s assets, the Shareholders shall resolve on a dividend or liquidation of the Company in order to effect the liquidation preference
under this clause 7.1. 

  
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	7.2.	Special Exit Event 

 In an Exit Event where the per share cash return for C Shares at the closing of the Exit
Event (such per share cash return to include the value of any separate cash distribution to the holders of C Shares made prior to or concurrently with the Exit Event) does not amount to at least 2.5 times Applicable Series C Per Share Price (a
“Special Exit Event”), the proceeds available for distribution to the Company’s shareholders (“Exit Proceeds”), shall be allocated to the Shareholders in the following order of precedence: 

 

	(a)	First to the holders of C Shares then outstanding in the amount corresponding to the value of their investment and no more, up to a total amount of CHF 47,124,000 (such figure to be adjusted accordingly, both in this
Shareholders’ Agreement and in the Articles, in case of a Qualified Investor investing in the Company pursuant to the Investment Agreement), before any amount shall be paid to the holders of other Shares. If the Exit Proceeds of the Company
available for distribution to its shareholders shall be insufficient to permit such payment in full to the holders of C Shares, then the Exit Proceeds of the Company available for distribution to its shareholders shall be distributed among the
holders of C Shares in proportion to their investment in respect of C Shares; and 

  

	(b)	Then to the holders of B Shares, A Shares and Common Shares then outstanding in the amount corresponding to the value of their investment and no more, up to a total amount of CHF 27,000,000, to be distributed among them
in proportion to their shareholding in the Company, before any amount shall be paid to the holders of other Shares. If the Exit Proceeds of the Company available for distribution to its shareholders shall be insufficient to permit such payment in
full to the holders of B Shares, A Shares and Common Shares, then the Exit Proceeds of the Company available for distribution to its shareholders shall be distributed among the holders of B Shares, A Shares and Common Shares in proportion to
their shareholding in the Company; 

  

	(c)	Thereafter, the remaining Exit Proceeds shall be paid to all of the Shareholders in proportion to their shareholding in the Company. 

 

	7.3	Exit Event 

 In an Exit Event which is not a Special Exit Event, the Exit Proceeds shall be paid to all of the
Shareholders in proportion to their shareholding in the Company. 
  

	8.	Anti-Dilution Adjustment 

 In the event that the Company, on the Second Closing or on the Third Closing
(as defined in the Investment Agreement) – assuming a Qualified Investor participates – or on another equity round of the Company issues equity or equity related securities at a subscription or purchase price (such price the “New
Equity Issue Price”) below the price per new C Share paid upon the Series C First Tranche Investment (as defined in the Investment Agreement), the holders of the C Shares shall be entitled to purchase such number of additional C shares at
nominal value so as to reflect a new blended Series C price that is equal to the New Equity Issue Price. 

  
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	9.	Conversion of Shares 

 In the event the General Assembly of Shareholders, including the consent of the
holders of C Shares representing at least two thirds of the C Shares where required pursuant to Section 3 above, has validly resolved to list the Shares and/or offer them to the public, all preferred Shares shall be converted into ordinary
Shares upon IPO. In addition, each holder of C Shares shall have the right to request at any time during the term of this Agreement the conversion of all or a part of its preferred Shares into Common Shares by providing notice to this effect to all
other Shareholders and the Company. 
 The number of fully paid ordinary Shares into which the preferred Shares shall be converted will be equal to the
number of preferred Shares being converted (1:1 ratio). 
  

	10.	Call Option 

 The Investors shall have an exclusive and irrevocable option (the “Call
Option”) to purchase the Shares of another Party (the “Restricted Party”) at forty percent (40%) below the fair market value and in proportion to their shareholdings or in such other proportions and/or other terms as
they may agree in writing between them, if any of the following events (the “Triggering Event”) occurs: 
  

	 	(i)	the Restricted Party has pledged or otherwise encumbered or transferred its Shares in contravention of the provisions of this Agreement; 

 

	 	(ii)	the Restricted Party becomes insolvent, bankrupt or petitions or applies to any court, tribunal or other body or authority for appointment of, or there shall otherwise be appointed, any administrator, receiver,
liquidator, trustee or other similar officer of the Restricted Party or of all or a substantial part of the Restricted Party’s assets. 

The Restricted Party shall forthwith notify the Investors and the Company of the occurrence of any Triggering Event. 

The Investors may exercise the Call Option within sixty (60) days following notification of the Triggering Event by notice to the Restricted Party and
the Company. If the Call Option is not exercised within such sixty (60) day period or if the Investors do not exercise the Call Option over all of the Shares of the Restricted Party, the Company shall have the option to purchase the (remaining)
Shares of the Restricted Party at forty percent (40%) below the fair market value, which option shall be exercised within ninety (90) days following notification of the Triggering Event. 

  
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 The fair market value of the Restricted Party’s Shares will be determined as follows: 

 

	(a)	The fair market value shall be determined in due consideration of both the consolidated net equity and the projected future cash flows based on the most recent approved business plan of the Company, excluding any
control premium for obtaining a majority of the voting rights in the Company. 

  

	(b)	If the Parties, for any reason, cannot reach a binding agreement as to the fair market value of the Restricted Party’s Shares within sixty (60) days of notice being given by the Company, the Parties shall
appoint an independent appraiser by mutual agreement (the “Appraiser”). If the Parties cannot agree on the appointment of an Appraiser within seventy (70) days of the date of notice being given by the Company, the Appraiser
shall be appointed by the President of the Zurich Chamber of Commerce. The Appraiser shall determine the fair market value of the Restricted Party’s Shares (the “Final Price”) in accordance with standard valuation methods on
the basis of both the consolidated net equity and the projected future cash flows based on the most recent approved business plan of the Company and the value of comparator companies, excluding any control premium for obtaining a majority of the
voting rights in the Company. The Appraiser’s determination of the Final Price, which shall reflect the valuation methods applied, shall be issued in writing by registered mail to the Parties not later than ninety (90) days after the
Appraiser’s appointment and shall be final and binding upon the Parties. 

 Expenses incurred in connection with the purchase of the
Shares of the Restricted Party, including the Restricted Party’s own reasonable expenses, shall be borne by the Investors and/or the Company in proportion to the number of Shares purchased from the Restricted Party. 

 

	11.	Information Rights 

 Shareholders are entitled to receive 

 

	 	(i)	audited financial statements within 90 days after the end of each fiscal year, prepared in accordance with Swiss GAAP, IFRS or US GAAP as decided by the Board; 

 

	 	(ii)	yearly budget at least 30 days prior to such financial year; and 

  

	 	(iii)	quarterly business reports including a review of the Company’s operations as well as unaudited quarterly financial statements within 60 days from the end of each quarter. 

 

	12.	Escrow 

 All share certificates in respect of the Shares shall at all times be deposited under the name
of each Shareholder with ante treuhand ag, 3186 Düdingen (the “Escrow Agent”) according to the Escrow Agreement (the “Escrow Agreement”, attached as Annex III to this Agreement). The Shareholders that are not
yet party to the Escrow Agreement each undertake to execute and enter into the Escrow Agreement. 

  
 13 

			
		  	Execution Version
		
	Shareholders’ Agreement	  	Auris Medical AG

  

	13.	Duration 

 This Agreement shall remain in force for each Party as long as such Party has an equity
interest in the Company. This Agreement shall terminate by operation of law for any Party that ceases to be a shareholder of the Company. In such event, this Agreement shall continue in full force and effect among the remaining Parties. 

This Agreement shall terminate (except for the implementation of the preferences under clause 7, if applicable) upon the earlier of an IPO or an Exit Event.

 This Agreement shall expire by operation of law ten (10) years after it has become effective, unless restated by the Parties at least three
(3) months before such expiry. 
  

	14.	Miscellaneous 

  

	14.1.	No waiver 

 The failure of any of the Parties to enforce any of the provisions of this Agreement or any rights
with respect thereto shall in no way be considered as a waiver of such provisions or rights or in any way to affect the validity of this Agreement. The waiver of any breach of this Agreement by any Party hereto shall not operate to be construed as a
waiver of any other prior or subsequent breach. 
  

	14.2.	Severability 

 If any term or provision of this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have
been held to be invalid, illegal or unenforceable, had never been contained herein. 
  

	14.3.	Amendments 

 This Agreement including this clause may be modified or amended only by written agreement of the
Parties and any provision hereof may be waived only by a document signed by the Party waiving such provision. Notwithstanding anything contained herein to the contrary, the Parties acknowledge and agree that this Agreement may be amended in writing
by an instrument signed solely by the holders of 85% of the outstanding Shares in the Company (acting jointly) with binding effect on all other Parties; provided, however, that any such modification or amendment of any of the provisions of this
Agreement shall neither affect any accrued rights of any other Party nor impose any greater liability or any more onerous obligation than those contained in this Agreement on the other Parties who do not sign such modification or amendment. 

 

	14.4.	Assignment 

 This Agreement and the rights and liabilities arising thereunder may not be transferred to third
parties except with the prior written consent of the other Parties to this Agreement. Any Shareholder may, however, transfer this Agreement and / or the rights and liabilities arising hereunder in parts or in its entirety to an affiliated company in
which it owns at least fifty-one (51) per cent of all outstanding shares or voting rights, in which case the approval of the other 

  
 14 

			
		  	Execution Version
		
	Shareholders’ Agreement	  	Auris Medical AG

  

 
Parties shall be deemed to have been given. The approval of the other Parties shall also be deemed to have been given for transfer to an affiliated company that holds at least fifty-one
(51) per cent of all outstanding shares or voting rights of one of the Parties. 
  

	14.5.	Confidentiality 

 The Parties each undertake that they will not divulge or communicate to any person (other than
where relevant to their employees, affiliates, investors or consultants on a “need to know” basis and bound by respective confidentiality agreements) any information on the Company’s business or affairs or about the content of this
Agreement (“Confidential Information”) except for such information that: 
  

	 	(i)	was known or used by the receiving Party prior to its date of disclosure to the receiving Party as demonstrated by legally admissible evidence available to the receiving Party; 

 

	 	(ii)	either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party by sources other than the disclosing Party rightfully in possession of the Confidential Information;

  

	 	(iii)	either before or after the date of the disclosure to the receiving Party becomes published or otherwise part of the public domain through no fault or omission on the part of the receiving Party; 

 

	 	(iv)	is independently developed by or for the receiving Party without reference to or in reliance upon the Confidential Information as demonstrated by competent written records; or 

 

	 	(v)	is required to be disclosed by the receiving Party to comply with applicable laws or regulations or to defend or prosecute litigation, provided that the receiving Party provides prior written notice of such disclosure
to the disclosing Party and takes reasonable and lawful actions to avoid or minimize the degree of such disclosure. 

  

	14.6.	Entire agreement 

 This Agreement constitutes the entire agreement between the Parties and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or written, between the Parties regarding the subject matter hereof. There are no representations, warranties, conditions or other agreements, express or implied, statutory or
otherwise, between the Parties in connection with the subject matter of this Agreement, except as specifically set forth herein and the Parties have not relied and are not relying on any other information, discussion or understanding in entering
into and completing the transactions contemplated by this Agreement. 
  

	14.7.	Governing law and jurisdiction 

 This Agreement shall be governed by and be in accordance with Swiss law. Any
disputes between the Parties arising out of or in connection with this Agreement shall be subject to the exclusive jurisdiction of the Commercial Court of the Canton of Zurich, Switzerland. 

Executed in 1 copy. 

xxx        Execution sheet on next page        xxx 

  
 15 

			
		  	Execution Version
		
	Shareholders’ Agreement	  	Auris Medical AG

  

			
	Sofinnova Venture Partners VIII, L.P.
		
	By:	 	Sofinnova Management VIII, L.L.C.
		 	its General Partner
		
	By	 	

		 	  

		 	James Healy, Managing Member
	
	Sofinnova Capital VII FCPR
		
	By:	 	Sofinnova Partners SAS
		 	its General Partner
		
	By	 	  

		 	Antoine Papiernik, Managing Partner
	
	Auris Medical AG
	
	    
	  

	Thomas Meyer, Chairman of the Board

  
 16 

			
		  	Execution Version
		
	Shareholders’ Agreement	  	Auris Medical AG

  

			
	Sofinnova Venture Partners VIII, L.P.
		
	By:	 	Sofinnova Management VIII, L.L.C.
		 	its General Partner
		
	By	 	
		 	  

		 	James Healy, Managing Member
	
	Sofinnova Capital VII FCPR
		
	By:	 	Sofinnova Partners SAS
		 	its General Partner
		
	By	 	

		 	  

		 	Antoine Papiernik, Managing Partner
	
	Auris Medical AG
	
	    
	  

	Thomas Meyer, Chairman of the Board

  
 17 

			
		  	Execution Version
		
	Shareholders’ Agreement	  	Auris Medical AG

  

			
	Sofinnova Venture Partners VIII, L.P.
		
	By:	 	Sofinnova Management VIII, L.L.C.
		 	its General Partner
		
	By	 	
		 	  

		 	James Healy, Managing Member
	
	Sofinnova Capital VII FCPR
		
	By:	 	Sofinnova Partners SAS
		 	its General Partner
		
	By	 	  

		 	Antoine Papiernik, Managing Partner
	
	Auris Medical AG
	
	

	  

	Thomas Meyer, Chairman of the Board

  
 18 

			
	Shareholders’ Agreement	  	Auris Medical AG

  

			
	Auris Medical AG
	
	
	  

	
	Thomas Meyer, Chairman of the Board
	
	Allianz Innovation 7 FCPI
	Idinvest Croissance 2005 FCPI
	Allianz Innovation 8 FCPI
	Banque Postale Innovation 3 FCPI
	
	Each and all by: ID Invest
		
	By:	 	

		 	  

		 	Benoist Grossmann

  
 19 

			
	Shareholders’ Agreement	  	Auris Medical AG

  

							
	ZKB Pharma Vision Fonds	 		 	
	Adamant Global Healthcare Fonds	 		 	
	Adamant Global Generika Fonds	 		 	
	Adamant Global Biotech Fonds	 		 	
			
	Each an all by: Balfidor Fondsleitung AG	 		 	
				
	By:	 	

	 		 	

		 	  
	 		 	  

				
		 	Alexander Müller	 		 	Markus Pfister
			
	Phonak AG	 		 	
				
	By:	 		 		 	
		 	  
	 		 	
		 	Thomas Meyer (proxy)	 		 	

  
 20 

			
		  	Execution Version
		
	Shareholders’ Agreement	  	Auris Medical AG

  

							
	Allianz Innovation 7 FCPI	 		 	
	Idinvest Croissance 2005 FCPI	 		 	
	Allianz Innovation 8 FCPI	 		 	
	Banque Postale Innovation 3 FCPI	 		 	
			
	Each and all by: ID Invest	 		 	
				
	By:	 		 		 	
		 	  
	 		 	
		 	Benoist Grossmann	 		 	
			
	ZKB Pharma Vision Fonds	 		 	
	Adamant Global Healthcare Fonds	 		 	
	Adamant Global Generika Fonds	 		 	
	Adamant Global Biotech Fonds	 		 	
			
	Each and all by: Balfidor Fondsleitung AG	 		 	
				
	By:	 		 		 	
		 	  
	 		 	  

		 	Markus Pfister	 		 	Alexander Müller
			
	Phonak AG	 		 	
				
	By:	 	

	 		 	
		 	  
	 		 	
		 	Thomas Meyer (proxy)	 		 	

  
 21 

			
		  	Execution Version
		
	Shareholders’ Agreement	  	Auris Medical AG

  

	
	

	  

	Thomas Meyer
	
	

	  

	Daniel Gutenberg (by Thomas Meyer, proxy)
	
	

	  

	Gerhard Jansen (by Thomas Meyer, proxy)
	
	

	  

	Martin Oberholzer (by Thomas Meyer, proxy)
	
	

	  

	Oliver Walker (by Thomas Meyer, proxy)
	
	

	  

	Heinz Winzeler (by Thomas Meyer, proxy)

  
 22 

			
	Shareholders’ Agreement	  	Auris Medical AG

  

 Annex I: Shareholders 

C Investors 
 Sofinnova Venture Partners VIII, L.P. 

2800 Sand Hill Road, Suite 150 
 Menlo Park, CA 94025 

Sofinnova Capital VII FCPR 
 c/o Sofinnova Partners 

17, rue de Surène 
 75008 Paris 

France 
 Other shareholders 

Thomas Meyer 
 Birkenweg 6 

CH-4528 Zuchwil 
 IDinvest 

117, Avenue des Champs-Elysées 
 FR-75008 Paris 

Balfidor Fondsleitung AG 
 c/o Adamant Biomedical Investments AG

 Freischützgasse 3 
 CH-8004 Zürich 

Phonak AG 
 Laubisrütistrasse 28 

CH-8712 Stäfa 
 Daniel Gutenberg 

Inselweg 28 
 CH-8640 Hurden 

Gerhard Jansen 
 Quellenrain 15 

CH-3063 Ittigen 
 Martin Oberholzer 

Rohnenrainweg 4 
 CH-8835 Feusisberg 

  
 23 

			
	Shareholders’ Agreement	  	Auris Medical AG

  

 Oliver Walker 

Pestalozzistrasse 5 
 CH-5000 Aarau 

Heinz Winzeler 
 Klotenerstrasse 13 

CH-8304 Wallisellen 
 Company: 

Auris Medical AG 
 Falknerstrasse 4 

CH-4001 Basel 

  
 24 

			
	Shareholders’ Agreement	  	Auris Medical AG

  

 Annex II: Investments and Shareholdings 

The Company’s capital structure after the closing of the Series C financing round closings is set forth below: 

 

																																																					
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	First Tranche	 	 	Second Tranche	 	 	Third Tranche	 
	 Investor
	 	Common	 	 	Series A	 	 	Series B	 	 	Initial Closing	 	 	Second Closing	 	 	Third Closing	 
	 	 	Shares	 	 	%	 	 	Shares	 	 	%	 	 	Shares	 	 	%	 	 	Fully
Diluted
+ ESO	 	 	Shares	 	%	 	Fully
Diluted
+ ESO	 	 	Shares	 	%	 	Fully
Diluted
+ ESO	 	 	Shares	 	%	 	Fully
Diluted
+ ESO	 
																	
	 Thomas Meyer, CH-Zuchwil
	 	 	2’904	 	 	 	100	% 	 	 	239’990	 	 	 	100.0	% 	 	 	23’606	 	 	 	10.7	% 	 	 	56.6	% 	 		 		 	 	40.6	% 	 		 		 	 	35.0	% 	 		 		 	 	32.2	%
																	
	 IDinvest, FR-Paris
	 				 				 				 				 	 	69’276	 	 	 	31.4	% 	 	 	14.7	% 	 		 		 	 	10.6	% 	 		 		 	 	9.1	% 	 		 		 	 	8.4	%
																	
	 Allianz Innovation 7 FCPI
	 				 				 				 				 	 	15’241	 	 				 				 		 		 				 		 		 				 		 		 			
																	
	 Idinvest Croissance 2005 FCPI
	 				 				 				 				 	 	19’397	 	 				 				 		 		 				 		 		 				 		 		 			
																	
	 Allianz Innovation 8 FCPI
	 				 				 				 				 	 	27’019	 	 				 				 		 		 				 		 		 				 		 		 			
																	
	 Banque Postale Innovation 3 FCPI
	 				 				 				 				 	 	7’619	 	 				 				 		 		 				 		 		 				 		 		 			
																	
	 ZKB, CH-Zurich
	 				 				 				 				 	 	86’785	 	 	 	39.4	% 	 	 	18.4	% 	 		 		 	 	13.2	% 	 		 		 	 	11.4	% 	 		 		 	 	10.5	%
																	
	 ZKB Pharma Vision Fonds
	 				 				 				 				 	 	37’500	 	 				 				 		 		 				 		 		 				 		 		 			
																	
	 Adamant Global Medtech Fonds
	 				 				 				 				 	 	9’535	 	 				 				 		 		 				 		 		 				 		 		 			
																	
	 Adamant Global Generika Fonds
	 				 				 				 				 	 	23’000	 	 				 				 		 		 				 		 		 				 		 		 			

  
 25 

			
	Shareholders’ Agreement	  	Auris Medical AG

  

																																																																	
	 Adamant Global Biotech Fonds
	 				 				 				 				 	 	16’750	 	 				 				 				 				 				 				 				 				 				 				 			
																	
	 Phonak AG, CH-Stäfa
	 				 				 				 				 	 	22’080	 	 	 	10.0	% 	 	 	4.7	% 	 				 				 	 	3.4	% 	 				 				 	 	2.9	% 	 				 				 	 	2.7	%
																	
	 Daniel Gutenberg, CH-Küsnacht
	 				 				 				 				 	 	1’776	 	 	 	0.8	% 	 	 	0.4	% 	 				 				 	 	0.3	% 	 				 				 	 	0.2	% 	 				 				 	 	0.2	%
																	
	 Gerhard Jansen, CH-Ittigen
	 				 				 				 				 	 	8’632	 	 	 	3.9	% 	 	 	1.8	% 	 				 				 	 	1.3	% 	 				 				 	 	1.1	% 	 				 				 	 	1.0	%
																	
	 Martin Oberholzer, CH-Feusisberg
	 				 				 				 				 	 	1’269	 	 	 	0.6	% 	 	 	0.3	% 	 				 				 	 	0.2	% 	 				 				 	 	0.2	% 	 				 				 	 	0.2	%
																	
	 Oliver Walker, CH-Aarau
	 				 				 				 				 	 	2’500	 	 	 	1.1	% 	 	 	0.5	% 	 				 				 	 	0.4	% 	 				 				 	 	0.3	% 	 				 				 	 	0.3	%
																	
	 Heinz Winzeler, CH-Wallisellen
	 				 				 				 				 	 	4’440	 	 	 	2.0	% 	 	 	0.9	% 	 				 				 	 	0.7	% 	 				 				 	 	0.6	% 	 				 				 	 	0.5	%
																	
	 Sofinnova Ventures
	 				 				 				 				 				 				 				 	 	94’545	 	 	 	51.0	% 	 	 	14.4	% 	 	 	53’182	 	 	 	51.0	% 	 	 	19.4	% 	 	 	34’273	 	 	 	51.0	%	 	 	22.0	%
																	
	 Sofinnova Partners
	 				 				 				 				 				 				 				 	 	90’910	 	 	 	49.0	% 	 	 	13.8	% 	 	 	51’136	 	 	 	49.0	% 	 	 	18.7	% 	 	 	32’954	 	 	 	49.0	%	 	 	21.1	%
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
		 	 	2’904	 	 	 	100	% 	 	 	239’990	 	 	 	100.0	% 	 	 	220’364	 	 	 	100.0	% 	 	 	98.3	% 	 	 	185’455	 	 	 	100.0	% 	 	 	98.8	% 	 	 	104’318	 	 	 	100.0	% 	 	 	99.0	% 	 	 	67’227	 	 	 	100.0	% 	 	 	99.1	%
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Stock Options
	 	 	7’860	 	 				 				 				 				 				 	 	1.7	% 	 				 				 	 	1.2	% 	 				 				 	 	1.0	% 	 				 				 	 	0.9	%
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
		 				 				 	 	471’118	 	 				 				 				 	 	100.0	% 	 	 	656’573	 	 				 	 	100.0	% 	 	 	760’891	 	 				 	 	100.0	% 	 	 	828’118	 	 				 	 	100.0	%
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

  
 26EX-10.5

 Exhibit 10.5 

LOAN AGREEMENT MADE AS OF 9 DECEMBER 2013 

between 
 Sofinnova Capital VII
FCPR / Sofinnova Venture Partners VIII, L.P. 
 and 

Auris Medical AG 

 Convertible Loan Agreement 2013-12-09 

This loan agreement, as it may be amended at any time (the/this “Agreement”) is made as of 9 December 2013 between: 

Sofinnova Venture Partners VIII, L.P., 2800 Sand Hill Road, Suite 150, Menlo Park, CA 94025, USA 

and 
 Sofinnova Capital VII FCPR, c/o Sofinnova Partners,
16-18 Rue du 4 Septembre, 75002 Paris, France  
 (both together the “Lenders”); 

and 
 Auris Medical AG, Falknerstrasse 4,
4001 Basel, Switzerland 
 (the “Borrower” or the “Company”). 

(each the Lenders and the Borrower or the Company individually also a “Party”, and jointly the “Parties”) 

Preamble 
 Whereas: 

The Borrower has solicited the Lenders for the provision of capital to fund its expansion projects; 

The Lenders have agreed to provide the Borrower with loans in the total amount of CHF 13’769’976 (the “Loans”), which shall be
convertible into Series C Shares of the Company subject to and in accordance with the terms and conditions hereof. 
 NOW, THEREFORE IT IS AGREED AS
FOLLOWS: 
  

	1.	The Loans 

 The Lenders grant to the Borrower two Loans as follows: 

 

	 	•	 	Sofinnova Venture Partners VIII, L.P. a Loan in the amount of CHF 7’020’024 

  

	 	•	 	Sofinnova Capital VII FCPR a Loan in the amount of CHF 6’749’952 

  
 2 of 18 

 upon and subject to the terms and conditions of this Agreement. 

The Loans shall be paid on 9 December 2013. 
  

	2.	Interest 

 The Loans granted under this Agreement shall bear no interest. 

 

	3.	Repayment 

 Unless the Lenders or the Borrower have exercised their right to convert the
Loans in accordance with the terms of this Agreement, the Borrower shall have the right to repay the Loans at any time after 1 February 2014, at the latest at December 8, 2014. 

 

	4.	Subordination 

  

	4.1.	The Lenders hereby agree that the Loans under this Agreement shall be fully subordinated to any other non-subordinated indebtedness of the Borrower. 

 

	4.2.	The Lenders hereby agree to make, if any, all declarations required by the auditors in respect of the subordination, so that the Loans can be treated as subordinated in the financial accounts of the Borrower.

  

	5.	Disbursement and Payments 

  

	5.1.	All payments under this Agreement shall be in Swiss Francs (CHF): 

  

	 	(a)	in full, without any deduction, set-off or counterclaim; and 

  

	 	(b)	in immediately available cleared funds on the due date to the respective accounts of the Lenders or Borrower, as the case may be. 

  

	5.2.	Payments to be made by the Lenders to the Borrower shall be made in the following bank account: 

Beneficiary bank: UBS, 3000 Berne, Switzerland 

Swift code: UBSWCHZH80A 

Beneficiary name: Auris Medical AG, Falknerstrasse 4, 4001 Basel, Switzerland 

Beneficiary IBAN no.: CH68 0023 5235 9E32 9052 0 
  

	5.3.	Payments to be made by the Borrower to the Lenders shall be made to the bank accounts specified by the Lenders. 

  
 3 of 18 

	5.4.	Any payment which is due to be made on a Friday, Saturday or day on which banks in Basel-Stadt are authorized or obligated by law to close or are generally closed shall be made on the next business day, meaning a day
other than a Friday, Saturday or day on which banks in Basel-Stadt are authorized or obligated by law to close or are generally closed (the “Business Day”) 

 

	5.5.	The Lenders shall pay all costs, expenses, taxes and the like (and any interest payable on those amounts) to be borne by them in the currency in which they are incurred. 

 

	6.	Assignment and Transfer 

 The Borrower may not assign or transfer any of his rights and
obligations under this Agreement without the prior written consent of the Lenders. 
  

	7.	Conversion 

  

	7.1.	The Lenders shall have the unconditional right to convert the Loans in their entirety into new registered Series C Shares as follows: 

 

	 	•	 	Sofinnova Venture Partners VIII, L.P. 53’182 new registered Series C Shares of the Borrower with a par value of CHF 10; and 

  

	 	•	 	Sofinnova Capital VII FCPR 51’136 new registered Series C Shares of the Borrower with a par value of CHF 10 each. 

The Lenders shall exercise their conversion right as per this clause 7.1. by sending between 10 January 2014 and 17 January 2014 a
notice of conversion, duly signed by each of them, substantially in the form as set forth in Annex I and II (the “Lender’s Conversion Notice”). 
  

	7.2.	The Company shall have the unconditional right to convert, by 31 January 2014 at the latest, the Loans in their entirety into new registered Series C Shares as follows: 

 

	 	•	 	Sofinnova Venture Partners VIII, L.P. 53’182 new registered Series C Shares of the Borrower with a par value of CHF 10; and 

  

	 	•	 	Sofinnova Capital VII FCPR 51’136 new registered Series C Shares of the Borrower with a par value of CHF 10 each. 

The Company shall exercise its conversion right as per this clause 7.2. by sending between 10 January 2014 and 17 January 2014 a
notice of conversion, duly signed, substantially in the form as set forth in Annex III and IV (the “Borrower’s Conversion Notice”). 
  

	7.3.	The Conversion Price shall be the par value of Series C Shares in the amount of CHF 10 each plus the respective share-premium (the “Agio Amount”) of CHF 122 per share. 

  
 4 of 18 

	7.4.	The Parties agree that the number of new registered Series C shares into which the Loans can be converted shall be adjusted as required before the conversion in case of stock splits by the Borrower before completion of
the conversion. 

  

	7.5.	Within 10 days as from the receipt of the Notice of Conversion by the Borrower or the Lenders, the Parties shall take all necessary measures to satisfy the conversion of the Loan into Series C Shares in the Company as
follows: 

  

	 	(a)	the Borrower’s board of directors shall resolve on the increase in capital out of the authorized capital and issue 104’318 new Series C Shares to the Lenders; 

 

	 	(b)	the Borrower shall file the application with the Register of Commerce of the Canton of Basel-Stadt immediately upon receipt of the necessary documents and resolutions. 

 

	8.	Remedies, Waivers, Amendments and Consents 

  

	8.1.	Any amendment to this Agreement shall be in writing and signed by, or on behalf of, each party. 

  

	8.2.	Any waiver of any right or consent given under this Agreement is only effective if it is in writing and signed by the waiving or consenting party. It only applies in the circumstances for which it is given and shall not
prevent the party giving it from subsequently relying on the relevant provision. 

  

	8.3.	No delay or failure to exercise any right under this Agreement shall operate as a waiver of that right. 

  

	8.4.	No single or partial exercise of any right under this Agreement shall prevent any further exercise of the same right or any other right, under this Agreement. 

 

	8.5.	Rights and remedies under this Agreement are cumulative and do not exclude any rights or remedies provided by law or otherwise. 

  

	9.	Severance 

  

	9.1.	The invalidity, unenforceability or illegality of any provision (or part of a provision) of this Agreement under the laws of any jurisdiction shall not affect the validity, enforceability or legality of the other
provisions. 

  

	9.2.	If any invalid, unenforceable or illegal provision would be valid, enforceable and legal if some part of it were deleted, the provision shall apply with whatever modification as is necessary to give effect to the
commercial intention of the parties. 

  
 5 of 18 

	10.	Counterparts 

 This Agreement may be executed and delivered in any number of
counterparts, each of which is an original and which, together, have the same effect as if each party had signed the same document. 
  

	11.	Notices 

  

	11.1.	Each notice or other communication required to be given under this Agreement shall: 

  

	 	(a)	be in writing, delivered personally or sent by registered post, courier service or facsimile transmission; and 

  

	 	(b)	be sent: 

 to the Borrower at: 

Auris Medical AG 

Falknerstrasse 4 
 4001 Basel

 Switzerland 
 to the
Lenders at: 
  

			
	Sofinnova Venture Partners VIII, L.P.            	  	Sofinnova Capital VII FCPR
	2800 Sand Hill Road, Suite 150	  	c/o Sofinnova Partners
	Menlo Park, CA 94025	  	16-18 Rue du 4 Septembre
	USA	  	75002 Paris
		  	France

 or to such other address or contact details as are notified by one party to the other. 

 

	11.2.	Any notice or other communication that the Lenders gives shall be deemed to have been received: 

  

	 	(a)	if delivered personally or by courier service, at the time of delivery; 

  

	 	(b)	if posted, at the expiration of 48 hours after the envelope containing the same was delivered into the custody of the postal authorities; and 

 

	 	(c)	if sent by fax, at the time of completion of transmission by the sender, except that if a communication is received between 3:00 p.m. on a Business Day and 8:30 a.m. on the next Business Day, it shall be deemed to have
been received at 8:30 a.m. on the second of such Business Days. 

  

	11.3.	Any notice or other communication given to the Lenders shall be deemed to have been given only on actual receipt. 

  
 6 of 18 

	12.	Confidentiality 

 It is agreed that the information contained in this Agreement shall be
treated as strictly confidential. 
  

	13.	Governing Law 

 The validity, interpretation and performance of this Agreement shall be
governed by Swiss law. 
  

	14.	Settlement of Disputes 

 Any dispute or disagreement arising out of, or in connection
with, or in relation to, this Agreement shall be submitted to the Commercial Court of the Canton of Zurich. 
 This Agreement has been entered into on the
date stated at the beginning of it. 
 The Annexes of this Agreement shall form an integral part hereof. 

THE SIGNATURES OF THE PARTIES TO FOLLOW 

  
 7 of 18 

 LOAN AGREEMENT MADE AS OF 9 DECEMBER 2013 BETWEEN SOFINNOVA VENTURE PARTNERS VIII, L.P. AND SOFINNOVA CAPITAL VII
FCPR AND AURIS MEDICAL AG 
  

					
	SIGNATURE PAGE:
			
	The Borrower:	 		 	
			
	

	 		 	
	  
	 		 	
	Auris Medical AG	 		 	
			
	The Lenders:	 		 	
			
		 		 	
	  
	 		 	  

			
	Sofinnova Venture Partners VIII, L.P.	 		 	Sofinnova Capital VII FCPR

  
 8 of 18 

 LOAN AGREEMENT MADE AS OF 9 DECEMBER 2013 BETWEEN SOFINNOVA VENTURE PARTNERS VIII, L.P. AND SOFINNOVA CAPITAL VII
FCPR AND AURIS MEDICAL AG 
  

									
	SIGNATURE PAGE:
				
	The Borrower:	 		 		 	
				
		 		 		 	
	  
	 		 		 	
	Auris Medical AG	 		 		 	
				
	The Lenders:	 		 		 	
				
		 		 		 	
		 		 		 		 	  

	Sofinnova Venture Partners VIII, L.P.	 		 		 	Sofinnova Capital VII FCPR
					
	By:	 	Sofinnova Management VIII, L.L.C.	 		 		 	
		 	its General Partner	 		 		 	
					
	By	 	

	 		 		 	
		 	  
	 		 		 	
		 	Jim Healy, Managing Member	 		 		 	

  
 9 of 18 

 LOAN AGREEMENT MADE AS OF 9 DECEMBER 2013 BETWEEN SOFINNOVA VENTURE PARTNERS VIII, L.P. AND SOFINNOVA CAPITAL VII
FCPR AND AURIS MEDICAL AG 
  

					
	SIGNATURE PAGE:
			
	The Borrower:	 		 	
			
		 		 	
	  
	 		 	
	Auris Medical AG	 		 	
			
	The Lenders:	 		 	
			
		 		 	

	  
	 		 	  

			
	Sofinnova Venture Partners VIII, L.P.	 		 	Sofinnova Capital VII FCPR

  
 10 of 18 

	Annex I:	Lenders’ Conversion Notice 

  

 
  

					
		 		 	Sofinnova Venture Partners VIII, L.P.
		 		 	2800 Sand Hill Road, Suite 150
		 		 	Menlo Park, CA 94025
		 		 	USA

 Attn.: 
 Board of Directors 

Verwaltungsrat 
 Auris Medical AG 

Falknerstrasse 4 
 4001 Basel 

Lenders’ Conversion Notice 
 The
undersigned, Sofinnova Venture Partners VIII, L.P., herewith exercises its right to convert the loan in the amount of CHF 7’020’024 (the “Loan”) granted to Auris Medical AG in Basel (the “Company”)
as agreed in clause 7 of the loan agreement signed on 9 December 2013, into 53’182 new registered Series C Shares (the “Conversion Shares”) of the Company with an issue price of CHF 132 per Conversion Share (with a
par value of CHF 10 each). Accordingly, the undersigned herewith sets-off the Loan against its contribution for the Conversion Shares. 
 Accordingly, we
kindly ask you to proceed pursuant to clause 7 of the loan agreement. 
 Die Unterzeichnende, Sofinnova Venture Partners VIII, L.P.,
erklärt hiermit entsprechend der Ziffer 7 des am 9. Dezember 2013 unterzeichneten Darlehensvertrages, ihr Recht zur Umwandlung des an die Auris Medical AG in Basel (die “Gesellschaft”) gewährten Darlehens im Umfang von CHF
7’020’024 in 53’182 neue Series C Shares (“Wandelaktien”) der Gesellschaft mit einem Ausgabepreis in Höhe von CHF 132 pro Wandelaktie (mit einem Nennwert von je CHF 10) auszuüben. Zu diesem Zweck verrechnet die
Unterzeichnende ihre Darlehensforderung gegen die Wandelaktien. 
 Entsprechend bitten wir Sie höflich, die Schritte gemäss Klausel 7 des
Darlehensvertrages vorzunehmen. 

  
 11 of 18 

					
	  
	 		 	
	Place, date	 		 	
			
	Sofinnova Venture Partners VIII, L.P., represented by	 		 	
			
	  
	 		 	  

	[—]	 		 	[—]

  
 12 of 18 

	Annex II:	Lenders’ Conversion Notice 

  

 
  

					
		 		 	Sofinnova Capital VII FCPR
		 		 	c/o Sofinnova Partners
		 		 	16-18 Rue du 4 Septembre
		 		 	75002 Paris
		 		 	France

 Attn.: 
 Board of Directors 

Verwaltungsrat 
 Auris Medical AG 

Falknerstrasse 4 
 4001 Basel 

Lenders’ Conversion Notice 
 The
undersigned, Sofinnova Capital VII FCPR, herewith exercises its right to convert the loan in the amount of CHF 6’749’952 (the “Loan”) granted to Auris Medical AG in Basel (the “Company”) as agreed
in clause 7 of the loan agreement signed on 9 December 2013, into 51’136 new registered Series C Shares (the “Conversion Shares”) of the Company with an issue price of CHF 132 per Conversion Share (with a par value of
CHF 10 each). Accordingly, the undersigned herewith sets-off the Loan against its contribution for the Conversion Shares. 
 Accordingly, we kindly ask you
to proceed pursuant to clause 7 of the loan agreement. 
 Die Unterzeichnende, Sofinnova Capital VII FCPR, erklärt hiermit
entsprechend der Ziffer 7 des am 9. Dezember 2013 unterzeichneten Darlehensvertrages, ihr Recht zur Umwandlung des an die Auris Medical AG in Basel (die “Gesellschaft”) gewährten Darlehens im Umfang von CHF 6’749’952 in
51’136 neue Series C Shares (“Wandelaktien”) der Gesellschaft mit einem Ausgabepreis in Höhe von CHF 132 pro Wandelaktie (mit einem Nennwert von je CHF 10) auszuüben. Zu diesem Zweck verrechnet die Unterzeichnende ihre
Darlehensforderung gegen die Wandelaktien. 
 Entsprechend bitten wir Sie höflich, die Schritte gemäss Klausel 7 des Darlehensvertrages
vorzunehmen. 

  
 13 of 18 

					
	  
	 		 	
	Place, date	 		 	
			
	Sofinnova Capital VII FCPR, represented by	 		 	
			
	  
	 		 	  

	[—]	 		 	[—]

  
 14 of 18 

	Annex III:	Borrower’s Conversion Notice 

  

 
  

					
		 		 	Auris Medical AG
		 		 	Falknerstrasse 4
		 		 	4001 Basel
		 		 	Switzerland

 Attn.: 
 Board of Directors 

Sofinnova Venture Partners VIII, L.P. 
 2800 Sand Hill Road, Suite
150 
 Menlo Park, CA 94025 
 Borrower’s
Conversion Notice 
 The undersigned, Auris Medical AG, herewith exercises its right to convert the loan in the amount of CHF 7’020’024
(the “Loan”) granted by Sofinnova Venture Partners VIII, L.P. (the “Lender”) as agreed in clause 7 of the loan agreement signed on 9 December 2013, into 53’182 new registered Series C Shares (the
“Conversion Shares”) of the Company with an issue price of CHF 132 per Conversion Share (with a par value of CHF 10 each). Accordingly, the Lender’s Loan is set-off against the Conversion Shares. 

We kindly ask you to countersign and return this Conversion Notice and the respective Subscription Form enclosed hereto. 

Die Unterzeichnende, Auris Medical AG, erklärt hiermit entsprechend der Ziffer 7 des am 9. Dezember 2013 unterzeichneten
Darlehensvertrages, ihr Recht zur Umwandlung des von Sofinnova Capital VII FCPR (die “Darlehensgeberin”) gewährten Darlehens im Umfang von CHF 7’020’024 in 53’182 neue Series C Shares (“Wandelaktien”) der
Gesellschaft mit einem Ausgabepreis in Höhe von CHF 132 pro Wandelaktie (mit einem Nennwert von je CHF 10) auszuüben. Damit gilt die Darlehensforderung der Darlehensgeberin gegen die Wandelaktien als verrechnet. 

Wir bitten Sie höflich, diese Umwandlungsanzeige und den entsprechend beiliegenden Zeichnungsschein gegenzuzeichnen und an uns zurückzusenden.

  
 15 of 18 

					
	  
	 		 	
	Place, date	 		 	
	
	Auris Medical AG, represented by / vertreten durch
			
	  
	 		 	  

	[—]	 		 	[—]
	
	Sofinnova Capital VII FCPR, represented by / vertreten durch
			
	  
	 		 	  

	[—]	 		 	[—]

  
 16 of 18 

	Annex IV:	Borrower’s Conversion Notice 

  

 
  

			
		 	Auris Medical AG
		 	Falknerstrasse 4
		 	4001 Basel
		 	Switzerland

 Attn.: 
 Board of Directors 

Sofinnova Capital VII FCPR 
 c/o Sofinnova Partners 

16-18 Rue du 4 Septembre 
 75002 Paris 

France 
 Borrower’s Conversion Notice

 The undersigned, Auris Medical AG, herewith exercises its right to convert the loan in the amount of CHF 6’749’952 (the
“Loan”) granted by Sofinnova Capital VII FCPR (the “Lender”) as agreed in clause 7 of the loan agreement signed on 9 December 2013, into 51’136 new registered Series C Shares (the “Conversion
Shares”) of the Company with an issue price of CHF 132 per Conversion Share (with a par value of CHF 10 each). Accordingly, the Lender’s Loan receivable is set-off against the Conversion Shares. 

We kindly ask you countersign and return this Conversion Notice and the respective Subscription Form enclosed hereto. 

Die Unterzeichnende, Auris Medical AG, erklärt hiermit entsprechend der Ziffer 7 des am 9. Dezember 2013 unterzeichneten
Darlehensvertrages, ihr Recht zur Umwandlung des von Sofinnova Capital VII FCPR (die “Darlehensgeberin”) gewährten Darlehens im Umfang von CHF 6’749’952 in 51’136 neue Series C Shares (“Wandelaktien”) der
Gesellschaft mit einem Ausgabepreis in Höhe von CHF 132 pro Wandelaktie (mit einem Nennwert von je CHF 10) auszuüben. Damit gilt die Darlehensforderung der Darlehensgeberin gegen die Wandelaktien als verrechnet. 

Wir bitten Sie höflich, diese Umwandlungsanzeige und den entsprechend beiliegenden Zeichnungsschein gegenzuzeichnen und an uns zurückzusenden.

  
 17 of 18 

					
	  
	 		 	
	Place, date	 		 	
	
	Auris Medical AG, represented by / vertreten durch
			
	  
	 		 	  

	[—]	 		 	[—]
	
	Sofinnova Capital VII FCPR, represented by / vertreten durch
			
	  
	 		 	  

	[—]	 		 	[—]

  
 18 of 18

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