Document:

Exhibit 10.1

 

WARRANT EXERCISE AGREEMENT

 

This Warrant Exercise
Agreement (this “Agreement”), dated as of September 18, 2019, is by and between Genius Brands International,
Inc., a Nevada corporation (the “Company”), and the undersigned holder (the “Holder”) of
warrants to purchase shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”).

 

WHEREAS, the Holder
beneficially owns in the aggregate 945,894 warrants to purchase Common Stock at an exercise price of $2.12 per share that are exercisable
until February 19, 2020, as set forth on the Holder's signature page hereto (the “Original Warrants”).

 

WHEREAS, in order to
induce the Holder to exercise the Original Warrants, the Company and the Holder hereby agree to amend the Warrants to reduce the
exercise price thereof to $0.76 (the "Amended Exercise Price").

 

WHEREAS, the Holder
desires to exercise such Original Warrants in the amounts set forth on the applicable signature pages hereto using the Amended
Exercise Price. The shares of Common Stock underlying the Original Warrants are referred to herein as the “Warrant Shares”.

 

NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the Holder and the Company agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1         Definitions. Capitalized
terms not defined in this Agreement shall have the meanings ascribed to such terms in the Original Warrants.

 

ARTICLE II

EXERCISE OF ORIGINAL WARRANTS

 

Section 2.1         Exercise of Warrants.
Subject to the provisions of Section 2.5 below, by executing this Agreement, the Company and the Holder hereby agree that the Holder
shall be deemed to have exercised the number of Original Warrants set forth on the signature page hereto for aggregate cash proceeds
to the Company in the amount set forth on the Holder’s signature page hereto, pursuant to the terms of the Original Warrants,
except that the exercise price thereunder shall be the Amended Exercise Price (as defined below). The Holder shall deliver the
aggregate cash exercise price for such Original Warrants to the bank account set forth on the Company’s signature page hereto
within two Trading Days after the date hereof and the Company shall deliver the Warrant Shares to the Holder via the Depository
Trust Company Deposit or Withdrawal at Custodian system pursuant to the terms of the Original Warrants, but pursuant to DWAC instructions
set forth on the Holder’s signature page hereto. The date of the closing of the exercise of the Original Warrants shall be
referred to as the “Closing Date”.

 

Section 2.2         Filing of Form
8-K. Prior to 9:00 am ET on September 19, 2019, the Company shall issue a Current Report on Form 8-K, reasonably acceptable
to the Holder disclosing the material terms of the transactions contemplated hereby, which shall include this form of Agreement
(the “8-K Filing”).

 

Section 2.3.        Amendment to Exercise
Price in Original Warrants. The Company and the Holder hereby agree to amend and restate Section 2(b) of the Original Warrants
as follows: "b) Exercise Price. The exercise price per share of the Common Stock under this Warrant Shall be (i) $0.76
(the "Exercise Price").

 

Section 2.4.        Subsequent Equity
Financing. From the date hereof until thirty (30) Trading Days after the Closing Date, neither the Company nor any
Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of
Common Stock or Common Stock Equivalents at an effective purchase price less than $0.76 per share of Common Stock.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1          Representations
and Warranties of the Company. The Company hereby makes the representations and warranties set forth below to the Holder that
as of the date of its execution of this Agreement:

 

(a)        Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement
by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action
on the part of such Company and no further action is required by such Company, its board of directors or its stockholders in connection
therewith. This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof will constitute
the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

 

(b)        Organization.
The Company is a duly organized and validly existing corporation in good standing under the laws of the State of Nevada.

 

(c)        Registration
Statement. The Warrant Shares are registered for issuance on a Form S-3 Registration Statement and the Company knows of no
reasons why such registration statement shall not remain available for the resale by the Holder of such Warrant Shares for the
foreseeable future. The Company shall use commercially reasonable efforts to keep the Registration Statement effective and available
for the resale of the Warrant Shares underlying the Original Warrants until all Original Warrants are exercised and the Warrant
Shares are sold by the Holder. If the Company is unable to keep the Registration Statement effective and available, the Holder
may exercise the Original Warrants by means of a cashless exercise in accordance with the terms of the Original Warrants, but using
the Amended Exercise Price.

 

(d)        No
Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’s
certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien
upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument
(evidencing Company debt or otherwise) or other material understanding to which the Company is a party or by which any property
or asset of the Company is bound or affected which have not been waived, or (iii) conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which
the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the
Company is bound or affected.

 

(e)        Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of Holder or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the
Holder will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure
furnished by or on behalf of the Company to the Holder regarding the Company and its Subsidiaries, their respective businesses
and the transactions contemplated hereby, including but not limited to the disclosure set forth in the SEC Reports, is true and
correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in light of the circumstances under which they were made, not misleading. As used herein, “SEC
Reports” means all reports, schedules, forms, statements and other documents required to be filed by the Company with
the Commission pursuant to the reporting requirements of the 1934 Act, including all exhibits included therein and financial statements,
notes and schedules thereto and documents incorporated by reference therein.

 

Section 3.2          Representations
and Warranties of the Holder. The Holder hereby makes the representations and warranties set forth below to the Company that
as of the date of its execution of this Agreement.

 

(a)        Due
Authorization. The Holder represents and warrants that (i) the execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on its behalf and
(ii) this Agreement has been duly executed and delivered by the Holder and constitutes the valid and binding obligation of
the Holder, enforceable against it in accordance with its terms.

 

(b)        No
Conflicts. The Holder represents and warrants that the execution, delivery and performance of this Agreement by the Holder
and the consummation by the Holder of the transactions contemplated hereby do not and will not: (i) conflict with or violate
any provision of the Holder’s organizational or charter documents, or (ii) conflict with or result in a violation of
any agreement, law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
which would interfere with the ability of the Holder to perform its obligations under this Agreement.

 

(c)        Access
to Information. The Holder acknowledges that it has had the opportunity to review this Agreement and the SEC Reports and has
been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the exercise of the Original Warrants and the merits and risks of investing
in the Warrant Shares; (ii) access to information about the Company and its financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. The Holder acknowledges and agrees that neither Bradley
Woods &Co., Ltd. (the “Advisor”) nor any Affiliate of the Advisor has provided the Holder with any information
or advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Advisor nor any
Affiliate has made or makes any representation as to the Company or the quality of the securities issued and issuable hereunder
and the Advisor and any Affiliate may have acquired non-public information with respect to the Company which the Holder agrees
need not be provided to it. In connection with the issuance of the securities hereunder to the Holder, neither the Advisor
nor any of its Affiliates has acted as a financial advisor or fiduciary to the Holder.

 

(d)        Holder
Status. The Holder represents and warrants that is an “accredited investor” as defined in Rule 501 under the Securities
Act.

 

(e)        Knowledge.
The Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Warrant Shares, and
has so evaluated the merits and risks of such investment. The Holder is able to bear the economic risk of an investment in the
Warrant Shares and, at the present time, is able to afford a complete loss of such investment.

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1         Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be made by email
to the email address of the Holder set forth on Holders’ signature page.

 

Section 4.2         Survival. All
warranties and representations (as of the date such warranties and representations were made) made herein or in any certificate
or other instrument delivered by it or on its behalf under this Agreement shall be considered to have been relied upon by the parties
hereto and shall survive the issuance of the Warrant Shares. This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties; provided however that no party may assign this Agreement or the obligations
and rights of such party hereunder without the prior written consent of the other parties hereto.

 

Section 4.3         Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission,
such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile signature page were an original thereof.

 

Section 4.4         Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.

 

Section 4.5         Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be
determined pursuant to the Governing Law provision of the Original Warrants.

 

Section 4.6          Entire Agreement.
The Agreement, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

Section 4.7         Construction.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.

 

Section 4.8         Fees and Expenses.
Except as expressly set forth herein, each party shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in
connection with the delivery of any Warrant Shares.

 

 

IN WITNESS WHEREOF, the undersigned
have executed this Warrant Exercise Agreement as of the date first written above.

 

COMPANY:

 

GENIUS BRANDS INTERNATIONAL, INC.

 

 

By:  _______________________________

Name:   ____________________________

Title:  ______________________________

 

Bank Account and Wire Instructions

 

[insert]

 

 

ANSON INVESTMENTS MASTER FUND LP

 

By:  _______________________________

Name:   ____________________________

Title:  ______________________________

 

 

[HOLDER SIGNATURE PAGES TO GNUS 

WARRANT EXERCISE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed by their respective authorized signatories as of the date first indicated above.

 

	 	 	 
	Name of Holder:	 	
 

	 	 	 
	Signature of Authorized Signatory of Holder:	 	
 

	 	 	 
	Name of Authorized Signatory:	 	
 

	 	 	 
	Title of Authorized Signatory:	 	
 

	 	 	 
	Email Address of Holder:	 	
 

	 	 	 
	Number of Original Warrants held: 	 	
 

	
         

        Number of Original Warrants deemed exercised:
	 	
 

	 	 	 
	Aggregate Exercise Price of  Warrants deemed Exercised:	 	
 

	
         

         
	 
	Warrant Shares underlying Warrants deemed Exercised:	 	                                                     
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

Instructions for Warrant Shares
to be issued upon initial exercise of Original Warrants: _________________

 

 

	 
	 
	 

 

 

DWAC Instructions:Blueprint

 

EXHIBIT 10.1

 

 

 

CONTINGENT VALUE RIGHTS AGREEMENT

 

THIS
CONTINGENT VALUE RIGHTS AGREEMENT, dated as of ____, 2019 (this
“Agreement”), is
entered into by and among Aytu Bioscience Inc., a Delaware
corporation (the “Company”), Vivian Liu as
representative of the Holders (the “Holders’ Representative”)
and ____________ (the “Rights
Agent”).

 

A.           The
Company, Aytu Acquisition Sub, Inc., a wholly owned subsidiary of the
Company (“Merger
Sub”), and Innovus Pharmaceuticals, Inc., a Nevada
corporation (“Innovus”) have entered into an
Agreement and Plan of Merger dated as of September 12, 2019 (the
“Merger
Agreement”), pursuant to which Merger Sub will merge
with and into Innovus (the “Merger”).

 

B.           In
connection with the effectiveness of the Merger, the Company wishes
to create and issue contingent value rights containing the rights
described herein to the record holders of the Company Common Stock
(as hereinafter defined) as of a record date prior to the
effectiveness of the Merger.

 

Accordingly, and in
consideration of the premises and the consummation of the
transactions referred to above, it is mutually covenanted and
agreed, for the benefit of the Holders (as hereinafter defined), as
follows:

 

ARTICLE I.

Definitions

 

1.1    

Definitions.

 

(a)           For
all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

 

(i)           all
accounting terms used herein and not expressly defined herein have
the meanings assigned to such terms in accordance with United
States generally accepted accounting principles, as in effect on
the date hereof;

 

(ii)           unless
the context otherwise requires, words describing the singular
number include the plural and vice versa, words denoting any gender
include all genders and words denoting natural Persons include
corporations, partnerships and other Persons and vice
versa;

 

(iii)           the
words “include” and “including” and
variations thereof will not be deemed to be terms of limitation,
but rather will be deemed to be followed by the words
“without limitation”;

 

(iv)           the
terms “hereof”, “hereunder”,
“herein” and words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or
provision of this Agreement; and

 

 

 

 

 

 

(v)           the
Article and Section headings contained in this Agreement are for
reference purposes only and do not limit or otherwise affect any of
the substance of this Agreement.

 

(b)           The
following terms have the meanings ascribed to them as
follows:

 

“Achievement Certificate” has the
meaning set forth in Section 2.4(a).

 

“Acting Holders” means a
majority in interest of the Holders, but excluding any Holders that
serve or have served as an officer of the Company or on the
Company’s Board of Directors.

 

“Affiliates” means, with respect to any Person, any other
Person that directly or indirectly controls, is controlled by, or
is under common control with, such first
Person.

 

“Board of Directors” means the
board of directors of the Company.

 

“Board Resolution” means a copy of
a resolution certified by the secretary or an assistant secretary
of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such
certification, and delivered to the Rights Agent.

 

“Business Day” means each day other
than a Saturday, Sunday or any other day on which commercial banks
in New York, New York are authorized or required by law to
close.

 

“Change of Control” means (x) (i)
any consolidation or merger of the Company with or into any other
corporation or entity or Person or (ii) any other corporate
reorganization, in which the stockholders of the Company
immediately prior to such consolidation, merger or reorganization,
own less than 50% of the voting power of the surviving entity
immediately after such consolidation, merger or reorganization, or
(y) any sale of all or substantially all of the assets of the
Company.

 

“Common Stock” means the common
stock, $0.0001 par value, of the Company.

 

“Consumer Business Unit” means all
the product lines and products in development by Innovus and
acquired by the Company as a result of the Merger, together with
all future products lines developed or acquired primarily as a
result of the Merger or primarily developed by Dr. Bassam
Damaj.

 

 “CVR
Payment Amount” means the amount payable with respect
to the relevant Earnout Achievement, as determined on Exhibit A hereto.

 

“CVR Payment Date” means the date
(if any and if ever) that a CVR Payment Amount is payable by the
Company to the Holders, which date will be established pursuant to
Section
2.4.

 

“CVR Payment Shares” means, for any
particular CVR Payment Amount, that number of shares of Common
Stock determined by multiplying such CVR Payment Amount by an
exchange ratio, which shall be the lesser of (i) one divided by the
volume weighted average price of Common Stock as reported by
Bloomberg for a twenty (20) day trading period ending on the
Share Determination Date that is applicable to the Milestone Period
to which the CVR Payment Amount relates, and (ii)
..1667.

 

 

 

 

 

 

 

“CVR Register” has the meaning set
forth in Section
2.3(b).

 

“CVR Registrar” has the meaning set
forth in Section
2.3(b).

 

“CVR Shortfall” has the
meaning set forth in Section 4.5(b).

 

“CVRs” means the contingent value
rights issued by the Company pursuant to this
Agreement.

 

“De Minimis” has the meaning set
forth in Section
6.2.

 

 “Effective
Time” means the effective time of the Merger, pursuant
to the Merger Agreement. The Company shall notify the Rights Agent
of the Effective Time promptly after the occurrence
thereof.

 

“Holder” means a Person in whose
name a CVR is registered in the CVR Register.

 

“Holder Buyout Value” has the
meaning set forth in Section 6.2.

 

“Holders’
Representative” means the Holders’
Representative named in the first paragraph of this Agreement,
until a successor Holders’ Representative has become such
pursuant to the applicable provisions of this Agreement, and
thereafter “Holders’ Representative” will mean
such successor Holders’ Representative.

 

“Independent Accountant”
means an independent certified public accounting firm of nationally
recognized standing designated either (a) jointly by the
Holders’ Representative and the Company, or (b) if the
parties hereto fail to make a designation, jointly by an
independent public accounting firm selected by the Company and an
independent public accounting firm selected by the Holders’
Representative.

 

 “Earnout
Achievement” means the achievement of one or more of
the targets in the various Milestones, as described in Exhibit A hereto.

 

“Milestone” means each of the five
earnout milestones set forth on Exhibit A.

 

“Milestone Period” means the
calendar year-long measurement periods for each Milestone set forth
on Exhibit
A.

 

 “Non-Achievement
Certificate” has the meaning set forth in Section 2.4(b).

 

“Notice of Objection” has the
meaning set forth in Section 2.4(c).

 

“Objection Period” has the meaning
set forth in Section
2.4(c).

 

 

 

 

 

 

 

“Officer’s Certificate” means
a certificate signed by the chief executive officer, president,
chief financial officer or secretary of the Company, in his or her
capacity as such an officer, and delivered to the Rights
Agent.

 

“Permitted Transfer” means: (i) the
transfer of any or all of the CVRs (upon the death of the Holder)
by will or intestacy; (ii) transfer by instrument to an inter vivos
or testamentary trust in which the CVRs are to be passed to
beneficiaries upon the death of the trustee; (iii) transfers made
pursuant to a court order of a court of competent jurisdiction
(such as in connection with divorce, bankruptcy or liquidation);
(iv) if the Holder is a partnership or limited liability company, a
pro-rata distribution by the transferring partnership or limited
liability company to its partners or members, as applicable; (v) a
transfer made by operation of law (including a consolidation or
merger) or in connection with the dissolution, liquidation or
termination of any corporation, limited liability company,
partnership or other entity; (vi) a transfer from a
participant’s account in a tax-qualified employee benefit
plan to the participant or to such participant’s account in a
different tax-qualified employee benefit plan or to a tax-qualified
individual retirement account for the benefit of such participant;
(vii) a transfer from a participant in a tax-qualified employee
benefit plan, who received the CVRs from such participant’s
account in such tax-qualified employee benefit plan, to such
participant’s account in a different tax-qualified employee
benefit plan or to a tax-qualified individual retirement account
for the benefit of such participant; (viii) if a Holder is holding
on behalf of a beneficial owner, a transfer to such beneficial
owner or (ix) the transfer of any or all of the CVRs to the Company
or an Affiliate of the Company in a privately negotiated
transaction or a tender offer.

 

“Person” means an individual, a
corporation, a limited liability company, a partnership, an
association, a trust or any other entity or organization, including
a government or political subdivision or any agency or
instrumentality thereof.

 

“Pro Rata Share” means each
Holder’s pro rata share of a CVR Payment Amount based on the
number of CVRs held by such Holder as of the date of the
Achievement Certificate (or the date of final determination
pursuant to Section
2.4(c), as applicable) as reflected on the CVR Register in
proportion to all CVRs issued at any time (regardless of whether or
not some CVRs are no longer outstanding due to having been acquired
by the Company or for any other reason).

 

“Revenue Target Achievement”
means the achievement of the revenue target associated with a
particular Milestone.

 

“Rights Agent” means the Rights
Agent named in the first paragraph of this Agreement, until a
successor Rights Agent has become such pursuant to the applicable
provisions of this Agreement, and thereafter “Rights
Agent” will mean such successor Rights Agent.

 

“Rights Agent Fee” means the
agreed-upon fee of the Rights Agent to act in such capacity
pursuant to the terms of this Agreement.

 

“Share Determination Date” has the
meaning set forth in Section 2.4(d).

 

“Subsidiary” means any corporation
or other entity in which the Company owns at least a majority of
the stock or other equity interests.

 

 

 

 

 

“Surviving Person” has the meaning
set forth in Section
6.1(a)(i).

 

ARTICLE II.

Contingent Value Rights

 

2.1        

Authority;
Issuance of CVRs; Appointment of Rights Agent.

 

(a)           The
Company has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action
on the part of the Company and no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. No consent,
approval, order or authorization of, or registration, declaration
or filing with, any government authority is required by or with
respect to the Company in connection with the execution and
delivery of this Agreement by the Company or the consummation by
Company of the transactions contemplated hereby.

 

(b)           The
CVRs are a form of Merger Consideration described in the Merger
Agreement and will be issued in accordance with the terms and
conditions set forth in the Merger Agreement and this
Agreement.

 

(c)           The
Company hereby appoints the Rights Agent to act as rights agent for
the Company in accordance with the instructions hereinafter set
forth in this Agreement, and the Rights Agent hereby accepts such
appointment.

 

2.2     

Nontransferable.

 

The
CVRs may not be sold, assigned, transferred, pledged, encumbered or
in any other manner transferred or disposed of, in whole or in
part, other than through a Permitted Transfer.

 

2.3       

No
Certificate; Registration; Registration of Transfer; Change of
Address.

 

(a)           The
CVRs will be issued in book-entry form only and will not be
evidenced by a certificate or other instrument.

 

(b)           The
Rights Agent will keep a register (the “CVR Register”) for the
registration of CVRs. The Rights Agent is hereby initially
appointed CVR Registrar (the “CVR Registrar”) for the purpose of
registering CVRs and Permitted Transfers of CVRs as herein
provided. Upon any change in the identity of the Rights Agent, the
successor Rights Agent will automatically also become the successor
CVR Registrar.

 

 

 

 

 

 

 

(c)           Subject
to the restrictions on transferability set forth in Section 2.2, every request made
to effect a Permitted Transfer of a CVR must be in writing and
accompanied by a written instrument or instruments of transfer and
any other requested documentation in a form reasonably satisfactory
to the Company and the CVR Registrar, duly executed by the
registered Holder or Holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney, including
the evidence of authority of the party presenting the CVR for
transfer which authority may include, if applicable, a signature
guarantee from an eligible guarantor institution participating in a
signature guarantee program approved by the Securities Transfer
Association. A request for a transfer of a CVR must be accompanied
by such documentation establishing that the transfer is a Permitted
Transfer as may be reasonably requested by the Company and/or the
CVR Registrar, if appropriate. Upon receipt of such written request
and materials, the CVR Registrar will, subject to its reasonable
determination that the transfer instrument is in proper form and
the transfer otherwise complies with the other terms and conditions
herein, register the transfer of the CVRs in the CVR Register. All
duly transferred CVRs registered in the CVR Register will be the
valid obligations of the Company, evidencing the same right and
will entitle the transferee to the same benefits and rights under
this Agreement, as those previously held by the transferor. No
transfer of a CVR will be valid until registered in the CVR
Register, and any transfer not duly registered in the CVR Register
will be void and invalid. All costs and expenses related to any
transfer or assignment of the CVRs (including the cost of any
transfer tax) will be the responsibility of the
transferor.

 

(d)           A
Holder (or an authorized representative thereof) may make a request
to the CVR Registrar to change such Holder’s address of
record in the CVR Register. Upon receipt of such request, the CVR
Registrar will promptly record the change of address in the CVR
Register.

 

2.4     

Payment
Procedures.

 

(a)           No
later than February 28 of the year following the Milestone Period
relating to a particular Earnout Achievement, the Company will
deliver to the Holders’ Representative and the Rights Agent a
certificate (the “Achievement
Certificate”), certifying that the Holders are
entitled to receive a CVR Payment Amount (and setting forth the
calculation of such CVR Payment Amount). A Milestone Period can be used to measure the
attainment of more than one Revenue Target Achievement in the
following circumstances: if the Consumer Business Unit records any
of the annual revenue targets in a Milestone Period that is earlier
than the identified Milestone Period for such target, then the
Company shall calculate and deliver the applicable CVR Payment
Amount also at that earlier time. For example, if the Consumer
Business Unit achieves $40 million in revenues in calendar year
2020, then, no later than February 28, 2021, the Company
will deliver to the Holders’ Representative and the Rights
Agent an Achievement Certificate certifying that the Holders are
entitled to receive the CVR Payment
Amounts associated with the Revenue Target Achievement for both
Milestone 2 and Milestone 3. For the avoidance of doubt, a CVR
Payment Amount may be earned only once following the initial
Earnout Achievement of each revenue target and no amounts shall be
due or payable for subsequent or repeated achievement of the same
revenue target.

 

(b)           If
no Earnout Achievement has occurred during a particular Milestone
Period, then, as soon as reasonably practicable after the end of
such Milestone Period, but in no event later than February 28 of
the year following such Milestone Period, the Company will deliver
to the Holders’ Representative and the Rights Agent a
certificate (the “Non-Achievement Certificate”),
stating that no Earnout Achievement occurred.

 

 

 

 

 

 

 

(c)           During
the period from February 28 to May 31 of each year following a
particular Milestone Period (the “Objection
Period”), the
Holders’ Representative may send a notice (the
“Notice of
Objection”) to the Rights
Agent detailing either their objection to the proposed calculation
of the CVR Payment Amount for the prior Milestone Period set forth
in the Achievement Certificate or their objection to the
Non-Achievement Certificate, in either case by providing a basis
for their objection. Following the receipt of a Notice of
Objection, the Company shall permit, and shall cause its Affiliates
to permit, the Holders’ Representative, and, if requested by
the Holders’ Representative, the Independent Accountant, to
have access to the records of the Company or its Affiliates as may
be reasonably necessary to investigate the basis for the Notice of
Objection. Any dispute arising from a Notice of Objection will be
resolved in accordance with the procedure set forth
in Section 9.10,
which decision will be binding on the parties hereto and every
Holder. If a Notice of Objection has not been delivered to
the Company within the Objection Period for a particular Milestone
Period, then the Holders’ Representative will have no right
to receive the disputed CVR Payment Amount, and the Company and the
Rights Agent will have no further obligations with respect to such
CVR Payment Amount.

 

(d)           If
the Company delivers an Achievement Certificate to the Rights
Agent, no later than March 20 of the year following the Milestone
Period during which an Earnout Achievement was met (the
“Share Determination
Date”), the Company will deposit with the Rights Agent
certificates representing the CVR Payment Shares relating to the
applicable CVR Payment Amount (or make appropriate alternative
arrangements if uncertificated shares of Common Stock represented
by book-entry shares will be issued); provided however, rather than
depositing CVR Payment Shares, the Company may at its sole election
deposit with the Rights Agent a cash amount (the
“Cash Replacement
Amount”) reflecting all or a part of the applicable
CVR Payment Amount, in which case the number of applicable CVR
Payment Shares will be appropriately reduced. In no case shall the
sum of (i) the fair value of CVR Payment Shares to be issued and
(ii) Cash Replacement Amount be less than the total Milestone
Payment Amount. No later than ten (10) calendar days after the
applicable Share Determination Date, the Rights Agent will then
distribute to each Holder the portion of the CVR Payment Amount
that is equal to such Holder’s Pro Rata Share by (i)
depositing the applicable number of CVR Payment Shares in the
account of such Holder pursuant to procedures communicated by the
Rights Agent and (ii) with respect to any Cash Replacement Amount,
distributing the applicable amount to each Holder either by check
mailed to the address of each such respective Holder as reflected
in the CVR Register, or, with respect to any Holder who has
provided the Rights Agent with wire transfer instructions meeting
the Rights Agent’s requirements, by wire transfer of
immediately available funds to such account. Notwithstanding the
above, to the extent a Holder’s Pro Rata Share would result
in such Holder receiving a fractional share of Common Stock, such
Holder shall instead receive a full additional share if the
fractional share is .5 or greater and shall forfeit such fractional
share if the fractional share is less than .5.

 

(e)           If
a CVR Payment Amount is determined to be payable following a Notice
of Objection pursuant to Section 2.4(c) above (whether
by agreement of the parties or the decision of an arbitrator under
Section 9.10), then
within ten (10) Business Days of such determination, the Company
will deposit with the Rights Agent certificates representing the
applicable CVR Payment Shares (or make appropriate alternative
arrangements if uncertificated shares of Common Stock represented
by book-entry shares will be issued); provided however, rather than
depositing CVR Payment Shares, the Company may at its sole election
deposit with the Rights Agent a Cash Replacement Amount reflecting
all or a part of the applicable CVR Payment Amount, in which case
the number of CVR Payment Shares will be appropriately reduced. In
no case shall the sum of (i) the fair value of CVR Payment Shares
to be issued and (ii) Cash Replacement Amount be less than the
total Milestone Payment Amount. No later than ten (10) Business
Days later, the Rights Agent will then distribute to each Holder
the portion of the CVR Payment Amount that is equal to such
Holder’s Pro Rata Share by (i) depositing the applicable
number of CVR Payment Shares in the account of such Holder pursuant
to procedures communicated by the Rights Agent and (ii) with
respect to any Cash Replacement Amount, distributing the applicable
amount to each Holder either by check mailed to the address of each
such respective Holder as reflected in the CVR Register, or, with
respect to any Holder who has provided the Rights Agent with wire
transfer instructions meeting the Rights Agent’s
requirements, by wire transfer of immediately available funds to
such account. Notwithstanding the above, to the extent a
Holder’s Pro Rata Share would result in such Holder receiving
a fractional share of Common Stock, such Holder shall instead
receive a full additional share if the fractional share is .5 or
greater and shall forfeit such fractional share if the fractional
share is less than .5.

 

 

 

 

 

 

 

(f)           The
Company will be entitled to deduct and withhold, or cause to be
deducted or withheld, from each CVR Payment Amount otherwise
payable pursuant to this Agreement, CVR Payment Shares or Cash
Replacement Amounts, as applicable, in such amount as the Company
or the applicable Affiliate of the Company is required to deduct
and withhold with respect to the making of such payment under the
Internal Revenue Code, or any provision of state, local or foreign
tax law. To the extent that amounts are so withheld are paid over
to or deposited with the relevant governmental entity, such
withheld amounts will be treated for all purposes of this Agreement
as having been paid to the Holder in respect of which such
deduction and withholding was made.

 

(g)           The
Company will promptly furnish to the Rights Agent all information
and documentation in connection with this Agreement and the CVRs
that the Rights Agent may reasonably request in order to perform
under this Agreement.

 

2.5       

No
Voting, Dividends or Interest; No Equity or Ownership Interest in
the Company.

 

(a)           Except
for those associated with actual CVR Payment Shares, if and when
issued, the CVRs will not have any voting or dividend rights, and
interest will not accrue on any amounts payable on the CVRs to any
Holder.

 

(b)           Except
for those associated with the actual CVR Payment Shares, if and
when issued, the CVRs will not represent any equity or ownership
interest in the Company.

 

(c)           Each
Holder acknowledges and agrees to the appointment and authority of
the Holders’ Representative to act as the exclusive
representative, agent and attorney-in-fact of such Holder and all
Holders as set forth in this Agreement. Each Holder agrees that
such Holder will not challenge or contest any action, inaction,
determination or decision of the Holders’ Representative or
the authority or power of the Holders’ Representative and
will not threaten, bring, commence, institute, maintain, prosecute
or voluntarily aid any action, which challenges the validity of or
seeks to enjoin the operation of any provision of this Agreement,
including, without limitation, the provisions related to the
authority of the Holders’ Representative to act on behalf of
such Holder and all Holders as
set forth in this Agreement.

 

 

 

 

 

 

 

ARTICLE III.

The Rights Agent

 

3.1         

Certain
Duties and Responsibilities.

 

(a)           The
Rights Agent will not have any liability for any actions taken or
not taken in connection with this Agreement, except to the extent
of its willful misconduct, bad faith or gross negligence. No
provision of this Agreement will require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise
of any of its rights or powers. Notwithstanding anything contained
herein to the contrary, the Rights Agent’s aggregate
liability under this Agreement, or from all services provided or
omitted to be provided under this Agreement, whether in contract,
or in tort, or otherwise, is limited to, and shall not exceed, the
amounts paid hereunder by the Company to the Rights Agent as fees
and charges, but not including reimbursable expenses.

 

(b)           All
rights of action under this Agreement may be enforced by the Rights
Agent, and any action, suit or proceeding instituted by the Rights
Agent will be brought in its name as Rights Agent, and any recovery
of judgment will be for the ratable benefit of all the Holders, as
their respective rights or interests may appear.

 

3.2     

Certain
Rights of Rights Agent.

 

The
Rights Agent undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement, and no implied
covenants or obligations will be read into this Agreement against
the Rights Agent. In addition:

 

(a)           the
Rights Agent may rely and will be protected in acting or refraining
from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or
parties;

 

(b)           whenever
the Rights Agent will deem it desirable that a matter be proved or
established before taking, suffering or omitting any action
hereunder, the Rights Agent may, in the absence of willful
misconduct, bad faith or gross negligence on its part, rely upon an
Officer’s Certificate;

 

(c)           the
Rights Agent may engage and consult with counsel of its selection
and the written advice of such counsel or any opinion of counsel
will be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;

 

(d)           The
Rights Agent shall act hereunder solely as agent for the Company
and it shall not assume any obligations or relationship of agency or trust with any of the
Holders or the Holders’ Representative;

 

(e)           in
the event of arbitration, the Rights Agent may engage and consult
with tax experts, valuation firms and other experts and third
parties that it, in its sole and absolute discretion, deems
appropriate or necessary to enable it to discharge its duties
hereunder;

 

(f)           the
permissive rights of the Rights Agent to do things enumerated in
this Agreement will not be construed as a duty;

 

 

 

 

 

 

 

(g)           the
Rights Agent will not be required to give any note or surety in
respect of the execution of such powers or otherwise in respect of
the premises;

 

(h)           the
Company agrees to indemnify the Rights Agent for, and hold the
Rights Agent harmless against, any loss, liability, claim, demands,
suits or expense (in each case pertaining to the Rights
Agent’s own account only) arising out of or in connection
with the Rights Agent’s duties under this Agreement,
including the costs and expenses of defending the Rights Agent
against any claims, charges, demands, suits or loss, unless such
loss has been determined by a court of competent jurisdiction to be
a result of the Rights Agent’s willful misconduct, bad faith
or gross negligence; and

 

(i)           the
Company agrees (i) to pay the fees and expenses of the Rights Agent
in connection with this Agreement, and (ii) to reimburse the Rights
Agent for all taxes and governmental charges, reasonable expenses
and other charges of any kind and nature incurred by the Rights
Agent in the execution of this Agreement (other than taxes measured
by the Rights Agent’s net income). The Rights Agent will also
be entitled to reimbursement from the Company for all reasonable
and necessary out-of-pocket expenses (including reasonable fees and
expenses of the Rights Agent’s counsel and agent) paid or
incurred by it in connection with the administration by the Rights
Agent of its duties hereunder. An invoice for the Rights Agent Fee
will be rendered a reasonable time before, and paid on, the
effective date of the applicable transaction. An invoice for any
out-of-pocket expenses and per item fees realized will be rendered
and payable within thirty (30) calendar days after receipt by the
Company. The Company agrees to pay to Rights Agent any amounts,
including fees and expenses, payable in favor of the Rights Agent
in connection with any dispute, resolution or arbitration arising
under or in connection with the Agreement. In no event will any
expense incurred by the Company pursuant to this Section 3.2 be
deducted from any CVR Payment Amount.

 

3.3       

Resignation
and Removal; Appointment of Successor.

 

(a)           The
Rights Agent may resign at any time by giving written notice
thereof to the Company specifying a date when such resignation will
take effect, which notice will be sent at least thirty (30) days
before the date so specified.

 

(b)           If
the Rights Agent will resign, be removed or become incapable of
acting, the Company, by way of a Board Resolution, will promptly
appoint a qualified successor Rights Agent who, unless otherwise consented to in writing by
the Holders’ Representative, shall be a stock transfer agent
of national reputation or the corporate trust department of a
commercial bank. The successor Rights Agent so appointed
will, forthwith upon its acceptance of such appointment in
accordance with this Section 3.3(b), become the
successor Rights Agent.

 

(c)           The
Company will give notice of each resignation and each removal of a
Rights Agent and each appointment of a successor Rights Agent by
mailing written notice of such event by first-class mail, postage
prepaid, to the Holders as their names and addresses appear in the
CVR Register. Each notice will include the name and address of the
successor Rights Agent. If the Company fails to send such notice
within five (5) Business Days after acceptance of appointment by a
successor Rights Agent, upon Company’s request the successor
Rights Agent will cause such notice to be mailed at the expense of
the Company. In no event will any expense incurred by the Company
pursuant to this Section
3.3 be deducted from any CVR Payment Amount.

 

 

 

 

 

 

 

3.4     

Acceptance
of Appointment by Successor.

 

Every
successor Rights Agent appointed hereunder will execute,
acknowledge and deliver to the Company and to the retiring Rights
Agent an instrument accepting such appointment and a counterpart of
this Agreement, and thereupon such successor Rights Agent, without
any further act, deed or conveyance, will become vested with all
the rights, powers, trusts and duties of the retiring Rights Agent;
provided,
however, that upon
the request of the Company or the successor Rights Agent, such
retiring Rights Agent will cooperate in the transfer of all
relevant data, including the CVR Register, to the successor Rights
Agent.

 

ARTICLE IV.

Covenants

 

4.1       

List
of Holders.

 

The
Company will furnish or cause to be furnished to the Rights Agent
in such form as the Company receives from its transfer agent (or
other agent performing similar services for the Company), the
names, addresses and shareholdings of registered holders of Common
Stock as of the Effective Time. The Rights Agent will share with
the Company, upon the Company’s request, a copy of the CVR
Register and other information relating to the Holders, including
any correspondence, unless the Rights Agent is restricted by law
from sharing any such information, in which case the portion
protected by law (and only such portion) will be redacted or
otherwise subtracted from the materials provided to the
Company.

 

4.2     

Payment
of CVR Payment Amount.

 

The
Company will duly and promptly issue to Rights Agent the CVR
Payment Amount, when and if payable, in shares of Common Stock to
be distributed to the Holders in the manner provided for in
Section 2.4 and in
accordance with the terms of this Agreement.

 

4.3      

Operating Covenants & Keepwell

 

(a)           Until
the earlier of the termination of this Agreement or December 31,
2024, the Company will account for the results of the Consumer
Business Unit pursuant to segment level reporting (whether or not
it is in fact reported as a segment of the Company). Such reporting
will be done in accordance with GAAP, except that appropriate
adjustments for allocations of overhead consisting of those
incremental costs incurred by the Company as a result of the Merger
and other costs that are intended to fairly reflect the historical
costs of the Consumer Business Unit, including any adjustments that
may occur in accordance with Section
4.5, shall be
applied.

 

(b)           Until
the earlier of the termination of this Agreement or December 31,
2024, the Company will provide (on the whole) reasonably sufficient
commercial support to the Consumer Business Unit to allow it to
meet the Revenue Target Achievement for each Milestone
Period; provided
however, that in any event the
Company will not be required to provide more commercial support (on
the whole) in any particular Milestone Period and on a
proportionate basis relative to the Revenue Target Achievement for
that period, than the amount of commercial support (on the whole)
provided to such business by Innovus in 2018 relative to the
revenue achieved in 2018.

 

 

 

 

 

 

 

(c)           Until
the earlier of the termination of this Agreement or December 31,
2024, the Company will also maintain product registrations,
licenses and approvals and respond to queries and challenges and
perform marketing activities of core products in a manner
consistent with Innovus management of the Consumer Business Unit
throughout 2018. After December 31, 2024, Company management will
manage such matters in the Consumer Business Unit as they would in
the ordinary course of business depending on prospects and expected
performance of the Consumer Business Unit and its various product
lines. In no event will the Company or its management team operate
in bad faith with an intention to undermine the ability of the
Consumer Business Unit from achieving the applicable
Milestones.

 

4.4       

Books and Records;
Holders’ Representative
Operating Covenant Review.

 

The
Company shall, and shall cause its Affiliates to, keep true,
complete and accurate records in sufficient detail to enable the
Holders and their consultants or professional advisors to confirm
the applicable CVR Payment Amount payable to each Holder hereunder
in accordance with the terms specified in this Agreement. In
connection with the Company’s obligations pursuant to Section
4.3, the Holders’ Representative shall have the right to
reasonably inspect and review the Company’s compliance with
such obligations and, if the Holders’ Representative objects
to the Company’s compliance related to Section 4.3, then the
Company and the Holders’ Representative shall reasonably
negotiate to resolve such dispute; provided, that if such dispute
cannot be resolved despite the parties’ best commercially
reasonable efforts to resolve such dispute within 15 business days,
then the dispute shall be resolved via arbitration pursuant to
Section 9.10 hereof.

 

4.5    

Audits.

 

(a)           In
addition to the right of the Holders’ Representative to
inspect the records of the Company in connection with a Notice of
Objection as set forth in Section
2.4(c), upon the written
request of the Holders’ Representative provided to the
Company not less than forty-five (45) days in advance (such request
not to be made more than once in any twelve (12) month period), the
Company shall permit, and shall cause its Affiliates to permit, the
Independent Accountant to have access during normal business hours
to such of the records of the Company or its Affiliates as may be
reasonably necessary to determine the accuracy of the results of
the Consumer Business Unit reported by the Company, particularly as
it pertains to the achievement or non-achievement, as the case may
be, of any Milestones and the payment of any applicable CVR Payment
Amounts.  The Company shall, and shall cause to its Affiliates
to, furnish to the Independent Accountant such access, work papers
and other documents and information reasonably necessary for the
Independent Accountant to calculate and verify the results of the
Consumer Business Unit; provided that the Company may, and may
cause its Affiliates to, redact documents and information not
relevant for such calculation pursuant to this
Section 4.5.  The Independent Accountant shall disclose
to the Company and the Holders’ Representative any matters
directly related to its findings to the extent reasonably necessary
to verify the results of the Consumer Business
Unit.

 

 

 

 

 

 

 

(b)           If
the Independent Accountant concludes that a Milestone was achieved
for which a Non-Achievement Certificate was previously delivered to
the Holders’ Representative and the Rights Agent for which a
CVR Payment Amount was properly due but not paid to the Rights
Agent, or that any CVR Payment Amount made was in an amount less
than the amount due, the Company shall pay the CVR Payment Amount
or underpayment thereof to the Rights Agent for further
distribution to the Holders plus interest on such amount at the
“prime rate” as published in The Wall Street
Journal or similar
reputable data source from time to time, calculated from when the
full CVR Payment Amount should have been paid to the date of actual
payment (such amount including interest being the
“CVR
Shortfall”).  The
CVR Shortfall shall be paid within ten (10) Business Days
after the date the Independent Accountant delivers to Company and
the Holders’ Representative the Independent
Accountant’s written report.  The decision of the
Independent Accountant shall be final, conclusive and binding on
Company and the Holders, shall be non-appealable and shall not be
subject to further review. The fees charged by the Independent
Accountant shall be paid by the Company.

 

(c)           Each
Person seeking to receive information from the Company in
connection with a review pursuant to this Section 4.5 shall
enter into, and shall cause its accounting firm to enter into, a
reasonable and mutually satisfactory confidentiality agreement with
the Company or any controlled Affiliate obligating such party to
retain all such information disclosed to such party in confidence
pursuant to such confidentiality agreement.

 

ARTICLE V.

Amendments

 

5.1        

Amendments
Without Consent of Holders.

 

(a)           Without
the consent of any Holders or the Holders’ Representative,
the Company, when authorized by a Board Resolution, at any time and
from time to time, may enter into one or more amendments hereto, to
evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company
herein in a transaction contemplated by Section 6.1
hereof.

 

(b)           Without
the consent of any Holders or the Holders’ Representative,
the Company, when authorized by a Board Resolution, together with
the Rights Agent, in the Rights Agent’s sole and absolute
discretion, may at any time and from time to time, enter into one
or more amendments hereto:

 

(i)           to
evidence the succession of another Person as a successor Rights
Agent and the assumption by any successor of the covenants and
obligations of the Rights Agent herein;

 

(ii)           to
add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as the Board of Directors
and the Rights Agent will consider to be for the protection of the
Holders;

 

(iii)           to
cure any ambiguity, to correct or supplement any provision herein
that may be defective or inconsistent with any other provision
herein; provided,
however, that in
each case, such provisions will not materially adversely affect the
interests of the Holders or the ability of the Consumer Business
Unit to achieve the Milestones in any way; or

 

 

 

 

 

 

 

(iv)           to
add, eliminate or change any provision of this Agreement unless
such addition, elimination or change is adverse to the interests of
the Holders.

 

Promptly
after the execution by the Company and the Rights Agent of any
amendment pursuant to the provisions of this Section 5.1, the Company will
deliver a notice thereof to each Holder at its address as it appears on the CVR
Register, setting forth in general terms the substance of
such amendment.

 

5.2       

Amendments
with Consent of Holders.

 

(a)           Subject
to Section 5.1
(which amendments pursuant to
Section
5.1 may be made without the
consent of the Holders or the Holders’ Representative), the
Company, when authorized by a Board Resolution, the Rights Agent,
the Holders’ Representative and the Acting Holders may enter
into one or more amendments hereto for the purpose of adding,
eliminating or changing any or all provisions of this
Agreement.

 

(b)           Promptly
after the execution by the Company, the Holders’
Representative and the Rights Agent of any amendment pursuant to
the provisions of this Section 5.2,
the Company will deliver a notice thereof to each Holder at its
address as it appears on the CVR Register, setting forth in general
terms the substance of such amendment. 

 

5.3       

Execution
of Amendments.

 

In
executing any amendment permitted by this Article V, the Rights Agent
will be entitled to receive, and will be fully protected in relying
upon, an opinion of counsel of the Company, at Company’s sole
expense, stating that the execution of such amendment is authorized
or permitted by this Agreement. The Rights Agent may, but is not
obligated to, enter into any such amendment that affects the Rights
Agent’s own rights, privileges, covenants or duties under
this Agreement or otherwise.

 

5.4       

Effect
of Amendments.

 

Upon
the execution of any amendment under this Article V, this Agreement will
be modified in accordance therewith, such amendment will form a
part of this Agreement for all purposes and every Holder will be
bound thereby. In the
event this Agreement is modified in accordance with this Article V,
the Rights Agent will, to the extent practicable, deliver to the
Holders a notice of such amendment.

 

5.5        

Amendment
Prior to Effective Time.

 

            

This Agreement may
not be amended prior to the Effective Time without the prior
written consent of Innovus.

 

 

 

 

 

 

 

ARTICLE VI.

Consolidation, Merger, Sale or Conveyance

 

6.1         

Consolidation

 

(a)           Except
as contemplated by the Merger, the Company will not consolidate
with or merge into any other Person or convey, transfer or lease
its properties and assets substantially as an entirety to any
Person, unless:

 

(i)           the
Person formed by such consolidation or into which the Company is
merged or the Person that acquires by conveyance or transfer, or
that leases, the properties and assets of the Company substantially
as an entirety (the “Surviving Person”) will expressly
assume payment (if and to the extent required hereunder) of amounts
on all the CVRs and the performance of every duty and covenant of
this Agreement on the part of the Company to be performed or
observed; and

 

(ii)           the
Company has delivered to the Rights Agent an Officer’s
Certificate, stating that such consolidation, merger, conveyance,
transfer or lease complies with this Article VI and that all
conditions precedent herein provided for relating to such
transaction have been complied with.

 

(b)           In
the event the Company conveys, transfers or leases its properties
and assets substantially as an entirety in accordance with the
terms and conditions of this Section 6.1, the Surviving
Person will be liable for the payment of the CVR Payment Amount and
the performance of every duty and covenant of this Agreement on the
part of the Company to be performed or observed.

 

6.2       

Buyback of De Minimis CVRs.

 

At any
time, the Company will have the right to purchase all the
outstanding CVRs of any Holder having a De Minimis amount of CVRs
by paying that Holder an amount in cash that is equivalent to the
aggregate consideration such Holder would be owed if all future
Achievement Certificates were delivered (assuming an exchange ratio
of .1667) (such amount, the “Holder Buyout Value”). For
purposes of this section, a “De Minimis” amount of CVRs is an
amount for which the Holder Buyout Value is less than
$100.

 

6.3       

Successor
Substituted.

 

Upon
any consolidation of or merger by the Company with or into any
other Person, or any conveyance, transfer or lease of the
properties and assets substantially as an entirety to any Person in
accordance with Section
6.1, the Surviving Person will succeed to, and be
substituted for, and may exercise every right and power of, the
Company under this Agreement with the same effect as if the
Surviving Person had been named as the Company herein, and
thereafter the predecessor Person will be relieved of all
obligations and covenants under this Agreement and the
CVRs.

 

 

 

 

 

 

 

ARTICLE VII.

Management Discretion; No Fiduciary Duties

 

7.1     

Management of Consumer Business
Unit. For the avoidance of
doubt, subject to and consistent with its obligations set forth in
this Agreement, management of the Company shall have full
discretion in management of the Consumer Business Unit in all
respects, including without limitation decisions relating to taxes,
application of US GAAP, selection of auditor, questions of
accounting policy decisions/elections, working capital management,
risk management, business opportunities, hiring and terminations of
employees and consultants, etc.

 

7.2     

No Fiduciary Duties.
Neither the Company’s officers nor its directors owe
fiduciary duties of any kind to the Holders of the
CVRs.

 

ARTICLE VIII.

The Holders’ Representative

 

8.1      

Appointment of Holders’
Representative.  To the
extent valid and binding under applicable law, the Holders’
Representative is hereby appointed, authorized and empowered to be
the exclusive representative, agent and attorney-in-fact of each
Holder, with full power of substitution, to make all decisions and
determinations and to act (or not act) and execute, deliver and
receive all agreements, documents, instruments and consents on
behalf of and as agent for each Holder at any time in connection
with, and that may be necessary or appropriate to accomplish the
intent and implement the provisions of this Agreement and to
facilitate the consummation of the transactions contemplated
hereby, including without limitation for purposes of
(i) negotiating and settling, on behalf of the Holders, any
dispute that arises under this Agreement, (ii) confirming the
satisfaction of the Company’s obligations under this
Agreement and (iii) negotiating and settling matters with
respect to the amounts to be paid to the Holders pursuant to this
Agreement.

 

8.2      

Authority. 
To the extent valid and binding under
applicable law, the appointment of the Holders’
Representative by the Holders in accordance with this Agreement is
coupled with an interest and may not be revoked in whole or in part
(including, without limitation, upon the death or incapacity of any
stockholder). Subject to the prior qualifications, such appointment
shall be binding upon the heirs, executors, administrators,
estates, personal representatives, officers, directors, security
holders, successors and assigns of each Holder. To the extent valid
and binding under applicable law, all decisions of the
Holders’ Representative shall be final and binding on all
Holders. The Company and the Rights Agent shall be entitled to rely
upon, without independent investigation, any act, notice,
instruction or communication from the Holders’ Representative
and any document executed by the Holders’ Representative on
behalf of any Holder and shall be fully protected in connection
with any action or inaction taken or omitted to be taken in
reliance thereon, absent willful misconduct by the Company or the
Rights Agent (as such willful misconduct is determined by a final,
non-appealable judgment of a court of competent jurisdiction). The
Holders’ Representative shall not be responsible, and shall
be indemnified by the Holders and the Company, for any loss
suffered by, or liability of any kind to the Holders, including as
a result of legal action, arising out of any act done or omitted by
the Holders’ Representative in connection with the acceptance
or administration of the Holders’ Representative’s
duties hereunder, unless such act or omission involves gross
negligence or willful misconduct.

 

 

 

 

 

 

 

8.3  

Successor Holders’
Representative.  The
Holders’ Representative may be removed for any reason or no
reason by written consent of the Acting Holders. In the event that
the Holders’ Representative dies, becomes unable to perform
his or her responsibilities hereunder or resigns or is removed from
such position, the Acting Holders shall be authorized to and shall
select another representative to fill such vacancy and such
substituted representative shall be deemed to be the Holders’
Representative for all purposes of this Agreement. The
newly-appointed Holders’ Representative shall notify the
Company, the Rights Agent and any other appropriate Person in
writing of his or her appointment, provide evidence that the Acting
Holders approved such appointment and provide appropriate contact
information for purposes of this Agreement. The Company and the
Rights Agent shall be entitled to rely upon, without independent
investigation, the identity and validity of such newly-appointed
Holders’ Representative as set forth in such written notice.
In the event that within 30 days after the Holders’
Representative dies, becomes unable to perform his or her
responsibilities hereunder or resigns or is removed from such
position, no successor Holders’ Representative has been so
selected, the Company shall cause the Rights Agent to notify the
Person holding the largest quantity of the outstanding CVRs (and
who is not the Company or, to the Rights Agent’s actual
knowledge, any Affiliate of the Company) that such Person is the
successor Holders’ Representative, and such Person shall be
the successor Holders’ Representative hereunder. If such
Person notifies the Rights Agent in writing that such Person
declines to serve, the Rights Agent shall forthwith notify the
Person holding the next-largest quantity of the outstanding CVRs
(and who is not the Company or, to the Rights Agent’s actual
knowledge, any Affiliate of the Company) that such
next-largest-quantity Person is the successor Holders’
Representative, and such next-largest-quantity Person shall be the
successor Holders’ Representative hereunder. (And so on, to
the extent as may be necessary.) The Holders are intended third
party beneficiaries of this Section 8.3.
If a successor Holders’ Representative is not appointed
pursuant to the preceding procedure within 60 days after the
Holders’ Representative dies, becomes unable to perform his
or her responsibilities hereunder or resigns or is removed from
such position, the Company shall appoint a successor Holders’
Representative.

 

8.4     

Termination of Duties and
Obligations.  The
Holders’ Representative’s duties and obligations under
this Agreement shall survive until no CVRs remain outstanding or
until this Agreement expires or is terminated pursuant to
Section 9.8, whichever is earlier.

 

 

ARTICLE IX.

Other Provisions of General Application

 

9.1      

Notices
to Rights Agent and Company.

 

Subject
to Section 9.2, all
notices, requests, demands, claims and other communications that
are required to be or may be given under this Agreement must be in
writing and will be deemed to have been effectively given: (a) upon
personal delivery to the recipient; (b) when sent by email or
confirmed facsimile, if sent during normal business hours of the
recipient; if not, then on the next Business Day; or (c) one
Business Day after deposit with a nationally recognized overnight
courier, specifying next-day delivery, with written verification of
receipt, in each case to the intended recipient at the following
addresses:

 

 

 

 

 

 

 

(a)           if
to the Company, to

 

Aytu
Bioscience Inc.

373
Inverness Parkway, Suite 206

Englewood, CO
80112

Attention: Joshua
Disbrow

Josh.Disbrow@aytubio.com

 

with a
copy to

 

Dorsey
& Whitney LLP

111
South Main Street

21st Floor

Salt
Lake City, UT 84111

Attention: Nolan
Taylor, Esq.

Taylor.nolan@dorsey.com

 

(b)           if
to the Holders’ Representative, to

 

[
]

 

 

with a
copy to

 

[
]

 

(c)           if
to the Rights Agent, to

 

[
]

 

with a
copy to

 

[
]

 

or to
such other address as either party has furnished to the other by
notice given in accordance with this Section 9.1.

 

9.2       

Notice
to Holders.

 

Where
this Agreement provides for notice to Holders, such notice will be
sufficiently given (unless otherwise herein expressly provided) (i)
if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his, her or its address as it
appears in the CVR Register, or (ii) if sent via email or email
with PDF attachment at email addresses previously confirmed by
Holders, in either case not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail or
email, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder will affect the
sufficiency of such notice with respect to other
Holders.

 

 

 

 

 

 

 

9.3   

Assignment;
Third Party Beneficiaries.

 

Neither
this Agreement nor any right, interest or obligation hereunder may
be assigned by any of the parties hereto without the prior written
consent of the other parties hereto; provided, however, that the
Rights Agent may, without further consent of the other parties
hereto, assign any of its rights and obligations hereunder to any
affiliated transfer agent registered under Rule 17Ac2-1 promulgated
under the Securities Exchange Act of 1934, as amended. This
Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, will give
to any Person (other than the parties hereto, the Holders and their
permitted successors and assigns hereunder) any benefit or any
legal or equitable right, remedy or claim under this Agreement or
under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties
hereto, the Holders and their permitted successors and assigns. The
Holders will not have any rights or remedies with respect to the
CVRs except as expressly set forth herein.

 

9.4       

Governing
Law.

 

This
Agreement and the CVRs will be governed by the laws of the State of
Delaware without reference to principles of conflicts of laws that
would result in the application of the laws of any other
jurisdiction.

 

9.5      

Legal
Holidays.

 

If a
CVR Payment Date is not a Business Day, then, notwithstanding any
provision of this Agreement to the contrary, any payment required
to be made in respect of the CVRs on such date need not be made on
such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the CVR Payment
Date.

 

9.6       

Severability
Clause.

 

Any
term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction will not affect
the validity or enforceability of the remaining terms and
provisions of this Agreement or the validity or enforceability of
the offending term or provision in any other situation or in any
other jurisdiction. If a final judgment of a court of competent
jurisdiction declares that any term or provision of this Agreement
is invalid or unenforceable, the parties hereto agree that the
court making such determination will have the power to limit such
term or provision, to delete specific words or phrases or to
replace such term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and
this Agreement will be valid and enforceable as so modified. In the
event such court does not exercise the power granted to it in the
prior sentence, the parties hereto agree to replace such invalid or
unenforceable term or provision with a valid and enforceable term
or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or
unenforceable term or provision.

 

 

 

 

 

 

 

9.7       

Counterparts.

 

This
Agreement may be executed in any number of counterparts and by
facsimile signatures, any one of which need not contain the
signatures of more than one party and each of which will be an
original, but all such counterparts taken together will constitute
one and the same instrument. The exchange of copies of this
Agreement or amendments thereto and of signature pages by facsimile
transmission or by e-mail transmission in portable digital format
(or similar format) will constitute effective execution and
delivery of such instrument(s) as to the parties and may be used in
lieu of the original Agreement or amendment for all purposes.
Signatures of the parties transmitted by facsimile or by e-mail
transmission in portable digital format (or similar format) will be
deemed to be their original signatures for all
purposes.

 

9.8      

Termination.

 

This
Agreement will terminate and be of no further force or effect, and
the parties hereto will have no liability hereunder, upon the
earliest to occur of (a) the payment of the last possible CVR
Payment Amount due hereunder, (b) if a Notice of Objection is not
delivered within the Objection Period relating to the last
Milestone for which an Achievement Certificate has not been issued,
the expiration of such Objection Period, (c) in the event of the
delivery of a Notice of Objection for such last Milestone period,
either (i) the final determination in accordance with this
Agreement that no further Earnout Achievement has been achieved or
(ii) the fulfillment of any payment obligation required pursuant to
a final determination made in accordance with this Agreement or (d)
the date on which no CVRs are outstanding.

 

9.9      

Entire
Agreement.

 

This
Agreement represents the entire understanding of the parties hereto
with reference to the CVRs and this Agreement supersedes any and
all other oral or written agreements made with respect to the
CVRs.

 

9.10     

Arbitration.

 

Any
claim which the Holders’ Representative or the Holders have
the right to assert hereunder (including any claims brought by the
Acting Holders on behalf of the Holders) will be settled by
arbitration administered by the American Arbitration Association
under its Commercial Arbitration Rules, and judgment on the award
rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Only the Company, the Rights Agent, the
Holders’ Representative and/or the Acting Holders may
initiate an arbitration for any matter relating to this Agreement.
However, in the event of a dispute arising from the delivery of a
Notice of Objection, the sole matter to be settled by arbitration
will be whether an Earnout Achievement has occurred. The number of
arbitrators will be one, and such arbitrator will be selected by
the American Arbitration Association. The place of the arbitration
will be Denver, Colorado. The arbitrator will be a lawyer or
retired judge or accountant with experience in the pharmaceutical
industry and with mergers and acquisitions. Except as may be
required by law, neither a party nor the arbitrator may disclose
the existence, content or results of any arbitration hereunder
without the prior written consent of the other parties (provided
that the Holders’ Representative may disclose to the Holders
any such information without the consent of the Company). Any award
payable in favor of the Holders or the Rights Agent as a result of
arbitration will be distributed to the Holders based on their Pro
Rata Share. The Company will pay all fees and expenses of the
arbitration, including the costs and expenses billed by the
arbitrator in connection with the performance of its duties
described herein; provided, however, that if the arbitrator
rules in favor of the Company, the arbitrator’s fees and
expenses will be offset against any CVR Payment Amount or any other
payment to be made thereafter hereunder. Each party will be
responsible for its own attorney fees, expenses and costs of
investigation.

 

 

 

 

 

 

 

9.11       

Survival.

 

Notwithstanding
anything in this Agreement to the contrary, all provisions
regarding indemnification, warranty, liability and limits thereon,
and confidentiality and protection of proprietary rights and trade
secrets shall survive the termination or expiration of this
Agreement.

 

9.12      

Force
Majeure.

 

Notwithstanding
anything to the contrary contained herein, the Rights Agent shall
not be liable for any delays or failures in performance resulting
from acts beyond its reasonable control including, without
limitation, acts of God, terrorist acts, shortage of supply,
breakdowns or malfunctions, interruptions or malfunctions of
computer facilities, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval
systems, labor difficulties, war or civil unrest.

 

9.13       

Confidentiality

 

(a)           Definition.
“Confidential
Information” shall mean any and all technical or
business information relating to a party, including, without
limitation, financial, marketing and product development
information, stockholder information (including any non-public
information of such stockholder), and proprietary information that
is disclosed or otherwise becomes known to the other party or its
affiliates, agents or representatives before or during the term of
this Agreement. Confidential Information constitutes trade secrets
and is of great value to the owner (or its affiliates).
Confidential Information shall not include any information that is:
(a) already known to the other party or its affiliates at the time
of the disclosure, provided that such prior knowledge can be
substantiated by the written records of such party; (b) publicly
known at the time of the disclosure or becomes publicly known
through no wrongful act or failure of the other party; (c)
subsequently disclosed to the other party or its affiliates on a
non-confidential basis by a third party not having a confidential
relationship with the owner and which rightfully acquired such
information; or (d) independently developed by one party without
access to the Confidential Information of the other, provided that
such independent development can be substantiated by the written
records of such party. This Agreement, including all of its terms
and conditions, will not be deemed to be Confidential Information
and may be publicly disclosed by Company.

 

(b)           
Use and Disclosure.
All Confidential Information of a party will be held in confidence
by the other party with at least the same degree of care as such
party protects its own confidential or proprietary information of
like kind and import, but not less than a reasonable degree of
care. Neither party will disclose in any manner Confidential
Information of the other party in any form to any person or entity
without the other party’s prior consent. However, each party
may disclose relevant aspects of the other party’s
Confidential Information to its officers, affiliates, agents,
subcontractors and employees to the extent reasonably necessary to
perform its duties and obligations under this Agreement. Without
limiting the foregoing, each party will implement such physical and
other security measures and controls as are necessary to protect
(a) the security and confidentiality of Confidential Information;
(b) against any threats or hazards to the security and integrity of
Confidential Information; and (c) against any unauthorized access
to or use of Confidential Information. To the extent that a party
delegates any duties and responsibilities under this Agreement to
an agent or other subcontractor, the party ensures that such agent
and subcontractor are contractually bound to confidentiality terms
consistent with the terms of this Section 9.13.

 

 

 

 

 

 

 

(c)           Required
or Permitted Disclosure. In the event that any requests or
demands are made for the disclosure of Confidential Information,
other than requests to Rights Agent for stockholder records
pursuant to standard subpoenas from state or federal government
authorities (e.g., divorce and criminal actions), the party
receiving such request will promptly notify the other party to
secure instructions from an authorized officer of such party as to
such request and to enable the other party the opportunity to
obtain a protective order or other confidential treatment, unless
such notification is otherwise prohibited by law or court order.
Each party expressly reserves the right, however, to disclose
Confidential Information to any person whenever it is advised by
counsel that it may be held liable for the failure to disclose such
Confidential Information or if required by law or court
order.

 

(d)           Unauthorized
Disclosure. As may be required
by law and without limiting any party's rights in respect of a
breach of this Section
9.13, each party will
promptly:

 

(i)           notify
the other party in writing of any unauthorized possession, use or
disclosure of the other party’s Confidential Information by
any person or entity that may become known to such
party;

 

(ii)           furnish
to the other party full details of the unauthorized possession, use
or disclosure; and

 

(iii)           use
commercially reasonable efforts to prevent a recurrence of any such
unauthorized possession, use or disclosure of Confidential
Information.

 

(e)           Costs.
Each party will bear the costs it incurs as a result of compliance
with this Section
9.13.

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

IN
WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its duly authorized officers as of the
day and year first above written.

 

 

	
 

	

Aytu Bioscience Inc.

 

	
 

	

By:                                                                     

	
 

	

Name: Josh Disbrow

	
 

	

Title: President and Chief
Executive Officer

 

	
 

	
 

	
 

	

[Rights Agent]

 

	
 

	

By:  
                                                                    

	
 

	

Name:

	
 

	

Title:

	
 

	
 

	
 

	
 

	
 

	

And solely as the Holders’ Representative:

	
 

	
 

	
 

	

                                                                   
     
   

	
 

	

Vivian Liu

 

	
 

	
 

 

 

 

 

 

 

 

Exhibit A

 

Earnout Milestones and Payment Amounts

 

1. 

Milestone #1: If
the Consumer Business Unit records $24 million in revenue for
calendar 2019, the CVR Payment Amount for this Milestone will be
$2,000,000 (as such amount may be adjusted pursuant to the Riders
below).

 

2. 

Milestone #2: If
the Consumer Business Unit records $30 million in revenue for
calendar 2020, the CVR Payment Amount for this Milestone will be
$1,000,000 (as such amount may be adjusted pursuant to the Riders
below). If the Consumer Business Unit achieves break-even in terms
of profitability from operations for calendar 2020, then the CVR
Payment Amount for this Milestone will be increased by $1,000,000
(as such amount may be adjusted pursuant to the Riders
below).

 

3. 

Milestone #3: If
the Consumer Business Unit records $40 million in revenue for
calendar 2021, the CVR Payment Amount for this Milestone will be
$1,000,000 (as such amount may be adjusted pursuant to the Riders
below). If the Consumer Business Unit achieves profitability from
operations for calendar 2021, then the CVR Payment Amount for this
Milestone will be increased by $1,000,000 (as such amount may be
adjusted pursuant to the Riders below).

 

4. 

Milestone #4: If
the Consumer Business Unit records $50 million in revenue for
calendar 2022, the CVR Payment Amount for this Milestone will be
$2,500,000 (as such amount may be adjusted pursuant to the Riders
below). If the Consumer Business Unit achieves profitability from
operations for calendar 2022, then the CVR Payment Amount for this
Milestone will be increased by $2,500,000 (as such amount may be
adjusted pursuant to the Riders below).

 

5. 

Milestone #5: If
the Consumer Business Unit records $75 million in revenue for
calendar 2023, the CVR Payment Amount for this Milestone will be
$2,500,000 (as such amount may be adjusted pursuant to the Riders
below). If the Consumer Business Unit achieves profitability from
operations for calendar 2023, then the CVR Payment Amount for this
Milestone will be increased by $2,500,000 (as such amount may be
adjusted pursuant to the Riders below).

 

Warrant Rider: If any warrant issued by Innovus prior to the
Merger (an “Outstanding
Warrant”) is exercised during the term of this
Agreement, then the holder of such Outstanding Warrant will be
issued one CVR for each share of Common Stock received upon
exercise of such Outstanding Warrant and shall become a Holder of
CVRs hereunder from that time forward. Any such Holder shall then
be entitled to participate with other Holders in receiving its Pro
Rata Share of CVR Payment Amounts, but only with respect to any
Milestone Earnouts for which the Achievement Certificate is
prepared and delivered after the date such Outstanding
Warrants are exercised, but shall not be entitled to receive any
CVR Payment Amount for any Earnout Achievement for which the
Achievement Certificate has already been
delivered.

 

 

 

 

 

 

 

Litigation Rider: To the extent that the Company’s
costs (including any legal fees, judgments, settlement payments,
etc.) in connection with or
relating to the matters referenced in the letter to Innovus from
the Marin County District Attorney’s Office on August 24,
2018 exceed $300,000, the Company may in its discretion reduce one
or more CVR Payment Amounts to offset such excess amounts.
Additionally, to the extent that the Company’s costs
(including any legal fees, judgments, settlement payments,
etc.) in connection with or
relating to the current dispute with Hikma Pharmaceuticals exceed
$500,000, excluding the costs of purchasing a reasonable supply of
FlutiCare expected to be sold in the ordinary course, the Company
may in its discretion reduce one or more CVR Payment Amounts to
offset such excess amounts.

 

Anti-dilution Rider: Notwithstanding the exchange ratio
calculations in 1-5 above, if the Company at any time or from time
to time during the term of this Agreement effects a subdivision or
combination of its Common Stock, then the exchange ratios
determined after such subdivision or combination shall be
proportionately decreased or increased, as
appropriate.

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