Document:

Exhibit 4.17

 

SHARE PURCHASE AGREEMENT

 

SHARE PURCHASE AGREEMENT
(the “Agreement”), dated as of 11 June 2015, by and among Semiconductor Manufacturing International Corporation,
a company established under the laws of Cayman Islands (the “Company”), and Country Hill Limited, a company
established under the laws of Cayman Islands (the “Buyer”).

 

WHEREAS

 

A.   Pursuant
to the Share Subscription Agreement signed by the Buyer and Company on April 18, 2011 (the “Country
Hill Share Subscription Agreement”), if the Company proposes to issue new Shares or
securities convertible into Shares, the Buyer has a pre-emptive right to subscribe for a pro rata portion of such new securities
issued which is equivalent to the percentage of the issued share capital of the Company then owned by the Buyer immediately prior
to the issue of such securities (the “Country Hill Pre-emptive Right”).
In connection with the offering of the New Common Shares (as defined below), the Company has notified the Buyer in writing by
way of an issue notice specifying the numbers and type of securities to be offered and the purchase price of the proposed offer
(the “Issue Notice”), on
February 13, 2015. Upon receipt of the Issue Notice, the Buyer has delivered an irrevocable notice on March 2, 2015 to the Company
to exercise its pre-emptive right to subscribe for the New Common Shares.

 

B.   The
Buyer wishes to purchase, and the Company wishes to issue and sell, upon the terms and conditions stated in this Agreement an aggregate
of 323,518,848 common shares, par value US$0.0004 per share, of the Company (the “New Common Shares”)
at a purchase price of HK$0.6593 per share for an aggregate purchase price of HK$213,295,976.49 (the “Aggregate Purchase
Price”). Unless the context otherwise requires, the New Common Shares subscribed for shall be referred to herein as the
“Securities”.

 

C.   The
Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration under
the U.S. Securities Act of 1933, as amended (the “1933 Act”) afforded by Regulation S (“Regulation
S”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933
Act.

 

NOW, THEREFORE,
the Company and the Buyer hereby agree as follows:

 

     

     

    

 

1.          PURCHASE
AND SALE OF NEW COMMON shares

 

(a)   Purchase
of New Common Shares. Subject to the satisfaction or waiver of the conditions set forth in Sections 5, 6 and 7 below, the Company
shall issue and sell to the Buyer, and the Buyer shall purchase from the Company on the Closing Date (as defined in Section 1(c)(i)
below), the New Common Shares (the “Closing”).

 

(b)   Purchase
Price. The Aggregate Purchase Price shall be HK$213,295,976.49.

 

(c)   Closing.

 

(i)          Date
and Time. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., Hong Kong time, on
such date as is specified by the Company and the Buyer, which date shall be no later than the third Business Day after the satisfaction
or waiver of the conditions to the Closing set forth in Sections 5, 6 and 7 below and no later than the expiry of four months after
this Agreement is signed (or such later date as may be agreed between the parties), at the offices of Slaughter and May, 47th Floor,
Jardine House, One Connaught Place, Central, Hong Kong or at such other time, date and location as is mutually agreed in writing
by the Company and the Buyer.

 

(ii)         Payment
and Delivery. On or before the Closing Date:

 

(A)   the Buyer shall
pay the Aggregate Purchase Price to the Company for the New Common Shares to be issued and sold to the Buyer at the Closing, by
electronic bank transfer, in immediately available funds. The payment shall be made to the bank account, bank and bank address
as specified by the Company in writing prior to the Closing Date;

 

(B)   the Company shall
deliver to the Buyer:

 

		(1)	copies of the special mandate of the Company Extraordinary General Meeting (the “EGM”)
approving the entering into and execution of this Agreement and for the issue of the New Common Shares contemplated herein, pursuant
to the matters set forth in Section 5 (c);

 

		(2)	copies of the board resolutions of the Company approving
the entering into and execution of this Agreement and all transactions contemplated herein; and

 

		(3)	the Company shall deliver to the Buyer a certificate signed
by a director of the Company certifying as to the matters set forth in Sections 7(b) and (c).

 

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2.          BUYER’S
REPRESENTATIONS AND WARRANTIES. 

 

The Buyer hereby
represents and warrants to the Company that as at the date of this Agreement and as at the Closing Date (except for representations
and warranties that speak as of a specific date, which shall be true and correct as of such specified date):

 

(a)   Regulation
S.

 

(i)          The
Buyer (A) is domiciled and has its principal place of business outside the United States, (B) certifies that it is not a U.S. Person
as defined under Rule 902 of Regulation S and is not acquiring the Securities for the account or benefit of any U.S. Person, (C)
at the time of offering to the Buyer and communication of the Buyer’s order to purchase the Securities and at the time of
the Buyer’s execution of this Agreement, the Buyer was located outside the United States, and (D) at the time of the Closing
the Buyer or persons acting on the Buyer’s behalf in connection therewith, will be located outside the United States. As
used herein, the term “United States” means and includes the United States of America, its territories and possessions,
any state of the United States, and the District of Columbia.

 

(ii)         The
Buyer has been advised and acknowledges that: (A) the Securities issued pursuant to this Agreement have not been, and when issued,
will not be registered under the 1933 Act or the securities laws of any state of the United States, (B) in issuing and selling
the Securities to the Buyer pursuant hereto, the Company is relying upon the exemption from registration provided by Regulation
S of the 1933 Act, and (C) it is a condition to the availability of the Regulation S safe harbor that the Securities not be offered
or sold in the United States or to a U.S. Person until the expiration of a period of 40 days after the Closing Date (the “Distribution
Compliance Period”).

 

(iii)        The
Buyer acknowledges and covenants that until the expiration of the Distribution Compliance Period: (A) it and its agents or representatives
have not and will not solicit offers to buy, offer for sale or sell any of the Securities or any beneficial interest therein in
the United States or to or for the account of a U.S. Person, and (B) notwithstanding the foregoing, prior to the expiration of
the Distribution Compliance Period, the Securities may be offered and sold by the holder thereof only if such offer and sale is
made in compliance with the terms of this Agreement and either, (X) the offer or sale is within the United States or to or for
the account of a U.S. Person and pursuant to an effective registration statement, Rule 144 promulgated under the 1933 Act or an
exemption from the registration requirements of the 1933 Act, or (Y) the offer and sale is outside the United States and to other
than a U.S. Person and in accordance with Regulation S of the 1933 Act. The foregoing restrictions are binding upon subsequent
transferees of the Securities, except for transferees pursuant to an effective registration statement. The Buyer agrees that after
the Distribution Compliance Period, the Securities may be offered or sold within the United States or to or for the account of
a U.S. Person only in accordance with this Agreement and pursuant to applicable securities laws.

 

(iv)        
The Buyer hereby acknowledges that during the Distribution Compliance Period, no deposit of the Securities issued hereunder will
be accepted into its American Depositary Shares (“ADS”) program, and the Securities may not be offered or sold
in the United States or to U.S. Persons unless the Securities are registered under the 1933 Act, or an exemption from the registration
requirements of the 1933 Act is available. The Buyer further acknowledges that, for so long as the Securities are held by “affiliates”
within the meaning of Rule 144(a)(1) under the 1933 Act or are “restricted securities” within

 

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the meaning of Rule 144(a)(3)
under the 1933 Act, the Securities will not be eligible for deposit under any unrestricted depositary receipt facility.

 

(v)         
The Buyer has not engaged or caused any third party to engage in any directed selling efforts (as such term is defined in Regulation S)
in the United States with respect to the Securities.

 

(vi)        The
Buyer has not and will not engage in hedging transactions (within the meaning of Rule 903(b)(3)(iii)(B)(4) of Regulation S)
with regard to the Securities unless in compliance with the 1933 Act.

 

(b)   No
Public Sale or Distribution. Subject to the Buyer’s right to transfer the Securities to the Permitted Transferee (as
defined in Section 4(f)), the Buyer is acquiring the Securities for its own account and not with a view towards, or for resale
in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933 Act.
The Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of
the Securities. “Person” means an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization or a government or any department or agency thereof.

 

(c)   Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and its compliance with, the representations, warranties, agreements, acknowledgments and understandings
of it set forth herein in order to determine the availability of such exemptions and the eligibility of it to acquire the Securities.

 

(d)   Information.
The Buyer understands that its investment in the Securities involves a high degree of risk and is able to afford a complete loss
of such investment. The Buyer has such knowledge and experience in financial and business matters that it is capable of evaluating
the merits and risks of prospective investment in the Securities.

 

(e)   No
Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(f)   Transfer
or Resale. The Buyer understands that: (i) the Securities have not been and are not being registered under the 1933 Act or
any state securities laws, and may not be offered for sale, sold, assigned or transferred within the United States or to or for
the account or benefit of a U.S. Person unless (A) subsequently registered thereunder, (B) the Buyer shall have delivered to the
Company an opinion of counsel, in form, scope and substance reasonably acceptable to the Company, to the effect that such Securities
to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C)
the Buyer provides the Company with reasonable assurance that such

 

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Securities can be sold, assigned or transferred pursuant to
Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule 144”);
(ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some
other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other
Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder.

 

(g)   Legends.
The Buyer understands that the certificates or other instruments representing the Securities, until such time as the resale of
the Securities have been registered under the 1933 Act, shall bear any legend as required by the “blue sky” laws of
any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer
of such stock certificates):

 

“THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE ACT, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER, IF NOT A U.S. PERSON:
(1) REPRESENTS THAT IT IS NOT A U.S. PERSON AND IS ACQUIRING THESE SHARES IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT
RESELL OR OTHERWISE TRANSFER THESE SHARES EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, (C) INSIDE THE UNITED STATES, TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
ACT, (D) INSIDE THE UNITED STATES, TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE COMPANY A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THESE SHARES IN THE FORM SATISFACTORY
TO THE COMPANY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE COMPANY), (E) OUTSIDE THE UNITED STATES, IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULES 904 AND 905 UNDER THE ACT, OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE ACT (IF AVAILABLE); AND (3) AGREES THAT IT WILL GIVE EACH PERSON TO WHOM THESE SHARES ARE TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THESE SHARES PURSUANT TO CLAUSES (2)(C), (D), (E) OR (F) ABOVE,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS, OR OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION OR IN A TRANSACTION NOT

 

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SUBJECT
TO THE REGISTRATION REQUIREMENTS OF THE ACT. AS USED HEREIN, THE TERMS ‘OFFSHORE TRANSACTION’, ‘UNITED STATES’,
AND ‘U.S. PERSON’ HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE ACT.”

 

(h)   Validity;
Enforcement. The Buyer is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation,
and has all requisite corporate power and authority to enter into and perform this Agreement and consummate the transactions contemplated
hereby. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and shall constitute
the legal, valid and binding obligations of the Buyer enforceable against the Buyer in accordance with its terms, except as such
enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

(i)   No
Conflicts. The execution, delivery and performance by the Buyer of this Agreement and the consummation by the Buyer of the
transactions contemplated hereby will not (i) result in a violation of the Buyer's organizational or constitutional documents,
(ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to the Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse
effect on the ability of the Buyer to enter into this Agreement and perform its obligations hereunder; and no authorization, approval,
consent and license from any supranational, national, state, municipal, local or foreign government, any instrumentality, subdivision,
court, administrative agency or commission or other governmental authority or regulatory body or instrumentality, or any quasi-governmental
or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority (a “Governmental
Entity”) is required for the entering into by Buyer of this Agreement and the performance by the Buyer of its
obligations under this Agreement, except for such as have already been obtained and are in full force and effect.

 

(j)   General
Solicitation. The Buyer is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented
at any seminar or any general advertisement.

 

(k)   Brokers
and Finders. Subject to Section 4(e), no Person will have, as a result of the transactions contemplated by the Transaction
Documents, any valid right, interest or claim against or upon the Company for any commission, fee or other compensation pursuant
to any agreement, arrangement or understanding with a placement agent entered into by or on behalf of the Buyer.

 

(l)   Prohibited Transactions. Since the time when the Buyer and the Company first came into contact regarding the transactions
contemplated hereby, neither the Buyer nor any Buyer Affiliate (collectively, “Trading Affiliates”) has, directly
or indirectly, effected or agreed to effect any short sale, whether or not against the box, established any “put equivalent
position” (as defined in Rule 16a-1(h) under

 

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the 1934 Act) with respect to the Common Shares, granted any other right (including
without limitation, any put or call option) with respect to the Common Shares or with respect to any security that includes, relates
to or derived any significant part of its value from the Common Shares or otherwise sought to hedge its position in the Common
Shares (each, a “Prohibited Transaction”), and neither the Buyer nor its Trading Affiliates will enter into
a Prohibited Transaction after the date hereof until the later to occur of (A) the transactions contemplated hereby being publicly
announced and (B) the Closing Date. For the purpose of this paragraph, the term “Buyer Affiliate” shall mean any person
or entity which, with respect to the Buyer, directly or indirectly, controls, is under common control with, or is controlled by
the Buyer, but exclude (1) Central Huijin Investment Ltd. and its subsidiaries, and (2) any person or entity which would have been
considered to be an affiliate of the Buyer solely due to the fact that such person or entity is under common control with the Buyer,
whether directly or indirectly, by a government or governmental authority. The term “control” means ownership of at
least fifty percent (50%) or more of the voting shares (stocks) of a company, or the power to appoint or elect a majority of the
directors of a company, or the power to control the management of a company.

 

(m)   Acknowledgement. The Buyer acknowledges and agrees that the foregoing representations, warranties, covenants and acknowledgments
are made by it with the intention that they may be relied upon by the Company.

 

3.          A.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to the Buyer that as at the date of this Agreement and as at the Closing Date (except for representations and warranties
that speak as of a specific date, which shall be true and correct as of such specified date), except as set forth in its Public
Documents (as defined in Section 3A(h) below) (excluding disclosures of non-specific risks faced by the Company and its subsidiaries
(the “Group”)) included in any forward-looking statement, disclaimer, risk factor disclosure or other similarly
non-specific statements that are similarly predictive or forward-looking in nature; provided, however that (i) any historical facts
related to the Group and (ii) any specific exposure or effect faced by the Group emanating from specifically disclosed facts contained
within any such disclosure shall be deemed disclosed for purposes of the representations and warranties set forth in this Section
3(A):

 

(a)   Organization
and Qualification. The Company is a corporation duly incorporated and validly existing in good standing under the laws of the
jurisdiction in which it is incorporated, and has the requisite corporate power and authorization to own its properties and to
carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to
have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means (1) any material
adverse effect on (i) the business, properties, assets, liabilities, operations, results of operations or financial condition of
the Company and its subsidiaries, taken as a whole, or (ii) the authority or ability of the Company to perform its obligations
under the Transaction Documents (as defined in Section 3A(b) below) or (2) the delisting of the Common Shares from the SEHK (as
defined in Section 3A(b) below) and the American depository receipts over the Common Shares from the NYSE (as defined in Section
3A(b) below); provided, however, that for purposes of clause (i) above, in no event shall any of the following exceptions, alone
or in combination with

 

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the other enumerated exceptions below, be deemed to constitute, nor shall be taken into account in determining
whether there has been or will be, a Material Adverse Effect: (A) any effect resulting from compliance with the terms and conditions
of, or from the announcement of the transactions contemplated by this Agreement, (B) any effect that results from changes affecting
any of the industries in which the Company operates generally or the economy generally, (C) any effect that results from changes
affecting general worldwide economic or capital market conditions, provided that any such changes in (B) and (C) do not substantially
disproportionately affect the Company in any material respect, or (D) any change in the Company’s share price or trading
volume, in and of itself, primarily resulting from any of the effects or changes described in the foregoing clauses (A), (B) or
(C). Each subsidiary of the Company that is a “significant subsidiary” within the meaning of Rule 1-01(w) of Regulation
S-X under the Securities Act (individually a “Significant Subsidiary” and collectively the “Significant
Subsidiaries”)has been duly organized and is validly existing in good standing under the laws of its jurisdiction of
organization except to the extent that the failure to be in good standing would not reasonably be expected to have a Material Adverse
Effect.

 

(b)   Authorization;
Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated
by this Agreement (collectively, the “Transaction Documents”) and to issue the Securities in accordance with
the terms hereof and thereof, subject to the conditions herein. The execution and delivery of the Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation,
the issuance of the Securities, has been duly authorized by the Board and no further filing, consent or authorization is required
for the issuance of the Securities on the part of the Company, except for the filing, consent or authorization in connection with
the satisfaction of the conditions in Sections 5(a), (b) and (c) below and any required filings regarding the issuance or listing
of additional securities with The Stock Exchange of Hong Kong Limited (the “SEHK”) or the New York Stock Exchange
(the “NYSE”). This Agreement and the other Transaction Documents when duly executed and delivered by the Company
constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective
terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies.

 

(c)   Issuance
of Securities. The Securities are duly authorized and, when issued and paid for in accordance with the terms hereof, shall
be validly issued and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof and
the Securities shall be fully paid with the holders being entitled to all rights accorded to a holder of the Common Shares. Assuming
the accuracy of each of the representations and warranties set forth in Section 2 of this Agreement, the offer and issuance by
the Company of the Securities is exempt from registration under the 1933 Act. The Securities, when allotted, issued and delivered,
will (i) be validly issued and fully-paid, (ii) rank pari passu and carry the same rights in all aspects as the other Common Shares
in issue as at the date on which the Securities are issued, (iii) subject to the memorandum and articles of association of the
Company (the “Memorandum and Articles”), be entitled to all dividends and other distributions declared, made
or paid in relation to the Securities save for any right or entitlement the record date for which precedes the date on which the
Securities are allotted and issued, (iv) subject to the Memorandum and Articles, be freely transferable, free

 

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and clear of all
liens, encumbrances, security interests or claims of third Parties and will not be subject to calls for further funds, and (v)
free from any restrictions on the voting or transfer of any of the Securities or payment of dividends with respect to the Securities
pursuant to any agreement, contract, undertaking or similar instrument to which the Company is bound (other than any restrictions
referred to in this Agreement).

 

(d)   No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Securities) will
not (i) result in a violation of the Articles, (ii) conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of its Significant Subsidiaries is a party, or (iii) subject
to the terms of this Agreement, result in a violation of any law, rule, regulation, order, judgment or decree (including the Hong
Kong Codes on Takeovers and Mergers and Share Buy-backs (the “Hong Kong Takeovers Code”), foreign, U.S. federal
and state securities laws and regulations and the rules and regulations of the SEHK or of the NYSE applicable to the Company or
by which any property or asset of the Company or any of its Significant Subsidiaries is bound or affected), except in the case
of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not reasonably be expected to result
in a Material Adverse Effect.

 

(e)   Consents.
The Company is not required to obtain any consent, approval, authorization or order of, or make any filing or registration with
or give prior notification to, (i) any court, Governmental Entity or any regulatory or self-regulatory agency in order for it to
execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents or (ii) any third party pursuant
to any agreement, indenture or instrument to which the Company or any of its Significant Subsidiaries is a party, in each case
in accordance with the terms hereof or thereof other than such as have been made or obtained, and except for the filings, approvals
or notifications in connection with the satisfaction of the conditions set forth in Sections 5(a), (b) and (c) below and any required
filings or notifications regarding the issuance or listing of additional securities with the SEHK or the NYSE or such consents
as will be obtained by the Company on or before Closing. The Company has no knowledge of any facts or circumstances that might
prevent the Company from obtaining or effecting any of the filings or notifications described in the preceding sentence. The Company
is not in violation of the listing requirements of the SEHK or the NYSE and has no knowledge of any facts that would reasonably
lead to delisting or suspension of its Common Shares from the SEHK or of its American depository receipts from the NYSE in the
foreseeable future, apart from such suspension from SEHK and/or NYSE in connection with or resulting from the entering into of
this Agreement. As used herein, “knowledge” shall mean actual knowledge of the executive officers (as defined in Rule
405 under the 1933 Act) of the Company after due inquiry.

 

(f)   No
Directed Selling Efforts. Neither the Company nor any of its affiliates or any other person acting on its or their behalf has
engaged or will engage in any directed selling efforts in the United States within the meaning of Regulation S under the 1933 Act,
as amended, and all such persons have complied with the applicable offering requirements of Regulation S under the 1933 Act.

 

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(g)   Foreign
Private Issuer. The Company is a “foreign private issuer” (as such term is defined in the rules and regulations
under the 1933 Act and the U.S. Securities Exchange Act of 1934 (“1934 Act”), as amended).

 

(h)   No
General Solicitation. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or
sale of the Securities. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid
right, interest or claim against or upon the Company, the Buyer for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding with a placement agent entered into by or on behalf of the Company.

 

(i)   No
Integrated Offering. Assuming the accuracy of the Buyer’s representations and warranties set forth in Section 2 hereof,
none of the Company, any of its affiliates, or any Person acting on their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance
of any of the Securities under the 1933 Act, whether through integration with prior offerings or otherwise, or cause the offering
of Securities hereunder to require approval of shareholders of the Company for purposes of any applicable shareholder approval
provisions, including, without limitation, under the rules and regulations of the SEHK and the NYSE. None of the Company, their
affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would
require registration of the issuance of any of the Securities under the 1933 Act or cause the offering of the Securities to be
integrated with other offerings for purposes of any such applicable shareholder approval provisions.

 

(j)   Public
Documents. The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed
by it with the SEC pursuant to the reporting requirements of the 1934 Act or with the SEHK and has timely issued all announcements,
returns, notices, financial statements and circulars required to be issued by it by the SEHK or the NYSE (all of the foregoing
filed or announced prior to the date of this Agreement and all exhibits included therein and financial statements, notes and schedules
thereto and documents and incorporated by reference therein being hereinafter referred to as the “Public Documents”).
As of their respective filing or issuance dates, the Public Documents complied in all material respects with the requirements of
the 1934 Act and the rules and regulations of the SEC promulgated thereunder and the rules and regulations of the SEHK and the
NYSE, as applicable, to the respective Public Documents, and, other than as corrected or clarified in a subsequent Public Document,
none of the Public Documents, at the time they were filed or issued, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

(k)   Financial
Statements. The consolidated financial statements (including any related notes thereto) included or incorporated by reference
in the Public Documents fairly presented in all material respects the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated therein and the consolidated results of their operations for the periods specified therein,
other than as corrected or clarified in a subsequent Public Document.

 

    - 10 - 

     

    

 

(l)   No
Material Adverse Effect. Since 31 December 2014, no event or circumstance has occurred that, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Significant Subsidiaries
has taken any steps to seek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe
that its creditors intend to initiate involuntary bankruptcy proceedings or any fact which would reasonably lead a creditor to
do so.

 

(m)   Litigation. There are no claims, suits, investigations, actions or proceedings pending or, to the Company’s knowledge,
threatened against the Company or any of its Significant Subsidiaries or, to the best of the knowledge of the Company, any of their
respective directors, officers, employees (such employees performing managerial functions in departments of the Company concerning
research and development, manufacturing, finance and marketing) or properties before any court, governmental department, commission,
agency, instrumentality or authority, or any arbitrator that seeks to restrain or enjoin the consummation of the transactions contemplated
by this Agreement or which could reasonably be expected, to have, individually or in the aggregate, a Material Adverse Effect.
 Except for evidence or materials subject to a protective order, attorney-client privilege
or otherwise made available to the Buyer or its counsel, no existing facts or developments related to the Company's pending litigation,
taken as a whole, have been omitted from the Public Documents that would reasonably be expected to have a Material Adverse Effect
(it being understood that this representation and warranty shall not be taken as a guarantee as to the outcome of such litigation).

 

(n)   Compliance
with Applicable Laws. The Company and each of its Significant Subsidiaries have conducted their businesses in compliance with
all applicable federal, state and foreign laws, regulations and applicable stock exchange requirements, except where the failure
to be in compliance could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

The Company and each
of its Significant Subsidiaries  have all permits, licenses, authorizations, orders and approvals of, and have made
all filings, applications and registrations with, any Governmental Entities that are required in order to carry on their business
as presently conducted, except where the failure to have such permits, licenses, authorizations, orders and approvals or the failure
to make such filings, applications and registrations, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect; and all such permits, licenses, certificates of authority, orders and approvals are in full force and
effect and, to the knowledge of the Company, no suspension or cancellation of any of them is threatened, and all such filings,
applications and registrations are current, except where such absence, suspension or cancellation, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

(o)   Equity
Capitalization. As of 10 June 2015, the authorized share capital of the Company consists of (A) 50,000,000,000 Common Shares,
of which as of such date, 40,745,078,880 shares are issued, (as at 31 May 2015, 475,653,607shares may be issued pursuant to the
Company’s employee incentive plan and other options and warrants outstanding) and 3,932,570,996 Common Shares may be issued
(as of the date of this Agreement) pursuant to the conversion of the (i) US$200,000,000 Zero Coupon Convertible Bonds due 2018
issued on 7 November 2013; (ii) the US$54,600,000 Zero Coupon Convertible Bonds due 2018 issued to Datang Holdings (Hongkong) Investment
Company Limited

 

    - 11 - 

     

    

 

(“Datang”); (iii) the US$32,200,000 Zero Coupon Convertible Bonds due 2018 issued to Country
Hill Limited (“Country Hill”); (iv) the US$95,000,000 Zero Coupon Convertible Bonds due 2018 issued on 24 June
2014; and (v) the US$22,200,000 Zero Coupon Convertible Bonds due 2018 issued to Datang on 4 December 2014 (together, the “Convertible
Bonds”) and there are no other agreement or commitment outstanding which calls for the allotment or issue or accords
to any person the right to call for the allotment or issue of any shares (including shares issued pursuant to securities exercisable
or exchangeable for, or convertible into, or agreements relating to the issuance of Common Shares) (except that Datang will, as
a result of the issue and sale of the New Common Shares to the Buyer pursuant to this Agreement, have the right to subscribe for
a pro rata portion of Common Shares equivalent to the percentage of the issued share capital of the Company then beneficially owned
by Datang (the “Datang Pre-emptive Right”)) immediately prior to the issue of the New Common Shares), and (B)
5,000,000,000 Preferred Shares, of which none are issued. All of such issued shares have been validly issued and are fully paid.
As of [time], save as disclosed above and pursuant to this Agreement, there are no outstanding securities issued by the Company
or its Significant Subsidiaries (including shares issuable pursuant to securities exercisable or exchangeable for, or convertible
into, or agreements related to the issuance of Common Shares or preferred shares (together, “Shares”)), or warrants,
rights or options to purchase Shares from the Company or its Significant Subsidiaries, nor are there any agreement, arrangement
or commitment outstanding which calls for the allotment or issue or accords to any person the right to call for the allotment or
issue of any Shares (including Shares issuable pursuant to securities exercisable or exchangeable for, or convertible into, or
agreements relating to the issuance of Shares). 

 

(p)   Information
provided. All information given in connection with the transactions contemplated by this Agreement by the Company or on its
behalf by the Company's advisers, to the Buyer or the Buyer's advisers, relating to the Company, its Significant Subsidiaries or
their respective business, activities, affairs, or assets or liabilities (including all documents attached thereto) was, when given,
and is now accurate in all material respects and not misleading in any material respect, and there is no material omission that
would render the information given misleading in any material respect, provided that nothing herein shall constitute any obligation
on the Company to disclose any information over and above what is required to be disclosed by the Company under the requirements
of applicable laws and regulations (including, but not limited to, the Hong Kong Listing Rules) or requirements of regulatory bodies
(including, but not limited to the SEHK and the SEC).

 

(q)   Ownership
of assets. Save as disclosed publicly or to the Buyer or its advisors, as may be updated by the Company in writing prior to
Closing, so far as the Company is aware, there are no mortgages, charges, pledges, liens (other than liens arising in the ordinary
course of trading) or other forms of security or encumbrances over or affecting the whole or any part of the material assets of
the Company or any of its Significant Subsidiaries. Other than as disclosed, the Company and its Significant Subsidiaries have
title to all properties and to all assets necessary to conduct the business now operated by them in each case free from liens,
encumbrances and title defects that would materially affect the value thereof or materially interfere with the use made or to be
made thereof by them and any real property or building held under lease by the Company or any of its Significant Subsidiaries are
held by it under valid, existing and enforceable leases, in each case except to the extent that any failure of the above would
not have a Material Adverse Effect.

 

    - 12 - 

     

    

 

(r)   Intellectual
Property. To the knowledge of the Company, the Company owns or possesses sufficient legal rights including but not limited
to trade secrets, trade marks, licenses, confidential information and proprietary rights and manufacturing processes and all copyrights,
mask work rights, all patents and patent rights, as are necessary to the conduct of the business as now conducted or presently
proposed to be conducted, including but not limited to the manufacturing of such products of 0.13um, 0.18um, 0.35um, 28nm, 45nm,
90nm, and/or 65nm processes (or as presently proposed to be conducted on products) by the Company or any of its Significant Subsidiaries,
without any known conflict with, or known infringement of, the rights of others except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. To the knowledge of the Company, no products manufactured, marketed
or sold (or products proposed to be manufactured, marketed or sold) by the Company or any of its Significant Subsidiaries violates
any license or infringes any intellectual property rights of any other party which could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. The representation and warranty set forth in Section 3(A)(n) (Compliance with Applicable
Laws) shall not be deemed or interpreted to apply to matters related to intellectual property and intellectual property rights.
  For the avoidance of doubt and notwithstanding the foregoing, the parties acknowledge that the Company has not
conducted an analysis of the Company’s freedom to operate in a particular field with respect to ownership and use of intellectual
property rights.

 

(s)   United
States Export Control. The Company is in compliance with, and undertakes to use its reasonable endeavours to comply with, all
applicable laws, regulations, practices, policies, rules and any other governmental requirements of the United States and other
countries or regions in relation to any export or supply of technology, equipment or any information in connection with the Group’s
business operation, the omission of which could reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect.

 

(t)   Tax
Return. Each of the Company and its Significant Subsidiaries has duly and timely filed all tax returns that are required to
be filed in all jurisdictions or has duly requested extensions thereof and has paid all taxes required to be paid by any of them
in all jurisdictions and any related assessments, fines or penalties, except for any such tax, assessment, fine or penalty that
is being contested in good faith and by appropriate proceedings or where the failure to file or make payment would not, singly
or in the aggregate, have a Material Adverse Effect. Adequate charges, accruals and reserves have been provided for in the Results
referred to in Section 3A(k) in respect of all taxes for all periods as to which the tax liability of the Company or any of its
Significant Subsidiaries has not been finally determined or remains open to examination by an applicable taxing authority.

 

(u)   Environmental
Laws. The Company and its Significant Subsidiaries (i) have been and are in compliance with any and all applicable foreign,
national and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (the “Environmental Laws”), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or approval, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would

 

    - 13 - 

     

    

 

not, singly or in the aggregate, have a Material Adverse Effect on the Company and
its subsidiaries taken as a whole.

 

(v)   Foreign
Corrupt Practices. To the best of the knowledge of the Company, no member of the Group nor any director, officer, agent, employee
(such agent or employee acting under the direction of the Company) or Affiliate of any member of the Group, has, directly or indirectly,
made or authorised (A) any contribution, payment or gift of funds or property to any official, employee or agent of any authority,
or any candidate for public office, in Hong Kong, the Cayman Islands, the United States, the PRC or any other jurisdiction, where
either the payment or the purpose of such contribution, payment or gift was, is, or would be prohibited under any applicable law,
rule, or regulation, or (B) any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any government
officials or employees for the purpose of obtaining favours or undue influence, and without prejudice to the foregoing, neither
any member of the Group nor any director, officer agent, employee (such agent or employee acting under the direction of the Company)
or Affiliate of any member of the Group, to the best knowledge of the Company, has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder, and the Company and the other members of the Group have instituted and maintain policies and procedures designed to
ensure compliance with applicable laws relating to anti-bribery in the jurisdictions in which the Group conducts its business.

 

(w)   Money Laundering Laws. To the best of the knowledge of the Company, the operations of each member of the Group are and have
been conducted at all times in compliance with applicable financial recordkeeping and reporting and other requirements of the money
laundering laws of all jurisdictions, including the United States Currency and Foreign Transactions Reporting Act of 1970, as amended
(collectively, the “Money Laundering Laws”), and no action, suit, proceeding, investigation or inquiry by or
before any authority involving any member of the Group with respect to the Money Laundering Laws is pending or threatened.

 

(x)   The
Buyer is an affiliate of China Investment Corporation ("CIC").  CIC requires each of its employees to refrain
from corruption, bribery or any other illegal actions and misconduct.  CIC also requires its employees to abide by a high
standard of integrity and professionalism and to act in an ethically responsible way.  CIC’s anti-corruption and anti-bribery
policies can be found on CIC’s website (http://www.china-inv.cn) under the tab “ABOUT CIC”, and then “Ethics
Management”.  The Company hereby acknowledges receipt of a copy of CIC’s Anti-corruption and Anti-bribery Statement
and agrees to use its reasonable efforts to facilitate the implementation of such policies.

 

3.          B.
Limitations on Representations and Warranties.

 

The Buyer agrees and
acknowledges that all claims made by the Buyer under any of the representations and warranties set out in Section 3A above shall
not, whether individually or in the aggregate, exceed the Aggregate Purchase Price (it being understood that any assessment of
damages shall not include any special, consequential or punitive damages and shall only be limited to actual damages suffered including
any diminution in the value of the Securities purchased as a result of any breaches). For

 

    - 14 - 

     

    

 

the avoidance of doubt, the aforementioned
limitation shall not affect claims made by the Buyer pursuant to other agreements between the Buyer and the Company.

 

4.          COVENANTS.

 

(a)   Best
Efforts. Each party shall use its best efforts to satisfy each of the covenants and conditions to be satisfied by it as provided
in Sections 5, 6 and 7 of this Agreement on a timely basis.

 

(b)   Regulatory
Filings. Without limiting the generality of Section 4(a) above, as promptly as practicable after the date hereof, the Buyer
shall make all filings, notices, petitions, statements, registrations, submissions of information, application or submission of
other documents required by any Governmental Entity required in connection with this Agreement and the transactions contemplated
hereby. In addition, the Buyer shall use best endeavors to furnish such information, supply such documents, give such undertakings
and do all such acts and things as may reasonably be required by the SEHK and/or any other Governmental Entity in relation to or
arising out of the transactions contemplated hereby.

 

(c)   Listing.
The Company shall take such steps as are necessary to hold an extraordinary general meeting for the independent shareholders of
the Company to consider and approve the issue of Securities pursuant to this Agreement and, if approved by the independent shareholders
of the Company, to promptly secure the listing of, and permission to deal in, all of the New Common Shares on the SEHK and shall
use reasonable best efforts to maintain such listing of and permission to deal in such Common Shares, so long as any other shares
of the Common Shares shall be so listed. The Company shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(c).

 

(d)   Delivery
of Documents. As soon as reasonably practicable following Closing, but no later than one (1) business following the Closing
Date, the Company shall deliver to the Buyer (i) certificates in respect of the New Common Shares, respectively, duly executed
on behalf of the Company and registered in the name of the Buyer; and (ii) a certified register of members of the Common Shares
of the Company, reflecting the Buyer’s ownership of the New Common Shares, respectively.

 

(e)   Fees.
Each party to this Agreement shall bear its own expenses and the fees relating to or arising out of the transactions contemplated
hereby.

 

(f)   Lock-Up.

 

(i)          This
Section 4 (f) Lock-Up shall apply only to the New Common Shares under this Agreement, and shall not affect prior agreements between
the Parties.

 

(ii)         The
Buyer (and to the extent any Securities are Transferred to the Permitted Transferee in accordance with the provisions of Section
4(f)(iv), the Permitted Transferee) shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell,

 

    - 15 - 

     

    

 

grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly
or indirectly, any of the Securities purchased hereunder or enter into any swap, hedging or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of any of such securities (any of the foregoing, a
“Transfer”) without the prior written consent of the Company for a period of two (2) years from the Closing
Date (the “Lock-Up Period”), provided that nothing herein shall restrict the Buyer from a Transfer of any of
the Securities purchased hereunder to the Permitted Transferee and the rights of the Buyer under this Agreement shall not be affected
by such Transfer.

 

(iii)        The
Buyer (and, to the extent any Securities are Transferred to the Permitted Transferee in accordance with the provisions of Section
4(f)(iv), the Permitted Transferee), except with consent of the Board, shall refrain at all times (including with respect to time
periods after the expiration of the Lock-Up Period) from selling the New Common Shares to any person or entity that is a Competitor
(as defined below) of the Company or a member of the Competitor’s Group (as defined below), except (1) in a genuine open
market sale where the identity of the purchaser of the New Common Shares is not known to, and cannot reasonably be determined by,
the Buyer or its agent effecting such sale and provided that the number of New Common Shares that the Buyer is permitted to sell
in the open market shall not exceed 1% of the issued share capital of the Company at the relevant time during any 30-day period,
and (2) accepting an offer (as defined in the Hong Kong Takeovers Code) under a general offer for the Company where the offer has
become unconditional (meaning that the offeror has received acceptances in respect of voting rights in the Company which, together
with voting rights acquired or agreed to be acquired before or during the offer, will result in the offeror and any person acting
in concert with it holding more than 50% (or such other percentage level as contained in the terms of such offer or as otherwise
required from time to time in the Hong Kong Takeovers Code) of the voting rights in the Company), or where the offeror has become
entitled to compulsorily acquire the securities held by the Buyer (and/or the Permitted Transferee) under applicable laws and regulations.
For the purpose of this Section 4(f), “Competitor” means (a) the leading ten (10) companies in the area of pure
foundry or semiconductor, respectively, in terms of annual global revenues according to the most recent data of Gartner and/or
iSuppli as at the Closing Date, or (b) the leading ten (10) semiconductor manufacturing companies in the PRC according to the most
recent data of the Ministry of Industry and Information Technology of the PRC or other institutions under its supervision (such
as but not limited to the China Semiconductor Industry Association) as at the Closing Date. “Competitor’s Group”
means the Competitor, its subsidiaries and holding company, and any subsidiaries of the Competitor’s holding company.

 

(iv)        Notwithstanding
the provisions of this Section 4(f)(ii) or (iii), the Company hereby agrees that the Buyer may, subject to compliance with the
rules (including the Hong Kong Listing Rules), regulations, laws of Hong Kong and the requirements of the SEHK, applicable securities
laws in the United States or any other jurisdictions, transfer all or part of the New Common Shares to a subsidiary or fund under
the direct or indirect control and management of China Investment Corporation (the “Permitted Transferee”) provided,
that, as a condition to any such transfer:

 

		(A)	the Buyer shall inform the Company in writing of the proposed Transfer to the Permitted Transferee
before effecting it;

 

    - 16 - 

     

    

 

		(B)	the Permitted Transferee shall be entitled to further transfer
the Securities to another Permitted Transferee during the remaining period of the Lock-up Period on the condition that the provision
relating to transfer to “Permitted Transferee” in Section 4(f)(iv) shall have been complied with).

 

(g)   Public
Disclosure. Without limiting any other provision of this Agreement, the Company and Buyer (and to the extent any Securities
are Transferred to the Permitted Transferee in accordance with the provisions of this Section 4(g), the Permitted Transferee),
to the extent permitted by applicable law, will consult with each other before issuance, and provide each other the opportunity
to review, comment upon and concur with, and use all reasonable efforts to agree on any press release or public statement with
respect to this Agreement and the transactions contemplated hereby, and will not (to the extent practicable) issue any such press
release or make any such public statement prior to such consultation and agreement, except as may be required by law, rules, regulations
or any listing agreement with or requirement of the NYSE, SEHK or any other applicable securities exchange, provided that the disclosing
party shall, to the extent permitted by applicable law, rules, regulations or any listing agreement with or requirement of the
NYSE, SEHK or any other applicable securities exchange and if reasonably practicable, inform the other parties about the disclosure
to be made pursuant to such requirements prior to the disclosure.

 

(h)   Conduct
of Business. Save as disclosed in this Agreement or any public disclosure made by the Company prior to the date of this Agreement,
or consented in writing by the Buyer, during the period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement pursuant to Section 8(a) hereof or the Closing, the Company shall and shall cause its Significant
Subsidiaries, except as permitted and contemplated by the terms of this Agreement or disclosed in any public disclosure made by
the Company prior to the date of this Agreement, carry on its business, in all material respects, in the ordinary and normal course
and, not (i) undertake any construction of any new plants and buildings, (ii) enter into any notifiable transactions (as such term
is defined under the Hong Kong Listing Rules), (iii) save as required by applicable laws, rules or regulations, make or propose
to make any amendments to its memorandum or articles of association or (iv) agree to, either verbally or in writing, authorize
or approve any of the foregoing.

 

For the avoidance of doubt,
the Company may continue to be involved in the existing construction of plants and buildings, as the Board may consider appropriate
from time to time but in any event such involvement would not result in or reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

 

(i)   Use
of Proceeds. The Company shall use the proceeds received from the issue of the Securities hereunder for the purpose of capital
expenditure and debt repayment and general corporate purposes.

 

(j)   Pre-emptive
Rights.

 

    - 17 - 

     

    

 

(i)          If
the Company proposes, on or after the date of this Agreement, to issue (a) any new Common Shares or preferred shares, (b) any securities
convertible into or exchangeable into Common Shares or preferred shares (which preferred shares referred to in (a) and (b) above
carry voting rights in general meetings of the Company) or (c) any warrants or other rights to subscribe for Common Shares or preferred
shares (which preferred shares carry voting rights in general meetings of the Company) (“Relevant Securities”),
the Company shall notify Buyer in writing of such proposal (an “Issue Notice”). The Issue Notice shall specify
the number and type of Relevant Securities to be offered by the Company and the material terms of the proposed offer (including
the proposed completion date of such issue and the proposed price per Relevant Security to be paid by the proposed third party
purchaser(s)).

 

(ii)         Subject
to sub-paragraph (vii) below, the Buyer shall have the right but not the obligation to subscribe for or purchase such number of
the Relevant Securities which are the subject of the Issue Notice so as to enable the Buyer to hold, after the issue of the Relevant
Securities,

 

			a pro rata portion of the Relevant Securities equal to the percentage of the issued share capital
of the Company then beneficially owned by the Buyer (together with the Permitted Transferee) prior to the issuance of the Relevant
Securities,

 

upon the same terms and
conditions set forth in the Issue Notice, by giving written notice to the Company of the exercise of this right within ten (10)
Business Days (as defined below) of the giving of the Issue Notice. If such notice is not given by the Buyer within such ten (10)
Business Days, the Buyer shall be deemed to have elected not to exercise its rights under this Section 4(j) with respect to the
issuance described in that specific Issue Notice. The parties acknowledge that any rights of the Buyer to subscribe for and purchase
the Relevant Securities pursuant to this Section 4(j) will lapse if completion thereof does not occur simultaneously with the completion
of the offering of Relevant Securities by the Company or at such other time and place as shall be mutually agreed by the Company
and the Buyer (which agreement shall not be unreasonably withheld), provided that if the reason for the Buyer’s failure to
complete by the time specified above is solely due to a delay of the Governmental Entity in granting the relevant authorizations,
approvals, permits, qualifications or exemptions, the Buyer shall notify the Company in writing at least seven (7) days prior to
the completion of the offering of the Relevant Securities to extend the completion date for Buyer to a date within three (3) months
or such other reasonable period as may be mutually agreed between the parties following the completion of the issue of the Relevant
Securities, after such period the right to the Buyer to subscribe for and purchase the Relevant Securities pursuant to this Section
4(j) shall lapse. A notice given by the Buyer pursuant to this section shall be irrevocable.

 

(iii)        Subject
to Sections 4(j)(i) and 4(j)(ii) above, the completion of the Buyer’s purchase of Relevant Securities pursuant to section
(ii) above shall occur simultaneously with the completion of the offering of Relevant Securities by the Company. For the avoidance
of doubt, the completion by the Company of the offering of the Relevant Securities shall not be affected by the timing of the completion
of any issue of the Relevant Securities to the Buyer. The Buyer shall execute and deliver to the Company all transaction documents
related to Buyer’s purchase of Relevant Securities as may be reasonably requested by the Company prior to the completion
of the Buyer’s purchase of Relevant

 

    - 18 - 

     

    

 

Securities. At such completion, the Buyer shall deliver the aggregate purchase price
for the Relevant Securities to be purchased by the Buyer pursuant to Sections 4(j)(i) and 4(j)(ii) above.

 

(iv)        Any
Relevant Securities to be issued to the Buyer pursuant to this Section 4(j)(ii) above shall be issued on the same terms and subject
to the same conditions as the Relevant Securities issued to any proposed third party purchaser(s), such terms and conditions being
set out in the Issue Notice.

 

(v)         The
provisions of Section 4(j)(i) to (iv) shall not apply to:

 

(1)   the
grant of any employment options (including those given to directors or consultants), or the issue of any Relevant Securities pursuant
to the exercise of employment based share options (including those given to directors or consultants) granted (whether prior to
or after the date of this Agreement), pursuant to any share purchase or share option plans of the Company in effect from time to
time;

 

(2)   the
issue of any Relevant Securities pursuant to any share incentive scheme operated by the Company from time to time;

 

(3)   the
issue of any Common Shares or other securities pursuant to the conversion, exchange or exercise of any securities that were previously
offered and/or issued to Buyer (including its Permitted Transferee, if applicable) as Relevant Securities;

 

(4)   any
offer of the Relevant Securities open for a period fixed by the Board to holders of Common Shares on the register of members on
a fixed record date in proportion to their then holdings of Common Shares; provided that such offer of Relevant Securities is also
made to Buyer, unless it is restricted by any legal restrictions under the laws of the relevant place or the requirements of the
relevant regulatory body or stock exchange in that place to make such offer to the Buyer in which case the provisions of Section
4(j)(i) to (iv) shall apply;

 

(5)   an
issue of Common Shares as fully paid to holders of Common Shares (including without limitation, Common Shares paid up out of distributable
profits or reserves and/or share premium account issued in lieu of the whole or any part of any cash dividend and free distributions
or bonus issue of Common Shares); provided that such issuance of Common Shares is also made to Buyer;

 

(6)   an
issue of the Relevant Securities pursuant to the acquisition of another corporation by the Company by merger, purchase of substantially
all of the assets or other reorganization or to a joint venture agreement; provided, that such issuance is approved by the Board;

 

(7)   the
issue of any Relevant Securities as a result of the conversion of the Convertible Bonds; or

 

(8)   the
issue of any Relevant Securities to Country Hill pursuant to the Country Hill Pre-emptive Right as a result of the issuance of
the New Common Shares pursuant to this Agreement.

 

    - 19 - 

     

    

 

(vi)        The
rights set forth in this Section 4(j) shall not apply with respect to and shall expire immediately prior to a transaction that
would result in a change of control (as such term is defined under the Hong Kong Takeovers Code).

 

“Business Day”
shall mean a day that is not a Saturday, Sunday or a public holiday in Hong Kong or the PRC.

 

(vii)       The
Company and the Buyer acknowledge and agree that the Buyer’s exercise of the rights in this Section 4(j) shall in all cases
be subject to compliance with the rules, regulations, laws and requirements of applicable government and regulatory bodies, including
the Hong Kong Listing Rules, the Hong Kong Takeovers Code, the Stock Exchange of Hong Kong Limited and the Securities and Futures
Commission of Hong Kong (including, where applicable any requirements to obtain the approval of the shareholders of the Company),
and shall take such steps reasonably necessary to give effect to the rights contained in this Section 4(j) in compliance with rules,
regulations, laws and requirements of applicable government and regulatory bodies, provided that all costs and expenses (including,
without limitation, reasonable legal fees and expenses) incurred by the Company shall be resolved in a manner consistent with any
terms agreed to by the Company and the other potential investor(s) with respect to the issuance described in the relevant Issue
Notice.

 

(k)   Exclusivity.
During the period from the date of this Agreement and continuing until the earliest of (A) the termination of this Agreement pursuant
to Section 8(a) hereof or (B) the Closing, the Company agrees not to initiate, solicit, encourage or engage in any discussion or
negotiation of any type with, provide any information to, accept and proposal from, or enter into any letter of intent, purchase
contract or any other similar agreement, or consummate any transaction, with any persons or entities other than the Buyer with
respect to any equity or convertible debt instrument in the Company or with respect to any sale of substantially all of the assets
of the Company or any of its Significant Subsidiaries, provided that nothing in this section shall prohibit the Company from carrying
out any normal investor or public relations activities in its ordinary course of business.

 

(l)   Discussion. Subject to applicable law, rules, regulations and requirements (including the Hong Kong Listing Rules and the
requirements of the SEHK and NYSE), during the period from the date of this Agreement and continuing until the earlier of the termination
of this Agreement pursuant to Section 8(a) hereof or the Closing, the Company will use its reasonable efforts to meet with, and/or
communicate with representatives of the Buyer upon reasonable request and to discuss any material operational matters in good faith
and to consider whether and how to exercise its discretion to implement any reasonable suggestions from the Buyer.

 

		5.	CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL
AND TO THE BUYER’S OBLIGATION TO PURCHASE.

 

The obligation of the
Company hereunder to issue and sell the New Common Shares to the Buyer at the Closing and the obligation of the Buyer hereunder
to purchase the New Common Shares from the Company hereunder are each subject to the satisfaction, at or before the Closing Date,
of each of the following conditions, provided that these conditions may be waived,

 

    - 20 - 

     

    

 

in whole or in part, by either party hereto
only as regards the obligations of the other party to procure the relevant conditions, at any time in its sole discretion by providing
the other party hereto with prior written notice thereof:

 

(a)   SEHK
Listing. Approval for the listing of, and permission to deal in the New Common Shares shall have been duly obtained from the
SEHK and such approval not subsequently being revoked prior to Closing.

 

(b)   Independent
shareholders’ approval. The Company having obtained the approval of the independent shareholders of the Company in EGM
of the issue of the New Common Shares to the Buyer and the granting of a special mandate for the issue of the New Common Shares
at Closing pursuant to the terms of this Agreement.

 

(c)   No
Governmental Prohibition. The sale of the Securities by the Company and the purchase of the Securities by the Buyer shall not
be prohibited by any law or governmental order or regulation.

 

6.          CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.

 

The obligation of the
Company hereunder to issue and sell the New Common Shares to the Buyer at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company, in whole or in part, at any time in its sole discretion by providing the Buyer with prior written
notice thereof:

 

(a)   Execution
of Transaction Documents and other documents. The Buyer shall have executed each of the Transaction Documents to which it is
a party and delivered the same to the Company.

 

(b)   Representations
and Warranties; Covenants. The representations and warranties of the Buyer shall be true and correct in all material respects
(except for those representations and warranties that are qualified by materiality or material adverse effect, which shall be true
and correct to such extent) , and the Buyer shall have performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the
Closing Date.

 

7.          CONDITIONS
TO THE BUYER’S OBLIGATION TO PURCHASE.

 

The obligation of the
Buyer hereunder to purchase the New Common Shares at the Closing is subject to the satisfaction, at or before the Closing Date,
of each of the following conditions, and may be waived by the Buyer, in whole or in part, at any time in its sole discretion by
providing the Company with prior written notice thereof:

 

    - 21 - 

     

    

 

(a)   Execution
of Transaction Documents and other documents. The Company shall have duly executed and delivered to the Buyer each of the Transaction
Documents and the documents set forth in Section 1(c)(ii)(B).

 

(b)   No
occurrence of an event with Material Adverse Effect. There shall
not have occurred any event which may have any Material Adverse Effect in respect of the Company and its Significant Subsidiaries
taken as a whole.

 

(c)   Representations
and Warranties; Covenants. The representations and warranties of the Company contained in this Agreement shall be true and
correct in all material respects (except for those representations and warranties that are qualified by materiality or Material
Adverse Effect, which shall be true and correct to such extent), and the Company shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied
or complied with by the Company at or prior to the Closing Date.

 

(d)   Legal
opinion. The Buyer shall have received a legal opinion from the Company’s Cayman Islands legal counsel in form
and substance solely to the satisfaction to the Buyer.

 

8.          TERMINATION.

 

(a)   Subject
to Section 8(b) below, this Agreement may be terminated and the transactions contemplated by this Agreement abandoned at any time
prior to the Closing:

 

(i)          by
mutual agreement of the Company and the Buyer;

 

(ii)         by
the Company if the closing and issuance of securities under the share purchase agreement, dated February 12, 2015, by and between
the Company and China Integrated Circuit Industry Investment Fund Co., Ltd. shall not have occurred pursuant to the terms therein;

 

(iii)        by
the Company or the Buyer if the Closing Date shall not have occurred by the date falling four months after the date of this Agreement
or any other date as may be agreed between the parties; provided, however, that the right to terminate this Agreement
under this Section 8(a)(ii) shall not be available to a party if such party’s action or failure to act has been a principal
cause of or resulted in the failure of the Closing to occur on or before such date and such action or failure to act constitutes
breach of this Agreement;

 

(iv)        by
the Company or the Buyer if any legislative body, court, administrative agency or commission or other governmental authority, instrumentality,
agency or commission shall have enacted, issued, promulgated, enforced or entered any law or governmental regulation or order which
has the effect of prohibiting the sale and issuance of the Securities;

 

(v)         by
the Buyer if there has been a material breach of any representation or warranty of the Company hereunder that would have a Material
Adverse Effect on the Company or any material breach of any covenant or agreement of the Company hereunder;

 

    - 22 - 

     

    

 

(vi)        by
the Company if there has been a material breach of any representation, warranty, covenant or agreement of the Buyer contained in
this Agreement; and

 

(vii)       by
the Buyer if, from the date of this Agreement to the Closing Date, there shall have occurred (i) a material limitation of trading
of the Shares on the SEHK; or (ii) a suspension in trading of the Common Shares on the SEHK for a consecutive period of five Trading
Days (save in respect of any suspension in trading of the Common Shares which is of a routine nature, including suspension pending
the announcement of price sensitive information, the announcement or disclosure of notifiable transactions).

 

(b)   In
the event of termination of this Agreement as provided in Section 8(a) above, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of the parties hereto and, as applicable, the officers, directors and shareholders
of each party; provided that each party hereto shall remain liable for any breaches of this Agreement or of any certificate
or other instruments delivered pursuant to this Agreement prior to its termination; and provided further that the
provisions of Sections 8 and 9 hereof shall remain in full force and effect and survive any termination of this Agreement
pursuant to the terms of this Section 8.

 

9.          MISCELLANEOUS.

 

(a)   Governing
Law; Arbitration. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed in accordance with the laws of Hong Kong. Any dispute, controversy or claim arising out of or relating
to this Agreement, or the interpretation, breach, termination or validity hereof, shall be submitted to arbitration upon the request
of any party with notice to the other parties. The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong
International Arbitration Centre (the “HKIAC”) in accordance with the UNCITRAL Arbitration Rules (“UNCITRAL
Rules”) in effect, which rules are deemed to be incorporated by reference into this Section 9(a). There shall be three
(3) arbitrators. The complainant and the respondent to such dispute shall each select one arbitrator within thirty (30) days after
giving or receiving the demand for arbitration. The Chairman of the HKIAC shall select the third arbitrator, who shall be qualified
to practice law in Hong Kong. If either party to the arbitration does not appoint an arbitrator who has consented to participate
within thirty (30) days after selection of the first arbitrator, the relevant appointment shall be made by the Chairman of the
HKIAC. The arbitration proceedings shall be conducted in English. Neither party shall be required to give general discovery of
documents, but may be required to produce specific, identified documents that are relevant to the dispute. Each party irrevocably
waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue
of any such arbitration in Hong Kong and the HKIAC, and hereby submits to the exclusive jurisdiction of HKIAC in any such arbitration.
The award of the arbitration tribunal shall be conclusive and binding upon the disputing parties, and any party to the dispute
may apply to a court of competent jurisdiction for enforcement of such award. Any party to the dispute shall be entitled to seek
preliminary injunctive relief in aid of arbitration, if possible, from any court of competent jurisdiction pending the constitution
of the arbitral tribunal.

 

(b)   Claim
in respect of Representations and Warranties. The representation, warranty, covenant or undertaking (the “Warranties”)
contained in this Agreement shall remain in full force and

 

    - 23 - 

     

    

 

effect notwithstanding Closing except as terminated pursuant to the
terms hereof or by a waiver or release by the party entitled to enforce such Warranties. No claim shall be brought against any
party in relation to the Warranties unless the party making the claim shall have given the other party written notice of such claim
specifying (in reasonable detail) the matter which gives rise to the claim, the nature of the claim and the amount claimed in respect
thereof promptly and in any event before the expiration of the applicable statute of limitations. The parties agree that any assessment
of damages shall not include any special, consequential or punitive damages and shall only be limited to actual damages suffered
including any diminution in the value of the Securities purchased as a result of any breaches.

 

(c)   Remedies
and waivers. No delay or omission by any party to this Agreement in exercising any right, power or remedy provided by law or
under this Agreement or any other documents referred to in it shall: (i) affect that right, power or remedy; or (ii) operate as
a waiver thereof. The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not
preclude any other or further exercise or any other right, power or remedy. Except as otherwise expressly provided in this Agreement,
the rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies
provided by law.

 

(d)   Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which 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. A facsimile signature
shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature
were an original, not a facsimile signature.

 

(e)   Languages.
This Agreement is being executed in English only.

 

(f)   Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

(g)   Severability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.

 

(h)   Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the Confidentiality Agreement supersede all other
prior oral or written agreements between the Buyer, the Company, their affiliates and Persons acting on their behalf with respect
to the matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and
therein contain the entire understanding of and agreement between the parties with respect to the matters covered herein and therein
and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. In entering into this Agreement and the other Transaction Documents, each
part to such agreements acknowledges that it is not relying upon any pre-contractual statement which is not expressly set out in
them. No provision of this

 

    - 24 - 

     

    

 

Agreement may be amended other than by an instrument in writing signed by the Company and the Buyer.
No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.

 

Without prejudice to Section
3A(p) above pursuant to which the Company represents
and warrants that all information given in connection with the transactions contemplated by this Agreement by the Company or on
its behalf by the Company's advisers, to the Buyer or the Buyer's advisers, relating to the Company, its Significant Subsidiaries
or their respective business, activities, affairs, or assets or liabilities (including all documents attached thereto) was, when
given, and is now accurate in all material respects and not misleading in any material respect, and there is no material omission
that would render the information given misleading in any material respect, except in the case of fraud, no party shall have any
right of action against any other party to this Agreement or the other Transaction Documents arising out of or in connection with
any pre-contractual statement except to the extent that it is repeated in this Agreement and/or the other Transaction Documents.

 

For the purposes of this
section, “pre-contractual statement” means any draft, agreement, undertaking, representation, warranty, promise, assurance
or arrangement of any nature whatsoever, whether or not in writing, relating to the matters covered in this Agreement and/or the
other Transaction Documents made or given by any person at any time prior to the date of this Agreement or the other Transaction
Documents.

 

(i)   Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party
to receive the same. The addresses and facsimile numbers for such communications shall be:

 

If to the Company:

 

	 	Semiconductor Manufacturing International Corporation
	 	Address:	Suite 3003, 30th Floor
	 	 	No. 9 Queen's Road Central
	 	 	Hong Kong
	 	Telephone:	(852) 2537-8458
	 	Facsimile:	(852) 2537 8206
	 	Attention:	Ms. Meifung Hoo

 

If to the Buyer:

 

Country Hill Limited

  

    - 25 - 

     

    

 

	 	Address:	6/F, New Poly Plaza, No.1 Chaoyangmen Beidajie
	 	 	Dongcheng District, 100010
	 	 	Beijing, P.R.China
	 	Telephone:	+86 10 8409 6529
	 	Facsimile:	+86 10 64086282
	 	Attention:	Mr. Qu Kai, Mr. Xu Jing

 

(j)   Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns. Neither party hereto shall not assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto.

 

(k)   No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

(l)   Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

[Signature
Page Follows]

 

    - 26 - 

     

    

 

IN WITNESS WHEREOF,
the Buyer and the Company have caused its respective signature page to this Share Purchase Agreement to be duly executed as of
the date first written above.

 

	 	COMPANY:
	 	 
	 	Semiconductor Manufacturing 

International Corporation
	 	 	 
	 	By:	
	 		Name:	 
	 		Title:	 

 

     

     

    

 

IN WITNESS WHEREOF,
the Buyer and the Company have caused their respective signature page to this Share Purchase Agreement to be duly executed as of
the date first written above.

 

	 	BUYER:
	 	 
	 	Country Hill Limited
	 	 	
	 	By:	
	 		Name:	 
	 		Title:Exhibit 10.1

 

EXECUTION VERSION

 

 

 

LICENSE AND SUPPLY AGREEMENT

 

BETWEEN

 

ACERUS PHARMACEUTICALS SRL

 

and

 

AYTU BIOSCIENCE, INC.

 

 

 

Dated as of April 22, 2016

 

     

     

    

 

LICENSE AND SUPPLY AGREEMENT

 

This LICENSE AND SUPPLY
AGREEMENT (this “Agreement”) is made and effective as of April 22, 2016 (the “Effective Date”)
by and among Acerus Pharmaceuticals SRL, a society with restricted liability, having its principal office at Suite B, Durants Business
Center, Durants, Christ Church, Barbados (“Acerus”) and Aytu Bioscience, Inc., a Delaware corporation, having
its principal office at 373 Inverness Parkway, Suite 206 Englewood, CO 80112 (“Aytu”) (each of Acerus and Aytu
being a “Party,” and collectively, the “Parties”).

 

WHEREAS, Acerus has
identified and acquired the rights to the NGDD Technology (as defined below), designed and completed successful clinical trials
for the Product (as defined below), established manufacturing methodologies and capabilities to meet commercial demand within required
specifications for the Product, prepared and filed a New Drug Application for the Product approved by the FDA (as defined below)
on May 28, 2014, developed and owns, or has exclusive rights to, all right, title and interest in and to certain patents, know-how
and trademarks relating to the Product;

 

WHEREAS, Acerus has
previously licensed the rights to develop, use, commercialize, distribute and sell Product in the Territory to Endo Ventures Bermuda
Limited (“Endo”) pursuant to a License, Development and Supply Agreement dated November 23, 2014 (the “Endo
Agreement”);

 

WHEREAS the Endo Agreement
is in force as of the Effective Date but is due to terminate in accordance with the terms and conditions thereof on June 30, 2016
(or such other date as may be agreed by Acerus and Endo) (the “Transition Date”); and

 

WHEREAS, Aytu desires
to obtain a license to develop, use, commercialize, distribute and sell Product following the Transition Date (or sooner if mutually
agreed to by the Parties) and to obtain a supply of Product from Acerus, and Acerus is willing to grant such license and provide
such supply on the terms and conditions set forth below;

 

NOW THEREFORE, in consideration
of the mutual promises and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE
1

 

DEFINITIONS

 

The following terms,
whether used in the singular or the plural, shall have the meanings designated to them under this Article unless otherwise specifically
indicated.

 

1.1           
“Acerus” has the meaning set forth in the preamble.

 

1.2           “Acerus’
COGS” shall mean all of Acerus’ costs to produce or procure supplies of the Product to the extent that such
Costs would ordinarily be included as a cost of goods sold under International Financial Reporting Standards, as applied
across all of Acerus’ products.

 

    1 

     

    

 

1.3           “Acerus
Confidential Information” has the meaning set forth in Section 10.1.

 

1.4           “Acerus
Indemnitees” has the meaning set forth in Section13.1.

 

1.5           “Acerus
Intellectual Property” means the Acerus Patents and Acerus Know-How.

 

1.6           “Acerus
Know-How” means any and all Know-How Controlled by Acerus at the Effective Date that is reasonably necessary to
make, use, sell, offer for sale, import, market, promote, develop or commercialize the Product together with any Developed
Technology in which Acerus has an ownership interest pursuant to Section 9.2), but, in each case excluding the Acerus
Patents.

 

1.7           “Acerus
Manufacturing Defect” has the meaning set forth in Section 13.3(a).

 

1.8           “Acerus
Patent” means any patent or patent application (including, without limitation, any Developed Technology in which
Acerus has an ownership interest pursuant to Section 9.2) in the Territory that is Controlled by Acerus at any
time during the Term and that claims or would otherwise be infringed by the Product or any formulation or line extension
thereof, or the Manufacture or use of Product or any such product or any formulation or line extension thereof, and any
provisional, continuation, divisional, continuation in part application, substitution, reissue, renewal, reexamination,
protection certificate, extension, registration and confirmation of any such patent or patent application. The Acerus Patents
as at the Effective Date include those listed in Schedule 1.8.

 

1.9           “Acerus
Trademarks” means the “NatestoTM” trademark including United States Trademark Registration No.
4761006 and any other trademark related to the Acerus Intellectual Property or the Product that is owned or Controlled by
Acerus as of or following the Effective Date.

 

1.10         “Accounting
Standards” means the current accounting standards applicable to Aytu or Acerus, as applicable, for the relevant
time period. As of the Effective Date, the Accounting Standards are U.S. GAAP for Aytu and International Financial
Reporting Standards for Acerus, but in the event Aytu or Acerus, as applicable, adopts a different accounting standard, such
as the International Financial Reporting Standards (in the case of Aytu), then such accounting standard shall become the
Accounting Standards as of the effective date of its adoption, as applicable.

 

1.11         “Active
Ingredient” means testosterone.

 

1.12         “Active
Ingredient Specifications” means the specifications for the Active Ingredient to be used in Product, attached
hereto as Schedule 1.12, as such specifications may be amended from time to time by mutual agreement of the Parties.

 

    2 

     

    

 

1.13         “Affiliate” means
any company or entity controlled by, controlling, or under common control with a Party. For purposes of the definition of
“Affiliate,” “control” and, with corresponding meanings, the terms “controlled by,”
“controlling,” and “under common control with” means (a) the ownership, directly or indirectly, of
more than fifty percent (50%) of the voting securities, participating profit interest, or other ownership interests of a
legal entity, or (b) the possession, directly or indirectly, of the power to direct the management or policies of a
legal entity, whether through the ownership of voting securities or by contract relating to voting rights or corporate
governance.

 

1.14         “Agreement” has
the meaning set forth in the Preamble.

 

1.15         “ANDA” means
an Abbreviated New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the
FDA.

 

1.16         “Annual
Net Sales” means Net Sales of the Product in any fiscal year beginning on July 1 and ending on June 30.

 

1.17         “Applicable
Senior Officers” means the Chief Executive Officer and/or Chief Operating Officer of Aytu or his or her designee,
and the Vice President, Finance of Acerus or his or her designee.

 

1.18         “Arbitration” has
the meaning set forth in Section 15.11(c).

 

1.19         “Arbitration
Request” has the meaning set forth in Section 15.11(d).

 

1.20         “Arbitrators” has
the meaning set forth in Section 15.11(e)(i).

 

1.21         “Audited
Party” has the meaning set forth in Section 7.8(b).

 

1.22         “Aytu”
has the meaning set forth in the Preamble.

 

1.23         “Aytu
Confidential Information” has the meaning set forth in Section 10.1.

 

1.24         “Aytu
Indemnitees” has the meaning set forth in Section 13.2.

 

1.25         “Aytu
Intellectual Property” means any Developed Technology that is owned solely by Aytu pursuant to Section 9.2.

 

1.26         “Aytu
Share” has the meaning set forth in Section 7.5.

 

1.27         “Bankruptcy
Laws” means Title 11 of the United States Code, 11 U.S.C. §§ 101 1330, as it may be amended from time to
time, any successor statute or any applicable state or foreign laws relating to bankruptcy, dissolution, liquidation, winding
up or reorganization.

 

1.28         “Batch” means
batches of Product for commercial resale or supply or stability testing purposes in the sizes (“Standard Batch
Size”) set forth in Schedule 1.28 hereto.

 

    3 

     

    

 

1.29         “BID
Trial” means any clinical trial or study undertaken to obtain Regulatory Approval for twice-per-day dosing for the Product
to be included on the approved Product label in the Territory, together with any related clinical development activities.

 

1.30         “Business
Day” means any day except (a) Saturday, (b) Sunday (c) a day that is a federal legal holiday in the U.S. or (d) a day
that is a legal holiday in Barbados.

 

1.31         “Cardiovascular
PMR” means the postmarketing obligations applicable to the Product pursuant to Sections 505(o)(3) and 505(o)(4) of the
FD&C Act, as more particularly described in the letter from the FDA to Endo (in its capacity as holder of the NDA for the Product
on the applicable date) dated September 2, 2015 (and all such additional correspondence relating to such subject matter since such
time, as applicable), a copy of which has been provided to Aytu prior to the Effective Date.

 

1.32         “Claims” has
the meaning set forth in Section 13.1.

 

1.33         “Clinical
Trial” means any clinical testing of Product in human subjects.

 

1.34         “Clinical
Trial Material” means Product and placebo for administration to humans in Clinical Trials.

 

1.35         “CMC” means
data, information, or procedures (as applicable) relating to the composition, Manufacture, or control of Product, which may
be requested or required by a Regulatory Authority for Regulatory Approval, including but not limited to data, information,
and procedures relating to structure, Manufacturing process, validation, characterization, container closure systems,
stability, quality, and purity.

 

1.36         “Commercially
Reasonable Efforts” means, with respect to a Party’s obligations under this Agreement, the carrying out of such
obligations with a level of effort and resources consistent with the commercially reasonable practices of a similarly situated
company in the pharmaceutical industry that would be applied to the development or commercialization of a pharmaceutical product
comparable to the Product at a similar stage of development or commercialization (but explicitly ignoring the royalty, milestone
and other payments due Acerus under this Agreement).

 

1.38         “Competing
Product” means a pharmaceutical product that has as an approved indication, the treatment of primary or secondary
hypogonadism in males.

 

1.39         “Confidential
Information” has the meaning set forth in Section 10.1.

 

1.40         “Controlled” means,
with respect to any item of Know-How or any intellectual property right, that a Party owns or has a license to such item or
right and has the ability to grant to the other Party a license or sublicense under such item or right as provided for in
this Agreement without violating the terms of any agreement or other arrangement with any Third Party in existence, as
applicable.

 

1.41         “Credit
Amount” has the meaning set forth in Section 7.3(c)(iv).

 

    4 

     

    

 

1.42         
“Damages” has the meaning set forth in Section 13.1.

 

1.43         “Defending
Party” has the meaning set forth in Section 13.3.

 

1.44         “Delivery
Date” means the date for the delivery of Product to the delivery destination as stated in the applicable Purchase
Order for such shipment, subject to the terms and conditions of this Agreement.

 

1.45         “Delivery
Deposit” has the meaning set forth in Section 7.3(c)(i).

 

1.46         “Detail”
means a face-to-face contact by a Representative of Aytu with a target prescriber in an individual or group practice setting, and
during which the indicated uses, safety, effectiveness, contraindications, side effects, warnings and other relevant characteristics
of the Product are described by the Representative in a fair and balanced manner consistent with the FD&C Act and all applicable
laws. When used as a verb, “Detail” shall mean to engage in a Detail.

 

1.47         “Developed
Technology” means Know-How conceived and reduced to practice or originally authored by or on behalf of one or both
Parties pursuant to this Agreement and any intellectual property rights appurtenant thereto (including any patents and patent
applications claiming such Know-How).

 

1.47         
[RESERVED]

 

1.49         “Disclosing
Party” has the meaning set forth in Section 10.1.

 

1.50         “Effective
Date” has the meaning set forth in the Preamble.

 

1.51         “Endo”
has the meaning set forth in the Preamble.

 

1.52         “Endo
Agreement” has the meaning set forth in the Preamble.

 

1.53         “Existing
CDA” has the meaning set forth in Section 15.2.

 

1.54         “FD&C
Act” means the U.S. Federal Food, Drug, and Cosmetics Act (21 U.S.C. Section 301 et seq.), as amended.

 

1.55         “FDA” means
the U.S. Food and Drug Administration.

 

1.56         “Field” means
the treatment of hypogonadism in men.

 

1.57         “Finished
Goods” means Product that is completely manufactured and packaged and released in a manner for sale or use, including
trade or sample use, by an end user of such Product, in each case in accordance with Applicable Law and the Product Specifications.

 

1.59         “First
Milestone” has the meaning set forth in Section 7.2.

 

    5 

     

    

 

1.60         “Full
Time Basis” means, in the case of a Representative employed or otherwise engaged by Aytu to Detail the Product, the provision
of not less than 37.5 hours of service to Aytu per week in connection with the Detailing of the Product and other Aytu products
(provided, however, that for purposes of this Agreement, a Representative shall only be determined to be completing Primary Details
of the Product on a Full Time Basis if not less than 66 2/3% of the Representative’s time is devoted to Primary Detailing
of the Product).

 

1.61         “GAAP”
means generally accepted accounting principles, consistently applied.

 

1.62         “Generic
Product” means a product automatically substitutable (AB rated) for the Product at the retail pharmacy level within
the Territory.

 

1.63         “IND” means
an Investigational New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by
the FDA, the filing of which is necessary to commence a Clinical Trial.

 

1.64         “Indemnitee” has
the meaning set forth in Section 13.3.

 

1.65         “Indemnitor” has
the meaning set forth in Section 13.3.

 

1.66         “Initial
Detailing Stage” has the meaning set forth in Section 6.4(a)

 

1.67         “Initial
Term” has the meaning set forth in Section 14.1.

 

1.68         “Initiating
Party” has the meaning set forth in Section 9.4(c).

 

1.69         “Invoiced
Amount per Unit” has the meaning set forth in Section 7.3(c)(i).

 

1.70         “JCC” has
the meaning set forth in Section 2.1.

 

1.71         “Know-How” means
and includes conceptions, ideas, reductions-to-practice, innovations, inventions, processes, machines, equipment,
compositions of matter, compounds, formulations, products, genetic material, improvements, enhancements, modifications,
technological developments, know-how, methods, treatments, techniques, systems, designs, artwork, drawings, plans,
specifications, blueprints, works, mask works, software, documentation, data and information (irrespective of whether in
human or machine-readable form), works of authorship, and products, in each case whether or not patentable, copyrightable, or
susceptible to any other form of legal protection.

 

1.72         “Long
Term Inability to Supply” means, with respect to Product, Acerus’ failure to supply Aytu with at least fifty percent
(50%) over any three (3) consecutive month period, in each case of the quantities of Product that Acerus is obligated to supply
in accordance with the terms of this Agreement, for any reason other than force majeure, as such term is defined in Section 15.4.

 

1.73         “Manufacture”
has the meaning given to such term in Section 5.1(a)(i).

 

    6 

     

    

 

1.74         “Materials” shall
mean the components and materials used in the Manufacture of the Product, including raw materials (active and inert), API,
and subassemblies (e.g., multi-dose dispensers of the Product and the components thereof) including packaging and labeling
materials used to produce Finished Goods.

 

1.75         “Maximum
Capacity” has the meaning set forth in Section 5.1(b)(i).

 

1.76         “NDA” means
a New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA.

 

1.77         “Net
Sales” means the gross amount invoiced by Aytu, its Affiliates, or sublicensees for the sale of Product to Third
Parties, less deductions, determined in accordance with Aytu’s standard accounting methods as generally and
consistently applied by Aytu, for: (i) normal and customary trade, cash and quantity discounts actually allowed and properly
taken, credits, price adjustments or allowances for damaged Products, returns, defects, recalls or rejections of Products or
retroactive price reductions specifically identifiable to the Product; (ii) chargebacks and rebates (or the equivalent
thereof, inclusive of patient co-pay coupons, cards or other co-pay assistance program deductions through point-of-care
discounting or physical rebate couponing) granted to group purchasing organizations, managed health care organizations or to
federal, state/provincial, local and other governments, including their agencies, or to trade customers and other amounts
paid on sale or dispensing of the Product or to wholesalers for inventory management programs; (iii) freight, shipping
insurance and other transportation expenses directly related to the sale (but not sampling) of Product (if actually borne by
Aytu, its Affiliates, or sublicensees without reimbursement from any Third Party); (iv) required distribution
commissions/fees (such as fees related to services provided pursuant to distribution service agreements with major
wholesalers) payable to any Third Party providing distribution services to Aytu so long as the such commissions/fees are
consistent with the distribution commissions/fees payable in respect to other branded prescription products commercialized by
Aytu; (v) sales, value-added, excise taxes, tariffs and duties, and other taxes and government charges directly related to
the sale, to the extent such items are included in the gross invoice price and actually borne by Aytu, its Affiliates, or
sublicensees without reimbursement from any Third Party (but not including taxes assessed against the income derived from
such sales) and (vi) amounts repaid or credited or provisions made for uncollectible amounts on previously sold
Product.

 

“Net
Sales,” as set forth in the above definition, shall be calculated in accordance with Aytu’s usual and customary
accounting methods, which shall be in accordance with the Accounting Standards. Sales from Aytu to its Affiliates or
sublicensees shall be disregarded for purposes of calculating Net Sales.

 

Notwithstanding anything
to the contrary, to the extent Aytu, any Affiliate, or any sublicensee grants discounts (including, without limitation, trade,
cash, and quantity discounts), retroactive price reductions, charge-back payments, credits, rebates, and similar payments or adjustments
to managed health care organizations, pharmacy benefit management companies, health care insurance carriers, federal, state or
local governments, their agencies, purchasers, reimbursers, or trade customers, including but not limited to wholesalers or other
distributors, or any adjustments arising from consumer discount programs (any of the foregoing, a “Discount”),
then, when any such Discount is based on sales of a bundled set of products in which a Product is included, or otherwise as an
incentive or consideration for a Third Party to buy other products from Aytu, an Affiliate thereof, or any sublicensee, the Discount
shall, for purposes of calculating Net Sales hereunder, be allocated to such Product on a pro rata basis based on the undiscounted
sales value (i.e., the unit average undiscounted selling price multiplied by the unit volume, if available) of the Product relative
to the sales value contributed by the other constituent products in the bundled set.

 

    7 

     

    

 

1.78         “NGDD
Technology” means Acerus’ proprietary Nasal Gel Drug Delivery Technology, a technology, when combined with a
drug compound, active ingredient, drug substance or active pharmaceutical ingredient, which results in a proprietary
bioadhesive drug/gel combination or drug product designed to adhere to the interior lateral wall of the nasal cavity.

 

1.79         “Non-Binding
Commitment” has the meaning set forth in Section 5.1(b)(i).

 

1.80         “Non-Defending
Party” has the meaning set forth in Section 13.3..

 

1.81         “Non-Platform
Improvement” has the meaning set forth in Section 9.2.

 

1.82         “OTC
Version” shall mean any version of Product for use in the Field that has been approved by the FDA for sale to
customers or patients in the Territory without a prescription.

 

1.83         “Packaging
Specifications” means the packaging and labeling specifications for Product, attached hereto as Schedule 1.83, as
such specifications may be amended from time to time by mutual agreement of the Parties.

 

1.84         “Party” or “Parties”
has the meaning set forth in the Preamble.

 

1.85         “Person” means
any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government
or political subdivision thereof.

 

1.86         “Plant” means
the premises that currently house the Manufacturing operations or such other FDA-approved facility for the purpose of
Manufacturing hereunder.

 

1.87         “Platform
Improvement” has the meaning set forth in Section 9.2.

 

1.88         “PMR
Trial” means any clinical trial or study required to be undertaken with respect to the Product in order to comply with
the terms and conditions of the C PMR.

 

1.89         “PMR
Sponsor Group” has the meaning set forth in Section 3.3.

 

1.90         “Post-Approval
Regulatory Submissions” has the meaning set forth in Section 4.2(a).

 

    8 

     

    

 

1.91         “Primary
Detail” means a Detail during which the Product is the most prominent item presented during the applicable interaction
and activities directly relating to the Product comprises, at a minimum, 66.66% of the time of the Detail.

 

1.92         “Product”
means a drug product for use in men containing testosterone as its sole active pharmaceutical ingredient prepared using nasal gel
drug delivery technology to treat hypogonadism in males, in any formulation and any dosage strength under development by Acerus
and/or Aytu at any time before or during the Term, including NATESTO®, an authorized generic version thereof or ANDA therefor
and any OTC Versions.

 

1.93         “Product
Specifications” means the specifications for Product attached hereto as Schedule 1.93, including process specifications
and analytical methods, as such specifications may be amended from time to time by the mutual agreement of the Parties, including,
without limitation, such amendments as may be required to obtain or maintain Regulatory Approval for Product.

 

1.94         “Purchase
Order” has the meaning given to such term in Section 5.1(b)(i).

 

1.95        [RESERVED]

 

1.96         “Quality
Agreement” means the agreement to be entered into between the Parties no later than the Transition Date (which is assumed
to be July 1, 2016 or earlier) concerning quality assurance, quality control, and validation related to the Manufacture of Product.

 

1.97         “Raw
Materials” means, in relation to Product, the starting materials, Active Ingredient, excipients and packaging materials
used in the Manufacture thereof.

 

1.99         "Raw
Material Specifications” means the specifications relating to the handling, warehousing, and storage of Raw
Materials attached hereto as Schedule 1.99 as such specifications may be amended from time to time by mutual agreement of the
Parties.

 

1.100       “Receiving
Party” has the meaning set forth in Section 10.1.

 

1.101       “Regulatory
Approval” means, for Product, all permissions, approvals, licenses, registrations, authorizations, or clearances of
any Regulatory Authority related to NDA #205488 that are necessary for the sale of such Product in any country in the
Territory.

 

1.102       “Regulatory
Authority” means the FDA and the authority(ies) that have responsibility for granting any FDA approval for the
Manufacture, use and sale of Product in the Territory.

 

1.103       “Regulatory
Requirements” means (a) all specifications, methods of Manufacture, and other information in NDA #205488 and
thereafter related in any way to Product, and (b) all laws, rules, regulations, applicable regulatory guidance documents, and
other requirements of any Regulatory Authority that govern Product, including its Manufacture, including but not limited to
the requirements set forth in the FD&C Act, the quality system regulation (“QSR”) rules set forth in
21 Code of Federal Regulation (“C.F.R.”) Part 820, and the current good manufacturing practices
regulations set forth in 21 C.F.R. Section 210 et seq. and 21 C.F.R. Sections 600-610 and the World Health
Organization’s cGMP Guidelines (collectively, “cGMP”), and in each case, the foreign equivalents
thereof, as any of the foregoing may be amended from time to time.

 

    9 

     

    

 

1.104       “Regulatory
Submissions” means all applications, filings, dossiers and the like submitted to the FDA and associated with NDA
#205488 (except for the existing IND associated with the BID Trial as at the date hereof).

 

1.105       “Renewal
Term” has the meaning set forth in Section 14.1.

 

1.106       “Representative”
means a sales representative employed by Aytu or subcontractor thereof to Detail the Product in accordance with the terms and conditions
thereof.

 

1.107       “Requesting
Party” has the meaning set forth in Section 7.8(b).

 

1.108       “sNDA” means
a Supplemental New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the
FDA.

 

1.109       “Safety
Agreement” has the meaning set forth in Section 4.3(c).

 

1.110       “Specification” means
each of the following as they relate to the Active Ingredient, Raw Materials and/or Product, as appropriate:

 

(a)          the
Product Specifications,

 

(b)          the
Raw Material Specifications,

 

(c)          the
Packaging Specifications or

 

(d)          the
Active Ingredient Specifications,

 

each as set forth in
the schedules hereto and as may be amended, restated or otherwise modified from time to time by the Parties.

 

1.111       “Subcontractors” has
the meaning set forth in Section8.4.

 

1.112       “Supply
Price” has the meaning set forth in Section 7.3(a).

 

1.113       “Term” has
the meaning set forth in Section 14.1.

 

1.114       “Territory” means
the U.S.

 

1.115       “Third
Party” means any Person other than Acerus, Aytu and their respective Affiliates.

 

1.116       “Threshold
1 Arbitrator” has the meaning set forth in Section 15.11(e)(i).

 

    10 

     

    

 

1.117       “Transition
Date” has the meaning set forth in the Preamble.

 

1.118       “Unit”
means a unit of Product comprised of one multi-dose dispenser filled with drug product in accordance with the Product Specifications.

 

1.119       “U.S.” means
the United States of America and all territories thereof.

 

1.120       “Withholding
Taxes” has the meaning set forth in Section 7.5.

 

ARTICLE
2

 

GOVERNANCE

 

2.1           Joint
Commercialization Committee. The Parties’ development of Product (if any) and Aytu’s commercialization of the
Product in the Territory under this Agreement shall be overseen by a Joint Commercialization Committee (the “JCC”)
with responsibilities as described in this Article 2.

 

(a)          Membership.
The JCC shall be composed of six (6) members, three (3) members appointed by each Party, including at least one commercial executive
or his or her designee from each Party authorized to make decisions with respect to matters including, but not limited to, development
and commercialization of the Product. Promptly following the Effective Date, each Party shall appoint its initial representatives
to the JCC. Each Party may replace its JCC representatives at any time upon written notice to the other Party. Aytu will designate
one of its representatives as the Chairperson of the JCC. The Chairperson shall be responsible for scheduling meetings, preparing
and circulating an agenda in advance of each meeting (provided that either Party may request to include a specific item on any
such agenda), preparing and issuing minutes of each meeting within thirty (30) days thereafter, revising such minutes to reflect
timely comments thereon, and overseeing the ratification of such revised minutes.

 

(b)          Meetings.
Prior to and during the first twenty-four (24) months following the Transition Date, the JCC shall meet a minimum of four (4) times
per year, and thereafter the JCC shall meet a minimum of two (2) times per year. The Parties shall endeavor to schedule meetings
of the JCC at least two (2) months in advance. Meetings of the JCC shall be held alternately at the headquarters of each of the
Parties or at such location as may be mutually agreed by the Parties. Either Party may invite subject matter experts or other relevant
personnel to attend any meeting of the JCC.

 

(c)          Responsibilities.
The JCC shall:

 

(i)          Coordinate
and monitor the planning and implementation of the commercialization of the Product, such monitoring and review to include a comprehensive
review of the detailing efforts completed for the Product (Aytu to provide such information prior to the applicable JCC meeting);

 

(ii)         Review
and approve the marketing plan for the Product on an annual basis (such marketing plan to be prepared and submitted to the JCC
by Aytu sufficiently advance of the applicable JCC to permit review by Acerus), such marketing plan to include relevant details
relating to the proposed commercialization strategy and tactics for the coming year, including, without limitation, proposed targeting
methodology and lists, resourcing, Representative incentive compensation proposals, call plans and key marketing messages for the
Product;

 

    11 

     

    

 

(iii)        Review
results and progress of any BID Trial, PMR Trial or any other clinical trial undertaken in connection with the Product and discuss
and prepare proposed amendments or modifications when such changes appear to be advisable to achieve the Parties’ Product
development goals with respect to such matters;

 

(iv)        Facilitate
the exchange of regulatory documents and other regulatory information between the Parties pursuant to ARTICLE 4;

 

(v)         Discuss
the state of the markets for Product in the Territory and opportunities and issues concerning the commercialization of Product,
including consideration of marketing and promotional strategy, marketing research plans, labeling, Product positioning and Product
profile issues;

 

(vi)        Coordinate
and monitor post-Regulatory Approval activities;

 

(vii)       Have
authority to establish one or more other committees that report to the JCC and assist the JCC. Any committees formed beyond the
JCC shall be subordinate to the JCC, shall have such membership and responsibilities as the JCC shall determine (provided that
at least one representative from each Party shall be included on any such committee), and may be disbanded by the JCC at any time;

 

(viii)      Resolve,
or attempt to resolve any disputes not resolved by any subordinate committee created by the JCC; and

 

(ix)         Perform
such other functions as appropriate to further the purposes of this Agreement and as allocated to it in writing by the Parties.

 

2.2           Decision
Making; Authority. The JCC shall make its decisions by consensus, with each Party’s representatives collectively having
one vote. If the JCC is unable to reach consensus regarding a matter before it, the issue shall be presented by the JCC to the
Parties’ Applicable Senior Officers for resolution. Once an issue has been presented to the Applicable Senior Officers,
they shall have fifteen (15) days to make a final determination regarding the issue in dispute. In the event that the Applicable
Senior Officers are unable to reach a final determination within such fifteen (15) day period, then Acerus shall have the final
decision making authority over (i) the management of and payment for clinical development activities associated with the Cardiovascular
PMR and PMR Trial (including relating to any agreements relating thereto to be entered into by Aytu with the PMR Sponsor Group
or any members thereof), and (ii) decisions relating to the manufacture of Product which do not affect or change in any way the
Specification, the Product NDA, or any other Regulatory Submission, (provided that Acerus shall have the ability to make specification
changes necessary for the approval of a any modified or changed dispenser used for the Product, subject to Aytu’s written
consent, such consent not to be unreasonably withheld, delayed or conditioned, it being understood that the economic value of
such specification changes to Aytu apart from considerations of compliance with applicable law, regulations, or regulatory guidance
with respect to safety and efficacy required for approval shall not be taken into account when determining the reasonableness
of Aytu in this regard; provided, however, that Acerus shall use all commercially reasonable efforts to cooperate with Aytu to
minimize any adverse economic consequences (such as Product returns) that may arise as a result of the implementation of any such
modified or changed dispenser for the Product, and Aytu shall have authority to make the final decision with respect to all other
issues relating to regulatory and commercialization.

 

    12 

     

    

 

2.3           General
Principles.

 

(a)          The
JCC and its subordinate committees have no authority beyond the specific responsibilities set forth in this Agreement with respect
thereto. Any subordinate committee created by the JCC shall have such duties and responsibilities delegated to such committee by
the JCC, as applicable, so long as such duties and responsibilities do not exceed the power and authority assigned to the JCC hereunder.
In particular, and without limiting the generality of the foregoing, neither the JCC nor any subordinate committee thereof may
amend or modify the terms or provisions of this Agreement.

 

(b)          Each
Party shall ensure that its representatives to the JCC or any subcommittee thereof to have appropriate expertise and authority
to serve as members of such committee. With the consent of the representatives of each Party serving on a particular committee,
other representatives of each Party may attend meetings of that committee as observers. A meeting of the JCC or a subordinate committee
thereof may be held by audio or video teleconference with the consent of each Party. Meetings of a committee shall be effective
only if at least one representative of each Party is present or participating. Each Party shall be responsible for all of its own
expenses of participating in committee meetings. Each Party shall use good faith and cooperative efforts to facilitate and assist
the efforts of the committees.

 

(c)          Each
committee shall continue to exist until the Parties mutually agreeing to dissolve it, and upon dissolution, the Parties shall discuss
the assignment and assumption of the powers and duties of such committee.

 

(d)          The
Parties may form any other committees as they shall mutually agree.

 

ARTICLE
3

 

Post
marketing trials and obligations

 

3.1           Overview
of Development. The Parties shall undertake any further development of Product and conduct and cooperate with respect to any
clinical trials or studies (including, for greater certainty, any BID Trial or PMR Trial) in a collaborative and efficient manner
in accordance with this Article 3.

 

    13 

     

    

 

3.2           
BID Trial. 

 

At its sole and complete
discretion, Aytu may elect to, at its cost, conduct and complete a BID Trial (and submit the applicable Regulatory Submission to
the applicable Regulatory Authorities) with respect to the Product with a view to obtaining an approved dosing protocol providing
for twice-daily (“BID”) usage of the Product. Any such BID Trial (and associated Regulatory Submission) shall be completed
at Aytu’s expense, provided that such trial shall be required to be conducted in accordance with the draft protocol developed
therefor by Acerus (subject to such changes as Acerus may make in its discretion, acting reasonably), and Acerus shall be engaged
and retained to manage and coordinate any such trial, including oversight of any Third Parties required to be engaged by Aytu in
connection with the conduct of such trial. Acerus shall not be entitled to any compensation or reimbursement in connection with
any such BID Trial (except for any direct third party pass-through costs invoiced and actually paid by Acerus in connection with
its management and coordination pursuant to this Section 3.2, which are preapproved by Aytu in writing).

 

3.3           PMR
Trial

 

(a)          As
holder of the NDA for the Product following the Transition Date, Aytu acknowledges and agrees that the terms and conditions of
the Cardiovascular PMR shall apply to it with respect to the Product, and Aytu agrees to undertake all necessary steps to comply
with the terms and conditions of the Cardiovascular PMR, including cooperation and coordination with the other Third Parties subject
to the Cardiovascular PMR (such Third Parties, the “PMR Sponsor Group”) in connection with the conduct and funding
of any PMR Trial approved by the FDA (including, for greater certainty, entering into any agreement with the PMR Sponsor Group
with respect to the conduct of any PMR Trial); provided, however, that Aytu shall not, without the consent of Acerus (not
to be unreasonably withheld) be permitted to consent, compromise or agree to any matter with the FDA or the PMR Sponsor Group to
the extent any such consent, compromise or agreement may increase the amount for which Acerus shall be responsible for in connection
with the Cardiovascular PMR or PMR Trial in accordance with this Section 3.3. Aytu agrees to use all commercially reasonable efforts
to ensure that Acerus is permitted to directly participate in any meetings or communications between Aytu, on the one hand, and
the PMR Sponsor Group or the FDA, on the other hand, such that Acerus is permitted to provide its input in connection with the
design, implementation or financial responsibilities associated with any PMR Trial or other obligations arising under the Cardiovascular
PMR, and Aytu shall not conduct or consent to the conduct of any PMR Trial relating to the Product without the consent of Acerus,
not to be unreasonably withheld.

 

(b)          Upon
presentation of evidence detailing the amounts paid by Aytu to the PMR Sponsor Group or to any Third Party engaged to perform the
PMR Trial in connection with the conduct of a PMR Trial for the Product, Acerus shall reimburse Aytu for any such amounts actually
paid by Aytu or Aytu has the right to offset any such payment against Aytu’s future payment obligations under this Agreement
as described below. In the event that Acerus fails to pay any undisputed amount owing under this Section 3.3(b), Aytu shall be
entitled to set off any such amount (together with interest accruing at a rate equal to LIBOR (as published in The Wall Street
Journal, New York edition) plus two percent (2%)) against any amounts owing (or that become owing in the future) by Aytu to Acerus
under this Agreement (except for any Delivery Deposit associated with any delivery of Product either before or after the applicable
non-payment by Acerus, which shall remain payable in all circumstances notwithstanding any amounts owing by Acerus to Aytu pursuant
to this Section 3.4)).

 

    14 

     

    

 

ARTICLE
4

 

REGULATORY
MATTERS

 

4.1           Transfer
of the Product NDA and Related FDA Regulatory Submissions.

 

(a)          Promptly
after the Transition Date, the Parties shall submit (or cause the necessary Third Party to submit) to the FDA executed letters
in the form set forth in Schedule 4.1(a) in order to transfer legal and record ownership of the FDA Regulatory Submissions for
the Product, including any INDs (other than the IND existing as at the date hereof for the BID Trial), the Product NDA and all
supplemental submissions to Aytu. Aytu shall not transfer any such Regulatory Submissions for the Product, including any INDs and
the Product NDA, to any other Person, without the express written consent of Acerus, except in connection with any permitted assignment
of this Agreement in accordance with Section 15.3.

 

(b)          Pursuant
to CFR Article 5, Section 314.72, Change in Ownership of an Application, the Parties shall fulfill the following requirements:

 

(i)          Acerus
shall submit a letter or other document that states that all rights to the application have been transferred to Aytu;

 

(ii)         Aytu
shall submit an application form and a letter containing the following:

 

(1)         Aytu’s
commitment to agreements, promises, and conditions made by Acerus of which it has been informed and which in contained in NDA #205488;

 

(2)         The
date that the change in ownership is effective; and

 

(3)         Either
a statement that Aytu has a complete copy of the approved NDA, including supplements and records that are required to be kept under
314.81, or a request for a copy of the application from FDA’s files. In the event Aytu is required to make such a request
from the FDA, Acerus shall be responsible for all related user fees under 20.45 of FDA’s public information regulations.

 

(A)         Aytu
shall advise FDA about any change in the conditions in NDA #205488 under 314.70, except Aytu may advise FDA in the next annual
report about a change in the Product’s label or labeling to change the Product’s brand or the name of its manufacturer,
packer, or distributor.

 

(c)          Not
later than five (5) Business Days after the Transition Date, Acerus shall transfer to Aytu (and cause any Third Party in possession
thereof to transfer to Aytu) all other Regulatory Submissions for the Product in the Territory, and upon such transfer, Aytu shall
be the legal and beneficial owner of such Pre-Approval Regulatory Submissions. Effective upon such transfer, Aytu shall, subject
to the terms and conditions of this Agreement, have primary responsibility for dealings with the applicable Regulatory Authority
with respect to the Product.

 

    15 

     

    

 

(d)          Acerus
shall have a right of reference to all Regulatory Submissions for the Product made prior to the Effective Date or by or on behalf
of Aytu or any sublicensee or Affiliate thereof in the Territory in connection with Acerus’ Regulatory Submissions for Product
outside the Territory.

 

4.2           Post-Approval
Regulatory Submissions.

 

(a)          As
between the Parties, subject to the terms and conditions of this Agreement, Aytu shall have sole responsibility, at its own expense,
for preparing, filing and maintaining all Regulatory Submissions for Product in the Territory after the date on which the Regulatory
Submissions are transferred to Aytu pursuant to Section 4.1 collectively, “Post-Approval Regulatory Submissions”).
Aytu shall use Commercially Reasonable Efforts to compile, submit and prosecute all Post-Approval Regulatory Submissions, in a
format acceptable to the applicable Regulatory Authorities in the Territory. All Post-Approval Regulatory Submissions for Product
in the Territory shall be filed in the name of Aytu. Aytu shall be responsible for all communications and other dealings with the
Regulatory Authorities relating to the Post-Approval Regulatory Submissions and Aytu shall be the legal and beneficial owner of
all Post-Approval Regulatory Submissions; provided, however, that no Post-Approval Regulatory Submission relating to the BID Trial,
Cardiovascular PMR or any PMR Trial may be submitted by Aytu without the consent of Acerus.

 

(b)          Aytu
shall promptly notify Acerus of all Post-Approval Regulatory Submissions that it submits, and shall promptly provide Acerus with
a copy (which may be wholly or partly in electronic form) of such Post-Approval Regulatory Submissions. Aytu also shall promptly
furnish Acerus with summaries of all material correspondence or material meetings with any Regulatory Authority relating to the
Post-Approval Regulatory Submissions, and Aytu shall promptly furnish Acerus with copies of such correspondence or copies of minutes
of such meetings.

 

4.3           Adverse
Event Reporting.

 

(a)          
Acerus shall submit copies of reports of adverse events to Aytu simultaneously with submission to the applicable Regulatory Authorities,
and, following, transfer of Product Regulatory Submissions to Aytu pursuant to Section 4.1(c), Aytu shall submit copies of adverse
events to Acerus simultaneously with submission to the applicable Regulatory Authorities in the Territory. Aytu shall be responsible
for complying with all Regulatory Requirements and other legal requirements governing adverse events in the Territory that occur
after the Transition Date. Each Party shall notify the other in a timely manner and in any event within twenty-four (24) hours
of receiving any notice from a Regulatory Authority, independent review committee, data safety monitoring board or another similar
clinical trial or post-marketing monitoring body alleging concern regarding a patient safety issue or other material information
relevant to the safety or efficacy of Product.

 

(b)          Acerus
shall be responsible for establishing and maintaining a global safety database for the Product. Not later than the Transition Date,
the JCC (or a subordinate committee thereof) shall meet and establish procedures and guidelines for the operation of such database
that are reasonably acceptable to Aytu, and the Parties agrees that it will abide by such procedures and guidelines.

 

    16 

     

    

 

(c)          As
promptly as practicable following the Effective Date, but in no event later than the Transition Date, Aytu and Acerus will develop
and agree upon safety data exchange procedures in a separate and detailed safety agreement (the “Safety Agreement”).
Such agreement will describe the coordination of collection, investigation, reporting, and exchange of information concerning adverse
events or any other safety problem of any significance, and product quality and product complaints involving adverse events, sufficient
to permit each Party, its Affiliates, licensees or sublicensees to comply with its legal obligations. The safety data exchange
procedures will be promptly updated if required by changes in legal requirements. In the event of any conflict or inconsistency
between this Agreement and the Safety Agreement with respect to: (i) safety-related matters, the Safety Agreement shall prevail;
and (ii) any other matter, this Agreement shall prevail.

 

4.4           Regulatory
Correspondence.

 

(a)          Notification
to Other Parties of Regulatory Correspondence. Each Party shall promptly (and in any event, within two (2) Business Days of the
date of receipt of notice) notify the other Party in writing of, and shall provide the other Party with copies of, any correspondence
and other documentation received or prepared by such Party in connection with any of the following events: (i) receipt of a material
regulatory letter, warning letter, Form 483, or similar item, from any Regulatory Authority directed to the Manufacture, packaging,
and/or storage of Product, any Acerus facility or any contract Manufacturing facility associated with Acerus’ supply of Product
hereunder; (ii) any recall or correction of any Batch of Product; and (iii) any regulatory comments relating to Product requiring
a response or action by a Party.

 

(b)          Regulatory
Correspondence Requiring an Acerus Response. In the event that Acerus receives any material regulatory letter or comments from
any Regulatory Authority directed to its development or Manufacture of Product requiring a response or action by Acerus, including,
but not limited to, receipt of a Form 483 or a warning letter, Aytu (as applicable) will promptly provide Acerus with any data
or information in Aytu’s possession that is required by Acerus in preparing any response relating to Acerus’ development
or Manufacture of such Product, and will cooperate with Acerus’ reasonable requests related to Acerus preparing such response.
To the extent reasonably practicable (subject to the time a response is mandated), Acerus shall provide Aytu with a copy of each
such response for Aytu’s review and comment at least two (2) Business Days prior to Acerus’ submission of the response.
Acerus shall give good faith consideration to any Aytu comments to each such proposed Acerus response and shall incorporate such
comments to the extent Acerus deems necessary or appropriate. Acerus shall have the final decision with respect to any responses
or actions required by such letter or comments which relate to clinical development of Product prior to transfer of Regulatory
Submissions to Aytu pursuant to Section 4.1(c), Manufacturing of Product and those matters relating to the BID Trial, Cardiovascular
PMR and PMR Trial pursuant to Section 3.3, and Aytu shall otherwise have the final decision with respect to any responses or actions
required by such letter or comments following transfer of Regulatory Submissions to Aytu pursuant to Section4.1, including as may
relate to the commercialization or regulatory aspects of Product.

 

    17 

     

    

 

(c)          Regulatory
Correspondence Requiring an Aytu Response. In the event that Aytu receives any material regulatory letter or comments from any
Regulatory Authority relating to the development or Manufacture of Product, Acerus (as applicable) will promptly provide Aytu with
any data or information required by Aytu in preparing any response relating to Acerus’ development or Manufacture of Product,
and will cooperate fully with Aytu in preparing such response. To the extent reasonably practicable (subject to the time a response
is mandated), Aytu shall provide Acerus with a copy of each such response for Acerus’ review and comment at least two (2)
Business Days prior to Aytu’s submission of the response. Aytu shall give good faith consideration to any Acerus comments
to each such proposed Aytu response and shall incorporate such comments to the extent Aytu deems necessary or appropriate. Acerus
shall have the final decision with respect to any responses or actions required by such letter or comments which relate to Manufacturing
of Product and those matters relating to the BID Trial, Cardiovascular PMR and PMR Trial pursuant to Section 3.3, and Aytu shall
otherwise have the final decision with respect to any responses or actions required by such letter or comments, including as may
relate to Post-Approval Development Activities or the commercialization or regulatory aspects of Product.

 

4.5           Inspections.
In the event that any Acerus facility or contract Manufacturing facility will be inspected by representatives of any Regulatory
Authority directed to Acerus’ Manufacture of Product or Clinical Trial Material, Acerus shall notify Aytu promptly after
learning of such inspection, and shall supply Aytu with copies of any correspondence or portions of correspondence which relate
to Product. Following any such inspection, Acerus shall provide Aytu with a written summary of that portion of the inspection
that was relevant to Product or Clinical Trial Material within seven (7) Business Days of such inspection. To the extent any remedial
action is required following any such inspection, Acerus shall provide Aytu with a remediation plan not later than ten (10) Business
Days following notification by a Regulatory Authority of the need for remedial action, and Aytu shall have a right to provide
written comments on such remediation plan not later than ten (10) Business Days after receipt thereof from Acerus, and Acerus
shall consider in good faith any such written comments and use reasonable efforts to incorporate them into its remediation plan.

 

4.6           Product
Recalls and Withdrawals. In the event that a Party becomes aware that Product may not comply with applicable law, rules or
regulations (either by notification from a Regulatory Authority or otherwise) and/or that a recall or withdrawal of Product may
be desirable, such Party shall promptly notify the other Party. If Acerus is the Party that first becomes aware of the necessity/desirability
of Product recall or withdrawal, Acerus shall provide Aytu with the notice described above and upon receipt of such notification
(or in the event that Aytu is the first Party to become aware of the necessity/desirability of Product recall or withdrawal),
Aytu shall undertake an appropriate investigation and make a determination with respect to the disposition of any such matter,
including determining whether Product shall be recalled or withdrawn. If Aytu determines that Product shall be recalled, Aytu
shall develop and implement a plan to conduct such recall. The Party that is predominantly responsible for the applicable Product’s
non-compliance with applicable rules and regulations shall bear all third party costs and expenses actually incurred and associated
with conducting such recall in accordance with such recall plan, unless such recall results predominantly from the other Party’s
material breach of its obligations under this Agreement or unless such recall otherwise predominantly results from the gross negligence
or wrongful intentional acts or omissions of the other Party, in which case the other Party shall bear all third party costs and
expenses actually incurred and associated with such recall. If neither Party is predominantly responsible or responsibility cannot
be ascertained as to the cause of the applicable non-compliance, the Parties shall share equally the third party costs and expenses
of such recall. In all cases, each Party shall use Commercially Reasonable Efforts to implement any recall of Product.

 

    18 

     

    

 

ARTICLE
5

 

MANUFACTURE
AND SUPPLY OF PRODUCT 

 

5.1           Supply
and Purchase of Product.

 

(a)          Manufacture
and Supply of Product and Raw Materials.

 

(i)          Acerus
shall be responsible for the production, manufacture, testing, packaging and all related activities, including, without limitation,
warehousing and storage of the Product prior to delivery to Aytu in accordance with Section 5.1(c) below and supplying final packaged
materials (collectively, the “Manufacture”), of and with respect to Clinical Trial Materials and Product in
accordance with this Section 5, and carrying out quality assurance in accordance with the Quality Agreement. Subject to Section
5.2, during the Term, Aytu, its Affiliates and sublicensees shall purchase all of its requirements of Product from Acerus. Clinical
Trial Materials, placebo dispensers and Product shall be supplied in accordance with the following provisions. In consideration
for Acerus’ supply of Product, Aytu will pay Acerus the Supply Price and other consideration payable under this Agreement.

 

(1)         Subject
to the provisions of this Article 5, Acerus shall Manufacture Clinical Trial Materials and Product in accordance with the quantity
requirements of Aytu, its Affiliates, licensees and sublicensees, and shall not Manufacture, supply or sell Clinical Trial Materials
or Product for or to any Third Party for use in the Territory.

 

(2)         All
Clinical Trial Materials and Product shall be Manufactured by Acerus at the Plant in accordance with the terms of this Agreement,
the Regulatory Approval, Regulatory Requirements, all other applicable laws and regulations, the Product Specifications, cGMP and
the Quality Agreement using Acerus Intellectual Property and, where appropriate, in accordance with and using Aytu Intellectual
Property.

 

(3)         Acerus
shall have additional responsibilities for Clinical Trial Materials and Product as set forth in the Quality Agreement. In the event
of any conflict or inconsistency between this Agreement and the Quality Agreement this Agreement shall prevail. Acerus shall have
sole responsibility for disposing of all wastes arising from Manufacture in accordance with all applicable laws, rules and Regulatory
Requirements.

 

(4)         Acerus
shall supply Aytu with reasonable quantities of placebo dispensers as requested by Aytu in writing from time to time, and shall
provide such placebo dispensers in finished form. Placebo dispensers shall be supplied within ninety (90) days after any such request
(provided, however, that any such request shall be made in even multiples of the standard batch size for such items set out in
Schedule 1.28 and provided further that placebo dispensers shall be included in the Master Production Plans submitted by Aytu in
accordance with Section 5.1(b)) and at a cost equal to 100% Acerus’ out of pocket third-party expenses applicable at the
date of delivery of such items (to be paid in full within forty-five (45) days of the applicable delivery in accordance with Section
5.1(c)(ii)).

 

    19 

     

    

 

(5)         Acerus
will supply the Clinical Trial Materials and Product in finished form, labeled and packaged in bulk containers. Acerus shall be
responsible for purchasing all raw materials from sources pre-approved in writing by Aytu and Acerus shall only use such pre-approved
raw materials for the manufacture of the Products. Acerus shall not directly or indirectly develop, manufacture, bulk package,
label, test, market or sell the Product to any party in the Territory other than Aytu.

 

(b)          Forecasts;
Orders.

 

(i)          On
or before the last working day of each calendar month during the Term, Aytu shall furnish to Acerus a written twenty-four (24)
month forecast of the quantities of Product (including Clinical Trial Materials) and placebo dispensers that Aytu intends to order
from Acerus during such period (the “Master Production Plan”). The first three months of each Master Production
Plan shall, subject to Section 5.1(b)(iii), be deemed to be a binding, non-cancellable purchase order and shall be accompanied
by any other information required under Section 5.1(c) (the “Purchase Order”). The following twenty-one (21)
months of the Master Production Plan shall be Aytu’s non-binding, good faith estimate of such requirements based on forecasted
demand (“Non-Binding Commitment”). Schedule 5.1(b)(i)-A sets out the maximum annualized and quarterly volumes
of Product able to be manufactured by Acerus as at the date hereof (such maximum volumes to be reviewed on an annual basis by Acerus
and Aytu and increased (but for avoidance of doubt, without the consent of Aytu, not decreased) as may be warranted by market conditions
and reasonably practicable from time to time) (the “Maximum Capacity”).

 

(ii)         Each
Master Production Plan and included binding Purchase Order shall be deemed to be automatically accepted, and shall be binding on
Acerus and Acerus will be required to supply the Product and Clinical Trial Materials set forth in a Purchase Order, unless the
Purchase Order terms violate the requirements set forth in this Section 5. In the event of any conflict or inconsistency between
this Agreement and any Purchase Order, this Agreement shall prevail.

 

(iii)        Should:
(A) any new Purchase Order include volume of Product in a given month that exceeds one hundred fifty percent (150%) of amount set
forth in the most recent Non-Binding Commitment provided by Aytu to Acerus pursuant to Section 5.1(b)(i) in respect of such month,
(B) any Purchase Order include volume of Product that, when added with volumes included in the twelve (12) month period or three
(3) month period, as applicable, prior to the date of the applicable Purchase Order, is in excess of the Maximum Capacity for such
period, or (C) Aytu desires to increase the amount of Product to be Manufactured pursuant to any already submitted Purchase Order,
then Acerus shall use Commercially Reasonable efforts to comply with such requested changes.

 

    20 

     

    

 

(c)          Purchase
of Product; Deliveries.

 

(i)          Except
to the extent the Parties may otherwise agree with respect to a particular shipment, unless the Parties otherwise agree in writing,
all orders for Product placed hereunder shall be submitted to Acerus according to the procedures described in Section 5.1 of this
Agreement. Each Purchase Order for Product shall specify: (A) the type of Product being ordered (i.e., whether the Product
is intended for trade, samples or Clinical Trial Materials); (B) the amount of such Product being requested (which shall be
in accordance with this Section 5.1 and be in even multiples of the Standard Batch Size unless otherwise agreed by Acerus); (C) the
requested Delivery Dates, such Delivery Date to be not less than ninety (90) days following submission of the Purchase Order to
Acerus in accordance with Section 5.1(b)(ii); and (D) the aggregate Delivery Deposit payable in connection with the ordered Product
(calculated in accordance with Section 7.3). Acerus shall supply Product in such quantities on the Delivery Dates set forth in
the Purchase Order.

 

(1)         Acerus
shall furnish to Aytu with each shipment of Product ordered by Aytu hereunder, (i) a certificate of analysis reflecting that such
Product and any Raw Materials used conform to the relevant Specifications and (ii) all documentation required by law, Regulatory
Requirements or any Regulatory Authority having jurisdiction over such shipment to be provided by a manufacturer of the Product.

 

(2)         Aytu
shall not be required to take receipt of a Batch of Product with less than twenty four (24) months of remaining shelf life, provided
that Aytu and Acerus may nonetheless negotiate in good faith for Aytu to purchase any Batch not meeting the foregoing remaining
shelf-life requirement.

 

(ii)         Property
in, title to, and risk of loss of or damage to, all Raw Materials and Product shall remain with Acerus and pass to Aytu only upon
delivery to Aytu on an EXW-Plant (Incoterms 2010) basis. Acerus shall provide all reasonably requested documentation in connection
with any shipment of Product, and Aytu shall provide Acerus with copies of any shipping-related documentation required by Acerus
in order to comply with applicable laws or regulations.

 

(iii)        In
the event that Product shall fail to strictly conform with the Specifications, Aytu shall reject such Product by giving written
notice to Acerus within (1) thirty (30) days after receipt by Aytu (in the case of patent defects) or (2) twenty five (25) days
from the date when Aytu learned of such defects (in the case of latent defects) in such Product. Any notice given hereunder shall
specify the manner in which Product fails to conform to the Purchase Order or fails to meet the Specifications.

 

(iv)        Aytu
acknowledges and agrees that Acerus shall be entitled to deliver a quantity of Product that is not more than 10% less or greater
than the amount set out in any accepted Purchase Order, and that such delivery shall not entitle Aytu to reject the applicable
Product despite the failure of the delivered quantity to strictly conform to the amount set out in the applicable Purchase Order.

 

    21 

     

    

 

(1)         If
it is determined by agreement of the Parties (or in the absence of agreement of the Parties, by a mutually acceptable independent
laboratory or consultant whose fees shall be paid by the non-prevailing Party) that the non-conformity is due to damage to Product
(i) caused by Aytu or its agents or (ii) which occurs subsequent to delivery of such Product to Aytu in accordance with Section
5.1(c)(ii), Acerus shall have no liability to Aytu with respect thereto. If the non-conformity is caused by any other reason than
those set forth in the immediately preceding sentence, Aytu shall be entitled to reduce the amount of any Supply Price or other
amounts due by an amount equal to the price for such non-conforming Product. If payment for non-conforming Product has previously
been made by Aytu, at Aytu’s option, (i) Acerus shall pay Aytu the amount of such credit, (ii) Aytu may offset the amount
thereof against other amounts then due to Acerus hereunder or (iii) Acerus shall replace such non-conforming Product with conforming
Product at no additional cost or expense to Aytu.

 

(2)         In
any case where Aytu rejects non-conforming Product, Aytu shall await written instructions from Acerus as to further disposition
of the non-conforming Product. If Acerus does not provide such instructions within ninety (90) days of receipt of Aytu’s
rejection notice, Aytu shall dispose of Product and invoice Acerus for the costs of disposal. In any event, Aytu may retain samples
of non-conforming Product for the purpose of determining any dispute.

 

(3)         The
rights, remedies and obligations set forth in this Section 5.1(c) shall be the sole rights, remedies and obligations that either
Party may otherwise have with respect to non-conforming Product.

 

(d)          Capacity.
Subject to the terms and conditions of this Agreement, and in particular Section 5.1(b)(iii), Acerus shall ensure that Aytu’s
Product requirements are met. In the event that Acerus becomes aware at any time of any matter, circumstance or event which might
reasonably be expected to give rise to an inability to supply Product based on Aytu’s most recent forecasts (including that
the quality standards set forth herein and in the Quality Agreement have been materially compromised such that Acerus may not be
able to supply Product Manufactured to the Product Specifications and/or comply with Regulatory Requirements), Acerus shall give
prompt written notice of such matter, circumstance or event to Aytu, including without limitation, the cause thereof, the anticipated
length of such delay or shortfall and the action to be taken to reduce, minimize or remove the adverse effects of any such delay.
Within fifteen (15) days after receipt of such a notice from Acerus, Aytu and Acerus shall meet with a view to agreeing to action
as may be necessary to ensure that no interruption of supply or shortfall in quantities of Product occurs. This Section 5.1(d)
is not intended to lessen or alter Acerus’ supply obligations set forth in this Section 5.1.

 

5.2           Notwithstanding
the foregoing Section 5.1, in the event that Acerus determines in its sole discretion that it would like Aytu to assume responsibility
for obtaining supply of Products or Clinical Trial Materials from Acerus’ third-party manufacturer thereof or another supplier,
the Parties shall negotiate in good faith to enter into a new agreement mutually acceptable to the Parties to provide for an Aytu
technology transfer and royalty-bearing license to make and have made Products on economic terms, including a royalty rate that
provides for substantially the same net profit to Acerus as provided by the Supply Price hereunder and milestone payments on substantially
the same terms as those set forth hereunder, in all cases taking into account any changes to the Parties’ relative economic
risks of the new agreement compared to this Agreement.

 

    22 

     

    

 

5.3           
In the event that a Long Term Inability to Supply with respect to the Product has occurred and is continuing, Aytu shall have the
right to purchase Product from one or more alternative Third Party suppliers and require Acerus to transfer to Aytu and such Third
Party supplier all of the technology necessary for such Third Party supplier to carry out its supply obligations. Upon any transfer
contemplated in this Section 5.3, the Parties shall negotiate in good faith to enter into a new agreement mutually acceptable to
the Parties to provide for a royalty-bearing license including a royalty rate that provides for substantially the same net profit
to Acerus as provided by the Supply Price hereunder and milestone payments on substantially the same terms as those set forth hereunder,
in all cases taking into account any changes to the Parties’ relative economic risks of the new agreement compared to this
Agreement

 

ARTICLE
6

 

COMMERCIALIZATION

 

6.1           Commercialization.
Subject to the terms and conditions of this Agreement, Aytu shall have sole responsibility and decision-making authority for commercialization
of Product in the U.S.. Aytu will use Commercially Reasonable Efforts in commercializing the Product. Aytu shall be solely responsible
for all costs and expenses associated with its commercialization of Product in the Territory.

 

6.2           Documentation
Sharing. Aytu shall provide to the JCC copies of the material finalized documents so generated for the Product that relate
to launch and commercialization planning at the same time as they are provided to Aytu management personnel responsible for oversight
of such activities (including, without limitation, the marketing plan referred to in Section 2.1(a)).

 

6.3           Transition
Date Obligations. Aytu shall ensure that it is able to commercialize, distribute and sell Product by the Transition Date.

 

6.4           Detailing.

 

(a)          For
the period commencing on September 30, 2016 and expiring on the second anniversary date of the Transition Date (the “Initial
Detailing Stage”) Aytu shall maintain a sales force of not less than the number of Representatives set out in Schedule
6.4 completing Primary Details of the Product on a Full Time Basis (and not completing any Primary Details for any other product)
for the period.

 

(b)          After
expiry of the two (2) year period referred to in Section 6.4(a), Aytu shall, for each period commencing on each anniversary date
of the Transition Date until the subsequent anniversary date of the Transition Date maintain a sales force of Representatives completing
Primary Details of the Product on a Full Time Basis (and not completing any Primary Details for any other product) of not less
than the number set out in Schedule 6.4.

 

    23 

     

    

 

(c)          On
a semi-annual basis after the Transition Date (i.e. on the date that six (6) months after the Transition Date and each anniversary
date of the Transition Date, and on each anniversary date of the Transition Date), Aytu shall deliver a report to Acerus certifying
that, during the applicable preceding six (6) month period, it has been in compliance with the applicable representative requirements
pursuant to Section 6.4(a) and 6.4(b), as applicable, such report to set out, inter alia, the number of representatives engaged
by or on behalf Aytu on a Full Time basis throughout the applicable period. Notwithstanding the foregoing, the Parties agree that
if in any report delivered pursuant to this Section 6.4(c) in respect of a given semi-annual period, Aytu has not complied with
the applicable representative requirements in Section 6.4(a) and 6.4(b), as applicable, but has maintained at least 90% of the
number of representatives required throughout the six-month period, it will not be in breach of its obligations pursuant to Section
6.4(a) and 6.4(b), as applicable, if, and only if, the next subsequent semi-annual report due pursuant to this Section 6.4(c) demonstrates
that Aytu has been in compliance with the applicable representative requirements pursuant to Section 6.4(a) and 6.4(b), as applicable
for the six month period covered by such subsequent report.

 

(d)          The
Parties agree that any breach of this ARTICLE 6 by Aytu shall constitute a material breach of this Agreement.

 

(e)          Aytu
acknowledges and agrees that Acerus is in discussions with Endo with respect to a transition services agreement (“TSA”)
relating to, inter alia, the treatment of certain reporting and payment obligations associated with the sale and distribution
of the Product by Endo prior to the Transition Date. The Parties agree to negotiate in good faith an arrangement whereby either:
(a) Aytu is directly party to the TSA with Endo and Acerus (or is assigned the rights and obligations of Acerus thereunder); or
(b) Aytu and Acers shall enter into such separate agreements, arrangements or understandings as are necessary to provide for Aytu
performing, on Acerus’ behalf, those responsibilities set out in the TSA with Endo relating to the ongoing commercialization
of the Product including, without limitation, ongoing reporting obligations, obligations with respect to Medicaid and Medicare
Product listing and return processing following the Transition Date (it being understood that Aytu may be required to process and
issue certain payments for any returned goods sold prior to the Transition Date, pending reimbursement by Endo in accordance with
the terms and conditions of the TSA).

 

ARTICLE
7

 

PAYMENTS

 

7.1           Upfront
Payments.

 

(a)          On
each of the following dates, Aytu shall pay Acerus a non-refundable, non-creditable payment of the stated amount:

 

(i)          two
Million Dollars ($2,000,000) on the Effective Date;

 

(ii)         two
Million Dollars ($2,000,000) on September 5, 2016; and

 

(iii)        four
Million Dollars ($4,000,000) on January 1, 2017,

 

    24 

     

    

 

in each case, in consideration of the development
(including clinical trials), regulatory activities and establishment of manufacturing methodologies and capabilities with respect
to the Product undertaken by Acerus prior to the Effective Date.

 

(b)          Aytu
agrees that upon any termination of this Agreement prior to the date on which any of the amounts payable pursuant to Section 7.1(a)(ii)
or 7.1(a)(iii) are owing (except any termination of this Agreement by Aytu: (i) as a result of a material breach by Acerus in accordance
with Section 14.2(c); (ii) pursuant to Section 14.2(d); or (iii) pursuant to Section 14.2(e)), the obligations in Section 7.1(a)(ii)
and 7.1(a)(iii) shall survive and such obligations shall, notwithstanding any such termination, remain payable on the dates set
forth therein.

 

7.2           Milestone
Payments.

 

(a)          Aytu
shall make the following one-time nonrefundable, non-creditable (except as related to any exercise of Aytu’s rights of set-off
pursuant to Section 3.3(b) in connection with any PMR Trial) payments to Acerus within forty-five (45) days after the first achievement
of the corresponding event set forth below for Product (for the purpose of clarity: (i) a payment set forth below, if payable,
will only be paid once, so that the maximum payable by Aytu under all of the milestones would be $37,500,000; and (ii) in the event
that one or more milestone events occur simultaneously, the payments associated with each such milestone event shall be payable):

 

	Milestone Event	 	Payment
	 	 	 
	Net Sales during any four (4) consecutive calendar quarter period  equal or exceed twenty-five million dollars ($25,000,000) in the aggregate	 	two million, five hundred thousand dollars  ($2,500,000) (the “First Milestone”)
	 	 	 
	Net Sales during any four (4) consecutive calendar quarter period equal or exceed fifty million dollars ($50,000,000) in the aggregate	 	five million dollars ($5,000,000)
	 	 	 
	Net Sales during any four (4) consecutive calendar quarter period equal or exceed seventy-five million dollars ($75,000,000) in the aggregate	 	seven million, five hundred thousand dollars  ($7,500,000)
	 	 	 
	Net Sales during any four (4) consecutive calendar quarter period equal or exceed one-hundred million dollars ($100,000,000) in the aggregate	 	ten million dollars ($10,000,000)
	 	 	 
	Net Sales during any four (4) consecutive calendar quarter period equal or exceed one-hundred twenty five million dollars ($125,000,000) in the aggregate	 	twelve million, five hundred thousand dollars  ($12,500,000)

 

    25 

     

    

 

For the avoidance of
doubt, any four (4) consecutive calendar quarter period described in the table above may span over two (2) calendar years.

 

(b)          Aytu
agrees that upon any termination of this Agreement prior to the date on which the First Milestone is otherwise payable pursuant
to Section 7.2(a) (except any termination of this Agreement by Aytu: (i) as a result of a material breach by Acerus in accordance
with Section 14.2(c); (ii) pursuant to Section 14.2(d); or (iii) pursuant to Section 14.2(e))), the First Milestone shall be immediately
payable on the effective date of termination of this Agreement.

 

7.3           Supply
Price of Product.

 

(a)          Supply
Price. The price for Product (except for supply of Clinical Trial Materials and placebo dispensers, which shall be supplied in
accordance with Section 5.1(a)(i)(4)) (the “Supply Price”) to be paid by Aytu shall be the greater of (i) one-hundred
fifteen percent (115%) of Acerus’ COGS for the Product (calculated in United States Dollars using the applicable daily rate
of exchange on the date of the invoice delivered in accordance with Section 7.3(c) upon delivery of applicable Product, as published
in The Wall Street Journal, New York edition), or (ii) the amount calculated below:

 

	Period	 	Applicable Percentage of Net Sales Payable

 as Supply Price	 
	 	 	 	 
	First twelve (12) months following Transition Date	 	10	%
	 	 	 	 
	Subsequent twelve (12) month period	 	16	%
	 	 	 	 
	Remainder of Term	 	25	%

 

(b)          Step
Down. Upon the expiration or invalidation of the last-to-expire (or be invalidated) Acerus Patent, the Supply Price shall be reduced
to an amount equal to the sum of (A) one hundred fifteen percent (115%) of Acerus’ COGS at such time and (B) fifty percent
(50%) of the difference between the Supply Price and one hundred fifteen percent (115%) of Acerus’ COGS at such time; provided
that no reduction of Supply Price pursuant to this Section shall reduce the Supply Price to an amount lower than one-hundred fifteen
percent (115%) of Acerus’ COGS in effect from time to time.

 

    26 

     

    

 

(c)          Payments.

 

(i)          Acerus
shall invoice Aytu for all Product delivered to Aytu in accordance with Section 5.1(c)(ii) an amount equal to one hundred fifteen
percent (115%) of the United States dollar equivalent of Acerus’ COGS for such Product (calculated in United States dollars
using the applicable daily rate of exchange on the date of the invoice delivered in accordance with Section 7.3(c), as published
in The Wall Street Journal, New York edition) (on a per Unit basis, the “Invoiced Amount per Unit”).
Aytu shall pay any undisputed amount of such invoice (but without obligation to pay such amount for any Product delivered that
is rejected in accordance with Section 5.1(c)(iii)) not later than thirty (30) days following Aytu’s receipt of such invoice
(such payment being the “Delivery Deposit”).

 

(ii)         Not
later than twenty-one (21) days following the end of each calendar quarter during the Term, Aytu shall provide Acerus with a report
detailing Aytu’s reasonable estimate as of the date of such report for the Supply Price applicable to the Products supplied
hereunder during the immediately preceding calendar quarter.

 

(iii)        Within
forty five (45) days after the end of each applicable calendar quarter, Aytu shall deliver a report setting out the number of Units
sold during the applicable calendar quarter, the Supply Price payable and the aggregate Delivery Deposits previously paid in respect
of Units sold in the applicable calendar quarter and shall pay to Acerus the Supply Price less the aggregate Delivery Deposits
paid in respect of Units of Product sold in such calendar quarter and any Credit Amount in existence as of such date.

 

(iv)        
If the Supply Price based on Net Sales in a given quarter is less than the aggregate Delivery Deposits paid in respect of Units
of Product sold during such calendar quarter, then no additional amount shall be payable to Acerus in respect of such quarter pursuant
to Section 7.3(c)(iii), and the difference between the aggregate Delivery Deposits paid in respect of Units of Product sold during
such calendar quarter and the Supply price calculation for such quarter (a “Credit Amount”) shall be credited
against any amount otherwise payable to Acerus pursuant to Section 7.3(c)(iii) in respect of future quarters in that Aytu fiscal
year (and not, for greater certainty, in respect of any future quarters in any other calendar year).

 

(v)         Not
later than forty-five (45) days after the end of each fiscalYear beginning with the fiscal year beginning on July 1, 2016 and ending
on June 30, 2017 (so that the first report under this Section 7.3(c)(v)shall occur during the first forty-five (45) days after
June 30, 2017), Acerus shall notify Aytu in a report in reasonable detail of the Acerus’ COGS for the Product during the
preceding calendar year, which United States dollar equivalent to the Acerus’ COGS (calculated in United States Dollars using
the applicable daily rate of exchange on the date of the invoice delivered in respect of the applicable Product in accordance with
Section 7.3(c), as published in The Wall Street Journal, New York edition) shall be applicable to Supply Price determination
for the calendar year in which such notification is made. From the Effective Date until the date of delivery of the first report
to be delivered in accordance with this Section 7.3(c)(v), the Acerus’ COGs for the Product shall be as set out in Schedule
7.3(c)(v).

 

7.4           Payment
Method. All payments due under this Agreement to Acerus shall be made by bank wire transfer in immediately available funds
to an account designated by Acerus. All payments due under this Agreement to Aytu shall be made by bank wire transfer in immediately
available funds to an account designated by Aytu.

 

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7.5           Taxes.
If Aytu determines that it is required by any applicable laws or regulations to withhold any taxes from any payment made pursuant
to this Agreement (“Withholding Taxes”), Aytu will (a) be responsible for such Withholding Taxes up to an amount
equal to not greater than five per cent (5%) of the applicable payment amount to be made (the “Aytu Share”);
(b) withhold from Acerus only such Withholding Taxes in excess of the Aytu Share, (c) pay all applicable Withholding Taxes to
the proper taxing authority, (d) pay to Acerus the remittable payment, reduced only by the Aytu Share and (e) send evidence of
the Withholding Taxes obligation together with proof of the Withholding Taxes payment to Acerus within thirty (30) days following
a Withholding Taxes payment.

 

7.6           Interest.
If either Party fails to make any payment due under this Agreement within thirty (30) days of the date upon which such payment
is due, then interest shall accrue on such payment on a daily basis from the date such payment was originally due at a rate equal
to LIBOR (as published in The Wall Street Journal, New York edition) plus two percent (2%), or at the maximum rate permitted by
applicable law, whichever is the lower, and such interest shall be paid when such payment is made.

 

7.7           Currency
Exchange. All amounts referred to in this Agreement are expressed in, and all payments to Acerus hereunder will be payable
in, U.S. Dollars.

 

7.8           Records.

 

(a)          Retention.

 

(i)          Acerus
Records. After the Effective Date, Acerus shall keep for at least three (3) years following the end of the calendar year to which
they pertain complete records of all matters relating to all development work on Product done by Acerus and, as may be further
described in the Quality Agreement, to Manufacturing of Product (including as are necessary or useful in calculation of Acerus’
COGS for the Product). Such recordkeeping obligations shall survive any expiration or termination of this Agreement for the time
period provided herein.

 

(ii)         Aytu
Records. Aytu shall keep for at least three (3) years following the end of the calendar year to which they pertain complete records
of Net Sales of Product in the Territory and detailed customer relationship management records evidencing and providing particulars
with respect to all Details the Product (including, without limitation, the date, time, name of representative, name of health
care practitioner Detailed and other pertinent information in order to permit Acerus to evaluate Aytu’s compliance with ARTICLE
6 of this Agreement). Such record keeping obligation shall survive any expiration or termination of this Agreement for the time
provided herein.

 

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(b)          Access
to Records. Subject to the other terms of this Section 7.8, either party (the “Requesting Party”) may audit
the records of the other Party (the “Audited Party”). If the Audited Party is Aytu, the records to be audited
are records regarding Net Sales (including, for greater certainty, the Supply Price applicable in respect of all Net Sales) or
Aytu’s compliance with ARTICLE 6 of this Agreement (including detailed information relevant to the number of Representatives
engaged by or on behalf of Aytu with respect to the Product and the Primary Details completed thereby). If Acerus is the Audited
Party the records to be audited are records regarding Manufacturing. Such audit shall be conducted (i) after at least thirty (30)
days prior written notice from the Requesting Party, (ii) at the facility(ies) where the applicable records are maintained, (iii)
without disruption to operations of the Audited Party (to the extent reasonably practicable, such examination shall be completed
within five (5) Business Days), and (iv) no more frequently than once in any calendar year. The audit shall be conducted by (1)
a nationally recognized independent certified public accountant selected by the Requesting Party (but not the accountant that conducts
or has within the past three (3) years conducted the audit of such Requesting Party’s financial statements) or (2) in the
case of an audit of Acerus’ development work on Product, professionals of Aytu’s choosing having the appropriate scientific
and/or regulatory background and experience. The auditor will execute a written confidentiality agreement with the Audited Party
that is substantially similar to the confidentiality provisions of ARTICLE 10 and limiting the disclosure and use of information
obtained from such audit to authorized representatives of the Parties and the purposes germane to this Section 7.8. The auditor
will disclose to the Requesting Party only the amount and accuracy of costs or payments, as applicable, reported and actually paid
or otherwise payable under this Agreement. The auditor will send a copy of the report to both Parties at the same time. The Requesting
Party shall be responsible for expenses for the audit, except that the Audited Party shall reimburse the Requesting Party up to
$25,000 for such independent accountant documented services if the independent accountant determines that payments made by the
Audited Party are less than ninety five percent (95%) of the amount actually owed for the period of the audit (or if, in the case
of Aytu, it is determined that Aytu has not complied with the provisions of ARTICLE 6 of this Agreement during the applicable period)
and such determination is finally resolved in favor of the Requesting Party pursuant to Section 7.8(c) below if contested by the
Audited Party. All inspections made hereunder shall be made no later than two (2) years after the records subject to the investigation
were due, and all records not so audited within two (2) years will be deemed accurate and in accordance with the terms of this
Agreement.

 

(c)          Underpayment
or Overpayment. If, as a result of any audit pursuant to Section 7.8(b), it is shown that the Audited Party’s payments to
the Requesting Party under this Agreement with respect to the period of time audited were less than the amount that should have
been paid pursuant to this Agreement, then the Audited Party shall, within thirty (30) days after the Requesting Party’s
demand therefor, either pay the Requesting Party the amount of such shortfall, or proceed to the dispute resolution mechanism set
forth in Section 7.8(d) below. If, as a result of any audit pursuant to Section 7.8(b), it is shown that the Audited Party’s
payments to the Requesting Party under this Agreement with respect to the period of time audited exceeded the amount that should
have been paid pursuant to this Agreement, then the Requesting Party shall, within thirty (30) days after the Audited Party’s
demand therefor, either pay the Audited Party the amount of such excess, or proceed to the dispute resolution mechanism set forth
in Section 7.8(d) below.

 

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(d)          Resolution
of Dispute as to Audit. In the event that the Parties do not agree on the amount of overpayment or underpayment, within thirty
(30) days, each Party shall select an independent public accounting firm (and each Party shall pay the costs of its own accounting
firm), which shall meet and discuss the amount in dispute and other related matters within thirty (30) days thereafter. If such
independent public accounting firms cannot agree on a resolution mutually agreeable to the Parties, such independent public accounting
firms shall, within thirty (30) days after such selection, appoint a third independent public accounting firm which shall resolve
the issue within thirty (30) days after its selection, and the Parties shall equally share the costs of such accounting firm. The
recommendation of the third independent public accounting firm shall be final and binding upon the Parties. A judgment on such
firm’s disposition may be entered in any court having jurisdiction over the Parties. Notwithstanding anything to the contrary
herein, the resolution of any dispute under this Section 7.8 shall be made under this Section 7.8(d) instead and in lieu of Section
15.11. The preceding sentence shall not preclude the application of Section 15.11 to any contract interpretation issue (as compared
to an accounting issue which would be precluded from determination under Section 15.11).

 

7.9           Right
of Setoff. Without prejudice to any other right or remedy it may have, notwithstanding anything to the contrary in this Agreement,
Aytu reserves the right to set off at any time any amount owing to it by Acerus against any amount payable by Aytu to Acerus under
this Agreement or otherwise.

 

ARTICLE
8

 

LICENSE
RIGHTS AND LIMITATIONS, RESTRICTIONS AND OWNERSHIP

 

8.1           License
to Aytu. Subject to the terms and conditions of this Agreement, Acerus hereby grants to Aytu, commencing on the Transition
Date and for the duration of the Term, a royalty-free, exclusive (including with respect to Acerus except as to Acerus’
performance of its obligations under this Agreement) license (with the right to sublicense solely in accordance with Section 8.4)
in the Field in the Territory, under the Acerus Intellectual Property, to develop (to the extent required for Aytu fulfill its
obligations hereunder), use, offer for sale, sell, import, market and promote Product.

 

8.2           Acerus
Trademarks.

 

(a)          Grant
of License. Subject to the terms and conditions of this Agreement, Acerus hereby grants to Aytu, commencing on the Transition Date
and for the duration of the Term, an exclusive, royalty-free license (with the right to sublicense in accordance with Section 8.4)
to use the Acerus Trademarks solely in connection with the Product in the Territory. Aytu may use the Acerus Trademarks on Product
subject in all respects to all applicable laws and Regulatory Requirements. Nothing in this Agreement shall obligate Aytu to identify
Product, or to use Acerus Trademarks with respect to Product; provided, however, that if Aytu uses a mark other than (i) the Acerus
Trademarks or (ii) any mark related to the name of Aytu or any Affiliate of Aytu in respect of the Product, to the extent Aytu
has the right to do so without obligation of payment or additional liability to any Person, the Parties shall negotiate in good
faith to grant in writing to Acerus a reasonable paid-up, royalty-free license for Acerus to use such alternative mark in respect
of sales by Acerus or any affiliate, licensee or sublicensee thereof for the Product solely as would be necessary with respect
to sales of the Product outside of the Territory (and, following any termination of this Agreement in accordance with Section 14.2,
sales of the Product inside the Territory).

 

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(b)          Use
of Trademarks. Aytu shall comply with all applicable laws and regulations pertaining to the proper use and designation of the Acerus
Trademarks. Additionally, Aytu shall use Commercially Reasonable Efforts to:

 

(i)          ensure
that the Acerus Trademarks are accompanied by words accurately describing the nature of the goods or services to which it relates
and that the Acerus Trademarks are displayed in accordance with such branding guidelines as Acerus may provide from time to time;

 

(ii)         to
the extent reasonably practicable after receipt of a written request from Acerus, comply with the reasonable requirements of Acerus
as to the form, manner, scale and context of use of the Acerus Trademarks;

 

(iii)        display
the proper form of trademark and service mark notice associated with the Acerus Trademark in accordance with instructions received
from Acerus;

 

(iv)        include,
on any item which bears the Acerus Trademarks, a statement identifying Acerus as the owner of the Acerus Trademark and stating
that Aytu is an authorized user of the Acerus Trademark;

 

(v)         not
conduct, without the written consent of Acerus, the whole or any part of its business under a business name or trading style which
incorporates any of the Acerus Trademarks; and

 

(vi)        neither
use nor display any of the Acerus Trademarks in such relation to any other mark or marks owned by any Third Party, Aytu or an Affiliate
of Aytu as to suggest that the multiple marks constitute a single or composite trademark, service mark, or are under the same proprietorship.

 

(c)          Additional
Trademark Terms. Aytu shall not take any action inconsistent with Acerus’ ownership of the Acerus Trademarks. Any benefits
(including good will) accruing from Aytu’s use of the Acerus Trademarks shall automatically vest in Acerus. Aytu shall not
form any combination trademarks or trade names with the Acerus Trademarks. Aytu shall grant Acerus reasonable access to Aytu’s
facilities, records, packaging and promotional materials for the purpose of inspecting Aytu’s use of the Acerus Trademarks.

 

8.3           Negative
Covenants.

 

(a)          Aytu
hereby covenants that it shall not use or practice, nor shall it cause or permit any of its Affiliates, licensees or sublicensees
to use or practice, directly or indirectly, any Acerus Intellectual Property or Acerus Trademarks for any other purposes other
than those expressly permitted by this Agreement.

 

(b)          Acerus
hereby covenants that it shall not use or practice, nor shall it cause or permit any of its Affiliates, licensees or sublicensees
to use or practice, directly or indirectly, any Aytu Intellectual Property for any other purposes other than those expressly permitted
by this Agreement.

 

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8.4           Sublicensing;
Subcontracting.

 

(a)          Aytu
shall have the right to grant sublicenses under the rights and licenses granted to it under this Article 8, including sublicenses
in connection with the development, manufacture, and distribution of a Generic Product by a Third Party, only with the consent
of Acerus, not to be unreasonably withheld. Aytu shall at all times remain responsible for the activities of its licensees or sublicensees.
Notwithstanding the foregoing, Aytu shall have the right to sublicense the rights and licenses granted to it under this Agreement
without the consent of Acerus in connection with promotional support for the Product, and for Aytu to develop, manufacture, and
distribute a Generic Product itself.

 

(b)          Each
of Aytu and Acerus shall have the right to subcontract to Affiliates and Third Parties (“Subcontractors”) its
responsibilities under this Agreement, without obtaining the consent of the other Party, provided that the applicable party shall
at all times remain responsible for the activities of its Subcontractors.

 

(c)          Each
Party shall enter into agreements with its Subcontractors that contain confidentiality terms at least as strict as those set forth
in Article 10 hereof.

 

8.5            Neither Party
grants (or agrees to grant) to the other Party any right or license to use any of its intellectual property, know-how or other
proprietary information, materials or technology, or to practice any of its patent, trademark, or trade dress rights, except as
expressly set forth in this Agreement.

 

ARTICLE
9

 

INTELLECTUAL
PROPERTY

 

9.1           Background
Intellectual Property. Except as expressly set forth herein, as between the Parties, each Party is and shall remain the owner
of or shall retain control over all intellectual property, including without limitation, patents, patent applications, know-how,
trade secrets, trademarks, copyrights and Confidential Information that it owns or controls as of the Effective Date or that it
develops or acquires thereafter pursuant to activities independent of this Agreement. No rights in any such Background Intellectual
Property are transferred to the other Party unless expressly provided for herein.

 

9.2           Ownership
of Developed Technology. Each Party shall own and retain the entire right, title and interest in and to all Developed Technology
made solely by the employee(s) or agent(s) of such Party or any of its Affiliates, subject only to the rights expressly granted
to the other Party under this Agreement. Following a determination of any rights of the Parties pursuant to the United States
laws of inventorship, the Parties agree that Acerus shall be the sole and exclusive owner of any Developed Technology made jointly
by employees or agents of both Parties and related to the NGDD Technology or the Product (a “Platform Improvement”)
and Aytu shall be the sole and exclusive owner of any other Developed Technology made jointly by employees or agents of both Parties
(a “Non-Platform Improvement”). Neither Party shall file for any patent that discloses or claims both a Platform
Improvement and a Non-Platform Improvement or the combination thereof without the prior written consent of the other Party. Aytu
shall and hereby does assign to Acerus any rights it has or may obtain during the Term in or to any such Platform Improvement,
subject to (i) Aytu’s ownership of the NDA and all Know-How contained therein, and (ii) the other rights expressly granted
by Acerus to Aytu under this Agreement. Acerus shall and hereby does assign to Aytu any rights it has or may obtain during the
Term in or to any such Non-Platform Improvement. Each Party agrees to execute such documents and assignments and take such other
actions as reasonably requested by the other Party (and at the requesting Party’s Cost) to effect the assignments and ownership
of Intellectual Property Rights as described herein.

 

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9.3           Patent
Prosecution and Maintenance.

 

(a)          Except
as provided below and in Section 9.4, Acerus shall have the sole right and obligation to prosecute and maintain the Acerus Patents
in the Territory, to the extent it has the rights to do so. On the reasonable request of Acerus, Aytu shall cooperate, in all reasonable
ways, in connection with the prosecution of the Acerus Patents. Should Acerus decide that it is no longer interested in maintaining
or prosecuting a particular Acerus Patent in the Territory in respect of which it has the rights to so maintain and prosecute,
Aytu may assume such prosecution and maintenance in the Territory at its sole expense. If Aytu assumes prosecution or maintenance
of any Acerus Patent in respect of which Acerus has the right to prosecute or maintain pursuant to the immediately preceding sentence,
then : (a) Acerus shall not so abandon or fail to prosecute or maintain such Patent if Aytu advises Acerus within ten (10) Business
Days of notice of Acerus’ intention to abandon or not prosecute or maintain the applicable Acerus Patent, that Aytu desires
to assume prosecution or maintenance of the applicable Acerus Patent in Acerus’ name at Aytu’s expense, in which case
Aytu shall have the right, but not the obligation to do so (and, for greater certainty, Acerus shall be under no obligation to
assign the applicable Acerus Patent to Aytu), (b) to the extent that Aytu so assumes prosecution or maintenance of such Patent
and to the extent required or useful for Aytu to initiate or maintain a lawsuit or dispute with respect thereto, Acerus agrees
(at Aytu’s cost and expense for Acerus’ reasonable out of pocket costs and expenses agreed to in advance by Aytu) to
(i) be named as a party to any lawsuit or other dispute with any Person regarding such Patent, (ii) exercise on behalf of Aytu
Acerus’ rights under any applicable agreement regarding the applicable Patent, and (c) it shall not exercise any rights in
relation to (including any rights to assert or defend) such Patent without Aytu’s prior written consent, such consent to
be granted or withheld in Aytu’s sole discretion. Aytu shall list Acerus Patents applicable to Product on the packaging therefor,
subject in all respects to all applicable laws and Regulatory Requirements.

 

(b)          Except
as provided below and in Section 9.4, Aytu shall have the sole right but not the obligation to prosecute and maintain any patents
or patent applications comprising a part of the Aytu Intellectual Property in the Territory.

 

(c)          Within
six months of the Effective Date (or such other time as the Parties may agree), for each patent and patent application that is
part of the Acerus Patents, Acerus shall execute and record at the United States Patent and Trademark Office or use commercially
reasonable efforts to cause its affiliates or licensors to execute and record as required, all assignments and other documents
relating to ownership and use interests such as license agreements, to evidence the complete change of title from the inventors
to the current assignee and Acerus’ exclusive rights licensed from the current assignee. For avoidance of doubt, Acerus shall
ensure, at a minimum, that assignments of all patents listed in the Orange Book for NATESTO® and all patents and patent applications
listed in Schedule 1.8, including those that are continuations-in-part of the Patent Application No. 10/772,964, are executed and
recorded at the United States Patent and Trademark Office.

 

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9.4           Infringement
by Third Parties.

 

(a)          Notice.
Each of Aytu and Acerus shall promptly notify the other Party in writing of any alleged or threatened infringement of any Acerus
Patent or the Acerus Trademarks by a Third Party product, of which the Party becomes aware.

 

(b)          Right
to Bring Suit. Except as provided in this Section 9.4(b), Aytu shall have the first right, on behalf and in the name of Acerus
and/or on behalf of itself and in its name, to bring and control any action or proceeding with respect to any alleged or threatened
infringement of a Acerus Patent pertaining to Product in the Territory. If Aytu does not bring and continue pursuing an action
or proceeding against, or otherwise take appropriate steps to cause the cessation of such an infringement of any Acerus Patent
by or after the earlier of (i) eighty (80) days following the notice of alleged infringement or (ii) ten Business Days prior to
the date as may be required, in the United States by the Drug Price Competition and Patent Term Restoration Act (Public Law 98-417)
or equivalent statute in any other country in the Territory to respond to a challenge related to generic entry of the Product after
which date the right to so respond is prohibited by such act or statute, then Acerus shall have the right to bring and control
an infringement action under the applicable Acerus Patents with respect to such infringement at its own expense and by counsel
of its own choice.

 

(c)          Cooperation;
Settlement. For any action or proceeding brought by a Party under this Section 9.4 (the “Initiating Party”),
regardless of which Party brings such action or proceeding, the other Party (the “Non-Initiating Party”) shall
cooperate reasonably in any such effort, all at the Initiating Party’s expense, and the Parties shall reasonably cooperate
to address new facts or circumstances that come to light during the course of any such action or proceeding that may affect the
need for one Party or the other to participate in such action. The Non-Initiating Party agrees to be joined as a party plaintiff,
at the Initiating Party’s expense, in any such action if needed for the Initiating Party to bring or continue an infringement
action hereunder. The Non-Initiating Party shall, at its own expense and with its own counsel, have the right to advise and provide
comments with respect to any action brought by the Initiating Party under this Section 9.4. Neither Party may settle an action
or proceeding brought under this Section 9.4 in a manner that, or knowingly take any other action in the course thereof that, adversely
affects the value, scope or validity of the Acerus Patents without the written consent of the other Party, which consent shall
not be unreasonably withheld

 

(d)          Recoveries.
Except as otherwise agreed to by the Parties as part of a cost-sharing arrangement, any recovery realized as a result of any litigation
under this Section 9.4 (including, for greater certainty, the proceeds of any settlement relating to such litigation), after reimbursement
of any litigation expenses of Aytu and Acerus, as applicable, shall be retained by the Party that brought and controlled such litigation
for purposes of this Agreement, except that the other Party shall be entitled to receive twenty-five percent (25%) of any recovery
realized by the Party that brought and controlled such litigation under this Section 9.4, after reimbursement of each of the Parties’
related litigation expenses

 

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9.5           Third
Party Claims for Infringement or Misappropriation. Each Party shall promptly notify the other in writing of any potential
or actual allegation, claim or suit that the Manufacture, use or sale of Product or any component thereof, or any other
activities that are undertaken pursuant to this Agreement, infringes or misappropriates a Third Party’s patent or other
proprietary rights. Acerus shall be solely responsible for any royalties and other amounts payable for or under any and all
Third Party licenses with respect to any Third Party patent or other proprietary rights if such Third Party rights are
infringed by the Manufacture, importation, sale, use or marketing of Product in the Territory, except that Acerus shall not
be liable for any such Third Party licenses entered into by Aytu without Acerus’ consent, not to be unreasonably
withheld, delayed or conditionedAcerus. 

 

ARTICLE 10

 

CONFIDENTIALITY

 

10.1         Definition
of Confidential Information. During the Term, either Party (the “Disclosing Party”) may from time to time
furnish the other Party (the “Receiving Party”) with scientific, technical, trade or business information or
materials which are treated by the Disclosing Party as confidential or proprietary, including, without limitation, information
and materials related to, Product, processes, formulae, procedures, tests, equipment, data, batch records, reports, know-how,
sources of supply, patent positioning, relationships with consultants and employees, business plans and business developments,
and information concerning the existence, scope or activities of any research, design, development, Manufacturing, marketing or
other projects. All such disclosed information shall be referred to herein as “Confidential Information” if it is
provided in writing and is designated or otherwise identified as “Confidential” at the time of disclosure, or if it
is first provided orally, visually, or by inspection and is identified as “Confidential” at the time of disclosure.
Notwithstanding the foregoing, Confidential Information shall also include such information or materials that would or should
reasonably be identified or understood by the Receiving Party to be the confidential or proprietary information of the Disclosing
Party, even if they are not so identified as described in the previous sentence. “Acerus Confidential Information”
means any and all Confidential Information for which Acerus is the Disclosing Party and Aytu the Receiving Party hereunder. “Aytu
Confidential Information” means any and all Confidential Information for which Aytu is the Disclosing Party and Acerus
the Receiving Party hereunder.

 

10.2         Confidentiality.
Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, the Parties agree that
for the Term and for seven (7) years thereafter, the Receiving Party shall keep confidential and shall not publish or otherwise
disclose and shall not use for any purpose any Confidential Information furnished to it by the Disclosing Party pursuant to this
Agreement.

 

10.3         Exclusions.
Notwithstanding anything herein to the contrary, the obligations of confidentiality and nonuse under this Article 10 applicable
to Confidential Information hereunder shall not apply to information that:

 

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(a)          at
the time of disclosure, is known publicly or thereafter becomes known publicly through no fault of the Receiving Party, its Affiliates
or agents;

 

(b)          is
disclosed to the Receiving Party on a non-confidential basis by a Third Party that is not subject to any confidentiality obligations
to the Disclosing Party with respect to such information;

 

(c)          was
developed by the Receiving Party independently of information obtained from the Disclosing Party, as shown by the Receiving Party’s
prior written records;

 

(d)          was
already known to the Receiving Party before receipt from the Disclosing Party, as shown by the Receiving Party’s prior written
records; or

 

(e)          is
released with the prior written consent of the Disclosing Party (subject to the terms and conditions, if any, set out in the applicable
consent).

 

10.4         Permitted
Disclosures.

 

(a)          Notwithstanding
the foregoing, each Receiving Party may disclose the Disclosing Party’s Confidential Information (i) to the Receiving Party’s
employees, consultants (including, for greater certainty, financial advisors), Affiliates, agents, contractors, licensees or sublicensees
who are bound by obligations relating to confidentiality at least as restrictive of those contained herein and who have a need
to know such information in connection with the Receiving Party’s performance of its obligations or practice of its rights
under this Agreement, (ii) to Regulatory Authorities in connection with any Regulatory Submissions required for development of
Product or in compliance with Regulatory Requirements, including, without limitation, any requirements under or pursuant to the
Food and Drug Administration Amendments Act of 2007, or (c) pursuant to Sections 10.5 and 10.6.

 

(b)          Notwithstanding
anything to the contrary in this Agreement, Aytu acknowledges and agrees that Acerus may, with the consent of Aytu, not to be unreasonably
withheld, participate in and produce scientific presentations or publish scientific publications in the Territory with respect
to pre-clinical and clinical development of the Product (including results and observations observed during any such pre-clinical
and clinical development, and including any such development work associated with the twice-daily dosing of the Product). Prior
to any such proposed presentation or publication, Acerus shall, as soon as reasonably practicable prior to the presentation or
publication date, as the case may be, provide Aytu with the text of the applicable presentation or publication, and Acerus shall
modify such presentation or publication in accordance with any reasonable comments received from Aytu.

 

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10.5         Terms
of Agreement. The Parties agree that the terms of this Agreement will be considered Confidential Information of both Parties.
Subject to Section 10.6 below, no Party shall, without the prior written consent of the other Party, disclose in any manner to
any Third Party the terms and conditions of this Agreement, except for terms or subject matter which has been the subject of prior
public disclosure or has been mutually approved for such disclosure and except as set forth below. Each Party acknowledges that
the other Party may be legally required to file this Agreement as an exhibit to its filings with the U.S. Securities and Exchange
Commission. In addition: (a) either Party may disclose such terms as are required to be disclosed in its publicly-filed financial
statements or other public statements, pursuant to applicable laws, regulations and stock exchange rules (e.g., the rules of the
U.S. Securities and Exchange Commission, Canadian securities administrators, NASDAQ, Toronto Stock Exchange, NYSE or any other
stock exchange on which securities issued by either Party may be listed); provided, such Party shall provide the other Party with
a copy of the proposed text of such statements or disclosure (including any exhibits containing this Agreement) sufficiently in
advance of the scheduled release or publication thereof to afford such other Party a reasonable opportunity to review and comment
upon the proposed text (including redacted versions of this Agreement), (b) either Party shall have the further right to disclose
the material financial terms of this Agreement under a confidentiality obligation no less protective than those set forth in this
Agreement, to any potential licensee, sublicensee, acquirer, merger partner or potential providers of financing and their advisors
or, in the case of Acerus, to the owner of any Acerus Patents Controlled by Acerus, (c) Aytu shall have the right to disclose
information regarding the development or commercialization status of Product in the Territory to the extent such disclosure is
deemed reasonably necessary or desirable by Aytu, and (d) Acerus and Aytu shall have the right to disclose information regarding
the development or commercialization status of Product in the Territory to the extent such disclosure by Acerus or Aytu, as applicable,
is required by applicable laws or stock exchange rules.

 

10.6         Mandatory
Disclosure.

 

(a)          Notification
and Consultation. In the event that the Receiving Party is required by applicable statute or regulation or by court order or judicial
or administrative process to disclose any part of the Disclosing Party’s Confidential Information (including material terms
or conditions of this Agreement), the Receiving Party shall (i) promptly notify the Disclosing Party of each such requirement and
identify the documents so required thereby, so that the Disclosing Party may seek or request the Receiving Party to seek an appropriate
protective order, confidential treatment or other remedy and/or waive compliance by the Receiving Party with the provisions of
this Agreement and (ii) consult with the Disclosing Party on the advisability of taking legally available steps to resist or narrow
the scope of such requirement.

 

(b)          Limited
Disclosure. If, in the absence of such a protective order, confidential treatment request, other remedy or waiver by the Disclosing
Party, the Receiving Party is nonetheless required to disclose any part of the Disclosing Party’s Confidential Information
or any material terms or conditions of this Agreement, the Receiving Party may disclose such Confidential Information or material
terms or conditions without liability under this Agreement, except that the Receiving Party shall furnish only that portion of
the Confidential Information or material terms or conditions that is legally required.

 

    37 

     

    

 

ARTICLE
11

 

PUBLIC
ANNOUNCEMENTS; USE OF NAMES; PUBLICATIONS

 

11.1         Public
Announcements. The Parties agree that the public announcement of the execution of this Agreement shall be substantially in
the form of the press release attached as Schedule 11.1, and the Parties will cooperate in the release thereof as soon as practicable
after the signature of this Agreement by the Parties. Neither Party shall make any other statement to the public regarding the
execution and/or any other aspect of the subject matter of this Agreement, except: (i) where a Party reasonably believes disclosure
is required under applicable laws, and (ii) either Party may use the text of a statement previously approved by the other party.
This provision shall not apply to the matters covered by Sections 10.5, 10.6 or 11.2.

 

11.2         Use
of Names. Acerus shall not make use of the name of Aytu or any of its Affiliates in any advertising or promotional material,
or otherwise, without the prior written consent of Aytu except pursuant to Section 11.1. Except as provided in Section 8.2 or
11.1, Aytu shall not make use of the name of Acerus or any of its Affiliates in any advertising or promotional material, or otherwise,
without the prior written consent of Acerus. Notwithstanding the foregoing, either Party may use the name of the other Party or
its Affiliates in the context of mentioning the existence of this Agreement in advertising or promotional materials or other materials
required to be filed in accordance with applicable securities laws.

 

ARTICLE
12

 

REPRESENTATIONS,
WARRANTIES AND COVENANTS

 

12.1         Mutual
Representations and Warranties of Acerus and Aytu. Each of Acerus and Aytu hereby represents and warrants to the other Party
as of the Effective Date as follows:

 

(a)          It
is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation,
as applicable. It has the requisite corporate power and authority to conduct its business as presently being conducted and as proposed
to be conducted by it.

 

(b)          It
has the requisite corporate power and authority to enter into this Agreement and to perform the services contemplated hereunder.
All corporate actions on its part, necessary for (i) the authorization, execution, delivery and performance by it of this Agreement,
and (ii) the consummation of the transactions contemplated hereby, have been duly taken.

 

(c)          Assuming
the due authorization, execution and delivery by the other Party, this Agreement is its legally valid and binding obligation, enforceable
against it in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and except that the
availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court or
other tribunal before which any proceeding may be brought).

 

(d)          There
is no contractual restriction or obligation binding on either Party which would be materially contravened by execution and delivery
of this Agreement or by the performance or observance of its terms.

 

(e)          Each
Party has and will continue to have written contracts with all Third Parties (including employees and Subcontractors) performing
services on its behalf under this Agreement where such services are intended to create inventions that assign to such Party all
inventions and rights therein.

 

    38 

     

    

 

(f)          To
each Party’s knowledge, no representation or warranty made by it in this Agreement, nor any statement contained in any schedule
hereto furnished by it, contains any untrue statement of a material fact or omits any material fact necessary to make the statements
contained herein or therein not misleading.

 

12.2         Additional
Representations and Warranties of Acerus. Acerus hereby further represents, warrants, and covenants to Aytu:

 

(a)          Acerus
shall be the sole and exclusive owner of, or shall have exclusive rights to, all of the Acerus Intellectual Property in existence
on the Transition Date, and the Acerus Patents are in full force and effect and have been maintained to date. Acerus has the exclusive
right to grant the rights granted under this Agreement commencing on the Transition Date. Acerus has not received any claims or
notice of any challenges from any Third Party disputing the validity and enforceability of the issued Acerus Patents in existence
on the Effective Date, nor does Acerus have any reason to believe that any of the issued Acerus Patents in existence on the Effective
Date are, or are likely to be held, invalid or unenforceable.

 

(b)          There
is no pending or, to the knowledge of Acerus, threatened claim, interference, opposition or demand of any Third Party challenging
the ownership, validity or scope of any Acerus Intellectual Property or Acerus Trademarks in existence as of the Effective Date,
and Acerus is not aware of any facts from which it could reasonably conclude that any of the Acerus Patents is invalid or that
the exercise thereof would infringe patent rights of Third Parties. To the knowledge of Acerus, (i) the Manufacture, use or sale
of Product (as now formulated) as contemplated under this Agreement will not infringe any existing issued patent (or any pending
published patent application), (ii) the use of the Acerus Intellectual Property or Acerus Trademarks as contemplated under this
Agreement will not constitute the misappropriation of any trade secret or any other proprietary rights of any Third Party.

 

(c)          Acerus
has not been served with any action or proceeding nor, to the knowledge of Acerus, is there any threat of an action or proceeding
nor, so far as Acerus is aware, is there any event or state of facts, in each case that could materially and adversely affect the
rights granted to Aytu herein.

 

(d)          Except
as set forth on Schedule 12.2(d), Acerus has not granted to any Third Party any rights with respect to the Acerus Trademarks. The
Acerus Trademarks are in full force and effect, are subsisting and valid, and have been maintained to date, and are not subject
to any opposition proceedings. Its use or its Affiliates’ use of the Acerus Trademarks does not infringe, misappropriate,
or otherwise violate any rights of any person and, to the knowledge of Acerus, no person is infringing, misappropriating or otherwise
violating the Acerus Trademarks.

 

(e)          Acerus
and its Affiliates have and will comply with all Specifications, applicable laws, permits, governmental licenses, registrations,
approvals, concessions, authorizations, orders, injunctions and decrees with respect to the development, manufacture, transport,
disposal, and supply of the Product and all other Acerus obligations under this Agreement.

 

    39 

     

    

 

(f)          Acerus
has not received any Form 483 observations, warning letters or other communications from a Regulatory Authority which would reasonably
be expected to adversely impact the Manufacture or the marketing of Product.

 

(g)          Product
supplied to Aytu will conform to the Specifications and will be Manufactured in compliance with the Specifications, cGMP and all
other provisions of this Agreement, the Quality Agreement and all applicable federal, state and local laws, rules and regulations,
including, without limitation, all Regulatory Requirements and environmental laws, in force at the time of Manufacture.

 

(h)          Product
subject to the provisions of the FD&C Act, will not, when shipped by Acerus and received by Aytu, be adulterated or misbranded
within the meaning of the FD&C Act or of any applicable state law or law of any foreign country in which the definitions of
adulteration and misbranding are substantially the same as those contained in the FD&C Act, or an article which may not, under
the provisions of the FD&C Act, be introduced into interstate commerce.

 

(i)          All
Product components shall be free of any material that would cause such Product to be adulterated, tainted or contaminated or not
labeled or packaged as required under the Food and Drugs Act or the Food and Drug Regulations.

 

(j)          Upon
delivery of the Product to Aytu and receipt of payment thereof from Aytu, Acerus shall have conveyed good title to all Product
so delivered, without any liens or encumbrances.

 

(k)          Acerus
now has in effect and shall maintain in good standing for the period set forth in Section 13.5 the insurance described in Section
13.5.

 

(l)          Acerus
is not debarred and has not and shall not knowingly and intentionally use in any capacity the services of any third person debarred
under subsections 306(a) or (b) of the Generic Drug Enforcement Act of 1992.

 

(m)          No
consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal,
state or local governmental authority, or any Third Party, on the part of Acerus or any Affiliate thereof is required in connection
with the execution, delivery and performance of this Agreement.

 

(n)          
No research or development of the Acerus Intellectual Property, manufacture of Products or research leading to the inventions covered
by the Acerus Intellectual Property was supported in whole or part by funding or grants by any governmental agency or philanthropic
or charitable organization.

 

(o)          Except
as set out in Schedule 12.2(d), the Acerus Intellectual Property and Acerus Trademarks are wholly owned by or licensed to Acerus,
free and clear of all mortgages, pledges, charges, liens, equities, security interests, or other encumbrances or similar agreements,
or any other obligation as at the Effective Date.

 

    40 

     

    

 

(p)          Acerus
and its Affiliates have taken all reasonable actions necessary or appropriate to preserve the confidentiality of all trade secrets,
proprietary and other confidential information material to Products and Acerus Intellectual Property.

 

(q)          Neither
Acerus nor any Affiliate thereof is aware of any Third Party activities which would constitute misappropriation or infringement
of any Acerus Intellectual Property.

 

(r)          Product
manufactured prior to the Effective Date was manufactured in accordance with cGMP and all applicable federal, state and local laws,
rules and regulations, including, without limitation, all Regulatory Requirements and environmental laws, in force at the time
of manufacture, and all human clinical studies of Products performed by or on behalf of Acerus or its Affiliates prior to the Effective
Date were performed in accordance with the protocols established therefor.

 

12.3         Disclaimer.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH PARTY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES.

 

12.4         Non-competition.
Provided that this Section 12.4 shall not diminish in any way the exclusive rights of Aytu under this Agreement, until the expiry
of the Term:

 

(a)          as
long as Aytu is in compliance with this Section 12.4, Acerus shall not, itself or through any Affiliate, Subcontractor, licensee
or sublicensee, develop, offer for sale, sell, market or promote any Competing Product in the Territory (including any product
that is substitutable at the retail pharmacy level for the Product); and

 

(b)          as
long as Acerus is in compliance with this Section 12.4, Aytu shall not, itself or through any Affiliate, Subcontractor, licensee
or sublicensee, develop, offer for sale, sell, market or promote any Competing Product in the Territory (including any product
that is substitutable at the retail pharmacy level for the Product).

 

The Parties hereby acknowledge and agree
that any material breach of this Section 12.4 shall constitute a material breach of this Agreement, entitling the non-breaching
party to terminate the Agreement in accordance with Section 14.2(c), subject to any cure period set forth therein.

 

12.5         Right
of First Negotiation. In the event that Acerus makes a decision to sell, transfer, assign, exclusively license, or otherwise
dispose of the Acerus Intellectual Property, the Acerus Trademarks, or any other property licensed to Aytu under this Agreement
in any territory in the world (other than Brazil or the countries of the European Union)(such decision being a “Triggering
Event”), Acerus agrees to notify Aytu of the occurrence of a Triggering Event, and Acerus shall negotiate exclusively
with Aytu for a period of sixty (60) days after Aytu’s receipt of such notice with respect to the terms and conditions for
an agreement for such a purchase, assignment, transfer or license to Aytu of the property in question. If the foregoing negotiations
between the Parties do not result in an agreement, despite the good faith efforts of both Parties, Acerus shall thereafter be free
to enter into negotiations with any Third Party with respect to such property.

 

    41 

     

    

 

ARTICLE
13

 

INDEMNIFICATION

 

13.1         Indemnification
by Aytu. Subject to Sections 13.4 and 13.4, Aytu shall indemnify, defend and hold Acerus, its Affiliates, and their respective
directors, officers, employees consultants, contractors, licensees, sublicensees and agents (collectively, the “Acerus
Indemnitees”) harmless from and against any and all claims, suits, proceedings or causes of action (including, without
limitation, in connection with any claim of property damage, bodily injury or death) (“Claims”) brought by
a Third Party against such Acerus Indemnitee, including any damages or other amounts payable to such Third Party, as well as any
reasonable attorneys’ fees and costs of litigation incurred as to any such Claim until the indemnifying Party has acknowledged
that it will provide indemnification hereunder with respect to such Claim as provided below (collectively, “Damages”),
in each case resulting from or based on: (a) clinical development by Aytu, or any sale, use, importation, storage, handling, distribution
or offer for sale or sale of Product by Aytu or any of its Affiliates, licensees or sublicensees, (b) Aytu’s breach of this
Agreement; (c) the gross negligence or willful misconduct of, or violation of applicable law by, Aytu, its Affiliates, licensees
or (sub)licensees, or their respective employees, contractors or agents in the performance of this Agreement; and/or (d) breach
of a contractual or fiduciary obligation owed by Aytu to a Third Party (including without limitation misappropriation of trade
secrets). The foregoing indemnity obligation shall not apply to the extent such Claims or Damages result from any matter for which
Acerus is required to indemnify Aytu pursuant to this Agreement.

 

13.2         Indemnification
by Acerus. Subject to Sections 13.3 and 13.4, Acerus shall indemnify, defend and hold Aytu, its Affiliates, and their respective
directors, officers, employees consultants, contractors, licensees, sublicensees and agents (collectively, the “Aytu
Indemnitees”) harmless from and against any and all Claims brought by a Third Party against such Aytu Indemnitee, including
any Damages resulting therefrom, in each case to the extent resulting from or based on: (a) any development work (including pre-clinical
and clinical) done by Acerus for Product; (b) Acerus’ breach of this Agreement; (c) the negligence or willful misconduct
of, or violation of applicable law by, Acerus, its Affiliates, licensees or (sub)licensees, or their respective employees, contractors
or agents in the performance of this Agreement; (d) breach of a contractual or fiduciary obligation owed by Acerus to a Third
Party (including without limitation misappropriation of trade secrets); (e) intellectual property infringement, trademark infringement,
unfair competition, false designation of origin, trademark dilution, passing off or misappropriation related to the Acerus Intellectual
Property, Acerus Trademarks, the Products, or any other property provided by Aytu under this Agreement, including with respect
to the development, Manufacture, use, sale, import, marketing or promotion of Product; (f) any research, development, sale, use,
importation, storage or handling of any pharmaceutical product by Acerus, its Affiliates, licensees or sublicensees, in each case
using any Non-Platform Improvement or relying on the rights set forth in Section 8.4; (g) any Acerus Manufacturing Defect; or
(h) the use, development, commercialization of the Product by or on behalf of Acerus prior to the Transition Date. An “Acerus
Manufacturing Defect” shall be a defect in the Manufacturing or other similar defect in Product where the Product (as
manufactured by or for Acerus) is not manufactured in accordance with the Specification, the terms of this Agreement, the Regulatory
Approval, Regulatory Requirements, and/or all other applicable laws and regulations. The foregoing indemnity obligation shall
not apply to any Damages to the extent such Damages result from any matter for which Aytu is required to indemnify Acerus pursuant
to Section 13.1(b), (c), or (d). Additionally, Acerus shall indemnify Aytu for any and all costs, fees, damages, and expenses
payable by Aytu arising out of or resulting from the sale or distribution of Products prior to the Transition Date (“Pre
Transition Products”), including, without limitation, costs, fees, and credits associated with the return of Pre Transition
Products, except as set out in the TSA or any agreement entered into between the Parties in connection therewith.

 

    42 

     

    

 

(a)          [intentionally
deleted]

 

13.3         Indemnification
Procedures. A Party seeking indemnification under Section 13.1, or 13.2 hereof (the “Indemnitee”) shall
promptly notify the other Party (the “Indemnitor”) in writing of any claim, lawsuit or other action in respect
of which the Indemnitee, its Affiliates, or any of their respective directors, officers, employees and agents intend to claim
such indemnification. The Indemnitee shall permit, and shall cause its Affiliates and their respective directors, officers, employees
and agents to permit the Indemnitor to have complete control of such defense (except as set forth below) so long as it promptly
assumes the defense and prosecutes the defense with appropriate diligence and care. The Party controlling the defense hereunder
(the “Defending Party”) shall have the authority, at its discretion, to settle any such claim, lawsuit or other
action only with the prior written consent of the Party who is not controlling the defense (the “Non-Defending Party”),
provided, however, that such consent shall not be unreasonably withheld or delayed so long as such settlement does not adversely
affect the Non-Defending Party’s rights hereunder or impose any obligations on the Non-Defending Party in addition to those
set forth herein. The Defending Party and the Non-Defending Party, and their respective Affiliates, and their respective directors,
officers, employees and agents shall cooperate fully with each other and their respective legal representatives in the investigation
and defense of any claim, lawsuit or other action covered by this indemnification. The Defending Party shall keep the Non-Defending
Party reasonably informed of the progress of the action and shall consider the comments and observations of the Non-Defending
Party timely given in the course of the proceedings. If the Indemnitor is the Defending Party, the Indemnitee shall have the right,
but not the obligation, to be represented by counsel of its own selection and expense. Notwithstanding the foregoing, the Indemnitee
may be represented by separate counsel at the expense of the Indemnitor if a conflict of interest exists between the interests
of the Indemnitor and Indemnitee so that a single counsel representing Indemnitor cannot adequately defend the rights of the Indemnitee.

 

13.4         Survival
of Indemnification Obligations. The provisions of this ARTICLE 13 shall survive the termination or expiration of this Agreement.

 

    43 

     

    

 

13.5         Insurance.
Aytu shall maintain insurance with creditworthy insurance companies in accordance with applicable law against such risks and in
such amounts as are usually maintained or insured against by other companies of established repute engaged in the same or a similar
business. Throughout the Term and (i) for a period of twenty-four (24) months thereafter, or (ii) until the expiry date of the
last lot of the Product delivered under this Agreement, whichever is later, Acerus shall maintain in full force and effect, at
its own cost and expense, comprehensive general liability insurance, including product liability and contractual liability insurance,
of not less than $5,000,000 (five million) in the aggregate, naming Aytu and its Affiliates as additional insureds thereon, and
providing that the insurer shall give Aytu at least ninety (90) days prior written notice of cancellation in coverage. Such insurance
coverage shall be provided by an insurer or insurers (having a minimum AM Best rating of A or otherwise acceptable to Aytu, in
its sole discretion) licensed to do business in the Territory and will be primary and non-contributing to any liability insurance
carried by Aytu (only insofar as the coverage relates to claims arising from Acerus’ operations). Acerus shall deliver to
Aytu, promptly upon request, a certificate of insurance evidencing the foregoing.

 

ARTICLE
14

 

TERM
AND TERMINATION

 

14.1         Term.
The initial term of this Agreement shall commence on the Effective Date and shall expire upon the later to occur of: (a) 8 years
from the Effective Date; (b) the date on which the last of the Acerus Patents has expired or been invalidated; or (c) a Third
Party has obtained Regulatory Approval for, and completed the first commercial sale of, a Generic Product within the Territory,
unless earlier terminated in accordance with Section 14.2 (the “Initial Term”), and this Agreement shall thereafter
automatically renew for successive one (1) year periods, unless either Party gives at least six (6) months’ prior written
notice of non-renewal to the other Party (each such one (1) year renewal period, if any, a “Renewal Term,”
and together with the Initial Term, the “Term”).

 

14.2         Termination.

 

(a)          Termination
by Aytu. This Agreement may be terminated at any time by Aytu upon six (6) months’ prior written notice to Acerus, provided
that Aytu shall be required to: (i) make any milestone payment to Acerus that would otherwise become due under Article 7 during
such applicable six (6) month period; and (ii) make any payments that remain payable following termination pursuant to Section
7.1(b) or 7.2(b), as applicable.

 

(b)          Mutual
Agreement. This Agreement may be terminated in its entirety at any time upon mutual written agreement between the Parties.

 

(c)          Material
Breach. Either Party may terminate this Agreement at any time upon written notice to the other Party if the other Party is in material
default or breach of this Agreement and such material default or breach is not cured within (i) sixty (60) days after written notice
thereof is delivered to the defaulting or breaching Party, or (ii) in the case of a breach that cannot be cured within sixty (60)
days, within a reasonable period not exceeding one hundred twenty (120) days after written notice thereof is delivered to the defaulting
or breaching Party, so long as the breaching party is making a good faith effort to cure such default. Termination shall not be
the sole remedy for material breach of this Agreement, and a Party may choose to continue to perform hereunder and in response
to any material breach may bring a claim for damages (including a reduction in consideration due hereunder going forward) and other
available remedies under Section 15.11 and injunctive relieve under Section 15.12, and bringing such a claim in good faith shall
not constitute a breach of this agreement.

 

    44 

     

    

 

(d)          If
either Party shall (a) become bankrupt or insolvent, (b) file for a petition therefor, (c) make an assignment for the benefit of
creditors, or (d) have a receiver appointed for its assets, which appointment shall not be vacated within sixty (60) days after
the filing, then the other Party shall be entitled to terminate this Agreement forthwith by written notice to such Party.

 

(e)          PMR
Trial Costs. If Acerus, acting reasonably and in good faith, determines that the amounts that are, or may become, payable to Aytu
pursuant to Section 3.3(b) of this Agreement in connection with the Cardiovascular PMR and/or any PMR Trial, are such that remaining
subject to this Agreement would no longer be economically viable for Acerus, this Agreement may be terminated by Acerus upon six
(6) months’ prior written notice to Aytu, provided that Acerus shall be required to: (i) pay Aytu any amounts owing to Aytu
pursuant to Section 3.3(b) outstanding prior to the effective date of termination by no later than such effective date of termination;
and (ii) fulfill any valid Purchase Orders submitted by Aytu prior to the effective date of termination.

 

(f)          Challenge.
If at any time during the Term, Aytu brings a proceeding or action challenging the validity, scope, enforceability or ownership
of any of the Acerus Patents or Acerus Trademarks licensed to Aytu under this Agreement, Acerus shall have, at its sole option,
the right to terminate this Agreement upon notice to Aytu, such termination to be effective only if Aytu does not withdraw such
challenge as soon as reasonably practicable after such notice. Without limiting the generality of the foregoing, Aytu specifically
agrees that filing a request for re-examination, knowingly copying patent claims so as to institute an interference, or filing
an opposition with respect to any of the Acerus Patents shall be deemed a challenge under this Section 14.2(f)).

 

14.3         Consequences
of Termination.

 

(a)          Surviving
Payments. Any payments contemplated to survive termination in accordance with Section 7.1(b), 7.2(b) and 14.2(a) shall remain payable
in accordance with the terms and conditions of such sections.

 

(b)          Sell
Off of Product. Upon expiration of the Term or termination of this Agreement pursuant to Section 14.2, the rights granted to Aytu
under this Agreement shall survive such expiration or termination only such that Aytu shall have the right to sell off Product
then in Aytu’s inventory or on order from Acerus on the date on which the applicable notice of termination is provided or
the Agreement otherwise expires; provided that Aytu pays to Acerus any payments due in accordance with Section 7.2 (including,
for greater certainty, any milestone payments that become payable as a result of Net Sales of the Product in the period during
which Product is being sold off in accordance with this Section 14.3(a)) or Section 7.3. Any other license provided for by Acerus
to Aytu in this Agreement shall, upon any such termination or expiration, immediately and automatically terminate.

 

    45 

     

    

 

(c)          Return
of Regulatory Submissions. Promptly following any expiration of the Term or termination of this Agreement pursuant to Section 14.2,
(1) Aytu shall assign to Acerus all Regulatory Submissions for the Product and shall submit to the FDA and any other Regulatory
Authorities in the Territory all necessary documentation to transfer legal and record ownership of all Regulatory Submissions for
the Product (including any Post-Approval Regulatory Submissions, and including any INDs and the Product NDA) to Acerus and (2)
Aytu shall assign to Acerus all trademarks used in the commercialization of the Product (to the extent not already owned by Acerus).

 

(d)          Return
of Confidential Information. Upon expiration of the Term or termination of this Agreement in its entirety, unless otherwise directed
by Aytu, Acerus shall promptly return all Aytu Confidential Information to Aytu, except for a single copy or sample for documentation
purposes only. Upon expiration or termination of this Agreement in its entirety, unless otherwise directed by Acerus, Aytu shall
promptly return all Acerus Confidential Information to Acerus, except for a single copy or sample to be retained for documentation
purposes only.

 

(e)          Accrued
Obligations. Except as set forth herein, any termination or expiration of this Agreement shall not relieve either Party of any
obligation which has accrued prior to the effective date of such termination or expiration, which obligations shall remain in full
force and effect for the period provided therein.

 

(f)          Remedies.
Termination of this Agreement in accordance with and fulfillment of all obligations set forth in this ARTICLE 14 shall not affect
any other rights or remedies that may be available to a Party in law or equity, all remedies being cumulative and not exclusive.

 

ARTICLE
15

 

MISCELLANEOUS

 

15.1         Notices.
Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted to be given to any
Party shall be in writing and shall be deemed given only (a) when delivered to the Party personally, (b) five (5) days after sent
to the Party by registered mail, return receipt requested, postage prepaid, (c) the second Business Day after sent by a nationally
recognized courier service guaranteeing next-day or second-day delivery, charges prepaid, in each case addressed to the Party
at its address set forth below, or (d) the first Business Day after sent by facsimile transmission to the number set forth below,
or at such other address or fax number as such Party may from time to time specify by notice given in the manner provided herein
to the Party entitled to receive notice hereunder:

 

    46 

     

    

 

	For Acerus:	Acerus Pharmaceuticals SRL
	 	Suite B, Durants Business Center
	 	Durants, Christ Church
	 	Barbados BB17097
	 	 
	 	Attention:  Vice President, Finance
	 	FAX:  246-420-7550
	 	 
	With a copy to:	Acerus Pharmaceuticals Corporation
	 	2486 Dunwin Drive
	 	Mississauga, Ontario
	 	L5L 1J9
	 	 
	 	Attention:  President and Chief Executive Officer 
	 	FAX:  905.569.1809
	 	 
	For Aytu:	Aytu BioScience, Inc.
	 	373 Inverness Parkway, Suite 206
	 	Englewood, CO 80112 USA
	 	Attn: Chief Executive Officer
	 	 
	With copies to:	Wyrick, Robbins, Yates, & Pontin, LLP
	 	4101 Lake Boone Trail, Suite 300
	 	Raleigh, NC 27607 USA
	 	Attn: W. David Mannheim, Esq.

 

15.2         Entire
Agreement. This Agreement, the Quality Agreement and the Safety Agreement (including any Schedules other attachments hereto
or thereto, as applicable) constitutes the entire agreement between the Parties with respect to the subject matter hereof, and
no oral or written statement may be used to interpret or vary the meaning of the terms and conditions hereof. This Agreement supersedes
any prior or contemporaneous agreements and understandings, whether written or oral, between the Parties with respect to the subject
matter hereof, including the Confidentiality Agreement between Acerus and Aytu dated January 27, 2016 (the “Existing
CDA”). All information disclosed by Acerus pursuant to the Existing CDA shall be deemed Acerus Confidential Information
for the purposes of this Agreement.

 

15.3         Assignment.
Neither Party may assign or otherwise transfer this Agreement without the prior written consent of the other Party, except that
either Party may assign this Agreement without the consent of the other Party to any Affiliate or in connection with the acquisition
of such Party or the sale of all or substantially all of the assets of such Party. Any assignment of this Agreement in violation
of this Section 15.3 shall be null and void. Assignment of this Agreement by either Party shall not relieve the assignor of its
obligations hereunder. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors
and permitted assigns.

 

    47 

     

    

 

15.4         Force
Majeure. Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such
performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other
Party. Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party
takes reasonable efforts to minimize the effect of and overcome or remove the cause or condition causing such force majeure. For
purposes of this Agreement, force majeure shall include conditions beyond the control of the Parties, including, without limitation,
an act of God, war, civil commotion, terrorist act, labor strike or lock-out, epidemic, failure or default of public utilities
or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe, and failure
of plant or machinery (provided that such failure could not have been prevented by the exercise of skill, diligence, and prudence
that would be reasonably and ordinarily expected from a skilled and experienced person engaged in the same type of undertaking
under the same or similar circumstances). Notwithstanding the foregoing, a Party shall not be excused from making payments owed
hereunder because of a force majeure affecting such Party.

 

15.5         Headings.
The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the
meaning or interpretation of the Agreement.

 

15.6         Independent
Contractor. Each Party shall be acting as an independent contractor in performing under this Agreement and shall not be considered
or deemed to be an agent, employee, joint venturer or partner of the other Party.

 

15.7         Severability.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party.

 

15.8         No
Third-Party Beneficiaries. Except as provided in ARTICLE 13 in respect to Acerus Indemnitees and Aytu Indemnitees, nothing
in this Agreement, either express or implied, is intended to or shall confer upon any Third Party any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

15.9         Amendment.
This Agreement may not be amended or modified except by an instrument in writing signed by authorized representatives of Aytu
and Acerus.

 

15.10         Governing
Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, United States
of America (without giving effect to principles of conflicts of laws that would require the application of any other law) and
the federal laws of the U.S., in each case without reference to choice of law rules.

 

15.11         Dispute
Resolution. In the event of any dispute under this Agreement (other than disputes excluded in subsection (a) below), the Parties
shall refer such dispute to the Applicable Senior Officers for attempted resolution by good faith negotiations within thirty (30)
days after such referral is made. If the Applicable Senior Officers are unable to resolve the dispute within the time allotted,
either Party may proceed as set forth below.

 

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(a)          Alternative
Dispute Resolution. Any dispute, controversy or claim arising out of or relating to the validity, construction, enforceability
or performance of this Agreement, including disputes relating to an alleged breach or to termination of this Agreement and including
any claim of inducement by fraud or otherwise, but excluding any dispute, controversy or claim arising out of or relating to the
validity, enforceability, or infringement of any Acerus Patent or any suit for injunctive relief under Section 15.12 (which shall
be submitted to a court of competent jurisdiction), shall be settled by mediation and arbitration in the manner described below:

 

(b)          Mediation.
The Applicable Senior Officers shall select a mediator with appropriate expertise in the subject matter to which the dispute relates,
who will be engaged to resolve the dispute. If the Applicable Senior Officers cannot agree on a mediator within fifteen (15) days,
each Party may seek appropriate resolution through arbitration as described below. If the Parties are unable to resolve their dispute
through mediation within ninety (90) days after selection of the mediator(s), either Party may seek appropriate resolution through
arbitration as described below.

 

(c)          Arbitration.
Any dispute, controversy or claim arising out of or relating to the validity, construction, enforceability or performance of this
Agreement which is not resolved by mediation, including disputes relating to alleged breach or to termination of this Agreement
(other than disputes referred to in Section 15.11(a) that are to be submitted to a court of competent jurisdiction), shall be settled
by binding arbitration (“Arbitration”) in the manner described below:

 

(d)          If
a Party intends to begin an Arbitration to resolve a dispute, such Party shall provide written notice (the “Arbitration
Request”) to the other Party informing such other Party of such intention and the issues to be resolved. Within ten (10)
Business Days after the receipt of the Arbitration Request, the other Party may, by written notice to the Party initiating Arbitration,
add additional issues to be resolved.

 

(e)          Procedure.
The Arbitration shall be conducted pursuant to the then-current JAMS Streamlined Arbitration Rules & Procedures for disputes
involving $3,000,000 or less and the JAMS Comprehensive Arbitration Rules & Procedures for disputes involving more than $3,000,000
or involving a right to terminate this Agreement under Section 14.2(c) or (d) or (e)). Notwithstanding those rules, the following
provisions shall apply to the Arbitration hereunder:

 

(i)          Arbitrator.
In the event that the dispute at issue involves an amount less than $3,000,000, the Arbitration shall be conducted by one (1) arbitrator
(the “Threshold 1 Arbitrator”). In the event, however, that the dispute at issue involves an amount greater
than $3,000,000 or the termination of this Agreement under Section 14.2(c) or (d) or (e), the Arbitration shall be conducted by
a panel of three (3) arbitrators (collectively, with the Threshold 1 Arbitrator, the “Arbitrators”). The Arbitrators
shall be selected from a pool of retired independent federal judges to be presented to the Parties by JAMS. Neither Party shall
engage in ex parte contact with the Arbitrators.

 

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(ii)         Proceedings.
The time periods set forth in the applicable JAMS rules shall be followed, unless a Party can demonstrate to the Arbitrators that
the complexity of the issues or other reasons warrant the extension of one or more of the time tables. Notwithstanding the foregoing,
the Arbitrators shall render a written opinion setting forth findings of fact and conclusions of law with the reason therefor stated
within no later than six (6) months from the date on which the Arbitrators were appointed to the dispute. A transcript of the evidence
adduced at the hearing shall be made and, upon request, shall be made available to each Party. The Arbitrators shall, in rendering
their decision, apply the substantive law of the State of New York and the federal law of the U.S., in each case without regard
to conflict of laws provisions, except that the interpretation of and enforcement of this Section 15.11 shall be governed by the
Federal Arbitration Act. The Arbitrator shall apply the Federal Rules of Evidence to the hearing. The proceeding shall take place
in New York, New York, or such other location as the Parties may agree. The fees of the Arbitrators and JAMS shall be paid by the
losing Party, which shall be designated by the Arbitrator. If the Arbitrator is unable to designate a losing Party, it shall so
state and the fees shall be split equally between the Parties.

 

(iii)        Award.
Subject to Section 15.12, the Arbitrator is empowered to award any remedy allowed by law, including money damages, prejudgment
interest and attorneys’ fees, and to grant final, complete, interim, or interlocutory relief, including injunctive relief.

 

(iv)        Costs.
Except as set forth in Sections 15.11(d)(ii) and (iii) above, each Party shall bear its own legal fees and costs.

 

(v)         Confidentiality.
The Arbitration proceeding shall be confidential and the Arbitrators shall issue appropriate protective orders to safeguard each
Party’s Confidential Information. Except as required by law, no Party shall make (or instruct the Arbitrators to make) any
public announcement with respect to the proceedings or decision of the Arbitrators without prior written consent of each other
Party. The existence of any dispute submitted to Arbitration, and the award, shall be kept in confidence by the Parties and the
Arbitrators, except as required in connection with the enforcement of such award or as otherwise required by applicable law.

 

(vi)        Judgment;
Provisional Remedies. Any court of competent jurisdiction may enter judgment upon any award. The Parties consent to the jurisdiction
of the above-specified Court for the enforcement of these provisions and the entry of judgment on any award. Each Party has the
right before or during the arbitration to seek and obtain from the appropriate court provisional remedies such as attachment, preliminary
injunction, replevin, etc. to avoid irreparable harm, maintain the status quo, or preserve the subject matter of the arbitration.

 

(vii)       Language.
All pleadings, complaints and other documents filed or presented in connection with, and all proceedings in, any dispute resolution
proceeding described in this Section 15.11 must be in the English language.

 

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15.12         Injunctive
Relief. Each Party shall be entitled to seek injunctive relief to enforce the respective covenants and agreements of the Parties
in this Agreement, including, without limitation, the respective rights and obligations of the Parties under Articles 5, 8 and
10.

 

15.13         Nature
of Licenses. All rights and licenses granted pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes
of 11 U.S.C. § 365(n) of the Bankruptcy Laws, licenses of rights to “intellectual property” as defined under
11 U.S.C. § 101(35A) of the Bankruptcy Laws. The Parties agree that Aytu, as a licensee of such rights under this Agreement,
shall retain and may fully exercise all of its rights, including any right to enforce any exclusivity provision of this Agreement,
remedies, and elections under Bankruptcy Laws. To the fullest extent permitted by law, the Parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or against Acerus under the Bankruptcy Laws, Aytu shall be entitled to
all applicable rights under 11 U.S.C. § 365(n) of the Bankruptcy Laws, including copies and access to, as appropriate, any
such intellectual property and all embodiments of such intellectual property upon written request therefor by Aytu, and such,
if not already in its possession, shall be promptly delivered to Aytu.

 

15.14         Waiver
of Jury Trial. EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY.

 

15.15         Limitation
of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS OR FOR ANY SPECIAL, INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, ARISING UNDER ANY CAUSE OF ACTION AND ARISING IN ANY WAY OUT OF THIS AGREEMENT. THE FOREGOING
LIMITATION WILL NOT LIMIT EITHER PARTY’S INDEMNIFICATION OBLIGATIONS TO THE OTHER PARTY IN RESPECT OF ANY THIRD PARTY CLAIM
OR UNDER ARTICLE 13 OR OF ARTICLE 10.

 

15.16         Survival.
Sections 7.1(b), 7.2(b), 7.8, 8.2, 12.3, 14.2, and 14.3, and ARTICLE 9, 0, ARTICLE 13 and ARTICLE 15 shall survive any termination
or expiration of this Agreement.

 

15.17         No
Waiver. The failure of either Party to enforce at any time for any period the provisions of or any rights deriving from this
Agreement shall not be construed to be a waiver of such provisions or rights or the right of such Party thereafter to enforce
such provisions.

 

15.18         Counterparts.
This Agreement may be executed in one or more counterparts, and by the respective Parties in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken together shall constitute one and the same Agreement.

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

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IN WITNESS WHEREOF,
the Parties hereto have caused this Agreement to be executed as of the date first written above by their respective duly authorized
officers.

 

	 	ACERUS PHARMACEUTICALS SRL
	 	 
	 	By:	                               
	 	 	 
	 	Name: 	 
	 	 	 
	 	Title:	 
	 	 
	 	AYTU BIOSCIENCE, INC.
	 	 
	 	By:	 
	 	 	 
	 	Name:	 
	 	 	 
	 	Title:	 

 

[Signature Page to License and Supply Agreement]

 

    52

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