CTXR Citius Pharmaceuticals Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) August 12, 2024

 

 

Citius Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

 

 

Nevada

(State or other jurisdiction of incorporation)

 

001-38174		27-3425913
(Commission File Number)		(IRS Employer Identification No.)
11 Commerce Drive, 1st Floor, Cranford, NJ		07016
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code (908) 967-6677

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, $0.001 par value		CTXR		The Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Introductory Note

 

As previously reported, on October 23, 2023, Citius Pharmaceuticals, Inc. (“Citius Pharma”) and Citius Oncology, Inc. (“SpinCo”), a wholly owned subsidiary of Citius Pharma, entered into an agreement and plan of merger and reorganization (the “Merger Agreement”) with TenX Keane Acquisition, a Cayman Islands exempted company (“TenX”), and TenX Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of TenX (“Merger Sub”).

 

On August 12, 2024, pursuant to the terms and conditions of the Merger Agreement, Merger Sub merged with and into SpinCo, with SpinCo surviving as a wholly owned subsidiary of TenX (the “Merger”). Prior to closing of the Merger (the “Closing”), TenX migrated to and domesticated as a Delaware corporation in accordance with Section 388 of the General Corporation Law of the State of Delaware and the Cayman Islands Companies Act (As Revised) (the “Domestication”). As part of the Domestication, TenX changed its name to “Citius Oncology, Inc.” (“Citius Oncology”). Immediately after the closing of the Merger, Citius Pharma owns approximately 92.6% of the outstanding shares of common stock of Citius Oncology.

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Amended & Restated Shared Services Agreement

 

On August 12, 2024, in connection with the Closing and as contemplated by the Merger Agreement, Citius Pharma and Citius Oncology entered into an amended and restated shared services agreement (the “Shared Services Agreement”), which, among other things, governs certain management and scientific services that Citius Pharma provides Citius Oncology, and is similar to the agreement in place between Citius Pharma and Citius Oncology prior to the Closing of the Merger.

 

The foregoing description of the Shared Services Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Shared Services Agreement, a form of which is attached as Exhibit 10.1 hereto, and the terms of which are incorporated herein by reference.

 

Amended &Restated Registration Rights Agreement

 

On August 12, 2024, in connection with the Closing and as contemplated by the Merger Agreement, Citius Pharma, Citius Oncology and 10XYZ Holdings LP, a Delaware limited partnership and shareholder of TenX (the “Sponsor”) entered into the Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”). Pursuant to the A&R Registration Rights Agreement, the holders of Registrable Securities (as such term is defined in the A&R Registration Rights Agreement) will be entitled to up to three demand registrations, which will require Citius Oncology to effect the registration of all Registrable Securities as requested by the Demanding Holders and Requesting Holders (as such terms are defined in the A&R Registration Rights Agreement) within 60 days of receipt of such demand registration. In addition, the holders of Registrable Securities have certain customary “piggyback” registration rights with respect to registration statements filed subsequent to the completion of the Merger. In addition, Citius Oncology agreed to use its commercially reasonable efforts to file a registration statement for the resale of any or all of an individual Demand Holder’s Registrable Securities, as requested in writing by such Demand Holder, within 120 days of the date of the A&R Registration Rights Agreement. An aggregate of 65,627,262 shares of Citius Oncology held by Citius Pharma are covered by the A&R Registration Rights Agreement.

 

Additionally, pursuant to the A&R Registration Rights Agreement, the Sponsor and Citius Pharma have restrictions on transferring shares of Citius Oncology (or any security convertible into, or exercisable or exchangeable for shares of Citius Oncology) beginning at Closing until the date that is six months after Closing; provided that the restrictions may be lifted early if (i) the price of the Citius Oncology shares equals or exceeds $12.00 per share for any 20 trading days within any 30-day trading period, or (ii) Citius Oncology completes a transaction that results in public shareholders having the right to exchange their Citius Oncology shares for cash, securities or other property.

 

 

The foregoing description of the A&R Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the A&R Registration Rights Agreement, a form of which is attached as Exhibit 10.2 hereto, and the terms of which are incorporated herein by reference.

 

Letter Agreement to the Merger Agreement

 

On August 12, 2024, in connection with the Closing, the parties to the Merger Agreement entered into a letter agreement waiving certain closing conditions of the Merger Agreement (the “Letter Agreement”). Certain closing conditions that were waived by the parties, pursuant to the Merger Agreement, include, but are not limited to: (i) Section 7.18(a) and 7.18(b), which (a) required Citius Pharma to transfer the LYMPHIRTM (denileukin diftitox) trademark to the Company prior to Close and (b) required Citius Pharma to send a letter notifying the FDA that all ownership rights of the BLA and IND will transfer from the Citius Pharma to Citius Oncology within five business days of Citius Pharma’s receipt of the Notice of Approval for LYMPHIR from the U.S. Food & Drug Administration, which transfers will instead occur within 60 days following the Closing, and (ii) Section 2.3(f), which waiver provided that the $10,000,000 in cash Citius Pharma contributed to the Company was to be comprised of $3,800,111 in working capital of Citius Oncology post-Closing, funding $6,199,889 of transaction expenses of the parties to the Merger Agreement, and $1,077,026 for the purchase of TenX rights prior to the Closing of the transaction (which converted into 422,353 shares of Citius Oncology common stock at Closing).

 

The foregoing description of the Letter Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Letter Agreement, a form of which is attached as Exhibit 10.3 hereto, and the terms of which are incorporated herein by reference.

 

Promissory Note between the Company and Citius Pharma

 

The information set forth in “Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant” below is incorporated into this Item 1.01 by reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

Following the Merger, on August 12, 2024, Citius Pharma made a capital contribution to Citius Oncology $3,800,111 for operating expenses and general working capital purposes, for which Citius Oncology issued a promissory note to Citius Pharma, dated August 16, 2024 (the (“Promissory Note”). The Promissory Note bears no interest and is repayable in full upon a financing of at least $10 million by Citius Oncology, per the terms of the Promissory Note.

 

The foregoing description of the Promissory Note does not purport to be complete and is qualified in its entirety by the terms and conditions of the Promissory Note, a form of which is attached as Exhibit 10.4 hereto, and the terms of which are incorporated herein by reference.

 

Item 8.01 Other Events.

 

On August 12, 2024, Citius Pharma issued a press release announcing the closing of the Merger. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

  

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

The following exhibit is filed herewith:

 

Exhibit No.		Description
10.1		Amended and Restated Shared Services Agreement, dated August 12, 2024, between Citius Pharmaceuticals, Inc. and Citius Oncology, Inc.
10.2		Amended and Restated Registration Rights Agreement, dated as of August 12, 2024 by and between Citius Oncology, Inc. and the signatories thereto.
10.3		Side Letter Agreement, dated August 12, 2024, by and by and among Citius Pharmaceuticals, Inc., Citius Oncology, Inc., TenX Keane Acquisition and TenX Merger Sub, Inc
10.4		Promissory note, dated August 16, 2024, issued to Citius Pharmaceuticals, Inc. by Citius Oncology, Inc.
99.1		Press Release dated August 12, 2024.
104		Cover Page Interactive Date File (embedded within the Inline XBRL document).

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	CITIUS PHARMACEUTICALS, INC.
Date: August 16, 2024	/s/ Leonard Mazur
	Leonard Mazur
	Chairman and Chief Executive Officer

 

 

4

 

 

Exhibit 10.1

 

EXECUTION VERSION

 

AMENDED AND RESTATED SHARED SERVICES AGREEMENT

 

THIS AMENDED AND RESTATED SHARED SERVICES AGREEMENT (this “Agreement”) is made as of August 9, 2023, by and between Citius Oncology Sub, Inc., a Delaware corporation (the “Company”), and Citius Pharmaceuticals, Inc, a Delaware corporation (“Citius”) (the Company and Citius may be referred to herein individually as a “Party” or collectively as the “Parties”).

 

WHEREAS, prior to the effectiveness of the Merger (as defined below) Citius owned 100% of the outstanding equity of the Company;

 

WHEREAS, the Parties have entered into an Agreement and Plan of Merger and Reorganization by and among Citius, the Company, TenX Keane Acquisition (“TenX”), and TENX MERGER SUB, INC. (“Merger Sub”) dated as of October 23, 2023 (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving the merger as the surviving corporation (the “Merger”);

 

WHEREAS, as of time the Merger becomes effective pursuant to the Merger Agreement (the “Effective Time”), Citius will own at least 80% of the outstanding equity of TenX (which will be renamed Citius Oncology, Inc.);

 

WHEREAS, the Parties are entering into this Agreement concurrently with the closing of the Merger;

 

WHEREAS, in connection with the closing of the Merger, the Company has been renamed from Citius Oncology, Inc. to Citius Oncology Sub, Inc.;

 

WHEREAS, the Company does not have any employees, office space or operations of its own and does not expect to for the foreseeable future;

 

WHEREAS, on the terms and subject to the conditions contained in this Agreement, the Company desires to obtain certain management and scientific services from Citius, and Citius has agreed to perform such management and scientific services;

 

WHEREAS, the Company has requested, and Citius has agreed, for Citius to provide administrative and scientific services to the Company, pursuant to the terms of this Agreement; and

 

WHEREAS, this Agreement has been approved by the Company’s Board of Directors and by Citius’s Board of Directors.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

 

1. Effectiveness. Effective as of the Effective Time, this Agreement hereby amends, restates, and replaces in its entirety the Shared Services Agreement between Citius and the Company dated as of April 1, 2022 (the “Original Agreement”).

 

 

2. Management and Scientific Services.

 

2.1 Services. Subject to any limitations imposed by applicable law or regulation, Citius shall render or cause to be rendered management and scientific services to the Company, which services may include advice and assistance concerning any and all aspects of the operations, executive management, pre-clinical and clinical trials, regulatory development, manufacturing and the regulatory approval process, accounting, financial planning and strategic transactions and financings of the Company and conducting relations on behalf of the Company with accountants, attorneys, financial advisors and other professionals (collectively, the “Services”). Exhibit A sets forth the Services Citius will provide to the Company as of the Effective Time, which Services are substantially similar to the Services provided or procured by Citius and used in the operation of the business of the Company immediately prior to the Effective Time. Citius shall provide and devote to the performance of this Agreement such employees and agents of Citius as Citius shall deem appropriate to the furnishing of the Services hereunder.

 

Citius shall devote such time and efforts to the performance of Services contemplated hereby as Citius deems reasonably necessary or appropriate; provided, however, that no minimum number of hours is required to be devoted by Citius on a weekly, monthly, annual or other basis. The Company acknowledges that Citius’s Services are not exclusive to the Company and that Citius may render similar Services to other persons and entities.

 

Citius covenants that the Services will be performed in a diligent, timely, efficient, workmanlike and commercially reasonable manner and in a fashion designed to support the business of the Company in substantially the same manner and to substantially the same standard as the business is conducted prior to the Effective Time, and, with respect to specific Services, in accordance with the standards, if any, set forth on Exhibit A with respect to such Services or as otherwise agreed. In performing the Services, Citius agrees that part of its responsibilities shall be to review, to the extent applicable, the regulations and laws applicable to the Services to be provided hereunder, and to reflect any such regulations, laws or requirements in the performance of Services to the Company.

 

Citius may change operational aspects of the Services or the way in which they are provided, or substitute them with other services, so long as the Services are provided or procured to substantially the same standards as they were provided immediately prior to the Effective Time. If changes or substitutions are made, Citius shall use reasonable efforts so that:

 

(i)

the Services are not disrupted; and

 

(ii)

the change or substitution does not result in an increase in the Service Fees, unless the Company has agreed to the increase in advance.

 

2.2 Freedom to Pursue Opportunities and Limitation on Liability.

 

2.2.1 Freedom to Pursue Opportunities. In recognition that the Company and Citius and its wholly owned and partly owned subsidiaries engage and may in the same or similar activities or lines of business and have an interest in the same general areas of corporate opportunities, and in recognition of the benefits to be derived by the Company hereunder, each of the Company and Citius wish to guide the conduct of certain affairs of the Company as they may involve Citius.

 

Except as Citius may otherwise agree in writing after the date hereof:

 

(i)

Citius will have the right: (A) to directly or indirectly engage in any business including, without limitation, any business activities or lines of business that are the same as the Company’s or its affiliates or similar to those pursued by the Company or its affiliates, or (B) to directly or indirectly do business with any client or customer of the Company or its affiliates; provided that Citius does not compete with the Company in the area of developing treatments for cutaneous T-cell lymphoma or peripheral T-cell lymphoma, immuno-oncology treatments and other oncology treatments;

 

 

(ii)

Citius will have no duty (contractual or otherwise) to communicate or present any corporate opportunities to the Company that do not violate this Section 2.2.1

 

(iii)

Neither Citius nor any officer, director, employee, partner, member, stockholder, affiliate or associated entity thereof will be liable to the Company or its affiliates for breach of any duty (contractual or otherwise) by reason of any activities or omissions of the types referred to in this Section 2.2.1 or of any such person’s participation therein.

 

3. Term. Citius shall provide the Services set forth in Section 2 above from the Effective Time until the earlier of (a) termination of this Agreement by mutual agreement of Citius and the Company and (b) the 2^nd anniversary of this Agreement; provided that this Agreement shall be automatically extended for additional one-year periods unless Citius or the Company provides written notice of its desire not to automatically extend the term of this Agreement to the other Parties hereto at least thirty (30) days prior to such date (such period, the “Term”).

 

No termination of this Agreement, whether pursuant to this Section 3 or otherwise, will affect the Company’s duty to pay any Service Fee (as defined herein in Section 4) accrued, or to reimburse any cost or expense incurred pursuant to Section 5 hereof, prior to the effective date of such termination. Upon termination of this Agreement, Citius’s right to receive any further Service Fee or reimbursement for costs and expenses that have not accrued or been incurred to the date of termination shall cease and terminate. Additionally, the obligations of the Company under Section 5 (Expenses), Section 7 (Indemnification), the provisions of Section 2.2.2 above (whether in respect of or relating to Services rendered prior to termination of this Agreement or in respect of or relating to any Services provided after termination of this Agreement), the provisions of Section 9 (Confidentiality) (for the term provided therein) and the provisions of Section 21 (Governing Law) will also survive any termination of this Agreement to the maximum extent permitted under applicable law.

 

4. Compensation.

 

4.1 The Company and Citius agree that the compensation set forth in this Agreement is being paid to Citius in consideration of the Services provided and the substantial commitment and effort made by Citius hereunder, and that such fees have been negotiated at arms’ length and are fair, reasonable and consistent with fair market value. Citius shall be paid a quarterly fee (the “Service Fee”) as set forth on Exhibit A hereto, which may be amended from time to time upon mutual agreement of the Parties.

 

4.2 Unless otherwise agreed by the Parties in writing, any payment pursuant to this Section 4 shall be made in cash by wire transfer(s) of immediately available funds to or among one or more accounts as designated from time-to-time by Citius to the Company in writing. Citius’s Service Fee will be invoiced quarterly, in arrears, and the Company shall pay all invoices within thirty (30) days of the date of such invoice.

 

4.3 It is hereby acknowledged that the Company shall have no payment obligations hereunder other than as set forth in this Section 4 and in Section 5 for the Services to be performed hereunder (including, without limitation, the Services as set forth on Exhibit A attached hereto), and the Company’s indemnity obligations to Citius under Section 7.

 

4.4 In the event any Service is terminated other than at the end of a payment period under the applicable underlying arrangement, such period’s associated costs shall be pro-rated based on the number of days in such period prior to the termination date.

 

 

5. Expenses. Actual and direct out-of-pocket expenses reasonably incurred by Citius and its personnel in performing the Services shall be reimbursed to Citius by the Company upon the delivery to the Company of an invoice, receipt or such other supporting data as the Company reasonably shall require. Unless otherwise agreed by the Parties in writing, the Company shall reimburse Citius by wire transfer of immediately available funds for any amount paid by Citius, which shall be in addition to any other amount payable to Citius under this Agreement.

 

6. Independent Contractor. Citius shall act solely as an independent contractor and shall have complete charge of its respective personnel engaged in the performance of the Services under this Agreement. Neither Citius nor its officers, employees or agents will be considered employees or agents of the Company as a result of this Agreement. As an independent contractor, Citius shall have authority only to act as an advisor to the Company and shall have no authority to enter into any agreement or to make any representation, commitment or warranty binding upon the Company or to obtain or incur any right, obligation or liability on behalf of the Company. Nothing contained in this Agreement shall result in Citius or any of its affiliates or their respective directors, officers, employees or agents being a partner, joint venturer, principal, agent, fiduciary or beneficiary of the Company.

 

7. Indemnification.

 

7.1 Indemnification. Subject to the applicable limitations set forth in this Section 7, the Company shall indemnify Citius, its affiliates (other than the Company or TenX) and their respective directors, officers, employees and agents (collectively, the “Citius Indemnified Party”), to the fullest extent permitted by law, from and against any and all actions, causes of action, suits, claims, liabilities, losses, damages and costs and expenses in connection therewith, including without limitation reasonable attorneys’ fees and expenses (“Indemnified Liabilities”) to which the Citius Indemnified Party may become subject, directly or indirectly caused by, related to or arising out of the Services or any other advice or Services contemplated by this Agreement or the engagement of Citius pursuant to, and the performance by Citius of the Services contemplated by, this Agreement.

 

7.2 Subject to the applicable limitations set forth in this Section 7, Citius shall indemnify the Company, its affiliates (other than Citius) and their respective directors, officers and employees (collectively, the “Company Indemnified Party”), harmless from and against any and all Indemnified Liabilities to which the Company Indemnified Party may become subject, directly or indirectly caused by, related to or arising out based upon or related to the Services performed for the Company hereunder to the extent that any such Indemnified Liabilities were the result of, arise out of, or are based upon, (i) a breach of the provisions of this Agreement caused by the gross negligence or intentional misconduct of Citius, or (ii) any action or inaction of Citius, its affiliates or its third party contractors providing the Services, or their respective directors, officers, employees, contractors or agents at the request, at the direction, or with the consent, of the Company or any of its directors, officers, employees, representatives or agents.

 

7.3 An indemnifying party shall promptly reimburse the respective Indemnified Party for Indemnified Liabilities as incurred, in connection with the investigation of, preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party and whether or not such claim, action or proceeding is initiated or brought by or on behalf of the Company or Citius and whether or not resulting in any liability. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Parties hereby agree to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law.

 

 

7.4 Limited Liability. In no event shall either Party be liable under any provision of this Agreement to each or each other’s respective affiliates, directors, officers, employees or agents for indirect, special, incidental, consequential (including, without limitation, lost profits or savings, whether or not such damages are foreseeable) or punitive damages; provided, however, that this limitation shall not apply to any indirect, incidental, consequential (including lost profits) or punitive damages asserted or awarded to any third party for which Citius would otherwise be responsible under Section 7.2; provided, further, however, that Citius’s aggregate liability for all claims brought by the Company hereunder shall be limited to the total fees paid to Citius for the Services provided to the Company through the date of any claim, whether or not such claim arose under this Agreement or the Original Agreement.

 

7.5 An indemnifying party shall not be liable under the indemnification contained in Section 7.1 or 7.2, as applicable, hereof with respect to an Indemnified Party to the extent that such Indemnified Liabilities are found in a final non-appealable judgment by a court of competent jurisdiction to have resulted directly from the Indemnified Party’s willful misconduct or gross negligence. The Parties further agree that no Indemnified Party shall have any liability (whether direct or indirect, in contract, tort or otherwise) to such Indemnified Party’s securities holders or creditors related to or arising out of the engagement of Citius pursuant to, or the performance by Citius of the Services contemplated by, this Agreement.

 

8. Employee Matters. Citius shall at all times remain the employer of all of its employees performing the Services and Citius shall perform all of the responsibilities of an employer under applicable federal, state, and local laws and regulations. Citius, as relates to its employees performing Services, shall be responsible for: (i) selecting and hiring its employees legally, including compliance with all applicable laws in connection therewith; (ii) the supervision, direction and control of its employees performing Services; (iii) paying its employees’ wages and other benefits in accordance with applicable laws; (iv) paying or withholding all required payroll taxes and mandated insurance premiums; (v) providing worker’s compensation coverage for employees as required by law; (vi) fulfilling the employer’s obligations with respect to unemployment compensation; and (vii) any and all claims of its employees and other personnel arising out of this Agreement or performance of the Services. Citius shall indemnify, defend and hold harmless the Company from any third-party claim resulting from a breach by Citius of the foregoing obligations, including, without limitation, any claims made by Citius’s personnel against the Company alleging rights or benefits as an employee of the Company.

 

9. Confidentiality. Citius or the Company (the “Disclosing Party”) may provide the other Party (the “Receiving Party”) with certain confidential and proprietary information (“Confidential Information”). Confidential Information of a Party hereto includes, but is not limited to, its product specifications and technical data, product designs/ideas, market/sales forecasts and information, proprietary materials, suppliers, tooling, all business trade secrets, financial and accounting data, customers and prospective customers, pricing information, and know-how. However, “Confidential Information” does not include information that (i) is publicly known at the time of its disclosure or becomes publicly known thereafter through no fault of the Receiving Party, (ii) is lawfully received by the Receiving Party from a third party not under an obligation of confidentiality to the Disclosing Party, (iii) is published or otherwise made known to the public by the Disclosing Party, or (iv) was generated independently by the Receiving Party without the use of the Confidential Information provided by the Disclosing Party.

 

 

The Receiving Party will refrain from using the Disclosing Party’s Confidential Information for any purpose other than in connection with providing the Services contemplated by this Agreement. The Receiving Party may only disclose the Disclosing Party’s Confidential Information to the Receiving Party’s officers, directors, key employees, and financial and legal advisors (collectively, “Representatives”) who have the need to know such Confidential Information in order for the Receiving Party to perform its obligations under this Agreement. Such Representatives will be informed of and will agree to be bound by the provisions of this Section (or other terms and conditions that are no less protective of the Discloser’s Confidential Information than the terms herein), and the Receiving Party will remain responsible for any unauthorized use or disclosure of the Disclosing Party’s Confidential Information by its Representatives. The Receiving Party may also disclose the Disclosing Party’s Confidential Information pursuant to the requirement or request of a governmental agency, a court or administrative subpoena, or an order or other legal process or requirement of law so long as it shall (i) first notify the Disclosing Party of such request or requirement, (ii) in the case of a required disclosure, furnish only such portion of the Disclosing Party’s Confidential Information as it is advised in writing by counsel that it is legally required to disclose, and (iii) cooperate with the Disclosing Party in its efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to that portion of the Disclosing Party’s Confidential Information that is required to be disclosed.

 

Within seven (7) days after the termination or expiration of this Agreement or after written request of the Disclosing Party, the Receiving Party shall promptly (i) return or destroy all Confidential Information of the Disclosing Party and all copies thereof, (ii) destroy all of its files and memoranda prepared based on the Disclosing Party’s Confidential Information, and (iii) provide the Disclosing Party with a written certification that all such information and materials have been returned or destroyed. Notwithstanding the foregoing, the Receiving Party may retain archival copies of the Disclosing Party’s Confidential Information in accordance with policies and procedures designed to comply with legal, regulatory, and professional requirements, solely to demonstrate compliance therewith. This Section 9 shall survive the expiration or termination of this Agreement for a period of three (3) years; provided, however, that for any Confidential Information that constitutes a trade secret (as defined by applicable law), the obligations of this Section 9 shall survive until such Confidential Information is no longer a trade secret.

 

10. Intellectual Property.

 

10.1 Intellectual Property. Except as expressly set forth in Section 10.2, solely as between the Parties, all right, title and interest in and to all intellectual property, including, without limitation, each and every invention, discovery, design, drawing, protocol, process, technique, formula, trade secret, device, compound, substance, material, pharmaceutical, method, software program (including, without limitation, object code, source code, flow charts, algorithms and related documentation), listing, routine, manual and specification, whether or not patentable or copyrightable, that are made, developed, perfected, designed, conceived or first reduced to practice, either solely or jointly with others in the performance of the Services conducted under this Agreement or the Original Agreement by Citius’s employees, agents, consultants, subcontractors or other representatives, but specifically excluding Citius Background Technology (as defined below), (collectively “Work Product”), will be owned solely by the Company, and Citius hereby assigns to the Company any and all rights that Citius may have in the Work Product. Citius represents and warrants to the Company that each employee, agent, consultant and subcontractor of Citius providing Services hereunder is obligated to assign all of his/her/its right, title and interest in and to Work Product to Citius. Citius and all employees, agents, consultants and subcontractors of Citius shall execute and deliver to the Company all writings and do all such things as may be necessary or appropriate to vest in the Company all right, title and interest in and to Work Product. Citius shall disclose to the Company in a timely manner any Work Product arising under this Agreement or the Original Agreement. Excluding Citius’s Background Technology (as defined in Section 10.2), the Company may, in its sole discretion, file and prosecute in its own name and at its own expense, patent applications on any patentable inventions within the Work Product. Upon the request of the Company, and at the Company’s expense, Citius will assist the Company in the preparation, filing and prosecution of such patent applications and will execute and deliver any and all instruments necessary to effectuate the ownership of such patent applications and to enable the Company to file and prosecute such patent applications in any country.

 

 

10.2 Citius Background Technology. Notwithstanding anything to the contrary contained in this Agreement or the Original Agreement, Work Product shall exclude (a) any Citius proprietary technology existing prior to April 1, 2022 or that is developed or acquired by Citius independent of the Services performed pursuant to this Agreement or the Original Agreement and (b) any modifications, enhancements or improvements to any of the foregoing that are or were developed by Citius in the course of performing the Services (collectively, “Citius Background Technology”), and, as between the Parties, all Citius Background Technology shall be and remain the sole and exclusive property of Citius. Citius hereby grants the Company a non-exclusive, perpetual, irrevocable, worldwide, royalty-free license, including the right to sublicense through multiple tiers of sublicense, to use the Citius Background Technology that is embodied within the Work Product solely if and to the extent necessary for the exploitation of the Work Product. For clarity, Work Product shall not include any industry know-how that is created by Citius hereunder which is broadly applicable to the businesses of both Citius and the Company at the time of creation, such as processes, techniques and methods.

 

10.3 Force Majeure. Neither Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations to make payments to the other Party hereunder), when and to the extent such failure or delay is caused by or results from acts beyond the impacted Party’s (“Impacted Party”) reasonable control, including, without limitation, the following force majeure event (“Force Majeure”): (a) acts of God; (b) flood, fire, earthquake, other potential disasters or catastrophes, such as epidemics, pandemics, or quarantines, or explosion; (c) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot, or other civil unrest; (d) government order, law, or actions; (e) embargoes, or blockades in effect on or after the date of this Agreement; (f) national or regional emergency; (g) strikes, labor stoppages or slowdowns, or other industrial disturbances; (h) shortage of adequate power or transportation facilities; and (i) any other similar events or circumstances beyond the reasonable control of the Impacted Party. Notwithstanding the foregoing, the Impacted Party will use good faith efforts to complete performance or correct any default or breach upon removal of any Force Majeure event that caused such delay in performance, default or breach.

 

11. Reports and Records. Citius shall, upon request from the Company, and within a reasonable amount of time, provide the Company with a detailed report of Services performed on its behalf. Citius shall, upon request from the Company, and within a reasonable amount of time, provide the Company with copies of documents relevant to this Agreement and the Services and reasonably required or requested by the Company, including without limitation books, records and accounts. The Parties shall maintain records of all costs and expenses incurred and shared pursuant to this Agreement in a manner that satisfies the record keeping requirements of federal income tax regulations and generally accepted accounting principles.

 

12. Non-solicitation. The Parties agree that during the term of this Agreement and for a period of twenty-four (24) months following the termination or expiration of this Agreement, neither Party shall directly or indirectly solicit, hire, recruit, or attempt to do so, any of the employees of the other Party without written consent of the other Party; provided, however, this Section 13 shall not preclude either Party from (A) making general or public solicitations not targeted at any employees of the other Party or (B) hiring any such employee of the other Party who has ceased being an employee, consultant or independent contractor for at least twelve (12) months.

 

13. Covenants. Each Party represents, warrants and covenants to the other Party that: (i) such Party has the full power and authority to enter into this Agreement and to perform its obligations hereunder, without the need for any consents; and (ii) such Party’s execution of and performance under this Agreement shall not breach any oral or written agreement with any third party or any obligation owed by the Party to any third party.

 

 

14. Notices. All notices, demands, or other communications to be given or delivered by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given or made when (i) delivered personally to the recipient, (ii) telecopied to the recipient (with a hard copy sent to the recipient by reputable overnight courier service (charges prepaid)) if telecopied before 5:00 p.m. Eastern Standard Time on a business day, and otherwise on the next business day, (iii) one (1) business day after being sent to the recipient by reputable overnight courier service (charges prepaid) or (iv) received via electronic mail by the recipient if received via electronic mail before 5:00 p.m. Eastern Standard Time on a business day, and otherwise on the next business day after such receipt. Such notices, demands and other communications shall be sent to the address for such recipient indicated below or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

 

Notices to Citius

 

11 Commerce Drive, 1^st Floor

Cranford, NJ 07016

Attn: Leonard Mazur - CEO

lmazur@citiuspharma.com

 

Notices to the Company:

 

11 Commerce Drive, 1^st Floor

Cranford, NJ 07016

Attn: Jaime Bartushak - CFO

jbartushak@citiuspharma.com

 

15. Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the Parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the Parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any such terms, provisions, covenants and restrictions which may be hereafter declared invalid, illegal, void or unenforceable.

 

16. Entire Agreement. This Agreement and the Merger Agreement contain the entire understanding of the Parties with respect to the subject matter hereof and supersede any prior communication or agreement with respect thereto.

 

17. Counterparts. This Agreement may be executed in multiple counterparts, and any Party may execute any such counterpart, each of which when executed and delivered will thereby be deemed to be an original and all of which counterparts taken together will constitute one and the same instrument. The delivery of this Agreement may be effected by means of an exchange of facsimile or portable document format (.pdf) signatures.

 

18. Amendments and Waiver. No amendment or waiver of any term, provision or condition of this Agreement will be effective, unless in writing and executed by both the Company and Citius. No waiver on any one occasion will extend to, effect or be construed as a waiver of any right or remedy on any future occasion. No course of dealing of any person nor any delay or omission in exercising any right or remedy will constitute an amendment of this Agreement or a waiver of any right or remedy of any Party hereto.

 

 

19. Successors and Assigns. All covenants and agreements contained in this Agreement by or on behalf of any of the Parties hereto will bind and inure to the benefit of the respective successors and permitted assigns of the Parties hereto whether so expressed or not. Neither the Company nor Citius may assign its rights or delegate its obligations hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld.

 

20. Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.

 

21. Waiver of Jury Trial. To the extent not prohibited by applicable law which cannot be waived, each of the Parties hereto hereby waives, and covenants that it will not assert (whether as plaintiff, defendant or otherwise), any right to trial by jury in any forum in respect of any issue, claim, demand, cause of action, action, suit or proceeding arising out of or based upon this Agreement or the subject matter hereof, in each case whether now existing or hereafter arising and whether in contract or tort or otherwise. Any of the Parties hereto may file an original counterpart or a copy of this Agreement with any court as written evidence of the consent of each of the Parties hereto to the waiver of its right to trial by jury.

 

22. Third Party Beneficiaries. This Agreement is not intended to confer on any person or entity except the Parties any rights or remedies hereunder.

 

23. No Strict Construction. The Parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties hereto, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

 

24. Headings: Interpretation. The headings in this Agreement are for convenience and reference only and shall not limit or otherwise affect the meaning hereof. The use of the word “including” in this Agreement will be by way of example rather than by limitation.

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Amended and Restated Shared Services Agreement as of the date first written above.

 

	COMPANY:   CITIUS ONCOLOGY SUB, INC.
	By:	/s/ Leonard Mazur
	Name:	Leonard Mazur
	Title:	Chief Executive Officer and Chairman of the Board
	CITIUS:
	CITIUS PHARMACEUTICALS, INC.
	By:	/s/ Leonard Mazur
	Name:	Leonard Mazur
	Title:	Chief Executive Officer and Chairman of the Board

 

[Signature Page to Amended and Restated Shared Services Agreement]

 

 

EXHIBIT A

 

SERVICES

 

 

 

 

Exhibit 10.2

 

EXECUTION VERSION

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of August 9, 2024, is made and entered into by and among (i) Citius Oncology, Inc., a Delaware corporation, formerly known as TenX Keane Acquisition, a Cayman Islands exempted company (the “Company”), (ii) the equityholders designated as Sponsor Equityholders on the signature page hereto (collectively, the “Sponsor Equityholders”); and (iii) Citius Pharmaceuticals, Inc. (the “Legacy Citius Oncology Equityholder” and, together with the Sponsor Equityholders and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 6.2 of this Agreement, the “Holders” and individually, a “Holder”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Merger Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Company and the Sponsor Equityholders are parties to that certain Registration Rights Agreement, dated as of October 13, 2022 (the “Prior Agreement”);

 

WHEREAS, the Company, TenX Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and Citius Oncology Sub, Inc., an entity formerly known as Citius Oncology, Inc., a Delaware corporation (“Legacy Citius Oncology”), are parties to that certain Agreement and Plan of Merger, dated as of October 23, 2023 (as amended or restated from time to time, the “Merger Agreement”), pursuant to which, on the date hereof, Merger Sub merged (the “Merger”) with and into Legacy Citius Oncology, with Legacy Citius Oncology surviving the Merger as a wholly owned subsidiary of the Company;

 

WHEREAS, the Legacy Citius Oncology Equityholder is receiving shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) on or about the date hereof, pursuant to the Merger Agreement (the “Merger Shares”);

 

WHEREAS, in connection with the consummation of the Merger, the parties to the Prior Agreement desire to amend and restate the Prior Agreement in its entirety as set forth herein, and the parties hereto desire to enter into this Agreement pursuant to which the Company shall grant the Holders certain registration rights with respect to the Registrable Securities (as defined below) on the terms and conditions set forth in this Agreement, effective as of the Closing; and

 

WHEREAS, pursuant to Section 5.5 of the Prior Agreement, no amendment, modification or termination of the Prior Agreement shall be binding upon any party unless executed in writing by such party.

 

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1 Definitions. Terms used, but not otherwise defined, shall have the meaning ascribed to them in the Merger Agreement. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:

 

“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.

 

 

“Agreement” shall have the meaning given in the Preamble.

 

“Block Trade” shall mean an offering and/or sale of Registrable Securities by any Holder on a block trade or underwritten basis (whether firm commitment or otherwise) without substantial marketing efforts prior to pricing, including, without limitation, a same day trade, overnight trade or similar transaction.

 

“Board” shall mean the Board of Directors of the Company.

 

“Change in Control” shall mean any transfer (whether by tender offer, merger, stock purchase, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons of the Company’s voting securities if, after such transfer, such person or group of affiliated persons would hold more than 50% of outstanding voting securities of the Company (or surviving entity) or would otherwise have the power to control the Board or to direct the operations of the Company.

 

“Code” shall have the meaning given in subsection 4.2.13.

 

“Commission” shall mean the Securities and Exchange Commission.

 

“Common Stock” shall have the meaning given in the Recitals.

 

“Company” shall have the meaning given in the Preamble.

 

“Demand Registration” shall have the meaning given in subsection 2.1.1.

 

“Demanding Holder” shall have the meaning given in subsection 2.1.1.

 

“EDGAR” shall have the meaning given in subsection 3.1.3.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.

 

“Form S-1” shall have the meaning given in subsection 2.1.1.

 

“Form S-3” shall have the meaning given in subsection 2.3.

 

“Founder Shares” shall mean the 1,650,000 shares of ordinary shares of the Company, which subsequently converted into 1,650,000 shares of Common Stock, issued to its initial stockholders prior to the Company’s initial public offering.

 

“Holder Information” shall have the meaning given in subsection 5.1.2.

 

“Holders” shall have the meaning given in the Preamble, for so long as such person or entity holds any Registrable Securities.

 

“Legacy Citius Oncology” shall have the meaning given in the Recitals.

 

“Lock-up” shall have the meaning given in Section 4.1.

 

“Lock-up Party” shall have the meaning given in Section 4.1.

 

“Lock-up Period” shall have the meaning given in Section 4.1.

 

“Maximum Number of Securities” shall have the meaning given in subsection 2.1.4.

 

“Merger” shall have the meaning given in the Recitals.

 

 

“Merger Agreement” shall have the meaning given in the Recitals.

 

“Merger Shares” shall have the meaning given in the Recitals.

 

“Merger Sub” shall have the meaning given in the Recitals.

 

“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading.

 

“Permitted Transferees” shall mean a person or entity to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities prior to the expiration of the Lock-up Period under this Agreement, and any other applicable agreement between such Holder and the Company, and to any transferee thereafter.

 

“Piggyback Registration” shall have the meaning given in subsection 2.2.1.

 

“Prior Agreement” shall have the meaning given in the Recitals.

 

“Private Placement Rights” shall mean the 394,000 rights to receive two-tenths (2/10) of one ordinary share issued by the Company that were part of the Private Placement Units which (i) subsequently converted into a right to receive two-tenths (2/10) of a share of Common Stock in connection with the Domestication and in accordance with the Merger Agreement and (ii) were automatically converted into whole shares of Common Stock at the Closing.

 

“Private Placement Shares” shall mean the 394,000 ordinary shares issued by the Company as part of the Private Placement Units and which subsequently converted into 394,000 shares of Common Stock in connection with the Domestication.

 

“Private Placement Units” shall mean the 394,000 units issued by the Company that were privately purchased simultaneously with the consummation of the Company’s initial public offering and for which each unit was comprised of one Private Placement Share and one Private Placement Right.

 

“Pro Rata” shall have the meaning given in subsection 2.1.4.

 

“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

 

“Registrable Security” shall mean (a) the Merger Shares, (b) the Founder Shares, (c) the shares of Common Stock issued upon the conversion of the Private Placement Rights at the Closing,² (d) the Private Placement Shares, (e) any outstanding Common Stock or any other equity security (including the shares of Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by a Holder as of the date of this Agreement, (f) any equity securities (including the Common Stock issued or issuable upon the exercise of any such equity security) of the Company issuable upon conversion of any working capital loans in an amount up to $1,500,000 made to the Company by a Holder, and (g) any other equity security of the Company issued or issuable with respect to any such Common Stock by way of a share dividend or share split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities shall have been otherwise transferred (other than to a Permitted Transferee), new certificates for such securities not bearing (or book entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; (D) such securities may be sold without registration pursuant to Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission) (but with no volume or other restrictions or limitations); or (E) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.

 

 

“Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

 

“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:

 

(A) all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Common Stock is then listed;

 

(B) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);

 

(C) printing, messenger, telephone and delivery expenses;

 

(D) reasonable fees and disbursements of counsel for the Company;

 

(E) reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and

 

(F) in an Underwritten Offering, reasonable fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders (not to exceed $50,000 without prior written consent of the Company).

 

“Registration Statement” shall mean any registration statement filed by the Company with the Commission that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

 

“Regulations” shall have the meaning given in subsection 4.2.13.

 

“Requesting Holder” shall have the meaning given in subsection 2.1.1.

 

“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

“Shelf” shall mean the Form S-1 Shelf, the Form S-3 Shelf or any subsequent Shelf Registration.

 

“Shelf Registration” shall mean a shelf registration of securities pursuant to a Registration Statement on Form S-1 or Form S-3 filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).

 

“Sponsor Equityholders” shall have the meaning given in the Preamble.

 

“Transfer” shall mean the (a) the sale or assignment of, offer to sell, contract or agreement to sell, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b).

 

“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.

 

 

“Underwritten Registration” or “Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.

 

ARTICLE II

 

REGISTRATIONS

 

2.1 Demand Registration.

 

2.1.1 Request for Registration. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, the Holders of at least a majority in interest of the then-outstanding number of Registrable Securities (the “Demanding Holders”) may make a written demand for Registration under the Securities Act of all or part of their Registrable Securities, which written demand shall describe the amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such written demand a “Demand Registration”). The Company shall, within ten (10) days of the Company’s receipt of the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s Registrable Securities in such Registration, a “Requesting Holder”) shall so notify the Company, in writing, within five (5) days after the receipt by the Holder of the notice from the Company. Upon receipt by the Company of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company shall effect, as soon thereafter as practicable, but not more than sixty (60) days immediately after the Company’s receipt of the Demand Registration, the Registration of all Registrable Securities requested by the Demanding Holders and Requesting Holders pursuant to such Demand Registration.

 

2.1.2 Effective Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement, a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and (ii) the Company has complied with all of its obligations under this Agreement with respect thereto; provided, further, that if, within six months after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect to continue with such Registration and accordingly notify the Company in writing, but in no event later than five (5) days, of such election; and provided, further, that the Company shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.

 

2.1.3 Underwritten Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if a majority-in-interest of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the majority-in-interest of the Demanding Holders initiating the Demand Registration.

 

 

2.1.4 Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand Registration, in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other shares of Common Stock or other equity securities that the Company desires to sell and shares of Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding Holders and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder and Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Registration (such proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders (Pro Rata, based on the respective number of Registrable Securities that each Holder has so requested) exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the Common Stock or other equity securities of other persons or entities that the Company is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.

 

2.1.5 Demand Registration Withdrawal. A majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest of the Requesting Holders (if any), pursuant to a Registration under subsection 2.1.1 shall have the right to withdraw from a Registration pursuant to such Demand Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant to such Demand Registration. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration as provided in Section 3.3 prior to its withdrawal under this subsection 2.1.5. If withdrawn, a Demand Registration shall constitute a demand for an Underwritten Offering by the withdrawing Demanding Holder for purposes of Section 2.1.1.

 

2.2 Piggyback Registration.

 

2.2.1 Piggyback Rights. If the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.1 hereof), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the Company, (iv) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (v) for a dividend reinvestment plan, or (vi) for a Block Trade, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration, the applicable “red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written notice (such Registration a “Piggyback Registration”). Subject to Section 2.2.2, the Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and, if applicable, shall use its commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.

 

 

2.2.2 Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of the shares of Common Stock or other equity securities that the Company desires to sell, taken together with (i) the shares of Common Stock or other equity securities, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant to Section 2.2 hereof, and (iii) the shares of Common Stock or other equity securities, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then:

 

(a) If the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (A) first, the shares of Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, Pro Rata, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other equity securities, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other stockholders of the Company, which can be sold without exceeding the Maximum Number of Securities;

 

(b) If the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration (A) first, the shares of Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, pro rata based on the number of Registrable Securities that each Holder has requested be included in such Underwritten Registration and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Registration, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other equity securities for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.

 

2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw or abandon a Registration Statement filed with the Commission or Shelf takedown in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration as provided in Section 3.2 prior to its withdrawal under this subsection 2.2.3.

 

 

2.2.4 Limitations on Registration Rights. Under no circumstances shall the Company be obligated to effect more than an aggregate of three (3) Registrations pursuant to a Demand Registration under Section 2.1 with respect to any or all Registrable Securities, provided that a Piggyback Registration under this Section 2.2 shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1.

 

2.3 Registrations on Form S-3. The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company, pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities on Form S-3 or any similar short form registration statement that may be available at such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such request through an Underwritten Offering. Within five (5) days of the Company’s receipt of a written request from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give written notice of the proposed Registration on Form S-3 to all other Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration on Form S-3 shall so notify the Company, in writing, within ten (10) days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter, but not more than sixty (60) days after the Company’s initial receipt of such written request for a Registration on Form S-3, the Company shall register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the written notification given by such Holder or Holders; provided, however, that the Company shall not be obligated to effect any such Registration pursuant to Section 2.3 hereof if (i) a Form S-3 is not available for such offering; or (ii) the Holders of Registrable Securities, together with the Holders of any other equity securities of the Company entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public of less than $10,000,000.

 

2.4 Restrictions on Registration Rights. If (A) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date of, a Company initiated Registration and provided that the Company has delivered written notice to the Holders prior to receipt of a Demand Registration pursuant to subsection 2.1.1 and it continues to actively employ, in good faith, all commercially reasonable efforts to cause the applicable Registration Statement to become effective; (B) the Holders have requested an Underwritten Registration and the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer; or (C) in the good faith judgment of the Board such Registration would be seriously detrimental to the Company and the Board concludes as a result that it is essential to defer the filing of such Registration Statement at such time, then in each case the Company shall furnish to such Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board it would be seriously detrimental to the Company for such Registration Statement to be filed in the near future and that it is therefore essential to defer the filing of such Registration Statement. In such event, the Company shall have the right to defer such filing for a period of not more than ninety (90) days.

 

ARTICLE III

 

COMPANY PROCEDURES

 

3.1 General Procedures. If the Company is required to effect the Registration of Registrable Securities pursuant to this Agreement, the Company shall use its commercially reasonable efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall:

 

3.1.1 prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold or have ceased to be Registrable Securities;

 

 

3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by the Holders or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus or have ceased to be Registrable Securities;

 

3.1.3 not later than five (5) days prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such holders, provided, that the Company shall have no obligation to furnish any documents publicly filed or furnished with the Commission pursuant to the Electronic Data Gathering Analysis and Retrieval System (“EDGAR”);

 

3.1.4 prior to any public offering of Registrable Securities, use its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence reasonably satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification) and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;

 

3.1.5 use its commercially reasonable efforts to cause all such Registrable Securities included in any registration to be listed on such exchanges or otherwise designated for trading in the same manner as similar securities issued by the Company are then listed or designated or, if no such similar securities are then listed or designated, in a manner satisfactory to the holders of a majority-in-interest of the Registrable Securities included in such registration;

 

3.1.6 provide a transfer agent as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;

 

3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;

 

3.1.8 notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;

 

3.1.9 permit a representative of the Holders (such representative to be selected by a majority of the participating Holders), the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;

 

 

3.1.10 obtain a “comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Registration which the participating Holders may rely on, in customary form and covering such matters of the type customarily covered by “comfort” letters for transactions of its type as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders;

  

3.1.11 on the date the Registrable Securities are delivered for sale pursuant to such Registration, to the extent customary for a transaction of its type, obtain an opinion, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters;

 

3.1.12 in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such offering;

 

3.1.13 make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission), and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-Q, 10-K or 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act;

 

3.1.14 if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $60,000,000, use its commercially reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in such Underwritten Offering; and

 

3.1.15 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, consistent with the terms of this Agreement, in connection with such Registration.

 

Notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter, broker, sales agent or placement agent if such Underwriter, broker, sales agent or placement agent has not then been named with respect to the applicable Underwritten Offering or other offering involving a Registration as an Underwriter, broker, sales agent or placement agent, as applicable.

 

3.2 Registration Expenses. Except as otherwise provided herein, the Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.

 

3.3 Requirements for Participation in Underwritten Offerings. Notwithstanding anything in this Agreement to the contrary, if any Holder does not provide the Company with its requested Holder Information, the Company may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that it is necessary or advisable to review such information prior to filing, or include such information in, the applicable Registration Statement or Prospectus and such Holder continues thereafter to withhold such information. In addition, no person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements.

 

 

3.4 Suspension of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as reasonably practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would (a) require the Company to make an Adverse Disclosure, (b) require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, or (c) in the good faith judgment of the majority of the Board such Registration, would be seriously detrimental to the Company and the majority of the Board concludes as a result that it is essential to defer such filing, initial effectiveness or continued use at such time, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time reasonably practicable, but in no event more than ninety (90) days, determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities until such Holder receives written notice from the Company that such sales or offers of Registrable Securities may be resumed, and in each case maintain the confidentiality of such notice and its contents. The Company shall as promptly as reasonably practicable notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.

  

3.5 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings; provided that any documents publicly filed or furnished with the Commission pursuant to EDGAR shall be deemed to have been furnished or delivered to the Holders pursuant to this Section 3.5. The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.

 

ARTICLE IV

 

LOCK-UP

 

4.1 Lock-up.

 

4.1.1 Except as permitted by Section 4.2, the Legacy Citius Oncology Equityholder and each Sponsor Equityholder (each, a “Lock-up Party”) shall not Transfer any shares of Common Stock or any security convertible into or exercisable or exchanged for Common Stock beneficially owned or owned of record by such Holder (the “Lock-up”) until the date that is the earlier of (A) six (6) months after the date hereof or (B) if the last sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the date hereof, or (y) the date following the date hereof on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of its stockholders having the right to exchange their shares of Common Stock for cash, securities or other property (the “Lock-up Period”).

 

4.2 Exceptions. The provisions of Section 4.1 shall not apply to:

 

4.2.1 transactions relating to shares of Common Stock or warrants acquired in open market transactions after the date hereof;

 

 

4.2.2 Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock as a bona fide gift or charitable contribution;

 

4.2.3 Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to a trust, family limited partnership or other entity formed for estate planning purposes for the primary benefit of the spouse, domestic partner, parent, sibling, child or grandchild of a Holder or any other person with whom a Holder has a relationship by blood, marriage or adoption not more remote than first cousin and Transfers to any such family member;

 

4.2.4 Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock by will or intestate succession or the laws of descent and distributions upon the death of a Holder (it being understood and agreed that the appointment of one or more executors, administrators or personal representatives of the estate of a Holder shall not be deemed a Transfer hereunder to the extent that such executors, administrators and/or personal representatives comply with the terms of this Article IV on behalf of such estate);

 

4.2.5 Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock pursuant to a qualified domestic order or in connection with a divorce settlement;

 

4.2.6 if a Holder is a corporation, partnership (whether general, limited or otherwise), limited liability company, trust or other business entity, (i) Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to another corporation, partnership, limited liability company, trust or other business entity that controls, is controlled by or is under common control or management with a Holder (including, for the avoidance of doubt, where such Holder is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership), or (ii) Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock as part of a dividend, distribution, transfer or other disposition of shares of Common Stock to partners, limited liability company members, direct or indirect stockholders or other equity holders of a Holder, including, for the avoidance of doubt, where such Holder is a partnership, to its general partner or a successor partnership, fund or investment vehicle, or any other partnerships, funds or investment vehicles controlled or managed by such partnership;

 

4.2.7 if the Holder is a trust, Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to a trustor or beneficiary of such trust or to the estate of a beneficiary of such trust;

 

4.2.8 Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to the Company’s or the Holder’s officers, directors, members, consultants or their affiliates;

 

4.2.9 pledges of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock as security or collateral in connection with any borrowing or the incurrence of any indebtedness by any Holder (provided such borrowing or incurrence of indebtedness is secured by a portfolio of assets or equity interests issued by multiple issuers);

 

4.2.10 Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock pursuant to a bona fide third-party tender offer, merger, asset acquisition, stock sale, recapitalization, consolidation, business combination or other transaction or series of related transactions involving a Change in Control of the Company, provided that in the event that such tender offer, merger, asset acquisition, stock sale, recapitalization, consolidation, business combination or other such transaction is not completed, the securities subject to this Agreement shall remain subject to this Agreement;

 

4.2.11 Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to the Company in connection with the liquidation or dissolution of the Company by virtue of the laws of the state of the Company’s organization and the Company’s organizational documents;

 

 

4.2.12 the establishment of a trading plan pursuant to Rule 10b5-1 promulgated under the Exchange Act, provided that such plan does not provide for the Transfer of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock during the Lock-up Period; and

 

4.2.13 Transfers of shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock to satisfy any U.S. federal, state, or local income tax obligations of the Lock-up Party (or its direct or indirect owners) arising from a change in the U.S. Internal Revenue Code of 1986, as amended (the “Code”), or the U.S. Treasury Regulations promulgated thereunder (the “Regulations”) after the date on which the Merger Agreement was executed by the parties, and such change prevents the Merger from qualifying as a “reorganization” pursuant to Section 368 of the Code (and the Merger does not qualify for similar tax-free treatment pursuant to any successor or other provision of the Code or Regulations taking into account such changes), in each case solely and to the extent necessary to cover any tax liability as a direct result of the transaction; and

 

4.2.14 to the extent a waiver from the Lock-up is required in order for the Company to meet the applicable Nasdaq initial or continued listing rules with respect to the minimum number of unrestricted round lot holders, as determined by the Company in good faith.

 

4.3 Null and Void. If any Transfer of shares of Common Stock prior to the end of the Lock-up Period is made or attempted contrary to the provisions of this Agreement, such purported Transfer shall be null and void ab initio, and the Company shall refuse to recognize any such purported transferee as one of its equityholders for any purpose.

 

ARTICLE V

 

INDEMNIFICATION AND CONTRIBUTION

 

5.1 Indemnification.

 

5.1.1 The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and out-of-pocket expenses (including actual, reasonable and documented attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.

 

5.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus (the “Holder Information”) and, to the extent permitted by law, shall indemnify the Company, its directors and officers and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and out-of-pocket expenses (including without limitation actual, reasonable and documented attorneys’ fees) resulting from any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement is contained in (or not contained in, in the case of an omission) any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.

 

 

5.1.3 Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

5.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.

 

5.1.5 If the indemnification provided under Section 5.1 hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and out-of-pocket expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and out-of-pocket expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by, in the case of an omission), such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this subsection 5.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 5.1.1, 5.1.2 and 5.1.3 above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 5.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 5.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 5.1.5 from any person who was not guilty of such fraudulent misrepresentation.

 

ARTICLE VI

 

MISCELLANEOUS

 

6.1 Notices. Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy, telegram or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail, telecopy, telegram or facsimile, at such time as it is delivered to the addressee or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, to: 11 Commerce Drive, First Floor Cranford, NJ 07016, and, if to any Holder, at such Holder’s address or facsimile number as set forth in the Company’s books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 6.1.

 

 

6.2 Assignment; No Third Party Beneficiaries.

 

6.2.1 This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.

 

6.2.2 Prior to the expiration of the Lock-up Period, no Holder may assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to become bound by the transfer restrictions set forth in this Agreement.

 

6.2.3 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders, which shall include Permitted Transferees.

 

6.2.4 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 6.2 hereof.

 

6.2.5 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 6.1 hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 6.2 shall be null and void.

 

6.3 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.

 

6.4 Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT (I) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF DELAWARE AS APPLIED TO AGREEMENTS AMONG DELAWARE RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN DELAWARE, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION AND (II) THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE THE COURT OF CHANCERY OF THE STATE OF DELAWARE OR, IF UNDER APPLICABLE LAW, EXCLUSIVE JURISDICTION OVER SUCH MATTER IS VESTED IN THE FEDERAL COURTS, ANY FEDERAL COURT IN THE STATE OF DELAWARE AND ANY APPELLATE COURT FROM ANY THEREOF.

 

 

6.5 Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.

 

6.6 Other Registration Rights. The Company represents and warrants that no person, other than a Holder of Registrable Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.

 

6.7 Term. This Agreement shall terminate upon the earlier of (i) the fifth (5^th) anniversary of the date of this Agreement or (ii) the date as of which (A) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the Commission)) or (B) the Holders of all Registrable Securities are permitted to sell the Registrable Securities under Rule 144 (or any similar provision) under the Securities Act without limitation on the amount of securities sold or the manner of sale. The provisions of Section 3.5 and Article V shall survive any termination.

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

COMPANY:
CITIUS ONCOLOGY, INC.
By:	/s/ Xiaofeng Yuan
Name:	Xiaofeng Yuan
Title:	Chief Executive Officer and Chairman
SPONSOR EQUITYHOLDERS:
10XYZ HOLDINGS LP
By:	/s/ Taylor Zhang
Name:	Taylor Zhang on behalf of 10XYZ Management LLC as General Partner
INTELLIGENT INVESTMENTS I LLC
By:	/s/ Mark Crone
Name:	Mark Crone
Title:	Managing Member
LEGACY CITIUS ONCOLOGY EQUITYHOLDER:   CITIUS PHARMACEUTICALS, INC.
By:	/s/ Leonard Mazur
Name:	Leonard Mazur
Title:	Chief Executive Officer and Chairman of the Board

 

[Signature Page to A&R Registration Rights Agreement] 

 

 

 

Exhibit 10.3

 

EXECUTION VERSION

 

Citius Pharmaceuticals, Inc.

11 Commerce Drive, First Floor

Cranford, New Jersey 07016

 

August 12, 2024

 

Citius Oncology, Inc. (formerly, TenX Keane Acquisition)

420 Lexington Avenue, Suite 2446

New York, New York 10170

Attention: Taylor Zhang

Email: tzhang@ascendantga.com

Dear Mr. Zhang:

 

This letter agreement (this “Letter Agreement”) is sent in reference to that certain Agreement and Plan of Merger and Reorganization, dated October 23, 2023 (the “Merger Agreement”), by and among Citius Oncology, Inc., a Delaware corporation and formerly TenX Keane Acquisition, a Cayman Islands exempted company (“Parent”), TenX Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Citius Pharmaceuticals, Inc., a Nevada corporation (the “Company”) and Citius Oncology Sub, Inc., a Delaware corporation formerly known as Citius Oncology, Inc. (“SpinCo”), for purposes of (1) setting forth the understanding of the parties to the Merger Agreement with respect to certain provisions thereof, (2) confirming the waiver by Parent and Merger Sub of certain provisions of the Merger Agreement, and (3) confirming the waiver by Company and SpinCo of certain provisions of the Merger Agreement, in each case in accordance with the terms and conditions set forth in this Letter Agreement. Capitalized terms used but not otherwise defined in this Letter Agreement shall have the meanings ascribed to them in the Merger Agreement.

 

(i)

Each of Parent and Merger Sub hereby irrevocably waive in their entirety the requirements contained in Section 7.18(a) and Section 7.18(b) of the Merger Agreement pursuant to which, prior to the Closing, the Company and SpinCo are required to (a) enter into a transfer and assignment agreement, in a form reasonably satisfactory to Parent and the Company, pursuant to which the Company will transfer the LYMPHIRTM (denileukin diftitox) trademark or trademark application, as applicable, and SpinCo will accept such transfer and assignment, with such assignment and transfer automatically effective for all purposes as of the effective date of the Company FDA Letter and the SpinCo FDA Letter, and (b) promptly following the Company’s receipt of the Notice of Approval, but in no event later than five (5) Business Days thereafter, deliver to the FDA an executed Company FDA Letter and an executed SpinCo FDA Letter. For the avoidance of doubt, the Company and the Surviving Corporation shall, within sixty (60) days following the Closing Date, (I) enter into a transfer and assignment agreement, in a form reasonably satisfactory to the Company and the Surviving Corporation, pursuant to which the Company will transfer the LYMPHIRTM (denileukin diftitox) trademark or trademark application, as applicable, and the Surviving Corporation will accept such transfer and assignment and (II) in connection therewith, deliver to the FDA an executed Company FDA Letter and an executed SpinCo FDA Letter.

 

 

(ii)

Each of Parent and Merger Sub hereby irrevocably waive in their entirety the (a) requirements contained in Section 2.3(f) of the Merger Agreement pursuant to which on the Closing Date, in connection with the Effective Time, the Company is required to pay or cause to be paid, by wire transfer of immediately available funds to Parent, $10,000,000 (the “Working Capital Amount”) as a capital contribution to Parent for purposes of funding working capital of the Surviving Corporation, and (b) the provisions of Section 7.16(b)(iii) of the Merger Agreement, which state that upon the Closing, the Company will be repaid by Parent an amount equal to the portion of the Extension Fees that the Company paid either to Sponsor (or its designee) or into the Trust Account, but only if at the time of the Closing the balance of the Trust Account equals or exceeds $2,000,000; provided, however, that each such waiver is conditioned upon the Company paying, or causing to be paid, $10,000,000 in accordance with the provisions of that certain Flow of Funds Memorandum, dated as of even date herewith, by and among Parent, Merger Sub, the Company, SpinCo and Sponsor (the “Funds Flow”). The Company and SpinCo hereby acknowledge and agree that the execution and delivery of the Funds Flow as of the date hereof satisfies in full the Parent’s obligation to deliver a written statement at least two (2) Business Days prior to the Closing Date setting forth the Parent Estimated Transaction Expenses pursuant to Section 2.3(c) of the Merger Agreement. For the avoidance of doubt, the Company shall not be responsible for, and shall have no obligation to pay, any Parent Estimated Transaction Expenses or Parent Transaction Expenses, except to the extent expressly set forth in the Funds Flow.

 

(iii)

Each of Parent and Merger Sub hereby irrevocably waive in their entirety the requirements contained in Section 10.1 of the Merger Agreement pursuant to which Parent is obligated, at least 48 hours prior to the Effective Time, to provide notice to the Trustee in accordance with the Trust Agreement and deliver any other documents, opinions or notices required to be delivered to the Trustee pursuant to the Trust Agreement, and cause the Trustee as of the Effective Time to transfer all funds held in the Trust Account to Parent (to be held as available cash on the balance sheet of Parent, and to be used for working capital and other general corporate purposes of the business following the Closing), and thereafter to cause the Trust Account and the Trust Agreement to terminate; provided, however, that such waiver is conditioned on, at least 48 hours prior to the Effective Time, Parent providing notice to the Trustee in accordance with the Trust Agreement, and delivering any other documents, opinions or notices required to be delivered to the Trustee pursuant to the Trust Agreement, and causing the Trustee as of the Effective Time to transfer all funds held in the Trust Account to the Company (for use by the Company for such purposes as the Company may determine in its sole discretion), and thereafter causing the Trust Account and the Trust Agreement to terminate.

 

Each of the Parties hereby acknowledges and agrees that this Letter Agreement was entered into in accordance with the provisions of Section 10.7(a) of the Merger Agreement. No Party may assert that a condition precedent in the Merger Agreement (including, without limitation, any conditions set forth in in Section 8.3(a) or Section 8.3(e) of the Merger Agreement) has not been satisfied for failure to comply with the covenants that the Parties have waived pursuant to this Letter Agreement.

 

Except as expressly modified by this Letter Agreement, the Merger Agreement shall remain in full force and effect in accordance with the terms thereof. In the event of a conflict between the provisions of this Letter Agreement and the Merger Agreement, this Letter Agreement shall control. Sections 10.3, 10.4, 10.7, 10.8, 10.9, 10.10, 10.11, and 10.12 of the Merger Agreement shall apply to this Letter Agreement mutatis mutandis.

 

[Signature page follows]

 

 

	Sincerely,
	CITIUS PHARMACEUTICALS, INC.
	By:	/s/ Leonard Mazur
	Name:	Leonard Mazur
	Title:	Chief Executive Officer and Chairman of the Board

 

Acknowledged, agreed to and accepted:
CITIUS ONCOLOGY SUB, Inc.,
formerly known as Citius Oncology, Inc.
By:	/s/ Leonard Mazur
Name:	Leonard Mazur
Title:	Chief Executive Officer and Chairman of the Board
CITIUS ONCOLOGY, INC.,
formerly TenX Keane Acquisition
By:	/s/ Xiaofeng Yuan
Name:	Xiaofeng Yuan
Title:	Chief Executive Officer and Chairman
TENX MERGER SUB, INC.
By:	/s/ Xiaofeng Yuan
Name:	Xiaofeng Yuan
Title:	Chief Executive Officer and Chairman

 

[Signature Page – Side Letter to Agreement and Plan of Merger and Reorganization]

 

 

CC:

 

The Crone Law Group

420 Lexington Avenue, Suite 2446

New York, New York 10170

Attn: Tammara Fort; Samara Thomas

Email: tfort@cronelawgroup.com; sthomas@cronelawgroup.com

 

Wyrick Robbins Yates & Ponton LLP

4101 Lake Boone Trail, Suite 300

Raleigh, North Carolina 27607
Attention: Alec Donaldson; David P. Creekman
Email: adonaldson@wyrick.com; dcreekman@wyrick.com

 

 

 

Exhibit 10.4 

 

PROMISSORY NOTE

 

Principal Amount: $3,800,111 

Date: August 16, 2024

 

Citius Oncology, Inc., a Delaware corporation (the “Payor”), promises to pay to the order of Citius Pharmaceuticals, Inc., a Nevada corporation or its registered assigns or successors in interest (the “Payee”), or order, the principal sum of Three Million Eight Hundred Thousand One Hundred and Eleven Dollars ($3,800,111) on the Maturity Date (as defined below) in lawful money of the United States of America, on the terms and conditions described below. All payments on this Note shall be made by check or wire transfer of immediately available funds to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note.

 

1.       Principal. The entire unpaid principal balance of this Note shall be payable on the date on which Payor has closed a capital raise of at least $10 million through the issuance of debt or equity securities or the royalty-backed monetization of LYMPHIR™ (the “Maturity Date”). The principal balance may be prepaid. Under no circumstances shall any individual, including but not limited to any officer, director, employee or shareholder of the Payor, be obligated personally for any obligations or liabilities of the Payor hereunder.

 

2.       Interest. No interest shall accrue on the unpaid principal balance of this Note.

 

3.       Events of Default. The following shall constitute an event of default (“Event of Default”):

 

(a) Failure by Payor to pay the principal amount due pursuant to this Note.

 

(b) The commencement by Payor of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Payor or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Payor generally to pay its debts as such debts become due, or the taking of corporate action by Payor in furtherance of any of the foregoing.

 

(c) The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Payor in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Payor or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.

 

(d) The Payor fails to perform or comply with any one or more of its obligations under this Note.

 

(e) Any present or future indebtedness of the Payor in respect of moneys borrowed or raised becomes (or becomes capable of being declared) due and payable prior to its stated maturity by reason of any event of default, or any such indebtedness is not paid when due or, as the case may be, within any applicable grace period.

 

(f) A distress, attachment, execution or other legal process is levied or enforced on or against any assets of the Payor which is not discharged or stayed within 30 days.

 

(g) It is or becomes unlawful for the Payor to perform any of its obligations under this Note, or any obligations of the Payor under this Note are not or cease to be legal, valid, binding or enforceable.

 

 

4. Remedies.

 

(a) Upon the occurrence of an Event of Default specified in Section 3(a) hereof, Payee may, by written notice to Payor, declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable hereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.

 

(b) Upon the occurrence of an Event of Default specified in Sections 3(b) or 3(c), the unpaid principal balance of this Note, and all other amounts payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.

 

5. Waivers. Payor and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to this Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Payor by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Payor agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof or any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.

 

6. Unconditional Liability. Payor hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional Payors, endorsers, guarantors, or sureties may become parties hereto without notice to Payor or affecting Payor’s liability hereunder. Any failure of Payee to exercise any right hereunder shall not be construed as a waiver of the right to exercise the same or any other right at any time and from time to time thereafter. Payee may accept late payments, or partial payments, even though marked “payment in full” or containing words of similar import or other conditions, without waiving any of its rights.

 

7. Notices. All notices, statements or other documents which are required or contemplated by this Note shall be: in writing and delivered (i) personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.

 

8. Construction. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.

 

 

9. Severability. Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

10. Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of the Payor and the Payee.

 

11. Assignment. This Note binds and is for the benefit of the successors and permitted assigns of Payor and the Payee. No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.

 

[Signature page follows]

 

 

 

IN WITNESS WHEREOF, Payor, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first above written.

 

  

	Citius Oncology, Inc.
	By:	Leonard Mazur
	Name: Title:	Leonard Mazur Chairman and Chief Executive Officer

  

 

 

Exhibit 99.1

 

 

Citius Pharmaceuticals Completes Merger of Subsidiary with TenX Keane to form Citius Oncology, Inc.

 

LYMPHIR™ for the treatment of cutaneous T-cell lymphoma approved by the FDA

 

Citius Pharmaceuticals, Inc. holds approximately 90% of publicly traded Citius Oncology, Inc.

 

Shares of Citius Oncology, Inc. anticipated to begin trading on Nasdaq under the ticker “CTOR” on August 13, 2024

 

CRANFORD, N.J., Aug. 12, 2024 -- Citius Pharmaceuticals, Inc. (“Citius Pharma” or the “Company”) (Nasdaq: CTXR), a late-stage biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products, today announced that it has completed the previously announced merger of its oncology subsidiary with TenX Keane Acquisition (“TenX”) (Nasdaq: TENK), a publicly traded special purpose acquisition company. The combined company will operate as Citius Oncology, Inc. (“Citius Oncology”) and is expected to begin trading on August 13, 2024, on the Nasdaq stock exchange under the ticker symbol CTOR.

 

“This transaction is a significant milestone, providing us greater financial and strategic flexibility to advance our late-stage assets. We believe a publicly traded Citius Oncology offers a unique pure play investment opportunity and is better positioned to unlock the value of LYMPHIR, which was approved by the FDA last week. With this transaction, we look forward to launching LYMPHIR, facilitating future growth initiatives, and exploring additional potential oncology assets. It is our intention to distribute of a portion of our shares of Citius Oncology to Citius Pharma shareholders in the future,” stated Leonard Mazur, Chairman and CEO of Citius Pharma and Citius Oncology.

 

“This transaction also enables Citius Pharma to focus on growing and unlocking the value of other assets in its portfolio, including our novel Mino-Lok antibiotic lock solution which recently achieved primary and secondary endpoints in a Phase 3 Trial and is now another step closer to entering a $1.8 billion market,” added Mazur.

 

As it has in the past, Citius Oncology will operate under a shared services agreement with Citius Pharma for the services of several key members of the Citius Pharma team, led by Leonard Mazur, Chief Executive Officer, Jaime Bartushak, Chief Financial Officer and Dr. Myron Czuczman, Chief Medical Officer. Myron Holubiak will serve as Executive Vice Chairman of the Citius Oncology Board of Directors.

 

 

About the Merger

 

Pursuant to the agreement, TenX acquired Citius Pharma’s wholly owned subsidiary via a merger, with the newly combined publicly traded company renamed Citius Oncology, Inc. As part of the transaction, all shares of Citius Pharma’s wholly owned subsidiary were converted into the right to receive common stock of Citius Oncology. Citius Pharma holds approximately 90% of the newly public company. An additional 12.75 million existing options will be assumed by Citius Oncology.

 

The description of the transaction contained herein is only a summary and is qualified in its entirety by reference to the merger agreement, a copy of which has been filed by Citius Pharma in a Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission on October 24, 2023.

 

Advisors

 

Maxim Group LLC is acting as exclusive financial advisor to Citius Pharma and Newbridge Securities Corporation is acting as exclusive financial advisor to TenX. Wyrick Robbins Yates & Ponton LLP is acting as legal advisor to Citius Pharma and Citius Oncology. The Crone Law Group P.C. is acting as legal advisor to TenX.

 

About Citius Oncology, Inc.

 

Citius Oncology will serve as a platform to develop and commercialize novel targeted oncology therapies. In August 2024, its primary asset, LYMPHIR, was approved by the FDA for the treatment of adults with relapsed or refractory CTCL who had had at least one prior systemic therapy. Management estimates the initial market for LYMPHIR currently exceeds $400 million, is growing, and is underserved by existing therapies. Robust intellectual property protections that span orphan drug designation, complex technology, trade secrets and pending patents for immuno-oncology use as a combination therapy with checkpoint inhibitors would further support Citius Oncology’s competitive positioning. Citius Oncology is a publicly traded subsidiary of Citius Pharmaceuticals. For more information, please visit www.citiusonc.com

 

About LYMPHIR™ (denileukin diftitox-cxdl)

 

LYMPHIR is a specially engineered IL-2- diphtheria toxin fusion protein made using recombinant DNA technology. It works by targeting cells that have IL-2 receptors with a toxin derived from diphtheria bacteria. Once inside the cell, this toxin stops the cell from making proteins, which leads to cell death. LYMPHIR has two main effects. It directly kills tumor cells by binding to the IL-2 receptors and internalizing the diphtheria toxin directly into the tumor cells, causing them to die. Additionally, it boosts the body’s immune response by reducing the number of regulatory T-cells (Tregs) that suppress the immune system, thereby enhancing the body’s ability to fight the tumor. LYMPHIR is unique as the only IL-2 receptor targeted CTCL therapy, offering a novel option to patients cycling through multiple treatments.

 

In 2011 and 2013, the FDA granted orphan drug designation to LYMPHIR for the treatment of PTCL and CTCL, respectively. In 2021, denileukin diftitox received regulatory approval in Japan for the treatment of CTCL and peripheral T-cell lymphoma (PTCL). Subsequently, in 2021, Citius Pharma acquired an exclusive license with rights to develop and commercialize LYMPHIR in all markets except for Japan and certain parts of Asia. In August 2024, LYMPHIR was approved by the FDA for the treatment of adults with relapsed or refractory CTCL who had had at least one prior systemic therapy.

 

Additional value-creating opportunities in larger markets include potential indications in peripheral T-cell lymphoma or as a combination therapy with CAR-T and PD-1 inhibitors, and in markets outside the U.S. Currently, two investigator-initiated trials are underway to explore LYMPHIR’s potential as an immuno-oncology combination therapy.

 

Please read Important Safety Information and full Prescribing Information, including Boxed WARNING, for LYMPHIR at www.lymphirhcp.com.

 

 

About Citius Pharmaceuticals, Inc.

 

Citius Pharmaceuticals, Inc. is a biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products. In August 2024, the FDA approved LYMPHIR, a targeted immunotherapy for an initial indication in the treatment of cutaneous T-cell lymphoma that is now being developed by Citius Oncology. Citius Pharma’s late-stage pipeline also includes Mino-Lok®, an antibiotic lock solution to salvage catheters in patients with catheter-related bloodstream infections, and CITI-002 (Halo-Lido), a topical formulation for the relief of hemorrhoids. A Pivotal Phase 3 Trial for Mino-Lok and a Phase 2b trial for Halo-Lido were completed in 2023. Mino-Lok met primary and secondary endpoints of its Phase 3 Trial. Citius is actively engaged with the FDA to outline next steps for both programs. For more information, please visit www.citiuspharma.com.

 

Forward-Looking Statements

 

This press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are made based on our expectations and beliefs concerning future events impacting Citius. You can identify these statements by the fact that they use words such as “will,” “anticipate,” “estimate,” “expect,” “plan,” “should,” and “may” and other words and terms of similar meaning or use of future dates. Forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock price. Factors that could cause actual results to differ materially from those currently anticipated, and that apply to Citius Pharma and Citius Oncology as our majority owned subsidiary, are: the anticipated benefits of the transaction between TenX Keane Acquisition and Citius Pharma to form Citius Oncology may not be realized fully, if at all, or may take longer to realize than expected; Citius Oncology’s ability to commercialize LYMPHIR; our need for substantial additional funds; risks relating to the results of research and development activities, including those from our existing and any new pipeline assets; our ability to commercialize any of our other product candidates approved by the FDA; our dependence on third-party suppliers; our ability to procure cGMP commercial-scale supply; the estimated markets for our product candidates and the acceptance thereof by any market; the ability of our product candidates to impact the quality of life of our target patient populations; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; uncertainties relating to preclinical and clinical testing; the early stage of products under development; market and other conditions; risks related to our growth strategy; patent and intellectual property matters; our ability to identify, acquire, close and integrate product candidates and companies successfully and on a timely basis; government regulation; competition; as well as other risks described in our SEC filings. These may be further impacted by any future public health risks or geopolitical events. Accordingly, these forward-looking statements do not constitute guarantees of future performance, and you are cautioned not to place undue reliance on these forward-looking statements. Risks regarding our business are described in detail in our Securities and Exchange Commission (“SEC”) filings which are available on the SEC’s website at www.sec.gov, including in our Annual Report on Form 10-K for the year ended September 30, 2023, filed with the SEC on December 29, 2023, and updated by our subsequent filings with the SEC. These forward-looking statements speak only as of the date hereof, and we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.

 

Investor Contact:

 

Ilanit Allen

ir@citiuspharma.com

ir@citiusonc.com

908-967-6677 x113

 

Media Contact:

 

STiR-communications

Greg Salsburg

Greg@STiR-communications.com

 

 

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Cover	Aug. 12, 2024
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