Revised Form of Contingent Value Rights Agreement
In connection with the Second Amendment, AcelRx and Tetraphase also agreed to a revised form of Contingent Value Rights Agreement (the Revised CVR
Agreement), which will govern the terms of the CVRs and will be entered into at or prior to the Effective Time. Pursuant to the Revised CVR Agreement, the CVRs now represent an aggregate right to receive up to $16.0 million in cash,
without interest and less any applicable withholding taxes, in contingent consideration, conditioned upon the achievement of specified levels of annual net sales of XERAVA as follows:
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a one-time payment of $2.5 million upon the achievement of specified
annual net sales of XERAVA in 2021;
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a one-time payment of $4.5 million upon the achievement of specified
annual net sales of XERAVA in any calendar year ending on or before December 31, 2024; and
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a one-time payment of $9.0 million upon the achievement of specified
annual net sales of XERAVA in any calendar year ending on or before December 31, 2024.
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The terms of the CVRs described above
reflect the parties agreement over the sharing of potential economic upside benefits from future net sales of XERAVA and do not necessarily reflect anticipated net sales of XERAVA. There can be no assurance that such levels of net sales will
occur or that any or all of the payments in respect of the CVRs will be made.
The right to such contingent consideration as evidenced by the Revised CVR
Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the Revised CVR Agreement. The foregoing description of the Revised CVR Agreement does not purport to be complete and is qualified
in its entirety by reference to the form of Revised CVR Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Amendment to Voting Agreement
In connection with
the execution of the Second Amendment, AcelRx and certain stockholders of Tetraphase representing approximately 20% of the voting power of Tetraphase entered into separate amendments (each such amendment, Amendment No. 2 to Voting
Agreement) to the Voting Agreements, dated March 15, 2020, and amended by the Amendment to Voting Agreement entered into in connection with the execution of Amendment No. 1 (Amendment No. 1 to Voting Agreement), by
and between AcelRx, Merger Sub and each such stockholder (such Voting Agreements, as amended by Amendment No. 1 to Voting Agreement and Amendment No. 2 to Voting Agreement, the Amended Voting Agreements). Pursuant to the
Amended Voting Agreements, each such stockholder agreed to, among other things, vote the shares of Tetraphase common stock beneficially owned by such stockholder in favor of the adoption of the Merger Agreement, as amended by the Second Amendment,
and against any acquisition proposal or liquidation or dissolution of Tetraphase, as well as such other matters set forth in the Amended Voting Agreement.
Pursuant to the Amended Voting Agreement, each such stockholder that is a party thereto has also agreed to (i) exchange certain outstanding Tetraphase
common stock warrants for a fixed amount of cash consideration and number of shares of AcelRx common stock and (ii) exchange certain outstanding Tetraphase pre-funded common stock warrants for a specified
percentage of the Merger Consideration.
The foregoing description of Amendment No. 2 to Voting Agreement does not purport to be complete and is
qualified in its entirety by reference to the form of Amendment No. 2 to Voting Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Other than as expressly modified pursuant to Amendment No. 1 to Voting Agreement and Amendment No. 2 to Voting Agreement, the Voting Agreements, a form of which was filed as Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC by AcelRx on March 16, 2020, remain unchanged.