AEON Biopharma, Inc 8-K, filed May 1, 2023
AEON Biopharma, Inc. (AEON)
About this 8-K
AEON Biopharma, Inc filed this 8-K on May 1, 2023, reporting on events of April 27, 2023.
Items reported
- Item 1.01: Entered into a material agreement
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 1, 2023 (
(Exact name of registrant as specified in its charter)
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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)) |
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complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 1.01 Entry into a Material Definitive Agreement
Amendment to Business Combination Agreement
As previously announced, on December 12, 2022, Priveterra Acquisition Corp., a Delaware corporation (the “Company” or “Priveterra”), entered into a business combination agreement (the “Business Combination Agreement”) by and among the Company, Priveterra Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and AEON Biopharma, Inc., a Delaware corporation (“AEON”). The Business Combination Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into AEON, with AEON surviving as a wholly owned subsidiary of the Company (the “Merger”). Upon the closing of the Merger (the “Closing”), the Company will change its name to “AEON Biopharma, Inc.” The date on which the Closing actually occurs is hereinafter referred to as the “Closing Date.”
The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and AEON.
On April 27, 2023, Priveterra, AEON and Merger Sub entered into an Amendment No. 1 to the Business Combination Agreement (the “BCA Amendment”).
Consideration
Under the BCA Amendment, certain restricted stock unit awards of AEON and its subsidiary that have not yet vested or settled as of the closing of the Business Combination Agreement (the “Closing”) will be converted into Deferred Vested Company RSU Awards or Subsidiary Rollover Deferred Vested RSU Awards, accordingly. At the Closing, each outstanding option to purchase shares of AEON common stock and restricted stock units will be converted into an option to purchase, subject to substantially the same terms and conditions as were applicable under such options prior to the Closing, shares of the combined company’s common stock equal to the number of shares subject to such option or restricted stock unit, subject to substantially the same terms and conditions as were applicable under such restricted stock units prior to the Closing, which will vest into shares of the combined company’s common stock subject to adjustments to exercise price and number of shares of Class A Common Stock issued upon exercise.
The minimum cash condition was reduced from $45 million to $40 million and cash obtained by entering into certain Qualified Financing Transactions (as defined below) prior to closing will be included in this figure.
The expense cap for Priveterra was also increased from $10,000,000 to $10,300,000.
Termination
In the event that the transactions contemplated by the Business Combination Agreement have not been consummated by July 21, 2023 (the “Termination Date”), either party may terminate.
Directors
The total number of directors of the combined company shall be five: with two designated by AEON, one designated by Priveterra, and two independent directors mutually determined.
Other than as amended pursuant to the BCA Amendment, the Business Combination Agreement remains in full force and effect. The foregoing descriptions of the BCA Amendment and the Business Combination Agreement do not purport to be complete and are qualified in their entirety by reference to, respectively, the full text of the BCA Amendment, which is Exhibit 2.1 hereto, and of the Business Combination Agreement, a copy of which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC by the Company on December 12, 2022, and is incorporated herein by reference.
Amendment to Sponsor Support Agreement
In connection with the execution of the Business Combination Agreement, Priveterra, Priveterra Sponsor, LLC (“Sponsor”), the Company, Merger Sub, AEON, and the other parties thereto entered into the Sponsor Support Agreement (the “Sponsor Support Agreement”).
On April 27, 2023, Priveterra, the Sponsor, AEON and the other parties thereto entered into an Amendment No. 1 to the Sponsor Support Agreement (the “SSA Amendment”).
Under the SSA Amendment, subject to, and conditioned upon the occurrence of and effective immediately after the Closing, 70% of the Founder Shares (i.e. 4,830,000 Founder Shares) (the “Contingent Founder Shares”) shall be unvested and subject to the restrictions and forfeiture provisions set forth in the Sponsor Support Agreement. The remaining 30% of the Founder Shares and 100% of the Private Placement Warrants shall not be subject to the provisions set forth for the Contingent Founder Shares.
If on the date upon which all backstop commitments, non-redemption agreements, forward purchase agreements or other similar financing arrangements entered into prior to the Closing or following the Closing with a financing provider or source identified to AEON by the Priveterra prior to the Closing have terminated or expired (such date, the “Test Date”), the Average Price Per Share, determined as of the Test Date (the “Test Date Average Price Per Share”) is greater than or equal to $5.00 per share, the Contingent Founder Shares shall vest, and shall become free of the provisions as follows: Assuming the Closing Average Price Per Share is greater than or equal to $5.00 per share, the remaining 30% of the Contingent Founder Shares (i.e., 1,380,000 Founder Shares) shall vest immediately without any further action.
The Contingent Founder Shares shall vest, if at all, upon the date upon which all interim financings, equity lines of credit, backstop commitments, non-redemption agreements, forward purchase agreements or other similar financing arrangements entered into prior to the Closing or following the Closing with a financing provider or source identified to AEON by the Company prior to the Closing (the “Qualifying Financing Transactions”) have terminated or expired (which date could be the Closing Date), if the Average Price Per Share of the Qualifying Financing Transactions is greater than $5.00 per share, as follows: (i) 1,380,000 shall vest immediately, and (ii) the remaining Contingent Founder Shares shall vest upon achievement of the clinical milestones described further in the Sponsor Support Agreement. If the Average Price Per Share of the Qualifying Financing Transactions is less than $5.00 per share as of such date, then all of the Contingent Founder Shares shall be forfeited for no consideration.
The “Average Price Per Share” means the effective average price per share of the Class A Common Stock issued by Priveterra (or the surviving corporation, following the Closing) in connection with certain Qualifying Financing Transactions, determined at the Closing (in the case of any such shares of Class A common stock issued prior to or at the Closing) or in the case of any shares of Class A common stock issued after the Closing, at the time such shares are actually issued subject to certain specifications set forth in the SSA Amendment and excluding any financing arrangement entered into with any stockholder or warrantholder of AEON.
A copy of the SSA Amendment is filed herewith as Exhibit 10.1, and the foregoing description of the SSA Amendment is qualified in its entirety by reference thereto.
Promissory Note
On April 27, 2023, Priveterra issued an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which Priveterra may borrow up to an aggregate principal amount of $1,000,000. The Promissory Note is non-interest bearing, unsecured and payable upon the effective date of Priveterra’s initial business combination. The Promissory Note is subject to customary events of default which could, subject to certain conditions, cause the Promissory Notes to become immediately due and payable.
A copy of the Promissory Note is filed herewith as Exhibit 10.2, and the foregoing description of the Promissory Note is qualified in its entirety by reference thereto.
IMPORTANT NOTICES
Important Information About the Merger and Where to Find It
A full description of the terms of the Merger will be provided in the S-4 Registration Statement to be filed with the SEC by the Company (the “S-4 Registration Statement”), which will include a prospectus with respect to the Company’s securities to be issued in connection with the Merger and a proxy statement with respect to the stockholder meeting of the Company to vote on the Merger. The Company urges its stockholders and other interested persons to read, when available, the preliminary proxy statement/prospectus included in the S-4 Registration Statement and the amendments thereto and the definitive proxy statement/prospectus, as well as other documents filed with the SEC, because these documents will contain important information about the Company, AEON and the Merger. After the S-4 Registration Statement is declared effective, the definitive proxy statement/prospectus to be included in the S-4 Registration Statement will be mailed to stockholders of the Company as of a record date to be established for voting on the proposed Merger. Once available, stockholders will also be able to obtain a copy of the S-4 Registration Statement, including the proxy statement/prospectus, and other documents filed with the SEC without charge, at the SEC’s website at www.sec.gov, or by directing a request to: Priveterra Acquisition Corp., 300 SE 2nd Street, Suite 600, Fort Lauderdale, FL 33301.
Participants in the Solicitation
The Company and its directors and executive officers may be considered participants in the solicitation of proxies from the Company’s stockholders with respect to the proposed Merger described in this Current Report under the rules of the SEC. Information about the directors and executive officers of the Company is set forth in the Company’s Annual Report on Form 10-K, filed with the SEC on February 22, 2023, and is available free of charge at the SEC’s website at www.sec.gov or by directing a request to: Priveterra Acquisition Corp., Attn: Secretary, 300 SE 2nd Street, Suite 600, Fort Lauderdale, FL 33301.
Aeon and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the proposed Merger. A list of the names of such directors and executive officers and information regarding their interest in the proposed Merger will be contained in the S-4 Registration Statement when available.
Forward-Looking Statements
Certain statements, estimates, targets and projections in this Current Report may be considered forward-looking statements. Forward-looking statements generally relate to future events involving, or future performance of, the Company or AEON. In some cases, you can identify forward-looking statements by terminology such as “pro forma”, “may”, “should”, “could”, “might”, “plan”, “possible”, “project”, “strive”, “budget”, “forecast”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, and AEON and its management, as the case may be, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (i) the occurrence of any event, change or other circumstances that could give rise to the termination of negotiations and any subsequent definitive agreements with respect to the Merger; (ii) the outcome of any legal proceedings that may be instituted against the Company, AEON, the combined company or others following the announcement of the Merger and any definitive agreements with respect thereto; (iii) the inability to complete the Merger due to the failure to obtain approval of the stockholders of the Company or AEON or to satisfy other conditions to closing; (iv) changes to the proposed structure of the Merger that may be required or appropriate as a result of applicable laws or regulations or as a condition to obtaining regulatory approval of the Merger; (v) the ability to meet stock exchange listing standards following the consummation of the Merger; (vi) the risk that the Merger disrupts current plans and operations of AEON as a result of the announcement and consummation of the Merger; (vii) the ability to recognize the anticipated benefits of the Merger, which may be affected by, among other things, the ability to identify, develop and commercialize product candidates, the initiation, cost, timing, progress or results of current or planned preclinical studies and clinical trials, product acceptance and/or receipt of regulatory approvals for product candidates, including related milestones, the plans, strategies and objectives of management for future operations, the beliefs and assumptions of management regarding future events, potential markets or market size, or technological developments, competition and advancement of research and development activities in the biopharma industry, the ability of the combined company to grow and manage growth profitably, maintain relationships with suppliers and retain its management and key employees, costs related to the Merger, changes in applicable laws or regulations, the possibility that AEON or the combined company may be adversely affected by other economic, business, regulatory, and/or competitive factors; (viii) AEON’s estimates of expenses and profitability, the evolution of the markets in which AEON competes, the ability of AEON to implement its strategic initiatives and continue to innovate its existing product candidates, the ability of AEON to defend its intellectual property and satisfy regulatory requirements, the impact of the COVID-19 pandemic on AEON’s business; and (ix) other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s final prospectus dated February 11, 2021, relating to its initial public offering and other risks and uncertainties indicated from the time to time in the definitive proxy statement to be delivered to the Company’s stockholders and related S-4 Registration Statement, including those set forth under “Risk Factors” therein, and other documents filed to be filed with the SEC by the Company.
No Offer or Solicitation
This Current Report is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed Merger and shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
*Annexes, schedules and exhibits have been omitted pursuant to item 601(b)(2) of Regulation S-K. The registrant agrees to furnish supplementally a copy of any omitted attachment to the Securities and Exchange Commission on a confidential basis upon request.
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.
| Priveterra Acquisition Corp. | |||
| By: | /s/ Robert Palmisano | ||
| Name: | Robert Palmisano | ||
| Title: | Chairman and Chief Executive Officer | ||
Dated: May 1, 2023
Exhibit 2.1
Annex G
Execution Version
Confidential
AMENDMENT NO. 1
to
BUSINESS COMBINATION AGREEMENT
This Amendment No. 1 to the Business Combination Agreement (this “Amendment”) is made as of April 27, 2023, by and among Priveterra Acquisition Corp., a Delaware corporation (“SPAC”), AEON Biopharma, Inc., a Delaware corporation (the “Company”), and Priveterra Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the SPAC (“Merger Sub”). Capitalized terms used, but not otherwise defined herein, shall have the meaning given to them in the BCA (as defined below).
WHEREAS, on December 12, 2022, SPAC, the Company and Merger Sub entered into that certain Business Combination Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms, the “BCA”);
WHEREAS, pursuant to Section 8.3 of the BCA, the BCA may be amended or modified only by a duly authorized agreement in writing executed by each of the Parties in the same manner as the BCA; and
WHEREAS, each of SPAC, the Company and Merger Sub desire to amend certain provisions of the BCA on the terms set forth in this Amendment.
NOW, THEREFORE, in consideration for the mutual promises made herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, SPAC, the Company and Merger Sub hereby agree to amend the BCA as follows:
| 1. | Amendments. The following Sections of the BCA are hereby amended as set forth below (with certain changes
shown in blackline form, with bold and underlined text representing additions and |
(a) Section 1.1. Section 1.1 of the BCA is hereby amended as follows:
(i) The definition of “Available Closing Cash” is hereby amended and restated as follows:
““Available Closing Cash” means, as of the Closing (and without duplication), (a) the amount of funds contained in the Trust Account (after reduction for the aggregate amount of payments made or required to be made in connection with the Priveterra Stockholder Redemption), plus (b) the amount of immediately available funds funded to Priveterra or the Company prior to the Closing pursuant to any Interim Financing Arrangement entered into prior to the Closing and the amount of funds committed to Priveterra or the Company pursuant to any Interim Financing Arrangement entered into prior to the Closing that are or will be available to Priveterra or the Company, as applicable, (x) upon or immediately following the Closing or (y) within a six-month period following the Closing and the availability of which to Priveterra or the Company, as applicable, is subject only to the passage of time or such conditions as would reasonably be expected to be satisfied within such six-month period (provided, that, any such condition will be deemed not to be reasonably expected to be satisfied if such condition is outside of the Company’s sole control, including, any minimum stock price thresholds, minimum public float, or other trading or listing requirement; provided, however, that, the filing of, or effectiveness of, a registration statement will be deemed to be reasonably expected to be satisfied by the Company), plus (c) any amount of proceeds funded of any Bridge Loan received by the Company prior to the Closing to the extent such amount is not required to be repaid prior to the later of either (A) December 31, 2023 or (B) within the first six months following the Closing, pursuant to the terms of such Bridge Loan, plus (d) the amount of proceeds (in an amount not to exceed the Excess Expenses Amount) immediately available to Priveterra or the Company at or prior to the Closing pursuant to any equity financing provided by Priveterra pursuant to Section 5.18 in respect of any Excess Expenses Amount, plus (e) the amount of immediately available funds funded to Priveterra or the Company pursuant to any Financing Merger Transaction entered into prior to the Closing (less any fees, expenses, assumed indebtedness (including long-term indebtedness) or current liabilities that are or will be payable or assumed by Priveterra, the Company or the Surviving Corporation in connection therewith), in the case of the foregoing clauses (a), (b) (c), and (d) before giving effect to the payment of any Transaction Expenses, minus (f) all Unpaid Priveterra Expenses payable in cash, whether or not then payable, prior to or at the Closing.”
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(ii) The definition of “Closing Equity Value” is hereby amended and restated in its entirety as follows:
“Closing Equity Value” means (a) $165,000,000,
minus (b) the Holdback Equity Pool Closing Value.
(iii) The definition of “Fully Diluted Company Capitalization” is hereby amended and restated in its entirety as follows:
“Fully Diluted Company Capitalization” means, without duplication, the sum of
(a) the aggregate number of shares of Company Common
Stock outstanding as of immediately prior to the Effective Time, determined on an as-converted basis (including, for the avoidance
of doubt, (i) the number of shares of Company Common Stock issuable upon conversion of a share of Company Preferred Stock
(including any shares of Company Preferred Stock issuable upon the exercise of the Company Warrant) based on the then applicable
conversion ratio, (ii) the number of shares of Company Common Stock, if any, issuable in connection with the Subsidiary Merger,
and (iii) the number of shares of Company Common Stock issuable pursuant to the transactions set forth on
Section 1.1(e) of the Company Disclosure Schedules), (b) the number of shares of Company Common Stock issuable upon
conversion of the Existing Company Convertible Notes, and (c) the aggregate number of shares
of Company Common Stock (on a net exercise basis) subject to issued and outstanding Company Options and Subsidiary Rollover Options
(excluding for this purpose the number of shares of Company Common Stock subject to (x) any Unvested Company Options,
(y) any Unvested Subsidiary Rollover Options, and (z) any Vested Company Options that are Out-of-the- Money Options or
Vested Subsidiary Rollover Options that are Out-of-the-Money Options), and (d) the aggregate number of shares of Company
Common Stock subject to issued and outstanding Deferred Vested Company RSU Awards and Subsidiary Rollover Deferred Vested RSU
Awards. Notwithstanding anything herein to the contrary, the Fully Diluted Company Capitalization shall exclude any shares
of Company Common Stock issued or issuable in connection with any Interim Financing Arrangement.
(iv) To add the following new definitions to Section 1.1:
“Company RSU Award” means, as of any determination time, each award of restricted stock units covering shares of Company Common Stock granted to any current or former director, manager, officer, employee, Contingent Worker or other service provider of the Company or any of its Subsidiaries that is outstanding and unexercised, including any Subsidiary Rollover RSU Award converted into a Company RSU Award in the Subsidiary Merger.
“Deferred Vested Company RSU Award” means each Company RSU Award (or portion thereof) outstanding as of immediately prior to the Effective Time that has vested, but which the underlying shares of Company Common Stock have not been settled pursuant to the terms of the individual Company RSU Award.
“Financing Merger Transaction” means, subject to the written consent of Priveterra and the Company (each in its sole discretion), any transaction or series of related transactions under which Priveterra or the Company, directly or indirectly, acquires or otherwise purchases (a) any third party Person, or (b) all or substantially all of the assets or businesses of a third party Person (in the case of each of clause (a) and (b), whether by merger, consolidation, recapitalization, purchase or issuance of equity securities, tender offer or otherwise), in each case which acquisition is for the primary purpose of acquiring assets of such third party Person, all or substantially all of which constitute cash or cash equivalents. For the avoidance of doubt, any Financing Merger Transaction shall be on terms mutually acceptable to both Priveterra and the Company, each in its sole discretion.
“First Amendment Date” means April 27, 2023.
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“Subsidiary RSU Award” means, as of any determination time, each award of restricted stock units covering shares of Subsidiary Common Stock granted to any current or former director, manager, officer, employee, Contingent Worker or other service provider of the Company or any of its Subsidiaries that is outstanding.
“Subsidiary Rollover Deferred Vested RSU Award” means, as of any determination time, each Subsidiary RSU Award (after giving effect to the Subsidiary Merger) (or portion thereof) that has vested, but which the underlying shares of Subsidiary Common Stock have not been settled pursuant to the terms of the individual Subsidiary RSU Award.
(v) The definition of “Merger Consideration” is hereby amended and restated in its entirety as follows:
“Merger Consideration” means with respect to each outstanding share of Company Common Stock (on an as converted basis after taking into effect the conversion of the Company Preferred Stock and the Existing Company Convertible Notes and after giving effect to the issuance of Company Common Stock, if any, in connection with the Subsidiary Merger and pursuant to the transactions set forth on Section 1.1(e) of the Company Disclosure Schedules) a number of shares of Class A Common Stock equal to the Exchange Ratio (and with an aggregate value, prior to giving effect to the issuance of any Company Common Stock in connection with any Interim Financing Arrangement, equal to the Closing Equity Value), allocated to the Company Stockholders (on an as converted basis after taking into effect the conversion of the Company Preferred Stock and the Existing Company Convertible Notes and after giving effect to the issuance of Company Common Stock, if any, in connection with the Subsidiary Merger and pursuant to the transactions set forth on Section 1.1(e) of the Company Disclosure Schedules) as set forth on the Allocation Schedule.
(vi) The definition of “Priveterra Expenses Cap” is hereby amended and restated in its entirety as follows:
“Priveterra Expenses Cap” means $10,300,000 or such other amount as may be otherwise mutually agreed in writing by Priveterra and the Company.
(vii) The definition of “Sponsor Forfeiture Shares” is hereby deleted in its entirety.
(b) Section 2.2. Section 2.2 shall be amended to remove any reference to the Sponsor Forfeiture Shares by (i) deleting clause (y) of Section 2.2(a), (ii) removing “, plus, any Sponsor Forfeiture Shares issued in connection therewith” from each of Section 2.2(a)(i) and 2.2(a)(iii), (iii) replacing the phrase “decreased to an amount equal to any Sponsor Forfeiture Shares, if any, that are issued in connection therewith,” in Section 2.2(a)(v) with “decreased to zero,” and (iv) deleting Section 2.2(a)(vi) in its entirety.
(c) Section 2.4. Section 2.4 of the BCA is hereby amended and restated as follows:
“Allocation Schedule. No later than three
(3) Business Days prior to the Closing Date, the Company shall deliver to Priveterra an allocation schedule (the
“Allocation Schedule”) setting forth, after giving effect to the Subsidiary Merger and the transactions set forth
on Section 1.1(e) of the Company Disclosure Schedules, (a) the number of Equity Securities held by each Company
Stockholder, the number of shares of Company Common Stock subject to each Company Warrant held by each holder thereof, the number of
shares of Company Common Stock subject to each Company Option held by each holder thereof, as well as whether each such Company
Option will be a Vested Company Option or an Unvested Company Option as of immediately prior to the Effective
Time (including Company Options issued upon the conversion of Subsidiary Rollover Options prior to the Effective
Time), the number of shares of Company Common Stock subject to each Subsidiary Rollover Option held by each holder
thereof, as well as whether each such Subsidiary Rollover Option will be a Vested Subsidiary Rollover Option or an Unvested
Subsidiary Rollover Option as of immediately prior to the Effective Time, the number of shares of Company
Common Stock subject to each Company RSU Award held by each holder thereof, as well as whether each such Company RSU Award will be a
Deferred Company RSU Award as of immediately prior to the Effective Time (including Company RSU Awards issued upon the conversion of
Subsidiary Rollover RSU Awards prior to the Effective Time) and, in the case of the Company Options, Subsidiary
Rollover Options and Company Warrant, the exercise price thereof, as well as reasonably detailed calculations with
respect to the components and subcomponents thereof, (b) the number of shares of Class A Common Stock that will be subject
to each Rollover Option and Rollover RSU Award and the exercise price of each such Rollover Option at the
Effective Time, in each case, determined in accordance with Section 2.5, as well as reasonably detailed calculations with
respect to the components and subcomponents thereof, (c) the portion of the Transaction Share Consideration allocated to each
Company Stockholder pursuant to Section 2.1(b)(vii), as well as reasonably detailed calculations with respect to the components
and subcomponents thereof, (d) the portion of the Contingent Consideration allocated to each Company Stockholder, in the event
that any Contingent Consideration becomes payable, as well as reasonably detailed calculations with respect to the components and
subcomponents thereof, and (e) a certification, duly executed by an authorized officer of the Company, that the information and
calculations delivered pursuant to clauses (a), (b), (c) and (d) of this Section 2.4 are, and will be as of
immediately prior to the Effective Time, (i) true and correct in all respects, and (ii) in accordance with the applicable
provisions of this Agreement, the Governing Documents of the Company and applicable Laws and, in the case of Company
Options, Company RSU Awards, the Company Equity Plan and any applicable grant or similar agreement with
respect to any such Company Option, Company RSU Award and, in the case of the Subsidiary Rollover Options, the
Subsidiary Equity Plan and any applicable grant or similar agreement with respect to any such Subsidiary Rollover
Option and, in the case of the Company Warrant, the terms of the applicable warrant agreement. The Company will
review any comments to the Allocation Schedule provided by Priveterra or any of its Representatives and consider in good faith and
incorporate any reasonable comments proposed by Priveterra or any of its Representatives to correct inaccuracies. Notwithstanding
the foregoing or anything to the contrary herein, the aggregate number of shares of Class A Common Stock that each Company
Stockholder will have a right to receive pursuant to Section 2.1(b)(vii) will be rounded down to the nearest whole
share.
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| (d) | Section 2.5. Section 2.5 of the BCA is hereby amended and restated as follows: |
“(a) Treatment of Subsidiary Options.
At the Subsidiary
Merger Effective Time, by virtue of the Subsidiary Merger and without any action of any Party or any other Person, each Subsidiary Option
(whether vested or unvested) shall cease to represent the right to purchase shares of Subsidiary Common Stock and shall be converted
into an option to purchase shares of Company Common Stock (each, a “Subsidiary Rollover Option”). Not less
than five Business Days prior to the Subsidiary Merger Effective Time, the Company shall deliver to Priveterra a schedule setting forth
all of the Subsidiary Options and the holders thereof, and in respect of each such Subsidiary Option, the number of Subsidiary Rollover
Options into which such Subsidiary Option will convert at the Subsidiary Merger Effective Time and the per share exercise price of such
Subsidiary Rollover Options (the “Subsidiary Rollover Option Schedule”)in an amount, at an exercise
price and subject to such terms and conditions determined as set forth below. Each Subsidiary Rollover Option shall (1) be exercisable
for, and represent the right to purchase, a number of shares of Company Common Stock (rounded down to the nearest whole share) equal
to (a) the number of shares of Subsidiary Common Stock subject to the corresponding Subsidiary Option immediately prior to the effective
time of the Subsidiary Merger, multiplied by (b) the Subsidiary Option Exchange Ratio, and (2) have an exercise
price per share of Company Common Stock (rounded up to the nearest whole cent) subject to such Subsidiary Rollover Option equal to (a) the
exercise price per share of Subsidiary Common Stock applicable to the corresponding Subsidiary Option immediately prior to the effective
time of the Subsidiary Merger, divided by (b) the Subsidiary Option Exchange Ratio. The
Subsidiary Option Schedule shall be subject to review and approval by Priveterra, with such approval not to be unreasonably withheld,
conditioned or delayed.. Priveterra and the Company shall cooperate in good faith to approve and finalize the Subsidiary Option Schedule
at least two Business Days prior to the Subsidiary Merger Effective Time. Each Subsidiary Rollover Option shall be subject
to the same terms and conditions (including applicable vesting, expiration and forfeiture provisions) that applied to the corresponding
Subsidiary Option immediately prior to the Subsidiary Merger Effective Timeeffective time of the Subsidiary Merger,
except for terms rendered inoperative by reason of the transactions contemplated by the operative documents of the Subsidiary Merger
or for such other immaterial administrative or ministerial changes as the Company Board (or the compensation committee of the Company
Board) may determine in good faith are appropriate to effectuate the administration of the Subsidiary Rollover Options. Such conversion
shall occur in a manner intended to comply with (x) for any Subsidiary Rollover Option that is an Incentive Stock Option, the requirements
of Section 424 of the Code, and (y) in each case, the requirements of Section 409A of the Code. For purposes
of this Agreement, “Subsidiary Option Exchange Ratio” shall mean a fraction, the numerator of which is the fair market value
per share of Subsidiary Common Stock as of immediately prior to the closing of the Subsidiary Merger, as determined by the mutual agreement
of the Company and Priveterra (such mutual agreement not to be unreasonably withheld, conditioned or delayed) and the denominator of
which is the Closing Equity Value Per Share.
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(b) Treatment of Subsidiary RSU Awards. At the Subsidiary Merger Effective Time, by virtue of the Subsidiary Merger and without any action of any Party or any other Person, each Subsidiary RSU Award shall cease to represent the right to receive shares of Subsidiary Common Stock and shall be converted into a Subsidiary RSU Award representing the right to receive shares of Company Common Stock (each, a “Subsidiary Rollover RSU Award”). Not less than five Business Days prior to the Subsidiary Merger Effective Time, the Company shall deliver to Priveterra a schedule setting forth all of the Subsidiary RSU Awards and the holders thereof, and in respect of each such Subsidiary RSU Award, the number of Subsidiary Rollover RSU Awards into which such Subsidiary RSU Awards will convert at the Subsidiary Merger Effective Time (the “Subsidiary Rollover RSU Award Schedule”). The Subsidiary Rollover RSU Award Schedule shall be subject to review and approval by Priveterra, with such approval not to be unreasonably withheld, conditioned or delayed. Priveterra and the Company shall cooperate in good faith to approve and finalize the Subsidiary RSU Award Schedule at least two Business Days prior to the Subsidiary Merger Effective Time. Each Subsidiary Rollover RSU Award shall be subject to the same terms and conditions (including applicable time- based and performance-based vesting, deferral, expiration and forfeiture provisions) that applied to the corresponding Subsidiary RSU Award immediately prior to the effective time of the Subsidiary Merger, except for terms rendered inoperative by reason of the transactions contemplated by the operative documents of the Subsidiary Merger or for such other immaterial administrative or ministerial changes as the Company Board (or the compensation committee of the Company Board) may determine in good faith are appropriate to effectuate the administration of the Subsidiary Rollover RSU Awards.
(b)(c) Treatment
of Company Options. At the Effective Time, by virtue of the Merger and without any action of any Party or any other Person (but subject
to, in the case of the Company, Section 2.5(e)), each Company Option (whether a Vested Company Option or an Unvested Company Option),
including any Subsidiary Options that have been converted into Company Options in accordance with Section 2.5(a)), shall cease to
represent the right to purchase shares of Company Common Stock and shall be converted into an option to purchase shares of Class A
Common Stock (each, a “Rollover Option”) in an amount, at an exercise price and subject to such terms and conditions
determined as set forth below. Each Rollover Option shall (i) be exercisable for, and represent the right to purchase, a number
of shares of Class A Common Stock (rounded down to the nearest whole share) equal to (A) the number of shares of Company Common
Stock subject to the corresponding Company Option immediately prior to the Effective Time, multiplied by (B) the Exchange Ratio,
and (ii) have an exercise price per share of Class A Common Stock (rounded up to the nearest whole cent) subject to such Rollover
Option equal to (A) the exercise price per share of Company Common Stock applicable to the corresponding Company Option immediately
prior to the Effective Time, divided by (B) the Exchange Ratio. Each Rollover Option shall be subject to the same terms and conditions
(including applicable vesting, expiration and forfeiture provisions) that applied to the corresponding Company Option immediately prior
to the Effective Time, except for terms rendered inoperative by reason of the transactions contemplated by this Agreement or the Ancillary
Documents or for such other immaterial administrative or ministerial changes as the Priveterra Board (or the compensation committee of
the Priveterra Board) may determine in good faith are appropriate to effectuate the administration of the Rollover Options. Such conversion
shall occur in a manner intended to comply with (x) for any Rollover Option that is an Incentive Stock Option, the requirements
of Section 424 of the Code, and (y) in each case, the requirements of Section 409A of the Code.
(d) Treatment of Company RSU Awards. At the Effective Time, by virtue of the Merger and without any action of any Party or any other Person (but subject to, in the case of the Company, Section 2.5(e)), each Company RSU Award (including any Deferred Company RSU Award), including any Subsidiary RSU Awards that have been converted into Company RSU Awards in accordance with Section 2.5(b)), shall cease to represent the right to purchase shares of Company Common Stock and shall be converted into a Company RSU Award representing the right to purchase shares of Class A Common Stock (each, a “Rollover RSU Award”) in an amount and subject to such terms and conditions determined as set forth below. Each Rollover RSU Award shall represent the right to purchase a number of shares of Class A Common Stock (rounded down to the nearest whole share) equal to (i) the number of shares of Company Common Stock subject to the corresponding Company RSU Award immediately prior to the Effective Time, multiplied by (ii) the Exchange Ratio. Each Rollover Option shall be subject to the same terms and conditions (including applicable time-based and performance-based vesting, deferral, expiration and forfeiture provisions) that applied to the corresponding Company RSU Award immediately prior to the Effective Time, except for terms rendered inoperative by reason of the transactions contemplated by this Agreement or the Ancillary Documents or for such other immaterial administrative or ministerial changes as the Priveterra Board (or the compensation committee of the Priveterra Board) may determine in good faith are appropriate to effectuate the administration of the Rollover RSU Awards.
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(c)(e)
Prior to the (i) Closing, in the case of Company Options and Company RSU Awards, and (ii) the consummation
of the Subsidiary Merger, in the case of Subsidiary Options and Subsidiary RSU Awards, the Company and/or the Subsidiary,
as applicable, shall take, or cause to be taken, all necessary or appropriate actions under the applicable Equity Plan (and the underlying
grant, award or similar agreements) or otherwise to give effect to the provisions of this Section 2.5. At the Effective Time, Priveterra
shall assume the Equity Plans and (1) all Company Options (whether vested or unvested) and Company RSU Awards (whether
deferred or unvested) shall no longer be outstanding and shall automatically be converted into Rollover Options and
Rollover RSU Awards, respectively, and each holder thereof shall cease to have any rights with respect thereto or under
the applicable Equity Plan, except as otherwise expressly provided for in this Section 2.5, and (2) all shares of Company Common
Stock reserved for issuance pursuant to the Equity Plans shall automatically be cancelled.”
(e) Section 3.4.
(i) Section 3.4(b) of the BCA is hereby amended and restated in its entirety as follows:
“(a) All of the issued share capital, stock or other voting or equity securities of each Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable. All of the ownership interests in each Subsidiary are owned by the Company, directly or indirectly, free and clear of any Lien and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such ownership interests) and have not been issued in violation of preemptive or similar rights. Section 3.4(b) of the Company Disclosure Schedules sets forth, as of the date of this Agreement, a true and complete statement of with respect to each Subsidiary Option, (A) the date of grant, (B) any applicable exercise (or similar) price, (C) the expiration date, (D) any applicable vesting schedule (including acceleration provisions), (E) the number of shares of Subsidiary Common Stock subject to the Subsidiary Option on the date of grant, and (F) whether the Subsidiary Option is an Incentive Stock Option. Section 3.4(b) of the Company Disclosure Schedules sets forth, as of the First Amendment Date a true and complete statement of with respect to each Subsidiary RSU Award, (A) the date of grant, (B) any applicable vesting schedule (including acceleration provisions), (C) the number of shares of Subsidiary Common Stock subject to the Subsidiary RSU Award on the date of this Agreement, and (D) whether the Subsidiary RSU Award is subject to deferral. Other than the Subsidiary Options and Subsidiary RSU Awards, there are no outstanding (ii) subscriptions, calls, options, warrants, rights (including preemptive rights), puts or other securities of any Subsidiary convertible into or exchangeable or exercisable for shares or voting or equity securities of any Subsidiary, or any other Contracts to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound obligating the Company or any Subsidiary to issue or sell any shares of, other equity interests in or debt securities of, any Subsidiary, or (iii) equity equivalents, phantom stock, options, appreciation rights, stock units, profits interests or other rights to acquire from the Company or any Subsidiary, or other obligation of the Company or any Subsidiary to issue, any shares, voting or equity securities or securities convertible into or exchangeable for shares or voting or equity securities of any Subsidiary (the items in clauses (i) and (ii) being, collectively, “Subsidiary Securities”). There are no outstanding obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities. None of the Subsidiaries owns any equity, ownership, profit, voting or similar interest in, or any interest convertible, exchangeable or exercisable for, any equity, profit, voting or similar interest in, any Person. No Subsidiary is party to any shareholders agreement, voting agreement, proxies, registration rights agreement or other similar agreements relating to its equity interests.”
(ii) Section 3.4(b) of the Company Disclosure Schedules is hereby deleted in its entirety and replaced with the item designated Section 3.4(b) on Exhibit D attached hereto.
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| (f) | Section 5.1. |
(i) Section 5.1(b)(xx) of the Company Disclosure Schedules shall be updated to include the contract amendment set forth on Exhibit A.
| (g) | Section 5.7. |
(i)Section 5.7 of the Company Disclosure Schedules shall be amended by deleting the number “2,999,810” and replacing it with the number “3,839,892”.
| (h) | Section 5.16. |
(i) Section 5.16(a) shall be amended to replace the reference to “seven (7) directors” with “five (5) directors”.
(ii) Section 5.16(b) shall be amended to replace the reference to “Three (3) individuals” with “Two (2) individuals”.
(iii) Section 5.16(c) shall be amended to replace the reference to “two (2) individuals” with “one (1) individual”.
(iv) Section 5.16(e) of the Company Disclosure Schedules shall be amended and restated in its entirety in the form attached hereto as Exhibit B.
(i) Section 5.17(c). Section 5.17(c) is hereby deleted in its entirety and replaced with “(c) [Reserved]”, and the BCA is hereby further amended to (i) remove any reference to the “Priveterra Bridge Loan”, the “Priveterra Bridge Loan Amount” and the “Priveterra Bridge Loan Date” and (ii) to revise any reference to “Bridge Loan” or “Bridge Loan Amount” to “Company Bridge Loan” and “Company Bridge Loan Amount”, respectively.
(j) Section 5.17(d). Section 5.17(d) of the Priveterra Disclosure Schedule shall be updated to include the financing arrangements set forth on Exhibit C.
(k) Section 6.3(c). Section 6.3(c) of the BCA is hereby amended and restated in its entirety as follows:
“(c) there being at least $45,000,00040,000,000 in
Available Closing Cash;”
(l) Section 7.1(d). Section 7.1(d) of the BCA is hereby amended as follows:
“(d) by either Priveterra or the Company, if the transactions
contemplated by this Agreement (including the Closing) shall not have been consummated on or prior to March 1, 2023 July 21,
2023 (the “Termination Date”); provided, that in the event the Registration Statement/Proxy
Statement has not been filed with the SEC on or prior to December 23, 2022, but only to the extent such delay is not the result
of a Priveterra Filing Breach, then for each day between December 23, 2022 and the date on which the Registration Statement/Proxy
Statement is initially filed with the SEC, the Termination Date shall automatically be extended by one day; provided, further, that in
the event that the Company Stockholder Interim Financing Commitments have not been entered into and delivered to Priveterra on or prior
to January 3, 2023, and remain in effect as of such date, then for each day between January 3, 2023 and the date on which the
Company Stockholder Interim Financing Commitments have been entered into and delivered to Priveterra, the Termination Date shall automatically
be extended by one day (without duplication with any extension pursuant to the immediately preceding proviso); provided, further, if
the conditions as set forth on Section 7.1(d) of the Priveterra Disclosure Schedules are satisfied, then the Termination Date
shall automatically be extended by an additional three (3) months (after giving effect to any prior extension of the Termination
Date), and such date, as so extended pursuant to the preceding two provisos and this proviso, shall be the Termination Date for all purposes
of this Agreement; provided, further, that (i) the right to terminate this
Agreement pursuant to this Section 7.1(d) shall not be available to Priveterra if any Priveterra Party’s breach of any
of its covenants or obligations under this Agreement shall have proximately caused the failure to consummate the transactions contemplated
by this Agreement on or before the Termination Date, and (ii) the right to terminate this Agreement pursuant
to this Section 7.1(d) shall not be available to the Company if the Company’s breach of its covenants or obligations under
this Agreement shall have proximately caused the failure to consummate the transactions contemplated by this Agreement on or before the
Termination Date;”
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(m) Exhibit E. Exhibit E to the BCA shall be amended and restated in its entirety in the form attached hereto as Exhibit E hereto.
2. Effect of Amendments and Modifications. Except as expressly amended hereby, the BCA shall remain unaltered and in full force and effect and the respective terms, conditions or covenants thereof are hereby in all respects confirmed. Whenever the BCA is referred to in any agreement, document or other instrument, such reference will be to the BCA as amended by this Amendment. For the avoidance of doubt, each reference in the BCA, as amended hereby, to “the date hereof”, the “date of this Agreement” and derivations thereof and other similar phrases shall continue to refer to December 12, 2022.
3. Miscellaneous. Sections 8.5, 8.7, 8.10, 8.11, 8.15, 8.16 and 8.17 of the BCA are incorporated herein by reference, mutatis mutandis.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the Parties has caused this Amendment No. 1 to the Business Combination Agreement to be duly executed on its behalf as of the day and year first above written.
| PRIVETERRA ACQUISITION CORP. | |||
| By: | /s/ Oleg Grodnensky | ||
| Name: | Oleg Grodnensky | ||
| Title: | Secretary | ||
| PRIVETERRA MERGER SUB, INC. | |||
| By: | /s/ Oleg Grodnensky | ||
| Name: | Oleg Grodnensky | ||
| Title: | Manager | ||
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IN WITNESS WHEREOF, each of the Parties has caused this Amendment No. 1 to the Business Combination Agreement to be duly executed on its behalf as of the day and year first above written.
| PRIVETERRA ACQUISITION CORP. | |||
| By: | |||
| Name: | Oleg Grodnensky | ||
| Title: | Secretary | ||
| PRIVETERRA MERGER SUB, INC. | |||
| By: | /s/ Robert J. Palmisano | ||
| Name: | Robert J. Palmisano | ||
| Title: | President | ||
G-10
| AEON BIOPHARMA, INC. | |||
| By: | /s/ Marc Forth | ||
| Name: | Marc Forth | ||
| Title: | Chief Executive Officer | ||
G-11
Exhibit 10.1
Execution Version
Confidential
AMENDMENT NO. 1
to
SPONSOR SUPPORT AGREEMENT
This Amendment No. 1 to the Sponsor Support Agreement (this “Amendment”) is made as of April 27, 2023, by and among Priveterra Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), Priveterra Acquisition Corp., a Delaware corporation (the “SPAC”), the other Persons party to the Sponsor Support Agreement as the Other Priveterra Insiders (the “Other Priveterra Insiders”) and AEON Biopharma, Inc., a Delaware corporation (the “Company”). Capitalized terms used, but not otherwise defined herein, shall have the meaning given to them in the BCA (as defined below).
WHEREAS, on December 12, 2022, the SPAC, the Company and certain other Persons entered into that certain Business Combination Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms, the “BCA”);
WHEREAS, contemporaneously with the execution and delivery of the BCA, the Sponsor, the Other Priveterra Insiders, the SPAC and the Company entered into that certain Sponsor Support Agreement dated December 12, 2022 (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Sponsor Support Agreement”);
WHEREAS, pursuant to Section 10 of the Sponsor Support Agreement, which incorporates by reference Section 8.3 of the BCA, mutatis mutandis, the Sponsor Support Agreement may be amended or modified only by a duly authorized agreement in writing executed by each of the Parties in the same manner as the Sponsor Support Agreement; and
WHEREAS, each of the Sponsor, the Other Priveterra Insiders, the SPAC and the Company desire to amend the Sponsor Support Agreement on the terms set forth in this Amendment.
NOW, THEREFORE, in consideration for the mutual promises made herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Sponsor, the Other Priveterra Insiders, the SPAC and the Company hereby agree to amend the Sponsor Support Agreement as follows:
1. Amendment to Section 2 of the Sponsor Support Agreement. Section 2 of the Sponsor Support Agreement is hereby amended and restated in its entirety to read:
“2. Vesting Class A Common Stock.
(a) Subject to, and conditioned upon the occurrence of and effective immediately after the Closing, 70% of the Sponsor Shares (i.e., 4,830,000 Sponsor Shares) (the “Contingent Founder Shares”) shall be unvested and subject to the restrictions and forfeiture provisions set forth in this Sponsor Support Agreement. The remaining 30% of the Sponsor Shares and 100% of the Private Placement Warrants shall not be subject to the provisions set forth below in this Section 2 (the “Vested Founder Securities”).
(b) For purpose of this Agreement, the term “Average Price Per Share” means the effective average price per share of the Class A Common Stock issued by Priveterra (or the Surviving Corporation, following the Closing) in connection with all of the Qualifying Financing Transactions, determined at the Closing (in the case of any such Shares of Class A Common Stock issued prior to or at the Closing) or in the case of any shares of Class A Common Stock issued after the Closing, at the time such shares are actually issued, subject to the following:
(i) the Average Price Per Share shall be calculated without including the effect of any Qualifying Financing Transaction or Interim Financing Arrangement entered into by Priveterra or the Company with any Company Stockholder or holder of Company Warrants (or any Affiliate thereof);
(ii) in the case of any Qualifying Financing Transaction that is a loan, advance, convertible debenture or similar instrument (an “ELOC Advance”) issued in connection with an equity line of credit, standby equity line of credit or similar financing arrangement (an “ELOC”), the Average Price Per Share for such ELOC Advance shall be the average price per share of the Class A Common Stock issued by Priveterra following the Closing pursuant to the ELOC for the purposes of repaying the ELOC Advance (for example, if the Company draws $10 million from the ELOC pursuant to an ELOC Advance and issues $5 million of Class A Common Stock to repay the ELOC Advance at $7.00 per share and $5 million at $4.00 per share, the effective price of the ELOC Advance would be $5.50/share (e.g., ($7 * 50%) + ($4 *50%) = $5.50)); and
(iii) in the case of any Qualifying Financing Transaction that is a Financing Merger Transaction, the Average Price Per Share for such Financing Merger Transaction shall be calculated by dividing the amount of available cash proceeds delivered by the third party Person acquired by Priveterra or the Company in such Financing Merger Transaction, and subtracting the amount of any fees, expenses, assumed indebtedness (including long-term indebtedness), or current liabilities that are or will be payable by or assumed by Priveterra, the Company or the Surviving Corporation in connection with such Financing Merger Transaction, divided by the number of shares of Class A Common Stock issued at the closing of such Financing Merger Transaction.
(c) If on the date upon which all Interim Financings, equity lines of credit, backstop commitments, non-redemption agreements, forward purchase agreements or other similar financing arrangements entered into prior to the Closing or following the Closing with a financing provider or source identified to the Company by the SPAC prior to the Closing (each a “Qualifying Financing Transaction”) have terminated or expired (such date, the “Test Date”), the Average Price Per Share, determined as of the Test Date (the “Test Date Average Price Per Share”) is greater than or equal to $5.00 per share (the “Test Date Price Per Share Threshold”), then the Contingent Founder Shares shall vest as set forth in Section 2(d); provided that, if the Test Date Average Price Per Share is less than $5.00 per share, then the Contingent Founder Shares shall be forfeited and surrendered to the Company for no consideration.
(d) If the Test Date Average Price Per Share Threshold is met, the Contingent Founder Shares shall vest, and except as otherwise provided in this Section 2, shall become free of the provisions set forth in this Section 2 as follows:
(i) 1,380,000 Sponsor Shares shall vest immediately without any further action on the part of any Person;
(ii) 1,000,000 of the Contingent Founder Shares (the “Migraine Phase 3 Contingent Founder Shares”) shall vest upon the achievement of the conditions for the issuance of the Migraine Phase 3 Contingent Consideration Shares on or prior to the Migraine Phase 3 Outside Date in accordance with the terms of Section 2.2(a)(i) of the Business Combination Agreement;
(iii) 1,000,000 of the Contingent Founder Shares (the “CD BLA Contingent Founder Shares”) shall vest upon the achievement of the conditions for the issuance of the CD BLA Contingent Consideration Shares on or prior to the CD BLA Outside Date in accordance with the terms of Section 2.2(a)(ii) of the Business Combination Agreement; and
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(iv) 1,450,000 of the Contingent Founder Shares (the “Episodic/Chronic Migraine Contingent Founder Shares”) shall vest upon the earlier of (x) the achievement of the conditions for the issuance of the Episodic Migraine Contingent Consideration Shares on or before the Episodic Migraine Outside Date in accordance with the terms of Section 2.2(a)(iii) of the Business Combination Agreement and (y) the achievement of the conditions for the issuance of the Chronic Migraine Contingent Consideration Shares on or before the Chronic Migraine Outside Date in accordance with the terms of Section 2.2(a)(iv) of the Business Combination Agreement.
Notwithstanding the foregoing, in the event that the Test Date occurs following the date upon which any Contingent Founder Shares would have vested pursuant to Sections 2(d)(ii)–(iv) had the Test Date occurred before such date, then the Contingent Founder Shares that would have vested had the Test Date already occurred will vest immediately upon the determination that the Test Date Price Per Share Threshold has been met.
(e) Following the Closing, if a Change of Control of Priveterra shall occur on or before the applicable outside date as set forth in Section 2.2(d) of the Business Combination Agreement (each, an “Outside Date”), respectively, then the conditions for the vesting of any Contingent Founder Shares that remains unvested as of immediately prior to the consummation of such Change of Control shall be deemed to have been achieved and any such Contingent Founder Shares shall immediately vest as of immediately prior to the consummation of such Change of Control. Any Contingent Founder Shares that remain unvested pursuant to Section 2(d)(i)–(iv) (and the related portion of any dividends and earnings thereon) as of the expiration of the applicable Outside Date set forth therein (as such Outside Date may be extended pursuant to Section 2.2(c) of the Business Combination Agreement) shall be automatically forfeited without any further action by any other Person, immediately transferred to Priveterra without consideration for such transfer and canceled by Priveterra. In connection with a Change of Control, in the event any Qualifying Financing Transaction remains outstanding as of immediately prior to the consummation of such Change of Control, then the “Test Date” for purposes of Section 2(c) shall deemed to be the day immediately prior to the consummation of such Change of Control and in the event any Sponsor Shares are issuable pursuant to Section 2(d), such Sponsor Shares shall be subject to this Section 2(e) in accordance with the terms hereof.
(f) The Contingent Founder Shares shall be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into shares of Class A Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Class A Common Stock, occurring on or after the date hereof and prior to the time any such Contingent Founder Shares shall have vested in accordance with this Section 2.
(g) Any dividends or other distributions paid with respect to the Contingent Founder Shares during any period of time that such Contingent Founding Shares are subject to vesting pursuant to the terms of this Section 2 shall be deposited by Priveterra for the benefit of the Sponsor in a separate account held and maintained solely for the benefit of Sponsor (the “Escrow Account”), subject to the terms and conditions of that certain Escrow Agreement to be entered into by and between the parties hereto in form and substance attached as Exhibit A (the “Escrow Agreement”). The parties agree that for U.S. federal, state and local tax purposes, Sponsor is the owner of the Contingent Founder Shares and the Escrow Account, and in furtherance of the foregoing, Sponsor will be treated as the recipient of (A) any dividends or other distributions paid with respect to the Contingent Founder Shares (“Dividends”) and (B) any interest or other income or gains earned with respect to amounts held in the Escrow Account (“Escrow Income”), whether or not ultimately distributed from the Escrow Account to Sponsor. Upon the vesting of any Contingent Founder Shares pursuant to this Section 2, Priveterra shall instruct the escrow agent to release any amounts held in the Escrow Account (including Dividends and Escrow Income) in respect of such Contingent Founder Shares to Sponsor. In the event that any Contingent Founder Shares are forfeited pursuant to the terms of this Section 2, then any amounts held in the Escrow Account (including Dividends and Escrow Income) in respect of such Contingent Founder Shares forfeited pursuant to this Section 2 shall be distributed from the Escrow Account to Priveterra, such payment to be made in the manner set forth in the Escrow Agreement. For the avoidance of doubt, no tax reporting shall be required in respect of the release of all or any portion of any amounts from the Escrow Account to Sponsor, and Sponsor shall be responsible for paying taxes (including any penalties and interest thereon) on all taxable Dividends and any Escrow Income, and for filing all necessary tax returns with respect to such income.
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(h) The Sponsor shall not, and hereby waives any right to, vote (whether at any meeting of the holders of Class A Common Stock, by written resolution or otherwise) the Contingent Founder Shares owned by it during any period of time that such Contingent Founder Shares are subject to vesting pursuant to the terms of this Section 2.
(i) In furtherance of the foregoing, Priveterra hereby agrees to (i) place a revocable stop order on all Contingent Founder Shares subject to Sections 2(a), 2(d) and 2(e), including those which may be covered by a registration statement, and (ii) notify Priveterra’s transfer agent in writing of such stop order and the restrictions on such Contingent Founder Shares under Sections 2(a), 2(d) and 2(e) and direct Priveterra’s transfer agent not to process any attempts by the Sponsor, or any other Person, to Transfer any Contingent Founder Shares except in compliance with Sections 2(a), 2(d) and 2(e).”
2. Amendment to Section 4 of the Sponsor Support Agreement. Section 5(b) of the Sponsor Support Agreement is hereby amended and restated in its entirety to read “(b) [Reserved].”
3. Effect of Amendments and Modifications. Except as expressly amended hereby, the Sponsor Support Agreement shall remain unaltered and in full force and effect and the respective terms, conditions or covenants thereof are hereby in all respects confirmed. Whenever the Sponsor Support Agreement is referred to in any agreement, document or other instrument, such reference will be to the Sponsor Support Agreement as amended by this Amendment. For the avoidance of doubt, each reference in the Sponsor Support Agreement, as amended hereby, to “the date hereof”, the “date of this Agreement” and derivations thereof and other similar phrases shall continue to refer to December 12, 2022.
4. Miscellaneous. Sections 8.5, 8.7, 8.10, 8.11, 8.15, 8.16 and 8.17 of the BCA are incorporated herein by reference, mutatis mutandis.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each of the Parties has caused this Amendment to be duly executed on its behalf as of the day and year first above written.
| PRIVETERRA ACQUISITION CORP. | ||
| By: | /s/ Oleg Grodnensky | |
| Name: Oleg Grodnensky | ||
| Title: Secretary | ||
| PRIVETERRA SPONSOR, LLC | ||
| By: | /s/ Oleg Grodnensky | |
| Name: Oleg Grodnensky | ||
| Title: Manager | ||
| PRIVETERRA MERGER SUB, INC. | ||
| By: | /s/ Robert J. Palmisano | |
| Name: Robert J. Palmisano | ||
| Title: President | ||
| /s/ Vikram Malik | ||
| Name: Vikram Malik | ||
| /s/ Oleg Grodnensky | ||
| Name: Oleg Grodnensky | ||
| /s/ Julie B. Andrews | ||
| Name: Julie B. Andrews | ||
| /s/ Lance A. Berry | ||
| Name: Lance A. Berry | ||
| /s/ James A. Lightman | ||
| Name: James A. Lightman | ||
[Signature Page to Amendment No. 1 to the Sponsor Support Agreement]
| AEON BIOPHARMA, INC. | ||
| By: | /s/ Marc Forth | |
| Name: Marc Forth | ||
| Title: Chief Executive Officer | ||
[Signature Page to Amendment No. 1 to the Sponsor Support Agreement]
Exhibit 10.2
Execution Version
THIS PROMISSORY NOTE (“NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
| Principal Amount: $1,000,000 | Dated as of April 27, 2023 |
PRIVETERRA Acquisition Corp., a Delaware corporation (the “Maker”), promises to pay to the order of Priveterra Sponsor, LLC or its registered assigns or successors in interest (the “Payee”), or order, the principal sum of One Million Dollars ($1,000,000) or such lesser amount as shall have been advanced by Payee to Maker and shall remain unpaid under this Note 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 or as otherwise determined by the Maker 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 plus any interest payable thereon pursuant to Section 3 shall be payable on the date on which Maker consummates an initial business combination with AEON Biopharma, Inc., a Delaware corporation (“AEON”, such transaction, the “AEON Business Combination” and such date, the “Maturity Date”). In the event that the AEON Business Combination is not consummated or is otherwise terminated, the full amount of the Principal Amount of this Note shall be payable by Maker to Payee within fifteen (15) days of such failure to consummate or termination; provided, that in no event shall Maker make any payment of the Principal Amount other than from cash of Maker held outside the trust account established in connection with the Maker’s initial public offering and to the extent the working capital of Maker held outside such trust account is insufficient for payment of the outstanding Principal Amount, Maker shall have no further liability for any excess amount of unpaid principal balance under this Note to Payee. The principal balance may be prepaid at any time without penalty. Under no circumstances shall any individual, including but not limited to any officer, director, employee or interest holder of Maker, be obligated personally for any obligations or liabilities of the Maker hereunder.
2. Use of Proceeds. Maker and Payee agree that Maker may use the Principal Amount solely to fund a working capital loan by AEON to Maker, for purposes of funding the working capital of Maker.
3. Interest. No interest shall accrue on the unpaid principal balance of this Note.
4. Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to the reduction of the unpaid principal balance of this Note.
5. Events of Default. The following shall constitute an event of default (“Event of Default”):
| (a) | Failure to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business days after the Maturity Date. |
| (b) | Voluntary Bankruptcy, Dissolution, Etc. The commencement by Maker 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 Maker 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 Maker generally to pay its debts as such debts become due, or commencement of Maker’s liquidation or dissolution proceedings or the taking of corporate action by Maker in furtherance of any of the foregoing. |
| (c) | Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker 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 Maker 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. |
6. Remedies.
| (a) | Upon the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker, 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 5(b) or 5(c), the unpaid principal balance of this Note, and all other sums 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. |
7. Waivers. Maker 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 the 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 Maker 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 Maker 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.
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8. Unconditional Liability. Maker 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 makers, endorsers, guarantors or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.
9. Most Favored Nation. Maker is entering into this Note in connection with its efforts to seek financing for the purpose of providing working capital to Maker in connection with the consummation of the AEON Business Combination (the “Working Capital Financing”). Maker agrees that in the event that any other third party persons participate in the Financing on more favorable terms than those afforded to Payee under this Note, other than terms particular to the regulatory requirements of such other investor or its affiliates or related funds that are mutual funds, then Maker shall immediately inform the Payee of the more favorable terms and the Payee shall have the right to elect to receive such more favorable terms, in which case, if the Payee so elects, the parties hereto shall promptly amend this Note to reflect the more favorable terms.
10. Confidentiality. Each of Maker and Payee shall keep confidential and will not disclose or divulge the contents of this Note and the transactions contemplated hereby, other than (a) to Maker or Payee, or any of its or their respective legal advisors, or (b) as required by law, regulation, rule, court order or subpoena, provided that such disclosing party shall promptly notify the other party of such disclosure and will take reasonable steps to minimize the extent of any such required disclosure.
11. Notices. All notices, statements or other documents that are required or contemplated by this Note shall be: (i) in writing and delivered 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.
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12. Governing Law. Maker and Payee agree that this Note, and all actions or proceedings arising therefrom or relating thereto, shall be construed and enforced in accordance with the laws of the State of New York, and shall be tried and litigated in state or federal courts located in the Borough or Manhattan, New York City, State of New York.
13. Severability. Any provision contained in this Note that 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.
14. Trust Waiver. Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account to be established in which the proceeds of the IPO conducted by the Maker are to be deposited (including, if any, the deferred underwriters’ discounts and commissions, and any proceeds from the sale of warrants issued in a private placement deposited in the trust account), as described in greater detail in the registration statement and prospectus to be filed with the Securities and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account for any reason whatsoever.
15. Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of the Maker and the Payee.
16. Effectiveness. This Note shall become effective only upon the execution and delivery of the First Amendment to the Business Combination Agreement (“First Amendment to BCA”), by and among AEON Biopharma, Inc., Maker and Priveterra Merger Sub, Inc. In the event that the First Amendment to BCA is not executed, this Note shall be deemed null and void, and be of no further force and effect. Payee shall pay Maker, as consideration for this Note, up to One Million Dollars ($1,000,000.00), by check or wire transfer of immediately available funds or as otherwise determined by the Maker, to Maker’s account if and when requested by Maker.
17. Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provisions will be excluded from this Note and the balance of the Note will be interpreted as if such provisions were so excluded and this Note will be enforceable in accordance with its terms.
18. Assignment. 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.
19. Expenses. Each party will pay all costs and expenses that it incurs with respect to the preparation, execution and performance of this Note, including all fees and expenses of agents representatives, financial advisors, legal counsel and accountants.
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20. Counterparts. This Note may be executed in counterparts, each of which will be deemed an original, but all of which together will be deemed to be one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method, and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.
21. Further Assurances. From time to time, the parties will execute and deliver such additional documents and will provide such additional information as may reasonably be required to carry out the terms of this Note and any agreements executed in connection herewith.
[Signature page follows]
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IN WITNESS WHEREOF, Payee, 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.
| PAYEE | ||
| Priveterra Sponsor, LLC | ||
| By: | /s/ Oleg Grodnensky | |
| Name: Oleg Grodnensky | ||
| Title: Manager | ||
[Signature Page to Promissory Note]
IN WITNESS WHEREOF, Maker, 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.
| PRIVETERRA ACQUISITION CORP. | ||
| By: | /s/ Oleg Grodnensky | |
| Name: Oleg Grodnensky | ||
| Title: Chief Financial Officer |
[Signature Page to Promissory Note]