gtbp_ex101
Exhibit 10.1
This
Settlement Agreement (the “Agreement”) is made and
entered into by and among Alto Opportunity Master Fund, SPC –
Segregated Master Portfolio B (“Alto B”), GT Biopharma
Inc. (“GT
Biopharma”), Anthony Cataldo (“Cataldo”) and Paul
Kessler (“Kessler”). Alto B, GT
Biopharma, Cataldo and Kessler are each referred to as a
“Party”
and, collectively, as “Parties.”
WHEREAS, on January 22, 2018, Alto B and
GT Biopharma executed a Securities Purchase Agreement (the
“SPA”)
pursuant to which Alto B purchased from GT Biopharma a senior
convertible note in an original
principal amount of $2,200,002.20 (the “Original Note”) and
warrants (the “Original Warrants” and,
together with the Original Note, the “Original Securities”) to
purchase shares of GT Biopharma’s common stock, par value
$0.001 per share (the “Common
Stock”);
WHEREAS, Anthony Cataldo was during
certain relevant times Chairman of GT Biopharma’s Board of
Directors, and Paul Kessler was and is a shareholder of GT
Biopharma;
WHEREAS, a dispute arose between GT
Biopharma and Alto B regarding GT Biopharma’s obligations
under the terms of the SPA and the Original Securities issued
thereunder;
WHEREAS, on August 1, 2018, GT Biopharma
commenced an action against Alto B and Empery Asset Master Ltd. and
certain of its related funds (collectively, the “Empery Funds”) captioned
GT Biopharma Inc., v. Empery Asset
Master LTD., et al., Case No. 1:18-cv-06970 (GDB) (S.D.N.Y.)
(the “SDNY
Action”), alleging, inter alia, that Alto B had improperly
sold short GT Biopharma securities;
WHEREAS, on August 27, 2018, Cataldo
commenced an action against Alto B and the Empery Funds captioned
Anthony Cataldo v. Empery Asset
Master LTD., et al., Case No. SC129731 (Sup. Ct. Cal.) (the
“California
Action”), alleging, inter alia, that Alto B had tortuously
interfered with Cataldo’s employment agreement by suggesting
to GT Biopharma’s placement agent that GT Biopharma should
“bolster” its management, and by engaging in the short
selling alleged in the SDNY Action;
WHEREAS, Alto B provided GT Biopharma
with trading records and third-party affidavits, showing that Alto
B had not engaged in any of the trading alleged in either of the
SDNY Action or California Action;
WHEREAS, on October 3, 2018, GT
Biopharma voluntarily dismissed the SDNY Action against Alto B and
the Empery Funds without prejudice;
WHEREAS, on December 24, 2018, the
Empery Funds commenced an action against GT Biopharma captioned
Empery Asset Master LTD., et al.,
v. GT Biopharma, Inc., Index No. 656408/2018 (Sup. Ct. N.Y.
Cnty.) (as amended, the “New York Action”),
alleging, inter alia, that
GT Biopharma was in breach of certain of its obligations under the
SPA (the New York Action, together with the SDNY Action and the
California Action, are referred to herein as the
“Litigations”);
WHEREAS, the New York Action was amended
by the Empery Funds to assert claims against Kessler for tortious
interference with the SPA and defamation;
WHEREAS, on February 8, 2019, Cataldo
dismissed the California Action with prejudice against Alto B and
the Empery Funds;
WHEREAS, on June 24, 2020, Alto B
delivered a demand letter to GT Biopharma asserting identical or
nearly identical claims to those asserted in the New York Action
(the “Demand
Letter”);
WHEREAS, the Parties desire to fully
settle and resolve all remaining issues, disputes, claims and
causes of action that were raised, or that could have been raised,
relating in every and any way to the Litigations or the Demand
Letter and their relationship to each other, to avoid further
expense and inconvenience of litigation, without any admission of
liability or wrongdoing on the part of GT Biopharma, Cataldo or
Kessler;
WHEREAS, GT Biopharma, Cataldo, and
Kessler deny each and every one of Alto B's allegations of wrongful
conduct, and deny that any conduct challenged by Alto B caused any
damage whatsoever, and have asserted a number of defenses to Alto
B’s claims;
WHEREAS, the Parties agree that this
Agreement shall not be deemed or construed to be an admission or
evidence of any violation of any statute or law or of any liability
or wrongdoing by GT Biopharma, Cataldo or Kessler, or of the truth
of any claim or allegation or a waiver of any defenses
thereto;
AND WHEREAS, the Parties, each acting on
his, her or its own behalf, have approved of the settlement terms
described below.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, including in return for the promises and covenants
undertaken by the Parties herein and the releases given herein, the
Parties agree as follows:
1. Settlement
Exchange:
a. Settlement Payment: Within ten
(10) Business Days of the date on which this Agreement is fully
executed, GT Biopharma shall pay to Alto B a cash payment in the
amount of $180,000 (the “Settlement Payment”)
solely in exchange for the releases and other covenants set forth
in Section 2 of this Agreement. The Settlement Payment will be made
to Alto B via wire transfer of immediately available funds in
accordance with the wire transfer information to be provided by
Alto B.
b. Settlement Shares and Settlement
Note: Within five (5) Business Days of the date on which
this Agreement is fully executed, GT Biopharma shall (i) credit
960,000 shares of Common Stock to the balance account of Alto B
with The Depository Trust Company through its Deposit / Withdrawal
at Custodian system in accordance with the DWAC Instructions set
forth in Schedule
1 attached hereto and (ii) issue and deliver to Alto B
a senior convertible note in the amount of $500,000, in the form
attached hereto as Exhibit
A (the “Settlement Note” and,
together with the Settlement Shares, the “Settlement Securities”),
to the address set forth on Schedule 1 attached
hereto, in each case, solely in exchange for the Original
Securities held by Alto B. The date on which the Settlement
Securities are delivered to Alto B is hereinafter referred to as
the “Exchange
Date.” As used herein, “Business Day” means any
day other than a Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required to remain
closed.
c. Original Note and Original
Warrants: Effective upon receipt of, and solely in exchange
for, the Settlement Securities, the Original Securities held by
Alto B, and the SPA, will be deemed cancelled and extinguished and
all rights of Alto B and obligations of GT Biopharma and others
thereunder will terminate. Promptly following the Exchange Date,
but in any event within ten (10) Business Days thereafter unless
delayed due to force majeure—including pandemic related
restrictions or disruptions—Alto B shall return the Original
Securities to GT Biopharma for cancellation. The Parties
acknowledge and agree that the exchange of the Original Securities
for the Settlement Securities is being made in reliance upon the
exemption from registration provided by Section 3(a)(9) of the
Securities Act of 1933, as amended (the “1933 Act”).
2. Releases
and Covenant Not to Sue:
a. Alto B Releases: Alto B on its
own behalf, and for and on behalf of its parent companies,
subsidiaries, and direct or indirect affiliates, and any and all of
their respective present, former, and future general partners,
limited partners, officers, directors, shareholders, managers,
members, trustees, employees, consultants, attorneys, and other
agents in their respective capacities as such, and the heirs,
executors, administrators, successors, and assigns of each of them
(collectively, the “Alto B Releasors”),
hereby completely and irrevocably releases and forever and finally
discharges any and all Claims (as defined below), rights, demands,
obligations, causes of action, counterclaims, defenses, rights of
setoff, rights of rescission, liens, disputes, damages,
liabilities, debts, costs, expenses (including attorneys’
fees), payments, capital contributions, fees, bonds, covenants,
contracts, agreements, judgments, charges, or losses of any kind or
character whatsoever, in law or equity, whether presently known or
unknown, asserted or unasserted, fixed or contingent, in contract,
tort, or otherwise, that any of the Alto B Releasors had, presently
may have or may have in the future against GT Biopharma, Cataldo,
or Kessler, as well as, to the extent applicable, each of their
respective parent companies, subsidiaries, direct and indirect
affiliates, and any and all of their respective present, former and
future officers, directors, shareholders, managers, members,
partners, employees, consultants, attorneys, and other agents in
their respective capacities as such (collectively, the
“GT Biopharma and
Individual Released Parties”), arising out of or by
reason of any cause, matter, or thing relating or ancillary to the
Litigations or the Demand Letter. The release shall apply to Claims
whether arising under any statute, rule or regulation, or under the
law of any country, state, province, territory, or any other
jurisdiction, or under principles of contract law, common law, or
equity; provided that, and consistent with Section 3(f) of this
Agreement, nothing herein shall release Claims arising out of this
Agreement or any Settlement Documents (as defined
below).
b. GT Biopharma’s Releases.
GT Biopharma on its own behalf, and for and on behalf of its parent
companies, subsidiaries, and direct or indirect affiliates, and any
and all of their respective present, former, and future general
partners, limited partners, officers, directors, shareholders,
managers, members, trustees, employees, consultants, attorneys, and
other agents in their respective capacities as such, and the heirs,
executors, administrators, successors, and assigns of each of them
(collectively, the “GT Biopharma Releasors”),
hereby completely and irrevocably releases and forever and finally
discharges any and all Claims, rights, demands, obligations, causes
of action, counterclaims, defenses, rights of setoff, rights of
rescission, liens, disputes, damages, liabilities, debts, costs,
expenses (including attorneys’ fees), payments, capital
contributions, fees, bonds, covenants, contracts, agreements,
judgments, charges, or losses of any kind or character whatsoever,
in law or equity, whether presently known or unknown, asserted or
unasserted, fixed or contingent, in contract, tort, or otherwise,
that any of the GT Biopharma Releasors had, presently may have or
may have in the future against Alto B, as well as each of Alto
B’s investment managers, subsidiaries, and direct or indirect
affiliates, and any and all of their respective direct or indirect
present, former and future officers, directors, shareholders,
managers, members, partners, employees, consultants, attorneys, and
other agents in their respective capacities as such (collectively,
the “Alto B Released
Parties”), arising out of or by reason of any cause,
matter, or thing relating or ancillary to the Litigations or the
Demand Letter (including Alto B's status as holder of the Original
Securities and the status of Alto B as a holder of the Settlement
Securities). The releases shall apply to Claims whether arising
under any statute, rule or regulation, or under the law of any
country, state, province, territory, or any other jurisdiction, or
under principles of contract law, common law, or equity; provided
that, consistent with Section 3(f) of this Agreement, nothing in
this release shall release Claims arising out of this Agreement or
any Settlement Documents. For the avoidance of doubt, the release
in this Section 3(b) shall have the same effect as a dismissal with
prejudice.
c. Cataldo and Kessler Releases.
Cataldo and Kessler on their own behalf and for and on behalf of
each of their respective present, former, and future general
partners, limited partners, employees, consultants, attorneys, and
other agents in their respective capacities as such, and the heirs,
executors, administrators, successors, and assigns of each of them
(collectively, the “Individual Releasors”),
hereby completely and irrevocably release and forever and finally
discharge any and all Claims, rights, demands, obligations, causes
of action, counterclaims, defenses, rights of setoff, rights of
rescission, liens, disputes, damages, liabilities, debts, costs,
expenses (including attorneys’ fees), payments, capital
contributions, fees, bonds, covenants, contracts, agreements,
judgments, charges, or losses of any kind or character whatsoever,
in law or equity, whether presently known or unknown, asserted or
unasserted, fixed or contingent, in contract, tort, or otherwise,
that any of the Individual Releasors had, presently may have or may
have in the future against Alto B Released Parties, arising out of
or by reason of any cause, matter, or thing relating or ancillary
to the Litigations or the Demand Letter (including Alto B's status
as a holder of the Original Securities the status of Alto B as a
holder of the Settlement Securities). The releases shall apply to
Claims whether arising under any statute, rule or regulation, or
under the law of any country, state, province, territory, or any
other jurisdiction, or under principles of contract law, common
law, or equity; provided that nothing in this release shall release
Claims arising out of this Agreement or any Settlement
Document.
d. Covenant Not to Sue; Defense:
Except as necessary to enforce this Agreement and the Settlement
Documents, each Party on its own behalf and on behalf of any other
Person purporting to act by, through or on behalf of such Party,
hereby covenants, represents, and warrants that it will forever
refrain from suing to enforce or to recover, directly or
indirectly, under any Claims released by this Agreement, to the
extent such releases become effective. This Agreement may be
pleaded as a full and complete defense to, and may be used as the
basis for an injunction against any action, suit or other
proceeding which may be instituted, prosecuted or attempted in
breach of the undertakings contained here. As used herein,
“Person” means an
individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization,
any other entity and any government or any department or agency
thereof.
e. Unknown Claims: The Parties
each acknowledge that he, she or it may discover facts in addition
to or different from those that he, she or it now knows or believes
to be true with respect to the matters released herein, but that it
is the express intention of the Parties, except as necessary to
enforce this Agreement and the Settlement Documents, to fully,
finally and forever settle and release any and all claims released
hereby, known or unknown, suspected or unsuspected, which now
exists or heretofore existed, and without regard to the subsequent
discovery or existence of such additional or different facts with
respect to the matters released hereby. Except that Alto B and its
affiliated entities do not release or discharge any future Claims,
arising out of future events, that they may have against GT
Biopharma, Cataldo, and Kessler unrelated to the Litigations or the
Demand Letter. And except that Bristol Investment Fund, Ltd., and
its affiliated entities, do not release or discharge any Claims
they may have, now or in the future, as to GT Biopharma and
unrelated to the Litigations or the Demand Letter. In furtherance
of this intention, the Parties each acknowledge that they have been
advised of and expressly waive any and all provisions, rights and
benefits of California Civil Code Section 1542, which
provides:
A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR
RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT, IF KNOWN BY
HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR OR RELEASED PARTY.
The
Parties shall also be deemed expressly to have waived any and all
provisions, rights and benefits conferred by any law of any state
or territory of the United States, or principle of common law,
which is similar, comparable, or equivalent to California Civil
Code Section 1542 or that would otherwise limit the releases and
waivers contained in this Agreement.
The
Parties each acknowledge that the foregoing waiver was separately
bargained for and an integral aspect of the settlement of which
this release is a part.
f. Enforcement of This Agreement:
For the avoidance of doubt, notwithstanding the foregoing or any
other provisions of this Agreement, the releases and covenants not
to sue in this Section 2 shall not apply to any disputes or claims
that may arise in the future relating to the enforcement of the
terms of this Agreement or the Settlement Documents issued pursuant
thereto.
3. Acknowledgment of Alto B's Alleged
Trading: GT Biopharma, Cataldo and Kessler each hereby
acknowledge that Alto B did not engage in short selling alleged in
the SDNY Action or the California Action.
4. No Admission: It is understood
and agreed that this Agreement is a compromise and settlement of
the Claims released herein, and it shall not be construed as an
admission, concession, or indication of the validity of any Claim,
defense, liability, obligation, or wrongdoing. For the avoidance of
doubt, the Acknowledgment of Alto B's Alleged Trading in Section 3
of this Agreement does not modify in any way the releases and
covenants not to sue in Section 2 of this Agreement, and,
accordingly, the acknowledgment in Section 3 of this Agreement
shall not serve as the basis for any future Claim. Nor will the
Parties argue in or before any court, administrative agency,
tribunal, or make any public statement whatsoever, that this
Agreement or the acknowledgment in Section 3 of this Agreement is
or may be construed as an admission by GT Biopharma, Cataldo, or
Kessler of any wrongdoing or liability.
5. Representations
and Covenants of GT Biopharma
a. Authorization; Enforcement;
Validity. GT Biopharma has the requisite corporate power and
authority to enter into and perform its obligations under this
Agreement, the Settlement Note and each of the other agreements,
instruments, certificates or documents entered into by the parties
hereto in connection with the transactions contemplated by this
Agreement (collectively, the “Settlement Documents”)
and to issue the Settlement Securities in exchange for the Original
Securities, all in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other
Settlement Documents by GT Biopharma and the consummation by GT
Biopharma of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Settlement
Securities, have been duly authorized by GT Biopharma’s Board
of Directors, and no further filing, consent, or authorization is
required by GT Biopharma, its Board of Directors or its
stockholders. This Agreement and the other Settlement Documents are
duly executed and delivered (or will be delivered) by GT Biopharma,
and constitute (or will constitute) the legal, valid and binding
obligations of GT Biopharma, enforceable against GT Biopharma in
accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and
remedies.
b. Issuance of Securities. In each
case subject to the terms of the Settlement Documents, the issuance
of the Settlement Securities are duly authorized and, upon issuance
in accordance with the terms hereof, shall be validly issued, fully
paid and free from all preemptive or similar rights, taxes, liens
and charges and other encumbrances with respect to the issue
thereof and the Settlement Conversion Shares (when issued) shall be
validly issued, fully paid and non-assessable and free from all
preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof, with the holder of
the Settlement Shares and the Settlement Conversion Shares (when
issued) being entitled to all rights accorded to a holder of Common
Stock. In connection with the issuance of the Settlement
Securities, Alto B represents that it has continuously held the
Original Securities Since January 22, 2018 for purposes of Rule 144
under the 1933 Act. As of the Exchange Date, a number of shares of
Common Stock shall have been duly authorized and reserved for
issuance which equals or exceeds (the “Required Reserved
Amount”) the sum of 150% of the maximum number of
shares of Common Stock issuable pursuant to the terms of the
Settlement Note (the “Settlement Conversion
Shares”) based on the initial Conversion Price (as
defined in the Settlement Note) (without taking into account any
limitations on the issuance thereof pursuant to the terms of the
Settlement Note). As of the date hereof, there are 672,834,264
shares of Common Stock authorized and unissued. So long as Alto B
holds the Settlement Note, GT Biopharma shall use all necessary
actions and efforts to at all times have authorized, and reserved
for the purpose of issuance, no less than the Required Reserve
Amount. If at any time the number of shares of Common Stock
authorized and reserved for issuance is not sufficient to meet the
Required Reserved Amount, GT Biopharma will promptly take all
corporate action necessary to authorize and reserve a sufficient
number of shares, including, without limitation, calling a special
meeting of stockholders to authorize the reservation of additional
shares to meet the GT Biopharma’s obligations under this
Section 5(b), and, in the case of an insufficient number of
authorized shares, obtain stockholder approval of an increase in
such authorized number of shares, and voting the management shares
of GT Biopharma in favor of an increase in the authorized shares of
GT Biopharma to ensure that the number of authorized shares is
sufficient to meet the Required Reserved Amount.
c. No Conflicts. The execution,
delivery and performance of the Settlement Documents by GT
Biopharma and the consummation by GT Biopharma of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance of the Settlement Securities) will not (i) result in a
violation of the restated certificate of incorporation of GT
Biopharma or its bylaws, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both
would become a default) in any respect under, or give to others any
rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which GT Biopharma or any
of its Subsidiaries is a party or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree applicable to
GT Biopharma or any of its Subsidiaries, or by which any property
or asset of GT Biopharma or any of its Subsidiaries is bound or
affected, except, in the case of clauses (ii) and (iii) above,
where such conflict, violation or default would not result,
individually or in the aggregate, in a Material Adverse Effect. For
purposes of this Agreement, “Material Adverse Effect”
means any material adverse effect on the business, properties,
assets, liabilities, operations, results of operations or condition
(financial or otherwise) of GT Biopharma and its Subsidiaries,
taken as a whole, or on the transactions contemplated hereby or on
the other Settlement Documents or by the agreements and instruments
to be entered into in connection herewith or therewith, or on the
authority or ability of GT Biopharma to perform any of its
obligations under any of the Settlement Documents.
d. Consents. GT Biopharma is not
required to obtain any consent, authorization or order of, or make
any filing or registration with, any court, governmental agency or
any regulatory or self-regulatory agency or any other Person in
order for it to execute, deliver or perform any of its obligations
under or contemplated by the Settlement Documents, in each case in
accordance with the terms hereof or thereof, other than (i) the
filings required pursuant to Section 5(h) of this Agreement, (ii)
the notice and/or application(s), if any, required to be delivered
pursuant to Section 5(i) of this Agreement, (iii) any filings
required to be made under applicable state securities laws and
(iii) those already obtained or effected on or prior to the date
hereof. GT Biopharma is not in violation of the listing
requirements of the Principal Market and has no knowledge of any
facts or circumstances that would reasonably lead to delisting or
suspension of the Common Stock on the Principal Market in the
foreseeable future. The issuance by GT Biopharma of the Settlement
Shares, the Settlement Warrants or Settlement Notes shall not have
the effect of delisting or suspending the Common Stock from the
Principal Market.
e. FAST
Compliance. While any Settlement Shares or Settlement Note
are outstanding, GT Biopharma shall maintain a transfer agent that
participates in the DTC Fast Automated Securities Transfer
Program.
f. (i)
Right of Participation. Until the first date that (i) less
than 10% of the aggregate amount of the Settlement Notes are
outstanding and (ii) no Event of Default (as defined in the
Settlement Notes) nor an event which with the passage of time or
the giving of notice could become an Event of Default is pending,
upon any proposed financing through the issuance by GT Biopharma or
any of its Subsidiaries of Common Stock, Common Stock Equivalents,
Indebtedness (as defined in Section 5(o) below) or a combination
thereof, other than (i) a rights offering to all holders of Common
Stock which does not include extending such rights offering to
holders of Settlement Notes or (ii) an Exempt Issuance (each a
“Subsequent Financing”), Alto-B shall have the right to
participate in up to an amount of the Subsequent Financing equal to
100% of the Subsequent Financing (the “Participation
Maximum”), pro rata (i) to each other in proportion to the
aggregate principal amount of Settlement Notes issued to them
pursuant to this Agreement and (ii) to each other Person holding
Permitted Indebtedness (as defined in the Settlement Notes) and
having a similar right of participation in such Subsequent
Financing, on the conditions and price provided for in the
Subsequent Financing, unless the Subsequent Financing is an
underwritten public offering, in which case GT Biopharma shall
notify Alto-B of such public offering when it is lawful for GT
Biopharma to do so, but Alto-B shall be entitled to purchase any
particular amount of such public offering without the approval of
the lead underwriter of such underwritten public
offering.
(ii) At
least ten (10) Trading Days (as defined in the Settlement Notes)
prior to the closing of the Subsequent Financing, GT Biopharma
shall deliver to Alto-B a written notice of its intention to effect
a Subsequent Financing (“Pre-Notice”), which Pre-Notice
shall Alto-B if it wants to review the details of such financing
(such additional notice, a “Subsequent Financing
Notice”). Upon the request of Alto-B for a Subsequent
Financing Notice, GT Biopharma shall promptly, but no later than
one (1) Trading Day after such request, deliver a Subsequent
Financing Notice to Alto-B. Alto-B shall be deemed to have
acknowledged that the Subsequent Financing Notice may contain
material non-public information. The Subsequent Financing Notice
shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the amount of proceeds intended to be raised
thereunder and the Person or Persons through or with whom such
Subsequent Financing is proposed to be effected and shall include a
term sheet or similar document relating thereto as an
attachment.
iii.
If Alto-B desires to participate in such Subsequent Financing, it
must provide written notice to GT Biopharma by not later than 5:30
p.m. (New York City time) on the tenth (10th) Trading Day after it
received the Pre-Notice, that it is willing to participate in the
Subsequent Financing, the amount of such participation, and
representing and warranting that it has such funds ready, willing,
and available for investment on the terms set forth in the
Subsequent Financing Notice. If GT Biopharma receives no such
notice from Alto-B as of such tenth (10th) Trading Day, Alto-B
shall be deemed to have notified GT Biopharma that it does not
elect to participate.
iv.
If by 5:30 p.m. (New York City time) on the fifteenth (15th)
Trading Day after Alto-B received the Pre-Notice, notification by
Alto-B of its willingness to participate in the Subsequent
Financing (or to cause their designees to participate) is, in the
aggregate with similar notifications from all other Persons holding
Permitted Indebtedness and having similar rights of participation
in the Subsequent Financing, less than the total amount of the
Participation Maximum of the Subsequent Financing, then GT
Biopharma may affect the remaining portion of such Subsequent
Financing on the terms and with the Persons set forth in the
Subsequent Financing Notice and Alto-B shall simultaneously affect
their portion of such Subsequent Financing as set forth in their
notifications to GT Biopharma consistent with the terms set forth
in the Subsequent Financing Notice.
v.
If by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day
after Alto-B received the Pre-Notice, GT Biopharma receives
responses to a Subsequent Financing Notice from Alto-B seeking to
purchase more than the aggregate amount of the Participation
Maximum, Alto-B shall have the right to purchase its Pro Rata
Portion (of the Participation Maximum. “Pro Rata
Portion” means the ratio of (x) the principal amount of the
Settlement Notes issued hereunder to Alto-B participating under
this Section 5(f) and (y) the sum of the aggregate principal amount
of Permitted Indebtedness held by other Persons who have elected to
participate in the Subsequent Financing under rights of
participation similar to this Section 5(f).
vi.
GT Biopharma must provide Alto-B with a second Subsequent Financing
Notice, and Alto-B will again have the right of participation set
forth above in this Section 5(f), if the Subsequent Financing
subject to the initial Subsequent Financing Notice is not
consummated for any reason on the terms set forth in such
Subsequent Financing Notice within sixty (60) Trading Days after
the date of the initial Subsequent Financing Notice.
vii.
GT Biopharma and Alto-B agree that if any Alto-B elects to
participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or
provision whereby Alto-B shall be required to agree to any
restrictions on trading as to any of the securities issued
hereunder (for avoidance of doubt, the securities purchased in the
Subsequent Financing shall not be considered securities purchased
hereunder) or be required to consent to any amendment to or
termination of, or grant any waiver, release or the like under or
in connection with, this Agreement, without the prior written
consent of Alto-B.
viii.
Notwithstanding anything to the contrary in this Section 5(f) and
unless otherwise agreed to by Alto-B, GT Biopharma shall either
confirm in writing to Alto-B that the transaction with respect to
the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent
Financing, in either case in such a manner such that Alto-B will
not be in possession of any material, non-public information, by
the seventeenth (17th) Trading Day following delivery of the
Subsequent Financing Notice. If by such seventeenth (17th) Trading
Day, no public disclosure regarding a transaction with respect to
the Subsequent Financing has been made, and no notice regarding the
abandonment of such transaction has been received by Alto-B such
transaction shall be deemed to have been abandoned and Alto-B shall
not be deemed to be in possession of any material, non-public
information with respect to GT Biopharma or any of its
Subsidiaries.
ix.
For the purposes of this Section 5(f): (x) “Common Stock
Equivalents” means any securities of GT Biopharma or its
Subsidiaries which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt,
preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock;
(y)”Exempt Issuance” means the issuance of (A) shares
of Common Stock or options to employees, officers or directors of
GT Biopharma pursuant to any stock or option plan duly adopted for
such purpose, by a majority of the non-employee members of the
Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose, (B) securities
exercisable or exchangeable for or convertible into shares of
Common Stock issued and outstanding on the date of this Agreement,
provided that such securities and any term thereof have not been
amended since the date of this Agreement to increase the number of
such securities or to decrease the issue price, exercise price,
exchange price or conversion price of such securities and which
securities and the principal terms thereof are described in the SEC
Documents (as defined below), (C) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of
the disinterested directors of GT Biopharma, provided that any such
issuance shall only be to a Person (or to the equity holders of a
Person) which is, itself or through its subsidiaries, an operating
company or an owner of an asset in a business synergistic with the
business of GT Biopharma and shall be intended to provide to GT
Biopharma substantial additional benefits in addition to the
investment of funds, but shall not include a transaction in which
GT Biopharma is issuing securities primarily for the purpose of
raising capital or to an entity whose primary business is investing
in securities, (D) as set forth on Schedule 5(f), and (e)
securities issued or issuable to Alto-B and its assigns pursuant to
the Settlement Documents including without limitation, this Section
5(f), or upon exercise, conversion or exchange of any such
securities.
g. Solvency:
As of the date hereof, neither GT
Biopharma nor any of its Subsidiaries has taken any steps to seek
protection pursuant to any bankruptcy law nor does GT Biopharma
have knowledge that its creditors or its Subsidiaries’
creditors intend to initiate involuntary bankruptcy proceedings or
knowledge of any fact which would reasonably lead a creditor to do
so. GT Biopharma, individually, and GT Biopharma and its
subsidiaries, on a consolidated basis, are not as of the date
hereof, and after giving effect to the transactions contemplated
hereby will not be, Insolvent. As used herein,
“Insolvent”
means, with respect to any Person, (i) the present fair saleable
value of such Person’s assets is less than the amount
required to pay such Person’s total Indebtedness (as defined
in Section 5(o)), (ii) such Person is unable to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured, (iii) such Person
intends to incur or believes that it will incur debts that would be
beyond its ability to pay as such debts mature or (iv) such Person
has unreasonably small capital with which to conduct the business
in which it is engaged as such business is now conducted and is
proposed to be conducted.
h. Shell
Company Status. GT
Biopharma is not, and has never been,
an issuer identified in Rule 144(i)(1) of the 1933
Act.
i. SEC Filings. As of their
respective filing dates, GT Biopharma’s filings with the
United States Securities and Exchange Commission (the
“SEC”)
under the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”) since January 1, 2019 (the “SEC Documents”), complied
in all material respects with the requirements of the Exchange Act
and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. GT
Biopharma represents that, as of the date hereof, no material event
or circumstance has occurred which would be required to be publicly
disclosed or announced on a Current Report on Form 8-K, either as
of the date hereof or solely with the passage of time by GT
Biopharma but which has not been so publicly announced or
disclosed.
j. Disclosure of Transactions and Other
Material Information. GT Biopharma shall file a
current report on Form 8-K reasonably acceptable to Alto B (the
“8K
Filing”) on or before 8:30 a.m., New York City time,
on the first Business Day after this Agreement has been duly
executed and delivered, in the form required by the 1934 Act,
relating to the transactions contemplated by this Agreement and
attaching a form of this Agreement and the form of Settlement Note
(including, without limitation, all schedules and exhibits to such
agreements to the extent required by the rules of the SEC) as an
exhibit to such filing. From and after the filing of the 8-K
Filing with the SEC, Alto B shall not be in possession of any
material, nonpublic information received from GT Biopharma, any of
its Subsidiaries or any of their respective officers, directors,
employees or agents that is not disclosed in the 8-K Filing. In
addition, effective upon the filing of the 8-K Filing, GT Biopharma
acknowledges and agrees that any and all confidentiality or similar
obligations under any agreement, whether written or oral, between
GT Biopharma, any of its Subsidiaries or any of their respective
officers, directors, employees or agents, on the one hand, and Alto
B or any of its respective affiliates, on the other hand, shall
terminate and be of no further force or effect. GT Biopharma shall
not, and shall cause each of its Subsidiaries and its and each of
their respective officers, directors, employees and agents, not to,
provide Alto B with any material, nonpublic information regarding
GT Biopharma or any of its Subsidiaries from and after the date
hereof without the express prior written consent of Alto B or as
otherwise contemplated hereby. . GT Biopharma understands
and confirms that Alto B will rely on the foregoing representations
in effecting transactions in securities of GT
Biopharma.
k. Listing. GT Biopharma
shall, if applicable, take all steps necessary to promptly secure
the listing or quotation of all of (i) Settlement Shares and
Settlement Conversion Shares without regard to any limitation on
the conversion of the Settlement Note and (ii) any capital stock of
GT Biopharma issued or issuable with respect to the Settlement
Shares and the Settlement Note or the Settlement Conversion Shares,
as applicable, as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise (the
“Listed
Securities”) upon the OTCQB (the “Principal Market”) or any
other national securities exchange or automated quotation system,
if any, upon which the Common Stock is then listed and shall
maintain such listing of all Listed Securities. GT Biopharma
shall pay all fees and expenses in connection with satisfying its
obligations under this Section 5(i).
l. No Integration Actions. None of
GT Biopharma, any of its affiliates or any Person acting on behalf
of GT Biopharma or such affiliate will sell, offer for sale or
solicit offers to buy in respect of any security (as defined in the
1933 Act) that would be integrated with the issuance of the
Settlement Shares and Settlement Note in a manner that would
require the registration under the 1933 Act of the issuance to Alto
B or require shareholder approval under the rules and regulations
of the Principal Market, and GT Biopharma will take all action that
is appropriate or necessary to assure that its offerings of other
securities will not be integrated for purposes of the 1933 Act or
the rules and regulations of the Principal Market with the issuance
of the Settlement Shares and Settlement Note contemplated
hereby.
m. Variable Securities. For so
long as any Settlement Note remains outstanding, GT Biopharma shall
not, in any manner, (i) issue or sell any rights, warrants or
options to subscribe for or purchase Common Stock or directly or
indirectly convertible into or exchangeable or exercisable for
Common Stock at a price which varies with the market price of the
Common Stock, including by way of one or more reset(s) to any fixed
price, unless the conversion, exchange or exercise price of any
such security cannot be less than the then applicable Conversion
Price with respect to the Common Stock into which any Settlement
Note is convertible (collectively, “Variable Rate
Transactions”) or (ii) enter into any agreement, or
issue any securities pursuant to any agreement, including, without
limitation, an equity line of credit, at-the-market offering or
similar agreement, whereby GT Biopharma may issue securities at a
future determined price.
n. Preservation of Corporate
Existence. The Company shall preserve and maintain its
corporate existence, rights, privileges and franchises in the
jurisdiction of its incorporation, and qualify and remain
qualified, as a foreign entity in each jurisdiction in which such
qualification is necessary in view of its business or operations
and where the failure to qualify or remain qualified might
reasonably have a Material Adverse Effect upon the financial
condition, business or operations of GT Biopharma, taken as a
whole.
o. Indebtedness. Schedule 5(m) sets forth as of
the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments. For purposes of this Agreement: (x)
“Indebtedness” of any
Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business consistent
with past practice and deferred compensation payable to officers,
directors and employees of GT Biopharma and its Subsidiaries), (C)
all reimbursement or payment obligations with respect to letters of
credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar
instruments, (E) all indebtedness created or arising under any
conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets
acquired with the proceeds of such indebtedness (even though the
rights and remedies of the seller or bank under such agreement in
the event of default are limited to repossession or sale of such
property), (F) all monetary obligations under any leasing or
similar arrangement which, in connection with U.S. generally
accepted accounting principles, consistently applied for the
periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured
by (or for which the holder of such indebtedness has an existing
right, contingent or otherwise, to be secured by) any mortgage,
deed of trust, lien, pledge, charge, security interest or other
encumbrance of any nature whatsoever in or upon any property or
assets (including accounts and contract rights) with respect to any
asset or property owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (H) all Contingent
Obligations in respect of indebtedness referred to in clauses (A)
through (G) above; and (y) “Contingent Obligation”
means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any
Indebtedness if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to
provide assurance to the obligee of such liability that such
liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with
respect thereto;
p. Indemnification. To the fullest
extent permitted by law, GT Biopharma will, and hereby does,
indemnify, hold harmless and defend Alto B, the directors,
officers, partners, members, employees, agents, representatives of,
and each Person, if any, who controls any Investor within the
meaning of the 1933 Act or the 1934 Act (each, an
“Indemnified
Person”), against any losses, Claims, damages,
liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys’ fees, amounts paid in settlement or
expenses, joint or several (collectively, “Claims”), incurred in
investigating, preparing or defending any action, Claim, suit,
inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a
party thereto (“Indemnified Damages”), to
which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of, relate to, or are based upon: (a) any
misrepresentation or breach of any representation or warranty made
by GT Biopharma in the Settlement Documents, (b) any breach of any
covenant, agreement or obligation of GT Biopharma contained in the
Settlement Documents or (c) any cause of action, suit or claim
brought or made against such Indemnified Person by a third party
(including for these purposes a
derivative action brought on behalf of GT Biopharma) and
arising out of, resulting from, or ancillary to (I) the status of
Alto B as a holder of the Original Securities (II) the execution,
delivery, performance or enforcement of the transactions
contemplated by the Settlement Documents (III) the status of Alto B
as a holder of the Settlement Securities or (IV) the status of Alto
B as a party to this Agreement and/or the SPA any cause of action,
suit or claim brought or made against such Indemnified Person by a
third party and arising out of, resulting from, or ancillary to the
transactions contemplated by the Settlement Documents (unless such
action is based upon a breach of such Indemnified Person’s
representations, warranties or covenants under the Settlement
Documents. For the avoidance of doubt,
the violations set forth in this Section 5(p) are intended to
apply, and shall apply, to direct claims between asserted by or
against any Indemnified Person, on the one hand, and GT Biopharma,
on the other, as well as any third party claims asserted by or
against an Indemnified Person. GT Biopharma shall reimburse
the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any reasonable and invoiced legal fees or
other reasonable and invoiced expenses incurred by them in
connection with investigating or defending any such
Claim.
6. Representations and Covenants of
Cataldo and Kessler:
a. Authorization; Enforcement;
Validity. Each of Cataldo and Kessler has the legal capacity
and right to execute, deliver, enter into and perform his
obligations under this Agreement and each of the other Settlement
Documents in accordance with the terms hereof and thereof. This
Agreement and the other Settlement Documents are duly executed and
delivered by each of Cataldo and Kessler, and constitute the legal,
valid and binding obligations of each of Cataldo and Kessler,
enforceable against Cataldo and Kessler in accordance with their
respective terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating
to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.
7. Non Disparagement. Each of Alto
B, GT Biopharma, Cataldo, and Kessler, severally and not jointly,
agrees that, from and after the execution of this Agreement, each
of them shall not make, publish or communicate, or encourage any
other Person to make, publish or communicate, any Disparaging (as
defined below) remarks, comments, or statements concerning any
other Person that is subject to, or a signatory of, this Agreement.
As used herein, “Disparaging” remarks,
comments or statements are those that impugn the character,
honesty, integrity, morality, or business acumen or abilities in
connection with any aspect of the operation of business of, or
reflect negatively upon, the individual or entity being disparaged.
Each of Alto B, GT Biopharma, Cataldo, and Kessler, severally and
not jointly, further agrees that, from the execution of this
Agreement, they shall not encourage any other Person to consider,
threaten, or file any action, Claim, suit, inquiry, or proceeding
against any Person that is subject to, or a signatory of, this
Agreement. This provision shall in no way limit the ability of any
party to enforce the Settlement Documents.
8. Confidentiality. The Parties
agree that the negotiations that resulted in this Agreement, are
confidential and they will not disclose them to any third party
except: (i) to their respective attorneys, accountants and
insurers; (ii) as required by, or for use in, any court of
competent jurisdiction or regulatory body or agency; (iii) as
required by any federal, state or municipal rule, regulation or
law; (iv) to any tax preparation professional and to the extent
necessary to accurately file city, state and federal taxes; and,
(v) with respect to Alto B only, to any limited partner, potential
investor or any other Person if, in Alto B’s own judgment,
disclosure is necessary to explain, for any business purpose, the
background, circumstances, and/or results of the Litigations or the
Demand Letter.
9. Entire Agreement; Amendments.
This Agreement and any schedules and exhibits hereto constitute the
entire agreement among the Parties as to the settlement and
supersede any prior agreements among the Parties with respect to
the subject matter of this Agreement. No representations,
warranties or inducements have been made or relied upon by any
Party concerning this Agreement or its exhibits, other than the
representations, warranties and covenants expressly set forth in
such documents. This Agreement shall not be modified or amended in
any way except in writing executed by or on behalf of each Party to
be bound thereby or by their respective successors-in-interest.
10. Voluntary and Informed Assent.
Each Party to this Agreement represent and agree that the Party has
read and fully understood the provisions of this Agreement, that
they are fully competent to enter into and sign this Agreement, and
that they are executing this Agreement voluntarily, free of any
duress or coercion.
11. Construction. The language of
all parts of this Agreement shall in all cases be construed as a
whole, according to its fair meaning, and not strictly for or
against any Party. This Agreement was prepared jointly by the
Parties, and no presumptions or rules of interpretation based upon
the identity of the Party preparing or drafting the Agreement, or
any part thereof, shall be applicable or invoked.
12. Headings. The section headings
contained in each section of this Agreement are intended solely for
convenience of reference and shall not limit or expand the express
terms of this Agreement or otherwise be used in its
construction.
13. Choice of Law. This Agreement
shall be considered to have been negotiated, executed and
delivered, and to be wholly performed in the State of New York, and
the rights and obligations of the Parties to the Agreement shall be
construed and enforced in accordance with, and governed by, the
internal, substantive laws of the State of New York without giving
effect to that State’s choice of law principles.
14. Dispute Resolution. The Parties
agree that the exclusive jurisdiction for any legal proceeding
arising out of or relating to this Agreement shall be the Supreme
Court of the State of New York, New York County, and all Parties
hereby waive any challenge to personal jurisdiction or venue in
that court.
15. Waiver. The waiver by any Party
of any breach of this Agreement by the other shall not be deemed a
waiver of that or any other prior or subsequent breach of any
provision of this Agreement by any other Party.
16. Severability. If any provision
or provisions of this Agreement or the settlement shall be held to
contravene or be invalid under any applicable law, such
contravention or invalidity shall not invalidate the whole
Agreement, but the Agreement shall be construed as not containing
the particular provision or provisions held to be illegal, invalid
or unenforceable, and the remaining rights and obligations of the
Parties shall remain in full force and effect and construed and
enforced accordingly so long as this Agreement as so modified
continues to express, without material change, the original
intentions of the Parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the
respective expectations or reciprocal obligations of the Parties or
the practical realization of the benefits that would otherwise be
conferred upon the Parties. The Parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or
unenforceable provision(s).
17. Effect of Cancellation or
Termination. If the settlement set forth in this Agreement
does not become effective, or is terminated, reversed or vacated by
a court of competent jurisdiction for any reason, then,
notwithstanding anything herein to the contrary, the settlement set
forth in this Agreement shall be null and void and of no further
force or effect, and each Party shall be restored to his, her or
its respective position as it existed prior to the execution of
this Agreement, including for statute of limitations purposes.
Neither the existence of this Agreement, the facts of its
existence, the terms hereof or any statements or negotiations
between the Parties relating hereto shall be admissible in evidence
or shall be referred to for any purpose in any subsequent
litigation, action or proceeding, except in a proceeding to enforce
its terms.
18. Binding Effect. This Agreement
binds and inures to the benefit of the Parties and their respective
past and present agents, employees, attorneys, representatives,
officers, directors, shareholders, successors, assigns,
transferees, insurers and sureties, and all of their subsidiaries,
parents, predecessors, successors and controlled or affiliated
companies.
19. Notices. Any notices, consents,
waivers or other communications required or permitted to be given
under the terms of this Agreement or any other Settlement Documents
must be in writing and will be deemed to have been delivered: (i)
upon receipt, when delivered personally; (ii) upon delivery, when
sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the
sending party), (iii) upon delivery, when sent by electronic mail
(provided that the sending party does not receive an automated
rejection notice); or (iv) one Business Day after deposit with an
overnight courier service, in each case properly addressed to the
party to receive the same. The addresses, facsimile numbers and
e-mail addresses for such communications shall be:
If to
GT Biopharma:
GT
Biopharma, Inc.
9350
Wilshire Blvd, Suite 203
Beverly
Hills, CA 90212
Email:
ajc@gtbiopharma.com
With a
copy to (for informational purposes only):
Perrie
Weiner
Baker
McKenzie
1901
Avenue of the Stars Suite 950
Telephone: (310)
201-4709
Facsimile: (310)
201-4721
E-mail:
perrie.weiner@bakermckenzie.com
If to
Cataldo:
c/o GT
Biopharma, Inc.
9350
Wilshire Blvd, Suite 203
Beverly
Hills, CA 90212
Email:
ajc@gtbiopharma.com
With a
copy to (for informational purposes only):
Perrie
Weiner
Baker
McKenzie
1901
Avenue of the Stars Suite 950
Telephone: (310)
201-4709
Facsimile: (310)
201-4721
E-mail:
perrie.weiner@bakermckenzie.com
If to
Kessler:
Amy
Wang
Bristol
Capital Advisors, LLC
662 N.
Sepulveda Blvd., Suite 300
Los
Angeles, California 90049
Main
Line: (310) 331-8480
Direct
Line: (310) 331-8485
Facsimile: (310)
331-8490
E-mail:
amy@bristolcompanies.net
With a
copy to (for informational purposes only):
Perrie
Weiner
Baker
McKenzie
1901
Avenue of the Stars Suite 950
Telephone: (310)
201-4709
Facsimile: (310)
201-4721
E-mail:
perrie.weiner@bakermckenzie.com
If to
Alto B:
c/o
Ayrton Capital LLC
55 Post
Rd West, 2nd Floor
Westport, CT
06880
Attention: Waqas
Khatri
Telephone: (646)
793-9056
Email:
wk@ayrtonllc.com and
mfreidin@ayrtonllc.com
With a
copy (for informational purposes only) to:
Douglas
Hirsch
Sadis
& Goldberg LLP
551
Fifth Avenue, 21st Floor
New
York, New York 10176
Telephone: (212)
947-3793
Facsimile: (212)
947-3796
E-mail:
dhirsch@sglawyers.com
20. Most Favored
Nation: The Company hereby represents and warrants as of the date
hereof and covenants and agrees that none of the terms offered to
any Person with respect to any amendment, modification, waiver or
exchange of any warrant to purchase Common Stock (or other similar
instrument), including, without limitation with respect to any
consent, release, amendment, settlement, or waiver relating thereto
(each an “Settlement Document”), is or will be more
favorable to such Person (other than any reimbursement of legal
fees) than those of the Holder and this Agreement. If, and whenever
on or after the date hereof, the Company enters into a Settlement
Document, then (i) the Company shall provide notice thereof to the
Holder immediately following the occurrence thereof and (ii) the
terms and conditions of this Agreement shall be, without any
further action by the Holder or the Company, automatically amended
and modified in an economically and legally equivalent manner such
that the Holder shall receive the benefit of the more favorable
terms and/or conditions (as the case may be) set forth in such
Settlement Document, provided that upon written notice to the
Company at any time the Holder may elect not to accept the benefit
of any such amended or modified term or condition, in which event
the term or condition contained in this Agreement shall apply to
the Holder as it was in effect immediately prior to such amendment
or modification as if such amendment or modification never occurred
with respect to the Holder. The provisions of this Section 21 shall
apply similarly and equally to each Settlement
Document.
21. Independent Nature
of Holder’s Obligations and Rights. The obligations of the
Holder under this Agreement are several and not joint with the
obligations of any other holder of securities of the Company (each,
an “Other Holder”), and the Holder shall not be
responsible in any way for the performance of the obligations of
any Other Holder under any other agreement by and between the
Company and any Other Holder (each, an “Other
Agreement”). Nothing contained herein or in any Other
Agreement, and no action taken by the Holder pursuant hereto, shall
be deemed to constitute the Holder and Other Holders as a
partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Holder and Other Holders
are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement or
any Other Agreement and the Company acknowledges that, to the best
of its knowledge, the Holder and the Other Holders are not acting
in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement or any Other Agreement.
The Company and the Holder confirm that the Holder has
independently participated in the negotiation of the transactions
contemplated hereby with the advice of its own counsel and
advisors. The Holder shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights
arising out of this Agreement, and it shall not be necessary for
any Other Holder to be joined as an additional party in any
proceeding for such purpose.
22. Specific Performance. Each
Party hereto acknowledges and agrees, on behalf of itself, herself
or himself and its, her or his affiliates, that irreparable harm
would occur in the event any of the provisions of this Agreement or
any of the other Settlement Documents were not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the Parties will be entitled to specific
relief hereunder, including, without limitation, an injunction or
injunctions to prevent and enjoin breaches of the provisions of
this Agreement and/or the other Settlement Documents and to enforce
specifically the terms and provisions hereof and thereof, in
addition to any other remedy to which they may be entitled at law
or in equity.
23. Counterpart Signature Pages:
This Agreement may be executed in any number of counterparts, and
each counterpart shall have the same force and effect as an
original and shall constitute an effective, binding agreement on
the part of each of the undersigned, all counterparts when taken
together shall constitute the entire Agreement.
IN WITNESS WHEREOF, the Parties have
caused this Agreement to be executed by themselves or their duly
authorized representatives on the respective dates set forth
below.
Dated:
December 22, 2020
GT BIOPHARMA, INC.
/s/ Anthony
Cataldo
Name:
Anthony Cataldo
Title:
Chief Executive Officer
|
Dated:
December 22, 2020
ALTO OPPORTUNITY MASTER
FUND, SPC – SEGREGATED MASTER
PORTFOLIO B
By:
/s/ Waqas
Khatri
Name:
Waqas Khatri
Title:
Director
|
Dated:
December 22, 2020
/s/ Anthony
Cataldo
Anthony
Cataldo
|
Dated:
December 22, 2020
/s/ Paul
Kessler
Paul
Kessler
|
EXHIBIT A
FORM OF SETTLEMENT NOTE
SCHEDULE 1
|
|
|
|
|
|
Amount of Settlement Payment
|
Wire Instructions for Delivery of Settlement Payment
|
Number of Settlement Shares
|
DWAC Instructions for Delivery of Settlement Shares
|
PrincipalAmount of Settlement Note
|
Address for Delivery of Settlement Note
|
$180,000
|
Wire
instructions previously provided to GT Biopharma
|
960,000
|
DWAC
instructions previously provided to GT Biopharma
|
$500,000
|
Ayrton
Capital LLC, 55 Post Rd West, 2nd Floor, Westport, CT
06880
|
SCHEDULE 5(m)
Existing Indebtedness
1.
Indebtedness incurred with respect to the $25,647,227 aggregate
principal amount of convertible notes and 10% senior convertible
debentures outstanding on the date hereof (including additional
Indebtedness constituting default amounts and accrued interest with
respect to such convertible note and debentures).
2.
Indebtedness incurred with respect to the lease agreement, dated
October 1, 2018, between the Company and Sheffield Properties of
Illinois, Inc. relating to the Company’s principal officers
in Westlake Village, California.
3.
Indebtedness incurred with respect to the financing agreement,
dated November 8, 2010, with Gemini Pharmaceuticals, Inc. relating
to a purchase order line of credit facility.