SECURITIES PURCHASE AGREEMENT
Exhibit 10.1
This
Securities Purchase Agreement (this “Agreement”) is dated as
of ______________, between GT Biopharma, Inc., a Delaware
corporation and includes any successor Company thereto (the
“Company”), and each
purchaser identified on the signature pages hereto (each, including
its successors and permitted assigns, a “Purchaser” and
collectively, the “Purchasers”).
ARTICLE I.
“Accredited Investor”
shall have the meaning ascribed to such term in Section
3.2(c).
“Acquiring Person” shall
have the meaning ascribed to such term in Section 4.7.
“Action” shall have the
meaning ascribed to such term in Section 3.1(j).
“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 405 under the Securities Act.
“Applicable Law” shall
mean any law, rule or regulation of any governmental authority or
jurisdiction applicable to any party to this Agreement, as the case
may be.
“Board of Directors” means
the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday,
any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are
required by law or other governmental action to close.
“Buy-In” shall have the
meaning ascribed to such term in Section 4.1(h).
“Closing”
means the closing of the purchase and
sale of the Securities pursuant to Section 2.1.
“Closing Date”
means, with respect to any Closing,
the date of such Closing.
“Commission” means the
United States Securities and Exchange Commission.
1
“Common Stock” means the
common stock of the Company, par value $0.001 per share, and any
other class of securities into which such securities may hereafter
be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Company or the 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.
“Conversion Price” shall
have the meaning ascribed to such term in the Notes.
“Debentures” means those
certain 10% Senior Convertible Debentures of the Company issued on
August 2, 2018, September 7, 2018, September 24, 2018, May 22, 2019
and the Senior Convertible Notes issued on February 4,
2019.
“DGCL” means the Delaware
General Corporation Law.
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered
concurrently herewith.
“Disqualification Event”
shall have the meaning ascribed to such term in Section
3.1(oo).
“Effective
Date” means the earliest of the date that (a) a
Registration Statement has been declared effective by the
Commission with respect to all of the Underlying Shares (as defined
herein) and has been continuously effective for not less than sixty
(60) Business Days, or (b) (i) all of the Underlying Shares have
been sold pursuant to Rule 144, or (ii) may be sold by the holders
thereof (other than Affiliates of the Company) pursuant to Rule 144
without the requirement for the Company to be in compliance with
the current public information required under Rule 144 and without
volume or manner-of-sale restrictions, and (c) Company counsel has
delivered to the Transfer Agent and Purchasers a standing written
unqualified opinion that resales may then be made by such holders
of the Underlying Shares (other than Affiliates of the Company)
pursuant to an effective Registration Statement or the exemption
described in (b)(ii) above, which opinion shall be in form and
substance reasonably acceptable to such Purchasers.
“End Date” means the first
date that (i) less than 10% of the aggregate amount of Note
principal is outstanding, and (ii) no Event of Default (as defined
in the Note) nor an event which with the passage of time or the
giving of notice could become an Event of Default is
pending.
“Equity Line of Credit”
shall have the meaning ascribed to such term in Section
4.13.
“Event
of Default” shall have the meaning ascribed to such
term in the Note.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Exempt Issuance” means
the issuance of (a) shares of Common Stock or options to employees,
officers or directors of the Company 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 and only as disclosed on Schedule 3.1(g), (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 set forth on
Schedule 3.1(g),
and described in the SEC Reports, (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of
the disinterested directors of the Company, 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 the Company and shall be intended to provide to the
Company substantial additional benefits in addition to the
investment of funds, but shall not include a transaction in which
the Company 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 3.1(g), and (e)
securities issued or issuable to the Purchasers and their assigns
pursuant to this Agreement, the Notes and other Transaction
Documents including without limitation, Section 4.16 and Section
4.22 herein, or upon exercise, conversion or exchange of any such
securities.
2
“FCPA” means the Foreign
Corrupt Practices Act of 1977, as amended.
“FDA” shall have the
meaning ascribed to such term in Section 3.1(jj).
“GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).
“G&M” shall mean
Grushko & Xxxxxxx, P.C., with offices located at 000 Xxxxxxxx
Xxxxxx, Xxxxxx Xxxxxx, Xxx Xxxx 00000, Fax:
000-000-0000.
“Indebtedness” shall have
the meaning ascribed to such term in Section 3.1(aa).
“Intellectual Property
Rights” shall have the meaning ascribed to such term
in Section 3.1(o).
“Investor Questionnaire”
means the form of Accredited Investor Questionnaire annexed hereto
as Exhibit
B.
“Issuer Covered Person”
means the Company, any of its predecessors, any affiliated issuer,
any director, executive officer, other officer of the Company
participating in the Offering, any beneficial owner of 20% or more
of the Company’s outstanding voting equity securities,
calculated on the basis of voting power, and any promoter (as that
term is defined in Rule 405 under the Securities Act) connected
with the Company in any capacity at the time of sale.
“Legend
Removal Date” shall have the meaning ascribed to such
term in Section 4.1(d).
“Liens” means a lien,
charge, pledge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
“Listing Default” shall
have the meaning ascribed to such term in Section
4.11(b).
“Majority in Interest”
shall have the meaning ascribed to such term in Section
5.5.
“Material Adverse Effect”
shall have the meaning assigned to such term in Section
3.1(b).
“Material Permits” shall
have the meaning ascribed to such term in Section
3.1(m).
“Maximum Rate” shall have
the meaning ascribed to such term in Section 5.17.
“Money Laundering
Laws” shall have the
meaning ascribed to such term in Section 3.1(qq).
3
“Notes” means the
convertible notes issuable pursuant to this Agreement, in the form
of Exhibit A
hereto.
“OFAC” shall have the
meaning ascribed to such term in Section 3.1(nn).
“Participation Maximum”
shall have the meaning ascribed to such term in Section
4.16(a).
“Permitted Indebtedness”
means (a) the Indebtedness evidenced by the Notes and the
Debentures all as set forth on Schedule 3.1(aa), (b) any
liabilities for borrowed money or amounts owed not in excess of
$10,000 in the aggregate (other than trade accounts payable
incurred in the ordinary course of business), (c) all guaranties,
endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be
reflected in the Company’s consolidated balance sheet (or the
notes thereto) not affecting more than $10,000 in the aggregate,
except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business; (d) the present value of any lease payments not
in excess of $100,000 due under leases required to be capitalized
in accordance with GAAP; and (e) any liabilities for borrowed money
that are junior to the Debentures pursuant to an intercreditor
agreement acceptable to Purchasers, and the holders of which are
not granted any security interest.
“Permitted Lien” means the
individual and collective reference to the following: (a) Liens for
taxes, assessments and other governmental charges or levies not yet
due or Liens for taxes, assessments and other governmental charges
or levies being contested in good faith and by appropriate
proceedings for which adequate reserves (in the good faith judgment
of the management of the Company) have been established in
accordance with GAAP, (b) Liens imposed by law which were incurred
in the ordinary course of the Company’s business, such as
carriers’, warehousemen’s and mechanics’ Liens,
statutory landlords’ Liens, and other similar Liens arising
in the ordinary course of the Company’s business, and which
(x) do not individually or in the aggregate materially detract from
the value of such property or assets or materially impair the use
thereof in the operation of the business of the Company and its
consolidated Subsidiaries or (y) are being contested in good faith
by appropriate proceedings, which proceedings have the effect of
preventing for the foreseeable future the forfeiture or sale of the
property or asset subject to such Liens, and (c) Liens in
connection with Permitted Indebtedness under clauses (a), (b) and
(c) thereunder.
“Person”
means an individual, corporation or Company, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Pre-Notice” shall have
the meaning ascribed to such term in Section 4.16(b).
“Proceeding”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.
“Pro-Rata Portion” shall
have the meaning ascribed to such term in Section
4.16(e).
“Public
Information Failure” shall have the meaning ascribed
to such term in Section 4.3(b).
“Public Information Failure
Payments” shall have the meaning ascribed to such term
in Section 4.3(b).
“Purchaser Party” shall
have the meaning ascribed to such term in Section
4.10.
4
“Registration Rights
Agreement” means the Registration Rights Agreement,
dated the date hereof, among the Company and the Purchasers, in the
form of Exhibit D
attached hereto.
“Registration Statement”
means a registration statement declared effective by the Commission
allowing the public resale of not less than all of the Underlying
Shares by the Purchaser, at the time such registration statement is
effective and the prospectus contained therein is
current.
“Required Approvals” shall
have the meaning ascribed to such term in Section
3.1(e).
“Required Minimum” means,
as of any date, 150% of the maximum aggregate number of shares of
Common Stock then issued or potentially issuable in the future
pursuant to the Transaction Documents, including any Underlying
Shares issuable upon conversion in full of all Notes, ignoring any
conversion or exercise limits set forth therein.
“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“SEC Reports” shall have
the meaning ascribed to such term in Section 3.1(h).
“Securities” means the
Notes and the Underlying Shares.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Short Sales” means
“short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, swaps and
similar arrangements (including on a total return basis) whether
such transactions are made through U.S. or non-U.S. broker dealers
or foreign regulated brokers.
“Stock Option Plans” means
the Stock Option Plan of the Company in effect as the date of this
Agreement, the principal terms of which have been disclosed in the
SEC Reports.
“Subscription Amount”
means, as to each Purchaser, the
aggregate amount to be paid for
the Notes purchased hereunder at the Closing as specified below
such Purchaser’s name on the signature page of this Agreement
and next to the heading “Subscription Amount,” in
United States dollars and in immediately available
funds.
“Subsequent Financing”
shall have the meaning ascribed to such term in Section
4.16(a).
“Subsequent Financing
Notice” shall have the meaning ascribed to such term
in Section 4.16(b).
“Subsidiary” means
with respect to any entity at any
date, any direct or indirect Person, limited or general
partnership, limited liability company, trust, estate, association,
joint venture or other business entity of which (A) more than
50% of (i) the outstanding capital stock having (in the
absence of contingencies) ordinary voting power to elect a majority
of the board of directors or other managing body of such entity,
(ii) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership
or limited liability company or (iii) in the case of a trust,
estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity
business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such
entity, or (B) is under the actual control of the
Company.
5
“Termination
Date” means August 31, 2019.
“Trading Day” means a day
on which the principal Trading Market is open for trading for three
or more hours, or if there is no applicable Trading Market, Trading
Day shall mean Business Day.
“Trading Market” means the
first listed of any of the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in
question: the NYSE American, the Nasdaq Capital Market, the Nasdaq
Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, the OTC Bulletin Board, the OTCQB, or the OTCQX (or any
successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Notes, the Registration Rights Agreement,
all exhibits and schedules thereto and hereto and any other
documents or agreements executed by any party hereto in connection
with the transactions contemplated hereunder.
“Transfer Agent” means
Computershare, the current transfer agent of the Company, with a
mailing address of 000 Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxxx, Xxxxxxxx
00000, and a facsimile number of (000) 000-0000, and any successor
transfer agent of the Company.
“Underlying Shares” means
the shares of Common Stock issued and issuable upon conversion of
the Notes and issued and issuable in lieu of the cash payment of
interest on the Notes in accordance with the terms of the Notes and
any other shares of Common Stock issued or issuable to a Purchaser
in connection with or pursuant to the Securities or Transaction
Documents.
“Unlegended Shares” shall
have the meaning ascribed to such term in Section
4.1(d).
“Variable Priced Equity Linked
Instruments” shall have the meaning ascribed to such
term in Section 4.13.
“Variable Rate
Transaction” shall have
the meaning ascribed to such term in Section
4.13.
“VWAP”
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if the Common Stock is not then listed
or quoted for trading on a Trading Market but is then reported on
the OTC Pink Marketplace maintained by the OTC Markets Group, Inc.
(or a similar organization or agency succeeding to its functions of
reporting prices), the volume weighted average price of the Common
Stock on the first such facility (or a similar organization or
agency succeeding to its functions of reporting prices), or
(d) in all other cases, the fair market value of a share of
Common Stock as determined by an independent appraiser selected in
good faith by a Majority in Interest and reasonably acceptable to
the Company, the fees and expenses of which shall be paid by the
Company.
6
ARTICLE II.
(a) Subject
to the terms and conditions of this Agreement, each Purchaser
agrees to purchase and the Company agrees to sell and issue to each
Purchaser at the Closing (as defined below) the principal amount of
Notes of the Company as is set forth opposite such
Purchaser’s name on such Purchaser’s signature page
hereto. The Notes issued to the Purchasers pursuant to this
Agreement (including any notes issued at the Initial Closing and
any Additional Notes, as defined below) shall be referred to in
this Agreement as the “Notes.” Each Note shall
be in the form attached hereto as Exhibit A hereto.
(b) The
initial purchase and sale of the Notes shall take place remotely
via the electronic exchange of documents and signatures on the
Business Day on which all of the Transaction Documents have been
executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligation to pay
the Subscription Amount at such Closing, and (ii) the
Company’s obligations to deliver the Securities to be issued
and sold at such Closing, in each case, have been satisfied or
waived, but in no event later than the tenth Business Day following
the date hereof (such initial closing is referred to herein as the
“Initial
Closing”).
(c) After
the Initial Closing, the Company may sell, in one or more closings
and on the terms and conditions contained in this Agreement, Notes
in the aggregate principal amount of up to $2,000,000
(collectively, the “Additional Notes”), to
one or more purchasers (the “Additional Purchasers”)
reasonably acceptable to the Company, provided that (A) such
subsequent sale is consummated prior to August 31, 2019 (the
“Termination
Date”), or such date as the Company and a Majority in
Interest may mutually agree upon; and (B) each Additional Purchaser
shall become a party to the Transaction Documents by executing and
delivering a counterpart signature page to each of the Transaction
Documents. Signature pages shall be added to this Agreement to
reflect the amount of Additional Notes purchased at each such
closing (an “Additional Closing” and
together with the Initial Closing, each, a “Closing”) and the parties
purchasing such Additional Notes.
(d) At
each Closing, the payment by a Purchaser of such Purchaser’s
Subscription Amount may be made via wire transfer or a certified
check in immediately available funds to the Company.
NO
MINIMUM AMOUNT OF NOTES MUST BE SOLD IN ORDER FOR THE COMPANY TO
ACCEPT ANY SUBSCRIPTIONS, AND ALL NET PROCEEDS OF THE OFFERING WILL
BE IMMEDIATELY AVAILABLE FOR COMPANY PURPOSES UPON
CLOSING.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to
be delivered to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
Note with a principal amount as set forth on the signature page
hereto equal to each Purchaser’s Subscription Amount,
registered in the name of such Purchaser;
(iii) the
Registration Rights Agreement duly executed by the
Company;
7
(iv) a
certificate executed on behalf of the Company by its Principal
Executive Officer or Chief Executive Officer (each as defined in
the Exchange Act) of the Company, dated as of the Closing Date, in
which such officer shall certify that the conditions set forth in
Section 2.3(b) have
been fulfilled; and
(v) a
certificate executed on behalf of the Company by its
Secretary’s certificate containing (i) copies of the text of
the resolutions by which the corporate action on the part of the
Company necessary to approve this Agreement and the other
Transaction Documents and the transactions and actions contemplated
hereby and thereby, which shall be accompanied by a certificate of
the corporate secretary or assistant corporate secretary of Company
dated as of the Closing Date certifying to the Purchasers that such
resolutions were duly adopted and have not been amended or
rescinded, (ii) an incumbency certificate dated as of the Closing
Date executed on behalf of Company by its corporate secretary or
one of its assistant corporate secretaries certifying the office of
each officer of Company executing this Agreement, or any other
agreement, certificate or other instrument executed pursuant
hereto, and (iii) copies of (A) the Company’s Certificate of
Incorporation and bylaws in effect on the Closing Date, and (B) the
certificate evidencing the good standing of Company as of a day
within five (5) Business Days prior to the Closing
Date.
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause
to be delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser;
(ii) such
Purchaser’s Subscription Amount;
(iii) Accredited
Investor Questionnaire duly executed by each Purchaser;
and
(iv) the
Registration Rights Agreement duly executed by each
Purchaser.
(a) The
obligations of the Company hereunder to effect the Closing are
subject to the following conditions being met:
(i) the
accuracy in all material respects (determined without regard to any materiality,
Material Adverse Effect or other similar qualifiers therein)
on the date of this Agreement and the Closing Date of the
representations and warranties of the Purchasers contained herein
(unless as of a specific date therein in which case they shall be
accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser under this
Agreement required to be performed at or prior to the Closing Date
shall have been performed in all material respects;
and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b)
of this Agreement.
(b) The
respective obligations of a Purchaser hereunder to effect the
Closing, unless waived by such Purchaser, are subject to the
following conditions being met:
(i) the
accuracy in all material respects (determined without regard to any materiality,
Material Adverse Effect or other similar qualifiers therein)
on the date of this Agreement and Closing Date of the
representations and warranties of the Company contained herein
(unless as of a specific date therein in which case they shall be
accurate as of such date);
8
(ii) all
Required Approvals, obligations, covenants and agreements of the
Company under the Transaction Documents required to be performed or
obtained at or prior to the Closing Date shall have been performed
or obtained;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and
(v) from
the date hereof to the Closing Date, and, at any time prior to the
Closing Date, trading in securities generally as reported by
Bloomberg L.P. shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades
are reported by such service, or on any Trading Market, nor shall a
banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any
material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each
case, in the reasonable judgment of such Purchaser, makes it
impracticable or inadvisable to purchase the Securities at the
Closing.
ARTICLE III.
9
10
11
12
13
(p)
Insurance.
The Company
and each Subsidiary maintain insurance coverage for Product/Human
Clinical Trial Liability, Professional Liability, General
Liability, Property and Directors and Officers.
(q)
Transactions With
Affiliates and Employees. Except as set forth in the SEC
Reports and on Schedule
3.1(q), none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the
employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from providing for the borrowing of money
from or lending of money to, or otherwise requiring payments to or
from any officer, director or such employee or, to the knowledge of
the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner, in each case in excess of
$60,000 other than for: (i) payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on
behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the
Company.
14
15
16
(gg) Seniority.
As of the Closing Date, except as set forth on Schedule 3.1(gg), no
Indebtedness or other claim against the Company is senior to the
Debentures and Notes in right of payment, whether with respect to
interest or upon liquidation or dissolution, or otherwise, other
than indebtedness secured by purchase money security interests
(which is senior only as to underlying assets covered thereby) and
capital lease obligations (which is senior only as to the property
covered thereby).
(jj) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere
herein to the contrary notwithstanding (except for Sections 3.2(f)
and 4.15 hereof), it is understood and acknowledged by the Company
that: (i) none of the Purchasers has been asked by the Company to
agree, nor has any Purchaser agreed, to desist from purchasing or
selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by
the Company or to hold the Securities for any specified term, (ii)
past or future open market or other transactions by any Purchaser,
specifically including, without limitation, Short Sales or
“derivative” transactions, before or after the closing
of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded
securities, (iii) any Purchaser, and counter-parties in
“derivative” transactions to which any such Purchaser
is a party, directly or indirectly, may presently have a
“short” position in the Common Stock and (iv) each
Purchaser shall not be deemed to have any affiliation with or
control over any arm’s length counter-party in any
“derivative” transaction. The Company further
understands and acknowledges that (y) one or more Purchasers may
engage in hedging activities at various times during the period
that the Securities are outstanding, including, without limitation,
during the periods that the value of the Underlying Shares
deliverable with respect to Securities are being determined, and
(z) such hedging activities (if any) could reduce the value of the
existing stockholders' equity interests in the Company at and after
the time that the hedging activities are being conducted. The
Company acknowledges that such aforementioned hedging activities do
not constitute a breach of any of the Transaction
Documents.
17
(mm)
Stock Option Plans.
Each stock option granted by the Company under the Company’s
stock option plan was granted (i) in accordance with the terms of
the Company’s stock option plan and (ii) with an exercise
price at least equal to the fair market value of the Common Stock
on the date such stock option would be considered granted under
GAAP and applicable law. No stock option granted under the
Company’s stock option plan has been backdated. The Company
has not knowingly granted, and there is no and has been no Company
policy or practice to knowingly grant, stock options prior to, or
otherwise knowingly coordinate the grant of stock options with, the
release or other public announcement of material information
regarding the Company or its Subsidiaries or their financial
results or prospects.
18
(qq)
Money Laundering.
The operations of the Company and its Subsidiaries are and have
been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations
thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any Subsidiary with respect to the Money Laundering
Laws is pending or, to the knowledge of the Company or any
Subsidiary, threatened.
(rr)
Other Covered
Persons. The Company is not aware of any person (other than
any Issuer Covered Person) that has been or will be paid (directly
or indirectly) remuneration for solicitation of purchasers in
connection with the sale of any Regulation D
Securities.
(ss)
Notice of Disqualification
Events. The Company will notify the Purchasers in writing,
prior to the Closing Date of (i) any Disqualification Event
relating to any Issuer Covered Person and (ii) any event that
would, with the passage of time, become a Disqualification Event
relating to any Issuer Covered Person.
(tt) Survival.
The foregoing representations and warranties shall survive the
Closing.
19
20
The
Company acknowledges and agrees that the representations contained
in Section 3.2 shall not modify, amend or affect such
Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of
the transaction contemplated hereby.
21
ARTICLE IV.
4.1 (a)
Transfer
Restrictions. The Securities may only be disposed of in
compliance with state and federal securities laws. In connection
with any transfer of Securities other than pursuant to an effective
registration statement or Rule 144, to the Company or to an
Affiliate of a Purchaser or in connection with a pledge as
contemplated in Section 4.1(c), the Company may require the
transferor thereof to provide to the Company, at the
Company’s expense, an opinion of counsel selected by the
transferor and reasonably acceptable to the Company, the form and
substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require
registration of such transferred Securities under the Securities
Act. As a condition of such transfer, any such transferee shall
agree in writing to be bound by the terms of this Agreement and
shall have the rights and obligations of a Purchaser under this
Agreement and the other Transaction Documents.
[NEITHER] THIS
SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS
[EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY [AND THE SECURITIES
ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(a) UNDER THE
SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
22
23
(a) Until
no Purchaser owns Securities, the Company covenants to file all
periodic reports with the Commission pursuant to the Exchange Act
and maintain the registration of the Common Stock under Section
12(b) or 12(g) of the Exchange Act after such time as the Company
initially becomes subject to such requirements and to timely file
(or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to the Exchange Act and
timely file all reports that would be required to be filed by an
issuer subject to Section 12(b) or 12(g) of the Exchange Act even
if the Company is not then subject to the reporting requirements of
the Exchange Act.
24
(b) At
any time commencing on the Closing Date, and ending at such time
that all of the Securities may be sold by non-Affiliates of the
Company without the requirement for the Company to be in compliance
with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144, if the Company shall fail for any reason to
satisfy the current public information requirement under Rule
144(c) (a “Public Information Failure”) then, in
addition to such Purchaser’s other available remedies, the
Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, by reason of any such delay in or
impairment of its ability to sell the Securities, an amount in cash
equal to 2.0% of the aggregate principal amount of Notes
outstanding and accrued interest thereon, and aggregate Conversion
Price of Underlying Shares (with respect to the Notes) held by such
Purchaser on the day of a Public Information Failure and on every
thirtieth (30th) day (pro-rated for periods totaling less than
thirty days) thereafter until the earlier of (a) the date such
Public Information Failure is cured and (b) such time that such
public information is no longer required for the Purchasers to
transfer the Underlying Shares pursuant to Rule 144. The payments
to which a Purchaser shall be entitled pursuant to this Section
4.3(b) are referred to herein as “Public Information Failure
Payments.” Public Information Failure Payments shall
be paid on the earlier of (i) the last day of the calendar month
during which such Public Information Failure Payments are incurred
and (ii) the third (3rd) Business Day after the event or failure
giving rise to the Public Information Failure Payments is cured. In
the event the Company fails to make Public Information Failure
Payments in a timely manner, such Public Information Failure
Payments shall bear interest at the rate of 1.5% per month
(prorated for partial months) until paid in full. Nothing herein
shall limit such Purchaser’s right to pursue actual damages
for the Public Information Failure, and such Purchaser shall have
the right to pursue all remedies available to it at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief.
25
4.6 Securities
Laws Disclosure; Publicity. The Company shall, by 9:30 a.m.
(New York City time) on the first Trading Day following each
Closing Date, file a Current Report on Form 8-K including the
Transaction Documents as exhibits thereto with the Commission
within the time required by the Exchange Act (“Form 8-K”). A form of the
Form 8-K is annexed hereto as Exhibit C. Such Exhibit C will be identical to
the Form 8-K which will be filed with the Commission except for the
omission of signatures thereto by the Company and auditors
providing the financial statements. From and after the filing of
the Form 8-K, the Company represents to the Purchaser that it shall
have publicly disclosed all material, non-public information
delivered to the Purchaser by the Company or any of its
Subsidiaries, or any of their respective officers, directors,
employees or agents in connection with the transactions
contemplated by the Transaction Documents. The Company and
Purchaser shall consult with each other in issuing any press
releases with respect to the transactions contemplated hereby, and
neither the Company nor Purchaser shall issue any press release nor
otherwise make any such public statement without the prior consent
of the Company, with respect to any press release of Purchaser, or
without the prior consent of Purchaser, with respect to any press
release of the Company, which consent shall not unreasonably be
withheld or delayed, except if such disclosure is required by law,
in which case the disclosing party shall promptly provide the other
party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly
disclose the name of Purchaser, or include the name of Purchaser in
any filing with the Commission or any regulatory agency or Trading
Market unless the name of Purchaser is already included in the body
of the Transaction Documents, without the prior written consent of
Purchaser, except: (a) as required by federal securities law in
connection with the filing of final Transaction Documents with the
Commission and (b) to the extent such disclosure is required by law
or Trading Market regulations, in which case the Company shall
provide the Purchaser with prior notice of such disclosure
permitted under this clause (b). The Company may file a Form 10-Q
in lieu of the Form 8-K provided such filing contains the content
required to be included in the Form 8-K and the Form 10-Q is filed
not later than the Trading Day after the Closing Date.
26
(a) As
of the date hereof, the Company, ignoring any conversion or
exercise limitations, has reserved for each Purchaser and the
Company shall continue to reserve and keep available at all times,
the “Required Minimum”, free of pre-emptive
rights. If, on any date, the number of authorized but
unissued (and otherwise unreserved) shares of Common Stock is less
than the Required Minimum on such date (an “Authorized Share
Failure”), then the Board of Directors shall use
commercially reasonable efforts to amend the Company’s
articles of incorporation to increase the number of authorized but
unissued shares of Common Stock to at least the Required Minimum
plus such other amount as may be required for the Company’s
other purposes, and reserve the Required Minimum on behalf of the
Purchaser, as soon as possible and in any event not later than the
60th day
after such date. Notwithstanding the foregoing, the occurrence of
an Authorized Share Failure is an Event of Default.
27
(b) The
Company shall, if applicable: (i) in the time and manner required
by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number
of shares of Common Stock at least equal to the Required Minimum on
the date of such application, (ii) take all steps necessary to
cause such shares of Common Stock to be approved for listing or
quotation on such Trading Market as soon as possible thereafter,
(iii) provide to the Purchasers evidence of such listing or
quotation and (iv) maintain the listing or quotation of such Common
Stock on any date at least equal to the Required Minimum on such
date on such Trading Market or another Trading Market. The Company will then take all action necessary to
continue the listing or quotation and trading of its Common Stock
on a Trading Market until the later of (i) at least six (6) years
after the Closing Date, and (ii) for so long as the Notes are
outstanding, and will comply in all respects with the
Company’s reporting, filing and other obligations under the
bylaws or rules of the Trading Market. In the event the
aforedescribed listing is not continuously maintained for six (6)
years after the Closing Date and for so long as Notes are
outstanding (a “Listing Default”), then
in addition to any other rights the Purchasers may have hereunder
or under applicable law, on the first day of a Listing Default and
on each monthly anniversary of each such Listing Default date (if
the applicable Listing Default shall not have been cured by such
date) until the applicable Listing Default is cured, the Company
shall pay to each Purchaser an amount in cash, as partial
liquidated damages and not as a penalty, equal to 2% of the
aggregate Subscription Amount of Notes, and Conversion Price of the
Conversion Shares held by such Purchaser on the day of a Listing
Default and on every thirtieth day (pro-rated for periods less than
thirty days) thereafter until the date such Listing Default is
cured. If the Company fails to pay any liquidated damages pursuant
to this Section in a timely manner, the Company will pay interest
thereon at a rate of 1.5% per month (pro-rated for partial months)
to the Purchaser.
28
(a) Until
the End Date, upon any proposed issuance by the Company or any of
its Subsidiaries of Common Stock, Common Stock Equivalents,
Indebtedness 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 Notes, or (ii) an
Exempt Issuance (each a “Subsequent Financing”),
the Purchasers 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 to each other in proportion to their Subscription Amounts
on the same terms, conditions and price provided for in the
Subsequent Financing, unless the Subsequent Financing is an
underwritten public offering, in which case the Company shall
notify each Purchaser of such public offering when it is lawful for
the Company to do so, but no Purchaser shall be entitled to
purchase any particular amount of such public offering without the
approval of the lead underwriter of such underwritten public
offering.
(b) At
least ten (10) Trading Days prior to the closing of the Subsequent
Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing
(“Pre-Notice”), which
Pre-Notice shall ask such Purchaser if it wants to review the
details of such financing (such additional notice, a
“Subsequent
Financing Notice”). Upon the request of a Purchaser,
and only upon a request by such Purchaser, for a Subsequent
Financing Notice, the Company shall promptly, but no later than one
(1) Trading Day after such request, deliver a Subsequent Financing
Notice to such Purchaser. The requesting Purchaser 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.
(c) Any
Purchaser desiring to participate in such Subsequent Financing must
provide written notice to the Company by not later than 5:30 p.m.
(New York City time) on the tenth (10th) Trading Day after
all of the Purchasers have received the Pre-Notice that the
Purchaser is willing to participate in the Subsequent Financing,
the amount of such Purchaser’s participation, and
representing and warranting that such Purchaser has such funds
ready, willing, and available for investment on the terms set forth
in the Subsequent Financing Notice. If the Company receives no such
notice from a Purchaser as of such tenth (10th Trading Day, such
Purchaser shall be deemed to have notified the Company that it does
not elect to participate.
29
(d) If
by 5:30 p.m. (New York City time) on the fifteenth (15th ) Trading Day after
all of the Purchasers have received the Pre-Notice, notifications
by the Purchasers of their willingness to participate in the
Subsequent Financing (or to cause their designees to participate)
is, in the aggregate, less than the total amount of the
Participation Maximum of the Subsequent Financing, then the Company
may affect the remaining portion of such Subsequent Financing on
the terms and with the Persons set forth in the Subsequent
Financing Notice and the Purchasers shall simultaneously affect
their portion of such Subsequent Financing as set forth in their
notifications to the Company consistent with the terms set forth in
the Subsequent Financing Notice.
(e) If
by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after
all of the Purchasers have received the Pre-Notice, the Company
receives responses to a Subsequent Financing Notice from Purchasers
seeking to purchase more than the aggregate amount of the
Participation Maximum, each such Purchaser shall have the right to
purchase its Pro Rata Portion (as defined below) of the
Participation Maximum. “Pro Rata Portion” means
the ratio of (x) the principal amount of Notes purchased hereunder
by a Purchaser participating under this Section 4.16 and (y) the
sum of the aggregate principal amounts of Notes purchased hereunder
by all Purchasers participating under this Section
4.16.
(f) The
Company must provide the Purchasers with a second Subsequent
Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.16, 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.
(g) The
Company and each Purchaser agree that if any Purchaser elects to
participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or
provision whereby such Purchaser shall be required to agree to any
restrictions on trading as to any of the Securities purchased
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 such Purchaser.
(h) Notwithstanding
anything to the contrary in this Section 4.16 and unless otherwise
agreed to by such Purchaser, the Company shall either confirm in
writing to such Purchaser 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 such Purchaser 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 such
Purchaser, such transaction shall be deemed to have been abandoned
and such Purchaser shall not be deemed to be in possession of any
material, non-public information with respect to the Company or any
of its Subsidiaries.
30
4.20
DTC
Program. At all times that
Notes are outstanding after the listing required by Section 4.11(b)
is completed, the Company shall employ as the transfer agent for
its Common Stock and Underlying Shares a participant in the
Depository Trust Company Automated Securities Transfer Program and
cause the Common Stock and Underlying Shares to be transferable
pursuant to such program.
4.21
Reimbursement. If
any Purchaser becomes involved in any capacity in any Proceeding by
or against any Person who is a stockholder of the Company (except
as a result of sales, pledges, margin sales and similar
transactions by such Purchaser to or with any current stockholder),
solely as a result of such Purchaser’s acquisition of the
Securities under this Agreement, the Company will reimburse such
Purchaser for its reasonable legal and other expenses (including
the cost of any investigation preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are
incurred. The reimbursement obligations of the Company under this
paragraph shall be in addition to any liability which the Company
may otherwise have, shall extend upon the same terms and conditions
to any Affiliates of the Purchasers who are actually named in such
action, proceeding or investigation, and partners, directors,
agents, employees and controlling persons (if any), as the case may
be, of the Purchasers and any such Affiliate, and shall be binding
upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of the Company, the Purchasers and any
such Affiliate and any such Person. The Company also agrees that
neither the Purchasers nor any such Affiliates, partners,
directors, agents, employees or controlling persons shall have any
liability to the Company or any Person asserting claims on behalf
of or in right of the Company solely as a result of acquiring the
Securities under this Agreement.
4.22
Most Favored Nation
Provision. From the date hereof and for so long as a
Purchaser holds any Securities, in the event that the Company
issues or sells any Common Stock or Common Stock Equivalents, if a
Purchaser then holding outstanding Securities reasonably believes
that any of the terms and conditions appurtenant to such issuance
or sale are more favorable to such investors than are the terms and
conditions granted to the Purchasers hereunder, upon notice to the
Company by such Purchaser within five (5) Trading Days after
disclosure of such issuance or sale, the Company shall amend the
terms of this transaction as to such Purchaser only so as to give
such Purchaser the benefit of such more favorable terms or
conditions. This Section 4.22 shall not apply with respect to an
Exempt Issuance. The Company shall provide each Purchaser with
notice of any such issuance or sale not later than ten (10) Trading
Days before such issuance or sale.
4.23
Indebtedness. For
so long as any Note is outstanding, the Company will not incur any
Indebtedness other than Permitted Indebtedness, without the consent
of the Majority in Interest.
31
4.24
Notice of Disqualification
Events. The Company will notify the Purchasers in writing,
prior to the Closing Date of (i) any Disqualification Event
relating to any Issuer Covered Person and (ii) any event that
would, with the passage of time, become a Disqualification Event
relating to any Issuer Covered Person not otherwise disclosed
herein or in the SEC Reports.
4.25
Duration of
Undertakings. Unless otherwise stated in this Article IV,
all of the Company’s undertakings, obligations and
responsibilities set forth in Article IV of this Agreement shall
remain in effect for so long as any Securities remain
outstanding.
4.26
Registration
Rights. On or before the 30th calendar day
following the Initial Closing, the Company shall file a
registration statement on Form S-1 (the “Resale S-1”) providing
for the resale by the Purchasers of the Underlying Shares
determinable as of the date such registration statement is first
filed (or such lesser number of Underlying Shares as permitted by
the SEC) pursuant to the terms of the Registration Rights
Agreement.
ARTICLE V.
5.4 Notices.
All notices, demands, requests,
consents, approvals, and other communications required or permitted
hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or
facsimile, addressed as set forth below or to such other address as
such party shall have specified most recently by written notice.
Any notice or other communication required or permitted to be given
hereunder shall be deemed effective (a) upon hand delivery or
delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated
below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be: (i) if to
the Company, to: GT Biopharma, Inc., 0000 Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx Xxxxx, XX 00000, Attn: Chief Executive Officer, with a copy
to (which shall not constitute notice): Xxxx X. Xxxxxx, Esq., X.X.
Xxx 000, Xxxxxx, XX 00000, email: xxxxxx@xxxxxxx.xxx, and
(ii) if to the Purchasers, to: the addresses and fax numbers
indicated on the signature pages hereto, with an additional copy by
fax only to (which shall not constitute notice): Grushko &
Xxxxxxx, P.C., 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxx Xxxx 00000,
fax: (000) 000-0000.
32
5.9 Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any
other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any action, suit or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or
proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. If either party shall
commence an action or proceeding to enforce any provisions of the
Transaction Documents, then, in addition to the obligations of the
Company under Section 4.10, the prevailing party in such action,
suit or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses
incurred with the investigation, preparation and prosecution of
such action or proceeding.
33
34
35
(Signature Pages Follow)
36
IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
|
Address for
Notice:
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
|
By:__________________________________________
Name:
Xxxxxx Xxxxxx
Title: Chief Financial Officer
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
37
[PURCHASER
SIGNATURE PAGE TO GT BIOPHARMA, INC.
IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
Name of
Purchaser: __________________________________________________________
Signature of Authorized Signatory of Purchaser:
__________________________________
Name of
Authorized Signatory: ________________________________________________
Title
of Authorized Signatory: _____________________________________________________
Email
Address of Authorized Signatory: ______________________________________________
Facsimile
Number of Authorized Signatory:
__________________________________________
State
of Residence of Purchaser: ___________________________________________________
Address
for Notice to Purchaser:
Address
for Delivery of Securities to Purchaser (if not same as address for
notice):
Cash
Subscription Amount: US$___________
Total
Note principal amount: ___________________
EIN
Number, if applicable, will be provided under separate
cover
Date:
___________________________
[SIGNATURE
PAGES CONTINUE]
38
Exhibit
A
Form of
Note
Exhibit
B
Form of Investor
Questionnaire
Exhibit
C
Form of
8-K
Exhibit
D
Registration Rights
Agreement
Schedule
3.1(a)
Schedule
3.1(g)
Schedule
3.1(h)
Schedule
3.1(i)
Schedule
3.1(j)
Schedule
3.1(k)
Schedule
3.1(l)
Schedule
3.1(q)
Schedule
3.1(s)
Schedule
3.1(aa)
Schedule
3.1(bb)
Schedule
3.1(cc)
Schedule
3.1(ff)
Schedule
3.1(gg)
Schedule
4.9
1.
39
EXHIBIT B
ACCREDITED INVESTOR QUESTIONNAIRE
IN CONNECTION WITH INVESTMENT IN CONVERTIBLE NOTE
A DELAWARE CORPORATION
PURSUANT TO SECURITIES PURCHASE AGREEMENT DATED
______________
TO :
0000
Xxxxxxxx Xxxx, Xxxxx 00
Xxxxxxx
Xxxxx, XX 00000
Your
answers will be kept strictly confidential at all times. However,
GT Biopharma, Inc. (the “Company”) may present this
Questionnaire to such parties as it deems appropriate in order to
assure itself that the offer and sale of securities of the Company
will not result in a violation of the registration provisions of
the Securities Act of 1933, as amended, or a violation of the
securities laws of any state.
1.
Please provide the
following information:
Name:
Name of additional
purchaser:
(Please
complete information in Question 5)
Date of
birth, or if other than an individual, year of organization or
incorporation:
2.
Residence address,
or if other than an individual, principal office
address:
Telephone
number:
Social Security
Number:
Taxpayer
Identification Number:
40
3. Business
address:
Business telephone
number:
4. Send mail
to:
Residence
______
Business
_______
5.
With respect to
tenants in common, joint tenants and tenants by the entirety,
complete only if information differs from that above:
Residence
address:
Telephone
number:
Social Security
Number:
Taxpayer
Identification Number:
Business
address:
Business telephone
number:
Send Mail
to:
Residence
_______
Business
_______
6.
Please describe
your present or most recent business or occupation and indicate
such information as the nature of your employment, how long you
have been employed there, the principal business of your employer,
the principal activities under your management or supervision and
the scope (e.g. dollar volume, industry rank, etc.) of such
activities:
41
7.
Please state
whether you (i) are associated with or affiliated with a member of
the Financial Industry Regulatory Association, Inc.
(“FINRA”), (ii) are an owner of stock or other
securities of FINRA member (other than stock or other securities
purchased on the open market), or (iii) have made a subordinated
loan to any FINRA member:
_______
_______
Yes
No
(a)
If you answered yes
to any of (i) – (iii) above, please indicate the applicable
answer and briefly describe the facts below:
8A.
Applicable to
Individuals ONLY. Please answer the following questions concerning
your financial condition as an Accredited Investor (within the
meaning of Rule 501 of Regulation D). If the purchaser is more than
one individual, each individual must initial an answer where the
question indicates a “yes” or “no” response
and must answer any other question fully, indicating to which
individual such answer applies. If the purchaser is purchasing
jointly with his or her spouse, one answer may be indicated for the
couple as a whole:
8.1
Does your net
worth* (or joint net worth with your spouse) exceed
$1,000,000?
_______
_______
Yes
No
8.2
Did you have an
individual income** in excess of $200,000 or joint income together
with your spouse in excess of $300,000 in each of the two most
recent years and do you reasonably expect to reach the same income
level in the current year?
_______
_______
Yes
No
8.3
Are you an
executive officer of the Company?
_______
_______
Yes
No
* For
purposes hereof, net worth shall be deemed to include ALL of your
assets, liquid or illiquid MINUS any liabilities.
** For
purposes hereof, the term “income” is not limited to
“adjusted gross income” as that term is defined for
federal income tax purposes, but rather includes certain items of
income which are deducted in computing “adjusted gross
income”. For investors who are salaried employees, the gross
salary of such investor, minus any significant expenses personally
incurred by such investor in connection with earning the salary,
plus any income from any other source including unearned income, is
a fair measure of “income” for purposes hereof. For
investors who are self-employed, “income” is generally
construed to mean total revenues received during the calendar year
minus significant expenses incurred in connection with earning such
revenues.
42
8.B
Applicable to
Corporations, Partnerships, Trusts, Limited Liability Companies and
other Entities ONLY:
The
purchaser is an Accredited Investor because the purchaser falls
within at least one of the following categories (Check all
appropriate lines):
___
(i) a bank as
defined in Section 3(a)(2) of the Act or a savings and loan
association or other institution as defined in Section 3(a)(5)(A)
of the Act whether acting in its individual or fiduciary
capacity;
___
(ii) a
broker-dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended;
___
(iii) an insurance
company as defined in Section 2(13) of the Act;
___
(iv) an investment
company registered under the Investment Company Act of 1940, as
amended (the “Investment Act”) or a business
development company as defined in Section 2(a)(48) of the
Investment Act;
___
(v) a Small
Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958, as amended;
___
(vi) a plan
established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, where such plan has
total assets in excess of $5,000,000;
___
(vii) an employee
benefit plan within the meaning of Title 1 of the Employee
Retirement Income Security Act of 1974, as amended (the
“Employee Act”), where the investment decision is made
by a plan fiduciary, as defined in Section 3(21) of the Employee
Act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or an employee
benefit plan that has total assets in excess of $5,000,000, or a
self-directed plan the investment decisions of which are made
solely by persons that are Accredited Investors;
___
(viii) a private
business development company, as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940, as amended;
___
(ix) an
organization described in Section 501(c)(3) of the Internal Revenue
Code, a corporation, a Massachusetts or similar business trust, or
a partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of
$5,000,000;
___
(x) a trust, with
total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is
directed by a “sophisticated” person, as described in
Rule 506(b)(2)(ii) promulgated under the Act, who has such
knowledge and experience in financial and business matters that he
or she is capable of evaluating the merits and risks of the
prospective investment;
___
(xi) an entity in
which all of the equity investors are persons or entities described
above (“Accredited Investors”). ALL EQUITY OWNERS MUST
COMPLETE “EXHIBIT A” ATTACHED HERETO.
43
9.A
Do you have
sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks
associated with investing in the Company?
_______
_______
Yes
No
ANSWER
QUESTION 9B ONLY IF THE ANSWER TO QUESTION 9A WAS
“NO.”
9.B
If the answer to
Question 9A was “NO,” do you have a financial or
investment adviser (a) that is acting in the capacity as a
purchaser representative and (b) who has sufficient knowledge and
experience in financial and business matters so as to be capable of
evaluating the merits and risks associated with investing in the
Company?
_______
_______
Yes
No
If you
have a financial or investment adviser(s), please identify each
such person and indicate his or her business address and telephone
number in the space below. (Each such person must complete, and you
must review and acknowledge, a separate Purchaser Representative
Questionnaire which will be supplied at your request).
10.
You have the right,
will be afforded an opportunity, and are encouraged to investigate
the Company and review relevant factors and documents pertaining to
the officers of the Company, and the Company and its business and
to ask questions of a qualified representative of the Company
regarding this investment and the properties, operations, and
methods of doing business of the Company.
Have
you or has your purchaser representative, if any, conducted any
such investigation, sought such documents or asked questions of a
qualified representative of the Company regarding this investment
and the properties, operations, and methods of doing business of
the Company?
_______
_______
Yes
No
If so, briefly
describe:
If so,
have you completed your investigation and/or received satisfactory
answers to your questions?
_______
_______
Yes
No
44
11.
Do you understand
the nature of an investment in the Company and the risks associated
with such an investment?
_______
_______
Yes
No
12.
Do you understand
that there is no guarantee of any financial return on this
investment and that you will be exposed to the risk of losing your
entire investment?
_______
_______
Yes
No
13.
Do you understand
that this investment is not liquid?
_______
_______
Yes
No
14.
Do you have
adequate means of providing for your current needs and personal
contingencies in view of the fact that this is not a liquid
investment?
_______
_______
Yes
No
15.
Are you aware of
the Company’s business affairs and financial condition, and
have you acquired all such information about the Company as you
deem necessary and appropriate to enable you to reach an informed
and knowledgeable decision to acquire the Interests?
_______
_______
Yes
No
16.
Do you have a
“pre-existing relationship” with the Company or any of
the officers of the Company?
_______
_______
Yes
No
(For
purposes hereof, “pre-existing relationship” means any
relationship consisting of personal or business contacts of a
nature and duration such as would enable a reasonably prudent
investor to be aware of the character, business acumen, and general
business and financial circumstances of the person with whom such
relationship exists.)
If so,
please name the individual or other person with whom you have a
pre-existing relationship and describe the
relationship:
______________________________________________________________________________
______________________________________________________________________________
45
17.
Exceptions
to the representations and warranties made in Section 3.2 of the
Securities Purchase Agreement (if no exceptions, write
“none” – if left blank, the response will be
deemed to be “none”):
___________________________________________________
_____________________________________________________________________________
Dated:
__________________, 2019
If
purchaser is one or more individuals (all individuals must
sign):
(Type
or print name of prospective purchaser)
Signature
of prospective purchaser
Social
Security Number
(Type
or print name of additional purchaser)
Signature
of spouse, joint tenant, tenant in common or other signature, if
required
Social
Security Number
46
Annex A
Definition of Accredited Investor
The
securities will only be sold to investors who represent in writing
in the Securities Purchase Agreement that they are Accredited
Investors, as defined in Regulation D, Rule 501 under the Act which
definition is set forth below:
1.
A natural person
whose net worth, or joint net worth with spouse, at the time of
purchase exceeds $1 million (excluding home); or
2.
A natural person
whose individual gross income exceeded $200,000 or whose joint
income with that person’s spouse exceeded $300,000 in each of
the last two years, and who reasonably expects to exceed such
income level in the current year; or
3.
A trust with total
assets in excess of $5 million, not formed for the specific purpose
of acquiring the securities offered, whose purchase is directed by
a sophisticated person described in Regulation D; or
4.
A director or
executive officer of the Company; or
5.
The investor is an
entity, all of the owners of which are Accredited Investors;
or
6.
(a) bank as defined
in Section 3(a)(2) of the Act, or any savings and loan association
or other institution as defined in Section 3(a)(5)(A) of the Act,
(b) any broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, (c) an insurance Company as
defined in Section 2(13) of the Act, (d) an investment Company
registered under the Investment Company Act of 1940 or a business
development Company as defined in Section 2(a)(48) of such Act, (e)
a Small Business Investment Company licensed by the United States
Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958, (f) an employee benefit plan
established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political
subdivisions, if such plan has total assets in excess of $5
million, (g) an employee benefit plan within the meaning of Title I
of the Employee Retirement Income Securities Act of 1974, and the
employee benefit plan has assets in excess of $5 million, or the
investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such act, that is either a bank, savings and loan
institution, insurance Company, or registered investment advisor,
or, if a self-directed plan, with an investment decisions made
solely by persons that are Accredited Investors, (h) a private
business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940, or (i) an organization
described in Section 501(c)(3) of the Internal Revenue code,
corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
securities offered, with assets in excess of $5
million.
47
EXHIBIT
“A” TO ACCREDITED INVESTOR QUESTIONNAIRE
ACCREDITED
CORPORATIONS, PARTNERSHIPS, LIMITED LIABILITY COMPANIES, TRUSTS OR
OTHER ENTITIES INITIALING QUESTION 8B(xi) MUST PROVIDE THE
FOLLOWING INFORMATION.
I
hereby certify that set forth below is a complete list of all
equity owners in __________________ [NAME OF ENTITY], a
[TYPE OF
ENTITY] formed pursuant to the laws of the State
of
.. I also certify that EACH
SUCH OWNER HAS INITIALED THE SPACE OPPOSITE HIS OR HER NAME
and that each such owner understands that by initialing that space
he or she is representing that he or she is an accredited
individual investor satisfying the test for accredited individual
investors indicated under “Type of Accredited
Investor.”
__________________________________________
signature of
authorized corporate officer, general partner or
trustee
Name of Equity
Owner Type
of Accredited Investor0F1
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
1
Indicate which
Subparagraph of 8.1 - 8.3 the equity owner satisfies.
48