FORM OF PRE-FUNDED WARRANT] GT BIOPHARMA, INC. Pre-Funded Warrant To Purchase Common Stock
Exhibit 4.3
[FORM OF PRE-FUNDED WARRANT]
Pre-Funded Warrant To Purchase Common Stock
CUSIP
No.: ___________
Warrant
No.:_______
Number
of Shares of Common Stock:_____________
Exercise
Price Per Share: $____ (as adjusted as provided herein, the
“Exercise
Price”)
Date of
Issuance: ______________, 2021 (“Issuance Date”)
Expiration
Date: ___________________
GT
Biopharma, Inc., a Delaware corporation (the “Company”), hereby certifies that,
for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, ______________, the registered
holder hereof or its permitted assigns (the “Holder”), is entitled, subject to
the terms set forth below, to purchase from the Company, at the
Exercise Price (as defined below) then in effect, at any time or
times on or after the Issuance Date, but not after 11:59 p.m., New
York time, on the Expiration Date, (as defined below), the number
of fully paid non-assessable shares of Common Stock set forth
above, subject to adjustment as provided herein (the
“Warrant
Shares”). Except as otherwise defined herein,
capitalized terms in this Pre-Funded Warrant to Purchase Common
Stock (including any Pre-Funded Warrants to Purchase Common Stock
issued in exchange, transfer or replacement hereof, this
“Warrant”),
shall have the meanings set forth in Section 17.
1. EXERCISE OF
WARRANT.
(a) Mechanics of Exercise. Subject
to the terms and conditions hereof (including, without limitation,
the limitations set forth in Section 1(d)), this Warrant may be
exercised by the Holder at any time or times on or after the
Issuance Date, in whole or in
part, by delivery of a written notice, in the form attached hereto
as Exhibit A (the
“Exercise
Notice”), of the Holder's election to exercise this
Warrant. No ink-original Exercise Notice shall be required, nor
shall any medallion guarantee (or other type of guarantee or
notarization) of any Exercise Notice be required. The Holder shall
not be required to deliver the original Warrant in order to effect
an exercise hereunder. Execution and delivery of the Exercise
Notice with respect to less than all of the Warrant Shares shall
have the same effect as cancellation of the original Warrant and
issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. On or before the first (1st)
Trading Day following the date on which the Holder has delivered an
Exercise Notice, the Company shall transmit by electronic mail or
facsimile an acknowledgment of confirmation of receipt of the
Exercise Notice to the Holder and the Company's transfer agent (the
“Transfer
Agent”). On or before the earlier of (i) second (2nd)
Trading Day and (ii) the number of Trading Days comprising the
Standard Settlement Period, in each case, following the date on
which the Holder has delivered the Exercise Notice (a
“Share Delivery
Date”), the Company shall (X) provided that the
Transfer Agent is participating in The Depository Trust Company
(“DTC”) Fast
Automated Securities Transfer Program, credit such aggregate number
of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the Holder's or its designee's balance account with DTC
through its Deposit / Withdrawal At Custodian system, or (Y) if the
Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and dispatch by overnight
courier to the address as specified in the Exercise Notice, a
certificate, registered in the Company's share register in the name
of the Holder or its designee, for the number of Warrant Shares to
which the Holder is entitled pursuant to such exercise. The Company
shall be responsible for all fees and expenses of the Transfer
Agent and all fees and expenses with respect to the issuance of
Warrant Shares via DTC, if any, including without limitation for
same day processing. Upon delivery of the Exercise Notice, the
Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date such
Warrant Shares are credited to the Holder's DTC account or the date
of delivery of the certificates evidencing such Warrant Shares, as
the case may be. If this Warrant is submitted in connection with
any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an
exercise, then the Company shall as soon as practicable and in no
event later than five (5) Trading Days after any exercise and at
its own expense, issue a new Warrant (in accordance with Section
7(d)) representing the right to purchase the number of Warrant
Shares issuable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which
this Warrant is exercised. No fractional Warrant Shares are to be
issued upon the exercise of this Warrant, but rather the number of
Warrant Shares to be issued shall be rounded up to the nearest
whole number. The Company shall pay any and all taxes which may be
payable with respect to the issuance and delivery of Warrant Shares
upon exercise of this Warrant. The Company's obligations to issue
and deliver Warrant Shares in accordance with the terms and subject
to the conditions hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the
same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to
enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination. The aggregate Exercise Price of this
Warrant has been pre-funded to the Company on or before the
Issuance Date, and consequently no additional consideration be
required to be paid the Holder to any Person to effect any exercise
of this Warrant. The Holder shall not be entitled to the return or
refund of all or any portion of such pre-paid aggregate Exercise
Price under any circumstances or for any reason whatsoever,
including in the event this Warrant shall not have been exercised
prior to the Expiration Date.
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(b) Company's Failure to Timely Deliver
Securities. If the Company shall fail for any reason or for
no reason to issue to the Holder on or prior to the applicable
Share Delivery Date either (i) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer
Program, a certificate for the number of shares of Common Stock to
which the Holder is entitled and register such shares of Common
Stock on the Company's share register or (ii) if the Transfer Agent
is participating in the DTC Fast Automated Securities Transfer
Program, to credit the Holder's balance account with DTC, for such
number of shares of Common Stock to which the Holder is entitled
upon the Holder's exercise of this Warrant by crediting such
aggregate number of Warrant Shares to which the Holder is entitled
pursuant to such exercise to the Holder's or its designee's balance
account with DTC through its Deposit / Withdrawal At Custodian
system (an “Exercise
Failure”), then, in addition to all other remedies
available to the Holder, (iii) the Company shall pay in cash to the
Holder on each day after the applicable Share Delivery Date and
during such Exercise Failure an amount equal to 1.5% of the product
of (A) the sum of the number of shares of Common Stock not issued
to the Holder on or prior to the Share Delivery Date and to which
the Holder is entitled, and (B) any trading price of the Common
Stock selected by the Holder in writing as in effect at any time
during the period beginning on the date of the applicable exercise
and ending on the applicable Share Delivery Date, and (Y) the
Holder, upon written notice to the Company, may void its Exercise
Notice with respect to, and retain or have returned, as the case
may be, any portion of this Warrant that has not been exercised
pursuant to such Exercise Notice; provided that the voiding of an
Exercise Notice shall not affect the Company's obligations to make
any payments which have accrued prior to the date of such notice
pursuant to this Section 1(b) or otherwise. In addition to the
foregoing, if on or prior to the applicable Share Delivery Date,
and if the Transfer Agent is not participating in the DTC Fast
Automated Securities Transfer Program, the Company shall fail to
issue and deliver a certificate to the Holder and register such
shares of Common Stock on the Company's share register or, if the
Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program, credit the Holder's balance account
with DTC for the number of shares of Common Stock to which the
Holder is entitled upon the Holder's exercise hereunder or pursuant
to the Company's obligation pursuant to clause (ii) below, and if
on or after such Trading Day the Holder purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving
from the Company (a “Buy-In”), then the Company shall,
within three (3) Trading Days after the Holder's request and in the
Holder's discretion, either (i) pay cash to the Holder in an amount
equal to the Holder's total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (the “Buy-In Price”), at which point the
Company's obligation to deliver such certificate (and to issue such
shares of Common Stock) or credit such Holder's balance account
with DTC for such shares of Common Stock shall terminate, or (ii)
promptly honor its obligation to deliver to the Holder a
certificate or certificates representing such shares of Common
Stock or credit such Holder's balance account with DTC, as
applicable, and pay cash to the Holder in an amount equal to the
excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) any trading price of
the Common Stock selected by the Holder in writing as in effect at
any time during the period beginning on the date of the applicable
exercise and ending on the applicable Share Delivery Date. Nothing
shall limit the Holder's right to pursue any other remedies
available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive
relief with respect to the Company's failure to timely deliver
certificates representing shares of Common Stock (or to
electronically deliver such shares of Common Stock) upon the
exercise of this Warrant as required pursuant to the terms
hereof.
(c) Disputes. In the case of a
dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall
promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section
12.
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(d) Beneficial Ownership.
Notwithstanding anything to the
contrary contained herein, the Company shall not affect the
exercise of any portion of this Warrant, and the Holder shall not
have the right to exercise any portion of this Warrant, pursuant to
the terms and conditions of this Warrant and any such exercise
shall be null and void and treated as if never made, to the extent
that after giving effect to such exercise, the Holder together with
the other Attribution Parties collectively would beneficially own
in excess of 4.99% (the “Maximum
Percentage”) of the
number of shares of Common Stock outstanding immediately after
giving effect to such exercise. For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock
beneficially owned by the Holder and the other Attribution Parties
shall include the number of shares of Common Stock held by the
Holder and all other Attribution Parties plus the number of shares
of Common Stock issuable upon exercise of this Warrant with respect
to which the determination of such sentence is being made, but
shall exclude the number of shares of Common Stock which would be
issuable upon (A) exercise of the remaining, unexercised portion of
this Warrant beneficially owned by the Holder or any of the other
Attribution Parties and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the
Company (including, without limitation, any convertible notes or
convertible preferred stock or warrants) beneficially owned by the
Holder subject to a limitation on conversion or exercise analogous
to the limitation contained in this Section 1(d). For purposes of
this Section 1(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the “1934 Act”). For purposes of determining the number
of outstanding shares of Common Stock the Holder may acquire upon
the exercise of this Warrant without exceeding the Maximum
Percentage, the Holder may rely on the number of outstanding shares
of Common Stock as reflected in (x) the Company's most recent
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K or other public filing with the Securities
and Exchange Commission (the “SEC”), as the case may be, (y) a
more recent public announcement by the Company or (3) any other
written notice by the Company or the
Transfer Agent setting forth the number of shares of Common Stock
outstanding (the
“Reported Outstanding Share
Number”). If the Company
receives an Exercise Notice from the Holder at a time when the
actual number of outstanding shares of Common Stock is less than
the Reported Outstanding Share Number, the Company shall notify the
Holder in writing of the number of shares of Common Stock then
outstanding and, to the extent that such Exercise Notice would
otherwise cause the Holder's beneficial ownership, as determined
pursuant to this Section 1(d), to exceed the Maximum Percentage,
the Holder must notify the Company of a reduced number of Warrant
Shares to be purchased pursuant to such Exercise Notice
(the number of shares by which such
purchase is reduced, the “Reduction
Shares”). For any
reason at any time, upon the written or oral request of the Holder,
the Company shall within one (1)
Trading Day confirm orally and
in writing or by electronic mail to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder and any other Attribution
Party since the date as of which the Reported Outstanding Share
Number was reported. In the event that the issuance of shares of
Common Stock to the Holder upon exercise of this Warrant results in
the Holder and the other Attribution Parties being deemed to
beneficially own, in the aggregate, more than the Maximum
Percentage of the number of outstanding shares of Common Stock (as
determined under Section 13(d) of the 1934 Act), the number of
shares so issued by which the Holder's and the other Attribution
Parties' aggregate beneficial ownership exceeds the Maximum
Percentage (the “Excess
Shares”) shall be deemed
null and void and shall be cancelled ab initio, and the Holder
shall not have the power to vote or to transfer the Excess
Shares. Upon delivery of a written notice to the Company,
the Holder may from time to time increase or decrease the Maximum
Percentage to any other percentage not in excess of 9.99% as
specified in such notice; provided that (i) any such increase in
the Maximum Percentage will not be effective until the sixty-first
(61st) day after such notice is delivered to the Company and (ii)
any such increase or decrease will apply only to the Holder and the
other Attribution Parties. For purposes of clarity, the shares of
Common Stock issuable pursuant to the terms of this Warrant in
excess of the Maximum Percentage shall not be deemed to be
beneficially owned by the Holder for any purpose including for
purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No
prior inability to exercise this Warrant pursuant to this paragraph
shall have any effect on the applicability of the provisions of
this paragraph with respect to any subsequent determination of
exercisability. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(d) to
the extent necessary to correct this paragraph or any portion of
this paragraph which may be defective or inconsistent with the
intended beneficial ownership limitation contained in this Section
1(d) or to make changes or supplements necessary or desirable to properly give effect to
such limitation. The limitation contained in this paragraph may not
be waived and shall apply to a successor holder of this
Warrant.
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(e) Insufficient Authorized Shares.
If at any time while this Warrant remains outstanding the Company
does not have a sufficient number of authorized and unreserved
shares of Common Stock to satisfy its obligation to reserve for
issuance upon exercise of this Warrant at least a number of shares
of Common Stock equal to the number of shares of Common Stock as
shall from time to time be necessary to effect the exercise of all
of this Warrant then outstanding (the “Required Reserve Amount” and the
failure to have such sufficient number of authorized and unreserved
shares of Common Stock, an “Authorized Share Failure”), then
the Company shall immediately take all action necessary to increase
the Company's authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve
Amount for this Warrant then outstanding. Without limiting the
generality of the foregoing sentence, as soon as practicable after
the date of the occurrence of an Authorized Share Failure, but in
no event later than sixty (60) days after the occurrence of such
Authorized Share Failure, the Company shall hold a meeting of its
stockholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement
and shall use its best efforts to solicit its stockholders'
approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders
that they approve such proposal. Notwithstanding the foregoing, if
any such time of an Authorized Share Failure, the Company is able
to obtain the written consent of a majority of the shares of its
issued and outstanding Common Stock to approve the increase in the
number of authorized shares of Common Stock, the Company may
satisfy this obligation by obtaining such consent and submitting
for filing with the SEC an Information Statement on Schedule 14C.
In the event that upon any exercise of this Warrant, the Company
does not have sufficient authorized shares to deliver in
satisfaction of such exercise, then unless the Holder elects to
void such attempted exercise, the Holder may require the Company to
pay to the Holder within three (3) Trading Days of the applicable
exercise, cash in an amount equal to the product of the product of
(A) the sum of the number of shares of Common Stock not issued to
the Holder on or prior to the Share Delivery Date and to which the
Holder is entitled, and (B) any trading price of the Common Stock
selected by the Holder in writing as in effect at any time during
the period beginning on the date of the applicable exercise and
ending on the date that the Company makes the applicable cash
payment.
2. ADJUSTMENT UPON SUBDIVISION OR
COMBINATION OF SHARES OF COMMON STOCK. If the Company, at
any time while this Warrant is outstanding, (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes
of its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of
Warrant Shares will be proportionately increased such that the
aggregate Exercise Price of this Warrant that was pre-funded to the
Company shall remain unchanged. If the Company, at any time while
this Warrant is outstanding, combines (by combination, reverse
stock split or otherwise) one or more classes of its outstanding
shares of Common Stock into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination will
be proportionately increased and the number of Warrant Shares will
be proportionately decreased such that the aggregate Exercise Price
of this Warrant that was pre-funded to the Company shall remain
unchanged. Any adjustment under this Section 2(a) shall become
effective at the close of business on the date the subdivision or
combination becomes effective.
3. RIGHTS UPON DISTRIBUTION OF
ASSETS. If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to any or all holders of shares of Common Stock, by way of return
of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property, options,
evidence of indebtedness or any other assets by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of
arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder
shall be entitled to participate in such Distribution to the same
extent that the Holder would have participated therein if the
Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any
limitations or restrictions on exercise of this Warrant, including
without limitation, the Maximum Percentage) immediately before the
date of which a record is taken for such Distribution, or, if no
such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, that to the extent
that the Holder's right to participate in any such Distribution
would result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder shall not be
entitled to participate in such Distribution to such extent (and
shall not be entitled to beneficial ownership of such shares of
Common Stock as a result of such Distribution (and beneficial
ownership) to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such
time or times as its right thereto would not result in the Holder
and the other Attribution Parties exceeding the Maximum Percentage,
at which time or times the Holder shall be granted such
Distribution (and any Distributions declared or made on such
initial Distribution or on any subsequent Distribution held
similarly in abeyance) to the same extent as if there had been no
such limitation).
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4. FUNDAMENTAL TRANSACTIONS. The
Company shall not enter into or be party to a Fundamental
Transaction unless the Successor Entity assumes in writing all of
the obligations of the Company under this Warrant in accordance
with the provisions of this Section 4, including agreements to
deliver to the Holder in exchange for this Warrant a security of
the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Warrant,
including, without limitation, which is exercisable for a
corresponding number of shares of capital stock equivalent to the
shares of Common Stock acquirable and receivable upon exercise of
this Warrant (without regard to any limitations on the exercise of
this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the Exercise Price hereunder to such
shares of capital stock (but taking into account the relative value
of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
adjustments to the number of shares of capital stock and such
exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such
Fundamental Transaction). Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be
substituted for the Company (so that from and after the date of the
applicable Fundamental Transaction, the provisions of this Warrant
referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company
under this Warrant with the same effect as if such Successor Entity
had been named as the Company herein. Upon consummation of each
Fundamental Transaction, the Successor Entity shall deliver to the
Holder confirmation that there shall be issued upon exercise of
this Warrant at any time after the consummation of the applicable
Fundamental Transaction, in lieu of the shares of Common Stock (or
other securities, cash, assets or other property (except such items
still issuable under Section 3 above, which shall continue to be
receivable thereafter)) issuable upon the exercise of this Warrant
prior to the applicable Fundamental Transaction, such shares of
common stock (or its equivalent) of the Successor Entity (including
its Parent Entity) which the Holder would have been entitled to
receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to
the applicable Fundamental Transaction (without regard to any
limitations on the exercise of this Warrant), as adjusted in
accordance with the provisions of this Warrant. Notwithstanding the
foregoing, and without limiting Section 1(d) hereof, the Holder may
elect, at its sole option, by delivery of written notice to the
Company to waive this Section 4 to permit the Fundamental
Transaction without the assumption of this Warrant. In addition to
and not in substitution for any other rights hereunder, prior to
the consummation of each Fundamental Transaction pursuant to which
holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for
shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon an exercise of this
Warrant at any time after the consummation of the applicable
Fundamental Transaction but prior to the Expiration Date, in lieu
of the shares of the Common Stock (or other securities, cash,
assets or other property (except such items still issuable under
Section 3 above, which shall continue to be receivable thereafter))
issuable upon the exercise of the Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any
other property whatsoever (including warrants or other purchase or
subscription rights) (collectively, the “Corporate Event Consideration”)
which the Holder would have been entitled to receive upon the
happening of the applicable Fundamental Transaction had this
Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the
exercise of this Warrant). The provision made pursuant to the
preceding sentence shall be in a form and substance reasonably
satisfactory to the Holder. The provisions of this Section 4 shall
apply similarly and equally to successive Fundamental Transactions
and Corporate Events.
5. NONCIRCUMVENTION. The Company
hereby covenants and agrees that the Company will not, by amendment
of its Certificate of Incorporation or Bylaws, or through any
reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, and will at all
times in good faith carry out all of the provisions of this Warrant
and take all action as may be required to protect the rights of the
Holder. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the
Exercise Price of this Warrant, (ii) shall take all such
actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the exercise of this Warrant, and (iii)
shall, so long as any of the Warrants are outstanding, take all
action necessary to reserve and keep available out of its
authorized and unissued shares of Common Stock, solely for the
purpose of effecting the exercise of the Warrants, the number of
shares of Common Stock as shall from time to time be necessary to
effect the exercise of the Warrants then outstanding (without
regard to any limitations on exercise).
6. WARRANT HOLDER NOT DEEMED A
STOCKHOLDER. Except as otherwise specifically provided
herein, the Holder, solely in such Person's capacity as a holder of
this Warrant, shall not be entitled to vote or receive dividends or
be deemed the holder of capital stock of the Company for any
purpose, nor shall anything contained in this Warrant be construed
to confer upon the Holder, solely in such Person's capacity as the
Holder of this Warrant, any of the rights of a stockholder of the
Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which such Person is then entitled to
receive upon the due exercise of this Warrant. In addition, nothing
contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 6, the
Company shall provide the Holder with copies of the same notices
and other information given to the stockholders of the Company
generally, contemporaneously with the giving thereof to the
stockholders.
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7. REISSUANCE OF
WARRANTS.
(a) Transfer of Warrant. If this
Warrant is to be transferred, the Holder shall surrender this
Warrant to the Company or its transfer agent, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new
Warrant (in accordance with Section 7(d)), registered as the Holder
may request, representing the right to purchase the number of
Warrant Shares being transferred by the Holder and, if less than
the total number of Warrant Shares then underlying this Warrant is
being transferred, a new Warrant (in accordance with Section 7(d))
to the Holder representing the right to purchase the number of
Warrant Shares not being transferred.
(b) Lost, Stolen or Mutilated
Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to
the Company in customary form and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall
execute and deliver to the Holder a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the Warrant Shares
then underlying this Warrant.
(c) Exchangeable for Multiple
Warrants. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company or its
transfer agent, for a new Warrant or Warrants (in accordance with
Section 7(d)) representing in the aggregate the right to purchase
the number of Warrant Shares then underlying this Warrant, and each
such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time
of such surrender; provided, however, that no Warrants for
fractional Warrant Shares shall be given.
(d) Issuance of New Warrants.
Whenever the Company is required to issue a new Warrant pursuant to
the terms of this Warrant, such new Warrant (i) shall be of like
tenor with this Warrant, (ii) shall represent, as indicated on the
face of such new Warrant, the right to purchase the Warrant Shares
then underlying this Warrant (or in the case of a new Warrant being
issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares
designated by the Holder which, when added to the number of shares
of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of
Warrant Shares then underlying this Warrant), (iii) shall have an
issuance date, as indicated on the face of such new Warrant which
is the same as the Issuance Date, and (iv) shall have the same
rights and conditions as this Warrant.
8. NOTICES. Whenever notice is
required to be given under this Warrant, the Company shall provide
the Holder with prompt written notice of all actions taken pursuant
to this Warrant, including in reasonable detail a description of
such action and the reason therefor. Without limiting the
generality of the foregoing, the Company will give written notice
to the Holder (i) immediately upon any adjustment of the Exercise
Price, setting forth in reasonable detail, and certifying, the
calculation of such adjustment and (ii) at least fifteen (15) days
prior to the date on which the Company closes its books or takes a
record (A) with respect to any dividend or distribution upon the
shares of Common Stock, (B) with respect to any grants, issuances
or sales of any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property to holders
of shares of Common Stock or (C) for determining rights to vote
with respect to any Fundamental Transaction, dissolution or
liquidation; provided in each case that such
information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder. It is
expressly understood and agreed that the time of exercise specified
by the Holder in each Exercise Notice shall be definitive and may
not be disputed or challenged by the Company.
6
9. AMENDMENT AND WAIVER. Any
provision of this Warrant may be changed or amended with the prior
written consent of the Holder and the Company, and any provision of
this Warrant may be waived with the prior written consent of the
Holder. The Company hereby covenants and agrees that if, and
whenever on or after the date hereof, the Company amends or
modifies any term of any of the Warrants held by any Person (each
document amending such terms, an “Amendment 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 Warrant 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 such amended or modified terms and/or
conditions (as the case may be) set forth in such Amendment
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 Warrant 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 the foregoing sentence shall apply
similarly and equally to each Amendment Document.
10. GOVERNING LAW; JURISDICTION; JURY
TRIAL. This Warrant shall be governed by and construed and
enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this
Warrant shall be governed by, the internal laws of the State of New
York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. The Company 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, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or
that the venue of such suit, action or proceeding is improper. The
Company 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 to such party at the address
set forth in Registration Statement
on Form S-1 (SEC Registration No. 333-251311), 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 manner permitted by law. Nothing contained herein shall be
deemed or operate to preclude the Holder from bringing suit or
taking other legal action against the Company in any other
jurisdiction to collect on the Company's obligations to the Holder,
to realize on any collateral or any other security for such
obligations, or to enforce a judgment or other court ruling in
favor of the Holder. THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
7
11. CONSTRUCTION; HEADINGS. This
Warrant shall be deemed to be jointly drafted by the Company and
the underwriters in connection with the offering thereof and shall
not be construed against any Person as the drafter hereof. The
headings of this Warrant are for convenience of reference and shall
not form part of, or affect the interpretation of, this
Warrant.
12. DISPUTE RESOLUTION. In the case
of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall
submit the disputed determinations or arithmetic calculations via
facsimile or electronic mail within one (1) Business Day of receipt
of the Exercise Notice giving rise to such dispute, as the case may
be, to the Holder. If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise Price
or the Warrant Shares within one (1) Business Day of such disputed
determination or arithmetic calculation being submitted to the
Holder, then the Company shall, within one (1) Business Day submit
via facsimile or electronic mail (a) the disputed determination of
the Exercise Price to an independent, reputable investment bank
selected by the Holder and approved by the Company, such approval
not to be unreasonably withheld, conditioned or delayed or (b) the
disputed arithmetic calculation of the Warrant Shares to an
independent, outside accountant, selected by the Holder and
approved by the Company, such approval not to be unreasonably
withheld, conditioned or delayed. The Company shall cause at its
expense the investment bank or the accountant, as the case may be,
to perform the determinations or calculations and notify the
Company and the Holder of the results no later than five (5)
Business Days from the time it receives the disputed determinations
or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.
13. REMEDIES, OTHER OBLIGATIONS, BREACHES
AND INJUNCTIVE RELIEF. The remedies provided in this Warrant
shall be cumulative and in addition to all other remedies available
under this Warrant at law or in equity (including a decree of
specific performance and/or other injunctive relief), and nothing
herein shall limit the right of the Holder to pursue actual damages
for any failure by the Company to comply with the terms of this
Warrant. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder and
that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or
threatened breach, the holder of this Warrant shall be entitled, in
addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic
loss and without any bond or other security being
required.
14. TRANSFER. This Warrant and the
Warrant Shares may be offered for sale, sold, transferred, pledged
or assigned without the consent of the Company.
15. SEVERABILITY. If any provision
of this Warrant is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the
provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest
extent that it would be valid and enforceable, and the invalidity
or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Warrant so long as this Warrant
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).
8
16. DISCLOSURE. Upon receipt or
delivery by the Company of any notice in accordance with the terms
of this Warrant, unless the Company has in good faith determined
that the matters relating to such notice do not constitute
material, nonpublic information relating to the Company or its
subsidiaries, the Company shall within one (1) Business Day after
any such receipt or delivery publicly disclose such material,
nonpublic information on a Current Report on Form 8-K or otherwise.
In the event that the Company believes that a notice contains
material, nonpublic information relating to the Company or its
subsidiaries, the Company so shall indicate to such Holder
contemporaneously with delivery of such notice, and in the absence
of any such indication, the Holder shall be allowed to presume that
all matters relating to such notice do not constitute material,
nonpublic information relating to the Company or its
subsidiaries.
17. CERTAIN DEFINITIONS. For
purposes of this Warrant, the following terms shall have the
following meanings:
(p) ”1933 Act” means the Securities Act
of 1933, as amended.
(q) ”Affiliate” means, with respect to
any Person, any other Person that directly or indirectly controls,
is controlled by, or is under common control with, such Person, it
being understood for purposes of this definition that
“control” of a Person means the power directly or
indirectly either to vote 10% or more of the stock having ordinary
voting power for the election of directors of such Person or direct
or cause the direction of the management and policies of such
Person whether by contract or otherwise.
(r) ”Attribution Parties” means,
collectively, the following Persons and entities: (i) any
investment vehicle, including, any funds, feeder funds or managed
accounts, currently, or from time to time after the Issuance Date,
directly or indirectly managed or advised by the Holder's
investment manager or any of its Affiliates or principals, (ii) any
direct or indirect Affiliates of the Holder or any of the
foregoing, (iii) any Person acting or who could be deemed to be
acting as a Group together with the Holder or any of the foregoing
and (iv) any other Persons whose beneficial ownership of the
Company's Common Stock would or could be aggregated with the
Holder's and the other Attribution Parties for purposes of Section
13(d) of the 1934 Act. For clarity, the purpose of the foregoing is
to subject collectively the Holder and all other Attribution
Parties to the Maximum Percentage.
(s) ”Bid Price” 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 an
Eligible Market, the bid price of the Common Stock for the time in
question (or the nearest preceding date) on the Eligible 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 OTCQB or OTCQX
and if prices for the Common Stock are then reported in the on the
Pink Open Market (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported, or (c) 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 the Purchasers
of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.
9
(t) ”Bloomberg” means Bloomberg
Financial Markets.
(u) ”Business Day” means any day other
than Saturday, Sunday or other day on which commercial banks in The
City of New York are authorized or required by law to remain
closed.
(v) ”Closing Bid Price” and
“Closing Sale
Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively,
for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price
or the closing trade price, as the case may be, then the last bid
price or the last trade price, respectively, of such security prior
to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if
the Principal Market is not the principal securities exchange or
trading market for such security, the last closing bid price or
last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed
or traded as reported by Bloomberg, or if the foregoing do not
apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on
the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the
average of the bid prices, or the ask prices, respectively, of any
market makers for such security as reported on the Pink Open Market
(formerly Pink OTC Markets Inc.). If the Closing Bid Price or the
Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such
security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the
Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section
12. All such determinations to be appropriately adjusted for any
stock dividend, stock split, stock combination, reclassification or
other similar transaction during the applicable calculation
period.
(w) ”Common Stock” means (i) the
Company's shares of Common Stock, par value $0.001 per share, and
(ii) any capital stock into which such Common Stock shall have
been changed or any capital stock resulting from a reclassification
of such Common Stock.
(x) ”Convertible Securities” means any
stock or securities (other than Options) directly or indirectly
convertible into or exercisable or exchangeable for shares of
Common Stock.
(y) ”Eligible Market” means the
Principal Market, the NYSE American, the Nasdaq Global Market, the
Nasdaq Global Select Market, the Nasdaq Capital Market, the OTC QX
or The New York Stock Exchange, Inc.
10
(z) ”Expiration Date” means the date
set forth on the first page hereof or, if such date falls on a day
other than a Business Day or on which trading does not take place
on the Principal Market (a “Holiday”), the next day that is
not a Holiday.
(aa) ”Fundamental Transaction” means (A)
that the Company shall, directly or indirectly, including through
subsidiaries, Affiliates or otherwise, in one or more related
transactions, (i) consolidate or merge with or into (whether or not
the Company is the surviving corporation) another Subject Entity,
or (ii) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company or
any of its “significant subsidiaries” (as defined in
Rule 1-02 of Regulation S-X) to one or more Subject Entities, or
(iii) make, or allow one or more Subject Entities to make, or allow
the Company to be subject to or have its Common Stock be subject to
or party to one or more Subject Entities making, a purchase, tender
or exchange offer that is accepted by the holders of at least
either (x) 50% of the outstanding shares of Common Stock, (y) 50%
of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all Subject Entities making or party
to, or Affiliated with any Subject Entities making or party to,
such purchase, tender or exchange offer were not outstanding; or
(z) such number of shares of Common Stock such that all Subject
Entities making or party to, or Affiliated with any Subject Entity
making or party to, such purchase, tender or exchange offer, become
collectively the beneficial owners (as defined in Rule 13d-3 under
the 1934 Act) of at least 50% of the outstanding shares of Common
Stock, or (iv) consummate a stock purchase agreement or other
business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with one or more Subject Entities whereby such Subject
Entities, individually or in the aggregate, acquire, either (x) at
least 50% of the outstanding shares of Common Stock, (y) at least
50% of the outstanding shares of Common Stock calculated as if any
shares of Common Stock held by all the Subject Entities making or
party to, or Affiliated with any Subject Entity making or party to,
such stock purchase agreement or other business combination were
not outstanding; or (z) such number of shares of Common Stock such
that the Subject Entities become collectively the beneficial owners
(as defined in Rule 13d-3 under the 1934 Act) of at least 50% of
the outstanding shares of Common Stock, or (v) reorganize,
recapitalize or reclassify its Common Stock, (B) that the Company
shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, allow
any Subject Entity individually or the Subject Entities in the
aggregate to be or become the “beneficial owner” (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly,
whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of
Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement,
reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the
aggregate ordinary voting power represented by issued and
outstanding Common Stock, (y) at least 50% of the aggregate
ordinary voting power represented by issued and outstanding Common
Stock not held by all such Subject Entities, as if any shares of
Common Stock held by all such Subject Entities were not
outstanding, or (z) a percentage of the aggregate ordinary voting
power represented by issued and outstanding shares of Common Stock
or other equity securities of the Company sufficient to allow such
Subject Entities to effect a statutory short form merger or other
transaction requiring other stockholders of the Company to
surrender their shares of Common Stock without approval of the
stockholders of the Company or (C) directly or indirectly,
including through subsidiaries, Affiliates or otherwise, in one or
more related transactions, the issuance of or the entering into any
other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in
which case this definition shall be construed and implemented in a
manner otherwise than in strict conformity with the terms of this
definition to the extent necessary to correct this definition or
any portion of this definition which may be defective or
inconsistent with the intended treatment of such instrument or
transaction.
11
(bb) ”Group” means a “group”
as that term is used in Section 13(d) of the 1934 Act and as
defined in Rule 13d-5 thereunder.
(cc) ”Options” means any rights,
warrants or options to subscribe for or purchase shares of Common
Stock or Convertible Securities.
(dd) ”Parent Entity” of a Person means
an entity that, directly or indirectly, controls the applicable
Person, including such entity whose common capital or equivalent
equity security is quoted or listed on an Eligible Market (or, if
so elected by the Holder, any other market, exchange or quotation
system), or, if there is more than one such Person or such entity,
the Person or such entity designated by the Holder or in the
absence of such designation, such Person or entity with the largest
public market capitalization as of the date of consummation of the
Fundamental Transaction.
(ee) ”Person” means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency
thereof.
(ff) ”Principal Market” means the OTC QB
or, if the Common Stock is then listed or quoted on any of the NYSE
American, the Nasdaq Global Market, the Nasdaq Global Select
Market, the Nasdaq Capital Market, the OTC QX or The New York Stock
Exchange, Inc., such market on which the Common Stock is then
listed or quoted.
(gg) ”Standard Settlement Period” means
the standard settlement period, expressed in a number of Trading
Days, on the Company's primary trading market with respect to the
Common Stock as in effect on the date of delivery of the applicable
Exercise Notice.
(hh) ”Subject Entity” means any Person,
Persons or Group or any Affiliate or associate of any such Person,
Persons or Group.
(ii) ”Successor Entity” means one or
more Person or Persons (or, if so elected by the Required Holders,
the Company or Parent Entity) formed by, resulting from or
surviving any Fundamental Transaction, or one or more Person or
Persons (or, if so elected by the Required Holders, the Company or
the Parent Entity) with which such Fundamental Transaction shall
have been entered into.
(jj) ”Trading Day” means any day on
which the Common Stock is traded on the Principal Market, or, if
the Principal Market is not the principal trading market for the
Common Stock on such day, then on the principal securities exchange
or securities market on which the Common Stock is then
traded.
(kk) ”Weighted Average Price” means, for
any security as of any date, the dollar volume-weighted average
price for such security on the Principal Market during the period
beginning at 9:30:00 a.m., New York time (or such other time as the
Principal Market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York time (or such other
time as the Principal Market publicly announces is the official
close of trading), as reported by Bloomberg through its
“Volume at Price” function or, if the foregoing does
not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin
board for such security during the period beginning at 9:30:00
a.m., New York time (or such other time as such market publicly
announces is the official open of trading), and ending at 4:00:00
p.m., New York time (or such other time as such market publicly
announces is the official close of trading), as reported by
Bloomberg, or, if no dollar volume-weighted average price is
reported for such security by Bloomberg for such hours, the average
of the highest Closing Bid Price and the lowest closing ask price
of any of the market makers for such security as reported on the
Pink Open Market (formerly Pink OTC Markets Inc.). If the Weighted
Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of
such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company
and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved pursuant to
Section 12 with the term “Weighted Average Price” being
substituted for the term “Exercise Price.” All such
determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or other
similar transaction during the applicable calculation
period.
[Signature Page Follows]
12
IN WITNESS WHEREOF, the Company has
caused this Pre-Funded Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above.
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By:
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Xxxxxxx
Xxxxxxxxx
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Chief
Financial Officer
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[Signature
Page—Form of Pre-Funded Warrant]
13
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE HOLDER TO EXERCISE THIS
PRE-FUNDED WARRANT TO PURCHASE COMMON STOCK
The
undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock
(“Warrant
Shares”) of GT Biopharma, Inc., a Delaware corporation
(the “Company”),
evidenced by the attached Pre-Funded Warrant to Purchase Common
Stock (the “Warrant”).
The
Company shall deliver to the holder __________ Warrant Shares in
accordance with the terms of the Warrant.
Date:
_______________ __, ______
Name
of Holder
By:
Name:
Title:
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs
Computershare Trust Company, N.A. to issue the above indicated
number of shares of Common Stock.
By:
Name:
Title:
