Exhibit
2.1
EXECUTION
COPY
AGREEMENT
AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER
(“Agreement”), is entered into effective as of the 1st
day of September, 2017, by and among GT Biopharma, Inc., a Delaware
corporation (“GT Biopharma”), GT Biopharma Merger, Co.,
a Delaware corporation and a wholly-owned subsidiary of GT
Biopharma (the “GT Biopharma Subsidiary”) and
Georgetown Translational Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and Kathleen
Clarence-Smith, Mark J. Silverman, and Richard P. Dulik who are the
holders of all of the issued and outstanding capital stock of the
Company (the “Shareholders”).
WHEREAS, GT Biopharma, through the GT
Biopharma Subsidiary, desires to acquire all of the shares of
capital stock of the Company (the “Company Shares”)
owned by the Shareholders on the terms and conditions set forth in
this Agreement;
WHEREAS, the parties intend to
effectuate the aforementioned acquisition of Company Shares by
merging the GT Biopharma Subsidiary with and into the Company (the
“Merger”) pursuant to the terms and conditions set
forth in this Agreement with the Company being the surviving
corporation (the “Surviving Corporation”) in the
Merger; and
WHEREAS, the Company and the
Shareholders deem it advisable and in their best interests to
effect the Merger contemplated by this Agreement.
In
consideration of the mutual covenants contained herein, GT
Biopharma, GT Biopharma Subsidiary, the Company and the
Shareholders hereby agree as follows:
ARTICLE
1 TERMS OF THE MERGER
1.1 Merger.
At the Effective Time (as hereinafter defined), upon the terms
and subject to the
conditions of this Agreement, the GT Biopharma Subsidiary shall
merge with and into the Company in accordance with the Delaware
General Corporation Law (the “Delaware Law”). At the
Effective Time, the separate existence of the GT Biopharma
Subsidiary shall cease and the Company shall be the surviving
corporation in the Merger. The parties shall execute a Certificate
of Merger, substantially in the form attached hereto as Exhibit A
(“Certificate of Merger”) and such other documents
necessary to comply in all respects with the requirements of the
Delaware Law and with the provisions of this
Agreement.
1.2 Effective
Time. Subject to the terms and conditions of this Agreement,
the Merger shall become effective at the time of the filing of the
Certificate of Merger with the Delaware Secretary of State in
accordance with the applicable provisions of the Delaware Law or at
such later time as may be specified in the Certificate of Merger.
The time when the Merger shall become effective is herein referred
to as the “Effective Time,” and the date on which the
Effective Time occurs is herein referred to as the “Closing
Date.” The closing of the Merger (the “Closing”)
and the filing of the Certificate of Merger shall occur as soon as
practicable after:
1.2.1 Execution
of this Agreement;
1.2.2 Satisfaction
of all conditions to closing set forth in Article 4,
“Conditions Precedent to Obligations of GT Biopharma and GT
Biopharma Subsidiary,” and Article 5, “Conditions
Precedent to the Obligations of the Company and the
Shareholders”; and
1.2.3 Receipt
by GT Biopharma of any required approvals under the Delaware Law
and any other applicable corporate law and any other required
regulatory approvals.
1.3 Closing. The
Closing Date shall be the date of this Agreement. Any extension of
the Closing Date may be made only with the written consent of GT
Biopharma, the Company and the Shareholders.
1.4 Merger
Consideration; Conversion of Shares. The total consideration
to be paid to the Shareholders in connection with the Merger (the
“Total Merger Consideration”) shall be the issuance of
33% of the issued and outstanding shares of common stock of GT
Biopharma, on a fully diluted basis after giving effect to the
consummation of the Merger, the Financing and the exchange or
conversion of GT Biopharma Convertible Securities into GT Biopharma
shares of common stock (the “GT Biopharma Shares”), to
the Shareholders on the Closing Date.
1.5 Exchange of
Convertible Securities. Prior to the Closing, each
outstanding note, debenture or other security convertible into or
exercisable for GT Biopharma shares of common stock (the “GT
Biopharma Convertible Securities”) shall be exchanged for or
converted into GT Biopharma shares of common stock.
1.6 Shareholder’s
Rights upon Merger. Upon consummation of the Merger, the
Shareholders shall cease to have any rights with respect to the
certificates which theretofore represented shares of Company Shares
(the “Certificates”), and, subject to applicable law
and this Agreement, shall only have the right to receive their pro
rata share of the Total Merger Consideration, based on the
Shareholders’ relative ownership of the Company
Shares.
1.7 Surrender and
Exchange of Shares; Payment of Merger Consideration. In
connection with the Closing, upon receipt of notice from the
Company and GT Biopharma of the Effective Time, the Shareholders
shall surrender and deliver the Certificates to GT Biopharma duly
endorsed in blank. As soon as reasonably practicable following the
later to occur of the Effective Time or such surrender and
delivery, GT Biopharma will deliver to the Shareholders
certificates representing their GT Biopharma Shares. Until so
surrendered and exchanged, each outstanding Certificate after the
Effective Time shall be deemed for all purposes to evidence only
the right to receive the Total Merger Consideration set forth
herein.
1.8 Certificate of
Incorporation. At and after the Effective Time, the
Certificate of Incorporation of the Company shall be the
Certificate of Incorporation of the Surviving
Corporation.
1.9 Bylaws. At
and after the Effective Time, the Bylaws of the Company shall be
the Bylaws of the Surviving Corporation (subject to any amendment
specified in the Plan of Merger and any subsequent
amendment).
1.10 Name.
At and after the Effective Time, the name of GT Biopharma shall be
GT Biopharma, Inc.
1.11 Board
of Directors; Appointment of Kathleen Clarence-Smith.
Effective as of and after the Effective Time, the board of
directors of GT Biopharma shall consist of Anthony Cataldo, Steven
Weldon, and Kathleen Clarence-Smith.
1.12 Other
Effects of Merger. The Merger shall have all further effects
as specified in the applicable provisions of the Delaware
Law.
1.13 Split
of GT Biopharma Shares. Prior to the Closing Date, GT
Biopharma will reverse split its issued and outstanding shares on a
one for three hundred basis (the “GT Biopharma Stock
Split”) so that GT Biopharma shares issued and outstanding
immediately prior to the Effective Time shall equal 33,857,206
calculated on a Fully Diluted Basis. For the purposes of this
Agreement, the term “Fully Diluted Basis” shall include
all issued and outstanding shares of capital stock of GT Biopharma
and all shares of capital stock issuable upon conversion of all GT
Biopharma Convertible Securities.
1.14 Additional
Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm of
record or otherwise in the Surviving Corporation its right, title
or interest in, to or under any of the rights, properties or assets
of the Company or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of
Company, all such deeds, bills of sale, assignments and assurances
and to take and do, in the name and on behalf of the Company, all
such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in,
to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out this Agreement and the
transactions contemplated hereby.
1.15 Tax-Free
Reorganization. The parties intend that the Merger qualify
as a tax- free reorganization pursuant to Section 368(a)(1)(A) of
the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the “Code”).
1.16 Financial
Statements and Income Tax Returns. The parties contemplate
that the Surviving Corporation, as a subsidiary of GT
Biopharma’s consolidated group, will include its financial
results in GT Biopharma’s consolidated financial statements
covering the periods after joining GT Biopharma’s
consolidated group.
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS
Except
as disclosed on the schedules to be delivered by the Company and
the Shareholders to GT Biopharma and the GT Biopharma Subsidiary on
the Closing Date, attached hereto as Exhibit B (the “Company
Disclosure Schedule”), which Company Disclosure Schedule is
incorporated into and should be considered an integral part of this
Agreement, the Company represents and warrants to GT Biopharma and
the GT Biopharma Subsidiary as follows as to all Sections in this
Article 2, except for Sections 2.1 (Validity of Agreement), 2.3
(Title), 2.4 (Exclusive Dealing), 2.15 (Intellectual Property),
2.16 (No Default), 2.17 (Litigation), 2.18 (Finders), 2.25
(Insurance Coverage), 2.29 (Indebtedness) and 2.31 (Investment
Intent), which Sections are representations and warranties of the
Shareholders and/or the Company, as the case may be. Any
representation and warranty made by any Shareholder in this Article
2 shall be made solely with respect to such Shareholder and not
with respect to the Company or any other Shareholder.
2.1 Validity of
Agreement. This Agreement is valid and binding upon each
Shareholder and the Company and neither the execution nor delivery
of this Agreement by such parties nor the performance by such
parties of any of their covenants or obligations hereunder will
constitute a material default under any contract, agreement or
obligation to which any of them is a party or by which they or any
of their respective properties are bound. This Agreement is
enforceable severally against the Company and each Shareholder in
accordance with its terms, subject to bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium, receivership or
other similar laws relating to or affecting creditors’ rights
generally.
2.2 Organization and
Good Standing. The Company is a corporation duly organized
and existing in good standing under the laws of the State of
Delaware. The Company has full corporate power and authority to
carry on its business as now conducted and to own or lease and
operate the properties and assets now owned or leased and operated
by it. The Company is duly qualified to transact business in the
District of Columbia and in all states and jurisdictions in which
the business or ownership of its property makes it necessary so to
qualify, except for jurisdictions in which the nature of the
property owned or business conducted, when considered in relation
to the absence of serious penalties, renders qualification as a
foreign corporation unnecessary as a practical matter.
2.3 Title. Each
Shareholder has full right and title to the Company Shares that
such Shareholder owns and to be exchanged, free and clear of all
liens, encumbrances, pledge, restrictions and claims of every kind
(“Encumbrances”) and such Company Shares constitute all
the Company Shares which such Shareholder, directly or indirectly,
own or have any right to acquire. Each Shareholder has the legal
right, power and authority to enter into this Agreement and will
have the right to sell, assign, transfer and convey the Company
Shares owned by such Shareholder pursuant to this Agreement and
deliver to GT Biopharma valid title to such Company Shares pursuant
to the provisions of this Agreement, free and clear of all
Encumbrances. There are no outstanding options, warrants, rights,
calls, commitments,
conversion rights,
rights of exchange, plans or other agreements of any character
providing for the purchase or sale of any Company Shares owned by
such Shareholder.
2.4 Exclusive
Dealing. No Shareholder is engaged in any discussions or
negotiations for the purchase or sale of any Company Shares owned
by such Shareholder, except for those discussions with GT Biopharma
which are embodied in this Agreement.
2.5 Capitalization.
The authorized capital stock of the Company consists of 5,000
shares of common stock, of which 1,015 shares are issued and
outstanding. The Company Shares constitute the only outstanding
shares of the capital stock of the Company of any nature
whatsoever, voting and non-voting. The Company Shares are validly
issued, fully paid and non- assessable and are subject to no
restrictions on transfer, except those imposed by the applicable
federal and state securities laws. All Company Shares are
certificated, and the Company has not executed and delivered
certificates for Company Shares in excess of the number of Company
Shares set forth in this Section 2.5. Except as set forth in the
Company Disclosure Schedule, there are no outstanding options,
warrants, rights, calls, commitments, conversion rights, plans or
other agreements of any character providing for the purchase,
issuance or sale of, or any securities convertible into, capital
stock of the Company, whether issued, unissued or held in its
treasury. There are no treasury shares.
2.6 Subsidiaries.
The Company does not have any subsidiaries. The Company does not
own five percent (5%) or more of the securities having voting power
of any corporation (or would own such securities in such amount
upon the closing of any existing purchase obligations for
securities).
2.7 Ownership and
Authority. The execution, delivery and performance of this
Agreement by the Company has been duly authorized by its Board of
Directors and all other required corporate approvals have been
obtained. The execution, delivery and performance of this Agreement
by the Company will not result in the violation or breach of any
term or provision of charter instruments applicable to the Company
or constitute a material default under any material indenture,
mortgage, deed of trust or other contract or agreement to which the
Company is a party or by which the Company or any of its properties
is bound and will not cause the creation of an Encumbrance on any
properties owned by or leased to or by the Company.
2.8 Liabilities and
Obligations. The Company has no liabilities or obligations
of any nature (whether accrued, absolute, contingent or otherwise)
secured by an Encumbrance on any of its assets.
2.9 Monthly Expenditure
Statements. The monthly expenditures for the Company for the
years ending December 31, 2015, December 31, 2016 and June 30,
2017, attached to Section 2.9 of the Company Disclosure Schedule
(collectively the “Company Monthly Expenditure
Statements”) fairly present the monthly expenditures of the
Company as of the dates thereof and for the periods indicated.
There has not been any change between June 30, 2017 and the date of
this Agreement which has had a material adverse effect on the
financial position or
results
of operations of the Company. Except as set forth in Section 2.9 of
the Company Disclosure Schedule, the Company has no liabilities or
obligations, contingent or otherwise.
2.10 [Reserved].
2.11 Taxes.
The Company has filed all federal, state, local or foreign tax
returns, tax reports or forms that the Company was required to file
since its inception. No taxes are due to any federal, state, local
or foreign tax authority. The Company is not obligated to make any
payments, and is not a party to any agreement that under any
circumstances could obligate it to make any payments that will not
be deductible under Section 280G of the Code. The Company has
disclosed on its federal income tax returns all positions taken
therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Section 6662 of the Code.
The Company is not a party to any Tax allocation or sharing
agreement. The Company
(i) has not been a
member of an affiliated group filing a consolidated federal income
tax return,
(ii) is
not and has not ever been a partner in a partnership or an owner of
an interest in an entity treated as a partnership for federal
income tax purposes, and (iii) has no liability for the Taxes of
any person (other than the Company) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or
otherwise.
2.12 Title
to Properties and Assets. The Company presently owns or
leases real property from which it conducts its business and owns
or leases certain personal property. The Company has good and
marketable title to all real and personal property reflected on its
books and records as owned by it or otherwise required or used in
the operation of its business, free and clear of all security
interests or Encumbrance of any nature, except as set forth in
Section 2.12 of the Company Disclosure Schedule. Also set forth in
Section 2.12 of the Company Disclosure Schedule is a list of
property leased by the Company. Any security interests or
Encumbrance shall be discharged in full on or before the Closing
Date and evidenced by UCC Releases delivered by the Company on the
Closing Date. Such improved real property or tangible personal
property is in good operating condition and repair, and suitable
for the purpose for which it is being used, subject in each case to
consumption in the ordinary course, ordinary wear and tear and
ordinary repair, maintenance and periodic replacement.
2.13 Accounts
Receivable/Payable. Except as set forth in Section 2.13 of
the Company Disclosure Schedule, since December 31, 2016, the
Company has no accounts receivable, accounts payable, unbilled
invoices and other debts. Except as set forth in
Section
2.13 of
the Company Disclosure Schedule, there have been no material
adverse changes since December 31, 2016, in any accounts receivable
or other debts due the Company or the allowances with respect
thereto or accounts payable of the Company.
2.14 Material
Documents. Set forth in Section 2.14 of the Company
Disclosure Schedule is a complete list of all material documents to
which the Company is a party. All such documents listed in Section
2.14 of the Company Disclosure Schedule are valid and enforceable
and copies of such material documents (or, with the consent of GT
Biopharma, forms thereof) as have been requested by GT Biopharma
have been provided to GT Biopharma. Except as
disclosed in
Section 2.14 of the Company Disclosure Schedule, neither the
Company nor any of the other parties thereto, is or will be, merely
with the passage of time, in default under any such material
document nor is there any requirement for any of such material
documents to be novated or to have the consent of the other
contracting party in order for such material documents to be valid,
effective and enforceable by the Company after the Closing Date as
it was immediately prior thereto.
2.15 Intellectual
Property. Except as set forth in Section 2.15 of the Company
Disclosure Schedule, the Company has no interest in and owns no
domestic and foreign letters patent, patents, patent applications,
patent licenses, software licenses and know-how licenses, trade
names, trademarks, copyrights, unpatented inventions, service mark
registrations and applications and copyright registrations and
applications owned or used by the Company in the operation of its
business (collectively, the “Intellectual Property”).
No Intellectual Property, other than as set forth on Section 2.15
of the Company Disclosure Schedule, is required or used in the
operation of the business of the Company. There are no pending or,
to the knowledge of the Company and the Shareholders, threatened
claims of infringement upon the rights to the Intellectual Property
or any intellectual property rights of others.
2.16 No
Default. Neither the Company nor any Shareholder is in
material default under any provision of any contract, commitment,
or agreement respecting the Company or its assets to which the
Company or such Shareholder is or are parties or by which they are
bound.
2.17 Litigation.
There are no lawsuits, arbitration actions or other proceedings
(equitable, legal, administrative or otherwise) pending or,
threatened, and there are no investigations pending or threatened
against the Company which relate to and could have a material
adverse effect on the properties, business, assets or financial
condition of the Company or which could adversely affect the
validity or enforceability of this Agreement or the obligation or
ability of such Shareholder or the Company to perform their
respective obligations under this Agreement or to carry out the
transactions contemplated by this Agreement or otherwise affecting
the Shares.
2.18 Finders.
Neither the Company nor any Shareholder owes any fees or
commissions, or other compensation or payments to any broker,
finder, financial consultant, or similar person claiming to have
been employed or retained by or on behalf of the Company or such
Shareholder in connection with this Agreement or the transactions
contemplated hereby.
2.19 Employees.
Section 2.19 of the Company Disclosure Schedule sets forth the name
and current monthly salary and any accrued benefit for each
employee of the Company. Except as set forth in Section 2.19 of the
Company Disclosure Schedule, the Company has no written employment
agreements with any of its employees and it does not currently use
the services of nor has it at any time engaged any independent
contractor.
2.20 Absence
of Pension Liability. The Company has no liability of any
nature to any person or entity for pension or retirement
obligations, vested or unvested, to or for the benefit of any of
its existing or former employees. The consummation of the
transactions
contemplated by
this Agreement will not entitle any employee of the Company to
severance pay, unemployment compensation or any other payment,
except as expressly provided in this Agreement, including the
Exhibits, or accelerate the time of payment or increase the amount
of compensation due to any such employee. Except as described in
Section 2.20 of the Company Disclosure Schedule, the Company does
not presently have nor has it ever had any employee benefit plans
and has no announced plan or legally binding commitment to create
any employee benefit plans.
2.21 Compliance
With Laws. The Company has conducted and is continuing to
conduct its business in compliance with, and is in compliance with,
all applicable statutes, orders, rules and regulations promulgated
by governmental authorities relating in any respect to its
operations, conduct of business or use of properties, except where
noncompliance with any such statutes, orders, rules or regulations
would not have an adverse effect on the Company or its results of
operations. Such statutes, orders, rules or regulations include,
but are not limited to, any applicable statute, order, rule or
regulation relating to (i) wages, hours, hiring, nondiscrimination,
retirement, benefits, pensions, working conditions, and worker
safety and health; (ii) air, water, toxic substances, noise, or
solid, gaseous or liquid waste generation, handling, storage,
disposal or transportation; (iii) zoning and building codes; (iv)
the production, storage, processing, advertising, sale,
distribution, transportation, disposal, use and warranty of
products; or (v) trade and antitrust regulations. The execution,
delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated by
this Agreement will not, separately or jointly, violate, contravene
or constitute a default under any applicable statutes, orders,
rules and regulations promulgated by governmental authorities or
cause an Encumbrance on any property used, owned or leased by the
Company to be created thereunder. To the knowledge of the Company,
there are no proposed changes in any applicable statutes, orders,
rules and regulations promulgated by governmental authorities that
would cause any representation or warranty contained in this
Section 2.21 to be untrue or have an adverse effect on its
operations, conduct of business or use of properties.
2.22 Filings.
The Company has made all filings and reports required under all
local, state and federal laws with respect to its business and of
any predecessor entity or partnership, except filings and reports
in those jurisdictions in which the nature of the property owned or
business conducted, when considered in relation to the absence of
serious penalties, renders the required filings or reports
unnecessary as a practical matter.
2.23 Certain
Activities. The Company has not, directly or indirectly,
engaged in or been a party to any of the following
activities:
2.23.1 Bribes,
kickbacks or gratuities to any person or entity, including domestic
or foreign government officials or any other payments to any such
persons or entity, whether legal or not legal, to obtain or retain
business or to receive favorable treatment of any nature with
regard to business (excluding commissions or gratuities paid or
given in full compliance with applicable law and constituting
ordinary and necessary expenses incurred in carrying on its
business in the ordinary course);
2.23.2 Contributions
(including gifts), whether legal or not legal, made to any domestic
or foreign political party, political candidate or holder of
political office;
2.23.3 Holding
of or participation in bank accounts, funds or pools of funds
created or maintained in the United States or any foreign country,
without being reflected on the corporate books of account, or as to
which receipts or disbursements therefrom have not been reflected
on such books, the purpose of which is to obtain or retain business
or to receive favorable treatment with regard to
business;
2.23.4 Receiving
or disbursing monies, the actual nature of which has been
improperly disguised or intentionally misrecorded on or improperly
omitted from the corporate books of account;
2.23.5 Paying
fees to domestic or foreign consultants or commercial agents which
exceed the reasonable value of the ordinary and customary
consulting and agency services purported to have been
rendered;
2.23.6 Paying
or reimbursing (including gifts) personnel of the Company for the
purpose of enabling them to expend time or to make contributions or
payments of the kind or for the purposes referred to in
Subparagraphs 2.23.1 through 2.23.5 above;
2.23.7 Participating
in any manner in any activity which is illegal under the
international boycott provisions of the Export Administration Act,
as amended, or the international boycott provisions of the Internal
Revenue Code, or guidelines or regulations thereunder;
and
2.23.8 Making
or permitting unlawful charges, mischarges or defective or
fraudulent pricing under any contract or subcontract under a
contract with any department, agency or subdivision thereof, of the
United States government, state or municipal government or foreign
government.
2.24 Employment
Relations. The Company is in compliance with all federal,
state or other applicable laws, domestic or foreign, respecting
employment and employment practices, terms and conditions of
employment and wages and hours, and has not and is not engaged in
any unfair labor practice; no unfair labor practice complaint
against the Company is pending before the National Labor Relations
Board; there is no labor strike, dispute, slow down or stoppage
actually pending or threatened against or involving the Company; no
labor representation question exists respecting the employees of
the Company; no grievance which might have an adverse effect upon
the Company or the conduct of its business exists; no arbitration
proceeding arising out of or under any collective bargaining
agreement is currently being negotiated by the Company; and the
Company has not experienced any material labor difficulty during
the last three (3) years.
2.25 Insurance
Coverage. The Company has heretofore delivered copies of the
policies of fire, liability, workers' compensation or other forms
of insurance of the Company.
The
Company has complied with the terms and provisions of such policies
including, without limitation, all riders and amendments thereto.
The Company has met required collateral and premium for coverages
in force. In the reasonable judgment of the Company and each
Shareholder, such insurance is adequate and the Company will keep
all current insurance policies in effect through the
Closing.
2.26 Certificate
of Incorporation and Bylaws. The Company has heretofore
delivered to GT Biopharma true, accurate and complete copies of the
Certificate of Incorporation and Bylaws of the Company, together
with all amendments to each of the same as of the date
hereof.
2.27 Corporate
Minutes. The minute books of the Company provided to GT
Biopharma at the Closing are the correct and only such minute books
and do and will contain, in all material respects, complete and
accurate records of any and all proceedings and actions at all
meetings, including written consents executed in lieu of meetings
of its shareholders, Board of Directors and committees thereof
through the Closing Date. The stock records of the Company
delivered to GT Biopharma at the Closing are the correct and only
such stock records and accurately reflects all issues and transfers
of record of the capital stock of the Company. The Company does not
have any of its records or information recorded, stored, maintained
or held off the premises of the Company.
2.28 Default
on Indebtedness. The Company is not in default under any
evidence of indebtedness for borrowed money.
2.29 Indebtedness.
Neither any Shareholder nor any corporation or entity with which
such Shareholder affiliated are indebted to the Company, and the
Company has no indebtedness or liability to such Shareholder or any
corporation or entity with which such Shareholder is
affiliated.
2.30 Governmental
Approvals. Except for filing of the Certificate of Merger
with the Delaware Secretary of State and as set forth in Section
2.30 of the Company Disclosure Schedule, no consent, approval or
authorization of, or notification to or registration with, any
governmental authority, either federal, state or local, is required
in connection with the execution, delivery and performance of this
Agreement by any Shareholder or the Company.
2.31 Investment
Intent. Each Shareholder is taking the GT Biopharma Shares
for such Shareholder’s own account and for investment, with
no present intention of dividing such Shareholder’s interest
with others or of reselling or otherwise disposing of all or any
portion of the GT Biopharma Shares to be issued to such Shareholder
other than pursuant to available exemptions under applicable
securities laws. Each Shareholder does not intend to sell the GT
Biopharma Shares to be issued to such Shareholder, either currently
or after the passage of a fixed or determinable period of time or
upon the occurrence or non-occurrence of any predetermined event or
circumstance. Each Shareholder has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for, or which is likely to compel, a
disposition of the GT Biopharma Shares to be issued to
such
Shareholder. Each
Shareholder is not aware of any circumstances presently in
existence which are likely in the future to prompt a disposition of
the GT Biopharma Shares to be issued to such Shareholder. Each
Shareholder possesses the experience in business in which GT
Biopharma is involved necessary to make an informed decision to
acquire the GT Biopharma Shares and such Shareholder has the
financial means to bear the economic risk of the investment in the
GT Biopharma Shares as of the Closing Date. Each Shareholder has
had the opportunity to be represented by legal counsel and to
consult with financial advisors to the extent such Shareholder
deemed necessary. Each Shareholder has received and read the
Disclosure Statement of GT Biopharma including its financial
statements, SEC Reports, as defined in Section 3.6,
“Securities Filings; Financial Statements,” and any
additional information such Shareholder has requested. Each
Shareholder has had the opportunity to ask questions of the
directors and officers of GT Biopharma concerning GT
Biopharma.
2.32 Licenses,
Permits and Required Consents. The Company has all required
franchises, tariffs, licenses, ordinances, certifications,
approvals, authorizations and permits
(“Authorizations”) materially necessary to the conduct
of its business as currently conducted or proposed to be conducted.
A list of such Authorizations is set forth in Section 2.32 of the
Company Disclosure Schedule attached hereto, true, correct and
complete copies of which have previously been delivered to GT
Biopharma. All Authorizations relating to the business of the
Company are in full force and effect, no violations have been made
in respect thereof, and no proceeding is pending or threatened
which could have the effect of revoking or limiting any such
Authorizations and the same will not cease to remain in full force
and effect by reason of the transactions contemplated by this
Agreement.
2.33 Completeness
of Representations and Schedules; Delivery Via Upload to
Dataroom. The Company Disclosure Schedule and Exhibits
hereto completely and correctly present in all material respects
the information required by this Agreement. The Company’s
obligation to deliver or make available any agreement or document
to GT Biopharma under this Agreement shall have been satisfied if
such agreement or document has been uploaded in an electronic data
room to which GT Biopharma has access.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF GT BIOPHARMA AND THE GT BIOPHARMA
SUBSIDIARY
Except
as disclosed in the schedules to be delivered by GT Biopharma and
the GT Biopharma Subsidiary on the Closing Date, attached hereto as
Exhibit C (the “GT Biopharma Disclosure Schedule”),
which GT Biopharma Disclosure Schedule is incorporated into and
should be considered an integral part of this Agreement, GT
Biopharma and the GT Biopharma Subsidiary represent and warrant to
the Company and the Shareholders as set forth in this Article
3.
3.1 Organization and
Good Standing.
3.1.1 GT
Biopharma is a corporation duly organized and existing in good
standing under the laws of the State of Delaware. GT Biopharma has
full corporate power and authority to carry on its business as now
conducted. GT Biopharma is duly qualified to transact business in
the State of Delaware and in all states and jurisdictions in which
the business or ownership of the GT Biopharma Subsidiary’s
properties or assets makes it necessary so to qualify (other than
in jurisdictions in which the nature of the property owned or
business conducted, when considered in relation to the absence of
serious penalties, renders qualification as a foreign corporation
unnecessary as a practical matter).
3.1.2 The
GT Biopharma Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware. The GT Biopharma Subsidiary has full corporate power and
authority to carry on its business as now conducted. GT Biopharma
Subsidiary is duly qualified to transact business in the State of
Delaware and in all states and jurisdictions in which the business
or ownership of the GT Biopharma Subsidiary’s properties or
assets makes it necessary so to qualify (other than in
jurisdictions in which the nature of the property owned or business
conducted, when considered in relation to the absence of serious
penalties, renders qualification as a foreign corporation
unnecessary as a practical matter).
3.2 Finders. No
agent, broker, person or firm acting on behalf of GT Biopharma or
the GT Biopharma Subsidiary is, or will be, entitled to any
commission or broker’s or finder’s fees from any of the
parties to this Agreement, or from any person controlling,
controlled by or under common control with any of the parties to
this Agreement, in connection with any of the transactions
contemplated in this Agreement.
3.3 Authority and
Consent. The execution, delivery and performance of this
Agreement by GT Biopharma and the GT Biopharma Subsidiary have been
duly authorized by their respective Board of Directors. This
Agreement is valid and binding upon GT Biopharma and the GT
Biopharma Subsidiary, and is enforceable against GT Biopharma and
the GT Biopharma Subsidiary in accordance with its terms, subject
to bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium, receivership or other similar laws relating to or
affecting creditors’ rights generally. GT Biopharma and the
GT Biopharma Subsidiary have read and understand this Agreement,
have consulted legal and accounting representatives to the extent
deemed necessary and have the capacity to enter into this Agreement
and to carry out the transactions contemplated hereby without the
consent of any third party, except shareholder
approval.
3.4 Validity of
Agreement. Neither the execution nor the delivery of this
Agreement by GT Biopharma and the GT Biopharma Subsidiary, nor the
performance by GT Biopharma and the GT Biopharma Subsidiary of any
of the covenants or obligations to be performed by GT Biopharma and
the GT Biopharma Subsidiary hereunder, will result in any violation
of any order, decree or judgment of any court or other governmental
body, or statute or law applicable to GT Biopharma and the GT
Biopharma Subsidiary, or in any breach of any terms or provisions
of the Certificates of Incorporation or the Bylaws of GT Biopharma
or the GT Biopharma Subsidiary, respectively, or constitute a
default under any indenture, mortgage, deed of trust
or
other
contract to which GT Biopharma and the GT Biopharma Subsidiary is a
party or by which GT Biopharma and the GT Biopharma Subsidiary is
bound.
3.5 Government
Approvals. No consent, approval or authorization of, or
notification to or registration with, any governmental authority,
either federal, state or local, is required in connection with the
execution, delivery and performance of this Agreement by GT
Biopharma and the GT Biopharma Subsidiary other than appropriate
disclosure to the Securities and Exchange Commission and the filing
of a Certificate of Merger with the Delaware Office of the
Secretary of State.
3.6 Securities Filings;
Financial Statements. GT Biopharma is obligated to file
reports pursuant the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) and is current in the filing of
all required reports (the "SEC Reports"). As of their respective
dates, or as of the date of the last amendment thereof, if amended
after filing, none of the SEC Reports (including all schedules
thereto and disclosure documents incorporated by reference
therein), contains any untrue statement of a material fact or
omitted a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading. Each of the SEC Reports as of
the time of filing or as of the date of the last amendment thereof,
if amended after filing, complied in all material respects with the
Exchange Act or the Securities Act of 1933, as amended (the
"Securities Act"), as applicable. The consolidated financial
statements of GT Biopharma included in the SEC Reports fairly
present in conformity in all material respects with GAAP applied on
a consistent basis the consolidated financial position of GT
Biopharma as of the dates thereof and their consolidated results of
operations and changes in financial position for the periods then
ended.
3.7 Capitalization.
3.7.1 The
authorized capital stock of GT Biopharma consists of 750,000,000
shares of Common Stock, $0.001 par value per share. After the
completion of all merger contingencies including the GT Biopharma
Stock Split, conversion of GT Biopharma Convertible Securities, the
Financing and warrant exercise, the issued and outstanding capital
stock of GT Biopharma is 32,343,658 shares of common stock and
1,513,548 shares of Series J Preferred Stock. Shares of Series J
Preferred Stock are convertible into shares of common stock of GT
Biopharma on a share for share basis, resulting in 33,857,206
issued and outstanding shares of capital stock of GT Biopharma on a
Fully Diluted Basis. All issued and outstanding shares of common
stock and preferred stock of GT Biopharma are hereinafter referred
to as “Outstanding GT Biopharma Shares”. The
Outstanding GT Biopharma Shares constitute the only outstanding
shares of capital stock of GT Biopharma of any nature whatsoever.
The Outstanding GT Biopharma Shares are validly issued, fully paid
and non-assessable and are subject to no restrictions on transfer
other than the transfer restrictions of Rule 144. There are no
outstanding options, warrants, rights, calls, commitments,
conversion rights, plans or other agreements of any character
providing for the purchase, issuance or sale of, or any securities
convertible into capital stock of GT Biopharma, whether issued,
unissued or held in its treasury. There are no treasury shares. At
Closing, the GT Biopharma Shares to be issued to the Shareholders
total 16,927,878 shares of common stock, which will represent 33%
of the issued and outstanding shares of
common
stock of GT Biopharma, on a fully diluted basis after giving effect
to the consummation of the Merger.
3.7.2 The
authorized capital stock of the GT Biopharma Subsidiary consists of
1,000 shares of Common Stock, $0.001 par value per share, 100 of
which are issued and outstanding and entirely owned by GT Biopharma
(“Outstanding GT Biopharma Subsidiary Shares”). The
Outstanding GT Biopharma Subsidiary Shares constitute the only
outstanding shares of the capital stock of the GT Biopharma
Subsidiary of any nature whatsoever, voting and non-voting. The
Outstanding GT Biopharma Subsidiary Shares are validly issued,
fully paid and non-assessable and are subject to no restrictions on
transfer. There are no outstanding options, warrants, rights,
calls, commitments, conversion rights, plans or other agreements of
any character providing for the purchase, issuance or sale of, or
any securities convertible into, capital stock of the GT Biopharma
Subsidiary, whether issued, unissued or held in its treasury. There
are no treasury shares.
3.8 Subsidiaries.
Except for Oxis Biotech, Inc., a Delaware corporation, and the GT
Biopharma Subsidiary, neither GT Biopharma nor the GT Biopharma
Subsidiary has any subsidiaries. Neither GT Biopharma nor the GT
Biopharma Subsidiary owns five percent (5%) or more of the
securities having voting power of any corporation other than Oxis
Biotech, Inc., (or would own such securities in such amount upon
the closing of any existing purchase obligations for securities).
All references to GT Biopharma in this Agreement shall include an
inherent reference to Oxis Biotech, Inc. even though it is not
explicitly stated.
3.9 [Reserved].
3.10 Transferability
of GT Biopharma Shares. The GT Biopharma Shares are
qualified for trading on the OTCQB tier of the OTC Market under the
symbol OXIS. The GT Biopharma Shares are restricted securities as
defined in Rule 144 as promulgated under the Securities Act and may
be traded pursuant to the restrictions of Rule 144, provided GT
Biopharma timely files reports with the SEC as required by the
Exchange Act and posts certain files on it corporate
website.
3.11 Title
to Properties and Assets. GT Biopharma does not presently
own or lease real property other than its corporate headquarters.
GT Biopharma has good and marketable title to all property
reflected on its books and records as owned by it or otherwise
required or used in the operation of its business, free and clear
of all security interests or Encumbrances of any nature. Set forth
in Section 3.11 of the GT Biopharma Disclosure Schedule is a list
of property leased by GT Biopharma. Such improved real property or
tangible personal property is in good operating condition and
repair, and suitable for the purpose for which it is being used,
subject in each case to consumption in the ordinary course,
ordinary wear and tear and ordinary repair, maintenance and
periodic replacement.
3.12 Material
Documents. Set forth in Section 3.12 of the GT Biopharma
Disclosure Schedule is a complete list of all material documents to
which GT Biopharma or the GT Biopharma Subsidiary is a party. All
such documents listed in Section 3.12 of the GT
Biopharma
Disclosure Schedule are valid and enforceable and copies of such
material documents (or, with the consent of the Company, forms
thereof) have been provided to the Company. Except as disclosed in
Section 3.12 of the GT Biopharma Disclosure Schedule, neither GT
Biopharma, the GT Biopharma Subsidiary nor any of the other parties
thereto, is or will be, merely with the passage of time, in default
under any such material document nor is there any requirement for
any of such material documents to be novated or to have the consent
of the other contracting party in order for such material documents
to be valid, effective and enforceable by GT Biopharma or the GT
Biopharma Subsidiary, as the case may be, after the Closing Date as
it was immediately prior thereto.
3.13 Intellectual
Property. Except as set forth in Section 3.13 of the GT
Biopharma Disclosure Schedule, neither GT Biopharma nor the GT
Biopharma Subsidiary has any interest in and owns any domestic and
foreign letters patent, patents, patent applications, patent
licenses, software licenses and know-how licenses, trade names,
trademarks, copyrights, unpatented inventions, service mark
registrations and applications and copyright registrations and
applications owned or used by GT Biopharma or the GT Biopharma
Subsidiary in the operation of its business (collectively, the
“Intellectual Property”). There are no pending or
threatened claims of infringement upon the GT Biopharma
Intellectual Property or upon the rights to any intellectual
property of others.
3.14 No
Default. Except as set forth in Section 3.14 of the GT
Biopharma Disclosure Schedule, neither GT Biopharma nor the GT
Biopharma Subsidiary is in default under any provision of any
contract, commitment, or agreement respecting GT Biopharma, the GT
Biopharma Subsidiary or any of their respective assets to which GT
Biopharma or the GT Biopharma Subsidiary is or are parties or by
which they are bound.
3.15 Litigation.
Except as set forth in Section 3.15 of the GT Biopharma Disclosure
Schedule, there are no lawsuits, arbitration actions or other
proceedings (equitable, legal, administrative or otherwise) pending
or, threatened, and there are no investigations pending or
threatened against GT Biopharma or the GT Biopharma Subsidiary
which relate to and could have a material adverse effect on the
properties, business, assets or financial condition of GT Biopharma
or the GT Biopharma Subsidiary or which could adversely affect the
validity or enforceability of this Agreement or the obligation or
ability of GT Biopharma or the GT Biopharma Subsidiary to perform
their respective obligations under this Agreement or to carry out
the transactions contemplated by this Agreement.
3.16 Absence
of Pension Liability. Neither GT Biopharma nor the GT
Biopharma Subsidiary has any liability of any nature to any person
or entity for pension or retirement obligations, vested or
unvested, to or for the benefit of any of its existing or former
employees. The consummation of the transactions contemplated by
this Agreement will not entitle any employee of GT Biopharma or the
GT Biopharma Subsidiary to severance pay, unemployment compensation
or any other payment, except as expressly provided in this
Agreement, including the Exhibits, or accelerate the time of
payment or increase the amount of compensation due to any such
employee. Neither GT Biopharma nor the GT Biopharma Subsidiary have
presently
nor
have they ever had any employee benefit plans and have no announced
plan or legally binding commitment to create any employee benefit
plans.
3.17 Compliance
with Laws. GT Biopharma and the GT Biopharma Subsidiary have
conducted and are continuing to conduct their respective businesses
in compliance with, and are in compliance with, all applicable
statutes, orders, rules and regulations promulgated by governmental
authorities relating in any respect to its operations, conduct of
business or use of properties, except where noncompliance with any
such statutes, orders, rules or regulations would not have an
adverse effect on either GT Biopharma, the GT Biopharma Subsidiary
or their respective results of operations. Such statutes, orders,
rules or regulations include, but are not limited to, any
applicable statute, order, rule or regulation relating to (i)
wages, hours, hiring, nondiscrimination, retirement, benefits,
pensions, working conditions, and worker safety and health; (ii)
air, water, toxic substances, noise, or solid, gaseous or liquid
waste generation, handling, storage, disposal or transportation;
(iii) zoning and building codes; (iv) the production, storage,
processing, advertising, sale, distribution, transportation,
disposal, use and warranty of products; or (v) trade and antitrust
regulations. The execution, delivery and performance of this
Agreement by GT Biopharma and the GT Biopharma Subsidiary and the
consummation by GT Biopharma and the GT Biopharma Subsidiary of the
transactions contemplated by this Agreement will not, separately or
jointly, violate, contravene or constitute a default under any
applicable statutes, orders, rules and regulations promulgated by
governmental authorities or cause an Encumbrance on any property
used, owned or leased by GT Biopharma or the GT Biopharma
Subsidiary to be created thereunder. There are no proposed changes
in any applicable statutes, orders, rules and regulations
promulgated by governmental authorities that would cause any
representation or warranty contained in this Section 3.17 to be
untrue or have an adverse effect on its operations, conduct of
business or use of properties.
3.18 Filings.
GT Biopharma and the GT Biopharma Subsidiary have made all filings
and reports required under all local, state and federal laws with
respect to its business and of any predecessor entity or
partnership, except filings and reports in those jurisdictions in
which the nature of the property owned or business conducted, when
considered in relation to the absence of serious penalties, renders
the required filings or reports unnecessary as a practical
matter.
3.19 Certain
Activities. Neither GT Biopharma nor the GT Biopharma
Subsidiary has, directly or indirectly, engaged in or been a party
to any of the following activities:
3.19.1 Bribes,
kickbacks or gratuities to any person or entity, including domestic
or foreign government officials or any other payments to any such
persons or entity, whether legal or not legal, to obtain or retain
business or to receive favorable treatment of any nature with
regard to business (excluding commissions or gratuities paid or
given in full compliance with applicable law and constituting
ordinary and necessary expenses incurred in carrying on its
business in the ordinary course);
3.19.2 Contributions
(including gifts), whether legal or not legal, made to any domestic
or foreign political party, political candidate or holder of
political office;
3.19.3 Holding
of or participation in bank accounts, funds or pools of funds
created or maintained in the United States or any foreign country,
without being reflected on the corporate books of account, or as to
which receipts or disbursements therefrom have not been reflected
on such books, the purpose of which is to obtain or retain business
or to receive favorable treatment with regard to
business;
3.19.4 Receiving
or disbursing monies, the actual nature of which has been
improperly disguised or intentionally misrecorded on or improperly
omitted from the corporate books of account;
3.19.5 Paying
fees to domestic or foreign consultants or commercial agents which
exceed the reasonable value of the ordinary and customary
consulting and agency services purported to have been
rendered;
3.19.6 Paying
or reimbursing (including gifts) personnel of GT Biopharma or the
GT Biopharma Subsidiary for the purpose of enabling them to expend
time or to make contributions or payments of the kind or for the
purposes referred to in Subparagraphs 2.23.1 through 2.23.5
above;
3.19.7 Participating
in any manner in any activity which is illegal under the
international boycott provisions of the Export Administration Act,
as amended, or the international boycott provisions of the Internal
Revenue Code, or guidelines or regulations thereunder;
and
3.19.8 Making
or permitting unlawful charges, mischarges or defective or
fraudulent pricing under any contract or subcontract under a
contract with any department, agency or subdivision thereof, of the
United States government, state or municipal government or foreign
government.
3.20 Employment
Relations. GT Biopharma and the GT Biopharma Subsidiary are
in compliance with all Federal, state or other applicable laws,
domestic or foreign, respecting employment and employment
practices, terms and conditions of employment and wages and hours,
and has not and is not engaged in any unfair labor practice; no
unfair labor practice complaint against either GT Biopharma or the
GT Biopharma Subsidiary is pending before the National Labor
Relations Board; there is no labor strike, dispute, slow down or
stoppage actually pending or threatened against or involving either
GT Biopharma or the GT Biopharma Subsidiary; no labor
representation question exists respecting the employees of either
GT Biopharma or the GT Biopharma Subsidiary; no grievance which
might have an adverse effect upon either GT Biopharma or the GT
Biopharma Subsidiary or the conduct of its business exists; no
arbitration proceeding arising out of or under any collective
bargaining agreement is currently being negotiated by either GT
Biopharma or the GT Biopharma Subsidiary; and either GT Biopharma
or the GT Biopharma Subsidiary has not experienced any material
labor difficulty during the last three (3) years.
3.21 Insurance
Coverage. The policies of fire, liability, workers'
compensation or other forms of insurance of GT Biopharma and the GT
Biopharma Subsidiary are described in Section 3.23 of the GT
Biopharma Disclosure Schedule.
3.22 Certificates
of Incorporation and Bylaws. Each of GT Biopharma and the GT
Biopharma Subsidiary has heretofore delivered to the Company true,
accurate and complete copies of their respective Certificates of
Incorporation and Bylaws, together with all amendments to each of
the same as of the date hereof.
3.23 Corporate
Minutes. The minute books of each of GT Biopharma and the GT
Biopharma Subsidiary provided to the Company at the Closing are the
only such minute books and do and will contain, in all material
respects, accurate records of any and all proceedings and actions
at all meetings, including written consents executed in lieu of
meetings of their respective shareholders, Board of Directors
through the Closing Date that are material to the operations and
good standing of GT Biopharma. The stock records of each of GT
Biopharma and the GT Biopharma Subsidiary delivered to the Company
and the Shareholders at the Closing are the correct and only such
stock records and accurately reflects all issues and transfers of
record of the capital stock of each of GT Biopharma and the GT
Biopharma Subsidiary.
3.24 Default
on Indebtedness. Except as set forth in Section 3.24 of the
GT Biopharma Disclosure Schedule, neither GT Biopharma nor the GT
Biopharma Subsidiary is in default under any evidence of
indebtedness for borrowed money.
3.25 Agreements,
Judgment and Decrees. Neither GT Biopharma nor the GT
Biopharma Subsidiary is subject to any agreement, judgment or
decree adversely affecting its or their ability to enter into this
Agreement, to consummate the transactions contemplated
herein.
3.26 Governmental
Approvals. Except for filing of the Certificate of Merger
with the Delaware Secretary of State and as set forth in Section
3.26 of the GT Biopharma Disclosure Schedule, no consent, approval
or authorization of, or notification to or registration with, any
governmental authority, either federal, state or local, is required
in connection with the execution, delivery and performance of this
Agreement by GT Biopharma or the GT Biopharma
Subsidiary.
3.27 Licenses,
Permits and Required Consents. Each of GT Biopharma and the
GT Biopharma Subsidiary has all required franchises, tariffs,
licenses, ordinances, certifications, approvals, authorizations and
permits (“Authorizations”) materially necessary to the
conduct of its business as currently conducted or proposed to be
conducted. A list of such Authorizations is set forth in Section
3.27 of the GT Biopharma Disclosure Schedule attached hereto, true,
correct and complete copies of which have previously been delivered
to the Company. All Authorizations relating to the business of GT
Biopharma or the GT Biopharma Subsidiary are in full force and
effect, no violations have been made in respect thereof, and no
proceeding is pending or threatened which could have the effect of
revoking or limiting any such Authorizations and the same will not
cease to remain in full force and effect by reason of the
transactions contemplated by this Agreement.
3.28 Employment
and Consulting Agreements. Except as set forth in Section
3.28 of the GT Biopharma Disclosure Schedule, neither GT Biopharma
nor the GT Biopharma Subsidiary has any outstanding employment or
consulting agreement, written or oral, with any employee or third
party.
3.29 Completeness
of Representations and Schedules; ; Delivery Via Upload to
Dataroom. The GT Biopharma Disclosure Schedule and Exhibits
hereto completely and correctly present in all material respects
the information required by this Agreement. GT Biopharma’s
obligation to deliver or make available any agreement or document
to the Company under this Agreement shall have been satisfied if
such agreement or document has been uploaded in an electronic data
room to which the Company has access.
ARTICLE 4
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF GT BIOPHARMA AND THE GT BIOPHARMA SUBSIDIARY
The
obligations of GT Biopharma and the GT Biopharma Subsidiary
pursuant to this Agreement are, at the option of GT Biopharma and
the GT Biopharma Subsidiary, subject to the fulfillment to GT
Biopharma’s and the GT Biopharma Subsidiary’s
reasonable satisfaction on or before the Closing Date of each of
the following conditions:
4.1 Execution of this
Agreement. The Company and the Shareholders have duly
executed and delivered this Agreement to GT Biopharma, and all
corporate action required to consummate the Merger and the
transactions contemplated hereby shall have been duly and validly
taken.
4.2 Representations and
Warranties Accurate. All representations and warranties of
the Shareholders and the Company contained in Article 2 of this
Agreement shall have been true in all material respects as of the
Closing Date.
4.3 Performance of the
Company and Shareholders. The Company and the Shareholders
shall have performed and complied with all agreements, terms and
conditions required by this Agreement to be performed or complied
with by them.
4.4 Tender of Company
Shares. The Shareholders shall deliver to GT Biopharma all
Company Shares free and clear of any Encumbrance, by surrendering
and delivering the Certificates to GT Biopharma duly endorsed in
blank.
4.5 Title. On or
prior to the Closing Date, the Company shall deliver to GT
Biopharma evidence that no Encumbrance has been recorded against
any of the Company’s properties or assets other than has been
disclosed in this Agreement or its schedules or disclosure
statements.
4.6 Intellectual
Property. All trademarks, trade names, service marks,
licenses or other rights that the Company uses in connection with
its business shall be free and clear of any encumbrances,
controversies, infringement or other claims or obligations on the
Closing Date.
4.7 Consent of Material
Customers. Prior to Closing, the Company shall have obtained
all approvals in connection with the transfer of the Company Shares
by the Shareholders to GT Biopharma as may be required by any
material contracts between the Company and any of its principal
customers, and such approvals shall have been issued in written
form and substance satisfactory to GT Biopharma and its counsel or
GT Biopharma shall have waived such requirements.
4.8 Obligations to
Third Parties. There shall be no loans or obligations
outstanding from the Company to any third party, except those
incurred in the ordinary course of business or as otherwise
disclosed to GT Biopharma.
4.9 Outstanding
Obligations to Employees. There shall be no outstanding
claims, loans or obligations of the Company owed to any of their
employees or officers, provided that GT Biopharma shall give notice
to the Shareholders and the Company of its approval or withholding
of approval of any claims, loans or obligations then known to GT
Biopharma or before the Closing Date.
4.10 Approval
of Plan of Merger. The Merger and the Certificate of Merger
shall have been duly approved by the Board of Directors of the
Company and the Shareholders pursuant to the Delaware
Law.
4.11 Financial
and Other Conditions. The Company shall have no material
contingent or other liabilities connected with its business, except
as disclosed on the Company Disclosure Schedule or which otherwise
have been incurred in the ordinary course of business and have
otherwise been disclosed to GT Biopharma.
4.12 Legal
Prohibition; Regulatory Consents. On the Closing Date, there
shall exist no injunction or final judgment, law or regulation
prohibiting the consummation of the transactions contemplated by
this Agreement. Any required governmental or regulatory consents
shall have been obtained.
4.13 [Reserved].
4.14 No
Adverse Change. There shall not have occurred any material
adverse change in the assets, business, condition or prospects of
the Company.
4.15 Employment
and Consulting Agreements. The Company shall have executed
employment agreements, substantially in the forms attached hereto
as Exhibits D-1, D-2 and D-3 (each, an “Employment
Agreement”) with Anthony Cataldo as Executive Chairman,
Steven Weldon as CFO and Kathleen Clarence-Smith as CEO. GT
Biopharma and the Company shall have executed a consulting
agreement, substantially in the form attached hereto as Exhibit D-4
(the “Consulting Agreement”) with Mark J.
Silverman.
ARTICLE
5
CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF THE COMPANY AND THE
SHAREHOLDERS
The
obligations of the Company and the Shareholders under this
Agreement are, at the option of the Company or the Shareholders,
subject to the fulfillment to the reasonable satisfaction of the
Company and the Shareholders on or before the Closing Date of each
of the following conditions:
5.1 Execution and
Approval of Agreement. GT Biopharma and the GT Biopharma
Subsidiary shall have duly executed and delivered this Agreement to
the Company and the Shareholders and all corporate action required
to consummate the Merger and the transactions contemplated hereby
shall have been duly and validly taken.
5.2 GT Biopharma
Shares. The GT Biopharma Shares received by the Shareholders
shall be free and clear of any Encumbrance, except as may be
imposed pursuant to the Securities Act.
5.3 Employment and
Consulting Agreements. GT Biopharma shall have executed each
Employment Agreement and the Consulting Agreement.
5.4 Election to
Board. Kathleen Clarence-Smith shall have been elected to
the GT Biopharma’s Board of Directors.
5.5 Representations and
Warranties. The representations and warranties of GT
Biopharma and the GT Biopharma Subsidiary in Article 3 of this
Agreement or in any document, statement, list or certificate
furnished pursuant hereto shall be true and correct as of the
Closing Date.
5.6 No Material
Liabilities. GT Biopharma shall have no material contingent
or other liabilities connected with its business, except as
disclosed in its financial statements or which otherwise have been
disclosed or incurred in the ordinary course of
business.
5.7 Approval of Plan of
Merger. The Merger and the Certificate of Merger shall have
been duly approved by GT Biopharma as the sole shareholder of the
GT Biopharma Subsidiary and by the Board of Directors of GT
Biopharma pursuant to Delaware Law.
5.8 Securities
Filings. GT Biopharma shall have filed all required periodic
reports under the Securities Exchange Act of 1934 (the
“Exchange Act”) and shall have made all other such
filings with the Securities and Exchange Commission and state
securities regulators as may be required by applicable state and
federal law.
5.9 Governmental
Proceedings. No action or proceeding before any court or
other governmental body shall be instituted which prohibits or
invalidate the transaction, or threatens to prohibit or invalidate
the transaction, or which may affect the right of the Shareholders
to own
the
Company Shares or to operate or control GT Biopharma or the
Surviving Company after the Closing Date.
5.10 Financing.
GT Biopharma shall have consummated an equity financing with net
cash proceeds to GT Biopharma of $3,000,000 or more (the
“Financing”).
5.11 Legal
Prohibition; Regulatory Consents. On the Closing Date, there
shall exist no injunction or final judgment, law or regulation
prohibiting the consummation of the transactions contemplated by
this Agreement. Any required governmental or regulatory consents
shall have been obtained.
5.12 Conversion
of GT Biopharma Convertible Securities. All of the GT
Biopharma Convertible Securities shall have been exchanged or
converted into GT Biopharma shares of common stock.
5.13 Evidence
of Ownership of GT Biopharma Shares. GT Biopharma shall have
delivered evidence, in form reasonably acceptable to the
Shareholders, of the Shareholders’ ownership of the GT
Biopharma Shares, as of the Closing.
5.15 GT
Biopharma Stock Split. GT Biopharma shall have delivered
evidence that it has taken all necessary corporate action to
effectuate the GT Biopharma Stock Split and that the GT Biopharma
Stock Split has occurred.
5.16 Officer’s
Certificate. GT Biopharma shall have delivered an
officer’s certificate attesting to the genuineness and
completeness of the documents evidencing the conditions precedent
contained in Section 5.10, Section 5.12, and Section 5.15 of this
Agreement.
ARTICLE
6 SURVIVAL AND OTHER ITEMS
6.1 Survival
of Representations, Warranties and Certain Covenants.
The
representations and
warranties made by the parties in this Agreement and all of the
covenants of the parties in this Agreement (except for the
covenants set forth in Annex A, which shall survive in accordance
with Section 1.14 thereof) shall survive the execution and delivery
of this Agreement and the Closing Date and shall expire on the
twelve month anniversary of the Closing Date. Any claim for
indemnification shall be effective only if notice of such claim is
given by the party claiming indemnification or other relief on or
before the twelve month anniversary of the Closing
Date.
6.2 [Reserved].
6.3 Attorney
Fees. Notwithstanding any of the other provisions hereof, in
the event of litigation with respect to the interpretation or
enforcement of this Agreement or any provisions hereof, the
prevailing party in any such matter shall be entitled to recover
from the other party their or its reasonable costs and expense,
including reasonable attorneys’ fees, incurred in
such
litigation. For
purposes of this Agreement, a party shall be deemed to be the
prevailing party only if such party (A)(i) receives an award or
judgment in such arbitration and/or litigation for more than 50% of
the disputed amount involved in such matter, or (ii) is ordered to
pay the other party less than 50% of the disputed amount involved
in such matter or (B)(i) succeeds in having imposed a material
equitable remedy on the other party (such as an injunction or order
compelling specific performance), or (ii) succeeds in defeating the
other party’s request for such an equitable
remedy.
ARTICLE 7
CERTAIN COVENANTS OF THE PARTIES
7.1 D&O
Insurance. GT Biopharma shall maintain in effect, from a
financially sound and reputable insurer, Directors and Officers
liability insurance (the “D&O Insurance”) in an
amount, with a carrier and upon other terms and conditions approved
by Kathleen Clarence- Smith. The D&O Insurance shall not be
cancelable by GT Biopharma without prior approval by its board of
directors, including an affirmative vote of Kathleen
Clarence-Smith. GT Biopharma shall annually, within ninety (90)
days after the end of each fiscal year, deliver to each of its
directors a certification that the D&O Insurance remains in
effect.
7.2 Expenses and
Fees. GT Biopharma shall be solely responsible for all costs
and expenses (including legal expenses, accounting expenses and
brokers or finders fees and expenses) incurred by all parties to
this Agreement, and the costs and expenses of its affiliates, in
connection with the preparation and negotiation of this Agreement
and the consummation of the transactions contemplated by this
Agreement. No other party shall have any obligation for paying such
expenses or costs of any other party.
7.3 Public
Announcements. The parties agree that no public release,
announcement or any other disclosure concerning any of the
transactions contemplated hereby shall be made or issued by any
party without the prior written consent of GT Biopharma and the
Company (which consent shall not be unreasonably withheld or
delayed), except to the extent such release, announcement or
disclosure may be required by applicable laws, in which case the
person required to make the release, announcement or disclosure
shall allow GT Biopharma or the Company, as applicable, reasonable
time to comment on such release, announcement or disclosure in
advance of such issuance or disclosure; provided, however, that no
notice is required if the disclosure is determined by the GT
Biopharma’s legal counsel to be required under federal or
state securities laws or exchange regulation applicable to GT
Biopharma.
7.4 Operations Pending
Closing. Each of the Company, on one hand, and GT Biopharma
and the GT Biopharma Subsidiary, on the other hand, covenants that
from the date hereof through the Closing Date, except as otherwise
provided in this Agreement; or with the prior written consent of
the other parties, which shall not be unreasonably withheld or
delayed, shall:
7.4.1 not
undertake any transactions or enter into any contracts, commitments
or arrangements other than in the ordinary course of business, use
its good faith efforts to preserve the present business and
organization of such party, and to preserve the goodwill of others
having business relationships with such party;
7.4.2 not
enter into, renew, extend, modify, terminate, waive or diminish any
right under any material lease, contract or other instrument,
except in the ordinary course of business;
7.4.3 not
allow any of such parties’ assets or properties to become
subject to any Encumbrance that does not exist as of the date of
this Agreement, except in the ordinary course of
business;
7.4.4 maintain
such party’s existing insurance coverages, subject to
variations in amounts in the ordinary course of
business;
7.4.5 not
declare or make any dividends or distributions; and
7.4.6 not
amend the organizational documents of such party.
7.5 [Reserved].
7.6 Further
Assurances. Each of the parties hereto shall, at any time,
and from time to time, either before or after the Closing Date,
upon the request of the appropriate party, do, execute, acknowledge
and deliver, or will cause to be done, executed, acknowledged and
delivered, all such further acts, assignments, transfers,
conveyances and assurances as may be reasonably required to
complete the transactions contemplated in this Agreement. After the
Closing Date, each party shall use its good faith efforts to assure
that any necessary third party shall execute such documents and do
such acts and things as the other party may reasonably require for
the purpose of giving each party the full benefit of all the
provisions of this Agreement and as may be reasonably required to
complete the transactions contemplated in this
Agreement.
7.7 Actions of the
Parties.
7.7.1 No
Actions Constituting a Breach. From the date hereof through the
Closing Date, neither the Company will take or knowingly permit to
be done any action in the conduct of the business of the Company,
nor will GT Biopharma or the GT Biopharma Subsidiary take any
action, which would be in breach of its obligations herein, and
each of the parties hereto shall cause the deliveries for which
such party is responsible at the Closing to be duly and timely
made.
7.7.2 Notification
of Breaches. From the date hereof through the Closing Date, each
party will promptly notify the other parties in writing if any such
Party becomes aware of any fact or condition that causes or
constitutes a breach of any of its representations and warranties
as of the date of this Agreement. During the same period, each
party will promptly
notify
the other parties of the occurrence of any breach of any covenant
of such party in this Article VIII.
7.8 Compliance With
Conditions. Each party hereto agrees to cooperate fully with
each other party and shall use its good faith efforts to cause the
conditions precedent for which such Party is responsible to be
fulfilled. Each party hereto further agrees to use its good faith
efforts to consummate this Agreement and the transactions
contemplated in this Agreement as promptly as
possible.
7.9 Risk of
Loss. The risk of loss or destruction of all or any part of
the Company’s properties or assets prior to the Closing Date
from any cause (including, without limitation, fire, theft, acts of
God or public enemy) shall be upon the Company. Such risk shall be
upon GT Biopharma if such loss occurs after the Closing
Date.
7.10 No
Solicitation. The parties recognize that the parties will
expend considerable money, resources and time performing their
respective due diligence reviews. Accordingly, none of the Company,
the Shareholders and GT Biopharma shall, and each shall cause their
respective affiliates not to, directly or indirectly, solicit or
encourage the initiation or submission of interest, offers, fund
raising term sheets, inquiries or proposals (or consider or
entertain any of the foregoing) from any person or entity
(including, without limitation, by way of providing any non-public
information concerning any entity or otherwise), initiate or
participate in any negotiations or discussions, or enter into,
accept or authorize any agreement or agreement in principle, or
announce any intention to do any of the foregoing, with respect to
any expression of interest, offer, proposal to fund or acquire,
license, or lease (i) all or any portion of any entity’s
business or assets (including, without limitation its intellectual
property), or (ii) all or any portion of any entity’s capital
stock, membership interest or other securities, in each case
whether by stock purchase, merger, consolidation, combination,
reorganization, recapitalization, purchase of assets, purchase of
shares or membership interest, lease, license or otherwise (any of
the foregoing, a “Competing Transaction”). Each of the
Company, the Shareholders and GT Biopharma shall, and shall cause
their respective affiliates to, immediately discontinue any ongoing
discussions or negotiations (other than any ongoing discussions in
connection with this Agreement) relating to a possible Competing
Transaction, and shall promptly provide the other parties with an
oral and a written notice of any expression of interest, proposal
or offer relating to a possible Competing Transaction that is
received by the Company, the Shareholders, GT Biopharma or by any
of the Company Representatives or the GT Biopharma Representatives,
as applicable, from any person, which notice shall contain the
identity of such person or entity and the nature of the proposal.
Without limiting the generality of the foregoing, the Financing
shall not be considered a Competing Transaction.
ARTICLE
8 REGISTRATION RIGHTS
Registration rights
granted to each Shareholder by GT Biopharma with respect to the GT
Biopharma Shares are set forth in Annex A attached hereto, which is
incorporated herein by reference and made part of this
Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 Termination.
9.1.1 General.
This Agreement and the transactions contemplated hereby may be
terminated prior to the Closing: (i) by the mutual written consent
of the parties; or (ii) by written notice from either party in the
event of a material breach of this Agreement by the other party;
provided that the party wishing to terminate this Agreement has
notified the other parties in writing of such breach and such
breach has continued without cure for a period of thirty (30)
calendar days after the notice of breach, subject to the provisions
of Section 1.3, "Closing," of this Agreement.
9.1.2 Effect
of Termination. If any party terminates this Agreement pursuant to
this Article 8, all rights and obligations of the parties hereunder
shall terminate without any liability of any party to the others
except for such damages arising out of, related to, or in
connection with, breaches of representations, warranties,
covenants, or agreements which shall have occurred prior to such
termination. Except, as set forth in the immediately preceding
sentence, this Section shall not be deemed to release any party
from any liability for any breach by such party of the
representations, warranties, covenants or agreements which shall
have occurred prior to such termination.
9.2 Binding
Agreement. The parties covenant and agree that this
Agreement, when executed and delivered by the parties, will
constitute a legal, valid and binding agreement between the parties
and will be enforceable in accordance with its terms.
9.3 Assignment.
This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto, their legal
representatives, successors. This Agreement cannot be assigned
without the consent of the Company.
9.4 Entire
Agreement. This Agreement and its exhibits and schedules
constitute the entire contract among the parties hereto with
respect to the subject matter thereof, superseding all prior
communications and discussions and no party hereto shall be bound
by any communication on the subject matter hereof unless such is in
writing signed by any necessary party thereto and bears a date
subsequent to the date hereof. The exhibits and schedules shall be
construed with and deemed as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein.
Information set forth in any exhibit, schedule or provision of this
Agreement shall be deemed to be set forth in every other exhibit,
schedule or provision of this Agreement and therefore shall be
deemed to be disclosed for all purposes of this
Agreement.
9.5 Modification.
This Agreement may be waived, changed, amended, discharged or
terminated only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, amendment,
discharge or termination is sought.
9.6 Notices. All
notices, requests, demands and other communications shall be deemed
to have been duly given three (3) days after postmark of deposit in
the United States mail, if mailed, certified or registered mail,
postage prepaid:
If to
the Company or the Shareholders:
Kathleen
Clarence-Smith
c/o KM
Pharmaceutical Consulting LLC Suite 520
1825 K
Street NW Washington, DC 20006
E-mail:
kcs@gt-pharmaceuticals.com
Mark
Silverman 224 22nd St.
Santa
Monica, CA 90402
E-mail:
Mark@carecast.com
Richard
Dulik
10507
Cambridge Ct. Great Falls, VA 22066
E-mail:
rickpd@attglobal.net With copy to:
Pillsbury Winthrop
Shaw Pittman LLP 1650 Tysons Blvd, Suite 1400
McLean,
VA 22102
Attention: Steven
L. Meltzer Facsimile No.: (703) 770-7901
Telephone No.:
(703) 770-7900
E-mail:
steven.meltzer@pillsburylaw.com
If to
GT Biopharma or the GT Biopharma Subsidiary:
GT
Biopharma, Inc.
100
South Ashley Drive, Suite 600
Tampa,
FL 33602 Attention: Steven Weldon
With a
copy to:
Gary R.
Henrie
P.O.
Box 107
315
Kimball’s Garden Circle Nauvoo, IL 62354
or to
such other address as any party shall designate to the other in
writing. The parties shall promptly advise each other of changes in
addresses for such notices.
9.7 Choice of Law and
Jurisdiction. This Agreement shall be governed by,
construed, interpreted and enforced according to the laws of the
State of Delaware. Each party to this Agreement hereby irrevocably
agrees that any legal action or proceeding arising out of or
relating to this Agreement or any agreements or transactions
contemplated hereby may be brought in the courts of the State of
Delaware or of the United States of America for the District of
Delaware and hereby expressly submits to the personal jurisdiction
and venue of such courts for the purposes thereof and expressly
waives any claim of improper venue and any claim that such courts
are an inconvenient forum. Each party hereby irrevocably consents
to the service of process of any of the aforementioned courts in
any such suit, action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the
address set forth in Paragraph 8.6, “Notices,” such
service to become effective ten (10) days after such
mailing.
9.8 Severability.
If any portion of this Agreement shall be finally determined by any
court or governmental agency of competent jurisdiction to violate
applicable law or otherwise not to conform to requirements of law
and, therefore, to be invalid, the parties will cooperate to remedy
or avoid the invalidity, but, in any event, will not upset the
general balance of relationships created or intended to be created
between them as manifested by this Agreement and the instruments
referred to herein. Except insofar as it would be an abuse of the
foregoing principle, the remaining provisions hereof shall remain
in full force and effect.
9.9 Other
Documents. The parties shall upon reasonable request of the
other, execute such documents as may be necessary or appropriate to
carry out the intent of this Agreement.
9.10 Headings
and the Use of Pronouns. The section headings hereof are
intended solely for convenience of reference and shall not be
construed to explain any of the provisions of
this
Agreement. All pronouns and any variations thereof and other words,
as applicable, shall be deemed to refer to the masculine, feminine,
neuter, singular or plural as the identity of the person or matter
may require.
9.11 Time
is of the Essence. Time is of the essence of this
Agreement.
9.12 No
Waiver and Remedies. No failure or delay on a party’s
part to exercise any right or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by a party
of a right or remedy hereunder preclude any other or further
exercise. No remedy or election hereunder shall be deemed exclusive
but it shall, wherever possible, be cumulative with all other
remedies in law or equity.
9.13 Counterparts.
This Agreement may be executed in two or more counterparts, and by
the different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9.14 Further
Assurances. Each of the parties hereto shall use
commercially practicable efforts to fulfill all of the conditions
set forth in this Agreement over which it has control or influence
(including obtaining any consents necessary for the performance of
such party’s obligations hereunder) and to consummate the
transactions contemplated hereby, and shall execute and deliver
such further instruments and provide such documents as are
necessary to effect this Agreement.
9.15 Rules
of Construction. The normal rules of construction which
require the terms of an agreement to be construed most strictly
against the drafter of such agreement are hereby waived since each
party have been represented by counsel in the drafting and
negotiation of this Agreement.
9.16 Third
Party Beneficiaries. Each party hereto intends this
Agreement shall not benefit or create any right or cause of action
in or on behalf of any person other than the parties
hereto.
[THE
REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF,
the parties have executed this
Agreement as of the date first above written.
|
COMPANY:
GEORGETOWN TRANSLATIONAL PHARMACEUTICALS,
INC.,
a
Delaware corporation
By:
/s/ Kathleen
Clarence-Smith
Kathleen
Clarence-Smith
Its:
CEO
|
|
GT
BIOPHARMA:
GT BIOPHARMA, INC.,
a
Delaware corporation
By:
/s/ Anthony
Cataldo
Anthony
Cataldo
Its:
CEO
|
|
SHAREHOLDERS:
/s/
Kathleen
Clarence-Smith
Kathleen
Clarence-Smith
/s/Mark J.
Silverman
Mark J.
Silverman
/s/Richard P.
Dulik
Richard
P. Dulik
|
|
GT
BIOPHARMA SUBSIDIARY:
GT BIOPHARMA MERGER, CO., a Delaware
corporation
By:
/s/ Steven
Weldon
Steven
Weldon
Its:
President
|
|
[Signature Page to Agreement and Plan of Merger]
|
-30-
ANNEX A
Shareholders’ Registration Rights
1.1 Registration of GT
Biopharma Shares. At
the election of the Shareholders,
which
shall not be made prior to the six (6)-month anniversary of the
Closing Date, GT Biopharma shall file a registration statement
under the Securities Act, necessary to register and facilitate the
sale of the GT Biopharma Shares, for sale by any and all
Shareholders in full compliance with the Securities
Act.
1.2 Piggyback
Registration.
(a) If GT Biopharma
shall determine to register any of its securities either for its
own account or the account of a security holder or holders
exercising their respective demand registration rights, other than
a registration pursuant to Section 1.1 or 1.3 of this Annex A, a
registration relating solely to employee benefit plans, a
registration relating to the offer and sale of debt securities, or
a registration relating solely to a Rule 145 transaction, GT
Biopharma shall:
(i) promptly give to
each Shareholder written notice thereof; and
(ii) use
commercially reasonable efforts to include in such registration
(and any related qualification under blue sky laws or other
compliance), except as set forth in Section 1.2(b) of this Annex A,
and in any underwriting involved therein, all the GT Biopharma
Shares specified in a written request or requests, made by any
Shareholder and received by GT Biopharma within ten (10) days after
the written notice from GT Biopharma described in clause (i) above
is given by GT Biopharma. Such written request may specify all or a
part of a Shareholder’s GT Biopharma Shares.
(b) If the registration
of which GT Biopharma gives notice is for a registered public
offering involving an underwriting, GT Biopharma shall so advise
the Shareholders as a part of the written notice given pursuant to
Section 1.2(a)(i) of this Annex A. In such event, the right of any
Shareholder to include GT Biopharma Shares in such registration
pursuant to this Section 1.2 shall be conditioned upon such
Shareholder’s participation in such underwriting and the
inclusion of such Shareholder’s GT Biopharma Shares in the
underwriting to the extent provided herein. All Shareholders
proposing to distribute their securities through such underwriting
shall (together with GT Biopharma Shares and any other stockholders
of GT Biopharma distributing their securities through such
underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters
selected by GT Biopharma.
(c) Notwithstanding any
other provision of this Section 1.2, if the representative of the
underwriters advises GT Biopharma that marketing factors require a
limitation on the number of securities sold other than by GT
Biopharma, the representative may (subject to the limitations set
forth below) exclude all GT Biopharma Shares from, or limit the
number of GT Biopharma Shares to be included in, the registration
and underwriting. GT Biopharma may limit, to the extent so advised
by the underwriters, the amount of securities to be
included in the
registration by GT Biopharma’s stockholders (including the
Shareholders); provided, however, that the number GT
Biopharma Shares to be included in such registration by GT
Biopharma’s stockholders (including the Shareholders) may not
be so reduced to less than twenty-five percent (25%) of the total
number of all securities included in such registration. GT
Biopharma shall so advise all holders of securities requesting
registration, and the number of securities that are entitled to be
included in the registration and underwriting shall be allocated
first to GT Biopharma for securities being sold for its own account
and thereafter as set forth in Section 1.11 of this Annex A. If any
person does not agree to the terms of any such underwriting, such
person shall be excluded therefrom by written notice from GT
Biopharma or the underwriter. Any securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration.
If securities are so withdrawn from the registration and if the
number of securities to be included in such registration was
previously reduced as a result of marketing factors, GT Biopharma
shall then offer to all persons who have retained the right to
include securities in the registration the right to include
additional securities in the registration in an aggregate amount
equal to the number of securities so withdrawn, with such
securities to be allocated among the persons requesting additional
inclusion in accordance with Section 1.11 of this Annex A. To
facilitate the allocation of securities in accordance with the
above provisions, GT Biopharma or the underwriter(s) may round the
number of securities allocated to any Shareholder to the nearest
100 shares.
(d) Right to Terminate
Registration. GT Biopharma shall have the right to terminate
or withdraw any registration initiated by it under this Section 1.2
prior to the effectiveness of such registration whether or not any
Shareholder has elected to include securities in such
registration.
1.3 Registration
on Form S-3.
(a) After GT Biopharma
has qualified for the use of Form S-3, in addition to the rights
contained in the foregoing provisions of this Annex A, each
Shareholder shall have the right to request registrations on Form
S-3 (such requests shall be in writing and shall state the number
of GT Biopharma Shares to be disposed of and the intended methods
of disposition of such securities by such Shareholder);
provided,
however, that GT
Biopharma shall not be obligated to effect any such
registration:
(i) if such
Shareholder, together with the holders of any other securities of
GT Biopharma entitled to inclusion in such registration, propose to
sell GT Biopharma Shares and such other securities (if any) on Form
S-3 at an aggregate price to the public of less than $250,000;
or
(ii) in
a given twelve (12) month period, after GT Biopharma has effected
one (1) such registration in any such period.
(b) If a request
complying with the requirements of Section 1.3(a) of this Annex A
is delivered to GT Biopharma, GT Biopharma shall (i) within ten
(10) days of receipt thereof, give written notice of the proposed
registration to all other Shareholders; and (ii) as soon as
practicable, and in any event within sixty (60) days of receipt of
such request, file a registration statement covering such GT
Biopharma Shares of the initiating Shareholder as are
specified in such
request, together with the GT Biopharma Shares of other any other
Shareholders joining in such request as are specified in a written
request received by GT Biopharma within ten (10) days after such
written notice from GT Biopharma is given, and use commercially
reasonable efforts to effect such registration.
1.4 Expenses of
Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance
pursuant to Sections 1.1, 1.2 or 1.3 of this Annex A shall be borne
by GT Biopharma; provided, however, that GT Biopharma
shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.3 of this Annex A if the
registration request is subsequently withdrawn at the request of
the Shareholders of a majority of the GT Biopharma Shares to be
registered or because a sufficient number of Shareholders shall
have withdrawn so that the minimum offering conditions set forth in
Section 1.3 of this Annex A are no longer satisfied (in which case
all participating Shareholders shall bear such expenses pro rata
among such Shareholders based on the number of GT Biopharma Shares
requested to be so registered), unless the Shareholders of a
majority of the GT Biopharma Shares agree to forfeit their right to
a demand registration pursuant to Section 1.3 of this Annex A;
provided,
further, however,
that if such withdrawal occurs prior to the date the registration
statement shall have become effective and is based upon material
adverse information relating to GT Biopharma that is different from
the information known to the Shareholders requesting registration
at the time of their request for registration under Section 1.3 of
this Annex A, such registration shall not be treated as a counted
registration for purposes of Section 1.3 of this Annex A, even
though the Shareholders do not bear the Registration Expenses for
such registration. All Selling Expenses relating to securities so
registered shall be borne by the holders of such securities pro
rata on the basis of the number of securities so registered on
their behalf.
1.5 Registration
Procedures. In the case of each registration effected by GT
Biopharma pursuant to Section 1.1, 1.2 or 1.3 of this Annex A, GT
Biopharma will keep each Shareholder advised in writing as to the
initiation of each registration and as to the completion thereof.
At its expense, GT Biopharma shall use commercially reasonable
efforts to:
(a) Keep such
registration effective for a period of one hundred
twenty
(120)
days or until the Shareholder or Shareholders have completed the
distribution described in the registration statement relating
thereto, whichever first occurs; provided, however, that
(i)
such one hundred twenty (120) day period shall be extended for a
period of time equal to the period the Shareholder refrains from
selling any securities included in such registration at the request
of an underwriter of common stock (or other securities) of GT
Biopharma; and (ii) in the case of any registration of GT Biopharma
Shares on Form S-3 which are intended to be offered on a continuous
or delayed basis, subject to compliance with rules of the
Securities and Exchange Commission, such one hundred twenty (120)
day period shall be extended for up to sixty (60) days, if
necessary, to keep the registration statement effective until all
such GT Biopharma Shares are sold;
(b) Prepare and file
with the Securities and Exchange Commission such amendments and
supplements to such registration statement and the prospectus used
in connection with such registration statement as may be necessary
to comply with the provisions
of the
Securities Act with respect to the disposition of all securities
covered by such registration statement;
(c) Furnish such number
of copies of a prospectus, including a preliminary prospectus, and
any Free Writing Prospectus, including any amendments or
supplements thereto, and other documents incident thereto, as a
Shareholder from time to time may reasonably request in order to
facilitate the distribution of such Shareholder’s GT
Biopharma Shares;
(d) Notify each seller
of GT Biopharma Shares covered by such registration statement at
any time when a prospectus or Free Writing Prospectus (to the
extent prepared by or on behalf of GT Biopharma) relating thereto
is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller,
prepare and furnish to such seller a reasonable number of copies of
a supplement to or an amendment of such prospectus or Free Writing
Prospectus (to the extent prepared by or on behalf of GT Biopharma)
as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing;
(e) Cause all such GT
Biopharma Shares registered hereunder to be listed on each
securities exchange on which similar securities issued by GT
Biopharma are then listed;
(f) Provide a transfer
agent and registrar for all GT Biopharma Shares registered pursuant
to such registration statement and a CUSIP number for all such GT
Biopharma Shares, in each case not later than the effective date of
such registration;
(g) In connection with
any underwritten offering pursuant to a registration statement
filed pursuant to this Annex A, GT Biopharma will enter into an
underwriting agreement reasonably necessary to effect the offer and
sale of its common stock, provided such underwriting agreement
contains customary underwriting provisions and provided further
that if the underwriter so requests the underwriting agreement will
contain customary contribution provisions;
(h) Furnish, at the
request of any Shareholder requesting registration of GT Biopharma
Shares pursuant to this Annex A, on the date that such GT Biopharma
Shares are delivered to the underwriters for sale in connection
with a registration pursuant to this Annex A, if such securities
are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration
statement with respect to such securities becomes effective, (i) an
opinion, dated such date, of the counsel representing GT Biopharma
for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the
Shareholders requesting registration of GT Biopharma Shares and
(ii) a letter dated such date, from the independent certified
public accountants of GT Biopharma, in form and substance as is
customarily given by independent certified public accountants to
underwriters in an underwritten
public
offering, addressed to the underwriters, if any, and to the
Shareholders requesting registration of GT Biopharma Shares;
and
(i) Register and
qualify the securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions as
shall be reasonably requested by the Shareholders, provided that GT
Biopharma shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general
consent to service of process in any such states or
jurisdictions.
1.6 Indemnification.
GT Biopharma will indemnify each Shareholder and each of his or her
legal counsel, and accountants against all expenses, claims,
losses, damages, and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on (i) any
untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document
(including any related registration statement, notification, or the
like) incident to any such registration, qualification, or
compliance, (ii) any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, or (iii) any
violation (or alleged violation) by GT Biopharma of the Securities
Act, any state or other securities laws or any rule or regulation
thereunder applicable to GT Biopharma and relating to action or
inaction required of GT Biopharma in connection with any such
registration, qualification, or compliance, and will reimburse each
such Shareholder and each of his or her legal counsel, and
accountants for any legal and any other expenses reasonably
incurred in connection with investigating and defending or settling
any such claim, loss, damage, liability, or action; provided that
GT Biopharma will not be liable in any such case to the extent that
any such claim, loss, damage, liability, or expense arises out of
or is based on any untrue statement or omission based upon written
information furnished to GT Biopharma by such Shareholder or
underwriter and stated to be specifically for use therein. It is
agreed that the indemnity agreement contained in this Section
1.6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability, or action if such settlement is
effected without the consent of GT Biopharma (which consent has not
been unreasonably withheld).
1.7 Information by
Shareholders. Each Shareholder of GT Biopharma Shares shall
furnish to GT Biopharma such information regarding such Shareholder
and the distribution proposed by such Shareholder as GT Biopharma
may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification, or
compliance referred to in this Annex A.
1.8 Limitations on
Subsequent Registration Rights. After the date of this
Agreement, GT Biopharma shall not, without the prior written
consent of Shareholders of a majority of the GT Biopharma Shares,
enter into any agreement with any holder or prospective holder of
any securities of GT Biopharma giving such holder or prospective
holder any registration rights the terms of which are more
favorable than or on parity with the registration rights granted to
the Shareholders hereunder, unless, under the terms of such
agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the
inclusion of such securities would not reduce the number of GT
Biopharma Shares
included by the Shareholders.
1.9 Rule 144
Reporting. With a view to making available the benefits of
certain
rules
and regulations of the Securities and Exchange Commission that may
permit the sale of the GT Biopharma Shares to the public without
registration, GT Biopharma agrees to use commercially reasonable
efforts to:
(a) Make and keep
public information regarding GT Biopharma available, as those terms
are understood and defined in Rule 144 under the Securities Act, at
all times from and after ninety (90) days following the effective
date of the first registration under the Securities Act filed by GT
Biopharma for an offering of its securities to the general
public;
(b) File with the
Securities and Exchange Commission in a timely manner all reports
and other documents required of GT Biopharma under the Securities
Act and the Exchange Act at any time after it has become subject to
such reporting requirements; and
(c) So long as a
Shareholder owns any GT Biopharma Shares, furnish to the
Shareholder forthwith upon written request a written statement by
GT Biopharma as to its compliance with the reporting requirements
of Rule 144 (at any time from and after ninety
(90)
days following the effective date of the first registration
statement filed by GT Biopharma for an offering of its securities
to the general public), and of the Securities Act and the Exchange
Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report
of GT Biopharma, and such other reports and documents so filed as a
Shareholder may reasonably request in availing itself of any rule
or regulation of the Securities and Exchange Commission allowing a
Shareholder to sell any such securities without
registration.
1.10 Transfer
or Assignment of Registration Rights. The rights to cause GT
Biopharma to register securities granted to a Shareholder by GT
Biopharma under this Annex A may be transferred or assigned by a
Shareholder only to (a) a transferee or assignee of GT Biopharma
Shares previously held by such Shareholder; or (b) a Family Member
of such Shareholder or a trust for the benefit of such Shareholder
or Family Member; provided, however, that in each such case GT
Biopharma is given written notice at the time of or within a
reasonable time after such transfer or assignment, stating the name
and address of the transferee or assignee and identifying the
securities with respect to which such registration rights are being
transferred or assigned.
1.11 Allocation
of Registration Opportunities. Except as otherwise provided
in this Annex A, in any circumstance in which all of the GT
Biopharma Shares requested to be included in a registration on
behalf of the Shareholders cannot be so included as a result of
limitations in the aggregate number of GT Biopharma Shares that may
be so included, the number of GT Biopharma Shares shall be excluded
by excluding GT Biopharma Shares, pro rata on the basis of the
number of GT Biopharma Shares held by such Shareholders, until the
aggregate number of GT Biopharma Shares may be included in such
registration. If any Shareholder does not request inclusion of the
maximum number of GT Biopharma Shares allocated to such person
pursuant to the above described formula, the remaining portion of
such person’s allocation shall be reallocated among those
requesting Shareholders whose allocations did not satisfy their
requests, pro rata on the same basis as described above, and this
procedure shall be repeated until all of the
GT
Biopharma Shares that may be included in such registration on
behalf of the Shareholders have been so allocated.
1.12 “Market
Stand-Off” Agreement.
(a) Each Shareholder
agrees that such Shareholder shall not sell or otherwise transfer,
dispose of, make any short sale of, grant any option for the
purchase of, or enter into any hedging of similar transaction with
the same economic effect as a sale of, any common stock (or other
securities) of GT Biopharma held by such Shareholder (other than
those included in the registration) during the one hundred eighty
(180) day period following the effective date of the initial
registration statement of the Company filed under the Securities
Act (or such longer period as the underwriters or GT Biopharma
shall request in order to facilitate compliance with FINRA Rule
2711 or NYSE Member Rule 472 or any successor or similar rule or
regulation). The foregoing provisions of this Section 1.12 shall
not apply to the sale of any securities to an underwriter pursuant
to an underwriting agreement and shall only be applicable to the
Shareholders if all then current officers and directors and greater
than one percent (1%) stockholders of GT Biopharma enter into
similar agreements. The underwriters in connection with any public
offering subject to the provisions of this Section 1.12 are
intended third party beneficiaries of this Section 1.12 and shall
have the right to enforce the provisions hereof as though they were
a party hereto. Any discretionary waiver or termination of the
restrictions of any or all of such agreements by GT Biopharma or
the underwriters shall apply to all Shareholders subject to such
agreements pro rata based on the number of securities subject to
such agreements, unless waived by the Shareholders of a majority of
the GT Biopharma Shares.
(b) The obligations
described in this Section 1.12 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a
registration relating solely to a Rule 145 transaction on Form S-4
or similar forms that may be promulgated in the future. GT
Biopharma may impose stop-transfer instructions with respect to the
securities subject to the foregoing restriction until the end of
the applicable periods. Each Shareholder agrees to execute a market
standoff agreement with the underwriters in customary form
consistent with the provisions of this Section 1.12.
1.13 Delay
of Registration. No Shareholder shall have any right to take
any action to restrain, enjoin, or otherwise delay any registration
as the result of any controversy that might arise with respect to
the interpretation or implementation of this Annex A.
1.14 Survival.
This Annex A shall survive the execution and delivery of this
Agreement and the Closing Date and shall remain in full force and
effect so long as any Shareholder and/or his or her permitted
assigns hold any GT Biopharma Shares.
1.15 Definitions.
For purposes of this Annex A:
(a) “Family
Member” means a child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, domestic partner, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive
relationships.
(b) “Free Writing
Prospectus” shall mean a free writing prospectus, as
defined
in Rule
405 under the Securities Act.
(c) “Registration
Expenses” shall mean all expenses incurred in effecting any
registration pursuant to this Agreement, including, without
limitation, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and disbursements of counsel
for GT Biopharma, blue sky fees and expenses, and expenses of any
regular or special audits incident to or required by any such
registration, and fees and disbursements of one special counsel for
the Shareholders (not to exceed $50,000), but shall not include
Selling Expenses and the compensation of regular employees of GT
Biopharma, which shall be paid in any event by GT
Biopharma.
(d) “Rule
145” shall mean Rule 145 as promulgated by the Securities and
Exchange Commission under the Securities Act, as such rule may be
amended from time to time, or any similar successor rule that may
be promulgated by the Securities and Exchange
Commission.
Other
capitalized terms used but not defined in this Annex A shall have
the meaning given to them in the Agreement.
EXHIBIT A
FORM OF
CERTIFICATE OF MERGER
[attached.]
STATE
OF DELAWARE CERTIFICATE OF MERGER OF
GT
BIOPHARMA MERGER, CO. WITH AND INTO
GEORGETOWN
TRANSLATIONAL PHARMACEUTICALS, INC.
Pursuant to Title
8, Section 251(c) of the Delaware General Corporation Law (the
“DGCL”), the undersigned corporation executed the
following Certificate of Merger:
FIRST:
The name of the surviving corporation is Georgetown Translational
Pharmaceuticals, Inc., a Delaware corporation, and the name of the
corporation being merged into this surviving corporation is GT
Biopharma Merger, Co., a Delaware corporation.
SECOND:
The Agreement and Plan of Merger has been approved, adopted,
certified, executed and acknowledged by each of the constituent
corporations in accordance with the DGCL.
THIRD:
The name of the surviving corporation is Georgetown Translational
Pharmaceuticals, Inc., a Delaware corporation.
FOURTH:
The Certificate of Incorporation of the surviving corporation shall
be its Certificate of Incorporation.
FIFTH:
The merger is to become effective upon filing of this Certificate
of Merger with the Secretary of State of the State of
Delaware.
SIXTH:
The Agreement and Plan of Merger is on file at 1825 K Street NW,
Suite 510, Washington, DC 20006, the place of business of the
surviving corporation.
SEVENTH: A copy of
the executed Agreement and Plan of Merger will be furnished by the
corporation on request, without cost, to any stockholder of the
constituent corporations.
[Signature Page Follows]
IN
WITNESS WHEREOF, said surviving corporation has caused this
Certificate of Merger to be executed by its duly authorized
officer, this first day of September, 2017.
GEORGETOWN
TRANSLATIONAL PHARMACEUTICALS, INC.
By:
/s/ Kathleen
Clarence-Smith
Name:
Kathleen Clarence-Smith
Title:
Chief Executive Officer
SIGNATURE PAGE TO CERTIFICATE OF MERGER