Exhibit 10.1

CONTINGENT VALUE RIGHTS AGREEMENT

THIS CONTINGENT VALUE RIGHTS AGREEMENT, dated as of April 17, 2019 (this
“Agreement”), is entered into by and among Mateon Therapeutics, Inc., a Delaware
corporation (the “Company”), Oncotelic, Inc., a Delaware corporation
(“Oncotelic”), American Stock Transfer & Trust Company, LLC, a New York limited
liability trust company (the “Rights Agent”) and initial CVR Registrar (as
defined herein), and Matthew M. Loar, acting solely in his capacity as
representative of the Holders (as defined herein) (the “Holder Representative”).

A.    The Company, Oncotelic Acquisition Corporation, a wholly owned subsidiary
of the Company (“Merger Sub”), and Oncotelic have entered into an Agreement and
Plan of Merger dated as of April 17, 2019 (the “Merger Agreement”), pursuant to
which Merger Sub will merge with and into the Company (the “Merger”).

B.    Prior to the effectiveness of the Merger, the Company wishes to create and
issue contingent value rights relating to the Legacy Assets (as defined herein)
to the record holders of the Common Stock (as defined herein) as of a record
date prior to the effectiveness of the Merger.

C.    On April 4, 2019, the Board of Directors of the Company authorized and
declared a dividend of one CVR (as defined herein) for each share of Common
Stock outstanding at 5:01 p.m. Eastern Time on the Record Date (as defined
herein). The payment of such dividend will be conditioned upon, and such
dividend will only become payable upon, the satisfaction or waiver of all
conditions to the Merger and the occurrence of the time that is immediately
prior to the Effective Time (as defined herein). The Company will pay the
dividend immediately prior to the Effective Time.

Accordingly, and in consideration of the premises and the consummation of the
transactions referred to above, it is mutually agreed, for the benefit of the
Holders, as follows:

ARTICLE I

DEFINITIONS

1.1    Definitions.

(a)    For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

(i)    all accounting terms used herein and not expressly defined herein have
the meanings assigned to such terms in accordance with United States generally
accepted accounting principles, as in effect on the date hereof;

(ii)    unless the context otherwise requires, words describing the singular
number include the plural and vice versa, words denoting any gender include all
genders and words denoting natural Persons include corporations, partnerships
and other Persons and vice versa;

(iii)    the words “include” and “including” and variations thereof will not be
deemed to be terms of limitation, but rather will be deemed to be followed by
the words “without limitation”;

(iv)    the terms “hereof”, “hereunder”, “herein” and words of similar import
refer to this Agreement as a whole and not to any particular Article, Section or
provision of this Agreement; and

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(v)    the Article and Section headings contained in this Agreement are for
reference purposes only and do not limit or otherwise affect any of the
substance of this Agreement.

(b)    The following terms have the meanings ascribed to them as follows:

“Achievement Certificate” has the meaning set forth in Section 2.4(a).

“Affiliates” means, with respect to any Person, any other Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by or
is under common control with such Person.

“Board of Directors” means the board of directors of the Company.

“Board Resolution” means a copy of a resolution certified by the secretary or an
assistant secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Rights Agent and the Holder Representative.

“Business Day” means each day other than a Saturday, Sunday or any other day on
which commercial banks in San Francisco, California are authorized or required
by law to close.

“Change of Control” means any of the following transactions occurring after the
Effective Time of the Merger: (x) (i) any consolidation or merger of the Company
with or into any other corporation or entity or Person or (ii) any other
corporate reorganization, in which the stockholders of the Company immediately
prior to such consolidation, merger or reorganization, own less than 50% of the
voting power of the surviving entity immediately after such consolidation,
merger or reorganization, or (y) any sale of all or substantially all of the
assets of the Company.

“Close of Business” on any given date means 5:00 p.m., Eastern Time, on such
date; provided, however, that if such date is not a Business Day it will mean
5:00 p.m., Eastern Time, on the next succeeding Business Day.

“Common Stock” means the common stock, $0.01 par value, of the Company.

“CVR Payment Amount” means an amount equal to seventy-five percent (75%) of the
Net Proceeds received by the Company in connection with a Legacy Transaction
occurring after the Effective Time. All payments of any CVR Payment Amount to
Holders pursuant to this Agreement shall be made, to the extent possible, in the
same form in which such payments were received by the Company. To the extent any
property other than cash is received by the Company as Net Proceeds, the Board
of Directors may determine in its discretion, within sixty (60) days of the
receipt of such property, to liquidate such property for cash, at which time the
Net Proceeds resulting from such liquidation shall be paid to the Holders.

“CVR Payment Date” means the date (if any and if ever) that a CVR Payment Amount
is payable by the Company to the Holders, which date will be established
pursuant to Section 2.4.

“CVR Register” has the meaning set forth in Section 2.3(b).

“CVR Registrar” has the meaning set forth in Section 2.3(b).

“CVRs” means the contingent value rights issued by the Company pursuant to this
Agreement.

 

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“Effective Time” means the effective time of the Merger, pursuant to the Merger
Agreement. The Company shall notify the Rights Agent of the Effective Time
promptly after the occurrence thereof.

“Holder” means a Person in whose name a CVR is registered in the CVR Register.

“Holder Representative” means the Holder Representative named in the first
paragraph of this Agreement, until a successor Holder Representative has become
such pursuant to the applicable provisions of this Agreement, and thereafter
“Holder Representative” will mean such successor Holder Representative.

“Legacy Assets” means the intellectual property rights and know-how and related
assets that currently are or have been used in the research and development of
the Company’s existing product candidates OXi4503 and CA4P (which is also known
as combretastatin A4-phosphate, fosbretabulin or fosbretabulin tromethamine and
ZYBRESTAT®), including all regulatory filings, clinical and non-clinical safety,
efficacy and pharmacokinetic data, and the intellectual property rights set
forth in Exhibit A attached hereto. The term “Legacy Assets” refers to the
OXi4503 and CA4P product candidates and related assets in their form and for
their currently contemplated uses at the time of the Merger Agreement and does
not include any rights or assets discovered after the Merger, whether through
enhancement of the product candidates on a standalone basis, or use of the
product candidates in combination with other molecules or products.

“Legacy Transaction” means the full or partial sale, license, transfer or other
disposition entered into by the Company with any Person with respect to any one
or more of the Legacy Assets, for which one or more definitive agreements shall
have been entered into prior to the Outside Date. For purposes of clarity, more
than one transaction can constitute a Legacy Transaction pursuant to this
Agreement.

“Net Proceeds” means the aggregate payments received by the Company after the
Effective Time in connection with a Legacy Transaction, once such payments
exceed $500,000, less (i) transaction costs and expenses, such as legal and
investment banker fees, incurred or payable by the Company after the Effective
Time in connection with the Legacy Transaction, (ii) patent maintenance fees,
and (iii) any applicable sales, income and other taxes in respect of the Legacy
Transaction that are incurred or payable after the Effective Time (net of any
Company tax benefits resulting from the payment of any CVR Payment Amount to
Holders pursuant to this Agreement). Amounts placed in escrow or earnout or
other contingent payments in connection with a Legacy Transaction will not be
considered Net Proceeds unless and until (and only to the extent that) such
amounts are released from escrow or otherwise paid to the Company.

“Non-Achievement Certificate” has the meaning set forth in Section 2.4(b).

“Notice of Objection” has the meaning set forth in Section 2.4(c).

“Objection Period” has the meaning set forth in Section 2.4(c).

“Officer’s Certificate” means a certificate signed by the chief executive
officer, president, chief financial officer or secretary of the Company, in his
or her capacity as such an officer, and delivered to the Rights Agent and the
Holder Representative.

“Outside Date” means the date that is four (4) years after the Effective Time.

“Permitted Transfer” means: (i) the transfer of any or all of the CVRs (upon the
death of the Holder) by will or intestacy; (ii) transfer by instrument to an
inter vivos or testamentary trust in which the CVRs are to be passed to
beneficiaries upon the death of the trustee; (iii) transfers made pursuant to a
court

 

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order of a court of competent jurisdiction (such as in connection with divorce,
bankruptcy or liquidation); (iv) if the Holder is a partnership or limited
liability company, a pro-rata distribution by the transferring partnership or
limited liability company to its partners or members, as applicable; (v) a
transfer made by operation of law (including a consolidation or merger) or in
connection with the dissolution, liquidation or termination of any corporation,
limited liability company, partnership or other entity; (vi) a transfer from a
participant’s account in a tax-qualified employee benefit plan to the
participant or to such participant’s account in a different tax-qualified
employee benefit plan or to a tax-qualified individual retirement account for
the benefit of such participant; or (vii) a transfer from a participant in a
tax-qualified employee benefit plan, who received the CVRs from such
participant’s account in such tax-qualified employee benefit plan, to such
participant’s account in a different tax-qualified employee benefit plan or to a
tax-qualified individual retirement account for the benefit of such participant.

“Person” means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or any agency or instrumentality
thereof.

“Record Date” means April 18, 2019.

“Rights Agent” means the Rights Agent named in the first paragraph of this
Agreement, until a successor Rights Agent has become such pursuant to the
applicable provisions of this Agreement, and thereafter “Rights Agent” will mean
such successor Rights Agent.

“Rights Agent Fee” means the agreed-upon fee of the Rights Agent to act in such
capacity pursuant to the terms of this Agreement.

“Surviving Person” has the meaning set forth in Section 6.1(a)(i).

ARTICLE II

CONTINGENT VALUE RIGHTS

2.1    Authority; Issuance of CVRs; Appointment of Rights Agent.

(a)    The Company has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated by
this Agreement. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any violation of any
provision of the Certificate of Incorporation or By-laws of the Company, or
(ii) result in any violation of any loan or credit agreement, note, mortgage,
indenture, lease, or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Company or its properties or assets
which violation, in the case of clause (ii), individually or in the aggregate,
would reasonably be expected to be material to the Company. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity (as defined in the Merger Agreement) is required
by or with respect to the Company in connection with the execution and delivery
of this Agreement by the Company or the consummation by Company of the
transactions contemplated hereby.

(b)    One CVR will be issued with respect to each share of Common Stock that is
outstanding as of 5:01 p.m. Eastern Time on the Record Date.

 

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(c)    The Company hereby appoints American Stock Transfer & Trust Company, LLC
as the Rights Agent to act as rights agent for the Company in accordance with
the instructions hereinafter set forth in this Agreement, and American Stock
Transfer & Trust Company, LLC hereby accepts such appointment.

2.2    Nontransferable. The CVRs may not be sold, assigned, transferred,
pledged, encumbered or in any other manner transferred or disposed of, in whole
or in part, other than through a Permitted Transfer.

2.3    No Certificate; Registration; Registration of Transfer; Change of
Address.

(a)    The CVRs will be issued in book-entry form only and will not be evidenced
by a certificate or other instrument.

(b)    The Rights Agent will keep a register (the “CVR Register”) for the
registration of CVRs. The Rights Agent is hereby initially appointed “CVR
Registrar” for the purpose of registering CVRs and permitted transfers of CVRs
as herein provided. Upon any change in the identity of the Rights Agent, the
successor Rights Agent will automatically also become the successor CVR
Registrar.

(c)    Subject to the restrictions on transferability set forth in Section 2.2,
every request made to transfer a CVR must be in writing and accompanied by a
written instrument or instruments of transfer and any other requested
documentation in a form reasonably satisfactory to the Company and the CVR
Registrar, duly executed by the registered Holder or Holders thereof or by the
duly appointed legal representative thereof or by a duly authorized attorney,
including the evidence of authority of the party presenting the CVR for transfer
which authority may include, if applicable, a signature guarantee from an
eligible guarantor institution participating in a signature guarantee program
approved by the Securities Transfer Association. A request for a transfer of a
CVR must be accompanied by such documentation establishing that the transfer is
a Permitted Transfer as may be reasonably requested by the Company and/or the
CVR Registrar, if appropriate. Upon receipt of such written request and
materials, the CVR Registrar will, subject to its reasonable determination that
the transfer instrument is in proper form and the transfer otherwise complies
with the other terms and conditions herein, register the transfer of the CVRs in
the CVR Register. All duly transferred CVRs registered in the CVR Register will
be the valid obligations of the Company, evidencing the same right and will
entitle the transferee to the same benefits and rights under this Agreement as
those previously held by the transferor. No transfer of a CVR will be valid
until registered in the CVR Register, and any transfer not duly registered in
the CVR Register will be void and invalid. All costs and expenses related to any
transfer or assignment of the CVRs (including the cost of any transfer tax) will
be the responsibility of the transferor.

(d)    A Holder (or an authorized representative thereof) may make a request to
the CVR Registrar to change such Holder’s address of record in the CVR Register.
Upon receipt of such request, the CVR Registrar will promptly record the change
of address in the CVR Register.

2.4    Payment Procedures.

(a)    Promptly following the occurrence of a Legacy Transaction as to which the
Holders are entitled to receive a CVR Payment Amount, but in no event later than
thirty (30) days after the occurrence of such a Legacy Transaction, and within
thirty (30) days after the end of any calendar quarter in which the Company has
received Net Proceeds, the Company will deliver to the Holder Representative and
the Rights Agent a certificate (the “Achievement Certificate”), certifying that
the Holders are entitled to receive a CVR Payment Amount (and setting forth the
calculation of the CVR Payment Amount).

 

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(b)    If no Legacy Transaction has been entered into and no Net Proceeds have
been received on or before the Outside Date, then, as soon as reasonably
practicable after the Outside Date, but in no event later than thirty (30) days
after the Outside Date, the Company will deliver to the Holder Representative
and the Rights Agent a certificate (the “Non-Achievement Certificate”), stating
that no Legacy Transaction has been entered into and no Net Proceeds have been
received prior to the Outside Date.

(c)    Within thirty (30) calendar days after distribution by the Rights Agent
of a Non-Achievement Certificate (the “Objection Period”), the Holder
Representative may deliver a written notice to the Company specifying that the
Holder Representative objects to the determination of the Company set forth in
the Non-Achievement Certificate (a “Notice of Objection”) and stating the reason
upon which the Holder Representative has determined that a Legacy Transaction
has been entered into or that Net Proceeds have been received on or before the
Outside Date. Any dispute arising from a Notice of Objection will be resolved in
accordance with the procedure set forth in Section 8.10, which decision will be
binding on the parties hereto and every Holder.

(d)    If a Notice of Objection has not been delivered to the Company within the
Objection Period, then the Holders will have no right to receive the CVR Payment
Amount, and the Company and the Rights Agent will have no further obligations
with respect to the CVR Payment Amount.

(e)    If the Company delivers an Achievement Certificate to the Holder
Representative and the Rights Agent or if the CVR Payment Amount is determined
to be payable pursuant to Section 2.4(c) above, the Company will establish a CVR
Payment Date that is the earlier of (i) thirty (30) days after the end of the
Company’s fiscal quarter during which the Achievement Certificate is delivered
or (ii) thirty (30) days after the date of final determination pursuant
to Section 2.4(c) above, as applicable. At least five (5) Business Days before
such CVR Payment Date, the Company will cause the CVR Payment Amount to be
delivered to the Rights Agent, and in turn, on the CVR Payment Date, the Rights
Agent will distribute the CVR Payment Amount to the Holders (each Holder being
entitled to receive its pro rata share of the CVR Payment Amount based on the
number of CVRs held (as of the date of the Achievement Certificate or the date
of final determination pursuant to Section 2.4(c) above, as applicable) by such
Holder as reflected on the CVR Register) (i) by check mailed to the address of
each such respective Holder as reflected in the CVR Register as of the Close of
Business on the last Business Day before such CVR Payment Date, or, (ii) with
respect to any Holder who has provided the Rights Agent with wire transfer
instructions meeting the Rights Agent’s requirements, by wire transfer of
immediately available funds to such account.

(f)    The Company will be entitled to deduct and withhold, or cause to be
deducted or withheld, from each CVR Payment Amount otherwise payable pursuant to
this Agreement, such amounts as the Company is required to deduct and withhold
with respect to the making of such payment under the Internal Revenue Code, or
any provision of state or local tax law. To the extent that amounts are so
withheld or paid over to or deposited with the relevant governmental entity,
such withheld amounts will be treated for all purposes of this Agreement as
having been paid to the Holder in respect of which such deduction and
withholding was made.

(g)    Subject to prior execution and delivery by the Holder Representative of a
reasonable and customary confidentiality and market stand-off agreement, the
Company will promptly furnish to the Holder Representative all information and
documentation in connection with this Agreement and the CVRs that the Holder
Representative may reasonably request in connection with the determination of
whether a Legacy Transaction has occurred. The Company will promptly furnish to
the Rights Agent all information and documentation in connection with this
Agreement and the CVRs that the Rights Agent may reasonably request in order to
perform under this Agreement.

 

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(h)    The Company acknowledges that the bank accounts maintained by the Rights
Agent in connection with the services provided under this Agreement will be in
the Rights Agent’s name and that the Rights Agent may receive investment
earnings in connection with the investment at the Rights Agent’s risk and for
its benefit of funds held in those accounts from time to time.

2.5    No Voting, Dividends or Interest; No Equity or Ownership Interest in the
Company.

(a)    The CVRs will not have any voting or dividend rights, and interest will
not accrue on any amounts payable on the CVRs to any Holder.

(b)    The CVRs will not represent any equity or ownership interest in the
Company.

2.6    Company Obligation.

Notwithstanding anything else in this Agreement to the contrary, the Company’s
only obligation in connection with (a) any continued operation of, development
of or investment in the Legacy Assets, (b) pursuing, negotiating or entering
into one or more Legacy Transactions, and (c) the terms and conditions of any
Legacy Transaction will be to act or forbear from acting in good
faith; provided, however, that to the extent that the Company makes a decision
to pursue, engage in, negotiate or enter into a Legacy Transaction, the Company
will use commercially reasonable efforts to seek to ensure that such Legacy
Transaction is entered into prior to the Outside Date.

ARTICLE III

THE RIGHTS AGENT

3.1    Certain Duties and Responsibilities.

(a)    The Rights Agent will not have any liability for any actions taken or not
taken in connection with this Agreement, except to the extent of its willful
misconduct, bad faith or gross negligence. No provision of this Agreement will
require the Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers. Notwithstanding anything contained
herein to the contrary, the Rights Agent’s aggregate liability under this
Agreement, or from all services provided or omitted to be provided under this
Agreement, whether in contract, or in tort, or otherwise, is limited to, and
shall not exceed, the amounts paid hereunder by the Company to the Rights Agent
as fees and charges, but not including reimbursable expenses.

(b)    The Holder Representative may direct the Rights Agent to act on behalf of
the Holders in enforcing any of its or their rights hereunder, including the
delivery of any Notice of Objection and negotiation or arbitration pursuant
to Section 8.10. The Rights Agent will be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
material expense unless the Holder Representative will furnish the Rights Agent
with reasonable security and indemnity for any costs and expenses that may be
incurred. All rights of action under this Agreement may be enforced by the
Rights Agent, and any action, suit or proceeding instituted by the Rights Agent
will be brought in its name as Rights Agent, and any recovery of judgment will
be for the ratable benefit of all the Holders, as their respective rights or
interests may appear.

3.2    Certain Rights of Rights Agent. The Rights Agent undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement, and no implied covenants or obligations will be read into this
Agreement against the Rights Agent. In addition:

 

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(a)    the Rights Agent may rely and will be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;

(b)    whenever the Rights Agent will deem it desirable that a matter be proved
or established before taking, suffering or omitting any action hereunder, the
Rights Agent may, in the absence of willful misconduct, bad faith or gross
negligence on its part, rely upon an Officer’s Certificate;

(c)    the Rights Agent may engage and consult with counsel of its selection and
the written advice of such counsel or any opinion of counsel will be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;

(d)    in the event of arbitration, the Rights Agent may engage and consult with
tax experts, valuation firms and other experts and third parties that it, in its
sole and absolute discretion, deems appropriate or necessary to enable it to
discharge its duties hereunder;

(e)    the permissive rights of the Rights Agent to do things enumerated in this
Agreement will not be construed as a duty;

(f)    the Rights Agent will not be required to give any note or surety in
respect of the execution of such powers or otherwise in respect of the premises;

(g)    the Company agrees to indemnify the Rights Agent for, and hold the Rights
Agent harmless against, any loss, liability, claim, demands, suits or expense
(in each case pertaining to the Rights Agent’s own account only) arising out of
or in connection with the Rights Agent’s duties under this Agreement, including
the costs and expenses of defending the Rights Agent against any claims,
charges, demands, suits or loss, unless such loss has been determined by a court
of competent jurisdiction to be a result of the Rights Agent’s willful
misconduct, bad faith or gross negligence; and

(h)    the Company agrees (i) to pay the fees and expenses of the Rights Agent
in connection with this Agreement, as set forth on Schedule 1 hereto, and
(ii) to reimburse the Rights Agent for all taxes and governmental charges,
reasonable expenses and other charges of any kind and nature incurred by the
Rights Agent in the execution of this Agreement. The Rights Agent will also be
entitled to reimbursement from the Company for all reasonable and necessary
out-of-pocket expenses (including reasonable fees and expenses of the Rights
Agent’s counsel and agent) paid or incurred by it in connection with the
administration by the Rights Agent of its duties hereunder. An invoice for the
Rights Agent Fee will be rendered a reasonable time before, and paid on, the
effective date of the applicable transaction. An invoice for any out-of-pocket
expenses and per item fees realized will be rendered and payable within thirty
(30) calendar days after receipt by the Company. The Company agrees to pay to
Rights Agent any amounts, including fees and expenses, payable in favor of the
Rights Agent in connection with any dispute, resolution or arbitration arising
under or in connection with the Agreement; and any fees and expenses, payable by
the Company in favor of the Rights Agent or payable in favor of the Company
related to such dispute, resolution or arbitration will be offset against the
CVR Payment Amount, if any, or any payment to be made thereafter under this
Agreement.

3.3    Resignation and Removal; Appointment of Successor.

 

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(a)    The Rights Agent may resign at any time by giving written notice thereof
to the Company specifying a date when such resignation will take effect, which
notice will be sent at least thirty (30) days before the date so specified.

(b)    If the Rights Agent will resign, be removed or become incapable of
acting, the Company, by way of a Board Resolution, will promptly appoint a
qualified successor Rights Agent who may (but need not) be a Holder but will not
be an officer of the Company. The successor Rights Agent so appointed will,
forthwith upon its acceptance of such appointment in accordance with
this Section 3.3(b), become the successor Rights Agent.

(c)    The Company will give notice of each resignation and each removal of a
Rights Agent and each appointment of a successor Rights Agent by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders as
their names and addresses appear in the CVR Register and by delivering notice to
the Holder Representative. Each notice will include the name and address of the
successor Rights Agent. If the Company fails to send such notice within five
(5) Business Days after acceptance of appointment by a successor Rights Agent,
upon the Company’s request the successor Rights Agent will cause such notice to
be mailed at the expense of the Company.

3.4    Acceptance of Appointment by Successor. Every successor Rights Agent
appointed hereunder will execute, acknowledge and deliver to the Company and to
the retiring Rights Agent an instrument accepting such appointment and a
counterpart of this Agreement, and thereupon such successor Rights Agent,
without any further act, deed or conveyance, will become vested with all the
rights, powers, trusts and duties of the retiring Rights
Agent; provided, however, that upon the request of the Company or the successor
Rights Agent, such retiring Rights Agent will cooperate in the transfer of all
relevant data, including the CVR Register, to the successor Rights Agent.

ARTICLE IV

COVENANTS

4.1    List of Holders. The Company will furnish or cause to be furnished to the
Holder Representative and the Rights Agent the names, addresses and
shareholdings of registered holders of Common Stock as of 5:01 p.m. Eastern Time
on the Record Date. The Company will promptly furnish an electronic copy of the
CVR Register to the Holder Representative upon written request from the Holder
Representative.

4.2    Payment of CVR Payment Amount. The Company will duly and promptly
transfer the CVR Payment Amounts, if any, to the Rights Agent to be distributed
to the Holders in the manner provided for in Section 2.4 and in accordance with
the terms of this Agreement.

ARTICLE V

AMENDMENTS

5.1    Amendments Without Consent of Holder Representative.

(a)    Without the consent of the Holder Representative or the Rights Agent, the
Company, when authorized by a Board Resolution, at any time and from time to
time, may enter into one or more amendments hereto, for any of the following
purposes:

(i)    to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein in a
transaction contemplated by Section 6.1 hereof; or

 

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(ii)    to evidence the termination of the CVR Registrar and the succession of
another Person as a successor CVR Registrar and the assumption by any successor
of the obligations of the CVR Registrar herein.

(b)    Without the consent of the Holder Representative, the Company, when
authorized by a Board Resolution, together with the Rights Agent, in the Rights
Agent’s sole and absolute discretion, may at any time and from time to time,
enter into one or more amendments hereto:

(i)    to evidence the succession of another Person as a successor Rights Agent
and the assumption by any successor of the covenants and obligations of the
Rights Agent herein;

(ii)    to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as the Board of Directors and the Rights
Agent will consider to be for the protection of the Holders;

(iii)    to cure any ambiguity, to correct or supplement any provision herein
that may be defective or inconsistent with any other provision
herein; provided, however, that in each case, such provisions will not
materially adversely affect the interests of the Holders; or

(iv)    to add, eliminate or change any provision of this Agreement unless such
addition, elimination or change is adverse to the interests of the Holders.

(c)    Promptly after the execution by the Company and the Rights Agent of any
amendment pursuant to the provisions of this Section 5.1, the Company will
deliver a notice thereof to the Holder Representative, setting forth in general
terms the substance of such amendment.

5.2    Amendments with Consent of Holder Representative. Subject
to Section 5.1 (which amendments pursuant to Section 5.1 may be made without the
consent of the Holder Representative), the Company, when authorized by a Board
Resolution, and the Rights Agent and the Holder Representative may enter into
one or more amendments hereto for the purpose of adding, eliminating or changing
any or all provisions of this Agreement.

5.3    Execution of Amendments. In executing any amendment permitted by
this Article V, the Rights Agent will be entitled to receive, and will be fully
protected in relying upon, an opinion of counsel of the Company, at Company’s
sole expense, stating that the execution of such amendment is authorized or
permitted by this Agreement. The Rights Agent may, but is not obligated to,
enter into any such amendment that affects the Rights Agent’s own rights,
privileges, covenants or duties under this Agreement or otherwise.

5.4    Effect of Amendments. Upon the execution of any amendment under
this Article V, this Agreement will be modified in accordance therewith, such
amendment will form a part of this Agreement for all purposes and every Holder
will be bound thereby.

5.5    Amendment Prior to Effective Time. This Agreement may not be amended
prior to the Effective Time without the prior written consent of Oncotelic.

ARTICLE VI

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

6.1    Effect of Merger or Consolidation

 

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(a)    Except as contemplated by the Merger, the Company will not consolidate
with or merge into any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, unless:

(i)    the Person formed by such consolidation or into which the Company is
merged or the Person that acquires by conveyance or transfer, or that leases,
the properties and assets of the Company substantially as an entirety (the
“Surviving Person”) expressly assumes payment (if and to the extent required
hereunder) of amounts on all the CVRs and the performance of every duty and
covenant of this Agreement on the part of the Company to be performed or
observed; and

(ii)    the Company has delivered to the Holder Representative and the Rights
Agent an Officer’s Certificate, stating that such consolidation, merger,
conveyance, transfer or lease complies with this Article VI and that all
conditions precedent herein provided for relating to such transaction have been
complied with.

(b)    In the event the Company conveys, transfers or leases its properties and
assets substantially as an entirety in accordance with the terms and conditions
of this Section 6.1, the Surviving Person will be liable for the payment of the
CVR Payment Amount and the performance of every duty and covenant of this
Agreement on the part of the Company to be performed or observed.

(c)    Notwithstanding the foregoing, in the event the Company conveys,
transfers or leases its properties and assets substantially as an entirety in
accordance with the terms and conditions of this Section 6.1 or a Change of
Control shall occur, then the Company will have the right to purchase all, but
not less than all, of the outstanding CVRs for an amount equal to their then
fair market value as determined in good faith by an independent third party
appraisal firm retained by the Company. Within sixty (60) calendar days after
distribution by the Rights Agent of the purchase price for the CVRs as
determined in accordance with the terms of this Section 6.1(c), the Holder
Representative may deliver a written notice to the Company specifying that the
Holder Representative objects to the determination of the purchase price for the
CVRs as determined in accordance with the terms of this Section 6.1(c). Any
dispute arising from such an objection will be resolved in accordance with the
procedure set forth in Section 8.10, which decision will be binding on the
parties hereto and every Holder (including the Holders not participating
therein).

6.2    Successor Substituted. Upon any consolidation of or merger by the Company
with or into any other Person, or any conveyance, transfer or lease of the
properties and assets substantially as an entirety to any Person in accordance
with Section 6.1, the Surviving Person will succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Agreement with
the same effect as if the Surviving Person had been named as the Company herein,
and thereafter the predecessor Person will be relieved of all obligations and
covenants under this Agreement and the CVRs.

ARTICLE VII

THE HOLDER REPRESENTATIVE

7.1    Appointment. Effective upon the issuance of the CVRs under this terms of
this Agreement, and without any further act of any of Holders, the Holder
Representative is appointed as the representative of the Holders and as the
attorney-in-fact and agent for and on behalf of each Holder for purposes of this
Agreement and will take such actions to be taken by the Holder Representative
under this Agreement and such other actions on behalf of such Holders as it may
deem necessary or appropriate in connection with or to consummate the
transactions contemplated hereby, including (i) executing and delivering this
Agreement and any other ancillary documents and negotiating and executing any
amendments, modifications, waivers or changes thereto as to which the Holder
Representative, in its sole

 

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discretion, has consented (provided that any waiver or amendment that adversely
and disproportionately affects the rights or obligations of one or more Holders
as compared to other Holders will require the prior written consent of a
majority in interest of the disproportionately affected Holders), (ii) agreeing
to, negotiating, entering into settlements and compromises of, complying with
orders of courts with respect to, and otherwise administering and handling any
claims under this Agreement on behalf of such Holders, and (iii) taking all
other actions that are either necessary or appropriate in the judgment of the
Holder Representative for the accomplishment of the foregoing or contemplated by
the terms of this Agreement. The Holder Representative hereby accepts such
appointment and agrees to serve as such without compensation. The appointment of
the Holder Representative as each Holder’s attorney-in-fact revokes any power of
attorney heretofore granted that authorized any other Person to represent such
Holder with regard to this Agreement and any other agreements or documents
executed or delivered in connection with this Agreement. The Holder
Representative is the sole and exclusive representative of each of the Holders
for any purpose provided for by this Agreement.

7.2    Actions of Holder Representative.

(a)    A decision, act, consent or instruction of the Holder Representative
hereunder will constitute a decision, act, consent or instruction of all Holders
and will be final, binding and conclusive upon each such Holder, and the Company
and the Rights Agent may rely upon any such decision, act, consent or
instruction of the Holder Representative as being the decision, act, consent or
instruction of each and every such Holder. The Company and the Rights Agent will
be relieved from any liability to any Person for any acts done by them in
accordance with such decision, act, consent or instruction of the Holder
Representative.

(b)    The Holder Representative will incur no liability with respect to any
action taken or suffered by any Holder in reliance upon any notice, direction,
instruction, consent, statement or other document believed by such Holder
Representative to be genuine and to have been signed by such Holder (and will
have no responsibility to determine the authenticity thereof), nor for any other
action or inaction, except the gross negligence, bad faith or willful misconduct
of the Holder Representative. In all questions arising under this Agreement, the
Holder Representative may rely on the advice of outside counsel, and the Holder
Representative will not be liable to any Holder for anything done, omitted or
suffered in good faith by Holder Representative based on such advice.

(c)    The Holders will severally (on a pro rata basis, based on the number of
CVRs held by each Holder) but not jointly indemnify the Holder Representative
and hold the Holder Representative harmless against any loss, liability or
expense incurred without gross negligence, bad faith or willful misconduct on
the part of the Holder Representative and arising out of or in connection with
the acceptance or administration of the Holder Representative’s duties
hereunder, including the reasonable fees and expenses of any legal counsel or
other advisors reasonably retained by the Holder Representative.

(d)    In connection with providing services under this Agreement, the Holder
Representative will be reimbursed by the Company for all reasonable fees and
expenses incurred in providing such services. Any such fees and expenses will be
paid by the Company within thirty (30) days of the receipt of an invoice from
the Holder Representative and will be offset against the CVR Payment Amount, if
any.

7.3    Removal; Appointment of Successor.

(a)    At any time Holders representing at least a majority of the outstanding
CVRs may, by written consent, appoint another Person as Holder Representative.
Notice together with a copy of the written consent appointing such Person and
bearing the signatures of Holders of at least a majority of the

 

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outstanding CVRs must be delivered to the Company and the Rights Agent not less
than ten (10) days prior to such appointment. Such appointment will be effective
upon the later of the date indicated in the consent or the date ten (10) days
after such consent is received by the Company and the Rights Agent.

(b)    If the Holder Representative becomes unable or unwilling to continue in
his or its capacity as the Holder Representative, or if the Holder
Representative resigns as a Holder Representative, the Holder Representative may
appoint a new representative as the Holder Representative. If the Holder
Representative is unable or unwilling to appoint a successor Holder
Representative, then the Board of Directors of the Company shall appoint a
successor Holder Representative. Notice and a copy of the written consent
appointing such new representative must be delivered to the Company and the
Rights Agent. Such appointment will be effective upon the later of the date
indicated in the consent or the date ten (10) days after such consent is
received by the Company and the Rights Agent.

7.4    Grant of Authority. The grant of authority provided for in this
Article VII (i) is coupled with an interest and will be irrevocable and survive
the death, incompetency, bankruptcy or liquidation of any Holder, and (ii) will
survive the consummation of the Merger. The provisions of this Article VII will
be binding upon the executors, heirs, legal representatives, successors and
assigns of each Holder, and any references in this Agreement to any Holder or
the Holders will mean and include the successors to such Holder’s rights
hereunder, whether pursuant to testamentary disposition, the laws of descent and
distribution or otherwise.

ARTICLE VIII

OTHER PROVISIONS OF GENERAL APPLICATION

8.1    Notices to Rights Agent, Company and Holder Representative. Subject
to Section 8.2, all notices, requests, demands, claims and other communications
that are required to be or may be given under this Agreement must be in writing
and will be deemed to have been effectively given: (a) upon personal delivery to
the recipient; (b) when sent by e-mail transmission, if sent during normal
business hours of the recipient; if not, then on the next Business Day; or
(c) one Business Day after deposit with a nationally recognized overnight
courier, specifying next-day delivery, with written verification of receipt, in
each case to the intended recipient at the following addresses:

 

  (a)

if to the Company or Oncotelic, to

Oncotelic, Inc.

29397 Agoura Road Suite 107

Agoura Hills, CA 91301

Attn: Vuong Trieu

Email:

with a copy to

Sheppard Mullin Richter & Hampton LLP

12275 El Camino Real Suite 200

San Diego, CA 92130

Attn: James A. Mercer III, Esq.

Email:

 

  (b)

if to the Rights Agent, to

American Stock Transfer & Trust Company, LLC

 

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6201 15th Avenue

Brooklyn, New York 11219

Attention: Relationship Management

with a copy to

American Stock Transfer & Trust Company, LLC

48 Wall Street, 22nd Floor

New York, New York 10005

Attention: Legal Department; and

 

  (c)

if to the Holder Representative, to

Matthew M. Loar

c/o Oncotelic, Inc.

29397 Agoura Road Suite 107

Agoura Hills, CA 91301

Email:

or to such other address as either party has furnished to the other by notice
given in accordance with this Section 8.1.

8.2    Notice to Holders. Where this Agreement provides for notice to Holders,
such notice will be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his, her or its address as it appears in the CVR
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder will affect the
sufficiency of such notice with respect to other Holders.

8.3    Entire Agreement. This Agreement represents the entire understanding of
the parties hereto with reference to the CVRs and this Agreement supersedes any
and all other oral or written agreements made with respect to the CVRs. No party
has relied on any other express or implied representation or warranty, either
written or oral in connection with its entry into this Agreement, including any
representation or warranty arising under statute or otherwise under law.

8.4    Legal Holidays. If a CVR Payment Date is not a Business Day, then,
notwithstanding any provision of this Agreement to the contrary, any payment
required to be made in respect of the CVRs on such date need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the CVR Payment Date.

8.5    Force Majeure. Notwithstanding anything to the contrary contained herein,
the Rights Agent shall not be liable for any delays or failures in performance
resulting from acts beyond its reasonable control including, without limitation,
acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions,
interruptions or malfunctions of computer facilities, or loss of data due to
power failures or mechanical difficulties with information storage or retrieval
systems, labor difficulties, war or civil unrest.

8.6    Assignment. Neither this Agreement nor any right, interest or obligation
hereunder may be assigned by any of the parties hereto without the prior written
consent of the other parties hereto; provided, however, that the Rights Agent
may, without further consent of the other parties hereto,

 

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assign any of its rights and obligations hereunder to any affiliated transfer
agent registered under Rule 17Ac2-1 promulgated under the Securities Exchange
Act of 1934, as amended.

8.7    Third Party Beneficiaries. This Agreement will be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, will give to
any Person (other than the parties hereto, the Holders and their permitted
successors and assigns hereunder) any benefit or any legal or equitable right,
remedy or claim under this Agreement or under any covenant or provision herein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto, the Holders and their permitted successors and assigns.

8.8    Termination. This Agreement will terminate and be of no further force or
effect, and the parties hereto will have no liability hereunder, upon the
earliest to occur of (a) the payment of the last possible CVR Payment Amount due
hereunder, (b) if a Notice of Objection is not delivered within the Objection
Period, the expiration of the Objection Period or (c) in the event of the
delivery of a Notice of Objection, either (i) the final determination in
accordance with this Agreement that no Legacy Transaction has been achieved and
no Net Proceeds have been received on or prior to the Outside Date or (ii) the
fulfillment of any payment obligation required pursuant to a final determination
made in accordance with this Agreement.

8.9    Survival. Notwithstanding anything in this Agreement to the contrary, all
provisions regarding indemnification, warranty, liability and limits thereon,
and confidentiality and protection of proprietary rights and trade secrets shall
survive the termination or expiration of this Agreement.

8.10    Governing Law. This Agreement and the CVRs will be governed by the laws
of the State of Delaware without reference to principles of conflicts of laws
that would result in the application of the laws of any other jurisdiction.

8.11    Remedies. The Holders will not have any rights or remedies with respect
to the CVRs except as expressly set forth herein.

8.12    Arbitration.

(a)    Before any arbitration pursuant to Section 8.10(b), the Company, the
Rights Agent and the Holder Representative will negotiate in good faith for a
period of thirty (30) days to resolve any controversy or claim arising out of or
relating to this Agreement or the breach thereof.

(b)    Any claim which the Holders have the right to assert hereunder (including
any claims brought by the Holder Representative on behalf of the Holders) will
be settled by arbitration administered by the American Arbitration Association
under its Commercial Arbitration Rules, and judgment on the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof. The
Company, the Rights Agent and/or the Holder Representative may initiate an
arbitration for any matter relating to this Agreement. However, in the event of
a dispute arising from the delivery of a Notice of Objection, the sole matter to
be settled by arbitration will be whether a Legacy Transaction has occurred or
Net Proceeds have been received on or before the Outside Date. The number of
arbitrators will be one, and such arbitrator will be selected by the American
Arbitration Association. The place of the arbitration will be San Francisco,
California. The arbitrator will be a lawyer or retired judge or accountant with
experience in the biopharmaceutical industry and with mergers and acquisitions.
Except as may be required by law, neither a party nor the arbitrator may
disclose the existence, content or results of any arbitration hereunder without
the prior written consent of the other parties (provided that the Holder
Representative may disclose to the Holders any such information without the
consent of the Company). Any award payable in favor of the Holders or the Rights
Agent as a result of arbitration will be distributed to the Holders on a pro
rata

 

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basis, based on the number of CVRs held by each Holder. The Company will pay all
fees and expenses of the arbitration, including the costs and expenses billed by
the arbitrator in connection with the performance of its duties described
herein; provided, however, that if the arbitrator rules in favor of the Company,
the arbitrator’s fees and expenses will be offset against the CVR Payment
Amount, if any, or any payment to be made thereafter hereunder. Each party will
be responsible for its own attorney fees, expenses and costs of investigation.

8.13    Confidentiality.

(a)    Definition. “Confidential Information” shall mean any and all technical,
scientific or business information relating to a party, including, without
limitation, financial, marketing and product development information,
stockholder information (including any non-public information of such
stockholder), and proprietary information that is disclosed or otherwise becomes
known to the other party or its affiliates, agents or representatives before or
during the term of this Agreement. Confidential Information constitutes trade
secrets and is of great value to the owner (or its affiliates). Confidential
Information shall not include any information that is: (a) already known to the
other party or its affiliates at the time of the disclosure, provided that such
prior knowledge can be substantiated by the written records of such party;
(b) publicly known at the time of the disclosure or becomes publicly known
through no wrongful act or failure of the other party; (c) subsequently
disclosed to the other party or its affiliates on a non-confidential basis by a
third party not having a confidential relationship with the owner and which
rightfully acquired such information; or (d) independently developed by one
party without access to the Confidential Information of the other, provided that
such independent development can be substantiated by the written records of such
party. This Agreement, including all of its terms and conditions, will not be
deemed to be Confidential Information and may be publicly disclosed by the
Company and Oncotelic.

(b)    Use and Disclosure. All Confidential Information of a party will be held
in confidence by the other party with at least the same degree of care as such
party protects its own confidential or proprietary information of like kind and
import, but not less than a reasonable degree of care. Neither party will
disclose in any manner Confidential Information of the other party in any form
to any person or entity without the other party’s prior consent. However, each
party may disclose relevant aspects of the other party’s Confidential
Information to its officers, affiliates, agents, subcontractors and employees to
the extent reasonably necessary to perform its duties and obligations under this
Agreement. Without limiting the foregoing, each party will implement such
physical and other security measures and controls as are necessary to protect
(a) the security and confidentiality of Confidential Information; (b) against
any threats or hazards to the security and integrity of Confidential
Information; and (c) against any unauthorized access to or use of Confidential
Information. To the extent that a party delegates any duties and
responsibilities under this Agreement to an agent or other subcontractor, the
party ensures that such agent and subcontractor are contractually bound to
confidentiality terms consistent with the terms of this Section 8.13.

(c)    Required or Permitted Disclosure. In the event that any requests or
demands are made for the disclosure of Confidential Information, other than
requests to Rights Agent for stockholder records pursuant to standard subpoenas
from state or federal government authorities (e.g., divorce and criminal
actions), the party receiving such request will promptly notify the other party
to secure instructions from an authorized officer of such party as to such
request and to enable the other party the opportunity to obtain a protective
order or other confidential treatment, unless such notification is otherwise
prohibited by law or court order. Each party expressly reserves the right,
however, to disclose Confidential Information to any person whenever it is
advised by counsel that it may be held liable for the failure to disclose such
Confidential Information or if required by law or court order.

(d)    Unauthorized Disclosure. As may be required by law and without limiting
any party’s rights in respect of a breach of this Section 8.13, each party will
promptly:

 

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(i)    notify the other party in writing of any unauthorized possession, use or
disclosure of the other party’s Confidential Information by any person or entity
that may become known to such party;

(ii)    furnish to the other party full details of the unauthorized possession,
use or disclosure; and

(iii)    use commercially reasonable efforts to prevent a recurrence of any such
unauthorized possession, use or disclosure of Confidential Information.

(e)    Costs. Each party will bear the costs it incurs as a result of compliance
with this Section 8.13.

8.14    Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall be deemed to
be one and the same agreement. Delivery of a signed Agreement by reliable
electronic means, including facsimile, email, or any electronic signature
complying with the U.S. federal ESIGN Act of 2000 (including DocuSign) shall be
an effective method of delivering the executed Agreement. This Agreement may be
stored by electronic means and either an original or an electronically stored
copy of this Agreement can be used for all purposes, including in any proceeding
to enforce the rights and/or obligations of the parties to this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its duly authorized officers as of the day and year first above
written.

 

MATEON THERAPEUTICS, INC. By:  

/s/ William D. Schwieterman

William D. Schwieterman Chief Executive Officer

 

ONCOTELIC, INC.

By:  

/s/ Vuong Trieu

Vuong Trieu Chief Executive Officer AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

By:  

/s/ Michael A. Nespoli

Name:   Michael A. Nespoli Title:   Executive Director MATTHEW M. LOAR

/s/ Matthew M. Loar

 

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