Blueprint





  Exhibit 10.5











 



NOTE CONVERSION AGREEMENT


 


This Note Conversion Agreement (this
“Agreement”) is entered into as of August 29, 2017, by
and among GT Biopharma, Inc., a Delaware corporation (the
“Company”), and the parties listed
on Schedule
A hereto.


 


WHEREAS,
the Company and Bristol Investment Fund, Ltd.
(“Bristol”) are party to that certain Securities
Purchase Agreement dated October 25, 2006, as amended from time to
time (the “2006 Purchase Agreement”), pursuant to which
the Company issued 0% Convertible Debentures (the “2006
Debentures”);


 


WHEREAS,
the Company and Theorem Group LLC (“Theorem”) are party
to that certain Securities Purchase Agreement dated October 1,
2009, as amended from time to time (the “2009 Purchase
Agreement”), pursuant to which the Company issued 0%
Convertible Debentures (the “2009
Debentures”);


 


WHEREAS,
Farhad Rostamian, Leslie Canter (“Canter”), (the
foregoing individuals and entities, collectively, the “June
2011 Investors”) and the Company are party to that certain
Securities Purchase Agreement dated June 7, 2011, as amended from
time to time (the “June 2011 Purchase Agreement”),
pursuant to which the Company issued 12% Convertible Debentures
(the “June 2011 Debentures”);


 


WHEREAS,
each of Alpha Capital Anstalt (“Alpha”), Adam Cohen,
Canter (the foregoing individuals and entities, collectively, the
“November 2011 Investors”) and the Company are party to
that certain Securities Purchase Agreement dated November 13, 2011,
as amended from time to time (the “November 2011 Purchase
Agreement”), pursuant to which the Company issued 8%
Convertible Debentures (the “November
2011Debentures”);


 


WHEREAS,
each of Ho’okipa Capital, Howard Knee, (the foregoing
individuals and entities, collectively, the (“March 2012
Investors”) and the Company are party to that certain
Securities Purchase Agreement dated March 1, 2012, as amended from
time to time (the “March 2012 Purchase Agreement”) and
Transaction Documents (as defined in the 2012 Purchase Agreement),
pursuant to which the Company issued 8% Convertible Debentures (the
“March 2012 Debentures”);


 


WHEREAS,
each of Alpha, Bristol (the foregoing individuals and entities,
collectively, the (“May 2012 Investors”) and the
Company are party to that certain Securities Purchase Agreement
dated May 22, 2012, as amended from time to time (the “May
2012 Purchase Agreement”) and Transaction Documents (as
defined in the 2012 Purchase Agreement), pursuant to which the
Company issued 8% Convertible Debentures (the “May 2012
Debentures”);


 


WHEREAS,
each of Alpha, SV Booth Investment III (the “SV Booth”)
(the foregoing individuals and entities, collectively, the
“December 2012 Note Holders”) and the Company are party
to that certain Note Purchase Agreements dated December 3, 2012, as
amended from time to time (the “December 2012 Purchase
Agreement”), pursuant to which the Company issued Demand
Promissory Notes (the “December 2012
Notes”);


 


WHEREAS,
each of SV Booth, Theorem, (the foregoing individuals and entities,
collectively, the “10% Two-Year Senior Secured Convertible
Debenture Holders”) and the Company are party to that certain
Note Purchase Agreements dated between October 2013 and April 2014,
as amended from time to time (the “10% Two-Year Senior
Secured Convertible Debenture Agreement”), pursuant to which
the Company issued Demand Promissory Notes (the “10% Two-Year
Senior Secured Convertible Debentures”);


 


WHEREAS,
the Company and Theorem are party to that certain Convertible
Demand Promissory Note dated December 31, 2013, as amended from
time to time (the “December 2013 Purchase Agreement”),
pursuant to which the Company issued a Convertible Demand
Promissory Note (the “December 2013
Note”);


 


WHEREAS,
each of Adam Kasower (“Kasower”), SV Booth, Bristol,
Munt Trust, Greg McPherson, (the foregoing individuals and
entities, collectively, the “July 2014 Investors”) and
the Company are party to that certain Securities Purchase Agreement
dated July 24, 2014, as amended from time to time (the “July
2014 Purchase Agreement”), pursuant to which the Company
issued 10% Convertible Debentures (the “July 2014
Debentures”);


 




 

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WHEREAS,
each of William Heavener (“Heavener”), Gianna Simone
Baxter (“S. Baxter”), Anthony Baxter
(“Baxter”), Scott Williams (“Williams”),
Red Mango Ltd. (“Red Mango”), Kasower (the foregoing
individuals and entities, collectively, the “October 2014
Investors”) and the Company are party to that certain
Securities Purchase Agreement dated October 14, 2014, as amended
from time to time (the “October 2014 Purchase
Agreement”), pursuant to which the Company issued 10%
Convertible Debentures (the “October 2014
Debentures”);


 


WHEREAS,
each of Theorem, Kasower, Heavener, S. Baxter, Baxter, Red Mango,
Bristol, Williams, (the foregoing individuals and entities,
collectively, the “March 2015 Investors”) and the
Company are party to that certain Securities Purchase Agreement
dated March 12, 2015, as amended from time to time (the
“March 2015 Purchase Agreement”), pursuant to which the
Company issued 10% Convertible Debentures (the “March 2015
Debentures”);


 


WHEREAS,
each of Heavener, Kasower, S. Baxter, Williams, Baxter (the
foregoing individuals collectively, the “July 2015
Investors”) and the Company are party to that certain
Securities Purchase Agreement dated July 8, 2015, as amended from
time to time (the “July 2015 Purchase Agreement”),
pursuant to which the Company issued 10% Convertible Debentures
(the “July 2015 Debentures”);


 


WHEREAS,
each of Heavener, S. Baxter, Baxter, Private Resources, Ltd, (the
foregoing individuals and entities collectively, the “October
2015 Investors”) and the Company are party to that certain
Securities Purchase Agreement dated October 5, 2015, as amended
from time to time (the “October 2015 Purchase
Agreement”), pursuant to which the Company issued 10%
Convertible Debentures (the “October 2015
Debentures”);


 


WHEREAS,
each of Heavener, S. Baxter, Baxter, Alpha, Bristol, Williams, (the
foregoing individuals and entities collectively, the
“December 2015 Investors”) and the Company are party to
that certain Securities Purchase Agreement dated October 5, 2015,
as amended from time to time (the “December 2015 Purchase
Agreement”), pursuant to which the Company issued 10%
Convertible Debentures (the “December 2015
Debentures”);


 


WHEREAS,
each of Heavener, S. Baxter, Baxter, Alpha, Bristol, Kasower,
Theorem, Red Mango, SV Booth, Bristol Capital LLC, East Ventures,
LLC (“East Ventures”), Randy Berinhout, Piter Korompis,
Private Resources, Ltd, Barry Wolfe, Williams, Net Capital LLC,
(the foregoing individuals and entities collectively, the
“May 2016 Investors”) and the Company are party to that
certain Securities Purchase Agreement dated May 4, 2016, as amended
from time to time (the “May 2016 Purchase Agreement”),
pursuant to which the Company issued 10% Convertible Debentures
(the “May 2016 Debentures”);


 


WHEREAS,
H.C. Wainwright and Company, LLC (“Wainwright”) (the
foregoing entity known as, the “August 2016 Investor”)
and the Company are party to that certain Securities Purchase
Agreement dated August 6, 2015, as amended from time to time (the
“August 2016 Purchase Agreement”), pursuant to which
the Company issued 10% Convertible Debentures (the “August
2016 Debentures”);


 


WHEREAS,
each of Heavener, S. Baxter, Baxter, Alpha, Bristol, Kasower,
Bristol Capital LLC, Williams, Private Resources Ltd, Wainwright
(the foregoing individuals and entities collectively, the
“January 2017 Investors”) and the Company are party to
that certain Securities Purchase Agreement dated January 9, 2017,
as amended from time to time (the “January 2017 Purchase
Agreement”), pursuant to which the Company issued 10%
Convertible Debentures (the “January 2017
Debentures”);


 


WHEREAS,
each of Alpha, Kasower, (the foregoing individuals and entities
collectively, the “March 2017 Investors”) and the
Company are party to that certain Securities Purchase Agreement
dated March 16, 2017, as amended from time to time (the
“March 2017 Purchase Agreement”), pursuant to which the
Company issued 10% Convertible Debentures (the “March 2017
Debentures”);


 


WHEREAS,
each of Alpha, Craig Osborne, (the foregoing individuals and
entities collectively, the “April 2017 Investors”) and
the Company are party to that certain Securities Purchase Agreement
dated April 13, 2017, as amended from time to time (the
“April 2017 Purchase Agreement”), pursuant to which the
Company issued 10% Convertible Debentures (the “April 2017
Debentures”);


 




 

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WHEREAS,
each of Kasower, Red Mango, Bristol, (the foregoing individuals and
entities collectively, the “July 2017 Investors”) and
the Company are party to that certain Securities Purchase Agreement
dated July 19, 2017, as amended from time to time (the “July
2017 Purchase Agreement”), pursuant to which the Company
issued 10% Convertible Debentures (the “July 2017
Debentures”);


 


WHEREAS,
each of Heavener, S. Baxter, Alpha, Bristol, Kasower, Craig
Osborne, Williams, Randy Berinhout, Red Mango, (the foregoing
individuals and entities collectively, the “August 2017
Investors”) and the Company are party to that certain
Securities Purchase Agreement dated August 16, 2017, as amended
from time to time (the “August 2017 Purchase
Agreement”), pursuant to which the Company issued 10%
Convertible Debentures (the “August 2017
Debentures”);


 


WHEREAS,
each of Theorem, Bristol and the Company are party to that certain
Settlement Agreement dated August 8, 2012 (the “2012
Settlement Agreement”), pursuant to which the Company issued
Convertible Notes to Theorem and Bristol in order to settle certain
claims regarding certain convertible debentures held by Bristol
(pursuant to the terms and schedules of the 2012 Settlement
Agreement);


 


WHEREAS,
each of Bristol Capital LLC, Bristol and the Company are party to
that certain Settlement Agreement dated August 14, 2015 (the
“August 2015 Settlement Agreement”), pursuant to which
the Company issued allonges to Alpha, Bristol Capital LLC and
Bristol, increasing the principal amounts of July 2014 Debentures
held by each entity (pursuant to the terms and schedules of the
August 2015 Settlement Agreement);


 


WHEREAS,
each of East Ventures, SV Booth and the Company are party to that
certain Settlement Agreement dated October 7, 2015 (the
“October 2015 Settlement Agreement”), pursuant to which
the Company issued allonges to East Ventures and SV Booth,
increasing the principal amounts of July 2014 Debentures held by
each entity (pursuant to the terms and schedules of the October
2015 Settlement Agreement);


 


WHEREAS,
each of Alpha, Bristol Capital LLC, Bristol, East Ventures, SV
Booth and the Company are party to that certain Second Settlement
Agreement dated November 5, 2015 (the “November 2015
Settlement Agreement”), pursuant to which the Company issued
allonges to Alpha, Bristol Capital LLC and Bristol, increasing the
principal amounts of July 2014 Debentures held by each entity
(pursuant to the terms and schedules of the November 2015
Settlement Agreement);


 


WHEREAS,
Bristol, Theorem and the Company are party to that certain
Settlement Agreements dated December 7, 2015 (the “December
2015 Settlement Agreement”), pursuant to which the Company
issued allonges to Bristol and Theorem, increasing the principal
amounts of 2006 Debentures and 2009 Debentures held by each entity
(pursuant to the terms and schedules of the December 2015
Settlement Agreement);


 


WHEREAS,
Alpha and the Company are party to that certain Settlement
Agreement dated April 5, 2017 (the “April 2017 Settlement
Agreement”), pursuant to which the Company issued an allonge
to Alpha, increasing the principal amounts of their March 2017
Debenture (pursuant to the terms and schedules of the April 2017
Settlement Agreement);


 


WHEREAS,
Bristol, Theorem, June 2011 Investors, November 2011 Investors,
March 2012 Investors, May 2012 Investors, December 2012 Note
Holders, 10% Two-Year Senior Secured Convertible Debenture Holders,
July 2014 Investors, October 2014 Investors, March 2015 Investors,
July 2015 Investors, October 2015 Investors, December 2015
Investors, May 2016 Investors, August 2016 Investors, January 2017
Investors, March 2017 Investors, April 2017 Investors, July 2017
Investors, and August 2017 Investors, Alpha, Bristol Capital LLC,
East Ventures and SV Booth are herein referred to as, each, a
“Note Holder” and, collectively, the “Note
Holders”;


 


WHEREAS,
the 2006 Debentures, 2009 Debentures, June 2011 Debentures,
November 2011 Debentures, March 2012 Debentures, May 2012
Debentures, December 2012 Notes, 10% Two-Year Senior Secured
Convertible Debentures, December 2013 Note, July 2014 Debentures,
October 2014 Debentures, March 2015 Debentures, July 2015
Debentures, October 2015 Debentures, December 2015 Debentures, May
2016 Debentures, August 2016 Debentures, January 2017 Debentures,
March 2017 Debentures, April 2017 Debentures, July 2017 Debentures,
and August 2017 Debentures are herein collectively referred to as
the “Notes”;


 




 

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WHEREAS,
the 2006 Purchase Agreement, 2009 Purchase Agreement, June 2011
Purchase Agreement, November 2011 Purchase Agreement, March 2012
Purchase Agreement, May 2012 Purchase Agreement, 10% Two-Year
Senior Secured Convertible Debenture Agreement, December 2012
Purchase Agreement, December 2013 Purchase Agreement, July 2014
Purchase Agreement, October 2014 Purchase Agreement, March 2015
Purchase Agreement, July 2015 Purchase Agreement, October 2015
Purchase Agreement, December 2015 Purchase Agreement, May 2016
Purchase Agreement, August 2016 Purchase Agreement, January 2017
Purchase Agreement, March 2017 Purchase Agreement, April 2017
Purchase Agreement, July 2017 Purchase Agreement, August 2017
Purchase Agreement, 2012 Settlement Agreement, August 2015
Settlement Agreement, October 2015 Settlement Agreement, November
2015 Settlement Agreement, December 2015 Settlement Agreement, and
April 2017 Settlement Agreement are herein collectively referred to
as the “Prior Subscription Agreements”;


 


WHEREAS,
the Prior Subscription Agreements and the Notes are herein
collectively referred to as the “Prior Transaction
Documents”;


 


WHEREAS, each Note Holder hereby agrees to convert
and cancel all indebtedness of the Company to such Note Holder,
including any accrued and unpaid interest or penalties under the
Notes, and the Company agrees to issue to each Note Holder in
exchange for the cancellation of all indebtedness of the Company to
such Note Holder, including any accrued and unpaid interest or
penalties under the Notes, and for no additional consideration, the
number of shares of Common Stock described
in Section
1 (collectively, the
“Note Conversion
Shares”).


 


NOW,
THEREFORE, in consideration of the rights and benefits that they
will each receive in connection with this Agreement, the parties,
intending to be legally bound, agree as follows:


 


1. Cancellation
of Notes; Issuance of Note Conversion Shares.  Subject to the terms and conditions
of this Agreement, in exchange for the cancellation of all
indebtedness of the Company to such Note Holder under the Notes
held by such Note Holder, including any accrued and unpaid interest
or penalties under such Notes and for no additional consideration,
such number of Note Conversion Shares set forth beside such Note
Holder’s name on Schedule
B attached hereto (the
“Note
Conversion”).  Thereafter, the Notes
converted shall solely represent the right to receive the Note
Conversion Shares hereunder, and no amounts shall remain
outstanding under such Notes and such Notes shall otherwise be of
no further force or effect. In the event a Note Conversion will
result in a Note Holder owning more than 9.99% of the total issued
and outstanding common shares of the Company, the Note Holder will
be issued common stock in connection with the Note Conversion until
the Note Holder owns 9.99% of the issued and outstanding stock of
the Company. The balance of the Note Conversion will be completed
by the Company issuing the Note Holder shares of Series J Preferred
Stock. A copy of the Certificate of Designation with respect to
such Series J Preferred Stock is annexed hereto as
Exhibit
C.


 


2. Closing.


 


(a) Closing.  With
respect to all Notes, the Note Holders shall deliver their physical
Notes (or if such Notes are lost, mutilated or destroyed, a lost
note affidavit and indemnity agreement in substantially the form
attached hereto as Exhibit
A (each, an
“Affidavit”))
to the Company for cancellation.


 


(b) Delivery of
Shares.  Within five
(5) business days from the receipt of the physical Notes (or
Affidavit, as applicable) from any Note Holder, the Company shall
deliver the applicable Note Conversion Shares to such Note Holder
pursuant to a legal opinion acceptable to the transfer agent and
the Holders to be issued by Company counsel and paid for by the
Company, electronically through the Depository Trust Company or
another established clearing corporation performing similar
functions.


 


3. Representations
and Warranties of the Company.  The Company hereby represents and
warrants to each Note Holder as of the date hereof as
follows:


 




 

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(a) Organization and
Standing.  The
Company is a corporation duly organized, validly existing under,
and by virtue of, the laws of the State of Delaware, and is in good
standing under such laws.  The Company has all requisite
corporate power and authority to own and operate its properties and
assets and to carry on its business as presently
conducted.  The Company is duly qualified and authorized
to transact business and is in good standing as a foreign
corporation in each jurisdiction in which the failure to so qualify
would have a material adverse effect on its business, properties or
financial condition.


 


(b) Corporate
Power.  The Company
has all requisite legal and corporate power and authority to
execute and deliver this Agreement, to sell and issue the Note
Conversion Shares hereunder, and to carry out and perform its
obligations under the terms of this Agreement and the transactions
contemplated hereby.


 


(c) Authorization.  All
corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement, the
authorization, sale, issuance and delivery of the Note Conversion
Shares and the performance of all of the Company’s
obligations hereunder have been taken or will be taken prior to the
applicable Closing.  This Agreement has been duly
executed by the Company and constitutes valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to the laws of
general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies.


 


(d) Valid Issuance of
Stock.  The Note
Conversion Shares, when issued, sold and delivered in compliance
with the provisions of this Agreement, will be duly and validly
issued, fully paid and nonassessable and issued in compliance with
applicable federal and state securities laws.  Such Note
Conversion Shares will also be free and clear of any liens or
encumbrances; provided, however, that the Note Conversion Shares
shall be subject to the provisions of this Agreement and
restrictions on transfer under state and/or federal securities
laws.  The Note Conversion Shares are not subject to any
preemptive rights, rights of first refusal or restrictions on
transfer.


 


(e) Offering.  Subject
in part to the accuracy of the Note Holder’s representations
in Sections 4 and 5 (if
applicable) hereof, the offer, sale and issuance of the Note
Conversion Shares in conformity with the terms of this Agreement
constitute transactions exempt from registration under the
Securities Act of 1933, as amended (the “Securities
Act”) and from all
applicable state securities laws.


 


(f) Governmental
Consents.  No
consent, approval, qualification or authority of, or registration
or filing with, any local, state or federal governmental authority
on the part of the Company is required in connection with the valid
execution, delivery or performance of this Agreement, or the offer,
sale or issuance of the Shares, or the consummation of any
transaction contemplated hereby, except (i) such filings as have
been made prior to the date hereof and (ii) such additional
post-closing filings as may be required to comply with applicable
federal and state securities laws (including but not limited to any
Form D or Form 8-K filings), and with applicable general
corporation laws of the various states, each of which will be filed
with the proper authority by the Company in a timely
manner.


 


4. Representations
and Warranties of all Note Holders.  Each Note Holder, for itself and for
no other person, hereby represents and warrants as of the date
hereof to the Company as follows:


 


(a) Organization and
Standing.  The Note
Holder is either an individual or an entity duly organized, validly
existing under, and by virtue of, the laws of the jurisdiction of
its incorporation or formation, and is in good standing under such
laws.


 


(b) Corporate
Power.  The Note
Holder has all right, corporate, partnership, limited liability
company or similar power and authority to execute and deliver this
Agreement, to effect the Note Conversion hereunder, and to carry
out and perform its obligations under the terms of this Agreement
and the transactions contemplated hereby.


 


(c) Authorization.  All
corporate, partnership, limited liability company or similar
action, as applicable on the part of such Note Holder, necessary
for the authorization, execution, delivery and performance of this
Agreement, the Note Conversion and the performance of all of such
Note Holder’s obligations hereunder have been taken or will
be taken prior to the applicable Closing.  This Agreement
has been duly executed by the Note Holder and constitutes valid and
legally binding obligations of such Note Holder, enforceable
against such Note Holder in accordance with their respective terms,
subject to the laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable
remedies.


 




 

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(d) Governmental
Consents.  No
consent, approval, qualification or authority of, or registration
or filing with, any local, state or federal governmental authority
on the part of the Company is required in connection with the valid
execution, delivery or performance of this Agreement, or the offer,
sale or issuance of the Note Conversion Shares, or the consummation
of any transaction contemplated hereby, except such filings as have
been made prior to the date hereof.


 


(e) Own
Account.  Such Note
Holder understands that the Note Conversion Shares are
“restricted securities” and have not been registered
under the Securities Act or any applicable state securities law in
reliance upon exemptions from regulation for non-public offerings
and is acquiring the Note Conversion Shares as principal for its
own account and not with a view to or for distributing or reselling
such Note Conversion Shares or any part thereof in violation of the
Securities Act or any applicable state securities law, has no
present intention of distributing any such Note Conversion Shares
in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or
understandings with any other persons to distribute
or  regarding the distribution of such Note Conversion
Shares in violation of the Securities Act or any applicable state
securities law.  Such Note Holder agrees that the Note
Conversion Shares or any interest therein will not be sold or
otherwise disposed of by such Note Holder unless the shares are
subsequently registered under the Securities Act and under
appropriate state securities laws or unless the Company receives an
opinion of counsel satisfactory to it (including the opinion
delivered by the Company at Closing) that an exception from
registration is available.


 


(f) Note Holder
Status.  The Note
Holder is either: (i) an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act or (ii) a “qualified institutional
buyer” as defined in Rule 144A under the Securities
Act.  Such Note Holder is not required to be registered
as a broker-dealer under Section 15 of the Securities Exchange Act
of 1934, as amended (the “Exchange
Act”).


 


(g) Experience of Note
Holder.  Such Note
Holder, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Note Conversion Shares, and has
so evaluated the merits and risks of such
investment.


 


(h) Ability to Bear
Risk.  Such Note
Holder understands and acknowledges that investment in the Company
is highly speculative and involves substantial
risks.  Such Note Holder is able to bear the economic
risk of an investment in the Note Conversion Shares and is able to
afford a complete loss of such investment.


 


(i) General
Solicitation.  Such
Note Holder is not accepting the Note Conversion Shares as a result
of any advertisement, article, notice or other communication
regarding the Note Conversion Shares published in any newspaper,
magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or
general advertisement.


 


(j) Disclosure of
Information.  Such
Note Holder has had the opportunity to receive all additional
information related to the Company requested by it and to ask
questions of, and receive answers from, the Company regarding the
Company, including the Company’s business management and
financial affairs, and the terms and conditions of this offering of
the Note Conversion Shares.  Such questions were answered
to such Note Holder’s satisfaction.  Such Note
Holder has also had access to copies of the Company’s filings
with the Securities Exchange Commission under the Securities Act
and Exchange Act.  The Note Holder believes that it has
received all the information such Note Holder considers necessary
or appropriate for deciding whether to consummate the Note
Conversion.  The Note Holder understands that such
discussions, as well as any information issued by the Company, were
intended to describe certain aspects of the Company’s
business and prospects, but were not necessarily a thorough or
exhaustive description.  The Note Holder acknowledges
that any business plans prepared by the Company have been, and
continue to be, subject to change and that any projections included
in such business plans or otherwise are necessarily speculative in
nature and it can be expected that some or all of the assumptions
underlying the projections will not materialize or will vary
significantly from actual results.


 


(k) Residency.  The
residency of the Note Holder (or in the case of a partnership or
corporation, such entity’s principal place of business) is
correctly set forth on Schedule
A attached
hereto.


 




 

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(l) Security
Holdings.  The Notes
(including the aggregate and principal amounts outstanding), held
by each Note Holder, as applicable, as of the date hereof are
correctly described on Schedule
B attached
hereto.  The Note Holder does not hold any other
securities or equity interests in the Company other than what is
set forth opposite such Note Holder’s name
on Schedule
B attached
hereto, Schedule
B to the Warrant Exercise
Agreement, dated August 23, 2017 and Schedule
B to the Preferred Stock
Exchange Agreement, dated August 23, 2017, each of which is
incorporated herein by reference as though fully set forth herein
and made a part of this Agreement.


 


(m) Tax
Matters.  The Note
Holder has reviewed with its own tax advisors the U.S. federal,
state, local and foreign tax consequences of this investment and
the transaction contemplated by this Agreement.  The Note
Holder understands that it (and not the Company) shall be
responsible for its own tax liability that may arise as a result of
this investment and the transactions contemplated by this
Agreement.


 


(n)                 Restrictions
on Transferability: No Endorsement. The Note Holder has been
informed of and understand the following:


 




 

i.           there
are restrictions on the transferability of the Note Conversion
Shares; or


 


ii.           no
federal or state agency has made any finding or determination as to
the fairness for public investment, nor any recommendation nor
endorsement of the Note Conversion Shares.


 


(o) No Other
Representation by the Company.  None of the following information has
ever been represented, guaranteed or warranted to the Note Holder,
expressly or by implication by any broker, the Company, or agent or
employee of the foregoing, or by any other
Person:


 


i. the
approximate or exact length of time that the Note Holder will be
required to remain a holder of the Note Conversion
Shares;


 


ii. the
amount of consideration, profit or loss to be realized, if any, as
a result of an investment in the Company; or


 


iii. that
the past performance or experience of the Company, its officers,
directors, associates, agents, affiliates or employees or any other
person will in any way indicate or predict economic results in
connection with the plan of operations of the Company or the return
on investment.


 


5. Representations,
Warranties and Covenants of Non-US Note Holders.  Each Note Holder who is a Non-U.S.
Person (as defined herein) hereby represents and warrants to the
Company as follows (provided however a Note Holder may not make the
representation in this Section 5 if it so indicates on such Note
Holder’s signature page):


 


(a) Certain
Definitions.  As used
herein, the term “United States” means and includes the
United States of America, its territories and possessions, any
state of the United States and the District of Columbia, and the
term “Non-U.S. person” means any person who is not a
U.S. person (as defined in Regulation S) or is deemed not to be a
U.S. person under Rule 902(k)(2) of the Securities
Act.


 


(b) Reliance on
Representations and Warranties by the Company.  This Agreement is made by the Company
with such Note Holder who is a Non-U.S. person
(“Non-U.S.
Note Holder”) in reliance
upon such Non-U.S. Note Holder’s representations and
warranties made herein.


 


(c) Regulation
S.  Such Non-U.S.
Note Holder has been advised and acknowledges
that:


 


i. the
Note Conversion Shares have not been registered under the
Securities Act, the securities laws of any state of the United
States or the securities laws of any other country;


 


ii. in
issuing and selling the Note Conversion Shares to such Non-U.S.
Note Holder pursuant hereto, the Company is relying upon the
“safe harbor” provided by Regulation S and/or on
Section 4(a)(2) under the Securities Act;


 




 

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 iii. it is a condition to the
availability of the Regulation S “safe harbor” that the
Note Conversion Shares not be offered or sold in the United States
or to a U.S. person until the expiration of a period of one year
following the applicable Closing Date; notwithstanding the
foregoing, prior to the expiration of one year after the applicable
Closing (the “Restricted
Period”), the Note
Conversion Shares may be offered and sold by the holder thereof
only if such offer and sale is made in compliance with the terms of
this Agreement and either: (A) if the offer or sale is within the
United States or to or for the account of a U.S. person, the
securities are offered and sold pursuant to an effective
registration statement or pursuant to Rule 144 under the Securities
Act or pursuant to an exemption from registration requirements of
the Securities Act, or (B) the offer and sale is outside the United
States and to other than a U.S. person.


 


(d) Certain Restrictions
on Note Conversion Shares.  Such Non-U.S. Note Holder agrees that
with respect to the Note Conversion Shares until the expiration of
the Restricted Period:


 


i. such
Non-U.S. Note Holder, its agents or its representatives have not
and will not solicit offers to buy, offer for sale or sell any of
the Note Conversion Shares or any beneficial interest therein in
the United States or to or for the account of a U.S. person during
the Restricted Period; notwithstanding the foregoing, prior to the
expiration of the Restricted Period, the Note Conversion Shares may
be offered and sold by the holder thereof only if such offer and
sale is made in compliance with the terms of this Agreement and
either: (A) if the offer or sale is within the United States or to
or for the account of a U.S. person, the securities are offered and
sold pursuant to an effective registration statement or pursuant to
Rule 144 under the Securities Act or pursuant to an exemption from
registration requirements of the Securities Act; or (B) the offer
and sale is outside the United States and to a person other than a
U.S. person; and


 


ii. such
Non-U.S. Note Holder shall not engage in hedging transactions with
regards to the Note Conversion Shares unless in compliance with the
Securities Act.


 



The foregoing restrictions are binding upon subsequent transferees
of the Note Conversion Shares, except for transferees pursuant to
an effective registration statement.  Such Non-U.S. Note
Holder agrees that after the Restricted Period, the Note Conversion
Shares may be offered or sold within the United States or to or for
the account of a U.S. person only pursuant to applicable securities
laws.


 


(e) Directed
Selling.  Such
Non-U.S. Note Holder has not engaged, nor is it aware that any
party has engaged, and such Non-U.S. Note Holder will not engage or
cause any third party to engage, in any directed selling efforts
(as such term is defined in Regulation S) in the United States with
respect to the Note Conversion Shares.


 


(f) Location of Non-U.S.
Note Holder. Such Non-U.S. Note
Holder: (i) is domiciled and has its principal place of business or
registered office outside the United States; (ii) certifies it is
not a U.S. person and is not acquiring the Note Conversion Shares
for the account or benefit of any U.S. person; and (iii) at the
time of the applicable Closing, the Non-U.S. Note Holder or persons
acting on the Non-U.S. Note Holder’s behalf in connection
therewith are located outside the United
States.


 


(g) Distributor;
Dealer.  Such
Non-U.S. Note Holder is not a “distributor” (as defined
in Regulation S) or a “dealer” (as defined in the
Securities Act).


 


(h) Notation of
Restrictions.  Such
Non-U.S. Note Holder acknowledges that the Company shall make a
notation in its stock books regarding the restrictions on transfer
set forth in this section and shall transfer such shares on the
books of the Company only to the extent consistent
therewith.


 



 


(i) Compliance with
Laws. Such Non-U.S. Note Holder
is satisfied as to the full observance of the laws of such Non-U.S.
Note Holder’s jurisdiction in connection with the Note
Conversion, including (i) the legal requirements within such
Non-U.S. Note Holder’s jurisdiction for the Note Conversion,
(ii) any foreign exchange restrictions applicable to such Note
Conversion, (iii) any governmental or other consents that may need
to be obtained and (iv) the income tax and other tax consequences,
if any, that may be relevant to the exchange, holding, redemption,
sale or transfer of such securities.  Such Non-U.S. Note
Holder’s participation in the Note Conversion and such
Non-U.S. Note Holder’s continued beneficial ownership of the
Note Conversion Shares will not violate any applicable securities
or other laws of such Non-U.S. Note Holder’s
jurisdiction.


 




 

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6. Waiver
and Release.  Effective immediately upon the Note
Conversion with respect to the Notes held by each Note
Holder:


 


(a) Such
Note Holder expressly forfeits and waives any and all anti-dilution
and piggyback registration rights under any and all Prior
Transaction Documents or otherwise applicable to the Notes,
including any anti-dilution rights such Note Holder may have with
respect to the issuances of any capital stock or other securities
of the Company pursuant to previous transactions and pursuant to
this Agreement.


 


(b)       Such
Note Holder unconditionally, irrevocably and absolutely releases
and discharges the Company, and any parent and subsidiary
corporations, divisions and affiliated corporations, partnerships
or other entities of the Company, past and present, as well as the
Company’s past and present employees, officers, directors,
agents, principals, shareholders, successors and assigns from all
claims, losses, demands, interests, causes of action, suits, debts,
controversies, liabilities, costs, expenses and damages related to
the waiver of anti-dilution and piggyback registration rights
above, any security interest pursuant to any Prior Transaction
Documents or otherwise over any collateral of the Company, or
related in any way to any rights such Note Holder may have to
equity or debt securities of the Company, other than as provided
under this Agreement, any other agreement entered into
contemporaneously herewith or set forth on the schedules hereto and
thereto.  This release includes, but is not limited to,
any tort, contract, common law, constitution or other statutory
claims (including but not limited to any claims for
attorneys’ fees, costs and expenses).


 


(c) Such
Note Holders and the Company expressly waives such Note
Holder’s or Company’s (as applicable) right to recovery
of any type, including damages or reinstatement, in any
administrative court or action, whether state or federal, and
whether brought by such Note Holder or Company or on such Note
Holder’s or Company’s (as applicable) behalf, related
in any way to the matters released herein.


 


(d) Such
Note Holder and the Company declares and represents that it intends
this Agreement to be complete and not subject to any claim of
mistake, and that the release of the claims described herein
expresses a full and complete release and it intends the release of
such claims to be final and complete.


 


(e) The parties acknowledge that this release
is not intended to bar any claims that, by statute, may not be
waived and
shall not waive any indemnification rights previously granted in
Prior Transaction Documents.


 


(f)                  The
Company unconditionally, irrevocably and absolutely releases and
discharges such Note Holder, and any parent and subsidiary
corporations, divisions and affiliated corporations, partnerships
or other entities of such Note Holder, past and present, as well as
the such Note Holder’s past and present employees, officers,
directors, agents, principals, shareholders, successors and assigns
from all claims, losses, demands, interests, causes of action,
suits, debts, controversies, liabilities, costs, expenses and
damages related to any Prior Transaction Documents or otherwise
over any collateral of the Company, or related in any way to any
obligations such Note Holder may have to the Company, other than as
provided under this Agreement or set forth on the schedules
hereto.  This release includes, but is not limited to, any
tort, contract, common law, constitution or other statutory claims
(including but not limited to any claims for attorneys’ fees,
costs and expenses).


 




 

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7.            Covenants.

 

(a) On
or about the date of this Agreement, the Company is entering into
Note Conversion Agreements, Preferred Stock Exchange Agreements,
and Warrant Exercise Agreements with the debenture holders, the
preferred stock holders and the warrant holders of the Company.
Pursuant to these agreements, common stock and sometimes Series J
Preferred Stock will be issued upon the conversion of debentures,
conversion of old preferred stock and the exercise of warrants
(collectively the “Newly Issued Capital Stock”). The
Note Holder’s “New Stock” is the common stock
received pursuant to this Agreement, any Preferred Stock Exchange
Agreement and any Warrant Exercise Agreement of even date herewith,
together with the number of common shares into which the Note
Holder’s Series J Preferred Stock received by virtue of the
same agreements, is convertible. The “Note Holder’s
Percentage” is the percentage of the Note Holder’s New
Stock compared to the total of the Newly Issued Capital Stock.
At all times during the one-year
period immediately following the Closing in which the Note Holder
participates (“Restricted Period”), beginning on the
Closing Date, such Note Holder hereby agrees with the Company that
such Note Holder shall not sell on any one day, any shares of the
Company’s capital stock in excess of the Note Holder’s
Percentage of the Company’s trading volume on that day. The
foregoing restriction was requested by the Company of each Note
Holder and was not requested by any Note Holder. Each Note Holder
shall make its own determination of when to sell and when not to
sell independently of any other Note Holder and not as a part of
any group. Notwithstanding the foregoing, the restrictions set
forth in this Section
7(a) will terminate with
respect to any Note Conversion Shares when the Company has any
registration statement declared effective by the Securities and
Exchange Commission. The Company undertakes and agrees to notify
each Note Holder in writing (which may be via e-mail to with a
‘read receipt requested’) of the effective date on the
same day that the Company receives notice of such effective
date.  The parties hereto acknowledge and agree that,
except as set forth in this Agreement, the Company is under no
obligation to register any of the Note Conversion Shares. The Note
Holder’s Percentage is listed on Schedule
A. Notwithstanding
anything herein to the contrary, during the Restricted Period, the
Holder may, directly or indirectly, sell or transfer all, or any
part, of the Shares or the Warrant Shares (the “Restricted
Securities”) to any Person (an “Assignee”) in a
transaction which does not need to be reported on the Nasdaq
consolidated tape, without complying with (or otherwise limited by)
the restrictions set forth in this Section 7(a); provided, that as
a condition to any such sale or transfer an authorized signatory of
the Company and such Assignee duly execute and deliver a leak-out
agreement in the form of this Section 7(a) (an “Assignee
Agreement”, and each such transfer a “Permitted
Transfer”) and, subsequent to a Permitted Transfer, sales of
the Note Holder and all Assignees (other than any such sales that
constitute Permitted Transfers) shall be aggregated for all
purposes of this Section 7(a) and all Assignee
Agreements.


 

(b) The
Company hereby represents and warrants as of the date hereof and
covenants and agrees from and after the date hereof that none of
the terms offered to any Note Holder with respect to the terms
hereunder and the Note Conversion Shares is or will be more
favorable to any other Note Holder than those offered under this
Agreement (including by way of any written or verbal side or
separate agreements). If, and whenever on or after the date hereof,
the Company offers different terms to another Note Holder, then (i)
the Company shall provide notice thereof to all Note Holders
promptly following the occurrence thereof and (ii) the terms and
conditions of this Agreement shall be, without any further action
by the Holder or the Company, automatically and retroactively
amended and modified in an economically and legally equivalent
manner such that all Note Holders shall receive the benefit of the
more favorable terms and/or conditions (as the case may be) granted
to such other Note Holder, provided that upon written notice to the
Company at any time a Note Holder may elect not to accept the
benefit of any such amended or modified term or condition, in which
event the term or condition contained in this Agreement shall apply
to the Note Holder as it was in effect immediately prior to such
amendment or modification as if such amendment or modification
never occurred with respect to the Note Holder.


 

(c)  This
Agreement shall be effective with respect to Holders who accept
this offer only if Holders possessing not less than 100% of the
outstanding Note principal and interest accept this offer and
execute and deliver a copy of this Agreement to the Company on or
before September 1, 2017. If this Agreement becomes effective and
the transaction documents are executed on or before 8:30 a.m. on
August September 5, 2017, then on or before 9:00 a.m. Eastern Time
on September 5, 2017, the Company shall file a Current Report on
Form 8-K with the Commission. From and after such filing, the
Company represents to the Note Holders that it shall have publicly
disclosed all material, non-public information delivered to it by
the Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents.


 




 

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(d) Except
with respect to the material terms and conditions of the
transactions contemplated by this Agreement, the Company covenants
and agrees that neither it, nor any other Person acting on its
behalf, will provide any Note Holder or its agents or counsel with
any information that the Company believes constitutes material
non-public information, unless prior thereto such Note Holder shall
have entered into a written agreement with the Company regarding
the confidentiality and use of such information. The Company
understands and confirms that each Note Holder shall be relying on
the foregoing covenant in effecting transactions in securities of
the Company.


 


8. Miscellaneous.


 


(a) Restriction
Notations. The provisions of
this Subsection 8(a) and Subsection 8(d) below, apply to all common
shares received by any Note Holder pursuant to a Note Conversion
Agreement, a Preferred Stock Exchange Agreement, or a Warrant
Exercise Agreement and shares of common stock into which Series J
Preferred Stock is converted, which shares of Series J Preferred
Stock are received pursuant to the same agreements. Collectively
these shares are referred to in this Subsection 8(a) and Subsection
8(d) as the “Shares”.


 


i. Except as otherwise provided in this
Agreement, the Company shall not make any notations on its records
or give any instructions to the registrar and transfer agent of the
Company (along with any successor transfer agent of the Company,
the “Transfer
Agent”) implementing any
restrictions on transfer.


 


ii. Company and Transfer Agent records
evidencing the Shares shall not contain any restriction notation
(including any restriction notation under this Section 8(a)): (i)
while a registration statement covering the resale of such security
is effective under the Securities Act, (ii) following any sale of
such Shares pursuant to Rule 144, (iii) if such Shares are eligible
for sale under Rule 144 or (iv) if such restriction notation is not
required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by
the staff of the Securities and Exchange Commission). The Company
shall cause its counsel to issue a legal opinion to the Transfer
Agent promptly if required by the Transfer Agent or requested by a
Note Holder to effect the removal of the restriction notation
hereunder. If all or any Series J Preferred Stock is converted at a
time when there is an effective registration statement to cover the
resale of the Note Conversion Shares, Common Stock issuable upon
conversion of the Series J Preferred Stock
(“Series J
Conversion Shares”) or if
the Shares may be sold under Rule 144 or if such restriction
notation is not otherwise required under applicable requirements of
the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission) then such
Shares and Series J Conversion Shares shall be issued free of all
restriction notations. The Company agrees that following such time
as such restriction notation is no longer required under this
Section 8(a), it will, no later than three business days following
the request by a Note Holder to the Company that the restriction on
the Note Holder’s shares be removed (such third business day,
the “Restriction
Notation Removal Date”),
cause the Transfer Agent to transfer the Shares upon the request of
the Note Holder by crediting the account of the Note Holder's prime
broker with the Depository Trust Company System as directed by such
Note Holder. The Company may not make any notation on its records
or give instructions to the Transfer Agent that enlarge the
restrictions on transfer set forth in this Section 8. Without
limiting the generality of the foregoing and subject to the volume
limitations of Section 7(a), provided a Note Holder is not an
affiliate of the Company and the Company is current in its
reporting obligations, the Note Conversion Shares and Series J
Conversion Shares may be sold under Rule 144 without restriction
and the Company will provide the required legal opinions in
connection with such sales.


 




 

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iii. In addition to the Note Holder's other
available remedies, the Company shall pay to a Note Holder, in
cash, as partial liquidated damages and not as a penalty, for each
$1,000 of Shares (based on the VWAP of the Common Stock of the
Company on the date a request for restriction notation removal is
submitted to the Transfer Agent) to which a removal of a
restriction notation was requested and subject to Section 8(a)(ii),
$10 per business day (increasing to $20 per business day five (5)
business days after such damages have begun to accrue) for each
business day after the Restriction Notation Removal Date until such
stock is delivered without a restriction notation. Nothing herein
shall limit such Note Holder's right to pursue actual damages for
the Company's failure to transfer Shares or Series J Conversion
Shares as required by this Agreement, and such Note Holder shall
have the right to pursue all remedies available to it at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief. For the purposes of this
section, "VWAP"
means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted
average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New
York City time)), (b) if the OTC Bulletin Board is not a Trading
Market, the volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for
trading on the OTC Bulletin Board and if prices for the Common
Stock are then reported in the "Pink Sheets" published by Pink OTC
Markets, Inc. (or a similar organization or agency succeeding to
its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Note Holders
of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company. For the purposes of this
section, “Trading
Market” means any of the
following markets or exchanges on which the Common Stock is listed
or quoted for trading on the date in question: the NYSE MKT, the
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange, the OTC Bulletin Board,
or any market of the OTC Markets, Inc. (or any successors to any of
the foregoing).


 


In
addition to such Note Holder’s other available remedies, in
the event that the Shares are delivered more than 5 Trading Days
following the date hereof (or if issued pursuant to the Series J
Preferred, following conversion) or a legal opinion required above
is not delivered to the Transfer Agent prior to the expiration of
its effectiveness (“Required Delivery Date”), Company
shall pay to a Note Holder, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Shares (based on
the VWAP of the Common Stock on the date such Securities are
required to be delivered), $10 per Trading Day (increasing to $20
per Trading Day five (5) Trading Days after such damages have begun
to accrue) for each Trading Day after the Required Delivery Date
until such Shares or Series J
Conversion Shares are delivered without a legend and (ii) if
the Company fails to (a) issue and deliver (or cause to be
delivered) to a Note Holder by the Required Delivery Date, Shares
or Series J Conversion Shares
without legends that is free from all restrictive and other legends
and (b) if after the Required Delivery Date such Note Holder
purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by such Note
Holder of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all
or any portion of the number of shares of Common Stock that such
Note Holder anticipated receiving from the Company without any
restrictive legend, then, an amount equal to the excess of such
Note Holder’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (including brokerage
commissions and other out-of-pocket expenses, if any) (the
“Buy-In
Price”) over the product of (A) such number of that
the Company was required to deliver to such Note Holder by the
Required Delivery Date multiplied by (B) the lowest closing sale
price of the Common Stock on any Trading Day during the period
commencing on the date of the delivery by such Note Holder to the
Company of the applicable Shares or
Series J Conversion Shares (as the case may be) and ending
on the date of such delivery and payment under this clause
(iii).



 


(b) Transfers.  Subject
to Section
7 above, the Company
hereby confirms that it will not require a legal opinion or
“no action” letter from any Note Holder who desires to
transfer the Note Conversion Shares or Series J Conversion Shares
in compliance with Rule 144 promulgated by the Securities and
Exchange Commission under the Securities Act
(“Rule
144”).


 




 

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(c)         Registration
Rights. Holders of Note
Conversion Shares will have the registration rights described
in Exhibit B
hereto.


 


(d)      
Furnishing
of Information. Until the
earliest of the time that no Note Holder owns Notes or Shares, the
Company covenants to maintain the registration of its Common Stock
under Section 12(b) or 12(g) of the Exchange Act.  During
the period that the Note Holders own Notes or Shares, the Company
shall timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be
filed by the Company pursuant to the Exchange Act, even if the
Company is not then subject to the reporting requirements of the
Exchange Act.


 


 (e) Tacking.  Each
party hereto acknowledges that the holding period for the Note
Conversion Shares and Series J Conversion Shares may be tacked back
to the date the Note cancelled and exchanged therefor was initially
issued and the Company shall take no position contrary to this
position.


 


(f) Reliance on
Representations and Warranties by the Company.  Each Note Holder acknowledges that
the representations and warranties contained herein are made by it
with the intention that such representations and warranties may be
relied upon by the Company and its legal counsel in determining the
Note Holder’s eligibility to purchase the Note Conversion
Shares under applicable securities legislation, or (if applicable)
the eligibility of others on whose behalf it is contracting
hereunder to purchase the Note Conversion Shares under applicable
securities legislation. The Note Holder further agrees that the
representations and warranties made by the Note Holder will survive
the Note Conversion and will continue in full force and effect
notwithstanding any subsequent disposition of the Note Holder of
such Note Conversion Shares.


 


(g) Fees and
Expenses.  Each party
shall pay the fees and expenses of its advisors, counsel,
accountants and other experts, if any, and all other expenses
incurred by such party incident to the preparation, execution,
delivery and performance of this Agreement.


 


(h) Entire
Agreement.  This
Agreement, together with the schedules attached hereto, contain the
entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and
understandings, oral or written with respect to such
matters.


 


(i) Notices.  All
notices, demands requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable
air courier service with charges prepaid, or (iv) transmitted by
hand delivery, addressed as set forth below or to such other
address as such party shall have specified most recently by written
notice.   The addresses for such communications shall be:
(i) if to the Company, to: GT Biopharma, Inc., Attn: Chief
Financial Officer, 4100 South Ashley Drive, Suite 600, Tampa, FL
33602, and (ii) if to the Note Holders, to the addresses as
indicated on the signature pages attached
hereto.


 


(j) Amendments;
Waivers.  No
provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Note Holders holding at least a
majority in interest of the Note Conversion Shares then outstanding
or, in the case of a waiver, by the party against whom enforcement
of any such waived provision is sought; provided, that all waivers,
modifications, supplements or amendments effected by less than all
Note Holders impact all Note Holders in the same
fashion.  No waiver with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the
exercise of any such right.


 


(k) Headings.  The
headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of
the provisions hereof.


 


(l) Successors and
Assigns.  This
Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted
assigns.


 




 

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(m) No Third-Party
Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and
their respective successors and assigns, and is not for the benefit
of, nor may any provision hereof be enforced by, any other
Person.


 


(n) Governing
Law.  All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement and the transactions contemplated
hereby shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without
regard to the principals of conflicts of law
thereof.  Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought
against a party hereto or its respective affiliates, directors,
officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts of
New York.  Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts of New York
for the adjudication of any dispute hereunder or in connection
herewith or the transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not venue for
such proceeding.  Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to
it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. In
addition to any other rights or remedies hereunder, any
indemnification provisions granted to a Note Holder shall continue
to survive and apply to such Note Holder as if such rights were
granted hereunder.


 


(o) Survival.  The
representations and warranties contained herein shall survive the
Closings for the applicable statute of
limitations.


 


(p) Execution.  This
Agreement may be executed in one or more counterparts, all of which
when taken together shall be considered one and the same agreement,
it being understood that the parties need not sign the same
counterpart.  In the event that any signature is
delivered by facsimile transmission or by email delivery of a
“.pdf” format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature was an
original thereof.


 (q) Severability.  If
any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ, an alternative means to
achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or
restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.


 


(r) Independent Nature of
Obligations and Rights.  The obligations of each Note Holder
and hereunder are several and not joint with the obligations of any
other Note Holder, and no Note Holder shall be responsible in any
way for the performance or non-performance of the obligations of
any other Note Holder hereunder.  Nothing contained
herein and no action taken by any Note Holder hereto shall be
deemed to constitute the Note Holders as a partnership, an
association, a joint venture or any other kind of entity, or create
a presumption that the Note Holders are in any way acting in
concert or as a group with respect to such obligations or the
transactions contemplated hereby. The Company and each Note
Holder confirms that such Note Holder has independently
participated in the negotiation of the transactions contemplated
hereby with the advice of its own counsel and advisors. Each Note
Holder shall be entitled to independently protect and enforce its
rights under this Agreement and it shall not be necessary for any
other Note Holder to be joined as an additional party in any
proceeding for such purpose.

 


(s) No Third Party
Beneficiaries.  Nothing in this Agreement shall
provide any benefit to any third party nor entitle any third party
to any claim, cause of action, remedy or right of any kind, it
being the intent of the parties hereto that this Agreement shall
not otherwise be construed as a third party beneficiary
contract.


 




 

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(t) Construction.  The
parties hereto agree that each of them and/or their respective
counsel have reviewed and have had an opportunity to revise this
Agreement and the schedules attached hereto.  This
Agreement shall be construed according to its fair meaning and not
strictly for or against any party.  The word
“including” shall be construed to include the words
“without limitation.”  In this Agreement,
unless the context otherwise requires, references to the singular
shall include the plural and vice versa.


 


(u) WAIVER
OF JURY TRIAL.  IN ANY ACTION,
SUIT OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST
ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY ANDINTENTIONALLY, TO
THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRAIL BY
JURY.


 



 


 


 




 

-15-








 






 

 



Signature page to



Note Conversion Agreement



(Company)



 


IN
WITNESS WHEREOF, the parties have caused this Note Conversion
Agreement to be duly executed and delivered as of the date and year
first written above.


 


	
 

	


“Company”



GT Biopharma, Inc.

	
 


	
 

	
 

	
 

	
 


	
 

	

By:

	
 

	
 


	
 

	

Name:

	
 

	
 


	
 

	

Title:

	
 

	
 


	
 

	
 

	
 

	
 








 



 



 


 


 


 


 


 


 


 


 




 

-16-








 






 

 



Signature page to



Note Conversion Agreement



(Note Holders)


 


IN
WITNESS WHEREOF, the parties have caused this Note Conversion
Agreement to be duly executed and delivered as of the date and year
first written above.


 


	
 

	

“Note
Holders”

	
 


	
 

	
 

	
 


	
 

	


If by an individual:

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	

Printed
Name:

	
 

	
 


	
 

	

Residency:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	


If by an entity:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 


	
 

	

Name of
entity

	
 


	
 

	
 

	
 

	
 


	
 

	

By:

	
 

	
 


	
 

	

Printed
Name:

	
 

	
 


	
 

	

Title:

	
 

	
 


	
 

	

Principal
Place of Business:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	


Address for Notice:

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	


Facsimile:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 








 



 


 




 

-17-








 






 

 



Schedule A


 


	
 

	
 

	

Percentage


	
 

	
 

	
 


	

Bristol
Investment Fund*

	
 

	

21.515%


	

Theorem
Group*

	
 

	

14.507%


	

James
W. Heavener*

	
 

	

11.175%


	

Adam
Kasower*

	
 

	

10.515%


	

Canyons
Trust

	
 

	

10.407%


	

Red
Mango*

	
 

	

9.096%


	

Alpha
Capital *

	
 

	

7.374%


	

Scott
Booth Investments III*

	
 

	

5.551%


	

Bristol
Capital*

	
 

	

2.954%


	

East
Ventures Inc*

	
 

	

2.136%


	

HC
Wainwright*

	
 

	

1.065%


	

Raymond
Pribadi (Private Resources) *

	
 

	

0.653%


	

Scott
Williams*

	
 

	

0.554%


	

Randy
Berinhout*

	
 

	

0.398%


	

Craig
Osborne*

	
 

	

0.393%


	

Adam
Cohen*

	
 

	

0.321%


	

Les
Cantor*

	
 

	

0.319%


	

Munt
Trust*

	
 

	

0.245%


	

Gianna
Simone Baxter*

	
 

	

0.183%


	

Farhad
Rastanian*

	
 

	

0.132%


	

Howard
Knee*

	
 

	

0.121%


	

Ho'okipa
Capital Partners Inc*

	
 

	

0.120%


	

Anthony
Baxter*

	
 

	

0.085%


	

Piter
Korompis*

	
 

	

0.057%


	

Greg
McPherson*

	
 

	

0.049%


	

Net
Capital*

	
 

	

0.039%


	

Barry
Wolfe*

	
 

	

0.025%


	

John
Brady

	
 

	

0.009%


	

Brannon
Family Office LLLP

	
 

	

0.002%


	
 

	
 

	
 


	

Total

	
 

	

100.000%








 



*Party to this agreement 



 


 


 


 


 




 

-18-








 






 



Schedule B


 



Note Conversion Shares


 



(see attached)


 


 


 


 


 



 



 


 




 

-19-








 






 



EXHIBIT A


 



LOST NOTE AFFIDAVIT AND INDEMNITY AGREEMENT


 


 



[_______________] (the “Note
Holder”), by and through
its duly authorized person, hereby certifies:


 



1.           This
Lost Note Affidavit and Indemnity Agreement (the
“Agreement”),
entered into effective as of [_____________ __, 20__], relates to
(1) the Securities Purchase Agreement (the
“Purchase
Document”) dated as of
[______________ __, 20__] by and among OXIS International, Inc., a
Delaware corporation (the “Company”)
and the Note Holder, and (2) the [__% Convertible Debentures] (the
“Note”)
dated as of [______________ __, 20__], made by Company payable to Note Holder in
the original principal amount of ___________________
(______________).


 



2.           Note
Holder hereby represents, warrants, and agrees as
follows:


 



a.           After
having conducted a diligent investigation of its records and files,
Note Holder has been unable to find the Note and believes that such
Note has been lost, misfiled, misplaced, or destroyed.


 



b.           Note
Holder has not assigned, encumbered, endorsed, pledged, or
hypothecated the Note, or otherwise transferred to another
individual or entity any right, title, interest, or claim in, to,
or under the Note.


 



c.           Note
Holder agrees that if it ever finds the Note, it will promptly
notify Company of the existence of the Note, mark the Note as
canceled, and forward the Note to Company or the Company’s
designee.


 



d.           Note
Holder shall indemnify Company for, and hold Company harmless from
and against, any damages, liabilities, losses, claims (including
any claim by any individual or entity for the collection of any
sums due under or with respect to such Note), or expenses arising
out of, or resulting from, (i) Note Holder’s inability to
find and deliver the Note to Company, or (ii) any inaccuracy or
misstatement of fact in, or breach of any representation, warranty,
agreement, or duty in or under, this Agreement.


 



3.           This
Agreement may be executed in counterparts, each of which shall be
identical and all of which, when taken together, shall constitute
one and the same instrument.


 



4.           This
Agreement shall be governed by and construed in accordance with the
law of the State of Delaware (without regard to any conflicts of laws
provisions thereof).


 



[Remainder
of page intentionally left blank]

 







 

-20-








 






 


The
parties have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the
date first written above.



 


	
 

	

“NOTE
HOLDER”

	
 


	
 

	
 

	
 


	
 

	


If by an individual:

	
 


	
 

	
 

	
 


	
 

	

Printed
Name:

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	


If by an entity:

	
 

	
 


	
 

	
 

	
 


	
 

	

Name of
entity

	
 


	
 

	
 

	
 

	
 


	
 

	

By:

	
 

	
 


	
 

	

Printed
Name:

	
 

	
 


	
 

	

Title:

	
 

	
 








 



DWAC Instructions:



______________________________________________



______________________________________________



______________________________________________



______________________________________________


 



 



ACCEPTED AND AGREED


 


 



“COMPANY”


 



OXIS INTERNATIONAL, INC.



a Delaware corporation


 


 


 



By:                                                                                 



Printed Name:                                                              



Title:                                                                              


 




 

-21-








 






 



EXHIBIT B


 



REGISTRATION RIGHTS


 


 


1.1 Company
Registration.  If the
Company shall determine to register any of its securities either
for its own account or the account of a security holder or holders,
other than a registration relating solely to employee benefit
plans, a registration relating to a corporate reorganization or
other Rule 145 transaction, or a registration on any registration
form that does not permit secondary sales, the Company
will:



 


(a) promptly
give written notice of the proposed registration to all Note
Holders; and



 


(b) use its 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 of this Exhibit
B below, and in any
underwriting involved therein, all of such Registrable Securities
as are specified in a written request or requests made by any Note
Holder or Note Holders received by the Company within 10 days after
such written notice from the Company is mailed or
delivered.  Such written request may specify all or a
part of a Note Holder’s Registrable
Securities.



 


1.2 Underwriting.  If
the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company
shall so advise the Note Holders as a part of the written notice
given pursuant to Section 1.1(a) of
this Exhibit
B.  In such event,
the right of any Note Holder to registration pursuant to this
Section 1.2 shall be conditioned upon such Note Holder’s
participation in such underwriting and the inclusion of such Note
Holder’s Registrable Securities in the underwriting to the
extent provided herein.  All Note Holders proposing to
distribute their securities through such underwriting shall
(together with the Company, the Other Selling Stockholders and
other holders of securities of the Company with registration rights
to participate therein distributing their securities through such
underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters
selected by the Company.



 


Notwithstanding any other provision of this
Section 1.2, if the underwriters advise the Company in writing
that marketing factors require a limitation on the number of shares
to be underwritten, the underwriters may (subject to the
limitations set forth below) limit the number of Registrable
Securities to be included in, the registration and
underwriting.  The Company shall so advise all holders of
securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and
underwriting shall be allocated, as follows: (i) first, to the
Company for securities being sold for its own account, and
(ii) second, to the Note Holders and Other Selling
Stockholders requesting to include Registrable Securities and Other
Shares in such registration statement based on
the pro rata percentage of Registrable Securities and
Other Shares held by such Note Holders and Other Selling
Stockholders, assuming conversion and (iii) third, to the Other
Selling Stockholders requesting to include Other Shares in such
registration statement based on the pro rata percentage of Other
Shares held by such Other Selling Stockholders, assuming
conversion.



 


If
a person who has requested inclusion in such registration as
provided above does not agree to the terms of any such
underwriting, such person shall also be excluded therefrom by
written notice from the Company or the underwriter.  The
Registrable Securities or other securities so excluded shall also
be withdrawn from such registration.  Any Registrable
Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such
registration.


 

             
1.3 Right to
Terminate Registration.  The
Company shall have the right to terminate or withdraw any
registration initiated by it under this Exhibit
B prior to the
effectiveness of such registration whether or not any Note Holder
has elected to include securities in such
registration.



 


1.4 Definitions.  The
following definitions shall apply for the purposes of
this Exhibit
B:



 


(a) “Other
Selling Stockholders”
shall mean persons other than Note Holders who, by virtue of
agreements with the Company, are entitled to include their Other
Shares in certain registrations hereunder.


 




 

-22-








 






 


(b) “Other
Shares” shall mean shares
of Common Stock, other than Registrable Securities (as defined
below), with respect to which registration rights have been
granted.



 


(c) “Registrable
Securities” shall mean
(i) shares of Common Stock issued or issuable pursuant to the
conversion of the Notes and (ii) any Common Stock issued as a
dividend or other distribution with respect to or in exchange for
or in replacement of the shares referenced in (i) above; provided,
however, that Registrable Securities shall not include any shares
of Common Stock described in clause (i) or (ii) above which have
previously been registered or which have been sold to the public
either pursuant to a registration statement or Rule 144, or
which have been sold in a private transaction in which the
transferor’s rights under this Agreement are not validly
assigned in accordance with this Agreement.



 


 


 


 


 




 

-23-