Document:

Exhibit 10.1

 

FIRST AMENDMENT TO LOAN AGREEMENT

 

This FIRST AMENDMENT
TO LOAN AGREEMENT (this “Agreement”) is made and entered into as of November 9, 2020, by and among PMI
GREENSBORO, LLC, a Delaware limited liability company, having its principal place of business at 406 Page Road, Nashville,
Tennessee 37205 (“TIC Borrower 1”), and MDR GREENSBORO, LLC, a Delaware limited liability company, having
its principal place of business at 11 S. 12th Street, Suite 401, Richmond, Virginia 23219 (“TIC Borrower 2”,
and, collectively with TIC Borrower 1, together with their respective successors and/or assigns, hereinafter, individually or collectively
as the context may require, “Borrower”), and BSPRT 2018-FL3 ISSUER, LTD., an exempted company incorporated
in the Cayman Islands with limited liability (as successor-in-interest to Benefit Street Partners Realty Operating Partnership,
L.P., a Delaware limited partnership, together with its successors and/or assigns, “Lender”).

 

W I T N E S S E T H:

 

WHEREAS, Borrower and
Lender entered into that certain Loan Agreement dated as of November 3, 2017, as amended by that certain Letter Agreement dated
as of May 4, 2020 (as may be further amended, restated, revised, modified, supplemented or amended and restated from time to time,
collectively, the “Loan Agreement”);

 

WHEREAS, Borrower and
Lender have agreed to amend the Loan Agreement as set forth herein.

 

NOW, THEREFORE, for
and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency whereof are hereby
acknowledged, Borrower and Lender hereby agree as follows:

 

1.                 
Recitals. The foregoing recitals are confirmed by the parties as true and correct and are incorporated herein by
reference. The recitals are a substantive, contractual part of this Agreement.

 

2.                 
Capitalized Terms. Capitalized terms used herein but not otherwise defined herein shall have the respective meanings
ascribed thereto in the Loan Agreement.

 

3.                 
Modification to Section 1.1 of the Loan Agreement.

 

(a)       As
of the date hereof, Section 1.1 of the Loan Agreement is amended by deleting the following definitions in their entirety and simultaneously
substituting in lieu thereof the following:

 

“Cash Sweep Period”
shall mean a period (i) commencing upon any of (A) the occurrence and continuance of an Event of Default beyond any applicable
cure period, (B) the Debt Service Coverage Ratio being less than 1.20 to 1.00; (C) the Debt Yield being less than 8.75%; or (D)
the occurrence of a Franchise Sweep Event; and (ii) expiring upon (w) with regard to any Cash Sweep Period commenced in connection
with clause (A) above, the cure (if applicable) of such Event of Default, (x) with regard to any Cash Sweep Period commenced in
connection with clause (B) above, the date that the Debt Service Coverage Ratio is equal to or greater than 1.30 to 1.00 for two
(2) consecutive calendar quarters, (y) with regard to any Cash Sweep Period commenced in connection with clause (C) above, the
date that the Debt Yield is equal to or greater than 9.25% for two (2) consecutive calendar quarters, and (z) with regard to any
Cash Sweep Period commenced in connection with clause (D) above, the expiration of all Franchise Sweep Periods. Notwithstanding
the foregoing, a Cash Sweep Period shall not be deemed to expire in the event that a Cash Sweep Period then exists for any other
reason. Additionally, notwithstanding anything to the contrary in the Loan Documents, no Cash Sweep Period shall commence pursuant
to clause (B) or (C) above during the period beginning on the First Amendment Closing Date and ending on May 9, 2022.

 

     

     

    

 

“LIBOR Rate” shall
mean the greater of (i) the sum of (A) the Adjusted LIBOR Rate and (B) the LIBOR Spread and (ii) six and one-half percent (6.50%).

 

“LIBOR Spread” shall
mean six and twenty-five hundredths percent (6.25%).

 

“Maturity Date”
shall mean May 9, 2022, as such date may be extended pursuant to and in accordance with Section 2.11 hereof, or such other date
on which the final payment of the principal amount of the Loan becomes due and payable as herein provided, whether at such stated
maturity date, by declaration of acceleration, or otherwise.

 

“Monthly Amortization Payment
Date” shall mean May 9, 2022.

 

“Reserve Accounts”
shall mean the Tax Account, the Insurance Account, the FF&E Reserve Account, the Immediate Repair Account, the Excess Cash
Flow Account, the Operating Expense Account, the PIP Reserve Account, the Interest Reserve Account and any other escrow account
established by this Agreement or the other Loan Documents (but specifically excluding the Cash Management Account, the Clearing
Account and the Debt Service Account).

 

“Reserve Funds”
shall mean the Tax and Insurance Funds, the FF&E Reserve Funds, the Immediate Repair Funds, the Excess Cash Flow Funds, the
Operating Expense Funds, the PIP Reserve Funds, the Interest Reserve Funds and any other escrow funds established by this Agreement
or the other Loan Documents.

 

(b)       As
of the date hereof, Section 1.1 of the Loan Agreement is amended by adding the following definitions in their entirety:

 

“First
Amendment Closing Date” shall mean November 9, 2020.

 

    	 	2	 

     

    

 

“First Amendment Prepayment”
shall have the meaning as set forth in Section 2.7.

  

“Interest
Reserve Account” shall have the meaning set forth in Section 7.10 hereof.

 

“Interest
Reserve Funds” shall have the meaning set forth in Section 7.10 hereof

 

“Lender
Party” shall mean (i) Lender, (ii) any Servicer, (iii) any receiver or other fiduciary appointed in a foreclosure or
other Creditors Rights Laws proceeding, (iv) any officers, directors, shareholders, partners, members, employees, agents, servants,
representatives, contractors, subcontractors, Affiliates or subsidiaries of any and all of the foregoing, and (v) the heirs, legal
representatives, successors and assigns of any and all of the foregoing (including, without limitation, any successors by merger,
consolidation or acquisition of all or a substantial portion of any Lender Party’s assets and business), in all cases whether
during the term of the Loan or as part of or following a foreclosure of the Loan.

 

“Unaffiliated
Third Party” shall mean any Person including, without limitation, the press or media, any bank, savings association,
corporation, company, limited liability company, group, partnership, trust or other business entity or any individual, but specifically
excluding, any Restricted Party, Manager, and Lender Party.

 

4.                 
Modification to Section 2.7 of the Loan Agreement. As of the date hereof, Section 2.7 of the Loan Agreement is amended
by adding the following as a new Section 2.7(e):

(e)       On
the First Amendment Closing Date, Borrower shall make a prepayment of the Loan in an amount equal to $200,000, accompanied by payment
of Breakage Costs and the Exit Fee, in each case to the extent applicable, and the applicable Interest Shortfall due in connection
therewith (the “First Amendment Prepayment”).

 

5.                 
Modification to Section 2.11 of the Loan Agreement. As of the date hereof, Section 2.11 of the Loan Agreement is
amended by deleting such section in its entirety and simultaneously substituting in lieu thereof the following:

 

Section 2.11
 Extension of the Maturity Date. Borrower shall have the option to extend the term of the Loan beyond the initial Maturity
Date for one (1) term (the “Extension Option”) of six (6) months (the “Extension Period”)
to November 9, 2022, if the Extension Option is exercised (the “Extended Maturity Date”) upon satisfaction of
the following terms and conditions (in each case as determined by Lender):

 

(a)        no
Event of Default shall have occurred and be continuing at the time the Extension Option is exercised and on the date that the Extension
Period is commenced;

 

    	 	3	 

     

    

 

(b)        Borrower
shall notify Lender of its irrevocable election to extend the Maturity Date as aforesaid not earlier than sixty (60) days and no
later than thirty (30) days prior to the Maturity Date; provided, however, that Borrower shall be permitted to revoke such notice
at any time up to five (5) Business Days before the Maturity Date provided that Borrower pays to Lender all actual out-of-pocket
costs incurred by Lender in connection with such notice, including, without limitation, any Breakage Costs;

 

(c)        Borrower
shall obtain and deliver to Lender prior to exercise of such Extension Option, pursuant to the applicable terms and conditions
of Section 2.8 hereof, a Replacement Interest Rate Cap Agreement, which Replacement Interest Rate Cap Agreement shall be effective
commencing on the first day of the Extension Period and shall have a maturity date not earlier than the last day of the Extension
Period;

 

(d)        Borrower
shall have paid to Lender the Extension Fee on the date the Extension Period is commenced;

 

(e)        
the Reserve Accounts shall contain the amounts required under this Agreement as of the date of commencement of the Extension Period,
including, without limitation, depositing amounts in the (i) Tax Account sufficient to pay Taxes through the Extended Maturity
Date, (ii) Insurance Account sufficient to pay all Insurance Premiums through the Extended Maturity Date, (iii) FF&E Reserve
Account sufficient to pay the cost of all FF&E expenditures through the Extended Maturity Date, and (iv) Operating Expense
Account sufficient to pay Operating Expenses due through the Extended Maturity Date, and Borrower shall deposit such additional
reserve funds with Lender as Lender may require;

 

(f)        each
Guarantor shall execute and deliver a reaffirmation, in form and substance satisfactory to Lender, of such Guarantor’s obligations
under each of the Loan Documents executed and delivered by such Guarantor;

 

(g)        Borrower
shall deliver to Lender such other certificates, documents or instruments as Lender may reasonably require, including, without
limitation, an Officer’s Certificate stating that all representations and warranties of Borrower set forth in Article 3 hereof
remain true and correct, subject to any changes in facts or circumstances permitted to have occurred, or not prohibited from having
occurred, pursuant to the terms of the Loan Documents (in which case such change of facts and circumstances shall be set forth
in such Officer’s Certificate with reference to the applicable representations and warranties) or setting forth any exceptions
to such representations and warranties, which exceptions shall be satisfactory to Lender;

 

    	 	4	 

     

    

 

(h)        if
required by Lender, Lender shall have received, at Borrower’s expense, a title continuation from the title company that provided
the Title Insurance Policy evidencing that there are no liens against the Property other than Permitted Encumbrances;

 

(i)        intentionally
omitted; and

 

(j)        in
connection with the Extension Option, the Debt Yield shall not be less than 11.25% at the time the Extension Option is exercised
and on the date that such Extension Period is commenced; provided, however, that if the foregoing condition is not satisfied, Borrower
may prepay a portion of the outstanding principal balance of the Loan as may be necessary so that such condition is satisfied,
provided that any such prepayment shall be subject to Borrower’s obligation to pay the proportionate share of the Exit Fee
applicable thereto pursuant to Section 2.10 hereof.

 

All references
in this Agreement and in the other Loan Documents to the Maturity Date shall mean the applicable Extended Maturity Date in the
event an Extension Option is exercised.

 

6.             Modification to Article 4 of the Loan Agreement. As of the date hereof, Article 4 of the Loan Agreement is amended
adding the following as a new Section 4.32:

 

Section 4.32Distributions.
Throughout the term of the Loan, Borrower shall not make any dividend or distribution to any Affiliate without Lender’s prior
written consent and approval.

 

7.             Modification to Section 6.2 of the Loan Agreement. As of the date hereof, Section 6.2 of the Loan Agreement is amended
by deleting such section in its entirety and simultaneously substituting in lieu thereof the following:

 

Section 6.2
Permitted Property Transfers between Borrower.

 

(a)       On
or before the First Amendment Closing Date, Borrower shall be permitted to transfer the Property between TIC Borrower 1 and TIC
Borrower 2 such that the organizational chart attached hereto as Exhibit A accurately reflects the ownership of the Property,
so long as, each of the following conditions is satisfied:

 

(i)        in
connection with such transfer, the TIC Percentage with respect to TIC Borrower 2 shall not decrease and TIC Borrower 2 shall continue
to handle the day-to-day management of the Property;

 

(ii)       no
Default or Event of Default has occurred and is continuing, or would occur as a result of such transfer;

 

(iii)       Lender
shall have received, at Borrower’s expense, a title continuation from the title company that provided the Title Insurance
Policy evidencing that there are no liens against the Property other than Permitted Encumbrances;

    	 	5	 

     

    

(iv)       Borrower
shall promptly provide Lender a revised version of the Organizational Chart reflecting any equity transfer consummated in accordance
with this Section 6.2(a);

 

(v)       Lender
shall have received an amendment to the TIC Agreement, and a memorandum thereof; each of which shall be in form and substance satisfactory
to Lender, and which memorandum shall be recorded in the official public records of the county in which the Property is located;

 

(vi)       Lender
shall receive evidence that Borrower recorded a conveyance deed, or other applicable document, in form and substance satisfactory
to Lender, which reflects such transfer,

 

(vii)       unless
waived by Lender, Lender shall receive a Rating Agency Confirmation and, if requested by Lender, Borrower shall deliver a REMIC
Opinion in connection with such transfer; and

 

(viii)       Borrower
shall pay all costs, fees and expenses of Lender in connection with the preparation, execution and delivery of the instruments,
documents and requirements pursuant to this Section 6.2 (including the reasonable fees and out-of-pocket expenses of counsel for
Lender with respect thereto).

 

(b)       With
Lender’s prior written consent, once per calendar year, Borrower shall be permitted to transfer the Property between TIC
Borrower 1 and TIC Borrower 2, so long as, with respect to any such transfer, each of the following conditions is satisfied:

 

(i)        in
connection with such transfer, the TIC Percentage with respect to TIC Borrower 2 shall not decrease and TIC Borrower 2 shall continue
to handle the day-to-day management of the Property;

 

(ii)       no
Default or Event of Default has occurred and is continuing, or would occur as a result of such transfer;

 

(iii)       Lender
shall have received, at Borrower’s expense, a title continuation from the title company that provided the Title Insurance
Policy evidencing that there are no liens against the Property other than Permitted Encumbrances;

 

    	 	6	 

     

    

 

(iv)       Borrower
shall promptly provide Lender a revised version of the Organizational Chart reflecting any equity transfer consummated in accordance
with this Section 6.2(b);

(v)       Lender
shall have received an amendment to the TIC Agreement, and a memorandum thereof; each of which shall be in form and substance satisfactory
to Lender, and which memorandum shall be recorded in the official public records of the county in which the Property is located;

 

(vi)       Lender
shall receive evidence that Borrower recorded a conveyance deed, or other applicable document, in form and substance satisfactory
to Lender, which reflects such transfer,

 

(vii)       unless
waived by Lender, Lender shall receive a Rating Agency Confirmation and, if requested by Lender, Borrower shall deliver a REMIC
Opinion in connection with such transfer; and

 

(viii)       Borrower
shall pay all costs, fees and expenses of Lender in connection with the preparation, execution and delivery of the instruments,
documents and requirements pursuant to this Section 6.2 (including the reasonable fees and out-of-pocket expenses of counsel for
Lender with respect thereto).

 

8.                 
Modification to Section 7.3 of the Loan Agreement. As of the date hereof, Section 7.3 of the Loan Agreement is amended
by deleting Section 7.3(a) in its entirety and simultaneously substituting in lieu thereof the following:

 

(a)       Beginning
on the Monthly Payment Date occurring on December 9, 2019, and on each Monthly Payment Date thereafter, Borrower shall deposit
into an Eligible Account held by Lender or Servicer (the “FF&E Reserve Account”) for FF&E costs, an
amount equal to 1/12th of 4% of the greater of (i) gross revenues for the Property in the preceding calendar year or (ii) the projected
gross revenues for the Property for the current calendar year according to the most recently submitted Annual Budget (the “FF&E
Reserve Monthly Deposit”). Notwithstanding the foregoing, for the period beginning on the First Amendment Closing Date
and ending on May 9, 2022, Borrower shall not be required to make any deposits into the FF&E Reserve Account. Amounts deposited
pursuant to this Section 7.3 are referred to herein as the “FF&E Reserve Funds”. Lender may reassess its
estimate of the amount necessary for FF&E costs from time to time, and may require Borrower to increase the monthly deposits
required pursuant to this Section 7.3 upon thirty (30) days’ notice to Borrower if Lender determines in its reasonable discretion
that an increase is necessary to maintain proper operation of the Property.

 

    	 	7	 

     

    

 

9.                 
Modification to Article 7 of the Loan Agreement. As of the date hereof, Article 7 of the Loan Agreement is amended
adding the following as a new Section 7.10:

 

Section 7.10Interest
Reserve Funds. On the First Amendment Closing Date, Borrower shall deposit (or shall cause there
to be deposited) into an Eligible Account held by Lender or Servicer (the “Interest Reserve Account”) the sum of $250,000.00,
to be held as additional security for the Debt and all of the other Obligations. Amounts deposited pursuant to this Section 7.10
are referred to herein as the “Interest Reserve Funds”. Provided no Event of Default has occurred and is continuing,
on each Monthly Payment Date on which a shortfall exists in available revenues from the Property to pay all or any portion of the
Monthly Debt Service Payment and/or required deposits into the Reserve Accounts due on such Monthly Payment Date (as demonstrated
to Lender’s reasonable satisfaction including, without limitation, by virtue of an Officer’s Certificate detailing
the applicable shortfall and the amount(s) to be paid by the disbursement of Interest Reserve Funds), Lender shall disburse an
amount of available Interest Reserve Funds, up to the amount of such shortfall, in payment of such amount(s).

 

10.             
Modifications to Article 12 of the Loan Agreement.

 

(a)       As
of the date hereof, Section 12.1(a) of the Loan Agreement is amended by (i) deleting “and/or” from the end of Section
12.1(a)(7)(xiii); (ii) deleting “.” from the end of Section 12.1(a)(7)(xiv) and simultaneously substituting “;
and/or” in lieu thereof; and (iii) adding to the following sentence to the end of Section 12.1(a):

 

(xv)       any
violation or breach of the covenant contained in Section 4.32 hereof.

 

(b)       As
of the date hereof, Article 12 of the Loan Agreement is amended by adding to the following sentence to the end of Section 12.1:

 

Additionally, notwithstanding the foregoing,
the Debt shall also be fully recourse to Borrower in the event that Borrower or any other Borrower Party, as applicable, fails
to comply with the requirements of 15.13 hereof.

 

11.             
Modification to Section 15.13 of the Loan Agreement. As of the date hereof, Section 15.13 of the Loan Agreement is
amended by deleting such section in its entirety and simultaneously substituting in lieu thereof the following:

 

Section 15.13Disclosure.

 

(a)       Except
as expressly set forth herein or otherwise expressly approved by Lender in writing, Borrower shall not, and shall not permit any
Borrower Party, their Affiliates and agents to: (i) provide a copy of this Agreement or the other Loan Documents or any portion
of the foregoing to any Unaffiliated Third Party; (ii) disclose any of the terms or provisions of this Agreement or the other Loan
Documents, or even the mere existence of this Agreement or the other Loan Documents to any Unaffiliated Third Party; or (iii) disclose
any of the prospective parts of this Agreement or the other Loan Documents which were discussed in negotiations prior to the execution
of this Agreement or the Loan Documents to any Unaffiliated Third Party. Notwithstanding the foregoing, Borrower may, and may permit
any Borrower Party, their Affiliates or agents to make the following disclosures: (a) disclosures mandated by legislative, judicial
and/or administrative order, rule or regulation; and (b) disclosures to tax preparers, tax advisors, independent public accountants,
attorneys and insurers, past, present and prospective, provided that such tax preparers, tax advisors, independent public accountants,
attorneys and insurers agree to keep all such information in strict confidence except as required by this Agreement, law, regulation,
or the standards of the accounting or auditing profession. Borrower agrees and acknowledges that a breach of this Section 15.13
by any Borrower Party, their Affiliates, or agents may cause irreparable damage to Lender. Therefore, in addition to all other
rights and remedies available to Lender in accordance with applicable law, Lender shall be entitled to equitable and injunctive
relief to prevent the unauthorized use or disclosure of the confidential information in violation of this Section 15.13.

 

    	 	8	 

     

    

 

(b)       All
news releases, publicity or advertising by any Borrower Party, their Affiliates, and agents through any media intended to reach
the general public which refers to this Agreement or the other Loan Documents or the financing evidenced by this Agreement or the
other Loan Documents, to Lender or any of its Affiliates shall be subject to the prior written approval of Lender, not to be unreasonably
withheld.

 

(c)       Borrower
agrees, on its behalf and on behalf of each Borrower Party, their Affiliates, and agents that they shall not, whether in oral or
written form, make any remarks or publish, participate in the publication of, or direct others to make or publish, any statements,
accounts or stories disparaging or denigrating the conduct or character of any Lender Party. The foregoing includes but is not
limited to a prohibition on posting, or otherwise disclosing defamatory, disparaging, or critical statements about any Lender Party
on the Internet or in any other paper or electronic media outlet, including but not limited to news organizations, blogs, websites,
newspapers, email or social media websites.

 

(d)       The
obligations and liabilities of each Borrower Party, their Affiliates, and agents under this Section 15.13 shall fully survive indefinitely
notwithstanding any termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or
delivery of a deed in lieu of foreclosure of the Security Instrument.

 

12.             
Replacement of Exhibit.  Exhibit A to the Loan Agreement is hereby amended by deleting such exhibit in its
entirety and simultaneously substituting in lieu thereof Exhibit A attached hereto.

 

    	 	9	 

     

    

 

13.             
Representations and Warranties. Borrower hereby represents and warrants as follows:

 

(a)       after
giving effect to this Agreement each of the representations and warranties in Article 3 of the Loan Agreement and in each
of the other Loan Documents are true and correct in all material respects on and as of the date hereof as though made on and as
of such date;

 

(b)       no
Event of Default has occurred and is continuing as of the date hereof;

 

(c)       the
execution, delivery and performance by Borrower of this Agreement has been duly authorized by all requisite company action on the
part of Borrower and will not violate any of its articles of organization, operating agreement, bylaws or other organizational
documents; and

 

(d)       this
Agreement has been duly executed and delivered by Borrower, and this Agreement constitutes the legal, valid and binding obligation
of Borrower enforceable against it in accordance with its terms.

 

14.             
Conditions to Effectiveness. The effectiveness of this Agreement is subject to Lender’s receipt of the following
in form and substance satisfactory to Lender:

 

(a)       counterparts
of this Agreement executed by and on behalf of Borrower and Lender;

 

(b)        executed
counterparts of the Consent and Reaffirmation of Guarantor attached hereto and made a part hereof duly executed by each Guarantor;

 

(c)       the
First Amendment Prepayment;

 

(d)       an
extension fee in an amount equal to one-half of one percent (0.50%) of the outstanding principal amount of the Loan;

 

(e)       pursuant
to the applicable terms and conditions of Section 2.8 of the Loan Agreement, a Replacement Interest Rate Cap Agreement, which Replacement
Interest Rate Cap Agreement shall be effective commencing on November 9, 2020, and shall have a maturity date not earlier than
the Maturity Date;

 

(f)       a
title continuation from the title company that provided the Title Insurance Policy evidencing that there are no liens against the
Property other than Permitted Encumbrances; and

 

(g)       all
reasonable fees and expenses payable or reimbursable by Borrower as of the date hereof, including, without limitation, all costs,
fees and expenses of Lender in connection with the preparation, execution and delivery of this Agreement and the other instruments
and documents to be delivered pursuant hereto (including the reasonable fees and out-of-pocket expenses of counsel for Lender with
respect thereto).

 

    	 	10	 

     

    

 

15.             
No Other Agreements; No Novation. Except as expressly modified and amended hereby, the Loan Agreement shall be and
remain in full force and effect and unchanged and is hereby ratified and confirmed. The execution, delivery and effectiveness of
this Agreement shall not, except as expressly provided herein, operate as an amendment, waiver or modification of any right, power
or remedy of Lender under any of the Loan Documents, nor constitute an amendment, waiver or modification of any other provisions
of the Loan Documents. Neither the execution and delivery of this Agreement, nor the consummation of any transaction contemplated
hereunder, is intended to constitute a novation of the Loan Agreement or of any of the other Loan Documents or any obligations
thereunder. This Agreement shall constitute a Loan Document for all purposes.

 

16.             
Reaffirmation and Ratification. Borrower acknowledges and agrees that the security interests and liens granted to
Lender pursuant to the Loan Documents shall remain outstanding and in full force and effect in accordance with the Loan Documents,
and shall continue to secure the Obligations, and that the security and other interests granted to Lender thereby are hereby ratified,
confirmed and continued by execution and delivery of this Agreement. The Loan Documents shall remain extant and in full force and
effect following the execution and delivery of this Agreement and the other Loan Documents executed in connection therewith.

 

17.             
Applicable Law. The governing law and related provisions contained in Section 15.4 of the Loan Agreement are
hereby incorporated by reference as if fully set forth herein.

 

18.             
Counterparts and Headings. This Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument. The headings of this Agreement are for convenience of reference only, are not part
of this Agreement and are not to affect the construction of, or to be taken into consideration interpreting, this Agreement.

 

[SIGNATURES BEGIN ON THE FOLLOWING PAGE]

 

    	 	11	 

     

    

 

IN WITNESS WHEREOF,
Borrower and Lender have caused this Agreement to be executed as of the day and year first above written.

 

	 	BORROWER:
	 	 
	 	PMI GREENSBORO, LLC, a Delaware limited liability company
	 	 
	 	By:  Peter Mueller, Inc., a Virginia corporation
	 	Its: Manager (and sole member)

  

	 	By:	/s/ Kurt A. Shirm
	 	Name:  Kurt A. Schirm
	 	Title: President

  

  

	 	MDR GREENSBORO, LLC, a Delaware limited liability company
	 	 
	 	By: 	Medalist Diversified Holdings, L.P., a Delaware limited partnership
	 	Its: 	Sole Owner

 

	 	 	By: 	Medalist Diversified REIT, Inc., a Maryland corporation
	 	 	Its: 	General Partner
	 	 	 	 
	 	 	 	By:	/s/ William R. Elliott
	 	 	 	Name:  William R. Elliott
	 	 	 	Title: Co-President

   

 

 [SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

     

     

    

 

        

	 	LENDER:
	 	 	 
	 	BSPRT 2018-FL3 ISSUER, LTD.,
an exempted company incorporated in the Cayman Islands with limited liability 
	 	 
	 	 
	 	By:	 /s/ Micah Goodman
	 	Name: Micah Goodman
	 	Title: Authorized Signatory 

 

  

     

     

    

 

CONSENT AND REAFFIRMATION OF GUARANTOR

 

Guarantor hereby (a)
consents to the terms and conditions of this Agreement; (b) reaffirms its obligations pursuant to that certain Guaranty of Recourse
Obligations dated November 3, 2017, (the “Guaranty”), and confirms and agrees that, notwithstanding this Agreement
and consummation of the transactions contemplated thereby, the Guaranty and all of the Guarantor’s covenants, obligations
and liabilities under the Guaranty continue in full force and effect with respect to obligations guaranteed, as the same may be
modified by this Agreement; and (c) acknowledges and agrees that no consent of the Guarantor shall be required for any future modification
of the Loan Documents or the obligations thereunder.

 

 

	 	/s/ Kurt A. Schirm
	 	KURT A. SCHIRM
	 	 	 
	 	 	 
	 	/s/ Thomas E. Messier
	 	THOMAS E. MESSIER
	 	 	 
	 	 	 
	 	/s/ William R. Elliott
	 	WILLIAM R. ELLIOTT
	 	 	 

 

	 	PETER MUELLER, INC., a Virginia
	 	corporation 
	 	 
	 	By:	/s/ Kurt A. Shirm
	 	Name:  Kurt A. Schirm
	 	Title: Presidentgtbp_ex1019

  Exhibit 10.19

 

 

SETTLEMENT
AGREEMENT

 

This
Settlement Agreement (the “Agreement”) is made and
entered into by and among Adam Kasower (“Kasower”), East Ventures,
Inc., a British Virgin Islands company (“East Ventures”), SV Booth
Investments III, LLC, a Delaware limited liability company
("SC Booth") and
Theorem Group, LLC, a California limited liability company
("Theorem Group")
(collectively, Kasower, East Ventures, SV Booth and Theorem Group
are referred to herein as "Claimants"), and GT Biopharma
Inc. (“GT
Biopharma”). GT Biopharma and Claimants are each
referred to as a “Party” and, collectively,
as the “Parties.”

 

WHEREAS, from on or about October 1,
2009 and through 2017, Claimants Theorem Group, East Ventures, SV
Booth, and Kasower each invested in GT Biopharma and its
predecessor, formerly known as Oxis International, Inc., through a
Securities Purchase Agreement (the “SPA”) pursuant to which
Claimants purchased from GT Biopharma convertible warrants and
preferred stock (the "Securities");

 

WHEREAS, Claimants allege that on August
27, 2017, GT Biopharma completed a restructuring of its
unregistered debt and equity securities (the
“Restructuring”), wherein debtholders of GT Biopharma
received one share of GT Biopharma’s $0.001 par value common
stock (“Common Stock”) for each one dollar and twenty
cents ($1.20) of principal and accrued interest owed to them by GT
Biopharma; warrant holders exercised their warrants on a cashless
basis into one share of Common Stock for each warrant held; and
preferred stock holders exchanged their preferred stock pursuant to
a preferred stock exchange agreement;

 

WHEREAS, Claimants allege that on August
27, 2017, pursuant to the Restructuring, certain holders of
securities of GT Biopharma were issued a total of 1,513,548 shares
of newly issued GT Biopharma’s $0.001 par value series J
preferred stock (the “Series J Preferred”). The Series
J Preferred was to convert one to one (1:1) into the Common Stock
from time to time as converted by the holders. The Series J was
subsequently reported on GT Biopharma’s filings with the
Securities and Exchange Commission
(“SEC”);

 

WHEREAS, Claimants allege that
on January 29, 2019 GT Biopharma
notified certain investors that it had issued new series J-1
preferred shares (the “Series J-1 Preferred”) to
replace the unconverted balance of Series J Preferred and that the
Series J-1 Preferred was materially different from the Series J
Preferred allegedly allowing the holders to receive a most favored
nations treatment on conversion based on GT Biopharma’s
ongoing financing;

 

WHEREAS, Claimants allege that the
subsequent exchange of the Series J Preferred to the Series J-1
Preferred and the additional issuances of Series J-1 Preferred were
material breaches of the Restructuring and allegedly causing
Claimants substantial damage and harm in the form of
dilution;

 

WHEREAS, a dispute arose between GT
Biopharma and Claimants regarding GT Biopharma’s obligations
under the terms of the SPA and the Securities issued thereunder and
GT Biopharma disputes Claimants' allegations;

 

 

 

 

 

WHEREAS, on November 26, 2019, Claimants
caused their counsel to send a letter to GT Biopharma, alleging, in
part, that Claimants had "suffered damages in the aggregate of more
than $5,000,000" (the "Demand Letter") and enclosing a draft
complaint (the "Draft Complaint");

 

WHEREAS, the Parties previously engaged
in settlement discussions, including the preparation of
preliminary, draft settlement documents, which did not receive
approval from, and were expressly rejected by, the GT Biopharma
Board;

 

WHEREAS, the Parties desire to fully
settle and resolve all issues, disputes, claims and causes of
action that were raised, or that could have been raised, relating
in every and any way to the Demand Letter and/or the Draft
Complaint, to avoid further expense and inconvenience of
litigation, without any admission of liability or wrongdoing on the
part of GT Biopharma, its officers, agents or
shareholders;

 

WHEREAS, GT Biopharma denies each and
every one of Claimants' allegations of wrongful conduct, and denies
that any conduct challenged by Claimants caused any damage
whatsoever, and have asserted a number of defenses to Claimants'
claims;

 

WHEREAS, the Parties agree that this
Agreement shall not be deemed or construed to be an admission or
evidence of any violation of any statute or law or of any liability
or wrongdoing by GT Biopharma, its officers, agents or
shareholders, or of the truth of any claim or allegation or a
waiver of any defenses thereto;

 

AND WHEREAS, the Parties, each acting on
his, her or its own behalf, have approved of the settlement terms
described below.

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, including in return for the promises and covenants
undertaken by the Parties herein and the releases given herein, the
Parties agree as follows:

 

1. Settlement Exchange: Within
five (5) Business Days of the date on which this Agreement is fully
executed by the Parties, GT Biopharma shall issue and deliver to
each of Claimants a convertible note (the “Settlement Notes”), in
the form attached hereto as Exhibit A, in the following
amounts:

 

TheoremGroup

$303,726.40

East
Venture       

$112,788.48

Kasower                

$500,078.58

SV
Booth     

 $294,245.54

 

The
date on which the Settlement Notes are delivered to Claimants is
hereinafter referred to as the “Exchange Date.” As used
herein, “Business
Day” means any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are
authorized or required to remain closed.

 

 

2

 

 

2. Releases
and Covenant Not to Sue:

 

a. Claimants' Releases: Claimants
on their own behalf, and for and on behalf of theirs parent
companies, subsidiaries, and direct or indirect affiliates, and any
and all of their respective present, former, and future general
partners, limited partners, officers, directors, shareholders,
managers, members, trustees, employees, consultants, attorneys, and
other agents in their respective capacities as such, and the heirs,
executors, administrators, successors, and assigns of each of them
(collectively, the “Claimants' Releasors”),
hereby completely and irrevocably releases and forever and finally
discharges any and all Claims (as defined below), rights, demands,
obligations, causes of action, counterclaims, defenses, rights of
setoff, rights of rescission, liens, disputes, damages,
liabilities, debts, costs, expenses (including attorneys’
fees), payments, capital contributions, fees, bonds, covenants,
contracts, agreements, judgments, charges, or losses of any kind or
character whatsoever, in law or equity, whether presently known or
unknown, asserted or unasserted, fixed or contingent, in contract,
tort, or otherwise, that any of the Claimants' Releasors had,
presently may have or may have in the future against GT Biopharma,
as well as, to the extent applicable, each of their respective
parent companies, subsidiaries, direct and indirect affiliates, and
any and all of their respective present, former and future
officers, directors, shareholders, managers, members, partners,
employees, consultants, attorneys, and other agents in their
respective capacities as such (collectively, the
“GT Biopharma and
Individual Released Parties”), arising out of or by
reason of any cause, matter, or thing relating or ancillary to the
Demand Letter or Draft Complaint. The release shall apply to Claims
whether arising under any statute, rule or regulation, or under the
law of any country, state, province, territory, or any other
jurisdiction, or under principles of contract law, common law, or
equity; provided that, and consistent with Section 3(f) of this
Agreement, nothing herein shall release Claims arising out of this
Agreement or any Settlement Documents (as defined
below).

 

b. GT Biopharma’s Releases.
GT Biopharma on its own behalf, and for and on behalf of its parent
companies, subsidiaries, and direct or indirect affiliates, and any
and all of their respective present, former, and future general
partners, limited partners, officers, directors, shareholders,
managers, members, trustees, employees, consultants, attorneys, and
other agents in their respective capacities as such, and the heirs,
executors, administrators, successors, and assigns of each of them
(collectively, the “GT Biopharma Releasors”),
hereby completely and irrevocably releases and forever and finally
discharges any and all Claims, rights, demands, obligations, causes
of action, counterclaims, defenses, rights of setoff, rights of
rescission, liens, disputes, damages, liabilities, debts, costs,
expenses (including attorneys’ fees), payments, capital
contributions, fees, bonds, covenants, contracts, agreements,
judgments, charges, or losses of any kind or character whatsoever,
in law or equity, whether presently known or unknown, asserted or
unasserted, fixed or contingent, in contract, tort, or otherwise,
that any of the GT Biopharma Releasors had, presently may have or
may have in the future against Claimants, as well as each of
Claimants' investment managers, subsidiaries, and direct or
indirect affiliates, and any and all of their respective direct or
indirect present, former and future officers, directors,
shareholders, managers, members, partners, employees, consultants,
attorneys, and other agents in their respective capacities as such
(collectively, the “Claimants Released
Parties”), arising out of or by reason of any cause,
matter, or thing relating or ancillary to the Demand Letter or the
Draft Complaint. The releases shall apply to Claims whether arising
under any statute, rule or regulation, or under the law of any
country, state, province, territory, or any other jurisdiction, or
under principles of contract law, common law, or equity; provided
that, consistent with Section 2(e) of this Agreement, nothing in
this release shall release Claims arising out of this Agreement or
any Settlement Documents. For the avoidance of doubt, the release
in this Section 2(b) shall have the same effect as a dismissal with
prejudice.

 

 

 

3

 

 

c. Covenant Not to Sue; Defense:
Except as necessary to enforce this Agreement and the Settlement
Documents, each Party on its own behalf and on behalf of any other
Person purporting to act by, through or on behalf of such Party,
hereby covenants, represents, and warrants that it will forever
refrain from suing to enforce or to recover, directly or
indirectly, under any Claims released by this Agreement, to the
extent such releases become effective. This Agreement may be
pleaded as a full and complete defense to, and may be used as the
basis for an injunction against any action, suit or other
proceeding which may be instituted, prosecuted or attempted in
breach of the undertakings contained here. As used herein,
“Person” means an
individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization,
any other entity and any government or any department or agency
thereof.

 

d. Unknown Claims: The Parties
each acknowledge that he, she or it may discover facts in addition
to or different from those that he, she or it now knows or believes
to be true with respect to the matters released herein, but that it
is the express intention of the Parties, except as necessary to
enforce this Agreement and the Settlement Documents, to fully,
finally and forever settle and release any and all claims released
hereby, known or unknown, suspected or unsuspected, which now
exists, heretofore existed, or may hereafter exist, and without
regard to the subsequent discovery or existence of such additional
or different facts with respect to the matters released hereby. In
furtherance of this intention, the Parties each acknowledge that
they have been advised of and expressly waive any and all
provisions, rights and benefits of California Civil Code Section
1542, which provides:

 

A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR
RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT, IF KNOWN BY
HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR OR RELEASED PARTY.

 

The
Parties shall also be deemed expressly to have waived any and all
provisions, rights and benefits conferred by any law of any state
or territory of the United States, or principle of common law,
which is similar, comparable, or equivalent to California Civil
Code Section 1542 or that would otherwise limit the releases and
waivers contained in this Agreement.

 

The
Parties each acknowledge that the foregoing waiver was separately
bargained for and is an integral aspect of the Agreement of which
this release is a part.

 

e. Enforcement of This Agreement:
For the avoidance of doubt, notwithstanding the foregoing or any
other provisions of this Agreement, the releases and covenants not
to sue in this Section 2 shall not apply to any disputes or claims
that may arise in the future relating to the enforcement of the
terms of this Agreement or the Settlement Documents issued pursuant
thereto.

 

3. No Admission: It is understood
and agreed that this Agreement is a compromise and settlement of
the Claims released herein, and it shall not be construed as an
admission, concession, or indication of the validity of any Claim,
defense, liability, obligation, or wrongdoing.

 

 

 

4

 

 

4. Representations and Covenants of GT
Biopharma:

 

a. Authorization; Enforcement;
Validity. GT Biopharma has the requisite corporate power and
authority to enter into and perform its obligations under this
Agreement, the Settlement Notes and each of the other agreements,
instruments, certificates or documents entered into by the parties
hereto in connection with the transactions contemplated by this
Agreement (collectively, the “Settlement Documents”)
and to issue the Settlement Notes, all in accordance with the terms
hereof and thereof. The execution and delivery of this Agreement
and the other Settlement Documents by GT Biopharma and the
consummation by GT Biopharma of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of
the Settlement Notes, have been duly authorized by GT
Biopharma’s Board of Directors, and no further filing,
consent, or authorization is required by GT Biopharma, its Board of
Directors or its stockholders. This Agreement and the other
Settlement Documents are duly executed and delivered (or will be
delivered) by GT Biopharma, and constitute (or will constitute) the
legal, valid and binding obligations of GT Biopharma, enforceable
against GT Biopharma in accordance with their respective terms,
except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights
and remedies.

 

b. Issuance of Securities. In each
case subject to the terms of the Settlement Documents, the issuance
of the Settlement Notes are duly authorized and, upon issuance in
accordance with the terms hereof, shall be validly issued, fully
paid and free from all preemptive or similar rights, taxes, liens
and charges and other encumbrances with respect to the issue
thereof and the shares of Common Stock issuable upon conversion
thereof (“Conversion Shares”) (when issued) shall be
validly issued, fully paid and non-assessable and free from all
preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof, with the holder of
the Conversion Shares (when issued) being entitled to all rights
accorded to a holder of Common Stock. As of the Exchange Date, a
number of shares of Common Stock shall have been duly authorized
and reserved for issuance which equals or exceeds (the
“Required Reserved
Amount”) the sum of 150% of the maximum number of
Conversion Shares of Common Stock issuable pursuant to the terms of
the Settlement Note based on the initial Conversion Price (as
defined in the Settlement Note) (without taking into account any
limitations on the issuance thereof pursuant to the terms of the
Settlement Note). As of the date hereof, there are 672,834,264
shares of Common Stock authorized and unissued. So long as
Claimants holds the Settlement Note, GT Biopharma shall take use
commercially reasonable efforts to at all times have authorized,
and reserved for the purpose of issuance, no less than the Required
Reserve Amount.

 

c. No Conflicts. The execution,
delivery and performance of the Settlement Documents by GT
Biopharma and the consummation by GT Biopharma of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance of the Settlement Notes) will not (i) result in a
violation of the restated certificate of incorporation of GT
Biopharma or its bylaws or (ii) result in a violation of any law,
rule, regulation, order, judgment or decree applicable to GT
Biopharma or any of its Subsidiaries, or by which any property or
asset of GT Biopharma or any of its Subsidiaries is bound or
affected, except, in the case of clauses (iii) above, where such
conflict, violation or default would not result, individually or in
the aggregate, in a Material Adverse Effect. For purposes of this
Agreement, “Material
Adverse Effect” means any material adverse effect on
the business, properties, assets, liabilities, operations, results
of operations or condition (financial or otherwise) of GT Biopharma
and its Subsidiaries, taken as a whole, or on the transactions
contemplated hereby or on the other Settlement Documents or by the
agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of GT
Biopharma to perform any of its obligations under any of the
Settlement Documents.

 

 

 

5

 

 

d. Consents. GT Biopharma is not
required to obtain any consent, authorization or order of, or make
any filing or registration with, any court, governmental agency or
any regulatory or self-regulatory agency or any other Person in
order for it to execute, deliver or perform any of its obligations
under or contemplated by the Settlement Documents, in each case in
accordance with the terms hereof or thereof, other than (i) the
filings required pursuant to Section 5(h) of this Agreement, (ii)
the notice and/or application(s), if any, required to be delivered
pursuant to Section 5(i) of this Agreement, (iii) any filings
required to be made under applicable state securities laws and
(iii) those already obtained or effected on or prior to the date
hereof.

 

e. FAST
Compliance. While any of the Settlement Notes are
outstanding, GT Biopharma shall maintain a transfer agent that
participates in the DTC Fast Automated Securities Transfer
Program.

 

f. Shell
Company Status. GT
Biopharma is not, and has never been,
an issuer identified in Rule 144(i)(1) of the U.S. Securities Act
of 1933, as amended (the “Act”).

 

g. SEC Filings.  As of their
respective filing dates, GT Biopharma’s filings with the
United States Securities and Exchange Commission (the
“SEC”)
under the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”) since January 1, 2019 (the “SEC Documents”), complied
in all material respects with the requirements of the Exchange Act
and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.

 

h. Disclosure of Transactions and Other
Material Information.  GT Biopharma shall file a
current report on Form 8-K reasonably acceptable to Claimants (the
“8-K
Filing”) on or before 8:30 a.m., New York City time,
on the first Business Day after this Agreement has been duly
executed and delivered, in the form required by the 1934 Act,
relating to the transactions contemplated by this Agreement and
attaching a form of this Agreement and the form of Settlement Notes
(including, without limitation, all schedules and exhibits to such
agreements to the extent required by the rules of the SEC) as an
exhibit to such filing.  From and after the filing of the 8-K
Filing with the SEC, Claimants shall not be in possession of any
material, nonpublic information received from GT Biopharma, any of
its Subsidiaries or any of their respective officers, directors,
employees or agents that is not disclosed in the 8-K Filing. In
addition, effective upon the filing of the 8-K Filing, GT Biopharma
acknowledges and agrees that any and all confidentiality or similar
obligations under any agreement, whether written or oral, between
GT Biopharma, any of its Subsidiaries or any of their respective
officers, directors, employees or agents, on the one hand, and
Claimants or any of their respective affiliates, on the other hand,
shall terminate and be of no further force or effect. GT Biopharma
shall not, and shall cause each of its Subsidiaries and its and
each of their respective officers, directors, employees and agents,
not to, provide Claimants with any material, nonpublic information
regarding GT Biopharma or any of its Subsidiaries from and after
the date hereof without the express prior written consent of
Claimants or as otherwise contemplated hereby. GT Biopharma
understands and confirms that Claimants will rely on the foregoing
representations in effecting transactions in securities of GT
Biopharma. 

 

 

 

6

 

 

i. Listing.  GT Biopharma
shall, if applicable, take all steps necessary to promptly secure
the listing or quotation of all of (i) Conversion Shares without
regard to any limitation on the conversion of the Settlement Note
and (ii) any capital stock of GT Biopharma issued or issuable with
respect to the Conversion Shares, as applicable, as a result of any
stock split, stock dividend, recapitalization, exchange or similar
event or otherwise (the “Listed Securities”) upon
the OTCQB (the “Principal Market”) or any
other national securities exchange or automated quotation system,
if any, upon which the Common Stock is then listed.  GT
Biopharma shall pay all fees and expenses in connection with
satisfying its obligations under this Section 5(i).

 

j. No
Integration Actions. None of GT Biopharma, any of its
affiliates or any Person acting on behalf of GT Biopharma or such
affiliate will sell, offer for sale or solicit offers to buy in
respect of any security (as defined in the 1933 Act) that would be
integrated with the issuance of the Settlement Notes in a manner
that would require the registration under the 1933 Act of the
issuance to Claimants or require shareholder approval under the
rules and regulations of the Principal Market, and GT Biopharma
will take all action that is appropriate or necessary to assure
that its offerings of other securities will not be integrated for
purposes of the 1933 Act or the rules and regulations of the
Principal Market with the issuance of the Settlement Notes
contemplated hereby.

 

k. Variable Securities. For so
long as any of the Settlement Notes remain outstanding, GT
Biopharma shall not, in any manner, (i) issue or sell any rights,
warrants or options to subscribe for or purchase Common Stock or
directly or indirectly convertible into or exchangeable or
exercisable for Common Stock at a price which varies with the
market price of the Common Stock, including by way of one or more
reset(s) to any fixed price, unless the conversion, exchange or
exercise price of any such security cannot be less than the then
applicable Conversion Price with respect to the Common Stock into
which any of the Settlement Notes is convertible (collectively,
“Variable Rate
Transactions”) or (ii) enter into any agreement, or
issue any securities pursuant to any agreement, including, without
limitation, an equity line of credit, at-the-market offering or
similar agreement, whereby GT Biopharma may issue securities at a
future determined price.

 

l. Preservation of Corporate
Existence. The Company shall preserve and maintain its
corporate existence, rights, privileges and franchises in the
jurisdiction of its incorporation, and qualify and remain
qualified, as a foreign entity in each jurisdiction in which such
qualification is necessary in view of its business or operations
and where the failure to qualify or remain qualified might
reasonably have a Material Adverse Effect upon the financial
condition, business or operations of GT Biopharma, taken as a
whole.

 

m. Indemnification. To the fullest
extent permitted by law, GT Biopharma will, and hereby does,
indemnify, hold harmless and defend Claimants, the directors,
officers, partners, members, employees, agents, representatives of,
and each Person, if any, who controls any Investor within the
meaning of the 1933 Act or the 1934 Act (each, an
“Indemnified
Person”), against any losses, Claims, damages,
liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys’ fees, amounts paid in settlement or
expenses, joint or several (collectively, “Claims”), incurred in
investigating, preparing or defending any action, Claim, suit,
inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a
party thereto (“Indemnified Damages”), to
which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of, relate to, or are based upon: (a) any
misrepresentation or breach of any representation or warranty made
by GT Biopharma in the Settlement Documents, (b) any breach of any
covenant, agreement or obligation of GT Biopharma contained in the
Settlement Documents or (c) any cause of action, suit or claim
brought or made against such Indemnified Person by a third party
and arising out of, resulting from, or ancillary to the
transactions contemplated by the Settlement Documents (unless such
action is based upon a breach of such Indemnified Person’s
representations, warranties or covenants under the Settlement
Documents or any agreements or understandings such Indemnified
Person may have with any such stockholder or any violations by such
Indemnified Person of state or federal securities laws or any
conduct by such Indemnified Person which constitutes fraud, gross
negligence, willful misconduct or malfeasance). GT Biopharma shall
reimburse the Indemnified Persons, promptly as such expenses are
incurred and are due and payable, for any reasonable and invoiced
legal fees or other reasonable and invoiced expenses incurred by
them in connection with investigating or defending any such
Claim. 

 

 

 

7

 

 

5. Representations and Covenants of
Claimants:

 

a. Authorization; Enforcement;
Validity. Each of Claimants has the legal capacity and right
to execute, deliver, enter into and perform the obligations under
this Agreement and each of the other Settlement Documents in
accordance with the terms hereof and thereof. This Agreement and
the other Settlement Documents are duly executed and delivered by
each of Claimants, and constitute the legal, valid and binding
obligations of each of Claimants, enforceable against Claimants in
accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and
remedies.

 

6. Non Disparagement. Each of
Claimants, and GT Biopharma, severally and not jointly, agrees
that, from and after the execution of this Agreement, each of them
shall not make, publish or communicate, or encourage any other
Person to make, publish or communicate, any Disparaging (as defined
below) remarks, comments, or statements concerning any other Person
that is subject to, or a signatory of, this Agreement. As used
herein, “Disparaging” remarks,
comments or statements are those that impugn the character,
honesty, integrity, morality, or business acumen or abilities in
connection with any aspect of the operation of business of, or
reflect negatively upon, the individual or entity being disparaged.
Each of Claimants, and GT Biopharma, severally and not jointly,
further agrees that, from the execution of this Agreement, they
shall not encourage any other Person to consider, threaten, or file
any action, Claim, suit, inquiry, or proceeding against any Person
that is subject to, or a signatory of, this Agreement. This
provision shall in no way limit the ability of any party to enforce
the Settlement Documents.

 

7. Confidentiality. The Parties
agree that the negotiations that resulted in this Agreement, are
confidential and they will not disclose them to any third party
except: (i) to their respective attorneys, accountants and
insurers; (ii) as required by, or for use in, any court of
competent jurisdiction or regulatory body or agency; (iii) as
required by any federal, state or municipal rule, regulation or
law; (iv) to any tax preparation professional and to the extent
necessary to accurately file city, state and federal taxes; and,
(v) with respect to Claimants only, to any limited partner,
potential investor or any other Person if, in Claimants' own
judgment, disclosure is necessary to explain, for any business
purpose, the background, circumstances, and/or results of the
Demand Letter or the Draft Complaint.

 

8. Entire Agreement; Amendments.
This Agreement and any schedules and exhibits hereto constitute the
entire agreement among the Parties as to the settlement and
supersede any prior agreements, including but not limited to any
preliminary, draft settlement documents, among the Parties with
respect to the subject matter of this Agreement. No
representations, warranties or inducements have been made or relied
upon by any Party concerning this Agreement or its exhibits, other
than the representations, warranties and covenants expressly set
forth in such documents. This Agreement shall not be modified or
amended in any way except in writing executed by or on behalf of
each Party to be bound thereby or by their respective
successors-in-interest.  

 

 

 

8

 

 

9. Voluntary and Informed Assent.
Each Party to this Agreement represent and agree that the Party has
read and fully understood the provisions of this Agreement, that
they are fully competent to enter into and sign this Agreement, and
that they are executing this Agreement voluntarily, free of any
duress or coercion.

 

10. Construction. The language of
all parts of this Agreement shall in all cases be construed as a
whole, according to its fair meaning, and not strictly for or
against any Party. This Agreement was prepared jointly by the
Parties, and no presumptions or rules of interpretation based upon
the identity of the Party preparing or drafting the Agreement, or
any part thereof, shall be applicable or invoked.

 

11. Headings. The section headings
contained in each section of this Agreement are intended solely for
convenience of reference and shall not limit or expand the express
terms of this Agreement or otherwise be used in its
construction.

 

12. Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflict of laws
thereof. Each party agrees that all legal proceedings concerning
the interpretation, enforcement and defense of the transactions
contemplated by any of the Settlement Documents (whether brought
against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in
the state and federal courts sitting in the City of New York,
Borough of Manhattan (the “New York Courts”). Each
party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Settlement Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the
jurisdiction of such New York Courts, or such New York Courts are
improper or inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by applicable law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions
contemplated hereby. If any party shall commence an action or
proceeding to enforce any provisions of this Agreement, then the
prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorney's fees and other costs and
expenses incurred in the investigation, preparation and prosecution
of such action or proceeding.

 

13. Waiver. The waiver by any Party
of any breach of this Agreement by the other shall not be deemed a
waiver of that or any other prior or subsequent breach of any
provision of this Agreement by any other Party.

 

 

9

 

 

14. Severability. If any provision
or provisions of this Agreement or the settlement shall be held to
contravene or be invalid under any applicable law, such
contravention or invalidity shall not invalidate the whole
Agreement, but the Agreement shall be construed as not containing
the particular provision or provisions held to be illegal, invalid
or unenforceable, and the remaining rights and obligations of the
Parties shall remain in full force and effect and construed and
enforced accordingly so long as this Agreement as so modified
continues to express, without material change, the original
intentions of the Parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the
respective expectations or reciprocal obligations of the Parties or
the practical realization of the benefits that would otherwise be
conferred upon the Parties. The Parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes
as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

 

15. Effect of Cancellation or
Termination. If the settlement set forth in this Agreement
does not become effective, or is terminated, reversed or vacated by
a court of competent jurisdiction for any reason, then,
notwithstanding anything herein to the contrary, the settlement set
forth in this Agreement shall be null and void and of no further
force or effect, and each Party shall be restored to his, her or
its respective position as it existed prior to the execution of
this Agreement, including for statute of limitations purposes.
Neither the existence of this Agreement, the facts of its
existence, the terms hereof or any statements or negotiations
between the Parties relating hereto shall be admissible in evidence
or shall be referred to for any purpose in any subsequent
litigation, action or proceeding, except in a proceeding to enforce
its terms.

 

16. Binding Effect. This Agreement
binds and inures to the benefit of the Parties and their respective
past and present agents, employees, attorneys, representatives,
officers, directors, shareholders, successors, assigns,
transferees, insurers and sureties, and all of their subsidiaries,
parents, predecessors, successors and controlled or affiliated
companies.

 

17. Notices. Any notices, consents,
waivers or other communications required or permitted to be given
under the terms of this Agreement or any other Settlement Documents
must be in writing and will be deemed to have been delivered: (i)
upon receipt, when delivered personally; (ii) upon delivery, when
sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the
sending party), (iii) upon delivery, when sent by electronic mail
(provided that the sending party does not receive an automated
rejection notice); or (iv) one Business Day after deposit with an
overnight courier service, in each case properly addressed to the
party to receive the same. The addresses, facsimile numbers and
e-mail addresses for such communications shall be:

 

 

10

 

 

If to
GT Biopharma:

 

GT
Biopharma, Inc.

9350
Wilshire Blvd, Suite 203

Beverly
Hills, CA 90212

Email: 
sww@gtbiopharma.com; ajc@gtbiopharma.com

 

With a
copy to (for informational purposes only):

 

Perrie
Weiner

Baker
McKenzie

1901
Avenue of the Stars Suite 950

Telephone: (310)
201-4709

Facsimile: (310)
201-4721

E-mail:
perrie.weiner@bakermckenzie.com

 

If to
Claimants:

 

Adam
Kasower

25170
Jim Bridger Road

 

Hidden
Hills, CA 91302

 

East
Ventures, Inc.

269 S
Beverly Drive, Suite 1079

Beverly
Hills, CA 90210

 

SV
Booth Investments III, LLC

1280
5th Ave

New
York NY 10029

 

Theorem
Group, LLC

269 S
Beverly Drive, Suite 1079

Beverly
Hills, CA 90212

 

With a
copy (for informational purposes only) to:

 

LAW
OFFICES OF JACQUES CHEN

Jacques
Chen, Esq.

2029
Century Park East, Suite 400

Los
Angeles, CA 90067

Telephone:  
(310) 201-4382

Facsimile:   
(866) 425-6035

E-mail:        
jchen028@gmail.com

 

 

11

 

 

18. Specific Performance. Each
Party hereto acknowledges and agrees, on behalf of itself, herself
or himself and its, her or his affiliates, that irreparable harm
would occur in the event any of the provisions of this Agreement or
any of the other Settlement Documents were not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the Parties will be entitled to specific
relief hereunder, including, without limitation, an injunction or
injunctions to prevent and enjoin breaches of the provisions of
this Agreement and/or the other Settlement Documents and to enforce
specifically the terms and provisions hereof and thereof, in
addition to any other remedy to which they may be entitled at law
or in equity.

 

19. Counterpart Signature Pages:
This Agreement may be executed in any number of counterparts, and
each counterpart shall have the same force and effect as an
original and shall constitute an effective, binding agreement on
the part of each of the undersigned, all counterparts when taken
together shall constitute the entire Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

IN WITNESS WHEREOF, the Parties have
caused this Agreement to be executed by themselves or their duly
authorized representatives on the respective dates set forth
below.

 

	

Dated:
November ___, 2020

 

GT BIOPHARMA, INC.

 

 

 

By:
____________________________

Name:
Anthony Cataldo

Title:
Chief Executive Officer

 

	

Dated:
November ___, 2020

 

EAST VENTURES, INC.

 

 

 

By:
____________________________

Name:

Title:

 

	

 

Dated:
November ___, 2020

 

 

 

 

 

________________________________

Adam
Kasower

 

 

	

 

Dated:
November ___, 2020

 

SV BOOTH INVESTMENTS III, LLC

 

 

 

By:
____________________________

Name:

Title:

 

 

Dated:
November ___, 2020

 

THEOREM GROUP, LLC

 

By:
____________________________

Name:

Title:

 

[Signature
Page—Settlement Agreement]

 

 

EXHIBIT A

FORM OF SETTLEMENT NOTE

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