Document:

EXHIBIT 10.1

 

 

KATHLEEN A. HERKENHOFF (168562)

kah@weiserlawfirm.com

THE WEISER LAW FIRM, P.C.

12707 High Bluff Drive, Suite 200

San Diego, CA 92130

Telephone: (858) 794-1441

Facsimile:  (858) 794-1450

Co-Lead Counsel for Plaintiffs

[Additional counsel appear on signature page.]

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

	
IN RE CYTRX CORP. STOCKHOLDER DERIVATIVE LITIGATION

 

 

This Document Relates To:

 

ALL ACTIONS.

 

 

	
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Master File No. 2:14-cv-06414-GHK (PJWx)

STIPULATION AND AGREEMENT OF SETTLEMENT

 

 

STIPULATION AND AGREEMENT OF SETTLEMENT

 

This Stipulation and Agreement of Settlement dated April 1, 2016 (the "Stipulation"), is made and entered into by and among the following Parties (as defined further herein), to the consolidated shareholder derivative action captioned In re CytRx Corp. Stockholder Derivative Litigation, pending before the U.S. District Court, Central District of California, Western Division (the "Federal Court" or the "Court") under Master File No. 2:14-cv-06414-GHK (PJWx), (the "Action"), each by and through their respective counsel: (i) plaintiffs Jared Pankratz ("Pankratz") and Jack Taylor ("Taylor," and together with Pankratz, "Plaintiffs"), derivatively on behalf of CytRx Corporation ("CytRx" or the "Company"); (ii) the Individual Defendants (as defined herein); and (iii) nominal defendant CytRx (together with the Individual Defendants, "Defendants"). This Stipulation is intended by the Parties to fully, finally and forever resolve, discharge and settle the above-captioned litigation and all Released Claims (as defined herein), upon and subject to the terms and conditions hereof.

	
I.

	
BACKGROUND AND PROCEDURAL HISTORY

 

CytRx, a Delaware corporation maintaining its corporate headquarters in Los Angeles, California, is a publicly-traded biopharmaceutical research and development company.

On August 14, 2014, plaintiff Pankratz filed a shareholder derivative complaint in the Federal Court on behalf of nominal defendant CytRx, captioned Pankratz v. Kriegsman, et. al., Case No. 14-cv-06414 (the "Pankratz Action").  On August 15, 2015, plaintiff Taylor filed a substantially similar shareholder derivative complaint on behalf of nominal defendant CytRx in the Federal Court captioned Taylor v. Kriegsman, et. al., Case No. 14-cv-06451 (the "Taylor Action").

 

Plaintiffs asserted claims derivatively on behalf of CytRx against certain current and former CytRx senior officers and members of the Company's Board of Directors (the "Board") for breach of fiduciary duty for disseminating false and misleading information; for breach of fiduciary duty for failing to maintain internal controls; for unjust enrichment; for gross mismanagement; for abuse of control; and for insider selling and misappropriation of information, relating to the Company's retention of a stock promotion firm, the DreamTeam Group ("DreamTeam") and/or the granting of stock options to officers and directors of CytRx in December 2013.

The website SeekingAlpha.com had published an article on March 13, 2014 that claimed that DreamTeam caused a series of paid promotional articles regarding CytRx and its products to be published, without disclosing payment, and further alleged that members of CytRx management had reviewed and edited the DreamTeam articles.  Plaintiffs alleged that the Individual Defendants and DreamTeam failed to disclose a paid relationship between DreamTeam (and their agents) and CytRx; that DreamTeam conducted a misleading promotional campaign designed to boost CytRx's stock price which included, inter alia, the publication of a series of articles and comments on investor websites touting CytRx and its products between September 18, 2013 and February 10, 2014; and that DreamTeam's promotional campaign was coordinated with CytRx's own public statements and filings during that time frame.  Plaintiffs also alleged that the DreamTeam promotional campaign artificially inflated the Company's stock price prior to a secondary offering of Company stock completed in February 2014.  In addition, Plaintiffs asserted claims based on allegations of the "spring loading" of stock options issued to officers and directors of CytRx in connection with the annual stock option grants in December 2013.

 

On October 3, 2014, Plaintiffs and Defendants filed a joint stipulation to consolidate the Pankratz Action and the Taylor Action and appoint Co-Lead Counsel, which the Federal Court granted on October 8, 2014.

 

On December 20, 2014, Defendants moved to dismiss the Action pursuant to: (a) Fed. R. Civ. P. 23.1 ("Rule 23.1") for failure to make a pre-suit demand on the Board; (b) Fed. R. Civ. P. 12(b)(6) ("Rule 12(b)(6)") for failure to state a claim upon which relief can be granted, and (c) Fed. R. Civ. P. 12(b)(3) ("Rule 12(b)(3)") for improper venue based on the Company's forum-selection bylaw, which provides:

 

Unless the corporation consents in writing to the selection of an alternative forum, the Court of Chancery of Delaware shall be the sole and exclusive forum for: (i) any derivative action or proceeding on behalf of the corporation, (ii) any action asserting a claim for breach of fiduciary duty owed by any director, officer, employee or agent of the corporation to the corporation or the corporation's stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, the certificate of incorporation or the by-laws of the corporation or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.  Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the corporation shall be deemed to have notice of and consented to the provisions of this Section. (Emphasis supplied.)

 

Alternatively, Defendants moved to stay the Action in favor of a federal securities fraud class action pending in the Federal Court captioned In re CytRx Corp. Securities Litig., No. 14-cv-01956 (C.D. Cal.) (the "Federal Securities Action") and/or a consolidated shareholder derivative action then pending in the Delaware Court of Chancery (the "Delaware Court") captioned In re CytRx Corp. Stockholder Deriv. Litig., C.A. No. 9864-VCL (the "Delaware Action").  Plaintiffs filed briefs in opposition to Defendants' motions on November 6, 2014, and Defendants filed reply briefs on November 20, 2014.  On December 8, 2014, the Federal Court ordered supplemental briefing relating to Defendants' Motion to Stay, which Plaintiffs and Defendants submitted on December 15, 2014 and December 22, 2014, respectively.

 

On January 8, 2015, the Federal Court entered an Order staying the Action pending the resolution of the Delaware Action (the "Stay Order").  In the Stay Order, however, the Federal Court stated that it would nonetheless "remain open" pending any subsequent developments in the Delaware Action that might necessitate vacating the stay of the Federal Action.

On February 27, 2015, Plaintiffs filed a motion to vacate the stay of this Action (the "Motion to Vacate Stay"), based on subsequent developments in the Delaware Action.  Specifically, Plaintiffs' Motion to Vacate Stay was based on the Delaware Court's stay of derivative claims arising from allegations regarding DreamTeam's stock promotion campaign.  Briefing by the Parties in connection with the Plaintiffs' Motion to Vacate Stay was completed on March 16, 2015.

 

In and around February 2015, the Parties commenced discussions regarding a potential resolution of the Federal Action and, in pursuance thereof, agreed to participate in mediation.  The Parties retained the Hon. Dickran M. Tevrizian (Ret.) (the "Mediator" or "Judge Tevrizian"), an experienced mediator and former U.S. District Court Judge for the Central District of California.  On April 6, 2015, in furtherance of the Parties' settlement discussions, counsel for Plaintiffs sent counsel for Defendants a detailed settlement demand.  On April 15, 2015, Plaintiffs and Defendants submitted mediation statements to Judge Tevrizian.  On April 23 and 24, 2015, counsel for the Parties to the Federal Action (along with counsel for the parties to the Federal Securities Action, the Delaware Action, and a securities class action pending in Los Angeles County Superior Court) participated in day-long, in-person mediation sessions with Judge Tevrizian in Los Angeles, California (the "Mediation").  Counsel for Plaintiffs and Defendants attended both days of the Mediation, but their efforts to reach a final resolution were unsuccessful at that time and the Federal Action did not settle at the conclusion of the Mediation.

 

Nonetheless, the submissions made by the Parties and other communications in connection with the Mediation served as the basis for an extended series of subsequent settlement communications and discussions, with the assistance of the Mediator.

 

On June 1, 2015, the parties to the Delaware Action announced that they had reached an agreement on a proposed settlement of that litigation.  The settlement of the Delaware Action was subsequently approved by an Order and Final Judgment entered by the Delaware Court on November 20, 2015.  The release provision set forth in the settlement agreement in the Delaware Action specifically excluded the release of the Plaintiffs' derivative "claims asserted in [the Federal Action], other than any and all allegations and claims relating to the issuance of stock option grants."

 

On June 24, 2015, the Federal Court granted Plaintiffs' Motion to Vacate Stay,  lifting the stay it previously entered in favor of the Delaware Action.  The Federal Court relied on statements from the Delaware Action plaintiffs at a January 8, 2015 hearing demonstrating that, contrary to the complaint in the Delaware Action, they were not likely to pursue relief based on the DreamTeam stock promotion allegations—which statements the Federal Court concluded were confirmed by the Delaware Action settlement agreement, which resolved the spring-loaded stock option claims but not the DreamTeam stock promotion claims.  The Federal Court also denied Defendants' prior motion to stay the Action in favor of the Federal Securities Action.  The Federal Court further denied Defendants' motion to dismiss pursuant to Rule 12(b)(3) for improper venue, finding that an argument for dismissal based on the Company's forum-selection by-law should be brought pursuant to the doctrine of forum non conveniens and not Rule 12(b)(3).  The Federal Court permitted Defendants to file a motion to dismiss on the grounds of forum non conveniens based on the Company's forum-selection bylaw within thirty days.  The Federal Court denied without prejudice Defendants' motion to dismiss pursuant to Rule 23.1 and, likewise, stated that Defendants should renew their Rule 12(b)(6) motion "only if we determine that this is the appropriate venue for Plaintiffs' suit."

 

On July 24, 2015, Defendants filed their motion to dismiss on the grounds of forum non conveniens (the "FNC Motion").  The Parties completed briefing on the FNC Motion on September 9, 2015.  On October 30, 2015, the Court granted the FNC Motion and the Action was dismissed without prejudice to Plaintiffs' right to file their derivative claims in the Delaware Court (the "October 30 Order").

 

On November 17, 2015, Plaintiffs instead filed a Notice of Appeal with the U.S. Court of Appeals for the Ninth Circuit (the "Ninth Circuit"), with the appeal captioned Pankratz et al. v. Kriegsman et al. and docketed in the Ninth Circuit as Case No. 15-56773 (the "Appeal").

 

Throughout the period following the Mediation, the briefing of the Motion to Vacate Stay and the FNC Motion, and the pendency of the Appeal, counsel for the Parties continued settlement discussions with the assistance of Judge Tevrizian.  By the first week of December 2015, the material terms of the settlement had largely been agreed to by the Parties.

 

On December 23, 2015, the Parties executed a Memorandum of Understanding (the "MOU") documenting their binding agreement to settle the Federal Action.  For the limited purpose of effectuating the Settlement, CytRx consented, and hereby consents, pursuant to and as permitted by its forum-selection bylaw, to the selection of this Court as an alternative forum to the Delaware Court of Chancery for a shareholder derivative action.

 

On February 11, 2016, in light of the MOU and with the assistance of Ann Julius, the Ninth Circuit mediator, the Parties filed a stipulated motion to dismiss the Appeal voluntarily pursuant to Fed. R. App. P. 42(b), without prejudice to reinstatement in the event that this Court does not enter a final order approving the Settlement or such final order is not affirmed on appeal.  The Ninth Circuit granted the Parties' stipulated motion on February 19, 2016.

 

On February 25, 2016, the Parties filed with this Court a Notice of Settlement and Request to Stay the proceedings until March 25, 2016 to allow the Parties to prepare this Stipulation of Settlement, which request the Court granted on February 26, 2016.  On March 29, 2016, the Parties filed a Request to Extend the Stay of Proceedings until April 4, 2016, which request the Court granted on March 30, 2016.

	
II.

	
CLAIMS OF THE PLAINTIFFS AND BENEFITS OF SETTLEMENT

 

Plaintiffs believe that the claims they have asserted in the Action on behalf of CytRx have merit.  Plaintiffs, however, recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the Action against the Individual Defendants through trial and appeal(s).  Plaintiffs and their counsel have also taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as the Action, as well as the difficulties and delays inherent in such litigation and the potential difficulties in collecting upon any judgment.  Plaintiffs and their counsel are also mindful of the inherent problems of proof and possible defenses to the claims asserted in the Action.  Based on their evaluation, Plaintiffs and their counsel have determined that the Settlement set forth in this Stipulation is fair, reasonable and adequate and in the best interests of CytRx and CytRx stockholders.  Plaintiffs' Counsel also believes that the Settlement set forth in this Stipulation confers substantial benefits upon CytRx and its stockholders.  Plaintiffs' Counsel base this conclusion upon, among other things, the nature of the issues and relief, their extensive investigation during the development, initiation, prosecution, and settlement of the Action, which included: (i) inspecting, reviewing and analyzing the Company's public filings with the U.S. Securities and Exchange Commission ("SEC"), press releases, announcements, transcripts of investor conference calls, and news articles; (ii) researching corporate governance issues; (iii) researching the applicable law with respect to the claims asserted in the Action and the potential defenses thereto; (iv) preparation and filing of their respective shareholder derivative complaints; (v) opposing multiple motions to dismiss and/or stay the Action; (vi) preparing and submitting a detailed mediation statement; (vii) preparing and submitting multiple detailed settlement demands; (viii) participating in the two day in-person Mediation in Los Angeles before Judge Tevrizian; (ix) reviewing over 1,250 pages of confidential, non-public documents provided by Defendants; and (x) participating in extensive confidential settlement discussions and other communications with the Mediator and counsel for Defendants.

	
III.

	
DEFENDANTS' DENIALS OF WRONGDOING AND LIABILITY

Defendants have denied, and continue to deny, that they committed or aided and abetted the commission of any unlawful or wrongful acts alleged in the Action, and expressly maintain that they diligently and scrupulously complied with their fiduciary duties and other legal duties.  Defendants are entering into the Stipulation solely because the proposed Settlement will eliminate the burden and expense of further litigation.  Defendants, without admitting any liability, have concluded that it is desirable that the claims and allegations against them be settled on the terms reflected in this Stipulation and the settlement of the Action on such terms is fair, reasonable, adequate and in the best interests of CytRx and its stockholders.

	
IV.

	
TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among Plaintiffs (derivatively on behalf of CytRx), the Individual Defendants and CytRx, by and through their respective counsel or attorneys of record, as follows:

 

	
1.

	
Definitions

 

As used in this Stipulation, the following terms have the meanings specified below.  In the event of any inconsistency between any definition set forth below and any definition set forth in any other document related to the Settlement set forth in this Stipulation, the definitions set forth below shall control.

1.1 "Action" means the stockholder derivative actions consolidated under and captioned In re CytRx Corp. Stockholder Derivative Litigation, Case No. 2:14-cv-6414-GHK (PJW), pending in the U.S. District Court, Central District of California, Western Division.

1.2 "Court" or the "Federal Court" means the U.S. District Court, Central District of California, Western Division.

1.3 "CytRx" or the "Company" means CytRx Corporation, including, but not limited to, its predecessors, successors, controlling stockholders, partners, joint venturers, subsidiaries, affiliates, divisions and assigns.

1.4 "Defendants" means the Individual Defendants and nominal defendant CytRx.

1.5 "Effective Date" means the first date by which all of the events and conditions specified in ¶ 6.1 of this Stipulation have been met and have occurred.

1.6 "Final" means that the Court has entered an order approving the Settlement in accordance with this Stipulation, an such order is finally affirmed on appeal or is no longer subject to appeal and the time for petition for re-argument, appeal or review, by leave, right, certiorari or otherwise, has expired.

1.7 "Individual Defendants" means defendants John Y. Caloz, Louis Ignarro, Steven A. Kriegsman, Joseph Rubinfeld, Richard L. Wennekamp, Marvin L. Selter, and Max E. Link.1

1.8 "Mediator" means the Hon. Dickran M. Tevrizian (Ret.).

1.9 "Notice" means the notice of the Settlement to be provided by CytRx, substantially in the form attached hereto as Exhibit C

1  Messrs. Link and Selter passed away during the pendency of the Action.  Notices of their deaths were filed and served on October 20, 2014 and November 10, 2014.

1.10 [intentionally left blank]

1.11 "Order and Final Judgment" or "Judgment" means the order and final judgment to be rendered by the Court, substantially in the form attached hereto as Exhibit D.

1.12 "Parties" means, collectively, each of: (i) the Plaintiffs, derivatively on behalf of CytRx; (ii) the Individual Defendants; and (iii) CytRx.

1.13 "Person" means an individual, corporation, limited liability company, professional corporation, partnership, limited partnership, limited liability partnership, association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or agency thereof, and any business or legal entity and their spouses, heirs, predecessors, successors, representatives, or assignees.

1.14 "Plaintiffs" means plaintiffs Jared Pankratz and Jack Taylor.

1.15 "Plaintiffs' Counsel" means The Weiser Law Firm, P.C. and the Shuman Law Firm.

1.16 "Preliminary Approval Order" means the Order to be entered by the Court, substantially in the form of Exhibit B attached hereto, including, inter alia, preliminarily approving the terms and conditions of the Settlement as set forth in this Stipulation, directing that Notice be provided to CytRx stockholders, and scheduling a Settlement Hearing (defined below) to consider whether the Settlement should be finally approved and to rule on Plaintiffs' Counsel's Fee Application (defined herein).

1.17 "Related Persons" means each of a Person's spouses, heirs, executors, estates, or administrators, each of a Person's present and former attorneys, legal representatives, and assigns in connection with the Action, and all of a Person's past and present directors, officers, agents, advisors, employees, affiliates, predecessors, successors, and parents.

1.18 [intentionally left blank]

            1.19 "Released Claims" means all actions, suits, claims, demands, rights, liabilities, and causes of action, including both known claims and Unknown Claims (as defined herein), that have been or that might have been asserted by Plaintiffs, CytRx or any CytRx stockholder derivatively on behalf of CytRx against any Released Persons that are based upon or related to the facts, transactions, events, occurrences, acts, disclosures, statements, omissions or failures to act which were alleged in the Action including any and all claims arising out of the institution, prosecution, settlement or resolution of litigation against any Released Person.   Notwithstanding the foregoing, Released Claims shall not include claims to enforce the Settlement or any Fee Award (defined herein).  The Settlement also is not intended to and does not release the direct claims asserted in the Federal Class Action, In re CytRx Corp. Sec. Litig., No. 14-cv-01956 (C.D. Cal.).

1.20 "Released Persons" shall mean the Defendants or any of their families, parent entities, controlling persons, associates, affiliates or subsidiaries and each and all of their respective past or present officers, directors, stockholders, principals, representatives, employees, attorneys, financial or investment advisors, consultants, accountants, investment bankers, commercial bankers, entities providing fairness opinions, underwriters, advisors or agents, heirs, executors, trustees, general or limited partners or partnerships, limited liability companies, members, joint ventures, personal or legal representatives, estates, administrators, predecessors, successors and assigns.

1.21  "Settlement" means the settlement documented in this Stipulation.

1.22 "Settlement Hearing" means a hearing by the Court to review this Stipulation and determine: (i) whether to enter the Final Order and Judgment; and (ii) all other matters properly before the Court.

1.23 "Unknown Claims" means any and all claims that were alleged or could have been alleged in the Action by Plaintiffs, CytRx or any CytRx stockholder

    1.24   derivatively on behalf of CytRx, which any Plaintiffs, CytRx, or CytRx stockholders derivatively on behalf of CytRx, do not know or suspect to exist in his, her or its favor at the time of the release of the Released Persons, including claims which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Persons, or might have affected his, her or its decision not to object to this Settlement.  With respect to any and all Released Claims, the Parties stipulate and agree that, upon the Effective Date, the Plaintiffs and CytRx shall expressly waive, and each of CytRx' stockholders by operation of the Judgment shall have, expressly waived, the provisions, rights and benefits of California Civil Code § 1542, which provides:

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

 

The Parties acknowledge that they may discover facts in addition to or different from those now known or believed to be true by them, with respect to the Released Claims, as the case may be, but it is the intention of the Parties to completely, fully, finally, and forever compromise, settle, release, discharge, and extinguish any and all of the Released Claims known or unknown, suspect or unsuspected, contingent or absolute, accrued or unaccrued, apparent or unapparent, which now exist, or heretofore existed, or may hereafter exist, and without regard to the subsequent discovery of additional or different facts.

 

	
2.

	
Settlement Consideration

 

CytRx, through its Board, shall adopt and implement the comprehensive set of corporate governance measures (the "Reforms") attached as Exhibit A to this Stipulation, including adopting resolutions and amending committee charters to the extent necessary for the implementation of the Reforms.  The Action was a factor in the decision to agree to adopt and implement the Reforms. CytRx acknowledges that the Reforms confer a substantial and material benefit on CytRx and current CytRx stockholders.

 

	
3.

	
Procedure for Implementing the Settlement

 

3.1 Within five (5) business days after execution of this Stipulation, Plaintiffs shall submit the Stipulation together with its related documents to the Court, and shall apply to the Court for entry of the Preliminary Approval Order, in the form annexed hereto as Exhibit B.

 

3.2 CytRx shall undertake the administrative responsibility for giving notice to CytRx stockholders at the time of entry of the Preliminary Approval Order and CytRx shall be responsible for all costs and expenses related to the Notice.  Within ten (10) business days of the Court's entry of the Preliminary Approval Order, CytRx shall commence mailing the Notice to CytRx stockholders who were stockholders of record at the time of the entry of the Preliminary Approval Order.

 

3.3 At least twenty (20) business days prior to the Settlement Hearing, CytRx's counsel shall serve on all counsel in the Action and file with the Court an appropriate affidavit or declaration with respect to the notice to be given to CytRx stockholders pursuant to ¶ 3.2.

 

	
4.

	
Releases

 

4.1 Upon the Effective Date, CytRx, Plaintiffs (each acting on his own behalf and derivatively on behalf of CytRx), and each of CytRx's stockholders (solely in their capacity as CytRx stockholders) shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished and discharged the Released Claims against the Released Persons and any and all claims arising out of, relating to, or in connection with, the defense, settlement or resolution of the Action against the Released Persons.  CytRx, Plaintiffs (each acting on his own behalf and derivatively on behalf of CytRx) and each of CytRx's stockholders (solely in their capacity as CytRx stockholders) shall

4.2 be deemed to have, and by operation of the Judgment shall have, covenanted not to sue any Released Person with respect to such Released Claims, and shall be permanently barred and enjoined from instituting, commencing or prosecuting the Released Claims against the Released Persons except to enforce the releases and other terms and conditions contained in this Stipulation and/or Judgment entered pursuant thereto.

 

4.3  Upon the Effective Date, Defendants shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished and discharged Plaintiffs and Plaintiffs' Counsel from all claims (including Unknown Claims) arising out of, relating to, or in connection with, the institution, prosecution, assertion, settlement or resolution of the Action or the Released Claims.  Nothing herein shall in any way impair or restrict the rights of any Party to enforce the terms of the Stipulation or any Fee Award.

 

	
5.

	
Plaintiffs' Counsel's Attorneys' Fees and Expenses

 

5.1  After conclusion of negotiations for the material substantive terms of the Settlement, and with the assistance of the Mediator, counsel separately negotiated at arm's length the amount of attorneys' fees and expenses to be paid to Plaintiffs' Counsel.  As a result of these negotiations, and in recognition of the substantial benefits conferred upon CytRx and CytRx stockholders as a direct result of the initiation, prosecution, pendency and settlement of the Action, the Company and Plaintiffs' Counsel agreed that Plaintiffs' Counsel will request Court approval of a payment of CytRx stock as set forth below ("Settlement Stock"), as the award of fees and expenses to Plaintiffs' Counsel (the "Fee Award"), and that Defendants will not oppose or object to the requested Fee Award.  Defendants shall bear no responsibility for the allocation or distribution of the Fee Award among Plaintiffs' Counsel.  The Parties mutually agree that the Fee Award is fair and reasonable in light of the substantial benefits conferred upon CytRx and CytRx stockholders by this Settlement.  Except to the extent specifically provided in this paragraph, neither

5.2 CytRx, nor the Individual Defendants, nor any of their insurers shall have any obligation to pay or cause to be paid, any fees, costs or expenses to Plaintiffs or Plaintiffs' Counsel.

 

5.3 The Settlement Stock shall consist of Seven Hundred Thousand Dollars ($700,000.00) worth of shares of CytRx common stock, which shall be valued for this purpose as set forth below.  The Settlement Stock will be identical in all respects to CytRx's currently outstanding shares of common stock.  Subject to § 5.5, the Parties intend that the issuance by CytRx of the Settlement Stock be exempt from registration under the Securities Act pursuant to section 3(a)(10) of the Securities Act, 15 U.S.C. § 77c(a)(10) (the "section 3(a)(10) exemption"), in that the Settlement Stock will be issued to or for the benefit of Plaintiffs' Counsel for payment of the Fee Award under the terms of this Stipulation.  Pursuant to section 3(a)(10) of the Securities Act, the Court's judgment of the fairness of the Settlement may serve as a substitute for the registration requirements of the Securities Act with regard to any Settlement Stock.  At the Settlement Hearing, the Court will be asked to find that, with regard to the Settlement Stock being issued to Plaintiffs' Counsel for the Fee Award, the terms and conditions of, and the procedures for, the proposed issuance are fair to all those who will receive Settlement Stock for the Fee Award.

 

5.4 The number of shares of Settlement Stock shall equal the quotient determined by dividing Seven Hundred Thousand Dollars ($700,000.00) by the "Valuation Price," which shall equal the volume-weighted average price ("VWAP") of CytRx common stock as reported on The NASDAQ Stock Market for the fifteen (15) consecutive trading days ending on the trading day immediately preceding the date the Court enters the Final Order and Judgment (the "Valuation Period"), except that the Valuation Price shall be at least $2.50 per share and shall not exceed $3.75 per share.  No fractional share of Settlement Stock shall be issued, and any fractional share of Settlement Stock will be rounded up or down to the nearest whole share.

 

5.5 To the extent applicable, the number of shares of Settlement Stock will be adjusted to account for stock splits, reverse stock splits, and other similar actions taken by CytRx prior to the issuance of the Settlement Stock to Plaintiffs' Counsel.  In the event CytRx is sold, acquired or merges prior to the issuance of the Settlement Stock to Plaintiffs' Counsel, for purposes of the sale, acquisition or merger the Settlement Stock will be treated as if the Settlement Stock had been issued and was outstanding and distributed immediately prior to the sale, acquisition or merger and will receive the same proportionate treatment as other outstanding shares of CytRx common stock.  In this event, the number of shares of Settlement Stock shall be determined in the manner described in ¶ 5.3, except that the Valuation Period shall be the twenty (20) consecutive trading days ending on the trading day immediately preceding the announcement of the sale, acquisition or merger.

 

5.6 To the extent that the section 3(a)(10) exemption is available with respect to the issuance of the Settlement Stock, the Settlement Stock generally will be freely saleable and transferable by recipients thereof.  To the extent that CytRx determines, in its discretion, that the section 3(a)(10) exemption from registration is not available with respect to the issuance of the Settlement Stock, the Settlement Stock will be issued by CytRx pursuant to another available exemption from registration under the Securities Act for transactions not involving a public offering and CytRx, at its expense, will file a Registration Statement on Form S‐3 under the Securities Act covering  the resale of the Settlement Stock from time to time by Plaintiffs' Counsel and will use CytRx's best efforts to obtain the effectiveness of the Registration Statement as soon as possible.

 

5.7 Within five (5) business days of the date the Court enters the Order and Final Judgment, substantially in the form of Exhibit D, CytRx shall issue the Settlement Stock to Plaintiffs' Counsel.  The reasonable costs and expenses of the transfer agent for the common stock with respect to the issuance and delivery of the Settlement Stock to Plaintiffs' Counsel shall be paid by CytRx.

 

5.8 Other than with respect to the obligations undertaken by CytRx in this section 5, Defendants shall have no liability with respect to, or responsibility for, the sale of the Settlement Stock, or with respect to the trading value of, or any losses incurred by any party with respect to, any Settlement Stock.

 

5.9 The amount of any Fee Award ordered by the Court as a result of a ruling on the Fee Application, or agreed upon by the Parties and approved by the Court, shall be paid by CytRx to Plaintiffs' Counsel as set forth above, to the Shuman Law Firm and The Weiser Law Firm, P.C. as the receiving agents, notwithstanding the existence of any timely filed objections to the Settlement, or potential appeal(s), but subject to Plaintiffs' Counsel's joint and several obligation to refund any amounts by which the Fee Award may be subsequently reduced upon appeal or by collateral attack.

 

5.10 The Settlement of this Action is not contingent on approval of any Fee Award or the amount requested by Plaintiffs' Counsel.

 

5.11 Except as expressly provided herein, Plaintiffs and Plaintiffs' Counsel shall bear their own fees, costs and expenses, and no Released Person shall assert any claim for expenses, costs or fees against Plaintiffs or Plaintiffs' Counsel.

 

5.12 In the event that there is an appeal and any order approving the Settlement does not become Final, Plaintiffs' Counsel shall return to CytRx any and all unsold shares of Settlement Stock, and pay to CytRx the net proceeds to Plaintiffs' Counsel from the sale or other distribution by Plaintiffs' Counsel of any shares of Settlement Stock, without regard to Plaintiffs' Counsel's payment of any "Service Awards" as contemplated in ¶ 5.12 herein, consistent with such reversal or modification, within ten (10) business days after entry of such order.  Notwithstanding the foregoing, any reduction, reversal, modification or non-approval of the Fee Award shall not in any way delay or preclude the Order and Final Judgment from becoming Final.

5.13 Plaintiffs' Counsel has informed Defendants that Plaintiffs may apply for Court approval of service awards in the amount of $5,000 in CytRx stock for each Plaintiff (the "Service Awards"), in light of the benefits they have helped to create for CytRx and CytRx stockholders.  Each Service Award, to the extent that it is applied for and approved by the Court in whole or in part, shall be funded solely from the Fee Award to Plaintiffs' Counsel and any application for the Service Awards shall not increase the amount of the Fee Award.  Plaintiffs' Counsel may pay the Service Awards to the Plaintiffs from the Fee Award in either cash or in Settlement Stock after it is received by Plaintiffs' Counsel as payment of the Fee Award.  The Settlement of this Action is not contingent on approval of any Service Award or the amount requested by Plaintiffs.

	
6.

	
Conditions of Settlement, Effect of Disapproval, Cancellation or Termination

6.1 The Effective Date of the Stipulation shall be conditioned on the occurrence of all of the following events:

	
A.

	
The dismissal with prejudice of the Action without the award of any damages, costs, fees or the grant of any further relief except for an award of fees and expenses the Court may make pursuant to ¶ 5 of this Stipulation;

	
B.

	
The entry of the Order and Final Judgment approving the proposed Settlement and providing for the dismissal with prejudice of the Action and approving the grant of the releases described herein;

	
C.

	
The inclusion in the Order and Final Judgment of a provision enjoining Plaintiffs, CytRx stockholders, and CytRx from asserting any of the Released Claims;

	
D.

	
The entry by the Court of the Order and Final Judgment substantially in the form of Exhibit D hereto; and

	
E.

	
The Order and Final Judgment has become Final.

 

6.2 If any of the conditions specified in ¶ 6.1 are not met, then this Stipulation shall be canceled and terminated unless the Parties mutually agree in writing, by and through their respective counsel, to proceed with the Stipulation.

 

6.3 In the event that the Stipulation or Settlement is not approved by the Court, or the Settlement is terminated for any reason, the Parties shall be restored to their respective positions in the Action as of the last date before this Stipulation, and all negotiations, proceedings, documents prepared and statements made in connection herewith, including this Stipulation and the MOU, shall be without prejudice to the Parties, shall not be deemed or construed to be an admission by any Party of any fault, liability or wrongdoing as to any facts, claims or defenses that have been or might have been alleged or asserted in the Action, or any other act or proceeding or each thereof, nor shall they be interpreted, construed, deemed, invoked, offered or received in evidence or otherwise used by any person in the Action, or in any other action or proceeding.  In such event, the terms and provisions of the Stipulation shall have no further force and effect with respect to the Parties and shall not be used in the Action or in any other proceeding for any purpose, and any judgment or orders entered by the Court in accordance with the terms of the Stipulation shall be treated as vacated, nunc pro tunc.  In such event, and as set forth in the MOU, the Parties shall be restored to their respective positions as to the October 30 Order and the Appeal shall be reinstated, to the extent Plaintiffs elect to pursue the Appeal at that time.

 

	
7.

	
Bankruptcy

 

7.1 In the event any proceedings by or on behalf of CytRx, whether voluntary or involuntary, are initiated under any chapter of the U.S. Bankruptcy Code, including any act of receivership, asset seizure, or similar federal or state law action ("Bankruptcy Proceedings"), the Parties agree to use their reasonable best efforts to obtain all necessary orders, consents, releases, and approvals for effectuation of this Stipulation in a timely and expeditious manner.

 

7.2 In the event of any Bankruptcy Proceedings by or on behalf of CytRx, the Parties agree that all dates and deadlines set forth herein will be extended for such periods of time as are necessary to obtain necessary orders, consents, releases and approvals from the Bankruptcy Court to carry out the terms and conditions of the Stipulation.

 

	
8.

	
Miscellaneous Provisions

 

8.1 The Parties (a) acknowledge that it is their intent to consummate this Stipulation; and (b) agree to cooperate to the extent reasonably necessary to effectuate and implement all terms and conditions of this Stipulation and to exercise their best efforts to accomplish the foregoing terms and conditions of this Stipulation.

 

8.2 The Parties intend this Settlement to be a final and complete resolution of all disputes between Plaintiffs, the Individual Defendants, and CytRx with respect to the Action.  The Settlement comprises claims which are contested and shall not be deemed an admission by any Party as to the merits of any claim, allegation, or defense.  The Parties further agree that the claims are being settled voluntarily after consultation with competent legal counsel.

 

8.3 Pending final determination of whether the Settlement should be approved, all proceedings in the Action and all further activity between the Parties regarding or directed toward the Action, save for those activities and proceedings relating to this Stipulation and the Settlement, shall be stayed.

 

8.4 The Stipulation and the Settlement shall be binding upon, and inure to the benefit of, the successors and assigns of the Parties and the Released Persons.  The Parties agree that this Stipulation will run to their respective successors-in-interest, and they further agree that any planned, proposed or actual sale, merger or change-in-control of CytRx shall not void this Stipulation, and that in the event of a planned, proposed or actual sale, merger or change-in-control of CytRx they will continue to seek final approval of this Stipulation expeditiously, including, but not limited to, the Settlement terms reflected in this Stipulation.

 

8.5 Pending the Effective Date of this Stipulation or the termination of the Stipulation according to its terms, Plaintiffs and any other CytRx stockholders, and their Related Persons, are barred and enjoined from commencing, prosecuting, instigating, or in any way participating in the commencement or prosecution of any action asserting any Released Claims against any Released Person.

 

8.6 The provisions contained in this Stipulation (including any exhibits attached hereto) shall not be deemed a presumption, concession, or admission by any Party of any fault, liability, or wrongdoing, or lack of merit as to any facts or claims alleged or asserted in the Action or in any other action or proceeding, and shall not be interpreted, construed, deemed, invoked, offered, or received into evidence or otherwise used by any person in the Action or in any other action or proceeding, whether civil, criminal, or administrative, except in connection with any proceeding to enforce the terms of the Settlement or any Fee Award.  The Released Persons may file the Stipulation and/or the Order and Final Judgment in any action that has been or may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, full faith and credit, release, good faith settlement, judgment bar or reduction, claim preclusion or issue preclusion, or any other theory.

 

8.7 The exhibits to this Stipulation are material and integral parts hereof and are fully incorporated herein by this reference.

 

8.8 The Stipulation may be amended or modified only by a writing signed by the signatories hereto.

 

8.9 This Stipulation and the exhibits attached hereto constitute the entire agreement among the Parties and no representations, warranties or inducements have been made to any Party concerning the Stipulation or any of its exhibits other than the representations, warranties and covenants contained and memorialized in such documents.  Except as otherwise provided herein, each Party shall bear its own costs.

 

8.10 Each counsel or other Person executing this Stipulation or its exhibits on behalf of any Party hereby warrants that such Person has the full authority to do so.

 

8.11 This Stipulation may be executed in one or more counterparts.  A faxed or pdf signature shall be deemed an original signature for the purposes of this Stipulation.  All executed counterparts, and each of them, shall be deemed to be one and the same instrument.  A complete set of counterparts, either originally executed or copies thereof, shall be filed with the Court.

 

8.12 Plaintiffs represent and warrant that they have been stockholders of CytRx at all relevant times, and that they continue to hold their stock in the Company.

 

8.13 The Court shall retain jurisdiction with respect to implementation and enforcement of the terms of the Stipulation, and the Parties submit to the jurisdiction of the Court for purposes of implementing and enforcing the Settlement embodied in the Stipulation.

 

8.14 This Stipulation and the exhibits attached hereto shall be considered to have been negotiated, executed and delivered, and to be wholly performed, in the State of Delaware, and the rights and obligations of the parties to this Stipulation shall be construed and enforced in accordance with, and governed by, the internal, substantive laws of the State of Delaware without giving effect to that State's choice-of-law principles.

 

8.15 Plaintiffs have not assigned, encumbered, or in any manner transferred in whole or in part any of the Released Claims.

 

8.16 The Parties hereby represent that the Action was filed, prosecuted and defended in good faith and in accordance with federal and state law, including Rule 11 of the Federal Rules of Civil Procedure, and is being settled voluntarily after consultation with competent legal counsel without duress.

 

8.17 All agreements made and orders entered during the course of the Action relating to the confidentiality of information shall survive this Stipulation.

 

8.18 Without further order of the Court, the Parties may agree to reasonable extensions of time to carry out any of the provisions of this Stipulation.  If any of the conditions specified in ¶ 6.1 are not met, then the Stipulation shall be canceled and terminated unless counsel for the Parties mutually agree in writing to proceed with the Stipulation.

 

IN WITNESS WHEREOF, the Parties have caused the Stipulation to be executed by their duly authorized attorneys and dated April 1, 2016.

	
DATED:  April  1, 2016

	
THE SHUMAN LAW FIRM

KIP B. SHUMAN

	 	 
	 	
KIP B. SHUMAN

	 	
Post-Montgomery Ctr.

One Montgomery Street, Ste. 1800

San Francisco, CA 94104

Telephone:  303/861-3003

  

	 	
Co-Lead Counsel for Plaintiffs

	
DATED:  April  1, 2016

	
THE WEISER LAW FIRM, P.C.

BRETT D. STECKER

	 	 
	 	
BRETT D. STECKER

	 	
22 Cassatt Avenue

Berwyn, PA 19312

 (610) 225-2677

	 	
Co-Lead Counsel for Plaintiffs

	
DATED:  April  1, 2016

	
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

THOMAS J. NOLAN

 ALLEN L. LANSTRA

	 	 
	 	
THOMAS J. NOLAN

	 	
300 South Grand Avenue

Los Angeles, CA 90071

(213) 687-5513

	 	
Counsel for Individual Defendants Steven A. Kriegsman, John Y. Caloz, Louis Ignarro, Joseph Rubinfeld and Richard L. Wennekamp

	
DATED:  April 1, 2016

	
PEARSON, SIMON & WARSHAW LLP

CLIFFORD H. PEARSON

GEORGE S. TREVOR

	 	 
	 	
CLIFFORD H. PEARSON

	 	
15165 Ventura Boulevard, Suite 400

Sherman Oaks, CA 91403

(818) 788-8300

	 	
Counsel for Nominal Defendant CytRx CorporationEXHIBIT 10.2

 

RETIREMENT AGREEMENT AND MUTUAL GENERAL RELEASE

This Retirement Agreement and Mutual General Release (the "Agreement") dated as of May 31, 2016, is entered into by and between BENJAMIN S. LEVIN ("Executive") and CYTRX CORPORATION, a Delaware corporation (the "Company"). Throughout this Agreement, Executive and the Company may be referred to collectively as the "parties."

Recitals

A. Executive has been employed by the Company. Executive's last day of employment by the Company will be May 31, 2016 (the "Termination Date").

B. Executive and the Company wish to enter into an Agreement to clarify and resolve any outstanding issues that may exist between them arising out of the employment relationship and its termination, and any continuing obligations of the parties to one another following the end of the employment relationship.

C. In consideration of the Company's agreement to pay him the consideration (including a retirement payment as set forth herein), the Company has asked Executive to waive any and all rights he may have in potential claims against the Company, except for those rights provided in this Agreement and Executive's continuing right to enforce the terms and provisions of this Agreement against the Company. The Company has advised Executive of Executive's right to consult an attorney at his own expense prior to signing this Agreement and has provided Executive with twenty-one (21) calendar days in which to consider this Agreement and seek legal assistance. Executive has either consulted an attorney of Executive's choice or voluntarily elected not to consult legal counsel, and understands that except for his rights preserved and provided for above and elsewhere in this Agreement, Executive is waiving all potential claims against the Company and its agents.

D. This Agreement is not and should not be construed as an admission or statement by either party that it or any other party has acted wrongfully or unlawfully. Both parties expressly enter this Agreement for the sole purpose of clarifying and resolving any potential issues between them.

E. The Effective Date of this Agreement is defined in paragraph 13(d) hereof.  Each of the covenants and obligations set forth herein is contingent upon the occurrence of the Effective Date.

Agreements

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises contained below, it is agreed as follows:

1. Employment Ending Date.  Executive's employment with the Company will terminate effective on the Termination Date. Except as may occur pursuant to paragraph 14 of this Agreement, Executive will have no further employment duties or responsibilities to the Company after the Termination Date.

 

2. Retirement Consideration.  In exchange for the promises contained in this Agreement, and so long as Executive does not revoke this Agreement as provided in paragraph 13(d), the Company shall:

(a) pay to Executive the sum of Two Hundred Thirty Thousand Dollars ($230,000), less applicable tax withholdings (including federal and California withholdings) and deductions required by law (the "Retirement Payment"). The Retirement Payment will be paid as a lump sum through the Company's payroll after the Effective Date, but not later than ten (10) days after the Effective Date.

(b) maintain Executive at the Company's expense on the Company's health insurance plan at the same level of benefits he currently has until November 30, 2016,  after which time he shall have the right to elect insurance continuation coverage through Cal-COBRA, at his own expense. If Executive does not accept this Agreement, his Company-provided medical insurance benefits will terminate effective May 31, 2016, and he will be offered the right to elect Cal-COBRA at that time, at his own expense.

3. Valid Consideration.  The parties acknowledge and agree that Executive's right to be paid the Retirement Payment, and to be provided medical insurance beyond May 31, 2016, as identified in paragraph 2, is expressly conditioned on Executive signing this Agreement, and not thereafter revoking this Agreement. The parties further acknowledge and agree that the mutual promises and covenants contained herein constitute good, valid and sufficient consideration for this Agreement.

4. Return of Company Property.  Executive covenants, represents and warrants to the Company that within seventy-two (72) hours of the Termination Date, he will return to Company any and all materials and property of the Company of any type whatsoever (including, without limitation, any computer equipment, correspondence, tangible proprietary information or intellectual property, documents, records, notes, contracts, and other confidential or proprietary materials) that are in Executive's possession or control; provided, however, that Executive may retain all electronic devices that he has been using (including laptop computer, iPad and iPhone, that were previously paid for by the Company), but after the Effective Date, any charges for service or data storage or access will be the sole responsibility of Executive, and the Company will first remove any confidential or proprietary information from such electronic devices and Executive shall not delete or transfer any information from those devices until the Company's removal process has been completed. Executive further represents and warrants that he has returned or will return to the Company all office keys, identification badges, and access cards.

    5. Non-Disclosure of Company Confidential Information and Reaffirmation of Confidentiality Agreement.  Executive acknowledges that during the term of his employment with the Company, Executive executed an agreement entitled "Confidential Information and Invention Assignment Agreement," in the form attached hereto as Exhibit A. Executive hereto agrees that no later than the Termination Date, he will sign and deliver to the Company the "Termination Certification" attached as Exhibit B.

6. Confidentiality of Retirement Agreement; Non-Disparagement.

(a) Executive is a named executive of the Company, and therefore pursuant to SEC rules for publicly traded companies, his departure from the Company and a brief description of the general terms of this Agreement, including the amount of the Retirement Payment, will be disclosed on Form 8-K. However, Executive agrees that he will keep all other terms of this Agreement completely confidential, and that he will not disclose any information concerning the negotiation of this Agreement or its terms other than those publicly disclosed, to anyone other than Executive's immediate family, and his legal counsel, and/or financial advisors, who will be informed of and bound by this confidentiality clause, or in response to a subpoena issued by a court of competent jurisdiction or as otherwise required by law.

(b) Executive shall refrain from disparaging Company, its principals, officers, directors, independent contractors, and Executives.

(c) The Company will respond to requests for information from prospective employers by stating only Executive's dates of employment and position held, and if further information is requested, stating that it is corporate policy to not disclose any other information about former employees.

7. Stock Options.  Executive previously entered into a series of Stock Option Agreements, the most recent of which is attached hereto as Exhibit C. The parties agree that the terms of each of the existing Stock Option Agreements will remain in full force and effect subsequent to the Termination Date, subject to the following:

(a) all unvested options (per the schedule attached as Exhibit D) will continue to vest according to the usual vesting period (equal installments, over 36 months) and each of the grants will expire at the end of their respective terms.

(b) during the period from June 1, 2016 through June 30, 2016, Executive will be entitled to exercise his vested options and then sell the shares at his discretion, provided that during such period Executive will not sell, or place orders to sell, more than 25,000 shares per day, and Executive consents to the entry of stop transfer instructions with the Company's transfer agent against the transfer of shares in excess of 25,000 shares per day. After June 30, 2016, Executive's right to exercise his vested options, and to sell shares, shall be as determined under the terms of the Stock Option Agreements and applicable law; however, Executive may continue to exercise his vested options up to the end of their respective terms without regard to any time limitations in Section 6(a)(viii) or (x) of the CytRx Corporation Amended and Restated 2008 Stock Incentive Plan, in existence at the time of this Agreement.

(c) should the Company decide to discontinue drug development and enter into a different business, acquire a different business, or be acquired by a company whose business is not drug development, Executive will then have ninety (90) days from the date that he is notified in writing of such event to exercise any vested options he may still have, including any options that become vested during such ninety (90) day period pursuant to Section 7(a). Any options that have not been exercised by the last day of such ninety (90) day period, including any options that have not yet vested pursuant to Section 7(a), shall be forfeited on the last day of the ninety (90) day period.

8. Executive's General Release of Claims. Upon receipt of the Retirement Payment, referenced in Paragraph 2 above, and except as set forth in paragraph 9 of this Agreement, Executive expressly waives any and all claims against the Company and releases it, including, without limitation, each of its members, partners, officers, directors, stockholders, managers, Executives, consultants, agents, attorneys, parent and subsidiary corporations, and representatives (the "Company Releasees"), from any and all claims, demands, lawsuits, causes of action, obligations, and liabilities of whatever kind, which he may have or thinks he may have against the Company Releasees or any of them based upon events or facts arising at any time on or before the date of execution of this Agreement, including but not limited to, claims that relate to Executive's employment and/or the separation of his employment with the Company. Executive agrees this general release of claims includes, but is not limited to, claims for breach of any implied or express contract or covenant; claims for promissory estoppel; claims of entitlement to any pay; claims of wrongful denial of insurance and Executive benefits; claims for wrongful termination, public policy violations, defamation, invasion of privacy, fraud, misrepresentation, emotional distress or other common law or tort matters; claims of harassment, retaliation or discrimination based on age, race, color, religion, sex, national origin, ancestry, physical or mental disability, medical condition, marital status, sexual orientation, union activity, veteran status, or any other status protected by law; claims based upon the California or United States Constitutions; any claims based on alleged restrictions on the Company's right to terminate, not to hire or promote employees, or on the Company's ability to change an employee's compensation or other terms and conditions of employment; and claims based on any federal, state or local law, including, without limitation:  Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Equal Pay Act, 29 U.S.C. § 206(d)(1); the Americans with Disabilities Act; the Americans with Disabilities Act Amendments Act; the Labor Management Relations Act; the Family and Medical Leave Act; the Executive Retirement Income Security Act; the California Fair Employment and Housing Act; the California Labor Code; the California Family Rights Act, the California Constitution; the California Industrial Welfare Commission Wage Orders; and the California Government Code, as well as any amendments to those laws. Executive expressly understands that among the various claims and rights being waived by him in this Agreement are those arising under the Age Discrimination in Employment Act ("ADEA"), as amended, and in that regard Executive specifically acknowledges that he has read and understands the provisions of paragraph 13 below before signing this Agreement

9. Exclusions From General Release/Additional Executive Protections.  Excluded from the General Release given by Executive above are: (i) rights and claims which cannot be waived by law, including claims for workers' compensation, unemployment compensation, and accrued and vested retirement benefits; (ii) claims arising after the effective date of this Agreement; (iii) claims for breach of this Agreement; (iv) rights and claims under the Company's long-term disability policy; (v) rights and claims under the Indemnification Agreement between Executive and the Company; (vi) rights and claims under the Company's director and officer insurance policies, including existing and any future policies covering time periods within the limitations period(s) for which Executive may be subject to claims; and (vii) rights and claims under the Company's bylaws and Articles of Incorporation, including but not limited to provisions related to indemnification of officers.  Neither the General Release above nor anything else in this Agreement limits Executive's rights to file a charge with an administrative agency (such as the U.S. Equal Employment Opportunity Commission), provide information to an administrative agency, or participate in an agency investigation. The Exclusions and Protections contained in this paragraph 9 override any language to the contrary in any other part of this Agreement.

10. Company's General Release of Claims/Exclusions. Upon occurrence of the Effective Date, and except as set forth in this paragraph, the Company expressly waives any and all claims against the Executive and releases him, including, without limitation, his, agents, attorneys, and representatives (the "Executive Releasees"), from any and all claims, demands, lawsuits, causes of action, obligations, and liabilities of whatever kind, which it may have or thinks it may have against the Executive Releasees or any of them based upon events or facts arising at any time on or before the date of execution of this Agreement, including but not limited to, claims that relate to Executive's employment and/or the separation of his employment with the Company. Excluded from this General Release given by the Company are any and all claims that the Company may have against Executive arising from (a) any of the public Contingencies reported in the Company's most recent Form 10-Q filing, and (b) any inquiries or investigations by any governmental agencies. Notwithstanding anything to the contrary in this Agreement, the exclusion set forth in the preceding sentence shall not exclude from the release set forth in this Section 10 any claims to the extent arising from facts or information that the Company knows as of the Effective Date. Subject to Section 14(b), Executive agrees to cooperate fully in the defense of any such action as Company may reasonably require, and to make himself available to provide information, declarations or other statements under oath, and to prepare for and attend depositions or other proceedings where his sworn testimony may be requested or required. Company shall be entitled to select counsel in the defense of such claims in its reasonable discretion, but Executive is entitled to retain separate counsel in the event Executive reasonably believes that there is a conflict between the Executive's interests and those of the Company.

 11. Release of Unknown Claims.  It is the intention of the parties that this Agreement is a General Release which shall be effective as a bar to each and every claim, demand, or cause of action it releases. Each party recognizes that he or it may have some claim, demand, or cause of action against the other of which he or it is totally unaware and unsuspecting which he or it is giving up by execution of the General Release. It is the intention of each party in executing this Agreement that it will deprive him or it of each such claim, demand or cause of action and prevent him or it from asserting it against the other. In furtherance of this intention, the parties each expressly waive any rights or benefits conferred by the provisions of Section 1542 of the Civil Code of the State of California (and/or other similar provision(s) of any other jurisdiction), which provides as follows:

"A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, 

which if known by him or her must have materially affected his or his/her settlement with the debtor."

12. Indemnification by the Company.  Company shall defend, indemnify and hold harmless Executive from and against any and all damages, costs, liability, and expense whatsoever (including attorneys' fees and related disbursements) incurred based on any claim that arises or results from any acts or decisions made in good faith by Executive while performing any of his job duties while an Executive of Company, to the extent permitted by law.

13. Right of Revocation.  In compliance with the Older Workers Benefit Protection Act (P.L. 101433), Executive does hereby acknowledge and agree as follows:

(a) That this Agreement does not purport to waive rights or claims that may arise from acts or events occurring after the date that this Agreement is executed by the parties;

(b) That this Agreement specifically applies to any rights or claims Executive may have against the Company under the federal Age Discrimination in Employment Act of 1967, as amended;

(c) That the consideration provided for in this Agreement is in addition to that to which Executive is already entitled;

(d) That this Agreement shall be revocable by Executive for a seven (7)-day period following execution of this Agreement by Executive. Accordingly, this Agreement shall not become effective or enforceable until the expiration of the seven (7)-day revocation period ("Effective Date"); and

(e) That Executive, having carefully read this Agreement and knowing the contents hereof, freely and voluntarily consents to all the terms and conditions herein, understands the final and binding effect of this Agreement, has been advised of his right to and has been given a chance to consult with and review this Agreement with an attorney of his choice prior to signing this Agreement, and has been given a period of twenty-one (21) days within which to consider whether to sign this Agreement. In the event that Executive chooses to waive this twenty-one (21) day period, he acknowledges that he was given a reasonable period of time within which to consider this Agreement and that his waiver was made freely and voluntarily and without duress or any coercion by any other person, including anyone at Company or the Company Releasees.

14. Potential Continued Services.

        (a) Executive agrees that, upon reasonable notice if requested by the Company, he will make himself available at reasonable times, at no cost to the Company, to assist with an orderly transition to a new General Counsel. The Company acknowledges that Executive may not reside in Los Angeles at the time of such requested assistance, and thus any assistance may be by telephone at times reasonably convenient for Executive.  Should the Company require that Executive travel to provide such assistance, any such travel shall be at the sole expense of Company. If such travel includes travel by commercial airlines, Executive is limited to coach or business class consistent with Company's Travel Policy, and at times reasonably convenient to Executive.

(b) If Executive is required to provide testimony or otherwise participate in the defense or prosecution of any legal or governmental proceeding involving the Company or Executive's service as an officer thereof, the Company shall compensate Executive for all time spent related to such effort, and if any travel is reasonably required, such travel shall be at the sole expense of Company consistent with CytRx's Travel Policy as stated in 14(a).

(c) In addition, if requested by the Company and if Executive is willing, the parties agree that they will negotiate in good faith concerning provision of consulting services to the Company by Executive, on mutually agreeable terms to be determined.

15. No On-the-Job Injury.  Executive represents and warrants that he has not experienced a job-related illness or injury during his employment with the Company for which he has not already filed a claim, and that he has disclosed to the Company any pending or previously filed claim relating to an on-the-job injury or illness.

16. Counterparts.  This Agreement may be executed in counterparts, which taken together form one legal instrument. Multiple signature pages and signatures delivered via scanned-in PDF copy or facsimile will all constitute originals and together will constitute one and the same instrument.

17. Binding Agreement.  This Agreement shall be binding upon each party and its and his heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of the Company Releasees, the Executive Releasees and each of them, and to their heirs, administrators, representatives, executors, successors, and assigns.

18. Severability.  The provisions of this Agreement are severable, and if any part of it is found to be unlawful or unenforceable, the other provisions of this Agreement shall remain fully valid and enforceable to the maximum extent consistent with applicable law.

19. Entire Agreement/Survival.  Executive acknowledges that no promises or representations other than those set forth in this Agreement have been made to him to induce him to sign this Agreement, and that he only has relied on promises expressly stated herein. Except for these specific documents: (i) "Confidential Information and Invention Assignment Agreement" and related "Termination Certification;" (ii) Stock Option Agreements; and (iii) Indemnification Agreement dated December 9, 2013 between Executive and Company; this Agreement sets forth the entire understanding between Executive and the Company and supersedes any prior agreements or understandings, express or implied, pertaining to the terms of Executive's employment with Company and the termination of the employment relationship. The provisions of this Agreement shall survive the Termination Date and the termination of Executive's employment.

20. Governing Law.  This Agreement shall be construed as a whole in accordance with its fair meaning and in accordance with the laws of the State of California. The language of this Agreement shall not be construed for or against any particular party. The headings used herein are for reference only and shall not affect the construction of this Agreement.

21. Attorneys' Fees. The prevailing party shall have the right to collect from the other party its reasonable costs and necessary disbursements and attorneys' fees incurred in enforcing this Agreement.

22. Tax Indemnification.  It is understood between the parties that Executive and his counsel, if any, have not relied upon any representation, express or implied, made by Company or any of its representatives as to the tax consequences of this Agreement and that Executive and his counsel release the Company Releasees from any and all liability in connection with any such tax consequences. Company's payments to Executive described above in paragraph 2 represent a compromise of any and all of Executive's known or unknown claims against the Company Releasees. Executive agrees that any liability for state or federal income tax payments or penalties arising from said payments shall be Executive's sole responsibility. Executive agrees to indemnify and to hold harmless the Company Releasees from any and all actions, claims or demands brought by any tax or other authority based upon Executive's tax obligations arising from payments to be made pursuant to this Agreement, and Executive agrees specifically to reimburse Company for any taxes, interest and penalties paid by Company and for the costs, legal fees, and any other expenses incurred by Company as a result of any such actions, claims or demands.

23. Section 409A.  The payments made under this Agreement are intended to comply with section 409A of the Internal Revenue Code of 1986, as amended, and applicable guidance issued thereunder ("Section 409A"). Payments made under this Agreement will be interpreted and construed, to the extent possible, to be distributed in the short-term deferral period, as defined under Treasury Regulation section 1.409A-1(b)(4), or the separation pay exemption, as provided in Treasury Regulation section 1.409A-1(b)(9). For purposes of this Agreement, the phrase "Termination Date" means the date in which Executive's "separation from service," as defined in Treasury Regulation section 1.409A-1(h), occurred. For purposes of this Agreement, each payment made and benefits provided under this Agreement is hereby designated as a separate payment, and will not collectively be treated as a single payment, as provided in Treasury Regulation section 1.409A-2(b)(2)(iii).  Notwithstanding the foregoing, Executive, after consultation with his own tax advisors, has concluded that none of the amounts to be paid to him pursuant to Section 2 are required to be deferred until six months after his separation from service in order to satisfy the requirements of Section 409A, and Executive shall be solely responsible for any penalties imposed on him by Section 409A (or Section 17508.2 of the California Revenue and Taxation Code) if it is subsequently determined that any such amount should have been so deferred.

PLEASE READ CAREFULLY.  THIS AGREEMENT INCLUDES THE RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

The parties have executed this Agreement, consisting of eight (8) pages, including this page, as of the dates indicated below.

Dated:  May 31, 2016

CYTRX CORPORATION,

 a Delaware corporation

By:

        /s/ STEVEN A. KRIEGSMAN

 Its:   Chief Executive Officer

Dated:  May 31, 2016

       /s/ BENJAMIN S. LEVIN

                            BENJAMIN S. LEVIN

Exhibit A

Confidential Information and Invention Assignment Agreement

CYTRX CORPORATION

CONFIDENTIAL INFORMATION AND

 INVENTION ASSIGNMENT AGREEMENT

As a condition of my becoming employed (or my employment being continued) by or retained as a consultant (or my consulting relationship being continued) by CytRx Corporation, a Delaware corporation ("CytRx"), or any of its current or future subsidiaries, affiliates, successors or assigns (collectively, the "Company"), and in consideration of my employment or consulting relationship with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following:

1. Employment or Consulting Relationship.  I understand and acknowledge that this Agreement does not alter, amend or expand upon any rights I may have to continue in the employ of, or in a consulting relationship with, or the duration of my employment or consulting relationship with, the Company under any existing agreements between the Company and me or under applicable law.  Any employment or consulting relationship between the Company and me, whether commenced prior to or upon the date of this Agreement, shall be referred to herein as the "Relationship."

2. Duties.  I will perform for the Company such duties as may be designated by the Company from time to time.  During the Relationship, I will devote my best efforts to the interests of the Company and will not engage in other employment or in any activities detrimental to the best interests of the Company without the prior written consent of the Company.

3. At-Will Relationship.  I understand and acknowledge that my Relationship with the Company is and shall continue to be at-will, as defined under applicable law, meaning that either I or the Company may terminate the Relationship at any time for any reason or no reason, without further obligation or liability.

4. Confidential Information.

(a) Company Information.  I agree at all times during the term of my Relationship with the Company and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company to the extent necessary to perform my obligations to the Company under the Relationship, or to disclose to any person, firm, corporation or other entity without written authorization of the Board of Directors of the Company, any Confidential Information of the Company which I obtain or create.  I further agree not to make copies of such Confidential Information except as authorized by the Company.  I understand that "Confidential Information" means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, suppliers,

customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the Relationship), prices and costs, markets, software, developments, inventions, laboratory notebooks, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, licenses, finances, budgets or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment or created by me during the period of the Relationship, whether or not during working hours. I understand that "Confidential Information" includes, but is not limited to, information pertaining to any aspects of the Company's business which is either information not known by actual or potential competitors of the Company or other third parties not under confidentiality obligations to the Company, or is otherwise proprietary information of the Company or its customers or suppliers, whether of a technical nature or otherwise.  I further understand that Confidential Information does not include any of the foregoing items which has become publicly and widely known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved.

 

(b) Prior Obligations.  I represent that my performance of all terms of this Agreement as an employee or consultant of the Company has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me prior or subsequent to the commencement of my Relationship with the Company, and I will not disclose to the Company or use any inventions, confidential or non-public proprietary information or material belonging to any previous, client, employer or any other party.  I will not induce the Company to use any inventions, confidential or non-public proprietary information, or material belonging to any previous client, employer or any other party.

 (c) Third Party Information.  I recognize that the Company has received and in the future will receive confidential or proprietary information from third parties subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes.  I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company's agreement with such third party.

5. Inventions.

(a) Inventions Retained and Licensed.  I have attached hereto, as Exhibit A, a list describing with particularity all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to the commencement of the Relationship (collectively referred to as "Prior Inventions"), which belong solely to me or belong to me jointly with another, which relate in any way to any of the Company's proposed businesses, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions.  If, in the course of my Relationship with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.

(b) Assignment of Inventions.  I agree that I will promptly make full written disclosure to CytRx, will hold in trust for the sole right and benefit of CytRx, and hereby assign to CytRx, or its designee, all my right, title and interest throughout the world in and to any and all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time in which I am employed by or a consultant of the Company (collectively referred to as "Inventions"), except as provided in Section 5(e) below.  I further acknowledge that all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets which are made by me (solely or jointly with others) within the scope of and during the period of my Relationship with the Company are "works made for hire" (to the greatest extent permitted by applicable law) and are compensated by my salary (if I am an employee) or by such amounts paid to me under any applicable consulting agreement or consulting arrangements (if I am a consultant), unless regulated otherwise by the mandatory law of the state of California.

(c) Maintenance of Records.  I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my Relationship with the Company.  The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, laboratory notebooks, and any other format.  The records will be available to and remain the sole property of the Company at all times.  I agree not to remove such records from the Company's place of business except as expressly permitted by Company policy which may, from time to time, be revised at the sole election of the Company for the purpose of furthering the Company's business.  I agree to return all such records (including any copies thereof) to CytRx at the time of termination of my Relationship with the Company as provided for in Section 6.

(d) Patent and Copyright Rights.  I agree to assist CytRx, or its designee, at its expense, in every proper way to secure CytRx's, or its designee's, rights in the Inventions and any copyrights, patents, trademarks, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to CytRx or its designee of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments which CytRx or its designee shall deem necessary in order to apply for, obtain, maintain and transfer such rights and in order to assign and convey to CytRx or its designee, and any successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto.  I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement until the expiration of the last such intellectual property right to expire in any country of the world.  If CytRx or its designee is unable because of my mental or physical incapacity or unavailability or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents, copyright, mask works or other registrations covering Inventions or original works of authorship assigned to CytRx or its designee as above, then I hereby irrevocably designate and appoint CytRx and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters patent, copyright or other registrations thereon with the same legal force and effect as if originally executed by me. I hereby waive and irrevocably quitclaim to CytRx or its designee any and all claims, of any nature whatsoever, which I now or hereafter have for infringement of any and all proprietary rights assigned to CytRx or such designee.

(e) Exception to Assignments.  I understand that the provisions of this Agreement requiring assignment of Inventions to CytRx do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870 (attached hereto as Exhibit B).  I will advise the Company promptly in writing of any inventions that I believe meet such provisions and are not otherwise disclosed on Exhibit A.

6. Company Property; Returning Company Documents.  I acknowledge and agree that I have no expectation of privacy with respect to the Company's telecommunications, networking or information processing systems (including, without limitation, stored company files, e-mail messages and voice messages) and that my activity and any files or messages on or using any of those systems may be monitored at any time without notice.  I further agree that any property situated on the Company's premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.  I agree that, at the time of termination of my Relationship with the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, materials, flow charts, equipment, other documents or property, or reproductions of any of the aforementioned items developed by me pursuant to the Relationship or otherwise belonging to the Company, its successors or assigns.  In the event of the termination of the Relationship, I agree to sign and deliver the "Termination Certification" attached hereto as Exhibit C; however, my failure to sign and deliver the Termination Certificate shall in no way diminish my continuing obligations under this Agreement.

7. Notification to Other Parties.

(a) Employees.  In the event that I leave the employ of the Company, I hereby consent to notification by the Company to my new employer about my rights and obligations under this Agreement.

(b) Consultants.  I hereby grant consent to notification by the Company to any other parties besides the Company with whom I maintain a consulting relationship, including parties with whom such relationship commences after the effective date of this Agreement, about my rights and obligations under this Agreement.

8. Solicitation of Employees, Consultants and Other Parties.  I agree that during the term of my Relationship with the Company, and for a period of twenty-four (24) months immediately following the termination of my Relationship with the Company for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company's employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other person or entity.  Further, during my Relationship with the Company and at any time following termination of my Relationship with the Company for any reason, with or without cause, I shall not use any Confidential Information of the Company to attempt to negatively influence any of the Company's clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

9. Representations and Covenants.

(a) Facilitation of Agreement.  I agree to execute promptly any proper oath or verify any proper document required to carry out the terms of this Agreement upon the Company's written request to do so.

(b) Conflicts.  I represent that my performance of all the terms of this Agreement does not and will not breach any agreement I have entered into, or will enter into with any third party, including without limitation any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to commencement of my Relationship with the Company.  I agree not to enter into any written or oral agreement that conflicts with the provisions of this Agreement.

(c) Voluntary Execution.  I certify and acknowledge that I have carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions.

10. General Provisions.

(a) Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

(b) Entire Agreement.  This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us.  No modification or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by both parties.  Any subsequent change or changes in my duties, obligations, rights or compensation will not affect the validity or scope of this Agreement.

(c) Severability.  If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

(d) Successors and Assigns.  This Agreement will be binding upon my heirs, executors, administrators and other legal representatives, and my successors and assigns, and will be for the benefit of the Company, its successors, and its assigns.

(e) Survival.  The provisions of this Agreement shall survive the termination of the Relationship and the assignment of this Agreement by the Company to any successor in interest or other assignee.

(f) Remedies.  I acknowledge and agree that violation of this Agreement by me may cause the Company irreparable harm, and therefore agree that the Company will be entitled to seek extraordinary relief in court, including but not limited to temporary restraining orders, preliminary injunctions and permanent injunctions without the necessity of posting a bond or other security and in addition to and without prejudice to any other right and remedies that the Company may have for a breach of this Agreement.

(g) ADVICE OF COUNSEL.  I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.  THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

[Signature Page Follows]

The parties have executed this Agreement on the respective dates set forth below:

COMPANY: EMPLOYEE:

CYTRX CORPORATION Benjamin Levin, an Individual:

By:  /s/ STEVEN A. KRIEGSMAN                        /s/ BENJAMIN S. LEVIN

Name: Steven A. Kriegsman                   Signature

Title:                                Chairman & CEO

Date: May 31, 2016 Date:  May 31, 2016

 

                                                                                                                                      

Address:                         11726 San Vicente BlAddress:                                                        Address: [residential address - intentionally omitted]

                    Suite 650

                    Los Angeles, CA 90049  

ATTACHMENT A

LIST OF PRIOR INVENTIONS

 AND ORIGINAL WORKS OF AUTHORSHIP

EXCLUDED UNDER SECTION 5

	

        Title        

	

   Date   

	
Identifying Number

or Brief Description

	 	 	 

X    No inventions or improvements or works of authorship

___ Additional Sheets Attached

Signature of Employee: /s/ BENJAMIN S. LEVIN

Print Name of Employee: Benjamin Levin

Date: May 31, 2016

ATTACHMENT B

Section 2870 of the California Labor Code is as follows:

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1)  Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

(2)  Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

EXHIBIT C

TERMINATION CERTIFICATION

This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, flow charts, materials, equipment, other documents or property, or copies or reproductions of any aforementioned items belonging to CytRx Corporation, a Delaware corporation, its subsidiaries, affiliates, successors or assigns (together the "Company").

I further certify that I have complied with all the terms of the Company's Confidential Information and Invention Assignment Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

I further agree that, in compliance with the Confidential Information and Invention Assignment Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

I further agree that for twenty-four (24) months from the date of this Certificate, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company's employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away, hire, or otherwise engage the services of employees or consultants of the Company, either for myself or for any other person or entity.  Further, I shall not at any time use any Confidential Information of the Company to negatively influence any of the Company's clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

Date: May 31, 2016           /s/ BENJAMIN S. LEVIN

(Employee's Signature)

Benjamin Levin

(Type/Print Employee's Name)

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