CytoDyn (CYDY) DEFA14A Additional proxy soliciting materials

Exhibit 10.1

SECOND AMENDMENT TO SURETY BOND BACKSTOP AGREEMENT

This SECOND AMENDMENT TO SURETY BOND BACKSTOP AGREEMENT (this “Amendment”) is entered into as of December 1, 2022 (the “Effective Date”), to the Surety Bond Backstop Agreement effective February 14, 2022, and as previously amended on July 18, 2022 (the “Agreement”), and is by and among CytoDyn Inc., a Delaware corporation (“CytoDyn”), David Fairbank Welch, both individually and in his capacity as trustee of the David F. and Heidi A. Welch Revocable Trust, Heidi A. Welch, both individually and in her capacity as trustee of the David F. and Heidi A. Welch Revocable Trust, LRFA, LLC, a Delaware limited liability company (“LRFA” and, together with David F. Welch, Heidi A. Welch, each an “Indemnitor” and collectively the “Indemnitors”), and 4-Good Ventures LLC (“4-Good”), a Delaware limited liability company (“4-Good”). CytoDyn, Indemnitors and 4-Good are collectively referred to herein as the “Parties” or each, individually, as a “Party”.

RECITALS

WHEREAS the Parties wish to amend the Agreement, as well as the Warrants (as defined in the Agreement).

NOW, THEREFORE, in consideration of the consideration set forth in this Amendment and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree to amend the Agreement and the Warrants as specified below.

1. Defined Terms. Terms used in this Amendment without definition shall have the meanings ascribed to them in the Agreement, as applicable.

2. Extension of Term of Surety Bond Indemnity. Paragraph 6(b) of the Agreement is further amended and restated in its entirety as follows:

“(b) CytoDyn shall fully relieve the Indemnitors from the Surety Bond obligation not later than January 31, 2023, as follows:

(i) on or before January 5, 2023, CytoDyn shall relieve Indemnitors of a minimum of $1,500,000 of cash collateral currently pledged by Indemnitors in support of the Surety Bond; and

(ii) on or before January 31, 2023, CytoDyn shall relieve Indemnitors of the remainder of the cash collateral, $5,000,000, pledged by Indemnitors in support of the Surety Bond; provided, however, if on January 31, 2023, $1,000,000 or less of cash collateral remains outstanding, CytoDyn, at its sole discretion, can elect to have Indemnitors exchange the cash obligation for shares or warrants for the remaining balance.”

Page 1 – Amendment to Surety Bond Backstop Agreement – CytoDyn – Welch

3. CytoDyn’s Paragraph 6(b)(ii) Option Regarding Indemnitors Purchase of Shares and/or Warrants. Provided that CytoDyn has complied in a timely fashion with its obligations under the amended Paragraph 6(b), and further provided that CytoDyn elects to exercise its option provided in the revised Paragraph 6(b)(ii) as outlined in Section 2 above, Indemnitors shall, on or before February 14, 2023, elect to:

(i) purchase from CytoDyn shares with an aggregate fair market value on the date of such purchase of $1,000,000 (or less, as the amount may be determined);

(ii) purchase warrants with an aggregate exercise price of $1,000,000 (or less, as the amount may be determined); and/or

(iii) exercise Warrants with an aggregate exercise price of $1,000,000 (or less, as the amount may be determined).

The total of the $1,000,000 (or less, as the amount may be determined) shall be inclusive of an adjustment for an income tax true-up. The purchase price or aggregate exercise price, as the case may be, shall be paid in cash. Upon receipt of the consideration specified in this Section 3, CytoDyn shall obtain from Surety a full release of the Indemnitors’ obligations under the Surety Bond Indemnity.

For purposes of this Section 3, “fair market value” with respect to shares of CytoDyn shall mean the closing sale price of CytoDyn common stock as quoted on the OTCQB on the most recent date on which there was a sale of CytoDyn common stock prior to the date of purchase or exercise by Indemnitors.

4. Amendments to Warrants. As consideration for the extension provided in Section 2 of this Amendment, CytoDyn hereby amends the pre-existing Warrants under the Agreement to provide as follows:

(a) The Exercise Price of all 30 million shares covered by the Warrants shall be $0.10 per share.

5. Award of Additional Warrants. As additional consideration for the extension provided in Section 2 of this Amendment, timely following the Effective Date, CytoDyn shall issue to Indemnitors:

(i) a warrant for the purchase of seven million five hundred thousand (7,500,000) common shares of CytoDyn common stock at an exercise price of $0.10 per share (the “Extension Warrant”) with registration rights; and

2 – Second Amendment to Surety Bond Backstop Agreement – CytoDyn – Welch

(ii) an additional warrant for the purchase of up to seven million five hundred thousand (7,500,000) common shares of CytoDyn common stock at an exercise price of $0.10 per share, with the exact amount to be determined (the “Optional Vesting Warrant”). Warrants issued under the Optional Vesting Warrant will be determined by how quickly CytoDyn is able to relieve Indemnitors of the Surety Bond obligation as provided in Paragraph 6(b)(ii). Warrants issued under the Optional Vesting Warrant will accrue based on the formula and hypothetical chart included in Schedule A hereto. The total warrants to be issued under the Optional Vesting Warrant will be calculated on or before February 14, 2023, and will include registration rights.

6. Indemnity for Indemnitors. As additional consideration for the extension provided in Section 2 of this Amendment, and only in the event CytoDyn is unable to relieve Indemnitors of the Surety Bond obligation as contemplated by Section 2 above, CytoDyn agrees to indemnify Indemnitors for any fees incurred by Indemnitors as a result of legal action taken by the Surety against Indemnitors. For the purposes of this Section 6, legal action shall be limited to include legal proceedings relating to a collection effort initiated by the Surety, against the Indemnitors, as it relates to the Surety Bond obligation.

7. Execution and Delivery of Additional Documents. Each of the Parties agrees to execute and deliver such other documents as one or more other Parties may request in order to carry out the transactions contemplated under the Agreement and this Amendment.

8. General.

(a) Captions. Any captions for the sections of this Amendment are for convenience only and do not control or affect the meaning or construction of any of the provisions of this Amendment.

(b) Severability. If any term, condition, or provision of this Amendment, or any other document or instrument referred to in this Amendment, is held invalid for any reason, such offending term, condition, or provision shall be stricken therefrom, and the remainder of this Amendment shall not be affected thereby.

(c) Negotiated Agreement. This Amendment is a negotiated agreement. In the event of any ambiguity in this Amendment, such ambiguity shall not be subject to a rule of contract interpretation that would cause the ambiguity to be construed against any of the parties to this Amendment.

(d) Entire Agreement. Except as amended by this Second Amendment, all other provisions of the Agreement remain in full force and effect.

(e) Applicable Law. This Amendment shall be governed by and construed under the laws of the State of Washington, without regard to principles of conflicts of law.

[Signature page follows]

3 – Second Amendment to Surety Bond Backstop Agreement – CytoDyn – Welch

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the Effective Date.

CytoDyn Inc., a Delaware corporation
By:	/s/ Antonio Migliarese
Name:	Antonio Migliarese	David Fairbank Welch, both individually and in
Title:	CFO	his capacity as trustee of the David F. and
		Heidi A. Welch Revocable Trust,
4-Good Ventures, LLC, a Delaware
limited liability company
By:	/s/ David F. Welch	Heidi A. Welch, both individually and in her
Name:	David F. Welch	capacity as trustee of the David F. and Heidi
Title:	President	A. Welch Revocable Trust
		LRFA LLC, a Delaware limited liability
		company
		By:	/s/ David F. Welch
		Name:	David F. Welch
		Title:	President

4 – Second Amendment to Surety Bond Backstop Agreement – CytoDyn – Welch

SCHEDULE A

Consistent with Section 5(ii) of the Second Amendment to Surety Bond Backstop Agreement, warrants under the Optional Vesting Warrant may accrue up to the number of warrants indicated on the specified date if the full $6,500,000 Surety Bond obligation remains outstanding on the specified date (column A); however, this amount will be adjusted based on the percentage of the $6,500,000 Surety Bond obligation which remains outstanding as of the specified date (column B).

For the avoidance of doubt, the chart below does not represent payment commitments or obligations and is included strictly for illustrative purposes.

	(A)					(B)		(C) = A x B
	Potential  Warrants to  Be Issued	Beginning  Balance		Payment	Ending  Balance	% of Original  Balance  Outstanding		Warrant  Issued
12/6/2022	2,045,455	$	6,500,000	—	6,500,000	100	%	2,045,455
12/13/2022	681,818	$	6,500,000	—	6,500,000	100	%	681,818
12/20/2022	681,818	$	6,500,000	(500,000)	6,000,000	92	%	629,371
12/27/2022	681,818	$	6,000,000	(500,000)	5,500,000	85	%	576,923
1/3/2023	681,818	$	5,500,000	(500,000)	5,000,000	77	%	524,476
1/10/2023	681,818	$	5,000,000	(1,000,000)	4,000,000	62	%	419,580
1/17/2023	681,818	$	4,000,000	(1,000,000)	3,000,000	46	%	314,685
1/24/2023	681,818	$	3,000,000	(1,000,000)	2,000,000	31	%	209,790
1/31/2023	681,818	$	2,000,000	(1,000,000)	1,000,000	15	%	104,895
Total	7,500,000			(5,500,000)				5,506,993

(A) = # of potential warrant that can be issued if the balance is 100% ($6.5M) outstanding at specified date.

(B) = Current outstanding balance divided by original balance of $6.5M (% of current balance compared to originating balance) at specified date.

(C) = Actual total warrants issued calculated as the Potential Warrants to be Issued at specified multiplied by % of Originating Balance outstanding at specified date.

5 – Second Amendment to Surety Bond Backstop Agreement – CytoDyn – Welch