0001004878-15-000297.txt : 20151023
0001004878-15-000297.hdr.sgml : 20151023
20151023163216
ACCESSION NUMBER: 0001004878-15-000297
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 7
CONFORMED PERIOD OF REPORT: 20151022
ITEM INFORMATION: Entry into a Material Definitive Agreement
ITEM INFORMATION: Other Events
ITEM INFORMATION: Financial Statements and Exhibits
FILED AS OF DATE: 20151023
DATE AS OF CHANGE: 20151023
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CEL SCI CORP
CENTRAL INDEX KEY: 0000725363
STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
IRS NUMBER: 840916344
STATE OF INCORPORATION: CO
FISCAL YEAR END: 0930
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-11889
FILM NUMBER: 151173190
BUSINESS ADDRESS:
STREET 1: 8229 BOONE BLVD .
STREET 2: SUITE 802
CITY: VIENNA
STATE: VA
ZIP: 22182
BUSINESS PHONE: 7035069460
MAIL ADDRESS:
STREET 1: 8229 BOONE BLVD.
STREET 2: SUITE 802
CITY: VIENNA
STATE: VA
ZIP: 22182
FORMER COMPANY:
FORMER CONFORMED NAME: INTERLEUKIN 2 INC
DATE OF NAME CHANGE: 19880317
8-K
1
form8k101dawson10-15.txt
8-K DAWSON JAMES PLCMT AGENT AGREE
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 22, 2015
CEL-SCI CORPORATION
-----------------------------------
(Exact name of registrant as specified in its charter)
Colorado 001-11889 84-0916344
------------------------ ---------------- ---------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
8229 Boone Blvd. #802
Vienna, VA 22182
-----------------------------------------------
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (703) 506-9460
N/A
-----------------------------------------------
(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-14c))
Item 1.01 Entry Into a Material Definitive Agreement.
On October 22, 2015, CEL-SCI Corporation (the "Company") and Dawson James
Securities, Inc. entered into a Placement Agent Agreement (the "Placement Agent
Agreement") whereby the Company will issue and sell up to 17,910,447 shares of
the Company's common stock, as well as warrants to purchase up to an additional
17,910,447 shares of common stock. Each share of common stock is being sold
together with a warrant for the combined purchase price of $0.67, minus
underwriting commissions. The common stock and warrants will separate
immediately. The warrants are immediately exercisable and expire on October 28,
2020. Each warrant entitles the holder to purchase one share of the Company's
common stock at a price of $0.67 per share. No market exists for the warrants
and a market for the warrants is not expected to develop. The offering is
expected to close on or about October 28, 2015, subject to customary closing
conditions.
The net proceeds from the offering, assuming all shares and warrants
offered are sold, are expected to be approximately $10,940,000, after deducting
the underwriting commissions and estimated expenses payable by the Company.
The Placement Agent Agreement contains customary representations,
warranties, and agreements by the Company, and customary conditions to closing,
indemnification obligations of the Company and the Placement Agent, including
for liabilities under the Securities Act of 1933, as amended, other obligations
of the parties, and termination provisions. The representations, warranties and
covenants contained in the Placement Agent Agreement were made only for purposes
of such agreement and as of specific dates, were solely for the benefit of the
parties to such agreement, and may be subject to limitations agreed upon by the
contracting parties. These representations, warranties and covenants are not
factual information to investors about the Company.
The offering is being made pursuant to the Registration Statement and
Prospectus Supplement discussed below under Item 8.01. The Placement Agent
Agreement is filed as Exhibit 1.1 to this Current Report, and the description of
the terms of the Placement Agent Agreement is qualified in its entirety by
reference to such exhibit. A copy of the opinion of Hart & Hart, LLC relating to
the legality of the issuance and sale of the shares and warrants in the offering
is attached as Exhibit 5 hereto.
On October 22, 2015, the Company issued a press release announcing that it
had commenced the offering. A copy of this press release is attached as Exhibit
99.1. October 23, 2015, the Company issued a press release announcing that it
had priced the offering. A copy of the press release is attached as Exhibit
99.2.
Item 8.01 Other Events.
On October 23, 2015, the Company filed with the Securities Exchange
Commission (the "Commission") a prospectus supplement (the "Prospectus
Supplement") to the prospectus (the "Prospectus") included as part of the
Company's registration statement on Form S-3 declared effective by the
Commission on July 8, 2014 (File No. 333-196243) (the "Registration Statement"),
2
pursuant to which the Company will sell up to 17,910,447 shares of the Company's
common stock, as well as warrants to purchase up to an additional 17,910,447
shares of common stock.
Prospective investors should read the Registration Statement, the
Prospectus dated July 8, 2014 which was filed with the Commission on May 23,
2014, and the Prospectus Supplement, and all documents incorporated by reference
by the foregoing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibits Description
-------- -----------
1.1 Placement Agent Agreement dated October 22, 2015, by and among
CEL-SCI Corporation and Dawson James Securities, Inc.
5 Opinion of Hart & Hart, LLC
10(eee) Form of Warrant Agent Agreement
23 Consent of Hart & Hart, LLC
99.1 Press Release dated October 22, 2015.
99.2 Press Release dated October 23, 2015.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 23, 2015
CEL-SCI CORPORATION
By: Patricia B. Prichep
-----------------------------------
Patricia B. Prichep
Senior Vice President of Operations
4
EX-1
2
form8kdawsonex11oct-15.txt
EXH 1.1 - DAWSON JAMES PLACEMENT AGENT AGREE
EXHIBIT 1.1
PLACEMENT AGENCY AGREEMENT
Dawson James Securities, Inc.
1 North Federal Highway
Boca Raton, Florida 33432
October 22, 2015
Ladies and Gentlemen:
This letter (this "Agreement") constitutes the agreement between Cel-Sci
Corporation, a Colorado corporation (the "Company") and Dawson James Securities,
Inc. ("Dawson" or the "Placement Agent") pursuant to which Dawson shall serve as
the exclusive placement agent (the "Services") for the Company, on a best
efforts basis, in connection with the proposed offer and placement (the
"Offering") by the Company of its Securities (as defined Section 3 of this
Agreement). The Company and Dawson shall mutually agree to the terms of the
Offering and the Securities, and nothing in this Agreement may be construed to
suggest that Dawson would have the power or authority to bind the Company or an
obligation for the Company to issue any Securities or complete the Offering. The
Company expressly acknowledges and agrees that Dawson's obligations hereunder
are on a reasonable best "efforts basis" only and that the execution of this
Agreement does not constitute a commitment by Dawson to purchase the Securities
and does not ensure the successful placement of the Securities or any portion
thereof or the success of Dawson placing the Securities.
1. Appointment of Dawson James Securities, Inc. as Exclusive Placement Agent.
On the basis of the representations, warranties, covenants and agreements of the
Company herein contained, and subject to all the terms and conditions of this
Agreement, the Company hereby appoints the Placement Agent as its exclusive
placement agent in connection with a distribution of its Securities to be
offered and sold by the Company pursuant to a registration statement filed under
the Securities Act of 1933, as amended (the "Securities Act") on Form S-3 (File
No. 333-196243), and Dawson agrees to act as the Company's exclusive Placement
Agent. Pursuant to this appointment, the Placement Agent will solicit offers for
the purchase of or attempt to place all or part of the Securities of the Company
in the proposed Offering. Until the final closing or earlier upon termination of
this Agreement pursuant to Section 5 hereof, the Company shall not, without the
prior written consent of the Placement Agent, solicit or accept offers to
purchase the Securities other than through the Placement Agent. The Company
acknowledges that the Placement Agent will act as an agent of the Company and
use its reasonable "best efforts" to solicit offers to purchase the Securities
from the Company on the terms, and subject to the conditions, set forth in the
Prospectus (as defined below). The Placement Agent shall use commercially
reasonable efforts to assist the Company in obtaining performance by each
Purchaser whose offer to purchase Securities has been solicited by the Placement
Agent, but the Placement Agent shall not, except as otherwise provided in this
Agreement, be obligated to disclose the identity of any potential purchaser or
have any liability to the Company in the event any such purchase is not
consummated for any reason. Under no circumstances will the Placement Agent be
obligated to underwrite or purchase any Securities for its own account and, in
soliciting purchases of the Securities, the Placement Agent shall act solely as
an agent of the Company. The Services provided pursuant to this Agreement shall
be on an "agency" basis and not on a "principal" basis.
The Placement Agent will solicit offers for the purchase of the Securities in
the Offering at such times and in such amounts as the Placement Agent deems
advisable and will communicate to the Company, orally or in writing, each
reasonable offer to purchase Securities received by the Placement Agent as an
agent of the Company. The Company shall have the sole right to accept offers to
purchase Securities and may reject any such offer, in whole or in part. The
Placement Agent may retain other brokers or dealers to act as sub-agents on its
behalf in connection with the Offering and may pay any sub-agent a solicitation
fee with respect to any Securities placed by it. The Company and Placement Agent
shall negotiate the timing and terms of the Offering and acknowledge that the
Offering and the provision of Placement Agent services related to the Offering
are subject to market conditions and the receipt of all required related
clearances and approvals.
1
2. Fees and Expenses.
A. Placement Agent's Fee. As compensation for services rendered, the
Company shall pay to the Placement Agent in cash by wire transfer in
immediately available funds to an account or accounts designated by the
Placement Agent an amount (the "Placement Fee") equal to eight percent (8%)
of the aggregate gross proceeds received by the Company from the sale of
the Securities, at one or more closings (each a "Closing" and the date on
which each Closing occurs, a "Closing Date").
B. Offering Expenses. The Company will be responsible for and will pay all
expenses relating to the Offering, including, without limitation, (a) all
filing fees and expenses relating to the registration of the Securities
with the Commission; (b) all FINRA Public Offering filing fees; (c) all
fees and expenses relating to the listing of the Company's common stock on
the NYSE MKT; (d) all fees, expenses and disbursements relating to the
registration or qualification of the Securities under the "blue sky"
securities laws of such states and other jurisdictions as Dawson may
reasonably designate (including, without limitation, all filing and
registration fees, and the reasonable fees and disbursements of "blue sky"
counsel, which will be Dawson's counsel it being agreed that such fees and
expenses of Dawson's counsel will be limited to $25,000); (e) all fees,
expenses and disbursements relating to the registration, qualification or
exemption of the Securities under the securities laws of such foreign
jurisdictions as Dawson may reasonably designate; (f) the costs of all
mailing and printing of the Offering documents; (g) transfer and/or stamp
taxes, if any, payable upon the transfer of Securities from the Company to
Investors; and (h) the fees and expenses of the Company's accountants. The
Placement Agent may deduct from the net proceeds of the Offering payable to
the Company on the Closing Date the expenses set forth herein to be paid by
the Company to the Placement Agent, provided, however, that in the event
that the Offering is terminated, the Company agrees to reimburse the
Placement Agent pursuant to Section 5 hereof.
3. Description of the Offering.
The Securities to be offered directly to various investors (each, an "Investor"
or "Purchaser" and, collectively, the "Investors" or the "Purchasers") in the
Offering shall be up to 17,910,447 shares of the Company's common stock, $0.01
par value per share (the "Common Stock") (the Common Stock being offered herein,
the "Shares"), warrants to purchase up to 17,910,447 shares of Common Stock at
an exercise price of $0.67 per whole share (the "Warrants") and the shares of
Common Stock to be issued upon exercise of the Warrants. A combination of one
share of Common Stock and a Warrant to purchase one share of Common Stock will
be sold as a unit for a purchase price of $0.67 per Unit (of which $0.01 per
Unit shall be attributed to each Warrant to purchase one share of Common Stock)
(each, a "Unit" and collectively, the "Units"). The term "Securities" shall mean
the Units, the Common Stock underlying the Units, the Warrants and the Common
Stock underlying the Warrants. If the Company shall default in its obligations
to deliver Securities to a Purchaser whose offer it has accepted, the Company
shall indemnify and hold the Placement Agent harmless against any loss, claim,
damage or expense arising from or as a result of such default by the Company
under this Agreement.
4. Delivery and Payment; Closing.
Settlement of the Securities purchased by an Investor shall be made on one or
more Closing Dates by wire transfer in federal (same day) funds, payable to the
order of the Company upon delivery of the certificates (in form and substance
satisfactory to the Placement Agent) or via electronic delivery, in each case
representing the Securities to the Placement Agent, in the manner set forth
later in this paragraph. The Securities shall be registered in such name or
names and in such authorized denominations as the Placement Agent may request in
writing two (2) full Business Days prior to the Closing Date. The Company shall
not be obligated to sell or deliver the Securities except upon tender of payment
by the Placement Agent for all of the Securities sold or via delivery via
payment for all of the Securities sold. The term "Business Day" means any day
other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions are authorized or obligated by law to close in New York, New York.
Each Closing shall occur at such place as shall be agreed upon by the Placement
Agent and the Company. In the absence of an agreement to the contrary, each
Closing shall take place at the offices of Schiff Hardin LLP, 901 K Street, NW,
Suite 700, Washington, DC 20001. Subject to the terms and conditions hereof, at
each Closing payment of the purchase price for the Securities sold on such
2
Closing Date (net of any commissions or reimbursements payable by the Company
pursuant to this Agreement) shall be made by Federal Funds wire transfer,
against delivery of such Securities, and such Securities shall be registered in
such name or names and shall be in such denominations, as the Placement Agent
may request at least one Business Day before the time of purchase. Deliveries of
the documents with respect to the purchase of the Securities, if any, shall be
made at the offices of Schiff Hardin, LLP, 901 K Street, NW, Suite 700,
Washington, DC 20001 on each Closing Date. On each Closing Date, the Common
Stock and Warrants to which the Closing relates shall be delivered via The
Depository Trust Company Deposit or Withdrawal at Custodian (DWAC) system for
the accounts of the Placement Agent or through such other means as the parties
may hereafter agree. All actions taken at a Closing shall be deemed to have
occurred simultaneously.
5. Term and Termination of Agreement.
The term of this Agreement will commence upon the execution of this Agreement
and will terminate at the earlier of the final Closing of the Offering or 11:59
p.m. (New York Time) on October 30, 2015. Notwithstanding anything to the
contrary contained herein, any provision in this Agreement concerning or
relating to confidentiality, indemnification, contribution, advancement, the
Company's representations and warranties and the Company's obligations to pay
fees and reimburse expenses will survive any expiration or termination of this
Agreement. If any condition specified in Section 8 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Placement
Agent by notice to the Company at any time on or prior to a Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that those portions of this Agreement specified in Section 19
shall at all times be effective and shall survive such termination.
Notwithstanding anything to the contrary in this Agreement, in the event that
this Agreement shall not be carried out for any reason whatsoever, within the
time specified herein or any extensions thereof pursuant to the terms herein,
the Company shall be obligated to pay to the Placement Agent its actual and
accountable out-of-pocket expenses related to the transactions contemplated
herein then due and payable and upon demand the Company shall pay the full
amount thereof to the Placement Agent.
6. Permitted Acts.
Nothing in this Agreement shall be construed to limit the ability of the
Placement Agent, its officers, directors, employees, agents, associated persons
and any individual or entity "controlling," controlled by," or "under common
control" with the Placement Agent (as those terms are defined in Rule 405 under
the Securities Act) to conduct its business including without limitation the
ability to pursue, investigate, analyze, invest in, or engage in investment
banking, financial advisory or any other business relationship with any
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.
7. Representations, Warranties and Covenants of the Company.
As of the date and time of the execution of this Agreement, each Closing Date
and the Initial Sale Time, and any representation made by the Company to the
Placement Agent regardless of whether such representation was made prior to the
execution of this Agreement, the Company represents, warrants and covenants to
the Placement Agent that:
A.
i. The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No.
333-196243) including a related prospectus, for the registration
of certain securities (the "Shelf Securities"), including the
Securities, under the Securities Act, and the rules and
regulations thereunder (the "Securities Act Regulations"). The
registration statement has been declared effective under the
Securities Act by the Commission. The registration statement, as
of any time, means such registration statement as amended by any
post-effective amendments thereto to such time, including the
exhibits and any schedules thereto at such time, the documents
incorporated or deemed to be incorporated by reference therein at
such time pursuant to Item 12 of Form S-3 under the Securities
Act and the documents otherwise deemed to be a part thereof as of
such time pursuant to Rule 430B under the Securities Act
3
Regulations ("Rule 430B"), is referred to herein as the
"Registration Statement;" provided, however, that the
"Registration Statement" without reference to a time means such
registration statement as amended by any post-effective
amendments thereto as of the time of the first contract of sale
for the Securities, which time shall be considered the "new
effective date" of such registration statement with respect to
the Securities within the meaning of paragraph (f)(2) of Rule
430B, including the exhibits and schedules thereto as of such
time, the documents incorporated or deemed incorporated by
reference therein at such time pursuant to Item 12 of Form S-3
under the Securities Act and the documents otherwise deemed to be
a part thereof as of such time pursuant to the Rule 430B. Any
registration statement filed pursuant to Rule 462(b) of the
Securities Act Regulations is hereinafter called the "Rule 462(b)
Registration Statement," and after such filing the term
"Registration Statement" shall include the 462(b) Registration
Statement. The prospectus covering the Shelf Securities, dated
July 8, 2014, in the form first used to confirm sales of the
Securities (or in the form first made available to the Placement
Agent by the Company to meet requests of purchasers pursuant to
Rule 173 under the Securities Act) is hereinafter referred to as
the "Base Prospectus." The Base Prospectus, as supplemented by
the prospectus supplement specifically related to the Securities
in the form first used to confirm sales of the Securities (or in
the form first made available to the Placement Agent by the
Company to meet requests of purchasers pursuant to Rule 173 under
the Securities Act), is hereinafter referred to, collectively, as
the "Prospectus," and the term "Preliminary Prospectus" means any
preliminary form of the Prospectus, including any preliminary
prospectus supplement specifically related to the Securities,
filed with the Commission by the Company with the consent of the
Placement Agent.
ii. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included"
or "stated" (or other references of like import) in the
Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to include all such financial
statements and schedules and other information incorporated or
deemed incorporated by reference in the Registration Statement,
such Preliminary Prospectus or the Prospectus, as the case may
be, prior to the execution and delivery of this Agreement; and
all references in this Agreement to amendments or supplements to
the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to include the filing of any document
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations thereunder (the
"Exchange Act Regulations"), incorporated or deemed to be
incorporated by reference in the Registration Statement, such
Preliminary Prospectus or the Prospectus, as the case may be, at
or after the execution and delivery of this Agreement.
iii. The term "Disclosure Package" means (i) the Preliminary
Prospectus, as most recently amended or supplemented immediately
prior to the Initial Sale Time (as defined herein), (ii) the
Issuer Free Writing Prospectuses (as defined below), if any,
identified in Schedule I hereto, and (iii) any other Free Writing
Prospectus (as defined below) that the parties hereto shall
hereafter expressly agree to treat as part of the Disclosure
Package.
iv. The term "Issuer Free Writing Prospectus" means any issuer free
writing prospectus, as defined in Rule 433 of the Securities Act
Regulations. The term "Free Writing Prospectus" means any free
writing prospectus, as defined in Rule 405 of the Securities Act
Regulations.
B. Neither the Commission nor, to the Company's knowledge, any state
regulatory authority has issued any order preventing or suspending the use
of the Registration Statement, any Preliminary Prospectus or the Prospectus
or has instituted or, to the Company's knowledge, threatened to institute,
any proceedings with respect to such an order. The Company has complied
with each request (if any) from the Commission for additional information.
4
C. The Company has the authorized capitalization as set forth in both the
Prospectus and the Disclosure Package; the outstanding shares of capital
stock of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable. All of the outstanding shares of capital
stock, partnership interests and membership interests, as the case may be,
of the subsidiaries of the Company (each a "Subsidiary," collectively, the
"Subsidiaries") have been duly authorized and are validly issued, fully
paid and non-assessable securities thereof and, except as disclosed in the
both the Prospectus and the Disclosure Package, all of the outstanding
shares of capital stock, partnership interests or membership interests, as
the case may be, of the Subsidiaries are directly or indirectly owned of
record and beneficially by the Company; except as disclosed in both the
Prospectus and the Disclosure Package, there are no outstanding (i)
securities or obligations of the Company or any of the Subsidiaries
convertible into or exchangeable for any capital stock of the Company or
any such Subsidiary, (ii) warrants, rights or options to subscribe for or
purchase from the Company or any such Subsidiary any such capital stock or
any such convertible or exchangeable securities or obligations, or (iii)
obligations of the Company or any such Subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
D. Each of the Company and the Subsidiaries (all of which are set forth in
the Disclosure Package) has been duly incorporated, formed or organized,
and is validly existing as a corporation, general or limited partnership or
limited liability company, in good standing under the laws of its
respective jurisdiction of incorporation, formation or organization, with
full power and authority to own its respective properties and to conduct
its respective businesses as described in each of the Registration
Statement, the Prospectus and the Disclosure Package, and, in the case of
the Company, to execute and deliver this Agreement and to consummate the
transactions contemplated herein.
E. The Company and all of the Subsidiaries are duly qualified or licensed
and are in good standing in each jurisdiction in which they conduct their
respective businesses or in which they own or lease real property or
otherwise maintain an office and in which the failure, individually or in
the aggregate, to be so qualified or licensed could have a material adverse
effect on the assets, business, operations, earnings, prospects, properties
or condition (financial or otherwise), present or prospective, of the
Company and the Subsidiaries taken as a whole, (any such effect or change,
where the context so requires, is hereinafter called a "Material Adverse
Effect" or "Material Adverse Change"); except as disclosed in both the
Prospectus and the Disclosure Package, no Subsidiary is prohibited or
restricted, directly or indirectly, from paying dividends to the Company,
or from making any other distribution with respect to such Subsidiary's
capital stock or from repaying to the Company or any other Subsidiary any
amounts which may from time to time become due under any loans or advances
to such Subsidiary from the Company or such other Subsidiary, or from
transferring any such Subsidiary's property or assets to the Company or to
any other Subsidiary; other than as disclosed in both the Prospectus and
the Disclosure Package, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or
any ownership interest in any partnership, joint venture or other
association.
F. The Company and the Subsidiaries are in compliance in all material
respects with all applicable laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates.
G. Neither the Company nor any Subsidiary is in breach of or in default
under (nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), (i) its respective
charter, bylaws, agreement of limited partnership, operating agreement or
other similar organizational documents (the "organizational documents"),
(ii) the performance or observance of any obligation, agreement, covenant
or condition contained in any license, indenture, mortgage, deed of trust,
loan or credit agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their
respective properties is bound, or (iii) any federal, state, local or
foreign law, regulation or rule, or any decree, judgment, permit or order
(each, a "Law") applicable to the Company, except, in the case of clauses
(ii) and (iii) above, for such breaches or defaults which could not,
individually or in the aggregate, have a Material Adverse Effect.
5
H. The execution, delivery and performance of this Agreement, and
consummation of the transactions contemplated herein will not (i) conflict
with, or result in any breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would
constitute a breach of, or default under), (A) any provision of the
organizational documents of the Company or any Subsidiary, or (B) any
provision of any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule, or any decree, judgment or order
applicable to the Company or any Subsidiary, except, in the case of clause
(B) above, for such breaches or defaults which could not, individually or
in the aggregate, have a Material Adverse Effect; or (ii) result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or any Subsidiary.
I. This Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general equitable principles,
and except to the extent that the indemnification and contribution
provisions of Section 9 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof.
J. No approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
Company's execution, delivery and performance of this Agreement, its
consummation of the transactions contemplated herein, and its sale and
delivery of the Securities, other than (i) such as have been obtained, or
will have been obtained at the Closing Date under the Securities Act and
the Exchange Act, (ii) such approvals as have been obtained in connection
with the approval of the quotation of the Shares and Warrant Shares on the
NYSE MKT and (iii) any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Securities are being
offered by the Placement Agent.
K. Each of the Company and the Subsidiaries has all necessary licenses,
authorizations, clearances, registrations, exemptions, consents and
approvals ("Permits") and has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and has obtained
all necessary Permits from other persons, required in order to conduct
their respective businesses as described in both the Prospectus and the
Disclosure Package, except to the extent that any failure to have any such
Permits, to make any such filings or to obtain any such authorizations,
consents or approvals could not, individually or in the aggregate, have a
Material Adverse Effect; except as described in both the Prospectus and the
Disclosure Package, neither the Company nor any of the Subsidiaries is
required by any applicable law to obtain accreditation or certification
from any governmental agency or authority in order to provide the products
and services which it currently provides or which it proposes to provide as
set forth in both the Prospectus and the Disclosure Package; neither the
Company nor any of the Subsidiaries is in violation of, in default under,
or has received any notice regarding a possible violation, default or
revocation of any such Permit or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries the effect of which could result in a
Material Adverse Change; and no such Permit contains a materially
burdensome restriction that is not adequately disclosed in both the
Prospectus and the Disclosure Package.
L. Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the Securities Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated or threatened by the Commission; and the Company has complied
with any request on the part of the Commission for additional information.
M. Any Preliminary Prospectus when filed with the Commission, and the
Registration Statement as of each effective date and as of the date hereof,
complied or will comply, and the Prospectus and any further amendments or
supplements to the Registration Statement, any Preliminary Prospectus or
6
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, comply, in all material respects, with the
requirements of the Securities Act and the Securities Act Regulations; and
the documents incorporated by reference in the Registration Statement, any
Preliminary Prospectus or the Prospectus complied, and any further
documents so incorporated will comply, when filed with the Commission, in
all material respects to the requirements of the Exchange Act and Exchange
Act Regulations.
N. The Registration Statement, as of its effective date and as of the date
hereof, did not, does not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Preliminary Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date, the date
hereof and on the Closing Date contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in or omitted from
the Registration Statement, the Preliminary Prospectus or the Prospectus in
reliance upon and in conformity with the information concerning the
Placement Agent and furnished in writing by the Placement Agent to the
Company expressly for use therein; and the documents incorporated by
reference in the Registration Statement, any Preliminary Prospectus or the
Prospectus did not, and any further documents filed and incorporated by
reference therein will not, as of the applicable filing date, contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
O. As of 4:30 p.m. (Eastern time) on the date of this Agreement (the
"Initial Sale Time"), the Disclosure Package did not, and at the time of
each sale of Securities on the Closing Date, the Disclosure Package will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; as
of its issue date or date of first use and at all subsequent times through
the Initial Sale Time, each Issuer Free Writing Prospectus, if any, did
not, and at the time of each sale of Securities and as of the Closing Date,
each such Issuer Free Writing Prospectus will not, contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no warranty or representation with respect to any statement
contained in or omitted from the Disclosure Package in reliance upon and in
conformity with the information concerning the Placement Agent and
furnished in writing through the Placement Agent to the Company expressly
for use therein.
P. Each Issuer Free Writing Prospectus, if any, as of its issue date and at
all subsequent times through the completion of the public offer and sale of
the Securities did not, does not, and will not include any information that
conflicted, conflicts or will conflict with the information contained in
the Registration Statement, including any document incorporated by
reference therein that has not been superceded or modified.
Q. The Company is not an "ineligible issuer" in connection with the
offering pursuant to Rules 164, 405 and 433 under the Securities Act and is
eligible to use Free Writing Prospectuses in connection with this offering
pursuant to Rules 164 and 433 under the Securities Act; any Free Writing
Prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act Regulations has been, or will be, filed with the
Commission in accordance with the requirements of the Securities Act and
the Securities Act Regulations; and each Free Writing Prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d) under
the Securities Act Regulations or that was prepared by or on behalf of or
used by the Company complies or will comply in all material respects with
the requirements of the Securities Act and the Securities Act Regulations.
R. Except for the Issuer Free Writing Prospectuses identified in Schedule I
hereto, and any electronic road show relating to the public offering of
7
Securities contemplated herein, the Company has not prepared, used or
referred to, and will not, without the prior consent of the Placement
Agent, prepare, use or refer to, any Free Writing Prospectus.
S. Any Preliminary Prospectus, the Prospectus and any Issuer Free Writing
Prospectus (to the extent any such Issuer Free Writing Prospectus was
required to be filed with the Commission) delivered to the Placement Agent
for use in connection with the public offering of the Securities
contemplated herein have been and will be identical to the versions of such
documents transmitted to the Commission for filing via the Electronic Data
Gathering Analysis and Retrieval System ("EDGAR"), except to the extent
permitted by Regulation S-T.
T. Except as otherwise disclosed in both the Prospectus and the Disclosure
Package, there are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary or any of their respective officers
and directors or to which the properties, assets or rights of any such
entity are subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority, arbitral panel or agency, which could result in a judgment,
decree, award or order having a Material Adverse Effect.
U. The financial statements, including the notes thereto, included in (or
incorporated by reference into) each of the Registration Statement, the
Prospectus and the Disclosure Package present fairly the consolidated
financial position of the entities to which such financial statements
relate (the "Covered Entities") as of the dates indicated and the
consolidated results of operations and changes in financial position and
cash flows of the Covered Entities for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles as applied in the United States and on a
consistent basis during the periods involved and in accordance with
Regulation S-X promulgated by the Commission; the financial statement
schedules included in (or incorporated by reference into) the Registration
Statement fairly present the information shown therein and have been
compiled on a basis consistent with the financial statements included in
each of the Registration Statement, the Prospectus and the Disclosure
Package; no other financial statements or supporting schedules are required
to be included in (or incorporated by reference into) the Registration
Statement, the Prospectus or the Disclosure Package; and no pro forma
financial information is required to be included in (or incorporated by
reference into) the Registration Statement, the Prospectus or the
Disclosure Package.
V. BDO USA, LLP, whose reports on the consolidated financial statements of
the Company and the Subsidiaries are filed with the Commission as part of
each of the Registration Statement, the Prospectus and the Disclosure
Package, or are incorporated by reference therein, and any other accounting
firm that has certified Company financial statements and delivered its
reports with respect thereto, are, and were during the periods covered by
their reports, independent public accountants as required by the Securities
Act and the Securities Act Regulations, and are registered with the Public
Company Accounting Oversight Board.
W. Subsequent to the respective dates as of which information is given in
each of the Registration Statement, the Prospectus and the Disclosure
Package, and except as may be otherwise stated in such documents, there has
not been (i) any Material Adverse Change or any development that could
reasonably be expected to result in a Material Adverse Change, whether or
not arising in the ordinary course of business, (ii) any transaction that
is material to the Company and the Subsidiaries taken as a whole,
contemplated or entered into by the Company or any of the Subsidiaries,
(iii) any obligation, contingent or otherwise, directly or indirectly
incurred by the Company or any Subsidiary that is material to the Company
and Subsidiaries taken as a whole or (iv) any dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
X. Each of the Securities conform in all material respects to the
description thereof contained in the Registration Statement, the Prospectus
8
and the Disclosure Package; this Agreement conforms in all material
respects to the description thereof contained in the Registration
Statement, the Disclosure Package and the Prospectus.
Y. Except as disclosed in both the Prospectus and the Disclosure Package,
there are no persons with registration or other similar rights to have any
equity or debt securities, including securities which are convertible into
or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act, except for those registration or similar rights which have
been waived with respect to the offering contemplated by this Agreement,
all of which registration or similar rights are fairly summarized in both
the Prospectus and the Disclosure Package.
Z. The Shares and the Warrant Shares have been duly authorized and, when
issued and duly delivered against payment therefor as contemplated by this
Agreement and/or the Warrants, will be validly issued, fully paid and
non-assessable, free and clear of any pledge, lien, encumbrance, security
interest or other claim, and the issuance and sale of the Shares and
Warrant Shares by the Company is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of
the Company or under any agreement to which the Company or any Subsidiary
is a party or otherwise. The Warrants are duly authorized and, when issued
and paid for in accordance with this Agreement, will be duly and validly
issued, fully paid and free and clear of all liens. The Company has
reserved from its duly authorized capital stock the maximum number of
shares of Common Stock issuable pursuant to the Warrants.
AA. Shares of the Company's Common Stock trade on the NYSE MKT under the
symbol "CVM"; the Company has taken all necessary actions to ensure that it
is now, and will be at all times, in compliance with all applicable
corporate governance requirements set forth in the NYSE MKT's listing
standards currently in effect, and is taking such steps as are necessary to
ensure that it will be in compliance, upon the effectiveness of such
requirements, with other applicable corporate governance requirements set
forth in the NYSE MKT's listing standards that are not currently in effect.
BB. None of the Company, the Subsidiaries, or any of their respective
directors, officers, representatives or affiliates has taken, nor will
take, directly or indirectly, any action that is designed to, or which has
constituted, or which might reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
CC. Neither the Company nor any of the Subsidiaries, nor any of their
respective affiliates, officers, directors or any beneficial owner of 5% or
more of the Company's securities, (i) is required to register as a "broker"
or "dealer" in accordance with the provisions of the Exchange Act or the
Exchange Act Regulations, or (ii) has any direct or indirect affiliation or
association with any member firm of the Financial Industry Regulatory
Authority ("FINRA") (as determined in accordance with the rules and
regulations of FINRA).
DD. Any certificate signed by any officer of the Company or any Subsidiary
delivered to the Placement Agent or to counsel for the Placement Agent
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to the Placement Agent as to the
matters covered thereby.
EE. The form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the organizational documents of the Company and
the requirements of the NYSE MKT.
FF. Each of the Company and the Subsidiaries has good and marketable title
in fee simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except
such as are disclosed in (or incorporated by reference into) both the
Prospectus and the Disclosure Package or such as do not materially and
9
adversely affect the value of such property and do not interfere with the
use made or proposed to be made of such property by the Company and the
Subsidiaries; and any real property and buildings held under lease by the
Company or any Subsidiary are held under valid, existing and enforceable
leases, with such exceptions as are disclosed in both the Prospectus and
the Disclosure Package or are not material and do not interfere with the
use made or proposed to be made of such property and buildings by the
Company or such Subsidiary.
GG. The agreements and documents described in the Registration Statement,
the Prospectus, the Disclosure Package or the documents incorporated or
deemed to be incorporated by reference therein conform to the descriptions
thereof contained therein and there are no agreements or other documents
required by the Securities Act or the Exchange Act and the applicable rules
and regulations of the Commission thereunder to be described in the
Registration Statement, the Prospectus, the Disclosure Package or the
documents incorporated or deemed to be incorporated by reference therein or
to be filed with the Commission as exhibits to the Registration Statement
that have not been so described or filed. Each agreement or other
instrument (however characterized or described) to which the Company is a
party or by which it is or may be bound or affected and (i) that is
referred to in the Registration Statement, the Prospectus, the Disclosure
Package or the documents incorporated or deemed to be incorporated by
reference therein, or (ii) is material to the Company's business, has been
duly authorized and validly executed by the Company, is in full force and
effect in all material respects and is enforceable against the Company and,
to the Company's knowledge, the other parties thereto, in accordance with
its terms, except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (B) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and
(C) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefore may be
brought. None of such agreements or instruments has been assigned by the
Company, and neither the Company nor, to the best of the Company's
knowledge, any other party is in default thereunder and, to the best of the
Company's knowledge, no event has occurred that, with the lapse of time or
the giving of notice, or both, would constitute a default thereunder. To
the best of the Company's knowledge, performance by the Company of the
material provisions of such agreements or instruments will not result in a
violation of any existing applicable law, rule, regulation, judgment, order
or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses,
including, without limitation, those relating to environmental laws and
regulations.
HH. Based on the consolidated financial condition of the Company as of the
Closing Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Units hereunder, (i) the fair saleable value
of the Company's assets exceeds the amount that will be required to be paid
on or in respect of the Company's existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company's
assets do not constitute unreasonably small capital to carry on its
business as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of
the business conducted by the Company, consolidated and projected capital
requirements and capital availability thereof, and (iii) the current cash
flow of the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or
in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to
be payable on or in respect of its debt). The Company has no knowledge of
any facts or circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or reorganization laws
of any jurisdiction within one year from the Closing Date. The documents
incorporated or deemed to be incorporated by reference in the Registration
Statement, the Prospectus and the Disclosure Package set forth as of the
date of such reports all outstanding secured and unsecured Indebtedness of
the Company or any Subsidiary, or for which the Company or any Subsidiary
has commitments.
II. The descriptions in each of the Registration Statement, the Prospectus
and the Disclosure Package of the legal or governmental proceedings,
contracts, leases and other legal documents therein described, fairly and
accurately present the information required to be disclosed, and there are
10
no legal or governmental proceedings, contracts, leases, or other documents
of a character required to be disclosed in the Registration Statement, the
Prospectus or the Disclosure Package, or to be filed as exhibits to the
Registration Statement, which are not described or filed as required; all
agreements between the Company or any of the Subsidiaries and third parties
expressly referenced in both the Prospectus and the Disclosure Package are
legal, valid and binding obligations of the Company or one or more of the
Subsidiaries, enforceable in accordance with their respective terms, except
to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and by general equitable principles.
JJ. No forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) included or
incorporated by reference in the Registration Statement, the Prospectus or
the Disclosure Package has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith. The statistical and
market related data included or incorporated by reference in the
Registration Statement, the Prospectus or the Disclosure Package are based
on or derived from sources that the Company believes to be reliable and
accurate, and such data agree with the sources from which they are derived.
KK. As to each product subject to the jurisdiction of the U.S. Food and
Drug Administration ("FDA") under the Federal Food, Drug and Cosmetic Act,
as amended, and the regulations thereunder ("FDCA") that is manufactured,
packaged, labeled, tested, distributed, sold, and/or marketed by the
Company or any of its Subsidiaries (each such product, a "Pharmaceutical
Product"), such Pharmaceutical Product is being manufactured, packaged,
labeled, tested, distributed, sold and/or marketed by the Company in
compliance with all applicable requirements under FDCA and similar laws,
rules and regulations relating to registration, investigational use,
premarket clearance, licensure, or application approval, good manufacturing
practices, good laboratory practices, good clinical practices, product
listing, quotas, labeling, advertising, record keeping and filing of
reports. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or
investigation) against the Company or any of its Subsidiaries, and none of
the Company or any of its Subsidiaries has received any notice, warning
letter or other communication from the FDA or any other governmental
entity, which (i) contests the premarket clearance, licensure,
registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling
and promotion of any Pharmaceutical Product, (ii) withdraws its approval
of, requests the recall, suspension, or seizure of, or withdraws or orders
the withdrawal of advertising or sales promotional materials relating to,
any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins
production at any facility of the Company or any of its Subsidiaries, (v)
enters or proposes to enter into a consent decree of permanent injunction
with the Company or any of its Subsidiaries, or (vi) otherwise alleges any
violation of any laws, rules or regulations by the Company or any of its
Subsidiaries. The properties, business and operations of the Company have
been and are being conducted in all material respects in accordance with
all applicable laws, rules and regulations of the FDA. The Company has not
been informed by the FDA that the FDA will prohibit the marketing, sale,
license or use in the United States of any product proposed to be
developed, produced or marketed by the Company nor has the FDA expressed
any concern as to approving or clearing for marketing any product being
developed or proposed to be developed by the Company.
LL. All preclinical and clinical studies conducted by or on behalf of the
Company or the Subsidiaries, or in which the Company or its products or
product candidates have participated were and, if still ongoing, are being
conducted in all material respects in compliance with all laws and
regulations applicable thereto in the jurisdictions in which they are being
conducted and with all laws and regulations applicable to preclinical and
clinical studies from which data will be submitted to support marketing
approval, including, without limitation, 21 C.F.R. Part 50, 54, 56, 58, and
312. The descriptions in the Registration Statement, the Prospectus and the
Disclosure Package of the results of such studies are accurate and complete
in all material respects and fairly present the data derived from such
studies, and the Company has no knowledge of any other studies the results
of which are inconsistent with or otherwise call into question the results
described or referred to in the Registration Statement, the Prospectus and
the Disclosure Package or the results of which are referred to in the
Registration Statement, the Prospectus and the Disclosure Package. Except
11
as disclosed in the Registration Statement, the Prospectus and the
Disclosure Package, the Company has not received any written notices or
statements from the FDA, the European Medicines Agency ("EMEA") or any
other governmental agency or authority imposing, requiring, requesting or
suggesting a clinical hold, termination, suspension or material
modification for or of any proposed, ongoing, or completed clinical or
preclinical studies conducted or proposed to be conducted by or on behalf
of the Company or its Subsidiaries.
MM. The Company and its Subsidiaries are, and at all times have been, in
compliance in all material respects with all applicable Health Care Laws
(as defined below), and have not engaged in activities which are, as
applicable, cause for false claims liability, civil penalties, or mandatory
or permissive exclusion from Medicare, Medicaid, or any other state health
care program or federal health care program. For purposes of this
Agreement, "Health Care Laws" means: (i) the FDCA, the Public Health
Service Act and the regulations promulgated thereunder; (ii) all applicable
federal, state, local and all applicable foreign health care related fraud
and abuse laws, including, without limitation, the U.S. Anti-Kickback
Statute (42 U.S.C. Section 1320a-7b(b)), the U.S. Physician Payment
Sunshine Act (42 U.S.C. ss. 1320a-7h), the U.S. Civil False Claims Act (31
U.S.C. Section 3729 et seq.), the criminal False Claims Law (42 U.S.C. ss.
1320a-7b(a)), all criminal laws relating to health care fraud and abuse,
including but not limited to 18 U.S.C. Sections 286 and 287, and the health
care fraud criminal provisions under the U.S. Health Insurance Portability
and Accountability Act of 1996 ("HIPAA") (42 U.S.C. Section 1320d et seq.),
the exclusion laws (42 U.S.C. ss. 1320a-7), the civil monetary penalties
law (42 U.S.C. ss. 1320a-7a), HIPAA, as amended by the Health Information
Technology for Economic and Clinical Health Act (42 U.S.C. Section 17921 et
seq.), and the regulations promulgated pursuant to such statutes; (iii)
Medicare (Title XVIII of the Social Security Act); (iv) Medicaid (Title XIX
of the Social Security Act); and (v) any and all other applicable health
care laws and regulations. None of the Company or any of its Subsidiaries
has received notice of any claim, action, suit, proceeding, hearing,
enforcement, audit, investigation, arbitration or other action from any
court or arbitrator or governmental or regulatory authority or third party
alleging that any product operation or activity is in material violation of
any Health Care Laws, and, to the Company's knowledge, no such claim,
action, suit, proceeding, hearing, enforcement, audit, investigation,
arbitration or other action is threatened. None of the Company or any of
its Subsidiaries is a party to or has any ongoing reporting obligations
pursuant to any corporate integrity agreements, deferred prosecution
agreements, monitoring agreements, consent decrees, settlement orders,
plans of correction or similar agreements with or imposed by any
governmental or regulatory authority. Additionally, neither the Company,
nor any of its respective employees, officers or directors has been
excluded, suspended or debarred from participation in any U.S. federal
health care program or human clinical research or, to the knowledge of the
Company, is subject to a governmental inquiry, investigation, proceeding,
or other similar action that could reasonably be expected to result in
debarment, suspension, or exclusion.
NN. The Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service
marks, trade names, trade secrets, inventions, know-how, copyrights,
licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective
businesses as described in the Registration Statement, the Prospectus and
the Disclosure Package, and which the failure to so have could have a
Material Adverse Effect (collectively, the "Intellectual Property Rights").
None of, and neither the Company nor any Subsidiary has received a notice
(written or otherwise) that any of, the Intellectual Property Rights has
expired, terminated or been abandoned, or is expected to expire or
terminate or be abandoned, within two (2) years from the date of this
Agreement. Neither the Company nor any Subsidiary has received, since the
date of the latest audited financial statements included within or
incorporated by reference into the Registration Statement, the Prospectus
and the Disclosure Package, a written notice of a claim or otherwise has
any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any person, and the Company is unaware of any facts that
could form a reasonable basis for any such action, suit, proceeding or
claim. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement or
misappropriation by another person of any of the Intellectual Property
Rights, and the Company is unaware of any facts that could form a
reasonable basis for any such action, suit, proceeding or claim. The
product candidates described in the Registration Statement, the Prospectus
and the Disclosure Package as under development by the Company fall within
the scope of the claims of one or more patents owned by the Company. To the
12
Company's knowledge, it has not infringed or misappropriated the
Intellectual Property Rights of any third parties, which infringement or
misappropriation would, if the subject of an unfavorable decision, ruling
or finding, have a Material Adverse Effect. The Company and its
Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of all of their Intellectual Property
Rights, except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
OO. The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the Exchange
Act), which (i) are designed to ensure that material information relating
to the Company, including its consolidated subsidiaries, is made known to
the Company's principal executive officer and its principal financial
officer by others within those entities, particularly during the periods in
which the periodic reports required under the Exchange Act are being
prepared, (ii) have been evaluated for effectiveness as of the end of the
last fiscal period covered by the Registration Statement, and (iii) are
effective in all material respects to perform the functions for which they
were established; and the Company is not aware of (A) any significant
deficiency or material weakness in the design or operation of its internal
controls over financial reporting, or (B) any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Company's internal control over financial
reporting. Since the most recent evaluation of the Company's disclosure
controls and procedures described above, there have been no significant
changes in internal control over financial reporting or in other factors
that could significantly affect internal control over financial reporting.
PP. The Company and each of the Subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; and (v) the interactive data in eXtensible Business Reporting
Language included or incorporated by reference in the Registration
Statement is accurate. The interactive data in eXtensbile Business
Reporting Language included or incorporated by reference in the
Registration Statement fairly presents the information called for in all
material respects and has been prepared in accordance with the Commission's
rules and guidelines applicable thereto.
QQ. Each of the Company and the Subsidiaries has filed on a timely basis
all necessary federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof and have paid all
taxes shown as due thereon; and no tax deficiency has been asserted against
any such entity, nor does any such entity know of any tax deficiency that
is likely to be asserted against any such entity that, if determined
adversely to any such entity, could have a Material Adverse Effect; all tax
liabilities are adequately provided for on the respective books of such
entities.
RR. Each of the Company and the Subsidiaries maintains insurance (issued by
insurers of recognized financial responsibility) of the types and in the
amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in
similar businesses, including, but not limited to, insurance covering real
and personal property owned or leased by the Company and the Subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect.
SS. Neither the Company nor any of the Subsidiaries is in violation of, or
has received notice of any violation with respect to, any applicable
environmental, safety or similar law applicable to the business of the
Company or any of the Subsidiaries; the Company and the Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable federal and state occupational safety and health and
environmental laws and regulations to conduct their respective businesses,
and the Company and the Subsidiaries are in compliance with all terms and
13
conditions of any such permit, license or approval, except any such
violation of law or regulation, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals which could not,
individually or in the aggregate, result in a Material Adverse Change.
TT. Neither the Company nor any Subsidiary is in violation of or has
received notice of any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of employees,
nor any applicable federal or state wages and hours law, the violation of
any of which could have a Material Adverse Effect.
UU. The Company and each of the Subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or any of the
Subsidiaries would have any liability; the Company and each of the
Subsidiaries have not incurred and do not expect to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) Section 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published
interpretations thereunder ("Code"); and each "pension plan" for which the
Company and each of its Subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
VV. Except as otherwise disclosed in both the Prospectus and the Disclosure
Package, there are no outstanding loans, extensions of credit or advances
or guarantees of indebtedness by the Company or any of the Subsidiaries to
or for the benefit of any of the officers or directors of the Company or
any of the Subsidiaries or any of the members of the families of any of
them.
WW. Neither the Company nor any of the Subsidiaries nor, to the knowledge
of the Company, any employee or agent of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or of any
Subsidiary or received or retained any funds in violation of any law, rule
or regulation, or of a character required to be disclosed in the Prospectus
or the Disclosure Package.
XX. All securities issued by the Company, any of the Subsidiaries or any
trusts established by the Company or any Subsidiary, have been or will be
issued and sold in compliance with (i) all applicable federal and state
securities laws, (ii) the laws of the applicable jurisdiction of
incorporation of the issuing entity and, (iii) to the extent applicable to
the issuing entity, the requirements of the NYSE MKT.
YY. The Company and its Subsidiaries are, and at all times prior were, (i)
in compliance with any and all applicable federal, state, local and foreign
laws, regulations, ordinances, rules, orders, judgments, decrees, permits
or other legal requirements relating to the protection of human health and
safety, the environment, natural resources, petroleum or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"),
which compliance includes obtaining, maintaining and complying with all
permits and authorizations and approvals required by Environmental Laws to
conduct their respective businesses and (ii) have not received notice of
nor do they otherwise have knowledge of any actual or potential liability
for the investigation or remediation of any disposal or release of
petroleum, hazardous or toxic substances or wastes, pollutants or
contaminants, except in the case of clause (i) or (ii) where such
non-compliance with or liability under Environmental Laws could not,
individually or in the aggregate, have a Material Adverse Effect; and
neither the Company nor any of its Subsidiaries has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or any other
similar Environmental Law, except with respect to any matters that could
not, individually or in the aggregate, have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries (A) is a party to any
proceeding under Environmental Laws to which a governmental authority is
also a party, other than such proceedings regarding which it is believed no
monetary penalties of $100,000 or more will be imposed, or (B) anticipates
making material capital expenditures relating to Environmental Laws.
14
ZZ. In connection with this offering, the Company has not offered and will
not offer its Common Stock or any other securities convertible into, or
exchangeable or exercisable for, Common Stock in a manner that violates the
Securities Act; and the Company has not distributed and will not distribute
any offering materials in connection with the offer and sale of the Shares
except for any Preliminary Prospectus, the Prospectus, any Issuer Free
Writing Prospectus or the Registration Statement.
AAA. The Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated.
BBB. No relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, that is required by the Securities Act or
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, as the case may be, to be described in the Registration
Statement, the Prospectus, the Disclosure Package or the document
incorporated or deemed to be incorporated by reference therein, which is
not so described.
CCC. Neither the Company nor any of the Subsidiaries is or, after giving
effect to the offering and sale of the Shares, will be, an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
DDD. There are no existing or, to the knowledge of the Company, threatened
labor disputes with the employees of the Company or any of the Subsidiaries
that could have, individually or in the aggregate, a Material Adverse
Effect.
EEE. The Company, the Subsidiaries and any of the officers and directors of
the Company and the Subsidiaries, in their capacities as such, are, and on
the Closing Date will be, in compliance in all material respects with the
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated thereunder.
FFF. The Company (i) complies with the Privacy Statements (as defined
below) as applicable to any given set of personal information collected by
the Company from Individuals (as defined below), (ii) complies in all
material respects with all applicable federal, state, local and foreign
laws and regulations regarding the collection, retention, use, transfer or
disclosure of personal information and (iii) takes reasonable measures to
protect and maintain the confidential nature of the personal information
provided to the Company by Individuals in accordance with the terms of the
applicable Privacy Statements; to the Company's knowledge, no claims or
controversies have arisen regarding the Privacy Statements or the
implementation thereof. As used herein, "Privacy Statements" means,
collectively, any and all of the Company's privacy statements and policies
published on Company websites or product candidates or otherwise made
available by the Company regarding the collection, retention, use and
distribution of the personal information of individuals, including, without
limitation, from visitors or users of any Company websites or product
candidates ("Individuals").
GGG. Neither the Company nor any of the Subsidiaries, nor, to the knowledge
of the Company, any director, officer, agent, employee or affiliate of such
entities, is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder
(the "FCPA") , U.K. Bribery Act 2010, as amended, or any other applicable
anti-bribery statute or regulation, including, without limitation, making
use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property, gift, promise
to give, or authorization of the giving of anything of value to any
"foreign official" (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA, U.K. Bribery Act 2010, as amended, or
any other applicable anti-bribery statute or regulation, and the Company
and the Subsidiaries and, to the knowledge of the Company, their affiliates
15
have conducted their businesses in compliance with the FCPA, U.K. Bribery
Act 2010, as amended, or any other applicable anti-bribery statute or
regulation.
HHH. Neither the Company nor any of its Subsidiaries, nor, to the Company's
knowledge, any of its affiliates or any director, officer, agent or
employee of, or other person associated with or acting on behalf of, the
Company, has violated the Bank Secrecy Act, as amended, the Uniting and
Strengthening of America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001 or the rules
and regulations promulgated under any such law or any successor law.
III. The operations of the Company, its Subsidiaries and, to the Company's
knowledge, its affiliates, are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the Money Laundering Control Act of 1986, as amended, any
other money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws"), except for any such
non-compliance as would not, singly or in the aggregate, result in a
Material Adverse Change, and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries, or, to the Company's knowledge, any
of its affiliates, with respect to the Money Laundering Laws is pending or,
to the Company's knowledge, threatened.
JJJ. Each of the Company and its Subsidiaries, and, to the Company's
knowledge, each of their affiliates, and any director, officer, agent or
employee of, or other person associated with or acting on behalf of the
Company, has acted at all times in compliance with applicable Export and
Import Laws (as defined below) and there are no claims, complaints,
charges, investigations or proceedings pending or expected or, to the
knowledge of the Company, threatened between the Company or any of its
Subsidiaries and any governmental authority under any Export or Import
Laws. The term "Export and Import Laws" means the Arms Export Control Act,
the International Traffic in Arms Regulations, the Export Administration
Act of 1979, as amended, the Export Administration Regulations, and all
other laws and regulations of the United States government regulating the
provision of services to non-U.S. parties or the export and import of
articles or information from and to the United States of America, and all
similar laws and regulations of any foreign government regulating the
provision of services to parties not of the foreign country or the export
and import of articles and information from and to the foreign country to
parties not of the foreign country.
KKK. Neither the Company nor any of its Subsidiaries, nor, to the knowledge
of the Company, any director, officer, employee, agent, affiliate or other
person associated with or acting on behalf of the Company or any of its
Subsidiaries is currently the subject or the target of any sanctions
administered or enforced by the U.S. government (including, without
limitation, the Office of Foreign Assets Control of the U.S. Department of
the Treasury ("OFAC") or the U.S. Department of State and including,
without limitation, the designation as a "specially designated national" or
"blocked person"), the United Nations Security Council ("UNSC"), the
European Union, Her Majesty's Treasury ("HMT") or other relevant sanctions
authority (collectively, "Sanctions"), nor is the Company, nor any of its
Subsidiaries, located, organized or resident in a country or territory that
is the subject or target of Sanctions, including, without limitation, Cuba,
Iran, North Korea, Sudan and Syria (each, a "Sanctioned Country"); and the
Company will not directly or indirectly use the proceeds of the offering of
the Shares hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity
(i) to fund or facilitate any activities of or business with any person
that, at the time of such funding or facilitation, is the subject or target
of Sanctions, (ii) to fund or facilitate any activities of or business in
any Sanctioned Country or (iii) in any other manner that will result in a
violation by any person (including any person participating in the
transaction, whether as underwriter, advisor, investor or otherwise) of
Sanctions. For the past five years, the Company and its Subsidiaries have
not knowingly engaged in and are not now knowingly engaged in any dealings
or transactions with any person that at the time of the dealing or
transaction is or was the subject or the target of Sanctions or with any
Sanctioned Country.
16
LLL. Except as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, there are no claims, payments,
arrangements, agreements or understandings relating to the payment of a
finder's, consulting or origination fee by the Company or any of its
affiliates with respect to the sale of the Securities hereunder or any
other arrangements, agreements or understandings of the Company or, to the
Company's knowledge, any of its stockholders that may affect the Placement
Agent's compensation, as determined by FINRA.
8. Conditions of the Obligations of the Placement Agent.
The obligations of the Placement Agent hereunder shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 7 hereof, in each case as of the date hereof and as of each
Closing Date as though then made, to the timely performance by each of the
Company of its covenants and other obligations hereunder on and as of such
dates, and to each of the following additional conditions:
A. Regulatory Matters.
i. Effectiveness of Registration Statement; Rule 424 Information.
The Registration Statement is effective on the date of this
Agreement, and, on the Closing Date no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto has been issued under the Securities Act, no
order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus has been issued and no proceedings
for any of those purposes have been instituted or are pending or,
to the Company's knowledge, contemplated by the Commission. The
Company has complied with each request (if any) from the
Commission for additional information. All filings with the
Commission required by Rule 424 under the Securities Act to have
been filed by the Closing Date, shall have been made within the
applicable time period prescribed for such filing by Rule 424.
ii. FINRA Clearance. On or before the Closing Date of this Agreement,
the Placement Agent shall have received clearance from FINRA as
to the amount of compensation allowable or payable to the
Placement Agent as described in the Registration Statement.
B. Company Counsel Matters.
i. On the Closing Date, the Placement Agent shall have received the
favorable opinion of Hart & Hart, LLC, outside counsel for the
Company, dated the Closing Date and addressed to the Placement
Agent, substantially in form and substance reasonably
satisfactory to the Placement Agent.
ii. On the Closing Date, the Placement Agent shall have received the
favorable opinion of Polsinelli PC, special regulatory counsel
and from Hahn & Voight PLLC, intellectual property counsel for
the Company, dated the Closing Date and addressed to the
Placement Agent, substantially in form and substance reasonably
satisfactory to the Placement Agent.
C. Comfort Letters.
i. Comfort Letter. At the time this Agreement is executed, Placement
Agent shall have received from BDO USA LLP a cold comfort letter
containing statements and information of the type customarily
included in accountants' comfort letters with respect to the
financial statements and certain financial information contained
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, addressed to the Placement Agent and in form and
substance satisfactory in all respects to Placement Agent and to
BDO USA LLP, dated as of the date of this Agreement.
17
ii. Bring-down Comfort Letter. At the Closing Date, the Placement
Agent shall have received from BDO USA LLP a letter, dated as of
the Closing Date, to the effect that BDO USA LLP reaffirms the
statements made in the letter furnished pursuant to Section
8.C.i. except that the specified date referred to shall be a date
not more than three (3) business days prior to the Closing Date.
iii. In the event that the letters referred to above set forth any
changes in indebtedness, decreases in total assets or retained
earnings or increases in borrowings, it shall be a further
condition to the obligations of the Placement Agent that (i) such
letters shall be accompanied by a written explanation of the
Company as to the significance thereof, unless the Placement
Agent deems such explanation unnecessary, and (ii) such changes,
decreases or increases do not, in the sole judgment of the
Placement Agent, make it impractical or inadvisable to proceed
with the purchase and delivery of the Securities as contemplated
by the Registration Statement.
D. Officers' Certificates.
i. Officers' Certificate. The Company shall have furnished to the
Placement Agent a certificate, dated the Closing Date, of its
Chief Executive Officer, and its Chief Financial Officer stating
that (i) such officers have carefully examined the Registration
Statement, the Pricing Disclosure Package, any Issuer Free
Writing Prospectus and the Prospectus and, in their opinion, the
Registration Statement and each amendment thereto, as of the
Initial Sale Time and through the Closing Date did not include
any untrue statement of a material fact and did not omit to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Pricing
Disclosure Package, as of the Initial Sale Time through the
Closing Date, any Issuer Free Writing Prospectus as of its date
and as of the Closing Date, the Prospectus and each amendment or
supplement thereto, as of the respective date thereof and as of
the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading, (ii) since
the filing of the Form 10-Q for the quarter ended June 30, 2015,
no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement, the
Pricing Disclosure Package or the Prospectus, (iii) to their
knowledge after reasonable investigation, as of the Closing Date,
the representations and warranties of the Company in this
Agreement are true and correct and the Company has complied with
all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date,
and (iv) there has not been, subsequent to the date of the most
recent audited financial statements included in the Pricing
Disclosure Package, any Material Adverse Change in the financial
position or results of operations of the Company, or any change
or development that, singularly or in the aggregate, would
involve a Material Adverse Change or a prospective Material
Adverse Change, in or affecting the condition (financial or
otherwise), results of operations, business, assets or prospects
of the Company, except as set forth in the Prospectus.
ii. Secretary's Certificate. At the Closing Date the Placement Agent
shall have received a certificate of the Company signed by the
Secretary of the Company, dated the Closing Date, certifying: (i)
that each of the Company's certificate of incorporation and
bylaws is true and complete, has not been modified and is in full
force and effect; (ii) that the resolutions of the Company's
Board of Directors relating to the Offering are in full force and
effect and have not been modified; and (iii) the good standing of
the Company and its subsidiaries. The documents referred to in
such certificate shall be attached to such certificate.
E. No Material Changes. Prior to and on the Closing Date: (i) there shall
have been no Material Adverse Change or development involving a prospective
Material Adverse Change in the condition or prospects or the business
activities, financial or otherwise, of the Company from the latest dates as
18
of which such condition is set forth in the Registration Statement, the
Pricing Disclosure Package and the Prospectus; (ii) no action, suit or
proceeding, at law or in equity, shall have been pending or threatened
against the Company or any affiliates of the Company before or by any court
or federal or state commission, board or other administrative agency
wherein an unfavorable decision, ruling or finding may materially adversely
affect the business, operations, prospects or financial condition or income
of the Company, except as set forth in the Registration Statement, the
Pricing Disclosure Package and the Prospectus; (iii) no stop order shall
have been issued under the Securities Act and no proceedings therefor shall
have been initiated or threatened by the Commission; and (iv) the
Registration Statement, the Pricing Disclosure Package and the Prospectus
and any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance with the
Securities Act and the Securities Act Regulations and shall conform in all
material respects to the requirements of the Securities Act and the
Securities Act Regulations, and neither the Registration Statement, the
Pricing Disclosure Package nor the Prospectus nor any amendment or
supplement thereto shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
F. Additional Documents. At the Closing Date, Placement Agent Counsel shall
have been furnished with such documents and opinions as they may require in
order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Securities as herein contemplated shall be satisfactory in form and
substance to the Placement Agent and Placement Agent Counsel.
9. Indemnification and Contribution; Procedures.
A. Indemnification of the Placement Agent. The Company agrees to indemnify
and hold harmless the Placement Agent, its affiliates and each person
controlling such Placement Agent (within the meaning of Section 15 of the
Securities Act), and the directors, officers, agents and employees of the
Placement Agent, its affiliates and each such controlling person (the
Placement Agent, and each such entity or person hereafter is referred to as
an "Indemnified Person") from and against any losses, claims, damages,
judgments, assessments, costs and other liabilities (collectively, the
"Liabilities"), and shall reimburse each Indemnified Person for all fees
and expenses (including the reasonable fees and expenses of counsel for the
Indemnified Persons, except as otherwise expressly provided in this
Agreement) (collectively, the "Expenses") and agrees to advance payment of
such Expenses as they are incurred by an Indemnified Person in
investigating, preparing, pursuing or defending any actions, whether or not
any Indemnified Person is a party thereto, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained
in (i) the Registration Statement, the Pricing Disclosure Package, the
Preliminary Prospectus, the Prospectus or in any Issuer Free Writing
Prospectus (as from time to time each may be amended and supplemented);
(ii) any materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the Offering,
including any "road show" or investor presentations made to investors by
the Company (whether in person or electronically); or (iii) any application
or other document or written communication (in this Section 9, collectively
called "application") executed by the Company or based upon written
information furnished by the Company in any jurisdiction in order to
qualify the Securities under the securities laws thereof or filed with the
Commission, any state securities commission or agency, any national
securities exchange; or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, the Placement Agent's information.
The Company also agrees to reimburse each Indemnified Person for all
Expenses as they are incurred in connection with such Indemnified Person's
enforcement of his or its rights under this Agreement.
B. Procedure. Upon receipt by an Indemnified Person of actual notice of an
action against such Indemnified Person with respect to which indemnity may
reasonably be expected to be sought under this Agreement, such Indemnified
Person shall promptly notify the Company in writing; provided that failure
by any Indemnified Person so to notify the Company shall not relieve the
19
Company from any obligation or liability which the Company may have on
account of this Section 9 or otherwise to such Indemnified Person, except
to the extent (and only to the extent) that its ability to assume the
defense is actually impaired by such failure or delay. The Company shall,
if requested by the Placement Agent, assume the defense of any such action
(including the employment of counsel and reasonably satisfactory to the
Placement Agent). Any Indemnified Person shall have the right to employ
separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless: (i) the Company has failed promptly to assume
the defense and employ counsel for the benefit of the Placement Agent and
the other Indemnified Persons or (ii) such Indemnified Person shall have
been advised that in the opinion of counsel that there is an actual or
potential conflict of interest that prevents (or makes it imprudent for)
the counsel engaged by the Company for the purpose of representing the
Indemnified Person, to represent both such Indemnified Person and any other
person represented or proposed to be represented by such counsel, it being
understood, however, that the Company shall not be liable for the expenses
of more than one separate firm of attorneys for the Placement Agent and all
Indemnified persons in any one action or series of related actions in the
same jurisdiction. The Company shall not be liable for any settlement of
any action effected without its written consent (which shall not be
unreasonably withheld). In addition, the Company shall not, without the
prior written consent of the Placement Agent, settle, compromise or consent
to the entry of any judgment in or otherwise seek to terminate any pending
or threatened action in respect of which advancement, reimbursement,
indemnification or contribution may be sought hereunder (whether or not
such Indemnified Person is a party thereto) unless such settlement,
compromise, consent or termination (i) includes an unconditional release of
each Indemnified Person, acceptable to such Indemnified Party, from all
Liabilities arising out of such action for which indemnification or
contribution may be sought hereunder and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act, by or on
behalf of any Indemnified Person. The advancement, reimbursement,
indemnification and contribution obligations of the Company required hereby
shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as every Liability and Expense is incurred
and is due and payable, and in such amounts as fully satisfy each and every
Liability and Expense as it is incurred (and in no event later than 30 days
following the date of any invoice therefore).
C. Indemnification of the Company. The Placement Agent agrees to indemnify
and hold harmless the Company, its directors, its officers who signed the
Registration Statement and persons who control the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all Liabilities, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the Pricing
Disclosure Package or Prospectus or any amendment or supplement thereto, in
reliance upon, and in strict conformity with, the Placement Agent's
Information. In case any action shall be brought against the Company or any
other person so indemnified based on any Preliminary Prospectus, the
Registration Statement, the Pricing Disclosure Package or Prospectus or any
amendment or supplement thereto, and in respect of which indemnity may be
sought against the Placement Agent, the Placement Agent shall have the
rights and duties given to the Company, and the Company and each other
person so indemnified shall have the rights and duties given to the
Placement Agent by the provisions of Section 9.B. The Company agrees
promptly to notify the Placement Agent of the commencement of any
litigation or proceedings against the Company or any of its officers,
directors or any person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, in connection with the issuance and sale of the Securities or in
connection with the Registration Statement, the Pricing Disclosure Package,
the Prospectus or any Issuer Free Writing Prospectus.
D. Contribution. In the event that a court of competent jurisdiction makes
a finding that indemnity is unavailable to an Indemnified Person, the
Company shall contribute to the Liabilities and Expenses paid or payable by
such Indemnified Person in such proportion as is appropriate to reflect (i)
the relative benefits to the Company, on the one hand, and to the Placement
Agent and any other Indemnified Person, on the other hand, of the matters
20
contemplated by this Agreement or (ii) if the allocation provided by the
immediately preceding clause is not permitted by applicable law, not only
such relative benefits but also the relative fault of the Company, on the
one hand, and the Placement Agent and any other Indemnified Person, on the
other hand, in connection with the matters as to which such Liabilities or
Expenses relate, as well as any other relevant equitable considerations;
provided that in no event shall the Company contribute less than the amount
necessary to ensure that all Indemnified Persons, in the aggregate, are not
liable for any Liabilities and Expenses in excess of the amount of
commissions actually received by the Placement Agent pursuant to this
Agreement. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company on the one hand or the Placement
Agent on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Placement Agent agree that it would not be
just and equitable if contributions pursuant to this subsection (D) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this subsection (D). For purposes of this paragraph, the relative
benefits to the Company, on the one hand, and to the Placement Agent on the
other hand, of the matters contemplated by this Agreement shall be deemed
to be in the same proportion as: (a) the total value received by the
Company in the Offering, whether or not such Offering is consummated, bears
to (b) the commissions paid to the Placement Agent under this Agreement.
Notwithstanding the above, no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act shall be entitled
to contribution from a party who was not guilty of fraudulent
misrepresentation.
E. Limitation. The Company also agrees that no Indemnified Person shall
have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with advice or services
rendered or to be rendered by any Indemnified Person pursuant to this
Agreement, the transactions contemplated thereby or any Indemnified
Person's actions or inactions in connection with any such advice, services
or transactions, except to the extent that a court of competent
jurisdiction has made a finding that Liabilities (and related Expenses) of
the Company have resulted exclusively from such Indemnified Person's gross
negligence or willful misconduct in connection with any such advice,
actions, inactions or services.
F. Survival. The advancement, reimbursement, indemnity and contribution
obligations set forth in this Section 9 shall remain in full force and
effect regardless of any termination of, or the completion of any
Indemnified Person's services under or in connection with, this Agreement.
10. Limitation of Dawson's Liability to the Company.
Dawson and the Company further agree that neither Dawson nor any of its
affiliates or any of their respective officers, directors, controlling persons
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), employees or agents shall have any liability to the Company, its
security holders or creditors, or any person asserting claims on behalf of or in
the right of the Company (whether direct or indirect, in contract or tort, for
an act of negligence or otherwise) for any losses, fees, damages, liabilities,
costs, expenses or equitable relief arising out of or relating to this Agreement
or the Services rendered hereunder, except for losses, fees, damages,
liabilities, costs or expenses that arise out of or are based on any action of
or failure to act by Dawson and that are finally judicially determined to have
resulted solely from the gross negligence or willful misconduct of Dawson.
11. Limitation of Engagement to the Company.
The Company acknowledges that Dawson has been retained only by the Company, that
Dawson is providing services hereunder as an independent contractor (and not in
any fiduciary or agency capacity) and that the Company's engagement of Dawson is
not deemed to be on behalf of, and is not intended to confer rights upon, any
shareholder, owner or partner of the Company or any other person not a party
hereto as against Dawson or any of its affiliates, or any of its or their
respective officers, directors, controlling persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act), employees
or agents. Unless otherwise expressly agreed in writing by Dawson, no one other
than the Company is authorized to rely upon any statement or conduct of Dawson
in connection with this Agreement. The Company acknowledges that any
recommendation or advice, written or oral, given by Dawson to the Company in
21
connection with Dawson's engagement is intended solely for the benefit and use
of the Company's management and directors in considering a possible Offering,
and any such recommendation or advice is not on behalf of, and shall not confer
any rights or remedies upon, any other person or be used or relied upon for any
other purpose. Dawson shall not have the authority to make any commitment
binding on the Company. The Company, in its sole discretion, shall have the
right to reject any investor introduced to it by Dawson. The Company agrees that
it will perform and comply with the covenants and other obligations set forth in
the purchase agreement and related transaction documents between the Company and
the investors in the Offering, if any, and that Dawson will be entitled to rely
on the representations, warranties, agreements and covenants of the Company
contained in any such purchase agreement and related transaction documents as if
such representations, warranties, agreements and covenants were made directly to
Dawson by the Company.
12. Amendments and Waivers.
No supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. The failure of a party to
exercise any right or remedy shall not be deemed or constitute a waiver of such
right or remedy in the future. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (regardless of whether similar), nor shall any such waiver be deemed or
constitute a continuing waiver unless otherwise expressly provided.
13. Confidentiality.
In the event of the consummation or public announcement of any Offering, Dawson
shall have the right to disclose its participation in such Offering, including,
without limitation, the placement at its cost of "tombstone" advertisements in
financial and other newspapers and journals. Dawson agrees not to use any
confidential information concerning the Company provided to Dawson by the
Company for any purposes other than those contemplated under this Agreement.
14. Headings.
The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.
15. Counterparts.
This Agreement may be executed in one or more counterparts and, if executed in
more than one counterpart, the executed counterparts shall each be deemed to be
an original and all such counterparts shall together constitute one and the same
instrument.
16. Severability.
In case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or
impaired thereby.
17. Use of Information.
The Company will furnish Dawson such written information as Dawson reasonably
requests in connection with the performance of its services hereunder. The
Company understands, acknowledges and agrees that, in performing its services
hereunder, Dawson will use and rely entirely upon such information as well as
publicly available information regarding the Company and other potential parties
to an Offering and that Dawson does not assume responsibility for independent
verification of the accuracy or completeness of any information, whether
publicly available or otherwise furnished to it, concerning the Company or
otherwise relevant to an Offering, including, without limitation, any financial
information, forecasts or projections considered by Dawson in connection with
the provision of its services.
22
18. Absence of Fiduciary Relationship.
The Company acknowledges and agrees that: (a) the Placement Agent has been
retained solely to act as Placement Agent in connection with the sale of the
Securities and that no fiduciary, advisory or agency relationship between the
Company and the Placement Agent has been created in respect of any of the
transactions contemplated by this Agreement, irrespective of whether the
Placement Agent has advised or is advising the Company on other matters; (b) the
price and other terms of the Securities set forth in this Agreement were
established by the Company following discussions and arms-length negotiations
with the Placement Agent and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement; (c) it has been advised that the
Placement Agent and its affiliates are engaged in a broad range of transactions
that may involve interests that differ from those of the Company and that the
Placement Agent has no obligation to disclose such interest and transactions to
the Company by virtue of any fiduciary, advisory or agency relationship; and (d)
it has been advised that the Placement Agent is acting, in respect of the
transactions contemplated by this Agreement, solely for the benefit of the
Placement Agent, and not on behalf of the Company.
19. Survival Of Indemnities, Representations, Warranties, Etc.
The respective indemnities, covenants, agreements, representations, warranties
and other statements of the Company and Placement Agent, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agent, the Company, the Purchasers or any person controlling
any of them and shall survive delivery of and payment for the Securities.
Notwithstanding any termination of this Agreement, including without limitation
any termination pursuant to Section 5, the payment, reimbursement, indemnity,
contribution and advancement agreements contained in Sections 2, 6, 9, 10, 12,
and 13, respectively, and the Company's covenants, representations, and
warranties set forth in this Agreement shall not terminate and shall remain in
full force and effect at all times. The indemnity and contribution provisions
contained in Section 9 and the covenants, warranties and representations of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Placement Agent, any person who
controls the Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act or any affiliate of the
Placement Agent, or by or on behalf of the Company, its directors or officers or
any person who controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, and (iii) the issuance and
delivery of the Securities. The Company and the Placement Agent agree to notify
each other of the commencement of any Proceeding against either of them
promptly, and, in the case of the Company, against any of the Company's officers
or directors in connection with the issuance and sale of the Securities, or in
connection with the Registration Statement and the Prospectus.
20. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be fully performed
therein. Any disputes that arise under this Agreement, even after the
termination of this Agreement, will be heard only in the state or federal courts
located in the City of New York, State of New York. The parties hereto expressly
agree to submit themselves to the jurisdiction of the foregoing courts in the
City of New York, State of New York. The parties hereto expressly waive any
rights they may have to contest the jurisdiction, venue or authority of any
court sitting in the City and State of New York.
21. Notices.
All communications hereunder shall be in writing and shall be mailed, hand
delivered or faxed and confirmed to the parties hereto as follows:
If to the Company:
Cel-Sci Corporation
8229 Boone Boulevard, Suite 802
23
Vienna, Virginia 22182
Attention: Chief Executive Officer
If to the Placement Agent:
Dawson James Securities, Inc.
1 North Federal Highway - 5th Floor
Boca Raton, FL 33432
Attention: Chief Executive Officer
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
22. Miscellaneous.
This Agreement shall not be modified or amended except in writing signed by
Dawson and the Company. This Agreement shall be binding upon and inure to the
benefit of both Dawson and the Company and their respective assigns, successors,
and legal representatives. This Agreement constitutes the entire agreement of
Dawson and the Company, and supersedes any prior agreements, with respect to the
subject matter hereof. If any provision of this Agreement is determined to be
invalid or unenforceable in any respect, such determination will not affect such
provision in any other respect, and the remainder of this Agreement shall remain
in full force and effect.
23. Successors.
This Agreement will inure to the benefit of and be binding upon the parties
hereto, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 9 hereof, and to their respective
successors, and personal representatives, and, except as set forth in Section 9
of this Agreement, no other person will have any right or obligation hereunder.
24. Partial Unenforceability.
The invalidity or unenforceability of any section, paragraph or provision of
this Agreement shall not affect the validity or enforceability of any other
section, paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
25. General Provisions.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition in this Agreement (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit. The Company acknowledges that in connection with the Offering of the
Securities the Placement Agent: (i) has acted at arms-length, is not an agent
of, and owes no fiduciary duties to the Company or any other person, (ii) owes
the Company only those duties and obligations set forth in this Agreement and
(iii) may have interests that differ from those of the Company. The Company
waives to the full extent permitted by applicable law any claims it may have
against the Placement Agent arising from an alleged breach of fiduciary duty in
connection with the Offering.
24
In acknowledgment that the foregoing correctly sets forth the understanding
reached by Dawson and the Company, and intending to be legally bound, please
sign in the space provided below, whereupon this letter shall constitute a
binding Agreement as of the date executed.
Very truly yours,
CEL-SCI CORPORATION
By: /s/ Geert Kersten
--------------------------
Name: Geert Kersten
Title: Chief Executive Officer
Agreed and accepted as of the date first above written.
DAWSON JAMES SECURITIES, INC.
By: /s/ Robert D. Keyser, Jr.
--------------------------
Name: Robert D. Keyser, Jr.
Title: Chief Executive Officer
25
SCHEDULE I
Issuer General Use Free Writing Prospectuses
None.
26
EX-5
3
form8kdawsonex5oct-15.txt
EXH. 5 - H&H OPINION
EXHIBIT 5
HART & HART, LLC
ATTORNEYS AT LAW
1624 Washington Street
Denver, CO 80203
William T. Hart, P.C. ________ harttrinen@aol.com
Will Hart (303) 839-0061
Fax: (303) 839-5414
October 22, 2015
CEL-SCI Corporation
8229 Boone Boulevard, Suite 802
Vienna, Virginia 22182
This letter will constitute our opinion upon the legality of the sale by
CEL-SCI Corporation, a Colorado corporation ("CEL-SCI"), of:
o up to 17,910,447 shares of common stock;
o warrants to purchase up to 17,910,447 shares of common stock;
o up to 17,910,447 shares of common stock issuable upon the exercise of
the warrants;
all as referred to in the Registration Statement on Form S-3 (File No.
333-196243)(the "Registration Statement") filed with the Securities and Exchange
Commission, declared effective by the Securities and Exchange Commission (the
"Commission") on July 8, 2014, the prospectus included therein (the
"Prospectus") and the prospectus supplement, dated Octoer 23, 2015 (the
"Prospectus Supplement"), filed with the Commission pursuant to Rule 424(b) of
the rules and regulations of the Securities Act. The Prospectus Supplement
pertains to an underwritten offering (the "Offering") pursuant to the Placement
Agent Agreement dated October 22, 2015 between the Company and Dawson James
Securities, Inc.
We have examined the Articles of Incorporation, the Bylaws and the minutes
of the Board of Directors of CEL-SCI, the applicable laws of the State of
Colorado, and a copy of the Registration Statement. In our opinion:
o the shares of common stock mentioned above, when sold in the manner
described in the Registration Statement, the Prospectus and the
Prospectus Supplement, have been legally issued and these shares
represent fully paid and non-assessable shares of CEL-SCI's common
stock;
1
o the warrants, when sold in the manner described in the Registration
Statement, the Prospectus and the Prospectus Supplement, have been
legally issued, are fully paid and non-assessable and are the binding
obligations of CEL-SCI in accordance with the terms thereof; and
o the shares of common stock issuable upon the exercise of the warrants,
when sold in the manner described in the Registration Statement, the
Prospectus and the Prospectus Supplement, will be legally issued and
will represent fully paid and non-assessable shares of CEL-SCI's
common stock.
Very truly yours,
HART & HART, LLC
/s/ William T. Hart
William T. Hart
2
EX-10
4
form8kdawsonex10eeeoct-15.txt
EXH. 10(EEE) - WARRANT AGENT AGREE
EXHIBIT 10(eee)
WARRANT AGENT AGREEMENT
This Agreement, dated as of October __, 2015, is between CEL-SCI
Corporation, a Colorado corporation (the "Company"), and Computershare Inc., a
Delaware corporation ("Computershare"), and its wholly owned subsidiary
Computershare Trust Company N.A., a federally chartered trust company (together
with Computershare, collectively, the "Warrant Agent").
WHEREAS, the Company has previously sold to public investors warrants ("the
Warrants") to purchase up to 17,910,447 shares of the Company's common stock
(the "Common Stock"). Each Warrant is exercisable to purchase one share of
Common Stock upon the terms and conditions and subject to adjustment in certain
circumstances, all as set forth in this Agreement.
WHEREAS, the Company wishes to retain the Warrant Agent to act as warrant
agent on behalf of the Company, and the Warrant Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of the
certificates evidencing the Warrants to be issued under this Agreement (each a
"Warrant Certificate," collectively, the "Warrant Certificates") and the
exercise of the Warrants.
WHEREAS, the Company and the Warrant Agent wish to enter into this
Agreement to set forth the terms and conditions of the Warrants and the rights
of the holders thereof (each a "Warrant Holder," and collectively, the "Warrant
Holders") and to set forth the respective rights and obligations of the Company
and the Warrant Agent. Each Warrant Holder is an intended beneficiary of this
Agreement with respect to the rights of Warrant Holders herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
1. Warrants. Each Warrant will entitle the registered holder of a Warrant
to purchase from the Company one share of Common Stock (each a
"Share," collectively, the "Shares") at $0.67 per Share. The exercise
price for the Warrant is referred to herein as the "Exercise Price."
The Exercise Price is subject to adjustments as provided in Section 12
hereof. A Warrant Holder may exercise all or any number of Warrants
resulting in the purchase of a whole number of Shares. The terms of
the Warrants are shown on Exhibit A. With respect to the rights,
duties, obligations and liabilities of the Warrant Agent, in the event
of any conflict or inconsistency between this Agreement and the terms
of the Warrants, the provisions of this Agreement shall govern in all
respects. With respect to the rights, duties, obligations and
liabilities of any other person or entity other than the Warrant
Agent, in the event of any inconsistency between this Agreement and
the terms of the Warrants, as set forth on Exhibit A, the Warrant
terms will control.
2. Exercise Period. The Warrants may be exercised on or before October
28, 2020 (the "Expiration Date") pursuant to Section 6 hereof.
1
3. Execution of Warrant Certificates. Warrant Certificates shall be in
registered form only and shall be substantially in the form set forth
in Exhibit B attached to this Agreement. Warrant Certificates shall be
signed by, or shall bear the facsimile signature of, the Chief
Executive Officer, President or a Vice President of the Company and
the Secretary or an Assistant Secretary of the Company. If any person,
whose facsimile signature has been placed upon any Warrant Certificate
or the signature of an officer of the Company, shall have ceased to be
such officer before such Warrant Certificate is countersigned, issued
and delivered, such Warrant Certificate shall be countersigned, issued
and delivered with the same effect as if such person had not ceased to
be such officer. Any Warrant Certificate may be signed by, or made to
bear the facsimile signature of, any person who at the actual date of
the preparation of such Warrant Certificate shall be a proper officer
of the Company to sign such Warrant Certificate even though such
person was not such an officer upon the date of the Agreement, and
even if such officer shall cease to be such an officer after the
preparation of such Warrant Certificate. If a Warrant holder has an
account with DTC, at the election of such Warrant holder, Warrants may
be issued in "Book Entry" form by crediting the Warrant holder's
account with DTC.
4. Countersigning. Warrant Certificates shall be countersigned by the
Warrant Agent manually or by facsimile signature and shall not be
valid for any purpose unless so countersigned. The Warrant Agent
hereby is authorized to countersign and deliver to, or in accordance
with the instructions of, any Warrant Holder any Warrant Certificate
which is properly issued.
5. Registration of Transfer and Exchanges.
(a) The Warrant Agent shall from time to time, upon the written
request of a Warrant Holder, register the transfer of any
outstanding Warrant Certificate upon records maintained by the
Warrant Agent for such purpose upon surrender of such Warrant
Certificate to the Warrant Agent for transfer, accompanied by
appropriate instruments of transfer in form and substance
satisfactory to the Company and the Warrant Agent, properly
completed and duly executed by the Warrant Holder or a duly
authorized attorney, and such other information and documents
requested by the Warrant Agent. Upon any such registration of
transfer, a new Warrant Certificate shall be issued by the
Warrant Agent in the name of and to the transferee and the
surrendered Warrant Certificate shall be cancelled by the Warrant
Agent.
(b) A party requesting transfer must provide any evidence of
authority that may be required by the Warrant Agent, including
but not limited to, a signature guarantee from an eligible
guarantor institution participating in a signature guarantee
program approved by the Securities Transfer Association at a
guarantee level acceptable to the Warrant Agent.
2
6. Exercise of Warrants.
(a) Subject to the terms of the Warrants, any Warrant may be
exercised anytime, during the exercise period. The Warrants shall
be exercised by the Warrant Holder by surrendering to the Warrant
Agent the Warrant Certificate with the exercise form on the
reverse of such Warrant Certificate properly completed and duly
executed and delivering to the Warrant Agent (or by providing
such other notice of exercise made available by the Company), by
good check or bank draft payable to the order of the Warrant
Agent, the Exercise Price for each Share to be purchased.
Notwithstanding the foregoing, the Company will extend a three
day "protect" period after the Expiration Date so that any
Warrant for which notice of exercise is received in the three
business days prior to and including the Expiration Date shall be
deemed exercised so long as the Exercise Price is received by the
Warrant Agent no more than three business days after the notice
of exercise.
(b) Upon receipt of a Warrant Certificate with the exercise form
thereon properly completed and duly executed together with
payment in full of the Exercise Price for the Shares for which
Warrants are then being exercised, the Warrant Agent is hereby
authorized to requisition from any transfer agent for the Shares
(or make available if the Warrant Agent is also the transfer
agent for the Shares), and upon receipt shall make delivery of,
certificates evidencing the total number of whole Shares for
which Warrants are then being exercised in such names and
denominations as are required for delivery to, or in accordance
with the instructions of, the Warrant Holder. Such certificates
for the Shares shall be deemed to be issued, and the person whom
such Shares are issued of record shall be deemed to have become a
holder of record of such Shares, as of the date of the surrender
of such Warrant Certificate and payment of the Exercise Price,
whichever shall last occur; provided that if the transfer books
of the Company with respect to the Shares shall be closed, the
certificates for the Shares issuable upon exercise of the
Warrants shall be issued as of the date on which such books shall
next be open, and the person to whom such Shares are issued of
record shall be deemed to have become a record holder of such
Shares as of the date on which such books shall next be open
(whether before, on or after the Expiration Date) and until such
date the Warrant Agent shall be under no duty or obligation to
deliver any certificate for such Shares.
(c) If less than all of a Warrant Holder's Warrants are exercised
upon a single occasion, a new Warrant Certificate for the balance
of the Warrants not so exercised shall be issued and delivered
to, or in accordance with, transfer instructions properly given
by the Warrant Holder prior to the Expiration Date.
(d) All Warrant Certificates surrendered upon exercise shall be
cancelled by the Warrant Agent.
3
(e) Upon the exercise of any Warrant, the Warrant Agent shall
promptly deposit any payment received in connection with such
exercise into an account (the "Account") established by
Computershare at a federally insured commercial bank (the
"Bank"). All funds deposited in the account will be disbursed by
Computershare on a weekly basis to the Company after
Computershare has been informed by the Bank that the Bank has
"collected" the funds, subject to any withdrawals by the
Computershare for the account of the Warrant Agent permitted
hereunder. Once Computershare has been informed by the Bank that
the funds have been "collected," the Warrant Agent shall cause
the Share certificate(s) representing the exercised Warrants to
be issued.
All funds received by Computershare under this Agreement that are
to be distributed or applied by Computershare in the performance
of its duties hereunder (the "Funds") shall be held by
Computershare as agent for the Company and deposited in one or
more bank accounts to be maintained by Computershare in its name
as agent for the Company. Until paid pursuant to the terms of
this Agreement, Computershare will hold the Funds through such
accounts in: deposit accounts of commercial banks with Tier 1
capital exceeding $1 billion or with an average rating above
investment grade by S&P (LT Local Issuer Credit Rating), Moody's
(Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default
Rating) (each as reported by Bloomberg Finance L.P.).
Computershare shall have no responsibility or liability for any
diminution of the Funds that may result from any deposit made by
Computershare in accordance with this paragraph, including any
losses resulting from a default by any bank, financial
institution or other third party. Computershare may from time to
time receive interest, dividends or other earnings in connection
with such deposits. Computershare shall not be obligated to pay
such interest, dividends or earnings to the Company, any holder
or any other party.
(f) Expenses incurred by the Warrant Agent in connection with this
Agreement will be paid or reimbursed by the Company. These
expenses, including but not limited to delivery of Share
certificates to the stockholder, may (at the sole discretion of
the Warrant Agent) be deducted from the Exercise Price submitted
by a Warrant Holder and withdrawn from the Account prior to the
distribution of funds to the Company. A detailed accounting
statement relating to the number of Warrants exercised, name of
registered Warrant Holder and the net amount of exercised funds
remitted (after payment or reimbursement of the Warrant Agent's
expenses) will be given to the Company with the payment of each
exercise amount.
(g) In the event that a Warrant Holder elects a cashless exercise of
Warrants, the Company shall be solely responsible for calculating
the number of Common Stock issuable in connection with such
cashless exercise and transmitting such calculation to the
Warrant Agent in a written notice, and the Warrant Agent shall
have no duty, responsibility or obligation to calculate or
4
determine the number of Common Stock issuable in connection with
any such cashless exercise, or to investigate or confirm whether
the Company's calculation or determination of the number of
Shares to be issued in connection with any such cashless exercise
is accurate or correct. The Warrant Agent shall be entitled to
rely conclusively on any such written notice provided by the
Company, including the calculations and determinations contained
therein, and the Warrant Agent shall not be liable for any action
taken, suffered or omitted to be taken by it in accordance with
such written instructions, while waiting for such written
instructions, or pursuant to this Agreement.
(h) In the event of a cash exercise, the Company hereby instructs the
Warrant Agent to record cost basis for newly issued shares as
follows: [issuer to fill in calculation method]. In the event of
a cashless exercise, the Company shall provide cost basis for
shares issued pursuant to a cashless exercise at the time the
Company confirms the number of Warrant Shares issuable in
connection with the cashless exercise to the Warrant Agent
pursuant to Section 2(c) hereof.
7. Bank Accounts. The Company acknowledges that the bank accounts
maintained by Computershare in connection with the services provided
under this Agreement will be in Computershare's name and that
Computershare may receive investment earnings in connection with the
investment at Computershare's risk and for its benefit of funds held
in those accounts from time to time. Neither the Company nor the
record holders will receive interest on any deposits.
8. Taxes. The Company will, from time to time, promptly pay all taxes and
charges attributable to the initial issuance of Shares upon exercise
of Warrants. The Company shall not, however, be required to pay any
tax or charge that may be payable in connection with or with respect
to any transfer involved in any issue of Warrant Certificates or in
the issuance of any certificates of Shares in the name of anyone other
than that of the Warrant Holder; such taxes or charges to be the sole
responsibility and obligation of the Warrant Holder. The Warrant Agent
shall have no duty or obligation to take any action under any section
of this Agreement that requires the payment of taxes or charges,
including but not limited to this Section 8, unless and until the
Warrant Agent is satisfied that all such taxes and/or charges have
been paid.
9. Replacement Warrant Certificates. Warrant Agent shall issue
replacement Warrants for those certificates alleged to have been lost,
stolen or destroyed, upon receipt by Warrant Agent of an open penalty
surety bond satisfactory to it and holding it and Company harmless,
absent written notice to Warrant Agent that such certificates have
been acquired by a bona fide purchaser. Warrant Agent may, at its
option, issue replacement Warrant Certificates for mutilated
certificates upon presentation thereof with or without such indemnity
or other indemnity satisfactory to it.
5
10. Reservation of Shares. For the purpose of enabling the Company to
satisfy all obligations to issue Shares upon exercise of the Warrants,
the Company will at all times reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued
shares, the full number of Shares which may be issued upon the
exercise of the Warrants and such Shares will upon issue be fully paid
and nonassessable by the Company and free from all taxes, liens,
charges and security interests with respect to the issue thereof.
11. Governmental Restrictions. If any Shares issuable upon the exercise of
Warrants require registration or approval of any governmental
authority, the Company will use all commercially reasonable efforts to
cause such Shares to be duly registered, or approved, as the case may
be, and, to the extent practicable, take all such action in
anticipation of and prior to the exercise of the Warrants, including,
without limitation, filing any and all post-effective amendments to
the Company's Registration Statement on Form S-3 (Registration No.
333-196243) necessary to permit a public offering of the Shares
underlying the Warrants at any and all times during the term of this
Agreement; provided, however, that in no event shall such Shares be
issued, and the Company is authorized to refuse to honor the exercise
of any Warrant, if such exercise would result, in the opinion of the
Company's Board of Directors, upon advice of counsel, in the violation
of any law. The Company shall provide prompt written notice of any
such determination made by the Company. Until such written notice is
received by the Warrant Agent, the Warrant Agent may presume
conclusively for all purposes that no such determination has been made
by the Company.
12. Adjustments.
(a) If prior to the exercise of any Warrants, the Company shall have
effected one or more stock split-ups, stock dividends or other
increases or reductions of the number of shares of its Common
Stock outstanding without receiving compensation therefor in
money, services or property, the number of Shares subject to the
Warrants shall (i) if a net increase shall have been effected in
the number of outstanding shares of the Common Stock, be
proportionately increased, and the Exercise Price payable per
Share shall be proportionately reduced, and (ii) if a net
reduction shall have been effected in the number of outstanding
shares of the Common Stock, be proportionately reduced and the
Exercise Price payable per Share be proportionately increased.
(b) In the event of a capital reorganization or a reclassification of
the Common Stock (except as provided in Subsection 12(a)), any
Warrant Holder, upon exercise of the Warrants, shall be entitled
to receive, in substitution for the Common Stock to which the
Warrant Holder would have become entitled upon exercise
immediately prior to such reorganization or reclassification, the
shares (of any class or classes) or other securities or property
of the Company (or cash) that he would have been entitled to
receive at the same aggregate Exercise Price upon such
reorganization or reclassification if such Warrants had been
6
exercised immediately prior to the record date with respect to
such event; and in any such case, appropriate provision (as
determined by the Board of Directors of the Company, whose
determination shall be conclusive and shall be evidenced by a
certified Board resolution filed with the Warrant Agent) shall be
made for the application of this Section 12 with respect to the
rights and interests thereafter of the Warrant Holders (including
but not limited to the allocation of the Exercise Price between
or among shares of classes of capital stock), to the end that
this Section 12 (including the adjustments of the number of
Shares or other securities purchasable and the Exercise Price
thereof) shall thereafter be reflected, as nearly as reasonably
practicable, in all subsequent exercises of the Warrants for any
shares or securities or other property (or cash) thereafter
deliverable upon the exercise of the Warrants.
(c) In case of any consolidation of the Company with, or merger of
the Company into, another entity (other than a consolidation or
merger which does not result in any reclassification or change of
the outstanding Common Stock), the entity formed by such
consolidation or merger shall execute and deliver to the Warrant
Agent a supplemental Warrant agreement providing that the holder
of each Warrant then outstanding shall have the right thereafter
(until the expiration of such Warrant) to receive, upon exercise
of such Warrant, solely the kind and amount of shares of stock
and other securities and property (or cash) receivable upon such
consolidation or merger by a holder of the number of shares of
Common Stock for which such Warrant might have been exercised
immediately prior to such consolidation, merger, sale or
transfer. Such supplemental Warrant agreement shall provide for
adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided in this Section 12.
(d) The Warrant Agent shall have no obligation under any Section of
this Agreement to calculate any of the adjustments set forth
herein. The Warrant Agent shall be entitled to rely conclusively
on, and shall be fully protected in relying on, any certificate,
notice or instructions provided by the Company with respect to
any adjustment of the Exercise Price or the number of shares
issuable upon exercise of a Warrant, or any related matter, and
the Warrant Agent shall not be liable for any action taken,
suffered or omitted to be taken by it in accordance with any such
certificate, notice or instructions or pursuant to this Warrant
Agreement. The Warrant Agent shall not be deemed to have
knowledge of any such adjustment unless and until it shall have
received written notice thereof from the Company.
(e) The Company hereby agrees that it will provide the Warrant Agent
with reasonable notice of adjustment events set forth herein. The
Company further agrees that it will provide to the Warrant Agent
with any new or amended exercise terms. The Warrant Agent shall
have no obligation under any Section of this Agreement to
determine whether an Adjustment Event or an event set forth in
7
Sections 4.8 and 4.9 has occurred or are scheduled or
contemplated to occur or to calculate any of the adjustments set
forth in this Agreement.
13. Notice to Warrant Holders. Whenever an adjustment is required as
provided in Section 12 or otherwise, the Company shall promptly (i)
prepare and cause to be filed with the Warrant Agent a certificate
signed by an appropriate Company officer setting forth the details of
such adjustment, the method of calculation and the facts upon which
such calculation and adjustment is based, which certificate shall be
conclusive evidence of the correctness of the matters set forth
therein, and until such a certificate is received by the Warrant
Agent, the Warrant Agent may presume conclusively for all purposes to
that no adjustments have occurred, (ii) cause notice of such
adjustments to be given to the Warrant Holders of record, which notice
may be by publication of a press release and by taking such other
steps as may be required under applicable laws. Without limiting the
obligation of the Company hereunder to provide notice to each Warrant
Holder, failure of the Company to give notice to the Warrant Holders
shall not invalidate any corporate action taken by the Company.
14. No Fractional Warrants or Shares. The Company (including the Warrant
Agent) shall not be required to issue fractions of Shares issuable
upon exercise of the Warrants, upon the reissue of Warrants, or any
adjustments as described in Section 12 or otherwise; but the Company
shall instruct the Warrant Agent in writing, in lieu of issuing any
such fractional interest that would otherwise be issuable, to, round
up or down to the nearest full Share issuable upon exercise of the
Warrant, or to make a cash adjustment. If the total Warrants
surrendered by any exercise would result in the issuance of a
fractional share, the Warrant Agent shall promptly inform the Company,
and the Company shall promptly prepare and deliver to the Warrant
Agent a certificate instructing the Warrant Agent to either (ii) round
up or down the aggregate number of shares issuable to the nearest full
share, or (ii) make a cash adjustment in lieu of issuing such
fractional Shares. The certificate delivered by the Company to the
Warrant Agent shall set forth in reasonable detail the facts related
to such payment or adjustment, including the prices and/or formulas
used to calculate such payment or adjustment, and the Company shall
provide the Warrant Agent with sufficient monies in the form of fully
collected funds to make such payments (or direct the Warrant Agent to
deduct such amounts from the Account). The Warrant Agent shall be
fully protected in relying upon such a certificate and shall have no
duty with respect to, and shall not be deemed to have knowledge of any
payment for fractional Warrants or fractional Shares under any Section
of this Agreement relating to the payment of fractional Warrants or
fractional Shares unless and until the Warrant Agent shall have
received such a certificate and sufficient monies.
15. Rights of Warrant Holders. No Warrant Holder, as such, shall have any
rights of a stockholder of the Company, either at law or equity, and
the rights of the Warrant Holders, as such, are limited to those
rights expressly provided in the Warrant Certificate. The Company and
8
the Warrant Agent may treat the registered Warrant Holder in respect
of any Warrant as the absolute owner thereof for all purposes
notwithstanding any notice to the contrary.
16. Warrant Agent. The Company hereby appoints the Warrant Agent to act as
warrant agent of the Company with respect to the Warrants, and the
Warrant Agent hereby accepts such appointment upon and subject to the
express terms and conditions set forth herein (and no implied terms or
conditions) all of which the Company and every Warrant Holder, by
acceptance of such Warrant Holder's Warrant Certificates, shall be
bound, including but not limited to the following:
(a) Statements contained in this Agreement and in the Warrant
Certificate shall be taken as statements of the Company only. The
Warrant Agent assumes no responsibility for the correctness of
any of the same or be required to verify the same except for such
provisions of this Agreement that describes the Warrant Agent or
the action taken or to be taken by the Warrant Agent hereunder.
The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant
Agent) or in respect of the validity or execution of any Warrant
or any purchase agreement related thereto; nor shall it be
responsible for any breach by the Company of any covenant or
condition contained in this Agreement, any Warrant or in any
other agreement or document related thereto; nor shall it by any
act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Common Stock to be
issued pursuant to this Agreement or any Warrant or as to whether
any Common Stock will, when issued, be duly authorized, validly
issued, fully paid and nonassessable; nor shall it have any duty
or responsibility in the case of the receipt of any written
demand from any Warrant Holder with respect to any such action or
default by the Company, including, without limiting the
generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or
otherwise or to make any demand upon the Company.
(b) The Warrant Agent shall not be liable or responsible for any
failure of the Company to comply with any of the Company's
duties, covenants or obligations contained in this Agreement, the
Warrant Certificates or in any other agreement or document.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company or an
employee of the Warrant Agent) and the Warrant Agent shall incur
no liability or responsibility to the Company or to any other
person or entity in respect of any action taken, suffered or
omitted to be taken by it hereunder in the absence of bad faith
and in accordance with the opinion or the advice of such counsel.
(d) From time to time, the Company may provide the Warrant Agent with
written instructions concerning the services to be performed by
the Warrant Agent hereunder. In addition, at any time the Warrant
Agent may apply to any officer of the Company for written
9
instruction with respect to any fact or matter arising in
connection with the services to be performed by the Warrant Agent
under this Agreement, and such fact or matter shall be deemed to
be conclusively proved or established by any written Company
instructions or other notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument issued in
response thereto. The Warrant Agent and its agents and
subcontractors shall not be liable and shall be indemnified by
Company for any action taken, suffered or omitted to be taken by
it in reliance upon any Company instructions or any notice,
resolution, waiver, consent, order, certificate or other paper,
document or instrument believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
The Warrant Agent shall not be held to have notice of any change
of authority of any person, until receipt of written notice
thereof from the Company.
(e) The Company agrees to pay to the Warrant Agent from time to time
[reasonable compensation] [compensation in accordance with the
fee schedule attached as Exhibit C hereto] for all services
rendered, together with reimbursement for all expenses, taxes and
governmental charges and all other charges of any kind or nature
incurred by the Warrant Agent, in connection with the execution
and administration of this Agreement and the exercise and
performance of its duties hereunder, and to indemnify the Warrant
Agent and save it harmless against any and all liabilities,
including judgments, costs and counsel fees and expenses,
incurred in connection with this Agreement, except as a result of
the Warrant Agent's own gross negligence or bad faith or willful
misconduct (each as determined by a final judgment of a court of
competent jurisdiction).
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action it
believes is likely to involve expense unless the Company or one
or more Warrant Holders shall furnish the Warrant Agent with
security and indemnity for any costs and expenses that may be
incurred in connection with such action, suit or legal
proceeding, but this provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may
consider proper, whether with or without any such security or
indemnity. All rights of action under this Agreement or under any
of the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrant Certificates or the production
thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent, and any
recovery of judgment on behalf of the Warrant Holders shall be
for the ratable benefit of the Warrant Holders as their
respective rights or interest may appear.
(g) The Warrant Agent (and its affiliates) and any stockholder,
director, officer, agent or employee of the Warrant Agent (or any
of its affiliates) may buy, sell or deal in any of the Warrants
or other securities of the Company or become pecuniarily
10
interested in any transaction in which the Company or any Warrant
Holder may be interested, or contract with or lend money to the
Company or any Warrant Holder or otherwise act as fully and
freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other person or
legal entity.
(h) The Warrant Agent shall be liable hereunder only for its own
gross negligence, bad faith and willful misconduct (each as
determined by a final judgment of a court of competent
jurisdiction).
(i) The Warrant Agent may perform any of its duties hereunder either
directly or by or through agents or attorneys, and the Warrant
Agent shall not be liable for any act or failure to act by any
such agent or attorney absent gross negligence, bad faith or
willful misconduct (each as determined by a final judgment of a
court of competent jurisdiction) in the selection and assignment
of tasks to any such agent or attorney.
(j) The Warrant Agent shall not be obligated to expend or risk its
own funds or to take any action that it believes would expose or
subject it to expense or liability or to a risk of incurring
expense or liability, unless it has been furnished with
assurances of repayment or indemnity satisfactory to it.
(k) The Warrant Agent shall not be liable or responsible for any
failure of the Company to comply with any of its obligations
relating to the registration of securities under this Agreement
or any Warrant, including without limitation obligations under
applicable regulation or law.
(l) The Warrant Agent shall not be under any liability for interest
on any monies at any time received by it pursuant to any of the
provisions of this Agreement.
(m) The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any Warrants
authenticated by the Warrant Agent and delivered by it to the
Company pursuant to this Agreement or for the application by the
Company of the proceeds of the issue and sale, or exercise, of
Warrants.
(n) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the
provisions hereof (and no duties or obligations shall be inferred
or implied). The Warrant Agent shall not assume any obligations
or relationship of agency or trust with any of the owners or
holders of the Warrants.
(o) The Warrant Agent may rely on and be fully authorized and
protected in acting or failing to act upon (a) any guaranty of
signature by an "eligible guarantor institution" that is a member
11
or participant in the Securities Transfer Agents Medallion
Program or other comparable "signature guarantee program" or
insurance program in addition to, or in substitution for, the
foregoing; or (b) any law, act, regulation or any interpretation
of the same even though such law, act, or regulation may
thereafter have been altered, changed, amended or repealed.
(p) The Warrant Agent shall at all times be entitled to the rights,
protections and indemnities set forth herein, whether acting as
warrant agent or in any other capacity hereunder.
17. Successor Warrant Agent. Any entity into which the Warrant Agent may
be merged or converted or with which it may be consolidated, or any
entity resulting from any merger, conversion or consolidation to which
the Warrant Agent shall be a party, or any entity succeeding to the
shareowner services business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder with the same powers, rights,
responsibilities and obligations of the Warrant Agent without the
execution or filing of any paper or any further act of a party or the
parties hereto. In any such event or if the name of the Warrant Agent
is changed, the Warrant Agent or such successor may adopt the
countersignature of the original Warrant Agent and may countersign
such Warrants either in the name of the predecessor Warrant Agent or
in the name of the successor Warrant Agent.
18. Change of Warrant Agent. The Warrant Agent may resign or be discharged
by the Company from its duties under this Agreement by the Warrant
Agent or the Company, as the case may be, by giving notice in writing
to the other, and by giving a date when such resignation or discharge
shall take effect, which notice shall be sent at least 30 days prior
to the date so specified. If the Warrant Agent shall resign, be
discharged or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Warrant Agent. If the Company shall
fail to make such appointment within a period of 30 days after it has
been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by any Warrant Holder or
after discharging the Warrant Agent, then the Company agrees to
perform the duties of the Warrant Agent hereunder until a successor
Warrant Agent is appointed. Upon any such termination, Warrant Agent
shall be relieved and discharged of any further responsibilities with
respect to its duties hereunder. After appointment of a successor
Warrant Agent and execution of a copy of this Agreement in effect at
that time, the successor Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed and,
upon payment to the former Warrant Agent of all outstanding fees and
the reimbursements of expenses incurred hereunder, the former Warrant
Agent shall deliver and transfer to the successor Warrant Agent any
property at the time held by it thereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for effecting
the delivery or transfer.
12
19. Opinion of Counsel.
(a) The Company shall provide an opinion of counsel prior to the
issuance of any Warrant Certificate to set up a reserve of
Warrants and related shares of Common Stock. The opinion shall
state that all Warrants or common stock, as applicable, are:
(i) registered under the Securities Act of 1933, as amended, or
are exempt from such registration, and all appropriate state
securities law filings have been made with respect to the
Warrants or shares; and
(ii) validly issued, fully paid and non-assessable.
20. Notices. Any notice or demand authorized by this Agreement to be given
to or made by the Warrant Agent or by any Warrant Holder to or on the
Company shall be in writing and shall be deemed given when sent by
overnight delivery service by a nationally recognized overnight
courier service to the addresses shown below:
To the Company:
CEL-SCI Corporation
8229 Boone Boulevard, Suite 802
Vienna, Virginia 22182
Attn: Patricia Prichep
Facsimile: (703) 506-9471
With copy to:
Hart & Hart, LLC
1624 Washington Street
Denver, CO 80203
Attn: William T. Hart
Fax: (303) 839-5414
To the Warrant Agent:
Computershare, Inc.
350 Indiana Street, Suite 750
Golden CO 80401
Attn: Patrick Hayes
Fax: (303) 262-0610
Except as otherwise provided in this Agreement, any distribution,
notice or demand required or authorized by this Agreement to be given
or made by the Company or the Warrant Agent to or on the Warrant
Holders shall be sufficiently given or made if sent to the Warrant
13
Holders at their last known addresses as they shall appear on the
registration books for the Warrant Certificates maintained by the
Warrant Agent.
21. Supplements and Amendments. The Company and the Warrant Agent may from
time to time supplement or amend this Agreement without the approval
of any Warrant Holders in order to cure any ambiguity or to correct or
supplement any provisions herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and
the Warrant Agent may deem necessary or desirable. In furtherance of
the foregoing, the Company may extend the duration of the Exercise
Period, without the consent of the Warrant Holders. No provision of
this Agreement may be amended, modified or waived, except in a written
document signed by the parties hereto. As a condition precedent to the
Warrant Agent's execution of any amendment, the Company shall deliver
to the Warrant Agent a certificate from a duly authorized officer of
the Company that states that the proposed amendment is in compliance
with the terms of this Section 21. The Warrant Agent may, but shall
not be obligated to, enter into any amendment that affects its own
rights, duties, liabilities or obligations hereunder.
22. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
23. Termination. This Agreement shall terminate at the close of business
on the Expiration Date, or such earlier date upon which all Warrants
have been exercised, provided, however, that if exercise of the
Warrants is suspended and such suspension continues past the
Expiration Date, this Agreement shall terminate at the close of
business on the business day immediately following the expiration of
such suspension. The provisions of Sections 16, 24 and 25, and
Sections 27 through 31, shall survive the termination of this
Agreement.
24. Governing Law. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the
State of Colorado and for all purposes shall be construed in
accordance with the laws of said State except that the rights, duties,
liabilities and obligations of the Warrant Agent under this Agreement
shall be governed by and construed in accordance with the laws of the
state of New York.
25. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give any person or entity other than the Company, the
Warrant Agent or the registered holders of the Warrant Certificates
any legal or equitable right, remedy or claim under this Agreement.
26. Signatures/Counterparts. This Agreement may be executed in any number
of counterparts, including signatures delivered by electronic means
(e.g., PDF or facsimile), and each of such counterparts shall for all
purposes be deemed to be an original and all such counterparts shall
14
together constitute but one and the same instrument. A signature to
this Agreement transmitted electronically shall have the same
authority, effect, and enforceability as an original signature.
27. Indemnification.
(a) The Company covenants and agrees to indemnify, defend and to hold
the Warrant Agent harmless from and against any costs, expenses
(including the reasonable fees and expenses of its legal
counsel), losses, liabilities, suits, actions, proceedings,
judgments, claims, settlements or damages, which may be paid,
incurred or suffered by or to which it may become subject,
arising from or out of, directly or indirectly, any action taken,
suffered or omitted to be taken by the Warrant Agent in
connection with the preparation, delivery, acceptance,
administration, execution or amendment of this Agreement and the
exercise or performance of its duties hereunder, including the
costs and expenses of enforcing its rights hereunder; provided,
that such covenant and agreement does not extend to, and the
Warrant Agent shall not be indemnified with respect to, such
liabilities, suits, actions, proceedings, judgments, claims,
settlements, costs, expenses, losses and damages incurred or
suffered by the Warrant Agent as a result of, or arising out of,
its own gross negligence, bad faith, or willful misconduct (each
as determined by a final judgment of a court of competent
jurisdiction).
(b) From time to time, the Company may provide the Warrant Agent with
written instructions concerning the express obligations of and
services performed by the Warrant Agent hereunder. In addition,
at any time Warrant Agent may apply to any officer of Company for
instruction, and may consult with legal counsel for Warrant Agent
(including an employee of the Warrant Agent) or Company with
respect to any matter arising out of or in connection with such
obligations and services. The Warrant Agent and its agents and
subcontractors shall not be liable and shall be indemnified by
Company for any action taken or omitted by Warrant Agent in
reliance upon any Company instructions or upon the advice or
opinion of such counsel. Warrant Agent shall not be held to have
notice of any change of authority of any person, until receipt of
written notice thereof from Company.
28. Limitation of Liability. Notwithstanding anything contained herein to
the contrary, the Warrant Agent's aggregate liability during any term
of this Agreement with respect to, arising from, or arising in
connection with this Agreement, or from all services provided or
omitted to be provided under this Agreement, whether in contract, or
in tort, or otherwise, is limited to, and shall not exceed, the
amounts paid hereunder by the Company to Warrant Agent as fees and
charges, but not including reimbursable expenses, during the twelve
(12) months immediately preceding the event for which recovery from
Warrant Agent is being sought.
15
29. Confidentiality. The Warrant Agent and the Company agree that all
books, records, information and data pertaining to the business of the
other party ("Confidential Information"), including inter alia,
personal, non-public Warrant holder information, which are exchanged
or received pursuant to the negotiation or the carrying out of this
Agreement, including the fees for services set forth in the attached
schedule, shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law,
including, without limitation, pursuant to subpoenas from state or
federal government authorities (e.g., in divorce and criminal
actions). Confidential Information shall not include information that,
at the time of disclosure: (i) is or becomes generally available to
and known by the public other than as a result of, directly or
indirectly, any breach of this Section 29 by such receiving party;
(ii) is or becomes available to the receiving party on a
non-confidential basis from a third-party source, provided that such
third party is not and was not prohibited from disclosing such
Confidential Information; (iii) was known by or in the possession of
the receiving party or its representatives prior to being disclosed by
or on behalf of the disclosing party; (iv) was or is independently
developed by the receiving party without reference to or use of, in
whole or in part, any of the disclosing party's Confidential
Information; or (v) is required to be disclosed pursuant to applicable
federal, state or local law, regulation or a valid order issued by a
court or governmental agency of competent jurisdiction.
30. Force Majeure Term. Notwithstanding anything to the contrary contained
herein, the Warrant Agent will not be liable for any delays or
failures in performance resulting from acts beyond its reasonable
control including, without limitation, acts of God, terrorist acts,
shortage of supply, breakdowns or malfunctions, interruptions or
malfunction of computer facilities, or loss of data due to power
failures or mechanical difficulties with information storage or
retrieval systems, labor difficulties, war, or civil unrest.
31. Consequential Damages. Except with respect to indemnification for
third party claims expressly provided for herein, neither party to
this Agreement shall be liable to the other party for any
consequential, indirect, punitive, special or incidental damages under
any provisions of this Agreement or for any consequential, indirect,
penal, special or incidental damages arising out of any act or failure
to act hereunder even if that party has been advised of or has
foreseen the possibility of such damages.
32. Further Assurances. The Company shall perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, documents, instruments and
assurances as may be reasonably required by the Warrant Agent for the
carrying out or performing by the Warrant Agent of the provisions of
this Agreement.
33. Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of this Agreement or of any
other term or provision hereof; provided, that if such invalid or
unenforceable term affects the rights, duties, obligations or
liabilities of the Warrant Agent, the Warrant Agent shall be entitled
to resign immediately.
16
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by one of its officers thereunto duly authorized as of the date
first written above.
CEL-SCI CORPORATION
By:
---------------------------
Name: Patricia B. Prichep
Title: Senior Vice President of Operations
COMPUTERSHARE INC.
By:
---------------------------
Name: Michael Legregin
Title: Corporate Actions Manager
COMPUTERSHARE TRUST COMPANY N.A.
By: /s/ Michael Legregin
---------------------------
Name: Michael Legregin
Title: Corporate Actions Manager
17
EXHIBIT A
EXHIBIT A
CEL-SCI CORPORATION
SERIES W WARRANTS
TERMS
Initial Exercise Date: October 28, 2015
THIS SERIES W COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that, for
value received, _____________ or its assigns (the "Holder") is entitled, upon
the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the "Initial
Exercise Date") and on or prior to October 28, 2020 (the "Termination Date") but
not thereafter, to subscribe for and purchase from CEL-SCI Corporation, a
Colorado corporation (the "Company"), up to ______ shares (as subject to
adjustment hereunder, the "Warrant Shares") of Common Stock. The purchase price
of one share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section 1. Definitions. In addition to the terms defined elsewhere in this
Warrant, the following terms have the meanings indicated in this Section 1:
"Affiliate" means any Person that, directly or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the
Securities Act.
"Board of Directors" means the board of directors of the Company.
"Business Day" means any day except any Saturday, any Sunday, any day which
is a federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.
"Commission" means the United States Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par value $0.01 per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed.
"Common Stock Equivalents" means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
1
"Liens" means a lien, charge pledge, security interest, encumbrance, right
of first refusal, preemptive right or other restriction.
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Subsidiary" means any subsidiary of the Company and shall, where
applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date hereof.
"Trading Day" means a day on which the Common Stock is traded on a Trading
Market.
"Trading Market" means any of the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question: the
NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any
successors to any of the foregoing).
"Transfer Agent" means Computershare Investor Services, the current
transfer agent of the Company, with a mailing address of 350 Indiana Street,
Suite 800 Golden, Colorado 80401 and a facsimile number of (303) 262-0700, and
any successor transfer agent of the Company.
"VWAP" means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average price of the Common Stock
for such date (or the nearest preceding date) on the Trading Market on which the
Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a
Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if the OTC Bulletin Board is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then
listed or quoted for trading on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the "Pink Sheets" published by Pink OTC
Markets, Inc. (or a similar organization or agency succeeding to its functions
of reporting prices), the most recent bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common
2
Stock as determined by an independent appraiser selected in good faith by the
Holder and reasonably acceptable to the Company, the fees and expenses of which
shall be paid by the Company.
Section 2. Exercise.
a) Exercise of the Warrant. Exercise of the purchase rights
represented by this Warrant may be made, in whole or in part, at any time
or times on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company (or such other office or agency
of the Company as it may designate by notice in writing to the registered
Holder at the address of the Holder appearing on the books of the Company)
of a duly executed facsimile copy of the Notice of Exercise in the form
annexed hereto. Within three (3) Trading Days following the date of
exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the shares specified in the applicable Notice of Exercise by wire
transfer or cashier's check drawn on a United States bank unless the
cashless exercise procedure specified in Section 2(c) below is specified in
the applicable Notice of Exercise. No ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Exercise form be required.
Notwithstanding anything herein to the contrary, the Holder shall not be
required to physically surrender this Warrant to the Company until the
Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three (3)
Trading Days of the date the final Notice of Exercise is delivered to the
Company. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall
have the effect of lowering the outstanding number of Warrant Shares
purchasable hereunder in an amount equal to the applicable number of
Warrant Shares purchased. The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of such
purchases. The Company shall deliver any objection to any Notice of
Exercise within one (1) Business Day of receipt of such notice. The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase
of a portion of the Warrant Shares hereunder, the number of Warrant Shares
available for purchase hereunder at any given time may be less than the
amount stated on the face hereof.
b) Exercise Price. The exercise price per share of the Common Stock
under this Warrant shall be $0.67, subject to adjustment hereunder (the
"Exercise Price").
c) Cashless Exercise. If at the time of exercise hereof there is no
effective registration statement registering, or the prospectus contained
therein is not available for the issuance of, the Warrant Shares to the
Holder, then this Warrant may only be exercised, in whole or in part, at
such time by means of a "cashless exercise" in which the Holder shall be
entitled to receive a number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
3
(A) = the VWAP on the Trading Day immediately preceding the date
on which Holder elects to exercise this Warrant by means of a
"cashless exercise," as set forth in the applicable Notice of
Exercise;
(B) = the Exercise Price of this Warrant, as adjusted hereunder;
and
(X) = the number of Warrant Shares that would be issuable upon
exercise of this Warrant in accordance with the terms of this
Warrant if such exercise were by means of a cash exercise
rather than a cashless exercise.
Notwithstanding anything herein to the contrary, on the Termination Date,
this Warrant shall be automatically exercised via cashless exercise pursuant to
this Section 2(c).
d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall
use best efforts to cause the Warrant Shares purchased hereunder to be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder's prime broker with The Depository Trust Company
through its Deposit or Withdrawal at Custodian system ("DWAC") if the
Company is then a participant in such system and either (A) there is
an effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder or (B)
this Warrant is being exercised via cashless exercise, and otherwise
by physical delivery to the address specified by the Holder in the
Notice of Exercise by the date that is three (3) Trading Days after
the latest of (A) the delivery to the Company of the Notice of
Exercise and (B) surrender of this Warrant (if required) (such date,
the "Warrant Share Delivery Date"). The Warrant Shares shall be deemed
to have been issued, and Holder or any other person so designated to
be named therein shall be deemed to have become a holder of record of
such shares for all purposes, as of the date the Warrant has been
exercised, with payment to the Company of the Exercise Price (or by
cashless exercise, if permitted) and all taxes required to be paid by
the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance
of such shares, having been paid. If the Company fails for any reason
to deliver to the Holder the Warrant Shares subject to a Notice of
Exercise by the Warrant Share Delivery Date, the Company shall pay to
the Holder, in cash, as liquidated damages and not as a penalty, for
each $1,000 of Warrant Shares subject to such exercise (based on the
VWAP of the Common Stock on the date of the applicable Notice of
Exercise), $10 per Trading Day (increasing to $20 per Trading Day on
the fifth Trading Day after such liquidated damages begin to accrue)
for each Trading Day after such Warrant Share Delivery Date until such
Warrant Shares are delivered or Holder rescinds such exercise.
4
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall
have been exercised in part, the Company shall, at the request of a
Holder and upon surrender of this Warrant certificate, at the time of
delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the unpurchased
Warrant Shares called for by this Warrant, which new Warrant shall in
all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the
Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder
will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant
Shares Upon Exercise. In addition to any other rights available to the
Holder, if the Company fails to cause the Transfer Agent to transmit
to the Holder the Warrant Shares pursuant to an exercise on or before
the Warrant Share Delivery Date, and if after such date the Holder is
required by its broker to purchase (in an open market transaction or
otherwise) or the Holder's brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of
the Warrant Shares which the Holder anticipated receiving upon such
exercise (a "Buy-In"), then the Company shall (A) pay in cash to the
Holder the amount, if any, by which (x) the Holder's total purchase
price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by
multiplying (1) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number of
Warrant Shares for which such exercise was not honored (in which case
such exercise shall be deemed rescinded) or deliver to the Holder the
number of shares of Common Stock that would have been issued had the
Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an
attempted exercise of shares of Common Stock with an aggregate sale
price giving rise to such purchase obligation of $10,000, under clause
(A) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In and, upon request of the Company, evidence of
the amount of such loss. Nothing herein shall limit a Holder's right
to pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance
5
and/or injunctive relief with respect to the Company's failure to
timely deliver shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.
v. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which the Holder would
otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of
such final fraction in an amount equal to such fraction multiplied by
the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall
be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such Warrant
Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or
in such name or names as may be directed by the Holder; provided,
however, that in the event Warrant Shares are to be issued in a name
other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto
duly executed by the Holder and the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for
any transfer tax incidental thereto. The Company shall pay all
Transfer Agent fees required for same-day processing of any Notice of
Exercise.
vii. Closing of Books. The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.
e) Holder's Exercise Limitations. The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to exercise
any portion of this Warrant, pursuant to Section 2 or otherwise, to the
extent that after giving effect to such issuance after exercise as set
forth on the applicable Notice of Exercise, the Holder (together with the
Holder's Affiliates, and any other Persons acting as a group together with
the Holder or any of the Holder's Affiliates), would beneficially own in
excess of the Beneficial Ownership Limitation (as defined below). For
purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the
number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i)
exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates and (ii) exercise
or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Common
Stock Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the
Holder or any of its Affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 2(e), beneficial ownership shall be
6
calculated in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder, it being acknowledged by the
Holder that the Company is not representing to the Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act and the
Holder is solely responsible for any schedules required to be filed in
accordance therewith. To the extent that the limitation contained in this
Section 2(e) applies, the determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder together
with any Affiliates) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission of a
Notice of Exercise shall be deemed to be the Holder's determination of
whether this Warrant is exercisable (in relation to other securities owned
by the Holder together with any Affiliates) and of which portion of this
Warrant is exercisable, in each case subject to the Beneficial Ownership
Limitation, and the Company shall have no obligation to verify or confirm
the accuracy of such determination. In addition, a determination as to any
group status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number of
outstanding shares of Common Stock as reflected in (A) the Company's most
recent periodic or annual report filed with the Commission, as the case may
be, (B) a more recent public announcement by the Company or (C) a more
recent written notice by the Company or the Transfer Agent setting forth
the number of shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two Trading Days confirm
orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise
of securities of the Company, including this Warrant, by the Holder or its
Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The "Beneficial Ownership Limitation" shall be
4.99% of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock issuable upon
exercise of this Warrant. The Holder, upon not less than 61 days' prior
notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon exercise of this Warrant held by
the Holder and the provisions of this Section 2(e) shall continue to apply.
Any such increase or decrease will not be effective until the 61st day
after such notice is delivered to the Company. The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 2(e) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply
to a successor holder of this Warrant.
7
Section 3. Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise makes a
distribution or distributions on shares of its Common Stock or any other
equity or equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of Common
Stock issued by the Company upon exercise of this Warrant), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii)
combines (including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of capital stock
of the Company, then in each case the Exercise Price shall be multiplied by
a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the number of
shares issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant shall
remain unchanged. Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
b) [RESERVED]
c) Subsequent Rights Offerings. In addition to any adjustments
pursuant to Section 3(a) above, if at any time the Company grants, issues
or sells any Common Stock Equivalents or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of
any class of shares of Common Stock (the "Purchase Rights"), then the
Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date on which a
record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the grant, issue or sale of
such Purchase Rights (provided, however, to the extent that the Holder's
right to participate in any such Purchase Right would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (or
beneficial ownership of such shares of Common Stock as a result of such
Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).
d) Pro Rata Distributions. During such time as this Warrant is
outstanding, if the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of
8
shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a "Distribution"), at any time after the issuance of
this Warrant, then, in each such case, the Holder shall be entitled to
participate in such Distribution to the same extent that the Holder would
have participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a
record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be
determined for the participation in such Distribution (provided, however,
to the extent that the Holder's right to participate in any such
Distribution would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any shares
of Common Stock as a result of such Distribution to such extent) and the
portion of such Distribution shall be held in abeyance for the benefit of
the Holder until such time, if ever, as its right thereto would not result
in the Holder exceeding the Beneficial Ownership Limitation).
e) Fundamental Transaction. If, at any time while this Warrant is
outstanding, (i) the Company, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Company
with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other
disposition of all or substantially all of its assets in one or a series of
related transactions, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to sell,
tender or exchange their shares for other securities, cash or property and
has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property, or (v) the Company,
directly or indirectly, in one or more related transactions consummates a
stock or share purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person or group of Persons whereby such other
Person or group acquires more than 50% of the outstanding shares of Common
Stock (not including any shares of Common Stock held by the other Person or
other Persons making or party to, or associated or affiliated with the
other Persons making or party to, such stock or share purchase agreement or
other business combination) (each a "Fundamental Transaction"), then, upon
any subsequent exercise of this Warrant, the Holder shall have the right to
receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any limitation
in Section 2(e) on the exercise of this Warrant), the number of shares of
Common Stock of the successor or acquiring corporation or of the Company,
9
if it is the surviving corporation, and any additional consideration (the
"Alternate Consideration") receivable as a result of such Fundamental
Transaction by a holder of the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such Fundamental
Transaction (without regard to any limitation in Section 2(e) on the
exercise of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash
or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the "Successor
Entity") to assume in writing all of the obligations of the Company under
this Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(e) pursuant to written agreements in form and
substance reasonably satisfactory to a majority of the Holders and approved
by a majority of the Holders (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the Holder, deliver to
the Holder in exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and
substance to this Warrant which is exercisable for a corresponding number
of shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the shares of Common Stock acquirable and receivable upon
exercise of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of
capital stock (but taking into account the relative value of the shares of
Common Stock pursuant to such Fundamental Transaction and the value of such
shares of capital stock, such number of shares of capital stock and such
exercise price being for the purpose of protecting the economic value of
this Warrant immediately prior to the consummation of such Fundamental
Transaction),. Upon the occurrence of any such Fundamental Transaction, the
Successor Entity shall succeed to, and be substituted for , the Company (so
that from and after the date of such Fundamental Transaction, the
provisions of this Warrant and the other Transaction Documents referring to
the "Company" shall refer instead to the Successor Entity), and the
Successor Entity may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant and
the other Transaction Documents with the same effect as if such Successor
Entity had been named as the Company herein.
f) Calculations. All calculations under this Section 3 shall be made
to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 3, the number of shares of Common Stock deemed
to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued
and outstanding.
10
g) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is
adjusted pursuant to any provision of this Section 3, the Company
shall promptly mail to the Holder a notice setting forth the Exercise
Price after such adjustment and any resulting adjustment to the number
of Warrant Shares and setting forth a brief statement of the facts
requiring such adjustment.
ii. Notice to Allow Exercise by Holder. If (A) the Company shall
declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring
cash dividend on or a redemption of the Common Stock, (C) the Company
shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of
the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company
is a party, any sale or transfer of all or substantially all of the
assets of the Company, or any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or property or
(E) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company,
then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of
the Company, at least 20 calendar days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Stock of
record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of
which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share
exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the
extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice with
the Commission pursuant to a Current Report on Form 8-K. The Holder
shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the
event triggering such notice except as may otherwise be expressly set
forth herein.
11
Section 4. Transfer of Warrant.
a) Transferability. This Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or
in part, upon surrender of this Warrant at the principal office of the
Company or its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer
taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant
or Warrants in the name of the assignee or assignees, as applicable, and in
the denomination or denominations specified in such instrument of
assignment, and shall issue to the assignor a new Warrant evidencing the
portion of this Warrant not so assigned, and this Warrant shall promptly be
cancelled. Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company
unless the Holder has assigned this Warrant in full, in which case, the
Holder shall surrender this Warrant to the Company within three (3) Trading
Days of the date the Holder delivers an assignment form to the Company
assigning this Warrant full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
b) New Warrants. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in
which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall execute
and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice. All
Warrants issued on transfers or exchanges shall be dated the initial
issuance date set forth on the first page of this Warrant and shall be
identical with this Warrant except as to the number of Warrant Shares
issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual
notice to the contrary.
Section 5. Miscellaneous.
a) No Rights as Stockholder Until Exercise. This Warrant does not entitle
the Holder to any voting rights, dividends or other rights as a stockholder of
the Company prior to the exercise hereof as set forth in Section 2(d)(i), except
as expressly set forth in Section 3.
12
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then, such action may be taken or such right may be
exercised on the next succeeding Business Day.
d) Authorized Shares.
The Company covenants that, during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock
a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary Warrant
Shares upon the exercise of the purchase rights under this Warrant. The
Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation
of any applicable law or regulation, or of any requirements of the Trading
Market upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of the
purchase rights represented by this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges created
by the Company in respect of the issue thereof (other than taxes in respect
of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking
of all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment. Without
limiting the generality of the foregoing, the Company will (i) not increase
the par value of any Warrant Shares above the amount payable therefor upon
such exercise immediately prior to such increase in par value, (ii) take
13
all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof, as
may be, necessary to enable the Company to perform its obligations under
this Warrant.
Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any
public regulatory body or bodies having jurisdiction thereof.
e) Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflict of laws thereof.
Each party agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions contemplated by any of the
Transaction Documents (whether brought against a party hereto or its
respective Affiliates, directors, officers, shareholders, employees or
agents) shall be commenced in the state and federal courts sitting in the
City of New York, Borough of Manhattan (the "New York Courts"). Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the
jurisdiction of such New York Courts, or such New York Courts are improper
or inconvenient venue for such proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under
this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by applicable law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or relating
to this Warrant or the transactions contemplated hereby. If any party shall
commence an action or proceeding to enforce any provisions of this Warrant,
then the prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorneys' fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such action
or proceeding.
f) Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, and the
Holder does not utilize cashless exercise, will have restrictions upon
resale imposed by state and federal securities laws.
14
g) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice the Holder's rights,
powers or remedies. Without limiting any other provision of this Warrant or
the Purchase Agreement, if the Company willfully and knowingly fails to
comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to the Holder such amounts as
shall be sufficient to cover any costs and expenses including, but not
limited to, reasonable attorneys' fees, including those of appellate
proceedings, incurred by the Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
h) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase
Agreement.
i) Limitation of Liability. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of
the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and
hereby agrees to waive and not to assert the defense in any action for
specific performance that a remedy at law would be adequate.
k) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
Company and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder from time
to time of this Warrant and shall be enforceable by the Holder or holder of
Warrant Shares.
l) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Holder.
m) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this Warrant.
15
n) Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
********************
(Signature Page Follows)
16
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized as of the date first above indicated.
CEL-SCI CORPORATION
By:
-----------------------------
Name:
Title:
17
NOTICE OF EXERCISE
TO: CEL-SCI CORPORATION
(1) The undersigned hereby elects to purchase ________ Warrant Shares of
the Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] if permitted, the cancellation of such number of Warrant
Shares as is necessary, in accordance with the formula set
forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in
subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in
such other name as is specified below:
-------------------------------
The Warrant Shares shall be delivered to the following DWAC Account Number:
-------------------------------
-------------------------------
-------------------------------
[SIGNATURE OF HOLDER]
Name of Investing Entity:
----------------------------------------------------
Signature of Authorized Signatory of Investing Entity:
-----------------------
Name of Authorized Signatory:
------------------------------------------------
Title of Authorized Signatory:
-----------------------------------------------
Date:
------------------------------------------------------------------------
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to exercise the Warrant.)
FOR VALUE RECEIVED, all of or _____ shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to:
Name:
---------------------------------
(Please Print)
Address:
---------------------------------
(Please Print)
Dated: _______________ __, ______
Holder's Signature:
------------------------------
Holder's Address:
--------------------------------
_______ Warrants
THIS CERTIFICATE IS TRANSFERABLE IN CANTON,
MA, JERSEY CITY, NJ AND COLLEGE STATION TX
Certificate Number
---------------
CEL-SCI
Empowering Immune Defense
SERIES W WARRANTS
CEL-SCI CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF COLORADO
THIS CERTIFIES THAT CUSIP 150837 219
-------------------------------
SEE REVERSE FOR CERTAIN DETAILS
or registered assigns, is the registered holders of the number of Series W Warrants ("Warrants") set forth above. Each
Warrant entitles the holders thereof to purchase from CEL-SCI Corporation, a corporation incorporated under the laws of
Colorado (the "Company"), subject to the terms and conditions set forth hereinafter and in the Warrant Agent Agreement
between the Company, Computershare Inc. ("Computershare") and Computershare Trust Company N.A. (together with
Computershare, collectively, the "Warrant Agent") dated October __, 2015 ("the Warrant Agreement"), at any time on before
5:00 P.M., Mountain time, on October 28, 2020 ("Expiration Date") fully paid and non-assessable share(s) of the Common
Stock of the Company ("Common Stock") upon presentation and surrender of this Warrant Certificate, with the completed
instructions for the registration and delivery of Common Stock, at the office of the Warrant Agent or of its successor
warrant agent or, if there be no successor warrant agent, at the corporate offices of the Company, and upon payment of the
Exercise Price (as defined in the Warrant Agreement), or if permitted, by means of cashless exercise, and any applicable
taxes paid either in cash, or by certified or official bank check, payable in lawful money of the United States of America
to the order of Computershare. Each Warrant initially entitles the holder to purchase one share of Common Stock for $0.67.
The number and kinds of securities or other property for which the Warrants are exercisable are subject to adjustment in
certain events, such as mergers, stock splits, stock dividends, reverse splits and the like, to prevent dilution. The
Company may, in its sole discretion, (i) extend the Expiration Date by
providing not less than 10 days' prior notice, or (ii) lower the Exercise Price at any time prior to the Expiration Date.
Maximillian de Clara Dated: October 28, 2015
-------------------- ------------------------
President
SEAL COUNTERSIGNED AND REGISTERED:
CEL-SCI CORPORATION COMPUTERSHARE TRUST COMPANY, N.A.
COLORADO TRANSFER AGENT AND REGISTRAR.
Geert R. Kersten By:
----------------------- ------------------------------
Chief Executive Officer AUTHORIZED SIGNATURE
EX-23
5
form8kdawsonex23oct-15.txt
EXH. 23 - H&H CONSENT
EXHIBIT 23
CONSENT OF ATTORNEYS
Reference is made to the Registration Statement of CEL-SCI Corporation,
whereby the Company proposes to sell shares of its common stock, warrants, as
well as shares of the Company's common stock issuable upon the exercise of the
warrants. Reference is also made to Exhibit 5 included as part of this 8-K
report relating to the validity of the securities proposed to be sold.
We hereby consent to the use of our opinion concerning the validity of the
securities proposed to be issued and sold.
October 22, 2015
HART & HART, LLC
/s/ William T. Hart
EX-99
6
form8kdawsonex991oct-15.txt
EXH. 99.1 - PRESS RELEASE 10-22-15
EXHIBIT 99.1
NEWS RELEASE
Contact:
Gavin de Windt
CEL-SCI Corporation
(703) 506-9460
CEL-SCI Announces Proposed Public Offering of Common Stock and Warrants
Vienna, VA, October 22, 2015 - CEL-SCI Corporation (NYSE MKT: CVM) ("CEL SCI" or
the "Company") today announced that it has commenced an offering of common stock
and warrants. The offering is subject to market conditions, and there can be no
assurance as to whether or when the offering may be completed.
Dawson James Securities, Inc. is acting as the sole placement agent for the
proposed offering on a best efforts basis.
The offering will be made by CEL-SCI pursuant to a shelf registration statement
on Form S-3 declared effective by the Securities and Exchange Commission ("SEC")
on July 8, 2014. A preliminary prospectus supplement and accompanying prospectus
related to the offering have been filed with the SEC and are available on the
SEC's website located at http://www.sec.gov. Copies of the complete preliminary
prospectus related to the offering may be obtained from Dawson James Securities,
Inc., Attention: Prospectus Department, 1 North Federal Highway, 5th Floor, Boca
Raton, FL 33432, mmaclaren@dawsonjames.com or toll free at 866.928.0928.
This press release shall not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of these securities
in any state or other jurisdiction in which such offer, solicitation, or sale
would be unlawful prior to registration or qualification under the securities
laws of such state or other jurisdiction.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this press release,
the words "intends," "believes," "anticipated," "plans" and "expects" and
similar expressions are intended to identify forward-looking statements.
Forward-looking statements include, without limitation, the Company's ability to
complete the proposed offering. Such statements are subject to risks and
uncertainties which could cause actual results to differ materially from those
projected. CEL-SCI undertakes no obligation to publicly release the result of
any revision to these forward-looking statements that may be made to reflect the
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
EX-99
7
form8kdawsonex992oct-15.txt
EXH. 99.2 - PRESS RELEASE 10-23-15
EXHIBIT 99.2
CEL-SCI Corporation
May 22, 2015
Page 2
8229 Boone Boulevard, Suite 802 COMPANY CONTACT:
Vienna, VA 22182. USA Gavin de Windt
Telephone (703) 506-9460 CEL-SCI Corporation
www.cel-sci.com (703) 506-9460
CEL-SCI PRICES PUBLIC OFFERING FOR UP TO $12 MILLION
Vienna, VA, October 23, 2015 - CEL-SCI Corporation (NYSE MKT: CVM) ("CEL SCI" or
the "Company") today announced that it has priced a best efforts offering of
common stock and warrants at a combined price of $0.67 per unit of securities
for aggregate gross proceeds of up to $12 million, prior to deducting placement
agent commissions and offering expenses. Each unit consists of one share of
common stock and one warrant to purchase one share of common stock. The common
stock and warrants will separate immediately. The warrants are immediately
exercisable, expire in five-years and have an exercise price of $0.67 per share.
This offering is expected to close on or about October 28, 2015, subject to the
satisfaction of customary closing conditions.
CEL-SCI intends to use the net proceeds of the offering for its Phase 3 clinical
trial, an ongoing Phase 1 study in HIV/HPV co-infected patients, other research
and development, and general and administrative expenses.
Dawson James Securities, Inc. is acting as the sole placement agent for the
proposed offering on a best efforts basis.
A shelf registration statement on Form S-3 declared effective by the Securities
and Exchange Commission ("SEC") on July 8, 2014, a prospectus supplement and
accompanying prospectus related to the offering have been filed with the SEC and
are available on the SEC's website located at http://www.sec.gov. The offering
may be made only by means of the prospectus supplement and accompanying
prospectus, copies of which may be obtained from Dawson James Securities, Inc.,
Attention: Prospectus Department, 1 North Federal Highway, 5th Floor, Boca
Raton, FL 33432, mmaclaren@dawsonjames.com or toll free at 866.928.0928.
This press release shall not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of these securities
in any state or other jurisdiction in which such offer, solicitation, or sale
would be unlawful prior to registration or qualification under the securities
laws of such state or other jurisdiction.
Forward-Looking Statement
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this press release,
the words "intends," "believes," "anticipated," "plans" and "expects" and
similar expressions are intended to identify forward-looking statements.
Forward-looking statements include, without limitation, the Company's ability to
complete the proposed offering. Such statements are subject to risks and
uncertainties which could cause actual results to differ materially from those
projected. CEL-SCI undertakes no obligation to publicly release the result of
any revision to these forward-looking statements that may be made to reflect the
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.