EXHIBIT 10(ccc)
WARRANT AGENT AGREEMENT
This Agreement, dated as of May 28, 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 20,253,164 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 $0.79 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, the Warrant terms will control.
2. Exercise Period. The Warrants may be exercised on or before May 28,
2020 (the "Expiration Date") pursuant to Section 6 hereof.
3. Execution of Warrant Certificates. Warrant Certificates shall be in
registered form only and shall be substantially in the form set forth
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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.
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
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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.
(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
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"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
determine the number of Common Stock issuable in connection with
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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.
10. Reservation of Shares. For the purpose of enabling the Company to
satisfy all obligations to issue Shares upon exercise of the Warrants,
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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
exercised immediately prior to the record date with respect to
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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
issueable 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
Sections 4.8 and 4.9 has occurred or are scheduled or
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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 the Warrant Agent may treat the
registered Warrant Holder in respect of any Warrant as the
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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
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Company for written 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
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the Warrants or other securities of the Company or become
pecuniarily 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
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a member 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
13
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
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.
14
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
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
15
charges, but not including reimbursable expenses, during the twelve
(12) months immediately preceding the event for which recovery from
Warrant Agent is being sought.
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.
16
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.
17
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: /s/ Patricia B. Prichep
---------------------------------------
Name: Patricia B. Prichep
Title: Senior Vice President of Operations
COMPUTERSHARE INC.
By: /s/ Michael Legregin
---------------------------------------
Name: Michael Legregin
Title: Corporate Actions Manager
COMPUTERSHARE TRUST COMPANY N.A.
By: /s/ Michael Legregin
---------------------------------------
Name: Michael Legregin
Title: Corporate Actions Manager
18
EXHIBIT A
EXHIBIT A
CEL-SCI CORPORATION
SERIES V WARRANTS
TERMS
Initial Exercise Date: May 28, 2015
THIS SERIES V 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 May 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.
1
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"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
2
Common Stock are then reported in the "Pink Sheets" published by Pink OTC
Markets, Inc. (or a similar organization or agency succeeding to its functions
of reporting prices), the most recent bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the
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 $0.79, 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
3
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:
(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
4
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.
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,
5
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 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
shares of Common Stock, by way of return of capital or otherwise
8
(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,
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
9
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 the Holder and approved by the Holder
(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), and which is
reasonably satisfactory in form and substance to the Holder. 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.
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
12
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
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
13
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.
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
14
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.
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.
********************
15
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 V WARRANTS
CEL-SCI CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF COLORADO
THIS CERTIFIES THAT CUSIP 150837 193
-------------------------------
SEE REVERSE FOR CERTAIN DETAILS
or registered assigns, is the registered holders of the number of Series V 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 May 28, 2015 ("the Warrant Agreement"), at any time on before
5:00 P.M., Mountain time, on May 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 $0.79. 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: May 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