EXHIBIT 4(q)
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
COMMON STOCK PURCHASE WARRANT
SERIES KK
CEL-SCI CORPORATION
Warrant Shares: [_______ Initial Exercise Date: ________ [___, 2017
Issue Date: May [___, 2017
THIS 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 six (6) months
following the date hereof (the "Initial Exercise Date") and on or prior to
the close of business on the five (5) year anniversary of the Initial
Exercise Date (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. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the "Purchase Agreement"), dated April 30, 2017, among
the Company and the purchasers signatory thereto.
Section 2. Exercise.
a) Exercise of 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 the Transfer Agent
(or such other office or agency of the Company as it may designate by
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notice in writing to the registered Holder at the address of the
Holder appearing on the books of the Company), as applicable, of a
duly executed facsimile copy or PDF copy submitted by electronic (or
e-mail attachment) of the Notice of Exercise in the form annexed
hereto (the "Notice of Exercise"). Within the earlier of (i) three (3)
Trading Days and (ii) the number of Trading Days comprising the
Standard Settlement Period (as defined in Section 2(d)(i) herein)
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 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 $0.1214, subject to adjustment
hereunder (the "Exercise Price").
c) Cashless Exercise. If at any time after the six-month
anniversary of the Issuance Date, there is no effective registration
statement registering, or no current prospectus available for, the
resale of the Warrant Shares by the Holder, then this Warrant may also
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) = as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such
Notice of Exercise is (1) both executed and delivered pursuant
to Section 2(a) hereof on a day that is not a Trading Day or
(2) both executed and delivered pursuant to Section 2(a) hereof
on a Trading Day prior to the opening of "regular trading
hours" (as defined in Rule 600(b)(64) of Regulation NMS
promulgated under the federal securities laws) on such Trading
Day, (ii) at the option of the Holder, either (y) the VWAP on
the Trading Day immediately preceding the date of the
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applicable Notice of Exercise or (z) the Bid Price of the
Common Stock on the principal Trading Market as reported by
Bloomberg L.P. as of the time of the Holder's execution of the
applicable Notice of Exercise if such Notice of Exercise is
executed during "regular trading hours" on a Trading Day and is
delivered within two (2) hours thereafter pursuant to Section
2(a) hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a
Trading Day and such Notice of Exercise is both executed and
delivered pursuant to Section 1(a) hereof after the close of
"regular trading hours" on such Trading Day;
(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.
If Warrant Shares are issued in such a cashless exercise, the parties
acknowledge and agree that in accordance with Section 3(a)(9) of the
Securities Act, the Warrant Shares shall take on the characteristics of the
Warrants being exercised, and the holding period of the Warrant Shares
being exercised may be tacked on to the holding period of this Warrant. The
Company agrees not to take any position contrary to this Section 2(c).
"Bid Price" 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 bid price of the Common Stock for the
time in question (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 OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the
nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common
Stock is not then listed or quoted for trading on OTCQB or OTCQX and if
prices for the Common Stock are then reported in the "Pink Sheets"
published by OTC Markets Group, 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 Purchasers of a
majority in interest of the Securities then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by
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 OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date
(or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the
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Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and
if prices for the Common Stock are then reported in the "Pink Sheets"
published by OTC Markets Group, 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 Purchasers of a
majority in interest of the Securities then outstanding and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by
the Company.
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 cause the Warrant Shares purchased hereunder to be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder's or its designee's balance account 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 the Holder or (B) the Warrant
Shares are eligible for resale by the Holder without volume or
manner-of-sale limitations pursuant to Rule 144, and otherwise by
physical delivery of a certificate, registered in the Company's
share register in the name of the Holder or its designee, for the
number of Warrant Shares to which the Holder is entitled pursuant
to such exercise to the address specified by the Holder in the
Notice of Exercise by the date that is the earlier of (i) one (1)
Trading Day and (ii) the number of Trading Days comprising the
Standard Settlement Period after the delivery to the Company of
the Notice of Exercise (such date, the "Warrant Share Delivery
Date"). Upon delivery of the Notice of Exercise, the Holder shall
be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date of delivery of the
Warrant Shares, provided that payment of the aggregate Exercise
Price (other than in the case of a cashless exercise) is received
within the earlier of (i) three (3) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period
following delivery of the Notice of Exercise. 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
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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 (5)
Trading Day after such liquidated damages begin to accrue) for
each Trading Day after such Warrant Share Delivery Date until
such Warrant Shares are delivered or Holder rescinds such
exercise. The Company agrees to maintain a transfer agent that is
a participant in the FAST program so long as this Warrant remains
outstanding and exercisable. As used period, expressed in a
number of Trading Days, on the Company's primary Trading Market
with respect to the Common Stock as in effect on the date of
delivery of the Notice of 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 in
accordance with the provisions of Section 2(d)(i) above 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
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an aggregate sale price giving rise to such purchase obligation
of $10,000, under clause (A) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000.
The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In and,
upon request of the Company, evidence of the amount of such loss.
Nothing herein shall limit a Xxxxxx'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
that 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 and all fees to the Depository Trust Company
(or another established clearing corporation performing similar
functions) required for same-day electronic delivery of the
Warrant Shares.
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) Xxxxxx'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 (such Persons, "Attribution Parties")), 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
and Attribution Parties shall include the number of shares of Common
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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 or Attribution Parties 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 or
Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be
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
Attribution Parties) 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
Attribution Parties) 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 (2) 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 or Attribution Parties since
the date as of which such number of outstanding shares of Common Stock
was reported. The "Beneficial Ownership Limitation" shall be
[9.99/4.99%] of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common
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Stock issuable upon exercise of this Warrant. The Holder, upon 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 increase in the Beneficial Ownership
Limitation 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.
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,
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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 (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
9
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 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. Notwithstanding anything to
the contrary, in the event of a Fundamental Transaction, the Company
or any Successor Entity (as defined below) shall, at the Holder's
option, exercisable at any time concurrently with, or within 30 days
after, the consummation of the Fundamental Transaction, purchase this
Warrant from the Holder by paying to the Holder an amount of cash
equal to the Black Scholes Value of the remaining unexercised portion
of this Warrant on the date of the consummation of such Fundamental
Transaction. "Black Scholes Value" means the value of this Warrant
based on the Black and Scholes Option Pricing Model obtained from the
"OV" function on Bloomberg, L.P. ("Bloomberg") determined as of the
day of consummation of the applicable Fundamental Transaction for
pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time
between the date of the public announcement of the applicable
Fundamental Transaction and the Termination Date, (B) an expected
volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg as of the Trading Day
immediately following the public announcement of the applicable
Fundamental Transaction, (C) the underlying price per share used in
such calculation shall be the sum of the price per share being offered
in cash, if any, plus the value of any non-cash consideration, if any,
being offered in such Fundamental Transaction and (D) a remaining
option time equal to the time between the date of the public
announcement of the applicable Fundamental Transaction and the
Termination Date. The payment of the Black Scholes Value will be made
by wire transfer of immediately available funds within five Business
Days of the Holder's election (or, if later, on the effective date of
the 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,
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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 (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 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.
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 deliver to the Holder by facsimile or
email 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 Xxxxxx. 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
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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
delivered by facsimile or email to the Holder at its last
facsimile number or email 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 deliver such notice
or any defect therein or in the delivery thereof shall not affect
the validity of the corporate action required to be specified in
such notice. To the extent that any notice provided in this
Warrant 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.
Section 4. Transfer of Warrant.
a) Transferability. Subject to compliance with any
applicable securities laws and the conditions set forth in
Section 4(d) hereof and to the provisions of Section 4.1 of the
Purchase Agreement, 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
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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 in 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 Issue Date 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.
d) Transfer Restrictions. If, at the time of the surrender
of this Warrant in connection with any transfer of this Warrant,
the transfer of this Warrant shall not be either (i) registered
pursuant to an effective registration statement under the
Securities Act and under applicable state securities or blue sky
laws or (ii) eligible for resale without volume or manner-of-sale
restrictions or current public information requirements pursuant
to Rule 144, the Company may require, as a condition of allowing
such transfer, that the Holder or transferee of this Warrant, as
the case may be, comply with the provisions of Section 5.7 of the
Purchase Agreement.
e) Representation by the Holder. The Holder, by the
acceptance hereof, represents and warrants that it is acquiring
this Warrant and, upon any exercise hereof, will acquire the
Warrant Shares issuable upon such exercise, for its own account
and not with a view to or for distributing or reselling such
Warrant Shares or any part thereof in violation of the Securities
Act or any applicable state securities law, except pursuant to
sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
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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 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 issuing 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
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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 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
determined in accordance with the provisions of the Purchase
Agreement.
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 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.
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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.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to
be executed by its officer thereunto duly authorized as of the
date first above indicated.
CEL-SCI CORPORATION
By:_________________________
Name:
Title:
17
NOTICE OF EXERCISE
TO: CEL-SCI CORPORATION
(1)___The undersigned hereby elects to purchase ________ Warrant Shares of
the Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together with
all applicable transfer taxes, if any.
(2)___Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] if permitted the cancellation of such number of Warrant
Shares as is necessary, in accordance with the formula set
forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in
subsection 2(c).
(3)___Please issue said Warrant Shares in the name of the undersigned or in
such other name as is specified below:
--------------------------------------
The Warrant Shares shall be delivered to the following DWAC Account Number:
-------------------------------------------
-------------------------------------------
-------------------------------------------
(4) Accredited Investor. The undersigned is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity: __________________________________________________
Signature of Authorized Signatory of Investing Entity: _____________________
Name of Authorized Signatory: ______________________________________________
Title of Authorized Signatory: _____________________________________________
Date: ______________________________________________________________________
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EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
Name:
---------------------------------
(Please Print)
Address:
---------------------------------
(Please Print)
Phone Number:
---------------------------------
Email Address:
---------------------------------
Dated: _______________ __, ______
Xxxxxx's Signature:
Holder's Address:
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