AMENDMENT AND WAIVER AGREEMENT
THIS AMENDMENT AND WAIVER
AGREEMENT (this
“Agreement”),
dated as of March 20, 2009, is entered into by and among Cleveland BioLabs,
Inc., a Delaware corporation (the “Company”) and each of
the purchasers (each, including its successors and assigns, a “Purchaser” and
collectively, the “Purchasers”) to the
Securities Purchase Agreement, dated as of February 13, 2009 (the “Purchase Agreement”).
Any defined terms used herein
and otherwise undefined shall have the same meaning ascribed to such terms in
the Purchase Agreement.
WHEREAS, the Company expects
to sell additional shares of Series D Convertible Preferred Stock (the “Series D Preferred”)
and Warrants to additional purchasers on the same terms and conditions as set
forth in the Purchase Agreement except that (1) the Conversion Price of the
Series D Preferred shall be reduced from $1.85 to $1.40, subject to further
adjustment therein and (2) the Exercise Price of the Warrants shall be reduced
from $2.60 to $1.60, subject to further adjustment therein (the “Additional Series D
Transaction”).
WHEREAS, to effect the
foregoing price reductions, immediately prior to the consummation of the
Additional Series D Transaction, the Company will issue to the Placement Agent a
common stock purchase warrant to purchase ten (10) shares of Common Stock at an
exercise price of $1.40 per share, subject to adjustment therein, on the date
hereof, which warrant shall be otherwise identical to the Warrants (such
issuance, the “Warrant
Issuance”).
WHEREAS, the Warrant Issuance
constitutes a Dilutive Issuance under Section 7(b) of the Certificate of
Designation.
WHEREAS, in connection with
the foregoing Dilutive Issuance, the Company has requested that the Purchasers
agree to certain amendments and waivers under the Transaction Documents, and the
Purchasers have agreed to such request, subject to the terms and conditions of
this Agreement.
NOW THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each Purchaser hereby agrees as follows:
1. Adjustment to Conversion
Price of Series D Preferred. Pursuant to Section 7(b) of the
Certificate of Designation, effective upon the Warrant Issuance, the Conversion
Price of the Series D Preferred shall be adjusted to be equal to $1.40 per
share, subject to further adjustment therein (the “Adjusted Conversion
Price”). This Agreement shall constitute notice thereof under
Section 7(g)(i) of the Certificate of Designation. Each Purchaser
acknowledges and agrees that that the Adjusted Conversion Price shall apply in
the Additional Series D Transaction and any subsequent issuances of the Series D
Preferred on the same terms and conditions as set forth in the Additional Series
D Transaction.
2.
Partial
Waiver of Anti-Dilution of Warrants and Adjustment to Exercise Price of
Warrants. Each
Purchaser hereby agrees to a waiver of the adjustment of the Exercise Price
pursuant to Section 3(b) of the Warrants as a result of the Warrant Issuance,
the Additional Series D Transaction and any subsequent issuances of the Warrants
on the same terms and conditions as set forth in the Additional Series D
Transaction; provided, however, effective upon the Warrant Issuance,
the Exercise Price of the Warrants shall be reduced to be equal to $1.60 per
share, subject to further adjustment therein, and the number of Warrant Shares
issuable under each Warrant shall be adjusted to be equal to the quotient of (x)
a Purchaser’s Shares multiplied by the Stated Value, divided by (y) the Adjusted
Conversion Price. This Agreement shall constitute notice
of such adjustment under Section 3(g)(i) of the
Warrants.
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3.
Extension of Offering
Period. The termination of the offering shall be extended from
March 15, 2009 until March 27, 2009, and, as such, each reference to “March 15,
2009” in the Transaction Documents shall be replaced with a reference to “March
27, 2009.”
4. Amendment to Deadline for
Stockholder Meeting. Each Purchaser hereby agrees that the
deadline for the Company to hold a meeting of its stockholders for the purpose
of obtaining Stockholder Approval and Authorized Share Approval pursuant to
Section 4.11(c) of the Purchase Agreement shall be June 26, 2009 (which period
may be reasonably extended in the case of Commission review of the Company’s
proxy statement).
5. Voting
Agreements. The definition of “Voting Agreements” in Section 1
of the Purchase Agreement shall be amended such that the Company shall not be
required to obtain Voting Agreements from Sunrise Equity Partners, LP or Sunrise
Securities Corp. so long as the Company obtains Voting Agreements from
stockholders holding at least 1,000,000 shares of Common Stock. As such, the
definition of “Voting Agreement” in Section 1.1 shall be amended and restated as
follows:
““Voting Agreements”
means each of the written agreements, in the form of Exhibit E attached
hereto, between the Company and each of (a) The Cleveland Clinic Foundation, (b)
Sunrise Equity Partners, LP, (c) Sunrise Securities Corp. and (d) all of the
executive officers and directors of the Company, which shall be as set forth on
Schedule
2.2(a)(vi) attached hereto, to vote all Common Stock over which such
Persons have voting control as of the record date for the meeting of
stockholders of the Company in favor of Stockholder Approval and Authorized
Share Approval; provided, however, the Company
shall not be required to obtain the Voting Agreements for the initial Closing
from Sunrise Equity Partners, LP, or Sunrise Securities Corp. if the aggregate
Subscription Amounts for the initial Closing are less than $2,000,000; and,
provided, further, the Company
shall not be required to obtain Voting Agreements from Sunrise Equity Partners,
LP and Sunrise Securities Corp. (regardless of the Subscription Amounts) if the
Company obtains Voting Agreements executed by stockholders of the
Company (in addition to those listed above under subsections (a) and (d))
holding no less than 1,000,000 shares of Common Stock, in the
aggregate.”
6. Other
Waivers
(a) Waiver of Participation in
Future Financing. The Purchasers hereby waive the terms of Section 4.12
of the Purchase Agreement, solely in connection with the Additional Series D
Transaction and the Warrant Issuance.
(b) Waiver of Subsequent Equity
Sales. The Purchasers hereby waive the terms of Section 4.13(a) of the
Purchase Agreement, solely in connection with the Additional Series D
Transaction and the Warrant Issuance.
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(c) Waiver of Most Favored
Nation Provision. The Purchasers hereby waive the terms of Section 4.18
of the Purchase Agreement, solely in connection with the Additional Series D
Transaction and the Warrant Issuance.
7. Representations and
Warranties of the Company. The Company hereby makes the representations
and warranties set forth below to the Purchasers that as of the date of its
execution of this Agreement:
(a) The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder. The execution and delivery of
this Agreement by the Company and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, its board
of directors or its stockholders in connection therewith other than in
connection with the Required Approvals. This Agreement has been duly
executed by the Company and, when delivered in accordance with the terms hereof
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally, (ii)
as limited by general principles of equity and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law and public
policy.
(b) The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby do not and
will not: (i) conflict with or violate any provision of the Company’s
certificate of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company, or
give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any material
agreement, credit facility, debt or other material instrument (evidencing
Company debt or otherwise) or other material understanding to which the Company
is a party or by which any property or asset of the Company is bound or
affected, or (iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company is bound or affected; except in the
case of each of clauses (ii) and (iii), such as would not have or reasonably be
expected to result in a Material Adverse Effect.
8. Representations and
Warranties of the Purchasers. Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the date of such
Purchaser’s execution of this Agreement:
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(a) Such
Purchaser is either an individual or an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization with
full right, corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder. The execution and delivery of
this Agreement and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as
applicable, on the part of such Purchaser. This Agreement has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
general principles of equity and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law and public
policy.
(b) The
execution, delivery and performance of this Agreement by such Purchaser and the
consummation by such Purchaser of the transactions contemplated thereby do not
and will not: (i) conflict with or violate, if such Purchaser is an entity, any
provision of the Purchaser’s certificate or articles of incorporation, bylaws or
other organizational or charter documents, (ii) violate, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument to which such Purchaser is a party or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which such Purchaser is subject (including federal and state securities laws
and regulations), or by which any property or asset of such Purchaser is bound
or affected; except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
transactions contemplated hereby or the authority or ability of such Purchaser
to perform its obligations under this Agreement.
9. Miscellaneous.
(a) Effect on Transaction
Documents. Except as specifically modified herein, all of the terms,
provisions and conditions of the Transaction Documents shall remain in full
force and effect and the rights and obligations of the parties with respect
thereto shall, except as specifically provided herein, be unaffected by this
Agreement and shall continue as provided in such documents and shall not be in
any way changed, modified or superseded by the terms set forth
herein.
(b) Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be delivered as set forth in the Purchase
Agreement.
(c) Construction. All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined in accordance with the provisions of
the Purchase Agreement.
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(d) Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement shall be for the sole benefit of the parties
to this Agreement and their respective successors and permitted assigns and is
not intended, nor shall be construed, to give any person or entity, other than
the parties hereto and their respective successors and permitted assigns, any
legal or equitable right, remedy or claim hereunder.
(e) Execution. This
Agreement may be executed in counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
(f) Entire
Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the matters covered hereby and supersedes all
previous written, oral or implied understandings among them with respect to such
matters.
(g) Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(h) Waiver. No
provision of this Agreement may be waived or amended except in accordance with
the terms of the Purchase Agreement.
(i) Independent Nature of
Purchasers’ Obligations and Rights. The obligations of each
Purchaser hereunder are several and not joint with the obligations of any other
Purchasers hereunder, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser hereunder. Nothing
contained herein or in any other agreement or document delivered at any closing,
and no action taken by any Purchaser pursuant hereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Purchaser shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.
SIGNATURE
PAGES TO FOLLOW
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IN WITNESS WHEREOF, the
undersigned has caused this Amendment and Waiver Agreement to be duly executed
as of the date first written above.
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CLEVELAND
BIOLABS, INC.
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By:
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/s/ Xxxxxxx Xxxxxxxx
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Name:
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Xxxxxxx
Xxxxxxxx
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Title:
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President
and Chief Executive Officer
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[AMENDMENT
AND WAIVER AGREEMENT FOR PURCHASERS]
Acknowledgement
and Confirmation
The
undersigned investor hereby acknowledges receipt of this Amendment and Waiver
Agreement and confirms its agreement to the terms thereof.
Signature: _________________________
Name of
Investor(s): _________________________
Title (if
investor is not an individual):_________________________
Dated:
March ___, 2009
[SIGNATURE
PAGES OF PURCHASERS OMITTED]
