EXHIBIT 1.1
PLACEMENT AGENCY AGREEMENT
Xxxxxx Xxxxx Securities, Inc.
0 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
October 22, 2015
Ladies and Gentlemen:
This letter (this "Agreement") constitutes the agreement between Cel-Sci
Corporation, a Colorado corporation (the "Company") and Xxxxxx Xxxxx Securities,
Inc. ("Xxxxxx" or the "Placement Agent") pursuant to which Xxxxxx shall serve as
the exclusive placement agent (the "Services") for the Company, on a best
efforts basis, in connection with the proposed offer and placement (the
"Offering") by the Company of its Securities (as defined Section 3 of this
Agreement). The Company and Xxxxxx shall mutually agree to the terms of the
Offering and the Securities, and nothing in this Agreement may be construed to
suggest that Xxxxxx would have the power or authority to bind the Company or an
obligation for the Company to issue any Securities or complete the Offering. The
Company expressly acknowledges and agrees that Xxxxxx'x obligations hereunder
are on a reasonable best "efforts basis" only and that the execution of this
Agreement does not constitute a commitment by Xxxxxx to purchase the Securities
and does not ensure the successful placement of the Securities or any portion
thereof or the success of Xxxxxx placing the Securities.
1. Appointment of Xxxxxx Xxxxx Securities, Inc. as Exclusive Placement Agent.
On the basis of the representations, warranties, covenants and agreements of the
Company herein contained, and subject to all the terms and conditions of this
Agreement, the Company hereby appoints the Placement Agent as its exclusive
placement agent in connection with a distribution of its Securities to be
offered and sold by the Company pursuant to a registration statement filed under
the Securities Act of 1933, as amended (the "Securities Act") on Form S-3 (File
No. 333-196243), and Xxxxxx agrees to act as the Company's exclusive Placement
Agent. Pursuant to this appointment, the Placement Agent will solicit offers for
the purchase of or attempt to place all or part of the Securities of the Company
in the proposed Offering. Until the final closing or earlier upon termination of
this Agreement pursuant to Section 5 hereof, the Company shall not, without the
prior written consent of the Placement Agent, solicit or accept offers to
purchase the Securities other than through the Placement Agent. The Company
acknowledges that the Placement Agent will act as an agent of the Company and
use its reasonable "best efforts" to solicit offers to purchase the Securities
from the Company on the terms, and subject to the conditions, set forth in the
Prospectus (as defined below). The Placement Agent shall use commercially
reasonable efforts to assist the Company in obtaining performance by each
Purchaser whose offer to purchase Securities has been solicited by the Placement
Agent, but the Placement Agent shall not, except as otherwise provided in this
Agreement, be obligated to disclose the identity of any potential purchaser or
have any liability to the Company in the event any such purchase is not
consummated for any reason. Under no circumstances will the Placement Agent be
obligated to underwrite or purchase any Securities for its own account and, in
soliciting purchases of the Securities, the Placement Agent shall act solely as
an agent of the Company. The Services provided pursuant to this Agreement shall
be on an "agency" basis and not on a "principal" basis.
The Placement Agent will solicit offers for the purchase of the Securities in
the Offering at such times and in such amounts as the Placement Agent deems
advisable and will communicate to the Company, orally or in writing, each
reasonable offer to purchase Securities received by the Placement Agent as an
agent of the Company. The Company shall have the sole right to accept offers to
purchase Securities and may reject any such offer, in whole or in part. The
Placement Agent may retain other brokers or dealers to act as sub-agents on its
behalf in connection with the Offering and may pay any sub-agent a solicitation
fee with respect to any Securities placed by it. The Company and Placement Agent
shall negotiate the timing and terms of the Offering and acknowledge that the
Offering and the provision of Placement Agent services related to the Offering
are subject to market conditions and the receipt of all required related
clearances and approvals.
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2. Fees and Expenses.
A. Placement Agent's Fee. As compensation for services rendered, the
Company shall pay to the Placement Agent in cash by wire transfer in
immediately available funds to an account or accounts designated by the
Placement Agent an amount (the "Placement Fee") equal to eight percent (8%)
of the aggregate gross proceeds received by the Company from the sale of
the Securities, at one or more closings (each a "Closing" and the date on
which each Closing occurs, a "Closing Date").
B. Offering Expenses. The Company will be responsible for and will pay all
expenses relating to the Offering, including, without limitation, (a) all
filing fees and expenses relating to the registration of the Securities
with the Commission; (b) all FINRA Public Offering filing fees; (c) all
fees and expenses relating to the listing of the Company's common stock on
the NYSE MKT; (d) all fees, expenses and disbursements relating to the
registration or qualification of the Securities under the "blue sky"
securities laws of such states and other jurisdictions as Xxxxxx may
reasonably designate (including, without limitation, all filing and
registration fees, and the reasonable fees and disbursements of "blue sky"
counsel, which will be Xxxxxx'x counsel it being agreed that such fees and
expenses of Xxxxxx'x counsel will be limited to $25,000); (e) all fees,
expenses and disbursements relating to the registration, qualification or
exemption of the Securities under the securities laws of such foreign
jurisdictions as Xxxxxx may reasonably designate; (f) the costs of all
mailing and printing of the Offering documents; (g) transfer and/or stamp
taxes, if any, payable upon the transfer of Securities from the Company to
Investors; and (h) the fees and expenses of the Company's accountants. The
Placement Agent may deduct from the net proceeds of the Offering payable to
the Company on the Closing Date the expenses set forth herein to be paid by
the Company to the Placement Agent, provided, however, that in the event
that the Offering is terminated, the Company agrees to reimburse the
Placement Agent pursuant to Section 5 hereof.
3. Description of the Offering.
The Securities to be offered directly to various investors (each, an "Investor"
or "Purchaser" and, collectively, the "Investors" or the "Purchasers") in the
Offering shall be up to 17,910,447 shares of the Company's common stock, $0.01
par value per share (the "Common Stock") (the Common Stock being offered herein,
the "Shares"), warrants to purchase up to 17,910,447 shares of Common Stock at
an exercise price of $0.67 per whole share (the "Warrants") and the shares of
Common Stock to be issued upon exercise of the Warrants. A combination of one
share of Common Stock and a Warrant to purchase one share of Common Stock will
be sold as a unit for a purchase price of $0.67 per Unit (of which $0.01 per
Unit shall be attributed to each Warrant to purchase one share of Common Stock)
(each, a "Unit" and collectively, the "Units"). The term "Securities" shall mean
the Units, the Common Stock underlying the Units, the Warrants and the Common
Stock underlying the Warrants. If the Company shall default in its obligations
to deliver Securities to a Purchaser whose offer it has accepted, the Company
shall indemnify and hold the Placement Agent harmless against any loss, claim,
damage or expense arising from or as a result of such default by the Company
under this Agreement.
4. Delivery and Payment; Closing.
Settlement of the Securities purchased by an Investor shall be made on one or
more Closing Dates by wire transfer in federal (same day) funds, payable to the
order of the Company upon delivery of the certificates (in form and substance
satisfactory to the Placement Agent) or via electronic delivery, in each case
representing the Securities to the Placement Agent, in the manner set forth
later in this paragraph. The Securities shall be registered in such name or
names and in such authorized denominations as the Placement Agent may request in
writing two (2) full Business Days prior to the Closing Date. The Company shall
not be obligated to sell or deliver the Securities except upon tender of payment
by the Placement Agent for all of the Securities sold or via delivery via
payment for all of the Securities sold. The term "Business Day" means any day
other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions are authorized or obligated by law to close in New York, New York.
Each Closing shall occur at such place as shall be agreed upon by the Placement
Agent and the Company. In the absence of an agreement to the contrary, each
Closing shall take place at the offices of Xxxxxx Xxxxxx LLP, 000 X Xxxxxx, XX,
Xxxxx 000, Xxxxxxxxxx, XX 00000. Subject to the terms and conditions hereof, at
each Closing payment of the purchase price for the Securities sold on such
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Closing Date (net of any commissions or reimbursements payable by the Company
pursuant to this Agreement) shall be made by Federal Funds wire transfer,
against delivery of such Securities, and such Securities shall be registered in
such name or names and shall be in such denominations, as the Placement Agent
may request at least one Business Day before the time of purchase. Deliveries of
the documents with respect to the purchase of the Securities, if any, shall be
made at the offices of Xxxxxx Xxxxxx, LLP, 000 X Xxxxxx, XX, Xxxxx 000,
Xxxxxxxxxx, XX 00000 on each Closing Date. On each Closing Date, the Common
Stock and Warrants to which the Closing relates shall be delivered via The
Depository Trust Company Deposit or Withdrawal at Custodian (DWAC) system for
the accounts of the Placement Agent or through such other means as the parties
may hereafter agree. All actions taken at a Closing shall be deemed to have
occurred simultaneously.
5. Term and Termination of Agreement.
The term of this Agreement will commence upon the execution of this Agreement
and will terminate at the earlier of the final Closing of the Offering or 11:59
p.m. (New York Time) on October 30, 2015. Notwithstanding anything to the
contrary contained herein, any provision in this Agreement concerning or
relating to confidentiality, indemnification, contribution, advancement, the
Company's representations and warranties and the Company's obligations to pay
fees and reimburse expenses will survive any expiration or termination of this
Agreement. If any condition specified in Section 8 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Placement
Agent by notice to the Company at any time on or prior to a Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that those portions of this Agreement specified in Section 19
shall at all times be effective and shall survive such termination.
Notwithstanding anything to the contrary in this Agreement, in the event that
this Agreement shall not be carried out for any reason whatsoever, within the
time specified herein or any extensions thereof pursuant to the terms herein,
the Company shall be obligated to pay to the Placement Agent its actual and
accountable out-of-pocket expenses related to the transactions contemplated
herein then due and payable and upon demand the Company shall pay the full
amount thereof to the Placement Agent.
6. Permitted Acts.
Nothing in this Agreement shall be construed to limit the ability of the
Placement Agent, its officers, directors, employees, agents, associated persons
and any individual or entity "controlling," controlled by," or "under common
control" with the Placement Agent (as those terms are defined in Rule 405 under
the Securities Act) to conduct its business including without limitation the
ability to pursue, investigate, analyze, invest in, or engage in investment
banking, financial advisory or any other business relationship with any
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.
7. Representations, Warranties and Covenants of the Company.
As of the date and time of the execution of this Agreement, each Closing Date
and the Initial Sale Time, and any representation made by the Company to the
Placement Agent regardless of whether such representation was made prior to the
execution of this Agreement, the Company represents, warrants and covenants to
the Placement Agent that:
A.
i. The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No.
333-196243) including a related prospectus, for the registration
of certain securities (the "Shelf Securities"), including the
Securities, under the Securities Act, and the rules and
regulations thereunder (the "Securities Act Regulations"). The
registration statement has been declared effective under the
Securities Act by the Commission. The registration statement, as
of any time, means such registration statement as amended by any
post-effective amendments thereto to such time, including the
exhibits and any schedules thereto at such time, the documents
incorporated or deemed to be incorporated by reference therein at
such time pursuant to Item 12 of Form S-3 under the Securities
Act and the documents otherwise deemed to be a part thereof as of
such time pursuant to Rule 430B under the Securities Act
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Regulations ("Rule 430B"), is referred to herein as the
"Registration Statement;" provided, however, that the
"Registration Statement" without reference to a time means such
registration statement as amended by any post-effective
amendments thereto as of the time of the first contract of sale
for the Securities, which time shall be considered the "new
effective date" of such registration statement with respect to
the Securities within the meaning of paragraph (f)(2) of Rule
430B, including the exhibits and schedules thereto as of such
time, the documents incorporated or deemed incorporated by
reference therein at such time pursuant to Item 12 of Form S-3
under the Securities Act and the documents otherwise deemed to be
a part thereof as of such time pursuant to the Rule 430B. Any
registration statement filed pursuant to Rule 462(b) of the
Securities Act Regulations is hereinafter called the "Rule 462(b)
Registration Statement," and after such filing the term
"Registration Statement" shall include the 462(b) Registration
Statement. The prospectus covering the Shelf Securities, dated
July 8, 2014, in the form first used to confirm sales of the
Securities (or in the form first made available to the Placement
Agent by the Company to meet requests of purchasers pursuant to
Rule 173 under the Securities Act) is hereinafter referred to as
the "Base Prospectus." The Base Prospectus, as supplemented by
the prospectus supplement specifically related to the Securities
in the form first used to confirm sales of the Securities (or in
the form first made available to the Placement Agent by the
Company to meet requests of purchasers pursuant to Rule 173 under
the Securities Act), is hereinafter referred to, collectively, as
the "Prospectus," and the term "Preliminary Prospectus" means any
preliminary form of the Prospectus, including any preliminary
prospectus supplement specifically related to the Securities,
filed with the Commission by the Company with the consent of the
Placement Agent.
ii. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included"
or "stated" (or other references of like import) in the
Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to include all such financial
statements and schedules and other information incorporated or
deemed incorporated by reference in the Registration Statement,
such Preliminary Prospectus or the Prospectus, as the case may
be, prior to the execution and delivery of this Agreement; and
all references in this Agreement to amendments or supplements to
the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to include the filing of any document
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations thereunder (the
"Exchange Act Regulations"), incorporated or deemed to be
incorporated by reference in the Registration Statement, such
Preliminary Prospectus or the Prospectus, as the case may be, at
or after the execution and delivery of this Agreement.
iii. The term "Disclosure Package" means (i) the Preliminary
Prospectus, as most recently amended or supplemented immediately
prior to the Initial Sale Time (as defined herein), (ii) the
Issuer Free Writing Prospectuses (as defined below), if any,
identified in Schedule I hereto, and (iii) any other Free Writing
Prospectus (as defined below) that the parties hereto shall
hereafter expressly agree to treat as part of the Disclosure
Package.
iv. The term "Issuer Free Writing Prospectus" means any issuer free
writing prospectus, as defined in Rule 433 of the Securities Act
Regulations. The term "Free Writing Prospectus" means any free
writing prospectus, as defined in Rule 405 of the Securities Act
Regulations.
B. Neither the Commission nor, to the Company's knowledge, any state
regulatory authority has issued any order preventing or suspending the use
of the Registration Statement, any Preliminary Prospectus or the Prospectus
or has instituted or, to the Company's knowledge, threatened to institute,
any proceedings with respect to such an order. The Company has complied
with each request (if any) from the Commission for additional information.
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C. The Company has the authorized capitalization as set forth in both the
Prospectus and the Disclosure Package; the outstanding shares of capital
stock of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable. All of the outstanding shares of capital
stock, partnership interests and membership interests, as the case may be,
of the subsidiaries of the Company (each a "Subsidiary," collectively, the
"Subsidiaries") have been duly authorized and are validly issued, fully
paid and non-assessable securities thereof and, except as disclosed in the
both the Prospectus and the Disclosure Package, all of the outstanding
shares of capital stock, partnership interests or membership interests, as
the case may be, of the Subsidiaries are directly or indirectly owned of
record and beneficially by the Company; except as disclosed in both the
Prospectus and the Disclosure Package, there are no outstanding (i)
securities or obligations of the Company or any of the Subsidiaries
convertible into or exchangeable for any capital stock of the Company or
any such Subsidiary, (ii) warrants, rights or options to subscribe for or
purchase from the Company or any such Subsidiary any such capital stock or
any such convertible or exchangeable securities or obligations, or (iii)
obligations of the Company or any such Subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
D. Each of the Company and the Subsidiaries (all of which are set forth in
the Disclosure Package) has been duly incorporated, formed or organized,
and is validly existing as a corporation, general or limited partnership or
limited liability company, in good standing under the laws of its
respective jurisdiction of incorporation, formation or organization, with
full power and authority to own its respective properties and to conduct
its respective businesses as described in each of the Registration
Statement, the Prospectus and the Disclosure Package, and, in the case of
the Company, to execute and deliver this Agreement and to consummate the
transactions contemplated herein.
E. The Company and all of the Subsidiaries are duly qualified or licensed
and are in good standing in each jurisdiction in which they conduct their
respective businesses or in which they own or lease real property or
otherwise maintain an office and in which the failure, individually or in
the aggregate, to be so qualified or licensed could have a material adverse
effect on the assets, business, operations, earnings, prospects, properties
or condition (financial or otherwise), present or prospective, of the
Company and the Subsidiaries taken as a whole, (any such effect or change,
where the context so requires, is hereinafter called a "Material Adverse
Effect" or "Material Adverse Change"); except as disclosed in both the
Prospectus and the Disclosure Package, no Subsidiary is prohibited or
restricted, directly or indirectly, from paying dividends to the Company,
or from making any other distribution with respect to such Subsidiary's
capital stock or from repaying to the Company or any other Subsidiary any
amounts which may from time to time become due under any loans or advances
to such Subsidiary from the Company or such other Subsidiary, or from
transferring any such Subsidiary's property or assets to the Company or to
any other Subsidiary; other than as disclosed in both the Prospectus and
the Disclosure Package, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or
any ownership interest in any partnership, joint venture or other
association.
F. The Company and the Subsidiaries are in compliance in all material
respects with all applicable laws, rules, regulations, orders, decrees and
judgments, including those relating to transactions with affiliates.
G. Neither the Company nor any Subsidiary is in breach of or in default
under (nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), (i) its respective
charter, bylaws, agreement of limited partnership, operating agreement or
other similar organizational documents (the "organizational documents"),
(ii) the performance or observance of any obligation, agreement, covenant
or condition contained in any license, indenture, mortgage, deed of trust,
loan or credit agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them or their
respective properties is bound, or (iii) any federal, state, local or
foreign law, regulation or rule, or any decree, judgment, permit or order
(each, a "Law") applicable to the Company, except, in the case of clauses
(ii) and (iii) above, for such breaches or defaults which could not,
individually or in the aggregate, have a Material Adverse Effect.
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H. The execution, delivery and performance of this Agreement, and
consummation of the transactions contemplated herein will not (i) conflict
with, or result in any breach of, or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would
constitute a breach of, or default under), (A) any provision of the
organizational documents of the Company or any Subsidiary, or (B) any
provision of any license, indenture, mortgage, deed of trust, loan or
credit agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule, or any decree, judgment or order
applicable to the Company or any Subsidiary, except, in the case of clause
(B) above, for such breaches or defaults which could not, individually or
in the aggregate, have a Material Adverse Effect; or (ii) result in the
creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or any Subsidiary.
I. This Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and by general equitable principles,
and except to the extent that the indemnification and contribution
provisions of Section 9 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof.
J. No approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
Company's execution, delivery and performance of this Agreement, its
consummation of the transactions contemplated herein, and its sale and
delivery of the Securities, other than (i) such as have been obtained, or
will have been obtained at the Closing Date under the Securities Act and
the Exchange Act, (ii) such approvals as have been obtained in connection
with the approval of the quotation of the Shares and Warrant Shares on the
NYSE MKT and (iii) any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Securities are being
offered by the Placement Agent.
K. Each of the Company and the Subsidiaries has all necessary licenses,
authorizations, clearances, registrations, exemptions, consents and
approvals ("Permits") and has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and has obtained
all necessary Permits from other persons, required in order to conduct
their respective businesses as described in both the Prospectus and the
Disclosure Package, except to the extent that any failure to have any such
Permits, to make any such filings or to obtain any such authorizations,
consents or approvals could not, individually or in the aggregate, have a
Material Adverse Effect; except as described in both the Prospectus and the
Disclosure Package, neither the Company nor any of the Subsidiaries is
required by any applicable law to obtain accreditation or certification
from any governmental agency or authority in order to provide the products
and services which it currently provides or which it proposes to provide as
set forth in both the Prospectus and the Disclosure Package; neither the
Company nor any of the Subsidiaries is in violation of, in default under,
or has received any notice regarding a possible violation, default or
revocation of any such Permit or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries the effect of which could result in a
Material Adverse Change; and no such Permit contains a materially
burdensome restriction that is not adequately disclosed in both the
Prospectus and the Disclosure Package.
L. Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the Securities Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated or threatened by the Commission; and the Company has complied
with any request on the part of the Commission for additional information.
M. Any Preliminary Prospectus when filed with the Commission, and the
Registration Statement as of each effective date and as of the date hereof,
complied or will comply, and the Prospectus and any further amendments or
supplements to the Registration Statement, any Preliminary Prospectus or
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the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, comply, in all material respects, with the
requirements of the Securities Act and the Securities Act Regulations; and
the documents incorporated by reference in the Registration Statement, any
Preliminary Prospectus or the Prospectus complied, and any further
documents so incorporated will comply, when filed with the Commission, in
all material respects to the requirements of the Exchange Act and Exchange
Act Regulations.
N. The Registration Statement, as of its effective date and as of the date
hereof, did not, does not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Preliminary Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date, the date
hereof and on the Closing Date contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in or omitted from
the Registration Statement, the Preliminary Prospectus or the Prospectus in
reliance upon and in conformity with the information concerning the
Placement Agent and furnished in writing by the Placement Agent to the
Company expressly for use therein; and the documents incorporated by
reference in the Registration Statement, any Preliminary Prospectus or the
Prospectus did not, and any further documents filed and incorporated by
reference therein will not, as of the applicable filing date, contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
O. As of 4:30 p.m. (Eastern time) on the date of this Agreement (the
"Initial Sale Time"), the Disclosure Package did not, and at the time of
each sale of Securities on the Closing Date, the Disclosure Package will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; as
of its issue date or date of first use and at all subsequent times through
the Initial Sale Time, each Issuer Free Writing Prospectus, if any, did
not, and at the time of each sale of Securities and as of the Closing Date,
each such Issuer Free Writing Prospectus will not, contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no warranty or representation with respect to any statement
contained in or omitted from the Disclosure Package in reliance upon and in
conformity with the information concerning the Placement Agent and
furnished in writing through the Placement Agent to the Company expressly
for use therein.
P. Each Issuer Free Writing Prospectus, if any, as of its issue date and at
all subsequent times through the completion of the public offer and sale of
the Securities did not, does not, and will not include any information that
conflicted, conflicts or will conflict with the information contained in
the Registration Statement, including any document incorporated by
reference therein that has not been superceded or modified.
Q. The Company is not an "ineligible issuer" in connection with the
offering pursuant to Rules 164, 405 and 433 under the Securities Act and is
eligible to use Free Writing Prospectuses in connection with this offering
pursuant to Rules 164 and 433 under the Securities Act; any Free Writing
Prospectus that the Company is required to file pursuant to Rule 433(d)
under the Securities Act Regulations has been, or will be, filed with the
Commission in accordance with the requirements of the Securities Act and
the Securities Act Regulations; and each Free Writing Prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d) under
the Securities Act Regulations or that was prepared by or on behalf of or
used by the Company complies or will comply in all material respects with
the requirements of the Securities Act and the Securities Act Regulations.
R. Except for the Issuer Free Writing Prospectuses identified in Schedule I
hereto, and any electronic road show relating to the public offering of
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Securities contemplated herein, the Company has not prepared, used or
referred to, and will not, without the prior consent of the Placement
Agent, prepare, use or refer to, any Free Writing Prospectus.
S. Any Preliminary Prospectus, the Prospectus and any Issuer Free Writing
Prospectus (to the extent any such Issuer Free Writing Prospectus was
required to be filed with the Commission) delivered to the Placement Agent
for use in connection with the public offering of the Securities
contemplated herein have been and will be identical to the versions of such
documents transmitted to the Commission for filing via the Electronic Data
Gathering Analysis and Retrieval System ("XXXXX"), except to the extent
permitted by Regulation S-T.
T. Except as otherwise disclosed in both the Prospectus and the Disclosure
Package, there are no actions, suits, proceedings, inquiries or
investigations pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary or any of their respective officers
and directors or to which the properties, assets or rights of any such
entity are subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority, arbitral panel or agency, which could result in a judgment,
decree, award or order having a Material Adverse Effect.
U. The financial statements, including the notes thereto, included in (or
incorporated by reference into) each of the Registration Statement, the
Prospectus and the Disclosure Package present fairly the consolidated
financial position of the entities to which such financial statements
relate (the "Covered Entities") as of the dates indicated and the
consolidated results of operations and changes in financial position and
cash flows of the Covered Entities for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles as applied in the United States and on a
consistent basis during the periods involved and in accordance with
Regulation S-X promulgated by the Commission; the financial statement
schedules included in (or incorporated by reference into) the Registration
Statement fairly present the information shown therein and have been
compiled on a basis consistent with the financial statements included in
each of the Registration Statement, the Prospectus and the Disclosure
Package; no other financial statements or supporting schedules are required
to be included in (or incorporated by reference into) the Registration
Statement, the Prospectus or the Disclosure Package; and no pro forma
financial information is required to be included in (or incorporated by
reference into) the Registration Statement, the Prospectus or the
Disclosure Package.
V. BDO USA, LLP, whose reports on the consolidated financial statements of
the Company and the Subsidiaries are filed with the Commission as part of
each of the Registration Statement, the Prospectus and the Disclosure
Package, or are incorporated by reference therein, and any other accounting
firm that has certified Company financial statements and delivered its
reports with respect thereto, are, and were during the periods covered by
their reports, independent public accountants as required by the Securities
Act and the Securities Act Regulations, and are registered with the Public
Company Accounting Oversight Board.
W. Subsequent to the respective dates as of which information is given in
each of the Registration Statement, the Prospectus and the Disclosure
Package, and except as may be otherwise stated in such documents, there has
not been (i) any Material Adverse Change or any development that could
reasonably be expected to result in a Material Adverse Change, whether or
not arising in the ordinary course of business, (ii) any transaction that
is material to the Company and the Subsidiaries taken as a whole,
contemplated or entered into by the Company or any of the Subsidiaries,
(iii) any obligation, contingent or otherwise, directly or indirectly
incurred by the Company or any Subsidiary that is material to the Company
and Subsidiaries taken as a whole or (iv) any dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
X. Each of the Securities conform in all material respects to the
description thereof contained in the Registration Statement, the Prospectus
8
and the Disclosure Package; this Agreement conforms in all material
respects to the description thereof contained in the Registration
Statement, the Disclosure Package and the Prospectus.
Y. Except as disclosed in both the Prospectus and the Disclosure Package,
there are no persons with registration or other similar rights to have any
equity or debt securities, including securities which are convertible into
or exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under the
Securities Act, except for those registration or similar rights which have
been waived with respect to the offering contemplated by this Agreement,
all of which registration or similar rights are fairly summarized in both
the Prospectus and the Disclosure Package.
Z. The Shares and the Warrant Shares have been duly authorized and, when
issued and duly delivered against payment therefor as contemplated by this
Agreement and/or the Warrants, will be validly issued, fully paid and
non-assessable, free and clear of any pledge, lien, encumbrance, security
interest or other claim, and the issuance and sale of the Shares and
Warrant Shares by the Company is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of
the Company or under any agreement to which the Company or any Subsidiary
is a party or otherwise. The Warrants are duly authorized and, when issued
and paid for in accordance with this Agreement, will be duly and validly
issued, fully paid and free and clear of all liens. The Company has
reserved from its duly authorized capital stock the maximum number of
shares of Common Stock issuable pursuant to the Warrants.
AA. Shares of the Company's Common Stock trade on the NYSE MKT under the
symbol "CVM"; the Company has taken all necessary actions to ensure that it
is now, and will be at all times, in compliance with all applicable
corporate governance requirements set forth in the NYSE MKT's listing
standards currently in effect, and is taking such steps as are necessary to
ensure that it will be in compliance, upon the effectiveness of such
requirements, with other applicable corporate governance requirements set
forth in the NYSE MKT's listing standards that are not currently in effect.
BB. None of the Company, the Subsidiaries, or any of their respective
directors, officers, representatives or affiliates has taken, nor will
take, directly or indirectly, any action that is designed to, or which has
constituted, or which might reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
CC. Neither the Company nor any of the Subsidiaries, nor any of their
respective affiliates, officers, directors or any beneficial owner of 5% or
more of the Company's securities, (i) is required to register as a "broker"
or "dealer" in accordance with the provisions of the Exchange Act or the
Exchange Act Regulations, or (ii) has any direct or indirect affiliation or
association with any member firm of the Financial Industry Regulatory
Authority ("FINRA") (as determined in accordance with the rules and
regulations of FINRA).
DD. Any certificate signed by any officer of the Company or any Subsidiary
delivered to the Placement Agent or to counsel for the Placement Agent
pursuant to or in connection with this Agreement shall be deemed a
representation and warranty by the Company to the Placement Agent as to the
matters covered thereby.
EE. The form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the organizational documents of the Company and
the requirements of the NYSE MKT.
FF. Each of the Company and the Subsidiaries has good and marketable title
in fee simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except
such as are disclosed in (or incorporated by reference into) both the
Prospectus and the Disclosure Package or such as do not materially and
9
adversely affect the value of such property and do not interfere with the
use made or proposed to be made of such property by the Company and the
Subsidiaries; and any real property and buildings held under lease by the
Company or any Subsidiary are held under valid, existing and enforceable
leases, with such exceptions as are disclosed in both the Prospectus and
the Disclosure Package or are not material and do not interfere with the
use made or proposed to be made of such property and buildings by the
Company or such Subsidiary.
GG. The agreements and documents described in the Registration Statement,
the Prospectus, the Disclosure Package or the documents incorporated or
deemed to be incorporated by reference therein conform to the descriptions
thereof contained therein and there are no agreements or other documents
required by the Securities Act or the Exchange Act and the applicable rules
and regulations of the Commission thereunder to be described in the
Registration Statement, the Prospectus, the Disclosure Package or the
documents incorporated or deemed to be incorporated by reference therein or
to be filed with the Commission as exhibits to the Registration Statement
that have not been so described or filed. Each agreement or other
instrument (however characterized or described) to which the Company is a
party or by which it is or may be bound or affected and (i) that is
referred to in the Registration Statement, the Prospectus, the Disclosure
Package or the documents incorporated or deemed to be incorporated by
reference therein, or (ii) is material to the Company's business, has been
duly authorized and validly executed by the Company, is in full force and
effect in all material respects and is enforceable against the Company and,
to the Company's knowledge, the other parties thereto, in accordance with
its terms, except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, (B) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and
(C) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefore may be
brought. None of such agreements or instruments has been assigned by the
Company, and neither the Company nor, to the best of the Company's
knowledge, any other party is in default thereunder and, to the best of the
Company's knowledge, no event has occurred that, with the lapse of time or
the giving of notice, or both, would constitute a default thereunder. To
the best of the Company's knowledge, performance by the Company of the
material provisions of such agreements or instruments will not result in a
violation of any existing applicable law, rule, regulation, judgment, order
or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses,
including, without limitation, those relating to environmental laws and
regulations.
HH. Based on the consolidated financial condition of the Company as of the
Closing Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Units hereunder, (i) the fair saleable value
of the Company's assets exceeds the amount that will be required to be paid
on or in respect of the Company's existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company's
assets do not constitute unreasonably small capital to carry on its
business as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of
the business conducted by the Company, consolidated and projected capital
requirements and capital availability thereof, and (iii) the current cash
flow of the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or
in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to
be payable on or in respect of its debt). The Company has no knowledge of
any facts or circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or reorganization laws
of any jurisdiction within one year from the Closing Date. The documents
incorporated or deemed to be incorporated by reference in the Registration
Statement, the Prospectus and the Disclosure Package set forth as of the
date of such reports all outstanding secured and unsecured Indebtedness of
the Company or any Subsidiary, or for which the Company or any Subsidiary
has commitments.
II. The descriptions in each of the Registration Statement, the Prospectus
and the Disclosure Package of the legal or governmental proceedings,
contracts, leases and other legal documents therein described, fairly and
accurately present the information required to be disclosed, and there are
10
no legal or governmental proceedings, contracts, leases, or other documents
of a character required to be disclosed in the Registration Statement, the
Prospectus or the Disclosure Package, or to be filed as exhibits to the
Registration Statement, which are not described or filed as required; all
agreements between the Company or any of the Subsidiaries and third parties
expressly referenced in both the Prospectus and the Disclosure Package are
legal, valid and binding obligations of the Company or one or more of the
Subsidiaries, enforceable in accordance with their respective terms, except
to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally and by general equitable principles.
JJ. No forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) included or
incorporated by reference in the Registration Statement, the Prospectus or
the Disclosure Package has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith. The statistical and
market related data included or incorporated by reference in the
Registration Statement, the Prospectus or the Disclosure Package are based
on or derived from sources that the Company believes to be reliable and
accurate, and such data agree with the sources from which they are derived.
KK. As to each product subject to the jurisdiction of the U.S. Food and
Drug Administration ("FDA") under the Federal Food, Drug and Cosmetic Act,
as amended, and the regulations thereunder ("FDCA") that is manufactured,
packaged, labeled, tested, distributed, sold, and/or marketed by the
Company or any of its Subsidiaries (each such product, a "Pharmaceutical
Product"), such Pharmaceutical Product is being manufactured, packaged,
labeled, tested, distributed, sold and/or marketed by the Company in
compliance with all applicable requirements under FDCA and similar laws,
rules and regulations relating to registration, investigational use,
premarket clearance, licensure, or application approval, good manufacturing
practices, good laboratory practices, good clinical practices, product
listing, quotas, labeling, advertising, record keeping and filing of
reports. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or
administrative or regulatory proceeding, charge, complaint, or
investigation) against the Company or any of its Subsidiaries, and none of
the Company or any of its Subsidiaries has received any notice, warning
letter or other communication from the FDA or any other governmental
entity, which (i) contests the premarket clearance, licensure,
registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling
and promotion of any Pharmaceutical Product, (ii) withdraws its approval
of, requests the recall, suspension, or seizure of, or withdraws or orders
the withdrawal of advertising or sales promotional materials relating to,
any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins
production at any facility of the Company or any of its Subsidiaries, (v)
enters or proposes to enter into a consent decree of permanent injunction
with the Company or any of its Subsidiaries, or (vi) otherwise alleges any
violation of any laws, rules or regulations by the Company or any of its
Subsidiaries. The properties, business and operations of the Company have
been and are being conducted in all material respects in accordance with
all applicable laws, rules and regulations of the FDA. The Company has not
been informed by the FDA that the FDA will prohibit the marketing, sale,
license or use in the United States of any product proposed to be
developed, produced or marketed by the Company nor has the FDA expressed
any concern as to approving or clearing for marketing any product being
developed or proposed to be developed by the Company.
LL. All preclinical and clinical studies conducted by or on behalf of the
Company or the Subsidiaries, or in which the Company or its products or
product candidates have participated were and, if still ongoing, are being
conducted in all material respects in compliance with all laws and
regulations applicable thereto in the jurisdictions in which they are being
conducted and with all laws and regulations applicable to preclinical and
clinical studies from which data will be submitted to support marketing
approval, including, without limitation, 21 C.F.R. Part 50, 54, 56, 58, and
312. The descriptions in the Registration Statement, the Prospectus and the
Disclosure Package of the results of such studies are accurate and complete
in all material respects and fairly present the data derived from such
studies, and the Company has no knowledge of any other studies the results
of which are inconsistent with or otherwise call into question the results
described or referred to in the Registration Statement, the Prospectus and
the Disclosure Package or the results of which are referred to in the
Registration Statement, the Prospectus and the Disclosure Package. Except
11
as disclosed in the Registration Statement, the Prospectus and the
Disclosure Package, the Company has not received any written notices or
statements from the FDA, the European Medicines Agency ("EMEA") or any
other governmental agency or authority imposing, requiring, requesting or
suggesting a clinical hold, termination, suspension or material
modification for or of any proposed, ongoing, or completed clinical or
preclinical studies conducted or proposed to be conducted by or on behalf
of the Company or its Subsidiaries.
MM. The Company and its Subsidiaries are, and at all times have been, in
compliance in all material respects with all applicable Health Care Laws
(as defined below), and have not engaged in activities which are, as
applicable, cause for false claims liability, civil penalties, or mandatory
or permissive exclusion from Medicare, Medicaid, or any other state health
care program or federal health care program. For purposes of this
Agreement, "Health Care Laws" means: (i) the FDCA, the Public Health
Service Act and the regulations promulgated thereunder; (ii) all applicable
federal, state, local and all applicable foreign health care related fraud
and abuse laws, including, without limitation, the U.S. Anti-Kickback
Statute (42 U.S.C. Section 1320a-7b(b)), the U.S. Physician Payment
Sunshine Act (42 U.S.C. ss. 1320a-7h), the U.S. Civil False Claims Act (31
U.S.C. Section 3729 et seq.), the criminal False Claims Law (42 U.S.C. ss.
1320a-7b(a)), all criminal laws relating to health care fraud and abuse,
including but not limited to 18 U.S.C. Sections 286 and 287, and the health
care fraud criminal provisions under the U.S. Health Insurance Portability
and Accountability Act of 1996 ("HIPAA") (42 U.S.C. Section 1320d et seq.),
the exclusion laws (42 U.S.C. ss. 1320a-7), the civil monetary penalties
law (42 U.S.C. ss. 1320a-7a), HIPAA, as amended by the Health Information
Technology for Economic and Clinical Health Act (42 U.S.C. Section 17921 et
seq.), and the regulations promulgated pursuant to such statutes; (iii)
Medicare (Title XVIII of the Social Security Act); (iv) Medicaid (Title XIX
of the Social Security Act); and (v) any and all other applicable health
care laws and regulations. None of the Company or any of its Subsidiaries
has received notice of any claim, action, suit, proceeding, hearing,
enforcement, audit, investigation, arbitration or other action from any
court or arbitrator or governmental or regulatory authority or third party
alleging that any product operation or activity is in material violation of
any Health Care Laws, and, to the Company's knowledge, no such claim,
action, suit, proceeding, hearing, enforcement, audit, investigation,
arbitration or other action is threatened. None of the Company or any of
its Subsidiaries is a party to or has any ongoing reporting obligations
pursuant to any corporate integrity agreements, deferred prosecution
agreements, monitoring agreements, consent decrees, settlement orders,
plans of correction or similar agreements with or imposed by any
governmental or regulatory authority. Additionally, neither the Company,
nor any of its respective employees, officers or directors has been
excluded, suspended or debarred from participation in any U.S. federal
health care program or human clinical research or, to the knowledge of the
Company, is subject to a governmental inquiry, investigation, proceeding,
or other similar action that could reasonably be expected to result in
debarment, suspension, or exclusion.
NN. The Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service
marks, trade names, trade secrets, inventions, know-how, copyrights,
licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective
businesses as described in the Registration Statement, the Prospectus and
the Disclosure Package, and which the failure to so have could have a
Material Adverse Effect (collectively, the "Intellectual Property Rights").
None of, and neither the Company nor any Subsidiary has received a notice
(written or otherwise) that any of, the Intellectual Property Rights has
expired, terminated or been abandoned, or is expected to expire or
terminate or be abandoned, within two (2) years from the date of this
Agreement. Neither the Company nor any Subsidiary has received, since the
date of the latest audited financial statements included within or
incorporated by reference into the Registration Statement, the Prospectus
and the Disclosure Package, a written notice of a claim or otherwise has
any knowledge that the Intellectual Property Rights violate or infringe
upon the rights of any person, and the Company is unaware of any facts that
could form a reasonable basis for any such action, suit, proceeding or
claim. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement or
misappropriation by another person of any of the Intellectual Property
Rights, and the Company is unaware of any facts that could form a
reasonable basis for any such action, suit, proceeding or claim. The
product candidates described in the Registration Statement, the Prospectus
and the Disclosure Package as under development by the Company fall within
the scope of the claims of one or more patents owned by the Company. To the
12
Company's knowledge, it has not infringed or misappropriated the
Intellectual Property Rights of any third parties, which infringement or
misappropriation would, if the subject of an unfavorable decision, ruling
or finding, have a Material Adverse Effect. The Company and its
Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of all of their Intellectual Property
Rights, except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
OO. The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the Exchange
Act), which (i) are designed to ensure that material information relating
to the Company, including its consolidated subsidiaries, is made known to
the Company's principal executive officer and its principal financial
officer by others within those entities, particularly during the periods in
which the periodic reports required under the Exchange Act are being
prepared, (ii) have been evaluated for effectiveness as of the end of the
last fiscal period covered by the Registration Statement, and (iii) are
effective in all material respects to perform the functions for which they
were established; and the Company is not aware of (A) any significant
deficiency or material weakness in the design or operation of its internal
controls over financial reporting, or (B) any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Company's internal control over financial
reporting. Since the most recent evaluation of the Company's disclosure
controls and procedures described above, there have been no significant
changes in internal control over financial reporting or in other factors
that could significantly affect internal control over financial reporting.
PP. The Company and each of the Subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; and (v) the interactive data in eXtensible Business Reporting
Language included or incorporated by reference in the Registration
Statement is accurate. The interactive data in eXtensbile Business
Reporting Language included or incorporated by reference in the
Registration Statement fairly presents the information called for in all
material respects and has been prepared in accordance with the Commission's
rules and guidelines applicable thereto.
QQ. Each of the Company and the Subsidiaries has filed on a timely basis
all necessary federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof and have paid all
taxes shown as due thereon; and no tax deficiency has been asserted against
any such entity, nor does any such entity know of any tax deficiency that
is likely to be asserted against any such entity that, if determined
adversely to any such entity, could have a Material Adverse Effect; all tax
liabilities are adequately provided for on the respective books of such
entities.
RR. Each of the Company and the Subsidiaries maintains insurance (issued by
insurers of recognized financial responsibility) of the types and in the
amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in
similar businesses, including, but not limited to, insurance covering real
and personal property owned or leased by the Company and the Subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and
effect.
SS. Neither the Company nor any of the Subsidiaries is in violation of, or
has received notice of any violation with respect to, any applicable
environmental, safety or similar law applicable to the business of the
Company or any of the Subsidiaries; the Company and the Subsidiaries have
received all permits, licenses or other approvals required of them under
applicable federal and state occupational safety and health and
environmental laws and regulations to conduct their respective businesses,
and the Company and the Subsidiaries are in compliance with all terms and
13
conditions of any such permit, license or approval, except any such
violation of law or regulation, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals which could not,
individually or in the aggregate, result in a Material Adverse Change.
TT. Neither the Company nor any Subsidiary is in violation of or has
received notice of any violation with respect to any federal or state law
relating to discrimination in the hiring, promotion or pay of employees,
nor any applicable federal or state wages and hours law, the violation of
any of which could have a Material Adverse Effect.
UU. The Company and each of the Subsidiaries are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or any of the
Subsidiaries would have any liability; the Company and each of the
Subsidiaries have not incurred and do not expect to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) Section 412 or 4971 of the Internal Revenue Code
of 1986, as amended, including the regulations and published
interpretations thereunder ("Code"); and each "pension plan" for which the
Company and each of its Subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
VV. Except as otherwise disclosed in both the Prospectus and the Disclosure
Package, there are no outstanding loans, extensions of credit or advances
or guarantees of indebtedness by the Company or any of the Subsidiaries to
or for the benefit of any of the officers or directors of the Company or
any of the Subsidiaries or any of the members of the families of any of
them.
WW. Neither the Company nor any of the Subsidiaries nor, to the knowledge
of the Company, any employee or agent of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or of any
Subsidiary or received or retained any funds in violation of any law, rule
or regulation, or of a character required to be disclosed in the Prospectus
or the Disclosure Package.
XX. All securities issued by the Company, any of the Subsidiaries or any
trusts established by the Company or any Subsidiary, have been or will be
issued and sold in compliance with (i) all applicable federal and state
securities laws, (ii) the laws of the applicable jurisdiction of
incorporation of the issuing entity and, (iii) to the extent applicable to
the issuing entity, the requirements of the NYSE MKT.
YY. The Company and its Subsidiaries are, and at all times prior were, (i)
in compliance with any and all applicable federal, state, local and foreign
laws, regulations, ordinances, rules, orders, judgments, decrees, permits
or other legal requirements relating to the protection of human health and
safety, the environment, natural resources, petroleum or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"),
which compliance includes obtaining, maintaining and complying with all
permits and authorizations and approvals required by Environmental Laws to
conduct their respective businesses and (ii) have not received notice of
nor do they otherwise have knowledge of any actual or potential liability
for the investigation or remediation of any disposal or release of
petroleum, hazardous or toxic substances or wastes, pollutants or
contaminants, except in the case of clause (i) or (ii) where such
non-compliance with or liability under Environmental Laws could not,
individually or in the aggregate, have a Material Adverse Effect; and
neither the Company nor any of its Subsidiaries has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, or any other
similar Environmental Law, except with respect to any matters that could
not, individually or in the aggregate, have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries (A) is a party to any
proceeding under Environmental Laws to which a governmental authority is
also a party, other than such proceedings regarding which it is believed no
monetary penalties of $100,000 or more will be imposed, or (B) anticipates
making material capital expenditures relating to Environmental Laws.
14
ZZ. In connection with this offering, the Company has not offered and will
not offer its Common Stock or any other securities convertible into, or
exchangeable or exercisable for, Common Stock in a manner that violates the
Securities Act; and the Company has not distributed and will not distribute
any offering materials in connection with the offer and sale of the Shares
except for any Preliminary Prospectus, the Prospectus, any Issuer Free
Writing Prospectus or the Registration Statement.
AAA. The Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated.
BBB. No relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of the
Subsidiaries on the other hand, that is required by the Securities Act or
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, as the case may be, to be described in the Registration
Statement, the Prospectus, the Disclosure Package or the document
incorporated or deemed to be incorporated by reference therein, which is
not so described.
CCC. Neither the Company nor any of the Subsidiaries is or, after giving
effect to the offering and sale of the Shares, will be, an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act").
DDD. There are no existing or, to the knowledge of the Company, threatened
labor disputes with the employees of the Company or any of the Subsidiaries
that could have, individually or in the aggregate, a Material Adverse
Effect.
EEE. The Company, the Subsidiaries and any of the officers and directors of
the Company and the Subsidiaries, in their capacities as such, are, and on
the Closing Date will be, in compliance in all material respects with the
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated thereunder.
FFF. The Company (i) complies with the Privacy Statements (as defined
below) as applicable to any given set of personal information collected by
the Company from Individuals (as defined below), (ii) complies in all
material respects with all applicable federal, state, local and foreign
laws and regulations regarding the collection, retention, use, transfer or
disclosure of personal information and (iii) takes reasonable measures to
protect and maintain the confidential nature of the personal information
provided to the Company by Individuals in accordance with the terms of the
applicable Privacy Statements; to the Company's knowledge, no claims or
controversies have arisen regarding the Privacy Statements or the
implementation thereof. As used herein, "Privacy Statements" means,
collectively, any and all of the Company's privacy statements and policies
published on Company websites or product candidates or otherwise made
available by the Company regarding the collection, retention, use and
distribution of the personal information of individuals, including, without
limitation, from visitors or users of any Company websites or product
candidates ("Individuals").
GGG. Neither the Company nor any of the Subsidiaries, nor, to the knowledge
of the Company, any director, officer, agent, employee or affiliate of such
entities, is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder
(the "FCPA") , U.K. Xxxxxxx Xxx 0000, as amended, or any other applicable
anti-bribery statute or regulation, including, without limitation, making
use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property, gift, promise
to give, or authorization of the giving of anything of value to any
"foreign official" (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA, U.K. Xxxxxxx Xxx 0000, as amended, or
any other applicable anti-bribery statute or regulation, and the Company
and the Subsidiaries and, to the knowledge of the Company, their affiliates
15
have conducted their businesses in compliance with the FCPA, U.K. Xxxxxxx
Xxx 0000, as amended, or any other applicable anti-bribery statute or
regulation.
HHH. Neither the Company nor any of its Subsidiaries, nor, to the Company's
knowledge, any of its affiliates or any director, officer, agent or
employee of, or other person associated with or acting on behalf of, the
Company, has violated the Bank Secrecy Act, as amended, the Uniting and
Strengthening of America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of 2001 or the rules
and regulations promulgated under any such law or any successor law.
III. The operations of the Company, its Subsidiaries and, to the Company's
knowledge, its affiliates, are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the Money Laundering Control Act of 1986, as amended, any
other money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws"), except for any such
non-compliance as would not, singly or in the aggregate, result in a
Material Adverse Change, and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries, or, to the Company's knowledge, any
of its affiliates, with respect to the Money Laundering Laws is pending or,
to the Company's knowledge, threatened.
JJJ. Each of the Company and its Subsidiaries, and, to the Company's
knowledge, each of their affiliates, and any director, officer, agent or
employee of, or other person associated with or acting on behalf of the
Company, has acted at all times in compliance with applicable Export and
Import Laws (as defined below) and there are no claims, complaints,
charges, investigations or proceedings pending or expected or, to the
knowledge of the Company, threatened between the Company or any of its
Subsidiaries and any governmental authority under any Export or Import
Laws. The term "Export and Import Laws" means the Arms Export Control Act,
the International Traffic in Arms Regulations, the Export Administration
Act of 1979, as amended, the Export Administration Regulations, and all
other laws and regulations of the United States government regulating the
provision of services to non-U.S. parties or the export and import of
articles or information from and to the United States of America, and all
similar laws and regulations of any foreign government regulating the
provision of services to parties not of the foreign country or the export
and import of articles and information from and to the foreign country to
parties not of the foreign country.
KKK. Neither the Company nor any of its Subsidiaries, nor, to the knowledge
of the Company, any director, officer, employee, agent, affiliate or other
person associated with or acting on behalf of the Company or any of its
Subsidiaries is currently the subject or the target of any sanctions
administered or enforced by the U.S. government (including, without
limitation, the Office of Foreign Assets Control of the U.S. Department of
the Treasury ("OFAC") or the U.S. Department of State and including,
without limitation, the designation as a "specially designated national" or
"blocked person"), the United Nations Security Council ("UNSC"), the
European Union, Her Majesty's Treasury ("HMT") or other relevant sanctions
authority (collectively, "Sanctions"), nor is the Company, nor any of its
Subsidiaries, located, organized or resident in a country or territory that
is the subject or target of Sanctions, including, without limitation, Cuba,
Iran, North Korea, Sudan and Syria (each, a "Sanctioned Country"); and the
Company will not directly or indirectly use the proceeds of the offering of
the Shares hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity
(i) to fund or facilitate any activities of or business with any person
that, at the time of such funding or facilitation, is the subject or target
of Sanctions, (ii) to fund or facilitate any activities of or business in
any Sanctioned Country or (iii) in any other manner that will result in a
violation by any person (including any person participating in the
transaction, whether as underwriter, advisor, investor or otherwise) of
Sanctions. For the past five years, the Company and its Subsidiaries have
not knowingly engaged in and are not now knowingly engaged in any dealings
or transactions with any person that at the time of the dealing or
transaction is or was the subject or the target of Sanctions or with any
Sanctioned Country.
16
LLL. Except as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, there are no claims, payments,
arrangements, agreements or understandings relating to the payment of a
finder's, consulting or origination fee by the Company or any of its
affiliates with respect to the sale of the Securities hereunder or any
other arrangements, agreements or understandings of the Company or, to the
Company's knowledge, any of its stockholders that may affect the Placement
Agent's compensation, as determined by FINRA.
8. Conditions of the Obligations of the Placement Agent.
The obligations of the Placement Agent hereunder shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 7 hereof, in each case as of the date hereof and as of each
Closing Date as though then made, to the timely performance by each of the
Company of its covenants and other obligations hereunder on and as of such
dates, and to each of the following additional conditions:
A. Regulatory Matters.
i. Effectiveness of Registration Statement; Rule 424 Information.
The Registration Statement is effective on the date of this
Agreement, and, on the Closing Date no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto has been issued under the Securities Act, no
order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus has been issued and no proceedings
for any of those purposes have been instituted or are pending or,
to the Company's knowledge, contemplated by the Commission. The
Company has complied with each request (if any) from the
Commission for additional information. All filings with the
Commission required by Rule 424 under the Securities Act to have
been filed by the Closing Date, shall have been made within the
applicable time period prescribed for such filing by Rule 424.
ii. FINRA Clearance. On or before the Closing Date of this Agreement,
the Placement Agent shall have received clearance from FINRA as
to the amount of compensation allowable or payable to the
Placement Agent as described in the Registration Statement.
B. Company Counsel Matters.
i. On the Closing Date, the Placement Agent shall have received the
favorable opinion of Xxxx & Xxxx, LLC, outside counsel for the
Company, dated the Closing Date and addressed to the Placement
Agent, substantially in form and substance reasonably
satisfactory to the Placement Agent.
ii. On the Closing Date, the Placement Agent shall have received the
favorable opinion of Xxxxxxxxxx PC, special regulatory counsel
and from Xxxx & Xxxxxx PLLC, intellectual property counsel for
the Company, dated the Closing Date and addressed to the
Placement Agent, substantially in form and substance reasonably
satisfactory to the Placement Agent.
C. Comfort Letters.
i. Comfort Letter. At the time this Agreement is executed, Placement
Agent shall have received from BDO USA LLP a cold comfort letter
containing statements and information of the type customarily
included in accountants' comfort letters with respect to the
financial statements and certain financial information contained
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, addressed to the Placement Agent and in form and
substance satisfactory in all respects to Placement Agent and to
BDO USA LLP, dated as of the date of this Agreement.
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ii. Bring-down Comfort Letter. At the Closing Date, the Placement
Agent shall have received from BDO USA LLP a letter, dated as of
the Closing Date, to the effect that BDO USA LLP reaffirms the
statements made in the letter furnished pursuant to Section
8.C.i. except that the specified date referred to shall be a date
not more than three (3) business days prior to the Closing Date.
iii. In the event that the letters referred to above set forth any
changes in indebtedness, decreases in total assets or retained
earnings or increases in borrowings, it shall be a further
condition to the obligations of the Placement Agent that (i) such
letters shall be accompanied by a written explanation of the
Company as to the significance thereof, unless the Placement
Agent deems such explanation unnecessary, and (ii) such changes,
decreases or increases do not, in the sole judgment of the
Placement Agent, make it impractical or inadvisable to proceed
with the purchase and delivery of the Securities as contemplated
by the Registration Statement.
D. Officers' Certificates.
i. Officers' Certificate. The Company shall have furnished to the
Placement Agent a certificate, dated the Closing Date, of its
Chief Executive Officer, and its Chief Financial Officer stating
that (i) such officers have carefully examined the Registration
Statement, the Pricing Disclosure Package, any Issuer Free
Writing Prospectus and the Prospectus and, in their opinion, the
Registration Statement and each amendment thereto, as of the
Initial Sale Time and through the Closing Date did not include
any untrue statement of a material fact and did not omit to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Pricing
Disclosure Package, as of the Initial Sale Time through the
Closing Date, any Issuer Free Writing Prospectus as of its date
and as of the Closing Date, the Prospectus and each amendment or
supplement thereto, as of the respective date thereof and as of
the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading, (ii) since
the filing of the Form 10-Q for the quarter ended June 30, 2015,
no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement, the
Pricing Disclosure Package or the Prospectus, (iii) to their
knowledge after reasonable investigation, as of the Closing Date,
the representations and warranties of the Company in this
Agreement are true and correct and the Company has complied with
all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date,
and (iv) there has not been, subsequent to the date of the most
recent audited financial statements included in the Pricing
Disclosure Package, any Material Adverse Change in the financial
position or results of operations of the Company, or any change
or development that, singularly or in the aggregate, would
involve a Material Adverse Change or a prospective Material
Adverse Change, in or affecting the condition (financial or
otherwise), results of operations, business, assets or prospects
of the Company, except as set forth in the Prospectus.
ii. Secretary's Certificate. At the Closing Date the Placement Agent
shall have received a certificate of the Company signed by the
Secretary of the Company, dated the Closing Date, certifying: (i)
that each of the Company's certificate of incorporation and
bylaws is true and complete, has not been modified and is in full
force and effect; (ii) that the resolutions of the Company's
Board of Directors relating to the Offering are in full force and
effect and have not been modified; and (iii) the good standing of
the Company and its subsidiaries. The documents referred to in
such certificate shall be attached to such certificate.
E. No Material Changes. Prior to and on the Closing Date: (i) there shall
have been no Material Adverse Change or development involving a prospective
Material Adverse Change in the condition or prospects or the business
activities, financial or otherwise, of the Company from the latest dates as
18
of which such condition is set forth in the Registration Statement, the
Pricing Disclosure Package and the Prospectus; (ii) no action, suit or
proceeding, at law or in equity, shall have been pending or threatened
against the Company or any affiliates of the Company before or by any court
or federal or state commission, board or other administrative agency
wherein an unfavorable decision, ruling or finding may materially adversely
affect the business, operations, prospects or financial condition or income
of the Company, except as set forth in the Registration Statement, the
Pricing Disclosure Package and the Prospectus; (iii) no stop order shall
have been issued under the Securities Act and no proceedings therefor shall
have been initiated or threatened by the Commission; and (iv) the
Registration Statement, the Pricing Disclosure Package and the Prospectus
and any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance with the
Securities Act and the Securities Act Regulations and shall conform in all
material respects to the requirements of the Securities Act and the
Securities Act Regulations, and neither the Registration Statement, the
Pricing Disclosure Package nor the Prospectus nor any amendment or
supplement thereto shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
F. Additional Documents. At the Closing Date, Placement Agent Counsel shall
have been furnished with such documents and opinions as they may require in
order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Securities as herein contemplated shall be satisfactory in form and
substance to the Placement Agent and Placement Agent Counsel.
9. Indemnification and Contribution; Procedures.
A. Indemnification of the Placement Agent. The Company agrees to indemnify
and hold harmless the Placement Agent, its affiliates and each person
controlling such Placement Agent (within the meaning of Section 15 of the
Securities Act), and the directors, officers, agents and employees of the
Placement Agent, its affiliates and each such controlling person (the
Placement Agent, and each such entity or person hereafter is referred to as
an "Indemnified Person") from and against any losses, claims, damages,
judgments, assessments, costs and other liabilities (collectively, the
"Liabilities"), and shall reimburse each Indemnified Person for all fees
and expenses (including the reasonable fees and expenses of counsel for the
Indemnified Persons, except as otherwise expressly provided in this
Agreement) (collectively, the "Expenses") and agrees to advance payment of
such Expenses as they are incurred by an Indemnified Person in
investigating, preparing, pursuing or defending any actions, whether or not
any Indemnified Person is a party thereto, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained
in (i) the Registration Statement, the Pricing Disclosure Package, the
Preliminary Prospectus, the Prospectus or in any Issuer Free Writing
Prospectus (as from time to time each may be amended and supplemented);
(ii) any materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the Offering,
including any "road show" or investor presentations made to investors by
the Company (whether in person or electronically); or (iii) any application
or other document or written communication (in this Section 9, collectively
called "application") executed by the Company or based upon written
information furnished by the Company in any jurisdiction in order to
qualify the Securities under the securities laws thereof or filed with the
Commission, any state securities commission or agency, any national
securities exchange; or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, the Placement Agent's information.
The Company also agrees to reimburse each Indemnified Person for all
Expenses as they are incurred in connection with such Indemnified Person's
enforcement of his or its rights under this Agreement.
B. Procedure. Upon receipt by an Indemnified Person of actual notice of an
action against such Indemnified Person with respect to which indemnity may
reasonably be expected to be sought under this Agreement, such Indemnified
Person shall promptly notify the Company in writing; provided that failure
by any Indemnified Person so to notify the Company shall not relieve the
19
Company from any obligation or liability which the Company may have on
account of this Section 9 or otherwise to such Indemnified Person, except
to the extent (and only to the extent) that its ability to assume the
defense is actually impaired by such failure or delay. The Company shall,
if requested by the Placement Agent, assume the defense of any such action
(including the employment of counsel and reasonably satisfactory to the
Placement Agent). Any Indemnified Person shall have the right to employ
separate counsel in any such action and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless: (i) the Company has failed promptly to assume
the defense and employ counsel for the benefit of the Placement Agent and
the other Indemnified Persons or (ii) such Indemnified Person shall have
been advised that in the opinion of counsel that there is an actual or
potential conflict of interest that prevents (or makes it imprudent for)
the counsel engaged by the Company for the purpose of representing the
Indemnified Person, to represent both such Indemnified Person and any other
person represented or proposed to be represented by such counsel, it being
understood, however, that the Company shall not be liable for the expenses
of more than one separate firm of attorneys for the Placement Agent and all
Indemnified persons in any one action or series of related actions in the
same jurisdiction. The Company shall not be liable for any settlement of
any action effected without its written consent (which shall not be
unreasonably withheld). In addition, the Company shall not, without the
prior written consent of the Placement Agent, settle, compromise or consent
to the entry of any judgment in or otherwise seek to terminate any pending
or threatened action in respect of which advancement, reimbursement,
indemnification or contribution may be sought hereunder (whether or not
such Indemnified Person is a party thereto) unless such settlement,
compromise, consent or termination (i) includes an unconditional release of
each Indemnified Person, acceptable to such Indemnified Party, from all
Liabilities arising out of such action for which indemnification or
contribution may be sought hereunder and (ii) does not include a statement
as to or an admission of fault, culpability or a failure to act, by or on
behalf of any Indemnified Person. The advancement, reimbursement,
indemnification and contribution obligations of the Company required hereby
shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as every Liability and Expense is incurred
and is due and payable, and in such amounts as fully satisfy each and every
Liability and Expense as it is incurred (and in no event later than 30 days
following the date of any invoice therefore).
C. Indemnification of the Company. The Placement Agent agrees to indemnify
and hold harmless the Company, its directors, its officers who signed the
Registration Statement and persons who control the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all Liabilities, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the Pricing
Disclosure Package or Prospectus or any amendment or supplement thereto, in
reliance upon, and in strict conformity with, the Placement Agent's
Information. In case any action shall be brought against the Company or any
other person so indemnified based on any Preliminary Prospectus, the
Registration Statement, the Pricing Disclosure Package or Prospectus or any
amendment or supplement thereto, and in respect of which indemnity may be
sought against the Placement Agent, the Placement Agent shall have the
rights and duties given to the Company, and the Company and each other
person so indemnified shall have the rights and duties given to the
Placement Agent by the provisions of Section 9.B. The Company agrees
promptly to notify the Placement Agent of the commencement of any
litigation or proceedings against the Company or any of its officers,
directors or any person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, in connection with the issuance and sale of the Securities or in
connection with the Registration Statement, the Pricing Disclosure Package,
the Prospectus or any Issuer Free Writing Prospectus.
D. Contribution. In the event that a court of competent jurisdiction makes
a finding that indemnity is unavailable to an Indemnified Person, the
Company shall contribute to the Liabilities and Expenses paid or payable by
such Indemnified Person in such proportion as is appropriate to reflect (i)
the relative benefits to the Company, on the one hand, and to the Placement
Agent and any other Indemnified Person, on the other hand, of the matters
20
contemplated by this Agreement or (ii) if the allocation provided by the
immediately preceding clause is not permitted by applicable law, not only
such relative benefits but also the relative fault of the Company, on the
one hand, and the Placement Agent and any other Indemnified Person, on the
other hand, in connection with the matters as to which such Liabilities or
Expenses relate, as well as any other relevant equitable considerations;
provided that in no event shall the Company contribute less than the amount
necessary to ensure that all Indemnified Persons, in the aggregate, are not
liable for any Liabilities and Expenses in excess of the amount of
commissions actually received by the Placement Agent pursuant to this
Agreement. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company on the one hand or the Placement
Agent on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Placement Agent agree that it would not be
just and equitable if contributions pursuant to this subsection (D) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
above in this subsection (D). For purposes of this paragraph, the relative
benefits to the Company, on the one hand, and to the Placement Agent on the
other hand, of the matters contemplated by this Agreement shall be deemed
to be in the same proportion as: (a) the total value received by the
Company in the Offering, whether or not such Offering is consummated, bears
to (b) the commissions paid to the Placement Agent under this Agreement.
Notwithstanding the above, no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act shall be entitled
to contribution from a party who was not guilty of fraudulent
misrepresentation.
E. Limitation. The Company also agrees that no Indemnified Person shall
have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with advice or services
rendered or to be rendered by any Indemnified Person pursuant to this
Agreement, the transactions contemplated thereby or any Indemnified
Person's actions or inactions in connection with any such advice, services
or transactions, except to the extent that a court of competent
jurisdiction has made a finding that Liabilities (and related Expenses) of
the Company have resulted exclusively from such Indemnified Person's gross
negligence or willful misconduct in connection with any such advice,
actions, inactions or services.
F. Survival. The advancement, reimbursement, indemnity and contribution
obligations set forth in this Section 9 shall remain in full force and
effect regardless of any termination of, or the completion of any
Indemnified Person's services under or in connection with, this Agreement.
10. Limitation of Xxxxxx'x Liability to the Company.
Xxxxxx and the Company further agree that neither Xxxxxx nor any of its
affiliates or any of their respective officers, directors, controlling persons
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), employees or agents shall have any liability to the Company, its
security holders or creditors, or any person asserting claims on behalf of or in
the right of the Company (whether direct or indirect, in contract or tort, for
an act of negligence or otherwise) for any losses, fees, damages, liabilities,
costs, expenses or equitable relief arising out of or relating to this Agreement
or the Services rendered hereunder, except for losses, fees, damages,
liabilities, costs or expenses that arise out of or are based on any action of
or failure to act by Xxxxxx and that are finally judicially determined to have
resulted solely from the gross negligence or willful misconduct of Xxxxxx.
11. Limitation of Engagement to the Company.
The Company acknowledges that Xxxxxx has been retained only by the Company, that
Xxxxxx is providing services hereunder as an independent contractor (and not in
any fiduciary or agency capacity) and that the Company's engagement of Xxxxxx is
not deemed to be on behalf of, and is not intended to confer rights upon, any
shareholder, owner or partner of the Company or any other person not a party
hereto as against Xxxxxx or any of its affiliates, or any of its or their
respective officers, directors, controlling persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act), employees
or agents. Unless otherwise expressly agreed in writing by Xxxxxx, no one other
than the Company is authorized to rely upon any statement or conduct of Xxxxxx
in connection with this Agreement. The Company acknowledges that any
recommendation or advice, written or oral, given by Xxxxxx to the Company in
21
connection with Xxxxxx'x engagement is intended solely for the benefit and use
of the Company's management and directors in considering a possible Offering,
and any such recommendation or advice is not on behalf of, and shall not confer
any rights or remedies upon, any other person or be used or relied upon for any
other purpose. Xxxxxx shall not have the authority to make any commitment
binding on the Company. The Company, in its sole discretion, shall have the
right to reject any investor introduced to it by Xxxxxx. The Company agrees that
it will perform and comply with the covenants and other obligations set forth in
the purchase agreement and related transaction documents between the Company and
the investors in the Offering, if any, and that Xxxxxx will be entitled to rely
on the representations, warranties, agreements and covenants of the Company
contained in any such purchase agreement and related transaction documents as if
such representations, warranties, agreements and covenants were made directly to
Xxxxxx by the Company.
12. Amendments and Waivers.
No supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby. The failure of a party to
exercise any right or remedy shall not be deemed or constitute a waiver of such
right or remedy in the future. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (regardless of whether similar), nor shall any such waiver be deemed or
constitute a continuing waiver unless otherwise expressly provided.
13. Confidentiality.
In the event of the consummation or public announcement of any Offering, Xxxxxx
shall have the right to disclose its participation in such Offering, including,
without limitation, the placement at its cost of "tombstone" advertisements in
financial and other newspapers and journals. Xxxxxx agrees not to use any
confidential information concerning the Company provided to Xxxxxx by the
Company for any purposes other than those contemplated under this Agreement.
14. Headings.
The headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.
15. Counterparts.
This Agreement may be executed in one or more counterparts and, if executed in
more than one counterpart, the executed counterparts shall each be deemed to be
an original and all such counterparts shall together constitute one and the same
instrument.
16. Severability.
In case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or
impaired thereby.
17. Use of Information.
The Company will furnish Xxxxxx such written information as Xxxxxx reasonably
requests in connection with the performance of its services hereunder. The
Company understands, acknowledges and agrees that, in performing its services
hereunder, Xxxxxx will use and rely entirely upon such information as well as
publicly available information regarding the Company and other potential parties
to an Offering and that Xxxxxx does not assume responsibility for independent
verification of the accuracy or completeness of any information, whether
publicly available or otherwise furnished to it, concerning the Company or
otherwise relevant to an Offering, including, without limitation, any financial
information, forecasts or projections considered by Xxxxxx in connection with
the provision of its services.
22
18. Absence of Fiduciary Relationship.
The Company acknowledges and agrees that: (a) the Placement Agent has been
retained solely to act as Placement Agent in connection with the sale of the
Securities and that no fiduciary, advisory or agency relationship between the
Company and the Placement Agent has been created in respect of any of the
transactions contemplated by this Agreement, irrespective of whether the
Placement Agent has advised or is advising the Company on other matters; (b) the
price and other terms of the Securities set forth in this Agreement were
established by the Company following discussions and arms-length negotiations
with the Placement Agent and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement; (c) it has been advised that the
Placement Agent and its affiliates are engaged in a broad range of transactions
that may involve interests that differ from those of the Company and that the
Placement Agent has no obligation to disclose such interest and transactions to
the Company by virtue of any fiduciary, advisory or agency relationship; and (d)
it has been advised that the Placement Agent is acting, in respect of the
transactions contemplated by this Agreement, solely for the benefit of the
Placement Agent, and not on behalf of the Company.
19. Survival Of Indemnities, Representations, Warranties, Etc.
The respective indemnities, covenants, agreements, representations, warranties
and other statements of the Company and Placement Agent, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agent, the Company, the Purchasers or any person controlling
any of them and shall survive delivery of and payment for the Securities.
Notwithstanding any termination of this Agreement, including without limitation
any termination pursuant to Section 5, the payment, reimbursement, indemnity,
contribution and advancement agreements contained in Sections 2, 6, 9, 10, 12,
and 13, respectively, and the Company's covenants, representations, and
warranties set forth in this Agreement shall not terminate and shall remain in
full force and effect at all times. The indemnity and contribution provisions
contained in Section 9 and the covenants, warranties and representations of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Placement Agent, any person who
controls the Placement Agent within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act or any affiliate of the
Placement Agent, or by or on behalf of the Company, its directors or officers or
any person who controls the Company within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, and (iii) the issuance and
delivery of the Securities. The Company and the Placement Agent agree to notify
each other of the commencement of any Proceeding against either of them
promptly, and, in the case of the Company, against any of the Company's officers
or directors in connection with the issuance and sale of the Securities, or in
connection with the Registration Statement and the Prospectus.
20. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be fully performed
therein. Any disputes that arise under this Agreement, even after the
termination of this Agreement, will be heard only in the state or federal courts
located in the City of New York, State of New York. The parties hereto expressly
agree to submit themselves to the jurisdiction of the foregoing courts in the
City of New York, State of New York. The parties hereto expressly waive any
rights they may have to contest the jurisdiction, venue or authority of any
court sitting in the City and State of New York.
21. Notices.
All communications hereunder shall be in writing and shall be mailed, hand
delivered or faxed and confirmed to the parties hereto as follows:
If to the Company:
Cel-Sci Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
00
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
If to the Placement Agent:
Xxxxxx Xxxxx Securities, Inc.
0 Xxxxx Xxxxxxx Xxxxxxx - 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
22. Miscellaneous.
This Agreement shall not be modified or amended except in writing signed by
Xxxxxx and the Company. This Agreement shall be binding upon and inure to the
benefit of both Xxxxxx and the Company and their respective assigns, successors,
and legal representatives. This Agreement constitutes the entire agreement of
Xxxxxx and the Company, and supersedes any prior agreements, with respect to the
subject matter hereof. If any provision of this Agreement is determined to be
invalid or unenforceable in any respect, such determination will not affect such
provision in any other respect, and the remainder of this Agreement shall remain
in full force and effect.
23. Successors.
This Agreement will inure to the benefit of and be binding upon the parties
hereto, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 9 hereof, and to their respective
successors, and personal representatives, and, except as set forth in Section 9
of this Agreement, no other person will have any right or obligation hereunder.
24. Partial Unenforceability.
The invalidity or unenforceability of any section, paragraph or provision of
this Agreement shall not affect the validity or enforceability of any other
section, paragraph or provision hereof. If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
25. General Provisions.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition in this Agreement (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit. The Company acknowledges that in connection with the Offering of the
Securities the Placement Agent: (i) has acted at arms-length, is not an agent
of, and owes no fiduciary duties to the Company or any other person, (ii) owes
the Company only those duties and obligations set forth in this Agreement and
(iii) may have interests that differ from those of the Company. The Company
waives to the full extent permitted by applicable law any claims it may have
against the Placement Agent arising from an alleged breach of fiduciary duty in
connection with the Offering.
24
In acknowledgment that the foregoing correctly sets forth the understanding
reached by Xxxxxx and the Company, and intending to be legally bound, please
sign in the space provided below, whereupon this letter shall constitute a
binding Agreement as of the date executed.
Very truly yours,
CEL-SCI CORPORATION
By: /s/ Xxxxx Xxxxxxx
--------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
Agreed and accepted as of the date first above written.
XXXXXX XXXXX SECURITIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chief Executive Officer
25
SCHEDULE I
Issuer General Use Free Writing Prospectuses
None.
26
