SECURITIES EXCHANGE AGREEMENT
This Securities Exchange Agreement (the "Agreement"), dated as of August
15, 2001, by and among Cel-Sci Corporation, a Colorado corporation (the
"Company"), and the holders signatory hereto (each a "Holder" and, collectively,
the "Holders").
RECITALS
1. WHEREAS, the Company, Advantage Fund II Ltd. ("Advantage") and Xxxx
Investment Group Limited ("Xxxx") are parties to: (A) a Securities Purchase
Agreement (i) dated as of December 8, 1999 (the "December Purchase Agreement")
and (ii) dated as of March 21, 2000 (the "March Purchase Agreement"), (B) a
Registration Rights Agreement, dated as of March 21, 2000 (the "March
Registration Rights Agreement") and (C) a Registration Rights Agreement, dated
as of December 8, 1999 (the "December Registration Rights Agreement")
Capitalized terms not defined in this Agreement that are defined in the March
Purchase Agreement shall have the meaning set forth in the March Purchase
Agreement.
2. WHEREAS, the Company and Mooring Capital Fund LLC ("Mooring") are
parties to: (A) a Securities Purchase Agreement (i) dated as of December 30,
1999 (the "Initial Mooring Purchase Agreement") and (ii) dated as of March 15
2000 (the "Subsequent Mooring Purchase Agreement"), (B) a Registration Rights
Agreement, dated as of March 15, 2000 (the "Mooring Registration Rights
Agreement") and (C) a Registration Rights Agreement, dated as of December 30,
1999 (the "Mooring December Registration Rights Agreement")
3. Pursuant to: (A) the December Purchase Agreement, the Company issued
and sold to Advantage and Xxxx, among other things, Closing Warrants (the
"December 1999 Warrants") and (B) the March Purchase Agreement, the Company
issued and sold to Advantage and Xxxx: (i) an aggregate of 933,333 shares of
Common Stock (the "March 2000 Shares"), (ii) Adjustable Warrants, as amended by
a letter agreement, dated April 5, 2001, between the Company, Advantage and Xxxx
and (iii) Closing Warrants (the March 2000 Shares, the December 1999 Warrants,
the Adjustable Warrants and the Closing Warrants are collectively, the
"Advantage-Xxxx Securities")
4. Pursuant to: (A) the Initial Mooring Purchase Agreement, the Company
issued and sold to Mooring, among other things, a Closing Warrant (the "December
1999 Mooring Warrant") and (B) the Subsequent Mooring Purchase Agreement, the
Company issued and sold to Mooring: (i) 93,333 shares of Common Stock (the
"Mooring 2000 Shares"), (ii) Adjustable Warrants, and (iii) Closing Warrants
(the Mooring 2000 Shares, the December 1999 Mooring Warrant, the Adjustable
Warrants and the Closing Warrants are collectively, the "Mooring Securities").
5. Pursuant to the Adjustable Warrants issued to each of Advantage, Xxxx and
Mooring, as set forth above, each of Advantage, Xxxx and Mooring currently holds
the number of shares of the Company's common stock set forth below such Holder's
name on its signature page to this Agreement (such shares, the "Outstanding
Adjustable Warrant Shares").
6. The Company filed and caused to be declared effective with the
Commission an Underlying Shares Registration Statement (A) (registration no.
333-94675) (the "Initial Registration Statement"), registering, among other
things, the resale by the Holders of 402,007 shares issuable, in the aggregate,
upon exercise of the December 1999 Warrants and the December 1999 Mooring
Warrant and (B) an Underlying Shares Registration Statement (registration no.
333-34604) (the "Subsequent Registration Statement"), registering the resale by
the Holders of the March 2000 Shares, the Mooring 2000 Shares and 5,315,344
shares issuable upon exercise of the Adjustable Warrants and Closing Warrants
issued to Advantage, Xxxx and Mooring pursuant to the March Purchase Agreement
and the Subsequent Mooring Purchase Agreement, respectively. The Initial
Registration Statement and the Subsequent Registration Statement are
collectively, the "Registration Statements")
7. The Advantage-Xxxx Securities, the Mooring Securities and the
Outstanding Adjustable Warrant Shares are sometimes collectively referred to
herein as (the "Original Securities") and the December Registration Rights
Agreement, the March Registration Rights Agreement, the Mooring December
Registration Rights Agreement and the Mooring Registration Rights Agreement are
sometimes collectively referred to herein as (the "Registration Rights
Agreements")
8. The Company and the Holders have agreed, subject to the terms and
conditions of this Agreement, to exchange (the "Exchange") the Original
Securities for (i) 6,288 shares of a newly created series of convertible
preferred stock of the Company, designated as the Company's 6% Series E
Convertible Preferred Stock, par value $0.01 per share ("Exchange Shares"), and
(ii) Common Stock purchase warrants of the Company in the forms of Exhibit B,
Exhibit C and Exhibit D (the "Exchange Warrants" and, together with the Exchange
Shares and the Underlying Shares (as defined in Section 2(b)), the "Exchange
Securities").
9. The Exchange Shares shall have the rights preferences and privileges
set forth in Exhibit A, and shall be incorporated into a Certificate of
Designation (the "Certificate of Designation") to be filed prior to the Closing
(as defined below) by the Company with the Secretary of State of Colorado, in
form and substance agreed to by the parties.
10. The Exchange is intended to qualify as an exempted transaction under
Section 3(a)(9) of the Securities Act.
NOW, THEREFORE, in consideration of the above recitals, the covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Holders agree as follows:
1. Exchange of Securities
(i) Subject to the terms and conditions of this Agreement, the
Company will issue and deliver the Exchange Securities to the Holders and the
Holders will severally accept the Exchange Shares and Exchange Warrants from the
Company in exchange for the Original Securities designated as owned by the
Holders on the signature pages to this Agreement. The closing (the "Closing") of
the Exchange shall occur at the offices of Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP ("Xxxxxxxx Xxxxxxxxx"), 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, on the execution date of this Agreement or such later date as the
parties shall agree. The date of the Closing is hereinafter referred to as the
"Closing Date."
(ii) On the Closing Date, the parties will deliver the following:
(A) the Company will deliver to each Holder (1) this Agreement, executed by
Company, (2) the legal opinion of Xxxx & Trinen, L.L.P., outside counsel to the
Company, in agreed form, (3) a stock certificate, registered in the name of such
Holder, representing a number of Exchange Shares set forth below such Holder's
name on its signature page to this Agreement and the cash amount set forth on
Schedule A hereto, in lieu of any fractional shares which would otherwise be
issuable to such Holder, (4) one Exchange Warrant, in the form of Exhibit B
(entitling such holder to acquire on the terms thereof the number of shares of
Common Stock set forth below such Holder's name on its signature page to this
Agreement for such Warrant), one Exchange Warrant in the form of Exhibit C
(entitling such holder to acquire on the terms thereof the number of shares of
Common Stock determined in accordance with the terms thereof) and one Exchange
Warrant, in the form of Exhibit D (entitling such holder to acquire on the terms
thereof the number of shares of Common Stock set forth below such Holder's name
on its signature page to this Agreement for such Warrant); and (B) each Holder
shall deliver (1) this Agreement, executed by such Holder and (2) the Original
Securities set forth below such Holder's name on its signature page to this
Agreement.
2. Representations and Warranties of the Company
The Company hereby represents, warrants and covenants to the Holders as
follows:
(a) Authorization; Enforcement. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations
hereunder and under the Exchange Securities. The execution and delivery of this
Agreement and the Exchange Securities by the Company and the consummation by it
of the transactions contemplated hereby and thereby have been duly authorized by
all necessary action on the part of the Company and no further action is
required by the Company. This Agreement and all other instruments and documents
executed by the Company in connection with this Agreement have been duly
executed by the Company and, when delivered in accordance with the terms hereof,
will constitute the valid and binding obligations of the Company enforceable
against the Company in accordance with its terms.
(b) Issuance of the Exchange Securities. The Exchange Securities have been
duly authorized and, when issued and paid for in accordance with the terms
hereof and thereof, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens. The Company has on the date hereof
and will, at all times while the Exchange Shares and Exchange Warrants are
outstanding, maintain an adequate reserve of duly authorized shares of Common
Stock, reserved for issuance to the holders of such Exchange Securities, to
enable it to perform its conversion, exercise and other obligations under this
Agreement, the Certificate of Designation and the Exchange Warrants. Such number
of reserved and available shares of Common Stock shall not be less than (i) the
total number of shares of Common Stock issuable upon conversion in full of all
Exchange Shares as set forth in Section 5(a)(ii) of the Certificate of
Designation, (ii) the total number of shares of Common Stock issuable upon
exercise of the Exchange Warrant in the form of Exhibit B, (iii) the total
number of shares of Common Stock issuable upon exercise of the Exchange Warrant
in the form of Exhibit C as set forth in Section 3(a) of such form of warrant
and (iv) the total number of shares of Common Stock issuable upon exercise of
the Exchange Warrant in the form of Exhibit D (the sum of the shares of Common
Stock issuable under clauses (i)-(iv), the "Initial Minimum"). The shares of
Common Stock issuable upon conversion of the Exchange Shares and exercise of the
Exchange Warrants are referred to herein as the "Underlying Shares."
(c) Capital Stock. Immediately following the Closing, the maximum number
of unissued shares of capital stock which the Company will have authority to
issue under its Certificate of Incorporation or other organizational documents
will be as follows: 79,785,870 shares of Common Stock and 193,000 shares of
preferred stock.
(d) No Conflicts. The execution, delivery and performance of this
Agreement (including the Exchange Securities) by the Company and the
consummation by the Company of the transactions contemplated hereby do not and
will not (i) conflict with or violate any provision of the Company's or any
Subsidiary's certificate of incorporation, bylaws or other charter documents
(each as amended through the date hereof), or (ii) subject to obtaining the
Required Approvals (as defined below), conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected.
(e) Filings, Consents and Approvals. Neither the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of this
Agreement or the Exchange Securities, other than (i) the filing of the
Certificate of Designation with the Secretary of State of Colorado, (ii) any
filings that may be required to disclose this transaction with the Commission or
the AMEX, (iii) the filing with the Commission of an amendment to the
Registration Statements to provide for the resale of the Underlying Shares by
the Holders (the "Amendment"), (iv) any required application(s) to the AMEX for
the listing of the Underlying Shares for trading on the AMEX (and with any other
national securities exchange or market on which the Common Stock is then listed)
in the time and manner required thereby, (v) applicable Blue Sky filings and
(vi) approvals applicable to the issuance of Underlying Shares as required under
Section 713 of the AMEX rules and regulations (collectively, the "Required
Approvals").
(f) Valid Exchange Offer. To the best knowledge of the Company, no
commission or other remuneration has been paid or committed by any Person,
directly or indirectly, for the solicitation of the Exchange. The Company has
not paid, nor has it accepted payment, directly or indirectly, commission or
other remuneration for the solicitation of the Exchange. The issuance of the
Exchange Securities qualifies as an exempt transaction under Section 3(a)(9) of
the Securities Act and is therefore exempt from the registration requirements of
the Securities Act.
(g) Other Representations and Warranties. The Company hereby makes and
restates each of the representations and warranties made by it in Sections
2.1(a), 2.1(g), 2.1(h), 2.1(j) , (except that the reference to June 30, 1999
shall be to the date of the filing by the Company of its Annual Report on Form
10-K for the year ended June 30, 2000), 2.1(k), 2.1(n), 2.1(o), 2.1(p), 2.1(q),
2.1(r), 2.1(t), 2.1(u), and 2.1(v) of the March Purchase Agreement as if such
representations and warranties were first made as of the date of, and contained
in full within, this Agreement (and for such purposes, the reference to the
"date hereof" shall be to the date of this Agreement).
3. Representations and Warranties of Holders
Each Holder hereby for itself and for no other Holder, represents and
warrants to the Company as follows:
(a) Authorization; Enforcement. Such Holder has the requisite power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The execution
and delivery of this Agreement by such Holder and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of such Holder and no further action is required by such
Holder. This Agreement and all other instruments and documents executed by such
holder in connection with this Agreement have been duly executed by such Holder
and, when delivered in accordance with the terms hereof, will constitute the
valid and binding obligations of such Holder enforceable against such Holder in
accordance with its terms.
(b) Ownership of Original Securities. Such Holder is the sole legal and
beneficial owner of the Original Securities that it is exchanging hereunder and
is conveying such Original Securities at the Closing to the Company free and
clear of any Liens that it shall have created. Such Holder has neither
previously sold, assigned, conveyed, transferred or otherwise disposed of, in
whole or in part, the Original Securities to be exchanged by such Holder
hereunder, nor is such Holder party to any agreement other than this Agreement
to sell, assign, convey, transfer or otherwise dispose of, in whole or in part,
such Original Securities.
(c) Sophisticated Person. Such Holder is a sophisticated Person and has
adequate information concerning the business and financial condition of the
Company to make an informed decision regarding the Exchange. Such Holder has
independently made its own analysis and decision to enter into this Agreement
based on such information as it has deemed appropriate.
(d) No Commission. To the best knowledge of such Holder, no commission or
other remuneration has been paid by it or any Person, directly or indirectly, to
solicit its consummation of the Exchange.
4. Other Agreements of the Parties
4.1 Registration Issues; Rule 144
(a) The term "Registrable Securities" as used in the Registration
Rights Agreements shall include all Underlying Shares.
(b) Not later than the twelfth Business Day after the Closing Date
the Company will prepare and file with the Commission an Amendment to each of
the Registration Statements to disclose the Exchange so that the Holders can
utilize the prospectus thereunder, as amended, to resell the Underlying Shares.
The Company will deliver the draft of the Amendments, in the form it proposes to
file, to the Holders for their review on the Closing Date. The Company will not
file the Amendments if the Holders object to the form or content thereof by the
fourth Business Day after the Holders have been so furnished copies thereof.
Each of the Amendments and any new Registration Statement (as used in Section
4.1(c)) will be a "Registration Statement" subject to the terms and conditions
of the March Registration Rights Agreement.
(c) If for any reason the Commission notifies the Company that it
must file a new Registration Statement ("SEC Notice") to cover the resale of the
Underlying Shares instead of the Amendments, then the "Filing Date" for such new
Registration Statement will be the 20th day following the date of the SEC Notice
and the "Effectiveness Date" for such new Registration Statement will be the
60th day following the date of the SEC Notice. The Company will cause each
Amendment to be declared effective as soon as possible following the filing
thereof and in any event by the 15th day following the Closing Date subject to
receipt of an SEC Notice. In the event that the Company fails to file a new
Registration Statement with the Commission by the Filing Date then the Company
shall pay liquidated damages to the Holders in accordance with Section 2(c) of
the March Registration Rights Agreement. The Company shall use its best efforts
to cause any new Registration Statement filed to be declared effective by the
Effectiveness Date, but no liquidated damages shall be payable by the Company
under Section 2(c) of the March Registration Rights Agreement if such new
Registration Statement is not declared effective by the Effectiveness Date.
(d) The holding period, as such term is used in Rule 144(d)
promulgated under the Securities Act, applicable to the Exchange Shares, the
Underlying Shares issuable upon conversion of the Exchange Shares, the Exchange
Warrants and the Underlying Shares issuable upon exchange of the Exchange
Warrants acquired through the cashless exercise provision thereof commenced on
(i) March 21, 2000 with respect to the securities issued pursuant to the March
Purchase Agreement, (ii) December 8, 1999 with respect to the securities issued
pursuant to the December Purchase Agreement, (iii) January 14, 2000 with respect
to the securities issued pursuant to the Initial Mooring Purchase Agreement and
(iv) March 15, 2000 with respect to the securities issued pursuant to the
Subsequent Mooring Purchase Agreement.
(e) Furnishing of Information. As long as the Holders own Exchange
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. So long as the Holders own Exchange Securities, if the Company is
not required to file reports pursuant to such laws, it will prepare and furnish
to the Holders and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act such information as is required for the
Holders to sell the Exchange Securities under Rule 144 promulgated under the
Securities Act. The Company further covenants that it will take such further
action as any holder of Exchange Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell Underlying
Shares without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 promulgated under the Securities Act,
including causing its counsel to issue such legal opinions as may be required by
the Company's transfer agent to effect resales of Underlying Shares in
accordance with Rule 144. Upon the request of any such Person, the Company shall
deliver to such Person a written certification of a duly authorized officer as
to whether it has complied with such requirements.
4.2 Transfer Restrictions.
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(a) Exchange Securities may only be disposed of pursuant to an
effective registration statement under the Securities Act, to the Company or
pursuant to an available exemption from or in a transaction not subject to the
registration requirements of the Securities Act, and in compliance with any
applicable federal and state securities laws. In connection with any transfer of
Exchange Securities other than pursuant to an effective registration statement
or to the Company, except as otherwise set forth herein, the Company may require
the transferor thereof to provide to the Company an opinion of counsel selected
by the transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration under the Securities Act. Notwithstanding the foregoing, the
Company, without requiring a legal opinion as described in the immediately
preceding sentence, hereby consents to and agrees to register on the books of
the Company and with any transfer agent for the securities of the Company any
transfer of Exchange Securities by a Holder to an Affiliate of such Holder or to
one or more funds or managed accounts under common management with such Holder,
and any transfer among any such Affiliates or one or more funds or managed
accounts, provided that: (A) the transferee certifies to the Company that it is
an "accredited investor" within the meaning of Rule 501(a) under the Securities
Act and that it is acquiring the Exchange Securities solely for investment
purposes (subject to the qualifications hereof) and (B) any such transfer does
not constitute a public distribution of securities. As a condition of transfer,
any such transferee shall agree in writing to be bound by the terms of this
Agreement and shall have the rights of a Holder under this Agreement and the
March Registration Rights Agreement.
(b) The Holders agree to the imprinting, so long as is required by
this Section 4.2(b), of the following legend on the Exchange Securities:
[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE OR EXERCISABLE] HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
Underlying Shares shall not contain the legend set forth above nor any
other legend if (i) the conversion of Exchange Shares or exercise of Exchange
Warrants occurs at any time while there is an effective registration statement
covering the resale of the Underlying Shares issuable in respect thereof, (ii)
or the holder is relying on Rule 144(k) promulgated under the Securities Act in
connection with the resale of such Underlying Shares or, (iii) if there is not
an effective registration statement covering the resale of such Underlying
Shares at such time and Rule 144(k) is not then available, if such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission). The
Company agrees that if any Underlying Shares are issued with a legend, it will,
within three (3) Trading Days after request therefor by a Holder and the
surrender by such Holder of the certificate representing such securities,
provide such Holder with a certificate or certificates representing such
Underlying Shares, free from such legend at such time as such legend would not
have been required under this Section had such issuance occurred on the date
that a Holder requested a certificate(s) representing Underlying Shares. The
Company may not make any notation on its records or give instructions to any
transfer agent of the Company which enlarge the restrictions of transfer set
forth in this Section. Other than with respect to resales of securities pursuant
to Rule 144, the Holders agree that they shall comply with the prospectus
delivery requirements under the Securities Act with respect to any resale of
securities issued pursuant to this paragraph without restrictive legend.
4.3 Acknowledgment of Dilution. The Company acknowledges that the issuance
of the Underlying Shares upon conversion of the Exchange Shares and exercise of
the Exchange Warrants will result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligation to issue Underlying Shares
upon such conversions and exercises in accordance with the terms of the
Certificate of Designation and the Exchange Warrants is unconditional and
absolute, regardless of the effect of any such dilution.
4.4 Reservation and Listing of Underlying Shares.
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(a) The Company shall (i) in the time and manner required by AMEX
and such other exchange, market or quotation system on which the Common Stock is
traded, prepare and file with AMEX (and such other national securities exchange
or market or trading or quotation facility on which the Common Stock is then
listed) an additional shares listing application covering a number of shares of
Common Stock which is not less than the Initial Minimum, (ii) take all steps
necessary to cause such shares of Common Stock to be approved for listing on the
AMEX (as well as on any such other national securities exchange or market or
trading or quotation facility on which the Common Stock is then listed) as soon
as possible thereafter, and (iii) provide to the Holders evidence of such
listing, and the Company shall maintain the listing of its Common Stock thereon.
If the number of Underlying Shares issuable upon conversion in full of the then
outstanding Exchange Shares and exercise in full of the Exchange Warrants
exceeds the number of Underlying Shares previously listed on account thereof
with AMEX (and any such other required exchanges), then the Company shall take
the necessary actions to immediately list a number of Underlying Shares
sufficient to cover all such Underlying Shares which may so be issued.
(b) The Company shall maintain a reserve of shares of Common Stock
for issuance upon the conversion in full of the Exchange Shares and exercise in
full of the Exchange Warrants in accordance with this Agreement, the Certificate
of Designation and the Exchange Warrants, respectively, in such amount as may be
required to fulfill its obligations in full. If on any date the Company would
be, if a notice of conversion or exercise were to be delivered on such date,
precluded from issuing all of the Underlying Shares as would then be issuable
upon a conversion in full of the Exchange Shares and exercise of the Exchange
Warrants due to the unavailability of a sufficient number of authorized but
unissued or reserved shares of Common Stock, then the Board of Directors of the
Company shall promptly (and in any case, within 30 Business Days from such date)
prepare and mail to the stockholders of the Company proxy materials requesting
authorization to amend the Company's certificate or articles of incorporation to
increase the number of shares of Common Stock which the Company is authorized to
issue to a number sufficient to comply with such exercise and conversion
obligations. In connection therewith, the Board of Directors shall (a) adopt
proper resolutions authorizing such increase, (b) recommend to and otherwise use
its best efforts to promptly and duly obtain stockholder approval to carry out
such resolutions (and hold a special meeting of the stockholders no later than
the earlier to occur of the 60th day after delivery of the proxy materials
relating to such meeting and the 90th day after request by a holder of Exchange
Securities to issue the number of Underlying Shares in accordance with the terms
hereof) and (c) within five Business Days of obtaining such stockholder
authorization, file an appropriate amendment to the Company's certificate or
articles of incorporation to evidence such increase.
4.5 Release. Effective as of and from the Closing and based on the good
and valuable consideration exchanged between the Company and the Holders, each
of the Holders and the Company (as such, a "RELEASOR") hereby releases and
discharges the other and its predecessors, successors, and affiliates,
employees, officers, directors, agents, representatives, and assigns
(collectively, "RELEASEES"), from all actions, causes of action, suits, debts,
dues, assessments, late fees, sums of money, expenses, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, executions, obligations,
duties, claims, matters, liabilities, violations of law, fines, penalties,
responsibilities, attorneys' fees, maintenance charges, and demands whatsoever,
in law, admiralty or equity, which against the RELEASEES (or any of them) the
RELEASORS, RELEASOR's successors or assigns ever had, now have or hereafter can
shall or may have, for, upon or by reason of any matter, cause or thing
whatsoever from the beginning of the world to the date of this Agreement.
4.6 Non-Disclosure of Non-Public Information. The Company shall not
disclose non-public information to the Holders or their agents unless prior to
disclosure of such information the Company identifies such information as being
non-public information and the Holders enter into a non-disclosure agreement in
form mutually acceptable to the Company and the Holders.
4.7 Volume Limitations. The Holders severally agree to comply with the
following trading limitations with respect to sales by them of Common Stock:
(a) Subject to paragraph (c) below in this Section, from July 23,
2001until October 22, 2001, (i) Advantage and Xxxx will each limit their
respective weekly sales of Common Stock to 7% of the average of the four prior
weeks trading volume for the Common Stock as reported by Bloomberg Financial
Services (or its successor to reporting such information regarding securities)
("Bloomberg") using the HP function key, and (ii) Mooring will limit its weekly
sales of Common Stock to 1.67% of the average of the four prior weeks trading
volume for the Common Stock as reported by Bloomberg using the HP function key.
(b) Subject to paragraph (c) below in this Section, commencing
October 23, 2001, (i) Advantage and Xxxx will each limit their respective weekly
sales of Common Stock to 9% of the average of the four prior weeks trading
volume for the Common Stock as reported by Bloomberg using the HP function key,
and (ii) Mooring will limit its weekly sales of Common Stock to 2.14% of the
average of the four prior weeks trading volume for the Common Stock as reported
by Bloomberg using the HP function key.
(c) If on any Trading Day the volume of the Common Stock as reported
by Bloomberg using the HP function key equals or exceeds 200,000 shares, then in
addition to the shares they are permitted to sell under paragraphs (a) and (b)
of this paragraph, (i) Advantage and Xxxx may on each of that Trading Day and
the following Trading Day sell an additional number of shares of Common Stock
not to exceed 4.5% of the total trading volume of the Common Stock for such
Trading Day on which the volume of the Common Stock exceeds 200,000, and (ii)
Mooring may on each of that Trading Day and the following Trading Day sell an
additional number of shares of Common Stock not to exceed 1% of the total
trading volume of the Common Stock for such two Trading Days. The additional
number of shares of Common Stock that the Holders may sell in accordance with
this paragraph (c) shall not count towards the weekly limitations of the holders
specified in paragraphs (a) and (b) of this Section.
(d) The Holders will confirm their respective compliance with the
provisions set forth in this Section if requested by the Company, provided, that
the Company will not make such a request more than once every 30 days.
(e) The Holders confirm that from July 23, 2001 to the execution
date of this Agreement, they have complied with the applicable volume
limitations as set forth in this Section 4.7.
4.8 Certain Trading Restrictions. Each Holder agrees that it will not
enter into any Short Sales (as defined herein) of the Exchange Securities. For
purposes of this Section 4.8, a "Short Sale" by a Holder shall mean a sale of
Common Stock by such Holder that is marked as a short sale and that is made at a
time when there is no equivalent offsetting long position in Common Stock held
by the Holder. For purposes of determining whether there is an equivalent
offsetting long position in Common Stock held by a Holder, Underlying Shares
that have not yet been issued on exercise of the Exchange Warrants or conversion
of the Exchange Shares held by a Holder shall be deemed to be held long by such
Holder.
5. Miscellaneous
5.1 Fees and Expenses At the Closing, the Company shall reimburse the
Holders for their legal fees and expenses incurred in connection with the
preparation and negotiation of this Agreement by delivering to Xxxxxxxx
Xxxxxxxxx $15,000. Other than the amount contemplated herein, and except as
otherwise specified in the Registration Rights Agreements each party shall pay
the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all stamp and other taxes and duties levied in connection
with the issuance of the Exchange Securities.
5.2 Entire Agreement. This Agreement, the Certificate of Designations, the
Exchange Warrants, the Registration Rights Agreements contain the entire
understanding of the parties with respect to the Exchange and supersede all
prior agreements and understandings, oral or written, with respect thereto. This
Agreement does not have the effect of nullifying any prior written agreements
between the parties that do not specifically address the Exchange, except that
to the extent the terms of any such agreement conflict with the terms of this
Agreement, the terms of this Agreement shall control.
5.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 5:00 p.m. (New York City
time) on a Business Day, (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Agreement later than 5:00 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day following the date of mailing, if sent by nationally
recognized overnight courier service and marked for next Business Day delivery,
or (iv) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as follows:
If to the Company: Cel-Sci Corporation
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Chief Financial Officer
With copies to: Xxxx & Xxxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx
Facsimile No.: (000) 000-0000
Attn: Xxxx Xxxx, Esq.
If to a Holder: To the address set forth under
such Holder's name on the signature pages
hereto.
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
5.4 Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
both the Company and the Holders or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right accruing to it thereafter.
5.5 Headings . The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.6 Successors and Assigns . This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Holders. Except as set forth in Section
4.2(b), the Holders may not assign this Agreement or any of the rights or
obligations hereunder without the consent of the Company.
5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
5.8 Governing Law . The corporate laws of the State of Colorado shall
govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement, the Certificate of
Designations and the Exchange Securities shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective Affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the "New York Courts"). Each
party hereto hereby irrevocably submits to the jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of Agreement), and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is improper or that such New York Courts are inconvenient or will
be an improper forum for such proceeding. Each party hereto (including its
affiliates, agents, officers, directors and employees) hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto (including
its affiliates, agents, officers, directors and employees) hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Agreement,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its attorneys fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
5.9 Survival. The representations, warranties, agreements and covenants
contained herein shall survive the consummation of the transactions contemplated
herein, including the conversion of the Exchange Shares and exercise of the
Exchange Warrants.
5.10 Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
5.11 Remedies . In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the Holders
will be entitled to specific performance of the obligations of the Company under
this Agreement, the Certificate of Designations and the Exchange Securities.
Each of the Company and the Holders agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of its
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
5.12 Independent Nature of Holders' Obligations and Rights. The
obligations of each Holder hereunder and under the Exchange Securities are
several and not joint with the obligations of any other Holder, and no Holder
shall be responsible in any way for the performance of the obligations of any
other Holder hereunder and thereunder. Nothing contained herein, and no action
taken by any Holder pursuant hereto, shall be deemed to constitute the Holders
as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Holders are in any way acting in concert with
respect to such obligations or the transactions contemplated by the this
Agreement or the Exchange Securities. Each Holder shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement or out of the Exchange Securities, and it
shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.
5.13 Replacement of Stock Certificate. If any stock certificate representing
Exchange Shares issued to a Holder pursuant to this Agreement is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation hereof, or in lieu of and
substitution for such stock certificate, a New Stock Certificate, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction and indemnity, if requested, satisfactory to it. Applicants for a
New Stock Certificate under such circumstances shall also comply with such other
reasonable regulations and procedures and pay such other reasonable charges as
the Company may prescribe.
* * * * * * * *
IN WITNESS WHEREOF, the Company has executed and delivered this Agreement
as of the date first above written.
CEL-SCI CORPORATION
By:
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
IN WITNESS WHEREOF, the Holders have executed and delivered this
Agreement as of the date first above written.
ADVANTAGE FUND II LTD.
By: Genesee International Inc., as General Manager
By:
--------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
March 2000 Shares to be Exchanged at Closing: 533,333
========
Outstanding Adjustable Warrant Shares: 1,377,675
=========
Number of Exchange Shares to be
issued at Closing: 3,820
=====
Number of Warrant Shares issuable under
Exchange Warrant (in the form of Exhibit B)
to be issued at Closing: 214,724
=======
Number of Warrant Shares issuable under
Exchange Warrant (in the form of Exhibit D)
to be issued at Closing: 287,179
=======
Adjustable Warrant to be delivered to Company at
Closing: Adjustable Warrant No. 1, dated March 21, 2000
and the April 5, 2001 amendment thereto.
Closing Warrant to be delivered to Company at Closing:
Closing Warrant No. 1, dated March 21, 2000.
Address for Notice:
x/x XXXXX
Xxxx Xxxxxxxxx 0
Xxxxxxx, Xxxxxxxxxxx Antilles
Facsimile: 011-599-9732-2008
Attention: X.X. Xxxxx
With copies to:
Genesee International Inc.
00000 XX 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
IN WITNESS WHEREOF, the Holders have executed and delivered this Agreement
as of the date first above written.
XXXX INVESTMENT GROUP LIMITED
By:
---------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
March 2000 Shares to be Exchanged at Closing: 400,000
=======
Outstanding Adjustable Warrant Shares: 823,414
=======
Number of Exchange Shares to be issued
at Closing: 1,799
=======
Number of Warrant Shares issuable under
Exchange Warrant (in the form of Exhibit B)
to be issued at Closing: 161,043
=======
Number of Warrant Shares issuable under
Exchange Warrant (in the form of Exhibit D)
to be issued at Closing: 71,795
======
Adjustable Warrant to be delivered to Company
at Closing: Adjustable Warrant No. 2, dated
March 21, 2000 and the April 5,
2001 amendment thereto.
Closing Warrant to be delivered to Company
at Closing: Closing Warrant No. 2, dated
March 21, 2000.
Address for Notice:
00 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000)-000-0000
Telephone:(000) 000-0000
Attention: Xxxx Xxxxxx
With copies to:
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000 and (000) 000-0000
Attn: Xxxx X. Xxxxx, Esq.
IN WITNESS WHEREOF, the Holders have executed and delivered this
Agreement as of the date first above written.
MOORING CAPITAL FUND LLC
By:
---------------------------------------
Name:
Title:
March 2000 Shares to be Exchanged at Closing: 93,333
======
Outstanding Adjustable Warrant Shares: 361,534
=======
Number of Exchange Shares to be
issued at Closing: 669
===
Number of Warrant Shares issuable under
Exchange Warrant (in the form of Exhibit B)
to be issued at Closing: 37,577
======
Number of Warrant Shares issuable under
Exchange Warrant (in the form of Exhibit D)
to be issued at Closing: 43,033
======
Adjustable Warrant to be delivered to Company at
Closing: Adjustable Warrant, dated March 15, 2000.
Closing Warrant to be delivered to Company at Closing:
Closing Warrant, dated March 15, 2000.
Address for Notice:
Mooring Capital Fund LLC
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Phone: (000) 000-0000
Attn: Xxxx Xxxxxxxxx
Schedule A
Cash Payment Amount in Lieu of Fractional Shares
1. Advantage Fund II Ltd. = $ 55.02
2. Xxxx Investment Group Limited = $641.62
3. Mooring Capital Fund LLC = $108.76
