SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 27, 2009
Colorado 0-11503 84-0916344
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
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Registrant's telephone number, including area code: (703) 506-9460
Effective March 6, 2009, CEL-SCI Corporation entered into a licensing agreement with Byron Biopharma LLC ("Byron") under which CEL-SCI granted Byron an exclusive license to market and distribute CEL-SCI's cancer drug Multikine(R) in the Republic of South Africa. CEL-SCI has existing licensing agreements for Multikine with Teva Pharmaceuticals in Israel and Turkey and Orient Europharma in Taiwan, Singapore, Hong Kong, Malaysia and South Korea, the Philippines, Australia and New Zealand.
Pursuant to the agreement, Byron will be responsible for registering the product in South Africa. Once Multikine has been approved for sale, CEL-SCI will be responsible for manufacturing the product, while Byron will be responsible for sales in South Africa. Revenues will be divided equally between CEL-SCI and Byron. To maintain the license Byron, among other requirements, must make milestone payments to CEL-SCI totaling $125,000 on or before March 15, 2010.
On March 27, 2009, and as further consideration for its rights under the licensing agreement, Byron Biopharma purchased 3,750,000 Units from CEL-SCI at a price of $0.20 per Unit. Each Unit consisted of one share of CEL-SCI's common stock and two warrants. Each warrant entitles the holder to purchase one share of CEL-SCI's common stock at a price of $0.25 per share. The warrants will be exercisable at any time after September 8, 2009 and prior to March 6, 2016. The shares of common stock included as a component of the Units were registered by CEL-SCI under the Securities Act of 1933. CEL-SCI will file a new registration statement to register the shares issuable upon the exercise of the warrants.
Exhibit Number Description
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5 Opinion of Counsel
10(i) Distribution Agreement
10(j) Form of Warrant
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 31, 2009
CEL-SCI CORPORATION
By: /s/ Patricia B. Prichep
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Patricia B. Prichep, Senior Vice President
of Operations
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CEL-SCI CORPORATION
FORM 8-K
EXHIBITS
EXHIBIT 5
March 30, 2009
CEL-SCI Corporation
8229 Boone Boulevard, Suite 802
Vienna, Virginia 22182
This letter will constitute an opinion upon the legality of the sale by CEL-SCI Corporation, a Colorado corporation ("CEL-SCI"), of 3,750,000 shares of common stock, as well as warrants to purchase an additional 7,500,000 shares of CEL-SCI's common stock, all as referred to in the Registration Statement on Form S-3 (File No. 333-151667) filed by CEL-SCI with the Securities and Exchange Commission.
We have examined the Articles of Incorporation, the Bylaws and the minutes of the Board of Directors of CEL-SCI and the applicable laws of the State of Colorado, and a copy of the Registration Statement. In our opinion, CEL-SCI is authorized to issue the shares of stock mentioned above and such shares represent fully paid and non-assessable shares of CEL-SCI's common stock.
Very truly yours,
HART & TRINEN
/s/ William T. Hart William T. Hart |
EXHIBIT 10(i)
DEVELOPMENT, SUPPLY AND
DISTRIBUTION AGREEMENT
DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT ("Agreement") dated March 06, 2009, by and between CEL-SCI Corporation, a Colorado corporation ("CEL-SCI"), and Byron Biopharma LLC, a Delaware limited liability company ("Byron Biopharma").
WHEREAS, CEL-SCI and Byron Biopharma are engaged in the development and distribution, respectively, of pharmaceutical products; and
WHEREAS, Byron Biopharma wishes to obtain from CEL-SCI exclusive marketing and distribution rights in the Territory with respect to CEL-SCI's pharmaceutical Product (as defined) manufactured and developed by CEL-SCI, and wishes to have CEL-SCI supply it with such Product; and
WHEREAS, CEL-SCI wishes to grant Byron Biopharma exclusive marketing and distribution rights for cancer indications and to supply Byron Biopharma with such Product for resale in the Territory;
NOW, THEREFORE, in consideration for the mutual promises contained herein, the parties agree as follows:
1. Definitions
As used in this Agreement, the following definitions shall apply:
a. "Commencement Date" shall mean, with respect to the Product, the date of the first commercial sale of such Product in The Republic of South Africa.
b. "Contract Year" shall mean a calendar year, according to the USA calendar.
c. "FOB" shall have the meaning ascribed in the Uniform Commercial Code in effect in Maryland, USA. "FOB point of origin" shall mean FOB at the CEL-SCI manufacturing or packaging site or at its contractor's site where such activities are performed, for the Product in the USA.
d. "MCC" shall mean the Medical Control Council, the South African health authorities, or its successors.
e. "IND" shall mean an Investigational New Drug application filed with the U.S. or Canadian health authorities or any other national health authority recognized by the Medicines Control Council in the Republic of South Africa covering manufacture of the Product dosage form(s) being evaluated in clinical trials under such IND.
f. "Labeling" shall mean all package inserts, vial labels and carton imprints and all other markings on packaging for, or other similar materials related to, the Product for commercial sale that are defined as labeling under any applicable law or regulation. "Labeling" shall also mean such labeling applicable to the use of clinical supplies (e.g., Investigational Drug Brochure).
g. "Manufacturing Cost" shall mean CEL-SCI's fully-burdened direct and indirect manufacturing costs and expenses associated in producing the Product, including, but not limited to, cost of materials, supplies, utilities, rent, labor (including taxes, benefits, overheads), third party contract expenses, administration, depreciation for plant and equipment and any other direct expenses.
h. "Gross Selling Price" is (1) the national reimbursement price approved by The Republic of South Africa, or (2) in the event that The Republic of South Africa does not grant the approval to reimburse the payments, Gross Selling Price is the contract price between Byron Biopharma and the major hospitals in the Republic of South Africa.
i. "Net Sales" - the total amount actually received by Byron Biopharma or
its Affiliates from the arms length sale of the Product, provided that as to
sales other than at arms length, the term "Net Sales" shall mean the total
amount that would have been due in an arms length sale, according to the then
current conditions for such sale or - in the absence of such current conditions
- according to reasonable conditions for such sale, in all cases after deduction
of:
o sales taxes (including value added taxes) to the extent applicable to
sales of the Product and not collected separately from the
counter-party to such sales; and
o credits or allowances, if any, actually granted, and approved by
Supplier, on account of price adjustments, recalls, rejections or
return of the Product previously sold; and
o all shipment, storage, transportation and other direct administrative
expenses required for the distribution of the Product.
j. "Specifications" shall mean, with respect to the Product, the specifications set forth in the IND for such Product approved by the health authorities in the Territory.
k. "Product" shall mean CEL-SCI's Leukocyte Interleukin Injection (Multikine(TM)), plus any improvements thereto, which shall comply with the Specifications, approved by health authorities in the Territory.
l. "Purchase Price" is the transfer price of Product for commercial sale from CEL-SCI to Byron Biopharma as specified in Section 8.1.
m. "Quarter" means a complete period consisting of the months of January to March, April to June, July to September, and October to December, all inclusive.
n. "Term" shall have the meaning ascribed to it in Section 3(a) hereof.
o. "Territory" shall mean the Republic of South Africa.
2. Authorization and Acceptance of Distribution
a. Subject to the terms and conditions herein contained, CEL-SCI hereby appoints Byron Biopharma, following regulatory approval for sale, as its exclusive distributor to market, distribute and sell the Product for human cancer indications in the Territory.
b. Byron Biopharma will be entitled to appoint sub-distributors for the Territory with respect to marketing, distributing and selling the Product and to perform any of the obligations undertaken by it under this Agreement through any corporation or entity controlling or under common control with Byron Biopharma. These appointments will be subject to CEL-SCI approval which approval will not be unreasonably withheld.
3. Term
a. The term of this Agreement shall commence on the date hereof and shall terminate on the twentieth anniversary date of the Commencement Date for the Product. The 20-year term may hereinafter be referred to as the "Term."
b. After the 20-year period has expired, the exclusive Term for the Product shall automatically be extended for successive two-year periods unless at least six months before the expiration of the then current period for such Product, either party gives written notice to the other that it does not wish to extend the exclusive Term.
c. Following the expiration of this Agreement, all rights of Byron Biopharma to the Product, as well as any discoveries, inventions, or improvements to the Product will expire and revert to CEL-SCI. In addition, Byron Biopharma will sign over to CEL-SCI any rights that Byron Biopharma may retain in the Product (e.g. product registration in the countries of the Territory). Byron Biopharma will also return all data and/or documents that relate to the Product. Notwithstanding anything herein to the contrary, Byron Biopharma shall have the right to sell Product obtained from CEL-SCI hereunder in its possession after termination of this Agreement.
e. Notwithstanding anything herein to the contrary, this Agreement will expire on March 15, 2010 unless Byron Biopharma pays CEL-SCI a milestone payment totaling $125,000 by such date.
4. Regulatory Approvals
a. Byron Biopharma shall file substantially complete and correct applications in the Territory.
b. After receiving from CEL-SCI all pertinent documentation required by various regulatory authorities, Byron Biopharma, at its own expense and as promptly as possible, shall file substantially complete and correct applications for all approvals necessary to market, sell and distribute the Product in the Territory. In support of such filings, CEL-SCI agrees to provide pertinent information and technical assistance to Byron Biopharma in seeking these approvals. CEL-SCI shall provide to a third party chosen by CEL-SCI, all pertinent process technology information necessary for registration of the Product to the extent that is permitted by the applicable laws and regulations in the Territory. The third party will forward such information to the health authorities for the purpose of completing the Byron Biopharma application(s).
c. In addition to the provisions of Sections 4(b), Byron Biopharma shall, at its own expense and as promptly as possible, use all due diligence to obtain all additional governmental and other approvals which may subsequently become necessary for Byron Biopharma to import and market, sell and distribute such Product for human cancer indications throughout the Territory.
d. Byron Biopharma shall promptly provide to CEL-SCI copies, along with English translations, of all of its product registrations and other approvals for the marketing, distribution and sale of the Product in the Territory. Byron Biopharma shall comply with all applicable laws in the Territory in conducting clinical studies and in marketing, distributing and selling the Product.
e. All preclinical and clinical data generated in the Territory shall belong to CEL-SCI for CEL-SCI's use in Product registrations outside the Territory.
5. Manufacturing and Packaging of Product
a. CEL-SCI will manufacture the Product and deliver as finished Product suitable for sale where the country allows.
b. Byron Biopharma will provide label copy to be used on vials and patient packs in all cases where English is not acceptable.
c. Byron Biopharma shall be responsible for ensuring the accuracy of the information and the form of the Labeling for the Product and their compliance with applicable laws within the Territory.
d. Byron Biopharma may market, sell and/or distribute the Product under the trademark owned or used by CEL-SCI (e.g., Multikine(TM)). Upon Byron Biopharma's request, CEL-SCI shall license Byron Biopharma to use its trademark in the Territory. Byron Biopharma may market, sell and/or distribute the Product in the Territory under any trademark owned or used by it as it may from time to time choose. Such trademarks shall become the sole property of CEL-SCI.
6. Supply of the Product for Commercial Sale
a. No later than six months prior to the first day of each Contract Year of the Term, Byron Biopharma will provide to CEL-SCI a non-binding forecast of Byron Biopharma's annual requirements of the Product for the succeeding Contract Year. CEL-SCI shall advise Byron Biopharma within thirty (30) days of its receipt of such forecast of CEL-SCI's anticipated ability to supply the forecasted amount for the applicable period (such confirmed amount, the "Forecasted Amount").
b. If at any time during the Term, CEL-SCI is or expects that it will be unable to satisfy the Forecasted Amount of Product for any period of a Contract Year, in full or in part, CEL-SCI shall so notify Byron Biopharma promptly, detailing the extent to which it will not meet such Forecasted Amount.
c. It shall be the responsibility of CEL-SCI to maintain reasonably adequate manufacturing capabilities of the Product, using its reasonable commercial best efforts to supply the Forecasted Amounts.
d. CEL-SCI will be the exclusive and sole supplier of Product to Byron Biopharma during the Term of this Agreement.
7. Shipment of Product for Commercial Sale
a. Byron Biopharma shall place all orders for Product by delivering to CEL-SCI a written purchase order specifying the Product, quantity and delivery date (which delivery date shall not be less than 180 days after the date such purchase order is delivered to CEL-SCI).
b. After accepting any written purchase order, CEL-SCI shall use reasonable commercial efforts to fill each order by the specified delivery date and shall notify Byron Biopharma of anticipated delays in filling any order.
c. With each shipment of Product to Byron Biopharma hereunder, CEL-SCI shall invoice Byron Biopharma for the Product included in such shipment at the Purchase Price as set forth in Section 8.1. Payment shall be made in U.S. dollars, by Confirmed Irrevocable Letter of Credit from an internationally recognized bank to CEL-SCI's US bank.
d. Product shall be shipped FOB point of origin. Byron Biopharma shall arrange for the carrier or shipping agent to transport each shipment of Product from CEL-SCI's loading dock at the point of origin to desired destination. Byron Biopharma will ensure that adequately monitored freezer (-20(Degree)C +/- 3(Degree)C) space is maintained for Product storage prior to its distribution. Byron Biopharma shall arrange for carrier / shipment of Product to maintain frozen condition.
8. PRICE AND TERMS OF PAYMENT
8.1 Price: The amounts to be paid by Byron Biopharma to Supplier in connection with the supply of Product shall be as follows:
The greater of: (i) fifty (50%) percent of the Net Sales of such Product, and (ii) one hundred fifty percent (150%) of Supplier's Manufacturing Cost for such quantity of Product.
8.2 With every delivery of the Product to Byron Biopharma, Supplier shall send Byron Biopharma an invoice. For commercial supplies of Product, the initial transfer price for each unit of Product shall be based upon the average Net Sales per unit as described in the latest Sales Certificate (defined below). All payments shall be made within thirty (30) days from the last day of the month in which the invoice was issued, in a manner of a bank transfer to a bank account number, provided by Supplier to Byron Biopharma sufficient time in advance of such bank transfer.
8.3 Within thirty (30) days of the end of each Quarter, Byron Biopharma shall prepare and deliver to Supplier a certificate ("the Sales Certificate") setting out details of the Net Sales of the Product by Byron Biopharma during the relevant Quarter, including the gross selling price and any deductions described in the definition of Net Sales. Notwithstanding the foregoing, Byron Biopharma shall prepare and deliver the first Sales Certificate together with its first order of Products for non-clinical use. All Sales Certificates for periods prior to the Launch Date will include Byron Biopharma's reasonable non binding estimate of the anticipated sales price and relevant deductions.
8.4 At the end of each calendar year, Byron Biopharma will prepare a summary of the previous year's Net Sales and will calculate the payments already paid by Byron Biopharma and a true-up payment will be made by the applicable party in order to reconcile the amounts paid with the purchase prices described in Clause 8.1.
8.5 To the extent that sales are effected by Byron Biopharma, other than in United States Dollars, Byron Biopharma shall convert the sum of such sales into US Dollars in accordance with the selling rate for such currency quoted in the Wall Street Journal last published on the business day on which Byron Biopharma remits payment to Supplier.
8.6 Byron Biopharma shall keep full and true books of account and other
records in accordance with generally accepted accounting practice in the
Republic of South Africa so that details of sales of the Product, and Byron
Biopharma's payment obligations in respect thereof, may be properly ascertained.
Byron Biopharma shall preserve such books and records for three (3) years after
the calendar year to which they pertain. Such books and records shall be open to
inspection by an independent certified public accountant selected by Supplier,
and subject to confidentiality obligations as strict as in this Agreement, at
Supplier's expense, during normal business hours upon ten (10) business days'
prior written notice, for the purpose of verifying the accuracy of the reports
and computations rendered by Byron Biopharma. In the event Byron Biopharma
underpaid the amounts due to Supplier with respect to the audited period by more
than five percent (5%), Byron Biopharma shall pay the reasonable cost of such
examination, together with the deficiency not previously paid, within thirty
(30) days of the last day of the month of the date of receipt of notice from
Supplier.
8.7 As further consideration for its rights under this Agreement, Byron Biopharma agrees to purchase 3,750,000 Units from CEL-SCI at a price of $0.20 per Unit. Each Unit consists of one share of CEL-SCI's common stock and two warrants. Each warrant will entitle the holder to purchase one share of CEL-SCI's common stock at a price of $0.25 per share. The warrants will be exercisable at any time after September 08, 2009 and prior to March 06, 2016. CEL-SCI will use its existing shelf registration statement to register the shares of common stock included as a component of the Units. CEL-SCI will file a new registration statement to register the shares issuable upon the exercise of the warrants.
9. CEL-SCI's Warranty and Liability
a. CEL-SCI warrants and guarantees that, prior to Byron Biopharma taking possession, upon delivery FOB point of origin, the Product shall meet the Specifications and shall not be adulterated or misbranded as required by the health authorities within the Territory ("Warranty").
b. CEL-SCI will provide Byron Biopharma with a Certificate of Analysis for each shipment of Product, stating test results and the Specifications for such shipment of Product.
c. Other than as in the specifications provided for in this Agreement, CEL-SCI makes no other warranties with respect to the Product. CEL-SCI does not make any implied warranties with respect to the effectiveness of this Product.
d. CEL-SCI shall indemnify, defend and hold harmless Byron Biopharma from all actions, losses, claims, demands, damages, costs, and liabilities to which Byron Biopharma is or may become liable insofar as they arise out of, or in connection with, any breach by CEL-SCI of any of its obligations or Warranty under this Agreement.
10. Regulatory Compliance
a. It shall be the responsibility of CEL-SCI to ensure that the Product sold by CEL-SCI to Byron Biopharma pursuant hereto meets the Specifications at the time of delivery to Byron Biopharma FOB point of origin.
b. Byron Biopharma shall comply with all applicable laws in the Territory with respect to packaging, marketing, distributing, selling, promoting and advertising the Product in the Territory.
11. Representations, Warranties and Covenants
a. Byron Biopharma and CEL-SCI represent and warrant to each other that each party has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.
b. CEL-SCI further represents, warrants and covenants that:
i) The Product sold to Byron Biopharma hereunder does not infringe any patent or third party rights in the United States and the Territory related to the manufacture of the Product; and
ii) CEL-SCI possesses good title to the Product sold to Byron Biopharma hereunder; and
iii) CEL-SCI will not market, distribute or sell, to any party other than Byron Biopharma, the Product in the Territory except as provided for by this Agreement; and
iv) This Agreement shall be binding upon either party's lawful successors and assigns without changing any terms and conditions hereof.
12. Protection Rights
a. Except as otherwise provided by this Agreement, CEL-SCI shall not grant any third party the right to sell, ship and/or distribute the Product to any person or entity outside the Territory who CEL-SCI knows intends to sell, ship and/or distribute the Product (in bulk or dosage form) in or to the Territory for human cancer indications. In the event CEL-SCI becomes aware during the time that Byron Biopharma has exclusive rights pursuant to this Agreement, that any third party with whom CEL-SCI contracts to distribute Product outside the Territory is selling or distributing Product in the Territory directly or indirectly, CEL-SCI shall promptly advise such third party to cease selling and distributing Product in the Territory. In the event that such third party continues to sell or distribute Product in the Territory following such notice, CEL-SCI shall commence legal action against such party to terminate such activity.
b. During the Term of this Agreement, Byron Biopharma shall not directly or indirectly manufacture, develop, ship, market, sell or distribute any immunotherapeutic product that competes with Product in the Territory for the indications of head & neck cancer, adenocarcinoma of the nasal pharynx or cervical cancer. In addition, Byron Biopharma shall not directly or indirectly manufacture, develop, ship, market, sell or distribute any product that is a cytokine mixture, for any indication.
c. Byron Biopharma shall not directly or indirectly manufacture, develop, ship, market, sell or distribute Product outside the Territory.
d. If there are any new discoveries, inventions, patents, or other intellectual property as the result of this Agreement, CEL-SCI shall own such intellectual property.
13. Confidentiality
a. Any information pertaining to the Product and/or the respective operations of the parties that has been or will be communicated by CEL-SCI to Byron Biopharma or by Byron Biopharma to CEL-SCI, including, without limitation, trade secrets, business methods, and pricing, cost, supplier, manufacturing and customer information, shall be treated by CEL-SCI and Byron Biopharma
respectively, and their respective affiliates, employees and agents, as confidential information and shall not be used or revealed to third parties except as necessary in connection with the performance of their respective obligations hereunder; provided, however, that such confidential information shall not be subject to the restrictions and prohibitions set forth in this section to the extent that such confidential information:
i) is available in the public literature or otherwise in the public domain, or after disclosure by one party to the other becomes public knowledge through no fault of the party receiving such confidential information;
ii) was known through legitimate means to the party receiving such confidential information prior to the receipt of such confidential information by such party from the disclosing party, as evidenced by such receiving party's written records, whether received before or after the date of this Agreement;
iii) is obtained in good faith by the party receiving such confidential information from a source other than the party supplying such confidential information who was not under an obligation of confidence or secrecy to either party at the time of such disclosure; or
iv) is required to be disclosed pursuant to:
(A) any order of a court having jurisdiction and power to order such information to be released or made public (with prior notice to the disclosing party and opportunity to contest by such party to the extent legally possible); or
(B) any lawful action of a governmental or regulatory agency (with prior notice to the disclosing party and opportunity to contest by such party to the extent legally possible); or
v) is required to be disclosed to a prospective, bona fide purchaser of the shares or assets of either party hereto, provided all such prospective purchasers agree in writing to be bound by the standards of confidentiality.
b. Each party shall take all such precautions as it normally takes with its own confidential information to prevent any improper disclosure of such confidential information to any independent third party; provided, however, that such confidential information may be disclosed within the limits required to obtain any authorization from the Medical Control Council authorities or any other governmental or regulatory agency in the Territory or, with the prior written consent of the other party, which shall not be unreasonably withheld, as may otherwise be required in connection with the purposes of this Agreement.
14. Force Majeure
If either Byron Biopharma or CEL-SCI shall be delayed, hindered, interrupted in or prevented from the performance of any of its obligations hereunder (other than the obligation to pay monies) by reason of force majeure ("Force Majeure"), including, without limitation, fire, earthquake, flood or other acts of God, strike, lockouts, war (declared or undeclared), civil disturbances, embargo, riots, unavailability of essential materials or transportation facilities, orders of any governmental authority (not caused by a default or other action of the party invoking such Force Majeure) or other similar events beyond the control of such party, such party shall not be liable to the other for damages, and the time for performance of such obligation shall be extended for a period of time equal to the duration of the contingency which occasioned such delay, hindrance, interruption or prevention. Byron Biopharma understands that the Product is difficult to manufacture and test. Therefore, Byron Biopharma understands that there may be manufacturing problems, due to reasons outside of CEL-SCI's control, where CEL-SCI may not be able to supply the Product in a timely manner. CEL-SCI will make best efforts to minimize any delay or interruption in supply.
15. Termination
a. This Agreement may be terminated in its entirety immediately upon written notice of termination given by:
i) The non-defaulting party in the event that the other party shall:
(A) commit a material breach or default under this Agreement, which breach or default shall not be remedied within sixty (60) days after the receipt of written notice thereof by the party in breach or in default; or
(B) have made a material misrepresentation of any representation or warranty contained herein;
ii) Either party in the event that any free trade agreements affecting the countries, is abrogated, amended or modified so as to materially and adversely affect the commercial benefits inuring to either party under this Agreement as in effect on the date hereof;
iii) Either party if the other party ceases to function as a going concern or if proceedings in bankruptcy or insolvency are taken against the other party and not remedied within thirty (30) days or if its property or business or its shares be confiscated or expropriated by any government or subdivision thereof;
16. Indemnification
a. CEL-SCI shall indemnify and hold harmless Byron Biopharma and its affiliates, successors and permitted assigns and their respective officers, directors, stockholders, partners and employees from and against any claim,
action, suit, proceeding, loss liability, damage or expense (other than special or consequential damages but including reasonable attorneys` fees and expenses) arising from or related to (i) any material breach of any representation, warranty or covenant made by CEL-SCI hereunder, including without limitation any failure to manufacture the Product in conformity with the Warranty and (ii) any negligent storage or handling of Product by CEL-SCI or its employees prior to Product transfer to Byron Biopharma (delivery to Byron Biopharma FOB point of origin).
b. Byron Biopharma shall indemnify and hold harmless CEL-SCI and its affiliates, successors and permitted assigns and their respective officers, directors, stockholders, partners and employees from and against any claim, action, suit, proceeding, loss liability, damage or expense (other than special, incidental or consequential damages, but including reasonable attorneys` fees) arising from or related to (i) any material breach of any representation, warranty or covenant made by Byron Biopharma hereunder, (ii) the storage, handling, use or sale of Product following delivery Byron Biopharma FOB point of origin, or (iii) packaging instructions provided by Byron Biopharma.
17. Customer Complaints; Recall
a. Pursuant to the United States Code of Federal Regulations Title 21 Section 314.80 , as the same may be amended from time to time, regarding the reporting of adverse drug experiences, Byron Biopharma shall immediately report to CEL-SCI any information concerning adverse drug experiences associated with the use of Product, whether or not considered drug-related, and including but not necessarily limited to: an adverse event occurring in the course of the use of Product in clinical trials, or in professional practice; an adverse event occurring from overdose, whether accidental or intentional; or any significant failure of expected pharmacological action. Additionally, reports of routine adverse drug experiences shall be summarized and exchanged between the parties once per calendar year. Byron Biopharma shall report potentially serious or unexpected adverse drug experiences as defined in Title 21 Section 314.80, as amended, to CEL-SCI as soon as possible, but in no event later than three (3) days after initial receipt of the information by Byron Biopharma and shall maintain a record of each such experience as required under Title 21 Section 314.80(c)(iii). Byron Biopharma agrees to cooperate with CEL-SCI in arriving at a mutually acceptable course of action regarding the handling of such information; however, nothing contained herein shall be construed as restricting the right or duty of either party to report the information to the appropriate regulatory bodies.
b. In the event of any recall of Product, as suggested or requested by any governmental authority, or any recall to which both parties agree in writing, Byron Biopharma shall perform the recall, and the reasonable documented costs thereof, including CEL-SCI`s and Byron Biopharma's respective costs of manufacturing and distributing the Product recalled, will be borne by CEL-SCI or by Byron Biopharma if said recall can be attributed to Byron Biopharma's fault.
18. Patent & Trademark Ownership
CEL-SCI will maintain ownership of its Product patents, trademarks and know how and is responsible for maintaining, prosecuting and defending these patents and trademarks in the Territory.
19. Notices
Any notice or request required or permitted to be given under or in connection with this Agreement shall be in writing in the English language and shall be deemed to have been duly given on the date of delivery if delivered personally, by confirmed facsimile or by courier on the party to whom such notice or request is to be given, or, if sent by certified or registered mail, or the equivalent, postage prepaid, on the tenth (10th) day after the date mailed.
20. Governing Law; Arbitration
The formation, validity, construction and performance of this Agreement shall be governed by the laws the Commonwealth of Virginia, USA. All disputes arising in connection with this Agreement shall be finally settled by binding arbitration under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with said Rules. Any such arbitration shall be conducted in English. The arbitration shall take place in Virginia, USA. The judgment of the arbitration shall be final and binding to both parties.
21. Miscellaneous
Entire Agreement
This Agreement constitutes the entire Agreement between the parties relating to the subject matter hereof, and supercedes all prior agreements and understandings, oral or written between the parties. Any change to this Agreement must be in writing and signed by an authorized officer of each party, and specifically state that it is an amendment to this Agreement.
Product Improvements
During the Term of this Agreement, Byron Biopharma will have rights to improvements to the Product at no additional cost.
Independent Contractors
Each party is an independent contractor under this Agreement. Neither party is an agent, partner or legal representative of the other.
Late Payments
All amounts due and owing to a party under this Agreement that are not paid by the other party when due shall bear interest at the rate of 1 1/2% per month, or if lower, the maximum rate allowed by law, in either case calculated from the date the amount was first due.
Withholding Taxes
Payments to CEL-SCI shall be made without deduction other than such amount (if any) as Byron Biopharma is required by law to deduct or withhold. Byron Biopharma shall obtain a receipt from the relevant taxing authorities for all withholding taxes paid and forward such receipts to CEL-SCI to enable CEL-SCI to claim any tax credits for which it may be eligible. Byron Biopharma shall use reasonable efforts to minimize such withholdings and to assist CEL-SCI to claim exemption from withholdings under any double taxation treaty or similar agreement.
Export Law Compliance
Byron Biopharma understands that the Product and other materials may be subject to the export regulations of the US Department of Commerce or other US regulations related to the export of drugs. Byron Biopharma represents that it is familiar with and agrees to comply with all such regulations. Byron Biopharma agrees that it will not export or reexport outside of the Territory, directly or indirectly, any Product, clinical supplies or clinical data relating to the Product without prior written consent of CEL-SCI. Byron Biopharma agrees to obtain the same agreement from each of its subdistributors in the Territory.
Government Inquiries
Each party shall promptly advise the other of any governmental inquiries about the Product and shall furnish to the other party, within five days of receipt, any report or correspondence issued by the governmental authority in connection with such inquiry, purged only of trade secrets.
Publicity
The parties agree that news releases, public announcements (written or oral), professional publications or any publicity relating to this Agreement, including the initial announcement of the Agreement, clinical results, regulatory filings and marketing approvals of the Product in the Territory, shall be mutually agreed by the parties, such approval not to be unreasonably withheld. Notwithstanding this Section 21, CEL-SCI may disclose, without approval from Byron Biopharma, any information, including confidential information (1) required by law or regulation (including, without exception, in connection with filings with the US Securities and Exchange Commission); (2) in response to a valid order of a court or other governmental body of the US or any country in the Territory or of any political subdivision thereof; (3) otherwise required by applicable laws; (4) otherwise necessary to file or prosecute patent applications, prosecute or defend litigation or otherwise enforce obligations under this Agreement; or (5) required by authorities, investigators, or Institutional Review Boards in conjunction with performing clinical development
programs, provided that the receiving party shall use reasonable efforts to restrict disclosure and to cause such authorities, investigators or IRBs not to disclose the information to any third party.
Records
With respect to the Gross Selling Price of Product sold in the Territory, if Gross Selling Price falls under definition 1 h, then Byron Biopharma will, upon request and subject to confidentiality, provide to CEL-SCI copies of the contracts between the major hospitals and Byron Biopharma showing price provisions. If these copies are not in English, Byron Biopharma will translate the price provisions into English. CEL-SCI shall have the right to these records during the Term of this Agreement and this right shall expire six months following termination or expiration of this Agreement.
Surviving Obligations
Termination or expiration of this Agreement shall not relieve either party of its obligations under Sections 4(e), 12(d), 13, 16, 17, 19, 20 and 21.
IN WITNESS HEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
Byron Biopharma LLC CEL-SCI Corporation
By: /s/ Edward Smith By: /s/ Geert Kersten
-------------------------- -------------------------
Edward Smith Geert Kersten
President Chief Executive Officer
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EXHIBIT 10(j)
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR CEL-SCI CORPORATION SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO CEL-SCI CORPORATION AND ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
CEL-SCI CORPORATION
Expires March 6, 2016
No.: W-1 Number of Shares:7,500,000 Date of Issuance: March 6, 2009
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, CEL-SCI Corporation, a Colorado corporation (together with its successors and assigns, the "Issuer"), hereby certifies that Byron Biopharma LLC or its registered assigns (the "Holder") is entitled to subscribe for and purchase, during the period specified in this Warrant, up to 7,500,000 shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 9 hereof.
1. Term. The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on the date of issuance of this Warrant and shall expire at 5:00 p.m., Eastern time, on March 6, 2016 (such period being the "Term").
2. Exercise Price. The warrant exercise price shall be $0.25, subject to adjustment from time to time as shall result from the adjustments specified in this Warrant, including Section 4 hereto (the "Warrant Price").
3. Method of Exercise Payment; Issuance of New Warrant; Transfer and Exchange.
(a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time during the Term.
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the
payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such Holder's election by certified or official bank check or by wire transfer to an account designated by the Issuer.
(c) Issuance of Stock Certificates. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three (3) Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the Holder of the shares of Warrant Stock so purchased as of the date of such exercise, and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder hereof at the Issuer's expense within such time.
(d) Transferability of Warrant. Subject to Section 2(e), this Warrant may be transferred by a Holder without the consent of the Issuer. If transferred pursuant to this paragraph and subject to the provisions of subsection (e) of this Section 2, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant hereto.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing shares of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form:
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR CEL-SCI CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
(iii) The restrictions imposed by this subsection (e) upon the transfer of
this Warrant or the shares of Warrant Stock to be purchased upon
exercise hereof shall terminate (A) when such securities shall have
been resold pursuant to an effective registration statement under the
Securities Act, (B) upon the Issuer's receipt of an opinion of
counsel, in form and substance reasonably satisfactory to the Issuer,
addressed to the Issuer to the effect that such restrictions are no
longer required to ensure compliance with the Securities Act and state
securities laws or (C) upon the Issuer's receipt of other evidence
reasonably satisfactory to the Issuer that such registration and
qualification under the Securities Act and state securities laws are
not required. Whenever such restrictions shall cease and terminate as
to any such securities, the Holder thereof shall be entitled to
receive from the Issuer (or its transfer agent and registrar), without
expense (other than applicable transfer taxes, if any), new Warrants
(or, in the case of shares of Warrant Stock, new stock certificates)
of like tenor not bearing the applicable legend required by paragraph
(ii) above relating to the Securities Act and state securities laws.
Notwithstanding the foregoing transfer restrictions, one or more
transfers of this Warrant and shares of Warrant Stock may be made
without restriction as follows: (i) in the case of a Holder who is a
partnership or limited liability company, to a partner (including a
limited partner) of such partnership or a member of such limited
liability company; (ii) to any parent or majority-owned subsidiary of
any Holder or parent of any Holder or any successor or permitted
assignee of any Holder or any parent of any Holder; (iii) to any
taxable REIT subsidiary of Holder; or (iv) to any "affiliate" of a
Holder (as defined in Rule 12b-2 of the Exchange Act). The Shares
issuable upon exercise of this Warrant shall be freely transferable
subject to compliance with applicable securities laws.
(iv) It is the intent of this Section 2(e) that if the Warrant Shares are covered by an effective registration statement, or can be sold pursuant to Rule 144(k), the certificate representing the Warrant Shares will be issued without a restricted legend. If the Warrant Shares are not covered by an effective registration statement, or cannot be sold pursuant to Rule 144(k), the certificate representing the Warrant Shares will be issued with a standard restricted legend. In no circumstances will the Issuer pay cash in connection with the exercise of this Warrant.
(f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such Holder shall fail to make any such request, the failure shall not affect the continuing obligation of the Issuer to afford such rights to such Holder.
4. Stock Fully Paid; Reservation and Listing of Shares; Covenants.
(a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to provide for the exercise of this Warrant.
(b) Listing. If the Issuer shall list any shares of Common Stock on any securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the Issuer.
(c) Covenants. The Issuer shall not by any action including, without limitation, amending the Articles of Incorporation or the by-laws of the Issuer, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will (i) not permit the par value, if any, of its Common Stock to exceed the then effective Warrant Price, (ii) not amend or modify any provision of the Articles of Incorporation or by-laws of the Issuer in any manner that would adversely affect in any way the powers, preferences or relative participating, optional or other special rights of the Common Stock or which would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and (iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant.
With a view to making available to the Holder the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit Holder to sell securities of the Issuer to the public without registration, the Issuer agrees to use commercially reasonable best efforts to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the Issue Date, (ii) file with the SEC in a timely manner all reports and other documents required of the Issuer under the Securities Act and the Exchange Act, and (iii) furnish to Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (A) a written statement by the Issuer that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (B) a copy of the most recent annual or quarterly report of the Issuer and such other reports and documents so filed by the Issuer, and (C) such other information as may be reasonably requested to avail Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form.
(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock.
(e) Registration Rights. The warrants are subject to the registration rights described in Exhibit A attached hereto and incorporated herein by this reference.
5. Adjustment of Warrant Price and Warrant Share Number. The number of shares of Common Stock for which this Warrant is exercisable, and the price at which such shares may be purchased upon exercise of this Warrant, shall be subject to adjustment from time to time as set forth in this Section 5. The Issuer shall give the Holder notice of any event described below which requires an adjustment pursuant to this Section 5 in accordance with Section 6.
(a) In case the Issuer shall (i) subdivide its outstanding shares of Common Stock into a greater number of shares, or (ii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the Warrant Shares shall be adjusted so that the Holder shall be entitled to receive the kind and number of Warrant Shares or other securities of the Issuer which it would have owned or have been entitled to receive had this Warrant been exercised in advance thereof. Upon each such adjustment of the kind and number of Warrant Shares or other securities of the Issuer which are purchasable hereunder, the Holder shall thereafter be entitled to purchase Warrant Shares or other securities resulting from such adjustment at a price obtained by multiplying the Warrant Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Warrant Shares or other securities of the Issuer resulting from such adjustment. An adjustment made pursuant to this paragraph shall become effective immediately after the effective date of such event retroactive to the record date, if any, for such event.
(b) In case the Issuer shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Issuer is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Issuer), or sell, transfer or otherwise dispose of all or substantially all its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation ("Other Property"), are to be received by or distributed to the holders of Common Stock of the Issuer, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Issuer, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. In case of any such reorganization, reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Issuer) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Issuer and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Issuer) in order to provide for adjustments of Warrant Shares for which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 5(b).
6. Notice of Adjustments. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 5 hereof (for purposes of this
Section 6, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of the
basis on which the Board made any determination hereunder), and the Warrant
Price and Warrant Share Number after giving effect to such adjustment, and shall
cause copies of such certificate to be delivered to the Holder of this Warrant
promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at
the option of the Holder of this Warrant be submitted to one of the national
accounting firms selected by the Holder, provided that the Issuer shall have ten
(10) days after receipt of notice from such Holder of its selection of such firm
to object thereto, in which case such Holder shall select another such firm and
the Issuer shall have no such right of objection. The firm selected by the
Holder of this Warrant as provided in the preceding sentence shall be instructed
to deliver a written opinion as to such matters to the Issuer and such Holder
within thirty (30) days after submission to it of such dispute. Such opinion
shall be final and binding on the parties hereto. The fees and expenses of such
accounting firm shall be paid by the Holder.
7. Fractional Shares. One whole share will be issued in lieu of any fractional share otherwise issuable upon the exercise of this Warrant Stock.
8. Representations, Warranties and Covenants of the Issuer.
(a) The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado; has all requisite power and authority to own or lease its properties and to carry on its business as now conducted and proposed to be conducted; and is duly qualified or licensed to do business as a foreign corporation in good standing in all jurisdictions in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed.
(b) The Common Stock issuable upon exercise of the Holder's rights has been duly and validly reserved and, when issued in accordance with the provisions of this Warrant, will be validly issued, fully paid and non-assessable, and will be free of any taxes, liens, charges or encumbrances of any nature whatsoever; provided, however, that the Common Stock issuable pursuant to this Warrant may be subject to restrictions on transfer under applicable state and/or federal securities laws.
(c) The Issuer has all requisite power and authority to enter into and perform all of its obligations under this Warrant, to issue the Warrants and to carry out the transactions contemplated hereby. The execution and delivery by the Issuer of this Warrant and the performance of all obligations of the Issuer hereunder, have been duly authorized by all necessary corporate or stockholder action on the part of the Issuer and this Warrant is not inconsistent with the Issuer's articles of incorporation or bylaws, does not contravene any law or governmental rule, regulation or order applicable to it, does not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other agreement or instrument to which it is a party or by which it or its assets are bound, and the Warrant constitutes the legal, valid and binding obligation of the Issuer, and is enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application affecting enforcement of creditors' rights generally and as may be limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
(d) No consent or approval of, giving of notice to, registration with, or taking of any other action in respect of any state, federal or other governmental authority or agency is required with respect to the execution, delivery and performance by the Issuer of its obligations under this Warrant, except for the filing of notices pursuant to Regulation D under the 1933 Act and any filing required by applicable state securities laws, which filings will be effective by the time required thereby.
(e) All shares of Warrant Stock of the Issuer issuable upon the exercise of any Warrants issued hereunder (i) are duly authorized by the Issuer's articles of incorporation, (ii) have been duly authorized by the Issuer's board of directors and, if necessary, the Issuer's stockholders, (iii) will, upon payment therefor in accordance with the terms hereof, be duly and validly issued, fully paid and nonassessable, free of preemptive rights, taxes, security interests or
adverse claims, and (iv) have been duly reserved for issuance pursuant to the terms hereof. The capitalization of the Issuer is shown on Exhibit B to this Warrant.
(f) In the event of (a) any taking by the Issuer of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution (the "Distribution"), (b) any capital reorganization or reclassification of the stated capital of the Issuer or any consolidation or merger of the Issuer with or into any other corporation or corporations (other than a wholly-owned subsidiary), or the sale or distribution of all or substantially all of the Issuer's property and assets (the "Reorganization Event"), or (c) any proposed filing of a registration statement under the Securities Act in connection with a primary public offering of the Issuer's Common Stock (the "Registration Event"), the Issuer will mail or cause to be mailed to the Holder a notice specifying (i) the date of any such Distribution and the amount and character of such Distribution, (ii) the date on which any such Reorganization Event or Registration Event is expected to become effective, and (iii) the time, if any, that is to be fixed as to when the holders of record of the Issuer's securities shall be entitled to exchange their shares of the Issuer's securities for securities or other property deliverable upon such Reorganization Event. Such notice shall be mailed at least thirty (30) days prior to the date therein specified.
(g) The Issuer covenants and agrees that at all times it shall reserve and keep available for the exercise of this Warrant such number of authorized shares of Common Stock as are sufficient to permit the exercise in full of this Warrant.
9. Definitions. For the purposes of this Warrant, the following terms have the following meanings:
"Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature.
"Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect.
"Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof.
"Warrant Shares" or "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants.
10. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Holder; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 10 without the consent of the Holder of this Warrant.
11. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
12. 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 earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern time, on a
Trading Day, (ii) the Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile telephone number
specified for notice later than 5:00 p.m., eastern time, on any date and earlier
than 11:59 p.m., eastern time, on such date, (iii) the Trading Day following the
date of mailing, if sent by nationally recognized overnight courier service or
(iv) actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be with respect to the Holder of
this Warrant or of Warrant Stock issued pursuant hereto, addressed to such
Holder at its last known address or facsimile number appearing on the books of
the Issuer maintained for such purposes, or with respect to the Issuer,
addressed to:
CEL-SCI Corporation 8229 Boone Blvd. #802 Vienna, VA 22182 Telephone: (703) 506-9460 Facsimile: (703) 506-9471
13. Warrant Agent. The Issuer may, by written notice to each Holder of this Warrant, instruct its transfer agent to issue shares of Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of Section 2 hereof, exchange this Warrant pursuant to subsection (d) of Section 2 hereof or replace this Warrant pursuant to subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.
14. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. Notwithstanding the above, the Holder of this Warrant will not be entitled to any specific liquidated damages, payable in cash, in the event the Issuer breaches any of its obligations as provided in this Warrant.
15. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock.
16. Attorneys' Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys' fees.
17. Further Assurances. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Warrant.
18. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein.
19. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written.
ISSUER: CEL-SCI CORPORATION
By: /s/ Geert Kersten
----------------------------------------
Geert Kersten, Chief Executive Officer
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HOLDER: ________________________________
[Print Full Name of Entity or Individual]
Address: _________________________________
EXHIBIT A
REGISTRATION RIGHTS
The Issuer will promptly file a registration statement under the 1933 Act to allow the public offering of all or any part of the shares of common stock issued or reserved for issuance to any warrant holder upon the exercise of this Warrant. The Issuer will pay all expenses required to register the shares (other than any sales commissions), including, without limitation, all registration and filing fees, fees and expenses of complying with securities and blue sky laws, printing expenses, fees and disbursements of counsel or other advisors to the Issuer and the Issuer's accountants. All fees and expenses of counsel for any warrant holder and all sales commissions applicable to the sale of the common stock will be paid by the warrant holder. The Issuer will maintain the effectiveness of the registration statement until the warrants have either been exercised or have expired.
EXERCISE FORM
1. The undersigned Holder of the attached original, executed Stock Purchase Warrant hereby elects to exercise its purchase right under such Warrant with respect to ______ Warrant Shares, as defined in the Warrant of CEL-SCI Corporation (the "Issuer").
2. The undersigned Holder:
(i) elects to pay the aggregate exercise price for such Shares (the "Exercise Shares") in the following manner:
(A) by lawful money of the United States or the enclosed certified check or postal or express money order payable in United States dollars to the order of the Issuer in the amount of $____________;
(B) by wire transfer of United States funds to the account of the Issuer in the amount of $_____________, which transfer has been made before or simultaneously with the delivery of this Exercise Form pursuant to the instructions of the Issuer.
3. Please issue a stock certificate or certificates representing the appropriate number of Warrant Shares in the name of the undersigned or in such other names as is specified below:
Address:_____________________________ Note: The signature of the Holder
must conform in all respects to the
name of the Holder as specified on the
____________________________________ face of the Warrant, without alteration
Tax Identification No.:______________ alteration, enlargement or any change
whatsoever.
HOLDER: _____________________________
By: _________________________________
Its: ________________________________
ASSIGNMENT
(To Be Signed Only Upon Assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________ the right to purchase ____________ shares of Common Stock evidenced by the within Warrant, and appoints ________________________ to transfer the same on the books of _________________ with the full power of substitution in the premises.
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day of ___________, _____, shares of Common Stock issued therefor in the name of _______________, Warrant No. W-_____ issued for ____ shares of Common Stock in the name of _______________.