EXHIBIT 1.1
April 30, 2017
STRICTLY CONFIDENTIAL
CEL-SCI Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Geert ▇. ▇▇▇▇▇▇▇, Chief Executive Officer
Dear ▇▇. ▇▇▇▇▇▇▇:
This letter agreement (this "Agreement") constitutes the agreement between
CEL-SCI Corporation (the "Company") and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a unit of ▇.▇.
▇▇▇▇▇▇▇▇▇▇ & Co., LLC ("▇▇▇▇▇▇"), that ▇▇▇▇▇▇ shall serve as the exclusive
agent, advisor or underwriter in any offering (each, an "Offering") of
securities of the Company ("Securities") during the Term (as defined below) of
this Agreement, including, but not limited to, the solicitation of the exercise
of certain warrant holders of the Company. The terms of each Offering and the
Securities issued in connection therewith shall be mutually agreed upon by the
Company and ▇▇▇▇▇▇ and nothing herein implies that ▇▇▇▇▇▇ would have the power
or authority to bind the Company and nothing herein implies that the Company
shall have an obligation to issue any Securities. It is understood that ▇▇▇▇▇▇'▇
assistance in an Offering will be subject to the satisfactory completion of such
investigation and inquiry into the affairs of the Company as ▇▇▇▇▇▇ ▇▇▇▇▇
appropriate under the circumstances and to the receipt of all internal approvals
of ▇▇▇▇▇▇ in connection with the transaction. The Company expressly acknowledges
and agrees that ▇▇▇▇▇▇'▇ involvement in an Offering is strictly on a reasonable
best efforts basis and that the consummation of an Offering will be subject to,
among other things, market conditions. The execution of this Agreement does not
constitute a commitment by ▇▇▇▇▇▇ to purchase the Securities and does not ensure
a successful Offering of the Securities or the success of ▇▇▇▇▇▇ with respect to
securing any other financing on behalf of the Company. ▇▇▇▇▇▇ may retain other
brokers, dealers, agents or underwriters on its behalf in connection with an
Offering.
A. Compensation; Reimbursement. At the closing of each Offering (each, a
"Closing"), the Company shall compensate ▇▇▇▇▇▇ as follows:
1. Cash Fee. The Company shall pay to Rodman a cash fee, or as to an
underwritten Offering an underwriter discount, equal to 7.0% of the
aggregate gross proceeds raised in each Offering.
2. Warrant Coverage. The Company shall issue to ▇▇▇▇▇▇ or its
designees at each Closing, warrants (the "▇▇▇▇▇▇ Warrants") to purchase
that number of shares of common stock of the Company equal to 5% of the
aggregate number of shares of Common Stock placed in each Offering (and if
the Securities are convertible or include a "greenshoe" or "additional
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investment" option component, such number of shares of Common Stock
underlying such Securities or options, with the warrant issuable upon
conversion of the Securities or the exercise of the option). If the
Securities included in an Offering are non-convertible, the ▇▇▇▇▇▇ Warrants
shall be determined by dividing the gross proceeds raised in such Offering
divided by the then market price of the Common Stock. The ▇▇▇▇▇▇ Warrants
shall have the same terms as the warrants issued to investors in the
applicable Offering, except that such ▇▇▇▇▇▇ Warrant shall have an exercise
price equal to 125% of the public offering price per share in the
applicable Offering. If no warrants are issued to investors in an Offering,
the ▇▇▇▇▇▇ Warrants shall be in a customary form reasonably acceptable to
▇▇▇▇▇▇, have a term of 5 years and an exercise price equal to 125% of the
then market price of the Common Stock.
3. Expense Allowance. Out of the proceeds of each Closing, the Company
also agrees to pay ▇▇▇▇▇▇ (a) up to $5,000 for out-of-pocket expenses; plus
(b) up to $25,000 for non-accountable expenses; plus the additional
reimbursable amount payable by the Company pursuant to Section D.3 below;
provided, however, that such reimbursement amount in no way limits or
impairs the indemnification and contribution provisions of this Agreement.
4. Right of First Refusal. If, from the date hereof until the 12-month
anniversary following consummation of each Offering, the Company or any of
its subsidiaries (a) decides to dispose of or acquire business units or
acquire any of its outstanding securities or make any exchange or tender
offer or enter into a merger, consolidation or other business combination
or any recapitalization, reorganization, restructuring or other similar
transaction, including, without limitation, an extraordinary dividend or
distributions or a spin-off or split-off, and the Company decides to retain
a financial advisor for such transaction, ▇▇▇▇▇▇ (or any affiliate
designated by ▇▇▇▇▇▇) shall have the right to act as the Company's
exclusive financial advisor for any such transaction; or (b) decides to
finance or refinance any indebtedness using a manager or agent, ▇▇▇▇▇▇ (or
any affiliate designated by ▇▇▇▇▇▇) shall have the right to act as lead
manager, lead placement agent or lead agent with respect to such financing
or refinancing; or (c) decides to raise funds by means of a public offering
or a private placement of equity or debt securities using an underwriter or
placement agent, ▇▇▇▇▇▇ (or any affiliate designated by ▇▇▇▇▇▇) shall have
the right to act as lead underwriter or lead placement agent for such
financing. If ▇▇▇▇▇▇ or one of its affiliates decides to accept any such
engagement, the agreement governing such engagement will contain, among
other things, provisions for customary fees for transactions of similar
size and nature and the provisions of this Agreement, including
indemnification, which are appropriate to such a transaction. If ▇▇▇▇▇▇
should decline such retention or fails to respond within 5 business days'
notice of the Company, the Company shall have no further obligations to
▇▇▇▇▇▇ under this Section 4 as to such financing.
B. Term and Termination of Engagement; Exclusivity. The term of ▇▇▇▇▇▇'▇
exclusive engagement will begin on the date hereof and fifteen (15) days
thereafter (the "Term"). Notwithstanding anything to the contrary contained
herein, the Company agrees that the provisions relating to the payment of fees,
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reimbursement of expenses, right of first refusal, indemnification and
contribution, confidentiality, conflicts, independent contractor and waiver of
the right to trial by jury will survive any termination of this Agreement.
During ▇▇▇▇▇▇'▇ engagement hereunder: (i) the Company will not, and will not
permit its representatives to, other than in coordination with ▇▇▇▇▇▇, contact
or solicit institutions, corporations or other entities or individuals as
potential purchasers of the Securities and (ii) the Company will not pursue any
financing transaction which would be in lieu of a Offering. Furthermore, the
Company agrees that during ▇▇▇▇▇▇'▇ engagement hereunder, all inquiries, whether
direct or indirect, from prospective investors will be referred to ▇▇▇▇▇▇ and
will be deemed to have been contacted by ▇▇▇▇▇▇ in connection with an Offering.
Additionally, except as set forth hereunder, the Company represents, warrants
and covenants that no brokerage or finder's fees or commissions are or will be
payable by the Company or any subsidiary of the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
third-party with respect to any Offering.
C. Information; Reliance. The Company shall furnish, or cause to be
furnished, to ▇▇▇▇▇▇ all information requested by ▇▇▇▇▇▇ for the purpose of
rendering services hereunder and conducting due diligence (all such information
being the "Information"). In addition, the Company agrees to make available to
▇▇▇▇▇▇ upon request from time to time the officers, directors, accountants,
counsel and other advisors of the Company. The Company recognizes and confirms
that ▇▇▇▇▇▇ (a) will use and rely on the Information, including any documents
provided to investors in each Offering (the "Offering Documents" which shall
include any Purchase Agreements (as defined below)), and on information
available from generally recognized public sources in performing the services
contemplated by this Agreement without having independently verified the same;
(b) does not assume responsibility for the accuracy or completeness of the
Offering Documents or the Information and such other information; and (c) will
not make an appraisal of any of the assets or liabilities of the Company. Upon
reasonable request, the Company will meet with ▇▇▇▇▇▇ or its representatives to
discuss all information relevant for disclosure in the Offering Documents and
will cooperate in any investigation undertaken by ▇▇▇▇▇▇ thereof, including any
document included or incorporated by reference therein. At each Offering, at the
request of ▇▇▇▇▇▇, the Company shall deliver such legal letters (including,
without limitation, negative assurance letter), opinions, comfort letters and
officer's certificates, all in form and substance satisfactory to ▇▇▇▇▇▇ and its
counsel as is customary for such Offering. ▇▇▇▇▇▇ shall be a third party
beneficiary of any representations, warranties, covenants and closing conditions
made by the Company in any Offering Documents, including representations,
warranties, covenants and closing conditions made to any investor in an
Offering.
D. Related Agreements. At each Offering, the Company shall enter into the
following additional agreements:
1. Underwritten Offering. If an Offering is an underwritten Offering,
the Company and ▇▇▇▇▇▇ shall enter into a customary underwriting agreement
in form and substance satisfactory to ▇▇▇▇▇▇ and its counsel.
2. Best Efforts Offering. If an Offering is on a best efforts basis,
the sale of Securities to the investors in the Offering will be evidenced
by a purchase agreement ("Purchase Agreement") between the Company and such
investors in a form reasonably satisfactory to the Company and ▇▇▇▇▇▇.
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Prior to the signing of any Purchase Agreement, officers of the Company
with responsibility for financial affairs will be available to answer
inquiries from prospective investors.
3. Escrow and Settlement. In respect of each Offering, the Company and
▇▇▇▇▇▇ shall enter into an escrow agreement with a third party escrow
agent, which may also be ▇▇▇▇▇▇'▇ clearing agent, pursuant to which
▇▇▇▇▇▇'▇ compensation and expenses shall be paid from the gross proceeds of
the Securities sold. If the Offering is settled in whole or in part via
delivery versus payment ("DVP"), ▇▇▇▇▇▇ shall arrange for --- its clearing
agent to provide the funds to facilitate such settlement. The Company shall
bear the cost of the escrow agent and shall reimburse ▇▇▇▇▇▇ for the actual
out-of-pocket cost of such clearing agent settlement and financing, if any,
which cost shall not exceed $10,000.
4. FINRA Amendments. Notwithstanding anything herein to the contrary,
in the event that ▇▇▇▇▇▇ determines that any of the terms provided for
hereunder shall not comply with a FINRA rule, including but not limited to
FINRA Rule 5110, then the Company shall agree to amend this Agreement (or
include such revisions in the final underwriting) in writing upon the
request of ▇▇▇▇▇▇ to comply with any such rules; provided that any such
amendments shall not provide for terms that are less favorable to the
Company than are reflected in this Agreement.
E. Confidentiality. In the event of the consummation or public
announcement of any Offering, ▇▇▇▇▇▇ shall have the right to disclose its
participation in such Offering, including, without limitation, the Offering
at its cost of "tombstone" advertisements in financial and other newspapers
and journals.
F. Indemnity.
1. In connection with the Company's engagement of ▇▇▇▇▇▇ as
Offering agent, the Company hereby agrees to indemnify and hold
harmless ▇▇▇▇▇▇ and its affiliates, and the respective controlling
persons, directors, officers, members, shareholders, agents and
employees of any of the foregoing (collectively the "Indemnified
Persons"), from and against any and all claims, actions, suits,
proceedings (including those of shareholders), damages, liabilities
and expenses incurred by any of them (including the reasonable fees
and expenses of counsel), as incurred, (collectively a "Claim"), that
are (A) related to or arise out of (i) any actions taken or omitted to
be taken (including any untrue statements made or any statements
omitted to be made) by the Company, or (ii) any actions taken or
omitted to be taken by any Indemnified Person in connection with the
Company's engagement of ▇▇▇▇▇▇ in reliance upon any actions taken or
omitted to be taken by the Company referenced in clause (i) above, or
(B) otherwise relate to or arise out of ▇▇▇▇▇▇'▇ activities on the
Company's behalf under ▇▇▇▇▇▇'▇ engagement, and the Company shall
reimburse any Indemnified Person for all expenses (including the
reasonable fees and expenses of counsel) as incurred by such
Indemnified Person in connection with investigating, preparing or
defending any such claim, action, suit or proceeding, whether or not
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in connection with pending or threatened litigation in which any
Indemnified Person is a party. The Company will not, however, be
responsible for any Claim that is finally judicially determined to
have resulted from the gross negligence or willful misconduct of any
person seeking indemnification for such Claim. The Company further
agrees that no Indemnified Person shall have any liability to the
Company for or in connection with the Company's engagement of ▇▇▇▇▇▇
except for any Claim incurred by the Company as a result of such
Indemnified Person's gross negligence or willful misconduct.
2. The Company further agrees that it will not, without the prior
written consent of Rodman, settle, compromise or consent to the entry
of any judgment in any pending or threatened Claim in respect of which
indemnification may be sought hereunder (whether or not any
Indemnified Person is an actual or potential party to such Claim),
unless such settlement, compromise or consent includes an
unconditional, irrevocable release of each Indemnified Person from any
and all liability arising out of such Claim.
3. Promptly upon receipt by an Indemnified Person of notice of
any complaint or the assertion or institution of any Claim with
respect to which indemnification is being sought hereunder, such
Indemnified Person shall notify the Company in writing of such
complaint or of such assertion or institution but failure to so notify
the Company shall not relieve the Company from any obligation it may
have hereunder, except and only to the extent such failure results in
the forfeiture by the Company of substantial rights and defenses. If
the Company so elects or is requested by such Indemnified Person, the
Company will assume the defense of such Claim, including the
employment of counsel reasonably satisfactory to such Indemnified
Person and the payment of the fees and expenses of such counsel. In
the event, however, that legal counsel to such Indemnified Person
reasonably determines that having common counsel would present such
counsel with a conflict of interest or if the defendant in, or target
of, any such Claim, includes an Indemnified Person and the Company,
and legal counsel to such Indemnified Person reasonably concludes that
there may be legal defenses available to it or other Indemnified
Persons different from or in addition to those available to the
Company, then such Indemnified Person may employ its own separate
counsel to represent or defend him, her or it in any such Claim and
the Company shall pay the reasonable fees and expenses of such
counsel. Notwithstanding anything herein to the contrary, if the
Company fails timely or diligently to defend, contest, or otherwise
protect against any Claim, the relevant Indemnified Party shall have
the right, but not the obligation, to defend, contest, compromise,
settle, assert crossclaims, or counterclaims or otherwise protect
against the same, and shall be fully indemnified by the Company,
including without limitation, for the reasonable fees and expenses of
its counsel and all amounts paid as a result of such Claim or the
compromise or settlement thereof. Notwithstanding the above, the
Company will only be liable for the fees and expenses of one law firm
for all Indemnified Persons. In addition, with respect to any Claim in
which the Company assumes the defense, the Indemnified Person shall
have the right to participate in such Claim and to retain his, her or
its own counsel therefor at his, her or its own expense.
4. The Company agrees that if any indemnity sought by an
Indemnified Person hereunder is held by a court to be unavailable for
any reason then (whether or not ▇▇▇▇▇▇ is the Indemnified Person), the
Company and ▇▇▇▇▇▇ shall contribute to the Claim for which such
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indemnity is held unavailable in such proportion as is appropriate to
reflect the relative benefits to the Company, on the one hand, and
▇▇▇▇▇▇ on the other, in connection with ▇▇▇▇▇▇'▇ engagement referred
to above, subject to the limitation that in no event shall the amount
of ▇▇▇▇▇▇'▇ contribution to such Claim exceed the amount of fees
actually received by ▇▇▇▇▇▇ from the Company pursuant to ▇▇▇▇▇▇'▇
engagement. The Company hereby agrees that the relative benefits to
the Company, on the one hand, and ▇▇▇▇▇▇ on the other, with respect to
▇▇▇▇▇▇'▇ engagement shall be deemed to be in the same proportion as
(a) the total value paid or proposed to be paid or received by the
Company pursuant to the applicable Offering (whether or not
consummated) for which ▇▇▇▇▇▇ is engaged to render services bears to
(b) the fee paid or proposed to be paid to ▇▇▇▇▇▇ in connection with
such engagement.
5. The Company's indemnity, reimbursement and contribution
obligations under this Agreement (a) shall be in addition to, and
shall in no way limit or otherwise adversely affect any rights that
any Indemnified Party may have at law or at equity and (b) shall be
effective whether or not the Company is at fault in any way.
G. Limitation of Engagement to the Company. The Company acknowledges that
▇▇▇▇▇▇ has been retained only by the Company, that ▇▇▇▇▇▇ is providing services
hereunder as an independent contractor (and not in any fiduciary or agency
capacity) and that the Company's engagement of ▇▇▇▇▇▇ is not deemed to be on
behalf of, and is not intended to confer rights upon, any shareholder, owner or
partner of the Company or any other person not a party hereto as against ▇▇▇▇▇▇
or any of its affiliates, or any of its or their respective officers, directors,
controlling persons (within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), employees or agents. Unless otherwise expressly agreed in writing by
▇▇▇▇▇▇, no one other than the Company is authorized to rely upon this Agreement
or any other statements or conduct of ▇▇▇▇▇▇, and no one other than the Company
is intended to be a beneficiary of this Agreement. The Company acknowledges that
any recommendation or advice, written or oral, given by ▇▇▇▇▇▇ to the Company in
connection with ▇▇▇▇▇▇'▇ engagement is intended solely for the benefit and use
of the Company's management and directors in considering a possible Offering,
and any such recommendation or advice is not on behalf of, and shall not confer
any rights or remedies upon, any other person or be used or relied upon for any
other purpose. ▇▇▇▇▇▇ shall not have the authority to make any commitment
binding on the Company. The Company, in its sole discretion, shall have the
right to reject any investor introduced to it by ▇▇▇▇▇▇.
H. Limitation of ▇▇▇▇▇▇'▇ Liability to the Company. ▇▇▇▇▇▇ and the Company
further agree that neither ▇▇▇▇▇▇ nor any of its affiliates or any of its their
respective officers, directors, controlling persons (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act), employees
or agents shall have any liability to the Company, its security holders or
creditors, or any person asserting claims on behalf of or in the right of the
Company (whether direct or indirect, in contract, tort, for an act of negligence
or otherwise) for any losses, fees, damages, liabilities, costs, expenses or
equitable relief arising out of or relating to this Agreement or the services
rendered hereunder, except for losses, fees, damages, liabilities, costs or
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expenses that arise out of or are based on any action of or failure to act by
▇▇▇▇▇▇ and that are finally judicially determined to have resulted solely from
the gross negligence or willful misconduct of ▇▇▇▇▇▇.
I. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be fully performed therein. Any disputes that arise under this Agreement,
even after the termination of this Agreement, will be heard only in the state or
federal courts located in the City of New York, State of New York. The parties
hereto expressly agree to submit themselves to the jurisdiction of the foregoing
courts in the City of New York, State of New York. The parties hereto expressly
waive any rights they may have to contest the jurisdiction, venue or authority
of any court sitting in the City and State of New York. In the event ▇▇▇▇▇▇ or
any Indemnified Person is successful in any action, or suit against the Company,
arising out of or relating to this Agreement, the final judgment or award
entered shall be entitled to have and recover from the Company the costs and
expenses incurred in connection therewith, including its reasonable attorneys'
fees. Any rights to trial by jury with respect to any such action, proceeding or
suit are hereby waived by ▇▇▇▇▇▇ and the Company.
J. Notices. All notices hereunder will be in writing and sent by certified
mail, hand delivery, overnight delivery or fax, if sent to ▇▇▇▇▇▇, at the
address set forth on the first page hereof, e-mail: ▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇, Attention:
Head of Investment Banking, and if sent to the Company, to the address set forth
on the first page hereof, e-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇-▇▇▇.▇▇▇ Attention: Chief
Executive Officer. Notices sent by certified mail shall be deemed received five
days thereafter, notices sent by hand delivery or overnight delivery shall be
deemed received on the date of the relevant written record of receipt, notices
delivered by fax shall be deemed received as of the date and time printed
thereon by the fax machine and notices sent by e-mail shall be deemed received
as of the date and time they were sent.
K. Conflicts. The Company acknowledges that ▇▇▇▇▇▇ and its affiliates may
have and may continue to have investment banking and other relationships with
parties other than the Company pursuant to which ▇▇▇▇▇▇ may acquire information
of interest to the Company. ▇▇▇▇▇▇ shall have no obligation to disclose such
information to the Company or to use such information in connection with any
contemplated transaction.
L. Anti-Money Laundering. To help the United States government fight the
funding of terrorism and money laundering, the federal laws of the United States
requires all financial institutions to obtain, verify and record information
that identifies each person with whom they do business. This means we must ask
you for certain identifying information, including a government-issued
identification number (e.g., a U.S. taxpayer identification number) and such
other information or documents that we consider appropriate to verify your
identity, such as certified articles of incorporation, a government-issued
business license, a partnership agreement or a trust instrument.
M. Miscellaneous. The Company represents and warrants that it has all
requisite power and authority to enter into and carry out the terms and
provisions of this Agreement and the execution, delivery and performance of this
Agreement does not breach or conflict with any agreement, document or instrument
to which it is a party or bound. This Agreement shall not be modified or amended
except in writing signed by ▇▇▇▇▇▇ and the Company. This Agreement shall be
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binding upon and inure to the benefit of both ▇▇▇▇▇▇ and the Company and their
respective assigns, successors, and legal representatives. This Agreement
constitutes the entire agreement of ▇▇▇▇▇▇ and the Company with respect to this
Offering and supersedes any prior agreements with respect to the subject matter
hereof. If any provision of this Agreement is determined to be invalid or
unenforceable in any respect, such determination will not affect such provision
in any other respect, and the remainder of the Agreement shall remain in full
force and effect. This Agreement may be executed in counterparts (including
facsimile counterparts), each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
*********************
In acknowledgment that the foregoing correctly sets forth the understanding
reached by ▇▇▇▇▇▇ and the Company, please sign in the space provided below,
whereupon this letter shall constitute a binding Agreement as of the date
indicated above.
Very truly yours,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, A UNIT OF ▇.▇.
▇▇▇▇▇▇▇▇▇▇ & CO., LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: COO
Accepted and Agreed:
CEL-SCI CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: CEO