EXHIBIT 10 (kk)
CEL-SCI CORPORATION
WARRANT TO PURCHASE ___ SHARES OF COMMON STOCK(1)
____________, 2014
This WARRANT (this "Warrant") of CEL-SCI Corporation, a Colorado
corporation (the "Company"), pursuant to that certain Underwriting Agreement,
dated as of April [_], 2014, by and between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇
Securities, Inc. ("▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇▇ & Co. (UK) Ltd. ("▇▇▇▇▇▇▇") (the
"Representatives"), as representatives of a group of underwriters (collectively,
the "Underwriters"), relating to a "best efforts" public offering (the
"Offering") of common stock, par value $0.01 per share (the "Common Stock"), of
the Company.
FOR VALUE RECEIVED, the Company hereby grants to Representatives and their
respective permitted successors and assigns (collectively, the "Holder") the
right to purchase from the Company up to ______ shares of Common Stock (such
Common Stock underlying this Warrant, the "Warrant Shares"), at a per share
purchase price equal to $[_] [125% OF THE PUBLIC OFFERING PRICE] (the "Exercise
Price"), subject to the terms, conditions and adjustments set forth below in
this Warrant.
1. Exercisability of Warrant. This Warrant shall become exercisable on the
six month anniversary of the Closing Date (the "Vesting Date"). Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Underwriting Agreement, dated April [_], 2014, by and among the
Company and the Underwriters.
2. Expiration of Warrant. This Warrant shall expire on the three (3) year
anniversary of the Vesting Date (the "Expiration Date").
3. Exercise of Warrant. This Warrant shall be exercisable pursuant to the
terms of this Section 3.
3.1 Manner of Exercise
(a) This Warrant is exercisable in whole or in part at any time and
from time to time after the Vesting Date. Such exercise shall be
effectuated by submitting to the Company (either by delivery to the Company
or by facsimile transmission as provided in Section 12 hereof) a completed
and duly executed Notice of Exercise (substantially in the form attached to
this Warrant, the "Notice of Exercise") as provided in this paragraph. The
"Exercise Date" shall be determined based upon the date of delivery of the
Warrant as set forth in Section 12 hereof. Except that, if such Notice of
Exercise is faxed to the Company, the Exercise Date shall be the date of
the facsimile transmission; provided that the Holder of this Warrant
tenders this Warrant to the Company within five (5) business days
thereafter. The Notice of Exercise shall be executed by the Holder of this
Warrant and shall indicate the number of Warrant Shares then being
purchased pursuant to such exercise. Upon surrender of this Warrant,
together with appropriate payment of the Exercise Price for the Warrant
Shares purchased, the Holder shall be entitled to receive a certificate or
certificates for the Common Stock so purchased. The Exercise Price may be
paid in a "cashless" or "cash" exercise or a combination thereof pursuant
to Section 3.1(b) and/or Section 3.1(c) below, as applicable.
(b) If the Notice of Exercise form elects a "cashless" exercise, the
Holder shall thereby be entitled to receive a number of shares of Common
Stock determined as follows:
X = Y [(A - B)/A]
where:
X = the number of Warrant Shares to be issued to the Holder.
_______________________
1) An amount equal to 5% of the Common Stock, plus 5% of the Warrant Shares
sold in the Offering.
Y = the number of Warrant Shares with respect to which this
Warrant is being exercised.
A = the Fair Market Value
B = the Exercise Price.
For purposes of this Section 3.1(b), "Fair Market Value" shall be the
closing price of the Common Stock as reported by the OTC Bulletin Board, or if
listed on a national securities exchange or quoted on an automated quotation
service, such national securities exchange or automated quotation service, on
the trading date immediately prior to the Exercise Date. If the Common Stock is
not then listed on a national stock exchange or quoted on the OTC Bulletin Board
or such other quotation system or association, the Fair Market Value of one
share of Common Stock as of the date of determination, shall be as determined in
good faith by the Board of Directors of the Company and the Holder. If the
Common Stock is not then listed on a national securities exchange, the OTC
Bulletin Board or such other quotation system or association, the Board of
Directors of the Company shall respond promptly, in writing, to an inquiry by
the Holder prior to the exercise hereunder as to the Fair Market Value of one
share of Common Stock as determined by the Board of Directors of the Company. In
the event that the Board of Directors of the Company and the Holder are unable
to agree upon the Fair Market Value, the Company and the Holder shall jointly
select an appraiser, who is experienced in such matters. The decision of such
appraiser shall be final and conclusive, and the cost of such appraiser shall be
borne equally by the Company and the Holder. Such adjustment shall be made
successively whenever such a payment date is fixed.
(c) If the Notice of Exercise form elects a "cash" exercise, the
Exercise Price per share of Common Stock for the shares then being
exercised shall be payable in cash or by certified or official bank check.
3.2 When Exercise Effective. Each exercise of this Warrant shall be deemed
to have been effected immediately prior to the close of business on the business
day on which this Warrant shall have been duly surrendered to the Company as
provided in Sections 3.1 and 12 hereof, and, at such time, the Holder in whose
name any certificate or certificates for Warrant Shares shall be issuable upon
exercise as provided in Section 3.3 hereof shall be deemed to have become the
holder or holders of record thereof of the number of Warrant Shares purchased
upon exercise of this Warrant.
3.3 Delivery of Common Stock Certificates and New Warrant. As soon as
reasonably practicable after each exercise of this Warrant, in whole or in part,
and in any event within five (5) business days thereafter, the Company, at its
expense (including the payment by it of any applicable issue taxes), will cause
the name of the Holder (or as Holder may direct) to be entered in the register
of holders in respect of the Warrant Shares and further cause to be issued in
the name of and delivered to the Holder hereof or, subject to Sections 9 and 10
hereof, as the Holder (upon payment by the Holder of any applicable transfer
taxes) may direct:
(a) a certificate or certificates (with appropriate restrictive
legends, as applicable) for the number of duly authorized, validly issued,
fully paid and non-assessable Warrant Shares to which the Holder shall be
entitled upon exercise; and
(b) in case exercise is in part only, a new Warrant document of like
tenor, dated the date hereof, for the remaining number of Warrant Shares
issuable upon exercise of this Warrant after giving effect to the partial
exercise of this Warrant (including the delivery of any Warrant Shares as
payment of the Exercise Price for such partial exercise of this Warrant).
4. Certain Adjustments. For so long as this Warrant is outstanding:
4.1 Mergers or Consolidations. If at any time after the date hereof there
shall be a capital reorganization (other than a combination or subdivision of
the Common Stock otherwise provided for herein) resulting in a reclassification
to or change in the terms of securities issuable upon exercise of this Warrant
(a "Reorganization"), or a merger or consolidation of the Company with another
corporation, association, partnership, organization, business, individual,
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government or political subdivision thereof or a governmental agency (a "Person"
or the "Persons") (other than a merger with another Person in which the Company
is the continuing corporation, or in which the holders of 50% or more of the
capital stock of the Company immediately preceding such merger hold no less than
50% of the capital stock in the continuing corporation immediately following
such merger and which does not result in any reclassification or change in the
terms of securities issuable upon exercise of this Warrant or a merger effected
exclusively for the purpose of changing the domicile of the Company) (a
"Merger"), then, as a part of such Reorganization or Merger, lawful provision
and adjustment shall be made so that the Holder shall thereafter be entitled to
receive, upon exercise of this Warrant, the number of shares of stock or any
other equity or debt securities or property receivable upon such Reorganization
or Merger by a holder of the number of Common Stock which might have been
purchased upon exercise of this Warrant immediately prior to such Reorganization
or Merger. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Warrant with respect to the rights and
interests of the Holder after the Reorganization or Merger to the end that the
provisions of this Warrant (including adjustment of the Exercise Price then in
effect and the number of Warrant Shares) shall be applicable after that event,
as near as reasonably may be, in relation to any shares of stock, securities,
property or other assets thereafter deliverable upon exercise of this Warrant.
The provisions of this Section 4.1 shall similarly apply to successive
Reorganizations and/or Mergers.
4.2 Splits and Subdivisions; Dividends. In the event the Company should at
any time or from time to time effectuate a split or subdivision of the
outstanding Common Stock or pay a dividend or make a distribution on the
outstanding Common Stock that is payable, in each case, in additional Common
Stock or other securities or rights convertible into, or entitling the holder
thereof to receive, directly or indirectly, additional Common Stock (hereinafter
referred to as the "Common Stock Equivalents") without payment of any
consideration by such holder for the additional Common Stock or Common Stock
Equivalents (including the additional Common Stock issuable upon conversion or
exercise thereof), then, as of the applicable record date (or the date of such
distribution, split or subdivision if no record date is fixed), the per share
Exercise Price shall be appropriately decreased and the number of Warrant Shares
shall be appropriately increased in proportion to such increase (or potential
increase) of outstanding shares; provided, however, that no adjustment shall be
made in the event the split, subdivision, dividend or distribution is not
effectuated.
4.3 Combination of Shares. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the outstanding Common Stock, the per share Exercise Price shall be
appropriately increased and the number of shares of Warrant Shares shall be
appropriately decreased in proportion to such decrease in outstanding shares.
4.4 Adjustments for Other Distributions. In the event the Company shall
declare a distribution on the outstanding Common Stock that is payable in
securities of other Persons, evidences of indebtedness issued by the Company or
other Persons, assets (excluding cash dividends or distributions to the holders
of Common Stock paid out of current or retained earnings and declared by the
Company's Board of Directors) or options or rights not referred to in Sections
4.1, 4.2 or 4.3, then, in each such case for the purpose of this Section 4.4,
upon exercise of this Warrant, the Holder shall be entitled to a proportionate
share of any such distribution as though the Holder was the actual record holder
of the number of shares of Common Stock which might have been purchased upon
exercise of this Warrant immediately prior to the record date fixed for the
determination of the holders of Common Stock of the Company entitled to receive
such distribution (or the date of such distribution if no record date is fixed).
5. No Impairment. The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary 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
of the terms and in the taking of all actions necessary or appropriate in order
to protect the rights of the Holder against impairment.
6. Chief Financial Officer's Report as to Adjustments. With respect to each
adjustment pursuant to Section 4 of this Warrant, the Company, at its expense,
will promptly compute the adjustment or re-adjustment in accordance with the
terms of this Warrant and cause its Chief Financial Officer to certify the
computation (other than any computation of the fair value of property of the
Company, as the case may be). Such certification shall set forth, in reasonable
detail, the event requiring the adjustment or re-adjustment and the amount of
such adjustment or re-adjustment, the method of calculation thereof and the
facts upon which the adjustment or re-adjustment is based, and the Exercise
Price and the number of Warrant Shares or other securities purchasable hereunder
after giving effect to such adjustment or re-adjustment, which certification
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shall be mailed by first class mail, postage prepaid to the Holder. The Company
will also keep copies of all such certifications at its office maintained
pursuant to Section 10.2(a) hereof and will cause them to be available for
inspection at the office during normal business hours upon reasonable notice by
the Holder or any permitted transferee of the Warrant designated by the Holder
thereof.
7. Reservation of Shares. The Company shall, solely for the purpose of
effecting the exercise of this Warrant, at all times during the term of this
Warrant, reserve and keep available out of its authorized Common Stock, free
from all taxes, liens and charges with respect to the issue thereof and not
subject to preemptive rights or other similar rights of stockholders of the
Company, such number of shares of its Common Stock as shall from time to time be
sufficient to effect in full the exercise of this Warrant. If at any time the
number of authorized but unissued Common Stock shall not be sufficient to effect
in full the exercise of this Warrant, in addition to such other remedies as
shall be available to Holder, the Company will promptly take such corporate
action as may, in the opinion of its counsel, be necessary to increase the
number of authorized but unissued Common Stock to such number of shares as shall
be sufficient for such purposes, including without limitation, using its best
efforts to obtain the requisite stockholder approval necessary to increase the
number of authorized Common Stock. The Company hereby represents and warrants
that all Common Stock issuable upon exercise of this Warrant shall be duly
authorized and, when sold, issued and delivered against payment therefor upon
exercise of this Warrant, shall be validly issued, fully paid and
non-assessable.
8. Reserved.
9. Restrictions on Transfer. Prior to the Vesting Date, this Warrant or the
shares of Common Stock underlying such Warrant thereunder may only be
transferred or assigned to the persons permitted under FINRA Rule 5110(g), and
no opinion of counsel shall be necessary for a transfer of such securities by
the holder thereof to any Person employed by or owning equity in the Holder, if
the transferee agrees in writing to be subject to the terms hereof to the same
extent as if the transferee were the original purchaser hereof and such transfer
is permitted under applicable securities laws. This Warrant shall not be sold,
transferred, assigned, pledged, or hypothecated, or be the subject of any
hedging, short sale, derivative, put, or call transaction that would result in
the effective economic disposition of this Warrant by any person prior to the
Vesting Date, except as provided in FINRA Rule 5110(g)(2).
10. Ownership, Transfer and Substitution of Warrant.
10.1 Ownership of Warrant. The Company may treat any Person in whose name
this Warrant is registered in the warrant register maintained pursuant to
Section 10.2(b) hereof as the owner and holder thereof for all purposes,
notwithstanding any notice to the contrary, except that, if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer thereof as the owner of such Warrant for all
purposes, notwithstanding any notice to the contrary. Subject to Sections 9 and
10 hereof, this Warrant, if properly assigned, may be exercised by a new holder
without a new Warrant first having been issued.
10.2 Office; Exchange of Warrant.
(a) The Company will maintain its principal office at the location
identified in the prospectus relating to the Offering or at such other
offices as set forth in the Company's most current filing (as of the
date notice is to be given) under the Securities Exchange Act of 1934,
as amended, or as the Company otherwise notifies the Holder.
(b) The Company shall cause to be kept at its office maintained pursuant
to Section 10.2(a) hereof a warrant register for the registration and
transfer of the Warrant. The name and address of the holder of the
Warrant, the transfers thereof and the name and address of the
transferee of the Warrant shall be registered in such warrant
register. The Person in whose name the Warrant shall be so registered
shall be deemed and treated as the owner and holder thereof for all
purposes of this Warrant, and the Company shall not be affected by any
notice or knowledge to the contrary.
(c) Upon the surrender of this Warrant, properly endorsed, for
registration of transfer or for exchange at the office of the Company
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maintained pursuant to Section 10.2(a) hereof, the Company at its
expense will (subject to compliance with Section 9 hereof, if
applicable) execute and deliver to or upon the order of the holder
thereof a new Warrant of like tenor, in the name of such holder or as
such holder (upon payment by such holder of any applicable transfer
taxes) may direct, calling in the aggregate on the face thereof for
the number of Common Stock called for on the face of the Warrant so
surrendered (after giving effect to any previous adjustment(s) to the
number of Warrant Shares).
10.3 Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, upon delivery of indemnity reasonably satisfactory to the Company in
form and amount or, in the case of any mutilation, upon surrender of this
Warrant for cancellation at the office of the Company maintained pursuant to
Section 10.2(a) hereof, the Company, at its expense, will execute and deliver,
in lieu thereof, a new Warrant of like tenor and dated the date hereof.
11. No Rights or Liabilities as Stockholder. No holder shall be entitled to
vote or receive dividends or be deemed the holder of any Common Stock or any
other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the holder, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
shares, reclassification of shares, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until this Warrant shall have been
exercised and the Common Stock purchasable upon the exercise hereof shall have
become deliverable, as provided herein. The holder of this Warrant will not be
entitled to share in the assets of the Company in the event of a liquidation,
dissolution or the winding up of the Company.
12. Notices. Any notice or other communication in connection with this
Warrant shall be given in writing and directed to the parties hereto as follows:
(a) if to the Representatives, then to ▇▇▇▇▇▇ ▇▇▇▇▇ Securities, Inc., c/o ▇▇▇▇▇▇
▇▇▇▇▇ Securities, Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attn:[_], fax no:[_]; or (b) if to the Company, to the attention of its
Chief Executive Officer at its office maintained pursuant to Section 10.2(a)
hereof; provided, that the exercise of the Warrant shall also be effected in the
manner provided in Section 3 hereof. Notices shall be deemed properly delivered
and received when delivered to the notice party (i) if personally delivered,
upon receipt or refusal to accept delivery, (ii) if sent via facsimile, upon
mechanical confirmation of successful transmission thereof generated by the
sending telecopy machine, (iii) if sent by a commercial overnight courier for
delivery on the next business day, on the first business day after deposit with
such courier service, (iv) if sent by electronic mail to an address designated
by the recipient without any notice to the sender that the message was
undeliverable, or (v) if sent by registered or certified mail, five (5) business
days after deposit thereof in the U.S. mail.
13. Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the issuance of Common Stock underlying this Warrant upon
exercise of this Warrant; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the transfer or registration of this Warrant or any certificate for Common
Stock underlying this Warrant in a name other that of the Holder. The Holder is
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Common Stock underlying this Warrant upon
exercise hereof.
14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of Colorado, without regard to conflict of law
principles that would result in the application of any law other than the laws
of the State of Colorado. The section headings in this Warrant are for purposes
of convenience only and shall not constitute a part hereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed as of the date first above written.
CEL-SCI CORPORATION
By: ______________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
[Signature Page to Underwriter's Warrant]
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EXHIBIT A
FORM OF EXERCISE NOTICE
[To be executed only upon exercise of Warrant]
To CEL-SCI CORPORATION,
The undersigned registered holder of the within Warrant hereby
irrevocably exercises the Warrant pursuant to Section 3.1 of the Warrant with
respect to Warrant Shares, at an exercise price per share of $ , and requests
that the certificates for such Warrant Shares be issued, subject to Sections 9
and 10, in the name of, and delivered to:
______________________
______________________
______________________
The undersigned is hereby making payment for the Warrant Shares in the
following manner: [describe desired payment method as provided for in 3.1 of the
Warrant].
The undersigned hereby represents and warrants that it is, and
has been since its acquisition of the Warrant, the record and beneficial owner
of the Warrant.
Dated:
---------------------
_________________________
Print or Type Name
_________________________
(Signature must conform in all respects to name of holder as
specified on the face of Warrant)
_________________________
(Street Address)
_______________________________________
(City) (State) (Zip Code)
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EXHIBIT B
FORM OF ASSIGNMENT
[To be executed only upon transfer of Warrant]
For value received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto [include name and addresses] the rights
represented by the Warrant to purchase Common Stock of CEL-SCI CORPORATION to
which the Warrant relates, and appoints Attorney to make such transfer on the
books of CEL-SCI CORPORATION maintained for the purpose, with full power of
substitution in the premises.
Dated:_________________________
Signature must conform in all respects to name of
holder as specified on the face of Warrant)
_________________________
(Street Address)
__________________________________________
(City) (State) (Zip Code)
Signed in the presence of:
__________________________
(Signature of Transferree)
_________________________
(Street Address)
__________________________________________
(City) (State) (Zip Code)
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