Exhibit 10.1

 

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January 9, 2014

STRICTLY CONFIDENTIAL

C. Neil Lyons, Chief Financial Officer

Cleveland BioLabs, Inc.

73 High Street

Buffalo, NY 14203

Dear Mr. Lyons:

This letter agreement (this “Agreement”) constitutes the agreement between
Cleveland BioLabs, Inc. (the “Company”) and H.C. Wainwright & Co., LLC
(“Wainwright”) that Wainwright shall serve as the exclusive agent, advisor or
underwriter in any Qualified Offering (as defined below) of securities of the
Company (“Securities”) during the Term (as defined below) of this Agreement. The
terms of each Qualified Offering, and the Securities issued in connection
therewith, shall be mutually agreed upon by the Company and Wainwright and
nothing herein implies that Wainwright 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 Wainwright’s assistance in a
Qualified Offering will be subject to the satisfactory completion of such
investigation and inquiry into the affairs of the Company as Wainwright deems
appropriate under the circumstances and to the receipt of all internal approvals
of Wainwright in connection with the transaction. The Company expressly
acknowledges and agrees that Wainwright’s involvement in a Qualified Offering is
strictly on a reasonable best efforts basis and that the consummation of a
Qualified Offering will be subject to, among other things, market conditions.
The execution of this Agreement does not constitute a commitment by Wainwright
to purchase the Securities and does not ensure a successful offering of the
Securities or the success of Wainwright with respect to securing any other
financing on behalf of the Company. Wainwright may retain other brokers,
dealers, agents or underwriters on its behalf and at its own expense in
connection with a Qualified Offering.

A. Compensation; Reimbursement. At the closing of each Qualified Offering, the
Company shall compensate Wainwright as set forth below and in accordance with
the terms and conditions set forth herein.

1. Cash Fee. The Company shall pay to Wainwright a cash fee, or as to an
underwritten Qualified Offering an underwriter discount, equal to 6% of the
aggregate gross proceeds (excluding any exercise price subsequently received by
the Company upon exercise of warrants issued in such Qualified Offering) raised
in each Qualified Offering closed by the Company following the date hereof.

2. Warrant Coverage. The Company shall issue to Wainwright or its designees at
each Qualified Offering, warrants (the “Wainwright Warrants”) to purchase that
number of shares of common stock of the Company equal to 3% of the aggregate

 

430 Park Avenue | New York, New York 10022 | 212.356.0500 | www.hcwco.com

Member: FINRA/SIPC

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number of shares of Common Stock placed in each Qualified Offering, including
any shares placed through an overallotment option or “greenshoe.” If the
Securities issued in the initial Qualified Offering are convertible into shares
of Common Stock, such shares of Common Stock underlying such Securities shall
form the basis upon which warrant coverage is calculated). The Wainwright
Warrants shall have the same exercise price and exercise term as the warrants
issued to investors in the applicable Qualified Offering, and will otherwise be
limited to customary terms that address stock splits, but will not include any
anti-dilution adjustments. If no warrants are issued to investors in a Qualified
Offering, the Wainwright Warrants shall, have a term of 5 years and an exercise
price equal to 125% of the then market price of the Common Stock, as well as
other customary terms and the terms identified above.

3. Expense Allowance. Out of the proceeds of each Qualified Offering, the
Company agrees to pay Wainwright an accountable expense allowance of up to
$100,000 for reasonable and ordinary out-of-pocket expenses incurred by
Wainwright in connection with the initial Qualified Offering (provided, however,
that such reimbursement amount in no way limits or impairs the indemnification
and contribution provisions of this Agreement).

B. Term and Termination of Engagement; Exclusivity. The term (the “Term”) of
Wainwright’s exclusive engagement will begin on the date hereof and end on
February 28, 2014, if an initial Qualified Offering has not closed. If an
initial Qualified Offering closes by February 28, 2014, the Term of Wainwright’s
exclusive engagement will be extended to August 15, 2014. Additionally,
Wainwright may terminate this agreement at any time upon prior written notice to
the Company. Notwithstanding anything to the contrary contained herein, the
Company agrees that the provisions relating to the payment of fees,
reimbursement of expenses, indemnification and contribution, confidentiality,
conflicts, independent contractor and waiver of the right to trial by jury will
survive any termination of this Agreement. During the Term, (i) the Company will
not, and will not permit its representatives to, other than in coordination with
Wainwright, 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 Qualified
Offering. Furthermore, the Company agrees that during Wainwright’s engagement
hereunder, all inquiries, whether direct or indirect, from prospective investors
will be referred to Wainwright and will be deemed to have been contacted by
Wainwright in connection with an Offering; provided, however, that nothing
contained herein shall limit (i) the Company’s ability to pursue any transaction
with the entities listed on Appendix A, or (ii) limit the Company’s subsidiaries
set forth on Appendix B from pursuing a financing with any third party.

C. Qualified Offering Defined. A “Qualified Offering” shall include any sale or
issuance or series of sales or issuances of Cleveland BioLabs, Inc. common
stock, preferred stock or securities convertible into common stock or preferred
stock except issuances (i) under the Company’s equity incentive plan, (ii) in
connection with the exercise of warrants issued by the Company prior to the date
hereon, (iii) of shares of common stock issued in exchange for services provided
or to be provided to the Company or its subsidiaries, (iv) any licensing,
collaboration, merger, acquisition, strategic or similar transactions, (v) to
parties listed on Appendix A. For the avoidance of doubt, a Qualified Offering
shall not include the sale or

 

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issuance of common stock, preferred stock or securities convertible into common
stock or preferred stock or any other equity of any of the Company’s
subsidiaries set forth on Appendix B.

D. Information; Reliance. The Company shall furnish, or cause to be furnished,
to Wainwright all information requested by Wainwright for the purpose of
rendering services hereunder (all such information being the “Information”). In
addition, the Company agrees to make available to Wainwright upon request from
time to time the officers, directors, accountants, counsel and other advisors of
the Company. The Company authorizes Wainwright to distribute to prospective
investors in a Qualified Offering a confidential placement memorandum, if
applicable, and other disclosure materials prepared or reviewed and approved by
the Company for use in connection with the Qualified Offering, together with any
reports, statements and other documents publicly filed by the Company with the
Securities and Exchange Commission pursuant to Sections 13(a), 13(c), 14 and
15(d) of the U.S. Securities Exchange Act of 1934, as amended, (the “Qualified
Offering Documents”). The Company recognizes and confirms that Wainwright
(a) does not assume responsibility for the accuracy or completeness of the
Qualified Offering Documents ; and (b) will not make an appraisal of any of the
assets or liabilities of the Company. Upon reasonable request, the Company will
meet with Wainwright or its representatives to discuss the Information and the
Qualified Offering Documents and will cooperate in any investigation undertaken
by Wainwright thereof, including any document included or incorporated by
reference therein. At each Qualified Offering, at the request of Wainwright, the
Company shall deliver such legal letters, comfort letters and officer’s
certificates, all in form and substance reasonably satisfactory to Wainwright
and its counsel as is customary for such Qualified Offering. Wainwright shall be
a third party beneficiary of any representations, warranties, covenants and
closing conditions made by the Company in any Qualified Offering Documents,
including representations, warranties, covenants and closing conditions made to
any investor in a Qualified Offering.

E. Related Agreements. At each Qualified Offering, the Company shall enter into
the following additional agreements:

1. Underwritten Qualified Offering. If a Qualified Offering is an underwritten
Qualified Offering, the Company and Wainwright shall enter into a customary
underwriting agreement in form and substance satisfactory to Wainwright and its
counsel.

2. Best Efforts Qualified Offering. If a Qualified Offering is on a best efforts
basis, the sale of Securities to the investors in the Qualified 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 Wainwright.
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. In respect of each Qualified Offering, the Company and Wainwright
shall enter into an escrow agreement with a third party escrow agent pursuant to
which Wainwright’s compensation shall be paid from the gross proceeds of the
Securities sold. The Company shall bear the cost of the escrow agent.

4. FINRA Amendments. Notwithstanding anything herein to the contrary, in the
event that Wainwright 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 Wainwright
to comply with any such rules; provided that any such amendments shall not
provide for terms that are less favorable to the Company.

 

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F. Confidentiality. In the event of the consummation or public announcement of
any Offering, Wainwright 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.

G. Indemnity.

1. In connection with the Company’s engagement of Wainwright as a Qualified
Offering agent, the Company hereby agrees to indemnify and hold harmless
Wainwright 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 Wainwright, or
(B) otherwise relate to or arise out of Wainwright’s activities on the Company’s
behalf under Wainwright’s 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 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 Wainwright 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 Wainwright, 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. The Company shall not be liable
for any settlement of any litigation or proceeding effected without its written
consent.

 

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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 therefor, 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. 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 Wainwright is the Indemnified Person), the Company and Wainwright shall
contribute to the Claim for which such indemnity is held unavailable in such
proportion as is appropriate to reflect the relative benefits to the Company, on
the one hand, and Wainwright on the other, in connection with Wainwright’s
engagement referred to above, and also the relative fault of each of the Company
and Wainwright, as well as any other relevant equitable considerations; provided
that in no event shall the amount of Wainwright’s contribution to such Claim
exceed the amount of fees actually received by Wainwright from the Company
pursuant to Wainwright’s engagement. The Company hereby agrees that the relative
benefits to the Company, on the one hand, and Wainwright on the other, with
respect to Wainwright’s 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 Qualified Offering (whether or not consummated) for
which Wainwright is engaged to render services bears to (b) the fee paid or
proposed to be paid to Wainwright 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.

 

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H. Limitation of Engagement to the Company. The Company acknowledges that
Wainwright has been retained only by the Company, that Wainwright is providing
services hereunder as an independent contractor (and not in any fiduciary or
agency capacity) and that the Company’s engagement of Wainwright 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 Wainwright 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 Wainwright, no one other than the Company is authorized to
rely upon this Agreement or any other statements or conduct of Wainwright, 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 Wainwright to the Company in connection with Wainwright’s engagement is
intended solely for the benefit and use of the Company’s management and
directors in considering a possible Qualified 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.
Wainwright 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 Wainwright.

I. Limitation of Wainwright’s Liability to the Company. Wainwright and the
Company further agree that neither Wainwright 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 expenses that arise out of or are based on any action of or failure to
act by Wainwright and that are finally judicially determined to have resulted
solely from the gross negligence or willful misconduct of Wainwright.

J. 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 of the
bringing of any action, or suit by a party hereto against the other party
hereto, arising out of or relating to this Agreement, the party in whose favor
the final judgment or award shall be entered shall be entitled to have and
recover from the other party 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
Wainwright and the Company.

 

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K. Notices. All notices hereunder will be in writing and sent by certified mail,
hand delivery, overnight delivery or fax, if sent to Wainwright, to H. C.
Wainwright & Co. LLC, at the address set forth on the first page hereof, fax
number 212-356-0536, Attention: Head of Investment Banking, and if sent to the
Company, to the address set forth on the first page hereof, fax number
716-849-6820 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, and notices delivered by fax shall be deemed received as of
the date and time printed thereon by the fax machine.

L. Conflicts. The Company acknowledges that Wainwright and its affiliates may
have and may continue to have investment banking and other relationships with
parties other than the Company pursuant to which Wainwright may acquire
information of interest to the Company. Wainwright shall have no obligation to
disclose such information to the Company or to use such information in
connection with any contemplated transaction.

M. 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.

N. 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 Wainwright and the Company. This Agreement shall be binding
upon and inure to the benefit of both Wainwright and the Company and their
respective assigns, successors, and legal representatives. This Agreement and
the Confidentiality Agreement dated December 10, 2013 constitute the entire
agreement of Wainwright and the Company with respect to this Qualified 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.

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In acknowledgment that the foregoing correctly sets forth the understanding
reached by Wainwright 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, H.C. WAINWRIGHT & CO., LLC By  

/s/ Mark W. Viklund

  Name: Mark W. Viklund   Title: Chief Executive Officer

 

Accepted and Agreed: CLEVELAND BIOLABS, INC. By  

/s/ C. Neil Lyons

  Name: C. Neil Lyons   Title: Chief Financial Officer

 

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Appendix A

Open Joint Stock Company “Rusnano” and any of its affiliates

Rusnano MedInvest and any of its affiliates

BioProcess Capital Partners and any of its affiliates

Hercules Technology Growth Capital and any of its affiliates

 

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Appendix B

BioLab 612, LLC

Incuron, LLC

Panacela Labs, Inc.

 

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