cvm_ex1010





 





 



Exhibit 10.10

 





May 27,
2020

 





CONFIDENTIAL


 


Mr.
Geert R. Kersten


Director
and Chief Executive Officer


CEL-SCI
Corporation


8229
Boone Boulevard, Suite 802


Vienna,
Virginia 22182

 



Re:             


Warrant Solicitation Engagement





 


Dear
Geert:


 





The
purpose of this engagement letter (the “Warrant
Solicitation Agreement” or “Agreement”))
is to set forth our agreement pursuant to which Dawson James
Securities, Inc. (“Dawson”)
will act as warrant solicitation agent for the solicitation (the
“Solicitation”)
of the exercise of outstanding warrants (the “Warrants”) issued
by CEL-SCI Corporation (the “Company”).
This Warrant Solicitation Agreement sets forth certain conditions
and assumptions upon which the Solicitation is
premised.

 


The
terms of our agreement are as follows:

 

1. Engagement.
The Company hereby agrees to engage Dawson, for the period
beginning on the date hereof (the “Commencement
Date”) and ending on the close of business on
September 25, 2020, unless extended in writing by the parties (the
“Engagement
Period”), to
act as the Company’s exclusive warrant solicitation agent in
connection with the proposed Solicitation. During the Engagement
Period, and as long as Dawson is proceeding in good faith with the
Solicitation, the Company agrees not to solicit, negotiate with or
enter into any agreement with any other solicitation agent with
regard to the Warrants.

 

2. The
Solicitation. The Solicitation will consist of the
solicitation by Dawson of the holders of the Warrants during the
Engagement Period, as directed and requested by the Company. Dawson
will act as the warrant solicitation agent subject to, among other
matters referred to herein and additional customary conditions,
including completion of Dawson’s due diligence examination of
the Company
.

 

3. Solicitation
Compensation. Pursuant to this Warrant Solicitation
Agreement, the Company will pay Dawson a fee consisting of a cash
payment equal to 3.5% of the total gross proceeds received by the
Company upon the exercise of the Warrants during the Engagement
Period, subject the compliance by Dawson of the requirements set
forth in FINRA Rule 5110(f)(J) (the “Solicitation
Fee”). Dawson reserves the right to reduce such
compensation or adjust the terms thereof as specified herein in the
event that a determination and/or suggestion will be made by
Financial Industry Regulatory Authority (“FINRA”)
to the effect that the aggregate compensation is in excess of FINRA
rules or that the terms thereof require adjustment; provided,
however, the aggregate
compensation otherwise to be paid to Dawson by the Company may not
be increased above the amounts stated herein without the written
approval of the Company.


 




 

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4. Registration
Statement. The Company will, as soon as practicable
following the execution of this Warrant Solicitation Agreement,
prepare and file with the Securities and Exchange Commission (the
“Commission”),
a Registration Statement on Form S-1 (the “Registration
Statement”)
filed under the Securities Act of 1933, as amended (the
“Securities
Act”) covering
the sale of the Company common stock underlying the Warrants (the
“Warrant
Shares”), which Registration Statement will set forth
the terms of the Warrant Solicitation Agreement and Dawson’s
role as warrant solicitation agent thereunder. The Registration
Statement will be in form reasonably satisfactory to Dawson and
counsel to Dawson. The Company will be solely responsible for the
contents of the Registration Statement and prospectus contained
therein (the “Prospectus”
and any Presentation Materials, defined below(collectively the
Solicitation Materials) and
the Company represents and warrants that the Solicitation Materials
will not, during the Engagement Period, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. If at any time prior to the completion
of the foregoing an event occurs that would cause the Solicitation
Materials (as supplemented or amended by the Company) to contain an
untrue statement of a material fact or to omit to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, the
Company will notify Dawson immediately of such event and Dawson
will suspend solicitations of the Warrant holders until such time
as the Company shall prepare a supplement or amendment to the
Solicitation Materials that corrects such statement or omission.
Upon execution of this Warrant Solicitation Agreement, the Company
will file a copy of this agreement on a Current Report on Form 8-K,
which will be incorporated by reference into the Registration
Statement.

 

5. Representations and
Warranties of the Company. The Company hereby makes to
Dawson each of the representations and warranties set forth in
Exhibit A hereto on each date during the Engagement Period. If at
any time prior to the completion of the Engagement Period an event
occurs that would cause the representations and warranties to
longer be true and correct, the Company will notify Dawson
immediately of such event and Dawson will suspend solicitations of
the Warrant holders until such time as the parties mutually agree
to recommence the solicitations.

 

6. Expenses.
The Company will be responsible for and will pay all expenses
relating to the Solicitation, including, without limitation:, (a)
all FINRA Public Offering filing fees; and (b) the costs of all
mailing and printing of the Solicitation documents.

 

7. Survival.
Paragraphs 6, 11, 12, and 13 shall survive the termination of this
Warrant Solicitation Agreement.

 

8. Termination.
At the end of the Engagement Period, either party may terminate
this Warrant Solicitation Agreement at any time, with or without
cause, upon providing written notice thereof, provided, however,
that regardless of which party elects to terminate its further
participation in the proposed transactions contemplated hereby and
the engagement by the Company of Dawson, upon such termination, the
Company will reimburse Dawson for, or otherwise pay and bear, the
expenses and fees to be paid and borne by the Company as provided
for in Paragraph 6 above.


 




 

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9. No Other
Agreements. The
Company represents and warrants to Dawson that the entry into this
Warrant Solicitation Agreement or any other action of the Company
in connection with the proposed Solicitation will not violate any
agreement between the Company and any other broker-dealer,
underwriter or financial advisor.

 

10. Information.
During the Engagement Period or until the completion of the
Solicitation, the Company agrees to cooperate with Dawson and to
furnish, or cause to be furnished, to Dawson, any and all
information and data concerning the Company, and the Solicitation
that Dawson reasonably deems appropriate (the “Information”).
The Company will provide Dawson reasonable access during normal
business hours from and after the date of execution of this Warrant
Solicitation Agreement until the date of the completion of the
Solicitation to such Information and Company personnel who maintain
such Information. Except as contemplated by the terms hereof or as
required by applicable law, Dawson will keep strictly confidential
all non-public Information concerning the Company provided to
Dawson. No obligation of confidentiality will apply to Information
that: (a) is in the public domain as of the date hereof or
hereafter enters the public domain without a breach by Dawson, (b)
was known or became known by Dawson prior to the Company’s
disclosure thereof to Dawson as demonstrated by the existence of
its written records, (c) becomes known to Dawson from a source
other than the Company, and other than by the breach of an
obligation of confidentiality owed to the Company, or (d) is
disclosed by the Company to a third party without restrictions on
its disclosure.

 

11. No Third Party
Beneficiaries; No Fiduciary Obligations. This Warrant
Solicitation Agreement does not create, and shall not be construed
as creating rights enforceable by any person or entity not a party
hereto, except those entitled hereto by virtue of the
indemnification provisions hereof. The Company acknowledges and
agrees that Dawson is not and shall not be construed as a fiduciary
of the Company and shall have no duties or liabilities to the
equity holders or the creditors of the Company or any other person
by virtue of this Warrant Solicitation Agreement or the retention
of Dawson hereunder, all of which are hereby expressly waived.
During the course of the Dawson engagement with the Company, Dawson
may have in its possession material, non-public information
regarding other companies that could potentially be relevant to the
Company or the transactions contemplated herein but which cannot be
shared due to an obligation of confidence to such other
companies.

 

12. Indemnification, Advancement &
Contribution.

 


(a)           Indemnification.
The Company agrees to indemnify and hold harmless Dawson, its
affiliates and each person controlling Dawson (within the meaning
of Section 15 of the Securities Act), and the directors, officers,
agents and employees of Dawson, its affiliates and each such
controlling person (Dawson, and each such entity or person
hereafter is referred to as an “Indemnified
Person”) from and against any losses, claims, damages,
judgments, assessments, costs and other liabilities (collectively,
the “Liabilities”),
and shall reimburse each Indemnified Person for all fees and
expenses (including the reasonable fees and expenses of counsel for
the Indemnified Persons) (collectively, the “Expenses”)
and agrees to advance payment of such Expenses as they are incurred
by an Indemnified Person in investigating, preparing, pursuing or
defending any actions, provided that the Indemnified Person is a
party thereto or is threatened in writing to be made a party
thereto, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in (i) the
Solicitation Materials (as from time to time each may be amended
and supplemented); (ii) any other materials or information provided
to investors by, or with the written approval of, the Company in
connection with the Solicitation, including any “road
show” or investor presentations made to investors by the
Company (whether in person or electronically) (the
“Presentation
Materials”); or (iii) any application or other
document or written communication (collectively called
“application”) executed by the Company or based upon
written information furnished by the Company in any jurisdiction in
order to qualify the Warrant Shares under the securities laws
thereof or to file for an exemption from such requirement with any
state securities commission or agency, any national securities
exchange; or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, unless such statement or
omission was made in reliance upon, and in conformity with,
information provided to the Company by Dawson in writing
specifically for use in the Registration Statement. The Company
also agrees to reimburse each Indemnified Person for all Expenses
as they are incurred in connection with such Indemnified
Person’s enforcement of his or its rights under this Section
12.


 




 

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(b)           Procedure.
Upon receipt by an Indemnified Person of notice of an action
against such Indemnified Person with respect to which indemnity may
reasonably be expected to be sought under this Section 12, such Indemnified Person shall promptly
notify the Company in writing; provided that failure by any
Indemnified Person so to notify the Company shall not relieve the
Company from any obligation or liability which the Company may have
on account of this Section 12 or
otherwise to such Indemnified Person, except to the extent that
such failure to notify shall prejudice the defense of such claim(s)
and then only to the extent of such prejudice. The Company shall,
if requested by Dawson, assume the defense of any such action
(including the employment of counsel selected by the Company, and
reasonably satisfactory to Dawson). Any Indemnified Person shall
have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company has failed promptly to assume the defense
of such claim for the benefit of Dawson and the other Indemnified
Persons or (ii) such Indemnified Person shall have been advised
that in the opinion of counsel that there is an actual or potential
conflict of interest that prevents (or makes it imprudent for) the
counsel engaged by the Company for the purpose of representing the
Indemnified Person, to represent both such Indemnified Person and
any other person represented or proposed to be represented by such
counsel. The Company shall not be liable for any settlement of any
action effected without its written consent (which shall not be
unreasonably withheld). In addition, the Company shall not, without
the prior written consent of Dawson (which consent shall not be
unreasonably withheld), settle, compromise or consent to the entry
of any judgment in or otherwise seek to terminate any pending or
threatened action in respect of which advancement, reimbursement,
indemnification or contribution may be sought hereunder (whether or
not such Indemnified Person is a party thereto) unless such
settlement, compromise, consent or termination: (i) includes an
unconditional release of each Indemnified Person, acceptable to
such Indemnified Party, from all Liabilities arising out of such
action for which indemnification or contribution may be sought
hereunder, and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on
behalf of any Indemnified Person. The advancement, reimbursement,
indemnification and contribution obligations of the Company
required hereby shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as every
Liability and Expense is incurred and is due and payable, and in
such amounts as fully satisfy each and every Liability and Expense
as it is incurred (and in no event later than 30 days following the
date of any invoice therefore). Notwithstanding anything contained
herein to the contrary, the Company will only be liable for the
fees and expenses of one law firm for all Indemnified
Persons.

 


(c)           Contribution.
In the event that a court of competent jurisdiction makes a finding
that indemnity is unavailable to an Indemnified Person, the Company
shall contribute to the Liabilities and Expenses paid or payable by
such Indemnified Person in such proportion as is appropriate to
reflect (i) the relative benefits to the Company, on the one hand,
and to Dawson and any other Indemnified Person, on the other hand,
of the matters contemplated by this Section 12 or (ii) if the allocation provided by the
immediately preceding clause is not permitted by applicable law,
not only such relative benefits but also the relative fault of the
Company, on the one hand, and Dawson and any other Indemnified
Person, on the other hand, in connection with the matters as to
which such Liabilities or Expenses relate, as well as any other
relevant equitable considerations; provided that in no event shall
the Company contribute less than the amount necessary to ensure
that all Indemnified Persons, in the aggregate, are not liable for
any Liabilities and Expenses in excess of the amount of
solicitation fees actually received by Dawson in the Solicitation.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the
one hand or Dawson on the other and the parties’ relative
intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and Dawson agree
that it would not be just and equitable if contributions pursuant
to this subsection (c) were determined by pro rata allocation or by
any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (c).
For purposes of this paragraph, the relative benefits to the
Company, on the one hand, and to Dawson on the other hand, of the
matters contemplated by this Section 12 shall be deemed to be in the same
proportion as: (a) the total value received by the Company in the
Solicitation, whether or not such Solicitation is consummated,
bears to (b) the solicitation fees paid to Dawson under this
Agreement. Notwithstanding the above, no person guilty of
fraudulent misrepresentation within the meaning of Section 11 of
the Securities Act shall be entitled to contribution from a party
who was not guilty of fraudulent misrepresentation.


 




 

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(d)           
Limitation. The
Company also agrees that no Indemnified Person shall have any
liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with advice or
services rendered or to be rendered by any Indemnified Person
pursuant to this Warrant Solicitation Agreement, the transactions
contemplated thereby or any Indemnified Person’s actions or
inactions in connection with any such advice, services or
transactions, except to the extent that a court of competent
jurisdiction has made a finding that Liabilities (and related
Expenses) of the Company have resulted from such Indemnified
Person’s gross negligence or willful misconduct in connection
with any such advice, actions, inactions or services.

 


13. Governing Law;
Venue. This Warrant Solicitation Agreement will be deemed to
have been made and delivered in the State of Florida and both the
binding provisions of this Warrant Solicitation Agreement and the
transactions contemplated hereby and by the Warrant Solicitation
Agreement will be governed as to validity, interpretation,
construction, effect and in all other respects by the internal laws
of the State of Florida, without regard to the conflict of laws
principles thereof. Each of Dawson and the Company: (i) agrees that
any legal suit, action or proceeding arising out of or relating to
this Warrant Solicitation Agreement and/or the transactions
contemplated hereby will be instituted exclusively in the courts
located in the Palm Beach County, Florida (ii) waives any objection
which it may have or hereafter to the venue of any such suit,
action or proceeding, and (iii) irrevocably consents to the
jurisdiction of the courts located in Palm Beach County, Florida in
any such suit, action or proceeding. Each of Dawson and the Company
further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding
in such courts and agrees that service of process upon the Company
mailed by certified mail to the Company’s address will be
deemed in every respect effective service of process upon the
Company, in any such suit, action or proceeding, and service of
process upon Dawson mailed by certified mail to Dawson’s
address will be deemed in every respect effective service process
upon Dawson, in any such suit, action or proceeding.
Notwithstanding any provision of this Warrant Solicitation
Agreement to the contrary, the Company agrees that neither Dawson
nor its affiliates, and the respective officers, directors,
employees, agents and representatives of Dawson, its affiliates and
each other person, if any, controlling Dawson or any of its
affiliates, will have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company for or in connection
with the engagement and transaction described herein except for any
such liability for losses, claims, damages or liabilities incurred
by the Company that are finally judicially determined to have
resulted from the bad faith or gross negligence of such individuals
or entities. Dawson will act under this Warrant Solicitation
Agreement as an independent contractor with duties to the
Company.


 




 

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If you
are in agreement with the foregoing, please sign and return to us
one copy of this Warrant Solicitation Agreement. This Warrant
Solicitation Agreement may be executed in counterparts (including
facsimile or .pdf counterparts), each of which shall be deemed an
original but all of which together shall constitute one and the
same instrument.


 


Very
truly yours,


 


DAWSON
JAMES SECURITIES, INC.


 


 


By
/s/ Robert D. Keyser,
Jr. 


     Name:
Robert D. Keyser, Jr.


 


     Title:
Chief Executive Officer


Accepted
and agreed as of


the
date first written above:


 


CEL-SCI
CORPORATION


 



By /s/ Geert Kersten






     Name:
Geert Kersten


 


     Title:
Chief Executive Officer


 


 


 




 

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Exhibit A


 


Representations,
Warranties and Covenants of the Company. The Company hereby
represents, warrants and covenants to Dawson as
follows:


 

(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company (the
“Subsidiaries”)
are set forth in the documents incorporated by reference into the
documents (the “Incorporated
Documents”), which were or are filed under the
Securities Exchange Act of 1934, as amended (the
“Exchange
Act”). The Company owns, directly or indirectly, all
of the capital stock or other equity interests of each Subsidiary
free and clear of any liens, charges, security interests,
encumbrances, rights of first refusal, preemptive rights or other
restrictions (collectively, “Liens”),
and all of the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.

 

(b) Organization and
Qualification. The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on
its business as currently conducted. Neither the Company nor any
Subsidiary is in violation or default of any of the provisions of
its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and
the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in:
(i) a material adverse effect on the legality, validity or
enforceability of this Agreement or any other agreement entered
into between the Company and the Warrant holders, (ii) a material
adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and
the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material
respect on a timely basis its obligations under this Agreement or
the transactions contemplated under the Solicitation Materials (any
of (i), (ii) or (iii), a “Material Adverse
Effect”) and no an action, claim, suit, investigation
or proceeding (including, without limitation, an informal
investigation or partial proceeding, such as a deposition), whether
commenced or threatened (“Proceeding”)
has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.

 

(c) Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and the Solicitation Materials and
otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of this Agreement by the Company
and the consummation by it of the transactions contemplated hereby
and thereby and under the Solicitation Materials have been duly
authorized by all necessary action on the part of the Company and
no further action is required by the Company, the Company’s
Board of Directors (the “Board of
Directors”) or the Company’s stockholders in
connection therewith other than in connection with the Required
Approvals (as defined below). This Agreement has been duly executed
by the Company and, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.


 







 

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(d) No
Conflicts. The execution, delivery and performance by the
Company of this Agreement and the transactions contemplated
pursuant to the Solicitation Materials, the issuance and sale of
the Warrant Shares (the “Securities”)
and the consummation by it of the transactions contemplated hereby
and thereby to which it is a party do not and will not (i) conflict
with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents, or (ii) conflict
with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the
Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a Material Adverse Effect.

 

(e) Filings, Consents
and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person (as
defined below) in connection with the execution, delivery and
performance by the Company of this Agreement and the transactions
contemplated pursuant to the Solicitation Materials, other than:
(i) the filing with the Commission of a Registration Statement,
(ii) filings with the NYSE American and (iii) such filings as are
required to be made under applicable state securities laws, if any
(collectively, the “Required
Approvals”). “Persons”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.

 

(f) Issuance of the
Securities; Registration. The Securities are duly authorized
and, when issued and paid for in accordance with the Solicitation
Materials, will be duly and validly issued, fully paid and
non-assessable, free and clear of all Liens imposed by the Company.
The Warrant Shares, when issued in accordance with the terms of the
Warrants, will be validly issued, fully paid and non-assessable,
free and clear of all Liens imposed by the Company. The Company has
reserved from its duly authorized capital stock the maximum number
of shares of Common Stock issuable pursuant to the
Warrants.


 







 

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(g) Capitalization.
The capitalization of the Company is as set forth in the
Incorporated Documents. The Company has not issued any capital
stock since its most recently filed periodic report under the
Exchange Act. other than as described in the Incorporated
Documents, pursuant to the issuance or exercise of employee stock
options under the Company’s stock option plans, the issuance
of shares of Common Stock to employees pursuant to the
Company’s employee stock purchase plans and pursuant to the
conversion and/or exercise of securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at
any time any Common Stock, including, without limitation, any debt,
preferred stock, rights, options, warrants or other instrument that
is at any time convertible into or exercisable or exchangeable for,
or otherwise entitles the holder thereof to receive, Common Stock
(“Common Stock
Equivalents”) outstanding as of the date of the most
recently filed periodic report under the Exchange Act. No Person
has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the
transactions contemplated by this Agreement and the transactions
contemplated pursuant to the Solicitation Materials. Except as a
result of the purchase and sale of the Securities or as set forth
in the Incorporated Documents, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares
of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common
Stock Equivalents. The issuance and sale of the Securities will not
obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Warrant holders) and will
not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of the
Company are validly issued, fully paid and non-assessable, have
been issued in compliance with all federal and state securities
laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or
purchase securities. No further approval or authorization of any
stockholder, the Board of Directors or others is required for the
issuance and sale of the Securities. There are no stockholders
agreements, voting agreements or other similar agreements with
respect to the Company’s capital stock to which the Company
is a party or, to the knowledge of the Company, between or among
any of the Company’s stockholders.

 

(h) SEC Reports;
Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the
Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, together with the
Prospectus and the Registration Statement, being collectively
referred to herein as the “SEC
Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act,
as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the
periods involved (“GAAP”),
except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present
in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.


 







 

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(i) Material Changes;
Undisclosed Events, Liabilities or Developments. Since the
date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC
Report filed prior to the date hereof, (i) there has been no event,
occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made
with the Commission, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer,
director or Affiliate (as defined below), except pursuant to
existing Company stock option plans. The Company does not have
pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Securities
contemplated by the Solicitation Materials or disclosed in the
Solicitation Materials, no event, liability, fact, circumstance,
occurrence or development has occurred or exists or is reasonably
expected to occur or exist with respect to the Company or its
Subsidiaries or their respective business, prospects, properties,
operations, assets or financial condition that would be required to
be disclosed by the Company under applicable securities laws at the
time this representation is made or deemed made that has not been
publicly disclosed at least 1 trading day prior to the date that
such representation is made. “Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.

 

(j) Litigation.
Except as set forth in the SEC Reports, there is no action, suit,
inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of this Agreement and the transactions
contemplated pursuant to the Solicitation Materials or the
Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor any director or
officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has
not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or
the Securities Act.

 

(k) Labor
Relations. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the
employees of the Company, which could reasonably be expected to
result in a Material Adverse Effect. None of the Company’s or
its Subsidiaries’ employees is a member of a union that
relates to such employee’s relationship with the Company or
such Subsidiary, and neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and
the Company and its Subsidiaries believe that their relationships
with their employees are good. No executive officer, to the
knowledge of the Company, is, or is now expected to be, in
violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the
continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.


 







 

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(l) Compliance.
Except as set forth in the SEC Reports, neither the Company nor any
Subsidiary: (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or
lapse of time or both, would result in a default by the Company or
any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it
is in violation of, any indenture, loan or credit agreement or any
other agreement or instrument to which it is a party or by which it
or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any judgment,
decree or order of any court, arbitrator or governmental body or
(iii) is or has been in violation of any statute, rule, ordinance
or regulation of any governmental authority, including without
limitation all foreign, federal, state and local laws relating to
taxes, environmental protection, occupational health and safety,
product quality and safety and employment and labor matters, except
in each case as could not have or reasonably be expected to result
in a Material Adverse Effect.

 

(m) Regulatory
Permits. Except as set forth in the SEC Reports, the Company
and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports, except where the
failure to possess such permits could not reasonably be expected to
result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation
or modification of any Material Permit.

 

(n) Title to
Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by
them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for
Liens as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries and Liens for
the payment of federal, state or other taxes, the payment of which
is neither delinquent nor subject to penalties. Any real property
and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases
with which the Company and the Subsidiaries are in
compliance.

 

(o) Patents and
Trademarks. The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or material for use in
connection with their respective businesses as described in the SEC
Reports and which the failure to so have could have a Material
Adverse Effect (collectively, the “Intellectual
Property Rights”). None of, and neither the Company
nor any Subsidiary has received a notice (written or otherwise)
that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate
or be abandoned, within two (2) years from the date of this
Agreement. Neither the Company nor any Subsidiary has received,
since the date of the latest audited financial statements included
within the SEC Reports, a notice (written or otherwise) of a claim
or otherwise has any knowledge that the Intellectual Property
Rights violate or infringe upon the rights of any Person, except as
would not have a Material Adverse Effect. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and
there is no existing infringement by another Person of any of the
Intellectual Property Rights. The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.


 







 

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(p) Insurance.
The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses
in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage.
Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business
without a significant increase in cost.

 

(q) Transactions With
Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to
the knowledge of the Company, none of the employees of the Company
is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than for (i) payment of salary or
consulting fees for services rendered, (ii) reimbursement for
expenses incurred on behalf of the Company and (iii) other employee
benefits, including stock option agreements under any stock option
plan of the Company.

 

(r) Sarbanes-Oxley;
Internal Accounting Controls. The Company is in compliance
with any and all applicable requirements of the Sarbanes-Oxley Act
of 2002 that are effective as of the date hereof, and any and all
applicable rules and regulations promulgated by the Commission
thereunder that are effective as of the date hereof. The Company
and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and designed such disclosure
controls and procedures to ensure that information required to be
disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules
and forms. The Company’s certifying officers have evaluated
the effectiveness of the Company’s disclosure controls and
procedures as of the end of the period covered by the
Company’s most recently filed periodic report under the
Exchange Act (such date, the “Evaluation
Date”). The Company presented in its most recently
filed periodic report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no
changes in the Company’s internal control over financial
reporting (as such term is defined in the Exchange Act) that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial
reporting.


 







 

12








 





  




(s) Certain
Fees. Except as set forth in the Solicitation Materials, no
brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by this
Agreement and the transactions contemplated pursuant to the
Solicitation Materials. The Warrant holders shall have no
obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type
contemplated in this section that may be due in connection with the
transactions contemplated by this Agreement and the transactions
contemplated pursuant to the Solicitation Materials.

 

(t) Investment
Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not
be or be an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that
it will not become an “investment company” subject to
registration under the Investment Company Act of 1940, as
amended.

 

(u) Listing and
Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge
is likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act nor has the Company
received any notification that the Commission is contemplating
terminating such registration. The Company has not, in the 12
months preceding the date hereof, received notice from the NYSE
American to the effect that the Company is not in compliance with
the listing or maintenance requirements of the NYSE American. The
Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such
listing and maintenance requirements.

 

(v) Application of
Takeover Protections. The Company and the Board of Directors
have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become
applicable to the Warrant holders as a result of the Warrant
holders and the Company fulfilling their obligations or exercising
their rights under this Agreement and the transactions contemplated
pursuant to the Solicitation Materials, including without
limitation as a result of the Company’s issuance of the
Securities and the Warrant holders’ ownership of the
Securities.

 

(w) Disclosure.
Except with respect to the material terms and conditions of the
transactions contemplated by this Agreement and the transactions
contemplated pursuant to the Solicitation Materials, the Company
confirms that neither it nor any other Person acting on its behalf
has provided any of the Warrant holders or their agents or counsel
with any information that it believes constitutes or might
constitute material, non-public information which is not otherwise
disclosed in the Solicitation Materials. The Company understands
and confirms that the Warrant holders will rely on the foregoing
representation in effecting transactions in securities of the
Company. All of the disclosure furnished by or on behalf of the
Company to the Warrant holders regarding the Company, its business
and the transactions contemplated hereby, is true and correct and
does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were
made, not misleading. The press releases disseminated by the
Company during the twelve months preceding the date of this
Agreement taken as a whole do not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made
and when made, not misleading.


 







 

13








 





  




(x) Solvency.
Based on the consolidated financial condition of the Company as of
the date hereof (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in
respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, and projected capital requirements and capital
availability thereof, and (iii) the current cash flow of the
Company, together with the proceeds the Company would receive, were
it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its liabilities when such amounts are
required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in
respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the
date hereof.

 

(y) Tax Status.
Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company and each Subsidiary (i) has made or
filed all United States federal and state income and all foreign
income and franchise tax returns, reports and declarations required
by any jurisdiction to which it is subject, (ii) has paid all taxes
and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim.

 

(z) Foreign Corrupt
Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company,
has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or
campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on
its behalf of which the Company is aware) which is in violation of
law, or (iv) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended.

 

(aa) Accountants.
The Company’s accounting firm is set forth in the
Incorporated Documents. To the knowledge and belief of the Company,
such accounting firm (i) is a registered public accounting firm as
required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the
Company’s Annual Report for the year ended September 30,
2020.

 

(bb) Office
of Foreign Assets Control. Neither the Company nor, to the
Company's knowledge, any director, officer, agent, employee or
affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”).


 







 

14








 





  




(cc) Money
Laundering. The operations of the Company are and have been
conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations
thereunder (collectively, the “Money Laundering
Laws”), and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company,
threatened.

 

(dd) Forward-Looking
Statements. No forward-looking statements (within the
meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in the Solicitation Materials has been made
or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.

 

(ee) Statistical
or Market-Related Data. Any statistical, industry-related
and market-related data included or incorporated by reference in
the Solicitation Materials, are based on or derived from sources
that the Company reasonably and in good faith believes to be
reliable and accurate, and such data agree with the sources from
which they are derived.

 

(ff) FINRA
Affiliations. There are no affiliations with any FINRA
member firm among the Company’s officers, directors or, to
the knowledge of the Company, any five percent (5%) or greater
stockholder of the Company.

 


 


 


 


 




 

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