Document:

Exhibit

Exhibit 4.4

THE SOUTHERN COMPANY

TO

WELLS FARGO BANK, NATIONAL ASSOCIATION,
TRUSTEE

_______________

SECOND SUPPLEMENTAL INDENTURE

DATED AS OF SEPTEMBER 15, 2016

_______________

$800,000,000

SERIES 2016A 5.25% JUNIOR SUBORDINATED NOTES

DUE OCTOBER 1, 2076

TABLE OF CONTENTS1 

	
				
	 
	 
	PAGE

	 
	 
	 

	ARTICLE 1
	1
	

	 
	SECTION 101.  Establishment
	1
	

	 
	SECTION 102.  Definitions
	2
	

	 
	SECTION 103.  Payment of Principal and Interest
	4
	

	 
	SECTION 104.  Deferral of Interest Payments
	4
	

	 
	SECTION 105.  Denominations
	6
	

	 
	SECTION 106.  Global Securities
	6
	

	 
	SECTION 107.  Transfer
	7
	

	 
	SECTION 108.  Redemption at the Company’s Option
	7
	

	 
	SECTION 109.  Events of Default
	7
	

	 
	 
	 

	ARTICLE 2
	8
	

	 
	SECTION 201.  Recitals by Company
	8
	

	 
	SECTION 202.  Ratification and Incorporation of Original Indenture
	8
	

	 
	SECTION 203.  Executed in Counterparts
	8
	

	
			
	EXHIBIT A
	Form of Series 2016A Note
	A-1

	EXHIBIT B
	Certificate of Authentication
	B-1

___________________________
1This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions.

i

THIS SECOND SUPPLEMENTAL INDENTURE is made as of the 15th day of September, 2016, by and between THE SOUTHERN COMPANY, a Delaware corporation, 30 Ivan Allen Jr. Blvd., N.W., Atlanta, Georgia  30308 (the “Company”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, 150 East 42nd Street, 40th Floor, New York, New York 10017 (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the Company has heretofore entered into a Subordinated Note Indenture, dated as of October 1, 2015 (the “Original Indenture”), with Wells Fargo Bank, National Association;

WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as heretofore supplemented and as further supplemented by this Second Supplemental Indenture, is herein called the “Indenture”;

WHEREAS, under the Original Indenture, a new series of Junior Subordinated Notes may at any time be established pursuant to a supplemental indenture executed by the Company and the Trustee;

WHEREAS, the Company proposes to create under the Indenture a new series of Junior Subordinated Notes;

WHEREAS, additional Junior Subordinated Notes of other series hereafter established, except as may be limited in the Original Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and

WHEREAS, all conditions necessary to authorize the execution and delivery of this Second Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed.

NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1
Series 2016A Junior Subordinated Notes

SECTION 101.  Establishment.  There is hereby established a new series of Junior Subordinated Notes to be issued under the Indenture, to be designated as the Company’s Series 2016A 5.25% Junior Subordinated Notes due October 1, 2076 (the “Series 2016A Notes”).

There are to be authenticated and delivered $800,000,000 principal amount of Series 2016A Notes, and such principal amount of the Series 2016A Notes may be increased from time to time pursuant to Section 301 of the Original Indenture.  All Series 2016A Notes need not be issued at the 

same time and such series may be reopened at any time, without the consent of any Holder, for issuances of additional Series 2016A Notes.  Any such additional Series 2016A Notes will have the same interest rate, maturity and other terms as those initially issued (except for the public offering price and issue date and the initial interest accrual date and initial Interest Payment Date (as defined below), if applicable).  No Series 2016A Notes shall be authenticated and delivered in excess of the principal amount as so increased except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture.  The Series 2016A Notes shall be issued in fully registered form.

The Series 2016A Notes shall be issued in the form of one or more Global Securities in substantially the form set out in Exhibit A hereto.  The Depositary with respect to the Series 2016A Notes shall be The Depository Trust Company.  

The form of the Trustee’s Certificate of Authentication for the Series 2016A Notes shall be in substantially the form set forth in Exhibit B hereto.

Each Series 2016A Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for.

SECTION 102.  Definitions.  The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below.  Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture.

“Additional Interest” has the meaning set forth in Section 104 of this Second Supplemental Indenture.

“Administrative Action” means any judicial decision or any official administrative pronouncement, ruling, regulatory procedure, notice or announcement including any notice or announcement of intent to issue or adopt any administrative pronouncement, ruling, regulatory procedure or regulation.

“Applicable Rating Agency” means any Rating Agency that (i)(a) published a rating for the Company on the date of initial issuance of the Series 2016A Notes and (b) publishes a rating for the Company at such time as a Rating Agency Event occurs, or (ii) any successor to a Rating Agency described in the preceding clause (i).

“Interest Payment Dates” means January 1, April 1, July 1 and October 1 of each year, commencing January 1, 2017.

“Optional Deferral Period” has the meaning set forth in Section 104 of this Second Supplemental Indenture.

“Original Issue Date” means September 15, 2016.

“Rating Agency” means any nationally recognized statistical rating organization (within the meaning of Section 3(a)(62) of the Securities Exchange Act of 1934, as amended).

    

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“Rating Agency Event” means a change to the methodology or criteria that were employed by an Applicable Rating Agency for purposes of assigning equity credit to securities such as the Series 2016A Notes on the date of initial issuance of the Series 2016A Notes (the “current methodology”), which change either (i) shortens the period of time during which equity credit pertaining to the Series 2016A Notes would have been in effect had the current methodology not been changed by the Applicable Rating Agency, or (ii) reduces the amount of equity credit assigned to the Series 2016A Notes by the Applicable Rating Agency as compared with the amount of equity credit that such Rating Agency assigned to the Series 2016A Notes as of the date of initial issuance of the Series 2016A Notes.

“Regular Record Date” means, with respect to each Interest Payment Date, the close of business (i) on the Business Day immediately preceding such Interest Payment Date if any Series 2016A Notes are issuable in the form of one or more Global Securities or (ii) on the 15th calendar day preceding such Interest Payment Date if no Series 2016A Notes are issuable in the form of one or more Global Securities (whether or not a Business Day).

“Securities Rate” has the meaning set forth in Section 103 of this Second Supplemental Indenture.

“Stated Maturity” means October 1, 2076.

“Tax Event” means that the Company shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of: 

(a) any amendment to, clarification of, or change, including any announced prospective change, in the laws or treaties of the United States or any political subdivisions or taxing authorities, or any regulations under those laws or treaties; 

(b) an Administrative Action; 

(c) any amendment to, clarification of, or change in the official position or the interpretation of any Administrative Action or any interpretation or pronouncement that provides for a position with respect to an Administrative Action that differs from the previously generally accepted position, in each case by any legislative body, court, governmental authority or regulatory body, regardless of the time or manner in which that amendment, clarification or change is introduced or made known; or

(d) a threatened challenge asserted in writing in connection with an audit of the Company or an audit of any of the subsidiaries of the Company, or a publicly-known threatened challenge asserted in writing against any other taxpayer that has raised capital through the issuance of securities that are substantially similar to the Series 2016A Notes, 

which amendment, clarification or change is effective or the Administrative Action is taken or issued, or interpretation or pronouncement is issued or threatened challenge is asserted or becomes publicly-known after the date of original issuance of the Series 2016A Notes, there is more than an 

3

insubstantial risk that interest payable by the Company on the Series 2016A Notes is not deductible, or within 90 days of the date of such opinion would not be deductible, in whole or in part, by the Company for United States federal income tax purposes.

SECTION 103.  Payment of Principal and Interest.  The principal of the Series 2016A Notes shall be due at the Stated Maturity (unless earlier redeemed).  The unpaid principal amount of the Series 2016A Notes shall bear interest at the rate of 5.25% per annum (the “Securities Rate”) until paid or duly provided for.  Interest shall be paid quarterly in arrears on each Interest Payment Date to the Person in whose name the Series 2016A Notes are registered at the close of business on the Regular Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity or on a Redemption Date as provided herein will be paid to the Person to whom principal is payable.  So long as an Optional Deferral Period is not occurring, any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series 2016A Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Series 2016A Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series 2016A Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture.

Payments of interest on the Series 2016A Notes will include interest accrued to but excluding the respective Interest Payment Dates.  Interest payments for the Series 2016A Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months.  In the event that any date on which interest is payable on the Series 2016A Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable.

Payment of the principal and interest (including Additional Interest) due at the Stated Maturity or earlier redemption of the Series 2016A Notes shall be made upon surrender of the Series 2016A Notes at the Corporate Trust Office of the Trustee.  The principal of and interest on the Series 2016A Notes (including Additional Interest) shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Payments of interest (including interest on any Interest Payment Date)(including Additional Interest) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto.

SECTION 104.  Deferral of Interest Payments.  So long as no Event of Default has occurred and is continuing, the Company may, at its option, on one or more occasions, defer payment of all or part of the current and accrued interest otherwise due on the Series 2016A Notes by extending the interest payment period for up to forty (40) consecutive quarterly periods (each period, commencing on the date that the first such interest payment would otherwise have been made, an “Optional 

4

Deferral Period”).  A deferral of interest payments may not extend beyond the Stated Maturity or end on a day other than an Interest Payment Date.  Any deferred interest on the Series 2016A Notes will accrue additional interest at the Securities Rate from the applicable Interest Payment Date to the date of payment, compounded quarterly (such deferred interest and additional interest accrued thereon, “Additional Interest”), to the extent permitted under applicable law. No interest shall be due and payable during an Optional Deferral Period, except at the end of such Optional Deferral Period or upon a redemption of the Series 2016A Notes during such Optional Deferral Period.

So long as no Event of Default has occurred and is continuing, prior to the termination of any Optional Deferral Period, the Company may further defer the payment of interest by extending such Optional Deferral Period; provided that such Optional Deferral Period together with all such previous and further deferrals of interest payments shall not exceed forty (40) consecutive quarterly periods at any one time or extend beyond the Stated Maturity.  Upon the termination of any Optional Deferral Period, which shall be an Interest Payment Date, the Company shall pay all interest accrued and unpaid on the Series 2016A Notes, including any Additional Interest, to the Person in whose name the Series 2016A Notes are registered on the Regular Record Date for such Interest Payment Date, provided that interest accrued and unpaid on the Series 2016A Notes, including any Additional Interest, payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable.  Once the Company pays all interest accrued and unpaid on the Series 2016A Notes, including any Additional Interest, it shall be entitled again to defer interest payments on the Series 2016A Notes as described above. 

During an Optional Deferral Period, subject to the next succeeding sentence, the Company (a) shall not declare or pay any dividend or make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, and (b) shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by the Company which rank pari passu with or junior to the Series 2016A Notes.  The preceding sentence, however, shall not restrict (i) any of the actions described in the preceding sentence resulting from any reclassification of the Company’s capital stock or the exchange or conversion of one class or series of the Company’s capital stock for another class or series of the Company’s capital stock, (ii) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (iii) dividends, payments or distributions payable in shares of capital stock, (iv) redemptions, purchases or other acquisitions of shares of capital stock in connection with any employment contract, incentive plan, benefit plan or other similar arrangement of the Company or any of its subsidiaries or in connection with a dividend reinvestment or stock purchase plan, or (v) any declaration of a dividend in connection with implementation of any stockholders’ rights plan, or the issuance of rights, stock or other property under any such plan, or the redemption, repurchase or other acquisition of any such rights pursuant thereto.

The Company shall provide to the Trustee notice, as provided in Section 105 of the Original Indenture, of its selection or extension of an Optional Deferral Period at least 10 Business Days and not more than 60 Business Days prior to the earlier of (a) the next applicable Interest Payment Date or (b) the date, if any, upon which the Company is required to give notice 

5

of such Interest Payment Date or the Regular Record Date thereof to the New York Stock Exchange or any applicable self-regulatory organization.  In addition, the Company shall deliver to the Trustee an Officers’ Certificate stating that no default or Event of Default shall have occurred and be continuing.  Subject to receipt of such Officers’ Certificate, the Trustee shall forward such notice promptly to the Holders of the Series 2016A Notes as provided in Section 106 of the Original Indenture.

SECTION 105.  Denominations.  The Series 2016A Notes may be issued in the denominations of $25.00, or any integral multiple thereof.

SECTION 106.  Global Securities.  The Series 2016A Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Series 2016A Notes represented by one or more Global Securities will not be exchangeable for, and will not otherwise be issuable as, Series 2016A Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee.

Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series 2016A Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of Holders of such Global Security shall be exercised only through the Depositary.

Subject to the procedures of the Depositary, a Global Security shall be exchangeable for Series 2016A Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Company, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Company, in each case within 90 days after the Company receives such notice or becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Series 2016A Notes. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series 2016A Notes registered in such names as the Depositary shall direct.

Neither the Company, the Trustee nor any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

    

6

SECTION 107.  Transfer.  No service charge will be made for any transfer or exchange of Series 2016A Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.

The Company shall not be required (a) to issue, register the transfer of or exchange any Series 2016A Notes during a period beginning at the opening of business fifteen (15) days before the date of the mailing of a notice pursuant to Section 1104 of the Original Indenture identifying the serial numbers of the Series 2016A Notes to be called for redemption, and ending at the close of business on the date of the mailing, or (b) to register the  transfer or exchange any Series 2016A Notes theretofore selected for redemption in whole or in part, except the unredeemed portion of any Series 2016A Notes redeemed in part.

SECTION 108.  Redemption at the Company’s Option.  At any time and from time to time on or after October 1, 2021, the Series 2016A Notes will be subject to redemption at the option of the Company in whole or in part upon not less than 30 nor more than 60 days’ notice, at a Redemption Price equal to 100% of the principal amount of the Series 2016A Notes being redeemed plus accrued and unpaid interest (including any Additional Interest) on the Series 2016A Notes being redeemed to the Redemption Date.  

In addition, before October 1, 2021, if a Tax Event shall occur and be continuing, the Company may redeem the Series 2016A Notes following the occurrence  of that Tax Event, in whole, but not in part, at a Redemption Price equal to 100% of the principal amount to be redeemed plus any accrued but unpaid interest (including any Additional Interest) to the Redemption Date.

In addition, before October 1, 2021, if a Rating Agency Event shall occur and be continuing, the Company may redeem the Series 2016A Notes following the occurrence of that Rating Agency Event, in whole, but not in part, at a Redemption Price equal to 102% of the principal amount to be redeemed plus any accrued but unpaid interest (including any Additional Interest) to the Redemption Date.

In the event of redemption of the Series 2016A Notes in part only, a new Series 2016A Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof.

The Series 2016A Notes will not have a sinking fund.

Notice of redemption shall be given as provided in Section 1104 of the Original Indenture.

Any redemption of less than all of the Series 2016A Notes shall, with respect to the principal thereof, be divisible by $25.00.

SECTION 109.  Events of Default.

The Event of Default set forth in Section 501(5) of the Original Indenture shall not apply to the Series 2016A Notes.  The Events of Default set forth in paragraphs (1), (3), (6) and (7) shall apply to the Series 2016A Notes.  

    

7

For purposes of this Section 109, the term “Default” means the following event:  default in the performance or breach of any covenant or warranty of the Company in the Indenture (other than a covenant or warranty (i) a default in whose performance or whose breach is addressed in any paragraph of Section 501 of the Original Indenture (other than Section 501(5)) or (ii) which has expressly been included in the Indenture solely for the benefit of one or more series of Junior Subordinated Notes other than the Series 2016A Notes), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Series 2016A Notes, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Covenant Default” hereunder.

Upon the occurrence and continuance of a Default, the Trustee and the Holders of the Series 2016A Notes shall have the same rights and remedies, and shall be subject to the same limitations, restrictions, protections and exculpations, and the Company shall be subject to the same obligations and restrictions, in each case, as would apply if such Default was an Event of Default or an event which after notice or lapse of time or both would become an Event of Default; provided, that the principal of and accrued interest on the Series 2016A Notes may not be declared immediately due and payable by reason of the occurrence and continuation of a Default, and any notice of declaration or acceleration based on such Default shall be null and void with respect to the Series 2016A Notes; provided, further that in case a Default has occurred and is continuing, the Trustee shall not be subject to Section 601(b) of the Original Indenture unless an Event of Default has occurred and is continuing.  

ARTICLE 2

Miscellaneous Provisions

SECTION 201.  Recitals by Company.  The recitals in this Second Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Series 2016A Notes and of this Second Supplemental Indenture as fully and with like effect as if set forth herein in full.

SECTION 202.  Ratification and Incorporation of Original Indenture.  As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture, as supplemented by this Second Supplemental Indenture shall be read, taken and construed as one and the same instrument.

SECTION 203.  Executed in Counterparts.  This Second Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

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IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officer, all as of the day and year first above written.

	
				
	 
	THE SOUTHERN COMPANY
	 

	 
	 
	

	 

	 
	By:
	/s/Art P. Beattie
	 

	 
	 
	Art P. Beattie
Executive Vice President and Chief Financial Officer
	 

	 
	 
	

	 

	 
	WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee

	 
	 
	

	 

	 
	By:
	/s/Stefan Victory
	 

	 
	 
	Stefan Victory
Vice President
	 

EXHIBIT A

FORM OF SERIES 2016A NOTE

	
		
	NO. __
	CUSIP NO. 842587 305

THE SOUTHERN COMPANY
SERIES 2016A 5.25% JUNIOR SUBORDINATED NOTE
DUE OCTOBER 1, 2076

	
			
	 
	Principal Amount:
	$__________

	 
	 
	 

	 
	Regular Record Date:
	One Business Day prior to Interest Payment Date (if any Series 2016A Notes are issuable in the form of one or more Global Securities) or 15th calendar day prior to Interest Payment Date (if no Series 2016A Notes are issuable in the form of one or more Global Securities) 

	 
	 
	 

	 
	Original Issue Date:
	September 15, 2016

	 
	 
	 

	 
	Stated Maturity:
	October 1, 2076

	 
	 
	 

	 
	Interest Payment Dates:
	January 1, April 1, July 1 and October 1

	 
	 
	 

	 
	Interest Rate:
	5.25% per annum

	 
	 
	 

	 
	Authorized Denomination:
	$25.00

The Southern Company, a Delaware corporation (the “Company,” which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to _____________________________________, or registered assigns, the principal sum of _________ DOLLARS ($__________) on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on each Interest Payment Date as specified above, commencing on January 1, 2017 and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above until the principal hereof is paid or made available for payment and at such rate on any overdue principal and on any overdue installment of interest.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Note (the “Note”) is registered at the close of business on the Regular Record 

A-1

Date as specified above next preceding such Interest Payment Date, provided that any interest payable at the Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable.  Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.

Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates.  Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months.  In the event that any date on which interest is payable on this Note is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable.  A “Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business.

So long as no Event of Default shall have occurred and be continuing, the Company may, at its option, on one or more occasions, defer payment of all or part of the current and accrued interest otherwise due on the Series 2016A Notes by extending the interest payment period for up to forty (40) consecutive quarterly periods (each period, commencing on the date that the first such interest payment would otherwise have been made, an “Optional Deferral Period”).  A deferral of interest payments may not extend beyond the Stated Maturity or end on a day other than an Interest Payment Date.  As provided in the Indenture, Additional Interest on the Series 2016A Notes will accrue to the extent permitted by law.  No interest shall be due and payable during an Optional Deferral Period, except at the end of such Optional Deferral Period or upon a redemption of the Series 2016A Notes during such Optional Deferral Period.

So long as no Event of Default shall have occurred and be continuing, prior to the termination of any Optional Deferral Period, the Company may further defer the payment of interest by extending such Optional Deferral Period; provided that such Optional Deferral Period together with all such previous and further deferrals of interest payments shall not exceed forty (40) consecutive quarterly periods at any one time or extend beyond the Stated Maturity.  Upon the termination of any Optional Deferral Period, which shall be an Interest Payment Date, the Company shall pay all interest accrued and unpaid on the Series 2016A Notes, including any Additional Interest, to the Person in whose name the Series 2016A Notes are registered on the Regular Record Date for such Interest Payment Date, provided that interest accrued and unpaid on the Series 2016A Notes, including any Additional Interest, payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable.  Once the Company pays all interest 

A-2

accrued and unpaid on the Series 2016A Notes, including any Additional Interest, it shall be entitled again to defer interest payments on the Series 2016A Notes as described above.  

During an Optional Deferral Period, subject to the next succeeding sentence, (a) the Company shall not declare or pay any dividend or make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, and (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by the Company which rank pari passu with or junior to the Series 2016A Notes.  The preceding sentence, however, shall not restrict (i) any of the actions described in the preceding sentence resulting from any reclassification of the Company’s capital stock or the exchange or conversion of one class or series of the Company’s capital stock for another class or series of the Company’s capital stock, (ii) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (iii) dividends, payments or distributions payable in shares of capital stock, (iv) redemptions, purchases or other acquisitions of shares of capital stock in connection with any employment contract, incentive plan, benefit plan or other similar arrangement of the Company or any of its subsidiaries or in connection with a dividend reinvestment or stock purchase plan, or (v) any declaration of a dividend in connection with implementation of any stockholders’ rights plan, or the issuance of rights, stock or other property under any such plan, or the redemption, repurchase or other acquisition of any such rights pursuant thereto.

The Company shall provide to the Trustee written notice of its selection or extension of an Optional Deferral Period at least 10 Business Days and not more than 60 Business Days prior to the earlier of (a) the next applicable Interest Payment Date or (b) the date, if any, upon which the Company is required to give notice of such Interest Payment Date or the Regular Record Date thereof to the New York Stock Exchange or any applicable self-regulatory organization.  The Trustee shall forward such notice promptly to the Holders of the Series 2016A Notes.
    
Payment of the principal of and interest (including Additional Interest) due at the Stated Maturity or earlier redemption of the Series 2016A Notes shall be made upon surrender of the Series 2016A Notes at the Corporate Trust Office of the Trustee.  The principal of and interest on the Series 2016A Notes (including Additional Interest) shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Payment of interest (including interest on an Interest Payment Date)(including Additional Interest) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto.

The indebtedness evidenced by this Note, including the principal hereof and interest hereon, is, to the extent provided in the Indenture, subordinate and junior in right of payment  and upon liquidation to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this Note is issued subject to the provisions of the Indenture with respect thereto.  Each Holder of 

A-3

this Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided, and (c) appoints the Trustee his attorney-in-fact for any and all such purposes.  Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

A-4

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:  

	
				
	 
	THE SOUTHERN COMPANY

	 
	 
	 
	 

	 
	By:
	 
	 

	 
	Title:
	 
	 

	 
	 
	 
	 

	Attest:
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	Title:
	 
	 
	 

	 
	 
	 
	 

{Seal of THE SOUTHERN COMPANY appears here}

A-5

CERTIFICATE OF AUTHENTICATION

This is one of the Junior Subordinated Notes referred to in the within-mentioned Indenture.

	
			
	 
	WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee

	 
	 
	 

	 
	By:
	 

	 
	 
	Authorized Signatory

A-6

(Reverse Side of Note)

This Note is one of a duly authorized issue of Junior Subordinated Notes of the Company (the “Notes”), issued and issuable in one or more series under a Subordinated Note Indenture, dated as of October 1, 2015, as supplemented (the “Indenture”), between the Company and Wells Fargo Bank, National Association, Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered.  This Note is one of the series designated on the face hereof as Series 2016A 5.25% Junior Subordinated Notes due October 1, 2076 (the “Series 2016A Notes”) which is unlimited in principal amount.  Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture.

The Series 2016A Notes will not have a sinking fund.

At any time and from time to time on or after October 1, 2021, the Series 2016A Notes will be subject to redemption at the option of the Company in whole or in part upon not less than 30 nor more than 60 days’ notice, at a Redemption Price equal to 100% of the principal amount of the Series 2016A Notes being redeemed plus accrued and unpaid interest (including any Additional Interest) on the Series 2016A Notes being redeemed to the Redemption Date.  

In addition, if a Tax Event shall occur and be continuing, the Company may redeem the Series 2016A Notes following the occurrence  of that Tax Event, in whole, but not in part, before October 1, 2021, at a Redemption Price equal to 100% of the principal amount to be redeemed plus any accrued but unpaid interest (including any Additional Interest) to the Redemption Date.

“Administrative Action” means any judicial decision or any official administrative pronouncement, ruling, regulatory procedure, notice or announcement including any notice or announcement of intent to issue or adopt any administrative pronouncement, ruling, regulatory procedure or regulation.

“Tax Event” means that the Company shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of: 

(a) any amendment to, clarification of, or change, including any announced prospective change, in the laws or treaties of the United States or any political subdivisions or taxing authorities, or any regulations under those laws or treaties; 

(b) an Administrative Action; 

(c) any amendment to, clarification of, or change in the official position or the interpretation of any Administrative Action or any interpretation or pronouncement that provides for a position with respect to an Administrative Action that differs from the previously generally accepted 

A-7

position, in each case by any legislative body, court, governmental authority or regulatory body, regardless of the time or manner in which that amendment, clarification or change is introduced or made known; or

(d) a threatened challenge asserted in writing in connection with an audit of the Company or an audit of any of the subsidiaries of the Company, or a publicly-known threatened challenge asserted in writing against any other taxpayer that has raised capital through the issuance of securities that are substantially similar to the Series 2016A Notes,

which amendment, clarification or change is effective or the Administrative Action is taken or issued, or interpretation or pronouncement is issued or threatened challenge is asserted or becomes publicly-known after the date of original issuance of the Series 2016A Notes, there is more than an insubstantial risk that interest payable by the Company on the Series 2016A Notes is not deductible, or within 90 days of the date of such opinion would not be deductible, in whole or in part, by the Company for United States federal income tax purposes.

In addition, if a Rating Agency Event shall occur and be continuing, the Company may redeem the Series 2016A Notes following the occurrence  of that Rating Agency Event, in whole, but not in part, before October 1, 2021, at a Redemption Price equal to 102% of the principal amount to be redeemed plus any accrued but unpaid interest (including any Additional Interest) to the Redemption Date.

“Applicable Rating Agency” means any Rating Agency that (i)(a) published a rating for the Company on the date of initial issuance of the Series 2016A Notes and (b) publishes a rating for the Company at such time as a Rating Agency Event occurs, or (ii) any successor to a Rating Agency described in the preceding clause (i).

“Rating Agency” means any nationally recognized statistical rating organization (within the meaning of Section 3(a)(62) of the Securities Exchange Act of 1934, as amended).

“Rating Agency Event” means a change to the methodology or criteria that were employed by an Applicable Rating Agency for purposes of assigning equity credit to securities such as the Series 2016A Notes on the date of initial issuance of the Series 2016A Notes (the “current methodology”), which change either (i) shortens the period of time during which equity credit pertaining to the Series 2016A Notes would have been in effect had the current methodology not been changed by the Applicable Rating Agency, or (ii) reduces the amount of equity credit assigned to the Series 2016A Notes by the Applicable Rating Agency as compared with the amount of equity credit that such Rating Agency has assigned to the Series 2016A Notes as of the date of initial issuance of the Series 2016A Notes.

In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof.  The Series 2016A Notes will not have a sinking fund.

A-8

If an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees.  No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

The Notes of this series are issuable only in registered form without coupons in denominations of $25.00 and any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged at the office or agency of the Company.

A-9

The Company and, by acceptance of this Series 2016A Note or a beneficial interest in this Series 2016A Note, each Holder hereof and any person acquiring a beneficial interest herein, agree that for United States federal, state and local tax purposes it is intended that this Series 2016A Note constitute indebtedness.

This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York.

A-10

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

	
			
	TEN COM-  as tenants in common
	UNIF GIFT MIN ACT- _______ Custodian ________
                                         (Cust)                     (Minor)

	TEN ENT-   as tenants by the entireties
	 
	 

	JT TEN-       as joint tenants with right of survivorship and not as tenants in common
	under Uniform Gifts to
Minors Act

___________________
            (State)

Additional abbreviations may also be used
though not on the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
_____________________________________________________________________________
(please insert Social Security or other identifying number of assignee)

_____________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE
_____________________________________________________________________________

_____________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and appointing
_____________________________________________________________________________

_____________________________________________________________________________
agent to transfer said Note on the books of the Company, with full power of substitution in the premises.

	
				
	Dated:
	 
	 
	 

	 
	 
	 
	

NOTICE:  The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.

A-11

EXHIBIT B

CERTIFICATE OF AUTHENTICATION

This is one of the Junior Subordinated Notes referred to in the within-mentioned Indenture.

	
			
	 
	WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee

	 
	 
	 

	 
	By:
	 

	 
	 
	Authorized Signatory

B-1Exhibit

Exhibit 10.1

FORM OF SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of September 14, 2016 by and between CALADRIUS BIOSCIENCES, INC., a Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (the “Buyer”).  Capitalized terms used herein and not otherwise defined herein are defined in Section 7 hereof. 

WHEREAS: Subject to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Buyer, and the Buyer wishes to buy from the Company, shares (the “Securities”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”).    

NOW THEREFORE, the Company and the Buyer hereby agree as follows:

		
	1. 
	PURCHASE OF SECURITIES.  

Subject to the terms and conditions set forth in this Agreement, the Company and the Buyer agree that the Company shall sell to the Buyer, and the Buyer shall purchase from the Company, 847,458 Securities, and the Buyer shall pay to the Company as the purchase price therefor, via wire transfer, an aggregate of Four Million Dollars ($4,000,000).  The Securities, upon issuance and payment therefor as provided herein, shall be validly issued and fully paid and non-assessable.  The Company shall pay any and all transfer, stamp or similar taxes that may be payable with respect to the issuance and delivery of any Securities to the Buyer under this Agreement.  Unless otherwise mutually agreed between the Company and the Buyer, the purchase of Securities shall be pursuant to a take-down off the Company’s existing S-3 Registration Statement.

2.    BUYER’S REPRESENTATIONS AND WARRANTIES.

The Buyer represents and warrants to the Company that as of the date hereof:

(a)    Investment Purpose.  The Buyer is entering into this Agreement and acquiring the Securities for its own account for investment; provided however, by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term.
 
(b)    Accredited Investor Status.  The Buyer is an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation D under the 1933 Act.

(c)    Information.  The Buyer has been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities that have been reasonably requested by the Buyer, including, without limitation, the SEC Documents (as defined in Section 3(e) hereof).  The Buyer understands that its investment in the Securities involves a high degree of risk.  The Buyer (i) is able to bear the economic risk of an investment in the Securities including a total loss, (ii) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the proposed investment in the Securities and (iii) has had an opportunity to ask questions of and receive answers from the officers of the Company concerning the financial condition and business of the Company and other matters related to an investment in the Securities.  Neither such inquiries nor any other due diligence investigations conducted by the Buyer or its representatives shall modify, amend or affect the Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below.  The Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.

(d)    No Governmental Review.  The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

(e)    Organization. The Buyer is a limited liability company duly organized and validly existing in good standing under the laws of the jurisdiction in which it is organized, and has the requisite organizational power and authority to own its properties and to carry on its business as now being conducted.

(f)    Validity; Enforcement.  This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and is a valid and binding agreement of the Buyer enforceable against the Buyer in accordance with its terms, subject as to enforceability to (i) general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and (ii) public policy underlying any law, rule or regulation (including any federal or state securities law, rule or regulation) with regards to indemnification, contribution or exculpation. The execution and delivery of this Agreement by the Buyer and the consummation by it of the transaction contemplated hereby do not conflict with the Buyer’s certificate of organization or operating agreement or similar documents, and do not require further consent or authorization by the Buyer, its managers or its members. 

(g)    Residency.  The Buyer is a resident of the State of Illinois.

(h)    No Prior Short Selling.  The Buyer represents and warrants to the Company that at no time prior to the date of this Agreement has any of the Buyer, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, 

directly or indirectly, any (i) “short sale” (as such term is defined in Section 242.200 of Regulation SHO of the Securities Exchange Act of 1934, as amended (the “1934 Act”) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.

3.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Buyer that as of the date hereof:

(a)    Organization and Qualification.  The Company and its “Subsidiaries” (which for purposes of this Agreement means any entity in which the Company, directly or indirectly, owns more than 50% of the voting stock or capital stock or other similar equity interests) are corporations or limited liability companies duly organized and validly existing in good standing under the laws of the jurisdiction in which they are incorporated or organized, and have the requisite corporate or organizational power and authority to own their properties and to carry on their business as now being conducted.  Each of the Company and its Subsidiaries is duly qualified as a foreign corporation or limited liability company to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing could not reasonably be expected to have a Material Adverse Effect.  As used in this Agreement, “Material Adverse Effect” means any material adverse effect on any of: (i) the business, properties, assets, operations, results of operations or financial condition of the Company and its Subsidiaries, if any, taken as a whole, or (ii) the authority or ability of the Company to perform its obligations under this Agreement.

(b)    Authorization; Enforcement; Validity.  (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Securities in accordance with the terms hereof, (ii) the execution and delivery of this Agreement by the Company and the consummation by it of the transaction contemplated hereby, including without limitation, the issuance of the Securities under this Agreement, have been duly authorized by the Company’s Board of Directors or duly authorized committee thereof, do not conflict with the Company’s Certificate of Incorporation or Bylaws, and do not require further consent or authorization by the Company, its Board of Directors, except as set forth in this Agreement, or its stockholders, (iii) this Agreement has been duly executed and delivered by the Company and (iv) this Agreement constitutes the valid and binding obligations of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (y) general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies and (z) public policy underlying any law, rule or regulation (including any federal or states securities law, rule or regulation) with regards to indemnification, contribution or exculpation.  The Board of Directors of the Company or duly authorized committee thereof has approved the resolutions (the “Signing Resolutions”) to authorize this Agreement and the transaction contemplated hereby.  The Signing Resolutions are valid, in full force and effect and have not been modified or supplemented in any material respect.  The Company has delivered to the Buyer a true and correct copy of the Signing Resolutions as approved by the Board of Directors of the Company.  

(c)    Authorization of the Securities.  The Securities have been duly authorized and, upon issuance in accordance with the terms hereof, the Securities shall be (i) validly issued, fully paid and non-assessable and (ii) free from all taxes, liens and charges with respect to the issuance thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.  

(d)    No Conflicts.  The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transaction contemplated hereby (the issuance of the Securities), does and will not (i) result in a violation of the Company’s Certificate of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred stock of the Company or the Bylaws or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or result, to the Company’s knowledge, in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market applicable to the Company or any of its Subsidiaries) or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of conflicts, defaults, terminations, amendments, accelerations, cancellations and violations under clause (ii), which could not reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor its Subsidiaries is in violation of any term of or in default under its Articles or Certificate of Incorporation, any Certificate of Designation, Preferences and Rights of any outstanding series of preferred stock of the Company or Bylaws or their organizational charter or bylaws, respectively.  Neither the Company nor any of its Subsidiaries is in violation of any term of or is in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its Subsidiaries, except for possible violations, defaults, terminations or amendments that could not reasonably be expected to have a Material Adverse Effect.  The business of the Company and its Subsidiaries is not being conducted, and shall not be conducted, in violation of any law, ordinance, or regulation of any governmental entity, except for possible violations, the sanctions for which either individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.  Except as specifically contemplated by this Agreement, reporting obligations under the 1934 Act, or as required under the 1933 Act or applicable state securities laws or the filing of a Listing of Additional Shares Notification Form with the Principal Market, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement in accordance with the terms hereof.  Except for the reporting obligations under the 1934 Act, all consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence shall be obtained or effected on or prior to the date hereof.  

(e)    SEC Documents; Financial Statements. Since June 30, 2015, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all 

of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”).  As of their respective dates (except as they have been correctly amended), the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC (except as they may have been properly amended), 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 light of the circumstances under which they were made, not misleading.  As of their respective dates (except as they have been properly amended), the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto.  Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).  Except routine correspondence, such as comment letters and notices of effectiveness in connection with previously filed registration statements or periodic reports publicly available on EDGAR, to the Company’s knowledge, the Company or any of its Subsidiaries are not presently the subject of any inquiry, investigation or action by the SEC.

(f)    Absence of Certain Changes.  Since June 30, 2016, there has been no material adverse change in the business, properties, operations, financial condition or results of operations of the Company or its Subsidiaries taken as a whole.  For purposes of this Agreement, neither a decrease in cash or cash equivalents nor losses incurred in the ordinary course of the Company’s business shall be deemed or considered a material adverse change.  The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings.  

(g)    Absence of Litigation. Other than as disclosed in the SEC Documents, to the Company’s knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against the Company, the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors in their capacities as such, which could reasonably be expected to have a Material Adverse Effect.

(h)    Acknowledgment Regarding Buyer’s Status.  The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchaser with respect to this Agreement and the transaction contemplated hereby.  The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transaction contemplated hereby and any advice given by the Buyer or any of its representatives or agents in connection with this Agreement and the transaction contemplated hereby is merely incidental to the Buyer’s purchase of the Securities.  The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation by the Company and its representatives and advisors.

(i)    Registration Statement.  The Shelf Registration Statement (as defined in Section 4(a) hereof) has been declared effective by the SEC, and no stop order has been issued or is pending or, to the knowledge of the Company, threatened by the SEC with respect thereto.  As of the date hereof, the Company has a dollar amount of securities registered and unsold under the Shelf Registration Statement, which is not less than the amount necessary to register the Securities on the date hereof.

4.    COVENANTS.

(a)    Filing of Form 8-Ks and Prospectus Supplements.  The Company agrees that it shall, within the time required under the 1934 Act, file any Current Report on Form 8-K disclosing this Agreement and the transaction contemplated hereby.  The Company shall file within two (2) Business Days from the date hereof a prospectus supplement to the Company’s existing shelf registration statement on Form S-3 (File No. 333-206175, the “Shelf Registration Statement”) covering the sale of the 847,458 Securities (the “Prospectus Supplement”).   The Shelf Registration Statement (including any amendments or supplements thereto and prospectuses or prospectus supplements, including the Prospectus Supplement, contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.

(b)    Blue Sky. The Company shall take such action, if any, as is reasonably necessary in order to obtain an exemption for or to qualify (i) the sale of the Securities to the Buyer under this Agreement and (ii) any subsequent sale of the Securities by the Buyer, in each case, under applicable securities or “Blue Sky” laws of the states of the United States in such states as is reasonably requested by the Buyer from time to time, and shall provide evidence of any such action so taken to the Buyer.

(c)    Listing.  The Company shall promptly secure the listing of all of the Securities upon each national securities exchange and automated quotation system that requires an application by the Company for listing, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain such listing, so long as any other shares of Common Stock shall be so listed.  The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section.

5.    TRANSFER AGENT INSTRUCTIONS.

All of the Securities to be issued under this Agreement shall be issued without any restrictive legend.  The Company shall issue irrevocable instructions to the Transfer Agent, and any subsequent transfer agent, to issue Common Stock in the name of the 

Buyer for the Securities (the “Irrevocable Transfer Agent Instructions”).  The Company warrants to the Buyer that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to the Transfer Agent with respect to the Securities and the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement.  

		
	6.
	INDEMNIFICATION.  

In consideration of the Buyer’s execution and delivery of is Agreement and acquiring the Securities hereunder and in addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the Buyer and all of its affiliates, members, officers, directors, and employees, and any of the foregoing person’s agents or other representatives (including, without limitation, those retained in connection with the transaction contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in this Agreement or any other certificate, instrument or document contemplated hereby, (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or any other certificate, instrument or document contemplated hereby, or (c) any cause of action, suit or claim brought or made against such Indemnitee and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other certificate, instrument or  document contemplated hereby, other than with respect to Indemnified Liabilities which directly and primarily result from (A) a breach of any of the Buyer’s representations and warranties, covenants or agreements contained in this Agreement, or (B) the gross negligence, bad faith or willful misconduct of the Buyer or any other Indemnitee.  To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

7.    CERTAIN DEFINED TERMS.  

For purposes of this Agreement, the following terms shall have the following meanings:

(a)    “1933 Act” means the Securities Act of 1933, as amended.

(b)    “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors. 

(c)    “Business Day” means any day on which the Principal Market is open for trading during normal trading hours (i.e., 9:30 a.m. to 4:00 p.m. Eastern Time), including any day on which the Principal Market is open for trading for a period of time less than the customary time. 

(d)    “Person” means an individual or entity including any limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof. 

(e)    “Principal Market” means the NASDAQ Capital Market.

(f)    “SEC” means the United States Securities and Exchange Commission. 

(g)    “Transfer Agent” means the transfer agent of the Company as set forth in Section 8(f) hereof or such other person who is then serving as the transfer agent for the Company in respect of the Common Stock.

8.    MISCELLANEOUS.

(a)    Governing Law; Jurisdiction; Jury Trial.  The corporate laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders.  All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Chicago, for the adjudication of any dispute hereunder or in connection herewith, or with the transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(b)    Counterparts.  This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile or pdf (or other electronic reproduction) signature shall be considered due execution 

and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or pdf (or other electronic reproduction) signature.

(c)    Headings.  The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

(d)    Severability.  If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

(e)    Entire Agreement.  This Agreement supersedes all other prior oral or written agreements between the Buyer, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the documents and instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.  The Company acknowledges and agrees that is has not relied on, in any manner whatsoever, any representations or statements, written or oral, other than as expressly set forth in this Agreement.

(f)    Notices.  Any notices, consents or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (iii) upon receipt, when sent by electronic message (provided the recipient responds to the message and confirmation of both electronic messages are kept on file by the sending party); or (iv) one (1) Business Day after timely deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:
Caladrius Biosciences, Inc.
106 Allen Road, 4th Floor
Basking Ridge, NJ 07920 
Telephone:    908-842-0100
Facsimile:    646-417-6860
Attention:    Todd Girolamo, General Counsel    
Email:        tgirolamo@caladrius.com 

With a copy (which shall not constitute notice) to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
666 Third Avenue
New York, NY 10017
Telephone:     212-935-3000
Facsimile:     212-983-3115
Attention:     Jeffrey P. Schultz
Email:         JSchultz@Mintz.com

If to the Buyer:
Aspire Capital Fund, LLC
155 North Wacker Drive, Suite 1600
Chicago, IL 60606
Telephone:    312-658-0400
Facsimile:    312-658-4005
Attention:    Steven G. Martin
Email:        smartin@aspirecapital.com

With a copy to (which shall not constitute delivery to the Buyer):
Morrison & Foerster LLP
2000 Pennsylvania Avenue, NW, Suite 6000
Washington, DC 20006
Telephone:    202-778-1611
Facsimile:    202-887-0763
Attention:    Martin P. Dunn, Esq.
Email:        mdunn@mofo.com

If to the Transfer Agent:
Continental Stock Transfer and Trust
17 Battery Place
New York, NY 10004
Telephone:          212-845-3218
Facsimile:            
Attention:            Robert McMonagle
Email:                  rmcmonagle@continentalstock.com

or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party one (1) Business Day prior to the effectiveness of such change.  Written confirmation of receipt (A) given by the recipient of such notice, consent or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, and recipient facsimile number, (C) electronically generated by the sender’s electronic mail containing the time, date and recipient email address or (D) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of receipt in accordance with clause (i), (ii), (iii) or (iv) above, respectively.

(g)    Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.  The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer, including by merger or consolidation.  The Buyer may not assign its rights or obligations under this Agreement.

(h)    No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

(i)    Publicity.  The Buyer shall have the right to approve before issuance any press release, SEC filing or any other public disclosure made by or on behalf of the Company whatsoever with respect to, in any manner, the Buyer, its purchases hereunder or any aspect of this Agreement or the transaction contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or other public disclosure (including any filings with the SEC) with respect to such transactions as is required by applicable law and regulations so long as the Company and its counsel consult with the Buyer in connection with any such press release or other public disclosure at least one (1) Business Day prior to its release.  The Buyer must be provided with a copy thereof at least one (1) Business Day prior to any release or use by the Company thereof.  

(j)    Further Assurances.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transaction contemplated hereby.

(k)    Survival.  The representations and warranties of the Company and the Buyer contained in Sections 2, 3 and 5 hereof, the indemnification provisions set forth in Section 6 hereof and the agreements and covenants set forth in Sections 4 and 8 hereof, shall survive the execution of this Agreement and the transaction contemplated herein or any termination of this Agreement.  

(l)    No Financial Advisor, Placement Agent, Broker or Finder.  The Company represents and warrants to the Buyer that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby.  The Buyer represents and warrants to the Company that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby.  Each party shall be responsible for the payment of any fees or commissions, if any, of any financial advisor, placement agent, broker or finder engaged by such party relating to or arising out of the transactions contemplated hereby.  Each party shall pay, and hold the other party harmless against, any liability, loss or expense (including, without limitation, attorneys' fees and out of pocket expenses) arising in connection with any such claim.

(m)    No Strict Construction.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

(n)    Failure or Indulgence Not Waiver.  No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

*     *     *     *     *

IN WITNESS WHEREOF, the Buyer and the Company have caused this Securities Purchase Agreement to be duly executed as of the date first written above.

THE COMPANY:

CALADRIUS BIOSCIENCES, INC.

By: _______________________
Name: Joseph Talamo  
Title:  CFO

BUYER:

ASPIRE CAPITAL FUND, LLC
BY: ASPIRE CAPITAL PARTNERS, LLC
BY: SGM HOLDINGS CORP.

By:_______________________
Name:  Steven G. Martin
Title:  President

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