Exhibit 10.2

 

  IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT, IN AND FOR MIAMI-DADE
COUNTY, FLORIDA       GENERAL JURISDICTION DIVISION       CASE NO.  12-28576 CA
10

 

SOCIUS CG II, LTD., a Bermuda

exempted company,

 

Plaintiff,

 

v.

 

ADVAXIS, INC.,

a Delaware corporation,

 

Defendant.

_________________________________________/

 

STIPULATION FOR SETTLEMENT OF CLAIM

Plaintiff, Socius CG II, Ltd. (“Socius”), on the one hand, and Defendant,
Advaxis, Inc. (“Advaxis”), on the other hand, stipulate to the entry of the
Agreed Order Approving Settlement (the “Agreed Order”), attached hereto as
Exhibit A, and further stipulate and agree as follows:

 

1.          Advaxis is a Delaware corporation with its principal place of
business located in Princeton, New Jersey 08540. Advaxis hereby acknowledges
receipt of the Complaint filed by Socius on July 20, 2012, and agrees to waive
any requirement that Socius formally serve Advaxis with process. Advaxis accepts
service of process as of the date of this Stipulation.

 

2.          Socius and Advaxis request that the Court enter an order
substantially in the form of the Agreed Order attached hereto as Exhibit A

 

 

 

 

3.          Socius owns a bona fide claim against Advaxis in the aggregate
amount of $2,888,860, which consists of (i) past due invoices in the aggregate
amount of $1,841,853 which Socius purchased from Numoda Corporation, pursuant to
a July 13, 2012 Claim Purchase Agreement, (ii) late charges and interest thereon
in the aggregate amount of $309,751 which Advaxis owes to Socius pursuant to a
July 23, 2012 Forbearance Agreement, (iii) a risk premium fee equal to
twenty-five percent (25%) of the original claim which Advaxis hereby agrees that
it owes to Socius in consideration for Socius’ agreement to enter into this
settlement and accept shares of Advaxis’ common stock rather than cash for the
original claim, (iv) broker transaction fees in the aggregate amount of $236,792
which Advaxis hereby agrees that it owes Socius in order to reimburse Socius for
the costs of liquidating the shares of Advaxis’ common stock received pursuant
to this settlement and (v) costs associated with this settlement, including
without limitation legal fees, in the aggregate amount of $40,000 (collectively,
the “Claim”). Pursuant to the Claim Purchase Agreement, Numoda Corporation sold,
transferred, and assigned to Socius all rights to payment of certain past-due
invoices for services duly rendered to Advaxis. Numoda Corporation issued
invoices to Advaxis for services rendered through July 15, 2012 in the aggregate
amount of $1,841,853, payable upon receipt. Such invoices have not been paid and
are past due in their entirety; and

 

4.          Advaxis has not paid, and will not be able to pay in the near term,
any amounts due on the Claim, or any amount thereof. As a result, on July 20,
2012, Socius filed the above-captioned action (the “Action”), which Action the
parties now seek to settle by this Stipulation.

 

5.          Advaxis desires to settle the Claim in exchange for the issuance to
Socius of shares of Advaxis’ common stock (the “Common Stock”). Socius is
willing to accept such shares of Common Stock in accordance with the terms of
this Stipulation, subject to court approval following a hearing as required by
Section 3(a)(10) of the Securities Act of 1933, as amended (the “Act”). Section
3(a)(10) provides in its entirety as follows:

Section 3 -- Classes of Securities under this Title

 

 

 

 

(a)Exempted securities. Except as hereinafter expressly provided, the provisions
of this title shall not apply to any of the following classes of securities:...

 

10.Except with respect to a security exchanged in a case under title 11 of the
United States Code, any security which is issued in exchange for one or more
bona fide outstanding securities, claims or property interests, or partly in
such exchange and partly for cash, where the terms and conditions of such
issuance and exchange are approved, after a hearing upon the fairness of such
terms and conditions at which all persons to whom it is proposed to issue
securities in such exchange shall have the right to appear, by any court, or by
any official or agency of the United States, or by any State or Territorial
banking or insurance commission or other governmental authority expressly
authorized by law to grant such approval;

 

(Emphasis added.)

 

6.          Socius is the sole person to whom the shares of Common Stock are
proposed to be issued, and is therefore the only person entitled to notice of
hearing and an opportunity to be heard in accordance with the statute. Socius
has agreed to the proposed settlement terms and conditions, and believes that
they are sufficiently fair such that Socius is willing to enter into this
Stipulation. In addition, Advaxis’s board of directors has considered the
proposed settlement and has resolved that its terms and conditions are fair to,
and in the best interests of, Advaxis and its stockholders. Accordingly, both
parties shall request Court approval of the settlement provided for herein
(following the hearing referred to in the next sentence) as fair, reasonable and
adequate. The parties shall submit this Stipulation to the Court, on a motion
seeking an expedited hearing, and shall request that the Court enter the Agreed
Order approving this Stipulation at the hearing thereon.

 

 

 

 

7.          It is the intent and effect of this Stipulation that the Agreed
Order, when signed, shall end, finally and forever (i) any claims to payment or
compensation of any kind or nature that Socius had, now has, or may assert in
the future against Advaxis arising out of the Claim, and (ii) any claims,
including, without limitation, for offset or counterclaim, that Advaxis had, now
has, or may assert in the future against Socius arising out of the Claim. In
this regard, and subject to full and complete compliance with the Agreed Order,
effective upon the execution of the Agreed Order, each party hereby releases and
forever discharges the other party, including all of the other party’s
employees, officers, directors, members, partners, agents, affiliates,
subsidiaries and attorneys, from any and all claims, demands, obligations
(fiduciary or otherwise), and causes of action, whether known or unknown,
suspected or unsuspected, arising out of, connected with, or incidental to the
Claim.

 

8.          In full and final settlement of the Claim, subject to Section 10
below, Advaxis will issue and deliver to Socius or its designee (i) an aggregate
of eleven million one hundred eleven thousand (11,111,000) shares of Common
Stock on the Initial Settlement Date (as defined below) with respect to one-half
of the Claim (the “First Tranche Settlement Shares”) and (ii) such number of
shares of Common Stock on the First Tranche True Up Date (as defined below)
equal to (a) the remaining half of the Claim, divided by (b) the First Tranche
True Up Measuring Price (as defined below), with respect to the remaining half
of the Claim (the “Second Tranche Settlement Shares” and, together with the
First Tranche Settlement Shares, the “Initial Settlement Shares” and, together
with any True-Up Settlement Shares (as defined below) and Legal Fees Settlement
Shares (as defined below), the “Settlement Shares”).

 

9.          Subject to adjustment pursuant to Section 10 below:

 

a.          No later than the first trading day following the date that the
Court enters its Agreed Order approving this Stipulation (the “Initial
Settlement Date”), Advaxis shall (i) immediately issue the First Tranche
Settlement Shares to Socius’s or its designee’s balance account with The
Depository Trust Company (DTC) through the Fast Automated Securities Transfer
(FAST) Program of DTC’s Deposit/Withdrawal at Custodian (DWAC) system, without
any restriction on transfer or resale, time being of the essence, by
transmitting via facsimile and overnight delivery such irrevocable and
unconditional instruction to Advaxis’s stock transfer agent, and (ii) if
required by Advaxis’s stock transfer agent cause its legal counsel to issue an
opinion to Advaxis’s transfer agent, in form and substance acceptable to both
parties and such transfer agent, that the shares may be so issued.

 

 

 

 

 b.          On the First Tranche True Up Date (as defined below), Advaxis shall
(i) immediately issue the Second Tranche Settlement Shares to Socius’s or its
designee’s balance account with The Depository Trust Company (DTC) through the
Fast Automated Securities Transfer (FAST) Program of DTC’s Deposit/Withdrawal at
Custodian (DWAC) system, without any restriction on transfer or resale, time
being of the essence, by transmitting via facsimile and overnight delivery such
irrevocable and unconditional instruction to Advaxis’s stock transfer agent, and
(ii) if required by Advaxis’s stock transfer agent cause its legal counsel to
issue an opinion to Advaxis’s transfer agent, in form and substance acceptable
to both parties and such transfer agent, that the shares may be so issued.

 

c.          On the Second Tranche True Up Date (as defined below), Advaxis shall
(i) immediately issue a number of shares of Common Stock equal to Socius’ legal
fees, expenses and costs incurred through the Second Tranche True Up Date, with
the total dollar amount divided by the Required Market Price (as defined below)
(the “Legal Fees Settlement Shares”) to Socius’s or its designee’s balance
account with The Depository Trust Company (DTC) through the Fast Automated
Securities Transfer (FAST) Program of DTC’s Deposit/Withdrawal at Custodian
(DWAC) system, without any restriction on transfer or resale, time being of the
essence, by transmitting via facsimile and overnight delivery such irrevocable
and unconditional instruction to Advaxis’s stock transfer agent, and (ii) if
required by Advaxis’s stock transfer agent cause its legal counsel to issue an
opinion to Advaxis’s transfer agent, in form and substance acceptable to both
parties and such transfer agent, that the shares may be so issued.

 

 

 

 

10.          The parties acknowledge and agree that the number of First Tranche
Settlement Shares has been calculated assuming a market price of the Common
Stock equal to $0.13, which represents the quotient of (x) the fair market value
of one-half of the Claim as of the Initial Settlement Date, divided by (y) the
number of First Tranche Settlement Shares required to be delivered by the
Company to Socius (or its designee) on the Initial Settlement Date (the
“Required Market Price”). The parties agree that the total number of Settlement
Shares to be issued to Socius or its designee in connection with this
Stipulation and the Agreed Order shall be adjusted (i) on the 21st trading day
following the Initial Settlement Date (the 20 trading day period following the
Initial Settlement Date, the “First Tranche True-Up Period,” and the 21st
trading day following the Initial Settlement Date, the “First Tranche True-Up
Date”), and (ii) on the 21st trading day following the First Tranche True-Up
Date (the 20 trading day period following the First Tranche True-Up Date, the
“Second Tranche True-Up Period,” and the 21st trading day following the First
Tranche True-Up Date, the “Second Tranche True-Up Date”), as follows:

 

a.          If, on the First Tranche True-Up Date, the sum of (x) $0.067 and (y)
seventy-five percent (75%) of the arithmetic average of the closing sale price
of the Common Stock on each trading day during the First Tranche True-Up Period
(the “First Tranche True-Up Measuring Price”) is less than the Required Market
Price, then Socius may deliver a written notice to Advaxis by facsimile or email
requesting that such number of additional shares of Common Stock be delivered to
Socius equal to the difference of (A) the quotient of (x) the fair market value
of one-half of the Claim as of the Initial Settlement Date, divided by (y) the
First Tranche True-Up Measuring Price, less (B) the number of First Tranche
Settlement Shares delivered to Socius prior to the First Tranche True-Up Date
(the “Socius First Tranche True-Up Settlement Shares”). If, on the First Tranche
True-Up Date, the First Tranche True-Up Measuring Price is greater than the
Required Market Price, then Advaxis may deliver a written notice to Socius by
facsimile or email requesting that Socius return to Advaxis for cancellation
such number of shares of Common Stock equal to the difference of (A) the number
of First Tranche Settlement Shares delivered to Socius prior to the First
Tranche True-Up Date, less (B) the quotient of (x) the fair market value of
one-half of the Claim as of the First Tranche Settlement Date, divided by (y)
the First Tranche True-Up Measuring Price (the “Advaxis First Tranche True-Up
Settlement Shares” and, together with the Socius First Tranche True-Up
Settlement Shares, the “First Tranche True-Up Settlement Shares”). Subject to
Section 10.e below, within one trading day following delivery of such notice
from Socius, Advaxis shall deliver to Socius or its designee, in compliance with
the procedure set forth in paragraph 10 above (including, without limitation,
issuance of the legal opinion to the transfer agent at Advaxis’s sole cost and
expense), the Socius First Tranche True-Up Settlement Shares owed to Socius, if
any, in accordance with the mechanics described in Section 9 above, mutatis
mutandis.

  

 

 

 

b.          If, at any time during the First Tranche True-Up Period, the trading
price of the Common Stock declines by 17% or more from the trading price on the
First Tranche Settlement Date, Socius may deliver a written notice to Advaxis by
facsimile or email requesting that a specified number of additional shares of
Common Stock be delivered and containing the calculation for the number of
additional shares requested. Socius may in its sole discretion deliver one or
more such notices during the First Tranche True-Up Period. Within one trading
day following delivery of each such notice, Advaxis shall deliver to Socius or
its designee, in compliance with the procedure set forth in paragraph 10 above
(including, without limitation, issuance of the legal opinion to the transfer
agent at Advaxis’s sole cost and expense), the number of additional shares of
Common Stock requested in the notice. Any additional shares of Common Stock
issued or issuable pursuant to this Section 10.b. will be considered Settlement
Shares for purposes of any calculation of the total number of First Tranche
True-Up Settlement Shares pursuant to Section 10.a.

 

c.          If, on the Second Tranche True-Up Date, the sum of (x) $0.067 and
(y) seventy-five percent (75%) of the arithmetic average of the closing sale
price of the Common Stock on each trading day during the Second Tranche True-Up
Period (the “Second Tranche True-Up Measuring Price”) is less than the First
Tranche True-Up Measuring Price, then Socius may deliver a written notice to
Advaxis by facsimile or email requesting that such number of additional shares
of Common Stock be delivered to Socius equal to the difference of (A) the
quotient of (x) the fair market value of one-half of the Claim as of the First
Tranche True-Up Date, divided by (y) the Second Tranche True-Up Measuring Price,
less (B) the number of Second Tranche Settlement Shares delivered to Socius
prior to the Second Tranche True-Up Date (the “Socius Second Tranche True-Up
Settlement Shares”). If, on the Second Tranche True-Up Date, the Second Tranche
True-Up Measuring Price is greater than the First Tranche True-Up Measuring
Price, then Advaxis may deliver a written notice to Socius by facsimile or email
requesting that Socius return to Advaxis for cancellation such number of shares
of Common Stock equal to the difference of (A) the number of Second Tranche
Settlement Shares delivered to Socius prior to the Second Tranche True-Up Date,
less (B) the quotient of (x) the fair market value of one-half of the Claim as
of the Second Tranche Settlement Date, divided by (y) the Second Tranche True-Up
Measuring Price (the “Advaxis Second Tranche True-Up Settlement Shares” and,
together with the Socius Second Tranche True-Up Settlement Shares, the “Second
Tranche True-Up Settlement Shares” and, together with the First Tranche True-Up
Settlement Shares, the “True-Up Settlement Shares”). Subject to Section 10.e
below, within one trading day following delivery of such notice from Socius,
Advaxis shall deliver to Socius or its designee, in compliance with the
procedure set forth in paragraph 10 above (including, without limitation,
issuance of the legal opinion to the transfer agent at Advaxis’s sole cost and
expense), the Socius Second Tranche True-Up Settlement Shares owed to Socius, if
any, in accordance with the mechanics described in Section 9 above, mutatis
mutandis.

 

 

 

 

d.          If, at any time during the Second Tranche True-Up Period, the
trading price of the Common Stock declines by 17% or more from the trading price
on the First Tranche True-Up Date, Socius may deliver a written notice to
Advaxis by facsimile or email requesting that a specified number of additional
shares of Common Stock be delivered and containing the calculation for the
number of additional shares requested. Socius may in its sole discretion deliver
one or more such notices during the Second Tranche True-Up Period. Within one
trading day following delivery of each such notice, Advaxis shall deliver to
Socius or its designee, in compliance with the procedure set forth in paragraph
10 above (including, without limitation, issuance of the legal opinion to the
transfer agent at Advaxis’s sole cost and expense), the number of additional
shares of Common Stock requested in the notice. Any additional shares of Common
Stock issued or issuable pursuant to this Section 10.d. will be considered
Settlement Shares for purposes of any calculation of the total number of Second
Tranche True-Up Settlement Shares pursuant to Section 10.c.

 

e.          If the number of shares of Common Stock to be issued to Socius or
its designee in connection with the settlement of the Claim, aggregated with all
shares of Common Stock then owned or beneficially owned or controlled by,
collectively, Socius and its affiliates, at any time would exceed 9.99% of the
total number of shares of Common Stock then outstanding (the “Maximum
Percentage”), no additional shares of Common Stock shall be issuable to Socius
or its designee hereunder until Socius has delivered written notice to the
Company that such issuance would not exceed the “Maximum Percentage”. Unless
Socius delivers written notice to the Company that an issuance hereunder would
violate this Section 10.e., the Company may assume that no violation of this
Section 10.e. shall occur with respect to such issuance hereunder.
Notwithstanding the foregoing, the Company shall deliver to Socius or its
designee any shares of Common Stock which are not issuable to Socius or its
designee hereunder solely as a result of this Section 10.e. as promptly as
commercially practicable following the Company’s receipt of written notice from
Socius or its designee, as applicable, that such issuance would no longer result
in a violation of this Section 10.e.

 

 

 

  

f.          The parties hereto acknowledge and agree that if, on any given date
after the date hereof, Advaxis does not have enough shares of Common Stock
available (it being understood by the parties hereto that all reserved shares of
Common Stock issuable pursuant to the exercise or conversion, as applicable, of
warrants, options, convertible notes or similar securities outstanding as of the
date hereof shall not be available for issuance hereunder), to be issued to
Socius hereunder, including without limitation as required by Sections 8, 9 or
10 hereof, on such given date pursuant to the certificate of incorporation of
Advaxis as in effect on such given date, then a breach shall exist under this
Agreement as Advaxis shall have failed to comply in full with the terms and
conditions hereof (a “Settlement Failure”). Upon any such Settlement Failure,
the parties hereto agree that such portion of the Claim with respect to such
breach shall be reinstated hereunder (the “Reinstated Claim”) and such
Reinstated Claim shall not be deemed to have been settled hereunder. For the
avoidance of doubt, as of any given date, Advaxis shall have no obligation
hereunder to deliver shares of Common Stock to Socius in excess of the number of
shares of Common Stock available under the certificate of incorporation of
Advaxis as in effect as of such given date.

 

11.          The Parties hereby make the following representations and
warranties:

 

a.          Advaxis represents and warrants to Socius and its affiliates that
the shares of Common Stock provided for above are duly authorized and, when
issued pursuant to the Agreed Order, will be duly and validly issued, fully paid
and nonassessable, free and clear of all liens, encumbrances and preemptive and
similar rights to subscribe for or purchase securities. As of the date hereof,
Advaxis has reserved from its duly authorized capital stock, 22,222,000 shares
of Common Stock. Advaxis further represents and warrants to Socius and its
affiliates that the execution of this Stipulation and performance of the Agreed
Order by Advaxis and Socius will not (i) conflict with, violate, or cause a
breach or default under any agreements between Advaxis and the creditors (or any
affiliate thereof) related to the debt comprising the Claim, or (ii) require any
waiver, consent, or other action of Advaxis or the creditors, or their
respective affiliates, that has not already been obtained. Without limitation,
Advaxis hereby waives any provision in any agreement related to the debt
comprising the Claim (x) requiring payments to be applied in a certain order,
manner, or fashion, or (y) providing for exclusive jurisdiction and venue in any
court other than this Court. Advaxis further represents that it has all
necessary power and authority to (i) execute, deliver and perform all of its
obligations under this Stipulation, and (ii) sell, convey, transfer and assign
the Claim to Socius. The execution, delivery and performance of this Stipulation
by Advaxis has been duly authorized by all requisite action on the part of
Advaxis and this Stipulation has been duly executed and delivered by Advaxis.

 

 

 

 

b.          Socius represents and warrants to Advaxis that, as of the date of
this Stipulation and during the 90 calendar days prior to the date of this
Stipulation, neither Socius nor any affiliate thereof is or was an officer,
director, or 10% or more stockholder of Advaxis.

 

12.          For so long as Socius or any of its affiliates holds any shares of
Common Stock of Advaxis, neither Socius nor any of its affiliates will: (i) vote
any shares of Common Stock owned or controlled by it, or solicit any proxies or
seek to advise or influence any person with respect to any voting securities of
Advaxis; or (ii) engage or participate in any actions, plans or proposals that
relate to or would result in (a) Socius or any of its affiliates acquiring
additional securities of Advaxis, alone or together with any other person, which
would result in Socius and its affiliates collectively beneficially owning or
controlling, or being deemed to beneficially own or control, more than 9.99% of
the total outstanding Common Stock or other voting securities of Advaxis, (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving Advaxis or any of its subsidiaries, (c) a sale or
transfer of a material amount of assets of Advaxis or any of its subsidiaries,
(d) any change in the present board of directors or management of Advaxis,
including any plans or proposals to change the number or term of directors or to
fill any existing vacancies on the board, (e) any material change in the present
capitalization or dividend policy of Advaxis, (f) any other material change in
Advaxis’s business or corporate structure, (g) changes in Advaxis’s charter,
bylaws or instruments corresponding thereto or other actions which may impede
the acquisition of control of Advaxis by any person, (h) causing a class of
securities of Advaxis to be delisted from a national securities exchange or to
cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (i) causing a class of equity
securities of Advaxis to become eligible for termination of registration
pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934 (the
“Exchange Act”), or (j) taking any action, intention, plan or arrangement
similar to any of those enumerated above. The provisions of this paragraph may
not be modified or waived without further order of the Court.

 

 

 

 

13.          On the first trading day after the date of the Agreed Order, and
prior to the opening time for trading stocks on public exchanges located in New
York City, Advaxis shall file a Form 8-K Report pursuant to Section 13 or
Section 15(d) of the Exchange Act disclosing the issuance of shares pursuant to
the Agreed Order approving this Stipulation and attaching a copy of the Agreed
Order and this Stipulation as an exhibit thereto.

 

14.          Advaxis hereby agrees to indemnify, defend and hold Socius and its
affiliates harmless with respect to all obligations of Advaxis arising from or
incident or related to this Stipulation, including, without limitation, any
claims or actions brought by shareholders of Advaxis related to this
Stipulation.

 

15.          The parties to this Stipulation represent that each of them has
been advised as to the terms and legal effect of this Stipulation and the Agreed
Order provided for herein, and that the settlement and compromise stated herein
is final and conclusive forthwith, subject to the conditions stated herein, and
each attorney represents that his or her client has freely consented to and
authorized this Stipulation.

 

 

 

 

16.          Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in Miami-Dade County, Florida, for the
adjudication of the above-captioned action 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 or that such suit,
action or proceeding is improper or inconvenient venue for such proceeding.

 

17.          Upon entry of the Agreed Order approving this Stipulation, the
Action shall be dismissed with prejudice. The Court shall retain jurisdiction to
enforce the terms of this Stipulation.

 

18.          This Stipulation constitutes Advaxis’s answer to the Complaint in
this Action. Each party hereto waives a statement of decision, and the right to
appeal from the Order after its entry. Advaxis further waives any defense based
on the rule against splitting causes of action. Except as expressly set forth
herein, each party shall bear its own attorneys’ fees, expenses and costs.

 

19.          This Stipulation may be executed in counterparts and by facsimile,
pdf or other electronic format, each of which shall constitute an original and
all of which together shall be deemed together as a single document.

 

 

 

 

DATED: July 23, 2012 Lapin & Leichtling, LLP     Attorneys for Plaintiff Socius
CG II, Ltd.     255 Alhambra Circle, Suite 1250     Coral Gables, Florida 33134
    Telephone: (305) 569-4100     Facsimile:  (305) 569-0000     E-mail:
aleichtling@ll-lawfirm.com             By: /s/ Adam B. Leichtling       ADAM B.
LEICHTLING       Florida Bar No.  984175           DATED: July 23, 2012 SOCIUS
CG II, LTD.             By: /s/ Terren Peizer       Terren Peizer       Managing
Director       Socius CG II, Ltd.           DATED: July 23, 2012 GREENBERG
TRAURIG, P.A     Attorneys for Defendant Advaxis, Inc.     333 Avenue of the
Americas     Miami, Florida 33131     Telephone: (305) 579-0500     Facsimile: 
(305) 579-0717     E-mail: salkym@gtlaw.com             By: /s/ Mark A. Salky  
    MARK A. SALKY       Florida Bar No. 058221           DATED: July 23, 2012
ADVAXIS, INC.             By: /s/ Mark J. Rosenblum       Mark J. Rosenblum    
  Chief Financial Officer       Advaxis, Inc.