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**AMENDMENT NO. 1 TO**

**EMPLOYMENT AGREEMENT**

 

This Amendment No.1 to Employment Agreement (this “Amendment”) is effective as of December 19, 2013, by and between Advaxis, Inc.,a Delaware corporation (the “Company”), and Daniel J. O’Connor (“Executive”).

 

**WHEREAS**, theCompany and Executive entered into an Employment Agreement, effective as of August 19, 2013 (the “Agreement”),pursuant to which the Company employed Executive in the capacity, for the period, and on the terms and conditions set forth therein;and

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**WHEREAS**, Section3(a) of the Agreement provided that the Compensation Committee (as such term is defined in the Agreement) and the Executive wouldmutually agree whether to pay a percentage, if any, of the Base Salary (as such term is defined in the Agreement) in the form ofAdvaxis restricted stock unit awards; and

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**WHEREAS**, infurtherance of Section 3(a) of the Agreement and the underlying intent of such section, the Compensation Committee and the Executivemutually agree that the Base Salary (as such term is defined in the Agreement) shall be paid in a combination of cash and sharesof Common Stock (as such term is defined in the Agreement) as set forth in this Amendment; and

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**WHEREAS**, Section3(e) of the Agreement permits Executive to participate in capital raises, but the parties understand that any such participationwill be subject to applicable law and the rules and regulations of the stock exchange on which the Company’s common stockis listed; and

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**WHEREAS**, Section4(b) of the Agreement provides Executive with certain severance benefits in the event Executive’s employment with the Companyis terminated under certain circumstances, which severance benefits may be subject to Section 409A of the Internal Revenue Codeof 1986, as amended; and

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**WHEREAS**, theCompany and Executive desire to enter into this Amendment pursuant to which Sections 3(a), 3(e), and 4 of the Agreement shall beamended and restated to set forth the terms and conditions relating to the payment of salary to Executive, permission to participatein future capital raises, and payment schedules for severance benefits that are compliant with Section 409A;

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**NOW, THEREFORE**,in consideration of the premises and mutual covenants and agreements herein contained, the parties hereby agree as follows:

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1. AMENDMENT TOSECTION 3(a). Section 3(a) of the Agreement is hereby amended and restated in its entirety to read as follows:

 

 

“(a) SALARY.Executive shall receive an initial annual salary, retroactive to the date of the Agreement of Three Hundred and Twenty Five ThousandDollars ($325,000.00) (the “Base Salary”). Effective on January 1, 2015, the Base Salary shall be increasedto Three Hundred and Fifty Thousand Dollars ($350,000.00) and on January 1, 2016, the Base Salary shall be increased to Three HundredSeventy Five Thousand Dollars ($375,000); provided, however, if the Company closes a licensing or other strategic transaction inwhich the Company receives a Three million Dollar ($3,000,000) up-front cash payment or closes at least a Fifteen Million Dollar($15,000,000) equity financing prior to the January 1, 2016, Mr. O’Connor’s salary shall immediately be increased toThree Hundred Seventy Five Thousand Dollars ($375,000.00) upon closing of such transaction and receipt of such funds. The BaseSalary shall be paid in two components, as follows: (a) Seventy Five percent (75%) of the Base Salary shall be paid in cash (the“Cash Component”), and (b) Twenty Five percent (25%) of the Base Salary shall be paid in Common Stock (the “StockComponent”) as set forth below.

 

	“(i) Theapplicable Cash Component will be paid in equal installments not less frequently than bi-monthly in accordance with the Company'ssalary payment practices and employment tax withholding obligations in effect from time to time for senior executives of the Company.

 

	“(ii) Onthe last business day of each fiscal quarter (if Executive has provided services to the Company in accordance with the Agreementthrough such date) (each such date, a “Grant Date”), the Company shall grant to Executive, in accordance withthe terms and provisions of the Company's 2011 Omnibus Incentive Plan (as such plan is amended from time-to-time), a number ofwhole shares of Common Stock equal to the quotient of one-quarter of the Stock Component divided by the Fair Market Value (as suchterm is defined in the 2011 Omnibus Incentive Plan) of the Common Stock on the Grant Date (i.e., No. shares = 1⁄4 Stock Component/FMV).In the event Executive’s employment is terminated prior to the last business day of any fiscal quarter, on the last businessday of the applicable fiscal quarter, the Company shall grant to Executive a number of whole shares of Common Stock equal to (A)the sum of (i) the applicable percentage of the fiscal quarter that Executive provided services prior to termination, multipliedby (ii) one-quarter of the Stock Component, divided by (B) the Fair Market Value of the Common Stock on the Grant Date (i.e., No.shares = [1⁄4 Stock Component x the % of quarter services provided]/FMV). The shares issued pursuant to each such grant shallbe fully vested and non-forfeitable on the Grant Date. Any fractional share amount resulting from each such grant calculation shallbe promptly paid by the Company to Executive in cash. As soon as administratively feasible following each Grant Date, Executiveshall receive stock certificates evidencing the grant. Such stock certificates shall be issued to Executive as of the Grant Dateand registered on the books and records of the Company in Executive’s name. Except as otherwise set forth herein, the grantsshall be made in accordance with the terms and conditions of the 2011 Omnibus Incentive Plan.

 

	“(iii) Atthe time of issuance of the Common Stock as described in Section 3(a)(ii) above, or any time thereafter as determined by the Companyto be necessary or appropriate, Executive authorizes withholding of all applicable tax obligations from payroll and any other amountspayable to Executive, and otherwise agrees to make adequate arrangements, as approved at the discretion of the Company, for theapplicable tax obligations in connection with the issuance of the Common Stock. Subject to compliance with applicable law, theCompany, at its sole discretion, may permit Executive to satisfy all or any portion of the tax obligations by deducting from sharesof Common Stock to be issued to Executive a number of whole shares having a fair market value, as determined by the Company, notin excess of the amount of the tax obligations determined by the applicable minimum statutory withholding rates.

 

 

	“(iv) Executiveacknowledges and agrees that as of the date hereof, the Company has not filed a Registration Statement on Form S-8 (or any otherregistration form) that covers the shares of Common Stock issued or issuable under the Company's 2011 Omnibus Incentive Plan. Executivefurther acknowledges and agrees that the shares of Common Stock received by Executive pursuant to this Section 3(a) may not besold by Executive except pursuant to an applicable registration or exemption from registration. No Common Stock shall be issuedin connection with a grant hereunder unless and until all legal requirements applicable to the issuance of such Common Stock havebeen complied with. Each grant made shall be conditioned on Executive’s undertaking in writing to comply with such restrictionson his subsequent disposition of such shares of Common Stock, and certificates representing such shares may be legended to reflectany such restrictions. Certificates representing shares of Common Stock issued or transferred hereunder will be subject to suchstop transfer orders and other restrictions as may be required by applicable laws, regulations and interpretations, including anyrequirement that a legend be placed thereon.

 

	“(v) Executiveshall not have voting or any other rights as a stockholder of the Company with respect to any shares of Common Stock issuable hereunderuntil immediately following the issuance of any such shares of Common Stock in accordance herewith and the Company's 2011 OmnibusIncentive Plan.

 

	“(vi) Executiveunderstands and agrees that the Company has not advised Executive regarding Executive’s income tax liability in connectionwith the issuance of stock as contemplated hereunder. Executive has reviewed with Executive’s own tax advisors the federal,state, local and foreign tax consequences of an investment in the Common Stock and the transactions contemplated hereby. Executiveis relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Granteeunderstands that, except as otherwise specifically provided in the Agreement, Executive (and not the Company) shall be responsiblefor Executive’s own tax liability that may arise as a result of an investment in the Common Stock or the transactions contemplatedby this Agreement.”

 

	(vii) Notwithstandingany language in this Amendment to the contrary, in the event that there are not sufficient shares of Common Stock authorized andavailable for issuance under the Company's 2011 Omnibus Incentive Plan to allow for all, or any portion, of the Stock Componentto be paid in shares of Common Stock on any applicable grant date, the Company shall pay the Stock Component (or applicable portionthereof) in cash. In furtherance of the foregoing, in the event it is known to the Company in advance of an anticipated grant dateunder Section 3(a)(ii) that they will not have sufficient shares to pay all or a portion of the Stock Component in shares of CommonStock, the Company shall pay the (applicable portion of the) Stock Component in cash at the same time as payment of the Cash Component,in accordance with the Company's salary payment practices.

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2. AMENDMENT TOSECTION 3(e)(ii). Section 3(e)(ii) of the Agreement is hereby amended and restated in its entirety to read as follows:

 

	“(ii) Executiveshall be permitted to participate in any capital raise conducted by the Company and purchase shares of Common Stock at a price15% below the applicable offering price (or conversion price) of shares offered to investors during such capital raise or offering,to the extent permitted by, and on terms consistent with, the Company's 2011 Omnibus Incentive Plan, applicable law and the rulesand regulations of NASDAQ (or such other exchange on which the shares of Common Stock shall be listed from time-to-time).”

 

 

3. AMENDMENT TOSECTION 4. Section 4 of the Agreement is hereby amended to include Section 4(d) as follows:

 

“(d) Section409A.

 

(i)          Notwithstandinganything to the contrary in this Agreement, no Severance Payments or benefits to be paid or provided to Executive, if any, pursuantto this Agreement that, when considered together with any other Severance Payments or separation benefits, are considered deferredcompensation under Section 409A of the Internal Revenue Code of 1986, as amended (together, the “Deferred Payments”)will be paid or otherwise provided until Executive has a “separation from service” within the meaning of Section 409A.

 

Notwithstandinganything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409Aat the time of Executive’s termination (other than due to death), then the Deferred Payments, if any, that are payable withinthe first six (6) months following Executive’s “separation from service”, will become payable on the first payrolldate that occurs on or after the date six (6) months and one (1) day following the date of Executive’s “separationfrom service”. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicableto each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following Executive’s “separationfrom service”, but prior to the six (6) month anniversary of the “separation from service”, then any paymentsdelayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the dateof Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable toeach payment or benefit. Each payment, installment and benefit payable under this Agreement is intended to constitute a separatepayment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. For purposes of this Agreement, “Treasury Regulations”shall mean the treasury regulations promulgated under the Internal Revenue Code of 1986, as amended.

 

(ii)         Anyamount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section1.409A-1(b)(4) of the Treasury Regulations or qualifies as a payment made as a result of an involuntary separation from servicepursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A limits will not constituteDeferred Payments for purposes of clause (i) above.

 

(iii)        TheSeverance Payments provided under this Section 4 are intended to be exempt from or comply with the requirements of Section 409Aso that none of the Severance Payments and benefits to be provided hereunder will be subject to the additional tax imposed underSection 409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or so comply. The Company and Executiveagree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary,appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive underSection 409A.”

 

4. BONUS PAYMENT;SEVERANCE PAYMENT. For sake of clarity, the parties agree that any Bonus Payment under Section 3(b) and any Severance Paymentunder Section 4(b) of the Agreement shall be paid solely in cash.

 

 

5. MISCELLANEOUS.

 

(a)The provisions of Sections 8 (‘Notices’), 9 (‘Legal Representation’), 11 (‘Governing Law’),12 (‘Assignment’), 13 (‘Severability’), 15 (‘Remedies’), 16 (‘Dispute Resolution’)of the Agreement are hereby incorporated by reference as if set forth in full herein, mutatismutandis.

 

(b)Except as provided herein, the terms of the Agreement shall remain in full force and effect. The Agreement (together with ExhibitA thereto), as amended hereby, constitutes the entire agreement between the parties hereto relating to the subject matter hereof,and supersedes all prior agreements and understandings, whether oral or written, with respect to the same. No modification, alteration,amendment or revision of or supplement to the Agreement, as amended hereby, shall be valid or effective unless the same is in writingand signed by both parties hereto. Email correspondence does not constitute a writing for the purposes of this provision.

 

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**IN WITNESS WHEREOF,** the parties haveexecuted this Amendment No. 1 to Employment Agreement as of the day and year first above written.

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