Item
1.01. Entry into a Material Definitive Agreement.
In
connection with the recent debt-financing by Advaxis, Inc. (the “
Company
”), on October
26, 2009, the Company entered into a Note Purchase Agreement with Robert E.
Hill, Jr. (“
Hill
”) pursuant to
which the Company issued (i) junior unsecured convertible promissory bridge
notes of the Company (“
Notes
”) in the
aggregate principal face amount of $500,000, for an aggregate net purchase price
of $425,000 and (ii) warrants to purchase 1,062,500 shares of the Company’s
common stock, $0.001 par value (the “
Common Stock
”), at an
exercise price of $0.20 per share, subject to adjustments upon the occurrence of
certain events (“
Warrants
”). Also
in connection with this debt financing, on October 20, 2009, the Company entered
into a Note Purchase Agreement with Gary Chartrand (together with Hill, the
“
Investors
”)
pursuant to which the Company issued (i) Notes in the aggregate principal face
amount of $1,000,000, for an aggregate net purchase price of $850,000 and (ii)
Warrants to purchase 2,125,000 shares of Common Stock. As of October
26, 2009, the Company has issued an aggregate of (i) Notes in the aggregate
principal face amount of $1,558,824, for an aggregate net purchase price of
$1,325,000 and (ii) Warrants to purchase 3,312,500 shares of Common Stock
(including a Note in the principal face amount of $58,824, with a net purchase
price of $50,000 and (ii) Warrants to purchase 125,000 shares of Common Stock
issued prior to October 20, 2009). The Notes were issued with an
original issue discount of 15%. The Investors paid $0.85 for each
$1.00 of principal amount of the Notes purchased. The Notes are
convertible into shares of Common Stock, all as more particularly described
below and in the form of Notes, filed as Exhibit 4.13 to the Company’s
registration statement on Form S-1, filed with the Securities and Exchange
Commission (the “
SEC
”) on October 22,
2009. The Warrants are more particularly described below and in the
form of Warrant, filed as Exhibit 4.12 to the Company’s registration
statement on Form S-1, filed with the SEC on October 22, 2009.
The Notes
issued in the aggregate face amount of $1,500,000 mature on the later of (i)
April 30, 2010 and (ii) the repayment in full or conversion of the Senior
Indebtedness (as defined below), and the Note issued in the aggregate face
amount of $58,824 matures on the later of (i) March 31, 2010 and (ii) the
repayment in full or conversion of the Senior Indebtedness (each a “
Maturity
Date
”). The Notes may be prepaid at anytime by the Company
without penalty. The indebtedness represented by the Notes is
expressly subordinate to the Company’s currently outstanding senior secured
indebtedness that is described in the Company’s Form 8-K/A filed with the SEC on
June 19, 2009 as well as any future senior indebtedness of any kind (the “
Senior Indebtedness
”)
and promissory notes held by Thomas Moore, the Company’s chief executive
officer. No payments shall be made to the holders of the Notes until
the repayment in full or conversion of the Senior Indebtedness. The
Warrants are exercisable at any time on or before the fifth anniversary of the
issue date of the Warrants and may be exercised on a cashless basis under
certain circumstances.
In the
event the Company consummates an equity financing with aggregate gross proceeds
of not less than $2,000,000 (a “
Qualified Equity
Financing
”) prior to the second business day immediately preceding the
Maturity Date of a Note, then such Investor shall have the option to convert all
or a portion of such Note into the same securities sold in the Qualified Equity
Financing, at an effective per share conversion price equal to 90% of the per
share purchase price of the stock sold in the Qualified Equity
Financing.
In the
event the Company does not consummate a Qualified Equity Financing prior to the
second business day immediately preceding the Maturity Date of a Note, then such
Investor shall have the option to convert all or a portion of such Note into
shares of Common Stock, at an effective per share conversion price equal to 50%
of the volume-weighted average price per share of the Common Stock over the five
(5) consecutive trading days immediately preceding the third business day prior
to the Maturity Date.
To the
extent any Investor does not elect to convert its Note as described above, the
principal amount of such Note not so converted shall be payable in cash on the
Maturity Date of such Note.
The Notes
may be converted by Investors in whole or in part. The Notes and
Warrants include a limitation on conversion or exercise, which provides that at
no time will the Investors be entitled to convert any portion of the Note or
exercise any portion of the Warrant, that would result in the beneficial
ownership by an Investor and its affiliates of more than 9.99% of the
outstanding shares of Common Stock on such date.
