FORM 10-K/A

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)

þ
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2014 .

OR
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _________ to __________.

Commission file number 1-11889
 
 
CEL-SCI CORPORATION
(Exact name of registrant as specified in its charter)
 
COLORADO   84-0916344
(State or other jurisdiction of incorporation or organization)    (I.R.S. Employer Identification No.)
 
8229 Boone Blvd., Suite 802
Vienna, Virginia
  22182
(Address of principal executive offices)   (Zip Code)
 
Registrant's telephone number, including area code: (703) 506-9460
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
 
Common Stock, $.01 par value Series S Warrants
(Title of Class)
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ   No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,  and will not be contained,  to the best of Registrant's  knowledge,  in definitive proxy or information  statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o Accelerated filer  þ
Non-accelerated filer o Smaller reporting company o
(Do not check if a smaller reporting company)       
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): o Yes  þ No

The aggregate market value of the voting stock held by non-affiliates of the Registrant, based upon the closing sale price of the registrant’s common stock on March 31, 2014, as quoted on the NYSE MKT, was $86,967,791 .

As of December 11, 2014, the Registrant had 91,345,536 issued and outstanding shares of common stock.

Documents Incorporated by Reference:   None
 


 
 
 
 
 
EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (Amendment No. 1) is being filed to amend CEL-SCI's Annual Report on Form 10-K for the fiscal year ended September 30, 2014 (the “Original Filing”) filed with the U.S. Securities and Exchange Commission on December 23, 2014.  The purpose of this Amendment No. 1 is to:

●  
expand the disclosure to Item 1. with respect to certain agreements;
 
●  
add two risk factors in Item 1A.; and
 
●  
file additional exhibits (Item 15).

Since there have been no changes to the other parts of the 10-K or the financial statements included in the Original Filing, only Items 1, 1A and 15, and the new exhibits are filed as part of this Amendment No. 1.

 
 
 

 
 
PART I

ITEM 1.  BUSINESS

CEL-SCI is focused on finding the best way to activate the immune system to fight cancer and infectious diseases. Its lead investigational therapy Multikine (Leukocyte Interleukin, Injection) is currently in a pivotal Phase III clinical trial against head and neck cancer, for which CEL-SCI has received Orphan Drug Status from the U.S. FDA. If the primary endpoint of the FDA study is achieved, the results will be used to support applications to regulatory agencies around the world for worldwide commercial marketing approvals as a first line cancer therapy. Additional clinical indications for Multikine include cervical dysplasia in HIV/HPV co-infected women, for which a Phase I study was successfully concluded; and the treatment of peri-anal warts in HIV/HPV co-infected men and women, for which a Phase I trial is now underway in conjunction with the U.S. Navy under a Cooperative Research and Development Agreement.

CEL-SCI’s immune therapy, Multikine, is being used in a different way than immune therapy is usually used.  It is administered locally to treat local tumors or infections and it is given before any other therapy has been administered.  For example, in the ongoing Phase III clinical trial, Multikine is given locally at the site of the tumor as a first line of treatment before surgery, radiation and/or chemotherapy because that is when the immune system is thought to be strongest. The goal is to help the intact immune system kill the micro metastases that usually cause recurrence of the cancer.  In short, we believe that local administration and administration before weakening of the immune system by chemotherapy and radiation will result in higher efficacy with less or no toxicity.

CEL-SCI’s focus on HPV is not the development of an antiviral against HPV in the general population.  Instead it is the development of an immunotherapy to be used in patients who are immune suppressed by diseases such as HIV and are therefore less able or unable to control HPV and its resultant diseases.  This group of patients has no viable treatments available to them and there are, to CEL-SCI’s knowledge, no competitors at the current time.  HPV is also relevant to the head and neck cancer Phase III study since it is now known that HPV is a cause of head and neck cancer.  Multikine was shown to kill HPV in an earlier study of HIV infected women with cervical dysplasia.

CEL-SCI is also investigating a different peptide-based immunotherapy (LEAPS-H1N1-DC) as a possible treatment for H1N1 hospitalized patients and as a vaccine (CEL-2000) for Rheumatoid Arthritis (currently in preclinical testing) using its LEAPS technology platform. The investigational immunotherapy LEAPS-H1N1-DC treatment involves non-changing regions of H1N1 Pandemic Flu (www.jci.org/articles/view/67550), Avian Flu (H5N1), and the Spanish Flu, as CEL-SCI scientists are very concerned about the possible emergence of a new more virulent hybrid virus through the combination of H1N1 and Avian Flu, or possibly Spanish Flu.

CEL-SCI has operations in Vienna, Virginia, and in/near Baltimore, Maryland, USA .

CEL-SCI was formed as a Colorado corporation in 1983. CEL-SCI’s principal office is located at 8229 Boone Boulevard, Suite 802, Vienna, VA 22182.  CEL-SCI’s telephone number is 703-506-9460 and its website is www.cel-sci.com. CEL-SCI does not incorporate the information on its website into this report, and you should not consider it part of this report .

CEL-SCI makes its electronic filings with the Securities and Exchange Commission (SEC), including its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports available on its website free of charge as soon as practicable after they are filed or furnished to the SEC.
 
 
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CEL-SCI’S PRODUCTS

CEL-SCI’s product pipeline consists of the following:

 
1)
Multikine (Leukocyte Interleukin, Injection) investigational immunotherapy against cancer and Human Papilloma Virus (HPV);
 
 
2)
LEAPS technology, with two investigational therapies, LEAPS-H1N1-DC pandemic flu treatment for hospitalized patients and CEL-2000, a rheumatoid arthritis treatment vaccine.
 
MULTIKINE

CEL-SCI’s lead investigational therapy, Multikine (Leukocyte Interleukin, Injection), is currently in a Phase III clinical trial as a potential therapeutic agent directed at using the immune system to increase survival of advanced primary head and neck cancer patients.  Data from Phase I and Phase II clinical trials suggest that Multikine simulates the activities of a healthy person's immune system, enabling it to use the body's own anti-tumor immune response. Multikine (Leukocyte Interleukin, Injection) is the full name of this investigational therapy, which, for simplicity, is referred to in the remainder of this document as Multikine.  Multikine is the trademark that CEL-SCI has registered for this investigational therapy, and this proprietary name is subject to FDA review in connection with CEL-SCI’s future anticipated regulatory submission for approval.  Multikine has not been licensed or approved for sale, barter or exchange by the FDA or any other regulatory agency. Neither has its safety or efficacy been established for any use.

Multikine has been cleared by the regulators in seventeen countries around the world, including the U.S. FDA, for a global Phase III clinical trial in advanced primary (not yet treated) head and neck cancer patients.  The trial is currently under the management of two new clinical research organizations (CROs) who are adding clinical centers in existing and new countries to increase the speed of patient enrollment.

The trial will test the hypothesis that Multikine treatment administered prior to the current standard therapy for head and neck cancer patients (surgical resection of the tumor and involved lymph nodes followed by radiotherapy or radiotherapy and concurrent chemotherapy) will extend the overall survival, enhance the local/regional control of the disease and reduce the rate of disease progression in patients with advanced oral squamous cell carcinoma.

The primary clinical endpoint in CEL-SCI's ongoing Phase III clinical trial is that a 10% improvement in overall survival in the Multikine treatment arm, plus the current standard of care (SOC - consisting of surgery + radiotherapy or surgery + radiochemotherapy), over that which can be achieved in the SOC arm alone (in the well-controlled Phase III clinical trial currently ongoing) must be achieved.  Based on what is presently known about the current survival statistics for this population, CEL-SCI believes that achievement of this endpoint should enable CEL-SCI, subject to further consultations with FDA, to move forward, prepare and submit a Biologic License Application to FDA for Multikine.
 
 
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In this clinical trial Multikine is given to cancer patients first, i.e., prior to their receiving any conventional treatment for cancer, including surgery, radiation and/or chemotherapy.    This could be shown to be important because conventional therapy may weaken the immune system, and may compromise the potential effect of immunotherapy. Because Multikine is given before conventional cancer therapy, when the immune system should be more intact, CEL-SCI believes the possibility exists for it to have a greater likelihood of activating an anti-tumor immune response under these conditions. This likelihood is one of the clinical aspects being evaluated in the ongoing global Phase III clinical trial.

Multikine is a different kind of investigational therapy in the fight against cancer; Multikine is a defined mixture of cytokines.   It is a combination immunotherapy, possessing both active and passive properties.

In October 2012 and again in November 2013, in an interim review of the safety data from the Phase III study, an Independent Data Monitoring Committee (IDMC) raised no safety concerns. The IDMC also indicated that no safety signals were found that would call into question the benefit/risk of continuing the study. CEL-SCI considers the results of the IDMC review to be important since studies have shown that up to 30% of Phase III trials fail due to safety considerations and the IDMC’s safety findings from this interim review were similar to those reported by investigators during CEL-SCI’s Phase I-II trials. Ultimately, the decision as to whether a drug is safe is made by the FDA based on an assessment of all of the data from a trial.

During the early investigational phase, in Phase I and Phase II clinical trials in over 220 subjects who received the investigational therapy Multikine in doses of 200 to 3200 IU (international units), no serious adverse events were reported as being expressly due to administration of this investigational therapy, and subjects in those clinical trials and the treating physicians reported that this investigational therapy was well tolerated in those early-stage clinical trials. Adverse events which were reported included pain at the injection site, local minor bleeding and edema at the injection site, diarrhea, headache, nausea, and constipation. No "abnormal" laboratory results were reported following Multikine treatment - other than those commonly seen by treating physicians in this patient population - regardless of Multikine administration. Similarly, in these early-phase clinical studies in patients, there was no reported increased toxicity of follow-on treatments as a result of Multikine administration. No complications following surgery (such as increased time for wound healing) were reported. No definitive conclusions can be drawn from these data about the safety or efficacy profile of this investigational therapy, further research is required and the global Phase III study is ongoing in an effort to confirm these results.

 
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The following is a summary of results from CEL-SCI’s last Phase II study conducted with Multikine.  This study used the same treatment protocol as is being used in CEL-SCI’s Phase III study:

  
In the final Phase II clinical study, using the same dosage and treatment regimen as is being used in the Phase III study, head and neck cancer patients with locally advanced primary disease who received the investigational therapy Multikine as first-line investigational therapy followed by surgery and radiotherapy were reported by the clinical investigators to have had a 63.2% overall survival (OS) rate at 3.5 years from surgery. This percentage OS was arrived at as follows: of the 22 subjects enrolled in this final Phase II study, the consent for the survival follow-up portion of the study was received from 19 subjects. One subject did not consent to the follow-up portion of the study. The other 2 subjects did not have squamous cell carcinoma of the oral cavity and were thus not evaluable per the protocol. The overall survival rate of subjects receiving the investigational therapy in this study was compared to the overall survival rate that was calculated based upon a review of 55 clinical trials conducted in the same cancer population (with a total of 7,294 patients studied), and reported in the peer reviewed scientific literature between 1987 and 2007. Review of this literature showed an approximate survival rate of 47.5% at 3.5 year from treatment. Therefore, the results of CEL-SCI's final Phase II study were considered to be potentially favorable in terms of overall survival recognizing the limitations of this early-phase study. It should be noted that an earlier investigational therapy Multikine study appears to lend support to the overall survival findings described above - Feinmesser et al Arch Otolaryngol. Surg. 2003. However, no definitive conclusions can be drawn from these data about the potential efficacy or safety profile of this investigational therapy. Moreover, further research is required, and these results must be confirmed in the well-controlled Phase III clinical trial of this investigational therapy that is currently in progress. Subject to completion of that Phase III trial and FDA's review and acceptance of CEL-SCI's entire data set on this investigational therapy, CEL-SCI believes that these early-stage clinical trial results indicate the potential for this investigational therapy to become a treatment for advanced primary head and neck cancer.
 
  
Reported average of 50% reduction in tumor cells in Phase II trials: The clinical investigators who administered the three week Multikine treatment regimen used in Phase II studies reported that, as was determined in a controlled pathology study, Multikine administration appeared to have caused, on average, the disappearance of about half of the cancer cells present at surgery (as determined by histopathology assessing the area of Stroma/Tumor (Mean+/- Standard Error of the Mean of the number of cells counted per filed)) even before the start of standard therapy such as radiation and chemotherapy (Timar et al JCO 2005).
 
  
Reported 12% complete response in the final Phase II trial: The clinical investigators who administered the three week Multikine investigational treatment regimen used in the final Phase II study reported that, as was determined in a controlled pathology study, the tumor apparently was no longer present (as determined by histopathology) in approximately 12 % of patients (2 of 17 evaluable by pathology). This determination was made by three pathologists blinded to the study from the surgical specimen after a three week treatment with Multikine (Timar et al JCO 2005).
 
 
 
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Adverse events reported in clinical trials: In clinical trials conducted to date with the Multikine investigational therapy, adverse events which have been reported by the clinical investigators as possibly or probably related to Multikine administration included pain at the injection site, local minor bleeding and edema at the injection site, diarrhea, headache, nausea, and constipation .

The clinical significance of these and other data, to date, from the multiple Multikine clinical trials is not yet known. These preliminary clinical data do suggest the potential to demonstrate a possible improvement in the clinical outcome for patients treated with Multikine.

Subject to completion of CEL-SCI's global Phase III clinical trial and FDA's review of CEL-SCI’s entire data set on this investigational therapy, if the FDA were to conclude that the safety and efficacy of this investigational therapy is established, the early-phase clinical data is encouraging in suggesting the potential that head and neck cancer patients with advanced primary disease (approximately 66% of all head and neck cancer patients) could be candidates for this investigational therapy if it were to be approved by FDA.
 
In August 2008, CEL-SCI signed an agreement with Teva Pharmaceutical Industries Ltd., or Teva, that gives Teva the exclusive right and license to market, distribute and sell Multikine in Israel and Turkey for treatment of head and neck cancer, if approved.  The agreement terminates on a country-by-country basis 10 years after the product launch in each country or upon a material breach or upon bankruptcy of either party.  The agreement will automatically extend for additional two year terms unless either party gives notice of its intent not to extend the agreement.  If CEL-SCI develops Multikine for other oncology indications and Teva indicates a desire to participate, the parties have agreed to negotiate in good faith with respect to Teva’s participation and contribution in future clinical trials.
 
Teva has agreed to use all reasonable efforts to obtain regulatory approval to market and sell Multikine in its territory at its own cost and expense.  Pursuant to the agreement, it is CEL-SCI’s responsibility to supply Multikine and Teva’s responsibility to sell Multikine, if approved.  Net sales will be divided 50/50 between the two parties. Teva also initially agreed to fund certain activities relating to the conduct of a clinical trial in Israel as part of the global Phase III trial for Multikine. In January 2012, pursuant to an assignment and assumption agreement between CEL-SCI, Teva and GCP Clinical Studies Ltd., or GCP, Teva transferred all of its rights and obligations concerning the Phase III trial in Israel to GCP.  GCP is now operating the Phase III trial in Israel pursuant to a service agreement with CEL-SCI.
 
In July 2011, Serbia and Croatia were added to Teva’s territory, pursuant to a joinder agreement between CEL-SCI and PLIVA Hrvatska d.o.o., or PLIVA, an affiliate of Teva’s, subject to similar terms as described above.

In consideration for the rights granted by CEL-SCI to   PLIVA under the joinder agreement, CEL-SCI will be paid by PLIVA (in U.S. dollars):
 
$100,000 upon European Medicines Agency ("EMA") grant of Marketing Authorization for Multikine;
     
 
$50,000 upon Croatia’s grant of reimbursement status for Multikine in Croatia; and
     
 
$50,000 upon Serbia’s grant of reimbursement status for Multikine in Serbia.
 
In November 2000, CEL-SCI signed an agreement with Orient Europharma Co., Ltd., or Orient Europharma, of Taiwan, which agreement was amended in October 2008 and again in June 2010.  Pursuant to this agreement, as amended, Orient Europharma has the exclusive marketing and distribution rights to Multikine, if approved, for head and neck cancer, naso-pharyngeal cancer and potentially cervical cancer indications in Taiwan, Singapore, Malaysia, Hong Kong, the Philippines, South Korea, Australia and New Zealand.  CEL-SCI has granted Orient Europharma the first right of negotiation with respect to Thailand and China.

The agreement requires Orient Europharma to fund 10% of the cost of the clinical trials needed to obtain marketing approvals in these countries for head and neck cancer, naso-pharyngeal cancer and potentially cervical cancer.  Orient Europharma has signed nine centers in Taiwan where it has enrolled patients as part of the ongoing Phase 3 Multikine clinical trial and has made further financial contributions towards the cost of the ongoing Phase 3 clinical trial.  If Multikine is approved for sale, Orient Europharma will purchase Multikine from CEL-SCI for 35% of the gross selling price in each country.  Orient Europharma is obligated to use the same diligent efforts to develop, register, market, sell and distribute the Multikine in the territory as with its own products or other licensed products.

The agreement will terminate on a country-by-country basis 15 years after the product approval for Multikine in each country, at which point the agreement will be automatically extended for successive two year periods, unless either party gives notice of its intent not to extend the agreement.  The agreement may also be terminated upon bankruptcy of either party or material misrepresentations that are not cured within 60 days.  If the agreement ends before the 15 year term through no fault of either party, CEL-SCI will reimburse Orient Europharma for a prorated part of Orient Europhorma’s costs towards the clinical trials of Multikine.  If Orient Europharma fails to make certain minimum purchases of Multikine during the term of the agreement, Orient Europhorma’s rights to the territory will become non-exclusive.
 
CEL-SCI has a licensing agreement with Byron Biopharma LLC, or Byron, under which CEL-SCI granted Byron an exclusive license to market and distribute Multikine in the Republic of South Africa, if approved.  This license will terminate 20 years after marketing approval in South Africa or after bankruptcy or uncured material breach.  After the 20-year period has expired, the agreement will be automatically extended for successive two year periods, unless either party gives notice of its intent not to extend the agreement.

Pursuant to the agreement, Byron will be responsible for registering Multikine in South Africa.  If Multikine is approved for sale in South Africa, CEL-SCI will be responsible for manufacturing the product, while Byron will be responsible for sales in South Africa.  Sales revenues will be divided between CEL-SCI and Byron.  CEL-SCI will be paid fifty (50%) percent of the net sales of Multikine.
 
On April 23, 2013, CEL-SCI announced that it had replaced Inventiv Health Clinical, the clinical research organization (CRO) running its Phase III clinical trial. This was necessary since the patient enrollment in the study dropped off substantially following a takeover of Pharmanet by Inventiv which caused many of the members of Inventiv’s study team to leave Inventiv.  CEL-SCI has hired two CRO’s who will manage the global Phase III study: Aptiv Solutions, Inc., or Aptiv, and Ergomed Clinical Research Limited, or Ergomed, which are both international leaders in managing oncology trials. Ergomed is in charge of all data generation and patient accrual globally, while Aptiv is in charge of data management and data monitoring.  The study is currently being expanded to about 100 clinical sites globally.
 
 
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As of November 30, 2014, the last update given by CEL-SCI, the study had enrolled approximately 310 patients.  CEL-SCI expects to see a further increase in the number of patients enrolled in the study at an accelerating pace as (i) the current centers finalize all logistical issues and (ii) more clinical centers are added throughout the world.  Full enrollment of the planned 880 patients is expected by about the end of 2015.

On April 19, 2013, October 10, 2013 and October 24, 2013, CEL-SCI entered into co-development agreements with Ergomed.  These three agreements all relate to an overall agreement to work jointly on the clinical development of Multikine.  Under the April 2013 agreement, Ergomed will contribute up to $10 million towards the ongoing Phase 3 study in head and neck cancer in the form of offering discounted clinical services in exchange for a single digit percentage of milestone and royalty payments, up to a specified maximum amount, from sales of Multikine.  In this first agreement, Ergomed’s contribution towards the study will be a 30%  reduction of the amounts billed, up to a maximum of $10 million.  In the second agreement, dated October 10, 2013, Ergomed’s contribution will be a 50% reduction of the amounts billed, up to a maximum of $3 million, for the costs of the clinical trial(s) for Multikine in HIV/HPV co-infected women with cervical intraepithelial neoplasia, or cervical dysplasia. In the third agreement, dated October 24, 2013, Ergomed’s contribution towards the study will be a 50% reduction of the amounts billed, up to a maximum of $3 million, towards the clinical and regulatory costs for trials of Multikine in HIV/HPV co-infected men and women with anal intraepithelial neoplasia, or peri-anal warts.  The contributions of Ergomed towards the three clinical studies will be a combined maximum of $16 million.  Ergomed will be repaid at a rate four times the aggregate amount of discounted clinical services it provides, in the form of a 5% royalty on sales of Multikine and/or 5% of certain payments from licensees of Multikine.  By way of example, if Ergomed’s contribution towards the three development programs is the maximum amount of $16 million in reductions of the amounts billed for such programs, then Ergomed will have the right to receive up to $64 million in the form of a 5% royalty on sales of Multikine and/or 5% of certain payments from licensees of Multikine.
 
The terms of the three Ergomed agreements are the same.  CEL-SCI will have the right to conduct, and, using commercially reasonable efforts, will have the sole responsibility for the clinical development of, as well as the commercialization and intellectual property maintenance for Multikine and will bear all associated costs for these activities. Ergomed will have primary responsibility for new patient enrollment in the Phase 3 clinical trial.

The terms of the agreements commence on the dates they are signed and expire on the date on which both parties have fulfilled all of their obligations contemplated by the agreements, unless sooner terminated pursuant to the terms of the agreements, or unless agreed to in writing by both parties.

CEL-SCI estimates the total cash cost of the Phase III trial, with the exception of the parts that will be paid by its partner, Orient Europharma, to be approximately $28.2 million after September 30, 2014.  This is in addition to approximately $16.4 million which has been paid as of September 30, 2014.  This estimate is based on information currently available in CEL-SCI’s contracts with the Clinical Research Organizations responsible for managing the Phase III trial.  This number can be affected by the speed of enrollment, foreign currency exchange rates and many other factors, some of which cannot be foreseen today.  It is therefore possible that the cost of the Phase III trial will be higher than currently estimated.

In October 2013, CEL-SCI announced it entered into a CRADA with the U.S. Naval Medical Center, San Diego.  Pursuant to this agreement, the Naval Medical Center is currently conducting a Human Subjects Institutional Review Board approved Phase I study of CEL-SCI’s investigational immunotherapy, Multikine, in HIV/HPV co-infected men and women with peri-anal warts.  Anal and genital warts are commonly associated with the Human Papilloma Virus (HPV), the most common sexually transmitted disease. Men and women with a history of anogenital warts have a 30 fold increased risk of anal cancer.  Persistent HPV infection in the anal region is thought to be responsible for up to 80% of anal cancers. HPV is a significant health problem in the HIV infected population as individuals are living longer as a result of greatly improved HIV medications. On September 29, 2014 CEL-SCI announced that the first volunteer patient had been enrolled and administered Multikine.
 
The purpose of this study is to evaluate the safety and clinical impact of Multikine as a treatment of peri-anal warts and assess its effect on AIN in HIV/HPV co-infected men and women.

 
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CEL-SCI contributes the investigational study drug Multikine, will retain all rights to any currently owned technology, and will have the right to exclusively license any new technology developed from the collaboration.

Multikine is being given to the HIV/HPV co-infected patients with peri-anal warts since promising early results were seen in another Institutional Review Board approved Multikine Phase I study conducted at the University of Maryland. In this study, investigational therapy Multikine was given to HIV/HPV co-infected women with cervical dysplasia resulting in visual and histological evidence of clearance of lesions.  Furthermore, elimination of a number of HPV strains was determined by in situ polymerase chain reaction (PCR) performed on tissue biopsy collected before and after Multikine treatment.  As reported by the investigators in the earlier study, the study volunteers all appeared to tolerate the treatment with no reported serious adverse events.
 
The treatment regimen for the study of up to 15 HIV/HPV co-infected patient volunteers with peri-anal warts to be conducted by the Naval Medical Center is identical to the regimen that was used in the earlier Multikine cervical study in HIV/HPV co-infected patients.

Human Papilloma Virus (HPV) is the most common sexually transmitted disease.  HPV is a significant health problem in the HIV infected population as individuals are living longer as a result of greatly improved HIV medications.  People living with HIV and others with compromised immunity are more at risk for HPV-related complications.  Persistent HPV infection can also be a precursor to cervical cancer.

INTELLECTUAL PROPERTY

Patents and other proprietary rights are essential to our business. CEL-SCI files patent applications to protect our technologies, inventions and improvements to our inventions that CEL-SCI considers important to the development of our business. CEL-SCI files for patent registration in the United States and in key foreign markets.  CEL-SCI’S intellectual property portfolio covers its proprietary technologies, including Multikine and LEAPS, by multiple issued patents and pending patent applications.

Multikine is protected by a US patent, which is a composition-of-matter patent issued in May 2005 that, in its current format, expires in 2024.  Additional composition-of-matter patents for Multikine have been issued in Germany (issued in June 2011 and currently set to expire in 2025), China (issued in May 2011 and currently set to expire in 2024), and Japan (issued in November 2012 and currently set to expire in 2025).

CEL-SCI has three patent applications pending in Europe for Multikine, which, if issued, would extend protection through 2026, subject to any potential patent term extensions. In addition to the patents and applications that offer certain protections for Multikine, the method of manufacture for Multikine, a complex biological product, is held by CEL-SCI as trade secret.
 
LEAPS is protected by patents in the United States issued in February 2006, April 2007, and August 2007.   The LEAPS patents, which expire in 2021, 2022 and 2022, respectively, include overlapping claims, with composition of both matter (new chemical entity), process and methods-of-use, to maximize and extend the coverage in their current format.   Additional patent applications are pending in the United States and Europe that could offer protection through 2034.

CEL-SCI has six patent applications pending in the United States and one in Europe for LEAPS, which, if issued, would extend protection through 2034, subject to any potential patent term extensions.  Two pending U.S. applications are joint applications with Northeast Ohio Medical University (“Neoucom”), and one is a joint application with the National Institutes of Health (“NIH”).  If granted, CEL-SCI will share the ability to use the patents, unless CEL-SCI licenses the rights to the patent application and any ensuing patent from Neoucom or NIH.

As of the date of this report, there were no contested proceedings and/or third party claims with respect to CEL-SCI’s patents or patent applications.
 
MANUFACTURING FACILITY

Before starting the Phase III trial, CEL-SCI needed to build a dedicated manufacturing facility to produce Multikine.  This facility has been completed and validated, and has produced several clinical lots for the Phase III clinical trial.  The facility has also passed review by a European Union Qualified Person on two different occasions.

CEL-SCI’s lease on the manufacturing facility expires on October 31, 2028.   CEL-SCI completed validation of its new manufacturing facility in January 2010.  The state-of-the-art facility is being used to manufacture Multikine for CEL-SCI’s Phase III clinical trial.  In addition to using this facility to manufacture Multikine, CEL-SCI, only if the facility is not being used for Multikine, may offer the use of the facility as a service to pharmaceutical companies and others, particularly those that need to “fill and finish” their drugs in a cold environment (4 degrees Celsius, or approximately 39 degrees Fahrenheit).  However, priority will always be given to Multikine as management considers the Multikine supply to the clinical studies and preparation for a final marketing approval to be more important than offering fill and finish services.  Fill and finish is the process of filling injectable drugs in a sterile manner and is a key part of the manufacturing process for many medicines.  See Item 2 of this report for more information concerning the terms of this lease.
 
 
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LEAPS

CEL-SCI’s patented T-cell Modulation Process, referred to as LEAPS (Ligand Epitope Antigen Presentation System), uses “heteroconjugates” to direct the body to choose a specific immune response. LEAPS is designed to stimulate the human immune system to more effectively fight bacterial, viral and parasitic infections as well as autoimmune, allergies, transplantation rejection and cancer, when it cannot do so on its own. Administered like a vaccine, LEAPS combines T-cell binding ligands with small, disease associated, peptide antigens and may provide a new method to treat and prevent certain diseases.

The ability to generate a specific immune response is important because many diseases are often not combated effectively due to the body’s selection of the “inappropriate” immune response. The capability to specifically reprogram an immune response may offer a more effective approach than existing vaccines and drugs in attacking an underlying disease.

Using the LEAPS technology, CEL-SCI has created a potential peptide treatment for H1N1 (swine flu) hospitalized patients.  This LEAPS flu treatment is designed to focus on the conserved, non-changing epitopes of the different strains of Type A Influenza viruses (H1N1, H5N1, H3N1, etc.), including “swine”, “avian or bird”, and “Spanish Influenza”, in order to minimize the chance of viral “escape by mutations” from immune recognition. Therefore one should think of this treatment not really as an H1N1 treatment, but as a potential pandemic flu treatment.  CEL-SCI’s LEAPS flu treatment contains epitopes known to be associated with immune protection against influenza in animal models. 

In September 2009, the U.S. FDA advised CEL-SCI that it could proceed with its first clinical trial to evaluate the effect of LEAPS-H1N1 treatment on the white blood cells of hospitalized H1N1 patients. This followed an expedited initial review of CEL-SCI's regulatory submission for this study proposal.

In November 2009, CEL-SCI announced that The Johns Hopkins University School of Medicine had given clearance for CEL-SCI’s first clinical study to proceed using LEAPS-H1N1.   Soon after the start of the study, the number of hospitalized H1N1 patients dramatically declined and the study was unable to complete the enrollment of patients.

Additional work on this treatment for the pandemic flu is being pursued in collaboration with the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health, USA.  In May 2011 NIAID scientists presented data at the Keystone Conference on “Pathogenesis of Influenza: Virus-Host Interactions” in Hong Kong, China, showing the positive results of efficacy studies in mice of LEAPS H1N1 activated dendritic cells (DCs) to treat the H1N1 virus.  Scientists at the NIAID found that H1N1-infected mice treated with LEAPS-H1N1 DCs showed a survival advantage over mice treated with control DCs. The work was performed in collaboration with scientists led by Kanta Subbarao, M.D., Chief of the Emerging Respiratory Diseases Section in NIAID’s Division of Intramural Research, part of the National Institutes of Health, USA.
 
 
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In July 2013, CEL-SCI announced the publication of the results of additional influenza studies by researchers from the NIAID in the Journal of Clinical Investigation ( www.jci.org/articles/view/67550 ).  The studies described in the publication show that when CEL-SCI’s investigational J-LEAPS Influenza Virus treatments were used “in vitro” to activate DCs, these activated DCs, when injected into influenza infected mice, arrested the progression of lethal influenza virus infection in these mice.  The work was performed in the laboratory of Dr. Subbarao.

With its LEAPS technology, CEL-SCI also developed a second peptide named CEL-2000, a potential rheumatoid arthritis vaccine.  The data from animal studies of rheumatoid arthritis using the CEL-2000 treatment vaccine demonstrated that CEL-2000 is an effective treatment against arthritis with fewer administrations than those required by other anti-rheumatoid arthritis treatments, including Enbrel ® . CEL-2000 is also potentially a more disease type-specific therapy, is calculated to be significantly less expensive and may be useful in patients unable to tolerate or who may not be responsive to existing anti-arthritis therapies.

In February 2010 CEL-SCI announced that its CEL-2000 vaccine demonstrated that it was able to block the progression of rheumatoid arthritis in a mouse model.  The results were published in the scientific peer-reviewed Journal of International Immunopharmacology (online edition) in an article titled “CEL-2000: A Therapeutic Vaccine for Rheumatoid Arthritis Arrests Disease Development and Alters Serum Cytokine/Chemokine Patterns in the Bovine Collagen Type II Induced Arthritis in the DBA Mouse Model” with lead author Daniel Zimmerman, Ph.D., Senior Vice President of Research, Cellular Immunology at CEL-SCI.  The study was co-authored by scientists from CEL-SCI, Washington Biotech, Northeastern Ohio Universities Colleges of Medicine and Pharmacy and Boulder BioPath.

In August 2012, Dr. Zimmerman gave a Keynote presentation at the OMICS 2nd International Conference on Vaccines and Vaccinations in Chicago.  This presentation showed how the LEAPS peptides administered altered only select cytokines specific for each disease model, thereby improving the status of the test animals and even preventing death and morbidity.  These results support the growing body of evidence that provides for its mode of action by a common format in these unrelated conditions by r egulation of Th1 (e.g., IL12 and IFN-γ) and their action on reducing TNF-α and other inflammatory cytokines as well regulation of antibodies to these disease associated antigens.  This was also illustrated by a schematic model showing how these pathways in teract and result in the overall effect of protection and regulation of cytokines in a beneficial manner.

 On July 15, 2014, CEL-SCI announced that it has been awarded a Phase I Small Business Innovation Research (SBIR) grant in the amount of $225,000 from the National Institute of Arthritis Muscoskeletal and Skin Diseases, which is part of the National Institutes of Health.  The grant will fund the further development of CEL-SCI’s LEAPS technology as a potential treatment for rheumatoid arthritis, an autoimmune disease of the joints.  The work will be conducted at Rush University Medical Center in Chicago, Illinois in the laboratories of Tibor Glant, MD, Ph.D., The Jorge O. Galante Professor of Orthopedic Surgery; Katalin Mikecz, MD, Ph.D. Professor of Orthopedic Surgery & Biochemistry; and Allison Finnegan, Ph.D. Professor of Medicine.
 
 
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Even though the various LEAPS drug candidates have not yet been given to humans, they have been tested in vitro with human cells.  They have induced similar cytokine responses that were seen in these animal models, which may indicate that the LEAPS technology might translate to humans.  The LEAPS candidates have demonstrated protection against lethal herpes simplex virus (HSV1) and H1N1 influenza infection, as a prophylactic or therapeutic agent in animals.  They have also shown efficacy in animals in two autoimmune conditions, curtailing and sometimes preventing disease progression in arthritis and myocarditis animal models.  CEL-SCI’s belief is that the LEAPS technology may be a significant alternative to the vaccines currently available on the market today for these diseases.

None of the LEAPS investigational products have been approved for sale, barter or exchange by the FDA or any other regulatory agency for any use to treat disease in animals or humans. The safety or efficacy of these products has not been established for any use. Lastly, no definitive conclusions can be drawn from the early-phase, preclinical-trials data involving these investigational products. Before obtaining marketing approval from the FDA in the United States, and by comparable agencies in most foreign countries, these product candidates must undergo rigorous preclinical and clinical testing which is costly and time consuming and subject to unanticipated delays.  There can be no assurance that these approvals will be granted.

ITEM 1A. RISK FACTORS

The risks described below could adversely affect the price of CEL-SCI’s common stock.

Risks Related to CEL-SCI

Since CEL-SCI has earned only limited revenues and has a history of losses, CEL-SCI will require additional capital to remain in operation, complete its clinical trials and fund pre-marketing expenses.

CEL-SCI has had only limited revenues since it was formed in 1983. Since the date of its formation and through September 30, 2014, CEL-SCI incurred net losses of approximately $238 million. CEL-SCI has relied principally upon the proceeds of the public and private sales of its securities to finance its activities to date.

If CEL-SCI cannot obtain additional capital, CEL-SCI may have to postpone development and research expenditures, which will delay CEL-SCI's ability to produce a competitive product.  Delays of this nature may depress the price of CEL-SCI's common stock. In addition, although CEL-SCI is not aware of a direct competitor for Multikine, it is possible that one exists.  There are many potential competitors of LEAPS.  If competitors develop, any delay in the development of CEL-SCI’s products may provide opportunities to those competitors.

The condition of the overall economy may continue to affect both the availability of capital and CEL-SCI’s stock price.  In addition, future capital raises, which will be necessary for CEL-SCI’s survival, will be further dilutive to current shareholders.  There can be no assurance that CEL-SCI will be able to raise the capital it will need.
 
 
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All of CEL-SCI's potential products, with the exception of Multikine, are in the early stages of development, and any commercial sale of these products will be many years away.

Even potential product sales from Multikine are years away, since cancer trials can be lengthy. Accordingly, CEL-SCI expects to incur substantial losses for the foreseeable future.

Since CEL-SCI does not intend to pay dividends on its common stock, any potential return to investors will result only from any increases in the price of CEL-SCI's common stock.

At the present time, CEL-SCI intends to use available funds to finance its operations. Accordingly, while payment of dividends rests within the discretion of CEL-SCI’s Directors, no common stock dividends have been declared or paid by CEL-SCI and CEL-SCI has no intention of paying any common stock dividends in the foreseeable future.  Any gains for CEL-SCI’s investors will most likely result from increases in the price of CEL-SCI’s common stock, which has been volatile in the recent past.  If CEL-SCI’s stock price does not increase, which likely will depend primarily upon the results of the Multikine clinical trials, an investor is unlikely to receive any return on an investment in CEL-SCI’s common stock.

The costs of CEL-SCI’s product development and clinical trials are difficult to estimate and will be very high for many years, preventing CEL-SCI from making a profit for the foreseeable future, if ever.

Clinical and other studies necessary to obtain approval of a new drug can be time consuming and costly, especially in the United States, but also in foreign countries. CEL-SCI's estimates of the costs associated with future clinical trials and research may be substantially lower than what CEL-SCI actually experiences. It is impossible to predict what CEL-SCI will face in the development of a product, such as LEAPS. The purpose of clinical trials is to provide both CEL-SCI and regulatory authorities with safety and efficacy data in humans. It is relatively common to revise a trial or add subjects to a trial in progress.  These examples of common vagaries in product development and clinical investigations demonstrate how predicted costs may exceed reasonable expectations.  The difficult and often complex steps necessary to obtain regulatory approval, especially that of the United States Food and Drug Administration (“FDA”) and the European Union’s European Medicine’s Agency (“EMA”), involve significant costs and may require several years to complete. CEL-SCI expects that it will need substantial additional financing over an extended period of time in order to fund the costs of future clinical trials, related research, and general and administrative expenses.

The extent of CEL-SCI's clinical trials and research programs are primarily based upon the amount of capital available to CEL-SCI and the extent to which it receives regulatory approvals for clinical trials. CEL-SCI has established estimates of the future costs of the Phase III clinical trial for Multikine, but, as explained above, that estimate may not prove correct.

 
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Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure may create uncertainty regarding compliance matters. New or changed laws, regulations and standards are subject to varying interpretations in many cases. As a result, their application in practice may evolve over time. CEL-SCI is committed to maintaining high standards of corporate governance and public disclosure. Complying with evolving interpretations of new or changing legal requirements may cause CEL-SCI to incur higher costs as it revises current practices, policies and procedures, and may divert management time and attention from potential revenue-generating activities to compliance matters. If CEL-SCI’s efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, CEL-SCI’s reputation may also be harmed. Further, CEL-SCI’s board members, chief executive officer, president and other executive officers could face an increased risk of personal liability in connection with the performance of their duties. As a result, CEL-SCI may have difficulty attracting and retaining qualified board members and executive officers, which could harm its business.

CEL-SCI has not established a definite plan for the marketing of Multikine.

CEL-SCI has not established a definitive plan for marketing nor has it established a price structure for any of its products. However, CEL-SCI intends, if it is in a position to do so, to sell Multikine itself in certain markets and to enter into written marketing agreements with various major pharmaceutical firms with established sales forces.  The sales forces in turn would, CEL-SCI believes, target CEL-SCI's products to cancer centers, physicians and clinics involved in head and neck cancer.  CEL-SCI has already licensed Multikine to three companies, Teva Pharmaceuticals in Israel, Turkey, Serbia and Croatia, Orient Europharma in Taiwan, Singapore, Hong Kong, Malaysia, South Korea, the Philippines, Australia and New Zealand, and Byron BioPharma, LLC in South Africa.  CEL-SCI believes that these companies have the resources to market Multikine appropriately in their respective territories, but there is no guarantee that they will.  There is no assurance that CEL-SCI will find qualified parties willing to market CEL-SCI’s product in other areas.

CEL-SCI may encounter problems, delays and additional expenses in developing marketing plans with outside firms. In addition, even if Multikine is cost effective and proven to increase overall survival, CEL-SCI may experience other limitations involving the proposed sale of Multikine, such as uncertainty of third-party reimbursement. There is no assurance that CEL-SCI can successfully market any products which it may develop.

CEL-SCI hopes to expand its clinical development capabilities in the future, and any difficulties hiring or retaining key personnel or managing this growth could disrupt CEL-SCI’s operations.

CEL-SCI is highly dependent on the principal members of CEL-SCI’s management and development staff.  If the Multikine clinical trial is successful, CEL-SCI expects to expand its clinical development and manufacturing capabilities, which will involve hiring additional employees. Future growth will require CEL-SCI to continue to implement and improve CEL-SCI’s managerial, operational and financial systems and to continue to retain, recruit and train additional qualified personnel, which may impose a strain on CEL-SCI’s administrative and operational infrastructure. The competition for qualified personnel in the biopharmaceutical field is intense. CEL-SCI is highly dependent on its ability to attract, retain and motivate highly qualified management and specialized personnel required for clinical development. Due to CEL-SCI’s limited resources, CEL-SCI may not be able to manage effectively the expansion of its operations or recruit and train additional qualified personnel.  If CEL-SCI is unable to retain key personnel or manage its growth effectively, CEL-SCI may not be able to implement its business plan.

 
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Multikine is made from components of human blood, which involves inherent risks that may lead to product destruction or patient injury.

Multikine is made, in part, from components of human blood. There are inherent risks associated with products that involve human blood such as possible contamination with viruses, including Hepatitis or HIV. Any possible contamination could require CEL-SCI to destroy batches of Multikine or cause injuries to patients who receive the product, thereby subjecting CEL-SCI to possible financial losses, lawsuits, and harm to its business.

Although CEL-SCI has product liability insurance for Multikine, the successful prosecution of a product liability case against CEL-SCI could have a materially adverse effect upon its business if the amount of any judgment exceeds CEL-SCI's insurance coverage.  Such a suit also could damage the reputation of Multikine and make successful marketing of the product less likely.  CEL-SCI commenced the Phase III clinical trial for Multikine in December 2010. Although no claims have been brought to date, participants in CEL-SCI's clinical trials could bring civil actions against CEL-SCI for any unanticipated harmful effects arising from the use of Multikine or any drug or product that CEL-SCI may attempt to develop.

Risks Related to Government Approvals

CEL-SCI's product candidates must undergo rigorous preclinical and clinical testing and regulatory approvals, which could be costly and time-consuming and subject CEL-SCI to unanticipated delays or prevent CEL-SCI from marketing any products.

Therapeutic agents, drugs and diagnostic products are subject to approval, prior to general marketing, from the FDA in the United States, the EMA in the European Union, and by comparable agencies in most foreign countries. Before obtaining marketing approval, these product candidates must undergo costly and time consuming preclinical and clinical testing which could subject CEL-SCI to unanticipated delays and may prevent CEL-SCI from marketing its product candidates. There can be no assurance that such approvals will be granted.

CEL-SCI cannot be certain when or under what conditions it will undertake future clinical trials.  A variety of issues may delay CEL-SCI’s Phase III clinical trial for Multikine or preclinical and early clinical trials for other products.  For example, early trials, or the plans for later trials, may not satisfy the requirements of regulatory authorities, such as the FDA. CEL-SCI may fail to find subjects willing to enroll in CEL-SCI’s trials. CEL-SCI manufactures Multikine, but relies on third party vendors for managing the trial process and other activities, and these vendors may fail to meet appropriate standards.  Accordingly, the clinical trials relating to CEL-SCI's product candidates may not be completed on schedule, the FDA or foreign regulatory agencies may order CEL-SCI to stop or modify its research, or these agencies may not ultimately approve any of CEL-SCI's product candidates for commercial sale. Varying interpretations of the data obtained from pre-clinical and clinical testing could delay, limit or prevent regulatory approval of CEL-SCI's product candidates. The data collected from CEL-SCI's clinical trials may not be sufficient to support regulatory approval of its various product candidates, including Multikine. CEL-SCI's failure to adequately demonstrate the safety and efficacy of any of its product candidates would delay or prevent regulatory approval of its product candidates in the United States, which could prevent CEL-SCI from achieving profitability.  Although CEL-SCI had positive results in its Phase II trials for Multikine, those results were for a very small sample set, and CEL-SCI will not know definitively how Multikine will perform until CEL-SCI is well into, or completes, its Phase III clinical trial.

 
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The requirements governing the conduct of clinical trials, manufacturing, and marketing of CEL-SCI's product candidates, including Multikine, outside the United States vary from country to country. Foreign approvals may take longer to obtain than FDA approvals and can require, among other things, additional testing and different trial designs. Foreign regulatory approval processes include all of the risks associated with the FDA approval process. Some of those agencies also must approve prices for products approved for marketing. Approval of a product by the FDA or the EMA does not ensure approval of the same product by the health authorities of other countries. In addition, changes in regulatory requirements for product approval in any country during the clinical trial process and regulatory agency review of each submitted new application may cause delays or rejections.

CEL-SCI has only limited experience in filing and pursuing applications necessary to gain regulatory approvals.  CEL-SCI’s lack of experience may impede its ability to obtain timely approvals from regulatory agencies, if at all. CEL-SCI will not be able to commercialize Multikine and other product candidates until it has obtained regulatory approval.  In addition, regulatory authorities may also limit the types of patients to which CEL-SCI or others may market Multikine or CEL-SCI's other products. Any failure to obtain or any delay in obtaining required regulatory approvals may adversely affect the ability of CEL-SCI or potential licensees to successfully market CEL-SCI’s products.

Even if CEL-SCI obtains regulatory approval for its product candidates, CEL-SCI will be subject to stringent, ongoing government regulation.

If CEL-SCI's products receive regulatory approval, either in the United States or internationally, CEL-SCI will continue to be subject to extensive regulatory requirements. These regulations are wide-ranging and govern, among other things:

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product design, development and manufacture;
 
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product application and use
 
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adverse drug experience;
 
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product advertising and promotion;
 
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product manufacturing, including good manufacturing practices
 
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record keeping requirements;
 
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registration and listing of CEL-SCI's establishments and products with the FDA, EMA and other state and national agencies;
 
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product storage and shipping;
 
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drug sampling and distribution requirements;
 
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electronic record and signature requirements; and
 
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labeling changes or modifications.
 
 
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CEL-SCI and any third-party manufacturers or suppliers must continually adhere to federal regulations setting forth requirements, known as current Good Manufacturing Practices, or cGMPs, and their foreign equivalents, which are enforced by the FDA, the EMA and other national regulatory bodies through their facilities inspection programs. If CEL-SCI's facilities, or the facilities of CEL-SCI’s contract manufacturers or suppliers, cannot pass a pre-approval plant inspection, the FDA, EMA, or other national regulators will not approve the marketing applications of CEL-SCI's product candidates. In complying with cGMP and foreign regulatory requirements, CEL-SCI and any of its potential third-party manufacturers or suppliers will be obligated to expend time, money and effort in production, record-keeping and quality control to ensure that CEL-SCI’s products meet applicable specifications and other requirements.

If CEL-SCI does not comply with regulatory requirements at any stage, whether before or after marketing approval is obtained, CEL-SCI may be subject to license suspension or revocation, criminal prosecution, seizure, injunction, fines, be forced to remove a product from the market or experience other adverse consequences, including restrictions or delays in obtaining regulatory marketing approval for such products or for other products for which it seeks approval.  This could materially harm CEL-SCI's financial results, reputation and stock price. Additionally, CEL-SCI may not be able to obtain the labeling claims necessary or desirable for product promotion. CEL-SCI may also be required to undertake post-marketing trials, which will be evaluated by applicable authorities to determine if CEL-SCI’s products may remain on the market. If CEL-SCI or other parties identify adverse effects after any of CEL-SCI's products are on the market, or if manufacturing problems occur, regulatory approval may be suspended or withdrawn. CEL-SCI may be required to reformulate its products, conduct additional clinical trials, make changes in product labeling or indications of use, or submit additional marketing applications to support any changes.  If CEL-SCI encounters any of the foregoing problems, its business and results of operations will be harmed and the market price of its common stock may decline.

CEL-SCI cannot predict the extent of adverse government regulations which might arise from future legislative or administrative action. Without government approval, CEL-SCI will be unable to sell any of its products.

Foreign governments often impose strict price controls, which may adversely affect CEL-SCI’s future profitability.

CEL-SCI intends to seek approval to market Multikine in both the United States and foreign jurisdictions. If CEL-SCI obtains approval in one or more foreign jurisdictions, CEL-SCI will be subject to rules and regulations in those jurisdictions relating to Multikine. In some foreign countries, particularly in the European Union, prescription drug pricing is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a drug candidate. To obtain reimbursement or pricing approval in some countries, CEL-SCI may be required to conduct a clinical trial that compares the cost-effectiveness of Multikine to other available therapies. If reimbursement of Multikine is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, CEL-SCI may be unable to achieve or sustain profitability.
 
 
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Risks Related to Intellectual Property

CEL-SCI may not be able to achieve or maintain a competitive position, and other technological developments may result in CEL-SCI's proprietary technologies becoming uneconomical or obsolete.

CEL-SCI is involved in a biomedical field that is undergoing rapid and significant technological change. The pace of change continues to accelerate.  The successful development of products from CEL-SCI's compounds, compositions and processes through CEL-SCI financed research, or as a result of possible licensing arrangements with pharmaceutical or other companies, is not assured.

Many companies are working on drugs designed to cure or treat cancer or cure and treat viruses, such as HPV or H1N1.  Many of these companies have financial, research and development, and marketing resources, which are much greater than CEL-SCI’s, and are capable of providing significant long-term competition either by establishing in-house research groups or by forming collaborative ventures with other entities. In addition, smaller companies and non-profit institutions are active in research relating to cancer and infectious diseases.  CEL-SCI’s market share will be reduced or eliminated if CEL-SCI’s competitors develop and obtain approval for products that are safer or more effective than CEL-SCI’s products.

CEL-SCI's patents might not protect CEL-SCI's technology from competitors, in which case CEL-SCI may not have any advantage over competitors in selling any products which it may develop.

Certain aspects of CEL-SCI's technologies are covered by U.S. and foreign patents. In addition, CEL-SCI has a number of new patent applications pending. There is no assurance that the applications still pending or which may be filed in the future will result in the issuance of any patents. Furthermore, there is no assurance as to the breadth and degree of protection any issued patents might afford CEL-SCI. Disputes may arise between CEL-SCI and others as to the scope and validity of these or other patents. Any defense of the patents could prove costly and time consuming and there can be no assurance that CEL-SCI will be in a position, or will deem it advisable, to carry on such a defense.  A suit for patent infringement could result in increasing costs, delaying or halting development, or even forcing CEL-SCI to abandon a product.  Other private and public concerns, including universities, may have filed applications for, may have been issued, or may obtain additional patents and other proprietary rights to technology potentially useful or necessary to CEL-SCI. CEL-SCI currently is not aware of any such patents, but the scope and validity of such patents, if any, and the cost and availability of such rights are impossible to predict. Also, as far as CEL-SCI relies upon unpatented proprietary technology, there is no assurance that others may not acquire or independently develop the same or similar technology.
 
 
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Much of CEL-SCI’s intellectual property is protected as a trade secret, not as a patent.

Much of CEL-SCI’s intellectual property pertains to its manufacturing system, certain aspects of which may not be suitable for patent filing and must be protected as trade secrets.  Those trade secrets must be protected diligently by CEL-SCI to protect their disclosure to competitors, since legal protections after disclosure may be minimal or non-existent.  Accordingly, much of CEL-SCI’s value is dependent upon its ability to keep its trade secrets confidential.  Although CEL-SCI takes measures to ensure confidentiality, CEL-SCI may fail in that attempt.  In addition, in some cases a regulator considering CEL-SCI’s application for product approval may require the disclosure of some or all of CEL-SCI’s proprietary information.  In such a case, CEL-SCI must decide whether to disclose the information or forego approval in a particular country.  If CEL-SCI is unable to market its products in key countries, CEL-SCI’s opportunities and value may suffer.

Risks Related to CEL-SCI's Common Stock

Since the market price for CEL-SCI's common stock is volatile, investors may not be able to sell any of CEL-SCI's shares at a profit.

The market price of CEL-SCI's common stock, as well as the securities of other biopharmaceutical and biotechnology companies, have historically been highly volatile, and the market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. During the twelve months ended September 30, 2014, CEL-SCI's stock price has ranged from a low of $0.53 per share to a high of $1.90 per share. Factors such as fluctuations in CEL-SCI's operating results, announcements of technological innovations or new therapeutic products by CEL-SCI or its competitors, governmental regulation, developments in patent or other proprietary rights, public concern as to the safety of products developed by CEL-SCI or other biotechnology and pharmaceutical companies, publications by market analysts, law suits, and general market conditions may have a significant effect on the future market price of CEL-SCI's common stock.

Future sales of CEL-SCI’s securities may dilute the value of current investors’ holdings.

The provisions in CEL-SCI's Articles of Incorporation relating to CEL-SCI's preferred stock allow CEL-SCI's directors to issue preferred stock with rights to multiple votes per share and dividend rights which would have priority over any dividends paid with respect to CEL-SCI's common stock. The issuance of preferred stock with such rights may make more difficult the removal of management even if such removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if such transactions are not favored by incumbent management.  In addition, CEL-SCI has issued warrants in the past and may do so in the future.  These warrants, providing a future right to purchase shares of CEL-SCI’s common stock at an established price, may further dilute the ownership of current shareholders.
 
 
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In order to raise additional capital, CEL-SCI may need to sell shares of its common stock, or securities convertible into common stock, at prices that may be below the prevailing market price of CEL-SCI's common stock at the time of sale.  Since CEL-SCI’s stock price has been volatile, even a sale at market price one week may represent a substantial “discount” over the prior week’s price.  Future sales of CEL-SCI’s securities will dilute CEL-SCI’s current stockholders and investors and may have a negative effect on the market price of its common stock.
 
Shares issuable upon the conversion of a note or upon the exercise of outstanding warrants and options may substantially increase the number of shares available for sale in the public market and may depress the price of CEL-SCI's common stock.

As of November 30, 2014, there were outstanding options which allows the holders to purchase approximately 6,840,000 shares of CEL-SCI’s common stock, at prices ranging between $0.85 and $20.00 per share, outstanding warrants which allow the holders to purchase approximately 35,863,000 shares of CEL-SCI’s common stock, at prices ranging between $0.53 and $5.50 per share, and a convertible note which allows the holder to acquire approximately 276,000 shares of CEL-SCI’s common stock at a conversion price of $4.00.  The outstanding options and warrants could adversely affect CEL-SCI’s ability to obtain future financing or engage in certain mergers or other transactions, since the holders of options and warrants can be expected to exercise them at a time when CEL-SCI may be able to obtain additional capital through a new offering of securities on terms more favorable to CEL-SCI than the terms of the outstanding options and warrants.  For the life of the options, warrants and the convertible note, the holders have the opportunity to profit from a rise in the market price of CEL-SCI’s common stock without assuming the risk of ownership.  The issuance of shares upon the exercise of outstanding options and warrants, or the conversion of the note, will also dilute the ownership interests of CEL-SCI’s existing stockholders.

Substantially all of the shares of common stock that are issuable upon the conversion of the note or the exercise of outstanding options and warrants may be sold in the public market. The sale of common stock described above, or the perception that such sales could occur, may adversely affect the market price of CEL-SCI's common stock.

Any decline in the price of CEL-SCI's common stock may encourage short sales, which could place further downward pressure on the price of CEL-SCI's common stock. Short selling is a practice of selling shares which are not owned by a seller at that time, with the expectation that the market price of the shares will decline in value after the sale, providing the short seller a profit.

CEL-SCI may have exposure for certain securities CEL-SCI sold in October 2013.

In September 2012, CEL-SCI filed a shelf registration statement covering the sale of $50,000,000 of securities (the “2012 Registration Statement”), and in January 2013 CEL-SCI filed another shelf registration statement covering the sale of an additional $50,000,000 of securities (the “2013 Registration Statement”). In October 2013, CEL-SCI filed a prospectus supplement to the 2012 Registration Statement for the sale in an underwritten public offering of 17,826,087 shares of CEL-SCI’s common stock, 20,475,000 Series S Warrants, as well as up to 20,475,000 shares of common stock issuable upon the exercise of the Series S warrants (the “October Prospectus”).  Collectively, CEL-SCI offered approximately $43.4 million of securities pursuant to the October Prospectus.  This amount includes approximately $17.8 million for the sale of the common stock and Series S warrants and $25.6 million upon the exercise of the Series S Warrants. CEL-SCI subsequently realized that at the time of the October 2013 offering CEL-SCI had approximately $28.9 million available for issuance under the 2012 Registration Statement.  As a result, CEL-SCI offered securities that were not registered with the SEC, and that may not have been eligible for an exemption from registration under the federal or state securities laws. CEL-SCI had securities available under the 2013 Registration Statement to register all of the securities not covered by the 2012 Registration Statement.  In December 2013, CEL-SCI filed a prospectus supplement to the 2013 Registration Statement registering the offer and sale of all of the shares of common stock issuable upon exercise of the Series S Warrants included in the October 2013 offering to assure that the offering and sale of all of the shares issuable upon exercise of the Series S Warrants were registered (the “December Prospectus”). Prior to the filing of the December Prospectus, no Series S Warrants issued in the October offering had been exercised.  Notwithstanding the above, the actions CEL-SCI has taken to mitigate CEL-SCI’s possible non-compliance with securities laws will not prevent regulators from asserting that CEL-SCI violated the law, from imposing penalties and fines against CEL-SCI with respect to any potential violations of securities laws, and may subject CEL-SCI to possible claims for damages from certain investors.
 
Under CEL-SCI’s amended bylaws, shareholders that initiate certain proceedings may be obligated to reimburse CEL-SCI and its officers and directors for all fees, costs and expenses incurred in connection with such proceedings if the claim proves unsuccessful.

On February 18, 2015, CEL-SCI adopted new bylaws which include a fee-shifting provision in Article X for shareholder claims. Article X provides that in the event that any shareholder initiates or asserts a claim against CEL-SCI, or any of its officers or directors, including any derivative claim or claim purportedly filed on CEL-SCI’s behalf, and the shareholder does not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought, then the shareholder will be obligated to reimburse CEL-SCI and any of its officers or directors named in the action, for all fees, costs and expenses of every kind and description that CEL-SCI or its officers or directors may incur in connection with the claim.  In adopting Article X, it is CEL-SCI’s intent that:

●  
All actions, including federal securities law claims, would be subject to Article X;
 
●  
The phrase “a judgment on the merits” means the determination by a court of competent jurisdiction on the matters submitted to the court;
 
●  
The phrase “substantially achieves, in both substance and amount” means the plaintiffs in the action would be awarded at least 90% of the relief sought;
 
●  
Only persons who were shareholders at the time an action was brought would be subject to Article X; and
 
●  
Only the directors or officers named in the action would be allowed to recover.
 
 
18

 
 
The fee-shifting bylaw contained in Article X of CEL-SCI’s bylaws is not limited to specific types of actions, but is rather potentially applicable to the fullest extent permitted by law. Fee-shifting bylaws are relatively new and untested. The case law and potential legislative action on fee-shifting bylaws are evolving and there exists considerable uncertainty regarding the validity of, and potential judicial and legislative responses to, such bylaws. For example, it is unclear whether CEL-SCI’s ability to invoke its fee-shifting bylaw in connection with claims under the federal securities laws would be pre-empted by federal law. Similarly, it is unclear how courts might apply the standard that a claiming shareholder must obtain a judgment that substantially achieves, in substance and amount, the full remedy sought. The application of CEL-SCI’s fee-shifting bylaw in connection with such claims, if any, will depend in part on future developments of the law. CEL-SCI cannot assure you that it will or will not invoke its fee-shifting bylaw in any particular dispute. In addition, given the unsettled state of the law related to fee-shifting bylaws, such as CEL-SCI’s, CEL-SCI may incur significant additional costs associated with resolving disputes with respect to such bylaw, which could adversely affect CEL-SCI’s business and financial condition.

If a shareholder that brings any such claim, suit, action or proceeding is unable to obtain the required judgment, the attorneys’ fees and other litigation expenses that might be shifted to a claiming shareholder are potentially significant. This fee-shifting bylaw, therefore, may dissuade or discourage shareholders (and their attorneys) from initiating lawsuits or claims against CEL-SCI or its directors and officers. In addition, it may impact the fees, contingency or otherwise, required by potential plaintiffs’ attorneys to represent our shareholders or otherwise discourage plaintiffs’ attorneys from representing CEL-SCI’s shareholders at all. As a result, this bylaw may limit the ability of shareholders to affect the management and direction of CEL-SCI, particularly through litigation or the threat of litigation.

The provision of our amended bylaws requiring exclusive venue in the U.S. District Court for Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against CEL-SCI and its directors and officers.

Article X of CEL-SCI’s amended bylaws provides that shareholder claims brought against CEL-SCI, or its officers or directors, including any derivative claim or claim purportedly filed on behalf of CEL-SCI, must be brought in the U.S. District Court for the district of Delaware and that with respect to any such claim, the laws of Delaware will apply.

The exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum the shareholder finds favorable for disputes with CEL-SCI or its directors or officers, and may have the effect of discouraging lawsuits with respect to claims that may benefit CEL-SCI or its shareholders.
 
 
19

 
 
ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)           See the Financial Statements attached to this Report.
 
Exhibits        
         
3(a)
 
Articles of Incorporation
 
Incorporated by reference to Exhibit 3(a) of CEL-SCI's combined Registration Statement on Form S-1 and Post-Effective Amendment ("Registration Statement"), Registration Nos. 2-85547-D and 33-7531.
         
3(b)
 
Amended Articles
 
Incorporated by reference to Exhibit 3(a) of CEL-SCI's Registration Statement on Form S-1, Registration Nos. 2-85547-D and 33-7531.
         
3(c)
 
Amended Articles (Name change only)
 
Filed as Exhibit 3(c) to CEL-SCI's Registration Statement on Form S-1 Registration Statement (No. 33-34878).
         
3(d)
 
Bylaws
 
Incorporated by reference to Exhibit 3(b) of CEL-SCI's Registration Statement on Form S-1, Registration Nos. 2-85547-D and 33-7531.
         
3(e)   Amended Bylaws  
Incorporated by reference to Exhibit 3(ii) of CEL-SCI’s report on Form 8-K dated March 16, 2015.
         
4  
Shareholders Rights Agreement
 
Incorporated by reference to Exhibit 4 of CEL-SCI’S report on Form 8-K dated November 7, 2007.
         
4(b)  
2014 Incentive Stock Option Plans
 
Incorporated by reference to the exhibits filed with the Company’s registration statements on Form S¬8 (File numbers 333-117088, 333-140792, 333-162265, 333-179477, and 333-184092 .
         
4(c)  
Non-Qualified Stock Option Plans
 
Incorporated by reference to the exhibits filed with the Company’s registration statements on Form S¬8 (File numbers 333-117088, 333-140792, 333-162265, 333-179477, 333-184092 and 333-198244) .
         
4(d)  
Stock Bonus Plans
 
Incorporated by reference to the exhibits filed with the Company’s registration statements on Form S¬8 (File numbers 333-117088, 333-140792, 333-162265, 333-179477, and 333-184092 .
         
4(e)  
Stock Compensation Plan
 
Incorporated by reference to the exhibits filed with the Company’s registration statements on Form S¬8 (File numbers 333-117088, 333-140792, 333-162265, 333-179477, and 333-184092 .
         
4(f)  
2014 Incentive Stock Bonus Plan
 
Incorporated by reference to Exhibit 4(c) filed with the Company’s registration statement on Form S-8 (333-198244).
         
10(d)
 
Employment Agreement with Maximilian de Clara
 
Incorporated by reference to Exhibit 10(d) of CEL-SCI’s report on Form 8-K (dated April 21, 2005) and Exhibit 10(d) to CEL-SCI’s report on Form 8-K dated September 8, 2006.
 
 
20

 
 
         
10(f)
 
Securities Purchase Agreement (together with schedule required by Instruction 2 to Item 601 of Regulation S-K) pertaining to Series K notes and warrants, together with t he exhibits to the Securities Purchase Agreement
 
Incorporated by reference to Exhibit 10 to CEL-SCI’s report on Form 8-K dated August 4, 2006.
         
10(g)
 
Subscription Agreement (together with Schedule required by Instruction 2 to Item 601 of Regulation S-K) pertaining to April 2007 sale of 20,000,000 shares of CEL-SCI’s common stock, 10,000,000 Series L warrants and 10,000,000 Series M Warrants
 
Incorporated by reference to Exhibit 10 of CEL-SCI’s report on Form 8-K dated April 18, 2007
         
10(h)
 
Warrant Adjustment Agreement with Laksya Ventures
 
Incorporated by reference to Exhibit 10(i) of CEL-SCI’s report on Form 8-K dated August 3, 2010
         
10(i)
 
Employment Agreement with Patricia Prichep (2013-2016)
 
Incorporated by reference to Exhibit 10(j) of CEL-SCI’s report on Form 8-K dated August 30, 2013
         
10(j)
 
Employment Agreement with Eyal Taylor (2013-2016)
 
Incorporated by reference to Exhibit 10(k) of CEL-SCI’s report on Form 8-K dated August 30, 2013.
         
10(k)
 
Amendment to Employment Agreement with Maximilian de Clara
 
Incorporated by reference to Exhibit 10(l) of CEL-SCI’s report on Form 8-K dated August 30, 2010 and Exhibit 10(l) of CEL-SCI’s report on Form 8-K dated August 30, 2013.
         
10(l)
 
First Amendment to Development Supply and Distribution Agreement with Orient Europharma.*
 
Incorporated by reference to Exhibit 10(m) filed with CEL-SCI’s 10-K report for the year ended September 30, 2010.
         
10(m)
 
Exclusive License and Distribution  Agreement with Teva Pharmaceutical Industries Ltd.*
 
Incorporated by reference to Exhibit 10(n) filed with CEL-SCI’s 10-K report for the year ended September 30, 2010.
         
10(n)
 
Lease Agreement*
 
Incorporated by reference to Exhibit 10(o) filed with CEL-SCI’s 10-K report for the year ended September 30, 2010.
         
10(o)
 
Promissory Note with Maximilian de Clara, together with Amendments 1 and 2
 
Incorporated by reference to Exhibit 10(p)  filed with CEL-SCI’s 10-K report for the year ended September 30, 2010.
         
10(p)
 
Licensing Agreement with Byron Biopharma
 
Incorporated by reference to Exhibit 10(i) of  CEL-SCI’s report on Form 8-K dated March 27, 2009
         
10(q)
 
At Market Issuance Sales Agreement with McNicoll, Lewis & Vlak LLC
 
Incorporated by reference to Exhibit 10(r) filed with CEL-SCI’s 10-K report for the year ended September 30, 2010
         
10(z)
 
Development, Supply and Distribution Agreement with Orient Europharma
 
Incorporated by reference to Exhibit 10(z) filed with CEL-SCI’s report on Form 10-K for the year ended September 30, 2003.
         
10(za)
 
Employment Agreement with Geert Kersten.  Amendment to Employment Agreement
 
Incorporated by reference to Exhibit 10(za) to CEL-SCI’s report on Form 8-K dated September 1, 2011 and Exhibit 10(za) of CEL-SCI’s report on Form 8-K dated August 30, 2013.
         
10(aa)
 
Securities Purchase Agreement and form of the Series F warrants, which is and exhibit to the Securities Purchase Agreement
 
Incorporated by reference to Exhibit 10(aa) of CEL-SCI’s report on Form 8-K dated October 3, 2011.
 
 
21

 
 
         
10(bb)
 
Placement Agent Agreement
 
Incorporated by reference to Exhibit 10(bb) of CEL-SCI’s report on Form 8-K dated October 3, 2011.
 
10(cc)
 
Securities  Purchase Agreement,  together with  the form of the Series H warrant, which is an exhibit to the securities Purchase Agreement
 
Incorporated by reference to Exhibit 10(cc) of CEL-SCI’s report on Form 8-K dated January 25, 2012.
         
10(dd)
 
Placement Agent Agreement
 
Incorporated by reference to Exhibit 10(dd)  of CEL-SCI’s report on Form 8-K dated January 25, 2012.
         
10(ee)
 
Warrant Amendment Agreement, together with the form of the Series P warrant, which is an exhibit to the Warrant Amendment Agreement
 
Incorporated by reference to Exhibit 10(ee)  of CEL-SCI’s report on Form 8-K dated February 10, 2012.
         
10(ff)
 
Placement Agent Agreement
 
Incorporated by reference to Exhibit 10(ff)  of CEL-SCI’s report on Form 8-K dated February 10, 2012.
         
10(gg)
 
Securities  Purchase  Agreement  and the form of the  Series Q   warrant,  which is an  exhibit to the Securities Purchase Agreement
 
Incorporated by reference to Exhibit 10(gg)  of CEL-SCI’s report on Form 8-K dated June 18, 2012.
         
10(hh)
 
Placement Agent Agreement
 
Incorporated by reference to Exhibit 10(hh)  of CEL-SCI’s report on Form 8-K dated June 18, 2012.
         
10 (ii)
 
Securities  Purchase  Agreement  and the form of the  Series R   warrant,  which is an  exhibit to the Securities Purchase Agreement
 
Incorporated by reference to Exhibit 10(ii)  of CEL-SCI’s report on Form 8-K dated December 5, 2012.
         
10 (jj)
 
Placement Agent Agreement
 
Incorporated by reference to Exhibit 10(jj)  of CEL-SCI’s report on Form 8-K dated December 5, 2012.
         
10 (nn)
 
Underwriting Agreement, together with the form of Series S warrant which is an exhibit to the underwriting agreement
 
Incorporated by reference to Exhibit 1.1 of CEL-SCI’s report on Form 8-K dated October 8, 2013.
 
         
10 (oo)
 
Underwriting Agreement, together with the form of Series S warrant which is an exhibit to the underwriting agreement
 
Incorporated by reference to Exhibit 1.1 of CEL-SCI’s report on Form 8-K dated December 19, 2013.
         
10 (pp)
 
Underwriting Agreement, together with the form of Series T warrant which is an exhibit to the warrant agent agreement
 
Incorporated by reference to Exhibit 1.1 of CEL-SCI’s report on Form 8-K dated April 15, 2014.
 
         
10 (qq)
 
Underwriting Agreement, together with the form of Series S warrant which is an exhibit to the warrant agent agreement
 
Incorporated by reference to Exhibit 1.1 of CEL-SCI’s report on Form 8-K dated October 23, 2014.
         
10 (rr)
 
Assignment and Assumption Agreement with Teva Pharmaceutical Industries, Ltd. and GCP Clinical Studies, Ltd.
   
         
10 (ss)
 
Service Agreement with GCP Clinical Studies, Ltd., together with Amendment 1 thereto*
   
         
10 (tt)
 
Joinder Agreement with PLIVA Hrvatska d.o.o.
   
         
10 (uu)
 
Master Service Agreement with Ergomed Clinical Research, Ltd.,  and Clinical Trial Orders thereunder
   
 
 
22

 
 
10 (vv)
 
Co-Development and Revenue Sharing Agreement with Ergomed Clinical Research Ltd., dated April 19, 2013, as amended
   
         
10 (ww)
 
Co-Development and Revenue Sharing Agreement II:  Cervical Intraepithelial Neoplasia in HIV/HPV co-infected women, with Ergomed Clinical Research Ltd., dated October 10, 2013, as amended
   
         
10 (xx)
 
Co-Development and Revenue Sharing Agreement III: Anal warts and anal intraepithelial neoplasia in HIV/HPV co-infected patients, with Ergomed Clinical Research Ltd., dated October 24, 2013
   
         
10 (yy)
 
Master Services Agreement with Aptiv Solutions, Inc.
   
         
10 (zz)
 
Project Agreement Number 1 with Aptiv Solutions, Inc. together with Amendments 1 and 2 thereto*
   
         
10 (aaa)
 
Second Amendment to Development Supply and Distribution Agreement with Orient Europharma
   
         
10 (bbb)
 
Amended and Restated Promissory Note with Maximilian de Clara
   
         
23.1
 
Consent of BDO USA, LLP
   
         
 
Rule 13a-14(a) Certifications
   
         
 
Section 1350 Certifications
   
 
* Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Commission under Rule 24b-2 of the Securities Exchange Act of 1934. The omitted confidential material has been filed separately with the Commission. The location of the omitted confidential information is indicated in the exhibit with asterisks (*)
 
 
23

 
 
SIGNATURES
 
In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on the  17th day of April 2015.
 
 
CEL-SCI CORPORATION
 
       
 
By:
/s/ Maximilian de Clara  
   
Maximilian de Clara, President
 
       
       
 
Pursuant to the requirements of the Securities Act of l934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
 
Signature
 
Title
 
Date
         
/s/ Maximilian de Clara
 
Director
 
April 17, 2015
Maximilian de Clara
       
         
/s/ Geert R. Kersten
 
Chief Executive, Principal Accounting, Principal Financial Officer and a Director
 
April 17, 2015
Geert R. Kersten
       
         
/s/ Alexander G. Esterhazy
 
Director
 
April 17, 2015
Alexander G. Esterhazy
       
         
/s/ Dr. Peter R. Young
 
Director
 
April 17, 2015
Dr. Peter R. Young
       
 
 
24

Exhibit 10(rr)
 
 
 
1

 
 
2

Exhibit 10(ss)
 
 

 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 
 
 

 
 
 
 

 
 
 
 

 
 
 
 

 
 
 

 
 
 
 

 
 
 
 

 
 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

 
 
 
 
 

 
 
 

 
Exhibit 10(tt)
 
JOINDER AGREEMENT
 
TO EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT, DATED August  7, 2008
 
(1)  
CEL-SCI CORPORATION, a corporation incorporated under the laws of the State of Colorado, of and headquartered at 8229 Boone Boulevard, Suite 802, Vienna, VA, 22182, USA ("CEL-SCI");   and
 
(2)  
PLIVA Hrvatska d.o.o., a corporation, incorporated under the laws of Croatia,   having   its registered office at Prilaz baruna Filipovica 25, HR-10000 Zagreb,   Croatia   (hereinafter   "Pliva");;
 
agree as follows :
 
PREAMBLE:
 
A.  
CEL-SCI and Teva Pharmaceutical Industries Ltd ("TPI") entered into a License   and   Distribution Agreement for the Product effective as of August 7, 2008   (the   "Agreement").
 
B.  
Pliva (a TPI Affiliate) wishes to contract with CEL-SCI for the licensing of the Product in the Territory specified below subject to (i) the terms and conditions of this Joinder Agreement and (ii) the terms and conditions of the Agreement insofar as they are not inconsistent with terms and conditions of this Joinder Agreement.
 
1  
DEFINITIONS
 
1.1  
Words and expressions which appear in this Joinder Agreement with initial capitalised letters shall, unless expressly defined herein, have the meaning given to such terms in the Agreement.
 
1.2  
In this Joinder Agreement:
 
1.2.1            "Territory" means Croatia, and Serbia;
 
2  
TERMS AND CONDITIONS
 
2.1  
Except as expressly provided in this Joinder Agreement, all terms and conditions of the Agreement are incorporated herein by reference and made a part of this Joinder Agreement as if set forth in full herein and CEL-SCI and Pliva shall be bound to the same extent and in the same manner as provided under the Agreement with respect to the Product and the Territory covered by this Joinder Agreement. Accordingly where the context so permits, all references to "Agreement" in the License and Distribution Agreement shall be construed as references to this Joinder Agreement and all references to "Teva" in the Agreement shall be construed as references to Pliva under this Joinder Agreement.
 
2.2  
In the event of any conflict between the terms and conditions of this Joinder Agreement and the Agreement, the terms and conditions of this Joinder Agreement shall prevail with regard to Pliva as a party.

2.3  
Pliva shall be responsible for all pharmacovigilance activities for the Product in the Territory according to local requirements in the Territory. This activities include, but are not limited to collection and expedited reporting of single cases, literature search, preparation and submission of Periodic Safety Update Reports, signal detection etc. If CEL-SCI becomes aware of a major safety concern relating to produced batches relevant to this Joinder Agreement, Pliva should be informed without any delay. Pliva shall enter into a direct pharmacovigilance agreement with CEL-SCI before the Product is launched in the Territory, outlining the respective responsibilities of CEL-SCI and Pliva dealing with procedures for monitoring adverse events and safety in respect of the Product, as the same may be amended from time to time by written agreement between CEL-SCI and Pliva.
 
3  
DOWN-PAYMENT
 
3.1  
In consideration for the rights granted by CEL-SCI to PLIVA under this Joinder Agreement, PLIVA shall pay CEL-SCI a sum of USD 200.000, payable as to:
 
●  
USD 100.000- upon European Medicines Agency ("EMA") granting of the Marketing Authorization for the Product;
 
●  
USD 50.000- upon grant of the Reimbursement status for the Product in Croatia;
 
●  
USD 50.000- upon grant of the Reimbursement status for the Product in Serbia.
 
 
1

 
 
3.2  
GEL-SCI will issue an invoice in respect of each payment. All payments will be made within thirty (30) days from the last day of the month in which the invoice was issued, by bank transfer to a bank account number, provided by GEL-SCI to Pliva sufficient time in advance for such bank transfer.
 
3.3  
Pliva will deduct 15% of Croatian Withholding Tax from each payment. Provided that GEL-SCI supplied Pliva with the apostiled Power of Attorney as attached to this Joinder Agreement in the Exhibit A, together with the apostiled Excerpt for CEL-SCI from the respective Court Register, Pliva will open tax number for GEL-SCI before Croatian Tax Authorities and furnish to GEL-SCI the Withholding Tax Certificate upon received request from GEL-SCI.
 
3.4  
If the respective regulation change at the time of Pliva's payment to CEL-SCI in comparison to regulation valid at the time of signature of this Joinder Agreement which are described in the previous paragraph, all payments will be performed pursuant to the regulations in force at the moment of payment.
 
3.5  
Other than V.A.T. and comparable taxes, all payments by Pliva are inclusive of all taxes and/or duties, of whatsoever nature, which are now or may hereafter be imposed with regard to any such payments, including without limitation withholding taxes.
 
4  
ORDERS AND DELIVERIES
 
Risk and title to the Product shall pass to Pliva when such Product is tendered to the carrier at the designated point for shipment by air transport from the United States of America (FCA, lncoterms 2010). In addition, GEL-SCI shall be in charge of arranging for the shipment and insurance (and paying for such amounts) of the Products to Zagreb airport. Pliva shall reimburse GEL-SCI for such amounts within thirty (30) days of the last day of the month of an invoice for such payments and shall be entitled to deduct such amounts paid from the Net Sales.
 
5  
TERMS OF PAYMENT
 
To the extent that sales are effected by Pliva, other than in United States Dollars, Pliva shall convert the sum of such sales into US Dollars in accordance with the selling rate for such currency quoted in the Wall Street Journal last published on the business day on which Pliva remits payment to GEL-SCI. If the exchange rate between currency in which sales are effected by
 
Pliva and United States Dollars is not quoted in the Wall Street Journal, Pliva shall convert the sum of such sales into US Dollars in accordance with the closing selling rate for such currency quoted by Reuters on the business day on which Pliva remits payment to CEL-SCI.
 
6  
NOTICES
 
Any notice given by Pliva under this Joinder Agreement shall be given to CEL-SCI in accordance with and addressed as specified in Section 28 of the Agreement. Any notice given by CEL-SCI under this Joinder Agreement  shall be given in accordance with  Section
 
 
12.5 of the Agreement addressed to Pliva as follows:
 
PLIVA Hrvatska d.o.o. Prilaz baruna Filipovica 25 HR-10000 Zagreb
 
Croatia
 
Attention: Sanja Lukac, Commercial Operations Director Tel: +385 1 37 24 636 Fax: +385 1 372 46 20
 
7  
ENTIRE AGREEMENT
 
7.1  
This Joinder Agreement, together with the Agreement and the other agreements or documents expressly referenced herein or therein, represent the entire agreement between CEL-SCI and Pliva with respect to the subject matter of this Joinder Agreement.
 
7.2  
For the avoidance of doubt, it is hereby agreed and declared that this Joinder Agreement shall not in any way derogate from any right and/or obligation of CEL-SCI, TPI or any other TPI Affiliate insofar as such relate to products and countries not covered under this Joinder Agreement, but covered under the Agreement and/or any other joinder agreement entered into pursuant to the Agreement.
 
8  
GOVERNING LAW AND ARBITRATION
 
Provisions of Section 19 (Governing Law and Arbitration) of the Agreement shall apply to this Joinder Agreement.
 
 
2

 
 
IN WITNESS WHEREOF, CEL-SCI and Pliva have caused their duly authorized representatives to execute this Joinder Agreement effective as of the date on which CEL-SCI and Pliva have both signed it.


CEL-SCI     PLIVA Hrvatska d.o.o.  
         
/s/Geert Kersten
   
/s/ Matko Bolanga, MD
 
Title: Chief Executive Officer
   
 Title: President of the Management Board
 
 
   
 
 
Date: 18 July 2011     Date: 19-07-2011  
 
 
 
 
3

 
EXHIBIT   A

MATICNI BROJ: IDENTIFICATION NUMBER:
 
VRSTA PRAVNE OSOBE: CATEGORY OF LEGAL PERSON :
 
PRAVNI OBLIK: LEGAL FORM:

NAZIV : NAME:
 
SKRACENI NAZIV: ABBREVIATION OF THE NAME:
 
ADRESA SJEDISTA:
 
ADDRESS OF HEADQUARTERS :
 
MJESTO, DRZAVA I DATUM OSNIVANJA: PLACE,STATEANDDATEOF ESTABLISHMENT:
 
AKT O OSNIVANJU
ACT ON ESTABLISHMENT:
 
PUNOMOC
 
POWER OF ATTORNEY

Opunomocujemo I ovlascujemo Plivu Hrvatska d.o.o.  Prilaz  baruna  Filipovica  25,  10   000     Zagreb, Republika Hrvatska da u nase ime zatrazi otvaranje osobnog identifikacijskog broja kod Ministarstva financija RH - Porezna uprava.

We are giving a power of attorney to Pliva Hrvatska d.o.o. Prilaz baruna Filipovica 25, 10   000   Zagreb,   Republic of Croatia, to make a request for opening of the identification number at Ministry of Finance Republic of Croatia - Tax Administration.


 

Datum: Date:    July 18, 2011                                                    Signed: /s/ Geert Kersten
 


4

Exhibit 10(uu)
 
MASTER SERVICE AGREEMENT
 
between
 
ERGOMED CLINICAL RESEARCH Ltd.
26-28 Frederick Sanger Road
Surrey Research Park
Guildford GU2 7YD
Surrey, England
 
and
 
CEL-SCI Corporation
8229 Boone Boulevard, Suite 802
Vienna, VA 22182, USA


 
1

 

MASTER SERVICE AGREEMENT


This MASTER SERVICE AGREEMENT (hereinafter “the Agreement”) is entered into between

ERGOMED CLINICAL RESEARCH Ltd., with registered offices at 26-28 Frederick Sanger Road, Surrey Research Park, Guildford,  GU2 7YD Surrey, England  (hereinafter “ERGOMED”),

and

CEL-SCI Corporation, with registered offices at  8229 Boone Boulevard, Suite 802,Vienna, VA 22182, USA (hereinafter: “COMPANY”)

hereinafter also referred to separately as a “ Party” or jointly as the “Parties”

PREAMBLE

WHEREAS COMPANY is engaged in the business of the development, manufacture, distribution, and sale of biologics.

WHEREAS ERGOMED is engaged in the business of clinical trial management, regulatory affairs consulting, database management, statistical analysis and medical writing of clinical research and product development for pharmaceutical and/or medical devices,

WHEREAS COMPANY would like to retain ERGOMED to from time to time to perform services in connection with certain programs COMPANY is conducting, in which case the terms and conditions for each such program shall be set forth in a Clinical Trial Order (“CTO”)to be attached to this Agreement and incorporated herein by reference

WHEREAS COMPANY shall, in a specific Clinical Trial Order annexed to this Agreement, request of ERGOMED to provide the Services pursuant to terms and conditions of this Agreement and of the specific Clinical Trial Order; and
 
WHEREBY IT IS AGREED as follows:

DEFINITIONS

Article 1

 
1.1.   For the purposes of this Agreement, the following terms shall have the following meaning:

a)  
Agreement shall mean this Agreement and all attached Schedules, and all numbered Annexes to this Agreement to be concluded by the Parties in the future.
b)  
Schedule shall mean an integral part of this Agreement added after the signatory page by the time of the signing of the Agreement.
c)  
Annex shall mean an addition and/or amendment to the existing Agreement, dated, numbered and signed by both Parties.
d)  
Affiliate shall designate any entity which is either owned or controlled, directly or indirectly, in majority by shareholder(s) of each Party respectively or by a subsidiary of any Party in any country.
e)  
Clinical Trial Order shall mean a document specifying services that ERGOMED shall provide to COMPANY. All Clinical Trial Orders shall be dated, numbered and signed by both Parties and incorporated either as a Schedule or Annex to this Agreement.
f)  
Effective Date shall mean the date of the latter signature of the Parties on the signing page of this Agreement.
g)  
Clinical Study and/or Trial and/or Project – a series of activities undertaken to research, develop and/or manufacture a product of COMPANY; or clinical   investigations as are more specifically set out in each Clinical Trial Order.
h)  
In-Put Material – all documents, information, materials or other supplies provided by the COMPANY necessary for the provision of the Services.
i)  
Services shall mean any and all services to be performed by Ergomed as specified in the relevant Clinical Trial Order as amended from time to time by written agreement between COMPANY and ERGOMED.
j)  
VAT – value added tax chargeable under English law for the time being and any similar additional tax.

 
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SUBJECT MATTER OF THE AGREEMENT

Article 2

2.1. COMPANY hereby retains ERGOMED to perform the Services and ERGOMED accepts such appointment, all pursuant to the terms and conditions of this Agreement as amended or added to by the terms of the specific Clinical Trial Order and any subsequent Annexes thereto.

2.2. Services that ERGOMED shall provide to COMPANY for each separate Clinical Study and/or Trial and/or Project shall be specifically outlined in a Clinical Trial Order. The Parties shall, where necessary, separately negotiate the details of each Clinical Trial Order, which signed Clinical Trial Order shall be annexed to this Agreement.

2.3. This Agreement shall be deemed a Master Agreement for all Services for which COMPANY engages ERGOMED. Unless and specifically amended by the specific Clinical Trial Order, the terms and conditions of this Agreement shall be valid and applicable to all Services undertaken by ERGOMED pursuant to each of the Clinical Trial Orders.  In the event of any conflict between the provisions of the CTO(s) and the provisions of this Agreement, the provisions of this Agreement shall govern except to the extent expressly set forth in such CTO.

2.4. The provisions of this Agreement shall in any circumstances prevail over any of the COMPANY’S standard terms and conditions (if any) attached to any Clinical Trial Order or otherwise provided at any time to ERGOMED.

RIGHTS AND OBLIGATIONS OF THE PARTIES

Article 3

3.1. ERGOMED shall use its reasonable endeavors to provide any and all Services to COMPANY with reasonable care and skill and in accordance with the Clinical Trial Order and any applicable provisions of applicable laws and regulations.

3.2. ERGOMED shall use its reasonable endeavors to perform the Services efficiently and within the time frames as set out in each separate Clinical Trial Order

3.3. ERGOMED shall ensure that its staff and contractors:
(a)   are appropriately trained and qualified to carry out the terms of a specific Clinical Trial Order;
(b) have the appropriate time and resources to fulfil their obligations and to deliver  the Services as contracted.

3.4. ERGOMED shall have the right to engage any of its Affiliates to undertake any of the Services hereunder.

3.5.   ERGOMED, its Affiliates, employees, officers, directors, agents, and subcontractors will comply with all applicable laws, rules and regulations applicable to the Study including without limitation  (a) all European, national and local laws, regulations and guidance, all other laws of relevant countries,   (b) FDA Regulations, including 21 C.F.R. Parts 11. 50, 54, 56, 58 Good Laboratory Practices, and 312, Good Clinical Practices, (c) The Federal Civil False Claims Act (d) international treaties and standards adopted by the United States governing the protections of human subjects including ICH Guidelines and the provisions of the World Medical Association’s Declaration of Helsinki (1996 version); (e) insider trading laws and regulations involving the sale or purchase of securities while in possession of material, non-public information about COMPANY and (f) laws, rules and regulations regarding kick-backs, e.g., 42 U.S.C. Sections 1320a – 7b(b) and 42 C.F.R. Part 1001, and physician referrals, e.g., the Stark Law, 42 U.S.C. Section 1395nn and the equivalent laws of other relevant jurisdictions.  ERGOMED shall not offer or pay a bribe or offer or give a gift to a government official as prohibited under United States and international anti-bribery laws.  In addition, ERGOMED shall not offer remuneration to a health care provider to induce the recommendation of a particular product. Moreover, information exchanged under this Agreement may be subject to restrictions under the export control laws, rules and regulations of the government of the United States of America or other applicable foreign government entit(y) (ies) concerning the export of products, materials or technical information. ERGOMED shall comply with applicable export control laws, rules and regulations relating to the export of technical information, materials or products in connection with any disclosure of any technical information, products or materials under this Agreement to the extent applicable to ERGOMED as a  non-US entity.

3.6   COMPANY acknowledges that, as part of ERGOMED's performance under this Agreement, ERGOMED shall have the right to negotiate directly and conclude contracts with investigators and/or hospitals necessary to complete the Services in accordance with a Clinical Trial Order.  The proposed contract template shall be provided to COMPANY for review prior to submission of the contracts to investigators and hospitals for review. ERGOMED shall accept reasonable changes to the template as necessary to protect COMPANY’s interests.  ERGOMED shall submit to Company all site-requested material changes that directly affect Company’s interests (e.g., confidentiality, intellectual property, publication rights, protocol compliance, indemnification, and inspections) and that were not previously approved.  COMPANY shall comment on and/or approve such proposed changes within ten (10) working days. COMPANY agrees that ERGOMED may accept local law as the applicable law to such contracts with investigators and/or hospitals if so requested by investigators and / or hospitals or mandated under local law.

3.7   ERGOMED may not publish any articles or make any presentations relating to the Study results or Services provided to COMPANY .
 
 
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3.8   ERGOMED hereby certifies that neither it nor any of its Affiliates, employees, officers, directors, agents, and subcontractors has been debarred, or been convicted of a crime which could lead to debarment, under the Generic Drug Enforcement Act of 1992 or similar laws under any other jurisdiction. If ERGOMED or any of its Affiliates, employees, officers, directors, agents, and subcontractors who perform Services for a Clinical Trial Order is debarred or receives notice of an action or threat of action of debarment, ERGOMED shall immediately notify COMPANY.  ERGOMED understands that COMPANY’s receipt of such notice may result in the immediate termination of this Agreement. Following termination or completion of a Clinical Trial Order, ERGOMED’s obligation to notify COMPANY in regard to a particular individual shall only apply if such notice of an action or threat of action of debarment was related to the Services performed under the relevant Clinical Trial Order.

3.9            ERGOMED may use subcontractors to conduct some elements of a Clinical Trial Order.  ERGOMED will notify COMPANY in advance of its use of subcontractors.  In the event that COMPANY objects, for reasonable cause, to any such subcontractor, ERGOMED will replace the proposed subcontractor within a mutually agreeable timeframe.

a.           COMPANY-Selected Subcontractors.  In the event that COMPANY requires ERGOMED  to use a specific subcontractor (hereinafter “COMPANY Subcontractor”), ERGOMED will not be responsible for the performance of the COMPANY Subcontractor, and COMPANY will manage the performance of the COMPANY Subcontractor and be responsible for any delays or changes to A Clinical Study schedule or budget that result from the performance of the COMPANY Subcontractor.  ERGOMED will notify COMPANY promptly of any performance issues arising out of the use of any such COMPANY Subcontractors.  If COMPANY requires that ERGOMED contract with the COMPANY Subcontractor, then COMPANY hereby authorizes ERGOMED to do so as agent on behalf of COMPANY.  COMPANY remains responsible for any delays or changes to the Study schedule or budget that result from the performance of the COMPANY Subcontractor.

b.           ERGOMED-Selected Subcontractors.  For subcontractors selected and contracted directly by ERGOMED, ERGOMED will be responsible and liable for the performance and agrees to manage the performance of the subcontractor.

3.10   ERGOMED shall provide any information in its possession and assistance reasonably requested by COMPANY for any regulatory filing or regulatory compliance activities relating to the Services performed under any Clinical Trial Order at COMPANY’s expense.  ERGOMED acknowledges  that time is of the essence with regard to regulatory filing or regulatory compliance activities and will take all reasonable steps necessary to respond to COMPANY promptly.

3.11            Neither Party shall use the name of the other Party for purposes of publicizing this Agreement or any Clinical Trial Order performed hereunder, or for any other public disclosure purposes without the prior written consent of the other Party.

INDEPENDENT CONTRACTOR

Article 4

4.1. ERGOMED shall perform services under this Agreement as an independent contractor, and nothing contained herein shall be construed to be inconsistent with that relationship or status. ERGOMED, its employees, and consultants shall not be considered employees or agents of COMPANY and nothing is intended to, or shall operate to, create a partnership between the parties, or to authorise each party to act as agent for the other, and neither party shall have authority to act in the name or on behalf of or otherwise to bind the other in any way (including the making of any representation or warranty, the assumption of any obligation or liability and the exercise of any right or power).

FEES AND EXPENSES

Article 5

5.1. In consideration for ERGOMED’s Services rendered, COMPANY shall pay to ERGOMED the fees and expenses as indicated in the respective Clinical Trial Order, which is an integral part to this Agreement or in accordance with any subsequent agreed amendments.  The total fees specified in the Clinical Trial Order shall be paid to ERGOMED (without deduction or set-off) in line with the schedule of payments as indicated in the respective Clinical Trial Order. ERGOMED agrees that the Services provided under this agreement will not be subject to VAT as COMPANY is a US registered company.

5.2. Unless otherwise determined in a specific Clinical Trial Order, any and all expenses incurred by ERGOMED while providing the Services pursuant to this Agreement and the respective Clinical Trial Order, including but not limited to travel and accommodation expenses, long distance telephone expenses, express courier expenses and other expenses incurred in the performance of the Services under this Agreement, as negotiated and included in the  Study budget, shall be borne separately and additionally to the fees agreed for the provision of the Services by COMPANY.

5.3. The fees and expenses shall be payable to ERGOMED by COMPANY pursuant to ERGOMED’s monthly invoices within 30 (thirty) days from the date of receipt of the invoice, unless otherwise stipulated in any given Clinical Trial Order. Invoices shall be sent via email and the date of such email with invoice attached to email addresses indicated herein shall be deemed the date of receipt of the invoice, provided the emails are sent to both of the following addresses pprichep@cel-sci.com   and tburtlynn@cel-sci.com
 
 
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5.4. All payments shall be made by wire transfer to the account indicated on ERGOMED’s monthly invoice.

5.5. The parties agree that ERGOMED shall without prejudice to any other rights that it might have, have the right to suspend rendering the Services if any undisputed amount invoiced by ERGOMED to COMPANY is outstanding and past due for more than 45 (Forty-five) days from the due date.

5.6.            Should payment of any undisputed outstanding amounts hereunder not be paid within 45 (forty five) days of receipt of the respective invoice, the COMPANY shall pay ERGOMED interest in an amount equal to 1 % (one percent) per month on all outstanding amounts owed hereunder to be compounded quarterly until payment is made.

5.7            The Parties acknowledge that A Clinical Trial Order may cover more than one country, and that the currencies used by those countries may vary, and may fluctuate in value during the term of this Agreement.  Any such Clinical Trial Orders will contain a notation of the Base Exchange Rate for all currencies other than US Dollars in which costs for Services will be incurred.  If at any time during the term of a Clinical Trial Order the Base Exchange Rate for Services specified in a foreign currency has fluctuated more than 3%, plus or minus, ERGOMED will calculate a foreign currency exchange adjustment for those Services. The adjustment will be calculated by comparing the Base Exchange Rate with the Oanda.com foreign currency exchange spot rate on the last business Friday before each invoice is issued. Any resulting decrease in costs will be credited to COMPANY and any resulting increase in costs will be invoiced to COMPANY.  In the event ERGOMED incurs a pass through cost in a currency other than U.S. Dollars, the Parties shall determine the amount payable based on the relevant conversion rate as reported on Oanda.com on the invoice date.

5.8            COMPANY or its designee (which shall not be a competitor of ERGOMED) shall have the right, at any time during the term of a Clinical Trial Order Agreement and for a period of two (2) years thereafter, with reasonable advance notice of not less than 10 (ten) days and during normal business hours, to audit ERGOMED’s financial records, including contracts with third parties, if sufficient documentation is not available from ERGOMED’S records relating to the Services performed, funds paid by COMPANY, and funds invoiced by ERGOMED under this Agreement.  In the event that any such audit reveals any excess amounts paid by COMPANY, ERGOMED shall promptly after completion of and delivery of the audit to ERGOMED (a) pay to COMPANY any such amounts and, (b) in the event that such excess amount represents more than Ten Thousand dollars ($10,000 USD) of what was actually owed, reimburse COMPANY for the costs of such Audit.  The rights provided in this section shall be cumulative and in addition to any other rights and remedies that may be available to COMPANY.

DOCUMENTS, MATERIALS AND AUDIT

Article 6

6.1. COMPANY will supply in a timely manner to ERGOMED all documents and materials that are necessary to enable ERGOMED to carry out the Services in accordance with this Agreement and the respective Clinical Trial Order and COMPANY will ensure that all such documents and materials are accurate in all material respects.

6.2.            During the term of this Agreement ERGOMED shall maintain all materials and all other data obtained or generated by ERGOMED in the course of providing the Services hereunder, including all computerized records and files, in a secure area reasonably protected from fire, theft and destruction.  ERGOMED shall cooperate with any internal review or audit by COMPANY and make available to COMPANY for examination and duplication, during normal business hours and at mutually agreeable times, all documentation, data and information relating to the Services. In no event shall ERGOMED dispose of records without first giving COMPANY sixty (60) days prior written notice of its intent to dispose of records. The foregoing notwithstanding, the ERGOMED shall retain copies of the records reasonably necessary for regulatory purposes or to demonstrate the satisfaction of its obligations hereunder, in accordance with the requirements of the applicable Regulatory Authority

6.3            COMPANY shall be entitled, at its own cost, to audit the conduct of the Services by ERGOMED, as herein contracted, within normal working hours. COMPANY shall give not less than 10 (ten) working days for a not for cause audit and not less than five (5) working days for a for cause audit, prior written notice to ERGOMED of its intention to audit PROVIDED THAT COMPANY shall exercise such rights in a manner that will not cause any material disruption to ERGOMED in the provision of the Services or the services it provides to other customers.

6.4.            ERGOMED shall advise and provide a reasonable description to COMPANY of any visits by any government agency or Regulatory Authority to, or written or oral inquiries by any government agency or Regulatory Authority about, any facilities, subcontractors, or procedures directly related to Services performed under any Clinical Trial Order or that could reasonably be expected to directly impact COMPANY, promptly (but in no event later than two (2) business days) after notice of such visit or inquiry.  ERGOMED shall furnish to COMPANY, within two (2) business days after receipt, any report or correspondence issued by the government agency or Regulatory Authority in connection with such visit or inquiry that is directly related to  COMPANY or COMPANY Study, including any FDA Form 483, Establishment Inspection Reports, and warning letters and any comparable documents received from any government agency of Regulatory Authority in any country. Copies of ERGOMED’s responses or explanations directly relating to such items shall be given to COMPANY for review, using all reasonable efforts to provide at least five (5) days prior to delivery to a government agency or Regulatory Authority, in each case with only ERGOMED’s trade secrets or confidential information unrelated to COMPANY redacted therefrom.  COMPANY will provide any comments without unreasonable delay. ERGOMED shall use commercially reasonable efforts to properly address non compliance issues, and shall consult and inform COMPANY regarding the actions taken and the responses provided to any report or correspondence issued by any government agency or Regulatory Authority which are directly related to the Services .

6.5            Upon termination of this Agreement, the return of all In-Put Materials shall be at COMPANY’S expense. Notwithstanding anything to the contrary contained in this Agreement or any Clinical Trial Order, ERGOMED shall retain in its possession copies of any and all data, documents or information related to the performance of the Services required for regulatory, legal, insurance or record keeping purposes.
 
 
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CONFIDENTIALITY

Article 7

7.1. For the purpose of this Agreement, confidential information shall mean any and all information which is disclosed in oral, written, visual or tangible form by either Party, the Party’s Affiliate or any of their officers, directors, employees, representatives, consultants or agents, possessed or obtained by, developed for or given to the other Party, the other Party’s Affiliate or any of their officers, directors, employees, representatives, consultants or agents or discovered by a Party as a result of or in connection with this Agreement or any cooperation of the Parties. Such information shall include without limitation any kind of scientific, technical, trade, trade secret or business information, research, data, know-how, formulae, technical operations, processes, designs, patents, inventions (whether patentable or not), photographs, drawings, specifications, software programs, samples, clients, prices, projects, schematics and other technical, business, financial and product development plans, forecasts, strategies and information and any other matters or any Agreement that the Parties may conclude between themselves (hereinafter: “Confidential Information”).

7.2. The Parties shall not directly or indirectly use contrary to this Agreement or disclose to third parties any Confidential Information which the Parties obtain or become aware of as a result of this Agreement, business relations and cooperation between the Parties. The Parties shall also restrict disclosure of the Confidential Information within its own organization and contractors respectively to those persons having a need to be aware of such Confidential Information within their scope of work and such persons shall be advised of the obligation set herein and the Parties shall ensure that such persons are bound by the confidentiality obligation to at least the same extent as provided for herein.

7.3. The Parties shall take all necessary precautions to protect the confidentiality of each other’s Confidential Information including, without limitation, all precautions the Parties employ with respect to their own confidential materials.

7.4. Each Party respectively shall remain the sole owner of its Confidential Information.

7.5. No right or license is granted (by implication or otherwise) by the either Party to the other Party in relation to its Confidential Information.

7.6. Upon termination of this Agreement or upon request by any of the Parties, the other Party shall promptly return all Confidential Information to the possession of the Party and destroy or erase all additional copies and recordings thereof, except as may be required for regulatory, legal, insurance or record keeping purposes.

7.7. Neither COMPANY nor ERGOMED shall publish any paper, make any presentation containing any Confidential Information or otherwise utilize any Confidential Information of the other party in whatsoever way without the prior written consent of the other Party hereto.

7.8. The obligation of non-use and non-disclosure of Confidential Information set out in this Agreement shall not apply to information which:

a)  
is or becomes public other than by a breach of the Agreement; or

b)  
is disclosed to professional advisers of the Party engaged to advise the Party in connection with any subject matter of any agreement between the Parties; or

c)  
is used or disclosed to third parties with the prior written consent of the other Party ; or

d)  
was known to the Party on a non-confidential basis at the time it was disclosed, other than by previous disclosure by the other Party, as evidenced by the Party’s written records at the time of the disclosure; or

e)  
is lawfully communicated to either Party by a third party without confidentiality obligation, or is known by either party without use of the other party’s Confidential Information; or

f)  
is required to be disclosed pursuant to court order or governmental rule or law, provided each Party promptly notifies the other Party of the required disclosure, uses diligent efforts to limit disclosure in any lawful means and to obtain confidential treatment and/or a protective order, if available, and allows the other Party to participate in any proceedings.

7.9. If any of the Parties violates or breaches, or threatens to violate or breach, any of the provisions of this Agreement relating to Confidential Information, the other Party will suffer immediate and irreparable harm which cannot be calculated accurately in monetary damages and such Party suffering damages shall be entitled to take any court or other lawful measures to prevent any actual or attempted breach by the other Party, without the need to show any actual damages. The Parties hereby agree that the Party breaching any of the provisions of this Agreement relating to Confidential Information shall have to bear any and all reasonable expenses, including but not limited to attorneys' fees, incurred by the Party suffering damages in the prosecution of any legal proceeding against the other Party to enforce this Agreement or restrain any violation.

 
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7.10.   ERGOMED will comply with all applicable national and international laws, regulations and guidelines relating to protection of the personal information of  subjects, including any laws implementing the  European Commission Directive 95/46 (the “Directive”) as it relates to the protection of the personal information of EU  subjects.  ERGOMED consents and agrees to obtain any additional necessary consent from its Affiliates, employees, officers, directors, agents, and subcontractors to transfer their personal data outside the EEA to the United States where a different data protection regime applies for processing for the purposes of this Agreement and any related Clinical Trial Order.

7.11            The provisions of this Article 7 shall be in force for the duration of the Agreement and shall survive for a period of ten (10) years from the date of expiry or termination of the Agreement.

NON-SOLICITATION

Article 8

8.1. Neither of the Parties shall and shall ensure that neither of  their respective Affiliates or any of their officers, directors, employees, representatives, consultants or agents shall at any time during the term of this Agreement or within 1 (one) year after the expiration or termination of this Agreement solicit or entice away or seek to entice away in any way whatsoever from the other Party or its respective Affiliates any person who is, during the validity of this Agreement or within the period indicated above, employed or engaged on any other terms by the other Party or its respective Affiliates, especially not the senior employees, consultants or agents of the other Party or its Affiliates respectively.

INTELLECTUAL PROPERTY

Article 9

9.1. All results and data resulting from the conduct of clinical trials are the sole and absolute property of COMPANY. ERGOMED shall disclose to COMPANY any and all inventions, discoveries, improvements and original works conceived or made by ERGOMED in course of providing Services pursuant to this Agreement. Subject to Articles 9.3 and 9.4 ERGOMED shall, upon the request and at expense of COMPANY, assign all ERGOMED’s interest therein to COMPANY.

9.2. ERGOMED acknowledges that it has no right to know-how, techniques, systems and products, processes, methods developed by COMPANY or any part thereof all of which shall be regarded by ERGOMED as the exclusive property of COMPANY and ERGOMED shall, at the request and expense of COMPANY, execute all such documents and deeds and do all such things as may be necessary or desirable to give full effect to the foregoing. Any product or document supplied by COMPANY for which regulatory or legal requirements entail maintaining archive or counter samples will be excluded from this procedure.

9.3. Notwithstanding Article 9.1. all of ERGOMED’s techniques, processes, methods, clinical trials data bases, clinical trials management, software and other know-how related to ERGOMED and/or the Services which are the property of ERGOMED as of the Effective Date of this Agreement or developed by ERGOMED thereafter irrespective of the Services under this Agreement shall continue to be the sole and exclusive property of ERGOMED and the COMPANY shall not claim or have any right in such ERGOMED property.

9.4. Notwithstanding Article 9.1, any invention made solely by ERGOMED which represents a new, improved or modified technique, process, method, program, software or similar know-how related to ERGOMED and/or the Services which are the property of ERGOMED which can be used for the performance of services for existing or future customers of ERGOMED shall be the sole and exclusive property of ERGOMED.

9.5   Neither anything contained herein, nor the delivery of any information to a Party hereto, shall be deemed to grant the receiving Party any right or license under any patents or patent applications or to any know-how, technology or inventions of the disclosing Party.

INDEMNIFICATION

Article 10

10.1. COMPANY agrees to indemnify, defend and hold harmless ERGOMED and its respective Affiliates, employees, officers, directors, agents, subcontractors, successors and assigns (hereinafter : “Indemnitee”) against and from any claims, proceedings, investigations, losses, costs, liabilities and damages of any kind and nature by a third party (each a “Claim”) against Indemnitees based on, relating to or in connection with the Services and other work conducted under this Agreement (hereinafter: “the Claim”), including, without limitation, interest, penalties, amounts paid in settlement of Claims and agrees to bear all costs and expenses, including reasonable attorneys' fees and arbitration and/or litigation costs incurred in connection with the defense or settlement of any such Claim as such costs or expenses are incurred, in advance of judgment, and will pay any cost and damages which, by final judgment, may be assessed against any Indemnitee.
 
 
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10.2. COMPANY's obligations under Article 10.1. of this Agreement are conditioned upon ERGOMED giving COMPANY timely written notice and assistance in the defense of any such Claim, and shall not extend to any claims to the extent such Claim results from the negligence or willful misconduct of ERGOMED's employees, affiliates, officers, directors or agents. Notwithstanding the foregoing, ERGOMED's failure to give COMPANY timely written notice of any such claim, proceeding or investigation shall not limit ERGOMED's right to indemnification except in such case where such failure materially and adversely affects COMPANY's ability to defend against such claim, proceeding or investigation.

10.3. ERGOMED agrees to defend, indemnify and hold harmless COMPANY, its employees, Affiliates, officers, directors and agents (hereinafter: “COMPANY’s Indemnitee”) against and from any third party Claims resulting from ERGOMED’s negligence, malpractice or intentional misconduct, including without limitation, claims related to bodily injury or death to patients participating in a clinical trial conducted pursuant to a Clinical Trial Order to this Agreement, caused  by the negligence or willful misconduct of ERGOMED, including without limitation, interest, penalties, amounts paid in settlement of Claims and agrees to bear all costs and expenses, including reasonable attorneys' fees and arbitration and/or litigation costs incurred in connection with the defense or settlement of any such Claim as such costs or expenses are incurred, in advance of judgment, and will pay any cost and damages which, by final judgment, may be assessed against any COMPANY’s Indemnitee.

10.4. ERGOMED's indemnification obligation hereunder shall not apply to any Claim which is caused in whole or in part by the drug, the provision of inaccurate information by, or the negligence, malpractice or intentional misconduct of COMPANY, any clinical investigator or laboratory or their respective personnel, Institutional Review Board/Ethics Committee or its members, any person or entity affiliated with any clinical site, or any independent contractor engaged to provide drug labeling, packaging, storage and shipment services, except to the extent that ERGOMED”S negligence or willful conduct in the selection or management of all such persons and entities materially contributed to the Claim. All such persons and entities shall not be considered affiliates, agents or employees of ERGOMED for the purposes of this Agreement.

10.5. ERGOMED’s obligations under Article 10.3. of this Agreement are conditioned upon COMPANY giving ERGOMED timely written notice and defense of any such Claim. Notwithstanding the foregoing, COMPANY’s failure to give ERGOMED timely written notice of any such Claim shall not limit COMPANY’s right to indemnification except in such case where failure materially and adversely affects ERGOMED’s ability to defend against such Claim. COMPANY shall co-operate with ERGOMED in the defense of any such claim.

10.6. The Parties shall be promptly notified of any Claim being made against any of them respectively and shall co-operate with each other in the defense of any such Claim.

10.7. The terms of this Article 10 and the Parties’ obligations hereunder, shall survive termination of this Agreement and the completion of ERGOMED’s services hereunder.

LIMITATION OF LIABILITY

Article 11

11.1. This Article 11.1 sets out the entire financial liability of the Parties (including any liability for the acts or omissions of its Affiliates, employees, agents and sub-contractors).  No Party shall be liable for loss of profits, loss of business, depletion of goodwill and/or similar losses, loss of anticipated savings, loss of goods, loss of contract, loss of use, or any special, indirect, consequential or pure economic loss, costs, damages, or charges.
 
11.2.   All warranties, conditions and other terms implied by statute or common law are, to the fullest extent permitted by law, excluded from this Agreement.

11.3. Nothing in these Articles limits or excludes the liability of either Party for death or personal injury resulting from its negligence or willful misconduct.
 
11.4. Except for ERGOMED’s obligations under Article 7 (Confidentiality), Article 9 (Intellectual Property), Article  10 (Indemnification), Section 11.3 above, or any intentional or negligent misuse of COMPANY’s intellectual property, ERGOMED’s total liability in contract, tort (including negligence or breach of statutory duty), misrepresentation, restitution or otherwise arising in connection with the performance or contemplated performance of this Agreement shall be limited to the price paid for the Services supplied under the relevant Clinical Trial Order (namely the Clinical Trial Order under which the Services (in relation to which the act of default giving rise to the liability occurred) were being provided.

FORCE MAJEURE

Article 12

12.1. The Party shall have no liability to the other Party respectively under this Agreement if the Party is prevented from or delayed in performing its obligations under this Agreement or from carrying on its business by acts, events, omissions or accidents beyond its reasonable control, including strikes, lock-outs or other industrial disputes (whether involving the workforce of such Party or any other party), failure of a utility service or transport network, act of God, war, riot, civil commotion, malicious damage, compliance with any law or governmental order, rule, regulation or direction, accident, breakdown of plant or machinery, fire, flood, storm or default of suppliers or sub-contractors.
 
 
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INSURANCE

Article 13

13.1. Throughout the term of this Agreement, COMPANY shall procure and maintain the commercial general liability insurance policy including coverage for product liability and conducting of clinical studies, as well as professional liability insurance; in the amounts appropriate to the conduct of its business.

13.2. Throughout the term of this Agreement ERGOMED shall procure and maintain the professional liability insurance in the amounts appropriate to the conduct of its business.

13.3. Certificate evidencing the insurance will be made available for examination upon the request of the other Party respectively.

ASSIGNMENT

Article 14

14.1. Neither Party shall have the right to assign this Agreement or any of the rights or obligations hereunder without the prior written consent of the other Party, which consent will not be unreasonably withheld or delayed, except that any Party may assign this agreement to (i) an Affiliate (ii) any third party who acquires all or substantially all of the assets or business of the assigning party to which this Agreement relates, provided the assigning party gives the other party hereto prompt written notice of such assignment.

NOTICES

Article 15

15.1. Any notices required or to be sent hereunder shall be in writing and delivered personally or sent by fax or mail or courier, at the sender’s choice. Notices delivered to the addresses indicated below shall be considered validly delivered, unless either of Parties had notified the other Party in writing of the change of address at least 8 (eight) days prior to such delivery. Notices sent by fax shall be sent to the respective fax numbers set forth herein and such notices shall be deemed given as of the date sent by fax properly addressed and transmitted.

FOR ERGOMED:

ERGOMED CLINICAL RESEARCH LTD.
Representative office
Oreškovićeva 20a
HR-10000 Zagreb, Croatia
fax: +385 1 4628 501
attn.: Dr. Miroslav Reljanovic
email: neil.clark@ergomed-cro.com

FOR COMPANY:

CEL-SCI Corporation
8229 Boone Boulevard, Suite 802
Vienna, VA 22182, USA
fax: 703) 506-9471
Attn.:Geert Kersten,  President & CEO
email: grkersten@cel-sci.com


 
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DURATION AND TERMINATION OF THE AGREEMENT

Article 16

16.1. This Agreement shall enter into force and effect once signed by authorized representatives of both Parties and shall remain valid and in force for the longer of a) seven (7) years or b) 6 (six) months after the full completion of and full payment of all of the Services pursuant to this Agreement and/or any Clinical Trial Order annexed to this Agreement, after which period this Agreement and/or all Clinical Trial Orders shall subject to Article 16.5 expire.
 
 
16.2. Each Party may terminate this Agreement prior to its expiration with a written notice to the other Party and a notice period of not less than 60 (sixty) calendar days. If the Agreement is so terminated,   COMPANY shall pay ERGOMED all amounts owed for the Services rendered prior to the termination date, as well as any work which cannot be immediately cancelled.

16.3. Either Party may terminate this Agreement or any individual Clinical Trial Order appended to this Agreement in case of material breach of the Agreement or the Clinical Trial Order respectively, by the other Party, with a written notice to the other Party and a notice period of not less than 30 (thirty) calendar days; provided, however, if such material breach of this Agreement or the Clinical Trial Order is cured by the other Party within the notice period, such election and notice shall be of no further force and effect and this Agreement or the Clinical Trial Order respectively shall not be terminated thereby. However, should either Party repeat such or similar material breach, the other Party may exclude the possibility to remedy such breach in the written notice to the Party breaching this Agreement or the Clinical Trial Order. Termination of the Clinical Trial Order shall not affect the term of any Agreement.

16.4. In any case, termination of this Agreement or of any Clinical Trial Order shall not affect any obligations of the Parties undertaken or due during the validity of the Agreement or the Clinical Trial Order respectively. Any invoiced issued by ERGOMED to COMPANY for Services performed prior to and during the notice period shall be duly paid by COMPANY within the stipulated term. The Parties may additionally designate specific rights and obligations which shall not be affected by the termination of the Agreement or of the Clinical Trial Order, in an Annex signed by both Parties.

16.5. The rights and obligations of each of the Parties under any provision of this Agreement, which by its terms, is intended to survive beyond the term of this Agreement, including, but not limited to Article 5 (Fees and Expenses), Article 7 (Confidentiality), Article 8 (Non-Solicitation), Article 9 (Intellectual Property rights) and Article 10 (Indemnification) from this Agreement shall survive the termination of this Agreement and shall continue to be in full force and effect thereafter in accordance with the terms of such respective provisions.

DISPUTES

Article 17

17.1. Any and all disputes arising out of or in connection with the Agreement, including but not limited to its interpretation, validity, termination and consequences of termination, shall be settled by an amicable effort of the Parties.

17.2. Any dispute, which is not amicably settled by such efforts of the Parties, shall be finally resolved under the Rules of the London Court of International Arbitration, by 1 (one) arbitrator appointed pursuant to such Rules.

17.3. This Agreement and all disputes thereof shall be governed by and construed in accordance with the substantive laws of England.

FINAL PROVISIONS

Article 18

18.1. This Agreement contains the entire and sole agreement between the Parties with respect to the subject of the Agreement. The Agreement wholly cancels, terminates and supersedes any agreement or agreements, formal or informal, oral or written heretofore entered into pertaining to the subject matter of this Agreement, including but not limited to Confidentiality Disclosure Agreement (CDA) entered into between the Parties on or about December 11, 2012.

18.2. Any and all additions and/or amendments to this Agreement shall be in writing, numbered, dated and signed by an authorized representative of each Party respectively.

18.3. If any provision of this Agreement should be deemed invalid or legally unenforceable, such provision shall not affect the validity and/or enforceability of any other provision(s) of this Agreement or the Agreement as a whole. The Parties shall, in such case, replace the invalid provision with a valid one that best expresses their original intent.

18.4. If any invalid, unenforceable or illegal provision would be valid, enforceable or legal if some part of it were deleted, that provision will apply with whatever modification is necessary to make it valid, enforceable and legal.

 
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18.5. The parties agree, in the circumstances referred to in Clause 18.3 and if Clause 18.4 does not apply, to attempt to substitute for any invalid, unenforceable or illegal provision which achieves to the greatest extent possible the same effect as would have been achieved by the invalid or unenforceable provision.

18.6. This Agreement is being executed in English language in 2 (two) identical copies, of which each Party shall keep 1 (one) copy.

 
FOR ERGOMED:     FOR COMPANY:  
         
/s /Dr. Miroslav Reljanovic
   
/s/ Geert Kersten
 
Chief Financial Officer
   
Chief Executive Officer
 
         
Date: 4-19-2013
   
Date: 4-19-2013
 
 
 
 

 
11

Exhibit 10(vv)
 
DATED: April 19, 2013


CO-DEVELOPMENT AND REVENUE SHARING AGREEMENT


BETWEEN

CEL-SCI Corporation
AND

Ergomed Clinical Research Limited
 
 
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This Co-Development Agreement (hereinafter “the Agreement”) is made on the 19th day of April 2013 between

CEL-SCI Corporation , a company duly established pursuant to the laws of Colorado, with the registered office at 8229 Boone Boulevard, Suite 802, Vienna, VA, 22182. USA, hereinafter: “CEL-SCI”)

AND

E rgomed Clinical Research, Ltd. , a company duly established pursuant to the laws of England, with registered offices at The Surrey Research Park, 26-28 Frederick Sanger Road, Guildford, Surrey, GU2 7YD, England (hereinafter: “Ergomed”)

or separately referred as “the Party” or jointly as “the Parties”

PREAMBLE

WHEREAS CEL-SCI is, among other things, engaged in research and development of a Product for the treatment of head and neck cancer in humans.

WHEREAS CEL-SCI has certain patent rights related to the compound having the chemical name Leucocyte Interleukin Inj. (“Multikine®”);

WHEREAS , Ergomed has experience and expertise in the business of clinical trial management, clinical development and regulatory matters with particular expertise in the provision of full clinical development services to enable the completion of all phases of clinical trials;

WHEREAS CEL-SCI wishes that Ergomed assists CEL-SCI in the clinical development program for Multikine® for the purpose of maximizing the Commercialization potential of the Product with the ultimate aim of selling or licensing the Product;

WHEREAS CEL-SCI and Ergomed have entered, or concurrently with the execution of this Agreement are entering, into the Master Services Agreement, and are, concurrently with the execution of this Agreement, entering into Clinical Trial Order I to the Master Services Agreement (“CTO I”), pursuant to which Ergomed will provide clinical development services with respect to the anticipated Phase III Co-Developed Clinical Trial;

WHEREAS CEL-SCI and Ergomed would like to regulate by this Agreement their risk sharing and cooperation in the co-development of the Product as described in this Agreement and in the Master Services Agreement and the CTOI.

WHEREBY IT IS AGREED as follows:

1.  
DEFINITIONS
 
1.1.  
For the purposes of this Agreement, the following terms shall have the following meaning (and all capitalized terms in this Agreement shall be defined according to these definitions):

“Affiliate” - shall mean, with respect to an entity, any corporation or other entity that is directly or indirectly controlling, controlled by or under common control with such entity, as the case may be.  As used in this definition, the term “control” will mean the direct or indirect ownership of fifty percent (50%) or more of the stock or other securities having the right to vote for directors thereof or the ability to otherwise control the management of the corporation or other business entity.
“Agreement” - this document, including any and all schedules, exhibits, appendices and other addenda to it as may be added and/or amended from time to time in accordance with the provisions of this document.

“Business Day” - a day that is not a Saturday, Sunday or a day on which banking institutions in either UK or USA are authorized by law to remain closed.

“Clinical Trial” – any of a Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial.

“Co-Developed Clinical Trial” will mean the Phase III Clinical Trial, as described in further detail in CTO I attached to the Master Services Agreement (or any subsequently agreed amended versions of such CTO I).
 
 
 
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“Co-Development Program” - the program for the Development of the Product pursuant to the clinical development plans describing in detail the scope and budget for the Co-Developed Clinical Trial for the Product in accordance with CTO I to the Master Services Agreement which is included herein in Schedule B.

“Commercialization”, “Commercializing”, or “Commercialize” – with respect to the Product, means all activities relating to the import, advertising, promotion, other marketing, pricing and reimbursement, detailing, distribution, storage, handling, offering for sale and selling, customer service and support, post-Marketing Authorization regulatory activities, including adverse event reporting, of such Product and any other activities or arrangements that amount to the commercial realization of such Product's value following receipt of Marketing Authorization in the relevant country.

“Competent Authority” - any multi-national, national, state, provincial or local agency, authority, department, inspectorate, minister, ministry official, parliament or public or statutory person (whether autonomous or not) of any government of any country having jurisdiction over any of the activities contemplated by this Agreement or over one or both of the Parties.

“Development” – with respect to the Product, clinical development, pursuant to the applicable Co-Developed Clinical Trial and related regulatory activities regarding such Product in  Europe, India and Russia.  “Development” shall include, without limitation, all conduct and project management of the applicable Co-Developed Clinical Trial, and related regulatory affairs activities, including obtaining permissions from authorities for the conduct of such Co-Developed Clinical Trial, identification and management of clinical sites for recruitment of subjects, safety reporting report writing and all other related regulatory affairs activities, but expressly excluding Non-Clinical Development. When used as a verb, “Develop” shall mean to engage in Development.

“Effective Date” – the date set forth in the introductory paragraph of this Agreement.

"Encumbrance" - any liens, charges, encumbrances, equities, claims, options, proxies, pledges, security interests or other similar rights of any nature.

“FDA” - the United States Food and Drug Administration or any successor agency thereto.

"Field" - the administration to human patients by any and all routes of administration (including, for the avoidance of doubt, topical administration) of the Product for the treatment of head and neck cancer.

 “Force Majeure” - in relation to either Party, any event or circumstance which is beyond the reasonable control of that Party which event or circumstance that Party could not reasonably be expected to have taken into account at the date of this Agreement and which results in or causes the failure of that Party to perform any or all of its obligations under this Agreement, which may include acts of God, lightning, fire, storm, flood, earthquake, accumulation of snow or ice, lack of water arising from weather or environmental problems, strike, lockout or other industrial or student disturbance, act of the public enemy, war declared or undeclared, threat of war, terrorist act, blockade, revolution, riot, insurrection, civil commotion, public demonstration, sabotage, act of vandalism, prevention from or hindrance in obtaining in any way materials, energy or other supplies, explosion, fault or failure of plant or machinery (which could not have been prevented by good industry practice), or Legal Requirement governing either Party, provided that lack of funds shall not be interpreted as a cause beyond the reasonable control of that Party.

“Good Industry Practice” – in relation to any undertaking and any circumstance, the exercise of that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced person engaged in the same type of undertaking under the same or similar circumstances.

 “Interest” – an annual rate of one-half percent (0.5%) above the three month LIBOR rate from time to time.

“Legal Requirement” - any present or future law, regulation, directive, instruction, direction or rule of any Competent Authority or Regulatory Authority applicable to the Co-Development Program or this Agreement, including any amendment, extension or replacement thereof which is from time to time in force.

“License Agreement” (including variations such as to “License”, “Licensing”, “Licensee” or “Licensed”) –  an agreement between CEL-SCI and a Third Party to whom CEL-SCI or its Affiliates (a) grants a license of rights under CEL-SCI’s Patents to develop, make (and have made), use, sell, offer for sale, and/or Commercialize the Product in one or more countries in the Territory and in respect of one or more indications in the Field.

“Licensing Income and Other Income” – means, with respect to the Product, any payment or, any other consideration, including but not limited to any signature fee, license fee, sub-license fee, license option fee (whether in relation to the grant or exercise of any license fee) or other up-front fee, and any milestone payment, of any kind whatsoever received by CEL-SCI or any of its Affiliates in the Field.

 “Marketing Authorization” – with respect to the Product, means any approval required from a Regulatory Authority to market and sell such Product in any country, including any form of pricing or reimbursement approval.

"Master Service Agreement" or "MSA" shall mean the Master Services Agreement entered into by the Parties on the Effective Date (as amended from time to time) pursuant to which Ergomed provides CRO services to CEL-SCI with respect to each of the Co-Developed Clinical Trial.

“Net Income” – shall mean, with respect to the Product any payment or any other cash or non-cash consideration in a country in the Territory, received by CEL-SCI or its Affiliates for the Product from the Field including, without limitation, Licensing Income and Other Income, as well as Net Sales.

 
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“Net Sales” – shall mean, with respect to the Product in a country in the Territory, and subject to the Combination Product adjustment set forth below (if applicable), the gross sales amount of such Product invoiced and actually received by CEL-SCI or its Affiliates on direct sales of such Product to Third Parties (which may include, without limitation, distributors and end-users), in each case less the following items (“ Net Sales Adjustments”) as applicable to such Product to the extent actually included in the gross invoiced sales amount or deducted from the amount received:
 
●  
credits or allowances granted upon returns, rejections or recalls (due to spoilage, damage, expiration of useful life or otherwise), retroactive price reductions, or billing corrections; invoiced freight, postage, shipping and insurance, handling and other transportation costs actually incurred by CEL-SCI or its Affiliates;
 
●  
credits or allowances actually granted, including, without limitation, quantity, cash and other trade discounts, provided, however, that discounts or allowances offered as part of a package of products that includes such Product (other than discounts included in the gross invoice sales amount for Combination Products) sold by CEL-SCI or its Affiliates shall be allocated to such Product on a pro rata basis based upon the sales value (i.e., the unit average selling price multiplied by the unit volume) of such Product relative to the sales value contributed by the other constituent products in the bundled set;
 
●  
taxes (including, without limitation, sales, value-added or excise taxes), tariffs, customs duties, surcharges and other governmental charges incurred in connection with the production, sale, transportation, delivery, use, exportation or importation of such Product that are incurred at time of sale or are directly related to the sale;
 
●  
any payments in respect of sales to any governmental authority in respect of any government subsidized program, including without limitation, Medicare and Medicaid rebates;
 
●  
amounts paid or credited to customers for inventory management, distribution, warehousing and related services;
 
●  
discounts, refunds, rebates, charge backs, fees, credits or allowances (including, without limitation, billing corrections, amounts incurred in connection with government-mandated rebate and discount programs, Third Party rebates and charge backs, hospital buying group/group purchasing organization administration fees and managed care organization rebates), distribution fees and sales commissions to Third Parties, actually paid or incurred and which effectively reduce the selling price; provided, however, that discounts or allowances offered as part of a package of products that includes such Product (other than discounts included in the gross invoice sales amount for Combination Products) sold by CEL-SCI or its Affiliates shall be allocated to such Product on a pro rata basis based upon the sales value (i.e., the unit average selling price multiplied by the unit volume) of such Product relative to the sales value contributed by the other constituent products in the bundled set;
 
●  
allowances for bad debts; and
 
●  
any reasonable deduction that is similar in nature and character to the above and is directly related to the sales of such Product;
 
●  
any payment that is meant to contribute to the future expenses of the phase III trial from the time of the license of the Product to a third party.

all in accordance with standard allocation procedures, allowance methodologies and accounting methods consistently applied, which procedures and methodologies shall be in accordance with GAAP or IFRS.  For the avoidance of doubt, the transfer of the Product by CEL-SCI or one of its Affiliates to another Affiliate of such Party shall not be considered a sale; in such cases, Net Sales shall be determined based on the gross sales amount of such Product invoiced and actually received by such Affiliate on sales to an independent Third Party, less the Net Sales Adjustments allowed under this Section and subject to the Combination Product adjustment below (as applicable).  Net Sales shall not include distribution to a Third Party of such Product for research, testing, clinical trials or humanitarian purposes, including, without limitation, expanded access programs, patient assistance programs or charitable donations, in each case to the extent the Product is provided at no consideration.
If the Product is sold as part of a Combination Product (as defined below), the Net Sales of the Product shall be determined by multiplying the Net Sales of the Combination Product (as determined using the standard Net Sales definition, including the Net Sales Adjustments), during the applicable reporting period, by the fraction, A/(A+B), where A is the average sale price of such Product when sold separately in similar quantities in finished form and B is the average sales price of the other compounds having independent therapeutic activity included in the Combination Product when sold separately in similar quantities in finished form, in each case in the same country as the Combination Product during the applicable reporting period or, if sales of both such Product and the other compounds having independent therapeutic activity did not occur in such period, then in the most recent reporting period in which sales of both occurred in the same country as the Combination Product.  If such average sale price cannot be determined for both such Product and all other compounds having independent therapeutic activity included in the Combination Product, Net Sales of such Product shall be calculated by multiplying the Net Sales of the Combination Product by the fraction of C/(C+D) where C is the fair market value of such Product and D is the fair market value of all other compounds having independent therapeutic activity included in the Combination Product, as determined by CEL-SCI in good faith.  “ Combination Product ” means a pharmaceutical product containing a Product and one or more additional active pharmaceutical compounds (other than a Product) having independent therapeutic activity.

“Non-Clinical Development” –  with respect to the Product, means all other activities related to the development of such Product which are not the applicable Co-Developed Clinical Trial or related regulatory activities, such as but not limited to preclinical testing, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control, manufacturing clinical supplies and any pre-commercialization activity (including pricing and reimbursement activities).

“Patents” - patent applications and patents, utility certificates, improvement patents and models and certificates of addition and all foreign counterparts of them in all countries, including any divisional applications and patents, refilings, renewals, re-examinations, continuations, continuations-in-part, patents of addition, extensions (including patent term extensions), reissues, substitutions, confirmations, registrations, revalidations, pipeline and administrative protections and additions, and any equivalents of the foregoing in any and all countries of or to any of them, as well as any supplementary protection certificates and equivalent protection rights, e.g. in relation to pediatric extensions in respect of any of them. Patents to the Product are listed herein in Schedule A.

 
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 “Phase III Clinical Trial” - with respect to the Product, means a large scale, pivotal, multi-centre, human clinical trial to be conducted in a number of patients estimated to be sufficient to primarily establish efficacy of such Product in the medical indication being investigated and at a standard suitable to obtain Marketing Authorization anywhere in the Territory (excluding dose ranging studies), as described in in applicable laws and regulations.

"Product" – a biological identified by CEL-SCI as Multikine®, a compound having the chemical name Leucocyte Interleukin Inj.

“Program Budget” – with respect to the Product, means the budget for Program Costs in relation to the Co-Development Program for such Product. The Program Budget for each Product is set out in the relevant CTO to the MSA.

 “Regulatory Authority” - any national, supranational, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity in any country involved in the granting of Marketing Authorization, including the FDA.

 “Territory” – each country in the world.
“Third Party” – a person or entity other than either of the Parties or any of their respective Affiliates.

 “Year” – any period of twelve (12) months commencing on 1 January and ending on 31 December.
 
2.  
SUBJECT OF THE AGREEMENT
 
2.1.  
The primary objective of the Agreement is to regulate the funding of, and coordination of certain decision-making regarding, the Development of the Product through the conduct of the Co-Developed Clinical Trial and related regulatory submissions as contemplated in this and the Master Services Agreement.
 
2.2.  
CEL-SCI and Ergomed shall undertake their respective obligations under the Co-Development Program on a collaborative basis. CEL-SCI shall have the right to conduct, and, using commercially reasonable efforts, shall have sole responsibility for Non-Clinical Development as well as for Commercialization and intellectual property maintenance of the Product and shall bear all associated costs for such activities. Ergomed, performing in accordance with Good Industry Practice, shall have primary responsibility and bear the associated costs (subject to Sections 3 and 6) for Development of the Product by executing the clinical and regulatory activities in all Europe, Russia and India, all under the Co-Development Program, as stipulated in detail in the CTO I. Accordingly, the Parties shall co-operate in good faith in performing such activities, particularly with respect to unknown problems or contingencies, and shall perform their respective obligations in good faith, in a commercially reasonable manner, and in accordance with the provisions of this Agreement and the MSA.
 
2.3.  
Notwithstanding any of the above or anything else in the Agreement, CEL-SCI shall at all times and for all purposes act as the sponsor of the Clinical Trial(s) under the applicable Legal Requirements.
 
3.  
CO-DEVELOPMENT INVESTMENT
 
3.1.  
With respect to the Product, Ergomed shall invest up to $10 million towards the clinical and regulatory costs determined in the Co-Development Program for the execution of the Co-Developed Clinical Trial for the Product in Europe, Russia and India (the actual amount of such investment, determined in accordance with Section 6) (“Ergomed Co-Development Investment”). The Ergomed Co-Development Investment shall not exceed US$10,000,000 (ten million dollars) for Product Development (the “Ergomed Co-Development Investment Cap”).
 
3.2.  
With respect to the Product, CEL-SCI shall be solely and fully responsible for all other Development, Non-Clinical Development and Commercialization costs.
 
3.3.  
Ergomed shall not be obligated to invest more in the Co-Development Program than the amount set forth in clause 3.1. above.  If CelSci decides to increase the Program Budget with no agreement from Ergomed as to such increase, then CelSci will bear such increase solely without affecting any of Ergomed’s rights herein.
 
4.  
CO-MANAGEMENT OF THE CO-DEVELOPMENT PROGRAM
 
4.1.  
The Parties shall, within ten (10) days of the Effective Date, establish a Joint Steering Committee (the “JSC”) to render strategic and policy decisions for the Development and registration of Product in the Field and to oversee the performance of the Co-Development Program.  The responsibilities of the JSC shall be, without limitation to:
 
4.1.1.   approve changes to the Co-Development Program.  For the avoidance of doubt, in no event shall the JSC have the power to extend the Co Development Program beyond the completion of the planned Co-Developed Clinical Trial.  This right shall solely remain with the Parties;
 
4.1.2.   review selection of Third Party service providers in respect of the Co-Development Program;
 
 
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4.1.3.   review decisions regarding termination of the Co-Development Program with respect to the Product for a safety, efficacy, product performance or regulatory reason.  In addition, where the Co-Development Program is terminated with respect to the Product either for a safety, efficacy, product performance or regulatory reason, the JSC shall agree in good faith on the provisions for the orderly wind-down of the Co-Development Program with respect to such Product. The Parties agree that, under most circumstances, if the Co-Development Program with respect to the Product is terminated for a reason other than a safety, efficacy, product performance or regulatory reason while a Co-Developed Clinical Trial is ongoing, it may be unethical to terminate the Co-Development Program with respect to such Product or relevant part thereof until such Clinical Trial had been completed and, in such a case, the Parties shall co-ordinate the orderly wind-down provisions in such a way that they would not affect such Clinical Trial until it had completed;
 
4.1.4.   report on progress of the Co-Development Program to each Party within a reasonable period after each meeting of the JSC;
 
4.1.5.   review actual and anticipated expenditures against the Program Budget for each Product and to note any factors that may have an impact on such Program Budget; and
 
4.1.6.   perform such other tasks and undertaking such other responsibilities as are expressly set forth as the JSC’s responsibility as set forth in this Agreement or an amendment thereto.
 
4.2.  
The JSC shall consist of four (4) members with the requisite experience and authority to enable them to make decisions on behalf of the Parties, with equal numbers appointed by each respective Party. Each Party shall have the right to replace its respective representatives in JSC upon twenty (20) Business Days written notice to the other Party (or more quickly if such representative’s relationship with the appointing Party has terminated), provided that any such substitute representative shall have substantially the equivalent experience and authority as the representative that such person replaces. CEL-SCI will designate the chairman of the JSC. The JSC shall be run in accordance with the following provisions:
 
4.2.1.   The JSC shall have its first meeting within thirty (30) Business Days after the Effective Date, and thereafter shall hold regular meetings at intervals of not more than six (6) months.  The venue for each meeting of the JSC shall alternate between Frankfurt, Germany, and Vienna, VA, USA or such other locations as may be agreed upon by the JSC Members.  Except for the first meeting of the JSC, which shall be a face-to-face meeting, meetings of the JSC may be held as a teleconference or video conference, provided that the JSC shall hold at least one face-to-face meeting during each Year.  In addition, special meetings of the JSC may be called by any JSC member upon written request to and approval of the then-current chairman of the JSC.
 
4.2.1.  
 
4.2.2.    The presence of at least one (1) JSC member representing each Party shall constitute a quorum.  Each Party shall have one (1) vote on the JSC.  All decisions by the JSC shall be made by unanimous vote.  Both Parties must vote in the affirmative to allow the JSC to take any action that requires the vote of the JSC.
 
4.2.3.   At least twenty one (21) days prior to each regularly scheduled meeting of the JSC, written notice shall be given to each JSC member by the chairman of the JSC.  Ad hoc or special meetings of the JSC may be scheduled on shorter written notice.
 
4.2.4.   The chairman of the JSC shall set meeting agendas for the JSC, which shall include any matter reasonably requested by either Party to be included and which is subject to the JSC’s purview pursuant to Section 4.1.  Such agendas shall be circulated to all JSC members at least five (5) Business Days prior to the date of the relevant meeting.  The JSC chairman shall be responsible for recording, preparing and, within five (5) Business Days, issuing draft minutes of the JSC meetings, which draft minutes shall be reviewed, modified and approved in writing by the JSC members within five (5) Business Days.  Such minutes shall record all proposed decisions and all actions recommended or taken, including a copy of progress reports.
 
4.2.5.   If the JSC cannot reach unanimous agreement on any particular matter properly before it, then such matters requiring resolution shall be referred to the Chief Executive Officer of CEL-SCI or equivalent position or his or her nominee, and the Chief Executive Officer of Ergomed or equivalent position or his or her nominee, for resolution, who together shall use reasonable and good faith efforts to resolve such matters within thirty (30) days of the date such matters are referred to them for resolution.  If the Parties still fail to resolve the matter so referred, the Party having primary responsibility for the related activity, as stipulated in the Agreement, will have the right to break the deadlock unilaterally except as provided in Section 4.3. below.
 
4.3.  
The specific decision to which the provision from Section 4.2.5. does not apply are:
 
4.3.1.  
changes to the Co-Development Program including any extension of the scope of work therefore. If, following the meeting of Chief Executive Officers of CEL-SCI and Ergomed, the Parties cannot agree upon such changes the Co-Development Program shall continue without amendment.
4.3.2.  
the changes to the Program Budget of the Co-Development Program.  If following the meeting of Chief Executive Officers of CEL-SCI and Ergomed, the Parties cannot agree upon such changes the respective Program Budget shall remain as agreed prior to such proposed change and the Co-Development Program shall continue without amendment.
 
5.  
CO-DEVELOPMENT PROGRAM
 
Ergomed’s performance
 
5.1.  
Ergomed shall be responsible for carrying out its part of the Co-Development Program, particularly carrying out the Development, all in accordance with the MSA, and the CTO I.  The MSA and CTO I shall govern the performance by Ergomed of any Clinical Trials to be carried out by Ergomed under the Co-Development Program.
 
 
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CEL-SCI’s performance
 
5.2.  
CEL-SCI shall be responsible for carrying out its part of the Co-Development Program, particularly Non-Clinical Development, Clinical development in territories other than the Europe, Russia and India. Commercialization, manufacturing and IP protection of the Product, all in accordance with the MSA and this Agreement, and all solely at its own cost and expense.
 
6.  
REVENUE SHARING
 
6.1.  
CEL-SCI shall make payments to Ergomed for invoices submitted by Ergomed for Ergomed’s activities on the Co-Developed Clinical Trial in accordance with the MSA within the terms stipulated in the MSA and related CTOI; provided, however, that Ergomed’s invoices pursuant to the MSA for each Co-Developed Clinical Trial will be reduced by 30% (thirty percent) from the costs set forth in the MSA and the proposal attached to CTO I (“Ergomed Invoiced Costs”) until the cumulative total of such reductions reaches the Ergomed Co-Development Investment Cap, following which the invoices with respect to the Co-Developed Clinical Trial will be issued and payments will be made with no reduction, all in accordance with the payment schedule set forth in the MSA.  The 30% reduction described in the foregoing shall be accrued as the Ergomed Co-Development Investment for the Product and shall be tracked.  Each invoice subject to the reduction shall clearly set forth, with respect to the Product, the fee schedule set forth in the MSA and CTO I and the relevant reduction to be applied toward the Ergomed Co-Development Investment.
 
6.2.  
Notwithstanding anything in this Clause 6, in consideration for the applicable Ergomed Co-Development Investment, CEL-SCI shall pay to Ergomed an agreed percentage of any Net Income received by CEL-SCI for the Product in the Field in the Territory in the amount of 5% (five percent) of such Net Income until the total amount paid to Ergomed under this Section reaches four times (4x) Ergomed Co-Development Investment.
 
6.3.  
Any payments under Clause 6.2 shall be due and payable by CEL-SCI to Ergomed within sixty (60) days from the date on which CEL-SCI actually records or receives the Net Income; provided, however, that CEL-SCI may, in its sole discretion, pay all or any portion of the amounts owed to Ergomed under this Agreement at any time prior to CEL-SCI’s receipt of the relevant Net Income.
 
6.4.  
Records Retention; Audit
 
6.4.1.  
Ergomed shall keep or cause to be kept full, true and accurate records and books of account in accordance with internationally accepted accounting principles that, in reasonable detail, fairly reflect Ergomed’s program costs and the Ergomed Co-Development Investment for the Product.  Such books and records shall be maintained by Ergomed for three (3) Years following the end of the Year to which they pertain.
 
6.4.2.  
Upon the written request of CEL-SCI (the “Requesting Party”), Ergomed (the “Disclosing Party”) shall permit a certified public accountant, or a person possessing similar professional status and associated with an independent accounting firm reasonably acceptable to the Requesting Party, to inspect during regular business hours and no more than once a Year and going back no more than three (3) Years following the end of the Year to which they pertain, all or any part of the records and books necessary to verify such invoices and reports.  The accounting firm shall enter into appropriate obligations with the Disclosing Party to treat all information it receives during its inspection in confidence.  The accounting firm shall disclose to the Parties only whether such invoices and reports are correct and details concerning any discrepancies, but no other information shall be disclosed to the Requesting Party. The charges of the accounting firm shall be paid by the Requesting Party, except that if the Ergomed Co-Development Investment for the Product have been overstated by more than five percent (5%), the charges shall be paid by the Disclosing Party. Ergomed shall, within forty-five (45) days after receipt of an invoice from CEL-SCI, pay to CEL-SCI the amount by which the Ergomed Co-Development Investment for the Product has been overstated, along with Interest from the date of the original invoice, and such overstated amount shall be excluded from the Ergomed Co-Development Investment for the Product.
 
6.5.  
CEL-SCI and its Affiliates shall keep full, true and accurate records and books of account in accordance with GAAP or IFRS containing all particulars that may be reasonably necessary for the purpose of calculating the share of Net Income payable to Ergomed under this Agreement.  Such books and records shall be maintained for three (3) Years following the end of the Year to which they pertain.  Upon the written request by Ergomed, Ergomed shall have the right to instruct an independent, internationally recognized, accounting firm reasonably acceptable to CEL-SCI, to perform an audit, conducted so far as appropriate in accordance with GAAP or IFRS, as applicable, during regular business hours and no more than once a Year, as is reasonably necessary to enable such accounting firm to report to Ergomed Net Income for the period or periods requested by Ergomed going back no more than three (3) Years following the end of the Year to which the records pertain. The accounting firm shall enter into appropriate obligations with CEL-SCI to treat all information it receives during its inspection in confidence.  The accounting firm shall disclose to the Parties only whether CEL-SCI has paid to Ergomed the proper portion of Net Income with respect to the Product and details concerning any discrepancies, but no other information shall be disclosed to Ergomed.  The cost of the accountant shall be the responsibility of CEL-SCI if the audit shows that CEL-SCI has underpaid Ergomed its proper portion of Net Income by more than five percent (5%) with respect to the Product and the responsibility of Ergomed otherwise.  CEL-SCI shall, within forty-five (45) days after receipt of an invoice from Ergomed, pay to Ergomed the amount by which the portion of Net Income for the Product owed to Ergomed was underpaid, along with Interest from the date of CEL-SCI’s original receipt thereof.
 
6.6.  
All payments made by CEL-SCI to Ergomed under this Agreement shall be made by wire transfer to the account of Ergomed that may be notified by Ergomed to CEL-SCI from time to time.
 
6.7.  
If CEL-SCI fails to make any payment due to Ergomed hereunder on the due date for payment, without prejudice to any other right or remedy available to Ergomed, Ergomed shall be entitled to charge CEL-SCI Interest (both before and after judgment, from the date payment was originally due through the date paid) without prejudice to Ergomed’s right to receive payment on the due date.  If Ergomed overcharges CEL-SCI, without prejudice to any other right or remedy available to CEL-SCI, CEL-SCI shall be entitled to charge Ergomed Interest (both before and after judgment, from the date payment was originally made through the date refunded).
 
 
7

 
 
7.  
WARRANTIES
 
7.1.  
Warranties of CEL-SCI
 
CEL-SCI hereby represents and warrants to Ergomed as of the Effective Date that:

a)  
CEL-SCI is a company duly incorporated and validly existing under the laws of Colorado  and has the corporate power to own its assets, conduct its business as presently conducted and to enter into, and comply with its obligations under this Agreement;

b)  
this Agreement has been duly authorized and executed by CEL-SCI and constitutes a valid and legally binding obligation of CEL-SCI, enforceable in accordance with its terms;
 
c)  
CEL-SCI is not engaged in, and so far as CEL-SCI is aware (having made no enquiry) is not threatened by, any litigation, the outcome of which might adversely affect its financial position or the execution of the rights and obligations undertaken by this Agreement;
 
d)  
the execution, delivery and performance by CEL-SCI of this Agreement and compliance with the provisions hereof by CEL-SCI  will not:

(i)  
violate any provision of applicable law, statute, rule or regulation or any ruling, writ, injunction, order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to CEL-SCI or any of its properties or assets;
(ii)  
conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under the organizational documents of CEL-SCI or any contract to which CEL-SCI is a party; or
(iii)  
 result in the creation of any Encumbrance of any nature granted to a Third Party upon any of the properties or assets of CEL-SCI;
 
e)  
With respect to the Patents set forth on Schedule  A pertaining to the Product, (i) CEL-SCI is the registered owner thereof, which rights are free of any Encumbrances, restrictions or Third Party rights, (ii) such Patents are in full force and effect, and (iii) there are no licenses or rights to use such Patents granted by CEL-SCI to any Third Party that are in effect as of the Effective Date that are in conflict with the terms of this Agreement; and
 
f)  
CEL-SCI has not received any written claim from a Third Party alleging that the manufacture or commercialization of the Product infringes a Patent of such Third Party;
 
g)  
CEL-SCI has obtained all necessary corporate approvals, including but not limited to the Board approval, and has obtained the funds necessary to carry out the Co-Development Program.
 
7.2.  
Warranties of Ergomed
 
Ergomed hereby represents and warrants to CEL-SCI as of the Effective Date that:

a)  
Ergomed is a company duly incorporated and validly existing under the laws of the United Kingdom and has the corporate power to own its assets, conduct its business as presently conducted and to enter into, and comply with its obligations under this Agreement;

b)  
this Agreement has been duly authorized and executed by Ergomed and constitutes a valid and legally binding obligation of Ergomed, enforceable in accordance with its terms;

c)  
Ergomed is not engaged in, and so far as Ergomed is aware (having made no enquiry) is not threatened by, any litigation, the outcome of which might adversely affect its financial position or the execution of the rights and obligations undertaken by this Agreement; and
 
d)  
the execution, delivery and performance by Ergomed of this Agreement and compliance with the provisions hereof by Ergomed will not:
 
(i)  
violate any provision of applicable law, statute, rule or regulation or any ruling, writ, injunction, order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to Ergomed or any of its properties or assets;
(ii)  
conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under the organizational documents of Ergomed or any contract to which Ergomed is a party; or
(iii)  
result in the creation of any Encumbrance of any nature granted to a Third Party upon any of the properties or assets of Ergomed.
 
 
8

 
8.  
PARTICULAR COVENANTS
 
8.1.  
Positive covenants
 
8.1.1.  
Each Party shall inform the other Party of all relevant information which may be significant for the Product that the other Party has a need to know in connection with the Co-Development Program which it receives or develops independently of the other Party. This shall be accomplished through representatives on the JSC.
 
9.  
CONFIDENTIALITY
 
 
9.1. The Parties agree that the MSA shall govern with respect to “Confidential Information” (as defined in the MSA) that may be exchanged between the Parties under the MSA.  Any Confidential Information of either Party (as defined below) that may be exchanged between the Parties under this Agreement and except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that, during the validity of the Agreement and for ten (10) years thereafter, the receiving Party (the “ Receiving Party ”) shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as permitted under, or required to perform its obligations under, this Agreement any financial information and materials furnished to it by the other Party (the “ Disclosing Party ”) pursuant to this Agreement (collectively, “ Confidential Information ”), except to the extent that it can be established by the Receiving Party that such Confidential Information:
 
●  
was already known to the Receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party;
 
●  
was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;
 
●  
became generally available to the public or otherwise part of the public domain after its disclosure to the Receiving Party and other than through any act or omission of the Receiving Party in breach of this Agreement;
 
●  
was disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or
 
●  
was subsequently developed by the Receiving Party without the aid, use or application of the Disclosing Party’s Confidential Information as demonstrated by competent written records.
 
9.2.            Authorized Disclosure .  Each Receiving Party may disclose the Disclosing Party’s Confidential Information hereunder to the extent such disclosure is reasonably necessary in prosecuting or defending litigation or complying with applicable governmental regulations, provided that if a Receiving Party is required by law or regulation to make any such disclosure of the Disclosing Party’s Confidential Information it will, where permitted by law, give reasonable advance written notice to the other Party of such disclosure requirement and will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed.  In addition, each Receiving Party shall be entitled to disclose, under obligations of confidentiality substantially as protective as this Article 9, the Disclosing Party’s Confidential Information to its Affiliates, consultants, clinical investigators, potential permitted sublicensees and other Third Parties only for any purpose provided for in this Agreement.
 
9.3.   Return of Confidential Information .  Upon the termination or expiration of this Agreement, any and all Confidential Information of a Disclosing Party possessed in tangible form by the Receiving Party, its Affiliates or any of their officers, directors, employees, agents or consultants shall, upon written request of the Disclosing Party, be immediately returned to the Disclosing Party (or destroyed if so requested) and not retained by the Receiving Party, its Affiliates or any of their officers, directors, employees, agents or consultants, provided that, each Receiving Party shall be entitled to retain any Confidential Information of the Disclosing Party that is reasonably required to exercise its rights under Clause 6 for so long as such rights survive. Notwithstanding the foregoing, each Receiving Party may retain one (1) copy of any Confidential Information of the Disclosing Party in appropriately secure legal files solely for record-keeping purposes.
 
9.4. Public Disclosure; Use of Name .  Except as required by an order from a court or governmental body, applicable law or regulation neither Party shall use the name of the other Party in any publicity or advertising without the prior written approval of the other Party, except that either Party may disclose the existence, but not the terms or conditions (including information contained in any Exhibit hereto), of this Agreement.  Notwithstanding the foregoing, in the event that either Party seeks to disclose the terms of this Agreement in any legally required filing, such Party shall provide prompt written notice to the other Party and use reasonable efforts to maintain the confidential treatment of the material terms of this Agreement to the extent reasonably possible, provided however that COMPANY may disclose the details of the Agreement in public filings to the Securities Exchange Commission (SEC) and the New York Stock Exchange (NYSE).
 
10.  
ASSIGNMENT
 
10.1.  
This Agreement may not be assigned, transferred or subcontracted by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that either Party may assign this Agreement, in whole or in part, without the other Party’s consent to an Affiliate, or in connection with a merger, consolidation, acquisition or a sale or transfer of all or substantially all of such Party’s assets to which this Agreement relates.
 
10.2.  
Each Party shall as soon as practicable notify the other Party of an assignment to an Affiliate or of a Change of Control and shall provide the other Party with information reasonably requested by such Party with respect to such Affiliate or acquirer. “Change of Control” means: (a) the acquisition by any third party of beneficial ownership of fifty percent (50%) or more of the then-outstanding common shares or voting power of a Party; or (b) the consummation of a business combination involving a Party, unless, following such business combination, the stockholders of a Party immediately prior to such business combination beneficially own directly or indirectly more than fifty percent (50%) of the then-outstanding common shares or voting power of the entity resulting from such business combination. Any assignment not in accordance with the foregoing shall be void.
 
 
9

 
 
11.  
PRESS RELEASES
 
11.1.  
The Parties will not publicly disclose the nature or existence of this Agreement, through press releases, a web site, brochures, or written materials of any kind, unless differently agreed by both Parties in writing or unless required by the law or by the rules of any stock exchange which apply to a Party.
 
12.  
NOTICES
 
12.1.  
Any notices required or to be sent hereunder shall be in writing and delivered personally or sent by fax or mail or e-mail, at the sender’s choice. Notices delivered to the addresses, fax numbers or e-mail addresses indicated below (or such other address, fax number or e-mail address of which the receiving Party had notified the other Party in writing, in accordance with the procedures of this Section 12.1, at least 8 (eight) days prior to such delivery) shall be considered validly delivered and shall be considered received on the date of actual receipt; provided, however, that notices sent by fax shall be deemed given as of the date sent by fax properly addressed and transmitted.
 
FOR CEL-SCI:
 
CEL-SCI Corporation
8229 Boone Boulevard,
Suite 802,
Vienna, VA 22182, USA
Attention: Geert Kersten
fax: (703) 506-9471
grkersten@cel-sci.com

FOR Ergomed:
Ergomed Clinical Research Ltd.
Representative office
Oreškovićeva 20A
10000 Zagreb, Croatia
Attn. dr. Miroslav Reljanović
miroslav.reljanovic@ergomed-cro.com
with copy to neil.clark@ergomed-cro.com
 
13.  
TERM AND TERMINATION
 
 
13.1   The term of this Agreement shall commence on the Effective Date and shall expire on the date on which both Parties have fulfilled all of their obligations contemplated herein. For the avoidance of doubt, the Agreement cannot be terminated by either of the Parties prior to its expiration unless specifically and expressly stipulated in the Agreement or unless agreed in writing by both Parties.
 
13.2.  
For the sake of clarity, the Parties agree and acknowledge that the expiration or termination of this Agreement shall not affect in any way the validity of the MSA or the relevant CTO therein, which shall, to the extent applicable, continue in full force and effect unless terminated pursuant to the relevant clauses in the MSA or such CTO.
 
13.3.  
In case that either the MSA and / or any relevant CTO thereunder are terminated, this Agreement shall continue to apply to the Parties taking into account such fact of termination of MSA and / or the Exhibit and performance on any obligations of the Parties directly and solely related to the obligations under the MSA or the CTO shall no longer be required from either of the Parties. For the avoidance of doubt, in this case, the provisions stipulated in Sections 6, 9, 12 and 14 shall remain in full force and effect.
 
14.  
DISPUTE RESOLUTION AND GOVERNING LAW
 
14.1.  
General .   The Parties recognize that disputes as to certain matters may from time to time arise which relate to either Party’s rights and/or obligations hereunder.  It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual dialogue and cooperation and, to extent possible, without resort to litigation.  To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 14 if and when a dispute arises under this Agreement.
 
14.2.  
Senior Management .  Any disputes relating to this Agreement shall be first referred to the Chief Executive Officer of CEL-SCI and the Chief Executive Officer of Ergomed, or their respective senior-level designees, for resolution through good faith negotiations.  In the event that such executives, or their respective designees, cannot resolve the dispute within thirty (30) days of being requested by a Party to resolve a dispute, either Party may, by written notice to the other, invoke the provisions of Section 14.3 hereinafter.
 
 
10

 
 
14.3.  
Mediation .   The Parties agree that any dispute, controversy or claim (except as to any issue relating to Confidential Information or intellectual property owned in whole or in part by Ergomed or CEL-SCI or any equitable claim) arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall be resolved through mediation and binding arbitration.  If a dispute arises out of or relating to this Agreement between the Parties, and if such dispute cannot be resolved pursuant to Section 14.2 above, the Parties agree to try in good faith to resolve such dispute by mediation administered by the American Arbitration Association (AAA) in accordance with its Mediation Rules.  Such mediation shall take place in New York, New York if personal appearance is required.
 
Arbitration .  If efforts at mediation pursuant to Section 14.3 are unsuccessful within sixty (60) days after the date that one Party notifies the other Party that it desires to resolve a dispute, controversy or claim through mediation, any unresolved dispute, controversy or claim between the Parties shall be resolved by binding arbitration in accordance with the International Arbitration Rules of the American Arbitration Association, by 1 (one) arbitrator appointed pursuant to such Rules, except as modified herein. A reasoned arbitration decision shall be rendered in writing within six (6) months of the conclusion of mediation and shall be binding on the Parties.  The prevailing Party may enter such
 
decision in any court having competent jurisdiction.  The mediation and arbitration proceedings shall be conducted in the English language and shall be held in   New York, New York.  The Parties agree that they shall share equally the cost of the mediation and arbitration filing and hearing fees, and the cost of the mediator/arbitrator, except to the extent otherwise determined by the arbitrators.  Each Party must bear its own attorneys’ fees and associated costs and expenses, except to the extent otherwise determined by the arbitrators.
 
14.4.  
Injunctive Relief, Collection of Amounts Due and Express Dispute Resolution Provisions .  Notwithstanding the foregoing provisions of this Article 14, (a) either Party will have the right to seek injunctive relief and/or collection of any undisputed amount due under this Agreement in any court of competent jurisdiction as may be available to such Party under the laws and rules applicable in such jurisdiction, and (b) the provisions of Sections 14.1-14.4 shall not apply with respect to any decision described in Section 4.3.
 
14.5.  
Governing Law .  This Agreement and all disputes thereof shall be governed by and construed in accordance with the substantive laws of the State of New York, USA other than any principle of conflict or choice of laws that would cause the application of the laws of any other jurisdiction.
 
15.  
FINAL PROVISIONS
 
15.1.  
If any provision of this Agreement should be deemed invalid or legally unenforceable, such provision shall not affect the validity and/or enforceability of any other provision(s) of this Agreement or the Agreement as a whole. The Parties shall, in such case, replace the invalid provision with a valid one that best expresses their original intent.
 
15.2.  
This Agreement (which includes its Schedules) and the MSA and the relevant CTO thereunder contain the entire and only agreement between the Parties with respect to the subject of the Agreement and wholly cancel, terminate and supersede any agreement or agreements, formal or informal, oral or written heretofore entered into pertaining to the subject matter, including the Confidentiality, Non-Disclosure and Non-Solicitation Agreement between the parties dated as of December 11, 2012. Notwithstanding the foregoing, the Parties agree and acknowledge that the MSA and the CTO I thereunder, if entered into prior to this Agreement, shall survive the execution of this Agreement
 
15.3.  
If a Party (the “Affected Party”) is unable to carry out any of its obligations under this Agreement due to Force Majeure this Agreement shall remain in effect but the Affected Party’s relevant obligations under this Agreement and the corresponding obligations of the other Party (“Non-Affected Party”) under this Agreement, shall be suspended for a period equal to the circumstance of Force Majeure provided that:
 
15.3.1.  
the suspension of performance is of no greater scope than is required by the Force Majeure;
 
15.3.2.  
the Affected Party immediately gives the Non-Affected Party prompt written notice describing the circumstance of Force Majeure, including the nature of the occurrence and its expected duration, and continues to furnish regular reports during the period of Force Majeure and notifies the Non-Affected Party immediately of the cessation of the Force Majeure;
 
15.3.3.  
the Affected Party uses all reasonable efforts to remedy its inability to perform and to mitigate the effects of the circumstance of Force Majeure; and
 
15.3.4.  
as soon as practicable after the event which constitutes Force Majeure the Parties discuss how best to continue their operations as far as possible in accordance with this Agreement.
 
15.4.  
The status of each Party under this Agreement shall be that of an independent contractor. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or agency relationship between the Parties or as granting either Party the authority to bind or contract any obligation in the name of or on the account of the other Party or to make any statements, representations, warranties or commitments on behalf of the other Party.  All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.
 
15.5.  
This Agreement is written and executed in the English language.
 
 
11

 
 
15.6.  
Any amendment or modification of this Agreement must be in writing and signed by authorized representatives of both Parties.
 
15.7.  
A Party’s failure to enforce, at any time or for any period of time, any provision of this Agreement, or to exercise any right or remedy shall not constitute a waiver of that provision, right or remedy or prevent such Party from enforcing any or all provisions of this Agreement and exercising any rights or remedies.  To be effective any waiver must be in writing.  All rights and remedies are cumulative and do not exclude any other right or remedy provided by law or otherwise available.
 
15.8.  
The provisions of this Agreement are for the sole benefit of the Parties and their successors and permitted assigns, and they shall not be construed as conferring any rights in any other Persons except as otherwise expressly provided. Except as expressly provided herein, no person who is not a party to this Agreement (including any employee, officer, agent, representative or subcontractor of either Party) shall have the right to enforce any term of this Agreement which expressly or by implication confers a benefit on that person without the express prior agreement in writing of the Parties, which agreement must refer to this Clause 15.8.
 
15.9.  
Each Party shall perform all further acts and things and execute and deliver such further documents as may be necessary or as the other Party may reasonably require to implement or give effect to this Agreement.
 
15.10.  
Except as otherwise expressly provided in this Agreement, each Party shall pay the fees and expenses of its respective lawyers and other experts and all other expenses and costs incurred by such Party incidental to the negotiation, preparation, execution and delivery of this Agreement.
 
15.11.  
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall be deemed to constitute one and the same instrument.  An executed signature page of this Agreement delivered by facsimile transmission shall be as effective as an original executed signature page.  Signatures to this Agreement transmitted by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the originals graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signatures, and shall be deemed original signatures by both Parties.
 
15.12.  
In construing this Agreement, unless expressly specified otherwise, (a) except where the context otherwise requires, use of any gender includes any other gender, and use of the singular includes
 
the plural and vice versa; (b) any list or examples following the word “including” shall be interpreted without limitation to the generality of the preceding words; and (c) each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof.  In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions.
 
[Remainder of Page Intentionally Left Blank]
 
 
12

 
 
 
The Parties have indicated their acceptance of the terms of this Agreement by the signatures set forth below.  Each individual signing on behalf of a corporate entity hereby personally represents and warrants his or her legal authority to legally bind that entity.
 
 
CEL-SCI CORPORATION
   
ERGOMED CLINICAL RESEARCH LTD
 
         
/s/ Geert Kersten
   
/s/ Dr. Miroslav Reljanovic
 
Print Name: Geert Kersten
   
Print Name: Dr. Miroslav Reljanovic
 
Title: Chief Executive Officer
   
Title: Chief Financial Officer
 

 
 
13

 
 
SCHEDULE A – CEL-SCI PATENTS
 

 
 
14

 
 
SCHEDULE B – CO-DEVELOPMENT PROGRAM WITH PROGRAM BUDGET












15

Exhibit 10(ww)
 
DATED: OCTOBER 10, 2013
 
CO-DEVELOPMENT AND REVENUE SHARING AGREEMENT II: Cervical Intraepithelial Neoplasia in HIV/HPV co-infected women (“CIN”)
 
BETWEEN

CEL-SCI Corporation
AND

Ergomed Clinical Research Limited
 
 
1

 
 
This Co-Development Agreement (hereinafter “the Agreement”) is made on October 10, 2013 between

CEL-SCI Corporation , a company duly established pursuant to the laws of Colorado, with the registered office at 8229 Boone Boulevard, Suite 802, Vienna, VA, 22182. USA, hereinafter: “CEL-SCI”)

AND

E rgomed Clinical Research, Ltd. , a company duly established pursuant to the laws of England, with registered offices at The Surrey Research Park, 26-28 Frederick Sanger Road, Guildford, Surrey, GU2 7YD, England (hereinafter: “Ergomed”)
or separately referred as “the Party” or jointly as “the Parties”

PREAMBLE

WHEREAS CEL-SCI is, among other things, engaged in research and development of a Product for the treatment of multiple indications.

WHEREAS CEL-SCI has certain patent rights related to the compound having the chemical name Leucocyte Interleukin Inj. (“Multikine®”);

WHEREAS , Ergomed has experience and expertise in the business of clinical trial management, clinical development and regulatory matters with particular expertise in the provision of full clinical development services to enable the completion of all phases of clinical trials;

WHEREAS CEL-SCI wishes that Ergomed assists CEL-SCI in the clinical development program for Multikine® for the purpose of maximizing the Commercialization potential of the Product with the ultimate aim of selling or licensing the Product;

WHEREAS CEL-SCI and Ergomed have entered into a Master Services Agreement and   intend to  enter into Clinical Trial Order II to the Master Services Agreement (“CTO 2”), pursuant to which Ergomed will provide clinical development services with respect to the anticipated co-development of Multikine for cervical intraepithelial neoplasia (CIN) in HIV/HPV co-infected patients  (hereafter called “CIN);

WHEREAS CEL-SCI and Ergomed would like to regulate by this Agreement and by the co-development agreements for other Indications their risk sharing and cooperation in the co-development of the Product as described in this Agreement, in the co-development agreements between the Parties for other Indications and in the Master Services Agreement, as amended from time to time and in any of the Clinical Trial Orders making an integral part of the Master Services Agreement.

WHEREAS CEL-SCI and Ergomed will jointly develop the Product in several Indications, each governed by separate co-development agreements.
WHEREAS CEL-SCI and Ergomed will use their best efforts to finalize a Co-Development Program 2, CTO 2 and the Program Budget for the CIN Indication within 12 months from the Effective Date of this Agreement.

WHEREBY IT IS AGREED as follows:

1.  
DEFINITIONS

1.1.  
For the purposes of this Agreement, the following terms shall have the following meaning (and all capitalized terms in this Agreement shall be defined according to these definitions):

“Affiliate” - shall mean, with respect to an entity, any corporation or other entity that is directly or indirectly controlling, controlled by or under common control with such entity, as the case may be.  As used in this definition, the term “control” will mean the direct or indirect ownership of fifty percent (50%) or more of the stock or other securities having the right to vote for directors thereof or the ability to otherwise control the management of the corporation or other business entity.

“Agreement” - this document, including any and all schedules, exhibits, appendices and other addenda to it as may be added and/or amended from time to time in accordance with the provisions of this document.

“Business Day” - a day that is not a Saturday, Sunday or a day on which banking institutions in either UK or USA are authorized by law to remain closed.

 
2

 
“Clinical Trial” – any of a phase I Clinical Trial, phase II Clinical Trial or Phase III Clinical Trial.

“Clinical Trial Order” or “CTO” – an agreement signed by the Parties containing specific tasks and budget for the Co-Developed Clinical Trial(s) under the MSA and this Agreement and / or any of the co-development agreements entered into by the Parties for the Development of the Product. For the avoidance of doubt, neither Party is required to enter into any CTO unless full agreement on its terms is achieved on a case by case basis.

“Co-Developed Clinical Trial” will mean  any scheduled Clinical Trial developed together  and jointly decided by the Parties , as described in further detail in CTO 2 or any other CTO entered into for the development of the Product in CIN Indication and attached to the Master Services Agreement (or any subsequently agreed amended versions of such CTO 2).

“Co-Development Program 2” - the program for the Development of the Product pursuant to the clinical development plans describing in detail the scope and budget for the Co-Developed Clinical Trial for the Product in CIN indication in accordance with CTO 2 to the Master Services Agreement which, when agreed upon will be made an integral part of this Agreement and signed by both Parties

“Commercialization”, “Commercializing”, or “Commercialize” – with respect to the Product, means all activities relating to the import, advertising, promotion, other marketing, pricing and reimbursement, detailing, distribution, storage, handling, offering for sale and selling, customer service and support, post-Marketing Authorization regulatory activities, including adverse event reporting, of such Product and any other activities or arrangements that amount to the commercial realization of such Product's value following receipt of Marketing Authorization in the relevant country.

“Competent Authority” - any multi-national, national, state, provincial or local agency, authority, department, inspectorate, minister, ministry official, parliament or public or statutory person (whether autonomous or not) of any government of any country having jurisdiction over any of the activities contemplated by this Agreement or over one or both of the Parties.

“Development” – with respect to the Product, clinical development, pursuant to the applicable Co-Developed Clinical Trial and related regulatory activities regarding such Product in any of the agreed upon Indications worldwide.  “Development” shall include, without limitation, all conduct and project management of the applicable Co-Developed Clinical Trial(s), and related regulatory affairs activities,
including obtaining permissions from authorities for the conduct of such Co-Developed Clinical Trial(s), identification and management of clinical sites for recruitment of subjects, safety reporting report writing and all other related regulatory affairs activities, but expressly excluding Non-Clinical Development. When used as a verb, “Develop” shall mean to engage in Development.

“Effective Date” – the date set forth in the introductory paragraph of this Agreement.

"Encumbrance" - any liens, charges, encumbrances, equities, claims, options, proxies, pledges, security interests or other similar rights of any nature.

“FDA” - the United States Food and Drug Administration or any successor agency thereto.

"Field" - the administration to human patients by any and all routes of administration (including, for the avoidance of doubt, topical administration) of the Product for the treatment of Cervical Intraepithelial Neoplasia in HIV/HPV co-infected women and / or for the treatment of other Indications.

 “Force Majeure” - in relation to either Party, any event or circumstance which is beyond the reasonable control of that Party which event or circumstance that Party could not reasonably be expected to have taken into account at the date of this Agreement and which results in or causes the failure of that Party to perform any or all of its obligations under this Agreement, which may include acts of God, lightning, fire, storm, flood, earthquake, accumulation of snow or ice, lack of water arising from weather or environmental problems, strike, lockout or other industrial or student disturbance, act of the public enemy, war declared or undeclared, threat of war, terrorist act, blockade, revolution, riot, insurrection, civil commotion, public demonstration, sabotage, act of vandalism, prevention from or hindrance in obtaining in any way materials, energy or other supplies, explosion, fault or failure of plant or machinery (which could not have been prevented by good industry practice), or Legal Requirement governing either Party, provided that lack of funds shall not be interpreted as a cause beyond the reasonable control of that Party.

“Good Industry Practice” – in relation to any undertaking and any circumstance, the exercise   of that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced person engaged in the same type of undertaking under the same or similar circumstances.

“Indications” – shall mean all of the indications together: Head and Neck Cancer and Cervical Intraepithelial Neoplasia in HIV/HPV co-infected patients, for which the Product will be developed under any of the co-development agreements between the Parties for such Product; “other Indication(s)” shall mean any remaining Indication(s) not specifically referred to in any respective sentence in the Agreement.

 “Interest” – an annual rate of one-half percent (0.5%) above the three month LIBOR rate from time to time.

“Legal Requirement” - any present or future law, regulation, directive, instruction, direction or rule of any Competent Authority or Regulatory Authority applicable to the Co-Development Program or this Agreement, including any amendment, extension or replacement thereof which is from time to time in force.

 
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“License Agreement” (including variations such as to “License”, “Licensing”, “Licensee” or

“Licensed”) –  an agreement between CEL-SCI and a Third Party to whom CEL-SCI or its Affiliates (a) grants a license of rights under CEL-SCI’s Patents to develop, make (and have made), use, sell, offer for sale, and/or Commercialize the Product in one or more countries in the Territory and in respect of one or more Indications in the Field.
“Licensing Income and Other Income” – means, with respect to the Product, any payment or, any other consideration, including but not limited to any signature fee, license fee, sub-license fee, license option fee (whether in relation to the grant or exercise of any license fee) or other up-front fee, and any milestone payment, of any kind whatsoever received by CEL-SCI or any of its Affiliates in the Field.

 “Marketing Authorization” – with respect to the Product, means any approval required from a Regulatory Authority to market and sell such Product in any country, including any form of pricing or reimbursement approval.

"Master Service Agreement" or "MSA" shall mean the Master Services Agreement entered into by the Parties on the Effective Date (as amended from time to time) pursuant to which Ergomed provides CRO services to CEL-SCI with respect to each of the Co-Developed Clinical Trials under any of the co-development agreements for the Product between the Parties.

“Net Income” – shall mean, with respect to the Product any payment or any other cash or non-cash consideration in a country in the Territory, received by CEL-SCI or its Affiliates for the Product from the Field including, without limitation, Licensing Income and Other Income, as well as Net Sales.

“Net Sales” – shall mean, with respect to the Product in a country in the Territory, and subject to the Combination Product adjustment set forth below (if applicable), the gross sales amount of such Product invoiced and actually received by CEL-SCI or its Affiliates on direct sales of such Product to Third Parties (which may include, without limitation, distributors and end-users), in each case less the following items (“ Net Sales Adjustments”) as applicable to such Product to the extent actually included in the gross invoiced sales amount or deducted from the amount received:

●  
credits or allowances granted upon returns, rejections or recalls (due to spoilage, damage, expiration of useful life or otherwise), retroactive price reductions, or billing corrections;
 
●  
invoiced freight, postage, shipping and insurance, handling and other transportation costs actually incurred by CEL-SCI or its Affiliates;
 
●  
credits or allowances actually granted, including, without limitation, quantity, cash and other trade discounts, provided, however, that discounts or allowances offered as part of a package of products that includes such Product (other than discounts included in the gross invoice sales amount for Combination Products) sold by CEL-SCI or its Affiliates shall be allocated to such Product on a pro rata basis based upon the sales value (i.e., the unit average selling price multiplied by the unit volume) of such Product relative to the sales value contributed by the other constituent products in the bundled set;
 
 ●  
taxes (including, without limitation, sales, value-added or excise taxes), tariffs, customs duties, surcharges and other governmental charges incurred in connection with the production, sale, transportation, delivery, use, exportation or importation of such Product that are incurred at time of sale or are directly related to the sale;
 
●  
any payments in respect of sales to any governmental authority in respect of any government subsidized program, including without limitation, Medicare and Medicaid rebates;
 
●  
amounts paid or credited to customers for inventory management, distribution, warehousing and related services;
 
●  
discounts, refunds, rebates, charge backs, fees, credits or allowances (including, without limitation, billing corrections, amounts incurred in connection with government-mandated rebate and discount programs, Third Party rebates and charge backs, hospital buying group/group purchasing organization administration fees and managed care organization rebates), distribution fees and sales commissions to Third Parties, actually paid or incurred and which effectively reduce the selling price; provided, however, that discounts or allowances offered as part of a package of products that includes such Product (other than discounts included in the gross invoice sales amount for Combination Products) sold by CEL-SCI or its Affiliates shall be allocated to such Product on a pro rata basis based upon the sales value (i.e., the unit average selling price multiplied by the unit volume) of such Product relative to the sales value contributed by the other constituent products in the bundled set;
 
●  
allowances for bad debts; and
 
●  
any reasonable deduction that is similar in nature and character to the above and is directly related to the sales of such Product;
 
●  
any payment that is meant to contribute to the future expenses of clinical development from the time of the license of the Product to a third party.

 
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all in accordance with standard allocation procedures, allowance methodologies and accounting methods consistently applied, which procedures and methodologies shall be in accordance with GAAP or IFRS.  For the avoidance of doubt, the transfer of the Product by CEL-SCI or one of its Affiliates to another Affiliate of such Party shall not be considered a sale; in such cases, Net Sales shall be determined based on the gross sales amount of such Product invoiced and actually received by such Affiliate on sales to an independent Third Party, less the Net Sales Adjustments allowed under this Section and subject to the Combination Product adjustment below (as applicable).  Net Sales shall not include distribution to a Third Party of such Product for research, testing, clinical trials or humanitarian purposes, including, without limitation, expanded access programs, patient assistance programs or charitable donations, in each case to the extent the Product is provided at no consideration.

If the Product is sold as part of a Combination Product (as defined below), the Net Sales of the Product shall be determined by multiplying the Net Sales of the Combination Product (as determined using the standard Net Sales definition, including the Net Sales Adjustments), during the applicable reporting period, by the fraction, A/(A+B), where A is the average sale price of such Product when sold separately in similar quantities in finished form and B is the average sales price of the other compounds having independent therapeutic activity included in the Combination Product when sold separately in similar quantities in finished form, in each case in the same country as the Combination Product during the applicable reporting period or, if sales of both such Product and the other compounds having independent therapeutic activity did not occur in such period, then in the most recent reporting period in which sales of both occurred in the same country as the Combination Product.  If such average sale price cannot be determined for both such Product and all other compounds having independent therapeutic activity included in the Combination Product, Net Sales of such Product shall be calculated by multiplying the Net Sales of the Combination Product by the fraction of C/(C+D) where C is the fair market value of such Product and D is the fair market value of all other compounds having independent therapeutic activity included in the Combination Product, as determined by CEL-SCI in good faith.  “ Combination Product ” means a pharmaceutical product containing a Product and one or more additional active pharmaceutical compounds (other than a Product) having independent therapeutic activity.

“Non-Clinical Development” –  with respect to the Product, means all other activities related to the development of such Product which are not the applicable Co-Developed Clinical Trial or related regulatory activities, such as but not limited to preclinical testing, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control, manufacturing clinical supplies and any pre-commercialization activity (including pricing and reimbursement activities).

“Patents” - patent applications and patents, utility certificates, improvement patents and models and certificates of addition and all foreign counterparts of them in all countries, including any divisional applications and patents, refilings, renewals, re-examinations, continuations, continuations-in-part, patents of addition, extensions (including patent term extensions), reissues, substitutions, confirmations, registrations, revalidations, pipeline and administrative protections and additions, and any equivalents of the foregoing in any and all countries of or to any of them, as well as any
supplementary protection certificates and equivalent protection rights, e.g. in relation to pediatric extensions in respect of any of them. Patents to the Product are listed herein in Schedule A.

 “Phase III Clinical Trial” - with respect to the Product, means a large scale, pivotal, multi-centre, human clinical trial to be conducted in a number of patients estimated to be sufficient to primarily establish efficacy of such Product in the medical indication being investigated and at a standard suitable to obtain Marketing Authorization anywhere in the Territory (excluding dose ranging studies), as described in in applicable laws and regulations.

"Product" – a biological identified by CEL-SCI as Multikine®, a compound having the chemical name Leucocyte Interleukin Inj.

“Program Budget” – with respect to the Product, means the budget for Program Costs in relation to the Co-Development Program 2 for such Product. The Program Budget for each Product Indication is set out in the relevant CTO to the MSA.

 “Regulatory Authority” - any national, supranational, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity in any country involved in the granting of Marketing Authorization, including the FDA.

 “Territory” – each country in the world.

“Third Party” – a person or entity other than either of the Parties or any of their respective Affiliates.

 “Year” – any period of twelve (12) months commencing on 1 January and ending on 31 December.

2.  
SUBJECT OF THE AGREEMENT

2.1.  
The primary objective of the Agreement is to regulate the funding of, and coordination of certain decision-making regarding the Development of the Product through the conduct of the Co-Developed Clinical Trial(s) and related regulatory submissions as contemplated in this and the Master Services Agreement.

 
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2.2.  
CEL-SCI and Ergomed shall undertake their respective obligations under the Co-Development Program on a collaborative basis. CEL-SCI shall have the right to conduct, and, using commercially reasonable efforts, shall have sole responsibility for Non-Clinical Development as well as for Commercialization and intellectual property maintenance of the Product and shall bear all associated costs for such activities. Ergomed, performing in accordance with Good Industry Practice, shall have primary responsibility and bear the associated costs (subject to Sections 3 and 6) for Development of the Product by executing the clinical and regulatory activities  under the Co-Development Program 2, as further stipulated in detail in the CTO 2.  Accordingly, the Parties shall co-operate in good faith in performing such activities, particularly with respect to unknown problems or contingencies, and shall perform their respective obligations in good faith, in a commercially reasonable manner, and in accordance with the provisions of this Agreement and the MSA.

2.3.  
Notwithstanding any of the above or anything else in the Agreement, CEL-SCI shall at all times and for all purposes act as the sponsor of the Clinical Trial(s) under the applicable Legal Requirements.

3.  
CO-DEVELOPMENT INVESTMENT

3.1.   
Subject to the conclusion of CTO 2 and with respect to the Product Development in CIN Indication, Ergomed shall invest up to $3 million towards the clinical and regulatory costs
determined in the Co-Development Program 2 for the execution of the Co-Developed Clinical Trial(s) for the Product in CIN Indication (the actual amount of such investment, determined in accordance with Section 6) (“Ergomed Co-Development Investment CIN”). The total of Ergomed investment into the Development of the Product in all Indications shall be referred to hereinafter as “Ergomed Total Co-Development Investment”). The Ergomed Co-Development Investment CIN shall not exceed US$3,000,000 (three million dollars) for Product Development in CIN Indication (the “Ergomed Co-Development Investment Cap CIN”) and shall not exceed US$13,000,000 (thirteen million dollars) for Product Development in head and neck cancer and CIN together (“the Ergomed Total Co-Development Investment Cap ”).

3.2.  
With respect to the Product, CEL-SCI shall be solely and fully responsible for all other Development, Non-Clinical Development and Commercialization costs.

3.3.  
Ergomed shall not be obligated to invest more in the Co-Development Program 2 than the amount set forth in clause 3.1. above.  If CEL-SCI decides to increase the Program Budget with no agreement from Ergomed as to such increase, then CEL-SCI will bear such increase solely without affecting any of Ergomed’s rights herein.

4.  
CO-MANAGEMENT OF THE CO-DEVELOPMENT PROGRAM

4.1.  
The Parties shall, within ten (10) days of the Effective Date, establish a Joint Steering Committee (the “JSC”) to render strategic and policy decisions for the Development and registration of Product in the Field and to oversee the performance of the Co-Development Program 2.  For the avoidance of doubt, and unless specifically agreed otherwise by the Parties in writing, the JSC already existing under the Co-Development Agreement for the Head and Neck Indication shall act also as the JSC under this Agreement. The responsibilities of the JSC shall be, without limitation to:

4.1.1.   approve changes to the Co-Development Program 2.  For the avoidance of doubt, in no event shall the JSC have the power to extend the Co Development Program 2 beyond the completion of the planned Co-Developed Clinical Trial.  This right shall solely remain with the Parties;
 
4.1.2.   review selection of Third Party service providers in respect of the Co-Development Program 2;
 
4.1.3.   review decisions regarding termination of the Co-Development Program 2 with respect to the Product for a safety, efficacy, product performance or regulatory reason.  In addition, where the Co-Development Program 2 is terminated with respect to the Product either for a safety, efficacy, product performance or regulatory reason, the JSC shall agree in good faith on the provisions for the orderly wind-down of the Co-Development Program 2 with respect to such Product. The Parties agree that, under most circumstances, if the Co-Development Program 2 with respect to the Product is terminated for a reason other than a safety, efficacy, product performance or regulatory reason while a Co-Developed Clinical Trial is ongoing, it may be unethical to terminate the Co-Development Program 2 with respect to such Product or relevant part thereof until such Clinical Trial had been completed and, in such a case, the Parties shall co-ordinate the orderly wind-down provisions in such a way that they would not affect such Clinical Trial until it had completed;
 
4.1.4.   report on progress of the Co-Development Program 2 to each Party within a reasonable period after each meeting of the JSC;
 
4.1.5.   review actual and anticipated expenditures against the Program Budget for the Product in each Indication and to note any factors that may have an impact on such Program Budget; and
 
4.1.6.   perform such other tasks and undertaking such other responsibilities as are expressly set forth as the JSC’s responsibility as set forth in this Agreement or an amendment thereto.

4.2.  
The JSC shall consist of four (4) members with the requisite experience and authority to enable them to make decisions on behalf of the Parties, with equal numbers appointed by each respective Party. Each Party shall have the right to replace its respective representatives in JSC upon twenty (20) Business Days written notice to the other Party (or more quickly if such representative’s relationship with the appointing Party has terminated), provided that any such substitute representative shall have substantially the equivalent experience and authority as the representative that such person replaces. CEL-SCI will designate the chairman of the JSC. The JSC shall be run in accordance with the following provisions:

 
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4.2.1   The JSC shall have its first meeting within thirty (30) Business Days after the Effective Date, and thereafter shall hold regular meetings at intervals of not more than six (6) months.  The venue for each meeting of the JSC shall alternate between Frankfurt, Germany, and Vienna, VA, USA or such other locations as may be agreed upon by the JSC Members.  Meetings of the JSC may be held as a teleconference or video conference, provided that the JSC shall hold at least one face-to-face meeting during each Year.  In addition, special meetings of the JSC may be called by any JSC member upon written request to and approval of the then-current chairman of the JSC.
 
4.2.2    The presence of at least one (1) JSC member representing each Party shall constitute a quorum.  Each Party shall have one (1) vote on the JSC.  All decisions by the JSC shall be made by unanimous vote.  Both Parties must vote in the affirmative to allow the JSC to take any action that requires the vote of the JSC.
 
4.2.3   At least twenty one (21) days prior to each regularly scheduled meeting of the JSC, written notice shall be given to each JSC member by the chairman of the JSC.  Ad hoc or special meetings of the JSC may be scheduled on shorter written notice.
 
4.2.4   The chairman of the JSC shall set meeting agendas for the JSC, which shall include any matter reasonably requested by either Party to be included and which is subject to the JSC’s purview pursuant to Section 4.1.  Such agendas shall be circulated to all JSC members at least five (5) Business Days prior to the date of the relevant meeting.  The JSC chairman shall be responsible for recording, preparing and, within five (5) Business Days, issuing draft minutes of the JSC meetings, which draft minutes shall be reviewed, modified and approved in writing by the JSC members within five (5) Business Days.  Such minutes shall record all proposed decisions and all actions recommended or taken, including a copy of progress reports.
 
4.2.5   If the JSC cannot reach unanimous agreement on any particular matter properly before it, then such matters requiring resolution shall be referred to the Chief Executive Officer of CEL-SCI or equivalent position or his or her nominee, and the Chief Executive Officer of Ergomed or equivalent position or his or her nominee, for resolution, who together shall use reasonable and good faith efforts to resolve such matters within thirty (30) days of the date such matters are referred to them for resolution.  If the Parties still fail to resolve the matter so referred, the Party having primary responsibility for the related activity, as stipulated in the Agreement, will have the right to break the deadlock unilaterally except as provided in Section 4.3. below.

4.3  
The specific decision to which the provision from Section 4.2.5. does not apply are:

 
4.3.1  
changes to the Co-Development Program 2 including any extension of the scope of work therefore. If, following the meeting of Chief Executive Officers
 
of CEL-SCI and Ergomed, the Parties cannot agree upon such changes the Co-Development Program 2 shall continue without amendment.
 
4.3.2  
the changes to the Program Budget of the Co-Development Program 2.  If following the meeting of Chief Executive Officers of CEL-SCI and Ergomed, the Parties cannot agree upon such changes the respective Program Budget shall remain as agreed prior to such proposed change and the Co-Development Program 2 shall continue without amendment.

5  
CO-DEVELOPMENT PROGRAM

Ergomed’s performance

5.1  
Ergomed shall be responsible for carrying out its part of the Co-Development Program 2, particularly carrying out the Development, all in accordance with the MSA, and the CTO 2.  The MSA and CTO 2 shall govern the performance by Ergomed of any Clinical Trials to be carried out by Ergomed under the Co-Development Program 2.

CEL-SCI’s performance

5.2  
CEL-SCI shall be responsible for carrying out its part of the Co-Development Program 2, particularly Non-Clinical Development. Commercialization, manufacturing and IP protection of the Product, all in accordance with the MSA and this Agreement, and all solely at its own cost and expense.

6  
REVENUE SHARING

6.1  
CEL-SCI shall make payments to Ergomed for invoices submitted by Ergomed for Ergomed’s activities on the Co-Developed Clinical Trial in accordance with the MSA within the terms stipulated in the MSA and related CTO 2; provided, however, that Ergomed’s invoices pursuant to the MSA for each Co-Developed Clinical Trial in CIN Indication will be reduced by 50% (fifty percent) from the costs set forth in the MSA and the proposal attached to CTO 2 (“Ergomed Invoiced Costs 2”) until the cumulative total of such reductions reaches the Ergomed Co-Development Investment Cap CIN, following which the invoices with respect to the Co-Developed Clinical Trial for CIN Indication will be issued and payments will be made with no reduction, all in accordance with the payment schedule set forth in the MSA.  The 50% reduction described in the foregoing shall be accrued as the Ergomed Co-Development Investment CIN for the Product and shall be tracked.  Each invoice subject to the reduction shall clearly set forth, with respect to the Product, the fee schedule set forth in the MSA and CTO 2 and the relevant reduction to be applied toward the Ergomed Co-Development Investment CIN.

 
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6.2  
Notwithstanding anything in this Clause 6, in consideration for the applicable Ergomed Total Co-Development Investment, CEL-SCI shall pay to Ergomed an agreed percentage of any Net Income received by CEL-SCI for the Product in the Field in the Territory in the amount of 5% (five percent) of such Net Income until the total amount paid to Ergomed under this Section reaches four times (4x) Ergomed Total Co-Development Investment.

6.3  
It is noted that Ergomed and CEL-SCI are jointly developing the Product for several Indications governed in two separate co-development agreements. The Ergomed Total Co-Development Investment shall be accrued collectively through the efforts in all Indications and the Revenues described in section 6.2 calculated on the basis of the Ergomed Total Co-Development Investment. As an illustration and for clarity, in the event that Ergomed invests $10 million in Head and Neck Cancer, and $3 million in CIN, the Total Ergomed Co-Development Investment will be $13 million and the maximum total Ergomed revenue will be $52 million, received from all Net Income from all Product sales from either or both Head and Neck Cancer and CIN.
 
6.4  
Any payments under Clause 6.2 shall be due and payable by CEL-SCI to Ergomed within sixty (60) days from the date on which CEL-SCI actually records or receives the Net Income; provided, however, that CEL-SCI may, in its sole discretion, pay all or any portion of the amounts owed to Ergomed under this Agreement or any other co-development agreement for the Product at any time prior to CEL-SCI’s receipt of the relevant Net Income.

6.5  
Records Retention; Audit

6.5.1  
Ergomed shall keep or cause to be kept full, true and accurate records and books of account in accordance with internationally accepted accounting principles that, in reasonable detail, fairly reflect Ergomed’s program costs and the Ergomed Co-Development Investment for the Product.  Such books and records shall be maintained by Ergomed for three (3) Years following the end of the Year to which they pertain.

6.5.2  
Upon the written request of CEL-SCI (the “Requesting Party”), Ergomed (the “Disclosing Party”) shall permit a certified public accountant, or a person possessing similar professional status and associated with an independent accounting firm reasonably acceptable to the Requesting Party, to inspect during regular business hours and no more than once a Year and going back no more than three (3) Years following the end of the Year to which they pertain, all or any part of the records and books necessary to verify such invoices and reports.  The accounting firm shall enter into appropriate obligations with the Disclosing Party to treat all information it receives during its inspection in confidence.  The accounting firm shall disclose to the Parties only whether such invoices and reports are correct and details concerning any discrepancies, but no other information shall be disclosed to the Requesting Party.  The charges of the accounting firm shall be paid by the Requesting Party, except that if the Ergomed Co-Development Investment for the Product have been overstated by more than five percent (5%), the charges shall be paid by the Disclosing Party.  Ergomed shall, within forty-five (45) days after receipt of an invoice from CEL-SCI, pay to CEL-SCI the amount by which the Ergomed Co-Development Investment for the Product has been overstated, along with Interest from the date of the original invoice, and such overstated amount shall be excluded from the Ergomed Co-Development Investment for the Product.

6.6  
CEL-SCI and its Affiliates shall keep full, true and accurate records and books of account in accordance with GAAP or IFRS containing all particulars that may be reasonably necessary for the purpose of calculating the share of Net Income payable to Ergomed under this Agreement.  Such books and records shall be maintained for three (3) Years following the end of the Year to which they pertain.  Upon the written request by Ergomed, Ergomed shall have the right to instruct an independent, internationally recognized, accounting firm reasonably acceptable to CEL-SCI, to perform an audit, conducted so far as appropriate in accordance with GAAP or IFRS, as applicable, during regular business hours and no more than once a Year, as is reasonably necessary to enable such accounting firm to report to Ergomed Net Income for the period or periods requested by Ergomed going back no more than three (3) Years following the end of the Year to which the records pertain. The accounting firm shall enter into appropriate obligations with CEL-SCI to treat all information it receives during its inspection in confidence.  The accounting firm shall disclose to the Parties only whether CEL-SCI has paid to Ergomed the proper portion of Net Income with respect to the Product and details concerning any discrepancies, but no other information shall be disclosed to Ergomed.
The cost of the accountant shall be the responsibility of CEL-SCI if the audit shows that CEL-SCI has underpaid Ergomed its proper portion of Net Income by more than five percent (5%) with respect to the Product and the responsibility of Ergomed otherwise.  CEL-SCI shall, within forty-five (45) days after receipt of an invoice from Ergomed, pay to Ergomed the amount by which the portion of Net Income for the Product owed to Ergomed was underpaid, along with Interest from the date of CEL-SCI’s original receipt thereof.

6.7  
All payments made by CEL-SCI to Ergomed under this Agreement shall be made by wire transfer to the account of Ergomed that may be notified by Ergomed to CEL-SCI from time to time.

6.8  
If CEL-SCI fails to make any payment due to Ergomed hereunder on the due date for payment, without prejudice to any other right or remedy available to Ergomed, Ergomed shall be entitled to charge CEL-SCI Interest (both before and after judgment, from the date payment was originally due through the date paid) without prejudice to Ergomed’s right to receive payment on the due date.  If Ergomed overcharges CEL-SCI, without prejudice to any other right or remedy available to CEL-SCI, CEL-SCI shall be entitled to charge Ergomed Interest (both before and after judgment, from the date payment was originally made through the date refunded).

7  
WARRANTIES

7.1  
Warranties of CEL-SCI

CEL-SCI hereby represents and warrants to Ergomed as of the Effective Date that:

a)  
CEL-SCI is a company duly incorporated and validly existing under the laws of Colorado  and has the corporate power to own its assets, conduct its business as presently conducted and to enter into, and comply with its obligations under this Agreement;

 
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b)  
this Agreement has been duly authorized and executed by CEL-SCI and constitutes a valid and legally binding obligation of CEL-SCI, enforceable in accordance with its terms;

c)  
CEL-SCI is not engaged in, and so far as CEL-SCI is aware (having made no enquiry) is not threatened by, any litigation, the outcome of which might adversely affect its financial position or the execution of the rights and obligations undertaken by this Agreement;

d)  
the execution, delivery and performance by CEL-SCI of this Agreement and compliance with the provisions hereof by CEL-SCI  will not:

(i)  
violate any provision of applicable law, statute, rule or regulation or any ruling, writ, injunction, order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to CEL-SCI or any of its properties or assets;
(ii)  
conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under the organizational documents of CEL-SCI or any contract to which CEL-SCI is a party; or
(iii)  
 result in the creation of any Encumbrance of any nature granted to a Third Party upon any of the properties or assets of CEL-SCI;

e)  
With respect to the Patents set forth on Schedule  A pertaining to the Product, (i) CEL-SCI is the registered owner thereof, which rights are free of any Encumbrances, restrictions or Third Party rights, (ii) such Patents are in full force and effect, and (iii) there are no
licenses or rights to use such Patents granted by CEL-SCI to any Third Party that are in effect as of the Effective Date that are in conflict with the terms of this Agreement; and

f)  
CEL-SCI has not received any written claim from a Third Party alleging that the manufacture or commercialization of the Product infringes a Patent of such Third Party; and

g)  
CEL-SCI has obtained all necessary corporate approvals, including but not limited to the Board approval, and has obtained the funds necessary to carry out the Co-Development Program 2.

7.2  
Warranties of Ergomed

Ergomed hereby represents and warrants to CEL-SCI as of the Effective Date that:

a)  
Ergomed is a company duly incorporated and validly existing under the laws of the United Kingdom and has the corporate power to own its assets, conduct its business as presently conducted and to enter into, and comply with its obligations under this Agreement;

b)  
this Agreement has been duly authorized and executed by Ergomed and constitutes a valid and legally binding obligation of Ergomed, enforceable in accordance with its terms;

c)  
Ergomed is not engaged in, and so far as Ergomed is aware (having made no enquiry) is not threatened by, any litigation, the outcome of which might adversely affect its financial position or the execution of the rights and obligations undertaken by this Agreement; and

d)  
the execution, delivery and performance by Ergomed of this Agreement and compliance with the provisions hereof by Ergomed will not:

(i)  
violate any provision of applicable law, statute, rule or regulation or any ruling, writ, injunction, order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to Ergomed or any of its properties or assets;
(ii)  
conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute (with notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under the organizational documents of Ergomed or any contract to which Ergomed is a party; or
(iii)  
result in the creation of any Encumbrance of any nature granted to a Third Party upon any of the properties or assets of Ergomed.

8  
PARTICULAR COVENANTS

8.1  
Positive covenants

8.1.1  
Each Party shall inform the other Party of all relevant information which may be significant for the Product that the other Party has a need to know in connection with the Co-Development Program which it receives or develops independently of the other Party. This shall be accomplished through representatives on the JSC.

 
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9  
CONFIDENTIALITY

5.1.  
The Parties agree that the MSA shall govern with respect to “Confidential Information” (as defined in the MSA) that may be exchanged between the Parties under the MSA.  Any Confidential Information of either Party (as defined below) that may be exchanged between the Parties under this Agreement and except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that, during the validity of the Agreement and for ten (10) years thereafter, the receiving Party (the “ Receiving Party ”) shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as permitted under, or required to perform its obligations under, this Agreement any financial information and materials furnished to it by the other Party (the “ Disclosing Party ”) pursuant to this Agreement (collectively, “ Confidential Information ”), except to the extent that it can be established by the Receiving Party that such Confidential Information:

●  
was already known to the Receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party;
 
●  
was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;
 
●  
became generally available to the public or otherwise part of the public domain after its disclosure to the Receiving Party and other than through any act or omission of the Receiving Party in breach of this Agreement;
 
●  
was disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or
 
●  
was subsequently developed by the Receiving Party without the aid, use or application of the Disclosing Party’s Confidential Information as demonstrated by competent written records.

5.2.  
Authorized Disclosure .  Each Receiving Party may disclose the Disclosing Party’s Confidential Information hereunder to the extent such disclosure is reasonably necessary in prosecuting or defending litigation or complying with applicable governmental regulations, provided that if a Receiving Party is required by law or regulation to make any such disclosure of the Disclosing Party’s Confidential Information it will, where permitted by law, give reasonable advance written notice to the other Party of such disclosure requirement and will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed.  In addition, each Receiving Party shall be entitled to disclose, under obligations of confidentiality substantially as protective as this Article 9, the Disclosing Party’s Confidential Information to its Affiliates, consultants, clinical investigators, potential permitted sublicensees and other Third Parties only for any purpose provided for in this Agreement.

5.3.  
Return of Confidential Information .  Upon the termination or expiration of this Agreement, any and all Confidential Information of a Disclosing Party possessed in tangible form by the Receiving Party, its Affiliates or any of their officers, directors, employees, agents or consultants shall, upon written request of the Disclosing Party, be immediately returned to the Disclosing Party (or destroyed if so requested) and not retained by the Receiving Party, its Affiliates or any of their officers, directors, employees, agents or consultants, provided that, each Receiving Party shall be entitled to retain any Confidential Information of the Disclosing Party that is reasonably required to exercise its rights under Clause 6 for so long as such rights survive. Notwithstanding the foregoing, each Receiving Party may retain one (1) copy of any Confidential Information of the Disclosing Party in appropriately secure legal files solely for record-keeping purposes.

 
9.4.
Public Disclosure; Use of Name .  Except as required by an order from a court or governmental body, applicable law or regulation neither Party shall use the name of the other Party in any publicity or advertising without the prior written approval of the other Party, except that either Party may disclose the existence, but not the terms or conditions (including information contained in any Exhibit hereto), of this Agreement.  Notwithstanding the foregoing, in the event that either Party seeks to disclose the terms of this Agreement in any legally required filing, such Party shall provide prompt written notice to the other Party and use reasonable efforts to maintain the confidential treatment of the material terms of this Agreement to the extent reasonably possible, provided however that COMPANY may disclose the details of the Agreement in public filings to the Securities Exchange Commission (SEC) and the New York Stock Exchange (NYSE).

10.  
ASSIGNMENT

10.1.  
This Agreement may not be assigned, transferred or subcontracted by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that either Party may assign this Agreement, in whole or in part, without the other Party’s consent to an Affiliate, or in connection with a merger, consolidation, acquisition or a sale or transfer of all or substantially all of such Party’s assets to which this Agreement relates.

10.2.  
Each Party shall as soon as practicable notify the other Party of an assignment to an Affiliate or of a Change of Control and shall provide the other Party with information reasonably requested by such Party with respect to such Affiliate or acquirer.  “Change of Control” means:  (a) the acquisition by any third party of beneficial ownership of fifty percent (50%) or more of the then-outstanding common shares or voting power of a Party; or (b) the consummation of a business combination involving a Party, unless, following such business combination, the stockholders of a Party immediately prior to such business combination beneficially own directly or indirectly more than fifty percent (50%) of the then-outstanding common shares or voting power of the entity resulting from such business combination.  Any assignment not in accordance with the foregoing shall be void.

11.  
PRESS RELEASES

11.1.  
The Parties will not publicly disclose the nature or existence of this Agreement, through press releases, a web site, brochures, or written materials of any kind, unless differently agreed by both Parties in writing or unless required by the law or by the rules of any stock exchange which apply to a Party.

 
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12.  
NOTICES

12.1.  
Any notices required or to be sent hereunder shall be in writing and delivered personally or sent by fax or mail or e-mail, at the sender’s choice. Notices delivered to the addresses, fax numbers or e-mail addresses indicated below (or such other address, fax number or e-mail address of which the receiving Party had notified the other Party in writing, in accordance with the procedures of this Section 12.1, at least 8 (eight) days prior to such delivery) shall be considered validly delivered and shall be considered received on the date of actual receipt; provided, however, that notices sent by fax shall be deemed given as of the date sent by fax properly addressed and transmitted.

FOR CEL-SCI:
 
CEL-SCI Corporation
8229 Boone Boulevard,
Suite 802,
Vienna, VA 22182, USA
Attention: Geert Kersten
Fax: (703) 506-9471
grkersten@cel-sci.com

FOR Ergomed:

Ergomed Clinical Research Ltd.
c/o Ergomed Istraživanja, d.o.o.
Oreškovićeva 20A
10000 Zagreb, Croatia
Attn. Dr. Miroslav Reljanović
miroslav.reljanovic@ergomed-cro.com
with copy to neil.clark@ergomed-cro.com

13.  
TERM AND TERMINATION

  13.1
The term of this Agreement shall commence on the Effective Date and shall expire on the date on which both Parties have fulfilled all of their obligations contemplated herein. For the avoidance of doubt, the Agreement cannot be terminated by either of the Parties prior to its expiration unless specifically and expressly stipulated in the Agreement or unless agreed in writing by both Parties.

13.2  
For the sake of clarity, the Parties agree and acknowledge that the expiration or termination of this Agreement shall not affect in any way the validity of the MSA or any of the relevant CTOs therein, which shall, to the extent applicable, continue in full force and effect unless terminated pursuant to the relevant clauses in the MSA or such CTO.

13.3  
In case that either the MSA and / or any relevant CTO thereunder are terminated, this Agreement shall continue to apply to the Parties taking into account such fact of termination of MSA and / or the CTO and performance on any obligations of the Parties directly and solely related to the obligations under the MSA or the CTO shall no longer be required from either of the Parties. For the avoidance of doubt, in this case, the provisions stipulated in Sections 6, 9, 12 and 14 herein shall remain in full force and effect.

14  
DISPUTE RESOLUTION AND GOVERNING LAW

14.1  
General .   The Parties recognize that disputes as to certain matters may from time to time arise which relate to either Party’s rights and/or obligations hereunder.  It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual dialogue and cooperation and, to extent possible, without resort to litigation.  To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 14 if and when a dispute arises under this Agreement.

14.2  
Senior Management .  Any disputes relating to this Agreement shall be first referred to the Chief Executive Officer of CEL-SCI and the Chief Executive Officer of Ergomed, or their respective senior-level designees, for resolution through good faith negotiations.  In the event that such executives, or their respective designees, cannot resolve the dispute within thirty (30) days of being requested by a Party to resolve a dispute, either Party may, by written notice to the other, invoke the provisions of Section 14.3 hereinafter.
 
 
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Mediation .   The Parties agree that any dispute, controversy or claim (except as to any issue relating to Confidential Information or intellectual property owned in whole or in part by Ergomed or CEL-SCI or any equitable claim) arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall be resolved through mediation and binding arbitration.  If a dispute arises out of or relating to this Agreement between the Parties, and if such dispute cannot be resolved pursuant to Section 14.2 above, the Parties agree to try in good faith to resolve such dispute by mediation administered by the American Arbitration Association (AAA) in accordance with its Mediation Rules.  Such mediation shall take place in New York, New York if personal appearance is required.

14.3  
Arbitration .  If efforts at mediation pursuant to Section 14.3 are unsuccessful within sixty (60) days after the date that one Party notifies the other Party that it desires to resolve a dispute, controversy or claim through mediation, any unresolved dispute, controversy or claim between the Parties shall be resolved by binding arbitration in accordance with the International Arbitration Rules of the American Arbitration Association, by 1 (one) arbitrator appointed pursuant to such Rules, except as modified herein. A reasoned arbitration decision shall be rendered in writing within six (6) months of the conclusion of mediation and shall be binding on the Parties.  The prevailing Party may enter such decision in any court having competent jurisdiction.  The mediation and arbitration proceedings shall be conducted in the English language and shall be held in   New York, New York.  The Parties agree that they shall share equally the cost of the mediation and arbitration filing and hearing fees, and the cost of the mediator/arbitrator, except to the extent otherwise determined by the arbitrators.  Each Party must bear its own attorneys’ fees and associated costs and expenses, except to the extent otherwise determined by the arbitrators.

14.4  
Injunctive Relief, Collection of Amounts Due and Express Dispute Resolution Provisions .  Notwithstanding the foregoing provisions of this Article 14, (a) either Party will have the right to seek injunctive relief and/or collection of any undisputed amount due under this Agreement in any court of competent jurisdiction as may be available to such Party under the laws and rules applicable in such jurisdiction, and (b) the provisions of Sections 14.1-14.4 shall not apply with respect to any decision described in Section 4.3.

14.5  
Governing Law .  This Agreement and all disputes thereof shall be governed by and construed in accordance with the substantive laws of the State of New York, USA other than any principle of conflict or choice of laws that would cause the application of the laws of any other jurisdiction.

15  
FINAL PROVISIONS

15.1  
If any provision of this Agreement should be deemed invalid or legally unenforceable, such provision shall not affect the validity and/or enforceability of any other provision(s) of this Agreement or the Agreement as a whole. The Parties shall, in such case, replace the invalid provision with a valid one that best expresses their original intent.

15.2  
This Agreement (which includes its Schedules) and the MSA and the relevant CTO 2 to be entered into  thereunder contain the entire and only agreement between the Parties with respect to the subject of the Agreement and wholly cancel, terminate and supersede any agreement or agreements, formal or informal, oral or written heretofore entered into pertaining to the subject matter, including the Confidentiality, Non-Disclosure and Non-Solicitation Agreement between the parties dated as of December 11, 2012. Notwithstanding the foregoing, the Parties agree and acknowledge that the Co-Development and Revenue Sharing Agreement dated April 19, 2013 for the Head & Neck Cancer Indication, the MSA and the CTO I thereunder, as each and every one of these may be amended from time to time shall survive the execution of this Agreement and continue in full force and effect in the full text stipulated by the Parties.
15.3  
If a Party (the “Affected Party”) is unable to carry out any of its obligations under this Agreement due to Force Majeure this Agreement shall remain in effect but the Affected Party’s relevant obligations under this Agreement and the corresponding obligations of the other Party (“Non-Affected Party”) under this Agreement, shall be suspended for a period equal to the circumstance of Force Majeure provided that:

15.3.1  
the suspension of performance is of no greater scope than is required by the Force Majeure;

15.3.2  
the Affected Party immediately gives the Non-Affected Party prompt written notice describing the circumstance of Force Majeure, including the nature of the occurrence and its expected duration, and continues to furnish regular reports during the period of Force Majeure and notifies the Non-Affected Party immediately of the cessation of the Force Majeure;

15.3.3  
the Affected Party uses all reasonable efforts to remedy its inability to perform and to mitigate the effects of the circumstance of Force Majeure; and

15.3.4  
as soon as practicable after the event which constitutes Force Majeure the Parties discuss how best to continue their operations as far as possible in accordance with this Agreement.

15.4  
The status of each Party under this Agreement shall be that of an independent contractor. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or agency relationship between the Parties or as granting either Party the authority to bind or contract any obligation in the name of or on the account of the other Party or to make any statements, representations, warranties or commitments on behalf of the other Party.  All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.

15.5  
This Agreement is written and executed in the English language.

15.6  
Any amendment or modification of this Agreement must be in writing and signed by authorized representatives of both Parties.

 
12

 
15.7  
A Party’s failure to enforce, at any time or for any period of time, any provision of this Agreement, or to exercise any right or remedy shall not constitute a waiver of that provision, right or remedy or prevent such Party from enforcing any or all provisions of this Agreement and exercising any rights or remedies.  To be effective any waiver must be in writing.  All rights and remedies are cumulative and do not exclude any other right or remedy provided by law or otherwise available.

15.8  
The provisions of this Agreement are for the sole benefit of the Parties and their successors and permitted assigns, and they shall not be construed as conferring any rights in any other Persons except as otherwise expressly provided. Except as expressly provided herein, no person who is not a party to this Agreement (including any employee, officer, agent, representative or subcontractor of either Party) shall have the right to enforce any term of this Agreement which expressly or by implication confers a benefit on that person without the express prior agreement in writing of the Parties, which agreement must refer to this Clause 15.8.

15.9  
Each Party shall perform all further acts and things and execute and deliver such further documents as may be necessary or as the other Party may reasonably require to implement or give effect to this Agreement.
15.10  
Except as otherwise expressly provided in this Agreement, each Party shall pay the fees and expenses of its respective lawyers and other experts and all other expenses and costs incurred by such Party incidental to the negotiation, preparation, execution and delivery of this Agreement.

15.11  
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall be deemed to constitute one and the same instrument.  An executed signature page of this Agreement delivered by facsimile transmission shall be as effective as an original executed signature page.  Signatures to this Agreement transmitted by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the originals graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signatures, and shall be deemed original signatures by both Parties.

15.12  
In construing this Agreement, unless expressly specified otherwise, (a) except where the context otherwise requires, use of any gender includes any other gender, and use of the singular includes the plural and vice versa; (b) any list or examples following the word “including” shall be interpreted without limitation to the generality of the preceding words; and (c) each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof.  In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions.
 
[Remainder of Page Intentionally Left Blank]

 
 
13

 

The Parties have indicated their acceptance of the terms of this Agreement by the signatures set forth below.  Each individual signing on behalf of a corporate entity hereby personally represents and warrants his or her legal authority to legally bind that entity.

CEL-SCI CORPORATION
   
ERGOMED CLINICAL RESEARCH LTD
 
         
/s/Geert Kersten
   
/s/ Dr. Miroslav Reljanovic
 
Print Name: Geert Kersten
   
Print Name: Dr. Miroslav Reljanovic
 
Title: Chief Executive Officer
   
Title: Chief Financial Officer
 
 
 
 
 
14

 
 

 
SCHEDULE A – CEL-SCI PATENTS

 




15


Exhibit 10(xx)
 
FIRST AMENDMENT TO CO-DEVELOPMENT AGREEMENT
 
This First Amendment (“First Amendment”) to the Co-Development Agreement II and Revenue Sharing Agreement (“Co-Development Agreement II”) made on October 24, 2013, between CEL-SCI Corporation, a company duly established pursuant to the laws of Colorado, with the registered office at 8229 Boone Boulevard, Suite 802, Vienna, VA, 22182, USA (hereinafter: “CEL-SCI”) and Ergomed Clinical Research, Ltd., a company duly established pursuant to the laws of England, with registered offices at  The Surrey Technological Centre, 40 Occam Road, Guildford, Surrey, GU2 7YG, England (hereinafter: “Ergomed”) is effective as of October 24, 2013.
 
INTRODUCTION
 
WHEREAS, the parties have entered into and are operating under the Co-Development Agreement II dated October 24, 2013, and into the Masters Services Agreement dated April 19, 2013 (“MSA”);
 
WHEREAS, the Co-Development Agreement II contemplate the development of the Product in the CIN Indication by the parties; and
 
WHEREAS, CEL-SCI and Ergomed wish to amend the Co-Development Agreement II to add additional indication(s) and to include the additional clinical trial(s) as a further exhibit to the MSA, under the terms and conditions set forth herein;
 
NOW THEREFORE, for and in consideration of the mutual covenants contained in this First Amendment, the Parties agree that:
 
1.  
Definitions .  Unless otherwise defined or amended by the terms of this First Amendment, all initial capitalized defined terms used have the meanings as defined in the Co-Development Agreement II.
 
2.  
A Definition of “Indications” shall be amended to read: ““Indications” – shall mean all of the indications together: Head and Neck Cancer, Anal Intraepithelial Neoplasia and Cervical Intraepithelial Neoplasia, for which the Product will be developed under any of the co-development agreements between the Parties for such Product; “other Indication(s)” shall mean any remaining Indication(s) not specifically referred to in any respective sentence in the Agreement.”

3.  
Section 3.1. shall be amended to read: “Subject to the conclusion of CTO 2 and with respect to the Product Development in CIN Indication, Ergomed shall invest up to $3 million towards the clinical and regulatory costs determined in the Co-Development Program 2 for the execution of the Co-Developed Clinical Trial(s) for the Product in CIN Indication (the actual amount of such investment, determined in accordance with Section 6) (“Ergomed Co-Development Investment CIN”). The total of Ergomed investment into the Development of the Product in all Indications shall be referred to hereinafter as “Ergomed Total Co-Development Investment”). The Ergomed Co-Development Investment CIN shall not exceed US$3,000,000 (three million dollars) for Product Development in CIN Indication (the “Ergomed Co-Development Investment Cap CIN”) and shall not exceed US$16,000,000
(sixteen million dollars) for Product Development in all Indications together (“the Ergomed Total Co-Development Investment Cap”).”

4.  
A Section 6.3. shall be amended to read: “It is noted that Ergomed and CEL-SCI are jointly developing the Product for several Indications governed in three separate co-development agreements. The Ergomed Total Co-Development Investment shall be accrued collectively through the efforts in all Indications and the Revenues described in section 6.2 calculated on the basis of the Ergomed Total Co-Development Investment. As an illustration and for clarity, in the event that Ergomed invests $10 million in Head and Neck Cancer, $3 million in AIN and $3 million in CIN, the Total Ergomed Co-Development Investment will be $16 million and the total Ergomed revenue will be $64 million, received from all Net Income from all Product sales.”

5.  
Except as amended by this First Amendment, the Co-Development Agreement II shall remain in full force and effect.  After the date of this First Amendment, every reference to the Co-Development Agreement II shall mean such agreement as amended by this First Amendment.
 
[Remainder of page intentionally left blank.]
 
 
1

 
 
IN WITNESS WHEREOF, the Parties have entered into this First Amendment as of the date first written above.

 
CEL-SCI
 
By: /s/ Geert Kersten                                               
 
Name: Geert Kersten
 
Title: Chief Executive Officer
 

 
ERGOMED CLINICAL RESEARCH LIMITED
 
By: /s/ Dr. Miroslav Reljanovic                                                       
 
Name: Dr. Miroslav Reljanovic
 
Title: Chief Financial Officer
 

 
 
 
2

 
 
SECOND AMENDMENT TO CO-DEVELOPMENT AGREEMENT
 
This Second Amendment (“Second Amendment”) to the Co-Development Agreement and Revenue Sharing Agreement (“Co-Development Agreement”) made on April 19, 2013, as amended on October 24, 2013 between CEL-SCI Corporation, a company duly established pursuant to the laws of Colorado, with the registered office at 8229 Boone Boulevard, Suite 802, Vienna, VA, 22182, USA (hereinafter: “CEL-SCI”) and Ergomed Clinical Research, Ltd., a company duly established pursuant to the laws of England, with registered offices at  The Surrey Technological Centre, 40 Occam Road, Guildford, Surrey, GU2 7YG, England (hereinafter: “Ergomed”) is effective as of October 24, 2013.
 
INTRODUCTION
 
WHEREAS, the parties have entered into and are operating under the Co-Development Agreement dated April 19, 2013, as amended by the First Amendment to the Co-Development Agreement dated October 24, 2013and into the Masters Services Agreement dated April 19, 2013 (“MSA”) and into the CTO I dated April 19, 2013;
 
WHEREAS, the Co-Development Agreement, MSA and CTO I contemplate the development of the Product in the Head and Neck Cancer Indication by the parties; and
 
WHEREAS, CEL-SCI and Ergomed wish to amend the Co-Development Agreement to add additional indication(s) and to include the additional clinical trial(s) as a further exhibit to the MSA, under the terms and conditions set forth herein;
 
NOW THEREFORE, for and in consideration of the mutual covenants contained in this Second Amendment, the Parties agree that:
 
6.  
Definitions .  Unless otherwise defined or amended by the terms of this Second Amendment, all initial capitalized defined terms used have the meanings as defined in the Co-Development Agreement.
 
7.  
A Definition of “Indications” shall be amended to read: ““Indications” – shall mean all of the indications together: Head and Neck Cancer, Anal Intraepithelial Neoplasia and Cervical Intraepithelial Neoplasia, for which the Product will be developed under any of the co-development agreements between the Parties for such Product; “other Indication(s)” shall mean any remaining Indication(s) not specifically referred to in any respective sentence in the Agreement.”

8.  
Section 3.1. shall be amended to read: “With respect to the Product Development in Head and Neck Indication, Ergomed shall invest up to $10 million towards the clinical and regulatory costs determined in the Co-Development Program for the execution of the Co-Developed Clinical Trial for the Product in Head and Neck Indication in Europe, Russia and India (the actual amount of such investment, determined in accordance with Section 6) (“Ergomed Co-Development Investment H&N”). The total of Ergomed investment into the Development of the Product in all Indications shall be referred to hereinafter as “Ergomed Total Co-Development Investment”. The Ergomed Co-Development Investment H&N shall not exceed US$10,000,000 (ten million dollars) for Product Development in H&N Indication
(the “Ergomed Co-Development Investment Cap H&N”) and shall not exceed US$16,000,000 (sixteen million dollars) for Product Development in all Indications together (“the Ergomed Total Co-Development Investment Cap”).

9.  
A Section 6.3. shall be amended to read: “It is noted that Ergomed and CEL-SCI are jointly developing the Product for several Indications governed in three separate co-development agreements. The Ergomed Total Co-Development Investment shall be accrued collectively through the efforts in all Indications and the Revenues described in section 6.2 calculated on the basis of the Ergomed Total Co-Development Investment. As an illustration and for clarity, in the event that Ergomed invests $10 million in Head and Neck Cancer, $3 million in AIN and $3 million in CIN, the Total Ergomed Co-Development Investment will be $16 million and the total Ergomed revenue will be $64 million, received from all Net Income from all Product sales.”

10.  
Except as amended by this Second Amendment, the Co-Development Agreement shall remain in full force and effect.  After the date of this Second Amendment, every reference to the Co-Development Agreement shall mean such agreement as amended by this Second Amendment.
 
[Remainder of page intentionally left blank.]
 
 
3

 
 
IN WITNESS WHEREOF, the Parties have entered into this Second Amendment as of the date first written above.

 
CEL-SCI
 
By: /s/ Geert Kersten
 
Name: Geert Kersten
 
Title: Chief Executive Officer
 

 
ERGOMED CLINICAL RESEARCH LIMITED
 
By: /s/ Dr. Miroslav Reljanovic
 
Name: Dr. Miroslav Reljanovic
 
Title: Chief Financial Officer
 

 
4

Exhibit 10(yy)
 
 
 
 

MASTER SERVICES AGREEMENT

This Master Services Agreement (the “Agreement”) is made and entered into on  26 September 2012, (the “Effective Date”), by and between CEL-SCI Corporation , with offices at 8229 Boone Boulevard, Suite 802, Vienna, VA 22182, USA (hereinafter referred to as “Client”) and Aptiv Solutions, Inc. , together with its Affiliates, with offices at 1925 Isaac Newton Square, Suite 100, Reston, Virginia 20190 (hereinafter referred to as “Aptiv Solutions”), both hereinafter referred as a “Party” or collectively as the "Parties".

Aptiv Solutions is engaged in the business of providing services related to the implementation and management of clinical development programs for the pharmaceutical, biotechnology and medical device industries; and

Client desires to engage Aptiv Solutions to perform such services in connection with certain pharmaceutical products   under development by or under control of Client;

Therefore, in consideration of the premises and mutual promises and undertakings herein, the receipt and sufficiency of which are hereby acknowledged, the Parties intending to be legally bound do hereby agree as follows:

1.0
Definitions

a.  
Affiliates :  With respect to either Party, an Affiliate is a ny entity that is controlled by, controls, or is under common control with the Party named above.

b.  
Amendment :  A written specification of changes to a Project Agreement that is agreed to by the Parties and authorized by signature of each Party’s authorized representative(s), in a format substantially similar to Exhibit B attached hereto.

c.  
Budget for Services : A component of a Project Agreement that delineates the estimated cost of the Services based upon the Project Specifications.

d.  
Institutional Review Board (“IRB”) :  Any board, committee, or other group formally designated by an institution to review, to approve the initiation of, and to conduct periodic review of, biomedical research involving human subjects.  The primary purpose of such review is to assure the protection of the rights and welfare of human subjects.  The term has the same meaning as the phrase institutional review committee, independent ethics committee or ethics committee.

e.  
GCP or Good Clinical Practice : The standard defined in the ICH Harmonised Tripartite Guideline For Good Clinical Practice E6(R1) Current Step 4 version dated 10 June 1996 (including the Post Step 4 corrections) together with, for Services performed in the European Union, such other Good Clinical Practice requirements as are specified in Directive 2001/20/EC of the European Parliament and the Council of 4 April 2001 relating to medicinal products for human use and in guidance published by the European Commission pursuant to such Directive; and for Services performed in other jurisdictions, any analogous laws and/or regulations.
 
 
1

 
 
f.  
Institution : Any public or private entity or agency or medical or dental facility where clinical trials are conducted.

g.  
Investigator(s) : A person or persons responsible for the conduct of the clinical trial at a Trial Site. If a trial is conducted by a team of individuals at a Trial Site, the Investigator is the responsible leader of the team and may be called the principal investigator.

h.  
Milestone :  An event associated with a specific date, for which a payment will be due, as set out in the Payment Schedule of any Project Agreement.

i.  
Pass-Through Budget : A component of a Project Agreement that outlines the estimated costs of Pass Through Expenses for goods and services incurred by Aptiv Solutions on behalf of Client, in connection with the performance of the Services.

j.  
Payment Schedule :  A component of a Project Agreement that describes the timing of payments due to be made for Services delivered and Pass Through Expenses incurred.

k.  
Aptiv Solutions Project Manager : The Aptiv Solutions representative assigned to lead the Aptiv Solutions project team, act as the principal liaison between Aptiv Solutions and Client, and provide general oversight in the delivery of Services with regard to a specific Project Agreement.

l.  
Project Agreement : A written specification of Services to be performed by Aptiv Solutions under this Agreement, including the Project Specifications, Project Schedule, Contact Information, Budget for Services, Pass-Through Budget, and Payment Schedule

m.  
Project Schedule : A component of a Project Agreement that outlines the project milestones, estimated timelines and completion date for the Services based upon the Project Specifications.

n.  
Project Specifications : A component of a Project Agreement that outlines the specific Services to be provided, assumptions used in preparing the Budget for Services, Pass-Through Budget and Project Schedule, and assignment of project-related responsibilities between the Parties.

o.  
Services : The services to be provided by Aptiv Solutions and its Subcontractors (if applicable) under this Agreement as specifically outlined in a Project Agreement or otherwise authorized by Client.

p.  
Study : A clinical trial performed at one or more investigative sites under the supervision of one or more Investigator(s) pursuant to a study protocol.

q.  
Subcontractor : An individual or company engaged by Aptiv Solutions to conduct some elements of a Project Agreement, including without limitation, clinical laboratories, patient recruitment services, interactive voice recognition systems and other services.

r.  
Trial Site(s) : The location(s) where trial-related activities are actually conducted.
 
 
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2.0  
SERVICES

Aptiv Solutions, itself or through one of its Affiliates or Subcontractors (if applicable), will perform the Services as specified in this Agreement and any associated Project Agreement(s), in accordance with the terms and conditions of this Agreement.  Aptiv Solutions will use reasonable efforts to perform the Services described in any Project Agreement issued hereunder and to meet all obligations and deadlines described in such Project Agreements.  The Parties will agree on all Services to be provided and the performance of those Services will be authorized in writing through the execution of a Project Agreement.  Aptiv Solutions will not begin work on any Services without an agreement in writing.

Client will have the overall responsibility for the studies at all times and will manage all study related tasks which have not been specifically delegated to Aptiv Solutions as described in each Project Agreement.  Client will, at its expense and as applicable, supply the drug for the timely completion of the clinical studies described in each Project Agreement.  Client agrees to keep Aptiv Solutions fully informed at all times of relevant information known to Client which might influence the conduct of the study and the provision of Services.

Client acknowledges that Aptiv Solutions will require documents, drug supplies, data, records and cooperation by Client, investigators, and/or third party suppliers in order to properly perform the Services, and that Aptiv Solutions will not be liable for the failure of Client or any third party involved in a Study to supply such information or data to Aptiv Solutions.

All responsibility for the conduct of the study will remain with Client as defined in 21 CFR 312.52 or Directive 2001/20/EC, as applicable.
 
2.1
Project Agreements

Aptiv Solutions will provide Services as specified in one or more Project Agreements, which will be prepared in a format substantially similar to the Form of Project Agreement, attached hereto as Exhibit A.  Each Project Agreement will include detailed information with respect to a specific project, including Project Specifications, Project Schedule, Budget for Services, Pass-Through Budget, and Payment Schedule.  Project Agreements will become effective when signed by an authorized representative or representatives of both Parties as directed by the Project Agreements.

2.2
Amendments

Any changes to a Project Agreement, including but not limited to changes to the Project Specifications, Project Schedule, Budget for Services or Pass-Through Budget, will be agreed upon by the Parties and documented in an Amendment to the Project Agreement in a form substantially similar to that attached hereto as Exhibit B.  Client agrees that Aptiv Solutions will not perform any out-of-scope work described in an Amendment until it is approved in writing by both Parties.

a.  
Unanticipated Changes .  Client agrees that some changes in costs associated with clinical research resulting from, for example, changes to Project Specifications resulting from modifications to the study protocol, delays in receipt of study drugs from Client, changes in amounts charged by third party suppliers or poor subject enrollment due to changes in clinical practices, cannot be reasonably anticipated in advance. Upon identification by either Party of changes to the project assumptions or other unanticipated changes to the Project Specifications, the Parties will negotiate in good faith an Amendment to accommodate increases or decreases to the Project Budget, Project Schedule or Payment Schedule that are reasonably associated with any such adjustments.  Amendments will be documented in accordance with the terms of this Section 2.2.  Such unanticipated changes may include, but are not limited to, any of the following:

i.  
delays in receiving from Client technical information or Client's acceptance of documents submitted by Aptiv Solutions in the performance of its duties under this Agreement or any Project Agreement, or any other delay on the part of Client;
ii.  
delay in receipt of regulatory approval from a regulatory agency, IRB or Ethics Committee;
iii.  
delay in performance by a Subcontractor not selected by Aptiv Solutions;
iv.  
delay in shipment of study drug, clinical samples and/or clinical supplies;
v.  
delay due to changes in standard of care imposed by law, regulation or changes in medical practice affecting participating sites;
vi.  
delay by reason of force majeure as defined herein;
vii.  
Client requested additional services or changes to the Services or protocol;
viii.  
delays due to questions received by either Party from regulatory agencies or ethics committees regarding submission materials that relate to characteristics of the study drug or protocol design;
ix.  
delays due to any changes in applicable law or regulatory environment; or
x.  
changes for any other reason agreed upon in writing by Client.
 
 
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2.3
Project Staffing

In performing the Services, Aptiv Solutions will assign personnel who are adequately trained, qualified and experienced to conduct the work as specified in a Project Agreement.  Client may make reasonable requests for replacement of assigned personnel for cause, such as unsatisfactory performance or interpersonal conflicts.  Aptiv Solutions will promptly respond to any such request and make reasonable efforts to correct the situation in order to improve performance, or to provide a replacement, at its own expense, within a mutually agreeable timeframe.  Aptiv Solutions will assign personnel at its sole discretion from one or more of its or its Affiliates offices located worldwide, as needed to perform the Services in accordance with the Project Agreement.

a.  
Use of Contract Employees .  Aptiv Solutions may, at its own discretion, assign some elements of the Services to contract employees.  Aptiv Solutions agrees that any contract employees used to perform the Services will be adequately qualified, experienced and trained as required to perform the Services in the same manner as Aptiv Solutions qualifies and trains its own employees.  Aptiv Solutions will remain responsible for satisfactory performance of all Services performed by contract employees.

2.4
Use of Subcontractors

Aptiv Solutions may use Subcontractors to conduct some elements of a Project Agreement.  Aptiv Solutions will notify Client in advance of its use of Subcontractors.  In the event that Client objects, for reasonable cause, to any such Aptiv Solutions Subcontractors, Aptiv Solutions will replace the Subcontractor within a mutually agreeable timeframe.

a.  
Client-Selected Subcontractors.   In the event that Client requires Aptiv Solutions to use a specific Subcontractor (hereinafter “Client Subcontractor”), Aptiv Solutions will not be responsible for the performance of the Client Subcontractor, and Client will manage the performance of the Client Subcontractor and be responsible for any delays or changes to the Project Schedule or Project Budget that result from the performance of the Subcontractor.  Aptiv Solutions will notify Client promptly of any performance issues arising out of the use of any such Client Subcontractors.  If Client engages a Client Subcontractor, but requires that Aptiv Solutions manage or oversee the performance of the Client Subcontractor, then Client will supply Aptiv Solutions with information relevant to performance of the Client Subcontractor so that Aptiv Solutions will be able to manage the performance. If Client requires that Aptiv Solutions contract with the Client Subcontractor, then Client hereby authorizes Aptiv Solutions to do so as agent on behalf of Client.  Client remains responsible for any delays or changes to the Project Schedule or Project Budget that result from the performance of the Client engaged Client Subcontractor.

b.  
Aptiv Solutions-Selected Subcontractors .  For Subcontractors selected and contracted directly by Aptiv Solutions, Aptiv Solutions will be responsible for the performance and agrees to manage the performance of the Subcontractor.   Client shall be named as a third party beneficiary in any contract with an Aptiv Solutions-Selected Subcontractor .

2.5  
Trial Site Contracts

Pursuant to an applicable Project Agreement, Client may delegate to Aptiv Solution the authority to negotiate and/or execute agreements with Trial Sites on Client's behalf as an agent of Client. Client shall approve all agreement templates and negotiation parameters prior to the initiation of negotiations with Trial Sites. When using Aptiv Solution's template, Aptiv Solutions shall submit to Client all site­ requested material changes that directly affect Client (e.g., confidentiality, intellectual property, publication rights, protocol compliance, indemnification, and inspections) and that were not previously approved, and Client shall comment on and/or approve such proposed changes within ten (10) working days. However, if the template used is not Aptiv Solution's' template, then Aptiv Solutions shall submit to Client all site-requested changes not previously approved in the relevant negotiation parameters and Client shall comment on and/or approve all such proposed changes within ten (10) working days. Client may delegate authority for final execution of agreements to Aptiv Solution as an agent of Client.
 
2.6
Applicable Standards

The Parties agree that Aptiv Solutions will provide the operational systems, processes and standard operating procedures to be used in performance of the Services unless specified otherwise in the Project Specifications. In the provision of Services under any applicable    Project    Agreement,    Aptiv    Solutions  and    its    representatives    and subcontractors  will comply with  all applicable laws,  rules and regulations applicable to the  project  in the United States,   all European, national and local laws, regulations and guidance,  all  other  laws  of  relevant  countries,  including  without  limitation:    (a)  FDA Regulations, including 21 C.F.R. Parts  11, 50,  54,  56,  58 Good Laboratory  Practices, and  312,  Good  Clinical  Practices,  HIPAA;   (b)  regulations  for  Federal  Health  Care Programs,  including the Centers for  Medicare  and  Medicaid Services; (c) The  Federal Civil  False  Claims Act  (d)  international  treaties and  standards  adopted  by the  United States governing the  protections  of human  subjects  including ICH Guidelines  and the provisions of the World Medical Association's Declaration of Helsinki (1996 version); (e) insider trading laws and regulations involving the sale or purchase of securities while in possession  of  material, non-public  information  about  Client;  and  (f)  laws,  rules  and regulations regarding kick-backs, e.g., 42 U.S.C. Sections 1320a - 7b(b) and 42 C.F.R. Part  1001, and  physician referrals, e.g., the Stark  Law, 42  U.S.C. Section  1395nn and the equivalent laws of other relevant jurisdictions.  Aptiv Solutions shall not offer or pay a bribe or offer or give a gift to a government official as prohibited under United States and   international   anti-bribery  laws.      In  addition,   Aptiv   Solutions   shall   not   offer remuneration  to  a  health  care  provider  to  induce  the  recommendation  of  a  particular product.  Moreover,  information  exchanged  under  this  Agreement  may  be  subject  to restrictions under the export control laws, rules and regulations of the government of the United   States   of   America   or   other   applicable   foreign   government   entit(y)   (ies) concerning the export of products, materials or technical information.

2.7
Client-Provided Systems

In the event that Client requires Aptiv Solutions to use Client’s information systems and associated processes, Client will be responsible for all costs associated with installation and operation of the systems, including costs for hardware and software licenses, and for training of Aptiv Solutions personnel assigned to the project in the use of Client system(s).
 
 
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3.0
PAYMENT

The Parties agree that the fees and other reimbursements that Aptiv Solutions will receive for performing the Services hereunder will be outlined in each Project Agreement and are subject to the following terms and conditions.

3.1
Compensation for Services

For Services provided, Client will pay Aptiv Solutions in accordance with the terms in this section of the Agreement and each applicable Project Agreement.  Each Project Agreement will include a Budget for the Services to be performed by Aptiv Solutions and will include the costs related to the Services to be provided.  Aptiv Solutions will not exceed the total cost outlined in the Budget for Services without the prior approval of Client, unless specifically authorized by an Amendment, as set out in Section 2.2 above. Client agrees that the Budget for Services presented in each Project Agreement is an estimate based upon the Project Specifications and Project Schedule.

Aptiv Solutions acknowledges that Client relies on the expertise of Aptiv Solutions to provide the Services described in each Project Agreement. Aptiv Solutions will use all commercially reasonable efforts to achieve the milestones and performance metrics.

3.2
Pass-Through Budget

a.  
Pass-Through Expenses.   Pass Through Expenses, include, but are not limited to investigator fees, central labs, packaging and distribution of medication, printing and distribution of Case Report Forms, Institutional Review Board submission fees, incurred by Aptiv Solutions in the conduct and performance of the Services will be passed on to Client for payment

b.  
In order to provide funding for Pass Through Expenses, exclusive of investigator fees described below, Client will make an advance payment to Aptiv Solutions of an amount described in the Project Agreement, at such time as shall be delineated in the Project Agreement.  Aptiv Solutions will submit to Client monthly invoices for amounts incurred during the relevant billing period.  The advance payment will be credited against invoices, to reflect  payments  made  to  vendors,  suppliers  or  for  other  pass  through costs  during the  invoicing period.   At the completion of the Services a reconciliation of expenses will be done to ensure that Client pays for only those expenses actually incurred. The remaining advance payment, if any, will then be applied to the final invoice, if unpaid, and any remaining advance payment will be refunded to Client within thirty (30) days from the date of the final reconciliation .

c.  
Client will reimburse all travel expenses in accordance with Aptiv Solutions’ applicable Travel and Expense Policy (to be provided upon request), as shown on monthly invoices.  Each invoice will include, as necessary, a summary of all Pass through Expenses.
 
3.3           Investigator Fees and Reconciliation.

 
In order to provide for timely payments to Investigators, Client will make an advance payment to Aptiv Solutions of such amounts as are delineated in the Project Agreement. Aptiv Solutions will submit to Client monthly invoices in advance for estimated amounts to be paid to Investigators to be incurred in the upcoming quarter to ensure that adequate funds are available to pay such expenses.  Client agrees that Aptiv Solutions will not make payments to Investigators without sufficient funds available.  The advance payment will be retained by Aptiv Solutions until the completion of the Services, at which time a reconciliation of expenses will be done to ensure that Client pays for only those expenses actually incurred. The advance payment, if any, will then be applied to the final invoice, if unpaid, and any remaining advance payment will be refunded to Client within thirty (30) days from the date of the final reconciliation .

3.4
Invoices

a.  
Invoices for Services and Pass Through Expenses will be submitted in accordance with the Payment Schedule associated with the relevant Project Agreement and will be prepared monthly, or as frequently as necessary.  Any final payments specified in the Project Agreement will be invoiced upon completion of the project and delivery to Client of any final study databases, reports or other deliverables as specified in the Project Specifications.

b.  
All invoices under this Agreement will be forwarded to the Client representative designated in the relevant Project Agreement.

c.  
All payments under this Agreement will be remitted to the Aptiv Solutions Affiliate named in the Project Agreement, to the address and in the manner set forth in the Payment Schedule of the applicable Project Agreement.

3.5
Payment Terms

Client agrees to pay for Services and Pass Through Expenses in accordance with the Payment Schedule outlined in each Project Agreement or associated Amendment.  Client will pay for all Services, Pass Through Expenses and other correctly invoiced items within thirty (30) days of receipt of invoice.  All payments will be made in the currency noted in the Payment Schedule of the Project Agreement.  All fees for Services and Pass Through Expenses are exclusive of VAT (including non-refundable VAT), local taxes, charges or remittance fees, which Client will pay when applicable.  In the event that undisputed invoiced amounts are not paid within the Payment Terms, Aptiv Solutions reserves the right, at its sole discretion to (i) charge interest against any unpaid overdue balance at a rate of one percent (1.0%) per month; and/or (ii) suspend performance of the Services until such time that the overdue amounts are paid. Additionally Aptiv Solutions reserves the right to suspend work in the event that any disputed invoices have not been resolved within forty-five (45) days of the notification of the dispute.
 
 
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3.7           Exchange Rate Fluctuation

The parties acknowledge that some projects may be executed in more than one country, and that the currencies used by those countries may vary, and may fluctuate in value during the term of this Agreement.  Any such Project Agreements will contain a notation of the Base Exchange Rate for all currencies other than US Dollars in which costs for Services will be incurred.  If at any time during the term of a Project Agreement the Base Exchange Rate for Services specified in a foreign currency has fluctuated more than 3%, plus or minus, Aptiv Solutions will calculate a foreign currency exchange adjustment for those Services. The adjustment will be calculated by comparing the Base Exchange Rate with the Oanda.com foreign currency exchange spot rate on the last business Friday before each invoice is issued. Any resulting decrease in costs will be credited to Client and any resulting increase in costs will be invoiced to Client.  In the event Aptiv Solutions incurs a pass through cost in a currency other than U.S. Dollars, the Parties shall determine the amount payable based on the relevant conversion rate as reported on Oanda.com on the invoice date.

3.8           Financial Audit

Client or its designee (which shall not be a competitor of Aptiv Solution) shall have the right, at any time during the tenn of a Project Agreement and for a period of two (2) years thereafter, with reasonable advance notice and during normal business hours, to audit Aptiv Solution's financial records, including contracts with third parties, relating to the Services performed, funds paid by Client, and funds invoiced by Aptiv Solution under this Agreement. In the event that any such audit reveals any excess amounts paid by Client, Aptiv Solution shall promptly after completion of and delivery of the audit to Aptiv Solution (a) pay to Client any such amounts and, (b) in the event that such excess amount represents more than Ten Thousand dollars ($10,000 USD) of what was actually owed, reimburse Client for the costs of such Audit. The rights provided in this section shall be cumulative and in addition to any other rights and remedies that may be available to Client.

4.0
TERM AND TERMINATION

4.1
Term

Unless earlier terminated according to Section 4.2, 4.3, or 4.4 below, this Agreement will remain in effect for an initial term of seven (7) years from the Effective Date, and thereafter will renew automatically unless either Party notifies the other Party of termination of the Agreement no later than sixty (60) days prior to renewal hereof.  In the event of non-renewal by either Party, the term of this Agreement applicable under any outstanding Project Agreement will continue until completion of the Services described in such Project Agreement or termination of the Project Agreement.

4.2
Termination without Cause

The Client may terminate the Agreement or any Project Agreement issued hereunder for any reason upon sixty (60) days written notice to Aptiv Solutions. Should Client terminate this Agreement or a Project Agreement without cause, the termination process and associated fees will be as follows:

a.  
Client and Aptiv Solutions will meet within thirty (30) days of Aptiv Solutions’ receipt of such termination notice to develop a plan and budget for (a) closing down administration of this Agreement or (b) closing down the Study which is the subject of the terminated Project Agreement, which will include transferring any remaining tasks or other responsibilities to Client or its designee.

b.  
Client will pay to Aptiv Solutions the actual costs incurred in providing the Services and the Pass Through Expenses incurred in the performance of the terminated Project Agreement, as well as the actual costs and the pass-through expenses incurred in the course of winding down or closing out the terminated Project Agreement   as negotiated by the parties under 4.2 (b).

4.3
Termination by Client for Cause

Failure of Aptiv Solutions to comply with any of the material terms or conditions of this Agreement or any Project Agreement will entitle Client to give written notice of default via certified/return receipt mail or overnight courier to ensure receipt by Aptiv Solutions.  If Aptiv Solutions does not cure the default within thirty (30) days of receipt of notice (or for such reasonable amount of time thereafter, if the default is not susceptible of cure within thirty (30) days), this Agreement may be terminated by Client.  Client will pay Aptiv Solutions for all Services properly rendered and Pass Through Expenses incurred.  As soon as practicable following receipt of notice of termination under this Section 4.3, Aptiv Solutions will submit an itemized accounting of Pass Through Expenses and costs incurred, costs anticipated, and payments received in order to determine a balance to be paid by either Party to the other.  Such balance will be paid by Client within thirty (30) days of completion of work.
 
 
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4.4
Termination by Aptiv Solutions for Cause

Failure of Client to comply with any of the material terms or conditions of this Agreement or to respond to Aptiv Solutions’ inquiries or requests for information will entitle Aptiv Solutions to give written notice of default via certified/return receipt mail or overnight courier to ensure receipt by Client.  If Client does not cure the default within sixty (60) days of receipt of notice (or for such reasonable amount of time thereafter, if the default is not susceptible of cure within sixty (60) days), this Agreement may be terminated by Aptiv Solutions, which will cease performance of Services.  The cessation of Services in accordance with this Section will not be a default of performance obligations by Aptiv Solutions, nor will it be a breach of this Agreement or any Project Agreement.  Client will pay to Aptiv Solutions all amounts due and owing for Services performed, Pass Through Expenses incurred, costs associated with winding up activities, as well as any late fees which may be due, pursuant to Section 3.5 above.

If in the reasonable assessment of Aptiv Solutions, its continued performance of the Services contemplated by this Agreement or any Project Agreement could constitute a potential or actual violation of legal, regulatory, ethical or scientific standards, then Aptiv Solutions may terminate this Agreement or any Project Agreement by giving written notice stating the effective date (which may not be less than sixty [60] days from the notice date) of such termination.  The parties shall use all reasonable efforts to rectify the alleged violation prior to the end of the sixty (60) day notice period.

4.5  
Termination for Other Reasons

Either Party may terminate this Agreement and all Project Agreements hereunder, effective immediately upon written notice to the other Party, if the other Party: (i) files a voluntary petition in bankruptcy or has an involuntary bankruptcy petition filed against it, which is not dismissed within thirty (30) days after its institution, (ii) is adjudged as bankrupt, (iii) becomes insolvent, (iv) has a receiver, trustee, conservator or liquidator appointed for all or a substantial part of its assets, (v) ceases to do business, (vi) commences any dissolution, liquidation or winding up, or (vii) makes an assignment of its assets for the benefit of its creditors.

4.6
Survival

Expiration or termination of this Agreement will not relieve the Parties of any obligation accruing prior to such expiration or termination.  In addition, the Sections on Payment, Term and Termination, Representations and Warranties, Debarment Certification, Disposition of Computer Files and Study Materials, Ownership and Confidentiality, Indemnification, and Employees as well as any other sections which by their nature should survive, will survive expiration or termination of this Agreement indefinitely, or for the period of time noted in the specific clause.

5.0
REPRESENTATIONS AND WARRANTIES

5.1
Acknowledgments

Client acknowledges and agrees that the results of the Services to be provided hereunder are inherently uncertain and that, accordingly, there can be no assurance, representation or warranty by Aptiv Solutions that the drug, compound, device or other material which is the subject of research covered by this Agreement or any Project Agreement issued hereunder can, either during the term of this Agreement or thereafter, will be successfully developed or, if so developed, will receive the required approval by any regulatory authority.

5.2           Mutual Representations

Each of the Parties represents, warrants and covenants to the other that: (a) it is a corporation duly incorporated, validly existing and in good standing; (b) it has taken all necessary actions on its part to authorize the execution, delivery and performance of the obligations undertaken in this Agreement, and no other corporate actions are necessary with respect thereto; (c) it is not a party to any agreement or understanding and knows of no law or regulation that would prohibit it from entering into and performing this Agreement; (d) when executed and delivered by it, this Agreement will constitute a legal, valid and binding obligation of it, enforceable against it in accordance with this Agreement’s terms; (e) it is duly licensed, authorized or qualified to do business and is in good standing in every jurisdiction in which a license, authorization or qualification is required for it to perform its obligations under this Agreement; and (f) it will not enter into any other agreements which would interfere or prevent performance of the obligations described herein.
 
 
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5.3
Representations and Warranties of Client

a.  
Client represents and warrants that it has the right, title and interest in the drug, compound, device or other material which is the subject of research covered by this Agreement or any Project Agreement (whether such right, title and interest is held solely by Client or jointly with others) and that it has the legal right, authority and power to enter into this Agreement, and to perform any clinical trial which is the subject of a Project Agreement issued hereunder.

b.  
Client further represents and warrants that the services required of Aptiv Solutions hereunder will not violate the rights of any third party including but not limited to intellectual property rights.

c.  
If Client requires Aptiv Solutions to use MedDRA to code, analyze or report data for a Study, Client represents and warrants that it has a current and valid license agreement with the Maintenance and Support Services Organization (“MSSO”) to use MedDRA.  Furthermore, if Aptiv Solutions is required to use WHO Drug, WHO Herbal or WHO ART for coding of data, Client warrants and represents that it has a current and valid license agreement with The Uppsala Monitoring Centre for the dictionaries which Aptiv Solutions will be required to use.  If Client does not currently have such licenses, it represents and warrants that such licenses will be in place prior to the delivery of data by Aptiv Solutions which is coded using these dictionaries. Aptiv Solutions will not be liable to Client for use of data coded without proper licensing, and Client will hold Aptiv Solutions harmless in these occasions.  In the event Client requests that Aptiv Solutions perform services which require Aptiv Solutions to distribute MedDRA terminology or WHODrug dictionary to third parties, CLIENT shall be responsible for ensuring that all such third parties possess the necessary MedDRA and/or Uppsala Monitoring Centre product licenses.


5.4
Representations and Warranties of Aptiv Solutions

a.  
Aptiv Solutions represents and warrants that the personnel assigned to perform Services rendered under this Agreement will be capable professionally.

b.  
Aptiv Solutions further represents and warrants that it will make available to Client or to the responsible regulatory authority relevant records, programs, and data as may be reasonably requested by Client for purposes related to filing and prosecution of Client's related new drug applications; provided such request is consistent with all applicable laws that protect confidentiality of personal data.

c.  
Aptiv Solutions’ sole obligation for material breach of a representation and warranty set out in this Section will be to correct or replace that portion of the Services that fails to materially conform thereto.  Alternatively, Client will be entitled to a return of all funds associated with any Services performed in breach of this Agreement, and the related Project Agreement and any other remedies available to the Client at law or under this Agreement.

5.5           No Other Warranties

The parties’ warranties and representations contained in this Agreement are in lieu of all other warranties expressed or implied.

6.0
DEBARMENT CERTIFICATION

a.  
Aptiv Solutions certifies that it has not been debarred under Section 306 of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 335a(a) or (b) or any equivalent local law or regulation.  In the event that Aptiv Solutions becomes debarred   or  is  subject  to  a  proceeding  that  could  lead  to  debarment  or  a criminal prosecution, Aptiv Solutions agrees to notify Client immediately.

b.  
Aptiv Solutions certifies that it has not and will not use in any capacity the services of any individual, corporation, partnership, or association including clinical sites which has been debarred under Section 306 of the Federal Food, Drug and Cosmetic Act, 21 U.S.C § 335a (a) or (b) or any equivalent local law or regulation.  In the event that Aptiv Solutions becomes aware of or receives notice of the debarment of any individual, corporation, partnership, or association providing services to Aptiv Solutions, which relate to the Services being provided under this Agreement, Aptiv Solutions agrees to notify Client immediately.
 
 
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7.0
AUDIT AND INSPECTIONS

7.1
Audit by Client

a.  
Routine Audits .  During the term of this Agreement, Aptiv Solutions will permit representatives of Client who are not competitors of Aptiv Solutions to examine, at a reasonable time during normal business hours and subject to at least ten (10) business days prior written notice to Aptiv Solutions: (i) the facilities where the Services are being, will be or have been conducted; (ii) related study documentation.  The purpose of such audit will be to enable the Client to confirm that the Services are being or will be or have been conducted in conformance with applicable standard operating procedures, a specific Project Agreement, this Agreement and in compliance with applicable laws and regulations.  Client shall pay the reasonable costs of any such audits. Routine audits will be limited to one per calendar year.  Aptiv Solutions will provide copies of any materials reasonably requested by Client during such audit.  Aptiv Solutions will implement all modifications that prove necessary subsequent to the findings of the audit made by or on behalf of Client.

b.  
“For cause” audits .  During the term of this Agreement, Client shall have the right to conduct “for cause” audits in the event of a reasonable suspicion that Aptiv Solutions is not performing the Services correctly or in conformity with applicable standard operating procedures, a specific Project Agreement, this Agreement or applicable laws and regulations.   Aptiv Solutions will cooperate fully in such audit, and will provide copies of any materials reasonably requested by Client during such audit.

7.2
Inspection by Regulatory Authorities

During the term of this Agreement, each Party will permit regulatory authorities to examine, (i) the facilities where the Services are being conducted; (ii) study documentation; and (iii) any other relevant information, including information that may be designated by one or both of the Parties as confidential, reasonably necessary for regulatory authorities to confirm that the Services are being conducted in compliance with applicable laws and regulations.  Each Party will immediately notify the other if any regulatory authority schedules, or without scheduling, begins an inspection that relates to the Services or the Parties’ respective obligations hereunder.

Aptiv Solutions will allow Client to be present during any such inspection and in all instances promptly furnish to Client relevant portions of any report or correspondence issued by the regulatory authority in connection with such visit or inquiry that is directly related to Client or a Client project, including any FDA Form 483, Establishment Inspection Reports, and warning letters and any comparable documents received from any regulatory authority in any country. Upon completion of proper internal review Aptiv Solutions shall make all reasonable efforts to provide Client with copies of relevant portions of Aptiv Solutions responses or explanations directly relating to such items with a good faith effort to provide Client with sufficient time for review, in each case with only Aptiv Solutions trade secrets or other confidential information unrelated to Client's project redacted therefrom. Aptiv Solutions shall use its commercially reasonable efforts to properly address non compliance issues, and shall inform Client regarding the actions taken.

7.3           Audit of Trial Site(s) by Aptiv Solutions

In connection with Aptiv Solutions’ provision of Services as specified in this Agreement and any associated Project Agreement, Aptiv Solutions may conduct monitoring visits and/or audits of Trial Sites.  Based on Aptiv Solutions’ observations during such Trial Site visits and audits, Aptiv Solutions may decide: i) that enrollment should be suspended at the Trial Site; ii) that a Trial Site’s non-compliance needs to be reported to Client and/or regulatory authorities; and/or (iii) Trial Site’s participation in a Study needs to be terminated.  Upon such a determination, Aptiv Solutions will present to Client a basis for its decision. If Client disagrees with the basis for Aptiv Solutions’ decision, Aptiv Solutions will assign its contract with the Trial Site to Client and Client agrees to accept such assignment and to be responsible for all contractual duties and obligations to the Trial Site.

8.0
DISPOSITION OF COMPUTER FILES AND STUDY MATERIALS

Aptiv Solutions will take reasonable and customary precautions, including periodic backup of computer files, to prevent the loss or alteration of Client's study data, documentation, and correspondence.  Upon termination of this Agreement, Aptiv Solutions will dispose of Client computer-stored files and study materials according to Aptiv Solutions’ internal standard operating procedures. Client may communicate any special request for the disposition of materials in writing to Aptiv Solutions.  Client will bear all costs incurred by Aptiv Solutions in complying with any such written instructions furnished by Client.  Aptiv Solutions will provide a written estimate to Client, and Client will provide written approval, of all such costs prior to any action by Aptiv Solutions.  In no case will Aptiv Solutions destroy Client's records without Client's written approval.

9.0
OWNERSHIP OF DATA AND INTELLECTUAL PROPERTY

All data (including without limitation, written, printed, graphic, video and audio material, and information contained in any computer database or computer readable form) generated by Aptiv Solutions in the course of conducting the Services (the “Data”) and related to the Services will be Client’s property.  Any copyrightable work created in connection with performance of the Services and contained in the Data will be considered work made for hire, whether published or unpublished, and all rights therein will be the property of Client as employer, author and owner of copyright in such work.

Aptiv Solutions understands and agrees that the underlying rights to the intellectual property and materials that are the subject of each Project Agreement, including, without limitation, all intellectual property rights in Client’s drug candidates or products, are owned solely by Client.  Neither Aptiv Solutions, its Affiliates nor any of their respective Subcontractors will acquire any rights of any kind whatsoever with respect to Client’s drug candidates or products as a result of conducting Services hereunder.  All rights to any know-how, trade secrets, developments, discoveries, inventions or improvements (whether or not patentable) conceived or reduced to practice in the performance of work conducted under this Agreement by Aptiv Solutions’ or its Affiliates’ employees, or independent contractors, either solely or jointly with employees, agents, consultants or other representatives of Client (the “Intellectual Property”), will be owned solely by Client.  Aptiv Solutions, its Affiliates and their respective employees and Subcontractors will sign and deliver to Client all writings and do all such things as may be necessary or appropriate to vest in Client all right, title and interest in and to such Intellectual Property.  Aptiv Solutions will promptly disclose to Client any such Intellectual Property arising under this Agreement.  Client may, in its sole discretion, file and prosecute in its name and at its expense, patent applications on any patentable inventions within the Intellectual Property.  Upon the request of Client, and at the sole expense of Client, Aptiv Solutions will execute and deliver any and all instruments necessary to transfer its ownership of such patent applications to Client and to enable Client to file and prosecute such patent applications in any country.
 
 
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Notwithstanding the foregoing, Client agrees that Aptiv Solutions possesses or may in the future possess analytical methods, computer technical expertise and software, which have been independently developed by Aptiv Solutions and which will remain the sole and exclusive property of Aptiv Solutions, except to the extent that improvements or modifications include, incorporate or are based upon Client's information. Improvements or enhancements made to Aptiv Solutions’ processes or methods which are independently developed incidental to the provision of Services hereunder will remain the sole property of Aptiv Solutions. Client may use this information of Aptiv Solutions free of charge for interpretation purposes or regulatory authorities’ purposes or for any purposes required for the achievement of the scope and objectives of a Project Agreement.

10.0        CONFIDENTIAL INFORMATION

10.1
Client Confidential Information

a.  
Client may disclose confidential information to Aptiv Solutions during the course of this Agreement.  All information provided by or on behalf of Client or data collected by Aptiv Solutions during the performance of the Services is deemed to be the confidential information of Client and is hereinafter referred to as “Client Information”.  Aptiv Solutions will not disclose Client Information to any person other than its Affiliates and its and their respective employees, agents, Investigators, Trial Sites and independent contractors involved in the Services or use any such information for any purpose other than the performance of Services without the prior written consent of Client, except that Aptiv Solutions may share Client Information with Client’s Affiliates, if requested.

b.  
Aptiv Solutions will ensure that it and its Affiliates’ employees, agents, and independent contractors involved in the Services will comply with terms substantively similar to the confidentiality provisions of this Agreement.  Contracts with Trial Sites will include provisions no less restrictive than these terms.  Aptiv Solutions will disclose the Client Information only to those of Aptiv Solutions’ of Client’s Affiliates, and their employees, agents, Investigators, Trial Sites and independent contractors who reasonably need to know the Client Information for the purposes of carrying out a Project Agreement.

c.  
Aptiv Solutions will exercise due care to prevent the unauthorized disclosure and use of Client Information associated with the Services.

d.  
This confidentiality, nondisclosure and nonuse provision will not apply to Client Information that Aptiv Solutions can demonstrate by competent evidence:

i.  
was known by Aptiv Solutions before initiation of the Services or which is independently discovered, after the initiation of the Services, without the aid, application or use of Client Information, as evidenced by written records;

ii.  
was in the public domain at the initiation of the Services or subsequently became publicly available through no fault or action of Aptiv Solutions; or

iii.  
was disclosed to Aptiv Solutions on a non-confidential basis by a third party authorized to disclose it.

e.  
In no event will either Party be prohibited from disclosing confidential information of the other Party to the extent required by law to be disclosed, provided that the disclosing Party provides the non-disclosing Party with written notice thereof, prior to disclosure, to the extent reasonably practicable, discloses only what is required to be disclosed by law or regulation, and, at the non-disclosing Party’s request and expense, cooperates with the non-disclosing Party’s efforts to obtain a protective order or other confidential treatment of the confidential information required to be disclosed.

10.2