EXHIBIT 10.2
MUTUAL TERMINATION AGREEMENT
MUTUAL TERMINATION AGREEMENT (the "Agreement"), dated as of May 1,
2008, by and between AETHLON MEDICAL, INC., a Nevada corporation, (the
"Company"), and FUSION CAPITAL FUND II, LLC, an Illinois limited liability
company (the "Buyer").
WHEREAS, the Buyer and the Company mutually desire to terminate the
Common Stock Purchase Agreement dated as of March 21, 2007, by and between the
Company and the Buyer (the "Purchase Agreement"). All capitalized terms used in
this Agreement that are not defined in this Agreement shall have the meanings
set forth in the Purchase Agreement;
NOW THEREFORE, the Company and the Buyer hereby agree as follows:
1. TERMINATION OF THE PURCHASE AGREEMENT.
The Purchase Agreement, that certain Registration Rights Agreement
between the Company and Buyer dated March 21, 2007, the "Registration Rights
Agreement" and the other Transaction Documents between the Buyer and the Company
related to the Purchase Agreement (other than this Agreement) are hereby
terminated effective as of the date hereof and any and all rights, duties and
obligations arising thereunder or in connection with the Purchase Agreement, and
the Transaction Documents (other than this Agreement) are now and hereafter
fully and finally terminated, provided, however, that (i) the representations
and warranties of the Buyer and Company contained in Sections 2 and 3 of the
Purchase Agreement, (ii) the indemnification provisions set forth in Section 8
of the Purchase Agreement, and (iii) the agreements and covenants set forth in
Section 11 of the Purchase Agreement, each shall survive such termination and
shall continue in full force and effect (the "Surviving Obligations").
2. MUTUAL GENERAL RELEASE.
Except as may arise under or in connection with this Agreement and the
Surviving Obligations, the Company and the Buyer hereby release and forever
discharge each party hereto and its predecessors, successors and assigns,
employees, shareholders, partners, managing members, officers, directors,
agents, subsidiaries, divisions and affiliates from any and all claims, causes
of actions, suits, demands, debts, dues, accounts, bonds, covenants, contracts,
agreements, judgments whatsoever in law or in equity, whether known or unknown,
including, but not limited to, any claim arising out of or relating to the
transactions described in the Purchase Agreement and Transaction Documents
(other than the Surviving Obligations) which any party hereto had, now has or
which its heirs, executors, administrators, successors or assigns, or any of
them, hereafter can, shall or may have, against any party hereto or such parties
predecessors, successors and assigns, employees, shareholders, partners,
managing members, officers, directors, agents, subsidiaries, divisions and
affiliates, for or by reason of any cause, matter or thing whatsoever, whether
arising prior to, on or after the date hereof, provided, however, that (i) this
Agreement, and (ii) the Surviving Obligations shall continue in full force and
effect as the legal, valid and binding obligation of each party thereto
enforceable against each such party in accordance with its terms.
3. MISCELLANEOUS.
(a) GOVERNING LAW; JURISDICTION; JURY TRIAL. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Illinois or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of Illinois. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of Chicago, for the adjudication of any
dispute hereunder or under the other Transaction Documents or in connection
herewith or therewith, or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(b) COUNTERPARTS. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(d) SEVERABILITY. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
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(e) NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
Aethlon Medical, Inc.
0000 Xxxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Chief Executive Officer
With a copy to:
Xxxxxxxxxx & Xxxxx, LLP
00000 Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxxxx Xxxx, Esq.
If to the Buyer:
Fusion Capital Fund II, LLC
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) Business Days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, and recipient facsimile number or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.
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(f) DISCLOSURE; SEC FILINGS. The Company agrees to issue the press
release set forth as EXHIBIT A hereto by no later than 9:00 am Eastern Time, on
May 6, 2008. The Company shall file with the SEC the Report on Form 8-K set
forth as EXHIBIT B hereto by no later than 9:00 am Eastern Time, on May 6, 2008.
The Company also shall file with the SEC the Form RW set forth as EXHIBIT C
hereto by no later than 9:00 am Eastern Time, on May 6, 2008. The Company and
the Buyer each hereby unconditionally agree that for a period of two (2) years
from the date of this Agreement that without the prior written consent of the
other party, neither party shall issue any other press release, make any other
SEC filing, make any other public or private communication or disclosure,
written or verbal, of any kind whatsoever with respect to: (i) the other party,
its employees, its managers, or any of its affiliates, (ii) the Purchase
Agreement, the transactions or any registration statement contemplated under the
Purchase Agreement, (iii) this Agreement, and (iv) the termination of the
Purchase Agreement. Notwithstanding the foregoing, any party may make written
communications and written public disclosures with respect to: (i) the other
party, its employees, its managers, or any of its affiliates, (ii) the Purchase
Agreement, the transactions or any registration statement contemplated under the
Purchase Agreement, (iii) this Agreement, and (iv) the termination of the
Purchase Agreement, if and only if: (a) required by law or government regulation
(and if required by subpoena or other judicial order such information may be
communicated orally as required by such proceedings), (b) required by court
order (such information may be communicated orally if required by such order),
or (c) required in connection with a written government request, in each case,
as evidenced by written advice from such party's legal counsel, in each case,
after giving the other party one Business Day prior written notice and the
opportunity to review such written communication or written public disclosure
(however, in the case of oral disclosures required by subpoena or court order
the parties agree and acknowledge that there may be no practicable opportunity
to review such matters). Such written advice from such party's legal counsel
shall specify in meaningful detail all facts and legal analysis which form the
basis of such written advice. In addition to and notwithstanding the foregoing,
the Company shall also be permitted to make disclosures in any of its SEC
filings but only to the extent that such disclosures are: (I) substantially the
same as the information set forth in the Report on Form 8-K set forth as Exhibit
B hereto, (II) is substantially the same as information which was disclosed by
the Company in an SEC filing made prior to the date hereof or (III) is required
by the Company's independent registered accounting firm to grant its consent to
or approve a particular SEC filing as evidenced by written advice from the
Company's independent registered accounting firm. Such written advice from the
Company's independent registered accounting firm shall specify in meaningful
detail all facts and analysis which form the basis of such written advice.
(g) RULE 144. With a view to making available to the Buyer the benefits
of Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Buyer to sell any of its
shares of Common Stock to the public without registration ("RULE 144"), the
Company agrees to fully cooperate in the removal of restrictive legend from any
Common Stock share certificates delivered to the Company by the Buyer together
with an opinion of Buyer's counsel in customary form that registration is not
required under the Securities Act of 1933 or similar state laws in compliance
with Rule 144.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Buyer, including by merger or
consolidation. The Buyer may not assign its rights or obligations under this
Agreement.
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(i) NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
(j) FURTHER ASSURANCES. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement.
(k) NO STRICT CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.
(l) CHANGES TO THE TERMS OF THIS AGREEMENT. This Agreement and any
provision hereof may only be amended by an instrument in writing signed by the
Company and the Buyer. The term "Agreement" and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented.
(m) FAILURE OR INDULGENCE NOT WAIVER. No failure or delay in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.
* * * *
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IN WITNESS WHEREOF, the Buyer and the Company have caused this Mutual
Termination Agreement to be duly executed as of the date first written above.
THE COMPANY:
------------
AETHLON MEDICAL, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
BUYER:
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FUSION CAPITAL FUND II, LLC
BY: FUSION CAPITAL PARTNERS, LLC
BY: SGM HOLDINGS CORP.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
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EXHIBIT A
---------
PRESS RELEASE
ATTACHED HERETO.
EXHIBIT B
---------
REPORT ON FORM 8-K
ATTACHED HERETO.
EXHIBIT C
---------
FORM RW
ATTACHED HERETO.
