EXHIBIT 10.80
TERMINATION AND RELEASE AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT ("Agreement") is dated as of
February 9, 2004 by and among Advanced Viral Research Corp., a Delaware
corporation (the "Company") and DCT S.R.L., an Argentinean corporation ("DCT"),
Freddie Velez ("Velez"), and Dr. Cesar Blumtritt ("Blumtritt") (Velez, and
Blumtritt along with DCT, S.R.L. are collectively hereinafter referred to as
"DCT").
RECITALS
WHEREAS, the Company and DCT, S.R.L. are parties to an Exclusive
Distribution Agreement dated as of June 17, 1994 as purportedly amended on April
1, 1996, pursuant to which the Company granted DCT, S.R.L., subject to certain
conditions precedent, the exclusive right to import, warehouse, market, sell and
distribute the pharmaceutical drug known originally as "Reticulose", a later
formulation of which was known as "Product R," which was renamed in September
2003 as "AVR118" (collectively, the "Drug") within Argentina and MercoSur
(Bolivia, Paraguay, Uruguay, Brazil and Chile), and engaged DCT, S.R.L. to
conduct certain clinical trials to assess the efficacy of the Company's products
on the human papilloma virus and obtain certain governmental approvals (the
"Distribution Agreement"); and
WHEREAS, the Company and DCT were parties to several testing agreements
entered between 1994 and 1998 pursuant to which the Company engaged DCT and
their affiliates to conduct several clinical studies in Argentina to assess the
efficacy of the Drug on certain identified diseases and medical conditions (the
"Testing Agreements"); and
WHEREAS, the parties hereto have agreed to terminate the Distribution
Agreement and the Testing Agreements and to resolve all disputes between the
parties relating thereto, in accordance with the terms and conditions
hereinafter set forth; and
NOW, THEREFORE, in consideration of the promises and commitments set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
1. TERMINATION OF DISTRIBUTION AGREEMENT.
The parties hereto agree and acknowledge that the Distribution
Agreement, and any and all rights thereunder of DCT, its officers, directors,
shareholders, principals, employees, subsidiaries, affiliates, agents or
representatives are hereby terminated and of no further force or effect,
including the right to import, warehouse, market, sell and distribute the Drug
and any modifications, improvements or derivations thereof.
2. TERMINATION OF TESTING AGREEMENTS.
The parties hereto agree and acknowledge that the Testing Agreements,
and any and all rights thereunder of DCT, its officers, directors, shareholders,
principals, employees, subsidiaries, affiliates, agents or representatives are
hereby terminated and of no further force or effect.
3. TRANSFER OF RIGHTS TO APPLICATIONS, REGISTRATIONS, INVENTIONS.
(a) Assignment and Transfer of Rights. DCT hereby assigns and
transfers to the Company all of its right, title and interest in and to (i) any
and all applications or registrations filed or submitted with all regulatory
authorities which in any way relate, directly or indirectly to the Drug,
including ANMAT (Administracion Nacional De Medicamentos, Alimentos Y Tecnologia
Medica of Argentina) to the Drug; (ii) and any and all related patent rights,
copyrights and applications and registrations therefor. DCT shall cooperate with
the Company in obtaining proprietary protection for the Drug, shall execute all
documents which the Company shall reasonably request in order to perfect the
Company's rights in the Drug and shall cooperate with the Company in connection
with the Company's pursuit of further clinical testing of the Drug and
regulatory approvals of the Drug. The Company shall reimburse DCT for all
documented out of pocket expenses paid by DCT to third parties incurred by DCT
in connection with DCT's obligations referred to in the prior sentence.
(b) Assignment and Transfer of Inventions. DCT shall disclose,
assign and transfer to the Company any and all ideas, concepts, discoveries,
inventions, developments, improvements, trade secrets, technical data, know-how
or other materials that were conceived, devised, invented, developed or reduced
to practice or tangible medium by DCT, or any of its agents, employees or
contractors, or under its direction (hereinafter "Inventions").
4. COVENANTS REGARDING PROPRIETARY INFORMATION OF THE COMPANY.
(a) Proprietary Information. DCT understands and agrees that prior
to the date hereof, the Company has disclosed to DCT information relating to the
properties, composition or structure of the Company's products (including,
without limitation, the Drug and any derivation or modification thereof), the
manufacture or processing thereof (including, without limitation, reagents, cell
lines, chemical formulas, laboratory records, clinical trial data, patient data,
scientific or technical drawings, names and expertise of employees and
consultants, know-how, formulas, processes, ideas, inventions (whether
patentable or not), schematics, computer programs, and other technical,
business, financial, patient and product development plans, forecasts,
strategies and information), which, to the extent disclosed to DCT by the
Company, is hereinafter referred to as "Proprietary Information" of the Company.
"Proprietary Information" also includes the manner in which any such information
was or may be combined with other information, or synthesized or used by the
Company.
(b) Return of All Drug Information, Including Proprietary
Information. DCT represents and warrants to the Company that it has turned over
or shall forthwith turn over to the Company all information relating to clinical
trials, the Testing Agreements and the Distribution Agreement and all other
information in its possession relating to the Drug (the Drug Information") and
all Proprietary Information of the Company and all documents or media containing
any such Drug Information and Proprietary Information and any and all copies or
extracts thereof, including, but not limited to, all laboratory records,
clinical trial data, patient data inventory, accounting records, computer
terminals and tapes, disks, or other data storage mechanisms, accounting
machines, and all office furniture and fixtures, supplies and other personal
property to the extent it such are in its possession or under its control, in
good condition, ordinary wear and tear excepted, and including, without
limitation, all correspondence files, research data, and patent information or
data, of every sort. The Company acknowledges that to the extent applicable law
requires regulatory agencies to maintain certain Drug Information, DCT shall
only provide to the Company copies of such Drug Information.
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(c) Information Non-Disclosure And Non-Use. Notwithstanding the
foregoing, DCT represents and warrants as follows:
(1) DCT will not divulge any such Drug Information or
Proprietary Information or any information derived therefrom to any third
person;
(2) DCT will not make any use whatsoever at any time of
such Drug Information or Proprietary Information;
(3) DCT will hold the Company's Drug Information and
Proprietary Information in strict confidence and to take all reasonable
precautions to protect such Drug Information and Proprietary Information
(including, without limitation, all precautions DCT employs with respect to its
confidential materials);
(4) DCT will not remove or export from the United States,
Argentina or elsewhere, or reexport any such Drug Information or Proprietary
Information or any direct product thereof;
(5) not to copy or reverse engineer any such Drug
Information or Proprietary Information.
5. CONSIDERATION.
In full consideration for the agreements, covenants and releases
contained in this Agreement, on the date of this Agreement, the Company shall
deliver to DCT the following:
(a) Cash in the amount of Sixty Thousand Dollars ($60,000);
(b) Warrants to purchase 5,000,000 shares of the Company's common
stock at an exercise price of $.16 per share, issued to the
following persons in the following amounts, in the form
attached here as EXHIBIT A (the "Warrants"):
WARRANT HOLDER WARRANT SHARES
- -------------- --------------
Cesar Blumtritt 1,880,000
Alfredo Velez 2,400,000
Bruce Knef 200,000
David Duffy 300,000
Arthur Hawkins 150,000
Mayer Gattegno 70,000
The Warrant holders shall be subject to a lock up agreement pursuant to which
such persons shall be restricted from selling more than 2,000,000 shares of the
Company's common stock in any six-month period during the term of the Warrants
(the "Lock Up Agreement"), the form of which is attached hereto as EXHIBIT B.
The holders of the Warrants shall have "piggyback" registration rights with
respect to the resale of the shares of Common Stock underlying the Warrants.
6. PUBLICITY. Except to the extent required by law or with the consent of
the parties hereto, none of the parties hereto shall disclose the existence or
subject matter of the negotiations or business relationship contemplated by this
Agreement.
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7. SECURITIES LAWS; STANDSTILL. DCT hereby acknowledges that it is aware
that the United States securities laws restrict persons with material non-public
information about a company from purchasing or selling securities of such
company or from communicating such information to a third party under
circumstances in which it is reasonably foreseeable that such third party is
likely to purchase or sell such securities. Without limiting the generality of
the foregoing, DCT further agrees that none of the Proprietary Information or
any other information provided previously or in the future by the Company to
them will be used by such entity or person, or disclosed to others for use, in
connection with purchasing, selling or trading in the Company's securities in
any manner that is in violation of legal or regulatory restrictions applicable
from time to time, and DCT acknowledges a duty not to purchase, sell or trade in
securities on the basis of any material "inside" information that is not
publicly known.
8. NO CLAIM OR LICENSE. This Agreement shall not by implication or
otherwise be construed as (i) a grant, or an obligation to grant, a license or
right to DCT; or (ii) an obligation of any party to enter into any other
contractual relationship. DCT does not claim any rights or interests in and to
trade secrets, formulas, devices, inventions, processes, patents, applications,
continuations, copyrights, trademarks, compilations of information, records,
specifications, rights, interests and data of any other sort, affecting or
pertaining directly or indirectly to the business of the Company as now
conducted, or to the patents, trade secrets, and other rights now owned by the
Company.
9. RELEASE OF CLAIMS.
(a) Except for the agreements contained herein and in the
Warrants, DCT, for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged as adequate and received from or on behalf of the
Company, hereby irrevocably releases and forever discharges, and DCT shall cause
its subsidiaries, officers, directors, shareholders, principals, employees,
affiliates and agents (collectively, "DCT's Affiliates") to release and forever
discharge, the Company, its subsidiaries, officers, directors, employees and
agents, of and from all causes of action, suits, claims, debts, accounts,
reckonings, claims for attorneys fees, interests, contracts, promises, damages
and demands of any nature whatsoever, in law or in equity, which DCT and DCT's
Affiliates ever had, now have, or which any successor or assign or transferee of
DCT's Affiliates hereafter can, shall or may have, against the Company or its
subsidiaries, officers, directors, affiliates, employees or agents, for, upon or
by reason of any matter, cause or thing whatsoever.
(b) Except for the agreements contained herein and in the
Warrants, the Company, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged as adequate and received from or on
behalf of DCT, hereby irrevocably releases and forever discharges, and the
Company shall cause its subsidiaries, officers, directors, shareholders,
principals, employees, affiliates and agents (collectively, the "Company's
Affiliates") to release and forever discharge, DCT, its subsidiaries, officers,
directors, employees and agents, of and from all causes of action, suits,
claims, debts, accounts, reckonings, claims for attorneys fees, interests,
contracts, promises, damages and demands of any nature whatsoever, in law or in
equity, which the Company and the Company's Affiliates ever had, now has, or
which any successor or assign or transferee of the Company's Affiliates
hereafter can, shall or may have, against DCT or its subsidiaries, officers,
directors, affiliates, employees or agents, for, upon or by reason of any
matter, cause or thing whatsoever.
10. INDEMNIFICATION.
(a) Each of DCT and the DCT Affiliates (collectively, the
"Indemnifying Parties") agrees to, jointly and severally, indemnify and hold the
Company and its affiliates, control persons, directors, officers, employees and
agents (each an "Indemnified Person") harmless from and against all losses,
claims, damages, liabilities, costs or expenses, including those resulting from
any threatened or pending
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investigation, action, proceeding or dispute, whether or not the Company or any
such other Indemnified Person is a party to such investigation, action,
proceeding or dispute, arising out of this Agreement, the Distribution
Agreements, the Testing Agreements or DCT's use of the Drug. This indemnity
shall also include the Company and/or any such other Indemnified Person's
reasonable attorneys' and accountants' fees and out-of-pocket expenses incurred
in connection with such investigations, actions, proceedings or disputes, which
fees and expenses shall be periodically reimbursed to the Company and/or to any
such other Indemnified Person by the Company as they are incurred. Each of the
Indemnifying Parties also agrees that neither the Company nor any Indemnified
Person shall have any liability (whether direct or indirect, in contract or tort
or otherwise) to such Indemnifying Party for, or in connection with, any act or
omission to act by the Company other than with respect to the Company's
obligations under this Agreement.
(b) If for any reason the foregoing indemnification is unavailable
to the Company or any such other Indemnified Person or insufficient to hold it
harmless, then each of the Indemnifying Parties shall contribute to the amount
paid or payable by the Company or any such other Indemnified Person as a result
of such loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by each such Indemnifying Party
on the one hand, but also the relative fault of any of the Indemnifying Parties
and the Company or any such other Indemnified Person, as well as any relevant
equitable considerations. The reimbursement, indemnity and contribution
obligations of the Indemnifying Parties hereinabove set forth shall be in
addition to any liability which the Indemnifying Parties may otherwise have and
these obligations and the other provisions hereinabove set forth shall be
binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of each of the Indemnifying Parties, the Company and
any other Indemnified Person.
(c) The terms and conditions of this Section shall survive this
Agreement and shall continue indefinitely hereafter.
11. INJUNCTIVE RELIEF. DCT acknowledges and agrees that monetary damages
may be inadequate to protect the Company against breach or threatened breach of
this Agreement by any of the other parties hereto, and that any such breach may
allow such entity, individual or third parties to unfairly compete with the
Company resulting in irreparable harm to the Company, and therefore, that upon
any such breach or any threat thereof, the Company shall be entitled to
appropriate equitable relief without the posting of a bond in addition to
whatever remedies it might have at law and to be indemnified by such entity or
individual from any loss or harm, including, without limitation, attorneys'
fees, in connection with any breach or enforcement of such entity's or
individual's obligations hereunder or the unauthorized use or release of the
Company's Proprietary Information.
DCT agrees to notify the Company in writing immediately upon the
occurrence of any such unauthorized release or other breach of which it is
aware. In the event that any of the provisions of this Agreement shall be held
by a court or other tribunal of competent jurisdiction to be illegal, invalid,
or unenforceable, such provisions shall be limited or eliminated to the minimum
extent necessary so that this Agreement shall otherwise remain in full force and
effect.
12. MISCELLANEOUS.
(a) Survival. The obligations hereunder will survive indefinitely.
(b) Entire Agreement. This Agreement constitutes the entire
Agreement of the parties hereto with respect to the subject matter hereof and no
amendment or modification hereof shall be valid or binding unless made in
writing and signed by the party against whom enforcement thereof is sought.
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(c) Notices. All notices, consents, requests, approvals, and other
communications provided for or required herein, and all legal process in regard
thereto, must be in writing and shall be deemed validly given, made or served,
(a) when delivered personally or sent by telecopy to the facsimile number
indicated below with a required confirmation copy sent in accordance with this
subsection (c); or (b) on the next business day after delivery to a
nationally-recognized express delivery service with instructions and payment for
overnight delivery; or (c) on the fifth (5th) day after deposited in any
depository regularly maintained by the United States postal service, postage
prepaid, certified or registered mail, return receipt requested, addressed to
the following addresses or to such other address as the party to be notified
shall have specified to the other party in accordance with this section:
If to the Company: Advanced Viral Research Corp.
200 Corporate Boulevard South
Yonkers, New York 10701
Attention: Eli Wilner, CEO
Phone Number: 914-376-7383
Fax Number: 914-376-7368
If to DCT, S.R.L. or
Freddie Velez: ________________________
________________________
Phone Number: __________
Fax Number: ____________
If to Dr. Cesar Blumtritt: ________________________
________________________
Phone Number: __________
Fax Number: ____________
(d) Amendments. No amendments of or additions to this Agreement
shall be binding unless in writing and signed by both parties, except as herein
otherwise provided.
(e) Governing Law. This Agreement and all of its provisions shall
be governed in all respects, whether as to validity, construction, capacity,
performance or otherwise, by the laws of the State of Delaware. Each of the
parties irrevocably and unconditionally submits, for himself and itself and his
and its property, to the exclusive jurisdiction of any New York court sitting in
the County of Westchester in any suit, action or proceeding arising out of or
relating to this Agreement.
(f) Headings. The principal headings used in this Agreement are
included solely for the convenience of the parties and shall not affect, or be
used in connection with, the interpretation of this Agreement.
(g) No Waiver. No course of dealing nor any delay on the part of
the Company in exercising any rights hereunder shall operate as a waiver of any
such rights. No waiver of any default or breach of this Agreement shall be
deemed a continuing waiver or a waiver of any other breach or default.
(h) No Assignment. The parties hereto shall not assign any of
their rights under this Agreement, or delegate the performance of any of their
duties hereunder, without the prior written consent of the other party.
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(i) Successors. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective heirs, personal
representatives, successors and assigns, and other legal representatives.
(j) Severability. If any clause, paragraph, section or part of
this Agreement shall be held or declared to be void, invalid or illegal, for any
reason, by any court of competent jurisdiction, such provision shall be
ineffective but shall not in any way invalidate or affect any other clause,
paragraph, section or part of this Agreement. The parties intend that all
clauses, paragraphs, sections or parts of this Agreement shall be enforceable to
the fullest extent permitted by law.
(k) Counterparts. This Agreement may be executed in one or more
counterparts, each of which counterparts, when taken together, shall constitute
but one and the same agreement.
[Signatures on next page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
DCT, S.R.L. ADVANCED VIRAL RESEARCH CORP.
By: /s/ Freddie Velez By: /s/ Eli Wilner
Name: Freddie Velez Name: Eli Wilner
Title: President Title: Chief Executive Officer
/s/ Freddie Velez /s/ Cesar Blumtritt
Freddie Velez, individually Dr. Cesar Blumtritt, individually
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