EXHIBIT 10.2
AGREEMENT
THIS AGREEMENT is dated this 29th day of November, 2001, by and between
Advanced Viral Research Corp., a Delaware corporation ("AVR"), and Xxxxxxx
Xxxxxxxxx, an individual residing at 0000 Xxxxx Xxxxxxx Xxxx Xxxxx, Xxxxxxxx,
Xxxxxxx 00000 ("Xxxxxxxxx").
RECITALS
WHEREAS, Xxxxxxxxx has served as Chairman of the Board of Directors of
AVR since 1984, having previously also served as President and Chief Executive
Officer of AVR from 1984 through 1996, and as an officer and a member of the
Board of Directors of AVR's substantially-owned subsidiary, Advance Viral
Research, Ltd., a Bahamian corporation (the "Subsidiary"; AVR and the Subsidiary
are sometimes hereinafter referred to collectively as the "Corporation") since
1984; and
WHEREAS, for sound business reasons and in the best interests of
Xxxxxxxxx and the Corporation, upon the terms and subject to the conditions of
this Agreement, Xxxxxxxxx, among other things, shall resign from his position as
Chairman of the Board of Directors of AVR and as an officer and a member of the
Board of Directors of the Subsidiary.
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties hereby agree as follows:
1. RESIGNATION.
(a) Immediately following the execution of this Agreement, but after
first having taken the actions set forth in Section 1(c) below, Xxxxxxxxx shall
resign from all offices of AVR and the Subsidiary, including, without
limitation, as Chairman of the Board of Directors of AVR and as a member of the
Board of Directors of the Subsidiary.
(b) In consideration for Xxxxxxxxx'x resignation from all offices of
AVR and the Subsidiary and his resignation as a member of the Board of Directors
of AVR and the Subsidiary, AVR shall pay to Xxxxxxxxx, concurrently with the
foregoing resignations, in cash, ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000)
in one lump sum. Xxxxxxxxx acknowledges that AVR's payment to him of the
$150,000 contemplated in this Section 1(b) constitutes payment in full for all
severance, compensation and other remuneration and amounts accrued or owing by
the Corporation to Xxxxxxxxx, whether for services performed by Xxxxxxxxx on
behalf of the Corporation or otherwise, and the Corporation, from and after the
execution of this Agreement and its payment to Xxxxxxxxx of the $150,000
contemplated above, shall have no monetary or other obligation or liability to
Xxxxxxxxx except as otherwise set forth in this Agreement.
(c) Xxxxxxxxx and the Corporation acknowledge that as express
conditions to the execution of this Agreement, Xxxxxxxxx, prior to the execution
of this Agreement, in his capacity as a member of the Board of Directors of AVR,
voted (or took written action in lieu thereof) in favor of (i) increasing the
size of AVR's Board of Directors from four members to eight members and (ii)
filling the four newly created vacancies on AVR's Board of Directors with Xxxxx
X. Xxxxx XX, Xxxxxxxxxxx Xxxxxx, Xxxxx Xxxxxxxx and Xxx Xxxxxx.
(d) Concurrently with Xxxxxxxxx'x resignation as an officer and a
member of the Board of Directors of AVR and the Subsidiary, AVR shall cancel all
company credit cards issued to Xxxxxxxxx and otherwise terminate all
company-related perquisites previously afforded to Xxxxxxxxx, including coverage
under the Corporation's medical insurance plans.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) RIGHT TO APPOINT DIRECTOR. The Corporation hereby grants Xxxxxxxxx,
along with Xxxxxxx Xxxxxxx ("Xxxxxxx"), the combined right for a period of two
years from the date hereof to appoint one additional member to the Board of
Directors of AVR (the "Xxxxxxx/Xxxxxxxxx Designee"), so long as both Xxxxxxx and
Xxxxxxxxx own Shares of AVR. The identity of the Xxxxxxx/Xxxxxxxxx Designee
shall be reasonably acceptable to the Corporation. The Xxxxxxx/Xxxxxxxxx
Designee, if appointed, shall serve on AVR's Board of Directors until his
successor shall be duly elected and shall qualify. Xxxxxxxxx acknowledges that
notwithstanding the foregoing or any contrary provision contained in AVR's
charter or by-laws or set forth in the Delaware General Corporation Law, the
Xxxxxxx/Xxxxxxxxx Designee may be removed as a member of the Board of Directors
of AVR, with or without cause, by the affirmative vote of the members of AVR's
then Board of Directors at any time following the date which is the earlier to
occur of: (i) two years from the date hereof or (ii) the complete divestiture of
both Xxxxxxx'x and Xxxxxxxxx'x ownership in AVR. The Xxxxxxx/Xxxxxxxxx Designee
shall be the same person referenced as the Xxxxxxx/Xxxxxxxxx Designee in that
certain Agreement of even date herewith concurrently being entered into between
the Corporation and Xxxxxxx.
(b) ADVANCE VIRAL RESEARCH, LTD. As soon as practicable following the
execution of this Agreement, Xxxxxxxxx shall resign as a Trustee of the Bahamian
Trust (the "Trust") and, in connection therewith, in accordance with the terms
of the Trust and applicable law, cooperate with the Corporation in designating a
substitute Trustee of the Trust. The matters contemplated in this Section 2(b)
shall be completed in compliance with Bahamian and all other applicable laws.
Xxxxxxxxx represents and warrants to the Corporation that other than his
interest as Trustee of the Trust and as a stockholder of AVR, Xxxxxxxxx has no
equity or other ownership or control interest, direct or indirect, in the Trust
or in the Subsidiary. Xxxxxxxxx further represents and warrants that, to the
best of his knowledge, the Subsidiary owns (i) any export license required for
the Subsidiary to legally export any of the Corporation's products out of the
Bahamas and (ii) the manufacturing facility from which the Subsidiary conducts
its operations in the Bahamas.
(c) VOTING AGREEMENTS TERMINATED. Except as provided in this Agreement,
all agreements regarding the voting or disposition of shares of common stock of
AVR, par value $.00001 per share (the "Common Stock"), held by Xxxxxxxxx,
including, without limitation, the agreement to nominate Xxxxxx Xxxxxxxxx, M.D.
("Xxxxxxxxx") for election to the Corporation's Board of Directors, are hereby
terminated. Without limiting the foregoing,
2
concurrently therewith, the provision set forth in the Employment Agreement
between AVR and Xxxxxxxxx. prohibiting Xxxxxxxxx from voting any shares of
Common Stock owned by him in any manner adverse to Xxxxxxxxx shall also be
terminated.
(d) PRODUCT R. Provided that the Corporation is then permitted in
accordance with applicable United States Food and Drug Administration ("FDA")
and other relevant statutes, laws and regulations to dispense and dispose of
Product R, the Corporation shall provide Xxxxxxxxx, for his own personal or
family use in accordance with then FDA policy, with 500 ampules of Product R
annually, such distribution to commence on the date hereof and to continue on
each anniversary of the date hereof until Xxxxxxxxx'x death.
(e) INDEMNIFICATION BY THE CORPORATION. To the fullest extent permitted
by Section 145 of the Delaware General Corporation Law (or any successor
provision) and AVR's charter and by-laws, the Corporation shall promptly
indemnify Xxxxxxxxx for all amounts (including, without limitation, judgments,
fines, settlement payments, losses, damages, costs and expenses (including
reasonable attorneys' fees)) incurred or paid by Xxxxxxxxx in connection with
any action, proceeding, suit or investigation arising out of or relating to the
performance by Xxxxxxxxx of services for the Corporation, including as a
director, officer or employee of the Corporation.
Promptly after receipt by Xxxxxxxxx of notice of the assertion of a
claim against him for actions related to such services, Xxxxxxxxx will give AVR
written notice of the assertion of such claim. If any claim is brought against
Xxxxxxxxx by means of a proceeding and Xxxxxxxxx gives written notice to AVR of
the commencement of such proceeding, AVR will be entitled to participate in such
proceeding and, to the extent that it wishes (unless (i) AVR is also a party to
such proceeding and Xxxxxxxxx determines in good faith that joint representation
would be inappropriate or (ii) AVR fails to provide reasonable assurance to
Xxxxxxxxx of its financial capacity to defend such proceeding and provide
indemnification with respect to such proceeding), to assume the defense of such
proceeding with counsel satisfactory to Xxxxxxxxx. After written notice from AVR
to Xxxxxxxxx of its election to assume the defense of such proceeding, AVR will
not, as long as it diligently conducts such defense, be liable to Xxxxxxxxx
under this indemnification for any fees of other counsel or any other expenses
with respect to the defense of such proceeding, in each case subsequently
incurred by Xxxxxxxxx in connection with the defense of such proceeding, other
than reasonable costs of investigation. If AVR assumes the defense of a
proceeding, (i) it will be conclusively established for purposes of this
indemnification that the claims made in that proceeding are within the scope of
and subject to indemnification; and (ii) no compromise or settlement of such
claims may be effected by AVR without Xxxxxxxxx'x consent, which consent
Xxxxxxxxx shall not unreasonably withhold. If written notice is given to AVR of
the commencement of any proceeding and AVR does not, within ten days after
Xxxxxxxxx'x written notice is given, give written notice to Xxxxxxxxx of its
election to assume the defense of such proceeding, the Corporation will be bound
by any determination made in such proceeding or any compromise or settlement
effected by Xxxxxxxxx.
(f) CONTINUATION OF DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. For a
period of six continuous years from the date hereof, the Corporation shall cause
Xxxxxxxxx to continue to be insured under a directors' and officers' liability
insurance policy covering the same circumstances and events covered under the
directors' and officers' liability insurance policy maintained by the
Corporation on the date hereof (to the extent such circumstances and events may
then legally be insured against), which policy shall provide for up to $5
million of insurance coverage.
3
(g) INTELLECTUAL PROPERTY. Xxxxxxxxx represents and warrants that he
does not own, directly or indirectly, any patents, trademarks, trade names,
service marks, trade secrets, designs, manufacturing information, know-how,
copyrights, inventions, rights in internet websites or domain names, or any
registrations, applications or other rights to any of the foregoing, or any
other proprietary rights or information relating to the Corporation, Reticulose
or Product R (collectively, the "Intellectual Property"). Xxxxxxxxx further
represents and warrants that Xxxxxxxxx has previously transferred and assigned
to the Corporation all of his right, title and interest in and to any and all
such Intellectual Property. Notwithstanding the foregoing, to the extent that
Xxxxxxxxx has inadvertently failed to transfer and assign to the Corporation any
such Intellectual Property, Xxxxxxxxx, in consideration, among other things, for
the sum being paid to him under this Agreement, hereby irrevocably transfers and
assigns to the Corporation all of Xxxxxxxxx'x right, title and interest in and
to such Intellectual Property.
(h) PROXY FOR VOTING OF COMMON STOCK. With respect to (i) the election
of directors of the Corporation and (ii) compensation packages for directors of
the Corporation, including any stock option plans for directors, Xxxxxxxxx, by
this Agreement, does hereby constitute and appoint AVR, or any nominee thereof,
with full power of substitution, during the period commencing on the date hereof
until the Expiration Date (as defined below) as his true and lawful attorney and
proxy for and in his name, place and xxxxx, to vote all the shares of Common
Stock of AVR Xxxxxxxxx beneficially owns, directly or indirectly (the "Shares"),
at the time of such vote, at any annual, special or adjourned meeting of the
stockholders of the Corporation (and this appointment will include the right to
sign on his behalf (as a stockholder) any consent, certificate or other document
relating to AVR that laws of the State of Delaware may require or permit).
Xxxxxxxxx acknowledges that this proxy shall be irrevocable until the Expiration
Date and is coupled with an interest sufficient at law to support an irrevocable
proxy and is being given to AVR as an inducement to enter into this Agreement.
For shares of Common Stock of the Corporation as to which Xxxxxxxxx is
the beneficial but not the record owner, Xxxxxxxxx, immediately following the
execution of this Agreement, shall use all commercial efforts to cause any
record owner of such shares to grant to AVR an irrevocable proxy identical to
the irrevocable proxy being granted by Xxxxxxxxx to AVR hereunder. For purposes
of this section, "Expiration Date" shall mean the earlier to occur of (i) two
years from the date hereof or (ii) as to those Shares sold, the date of the sale
of such Shares by Xxxxxxxxx to one or more unrelated third parties in a bona
fide sale after Xxxxxxxxx shall have first complied with AVR's right of first
refusal set forth in Section 4 hereof.
(i) BOOKS AND RECORDS. Xxxxxxxxx represents and warrants that he has
caused to be delivered to the Corporation's Yonkers, New York offices (the "New
York Offices"), prior to the date hereof, all material books and records, in any
form or media, of the Corporation relating in a meaningful way to the business
and affairs of the Corporation that, to the best of Xxxxxxxxx'x knowledge, were
located in the Corporation's Florida offices or that were otherwise under
Xxxxxxxxx'x direct or indirect control (collectively, the "Books and Records").
Included in the Books and Records is information relating to all banking and
checking accounts maintained by the Corporation in Florida and the contents of
all safe deposit boxes and other vaults maintained
4
or utilized by the Corporation in Florida, including, without limitation, the
contents of the safe deposit box maintained by the Corporation in Sarasota,
Florida. Xxxxxxxxx further represents and warrants that included in the Books
and Records are originals (or copies), to the best of his knowledge, of all
stock option and warrant records relating to the Corporation and all material
written agreements (and written summaries of all material oral agreements)
between the Corporation and any of A.V.R. Canada Inc., Plata Partners Limited
Partnership, D.C.T. SRL, CURE Inc., AVIX Inc., Commonwealth Pharmaceuticals and
any other similar distributor.
(j) MISCELLANEOUS OTHER AGREEMENTS. Xxxxxxxxx represents and warrants,
to the best of his knowledge, that (i) the Corporation is not indebted to, nor
have any amounts accrued from the Corporation for the benefit of, Judge Xxxxxx
Xxxxxx (other than in the ordinary course of business consistent with past
practice) and (ii) no employment agreement exists between the Corporation and
any worker at the Corporation's Bahamian manufacturing facility other than Xx.
Xxxxxxx Xxxxxx.
(k) FLORIDA LEASE. Xxxxxxxxx represents and warrants, to the best of
his knowledge, that (i) the lease for the Corporation's Florida offices expires
in December 2001, (ii) that such lease has not been renewed by the Corporation
and cannot be renewed unilaterally without the Corporation's consent, (iii) all
amounts accrued or otherwise currently due under such lease have been paid to
date and (iv) the December 2001 rent payment under such lease (which is the
final rent payment due under such lease) does not exceed $5,000.
(l) ASSIGNMENT OF LIFE INSURANCE. Xxxxxxxxx covenants that following
his execution of this Agreement, Xxxxxxxxx will reasonably assist the
Corporation in effecting Xxxxxxxxx'x assignment to the Corporation of
Xxxxxxxxx'x 20% beneficiary interest in the life insurance policy currently
maintained by the Corporation covering Xxxxxxxxx'x life.
(m) FURTHER ASSISTANCE. Following the execution of this Agreement, each
of Xxxxxxxxx and the Corporation, from time to time at the other's request, and
without further consideration, shall execute and deliver to the other such
documents and instruments and take such other action as the other party may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.
3. RESTRICTION AGAINST TRANSFER.
Except with respect to a Permitted Transfer (as defined below),
Xxxxxxxxx agrees that he will not transfer, assign, hypothecate, or in any way
alienate any of his Shares, or any right or interest therein, whether
voluntarily or by operation of law, or by gift or otherwise, unless in a
transfer that meets the requirements of this Agreement. Any purported transfer
in violation of any provision of this Agreement shall be void and ineffectual,
shall not operate to transfer any interest or title in the purported transferee,
and shall give the Corporation a right to purchase such Shares in the manner and
on the terms and conditions provided for herein. For purposes hereof, a
"Permitted Transfer" means a transfer, sale, assignment or other disposition,
with or without consideration, of the Shares to any spouse, member of
Xxxxxxxxx'x family, or to a custodian, trustee (including a trustee of a voting
trust), executor, or other fiduciary for the account of Xxxxxxxxx'x spouse, or
members of Xxxxxxxxx'x family, or to a trust, the primary beneficiary of which
is Xxxxxxxxx or a member of Xxxxxxxxx'x family. Notwithstanding the
5
foregoing, no Permitted Transfer shall be valid or effective unless and until
the transferee of the Shares in question agrees in writing with the Corporation
to be bound by the provisions of Sections 2(h), 3, 4 and 5 hereof. Further, and
notwithstanding anything to the contrary set forth herein, the parties agree
that Xxxxxxxxx may freely transfer, sell or otherwise dispose of an aggregate of
250,000 Shares outside of, and without giving effect to, the restrictions on
transfer and other provisions set forth in Sections 2(h), 3 and 4 of this
Agreement.
4. RIGHT OF FIRST REFUSAL.
(a) "OFF THE MARKET" TRANSACTION. In the event Xxxxxxxxx receives a
bona fide offer (whether or not such offer is derived from Xxxxxxxxx'x
solicitation) for the purchase of all or a portion of his Shares (or any rights
or interests therein) in a privately negotiated "off the market" transaction,
Xxxxxxxxx shall give written notice of such offer to the Corporation in the
manner and at the address set forth in Section 7(i) hereof. The notice must set
forth the name of the proposed transferee, the number of Shares to be
transferred, the price per Share, and all other terms and conditions of the
proposed transfer (no non-cash consideration may comprise a portion of the
offer). On receipt of the notice with respect to such offer, the Corporation
shall have the exclusive right and option, exercisable at any time for two
business days from the time of the Corporation's receipt of said notice, to
purchase the Shares of the Corporation covered by the offer in question (the
"Offered Shares") at the same price and on the same terms and conditions of the
offer as set out in such notice. The Corporation's right to purchase Shares as
provided in this Section 4(a) shall expire 12 months from the date hereof.
(b) "ON THE MARKET" TRANSACTION. In the event Xxxxxxxxx receives a bona
fide offer (whether or not such offer is derived from Xxxxxxxxx'x solicitation)
for the purchase of Shares which, when combined with all other Shares sold by
Xxxxxxxxx in the prior three (3) months, exceeds the greater of: (i) 1% of the
outstanding shares of common stock of the Corporation, or (ii) the average
weekly trading volume of the Common Stock over the immediately preceding four
weeks, in a transaction which is executed as an "on the market" transaction,
Xxxxxxxxx shall give written notice of such offer to the Corporation in the
manner and at the address set forth in Section 7(i) hereof. The notice must set
forth the number of Shares to be transferred, the price per Share, and all other
terms and conditions of the proposed transfer (no non-cash consideration may
comprise a portion of the offer). On receipt of the notice with respect to such
offer, the Corporation shall have the exclusive right and option, exercisable at
any time for two business days from the time of the Corporation's receipt of
said notice, to purchase that number of Offered Shares, at the same price and on
the same terms and conditions of the offer as set out in such notice. The
Corporation's right to purchase Shares as provided in this Section 4(b) shall
expire six (6) months from the date hereof.
(c) EXERCISE OF RIGHTS. If the Corporation elects to exercise its
rights set forth in Sections 4(a) or (b) above, the Corporation shall (i) give
written notification to this effect to Xxxxxxxxx, (ii) deposit the required
purchase price in an escrow account (with a mutually acceptable escrow agent)
within one business day from the time of the Corporation's receipt of said
notice, and (iii) consummate the sale and purchase within two business days
thereafter. If the Corporation does not elect to exercise its rights to purchase
any or all of the Offered Shares, Xxxxxxxxx shall have the right, for the five
business day period following the expiration of the Corporation's right of first
refusal exercise period, to transfer all of the Offered Shares free and clear of
6
any restrictions against transfer that might otherwise have been created by this
Agreement. If Xxxxxxxxx does not transfer all of the Offered Shares in strict
compliance with this Section 4(c), any other disposition of Shares by Xxxxxxxxx
must be made pursuant to a new bona fide offer and subject to the timing and
other provisions of this Section 4.
(d) CERTIFICATE TO BE HELD IN ESCROW. Whenever the Corporation
purchases Shares pursuant to this Agreement, such Shares shall be held in escrow
by a mutually acceptable escrow agent, until full payment for said Shares shall
have been made to Xxxxxxxxx, at which time said Shares shall be transferred to
the Corporation by the escrow agent. Subject to the terms of this Agreement, if
the Corporation defaults in the payment of the purchase price for the Shares
purchased pursuant to this Agreement, Xxxxxxxxx may elect to rescind such
purchase. In the event of a rescission, the Shares held in escrow shall be
returned to Xxxxxxxxx, and all monies paid by the Corporation on account of the
purchase price shall be retained by Xxxxxxxxx as liquidated damages.
5. NONDISCLOSURE OF CONFIDENTIAL INFORMATION AND NO DISPARAGEMENT.
(a) CONFIDENTIAL INFORMATION. Xxxxxxxxx agrees that he will not at any
time, in any fashion, form or manner, either directly or indirectly, divulge,
disclose or communicate to any person, firm or corporation, in any manner
whatsoever, any Confidential Information of the Corporation, as defined below.
Xxxxxxxxx understands that Confidential Information means (i) information,
including, but not limited to, technical or nontechnical data, formulae,
pattern, compilation, program, device, method, technique, drawing, process,
financial data or list of actual or potential customers or suppliers, that is
sufficiently secret to derive economic value, actual or potential, from not
being generally known to other persons who can obtain economic value from its
disclosure or use, and (ii) any other information regarding the Corporation
which has not been disseminated to the public through a press release of the
Corporation or included in one of the Corporation's regulatory filings with the
Securities and Exchange Commission.
Without limiting the generality of the foregoing nondisclosure
provisions, Xxxxxxxxx specifically agrees that such nondisclosure provisions
apply to customer lists, formulae, names and addresses of suppliers and
distributors, business procedures and practices, and any other information
concerning the business of the Corporation which is or may from time to time be
designated as confidential by an authorized representative of the Corporation.
(b) MATERIALITY. Xxxxxxxxx further agrees that the matters in this
Section 5 are important, material and confidential, and gravely affect the
effective and successful conduct of the business of Corporation and its
goodwill, and that any breach of the terms of this Section 5 is a material
breach of this Agreement and will subject Xxxxxxxxx to court orders as to
affirmative acts necessary to protect any Confidential Information and to
damages on account of losses actually incurred by the Corporation.
(c) BINDING NATURE. Xxxxxxxxx further agrees that his promise not to
disclose any Confidential Information of the Corporation will be binding upon
him both during the period that this Agreement is in effect and at all times
thereafter, excepting any disclosure expressly authorized in writing by the
Corporation.
7
(d) REMEDIES. In the event that Xxxxxxxxx fails to comply with, or
threatens not to comply with, any provision of this Section, the Corporation
shall be entitled to an injunction requiring such affirmative acts from
Xxxxxxxxx as may be necessary to enforce such paragraph, and further restraining
Xxxxxxxxx from disclosing or exploiting, in whole or in part, any Confidential
Information of the Corporation, or from rendering any services to any person,
firm, corporation, association or other entity to whom such Confidential
Information, in whole or in part, has been disclosed or by whom it has been
exploited or is threatened to be disclosed or exploited. Nothing herein shall be
construed as prohibiting the Corporation's pursuit of other remedies for such
noncompliance or threatened noncompliance, including the recovery of damages
from Xxxxxxxxx.
(e) PROPERTY OF THE CORPORATION. All notes, records, drawings,
documents or writings made or compiled by Xxxxxxxxx or made available to
Xxxxxxxxx while employed by the Corporation concerning any Confidential
Information shall be the property of the Corporation, and shall be delivered to
the Corporation on the date hereof (if not previously delivered to the
Corporation).
(f) AGREEMENT NOT TO DISPARAGE. From and after the date hereof, each of
Xxxxxxxxx and the Corporation agrees that he and it shall not say, write or
communicate in any manner to any person or entity anything derogatory about the
other, regardless of the truth or falsity of the information nor shall either
take any action which could reasonably result in the other suffering any
economic harm; provided, that nothing herein is intended to or shall limit the
Corporation's or Xxxxxxxxx'x ability to comply with applicable laws, rules or
regulations.
6. NONCOMPETE.
(a) For a period of three (3) years commencing on the date hereof,
Xxxxxxxxx shall not at any time or place or to any extent whatsoever, either
directly or indirectly, without the express prior written consent of the
Corporation, engage in any business, calling, or enterprise which is or may be
competitive with or adverse to the business or affairs of the Corporation,
whether alone, as a partner, or as an officer, director, employee, or
shareholder of any other corporation, or as a trustee, fiduciary, or other
representative, except under and pursuant to this Agreement. For purposes of
this Agreement, the parties agree that the business or affairs of the
Corporation means the development, production, distribution or other
commercialization of any pharmaceutical product which is a derivative of a
peptide nucleic acid formulation. Notwithstanding the foregoing, the parties
acknowledge that nothing contained herein shall prohibit Xxxxxxxxx from
acquiring equity securities of a publicly held entity engaged in activities
which are similar to, or competitive with, the business or affairs of the
Corporation which in the aggregate do not exceed 5% of the issued and
outstanding equity securities of such publicly held entity.
(b) Without limiting the generality of the foregoing, Xxxxxxxxx will
not, without the Corporation's prior written approval, directly or indirectly,
for Xxxxxxxxx'x own account, or as an agent or employee of another person,
partnership or corporation, canvass, solicit or accept business from any client
or customer or former client of the Corporation, or in any business then engaged
in by the Corporation. For such period, Xxxxxxxxx will not accept business or
employment for the account of Xxxxxxxxx or others without the prior written
8
consent of the Corporation, which consent shall not be unreasonably withheld if
Xxxxxxxxx agrees in writing to restrict such activities so as not to compete
with the Corporation, for example, by limiting Xxxxxxxxx'x activities to a
single corporation which had not been an actual or prospective client or
customer of the Corporation and does not compete with the Corporation.
(c) Xxxxxxxxx further agrees that, during the term set forth in Section
6(a) hereof, Xxxxxxxxx will not employ, engage or contract for services any
individual employed by the Corporation or under contract with the Corporation as
an independent contractor, representative or distributor of the Corporation
during the term of this Agreement without the prior written consent of the
Corporation.
(d) Xxxxxxxxx consents and agrees that if Xxxxxxxxx violates any of the
provisions of the preceding subparagraphs of this Section, the Corporation
shall, in addition to any other remedies it has at law and in equity, be
entitled to an injunction to be issued by a court or arbitrator of competent
jurisdiction, said injunction to restrain Xxxxxxxxx from committing or
continuing any violation of such provisions. In the event that a court or
arbitrator of competent jurisdiction determines that any covenant contained
herein is too broad in scope or duration, it is the desire of both Xxxxxxxxx and
the Corporation to have such covenant enforced to the maximum extent permitted
by law.
7. MISCELLANEOUS.
(a) This Agreement represents the entire agreement between the parties
with respect to all matters expressed or referred to herein; all prior
representations, promises or statements between the parties regarding such
matters shall hereby merge with this Agreement.
(b) No amendments of or additions to this Agreement shall be binding
unless in writing and signed by both parties, except as herein otherwise
provided.
(c) 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 Florida court sitting in the County of
Miami-Dade or any Federal court of the United States sitting in the Southern
District of Florida in any suit, action or proceeding arising out of or relating
to this Agreement.
(d) 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.
(e) The waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent breach
of the same or any other provisions of this Agreement.
(f) 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.
9
(g) 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.
(h) In the event that performance by either the Corporation or
Xxxxxxxxx of any obligations or undertakings hereunder shall be interrupted or
delayed by any occurrence not occasioned by the conduct of such party, whether
such occurrence be an act of God or an act of the common enemy or the result of
war, riot, civil commotion, sovereign conduct, or the act or conduct of any
person or persons not party or privy hereto, then the party concerned shall be
excused from such performance for such period of time as is reasonably necessary
after such occurrence to remedy the effects thereof.
(i) All notices required, permitted or desired to be given under this
Agreement shall be deemed given if in writing and sent by certified mail, return
receipt requested, or by facsimile, to the parties at the following addresses,
or to such other addresses as either party may designate in writing to the
other:
If to the Corporation: Advanced Viral Research Corp.
000 Xxxxxxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: President
Facsimile: 000-000-0000
If to Xxxxxxxxx: Xxxxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
(j) Unless otherwise required by law, any press release concerning the
transactions contemplated by this Agreement will be subject to the review and
approval of Xxxxxxxxx, which approval Xxxxxxxxx shall not unreasonably withhold.
(k) If any term, condition, or provision of this Agreement shall be
declared invalid or unenforceable, the remainder of the Agreement, other than
such term, condition, or provision, shall not be affected thereby and shall
remain in full force and effect and shall be valid and enforceable to the
fullest extent provided by law.
10
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
all as of the day and year first above written.
ADVANCED VIRAL RESEARCH CORP.
By: /s/ Xxxxxx X. Xxxxxxxxx, M.D.
-----------------------------
Xxxxxx X. Xxxxxxxxx, M.D., President
/s/ Xxxxxxx Xxxxxxxxx
-------------------------
Xxxxxxx Xxxxxxxxx
For purposes of Section 2(c) only:
/s/ Xxxxxx X. Xxxxxxxxx, M.D.
-----------------------------
Xxxxxx X. Xxxxxxxxx, M.D.
11
