Termination Agreement
This
Agreement is made by and between Nutra Pharma Corp., a California Corporation
(“the Company”), with an address of 0000 Xxxx Xxxxx Xxxx, Xxxxxxx Xxxxx, XX
00000 (“the Company”), and Xxxxxxx & Company, LLC, a Delaware limited
liability company (“Xxxxxxx & Company”) and Xxxxxxx Xxxxxxx, an individual
(“Xxxxxxx”). Xxxxxxx & Company, LLC and Xxxxxxx are referred to herein
individually or collectively as “the Xxxxxxx Entities.”
WHEREAS,
the Company and the Xxxxxxx Entities have maintained a business relationship
whereby the Xxxxxxx Entities have provided certain services to the Company
for a
period of time pursuant to various written agreements; and
WHEREAS,
the Company and the Xxxxxxx Entities now desire to terminate the business
relationship and agreements between them as set forth herein.
NOW,
THEREFORE, for and in consideration of good and valuable consideration, the
receipt of which is hereby acknowledged, the Company and the Xxxxxxx Entities,
intending to be legally bound, mutually agree as follows:
1.
Acknowledgment of Entire Agreement.
All
written or oral understandings, agreements, covenants, promises, or arrangements
between the Xxxxxxx Entities and the Company are set forth in the following
written agreements dated as of June 1, 2005: (i) the Agreement titled “Letter
Agreement” by and between the Company and the Xxxxxxx Entities whereby Xxxxxxx
was appointed as the Company’s Executive Chairman (“the Letter Agreement”) and
which granted Xxxxxxx & Company thirteen million six hundred thousand
(13,600,000) options to purchase common stock (“the 13,600,000 Options”); (ii)
the Agreement titled “Option to Purchase” by and between the Company and Xxxxxxx
& Company (“the Option to Purchase Agreement”) which is also designated as
Exhibit A to the Letter Agreement in (i) above; (iii) the untitled Financing
Agent Agreement between the Company and Xxxxxxx whereby Xxxxxxx was appointed
the Financing Agent for the Company (“the Financing Agent Agreement”); and (iv)
the untitled Indemnification Agreement between the Company and Xxxxxxx &
Company. The Letter Agreement, the Option to Purchase Agreement, the Financing
Agent Agreement, and the Indemnification Agreement are collectively referred
to
herein as “the Xxxxxxx Agreements.” It is understood and acknowledged by the
Company and the Xxxxxxx Entities that the Xxxxxxx Agreements are the only
agreements and understandings of the parties, and there are no other written
or
oral understandings, agreements, covenants, promises, obligations or
arrangements, directly or indirectly, between the parties except as set forth
herein.
2.
Termination of Xxxxxxx Agreements.
The
Company and Xxxxxxx agree that the employment and/or contractual relationship
established by the Xxxxxxx Agreements shall terminate and cease as of the
execution of this Termination Agreement (“the Termination Agreement”) and the
Company shall not be obligated to provide any benefits or pay any compensation
or consideration now or at
any
time
in the future including but not limited to salaries, commissions,
reimbursements, expenses, sums of any nature, securities of any nature,
including common stock, warrants and/or options to purchase common stock, to
the
Xxxxxxx Entities whether accrued or unaccrued, billed or unbilled, due or not
due, delivered or not delivered pursuant to the Xxxxxxx Agreements. Any
provision or obligation contained or arising out of any provision in any of
the
Xxxxxxx Agreements which survived the termination of those agreements including
any duty or obligation of the Company to provide now or at any time in the
future any payment, benefit, indemnification, contribution, or defense to the
Xxxxxxx Entities or to any third party is hereby terminated. Any provision
in
the Xxxxxxx Agreements relative to the manner, method, timing, notification
of,
or necessity to establish cause for termination of the Xxxxxxx Agreements or
any
portion thereof are considered to have been complied with and/or waived by
the
Xxxxxxx Entities.
3.
Resignation by Xxxxxxx.
Xxxxxxx
hereby tenders, and the Company accepts, Xxxxxxx'x resignation from any and
all
positions that Xxxxxxx may currently hold with the Company as a result of the
Letter Agreement, including Xxxxxxx'x position as the Company’s Executive
Chairman, Chairman of the Board, or any and all other positions, effective
upon
execution hereof. The Xxxxxxx Entities represent that they have not entered
into
any agreement on behalf of the Company designed to bind the Company to any
contract or transaction. Upon execution hereof, the Xxxxxxx Entities hereby
forfeit and release all claims and rights of ownership of the 13,600,000 Options
and request cancellation of all of the 13,600,000 options granted to the Xxxxxxx
Entities pursuant to the Option to Purchase Agreement and the Letter Agreement
regardless of whether any of the foregoing options have vested, been exercised
or been delivered to the Xxxxxxx Entities.
4.
Ownership of the 13,600,000 Options.
The
Xxxxxxx Entities represent that until the time of execution of this Termination
Agreement by all parties, Xxxxxxx & Company was the sole beneficial owner of
the 13,600,000 Options and no portion of the 13,600,000 Options has been
promised, assigned, sold, pledged, or otherwise transferred to any third
party.
5.
Resignation of Xxxxxxx & Company.
Xxxxxxx
& Company hereby tenders, and the Company accepts, its resignation from any
and all positions Xxxxxxx & Company may currently hold with the Company as a
result of the Financing Agreement, including but not limited to the Company’s
agent and investment banker. Xxxxxxx & Company represents that Xxxxxxx &
Company has not consummated any financing on behalf of or for the Company.
Xxxxxxx & Company waives any right to receive any future compensation
pursuant to Paragraph 7 of the Financing Agreement and no portion of the
Financing Agreement shall survive its termination hereunder.
6.
In
connection with the Xxxxxxx Agreements, the Xxxxxxx Entities represent
that:
i.
No
party is owed a fee of any type for any services provided by
Xxxxxxx;
ii.
The
Xxxxxxx Entities have not entered into any agreement of any nature on behalf
of
the Company; and
iii.
The
Xxxxxxx Entities have not undertaken any acts that create any liability or
obligation of any type of the Company.
7.
Consideration to Xxxxxxx.
x.
Xxxxx.
In
consideration for entering into this Termination Agreement, the Company, upon
execution hereof, hereby grants to Xxxxxxx & Company, options to purchase
two million (“2,000,000”) shares of the Company's common stock (“the 2006
Option”) upon the terms and conditions set forth herein (the “2006 Option
Shares”). The Xxxxxxx Entities agree that the Company's grant of the 2006 Option
Shares is in full accord and satisfaction of any obligations, claims, sums,
amounts and/or disputes that the Xxxxxxx Entities may have with the Company.
The
Xxxxxxx Entities understand, covenant, and agree that the terms of this
Termination Agreement, and the 2006 Option is the sole consideration for this
Termination Agreement and that the Xxxxxxx Entities accept said consideration
for the purpose of making a full and final compromise, adjustment and settlement
of all claims for injuries, losses, and damages resulting, or to result, from
any claims against the Company.
ii.
Vesting.
The
2006
Option shall vest upon execution of this Termination Agreement and shall be
exercisable at any time from the date of execution of this Termination Agreement
until May 31, 2010.
iii.
Exercise Price.
The
exercise price (the “Exercise Price”) for each share of Common Stock covered by
the 2006 Option shall be $0.27 per Common Share.
iv.
Partial Exercise. Subject to the terms of this Termination Agreement, the 2006
Option may be exercised for all or any part of the 2006 Option
Shares.
v.
Method
of Exercising Option.
The
2006
Option, or any portion thereof, may be exercised by the Xxxxxxx Entities by
delivering to the Company at its main office (to the attention of the Company's
President) written notice of the number of shares of common stock with respect
to which the Option is being exercised and by paying in full the purchase price
of the shares of stock so purchased.
vi.
Assignability of Options.
Xxxxxxx
& Company may assign the 2006 Option granted hereunder.
vii.
Expiration.
The
2006
Option shall in no event be exercisable after May 31, 2010.
viii.
Issuance of Stock Certificates upon Exercise.
Subject
to the Provisions of this Termination
Agreement,
upon receipt by the Company of the Exercise Price for any portion of the 2006
Option, the Company shall issue to the Xxxxxxx Entities shares of common stock
equal to the number of common shares purchased under the 2006
Option.
ix.
No
Rights as a Shareholder.
The
Xxxxxxx Entities shall not have any rights as a shareholder regarding any shares
of common stock covered by the 2006 Option until the issuance of a stock
certificate for such shares. No adjustment shall be made on the issuance of
a
stock certificate to the Xxxxxxx Entities as to any dividends or other rights
for which the record date occurred prior to the date of issuance of such
certificate by the Company's transfer agent.
x.
Adjustment of Options.
The
grant
of the 2006 Option shall not affect in any way the right or power of the Company
to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge, consolidate, dissolve, liquidate,
sell or transfer all or any part of its business or assets. The Company shall
have the sole discretion to make all interpretations and determinations required
under this Paragraph to the extent it deems equitable and
appropriate.
8.
Indemnification
i. Indemnification
Generally.
For
a
period of six months after the date of execution of this Agreement, the Company
shall indemnify the Xxxxxxx Entities from and against any and all losses,
damages, liabilities, claims, charges, actions, proceedings, demands, judgments,
closing costs and expenses resulting from services provided by the Xxxxxxx
Entities pursuant to the Xxxxxxx Agreements. Notwithstanding the foregoing,
the
Company shall not be liable for any losses to the extent such Losses arise
out
of, result from or are increased by, the breach of this Agreement by, or the
fraudulent acts or gross negligence of the Xxxxxxx Entities or in the event
of
any breach by the Xxxxxxx Entities of a representation, warranty or covenant
of
the Xxxxxxx Agreements.
ii. Indemnification
Procedures. In the event, the Xxxxxxx Entities are entitled to indemnification,
it shall give notice as promptly to the Company of the commencement of any
action, suit, proceeding or investigation or threat thereof made in writing
in
respect of which indemnity may be sought hereunder. Upon such notification,
the
Company Party shall assume the defense of such action if it is a claim brought
by a third party, and after such assumption the Xxxxxxx Entities shall not
be
entitled to reimbursement of any legal expenses incurred by it in connection
with such action except as described below. In any such action, the Xxxxxxx
Entities Party shall have the right to retain its own counsel, but the fees
and
expenses of such counsel shall be at the expense of the Xxxxxxx Entities unless:
(a) the Xxxxxxx Entities and the Company shall have mutually agreed in writing
to the contrary, or (b) the named parties in any such action (including any
impleaded parties) include both the Company and Xxxxxxx and the representation
of both parties by the same counsel would be inappropriate due to actual
conflicting interests between them. The Company if it is not entitled to, or
elects not to, assume the defense of a claim shall not be obligated to pay
the
fees and expenses of more than one counsel in any one jurisdiction for all
parties indemnified by the Company with respect to such claim, unless
in
the
reasonable judgment of the Company an actual conflict of interest may exist
with
respect to such claim, in which event the Xxxxxxx Entities shall be obligated
to
pay the fees and expenses of such additional counsel or counsels. The Company
shall not be liable for any closing of any proceeding effected without its
written consent (which shall not be unreasonably withheld or delayed by such
Indemnifying Party), but if settled with such consent or if there be final
judgment for the plaintiff, the Company shall indemnify the Xxxxxxx Entities
from and against any Losses.
9.
Restrictive Covenants.
i.
The
Xxxxxxx Entities agree to hold and safeguard all trade secrets, proprietary
information, and confidential information of the Company in trust and confidence
for the Company. The Xxxxxxx Entities agree that they shall not misappropriate,
disclose, or make available to any person or any entity for use at any time
any
of the said information, and the Xxxxxxx Entities agree not to use any of the
said information, whether or not it was developed by the Xxxxxxx Entities,
to
their own advantage or to the advantage of others.
ii.
The
Xxxxxxx Entities agree that all records, drawings, data, samples, models,
correspondence, manuals, notes, reports, notebooks, proposals, and any other
documents concerning the Company's customers, products, processes, technical
information or business information used by the Company and any other tangible
materials or copies or extracts of tangible materials regarding the Company's
operations or business, testing, formulations or product development received
by
the Xxxxxxx Entities during their contractual relationship with the Company
are,
and shall be, property of the Company exclusively. Xxxxxxx agrees to immediately
return to the Company all of the material mentioned above, including written
notes, memorandums, or notes taken by Xxxxxxx and all tangible materials,
including, without limitation, correspondence, drawings, manuals, letters,
notebooks, reports, flow-charts, programs, and proposals. No copies will be
made
by the Xxxxxxx Entities, or retained by the Xxxxxxx Entities, of any written
information obtained, whether or not developed by the Xxxxxxx Entities.
10.
Breach by Xxxxxxx Entities.
In
the
event of a breach by the Xxxxxxx Entities of the terms of this Termination
Agreement, the Company shall be entitled, if it shall so elect, to institute
legal proceedings to obtain damages for any such breach, or to enforce the
specific performance of this Termination Agreement by Xxxxxxx and to enjoin
Xxxxxxx from any further violation of this Termination Agreement and to exercise
such remedies cumulatively or in conjunction with all other rights and remedies
provided by law. Xxxxxxx acknowledges, however, that the remedies at law for
any
breach by the Xxxxxxx Entities of the provisions of this Termination Agreement
may be inadequate and that the Company shall be entitled to injunctive relief
against them in the event of any breach. If the Company prevails in a proceeding
for damages or injunctive relief, Xxxxxxx agrees that the Company, in addition
to other relief, shall be entitled to the following in connection with the
Xxxxxxx Entities’ (either individually or collectively) violations of any terms
of this Termination Agreement: (a) reasonable attorney fees, costs, and the
expenses of litigation incurred by the Company in securing the relief granted
by
the Court; (b) the cancellation of the right to exercise any part of the 2006
Option that remains unexercised at the time; (c) repayment of all profits earned
by Xxxxxxx from the options, said profits to be determined by taking the
difference between the exercise price and the per share price for such shares
as
were sold by the Xxxxxxx Entities.
11.
Choice of Law and Venue.
Law
and
Arbitration.
This
Termination Agreement shall be governed by and construed in accordance with
the
laws of the State of Florida applicable to contracts executed and performed
in
such State, without giving effect to conflict of law principles. All
controversies, claims and matters of difference arising between the parties
under this Termination Agreement shall be submitted to binding arbitration
in
Palm Beach County, Florida under the Commercial Arbitration Rules of the
American Arbitration Association ("the AAA") from time to time in force (to
the
extent not in conflict with the provisions set forth herein). This agreement
to
arbitrate shall be specifically enforceable under applicable law in any court
of
competent jurisdiction. Notice of the demand for arbitration shall be filed
in
writing with the other parties to this Termination Agreement and with the AAA.
Once the arbitral tribunal has been constituted in full, a hearing shall be
held
and an award rendered as soon as practicable. The demand for arbitration shall
be made within a reasonable time after the claim, dispute or other matter in
question has arisen, and the parties are not making progress toward a
resolution. In no event shall it be made after the date when institution of
legal or equitable proceedings based on such claim, dispute or other matter
would be barred by the applicable contractual or other statutes of limitations.
The parties shall have reasonable discovery rights as determined by the
arbitration. The award rendered by the arbitrators shall be final and judgment
may be entered in accordance with applicable law and in any court having
jurisdiction thereof. The decision of the arbitrators shall be rendered in
writing and shall state the manner in which the fees and expenses of the
arbitrators shall be borne.
12.
Counterparts.
This
Termination Agreement may be executed in two or more 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.
This Termination Agreement, once executed by a party, may be delivered to the
other parties hereto by facsimile transmission of a copy of this Termination
Agreement bearing the signature of the party so delivering this Termination
Agreement. In the event any signature is delivered by facsimile transmission,
the party using such means of delivery shall cause the manually executed
Execution Page(s) hereof to be physically delivered to the other party within
five (5) days of the execution hereof, provided that the failure to so deliver
any manually executed Execution Page shall not affect the validity or
enforceability of this Termination Agreement.
13.
Headings.
The
headings of this Termination Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Termination
Agreement.
14.
Severability.
If
any
provision of this Termination 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 Termination Agreement or the validity
or enforceability of this Termination Agreement in any other
jurisdiction.
15.
Entire Agreement; Amendments.
This
Termination Agreement and the instruments referenced herein contain the entire
understanding of the Xxxxxxx Entities, and the Company, their affiliates and
persons acting on their behalf with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor Xxxxxxx Entities makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Termination
Agreement may be waived other than by an instrument in writing signed by the
party to be charged with enforcement and no provision of this Termination
Agreement may be amended other than by an instrument in writing signed by the
Company and the Xxxxxxx Entities.
16.
Notices. Any notices required or permitted to be given under the terms of this
Termination Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally, by responsible overnight carrier
or
by confirmed facsimile, and shall be effective five (5) days after being placed
in the mail, if mailed, or upon receipt or refusal of receipt, if delivered
personally or by responsible overnight carrier or confirmed facsimile, in each
case addressed to a party. The addresses for such communications shall
be:
If
to the
Company:
0000
Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, Xxxxxxx 00000
Attn:
Xxx
Xxxxxxx
Chief Executive Officer
If
to
Xxxxxxx Xxxxxxx to:
Xxxxxxx
Xxxxxxx
0000
Xxxxxx xx Xxxxx
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Suite
#1800
If
to
Xxxxxxx & Company to:
Xxxxxxx
& Company, LLC
Same
___________________
___________________
Attn:
Xxxxxxx Xxxxxxx
17.
Successors and Assigns.
This
Termination Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns. Except as provided herein or therein,
the Xxxxxxx Entities may not assign this Termination Agreement or any rights
or
obligations hereunder.
18.
Further Assurances.
The
Xxxxxxx Entities 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
Termination 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 Termination Agreement.
19.
Waivers.
No
delay
on the part of any party in exercising any right, power, or privilege hereunder
shall operate as a waiver thereof. Nor shall any waiver on the part of any
party
of any such right, power or privilege, nor any single or partial exercise of
any
such right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. The rights and remedies
of
any party based upon, arising out of or otherwise in respect of any inaccuracy
in or breach by any other party of any representation, warranty, covenant or
agreement contained in this Termination Agreement shall in no way be limited
by
the fact that the act, omission, occurrence or other state of facts upon which
any claim of any such inaccuracy or breach is based may also be the subject
matter of any other representation, warranty, covenant or agreement contained
in
this Termination Agreement (or in any other agreement between the parties)
as to
which there is no inaccuracy or breach.
20.
Variations in Pronouns.
Wherever
the context shall so require, all words herein in the male gender shall be
deemed to include the female or neuter gender and vice versa, all singular
words
shall include the plural, and all plural words shall include the singular.
All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the context may require.
21.
Presumption Against Scrivener and Mutual Understandings.
Each
party waives the presumption that this Termination Agreement is presumed to
be
in favor of the party which did not prepare it, in case of a dispute as to
interpretation. This Termination Agreement has been freely and fairly negotiated
by the parties hereto and each party has been provided the opportunity to have
the Termination Agreement reviewed by legal counsel of their choice and to
modify the terms hereof and, therefore, this Termination Agreement shall be
construed and interpreted without any presumption,
or
other
rule, requiring construction or interpretation against the interest of the
party
causing this Termination Agreement to be drafted. This Termination Agreement
embodies the entire understanding between the parties and supersedes and cancels
all prior understandings and agreements, whether oral or written. The Xxxxxxx
Entities represent and verify that they have not breached any terms of the
Xxxxxxx Agreements. If it is later discovered that such representation is
untrue, then and in that event, the Company reserves the right to seek any
remedy permitted by the said Agreement and/or any existing laws notwithstanding
the language of this Termination Agreement. Additionally, the failure to
disclose such past or current breach and/or violations of such agreements shall
be considered a material breach of this Termination Agreement.
22.
Release.
The
Xxxxxxx Entities, their heirs, executors, administrators, successors and
assigns, whether herein named or referred to or not, do hereby release,
discharge, and acquit and by these presents does hereby release, acquit, and
forever discharge the Company, its successors and assigns, its agents, servants,
and its divisions, subdivisions, and affiliates, of and from any and all past,
present, and future claims, counterclaims, grievances, assertions, matters,
demands, actions, causes of action, liabilities, damages, costs, loss of
services, expenses, compensation, contracts, agreements, promises, covenants,
third-party actions, suits at law or in equity, of every nature and description,
whether known or unknown, suspected or unsuspected, foreseen, or unforeseen,
real or imaginary, actual or potential, and whether arising at law or in equity,
under the common law, state or federal law, or any other law, or otherwise,
including, but not limited to, any claims that have been or might have been
asserted as a result of the establishment or termination of the relationship
between the Company and the Xxxxxxx Entities, hereinafter collectively referred
to as the Xxxxxxx Claims. It is the intention of the parties hereto to effect
a
full and final complete release of all such Xxxxxxx Claims. It is expressly
understood and agreed that this Termination Agreement is intended to cover,
and
does cover, not only all now known injuries, losses, and damages, but any future
injuries, losses, and damages not now known or anticipated, but which may later
develop or be discovered, including all the effects and consequences
thereof.
23.
Attorney Fees. Each party to this Termination Agreement shall pay their own
attorney fees with respect to the drafting, negotiation, and execution of this
Termination Agreement.
IN
WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto
have executed this Agreement on this 30 day of March, 2006.
Witness:
/s/
Xxx X Xxxxxxx 4/1/06
By:
Xxx X
Xxxxxxx
Its:
President
XXXXXXX
& COMPANY, LLC
/s/
Xxxxxxx Xxxxxxx
By:
Xxxxxxx Xxxxxxx
Its:
President
/s/
Xxxxxxx Xxxxxxx
Xxxxxxx
Xxxxxxx
