Exhibit 10.11
AGREEMENT
AGREEMENT, dated as of November 6, 2003, by and between OPTIGENEX INC., a
Delaware corporation with offices at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
XX 00000 ("Buyer"), on the one hand, and Xx. XXXXXX XXXXXXXX of 00 Xxxx 00xx
Xxxxxx, Xxx. 0X, Xxx Xxxx, XX 00000 ("Apraxine"), Xx. Xxxxxxx X. X. Xxxxx as
executor of the ESTATE OF XXXX X. XXXXXXX of 0 Xxxxxxxxx Xxxx, Xxxxxxxxx, XX
00000 ("Xxxxxxx"), Xx. XXXXXXX XXXXXXXXX FLOOD of 00 Xxxxxxx Xxxxxxx, Xxxxxx XX
0, Xxxxxxx, Xxxxxx Xxxxxxx ("Flood") and Xx. XXXXX XXXXXX of 000 Xxxx Xxxxxxxx
Xxxx Xxxxx, Xxxx Xxxxxx, XX 00000 ("Xxxxxx") (Apraxine, Elliott, Flood and
Xxxxxx referred to herein jointly and severally as the "Original Owners"), on
the other hand.
WHEREAS, the Pero Family Limited Partnership, a Vermont limited partnership
("Pero"), acquired sole ownership of CampaMed Corp., a Delaware corporation (the
"Original CampaMed"), as a result of its acquisition of certain shares of stock
of the Original CampaMed from the Original Owners pursuant to that stock
purchase agreement between Pero and the Original Owners dated as of December 12,
1996, as amended by that amendment dated as of November 19, 1997 (the "Original
Agreement");
WHEREAS, the Original Agreement provided for the Original Owners to receive a
deferred payment to be paid out on a contingent basis in the form of a royalty
on sales relating to the exploitation of certain assets then owned by the
Original CampaMed, as specified in Schedule "A" to the Original Agreement (the
"Original Assets"), including without limitation any compound, substance or
ingredient derived or isolated from Cat's Claw (a/k/a Uncario Tormentosa) (a
"Cat's Claw Substance"), such as that product presently known as C-Med 100;
WHEREAS, the Original Assets were subsequently transferred to CampaMed LLC, a
New Jersey limited liability company ("Seller"), and Seller assumed the
aforementioned royalty obligation;
WHEREAS, Buyer now wishes to purchase the Original Assets from Seller (the
"Transaction") pursuant to an Asset Purchase Agreement dated November 6, 2003 by
and among Seller, Buyer and certain other parties (the "Acquisition Agreement");
and
WHEREAS, as part of the Transaction, Buyer and Seller wish to discharge the
aforementioned royalty obligation, to receive the Original Owners' approval of
the Transaction, and to obtain certain consulting services from the Original
Owners with respect to the "Acquired Assets" (such term when used herein to have
the same definition as it has in the Acquisition Agreement, such that it
includes, inter alia, all of the Original Assets); and the Original Owners are
willing to relinquish said royalty right, to grant such approval and to provide
such services, upon the terms set forth below;
NOW, THEREFORE, in consideration of the mutual promises contained herein and for
other good and valuable consideration received, the parties hereby agree as
follows:
1. Representations, Warranties & Covenants. (a) In order to induce Buyer to
enter into the Acquisition Agreement and to consummate the Transaction and to be
bound by the terms and conditions hereof, each of the Original Owners
represents, warrants, covenants and confirms the following:
(i) Annexed as Exhibit I hereto is a true, complete and correct copy of the
Original Agreement, including all exhibits, schedules, amendments and
supplements thereto
(ii) The Original Owners consent to the execution and delivery of the
Acquisition Agreement and to the consummation of the Transaction.
(iii) All shares of capital stock of the Original CampaMed not then owned by
Pero were acquired by Pero from the Original Owners under the Original Agreement
and Pero, as a result thereof, became the sole stockholder of the Original
CampaMed.
(iv) To the knowledge of the Original Owners, there is no entity known as
CampaMed Inc. or CampaMed Corporation that has or ever had any claim to title of
the Original Assets, and all references to "CampaMed Inc." and/or "CampaMed
Corporation" in the Original Agreement and related documents and communications
are intended to and should be deemed references to the Original CampaMed.
(v) Effective upon the closing of the Transaction (the "Closing"), each of the
Original Owners, on behalf of themselves and their successors and assigns,
waives, releases and relinquishes, in favor of Buyer, any right, claim, interest
and lien which any such party or any affiliate thereof now has or hereafter may
have in and to any of the Acquired Assets, whether or not such Acquired Assets
were the subject of the Original Agreement; provided, however, the foregoing
shall not be deemed to affect the non-exclusive nature of the rights granted
with respect to the medical herbarium list constituting part of the Original
Assets.
(vi) Other than the Original Agreement and this agreement, none of the Original
Owners is party to any agreement (or amendments or supplements thereto) relating
to the Original Assets and/or the Acquired Assets and none of the Original
Owners has sold, transferred or assigned any of its rights relating to the
Original Agreement and the Original Assets.
(b) In order to induce Buyer to enter into the Acquisition Agreement and to
consummate the Transaction and to be bound by the terms and conditions hereof,
Xxxxxxx X. X. Xxxxx, as executor of the Estate of Xxxx X. Xxxxxxx, represents
that said estate has not distributed and retains all of the rights held by Xxxx
X. Xxxxxx relating to the Original Agreement and the Original Assets.
(c) In order to induce the Original Owners to enter into this agreement, to
approve the Transaction, and to grant the consents and releases set forth
herein, Buyer hereby represents, warrants and confirms to each of the Original
Owners that:
(i) Annexed as Exhibit II hereto is a true, complete and correct copy of the
Acquisition Agreement, including all exhibits, schedules, amendments and
supplements thereto.
(ii) No agreements, undertakings, or understandings exist between Buyer (or any
affiliate) and Seller (or any affiliate) with respect to the Transaction or the
Original Assets other than the Acquisition Agreement, and the Acquisition
Agreement sets forth the entirety of the agreement between them in this regard.
(iii) Buyer has the full power and authority to enter into and perform this
agreement, and this agreement will not conflict with any other agreement to
which Buyer is a party, or otherwise violate any right of any third party.
(d) With respect to any breach by any party of its or his representations,
warranties and covenants hereunder, the breaching party hereby indemnifies the
other parties against any loss or damage, including reasonable attorneys' fees,
incurred by reason of said breach.
2. Waivers & Releases. (a) Subject to and effective upon Full Compliance (as
defined below), each of the Original Owners waives all defaults (and all rights
and remedies with respect thereto), if any, which have arisen under the Original
Agreement, including without limitation all defaults, if any, under Section 4 of
the aforementioned amendment to the Original Agreement.
(b) At or before the Closing, outstanding royalties due under the Original
Agreement in the amount of $20,000 will be paid by Buyer to the Original Owners
(by delivering a set of certified checks made payable to the order of each
Original Owner for his respective percentage share thereof, as specified in
Schedule "B"); and releases (i) executed respectively by Pero, Seller and the
Original CampaMed in favor of the Original Owners in the form annexed hereto as
Exhibit III; (ii) executed by the Original Owners in favor of the CampaMed
Parties in the form annexed hereto as Exhibit IIIA; and (iii) executed by the
Original Owners in favor of Buyer in the form annexed hereto as Exhibit IIIB,
will be exchanged.
(c) Subject to and effective upon Full Compliance, the Original Agreement shall
be deemed null and void, and thereafter none of Buyer, any of the CampaMed
Parties or any of the Original Owners shall have any liability under the
Original Agreement.
(d) As used herein, "Full Compliance" shall mean that each and all of the
following conditions precedent have been met: (i) the Closing has been
completed; (ii) the $20,000 in royalties set forth in Section 2(b) payable in
full to the Original Owners shall have been delivered to Xxxxx Xxxxxx on behalf
of the original owners; and (iii) Xxxxx Xxxxxx, on behalf of the Original Owners
shall have received fully executed duplicates of the releases described in
clause (i) of Section 2(b) by Seller, Pero and the Original CampaMed.
3. Further Assurances. Each of the parties shall from time to time after the
Closing, at the sole cost and expense of the requesting party, take any and all
actions, and execute, acknowledge, deliver, file and/or record any and all
documents and instruments that any other party may reasonably request in order
to more fully effect, consummate, confirm or evidence the transactions
contemplated hereby or to more effectively transfer, convey and assign to Buyer
and/or a designee thereof, and put Buyer and/or a designee thereof, as the case
may be, in actual possession and control of, the Acquired Assets. Each of the
Original Owners further agrees to assist or consult with Buyer and/or a designee
thereof in good faith, as reasonably appropriate, if additional documents or
instruments are required for submission to the U.S. Patent and Trademark Office
or trademark offices worldwide to carry out the purpose and intent of this
agreement. Without limiting the generality of the foregoing, each of such
parties shall cooperate and take all steps reasonably requested by Buyer to
perfect, confirm and protect Buyer's rights, including without limitation,
intellectual property rights, title and interest in and to the Acquired Assets
including without limitation, executing and delivering all documents, filing
registration and assignment documents, and giving testimony, at Buyer's expense.
4. Consulting Services. (a) For the one-year period commencing on the date of
the Closing, the Original Owners agree to perform such consulting services as
Buyer may from time to time reasonably request, subject to their professional
availability and with Buyer to reimburse the reasonable expenses incurred by the
Original Owners in performing such requested consulting services, and provided
that such consulting services shall not require more than 20 hours of time in
the aggregate.
5. Sales Royalties. (a) Effective upon the Closing, Buyer will, subject to the
terms hereof, pay royalties to the Original Owners in connection with all sales
of any product or service based upon or derived from the Original Assets (a
"Product"), including without limitation the sale or licensing of any Cat's Claw
Substance, until such time as a total aggregate amount of $347,700 of such
royalty earnings (the "Total Royalty Amount") has been paid out to Original
Owners hereunder. Said royalties shall be as follows:
(i) When the Product consists of an article that is sold in the final form in
which it will be marketed to the public (whether sold at retail or wholesale)
("Product Sales"), an amount equal to 6% of the applicable Revenues (as defined
below).
(ii) When the Product consists of an ingredient or component sold to the trade
for incorporation into a third-party product to be produced and sold by an
unaffiliated third-party manufacturer ("Ingredient Sales"),10% of the applicable
Revenues.
(iii) If Buyer (or any affiliate) grants an unaffiliated third party a license
to manufacture or produce any Product ("Product Licensing"), an amount equal to
50% of the applicable Revenues.
(b) As used herein, "Revenues" shall mean the following: (i) in the case of
Product Sales or Ingredient Sales, as the case may be, the total gross amount of
revenues received by Buyer or any affiliate from Products Sales or Ingredient
Sales, as the case may be, net of refunds, rebates or returns, but without other
deductions of any kind; and (ii) in the case of Product Licensing, the total
gross amount of royalties, license fees, advances, guarantees, or other
compensation paid to Buyer or any affiliate by the licensee (or any affiliate of
the licensee) in consideration of each applicable license.
(c) Effective upon the Closing, in the event of a sale of a controlling interest
in Buyer, or a sale by Buyer of substantially all of the Original Assets, or a
sale by Buyer of substantially all rights in C-Med 100 or any other Cat's Claw
Substance, or if any shares of Buyer (or any affiliate having any right to
exploit the Original Assets) become publicly tradable on any exchange in the
United States, Canada or Europe (such as NASDAQ), Buyer shall immediately make
payment in full to the Original Owners of the full amount of the then unpaid
balance of the Total Royalty Amount, if any. In this regard, any license granted
with respect to the exploitation of the Original Assets, and/or of C-Med 100 or
any other Cat's Claw Substance, shall be deemed a sale if such license provides
the licensee with exclusive rights in the United States and has a term in excess
of five years.
(d) Buyer may at any time fully discharge its obligation to pay and account for
royalties hereunder by making payment in full of the then-outstanding balance of
the Total Royalty Amount.
6. Accounting. (a) Royalties shall be calculated and paid on a quarterly basis.
Buyer shall render a written royalty statement to each of the Original Owners
for each calendar quarter hereunder no later than 30 days after the close
thereof. Each such statement shall show the source and amount of Revenues
attributable to the applicable quarter, and the calculation of the royalty
earnings due thereon, and shall be accompanied by payment in full of the
Original Owner's share of such earnings. Upon request, Buyer shall provide such
additional detail as the Original Owners may reasonably require to enable them
to verify said calculation. Royalty statements and payments shall continue to be
rendered until such time as the Total Royalty Amount is paid in full.
(b) The Original Owners shall share in royalty earnings hereunder on the
proportional percentage basis specified in the attached Schedule "B," and each
payment of quarterly royalty earnings hereunder shall be made by making separate
payment to each Original Owner of his respective percentage share thereof, as
specified in Schedule "B," supported by a copy of the applicable royalty
statement. All payments shall be made in United States dollars by means of a
check drawn upon a U.S. bank. Any overdue amounts shall accrue interest at the
rate of 10% per annum, calculated from the original due date. Each payment shall
be accompanied by the applicable statement, as provided above.
(c) The Original Owners shall have the right to inspect and audit all of Buyer's
records and books of account insofar as they relate to this agreement. Such
audits shall take place upon reasonable notice, during normal business hours,
but not more than once in any calendar year. The cost of each such audit shall
be borne solely by the Original Owners unless accounting errors amounting to
seven and one-half percent (7.5%) or more of the applicable total are found to
the disadvantage of any Original Owner, in which case the cost of said
inspection and audit shall be borne by Buyer.
7. Stock Options. Effective upon the Closing, Buyer shall issue to each of the
Original Owners options (the "Options") to purchase an aggregate of 150,000
shares of the common stock of Buyer ("Common Stock") at an exercise price of one
tenth of one cent ($0.001) per share (i.e., a total aggregate price of $150 for
all such shares), such Options to be issued to each Original Owner in the amount
obtained by multiplying the percentage set forth across from each individual
owner in Schedule B by 150,000. The Options will be issued under, and subject
to, a stock option agreement substantially in the form of Exhibit IV ("Option
Agreement"); provided, however, that upon exercise of the Option the Common
Stock will be afforded, for a period ending on October 1, 2006, no less
favorable rights and treatment, and no more unfavorable obligations, in respect
of the sale and registration thereof than is afforded by Buyer to Xxxxxxx X.
Xxxxxx individually.
8. Miscellaneous. (a) For the purposes of this agreement, entities shall be
deemed to be affiliates of, or affiliated with, one another, if, directly or
indirectly, either controls the other or both are under common control. In this
regard, "control" shall deemed to be mean the power to direct the management and
policies of the controlled entity, whether through ownership of voting
securities, by contract or otherwise. Entities shall be deemed to be
unaffiliated only if no such control exists.
(b) This agreement constitutes the entire agreement, and supersedes all prior
agreements and understandings (oral or written), between the parties with
respect to the subject matter hereof.
(c) This agreement shall be governed by and controlled by and interpreted under
the internal laws of the State of New York, without regard to conflicts of law
principles. Each party hereto (i) agrees that any legal suit, action or
proceeding arising out of or relating to this agreement shall be instituted
exclusively in the New York State Supreme Court, County of New York or in the
United States District Court for the Southern District of New York, (ii) waives
any objection which such party may have now or hereafter based upon forum non
conveniens or to the venue of any such suit, action or proceeding, and (iii)
irrevocably consents to the jurisdiction of the New York State Supreme Court,
County of New York and the United States District Court for the Southern
District of New York in any such suit, action or proceeding. Each party further
agrees to accept and acknowledge service of any and all process which may be
served in any such suit, action or proceeding in the New York State Supreme
Court, County of New York or in the United States District Court for the
Southern District of New York and agrees that service of process served in
compliance with the notice provision of subsection (d) below will be deemed in
every respect effective service of process upon the recipient in any suit,
action or proceeding Notwithstanding the foregoing, any party may elect to have
any or all disputes arising hereunder adjudicated by binding arbitration in the
State and County of New York before a single arbitrator pursuant to the
international arbitration rules of the American Arbitration Association (the
"AAA"), other than claims for preliminary injunctive relief or other
pre-judgment remedies. If no single arbitrator can be agreed upon by the
parties, the arbitrator(s) shall be selected in accordance with the rules of the
AAA. The foregoing obligation to arbitrate shall be specifically enforceable.
The prevailing party (plaintiff or defendant) in any suit, action, proceeding or
arbitration hereunder shall be entitled to recover, in addition to any other
relief awarded, its reasonable attorneys' fees and other costs and expenses.
(d) All notices, statements and communications required or permitted to be given
hereunder shall be sent to the parties, at their respective addresses, as first
set forth above, by first-class mail, by facsimile transmission, or by an
established "overnight" courier service (such as FedEx); except for notices
relating to termination or to claimed breach, which shall be sent by certified
mail (return receipt requested) or by such courier service, with an advance copy
by facsimile transmission or e-mail. A copy of all notices to the Original
Owners shall be provided to the following attorneys:
Xxxxx & Xxxxxx Tel: (000) 000-0000
000 Xxxxxxx Xxxxxx, 00xx Xxxxx Fax: (000) 000-0000
Xxx Xxxx, XX 00000, X.X.X.
Attention: Xxxxxxx Xxxxx or Xxxx Xxxxxx
A copy of all notices to Buyer shall be provided to the following attorneys:
Blank Rome LLP 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx Tel: (000) 000-0000 Fax: (000) 000-0000
(e) The provisions herein shall bind and inure to the benefit of the parties
hereto, the and their respective officers, directors, trustees, principals,
affiliates, heirs, executors, administrators, successors and assigns.
(f) This agreement is personal to the parties, and cannot be assigned by any act
of any party or by operation of law, without the express written consent of each
of the other parties, not to be unreasonably withheld.
(g) This agreement shall not be deemed to create a partnership, joint-venture,
agency, employee/employer or similar relationship between any of the parties.
(h) This agreement cannot be amended, modified or waived except in a writing
signed by the party having the obligation. The waiver by either party of any
instance of breach hereof shall not operate or be construed as a waiver of any
other instance of breach.
(i) Neither this agreement nor any provision hereof shall be construed against
any party on the ground that it was drafted by that party. To the maximum extent
possible, each provision hereof shall be interpreted so as to be valid and
effective under all applicable laws. If any provision is determined under any
applicable law to be prohibited or invalid, that provision shall be deemed
deleted and/or modified to the minimum extent necessary in order to bring it
into legal compliance consistent with the original intent of the parties.
Section headings herein are provided solely for convenient reference and shall
not be deemed to have any substantive effect.
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first set forth above.
OPTGENEX INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: President
/s/ Xxxxxx Xxxxxxxx
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XXXXXX XXXXXXXX
/s/ Xxxxxxx X.X. Xxxxx
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XXXXXXX X.X. XXXXX, AS EXECUTOR
OF THE ESTATE OF XXXX X. XXXXXXX
/s/ Xxxxxxx Xxxxxxxxx Flood
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XXXXXXX XXXXXXXXX FLOOD
/s/ Xxxxx Xxxxxx
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XXXXX XXXXXX
