EXHIBIT 10.74
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is entered into by and
among ADVANCED VIRAL RESEARCH CORP. (the "Company") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the
"Consultant"), as of April 22, 2003 (the "Effective Date").
In consideration of the mutual covenants set forth and for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Consultant and the Company agree as follows:
1. CONSULTING ENGAGEMENT. The Company hereby engages Consultant as a
consultant and advisor and Consultant agrees to accept such engagement upon the
terms and conditions set forth herein. During the term of this agreement (the
"Consulting Period"), unless sooner terminated pursuant to the terms herein.
Nothing contained herein shall prevent Consultant from engaging in other
endeavors not in conflict with the business of the Company or his duties and
responsibilities under this Agreement or in violation of Section 6 of this
Agreement.
2. CONSULTING DUTIES. Consultant shall take direction from ▇▇▇ ▇▇▇▇▇▇,
the Chairman of the Board of Directors ("▇▇▇▇▇▇"), or his designee. Consultant
shall have the title "Senior Advisor to the Board of Directors." During the
Consulting Period, Consultant shall render such service and promote the name and
goodwill of the Company as ▇▇▇▇▇▇ may reasonably request so that the Company may
have the benefit of Consultant's experience and knowledge, including, but not
limited to the introduction to the Company of potential investors the Company.
Consultant agrees that he will be available for advice and counsel to the
officers and directors of the Company at all reasonable times by telephone,
letter, or in person during the Consulting Period, provided, however Consultant
shall not be required to perform services hereunder more than sixteen (16) hours
per week.
3. STATUS OF CONSULTANT. Consultant shall be an independent contractor
and not an "associate" or "employee" of the Company. Accordingly, the Company
shall not withhold amounts of applicable federal and state income, withholding
and employment taxes from the fees to be paid Consultant hereunder unless
otherwise required by law. Consultant shall be solely responsible for and shall
pay all of such taxes.
4. CONSULTING FEE; EXPENSES. In consideration of the services provided
in Section 2, during the Consulting Period Consultant shall receive a consulting
fee (the "Consulting Fee") of Fifteen Thousand Dollars ($15,000) payable on May
22, 2003, and Seven Thousand Five Hundred Dollars ($7,500) payable on the 8th
and the 22nd day of every month thereafter during the Consulting Period. In
addition, the Company shall pay to Consultant on the 8th day of each month
during the Consulting Period the sum of $700 for expenses and shall provide to
Consultant the use by Consultant at Consultant's home, of a computer to be
selected by Consultant. Private car transportation to and from Consultant's home
and the Company shall be provided for Consultant by the Company twice weekly and
all other times the Company requests Consultant to be present at the Company.
Consultant shall be reimbursed for all reasonable business and travel expenses
incurred by Consultant for the benefit of the Company as approved in writing in
advance by ▇▇▇▇▇▇ or his designee.
5. BONUS. In addition to the compensation to be paid to Consultant
pursuant to Section 4 hereof, during the Consulting Period, the Company shall:
(a) pay to Consultant a (i) cash fee of 5% of the net proceeds received
by the Company from investors who purchase securities of the Company from the
Company for cash during the Consulting Period except those investors whose
commitment to purchase such securities preceded the Consulting Period (a
"Financing") and (ii) issue to Consultant warrants to purchase that number of
shares of the Company's common stock which is equal to 5% of the shares issued
in the Financing exercisable within a period of five (5) years from the closing
of the Financing at a per share exercise price equal to the greater of (x) 100%
of the closing bid price of the Company's Common Stock on the trading day prior
to the date the Company receives the funding or (y) the exercise price of any
convertible securities issued by the Company or its affiliates in the applicable
transaction; and
(b) pay to Consultant a cash fee of 5% of the initial net proceeds
received by the Company during the Consulting Period resulting from the
consummation of a license, joint venture or similar contractual arrangement.
EXHIBIT 10.74-1
(c) the amounts payable to Consultant under Sections 5(a) and 5(b)
shall be paid to the Consultant at the time funds are actually received by the
Company and so long as such funds (i) are received by the Company during the
Consulting Period; or (ii) are irrevocably committed to the Company during the
Consulting Period and received by the Company within 90 days of the termination
of the Consulting Period.
6. TERM; TERMINATION.
a. TERM. The term of this Agreement and consulting engagement shall be
six (6) months (the "Term").
b. TERMINATION. Notwithstanding anything contained herein to the
contrary, this Agreement may be terminated by the Company at any time for Cause
or upon the death or Disability of Consultant, and the Company shall have no
further obligation to the Consultant after the Determination Date. For purposes
hereof, "Cause" means (i) the conviction of the Consultant of a felony under
federal, state or local criminal law, or (ii) willful and gross misconduct by
the Consultant that is materially detrimental to the Company or their
subsidiaries, or (iii) a violation by the Consultant of Sections 7 or 8 hereof
or actions by Consultant which the Company believes do not promote or are not in
the best interests of the Company, each as determined in good faith by a written
resolution adopted by the affirmative vote of at least majority of the Company's
directors. For purposes hereof, "Disability" means Consultant has been totally
incapacitated by bodily injury or physical or mental disease so as to be
prevented from engaging in any comparable occupation or employment for
remuneration or profit. For purposes hereof, the "Determination Date" shall mean
either (i) the date of the Company's determination that Cause exists; (ii) the
date of Consultant's death; or (iii) the date of the Company's determination of
Consultant's Disability.
7. NONCOMPETITION COVENANT. Consultant agrees that the Company has many
substantial legitimate business interests that can be protected only by
Consultant agreeing not to compete with the Company under certain circumstances
and that the Company will suffer irreparable harm if Consultant does compete
under such circumstances. These interests include, without limitation, the
Company's contacts and relationships with its clients, the Company's reputation
and goodwill in the industry, and the Company's rights in its secret or
confidential information, knowledge or data relating to the Company and its
business. Consultant therefore agrees that, during the Consulting Period and for
a period of six (6) months following termination of this engagement, Consultant
shall not directly or indirectly, own, manage, operate, join, advise, control or
otherwise engage or participate in or be connected as an employee, partner,
investor, stockholder, creditor, guarantor, advisor or consultant in, the
BUSINESS OF THE COMPANY (THE "BUSINESS"), to any person or any entity; provided,
however, Consultant may hold stock representing up to five percent of the equity
of a company engaged in the Business. In the event that Consultant violates this
paragraph, Consultant shall forfeit all of the unpaid portion of the Consulting
Fee and shall be required to reimburse the Company for any portion of the
Consulting Fee paid to Consultant prior to such breach.
8. CONFIDENTIAL INFORMATION. Consultant shall hold in a fiduciary
capacity for the benefit of the Company all technical and non-technical
information presented to Consultant by the Company, whether orally or in
writing, including without limitation, information, techniques, inventions,
discoveries, ideas, specifications, "know-how", procedures, designs, diagrams,
apparatus, equipment, algorithms, software programs, software source codes (the
"Confidential Information") and all tangible documents, materials, products,
prototypes, sketches, drawings, models, and/or other media containing the
Confidential Information ("Material") developed and disclosed to Consultant by
the Company or its independent contractors, agents, clients, attorneys,
accountants, and other authorized representatives and which shall not be or
become public knowledge. During the term of this Agreement and after termination
of this Agreement, Consultant shall not, without the prior written consent of
the Company, communicate or divulge any such Confidential Information or
Materials to anyone other than the Company and those designated by it unless
required by law. Consultant acknowledges that the Confidential Information and
Materials are and shall remain the property of the Company. The confidentiality
obligations hereunder shall not apply to Confidential Information which: (i) is,
or later becomes, public knowledge other than by breach of the provisions of
this Agreement; or (ii) is in the possession of Consultant with the full right
to disclose prior to its receipt from the Company, as evidenced by written
records; or (iii) is independently received by Consultant from a third party,
with no restrictions on disclosure.
Furthermore, Consultant agrees not to use, without the Company's
written consent, the Confidential Information and Materials for any purpose
other than to perform services for the Company. Consultant will deliver to the
Company, at the termination of this Agreement, all Materials in Consultant's
possession or under Consultant's control relating to the business, products, or
projects of the Company. Consultant will not impart to any subsequent clients or
use for Consultant's own benefit any information required to be held in
confidence.
9. SECURITIES LAWS. Consultant hereby acknowledges that he 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
EXHIBIT 10.74-2
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. Consultant further agrees that none
of the confidential information of the Company or any other information obtained
by Consultant will be used by Consultant, 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 Consultant acknowledges a duty not to purchase, sell or
trade in securities on the basis of any material "inside" information that is
not publicly known.
10. NON-EXCLUSIVITY AND SURVIVAL. The covenants and obligations of
Consultant contained in Sections 7 and 8 are in addition to, and not in lieu of,
any other covenants and obligations which Consultant may have with respect to
the subject matter hereof, whether by contract, as a matter of law or otherwise,
and such covenants and obligations, and their enforceability, will survive any
termination of this Agreement by either party and any investigation made with
respect to the breach thereof by the Company at any time.
11. INDEMNIFICATION.
a. Consultant shall indemnify, defend and hold harmless the Company
from and against all claims, losses, costs, damages and expenses, including,
without limitation, attorneys' fees and costs, incurred by the Company resulting
from or arising in connection with any intentional or willful misconduct by
Consultant arising out of or related to Consultant's activities under this
Agreement.
b. The Company shall indemnify, defend and hold harmless Consultant
from and against all claims, losses, costs, damages and expenses, including,
without limitation, attorneys' fees and costs, incurred by Consultant resulting
from or arising in connection with any intentional or willful misconduct by the
Company or any misrepresentation or concealment of a material fact supplied in
written materials provided by the Company to Consultant for use in performing
Consultant's duties hereunder.
c. This section shall survive termination of this Agreement regardless
of the reason for such termination.
12. DEBARMENT
Consultant hereby certifies that Consultant has not been debarred under
the provisions of the Generic Drug Enforcement Act of 1992, 21 U.S.C. Sec. 335a
(a) and (b). In the event that during the term of this Agreement Consultant (i)
becomes debarred, or (ii) receives notice of an action or threat of an action
with respect to Consultant's debarment, or (iii) becomes aware of an action
taken by Consultant or involving Consultant which might lead to Consultant's
debarment, Consultant agrees to immediately notify the Company. Consultant also
agrees that in the event Consultant becomes debarred Consultant shall
immediately cease all activities relating to this Agreement.
In the event Consultant becomes debarred, this Agreement shall
automatically terminate, without any further action or notice by either Party.
In the event Company receives notice from Consultant or otherwise becomes aware
that (i) a debarment action has been brought against Consultant, or (ii)
Consultant has been threatened with a debarment action, or (iii) is, or has
been, involved in any activity which may cause Consultant to be debarred, then
Company shall have the right to terminate this Agreement immediately.
13. MISCELLANEOUS.
a. ASSIGNMENT. This Agreement is personal to Consultant and without the
prior written consent of the Company shall not be assignable by Consultant.
b. ARBITRATION; GOVERNING LAW. The parties shall resolve any disputes
arising hereunder before a panel of one arbitrator selected to pursuant to and
run in accordance with the rules of the American Arbitration Association. The
arbitration shall be held in Westchester County, New York. Each party shall bear
their own attorney's fees and costs of such arbitration. Disputes under this
Agreement as well all of the terms and conditions of this Agreement shall be
governed in accordance with and by the laws of the State of New York.
c. INJUNCTIVE RELIEF. Notwithstanding Section 11(b) above, in the event
of a breach or threatened breach by Consultant of Sections 6 and 7 of this
Agreement, in addition to any other form of relief that may be granted, the
Company shall be entitled to an injunction from a court of appropriate
jurisdiction, including a temporary restraining order, restraining Consultant
from committing or continuing such breaches.
EXHIBIT 10.74-3
d. ATTORNEYS' FEES. If the Company or Consultant acts to enforce all or
a portion of this Agreement, whether or not resulting in litigation, the
prevailing party shall be entitled to recover all reasonable costs, including,
without limitation, attorneys' fees incurred in such action.
e. ENFORCEABILITY. In the event that an arbitrator, court or other
tribunal finds any provision of this Agreement to be overly broad, the parties
agree that such arbitrator, court or tribunal has the authority to narrow such
restrictions so as to render them reasonable and enforceable. Should any
provision of this Agreement be found to be invalid or unreasonable in nature,
the remainder of the Agreement, including any portion of a challenge provision
found to be reasonable, shall remain fully enforceable.
f. NOTICES. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Consultant: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
-------------------------
-------------------------
If to the Company: Advanced Viral Research Corp.
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chief
Financial Officer
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Bank of America Tower, Suite 3500
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
g. MODIFICATION AND WAIVER. None of the terms or conditions of this
Agreement may be waived except in writing by the party which is entitled to the
benefits thereof. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by Consultant and Company. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision (whether or not similar) nor shall such waiver
constitute a continuing waiver.
h. SEVERABILITY. Each term and provision of this Agreement constitutes
a separate and distinct undertaking, covenant, term and/or provision hereof. In
the event that any term of provision of this Agreement shall be determined to be
unenforceable, invalid or illegal in any respect, such unenforceability,
invalidity or illegality shall not affect any other term or provision of this
Agreement, but this Agreement shall be construed as if such unenforceable,
invalid or illegal term or provision had never been contained herein. Moreover,
if any term of provision of this Agreement shall for any reason be held to be
excessively broad as to time, duration, scope, activity or subject, it shall be
construed, by limiting and reducing it, so as to be enforceable to the extent
permitted under applicable law as it shall then exist.
i. ENTIRE AGREEMENT. This Agreement constitutes and embodies the full
and complete understanding and agreement of the parties hereto with respect to
the subject matter here of and supercedes all prior understanding whether oral
or in writing and may not be modified except by writing signed by the parties
hereto.
EXHIBIT 10.74-4
IN WITNESS WHEREOF, this Agreement has been executed and is effective
as of the day and year first written above.
ADVANCED VIRAL RESEARCH CORP.
By:
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Chairman of the Board of Directors
CONSULTANT
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
EXHIBIT 10.74-5
