EXHIBIT 10.51
 
TERMINATION AND MUTUAL RELEASE AGREEMENT
 
This TERMINATION AND MUTUAL RELEASE AGREEMENT (this “Agreement”) is made and
entered into by and between Alfacell Corporation, a Delaware corporation
(“Alfacell”), and Par Pharmaceutical, Inc., a Delaware corporation (“Par”),
effective as of September 8, 2009 (the “Effective Date”).  Each of Alfacell and
Par are referred to herein as a “Party” and collectively as the
“Parties”.  Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in Article I of that certain License Agreement
by and between the Parties, dated as of January 14, 2008 (the “License
Agreement”).
 
WHEREAS, Alfacell and Par are parties to the License Agreement and the Supply
Agreement dated as of January 14, 2008 (collectively, the “Alfacell/Par
Agreements”);
 
WHEREAS, the Parties wish to terminate the Alfacell/Par Agreements; and
 
WHEREAS, the agreement by each Party to terminate the Alfacell/Par Agreements is
conditioned upon the Parties entering into this Agreement to, among other
things, set forth certain understandings with respect to the post-termination
rights and obligations of each Party.
 
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
and covenants hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:
 
ARTICLE I
 
DEFINITIONS; INTERPRETATION
 
1.1   Certain Definitions.  For purposes of this Agreement, the definitions set
forth below shall be applicable.

“Alfacell Seller” means any of Alfacell, its successors, assignees (by sale of
the Product or otherwise), licensees or sub-distributors, as the case may be,
that distributes or sells the Product.
 
“Claims” means any and all claims, demands, obligations, losses, judgments,
damages, causes of action, costs, expenses, attorneys’ fees and liabilities of
any nature whatsoever, whether based on contract, tort, statutory or other legal
or equitable theory of recovery, whether known or unknown, suspected or claimed.
 
“Product” means any pharmaceutical product containing Ranpirnase for parenteral
administration developed by Alfacell or any Third Party (as defined in the
License Agreement) on Alfacell’s behalf, including any generically-labeled
version of such product.
 
“Third Party” means any person or entity other than an Alfacell Seller or an
Affiliate of an Alfacell Seller.
 
1.2.  Construction.  As used in this Agreement, unless the context otherwise
requires, words denoting any gender shall include all genders, words describing
the singular shall include the plural and vice versa, the words “hereof”,
“herein” and “hereunder” and words of similar import shall refer to this
Agreement as a whole and not to any particular provision of this Agreement,
words denoting natural persons shall include corporations, partnerships and
other entities, and vice versa; and the words “includes” or “including” shall
mean “including without limitation.”  Unless otherwise specified herein, all
references to Articles and Sections refer to articles and sections of this
Agreement.
 

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ARTICLE II
 
TERMINATION OF PRIOR AGREEMENTS; PAYMENTS TO PAR
 
2.1 Termination of Alfacell/Par Agreements. The Parties agree and confirm that,
except in respect of this Agreement, including the Surviving Provisions (as
defined in this Section 2.1), any and all contracts, agreements and
understandings, whether written or oral, including the Alfacell/Par Agreements,
are hereby terminated and are of no further force and effect.  Each of the
Parties agrees that, except for Articles I and VIII of the License Agreement
(the “Surviving Provisions”), none of the terms, conditions or obligations of
such contracts, agreements and understandings shall survive termination, that
all rights and licenses granted to Par under the License Agreement shall
automatically and immediately terminate and shall revert to Alfacell as of the
Effective Date and that this Agreement supersedes any of the terms of such
contracts, agreements and understandings.  The Parties agree that the
confidentiality obligations of the Parties contained in Article VIII of the
License Agreement shall apply to all Confidential Information of a Party
disclosed to the other Party pursuant to this Agreement as if such Confidential
Information had been disclosed under the License Agreement, that all references
to “this Agreement” in Article VIII of the License Agreement shall be deemed to
include this Agreement, and that the Confidentiality obligations of the Parties
contained in Article VIII of the License Agreement shall remain binding on both
Parties during the period commencing as of the Effective Date and ending upon
the later of the expiration of the Royalty Period (as defined in Section 2.3
herein) and January 1, 2020.
 
2.2 Payments to Par.  In consideration for Par’s agreement to terminate the
Alfacell/Par Agreements, during the Royalty Period (as defined in Section 2.3),
Alfacell shall pay to Par, two percent (2%) of Alfacell Net Sales (as
hereinafter defined).  For purposes of this Agreement, “Alfacell Net Sales”
means, in respect of any Product, the gross amounts actually invoiced by any
Alfacell Seller to all Third Party distributors or customers for sales of such
Product in the Field in the Territory, less the sum of the following items
relating to such sales which are allowed and taken, to the extent such
deductions are in accordance with GAAP (the “Royalty”):
 
(i) trade, quantity and cash discounts and rebates given by such Alfacell
Seller;
 
(ii) adjustments for price adjustments (including shelf stock adjustments in the
case of a generically-labeled version of the Product supplied and sold by an
Alfacell Seller), billing errors, rejected goods, returns, Product recalls and
damaged goods (excluding goods damaged while under the control of an Alfacell
Seller);
 
(iii) credits, charge-backs, rebates, reimbursements, and similar payments
provided to wholesalers and other distributors, buying groups, health care
insurance carriers, pharmacy benefits management companies, health maintenance
organizations, other institutions or health care organizations or other
customers;
 
(iv) rebates or other price reductions provided to any Governmental Authority
with respect to any state or federal Medicare, Medicaid, or similar programs;
 
(v) any invoiced charge for freight, insurance, handling, or other
transportation costs directly related to delivery of the Product; and
 
(vi) credits or discounts related to sales promotions such as trade show
discounts and stocking allowances.
 
The foregoing deductions set forth in paragraphs (i) through to (vi) of this
Section 2.2, shall only be deducted once and only to the extent not otherwise
deducted from the gross amounts actually invoiced.
 
2.3 Royalty Period.  The payment of the Royalty by Alfacell to Par, shall
commence upon the first sale of the Product by an Alfacell Seller to a Third
Party in the Field in the Territory following the first Regulatory Approval
obtained for any Indication and shall terminate upon the later to occur of: (i)
in respect of any Indication, the 12th anniversary of the first sale of the
Product by an Alfacell Seller to a Third Party for such Indication and (ii) the
date of expiration of the last Valid Claim within the Alfacell Patents (“Royalty
Period”).
 

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ARTICLE III
 
MUTUAL RELEASE OF ALL CLAIMS
 
3.1 Release by Alfacell.  Subject to the terms and conditions of this Agreement,
Alfacell, on behalf of itself, its affiliates, subsidiaries, officers,
directors, employees, agents, attorneys, accountants, insurers, representatives,
successors and assigns, hereby releases and forever discharges Par and its past
and present affiliates, subsidiaries, officers, directors, partners, principals,
equityholders, employees, agents, attorneys, accountants, insurers,
representatives, successors, heirs and assigns (collectively, the “Par Released
Parties”), from any and all Claims that Alfacell or any Affiliate of Alfacell
has, had or claims to have against any or all of the Par Released Parties
arising directly or indirectly from any act, omission, event or transaction
occurring on or prior to the Effective Date that relate to, arise from, or are
in any manner connected to the Alfacell/Par Agreements, whether accrued or not;
provided, however, that nothing in this Section 3.1 shall be deemed to affect
the enforceability of, or the parties’ rights and obligations under this
Agreement.
 
3.2 Release by Par.  Subject to the terms and conditions of this Agreement, Par,
on behalf of itself, its affiliates, subsidiaries, officers, directors,
employees, agents, attorneys, accountants, insurers, representatives, successors
and assigns, hereby releases and forever discharges Alfacell and its past and
present affiliates, subsidiaries, officers, directors, partners, principals,
equityholders, employees, agents, attorneys, accountants, insurers,
representatives, successors, heirs and assigns (collectively, the “Alfacell
Released Parties”), from any and all Claims which any Par or an Affiliate of Par
has, had or claims to have against any or all of the Alfacell Released Parties
arising directly or indirectly from any act, omission, event or transaction
occurring on or prior to the Effective Date that relate to, arise from, or are
in any manner connected to the Alfacell/Par Agreements, whether accrued or not;
provided, however, that nothing in this Section 3.2 shall be deemed to affect
the enforceability of, or the parties’ rights and obligations under this
Agreement.
 
ARTICLE IV
 
INDEMNIFICATION
 
4.1 Indemnification by Alfacell.  Alfacell shall defend, indemnify and hold
harmless each of the Par Released Parties from and against any and all
liabilities, damages, settlements, penalties, fines, costs or expenses
(including reasonable attorneys’ fees) (collectively, “Losses”), arising as a
result of Third Party claims made or lawsuits brought against any Par Released
Party related to, or in connection with, the development, use or
Commercialization of the Product following the Effective Date.
 
4.2 Indemnification Procedures.  If a Par Released Party intends to claim
indemnification under this Article IV, it shall promptly notify Alfacell in
writing of any such alleged Losses promptly after it becomes aware of the basis
for such indemnification.  Alfacell shall have the right to control the defense
or settlement of such Claims with counsel of its choice, provided, however, that
such counsel is reasonably acceptable to such Par Released Party; and provided,
further, that such Par Released Party shall have the right to retain its own
counsel at its own expense, for any reason, including if representation of such
Par Released Party would be inappropriate due to actual or potential differing
interests between such Par Released Party and any other Party reasonably
represented by such counsel in such proceeding.  Alfacell shall not be
responsible for any legal fees or other costs incurred other than as provided
herein.  The Par Released Parties shall reasonably cooperate with Alfacell and
its legal representatives in the investigation of any Losses covered by this
Section 4.2.  The obligations of this Section 4.2 shall not apply to amounts
paid in settlement of any claim, demand, action or other proceeding if such
settlement is effected without the consent of Alfacell, which consent shall not
be withheld, conditioned or delayed unreasonably.  The failure to deliver prompt
written notice to Alfacell shall relieve Alfacell of any obligation to the Par
Released Party of liability under this Section 4.2 only to the extent it is
materially prejudiced thereby.  It is understood that only Par may claim
indemnity under this Article IV (on its own behalf or on behalf of Par Released
Parties), and other Par Released Parties may not directly claim indemnity
hereunder.
 

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ARTICLE V
 
REPRESENTATIONS AND WARRANTIES
 
5.1 Representations and Warranties.  Each Party hereby represents and warrants
to the other Party that: (i) such Party has full power and authority to enter
into this Agreement and to perform its obligations hereunder; and (ii) the
execution, delivery and performance of this Agreement do not conflict with any
other agreement or arrangement to which such Party is a party or by which it is
or its assets are bound or any law, regulation or order to which such Party is
subject.
 
ARTICLE VI
 
MISCELLANEOUS PROVISIONS
 
6.1 Notices.  Any notices given under this Agreement shall be in writing,
addressed to the Parties at the following addresses, and delivered by person, by
facsimile transmission followed by U.S. Mail, return receipt requested, or by
FedEx or other reputable national courier service.  Any such notice shall be
deemed to have been given as of the day of personal delivery, on the day sent by
facsimile transmission with electronic confirmation of successful transmission
(if before 5:00 p.m. local time on a business day, and otherwise it shall be
deemed given on the subsequent business day), or on the day of delivery to the
other Party confirmed by the courier service.
 
In the case of Alfacell:
Alfacell Corporation
300 Atrium Drive
Somerset, NJ 08873
Attention:  Chief Executive Officer
Facsimile:  (732) 652-4575
   
with a copy (which shall not constitute notice) to:
Goodwin Procter LLP
620 Eighth Avenue
New York, NY  10018
Attention:  Kevin T. Collins, Esq.
Facsimile:  (212) 813-8800
   
In the case of Par:
Par Pharmaceutical, Inc.
300 Tice Boulevard
Woodcliff Lake, NJ 07677
Attn:  General Counsel’s Office
Fax:  (201) 802-4600
   
with a copy (which shall not constitute notice) to:
Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, NY  10103-0001
Attn: R. King Milling, Jr., Esq.
Fax: (212) 506-5151

 

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6.2 Return or Destruction of Confidential Information.  Each Party shall, within
a commercially reasonable period of time following the Effective Date, return to
the other Party, or certify the destruction of, all Confidential Information of
the other Party received prior to the Effective Date.
 
6.3 Parties to Bear Own Costs and Attorneys’ Fees.  Except as otherwise set
forth herein, each Party will bear its own costs and expenses, including
attorneys’ fees, incurred by it in the negotiation of this Agreement and the
transactions and other agreements contemplated hereby, and such costs and
expenses shall not be reimbursed by the Company.
 
6.4 Entire Agreement.  This Agreement represents and contains the entire
agreement and understanding among the Parties with respect to the subject matter
of this Agreement, and supersedes any and all prior oral and written agreements
and understandings relating thereto.  No representation, warranty, condition,
understanding or agreement of any kind with respect to the subject matter shall
be relied upon by the Parties except those contained herein.  This Agreement may
not be amended or modified except by a written agreement signed by each Party.
 
6.5 Advice of Counsel.  Each Party acknowledges and represents that it has
sought and obtained the legal advice of its own chosen attorneys and that the
terms of this Agreement have been completely read and are fully understood and
voluntarily accepted by it.
 
6.6 Counterparts.  This Agreement may be executed in any number of counterparts
and by facsimile, pdf or electronic signature, each of which shall be deemed an
original, and all of which together shall be deemed one and the same instrument.
 
6.7 Attorneys’ Fees.  In the event litigation is necessary to enforce a
provision or provisions of this Agreement, all reasonable, out-of-pocket costs,
expenses and attorneys’ fees shall be paid by the non–prevailing party or
parties to the prevailing party or parties, in each case as determined by a
court of competent jurisdiction in a final, non-appealable order.
 
6.8 Binding Effect.  This Agreement will be binding on and inure to the benefit
of the Parties and their respective heirs, legal representatives, successors and
assigns.
 
6.9 Governing Law.  This Agreement is governed by and will be construed in
accordance with the laws of the State of New York, excluding any
conflict-of-laws rule or principle (whether under the laws of New York or any
other jurisdiction) that might refer the governance or the construction of this
Agreement to the law of another jurisdiction.
 
6.10 Headings.  Headings of the Articles, Sections and subsections of this
Agreement are for reference purposes only and do not constitute terms or
conditions of this Agreement and shall not limit or affect the terms and
conditions hereof.
 
6.11 Severability.  If any provision of this Agreement or its application to any
Person or circumstance is held invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such provision to other
Persons or circumstances will not be affected thereby, and such provision will
be enforced to the greatest extent permitted by law.
 
6.12 Further Assurances.  In connection with this Agreement and the transactions
contemplated thereby, each Party will execute and deliver any additional
documents and instruments and perform any additional acts that may be reasonably
necessary or appropriate to effectuate and perform the provisions of this
Agreement and such transactions.
 
6.13 Effectiveness.  This Agreement shall become effective upon the Effective
Date.
 

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IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement
effective as of the Effective Date.
 
ALFACELL CORPORATION
 
By:  /s/ Charles Muniz
Name:  Charles Muniz
Title:  President
 
PAR PHARMACEUTICAL, INC.
 
By: /s/ John MacPhee
Name:  John MacPhee
Title:    President, Strativa Pharmaceuticals,
             a division of Par Pharmaceutical, Inc.