ex10-4



 



Exhibit 10.4



RELEASE



     This RELEASE is made as of December 13, 2001 by and between HEARx Ltd., a
Delaware corporation (the “Company”) and Advantage Fund II Ltd. (the
“Investor”).


RECITALS



     A.     Pursuant to a Convertible Preferred Stock Purchase Agreement dated as
of May 9, 2000 (the “Original Purchase Agreement”), the Company issued and sold
to the Investor, and the Investor purchased from the Company, 500 shares of the
Company’s 7% Series I Convertible Preferred Stock, par value $1.00 per share
(the “Original Preferred Stock”), which are convertible into shares of the
Company’s common stock, par value $.10 per share (the “Common Stock”), and
warrants to purchase 203,390 shares of Common Stock (the “Original Warrants”).


     B.     In connection with the Original Purchase Agreement, the Company filed a
Certificate of Designations with the Secretary of State of Delaware containing
the rights, preferences and privileges of the Original Preferred Stock (the
“Original Certificate of Designations”), and the Company and the Investor
entered into a Registration Rights Agreement dated as of May 9, 2000 (the
“Original Registration Rights Agreement”). The Original Purchase Agreement,
Original Certificate of Designations, Original Warrants and Original
Registration Rights Agreement are, collectively, the “Original Transaction
Documents”.


     C.     The Investor currently holds 418 shares of the Original Preferred
Stock, the Original Warrants and 129,470 shares of Common Stock (collectively,
the “Existing Investor Securities”).


     D.     The Investor and the Company desire that the Investor exchange all of
the Existing Investor Securities for a combination of cash, shares of a newly
issued non-convertible preferred stock of the Company and shares of Common
Stock (the “Exchange”) upon the terms and subject to the conditions set forth
in an exchange agreement between the Company and the Investor of even date
herewith (the “Exchange Agreement”).


     E.     The Exchange Agreement contemplates that the Company and the Investor
will execute and deliver this Release as a condition to the closing of the
Exchange and this Release is a material inducement to the parties entering into
the Exchange Agreement.


AGREEMENT



     NOW, THEREFORE, in consideration of the Exchange and the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company and the
Investor agree as follows:


 






 


     1.     Company Release. The Company, for itself and its agents,
representatives, successors and assigns (the “Company Releasors”), does hereby
remise, release and forever
discharge the Investor, its affiliates, employees, officers, directors, agents,
representatives, successors and assigns and each of their respective
affiliates, employees, officers, directors, agents, representatives, successors
and assigns (collectively, the “Investor Releasees”) from all actions, causes
of action, suits, debts, dues, assessments, late fees, sums of money, expenses,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
executions, obligations, duties, claims, matters, liabilities, violations of
law, fines, penalties, responsibilities, attorneys’ fees, costs, and demands
whatsoever, in law, admiralty, or equity (“Claims”), which against the Investor
Releasees (or any of them) the Company Releasors ever had, now have, or
hereafter can, shall, or may have, for, upon or by reason of any matter, cause
or thing whatsoever from the beginning of the world to the date of this
Release, except for claims under the Exchange Agreement and the Exchange.


     2.     Investor Release. The Investor, for itself and its agents,
representatives, successors and assigns (the “Investor Releasors”), does hereby
remise, release and forever discharge the Company, its affiliates, employees,
officers, directors, agents, representatives, successors and assigns and each
of their respective affiliates, employees, officers, directors, agents,
representatives, successors and assigns (collectively, the “Company Releasees”)
from all Claims, which against the Company Releasees (or any of them) the
Investor Releasors ever had, now have, or hereafter can, shall, or may have,
for, upon or by reason of any matter, cause or thing whatsoever from the
beginning of the world to the date of this Release, except for claims under the
Exchange Agreement and the Exchange.


     3.     Further Acts. Each party to this Release agrees to perform any further
acts or execute and deliver any additional documents that may be reasonably
necessary to carry out the provisions and intent of this Release.


     4.     Amendments; Waivers. No provision of this Release may be waived or
amended except in a written agreement signed, in the case of an amendment, by
the Company and the Investor or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought.


     5.     Severability. In case any one or more of the provisions of this
Release shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Release shall not
in any way be affected or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Release.


     6.     Governing Law. This Release shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware, without
regard to the principles of conflicts of law thereof.


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     7.     Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together 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, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature page were an original thereof.


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     IN WITNESS WHEREOF, the parties hereto have caused this Release to be duly
executed by their respective authorized signatories as of the date first
indicated above.



	 	 	 
	 	HEARx LTD
	 
	 	By:	/s/ Paul A Brown
	 	 	

Paul A. Brown, M.D.

Chairman and Chief Executive Officer
	 
	 	ADVANTAGE FUND II LTD
	 
	 	By: 	Genesee International Inc.

as General Manager
	 
	 	 	/s/ Donald R. Morken



Donald R. Morken

President




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