Document:

Exhibit 10.1

EXHIBIT
10.1

BELK, INC.

Revised Executive Long Term Incentive Plan

Participation Certificate

This CERTIFICATE and the attached Exhibit A set forth the terms and conditions under which Belk
will issue shares of Belk, Inc. Class B common stock (“Stock”) to Executive based on the extent to
which Belk meets or exceeds the Performance Goals for each Performance Period of the Revised
Executive Long-Term Incentive Plan (“LTI Plan”) as set forth in Exhibit A. Notwithstanding any
provision to the contrary, no shares will be issued under this Certificate to any Executive who is
a “covered employee” under §162(m) of the Internal Revenue Code unless and until the shareholders
of Belk approve the material terms of the performance goals under the LTI Plan. All of the terms
used in this CERTIFICATE and in Exhibit A that begin with a capital letter are either defined in
this CERTIFICATE, in Exhibit A or in the Belk Inc. 2000 Incentive Stock Plan, which is incorporated
by reference.

	 	 	 
	Executive:
	 	 
	 
	 	 
	Performance Period:
	 	 
	 
	 	 
	Executive’s Number of Shares:
	 	 
	 

	 	 
	50% of available shares based on EBIT % performance;
	 	 
	50% of available shares based on Sales $performance
	 	 
	 
	 	 
	Months Eligible:
	 	 
	 

	 	 
	 
	 	 
	Performance Goals
	 	 
	 
	 	 
	          Sales Goal (mil)
	 	 
	 
	 	 
	          EBIT % Goal
	 	 
	 
	 	 
	          ROIC Goal
	 	 
	 
	 	 
	Signature Required:
	 	 

Participant ________________________

Date ______________________________

 

 

EXHIBIT A

Revised Executive Long Term Incentive Plan

§ 1. Establishment of Plan and Effective Date. This Exhibit A shall constitute the LTI
Plan as effective beginning with Belk’s 2009 fiscal year.

§ 2. Eligibility. The Committee in its discretion may designate one or more Executives to
participate in the LTI Plan for a Performance Period within the first 90 days of such Performance
Period. The Committee shall have the right in its discretion to add or remove Executives from
participation in the LTI Plan for a given Performance Period.

§ 3. Definitions.

     3.1 Business Criteria. The term “Business Criteria” for purposes of this Program
means (1) Belk’s cumulative sales, (2) Belk’s normalized earnings before interest and taxes, and
(3) Belk’s return on invested capital.

     3.2 Committee. The term “Committee” means the Compensation Committee of the Board of
Directors of Belk, or, if all the members of such Committee fail to satisfy the requirements to be
an “outside director” under § 162(m) of the Code, a sub-committee of such committee which consists
solely of members who satisfy such requirements.

     3.3 Delayed Issuance Date. The term “Delayed Issuance Date” means, for each
Performance Period, as soon as is practical, and in any event no later than 21/2

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months, after the end of Belk’s fiscal year that immediately follows the Performance Period.

     3.4 Executive. The term “Executive” means, for each Performance Period, the Belk
senior executive who has been selected by the Committee in its discretion to participate in the LTI
Plan for such Performance Period.

     3.5 LTI Plan. The term “LTI Plan” means this Revised Executive Long-Term Incentive
Plan, as set forth in this Exhibit A.

     3.6 Performance Period. The term “Performance Period” means the fiscal year for Belk
that is shown opposite such term on the CERTIFICATE.

     3.7 Target Number of Shares. The term “Target Number of Shares” means the number of
shares of Stock shown opposite such term on the CERTIFICATE.

§ 4. Performance Goals.

     4.1 General. The Committee shall set forth in writing the Performance Goals for each
Participant for a Performance Period no later than 90 days after the beginning of such Performance
Period based on such Business Criteria as the Committee deems appropriate under the circumstances.
The Committee shall have the right to use different Business Criteria for different Participants,
and the Committee shall have the right to set different Performance Goals for Participants whose
goals look to the same Business Criteria. The Business Criteria for each Participant may be based
on company-wide performance, division-specific performance, department-specific performance,
personal performance or on any combination of such criteria. No later than 90 days after the
beginning of the Performance Period, the Committee shall

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establish the general, objective rules which the Committee will use to determine the extent, if
any, that a Participant’s Performance Goals have been met and the specific, objective rules, if
any, regarding any exceptions to the use of such general rules. Further, in determining whether
the Performance Goals for the Performance Period have been satisfied, the Committee may look at the
performance of Belk as constituted on the first day of the Performance Period, the last day of the
Performance Period, or either such date, if there is a material acquisition, disposition, or other
unusual corporate transaction involving Belk during such Performance Period.

     4.2 Specific Performance Goals. The Performance Goals for a Performance Period shall
be based on a Cumulative Sales Goal, an EBIT Goal, and/or a ROIC Goal.

     4.3 Cumulative Sales Goal.

     (a) Goal and Goal Adjustments. The term “Cumulative Sales Goal” means
the cumulative sales goal for Belk for the Performance Period shown opposite such
term on the CERTIFICATE.

     (b) Shares Subject to Goal. Fifty percent (50%) of the Target Number
of Shares of Stock shall be subject to the condition that Belk reach the Cumulative
Sales Goal for the Performance Period, and Executive shall forfeit his right to such
shares for the Performance Period under this § 4.3 if Belk’s cumulative sales for
the Performance Period are less than 95% of the Cumulative Sales Goal for such
period.

     (c) Percentage of Target Number of Shares to be Issued. If Belk’s
cumulative sales for the Performance Period equal or exceed 95% of the Cumulative
Sales Goal for such period, then the percentage of the

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Target Number of Shares of Stock issuable (subject to § 5 and § 6) under this § 4.3
to Executive shall be based on the percentage of the Cumulative Sales Goal which
Belk reaches as follows:

	 	 	 	 	 
	Percentage of Sales Goal Reached	 	Percentage of Target Shares Issuable	 
	95%
	 	 	  40%	
	96%
	 	 	  45%	
	97%
	 	 	  55%	
	98%
	 	 	  67%	
	99%
	 	 	  82%	
	100%
	 	 	100%	
	101%
	 	 	115%	
	102%
	 	 	127%	
	103%
	 	 	137%	
	104%
	 	 	144%	
	105% or higher
	 	 	150%	

     4.4 EBIT Goal.

     (a) Goal and Goal Adjustments. The term “EBIT Goal” means the earnings
before interest and taxes goal as a percentage of sales (excluding leased department
sales) for Belk for the Performance Period shown opposite such term on the
CERTIFICATE.

     (b) Shares Subject to Goal. Fifty percent (50%) of the Target Number
of Shares of Stock shall be subject to the condition that Belk reach the EBIT Goal,
and Executive shall forfeit his right to such shares for the Performance Period
under this §4.4 if Belk’s earnings before interest and taxes for the Performance
Period is less than 65% of the EBIT Goal for such period.

     (c) Percentage of Target Number of Shares to be Issued. If Belk’s
earnings before interest and taxes as a percentage of sales

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(excluding leased department sales) for the Performance Period equal or exceeds 65%
of the EBIT Goal for such period, then the percentage of the Target Number of Shares
of Stock issuable (subject to § 5 and § 6) under this § 4.4 to Executive shall be
based on the percentage of the EBIT Goal which Belk reaches as follows:

	 	 	 	 	 
	Percentage EBIT Goal Reached	 	Percentage of Target Shares Issuable	 
	Less than 65%
	 	 	    0%	
	65% or higher but less than 90%
	 	 	  20%	
	90%
	 	 	  40%	
	91%
	 	 	  41%	
	92%
	 	 	  42%	
	93%
	 	 	  44%	
	94%
	 	 	  47%	
	95%
	 	 	  51%	
	96%
	 	 	  56%	
	97%
	 	 	  63%	
	98%
	 	 	  73%	
	99%
	 	 	  85%	
	100%
	 	 	100%	
	101%
	 	 	114%	
	102%
	 	 	125%	
	103%
	 	 	133%	
	104%
	 	 	138%	
	105%
	 	 	142%	
	106%
	 	 	145%	
	107%
	 	 	147%	
	108%
	 	 	148%	
	109%
	 	 	149%	
	110% or higher
	 	 	150%	

     4.5 ROIC Goal and Adjustments. The term “ROIC Goal” means the return on invested
capital goal for Belk for the Performance Period shown opposite such term on the CERTIFICATE. If
the return on invested capital for Belk for the Performance Period is at least 95% of the ROIC
Goal, the percentage of the Target Number of Shares to be issued to a Participant for the
Performance Period shall increase by the multiplier shown

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in this § 4.5; provided, however, the multiplier in this § 4.5 shall not apply to any shares
issued pursuant to § 4.4(c) based solely on Belk achieving less than 90% of the EBIT Goal for such
Performance Period.

	 	 	 	 	 
	Percentage of ROIC Goal	 	Multiplier	 
	95%
	 	 	101.0%	
	96%
	 	 	101.5%	
	97%
	 	 	102.0%	
	98%
	 	 	102.5%	
	99%
	 	 	103.0%	
	100%
	 	 	105.0%	
	101%
	 	 	107.0%	
	102%
	 	 	109.0%	
	103%
	 	 	111.0%	
	104%
	 	 	113.0%	
	105%
	 	 	115.0%	

     4.6 Rounding and Interpolation. All percentage figures computed under this § 4 shall
be rounded to the nearest one tenth (1/10th) of a percent, all dollar figures computed
under this § 4 shall be rounded to the nearest dollar, the number of shares of Stock issuable under
§ 4.3, § 4.4 and § 4.5 shall be rounded up to the nearest whole share and the Committee shall
(wherever the Committee deems appropriate) interpolate between the percentages shown in § 4.3, §
4.4 and § 4.5 to determine the number of whole shares of Stock to be issued to Executive.

     4.7 Certification. The Committee at the end of each Performance Period shall certify
the extent, if any, to which the Performance Goals set for each Participant for such Performance
Period have been met and shall determine the number of whole shares of Stock issuable to a
Participant based on the extent, if any, to which he or she met his or her Performance Goals.
However, the Committee shall have the right to

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reduce (but not to increase) the number of whole shares of Stock determined under this § 4 to the
extent that the Committee acting in its discretion determines that the Performance Goals set for a
Participant for a Performance Period no longer were appropriate for such Participant at the end of
such Performance Period. If the Committee certifies that shares of Stock are issuable to a
Participant for any Performance Period, 50% of the number of shares of Stock issuable for such
Performance Period shall be issued under the Belk Inc. 2000 Incentive Stock Plan as soon as
practical after such certification has been made and in any event no later than 21/2 months after the
end of the Performance Period provided the employment requirement under § 5 is satisfied, and the
remaining 50% of the number of shares of Stock issuable for such Performance Period) shall be
issued under the Belk Inc. 2000 Incentive Stock Plan on the Delayed Issuance Date provided the
employment requirement in § 5 is satisfied. For the first year of this LTI Plan only (Belk fiscal
year 2009), the number of shares to be issued at the end of the Performance Period based upon the
extent to which the Performance Goals have been met (not including the number of shares to be
issued on the Delayed Issuance Date) shall be increased by 50% as a special transition award.

     4.8 Maximum Shares of Stock. The maximum number of Shares of Stock issuable under
this § 4 to Executive for a Performance Period shall be 100,000.

§ 5. Employment Requirement.

     5.1 General Rule. Executive shall forfeit Executive’s right to the issuance of any
shares of Stock pursuant to § 4.3, § 4.4 or § 4.5 if Executive fails for any reason

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whatsoever to remain employed by Belk, a Belk Affiliate or a Belk Subsidiary from the start of
the Performance Period through the date the shares are issued to Executive, except to the extent
provided in § 5.2.

     5.2 Exceptions.

     (a) Employed After Performance Period Started. No forfeiture shall be
effected under § 5.1 if Executive becomes employed by Belk, a Belk Affiliate or a
Belk Subsidiary after the start of the Performance Period (but before the beginning
of the fourth quarter of such period) and remained so employed through the end of
the Performance Period and through the date such shares of Stock are issued to
Executive, but the number of shares of Stock issuable to Executive, if any, shall be
determined under § 5.2(e).

     (b) Death. No forfeiture shall be effected under § 5.1 if Executive’s
employment by Belk, a Belk Affiliate or a Belk Subsidiary terminates after the start
of the Performance Period and before the date shares of Stock are issued to
Executive for such Performance Period as a result of Executive’s death, but the
number of shares of Stock issuable on behalf of Executive, if any, shall be
determined under § 5.2(e) and such shares shall be issued to Executive’s estate.

     (c) Disability. No forfeiture shall be effected under § 5.1 if
Executive’s employment by Belk, a Belk Affiliate or a Belk Subsidiary Belk, is
terminated after the start of the Performance Period and before the date shares of
Stock are issued to Executive for such Performance Period

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because the Board deems that Executive is no longer able even with reasonable
accommodation to perform the essential functions of Executive’s job as a result of a
physical or mental impairment, but the number of shares of Stock issuable to
Executive, if any, shall be determined under § 5.2(e).

     (d) Retirement. No forfeiture shall be effected under § 5.1 if, after
Executive reaches age 55 and completes 10 years of service (as determined under the
Belk 401(K) Savings Plan), Executive retires or otherwise separates from employment
under circumstances which the Committee determines should be treated as the
equivalent of retirement after the start of the Performance Period and before the
date shares of Stock are issued to Executive Performance Period and Executive for
the remainder of such time period refrains from engaging in any employment related
activities which the Committee deems inconsistent with Executive’s status as a
retired employee of Belk, a Belk Affiliate or a Belk Subsidiary; but the number of
shares of Stock issuable to Executive, if any, shall be determined under § 5.2(e).

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     (e) One Fiscal Quarter Minimum and Pro-Ration Rules.

     (1) Executive shall forfeit Executive’s right to the issuance of any
shares of Stock pursuant to § 4.3, 4.4, § 4.5 and this § 5.2(e) unless
Executive is employed by Belk, a Belk Affiliate or a Belk Subsidiary for at
least one full fiscal quarter in the Performance Period.

     (2) If Executive was employed by Belk, a Belk Affiliate or a Belk
Subsidiary for at least one full fiscal quarter in the Performance Period,
the number of shares of Stock otherwise issuable to or on behalf of
Executive shall be reduced by the Committee pursuant to this § 5.2(e) to
reflect the fact that Executive was so employed for less than the full
Performance Period. The Committee shall determine the reduced number of
shares of Stock to be issued under the Plan to Executive by multiplying the
number of shares of Stock otherwise issuable to Executive pursuant to § 4 by
a fraction, the numerator of which shall be the number of full months
(rounding down any partial months to the next lowest number of months) that
Executive was employed by Belk, a Belk Affiliate or a Belk Subsidiary in
such Performance Period and the denominator of which shall be twelve (12),
and then rounding up to the nearest whole share of Stock.

§ 6. Stock Issuance and Minimum Tax Withholding. The Committee as soon as practicable
after the end of the Performance Period shall determine the number of

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whole shares of Stock, if any, to be issued to Executive. For each issuance of shares of Stock to
Executive, the Committee shall notify Executive of the number of shares to be issued by Belk and
Executive’s deadline for making a decision regarding payment of withholding. If Executive fails to
make such decision, and any required payment, by such deadline, Belk shall reduce the total number
of whole shares of Stock to be issued to or on behalf of Executive at such time by a number
sufficient for Belk to pay the minimum income tax withholding due on all such shares of Stock based
on the value assigned by Belk to such shares of Stock and shall then issue the reduced number of
shares of Stock to or on behalf of Executive. If Executive makes such payment, there will be no
reduction in the total number of shares of Stock issued to Executive pursuant to this § 6, and the
total number of shares of Stock due shall be issued to or on behalf of Executive.

§ 7. 2000 Incentive Stock Plan. Any Shares of Stock issued to or on behalf of Executive
pursuant to the CERTIFICATE and this Exhibit A shall be issued subject to the terms and conditions
set forth in the 2000 Incentive Stock Plan.

§ 8. Reference. All references in this Exhibit A or the Certificate to sections (§) shall
be to sections (§) of this Exhibit A.

§ 9. Administration, Amendment and Termination. The Committee shall have the power to
interpret and administer this Program as the Committee in its absolute discretion deems in the best
interest of Belk and the Committee to the extent practicable

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shall do so to protect Belk’s right to deduct, in light of § 162(m) of the Internal Revenue Code,
any shares of Stock issuable under the LTI Plan to any participant who is Belk’s chief executive
officer or one of its four other executive officers who are treated under § 162(m) of the Internal
Revenue Code as a “covered employee”. The Committee shall have the power to amend this program
from time to time as the Committee deems necessary or appropriate and to terminate this program if
the Committee deems such termination in the best interest of Belk.

-13-EX-10.1 Amendment Agreement

EXHIBIT 10.1

AMENDMENT AGREEMENT

     AMENDMENT AGREEMENT, dated of as June 6, 2008, by and between ADVANCED VIRAL RESEARCH CORP., a
Delaware corporation (“Company”), and YA GLOBAL INVESTMENTS, L.P. (formerly, CORNELL
CAPITAL PARTNERS, LP) (“Buyer”). All capitalized terms used herein shall have the
respective meanings assigned thereto in the Transaction Documents (as defined below) unless
otherwise defined herein.

W I T N E S S E T H:

     WHEREAS, the Company and the Buyer are party to that certain Securities Purchase Agreement
(the “Securities Purchase Agreement”) dated July 24, 2007, that certain Registration Rights
Agreement (the “Registration Rights Agreement”) dated July 24, 2007, and other documents
and agreements, as amended, entered into in connection therewith (collectively, the
“Transaction Documents”).

     WHEREAS, pursuant to the Securities Purchase Agreement, the Second Closing and the Third
Closing (collectively, the “Remaining Closings”) were to take place upon the filing of the
Registration Statement and upon the effectiveness of the Registration Statement, respectively
(among other conditions);

     WHEREAS, the parties desire certain terms and conditions of the Transaction Documents to,
among other things, change the timing of, amounts of, and conditions to, the Remaining Closings as
set forth herein.

     NOW, THEREFORE, in consideration of the foregoing, and the respective agreements, warranties
and covenants contained herein, the parties hereto agree, covenant and warrant as follows:

	 	1.	 	Amendments to the Remaining Closings. The Securities Purchase Agreement shall
be amended such that Remaining Closings shall hereinafter take place as follows:

	 	a.	 	The Remaining Closings shall be broken into four (4) separate closings,
each of which shall be referred to as an “Amended Closing” and
collectively, the “Amended Closings.”
	 
	 	b.	 	Amended Closing Dates

	 	i.	 	The first Amended Closing shall take place on the
date hereof, subject to the satisfaction of the conditions to such
closing set forth in Section 2(a) hereof and Section 6 of the Securities
Purchase Agreement.
	 
	 	ii.	 	The second Amended Closing shall take place on June
30, 2008, subject to the satisfaction of the conditions to such closing
set forth in Section 2(b) hereof and Section 6 of the Securities Purchase
Agreement.
	 
	 	iii.	 	The third Amended Closing shall take place on or
after August 1, 2008, subject to the satisfaction of the conditions to
such closing set forth in Section 2(c) hereof and Section 6 of the
Securities Purchase Agreement.

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	 	iv.	 	The fourth Amended Closing shall take place on or
after October 1, 2008, subject to the satisfaction of the conditions to
such closing set forth in Section 2(d) hereof and Section 6 of the
Securities Purchase Agreement. The date of each Amended Closing shall be
referred to herein as an “Amended Closing Date”

	 	c.	 	On the first Amended Closing Date the Buyer shall purchase Series B
Convertible Debentures in the principal amount of $312,000, on the second Amended
Closing Date the Buyer shall purchase Series B Convertible Debentures in the
principal amount of $313,000, on the third Amended Closing Date the Buyer shall
purchase Series B Convertible Debentures in the principal amount of $312,000, and
on the fourth Amended Closing Date the Buyer shall purchase Series B Convertible
Debentures in the principal amount of $313,000.
	 
	 	d.	 	Subject to the satisfaction of the terms and conditions of this
Agreement, on the each of the Amended Closing Dates, (i) the Buyer shall deliver to
the Company such aggregate proceeds for the Series B Convertible Debentures to be
issued and sold to the Buyer, minus the fees to be paid directly from the proceeds
of the such Amended Closing as set forth herein or in the Securities Purchase
Agreement, and (ii) the Company shall deliver to the Buyer, the Series B
Convertible Debentures which such Buyer is purchasing in amounts indicated herein,
duly executed on behalf of the Company.
	 
	 	e.	 	The conditions set forth in Section 7(b) and 7(c) of the Securities
Purchase Agreement shall be deleted in their entirely and the conditions set forth
herein shall control.
	 
	 	f.	 	On the date hereof the Company shall provide the Buyer with a detailed
budget (the “Budget”) which Budget shall show all of the Company’s
projected expenses and cash expenditures on a monthly basis from June 1, 2008
through December 31, 2008. The Company shall not exceed any particular line item
of the Budget or any monthly total expenditure by more than 10% provided, however,
if the Company’s actual expenses and cash expenditures for any particular month,
either in the aggregate or for any particular line item(s), are lower than as set
forth on the Budget (the amount by which it is lower is hereinafter defined as
the “Difference”), the Company’s projected expenses and cash expenditures for
particular line item amounts and aggregate amounts set forth on the Budget for the
immediately subsequent month shall be increased by the amount of the Difference
(the “Margin of Deviation”). For the avoidance of doubt and by way of example, if
the July 2008 projected monthly expense for utilities as set forth on the Budget
is $5000 and the actual expense for utilities for July 2008 is $4000, the
projected monthly expense for utilities for the month of August 2008 shall be
increased by $1000.

	 	2.	 	Conditions to the Buyer’s obligations to Purchase Convertible Debentures.

	 	a.	 	The obligation of the Buyer to purchase the Series B Convertible
Debenture at the first Amended Closing is subject to the satisfaction, at or before
the first Amended Closing Date, of each of the following conditions:

	 	i.	 	The Common Stock (I) shall be designated for
quotation or listed on the Principal Market and (II) shall not have been
suspended, as of the first Amended Closing Date, by the SEC or the
Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of
the first Amended Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market.

2

 

	 	ii.	 	The representations and warranties of the Company
set forth herein and in the Securities Purchase Agreement shall be true
and correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to
materiality in Section 3 of the Securities Purchase Agreement, in which
case, such representations and warranties shall be true and correct
without further qualification) as of the date when made and as of the
first Amended Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date and
except for Section 3(c) of the Securities Purchase Agreement with respect
to (i) the number of shares of Common Stock outstanding which as of the
date hereof is 846,227,669; and (ii) the number of outstanding
convertible securities, which is disclosed in the Company’s most recent
public filings with the SEC) and the Company shall have performed,
satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the
first Amended Closing Date.
	 
	 	iii.	 	The Company shall have executed and delivered to
the Buyer the Series B Convertible Debenture in the respective amounts
set forth in Section 1(c) hereof.
	 
	 	iv.	 	The Company shall have certified, in a certificate
executed by two officers of the Company and dated as of the first Amended
Closing Date, that all conditions to the first Amended Closing have been
satisfied.
	 
	 	v.	 	The Company shall have provided the Budget the
Buyer in a form and substance to the satisfaction of the Buyer in its
sole discretion.

	 	b.	 	The obligation of the Buyer to purchase the Series B Convertible
Debenture at the second Amended Closing is subject to the satisfaction, at or
before the second Amended Closing Date, of each of the following conditions:

	 	i.	 	The Common Stock (I) shall be designated for
quotation or listed on the Principal Market and (II) shall not have been
suspended, as of the second Amended Closing Date, by the SEC or the
Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of
the second Amended Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market.
	 
	 	ii.	 	The representations and warranties of the Company
set forth herein and in the Securities Purchase Agreement shall be true
and correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to
materiality in Section 3 of the Securities Purchase Agreement, in which
case, such representations and warranties shall be true and correct
without further qualification) as of the date when made and as of the
second Amended Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date and
except for Section 3(c) of the Securities Purchase Agreement with respect
to (i) the number of shares of

3

 

	 	 	 	Common Stock outstanding which as of the date hereof is 846,227,669; and
(ii) the number of outstanding convertible securities, which is disclosed in
the Company’s most recent public filings with the SEC) and the Company shall
have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents
to be performed, satisfied or complied with by the Company at or prior to
the second Amended Closing Date.
	 
	 	iii.	 	The Company shall have executed and delivered to
the Buyer the Series B Convertible Debenture in the respective amounts
set forth in Section 1(c) hereof.
	 
	 	iv.	 	The Company’s actual expenses and cash expenditures
for each of the full calendar months from June 1, 2008 until the second
Amended Closing Date shall have been less than or equal to the projected
amounts set forth on the Budget, subject to the Margin of Deviation.
	 
	 	v.	 	The Company shall have certified, in a certificate
executed by two officers of the Company and dated as of the second
Amended Closing Date, that all conditions to the second Amended Closing
have been satisfied.

	 	c.	 	The obligation of the Buyer to purchase the Series B Convertible
Debenture at the third Amended Closing is subject to the satisfaction, at or before
the third Amended Closing Date, of each of the following conditions:

	 	i.	 	The Common Stock (I) shall be designated for
quotation or listed on the Principal Market and (II) shall not have been
suspended, as of the third Amended Closing Date, by the SEC or the
Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of
the third Amended Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market.
	 
	 	ii.	 	The representations and warranties of the Company
set forth herein and in the Securities Purchase Agreement shall be true
and correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to
materiality in Section 3 of the Securities Purchase Agreement, in which
case, such representations and warranties shall be true and correct
without further qualification) as of the date when made and as of the
third Amended Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date and
except for Section 3(c) of the Securities Purchase Agreement with respect
to (i) the number of shares of Common Stock outstanding which as of the
date hereof is 846,227,669; and (ii) the number of outstanding
convertible securities, which is disclosed in the Company’s most recent
public filings with the SEC) and the Company shall have performed,
satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the
third Amended Closing Date.
	 
	 	iii.	 	The Company shall have executed and delivered to
the Buyer the Series B Convertible Debenture in the respective amounts
set forth in Section 1(c) hereof.

4

 

	 	iv.	 	The Company’s actual expenses and cash expenditures
for each of the full calendar months from June 1, 2008 until the third
Amended Closing Date shall have been less than or equal to the projected
amounts set forth on the Budget, subject to the Margin of Deviation.
	 
	 	v.	 	The Company shall have achieved the First Milestone
on or prior to March 31, 2009.
	 
	 	vi.	 	The third Amended Closing Date shall not be before
August 1, 2008.
	 
	 	vii.	 	The Company shall have certified, in a certificate
executed by two officers of the Company and dated as of the third Amended
Closing Date, that all conditions to the third Amended Closing have been
satisfied.

	 	d.	 	The obligation of the Buyer to purchase the Series B Convertible
Debenture at the fourth Amended Closing is subject to the satisfaction, at or
before the fourth Amended Closing Date, of each of the following conditions:

	 	i.	 	The Common Stock (I) shall be designated for
quotation or listed on the Principal Market and (II) shall not have been
suspended, as of the fourth Amended Closing Date, by the SEC or the
Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of
the fourth Amended Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market.
	 
	 	ii.	 	The representations and warranties of the Company
set forth herein and in the Securities Purchase Agreement shall be true
and correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to
materiality in Section 3 of the Securities Purchase Agreement, in which
case, such representations and warranties shall be true and correct
without further qualification) as of the date when made and as of the
fourth Amended Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date and
except for Section 3(c) of the Securities Purchase Agreement with respect
to (i) the number of shares of Common Stock outstanding which as of the
date hereof is 846,227,669; and (ii) the number of outstanding
convertible securities, which is disclosed in the Company’s most recent
public filings with the SEC) and the Company shall have performed,
satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the
fourth Amended Closing Date.
	 
	 	iii.	 	The Company shall have executed and delivered to
the Buyer the Series B Convertible Debenture in the respective amounts
set forth in Section 1(c) hereof.
	 
	 	iv.	 	The Company’s actual expenses and cash expenditures
for each of the full calendar months from June 1, 2008 until the fourth
Amended Closing Date shall have been less than or equal to the projected
amounts set forth on the Budget, subject to the Margin of Deviation.

5

 

	 	v.	 	The Company shall have achieved the Second
Milestone on or before May 31, 2009.
	 
	 	vi.	 	The fourth Amended Closing Date shall not be before
October 1, 2008.
	 
	 	vii.	 	The Company shall have certified, in a certificate
executed by two officers of the Company and dated as of the fourth
Amended Closing Date, that all conditions to the fourth Amended Closing
have been satisfied.

	 	e.	 	Defined Terms. For the purposes of this Section 2, the
following terms shall have the following meanings:

	 	i.	 	“First Milestone” means the enrollment of
the first human patient in a Phase II Trial for wound healing in a
dermatological study using a topical application of the Company’s AVR123.
	 
	 	ii.	 	“Second Milestone” means the enrollment of
12 patients in a Phase II Trial for wound healing in a dermatological
study using a topical application of the Company’s AVR123.
	 
	 	iii.	 	“Phase II Trial” means a, closely monitored
human clinical trial designed to measure safety and efficacy in a small
number of patients sponsored by the Company or one of its subsidiaries
that complies with the requirements of the Food and Drug Administration.

	 	3.	 	Amendments and Agreements. The Buyer and the Company further agree as follows:

	 	a.	 	The Registration Rights Agreement is hereby terminated and of no
further force or effect and all obligations of the Buyer or the Company pursuant
to the Securities Purchase Agreement which are in any way triggered, impacted by or
otherwise affected by the filing, or effectiveness of a Registration Statement
shall be terminated.
	 
	 	b.	 	The provisions of Section 4(g)(i) of the Securities Purchase Agreement
shall not be applicable with respect to the Amended Closings, however, the Company
shall pay monitoring fees (the “Monitoring Fees”) in the aggregate amount
of $125,000, of which $62,500 shall be paid directly from the proceeds of the first
Amended Closing and $62,500 shall be paid directly from the proceeds of the third
Amended Closing and shall be used to compensate Yorkville Advisors, LLC
(“Investment Manager”) for monitoring and managing the purchase and
investment made by the Buyer described herein and in the Securities Purchase
Agreement, pursuant to the Investment Manager’s existing advisory obligations to
the Buyer.
	 
	 	c.	 	The provisions of Section 4(n) of the Securities Purchase Agreement
titled “Rights of First Refusal” shall no longer be in effect.
	 
	 	d.	 	Any default under this Agreement shall constitute an Event of Default
under the Transaction Documents.
	 
	 	e.	 	All references to the term “Fixed Price” in Section 4 (k) of the
Securities Purchase Agreement, shall mean “Fixed Conversion Price.”

6

 

	 	f.	 	All references in the Transaction Documents to the term “Primary
Market” shall mean “Principal Market.”

	 	4.	 	Effect of this Agreement. Except as modified pursuant hereto, no other changes
or modifications to the Transaction Documents are intended or implied and in all other
respects the Transaction Documents are hereby specifically ratified, restated and confirmed
by all parties hereto as of the effective date hereof. To the extent of conflict between
the terms of this Agreement and the other Transaction Documents, the terms of this
Agreement shall control.

     IN WITNESS WHEREOF, this Agreement is executed and delivered as of the day and year first
above written.

	 	 	 	 	 
	 	Advanced Viral Research Corp.

 	 
	 	By:  	/s/ Stephen Elliston
 	 
	 	 	Title: Chief Executive Officer 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	YA Global Investments, L.P.

 	 
	 	By:  	Yorkville Advisors, LLC
 	 
	 	 	Its: Investment Manager 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Gerald Eicke
 	 
	 	 	Title: Managing Partner 	 
	 	 	 	 
	 

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