Exhibit 10.1
Escrow Agreement, effective as of May 31, 1999 by and among:
The holders of Hemispherx Biopharma, Inc. warrants as set
forth on Schedule A attached hereto ("Warrantholders");
HEMISPHERX BIOPHARMA, INC., a Delaware corporation with
offices located at 1617 JFK Boulevard, Philadelphia,
Pennsylvania 19103 ("Company"); and
SILVERMAN, COLLURA & CHERNIS, P.C. as Escrow Agent, with
offices located at 381 Park Avenue South, New York, NY 10016
("Escrow Agent")
WHEREAS, the Company has agreed to file a registration statement
("Registration Statement") with the Securities and Exchange Commission ("SEC")
to register the warrants ("Warrants") and the shares of common stock underlying
the Warrants (collectively, the "Shares") under the Securities Act of 1933, as
amended ("Act") which are owned by the Warrantholders identified on Schedule A;
and
WHEREAS, the Warrantholders have agreed to allow the Company to arrange
for the sale of the Shares through an agent or agents, as yet to be determined,
pursuant to the terms and conditions of this Agreement; and (ii) to release the
Company from any and all claims relating to or arising from any registration
rights contained in the Warrants; and
WHEREAS, the Company has agreed to use its best efforts to arrange the
sale of the Warrants from the Warrantholders, through an agent or agents as yet
to be determined, on a best-efforts basis, during the twelve month period
commencing on the date the SEC declares the Company's Registration Statement
effective, pursuant to the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the covenants set forth herein, it
is mutually agreed as follows:
1. Terms:
1.1 The Company agrees to purchase, or designate an agent or agents
("Placement Agent") to purchase, on a "best efforts" basis within twelve months
of the date the SEC declares the Registration Statement effective ("Effective
Date"), the Warrants from the Warrantholders. There is no assurance that a
Placement Agent will be designated or that the Company or a Placement Agent will
purchase all or a portion of the Warrants from the Warrantholders.
1
1.2 Each Warrantholder shall set a purchase price ("Purchase Price")
at which the Warrantholder will sell his or her Warrants to the Company or
Placement Agent by completing the Purchase Price Election Form, attached hereto
as Exhibit B. The Purchase Price shall be discounted 10%, representing the
Placement Agent's commission on the sale. The Company will not receive any
commissions on sales made by the Company. The Warrantholder's net proceeds will
equal the Purchase Price, less the 10% commission.
1.3 Upon execution of this Agreement, the Warrantholders shall
deliver to the Escrow Agent a copy of this Agreement and the Warrants. The
Escrow Agent shall hold the Warrants in escrow until the earlier of (i) twelve
months from the Effective Date; or (ii) such time that the Company or Placement
Agent notifies the Escrow Agent in writing ("Purchase Notice") that it will
purchase a portion of, or all, the Warrants.
1.4 Upon receipt from the Placement Agent of the Purchase Notice and
the Purchase Price relating to Warrants for which such Purchase Price has been
set by a Warrantholder, the Escrow Agent shall (i) pay to the Company the
exercise price for the Warrants purchased by such Placement Agent; (ii) release
the appropriate number of Warrants to the Company's transfer agent with
instructions to issue the underlying shares of common stock applicable to such
Warrant to the such Placement Agent or its designees; and (iii) disburse the
escrow funds to the holders of the Warrants that were purchased.
1.5 In the event the Purchase Price delivered to the Escrow Agent by
the Placement Agent is not sufficient to purchase all the Warrants that have
such Purchase Price, the Warrants shall be sold in the order of their
expiration. Accordingly, if the event described in this paragraph occurs,
Warrants that expire first shall be sold first. In the event there are Warrants
with the same expiration dates and the event described in this paragraph occurs,
the Warrants will be sold on a pro rata basis.
1.6 Upon the expiration of the twelve month period, any remaining
Warrants will be returned to the respective registered owner thereof.
1.7 The Warrantholders agree that, upon the effectiveness of the
Registration Statement under the Act registering the Shares, which is referred
to in Section 2 herein, any and all obligations of the Company to register the
Shares shall be deemed to have been satisfied in full, and, except for those
obligations specifically set forth in Section 2, the Company shall have no
further obligations with respect to the registration of the Shares.
2. Registration Statement
The Company shall use its best efforts to file with the SEC within 25
days of the execution of this Agreement, a Registration Statement on Form S-3
under the Securities Act registering the Shares. The Company shall use its
reasonable best efforts to cause the Registration Statement to be declared
effective as soon as possible. The Company shall timely take such action as may
be necessary to cause the Registration Statement to remain in effect until the
earlier of (x) the date
2
the last of the Shares have been sold by the Warrantholders, or (y) twenty four
months from the Effective Date. The Company may require each of the
Warrantholders to furnish to the Company such information regarding such
Warrantholder as the Company may from time to time reasonably request in writing
with respect to matters concerning the Company's compliance with the Securities
Act and the Registration Statement filed thereunder. If a Warrantholder does not
furnish such requested information to the Company or otherwise fails to
cooperate with the Company to the extent necessary to enable the Company to
comply with its obligations under the Securities Act, the Company shall not be
obligated to register such Warrantholder's Shares, but shall continue to remain
obligated to register the remainder of the Shares. All expenses incident to the
Company's performance of or compliance with this Article 2, including, without
limitation, all Commission and securities exchange or National Association of
Securities Dealers registration and filing fees, fees and expenses or compliance
with securities or blue sky laws, and printing expenses, shall be borne by the
Company.
3. Miscellaneous Escrow Provisions.
(a) The Escrow Agent shall be entitled to rely upon the truth and
accuracy of any notice received from a Placement Agent, the Warrantholders, or
the Company ("Parties") without any independent investigation or verification by
Escrow Agent.
(b) The Escrow Agent undertakes to perform only such duties as are
expressly set forth to be performed by it hereunder.
(c) The Escrow Agent shall not be liable to any Party in connection
with its performance as Escrow Agent hereunder other than for its willful
misconduct. The Escrow Agent shall not be liable to any Party for delays, timing
and/or delivery of its obligations herein, other than for its willful
misconduct. The Parties hereby jointly and severally indemnify and hold harmless
the Escrow Agent from any and all claims, liabilities, damages, costs and
expenses (including, but not limited to, reasonable attorneys' fees) arising out
of or in connection with this Agreement, and any actions of Escrow Agent in
connection therewith, other than Escrow Agent's willful misconduct.
(d) Upon the distribution of all of the Warrants under the terms
hereof, the Escrow Agent shall be relieved of all liability, responsibility or
obligation with respect to or arising out of this Agreement.
(e) The Escrow Agent shall not be disqualified from representing any
party, its assigns or designees in any action between any of the Parties hereto
by the reason of the fact that the Escrow Agent is acting as an escrow agent
hereunder.
4. Amendments; Waiver. This agreement may be amended, modified,
superseded, canceled,
3
renewed or extended and the terms and covenants hereof may be waived, only by
written instrument executed by all parties hereto, or in the case of a waiver,
by the party waiving compliance. The failure of any party at any time or times
to require performance of any provision hereof shall in no manner affect the
right at a later time to enforce the same. No waiver by either party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be or construed
as a further continuing waiver of any such breach or a waiver of the breach of
any other term or covenant contained in this Agreement.
5. Governing Law. This Agreement shall be governed by and construed and
enforced according to the local laws of the State of New York applicable to
agreements made and to be performed entirely in such state.
6. Assignment This Agreement. Any obligations hereunder may not be
assigned without the written consent of all parties hereto.
7. Headings and Captions. The section Headings herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
8. Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, or when deposited with a
Federal Express employee for transportation to the Escrow Agents, charges
prepaid provided that the communication is addressed to the respective party at
the place indicated on the first page of this Agreement or to such other person
or address designed by the parties to receive notice.
9. Counterpart Signatures. The parties hereto may execute this Agreement
in any number of counterparts, each of which, when executed and delivered by all
the parties, shall have the force and effect of any original. Facsimile
signatures shall be accepted as genuine and deemed the same as original
signatures.
4
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
WARRANTHOLDER
--------------------------------------------
Name:
HEMISPHERX BIOPHARMA, INC.
By:
-----------------------------------------
Dr. William A. Carter, President
SILVERMAN, COLLURA & CHERNIS, P.C.
--------------------------------------------
Solely as Escrow Agent
5
SCHEDULE A
Warrant
Name, Address and Phone # Registration No. No. of Warrants
- ------------------------- ---------------- ---------------
- ------------------------- ---------------- ---------------
- ------------------------- ---------------- ---------------
- ------------------------- ---------------- ---------------
6