REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of January , 1997 by and
between Hemispherx Biopharma, Inc., a Delaware corporation (the Company"), and
the person whose name appears on the signature page attached hereto
(individually a "Holder" and collectively, with the holders of other securities
issued in the Offering, the "Holders").
WHEREAS, pursuant to a Subscription Agreement (the "Subscription
Agreement"), the Holder has offered to purchase shares of the Company's Series E
Convertible Preferred Stock ("Series E Preferred Shares") from the Company;
WHEREAS, in order to induce the Holders to enter into the Subscription
Agreement and to purchase the Series E Preferred Shares, the Company and the
Holders have agreed to enter into this Agreement;
WHEREAS, it is intended by the Company and the Holders that his Agreement
shall become effective immediately upon the acquisition by the Holders of the
Series E Preferred Shares;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Company hereby agrees as follows:
A. REGISTRATION RIGHTS
1. Registration Rights
(a) Option to Include Securities in Registration Statement. The
Company will use its best efforts to file a registration statement (subject to
the availability of the Company's annual Financial Statements), seeking to
register all shares of Common Stock underlying the Series E Preferred Shares
("Underlying Shares"), on Form S-1 or other comparable form, with the Securities
and Exchange Commission no later than 30 days from the closing of the Offering
(as defined in the accompanying Agreement between the Company and the
Holder)("Registration Statement"). The Company agrees to use its best efforts to
have the Registration Statement declared effective. The Holders agree to execute
and/or deliver such documents in connection with such registration as the
Company may request. If the Holders' Underlying Shares are so registered, the
Company's obligations under Article 1 herein will be deemed satisfied in full.
(b) Cooperation with Company. The Holders will cooperate with the
Company in all respects in connection with this Agreement, including, timely
supplying all information reasonably requested by the Company and executing and
returning all documents reasonably requested in connection with the registration
and sale of the Underlying Shares.
2. Registration Procedures. If and whenever the Company is required by any
of the provisions of this Agreement to use its best efforts to effect the
registration of any of the
Underlying Shares under the Securities Act of 1933, as amended ("Act"), the
Company shall (except as otherwise provided in this Agreement), as expeditiously
as possible:
(a) prepare and file with the Commission a Registration Statement and
shall use its best efforts to cause such Registration Statement to become
effective and remain effective until all the Underlying Shares are sold or
become capable of being publicly sold without registration under the Act.
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Act with respect to the sale or other
disposition of all securities covered by such Registration Statement whenever
the Holder or Holders of such securities shall desire to sell or otherwise
dispose of the same (including prospectus supplements with respect to the sales
of securities or the exercise of the Underlying Shares from time to time in
connection with a Registration Statement pursuant to Rule 415 of the
Commission);
(c) notify each Holder of Series E Preferred Shares covered by such
Registration Statement, at any time when a prospectus relating thereto covered
by such Registration Statement is required to be delivered under the Act, of the
happening of any event of which it has knowledge as a result of which the
prospectus included in such Registration Statement, as then in effect, includes
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(d) take such other actions as shall be reasonably requested by any
Holder to facilitate the registration and sale of the Underlying Shares;
provided, however, that the Company shall not be obligated to take any actions
not specifically required elsewhere herein which in the aggregate would cost in
excess of $5,000.
3. Expenses. All expenses incurred in any registration of the Holders'
Underlying Shares under this Agreement shall be paid by the Company, including,
without limitation, printing expenses, fees and disbursements of counsel for the
Company and each participating Holder, expenses of any audits to which the
Company shall agree or which shall be necessary to comply with governmental
requirements in connection with any such registration, all registration and
filing fees for the Holders' Underlying Shares under federal and state
securities laws; provided, however, the Company shall not be liable for (a) any
discounts or commissions to any underwriter or broker/dealer; (b) any stock
transfer taxes incurred with respect to Underlying Shares sold in the Offering;
or (c) the fees and expenses of counsel for any Holder, provided that the
Company will pay the costs and expenses of Company counsel when the Company's
counsel is representing any or all selling Holders.
4. Indemnification. In the event any Underlying Shares are included in a
Registration Statement pursuant to this Agreement:
2
(a) Company Indemnity. Without limitation of any other indemnity
provided to any Holder, either in connection with the Offering or otherwise, to
the extent permitted by law, the Company shall indemnify and hold harmless each
Holder, the affiliates, officers, directors and partners of each Holder, any
underwriter (as defined in the Act) for such Holder, and each person, if any,
who controls such Holder or underwriter (within the meaning of the Act or the
Securities Exchange Act of 1934 ("Exchange Act"), against any losses, claims,
damages or liabilities (joint or several) to which they may become subject under
the Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statements,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, (iii) any violation or alleged violation by the Company of
the Act or the Exchange Act, or (iv) any state securities law or any rule or
regulation promulgated under the Act, the Exchange Act or any state securities
law. The Company shall reimburse each such Holder, affiliate, officer or
director or partner, underwriter or controlling person for any legal or other
expenses incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the Company
shall not be liable to any Holder in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder or any other officer, director or controlling person thereof.
(b) Holder Indemnity. Each Holder shall indemnify and hold harmless
the Company, its affiliates, its counsel, officers, directors, shareholders and
representatives, any underwriter (as defined in the Act), against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under any federal or state securities law, and the Holder shall
reimburse the Company, its affiliates, counsel, officers, directors,
shareholders, representatives, underwriters or controlling persons for any legal
or other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any statements or information provided by such Holder to the
Company in connection with the offer or sale of Underlying Shares.
(c) Notice; Right to Defend. Promptly after receipt by an indemnified
party under this ss.4, of notice of the commencement of any action (including
any governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this ss.4, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party agrees that it will be responsible for any costs, expenses,
judgments, damages and losses incurred by the indemnified party with respect to
such claim, jointly with any other indemnifying party similarly noticed, and to
assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party
3
shall have the right to retain its own counsel, with the fees and expenses to be
paid by the indemnifying party, if the indemnified party reasonably believes
that representation of the indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of any liability to the indemnified
party under this Agreement only if and to the extent that such failure is
prejudicial to its ability to defend such action, and the omission to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Agreement.
(d) Contribution. If the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount any Holder shall be obligated to
contribute pursuant to the Agreement shall be limited to an amount equal to the
proceeds to such Holder of the Underlying Shares sold pursuant to the
Registration Statement which gives rise to such obligation to contribute (less
the aggregate amount of any damages which the Holder has otherwise been required
to pay in respect of such loss, claim, damage, liability or action or any
substantially similar loss, claim, damage, liability or action arising from the
sale of such Underlying Shares).
(e) Survival of Indemnity. The indemnification provided by this
Agreement shall be a continuing right to indemnification and shall survive the
registration and sale of any registrable securities by any person entitled to
indemnification hereunder and the expiration or termination of this Agreement.
5. Assignment of Registration Rights. The rights of the Holders under this
Agreement, including the rights to cause the Company to register Underlying
Shares may not be assigned without the written prior consent of the Company.
4
6. Remedies.
(a) Time is of Essence. The Company agrees that time is of the essence
for each of the covenants contained herein and that, in the event of a dispute
hereunder, this Agreement is to be interpreted and construed in a manner that
will enable the Holders to sell their Underlying Shares as quickly as possible
after such Holders have indicated to the Company that they desire their
Underlying Shares to be registered. Any delay on the part of the Company not
expressly permitted under this Agreement, whether material or not, shall be
deemed a material breach of this Agreement.
(b) Remedies Upon Default or Delay. The Company acknowledges that the
breach of any part of this Agreement may cause irreparable harm to a Holder and
that monetary damages alone may be inadequate. The Company therefore agrees that
the Holder shall be entitled to injunctive relief or such other applicable
remedy as a court of competent jurisdiction may provide. Nothing contained
herein will be construed to limit a Holder's right to any remedies at law,
including recovery of damages for breach of any part of this Agreement.
7. Notices.
(a) All communications under this Agreement shall be in writing and
shall be mailed by first class mail, postage prepaid, or telegraphed or telexed
with confirmation of receipt or delivered by hand or by overnight delivery
service,
(i). If to the Company, at:
Hemispherx Biopharma, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or at such other address as it may have furnished in writing to the Holders of
Series E Preferred Shares at the time outstanding, or
(ii) if to any Holder of any Series E Preferred Shares, to the
address of such Holder as it appears in the stock or warrant ledger of the
Company.
(b) Any notice so addressed, when mailed by registered or certified
mail shall be deemed to be given three days after so mailed, when telegraphed or
telexed shall be deemed to be given when transmitted, or when delivered by hand
or overnight shall be deemed to be given when delivered.
8. Successors and Assigns. Except as otherwise expressly provided herein,
this Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of the Company and each of the Holders.
5
9. Amendment and Waiver. This Agreement may be amended, and the observance
of any term of this Agreement may be waived, but only with the written consent
of the Company and the Holders of securities representing a majority of the
Series E Preferred Shares; provided, however, that no such amendment or waiver
shall take away any registration right of any Holder of Series E Preferred
Shares or reduce the amount of reimbursable costs to any Holder of Series E
Preferred Shares in connection with any registration hereunder without the
consent of such Holder; further provided, however, that without the consent of
any other Holder of Series E Preferred Shares, any Holder may from time to time
enter into one or more agreements amending, modifying or waiving the provisions
of this Agreement if such action does not adversely affect the rights or
interest of any other Holder of Series E Preferred Shares. No delay on the part
of any party in the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any party of any
right, power or remedy preclude any other or further exercise thereof, or the
exercise of any other right, power or remedy.
10. Counterparts. One or more counterparts of this Agreement may be signed
by the parties, each of which shall be an original but all of which together
shall constitute one and same instrument.
11. Governing Law. This Agreement shall be construed in accordance with and
governed by the internal laws of the State of New York, without giving effect to
conflicts of law principles.
12. Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
6
13. Headings. The headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
IN WITNESS WHEREOF, undersigned have executed this Agreement as of the ,
day of January, 1997
_______________________________
Signature of Holder
HEMISPHERx BIOPHARMA, INC.
By: ___________________________ _______________________________
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Print Name of Holder
President
_______________________________
_______________________________
Print Address of Holder
7