Exhibit 10.2
ENGAGEMENT AGREEMENT
Agreement made and entered into as of January 1, 2004 between Hemispherx
Biopharma, Inc. a Delaware Corporation (the "Company") and Xxxxxxx X. Xxxxxx,
M.D., of Tavernier, Florida ("Xxxxxx").
In consideration of the premises and the mutual covenants and conditions herein
contained the Company and Xxxxxx hereby agree as follows:
1. Engagement. The Company engages Xxxxxx and Xxxxxx agrees to serve
the Company as a consultant relating to patent development. Additionally, Xxxxxx
shall serve, so long as he is elected by the shareholders of the Company, as a
Director of the Company, and shall serve, so long as he is elected by the Board
of Directors of the Company, as chairman of the Executive Committee of the Board
of Directors of the Company. It is expressly understood and agreed that all of
Carter's services hereunder are being provided as an independent contractor and
not as an employee for federal tax purposes.
2. Term. This Agreement shall commence as of January 1, 2004 and shall
terminate on May 8, 2008 (the "Initial Termination Date") unless sooner
terminated in accordance with Section 5 hereof or unless renewed as hereinafter
provided (such period of service together with any extension thereto hereinafter
being called the "Service Period"). This Agreement shall be automatically
renewed for successive one (1) year periods after the original Termination Date
unless written notice of refusal to renew is given by one party to the other at
least ninety days prior to the initial Termination Date or the expiration of any
renewal period.
3. Fees.
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(a) For his services to the Company the Company shall pay
Xxxxxx a fee (the "Base Fee") of $201,725.20 per year (the
"Original Base Fee"), which shall be subject to adjustments as
provided in succeeding subsections (b) and (c).
(b) On January 1, 2005, and on January 1, of each succeeding
calendar year during the Service Period, the Base Fee shall be
increased or decreased by the amount of increase or decrease
in the annual dollar value of Directors fees being provided to
the individual Directors of the Company from the December of
the preceding year to the December of the second preceding
year.
(c) On January 1, 2005, and on January 1 of each succeeding
calendar year during the Service Period and after the
adjustment provided for in subsection (b) above, the Base Fee
shall be increased or decreased by a percentage equal to the
percentage average increase or decrease in the Bureau of Labor
Statistics "Consumer Price Index - U.S. City Average - All
Items" from December of the second preceding year.
(d) For each calendar year (or part thereof) during which this
Agreement is in effect, Xxxxxx shall be eligible to be paid a
performance bonus in an amount up to twenty-five percent (25%)
of his Base Fee then in effect, in the sole discretion of the
Compensation Committee of the Board of Directors based on
Carter's performance for such year.
4. Expenses.
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During the Service Period, Xxxxxx, upon presentation of payment vouchers or
receipts, will be reimbursed for the reasonable and necessary expenses incurred
by him in providing services pursuant to this Agreement.
5. Termination.
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(a) The Company may discharge Xxxxxx for cause at any time as provided
herein, For purposes hereof, "cause" shall refer to (i) habitual neglect by
Xxxxxx to provide services hereunder, or (ii) Carter's conviction for a felony
or a misdemeanor involving moral turpitude.
(b) This Agreement shall terminate upon the death or disability of Xxxxxx.
For purposes of this subsection (b), "disability" shall mean the inability of
Xxxxxx effectively to substantially provide the services hereunder by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.
(c) Xxxxxx shall have the right to terminate this Agreement upon not less
than thirty (30) days prior written notice of termination.
6. Effect of Termination.
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(a) In the event that this Agreement is terminated for "cause" pursuant to
subsection 5(a) or at Carter's election pursuant to subsection 5(c), the Company
shall pay Xxxxxx only the fees due and payable to him through the date of the
termination of this Agreement.
(b) In the event that this Agreement is terminated at any time without
"cause", as defined in subsection 5(a), the Company shall pay to Xxxxxx the fees
otherwise due and payable to him through the last day of the then current term
of this Agreement.
(c) In the event this Agreement is terminated due to Carter's death or
disability pursuant to 5(b), the Company shall pay to Xxxxxx only the fees
otherwise due and payable to him through the last day of the month in which such
termination occurs.
7. Carter's Representations and Warranties.
Xxxxxx hereby represents and warrants to the Company that he has the right
to enter into this Agreement, and his execution, delivery and performance of
this Agreement (a) will not violate any contract to which Xxxxxx is a party or
any applicable law or regulation nor give rise to any rights in any other person
or entity and (b) are not subject to the consent of any other person or entity.
8. Notices.
Any notice or other communication pursuant to this Agreement shall be in
writing and shall be sent by telecopy or by certified or registered mail
addressed to the respective parties as follows:
(i) If to the Company, to:
HEMISPHERX BIOPHARMA, INC.
Xxx Xxxx Xxxxxx
0000 XXX Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 1910
Telecopier No.: (000) 000-0000
Attention: President
(ii) If to Xxxxxx, to:
Xxxxxxx X. Xxxxxx, M.D.
00000 Xxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
or to such other address as the parties shall have designated by notice to the
other parties given in accordance with this section. Any notice or other
communication shall be deemed to have been duly given if personally delivered or
mailed via registered or certified mail, postage prepaid, return receipt
requested, or, if sent by telecopy, when confirmed.
9. Modification.
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No modification or waiver of this Agreement or any provision hereof shall
be binding upon the party against whom enforcement of such modification or
waiver is sought unless it is made in writing and signed by or on behalf of both
parties hereto.
10. Miscellaneous.
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(a) This Agreement shall be subject to and construed in accordance with the
laws of the Commonwealth of Pennsylvania.
(b) The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate and be construed as a waiver or a
continuing waiver by that party of the same or any subsequent breach of any
provision of this Agreement by the other party.
(c) If any provisions of this Agreement or the application thereof to any
person or circumstance shall be determined by an arbitrator (or panel or
arbitrators) or any court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder hereof, or the application of such
provision to persons or circumstances other than those as to which it is so
determined to be invalid or unenforceable, shall not - be affected thereby, and
each provision hereof shall be valid and shall be enforced to the fullest extent
permitted by law.
(d) This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective heirs, executors and administrators,
successors and assigns.
(e) This Agreement shall not be assignable in whole or in part by either
party, except that the Company may assign this Agreement to and it shall be
binding upon any subsidiary or affiliate of the Company or any person, firm or
corporation with which the Company may be merged or consolidated or which may
acquire all or substantially all of the assets of the Company.
IN WITNESS WHEREOF, this Agreement has been signed by the parties
hereto as of the date first above written.
HEMISPHERX BIOPHARMA, INC.
By: /s/Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx, Secretary
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
