SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDED SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(A)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 2)1
Siga Technologies, Inc.
---------------------------
(Name of Issuer)
Common Stock, par value $.0001 per share
----------------------------------------
(Title of Class of Securities)
82 6917-10-6
------------
(CUSIP Number)
Donald G. Drapkin
35 East 62nd Street
New York, NY 10021
(212) 872-0012
with a copy to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022
Attn: Thomas E. Constance
(212) 715-9100
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
May 31, 2001
------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [x]
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See Rule
13d-7 for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 10 Pages)
- ------------------
1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
- --------------------------------------------------------------------------------
13D Page 2 of 10 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Donald G. Drapkin
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF, OO (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,652,945 ** ***
BENEFICIALLY -------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 11,750 ***
PERSON WITH -------------------------------------------------
9 SOLE DISPOSITIVE POWER
747,313 ***
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,750 ***
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,664,695 ** ***
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
*** [x]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.9%** ***
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** Mr. Drapkin has entered into a Management Restructuring Agreement (see Item
4), pursuant to which, he will be granted proxies giving him voting power over
an aggregate of 905,632 shares of Common Stock.
*** Mr. Drapkin holds, inter alia, a warrant (an "Investor Warrant") to purchase
347,826 shares of Common Stock. However, the Investor Warrant provides that,
with certain limited exceptions, it is not exercisable if, as a result of such
exercise, the number of shares of Common Stock beneficially owned by Mr. Drapkin
and his affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unexercised portion of such
Investor Warrant) would exceed 9.99% of the outstanding shares of Common Stock.
As a result of the restrictions described in the immediately preceding sentence
and the other securities which Mr. Drapkin may be deemed beneficially to own, as
of May 11, 2001, Mr. Drapkin's Investor Warrant is not presently exercisable.
- --------------------------------------------------------------------------------
13D Page 3 of 10 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Drapkin Family Charity Foundation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 11,750
PERSON WITH --------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
11,750
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,750
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00 (see Item 2)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
13D Page 4 of 10 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Gabriel M. Cerrone
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF, OO (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 817,700 **
PERSON WITH --------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
817,700 **
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
817,700 **
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** Mr. Cerrone, as the sole general partner of Panetta Partners Ltd., may be
deemed beneficially to own the securities held by Panetta.
- --------------------------------------------------------------------------------
13D Page 5 of 10 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Panetta Partners Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Colorado
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 817,700
PERSON WITH -------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
817,700
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
817,700
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
13D Page 6 of 10 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Thomas E. Constance
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
N/A
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0
PERSON WITH -------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
- --------------------------------------------------------------------------------
13D Page 7 of 10 pages
CUSIP No. 82 6917-10-6
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Eric A. Rose, M.D.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 100,000
BENEFICIALLY --------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0
PERSON WITH --------------------------------------------------
9 SOLE DISPOSITIVE POWER
100,000
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
100,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
SCHEDULE 13D
This Amendment No. 2 amends and supplements the Reporting Persons'
Statement on Schedule 13D, dated March 30, 2001, as amended to date
(the "Schedule").
Item 3. Source and Amount of Funds or Other Consideration
The information contained in Item 3 to the Schedule is hereby
amended and supplemented by replacing the final paragraph thereof
with the following:
On May 31, 2001, the Issuer consummated another closing of its
private placement pursuant to May 2001 Purchase Agreements in which
closing Panetta purchased, with $63,000 of its general funds, 31,500
shares of Common Stock and a May 2001 Investor Warrant to purchase
up to 31,500 shares of Common Stock.
Each Reporting Person disclaims beneficial ownership of all the
Common Stock except Common Stock held by such Reporting Person that
were purchased on the open market or pursuant to the May 2001
Purchase Agreement (collectively, the "Purchased Common"). Each
Reporting Person disclaims beneficial ownership of the securities
held by any other party.
Item 5. Interest in Securities of Issuer.
The information contained in Item 5 to the Schedule is hereby
amended and supplemented to read in its entirety as follows:
(a) As of May 31, 2001: Mr. Drapkin, as the holder of securities
of the Issuer, as proxyholder under the Proxies, and through
the holdings of the Charity, may be deemed beneficially to own
1,664,695 shares of Common Stock or 20.9% of the outstanding
shares, and, if not for the 9.99% Limit, Mr. Drapkin could be
deemed to beneficially own 2,012,521 shares of Common Stock or
23.2% of the outstanding shares; Mr. Cerrone, as the sole
general partner of Panetta, may be deemed beneficially to own
817,700 shares of Common Stock or 9.5% of the outstanding
shares; and each of the Charity, Panetta, Mr. Constance and
Dr. Rose may be deemed beneficially to own the respective
numbers of shares of Common Stock set forth below:
Charity 11,750
Panetta 817,700
Mr. Constance 0
Dr. Rose 100,000
Pursuant to Rule 13d-4 promulgated under the Securities
Exchange Act of 1934, as amended, each Reporting Person
disclaims beneficial ownership of all the Common Stock except
the Purchased Common Stock, if any, held by such Reporting
Person. Pursuant to Rule 13d-4 promulgated under the
Securities Exchange Act of 1934, as amended, each Reporting
Person disclaims beneficial ownership of the securities held
by any other person.
(b) Mr. Drapkin has the sole power to vote or to direct the vote
and to dispose or to direct the disposition of the shares that
he owns. Mr. Drapkin has the sole power to vote or to direct
the vote of the Proxy Shares. Mr. Drapkin and the Charity may
be deemed to share the power to vote or to direct the vote and
to dispose or to direct the disposition of the shares owned by
the Charity. Mr. Cerrone and Panetta share the power to vote
or to direct the vote and to dispose or to direct the
disposition of the shares owned by Panetta. Dr. Rose has the
sole power to vote or to direct the vote and to dispose or to
direct the disposition of the shares that he owns. Mr.
Constance does not beneficially own any shares of Common
Stock.
(c) Other than entering into the Conversion Agreement and
receiving Conditional Grants (to the extent that any of the
above may be deemed a transaction in the Common Stock), and
purchasing Common Stock pursuant to the May 2001 Purchase
Agreements, no Reporting Person has engaged in any
transactions in the Common Stock of the Issuer in the past 60
days.
(Page 8 of 10 Pages)
(d)&(e) Not applicable.
Item 7. Material to be Filed as Exhibits.
The information contained in Item 7 to the Schedule is hereby
amended to read in its entirety as follows:
Exhibit A: Agreement of Joint Filing of Schedule 13D, dated as of
April 6, 2001.
Exhibit B: Securities Purchase Agreement between Mr. Drapkin and
the Issuer, dated as of January 31, 2000.
Exhibit C: 6% Convertible Debenture due January 31, 2002 of the
Issuer in the principal amount of $500,000 issued to Mr.
Drapkin, dated as of January 31, 2000.
Exhibit D: Common Stock Purchase Warrant to purchase 347,826 shares
of Common Stock issued to Mr. Drapkin, dated as of
January 31, 2000.
Exhibit E: Common Stock Purchase Warrant to purchase 210,000 shares
of Common Stock issued to Mr. Cerrone, dated as of
January 31, 2000.
Exhibit F: Common Stock Purchase Warrant to purchase 303,200 shares
of Common Stock, issued to Panetta, dated as of November
10, 2000.
Exhibit G: Cancelled Common Stock Purchase Warrant to purchase
303,200 shares of Common Stock, issued to Mr. Cerrone,
dated as of May 1, 2000.
Exhibit H: Registration Rights Agreement between the Issuer and Mr.
Drapkin dated as of January 31, 2000.
Exhibit I: Letter Agreement, dated as of March 30, 2001, among Mr.
Drapkin, the Issuer, Mr. Cerrone, Mr. Constance, Dr.
Rose, Judson A. Cooper and Joshua D. Schein, Ph.D.
Exhibit J: Lock-Up Agreement between Mr. Drapkin and Vincent
Fischetti.
Exhibit K: Form of Common Stock and Warrant Purchase Agreements
between the Issuer and each Buyer (as defined therein),
dated as of May 8, 2001.
Exhibit L: Form of Common Stock Purchase Warrants to purchase
shares of Common Stock issued to each Buyer, dated as of
May 8, 2001.
Exhibit M: Form of Registration Rights Agreements between the
Issuer and each Buyer, dated as of May 8, 2001.
Exhibit N: Form of Conversion Agreement among the Issuer and
holders of Debentures
Exhibit O: Form of Certificate of Designation of Series A
Convertible Preferred Stock of the Issuer
(Page 9 of 10 Pages)
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of each of
the undersigned, each of the undersigned certifies that the information set
forth in this statement with respect to such undersigned is true, complete and
correct.
Dated: June 1, 2001
------------------------------
Donald G. Drapkin
DRAPKIN FAMILY CHARITY FOUNDATION
Dated: June 1, 2001 By
--_------------------------
Name: Donald G. Drapkin
Title: Trustee
Dated: June 1, 2001
------------------------------
Gabriel M. Cerrone
PANETTA PARTNERS LTD.
Dated: June 1, 2001 By
----------------------------
Name: Gabriel M. Cerrone
Title: General Partner
Dated: June 1, 2001
------------------------------
Thomas E. Constance
Dated: June 1, 2001 By
------------------------------------
Name: Eric A. Rose, M.D.
Title: Interim Chief Executive Officer
(Page 10 of 10 Pages)
EXHIBIT K
FORM OF
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
COMMON STOCK AND WARRANT PURCHASE AGREEMENT, dated as of May 8, 2001
(this "Agreement"), by and between SIGA TECHNOLOGIES, INC., a Delaware
corporation, having its principal place of business located at 420 Lexington
Avenue, Suite 620, New York, NY 10170 (the "Company"), each entity named on a
signature page hereto (each, a "Buyer") (each agreement with a Buyer being
deemed a separate and independent agreement between the Company and such Buyer,
except that each Buyer acknowledges and consents to the rights granted to each
other Buyer under such agreement and the Transaction Agreements, as defined
below, referred to therein).
W I T N E S S E T H
WHEREAS, the Company wishes to sell to the Buyer, and the Buyer is
willing to buy from the Company, subject to the terms and conditions set forth
herein, the number of shares of Common Stock, par value $.0001 per share (the
"Common Stock"), of the Company, determined as provided herein, based on the
Purchase Price specified on the Buyer's signature page (the "Purchase Price"),
out of the Total Purchase Price (as defined below); and
WHEREAS, in connection with the purchase of such shares of Common
Stock, the Company will issue to the Buyer warrants to purchase additional
shares of Common Stock, as contemplated by the terms of this Agreement (the
"Warrants");
NOW, THEREFORE, for and in consideration of the premises and the
mutual agreement contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. PURCHASE AND SALE; MUTUAL DELIVERIES.
(a) Upon the following terms and conditions, the Company shall
issue and sell to the Buyer and the Buyer shall purchase from the Company that
number of shares of Common Stock equal to (i) the Purchase Price divided by (ii)
the Per Share Price. Such shares (the "Purchased Shares") shall be issued to the
Buyer on the Closing Date against receipt of the Purchase Price. The shares
shall be evidenced by one or more certificates representing such Purchased
Shares issued in the name of the Buyer, bearing substantially the following
legend:
THE SECURITIES REPRESENTED HEREBY (THE "SECURITIES") HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL
OR OTHER EVIDENCE ACCEPTABLE TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
(b) As used herein, each of the following terms has the meaning
set forth below, unless the context otherwise requires:
(i) "Affiliate" means, with respect to a specific Person
referred to in the relevant provision, another Person who or which controls or
is controlled by or is under common control with such specified Person.
(ii) "Certificates" means the certificates representing the
Purchased Shares and the Warrants, each duly executed by the Company and issued
on the Closing Date in the name of the Buyer.
(iii) "Closing Bid Price" means the closing bid price during
regular trading hours of the Common Stock (in U.S. Dollars) on the Principal
Trading Market, as reported by the Reporting Service.
(iv) "Closing Date" means the date of the closing of the
purchase and sale of the Purchased Shares, as provided herein.
(v) "Escrow Agent" means the escrow agent identified in the
Joint Escrow Instructions attached hereto as Annex II (the "Joint Escrow
Instructions").
(vi) "Escrow Funds" means the Purchase Price delivered to the
Escrow Agent as contemplated by Section 1(c) hereof.
(vii) "Escrow Property" means the Escrow Funds and the
Certificates delivered to the Escrow Agent as contemplated by Section 1(c)
hereof.
(viii) "Per Share Price" means 80% of the average Closing Bid
Price for the thirty (30) trading days ending on the trading day immediately
before the Closing Date.
(ix) "Person" means any living person or any entity, such as,
but not necessarily limited to, a corporation, partnership or trust.
(x) "Principal Trading Market" means The Nasdaq SmallCap
Market.
(xi) "Registrable Shares" means the aggregate of (A) the
Purchased Shares and (B) the Warrant Shares then held by the Buyer or then
subject to issuance upon exercise of any outstanding Warrant.
(xii) "Registration Rights Agreement" means the Registration
Rights Agreement between the Company and the Buyer, substantially in the form of
Annex III attached hereto, being executed simultaneously herewith.
2
(xiii) "Reporting Service" means Bloomberg LP or if that
service is not then reporting the relevant information regarding the Common
Stock, a comparable reporting service of national reputation selected by the
Buyers subscribing for a majority of the Total Purchase Price and reasonably
acceptable to the Company.
(xiv) "Securities" means the Purchased Shares, the Warrants
and the Warrant Shares.
(xv) "Total Purchase Price" means the aggregate Purchase
Prices for all Buyers, which shall not be less than $300,000 and not more than
$850,000.
(xvi) "Transaction Agreements" means this Agreement, the
Joint Escrow Instructions, the Registration Rights Agreement and the Warrants
and includes all ancillary documents referred to in those agreements.
(xvii) "Warrant Shares" means the shares of Common Stock
issuable upon exercise of the Warrant, where the number of such shares is equal
to the number of Purchased Shares
(c) The following provisions shall apply to the payment of the
Purchase Price and the delivery of the Certificates.
(i) The Buyer shall pay the Purchase Price for the Purchased
Shares by delivering immediately available good funds in United States Dollars
to the Escrow Agent no later than the date prior to the Closing Date. Payment
into escrow of the Purchase Price shall be made by wire transfer of funds to:
Bank of New York
350 Fifth Avenue
New York, New York 10001
ABA# 021000018
For credit to the account of Krieger & Prager LLP
Account No.: [To be provided to the Buyer by Krieger & Prager
LLP]
Re: Siga 2001 Transaction
(ii) On the Closing Date, the Company shall deliver the
Certificates, each duly executed on behalf of the Company and issued in the name
of the Buyer, to the Escrow Agent.
(iii) By signing this Agreement, each of the Buyer and the
Company, subject to acceptance by the Escrow Agent, agrees to all of the terms
and conditions of, and becomes a party to, the Joint Escrow Instructions, all of
the provisions of which are incorporated herein by this reference as if set
forth in full.
3
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Buyer that, except as provided in Annex IV
attached hereto:
(a) The Company has the corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. The execution and
delivery by the Company of this Agreement and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitute the valid and binding
obligation of the Company enforceable against it in accordance with its terms,
subject to the effects of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and to general
equitable principles.
(b) There are no preemptive rights of any shareholder of the
Company, as such, to acquire the Purchased Shares or the Warrants. No party has
a currently exercisable right of first refusal which would be applicable to any
or all of the transactions contemplated by the Transaction Agreements.
(c) Except as set forth in the SEC Documents (as hereinafter
defined), there is no pending, or to the knowledge of the Company, threatened,
judicial, administrative or arbitral action, claim, suit, proceeding or
investigation which might affect the validity or enforceability of this
Agreement or which involves the Company and which if adversely determined, could
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(d) No consent or approval of, or exemption by, or filing with,
any party or governmental or public body or authority is required in connection
with the execution, delivery and performance under this Agreement or any of the
other Transaction Agreements or the taking of any action contemplated hereunder
or thereunder, except such authorizations, approvals and consents that have been
obtained.
(e) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation.
(f) The execution, delivery and performance of this Agreement and
each of the other Transaction Agreements by the Company, the issuance of the
Securities, and the consummation of the transactions contemplated hereby and by
the other Transaction Agreements, will not (i) violate any provision of the
Company's articles of incorporation or bylaws, each as currently in effect, (ii)
violate, conflict with or result in the breach of any of the terms of, or give
any other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both constitute) a default under, any material
contract or other agreement to which the Company is a party or by or to which
the Company or any of the Company's assets or properties may be bound or
subject, (iii) violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body by which the Company, or
the assets
4
or properties of the Company are bound, (iv) to the Company's knowledge, violate
any statute, law or regulation applicable to the Company's business.
(g) Each of the other Transaction Agreements, and the
transactions contemplated thereby, have been duly and validly authorized by the
Company, and the Warrants and each of the other Transaction Agreements (assuming
due execution, to the extent relevant, by the other party or parties thereto),
when executed and delivered by the Company, will be, valid and binding
agreements of the Company enforceable in accordance with their respective terms,
subject as to enforceability to general principles of equity and to bankruptcy,
insolvency, moratorium, and other similar laws affecting the enforcement of
creditors' rights generally.
(h) None of the SEC Documents contained, at the time they were
filed, any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements made
therein in light of the circumstances under which they were made, not
misleading. Since March 1, 2000, the Company has timely filed all requisite
forms, reports and exhibits thereto required to be filed by the Company with the
SEC.
(i) Since December 31, 2000 (the "Last Audited Date"), there has
been no material adverse change and no material adverse effect on the business,
operations, financial condition or results of operations of the Company and its
subsidiaries taken as a whole, except as disclosed in the SEC Documents. Since
the Last Audited Date, except as provided in the Company's SEC Documents, the
Company has not (i) incurred or become subject to any material liabilities
(absolute or contingent) except liabilities incurred in the ordinary course of
business consistent with past practices; (ii) discharged or satisfied any
material lien or encumbrance or paid any material obligation or liability
(absolute or contingent), other than current liabilities paid in the ordinary
course of business consistent with past practices; (iii) declared or made any
payment or distribution of cash or other property to shareholders with respect
to its capital stock, or purchased or redeemed, or made any agreements to
purchase or redeem, any shares of its capital stock; (iv) sold, assigned or
transferred any other tangible assets, or canceled any debts or claims, except
in the ordinary course of business consistent with past practices; (v) suffered
any substantial losses or waived any rights of material value, whether or not in
the ordinary course of business, or suffered the loss of any material amount of
existing business; (vi) made any changes in employee compensation, except in the
ordinary course of business consistent with past practices; or (vii) experienced
any material problems with labor or management in connection with the terms and
conditions of their employment.
(j) There is no fact known to the Company (other than general
economic conditions known to the public generally or as disclosed in the SEC
Documents) that has not been disclosed in writing to the Buyer (which disclosure
may have been made subject to the Buyer's execution of a written confidentiality
agreement) that (i) would reasonably be expected to have a material adverse
effect on the business, operations, financial condition or results of operations
of the Company and its subsidiaries taken as a whole, (ii) would reasonably be
expected to materially and adversely affect the ability of the Company to
perform its obligations pursuant to any of the Transaction Agreements, or (iii)
would reasonably be expected to materially and adversely affect the value of the
rights granted to the Buyer in the Transaction Agreements.
5
(k) There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board or body pending or, to the
knowledge of the Company, threatened against or affecting the Company, wherein
an unfavorable decision, ruling or finding would have a material adverse effect
on the business, operations, financial condition or results of operations of the
Company and its subsidiaries taken as a whole or the transactions contemplated
by any of the Transaction Agreements or which would adversely affect the
validity or enforceability of, or the authority or ability of the Company to
perform its obligations under, any of the Transaction Agreements.
(l) Except as set forth in Section 2(f), no Event of Default (or
its equivalent term), as defined in the respective agreement to which the
Company is a party, and no event which, with the giving of notice or the passage
of time or both, would become an Event of Default (or its equivalent term) (as
so defined in such agreement), has occurred and is continuing, which would have
a material adverse effect on the business, operations, financial condition or
results of operations of the Company and its subsidiaries taken as a whole.
(m) The Company has no liabilities or obligations other than
those disclosed in the Transaction Agreements or the SEC Documents or those
incurred in the ordinary course of the Company's business since the Last Audited
Date, or which individually or in the aggregate, do not or would not have a
material adverse effect on the business, operations, financial condition or
results of operations of the Company and its subsidiaries taken as a whole. No
event or circumstances has occurred or exists with respect to the Company or its
properties, business, operations, condition (financial or otherwise), or results
of operations, which, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly announced or disclosed. There are no proposals currently
under consideration or currently anticipated to be under consideration by the
Board of Directors or the executive officers of the Company which proposal would
(x) change the certificate of incorporation or other charter document or by-laws
of the Company, each as currently in effect, with or without shareholder
approval, which change would reduce or otherwise adversely affect the rights and
powers of the shareholders of the Common Stock or (y) materially or
substantially change the business, assets or capital of the Company, including
its interests in subsidiaries.
3. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer hereby
represents and warrants to the Company that:
(a) If not an individual, (i) the Buyer has the corporate power
and authority to enter into this Agreement and to perform its obligations
hereunder, and (ii) the execution and delivery by the Buyer of this Agreement,
and the consummation by the Buyer of the transactions contemplated hereby, have
been duly authorized by all necessary corporate action on the part of the Buyer.
This Agreement has been duly executed and delivered by the Buyer and constitutes
the valid and binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms, subject to the effects of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and to general equitable principles.
6
(b) The execution, delivery and performance by the Buyer of this
Agreement, and the consummation of the transactions contemplated hereby, do not
and will not breach or constitute a default under any applicable law or
regulation or of any agreement, judgment, order, decree or other instrument
binding on the Buyer.
(c) The Buyer has such knowledge and prior substantial investment
experience in financial and business matters, including investment in non-listed
and non-registered securities, and, either has read the SEC Documents and
evaluated the merits and risks of investment in the Company and the Securities,
or has had the opportunity to engage the services of an investment advisor,
attorney or accountant to read such SEC Documents and to evaluate such merits
and risks.
(d) The Buyer is an "accredited investor" as that term is defined
in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as
amended (the "Securities Act").
(e) The Buyer and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Purchased Shares which have
been requested by the Buyer, including those set forth on Annex IV hereto. The
Buyer and its advisors, if any, have been afforded the opportunity to ask
questions of the Company and have received complete and satisfactory answers to
any such inquiries. Without limiting the generality of the foregoing, the Buyer
has also had the opportunity to obtain and to review the SEC Documents,
including, but not limited to, (1) Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2000, (2) Schedule SC 14f-1 Statement of Change in
Control filed April 9, 2001, and Registration Statement on Form S-8, as filed on
February 26, 2001.
(f) The Buyer is acquiring the Purchased Shares, the Warrants and
the Warrant Shares solely for the Buyer's own account for investment and not
with a view to or for sale in connection with a distribution of any of the
Securities.
(g) The Buyer does not have a present intention to sell the
Securities, nor a present arrangement or intention to effect any distribution of
any of the Securities to or through any person or entity for purposes of
selling, offering, distributing or otherwise disposing of any of the Securities.
(h) The Buyer may be required to bear the economic risk of the
investment indefinitely because none of the Securities may be sold, hypothecated
or otherwise disposed of unless subsequently registered under the Securities Act
and applicable state securities laws or an exemption from registration is
available. Any resale of any of the Securities can be made only pursuant to (i)
a registration statement under the Securities Act which is effective and current
at the time of sale or (ii) a specific exemption from the registration
requirements of the Securities Act. In claiming any such exemption, the Buyer
will, prior to any offer or sale or distribution of any Securities advise the
Company and, if requested, provide the Company with a favorable written opinion
of counsel, in form and substance satisfactory to
7
counsel to the Company, as to the applicability of such exemption to the
proposed sale or distribution.
(i) The Buyer understands that the exemption afforded by Rule 144
promulgated by the Securities and Exchange Commission under the Securities Act
("Rule 144") will not become available for at least one year from the date of
payment for the Securities and any sales in reliance on Rule 144, if then
available, can be made only in accordance with the terms and conditions of that
rule, including, among other things, a requirement that the Company then be
subject to, and current, in its periodic filing requirements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, among
other things, a limitation on the amount of shares of Common Stock that may be
sold in specified time periods and the manner in which the sale can be made;
that, while the Company's Common Stock is registered under the Exchange Act and
the Company is presently subject to the periodic reporting requirements of the
Exchange Act, there can be no assurance that the Company will remain subject to
such reporting obligations or current in its filing obligations; and that, in
case Rule 144 is not applicable to a disposition of the Securities, compliance
with the registration provisions of the Securities Act or some other exemption
from such registration provisions will be required.
(j) The Buyer understands that legends shall be placed on the
certificates evidencing the Securities to the effect that the Securities have
not been registered under the Securities Act or applicable state securities laws
and appropriate notations thereof will be made in the Company's stock books.
Stop transfer instructions will be placed with the transfer agent of the
securities constituting the Common Stock.
4. COVENANTS OF THE COMPANY. The Company hereby further represents
to or covenants and agrees with the Buyer as follows:
(a) The Company has furnished or made available to the Buyer true
and correct copies of all registration statements, reports and documents,
including proxy statements (other than preliminary proxy statements), filed with
the Securities and Exchange Commission (the "SEC") by or with respect to the
Company since December 31, 1999 and prior to the date of this Agreement,
pursuant to the Securities Act or the Exchange Act (collectively, the "SEC
Documents"). The SEC Documents are the only filings made by the Company since
December 31, 1999 pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act or pursuant to the Securities Act. The Company has filed all
reports, schedules, forms, statements and other documents required to be filed
by it under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act since
January 1, 1999 and prior to the date of this Agreement. The Company meets the
"Registrant Requirement" for eligibility to use Form S-3 under the Securities
Act in order to register the Company's Common Stock for resales.
(b) The Company has not provided to the Buyer any information
which according to applicable law, rule or regulation, should have been
disclosed publicly prior to the date hereof by the Company but which has not
been so disclosed. As of their respective dates, the SEC Documents complied, and
all similar documents filed with the SEC prior to the Closing Date will comply,
in all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and rules and regulations of the SEC
promulgated
8
thereunder and other federal, state and local laws, rules and regulations
applicable to such SEC Documents, and no document similar to the SEC Documents
filed by the Company with the SEC prior to the Closing Date will contain, any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Documents, as of the
dates thereof, complied, and all similar documents filed with the SEC prior to
the Closing Date will comply, as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC and other applicable rules and regulations with respect thereto. Such
financial statements were prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements as
permitted by Form 10-Q of the SEC) and fairly present in all material respects
the financial position of the Company and its consolidated subsidiaries as of
the dates thereof and the consolidated results of operations and cash flows for
the periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
(c) The Company will issue to the Buyer on the Closing Date,
transferable divisible Warrants to purchase up to the number of shares of Common
Stock equal to the Purchased Shares. Such Warrants shall bear an exercise price
per share of Common Stock equal to 110% of the average Closing Bid Prices of a
share of Common Stock for the five (5) trading days ending on the trading day
immediately preceding the Closing Date. The Warrants shall be exercisable
immediately upon issuance and thereafter until the last day of the month in
which the seventh anniversary of the Closing Date occurs and shall otherwise be
substantially in the form attached hereto as Annex I.
(d) (i) The Company shall enter into the Registration Rights
Agreement with the Buyer.
(ii) Except for periods during which the Registration
Statement contemplated by the Registration Rights Agreement is effective or
subject to a Permitted Suspension Period (as defined in the Registration Rights
Agreement), during the period from the Closing Date through the date when all
Purchased Shares have been sold and either the Warrants have expired or all of
the Warrants have been exercised and all of the Warrant Shares have been sold,
the Buyer shall have piggy-back registration rights with respect to the
Registrable Shares, subject to the conditions set forth below. If at any time
during that period, the Company participates (whether voluntarily or by reason
of an obligation to a third party) in the registration of any shares of the
Company's stock (other than a registration on Form S-4 or Form S-8), the Company
shall give written notice thereof to the Buyer and the Buyer shall have the
right, exercisable within ten (10) business days after receipt of such notice,
to demand inclusion of all or a portion of the Buyer's Registrable Shares in
such registration statement. If the Buyer exercises such election, the
Registrable Shares so designated shall be included in the registration statement
at no cost or expense to the Buyer (other than any commissions payable to the
broker effecting the sale, which would be borne by the Buyer). If, in connection
with any underwritten offering for the account of the Company the managing
underwriter or underwriters thereof
9
(collectively, the "Underwriter") shall impose a limitation on the number of
shares of Common Stock which may be included in the registration statement
because, in the Underwriter's judgement, such limitation is necessary to effect
an orderly public distribution of securities covered thereby, then the Company
shall be obligated to include in such registration only such limited portion of
the Registrable Shares for which such Buyer has requested inclusion hereunder as
the Underwriter shall permit. Any exclusion of Registrable Shares shall be made
pro rata among the Buyers seeking to include Registrable Shares, in proportion
to the number of Registrable Shares sought to be included by such holders;
provided, however, that the Company shall not exclude any Registrable Shares
unless the Company has first excluded all outstanding securities the holders of
which are not entitled by right to inclusion of securities in such registration
statement; and provided further, however, that, after giving effect to the
immediately preceding proviso, any exclusion of Registrable Shares shall be made
pro rata with holders of other securities having the right to include such
securities in such registration statement. The Buyer's piggy-back registration
rights under this Section 4(d) shall expire at such time as the Buyer can sell
all of the Registrable Shares under Rule 144 without volume or other
restrictions or limit.
(e) If (i) the Buyer, other than by reason of its gross
negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by any stockholder of the Company,
in connection with or as a result of the consummation of the transactions
contemplated by this Agreement, or if such Buyer impleaded in any such action,
proceeding or investigation by any Person, or (ii) the Buyer, other than by
reason of its gross negligence or willful misconduct or by reason of its trading
of the Common Stock in a manner that is illegal under the federal securities
laws or other actions, becomes involved in any capacity in any action,
proceeding or investigation brought by the Commission against or involving the
Company or in connection with or as a result of the consummation of the
transactions contemplated by this Agreement, or if the Buyer is impleaded in any
such action, proceeding or investigation by any Person, then in any such case,
the Company will reimburse the Buyer for its reasonable legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith, as such expenses are incurred. In addition, other than with respect
to any such matter in which the Buyer is a named party, the Company will pay the
Buyer the charges, as reasonably determined by the Buyer, for the time of any
officers or employees of the Buyer, if any, devoted to appearing and preparing
to appear as witnesses, assisting in preparation for hearings, trials or
pretrial matters, or otherwise with respect to inquiries, hearing, trials, and
other proceedings relating to the subject matter of this Agreement. The
reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliates of the Buyers who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Buyers and any such Affiliate, and shall be binding upon and inure to
the benefit of any successors, assigns, heirs and personal representatives of
the Company, the Buyers and any such Affiliate and any such Person. The Company
also agrees that neither the Buyer nor any such Affiliate, partners, directors,
agents, employees or controlling persons shall have any liability to the Company
or any person asserting claims on behalf of or in right of the Company in
connection with or as a result of the consummation of the Transaction Agreements
except to
10
the extent that any losses, claims, damages, liabilities or expenses incurred by
the Company result from the gross negligence or willful misconduct of the Buyer
or any such Affiliate.
5. CLOSING DATE.
(a) The Closing Date shall occur on the date which is the first
NYSE trading day after each of the conditions contemplated by Sections 6 and 7
hereof shall have either been satisfied or been waived by the party in whose
favor such conditions run.
(b) The closing of the purchase and issuance of Purchased Shares
shall occur on the Closing Date at the offices of the Escrow Agent and shall
take place no later than 3:00 P.M., New York time, on such day or such other
time as is mutually agreed upon by the Company and the Buyer.
(c) Notwithstanding anything to the contrary contained herein,
the Escrow Agent will be authorized to release the Escrow Funds to the Company
and to others and to release the other Escrow Property on the relevant Closing
Date upon satisfaction of the conditions set forth in Sections 6 and 7 hereof
and as provided in the Joint Escrow Instructions.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The Buyer
understands that the Company's obligation to sell the Securities to the Buyer
pursuant to this Agreement on the Closing Date is conditioned upon:
(a) Delivery by the Buyer to the Escrow Agent of good funds as
payment in full of an amount equal to the Purchase Price for the Purchased
Shares in accordance with this Agreement;
(b) The accuracy on such Closing Date of the representations and
warranties of the Buyer contained in this Agreement, each as if made on such
date, and the performance by the Buyer on or before such date of all covenants
and agreements of the Buyer required to be performed on or before such date; and
(c) There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE. The Company
understands that the Buyer's obligation to purchase the Securities on the
Closing Date is conditioned upon:
(a) The execution and delivery of this Agreement and the other
Transaction Agreements by the Company;
(b) Delivery by the Company to the Escrow Agent of the
Certificates in accordance with this Agreement;
11
(c) The accuracy in all material respects on such Closing Date of
the representations and warranties of the Company contained in this Agreement,
each as if made on such date, and the performance by the Company on or before
such date of all covenants and agreements of the Company required to be
performed on or before such date;
(d) There shall not be in effect any law, rule or regulation
prohibiting or restricting the transactions contemplated hereby, or requiring
any consent or approval which shall not have been obtained; and
(e) From and after the date hereof to and including such Closing
Date, trading in securities generally on the New York Stock Exchange shall not
have been suspended or limited, nor shall there be any major outbreak or
escalation of hostilities involving the United States that in either case in the
reasonable judgment of the Buyer makes it impracticable to purchase the
Securities.
8. NOTICES. Any notice required or permitted hereunder shall be
given in writing (unless otherwise specified herein) and shall be deemed
effectively given on the earliest of
(a) the date delivered, if delivered by personal delivery as
against written receipt therefor or by confirmed facsimile transmission,
(b) the seventh business day after deposit, postage prepaid, in
the United States Postal Service by registered or certified mail, or
(c) the third business day after mailing by domestic or
international express courier, with delivery costs and fees prepaid,
in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) days' advance written notice similarly given to each of the other
parties hereto):
COMPANY: SIGA TECHNOLOGIES, INC.
420 Lexington Avenue, Suite 620
New York, NY 10170
ATTN: President
Telephone No.: (212) 672-9100
Facsimile No.: (212)
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
ATTN: Jeffrey Fessler, Esq.
Telephone No.: (212) 872-1000
Facsimile No.: (212) 872-1002
12
BUYER: At the address set forth on the signature page of this
Agreement.
with a copy to:
Krieger & Prager, LLP
39 Broadway, Suite 1440
New York, New York 10006
ATTN: Ronald Nussbaum, Esq.
Telephone No.: (212) 363-2900
Facsimile No.: (212) 363-2999
ESCROW AGENT: Krieger & Prager LLP
39 Broadway
Suite 1440
New York, NY 10006
Attn: Samuel Krieger, Esq.
New York, New York 10016
Telephone No.: (212) 363-2900
Telecopier No. (212) 363-2999
9. GOVERNING LAW: MISCELLANEOUS.
(a) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the exclusive
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions. To the extent determined by such court, the
Company shall reimburse the Buyer for any reasonable legal fees and
disbursements incurred by the Buyer in enforcement of or protection of any of
its rights under any of the Transaction Agreements.
(b) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(c) This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties hereto.
(d) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
13
(e) A facsimile transmission of this signed Agreement shall be
legal and binding on all parties hereto.
(f) This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original.
(g) The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
(h) If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
(i) This Agreement may be amended only by an instrument in
writing signed by the party to be charged with enforcement thereof.
(j) This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The Company's and
the Buyer's representations and warranties herein shall survive the execution
and delivery of this Agreement and the delivery of the Certificates and the
payment of the Purchase Price, and shall inure to the benefit of the Buyer and
the Company and their respective successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
14
IN WITNESS WHEREOF, this Agreement has been duly executed by the
Buyer (if an entity, by one of its officers thereunto duly authorized) as of the
date set forth below.
PURCHASE PRICE OF BUYER: $
- ------------------------------
Address (Printed Name of Buyer)
- ------------------------------
By:_________________Telecopier No. _________
------------------------------------
Printed Name and Title
Jurisdiction of Incorporation
or Organization
As of the date set forth below, the undersigned hereby accepts this Agreement
and represents that the foregoing statements are true and correct and that it
has caused this Securities Agreement to be duly executed on its behalf.
SIGA TECHNOLOGIES, INC.
By: __________________________
Title:________________________
Date:________________, 2001
15
EXHIBIT L
FORM OF WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
SIGA TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
1. Issuance; Certain Definitions. In consideration of good and valuable
consideration, the receipt of which is hereby acknowledged by SIGA TECHNOLOGIES,
INC., a Delaware corporation (the "Company"), or registered assigns (the
"Holder") is hereby granted the right to purchase at any time until 5:00 P.M.,
New York City time, on _________________, 20081 (the "Expiration Date"),
Thousand ( )2 fully paid and nonassessable shares of the Company's Common Stock,
$.0001 par value per share (the "Common Stock"), at an initial exercise price
per share (the "Exercise Price") of $ 3 per share, subject to further adjustment
as set forth herein. This Warrant is being issued pursuant to the terms of that
certain Common Stock And Warrant Purchase Agreement, dated as of , 2001 (the
"Agreement"), to which the Company and Holder (or Holder's predecessor in
interest) are parties. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Agreement.
2. Exercise of Warrants.
2.1 General. This Warrant is exercisable in whole or in part at any
time and from time to time. Such exercise shall be effectuated by submitting to
the Company (either by delivery to the Company or by facsimile transmission as
provided in Section 8 hereof) a completed and duly executed Notice of Exercise
(substantially in the form attached to this Warrant Certificate) as provided in
this paragraph. The date such Notice of Exercise is faxed to the Company shall
be the "Exercise Date," provided that, if this Warrant has been fully exercised,
the Holder of this Warrant tenders this Warrant Certificate to the Company
within five (5) business days thereafter. The Notice of Exercise shall be
executed by the Holder of this Warrant and shall indicate the number of shares
then being purchased pursuant to such exercise.
- -----------------
1 Insert date which is last day of month in which seventh anniversary of Closing
Date occurs.
2 Insert number equal toBuyer's Purchased Shares.
3 Insert amount equal to 110% of the average Closing Bid Price of the Common
Stock for the 5 trading days ending on the trading day immediately preceding the
Closing Date.
1
Upon surrender of this Warrant Certificate, if relevant, with, together with
appropriate payment of the Exercise Price for the shares of Common Stock
purchased, the Holder shall be entitled to receive a certificate or certificates
for the shares of Common Stock so purchased. The Exercise Price per share of
Common Stock for the shares then being exercised shall be payable in cash or by
certified or official bank check or wire transfer. The Holder shall be deemed to
be the holder of the shares issuable to it in accordance with the provisions of
this Section 2.1 on the Exercise Date.
2.2 Limitation on Exercise. Notwithstanding the provisions of this
Warrant, the Agreement or of the other Transaction Agreements, in no event
(except (i) as specifically provided in this Warrant as an exception to this
provision, (ii) while there is outstanding a tender offer for any or all of the
shares of the Company's Common Stock, or (iii) at the Holder's option, on at
least sixty-five (65) days' advance written notice from the Holder) shall the
Holder be entitled to exercise this Warrant, or shall the Company have the
obligation to issue shares upon such exercise of all or any portion of this
Warrant, to the extent that, after such exercise the sum of (1) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates
(other than shares of Common Stock which may be deemed beneficially owned
through the ownership of the unexercised portion of the Warrants), and (2) the
number of shares of Common Stock issuable upon the exercise of the Warrants with
respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 9.99% of
the outstanding shares of Common Stock (after taking into account the shares to
be issued to the Holder upon such exercise). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), except as otherwise provided in clause (1) of such sentence.
The Holder, by its acceptance of this Warrant, further agrees that if the Holder
transfers or assigns any of the Warrants to a party who or which would not be
considered such an affiliate, such assignment shall be made subject to the
transferee's or assignee's specific agreement to be bound by the provisions of
this Section 2.2 as if such transferee or assignee were the original Holder
hereof.
3. Reservation of Shares. The Company hereby agrees that at all times
during the term of this Warrant there shall be reserved for issuance upon
exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance upon exercise of this Warrant (the "Warrant Shares").
4. Mutilation or Loss of Warrant. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in the case of loss, theft or destruction) receipt of
reasonably satisfactory indemnification, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor and date and any such lost, stolen, destroyed or
mutilated Warrant shall thereupon become void.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.
2
6. Protection Against Dilution and Other Adjustments.
6.1 Adjustment Mechanism. If an adjustment of the Exercise Price is
required pursuant to this Section 6, the Holder shall be entitled to purchase
such number of additional shares of Common Stock as will cause (i) the total
number of shares of Common Stock Holder is entitled to purchase pursuant to this
Warrant, multiplied by (ii) the adjusted Exercise Price per share, to equal
(iii) the dollar amount of the total number of shares of Common Stock Holder is
entitled to purchase before adjustment multiplied by the total Exercise Price
before adjustment.
6.2 Capital Adjustments. In case of any stock split or reverse stock
split, stock dividend, reclassification of the Common Stock, recapitalization,
merger or consolidation, or like capital adjustment affecting the Common Stock
of the Company, the provisions of this Section 6 shall be applied as if such
capital adjustment event had occurred immediately prior to the date of this
Warrant and the original Exercise Price had been fairly allocated to the stock
resulting from such capital adjustment; and in other respects the provisions of
this Section shall be applied in a fair, equitable and reasonable manner so as
to give effect, as nearly as may be, to the purposes hereof. A rights offering
to stockholders shall be deemed a stock dividend to the extent of the bargain
purchase element of the rights.
6.3 Adjustment for Spin Off. If, for any reason, prior to the
exercise of this Warrant in full, the Company spins off or otherwise divests
itself of a part of its business or operations or disposes all or of a part of
its assets in a transaction (the "Spin Off") in which the Company does not
receive compensation for such business, operations or assets, but causes
securities of another entity (the "Spin Off Securities") to be issued to
security holders of the Company, then
(a) the Company shall cause (i) to be reserved Spin Off Securities
equal to the number thereof which would have been issued to the Holder had
all of the Holder's unexercised Warrants outstanding on the record date
(the "Record Date") for determining the amount and number of Spin Off
Securities to be issued to security holders of the Company (the
"Outstanding Warrants") been exercised as of the close of business on the
trading day immediately before the Record Date (the "Reserved Spin Off
Shares"), and (ii) to be issued to the Holder on the exercise of all or
any of the Outstanding Warrants, such amount of the Reserved Spin Off
Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a
fraction, of which (I) the numerator is the amount of the Outstanding
3
Warrants then being exercised, and (II) the denominator is the amount of
the Outstanding Warrants; and
(b) the Exercise Price on the Outstanding Warrants shall be adjusted
immediately after consummation of the Spin Off by multiplying the Exercise
Price by a fraction (if, but only if, such fraction is less than 1.0), the
numerator of which is the average Closing Bid Price of the Common Stock
for the five (5) trading days immediately following the fifth trading day
after the Record Date, and the denominator of which is the average Closing
Bid Price of the Common Stock on the five (5) trading days immediately
preceding the Record Date; and such adjusted Exercise Price shall be
deemed to be the Exercise Price with respect to the Outstanding Warrants
after the Record Date.
7. Transfer to Comply with the Securities Act; Registration Rights.
7.1 Transfer. This Warrant has not been registered under the
Securities Act of 1933, as amended, (the "Act") and has been issued to the
Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Act relating to such security or an opinion of
counsel satisfactory to the Company that registration is not required under the
Act. Each certificate for the Warrant, the Warrant Shares and any other security
issued or issuable upon exercise of this Warrant shall contain a legend on the
face thereof, in form and substance satisfactory to counsel for the Company,
setting forth the restrictions on transfer contained in this Section.
7.2 Registration Rights. (a) Reference is made to the Registration
Rights Agreement. The Company's obligations under the Registration Rights
Agreement and the other terms and conditions thereof with respect to the Warrant
Shares, including, but not necessarily limited to, the Company's commitment to
file a registration statement including the Warrant Shares, to have the
registration of the Warrant Shares completed and effective, and to maintain such
registration, are incorporated herein by reference.
(b) Reference is made to Section 4(d) of the Agreement regarding
piggy-back registration rights covering, among other things, the Warrant
Shares. The terms and conditions of said Section 4(d) are incorporated
herein by reference.
8. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage pre-paid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission,
or, if mailed, two days after the date of deposit in the United States mails, as
follows:
4
(i) if to the Company, to:
SIGA TECHNOLOGIES, INC.
420 Lexington Avenue, Suite 620 New York, NY 10170 ATTN:
Telephone No.: (212) 672-9100
Facsimile No.: (212)
with a copy to:
New York, New York 10174
ATTN: , Esq.
Telephone No.: (212)
Facsimile No.: (212)
(ii) if to the Holder, to:
Attn:
Telephone No.: ( ) -
Telecopier No.: ( ) -
with a copy to:
Krieger & Prager LLP, Esqs.
39 Broadway
Suite 1440
New York, NY 10006
Attn: Ronald Nussbaum, Esq.
Telephone No.: (212) 363-2900
Telecopier No. (212) 363-2999
Any party may be notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
9. Supplements and Amendments; Whole Agreement. This Warrant may be
amended or supplemented only by an instrument in writing signed by the parties
hereto. This Warrant contains the full understanding of the parties hereto with
respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.
10. Governing Law. This Warrant shall be deemed to be a contract made
under the laws of the State of New York for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the jurisdiction of the
federal courts whose districts encompass any part of the City of New York or the
state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Warrant and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
forum non conveniens,
5
to the bringing of any such proceeding in such jurisdictions. To the extent
determined by such court, the Company shall reimburse the Holder for any
reasonable legal fees and disbursements incurred by the Buyer in enforcement of
or protection of any of its rights under any of the Transaction Agreements.
11. Counterparts. This Warrant may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
12. Descriptive Headings. Descriptive headings of the several Sections
of this Warrant are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
the th day of , 2001.
SIGA TECHNOLOGIES, INC.
By:__________________________________
_____________________________________
(Print Name)
_____________________________________
(Title)
6
NOTICE OF EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant Certificate dated as of , , to purchase shares of the
Common Stock, $.0001 par value, of SIGA TECHNOLOGIES, INC. and tenders herewith
payment in accordance with Section 1 of said Common Stock Purchase Warrant.
It is the intention of the Holder to comply with the provisions of
Section 2.2 of the Warrant regarding certain limits on the Holder's right to
exercise thereunder. Based on the analysis on the attached Worksheet Schedule,
the Holder believe this exercise complies with the provisions of said Section
2.2. Nonetheless, to the extent that, pursuant to the exercise effected hereby,
the Holder would have more shares than permitted under said Section, this notice
should be amended and revised, ab initio, to refer to the exercise which would
result in the issuance of shares consistent with such provision. Any exercise
above such amount is hereby deemed void and revoked.
P lease deliver the stock certificate to:
Dated:
------------------------------------------
[Name of Holder]
By:
-----------------------------------------------
_ CASH: $
7
NOTICE OF EXERCISE OF WARRANT
WORKSHEET SCHEDULE
1. Current Common Stock holdings of Holder and Affiliates _____________
2. Shares to be issued on current exercise _____________
3. Other shares eligible to be acquired without restriction _____________
4. Total [sum of Lines 1 through 3] _____________
5. Outstanding shares of Common Stock _____________
6. Adjustments to Outstanding
a. Shares from Line 1 not included in Line 5 ____________
b. Shares to be issued per Line 2 ____________
c. Total Adjustments [Lines 6a and 6b] ____________
7. Total Adjusted Outstanding [Lines 5 plus 6c] ____________
8. Holder's Percentage [Line 4 divided by Line 7] ____________%
[Note: Line 8 not to be above 9.99%]
8
EXHIBIT M
FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of May 8, 2001 (this
"Agreement"), is made by and between SIGA TECHNOLOGIES, INC., a Delaware
corporation, having its principal place of business located at 420 Lexington
Avenue, Suite 620, New York, NY 10170 (the "Company"), and each entity named on
a signature page hereto (each, an "Initial Investor") (each agreement with an
Initial Investor being deemed a separate and independent agreement between the
Company and such Initial Investor, except that each Initial Investor
acknowledges and consents to the rights granted to each other Initial Investor
under such agreement).
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the
Securities Purchase Agreement, dated as of May 8, 2001, between the Initial
Investor and the Company (the "Securities Purchase Agreement"; terms not
otherwise defined herein shall have the meanings ascribed to them in the
Securities Purchase Agreement), the Company has agreed to issue and sell to the
Initial Investor shares of the Common Stock of the Company and the Warrants; and
WHEREAS, to induce the Initial Investor to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Registrable Securities;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Investor" means the Initial Investor and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof and who holds Registrable
Securities.
(b) "Potential Material Event" means any of the following: (i)
the possession by the Company of material information not ripe for disclosure in
a registration statement, which shall be evidenced by a determination in good
faith by the Board of Directors of the Company that
disclosure of such information in the registration statement would be
detrimental to the business and affairs of the Company or (ii) any material
engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time; in each case where such
determination shall be accompanied by a good faith determination by the Board of
Directors of the Company that the registration statement would be materially
misleading absent the inclusion of such information.
(c) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(d) "Registrable Securities" has the meaning ascribed to it in
the Agreement.
(e) "Registration Statement" means a registration statement of
the Company under the Securities Act covering Registrable Securities on Form
S-3, if the Company is then eligible to file using such form, and if not
eligible, on Form SB-2 or other appropriate form.
(f) "Required Effective Date" means the relevant Initial Required
Effective Date or Increased Required Effective Date (as those terms are defined
below).
(g) "Effective Date" means the date the SEC declares a
Registration Statement covering Registrable Securities and otherwise meeting the
conditions contemplated hereby to be effective.
(h) "Restricted Sale Date" means the first date, other than
during a Permitted Suspension Period (as defined below), on which the Investor
is restricted from making sales of Registrable Securities covered by any
previously effective Registration Statement.
2. Registration.
(a) Mandatory Registration. The Company shall prepare and file
with the SEC, as soon as possible after the Closing Date but no later than sixty
(60) days after the Closing Date (the "Required Filing Date"), either a
Registration Statement or an amendment to an existing Registration Statement, in
either event registering for resale by the Investor a sufficient number of
shares of Common Stock for the Initial Investors to sell the Registrable
Securities, but in no event less than the number of shares equal to the
Registrable Securities at the time of filing of such Registration Statement
(assuming for such purposes that all Warrants were exercisable and exercised as
of such date, whether or not such exercisability and issuance had in fact
occurred as of such date) (or such lesser number as may be required by the SEC).
The Registration Statement (W) shall include only the Registrable Securities,
and (X) shall also state that, in accordance with Rule 416 and 457 under the
Securities Act, it also covers such indeterminate number of additional shares of
Common Stock as may become issuable to prevent
2
dilution resulting from stock splits, or stock dividends. The Company will use
its reasonable best efforts to cause such Registration Statement to be declared
effective on a date (the "Initial Required Effective Date") which is no later
than the earlier of (Y) five (5) days after oral or written notice by the SEC
that it may be declared effective or (Z) one hundred eighty (180) days after the
Closing Date.
(b) Payments by the Company.
(i) If the Registration Statement covering the Registrable
Securities is not filed in accordance with the terms of this Agreement with the
SEC by the Required Filing Date, the Company will make payment to the Initial
Investor in such amounts and at such times as shall be determined pursuant to
this Section 2(b).
(ii) If the Registration Statement covering the Registrable
Securities is not effective by the relevant Required Effective Date or if there
is a Restricted Sale Date, then the Company will make payments to the Initial
Investor in such amounts and at such times as shall be determined pursuant to
this Section 2(b).
(iii) The amount (the "Periodic Amount") to be paid by the
Company to the Initial Investor shall be determined as of each Computation Date
(as defined below) and such amount shall be equal to one percent (1%) of the
Purchase Price for the period from the date following the relevant Required
Filing Date or the Required Effective Date or a Restricted Sale Date, as the
case may be, to the first relevant Computation Date, and thereafter to each
subsequent Computation Date, in each case prorated on a daily basis. Anything in
the preceding provisions of this paragraph (iii) to the contrary
notwithstanding, after the Effective Date the Purchase Price shall be deemed to
refer to the sum of the Purchase Price of (x) the Purchased Shares, less (y) the
number of shares previously sold by the Investor pursuant to the Registration
Statement. By way of illustration and not in limitation of the foregoing, if the
Registration Statement is filed on a timely basis but is not declared effective
until two hundred fifty-five (255) days after the Closing Date, the Periodic
Amount will aggregate two and one-half percent (2.5%) of the Purchase Price (1%
for days 181-210, plus 1% for days 211-240, plus 0.5% for days 241-255).
(iv) Upon demand therefor by the Investor, each Periodic
Amount will be payable by the Company, in cash or other immediately available
funds to the Investor (1) on the earlier of the thirty-first day after the
Required Filing Date, the Required Effective Date or a Restricted Sale Date, as
the case may be, and (2) on the earlier of (A) each thirtieth day thereafter,
(B) the third business day after the date the Registration Statement is filed or
is declared effective, or (C) the third business day after the Registration
Statement has its restrictions removed after the relevant Effective Date, as the
case may be.
(v) The parties acknowledge that the damages which may be
incurred by the Investor if the Registration Statement is not filed by the
Required Filing Date or the Registration Statement has not been declared
effective by a Required Effective Date, including if the right to sell
Registrable Securities under a previously effective Registration Statement is
suspended may be difficult to ascertain. The parties agree that the Periodic
3
Amounts represent a reasonable estimate on the part of the parties, as of the
date of this Agreement, of the amount of such damages.
(vi) Notwithstanding the foregoing, the amounts payable by
the Company pursuant to this provision shall not be payable (A) to the extent
any delay in the filing of the Registration Statement occurs because of an act
of, or a failure to act or to act timely by the Initial Investor or its counsel,
or (B) in the event all of the Registrable Securities may be sold pursuant to
Rule 144 or another available exemption under the Act without volume or other
restrictions or limits.
(vii) "Computation Date" means (A) the date which is the
earlier of (1) thirty (30) days after the Required Filing Date, the Required
Effective Date or a Restricted Sale Date, as the case may be, or (2) the date
after the Required Filing Date, the Required Effective Date or Restricted Sale
Date on which the Registration Statement is filed (with respect to payments due
as contemplated by Section 2(b)(i) hereof) or is declared effective or has its
restrictions removed (with respect to payments due as contemplated by Section
2(b)(ii) hereof), as the case may be, and (B) each date which is the earlier of
(1) thirty (30) days after the previous Computation Date or (2) the date after
the previous Computation Date on which the Registration Statement is filed (with
respect to payments due as contemplated by Section 2(b)(i) hereof) or is
declared effective or has its restrictions removed (with respect to payments due
as contemplated by Section 2(b)(ii) hereof), as the case may be.
(viii) Anything in the preceding provisions of this Section
2(b) to the contrary notwithstanding, if, but only if, the Registration
Statement is declared effective within two hundred ten (210) days following the
Closing Date, the provisions of Section 2(b)(ii) shall not apply to the fact
that the Registration Statement was initially declared effective after the
Initial Required Effective Date, and the Company will not have any obligation to
pay any Periodic Amount to the Initial Investor with respect thereto; provided,
however, that the provisions of Section.2(b)(ii) shall continue to apply to all
other events described therein.
3. Obligations of the Company. In connection with the registration
of the Registrable Securities, the Company shall do each of the following:
(a) Prepare promptly, and file with the SEC by the Required
Filing Date a Registration Statement with respect to not less than the number of
Registrable Securities provided in Section 2(a) above, and thereafter use its
reasonable best efforts to cause such Registration Statement relating to
Registrable Securities to become effective by the Required Effective Date and
keep the Registration Statement effective at all times during the period (the
"Registration Period") continuing until the earliest of (i) the date that is
three (3) years after the last day of the calendar month following the month in
which the relevant Effective Date occurs, (ii) the date when the Investors may
sell all Registrable Securities under Rule 144 without volume or other
restrictions or limits or (iii) the date the Investors no longer own any of the
Registrable Securities, which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
4
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) Permit a single firm of counsel designated by the Initial
Investors to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time (but not less than three (3)
business days) prior to their filing with the SEC, and not file any document in
a form to which such counsel reasonably objects;
(d) Notify each Investor and such Investor's legal counsel
identified to the Company and which has requested by written notice to the
Company that it receive such notification (which, until further notice, shall be
deemed to be Krieger & Prager LLP, Attn: Samuel Krieger, Esq., which firm has
requested to receive such notification; each, an "Investor's Counsel"), and any
managing underwriters immediately (and, in the case of (i)(A) below, not less
than three (3) business days prior to such filing) and (if requested by any such
person) confirm such notice in writing no later than one (1) business day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) whenever the SEC notifies the Company whether there will be a "review" of
such Registration Statement; (C) whenever the Company receives (or a
representative of the Company receives on its behalf) any oral or written
comments from the SEC in respect of a Registration Statement (copies or, in the
case of oral comments, summaries of such comments shall be promptly furnished by
the Company to the Investors); and (D) with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or any other Federal or state governmental
authority for amendments or supplements to the Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement
covering any or all of the Registrable Securities or the initiation of any
proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any proceeding for such
purpose; and (v) of the occurrence of any event that to the best knowledge of
the Company makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any 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. In
addition, the Company shall furnish the Investor's Counsel with copies of all
intended written responses to the comments contemplated in clause (C) of this
Section 3(d) not later than one (1) business day in advance of the filing of
such responses with the SEC so that the Investors shall have the opportunity to
comment thereon;
5
(e) Furnish to each Investor and such Investor's Counsel (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one (1) copy of the Registration Statement,
each preliminary prospectus and prospectus, and each amendment or supplement
thereto, and (ii) such number of copies of a prospectus, and all amendments and
supplements thereto and such other documents, as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor;
(f) As promptly as practicable after becoming aware thereof,
notify each Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an 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, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a number of copies
of such supplement or amendment to each Investor as such Investor may reasonably
request;
(g) As promptly as practicable after becoming aware thereof,
notify each Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the SEC of a Notice of Effectiveness or any notice of effectiveness or any stop
order or other suspension of the effectiveness of the Registration Statement at
the earliest possible time;
(h) Notwithstanding the foregoing, if at any time or from time to
time after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing of the existence of a Potential Material
Event, the Investors shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until such Investor receives written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; provided, however, that the
Company may not so suspend the right to such holders of Registrable Securities
during the periods the Registration Statement is required to be in effect other
than during a Permitted Suspension Period (and the applicable provisions of
Section 2(b) shall apply with respect to any such suspension other than during a
Permitted Suspension Period) . The term "Permitted Suspension Period" means one
or more suspension periods during any consecutive 12-month period which
suspension periods, in the aggregate, do not exceed fifty (50) days, provided,
however, that no one such suspension period shall either (i) be for more than
twenty (20) days or (ii) begin less than ten (10) business days after the last
day of the preceding suspension (whether or not such last day was during or
after a Permitted Suspension Period); provided further that the Company shall,
if lawful to do so, provide the Investor with at least two (2) business days'
notice of the existence (but not the substance of) a Potential Material Event;
(i) Use its reasonable efforts to secure and maintain the
designation of all the Registrable Securities covered by the Registration
Statement on the "Nasdaq/Small Cap Market" of the National Association of
Securities Dealers Automated Quotations System ("NASDAQ") within the meaning of
Rule 11Aa2-1 of the SEC under the Securities Exchange
6
Act of 1934, as amended (the "Exchange Act"), and the quotation of the
Registrable Securities on The Nasdaq/Small Cap Market;
(j) Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the initial Effective
Date.
(k) Cooperate with the Investors who hold Registrable Securities
being offered to facilitate the timely preparation and delivery of certificates
for the Registrable Securities to be offered pursuant to the Registration
Statement and enable such certificates for the Registrable Securities to be in
such denominations or amounts as the case may be, as the Investors may
reasonably request, and, within five (5) business days after a Registration
Statement which includes Registrable Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel selected by the Company
to deliver, to the transfer agent for the Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such Registration
Statement) an appropriate instruction and, if necessary, an opinion of such
counsel; and
(l) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement.
4. Obligations of the Investors. In connection with the registration
of the Registrable Securities, the Investors shall have the following
obligations:
(a) It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request. At
least ten (10) days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify each Investor of the
information the Company requires from each such Investor (the "Requested
Information") if such Investor has any Registrable Securities included in the
Registration Statement. If at least two (2) business days prior to the filing
date the Company has not received the Requested Information from an Investor (a
"Non-Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor;
(b) Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(f)
or 3(g), above, such
7
Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the
Company, such Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in such Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
5. Expenses of Registration. All reasonable expenses (other than
underwriting discounts and commissions of the Investor) incurred in connection
with registrations, filings or qualifications pursuant to Section 3, but
including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company shall be borne by the Company. In addition, a fee for a single
counsel for the Investors (as a group and not individually) equal to $3,500 for
the review of the Registration Statement and $2,500 for each post-effective
amendment to a Registration Statement, shall be borne by the Company.
6. Indemnification. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such Investor,
each person, if any, who controls any Investor within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person" or
"Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
the final prospectus (as amended or supplemented, if the Company files any
amendment thereof or supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements therein
were made, not misleading or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation under the Securities Act, the Exchange Act or any state
securities law (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). Subject to clause (b) of this Section 6, the
Company shall reimburse the Investors, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not (I) apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any
Indemnified Person
8
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, after such
prospectus was made available by the Company pursuant to Section 3(c) hereof;
(II) be available to the extent such Claim is based on a failure of the Investor
to deliver or cause to be delivered the prospectus made available by the Company
or the amendment or supplement thereto made available by the Company; (III) be
available to the extent such Claim is based on the delivery of a prospectus by
the Investor after receiving notice from the Company under Section 3(f), (g) or
(h) hereof (other than a notice regarding the effectiveness of the Registration
Statement or any amendment or supplement thereto), or (IV) apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably withheld
or delayed. Each Investor will indemnify the Company and its officers, directors
and agents (each, an "Indemnified Person" or "Indemnified Party") against any
claims arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company, by or on
behalf of such Investor, expressly for use in connection with the preparation of
the Registration Statement or the amendment or supplement thereto, subject to
such limitations and conditions as are applicable to the Indemnification
provided by the Company to this Section 6. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Investors pursuant to Section 9.
(b) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action (including any governmental action), such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be. In case any such action is brought against any Indemnified Person
or Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, subject to the provisions herein stated
and after notice from the indemnifying party to such Indemnified Person or
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for any legal or other reasonable out-of-pocket
expenses subsequently incurred by such Indemnified Person or Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party provided such
counsel is of the opinion that all defenses available to the Indemnified Party
can be maintained without prejudicing the rights of the indemnifying party. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party
9
under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action. The indemnification required by
this Section 6 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as such expense, loss, damage or
liability is incurred and is due and payable.
7. Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) except where the seller has committed fraud (other
than a fraud by reason of the information included or omitted from the
Registration Statement as to which the Company has not given notice as
contemplated under Section 3 hereof) or intentional misconduct, contribution by
any seller of Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such Registrable
Securities.
8. Reports under Securities Act and Exchange Act. With a view to
making available to Investor the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit Investor to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to Investor so long as Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of the Securities Act and the
Exchange Act, and (ii) such other information as may be reasonably requested to
permit Investor to sell such securities pursuant to Rule 144 without
Registration.
(d) The Company will, at the request of any Holder of Registrable
Securities, upon receipt from such Holder of a certificate certifying (i) that
such Holder has held such Registrable Securities for a period of not less than
one (1) year, (ii) that such Holder has not been an affiliate (as defined in
Rule 144) of the company for more than the ninety (90) preceding days, and (iii)
as to such other matters as may be appropriate in accordance with such Rule,
remove from the stock certificate representing such Registrable Securities that
portion of any restrictive legend which relates to the registration provisions
of the Securities Act, provided, however, counsel to Investor may provide such
instructions and opinion to the transfer agent regarding the removal of the
restrictive legend.
10
9. Assignment of the Registration Rights. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities only if: (a) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (b) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (i) the name and address of such transferee or assignee and
(ii) the securities with respect to which such registration rights are being
transferred or assigned, (c) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (d) at
or before the time the Company received the written notice contemplated by
clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein, and (e) such
transfer of Registrable Securities is completed and disclosed to the Company
prior to the initial Effective Date. In the event of any delay in filing or
effectiveness of the Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such delay, or the
payments set forth in Section 2(b) hereof arising from such delay.
10. Amendment of Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
hold a sixty-seven percent (67%) interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall be
given in the manner contemplated by the Securities Purchase Agreement, (i) if to
the Company or to the Initial Investor, to their respective address contemplated
by the Securities Purchase Agreement, and (ii) if to any other Investor, at such
address as such Investor shall have provided in writing to the Company, or at
such other address as each such party furnishes by notice given in accordance
with this Section 11(b).
(c) Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of
11
the parties consents to the jurisdiction of the federal courts whose districts
encompass any part of the City of New York or the state courts of the State of
New York sitting in the City of New York in connection with any dispute arising
under this Agreement and hereby waives, to the maximum extent permitted by law,
any objection, including any objection based on forum non coveniens, to the
bringing of any such proceeding in such jurisdictions. To the extent determined
by such court, either party hereto shall reimburse the other party for any
reasonable legal fees and disbursements incurred by such party in enforcement of
or protection of any of its rights under this Agreement.
(e) If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(i) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by telephone line facsimile transmission of
a copy of this Agreement bearing the signature of the party so delivering this
Agreement.
(j) The Company acknowledges that any failure by the Company to
perform its obligations under Section 3(a) hereof, or any delay in such
performance could result in loss to the Investors, and the Company agrees that,
in addition to any other liability the Company may have by reason of such
failure or delay, the Company shall be liable for all direct damages caused by
any such failure or delay, unless the same is the result of force majeure.
Neither party shall be liable for consequential damages.
(k) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof. This Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
COMPANY:
SIGA TECHNOLOGIES, INC.
By:________________________________
Name:
Title:
INITIAL INVESTOR:
[Print Name of Initial Investor]
By: ______________________________
Name:
Title:
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