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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. 4)(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)
September 19, 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 14 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).
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13D Page 2 of 14 pages
CUSIP No. 82 6917-10-6
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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 2,824,558 ** ***
BENEFICIALLY -------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0 ***
PERSON WITH -------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,918,926 ***
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
0 ***
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,824,558 ** ***
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES* **
[x]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.46% ** ***
--------------------------------------------------------------------------------
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 and a warrant (the "Drapkin September
2001 Warrant") to purchase up to 30,500 shares of Common Stock. However, the
Investor Warrant and Drapkin September 2001 Warrant provide that, with certain
limited exceptions, they are 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
and/or Drapkin September 2001 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 October 3, 2001, Mr. Drapkin's Investor
Warrant and Drapkin September 2001 Warrant are not presently exercisable. If not
for the 9.99% limit, Mr. Drapkin would be deemed beneficially to own 3,202,884
shares of common stock, or 30.0% of the outstanding shares of Common Stock.
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13D Page 4 of 14 pages
CUSIP No. 82 6917-10-6
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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 1,075,000 ***
BENEFICIALLY -------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 202,584 ** ***
PERSON WITH -------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,075,000 ***
-------------------------------------------------
10 SHARED DISPOSITIVE POWER
202,584 ** ***
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,277,584 ** ***
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.48% ** ***
--------------------------------------------------------------------------------
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.
*** Panetta holds, inter alia, a warrant (the "Distributor Warrant") to
purchase up to 210,000 shares of Common Stock, a warrant (the "Consulting
Warrant") to purchase up to 303,200 shares of Common Stock, two warrants (the
"Panetta May 2001 Warrants") to purchase an aggregate of up to 121,500 shares of
Common Stock and a warrant (the "Panetta September 2001 Warrant") to purchase up
to 14,688 shares of Common Stock. However, the Distributor Warrant, the
Consulting Warrant, the Panetta May 2001 Warrants and the Panetta September 2001
Warrant provide that, with certain limited exceptions, they are not exercisable
if, as a result of such exercise, the number of shares of Common Stock
beneficially owned by Panetta and its affiliates, including Mr. Cerrone, (other
than shares of Common Stock which may be deemed beneficially owned through the
ownership of the unexercised portion of such Consulting Warrant, Distributor
Warrant, Panetta May 2001 Warrant and/or Panetta September 2001 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. Cerrone may be deemed beneficially to own, as of October 3,
2001, Panetta's Consulting Warrant, Distributor Warrant, Panetta May 2001
Warrants and Panetta September 2001 Warrant are not presently exercisable. If
not for the 9.99% limit, Mr. Cerrone would be deemed beneficially to own
1,926,972 shares of common stock, or 17.7% of the outstanding shares of Common
Stock.
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13D Page 5 of 14 pages
CUSIP No. 82 6917-10-6
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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 202,584 **
PERSON WITH -----------------------------------------------
9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------
10 SHARED DISPOSITIVE POWER
202,584 **
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
202,584 **
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.21% **
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
** Panetta holds, inter alia, a warrant (the "Distributor Warrant") to
purchase up to 210,000 shares of Common Stock, a warrant (the "Consulting
Warrant") to purchase up to 303,200 shares of Common Stock, two additional
warrants (the "Panetta May 2001 Warrants") to purchase an aggregate of up to
121,500 shares of Common Stock and a warrant (the "Panetta September 2001
Warrant") to purchase up to 14,688 shares of Common Stock. However, the
Distributor Warrant, the Consulting Warrant, the Panetta May 2001 Warrants and
the Panetta September 2001 Warrant provide that, with certain limited
exceptions, they are not exercisable if, as a result of such exercise, the
number of shares of Common Stock beneficially owned by Panetta and its
affiliates, including Mr. Cerrone, (other than shares of Common Stock which may
be deemed beneficially owned through the ownership of the unexercised portion of
such Consulting Warrant, Distributor Warrant, Panetta May 2001 Warrant and/or
Panetta September 2001 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. Cerrone may be deemed
beneficially to own, as of October 3, 2001, Panetta's Consulting Warrant,
Distributor Warrant, Panetta May 2001 Warrants and Panetta September 2001
Warrant are not presently exercisable. If not for the 9.99% limit, Panetta would
be deemed beneficially to own 851,972 shares of common stock, or 8.7% of the
outstanding shares of Common Stock.
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13D Page 6 of 14 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 253,467
BENEFICIALLY ------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0
PERSON WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
253,467
------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
253,467
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.70%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
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13D Page 7 of 14 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 790,090
BENEFICIALLY ------------------------------------------------
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING 0
PERSON WITH ------------------------------------------------
9 SOLE DISPOSITIVE POWER
790,090
------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
790,090
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES*
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.02%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
SCHEDULE 13D
This Amendment No. 4 amends and supplements the Reporting Persons'
Statement on Schedule 13D, dated March 30, 2001, as amended to date
(the "Schedule"), in its entirety.
Item 1. Security and Issuer.
This Statement on Schedule 13D (the "Statement") relates to the
Common Stock, $.0001 par value per share, (the "Common Stock") of
SIGA Technologies, Inc., a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 420
Lexington Avenue, Suite 620, New York, New York, 10170.
Item 2. Identity and Background.
(a) This statement is filed on behalf of Donald G. Drapkin,
Gabriel M. Cerrone, Panetta Partners Ltd. ("Panetta"), Thomas
E. Constance and Eric A. Rose, M.D. (collectively, the
"Reporting Persons"). See attached Exhibit P which is a copy
of their agreement in writing to file this statement jointly
on behalf of each of them. Each of the Reporting Persons has
made, and will continue to make, its own investment decisions
with respect to securities of the Issuer. Each Reporting
Person expressly disclaims membership in a "group" with any
other person within the meaning of Rule 13d-5(b)(1) of the
Securities Exchange Act of 1934, as amended.
(b) The business address of Mr. Drapkin is 35 East 62nd Street,
New York, New York, 10021. The business address of each of Mr.
Cerrone and Panetta is 265 East 66th Street, Suite 16G, New
York, New York, 10021. The business address of Mr. Constance
is 919 Third Avenue, 41st Floor, New York, New York, 10022.
The business address of Dr. Rose is 112 East 78th Street, New
York, New York, 10021.
(c) Mr. Drapkin is a Director and Vice Chairman of MacAndrews &
Forbes Holdings Inc., a Delaware corporation having its
address at 35 East 62nd Street, New York, New York, 10021. Mr.
Cerrone is an investment banker, consultant and stock broker,
and the sole general partner of Panetta, a Colorado limited
partnership the principal business of which is delivering
consulting services. Mr. Constance is a Senior Partner of
Kramer Levin Naftalis & Frankel LLP, a law firm in New York
City. Dr. Rose is Chairman of the Department of Surgery and
Surgeon-in-Chief of the Columbia Presbyterian Center of New
York Presbyterian Hospital.
(d) The Reporting Persons and their respective managing members,
officers, directors, general partners, investment managers,
and trustees have not, during the five years prior to the date
hereof, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) The Reporting Persons and their respective managing members,
officers, directors, general partners and investment managers
have not, during the five years prior to the date hereof, been
party to a civil proceeding of a judicial or administrative
body of competent jurisdiction, as a result of which such
person was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or State securities laws or
finding any violation with respect to such laws.
(f) Mr. Drapkin, Mr. Cerrone, Mr. Constance and Dr. Rose are
citizens of the United States.
Item 3. Source and Amount of Funds or Other Consideration
Pursuant to a Securities Purchase Agreement between Mr. Drapkin and
the Issuer, dated as of January 31, 2000, (the "Purchase Agreement")
a copy of which is filed as Exhibit B hereto, Mr. Drapkin purchased
(i) $500,000 principal amount of 6% Convertible Debentures due
January 31, 2002 of the Issuer ("Debentures"), a copy of which is
filed as Exhibit C hereto, with $500,000 of his personal funds, and
(ii) a warrant (an "Investor Warrant"), a copy of which is filed as
Exhibit D hereto, to purchase up to 347,826 shares of Common Stock
at an exercise price of $3.4059 per share, with $17,391.30 of his
personal funds. The principal amount of, and accrued interest on,
the Debentures were convertible into Common Stock at the option of
the holder at any time prior to the maturity date, at a conversion
price of $1.4375 per share. Pursuant to the Conversion Agreement (as
defined below), Mr. Drapkin converted his Debentures into
373,913 shares of Preferred Stock (as defined below) of the Issuer
(see Item 4). As noted below, on July 16, 2001, Mr. Drapkin
converted his 373,913 shares of Preferred Stock, together with
accrued dividends thereon, into 379,859 shares of Common Stock.
Pursuant to a Distributor's Agreement between Fahnestock & Co. Inc.
and the Issuer, dated as of January 27, 2000, and in connection with
the Issuer's private placement of Debentures, Fahnestock designated
Mr. Cerrone to receive, and he was issued, the Distributor Warrant,
a copy of which is filed as Exhibit E hereto, to purchase up to
210,000 shares of Common Stock at an exercise price of $1.45 per
share. Mr. Cerrone then assigned the Distributor Warrant to Panetta.
Pursuant to a Consulting Agreement between Fahnestock & Co. Inc. and
the Issuer, dated as of October 31, 2000, Fahnestock & Co. Inc.
designated Panetta to receive, and Panetta was issued the Consulting
Warrant (together with the Investor Warrant and the Distributor
Warrant, the "2000 Warrants") to purchase up to 303,200 shares of
Common Stock at an exercise price of $2.00 per share, a copy of
which is attached hereto as Exhibit F. The Consulting Warrant was
issued to Panetta partially in consideration for the cancellation of
a warrant to purchase 303,200 shares of Common Stock at an exercise
price of $5.00 per share, a copy of which is filed as Exhibit G
hereto, that had been issued to Mr. Cerrone in connection with the
Issuer's March 2000 equity financing. The Distributor Warrant and
the Consulting Warrant each contain provisions granting the holder
certain registration rights.
Each 2000 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 the holder thereof and
its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised
portion of such Warrant) would exceed 9.99% of the outstanding
shares of Common Stock. As a result of the restrictions described in
the immediately preceding sentence (the "9.99% Limit") and the other
securities which Mr. Drapkin and Mr. Cerrone may be deemed
beneficially to own, as of October 3, 2001, Mr. Drapkin's Investor
Warrant and Drapkin September 2001 Warrant and Panetta's Consulting
Warrant, Distributor Warrant, Panetta May 2001 Warrants and Panetta
September 2001 Warrant are not presently exercisable. The Issuer may
require the such warrants to be exercised (subject to the same 9.99%
Limit) within five days if both (i) the registration statement with
respect to the shares of Common Stock issuable thereupon is
effective and (ii) the closing bid price for the Common Stock for
each of any 15 consecutive trading days is at least 200% of the
exercise price of the warrant at such time. Exceptions to the 9.99%
Limit include the existence of a tender offer for the Issuer's
common stock.
Between June 26, 2000 and December 22, 2000, Mr. Drapkin engaged in
open market transactions through which he acquired a net 373,400
shares of Common Stock. Between February 9, 2000 and March 13, 2000,
Mr. Cerrone purchased 61,500 shares of Common Stock on the open
market. Mr. Cerrone then assigned such shares to Panetta. Mr.
Drapkin and Mr. Cerrone used their respective general funds for such
purchases.
Mr. Drapkin made the following purchases:
Date No. of Shares Purchase Price
---- ------------- --------------
6/26/2000 31,500 $4.037
6/27/2000 2,000 $3.977
6/29/2000 5,000 $4.037
7/6/2000 2,500 $4.54
7/27/2000 4,000 $4.049
8/2/2000 20,500 $3.947
8/3/2000 1,600 $3.906
8/4/2000 4,000 $3.747
8/7/2000 500 $3.812
8/8/2000 2,500 $3.581
8/10/2000 5,000 $3.532
8/11/2000 6,000 $4.122
8/11/2000 50,000 $4.065
8/14/2000 50,000 $4.399
8/15/2000 1,100 $3.906
8/16/2000 2,000 $3.967
8/24/2000 12,500 $3.30
8/25/2000 17,500 $3.406
Date No. of Shares Purchase Price
---- ------------- --------------
8/28/2000 11,000 $3.457
8/29/2000 7,500 $3.195
8/31/2000 10,000 $3.084
9/14/2000 4,100 $3.004
9/25/2000 20,500 $3.498
9/27/2000 100 $2.906
9/29/2000 40,000 $4.039
11/3/2000 2,500 $4.175
11/30/2000 20,500 $4.047
12/1/2000 4,000 $3.852
12/5/2000 40,000 $4.508
12/22/2000 10,000 $3.026
Mr. Drapkin made the following sale:
Date No. of Shares Sales Price
---- ------------- -----------
9/19/2000 15,000 $3.386
Mr. Cerrone made the following purchases:
Date No. of Shares Purchase Price
---- ------------- --------------
2/9/2000 16,100 $4.589
2/10/2000 3,900 $4.551
2/11/2000 10,500 $4.560
2/18/2000 12,100 $5.308
2/22/2000 2,400 $5.369
2/23/2000 12,500 $5.406
3/2/2000 2,500 $5.986
3/13/2000 1,500 $9.158
In connection with the Management Restructuring Agreement (as
defined in Item 4, below), each of Judson A. Cooper and Joshua D.
Schein, Ph.D. agreed to grant an irrevocable proxy (collectively,
the "Proxies") to Mr. Drapkin on the Effective Date (as defined in
the Management Restructuring Agreement) giving Mr. Drapkin voting
power over an aggregate of 905,632 shares of Common Stock owned by
such parties (the "Proxy Shares") together with any shares of
capital stock of the Issuer that such parties may acquire subsequent
to the date of the Proxies (including, without limitation, upon the
exercise of options held by Mr. Cooper and Mr. Schein, to purchase
up to an aggregate of 1,400,002 shares of Common Stock).
Pursuant to separate Common Stock and Warrant Purchase Agreements
between the Issuer and each of Panetta and Dr. Rose, dated as of May
8, 2001, (the "May 2001 Purchase Agreements") the form of which is
Exhibit K hereto: (i) Panetta purchased, with $180,000 of its
general funds, 90,000 shares of Common Stock and a warrant (a "May
2001 Investor Warrant"), the form of which is Exhibit L hereto, to
purchase up to 90,000 shares of Common Stock; and Dr. Rose
purchased, with $100,000 of his personal funds, 50,000 shares of
Common Stock and a May 2001 Investor Warrant to purchase up to
50,000 shares of Common Stock. The May 2001 Investor Warrants are
exercisable for a period of seven years at an exercise price of
$2.94 per share and contain provisions analogous to the 9.99% Limit
described above.
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.
Pursuant to separate Common Stock and Warrant Purchase Agreements
between the Issuer and each Panetta, Mr. Drapkin, Mr. Constance and
Dr. Rose, dated as of August 31, 2001, as amended in September 2001
(the "September 2001 Purchase Agreements"), the form of which is
Exhibit Q hereto: (i) Panetta purchased, with $60,000 of its general
funds, 19,584 shares of Common Stock and a warrant (a "September
2001 Investor Warrant"), the form of which is Exhibit R hereto, to
purchase up to 14,688 shares of Common Stock; Mr. Drapkin
purchased, with $125,000 of his personal funds, 40,667 shares of
Common Stock and a September 2001 Investor Warrant to purchase up to
30,500 shares of common Stock; Mr. Constance purchased, with $50,000
of his personal funds, 16,267 shares of Common Stock and a September
2001 Investor Warrant to purchase up to 12,200 shares of Common
Stock, and Dr. Rose purchased, with $150,000 of his personal funds,
51,480 shares of Common Stock and a September 2001 Investor Warrant
to purchase up to 38,610 shares of Common Stock. The September 2001
Investor Warrants are exercisable for a period of seven years at an
exercise price of $3.552 per share and contain provisions analogous
to the 9.99% Limit described above.
On May 3, 2001, the Issuer's Board of Directors made grants (the
"Conditional Grants") of options to certain officers, directors and
advisors of the Issuer, subject to approval of an Amendment and
Restatement of the Issuer's Amended and Restated 1996 Incentive and
Non-Qualified Stock Option Plan (the "Plan"). Mr. Drapkin, Dr. Rose,
Mr. Constance and Mr. Cerrone received Conditional Grants of options
to purchase up to 1,125,000, 600,000, 225,000 and 1,075,000 shares
of Common Stock, respectively. The Conditional Grants were made
subject to stockholder approval, and such approval was granted when
the Issuer's stockholders approved the Amendment and Restatement of
the Plan at the Issuer's 2001 Annual Meeting, held on August 15,
2001. The shares of Common Stock subject to the Conditional Grant
options were exercisable immediately upon such stockholder approval
at an exercise price of $2.50 per share, and the options granted to
the Reporting Persons under the Conditional Grants are included in
the beneficial ownership figures reported in this Schedule 13D.
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 Agreements or the September 2001 Purchase Agreements
(collectively, the "Purchased Common"). Each Reporting Person
disclaims beneficial ownership of the securities held by any other
party.
Item 4. Purpose of Transaction.
Each Reporting Person which acquired securities of the Issuer did so
as an investment in the Issuer. Except as indicated in this Schedule
13D, no Reporting Person currently has any plans or proposals that
relate to, or would result in, any of the matters described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
In connection with the Purchase Agreement, Mr. Drapkin entered into
a Registration Rights Agreement with the Issuer, dated as of January
31, 2000, ("Registration Rights Agreement"), a copy of which is
filed as Exhibit H hereto. Pursuant to the Registration Rights
Agreement, the Issuer agreed: (i) to file no later than 30 days
after the Closing Date (as used in the Purchase Agreement), a
Registration Statement under the Securities Act of 1933, as amended,
(the "Required Registration Statement") covering the resale of the
shares of Common Stock issuable upon conversion of principal and
interest of the Debentures and upon exercise of the Warrant; and
(ii) to use its reasonable best efforts to cause such Registration
Statement to be declared effective no later than the earlier of (x)
five days after notice by the Securities and Exchange Commission
that it may be declared effective and (y) 90 days after the Closing
Date. On May 10, 2000, the Issuer filed the Required Registration
Statement and, on May 24, 2000, it was declared effective. The
shares of Common Stock issuable upon exercise of the Distributor
Warrant were also included in the Required Registration Statement.
Pursuant to a 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. (the "Management
Restructuring Agreement"), a copy of which is filed as Exhibit I
hereto, Mr. Drapkin had the right to be and to have his designees
elected to the Board of Directors of the Issuer (the "Board") on the
Effective Date. The Management Restructuring Agreement also provides
that the members of the Board at such time would be caused to resign
from the Board and from any and all offices held with the Issuer.
Pursuant to the Management Restructuring Agreement, Judson A. Cooper
and Joshua D. Schein have agreed to resign from the Board of the
Issuer, and from all other offices held with the Issuer, effective
as of the Effective Date. Mr. Drapkin has designated Mr. Cerrone,
Mr. Constance and Dr. Rose for election to the Board in accordance
with the Management Restructuring Agreement. As of April 19, 2001,
Mr. Drapkin, Mr. Cerrone, Mr. Constance and Dr. Rose were appointed
to the Board and each of the Issuer's remaining other directors
resigned from the Board as contemplated by the Management
Restructuring Agreement. Thereafter, the Board filled the vacancies
on the Board that resulted from such resignations.
In connection with the May 2001 Purchase Agreement, Panetta and Dr.
Rose each entered into a Registration Rights Agreement with the
Issuer, dated as of May 8, 2001, (the "May 2001 Registration Rights
Agreements"), the form of which is Exhibit M hereto. Pursuant to the
May 2001 Registration Rights Agreement, the Issuer agreed: (i) to
file no later than 60 days after the Closing Date (as defined in the
May 2001 Purchase Agreement), a Registration Statement under the
Securities Act of 1933, as amended, (the "2001 Required Registration
Statement") covering the resale of the shares of Common Stock issued
pursuant to the May 2001 Purchase Agreements and the shares of
Common Stock issuable upon exercise of the May 2001 Investor
Warrants; and (ii) to use its reasonable best efforts to cause such
Registration Statement to be declared effective no later than the
earlier of (x) five days after notice by the Securities and Exchange
Commission that it may be declared effective and (y) 180 days after
the Closing Date.
Pursuant to a Conversion Agreement among the Issuer and holders of
Debentures (the "Conversion Agreement"), the form of which is
attached hereto as Exhibit N, Mr. Drapkin agreed to convert the
outstanding principal and accrued interest on his Debentures, into
373,913 shares of Series A Convertible Preferred Stock of the Issuer
(the "Preferred Stock"), the form of the Certificate of Designations
for which is attached hereto as Exhibit O, representing at a
conversion price of $1.4375 per share of Preferred Stock. The
Preferred Stock has a cumulative dividend of 6% per annum payable in
cash or additional shares of Preferred Stock at the Issuer's
discretion. The Preferred Stock is convertible into Common Stock an
initial conversion rate of one-to-one, and each holder of Preferred
Stock is entitled to the number of votes equal to the number of
whole shares of Common Stock into which the shares of Preferred
Stock held by such holder are then convertible. The Preferred Stock
is not subject to the 9.99% Limit. On July 16, 2001, Mr. Drapkin
converted his 373,913 shares of Preferred Stock, together with
accrued dividends thereon, into 379,859 shares of Common Stock.
Each Reporting Person may from time to time acquire, or dispose of,
Common Stock and/or other securities of the Issuer if and when it
deems it appropriate. Each Reporting Person may formulate other
purposes, plans or proposals relating to any securities of the
Issuer to the extent deemed advisable in light of market conditions,
investment policies and other factors.
Item 5. Interest in Securities of Issuer.
(a) As of October 3, 2001: Mr. Drapkin, as the holder of
securities of the Issuer and as proxyholder under the Proxies
may be deemed beneficially to own 2,824,558 shares of Common
Stock or 27.5% of the outstanding shares, and, if not for the
9.99% Limit, Mr. Drapkin could be deemed to beneficially own
3,202,884 shares of Common Stock or 30.0% of the outstanding
shares; Mr. Cerrone, in his own name and as the sole general
partner of Panetta, may be deemed beneficially to own an
aggregate of 1,277,584 shares of Common Stock or 12.5% of the
outstanding shares, and, if not for the 9.99% Limit, Mr.
Cerrone could be deemed beneficially to own an aggregate of
1,926,972 shares of Common Stock or 17.7% of the outstanding
shares; Panetta may be deemed beneficially to own 202,584
shares of Common Stock or 2.2% of the outstanding shares, and,
if not for the 9.99% Limit, Panetta could be deemed
beneficially to own an aggregate of 851,972 shares of Common
Stock or 8.7% of the outstanding shares; and each of Mr.
Constance and Dr. Rose may be deemed beneficially to own the
respective numbers of shares of Common Stock (representing the
respective percentages of Common Stock outstanding) set forth
below:
Mr. Constance 253,467 2.7%
Dr. Rose 790,090 8.0%
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. Cerrone has sole power to
vote or direct the vote and to dispose or to direct the
disposition of the shares issuable upon exercise of the
options which he owns, and 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. Mr.
Constance 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. 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.
(c) Other than the receipt of options upon the stockholder
approval of the Conditional Grants, Mr. Drapkin's conversion
of Preferred Stock into shares of Common Stock (to the extent
that any of the above may be deemed a transaction in the
Common Stock) and the Reporting Persons' purchasing Common
Stock pursuant to the September 2001 Purchase Agreements, no
Reporting Person has engaged in any transactions in the Common
Stock of the Issuer in the past 60 days.
(d) & (e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Pursuant to the Proxies, Mr. Drapkin was appointed proxyholder
with respect to certain securities held by Mr. Cooper and Mr.
Schein (see Item 3). A form of the Proxies is attached to the
Management Restructuring Agreement that is filed as Exhibit I
hereto. The Management Restructuring Agreement includes
provisions restricting the abilities of the parties thereto to
transfer their respective securities of the Issuer.
Additionally, Mr. Drapkin has entered into a Lock-Up Agreement
with Vincent Fischetti, a copy of which is filed as Exhibit J
hereto, pursuant to which Mr. Fischetti is restricted in
transferring his securities of the Issuer without Mr.
Drapkin's prior written consent.
Except as indicated in this Schedule 13D and the exhibits
hereto, there is no contract, arrangement, understanding or
relationship between the Reporting Person and any other
person, with respect to any securities of the Issuer.
Item 7. Material to be Filed as Exhibits. (2)
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.
-----------------------
(2) Except as otherwise indicated, all exhibits have been previously filed with
the original Schedule 13D or prior Amendments thereto.
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.
Exhibit P: Agreement of Joint Filing of Schedule 13D,
dated as of October 1, 2001. (filed herewith)
Exhibit Q: Form of Common Stock and Warrant Purchase
Agreements between the Issuer and each Buyer
(as defined therein). (filed herewith)
Exhibit R: Form of Common Stock Purchase Warrants to
purchase shares of Common Stock issued to each
Buyer. (filed herewith)
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: October 1, 2001 /s/ Donald G. Drapkin
------------------------------
Donald G. Drapkin
Dated: October 1, 2001 /s/ Gabriel M. Cerrone
------------------------------
Gabriel M. Cerrone
PANETTA PARTNERS LTD.
Dated: October 1, 2001 By /s/ Gabriel M. Cerrone
---------------------------
Name: Gabriel M. Cerrone
Title: General Partner
Dated: October 1, 2001 /s/ Thomas E. Constance
------------------------------
Thomas E. Constance
Dated: October 1, 2001 /s/ Eric A. Rose, M.D.
------------------------------
Eric A. Rose, M.D.
Exhibit P
AGREEMENT OF
JOINT FILING OF SCHEDULE 13D
The undersigned hereby agree jointly to prepare and file with regulatory
authorities Amendment 4 to the Schedule 13D and any subsequent amendments
thereto reporting each of the undersigned's ownership of securities of SIGA
Technologies, Inc. and hereby affirm that such Schedule 13D is being filed on
behalf of each of the undersigned.
Dated: October 1, 2001 /s/ Donald G. Drapkin
------------------------------
Donald G. Drapkin
Dated: October 1, 2001 /s/ Gabriel M. Cerrone
------------------------------
Gabriel M. Cerrone
PANETTA PARTNERS LTD.
Dated: October 1, 2001 By /s/ Gabriel M. Cerrone
----------------------------
Name: Gabriel M. Cerrone
Title: General Partner
Dated: October 1, 2001 /s/ Thomas E. Constance
-------------------------------
Thomas E. Constance
Dated: October 1, 2001 /s/ Eric A. Rose, M.D.
-------------------------------
Eric A. Rose, M.D.
Exhibit Q
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
COMMON STOCK AND WARRANT PURCHASE AGREEMENT, dated as of
____________, 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 terns 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 requiem:
(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 $2.75.
(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 head 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.
(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.
-2-
(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 $500,000 and not more than
$2,000,000.
(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.
(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 finds 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 August 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.
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 tins 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,
-3-
moratorium or similar laws affecting creditors' rights generally and to general
equitable principles,
(b) The authorized capital stock of the Company consists of (1)
50,000,000 shares of Common Stock, $,0001 par value per share, of which, as of
August 23, 2001, 8,750,386 shares are outstanding, and (ii) 10,000,000 shares of
Preferred Stock, $.0001 par share, of which, as of August 23, 2001, 394,266 are
outstanding. All issued and outstanding shares of Common Stock have been duly
authorized and validly issued and are filly paid and nonassessable. The Company
has sufficient authorized and unissued shares of Common Stock as may be
necessary to effect the issuance of the Purchased Shares. The Purchased Shares
have been duly authorized and, when issued, will be duly and validly issued,
fully paid and non-assessable and will not subject the holder thereof to
personal liability by reason of being such holder.
(c) 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.
(d) 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.
(e) 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.
(f) 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.
(g) 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 may 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 bath 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 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.
-4-
(h) 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.
(i) 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 May 1, 2000, the Company has timely filed all requisite forms,
reports and exhibits thereto required to be filed by the Company with the SEC.
(j) 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.
(k) 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.
(l) 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
-5-
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.
(m) Except as set forth in Section 2(g), 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.
(n) 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 bas 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.
(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.
-6-
(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) Quarterly Reports on Form 10-QSB, as amended,
for the fiscal quarters ended March 31, 2001 and June 30, 2001, respectively,
(3) Schedule SC 14f-1 Statement of Change in Control filed April 9, 2001, (4)
Definitive Proxy Statement, as filed on July 31, 2001, (5) Registration
Statement on Form S-8, as filed on February 26, 2001, and (6) Registration
Statement on Form S-3, as filed on July 2, 2001 and amended on July 6, 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 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")
-7-
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 them 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, 2000 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 May 1, 2000
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 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
-8-
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 riles and regulations of the SEC and other applicable rules and
regulations with respect thereto. Such financial statement 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 seventy-five percent (75%) of the Purchased Shares. Such Warrants
shall bear an exercise price per share of Common Stock equal to 120% 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 Forth 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 (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 its 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
-9-
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(c) 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 thus 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 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.
-10-
(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;
(c) On the Closing Date, the Buyer shall have received an opinion
of counsel for the Company, dated such Closing Date, in form, scope and
substance reasonably satisfactory to the Buyer, substantially to the effect set
forth in Annex V attached hereto;
(d) 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;
-11-
(e) 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
(f) From and after the date hereof to and including such Closing
Date, trading in securities generally an 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: Thomas Konatich
Telephone No.: (212) 672-9100
Facsimile No.: (212) 697-3130
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
ATTN: Jeffrey J. 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.
(e) A facsimile transmission of this signed Agreement shall be
legal and binding on all parties hereto.
-13-
(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) Thus 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. (Signature of Authorized Person)
-----------------------
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-
ANNEX I FORM OF WARRANT
ANNEX II JOINT ESCROW INSTRUCTIONS
ANNEX III REGISTRATION RIGHTS AGREEMENT
ANNEX IV COMPANY DISCLOSURE MATERIALS
ANNEX V FORM OF OPINION
Exhibit R
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 a fully paid and nonassessable shares of the Company's Common
Stock, $.0001 par value per share (the "Common Stock"), at as 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
August _____, 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
----------
1 Insert date which is last day of month in which seventh anniversary of
Closing Date occurs.
2 Insert number equal to 75% of Buyer's Purchased Shares.
3 Insert amount equal to 120% of the average Closing Bid Price of the Common
Stock for the 5 trading days ending on the trading day immediately
receding the Closing Date.
Warrant and shall indicate the number of shares then, being purchased pursuant
to such exercise. 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 (and the Company shall not have the right to require a Mandatory
Exercise, as defined below), 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.
2.3 Mandatory Exercise.
(a) Company's Right to Issue Mandatory Exercise Notice. Subject
to the terms of this Section 2.3, at its option, the Company may, by written
notice (a "Mandatory Exercise Notice") given to the Holder, accelerate the
Expiration Date for all or a portion of the then unexercised shames covered by
this Warrant to a date (the "Mandatory Expiration Date") which is at least
fifteen (15) business days after the date the Mandatory Exercise Notice is
given. The exercise of the Warrant contemplated by the Mandatory Exercise Notice
is referred to as the "Mandatory Exercise." The numbest of shares specified in
the Mandatory Exercise Notice is referred to as the "Mandatory Exercise Shares."
The Company may issue a Mandatory Exercise Notice if, and only if, all of the
following requirements are met:
(i) Registration Statement Available. The
Registration Statement must have been effective and available
for the resale of all of the shares of Common Stock issuable
upon the Mandatory Exercise at all times during the ten (10)
consecutive trading days ending on the trading day immediately
before the Company issues a Mandatory Exercise Notice (such ten
trading days, the "Mandatory Period") and at all times from the
issuance of the Mandatory Exercise Notice through and including
the Mandatory Expiration Date.
(ii) Required Common Stock Market Price. The Closing
Bid Price of the Common Stock for each trading day of the
Mandatory Period shall be at least $5.25 (adjusted to take into
account any stock split effected after the Closing Date).
(iii) Required Common Stock Volume. The average
trading volume of the Common Stock during the Mandatory Period
shall be at least 100,000 shares per trading day (adjusted to
take into account any stock split effected after the Closing
Date, except that with respect to a reverse stock split, the
adjustment shall not be greater than a ratio of 1:4).
(iv) Conversion Limitation. Neither the Mandatory
Exercise Shares nor the exercise of the Warrant contemplated by
the Mandatory Exercise Notice shall be inconsistent with the
provisions of Section 2.2 hereof, which provisions shall apply
to mandatory Exercise. If the Mandatory Exercise Notice provides
for a number of Mandatory Exercise Shares which exceeds the
number contemplated by Section 2.2, such Mandatory Exercise
Notice shall be deemed automatically adjusted and revised to
refer only to the maximum number of shares contemplated by said
Section 2.2.
(b) Holder's Exercise. Upon the proper issuance of a Mandatory
Exercise Notice, the Holder may, on or before the Mandatory Expiration Date,
exercise this Warrant for all or any of the Mandatory Exercise Shares at the
Exercise Price. The Mandatory Exercise Shares as to which the Holder does not
exercise this Warrant on or before the Mandatory Expiration Date are referred to
as the "Unexercised Shares." To the extent the Holder does not exercise this
Warrant with respect to any Unexercised Shares, the Holder's rights under this
Warrant with respect to the Unexercised Shares shall expire as of the close of
business on the Mandatory Expiration Date.
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.
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 Adjustment. 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 thus 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
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 far 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 rut 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:
(i) if to the Company, to;
SIGA TECHNOLOGIES, INC.
420 Lexington Avenue, Suite 620
New York, NY 10170
ATTN: Thomas Konatich
Telephone No.: (212) 672-9100
Facsimile No.: (212) 697-3130
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
590 Madison Avenue
New York, New York 10022
ATTN: Jeffrey J. Fessler, Esq.
Telephone No.: (212) 872-1000
Facsimile No.: (212) 872-1002
(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 waiting 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 o(pound)
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, 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)
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.
Please deliver the stock certificate to:
Dated:
--------------------------
--------------------------------
[Name of Holder]
By:
-----------------------------
|_| CASH: $
-----------------------
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%]