SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 23, 2003
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SIGA Technologies, Inc.
(Exact Name of Registrant as Specified in Charter)
Commission File Number: 0-23047
Delaware 13-3864870
(State or other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
420 Lexington Avenue, Suite 601
New York, New York 10170
(Address of Principal Executive Offices)
(Zip Code)
(212) 672-9100
(Registrant's telephone number, including area code)
ITEM 2. Acquisition of Assets
On May 23, 2003 (the "Effective Date"), SIGA Technologies, Inc., a
Delaware corporation ("SIGA"), acquired substantially all of the assets of
Plexus Vaccine Inc., a California corporation ("Plexus"), in accordance with the
terms of an asset purchase agreement dated as of May 14, 2003 (the "Asset
Purchase Agreement"). Pursuant to the Asset Purchase Agreement, SIGA acquired
certain tangible and intangible assets of Plexus, including, without limitation,
computer hardware and software, contracts, leases, licenses, intellectual
property and all of the issued and outstanding capital stock of Plexus's
wholly-owned Danish subsidiary (the "Acquired Assets").
Pursuant to the Asset Purchase Agreement, SIGA purchased the Acquired
Assets in exchange for its issuance to Plexus of 1,950,000 shares of common
stock, par value $.0001 per share, of SIGA ("SIGA Common Stock"), and its
assumption of certain liabilities of Plexus. SIGA has agreed to register the
shares of SIGA Common Stock issued to Plexus under the Securities Act of 1933,
as amended (the "Securities Act"), in accordance with the terms of a
registration rights agreement, dated as of the Effective Date, between SIGA and
Plexus. The consideration for the Acquired Assets was determined as a result of
arm's length negotiations between each of SIGA and Plexus.
Pursuant to the Asset Purchase Agreement, SIGA issued (i) options to
purchase shares of SIGA Common Stock at an exercise price of $1.69 per share to
certain holders of options to purchase shares of common stock, no par value, of
Plexus ("Plexus Common Stock"), and (ii) warrants to purchase shares of SIGA
Common Stock at an exercise price of $1.69 per share to certain holders of
warrants or options to purchase shares of Plexus Common Stock. SIGA has agreed
to register the shares underlying these warrants under the Securities Act in
accordance with the terms of registration rights agreements, dated as of the
Effective Date, between SIGA and each of the holders of these warrants.
On the Effective Date, Susan K. Burgess, Ph.D., the chief executive
officer and a shareholder of Plexus, became the president of SIGA pursuant to an
employment agreement dated as of the Effective Date between SIGA and Dr. Burgess
(the "Employment Agreement"). In accordance with the terms of the Employment
Agreement, Dr. Burgess shall serve in such capacity for the period beginning on
the Effective Date and ending on December 31, 2005 (or upon earlier termination
pursuant to the terms of the Employment Agreement).
In accordance with the terms of the Asset Purchase Agreement, on the
Effective Date, SIGA's board of directors was reconstituted to include five
members who were directors of SIGA and the three members who were directors of
Plexus, immediately prior to the Effective Date, and one member to be mutually
agreed upon by SIGA and Plexus. In order to accommodate for such reconstitution
of SIGA's board of directors, Gabriel M. Cerrone resigned from his position as a
director of SIGA, effective as of the Effective Date.
The description of the acquisition set forth herein does not purport to be
complete and is qualified in its entirety by reference to the full text of each
of the exhibits filed herewith and incorporated by this reference.
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements. The financial statements required to be included in
this current report on Form 8-K shall be filed by amendment as soon as
practicable, but in any event not later than 60 days after the date that this
current report on Form 8-K is filed.
(b) Pro Forma Financial Information. The financial statements required to be
included in this current report on Form 8-K shall be filed by amendment as soon
as practicable, but in any event not later than 60 days after the date that this
current report on Form 8-K is filed.
(c) Exhibits.
Exhibit
Number Description
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2(a) Asset Purchase Agreement, dated as of May 14, 2003, between
SIGA Technologies, Inc. and Plexus Vaccine Inc.
4(f) Registration Rights Agreement, dated as of May 23, 2003,
between SIGA Technologies, Inc. and Plexus Vaccine Inc.
4(g) Form of Option Agreement, dated as of May 23, 2003, between
SIGA Technologies, Inc. and certain holders of derivative
securities of Plexus Vaccine Inc.
4(h) Form of Warrant, dated as of May 23, 2003, between SIGA
Technologies, Inc. and certain holders of derivative
securities of Plexus Vaccine Inc.
4(i) Form of Registration Rights Agreement, dated as of May 23,
2003, between SIGA Technologies, Inc. and certain holders of
derivative securities of Plexus Vaccine Inc.
4(j) Form of Option Agreement, dated as of May 23, 2003, between
SIGA Technologies, Inc. and certain individuals appointed to
serve on the board of directors of SIGA Technologies, Inc.
10(eee) Employment Agreement, dated as of May 23, 2003, between SIGA
Technologies, Inc. and Susan K. Burgess, Ph.D.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SIGA TECHNOLOGIES, INC.
By: /s/ Thomas N. Konatich
------------------------------------
Thomas N. Konatich
Acting Chief Executive Officer
and Chief Financial Officer
Date: June 9, 2003
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EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
2(a) Asset Purchase Agreement, dated as of May 14, 2003, between SIGA
Technologies, Inc. and Plexus Vaccine Inc.
4(f) Registration Rights Agreement, dated as of May 23, 2003, between
SIGA Technologies, Inc. and Plexus Vaccine Inc.
4(g) Form of Option Agreement, dated as of May 23, 2003, between SIGA
Technologies, Inc. and certain holders of derivative securities of
Plexus Vaccine Inc.
4(h) Form of Warrant, dated as of May 23, 2003, between SIGA
Technologies, Inc. and certain holders of derivative securities of
Plexus Vaccine Inc.
4(i) Form of Registration Rights Agreement, dated as of May 23, 2003,
between SIGA Technologies, Inc. and certain holders of derivative
securities of Plexus Vaccine Inc.
4(j) Form of Option Agreement, dated as of May 23, 2003, between SIGA
Technologies, Inc. and certain individuals appointed to serve on the
board of directors of SIGA Technologies, Inc.
10(eee) Employment Agreement, dated as of May 23, 2003, between SIGA
Technologies, Inc. and Susan K. Burgess, Ph.D.
Exhibit 2(a)
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is made and entered into as of this
14th day of May, 2003 (the "Signing Date"), by and between Plexus Vaccine Inc.,
a California corporation ("Seller"), and SIGA Technologies, Inc., a Delaware
corporation ("Buyer").
RECITALS
A. Seller is a company engaged in the research, development and
design of vaccine products for human and veterinary markets (the "Business").
B. Seller desires to sell and assign to Buyer, and Buyer desires to
purchase and assume from Seller, certain assets, rights and obligations related
to the Business on the terms and subject to the conditions set forth in this
Agreement (the "Acquisition").
C. Seller and Buyer mutually desire that the Acquisition constitute
a reorganization within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the "Code"), pursuant to which Seller sells
substantially all of its assets to Buyer in exchange for the Shares (as defined
herein) and Buyer's assumption of the Assumed Liabilities (as defined herein),
and then Seller promptly dissolves and distributes the Shares to Seller's
stockholders.
D. The parties are signing and entering into this Agreement as of
the Signing Date. The parties contemplate closing the transactions contemplated
by this Agreement after the Signing Date, once all of the conditions set forth
in Article VIII are satisfied.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by each party, the
parties, intending legally to be bound, agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the
meanings set forth in this Article I:
1.1 "Accounts Receivable" means all accounts receivable and notes
receivable and other claims for money or other obligations due to Seller arising
out of the Business.
1.2 "Acquired Assets" means all of the assets, properties,
including, without limitation, Intellectual Property, rights and claims of every
kind and description of Seller used in the Business (other than the Excluded
Assets), whether real or personal, tangible or intangible, vested or unvested,
contingent or otherwise, wherever located and whether now existing or hereafter
acquired, including, without limitation, all goodwill associated therewith, as
the same
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shall exist on the Closing Date, whether or not any of such assets, properties,
rights or claims have any value for accounting purposes or are carried or
reflected on or specifically referred to in Seller's books or financial
statements, which are set forth on Schedule 1.2.
1.3 "Acquisition" has the meaning assigned to it in the preamble.
1.4 "Affiliate" means, with respect to a specified Person, any other
Person which controls, is controlled by or is under common control with such
specified Person. For purposes of the definition of Affiliate, the term
"control" (including the terms "controls", "controlled by", and "under common
control with") means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
1.5 "Agreement" means this Agreement and all Exhibits and Schedules
attached hereto, as the same may be amended, supplemented or modified from time
to time.
1.6 "Assignment and Assumption Agreement" means the assignment and
assumption agreement to be executed by Buyer and Seller at the Closing,
substantially in the form attached hereto as Exhibit A.
1.7 "Assumed Liabilities" means (i) the Leases, (ii) all obligations
of Seller under any Purchased Contract, to the extent that any such obligations
arise or accrue on or after the close of business on the Closing Date, and are
consistent with the representations, warranties and agreements of Seller under
this Agreement, (iii) all liabilities and obligations of Seller identified on
Schedule 1.7(iii), (iv) indebtedness of Seller in the aggregate amount of up to
$100,000 evidenced by bridge notes, which are not convertible into equity
securities of Seller, identified on Schedule 1.7(iv) and (v) all indebtedness of
Seller evidenced by promissory notes dated March 27, 2003 and April 28, 2003 in
favor of Buyer in the principal amount of $50,000 and $20,000, respectively.
Under no circumstances (except as expressly stated in the immediately preceding
sentence) shall the Assumed Liabilities include, without limitation, any debt,
liability (whether absolute, accrued, contingent or otherwise), or other
obligation of or owing by Seller (i) associated with or relating to any Excluded
Liability, (ii) associated with or relating to any compensation or benefits of
any director, officer, employee, former employee, independent contractor, agent,
representative or other personnel of Seller or any Plans or (iii) associated
with or relating to any Excluded Asset.
1.8 "Balance Sheet" means the balance sheet of Seller, prepared in
accordance with GAAP, as of December 31, 2002.
1.9 "Bill of Sale" means the bill of sale and assignment to be
executed by Seller at the Closing, substantially in the form attached hereto as
Exhibit B.
1.10 "Burgess Employment Agreement" means the employment agreement
to be executed by Buyer and Susan Burgess at the Closing, substantially in the
form attached hereto as Exhibit C.
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1.11 "Business" has the meaning assigned to it in the preamble.
1.12 "Buyer" has the meaning assigned to it in the preamble.
1.13 "Buyer Common Stock" means common stock, $.0001 par value per
share, of Buyer.
1.14 "Buyer Options" has the meaning assigned to it in Section 7.2.
1.15 "Buyer Warrants" has the meaning assigned to it in Section 7.3.
1.16 "Closing" has the meaning assigned to it in Section 3.2.
1.17 "Closing Date" has the meaning assigned to it in Section 3.2.
1.18 "COBRA" has the meaning assigned to it in Section 6.9(e).
1.19 "Code" has the meaning assigned to it in the preamble.
1.20 "Confidential Records" has the meaning assigned to it in
Section 7.8(b).
1.21 "Contracts" has the meaning assigned to it in Section 4.12.
1.22 "Copyright" means all copyrights in both published works and
unpublished works, including training manuals, marketing and promotional
materials, internal reports, business plans and any other expressions, mask
works and software and videos, whether registered or unregistered, and all
registrations or applications in connection therewith, whether owned, used,
licensed or leased by Seller as licensee or licensor and that have been used or
are used in or are material to the conduct of the Business as it is currently
conducted or as proposed to be conducted.
1.23 "Employees" has the meaning assigned to it in Section 6.9(a).
1.24 "Environmental Laws" means any and all Laws and other
requirements relating to the environment, natural resources, or public or
employee health and safety.
1.25 "Environmental Costs and Liabilities" means any and all losses,
liabilities, obligations, damages, fines, penalties, judgments, actions, claims,
Liens, costs and expenses (including, without limitation, fees, disbursements
and reasonable expenses of legal counsel, experts, engineers and consultants and
the costs of investigation and feasibility studies and remediation activities)
arising from or under any Environmental Law or order or contract with any
governmental or regulatory authority or Person.
1.26 "ERISA" has the meaning assigned to it in Section 4.17(c).
1.27 "Excluded Assets" has the meaning assigned to it in Section
2.2.
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1.28 "Excluded Liabilities" means any and all debts, Taxes, claims,
Losses, Plans, liabilities (whether absolute, accrued, contingent or otherwise),
Liens and any other obligations of or owing by Seller other than the Assumed
Liabilities. Without limiting the generality of the foregoing, "Excluded
Liabilities" shall include those liabilities listed on Schedule 1.28.
1.29 "Financial Statements" means the (i) balance sheet of the
Business as of December 31, 2002, and (ii) statements of income, cash flow, and
stockholders' equity of the Business for the year ended December 31, 2002, each
of which have been prepared in accordance with GAAP and audited by
PricewaterhouseCoopers LLP.
1.30 "GAAP" means United States' generally accepted accounting
principles, consistently applied.
1.31 "Goodwill" means all goodwill associated with the name, assets,
properties and rights of Seller in the Business.
1.32 "Intellectual Property" means all Marks, Patents, Copyrights,
Licensed Rights, Net Names and Trade Secrets, including, without limitation,
those items identified on Schedules 4.14(b) through 4.14(h).
1.33 "Interim Financial Statements" means (i) the balance sheet of
the Business as of March 31, 2003 and (ii) the statements of income, cash flow,
and stockholders' equity of the Business for the period ending on March 31,
2003.
1.34 "Investor Questionnaire" means the investor questionnaire to be
executed by each stockholder of Seller and delivered to Buyer at the Closing,
substantially in the form attached hereto as Exhibit D.
1.35 Reserved.
1.36 "Law" means, with respect to any Person, any United States
federal, state or local, and any foreign national, state or local, law, statute,
common law, ordinance, code, rule, regulation, order, judgment or decree
applicable to such Person.
1.37 "Lease Assignment" means the assignment and assumption of
subleases agreement to be executed by Buyer and Seller at the Closing, in the
form attached as Exhibit F.
1.38 "Leases" means (i) the sublease agreement dated as of November
1, 2001, between Cisco Systems, Inc. and Seller, relating to office space
located at Rancho Bernardo Financial Plaza, 11770 Bernardo Plaza Court, Suite
375, San Diego, CA 92128, and (ii) the Month to Month Sublease, dated as of June
1, 2001, between QED Bioscience Inc. and Seller, relating to the laboratory
space located at 11021 Via Frontera, Suite 203, San Diego, CA 92127.
1.39 "Liabilities" means all liabilities and obligations, secured or
unsecured, whether absolute, accrued, contingent or otherwise, whether known or
unknown and whether or not due, including liabilities for Taxes.
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1.40 "Licensed Rights" has the meaning assigned to it in Section
4.14(c).
1.41 "Lien" means, with respect to any asset of any Person, any
mortgage, lien, pledge, charge, interest, condition, restriction, security
interest, debt, Tax, claim, option, liability, obligation and/or encumbrance of
any kind (whether matured or unmatured) in respect of such asset.
1.42 "Losses" means any and all damages, claims, losses,
Liabilities, Environmental Costs and Liabilities and expenses (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses).
1.43 "Marks" means all trademarks, service marks, trade names,
common law trademarks, business names (including, without limitation, "Plexus
Vaccines"), Internet domain names, trade dress, slogans, and the goodwill
associated therewith, and all registrations or applications therefor, whether
owned, used, licensed or leased by Seller as licensee or licensor and that have
been used or are used in or are material to the conduct of the Business as it is
currently conducted or as proposed to be conducted.
1.44 "Net Names" has the meaning assigned to it in Section 4.14(h).
1.45 "Officer's Certificate" means the certificate of the president
of Seller, substantially in the form attached hereto as Exhibit G.
1.46 "Option Agreement" means each option agreement to be executed
by Buyer in favor of each Seller Option Holder at the Closing, substantially in
the form attached hereto as Exhibit H.
1.47 "Patents" means all patents, patent applications and inventions
and discoveries that may be patentable, whether owned, used, licensed or leased
by Seller as licensee or licensor and that have been used or are used in or are
material to the conduct of the Business as it is currently conducted or as
proposed to be conducted.
1.48 "Permit" has the meaning assigned to it in Section 4.23.
1.49 "Permitted Liens" means (a) any lien for Taxes which are not
yet due, or (b) any carrier's, warehouseman's, mechanic's, materialman's,
repairman's, landlord's or similar statutory or inchoate lien incidental to the
ordinary conduct of business which involves an obligation that is not past due.
1.50 "Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, governmental body or authority or any other entity.
1.51 "Plans" has the meaning assigned to it in Section 4.17(a).
1.52 "Providing Party" has the meaning assigned to it in Section
6.7.
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1.53 "Purchase Price" has the meaning assigned to it in Section
3.1(b).
1.54 "Purchased Contracts" means all of the Contracts listed or
described on Schedule 4.12(a) other than the Excluded Contracts.
1.55 "Registration Rights Agreement" means the registration rights
agreement to be executed by Buyer and Seller at the Closing, substantially in
the form attached hereto as Exhibit I.
1.56 "Related Documents" means, collectively, all agreements,
instruments and other documents described herein or related hereto, including,
without limitation, the Bill of Sale, the Assumption Agreement, the Secretary's
Certificate, the Registration Rights Agreement and the Lease Assignment.
1.57 "Related Person" has the meaning assigned to it in Section
4.22.
1.58 "Requesting party" has the meaning assigned to it in Section
6.7.
1.59 "Required Consents" has the meaning assigned to it in Section
4.4.
1.60 "Secretary's Certificate" means the certificate of the
secretary of Seller as to incumbency and other matters, substantially in the
form attached hereto as Exhibit J.
1.61 "Securities Act" means the Securities Act of 1933, as amended.
1.62 "Seller" has the meaning assigned to it in the preamble.
1.63 "Seller Common Stock" has the meaning assigned to it in Section
4.1(b).
1.64 "Seller Option Holder" means each of the holders of record, as
of the date of this Agreement, of options to purchase shares of Seller Common
Stock, as set forth on Schedule 7.2.
1.65 "Seller Warrant Holder" means each of the holders of record, as
of the date of this Agreement, of warrants to purchase shares of Seller Common
Stock, as set forth on Schedules 7.3A, 7.3B and 7.3C.
1.66 "Shares" has the meaning assigned to it in Section 3.1(a).
1.67 "Signing Date" has the meaning assigned to it in the
introductory paragraph to this Agreement.
1.68 "Tax Return" means any return, declaration, report, claim or
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto and any amendment thereof.
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1.69 "Taxes" means all taxes, assessments, fees, levies and similar
charges of any kind whatsoever imposed by any United States federal, state or
local taxing authority or any foreign taxing authority, including, without
limitation, interest, penalties and additions thereto.
1.70 "Trade Secret" means all trade secrets, know-how, confidential
information, lists of potential customers, technical information, proprietary
information, technologies, processes and formulae, source code, algorithms,
architecture, structure, display screens and development tools, data, plans,
drawings and blue prints, whether tangible or intangible and whether or however
stored, compiled, or memorialized physically, electronically, photographically,
or otherwise, whether owned, used, licensed or leased by Seller as licensee or
licensor and that have been used or are used in or are material to the conduct
of the Business as it is currently conducted or as proposed to be conducted.
1.71 "Transferred Employees" has the meaning assigned to it in
Section 6.9(a).
1.72 "Warrant Agreement" means each warrant agreement to be executed
by Buyer at the Closing in favor of the Seller Warrant Holders identified on
Schedule 7.3A and in Item 3 on Schedule 7.3C to receive the Buyer Warrants at
the Closing, substantially in the form attached hereto as Exhibit K.
ARTICLE II
PURCHASE AND SALE OF ACQUIRED ASSETS
2.1 Purchase and Sale of Acquired Assets. Subject to and upon the
terms set forth in this Agreement, effective upon the Closing, Seller shall
transfer, convey, assign and deliver to Buyer, free and clear of all Liens other
than the Assumed Liabilities, and Buyer shall purchase and accept from Seller,
all of Seller's right, title and interest in, to and under the Acquired Assets.
At the Closing, Seller shall execute and deliver to Buyer the
Bill of Sale, Assignment and Assumption Agreement, the Lease Assignment, and
such other deeds, endorsements, assignments and other good and sufficient
instruments of conveyance and transfer as Buyer may request to vest in Buyer all
the right, title and interest of Seller, in, to or under any or all of the
Acquired Assets, free and clear of all Liens other than the Assumed Liabilities.
2.2 Excluded Assets. The purchase of the Acquired Assets by Buyer
and sale of the Acquired Assets by Seller contemplated by this Agreement shall
not include any assets not identified on Schedule 1.2 and shall include, without
limitation:
(a) cash, accounts receivable, notes receivable and bank
accounts, solely to the extent necessary to satisfy the obligations or
liabilities of Seller in connection with Seller's liquidation and dissolution in
accordance with Section 6.2;
(b) corporate entity of Seller, and related corporate minute
book, stock book, tax returns and records;
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(c) insurance policies and proceeds therefrom, except to the
extent that such proceeds are for an Acquired Asset or an Assumed Liability;
(d) the Permits identified on Schedule 4.23 as Permits which
either will not be fully transferable by Seller to Buyer or will be terminated
or become terminable as a result of the transactions contemplated hereby; and
(e) all claims, causes of action and choses in action to the
extent (i) related to any Excluded Asset and necessary for Seller to get the
benefit of such Excluded Asset or (ii) available as a defense, counterclaim,
cross-claim, offset or third-party claim in connection with any Excluded
Liability, to the extent necessary to reduce or eliminate such Excluded
Liability.
Such assets shall be referred to as the "Excluded Assets" and shall not
constitute part of the Acquired Assets for any purpose.
2.3 Liabilities. Effective upon the Closing, the Acquired Assets
shall be conveyed to Buyer free and clear of all Liens other than the Assumed
Liabilities. The parties hereto acknowledge that Buyer is not and will not be a
successor-in-interest to Seller and that Buyer will not assume any Lien or any
liability of Seller whatsoever (whether absolute, accrued, contingent or
otherwise) other than the Assumed Liabilities. Buyer will not be required to
defend any suit or claim arising out of any act or omission of Seller. Effective
upon the Closing, subject to the terms hereof, Buyer shall assume all of the
Assumed Liabilities. All of the Excluded Liabilities shall be retained by and
remain obligations of Seller.
ARTICLE III
PURCHASE PRICE; CLOSING; TERMINATION
3.1 Purchase Price. Buyer shall deliver to Seller at the Closing a
stock certificate registered in Seller's name representing 1,950,000 shares of
Buyer Common Stock (the "Shares").
3.2 Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, Buyer shall assume and become responsible for all
of the Assumed Liabilities at the Closing. Buyer will not assume or have any
responsibility, however, with respect to any other obligation or liability of
Seller not included within the definition of Assumed Liabilities.
3.3 Closing. The consummation of the purchase and sale of the
Acquired Assets (the "Closing") shall be held at 4:00 p.m. on the second
business day following the satisfaction (or waiver by the party so entitled) of
all of the conditions set forth in Article VIII or at such other date and time
agreed to by the parties, at the offices of Kramer Levin Naftalis & Frankel LLP,
919 Third Avenue, New York, New York 10022. The date and time at which the
Closing actually occurs is hereinafter referred to as the "Closing Date."
3.4 Termination. This Agreement may be terminated:
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(a) by written notice of Buyer or Seller delivered to the
other party, if the Closing has not occurred by May 30, 2003; or
(b) by written notice of Buyer delivered to Seller, if Seller
delivers to Buyer updated Schedules pursuant to Section 4.28 or Section 6.11 and
any of such updated Schedules are not acceptable to Buyer, in Buyer's sole
discretion.
In the event of termination of this Agreement by either Buyer or Seller as
provided in this Agreement, this Agreement shall forthwith become void (except
as set forth in this Section 3.4, in Section 7.8(b) and in Article X and Article
XII, which shall survive the termination) and there shall be no liability on the
part of Buyer or Seller except for any breach of any of their respective
obligations under Section 7.8(b), Article X and Article XII. Notwithstanding the
foregoing, no party hereto shall be relieved from liability for any material
breach of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to and covenants and agrees with
Buyer, subject to disclosures in the Schedules attached hereto, as follows:
4.1 Organization; Qualification and Capital Structure.
(a) Seller is a corporation duly organized, validly existing
and in good standing under the Laws of the State of California and has all
requisite corporate power and authority to conduct the Business as presently
conducted and to own and lease its properties and assets relating to the
Business. Seller was incorporated in the State of California on April 27, 2001.
Seller is qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the ownership or lease of property
relating to the Business or the conduct of the Business requires such
qualification.
(b) The authorized capital stock of Seller consists solely of
eighty million (80,000,000) shares of common stock, no par value, of Seller
("Seller Common Stock") and twenty million (20,000,000) shares of preferred
stock, no par value, of Seller. Seller has no outstanding shares of such
preferred stock. Seller has only 2,744,000 shares of Seller Common Stock issued
and outstanding. Except as set forth on Schedule 7.2 and Schedules 7.3A, 7.3B
and 7.3C, there are no outstanding or authorized options, warrants, calls,
rights, commitments, conversion rights or agreements of any character whatsoever
to which Seller is a party, or by which Seller is bound, that could require
Seller to issue, deliver, sell or otherwise transfer or offer to sell or
otherwise transfer or cause to be issued, delivered, sold, transferred or
offered for sale or transfer, any shares of capital stock of Seller or
securities convertible into or exchangeable for shares of capital stock of
Seller, or that could require Seller to grant, extend or enter into any such
option, warrant, call, right, commitment, conversion right or agreement. There
are no voting trusts or other agreements or understandings to which Seller is a
party with
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respect to the transfer, voting or registration of the capital stock of Seller.
No shares of capital stock of Seller were issued in violation of any federal or
state securities laws or in violation of the pre-emptive rights of any Person.
4.2 Authorization. Seller has all requisite power and authority to
execute and deliver this Agreement and the Related Documents to which it is a
party and to perform its obligations hereunder and thereunder. The execution,
delivery and performance of this Agreement and the Related Documents to which
Seller is a party have been duly authorized and approved by all necessary
corporate proceedings on the part of Seller. This Agreement and the Related
Documents to which Seller is a party have been duly executed and delivered by
Seller and (assuming that this Agreement and the Related Documents to which
Buyer is a party have been duly authorized, executed and delivered by Buyer)
constitute legal, valid and binding obligations of Seller, enforceable against
Seller in accordance with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium or other laws of general
applicability affecting the rights of creditors and by general equitable
principles.
4.3 No Violations or Conflicts. Neither the execution and delivery
of, or performance under, this Agreement or the applicable Related Documents by
Seller nor the consummation by Seller of the transactions contemplated by this
Agreement or the applicable Related Documents does or will (i) violate any
provision of Seller's organizational or governing documents, (ii) result in a
violation or breach of, or constitute a default or an event of default under,
any indenture, mortgage, bond, contract, license, lease, agreement, Permit,
instrument or other obligation to which Seller is a party or by which any of its
properties or any of the Acquired Assets is bound, (iii) violate any Law, writ,
judgment, injunction or court decree to which Seller or its properties is
subject, or (iv) result in the creation or imposition of any Lien on any
Acquired Asset.
4.4 Consents and Approvals. Except as set forth on Schedule 4.4
(collectively, the "Required Consents"), no consent, approval or authorization
of, or declaration, filing or registration with, any United States federal,
state or local governmental or regulatory agency or authority or any foreign
national, state or local agency or authority or any other Person is required to
be made or obtained by Seller in connection with the execution, delivery or
performance of this Agreement or the applicable Related Documents by Seller. All
of the Required Consents have been obtained prior to the Closing Date and are in
full force and effect on such date.
4.5 Financial Statements. Seller has previously delivered to Buyer
unaudited drafts of the Financial Statements and the Interim Financial
Statements, which Financial Statements are attached hereto as Schedule 4.5(a)
and which Interim Financial Statements are attached hereto as Schedule 4.5(b).
Prior to the Closing, the Financial Statements are to be audited, and the
audited Financial Statements will be attached hereto as the final version of
Schedule 4.5(a). The Financial Statements, once audited, will have been prepared
in accordance with GAAP and fairly present, in all material respects, the
financial position and results of operations of Seller as of the dates and for
the periods presented therein, applied on a consistent basis during the periods
concerned except as otherwise noted therein. Prior to the Closing, the Financial
Statements will be audited by PricewaterhouseCoopers LLP.
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4.6 Assets.
(a) Seller has good and marketable title to all of the
Acquired Assets free and clear of any Lien other than Permitted Liens, excepting
leased assets, as to which Seller has good and marketable title to the lease
interest. The Balance Sheet (as of its date) and the applicable portions of this
Agreement accurately and completely describe the Acquired Assets and the Assumed
Liabilities. Upon consummation of the transactions contemplated hereby, Buyer
will have acquired good and marketable title in and to, or, in the case of
assets which are leased or licensed pursuant to Purchased Contracts, a valid
leasehold interest or license in, each of the Acquired Assets, free and clear of
all Liens other than the Assumed Liabilities. The tangible assets and properties
included in the Acquired Assets, taken as a whole, are in good working order,
reasonable wear and tear excepted and are reasonably suitable for the uses for
which they are currently used.
(b) The Acquired Assets constitute all of the assets used in
the Business, other than the Excluded Assets, and are sufficient for the
continued conduct of the Business after the Closing Date in the same manner as
conducted prior to the Closing Date. The Acquired Assets, taken as a whole,
constitute all the properties and assets relating to or used or held for use in
connection with the Business during the past twelve months (except cash disposed
of, accounts receivable collected, prepaid expenses realized, contracts fully
performed and properties or assets replaced by equivalent or superior properties
or assets, in each case in the ordinary course of business or the Excluded
Assets). There are no material assets or properties used primarily in the
operation of the Business and owned by a third party that will not be leased or
licensed to Buyer under current leases or license agreements.
4.7 Intentionally Omitted.
4.8 Undisclosed Liabilities; Solvency. Seller has no liabilities
(whether absolute, accrued, contingent or otherwise), claims, obligations or
other Liens relating to the Business, except as disclosed on the Balance Sheet,
Schedule 1.7(iii) or Schedule 4.8. Seller is not a party to any bankruptcy
proceeding, whether voluntary or involuntary, actual or threatened, and has not
made an assignment of its assets for the benefit of any creditor or otherwise.
After the consummation of the transactions contemplated hereby, Seller will
remain solvent.
4.9 Absence of Certain Changes. Since the date of the Balance Sheet,
Seller has conducted and operated the Business in the ordinary course consistent
with past practice, and except as set forth in Schedule 4.9, there has not
occurred any of the following:
(a) change, or any event or development involving a
prospective change, in the condition (financial or otherwise), results of
operations, assets, liabilities or reserves of the Business, except for changes
which have not had and could not reasonably be expected to have, individually or
in the aggregate, a material adverse effect;
(b) amendment or termination of, or default by Seller or, to
Seller's knowledge, any other party, under any Contract or any destruction,
damage or other loss to any of the material properties or assets of the
Business, whether or not covered by insurance;
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(c) sale, lease, or other disposition of any properties or
assets related to the Business;
(d) purchase, lease or other acquisition of any properties or
assets related to the Business or other capital expenditures related to the
Business or with respect to the Acquired Assets other than in the ordinary
course of business;
(e) increase in the compensation payable or to become payable
to any of the employees or other personnel of Seller except for normal periodic
increases in the ordinary course of business consistent with past practice to
employees or personnel of Seller;
(f) entering into or amendment of any employment agreement
(except in the ordinary course of business consistent with past practice and for
employment agreements substantially similar to Seller's standard-form employment
agreement);
(g) any material adverse change in its relations with any of
the employees or other personnel of Seller, agents or clients of the Business;
(h) any (A) incurrence, assumption or guarantee by Seller of
any debt for borrowed money; (B) issuance or sale of any securities convertible
into or exchangeable for debt securities of Seller; or (C) issuance or sale of
options or other rights to acquire from Seller, directly or indirectly, debt
securities of Seller or any securities convertible into or exchangeable for any
such debt securities;
(i) any creation or assumption by Seller of any mortgage,
pledge, material security interest or lien or other encumbrance on any asset;
(j) any making of any loan, advance or capital contribution to
or investment in any person other than travel loans or advances made in the
ordinary course of business of Seller;
(k) any transfer or grant of any right to use, sell or license
any of its Intellectual Property;
(l) change in accounting methods or principles or cost
allocation procedures that affect the financial statements of the Business; or
(m) any agreement or commitment to take any action described
in this Section 4.9.
4.10 Conduct of Business. Since January 1, 2002, except as noted in
Schedule 4.9, Seller has conducted the operations and affairs only according to
its ordinary and usual course of business, consistent with past practice. No
part of the Business is or has been operated by any Person other than Seller
since acquisition of the Business by Seller.
4.11 Products; Customers. Seller is a development stage company
engaged in the research, development and design of vaccine products for human
and veterinary markets.
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Seller has not commercialized any products, performed any services or solicited
or had any customers or clients, other than for the research services performed
pursuant to the Contracts.
4.12 Contracts and Commitments. Schedule 4.12(a) sets forth a true,
complete and correct list and description of all agreements, oral or written, to
which, as of the Closing Date, Seller is a party or by which Seller is bound
relating to the Business (collectively, the "Contracts"), other than any
Contract that relates solely to an Excluded Asset. Except as set forth on
Schedule 4.12(b), Seller is not in default or breach of any of the Contracts
and, to the best knowledge of Seller, no other party to any of the Contracts is
in default or breach thereof. Seller has delivered to Buyer a true, complete and
correct copy of each written Contract or a summary thereof if an oral Contract.
Seller has not assigned, delegated or otherwise transferred any of its rights or
obligations with respect to any Contract or any Acquired Asset.
4.13 Litigation. There is no, and has been no, civil, criminal or
administrative action, suit, claim, hearing, investigation or proceeding
pending, or to the best knowledge of Seller, threatened, against Seller (or any
Affiliate, director, officer, employee, agent and representative or other
personnel of Seller), relating to the Business or its personnel or clients, in
any court, by any governmental entity, regulatory or administrative agency or
any other Person or before any arbitrator or other tribunal. Seller is not and
has not been subject to any action, order, writ, judgment, injunction or decree
of any court, governmental entity or administrative or regulatory agency
relating to the Business.
4.14 Intellectual Property.
(a) Neither Seller nor its Affiliates has received any notice
of any judicial, administrative or arbitration proceeding instituted against
Seller or its Affiliates, or of any claim or threatened claim by any Person
against any of them alleging that the conduct of the Business infringes any
patent, trademark, trade name, service mark, copyright or other property right
of any other Person. The Seller and its Affiliates use, market or sell, nor
proposes to use, market or sell, any product or service that violates or would
violate any Intellectual Property of a third party.
(b) The Seller (i) owns all right, title and interest in and
to the Intellectual Property used or held for use in the Business, free and
clear of all Liens, or (ii) licenses or otherwise possesses legally enforceable
rights to use the Intellectual Property used or held for use in the Business.
Except as disclosed on Schedule 4.14(b), Seller has made all necessary filings
and recordations to protect and maintain its interest in the Intellectual
Property owned or controlled by Seller and its Affiliates.
(c) Schedule 4.14(c) sets forth all agreements, memorandums or
other undertakings that grant licenses, sublicenses or other rights of use of
any Intellectual Property owned by a third party and licensed to Seller or its
Affiliates and used or held for use in the Business (the "Licensed Rights").
Such Licensed Rights are valid and authorized by the terms under which Seller or
its Affiliates licenses or otherwise uses such Licensed Rights. Neither Seller
nor its Affiliates are in default in the payment of any royalties, license fees
or other consideration to any owner or licensor of any Licensed Rights used in
or necessary for the
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conduct of the Business as now conducted and as proposed to be conducted or to
any agent or representative of any such owner or licensor by reason of the use
thereof by Seller or its Affiliates nor otherwise are in default in any material
respect in the performance of any of their obligations to any such owner or
licensor, and no such owner or licensor, nor any such agent or representative,
has notified Seller or its Affiliates of any claim of any such default.
(d) Schedule 4.14(d) sets forth all agreements, memorandums or
other undertakings that grant licenses, sublicenses, or other rights of use of
Intellectual Property or the Licensed Rights granted by Seller and its
Affiliates. To the extent Seller holds or controls any such Licensed Rights,
Seller hereby assign all rights and interest in such Licensed Rights to Buyer
and will execute any necessary documentation associated therewith.
(e) (i) Schedule 4.14(e) contains a true, correct and complete
list of all domestic and foreign Patents owned or controlled by Seller or its
Affiliates; (ii) all Patents are in full force and effect; (iii) all prior art
known to Seller or its Affiliates which may be or may have been pertinent to the
examination of any United States patent or patent application listed on Schedule
4.14(e) has been cited to the United States Patent and Trademark Office; (iv)
all Patents are in compliance with formal legal requirements, are subsisting,
and all maintenance fees, annuities and the like have been paid; (v) except as
set forth on Schedule 4.14(e), none of the Patents has been challenged or
threatened in any way by any Person or to the knowledge of Seller infringed, and
none of the products or technology used, sold or licensed or proposed for use,
sale or license by Seller and its Affiliates infringes or is alleged to infringe
any rights of any Person; and (vi) all products covered by the Patents have been
marked with appropriate patent notices.
(f) (i) Schedule 4.14(f) contains a true, correct and complete
list of all domestic and foreign Marks owned or controlled by Seller or its
Affiliates; (ii) all Marks are in full-force and effect; (iii) all Marks are in
compliance with formal legal requirements, are valid and subsisting, and all
maintenance fees, annuities and the like have been paid; (iv) none of the Marks
is infringed or has been challenged or threatened in any way by any Person, and
none of the Marks infringes or is alleged to infringe any trademarks, service
marks, trade names, or trade dress of any other Person; and (iv) all materials
encompassed by the Marks have been marked with appropriate trademark and
registration notices.
(g) (i) Schedule 4.14(g) contains a true, correct and complete
list of all domestic and foreign Copyrights, and applications and registrations
therefore, owned or controlled by Seller or its Affiliates; (ii) all the
Copyrights owned by Seller or its Affiliates, whether or not registered, are in
compliance with formal legal requirements, are valid and enforceable, and all
maintenance fees, annuities and the like have been paid; (iii) none of the
Copyrights is infringed or has been challenged or threatened in any way, and
none of the subject matter of any of the Copyrights infringes or is alleged to
infringe any copyright of any Person or is derivative work based on the work of
any other Person; and (iv) all works encompassed by the Copyrights have been
marked with appropriate copyright notices.
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(h) (i) Schedule 4.14(h) contains a true, correct and complete
list of all Internet domain names of Seller and its Affiliates (the "Net
Names"); (ii) all Net Names have been registered in the name of Seller or its
Affiliates and are in compliance with all formal legal requirements, except as
noted in Schedule 4.14(h); (iii) no Net Name has been or is now involved in any
dispute, opposition, invalidation or cancellation proceeding, and no such action
has been threatened; (iv) no Net Name is infringed or has been challenged or
threatened in any way, and no Net Name infringes, interferes with or is alleged
to infringe or interfere with the trademark, copyright or domain name of any
other Person, except as noted in Schedule 4.14(h); and (v) to the knowledge of
Seller, there is no domain name application pending of any other Person that
would or potentially would interfere with or infringe any Net Name.
(i) The Seller has taken reasonable precautions to protect the
secrecy, confidentiality and value of its Trade Secrets. With respect to each
Trade Secret, the documentation relating to such Trade Secret is current,
accurate and sufficient in detail and content to identify and explain it and to
allow its full and proper use without reliance on the knowledge or memory of any
individual. The Trade Secrets have not been used, divulged or appropriated
either for the benefit of any Person (other than to Seller and its Affiliates)
or to the detriment of Seller or its Affiliates. None of the Trade Secrets is
subject to any adverse claim or has been challenged or threatened in any way.
4.15 Compliance with Laws. Seller is in compliance with and the
Business has been operated in compliance with Seller's organizational and
governing documents and all Laws, including, without limitation, all
Environmental Laws and all rules of the Securities and Exchange Commission, and
any other governmental entity, regulatory or administrative agency or other
Person which regulates any other services rendered by Seller. Seller has not
received notice from any governmental entity, regulatory or administrative
agency or other Person alleging that it is not in compliance with, or in
violation of, any Law or any such rule.
4.16 Properties. Schedule 4.16(a) sets forth a true, complete and
correct list of all of the real property that is leased or subleased by Seller
and used in the Business. Seller enjoys peaceful and undisturbed possession of
all such properties leased to it, and such properties are free and clear of all
Liens. Seller owns no real property used in the Business. Schedule 4.16(b) sets
forth a true, complete and correct list of all leases of personal property used
by Seller in the conduct of the Business or by which any Acquired Asset is
bound. Seller has good and marketable title to the leasehold interests in all
personal property leased by it for use in the Business free and clear of all
Liens. All property included in the Acquired Assets is in good condition,
ordinary wear and tear excepted.
4.17 Employee Benefit Plans; ERISA.
(a) Schedule 4.17(a) sets forth a true, complete and correct
list of all employee benefit plans, programs, policies and arrangements (the
"Plans") that Seller has maintained on behalf of current or former directors,
officers, employees or other personnel of Seller employed in the Business.
15
(b) (i) There has been no prohibited transaction within the
meaning of Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Code, with respect to any of the
Plans; (ii) there is no outstanding liability under Title IV of ERISA with
respect to any of the Plans; (iii) none of the Plans has incurred any
"accumulated funding deficiency" (as defined in Section 302 of ERISA and Section
412 of the Code) whether or not waived, as of the last day of the most recent
fiscal year of each of the Plans ended prior to the date of this Agreement; and
(iv) each of the Plans has been operated and administered in all material
respects in accordance with applicable Laws. Seller has no Plans that are
multiemployer plans within the meaning of Section 3(37) of ERISA.
(c) There are no amendments to any Plan that have been adopted
or approved, nor has Seller undertaken to make any such amendments or to adopt
or approve any new Plan, except for changes which Seller may make as part of its
ordinary business practices that affect its employees generally in the same
manner as they affect employees or personnel of the Business.
4.18 Insurance. Schedule 4.18 sets forth a true, complete and
correct list, and a summary description of the coverage provided thereby, of all
liability insurance policies maintained by Seller or any other Person with
respect to the Business or the Acquired Assets. All of such policies are in full
force and effect. All premiums due on such insurance policies have been paid.
There are no pending claims with respect to Seller or the Acquired Assets under
any such insurance policies and there are no claims as to which the insurers
have notified Seller that they intend to deny liability. There is no existing
default under any such insurance policies.
4.19 Records. The books and records of Seller relating to the
Business are true, complete and correct in all material respects and there have
been no transactions involving Seller and the Business which properly should
have been set forth therein and which have not been accurately so set forth.
4.20 Employees and Consultants.
(a) Schedule 4.20(a) contains a complete and accurate list of
all the employees or other personnel of the Business as of the most recent
practicable date, as specified on such list, showing for each employee or other
personnel of the Business (i) the position held and aggregate annual
compensation for Seller's last fiscal year, such employee or other personnel's
service recognized by Seller for purposes of the Plans (including service with
predecessor employers, if applicable, and any prior unbridged service with
Seller), such employees or other personnel's eligible vacation, and any
employment agreement to which such employee or other personnel is a party, (ii)
whether such employees or other personnel is actively at work as of such date,
(iii) if such employee or other personnel is not actively at work as of such
date, the nature of his or her absence (e.g., vacation, illness, short-term
disability or leave of absence under the Family and Medical Leave Act) and his
or her expected or required date of return to active service, and (iv) whether
such employee or other personnel has executed Seller's standard form employment
agreement or any other agreement with Seller or in connection with the Business.
None of the employees or other personnel of the Business is covered by any
union, collective bargaining or other similar labor agreements.
16
(b) None of the employees or other personnel of the Business
is covered by any union, collective bargaining or other similar labor agreement,
and Seller is under no obligation to negotiate any such agreement with respect
to any such individuals. As related to the Business, there is not presently
pending or existing, and to Seller's knowledge there is not threatened, (i) any
strike, or material slowdown, picketing work stoppage or other material labor
dispute, or (ii) any application for certification of a collective bargaining
agent. As related to the Business, (A) no labor organization or group of
employees of Seller has made a pending demand for recognition or certification,
and there are and have been no representation or certification proceedings or
petitions seeking a representation proceeding, with the National Labor Relations
Board or any other labor relations tribunal or authority, nor have any such
demands, proceedings or petitions been brought or filed or threatened to be
brought or filed within the past five years, and (B) there have not been at any
time within the last five years, any actual or, to Seller's knowledge, any
threatened organizing activities, strikes, work stoppages, slowdowns, lockouts,
arbitrations, grievances, or other material labor disputes against or involving
Seller.
(c) Seller is in compliance with all applicable Laws
(including any legal obligation to engage in affirmative action), agreements and
contracts relating to employment practices, terms and conditions of employment,
and the employment of former, current, and prospective employees, independent
contractors and "leased employees" (within the meaning of section 414(n) of the
Code) of the Business including all such Laws, agreements and contracts relating
to wages, hours, collective bargaining, employment discrimination, immigration,
disability, civil rights, fair labor standards, occupational safety and health,
workers' compensation, pay equity, wrongful discharge and violation of the
potential rights of such former, current, and prospective employees, independent
contractors and leased employees, and has timely prepared and filed all
appropriate forms (including Immigration and Naturalization Service Form I-9)
required by any relevant governmental authority. Seller is not engaged in any
unfair labor practice.
(d) No notice has been received by Seller of any complaint
filed against Seller claiming that Seller has violated any applicable employment
standards, human rights or other labor Laws or any complaints or proceedings of
any kind involving the Business or, to the knowledge of Seller, against any of
the employees of the Business or threatened to be filed against Seller before
any federal, state, local or foreign agency or labor relations board, including
without limitation the National Labor Relations Board and the Equal Employment
Opportunity Commission. No notice has been received by Seller of the intent of
any federal, state, local or foreign agency responsible for the enforcement of
labor or employment laws to conduct an investigation of Seller, and, to the
knowledge of Seller, no such investigation is in progress.
(e) There are no outstanding orders or charges against Seller
under any occupational health or safety legislation and, to the knowledge of
Seller, none have been threatened. All material levies, assessments and
penalties made against Seller pursuant to all applicable workers compensation
legislation as of the date hereof have been paid by Seller and Seller has not
been reassessed under any such legislation.
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(f) Seller has not made any statements or representations or
distributed any written material to any employees of the Business regarding
continued employment subsequent to the Closing.
(g) Seller represents that it has paid or made provision for
the payment of all amounts of salaries, commissions, bonuses, incentives and
other compensation, all benefits, including without limitation all accrued
vacation time, and all other current liabilities that are payable or required to
be paid to any employees or other personnel of the Business prior to the Closing
or in respect of services rendered to Seller as of the Closing. Buyer shall have
no responsibility or liability to any of Seller's employees, consultants, or
agents for services rendered to Seller at any time, including without limitation
prior to the Closing, regardless of whether such person subsequently becomes
employed by or otherwise associated with Seller.
4.21 Taxes. All Tax Returns required to be filed by or on behalf of
Seller have been timely filed, and all such Tax Returns are complete and
accurate. All Taxes owed by Seller for periods through the Closing Date, whether
or not shown on any Tax Return, have been paid in full. Seller is not currently
the beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made by any authority in any jurisdiction where Seller does
not file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Liens for Taxes on any of the Acquired Assets. Seller
has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any third party. Seller has properly
collected and remitted all required sales Taxes. There is no audit, examination,
deficiency, or refund litigation pending or threatened with respect to any Taxes
owed by Seller. All Taxes due with respect to completed and settled examinations
or concluded litigation relating to Seller have been paid in full. Seller has
not executed an extension or waiver of any statute of limitations on the
assessment or collection of any Tax that is currently in effect. No rulings have
been issued by or agreements entered into with any relevant governmental tax
authority with respect to Seller. Seller is not a party to any Tax allocation or
sharing agreement and has no liability for the Taxes of any other Person.
4.22 Relationships with Related Persons. No Affiliate, director,
officer, employee, agent, representative or other personnel of Seller, nor any
spouse or child or other family member of any of them, or any Person associated
with any of them (each of the foregoing, a "Related Person"), has any interest
in any assets or properties used in or pertaining to the Business, except as
disclosed in Schedule 4.22. No Related Person has owned, directly or indirectly,
and whether on an individual, joint or other basis, any equity interest or any
other financial or profit interest in a Person that has (i) had business
dealings with Seller or (ii) engaged in competition with Seller, except as
disclosed in Schedule 4.22. Except with respect to employment and compensation
arrangements with employees in the ordinary course of business which are
otherwise disclosed hereunder, no Related Person is a party to any contract,
agreement or arrangement with, or has any claim or right against, or owes any
amounts to, Seller. All loans, payables and other amounts due to or from a
Related Person and Seller and/or its Affiliates are listed in Schedule 4.22.
4.23 Permits. Schedule 4.23 sets forth a true, complete and correct
list of all approvals, permits, certificates, qualifications, authorizations,
licenses, franchises, consents,
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orders and registrations of all United States federal, state and local, and all
foreign national, state and local, governmental or regulatory agencies and
authorities and any other governmental entities or other Person which are
necessary for Seller to conduct the Business (collectively the "Permits"). The
Permits are valid and in full force and effect. Except as disclosed on Schedule
4.23, the Permits are fully transferable by Seller to Buyer and none of the
Permits will be terminated or become terminable as a result of the transactions
contemplated hereby.
4.24 Subsidiaries. Seller does not directly or indirectly own nor
has it made any investment in any of the capital stock of, or any other
proprietary interest in, any other Person, other than Plexus Denmark ApS, a
Denmark corporation and wholly-owned subsidiary of Seller, which has no
significant assets, no liabilities and no operations.
4.25 Brokers and Finders. No broker or finder has acted for Seller
or its Affiliates, directors, officers, employees, agents, representatives and
other personnel in connection with this Agreement or any Related Document or the
transactions contemplated hereunder or thereunder and no broker or finder
retained by Seller or its Affiliates, directors, officers, employees, agents,
representatives or other personnel is entitled to any brokerage or finder's fee
with respect to this Agreement or any Related Document or such transactions.
4.26 Disclosure. No representation or warranty by Seller contained
in this Agreement or any Related Document or any statement or certificate
furnished by Seller to Buyer or its representatives in connection herewith or
therewith or pursuant hereto or thereto contains any untrue statement of a
material fact, or omits to state any material fact required to make the
statements herein or therein contained not misleading or necessary in order to
provide a prospective purchaser of the Acquired Assets or the Assumed
Liabilities with adequate information as to Seller and its properties, assets,
liabilities, business, condition and prospects, and Seller has disclosed to
Buyer in writing all material adverse facts known to it relating to the same.
There is no fact (other than matters of a general economic or political nature
which do not affect the Business uniquely) known to Seller which might
reasonably be expected to have a material adverse effect on the properties,
assets, liabilities, business or condition of Seller relating to the Business.
All projections, forecasts and other forward looking information furnished to
Buyer by or on behalf of Seller were prepared in good faith and based upon
reasonable estimates and the facts and circumstances then known to Seller and
nothing has come to the attention of Seller which would cause it to change any
such projections, forecasts or other forward looking information.
4.27 Investment Representations.
(a) Seller is acquiring the Shares for its own account, and not for
any other Person, for investment only and with no intention of distributing or
reselling (and Seller will not distribute or resell) such Shares or any part
thereof or interest therein in any transaction that would violate the
registration requirements of the securities laws of the United States, or any
state or non-U.S. jurisdiction, without prejudice, however, to the rights of
Seller at all times to sell or otherwise dispose of all or any part of its
Shares under an effective registration statement or applicable exemption from
registration under the Securities Act and any applicable state securities law.
Seller has no contract, undertaking, agreement or arrangement with any Person to
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sell, transfer or pledge to such Person its Shares, any interest therein, or any
part thereof, and Seller has no present plans to enter into any such contract,
undertaking, agreement or arrangement. Notwithstanding the foregoing, and as an
exception to the foregoing, and as contemplated by Recital C and Section 6.2,
Seller will distribute the Shares to Seller's stockholders.
(b) Seller is either (i) an accredited investor as that term is
defined in Rule 501 under the Securities Act, or (ii) has, either alone or with
its purchaser representative or representatives as that term is defined in Rule
501 under the Securities Act, such knowledge and experience in financial and
business matters that Seller is capable of evaluating the merits and risks of an
investment in Buyer Common Stock.
(c) Seller understands that the Shares have not yet been registered
under the Securities Act. Seller is fully aware of the restrictions on sale,
transferability and assignment of Shares as set forth in the certificates
representing the Shares referred to in Section 4.27(d) below, and that Seller
must bear the economic risk of Seller's investment for an indefinite period of
time. Seller has no need for any liquidity in its investment for an indefinite
period of time, and is able to bear the economic risk of losing its entire
investment.
(d) Seller agrees that, so long as required by law, certificates
evidencing the Shares and any securities issued in exchange for or in respect
thereof shall bear a legend to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
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 OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND SUCH STATE SECURITIES LAWS."
4.28. Updates to Schedules. Prior to the Closing Date, Seller will
update the Schedules to identify any new information applicable to the foregoing
representations, which updated Schedules will be attached hereto as the final
version thereof; provided, however, that if such updated Schedules are not
acceptable to Buyer, in Buyer's sole discretion, Buyer shall have the right to
terminate this Agreement in accordance with Section 3.4(b).
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to and covenants and agrees with Seller as
follows:
5.1 Organization and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware and has all requisite corporate power and authority to conduct its
business as presently conducted and to own and lease its properties and assets.
5.2 Authorization. Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and the Related Documents to
which it is a party and to perform its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and the Related Documents
to which Buyer is a party have been duly authorized and approved by all
necessary corporate proceedings on the part of Buyer. This Agreement and the
Related Documents to which Buyer is a party have been duly executed and
delivered by Buyer and (assuming that this Agreement and the Related Documents
to which Seller is a party have been duly authorized, executed and delivered by
Seller) constitute the legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws of general applicability affecting the rights of creditors and by general
equitable principles.
5.3 No Violations or Conflicts. Neither the execution and delivery
of, or performance under, this Agreement or the applicable Related Documents by
Buyer nor the consummation by it of the transactions contemplated by this
Agreement or the applicable Related Documents does or will (i) violate any
provision of its organizational or governing documents, (ii) result in a
violation or breach of, or constitute a default or an event of default under,
any indenture, mortgage, bond, contract, license, lease, agreement, permit,
instrument or other obligation to which it is a party or by which any of its
assets is bound, or (iii) violate any Law, writ, judgment, injunction or court
decree to which it or its properties is subject.
5.4 Consents and Approvals. No consent, approval or authorization
of, or declaration, filing or registration with, any United States federal,
state or local governmental or regulatory agency or authority or any foreign
national, state or local governmental or regulatory agency or authority is
required to be made or obtained by Buyer in connection with its execution,
delivery or performance of this Agreement or the applicable Related Documents.
5.5 Brokers and Finders. No broker or finder has acted for Buyer or
its Affiliates in connection with this Agreement or any Related Documents or the
transactions contemplated hereunder or thereunder and no broker or finder
retained by Buyer or its Affiliates is entitled to any brokerage or finder's fee
with respect to this Agreement or any Related Documents or such transactions.
5.6 Disclosure. The representations and warranties of Buyer
contained herein, when read together with Buyer's annual report on Form 10-K for
the year ended December 31,
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2002, do not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
ARTICLE VI
COVENANTS
6.1 Cessation of Business. From and after the Closing, Seller shall
cease to conduct the Business.
6.2 Distribution of the Shares. As soon as practicable after the
Closing, Seller shall distribute the Shares received by it pursuant to Section
3.1(a) to its stockholders in liquidation and dissolution of Seller. Buyer
hereby consents to a transfer of the Shares (and rights under the Registration
Rights Agreement) to Seller's stockholders upon the liquidation and dissolution
of Seller pursuant to this Section 6.2.
6.3 Performance of Excluded Liabilities. Seller shall timely pay or
perform, as applicable, all liabilities and obligations that constitute Excluded
Liabilities prior to its liquidation and dissolution in accordance with Section
6.2.
6.4 Provision of Records. Seller shall arrange as soon as
practicable following the Closing Date, to the extent not previously delivered
in connection with the transactions contemplated herein, for transportation, at
Buyer's cost, to Buyer of the records in the possession of Seller which are part
of the Acquired Assets, including, without limitation, all agreements,
litigation files, filings with governmental agencies relating to the Acquired
Assets and all employment, independent contractor, personnel and payroll records
of any individual employed by or otherwise associated with Seller at the Closing
Date.
6.5 Use of Name. Following the Closing Date, Seller shall not use
any corporate, trade, or service name including the words and marks "Plexus
Vaccines" or any confusingly similar words, other than in connection with
Seller's liquidation and dissolution.
6.6 Receipt of Property Relating to Acquired Assets. If Seller or
any of Seller's Affiliates, or any other Person acting for or in concert with
any of the foregoing Persons, shall receive any money, check, note, draft,
instrument, payment or other property relating to or as proceeds of the Acquired
Assets or the Assumed Liabilities or any part thereof, each such Person shall
receive all such items in trust for, and as the sole and exclusive property of,
Buyer and, immediately upon receipt thereof, shall notify Buyer in writing of
such receipt and shall remit the same (or cause the same to be remitted) in kind
to Buyer in the manner specified by Buyer.
6.7 Mutual Cooperation. After the Closing Date, Seller and Buyer
will use their reasonable efforts to provide to the other party (the "Requesting
Party") such records and information and to make available to the Requesting
Party such employees or other personnel, in each case as may be reasonably
requested in writing by the Requesting Party, for the purpose of
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assisting the Requesting Party in responding to governmental inquiries, making
required governmental filings or defending or prosecuting any action or other
proceeding involving any Person other than the party providing such information
or records or making available such employees or other personnel (the "Providing
Party"); provided, however, that no Providing Party shall be required to (i)
incur any out-of-pocket expenses, (ii) provide information, records or employees
or other personnel under circumstances which the Providing Party believes in its
sole reasonable determination may expose it to liability to any Person or may
prejudice any commercial, legal or other interest of the Providing Party, or
(iii) take any action that in the Providing Party's sole reasonable
determination unreasonably interferes with its business.
6.8 Insurance Tails. Seller may elect, at its discretion, to obtain
such "tail insurance" coverage as Seller deems appropriate.
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6.9 Employment Matters.
(a) Except as provided otherwise in a written agreement,
including, without limitation, the Burgess Employment Agreement, Buyer shall be
under no obligation to employ or continue to employ any individual for any
period. In addition to Susan Burgess, it is understood and agreed among the
parties that Buyer will offer employment effective as of the close of business
on the Closing Date to only those other employees of Seller set forth on
Schedule 6.9(a) (the "Employees") in connection with the purchase of the
Acquired Assets, subject to the satisfaction of the conditions set forth in
Buyer's offer letters, including without limitation, Buyer's completion of
background checks and other pre-employment procedures with respect to such
employees and such employees' execution of the relevant documents relative to
such employees' respective positions with Buyer. Buyer's employment of the
Employees shall be on an "at-will" basis and on such other terms and conditions
of employment as Buyer shall offer in its sole discretion. Those Employees who
accept Buyer's offer of employment and who commence working with Buyer shall be
referred to hereinafter as the "Transferred Employees."
(b) With respect to each Transferred Employee, Seller hereby
waives and releases each such individual from any and all contractual, common
law or other restrictions enforceable by Seller on the employment, activities or
other conduct of such individuals after their termination of employment with
Seller (other than the obligation not to disclose confidential information of
Seller and its Affiliates).
(c) Except as set forth on Schedule 1.7(iii), and in Section
7.2, Seller shall be solely responsible for any and all liabilities in respect
of employees and other personnel of the Business, including the Transferred
Employees, and their beneficiaries and dependents, relating to or arising out of
or in connection with (i) the employment or the actual or constructive
termination of employment of any employee of the Business by Seller (including,
without limitation, in connection with the consummation of the transactions
contemplated by this Agreement), (ii) the participation in or accrual of
benefits or compensation under, or the failure to participate in or to accrue
compensation under, any Plan or Plans and (iii) accrued but unpaid salaries,
wages, bonuses, incentive compensation, vacation or sick pay or other
compensation or payroll items (including, without limitation, deferred
compensation). Seller shall be solely responsible for meeting and Buyer shall
have no liability in respect of any obligations under Part 6 of Subtitle B of
Title I of ERISA and Section 4980B of the Code in respect of each of Seller's
employees who incur a "qualifying event" on or before the Closing Date or as a
result of the transactions contemplated hereby.
(d) Except as set forth on Schedule 1.7(iii), and in Section
7.2, all retirement, severance, deferred compensation, incentive, stock option,
vacation, bonus, unemployment, partnership or other payments, distributions or
benefits payable to or accrued in favor of directors, officers, employees,
independent contractors, agents, representatives or other personnel of Seller on
or prior to the Closing Date, whether or not pursuant to any Plans and whether
or not such directors, officers, employees, independent contractors, agents,
representatives or other personnel become employees, personnel, partners or
principals of Buyer, shall be Excluded Liabilities and remain the sole
obligations of Seller. Except as set forth on Schedule 1.7(iii), and in Section
7.2, Buyer shall have no obligation to pay any retirement,
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severance, deferred compensation, incentive, stock option, vacation, bonus,
unemployment, partnership or other payments, distributions or benefits that the
Employees or any other Person may have accrued up to and including the Closing
Date as a director, officer, employee, independent contractor, agent,
representative or other personnel of Seller or otherwise.
(e) Seller agrees to cause Administaff Companies II, L.P. to
provide coverage to qualified beneficiaries who are already receiving health
and/or dental coverage on the Closing Date under Section 4980B of the Code
(hereinafter "COBRA") to the extent required under COBRA. Seller agrees to cause
Administaff Companies II, L.P. to offer health and/or dental coverage to the
extent required under COBRA to individuals whose qualifying event occurs before
or on the Closing Date. Buyer agrees to offer health and/or dental coverage as
required under COBRA to Transferred Employees whose qualifying event occurs
after the Closing Date to the extent required under COBRA.
6.10 Confidentiality Agreements. Seller or its representatives or
Affiliates have entered into various confidentiality agreements. To the extent
not prohibited thereunder, Seller shall deliver to Buyer copies of any such
agreements. Prior to the Closing, Seller shall not terminate, amend, modify or
supplement, in each case adversely to Buyer's interest, or grant any consent or
waiver under or with respect to, any of such confidentiality agreements without
Buyer's prior written consent. Seller shall, at the request and expense of
Buyer, promptly enforce any remedies against breaches of such confidentiality
agreements to the extent such breaches relate to or affect the Business and
Buyer shall have the right, at its own expense, to participate in any such
enforcement actions.
6.11 Updated Information. If either party becomes aware, prior to
the Closing, of any information which is inconsistent with the information
represented by Seller in this Agreement and the Schedules, the party shall so
inform the other party, and the Schedules shall be updated accordingly and
attached hereto as the final version thereof; provided, however, that if such
updated Schedules are not acceptable to Buyer, in Buyer's sole discretion, Buyer
shall have the right to terminate this Agreement in accordance with Section
3.4(b).
6.12 Conduct of Business Pending the Closing. (a) From the date
hereof through the Closing Date or the earlier termination of this Agreement,
except as may be expressly permitted or contemplated by this Agreement, or the
Schedules attached hereto, or as otherwise agreed to in writing by Buyer, Seller
shall cause the Business to be conducted in the usual, regular and ordinary
course of business, consistent with past practice, and shall use its diligent
efforts to preserve intact the Business, keep available the services of its
employees and preserve its relationships with clients, suppliers, licensees,
licensors, distributors, agents and others having business dealings with the
Business. Without limiting the generality of the foregoing, without the prior
written consent of Buyer, except as expressly permitted or contemplated by this
Agreement, or the Schedules attached hereto, during the period from the date
hereof to the Closing Date or the earlier termination of this Agreement, Seller:
(i) shall not acquire or agree to acquire any business
related to the Business;
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(ii) shall not sell (including by sale-leaseback), lease,
transfer, license (whether on an exclusive or
non-exclusive basis), mortgage or otherwise encumber or
subject to any Lien, any Acquired Assets or interests
therein;
(iii) shall maintain in full force and effect policies of
insurance covering the Business;
(iv) shall not incur or permit the incurrence of any
liability related to the Business that would constitute
an Assumed Liability, other than for accruals in the
ordinary course of business;
(v) shall not enter into or amend any employment, severance,
special pay arrangement with respect to termination of
employment or other arrangement or agreement with any
executive officers, managing directors, directors,
managers or associates;
(vi) shall not increase any salaries or other compensation
payable to any managing directors, directors, managers
or associates except in the ordinary course of business
and consistent with past practice or to any additional
managing directors, directors, managers, employees or
consultants, except in the ordinary course of business
and consistent with past practice;
(vii) shall not adopt, enter into or amend, or become
obligated under, any new, bonus, profit sharing,
compensation, collective bargaining, stock option,
pension, retirement, deferred compensation, health care,
employment or other employee benefit plan, agreement,
trust, fund or arrangement for the benefit or welfare of
any employee or retiree, except as required to comply
with changes in applicable law occurring after the date
hereof;
(viii) shall not enter into any contract, license or other
agreement that contains any provision that, as a result
of the consummation of the transactions contemplated by
this Agreement, would (assuming that the other party's
consent or approval is not obtained, to the extent
required) result in any penalty, additional payments or
forfeiture that would be payable or sufferable by Buyer
at or after the Closing Date;
(ix) shall not make any single new commitment or increase any
single previous commitment for capital expenditures for
the Business in an amount exceeding $10,000;
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(x) shall not accelerate or delay the sale of the services
of the Business, except as may be necessary in the
ordinary course of business in arm's-length third party
transactions;
(xi) shall not sell, assign, transfer, license, abandon or
convey any of the Intellectual Property except in the
ordinary course of business consistent with past
practice in arm's-length third party transactions;
(xii) except as would not adversely affect Buyer, shall not
change any method of Tax accounting, make any material
Tax election, file any Tax Return other than in a manner
consistent with past practice, or settle any material
Tax Claim;
(xiii) shall use reasonable efforts (A) to cause to be
satisfied the conditions set forth in Article VIII which
are under the control of Seller, and (B) shall not take
actions which cause the representations set forth in
Article IV to change in any material adverse way,
subject however as to both (A) and (B), Seller remains
free to make whatever reasonable business decisions
Seller deems to be necessary or appropriate under the
applicable circumstances for the ongoing business
operations and survival of Seller;
(xiv) shall not waive or compromise any material claim or
right or fail to renew any Permit; and
(xv) shall not authorize any of, or commit or agree to take
any of, the foregoing actions.
(b) Seller will promptly advise Buyer in writing of (i) any event
known to Seller which would render any representation or warranty of Seller
contained in this Agreement or any Related Document, if made on or as of the
date of such event or the date of the Closing, untrue or inaccurate in any
respect, (ii) any change, condition or event that has or could reasonably be
expected to have material adverse effect or (iii) any failure of Seller to
comply with or satisfy in any respect any covenant, condition or agreement to be
complied with or satisfied hereunder. Notwithstanding the disclosure to Buyer of
any matter pursuant to this Section 6.12(b), Seller shall not be relieved of any
liability for, nor shall the providing of such information by Seller to Buyer be
deemed a waiver or, (A) the breach of any representation, warranty, covenant or
agreement of Seller contained in this Agreement or any Related Document or (B)
the related indemnification obligations of Seller under Section 10.2.
(c) Seller, on the one hand, and Buyer, on the other hand, will
promptly give notice to the other upon becoming aware that any action is pending
or threatened by or before any governmental authority, in each case with respect
to the transactions contemplated by this Agreement or any Related Document.
Seller, on the other hand, and Buyer, on the other hand,
27
(i) will cooperate with each other in connection with the prosecution,
investigation or defense of any such action, (ii) will supply promptly all
information reasonably and legally requested by the other, by any such
governmental authority or by any party to any such action and (iii) will each
use their reasonable efforts to cause any such action to be determined as
promptly as practicable and in a manner which does not impact adversely on, and
is consistent with, the transactions contemplated by this Agreement and the
Related Documents.
6.13 Cooperation. Subject to compliance with applicable law, from
the date hereof through the Closing Date or the earlier termination of this
Agreement, Seller shall confer on a regular and frequent basis with one or more
representatives of Buyer to report operational matters of materiality and the
general status of ongoing operations of the Business. During the period from the
date hereof to the Closing Date or the earlier termination of this Agreement,
Buyer shall be entitled to have one or more representatives present during the
hours that business is conducted at each of the properties of Seller where the
Business is conducted.
6.14 No Negotiation or Solicitation. From the date hereof through
the Closing Date, Seller will not, and Seller will cause Seller's officers,
directors, employees, representatives and agents not, and will use best efforts
to cause its Affiliates not, to, directly or indirectly, solicit or negotiate
with, or provide any nonpublic information relating to either Seller or afford
access to the properties, books or records of Seller to any third party that may
be considering an acquisition of either the Business or any substantial part of
its assets, or otherwise cooperate in any way with or assist or participate in,
or facilitate or encourage any attempt by any person to do or seek any of the
foregoing. Seller represents and warrants that it is not currently engaged in
any of the foregoing except with Buyer. Seller shall immediately (but in any
event within 24 hours) notify Buyer (i) after receipt of any offer or indication
that any person is considering making an offer for any such acquisition, which
notice shall include the terms and conditions of such offer or indication and
the identity of such person and (ii) upon receipt of any request for nonpublic
information relating to Seller or for access to the properties, books or records
of Seller from any person that may be considering any such acquisition.
6.15 Access to Information. Upon reasonable notice Seller shall
afford to Buyer and its partners, principals, members, stockholders, officers,
directors, employees, accountants, counsel, financial advisors and other
representatives, access during normal business hours throughout the period prior
to the Closing Date, or the earlier termination of this Agreement, to all of the
properties, books and records relating to the Acquired Assets, the Assumed
Liabilities, the Business and all matters pertaining thereto and, during such
period, Seller shall furnish promptly to Buyer all information concerning the
Acquired Assets, the Assumed Liabilities, the Business and all matters
pertaining thereto as Buyer may reasonably request. Seller will provide or cause
to be provided to Buyer, at Buyer's expense, such copies or extracts of
documents and records related to the Acquired Assets, the Assumed Liabilities,
the Business and all matters pertaining thereto as Buyer may reasonably request.
6.16 Consents. Seller shall use its diligent efforts to obtain
consents of all governmental entities and other persons necessary for the
consummation of the transactions contemplated by this Agreement.
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6.17 Consummation of Transaction, Consents, Approvals and Filings.
Subject to the terms and conditions of this Agreement, each of the parties
hereto shall use all reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using reasonable efforts
to obtain all necessary or appropriate waivers, consents and approvals, and
effecting all necessary registrations and filings. Buyer shall make or cause to
be made all filings and submissions under laws and regulations applicable to
Buyer, if any, as may be required for the consummation of the transactions
contemplated by this Agreement. Seller shall make or cause to be made all such
other filings and submissions under laws and regulations applicable to Seller,
if any, as may be required for the consummation of the transactions contemplated
by this Agreement. Buyer, on the one hand, and Seller, on the other, shall
coordinate and cooperate in exchanging such information and reasonable
assistance as may be requested by either of them in connection with the filings
and submissions contemplated by this Section 6.17. Buyer, on the one hand, and
Seller, on the other, shall each promptly provide the other or their respective
counsel with copies of all filings made by such party with any governmental
entity in connection with this Agreement and the transactions contemplated
hereby.
ARTICLE VII
CERTAIN OTHER COVENANTS
7.1 Board of Directors. Effective upon the Closing, the Board of
Directors of Buyer shall consist of the following individuals: five directors
nominated by Buyer and three directors nominated by Seller (namely, Charles
Canter, Bernard L. Kasten and Roger Brent) and an additional director to be
mutually agreed upon. Effective upon Closing, each of the three directors
nominated by Seller will receive options to purchase 100,000 shares of Buyer
Common stock at an exercise price per share equal to the closing price of one
share of Buyer Common Stock on the Nasdaq SmallCap Market on the Signing Date.
7.2 Issuance of Options. At the Closing, Buyer shall issue options
to purchase an aggregate of 171,250 shares of Buyer Common Stock at an exercise
price per share equal to the average closing price of one share of Buyer Common
Stock on the Nasdaq SmallCap Market on the Signing Date and the two immediately
previous days thereto to the Seller Option Holders pursuant to Option Agreements
(collectively, the "Buyer Options"). The amount of shares underlying each Buyer
Option granted to each Seller Option Holder shall be as set forth on Schedule
7.2. For purposes of clarity, each Seller Option Holder set forth on Schedule
7.2 shall receive a Buyer Option to purchase one share of Buyer Common Stock for
each four shares of Seller Common Stock underlying such Seller Option Holder's
options to purchase shares of Seller Common Stock.
7.3 Issuance of Warrants. At the Closing, Buyer shall issue warrants
to purchase an aggregate of 19,700 shares of Buyer Common Stock at an exercise
price equal to the average closing price of one share of Buyer Common Stock on
the Nasdaq SmallCap Market on
29
the Signing Date and the two immediately previous days thereto to the Seller
Warrant Holders as so listed in Schedule 7.3A and Item 3 of Schedule 7.3C
pursuant to Warrant Agreements (collectively, the "Buyer Warrants"). The amount
of shares underlying each Buyer Warrant granted to each Seller Warrant Holder
shall be as set forth on Schedule 7.3A and Item 3 of Schedule 7.3C. For purposes
of clarity, each Seller Warrant Holder set forth on Schedule 7.3A and Item 3 of
Schedule 7.3C shall receive a Buyer Warrant to purchase one share of Buyer
Common Stock for each four shares of Seller Common Stock underlying such Seller
Warrant Holder's warrants to purchase shares of Seller Common Stock.
7.4 Sales Taxes. Buyer shall pay for any sales tax, if any, imposed
on the sale and transfer of the Acquired Assets pursuant to this Agreement.
7.5 Intentionally Omitted.
7.6 Tax Consequences. It is intended that the Acquisition shall
constitute a reorganization within the meaning of Section 368(a)(1)(C) of the
Code and that this Agreement shall constitute a "plan of reorganization" for the
purposes of Treasury Regulation Section 1.368-1(c). Each party hereto
acknowledges and agrees that it is solely relying on its own representatives and
advisors with regard to the tax consequences of the Acquisition and not on the
representations of any other party hereto, and that such Person assumes its own
tax risk with respect to the characterization of Acquisition as a reorganization
under the Code. Notwithstanding any provision contained herein to the contrary,
each party hereto (and its employees, representatives and other agents) is
permitted to disclose, without limitation of any kind, the tax treatment and tax
structure of the Acquisition, within the meaning of Treasury Regulation section
1.6011-4, and all materials of any kind that are provided to such party relating
to such tax treatment and tax structure.
7.7 Public Statements. The parties shall consult with each other
prior to issuing any press release or making any public announcement with
respect to this Agreement, or the transactions contemplated hereby (including
the financial terms hereunder), and shall not issue any such press release or
public announcement prior to such consultation or to which the other party shall
reasonably object, except as may be required by law or judicial process. Seller
shall not make any statement to, or otherwise communicate (whether orally or in
writing) with, any employee or customer of, or supplier to, Seller, regarding
this Agreement, the transactions contemplated hereby or the conduct of the
Business except for any statement or communication (i) with respect to which
Buyer shall have previously consented or (ii) which shall have been provided to
Seller by Buyer for the express purpose of making a statement to, or otherwise
communicating with, any such employee or customer.
7.8 Proprietary Information, Confidential Records, Intellectual
Property Rights.
(a) Proprietary Information. Seller covenants that it shall
not at any time hereafter, directly or indirectly, use for its own purpose or
for the benefit of any Person other than Buyer at Buyer's request, or disclose,
any proprietary information to any Person, unless such disclosure has been
authorized in writing by Buyer. For purposes of this Agreement,
30
the term "proprietary information" shall include, but is not limited to: (a) the
name and address of any vendor of the Business and any information concerning
the transactions or relations of any vendor with Seller or any of its
Affiliates, directors, officers, employees, agents, representatives or other
personnel; (b) any Intellectual Property, or any information concerning any
Intellectual Property employed by Seller in the Business but not generally known
to its vendors or competitors, or under development by or being tested by Seller
but not at the time offered generally to vendors; (c) any information relating
to business methods, policies or procedures, computer software or systems used
by Seller or Seller's pricing or marketing methods, margins, capital needs or
operating results; (d) any information which is generally regarded as
confidential or proprietary in any business engaged in by Seller in the
Business; (e) any business plans, budgets, advertising or marketing plans
relating to Seller or the Business; (f) any information contained in any written
or oral policies and procedures of Seller used in the Business; (g) any
information belonging to vendors of Seller in the Business or any other Person
which Seller has agreed to hold in confidence in connection with the Business;
(h) proprietary or confidential information of Buyer, including, without
limitation, human resource and employee benefits-related information, made
available to Seller in connection with the evaluation and negotiation of the
transactions contemplated hereby; and (i) all written, graphic and other
material relating to any of the foregoing. Information that is not novel or
copyrighted or patented may nonetheless be proprietary information. The term
"proprietary information" shall not include information generally available to
and known by the public but shall include information which becomes public as a
result of a breach of an obligation of confidentiality by Seller or any of the
Affiliates of Seller.
(b) Confidentiality and Surrender of Records. Seller shall not
at any time directly or indirectly publish, make known or in any fashion
disclose any Confidential Records to, or permit any inspection or copying of
such Confidential Records by, any Person, nor shall Seller retain the same, and
Seller will deliver promptly to Buyer any of the same upon the Closing. For
purposes hereof, "Confidential Records" means all correspondence, memoranda,
files, manuals, books, lists, financial, operating or marketing records,
magnetic tape, or electronic or other media or equipment of any kind which may
be in the possession of Seller or under any of its control or accessible to it
which contain any proprietary information that relates to the Business, the
Acquired Assets or the Assumed Liabilities. All Confidential Records shall be
and remain the sole property of Buyer from and after the Closing.
Notwithstanding the foregoing, Seller may use all of Seller's records and the
information contained therein to prepare Seller's tax returns.
(c) Inventions and Patents. All Intellectual Property,
including without limitation, any methods of operations (including policies,
procedures, products, improvements, software, ideas and discoveries, whether
patentable or copyrightable or not) conceived or made by Seller, either alone or
jointly with others, shall upon the Closing become the sole and exclusive
property of Buyer. Seller will promptly perform all actions reasonably requested
by Buyer to establish and confirm such ownership by Buyer, including, without
limitation, cooperating with and assisting Buyer in obtaining patents,
copyrights, servicemarks and trademarks for Buyer in the United States and in
foreign countries. In the event that Seller fails to take any action requested
by Buyer pursuant to this Section 7.8(c) within ten (10) days of
31
notice from Buyer, Buyer may take such action on behalf of Seller for which
purpose Seller hereby irrevocably appoints Buyer as its attorney-in-fact which
appointment is coupled with an interest. Effective upon the Closing, all right,
title and interest owned or held by Seller or its Affiliates to any and all
Intellectual Property related to or connected with the Business, either alone or
jointly with others, is hereby assigned to and belongs to Buyer.
(d) Certain Permitted Disclosures and Uses. Sections 7.8(a)
and (b) above shall not prevent any disclosure required by law or order of a
court or governmental agency provided that Seller, prior to any such disclosure,
shall give Buyer prompt written notice of any such requirement and shall
cooperate with Buyer in obtaining a protective order or other means of
protecting the confidentiality of all proprietary information and Confidential
Records.
7.9 Further Assurances. At and from time to time following the
Closing, Seller shall, and shall cause its Affiliates, directors, officers,
employees, agents, representatives and other personnel to, execute, deliver,
file and record any and all agreements, instruments, certificates or other
documents and take such other actions as may be reasonably necessary or
desirable to consummate or implement expeditiously the transactions contemplated
by this Agreement. Without limiting any other right or remedy of Buyer, at and
from time to time following the Closing, Seller shall, and shall cause its
Affiliates, directors, officers, employees, agents, representatives and other
personnel, to, in the case of Permits and Purchased Contracts included in the
Acquired Assets (a) which cannot be transferred or assigned effectively without
the consents of other Persons which consents have not been obtained prior to the
Closing, cooperate with Buyer at its request in endeavoring to obtain such
consents promptly, and if any such consent is not obtained, use their
commercially reasonable efforts to secure to Buyer the benefits thereof in some
other manner reasonably acceptable to Buyer or (b) which are otherwise not
transferable or assignable, use their commercially reasonable efforts jointly
with Buyer to secure to Buyer the benefits thereof in some other manner
reasonably acceptable to Buyer.
7.10 Funding. Buyer hereby agrees to use its diligent efforts to
raise at least $750,000 of new equity funding within forty-five (45) days after
the Closing; and Buyer hereby agrees to dedicate, restrict and use at least
$750,000 of its existing funds or new funds to fund the research development and
business operations for the Acquired Assets.
ARTICLE VIII
CONDITIONS
8.1 Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. The respective obligations of each party to
effect the transactions contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) No temporary restraining order, preliminary or permanent
injunction or other order or decree by any court of competent jurisdiction which
prevents the consummation of the transactions contemplated hereby or imposes
material conditions with
32
respect thereto shall have been issued and remain in effect (each party agreeing
to use its reasonable efforts to have any such injunction, order or decree
lifted).
(b) No action shall have been taken, and no statute, rule or
regulation shall have been enacted, by any state or Federal government or
governmental agency which would prevent the consummation of the transactions
contemplated by this Agreement or impose material conditions with respect
thereto.
(c) All consents and approvals of governmental entities
legally required for the consummation of the transactions contemplated by this
Agreement shall have been obtained and be in effect at the Closing Date, except
those for which failure to obtain such consents and approvals would not,
individually or in the aggregate, have a material adverse effect or materially
impair the ability of any party to this Agreement to consummate the transactions
contemplated by this Agreement.
(d) Each party shall have conducted a due diligence
investigation and review of such factual, legal, accounting, environmental,
health and safety, structural, tax and other due diligence that such party deems
relevant, in such party's sole and absolute discretion, for the consummation of
the transactions contemplated hereby, and the results of such investigation and
review shall be satisfactory to such party in its sole and absolute discretion.
8.2 Conditions to Obligations of Seller to Effect the Transactions
Contemplated Hereby. The obligations of Seller to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing Date of the following additional conditions, any of which may be
waived by Seller in its sole discretion:
(a) Buyer shall have performed all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and the
representations and warranties of Buyer contained in this Agreement shall be
true and correct on and as of the Signing Date and the Closing Date, except to
the extent that any such representation or warranty expressly relates to another
date (in which case, as of such date) and Seller shall have received a
certificate signed on behalf of Buyer by an executive officer of Buyer, to such
effect;
(b) Seller shall have received a stock certificate registered
in Seller's name representing the Shares;
(c) Seller shall have received the Assignment and Assumption
Agreement, duly executed by Buyer;
(d) Seller shall have received the Registration Rights
Agreement, duly executed by Buyer;
(e) Seller shall have received the Lease Assignment, duly
executed by Buyer;
33
(f) Susan Burgess and Buyer shall have entered into the
Burgess Employment Agreement;
(g) Buyer shall have issued and delivered the Buyer Options
and the Buyer Warrants as specified on Schedule 7.2 and Schedule 7.3A and Item 3
of Schedule 7.3C;
(h) Buyer shall have made offers of employment to the
employees listed on Schedule 6.9(a);
(i) Seller shall have received approval from more than 50% of
Seller's outstanding shares for the sale of assets specified in this Agreement;
and
(j) Seller shall have received all such other documents and
instruments as Seller may reasonably request or as may be otherwise necessary or
desirable to evidence and effect the assumption by Buyer of the Assumed
Liabilities, duly executed by Buyer.
8.3 Conditions to Obligations of Buyer to Effect the Transactions
Contemplated Hereby. The obligations of Buyer to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing Date of the following additional conditions, any of which may be
waived by Buyer in its sole discretion:
(a) Seller shall have performed all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and the
representations and warranties of Seller contained in this Agreement shall be
true and correct in on and as of the Closing Date, except to the extent that any
such representation or warranty expressly relates to another date (in which
case, as of such date) and Buyer shall have received an Officer's Certificate
signed on behalf of Seller by an executive officer of Seller, to such effect;
(b) The consent or approval of each third party whose consent
or approval shall be required in connection with the transactions contemplated
hereby under any Purchased Contract included in the Acquired Assets shall have
been obtained;
(c) Buyer shall have received the Bill of Sale duly executed
and delivered by Seller;
(d) Buyer shall have received the Assignment and Assumption
Agreement, duly executed by Seller;
(e) Buyer shall have received the Secretary's Certificate,
duly executed by the secretary of Seller;
(f) Buyer shall have received the Registration Rights
Agreement, duly executed by Seller;
(g) Seller shall have received approval from more than 50% of
Seller's outstanding shares for the sale of assets specified in this Agreement;
34
(h) Susan Burgess and Buyer shall have entered into the
Burgess Employment Agreement;
(i) Each person listed on Schedule 6.9(a) shall have accepted
an offer of employment from Buyer;
(j) Seller shall have obtained all Required Consents;
(k) Buyer shall have received an Investor Questionnaire, duly
executed by each stockholder of Seller;
(l) Seller shall have caused the issuance or transfer of the
Permits of Seller to Buyer in form and substance the same as the Permits which
were held by Seller, and Seller shall have given and made all required notices
and reports to the appropriate governmental bodies and Persons with respect to
the Permits that may be necessary for the sale and purchase of the Business and
the ownership, operation and use of the Acquired Assets by Buyer after the
Closing Date;
(m) Buyer shall have received the audited Financial
Statements;
(n) Buyer shall have received the Lease Assignment, duly
executed by Seller;
(o) Each of the Seller Warrant Holders identified on Schedule
7.3B and in Items 1 and 2 of Schedule 7.3C shall have exercised his or her
warrants to purchase shares of Seller Common Stock and shall have converted the
notes identified on Schedule 7.3B into shares of Seller Common Stock.
(p) Seller shall have delivered estoppel certificates, in form
satisfactory to Buyer and its counsel, from the lessor, and any sublessor, with
respect to each Lease, to the extent required under the Leases; and
(q) Buyer shall have received all such other bills of sale,
assignments and other instruments of assignment, transfer or conveyance as Buyer
may reasonably request or as may be otherwise necessary or desirable to evidence
and effect the sale, transfer, assignment, conveyance and delivery of the
Acquired Assets to Buyer and to put Buyer in actual possession or control of the
Acquired Assets, duly executed by Seller.
ARTICLE IX
GENERAL PROVISIONS
9.1 Notices. All notices, consents and other communications given or
made pursuant to this Agreement shall be in writing and shall be (i) sent by
registered or certified mail, return receipt requested, (ii) hand delivered or
(iii) sent by prepaid overnight carrier, with a
35
record of receipt, to the parties at the following addresses (or at such other
addresses as shall be specified by the parties by like notice):
(a) if to Buyer:
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 620
New York, New York 10170
Telecopier No.: (212) 697-3130
Telephone No.: (212) 672-9100
Attention: Thomas Konatich
36
with a copy to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
Telecopier No.: (212) 715-8000
Telephone No.: (212) 715-9100
Attention: James A. Grayer, Esq.
(b) if to Seller:
Plexus Vaccine Inc.
11770 Bernardo Plaza Court
Suite 370-B
San Diego, CA 92128
Telecopier No.: (858) 385-9086
Telephone No.: (858) 385-9084
Attention: Susan Burgess
with a copy to:
Gray Cary Ware & Freidenrich
4365 Executive Drive, Suite 1100
San Diego, CA 92121-2133
Telecopier No.: (858) 677-1477
Telephone No.: (858) 677-1426
Attention: Knox Bell, Esq.
Each notice or communication shall be deemed to have been given on the date
received.
9.2 Construction. Unless the context clearly indicates otherwise,
words denoting the male, female or neuter gender shall include all genders, and
words denoting the singular shall include the plural and vice versa. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
9.3 Entire Agreement. This Agreement together with the Related
Documents constitutes the entire agreement between the parties and supersedes
all other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.
9.4 Binding Effects. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, heirs,
personal representatives, executors and permitted assigns and is not intended to
confer upon any other Person (including,
37
without limitation, any directors, officers, partners, members, principals,
managers, employees, independent contractors, consultants, agents,
representatives or other personnel of Seller), any rights or remedies hereunder,
9.5 Governing Law; Jurisdiction; Venue. This Agreement shall be
governed, including, without limitation, as to validity, interpretation and
effect, by the internal Laws of the State of New York, without regard to the
principles of conflicts of laws. Each of the parties hereto irrevocably submits
to the jurisdiction of any California or New York state or federal court in
respect of any suit or proceeding related to or arising out of this Agreement.
Each party hereto also hereby irrevocably waives any objection to the laying of
the venue of any such suit or proceeding in any such court and further waives
any claim that any such suit or proceeding brought in any such court has been
brought in an inconvenient forum. In addition to any other form of service of
process authorized by law, service of process in any suit or proceeding
hereunder shall be sufficient if mailed to each party hereto at the address
specified in Section 9.1, and such service shall constitute "personal service"
for purposes of such suit or proceeding.
9.6 Ambiguity. Each party hereto acknowledges that it has been
advised and represented by counsel in the negotiation, execution and delivery of
this Agreement and accordingly agrees that if an ambiguity exists with respect
to any provision of this Agreement, such provision shall not be construed
against the party because such party or its representatives drafted such
provision.
9.7 Rights and Remedies. The rights and remedies provided for in
this Agreement are not exclusive, but are in addition to all other rights and
remedies at law, in equity or otherwise.
9.8 Counterparts; Facsimiles. This Agreement may be executed in two
or more counterparts, each of which shall be an original and all of which
together shall constitute a single agreement. A party may transmit its signed
copies of this Agreement and the Related Documents by facsimile, and such
transmission shall be valid delivery of the signed Agreement and Related
Documents, respectively.
9.9 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of Buyer, on the one hand, and Seller,
on the other, except, in the case of Buyer, (i) to an Affiliate or an entity
that succeeds to all or a substantial part of the Acquired Assets or one or more
of its subsidiaries, and (ii) after the Closing, to a purchaser of substantially
all of the Business or the Acquired Assets. No party shall be relieved of any
liability arising hereunder in respect of any assignment pursuant to this
Section, unless such assignor has received a written release expressly excepting
such assignor from any liability that may arise hereunder. Seller may transfer
and assign the Shares and the Registration Rights Agreement to Seller's
stockholders in connection with its liquidation and dissolution pursuant to
Section 6.2.
9.10 Waiver; Amendment. No waiver of any term, condition or
obligation of this Agreement shall be valid unless in writing and signed by the
waiving party. No failure or delay by any party hereto at any time to require
the other parties hereto to perform strictly in
38
accordance with the terms hereof shall preclude any party from requiring
performance by the other parties hereto at any later time. No waiver of any one
or several of the terms, conditions or obligations of this Agreement, and no
partial waiver thereof, shall be construed as a waiver of any of the other
terms, conditions or obligations of this Agreement. This Agreement may not be
amended, changed or modified in any fashion except by written instrument signed
by Buyer and Seller.
9.11 Fees and Expenses. All fees, costs and expenses incurred in
connection with the preparation, negotiation, execution, delivery or performance
of this Agreement, the Related Documents and the transactions contemplated
hereby or thereby shall be the responsibility of and paid by the party incurring
such fees, costs or expenses, except for expenses set forth on Schedule
1.7(iii), which are assumed by Buyer pursuant to this Agreement. Further, all
fees and charges of PricewaterhouseCoopers LLP incurred in connection with this
Agreement shall be paid by Buyer. Seller shall bear and pay all U.S. Federal,
state and local Taxes that arise out of or as a result of the consummation of
this Agreement or the transactions contemplated hereby, except for sales tax (if
any) which is to be paid by Buyer pursuant to Section 7.4. In addition, Seller
agrees to indemnify and hold Buyer harmless from and against any and all Losses
incurred or suffered by Buyer as a result of any failure by Seller to comply
with any "bulk sales," "bulk transfer" or similar Laws.
9.12 Public Announcements. No public announcement or similar
publicity with respect to this Agreement, the Related Documents or the
transactions contemplated hereby or thereby will be issued by any Person
including, without limitation, any party hereto, without the prior written
consent of Buyer; provided, however, that Buyer and Seller shall each be
permitted, upon prior notice to the other party, to make such disclosures to the
public or governmental authorities as their respective counsel shall deem
necessary to maintain compliance with, or to prevent violation of, applicable
Laws.
9.13 Severability. If any provision of this Agreement, including,
without limitation, Article VII or any part thereof, or the application of any
such provision to any Person or circumstances shall be determined by any court
of competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to such Person
or circumstances other than those to which it is so determined to be invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
enforced to the fullest extent permitted by law. If any provision of this
Agreement, including, without limitation, Article VII, or any part thereof, is
held to be invalid or unenforceable because of the scope or duration of or the
area covered by such provision, the parties hereto agree that the court making
such determination shall reduce the scope, duration and/or area of such
provision (and shall substitute appropriate provisions for any such invalid or
unenforceable provisions) in order to make such provision enforceable to the
fullest extent permitted by law and/or shall delete specific words and phrases,
and such modified provision shall then be enforceable and shall be enforced.
9.14 Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY SUIT,
39
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT.
IN WITNESS WHEREOF, each party hereto has duly executed this
Agreement as of the date first above written.
PLEXUS VACCINES INC.
By: /s/ Susan K. Burgess
------------------------------------
Name: Susan K. Burgess
Title: President and Chief Executive
Officer
SIGA TECHNOLOGIES, INC.
By: /s/ Thomas N. Konatich
------------------------------------
Name: Thomas N. Konatich
Title: Acting Chief Executive
Officer and Chief Financial
Officer
40
Exhibit 4(f)
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of May 23, 2003 (this
"Agreement"), is made by and between SIGA TECHNOLOGIES, INC., a Delaware
corporation, having its principal place of business located at 420 Lexington
Avenue, Suite 620, New York, NY 10170 (the "Company"), and Plexus Vaccines Inc.,
a California corporation, having its principal place of business located at
11770 Bernardo Plaza Court, Suite 370-B, San Diego, CA 92128 (the "Initial
Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the Asset
Purchase Agreement, dated as of May 14, 2003, between the Initial Investor and
the Company (the "Asset Purchase Agreement"), the Company has agreed to issue
and sell to the Initial Investor 1,950,000 shares of common stock, par value
$.0001 per share, of the Company (the "Shares"); and
WHEREAS, to induce the Initial Investor to execute and deliver the
Asset Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Shares;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agree as follows:
1. Definitions. Terms not otherwise defined herein shall have the
meanings ascribed to them in the Asset Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
(a) "Common Stock" means common stock, par value $.0001 per share,
of the Company.
(b) "Investor" means the Initial Investor and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof and who holds Registrable
Securities.
(c) "Investor Group" means the Investor and each "Investor" (as such
term is defined in each registration rights agreement dated as of the date
hereof between the Company and each party identified on Schedule I attached
hereto and made a part hereof), as a group and not individually.
(d) "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by a determination in good
faith by the Board of Directors of the Company
1
that disclosure of such information in the registration statement would be
detrimental to the business and affairs of the Company or (ii) any material
engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time; in each case where such
determination shall be accompanied by a good faith determination by the Board of
Directors of the Company that the registration statement would be materially
misleading absent the inclusion of such information.
(e) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(f) "Registrable Securities" means the Shares until the Shares are
eligible for resale pursuant to Rule 144 under the Securities Act.
(g) "Registration Statement" means a registration statement of the
Company under the Securities Act covering Registrable Securities on Form S-3, if
the Company is then eligible to file using such form, and if not eligible, on
Form SB-2 or other appropriate form.
(h) "Effective Date" means the date the SEC declares a Registration
Statement covering Registrable Securities and otherwise meeting the conditions
contemplated hereby to be effective.
(i) "Restricted Sale Date" means the first date, other than during a
Permitted Suspension Period (as defined below), on which the Investor is
restricted from making sales of Registrable Securities covered by any previously
effective Registration Statement.
2. Registration. The Company shall use its commercially reasonable
best efforts to prepare and file with the SEC, as soon as practicable after the
Closing Date, either a Registration Statement or an amendment to an existing
Registration Statement, in either event registering for resale by the Investor a
sufficient number of shares of Common Stock for the Initial Investor to sell the
Registrable Securities, but in no event less than the number of shares equal to
the Registrable Securities at the time of filing of such Registration Statement
(or such lesser number as may be required by the SEC). The Registration
Statement shall include only the Registrable Securities. The Company will use
its commercially reasonable best efforts to cause such Registration Statement to
be declared effective.
3. Obligations of the Company. In connection with the registration
of the Registrable Securities, the Company shall do each of the following:
(a) Use its commercially reasonable best efforts to prepare and file
with the SEC a Registration Statement with respect to not less than the number
of Registrable Securities provided in Section 2 above, and thereafter use its
commercially reasonable best efforts to cause such Registration Statement
relating to Registrable Securities to become effective and keep the Registration
Statement effective at all times during the period (the "Registration Period")
2
continuing until the earlier of (i) the date that is two (2) years after the
last day of the calendar month following the month in which the Effective Date
occurs, or (ii) the date on which the Shares are no longer Registrable
Securities, which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(b) Use its commercially reasonable best efforts to prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the Registration
Statement effective at all times during the Registration Period, and, during the
Registration Period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement;
(c) Permit one firm of counsel designated by the Investor Group to
review the Registration Statement and all amendments and supplements thereto a
reasonable period of time (but not less than two (2) business days and not more
than ten (10) days) prior to their filing with the SEC.
(d) Notify each Investor promptly (and, in the case of (i)(A) below,
not less than two (2) business days prior to such filing) (i)(A) when a
prospectus or any prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (B) whenever the SEC notifies
the Company whether there will be a "review" of such Registration Statement; (C)
whenever the Company receives (or a representative of the Company receives on
its behalf) any oral or written comments from the SEC in respect of a
Registration Statement (copies or, in the case of oral comments, summaries of
such comments shall be promptly furnished by the Company to the Investors); and
(D) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the SEC or any other
Federal or state governmental authority for amendments or supplements to the
Registration Statement or prospectus or for additional information; (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose; and (v) of the occurrence of any event that to the best knowledge of
the Company makes any statement made in the Registration Statement or prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, prospectus or other documents so that, in the case of
the Registration Statement or the prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
3
(e) Furnish or make available to each Investor (i) promptly after
the same is prepared and publicly distributed, filed with the SEC, or received
by the Company, one (1) copy of the Registration Statement, each preliminary
prospectus and prospectus, and each amendment or supplement thereto, and (ii)
such number of copies of a prospectus, and all amendments and supplements
thereto and such other documents, as such Investor may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
Investor;
(f) As promptly as practicable after becoming aware thereof, notify
each Investor of the happening of any event of which the Company has knowledge,
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and use its commercially reasonable efforts to promptly prepare
a supplement or amendment to the Registration Statement or other appropriate
filing with the SEC to correct such untrue statement or omission, and deliver or
make available a number of copies of such supplement or amendment to each
Investor as such Investor may reasonably request;
(g) Notwithstanding the foregoing, if at any time or from time to
time after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing of the existence of a Potential Material
Event, the Investor shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until such Investor receives written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; provided, however, that the
Company may not so suspend the right to such holders of Registrable Securities
during the periods the Registration Statement is required to be in effect other
than during a Permitted Suspension Period. The term "Permitted Suspension
Period" means one or more suspension periods during any consecutive 12-month
period which suspension periods, in the aggregate, do not exceed one hundred
eighty (180) days, provided, however, that no one such suspension period shall
either (i) be for more than forty-five (45) days or (ii) begin less than ten
(10) business days after the last day of the preceding suspension (whether or
not such last day was during or after a Permitted Suspension Period); provided,
further, that the Company shall, if lawful to do so, provide the Investor with
at least two (2) business days' notice of the existence (but not the substance
of) a Potential Material Event;
(h) Use its commercially reasonable efforts to secure and maintain
the designation of all the Registrable Securities covered by the Registration
Statement on the "Nasdaq/Small Cap Market" of the National Association of
Securities Dealers Automated Quotations System ("NASDAQ") within the meaning of
Rule 11Aa2-1 of the SEC under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the quotation of the Registrable Securities on The
Nasdaq/Small Cap Market;
(i) Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the initial Effective
Date.
(j) Cooperate with the Investor who holds Registrable Securities
being offered to facilitate the timely preparation and delivery of certificates
for the Registrable
4
Securities to be offered pursuant to the Registration Statement and enable such
certificates for the Registrable Securities to be in such denominations or
amounts as the case may be, as the Investor may reasonably request, and, within
five (5) business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel selected by the Company to deliver, to the transfer agent
for the Registrable Securities (with copies to the Investor whose Registrable
Securities are included in such Registration Statement) an appropriate
instruction and, if necessary, an opinion of such counsel; and
(k) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement.
4. Obligations of the Investor. In connection with the registration
of the Registrable Securities, each Investor shall have the following
obligations:
(a) It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request. At
least ten (10) business days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify each Investor of the
information the Company requires from each such Investor (the "Requested
Information") if such Investor has any Registrable Securities included in the
Registration Statement. If at least two (2) business days prior to the filing
date the Company has not received the Requested Information from an Investor (a
"Non-Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor;
(b) Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f) or
3(g), above, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or 3(g) or such
Investor is advised in writing by the Company that use of the applicable
prospectus may be resumed and, if so directed by the Company, such Investor
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
5
5. Expenses of Registration. All reasonable expenses (other than
underwriting discounts, commissions and fees of the Investor attributable to the
sale of the Registrable Securities or more than one counsel, any accountants and
other persons retained by the Investor Group in connection with the transactions
contemplated by this Agreement) incurred in connection with registrations,
filings or qualifications pursuant to Section 3, but including, without
limitation, all registration, listing, and qualifications fees, printers and
accounting fees, the fees and disbursements of counsel for the Company shall be
borne by the Company. In addition, a fee for one counsel for the Investor Group
up to $2,500 for the review of the Registration Statement and up to $1,500 for
each post-effective amendment to a Registration Statement, shall be borne by the
Company.
6. Indemnification. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such Investor,
each person, if any, who controls any Investor within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person" or
"Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances in which they were made) not
misleading, (ii) any untrue statement or alleged untrue statement of a material
fact contained in the final prospectus (as amended or supplemented, if the
Company files any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act, the Exchange
Act or any state securities law (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to clause (c) of this
Section 6, the Company shall reimburse the Investors, promptly as such expenses
are incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) shall not (i) apply to
a Claim arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, after such prospectus was made available by the Company
pursuant to Section 3(c) hereof; (ii) be available to the extent such Claim is
based on a failure of the Investor to deliver or cause to be delivered the
prospectus made available by the Company or the amendment or supplement thereto
made available by the Company; (iii) be available to the
6
extent such Claim is based on the delivery of a prospectus by the Investor after
receiving notice from the Company under Section 3(f), (g) or (h) hereof (other
than a notice regarding the effectiveness of the Registration Statement or any
amendment or supplement thereto), (iv) be available if any untrue statement or
alleged untrue statement of a material fact contained in the final prospectus or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading is corrected in all material
respects in an amendment or supplement to the prospectus, or (v) apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed.
(b) In connection with any registration in which any Investor is
participating, such Investor agrees to indemnify the Company, its directors and
officers who sign the Registration Statement, each person, if any, who controls
(within the meaning of either the Securities Act or of the Exchange Act) the
Company, each other Investor and any prospective underwriters, as the case may
be, and any of their respective affiliates, general partners, officers,
employees, agents and controlling persons (each, an "Indemnified Person" or
"Indemnified Party"), to the same extent as the foregoing indemnity from the
Company to such Investor, but only with respect to information relating to such
Investor furnished to the Company in writing by such Investor expressly for use
in the Registration Statement, the prospectus, any amendment or supplement
thereto, or any preliminary prospectus. Notwithstanding the foregoing, each
Investor shall not be liable for an amount in excess of the proceeds of sale of
such Investor's Registrable Securities (less applicable underwriting discounts
and commissions).
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be. In case any such action is brought against any Indemnified Person
or Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, subject to the provisions herein stated
and after notice from the indemnifying party to such Indemnified Person or
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for any legal or other reasonable out-of-pocket
expenses subsequently incurred by such Indemnified Person or Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party provided such
counsel is of the opinion that all
7
defenses available to the Indemnified Party can be maintained without
prejudicing the rights of the indemnifying party. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.
7. Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) except where the seller has committed fraud or
intentional misconduct, contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. Reports under Securities Act and Exchange Act. With a view to
making available to Investor the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit Investor to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144; and
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act.
9. Assignment of the Registration Rights. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities only if: (a) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (b) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (i) the name and address of such transferee or assignee and
(ii) the securities with respect to which such registration rights are being
transferred or assigned, (c) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (d) at
or before the time the Company received the written notice contemplated by
clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein, and (e) such
transfer of Registrable Securities is completed and disclosed to the Company
prior to the initial Effective Date. In the event of any delay in filing or
effectiveness of the
8
Registration Statement as a result of such assignment, the Company shall not be
liable for any damages arising from such delay.
10. Amendment of Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
hold a fifty-one percent (51%) interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall be
given in the manner contemplated by the Asset Purchase Agreement, (i) if to the
Company or to the Initial Investor, to their respective address contemplated by
the Asset Purchase Agreement, and (ii) if to any other Investor, at such address
as such Investor shall have provided in writing to the Company, or at such other
address as each such party furnishes by notice given in accordance with this
Section 11(b).
(c) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other person.
(d) 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.
(e) 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 jurisdiction
of the federal courts whose districts encompass any part of the City of New York
or the state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on forum non coveniens, to the bringing of any such proceeding in such
jurisdictions. To the extent determined by such court, either party hereto shall
reimburse the other party for any reasonable legal fees and disbursements
incurred by such party in enforcement of or protection of any of its rights
under this Agreement.
(f) 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
9
this Agreement in any other jurisdiction.
(g) Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
(h) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(i) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.
(j) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
(k) The Company acknowledges that any failure by the Company to
perform its obligations under Section 3(a) hereof, or any delay in such
performance could result in loss to the Investors, and the Company agrees that,
in addition to any other liability the Company may have by reason of such
failure or delay, the Company shall be liable for all direct damages caused by
any such failure or delay, unless the same is the result of force majeure.
Neither party shall be liable for consequential damages.
(l) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof. This Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement thereof.
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10
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
COMPANY:
SIGA TECHNOLOGIES, INC.
By: /s/ Thomas N. Konatich
------------------------------------
Name: Thomas N. Konatich
Title: Acting Chief Executive Officer
and Chief Financial Officer
INITIAL INVESTOR:
PLEXUS VACCINE INC.
By: /s/ Susan K. Burgess
------------------------------------
Name: Susan K. Burgess
Title: President and Chief Executive
Officer
11
Exhibit 4(g)
SIGA TECHNOLOGIES, INC.
Non-Qualified Stock Option Agreement
Granting Date: May 23, 2003
To: ______________________
We are pleased to notify you that, pursuant to the SIGA
Technologies, Inc. Amended and Restated 1996 Incentive and Non-Qualified Stock
Option Plan (the "Plan"), SIGA TECHNOLOGIES, INC., a Delaware corporation (the
"Company") has granted to you (the "Holder") a Non-Qualified stock option (the
"Option") to purchase all or any part of an aggregate of ____________ shares of
Common Stock of the Company (the "Optioned Shares"), subject to the terms and
conditions of this Agreement and the Plan. All terms, conditions and
restrictions of the Plan are incorporated herein and made part hereof as if
stated herein. If there is any conflict between the terms and conditions of the
Plan and this Agreement, the terms and conditions of the Plan, as interpreted by
the Committee, shall govern. Except as otherwise provided herein, all
capitalized terms (and any other terms defined in the Plan) used herein shall
have the meaning given to such terms in the Plan.
1. Term and Exercise of Option. Subject to the provisions of this
Agreement, this Option may be exercised for up to the number of Optioned Shares
(subject to adjustment as provided in Section hereof) by you on or prior to May
23, 2013 ("Last Exercise Date") at an initial exercise price (the "Exercise
Price") of $1.69 per share (subject to adjustment as provided in Section 7
hereof) and all as subject to the Plan and this Agreement. The Holder may
exercise this Option at any time after the date of this Agreement. Any portion
of the Option that you do not exercise shall accumulate and can be exercised by
you any time prior to the Last Exercise Date. You may not exercise your Option
to purchase a fractional share or fewer than 100 shares, and you may only
exercise your Option by purchasing shares in increments of 100 shares unless the
remaining shares purchasable are less than 100 shares.
This Option may be exercised by delivering to the Secretary of the
Company (i) a written Notice of Intention to Exercise in the form attached
hereto as Exhibit A signed by you and specifying the number of Optioned Shares
you desire to purchase, (ii) payment, in full, of the Exercise Price for all
such Optioned Shares in cash, certified check, surrender of shares of Common
Stock of the Company having a value equal to the exercise price of the Optioned
Shares as to which you are exercising this Option, provided that such
surrendered shares, if previously acquired by exercise of a Company stock
option, have been held by you at least six months prior to their surrender, or
by means of a brokered cashless exercise. As a holder of an option, you shall
have the rights of a shareholder with respect to the Optioned Shares only after
they shall have been issued to you upon the exercise of this Option. Subject to
the terms and provisions of this Agreement and the Plan, the Company shall use
its best efforts to cause the Optioned Shares to be issued as promptly as
practicable after receipt of your Notice of Intention to Exercise.
2. Non-transferability of Option. This Option shall not be
transferable and may be exercised during your lifetime only by you. Any
purported transfer or assignment of this Option shall be void and of no effect,
and shall give the Company the right to terminate this Option as of the date of
such purported transfer or assignment. No transfer of an Option by will or by
the laws of descent and distribution shall be effective unless the Company shall
have been furnished with written notice thereof, and such other evidence as the
Company may deem necessary to establish the validity of the transfer and
conditions of the Option, and to establish compliance with any laws or
regulations pertaining thereto.
3. Certain Rights and Restrictions With Respect to Common Stock. The
Optioned Shares which you may acquire upon the exercise of this Option will not
be registered under the Securities Act of 1933, as amended, or under state
securities laws and the resale by you of such Optioned Shares will, therefore,
be restricted. You will be unable to transfer such Optioned Shares without
either registration under such Act and compliance with applicable state
securities laws or the availability of an exemption therefrom. Accordingly, you
represent and warrant to the Company that all shares of Common Stock you may
acquire upon the exercise of this Option will be acquired by you for your own
account for investment and that you will not sell or otherwise dispose of any
such shares except in compliance with all applicable federal and state
securities laws. The Company may place a legend to such effect upon each
certificate representing Optioned Shares acquired by you upon the exercise of
this Option.
4. Disputes. Any dispute which may arise under or as a result of or
pursuant to this Agreement shall be finally and conclusively determined in good
faith by the Board of Directors of the Company in its sole discretion, and such
determination shall be binding upon all parties.
5. Termination of Status.
(a) This Option is a separate incentive and not in lieu of salary or
other compensation. The Optioned Shares do not vest you with any right to
employment with the Company, nor is the Company's right to terminate your
employment in any way restricted by this Agreement. Subject to the following
provisions of this Section 5, the Option will terminate upon and will not be
exercisable after termination of your employment with the Company ("Employment
Termination Date"). If your employment with the Company is terminated for any
reason other than death or disability, this Option may not be exercised after
the earlier of (i) ninety (90) days from the Employment Termination Date or (ii)
the Expiration Date, and may not be exercised for more than the number of
Optioned Shares purchasable under Section 1 on the Employment Termination Date.
(b) If you die while this Option is exercisable, or within a period
of three months after the Employment Termination Date, the Option may be
exercised by the duly authorized executor of your last will or by the duly
authorized administrator of your estate, but may not be exercised after the
earlier of (i) one year from the date of your death or (ii) the Expiration Date,
and may not be exercised for more than the number of Optioned Shares purchasable
under Section 1 on the date of your death.
(c) If your employment is terminated as a result of your permanent
disability, this Option may not be exercised after the earlier of (i) one year
from the Employment Termination Date, or (ii) the Expiration Date, and may not
be exercised for more than the number of Optioned Shares purchasable under
Section 1 on the Employment Termination Date. If you die after the date your
employment is terminated under the provisions of this Section 5(c) but before
the Expiration Date, the provisions of Section 5(b) above shall apply.
Permanent disability shall mean a disability described in Section
422(c)(6) of the Code. The existence of a Disability shall be determined by the
Committee in its absolute discretion.
6. Adjustments to Exercise Price and Number of Securities. If the
Company shall at any time subdivide or combine the outstanding shares of Common
Stock, or similar corporate events the Exercise Price and the number of shares
subject to the Option shall be appropriately adjusted.
7. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of this Option, such number
of shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of
2
this Option and payment of the Exercise Price therefor, all shares of Common
Stock and other securities issuable upon such exercise shall be duly and validly
issued, fully paid, non-assessable and not subject to the preemptive rights of
any stockholder. As long as this Option shall be outstanding, the Company shall
use its best efforts to cause all shares of Common Stock issuable upon the
exercise of the Option to be listed (subject to official notice of issuance) on
all securities exchanges on which the Common Stock may then be listed and/or
quoted on NASDAQ.
8. Forfeiture of Option Gains. If at any time within one year after
the exercise of all or any portion of the Option the Committee determines that
the Company has been materially harmed by you, which harm either (a) results in
your being terminated for Cause or (b) results from your engaging in any
activity determined by the Committee, in its sole discretion, to be in
competition with any activity of the Company, or otherwise inimical, contrary or
harmful to the interests of the Company (including, but not limited to,
violating any non-competition or similar agreements entered into with the
Company or otherwise accepting employment with or serving as a consultant,
adviser or in any other capacity to an entity that is in competition with or
acting against the interests of the Company), then upon notice from the Company
to you any gain ("Gain") realized by you upon exercising such Option shall be
paid by you to the Company. For purposes of this Section 9, such Gain shall be
the excess of the Fair Market Value of the shares of Company Stock obtained
through such exercise as of the date of option exercise over the purchase price
of such shares. The Company shall have the right to offset such Gain against any
amounts otherwise owed to you by the Company (including, but not limited to
wages, vacation pay, or pursuant to any benefit plan or other compensatory
arrangement).
9. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made and sent when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of this Option, to the address of
the Holder as shown on the books of the Company; or
(b) If to the Company, to 420 Lexington Avenue, Suite 620, New York,
NY 10017, or to such other address as the Company may designate by notice to the
Holders.
10. Supplements and Amendments. The Company and the Holder may from
time to time supplement or amend this Agreement in any respect, provided,
however, that no amendment may adversely affect your rights hereunder without
your written consent.
11. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holder and
their respective successors and assigns hereunder.
12. Governing Law. This Agreement shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
construed in accordance with the laws of the State of New York without giving
effect to the rules of the State of New York governing the conflicts of laws.
13. Entire Agreement; Modification. This Agreement contains the
entire understanding between the parties hereto with respect to the subject
matter hereof.
3
14. Severabilitv. If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
15. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
16. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
registered Holder of this Option any legal or equitable right, remedy or claim
under this Agreement; and this Agreement shall be for the sole and exclusive
benefit of the Company and the Holder.
17. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
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4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be dully executed, as of the day and year first written.
SIGA TECHNOLOGIES, INC.
By: ____________________________________
Thomas N. Konatich
Acting Chief Executive Officer
Chief Financial Officer
________________________________________
Signature of Holder
5
Appendix A
NOTICE OF INTENTION TO EXERCISE STOCK OPTIONS
The undersigned grantee of a SIGA Technologies, Inc. Stock Option Agreement
dated as of ______________________ to purchase _________ shares of SIGA
Technologies, Inc. common stock hereby gives notice of his or her intention to
exercise the Stock Option (or a portion thereof) and elects to purchase shares
of SIGA Technologies, Inc. common stock.
Shares should be issued in the name of the undersigned and should be sent to the
undersigned at:
______________________________
______________________________
______________________________
______________________________
Dated this _____ day of ____________________.
Social Security Number: ____________________
Name: _________________________________
_______________________________________
Signature
INSTRUCTIONS: The exercise of these Stock Options is effective on the date the
Company has received all of (1) this Notice of Intention to Exercise Stock
Options, and (2) payment in full in cash of the exercise price for all shares
being purchased pursuant to this Notice.
6
Exhibit 4(h)
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 its
registered assigns (the "Holder") is hereby granted the right to purchase at any
time until 5:00 P.M., New York City time, on March 1, 2012 (the "Expiration
Date"), ______________________ (_____) fully paid and nonassessable shares of
the Company's common stock, par value $.0001 per share (the "Common Stock"), at
an initial exercise price per share (the "Exercise Price") of $1.69 per share,
subject to further adjustment as set forth herein. The shares of Common Stock
issued upon exercise of this Warrant are referred to as "Warrant Shares." This
Warrant is being issued to the Holder pursuant to the terms of that certain
Asset Purchase Agreement dated as of May 14, 2003 (the "Agreement"), to which
the Company and Plexus Vaccine Inc., a California corporation, are parties.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Agreement.
2. Exercise of Warrants.
2.1 General. This Warrant is exercisable in whole or in part
at any time and from time to time. Such exercise shall be effectuated by
submitting to the Company (either by delivery to the Company or by facsimile
transmission as provided in Section 8 hereof) a completed and duly executed
Notice of Exercise (substantially in the form attached to this Warrant
Certificate) as provided in this paragraph. The date such Notice of Exercise is
faxed to the Company shall be the "Exercise Date," provided that, if this
Warrant has been fully exercised, the Holder of this Warrant tenders this
Warrant Certificate to the Company within five (5) business days thereafter. The
Notice of Exercise shall be executed by the Holder of this Warrant and shall
indicate the number of shares then being purchased pursuant to such exercise.
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 the other Related Documents, in no event (except
(i) as specifically provided in this Warrant as an exception to this provision,
or (ii) while there is outstanding a tender offer for any or all of the shares
of the Company's Common Stock) shall the Holder be entitled to exercise this
Warrant, or shall the Company have the obligation to issue shares upon such
exercise of all or any portion of this Warrant, to the extent that, after such
exercise the sum of (1) the number of shares of Common Stock beneficially
- 1 -
owned by the Holder and its affiliates (other than shares of Common Stock which
may be deemed beneficially owned through the ownership of the unexercised
portion of the Warrants), and (2) the number of shares of Common Stock issuable
upon the exercise of the Warrants with respect to which the determination of
this proviso is being made, would result in beneficial ownership by the Holder
and its affiliates of more than 9.99% of the outstanding shares of Common Stock
(after taking into account the shares to be issued to the Holder upon such
exercise). For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), except as
otherwise provided in clause (1) of such sentence. The Holder, by its acceptance
of this Warrant, further agrees that if the Holder transfers or assigns any of
the Warrants to a party who or which would not be considered such an affiliate,
such assignment shall be made subject to the transferee's or assignee's specific
agreement to be bound by the provisions of this Section 2.2 as if such
transferee or assignee were the original Holder hereof.
3. Reservation of Shares. The Company hereby agrees that at all
times during the term of this Warrant there shall be reserved for issuance upon
exercise of the then outstanding balance of this Warrant such number of shares
of its Common Stock as shall be required for issuance of 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 Adjustments. In case of any stock split or reverse
stock split, stock dividend, reclassification of the Common Stock,
recapitalization, merger or consolidation, or like capital adjustment affecting
the Common Stock of the Company, the provisions of this Section 6 shall be
applied as if such capital adjustment event had occurred immediately prior to
the date of this Warrant and the original Exercise Price had been fairly
allocated to the stock resulting from such capital adjustment; and in other
respects the provisions of this Section shall be applied in a fair, equitable
and reasonable manner so as to give effect, as nearly as may be, to the purposes
hereof. A rights offering to stockholders shall be deemed a stock dividend to
the extent of the bargain purchase element of the rights.
6.3 Adjustment for Spin Off. If, for any reason, prior to the
exercise of this Warrant in full, the Company spins off or otherwise divests
itself of a part of its business or operations or disposes all or of a part of
its assets in a transaction (the "Spin Off") in which the Company does not
- 2 -
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 for the five (5)
trading days immediately following the fifth trading day after
the Record Date, and the denominator of which is the average
closing bid price of the Common Stock on the five (5) trading
days immediately preceding the Record Date; and such adjusted
Exercise Price shall be deemed to be the Exercise Price with
respect to the Outstanding Warrants after the Record Date.
7. Transfer to Comply with the Securities Act; Registration Rights
Agreement.
7.1 Transfer. This Warrant has not been registered under the
Securities Act of 1933, as amended, (the "1933 Act") and has been issued to the
Holder for investment and not with a view to the distribution of either the
Warrant or the Warrant Shares. Neither this Warrant nor any of the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the 1933 Act relating to such security or an
opinion of counsel satisfactory to the Company that registration is not required
under the 1933 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.
7.2 Registration Rights. Reference is made to the Registration
Rights Agreement dated of even date herewith between the Company and the Holder
(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.
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
- 3 -
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 601
New York, NY 10170
Attn: Thomas Konatich
Telephone No.: (212) 672-9100
Facsimile No.: (212) 697-3130
(ii) if to the Holder, to:
_____________________
_____________________
_____________________
_____________________
_____________________
Any party may be notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
9. Supplements and Amendments; Whole Agreement. This Warrant may be
amended or supplemented only by an instrument in writing signed by the parties
hereto. This Warrant contains the full understanding of the parties hereto with
respect to the subject matter hereof and thereof and there are no
representations, warranties, agreements or understandings other than expressly
contained herein and therein.
10. Governing Law. This Warrant shall be deemed to be a contract
made under the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the City of New York
or the state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Warrant and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
forum non conveniens, to the bringing of any such proceeding in such
jurisdictions.
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 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 4 -
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as
of the 23rd day of May, 2003.
SIGA TECHNOLOGIES, INC.
By:
________________________________
(Name) Thomas N. Konatich
(Title) Acting Chief Executive Officer
Chief Financial Officer
- 5 -
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise the right,
represented by the Warrant Certificate dated as of ________________, ____, to
purchase ______________ shares of the common stock, par value $.0001 per share,
of SIGA TECHNOLOGIES, INC. ("Common Stock") and tenders herewith payment in
accordance with Section 1 of the Common Stock Purchase Warrant.
It is the intention of the Holder to comply with the provisions of Section
2.2 of the Common Stock Purchase 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: $
- 6 -
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%]
- 7 -
Exhibit 4(i)
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of May 23, 2003 (this
"Agreement"), is made by and between SIGA TECHNOLOGIES, INC., a Delaware
corporation, having its principal place of business located at 420 Lexington
Avenue, Suite 620, New York, NY 10170 (the "Company"), and _________________
(the "Initial Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the Asset
Purchase Agreement (the "Asset Purchase Agreement") dated as of May 14, 2003,
between the Company and Plexus Vaccine Inc., a California corporation
("Plexus"), the Company has agreed to issue to the Initial Investor a warrant
(the "Warrant") to purchase an aggregate of __________ shares of common stock,
par value $.0001 per share, of the Company (the "Common Stock") at an exercise
price of $1.69 per share; and
WHEREAS, to induce Plexus to execute and deliver the Asset Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "Securities
Act"), with respect to the shares of Common Stock issued upon exercise of the
Warrant (the "Shares");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agree as follows:
1. Definitions. Terms not otherwise defined herein shall have the
meanings ascribed to them in the Asset Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
(a) "Investor" means the Initial Investor and any permitted
transferee or assignee who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 hereof and who holds Registrable
Securities.
(b) "Investor Group" means the Investor and each "Investor" (as such
term is defined in each registration rights agreement dated as of the date
hereof between the Company and each party (other than the Investor (as defined
herein)) identified on Schedule I attached hereto and made a part hereof), as a
group and not individually.
(c) "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by a determination in good
faith by the Board of Directors of the Company that disclosure of such
information in the registration statement would be detrimental to the business
and affairs of the Company or (ii) any material engagement or activity by the
Company which would, in the good faith determination of the Board of Directors
of the Company, be adversely affected by disclosure in a registration statement
at such time; in each case where such
1
determination shall be accompanied by a good faith determination by the Board of
Directors of the Company that the registration statement would be materially
misleading absent the inclusion of such information.
(d) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(e) "Registrable Securities" means the Shares until the Shares are
eligible for resale pursuant to Rule 144 under the Securities Act.
(f) "Registration Statement" means a registration statement of the
Company under the Securities Act covering Registrable Securities on Form S-3, if
the Company is then eligible to file using such form, and if not eligible, on
Form SB-2 or other appropriate form.
(g) "Effective Date" means the date the SEC declares a Registration
Statement covering Registrable Securities and otherwise meeting the conditions
contemplated hereby to be effective.
(h) "Restricted Sale Date" means the first date, other than during a
Permitted Suspension Period (as defined below), on which the Investor is
restricted from making sales of Registrable Securities covered by any previously
effective Registration Statement.
2. Registration. The Company shall use its commercially reasonable
best efforts to prepare and file with the SEC, as soon as practicable after the
Closing Date, either a Registration Statement or an amendment to an existing
Registration Statement, in either event registering for resale by the Investor a
sufficient number of shares of Common Stock for the Initial Investor to sell the
Registrable Securities, but in no event less than the number of shares equal to
the Registrable Securities at the time of filing of such Registration Statement
(or such lesser number as may be required by the SEC). The Registration
Statement shall include only the Registrable Securities. The Company will use
its commercially reasonable best efforts to cause such Registration Statement to
be declared effective.
3. Obligations of the Company. In connection with the registration
of the Registrable Securities, the Company shall do each of the following:
(a) Use its commercially reasonable best efforts to prepare and file
with the SEC a Registration Statement with respect to not less than the number
of Registrable Securities provided in Section 2 above, and thereafter use its
commercially reasonable best efforts to cause such Registration Statement
relating to Registrable Securities to become effective and keep the Registration
Statement effective at all times during the period (the "Registration Period")
continuing until the earlier of (i) the date that is two (2) years after the
last day of the calendar month following the month in which the Effective Date
occurs, or (ii) the date on which the Shares are no longer Registrable
Securities, which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
2
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(b) Use its commercially reasonable best efforts to prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the Registration
Statement effective at all times during the Registration Period, and, during the
Registration Period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement;
(c) Permit one firm of counsel designated by the Investor Group to
review the Registration Statement and all amendments and supplements thereto a
reasonable period of time (but not less than two (2) business days and not more
than ten (10) days) prior to their filing with the SEC.
(d) Notify each Investor promptly (and, in the case of (i)(A) below,
not less than two (2) business days prior to such filing) (i)(A) when a
prospectus or any prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (B) whenever the SEC notifies
the Company whether there will be a "review" of such Registration Statement; (C)
whenever the Company receives (or a representative of the Company receives on
its behalf) any oral or written comments from the SEC in respect of a
Registration Statement (copies or, in the case of oral comments, summaries of
such comments shall be promptly furnished by the Company to the Investors); and
(D) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the SEC or any other
Federal or state governmental authority for amendments or supplements to the
Registration Statement or prospectus or for additional information; (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose; and (v) of the occurrence of any event that to the best knowledge of
the Company makes any statement made in the Registration Statement or prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, prospectus or other documents so that, in the case of
the Registration Statement or the prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(e) Furnish or make available to each Investor (i) promptly after
the same is prepared and publicly distributed, filed with the SEC, or received
by the Company, one (1) copy of the Registration Statement, each preliminary
prospectus and prospectus, and each amendment
3
or supplement thereto, and (ii) such number of copies of a prospectus, and all
amendments and supplements thereto and such other documents, as such Investor
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Investor;
(f) As promptly as practicable after becoming aware thereof, notify
each Investor of the happening of any event of which the Company has knowledge,
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and use its commercially reasonable efforts to promptly prepare
a supplement or amendment to the Registration Statement or other appropriate
filing with the SEC to correct such untrue statement or omission, and deliver or
make available a number of copies of such supplement or amendment to each
Investor as such Investor may reasonably request;
(g) Notwithstanding the foregoing, if at any time or from time to
time after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing of the existence of a Potential Material
Event, the Investor shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until such Investor receives written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; provided, however, that the
Company may not so suspend the right to such holders of Registrable Securities
during the periods the Registration Statement is required to be in effect other
than during a Permitted Suspension Period. The term "Permitted Suspension
Period" means one or more suspension periods during any consecutive 12-month
period which suspension periods, in the aggregate, do not exceed one hundred
eighty (180) days, provided, however, that no one such suspension period shall
either (i) be for more than forty-five (45) days or (ii) begin less than ten
(10) business days after the last day of the preceding suspension (whether or
not such last day was during or after a Permitted Suspension Period); provided,
further, that the Company shall, if lawful to do so, provide the Investor with
at least two (2) business days' notice of the existence (but not the substance
of) a Potential Material Event;
(h) Use its commercially reasonable efforts to secure and maintain
the designation of all the Registrable Securities covered by the Registration
Statement on the "Nasdaq/Small Cap Market" of the National Association of
Securities Dealers Automated Quotations System ("NASDAQ") within the meaning of
Rule 11Aa2-1 of the SEC under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the quotation of the Registrable Securities on The
Nasdaq/Small Cap Market;
(i) Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the initial Effective
Date.
(j) Cooperate with the Investor who holds Registrable Securities
being offered to facilitate the timely preparation and delivery of certificates
for the Registrable Securities to be offered pursuant to the Registration
Statement and enable such certificates for the Registrable Securities to be in
such denominations or amounts as the case may be, as the Investor may reasonably
request, and, within five (5) business days after a Registration
4
Statement which includes Registrable Securities is ordered effective by the SEC,
the Company shall deliver, and shall cause legal counsel selected by the Company
to deliver, to the transfer agent for the Registrable Securities (with copies to
the Investor whose Registrable Securities are included in such Registration
Statement) an appropriate instruction and, if necessary, an opinion of such
counsel; and
(k) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement.
4. Obligations of the Investor. In connection with the registration
of the Registrable Securities, each Investor shall have the following
obligations:
(a) It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request. At
least ten (10) business days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify each Investor of the
information the Company requires from each such Investor (the "Requested
Information") if such Investor has any Registrable Securities included in the
Registration Statement. If at least two (2) business days prior to the filing
date the Company has not received the Requested Information from an Investor (a
"Non-Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor;
(b) Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f) or
3(g), above, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or 3(g) or such
Investor is advised in writing by the Company that use of the applicable
prospectus may be resumed and, if so directed by the Company, such Investor
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
5. Expenses of Registration. All reasonable expenses (other than
underwriting discounts, commissions and fees of the Investor attributable to the
sale of the Registrable Securities or more than one counsel, any accountants and
other persons retained by
5
the Investor Group in connection with the transactions contemplated by this
Agreement) incurred in connection with registrations, filings or qualifications
pursuant to Section 3, but including, without limitation, all registration,
listing, and qualifications fees, printers and accounting fees, the fees and
disbursements of counsel for the Company shall be borne by the Company. In
addition, a fee for one counsel for the Investor Group up to $2,500 for the
review of the Registration Statement and up to $1,500 for each post-effective
amendment to a Registration Statement, shall be borne by the Company.
6. Indemnification. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such Investor,
each person, if any, who controls any Investor within the meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person" or
"Indemnified Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations in the Registration Statement, or
any post-effective amendment thereof, or any prospectus included therein: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances in which they were made) not
misleading, (ii) any untrue statement or alleged untrue statement of a material
fact contained in the final prospectus (as amended or supplemented, if the
Company files any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation under the Securities Act, the Exchange
Act or any state securities law (the matters in the foregoing clauses (i)
through (iii) being, collectively, "Violations"). Subject to clause (c) of this
Section 6, the Company shall reimburse the Investors, promptly as such expenses
are incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a) shall not (i) apply to
a Claim arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of any Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, after such prospectus was made available by the Company
pursuant to Section 3(c) hereof; (ii) be available to the extent such Claim is
based on a failure of the Investor to deliver or cause to be delivered the
prospectus made available by the Company or the amendment or supplement thereto
made available by the Company; (iii) be available to the extent such Claim is
based on the delivery of a prospectus by the Investor after receiving notice
from the Company under Section 3(f), (g) or (h) hereof (other than a notice
regarding the effectiveness of the Registration Statement or any amendment or
supplement thereto), (iv) be
6
available if any untrue statement or alleged untrue statement of a material fact
contained in the final prospectus or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not
misleading is corrected in all material respects in an amendment or supplement
to the prospectus, or (v) apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld or delayed.
(b) In connection with any registration in which any Investor is
participating, such Investor agrees to indemnify the Company, its directors and
officers who sign the Registration Statement, each person, if any, who controls
(within the meaning of either the Securities Act or of the Exchange Act) the
Company, each other Investor and any prospective underwriters, as the case may
be, and any of their respective affiliates, general partners, officers,
employees, agents and controlling persons (each, an "Indemnified Person" or
"Indemnified Party"), to the same extent as the foregoing indemnity from the
Company to such Investor, but only with respect to information relating to such
Investor furnished to the Company in writing by such Investor expressly for use
in the Registration Statement, the prospectus, any amendment or supplement
thereto, or any preliminary prospectus. Notwithstanding the foregoing, each
Investor shall not be liable for an amount in excess of the proceeds of sale of
such Investor's Registrable Securities (less applicable underwriting discounts
and commissions).
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be. In case any such action is brought against any Indemnified Person
or Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, subject to the provisions herein stated
and after notice from the indemnifying party to such Indemnified Person or
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for any legal or other reasonable out-of-pocket
expenses subsequently incurred by such Indemnified Person or Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party provided such
counsel is of the opinion that all defenses available to the Indemnified Party
can be maintained without prejudicing the rights of the indemnifying party. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
7
party of any liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
7. Contribution. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6; (b) no seller of Registrable
Securities guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) except where the seller has committed fraud or
intentional misconduct, contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. Reports under Securities Act and Exchange Act. With a view to
making available to Investor the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit Investor to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144; and
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act.
9. Assignment of the Registration Rights. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities only if: (a) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (b) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (i) the name and address of such transferee or assignee and
(ii) the securities with respect to which such registration rights are being
transferred or assigned, (c) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (d) at
or before the time the Company received the written notice contemplated by
clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein, and (e) such
transfer of Registrable Securities is completed and disclosed to the Company
prior to the initial Effective Date. In the event of any delay in filing or
effectiveness of the Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such delay.
8
10. Amendment of Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
hold a fifty-one percent (51%) interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon each Investor and the Company.
11. Miscellaneous.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall be
given in the manner contemplated by the Warrant, (i) if to the Company or to the
Initial Investor, to their respective address contemplated by the Warrant, and
(ii) if to any other Investor, at such address as such Investor shall have
provided in writing to the Company, or at such other address as each such party
furnishes by notice given in accordance with this Section 11(b).
(c) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other person.
(d) 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.
(e) 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 jurisdiction
of the federal courts whose districts encompass any part of the City of New York
or the state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on forum non coveniens, to the bringing of any such proceeding in such
jurisdictions. To the extent determined by such court, either party hereto shall
reimburse the other party for any reasonable legal fees and disbursements
incurred by such party in enforcement of or protection of any of its rights
under this Agreement.
(f) 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.
(g) Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
9
(h) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(i) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.
(j) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
(k) The Company acknowledges that any failure by the Company to
perform its obligations under Section 3(a) hereof, or any delay in such
performance could result in loss to the Investors, and the Company agrees that,
in addition to any other liability the Company may have by reason of such
failure or delay, the Company shall be liable for all direct damages caused by
any such failure or delay, unless the same is the result of force majeure.
Neither party shall be liable for consequential damages.
(l) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof. This Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement thereof.
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10
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
COMPANY:
SIGA TECHNOLOGIES, INC.
By: ____________________________________
Name:
Title:
INITIAL INVESTOR:
________________________________________
11
Exhibit 4(j)
SIGA TECHNOLOGIES, INC.
Non-Qualified Stock Option Agreement
Granting Date: May 23, 2003
To: ___________________________
We are pleased to notify you that, pursuant to the SIGA
Technologies, Inc. Amended and Restated 1996 Incentive and Non-Qualified Stock
Option Plan (the "Plan"), SIGA TECHNOLOGIES, INC., a Delaware corporation (the
"Company") has granted to you (the "Holder") a Non-Qualified stock option (the
"Option") to purchase all or any part of an aggregate of 100,000 shares of
Common Stock of the Company (the "Optioned Shares"), subject to the terms and
conditions of this Agreement and the Plan. All terms, conditions and
restrictions of the Plan are incorporated herein and made part hereof as if
stated herein. If there is any conflict between the terms and conditions of the
Plan and this Agreement, the terms and conditions of the Plan, as interpreted by
the Committee, shall govern. Except as otherwise provided herein, all
capitalized terms (and any other terms defined in the Plan) used herein shall
have the meaning given to such terms in the Plan.
1. Term and Exercise of Option. Subject to the provisions of this
Agreement, this Option may be exercised for up to the number of Optioned Shares
(subject to adjustment as provided in Section hereof) by you on or prior to May
23, 2013 ("Last Exercise Date") at an initial exercise price (the "Exercise
Price") of $1.81 per share (subject to adjustment as provided in Section 7
hereof) and all as subject to the Plan and this Agreement. The Holder may
exercise this Option at any time after the date of this Agreement. Any portion
of the Option that you do not exercise shall accumulate and can be exercised by
you any time prior to the Last Exercise Date. You may not exercise your Option
to purchase a fractional share or fewer than 100 shares, and you may only
exercise your Option by purchasing shares in increments of 100 shares unless the
remaining shares purchasable are less than 100 shares.
This Option may be exercised by delivering to the Secretary of the
Company (i) a written Notice of Intention to Exercise in the form attached
hereto as Exhibit A signed by you and specifying the number of Optioned Shares
you desire to purchase, (ii) payment, in full, of the Exercise Price for all
such Optioned Shares in cash, certified check, surrender of shares of Common
Stock of the Company having a value equal to the exercise price of the Optioned
Shares as to which you are exercising this Option, provided that such
surrendered shares, if previously acquired by exercise of a Company stock
option, have been held by you at least six months prior to their surrender, or
by means of a brokered cashless exercise. As a holder of an option, you shall
have the rights of a shareholder with respect to the Optioned Shares only after
they shall have been issued to you upon the exercise of this Option. Subject to
the terms and provisions of this Agreement and the Plan, the Company shall use
its best efforts to cause the Optioned Shares to be issued as promptly as
practicable after receipt of your Notice of Intention to Exercise.
2. Non-transferability of Option. This Option shall not be
transferable and may be exercised during your lifetime only by you. Any
purported transfer or assignment of this Option shall be void and of no effect,
and shall give the Company the right to terminate this Option as of the date of
such purported transfer or assignment. No transfer of an Option by will or by
the laws of descent and distribution shall be effective unless the Company shall
have been furnished with written notice thereof, and such other evidence as the
Company may deem necessary to establish the validity of the transfer and
conditions of the Option, and to establish compliance with any laws or
regulations pertaining thereto.
3. Certain Rights and Restrictions With Respect to Common Stock. The
Optioned Shares which you may acquire upon the exercise of this Option will not
be registered under the Securities Act of 1933, as amended, or under state
securities laws and the resale by you of such Optioned Shares will, therefore,
be restricted. You will be unable to transfer such Optioned Shares without
either registration under such Act and compliance with applicable state
securities laws or the availability of an exemption therefrom. Accordingly, you
represent and warrant to the Company that all shares of Common Stock you may
acquire upon the exercise of this Option will be acquired by you for your own
account for investment and that you will not sell or otherwise dispose of any
such shares except in compliance with all applicable federal and state
securities laws. The Company may place a legend to such effect upon each
certificate representing Optioned Shares acquired by you upon the exercise of
this Option.
4. Disputes. Any dispute which may arise under or as a result of or
pursuant to this Agreement shall be finally and conclusively determined in good
faith by the Board of Directors of the Company in its sole discretion, and such
determination shall be binding upon all parties.
5. Termination of Status.
(a) This Option is a separate incentive and not in lieu of salary or
other compensation. The Optioned Shares do not vest you with any right to
employment with the Company, nor is the Company's right to terminate your
employment in any way restricted by this Agreement. Subject to the following
provisions of this Section 5, the Option will terminate upon and will not be
exercisable after termination of your employment with the Company ("Employment
Termination Date"). If your employment with the Company is terminated for any
reason other than death or disability, this Option may not be exercised after
the earlier of (i) ninety (90) days from the Employment Termination Date or (ii)
the Expiration Date, and may not be exercised for more than the number of
Optioned Shares purchasable under Section 1 on the Employment Termination Date.
(b) If you die while this Option is exercisable, or within a period
of three months after the Employment Termination Date, the Option may be
exercised by the duly authorized executor of your last will or by the duly
authorized administrator of your estate, but may not be exercised after the
earlier of (i) one year from the date of your death or (ii) the Expiration Date,
and may not be exercised for more than the number of Optioned Shares purchasable
under Section 1 on the date of your death.
(c) If your employment is terminated as a result of your permanent
disability, this Option may not be exercised after the earlier of (i) one year
from the Employment Termination Date, or (ii) the Expiration Date, and may not
be exercised for more than the number of Optioned Shares purchasable under
Section 1 on the Employment Termination Date. If you die after the date your
employment is terminated under the provisions of this Section 5(c) but before
the Expiration Date, the provisions of Section 5(b) above shall apply.
Permanent disability shall mean a disability described in Section
422(c)(6) of the Code. The existence of a Disability shall be determined by the
Committee in its absolute discretion.
6. Adjustments to Exercise Price and Number of Securities. If the
Company shall at any time subdivide or combine the outstanding shares of Common
Stock, or similar corporate events the Exercise Price and the number of shares
subject to the Option shall be appropriately adjusted.
7. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of this Option, such number
of shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of
2
this Option and payment of the Exercise Price therefor, all shares of Common
Stock and other securities issuable upon such exercise shall be duly and validly
issued, fully paid, non-assessable and not subject to the preemptive rights of
any stockholder. As long as this Option shall be outstanding, the Company shall
use its best efforts to cause all shares of Common Stock issuable upon the
exercise of the Option to be listed (subject to official notice of issuance) on
all securities exchanges on which the Common Stock may then be listed and/or
quoted on NASDAQ.
8. Forfeiture of Option Gains. If at any time within one year after
the exercise of all or any portion of the Option the Committee determines that
the Company has been materially harmed by you, which harm either (a) results in
your being terminated for Cause or (b) results from your engaging in any
activity determined by the Committee, in its sole discretion, to be in
competition with any activity of the Company, or otherwise inimical, contrary or
harmful to the interests of the Company (including, but not limited to,
violating any non-competition or similar agreements entered into with the
Company or otherwise accepting employment with or serving as a consultant,
adviser or in any other capacity to an entity that is in competition with or
acting against the interests of the Company), then upon notice from the Company
to you any gain ("Gain") realized by you upon exercising such Option shall be
paid by you to the Company. For purposes of this Section 9, such Gain shall be
the excess of the Fair Market Value of the shares of Company Stock obtained
through such exercise as of the date of option exercise over the purchase price
of such shares. The Company shall have the right to offset such Gain against any
amounts otherwise owed to you by the Company (including, but not limited to
wages, vacation pay, or pursuant to any benefit plan or other compensatory
arrangement).
9. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made and sent when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of this Option, to the address of
the Holder as shown on the books of the Company; or
(b) If to the Company, to 420 Lexington Avenue, Suite 620, New York,
NY 10017, or to such other address as the Company may designate by notice to the
Holders.
10. Supplements and Amendments. The Company and the Holder may from
time to time supplement or amend this Agreement in any respect, provided,
however, that no amendment may adversely affect your rights hereunder without
your written consent.
11. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holder and
their respective successors and assigns hereunder.
12. Governing Law. This Agreement shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
construed in accordance with the laws of the State of New York without giving
effect to the rules of the State of New York governing the conflicts of laws.
13. Entire Agreement; Modification. This Agreement contains the
entire understanding between the parties hereto with respect to the subject
matter hereof.
3
14. Severabilitv. If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
15. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
16. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
registered Holder of this Option any legal or equitable right, remedy or claim
under this Agreement; and this Agreement shall be for the sole and exclusive
benefit of the Company and the Holder.
17. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
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4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be dully executed, as of the day and year first written.
SIGA TECHNOLOGIES, INC.
By: ____________________________________
Thomas N. Konatich
Acting Chief Executive Officer
Chief Financial Officer
__________________________________
Signature of Holder
5
Appendix A
NOTICE OF INTENTION TO EXERCISE STOCK OPTIONS
The undersigned grantee of a SIGA Technologies, Inc. Stock Option Agreement
dated as of ______________________ to purchase _________ shares of SIGA
Technologies, Inc. common stock hereby gives notice of his or her intention to
exercise the Stock Option (or a portion thereof) and elects to purchase shares
of SIGA Technologies, Inc. common stock.
Shares should be issued in the name of the undersigned and should be sent to the
undersigned at:
_____________________________
_____________________________
_____________________________
_____________________________
Dated this _____ day of ____________________.
Social Security Number: ____________________
Name: ______________________________________
____________________________________________
Signature
INSTRUCTIONS: The exercise of these Stock Options is effective on the date the
Company has received all of (1) this Notice of Intention to Exercise Stock
Options, and (2) payment in full in cash of the exercise price for all shares
being purchased pursuant to this Notice.
6
Exhibit 10(eee)
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of May 23,
2003, between SIGA Technologies, Inc., a Delaware corporation (the
"Corporation"), and Susan K. Burgess, Ph.D. (the "Executive").
WHEREAS, the Corporation and Plexus Vaccine Inc., a California corporation
("Plexus"), are parties to an Asset Purchase Agreement dated May 14, 2003 (the
"Asset Purchase Agreement");
WHEREAS, as a condition precedent to the consummation of the transactions
contemplated by the Asset Purchase Agreement (the "Closing"), the parties hereto
have agreed to enter into this Agreement;
WHEREAS, the Corporation and Executive acknowledge and agree that
immediately prior to the Closing, Executive was employed as president and chief
executive officer of Plexus and was a significant shareholder of Plexus;
WHEREAS, the Corporation and Executive acknowledge and agree that the
retention of Executive's services and Executive's agreement to enter into and
adhere to the non-competition, non-solicitation and non-disclosure of
proprietary information provisions contained in this Agreement are critical
reasons for the Corporation entering into the Asset Purchase Agreement and
consummating the transactions contemplated thereby; and
WHEREAS, the Corporation and Executive desire to enter into this Agreement
pursuant to which Executive shall serve as the President of the Corporation on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual agreements and covenants hereinafter set forth, the parties hereto agree
to the terms and conditions of this Agreement as follows:
1. Employment for Term. The Corporation hereby employs Executive and
Executive hereby accepts employment with the Corporation for the period
beginning on May 23, 2003 and ending December 31, 2005 (the "Initial Term"), or
upon the earlier termination of such term pursuant to Section 6 (such term of
employment upon any such earlier termination, being hereinafter referred to as
the "Term"). The termination of Executive's employment under this Agreement
shall end the Initial Term but shall not terminate Executive's or the
Corporation's other agreements in this Agreement, except as otherwise provided
herein.
2. Position and Duties. During the Term, Executive shall serve as the
President of the Corporation. During the Term, Executive shall also hold such
additional positions and titles as the Board of Directors of the Corporation
(the "Board") may determine from time to time. During the Term, Executive shall
devote her full time and efforts to her duties as an employee of the
Corporation.
3. Compensation.
(a) Base Salary. The Corporation shall pay Executive a base salary,
beginning on the first day of the Term and ending on the last day of the Term,
of not less than $216,000 per annum, payable at least monthly on the
Corporation's regular pay cycle for professional employees (the "Base Salary").
(b) Stock Options. On the date hereof, the Corporation shall grant
Executive an option to purchase an aggregate of 300,000 shares of common stock,
par value $.0001 per share, of the Corporation ("Common Stock"), which shall
vest with respect to the first 100,000 shares on May 23, 2003, with respect to
the second 100,000 shares on May 23, 2004 and with respect to the remaining
100,000 shares on May 23, 2005, pursuant to a Stock Option Grant Agreement of
even date herewith between the Corporation and Executive, in substantially the
form attached hereto as Exhibit A.
(c) Other and Additional Compensation. The preceding sections
establish the minimum compensation during the Term and shall not preclude the
Board from awarding Executive a higher salary or any bonuses or stock options in
the discretion of the Board during the Term at any time.
(d) Payment of Deferred Compensation. The parties hereto acknowledge
and agree that the salary payable by Plexus to Executive, in her capacity as
president and chief executive officer of Plexus, during the period from July 1,
2002 through the date hereof, was reduced by an aggregate amount of $83,600 (the
"Deferred Compensation"). The Corporation shall pay Executive 50% of the
Deferred Compensation at the Closing, 25% of the Deferred Compensation on or
before August 10, 2003 and 25% of the Deferred Compensation on or before October
10, 2003.
4. Employee Benefits. During the Term, Executive shall be entitled to the
employee benefits including vacation, 401(k) plan, health plan and other
insurance benefits made generally available by the Corporation to employees of
the Corporation.
5. Expenses. The Corporation shall reimburse Executive for actual
out-of-pocket expenses incurred by her in the performance of her services for
the Corporation upon the receipt of appropriate documentation of such expenses.
6. Termination.
(a) General. The Initial Term shall end immediately upon Executive's
death. The Initial Term may also end for Cause or Disability, as defined in
Section 7.
(b) Notice of Termination. Promptly after it ends the Initial Term,
the Corporation shall give Executive notice of the termination, including a
statement of whether the termination was for Cause or Disability (as defined in
Section 7(a) and 7(b) below). The Corporation's failure to give notice under
this Section 6(b) shall not, however, affect the validity of the Corporation's
termination of the Initial Term.
2
(c) Effective Termination by the Corporation. If the Corporation (i)
reassigns Executive's base of operations outside of San Diego, California, or
(ii) materially reduces Executive's duties during the Initial Term, including
replacing Executive as President, or (ii) materially breaches the Corporation's
obligations under this Agreement, then, at her option, Executive may treat such
reduction in duties or relocation or breach as a termination of the Initial Term
without Cause by the Corporation and as "Good Reason" for Executive to resign.
7. Severance Benefits.
(a) Cause Defined. "Cause" means (i) willful malfeasance or willful
misconduct by Executive in connection with her employment; (ii) Executive's
gross negligence in performing any of her duties under this Agreement; (iii)
Executive's conviction of, or entry of a plea of guilty to, or entry of a plea
of nolo contendre with respect to, any crime other than a traffic violation or
infraction which is a misdemeanor; (iv) Executive's material breach of any
written policy applicable to all employees adopted by the Corporation which is
not cured to the reasonable satisfaction of the Corporation within fifteen (15)
business days after notice thereof; or (v) material breach by Executive of any
of her agreements in this Agreement which is not cured to the reasonable
satisfaction of the Corporation within fifteen (15) business days after notice
thereof.
(b) Disability Defined. "Disability" shall mean Executive's
incapacity due to physical or mental illness that results in her being
substantially unable to perform her duties hereunder for six consecutive months
(or for six months out of any nine month period). During a period of Disability,
Executive shall continue to receive the Base Salary hereunder, provided that if
the Corporation provides Executive with disability insurance coverage, payments
of the Base Salary shall be reduced by the amount of any disability insurance
payments received by Executive due to such coverage. The Corporation shall give
Executive written notice of termination which shall take effect sixty (60) days
after the date it is sent to Executive unless Executive shall have returned to
the performance of her duties hereunder during such sixty (60) day period
(whereupon such notice shall become void).
(c) Termination. If the Corporation ends the Initial Term for Cause
or Disability, or if Executive resigns as an employee of the Corporation for
reasons other than Good Reason as provided in Section 6(c), or if Executive
dies, then the Corporation shall have no obligation to pay Executive any amount,
whether for salary, benefits, bonuses, or other compensation or expense
reimbursements of any kind, accruing after the end of the Term, and such rights
shall, except as otherwise required by law, be forfeited immediately upon the
end of the Term. Payments under Section 3(a) shall continue for the remainder of
the Initial Term unless the Corporation ends the Initial Term for Cause or if
Executive resigns for reasons other than Good Reason as provided in Section
6(c). If the Corporation ends the Initial Term without Cause, or if Executive
resigns for Good Reason as provided in Section 6(c), then the Corporation will
be obligated to continue to pay Executive's salary and all other amounts due
hereunder for the remainder of the Initial Term.
(d) Change of Control Payment. The provision of this Section 7(d)
set forth the terms of an agreement reached between Executive and the
Corporation regarding Executive's rights and obligations upon the occurrence of
a "Change in Control" (as hereinafter defined) of
3
the Corporation. These provisions are intended to assure and encourage in
advance Executive's continued attention and dedication to her assigned duties
and her objectivity during the pendency and after the occurrence of any such
Change in Control. These provisions shall apply in lieu of, and expressly
supersede, the provisions of Section 7(c) if Executive's employment is
terminated or Notice of Termination is given ninety (90) days prior to or within
twelve (12) months after the occurrence of an event constituting a Change in
Control.
(i) Escrow. Within ten (10) days after the occurrence of the
first event constituting a Change in Control (irrespective of whether
Executive has actual knowledge of such event), the Corporation shall place
immediately negotiable funds in escrow in an amount equal to the greater
of (A) Executive's salary and all other amounts due hereunder for the
remainder of the Term, plus such additional amount as equals the "Gross Up
Payment" (as hereinafter defined) thereon (the "Change of Control Amount")
and (B) the amount of Executive's annual base salary at such time (the
"Annual Salary Amount"). Such escrow shall be conducted pursuant to a
standard escrow agreement among the Corporation, Executive and an
independent escrow agent providing for the timely payment to Executive of
the amounts hold in such escrow in the event Executive becomes entitled
thereto under the applicable provisions of this Agreement (the "Escrow
Arrangement"). The Escrow Arrangement shall be maintained until the
earlier of (A) twelve months and one day after the occurrence of an event
constituting a Change in Control or (B) the payment to Executive of all
sums escrowed.
(ii) Change in Control. If, within 90 days prior to, or within
twelve (12) months after the occurrence of an event constituting a Change
in Control, Executive's employment is terminated or a Notice of
Termination is given for any reason other than (A) her death, (B) her
Disability, or (C) by Executive other than for Good Reason, then such
termination shall be deemed to be a "Termination Due to Change in Control"
(herein so called), in which event the Corporation shall pay Executive, in
a lump sum, on or prior to the fifth (5th) day following the date of
termination of the Term:
(A) an amount equal to the greater of the Change of
Control Amount (including any Gross Up Payment)
and the Annual Salary Amount; and
(B) Executive's accrued and unpaid Base Salary.
(iii) Stock Option Floor. Upon the occurrence of the first
event constituting a Change in Control, all stock options and other
stock-based grants to Executive by the Corporation shall, irrespective of
any provisions of her option agreements, immediately and irrevocably vest
and become exercisable as of the date of such first event whereupon, at
any time during the Option Term as defined in the option agreements,
Executive or her estate may by five (5) days' advance written notice given
to the Corporation, and irrespective of whether Executive is then employed
by the Corporation or then living, and solely at the election of Executive
or her estate, require the Corporation to:
4
(A) within thirty (30) days of a request by Executive
or her estate file and cause to become effective a
Form S-8 (or other appropriate form) with the
Securities and Exchange Commission ("SEC")
registering for resale all shares underlying stock
options granted to Executive and outstanding with
all fees and expenses of such filing being paid by
the Corporation; or
(B) allow Executive to exercise all or any part of
such Stock Options at the option prices therefor
specified in the grant of the Stock Options.
(iv) Gross Up Payment.
(A) Excess Parachute Payment. If Executive incurs the
tax (the "Excise Tax") imposed by Section 4999 of
the Internal Revenue Code of 1986 (the "Code") on
"Excess Parachute Payments" within the meaning of
Section 280G(b)(1) of the Code, the Corporation
will pay to Executive an amount (the "Gross Up
Payment") such that the net amount retained by
Executive, after deduction of any Excise Tax on
both the Excess Parachute Payment and any federal,
state and local income tax (together with
penalties and interest) as well as the Excise Tax
upon the payment provided for by this Section
7(d)(iv)(A), will be equal to the Change of
Control Amount.
(B) Applicable Rates. For purposes of determining the
amount of the Gross Up Payment, Executive will be
deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the
calendar year in which the Gross Up Payment is to
be made and state and local income taxes at the
highest marginal rates of taxation in the state
and locality where taxes thereon are lawfully due,
net of the maximum reduction (if any) in federal
income taxes that could be obtained from deduction
of deductible state and local taxes.
(C) Determination of Gross Up Payment Amount. The
determination of whether the Excise Tax is payable
and the amount thereof will be based upon the
opinion of tax counsel selected by Executive and
reasonably approved by the Corporation, which
approval will not be unreasonably withheld or
delayed. If such opinion is not finally accepted
by the Internal Revenue Service (or state and
local taxing authorities), then appropriate
adjustments to the Excise Tax
5
will be computed and additional Gross Up Payments
will be made in the manner provided by this
Section 7(d)(iv).
(D) Payment. The Corporation will pay the estimated
amount of the Gross Up Payment in cash to
Executive at the time specified in this Agreement.
Executive and the Corporation agree to reasonably
cooperate in the determination of the actual
amount of the Gross Up Payment. Further, Executive
and the Corporation agree to make such adjustments
to the estimated amount of the Gross Up Payment as
may be necessary to equal the actual amount of the
Gross Up Payment, which in the case of the
Corporation will refer to refunds of prior
overpayments by the Corporation and in the case of
Executive will refer to additional payments to
Executive to make up for prior underpayments.
(v) Definitions. For purposes of this Section 7, the following
terms shall have the following meanings:
(A) "Change in Control" shall mean any of the
following:
(1) the acquisition by any individual, entity,
or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act)
(the "Acquiring Person"), other than the
Corporation, or any of its Subsidiaries or
any Excluded Group (as defined herein), of
beneficial ownership (within the meaning of
Rule l3d-3 promulgated under the Exchange
Act) of 35% or more of the combined voting
power or economic interests of the then
outstanding voting securities of the
Corporation entitled to vote generally in
the election of directors; provided,
however, that any transfer from any director
or executive officer listed in the
Corporation's Form 10-KSB for the year ended
December 31, 2002 under "Security Ownership
of Certain Beneficial Owners" (the "Excluded
Group") will not result in a Change in
Control if such transfer was part of a
series of related transactions the effect of
which, absent the transfer to such Acquiring
Person by the Excluded Group, would not have
resulted in the acquisition by such
Acquiring Person of 35% or more of the
combined voting power or economic interests
of the then outstanding voting securities;
or
6
(2) during any period of 12 consecutive months
after the date of this Agreement, the
individuals who at the beginning of any such
12-month period constituted a majority of
the Directors (the "Incumbent Non-Investor
Majority") cease for any reason to
constitute at least a majority of such
Directors; provided that (i) any individual
becoming a director whose election, or
nomination for election by the Corporation's
stockholders, was approved by a vote of the
stockholders having the right to designate
such director and (ii) any director whose
election to the Board or whose nomination
for election by the stockholders of the
Corporation was approved by the requisite
vote of directors entitled to vote on such
election or nomination in accordance with
the Restated Certificate of Incorporation of
the Corporation, shall, in each such case,
be considered as though such individual were
a member of the Incumbent Non-Investor
Majority, but excluding, as a member of the
Incumbent Non-Investor Majority, any such
individual whose initial assumption of
office, is in connection with an actual or
threatened election contest relating to the
election of the directors of the Corporation
(as such terms are used in Rule 14a-2 of
Regulation 14A promulgated under the
Exchange Act) and further excluding any
person who is an affiliate or associate of
an Acquiring Person having acquired within
the preceding 12 months, or proposing to
acquire, beneficial ownership of 25% or more
of the combined voting power of the then
outstanding voting securities of the
Corporation entitled to vote generally in
the election of directors; or
(3) the approval by the stockholders of the
Corporation of a reorganization, merger or
consolidation, in each case, with respect to
which all or substantially all of the
individuals and entities who were the
respective beneficial owners of the voting
securities of the Corporation immediately
prior to such reorganization, merger, or
consolidation do not, following such
reorganization, merger, or consolidation,
beneficially own, directly or indirectly,
more than 50% of the combined voting power
of the then outstanding voting securities
entitled to vote generally in the election
of directors
7
of. the Corporation resulting from such
reorganization, merger, or consolidation; or
(4) the sale or other disposition of assets
representing 50% or more of the assets of
the Corporation in one transaction or series
of related transactions not initiated or
commenced by any person within the Excluded
Group; or
(5) a "Fundamental Change in Business" as
hereinafter defined; or
(6) a "Hostile Takeover" as hereinafter defined
is declared.
(B) "Fundamental Change in Business" shall mean that
the Corporation, at any time, no longer spends at
least fifty percent (50%) of its annual budget on
activities related to biotechnology or
pharmaceuticals.
(C) "Hostile Takeover" shall mean any Change in
Control which at any time is declared by at least
a majority of the Board, directly or indirectly,
to be hostile or not in the best interests of the
Corporation, or in which an attempt is made
(irrespective of whether successful) to wrest
control away from the incumbent management of the
Corporation and, with respect to which, the Board
makes efforts to resist.
(vi) Satisfactory Alternative. Notwithstanding anything to the
contrary herein, Executive shall have no rights and the Corporation shall
have no obligation under this Section 7(d) with respect to a Termination
Due to Change in Control if, prior to or simultaneously with such
Termination Due to Change in Control, Executive is offered employment
within 50 miles of the existing Plexus facility in San Diego, California
by another business at a level of compensation equal to or greater than
her compensation hereunder.
8. Confidentiality, Ownership, and Covenants. Executive acknowledges and
agrees that the Corporation would not consummate the transactions contemplated
by the Asset Purchase Agreement without the assurance that Executive will not
engage in any of the activities prohibited by this Section 8, and will otherwise
comply with this Section 8, for the periods set forth herein. Executive agrees
to restrict her actions as provided for in this Section 8. Executive further
acknowledges that the scope and duration of the covenants set forth in this
Section 8 are reasonable in light of the specific nature and duration of the
transactions contemplated by the Asset Purchase Agreement and the shares of
Common Stock to be issued to her in connection with the liquidation and
dissolution of Plexus pursuant to the terms of the Asset Purchase Agreement. In
consideration thereof, Executive agrees that she will not assert in any forum
that
8
the provisions of this Section 8 prevent her from earning a living or otherwise
are void or unenforceable or should be held void or unenforceable.
(a) "Corporation Information" and "Inventions" Defined. "Corporation
Information" means all information, knowledge or data of or pertaining to (i)
the Corporation, its employees and all work undertaken on behalf of the
Corporation, and (ii) any other person, firm, corporation or business
organization with which the Corporation may do business during the Term, that
(as to both (i) and (ii) above) is not in the public domain (and whether
relating to methods, processes, techniques, discoveries, pricing, marketing or
any other matters). "Inventions" collectively refers to any and all inventions,
trade secrets, ideas, processes, formulas, source and object codes, data,
programs, other works of authorship, know-how, improvements, research,
discoveries, developments, designs, and techniques regarding any of the
foregoing.
(b) Confidentiality. (i) Executive hereby recognizes that the value
of all trade secrets and other proprietary data and all other information of the
Corporation not in the public domain disclosed by the Corporation in the course
of her employment with the Corporation may be attributable substantially to the
fact that such confidential information is maintained by the Corporation in
strict confidentiality and secrecy and would be unavailable to others without
the expenditure of substantial time, effort or money. Executive, therefore,
except as provided in the next two sentences, covenants and agrees that all
Corporation Information shall be kept secret and confidential at all times
during the Term and for the five (5) year period after the end of the Term and
shall not be used or divulged by her outside the scope of her employment as
contemplated by her Agreement, except as the Corporation may otherwise expressly
authorize by action of the Board. In the event that Executive is requested in a
judicial, administrative or governmental proceeding to disclose any of the
Corporation Information, Executive will promptly so notify the Corporation so
that the Corporation may seek a protective order of other appropriate remedy
and/or waive compliance with this Agreement. If disclosure of any of the
Corporation Information is required, Executive may furnish the material so
required to be furnished, but Executive will furnish only that portion of the
Corporation Information that legally is required.
(ii) Executive also hereby agrees to keep the terms of this
Agreement confidential to the same extent that the Corporation maintains such
confidentiality (except with regard to any disclosure by the Corporation
required under applicable securities laws).
(c) Ownership of Inventions, Patents and Technology. Executive
hereby assigns to the Corporation all of Executive's rights (including patent
rights, copyrights, trade secret rights, and all other rights throughout the
world), title and interest in and to Inventions, whether or not patentable or
registrable under copyright or similar statutes, made or conceived or reduced to
practice or learned by Executive, either alone or jointly with others, during
the course of the performance of services for the Corporation. Executive shall
also assign to, or as directed by, the Corporation, all of Executive's right,
title and interest in and to any and all Inventions, the full title to which is
required to be in the United States government of any of its agencies. The
Corporation shall have all right, title and interest in all research and work
product produced by Executive as an employee of the Corporation, including, but
not limited to, all research materials and lab books.
9
(d) Non-Competition Period Defined. "Non-Competition Period" means
the period beginning at the end of the Term and ending one (1) year after the
end of the Term.
(e) Covenants Regarding the Term and Non-Competition Period.
Executive acknowledges and agrees that her services pursuant to this Agreement
are unique and extraordinary; that the Corporation will be dependent upon
Executive for research, development and marketing expertise; and that she will
have access to and control of confidential information of the Corporation.
Executive further acknowledges that the business of the Corporation is
international in scope and cannot be confined to any particular geographic area.
Executive further acknowledges that the scope and duration of the restrictions
set forth in this Section 8(e) are reasonable in light of the specific nature
and duration of the transactions contemplated by the Asset Purchase Agreement
and the shares of Common Stock to be issued to her in connection with the
liquidation and dissolution of Plexus pursuant to the terms of the Asset
Purchase Agreement. For the foregoing reasons and to induce the Corporation to
enter this Agreement, Executive covenants and agrees that, subject to Section
8(h), during the Term and the Non-Competition Period Executive shall not unless
with written consent of the Corporation:
(i) engage in any business directly related to the research
and development of the products or processes in which the Corporation is
engaged in during the Term or in any other business conducted by the
Corporation during the Term (collectively the "Prohibited Activity") in
the World for her own account;
(ii) become interested in any individual, corporation,
partnership or other business entity (a "Person") engaged in any
Prohibited Activity in the world, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal, agent,
employee, trustee, consultant or in any other relationship or capacity;
provided, however, that Executive may own directly or indirectly, solely
as an investment, securities of any Person which are traded on any
national securities exchange if Executive (x) is not a controlling person
of, or a member of a group which controls, such person or (y) does not,
directly or indirectly, own 5% or more of any class of securities of such
person; or
(iii) directly or indirectly hire, employ or retain any person
who at any time during the last two months of the Term was an employee of
the Corporation or directly or indirectly solicit, entice, induce or
encourage any such person to become employed by any other person.
(f) Remedies. Executive hereby acknowledges that the covenants and
agreements contained in Section 8 are reasonable and valid in all respects and
that the Corporation is entering into this Agreement, inter alia, on such
acknowledgement. If Executive breaches, or threatens to commit a breach, of any
of the restrictive covenants set forth in this Agreement (the "Restrictive
Covenants"), the Corporation shall have the following rights and remedies, each
of which rights and remedies shall be independent of the other and severally
enforceable, and all of which rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available to the Corporation under
law or in equity: (i) the right and remedy to have the Restrictive Covenants
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will
10
cause irreparable injury to the Corporation and that money damages will not
provide an adequate remedy to the Corporation; and (ii) the right and remedy to
require Executive to account for and pay over to the Corporation such damages as
are recoverable at law as the result of any transactions constituting a breach
of any of the Restrictive Covenants.
(g) Jurisdiction. The parties intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Covenants. If the courts of
any one or more such jurisdictions hold the Restrictive Covenants wholly
unenforceable by reason of the breadth of such scope or otherwise, it is the
intention of the parties that such determination not bar or in any way affect
the Corporation's right to the relief provided above in the courts of any other
jurisdiction, within the geographical scope of such Covenants, as to breaches of
such Covenants in such other respective jurisdiction such Covenants as they
relate to each jurisdiction being, for this purpose, severable into diverse and
independent covenants.
(h) Executive's agreements and covenants under Section 8(e) shall
automatically terminate if (i) the Corporation ends the Initial Term without
Cause, (ii) Executive resigns for Good Reason as provided in Section 6(c) or
(iii) the Initial Term expires on December 31, 2005 in accordance with the terms
of this Agreement.
9. Successors and Assigns.
(a) Executive. This Agreement is a personal contract, and the rights
and interests that the Agreement accords to Executive may not be sold,
transferred, assigned, pledged, encumbered, or hypothecated by her. All rights
and benefits of Executive shall be for the sole personal benefit of Executive,
and no other person shall acquire any right, title or interest under this
Agreement by reason of any sale, assignment, transfer, claim or judgement or
bankruptcy proceedings against Executive. Except as so provided, this Agreement
shall inure to the benefit of and be binding upon Executive and her personal
representatives, distributes and legatees.
(b) The Corporation. This Agreement shall be binding upon the
Corporation and inure to the benefit of the Corporation and of its successors
and assigns, including (but not limited to) any corporation that may acquire all
or substantially all of the corporation's assets or business or into or with
which the Corporation may be consolidated or merged. In the event that the
Corporation sells all or substantially all of its assets, merges or
consolidates, otherwise combines or affiliates with another business, dissolves
and liquidates, or otherwise sells or disposes of substantially all of its
assets and Executive does not elect to treat any such transaction as a
termination by the Corporation without Cause pursuant to Section 7(c), then this
Agreement shall continue in full force and effect. The Corporation's obligations
under this Agreement shall cease, however, if the successor to, the purchaser or
acquirer either of the Corporation or of all or substantially all of its assets,
or the entity with which the Corporation has affiliated, shall assume in writing
the Corporation's obligations under this Agreement (and deliver and executed
copy of such assumption to Executive), in which case such successor or
purchaser, but not the Corporation, shall thereafter be the only party obligated
to perform the obligations that remain to be performed on the part of the
Corporation under this Agreement.
11
10. Entire Agreement. This Agreement represents the entire agreement
between the parties concerning Executive's employment with the Corporation and
supersedes all prior negotiations, discussions, understanding and agreements,
whether written or oral, between Executive and the Corporation relating to the
subject matter of this Agreement.
11. Amendment or Modification, Waiver. No provision of this Agreement may
be amended or waived unless such amendment or waiver is agreed to in writing
signed by Konatich and by a duly authorized officer of the Corporation. No
waiver by any party to this Agreement or any breach by another party of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same time, any prior time or any subsequent time.
12. Notices. Any notice to be given under this Agreement shall be in
writing and delivered personally or sent by overnight courier or registered or
certified mail, postage prepaid, return receipt requested, addressed to the
party concerned at the address indicated below, or to such other address of
which such party subsequently may give notice in writing:
If to Executive: Susan K. Burgess, Ph.D.
14321 Twin Peaks Road
Poway, CA 92064
If to the Corporation: SIGA Technologies, Inc.
420 Lexington Avenue
Suite 601
New York, NY 10170
Fax: 212-697-3130
Attention: Thomas N. Konatich
with a copy to: Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022
Attention: James A. Grayer, Esq.
Any notice delivered personally or by overnight courier shall be deemed given on
the date delivered and any notice sent by registered or certified mail, postage
prepaid, return receipt requested, shall be deemed given on the date mailed.
13. Severability. If any provision of this Agreement or the application of
any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid and unenforceable to any extent,
the remainder of this Agreement or the application of such provision to such
person or circumstances other than those to which it is so determined to be
invalid and unenforceable shall not be affected, and each provision of this
Agreement shall be validated and shall be enforced to the fullest extent
permitted by law. If for any reason any provision of this Agreement containing
restrictions is held to cover an area or to be for a length of time that is
unreasonable or in any other way is construed to be too broad or to any extent
invalid, such provision shall not be determined to be entirely null, void and of
no effect; instead, it is the intention and desire of both the Corporation and
Executive that, to the extent that the provision is or would be valid or
enforceable under applicable law, any court of
12
competent jurisdiction shall construe and interpret or reform this Agreement to
provide for a restriction having the maximum enforceable area, time period and
such other constraints or conditions (although not greater than those contained
currently contained in this Agreement) as shall be valid and enforceable under
the applicable law.
14. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
15. Headings. All descriptive headings of sections and paragraphs in this
Agreement are intended solely for convenience of reference, and no provision of
this Agreement is to be construed by reference to the heading of any section or
paragraph.
16. Withholding Taxes. All salary, benefits, reimbursements and any other
payments to Executive under this Agreement shall be subject to all applicable
payroll and withholding taxes and deductions required by any law, rule or
regulation of and federal, state or local authority.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together constitute one and same instrument.
18. Applicable Law; Arbitration. The validity, interpretation and
enforcement of this Agreement and any amendments or modifications hereto shall
be governed by the laws of the State of New York, as applied to a contract
executed within and to be performed in such State. The parties agree that any
disputes shall be definitively resolved by binding arbitration before in
accordance with the Rules of the American Arbitration Association, with the
arbitration hearing to be held in New York, New York. The parties hereby consent
to the jurisdiction to the federal courts of the Southern District of New York
or, if there shall be no jurisdiction, to the state courts located in New York
County, New York, to enforce any arbitration award rendered with respect
thereto. Each party shall choose one neutral arbitrator and the two neutral
arbitrators shall choose a third neutral arbitrator. All costs and fees related
to such arbitration (and judicial enforcement proceedings, if any) shall be
borne and allocated by and between the parties as the arbitrators decide is
appropriate, with the intent that the party who is the most unsuccessful should
bear most (or all) of said costs and fees.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SIGA TECHNOLOGIES, INC.
By: /s/ Thomas N. Konatich
---------------------------------
Thomas N. Konatich
Chief Executive Officer and
Chief Financial Officer
/s/ Susan K. Burgess
---------------------------------
Susan K. Burgess, Ph.D.
14
EXHIBIT A
SIGA TECHNOLOGIES, INC.
Incentive Stock Option Agreement
Granting Date: May 23, 2003
To: Susan K. Burgess, Ph.D.:
We are pleased to notify you that SIGA TECHNOLOGIES, INC., a
Delaware corporation (the "Corporation"), has granted to you (the "Holder") an
incentive stock option (the "Option") under the Corporation's Amended and
Restated 1996 Incentive and Non-Qualified Stock Option Plan (the "Plan") to
purchase all or any part of an aggregate of 300,000 shares of Common Stock of
the Corporation (the "Optioned Shares"), subject to the terms and conditions of
this Agreement.
1. Vesting, Term and Exercise of Option. Subject to the provisions
of this Agreement, this Option may be exercised for up to the number of vested
Optioned Shares (subject to adjustment as provided in Section 6 hereof) by you
on or prior to the tenth anniversary of the Granting Date ("Last Exercise Date")
at an initial exercise price (the "Exercise Price") of $1.81 per share (subject
to adjustment as provided in Section 6 hereof) and all as subject to Plan and
this Agreement. The Holder may exercise this Option according to the following
vesting schedule: this Option shall become exerciseable with respect to the
first 100,000 Optioned Shares on May 23, 2003, with respect to the second
100,000 Optioned Shares on May 23, 2004 and with respect to the remaining
100,000 Optioned Shares on May 23, 2005. Any portion of the Option that you do
not exercise shall accumulate and can be exercised by you any time prior to the
Last Exercise Date. You may not exercise your Option to purchase a fractional
share or fewer than 100 shares, and you may only exercise your Option by
purchasing shares in increments of 100 shares unless the remaining shares
purchasable are less than 100 shares.
This Option may be exercised by delivering to the Secretary of the
Corporation (i) a written Notice of Intention to Exercise in the form attached
hereto as Appendix A signed by you and specifying the number of Optioned Shares
you desire to purchase, (ii) payment, in full, of the Exercise Price for all
such Optioned Shares in cash, certified check, surrender of shares of Common
Stock of the Corporation having a value equal to the exercise price of the
Optioned Shares as to which you are exercising this Option, provided that such
surrendered shares, if previously acquired by exercise of a Company stock
option, have been held by you at least six months prior to their surrender, or
by means of a brokered cashless exercise. As a holder of an option, you shall
have the rights of a shareholder with respect to the Optioned Shares only after
they shall have been issued to you upon the exercise of this Option. Subject to
the terms and provisions of this Agreement and the Plan, the Corporation shall
use its best efforts to cause the Optioned Shares to be issued as promptly as
practicable after receipt of your Notice of Intention to Exercise.
2. Non-transferability of Option. This Option shall not be
transferable and may be exercised during your lifetime only by you. Any
purported transfer or assignment of this Option shall be void and of no effect,
and shall give the Corporation the right to terminate this Option as of the date
of such purported transfer or assignment. No transfer of an Option by will
or by the laws of descent and distribution shall be effective unless the
Corporation shall have been furnished with written notice thereof, and such
other evidence as the Corporation may deem necessary to establish the validity
of the transfer and conditions of the Option, and to establish compliance with
any laws or regulations pertaining thereto.
3. Certain Rights and Restrictions With Respect to Common Stock. The
Optioned Shares which you may acquire upon the exercise of this Option will not
be registered under the Securities Act of 1933, as amended, or under state
securities laws and the resale by you of such Optioned Shares will, therefore,
be restricted. You will be unable to transfer such Optioned Shares without
either registration under such Act and compliance with applicable state
securities laws or the availability of an exemption therefrom. Accordingly, you
represent and warrant to the Corporation that all shares of Common Stock you may
acquire upon the exercise of this Option will be acquired by you for your own
account for investment and that you will not sell or otherwise dispose of any
such shares except in compliance with all applicable federal and state
securities laws. The Corporation may place a legend to such effect upon each
certificate representing Optioned Shares acquired by you upon the exercise of
this Option.
4. Disputes. Any dispute which may arise under or as a result of or
pursuant to this Agreement shall be finally and conclusively determined in good
faith by the Board of Directors of the Corporation in its sole discretion, and
such determination shall be binding upon all parties.
5. Termination of Status.
(a) This Option is a separate incentive and not in lieu of
salary or other compensation. The Optioned Shares do not vest you with any right
to employment with the Corporation, nor is the Corporation's right to terminate
your employment in any way restricted by this Agreement. Subject to the
following provisions of this Section 5, the Option will terminate upon and will
not be exercisable after termination of your employment with the Corporation
("Employment Termination Date"). If your employment with the Corporation is
terminated for any reason other than death or disability, this Option may not be
exercised after the earlier of (i) ninety (90) days from the Employment
Termination Date or (ii) the Expiration Date, and may not be exercised for more
than the number of Optioned Shares purchasable under Section 1 on the Employment
Termination Date.
(b) If you die while this Option is exercisable, or within a
period of three months after the Employment Termination Date, the Option may be
exercised by the duly authorized executor of your last will or by the duly
authorized administrator of your estate, but may not be exercised after the
earlier of (i) one year from the date of your death or (ii) the Expiration Date,
and may not be exercised for more than the number of Optioned Shares purchasable
under Section 1 on the date of your death.
(c) If your employment is terminated as a result of your
permanent disability, this Option may not be exercised after the earlier of (i)
one year from the Employment Termination Date, or (ii) the Expiration Date, and
may not be exercised for more than the number of Optioned Shares purchasable
under Section 1 on the Employment Termination Date.
If you die after the date your employment is terminated under the provisions of
this Section 5(c) but before the Expiration Date, the provisions of Section 5(b)
above shall apply.
Permanent disability shall mean a disability described in Section
422(c)(6) of the Code. The existence of a Disability shall be determined by the
Committee in its absolute discretion.
6. Adjustments to Exercise Price and Number of Securities. If the
Corporation shall at any time subdivide or combine the outstanding shares of
Common Stock, or similar corporate events the Exercise Price and the number of
shares subject to the Option shall be appropriately adjusted.
7. Reservation and Listing of Securities. The Corporation shall at
all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of this Option, such
number of shares of Common Stock or other securities, properties or rights as
shall be issuable upon the exercise thereof. The Corporation covenants and
agrees that, upon exercise of this Option and payment of the Exercise Price
therefor, all shares of Common Stock and other securities issuable upon such
exercise shall be duly and validly issued, fully paid, non-assessable and not
subject to the preemptive rights of any stockholder. As long as this Option
shall be outstanding, the Corporation shall use its best efforts to cause all
shares of Common Stock issuable upon the exercise of the Option to be listed
(subject to official notice of issuance) on all securities exchanges on which
the Common Stock may then be listed and/or quoted on NASDAQ.
8. Forfeiture of Option Gains. If at any time within one year after
the exercise of all or any portion of the Option the Committee determines that
the Corporation has been materially harmed by you, which harm either (a) results
in your being terminated for Cause or (b) results from your engaging in any
activity determined by the Committee, in its sole discretion, to be in
competition with any activity of the Corporation, or otherwise inimical,
contrary or harmful to the interests of the Corporation (including, but not
limited to, violating any non-competition or similar agreements entered into
with the Corporation or otherwise accepting employment with or serving as a
consultant, adviser or in any other capacity to an entity that is in competition
with or acting against the interests of the Corporation), then upon notice from
the Corporation to you any gain ("Gain") realized by you upon exercising such
Option shall be paid by you to the Corporation. For purposes of this Section 7,
such Gain shall be the excess of the Fair Market Value of the shares of Company
Stock obtained through such exercise as of the date of option exercise over the
purchase price of such shares. The Corporation shall have the right to offset
such Gain against any amounts otherwise owed to you by the Corporation
(including, but not limited to wages, vacation pay, or pursuant to any benefit
plan or other compensatory arrangement).
9. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made and
sent when delivered, or mailed by registered or certified mail, return receipt
requested:
(a) If to the registered Holder of this Option, to the address
of the Holder as shown on the books of the Corporation; or
(b) If to the Corporation, to 420 Lexington Avenue, Suite 601,
New York, NY 10017, or to such other address as the Corporation may
designate by notice to the Holders.
10. Supplements and Amendments. The Corporation and the Holder may
from time to time supplement or amend this Agreement in any respect, provided,
however, that no amendment may adversely affect your rights hereunder without
your written consent.
11. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Corporation, the Holder
and their respective successors and assigns hereunder.
12. Governing Law. This Agreement shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
construed in accordance with the laws of the State of New York without giving
effect to the rules of the State of New York governing the conflicts of laws.
13. Entire Agreement; Modification. This Agreement, together with
the Asset Purchase Agreement, including all schedules and exhibits hereto and
thereto, contains the entire understanding between the parties hereto with
respect to the subject matter hereof.
14. Severability. If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
15. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
16. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Corporation and
the registered Holder of this Option any legal or equitable right, remedy or
claim under this Agreement; and this Agreement shall be for the sole and
exclusive benefit of the Corporation and the Holder.
17. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
[Signature page follows immediately]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be dully executed, as of the day and year first written.
SIGA TECHNOLOGIES, INC.
By:
------------------------------------
Name: Thomas N. Konatich
Title: Acting Chief Executive
Officer and Chief Financial
Officer
----------------------------------------
Susan K. Burgess, Ph.D.
Appendix A
NOTICE OF INTENTION TO EXERCISE STOCK OPTIONS
The undersigned grantee of a SIGA Technologies, Inc. Stock Option Agreement
dated as of ______________________ to purchase _________ shares of common stock,
par value $.0001 per share, of SIGA Technologies, Inc. ("Common Stock") hereby
gives notice of her or her intention to exercise the Stock Option (or a portion
thereof) and elects to purchase shares of Common Stock.
Shares should be issued in the name of the undersigned and should be sent to the
undersigned at:
_____________________________
_____________________________
_____________________________
_____________________________
Dated this _____ day of __________________.
Social Security Number: __________________
Name: ____________________________________
__________________________________________
Signature
INSTRUCTIONS: The exercise of these Stock Options is effective on the date SIGA
Technologies, Inc. has received (1) this Notice of Intention to Exercise Stock
Options, and (2) payment in full in cash of the exercise price for all shares
being purchased pursuant to this Notice.