SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
SIGA Technologies, Inc.
----------------------------
(Name of issuer)
Common Stock, par value $0.0001 per share
---------------------------------------------
(Title of class of securities)
826917-10-6
-----------------
(CUSIP number)
Barry F. Schwartz
35 East 62nd Street
New York, New York 10021
(212) 572-8600
--------------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
October 8, 2003
----------------------------
(Date of event which requires
filing of this statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following pages)
13D
CUSIP No. 826917-10-6 Page 2 of 16 Pages
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Mafco Holdings Inc.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES --------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 5,535,385
EACH --------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH --------------------------------------
10. SHARED DISPOSITIVE POWER
5,535,385
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,535,385
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.6%
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14. TYPE OF REPORTING PERSON
CO
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13D
CUSIP No. 826917-10-6 Page 3 of 16 Pages
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
MacAndrews & Forbes Holdings Inc.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES --------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 5,535,385
EACH --------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH --------------------------------------
10. SHARED DISPOSITIVE POWER
5,535,385
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,535,385
--------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
--------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.6%
--------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
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13D
CUSIP No. 826917-10-6 Page 4 of 16 Pages
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
TransTech Pharma, Inc.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
-------------------------------------------------------------------
3. SEC USE ONLY
-------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
-------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
-------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 5,208,333
SHARES --------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH --------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 5,208,333
WITH --------------------------------------
10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,208,333
--------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
--------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.8%
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14. TYPE OF REPORTING PERSON
CO
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This statement ("Amendment No. 1") amends and supplements
the statement on Schedule 13D, dated August 13, 2003, filed by Mafco Holdings
Inc., a Delaware corporation ("Mafco"), and MacAndrews & Forbes Holdings Inc.,
a Delaware corporation ("Holdings") (the "Schedule 13D"), relating to the
shares of common stock, par value $0.0001 per share ("Common Stock"), of SIGA
Technologies, Inc., a Delaware corporation (the "Company"). This Amendment No.
1 is being filed by Mafco, Holdings and TransTech Pharma, Inc., a Delaware
corporation ("TransTech"), with respect to shares of Common Stock that may be
deemed to be beneficially owned by the Reporting Persons (as defined below).
The Company has its principal executive offices at 420 Lexington Avenue, Suite
601, New York, New York 10170. Capitalized terms used herein shall have the
meanings ascribed to them in the Schedule 13D unless otherwise defined herein.
Item 2. Identity and Background.
-----------------------
The response to Item 2 is amended by deleting it in its
entirety and substituting the following in lieu thereof:
This statement is being filed by Mafco, Holdings and
TransTech (collectively, the "Reporting Persons") with respect to shares of
Common Stock that may be deemed to be beneficially owned by the Reporting
Persons. Mafco is a holding company whose sole stockholder is Ronald O.
Perelman. Holdings is a holding company and a direct wholly owned subsidiary
of Mafco. TransTech is a corporation in which Mr. Perelman has a direct
ownership interest. Mr. Perelman disclaims beneficial ownership of the
securities deemed to be beneficially owned by TransTech.
The business address of the Reporting Persons (other than
TransTech) is 35 East 62nd Street, New York, New York 10021. The business
address of TransTech is 4170 Mendenhall Oaks Parkway, Suite 110, High Point,
North Carolina 27265.
Schedule I attached hereto sets forth certain additional
information with respect to each director and executive officer of the
Reporting Persons (the "Schedule I Persons") and is incorporated herein by
reference.
To the knowledge of the Reporting Persons, during the last
five years neither the Reporting Persons, nor any of the Schedule I Persons,
nor The Gittis Family Foundation, a charitable foundation referred to in Item
5, (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) was a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violations with respect to
such laws.
Each of the Reporting Persons is a Delaware corporation. All
of the Schedule I Persons are citizens of the United States of America.
Page 5 of 16
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The following is added to the response to Item 3:
On October 14, 2003, following delivery by Holdings and its
assignees of written notice pursuant to the Purchase Agreement on October 8,
2003 (the "Option Exercise Notice"), as more fully described in Item 4 below,
pursuant to the terms of the Purchase Agreement (as modified by the Assignment
Letter Agreement and the TransTech Assignment Letter Agreement (as defined
below)), the Reporting Persons (other than TransTech) acquired certain
securities of the Company for an aggregate purchase price of $2,010,905, which
funds were obtained from cash on hand.
On October 14, 2003, following delivery by Holdings and its
assignees of the Option Exercise Notice, as more fully described in Item 4
below, pursuant to the terms of the Assignment Letter Agreement and the
Purchase Agreement, Barry F. Schwartz, Executive Vice President and General
Counsel of Mafco and Holdings, and Todd J. Slotkin, Executive Vice President
and Chief Financial Officer of Mafco and Holdings and a Director of TransTech,
each acquired certain securities of the Company for a purchase price of
approximately $45,000, which funds were obtained from personal funds.
On October 8, 2003, as more fully described in Item 4 below,
the Reporting Persons exercised their option to purchase additional securities
of the Company for an aggregate amount of $6,840,595, subject to the
conditions described in Item 4 below, which funds (i) Mafco and Holdings
expect to obtain from cash on hand, and (ii) TransTech expects to obtain from
the proceeds of a private placement of its equity securities.
Item 4. Purpose of Transaction.
----------------------
The following is added to the response to Item 4:
On October 8, 2003, the Company, Holdings and TransTech
entered into a Letter Agreement (the "TransTech Assignment Letter Agreement"),
pursuant to which Holdings assigned to TransTech a portion of the Option under
the Purchase Agreement to purchase certain shares of Common Stock and
Warrants. See Item 6.
On October 14, 2003, following delivery by Holdings and
its assignees of the Option Exercise Notice, (A) Holdings acquired from the
Company (x) 1,396,462 shares of Common Stock at a price of $1.44 per share
and (y) a Warrant (the "Tranche B-1 Warrant"), for no additional
consideration, to purchase 698,232 shares of Common Stock, for an aggregate
purchase price of $2,010,905, and (B) Messrs. Schwartz and Slotkin each
purchased (x) 31,250 shares of Common Stock at a price of $1.44 per share
and (y) a Warrant, for no additional consideration, to purchase 15,625
shares of Common Stock, for an aggregate purchase price of $45,000. A copy
of the Option Exercise Notice is attached hereto as Exhibit 13 and a copy
of the Tranche B-1 Warrant is attached hereto as Exhibit 14. The
descriptions of the Option Exercise Notice and the Tranche B-1
Page 6 of 16
Warrant are qualified in their entirety by reference to
the Option Exercise Notice and the Tranche B-1 Warrant, respectively.
In addition, pursuant to the Option Exercise Notice, (A)
Holdings also exercised the remaining portion of its Option to purchase (x)
1,278,191 shares of Common Stock at a price of $1.44 per share and (y) a
Warrant (the "Tranche B-2 Warrant"), for no additional consideration, to
purchase 639,095 shares of Common Stock, for an aggregate purchase price of
$1,840,595, and (B) TransTech exercised the portion of the Option assigned to
it pursuant to the TransTech Assignment Letter Agreement (the "TransTech
Option") to purchase (x) 3,472,222 shares (the "TransTech Shares") of Common
Stock at a price of $1.44 per share and (y) a Warrant (the "TransTech
Warrant"), for no additional consideration, to purchase 1,736,111 shares of
Common Stock, for an aggregate purchase price of $5,000,000. The closing for
the transactions described in this paragraph will only take place following
the approval of the Company's stockholders required by Rule 4350.
The TransTech Assignment Letter Agreement amended the
provision of the Purchase Agreement with respect to the appointment of
individuals to the Board of Directors of the Company to provide that at such
time as Holdings and TransTech have invested an aggregate of $5,000,000 or
more in Common Stock and, with respect to the Holdings Representative (as
defined below), for so long as Holdings, together with its affiliates (other
than TransTech), beneficially owns at least 1,700,000 shares of Common Stock
(as appropriately adjusted for any stock split, combination, reorganization,
recapitalization, reclassification, stock dividend, stock distribution or
similar event), and, with respect to the TransTech Representative (as defined
below), for so long as TransTech, together with its affiliates (other than
Holdings, its officers or affiliates), beneficially owns at least 1,700,000
shares of Common Stock (as appropriately adjusted for any stock split,
combination, reorganization, recapitalization, reclassification, stock
dividend, stock distribution or similar event), the Company will use its
reasonable best efforts to appoint to its Board of Directors one individual
designated by Holdings (the "Holdings Representative") and one individual
designated by TransTech (the "TransTech Representative" and together with the
Holdings Representative, the "Investor Representatives"). The initial Investor
Representatives are to be those individuals that are designated by Holdings or
TransTech, as the case may be, following fulfillment of the conditions
described in this paragraph, and they are to serve until their successors are
duly elected. Thereafter, the Investor Representatives are to be elected at
the same time as other members of the Company's Board of Directors. If for any
reason the Holdings Representative or the TransTech Representative resigns or
is otherwise removed from the Company's Board of Directors, then the Company
will use its reasonable best efforts to appoint, as his or her replacement,
the individual designated by Holdings or TransTech, as the case may be.
Item 5. Interest in Securities of the Issuer.
------------------------------------
The response to Item 5(a) - (b) is amended by deleting the
first, second and fifth paragraphs thereof and substituting the following in
lieu thereof:
Page 7 of 16
Based upon information contained in the Company's Quarterly
Report on Form 10-QSB for the quarter ended June 30, 2003, there were
17,149,682 shares of Common Stock outstanding as of August 13, 2003.
As a result of the transactions described in Item 4, the
Reporting Persons (other than TransTech) may be deemed to share beneficial
ownership of 5,535,385 shares of Common Stock, representing approximately
25.6% of the Common Stock deemed to be outstanding as of October 14, 2003
(which includes certain shares of Common Stock deemed to be beneficially
owned by the Reporting Persons (other than TransTech) but not outstanding).
The Reporting Persons (other than TransTech) have shared power to vote and
dispose of the shares of Common Stock that they own or, in the case of
certain securities, would own upon issuance following the approval of the
Company's stockholders pursuant to Rule 4350, and exercise of the Warrants
held by such Reporting Persons.
In addition, TransTech may be deemed to have beneficial
ownership of 5,208,333 shares of Common Stock, representing approximately
21.8% of the Common Stock deemed to be outstanding as of October 14, 2003
(which includes certain shares of Common Stock deemed to be beneficially owned
by TransTech but not outstanding). TransTech would have sole power to vote and
dispose of such shares of Common Stock upon issuance, following the approval
of the Company's stockholders pursuant to Rule 4350, of the TransTech Shares
and exercise of the TransTech Warrant.
As a result of the transactions described in Item 4, as of
October 14, 2003, Messrs. Schwartz and Slotkin may each be deemed to have
beneficial ownership of 52,083 shares of Common Stock, representing less than
0.3% of the Common Stock deemed to be outstanding (which includes certain
shares of Common Stock deemed to be beneficially owned by Messrs. Schwartz or
Slotkin, as applicable, but not outstanding). Each of Messrs. Schwartz and
Slotkin have sole power to vote and dispose of the shares of Common Stock that
he owns or would own upon exercise of the Warrants described herein.
As of October 14, 2003, although the number of shares of
Common Stock that may be deemed to be beneficially owned by Mr. Drapkin, who
is also a Director of TransTech, remained the same, as a result of the
transactions described in Item 4, his deemed beneficial ownership decreased
from 9.6% to 8.9% of the Common Stock deemed to be outstanding as of such date
(which includes certain shares of Common Stock deemed to be beneficially owned
by Mr. Drapkin but not outstanding).
As of October 14, 2003, although the number of shares of
Common Stock that may be deemed to be beneficially owned by Mr. Gittis
remained the same, as a result of the transactions described in Item 4, his
deemed beneficial ownership decreased from 5.8% to 5.3% of the Common Stock
deemed to be outstanding as of such date (which includes certain shares of
Common Stock deemed to be beneficially owned by Mr. Gittis but not
outstanding).
Page 8 of 16
Based on documents publicly filed, Dr. Eric Rose, a Director
of the Company and TransTech, may be deemed to beneficially own 790,090 shares
of Common Stock, representing approximately 4.1% of the Common Stock deemed to
be outstanding as of October 14, 2003 (which includes certain shares of Common
Stock deemed to be beneficially owned by Dr. Rose but not outstanding). Dr.
Rose holds an aggregate of 101,480 shares of Common Stock and may purchase up
to an aggregate of approximately 688,610 additional shares of Common Stock
pursuant to the May 2001 Investor Warrant, the September 2001 Rose Investor
Warrant and the Rose Options (each as defined below). Dr. Rose has the sole
power to vote and dispose of the shares of Common Stock that he owns or would
own upon exercise of the May 2001 Investor Warrant, the September 2001 Rose
Investor Warrant and Rose Options.
William V. Buccella, Senior Vice President - Legal Affairs
and Secretary of TransTech owns 900 shares of Common Stock, representing less
than 0.1% of the Common Stock deemed to be outstanding as of October 14, 2003.
Mr. Buccella has the sole power to vote and dispose of the shares of Common
Stock that he owns.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
----------------------------------------
The following is added to the response to Item 6:
For a discussion of the TransTech Assignment Letter
Agreement and the Option Exercise Notice, see Item 4.
On October 8, 2003, pursuant to the TransTech Assignment
Letter Agreement and the Purchase Agreement, Holdings assigned to TransTech,
and TransTech exercised, the TransTech Option.
A copy of the TransTech Assignment Letter Agreement is
attached hereto as Exhibit 15, a copy of the Assigned Tranche B Warrant held
by Mr. Schwartz is attached hereto as Exhibit 16 and a copy of the Assigned
Tranche B Warrant held by Mr. Slotkin is attached hereto as Exhibit 17. The
descriptions of the TransTech Assignment Letter Agreement, the Assigned
Tranche B Warrant held by Mr. Schwartz and the Assigned Tranche B Warrant held
by Mr. Slotkin are qualified in their entirety by reference to the TransTech
Assignment Letter Agreement, the Assigned Tranche B Warrant held by Mr.
Schwartz and the Assigned Tranche B Warrant held by Mr. Slotkin, respectively.
Dr. Rose holds a warrant to purchase up to 50,000 shares of
Common Stock (the "May 2001 Investor Warrant"). The May 2001 Investor Warrant
is exercisable for a period of seven years at an exercise price of $2.94 per
share. The May 2001 Investor Warrant provides that, with certain limited
exceptions, it is not exercisable if, as a result of such exercise, the number
of shares of Common Stock beneficially owned by the holder thereof and its
affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unexercised portion of such warrant) would
exceed 9.99% of the outstanding shares of Common Stock (the "9.99%
Page 9 of 16
Limit"). Dr. Rose also holds a warrant to purchase up to 38,610 shares of
Common Stock (the "September 2001 Rose Investor Warrant"). The September 2001
Rose Investor Warrant is exercisable for a period of seven years at an
exercise price of $3.552 per share and contains provisions analogous to the
9.99% Limit described above; provided, however, that the 9.99% Limit shall not
apply (i) during the existence of a tender offer for the Rose Common Stock or
(ii) at the option of Dr. Rose, on at least 65 days' advance written notice,
with respect to the September 2001 Rose Investor Warrant. In addition, Dr.
Rose holds options (the "Rose Options") pursuant to the Company's Amended and
Restated 1996 Incentive and Non-Qualified Stock Option Plan, dated August 15,
2001, to purchase 600,000 shares of Common Stock at an exercise price of $2.50
per share.
The form of the May 2001 Investor Warrant is attached hereto
as Exhibit 18 and the form of the September 2001 Rose Investor Warrant is
attached hereto as Exhibit 19. The descriptions of the May 2001 Investor
Warrant and the September 2001 Rose Investor Warrant are qualified in their
entirety by reference to the form of the May 2001 Investor Warrant and the
form of the September 2001 Rose Investor Warrant, respectively.
Item 7. Material to be Filed as Exhibits.
--------------------------------
Exhibit 1 is amended and restated in its entirety and
Exhibits 13 through 19 are added to the response to Item 7.
Exhibit 1 Amended and Restated Agreement of Joint
Filing of Schedule 13D (filed herewith).
Exhibit 13 Option Exercise Notice dated October 8,
2003 (filed herewith).
Exhibit 14 Tranche B-1 Common Stock Purchase Warrant
(filed herewith).
Exhibit 15 Letter Agreement, by and among the
Company, Holdings and TransTech, dated
October 8, 2003 (incorporated by reference
to Exhibit 10(ggg) to the Current Report
on Form 8-K, filed by the Company on
October 9, 2003).
Exhibit 16 Tranche B Common Stock Purchase Warrant
held by Barry F. Schwartz (filed
herewith).
Exhibit 17 Tranche B Common Stock Purchase Warrant
held by Todd J. Slotkin (filed herewith).
Page 10 of 16
Exhibit 18 Form of May 2001 Investor Warrant held by
Dr. Eric Rose (incorporated by reference
to Exhibit L to Amendment No. 2 to the
Schedule 13D filed by Donald G. Drapkin on
June 4, 2001).
Exhibit 19 Form of September 2001 Investor Warrant
held by Dr. Eric Rose (incorporated
by reference to Exhibit R to Amendment No.
4 to the Schedule 13D filed by Donald G.
Drapkin on October 3, 2001).
Page 11 of 16
SIGNATURES
----------
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information in this statement is true, complete and
correct.
Dated: October 14, 2003
MAFCO HOLDINGS INC.
MACANDREWS & FORBES HOLDINGS INC.
By: /s/ Barry F. Schwartz
--------------------------------
Name: Barry F. Schwartz
Title: Executive Vice President
and General Counsel
Dated: October 14, 2003
TRANSTECH PHARMA, INC.
By: /s/ William V. Buccella
--------------------------------
Name: William V. Buccella
Title: Senior Vice President -
Legal Affairs and
Secretary
Page 12 of 16
AMENDED AND RESTATED SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF MAFCO HOLDINGS INC., MACANDREWS & FORBES HOLDINGS INC. AND
TRANSTECH PHARMA, INC.
The name, business address, present principal occupation or
employment, and the name, principal business and address of any corporation or
other organization in which such employment is conducted, of each of the
directors and executive officers of Mafco Holdings Inc., MacAndrews & Forbes
Holdings Inc. and TransTech Pharma, Inc. are set forth below. If no business
address is given for a director or officer of Mafco Holdings Inc. or
MacAndrews & Forbes Holdings Inc., the director's or officer's address is
Mafco Holdings Inc., 35 East 62nd Street, New York, New York 10021. If no
business address is given for a director or officer of TransTech Pharma, Inc.,
the director's or officer's address is TransTech Pharma, Inc., 4170 Mendenhall
Oaks Parkway, Suite 110, High Point, North Carolina 27265.
MAFCO HOLDINGS INC.
Name and Position
(if different from
Principal Occupation Present Principal Occupation or
or Employment) Employment and Address
- ------------- ----------------------
Ronald O. Perelman Director, Chairman and Chief Executive Officer of Mafco
Holdings Inc.
Donald G. Drapkin Director and Vice Chairman of Mafco Holdings Inc.
Howard Gittis Director and Vice Chairman of Mafco Holdings Inc.
Barry F. Schwartz Executive Vice President and General Counsel of Mafco
Holdings Inc.
Todd J. Slotkin Executive Vice President and Chief Financial Officer of
Mafco Holdings Inc.
Page 13 of 16
MACANDREWS & FORBES HOLDINGS INC.
Name and Position
(if different from Present Principal Occupation or
Principal Employment) Employment and Address
- --------------------- ----------------------
Ronald O. Perelman Director, Chairman and
Director, Chairman and Chief Executive Officer of
Chief Executive Officer Mafco Holdings Inc.
Donald G. Drapkin Director and Vice Chairman of Mafco
Director and Vice Chairman Holdings Inc.
Howard Gittis Director and Vice Chairman of Mafco
Director and Vice Chairman Holdings Inc.
Barry F. Schwartz Executive Vice President and
Executive Vice President and General Counsel of Mafco
General Counsel Holdings Inc.
Todd J. Slotkin Executive Vice President and
Executive Vice President Chief Financial Officer of
and Chief Financial Officer Mafco Holdings Inc.
Page 14 of 16
TRANSTECH PHARMA, INC.
Name and Position
(if different from Present Principal Occupation or
Principal Employment) Employment and Address
- --------------------- ----------------------
Adnan M. M. Mjalli, Ph.D. Director, President and Chief Executive Officer
Eric Rose, M.D. Valentine Mott/Johnson and Johnson Professor and
Director Chairman of the Department of Surgery at Columbia
University and Surgeon-in-Chief of The Presbyterian
Hospital
Donald G. Drapkin Director and Vice Chairman of Mafco
Director Holdings Inc.
Todd J. Slotkin Executive Vice President and Chief Financial Officer
Director of Mafco Holdings Inc.
Nehad Baker President and Chief Executive Officer of Baker Trading
Director Company
William V. Buccella Senior Vice President - Legal Affairs and Secretary
Stephen L. Holcomb Senior Vice President - Chief Financial Officer and
Treasurer
Stephen J. Ireland Senior Vice President - Business Development
Page 15 of 16
Exhibit Index
Exhibit 1 is amended and restated in its entirety and
Exhibits 13 through 19 are added to the response to the Exhibit Index as
follows:
Exhibit Document
------- --------
1 Amended and Restated Agreement of Joint Filing of Schedule
13D (filed herewith).
13 Option Exercise Notice dated October 8, 2003 (filed
herewith).
14 Tranche B-1 Common Stock Purchase Warrant (filed herewith).
15 Letter Agreement, by and among the Company, Holdings and
TransTech, dated October 8, 2003 (incorporated by
reference to Exhibit 10(ggg) to the Current Report
on Form 8-K, filed by the Company on October 9, 2003).
16 Tranche B Common Stock Purchase Warrant held by Barry F.
Schwartz (filed herewith).
17 Tranche B Common Stock Purchase Warrant held by Todd J.
Slotkin (filed herewith).
18 Form of May 2001 Investor Warrant held by Dr. Eric Rose
(incorporated by reference to Exhibit L to Amendment No. 2
to the Schedule 13D filed by Donald G. Drapkin on June 4,
2001).
19 Form of September 2001 Investor Warrant held by Dr. Eric
Rose (incorporated by reference to Exhibit R to Amendment
No. 4 to the Schedule 13D filed by Donald G. Drapkin on
October 3, 2001).
EXHIBIT 1
AMENDED AND RESTATED AGREEMENT OF
JOINT FILING OF SCHEDULE 13D
The undersigned hereby agree to jointly prepare and file with regulatory
authorities Amendment Number 1 ("Amendment No. 1") to the statement on
Schedule 13D, dated August 13, 2003, filed by Mafco Holdings Inc. and
MacAndrews & Forbes Holdings Inc., and any subsequent amendments thereto
reporting each of the undersigned's ownership of securities of SIGA
Technologies, Inc. and hereby affirm that such Amendment No. 1 is being filed
on behalf of each of the undersigned.
Dated: October 14, 2003 MAFCO HOLDINGS INC.
By: /s/ Barry F. Schwartz
----------------------------------
Name: Barry F. Schwartz
Title: Executive Vice President
and General Counsel
Dated: October 14, 2003 MACANDREWS & FORBES HOLDINGS INC.
By: /s/ Barry F. Schwartz
----------------------------------
Name: Barry F. Schwartz
Title: Executive Vice President
and General Counsel
Dated: October 14, 2003 TRANSTECH PHARMA, INC.
By: /s/ William V. Buccella
----------------------------------
Name: William V. Buccella
Title: Senior Vice President -
Legal Affairs and Secretary
EXHIBIT 13
MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10021
October 8, 2003
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 601
New York, New York 10170
Attention: Thomas N. Konatich
Dear Mr. Konatich:
Reference is made to the Securities Purchase Agreement (the
"Purchase Agreement"), dated August 13, 2003, by and between SIGA
Technologies, Inc. (the "Company") and MacAndrews & Forbes Holdings Inc. ("M &
F"), as supplemented by those letter agreements dated August 13, 2003 and
October 8, 2003 by which M & F assigned in part its right to purchase Shares
and Warrants to certain Permitted Transferees (the "Assignees") as set forth
on Schedule A thereto. Capitalized terms used but not defined herein shall
have the meanings set forth in the Purchase Agreement.
In accordance with Section 3(b) of the Purchase Agreement, M
& F and the Assignees hereby deliver this Option Notice with respect to (A) an
aggregate of 6,250,000 Tranche B Shares, at the Per Share Purchase Price, and
(B) for no additional consideration, Tranche B Warrants to purchase an
aggregate of 3,125,000 Warrant Shares. In accordance with Section 4(c) of the
Purchase Agreement, a Closing with respect to (x) an aggregate of 1,499,587
Tranche B Shares, at the Per Share Purchase Price, and (y) for no additional
consideration, Tranche B Warrants to purchase an aggregate of 749,794 Warrant
Shares (together, "Tranche B-1") shall occur on the Tranche B Closing Date and
a Closing with respect to (i) an aggregate of 4,750,413 Tranche B Shares, at
the Per Share Purchase Price, and (ii) for no additional consideration,
Tranche B Warrants to purchase an aggregate of 2,375,206 Warrant Shares
(together, "Tranche B-2") shall occur immediately following receipt of the
Required Stockholder Approval. The allocation of the Tranche B Shares and
Tranche B Warrants among M & F and the Assignees is described in more detail
on Schedule A hereto.
Subject to the satisfaction of the conditions set forth in
Section 8 of the Purchase Agreement, we are prepared to fund the Tranche B-1
Aggregate Purchase Price without the need for the three or five business day
periods set forth in Sections 4(a) and (c), respectively, of the Purchase
Agreement.
* * * * *
Sincerely,
MACANDREWS & FORBES HOLDINGS INC.
By: /s/ Howard Gittis
-----------------------------------
Name: Howard Gittis
Title: Vice Chairman
[SIGNATURE PAGE TO OPTION EXERCISE]
MICHAEL C. BOROFSKY
/s/ Michael C. Borofsky
- -------------------------
[SIGNATURE PAGE TO OPTION EXERCISE]
MATTHEW A. DRAPKIN
/s/ Matthew A. Drapkin
- -----------------------
[SIGNATURE PAGE TO OPTION EXERCISE]
PAUL G. SAVAS
/s/ Paul G. Savas
- ------------------
[SIGNATURE PAGE TO OPTION EXERCISE]
BARRY F. SCHWARTZ
/s/ Barry F. Schwartz
- ----------------------
[SIGNATURE PAGE TO OPTION EXERCISE]
TODD J. SLOTKIN
/s/ Todd J. Slotkin
- --------------------
[SIGNATURE PAGE TO OPTION EXERCISE]
TransTech Pharma, Inc.
By: /s/ Adnan Mjalli
-----------------------------------
Name: Adnan Mjalli
Title: President and Chief Executive
Officer
[SIGNATURE PAGE TO OPTION EXERCISE]
Schedule A
----------
Tranche B-1 Exercise
--------------------
- ------------------------------- --------------- ----------------------------------------------- ------------
Aggregate purchase price which Purchaser is
Number of to pay for Tranche B Shares at the Per Share Number of
Tranche B Purchase Price (Tranche B Warrants to be Tranche B
Name of Purchaser Shares issued for no additional consideration) Warrants
- ------------------------------- --------------- ----------------------------------------------- ------------
M & F 1,396,462 $2,010,905.28 698,232
- ------------------------------- --------------- ----------------------------------------------- ------------
Michael C. Borofsky 12,500 $18,000.00 6,250
- ------------------------------- --------------- ----------------------------------------------- ------------
Matthew A. Drapkin 12,500 $18,000.00 6,249
- ------------------------------- --------------- ----------------------------------------------- ------------
Paul G. Savas 15,625 $22,500.00 7,813
- ------------------------------- --------------- ----------------------------------------------- ------------
Barry F. Schwartz 31,250 $45,000.00 15,625
- ------------------------------- --------------- ----------------------------------------------- ------------
Todd J. Slotkin 31,250 $45,000.00 15,625
- ------------------------------- --------------- ----------------------------------------------- ------------
TOTAL 1,499,587 $2,159,405.28 749,794
- ------------------------------- --------------- ----------------------------------------------- ------------
Tranche B-2 Exercise
--------------------
- ------------------------------- --------------- ---------------------------------------------- -------------
Aggregate purchase price which Purchaser is
Number of to pay for Tranche B Shares at the Per Share Number of
Tranche B Purchase Price (Tranche B Warrants to be Tranche B
Name of Purchaser Shares issued for no additional consideration) Warrants
- ------------------------------- --------------- ---------------------------------------------- -------------
M & F 1,278,191 $1,840,595.04 639,095
- ------------------------------- --------------- ---------------------------------------------- -------------
TransTech Pharma 3,472,222 $4,999,999.68 1,736,111
- ------------------------------- --------------- ---------------------------------------------- -------------
TOTAL 4,750,413 $6,840,594.72 2,375,206
- ------------------------------- --------------- ---------------------------------------------- -------------
EXHIBIT 14
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES
LAWS, AND SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNDER SAID
ACT AND LAWS OR AN EXEMPTION THEREFROM.
SIGA TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
1. Issuance; Certain Definitions.
1.1 In consideration of good and valuable consideration,
the receipt of which is hereby acknowledged by SIGA TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), MacAndrews & Forbes Holdings Inc., a
Delaware corporation, or its registered assigns, is hereby granted the right
to purchase at any time until 5:00 P.M., New York City time, on the Expiration
Date, 698,232 fully paid and nonassessable shares of Common Stock, at an
initial exercise price per share (the "Exercise Price") of $2.00 per share,
subject to adjustment as set forth herein. The shares of Common Stock issued
upon exercise of this Warrant, as adjusted from time to time pursuant to
Section 6 hereof, are referred to as "Warrant Shares." This Warrant is being
issued pursuant to the terms and conditions of the Purchase Agreement.
1.2 As used in this Warrant, the following terms have the
respective meanings set forth below:
"Affiliate" means, with respect to any specified Person, (i) any
other Person 50% or more of whose Outstanding voting securities are directly
or indirectly owned, controlled or held with the power to vote by such
specified Person or (ii) any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person by virtue of ownership of
voting securities, by contract or otherwise.
"Appraisal Procedure" means the following procedure to determine the
fair market value, as to any security, for purposes of the definition of "Fair
Market Value" or the fair market value, as to any other property (in either
case, the "Valuation Amount"). The Valuation Amount shall be determined in
good faith jointly by the Board of Directors and the Holder; provided,
however, that if such parties are not able to agree on the Valuation Amount
within a reasonable period of time (not to exceed 20 Business Days) the
Valuation Amount shall be determined by an investment banking firm of national
reputation, which firm shall be reasonably acceptable to the Board of
Directors and the Holder. If the Board of Directors and the Holder are unable
to agree upon an acceptable investment banking firm within 10 days after the
date either party proposed that one be selected, the investment banking firm
will be selected by an arbitrator located in New York City, New York, selected
by the American Arbitration Association (or if such organization ceases to
exist, the arbitrator shall be chosen by a court of competent jurisdiction).
The arbitrator shall select the investment banking firm (within 10 days of his
appointment) from a list, jointly prepared by the Board of Directors and the
Holder, of not more than six investment banking firms of national reputation
in the United States, of which no more than three may be named by the Board of
Directors and no more than three may be named by the Holder. The arbitrator
may consider, within the 10-day period allotted, arguments from the parties
regarding which investment banking firm to choose, but the selection by the
arbitrator shall be made in its sole discretion from the list of six. The
Board of Directors and the Holder shall submit their respective valuations and
other relevant data to the investment banking firm, and the investment banking
firm shall, within 30 days of its appointment, make its own determination of
the Valuation Amount. The determination of the final Valuation Amount by such
investment banking firm shall be final and binding upon the parties. The
Company shall pay all of the fees and expenses of the investment banking firm
and arbitrator (if any) used to determine the Valuation Amount. If required by
any such investment banking firm or arbitrator, the Company shall execute a
retainer and engagement letter containing reasonable terms and conditions,
including, without limitation, customary provisions concerning the rights of
indemnification and contribution by the Company in favor of such investment
banking firm or arbitrator and its officers, directors, partners, employees,
agents and Affiliates.
"Board of Directors" means the board of directors of the Company.
"Business Day" means any day that is not a Saturday or Sunday or a
day on which banks are required or permitted to be closed in the State of New
York.
"Common Stock" means the Common Stock of the Company, par value
$0.0001 per share, as constituted on the Original Issue Date, and any capital
stock into which such Common Stock may thereafter be changed, and shall also
include (i) capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of any Common Stock upon any
reclassification thereof which is not preferred as to dividends or liquidation
over any other class of stock of the Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation received by or distributed to the holders of Common Stock of the
Company in the circumstances contemplated by Section 6.5 hereof.
"Company" has the meaning assigned to it in Section 1.1 hereof.
"Designated Office" has the meaning assigned to it in Section 11.2
hereof.
"Excluded Stock" has the meaning assigned to it in Section 6.10
hereof.
"Exercise Date" has the meaning assigned to it Section 2.1(a) hereof.
"Exercise Price" means, in respect of a share of Common Stock at any
date herein specified, the initial Exercise Price set forth in Section 1.1
hereof, as adjusted from time to time pursuant to Section 6 hereof.
2
"Expiration Date" means October 14, 2010.
"Fair Market Value" means, as to any security, the Twenty Day Average
of the average closing prices of such security's sales on all domestic
securities exchanges on which such security may at the time be listed, or, if
there have been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of such
day, or, if on any day such security is not so listed, the average of the
representative bid and asked prices quoted on The Nasdaq SmallCap Market as of
4:00 P.M., New York City time, on such day, or, if on any day such security is
not quoted on The Nasdaq SmallCap Market, the average of the highest bid and
lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar or
successor organization (and in each such case excluding any trades that are
not bona fide, arm's length transactions). If at any time such security is not
listed on any domestic securities exchange or quoted on The Nasdaq National
Market or the domestic over-the-counter market, the "Fair Market Value" of
such security shall be the fair market value thereof as determined in
accordance with the Appraisal Procedure, using any appropriate valuation
method, assuming an arms-length sale to an independent party.
"Form of Assignment" has the meaning assigned to it in Section 4.1
hereof.
"Governmental Entity" means any national, federal, state, municipal,
local, territorial, foreign or other government or any department, commission,
board, bureau, agency, regulatory authority or instrumentality thereof, or any
court, judicial, administrative or arbitral body or public or private
tribunal.
"Holder" means (a) with respect to this Warrant, the Person in whose
name the Warrant set forth herein is registered on the books of the Company
maintained for such purpose and (b) with respect to any other Warrant or
Warrant Shares, the Person in whose name such Warrant or Warrant Shares is
registered on the books of the Company maintained for such purpose.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing,
and the filing of, or agreement to give, any financing statement perfecting a
security interest under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Notice of Exercise" has the meaning assigned to it in Section 2.1(a)
hereof.
"Original Issue Date" means October 14, 2003.
"Original Warrants" means the Warrants originally issued by the
Company on October 14, 2003, pursuant to the Purchase Agreement.
"Outstanding" means, (a) when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common
3
Stock, except shares then owned or held by or for the account of the Company or
any Subsidiary, and shall include all shares issuable in respect of Outstanding
scrip or any certificates representing fractional interests in shares of Common
Stock and (b) when used with reference to Warrants, at any date as of which the
number thereof is to be determined, all issued Warrants.
"Permitted Transferee" means (i) any Affiliate of the Holder,
including, without limitation, directors, executives and officers of the
Holder, (ii) any member of the family of any Affiliate of the Holder,
including any such Person's spouse and descendants and any trust, partnership,
corporation, limited liability company or other entity for the benefit of such
spouse and/or descendants to whom or which any of the Securities have been
transferred by any such Person for estate or tax planning purposes, (iii) any
charity or foundation to which the Securities have been transferred by the
Holder or any Person or entity described in clause (i) or (ii) above for
estate or tax planning or charitable purposes, or (iv) the beneficiary of any
bona fide pledge by the Holder of any of the Securities.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, Governmental Entity or any other
entity.
"Purchase Agreement" means the Securities Purchase Agreement by and
between the Company and MacAndrews & Forbes Holdings Inc., dated August 13,
2003.
"Registration Rights Agreement" means the Registration Rights
Agreement by and between the Company and MacAndrews & Forbes Holdings Inc.,
dated August 13, 2003.
"Reserved Spin Off Securities" has the meaning assigned to it in
Section 6.2 hereof.
"SEC" means the U.S. Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the time.
"Spin Off Securities" has the meaning assigned to it in Section 6.2
hereof.
"Subsidiary" means, with respect to any Person, any corporation,
association trust, limited liability company, partnership, joint venture or
other business association or entity (i) at least 50% of the Outstanding
voting securities of which are at the time owned or controlled directly or
indirectly by such Person or (ii) with respect to which the Company possesses,
directly or indirectly, the power to direct or cause the direction of the
affairs or management of such Person.
"Transfer" means any disposition of any Warrant or Warrant Shares or
of any interest therein, which would constitute a "sale" thereof within the
meaning of the Securities Act.
"Twenty Day Average" means, with respect to any prices and in
connection with the calculation of Fair Market Value, the average of such
prices over the 20 Business Days
4
ending on the Business Day immediately prior to the day as of which Fair Market
Value is being determined.
"Warrant Price" means an amount equal to (i) the number of Warrant
Shares being purchased upon exercise of this Warrant pursuant to Sections 1
and 2 hereof, multiplied by (ii) the Exercise Price.
"Warrant Shares" has the meaning assigned to it in Section 1.1
hereof.
"Warrants" means the Original Warrants and all Warrants issued upon
transfer, division or combination of, or in substitution for, the Original
Warrants, or any other such Warrant subsequently issued to the Holder. All
Warrants shall at all times be identical as to terms and conditions, except as
to the Warrant Shares for which they may be exercised and their date of
issuance.
2. Exercise of Warrants.
2.1 Manner of Exercise.
(a) This Warrant is exercisable in whole or in part at
any time and from time to time on any Business Day from and after the Original
Issue Date and at any time until 5:00 P.M., New York time, on the Expiration
Date. Such exercise shall be effectuated by submitting to the Company at its
Designated Office (i) a completed and duly executed written notice of the
Holder's election to exercise this Warrant (a "Notice of Exercise")
(substantially in the form attached to this Warrant as Annex A) indicating the
Warrant Shares then being purchased pursuant to such exercise, together with
this Warrant and (ii) payment to the Company of the Warrant Price. The date on
which such delivery and payment shall have taken place being sometimes
referred to as the "Exercise Date."
(b) Upon receipt by the Company of such Notice of
Exercise, surrender of this Warrant and payment of the Warrant Price (in
accordance with Section 2.1(c) hereof), the Holder shall be entitled to
receive as promptly as practicable, and in any event within five Business Days
thereafter, a certificate or certificates for Warrant Shares so purchased in
such denomination or denominations as the exercising Holder shall reasonably
request in the Notice of Exercise, registered in the name of the Holder or,
subject to Section 4 hereof, such other name as shall be designated in the
Notice of Exercise, together with cash in lieu of any fraction of a share, as
provided in Section 2.3 hereof. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing the Warrant Shares being issued, deliver to the
Holder a new Warrant evidencing the rights of the Holder to purchase the
remaining Warrant Shares underlying this Warrant. Such new Warrant shall in
all other respects be identical to this Warrant. This Warrant shall be deemed
to have been exercised and such certificate or certificates of Warrant Shares
shall be deemed to have been issued, and the Holder or any other Person so
designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares for all purposes, as of the Exercise Date.
(c) Payment of the Warrant Price shall be made at the
option of the Holder by one or more of the following methods: (i) by delivery
of a certified or official bank
5
check or by wire transfer of immediately available funds in the amount of such
Warrant Price payable to the order of the Company, (ii) by instructing the
Company to withhold a number of Warrant Shares then issuable upon exercise of
this Warrant with an aggregate Fair Market Value equal to such Warrant Price,
(iii) by surrendering to the Company shares of Common Stock previously acquired
by the Holder with an aggregate Fair Market Value equal to such Warrant Price,
or (iv) any combination of the foregoing. In the event of any withholding of
Warrant Shares or surrender of Common Stock pursuant to clause (ii), (iii) or
(iv) above where the number of shares whose Fair Market Value is equal to the
Warrant Price is not a whole number, the number of shares withheld by or
surrendered to the Company shall be rounded up to the nearest whole share and
the Company shall make a cash payment to the Holder based on the incremental
fraction of a share being so withheld by or surrendered to the Company in an
amount determined in accordance with Section 2.3 hereof.
2.2 Payment of Taxes. All Warrant Shares issuable upon
the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable, issued without violation of any
preemptive or similar rights of any stockholder of the Company and free and
clear of all Liens. The Company shall pay all expenses in connection with, and
all taxes and other governmental charges that may be imposed with respect to,
the issue or delivery thereof. The Company shall not, however, be required to
pay any tax or governmental charge which may be issuable upon exercise of this
Warrant payable in respect of any Transfer involved in the issue and delivery
of Warrant Shares in a name other than that of the holder of the Warrants to
be exercised, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such
tax, or has established to the satisfaction of the Company that such tax has
been paid.
2.3 Fractional Shares. The Company shall not be required
to issue a fractional share of Common Stock upon exercise of any Warrant. As
to any fraction of a share that the Holder of one or more Warrants, the rights
under which are exercised in the same transaction, would otherwise be entitled
to purchase upon such exercise, the Company shall pay to such Holder an amount
in cash equal to such fraction multiplied by the Fair Market Value of one
share of Common Stock on the Exercise Date.
3. Reservation and Authorization of Common Stock. The
Company shall at all times during the term of this Warrant reserve 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. Before taking any action that would result in an adjustment in
the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction over such action. If any Warrant Shares
required to be reserved for issuance upon exercise of Warrants require
registration or qualification with any Governmental Entity (other than under
the Securities Act or any state securities law) before such shares may be so
issued, the Company will in good faith and as expeditiously as possible and at
its expense endeavor to cause such shares to be duly registered. Before taking
any action that would cause an adjustment reducing the Exercise Price below
the then par value (if any) of the shares of Common Stock deliverable upon
exercise of the Warrant or that would cause the
6
number of Warrant Shares issuable upon exercise of the Warrant to exceed (when
taken together with all other Outstanding shares of Common Stock) the number
Warrant Shares that the Company is authorized to issue, the Company will take
any corporate action that, in the opinion of its counsel, is necessary in order
that the Company may validly and legally issue the full number of fully paid and
non-assessable shares of Common Stock issuable upon exercise of the Warrant at
such adjusted exercise price.
4. Transfer, Assignment, Division, Combination, Mutilation
or Loss of Warrant.
4.1 Transfer or Assignment of Warrant. Subject to the
limitations set forth in Section 7 hereof, upon (a) surrender of this Warrant
to the Company at its Designated Office accompanied by a Form of Assignment
annexed hereto as Annex B (each, a "Form of Assignment") duly executed and
funds sufficient to pay any applicable transfer tax, and (b) delivery of an
opinion of counsel to the Holder reasonably satisfactory to the Company to the
effect that, in the opinion of such counsel, the transfer is exempt from the
registration requirements of the Securities Act (provided that no such opinion
shall be required in the event of a Transfer to a Permitted Transferee), the
Company shall, without charge, execute and deliver a new Warrant registered in
the name of the assignee named in the Form of Assignment at the address, and
evidencing the right to purchase the shares of Common Stock, specified in the
Form of Assignment, and the Warrant represented by this Warrant shall promptly
be cancelled.
4.2 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.
4.3 Division and Combination. Subject to compliance with
the applicable provisions of this Warrant, this Warrant may be divided or
combined with other Warrants upon presentation hereof at the Designated
Office, together with a written notice specifying the names and denominations
in which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with the applicable provisions of this Warrant
as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such
notice.
4.4 Expenses. The Company shall prepare, issue and
deliver at its own expense any new Warrant or Warrants required to be issued
hereunder.
4.5 Maintenance of Books. The Company agrees to maintain,
at the Designated Office, books for the registration and transfer of the
Warrants.
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
7
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 of Number of Shares Purchasable. Upon any
adjustment of the Exercise Price as provided in Sections 6.3 through 6.6
hereof, the Holders of the Warrants shall thereafter be entitled to purchase
upon the exercise thereof, at the Exercise Price resulting from such
adjustment, the number of shares of Common Stock (calculated to the nearest
1/100th of a share) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable on the exercise hereof immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.
6.2 Adjustment Upon Spin Off. If, at any time or from
time to time after the Original Issue Date, the Company shall spin off or
otherwise divest itself of a part of its business or operations or dispose of
all or of a part of its assets in a transaction in which the Company does not
receive compensation for such business, operations or assets, but causes
securities of another entity (the "Spin Off Securities") to be issued to
security holders of the Company, then the Company shall cause (i) to be
reserved a number of Spin Off Securities (the "Reserved Spin Off Securities")
equal to the number of Spin Off Securities that would have been issued to the
Holder had all of the Holder's Outstanding Warrants on the record date for
determining the number of Spin Off Securities to be issued to stockholders of
the Company been exercised as of the close of business on the trading day
immediately before such record date, and (ii) to be issued to the Holder on
the exercise of all or any of the Outstanding Warrants, a number of Reserved
Spin Off Securities equal to (x) the Reserved Spin Off Securities multiplied
by (y) a fraction, the numerator of which shall be the amount of the
Outstanding Warrants then being exercised, and the denominator of which shall
be the amount of the Outstanding Warrants.
6.3 Upon Stock Dividends, Subdivisions or Splits. If, at
any time or from time to time after the Original Issue Date, the number of
shares of Common Stock Outstanding is increased by a stock dividend payable in
shares of Common Stock or by a subdivision or split-up of shares of Common
Stock, then, following the record date for the determination of holders of
Common Stock entitled to receive such stock dividend, or to be affected by
such subdivision or split-up, the Exercise Price shall be appropriately
decreased by multiplying the Exercise Price by a fraction, the numerator of
which is the number of shares of Common Stock Outstanding immediately prior
to, and the denominator of which is the number of shares of Common Stock
Outstanding immediately after, such increase in Outstanding shares.
6.4 Upon Combinations or Reverse Stock Splits. If, at any
time or from time to time after the Original Issue Date, the number of shares
of Common Stock Outstanding is decreased by a combination or reverse stock
split of the Outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then, following the record date to determine shares
affected by such combination or reverse stock split, the Exercise Price shall
be appropriately increased by multiplying the Exercise Price by a
8
fraction, the numerator of which is the number of shares of Common Stock
Outstanding immediately prior to, and the denominator of which is the number of
shares of Common Stock Outstanding immediately after, such decrease in
Outstanding shares.
6.5 Upon Reclassifications, Reorganizations,
Consolidations or Mergers. If, at any time or from time to time after the
Original Issue Date, there is any capital reorganization of the Company, any
reclassification of the stock of the Company (other than a change in par value
or from par value to no par value or from no par value to par value or as a
result of a stock dividend or subdivision, split-up or combination of shares),
or any consolidation or merger of the Company with or into another Person
(where the Company is not the surviving Person or where there is a change in
or distribution with respect to the Common Stock), each Warrant shall after
such reorganization, reclassification, consolidation, or merger be exercisable
for the kind and number of shares of stock or other securities or property of
the Company or of the successor Person resulting from such consolidation or
surviving such merger, if any, to which the holder of the Warrant Shares
deliverable (immediately prior to the time of such reorganization,
reclassification, consolidation or merger) upon exercise of such Warrant would
have been entitled upon such reorganization, reclassification, consolidation
or merger. The provisions of this clause shall similarly apply to successive
reorganizations, reclassifications, consolidations, or mergers. The Company
shall not effect any such reorganization, reclassification, consolidation or
merger unless, prior to the consummation thereof, the successor Person (if
other than the Company) resulting from such reorganization, reclassification,
consolidation or merger, shall assume, by written instrument, the obligation
to deliver to the Holders of the Warrant such shares of stock, securities or
assets, which, in accordance with the foregoing provisions, such Holders shall
be entitled to receive upon such conversion.
6.6 Upon Issuance of Common Stock. If, at any time or
from time to time after the Original Issue Date, the Company shall issue any
shares of Common Stock, options to purchase or rights to subscribe for Common
Stock, securities by their terms convertible into or exchangeable for Common
Stock, or options to purchase or rights to subscribe for such convertible or
exchangeable securities, other than Excluded Stock, without consideration or
for consideration per share less than either (x) the Exercise Price in effect
immediately prior to such issuance or (y) the Fair Market Value per share of
the Common Stock immediately prior to such issuance, then such Exercise Price
shall forthwith be lowered to a price equal to the price obtained by
multiplying:
(i) the Exercise Price in effect immediately prior to the
issuance of such Common Stock, options, rights or securities by
(ii) a fraction of which (x) the numerator shall be the
sum of (A) the number of shares of Common Stock Outstanding on a
fully-diluted basis immediately prior to such issuance and (B) the
number of additional shares of Common Stock which the aggregate
consideration for the number of shares of Common Stock so offered
would purchase at the greater of the Exercise Price in effect
immediately prior to such issuance or the Fair Market Value per share
of Common Stock and (y) the denominator shall be the
9
number of shares of Common Stock Outstanding on a fully-diluted basis
immediately after such issuance.
6.7 Provisions Applicable to Adjustments. For purposes of
any adjustment of the Exercise Price pursuant to Section 6.6 hereof, the
following provisions shall be applicable:
(i) In the case of the issuance of Common Stock for cash
in a public offering or private placement, the consideration shall be
deemed to be the amount of cash paid therefor before deducting
therefrom any discounts, commissions or placement fees payable by the
Company to any underwriter or placement agent in connection with the
issuance and sale thereof.
(ii) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the Valuation Amount as
determined in accordance with the Appraisal Procedure.
(iii) In the case of the issuance of options to purchase
or rights to subscribe for Common Stock, securities by their terms
convertible into or exchangeable for Common Stock, or options to
purchase or rights to subscribe for such convertible or exchangeable
securities (except for options to acquire Excluded Stock):
(A) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of such options to
purchase or rights to subscribe for Common Stock shall be
deemed to have been issued at the time such options or
rights were issued and for a consideration equal to the
consideration (determined in the manner provided in
subparagraphs (i) and (ii) above), if any, received by the
Company upon the issuance of such options or rights plus the
minimum purchase price provided in such options or rights
for the Common Stock covered thereby;
(B) the aggregate maximum number of shares
of Common Stock deliverable upon conversion of or in
exchange for any such convertible or exchangeable securities
or upon the exercise of options to purchase or rights to
subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof shall be
deemed to have been issued at the time such securities,
options, or rights were issued and for a consideration equal
to the consideration received by the Company for any such
securities and related options or rights (excluding any cash
received on account of accrued interest or accrued
dividends), plus the minimum additional consideration,
10
if any, to be received by the Company upon the conversion or
exchange of such securities or the exercise of any related
options or rights (the consideration in each case to be
determined in the manner provided in paragraphs (i) and (ii)
above);
(C) on any change in the number of shares
or exercise price of Common Stock deliverable upon exercise
of any such options or rights or conversions of or exchanges
for such securities, other than a change resulting from the
anti-dilution provisions thereof, the Exercise Price shall
forthwith be readjusted to such Exercise Price as would have
been obtained had the adjustment made upon the issuance of
such options, rights or securities not converted prior to
such change or options or rights related to such securities
not converted prior to such change been made upon the basis
of such change;
(D) upon the expiration of any options to
purchase or rights to subscribe for Common Stock which shall
not have been exercised, the Exercise Price computed upon
the issuance thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments
based thereon, shall, upon such expiration, be recomputed as
if the only additional shares of Common Stock issued were
the shares of Common Stock, if any, actually issued upon the
exercise of such options to purchase or rights to subscribe
for Common Stock, and the consideration received therefor
was the consideration actually received by the Company for
the issue of the options to purchase or rights to subscribe
for Common Stock that were exercised, plus the consideration
actually received by the Company upon such exercise; and
(E) no further adjustment of the Exercise
Price adjusted upon the issuance of any such options,
rights, convertible securities or exchangeable securities
shall be made as a result of the actual issuance of Common
Stock on the exercise of any such rights or options or any
conversion or exchange of any such securities.
6.8 Deferral in Certain Circumstances. In any case in
which the provisions of this Section 6 shall require that an adjustment shall
become effective immediately after a record date of an event, the Company may
defer until the occurrence of such event (a) issuing to the Holder of any
Warrant exercised after such record date and before the occurrence of such
event the shares of capital stock issuable upon such exercise by reason of the
adjustment required by such event and issuing to such Holder only the shares of
11
capital stock issuable upon such exercise before giving effect to such
adjustments, and (b) paying to such Holder any amount in cash in lieu of a
fractional share of capital stock pursuant to Section 2.3 above; provided,
however, that the Company shall deliver to such Holder an appropriate
instrument or due bills evidencing such Holder's right to receive such
additional shares or such cash.
6.9 Appraisal Procedure. In any case in which the
provisions of this Section 6 shall necessitate that the Appraisal Procedure be
utilized for purposes of determining an adjustment to the Exercise Price, the
Company may defer until the completion of the Appraisal Procedure and the
determination of the adjustment (a) issuing to the Holder of any Warrant
exercised after the date of the event that requires the adjustment and before
completion of the Appraisal Procedure and the determination of the adjustment,
the shares of capital stock issuable upon such exercise by reason of the
adjustment required by such event and issuing to such Holder only the shares
of capital stock issuable upon such exercise before giving effect to such
adjustment and (b) paying to such Holder any amount in cash in lieu of a
fractional share of capital stock pursuant to Section 2.3 above; provided,
however, that the Company shall deliver to such Holder an appropriate
instrument or due bills evidencing such Holder's right to receive such
additional shares or such cash.
6.10 Exceptions. This Section 6 shall not apply to (a)
securities offered to the public pursuant to a public offering; (b) securities
issued to employees or directors of the Company pursuant to an employee stock
option plan or stock incentive plan approved by the Board of Directors; or (c)
securities Outstanding as of the date hereof (provided that the terms of such
securities will not be modified in any manner following the date hereof)
(collectively, "Excluded Stock").
6.11 Notice of Adjustment of Exercise Price. Whenever the
Exercise Price is adjusted as herein provided:
(i) the Company shall compute the adjusted Exercise Price
in accordance with this Section 6 and shall prepare a certificate
signed by the treasurer or chief financial officer of the Company
setting forth the adjusted Exercise Price and showing in reasonable
detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at each Designated Office; and
(ii) a notice stating that the Exercise Price has been
adjusted and setting forth the adjusted Exercise Price shall
forthwith be prepared by the Company and mailed to all Holders at
their last addresses as they shall appear in the warrant register.
7. Transfer to Comply with the Securities Act; Registration
Rights.
7.1 Transfer. This Warrant has not been registered under
the Securities 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
12
sold, transferred, pledged or hypothecated in the absence of an effective
registration statement under the Securities Act relating to such security or an
opinion of counsel satisfactory to the Company that registration is not required
under the Securities Act; provided, that, no registration statement or opinion
of counsel shall be required in the event of a Transfer to a Permitted
Transferee. Each 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 substantially the following form by which the Holder (and any
transferee thereof) shall be bound:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY OTHER SECURITIES LAWS, AND SUCH SECURITIES MAY NOT BE
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION UNDER SAID ACT AND LAWS OR AN
EXEMPTION THEREFROM.
7.2 Registration Rights. Reference is made to the
Registration Rights Agreement. The Company's obligations under the
Registration Rights Agreement and the other terms and conditions thereof with
respect to the Warrant Shares, including, but not limited to, the Company's
commitment to file registration statements 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. Notice Of Corporate Actions; Taking Of Record; Transfer
Books.
8.1 Notices of Corporate Actions. In case:
(a) of the Company granting to all of the holders of its
Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class; or
(b) of any reclassification of the Common Stock (other
than a subdivision or combination of the Outstanding shares of Common Stock),
or of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any stockholders of the Company is required,
or of the sale or transfer of all or substantially all of the assets of the
Company; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(d) of the commencement by the Company or any Subsidiary of
a tender offer for all or a portion of the Outstanding shares of Common Stock
(or the amending of any such tender offer to change the maximum number of shares
being sought or the amount or type of consideration being offered therefor);
13
then the Company shall cause to be filed at each office or agency maintained for
such purpose, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the warrant register, at least 30 days prior
to the applicable record, effective or expiration date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or granting of rights or warrants, or, if a record
is not to be taken, the date as of which the holders of Common Stock of record
who will be entitled to such dividend, distribution, rights or warrants are to
be determined, (y) the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up, or (z) the date on which such tender
offer commenced, the date on which such tender offer is scheduled to expire
unless extended, the consideration offered and the other material terms thereof
(or the material terms of the amendment thereto). Such notice shall also set
forth such facts with respect thereto as shall be reasonably necessary to
indicate the effect of such action on the Exercise Price and the number and kind
or class of shares or other securities or property which shall be deliverable or
purchasable upon the occurrence of such action or deliverable upon exercise of
the Warrants. Neither the failure to give any such notice nor any defect therein
shall affect the legality or validity of any action described in clauses (a)
through (d) of this Section 8.1.
8.2 Taking of Record. In the case of all dividends or
other distributions by the Company to the holders of its Common Stock with
respect to which any provision of hereof refers to the taking of a record of
such holders, the Company will in each such case take such a record and will
take such record as of the close of business on a Business Day.
8.3 Closing of Transfer Books. The Company shall not at
any time, except upon dissolution, liquidation or winding up of the Company,
close its stock transfer books or Warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any Warrant.
9. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage pre-paid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission, or, if mailed, two days after the date of deposit in the United
States mails, as follows:
(i) if to the Company, to:
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 601
New York, New York 10170
Attention: Thomas N. Konatich
Telephone No.: (212) 672-9100
Facsimile No.: (212) 697-3130
14
with a copy (which shall not constitute notice) to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
Attention: James A. Grayer, Esq.
Facsimile No.: (212) 715-8000
(ii) if to the Holder, to:
MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10021
Attention: Barry F. Schwartz, Esq.
Facsimile No.: (212) 572-8435
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10035
Attention: Franklin M. Gittes, Esq. and
Alan C. Myers, Esq.
Facsimile No.: (212) 735-2000
Any party may be given notice in accordance with this Section 9, unless such
party designates another address or person for receipt of notice hereunder.
10. No Impairment; Regulatory Compliance And Cooperation;
Notice Of Expiration. The Company shall not by any action, including, without
limitation, amending its charter documents or through any reorganization,
reclassification, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other similar voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder against impairment.
11. Miscellaneous.
11.1 Successors and Assigns. This Warrant shall inure to
the benefit of and be binding upon the successors and assigns of the Company,
the Holder and their respective successors and assigns. The Holder's rights
under this Warrant may be assigned, in whole or in part, to (a) any Permitted
Transferee, and any Permitted Transferee shall be deemed to be a Holder for
all purposes hereunder or (b) any transferee of a Warrant, or, if
15
applicable, any portion of a Warrant, that represents (x) the greater of (A) 10%
of the Warrant Shares exercisable by such transferor on the date of such
transfer and (B) 34,149 Warrant Shares (subject to adjustment as set forth
herein) or (y) if the transferor shall then hold Warrants representing less than
34,149 Warrant Shares (subject to adjustment as set forth herein), all of the
Warrants held by such transferor, and any such transferee shall be deemed to be
a Holder for all purposes hereunder.
11.2 Designated Office. As long as any of the Warrants
remain Outstanding, the Company shall maintain an office or agency, which may
be the principal executive offices of the Company (the "Designated Office"),
where the Warrants may be presented for exercise, registration of transfer,
division or combination as provided in this Warrant. Such Designated Office
shall initially be the office of the Company at 420 Lexington Avenue, Suite
601, New York, New York 10170. The Company may from time to time change the
Designated Office to another office of the Company or its agent within the
United States by notice given to all registered Holders at least 10 Business
Days prior to the effective date of such change.
11.3 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, the Purchase Agreement and the
Registration Rights Agreement contain 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.
11.4 Governing Law; Jurisdiction; Waiver Of Jury Trial.
The internal laws, and not the laws of conflicts (other than Section 5-1401 of
the General Obligations Law of the State of New York), of New York shall
govern the enforceability and validity of this Warrant, the construction of
its terms and the interpretation of the rights and duties of the Company. Any
suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Warrant or the
transactions contemplated hereby may be brought in any federal or state court
located in the County and State of New York, and the Company hereby consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding which
is brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on the company
anywhere in the world, whether within or without the jurisdiction of any such
court. The Company hereby irrevocably waives any and all right to trial by
jury in any legal proceeding arising out of or related to this Warrant or the
transactions contemplated hereby.
11.5 Remedies. Each Holder of Warrants, in addition to
being entitled to exercise its rights granted by law, including recovery of
damages, shall be entitled to specific performance of its rights provided
under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a
16
breach by it of the provisions of this Warrant and shall waive, in an action
for specific performance, the defense that a remedy at law would be adequate.
11.6 Limitation of Liability. No provision hereof and no
enumeration herein of the rights or privileges of the Holder hereof, shall
give rise to any liability of such Holder to pay the Exercise Price for any
Warrant Shares other than pursuant to an exercise of this Warrant or any
liability as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
11.7 Severability. Wherever possible, each provision of
this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Warrant.
11.8 Descriptive Headings. Descriptive headings of the
several sections of this Warrant are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
[Remainder of Page Intentionally Left Blank]
17
IN WITNESS WHEREOF, this Warrant has been executed as of the 14th day
of October, 2003.
SIGA TECHNOLOGIES, INC.
By: /s/ Thomas N. Konatich
---------------------------------
Name: Thomas N. Konatich
Title: Acting Chief Executive Officer
ANNEX A
NOTICE OF EXERCISE OF WARRANT
[To be executed only upon exercise of Warrant]
The undersigned hereby irrevocably elects to exercise the
right, represented by the Warrant dated as of October 14, 2003, to purchase
___ shares of common stock, par value $0.0001 per share (the "Warrant
Shares"), of SIGA TECHNOLOGIES, INC. and tenders herewith payment in
accordance with Sections 1 and 2 of such Warrant. The undersigned further
requests, in accordance with Section 2.1(b) of the Warrant, that certificates
for the Warrant Shares hereby purchased (and any securities or other property
issuable upon exercise) be issued in the name of and delivered to
______________ and, if such Warrant Shares are not all of the Warrant Shares
issuable upon exercise of the Warrant, that a new Warrant of like tenor be
issued for the balance of the Warrant Shares.
_______________________________
(Name of Registered Owner)
_______________________________
(Signature of Registered Owner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
ANNEX B
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Warrant.)
FOR VALUE RECEIVED ________________________________________
hereby sells, assigns and transfers unto_____________________________________
_____________________________________________________________________________
(Please print name and address of transferee)
the Warrants represented by this Warrant, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
___________________________ attorney-in-fact, with full power of substitution,
to transfer the within Warrant on the books of SIGA TECHNOLOGIES, INC. to give
effect to the transfer made hereby.
Date: _____________, ____
_________________________________
Signature
NOTICE: The signature on this assignment must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
EXHIBIT 16
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER SECURITIES
LAWS, AND SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNDER SAID
ACT AND LAWS OR AN EXEMPTION THEREFROM.
SIGA TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
1. Issuance; Certain Definitions.
1.1 In consideration of good and valuable consideration,
the receipt of which is hereby acknowledged by SIGA TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), Barry F. Schwartz, or his registered
assigns, is hereby granted the right to purchase at any time until 5:00 P.M.,
New York City time, on the Expiration Date, 15,625 fully paid and
nonassessable shares of Common Stock, at an initial exercise price per share
(the "Exercise Price") of $2.00 per share, subject to adjustment as set forth
herein. The shares of Common Stock issued upon exercise of this Warrant, as
adjusted from time to time pursuant to Section 6 hereof, are referred to as
"Warrant Shares." This Warrant is being issued pursuant to the terms and
conditions of the Purchase Agreement.
1.2 As used in this Warrant, the following terms have the
respective meanings set forth below:
"Affiliate" means, with respect to any specified Person, (i) any
other Person 50% or more of whose Outstanding voting securities are directly
or indirectly owned, controlled or held with the power to vote by such
specified Person or (ii) any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person by virtue of ownership of
voting securities, by contract or otherwise.
"Appraisal Procedure" means the following procedure to determine the
fair market value, as to any security, for purposes of the definition of "Fair
Market Value" or the fair market value, as to any other property (in either
case, the "Valuation Amount"). The Valuation Amount shall be determined in
good faith jointly by the Board of Directors and the Holder; provided,
however, that if such parties are not able to agree on the Valuation Amount
within a reasonable period of time (not to exceed 20 Business Days) the
Valuation Amount shall be determined by an investment banking firm of national
reputation, which firm shall be reasonably acceptable to the Board of
Directors and the Holder. If the Board of Directors and the Holder are unable
to agree upon an acceptable investment banking firm within 10 days after the
date either party proposed that one be selected, the investment banking firm
will be selected by an arbitrator located in New York City, New York, selected
by the
American Arbitration Association (or if such organization ceases to
exist, the arbitrator shall be chosen by a court of competent jurisdiction).
The arbitrator shall select the investment banking firm (within 10 days of his
appointment) from a list, jointly prepared by the Board of Directors and the
Holder, of not more than six investment banking firms of national reputation
in the United States, of which no more than three may be named by the Board of
Directors and no more than three may be named by the Holder. The arbitrator
may consider, within the 10-day period allotted, arguments from the parties
regarding which investment banking firm to choose, but the selection by the
arbitrator shall be made in its sole discretion from the list of six. The
Board of Directors and the Holder shall submit their respective valuations and
other relevant data to the investment banking firm, and the investment banking
firm shall, within 30 days of its appointment, make its own determination of
the Valuation Amount. The determination of the final Valuation Amount by such
investment banking firm shall be final and binding upon the parties. The
Company shall pay all of the fees and expenses of the investment banking firm
and arbitrator (if any) used to determine the Valuation Amount. If required by
any such investment banking firm or arbitrator, the Company shall execute a
retainer and engagement letter containing reasonable terms and conditions,
including, without limitation, customary provisions concerning the rights of
indemnification and contribution by the Company in favor of such investment
banking firm or arbitrator and its officers, directors, partners, employees,
agents and Affiliates.
"Board of Directors" means the board of directors of the Company.
"Business Day" means any day that is not a Saturday or Sunday or a
day on which banks are required or permitted to be closed in the State of New
York.
"Common Stock" means the Common Stock of the Company, par value
$0.0001 per share, as constituted on the Original Issue Date, and any capital
stock into which such Common Stock may thereafter be changed, and shall also
include (i) capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of any Common Stock upon any
reclassification thereof which is not preferred as to dividends or liquidation
over any other class of stock of the Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation received by or distributed to the holders of Common Stock of the
Company in the circumstances contemplated by Section 6.5 hereof.
"Company" has the meaning assigned to it in Section 1.1 hereof.
"Designated Office" has the meaning assigned to it in Section 11.2
hereof.
"Excluded Stock" has the meaning assigned to it in Section 6.10
hereof.
"Exercise Date" has the meaning assigned to it Section 2.1(a) hereof.
"Exercise Price" means, in respect of a share of Common Stock at any
date herein specified, the initial Exercise Price set forth in Section 1.1
hereof, as adjusted from time to time pursuant to Section 6 hereof.
"Expiration Date" means October 14, 2010.
2
"Fair Market Value" means, as to any security, the Twenty Day Average
of the average closing prices of such security's sales on all domestic
securities exchanges on which such security may at the time be listed, or, if
there have been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of such
day, or, if on any day such security is not so listed, the average of the
representative bid and asked prices quoted on The Nasdaq SmallCap Market as of
4:00 P.M., New York City time, on such day, or, if on any day such security is
not quoted on The Nasdaq SmallCap Market, the average of the highest bid and
lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar or
successor organization (and in each such case excluding any trades that are
not bona fide, arm's length transactions). If at any time such security is not
listed on any domestic securities exchange or quoted on The Nasdaq National
Market or the domestic over-the-counter market, the "Fair Market Value" of
such security shall be the fair market value thereof as determined in
accordance with the Appraisal Procedure, using any appropriate valuation
method, assuming an arms-length sale to an independent party.
"Form of Assignment" has the meaning assigned to it in Section 4.1
hereof.
"Governmental Entity" means any national, federal, state, municipal,
local, territorial, foreign or other government or any department, commission,
board, bureau, agency, regulatory authority or instrumentality thereof, or any
court, judicial, administrative or arbitral body or public or private
tribunal.
"Holder" means (a) with respect to this Warrant, the Person in whose
name the Warrant set forth herein is registered on the books of the Company
maintained for such purpose and (b) with respect to any other Warrant or
Warrant Shares, the Person in whose name such Warrant or Warrant Shares is
registered on the books of the Company maintained for such purpose.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing,
and the filing of, or agreement to give, any financing statement perfecting a
security interest under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Notice of Exercise" has the meaning assigned to it in Section 2.1(a)
hereof.
"Original Issue Date" means October 14, 2003.
"Original Warrants" means the Warrants originally issued by the
Company on October 14, 2003, pursuant to the Purchase Agreement.
"Outstanding" means, (a) when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company or any Subsidiary, and shall include all shares
issuable in respect of Outstanding scrip or any
3
certificates representing fractional interests in shares of Common Stock and
(b) when used with reference to Warrants, at any date as of which the number
thereof is to be determined, all issued Warrants.
"Permitted Transferee" means (i) any Affiliate of the Holder,
including, without limitation, directors, executives and officers of the
Holder, (ii) any member of the family of any Affiliate of the Holder,
including any such Person's spouse and descendants and any trust, partnership,
corporation, limited liability company or other entity for the benefit of such
spouse and/or descendants to whom or which any of the Securities have been
transferred by any such Person for estate or tax planning purposes, (iii) any
charity or foundation to which the Securities have been transferred by the
Holder or any Person or entity described in clause (i) or (ii) above for
estate or tax planning or charitable purposes, or (iv) the beneficiary of any
bona fide pledge by the Holder of any of the Securities.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, Governmental Entity or any other
entity.
"Purchase Agreement" means the Securities Purchase Agreement by and
between the Company and MacAndrews & Forbes Holdings Inc., dated August 13,
2003.
"Registration Rights Agreement" means the Registration Rights
Agreement by and between the Company and MacAndrews & Forbes Holdings Inc.,
dated August 13, 2003.
"Reserved Spin Off Securities" has the meaning assigned to it in
Section 6.2 hereof.
"SEC" means the U.S. Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the time.
"Spin Off Securities" has the meaning assigned to it in Section 6.2
hereof.
"Subsidiary" means, with respect to any Person, any corporation,
association trust, limited liability company, partnership, joint venture or
other business association or entity (i) at least 50% of the Outstanding
voting securities of which are at the time owned or controlled directly or
indirectly by such Person or (ii) with respect to which the Company possesses,
directly or indirectly, the power to direct or cause the direction of the
affairs or management of such Person.
"Transfer" means any disposition of any Warrant or Warrant Shares or
of any interest therein, which would constitute a "sale" thereof within the
meaning of the Securities Act.
"Twenty Day Average" means, with respect to any prices and in
connection with the calculation of Fair Market Value, the average of such
prices over the 20 Business Days ending on the Business Day immediately prior
to the day as of which Fair Market Value is being determined.
4
"Warrant Price" means an amount equal to (i) the number of Warrant
Shares being purchased upon exercise of this Warrant pursuant to Sections 1
and 2 hereof, multiplied by (ii) the Exercise Price.
"Warrant Shares" has the meaning assigned to it in Section 1.1
hereof.
"Warrants" means the Original Warrants and all Warrants issued upon
transfer, division or combination of, or in substitution for, the Original
Warrants, or any other such Warrant subsequently issued to the Holder. All
Warrants shall at all times be identical as to terms and conditions, except as
to the Warrant Shares for which they may be exercised and their date of
issuance.
2. Exercise of Warrants.
2.1 Manner of Exercise.
(a) This Warrant is exercisable in whole or in part at
any time and from time to time on any Business Day from and after the Original
Issue Date and at any time until 5:00 P.M., New York time, on the Expiration
Date. Such exercise shall be effectuated by submitting to the Company at its
Designated Office (i) a completed and duly executed written notice of the
Holder's election to exercise this Warrant (a "Notice of Exercise")
(substantially in the form attached to this Warrant as Annex A) indicating the
Warrant Shares then being purchased pursuant to such exercise, together with
this Warrant and (ii) payment to the Company of the Warrant Price. The date on
which such delivery and payment shall have taken place being sometimes
referred to as the "Exercise Date."
(b) Upon receipt by the Company of such Notice of
Exercise, surrender of this Warrant and payment of the Warrant Price (in
accordance with Section 2.1(c) hereof), the Holder shall be entitled to
receive as promptly as practicable, and in any event within five Business Days
thereafter, a certificate or certificates for Warrant Shares so purchased in
such denomination or denominations as the exercising Holder shall reasonably
request in the Notice of Exercise, registered in the name of the Holder or,
subject to Section 4 hereof, such other name as shall be designated in the
Notice of Exercise, together with cash in lieu of any fraction of a share, as
provided in Section 2.3 hereof. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing the Warrant Shares being issued, deliver to the
Holder a new Warrant evidencing the rights of the Holder to purchase the
remaining Warrant Shares underlying this Warrant. Such new Warrant shall in
all other respects be identical to this Warrant. This Warrant shall be deemed
to have been exercised and such certificate or certificates of Warrant Shares
shall be deemed to have been issued, and the Holder or any other Person so
designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares for all purposes, as of the Exercise Date.
(c) Payment of the Warrant Price shall be made at the
option of the Holder by one or more of the following methods: (i) by delivery
of a certified or official bank check or by wire transfer of immediately
available funds in the amount of such Warrant Price payable to the order of
the Company, (ii) by instructing the Company to withhold a number
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of Warrant Shares then issuable upon exercise of this Warrant with an
aggregate Fair Market Value equal to such Warrant Price, (iii) by surrendering
to the Company shares of Common Stock previously acquired by the Holder with
an aggregate Fair Market Value equal to such Warrant Price, or (iv) any
combination of the foregoing. In the event of any withholding of Warrant
Shares or surrender of Common Stock pursuant to clause (ii), (iii) or (iv)
above where the number of shares whose Fair Market Value is equal to the
Warrant Price is not a whole number, the number of shares withheld by or
surrendered to the Company shall be rounded up to the nearest whole share and
the Company shall make a cash payment to the Holder based on the incremental
fraction of a share being so withheld by or surrendered to the Company in an
amount determined in accordance with Section 2.3 hereof.
2.2 Payment of Taxes. All Warrant Shares issuable upon
the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable, issued without violation of any
preemptive or similar rights of any stockholder of the Company and free and
clear of all Liens. The Company shall pay all expenses in connection with, and
all taxes and other governmental charges that may be imposed with respect to,
the issue or delivery thereof. The Company shall not, however, be required to
pay any tax or governmental charge which may be issuable upon exercise of this
Warrant payable in respect of any Transfer involved in the issue and delivery
of Warrant Shares in a name other than that of the holder of the Warrants to
be exercised, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such
tax, or has established to the satisfaction of the Company that such tax has
been paid.
2.3 Fractional Shares. The Company shall not be required
to issue a fractional share of Common Stock upon exercise of any Warrant. As
to any fraction of a share that the Holder of one or more Warrants, the rights
under which are exercised in the same transaction, would otherwise be entitled
to purchase upon such exercise, the Company shall pay to such Holder an amount
in cash equal to such fraction multiplied by the Fair Market Value of one
share of Common Stock on the Exercise Date.
3. Reservation and Authorization of Common Stock. The
Company shall at all times during the term of this Warrant reserve 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. Before taking any action that would result in an adjustment in
the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction over such action. If any Warrant Shares
required to be reserved for issuance upon exercise of Warrants require
registration or qualification with any Governmental Entity (other than under
the Securities Act or any state securities law) before such shares may be so
issued, the Company will in good faith and as expeditiously as possible and at
its expense endeavor to cause such shares to be duly registered. Before taking
any action that would cause an adjustment reducing the Exercise Price below
the then par value (if any) of the shares of Common Stock deliverable upon
exercise of the Warrant or that would cause the number of Warrant Shares
issuable upon exercise of the Warrant to exceed (when taken together with all
other Outstanding shares of Common Stock) the number Warrant Shares
6
that the Company is authorized to issue, the Company will take any corporate
action that, in the opinion of its counsel, is necessary in order that the
Company may validly and legally issue the full number of fully paid and
non-assessable shares of Common Stock issuable upon exercise of the Warrant at
such adjusted exercise price.
4. Transfer, Assignment, Division, Combination, Mutilation
or Loss of Warrant.
4.1 Transfer or Assignment of Warrant. Subject to the
limitations set forth in Section 7 hereof, upon (a) surrender of this Warrant
to the Company at its Designated Office accompanied by a Form of Assignment
annexed hereto as Annex B (each, a "Form of Assignment") duly executed and
funds sufficient to pay any applicable transfer tax, and (b) delivery of an
opinion of counsel to the Holder reasonably satisfactory to the Company to the
effect that, in the opinion of such counsel, the transfer is exempt from the
registration requirements of the Securities Act (provided that no such opinion
shall be required in the event of a Transfer to a Permitted Transferee), the
Company shall, without charge, execute and deliver a new Warrant registered in
the name of the assignee named in the Form of Assignment at the address, and
evidencing the right to purchase the shares of Common Stock, specified in the
Form of Assignment, and the Warrant represented by this Warrant shall promptly
be cancelled.
4.2 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.
4.3 Division and Combination. Subject to compliance with
the applicable provisions of this Warrant, this Warrant may be divided or
combined with other Warrants upon presentation hereof at the Designated
Office, together with a written notice specifying the names and denominations
in which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with the applicable provisions of this Warrant
as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such
notice.
4.4 Expenses. The Company shall prepare, issue and
deliver at its own expense any new Warrant or Warrants required to be issued
hereunder.
4.5 Maintenance of Books. The Company agrees to maintain,
at the Designated Office, books for the registration and transfer of the
Warrants.
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.
7
6. Protection Against Dilution and Other Adjustments.
6.1 Adjustment of Number of Shares Purchasable. Upon any
adjustment of the Exercise Price as provided in Sections 6.3 through 6.6
hereof, the Holders of the Warrants shall thereafter be entitled to purchase
upon the exercise thereof, at the Exercise Price resulting from such
adjustment, the number of shares of Common Stock (calculated to the nearest
1/100th of a share) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable on the exercise hereof immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.
6.2 Adjustment Upon Spin Off. If, at any time or from
time to time after the Original Issue Date, the Company shall spin off or
otherwise divest itself of a part of its business or operations or dispose of
all or of a part of its assets in a transaction in which the Company does not
receive compensation for such business, operations or assets, but causes
securities of another entity (the "Spin Off Securities") to be issued to
security holders of the Company, then the Company shall cause (i) to be
reserved a number of Spin Off Securities (the "Reserved Spin Off Securities")
equal to the number of Spin Off Securities that would have been issued to the
Holder had all of the Holder's Outstanding Warrants on the record date for
determining the number of Spin Off Securities to be issued to stockholders of
the Company been exercised as of the close of business on the trading day
immediately before such record date, and (ii) to be issued to the Holder on
the exercise of all or any of the Outstanding Warrants, a number of Reserved
Spin Off Securities equal to (x) the Reserved Spin Off Securities multiplied
by (y) a fraction, the numerator of which shall be the amount of the
Outstanding Warrants then being exercised, and the denominator of which shall
be the amount of the Outstanding Warrants.
6.3 Upon Stock Dividends, Subdivisions or Splits. If, at
any time or from time to time after the Original Issue Date, the number of
shares of Common Stock Outstanding is increased by a stock dividend payable in
shares of Common Stock or by a subdivision or split-up of shares of Common
Stock, then, following the record date for the determination of holders of
Common Stock entitled to receive such stock dividend, or to be affected by
such subdivision or split-up, the Exercise Price shall be appropriately
decreased by multiplying the Exercise Price by a fraction, the numerator of
which is the number of shares of Common Stock Outstanding immediately prior
to, and the denominator of which is the number of shares of Common Stock
Outstanding immediately after, such increase in Outstanding shares.
6.4 Upon Combinations or Reverse Stock Splits. If, at any
time or from time to time after the Original Issue Date, the number of shares
of Common Stock Outstanding is decreased by a combination or reverse stock
split of the Outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then, following the record date to determine shares
affected by such combination or reverse stock split, the Exercise Price shall
be appropriately increased by multiplying the Exercise Price by a fraction,
the numerator of which is the number of shares of Common Stock Outstanding
immediately prior to, and the denominator of which is the number of shares of
Common Stock Outstanding immediately after, such decrease in Outstanding
shares.
8
6.5 Upon Reclassifications, Reorganizations,
Consolidations or Mergers. If, at any time or from time to time after the
Original Issue Date, there is any capital reorganization of the Company, any
reclassification of the stock of the Company (other than a change in par value
or from par value to no par value or from no par value to par value or as a
result of a stock dividend or subdivision, split-up or combination of shares),
or any consolidation or merger of the Company with or into another Person
(where the Company is not the surviving Person or where there is a change in
or distribution with respect to the Common Stock), each Warrant shall after
such reorganization, reclassification, consolidation, or merger be exercisable
for the kind and number of shares of stock or other securities or property of
the Company or of the successor Person resulting from such consolidation or
surviving such merger, if any, to which the holder of the Warrant Shares
deliverable (immediately prior to the time of such reorganization,
reclassification, consolidation or merger) upon exercise of such Warrant would
have been entitled upon such reorganization, reclassification, consolidation
or merger. The provisions of this clause shall similarly apply to successive
reorganizations, reclassifications, consolidations, or mergers. The Company
shall not effect any such reorganization, reclassification, consolidation or
merger unless, prior to the consummation thereof, the successor Person (if
other than the Company) resulting from such reorganization, reclassification,
consolidation or merger, shall assume, by written instrument, the obligation
to deliver to the Holders of the Warrant such shares of stock, securities or
assets, which, in accordance with the foregoing provisions, such Holders shall
be entitled to receive upon such conversion.
6.6 Upon Issuance of Common Stock. If, at any time or
from time to time after the Original Issue Date, the Company shall issue any
shares of Common Stock, options to purchase or rights to subscribe for Common
Stock, securities by their terms convertible into or exchangeable for Common
Stock, or options to purchase or rights to subscribe for such convertible or
exchangeable securities, other than Excluded Stock, without consideration or
for consideration per share less than either (x) the Exercise Price in effect
immediately prior to such issuance or (y) the Fair Market Value per share of
the Common Stock immediately prior to such issuance, then such Exercise Price
shall forthwith be lowered to a price equal to the price obtained by
multiplying:
(i) the Exercise Price in effect immediately prior to the
issuance of such Common Stock, options, rights or securities by
(ii) a fraction of which (x) the numerator shall be the
sum of (A) the number of shares of Common Stock Outstanding on a
fully-diluted basis immediately prior to such issuance and (B) the
number of additional shares of Common Stock which the aggregate
consideration for the number of shares of Common Stock so offered
would purchase at the greater of the Exercise Price in effect
immediately prior to such issuance or the Fair Market Value per share
of Common Stock and (y) the denominator shall be the number of shares
of Common Stock Outstanding on a fully-diluted basis immediately
after such issuance.
9
6.7 Provisions Applicable to Adjustments. For purposes of
any adjustment of the Exercise Price pursuant to Section 6.6 hereof, the
following provisions shall be applicable:
(i) In the case of the issuance of Common Stock for cash
in a public offering or private placement, the consideration shall be
deemed to be the amount of cash paid therefor before deducting
therefrom any discounts, commissions or placement fees payable by the
Company to any underwriter or placement agent in connection with the
issuance and sale thereof.
(ii) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the Valuation Amount as
determined in accordance with the Appraisal Procedure.
(iii) In the case of the issuance of options to purchase
or rights to subscribe for Common Stock, securities by their terms
convertible into or exchangeable for Common Stock, or options to
purchase or rights to subscribe for such convertible or exchangeable
securities (except for options to acquire Excluded Stock):
(A) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of such options to
purchase or rights to subscribe for Common Stock shall be
deemed to have been issued at the time such options or
rights were issued and for a consideration equal to the
consideration (determined in the manner provided in
subparagraphs (i) and (ii) above), if any, received by the
Company upon the issuance of such options or rights plus the
minimum purchase price provided in such options or rights
for the Common Stock covered thereby;
(B) the aggregate maximum number of shares
of Common Stock deliverable upon conversion of or in
exchange for any such convertible or exchangeable securities
or upon the exercise of options to purchase or rights to
subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof shall be
deemed to have been issued at the time such securities,
options, or rights were issued and for a consideration equal
to the consideration received by the Company for any such
securities and related options or rights (excluding any cash
received on account of accrued interest or accrued
dividends), plus the minimum additional consideration, if
any, to be received by the Company upon the conversion or
exchange of such securities or the exercise of any related
options or rights (the consideration in each case to be
10
determined in the manner provided in paragraphs (i) and (ii)
above);
(C) on any change in the number of shares
or exercise price of Common Stock deliverable upon exercise
of any such options or rights or conversions of or exchanges
for such securities, other than a change resulting from the
anti-dilution provisions thereof, the Exercise Price shall
forthwith be readjusted to such Exercise Price as would have
been obtained had the adjustment made upon the issuance of
such options, rights or securities not converted prior to
such change or options or rights related to such securities
not converted prior to such change been made upon the basis
of such change;
(D) upon the expiration of any options to
purchase or rights to subscribe for Common Stock which shall
not have been exercised, the Exercise Price computed upon
the issuance thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments
based thereon, shall, upon such expiration, be recomputed as
if the only additional shares of Common Stock issued were
the shares of Common Stock, if any, actually issued upon the
exercise of such options to purchase or rights to subscribe
for Common Stock, and the consideration received therefor
was the consideration actually received by the Company for
the issue of the options to purchase or rights to subscribe
for Common Stock that were exercised, plus the consideration
actually received by the Company upon such exercise; and
(E) no further adjustment of the Exercise
Price adjusted upon the issuance of any such options,
rights, convertible securities or exchangeable securities
shall be made as a result of the actual issuance of Common
Stock on the exercise of any such rights or options or any
conversion or exchange of any such securities.
6.8 Deferral in Certain Circumstances. In any case in
which the provisions of this Section 6 shall require that an adjustment shall
become effective immediately after a record date of an event, the Company may
defer until the occurrence of such event (a) issuing to the Holder of any
Warrant exercised after such record date and before the occurrence of such
event the shares of capital stock issuable upon such exercise by reason of the
adjustment required by such event and issuing to such Holder only the shares
of capital stock issuable upon such exercise before giving effect to such
adjustments, and (b) paying to such Holder any amount in cash in lieu of a
fractional share of capital stock pursuant to Section 2.3 above; provided,
however, that the Company shall deliver to such
11
Holder an appropriate instrument or due bills evidencing such Holder's right
to receive such additional shares or such cash.
6.9 Appraisal Procedure. In any case in which the
provisions of this Section 6 shall necessitate that the Appraisal Procedure be
utilized for purposes of determining an adjustment to the Exercise Price, the
Company may defer until the completion of the Appraisal Procedure and the
determination of the adjustment (a) issuing to the Holder of any Warrant
exercised after the date of the event that requires the adjustment and before
completion of the Appraisal Procedure and the determination of the adjustment,
the shares of capital stock issuable upon such exercise by reason of the
adjustment required by such event and issuing to such Holder only the shares
of capital stock issuable upon such exercise before giving effect to such
adjustment and (b) paying to such Holder any amount in cash in lieu of a
fractional share of capital stock pursuant to Section 2.3 above; provided,
however, that the Company shall deliver to such Holder an appropriate
instrument or due bills evidencing such Holder's right to receive such
additional shares or such cash.
6.10 Exceptions. This Section 6 shall not apply to (a)
securities offered to the public pursuant to a public offering; (b) securities
issued to employees or directors of the Company pursuant to an employee stock
option plan or stock incentive plan approved by the Board of Directors; or (c)
securities Outstanding as of the date hereof (provided that the terms of such
securities will not be modified in any manner following the date hereof)
(collectively, "Excluded Stock").
6.11 Notice of Adjustment of Exercise Price. Whenever the
Exercise Price is adjusted as herein provided:
(i) the Company shall compute the adjusted Exercise Price
in accordance with this Section 6 and shall prepare a certificate
signed by the treasurer or chief financial officer of the Company
setting forth the adjusted Exercise Price and showing in reasonable
detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at each Designated Office; and
(ii) a notice stating that the Exercise Price has been
adjusted and setting forth the adjusted Exercise Price shall
forthwith be prepared by the Company and mailed to all Holders at
their last addresses as they shall appear in the warrant register.
7. Transfer to Comply with the Securities Act; Registration
Rights.
7.1 Transfer. This Warrant has not been registered under
the Securities 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 Securities Act relating
to such security or an opinion of counsel satisfactory to the Company
that registration is not required under the Securities Act;
12
provided, that, no registration statement or opinion of counsel shall
be required in the event of a Transfer to a Permitted Transferee. Each
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 substantially the following form by which the Holder (and
any transferee thereof) shall be bound:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY OTHER SECURITIES LAWS, AND SUCH SECURITIES MAY NOT BE
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION UNDER SAID ACT AND LAWS OR AN
EXEMPTION THEREFROM.
7.2 Registration Rights. Reference is made to the
Registration Rights Agreement. The Company's obligations under the
Registration Rights Agreement and the other terms and conditions
thereof with respect to the Warrant Shares, including, but not
limited to, the Company's commitment to file registration statements
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. Notice Of Corporate Actions; Taking Of Record; Transfer
Books.
8.1 Notices of Corporate Actions. In case:
(a) of the Company granting to all of the holders of its
Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class; or
(b) of any reclassification of the Common Stock (other
than a subdivision or combination of the Outstanding shares of Common Stock),
or of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any stockholders of the Company is required,
or of the sale or transfer of all or substantially all of the assets of the
Company; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(d) of the commencement by the Company or any Subsidiary
of a tender offer for all or a portion of the Outstanding shares of Common
Stock (or the amending of any such tender offer to change the maximum number
of shares being sought or the amount or type of consideration being offered
therefor);
then the Company shall cause to be filed at each office or agency maintained
for such purpose, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the warrant register, at least 30 days prior
to the applicable record, effective or expiration date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the
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purpose of such dividend, distribution or granting of rights or warrants, or,
if a record is not to be taken, the date as of which the holders of Common
Stock of record who will be entitled to such dividend, distribution, rights or
warrants are to be determined, (y) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, transfer, dissolution, liquidation or winding up, or (z) the
date on which such tender offer commenced, the date on which such tender offer
is scheduled to expire unless extended, the consideration offered and the
other material terms thereof (or the material terms of the amendment thereto).
Such notice shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action on the Exercise
Price and the number and kind or class of shares or other securities or
property which shall be deliverable or purchasable upon the occurrence of such
action or deliverable upon exercise of the Warrants. Neither the failure to
give any such notice nor any defect therein shall affect the legality or
validity of any action described in clauses (a) through (d) of this Section
8.1.
8.2 Taking of Record. In the case of all dividends or
other distributions by the Company to the holders of its Common Stock with
respect to which any provision of hereof refers to the taking of a record of
such holders, the Company will in each such case take such a record and will
take such record as of the close of business on a Business Day.
8.3 Closing of Transfer Books. The Company shall not at
any time, except upon dissolution, liquidation or winding up of the Company,
close its stock transfer books or Warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any Warrant.
9. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage pre-paid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission, or, if mailed, two days after the date of deposit in the United
States mails, as follows:
(i) if to the Company, to:
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 601
New York, New York 10170
Attention: Thomas N. Konatich
Telephone No.: (212) 672-9100
Facsimile No.: (212) 697-3130
14
with a copy (which shall not constitute notice) to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
Attention: James A. Grayer, Esq.
Facsimile No.: (212) 715-8000
(ii) if to the Holder, to:
Mr. Barry F. Schwartz, Esq.
c/o MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10021
Facsimile No.: (212) 572-8435
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10035
Attention: Franklin M. Gittes, Esq. and
Alan C. Myers, Esq.
Facsimile No.: (212) 735-2000
Any party may be given notice in accordance with this Section 9, unless such
party designates another address or person for receipt of notice hereunder.
10. No Impairment; Regulatory Compliance And Cooperation;
Notice Of Expiration. The Company shall not by any action, including, without
limitation, amending its charter documents or through any reorganization,
reclassification, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other similar voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder against impairment.
11. Miscellaneous.
11.1 Successors and Assigns. This Warrant shall inure to
the benefit of and be binding upon the successors and assigns of the Company,
the Holder and their respective successors and assigns. The Holder's rights
under this Warrant may be assigned, in whole or in part, to (a) any Permitted
Transferee, and any Permitted Transferee shall be deemed to be a Holder for
all purposes hereunder or (b) any transferee of a Warrant, or, if applicable,
any portion of a Warrant, that represents (x) the greater of (A) 10% of the
Warrant Shares exercisable by such transferor on the date of such transfer and
(B) 34,149 Warrant Shares (subject to adjustment as set forth herein) or (y)
if the transferor shall then
15
hold Warrants representing less than 34,149 Warrant Shares (subject to
adjustment as set forth herein), all of the Warrants held by such transferor,
and any such transferee shall be deemed to be a Holder for all purposes
hereunder.
11.2 Designated Office. As long as any of the Warrants
remain Outstanding, the Company shall maintain an office or agency, which may
be the principal executive offices of the Company (the "Designated Office"),
where the Warrants may be presented for exercise, registration of transfer,
division or combination as provided in this Warrant. Such Designated Office
shall initially be the office of the Company at 420 Lexington Avenue, Suite
601, New York, New York 10170. The Company may from time to time change the
Designated Office to another office of the Company or its agent within the
United States by notice given to all registered Holders at least 10 Business
Days prior to the effective date of such change.
11.3 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, the Purchase Agreement and the
Registration Rights Agreement contain 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.
11.4 Governing Law; Jurisdiction; Waiver Of Jury Trial.
The internal laws, and not the laws of conflicts (other than Section 5-1401 of
the General Obligations Law of the State of New York), of New York shall
govern the enforceability and validity of this Warrant, the construction of
its terms and the interpretation of the rights and duties of the Company. Any
suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Warrant or the
transactions contemplated hereby may be brought in any federal or state court
located in the County and State of New York, and the Company hereby consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding which
is brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on the company
anywhere in the world, whether within or without the jurisdiction of any such
court. The Company hereby irrevocably waives any and all right to trial by
jury in any legal proceeding arising out of or related to this Warrant or the
transactions contemplated hereby.
11.5 Remedies. Each Holder of Warrants, in addition to
being entitled to exercise its rights granted by law, including recovery of
damages, shall be entitled to specific performance of its rights provided
under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and shall waive, in an action for specific
performance, the defense that a remedy at law would be adequate.
16
11.6 Limitation of Liability. No provision hereof and no
enumeration herein of the rights or privileges of the Holder hereof, shall
give rise to any liability of such Holder to pay the Exercise Price for any
Warrant Shares other than pursuant to an exercise of this Warrant or any
liability as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
11.7 Severability. Wherever possible, each provision of
this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Warrant.
11.8 Descriptive Headings. Descriptive headings of the
several sections of this Warrant are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
[Remainder of Page Intentionally Left Blank]
17
IN WITNESS WHEREOF, this Warrant has been executed as of the 14th day
of October, 2003.
SIGA TECHNOLOGIES, INC.
By: /s/ Thomas N. Konatich
-----------------------------
Name: Thomas N. Konatich
Title: Acting Chief Executive
Officer
18
ANNEX A
NOTICE OF EXERCISE OF WARRANT
[To be executed only upon exercise of Warrant]
The undersigned hereby irrevocably elects to exercise the
right, represented by the Warrant dated as of October 14, 2003, to purchase
___ shares of common stock, par value $0.0001 per share (the "Warrant
Shares"), of SIGA TECHNOLOGIES, INC. and tenders herewith payment in
accordance with Sections 1 and 2 of such Warrant. The undersigned further
requests, in accordance with Section 2.1(b) of the Warrant, that certificates
for the Warrant Shares hereby purchased (and any securities or other property
issuable upon exercise) be issued in the name of and delivered to
______________ and, if such Warrant Shares are not all of the Warrant Shares
issuable upon exercise of the Warrant, that a new Warrant of like tenor be
issued for the balance of the Warrant Shares.
_______________________________
(Name of Registered Owner)
_______________________________
(Signature of Registered Owner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
ANNEX B
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Warrant.)
FOR VALUE RECEIVED _________________________________________
hereby sells, assigns and transfers unto______________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print name and address of transferee)
the Warrants represented by this Warrant, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
___________________________ attorney-in-fact, with full power of substitution,
to transfer the within Warrant on the books of SIGA TECHNOLOGIES, INC. to give
effect to the transfer made hereby.
Date: _____________, ____
_________________________________
Signature
NOTICE: The signature on this assignment must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
EXHIBIT 17
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY OTHER SECURITIES LAWS, AND SUCH SECURITIES MAY
NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNDER
SAID ACT AND LAWS OR AN EXEMPTION THEREFROM.
SIGA TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
1. Issuance; Certain Definitions.
1.1 In consideration of good and valuable consideration,
the receipt of which is hereby acknowledged by SIGA TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), Todd J. Slotkin, or his registered
assigns, is hereby granted the right to purchase at any time until 5:00 P.M.,
New York City time, on the Expiration Date, 15,625 fully paid and
nonassessable shares of Common Stock, at an initial exercise price per share
(the "Exercise Price") of $2.00 per share, subject to adjustment as set forth
herein. The shares of Common Stock issued upon exercise of this Warrant, as
adjusted from time to time pursuant to Section 6 hereof, are referred to as
"Warrant Shares." This Warrant is being issued pursuant to the terms and
conditions of the Purchase Agreement.
1.2 As used in this Warrant, the following terms have the
respective meanings set forth below:
"Affiliate" means, with respect to any specified Person, (i) any
other Person 50% or more of whose Outstanding voting securities are directly
or indirectly owned, controlled or held with the power to vote by such
specified Person or (ii) any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person by virtue of ownership of
voting securities, by contract or otherwise.
"Appraisal Procedure" means the following procedure to determine the
fair market value, as to any security, for purposes of the definition of "Fair
Market Value" or the fair market value, as to any other property (in either
case, the "Valuation Amount"). The Valuation Amount shall be determined in good
faith jointly by the Board of Directors and the Holder; provided, however, that
if such parties are not able to agree on the Valuation Amount within a
reasonable period of time (not to exceed 20 Business Days) the Valuation Amount
shall be determined by an investment banking firm of national reputation, which
firm shall be reasonably acceptable to the Board of Directors and the Holder.
If the Board of Directors and the Holder are unable to agree upon an acceptable
investment banking firm within 10 days after the date either party proposed
that one be selected, the investment banking firm will be selected by an
arbitrator located in New York City, New York, selected by the
American Arbitration Association (or if such organization ceases to
exist, the arbitrator shall be chosen by a court of competent jurisdiction).
The arbitrator shall select the investment banking firm (within 10 days of his
appointment) from a list, jointly prepared by the Board of Directors and the
Holder, of not more than six investment banking firms of national reputation in
the United States, of which no more than three may be named by the Board of
Directors and no more than three may be named by the Holder. The arbitrator may
consider, within the 10-day period allotted, arguments from the parties
regarding which investment banking firm to choose, but the selection by the
arbitrator shall be made in its sole discretion from the list of six. The Board
of Directors and the Holder shall submit their respective valuations and other
relevant data to the investment banking firm, and the investment banking firm
shall, within 30 days of its appointment, make its own determination of the
Valuation Amount. The determination of the final Valuation Amount by such
investment banking firm shall be final and binding upon the parties. The
Company shall pay all of the fees and expenses of the investment banking firm
and arbitrator (if any) used to determine the Valuation Amount. If required by
any such investment banking firm or arbitrator, the Company shall execute a
retainer and engagement letter containing reasonable terms and conditions,
including, without limitation, customary provisions concerning the rights of
indemnification and contribution by the Company in favor of such investment
banking firm or arbitrator and its officers, directors, partners, employees,
agents and Affiliates.
"Board of Directors" means the board of directors of the Company.
"Business Day" means any day that is not a Saturday or Sunday or a
day on which banks are required or permitted to be closed in the State of New
York.
"Common Stock" means the Common Stock of the Company, par value
$0.0001 per share, as constituted on the Original Issue Date, and any capital
stock into which such Common Stock may thereafter be changed, and shall also
include (i) capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of any Common Stock upon any
reclassification thereof which is not preferred as to dividends or liquidation
over any other class of stock of the Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation received by or distributed to the holders of Common Stock of the
Company in the circumstances contemplated by Section 6.5 hereof.
"Company" has the meaning assigned to it in Section 1.1 hereof.
"Designated Office" has the meaning assigned to it in Section 11.2
hereof.
"Excluded Stock" has the meaning assigned to it in Section 6.10
hereof.
"Exercise Date" has the meaning assigned to it Section 2.1(a) hereof.
"Exercise Price" means, in respect of a share of Common Stock at any
date herein specified, the initial Exercise Price set forth in Section 1.1
hereof, as adjusted from time to time pursuant to Section 6 hereof.
"Expiration Date" means October 14, 2010.
2
"Fair Market Value" means, as to any security, the Twenty Day Average
of the average closing prices of such security's sales on all domestic
securities exchanges on which such security may at the time be listed, or, if
there have been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of such
day, or, if on any day such security is not so listed, the average of the
representative bid and asked prices quoted on The Nasdaq SmallCap Market as of
4:00 P.M., New York City time, on such day, or, if on any day such security is
not quoted on The Nasdaq SmallCap Market, the average of the highest bid and
lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar or
successor organization (and in each such case excluding any trades that are
not bona fide, arm's length transactions). If at any time such security is not
listed on any domestic securities exchange or quoted on The Nasdaq National
Market or the domestic over-the-counter market, the "Fair Market Value" of
such security shall be the fair market value thereof as determined in
accordance with the Appraisal Procedure, using any appropriate valuation
method, assuming an arms-length sale to an independent party.
"Form of Assignment" has the meaning assigned to it in Section 4.1
hereof.
"Governmental Entity" means any national, federal, state, municipal,
local, territorial, foreign or other government or any department, commission,
board, bureau, agency, regulatory authority or instrumentality thereof, or any
court, judicial, administrative or arbitral body or public or private
tribunal.
"Holder" means (a) with respect to this Warrant, the Person in whose
name the Warrant set forth herein is registered on the books of the Company
maintained for such purpose and (b) with respect to any other Warrant or
Warrant Shares, the Person in whose name such Warrant or Warrant Shares is
registered on the books of the Company maintained for such purpose.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing,
and the filing of, or agreement to give, any financing statement perfecting a
security interest under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Notice of Exercise" has the meaning assigned to it in Section 2.1(a)
hereof.
"Original Issue Date" means October 14, 2003.
"Original Warrants" means the Warrants originally issued by the
Company on October 14, 2003, pursuant to the Purchase Agreement.
"Outstanding" means, (a) when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company or any Subsidiary, and shall include all shares
issuable in respect of Outstanding scrip or any
3
certificates representing fractional interests in shares of Common Stock and
(b) when used with reference to Warrants, at any date as of which the number
thereof is to be determined, all issued Warrants.
"Permitted Transferee" means (i) any Affiliate of the Holder,
including, without limitation, directors, executives and officers of the
Holder, (ii) any member of the family of any Affiliate of the Holder,
including any such Person's spouse and descendants and any trust, partnership,
corporation, limited liability company or other entity for the benefit of such
spouse and/or descendants to whom or which any of the Securities have been
transferred by any such Person for estate or tax planning purposes, (iii) any
charity or foundation to which the Securities have been transferred by the
Holder or any Person or entity described in clause (i) or (ii) above for
estate or tax planning or charitable purposes, or (iv) the beneficiary of any
bona fide pledge by the Holder of any of the Securities.
"Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, Governmental Entity or any other
entity.
"Purchase Agreement" means the Securities Purchase Agreement by and
between the Company and MacAndrews & Forbes Holdings Inc., dated August 13,
2003.
"Registration Rights Agreement" means the Registration Rights
Agreement by and between the Company and MacAndrews & Forbes Holdings Inc.,
dated August 13, 2003.
"Reserved Spin Off Securities" has the meaning assigned to it in
Section 6.2 hereof.
"SEC" means the U.S. Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the time.
"Spin Off Securities" has the meaning assigned to it in Section 6.2
hereof.
"Subsidiary" means, with respect to any Person, any corporation,
association trust, limited liability company, partnership, joint venture or
other business association or entity (i) at least 50% of the Outstanding
voting securities of which are at the time owned or controlled directly or
indirectly by such Person or (ii) with respect to which the Company possesses,
directly or indirectly, the power to direct or cause the direction of the
affairs or management of such Person.
"Transfer" means any disposition of any Warrant or Warrant Shares or
of any interest therein, which would constitute a "sale" thereof within the
meaning of the Securities Act.
"Twenty Day Average" means, with respect to any prices and in
connection with the calculation of Fair Market Value, the average of such
prices over the 20 Business Days ending on the Business Day immediately prior
to the day as of which Fair Market Value is being determined.
4
"Warrant Price" means an amount equal to (i) the number of Warrant
Shares being purchased upon exercise of this Warrant pursuant to Sections 1
and 2 hereof, multiplied by (ii) the Exercise Price.
"Warrant Shares" has the meaning assigned to it in Section 1.1
hereof.
"Warrants" means the Original Warrants and all Warrants issued upon
transfer, division or combination of, or in substitution for, the Original
Warrants, or any other such Warrant subsequently issued to the Holder. All
Warrants shall at all times be identical as to terms and conditions, except as
to the Warrant Shares for which they may be exercised and their date of
issuance.
2. Exercise of Warrants.
2.1 Manner of Exercise.
(a) This Warrant is exercisable in whole or in part at
any time and from time to time on any Business Day from and after the Original
Issue Date and at any time until 5:00 P.M., New York time, on the Expiration
Date. Such exercise shall be effectuated by submitting to the Company at its
Designated Office (i) a completed and duly executed written notice of the
Holder's election to exercise this Warrant (a "Notice of Exercise")
(substantially in the form attached to this Warrant as Annex A) indicating the
Warrant Shares then being purchased pursuant to such exercise, together with
this Warrant and (ii) payment to the Company of the Warrant Price. The date on
which such delivery and payment shall have taken place being sometimes
referred to as the "Exercise Date."
(b) Upon receipt by the Company of such Notice of
Exercise, surrender of this Warrant and payment of the Warrant Price (in
accordance with Section 2.1(c) hereof), the Holder shall be entitled to
receive as promptly as practicable, and in any event within five Business Days
thereafter, a certificate or certificates for Warrant Shares so purchased in
such denomination or denominations as the exercising Holder shall reasonably
request in the Notice of Exercise, registered in the name of the Holder or,
subject to Section 4 hereof, such other name as shall be designated in the
Notice of Exercise, together with cash in lieu of any fraction of a share, as
provided in Section 2.3 hereof. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing the Warrant Shares being issued, deliver to the
Holder a new Warrant evidencing the rights of the Holder to purchase the
remaining Warrant Shares underlying this Warrant. Such new Warrant shall in
all other respects be identical to this Warrant. This Warrant shall be deemed
to have been exercised and such certificate or certificates of Warrant Shares
shall be deemed to have been issued, and the Holder or any other Person so
designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares for all purposes, as of the Exercise Date.
(c) Payment of the Warrant Price shall be made at the
option of the Holder by one or more of the following methods: (i) by delivery
of a certified or official bank check or by wire transfer of immediately
available funds in the amount of such Warrant Price payable to the order of
the Company, (ii) by instructing the Company to withhold a number
5
of Warrant Shares then issuable upon exercise of this Warrant with an aggregate
Fair Market Value equal to such Warrant Price, (iii) by surrendering to the
Company shares of Common Stock previously acquired by the Holder with an
aggregate Fair Market Value equal to such Warrant Price, or (iv) any
combination of the foregoing. In the event of any withholding of Warrant Shares
or surrender of Common Stock pursuant to clause (ii), (iii) or (iv) above where
the number of shares whose Fair Market Value is equal to the Warrant Price is
not a whole number, the number of shares withheld by or surrendered to the
Company shall be rounded up to the nearest whole share and the Company shall
make a cash payment to the Holder based on the incremental fraction of a share
being so withheld by or surrendered to the Company in an amount determined in
accordance with Section 2.3 hereof.
2.2 Payment of Taxes. All Warrant Shares issuable upon
the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable, issued without violation of any
preemptive or similar rights of any stockholder of the Company and free and
clear of all Liens. The Company shall pay all expenses in connection with, and
all taxes and other governmental charges that may be imposed with respect to,
the issue or delivery thereof. The Company shall not, however, be required to
pay any tax or governmental charge which may be issuable upon exercise of this
Warrant payable in respect of any Transfer involved in the issue and delivery
of Warrant Shares in a name other than that of the holder of the Warrants to
be exercised, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such
tax, or has established to the satisfaction of the Company that such tax has
been paid.
2.3 Fractional Shares. The Company shall not be required
to issue a fractional share of Common Stock upon exercise of any Warrant. As
to any fraction of a share that the Holder of one or more Warrants, the rights
under which are exercised in the same transaction, would otherwise be entitled
to purchase upon such exercise, the Company shall pay to such Holder an amount
in cash equal to such fraction multiplied by the Fair Market Value of one
share of Common Stock on the Exercise Date.
3. Reservation and Authorization of Common Stock. The
Company shall at all times during the term of this Warrant reserve 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. Before taking any action that would result in an adjustment in
the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction over such action. If any Warrant Shares
required to be reserved for issuance upon exercise of Warrants require
registration or qualification with any Governmental Entity (other than under
the Securities Act or any state securities law) before such shares may be so
issued, the Company will in good faith and as expeditiously as possible and at
its expense endeavor to cause such shares to be duly registered. Before taking
any action that would cause an adjustment reducing the Exercise Price below
the then par value (if any) of the shares of Common Stock deliverable upon
exercise of the Warrant or that would cause the number of Warrant Shares
issuable upon exercise of the Warrant to exceed (when taken together with all
other Outstanding shares of Common Stock) the number Warrant Shares
6
that the Company is authorized to issue, the Company will take any corporate
action that, in the opinion of its counsel, is necessary in order that the
Company may validly and legally issue the full number of fully paid and
non-assessable shares of Common Stock issuable upon exercise of the Warrant at
such adjusted exercise price.
4. Transfer, Assignment, Division, Combination, Mutilation
or Loss of Warrant.
4.1 Transfer or Assignment of Warrant. Subject to the
limitations set forth in Section 7 hereof, upon (a) surrender of this Warrant
to the Company at its Designated Office accompanied by a Form of Assignment
annexed hereto as Annex B (each, a "Form of Assignment") duly executed and
funds sufficient to pay any applicable transfer tax, and (b) delivery of an
opinion of counsel to the Holder reasonably satisfactory to the Company to the
effect that, in the opinion of such counsel, the transfer is exempt from the
registration requirements of the Securities Act (provided that no such opinion
shall be required in the event of a Transfer to a Permitted Transferee), the
Company shall, without charge, execute and deliver a new Warrant registered in
the name of the assignee named in the Form of Assignment at the address, and
evidencing the right to purchase the shares of Common Stock, specified in the
Form of Assignment, and the Warrant represented by this Warrant shall promptly
be cancelled.
4.2 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.
4.3 Division and Combination. Subject to compliance with
the applicable provisions of this Warrant, this Warrant may be divided or
combined with other Warrants upon presentation hereof at the Designated
Office, together with a written notice specifying the names and denominations
in which new Warrants are to be issued, signed by the Holder or its agent or
attorney. Subject to compliance with the applicable provisions of this Warrant
as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such
notice.
4.4 Expenses. The Company shall prepare, issue and
deliver at its own expense any new Warrant or Warrants required to be issued
hereunder.
4.5 Maintenance of Books. The Company agrees to maintain,
at the Designated Office, books for the registration and transfer of the
Warrants.
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.
7
6. Protection Against Dilution and Other Adjustments.
6.1 Adjustment of Number of Shares Purchasable. Upon any
adjustment of the Exercise Price as provided in Sections 6.3 through 6.6
hereof, the Holders of the Warrants shall thereafter be entitled to purchase
upon the exercise thereof, at the Exercise Price resulting from such
adjustment, the number of shares of Common Stock (calculated to the nearest
1/100th of a share) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable on the exercise hereof immediately prior to such adjustment and
dividing the product thereof by the Exercise Price resulting from such
adjustment.
6.2 Adjustment Upon Spin Off. If, at any time or from
time to time after the Original Issue Date, the Company shall spin off or
otherwise divest itself of a part of its business or operations or dispose of
all or of a part of its assets in a transaction in which the Company does not
receive compensation for such business, operations or assets, but causes
securities of another entity (the "Spin Off Securities") to be issued to
security holders of the Company, then the Company shall cause (i) to be
reserved a number of Spin Off Securities (the "Reserved Spin Off Securities")
equal to the number of Spin Off Securities that would have been issued to the
Holder had all of the Holder's Outstanding Warrants on the record date for
determining the number of Spin Off Securities to be issued to stockholders of
the Company been exercised as of the close of business on the trading day
immediately before such record date, and (ii) to be issued to the Holder on
the exercise of all or any of the Outstanding Warrants, a number of Reserved
Spin Off Securities equal to (x) the Reserved Spin Off Securities multiplied
by (y) a fraction, the numerator of which shall be the amount of the
Outstanding Warrants then being exercised, and the denominator of which shall
be the amount of the Outstanding Warrants.
6.3 Upon Stock Dividends, Subdivisions or Splits. If, at
any time or from time to time after the Original Issue Date, the number of
shares of Common Stock Outstanding is increased by a stock dividend payable in
shares of Common Stock or by a subdivision or split-up of shares of Common
Stock, then, following the record date for the determination of holders of
Common Stock entitled to receive such stock dividend, or to be affected by
such subdivision or split-up, the Exercise Price shall be appropriately
decreased by multiplying the Exercise Price by a fraction, the numerator of
which is the number of shares of Common Stock Outstanding immediately prior
to, and the denominator of which is the number of shares of Common Stock
Outstanding immediately after, such increase in Outstanding shares.
6.4 Upon Combinations or Reverse Stock Splits. If, at any
time or from time to time after the Original Issue Date, the number of shares
of Common Stock Outstanding is decreased by a combination or reverse stock
split of the Outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then, following the record date to determine shares
affected by such combination or reverse stock split, the Exercise Price shall
be appropriately increased by multiplying the Exercise Price by a fraction,
the numerator of which is the number of shares of Common Stock Outstanding
immediately prior to, and the denominator of which is the number of shares of
Common Stock Outstanding immediately after, such decrease in Outstanding
shares.
8
6.5 Upon Reclassifications, Reorganizations,
Consolidations or Mergers. If, at any time or from time to time after the
Original Issue Date, there is any capital reorganization of the Company, any
reclassification of the stock of the Company (other than a change in par value
or from par value to no par value or from no par value to par value or as a
result of a stock dividend or subdivision, split-up or combination of shares),
or any consolidation or merger of the Company with or into another Person
(where the Company is not the surviving Person or where there is a change in
or distribution with respect to the Common Stock), each Warrant shall after
such reorganization, reclassification, consolidation, or merger be exercisable
for the kind and number of shares of stock or other securities or property of
the Company or of the successor Person resulting from such consolidation or
surviving such merger, if any, to which the holder of the Warrant Shares
deliverable (immediately prior to the time of such reorganization,
reclassification, consolidation or merger) upon exercise of such Warrant would
have been entitled upon such reorganization, reclassification, consolidation
or merger. The provisions of this clause shall similarly apply to successive
reorganizations, reclassifications, consolidations, or mergers. The Company
shall not effect any such reorganization, reclassification, consolidation or
merger unless, prior to the consummation thereof, the successor Person (if
other than the Company) resulting from such reorganization, reclassification,
consolidation or merger, shall assume, by written instrument, the obligation
to deliver to the Holders of the Warrant such shares of stock, securities or
assets, which, in accordance with the foregoing provisions, such Holders shall
be entitled to receive upon such conversion.
6.6 Upon Issuance of Common Stock. If, at any time or
from time to time after the Original Issue Date, the Company shall issue any
shares of Common Stock, options to purchase or rights to subscribe for Common
Stock, securities by their terms convertible into or exchangeable for Common
Stock, or options to purchase or rights to subscribe for such convertible or
exchangeable securities, other than Excluded Stock, without consideration or
for consideration per share less than either (x) the Exercise Price in effect
immediately prior to such issuance or (y) the Fair Market Value per share of
the Common Stock immediately prior to such issuance, then such Exercise Price
shall forthwith be lowered to a price equal to the price obtained by
multiplying:
(i) the Exercise Price in effect immediately prior to the
issuance of such Common Stock, options, rights or securities by
(ii) a fraction of which (x) the numerator shall be the
sum of (A) the number of shares of Common Stock Outstanding on a
fully-diluted basis immediately prior to such issuance and (B) the
number of additional shares of Common Stock which the aggregate
consideration for the number of shares of Common Stock so offered
would purchase at the greater of the Exercise Price in effect
immediately prior to such issuance or the Fair Market Value per share
of Common Stock and (y) the denominator shall be the number of shares
of Common Stock Outstanding on a fully-diluted basis immediately
after such issuance.
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6.7 Provisions Applicable to Adjustments. For purposes of
any adjustment of the Exercise Price pursuant to Section 6.6 hereof, the
following provisions shall be applicable:
(i) In the case of the issuance of Common Stock for cash
in a public offering or private placement, the consideration shall be
deemed to be the amount of cash paid therefor before deducting
therefrom any discounts, commissions or placement fees payable by the
Company to any underwriter or placement agent in connection with the
issuance and sale thereof.
(ii) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the Valuation Amount as
determined in accordance with the Appraisal Procedure.
(iii) In the case of the issuance of options to purchase
or rights to subscribe for Common Stock, securities by their terms
convertible into or exchangeable for Common Stock, or options to
purchase or rights to subscribe for such convertible or exchangeable
securities (except for options to acquire Excluded Stock):
(A) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of such options to
purchase or rights to subscribe for Common Stock shall be
deemed to have been issued at the time such options or
rights were issued and for a consideration equal to the
consideration (determined in the manner provided in
subparagraphs (i) and (ii) above), if any, received by the
Company upon the issuance of such options or rights plus the
minimum purchase price provided in such options or rights
for the Common Stock covered thereby;
(B) the aggregate maximum number of shares
of Common Stock deliverable upon conversion of or in
exchange for any such convertible or exchangeable securities
or upon the exercise of options to purchase or rights to
subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof shall be
deemed to have been issued at the time such securities,
options, or rights were issued and for a consideration equal
to the consideration received by the Company for any such
securities and related options or rights (excluding any cash
received on account of accrued interest or accrued
dividends), plus the minimum additional consideration, if
any, to be received by the Company upon the conversion or
exchange of such securities or the exercise of any related
options or rights (the consideration in each case to be
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determined in the manner provided in paragraphs (i) and (ii)
above);
(C) on any change in the number of shares
or exercise price of Common Stock deliverable upon exercise
of any such options or rights or conversions of or exchanges
for such securities, other than a change resulting from the
anti-dilution provisions thereof, the Exercise Price shall
forthwith be readjusted to such Exercise Price as would have
been obtained had the adjustment made upon the issuance of
such options, rights or securities not converted prior to
such change or options or rights related to such securities
not converted prior to such change been made upon the basis
of such change;
(D) upon the expiration of any options to
purchase or rights to subscribe for Common Stock which shall
not have been exercised, the Exercise Price computed upon
the issuance thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments
based thereon, shall, upon such expiration, be recomputed as
if the only additional shares of Common Stock issued were
the shares of Common Stock, if any, actually issued upon the
exercise of such options to purchase or rights to subscribe
for Common Stock, and the consideration received therefor
was the consideration actually received by the Company for
the issue of the options to purchase or rights to subscribe
for Common Stock that were exercised, plus the consideration
actually received by the Company upon such exercise; and
(E) no further adjustment of the Exercise
Price adjusted upon the issuance of any such options,
rights, convertible securities or exchangeable securities
shall be made as a result of the actual issuance of Common
Stock on the exercise of any such rights or options or any
conversion or exchange of any such securities.
6.8 Deferral in Certain Circumstances. In any case in
which the provisions of this Section 6 shall require that an adjustment shall
become effective immediately after a record date of an event, the Company may
defer until the occurrence of such event (a) issuing to the Holder of any
Warrant exercised after such record date and before the occurrence of such
event the shares of capital stock issuable upon such exercise by reason of the
adjustment required by such event and issuing to such Holder only the shares
of capital stock issuable upon such exercise before giving effect to such
adjustments, and (b) paying to such Holder any amount in cash in lieu of a
fractional share of capital stock pursuant to Section 2.3 above; provided,
however, that the Company shall deliver to such
11
Holder an appropriate instrument or due bills evidencing such Holder's right to
receive such additional shares or such cash.
6.9 Appraisal Procedure. In any case in which the
provisions of this Section 6 shall necessitate that the Appraisal Procedure be
utilized for purposes of determining an adjustment to the Exercise Price, the
Company may defer until the completion of the Appraisal Procedure and the
determination of the adjustment (a) issuing to the Holder of any Warrant
exercised after the date of the event that requires the adjustment and before
completion of the Appraisal Procedure and the determination of the adjustment,
the shares of capital stock issuable upon such exercise by reason of the
adjustment required by such event and issuing to such Holder only the shares
of capital stock issuable upon such exercise before giving effect to such
adjustment and (b) paying to such Holder any amount in cash in lieu of a
fractional share of capital stock pursuant to Section 2.3 above; provided,
however, that the Company shall deliver to such Holder an appropriate
instrument or due bills evidencing such Holder's right to receive such
additional shares or such cash.
6.10 Exceptions. This Section 6 shall not apply to (a)
securities offered to the public pursuant to a public offering; (b) securities
issued to employees or directors of the Company pursuant to an employee stock
option plan or stock incentive plan approved by the Board of Directors; or (c)
securities Outstanding as of the date hereof (provided that the terms of such
securities will not be modified in any manner following the date hereof)
(collectively, "Excluded Stock").
6.11 Notice of Adjustment of Exercise Price. Whenever the
Exercise Price is adjusted as herein provided:
(i) the Company shall compute the adjusted Exercise Price
in accordance with this Section 6 and shall prepare a certificate
signed by the treasurer or chief financial officer of the Company
setting forth the adjusted Exercise Price and showing in reasonable
detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at each Designated Office; and
(ii) a notice stating that the Exercise Price has been
adjusted and setting forth the adjusted Exercise Price shall
forthwith be prepared by the Company and mailed to all Holders at
their last addresses as they shall appear in the warrant register.
7. Transfer to Comply with the Securities Act; Registration
Rights.
7.1 Transfer. This Warrant has not been registered under
the Securities 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
Securities Act relating to such security or an opinion of counsel satisfactory
to the Company that registration is not required under the Securities Act;
12
provided, that, no registration statement or opinion of counsel shall be
required in the event of a Transfer to a Permitted Transferee. Each 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 substantially the
following form by which the Holder (and any transferee thereof) shall be bound:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY OTHER SECURITIES LAWS, AND SUCH SECURITIES MAY NOT BE
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION UNDER SAID ACT AND LAWS OR AN
EXEMPTION THEREFROM.
7.2 Registration Rights. Reference is made to the
Registration Rights Agreement. The Company's obligations under the
Registration Rights Agreement and the other terms and conditions thereof with
respect to the Warrant Shares, including, but not limited to, the Company's
commitment to file registration statements 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. Notice Of Corporate Actions; Taking Of Record; Transfer
Books.
8.1 Notices of Corporate Actions. In case:
(a) of the Company granting to all of the holders of its
Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class; or
(b) of any reclassification of the Common Stock (other
than a subdivision or combination of the Outstanding shares of Common Stock),
or of any consolidation, merger or share exchange to which the Company is a
party and for which approval of any stockholders of the Company is required,
or of the sale or transfer of all or substantially all of the assets of the
Company; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(d) of the commencement by the Company or any Subsidiary
of a tender offer for all or a portion of the Outstanding shares of Common
Stock (or the amending of any such tender offer to change the maximum number
of shares being sought or the amount or type of consideration being offered
therefor);
then the Company shall cause to be filed at each office or agency maintained
for such purpose, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the warrant register, at least 30 days prior
to the applicable record, effective or expiration date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the
13
purpose of such dividend, distribution or granting of rights or warrants, or,
if a record is not to be taken, the date as of which the holders of Common
Stock of record who will be entitled to such dividend, distribution, rights or
warrants are to be determined, (y) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding up, or (z) the date on which such
tender offer commenced, the date on which such tender offer is scheduled to
expire unless extended, the consideration offered and the other material terms
thereof (or the material terms of the amendment thereto). Such notice shall
also set forth such facts with respect thereto as shall be reasonably necessary
to indicate the effect of such action on the Exercise Price and the number and
kind or class of shares or other securities or property which shall be
deliverable or purchasable upon the occurrence of such action or deliverable
upon exercise of the Warrants. Neither the failure to give any such notice nor
any defect therein shall affect the legality or validity of any action
described in clauses (a) through (d) of this Section 8.1.
8.2 Taking of Record. In the case of all dividends or
other distributions by the Company to the holders of its Common Stock with
respect to which any provision of hereof refers to the taking of a record of
such holders, the Company will in each such case take such a record and will
take such record as of the close of business on a Business Day.
8.3 Closing of Transfer Books. The Company shall not at
any time, except upon dissolution, liquidation or winding up of the Company,
close its stock transfer books or Warrant transfer books so as to result in
preventing or delaying the exercise or transfer of any Warrant.
9. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage pre-paid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission, or, if mailed, two days after the date of deposit in the United
States mails, as follows:
(i) if to the Company, to:
SIGA Technologies, Inc.
420 Lexington Avenue, Suite 601
New York, New York 10170
Attention: Thomas N. Konatich
Telephone No.: (212) 672-9100
Facsimile No.: (212) 697-3130
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with a copy (which shall not constitute notice) to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
Attention: James A. Grayer, Esq.
Facsimile No.: (212) 715-8000
(ii) if to the Holder, to:
Mr. Todd J. Slotkin
MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10021
Facsimile No.: (212) 572-8435
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10035
Attention: Franklin M. Gittes, Esq. and
Alan C. Myers, Esq.
Facsimile No.: (212) 735-2000
Any party may be given notice in accordance with this Section 9, unless such
party designates another address or person for receipt of notice hereunder.
10. No Impairment; Regulatory Compliance And Cooperation;
Notice Of Expiration. The Company shall not by any action, including, without
limitation, amending its charter documents or through any reorganization,
reclassification, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other similar voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder against impairment.
11. Miscellaneous.
11.1 Successors and Assigns. This Warrant shall inure
to the benefit of and be binding upon the successors and assigns of the
Company, the Holder and their respective successors and assigns. The
Holder's rights under this Warrant may be assigned, in whole or in part, to
(a) any Permitted Transferee, and any Permitted Transferee shall be deemed
to be a Holder for all purposes hereunder or (b) any transferee of a
Warrant, or, if applicable, any portion of a Warrant, that represents (x)
the greater of (A) 10% of the Warrant Shares exercisable by such transferor
on the date of such transfer and (B) 34,149 Warrant Shares (subject to
adjustment as set forth herein) or (y) if the transferor shall then
15
hold Warrants representing less than 34,149 Warrant Shares (subject to
adjustment as set forth herein), all of the Warrants held by such transferor,
and any such transferee shall be deemed to be a Holder for all purposes
hereunder.
11.2 Designated Office. As long as any of the Warrants
remain Outstanding, the Company shall maintain an office or agency, which may
be the principal executive offices of the Company (the "Designated Office"),
where the Warrants may be presented for exercise, registration of transfer,
division or combination as provided in this Warrant. Such Designated Office
shall initially be the office of the Company at 420 Lexington Avenue, Suite
601, New York, New York 10170. The Company may from time to time change the
Designated Office to another office of the Company or its agent within the
United States by notice given to all registered Holders at least 10 Business
Days prior to the effective date of such change.
11.3 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, the Purchase Agreement and the
Registration Rights Agreement contain 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.
11.4 Governing Law; Jurisdiction; Waiver Of Jury Trial.
The internal laws, and not the laws of conflicts (other than Section 5-1401 of
the General Obligations Law of the State of New York), of New York shall
govern the enforceability and validity of this Warrant, the construction of
its terms and the interpretation of the rights and duties of the Company. Any
suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Warrant or the
transactions contemplated hereby may be brought in any federal or state court
located in the County and State of New York, and the Company hereby consents
to the jurisdiction of such courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to
the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding which
is brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on the company
anywhere in the world, whether within or without the jurisdiction of any such
court. The Company hereby irrevocably waives any and all right to trial by
jury in any legal proceeding arising out of or related to this Warrant or the
transactions contemplated hereby.
11.5 Remedies. Each Holder of Warrants, in addition to
being entitled to exercise its rights granted by law, including recovery of
damages, shall be entitled to specific performance of its rights provided
under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and shall waive, in an action for specific
performance, the defense that a remedy at law would be adequate.
16
11.6 Limitation of Liability. No provision hereof and no
enumeration herein of the rights or privileges of the Holder hereof, shall
give rise to any liability of such Holder to pay the Exercise Price for any
Warrant Shares other than pursuant to an exercise of this Warrant or any
liability as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
11.7 Severability. Wherever possible, each provision of
this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Warrant.
11.8 Descriptive Headings. Descriptive headings of the
several sections of this Warrant are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
[Remainder of Page Intentionally Left Blank]
17
IN WITNESS WHEREOF, this Warrant has been executed as of the 14th day
of October, 2003.
SIGA TECHNOLOGIES, INC.
By: /s/ Thomas N. Konatich
-----------------------------
Name: Thomas N. Konatich
Title: Acting Chief Executive Officer
(Title)
ANNEX A
NOTICE OF EXERCISE OF WARRANT
[To be executed only upon exercise of Warrant]
The undersigned hereby irrevocably elects to exercise the
right, represented by the Warrant dated as of October 14, 2003, to purchase
___ shares of common stock, par value $0.0001 per share (the "Warrant
Shares"), of SIGA TECHNOLOGIES, INC. and tenders herewith payment in
accordance with Sections 1 and 2 of such Warrant. The undersigned further
requests, in accordance with Section 2.1(b) of the Warrant, that certificates
for the Warrant Shares hereby purchased (and any securities or other property
issuable upon exercise) be issued in the name of and delivered to
______________ and, if such Warrant Shares are not all of the Warrant Shares
issuable upon exercise of the Warrant, that a new Warrant of like tenor be
issued for the balance of the Warrant Shares.
_______________________________
(Name of Registered Owner)
_______________________________
(Signature of Registered Owner)
_______________________________
(Street Address)
_______________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
ANNEX B
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Warrant.)
FOR VALUE RECEIVED ____________________________________hereby
sells, assigns and transfers unto______________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
the Warrants represented by this Warrant, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
___________________________ attorney-in-fact, with full power of substitution,
to transfer the within Warrant on the books of SIGA TECHNOLOGIES, INC. to give
effect to the transfer made hereby.
Date: _____________, ____
_________________________________
Signature
NOTICE: The signature on this assignment must correspond with the
name as written upon the face of the within Warrant in every
particular, without alteration or enlargement or any change
whatsoever.