BRIDGE NOTE PURCHASE AGREEMENT By and Between PHARMATHENE, INC. and SIGA TECHNOLOGIES, INC. Dated as of March 20, 2006
Exhibit
10.1
By
and Between
PHARMATHENE,
INC.
and
SIGA
TECHNOLOGIES, INC.
Dated
as of March 20, 2006
TABLE
OF
CONTENTS
ARTICLE
I
CONSTRUCTION............................................................................................................................................................................................................................................
1
1.1 Defined
Terms.....................................................................................................................................................................................................................................................
1
1.2 Other
Definitional
Provisions...........................................................................................................................................................................................................................4
ARTICLE
II PURCHASE OF NOTES; TERMS; ADDITIONAL
TRANSACTIONS.................................................................................................................................................................................................................................................5
2.1 Sale
and Purchase of
Notes..............................................................................................................................................................................................................................
5
2.2 Closing.................................................................................................................................................................................................................................................................
5
2.3 Certain
Terms of
Notes.....................................................................................................................................................................................................................................
5
2.4 Obligations...........................................................................................................................................................................................................................................................6
2.5 Additional
Terms................................................................................................................................................................................................................................................
7
2.6 Use
of
Proceeds...................................................................................................................................................................................................................................................
7
ARTICLE
III REPRESENTATIONS AND
WARRANTIES...........................................................................................................................................................................................
7
3.1 Representations
and Warranties of the
Issuer...........................................................................................................................................................................................
7
3.2 Reliance;
Knowledge......................................................................................................................................................................................................................................
11
3.3 Representations
and Warranties of the
Holder........................................................................................................................................................................................
11
ARTICLE
IV
CONDITIONS...........................................................................................................................................................................................................................................
12
4.1 Conditions
to Holders’
Obligations...........................................................................................................................................................................................................
12
4.2 Conditions
to SIGA’S
Obligations.............................................................................................................................................................................................................
13
ARTICLE
V
COVENANTS............................................................................................................................................................................................................................................
13
5.1 Affirmative
Covenants.................................................................................................................................................................................................................................
13
5.2 Negative
Covenants......................................................................................................................................................................................................................................
15
ARTICLE
VI EVENTS OF
DEFAULT.........................................................................................................................................................................................................................
15
6.1 Bankruptcy,
etc............................................................................................................................................................................................................................................
15
6.2 Other
Events.................................................................................................................................................................................................................................................
16
ARTICLE
VII
MISCELLANEOUS..............................................................................................................................................................................................................................
17
7.1
Amendments
and
Waivers......................................................................................................................................................................................................................
17
7.2
Notices........................................................................................................................................................................................................................................................
17
7.3
No
Waiver; Cumulative
Remedies........................................................................................................................................................................................................
18
7.4
Survival
of Representations and
Warranties.....................................................................................................................................................................................
19
7.5
Payment
of Fees, Expenses;
Taxes........................................................................................................................................................................................................
19
7.6
Indemnification.........................................................................................................................................................................................................................................
19
7.7
Counterparts.............................................................................................................................................................................................................................................
19
7.8
Severability...............................................................................................................................................................................................................................................
19
7.9
Integration.................................................................................................................................................................................................................................................
20
7.10
Brokers
or
Finders.................................................................................................................................................................................................................................
20
7.11 GOVERNING
LAW.................................................................................................................................................................................................................................
20
7.12 Submission
to Jurisdiction;
Waivers..................................................................................................................................................................................................
20
7.13 Remedies...................................................................................................................................................................................................................................................
21
7.14 Successors
and
Assigns........................................................................................................................................................................................................................
21
7.15 Captions.....................................................................................................................................................................................................................................................21
7.16 Non-Disclosure.......................................................................................................................................................................................................................................
21
7.17 Acknowledgements................................................................................................................................................................................................................................
21
i
BRIDGE
NOTE PURCHASE AGREEMENT,
dated
as of March 20, 2006, by SIGA TECHNOLOGIES, INC., a Delaware corporation (“SIGA”
or the “Issuer”), and PHARMATHENE, INC., a Delaware corporation (together with
its successors and assigns, the “Holder”).
RECITALS
SIGA
has
requested that the Holder purchase three notes of the Issuer for a purchase
price of $1,000,000 each and the Holders have agreed to purchase such notes,
in
each case subject to the terms and conditions set forth therein.
NOW
THEREFORE, in consideration of the premises and the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE
I
CONSTRUCTION
1.1 Defined
Terms.
As
used
in this Agreement, the following terms shall have the following
meanings:
“Affiliate”:
as to
SIGA, (i) any Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, the Issuer, including, without
limitation, any joint venture of the Issuer, or (ii) any Person who is a
director, officer, member or partner of (A) the Issuer, or (B) any Person
described in the preceding clause (i). For purposes of this definition,
“control” of a Person means the power, directly or indirectly, either to (i)
vote 25% or more of the voting securities having ordinary voting power for
the
election of directors or managers of such Person, or (ii) direct or cause the
direction of the management and policies of such Person, whether by contract
or
otherwise.
“Agreement”:
this
Bridge Note Purchase Agreement, as from time to time amended and in
effect.
“Business
Day”:
a day
other than a Saturday, Sunday or other day on which commercial banks in New
York
City are authorized or required by law to close.
“By-laws”:
the
By-laws of SIGA, as from time to time amended and in effect.
“Capital
Expenditure”:
any
expenditure by the Issuer in respect of the purchase or other acquisition of
fixed assets.
“Capital
Lease”:
any
lease of property, real or personal, by the Issuer, the obligations of which
are
required in accordance with GAAP to be capitalized on a balance sheet of the
Issuer.
“Change
of Control”:
is
deemed to occur if the current holders of greater than 50% of the currently
outstanding capital stock of SIGA cease to own 50% or more of the outstanding
capital stock of SIGA.
“Closing
Date”:
March
20, 2006, April 19, 2006 and June 18, 2006 and together, “Closing
Dates.”.
“Collateral”:
as
defined in Section 2.3(e).
“Contractual
Obligation”:
any
terms, conditions or provisions of (i) any material agreement, document,
instrument, contract, understanding, arrangement, note, indenture, mortgage
or
lease to which the Issuer is a party or under which the Issuer or any of its
material assets is bound or affected, (ii) the Restated Certificate of
Incorporation, or (iii) the By-laws.
“Event
of Default”:
any of
the events specified in Sections 6.1 or 6.2.
“Exchange
Act”:
Securities Exchange Act of 1934, as amended.
“GAAP”:
generally accepted accounting principles in the United States of America in
effect from time to time.
“GE
Capital Agreement”:
the
Master Security Agreement between General Electric Capital Corporation and
SIGA,
dated as of April 29, 2005.
“Governmental
Authority”:
any
nation or government, any state or other political subdivision thereof and
any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
“Holder”:
each
Holder and any of its successors or assigns.
“Indebtedness”:
(i)
all indebtedness for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business) or which is evidenced by a note, bond, debenture
or
similar instrument, (ii) all obligations under Capital Leases, (iii) all
obligations in respect of letters of credit or acceptances, (iv) all obligations
under currency exchange contracts or interest rate swap agreements, and (v)
all
liabilities secured by any Lien on any property.
“Indemnified
Person”:
as
defined in Section 7.6.
“Interim
Balance Sheet”:
balance sheet as set forth in most recent filing by SIGA on Form 10-Q for the
period ended September 30, 2005 (“Form 10-Q”) with the Securities and Exchange
Commission.
“Interim
Financial Statements”:
financial statements as set forth in Form 10-Q.
“License
Agreement”:
the
proposed License Agreement between PharmAthene and SIGA relating to the current
compound under development by SIGA generally referred to as
2
SIGA
- 246 (“SIGA 246”) pursuant to the terms described in the Term Sheet attached
hereto as Exhibit C.
“Lien”:
any
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), or preference, priority or other security agreement
or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
any
conditional sale or other title retention agreement, any Capital Lease having
substantially the same economic effect as any of the foregoing.
“Material
Adverse Effect”:
a
material adverse effect on (i) the business, operations, property or, condition
(financial or otherwise) or prospects of the Issuer, (ii) the ability of the
Issuer to perform its obligations under the Purchase Documents, or (iii) the
validity or enforceability of the Purchase Documents or the rights or remedies
of the Holders hereunder or thereunder.
“Maturity
Date”:
with
respect to each Note the earlier to occur of (i) the date that is two years
from
the date of such Note, (ii) the closing of a Qualified Financing, or (iii)
a
Sale Event.
“Merger”:
the
proposed merger of PharmAthene with and into a wholly owned subsidiary of SIGA
in accordance with the terms described in the Merger Term Sheet attached to
this
Agreement as Exhibit B.
“Notes”:
the 8%
promissory notes issued pursuant to this Agreement, substantially in the form
attached hereto as Exhibit A and any replacement or substitute note issued
in
respect of such note.
“Operating
Lease”:
any
lease of property, real or personal, which is not a Capital Lease.
“Option
Shares”:
as
defined in Section 3.1(b)(i).
“Permitted
Liens”:
(i)
Liens set forth on Schedule
1.1,
(ii)
Liens currently existing as of the date of this Agreement under the GE Capital
Agreement, (iii) Liens in favor of the Holder, (iii) Liens for taxes, fees,
assessments or other government charges or levies, either not delinquent or
being contested in good faith by appropriate proceedings; provided that adequate
reserves with respect to such taxes, fees, assessments or other government
charges or levies which are being contested are maintained on the books of
the
Issuer, in conformity with GAAP, (v) pledges or deposits in connection with
workers’ compensation, unemployment insurance and other social security
legislation, (vi) purchase money Liens not relating to any obligations in excess
of $20,000 (A) on assets acquired or held by Issuer incurred for financing
the
acquisition of such assets, or (B) existing on such asset when acquired;
provided
that
such Liens are in each case confined to the property and improvements and the
proceeds of such assets, and (vii) leases or subleases and non-exclusive
licenses or sublicenses, not representing obligations of the Issuer in excess
of
$20,000 per year, granted in the ordinary course of the Issuer’s
business.
“Person”:
an
individual, partnership, corporation, business trust, joint stock company,
limited liability company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
3
“Purchase
Documents”:
each
of the Notes and the Security Documents.
“Qualified
Financing”:
any
sale of any of the Issuer’s securities whether in a single transaction or a
series of transactions in excess of $1,000,000 excluding sales of securities
upon the
exercise of stock options to employees, consultants or Directors and the
conversion or exercise of any derivative security of the Issuer outstanding
as
of the date hereof.
“Restated
Certificate of Incorporation”:
the
Restated Certificate of Incorporation of SIGA as publicly filed.
“Sale
Event”:
(i)
the sale or other disposition by the Issuer of all or substantially all of
its
assets and business, whether by or through the sale of the Issuer’s securities
or assets, or any merger, consolidation or joint venture, or otherwise, and
whether in a single transaction or a series of related transactions, or (ii)
the
assignment, licensing or other disposition of any of the Issuer’s intellectual
property relating to SIGA 246.
“SEC”:
the
United States Securities and Exchange Commission.
“Securities
Act”:
the
Securities Act of 1933, as amended.
“Securities
Laws”:
as
defined in Section 3.1(f).
“Security
Agreement”:
the
Security Agreement, of even date herewith, between the Issuer and the Holder,
in
the form attached hereto as Exhibit D.
“Security
Documents”:
the
Security Agreement, and any and all documents, instruments and agreements
necessary to effectuate the transactions contemplated thereby, including any
UCC- 1 financing statements.
“Subsidiary”:
as to
any Person, any other Person of which more than 50% of the shares of stock,
or
other ownership interests having ordinary voting power (other than stock or
such
other ownership interests having such power only by reason of the happening
of a
contingency) to elect a majority of the board of directors or other managers
of
such Person, are at the time owned, directly or indirectly, through one or
more
intermediaries, or both, by such Person.
“UCC”:
the
Uniform Commercial Code, as from time to time in effect in the State of
Delaware.
1.2 Other
Definitional Provisions.
(a) Unless
otherwise specified therein, all capitalized terms used in the Notes or any
certificate or other document made or delivered hereunder shall have the
meanings given to such terms in this Agreement.
(b) As
used
herein and in the Notes, and any certificate or other document made or delivered
hereunder, accounting terms relating to the Issuer not defined in Section 1.1
and accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP.
4
(c)
The
words “hereof’, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision
of this Agreement. References to Sections, Subsections, Schedules and Exhibits
are to this Agreement unless otherwise specified.
(d) The
meanings given to terms defined herein shall be equally applicable to both
the
singular and plural forms of such terms, and masculine words shall include
the
feminine and the neuter genders, and vice versa.
(e) The
word
“including” when used in this Agreement shall be deemed to be followed by the
words “without limitation.”
ARTICLE
II
PURCHASE
OF NOTES; TERMS; ADDITIONAL TRANSACTIONS
2.1 Sale
and Purchase of Notes.
(a) Upon
the
terms and subject to the conditions set forth herein, the Holder agrees to
purchase, and the Issuer agrees to sell to Holder, on each of March 20, 2006,
April 19, 2006 and June 18, 2006 (each, a Closing Date”), Notes in the amount of
$1,000,000 on each Closing Date. At each Closing, the Issuer shall execute
and
deliver to the Holder a Note payable in the principal amount.
(b) The
Holder shall advance to the Issuer at each Closing, by wire transfer of
immediately available funds, 100% of the principal amount of the Note issued
to
the Holder at such Closing.
2.2 Closing.
Upon
the
terms and subject to the conditions set forth in this Agreement, each closing
of
the sale and purchase of the Notes (a “Closing”) shall take place at 10:00 a.m.
on each Closing Date provided that all of the conditions set forth in Article
4
shall be satisfied in accordance herewith, or at such other time as shall be
agreed upon by the parties.
2.3 Certain
Terms of Notes.
(a) Upon
any
termination of the Merger Term Sheet attached as Exhibit B, termination of
the
Definitive Agreement relating to the Merger, or if a Definitive Agreement is
not
executed by the Holder and the Issuer prior to April 24, 2006, SIGA and
PharmAthene will negotiate in good faith with the intention of executing a
definitive License Agreement in accordance with the terms set forth in the
License Agreement Term Sheet attached as Exhibit C and the Issuer agrees for
a
period of 90 days during which the definitive license agreement is under
negotiation, it shall not, directly or indirectly, initiate discussions or
engage in negotiations with any corporation, partnership, person or other entity
or group concerning any Competing Transaction without the prior written consent
of the other party or notice from the other party that it desires to terminate
discussions hereunder. For purposes of this letter, a “Competing Transaction”
shall mean lease, exchange, mortgage, pledge, license, transfer or other
disposition of any of the intellectual properties of the Issuer relating to
SIGA
246. The principal and interest
5
on
the
Notes will be repayable, at the option of the Holder, as a credit (in the
amount
of 110% of such principal and accrued interest) to the license fee payable
under
the definitive License Agreement. The obligation under this Section 2.3 are
independent of this Agreement and shall not
be
extinguished as a result of the satisfaction of any obligations hereunder
or any
termination of this Agreement.
(b) Each
payment of interest or principal on the Notes shall be allocated among all
of
the Notes in proportion, as nearly as practicable, to the respective unpaid
balances outstanding thereunder at the time such payment is made.
(c) The
Issuer shall keep at its principal executive office a register for the
registration of ownership and transfer of Notes. The Issuer covenants and agrees
to take and cause to be taken all action necessary to effect any transfers
and
exchanges requested by the Holder. Any such issuance of new Notes shall not
be
deemed to be the sale of new securities and shall in all respects be subject
to
compliance with applicable federal and state securities laws. Prior to due
presentment for registration of transfer, the Person in whose name any Notes
shall be registered shall be deemed and treated as the owner and holder thereof
for all purposes hereof, and the Issuer shall not be affected by any notice
or
knowledge to the contrary. The Issuer shall give to any Holder promptly upon
request therefor, a complete and correct copy of the names and addresses of
all
registered holders of Notes.
(d) Upon
surrender by a Holder to the Issuer of Notes purchased by the Holder, the
Issuer, at its expense but subject to the last sentence of this paragraph,
shall
issue in exchange therefore, and deliver to such Holder, a new Note or Notes
representing the obligations evidenced by the surrendered Notes, in such
denominations as may be requested by such Holder. Upon receipt by the Issuer
of
evidence satisfactory to it of the ownership of and the loss, theft, destruction
or mutilation of a Note (and the affidavit of a duly authorized representative
of a registered Holder shall be deemed satisfactory to the Issuer), the Issuer,
at its own expense shall execute and deliver, in lieu thereof, one or more
new
Notes, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date
of
such lost, stolen, destroyed or mutilated Note if no interest shall have been
paid thereon. Holder or its assignee or transferee shall be responsible for
all
taxes associated with or related to such transfer.
(e) The
obligations of the Issuer under this Agreement and the Notes are secured by
a
perfected lien and security interest in all of the assets of the Issuer (the
“Collateral”), under the terms of the Security Agreement, which lien and
security interest are subordinated to the liens and security interests of
holders of Permitted Liens.
2.4 Obligations.
Without
impairing or releasing the obligations of the Issuer to the Holder, and without
reducing the amount due under the terms of this Agreement or the Notes (except
to the extent of amounts actually paid to and legally retained by the Holder),
the Holder may at any time and from time to time, without the consent to the
Issuer, upon any terms or conditions, and in whole or in part: (i) exercise
or
refrain from exercising any rights against the Issuer or others or against
any
security for the obligations under this Agreement or otherwise act or refrain
from
6
acting
(other than in breach of its obligations under this Agreement); (ii) settle
or
compromise any obligations of the Issuer under this Agreement, whether in a
proceeding or not, and whether voluntarily or involuntarily, and only upon
an
Event of Default, dispose of any security therefor (with or without
consideration) or settle or compromise any liability incurred directly or
indirectly in respect thereof or hereof, and subordinate the payment of all
or
any part thereof to the payment of any of the obligations under this Agreement,
whether or not due, to creditors of the Issuer other than the Holder; (iii)
apply any sums it receives, by whomever paid or however realized, to any of
the
obligations due under this Agreement; (iv) add, release, settle, modify or
discharge the obligation of any maker, endorser, guarantor, surety, obligor
or
any other party who is in any way obligated for any of the obligations under
this Agreement; (v) accept any additional security for the obligations under
this Agreement; and/or (vi) take any other action which might constitute a
defense available to, or a discharge of, the Issuer or any other obligated
party
in respect of the obligations under this Agreement. The invalidity, irregularity
or unenforceability of all or any part of any Purchase Document with respect
to
the Issuer, or the impairment, loss, failure to obtain or perform any security
or guaranty therefor, whether caused by any action or inaction of the Holder,
or
otherwise, shall not affect, impair or be a defense to the Issuer obligations
under this Agreement or the Notes.
2.5 Additional
Terms.
The
terms
of the Notes described in this Article II do not include all of the terms
applicable to the Notes, and the Notes are subject to such other terms and
conditions set forth herein and therein.
2.6 Use
of Proceeds.
The
proceeds from the sale of the Notes hereunder shall be used by the Issuer
exclusively for (i) expenses directly related to the development of ▇▇▇▇ ▇▇▇,
(▇▇) expenses relating to the Merger and (iii) corporate overhead. The proceeds
shall not be used to repay indebtedness.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Issuer.
To
induce
the Holder to enter into this Agreement and to purchase the Notes, the Issuer
hereby represents and warrants to each Holder as follows:
(a) Organization.
The
Issuer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to own and lease its property and to carry on its business as
presently conducted and as proposed to be conducted. The Issuer is duly
qualified to do business as a foreign corporation in the States of New York,
Florida and California. The Issuer does not own or lease property or engage
in
any activity in any other jurisdiction which would require its qualification
in
such jurisdiction and in which the failure to be so qualified would have a
Material Adverse Effect.
7
(b) Capitalization.
As more
fully described in the capitalization table set forth on Schedule 3.1, the
authorized capital stock of the Issuer immediately prior to and immediately
following each Closing shall consist of:
| (i) |
47,910,223
shares of Common Stock, of which: (i) 26,500,648 shall be validly
issued
and outstanding, fully paid and nonassessable, (ii) 63,038 shares
shall
have been duly reserved for issuance upon conversion of the issued
and
outstanding Preferred Stock, (iii) 11,467,743 shares (the “Option Shares”)
shall have been duly reserved for issuance upon exercise of options
and
(v) 9,878,794 shares shall have been duly reserved for issuance upon
exercise of outstanding Warrants;
and
|
| (ii) |
47,910,223
shares of Common Stock, of which: (i) 26,500,648 shall be validly
issued
and outstanding, fully paid and nonassessable, (ii) 63,038 shares
shall
have been duly reserved for issuance upon conversion of the issued
and
outstanding Preferred Stock, (iii) 11,467,743 shares (the “Option Shares”)
shall have been duly reserved for issuance upon exercise of options
and
(v) 9,878,794 shares shall have been duly reserved for issuance upon
exercise of outstanding Warrants;
and
|
(c) Authorization
of this Agreement and the Purchase Documents; Conflicts.
The
execution, delivery and performance by the Issuer of this Agreement, the Merger
Term Sheet and the Purchase Documents and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
action on the part of the Issuer. Each of this Agreement and the Purchase
Documents has been duly executed and delivered by the Issuer and constitutes
a
valid and binding obligation of the Issuer, enforceable in accordance with
its
terms, subject only to applicable bankruptcy, reorganization, insolvency or
similar laws affecting creditors’ rights generally and to equitable principals
of general application (regardless of whether enforcement is sought in equity
or
at law). The execution, delivery and performance of this Agreement and the
Purchase Documents and the compliance with the provisions hereof and thereof
by
the Issuer, will not:
|
(i)
|
violate
any provision of law, statute, ordinance, rule or regulation or any
ruling, writ, injunction, order, judgment or decree of any court,
administrative agency or other governmental
body;
|
|
(ii)
|
conflict
with or result in any breach of any of the terms, conditions or provisions
of, or constitute (with due notice or lapse of time, or both) a default
(or give rise to any right of termination, cancellation or acceleration)
under (i) any agreement, document, instrument, contract, understanding,
arrangement, note, indenture, mortgage or lease to which the Issuer
is a
party or under which the Issuer or any of its assets is bound or
affected,
(ii) the Restated Certificate of Incorporation, or (iii) the By-laws;
or
|
|
(iii)
|
result
in the creation of any lien, security interest, charge or encumbrance
upon
any of the properties or assets of the Issuer other than as contemplated
herein.
|
8
(d) Authorization
of Notes.
The
issuance by the Issuer of the Notes has been duly authorized by all requisite
action of the Issuer.
(e) Consents
and Approvals.
Except
as set forth in Schedule
3.1(e),
no
authorization, consent, approval or other order of, or declaration to or filing
with, any governmental agency or body (other than filings required to be made
under applicable federal and state securities laws) or any other Person is
or
will be required for: (i) the valid authorization, execution, delivery and
performance by the Issuer of this Agreement, the Merger Term Sheet and the
Purchase Documents; or (ii) the valid authorization, reservation, issuance,
sale
and delivery of the Notes. The Issuer has obtained all other consents that
are
necessary to permit the consummation of the transactions contemplated hereby
and
thereby.
(f) Securities
Laws.
Neither
the Issuer nor anyone acting on its behalf has offered securities of the Issuer
for sale to, or solicited any offers to buy the same from, or sold securities
of
the Issuer to, any Person, in violation of the Securities Act, the Exchange
Act,
or any state securities or “blue sky” laws (collectively, the “Securities
Laws”). The offer, grant, sale and/or issuance of the Notes were not, are not,
or, as the case may be, will not be, in violation of the Securities Laws when
offered, sold and issued in accordance with this Agreement. The Issuer is not
an
Investment Company, as such term is defined under the Investment Company Act
of
1940, as amended.
(g) No
Change.
Except
as set forth in Schedule
3.1(g),
since
the date of the SIGA SEC Reports, there has been no development or event which
has had or could reasonably be expected to have a Material Adverse Effect.
Since
the date of SIGA’s most recent report on Form 10-Q as amended by any SIGA SEC
Reports filed thereafter but prior to the date of this Agreement or as set
forth
on Schedule 3.1(g), there has not been any adverse change in the financial
condition or operations of the Issuer, and that except to the extent reflected
in SIGA’s most recent report on Form 10-Q as amended by any SIGA SEC Reports
filed thereafter but prior to the date of this Agreement or as set forth on
Schedule 3.1(g) and except for liabilities arising in the ordinary course of
business, the Issuer has no material accrued or contingent liabilities arising
out of any transaction or state of facts existing prior to the date
hereof.
(h) No
Material Litigation.
Except
as set forth in the SIGA SEC Reports, or as set forth in Schedule
3.1(h),
no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Issuer, threatened
by or against the Issuer or against any of its respective properties or revenues
(i) with respect to this Agreement or the Purchase Documents or any of the
transactions contemplated hereby or thereby, or (ii) which could reasonably
be
expected to have a Material Adverse Effect.
(i) Solvency.
The
Issuer, after giving effect to each purchase and sale of a Note pursuant to
this
Agreement and the use of the proceeds therefrom, will not be engaged in any
business or transaction for which the Issuer has unreasonably small capital
(within the meaning of Section 548 of the Federal Bankruptcy Code) and the
Issuer has no intent to (i) hinder, delay or defraud any Person to which the
Issuer is, or will become, on or after the date hereof, indebted, or (ii) incur
debts that would be beyond the Issuer’s ability to pay as they mature. After
giving effect to the Transactions, Borrower will be solvent, able to pay its
debts as they mature, will have capital sufficient to carry on its business
and
all businesses in which it is
9
about
to
engage, and (i) as of the Closing Date, the fair present saleable value of
its
assets, calculated on a going concern basis, is in excess of the amount of
its
liabilities and (ii) subsequent to the Closing Date, the fair saleable value
of
its assets (calculated on a going concern basis) will be in excess of the amount
of its liabilities.
(j) Collateral;
Perfection; Security Interest.
The
Security Documents create a valid first security interest, and a perfected
security interest to the extent that perfection may be accomplished by filing
a
financing statement pursuant under the UCC, in the Collateral, securing the
payment of the Notes, and all filings and other actions necessary or desirable
to perfect and protect such security interest have been duly taken. The Issuer
is the legal and beneficial owner of the Collateral free and clear of any Lien,
except for Permitted Liens.
(k) Accounting
Controls and Procedures. SIGA
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded
timely as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Since
December 31, 2004, there have been no changes in the internal accounting
controls or in other factors that could affect SIGA’s internal accounting
controls.
(l) SEC
Filings.
SIGA has
filed all forms, reports and documents required to be filed with the SEC since
January 1, 2000 to the extent that the failure to file such would have a
Material Adverse Effect on SIGA. All such required forms, reports and documents
(including those that SIGA may file subsequent to the date hereof) are referred
to herein as the “SIGA
SEC Reports.”
As
of
their respective dates, the SIGA SEC Reports (i) were prepared in accordance
with the requirements of the Securities Act or the Exchange Act, as the case
may
be, and the rules and regulations of the SEC thereunder applicable to such
SIGA
SEC Reports, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date
of
such filing) contain any untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(m) Compliance.
Other
than as set forth on Schedule 3.1(m), Issuer is in compliance with all material
obligations, agreements and conditions contained in any evidence of indebtedness
or any loan agreement or other material contract or agreement (whether or not
relating to indebtedness) to which the corporation is a party or is subject
(collectively, the “Obligations”), the lack of compliance with which would
result in a Material Adverse Effect.
(n) No
Defaults.
The
Issuer is not in violation of or default under any provision of (i) its By-Laws
or Restated Certificate of Incorporation, (ii) any material contract,
instrument, judgment, order, writ or decree to which it is a party or by which
it or any of its properties are bound, and (iii) the Issuer is not in violation
of any material provision of any
10
federal
or state statute, rule or regulation applicable to the Issuer the result of
which, in the case of (ii) or (iii) above, would have a Material Adverse
Effect.
(o) Payment
of Taxes.
The
Issuer has prepared and filed within the time prescribed by, and in material
compliance with, applicable law and regulations, all federal, state and local
income, excise or franchise tax returns, real estate and personal property
tax
returns, sales and use tax returns, payroll tax returns and other tax returns
required to be filed by it including
giving effect to any permitted extension, and has paid or made provision for
the
payment of all accrued and unpaid taxes and other charges to which the Issuer
is
subject and which are not currently due and payable. The federal income tax
returns of the Issuer have never been audited by the Internal Revenue Service.
Neither the Internal Revenue Service nor any other taxing authority is now
asserting nor is threatening to assert against the Issuer any deficiency or
claim for additional taxes or interest thereon or penalties in connection
therewith, and the Issuer does not know of any such deficiency or basis for
such
deficiency or claim.
3.2 Reliance;
Knowledge.
The
Issuer acknowledges and agrees that the foregoing representations and warranties
shall be deemed material and to have been relied upon by the
Holders.
3.3 Representations
and Warranties of the Holder.
To
induce
the Issuer to enter into this Agreement and to sell the Notes, the Holder hereby
represents and warrants to the Issuer as follows:
(a) Accredited
Investor.
The
Holder is an “accredited investor” within the meaning of Rule 501 promulgated
under the Securities Act.
(b) Authorization.
The
Holder has the capacity to enter into and perform this Agreement and to purchase
the Notes being purchased by the Holder. This Agreement has been duly
authorized, executed and delivered by the Holder, and constitutes the legal,
valid, and binding obligation of such Holder, enforceable in accordance with
its
terms, subject only to applicable bankruptcy, reorganization, insolvency or
similar laws affecting creditors’ rights generally and to equitable principals
of general application (regardless of whether enforcement is sought in equity
or
at law).
(c) Investment
Knowledge.
The
Holder has sufficient knowledge and experience in financial and business matters
so as to be capable of evaluating the risks and merits of its acquisition of
the
Notes contemplated hereby.
(d) Investment
Intent.
The
Notes purchased hereunder by the Holder are being acquired for the Holder’s own
account for the purpose of investment and not with a view to or for resale
in
connection with any distribution thereof or interest therein in violation of
the
Securities Act.
(e) Note
Not Registered Under the Securities Act.
The
Holder understands that (i) the offer and sale of the Notes has not been
registered under the Securities Act or any other Securities Laws, and is being
offered and sold pursuant to an exemption
11
under
the
Securities Act based in part upon the representations of the Holder contained
herein, (ii) the Notes must be held indefinitely unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration (it being understood that the Issuer has no present intention
of
registering any disposition of the Notes), (iii) the Notes shall bear a legend
to such effect, and (iv) the Issuer will make a notation on its transfer books
to such effect.
ARTICLE
IV
CONDITIONS
4.1 Conditions
to Holders’ Obligations.
The
obligations of the Holder to purchase and pay for the Notes on each Closing
Date
shall be subject to satisfaction of the following conditions
precedent:
(a) Proceedings.
All
proceedings to have been taken and all waivers and consents to be obtained
in
connection with the transactions contemplated by this Agreement and the Purchase
Documents shall have been taken or obtained, and all documents incidental
thereto shall be reasonably satisfactory to the Holder and its counsel, and
the
Holder shall have received copies (executed or certified, as may be appropriate)
of all documents which the Holder or its counsel may reasonably have requested
in connection with such transactions.
(b) Legal
Matters. All
legal
matters incident to the purchase and acquisition of the Notes shall be
satisfactory to the Holders’ counsel, and the Holders shall have received from
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, counsel for the Issuer, such firm’s
opinion addressed to the Holder as of the Closing Date, substantially in the
form attached hereto as Exhibit E.
(c) Representations
and Warranties.
The
representations and warranties of the Issuer set forth herein shall be true
and
correct in all material respects on and as of each of the Closing Dates with
the
same force and effect as though such representations and warranties had been
made on and as of each such date.
(d) Secretary’s
Certificate. The
Issuer shall have delivered to the Holder a certificate or certificates, dated
as of each of the Closing Dates, of the Secretary of the Issuer certifying
as to
(i) the resolutions of the Issuer’s Board of Directors authorizing the execution
and delivery of this Agreement, the issuance to the Holder of the Notes, the
execution and delivery of the other Purchase Documents and the consummation
of
the transactions contemplated hereby and thereby, and certifying that such
resolutions were duly adopted and have not been rescinded or amended as of
said
date, and (ii) the name and signature of the officers of the Issuer authorized
to sign, as appropriate, this Agreement, the other Purchase Documents and the
other certificates to be delivered pursuant to this Agreement by either the
Issuer or any of its officers.
(e) Officer’s
Certificate. The
Issuer shall have delivered to the Holder a certificate or certificates, dated
as of each of the Closing Dates, of an executive officer of the Issuer
certifying as to the accuracy of the representations and warranties made by
the
Issuer hereunder.
12
(f) Security
Documents. The
Issuer shall have executed and delivered to the Holder the Security
Documents.
(g) Litigation.
There
shall exist no action, suit, investigation, litigation or proceeding affecting
either party pending or threatened before any court, governmental or regulators
agency or authority or arbitrator that purports to affect the legality, validity
or enforceability
of this Agreement or the Notes any other document related to the consummation
of
the transactions contemplated herein.
(h)
Legality. The execution, delivery and performance of this
Agreement and the Purchase Documents and the compliance with the provisions
hereof and thereof by the Holder, will not violate any provision of law,
statute, ordinance, rule or regulation or any ruling, writ, injunction, order,
judgment or decree of any court, administrative agency or other governmental
body the effect of which would have a Material Adverse Effect.
4.2 Conditions
to SIGA’S Obligations.
The
obligations of SIGA to sell and issue the Notes on each of the Closing Dates
shall be subject to the satisfaction of the following conditions
precedent:
(a) Representations
and Warranties. The
representations and warranties of the Holder contained herein shall be true
and
correct in all material respects on and as of the Closing Date.
(b) Payment
of Purchase Price. The
Holder shall have delivered to the Issuer, and the Issuer shall have received,
payment in full of the purchase price relating to the Notes being purchased
by
the Holder on each Closing Date.
ARTICLE
V
COVENANTS
5.1 Affirmative
Covenants.
For
so
long any amounts are due or payable under the Notes, the Issuer agrees to the
following:
(a) The
Issuer will punctually pay or cause to be paid the principal of and interest
on
the Notes at the times and places and in the manner specified in the
Notes.
(b) The
Issuer shall pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all of its material obligations
of
whatever nature, except where the amount or validity thereof is being contested
in good faith, by appropriate proceedings, and reserves, in conformity with
GAAP
with respect thereto, have been provided on its books and records.
(c) The
Issuer shall (i) continue to engage in business of the same general type as
now
conducted by it, (ii) and preserve, renew and keep in full force and effect
its
corporate existence, (iii) take all reasonable action to maintain all rights,
privileges and
13
franchises
necessary or desirable in the normal conduct of its business; and (iv) comply
with all Contractual Obligations and applicable laws except, in each case,
to
the extent that failure to comply therewith could not, individually or in the
aggregate, have a Material Adverse Effect.
(d) The
Issuer shall (i) keep all material property useful and necessary in its
businesses in good working order and condition; and (ii) maintain with
financially sound and reputable
insurance companies insurance policies on all its property in such amounts
and
against such risks (but including in any event environmental and product
liability) as are applicable to the policies currently maintained by the Issuer
and in place.
(e) The
Issuer shall keep proper books of records and accounts in which full, true
and
correct entries in conformity with GAAP and all applicable laws shall be made
in
all material respects of all dealings and transactions in relation to its
business and activities; permit representatives of any Holder to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time during business hours and as often
as
may reasonably be required but not so as to materially interfere with the
operation of the business, including, without limitation, any such visit,
inspection or examination by the Holder in connection with any audit conducted
by the Holder, and at which a representative of the Holder may be present from
time to time at the Holder’s discretion, and to discuss the business,
operations, properties and financial and other condition of the Issuer with
officers and employees of the Issuer and with their independent certified public
accountants.
(f) The
Issuer shall promptly give notice to the Holder of:
|
(i)
|
the
occurrence of any Event of Default;
|
|
(ii)
|
any
(A) default or event of default under any Contractual Obligation
of the
Issuer, or (B) litigation, investigation or proceeding which may
exist at
any time between the Issuer and any Governmental Authority;
and
|
|
(iii)
|
any
litigation or proceeding affecting the Issuer in which the amount
involved
is $100,000 or more (unless such litigation or proceeding affects,
involves or relates to any intellectual property of the Issuer, in
which
event there shall be no dollar threshold) and which is not covered
by
insurance or in which injunctive or similar relief is
sought.
|
Each
notice pursuant to this Section 5.1(e) shall be accompanied by a statement
of an
officer of the Issuer selling forth details of the occurrence referred to
therein and stating what action the Issuer proposes to take with respect
thereto.
(g) Each
of
the parties shall execute any and all further documents, and take all further
action which the other may reasonably request in order to effectuate the
transactions contemplated by this Agreement and the Purchase Documents. Without
limiting the generality of the foregoing, such further documents and actions
shall include the execution of agreements and instruments, and filing UCC
financing statements, in order to effectuate the transactions contemplated
by
this Agreement and the Purchase Documents and in order to grant,
preserve,
14
protect
and perfect the validity and priority of the security interests created or
intended to be created by this Agreement and the Purchase
Documents.
(h) The
proceeds from the sale of the Notes hereunder shall be used by the Issuer
exclusively for (i) expenses directly related to the development of ▇▇▇▇ ▇▇▇,
(▇▇) expenses relating
to the Merger and (iii) corporate overhead. The proceeds shall not be used
to
repay indebtedness.
5.2 Negative
Covenants.
For
so
long as any amounts are due or payable under the Notes, the Issuer agrees to
the
following:
(a) The
Issuer shall not create, incur, assume or suffer to exist any Lien upon any
of
its property, assets or revenues, whether now owned or hereafter acquired,
except for Permitted Liens. Except with respect to Permitted Liens held by
GE
Capital, the consent of the Required Holders shall first be obtained before
the
terms of any indebtedness, obligations or commitments underlying any Permitted
Lien are amended, refinanced, increased or in any way changed or before any
additional indebtedness, borrowings, advances or loans are incurred
thereunder.
(b) The
Issuer shall not make any advance, loan, extension of credit or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting a business unit of, or make any other
investment in, any Person, except for investments in cash and cash
equivalents.
(c) Unless
approved by the Holder, the Issuer shall not enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate, unless such transaction
is
in the ordinary course of, and pursuant to the reasonable requirements of the
Issuer’s business, is in good faith and is upon fair and reasonable terms no
less favorable to the Issuer than it would obtain in a comparable arm’s length
transaction with a Person not an Affiliate.
(d) The
Issuer shall not sell, abandon, transfer, lease or otherwise dispose of any
material assets except for (a) collection of Accounts in the ordinary course
of
business, (b) sales of Inventory in the ordinary course of business, or (c)
sales of Equipment which is obsolete and/or not of material value (each as
defined in the Security Agreement).
ARTICLE
VI
EVENTS
OF
DEFAULT
6.1 Bankruptcy,
etc.
If
the
Issuer shall commence any case, proceeding or other action (i) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or
15
its
debts, or (ii) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or
the
Issuer shall make a general assignment for the benefit of its creditors; or
(iii) there shall be commenced against the Issuer any case, proceeding or other
action of a nature referred to in clause (i) or (ii) above which (A) results
in
the entry of an order for relief or any such adjudication or appointment or
(B)
remains undismissed,
undischarged or unbonded for a period of 60 days; or (iv) there shall be
commenced against the Issuer any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry
of
an order for any such relief which shall not have been vacated, discharged,
or
stayed or bonded pending appeal within 60 days from the entry thereof; or (v)
the Issuer shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), (iii), or (iv) above, then all outstanding principal and accrued and
unpaid interest under the Notes, and all other amounts owing under the Notes
and
this Agreement shall immediately become due and payable in full, without the
need for any notice or other action by the Holder.
6.2 Other
Events.
Unless
otherwise waived by the Holder, all outstanding principal and accrued and unpaid
interest under the Notes, and all other amounts payable under the Notes and
this
Agreement, shall become immediately due and payable in full, without the need
for any notice or other action by the Holder, if any of the following events
shall occur and be continuing:
(a) The
Issuer shall fail to pay (i) any principal of the Notes when due in accordance
with the terms thereof or (ii) interest on the Notes or any fees or other amount
payable hereunder or thereunder when due in accordance with the terms thereof
or
hereof, and such default continues for a period of five Business Days;
or
(b) Any
representation or warranty made by the Issuer herein or in any other Purchase
Document shall prove to have been incorrect in any material respect;
or
(c) The
Issuer shall default in the observance or performance of any agreement or
covenant contained in this Agreement any other Purchase Document; provided
that
a default in the observance or performance of any agreement contained in this
Agreement or the Notes which is by its nature curable shall not constitute
an
Event of Default hereunder if such default is fully cured within ten Business
Days of the occurrence thereof, it being agreed that Events of Default as a
result of a failure to satisfy any of Section 5.1(c)(ii) and 5.1(d)(ii), 5.1(e)
(with regard to conformance with GAAP), 5.1(h) and 5.2 are not subject to cure;
or
(d) The
Issuer shall default under any of the indebtedness relating to any of the
Permitted Liens and such default shall continue (in whole or in part) for a
period of ten Business Days; or
(e) The
Issuer shall (i) default in any payment of principal of or interest on any
Indebtedness, (provided that the principal amount of such Indebtedness exceeds,
individually, or in the aggregate, $50,000), payable in the instrument or
agreement under which such Indebtedness was created; or (ii) default in the
observance or performance of any other
16
agreement
or condition relating to any such Indebtedness (provided that the principal
amount of such Indebtedness exceeds, individually, or in the aggregate, $50,000)
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the Holders or
holders of such Indebtedness (or a trustee or agent on behalf of such holder
or
holders or beneficiary or beneficiaries) to cause, with the giving of notice
if
required, such Indebtedness to become due prior to its stated maturity;
or
(f) One
or
more judgments or decrees shall be entered against the Issuer involving in
the
aggregate a liability (not paid or fully covered by insurance) of $250,000
or
more and (i) all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof or (ii) the judgment creditors with respect to such judgments or their
successors or assigns shall have commenced enforcement proceedings, which
enforcement proceedings shall have remained unstayed for 10 consecutive days;
or
(g) The
security interests created by any Purchase Document shall cease for any reason,
unless caused by the action or inaction of any Holder, to be enforceable and
of
the same effect and priority purported to be created thereby.
(h) There
occurs a Change of Control of the Issuer.
ARTICLE
VII
MISCELLANEOUS
7.1 Amendments
and Waivers.
No
provision of this Agreement, the Notes or any Purchase Documents may be waived,
modified or amended except by an instrument in writing executed by the Holder
and the Issuer.
7.2 Notices.
Any
and
all notices, requests, demands, consents and other communications required
or
permitted under this Agreement shall be in writing, signed by or on behalf
of
the party by which given, and shall be considered to have been duly given when
(i) delivered by hand, (ii) sent by telecopier (with receipt confirmed), or
(iii) received by the addressee, if sent by Express Mail, Federal Express or
other reputable express delivery service (receipt requested), or by first class
certified or registered mail, return receipt requested, postage prepaid, in
each
case to the party for which intended addressed as follows (or to such other
addresses and telecopier numbers as a party may from time to time designate
as
to itself by notice similarly given to the other parties in accordance with
this
Section 7.2):
17
|
Issuer:
|
SIGA
Technologies, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
|
With
a copy to:
|
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel:
(▇▇▇)
▇▇▇-▇▇▇▇
Fax:
(▇▇▇)
▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇
▇▇▇▇▇▇, Esq.
|
|
Holder
|
PharmAthene,
Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel:
(▇▇▇)
▇▇▇-▇▇▇▇
Fax:
(▇▇▇)
▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇
▇. ▇▇▇▇▇▇, President and
Chief
Executive Officer
|
|
With
a copy to:
|
▇▇▇▇▇▇▇▇
& English, LLP
Four
Gateway Center
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Tel:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
|
A
notice
of change of address shall not be deemed given until received by the
addressee.
7.3 No
Waiver; Cumulative Remedies.
No
failure to exercise and no delay in exercising, on the part of the Holder,
any
right, remedy, power or privilege hereunder or under any Purchase Document
shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative
and
not exclusive of any rights, remedies, powers and privileges provided by
law.
18
7.4
Survival of Representations and Warranties.
All
representations and warranties made hereunder or under any Purchase Document
and
in any document, certificate or statement delivered hereunder or thereunder
or
in connection herewith or therewith shall survive the Closing Date until the
repayment of the Notes and the extinguishment of all obligations
hereunder.
7.5 Payment
of Fees, Expenses; Taxes.
The
Issuer shall pay, and hold the Holder harmless against all liability for the
payment of, all costs and other expenses incurred by any such Holder in
connection with the Issuer’s performance of and compliance with all agreements
and conditions set forth herein or in any of the Purchase Documents or any
of
the transactions contemplated hereby or thereby on its part to be performed
or
complied with. The Issuer further agrees that it shall pay, and hold the Holder
harmless from, any and all liability with respect to any stamp or similar taxes
which may be determined to be payable in connection with the execution and
delivery of this Agreement or any Purchase Document or any modification,
amendment or alteration to the provisions hereof or thereof. This Section 7.5
shall survive repayment of the Notes and all other amounts payable hereunder.
Notwithstanding the above, Holder or its assignee or transferee shall be
responsible for all taxes associated with or related to such
transfer.
7.6 Indemnification.
The
Issuer will defend, indemnify, and hold harmless the Holder, its subsidiaries,
shareholders, partners, employees, agents, Affiliates, attorneys, officers,
and
directors (each an “Indemnified Person”), from and against any and all claims,
demands, penalties, causes of action, fines, liabilities, settlements, damages,
costs, or expenses of whatever kind or nature, known or unknown, foreseen or
unforeseen, contingent or otherwise (including, without limitation, counsel
and
consultant fees and expenses, investigation and laboratory fees and expenses,
court costs, and litigation expenses) arising out of this Agreement, the other
Purchase Documents or the transactions contemplated hereby and thereby; or
in
any way related to the inaccuracy, breach of or default under any
representations, warranties or covenants of the Issuer set forth herein or
in
any Purchase Document.
7.7 Counterparts.
This
Agreement may be executed in any number of counterparts and by facsimile, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
7.8 Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
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7.9
Integration.
This
Agreement and the other Purchase Documents represent the agreement of the Issuer
and the Holder with respect to the subject matter hereof; and there are no
promises, undertakings, representations or warranties by the Holder relative
to
subject matter hereof not expressly set forth or referred to herein or in the
other Purchase Documents.
7.10 Brokers
or Finders.
The
Issuer represents and warrants to the Holder that no Person has or will have,
as
a result of the transactions contemplated by this Agreement, any right, interest
or valid claim against or upon the Issuer or the Holder for any commission,
fee
or other compensation as a finder or broker because of any act or omission
by
the Issuer or any of its agents.
7.11 GOVERNING
LAW.
THIS
AGREEMENT AND THE PURCHASE DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT AND THE PURCHASE DOCUMENTS SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
7.12 Submission
to Jurisdiction; Waivers.
The
Issuer hereby irrevocably and unconditionally:
(a) submits
for itself and its property in any legal action or proceeding relating to the
Purchase Documents, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the State of
New
York or the Federal Courts for the Southern District of New York;
(b) consents
that any such action or proceeding may be brought in such courts and waives
any
objection that it may now or hereafter have to the venue of any such action
or
proceeding in any such court or that such action or proceeding was brought
in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the Issuer at its address set forth
in this Agreement or at such other address of which the Holder shall have been
notified pursuant thereto;
(d) agrees
that nothing herein shall affect the right to effect service of process in
any
other manner permitted by law or shall limit the right to ▇▇▇ in any other
jurisdiction;
(e) waives,
to the maximum extent not prohibited by law, any right it may have to claim
or
recover in any legal action or proceeding referred to in this subsection any
punitive damages; and
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(f) knowingly,
voluntarily and intentionally waives any rights it may have to a trial by
jury
in respect of any litigation, proceeding or other action arising under or
relating in any manner to this Agreement or any Purchase
Document.
7.13 Remedies.
In
furtherance, and not in limitation, of the rights of the Holder hereunder,
in
case any one or more of the representations, warranties, covenants an/or
agreements set forth in this Agreement shall have been breached by the Issuer,
the Holder may proceed to protect and enforce its rights, whether by suit in
equity and/or by action at law, including an action for damages as a result
of
any such breach and/or any action for specific performance of any such covenant
or agreement.
7.14 Successors
and Assigns.
Except
as
otherwise expressly provided herein, this Agreement shall be binding upon and
inure to the benefit of the Issuer and the Holder and their respective permitted
successors and assigns. This Agreement, and the rights and obligations of the
Holders set forth herein, may be assigned, in whole or in part, by the Holder
without the prior written approval of the Issuer. Neither this Agreement nor
any
of the rights or obligations of the Issuer set forth herein may be assigned
without the prior written approval of the Holder.
7.15 Captions.
Captions
contained herein are inserted as a matter of convenience and in no way define,
limit, extend or describe the scope of this Agreement or the intent of any
provision hereof.
7.16 Non-Disclosure.
The
Issuer shall not issue any press release or other public statement relating
to
the transactions set forth in this Agreement, or otherwise disclose to any
third-party (other than professional advisors) the terms of the transactions
set
forth in this Agreement or any Purchase Documents, without, in either case,
the
prior written consent of the Holder other than as required under the Federal
securities laws.
7.17 Acknowledgements.
The
Issuer hereby acknowledges that:
(a) it
has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the Purchase Documents;
(b) the
Holder does not have any fiduciary relationship to the Issuer, and the
relationship between the Holder, on one hand, and the Issuer, on the other
hand,
is solely that of debtor and creditor; and
(c) no
joint
venture exists between the Holder and the Issuer.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
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THE
ISSUER:
SIGA
TECHNOLOGIES, INC.
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By: /s/
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Chief
Financial Officer
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THE
HOLDER:
PHARMATHENE,
INC.
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By: /s/
▇▇▇▇▇ ▇.
▇▇▇▇▇▇
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▇▇▇▇▇
▇. ▇▇▇▇▇▇,
President and
Chief Executive Officer
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