FINDER'S AGREEMENT
Exhibit
10.2
FINDER'S
AGREEMENT
This
Finder's Agreement (this "Agreement") is made as of October 18, 2006 between
SIGA Technologies, Inc., a Delaware corporation (the "Company"), and Empire
Financial Group, Inc., a Florida corporation (the "Finder"). The Finder and
the
Company agree:
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1.
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Engagement
of Finder:
The Company hereby engages the Finder, and the Finder hereby accepts
such
engagement, to act as the Company's Finder with respect to sales
by the
Company in a private placement transaction (the “Offering”) of up to $10
million aggregate principal amount of Equity, Equity-Related or Debt
Securities (the “Securities”) of the Company to the investors during the
term of this Agreement as set forth in Section
5.
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2.
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Offering
Procedures:
The Finder will introduce the Company to investors who the Finder
reasonably believes to be "accredited investors," as that term is
defined
in Rule 501 of Regulation D promulgated under the Securities Act
of 1933,
as amended (the “1933
Act”),
with whom the Finder has a pre-existing substantive relationship
(the
“Offerees”).
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| 3. |
Finder's
Compensation:
In consideration for the services rendered by the Finder hereunder,
the
Company shall pay to the Finder, or cause the Finder to be paid,
compensation as provided in this section within 3 days of the Company's
receipt of funds from the Offerees.
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| (a) |
Cash
Compensation: The
Company shall pay to the Finder cash compensation equal to three
percent
(3%) of the gross Offering funds received in the Offering. For
purposes of clarity, the parties understand and agree that such cash
compensation is only related to funds received at the initial investment
and not on the exercise of any warrant or option.
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| (b) |
Warrants:
The Finder shall receive one and a half percent (1.5%) warrant
compensation. The warrant calculation
translates to 15,000 warrants per $1 million raised. The warrant’s strike
shall equal the strike, expiration and registration rights of any
warrants
sold to Offerees in the Offering, and if the Offering does not provide
for
the issuance of warrants, then the warrants issued to the Finder
shall
have a strike price equal to the Offering price of any Equity or
Equity-Related Securities sold, have a five-year term and cashless
exercise after one year if the underlying shares are not then registered.
The warrant shares shall be subject to equitable adjustment for stock
splits, stock dividends and similar events. The warrant shares shall
have
“piggyback” registration rights.
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| (c) |
If,
at any time prior to one year following the end of the Offering (the
“Term”) the Company directly or indirectly sells, in a private
transaction, any type of security to an investor with whom negotiations
were initiated by the Finder during the Term, the Company shall pay
the
Finder the compensation
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1
to
which it would be entitled under paragraph 3 if
the transaction had occurred during the Term.
Certain
Matters Relating to Finder’s Duties:
| (a) |
The
Finder’s responsibilities shall be limited to introducing potential
investors to the Company, and the Finder shall not have authority
to offer
or sell the Securities to any potential investor. Finder shall not
use any
general solicitation or general advertising within the meaning of
the
applicable securities laws in connection with any offering. The Finder
shall have no responsibility to participate or assist in any negotiations
between any potential investor and the Company. The Finder will have
no
responsibility to act, and the parties contemplate that the Finder
will
not act, as a broker or dealer with respect to the offer or sale
of the
Securities. Further, the Finder shall have no responsibility for
fulfilling any SEC reporting or filing requirements as relates to
the
Company provided however, Finder agrees to provide Company with reasonable
assistance related to any registration, qualification or other
requirements of applicable securities laws and other regulatory matters,
upon request of the Company.
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| (b) |
The
Finder agrees to introduce the Company to Offerees only in states
in which
the Finder has been advised by the Company that offers and sales
of
Securities can be legally made by the
Company.
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| (c) |
The
Finder shall perform its duties under this Agreement in a manner
consistent with the instructions of the Company. Such performance
shall
include, but not be limited to, the delivery to each Offeree a current
copy of the Private Placement Memorandum, Subscription Agreement
and any
Offering Questionnaire and/or similar documents provided to the Finder
by
the Company, as such documents may be amended from time to time by
the
Company and delivered to the Finder. The Finder shall consecutively
number
each copy of the Private Placement Memorandum (which will include
the
first letter of the Finder’s name or other identifying xxxx sufficient to
designate an Offeree introduced by the Finder); keep a log of when
and to
whom each copy of the Private Placement Memorandum is given, with
the
Private Placement Memorandum numbers; maintain a copy of any written
information the Finder obtains regarding the suitability of each
Offeree;
and only use the Private Placement Memorandum in introducing Offerees
to
the Company. The Finder shall provide this log and all such written
information to the Company at any time and promptly upon request
of the
Company at the termination of this Agreement. The Company shall,
promptly
following execution of this Agreement, provide the Finder with a
written
list of prospective Offerees that the Company does not want the Finder
to
contact. The Finder agrees to not contact the persons on such list,
and
the Finder shall not be entitled to the compensation set forth in
Section
3 with respect to any investment made by such person in the Company’s
Securities.
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| (d) |
The
Finder is and will hereafter act as an independent contractor and
not as
an employee of the Company and nothing in this Agreement shall be
interpreted or construed to create any employment, partnership, joint
venture, or other relationship between the Finder and the Company.
The
Finder will not hold itself out as having, and will not state to
any
person that the Finder has, any relationship with the Company other
than
as an independent contractor. The Finder shall have no right or power
to
find or create any liability or obligation for or in the name of
the
Company or to sign any documents on behalf of the
Company.
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| 4. |
Right
of First Refusal.
In consideration for the Finder acting as the finder in connection
with
the proposed offering, the Company hereby grants the Finder a right
of
first refusal to serve as the Company’s exclusive financial advisor and
investment banker in connection with any financial transaction for
a
period of 1 year from the closing of the transaction. In the event
the
company advises the Finder that it desires to effect any financial
transaction, the Company and the Finder will negotiate in good faith
the
terms of the Finder’s engagement in a separate agreement which would set
forth, among other matters, compensation for the Finder based upon
customary fees for the services provided.
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| 5. |
Termination
of Agreement.
Either party may terminate this Agreement by notifying the other
party in
writing upon a material breach by that other party, unless such breach
is
curable and is in fact cured within 15 days after such notice. This
Agreement will otherwise terminate upon completion or termination
of the
Offering. The Company may terminate this Agreement following ninety
(90)
days after the date hereof upon written notice. Notwithstanding the
foregoing, all provisions of this Agreement other than section 1,
2 and 3
shall survive the termination of this Agreement with respect to Offerees
who the Finder introduces to the Company prior to any termination
with
respect to the Offering. The Finder shall be entitled to compensation
under section 3 based on investments made by such Offerees prior
to the
termination of this Agreement or at any time within one year
thereafter.
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| 6. |
Indemnification.
The Company and the Finder each shall indemnify and defend the other
and
the other’s affiliates, directors, officers, employees, agents,
consultants, attorneys, accountants, and other representatives (each
an
“Indemnified
Person”)
and shall hold each Indemnified Person harmless, to the fullest extent
permitted by law, from and against any and all claims, liabilities,
losses, damages and expenses (including reasonable attorney’s fees and
costs), as they are incurred, in connection with the Offering, resulting
from the indemnifying party’s negligence, bad faith or willful misconduct
in connection with the Offering, any violation by the indemnifying
party
(not caused by an Indemnified Person) of Federal or state securities
laws
in connection with the Offering, or any breach by the indemnifying
party
of this Agreement. In case any litigation or proceeding shall be
brought
against any Indemnified Person under this section, the indemnifying
party
shall be entitled to assume the defense of such litigation or proceeding
with counsel of the indemnifying party’s choice at its expense (in which
case the indemnifying party shall not be responsible for the fees
and
expenses of any separate counsel retained by such Indemnified Person,
except in the limited circumstances described below in this section);
provided, however, that such counsel shall be reasonably satisfactory
to
the
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Indemnified
Person. Notwithstanding the indemnifying
party’s election to assume the defense of such litigation or proceeding (a) such
Indemnified Person shall have the right to employ separate counsel and to
participate in the defense of such litigation or proceeding, and (b) the
indemnifying party shall bear the reasonable fees, costs and expenses of
separate counsel if (but only if) the use of counsel selected by the
indemnifying party to represent such Indemnified Person would present such
counsel with a conflict of interest under applicable laws or rules of
professional conduct.
| 7. |
Confidentiality
of Offeree Information.
The Company acknowledges that the identity of the Offerees, and all
confidential information about Offerees received by the Company from
an
Offeree or the Finder, is confidential information of the Finder
and may
not be shared with any other person without the consent of the
Finder.
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| 8. |
Notices.
Any notice, consent, authorization or other communication to be given
hereunder shall be in writing and shall be deemed duly given and
received
when delivered personally, when transmitted by fax, three days after
being
mailed by first class mail, or one day after being sent by a nationally
recognized overnight delivery service, charges and postage prepaid,
properly addressed to the party to receive such notice, at the following
address or fax number for such party (or at such other address or
fax
number as shall hereafter be specified by such party by like
notice):
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(a) If
to the
Company,
to:
Xxxxxx
X.
Xxxxxxxx
Chief
Financial Officer
000
Xxxxxxxxx Xxx.
Xxxxx
000
Xxx
Xxxx,
XX 00000
Phone: (000)
000-0000
Fax: (000)
000-0000
(b)
If
to the
Finder,
to:
Xxxx
Xxxxxxx
Managing
Director
000
Xxxxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Phone: (000)
000-0000
Fax: (000)
000-0000
E-Mail: xxxxxxxx@xxxxxxxxx.xxx
| 9. |
Company
to Control Transactions.
The
prices, terms and conditions under which the Company shall offer
or sell
any Securities shall be determined by the Company
in
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its
sole discretion. The Company shall have the
authority to control all discussions and negotiations regarding any proposed
or
actual offering or sale of Securities. Nothing in this Agreement shall obligate
the Company to actually offer or sell any Securities or consummate any
transaction. The Company may terminate any negotiations or discussions at any
time and reserves the right not to proceed with any offering or sale of
Securities. Compensation pursuant to this Agreement shall only be paid to the
Finder in the event of an actual Closing of the Offering to an Offeree
introduced by Finder.
| 10. |
Confidentiality
of Company Information.
The Finder, and its officers, directors, employees and agents shall
maintain in strict confidence and not copy, disclose or transfer
to any
other party (1) all confidential business and financial information
regarding the Company and its affiliates, including without limitation,
projections, business plans, marketing plans, product development
plans,
pricing, costs, customer, vendor and supplier lists and identification,
channels of distribution, and terms of identification of proposed
or
actual contracts and (2) all confidential technology of the Company.
In
furtherance of the foregoing, the Finder agrees that it shall not
transfer, transmit, distribute, download or communicate, in any
electronic, digitized or other form or media, any of the confidential
technology of the Company. The foregoing is not intended to preclude
the
Finder from utilizing, subject to the terms and conditions of this
Agreement, the Private Placement Memorandum and/or other documents
prepared or approved by the Company for use in the
Offering.
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All
communications regarding any possible transactions, requests for due diligence
or other information, requests for facility tours, product demonstrations or
management meetings, will be submitted or directed to the Company, and the
Finder shall not contact any employees, customers, suppliers or contractors
of
the Company or its affiliates without express permission. Nothing in this
Agreement shall constitute a grant of authority to the Finder or any
representatives thereof to remove, examine or copy any particular document
or
types of information regarding the Company, and the Company shall retain control
over the particular documents or items to be provided, examined or copied.
If
the Offering is not consummated, or if at any time the Company so requests,
the
Finder and its representatives will return to the Company all copies of
information regarding the Company in their possession.
The
provisions of this Section shall survive any termination of this
Agreement.
| 11. |
Press
Releases, Etc.
The Company shall control all press releases or announcements to
the
public, the media or the industry regarding any offering, placement,
transaction or business relationship involving the Company or its
affiliates. Except for communication to Offerees in furtherance of
this
Agreement and the provision of the Private Placement Memorandum,
the
Finder will not disclose the fact that discussions or negotiations
are
taking place concerning a possible transaction involving the Company,
or
the status or terms and conditions thereof.
Notwithstanding
the foregoing, the Company agrees to issue a press release prior
to the
opening of the market on the business day following the Company’s receipt
of executed agreements binding Offerees to purchase Securities in
at least
the amount of
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the
minimum Offering (if there is any such minimum)
setting forth the material terms of the Offering.
| 12. |
Due
Diligence:
Neither
the Company, nor any of its directors, officers or shareholders,
should,
in any way rely on the Finder to perform any due diligence with respect
to
the Company. It is expressly understood and agreed that to the extent
due
diligence is conducted; it will be conducted by the
investors.
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| 13. |
Expenses,
Etc.
The Finder shall be exclusively responsible for any compensation,
fees,
commissions or payments of its employees, agents representatives,
co-Finders or other persons or entities utilized by it in connection
with
its activities on behalf of the Company, and the Finder will indemnify
and
hold harmless the Company and its affiliates from the claims of any
such
persons or entities.
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| 14. |
Compliance
with Laws.
The Finder represents and warrants that it is a duly registered
broker/dealer and in good standing with the SEC, NASD and the State
of
California and has and shall maintain such registrations as well
as all
other necessary licenses and permits to conduct its activities under
this
Agreement, which it shall conduct in compliance with applicable federal
and state laws relating to a private placement under Regulation D
of the
1933 Act. The Finder represents that it is not a party to any other
agreement, which would conflict with or interfere with the terms
and
conditions of this Agreement.
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| 15. |
Assignment
Prohibited.
No assignment of this Agreement shall be made without the prior written
consent of the other party.
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| 16. |
Amendments.
Neither party may amend this Agreement or rescind any of its existing
provisions without the prior written consent of the other
party.
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| 17. |
Governing
Law.
This Agreement shall be deemed to have been made in the State of
California and shall be construed, and the rights and liabilities
determined, in accordance with the law of the State of California,
without
regard to the conflicts of laws rules of such
jurisdiction.
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| 18. |
Waiver.
Neither Finder’s nor the Company’s failure to insist at any time upon
strict compliance with this Agreement or any of its terms nor any
continued course of such conduct on their part shall constitute or
be
considered a waiver by Finder or the Company of any of their respective
rights or privileges under this
Agreement.
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| 19. |
Severability.
If any provision herein is or should become inconsistent with any
present
or future law, rule or regulation of any sovereign government or
regulatory body having jurisdiction over the subject matter of this
Agreement, such provision shall be deemed to be rescinded or modified
in
accordance with such law, rule or regulation. In all other respects,
this
Agreement shall continue to remain in full force and effect.
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| 20. |
Counterparts.
This Agreement may be executed in one or more counterparts, each
of which
shall be deemed an original, and will become effective and binding
upon
the parties at such time as all of the signatories hereto have signed
a
counterpart of this Agreement. All counterparts so executed shall
constitute one Agreement binding on all of the parties hereto,
notwithstanding that all of the parties are not signatory to the
same
counterpart. Each of the parties hereto shall sign a sufficient number
of
counterparts so that each party will receive a fully executed original
of
this Agreement.
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| 21. |
Entire
Agreement.
This Agreement and all other agreements and documents referred herein
constitutes the entire agreement between the Company and the Finder.
No
other agreements, cove-nants, representations or warranties, express
or
implied, oral or written, have been made by any party hereto to any
other
party concerning the subject matter hereof. All prior and contemporaneous
conversations, negotiations, possible and alleged agreements,
representations, covenants and warranties concerning the subject
matter
hereof are merged herein. This is an integrated
Agreement.
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| 22. |
Arbitration.
The parties agree that this Agreement and all controversies which
may
arise between the Finder and the Company, whether occurring prior,
on or
subsequent to the date of this Agreement, will be determined by
arbitration. The parties understand
that:
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| (a) |
Arbitration
is final and binding on the
parties.
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| (b) |
The
parties are waiving their right to seek remedies in court, including
the
right to a jury trial.
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| (c) |
Pre-arbitration
discovery is generally more limited than and different from court
proceedings.
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| (d) |
The
arbitrators’ award is not required to include factual findings or legal
reasoning and any party’s right to appeal or to seek modification or
rulings by the arbitrators is strictly
limited.
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| (e) |
The
panel of arbitrators will typically include a minority of arbitrators
who
were or are affiliated with the securities
industry.
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The
parties agree that any arbitration under this Agreement will be held at the
facilities of and before an Arbitration Panel appointed by the National
Association of Securities Dealers, Inc. (“NASD”), or if the NASD refuses to
accept jurisdiction, then before JAMS/ENDISPUTE in San Francisco, California.
The award of the arbitrators, or of the majority of them, will be final, and
judgments upon the award may be entered in any court, state or federal, having
jurisdiction. The parties hereby submit themselves and their personal
representatives to the jurisdiction of any state or federal court for the
purpose of such arbitration and entering such judgment.
Any
forbearance to enforce an agreement to arbitrate will not constitute a waiver
of
any rights under this Agreement except to the extent stated herein.
THIS
AGREEMENT IS GOVERNED BY A PRE-DISPUTE ARBITRATION CLAUSE CONTAINED IN PARAGRAPH
23 OF THIS AGREEMENT
Empire
Financial Group, Inc.
(the
“Finder”)
By:
/s/
Xxxx Xxxxxxx
Xxxx
Xxxxxxx
Title:
Managing Director
SIGA
Technologies, Inc.
(the
“Company”)
By:
/s/
Xxxxxx X. Xxxxxxxx
Xxxxxx
X.
Xxxxxxxx
Title: Chief Financial Officer
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