Exhibit 8
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") made as of the 7th day of
July, 2000, by and between Open-i Media, Inc., a New York corporation ("Seller"
or the "Company"), and SIGA Technologies, Inc., a Delaware corporation
("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, one million one hundred forty-three thousand (1,143,000)
shares of Series A Preferred stock, par value $0.001 per share, of Seller, all
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants contained herein, and intending to be
legally bound hereby, the parties agree as follows:
1. Purchase of Shares. (a) Seller hereby agrees to sell to Purchaser, and
Purchaser hereby agrees to purchase from Seller, one million one hundred
forty-three thousand (1,143,000) shares of Series A Preferred stock of Seller,
par value $0.001 per share, (the "Purchased Shares"), for and in consideration
of the sum of One Hundred Seventy Thousand Dollars ($170,000) in cash paid
concurrently herewith in immediately available funds, plus the number of shares
of Purchaser common stock as shall equal One Hundred Eighty Thousand Dollars
($180,000) (the "SIGA Shares") as calculated based on the average closing sale
price of Purchaser's common stock on the Nasdaq Small Cap Market on the five (5)
trading dates preceding the Closing Date (as hereinafter defined), plus all
right, title, and interest in and to that certain computer program identified as
"Peerfinder" as set forth in the Assignment of Intellectual Property Agreement
attached hereto as Exhibit A, including appropriate assignments (the "Assets").
The rights, privileges, preferences and other terms of the Purchased Shares are
set forth in the Restated Certificate of Incorporation of the Company (the
"Restated Certificate of Incorporation"), a copy of which is attached hereto as
Exhibit B.
(b) No later than September 30, 2000, subject to any comments of the
Securities and Exchange Commission (the "SEC"), Purchaser shall cause a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") on Form S-3 (or on any successor form to Form S-3 regardless
of its designation) covering the SIGA Shares to become effective under the
Securities Act, and Purchaser shall use its reasonable best efforts to keep such
registration effective in accordance with applicable regulations for a period of
five (5) months from the date on which the SEC declares such registration
statement effective until the SIGA Shares have been sold pursuant to such
registration statement.
(c) Title to the Assets shall be conveyed to Seller, on the Closing
Date (as hereinafter defined), free and clear of all liens and encumbrances.
Purchaser shall assume no obligations or liabilities of Seller whatsoever,
whether known or unknown, matured or unmatured, absolute or contingent, whether
relating to the Assets or otherwise.
(d) The closing of the purchase and sale of the Purchased Shares
hereunder (the "Closing") shall take place at the offices of Camhy Xxxxxxxxx &
Xxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 am on July 7, 2000 or at
such other time and place as the Company and Purchaser may agree in writing (the
"Closing Date").
2. Board Positions. (a) Until (i) such time as Purchaser owns less than
five percent (5%) of Seller's stock on a fully diluted basis, or (ii) the date
of the consummation of an initial public offering of Seller's stock, Seller
shall have the obligation to cause Purchaser's representative ("Purchaser's
Director") to be appointed to Seller's board of directors. Seller and Purchaser
agree that Purchaser's Director shall be either Xxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxx
Xxxxxxx or such other person as shall be mutually acceptable to Seller and
Purchaser. The number of directors on the Company's Board of Directors shall be
initially set at five (5). To determine when Purchaser owns less than five
percent (5%) of Seller's stock for purposes of this Section 2(a) the total
number of shares of common stock issued or issuable to Purchaser shall be
divided by (b) the total number of issued and outstanding shares of common and
preferred stock of Seller, which number shall not include any capital stock
issuable upon exercise of outstanding options or warrants of Seller.
(b) Any board action approving a Below Market Transaction shall
require the affirmative vote of Purchaser's Director. A "Below Market
Transaction" as defined herein, shall mean either (i) a sale of all or
substantially all the assets of the Corporation; or (ii) a merger or
consolidation involving the Company in which the Company is not the surviving
entity and in which the shareholders of the Company immediately preceding such
transaction do not own at least fifty percent (50%) of the total equity interest
in the resulting entity after such transaction is closed, and in either (b)(i)
or (b)(ii) above, the valuation of Seller is less than ten million dollars
($10,000,000).
3. Seller Representations and Warranties. Seller hereby represents and
warrants to Purchaser as follows:
3.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and is in good standing under the laws of the State
of New York, and has the requisite corporate power and authority to own its
properties and to carry on its business in all material respects as now being
conducted and as proposed to be conducted. Except as set forth in Schedule 3.1,
the Company has no subsidiaries or direct or indirect ownership interest in any
firm, corporation, partnership, joint venture, association or other business
organization. The Company is qualified to do business and is in good standing as
a foreign corporation in every jurisdiction in which its ownership of property
or conduct of business requires it so to be qualified and in which the failure
to so qualify would result in any change or effect that is materially adverse (a
"Material Adverse Effect") to the business, properties, results of operations or
financial condition taken as a whole (collectively, "Condition") of the Company.
The Company has the requisite corporate power and authority to execute and
deliver this Agreement and to issue the Purchased Shares and the common stock
into which the Purchased Shares are convertible (the "Conversion Shares") and to
otherwise perform its obligations under this Agreement. The copies of the
Restated Certificate of Incorporation and Bylaws of the Company delivered to
Purchaser prior to the execution of this Agreement are true and complete copies
of
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the duly and legally adopted certificate of incorporation and bylaws of the
Company in effect as of the date of this Agreement.
3.2 Financial Statements. Attached hereto as Exhibit C are the
Company's unaudited balance sheet as of May 31, 2000 (the "Balance Sheet Date")
and profit and loss statements through March, 2000 (the "Financial Statements").
The Financial Statements (i) have been prepared in accordance with the Company's
books and records and (ii) fairly present in all material respects the financial
condition and operating results of the Company as of the dates, and for the
periods indicated therein, subject to normal year-end review adjustments that
individually or in the aggregate will not be material to the financial condition
or business of the Company. Except as reflected in the Financial Statements, the
Company has no material liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business since the Balance Sheet
Date and (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required under GAAP to be reflected in the
Financial Statements, which, in the case of both (i) and (ii), individually or
in the aggregate, are not material to the financial condition or business of the
Company.
3.3 Events Subsequent to the Balance Sheet Date. Since the Balance
Sheet Date, except pursuant to the transactions contemplated hereby or as set
forth on Schedule 3.3 attached hereto, the Company has not (i) issued any stock,
bond or other corporate security, (ii) borrowed any amount, or incurred or
become subject to any liability (absolute, accrued or contingent), except
current liabilities incurred and liabilities under contracts entered into in the
ordinary course of business of the Company and consistent with its past practice
("Ordinary Course of Business"), (iii) discharged or satisfied any lien or
encumbrance, or incurred or paid any obligation or liability (absolute, accrued
or contingent), other than current liabilities shown on the Financial Statements
and current liabilities incurred since the Balance Sheet Date in the Ordinary
Course of Business, (iv) declared or made any payment or distribution to
stockholders (other than in shares of common stock), or purchased or redeemed
any share of its capital stock or other security, (v) mortgaged, pledged,
encumbered or subjected to lien any of its assets, tangible or intangible, other
than liens of current real property taxes not yet due and payable, (vi) sold,
assigned or transferred any of its tangible assets except in the Ordinary Course
of Business, or canceled any debt or claim, (vii) sold, assigned, transferred or
granted any exclusive license with respect to any patent, trademark, trade name,
service xxxx, copyright, trade secret or other intangible asset, (viii) suffered
any material loss of property or waived any right of substantial and material
value, whether or not in the Ordinary Course of Business, (ix) made any change
in officer or director compensation, except in the Ordinary Course of Business,
(x) made any material change in the manner of business, financial condition or
operations of the Company, (xi) entered into any transaction except in the
Ordinary Course of Business or as otherwise contemplated hereby or (xii) entered
into any commitment (contingent or otherwise) to do any of the foregoing. No
event that has or could be reasonably expected to have a Material Adverse Effect
on the Condition of the Company has occurred since the Balance Sheet Date.
3.4 Tax Returns. All required federal, state or local tax returns or
appropriate extension requests of the Company have been filed, and all federal,
state and local taxes required to be paid in accordance with such returns have
been paid or due provision for the payment thereof has been made. The Company
has not received any notice of delinquency in the payment of any federal, state
or local tax, any assessment or governmental charge, or any tax which it is
required to withhold from amounts owing to employees or other third parties. The
Company has
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not received any notice of deficiency or assessment of additional taxes and has
not executed any waiver of any statute of limitations on the assessment or
collection of any tax. The Company has not incurred any tax or worker's
compensation liabilities from the Company's inception through the date hereof
except those reflected in the Financial Statements and incurred in the Ordinary
Course of Business since the Balance Sheet Date. The Company has not made an
election under Article 341(f) of the Internal Revenue Code.
3.5 Title to Properties and Encumbrances. Except as set forth on
Schedule 3.5, the Company has good and marketable title to all of its owned
properties and assets, and is not subject to any mortgage, pledge, lease, lien,
charge, security interest, encumbrance or restriction thereon. The Company does
not own any real property. The Company has not received any notice of any action
or proceeding under any building, zoning or other ordinance, law or regulation.
With respect to the property and assets it leases, the Company is in compliance
with such leases, except where the failure to be so in compliance would not have
a Material Adverse Effect on the Condition of the Company, and to its knowledge,
holds a valid leasehold interest free from any liens, claims or encumbrances.
3.6 Litigation. There are no legal actions, suits, arbitrations or
other legal, administrative or governmental proceedings or investigations
pending or, to the knowledge of the Company, threatened against the Company or
its properties, assets or business, and neither the Company nor any of its
officers has knowledge of any facts which would be reasonably expected to result
in or form the basis for any such action, suit or other proceeding that would
have a Material Adverse Effect on the Condition of the Company. The Company is
not in default with respect to any judgment, order or decree of any court or any
governmental agency or instrumentality known to the Company.
3.7 Compliance with Other Instruments. The Company is not in
violation or default of any term in its Restated Certificate of Incorporation or
Bylaws, or of any term contained in any mortgage, indenture, agreement,
instrument or contract to which it is a party, except for such violations as
would not have a Material Adverse Effect on the Condition of the Company. To its
knowledge, the Company is not in violation of any order, statute, rule or
regulation applicable to the Company, except for such violations as would not
have a Material Adverse Effect on the Condition of the Company. Neither the
execution, delivery and performance of this Agreement nor any other agreement
contemplated hereby, nor, assuming the representations and warranties made by
Purchaser in Article 4 are true and correct, the issuance of the Purchased
Shares, will result in any such violation or be in conflict with or constitute a
default under any such term, or result in the creation of any mortgage, pledge,
lien, encumbrance or charge upon any of the properties or assets of the Company.
3.8 Purchased Shares and Conversion Shares. The Purchased Shares,
when issued in accordance with the terms of this Agreement, will be validly
issued, fully paid, and non-assessable and will be free and clear of all
pledges, liens, encumbrances and restrictions, other than as set forth herein or
pursuant to any agreements contemplated hereby or under applicable federal and
state securities laws. The Conversion Shares issuable upon conversion of the
Purchased Shares have been reserved for issuance and, when so issued, will be
validly issued, fully paid and nonassessable and will be free and clear of all
pledges, liens, encumbrances and restrictions, other than as set forth herein or
pursuant to any agreements contemplated hereby or under applicable federal and
state securities laws.
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3.9 Securities Laws. Based upon the representations and warranties
of Purchaser contained in Article 4 of this Agreement, no consent,
authorization, approval, permit or order of or filing with any governmental or
regulatory authority is required under current laws and regulations applicable
to the Company in connection with the execution and delivery of this Agreement
or the offer, issuance, sale or delivery of the Purchased Shares or the
Conversion Shares, other than (i) the filing of the Restated Certificate of
Incorporation with the Secretary of State of the State of New York, and (ii)
such filings as have been made prior to the Closing, if required, under
applicable state securities laws, except with regard to any notices of sales
required to be filed with the SEC pursuant to Regulation D under the Securities
Act, or such post-Closing filings as may be required under the applicable state
securities laws, which will be timely filed within the applicable periods
therefor. Under the circumstances contemplated hereby, the offer, issuance, sale
and delivery of the Purchased Shares and the Conversion Shares will not, under
current laws and regulations, require compliance with the prospectus delivery or
registration requirements of the Securities Act, assuming the accuracy of the
representations and warranties of Purchaser contained in Article 4 hereof.
3.10 Patents, Trademarks, and Trade Secrets. There are no pending
or, to the Company's knowledge, threatened claims against the Company alleging
that the Company's business, as conducted or as proposed to be conducted,
infringes or conflicts with the rights of others under patents, service marks,
trade names, trademarks, copyrights, trade secrets or other proprietary rights
("Intellectual Property Rights"). To the knowledge of the Company, the Company's
business as now conducted does not, and as proposed to be conducted will not,
infringe or conflict with the rights of others, including Intellectual Property
Rights. The Company owns, or possesses sufficient legal rights to use, all
Intellectual Property Rights and other rights necessary for the operation of its
business as now conducted and as proposed to be conducted without conflict or
infringement against the rights of others. Except as set forth in Schedule 3.10,
there are no outstanding options, licenses, or agreements of any kind relating
to the foregoing, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the Intellectual Property
Rights of any other person or entity, except for those arising from
"off-the-shelf" commercial software. To the knowledge of the Company the Company
has not violated or, by conducting its business as proposed, would not violate
any of the Intellectual Property Rights of any other person or entity. To the
knowledge of the Company, no employee or consultant of the Company owns any
Intellectual Property Rights which are directly or indirectly competitive with
those owned or to be used by the Company or derived from or in connection with
the conduct of the Company's business. The Company is not aware of any violation
or infringement by a third party of any of the Company's Intellectual Property
Rights. The Company has taken and will take reasonable security measures to
protect the secrecy, confidentiality and value of all trade secrets useful in
the conduct of its business.
3.11 Capital Stock. Immediately prior to the Closing, the authorized
capital stock of the Company consists of 50,000,000 shares, par value $.001 per
share, 40,000,000 shares of which are Common Stock, and 10,000,000 shares of
which are preferred stock of which two million (2,000,000) shares will have been
designated Series A Preferred Stock. Immediately prior to the Closing, six
million (6,000,000) shares of Common Stock were issued and outstanding, and two
million (2,000,000) shares of Series A Preferred Stock were issued and
outstanding. The Purchased Shares will, at the time of issuance represent twelve
and one half percent (12.5%) of the issued and outstanding capital stock of the
Company on a fully diluted basis. All of the outstanding shares of the Company's
capital stock were duly authorized and
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validly issued and are fully paid and non-assessable and were issued in
compliance with all applicable federal and state securities laws. Except as set
forth on Schedule 3.11 attached hereto, prior to the Closing, there are no
agreements among the Company's stockholders with respect to the voting or
transfer of the Company's capital stock or with respect to other material
aspects of the Company's affairs. As of the date of this Agreement there are no
convertible securities, warrants, options or other agreements or arrangements
(collectively, "Purchase Rights") under which the Company is or may be obligated
to issue shares of its capital stock or any Purchase Rights. No holder of any
security of the Company is entitled to any preemptive or similar rights to
purchase any securities proposed to be sold by the Company, except as provided
in this Agreement.
3.12 Contracts and Other Commitments.
(a) Except as set forth in Schedule 3.12, the Company does not
have any contracts, agreements, leases, or other commitments, written or oral,
absolute or contingent, which (i) involve more than fifty thousand dollars
($50,000), (ii) extend for more than nine (9) months beyond the date hereof,
(iii) license any Intellectual Property Right to or from the Company, or (iv)
materially restrict or affect the development or distribution of the Company's
products or services. For purposes of the foregoing, all indebtedness,
liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same person or entity (including persons or entities
the Company reasonably believes are affiliated therewith) shall be aggregated
for the purpose of meeting the individual minimum dollar amounts set forth in
Article 3. 12(a)(i) above.
(b) The Company has not (i) declared or paid any dividends or
authorized any distribution upon or with respect to any class or series of its
capital stock, (ii) incurred any indebtedness for borrowed money or any other
liabilities individually in excess of fifty thousand dollars ($50,000), or in
the case of indebtedness and/or liabilities individually less than fifty
thousand dollars ($50,000), in excess of one hundred fifty thousand dollars
($150,000) in the aggregate, (iii) made any loans or advances to any person,
other than ordinary travel advances for travel expenses, or (iv) sold, exchanged
or otherwise disposed of any assets or rights except in the ordinary course of
business.
3.13 Corporate Acts and Proceedings. This Agreement has been duly
authorized by the requisite corporate action and has been duly executed and
delivered by an authorized officer of the Company, and is a valid and binding
obligation of the Company enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by limitations on the enforcement of the remedy of specific
performance and other equitable remedies. The requisite corporate action
necessary to the authorization, creation, issuance and delivery of the Purchased
Shares and the Conversion Shares will be taken by the Company prior to the
Closing.
3.14 Insurance Coverage. There are in full force policies of
insurance issued by insurers of recognized responsibility insuring the Company
and its properties and business against loss, damage, fire or other risks,
including general liability insurance against claims for personal injury, death
or property damage suffered by others upon, in or about the premises occupied by
the Company or occurring as a result of the Company's maintenance or operation
of
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any automobiles, trucks, or other vehicles or other facilities. The Company
maintains all worker's compensation or similar insurance as may be required
under the laws of any state or jurisdiction in which it may be engaged in
business.
3.15 No Brokers or Finders. No person has or will have, as a result
of any act or omission of the Company, any right, interest or valid claim
against the Company or Purchaser for any commission, fee or other compensation
as a finder or broker in connection with the transactions contemplated by this
Agreement. The Company will indemnify and hold Purchaser harmless against any
and all liability solely with respect to any such commission, fee or other
compensation.
3.16 Disclosure. The Company has fully provided Purchaser with the
information which Purchaser has requested for deciding whether to purchase the
Purchased Shares. No representation or warranty by the Company in this Agreement
or the exhibits or schedules attached hereto applicable to it contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained therein or herein not
misleading in light of the circumstances under which they were made. Any
disclosure made under any section of this Article 3 shall be deemed to have been
made under all other sections of this Article 3 to which such disclosure
reasonably relates.
3.17 Registration Rights. Except as set forth on Schedule 3.17,
other than under this Agreement, the Company has not agreed to register under
the Securities Act any of its authorized or outstanding securities.
3.18 Retirement Plans. The Company does not have any "employee
benefit plans," as defined in the Employee Retirement Income Security Act of
1974, as amended.
3.19 Compliance With Environmental Laws. Without limiting the
generality of Section 3.7, the Company is not in violation in any material
respect of any applicable statute, law or regulation relating to the environment
or occupational health and safety, and to its knowledge no material expenditures
are or will be required in order to comply with any such existing statute, law
or regulation.
3.20 Licenses and Permits. The Company possesses from the
appropriate agency, commission, board or government body or authority, whether
state, local or federal, all licenses, permits, authorizations, approvals,
franchises and rights which (a) are necessary for it to engage in the business
currently conducted by it and (b) if not possessed by the Company would have a
Material Adverse Effect on the Condition of the Company.
3.21 Conflicts of Interest. To the Company's knowledge, except as
set forth on Schedule 3.20, no officer or director or holder of more than five
percent (5%) of the Company's capital stock or any affiliate of any such person
has any direct or indirect interest (a) in any person which does business with
the Company, (b) in any material property, asset or right which is used by the
Company in the conduct of its business, or (c) in any contractual relationship
with the Company, other than as an employee. For the purpose of this Section
3.21, there shall be disregarded any interest which arises solely from the
ownership of less than a five percent (5%) equity interest in a corporation
whose stock is regularly traded on any national securities exchange or in the
over-the-counter market.
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3.22 Employees. To the Company's knowledge, no officer of the
Company has any plans to terminate his or her employment with the Company. The
Company has complied in all material respects with all laws relating to the
employment of labor, including provisions relating to wages, hours, equal
opportunity, collective bargaining and payment of Social Security and other
taxes, and the Company has not encountered any material labor difficulties.
3.23 Absence of Restrictive Agreements. To the knowledge of the
Company, no employee of the Company is subject to any secrecy or non-competition
agreement or any agreement or restriction of any kind that would impede in any
way the ability of such employee to carry out fully all activities of such
employee in furtherance of the business of the Company.
3.2 Nondistributive Intent. The Seller is acquiring the SIGA Shares
to be issued pursuant to Section 1 hereof for its own account, for investment
and not with a view to the distribution thereof. Seller will not sell or
otherwise dispose of such shares without registration under the Securities Act,
or an exemption therefrom.
3.25 Other Representations Ineffective. Seller shall not be liable
or bound in any manner by representations, warranties, covenants, agreements or
indemnifications pertaining to the subject matter of this Agreement, whether
express or implied, unless and only to the extent that such representations,
warranties, covenants, agreements or indemnifications are expressly and
specifically set forth in this Agreement or the Schedules hereto or in any
certificate or other agreement, document or instrument delivered pursuant to the
provisions of this Agreement.
4. Purchaser Representations and Warranties. Purchaser hereby represents
and warrants as follows:
4.1 Authority. Purchaser has full power, authority and legal
capacity to execute and deliver this Agreement and to consummate the
transactions described herein.
4.2 No Consent. No consent of any person is required for the
execution, delivery and performance of this Agreement by Purchaser.
4.3 SIGA Shares. The SIGA Shares, when issued in accordance with the
terms of this Agreement, will be validly issued, fully paid, and non-assessable
and will be free and clear of all pledges, liens, encumbrances and restrictions,
other than as set forth herein or pursuant to any agreements contemplated hereby
or under applicable federal and state securities laws.
4.4 Securities Laws. No consent, authorization, approval, permit or
order of or filing with any governmental or regulatory authority is required
under current laws and regulations applicable to the Company in connection with
the execution and delivery of this Agreement or the offer, issuance, sale or
delivery of the SIGA Shares, other than such filings as have been made prior to
the Closing, if required, under applicable state securities laws, except with
regard to any notices of sales required to be filed with the SEC pursuant to
Regulation D under the Securities Act, or such post-Closing filings as may be
required under the applicable state securities laws, which will be timely filed
within the applicable periods therefor. Under the circumstances contemplated
hereby, the offer, issuance, sale and delivery of the SIGA Shares will not,
under current laws and regulations, require compliance with the prospectus
delivery or
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registration requirements of the Securities Act, assuming the accuracy of the
representations and warranties of Seller contained in Article 3 hereof.
4.5 Assets. Purchaser has and the Company will receive at Closing,
good and marketable title to the Assets free and clear of all mortgages,
pledges, liens, charges, restrictions, easements and other encumbrances. There
are no pending or, to the Company's knowledge, threatened claims against
Purchaser alleging that the Assets infringe or conflict with the rights of
others under patents, service marks, trade names, trademarks, copyrights, trade
secrets or other proprietary rights. To the knowledge of Purchaser, the
Company's use of the Assets as proposed to be conducted will not, infringe or
conflict with the rights of others. To the knowledge of Purchaser, no employee
or consultant of Purchaser owns any intellectual property rights which are
directly or indirectly competitive with the Assets. Purchaser is not aware of
any violation or infringement by a third party of any of the Assets. Purchaser
has taken and will take reasonable security measures to protect the secrecy,
confidentiality and value of the Assets.
4.6 No Brokers or Finders. Purchaser has not authorized any person
to act as broker, finder or in any other similar capacity in connection with the
transactions described in this Agreement and the negotiations leading to it in
such manner as to give rise to any valid claim against Seller for any broker's
or finder's fee or similar compensation.
4.7 Nondistributive Intent. Purchaser is acquiring the Purchased
Shares solely for Purchaser's own account for investment and not with a view to
resale or distribution thereof, in whole or in part, and Purchaser has no
present or contemplated intention, agreement, understanding or arrangement to
sell, assign, transfer, hypothecate or otherwise dispose of all or any part of
the Purchased Shares.
4.8 Limitations on Transfer. Purchaser understands that the
Purchased Shares have not been registered under the Securities Act and state
securities laws (the "Securities Laws") and are offered and sold in reliance
upon an exemption from the registration requirements of the Securities Act and
exemptions available under applicable state securities laws and that, in that
regard, Seller is relying on the representations and warranties made by
Purchaser herein.
4.9 Restricted Securities. Purchaser understands that the Purchased
Shares may not be sold, transferred, hypothecated or otherwise disposed of
unless subsequently registered under the Securities Act and applicable state
securities laws or an exemption from such registration is available.
4.10 No Solicitation. Purchaser did not become aware of the offer of
the Purchased Shares through or as a result of any form of general solicitation
or general advertising, including, without limitation, any article, notice,
advertisement or other communication.
4.11 Knowledge and Experience. Purchaser has such knowledge and
experience in business and financial matters that Purchaser is capable of
evaluating the merits and risks of the purchase of the Purchased Shares and
making an informed investment decision with respect thereto.
4.12 Additional Information. Purchaser acknowledges that Purchaser
has had the opportunity to ask questions of the management of Seller and receive
answers about the
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Seller and to obtain and review Seller's books and records and financial
statements of Seller upon Purchaser's request directed to Xxxxx Xxxxx,
President, and Purchaser has been provided with such information as Purchaser
has determined to be sufficient to enable Purchaser to evaluate the economic
merits and risks of the acquisition of the Purchased Shares hereunder.
4.13 Restrictive Legend. Purchaser understands that any certificate
or other document evidencing the Purchased Shares will bear a legend restricting
their transfer and sale and stating that the Purchased Shares have not been
registered under the Securities Laws and referring to the foregoing restrictions
on their transferability and sale.
4.14 Risks. Purchaser understands that an investment in Seller
involves substantial risks and has taken full cognizance of and understands all
risk factors related to the acquisition of the Purchased Shares hereunder as set
forth in the attached "Risk Factors". Purchaser has adequate means of providing
for Purchaser's current needs and possible contingencies, has no need for
liquidity of the Purchased Shares and is able to bear the economic risk of loss
of all of Purchaser's investment in the Purchased Shares.
4.15 Representations. Purchaser, in deciding to enter into this
Agreement and purchase the Purchased Shares, has not relied upon any
representations of Seller, other than those representations contained in this
Agreement and no oral representations have been made by Seller in connection
with the purchase of the Purchased Shares.
4.16 No Legal or Tax Advice. Purchaser understands and acknowledges
that Seller has given no legal or tax advice regarding the tax consequences
arising from an investment in the Purchased Shares, and that the tax
consequences to Purchaser of an investment depend on Purchaser's individual
circumstances. In this regard, Purchaser has consulted with Purchaser's own
legal or tax advisor.
4.17 Corporate Acts and Proceedings. This Agreement has been duly
authorized by the requisite corporate action and has been duly executed and
delivered by an authorized officer of Purchaser, and is a valid and binding
obligation of Purchaser enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by limitations on the enforcement of the remedy of specific
performance and other equitable remedies. The requisite corporate action
necessary to the authorization, creation, issuance and delivery of the SIGA
Shares will be taken by Purchaser prior to the Closing.
4.18 Disclosure. No representation or warranty by Purchaser in this
Agreement or the exhibits or schedules attached hereto applicable to it contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained therein or
herein not misleading in light of the circumstances under which they were made.
Any disclosure made under any section of this Article 4 shall be deemed to have
been made under all other sections of this Article 4 to which such disclosure
reasonably relates.
4.19. Other Representations Ineffective. Purchaser shall not be
liable or bound in any manner by representations, warranties, covenants,
agreements or indemnifications
10
pertaining to the subject matter of this Agreement, whether express or implied,
unless and only to the extent that such representations, warranties, covenants,
agreements or indemnifications are expressly and specifically set forth in this
Agreement or the Schedules hereto or in any certificate or other agreement,
document or instrument delivered pursuant to the provisions of this Agreement.
4.20 Accredited Investor Certification. Purchaser hereby represents
that Purchaser is an accredited investor as that term is defined in Rule 501(a)
of Regulation D under the Securities Act (and such Purchaser understands the
meaning of the definition "Accredited Investor" given thereunder).
5. Conditions to Purchaser's Obligation. The obligations of Purchaser to
complete the transactions contemplated by this Agreement are subject to the
fulfillment prior to or on the Closing Date of the following conditions, any of
which may be waived in whole or in part by Purchaser:
5.1 The representations and warranties of the Company under this
Agreement shall be true in all material respects as of the Closing Date with the
same effect as though made on and as of the Closing Date, except where any such
representation or warranty speaks as of a specific date.
5.2 The Company shall have performed and complied in all material
respects with all other agreements or conditions required by this Agreement
prior to or as of the Closing Date.
5.3 All corporate and other proceedings and actions taken in
connection with the transactions contemplated hereby, and all certificates,
opinions, agreements, instruments and documents referenced herein or incident to
any such transaction, shall be reasonably satisfactory in form and substance to
Purchaser.
5.4 The Restated Certificate of Incorporation in the form attached
hereto as Exhibit B shall have been filed with the Secretary of State of the
State of New York.
5.5 The Company shall have executed and delivered the Amended and
Restated Registration Rights Agreement in substantially the form attached hereto
as Exhibit D.
5.6 The Company shall have executed and delivered the Amended and
Restated Shareholders Agreement in substantially the form attached hereto as
Exhibit E.
5.7 The Company shall have obtained all registrations,
qualifications, permits and approvals required under applicable state securities
laws for the lawful execution and delivery of this Agreement and the offer,
sale, issuance and delivery of the Purchased Shares and the offer of the
Conversion Shares.
5.8 The Company shall have delivered to Purchaser an opinion of
counsel to the Company, dated the Closing Date, a form of which is attached
hereto as Exhibit F, which opinion shall be reasonably satisfactory in form and
substance to Purchaser.
11
5.9 There shall not have been any action taken, or any law, rule,
regulation, order, judgment, or decree proposed, promulgated, enacted, entered,
enforced, or deemed applicable to the transactions contemplated by this
Agreement, by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which makes this Agreement or any of the other transactions
contemplated by this Agreement illegal or otherwise prohibits, restricts, or
delays consummation of any of the other transactions contemplated by this
Agreement or impairs the contemplated benefits to the Company or Purchaser of
this Agreement or any of the other transactions contemplated by this Agreement.
5.10 At the Closing, the Company shall deliver a certificate, dated
the Closing Date, of the Secretary of the Company certifying that attached or
appended to such certificate (1) is a true and correct copy of its Restated
Certificate of Incorporation as of the date thereof; (2) is a true and correct
copy of its Bylaws as of the date thereof; (3) is a true copy of all resolutions
of its board of directors authorizing the execution, delivery and performance of
this Agreement, and each other document to be delivered by the Company pursuant
hereto; and (4) the names and signatures of its duly elected or appointed
officers who are authorized to execute and deliver this Agreement and any
certificate, document or other instrument in connection herewith.
6. Conditions to Company's Obligation. The Company's obligation to sell
and issue the Purchased Shares to Purchaser, according to this Agreement, on the
Closing Date is subject to the fulfillment prior to or on the Closing Date of
the following conditions, any of which may be waived in whole or in part by the
Company:
6.1 Purchaser shall have delivered to the Company cash by wire
transfer or by check, in immediately available funds, in an amount equal to the
cash portion of the purchase price as set forth in Section 1 hereof.
6.2 Purchaser shall have delivered an Intellectual Property
Assignment substantially in the form attached hereto as Exhibit G.
6.3 Purchaser shall have obtained all registrations, qualifications,
permits and approvals required under applicable state securities laws for the
lawful execution and delivery of this Agreement and the offer, sale, issuance
and delivery of the SIGA Shares.
6.4 There shall not have been any action taken, or any law, rule,
regulation, order, judgment, or decree proposed, promulgated, enacted, entered,
enforced, or deemed applicable to the transactions contemplated by this
Agreement, by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which makes this Agreement or any of the other transactions
contemplated by this Agreement illegal or otherwise prohibits, restricts, or
delays consummation of any of the other transactions contemplated by this
Agreement or impairs the contemplated benefits to the Company or Purchaser of
this Agreement or any of the other transactions contemplated by this Agreement.
6.5 At the Closing, Purchaser shall deliver a certificate, dated the
Closing Date, of the Secretary of Purchaser certifying, that attached or
appended to such certificate is a true copy of all resolutions of its board of
directors, authorizing the execution, delivery and
12
performance of this Agreement, and each other document to be delivered by
Purchaser pursuant hereto.
6.6 The representations and warranties of Purchaser under this
Agreement shall be true in all material respects as of the Closing Date with the
same effect as though made on and as of the Closing Date, except where any such
representation or warranty speaks as of a specified date.
6.7 Purchaser shall have executed and delivered the Amended and
Restated Shareholders Agreement in substantially the form attached hereto as
Exhibit E.
6.8 Purchaser shall have executed and delivered to the Company an
Accredited Investor Representation form in substantially the form attached
hereto as Exhibit G.
6.9 Purchaser shall have performed and complied in all material
respects with all other agreements or conditions required by this Agreement
prior to or as of the Closing Date.
7. Indemnification. (a) Seller shall indemnify, defend and hold Purchaser
harmless against all liability, loss or damage, together with all reasonable
costs and expenses related thereto (including reasonable legal fees and
expenses), relating to or arising from the untruth, inaccuracy or breach of any
of the representations, warranties or agreements of Purchaser contained in this
Agreement.
(b) Purchaser shall indemnify and hold Seller harmless against all
liability, loss or damage, together with all reasonable costs and expenses
related thereto (including reasonable legal fees and expenses), relating to or
arising from the untruth, inaccuracy or breach of any of the representation,
warranties or agreements of Seller contained in this Agreement.
(c) Indemnification hereunder shall include liability for any
special, incidental, punitive or consequential damages to the extent the
indemnified party is required to pay such amount to a third party. Except as
expressly provided in the preceding sentence, there shall be no indemnification
by Seller or Purchaser for any special, incidental, punitive or consequential
damages.
(d) Upon making any payment to an indemnified party for any
indemnification claim pursuant to this Section 7, the indemnifying party shall
be subrogated, to the extent of such payment, to any rights which the
indemnified party may have against any other persons or entity with respect to
the subject matter underlying such indemnification claim and the indemnified
party shall take such actions as the indemnifying party may reasonably require
to perfect such subrogation or to pursue such rights against such other persons
or entities as the indemnified party may have.
8. Special Shareholder Rights. The Company shall deliver to Purchaser (i)
within 120 days after the end of each fiscal year audited financial statements
audited by a "Big Five" accounting firm or such regional accounting firm
reasonably acceptable to Purchaser's Director, and (ii) within 30 days of the
end of each month and quarter, internally prepared, unaudited financial
statements.
13
9. Stock Option Plan. Seller and Purchaser acknowledge and agree that in
order to attract and retain the most qualified employees it will be necessary
and desirable for the Company to implement an employee stock option plan. Seller
agrees that at no time without the consent of Purchaser will the Shares issuable
under the plan represent after issuance more than twenty percent (20%) of the
issued and outstanding Shares. Xxxxx Xxxxx and his immediate family will not at
any time be entitled to be participants in such plan.
10. Tax Considerations; Legal Consequences. Purchaser is strongly advised
to consult Purchaser's tax advisor with respect to the tax consequences hereof.
Purchaser also acknowledges that it has been advised by Seller that the
transactions represented by this Agreement have serious legal consequences and
that Seller has strongly advised Purchaser to review this Agreement with legal
counsel prior to execution.
11. Survival of Representations and Warranties. The representations and
warranties made herein by Purchaser shall survive the closing of the purchase
and sale of the Shares as contemplated herein.
12. Entire Agreement. This Agreement and the exhibits hereto constitute
the entire agreement between the parties and supersedes all prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof and no party shall be liable or bound to the other
in any manner by any warranties, representations, covenants or agreements except
as specifically set forth herein or expressly required to be made or delivered
pursuant hereto.
13. Modifications. Any amendment, change or modification of this Agreement
shall be void unless in writing and signed by all parties hereto.
14. Further Assurances. Seller and Purchaser shall execute and deliver to
the appropriate other party such other instruments as may be reasonably required
in connection with the performance of this Agreement and each shall take all
further actions as may be reasonably required to carry out the transactions
contemplated by this Agreement.
15. Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of Seller and Purchaser and their respective heirs, successors,
transferees and legal representatives and permitted assigns. Neither party may
assign any rights hereunder without the consent of the other.
16. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Governing Law. This Agreement shall be governed by the laws of the
State of New York regardless of principles of conflicts of law.
18. Headings. The headings used in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
14
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to
be executed and delivered as of the date hereinabove set forth.
SELLER: Open-i Media, Inc.
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: President
PURCHASER: SIGA Technologies, Inc.
By:
------------------------------------
Name:
Title:
15
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to
be executed and delivered as of the date hereinabove set forth.
SELLER: Open-i Media, Inc.
By:
------------------------------------
Name:
Title:
PURCHASER: SIGA Technologies, Inc.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
Schedule 3.1
Ownership Interests in Business Organizations
1. The Company owns ten thousand (10,000) shares of the capital stock, $0.001
par value per share, of CalendarWare, Inc., a Delaware corporation.
2. The Company owns one hundred twenty-seven thousand seven hundred
twenty-one (127,721) shares of the common stock, $0.0001 par value per
share, of SIGA Technologies, Inc., a Delaware corporation.
Schedule 3.3
Events Subsequent to the Balance Sheet Date
1. Xxxxx Xxxxx is currently paid an annual salary of forty-eight thousand six
hundred fifty dollars ($48,650).
2. On or about May 11, 2000, the Company paid approximately two hundred ten
thousand dollars ($210,000) to former stockholders and creditors of Open
Interactive Media, Inc. ("OIM"), a New York corporation and predecessor
company to Open-i Media, Inc., in satisfaction of certain liabilities of
OIM.
Schedule 3.5
Title to Properties and Encumbrances
1. The Company occupies the premises located at 00 Xxxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000, pursuant to a Lease Agreement, dated January 27, 1994, by and
between OIM, as tenant, and Shushana Company, as landlord.
2. The Company occupies the premises located at 00 Xxxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000, pursuant to a Lease Agreement, dated October 29,1999, by and
between OIM, as tenant, and 75 Franklin Development Corporation, as
landlord.
3. The following equipment of the Company is leased pursuant to the following
Equipment Lease Agreements by and between OIM, as lessee, and the
following leasing companies:
Date of
Leasing Company: Lease #: Lease Agreement:
---------------- -------- ----------------
GE Capital 330500002 1/1/00
GE Capital 330500001 8/1/99
Apple Credit Leasing 185410 8/25/97
Bankers Leasing 1606980 4/28/99
Copelco Leasing 1144892 3/30/99
Copelco Leasing 1129921 8/5/98
Copelco Leasing 0954322 6/10/99
Copelco Leasing 1598953 1/25/96
Copelco Leasing 1598958 10/21/98
Balboa Leasing 000-00000-00 9/13/96
4. Other Encumbrances:
(a) UCC-1 Financing Statement filed naming the Company as Debtor:
Jurisdiction: State of New York
File No.: 096894
Filing Date: 05/16/00
Secured Party: Bankers/Softech/Mid-States
Collateral: Leased Equipment
(b) UCC-l Financing Statement filed naming the Company as Debtor:
Jurisdiction: State of New York
File No.: 097110
Filing Date: 05/16/00
Secured Party: Bankers/Softech/Mid-States
Collateral: All goods, chattels, fixtures, furniture, equipment,
assets, accounts receivable, contract rights, general intangibles &
property of every kind wherever located now or hereafter acquired
and proceeds thereof.
(c) UCC-1 Financing Statement filed naming the Company as Debtor:
Jurisdiction: State of New York
File No.: 00PN25515
Filing Date: 05/19/00
Secured Party: Bankers/Softech/Mid-States
Collateral: Leased Equipment
(d) UCC-1 Financing Statement filed naming the Company as Debtor:
Jurisdiction: State of New York
File No.: 009PN25516
Filing Date: 05/19/00
Secured Party: Bankers/Softech/Mid-States
Collateral: All goods, chattels, fixtures, furniture, equipment,
assets, accounts receivable, contract rights, general intangibles &
property of every kind wherever located now or hereafter acquired
and proceeds thereof.
Schedule 3.10
Licenses and Agreements Relating to Patents, Trademarks, and Trade Secrets
None.
Schedule 3.11
Agreements Among Stockholders
1. On May 4, 2000, the Company and the then current shareholders of the
Company entered into a certain Shareholders Agreement which provides,
among other things, restrictions upon the transfer of the Company's
capital stock.
Schedule 3.12
Contracts and Other Commitments
1. The Company occupies the premises located at 00 Xxxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000, pursuant to a Lease Agreement, dated January 27, 1994, by and
between OIM, as tenant, and Shushana Company, as landlord, pursuant to
which the Company is obligated to pay annual base rent through January 31,
2001 as follows:
2/1/94 to 1/31/95: $30,000
2/1/95 to 1/31/96: $30,000
2/1/96 to 1/31/97: $30,000
2/1/97 to 1/31/98: $33,600
2/1/98 to 1/31/99: $36,000
2/1/99 to 1/31/00: $38,400
2/1/00 to 1/31/01: $45,600.
OIM has an option to extend this Lease Agreement for two years.
2. The Company occupies the premises located at 00 Xxxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000, pursuant to a Lease Agreement, dated October 29,1999, by and
between OIM, as tenant, and 75 Franklin Development Corporation, as
landlord, pursuant to which the Company is obligated to pay annual base
rent through October 31, 2004 as follows:
11/1/99 to 10/31/00 - $67,800.00
11/1/00 to 10/31/01 - $72,546.00
11/1/01 to 10/31/02 - $77,624.22
11/1/02 to 10/31/03 - $83,058.00
11/1/03 to 10/31/04 - $88,872.06.
Schedule 3.17
Registration Rights
1. On May 4, 2000, the Company and the then current shareholders of the
Company entered into a certain Registration Rights Agreement which
provides, among other things, that the Company will register under the
Securities Act certain of its securities upon the occurrence of certain
events.
Schedule 3.20
Conflicts of Interest
1. Xxxxx Xxxxx is the sole shareholder of OIM, subject to the terms of a
certain Agreement, dated May 31, 1999, among certain former shareholders
of OIM and OIM.
Exhibit A
INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT
THIS INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT (the "Assignment")
is executed and delivered as of the 7th day of July, 2000, by and between SIGA
Technologies, Inc., a Delaware corporation ("Assignor"), with an address at 000
Xxxxxxxxx Xxx., Xxx Xxxx, XX 00000, and Open-i Media, Inc., a New York
corporation ("Assignee"), with an address at 00 Xxxxxxxx Xxxxxx, Xxx Xxxx, XX
00000.
WHEREAS, Assignor owns all right, title, and interest in and to that
certain computer application identified as "Peerfinder"; and
WHEREAS, Assignor desires to assign, grant, convey, and transfer
the Peerfinder application and the business associated therewith to Assignee,
and Assignee desires to acquire the Peerfinder application and the business
associated therewith, pursuant to a certain Stock Purchase Agreement of even
date herewith between Assignor and Assignee and in accordance with the terms and
conditions of this Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee, intending
to be legally bound, hereby agree as follows:
SECTION 1
CONVEYANCE OF RIGHTS
1.1 Assignment and Transfer of Assets. Effective as of July 7, 2000 (the
"Effective Date"), Assignor hereby transfers, grants, conveys, assigns, and
relinquishes exclusively to Assignee, its successors and permitted assigns,
absolutely and forever, all of Assignor's right, title, interest, benefit and
claims, whether statutory or at common law, in and to all of the assets,
properties and rights of Assignor, of every type and description, whether
tangible or intangible, relating to the Peerfinder application and the business
associated therewith, together with the goodwill associated with the Peerfinder
application, along with the right to recover for damages and profits for past
infringement thereof and all present and future rights of every kind pertaining
to the Peerfinder application, whether or not such rights are now known,
recognized or contemplated, with such right, title and interest in the
Peerfinder application to be held and enjoyed by Assignee as fully and entirely
as the same would have been held by Assignor had this Assignment not been made,
including, without limitation, the following (all the assets of Assignor to be
transferred and assigned to the Assignee pursuant hereto, including, without
limitation, the Developed Technology, Peerfinder Technology, Software,
Proprietary Rights, Inventories and Contract Rights (as hereinafter defined),
are hereinafter collectively referred to as the "Program"):
(a) The Deliverable, as such term is defined in the Agreement, dated
October 15, 1999, by and between the Assignee and SIGA Pharmaceuticals, Inc.
(the "First Development Agreement"), and all designs, drawings, models,
procedures (including design, manufacturing, test and maintenance procedures),
specifications, equipment, software, test procedures, tools, documentation,
content, training materials and other information and technology in whatever
form developed and/or transferred pursuant to (i) the First Development
Agreement, (ii) each Section of the Specifications (as defined in the First
Development Agreement and incorporated therein) (the
"Specifications"), (iii) the Service Agreement, dated March 9, 2000, between the
Assignor and the Assignee (the "Second Development Agreement"), and (iv) all
amendments, modifications and communications, whether oral or written, to or
with respect to the First Development Agreement, the Second Development
Agreement and the Specifications (hereinafter collectively referred to the
"Developed Technology").
(b) All designs, drawings, procedures (including design,
manufacturing, test and maintenance procedures), specifications, equipment,
software, printed circuit board art work, integrated circuit masks, test
equipment, tools, fixtures, documentation, training materials, and information,
in whatever form, related to, useful, utilizable or necessary in the design,
manufacture, test and/or maintenance of the Program, including, without
limitation, the assets described in the Schedule attached hereto as Schedule A
and made a part hereof (hereinafter collectively referred to the "Peerfinder
Technology").
(c) All computer code (both source and object, in machine readable
and listing form), interfaces, navigational devices, menus, menu structures or
arrangements, icons, help, operational instructions, scripts, information, HTML,
JavaScript, Java, Visual Basic, C++, SQL or any other programming or procedural
language, commands, syntax, graphical designs, photographs, animation, images,
audio and/or digital video components, and the literal and non-literal
expressions of ideas that operate, cause, create, direct, manipulate, access or
otherwise affect the Program and any copyrights, trade secrets and other
intellectual or industrial property rights therein, documentation (including
internal documentation, documentation made available to customers and training
materials), flowcharts, source code notes, software tools, compilers, test
routines and information, in whatever form, and all revisions, release levels
and versions of the foregoing, relating to or used on or with the Program,
offered for sale or license by Assignor, developed by or for Assignor, or in the
possession of Assignor (hereinafter collectively referred to as "Software").
(d) All patents, patent applications, copyrights, trade secrets,
trademarks, trade names, inventions, discoveries, improvements, ideas, know-how,
confidential information, and all other intellectual property or proprietary
rights based, in whole or in part, related to or included in, covering or
pertaining to the Developed Technology, Peerfinder Technology, Software or any
portion thereof (hereinafter collectively referred to as "Proprietary Rights").
(e) All inventories of Peerfinder Technology, Software, or any
portion thereof (hereinafter collectively referred to as "Inventories").
(f) All rights of Assignor under any sales agreements, franchises,
license agreements, lease agreements, maintenance agreements, procurement
agreements, consulting agreement, employee agreements, invention agreements and
all other agreements of whatever nature or kind relating to Peerfinder
Technology, Software or Proprietary Rights (hereinafter collectively referred to
as "Contract Rights").
1.2 Liabilities Excluded. Except as set forth in Section 1.3 below,
Assignor acknowledges that Assignee is acquiring the Program hereunder without
any assumption of Assignor's liabilities.
-2-
1.3 Globix Invoices. Assignor shall pay to Assignee currently with the
execution hereof, sixty thousand dollars ($60,000) in full and complete
satisfaction of Assignor's obligations to Globix, and Assignee shall assume all
obligations of Assignor to Globix, with respect to the Program.
SECTION 2
WARRANTIES OF TITLE
2.1 Assignor represents and warrants that Assignee shall receive, pursuant
to this Assignment as of the Effective Date, complete and exclusive right,
title, and interest in and to all tangible and intangible property rights of
Assignor existing in the Program. Assignor represents and warrants that it has
developed the Program entirely through its own efforts or through the efforts
that were the subject of the First Development Agreement and the Second
Development Agreement for its own account and that the Program, to the extent of
Assignors actions, is free and clear of all liens, claims, encumbrances, rights,
or equities whatsoever of any third party.
2.2 Assignor represents and warrants to the best of its knowledge that
Program does not infringe any patent, copyright, trademark or trade secret of
any third party and that it is unaware of any claim that the Program infringes
any patent, copyright, trademark or trade secret of any third party; that
Assignor has sought protection under applicable patent, copyright and trademark
laws and that such rights have not been forfeited to the public domain; and that
the Program has been maintained in confidence consistent with trade secret law.
2.3 Assignor represents and warrants that all of Assignor's personnel,
including employees, agents, consultants, and contractors, who have contributed
to or participated in the conception and development of the Program either (1)
have been employees of Assignor, or (2) have executed or will execute
appropriate work made for hire or other instruments of assignment in favor of
Assignor as assignee that have conveyed to Assignor full, effective, and
exclusive ownership of all tangible and intangible property thereby arising with
respect to the Program.
2.4 Assignor represents and warrants that there are no agreements or
arrangements in effect with respect to the marketing, distribution, licensing,
or promotion of the Program by any independent salesperson, distributor,
sublicensor, or other remarketer or sales organization.
SECTION 3
ACKNOWLEDGMENT OF RIGHTS
In furtherance of this Assignment, Assignor hereby acknowledges that, from
and after the effective date of this Assignment, Assignee has acceded to all of
Assignor's right, title, and standing to:
(a) Receive all rights and benefits pertaining to the Program.
(b) Institute and prosecute all suits and proceedings and take all
actions that Assignee, in its sole discretion, may deem necessary or proper to
collect, assert, or enforce any claim, right, or title of any kind in and to any
and all of the Program.
-3-
(c) Defend and compromise any and all such action, suits, or
proceedings relating to such transferred and assigned rights, title, interest,
and benefits, and perform all other such acts in relation thereto as Assignee,
in its sole discretion, deems advisable.
SECTION 4
FURTHER ASSURANCES
4.1 At any time and from time to time hereafter, the Assignor shall
forthwith upon the Assignee's written requests and at Assignee's expense take
any and all steps and execute, acknowledge and deliver to the Assignee any and
all further instruments and assurances necessary or desirable to evidence more
fully the transfer of ownership of all of the Program to Assignor. Accordingly,
Assignor agrees:
(a) To execute, acknowledge, and deliver any affidavits or documents
of assignment and conveyance regarding the Program.
(b) To provide testimony in connection with any proceeding affecting
the right, title, or interest of Assignee in the Program.
(c) To perform any other acts deemed necessary to carry out the
intent of this Assignment.
4.2 Assignor hereby constitutes and appoints Assignee its true and lawful
attorney-in-fact, with full power of substitution in Assignor's name and stead
but for Assignee's benefit to take any and all steps (including proceeding at
law, in equity or otherwise at Assignee's cost and expense), and to execute,
acknowledge and deliver any and all instruments and assurances necessary or
expedient in order to vest the aforesaid Program and causes of action more
effectively in Assignee or to protect the same, or to enforce any claim or right
of any kind with respect thereto (at Assignee's cost and expense). Assignor
hereby declares that the foregoing power is coupled with an interest and is
irrevocable.
SECTION 5
MISCELLANEOUS
5.1 This Assignment shall inure to the benefit of, and be binding upon,
the parties hereto, together with their respective legal representatives,
successors, and assigns.
5.2 This Assignment shall be governed by, and construed in accordance
with, the laws of the State of New York, without reference to conflicts of law
provisions thereof.
5.3 This Assignment merges and supersedes all prior and contemporaneous
agreements, assurances, representations, and communications between the parties
hereto relating to the subject matter hereof.
5.4 This Assignment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be
duly executed by their authorized representatives as of the date first above
written.
SIGA TECHNOLOGIES, INC.
By:
-------------------------------
Name:
Title:
OPEN-I MEDIA, INC.
By:
-------------------------------
Name: Xxxxx Xxxxx
Title: President
-5-
STATE OF NEW YORK )
ss.:
COUNTY OF ________)
On the ____ day of ____________ in year 2000 before me, the
undersigned, a notary public in and for said State, personally appeared ________
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.
----------------------------
Notary Public
-6-
SCHEDULE A
1. All software, hardware, equipment and other assets listed on the invoices
numbers 26699, 25993, 25684, 24789, 24790, 24742 and 24546 from PC
Warehouse attached hereto as Rider A.
2. All software, hardware, equipment and other assets listed on all Globix
invoices.
-7-
Exhibit B
Restated Certificate of Incorporation
RESTATED CERTIFICATE OF INCORPORATION
OF
OPEN-I MEDIA, INC.
UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
FIRST: The name of the corporation is Open-i Media, Inc. (hereinafter
referred to as the "Corporation").
SECOND: The certificate of incorporation of the Corporation was filed by
the Department of State on March 18, 1999.
THIRD: The certificate of incorporation, as heretofore amended, is hereby
amended or changed to effect one or more of the amendments or changes authorized
by the Business Corporation Law, to wit:
(A) To provide for the increase in the number of shares constituting
the series of preferred stock of the Corporation known as "Series A Preferred"
to three million one hundred forty-three thousand (3,143,000) shares;
(B) To change certain provisions relating to the adjustment of the
Series A Conversion Price upon the occurrence of certain events; and
(C) To add provisions requiring the affirmative vote of the
directors designated by the holders of the Series A Preferred to approve certain
actions by the Corporation.
FOURTH: To accomplish the foregoing amendments, (i) Section A and Section
B of Article FOURTH of the certificate of incorporation of the Corporation,
relating to the number of shares constituting the series of preferred stock of
the Corporation known as "Series A Preferred" are hereby amended to read as set
forth in the same numbered sections and article of the certificate of
incorporation of the Corporation as hereinafter restated; (ii) Section C (2) (d)
of Article FOURTH of the certificate of incorporation of the Corporation,
relating to adjustments to the Series A Conversion Price upon the occurrence of
certain events is hereby amended to read as set forth in the same numbered
section and article of the certificate of incorporation of the Corporation as
hereinafter restated; and (iii) Section C (2)(b) and Section C (3) of Article
FOURTH of the certificate of incorporation of the Corporation, relating to
voting rights are hereby amended to read as set forth in the same numbered
sections and article of the certificate of incorporation of the Corporation as
hereinafter restated.
FIFTH: The restatement of the certificate of incorporation of the
Corporation herein provided was duly authorized by the unanimous written consent
of the members of the Board of Directors of the Corporation, followed by the
unanimous written consent of the holders of outstanding shares of each class of
the Corporation which is not entitled under the certificate
of incorporation to vote on the said restatement of the certificate of
incorporation, but which is entitled under Section 804 of New York Business
Corporation Law (the "BCL") to vote thereon, having not less than the minimum
requisite proportion of votes, which has been given in accordance with Section
615 of the BCL. Written notice has been given as and to the extent required by
the said Section 615.
SIXTH: The text of the certificate of incorporation of the Corporation is
hereby restated as further amended or changed herein to read as follows:
"FIRST: The name of the corporation is Open-i Media, Inc. (the
"Corporation").
SECOND: The purpose of the corporation is to engage in multimedia design
and production, hardware/software sales, placement and any lawful act or
activity for which corporations may be organized under Article IV of the BCL,
except that it is not formed to engage in any act or activity requiring the
consent or approval of any state official, department, board, agency or other
body without such consent or approval first being obtained.
THIRD: The office of the corporation is to be located in the County of New
York, State of New York.
FOURTH: A. Classes of Stock. The Corporation is authorized to issue two
classes of stock to be designated, respectively, "Common Stock" and "Preferred
Stock." The total number of shares of stock which the Corporation is authorized
to issue is fifty million (50,000,000) shares consisting of forty million
(40,000,000) shares of Common Stock, $0.001 par value per share, and ten million
(10,000,000) shares of Preferred Stock, $0.001 par value per share, of which
three million one hundred forty-three thousand (3,143,000) shares of such
Preferred Stock shall be designated as Series A Preferred Stock.
B. Designation of Preferred Stock. The Preferred Stock may be issued
from time to time in one or more series. The rights, preferences, privileges and
restrictions granted to and imposed on the series designated Series A Preferred
Stock ("Series A Preferred"), which series shall consist of three million one
hundred forty-three thousand (3,143,000) shares, are as set forth in Article
FOURTH C hereof The Board of Directors of the Corporation (the "Board") is
hereby authorized to provide for the issuance of all or any of the remaining
shares of authorized Preferred Stock and to fix or alter the rights,
preferences, privileges and restrictions granted to or imposed upon such
additional series of Preferred Stock and the number of shares constituting any
such series and the designation thereof. Subject to compliance with the BCL and
the provisions of Section C below, the rights, preferences, privileges and
restrictions of any such additional series may be subordinated to, pari passu
with or senior to any of those of any present or future class or series of
Preferred or Common Stock. The Board is also authorized to increase or decrease
the number of shares of any series, prior or subsequent to the issuance of that
series of Preferred Stock, excluding the Series A Preferred, but not below the
number of shares of such series then outstanding. In case the number of shares
of any series shall be so decreased, the shares constituting such decrease shall
resume the status of authorized shares of Preferred Stock.
C. Rights, Preferences, Privileges and Restrictions of the Series A
Preferred. The rights, preferences, privileges and restrictions of the Series A
Preferred are as follows:
1. Liquidation Preference.
-2-
(a) Upon the occurrence of a Liquidation Event, as such term is
defined below, holders of Series A Preferred shall be entitled to receive from
the assets of the Corporation legally available for distribution to the
Corporation's stockholders, prior and in preference to any distribution to the
holders of Common Stock or any other series of Preferred Stock, an amount per
share equal to the original Series A Preferred issue price (the "Series A
Liquidation Preference"). After the payment in full of the Series A Liquidation
Preference, any remaining assets of the Corporation legally available for
distribution to the Corporation's stockholders shall be distributed to the
holders of Common Stock, pro rata in accordance with the number of shares of
Common Stock held.
(b) In the event the assets and funds legally available for
distribution to the holders of Series A Preferred are not sufficient to permit
the payment of the full Series A Liquidation Preference to each holder of Series
A Preferred, then the amount legally available for distribution to the holders
of Series A Preferred shall be allocated among the holders of Series A Preferred
pro rata in accordance with the maximum amounts which such holders would have
received if the assets and funds had been sufficient to permit the payment of
the full amount of the Series A Liquidation Preference.
(c) As used herein, the term "Liquidation Event" shall mean any of
the following events: (i) any sale of all or substantially all of the assets of
the Corporation, or (ii) any liquidation, dissolution or winding up of the
Corporation.
2. Conversion.
(a) Right to Convert. Each share of Series A Preferred shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for such stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing (i) $1.00 by the Series A Conversion
Price, determined as hereafter provided, in effect on the date the certificate
is surrendered for conversion. The initial Series A Conversion Price shall be
$1.00. The Series A Conversion Price shall be subject to adjustment as set forth
in subsection 2(d) below.
(b) Automatic Conversion. Each share of Series A Preferred shall
automatically be converted into shares of Common Stock at the Series A
Conversion Price then in effect immediately prior to the occurrence of any of
the following events (each an "Automatic Conversion Event"): (i) any merger or
consolidation of the Corporation with or into another business entity,
regardless of whether or not the Corporation is the surviving entity, provided
that (A) if the Corporation is not the surviving entity, and (B) the
shareholders of the Corporation immediately preceding such transaction do not
own at least fifty percent (50%) of the total equity interest in the resulting
entity after such transaction is closed, and (C) the valuation of the
Corporation in the transaction is less than ten million dollars ($10,000,000),
the affirmative vote of each of the directors designated by the holders of
Series A Preferred (each a "Series A Designated Director") pursuant to those
certain Stock Purchase Agreements between the holders of Series A Preferred
named therein and the Corporation shall be required to approve such transaction,
or (ii) the closing of a public offering for the sale of any of the
Corporation's securities.
(c) Mechanics of Conversion. Except in the case of an automatic
conversion, before any holder of Series A Preferred shall be entitled to convert
the same into shares of
-3-
Common Stock, such holder shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for the Series A Preferred and shall give written notice to the
Corporation at its principal corporate office of the election to convert the
same and shall state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The Corporation shall,
as soon as practicable thereafter, issue and deliver at such office to such
holder, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares to be
converted, and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock as of such date. The
automatic conversion of shares of Series A Preferred pursuant to subsection 2(b)
shall be deemed to be effective upon the happening of the event upon which such
automatic conversion is contingent, whether or not the holder thereof has
surrendered the certificate therefor and, upon such automatic conversion, the
shares of Series A Preferred shall cease to be outstanding and the holders
thereof shall be entitled only to receive certificates evidencing the Common
Stock issued upon such conversion against delivery of the certificates
evidencing such shares of Series A Preferred. The Corporation shall give written
notice of any automatic conversion resulting from the happening of an Automatic
Conversion Event to all holders of Series A Preferred within five (5) business
days of the occurrence of either: (i) the consummation of the Automatic
Conversion Event or (ii) the receipt of knowledge by any officer of the
Corporation of the consummation of an Automatic Conversion Event. Each holder of
shares of Series A Preferred which have been automatically converted as provided
herein shall surrender the certificate or certificates evidencing such shares of
Series A Preferred, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series A Preferred and the person or persons entitled to
receive shares of Common Stock issuable upon such automatic conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of the date such certificate or certificates are so surrendered.
The Corporation shall, as soon as practicable thereafter, issue and deliver at
such office to such holder, or to the nominee or nominees of such holder, a
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled.
(d) Adjustments to Series A Conversion Price for Diluting Issues.
(i) Special Definitions. For purposes of this Section 2(d),
the following definitions shall apply:
(A) "Option" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire Common Stock or
Convertible Securities (as defined herein) (such excluded options and shares,
the "Reserved Option Shares").
(B) "Convertible Securities" shall mean any
evidences of indebtedness, shares or other securities (other than the Reserved
Option Shares) directly or indirectly convertible into or exchangeable for
Common Stock or Preferred Stock.
(C) "Additional Shares of Common Stock" shall mean
all shares of Common Stock issued (or, pursuant to Subsection 2(d)(iii) of this
Certificate, deemed to be issued) by the Corporation after the date of issuance
of the Series A Preferred ("Original Issue Date"), other than:
- 4 -
(I) shares of Common Stock that on the Original
Issue Date of the first issued share of Series A Preferred Stock (the "First
Original Issue Date") are issued or issuable upon conversion of shares of Series
A Preferred then outstanding or then subject to issuance against receipt of
payment therefor in accordance with the Stock Purchase Agreement;
(II) shares of Common Stock issued or issuable
as a dividend or distribution on Series A Preferred;
(III) the Reserved Option Shares; or
(IV) shares of Common Stock issued or issuable
by reason of a dividend, stock split, split-up or other distribution on shares
of Common Stock excluded from the definition of Additional Shares of Common
Stock by the foregoing clauses (I), (II) and (III) or this clause (IV).
(ii) No Adiustment of Series A Conversion Price. No adjustment
in the number of shares of Common Stock into which the shares of Series A
Preferred are convertible shall be made, by adjustment in the applicable Series
A Conversion Price thereof, unless the consideration per share (determined
pursuant to Section 2(d)(v)) hereof for an Additional Share of Common Stock
issued or deemed to be issued by the Corporation is less than the applicable
Series A Conversion Price in effect on the date of, and immediately prior to,
the issue of such Additional Shares. Notwithstanding the other provisions of
this Section 2(d) to the contrary, no adjustment to the applicable Series A
Conversion Price shall be made as a result of (I) the issuance or deemed
issuance of any shares of Common Stock as a dividend with respect to which
holders of Series A Preferred Stock receive a ratable portion, (II) the issuance
of Common Stock as a result of conversion of the Series A Preferred Stock or the
issuance of any stock options or the issuance of any Common Stock as a result of
the exercise of options that are issued pursuant to option plans applicable to
employees, consultants, and/or directors approved by the Board of Directors,
(III) the issuance or deemed issuance of any shares of Common Stock or
securities convertible into Common Stock to financial institutions or lessors in
connection with commercial credit arrangements, equipment financings or similar
transactions or (IV) securities issued solely in consideration for the
acquisition (whether by merger or otherwise) by the Corporation of all or
substantially all of the capital stock or assets of any other entity or business
organization, or securities issued solely in consideration for the grant by or
to the Corporation of marketing rights, distribution rights, license rights or
similar rights granted by or to the Corporation in consideration of the exchange
of the proprietary technology, whether of the Corporation or any other entity,
provided that with respect to any issuance pursuant to the foregoing clauses
(I), (II) and (III) or (IV), the issuance of such securities is approved by all
of the members of the Board of Directors and as long as such securities are
issued for a price, or options are granted with an exercise price, of no less
than fair market value.
(iii) Issue of Options and Convertible Securities Deemed Issue
of Additional Shares of Common Stock. If the Corporation at any time or from
time to time after the First Original Issue Date shall issue any Options or
Convertible Securities or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares of Common Stock (as
set forth in the instrument relating thereto without regard to any provision
contained therein for a
- 5 -
subsequent adjustment of such number) issuable upon the exercise of such Options
or, in the case of Convertible Securities and Options therefor, issuable upon
the conversion or exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock issued as of the time of such issue or, in
case such a record date shall have been fixed, as of the close of business on
such record date, provided that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(A) no further adjustment in the Series A Conversion
Price shall be made upon the subsequent issue of Convertible Securities or
shares of Common Stock upon the exercise of such Options or conversion or
exchange of such Convertible Securities and, upon the expiration of any such
Option or the termination of any such right to convert or exchange such
Convertible Securities, the Series A Conversion Price then in effect hereunder
shall forthwith be increased to the Series A Conversion Price that would have
been in effect at the time of such expiration or termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to such
expiration or termination, never been issued, and the Common Stock issuable
thereunder shall no longer be deemed to be outstanding; and
(B) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Corporation, or decrease in the number of shares of
Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Series A Conversion Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities, provided that no readjustment pursuant to this clause
(B) shall have the effect of increasing the Series A Conversion Price to an
amount that exceeds the lower of (i) the Series A Conversion Price on the
original adjustment date, or (ii) the Series A Conversion Price that would have
resulted from any issuance of Additional Shares of Common Stock other than such
Stock Options or Convertible Securities between the original adjustment date and
such readjustment date.
(iv) Adjustment of Series A Conversion Price. If the
Corporation issues Additional Shares of Common Stock (including, without
limitation, Additional Shares of Common Stock deemed to be issued pursuant to
Section 2(d)(iii) hereof), without consideration or for a consideration per
share less than the Series A Conversion Price in effect on the date of and
immediately prior to such issue, then and in such event, the Series A Conversion
Price shall be reduced, concurrently with such issue, to a price (calculated to
the nearest tenth of a cent) determined by multiplying the Series A Conversion
Price by a fraction the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issue (including all shares
issuable upon the conversion of shares of Series A Preferred Stock and all
Reserved Option Shares) plus the number of shares of Common Stock that the
aggregate consideration received by the Corporation for the total number of
Additional Shares of Common Stock so issued would purchase at the Series A
Conversion Price in effect prior to such issue; and the denominator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issue (including all shares issuable upon the conversion of shares of
Series A Preferred Stock and all Reserved Option Shares) plus the number of such
Additional Shares of Common Stock so issued; provided that, for the purpose of
this Section 2(d)(iv), (i) all shares of Common Stock issuable upon conversion
of shares of Series A Preferred Stock outstanding immediately prior to such
issue shall be deemed to be outstanding, and (ii)
- 6 -
immediately after any Additional Shares of Common Stock are deemed issued
pursuant to Section 2(d)(iii) hereof, such Additional Shares of Common Stock
shall be deemed to be outstanding.
(v) Determination of Consideration. For purposes of this
Section 2(d), the "Net Consideration Per Share" shall mean the per share
consideration received by the Corporation for the issue of any Additional Shares
of Common Stock and shall be computed as follows:
(A) Cash and Property: such consideration shall:
(I) insofar as it consists of cash, be computed
at the aggregate of cash received by the Corporation, excluding amounts paid or
payable for accrued interest or accrued dividends;
(II) insofar as it consists of property other
than cash, be computed at the Fair Market Value thereof at the time of such
issue; and
(III) if the Corporation issues Additional
Shares of Common Stock together with other shares or securities or other assets
of the Corporation for consideration that covers both, be the proportion of such
consideration so received, computed in good faith by the Board of Directors as
provided in clauses (I) and (II) above.
(B) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section 2(d)(iii) hereof,
relating to Options and Convertible Securities, shall be determined by dividing
(x) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
(y) the maximum number of shares of Common Stock
(as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(vi) Adjustment for Combinations or Consolidation of Common
Stock. If, at any time after the First Original Issue Date the number of shares
of Common Stock outstanding are decreased by a combination of the outstanding
shares of Common Stock, then following the record date fixed for such
combination (or the date of such combination, if no record date is fixed), the
applicable Series A Conversion Price shall be increased so that the number of
shares of Common Stock issuable on conversion of each share of Series A
Preferred shall be decreased in proportion to such decrease in outstanding
shares of Common Stock.
- 7 -
(vii) Adjustment for Stock Dividends, Splits, and the Like. If
the Corporation shall at any time after the applicable First Original Issue Date
fix a record date for the subdivision, split-up or stock dividend of shares of
Common Stock, then, following the record date fixed for the determination of
holders of shares of Common Stock entitled to receive such subdivision, split-up
or dividend (or the date of such subdivision, split-up or dividend, if no record
date is fixed), the Series A Conversion Price shall be appropriately decreased
so that the number of shares of Common Stock issuable on conversion of each
share of Series A Preferred shall be increased in proportion to such increase in
outstanding shares; provided, however, that the Series A Conversion Price shall
not be decreased at such time if the amount of such reduction would be an amount
less than $0.01, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent reduction
that, together with such amount and any other amount or amounts so carried
forward, shall aggregate $0.01 or more.
(viii) Adjustment for Merger or Reorganization, and the Like.
In case of any consolidation, recapitalization or merger of the Corporation with
or into another corporation or the sale of all or substantially all of the
assets of the Corporation to another corporation (other than a subdivision or
combination provided for elsewhere in this Section 2 and other than a
consolidation, merger or sale that is treated as a Liquidation Event pursuant to
Section 1 hereof), each share of Series A Preferred shall thereafter be
convertible into the kind and amount of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock of the
Corporation deliverable upon conversion of such shares of Series A Preferred
would have been entitled upon such consolidation, merger or sale; and, in such
case, appropriate adjustment (as determined in good faith by the Board of
Directors) shall be made in the application of the provisions in this Section 2
set forth with respect to the rights and interest thereafter of the holders of
the shares of Series A Preferred, to the end that the provisions set forth in
this Section 2 (including provisions with respect to changes in and other
adjustments of the Series A Conversion Price) shall thereafter be applicable, as
nearly as reasonably may be, in relation to any shares of stock or other
property thereafter deliverable upon the conversion of the shares of Series A
Preferred.
(e) No Fractional Shares. No fractional shares shall be issued upon
the conversion of any share or shares of Series A Preferred, and the number of
shares of Common Stock to be issued shall be rounded to the nearest whole share.
(f) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Series A Preferred, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Preferred.
(g) No Impairment. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 2 and in the taking of all such action as may be necessary or
- 8 -
appropriate in order to protect the Conversion Rights of the holders of the
shares of Series A Preferred against impairment.
(h) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Series A Conversion Price pursuant to this
Section 2, the Corporation at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms hereof and furnish to each holder
of shares of Series A Preferred a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Series A Preferred, furnish or cause to be furnished to
such holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Series A Conversion Price then in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property that
then would be received upon the conversion of the shares of Series A Preferred.
3. Voting Rights. (a) Each share of Series A Preferred stock shall
have the same voting rights as that number of shares of common stock into which
it may be convertible from time to time at the then Series A Conversion Price.
(b) The following actions shall require the affirmative vote of all
Series A Designated Directors:
(i) any action by the Board to authorize, create, designate or
establish any class or series of capital stock ranking on a parity with, or
senior to Series A Preferred or reclassify any shares of common stock into
shares having any preference or priority as to dividends or assets superior to
or, on a parity with any such preference or priority of the Series A Preferred;
or to in any other manner alter or change the powers, preferences or rights, or
qualification, limitations or restrictions of the shares of Series A Preferred;
(ii) approval or authorization of any liquidation or winding
up or recapitalization or reorganization of the Seller; and
(iii) approval of any proposal to amend the certificate of
incorporation or bylaws of the Corporation in a manner that adversely affects
the rights of the holders of the Series A Preferred.
FIFTH: The Secretary of State is designated as agent of the Corporation
upon whom process against it may be served. The post office address to whom the
Secretary of State shall mail a copy of any process against the Corporation
served upon him is:
Open-i Media, Inc.
00 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SIXTH: No director of the Corporation shall have personal liability to the
Corporation or to its shareholders for damages for any breach of duty in such
capacity, provided, however, that the provision shall not eliminate or limit:
(a) the liability of any director of the Corporation if a judgment
or other final adjudication adverse to him establishes that his acts or
omissions were in bad faith or involved
- 9 -
intentional misconduct or a knowing violation of law or that he personally
gained in fact a financial profit or other advantage to which he was not legally
entitled or, with respect to any director of the Corporation, that his acts
violated Section 719 of the BCL, or
(b) the liability of a director for any act or omission prior to the
final adoption of this article.
SEVENTH: The holders of the Corporation's equity shares shall not be
entitled to preemptive rights in accordance with the provisions of section 622
of the BCL."
IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate
to be executed by its President on the _____ day of July, 2000.
OPEN-I MEDIA, INC.
By: _______________________________
Xxxxx Xxxxx, President
- 10 -
Exhibit C
Financial Statements
Open-i Media
06/27/00 Balance Sheet
As of May 31, 2000
May 31,'00
------------
ASSETS
Current Assets
Checking/Savings
Cash 1,678,322.43
------------
Total Checking/Savings 1,678,322.43
Accounts Receivable
Accounts Receivable 694,751.12
------------
Total Accounts Receivable 694,751.12
Other Current Assets
Gruntal 10,203.75
Stock Subscription Receivable 6,000.00
Security Deposits 18,706.00
------------
Total Other Current Assets 34,909.75
------------
Total Current Assets 2,407,983.30
Fixed Assets
Fixed Assets 56,421.39
------------
Total Fixed Assets 56,421.39
------------
TOTAL ASSETS 2,464,404.69
============
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 140,678.94
------------
Total Accounts Payable 140,678.94
Credit Cards
Amex Corp. Card 18,472.26
------------
Total Credit Cards 18,472.26
Other Current Liabilities
Sales Tax Payable 1,337.99
------------
Total Other Current Liabilities 1,337.99
------------
Total Current Liabilities 160,489.19
------------
Total Liabilities 160,489.19
Equity
Paid in Capital 1,998,085.39
Capital Stock 8,000.00
Retained Earnings 37,944.37
Net Income 259,885.74
------------
Total Equity 2,303,915.50
------------
TOTAL LIABILITIES & EQUITY 2,464,404.69
============
Exhibit C
Financial Statements
Open-i Media
06/27/00 Profit and Loss
January through December 1999
Jan - Dec 99
------------
Ordinary Income/Expense
Income
Development 664,372.79
Training 180,920.02
----------
Total Income 845,292.81
Cost of Goods Sold
CGS Development 171,751.51
CGS Training 111,933.50
----------
Total COGS 283,685.01
----------
Gross Profit 561,607.80
Expense
Miscellaneous 6,229.64
Advertising & Promotion 23,537.51
Open Interactive Leased Equip 200,000.00
Depreciation & Amortization Exp 17,903.99
Payroll Expenses 147,868.95
Professional Fees 46,382.58
Office Expense 19,115.17
Rent 36,386.36
Telephone 7,812.18
Travel & Ent 6,258.34
Utilities 10,519.92
Interest Expense 1,811.84
----------
Total Expense 523,826.48
----------
Net Ordinary Income 37,781.32
Other Income/Expense
Other Income
Other income 163.05
----------
Total Other Income 163.05
----------
Net Other Income 163.05
----------
Net Income 37,944.37
=========
Exhibit C
Financial Statements
Open-i Media
06/27/00 Profit and Loss
January through March 2000
Jan - Mar '00
-------------
Ordinary Income/Expense
Income
Development 397,954.72
Training 172,382.11
----------
Total Income 570,336.83
Cost of Goods Sold
CGS Development 44,166.31
CGS Training 81,671.25
----------
Total COGS 125,837.56
----------
Gross Profit 444,499.27
Expense
Miscellaneous 13,716.52
Advertising & Promotion 6,704.00
Open Interactive Leased Equip 75,000.00
Depreciation & Amortization Exp 3,130.64
Payroll Expenses 122,300.72
Professional Fees 25,106.75
Office Expense 4,902.16
Rent 26,426.55
Taxes 680.00
Telephone 3,137.50
Travel & Ent 1,399.81
Utilities 3,849.11
Interest Expense 1,610.66
----------
Total Expense 287,964.42
----------
Net Ordinary Income 156,534.85
Other Income/Expense
Other Income
Other Income 56.04
----------
Total Other Income 56.04
----------
Net Other Income 56.04
----------
Net income 156,590.89
==========
Exhibit D
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT made as of the 7th day of July, 2000, by and among Open-i
Media, Inc., a New York corporation (the "Company") and the parties set forth in
Schedule I attached hereto (the "Investors").
WHEREAS, the Investors have acquired shares of the Series A Preferred
Stock, par value $0.001 per share, of the Company pursuant to certain Stock
Purchase Agreements (the "Stock Purchase Agreements"); and
WHEREAS, on May 4, 2000, the Company and certain of its then shareholders
entered into a Registration Rights Agreement (the "Original Registration Rights
Agreement"); and
WHEREAS, the parties to the Original Registration Rights Agreement believe
that it is in the best interests of the Company and the parties thereto to amend
and restate the Original Registration Rights Agreement in its entirety as set
forth herein; and
WHEREAS, the Company desires to grant to the Investors registration rights
and certain other rights on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions. The following terms shall be used in this Agreement with
the following respective meanings:
"Affiliate" shall mean with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person; any general or limited partner, officer, director, or member
of such Person and any venture capital fund now or hereafter existing which is
controlled by or under common control with one or more general partners of such
Person.
"Board" shall mean the Board of Directors of the Company.
"Commission" means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, or any successor
Federal statute, and the rules and regulations of the Commission (or of any
other Federal agency then administering the Exchange Act) thereunder, all as the
same shall be in effect at the time.
"Holder" means any holder of Registrable Stock.
"Initial Public Offering" means the effective date for the Company's first
registration statement covering a public offering of securities of the Company
under the Securities Act.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any natural person, partnership, corporation or other legal
entity.
"Registrable Stock" means (a) the Common Stock and (b) any other shares of
Common Stock issued in respect of such shares by way of a stock dividend, or
stock split or in connection with a combination of shares, recapitalization,
merger or consolidation or reorganization; provided, however, that shares of
Common Stock shall only be treated as Registrable Stock if and so long as they
are not eligible for sale without restriction under Rule 144(k) under the
Securities Act or have not been (i) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or (ii)
sold in a transaction under Rule 144 of the Securities Act so that all transfer
restrictions and restrictive legends with respect to such Common Stock are
removed upon the consummation of such sale.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form X-0, Xxxx X-0, or successor
forms, or any registration statement covering only securities proposed to be
issued in exchange for securities or assets of another corporation or which is
not available for registering the shares of Registrable Stock for sale to the
public).
"Securities Act" means the Securities Act of 1933, or any successor
Federal statute, and the rules and regulations of the Commission (or of any
other Federal agency then administering the Securities Act) thereunder, all as
the same shall be in effect at the time.
"Stock" means and includes (a) the Company's common stock, $0.001 par
value per share, as authorized on the date of this Agreement, and (b) any other
securities into which or for which the securities described in (a) above may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
"Shareholders Agreement" means the Amended and Restated Shareholders
Agreement of even date between the Company, the Investors and certain other
parties, as amended or amended and restated and in effect from time to time.
2. Restrictive Legend. Each certificate representing Registrable Stock
shall, except as otherwise provided in this Section 2, be stamped or otherwise
imprinted with a legend substantially in the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE
LAWS OR IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AN EXEMPTION FROM
REGISTRATION IS AVAILABLE."
2
A certificate shall not bear such legend, or such legend shall be promptly
removed, if in the opinion of counsel satisfactory to the Company the securities
represented thereby may be publicly sold without registration under the
Securities Act and any applicable state securities laws or the Investor provides
the Company with a certificate that such Investor satisfies all the requirements
of Rule 144 (k).
Each certificate for Registrable Stock shall bear the legend set forth in
this Section 2, except that such certificate shall not bear such legend if (i)
such transfer is in accordance with the provisions of Rule 144 (or any other
rule permitting public sale without registration under the Securities Act) or
pursuant to an effective registration statement, or (ii) an opinion of counsel
satisfactory to the Company to the effect that any proposed transfer of
Registerable Stock may be effected without registration under the Securities Act
and any applicable state securities laws and that the transferee and any
subsequent transferee (other than an affiliate of the Company) would be entitled
to transfer such securities in a public sale without registration under the
Securities Act.
3. Registration Rights.
3.1 Incidental Registration. Each time the Company shall determine to file
a Registration Statement in connection with the proposed offer and sale for
money of any of its securities by it or any of its security holders, the Company
will give written notice thereof to the Investors. Upon the written request of
one or more Investors given within twenty (20) days after the giving of any such
notice by the Company, the Company will use its reasonable best efforts to cause
all such shares of Registrable Stock, the Holders of which have so requested
registration thereof, to be included in such Registration Statement, all to the
extent requisite to permit the sale or other disposition by the prospective
seller or sellers of the Registrable Stock to be so registered. If the
Registration Statement is to cover an underwritten distribution, the Company
shall use its reasonable best efforts to cause the Registrable Stock requested
for inclusion pursuant to this Section 3.1 to be included in the underwriting on
the same terms and conditions as the securities otherwise being sold through the
underwriters. If, in the good faith judgment of the managing underwriter of such
public offering, the inclusion of all of the Registrable Stock requested for
inclusion pursuant to this Section 3.1 would interfere with the successful
marketing of a smaller number of shares to be offered, then the number of shares
of Registrable Stock and other securities to be included in the offering (except
for shares to be issued by the Company in an offering initiated by the Company)
shall be reduced to the required level by reducing (down to zero in the
Company's Initial Public Offering, or to not less than thirty (30%) percent
thereafter, if so required) the participation of the Holders of Registrable
Stock in such offering (such reduction to be made to the amounts of shares
requested for inclusion in such offering by such Holders on a pro rata basis
among the Holders of Registrable Stock requesting such registration, based upon
the number of shares of Registrable Stock owned by such Holders).
Notwithstanding the foregoing provisions, the Company may, in its sole
discretion, terminate, delay, abandon or withdraw any Registration Statement
referred to in this Section 3.1 without thereby incurring any liability to the
Holders of Registrable Stock.
3
3.2 Requested Registration.
(a) At any time beginning six (6) months after an Initial Public
Offering, an Investor (the "Initiating Holder") may by notice in writing to the
Company (which notice shall specify the number of shares of Registrable Stock
proposed to be sold and the intended method of disposition thereof) request the
Company to register under the Securities Act all or any portion of shares of
Registrable Stock held by such Initiating Holder or Investors for sale in the
manner specified in such notice. Notwithstanding anything to the contrary
contained herein, the Company shall not be required to seek to cause a
Registration Statement to become effective pursuant to this Section 3.2: (A)
within a period of 90 days after the effective date of any Registration
Statement (other than a Registration Statement on Forms X-0, X-0 or any
successors thereto), provided that the Company shall use its reasonable best
efforts to cause a registration requested hereunder to be declared effective
promptly following such period if such request is made during such period; or
(B) if the Company shall furnish to the Holders a certificate signed by the
President of the Company stating that in the good faith judgment of the Board it
would be materially detrimental to the Company or its stockholders for a
Registration Statement to be filed at such time, or that it would require
disclosure of material non-public information relating to the Company which, in
the reasonable opinion of the Board, should not be disclosed, then the Company's
obligation to use all reasonable efforts to register, qualify or comply under
this Section 3.2 shall be deferred for a period not to exceed ninety (90) days
from the date of receipt of written request from such Holders; provided,
however, that the Company may not utilize this deferral right more than once in
any twelve-month period.
(b) Following receipt of any notice given under this Section 3 by
the Initiating Holders, the Company shall promptly notify in writing all
Investors that such registration is to be effected and, subject to the
provisions of the last sentence of Section 3.2(a), shall use its best reasonable
efforts to register under the Securities Act, for public sale in accordance with
the method of disposition specified in such notice from such requesting
Investors, the number of shares of Registrable Stock specified in such notice
(and in all notices received by the Company pursuant hereto). Investors, other
than the Initiating Holders, shall notify the Company of their desire to
participate in the Registration within twenty (20) days of the Company's notice
to them. The Company shall be obligated to register Registrable Stock pursuant
to Section 3.2(a) on two (2) occasions only, provided, however, that such
obligation shall be deemed satisfied only when a Registration Statement covering
all shares of Registrable Stock specified in notices received as aforesaid and
which have not been withdrawn by the Holder thereof, for sale in accordance with
the method of disposition specified by the Initiating Holders, shall have become
effective, except as set forth in the next sentence. A registration which does
not become effective after the Company has filed a Registration Statement with
respect thereto solely by reason of the refusal of the Initiating Holders to
proceed shall be deemed to have been effected by the Company at the request of
such Initiating Holders and the Company shall be deemed to have satisfied one of
its two obligations under this Section 3.2(a), unless the registration was
withdrawn at the request of the Holders of a majority of the Registrable Stock
to be sold in such offering upon learning of a material adverse change in the
condition, business or prospects of the Company (other than a change in market
demand for its securities or in the market price thereof) from that known to
such Holders at the time of their request (or of which the Company advised them
in writing
4
within 20 days thereafter) that makes the proposed offering unreasonable in the
good faith judgment of a majority in interest of such Holders.
(c) If the Registration Statement is to cover an underwritten
distribution and in the good faith judgment of the managing underwriter of such
public offering the inclusion of all of the Registrable Stock requested for
inclusion pursuant to this Section 3 would interfere with the successful
marketing of a smaller number of shares to be offered, then the number of shares
of Registrable Stock to be included in the Offering shall be reduced to the
required level with the participation in such offering to be reduced to the
required level, as follows, unless otherwise determined by a majority in
interest of the Holders: first, by reducing (down to zero, if necessary) on a
pro rata basis the participation of any Persons who are not Holders and second,
by reducing on a pro-rata basis the participation of other Holders requesting
such registration; such pro rata basis to be calculated based upon the number of
shares of Registrable Stock owned by any such Holders or on the number of shares
of Stock owned by such Persons, as the case may be. The Company shall be
entitled to include in any Registration Statement referred to in this Section
3.2(a), for sale in accordance with the method of disposition specified by the
Initiating Holders, (i) shares of Stock for the Company's own account and (ii)
securities to be sold by stockholders of the Company other than the holders of
Registrable Stock to the extent all Registrable Stock set forth in such notice
are covered by such registration, except as and to the extent that, in the
opinion of the managing underwriter, if any, such inclusion would adversely
affect the marketing of the Registrable Stock to be sold.
3.3 Registration Procedures. If and whenever the Company is required by
the provisions hereof to effect the registration of shares of Registrable Stock
under the Securities Act, the Company will, at its expense, as expeditiously as
practicable:
(a) In accordance with the Securities Act and the rules and
regulations of the Commission, prepare and file with the Commission a
Registration Statement with respect to the Registrable Stock and use its
reasonable best efforts to cause such Registration Statement to become and
remain effective until the Registrable Stock covered by such Registration
Statement has been sold, but for no longer than twelve (12) months subsequent to
the effective date of such registration, and prepare and file with the
Commission such amendments to such Registration Statement and supplements to the
prospectus contained therein as may be necessary to keep such Registration
Statement effective and such Registration Statement and prospectus accurate and
complete until the Registrable Stock covered by such Registration Statement has
been sold, but for no longer than twelve (12) months subsequent to the effective
date of such registration;
(b) If the offering is to be underwritten in whole or in part, enter
into a written underwriting agreement in form and substance reasonably
satisfactory to the managing underwriter, if any, of the public offering and the
Investors participating in such offering;
(c) Furnish to the participating Investors and to the underwriters
such number of copies of the Registration Statement, preliminary prospectus,
final prospectus and such other documents as such underwriters and participating
Investors may reasonably request in order to facilitate the public offering of
such securities;
5
(d) Use its reasonable best efforts to register or qualify the
Registrable Stock covered by such Registration Statement under such state
securities or blue sky laws of such jurisdictions (i) as shall be reasonably
appropriate for the distribution of the Registrable Stock covered by such
Registration Statement or (ii) as participating Investors and underwriters may
reasonably request within ten (10) days following the original filing of such
Registration Statement, except that the Company shall not for any purpose be
required to execute a general consent to service of process, to subject itself
to taxation, or to qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified;
(e) Notify the participating Investors in writing promptly after it
shall receive notice thereof, of the date and time when such Registration
Statement and each post-effective amendment thereto has become effective or a
supplement to any prospectus forming a part of such Registration Statement has
been filed;
(f) Notify the participating Investors promptly in writing of any
request by the Commission or any state securities commission or agency for the
amending or supplementing of such Registration Statement or prospectus or for
additional information;
(g) Prepare and file with the Commission, promptly upon the request
of the participating Investors, any amendments or supplements to such
Registration Statement or prospectus which, in the opinion of counsel
representing the Company in such Registration, is required under the Securities
Act or the rules and regulations thereunder in connection with the distribution
of the Registrable Stock by the participating Investors, but for no longer than
twelve (12) months subsequent to the effective date of such registration;
(h) Prepare and promptly file with the Commission, and promptly
notify the participating Investors of the filing of, such amendments or
supplements to such Registration Statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus relating
to such Registrable Stock is required to be delivered under the Securities Act,
any event has occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; the sellers of
Registrable Stock agree upon receipt of such notice forthwith to cease making
offers and sales of Registrable Stock pursuant to such registration statement or
deliveries of the prospectus contained therein for any purpose until the Company
has prepared and furnished such amendment or supplement to the prospectus as may
be necessary so that, as thereafter delivered to purchasers of such Registrable
Stock, such prospectus shall not include an untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing;
(i) In case the participating Investors or any underwriter is
required to deliver a prospectus at a time when the prospectus then in
circulation is not in compliance with the Securities Act or the rules and
regulations of the Commission, prepare promptly upon request such amendments or
supplements to such Registration Statement and such prospectus as may be
6
necessary in order for such prospectus to comply with the requirements of the
Securities Act and such rules and regulations;
(j) Advise the participating Investors, promptly after it shall
receive notice or obtain knowledge of the issuance of any stop order by the
Commission or any state securities commission or agency suspending the
effectiveness of such Registration Statement or the initiation or threatening of
any proceeding for that purpose and promptly use its reasonable best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such stop
order should be issued;
(k) At the request of the participating Investors (i) furnish to the
underwriters, if such registration includes an underwritten public offering, at
the closing provided for in the underwriting agreement, copies of any opinion,
dated such date, of the counsel representing the Company for the purposes of
such registration, addressed to the underwriters, if any, covering such matters
with respect to the registration statement, the prospectus and each amendment or
supplement thereto, proceedings under state and Federal securities laws, other
matters relating to the Company, the securities being registered and the offer
and sale of such securities as are customarily the subject of opinions of
issuer's counsel provided to underwriters in underwritten public offerings and
(ii) use its reasonable best efforts to furnish to the participating Investors
letters dated each such effective date and such closing date, from the
independent certified public accountants of the Company, addressed to the
underwriters, if any, and to the participating Investors, stating that they are
independent certified public accountants within the meaning of the Securities
Act and dealing with such matters as the underwriters may request, or, if the
offering is not underwritten, that in the opinion of such accountants the
financial statements and other financial data of the Company included in the
Registration Statement or the prospectus or any amendment or supplement thereto
comply in all material respects with the applicable accounting requirements of
the Securities Act, and additionally covering such other financial matters,
including information as to the period ending not more than five (5) business
days prior to the date of such letter with respect to the Registration Statement
and prospectus, as the participating Investors may reasonably request;
(l) Apply for listing and use its reasonable best efforts to list
the Registrable Stock being registered on any national securities exchange on
which a class of the Company's equity securities is listed or, if the Company
does not have a class of equity securities listed on a national securities
exchange, apply for qualification and use its reasonable best efforts to qualify
the Registrable Stock being registered for inclusion on the automated quotation
system of the National Association of Securities Dealers, Inc.;
(m) Furnish, at least five (5) business days before filing a
Registration Statement, a prospectus relating thereto or any amendments or
supplements relating to such a Registration Statement or prospectus, to counsel
for the participating Investors (the "Investors' Counsel"), copies of all such
documents proposed to be filed (it being understood that such five (5) business
day period need not apply to successive drafts of the same document proposed to
be filed so long as such successive drafts are supplied to such counsel in
advance of the proposed filing by a period of time that is customary and
reasonable under the circumstances); and
7
(n) Notify in writing the Investors' Counsel promptly (I) of the
receipt by the Company of any notification with respect to any comments by the
Commission with respect to such registration statement or prospectus or any
amendment or supplement thereto or any request by the Commission for the
amending or supplementing thereof or for additional information with respect
thereto, (ii) of the receipt by the Company of any notification with respect to
the issuance by the Commission of any stop order suspending the effectiveness of
such Registration Statement or prospectus or any amendment or supplement thereto
or the initiation or threatening of any proceeding for that purpose and (iii) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of the Registrable Stock for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purposes.
3.4 Expenses.
(a) With respect to each registration effected pursuant to this
Agreement, all fees, costs and expenses of and incidental to such registration
and the public offering in connection therewith shall be borne by the Company;
provided, however, (i) that the Investors and other holders of the Company's
stock participating in any such registration shall bear their pro rata share of
the underwriting discounts and selling commissions, and (ii) any such fee, cost
or expense which does not constitute a fee, cost or expense customary in such a
registration and which is attributable solely to one Investor or other holder of
the Company's stock participating in any such registration shall be borne by
that holder or Investor.
(b) The fees, costs and expenses of registration to be borne as
provided in paragraph (a) above, shall include, without limitation, all
registration, filing and NASD fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, fees and disbursements of counsel for
the underwriter or underwriters of such securities (if the Company and/or
selling security holders are otherwise required to bear such fees and
disbursements), all legal fees and disbursements and other expenses of complying
with state securities or blue sky laws of any jurisdictions in which the
securities to be offered are to be registered or qualified, and the premiums and
other costs of policies of insurance insuring the Company against liability
arising out of such public offering.
3.5 Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Investor whose
shares of Registrable Stock are included in a Registration Statement pursuant to
the provisions of this Agreement, from and against, and will reimburse each such
Investor with respect to, any and all claims, actions, demands, losses, damages,
liabilities, costs and expenses to which such Investor may become subject under
the Securities Act or otherwise, insofar as such claims, actions, demands,
losses, damages, liabilities, costs or expenses arise out of or are based upon
any untrue statement or allegedly untrue statement of any material fact
contained in such Registration Statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
arise out of any violation by the Company of any rule or regulation under the
Securities Act applicable to the Company and relating to action or inaction
required of the
8
Company in connection with such registration; provided, however, that the
Company will not be liable in any such case to the extent that any such claim,
action, demand, loss, damage, liability, cost or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in reliance upon and in conformity with information
furnished by or on behalf of any such Investor in writing specifically for use
in the preparation thereof.
(b) Each Holder of shares of Registrable Stock which are included in
a Registration Statement pursuant to the provisions of this Agreement will
severally, but not jointly, indemnify and hold harmless the Company, each of its
directors, officers, agents and employees, each person who controls the Company
within the meaning of the Securities Act, from and against, and will reimburse
such parties with respect to, any and all losses, damages, liabilities, costs or
expenses to which such parties may become subject under the Securities Act or
otherwise, to the extent that any such loss, damage, liability, cost or expense
arises out of or is based upon any untrue or alleged untrue statement of any
material fact contained therein or any amendment or supplement thereto, or
arises out of or is based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was so made in reliance upon and in conformity with written
information furnished by or on behalf of such Holder specifically for use in the
preparation thereof. Notwithstanding the foregoing, in no event shall any such
Investor be required to indemnify and hold harmless the Company, each of its
directors, officers, agents, employees, or each person who controls the Company
within the meaning of the Securities Act for any amount exceeding in the
aggregate the net proceeds received by such Investor from the sale of
Registrable Stock covered by the Registration Statement.
(c) Promptly after receipt by a party to be indemnified pursuant to
the provisions of paragraph (a) or (b) of this Section 3.5 (an "indemnified
party") of actual knowledge or notice of the commencement of any action
involving the subject matter of the foregoing indemnity provisions, such
indemnified party will, if a claim thereof is to be made against the
indemnifying party pursuant to the provisions of paragraph (a) or (b), notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 3.5 and shall
not relieve the indemnifying party from liability under this Section 3.5 unless
such indemnifying party is prejudiced by such omission. In case such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of such paragraph (a) and (b) for
any legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. Notwithstanding the foregoing, an indemnified party shall have
the right to retain its own counsel, with the reasonable fees and expenses to be
paid by the indemnifying party, if
9
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests, as reasonably determined by either party, between such indemnified
party and any other party represented by such counsel in such proceeding. No
indemnifying party shall be liable to an indemnified party for any settlement of
any action or claim without the consent of the indemnifying party; no
indemnifying party may unreasonably withhold its consent to any such settlement.
No indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
3.6 Reporting Requirements Under Securities Exchange Act of 1934. When it
is first legally required to do so, the Company shall register its Common Stock
under Section 12 of the Exchange Act and shall keep effective such registration
and shall timely file such information, documents and reports as the Commission
may require or prescribe under Section 13 of the Exchange Act. From and after
the effective date of the first Registration Statement filed by the Company, the
Company shall use its reasonable best efforts to (whether or not it shall then
be required to do so) timely file such information, documents and reports as the
Commission may require or prescribe under Section 13 or 15(d) (whichever is
applicable) of the Exchange Act. Immediately upon becoming subject to the
reporting requirements of either Section 13 or 15(d) of the Exchange Act, the
Company shall forthwith upon request furnish any Investor (i) a written
statement by the Company that it has complied with such reporting requirements,
(ii) a copy of the most recent annual or quarterly report of the Company, and
(iii) such other reports and documents filed by the Company with the Commission
as such Investor may reasonably request in availing itself of an exemption for
the sale of Registrable Stock without registration under the Securities Act. The
Company acknowledges and agrees that the purposes of the requirements contained
in this Section 3.6 are (a) to enable any such Investor to comply with the
current public information requirement contained in Paragraph (c) of Rule 144
under the Securities Act should such Investor ever wish to dispose of any of the
securities of the Company acquired by it without registration under the
Securities Act in reliance upon Rule 144 (or any other similar or successor
exemptive provision), and (b) to qualify the Company for the use of Registration
Statements on Form S-3. In addition, the Company shall take such other measures
and file such other information, documents and reports, as shall hereafter be
required by the Commission as a condition to the availability of Rule 144 under
the Securities Act (or any similar or successor exemptive provision hereafter in
effect) and the use of Form S-3. The Company also covenants to use its
reasonable best efforts, to the extent that it is reasonably within its power to
do so, to qualify for the use of Form S-3. From and after the effective date of
the first Registration Statement filed by the Company, the Company agrees to use
its reasonable best efforts to facilitate and expedite transfers of Registrable
Stock pursuant to Rule 144 under the Securities Act (or any similar or successor
exemptive provision hereafter in effect), which efforts shall include timely
notice to its transfer agent to expedite such transfers of Registrable Stock.
3.7 Stockholder Information. The Company may require each of the Investors
to furnish the Company in a timely manner such information with respect to such
Investor and the distribution of such Registrable Stock as the Company may from
time to time reasonably request in writing and as shall be required by law or by
the Commission in connection therewith.
10
3.8 Lock-Up Agreements.
(a) Restrictions on Public Sale by the Company. The Company agrees
not to effect any public sale or other distribution of its equity securities, or
any securities convertible into or exchangeable or exercisable for such equity
securities, during the period (not to exceed one hundred eighty (180) days) as
requested by the managing underwriter, following the effective date of the
Initial Public Offering, except in connection with any such offering and except
for equity securities issued pursuant to employee stock option or employee stock
purchase plans or in conjunction with any merger or consolidation with, or
acquisition of the stock or assets of, any other entity.
(b) Restrictions on Public Sale by the Investors. Each Investor
agrees that in conjunction with the Initial Public Offering it will not, to the
extent requested by the Company and the managing underwriter of such offering,
sell or otherwise dispose of any equity securities of the Company, including any
sale pursuant to Rule 144, during a period specified by the Company and such
underwriter (not to exceed one hundred eighty (180) days after the effective
date of the Initial Public Offering), provided that all other shareholders of
the Company are subject to similar restrictions except (i) in conjunction with
such offering or (ii) to any Affiliates of such Holder who agree to be bound by
the restrictions on dispositions set forth herein; and provided that each
officer and director of the Company shall enter into similar agreements.
(c) In the event any of the Registrable Stock of an Investor is
included in an Initial Public Offering, the Company shall cause the Registration
Statement covering such stock to remain effective until such stock has been
sold, but for no longer than fifteen (15) months subsequent to the effective
date of such registration.
4. Miscellaneous.
4.1 Notices. Any notice required or permitted to be given hereunder shall
be in writing and shall be deemed to be properly given when sent by registered
or certified mail, return receipt requested, by Federal Express, DHL or other
guaranteed overnight delivery service or by facsimile transmission, addressed as
follows:
If to the Company: Open-i Media, Inc.
00 Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier: (000) 000-0000
If to any Investor: To the address of such Investor set forth on
Schedule I hereto
and as to any of the foregoing, to such other address as any such party may give
the others notice of pursuant to this Section, provided that a change of address
shall only be effective upon receipt.
11
All notices, requests, consents and other communications hereunder shall be
deemed to have been received (i) if by hand, at the time of delivery thereof to
the receiving party at the address of such party set forth above or as so
designated, (ii) if made by telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
or certified mail, on the fifth business day following the day such mailing is
made.
4.2 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the substantive laws of the State of New York (without regard
to conflict of laws provisions).
4.3 Waivers: Amendments. No waiver of any right hereunder by any party
shall operate as a waiver of any other right, or of the same right with respect
to any subsequent occasion for its exercise, or of any right to damages. No
waiver by any party of any breach of this Agreement shall be held to constitute
a waiver of any other breach or a continuation of the same breach. All remedies
provided by this Agreement are in addition to all other remedies provided by
law. This Agreement may not be amended except by a writing executed by the
Company and the Investors.
4.4 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the respective legal representatives, successors and
permitted assigns of the parties hereto; provided, however, that any sale of
shares of Stock are subject to the terms and conditions of the Shareholders
Agreement.
4.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.6 Headings. Headings in this Agreement are included for reference only
and shall have no effect upon the construction or interpretation of any part of
this Agreement.
4.7 Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
4.8 Entire Agreement. This Agreement represents the entire understanding
of the parties regarding the subject matter hereof and supersedes any and all
other oral or written agreements among them, which are hereby rendered null and
void, including without limitation, the Original Registration Rights Agreement.
4.9 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if each of the parties had signed the same
document. All counterparts shall be construed together and shall constitute one
and the same instrument.
12
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by a duly authorized officer, and each Investors has duly executed this
Agreement (or has caused it to be executed by a duly authorized officer,
partner, trustee or agent, as the case may be), as of the date first above
recited.
COMPANY:
OPEN-I MEDIA, INC.
By:_________________________________
Xxxxx Xxxxx, President
INVESTORS:
BD HOTELS LLC
By:_________________________________
Xxxxxxx Born, Member
SIGA TECHNOLOGIES, INC.
By:_________________________________
13
Schedule I
INVESTORS
Investor Name Investor Address
------------- ----------------
BD Hotels LLC, 00 Xxxx 00xx Xxxxxx
a New York LLC Xxx Xxxx, XX 00000
SIGA Technologies, Inc., 000 Xxxxxxxxx Xxx.
a Delaware corporation Xxx Xxxx, XX 00000
Exhibit E
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this "Agreement") made as of the 7th
day of July, 2000 by and among Open-i Media, Inc., a New York corporation, with
its principal place of business at 00 Xxxxxxxx Xxxxxx, Xxx Xxxx, XX (the
"Company") and the persons listed on Schedule A attached hereto, as such
Schedule A may be amended or supplemented from time to time (the
"Shareholders").
W I T N E S S E T H:
WHEREAS, the Shareholders are the record owners of all of the shares
of the capital stock of the Company; and
WHEREAS, on May 4, 2000, the Company and all of its then
shareholders entered into a Shareholders Agreement (the "Original Shareholders
Agreement"); and
WHEREAS, the parties believe that it is in the best interests of the
Company and the Shareholders to amend and restate the Original Shareholders
Agreement in its entirety as set forth herein.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants herein contained, and other good and valuable consideration, it is
hereby agreed as follows:
1. DEFINITIONS. For the purposes of this Agreement the following terms
shall have the meanings set forth in this Article 1:
1.1 "Lock Up Period" shall have the meaning set forth in
10.6(c).
1.2 "Permitted Transferee" and "Permitted Transferees" shall
have the meaning set forth in Section 4.4(d).
1.3 "Remaining Shareholders" shall mean those Shareholders
other than the Selling Shareholders.
1.4 "Selling Shareholder" shall mean the Shareholder or the
legal representatives of the estate of a deceased Shareholder, as the case may
be, and such Shareholder's Permitted Transferees, if any, transferring Shares
pursuant to any provision of this Agreement.
1.5 "Shares" shall mean all shares of the capital stock of the
Company now or hereafter owned by the Shareholders and their Permitted
Transferees regardless of when or how acquired.
1.6 "Transfer" shall mean any disposition (including, without
limitation, gifts, sales, assignments, pledges, encumbrances, bequests, and all
other intervivos or testamentary dispositions) whether voluntary or involuntary,
or pursuant to court order or by operation of law.
2. ENTIRE AGREEMENT. This Agreement represents the entire
understanding of the parties regarding the disposition of the Shares, now or
hereafter owned by them, during the Shareholders' lives or upon their deaths,
and supersedes any and all other oral or written agreements among them, which
are hereby rendered null and void, including without limitation, the Original
Shareholders Agreement.
3. LIMITATION ON TRANSFERS OF SHARES.
3.1 Limitation. No Shareholder may Transfer all or any of such
Shareholder's Shares except as provided in this Agreement, including the
provisions of Article 4.
3.2 Reasonableness of Restraints. The Shareholders recognize
and acknowledge that the restraints imposed in this Agreement on the disposition
of their Shares are fair and reasonable in consideration of their absolute
necessity for the proper conduct of the business of the Company, and in
consideration of the provisions of this Agreement providing a market for their
Shares, at a fair price, upon their death.
4. PERMITTED TRANSFERS OF SHARES.
4.1 Transfers with Prior Consent of all other Shareholders.
Except as otherwise provided in Section 4.2 or 4.4, a Shareholder may only
Transfer the Shares owned by such Shareholder if such Shareholder has obtained
the prior written consent of all of the other Shareholders of the Company. Any
Shares so Transferred pursuant to this Section 4.1 shall continue to be subject
to and shall be transferable only in accordance with the terms of this Agreement
and the transferee of such Shares must agree in writing to be bound by the terms
and conditions of this Agreement prior to such Transfer being effective.
4.2 Lifetime Transfers Subject to Right of First Refusal.
(a) Except as otherwise provided in Section 4.1 or 4.4
hereof; no Shareholder shall Transfer any of the Shares owned by such
Shareholder unless the Selling Shareholder shall have first made the offer to
sell set forth in Section 4.2(b) (the "Offer Notice") and such offer shall not
have been accepted; and the Shares shall be transferable only in compliance with
the terms hereof. Any attempted Transfer of Shares in violation of this
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Agreement shall be deemed an irrevocable offer by such Shareholder to sell such
Shares to the Company pursuant to Section 4.2 hereof.
(b) The Offer Notice shall be given in writing to the
Company and the Remaining Shareholders concurrently and shall state that the
Selling Shareholder offers to sell those Shares of the Selling Shareholder which
the Selling Shareholder proposes to Transfer in a bona fide transaction to the
Company or the Remaining Shareholders at the price and on the terms therein set
forth, and to such Offer Notice shall be attached a statement of intention to
Transfer such Shares, in a bona fide transaction, which shall set forth the name
and address of the prospective purchaser, transferee, lienor, or recipient of
any other disposition, the number of Shares involved in the proposed Transfer
and the terms of such proposed Transfer.
(c) Within fifteen (15) days after the receipt of such
Offer Notice, the Company may, by written notice to the Selling Shareholder,
elect to purchase all, but not less than all, of the Shares owned by such
Shareholder so offered at the price and on the terms set forth in the Offer
Notice. If the Offer Notice is not accepted by the Company, the Remaining
Shareholders may, by written notice to the Selling Shareholder given within
thirty (30) days after the receipt of the Offer Notice (the "Expiration Date"),
elect to purchase all, but not less than all, of the offered Shares at the price
and on the terms set forth in the Offer Notice in such proportions as may be
mutually agreed among the Remaining Shareholders or, in the absence of such
agreement, pro rata based on the percentage that each Remaining Shareholder's
Shares constitute of the total outstanding Shares of all shareholders who
exercise the right. A Remaining Shareholder may, if it so elects, purchase
additional portions of the offered Shares if any other Remaining Shareholder
does not exercise its right to purchase up to the full amount of its pro rata
amount of the offered Shares. Such additional portions of the offered Shares, if
any, shall be allocated to such Remaining Shareholders pro rata if more than one
Remaining Shareholder so elects, or less than pro rata with respect to any such
Remaining Shareholder requesting a lower amount of the additional portion of the
offered Shares. The notice of acceptance of the Offer Notice shall specify a
date for the closing of the purchase, which date shall be not more than thirty
(30) days after the date of the giving of such notice by the Company or the
Remaining Shareholders. The closing shall take place at the principal business
office of the Company.
(d) If the Offer Notice is not accepted by the Company
or the Remaining Shareholders for one hundred percent (100%) of the offered
Shares, the Selling Shareholder may make a bona fide Transfer to the prospective
purchaser, transferee, lienor, or recipient of any other disposition named in
the statement of intention attached to the Offer Notice, but only in strict
accordance with the terms therein stated; provided, however, that such
purchaser, transferee, lienor or recipient must agree in writing to be bound by
the terms of this Agreement prior to such Transfer becoming effective; and
provided further that each Shareholder shall have the right to join in such sale
set forth in Section 4.2(e) below. If the Selling Shareholder shall fail to make
such Transfer within thirty (30) days following the expiration of the time
provided in Section 4.2(c) for the election by the Potential Participants to
join in such sale as
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set forth in Section 4.2(e) below, such Shareholder's Shares shall again become
subject to all the restrictions of this Agreement.
(e) In the event the right of first refusal of the
Company set forth in this Section 4.2 is not exercised by the Company or the
Remaining Shareholders, and such Shareholder is Xxxxx Xxxxx or his Permitted
Transferees ("Chong"), Chong shall not sell any of his Shares unless he has
first given each of the other Shareholders (the "Potential Participants") the
opportunity to join in such sale on a pro-rata basis on the same terms as Chong.
Each Potential Participant shall have the right to sell a number of Shares owned
by him equal to the product of (i) the total number of Shares proposed to be
sold to the purchaser and (ii) a fraction, the numerator of which shall be the
number of Shares owned by such Potential Participant and the denominator of
which shall the number of Shares owned by all Shareholders who have elected to
participate in such sale (including Chong). The right specified in this Section
4.2 may be exercised by a Potential Participant by delivery, not later than 10
days after the Expiration Date, of a written notice stating the number of Shares
that such Potential Participant wishes to include in such sale. Chong, together
with any electing Potential Participants, shall have the right for 90 days after
the date of the Sale Notice to sell or otherwise transfer Shares held by them to
the purchaser specified in the Offer Notice on the terms set forth therein. The
provisions of this Section 4.2 shall apply anew to any proposed sale after such
90 day period, or to any modification to the type or amount of consideration to
be paid or received in connection with such sale. The provisions of this Section
4.2 shall not apply to any Transfers otherwise permitted under the other
subsections of Section 4.
(f) If Chong or his Permitted Transferees give the
Shareholders notice that they desire to sell the Company (whether by merger,
consolidation, sale of all or substantially all of its assets, sale of all of
the outstanding common stock of the Company, share exchange or otherwise), all
Shareholders will consent to and raise no objections against such sale, and if
such sale is structured as a sale of stock, all Shareholders agree to sell all
of their Shares and rights to acquire Shares (if any) on the terms and
conditions approved by the Company's Board of Directors or the holders of a
majority of the common stock of the Company then outstanding. The Shareholders
will take all necessary and desirable actions reasonably requested by the
Company in connection with the consummation of such sale, at the sole cost of
the Company. The obligations of the Shareholders to participate in such sale are
subject to the satisfaction of the conditions that ( i) all Shareholders will
have the right to participate in such sale, (ii) the Shareholders will each
receive the same value of consideration per share, and (iii) the value of the
consideration per share in such sale will be not less than the following for the
year in which the sale for such closing takes place: $1.56 prior to or on June
30, 2001; $1.87 after June 30, 2001 but prior to or on June 30, 2002; $2.25
after June 30, 2002 but prior to or on June 30, 2003; $2.70 after June 30, 2003
but prior to or on June 30, 2004; and $3.24 thereafter.
-4-
4.3 Sale Associated with Legal Proceedings Against any
Individual Shareholder.
(a) In the event that (i) voluntary proceedings by, or
involuntary proceedings against, an individual Shareholder are commenced under
any provision of any federal or state act relating to bankruptcy or insolvency,
or (ii) the Shares of an individual Shareholder are attached or garnished, or
(iii) any judgment is obtained in any legal or equitable proceeding against an
individual Shareholder and the sale of such Shareholder's Shares is contemplated
or threatened under legal process as a result of such judgment, or (iv) an
execution process is issued against an individual Shareholder or against such
Shareholder's Shares or (v) any other form of legal proceeding or process is
threatened or commenced, by which the Shares of an individual Shareholder may be
sold either voluntarily or involuntarily, then the Company shall have the option
to purchase from such Shareholder and such Shareholder's Permitted Transferees,
if any, all, but not less than all, of the Shares owned by such Shareholder
prior to such event. Such option to purchase shall be exercised by the Company
in writing within a period of forty-five (45) days from the date on which it
receives actual notice of the event which gives rise to such option.
(b) The purchase price for each Share purchased pursuant
to this Section 4.3 shall be determined as provided in Article 5 of this
Agreement, and such purchase shall be effected in the manner and upon the terms
and conditions set forth in Article 6 of this Agreement.
(c) The closing of any transaction of purchase and sale,
pursuant to this Section 4.3, shall take place at 10:00 AM. at the Company's
principal business office sixty (60) days after the exercise of the option
pursuant to paragraph (a) of this Section 4.3 (or if such date shall be a
Saturday, Sunday or legal holiday, then on the first business day immediately
succeeding such date).
4.4 Permitted Transfers to Family Members: Shareholders.
(a) Each Shareholder shall have and at all times retain
the right to Transfer all or any portion of such Shareholder's Shares to any one
or more of the following persons or entities, as the case may be:
(i) Xxxxxxx Born or Xxx Xxxxxxx (the "BD
Affiliates")
(ii) a spouse of an individual Shareholder or of
a BD Affiliate;
(iii) any adult issue of an individual
Shareholder or of a BD Affiliate;
-5-
(iv) custodians or guardians for the minor issue
of an individual Shareholder or a BD Affiliate, provided that each such guardian
or custodian shall be an individual who is either the Shareholder or a BD
Affiliate, or the spouse or any of adult issue of such Shareholder or BD
Affiliate;
(v) trusts of which each and all of the income
beneficiaries and the remaindermen shall be members of the group composed of the
Shareholder or a BD Affiliate, or the spouse or any of adult issue of such
Shareholder or BD Affiliate; and
(vi) any entity which is wholly owned by any of
the individuals or entities listed in section 4.4(a)(i) through (a)(v) above,
and remains so wholly owned during the period in which such Shares are held by
such entity.
(b) Shares held by any custodian or guardian of a minor
issue, or held by a trustee or trustees, may be Transferred to such issue upon
the attainment of majority (or at such later date as is provided by the terms of
the trust); or may be Transferred to a successor custodian, guardian or trustee,
provided that each such successor custodian, guardian or trustee is an
individual entitled to serve as aforesaid.
(c) SIGA Technologies, Inc. ("SIGA") may distribute all,
but not less than all, of its Shares (the "SIGA Shares") to its stockholders if
SIGA shall have obtained the prior written consent of the Board of Directors of
the Company to such distribution.
(d) The person, persons, or entities receiving shares
from a Shareholder pursuant to the terms of this Section 4.4 shall be referred
to hereinafter individually as such Shareholder's "Permitted Transferee" and
collectively as such Shareholder's "Permitted Transferees."
(e) In the event of a Transfer of any Shareholder's
Shares pursuant to the provisions of this Section 4.4, such Shareholder shall
notify the Company in writing as to the identity and relationship of any of the
Permitted Transferees (and the terms of any trust pertaining to any such
Transfer), and the number of Shares so Transferred. Any such Permitted
Transferee, including, without limitation, any issue who receives Shares
formerly held for such Permitted Transferee's benefit by a custodian, guardian,
trustee or trustees, shall receive and hold the Shares so Transferred subject to
the terms and conditions of this Agreement, and shall be bound by the
obligations under this Agreement of the Shareholder from whom such Permitted
Transferee received the Shares, as though a party hereto. No Transfer of Shares
shall be made by a Shareholder to a Permitted Transferee until the Permitted
Transferee acknowledges the foregoing obligations in writing. Thereafter, all
further Transfers of such Shares shall be made only in accordance with the
provisions of this Agreement restricting Transfers.
-6-
(f) A Permitted Transferee shall not Transfer all or any
portion of such Permitted Transferee's Shares unless such Transfer is to the
Shareholder from whom such Shares evolved or another Permitted Transferee of
such Shareholder, and unless all of the requirements regarding a Transfer by a
Shareholder set forth in this Section 4.4 have been satisfied. Any Transfer or
attempted Transfer by a Permitted Transferee which is not in accordance with the
terms of this Section 4.4 shall be deemed an attempted Transfer in violation of
this Agreement.
5. PURCHASE PRICE.
5.1 Valuation Date. The phrase "Valuation Date" as used in
this Article 5 shall mean the last day of the month preceding the date the
applicable event referred to in Section 4.4(a) occurs.
5.2 Valuation.
(a) The purchase price of each Share which is purchased
pursuant to Section 4.2 of this Agreement shall be the per Share price of the
proposed Transfer.
(b) The purchase price of each Share which is purchased
pursuant to Section 4.3 of this Agreement shall be the fair market value per
Share as of the Valuation Date set forth in Section 5.1. The fair market value
of each Share shall be determined in good faith, as of the applicable Valuation
Date, by the Board of Directors of the Company. The determination of fair market
value shall be conclusive and binding on the Company and the Shareholders and
their Permitted Transferees, if any, and their respective successors, assigns,
heirs and legal representatives.
6. CLOSING AND PAYMENT OF PURCHASE PRICE.
6.1 Documents. At the closing, the Selling Shareholder shall
deliver:
(a) Certificates representing the Shares which are being
Transferred pursuant to this Agreement; and
(b) All documents which counsel for the Company shall
reasonably deem necessary or advisable in order to accomplish a complete
conveyance of the Shares to the Company.
6.2 Payment. Payment of the total purchase price due the
Selling Shareholder shall be made as follows:
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(a) If the sale is pursuant to Section 4.2 of this
Agreement, there shall be paid at closing to the Selling Shareholder the total
purchase price to be paid for the Shares, pursuant to the terms in the Offer
Notice.
(b) If the sale is pursuant to Section 4.3 of this
Agreement, the Company shall pay at the closing to the Selling Shareholder by
certified or bank check, an amount equal to twenty percent (20%) of the total
purchase price payable by the Company.
(c) The balance of the total purchase price, if any,
where the sale is pursuant to Section 4.3 of this Agreement, shall be paid
pursuant to one or more non-negotiable promissory notes of the Company, to be
executed and delivered at the closing. At the closing, the Company shall execute
and deliver to the Selling Shareholder a non-negotiable promissory note which
provides (i) for not less than twelve (12) but no more than fifteen (15) (as
determined by the Company, in its sole discretion) equal principal installments,
with the first installment being payable three (3) months after the closing, and
the remaining installments payable quarterly thereafter; (ii) for interest on
the unpaid balance of the note accruing at the minimum rate necessary under the
Code, to avoid the imputation of interest; and (iii) that the Company may prepay
all or any part thereof at any time with interest to the date of prepayment, but
any partial prepayment shall be applied against the unpaid principal balance
then outstanding in the inverse order of maturity.
6.3 Offset. The Company shall have the right to offset against
the payment or payments of the purchase price due from it to the Selling
Shareholder, the amount of all sums due from the Selling Shareholder to the
Company, and to the extent so credited against the purchase price, such loan or
other indebtedness shall be deemed to be and shall be cancelled and discharged.
Such credit against the purchase price shall be made regardless of the due date
of any such loan or other indebtedness.
7. NOTICE. Whenever under the provisions of this Agreement notice is
required to be given, it shall be in writing and shall be deemed given when
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to the Shareholders at their addresses as set forth on
Schedule A attached hereto, or to such other address as may appear on the record
books of the Company, and addressed to the Company at its principal business
office.
8. RESTRICTIVE LEGEND. All certificates representing Shares now or
hereafter issued shall be endorsed as follows:
The shares represented by this certificate are subject to and are
transferable only in compliance with an Agreement dated as of the
7th day of July, 2000 made among the Company and the shareholders
named therein.
-8-
9. SPECIFIC PERFORMANCE. Inasmuch as the Shares of the Company are
closely held and the market therefor is limited, irreparable damage would result
if this Agreement is not specifically enforced. Therefore, the rights and
obligations of the parties under this Agreement, including without limitation
their respective rights and obligations to offer for sale and to purchase the
Shares as herein provided, shall be enforceable in a court of equity by a decree
of specific performance, and appropriate injunctive relief may be applied for
and granted in connection therewith. Such remedies, however, shall be cumulative
and not exclusive and shall be in addition to any other remedies which any party
or the Company may have under this Agreement or otherwise.
10. MISCELLANEOUS.
10.1 Amendments. This Agreement may not be amended or
supplemented at any time unless by a writing executed by the parties hereto, and
all such amendments and supplements shall, except as otherwise provided
hereinafter, be binding upon all other persons interested herein.
Notwithstanding the foregoing, the President of the Company shall be permitted
to amend or supplement Schedule A to this Agreement from time to time to reflect
additions and deletions to the Shareholders who are parties hereto.
10.2 Impairment Of Rights. No amendment, supplement or
termination of this Agreement (including a termination of this Agreement
pursuant to Sections 10.6(a) or 10.6(b) of this Agreement) shall affect or
impair any rights or obligations which have theretofore matured hereunder.
10.3 Further Assurances. All parties will take such further
action and execute such other documents as are reasonably necessary to
effectuate the purposes, terms and conditions of this Agreement.
10.4 Partial Invalidity. The invalidity of any portion of this
Agreement shall not affect the validity of the remainder of this Agreement.
10.5 Binding On Successors. This Agreement shall be binding
upon and shall inure to the benefit of all of the parties hereto, and to their
respective heirs, executors, administrators, successors and assigns, transferees
and Permitted Transferees and shall be binding upon any person to whom any
Shares are transferred in violation of the provisions of this Agreement (whether
voluntarily, pursuant to court order, by operation of law or otherwise), and the
heirs, executors, administrators, successors or assigns of such person.
10.6 Termination. This Agreement shall terminate upon the
written consent of the parties or upon the occurrence of any of the following
events:
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(a) The adjudication of the Company as bankrupt, or the
execution by the Company of an assignment for the benefit of creditors.
(b) The voluntary or involuntary complete liquidation or
dissolution of the Company.
(c) The registration by the Company of any shares of its
common stock or securities convertible into or exchangeable or exercisable for
shares of its common stock under the Securities Act of 1933, as amended, in
connection with a public offering of securities by the Company; provided,
however, each Shareholder agrees that, in connection with an underwritten public
offering of the Company's securities, such Shareholder will not sell, make short
sale of, loan, grant any options for the purchase of, or otherwise dispose of
all or any portion of such Shareholder's Shares (other than those Shares
included in the registration) without the prior written consent of the
underwriters managing such underwritten public offering of the Company's
securities for a period of one hundred eighty (180) days from the effective date
of such registration (the "Lock Up Period"), provided that all of the other
Shareholders of the Company are subject to similar restrictions, and further
agrees to execute any agreement reflecting such Shareholder's agreement to abide
by the such obligation, or extending the Lock Up Period, as may be requested by
the underwriters at the time of the public offering. Each Shareholder's
obligations and the restrictions on permitted activities during any Lock Up
Period under this Section 10.6(c) shall survive the termination of this
Agreement.
(d) The distribution by SIGA of all of the SIGA Shares
owned by SIGA to its stockholders in accordance with Section 4.4(c) hereof
pursuant to which the Company will become subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended.
10.7 Governing Law. This Agreement shall be governed by the
law of the State of New York without regard to conflicts of law provisions.
10.8 Captions. Any Article or Section title or caption
contained in this Agreement is for convenience only, and shall not in any way be
construed to define, describe or limit the terms hereof
10.9 Stock Purchase Agreements. This Agreement is subject to
the terms and conditions of a Stock Purchase Agreement between the Company and
BD Hotels LLC (the "BD Hotels Stock Purchase Agreement") and a Stock Purchase
Agreement between the Company and SIGA (the "SIGA Stock Purchase Agreement", and
together with the BD Hotels Stock Purchase Agreement the "Stock Purchase
Agreements"). In the event of any conflict of the provisions of one of the Stock
Purchase Agreements and this Agreement, the provisions of the relevant Stock
Purchase Agreement shall control. In addition, the parties hereto agree that BD
Hotels LLC shall be entitled to the special shareholder rights granted to SIGA
pursuant to Section 8 of the SIGA Stock Purchase Agreement.
-10-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
Open-i Media, Inc.
By:____________________________________________
Xxxxx Xxxxx, President
SHAREHOLDERS:
_______________________________________________
Xxxxx Xxxxx
BD Hotels LLC, a New York LLC
_______________________________________________
Xxxxxxx Born, Member
SIGA Technologies, Inc., a Delaware corporation
By:____________________________________________
Name:
Title:
-11-
Schedule A
SHAREHOLDERS
Shareholder Name Shareholder Address
---------------- -------------------
Xxxxx Xxxxx 0000 Xxxx. Xxxx
Xxxxxxxxx X-0
Xxxx XX, XX 00000
BD Hotels LLC, 00 Xxxx 00xx Xxxxxx
x Xxx Xxxx LLC Xxx Xxxx, XX 00000
SIGA Technologies, Inc., 000 Xxxxxxxxx Xxx.
a Delaware corporation Xxx Xxxx, XX 00000
Exhibit F
July 7, 2000
SIGA Technologies, Inc.
000 Xxxxxxxxx Xxx.
Xxx Xxxx, XX 00000
Gentlemen:
We have acted as counsel to Open-i Media, Inc., a New York corporation
(the "Company"), in connection with the issuance and sale by the Company to you,
as Purchaser, of 1,143,000, shares of its Series A Preferred Stock, $0.001 par
value per share ("Series A Preferred Stock") pursuant to the Stock Purchase
Agreement of even date herewith by and between the Company and you (the "Stock
Purchase Agreement").
In so acting, we have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Stock Purchase Agreement, the
Shareholders Agreement of even date herewith among the Company, you and the
other parties thereto (the "Shareholders Agreement") and the Registration Rights
Agreement of even date herewith among the Company, you and the other parties
thereto (the "Registration Rights Agreement" and, together with the Stock
Purchase Agreement and the Shareholders Agreement, the "Transaction Documents"),
and we have examined originals or copies, certified or otherwise identified to
our satisfaction, of such corporate records and other documents and instruments
of the Company and certificates or comparable documents of public officials and
of officers and representatives of the Company and have made such inquiries of
such officers and representatives, and considered such questions of law, as we
have deemed relevant and necessary as the basis for the opinions hereinafter set
forth. Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Stock Purchase Agreement.
In such examinations, we have assumed the genuineness of all signatures
(except the signatures of the officers of the Company on the Transaction
Documents) and the authenticity of all documents submitted to us as originals
and the conformity to authentic original documents of documents submitted to us
as certified, photostatic or telecopied copies. As to all questions of fact
material to this opinion that have not been independently established, we have
relied upon representations made to us by officers or representatives of the
Company, either orally or in certificates or other comparable documents, and
have relied upon the relevant facts stated therein. For purposes of this
opinion, the phrase "to our knowledge" or
July 7, 2000
Page 2
with respect to matters "known to us" or "to our knowledge" is based on our
review of the stock records and minute books of the Company, and is based solely
on information actually known to those attorneys currently practicing with this
firm and engaged in the representation of the Company in connection with the
transactions contemplated by the Stock Purchase Agreement.
This opinion is based exclusively upon and is limited to the laws of the
State of New York and the federal law of the United States. Statements in this
opinion as to the legality, validity, binding effect and enforceability of any
of the Transaction Documents and any other agreements referred to herein and
therein are limited by and subject to equitable principles and to applicable
bankruptcy, reorganization, insolvency, moratorium and other similar laws
affecting the enforceability of creditors' rights generally and to applicable
restrictions on the enforceability of indemnification and contribution; and are
further limited as we express no opinion as to the validity or enforceability of
the indemnification and contribution provisions of the Registration Rights
Agreement.
Based upon the foregoing, and subject to the qualifications stated herein,
we are of the opinion that:
1. The Company is a corporation validly existing and in good standing
under the laws of the State of New York. The Company has the corporate power and
authority to own and hold its properties and to carry on its business in all
material respects as, to our knowledge, it is currently conducted. The Company
has the corporate power to (a) execute, deliver and perform each of the
Transaction Documents, (b) issue, sell and deliver the Purchased Shares and (c)
issue and deliver the shares of common stock ("Common Stock") into which the
Purchased Shares are convertible upon conversion of the Purchased Shares (the
"Conversion Shares").
2. Each of the Transaction Documents has been duly authorized, executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
3. The execution and delivery by the Company of each of the Transaction
Documents, the performance by the Company of its obligations thereunder, the
issuance, sale and delivery of the Purchased Shares and the issuance and
delivery of the Conversion Shares upon conversion of the Purchased Shares will
not violate any provision of law, the Restated Certificate of Incorporation, as
amended, or By-laws, as amended, of the Company, in each case as in effect on
the date hereof, any order known to us of any court or other agency of
government or any indenture, agreement or other instrument known to us to which
the Company is bound, or conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under any such indenture,
agreement or other instrument, except for such violations as would not have a
Material Adverse Effect on the Condition of the
July 7, 2000
Page 3
Company, or, except as provided in the Stock Purchase Agreement, result in the
creation or imposition of any lien, charge, restriction, claim or encumbrance of
any nature whatsoever upon any of the properties or assets of the Company. In
rendering the opinion expressed in this paragraph, we have assumed full
disclosure to you of all material facts concerning the Company, its operations,
its financial condition and, with respect to performance by the Company of its
obligations under the Registration Rights Agreement, we have assumed compliance
by the Company at such time with the Securities Act of 1933, as amended (the
"Securities Act"), and the applicable rules and regulations thereunder and with
applicable state securities laws and the applicable regulations thereunder.
4. The authorized capital stock of the Company consists of 40,000,000
shares of common stock and 10,000,000 shares of preferred stock, $0.001 par
value per share. The Company shall have outstanding immediately after the
Closing 6,000,000 shares of Common Stock and 3,143,000 shares of Series A
Preferred Stock, all of which have been validly issued and are fully paid and
nonassessable by the Company. The designations, powers, preferences, rights,
limitations and restrictions in respect of each class or series of authorized
capital stock of the Company are as set forth in its Restated Certificate of
Incorporation, and all such designations, powers, preferences, rights,
qualifications, limitations and restrictions are valid, binding and enforceable
and in accordance with all applicable laws.
5. The Purchased Shares and the Conversion Shares have been duly
authorized. The issuance, sale and delivery of the Purchased Shares and the
issuance and delivery of the Conversion Shares upon conversion of the Purchased
Shares have been duly authorized by all required corporate action; the Purchased
Shares, when issued and paid for in accordance with the terms of the Stock
Purchase Agreement, will be validly issued, fully paid and non-assessable by the
Company. The Conversion Shares issuable upon conversion of the Purchased Shares
have been reserved for issuance by the Company and when issued upon conversion
of the Purchased Shares, the Conversion Shares will be validly issued, fully
paid and non-assessable by the Company.
6. No registration or filing with, and no consent or approval of; or other
action by, any Federal, state or other governmental agency or instrumentality is
or will be necessary for the valid execution, delivery and performance by the
Company of the Transaction Documents, the issuance, sale and delivery of the
Purchased Shares, or the issuance and delivery of the Conversion Shares upon
conversion of the Purchased Shares, other than (i) the filing of the Restated
Certificate with the Department of State of the State of New York, and (ii) a
filing with the United States Securities and Exchange Commission of a Notice of
Sale of Securities on Form D, which the Company has represented to us that it
will file in a timely fashion. In rendering the opinion expressed in this
paragraph, we have assumed the accuracy of the representations and warranties of
the Purchasers set forth in Article 4 of the Stock Purchase Agreement. In
rendering the opinion expressed in this paragraph with respect to the
performance by the Company of its obligations under the Registration Rights
Agreement, we
July 7, 2000
Page 4
have also assumed compliance by the Company at such time with the Securities Act
and the applicable rules and regulations thereunder and with applicable state
securities laws and the applicable regulations thereunder.
We advise you that Xxxxxxx X. Xxxxxx, Esq., a partner of our firm, is the
Assistant Secretary of the Company.
This letter is furnished by us, as counsel to the Company, in connection
with the consummation of the transactions contemplated by the Stock Purchase
Agreement and is solely for your benefit. This opinion may not be relied upon by
you for any other purposes, or relied upon by any other person, firm,
corporation or other entity for any purpose, without our prior written consent.
Very truly yours,
DRINKER XXXXXX & XXXXXXX LLP
Exhibit G
Accredited Investor Representation
The undersigned represents that the undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended (the "Act"), because the undersigned is (please check the
appropriate box):
|_| A natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his purchase
exceeds $1,000,000;
|_| A natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of
those years and has a reasonable expectation of reaching the
same income level in the current year;
|_| A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities
subscribed for, whose purchase is directed by a sophisticated
person as described in Rule 506(b)(ii) promulgated under the
Act;
|_| A corporation, business trust or partnership, not formed
for the specific purpose of acquiring the securities
subscribed for, with total assets in excess of $5,000,000;
|_| Any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of ERISA, which is
either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by
persons that are accredited investors; or
|_| An entity in which all of the equity owners are accredited
investors.
IN WITNESS WHEREOF, the undersigned has executed this Accredited
Investor Representation on and as of the 7th day of July, 2000.
SIGA TECHNOLOGIES, INC.
By:_________________________________
Name:
Title:
