EXHIBIT 1(c)
E-42
ESCROW AGREEMENT BY AND AMONG THE COMPANY, SUNRISE SECURITIES CORP.
AND UNITED STATES TRUST COMPANY OF NEW YORK, DATED AS OF _____________, 1997
SIGA PHARMACEUTICALS, INC.
SUNRISE SECURITIES CORP.
ESCROW AGREEMENT
With
UNITED STATES TRUST COMPANY OF NEW YORK
ESCROW AGREEMENT, dated as of ____________, 1997 by and among SIGA
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), SUNRISE
SECURITIES CORP., a Delaware corporation (the "Underwriter"), and UNITED STATES
TRUST COMPANY OF NEW YORK, a national banking institution incorporated under the
laws of the United States of America (the "Escrow Agent").
WHEREAS, the Company proposes to sell 3,250,000 shares of its common stock
(the "Shares"), without par value of the Company (the "Common Stock"), in an
offering (the "Offering") registered pursuant to a Registration Statement (as
amended, the "Registration Statement") filed by the Company with the Securities
and Exchange Commission, with the offering price per share of Common Stock
assumed to be $5.00 per share;
WHEREAS, the Underwriter has agreed to offer the Shares as the agent of the
Company on a "best efforts, all or none" basis;
WHEREAS, the Company needs to provide for the safekeeping and investment of
the proceeds of the sale of the Shares until such time as the Company accepts
subscriptions for 3,100,000 Shares and the proceeds of the sale of such Shares
are deposited with the Escrow Agent or until such time as the Offering
terminates and the Escrow Agent is required to return such proceeds to the
subscribers as provided for herein; and
WHEREAS, with respect to all subscription payments received by subscribers,
the Company proposes to establish an escrow account with the Escrow Agent at the
office of its Escrow Administration, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
NOW, THEREFORE, it is agreed as follows:
1. Establishment of Escrow. The Escrow Agent hereby agrees to receive and
------------------------
disburse the proceeds from the Offering and any interest earned thereon in
accordance herewith. Proceeds from the Offering shall be invested in accordance
with Rule 15c2-4 of the Rules and Regulations under the Securities Exchange Act
of 1934.
2. Deposit of Escrowed Property. The Underwriter, on behalf of the
-----------------------------
subscribers of Shares, and/or such subscribers shall from time to time cause to
be wired to or deposited with the Escrow Agent funds or checks of the
subscribers delivered in payment for Shares (the "Escrowed Property"). Any
checks delivered
E-43
to the Escrow Agent pursuant to the terms hereof shall be made payable to or
endorsed to the order of "U.S. Trust Company of New York as escrow agent for
SIGA Pharmaceuticals, Inc." The Escrow Agent upon receipt of such checks shall
present such checks for payment to the drawee-bank under such checks. Any
checks not honored by the drawee-bank thereunder after the first presentment for
payment shall be returned to the Company in the same manner as notices are
delivered pursuant to Section 4. Upon receipt of such funds or checks, the
Escrow Agent shall credit such funds and the amount of such checks to an
interest-bearing account (the "Escrow Account") held by the Escrow Agent. If,
following the credit of the amount of any check to the Escrow Account, such
check is dishonored, the Escrow Agent shall debit the Escrow Account for the
amount of such dishonored check.
3. List of Subscribers. The Underwriter shall furnish or cause to be
--------------------
furnished to the Escrow Agent, at the time of each deposit by it of funds or
checks pursuant to Section 2, a list, substantially in the form of Exhibit A
hereto, containing the name of, the address of, number of Shares subscribed for
by, the subscription amount delivered to the Escrow Agent on behalf of, and the
social security number, if applicable, of, each subscriber whose funds are being
deposited, for each listed subscriber. The Escrow Agent shall notify the
Underwriter and the Company of any discrepancy between the subscription amounts
set forth on any list delivered pursuant to this Section 3 and the subscription
amounts received by the Escrow Agent and shall notify the Underwriter upon its
receipt of funds or checks directly from any subscriber. The Escrow Agent is
authorized to revise such list to reflect the actual subscription amounts
received and the release of any subscription amounts pursuant to Section 2.
4. Disbursement of Funds. (a) If the Escrow Agent shall receive a notice,
----------------------
substantially in the form of Exhibit B hereto (an "Offering Termination
Notice"), from the Company and the Underwriter, the Escrow Agent shall, promptly
after receipt of such Offering Termination Notice and the clearance of all
checks received by the Escrow Agent as Escrowed Property, (i) send to each
subscriber listed on the list held by the Escrow Agent pursuant to Section 3
whose total subscription amount shall not have been released pursuant to
paragraph (b) or (c) of this Section 4, in the manner set forth in paragraph (d)
of this Section 4, a check to the order of such subscriber in the amount of the
remaining subscription amount held by the Escrow Agent as set forth on such list
held by the Escrow Agent, and (ii) pay to the Company the amount of any interest
earned on the Escrowed Property.
(b) In the event that (i) 3,250,000 Shares have been subscribed for and funds
in respect thereof shall have been deposited with the Escrow Agent on or before
the Termination Date and (ii) no Offering Termination Notice shall have been
delivered to the Escrow Agent, the Company and the Underwriter from time to time
may deliver to the Escrow Agent a joint notice, substantially in the form of
Exhibit C hereto (a "Closing Notice"), designating the date on which Shares are
to be sold and delivered to the subscribers thereof (a "Closing Date"), which
date shall not be earlier than the clearance of any checks received by the
Escrow Agent as Escrowed Property, the proceeds of which are to be distributed
on such Closing Date, and identifying the subscribers and the number of the
Shares to be sold to each thereof on such Closing Date, not less than two (2)
nor more than seven (7) business days prior to such Closing Date. The Escrow
Agent, after receipt of such Closing Notice and the clearance of such checks
shall, pay to the Company or its designees on such Closing Date, in federal or
other immediately
E-44
available funds, in the manner specified by the Company and the Underwriter in
such Closing Notice, an amount equal to the aggregate of the subscription
amounts paid by the subscribers identified in such Closing Notice for the Shares
to be sold on such Closing Date as set forth on the list held by the Escrow
Agent pursuant to Section 3, together with any and all interest on the Escrowed
Property.
(c) If at any time and from time to time prior to the release of any
subscriber's total subscription amount pursuant to paragraph (a) or (b) of this
Section 4 from escrow, the Company or the Underwriter shall deliver to the
Escrow Agent a notice, substantially in the form of Exhibit D hereto (a
"Subscription Termination Notice"), to the effect that any or all of the
subscriptions of such subscriber have been rejected by the Company (a "Rejected
Subscription"), the Escrow Agent shall, promptly after receipt of such
Subscription Termination Notice and, if such subscriber delivered a check in
payment of its Rejected Subscription, after the clearance of such check, send to
such subscriber, in the manner set forth in paragraph (d) of this Section 4, a
check to the order of such subscriber in the amount of such Rejected
Subscription amount. Any and all interest on the amount of any Rejected
Subscription shall be disbursed as provided in Section 3(b) or (c) above with
respect to interest on the Escrowed Property.
(d) For the purposes of this Section 4, any check that the Escrow Agent shall
be required to send to any subscriber shall be sent to such subscriber by first
class mail, postage prepaid, at such subscriber's address furnished to the
Escrow Agent pursuant to Section 3.
5. Notices. Any notice or other communication required or permitted to be
--------
given hereunder shall be in writing and shall be (a) delivered by hand or (b)
sent by mail, registered or certified, with proper postage prepaid, and
addressed as follows:
If to the Company, to:
SIGA Pharmaceuticals, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xx Xxxxx
President and Chief Executive Officer
Phone: 000-000-0000
Fax: 000-000-0000
If to the Underwriter, to:
Sunrise Securities Corp.
000 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Xxxx
Phone: 000-000-0000
Fax: 000-000-0000
If to the Escrow Agent, to:
X-00
Xxxxxx Xxxxxx Trust Company of New York
Corporate Trust
Escrow Administration
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Phone: 000-000-0000
Fax: 000-000-0000
or to such other address as the person to whom notice is to be given may have
previously furnished to the others in the above-referenced manner. All such
notices and communications, if mailed, shall be effective when deposited in the
mails, except that notices and communications to the Escrow Agent and notices of
changes of address shall not be effective until received.
6. Concerning the Escrow Agent. To induce the Escrow Agent to act hereunder,
----------------------------
it is further agreed by the Company and Underwriter that:
(a) The Escrow Agent shall not be under any duty to give the Escrowed Property
held by it hereunder any greater degree of care than it gives its own similar
property and shall not be required to invest any funds held hereunder except as
directed in this Escrow Agreement. Uninvested funds held hereunder shall not
earn or accrue interest.
(b) This Escrow Agreement expressly sets forth all the duties of the Escrow
Agent with respect to any and all matters pertinent hereto. No implied duties
or obligations shall be read into this Escrow Agreement against the Escrow
Agent. The Escrow Agent shall not be bound by the provisions of any agreement
among the other parties hereto except this Escrow Agreement.
(c) The Escrow Agent shall not be liable, except for its own gross
negligence or willful misconduct, and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully asserted
against the Escrow Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless the Escrow Agent (and any successor Escrow Agent)
from and against any and all losses, liabilities, claims, actions, damages and
expenses, including reasonable attorneys' fees and disbursements, arising out of
and in connection with this Escrow Agreement. Without limiting the foregoing,
the Escrow Agent shall in no event be liable in connection with its investment
or reinvestment of any cash held by it hereunder in good faith, in accordance
with the terms hereof, including without limitation any liability for any delays
(not resulting from gross negligence or willful misconduct) in the investment or
reinvestment of the Escrowed Property, or any loss of interest incident to any
such delays.
(d) The Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. The Escrow Agent may act in reliance upon any instrument or
signature believed by it in good faith to be genuine and may assume, if in good
faith, that any person purporting to give notice or receipt or advice or make
any statement or execute any document in connection with the provisions hereof
has been duly authorized to do so.
E-46
(e) The Escrow Agent may act pursuant to the advice of counsel with respect
to any matter relating to this Escrow Agreement and shall not be liable for any
action taken or omitted in good faith and in accordance with such advice.
(f) The Escrow Agent does not have any interest in the Escrowed Property
deposited hereunder but is serving as escrow holder only. Any payments of
income from the Escrow Account shall be subject to withholding regulations then
in force with respect to United States taxes. The Company will provide the
Escrow Agent with appropriate forms for tax I.D., number certification, or non-
resident alien certifications.
This paragraph (f) and paragraph (c) of this Section 6 shall survive
notwithstanding any termination of this Escrow Agreement or the resignation of
the Escrow Agent.
(g) The Escrow Agent makes no representation as to the validity, value,
genuineness or the collectibility of any security or other documents or
instrument held by or delivered to it.
(h) The Escrow Agent shall not be called upon to advise any party as to the
wisdom in selling or retaining or taking or refraining from any action with
respect to any securities or other property deposited hereunder.
(i) The Escrow Agent (and any successor escrow agent) at any time may be
discharged from its duties and obligations hereunder by the delivery to it of
notice of termination signed by both the Company and the Underwriter or at any
time may resign by giving written notice to such effect to the Company and the
Underwriter. Upon any such termination or resignation, the Escrow Agent shall
deliver the Escrowed Property to any successor escrow agent jointly designated
by the other parties hereto in writing, or to any court of competent
jurisdiction if no such successor escrow agent is agreed upon, whereupon the
Escrow Agent shall be discharged of and from any and all further obligations
arising in connection with this Escrow Agreement. The termination or
resignation of the Escrow Agent shall take effect on the earlier of (i) the
appointment of a successor (including a court of competent jurisdiction) or (ii)
the day that is 30 days after the date of delivery: (A) to the Escrow Agent of
the other parties' notice of termination or (B) to the other parties hereto of
the Escrow Agent's written notice of resignation. If at that time the Escrow
Agent has not received a designation of a successor escrow agent, the Escrow
Agent's sole responsibility after that time shall be to keep the Escrowed
Property safe until receipt of a designation of successor escrow agent or a
joint written disposition instruction by the other parties hereto or an
enforceable order of a court of competent jurisdiction.
(j) The Escrow Agent shall have no responsibility for the contents of any
writing of any third party contemplated herein as a means to resolve disputes
and may rely without any liability upon the contents thereof.
(k) In the event of any disagreement among or between the other parties hereto
and/or the subscribers of the Shares resulting in adverse claims or demands
being made in connection with the Escrowed Property, or in the event that the
Escrow Agent in good faith is in doubt as to what action it should take
hereunder, the Escrow Agent shall be entitled to retain the Escrowed Property
until the Escrow Agent shall have received (i) a final and non-appealable order
E-47
of a court of competent jurisdiction directing delivery of the Escrowed Property
or (ii) a written agreement executed by the other parties hereto and consented
to by the subscribers directing delivery of the Escrowed Property, in which
event the Escrow Agent shall disburse the Escrowed Property in accordance with
such order or agreement. Any court order referred to in (i) above shall be
accompanied by a legal opinion by counsel for the presenting party satisfactory
to the Escrow Agent to the effect that said court order is final and non-
appealable. The Escrow Agent shall act on such court order and legal opinions
without further question.
(l) As consideration for its agreement to act as Escrow Agent as herein
described, the Company, agrees to pay the Escrow Agent fees determined in
accordance with the terms set forth on Exhibit E hereto (and made a part of this
Escrow Agreement as if herein set forth). In addition, the Company agrees to
reimburse the Escrow Agent for all reasonable expenses, disbursements and
advances incurred or made by the Escrow Agent in performance of its duties
hereunder (including reasonable fees, expenses and disbursements of its
counsel).
(m) The other parties hereto irrevocably (i) submit to the jurisdiction of any
New York State or federal court sitting in New York City in any action or
proceeding arising out of or relating to this Escrow Agreement, (ii) agree that
all claims with respect to such action or proceeding shall be heard and
determined in such New York State or federal court and (iii) waive, to the
fullest extent possible, the defense of an inconvenient forum. The other
parties hereby consent to and grant any such court jurisdiction over the persons
of such parties and over the subject matter of any such dispute and agree that
delivery or mailing of process or other papers in connection with any such
action or proceeding in the manner provided hereinabove, or in such other manner
as may be permitted by law, shall be valid and sufficient service thereof.
(n) No printed or other matter in any language (including, without limitation,
the Registration Statement, notices, reports and promotional material) which
mentions the Escrow Agent's name or the rights, powers, or duties of the Escrow
Agent shall be issued by the other parties hereto or on such parties' behalf
unless the Escrow Agent shall first have given its specific written consent
thereto. The Escrow Agent hereby consents to the use of its name and the
reference to the escrow arrangement in the Registration Statement and to the
filing of this Agreement and the subscription agreements with respect to the
Shares as exhibits to the Registration Statement.
8. Miscellaneous. (a) This Escrow Agreement shall be binding upon and inure
--------------
solely to the benefit of the parties hereto and their respective successors and
assigns, heirs, administrators and representatives, and the subscribers of the
Shares and shall not be enforceable by or inure to the benefit of any other
third party except as provided in paragraph (i) of Section 6 with respect to the
termination of, or resignation by, the Escrow Agent. No party may assign any of
its rights or obligations under this Escrow Agreement without the written
consent of the other parties.
(b) This Escrow Agreement shall be construed in accordance with and governed
by the internal law of the State of New York (without reference to its rules as
to conflicts of law).
E-48
(c) This Escrow Agreement may only be modified by a writing signed by all of
the parties hereto and consented to by the subscribers of the Shares adversely
affected by such modifications. No waiver hereunder shall be effective unless
in a writing signed by the party to be charged.
(d) This Escrow Agreement shall terminate upon the payment pursuant to Section
4 of all amounts held in the Escrow Account.
(e) The section headings herein are for convenience only and shall not affect
the construction thereof. Unless otherwise indicated, references to Sections
are to Sections contained herein.
(f) This Escrow Agreement may be executed in one or more counterparts but all
such separate counterparts shall constitute but one and the same instrument;
provided that, although executed in counterparts, the executed signature pages
of each such counterpart may be affixed to a single copy of this Agreement which
shall constitute an original.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
executed as of the day and year first above written.
SIGA PHARMACEUTICALS, INC.
By: _______________________
Name:
Title:
SUNRISE SECURITIES CORP.
By: _______________________
Name:
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK
By: ________________________
Name:
Title:
E-49
EXHIBIT A
SUMMARY OF CASH RECEIVED
NEW PARTICIPANT DEPOSIT
Date_________________ ______
Deposit Date: List Number_____ ______
Investment Date: Page____ of ______ _____
Batch Number: Approved By_____ ______
For Bank use only JOB#:___________________ TITLE:_____________________________________
NAME DEPOSIT SHARES ADDRESS TAX ID NUMBER
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
|...........................................................................................
| Broker Misc. I Misc. II Misc. III
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
|...........................................................................................
| Broker Misc. I Misc. II Misc. III
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
|...........................................................................................
| Broker Misc. I Misc. II Misc. III
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
E-50
|...........................................................................................
| Broker Misc. I Misc. II Misc. III
EXHIBIT B
[Form of Offering Termination Notice]
United States Trust Company of New York
Corporate Trust
Escrow Administration
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Dear :
Pursuant to Section 4(a) of the Escrow Agreement dated as of ________ __,
1997 (the "Escrow Agreement") among SIGA Pharmaceuticals, Inc. (the "Company"),
Sunrise Securities Corp. and you, the Company and the Underwriter hereby notify
you of the termination of the offering of the Shares (as that term is defined in
the Escrow Agreement) and direct you to make payments to the subscribers and the
Company provided for in Section 4(a) of the Escrow Agreement.
Very truly yours,
SIGA PHARMACEUTICALS, INC.
By:_________________________
Name:
Title:
SUNRISE SECURITIES CORP.
E-51
By:_________________________
Name:
Title:
X-00
XXXXXXX X
[Xxxx xx Xxxxxxx Xxxxxx]
Xxxxxx Xxxxxx Trust Company of New York
Corporate Trust
Escrow Administration
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Dear :
Pursuant to Section 4(b) of the Escrow Agreement dated as of _______ __,
1997 (the "Escrow Agreement") among SIGA Pharmaceuticals, Inc. (the "Company"),
Sunrise Securities Corp. and you, the Company hereby certifies that
subscriptions for 3,250,000 Shares (as that term is defined in the Escrow
Agreement) have been received and the Company will sell and deliver [__________]
Shares to the subscribers thereof at a closing to be held on [____________,
1997] (the "Closing Date"). The names of the subscribers concerned, the number
of Shares subscribed for by each of such subscribers and the related
subscription amounts are set forth on the schedule annexed hereto.
We hereby request that the aggregate subscription amount be paid to us as
follows:
[To be inserted].
Very truly yours,
SIGA PHARMACEUTICALS, INC.
By:_________________________
Name:
Title:
SUNRISE SECURITIES CORP.
By:_________________________
Name
Title:
E-53
EXHIBIT D
[Form of Subscription Termination Notice]
United States Trust Company of New York
Corporate Trust
Escrow Administration
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Dear :
Pursuant to Section 4(c) of the Escrow Agreement dated as of _______ __,
1997 (the "Escrow Agreement") among SIGA Pharmaceuticals, Inc. (the "Company"),
Sunrise Securities Corp. (the "Underwriter") and you, the undersigned hereby
notifies you that the following subscription(s) have been rejected:
Number of Subscribed Amount of
Name of Subscriber(s) Shares Rejected Rejected Subscription
$
Very truly yours,
E-54
EXHIBIT E
A. [INTENTIONALLY OMITTED]
B. A fee equal to:
10 Basis Points on the First $5,000,000 or any part thereof,
6 Basis Points on the next $5,000,000,
3 Basis Points on the next $90,000,000,
1 1/2 Basis Points on amounts over $100,000,000 of Escrow Property
received by the Escrow Agent prior to the Closing Date pursuant to the terms of
the offering; provided that the aggregate amount of fees pursuant to this Item B
of Exhibit E shall not, in any event, exceed $7,500. Fees will be calculated on
the aggregate amount of Escrow Property received by the Escrow Agent pursuant to
the Escrow Agreement to which this Exhibit is attached and Escrow Agreement I.
C. A fee for recordkeeping equal to the following:
(1) $ 4.00 for each check issued by the Escrow Agent
(2) $ 9.00 for each participant (hard copy input of subscriber
information) and
(3) $ 2.00 for each 1099 form issued
(4) $ 5.00 for each interest calculation
(5) $ 20.00 for each cancellation, correction or withdrawal of
Escrowed Property made by the Escrow Agent pursuant to
Section 5(d) of the Escrow Agreement to which this Exhibit
is attached shall be paid when billed by the Escrow Agent.
Capitalized terms not otherwise defined shall have the meanings
ascribed thereto in the Escrow Agreement to which this Exhibit is
attached.
E-55
