Exhibit 10.2
EXCLUSIVE FINDER'S AGREEMENT
This Finder's Agreement (this "Agreement") is made as of November 1, 2005,
between SIGA Technologies, Inc., a Delaware corporation (the "Company"), and The
Shemano Group, Inc., a California corporation (the "Finder"). The Finder and the
Company agree:
1. Engagement of Finder: The Company hereby engages the Finder, and the
Finder hereby accepts such engagement, to act as the Company's
exclusive finder with respect to sales by the Company in a private
placement transaction (the "Offering") of up to $3 million aggregate
principal amount of Equity, Equity-Related or Debt Securities (the
"Securities") of the Company to the investors during the term of
this Agreement as set forth in Section 6.
2. Offering Procedures: The Finder will introduce the Company to
investors who the Finder reasonably believes to be "accredited
investors," as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the "1933
Act"), with whom the Finder has a pre-existing substantive
relationship (the "Offerees").
3. Finder's Compensation: In consideration for the services rendered by
the Finder hereunder, the Company shall pay to the Finder, or cause
the Finder to be paid, compensation as provided in this section
within 3 days of the Company's receipt of funds from the Offerees.
(a) Cash Compensation: The Company shall pay to the Finder cash
compensation equal to seven percent (7%) of the gross Offering
funds received in the Offering. For purposes of clarity the
parties understand and agree such cash compensation is only
related to funds received at the initial investment and upon
exercise of the additional investment right and not on the
exercise of any warrant of other option.
(b) Warrants: The Finder shall receive three percent (3%) warrant
compensation on the initial investment and not on any shares
issued in connection with the additional investment right or
any other similar optional additional investment right. The
warrant calculation translates to 30,000 warrants per $1
million raised. The warrant's strike shall equal the strike,
expiration and registration rights of any warrants sold to
Offerees in the Offering, and if the Offering does not provide
for the issuance of warrants, then the warrants issued to the
Finder shall have a strike price equal to the Offering price
of any Equity or Equity-Related Securities sold, have a
five-year term and cashless exercise after one year if the
underlying shares are not then registered. The warrant shares
shall be subject to equitable adjustment for stock splits,
stock dividends and similar events. The warrant shares shall
have "piggyback" registration rights.
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For purposes of determining the Finder's compensation under
this Section 3, the gross offering funds received in the
Offering(s) shall include any amounts paid to the Company by
investors in respect to an exercise or conversion of any of
the Securities or Warrants, including the value allocated to
any securities not issued pursuant to a "cashless exercise" or
similar provision, whenever actually received by the Company
or (y) subject to 3(a) above amounts paid pursuant to any
additional investment right or other similar optional
investment right .
4. Certain Matters Relating to Finder's Duties:
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(a) The Finder's responsibilities shall be limited to introducing
potential investors to the Company, and the Finder shall not
have authority to offer or sell the Securities to any
potential investor. Finder shall not use any general
solicitation or general advertising within the meaning of the
applicable securities laws in connection with any offering.
The Finder shall have no responsibility to participate or
assist in any negotiations between any potential investor and
the Company. The Finder will have no responsibility to act,
and the parties contemplate that the Finder will not act, as a
broker or dealer with respect to the offer or sale of the
Securities. Further, the finder shall have no responsibility
for fulfilling any SEC reporting or filing requirements as
relates to the Company provided however, Finder agrees to
provide Company with reasonable assistance related to any
registration, qualification or other requirements of
applicable securities laws and other regulatory matters, upon
request of the Company.
(b) The Finder agrees to introduce the Company to Offerees only in
states in which the Finder has been advised by the Company
that offers and sales of Securities can be legally made by the
Company.
(c) The Finder shall perform its duties under this Agreement in a
manner consistent with the instructions of the Company. Such
performance may include, but not be limited to, the delivery
to each Offeree a current copy of the Private Placement
Memorandum, Subscription Agreement and any Offering
Questionnaire and/or similar documents provided to the Finder
by the Company, as such documents may be amended from time to
time by the Company and delivered to the Finder. If
applicable, the Finder shall consecutively number each copy of
the Private Placement Memorandum (which will include the first
letter of the Finder's name or other identifying xxxx
sufficient to designate an Offeree introduced by the Finder);
keep a log of when and to whom each copy of the Private
Placement Memorandum is given, with the Private Placement
Memorandum numbers; maintain a copy of any written information
the Finder obtains regarding the suitability of each Offeree;
and only use the Private Placement Memorandum in introducing
Offerees to the Company. The Finder shall provide this log and
all such written information to the Company at any time and
promptly upon request of
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the Company at the termination of this Agreement. The Company
shall, promptly following execution of this Agreement, provide
the Finder with a written list of prospective Offerees which
the Company does not want the Finder to contact. The Finder
agrees to not contact the persons on such list, and the Finder
shall not be entitled to the compensation set forth in Section
3 with respect to any investment made by such person in the
Company's Securities.
(d) The Finder is and will hereafter act as an independent
contractor and not as an employee of the Company and nothing
in this Agreement shall be interpreted or construed to create
any employment, partnership, joint venture, or other
relationship between the Finder and the Company. The Finder
will not hold itself out as having, and will not state to any
person that the Finder has, any relationship with the Company
other than as an independent contractor. The Finder shall have
no right or power to find or create any liability or
obligation for or in the name of the Company or to sign any
documents on behalf of the Company.
5. Right of First Refusal. In consideration for the Finder acting as
the finder in connection with the proposed offering, the Company
hereby grants the Finder a right of first refusal to serve as the
Company's exclusive financial advisor and investment banker in
connection with any financial transaction for a period of 1 year
from the closing of the transaction. In the event the company
advises the Finder that it desires to effect any financial
transaction, the Company and the Finder will negotiate in good faith
the terms of the Finder's engagement in a separate agreement which
would set forth, among other matters, compensation for the Finder
based upon customary fees for the services provided.
6. Termination of Agreement. Either party may terminate this Agreement
by notifying the other party in writing upon a material breach by
that other party, unless such breach is curable and is in fact cured
within 15 days after such notice. This Agreement will otherwise
terminate upon completion or termination of the Offering. The
Company may terminate this Agreement following ninety (90) days
after the date hereof upon written notice. Notwithstanding the
foregoing, all provisions of this Agreement other than section 1, 2,
4, 7, 11, 15, 18 and 23 shall survive the termination of this
Agreement with respect to Offerees who the Finder introduces to the
Company prior to any termination with respect to the Offering. The
Finder shall be entitled to compensation under section 3 based on
investments made by such Offerees prior to the termination of this
Agreement or at any time within one year thereafter.
7. Indemnification. The Company and the Finder each shall indemnify and
defend the other and the other's affiliates, directors, officers,
employees, agents, consultants, attorneys, accountants and other
representatives (each an "Indemnified Person") and shall hold each
Indemnified Person harmless, to the fullest extent permitted by law,
from and against any and all claims, liabilities, losses, damages
and expenses
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(including reasonable attorney's fees and costs), as they are
incurred, in connection with the Offering, resulting from the
indemnifying party's negligence, bad faith or willful misconduct in
connection with the Offering, any violation by the indemnifying
party (not caused by an Indemnified Person) of Federal or state
securities laws in connection with the Offering, or any breach by
the indemnifying party of this Agreement. In case any litigation or
proceeding shall be brought against any Indemnified Person under
this section, the indemnifying party shall be entitled to assume the
defense of such litigation or proceeding with counsel of the
indemnifying party's choice at its expense (in which case the
indemnifying party shall not be responsible for the fees and
expenses of any separate counsel retained by such Indemnified
Person, except in the limited circumstances described below in this
section); provided, however, that such counsel shall be reasonably
satisfactory to the Indemnified Person. Notwithstanding the
indemnifying party's election to assume the defense of such
litigation or proceeding (a) such Indemnified Person shall have the
right to employ separate counsel and to participate in the defense
of such litigation or proceeding, and (b) the indemnifying party
shall bear the reasonable fees, costs and expenses of separate
counsel if (but only if) the use of counsel selected by the
indemnifying party to represent such Indemnified Person would
present such counsel with a conflict of interest under applicable
laws or rules of professional conduct.
8. Confidentiality of Offeree Information. The Company acknowledges
that the identity of the Offerees, and all confidential information
about Offerees received by the Company from an Offeree or the
Finder, is confidential information of the Finder and may not be
shared with any other person without the consent of the Finder.
9. Notices. Any notice, consent, authorization or other communication
to be given hereunder shall be in writing and shall be deemed duly
given and received when delivered personally, when transmitted by
fax, three days after being mailed by first class mail, or one day
after being sent by a nationally recognized overnight delivery
service, charges and postage prepaid, properly addressed to the
party to receive such notice, at the following address or fax number
for such party (or at such other address or fax number as shall
hereafter be specified by such party by like notice):
(a) If to the Company, to:
-------
Xxxxxx X. Xxxxxxxx
Chief Financial Officer
000 Xxxxxxxxx Xxx.
Xxxxx 000
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) If to the Finder, to:
------
Xxxx Xxxxxxx
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Chief Executive Officer
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
10. Company to Control Transactions. The prices, terms and conditions
under which the Company shall offer or sell any Securities shall be
determined by the Company in its sole discretion. The Company shall
have the authority to control all discussions and negotiations
regarding any proposed or actual offering or sale of Securities.
Nothing in this Agreement shall obligate the Company to actually
offer or sell any Securities or consummate any transaction. The
Company may terminate any negotiations or discussions at any time
and reserves the right not to proceed with any offering or sale of
Securities. Compensation pursuant to this Agreement shall only be
paid to the Finder in the event of an actual Closing of the Offering
to an Offeree introduced by Finder.
11. Confidentiality of Company Information. The Finder, and its
officers, directors, employees and agents shall maintain in strict
confidence and not copy, disclose or transfer to any other party (1)
all confidential business and financial information regarding the
Company and its affiliates, including without limitation,
projections, business plans, marketing plans, product development
plans, pricing, costs, customer, vendor and supplier lists and
identification, channels of distribution, and terms of
identification of proposed or actual contracts and (2) all
confidential technology of the Company. In furtherance of the
foregoing, the Finder agrees that it shall not transfer, transmit,
distribute, download or communicate, in any electronic, digitized or
other form or media, any of the confidential technology of the
Company. The foregoing is not intended to preclude the Finder from
utilizing, subject to the terms and conditions of this Agreement,
any Private Placement Memorandum and/or other documents prepared or
approved by the Company for use in the Offering.
All communications regarding any possible transactions, requests for
due diligence or other information, requests for facility tours,
product demonstrations or management meetings, will be submitted or
directed to the Company, and the Finder shall not contact any
employees, customers, suppliers or contractors of the Company or its
affiliates without express permission. Nothing in this Agreement
shall constitute a grant of authority to the Finder or any
representatives thereof to remove, examine or copy any particular
document or types of information regarding the Company, and the
Company shall retain control over the particular documents or items
to be provided, examined or copied. If the Offering is not
consummated, or if at any time the Company so requests, the Finder
and its representatives will return to the Company all copies of
information regarding the Company in their possession.
The provisions of this Section shall survive any termination of this
Agreement.
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12. Press Releases, Etc. The Company shall control all press releases or
announcements to the public, the media or the industry regarding any
offering, placement, transaction or business relationship involving
the Company or its affiliates. Except for communication to Offerees
in furtherance of this Agreement and the provision of any Private
Placement Memorandum, the Finder will not disclose the fact that
discussions or negotiations are taking place concerning a possible
transaction involving the Company, or the status or terms and
conditions thereof. Notwithstanding the foregoing, the Company
agrees to issue a press release prior to the opening of the market
on the business day following the Company's receipt of executed
agreements binding Offerees to purchase Securities in at least the
amount of the minimum Offering (if there is any such minimum)
setting forth the material terms of the Offering.
13. Due Diligence: Neither the Company, nor any of its directors,
officers or shareholders, should, in any way rely on the Finder to
perform any due diligence with respect to the Company. It is
expressly understood and agreed that to the extent due diligence is
conducted; it will be conducted by the investors.
14. Expenses, Etc. The compensation described in Section 3 of this
Agreement shall be the Finder's sole compensation for all of its
services and efforts to the Company and its affiliates, in
connection with any offering or placement of Securities. The Finder
shall be exclusively responsible for any compensation, fees,
commissions or payments of its employees, agents representatives,
co-finders or other persons or entities utilized by it in connection
with its activities on behalf of the Company, and the Finder will
indemnify and hold harmless the Company and its affiliates from the
claims of any such persons or entities.
15. Compliance with Laws. The Finder represents and warrants that it is
a duly registered broker/dealer and in good standing with the SEC,
NASD and the State of California and has and shall maintain such
registrations as well as all other necessary licenses and permits to
conduct its activities under this Agreement, which it shall conduct
in compliance with applicable federal and state laws relating to a
private placement under Regulation D of the 1933 Act. The Finder
represents that it is not a party to any other agreement which would
conflict with or interfere with the terms and conditions of this
Agreement.
16. Assignment Prohibited. No assignment of this Agreement shall be made
without the prior written consent of the other party.
17. Amendments. Neither party may amend this Agreement or rescind any of
its existing provisions without the prior written consent of the
other party.
18. Governing Law. This Agreement shall be deemed to have been made in
the State of New York and shall be construed, and the rights and
liabilities determined, in accordance with the law of the State of
New York, without regard to the conflicts of laws rules of such
jurisdiction.
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19. Waiver. Neither Finder's nor the Company's failure to insist at any
time upon strict compliance with this Agreement or any of its terms
nor any continued course of such conduct on their part shall
constitute or be considered a waiver by Finder or the Company of any
of their respective rights or privileges under this Agreement.
20. Severability. If any provision herein is or should become
inconsistent with any present or future law, rule or regulation of
any sovereign government or regulatory body having jurisdiction over
the subject matter of this Agreement, such provision shall be deemed
to be rescinded or modified in accordance with such law, rule or
regulation. In all other respects, this Agreement shall continue to
remain in full force and effect.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and will
become effective and binding upon the parties at such time as all of
the signatories hereto have signed a counterpart of this Agreement.
All counterparts so executed shall constitute one Agreement binding
on all of the parties hereto, notwithstanding that all of the
parties are not signatory to the same counterpart. Each of the
parties hereto shall sign a sufficient number of counterparts so
that each party will receive a fully executed original of this
Agreement.
22. Entire Agreement. This Agreement and all other agreements and
documents referred herein constitutes the entire agreement between
the Company and the Finder. No other agreements, covenants,
representations or warranties, express or implied, oral or written,
have been made by any party hereto to any other party concerning the
subject matter hereof. All prior and contemporaneous conversations,
negotiations, possible and alleged agreements, representations,
covenants and warranties concerning the subject matter hereof are
merged herein. This is an integrated Agreement.
23. Arbitration. The parties agree that this Agreement and all
controversies which may arise between the Finder and the Company,
whether occurring prior, on or subsequent to the date of this
Agreement, will be determined by arbitration. The parties understand
that:
(a) Arbitration is final and binding on the parties.
(b) The parties are waiving their right to seek remedies in court,
including the right to a jury trial.
(c) Pre-arbitration discovery is generally more limited than and
different from court proceedings.
(d) The arbitrators' award is not required to include factual
findings or legal reasoning and any party's right to appeal or
to seek modification or rulings by
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the arbitrators is strictly limited.
(e) The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities
industry.
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The parties agree that any arbitration under this Agreement will be held
at the facilities of and before an Arbitration Panel appointed by the National
Association of Securities Dealers, Inc. ("NASD"), or if the NASD refuses to
accept jurisdiction, then before JAMS/ENDISPUTE in New York, NY. The award of
the arbitrators, or of the majority of them, will be final, and judgments upon
the award may be entered in any court, state or federal, having jurisdiction.
The parties hereby submit themselves and their personal representatives to the
jurisdiction of any state or federal court for the purpose of such arbitration
and entering such judgment.
Any forbearance to enforce an agreement to arbitrate will not constitute a
waiver of any rights under this Agreement except to the extent stated herein.
THIS AGREEMENT IS GOVERNED BY A PRE-DISPUTE ARBITRATION CLAUSE CONTAINED
IN PARAGRAPH 23 OF THIS AGREEMENT
The Shemano Group, Inc. (the "Finder")
By: /s/ Xxxx Xxxxxx
-------------------------------
Xxxx Xxxxxxx
Title: Chief Executive Officer
SIGA Technologies, Inc. (the "Company")
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
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