UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the
Securities
Exchange Act of 1934 (Amendment
No. )
Filed by the
Registrant
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Filed by a Party other than the
Registrant
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Check the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission only (as permitted by
Rule 14a-6(e)(2)
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
IOMAI CORPORATION
(Name of Registrant as Specified
in Its Charter)
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount previously paid:
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(2)
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Form, Schedule or Registration Statement No.:
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IOMAI CORPORATION
20 Firstfield Road
Gaithersburg, Maryland 20878
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
July 10, 2008
Dear Stockholder:
You are cordially invited to attend the Special Meeting of
stockholders of Iomai Corporation (Iomai) to be held
on August 1, 2008, at 9 a.m. local time, at
20 Firstfield Road, Gaithersburg, Maryland, 20878.
At the Special Meeting, you will be asked to vote to approve the
merger (the Merger) of Zebra Merger Sub, Inc., a
wholly-owned
subsidiary of Intercell AG, with and into Iomai, pursuant to an
Agreement and Plan of Merger dated as of May 12, 2008 (the
Merger Agreement). If the Merger is completed,
Iomais stockholders will have the right to receive $6.60
in cash, without interest, for each share of Iomai common stock
they own. Prior to the closing of the Merger, stockholders
representing approximately 41% of the outstanding shares of
Iomai common stock as of July 2, 2008, the record date for
the Special Meeting, will exchange their shares of Iomai common
stock, at a $6.60 per share value, for shares of Intercell
common stock.
Your board of directors, by unanimous vote and after careful
consideration, (1) has approved and adopted the Merger
Agreement, including the Merger and the other transactions
contemplated thereby, (2) has determined that the terms of
the Merger and the other transactions contemplated by the Merger
Agreement are advisable, fair to and in the best interests of
Iomai and its stockholders, (3) recommends that Iomai
stockholders vote FOR approval and adoption of the
Merger Agreement and (4) recommends that Iomai stockholders
vote FOR the approval of any proposal to adjourn or
postpone the Special Meeting, if necessary or appropriate, to
solicit additional proxies in the event that there are not
sufficient votes in favor of approval and adoption of the Merger
Agreement at the time of the Special Meeting.
Your vote is important. We cannot complete the Merger unless,
among other things, the holders of a majority of the common
stock outstanding and entitled to vote at the Special Meeting
vote to approve the Merger Agreement. Failure to submit a signed
proxy card or to vote by telephone, via the internet or in
person at the Special Meeting will have the same effect as a
vote against the approval and adoption of the Merger Agreement.
Whether or not you plan to attend the Special Meeting, please
take the time to vote by completing the enclosed proxy card and
mailing it to us or, if you prefer, vote by telephone or via the
internet by following the telephone and internet voting
instructions described on the enclosed proxy card (or voting
instruction form). Only holders of record of Iomai common stock
at the close of business on July 2, 2008 will be entitled
to vote at the Special Meeting.
In connection with the Merger Agreement, certain Iomai
stockholders, including our executive officers, who own, in the
aggregate, approximately 51% of the shares of outstanding Iomai
common stock as of the record date, entered into a Voting
Agreement with Intercell. Pursuant to the Voting Agreement, each
stockholder party to such agreement has agreed, subject to
limited exceptions, to vote all shares of Iomai common stock
that it owns as of the record date, in favor of adoption of the
Merger Agreement. The shares of Iomai common stock subject to
the Voting Agreement constitute a majority of the common stock
outstanding and entitled to vote at the Special Meeting and
therefore will satisfy the minimum vote necessary to approve and
adopt the Merger Agreement at the Special Meeting. If the Merger
Agreement is terminated in accordance with its provisions, the
Voting Agreement will also terminate.
This proxy statement explains the proposed Merger and the Merger
Agreement, and provides specific information concerning the
Special Meeting. Please review this document carefully.
Sincerely,
Stanley C. Erck
President and Chief Executive Officer
This proxy statement is dated July 10, 2008, and is first
being mailed to Iomai stockholders on or about July 10,
2008.
IOMAI CORPORATION
20 Firstfield Road
Gaithersburg, Maryland 20878
Telephone:
(301) 556-4500
NOTICE OF SPECIAL MEETING OF
STOCKHOLDERS
To be Held on August 1,
2008
Dear Stockholders:
We will hold a Special Meeting of Stockholders of Iomai
Corporation, a Delaware corporation (Iomai), at
20 Firstfield Road, Gaithersburg, Maryland, 20878, on
August 1, 2008, at 9 a.m. local time, to consider and
vote upon the following:
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1.
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A proposal to approve and adopt the Agreement and Plan of
Merger, dated as of May 12, 2008, among Intercell AG, a
joint stock corporation incorporated under the laws of the
Republic of Austria, Zebra Merger Sub, Inc., a Delaware
corporation and wholly-owned subsidiary of Intercell AG, and
Iomai (the Merger Agreement), providing for a merger
(the Merger) in which, among other things, each
share of Iomai common stock, par value $.01 per share, (other
than shares of Iomai common stock held by Intercell, Zebra
Merger Sub, Inc. or their affiliates immediately prior to the
Merger or shares held by stockholders who are entitled to and
properly exercise appraisal rights under Delaware law), will be
converted into the right to receive $6.60 in cash, without
interest;
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A proposal to adjourn or postpone the Special Meeting to a later
time, if necessary or appropriate, to solicit additional proxies
in favor of the proposal to approve the Merger
Agreement; and
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Such other proposals, if any, as may properly be brought before
the Special Meeting or any adjournment or postponement thereof.
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We will transact no other business at the Special Meeting except
such business as may properly be brought before the Special
Meeting or any adjournments or postponements thereof.
The record date for the purpose of determining the stockholders
who are entitled to receive notice of and to vote at the Special
Meeting is July 2, 2008. Only holders of record of Iomai
common stock at the close of business on that date will be
entitled to notice of and to vote at the Special Meeting or any
adjournments or postponements thereof.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE
OUTSTANDING SHARES OF IOMAI COMMON STOCK ENTITLED TO VOTE IS
REQUIRED TO APPROVE AND ADOPT THE MERGER AGREEMENT.
Pursuant
to a Voting Agreement entered into with Intercell, certain Iomai
stockholders, including our executive officers, who own, in the
aggregate, approximately 51% of the outstanding shares of Iomai
common stock as of the record date, have agreed, subject to
limited exceptions, to vote all of their shares in favor of the
adoption of the Merger Agreement. The shares of Iomai common
stock subject to the Voting Agreement constitute a majority of
the common stock outstanding and entitled to vote at the Special
Meeting and therefore will satisfy the minimum vote necessary to
approve and adopt the Merger Agreement at the Special Meeting.
If the Merger Agreement is terminated in accordance with its
provisions, the Voting Agreement will also terminate.
This proxy statement describes the proposed Merger and the
Merger Agreement and the actions to be taken in connection with
the Merger and provides additional information about the parties
involved. Please give this information your careful attention.
Under applicable provisions of Delaware law, Iomai stockholders
have the right to dissent from the Merger and obtain payment in
cash of the fair value of their shares of Iomai common stock, as
determined by the Delaware Chancery Court. Any stockholder
seeking to assert appraisal rights will be required to give
written notice, before the stockholders vote on whether to
approve the Merger Agreement, of the stockholders intent
to demand payment pursuant to statutory appraisal rights, and to
comply with the requirement to not vote to approve and adopt the
Merger Agreement.
YOUR BOARD OF DIRECTORS, BY UNANIMOUS VOTE AND AFTER CAREFUL
CONSIDERATION, (I) HAS APPROVED AND ADOPTED THE MERGER
AGREEMENT, INCLUDING THE MERGER AND THE OTHER TRANSACTIONS
CONTEMPLATED THEREBY, (II) HAS DETERMINED THAT THE TERMS OF
THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER
AGREEMENT ARE ADVISABLE, FAIR TO AND IN THE BEST INTERESTS OF
IOMAI AND ITS STOCKHOLDERS, (III) RECOMMENDS THAT IOMAI
STOCKHOLDERS VOTE FOR APPROVAL AND ADOPTION OF
THE MERGER AGREEMENT AND (IV) RECOMMENDS THAT IOMAI
STOCKHOLDERS VOTE FOR THE APPROVAL OF ANY
PROPOSAL TO ADJOURN OR POSTPONE THE SPECIAL MEETING, IF
NECESSARY OR APPROPRIATE, TO SOLICIT ADDITIONAL PROXIES IN THE
EVENT THAT THERE ARE NOT SUFFICIENT VOTES IN FAVOR OF APPROVAL
AND ADOPTION OF THE MERGER AGREEMENT AT THE TIME OF THE SPECIAL
MEETING.
If you plan to attend the Special Meeting in person, please be
aware that seating may be limited. Registration and seating will
begin at 8:30 a.m. Please bring valid picture
identification, such as a drivers license or passport. You
may be required to provide this identification upon entry to the
meeting. Stockholders holding stock in brokerage accounts
(street name holders) will also need to bring a copy
of a brokerage statement reflecting their stock ownership as of
the record date. Cameras, cell phones, recording devices and
other electronic devices will not be permitted at the Special
Meeting.
Whether or not you plan to attend the Special Meeting, please
complete, sign and date the enclosed proxy card and return it
promptly in the enclosed postage-paid return envelope or, if you
prefer, vote by telephone or via the internet by following the
telephone and internet voting instructions described on the
enclosed proxy card (or voting instruction form).
You may
revoke the proxy at any time prior to its exercise in the manner
described in this proxy statement. Any stockholder present at
the Special Meeting, including any adjournments or postponements
of it, may revoke any previously-granted proxy and vote
personally on the proposal to approve and adopt the Merger
Agreement. Executed proxy cards that are not marked with any
instructions, and proxies submitted by telephone or via the
internet without instructions, will be voted for the approval
and adoption of the Merger Agreement and for the adjournment or
postponement of the Special Meeting, if necessary or
appropriate, to solicit additional proxies. If you fail to
return a properly-signed proxy card or to vote via telephone,
the internet or in person at the Special Meeting, your shares
effectively will be counted as a vote against the approval and
adoption of the Merger Agreement.
PLEASE DO NOT SEND ANY STOCK CERTIFICATES AT THIS TIME.
By order of the board of directors,
Sincerely,
Russell P. Wilson
Senior Vice President, Chief Financial Officer,
General Counsel & Secretary
July 10, 2008
TABLE OF CONTENTS
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A-1
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B-1
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C-1
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D-1
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SUMMARY
TERM SHEET
This summary term sheet highlights selected information from
this proxy statement and may not contain all the information
that is important to you. You should carefully read this entire
proxy statement and the other documents to which we have
referred you. See Where You Can Find Additional
Information on page 59. Each item in this summary
refers to the page of this document on which the applicable
subject is discussed in more detail.
You are being asked to vote to approve a merger agreement (the
merger agreement) that provides for the acquisition
of Iomai Corporation (Iomai, the
company, we, us,
our, or ours) by Intercell AG, a joint
stock corporation incorporated under the laws of the Republic of
Austria (Intercell). The proposed transaction is to
be accomplished through a merger of Zebra Merger Sub, Inc., a
Delaware corporation and wholly-owned subsidiary of Intercell
(Merger Sub), with and into Iomai, with Iomai
surviving, which we refer to as the merger.
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The
Companies (see page 11)
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Iomai Corporation, 20 Firstfield Road, Gaithersburg, Maryland
20878, Telephone:
(301) 556-4500
(see page 11). Iomai is a biopharmaceutical company
focused on the discovery, development and commercialization of
vaccines and immune system stimulants delivered to the skin via
a novel, needle-free technology called transcutaneous
immunization.
Intercell AG, Campus Vienna Biocenter 6, 1030 Vienna,
Austria, Telephone: +43 1 20620 0
(see page 11).
Intercell, a joint stock corporation incorporated under the laws
of the Republic of Austria, is a leading, vaccine-focused
biotechnology company, that designs and develops vaccines for
the prevention and treatment of infectious diseases with
substantial unmet medical need. Intercells common stock is
traded on the Vienna Stock Exchange under the symbol
ICLL.
Zebra Merger Sub, Inc.,
c/o Intercell
AG, Campus Vienna Biocenter 6, 1030 Vienna, Austria, Telephone:
+43 1 20620 0
(see page 11). Merger Sub is a Delaware
corporation and a wholly-owned subsidiary of Intercell. Merger
Sub was formed solely for the purpose of facilitating the
acquisition of Iomai by Intercell.
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Our
Reasons for the Merger (see page 18)
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Our board of directors carefully considered the terms of the
merger and the other strategic alternatives available to our
company in deciding to enter into the merger agreement (which
contemplates the related share exchange) and to recommend that
stockholders vote FOR approval and adoption of the merger
agreement.
For a description of the reasons considered by our board of
directors, see Reasons for the Recommendation of our Board
of Directors on page 18.
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Recommendation
of our Board of Directors (see page 18)
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Our board of directors has unanimously determined that the terms
of the merger agreement and the transactions described in the
merger agreement are advisable, fair to, and in the best
interests of, Iomai and our stockholders. Our board of directors
unanimously recommends that our stockholders vote FOR the
approval and adoption of the merger agreement and FOR the
adjournment or postponement of the special meeting, if necessary
or appropriate, to solicit additional proxies in favor of the
proposal to approve the merger agreement.
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Opinion
of Cowen and Company, LLC (see page 21)
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Cowen and Company, LLC (Cowen) rendered an oral
opinion to our board of directors, which was subsequently
confirmed in writing, that, as of the date of its opinion and
based upon and subject to the factors and assumptions set forth
in its written opinion dated May 12, 2008, the $6.60 in
cash per share of our common stock to be received by the holders
of our common stock (other than Intercell and its affiliates and
the holders of our common stock party to the share exchange
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agreement) pursuant to the merger agreement was fair, from a
financial point of view, to such holders. While Cowen provided a
written fairness opinion to our board of directors, Iomai did
not have a financial advisor with regard to the proposed merger.
The full text of the written opinion of Cowen, dated
May 12, 2008, which sets forth assumptions made, procedures
followed, matters considered and limitations on the review
undertaken in connection with the opinion, is attached as
Annex D. Cowen provided its opinion for the information and
assistance of our board of directors in connection with its
consideration of the transaction. The Cowen opinion is not a
recommendation as to how any holder of our common stock should
vote with respect to the merger. Pursuant to an engagement
letter with Cowen, we have agreed to pay Cowen a customary fee
for rendering its opinion, all of which became payable upon
delivery of Cowens opinion to our board of directors.
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The
Special Meeting (see page 12)
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Date, Time and Place
(see page 12). The special
meeting of our stockholders will be held on August 1, 2008,
at 9 a.m. local time, at 20 Firstfield Road,
Gaithersburg, Maryland, 20878. At the special meeting, our
stockholders will be asked to approve and adopt the merger
agreement.
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Record Date, Voting Power
(see page 12). Our
stockholders are entitled to vote at the special meeting if they
are shown by our records to have owned shares of our common
stock as of the close of business on July 2, 2008, the
record date. On the record date, there were
25,745,083 shares of our common stock entitled to vote at
the special meeting. Common stockholders will have one vote at
the special meeting for each share of our common stock that they
owned on the record date.
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Vote Required
(see page 12). The approval and
adoption of the merger agreement requires the affirmative vote
of stockholders holding at least a majority of shares of our
common stock outstanding at the close of business on the record
date. Pursuant to a voting agreement entered into with
Intercell, certain Iomai stockholders, including our executive
officers, who own, in the aggregate, approximately 51% of the
outstanding shares of our common stock as of the record date,
have agreed, subject to limited exceptions, to vote all of their
shares in favor of the approval and adoption of the merger
agreement. The shares of Iomai common stock subject to the
voting agreement constitute a majority of the common stock
outstanding and entitled to vote at the special meeting and
therefore will satisfy the minimum vote necessary to approve and
adopt the merger agreement at the special meeting. If the merger
agreement is terminated in accordance with its provisions, the
voting agreement will also terminate.
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Voting and Revocability of Proxies
(see page 13). We
are asking our stockholders to complete, date and sign the
accompanying proxy card and promptly return it in the
pre-addressed accompanying envelope or, if you prefer, you can
vote by telephone or via the internet by following the relevant
instructions described on the enclosed proxy card or voting
instruction form received from any broker, bank or other nominee
that may hold shares of our common stock on your behalf. Brokers
or banks holding shares in street name may vote the
shares on our merger proposal only if the stockholder provides
instructions on how to vote. Brokers or banks will provide
stockholders for whom they hold shares with directions on how to
give instructions to vote the shares. All properly submitted
proxies that we receive before the vote at the special meeting,
and that are not revoked, will be voted in accordance with the
instructions indicated on the proxies. If no direction is
indicated on a properly submitted proxy, then the underlying
shares will be voted FOR the approval and adoption of the merger
agreement and FOR the adjournment or postponement of the special
meeting, if necessary or appropriate, to solicit additional
proxies. Failure to submit a signed proxy card or to vote by
telephone, via the internet or in person at the special meeting
will have the same effect as a vote against approval and
adoption of the merger agreement. The adjournment or
postponement proposal requires that holders of more of our
shares of common stock vote in favor of the proposal than vote
against the proposal. Accordingly, abstentions and broker
non-votes will have no effect on the outcome of the adjournment
or postponement proposal. No proxy that is specifically marked
AGAINST the proposal to approve and adopt the merger agreement
will be voted in favor of the adjournment or postponement
proposal, unless it is specifically marked FOR the discretionary
authority to adjourn or postpone the special meeting to a later
date.
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We do not expect any other business to come before the special
meeting. If other business properly comes before the special
meeting, then the persons named as proxies will vote in
accordance with their judgment.
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A stockholder may revoke a previously-given proxy at any time
prior to its use by delivering a signed notice of revocation or
a later-dated, signed proxy to Iomais Secretary or by
submitting a later-dated proxy instruction by telephone or via
the internet. In addition, a stockholder may revoke a
previously-given proxy by delivering, on the day of the special
meeting, a signed notice of revocation or a later-dated signed
proxy to the Secretary of Iomai. A stockholder also may revoke a
previously-given proxy by attending the special meeting and
voting in person. A stockholders attendance at the special
meeting does not in itself result in the revocation of a
previously-given proxy or cause the stockholders shares to
be voted.
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Solicitation of Proxies and Expenses
(see page 13).
We will bear the cost and expense associated with our
solicitation of proxies from our stockholders. In addition to
solicitation by mail, our directors, officers and employees may
solicit proxies from our stockholders by telephone, internet,
facsimile or other electronic means or in person. Brokerage
houses, nominees, fiduciaries and other custodians will be
requested to forward soliciting materials to beneficial owners
and will be reimbursed for their reasonable expenses incurred in
sending proxy materials to beneficial owners.
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The
Merger (see page 14)
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The Merger Agreement
(see page 40);
Structure of
the Merger
(see page 36). The merger agreement being
submitted for our stockholders approval and adoption as
described in this proxy statement relates to the proposed
acquisition of our company by Intercell. If the merger is
completed, Merger Sub, a wholly-owned subsidiary of Intercell,
will be merged with and into Iomai, we will become a
wholly-owned subsidiary of Intercell and our outstanding shares
will be converted into the right to receive the cash
consideration described below (see page 37). Among other
things, the merger agreement contains detailed representations
and warranties made by us to Intercell, covenants regarding the
conduct of our business pending completion of the merger,
consents and approvals required for and conditions to the
completion of the merger, our ability to consider other
acquisition proposals and terms of interim financing that may be
provided by Intercell to Iomai.
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Consideration
(see page 37). With effect from the
closing of the merger, our stockholders will be entitled to
receive, for each share of our common stock they hold, $6.60 in
cash, without interest, other than shares subject to the share
exchange described below (see page 52). The payments due to
our stockholders, as well as to certain holders of our stock
options or warrants as described below, may be reduced by the
amount of any required tax withholding.
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Stock Options
(see page 37). Under the merger
agreement, each outstanding stock option issued under our 1998
Stock Option Plan and 1999 Stock Incentive Plan (whether or not
then vested or exercisable), will be fully vested and
exercisable no less than 30 days prior to the effective
time of the merger, and upon the consummation of the merger, to
the extent not exercised prior to the effective time of the
merger, will be cancelled and terminated and, in consideration
of such cancellation and termination, Intercell will, or will
cause Iomai as the surviving corporation to, promptly, and in no
event later than three business days after the effective time of
the merger, pay to such holders of options, an amount in respect
thereof equal to the product of (i) the excess, if any, of
$6.60 over the exercise price of each such option multiplied by
(ii) the number of shares of common stock issuable upon
exercise of the option. No payments will be made with respect to
stock options that have per share exercise prices above $6.60.
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Under the merger agreement, each outstanding stock option issued
under our 2005 Incentive Plan that is scheduled to vest prior to
the effective time of the merger, will be exercisable prior to
the effective time of the merger, and upon the consummation of
the merger, to the extent not exercised prior to the effective
time of the merger, will be cancelled and terminated and, in
consideration of such cancellation and termination, Intercell
will replace such option with a fully vested option to purchase
shares of Intercell common stock, which will be exercisable
during specific exercise windows as provided by Intercells
Employee Stock Option Plan. For each outstanding stock option
issued under our 2005 Incentive Plan that is unvested by its
terms as of the effective time of the merger, upon the
consummation of the merger, such option will be cancelled and
terminated and, in consideration of such cancellation and
termination, Intercell will replace such option with an unvested
option to purchase shares of Intercell common stock, with the
same vesting schedule the cancelled and terminated option had
under Iomais 2005 Incentive Plan. The exercise price and
number of shares subject to all such options to purchase
Intercell common stock will be determined consistent with the
requirements of Treasury
Regulation Section 1.409A-1(b)(5)(v)(D).
The method of determining the exercise price and number of
shares under the Intercell option is described in more detail in
Treatment of Our Stock Options and Warrants on
page 37.
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Iomai, as the surviving corporation, will treat such options to
purchase shares of Intercell common stock for tax reporting and
withholding purposes in accordance with the regulations and
other applicable guidance under Section 409A of the
Internal Revenue Code. Under the terms of our 2005 Incentive
Plan, for options held by our non-employee directors, each
outstanding option to purchase our common stock, to the extent
not exercised prior to the effective time of the merger, whether
vested or unvested, will be cancelled and terminated and will
thereafter represent the right to receive, in consideration for
such cancellation, a cash payment equal to the excess, if any,
of the $6.60 per share merger consideration over the per share
option exercise price, multiplied by the number of shares of our
common stock subject to the option.
The payments due to the holders of Iomai stock options may be
reduced by the amount of any required tax withholding.
Upon the consummation of the merger, our 1998 Stock Option Plan,
1999 Stock Incentive Plan and 2005 Incentive Plan will
terminate, and all rights under any provision of any other plan,
program or arrangement providing for the issuance or grant of
any other interest in respect of the capital stock of Iomai will
be cancelled.
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Warrants
(see page 37). Under the merger agreement,
upon the consummation of the merger, each outstanding warrant to
purchase common stock will only represent the right to receive
cash consideration, without interest, in an amount equal to the
product of (i) the excess, if any, of $6.60 over the
exercise price of each such warrant multiplied by (ii) the
number of shares of common stock issuable upon exercise of the
warrant. Following the merger, Intercell will, or will cause
Iomai as the surviving corporation to, honor the obligation to
pay such amounts under the warrants. No payment will be made
with respect to warrants that have per share exercise prices
equal to or greater than $6.60.
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Anticipated Closing
(see page 37). We expect the
merger to take effect promptly after the approval and adoption
of the merger agreement by our stockholders and after all other
conditions to the merger have been satisfied or waived. At
present, we anticipate that the closing will occur by the end of
the third quarter of 2008.
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Interests
of Our Directors and Executive Officers in the Merger (see
page 29)
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In considering the recommendation of our board of directors to
vote for the proposal to approve the merger agreement, you
should be aware that some of our directors and executive
officers have personal interests in the merger that are, or may
be, different from, or in addition to, your interests. We
currently have agreements in place with Stanley C. Erck, Russell
P. Wilson and Gregory M. Glenn that provide severance, which are
described in more detail in The Merger
Interests of Our Directors and Executive Officers in the
Merger on page 29. Upon completion of the merger,
(i) each outstanding option to purchase shares of our
common stock issued under our 1998 Stock Option Plan and 1999
Stock Incentive Plan that is held by our executive officers and
our directors and (ii) each outstanding option to purchase
shares of our common stock issued under our 2005 Incentive Plan
that is held by our non-employee directors will, whether or not
it is vested, be cancelled and terminated in exchange for a cash
payment equal to the excess, if any, of the $6.60 per share
merger consideration over the per share option exercise price,
multiplied by the number of shares of our common stock subject
to the option. No payments will be made with respect to such
stock options described above that have per share exercise
prices above $6.60. Upon completion of the merger, each
unexercised outstanding option to purchase shares of our common
stock issued under our 2005 Incentive Plan that is held by our
executive officers will be cancelled and terminated in exchange
for an option to purchase shares of Intercell common stock.
After completion of the merger, the vesting and exercisability
of options to purchase shares of Intercell common stock held by
our executive officers upon termination of such officers
employment is governed by agreements we have in place with such
officers, which are described in more detail in The
Merger Interests of Our Directors and Executive
Officers in the Merger on page 29. The terms of the
merger agreement also provide for the continuation of
indemnification rights (for actions both before and after the
merger) and liability insurance coverage for our current and
former directors and executive officers. Our board of directors
was aware of these interests and considered them, among other
matters, when approving the merger agreement. For a more
complete description, see The Merger Interests
of Our Directors and Executive Officers in the Merger
beginning on page 29.
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Shares Owned by Our Directors and Executive Officers
(see
page 55). Pursuant to a voting agreement with Intercell,
certain Iomai stockholders, including our executive officers and
New Enterprise Associates (and its related entities), which is
an affiliate of M. James Barrett, the chairman of our board,
have agreed to vote any shares of our common stock they own on
the record date in favor of the merger agreement and to take or
refrain from taking certain related actions. A copy of the
voting agreement is included in this proxy statement as
Annex B. All of our executive officers and directors who
own shares of our common stock on the record date
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will be entitled to vote their shares at the special meeting. On
July 2, 2008, the record date, our directors and executive
officers beneficially owned and were entitled to vote shares of
our common stock representing approximately 26% of the shares of
our common stock outstanding on that date. Additionally, New
Enterprise Associates (and its related entities), which is an
affiliate of M. James Barrett, the chairman of our board,
has entered into a share exchange agreement, whereby it agreed
to, among other things, exchange all shares of Iomai common
stock held by it into shares of Intercell common stock, prior to
the effective time of the merger. A copy of the share exchange
agreement is included in this proxy statement as Annex C.
For a more complete description of the voting agreement and the
share exchange, see Share Exchange and Voting
Agreements beginning on page 52.
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Share
Exchange and Voting Agreements (see
pages 52-54)
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Iomai stockholders owning an aggregate of approximately 41% of
our outstanding common stock as of the record date, have entered
into a share exchange agreement with Intercell, whereby each
such stockholder has agreed to, among other things, exchange all
shares of Iomai common stock held by such stockholder into
shares of Intercell common stock prior to the effective time of
the merger. Each share of Iomai common stock held by such
stockholder will be exchanged for the number of shares (rounded
to the nearest whole share) of Intercell common stock equal to
$6.60 divided by the closing sale price for Intercell common
stock on the Vienna Stock Exchange on the closing date of the
share exchange (with such closing price being converted from
Euros to U.S. Dollars). Iomai stockholders owning an
aggregate of approximately 51% of our outstanding common stock
as of the record date have entered into a voting agreement with
Intercell, whereby each such stockholder has agreed to vote any
shares of our common stock owned by such stockholder on the
record date in favor of the merger agreement and to take or
refrain from taking certain related actions.
A copy of the voting agreement is included in this proxy
statement as Annex B and a copy of the share exchange
agreement is included in this proxy statement as Annex C.
For a more complete description, see Share Exchange and
Voting Agreements beginning on page 52.
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Material
U.S. Federal Income Tax Consequences of the Merger (see
page 34)
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The receipt of $6.60 in cash for each share of our common stock
pursuant to the merger will be a taxable transaction for
U.S. federal income tax purposes. Accordingly, for
U.S. federal income tax purposes, you will generally
recognize a capital gain or loss as a result of the merger with
respect to each of your shares measured by the difference, if
any, between $6.60 per share you receive and your adjusted tax
basis in that share. Generally, your adjusted tax basis in a
share is the amount you paid for it.
The receipt of cash in exchange for outstanding stock options or
warrants will be a taxable transaction for U.S. federal
income tax purposes. A holder of warrants will generally
recognize a capital gain or loss equal to the difference between
the amount of cash the holder receives and the adjusted tax
basis, if any, of such holder in the warrants surrendered.
Holders of stock options will generally recognize ordinary
income (subject to income tax and employment tax withholding, in
the case of an option granted in connection with employment)
equal to the amount of cash they receive in respect of the
surrendered stock options. In the case of a stock option holder
who exercises an option in connection with the merger and then
sells the stock for cash as described above, any gain on the
sale will generally be measured by reference to an adjusted tax
basis in the stock that includes any ordinary income that is
recognized upon exercise or, in the case of a so-called
incentive stock option, upon sale of the stock.
You should read The Merger Material
U.S. Federal Income Tax Consequences beginning on
page 34 for a more complete discussion of the
U.S. federal income tax consequences of the merger to
stockholders. Tax matters can be complicated and the tax
consequences of the merger to you will depend on your particular
tax situation. You are urged to consult your tax advisor as to
the specific tax consequences to you of the merger, including
the applicability of federal, state, local, foreign and other
tax laws.
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Appraisal
Rights (see page 35)
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If the merger is consummated, stockholders at the effective time
of the merger will have certain rights pursuant to the
provisions of Section 262 of the Delaware General Corporate
Law (DGCL) to dissent and demand appraisal of their shares.
Under Section 262, dissenting stockholders who comply with
the applicable statutory procedures will be entitled to demand
5
payment of fair value for their shares. If a stockholder and the
surviving corporation in the merger do not agree on such fair
value, the stockholder will have the right to a judicial
determination of fair value of such stockholders shares
(exclusive of any element of value arising from the
accomplishment or expectation of the merger) and to receive
payment of such fair value in cash, together with any interest
as determined by the Delaware Chancery Court. Any such judicial
determination of the fair value of such shares could be based
upon factors other than, or in addition to, the $6.60 price per
share or the market value of such shares. The value so
determined could be more or less than $6.60.
The foregoing summary of the Section 262 does not purport
to be complete and is qualified in its entirety by reference to
the DGCL. A complete text of Section 262 of the DGCL is set
forth as Annex E hereto.
You should read The Merger Appraisal
Rights beginning on page 35 for a more complete
discussion of the appraisal rights in relation to the merger.
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Conditions
to Completing the Merger (see page 48)
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Among other conditions that will need to be satisfied or waived
in order to complete the merger, at least a majority of shares
of our common stock outstanding at the close of business on the
record date must be voted FOR approval and adoption of the
merger agreement, and the transactions contemplated by the share
exchange agreement between Intercell and certain Iomai
stockholders shall have been consummated.
The completion of the merger is also subject to other customary
closing conditions, including that there be no law enacted that
prohibits the consummation of the merger or the other
transactions contemplated by the merger agreement and no
injunction issued by a court of competent jurisdiction that will
be continuing and prohibits the consummation of the merger or
the other transactions contemplated by the merger agreement. The
parties have satisfied the closing conditions requiring
termination of the waiting period under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and clearance by
the Committee on Foreign Investment in the United States.
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Termination
of the Merger Agreement (see page 49)
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The merger agreement contains provisions addressing the
circumstances under which we or Intercell may terminate the
merger agreement.
A COPY OF THE MERGER AGREEMENT IS INCLUDED IN THIS PROXY
STATEMENT AS ANNEX A. YOU ARE STRONGLY ENCOURAGED TO READ
IT CAREFULLY AND IN ITS ENTIRETY.
6
QUESTIONS
AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING
The following questions and answers are intended to briefly
address some commonly asked questions regarding the merger, the
merger agreement and the special meeting. These questions and
answers do not address all questions that may be important to
you as an Iomai stockholder. Please refer to the Summary
Term Sheet and the more detailed information contained
elsewhere in this proxy statement, the annexes to this proxy
statement and the documents referred to in this proxy statement,
which you should read carefully.
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Q:
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What am I being asked to vote on?
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A:
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You are being asked to vote to approve the merger agreement that
provides for the acquisition of Iomai by Intercell. The proposed
transaction is to be accomplished through a merger of Merger Sub
with and into Iomai, with Iomai surviving as a wholly-owned
subsidiary of Intercell. As a result of the merger:
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Iomai will become a
wholly-owned subsidiary of Intercell;
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our common stock will cease
to be listed on The Nasdaq Global Market, and no longer will be
publicly traded;
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we will no longer be
obligated to file periodic reports with the Securities and
Exchange Commission; and
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each outstanding share of
our common stock will be converted into the right to receive
$6.60 in cash, without interest.
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Prior to the closing of the merger, Iomai stockholders owning,
in the aggregate, approximately 41% of the shares of outstanding
Iomai common stock as of July 2, 2008, will exchange their
shares of Iomai common stock, at a $6.60 per share value, for
shares of Intercell common stock, which we refer to as the
share exchange. You are not being asked to vote on
the share exchange; however, the share exchange is contemplated
by the merger agreement and the consummation of the transactions
contemplated by the share exchange agreement is a condition to
the closing of the merger.
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Q:
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Why is my vote important?
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A:
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Your vote is important because, among other things, in order for
us to complete the merger, at least a majority of our common
stock outstanding and entitled to vote at the special meeting
have to be voted in favor of approving and adopting the merger
agreement. Accordingly, your failure to vote, including by
abstaining or as a result of broker non-votes, will have the
same effect as a vote against the proposal to approve and adopt
the merger agreement.
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Q:
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Who is entitled to vote at the special meeting?
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A:
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Holders of record of shares of Iomai common stock as of the
close of business on July 2, 2008, the record date for the
special meeting, are entitled to vote at the special meeting, or
at any adjournments or postponements of the special meeting.
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Q:
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What vote is required to approve the merger agreement?
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A:
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Stockholders holding at least a majority of our common stock
outstanding and entitled to vote at the special meeting must
vote
FOR
approval and adoption of the merger agreement
for it to be validly approved. Pursuant to a voting agreement
entered into with Intercell, certain Iomai stockholders,
including our executive officers, who own, in the aggregate,
approximately 51% of the outstanding shares of Iomai common
stock as of the record date, have agreed, subject to limited
exceptions, to vote all of their shares in favor of the adoption
of the merger agreement. The shares of Iomai common stock
subject to the voting agreement constitute a majority of the
common stock outstanding and entitled to vote at the special
meeting and therefore will satisfy the minimum vote necessary to
approve and adopt the merger agreement at the special meeting.
If the merger agreement is terminated in accordance with its
provisions, the voting agreement will also terminate.
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Q:
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How does our board of directors recommend that I vote?
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A:
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Our board of directors unanimously recommends that our
stockholders vote
FOR
the approval and adoption of the
merger agreement and
FOR
the adjournment or postponement
of the special meeting, if necessary or appropriate, to solicit
additional proxies in favor of the proposal to approve and adopt
the merger agreement. You should read The
Merger Reasons for the Recommendation of our Board
of Directors, beginning on page 18, for a discussion
of the factors that our board of directors considered in
deciding to recommend the approval and adoption of the merger
agreement.
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Q:
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What will I receive in the merger?
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A:
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Subject to the terms of the merger agreement, in the merger,
each issued and outstanding share of Iomai common stock
automatically will be converted into the right to receive $6.60
in cash, without interest. The actual payment to you may be
reduced by the amount of any required tax withholding.
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Prior to the closing of the merger, Iomai stockholders owning,
in the aggregate, approximately 41% of the shares of outstanding
Iomai common stock as of the record date, will exchange their
shares of Iomai common stock, at a $6.60 per share value, for
shares of common stock of Intercell.
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Q:
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What will happen to my outstanding stock options?
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A:
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Under the merger agreement, each outstanding stock option issued
under our 1998 Stock Option Plan and 1999 Stock Incentive Plan
(whether or not then vested or exercisable), will be fully
vested and exercisable no less than 30 days prior to the
effective time of the merger, and upon the consummation of the
merger, to the extent not exercised prior to the effective time
of the merger, will be cancelled and terminated and, in
consideration of such cancellation and termination, Intercell
will, or will cause Iomai as the surviving corporation to,
promptly, and in no event later than three business days after
the effective time of the merger, pay to such holders of
options, an amount in respect thereof equal to the product of
(i) the excess, if any, of $6.60 over the exercise price of
each such option multiplied by (ii) the number of shares of
common stock issuable upon exercise of the option. No payments
will be made with respect to stock options that have per share
exercise prices above $6.60.
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Under the merger agreement, each outstanding stock option issued
under our 2005 Incentive Plan that is scheduled to vest prior to
the effective time of the merger, will be exercisable prior to
the effective time of the merger, and upon the consummation of
the merger, to the extent not exercised prior to the effective
time of the merger, will be cancelled and terminated and, in
consideration of such cancellation and termination, Intercell
will replace such option with a fully vested option to purchase
shares of Intercell common stock, which will be exercisable
during specific exercise windows as provided by Intercells
Employee Stock Option Plan. For each outstanding stock option
issued under our 2005 Incentive Plan that is unvested by its
terms as of the effective time of the merger, upon the
consummation of the merger, such option will be cancelled and
terminated and, in consideration of such cancellation and
termination, Intercell will replace such option with an unvested
option to purchase shares of Intercell common stock, with the
same vesting schedule the cancelled and terminated option had
under Iomais 2005 Incentive Plan. The exercise price and
number of shares subject to all such options to purchase
Intercell common stock will be determined consistent with the
requirements of Treasury
Regulation Section 1.409A-1(b)(5)(v)(D).
The method of determining the exercise price and number of
shares under the Intercell option is described in more detail in
Treatment of Our Stock Options and Warrants on
page 37. Iomai, as the surviving corporation, will treat
such options to purchase shares of Intercell common stock for
tax reporting and withholding purposes in accordance with the
regulations and other applicable guidance under
Section 409A of the Internal Revenue Code. Under the terms
of our 2005 Incentive Plan, for options held by our non-employee
directors, each outstanding option to purchase our common stock,
to the extent not exercised prior to the effective time of the
merger, whether vested or unvested, will be cancelled and
terminated and will thereafter represent the right to receive,
in consideration for such cancellation, a cash payment equal to
the excess, if any, of the $6.60 per share merger consideration
over the per share option exercise price, multiplied by the
number of shares of our common stock subject to the option.
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The payments due to the holders of Iomai stock options may be
reduced by the amount of any required tax withholding.
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Upon the consummation of the merger, our 1998 Stock Option Plan,
1999 Stock Incentive Plan and 2005 Incentive Plan will
terminate, and all rights under any provision of any other plan,
program or arrangement providing for the issuance or grant of
any other interest in respect of the capital stock of Iomai will
be cancelled.
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Q:
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What will happen to my outstanding warrants?
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A:
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Under the merger agreement, upon the consummation of the merger,
each outstanding warrant to purchase Iomai common stock will
only represent the right to receive cash consideration, without
interest, in an amount equal to the product of (i) the
excess, if any, of $6.60 over the exercise price of each such
warrant multiplied by (ii) the number of shares of Iomai
common stock issuable upon exercise of the warrant. Following
the merger, Intercell will, or will cause Iomai as the surviving
corporation to, honor the obligation to pay such amounts under
the warrants. The payments due to the holders of Iomai warrants
may be reduced by the amount of any required tax withholding.
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Q:
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What do I need to do now?
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A:
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After carefully reading and considering the information
contained in this proxy statement, please complete, sign and
date the enclosed proxy card and return it in the enclosed
postage-paid return envelope as soon as possible or, if you
prefer, you can vote by telephone or via the internet by
following the relevant instructions described on the enclosed
proxy card or voting instruction form received from any broker,
bank or other nominee that may hold shares of our common stock
on your behalf. If you sign and send in your proxy card and do
not mark it to show how you want to vote, or if you submit a
proxy by telephone or via the internet without providing
instructions, we will count your proxy as a vote in favor of the
approval and adoption of the merger agreement and in favor of
any proposal to adjourn or postpone the special meeting to
solicit additional proxies.
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Q:
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Can I change my vote after I have mailed my signed proxy or
voted by telephone or via the internet?
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A:
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Yes. You can change your vote at any time before your proxy is
voted at the special meeting. You can do this in one of four
ways. First, you can send a written notice stating that you
would like to revoke your proxy. Second, you can complete and
submit a new proxy bearing a later date. Third, you can submit a
later-dated proxy instruction by telephone or via the internet.
If you choose any of these three methods, then you must submit
your notice of revocation or your new proxy to us before the
special meeting either by telephone, via the internet or at
Iomai Corporation, 20 Firstfield Road, Gaithersburg, MD 20878,
Attention: Investor Relations, as the case may be. Finally, you
can attend the special meeting and deliver a signed notice of
revocation, deliver a later-dated duly executed proxy or vote in
person. Your attendance at the special meeting will not, in and
of itself, result in the revocation of a proxy or cause your
shares to be voted.
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Q:
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What happens if I do not submit a proxy or vote by telephone
or via the internet or in person at the special meeting?
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A:
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Because the required vote of our stockholders is based upon the
number of outstanding shares of our common stock, rather than
upon the number of shares actually voted, any failure by a
holder of Iomai common stock to vote for the approval and
adoption of the merger agreement, in person at the special
meeting or by proxy, including abstentions and broker non-votes,
will have the same effect as a vote against the approval and
adoption of the merger agreement.
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Q:
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If my shares are held in street name by my broker
or bank, will my broker or bank automatically vote my shares for
me?
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A:
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No. Your broker or bank is allowed to vote your shares only
if you provide instructions on how to vote. You should follow
the directions provided by your broker or bank regarding how to
instruct your broker or bank to vote your shares. Without
instructions, your shares will not be voted, which will have the
same effect as a vote against the approval and adoption of the
merger agreement.
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Q:
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When is the special meeting and where will it be held?
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A:
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The special meeting will take place on August 1, 2008, at
9 a.m. local time, at 20 Firstfield Road,
Gaithersburg, Maryland 20878. You may attend the special meeting
and vote your shares in person, rather than completing, signing,
dating and returning your proxy. If you wish to vote in person
and your shares are held by a broker or other nominee, you need
to obtain a proxy from the broker or other nominee authorizing
you to vote your shares held in the brokers name.
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Q:
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May I vote via the internet or telephone?
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A:
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Yes, by following the telephone and internet voting instructions
described on the enclosed proxy card or in the voting
instruction form received from any broker, bank or other nominee
that holds shares of our common stock on your behalf.
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Q:
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Should I send in my stock certificates now?
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A:
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No. Stockholders who hold their shares in certificated form
will need to exchange their Iomai stock certificates for cash
after the merger is completed. We will send stockholders
instructions for exchanging their stock certificates at that
time. Stockholders who hold their shares in book-entry form also
will receive instructions for exchanging their shares after we
complete the merger. Please do not send in your stock
certificates with your proxy.
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Q:
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When do you expect the merger to be completed?
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A:
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In addition to obtaining Iomai stockholder approval, the parties
must satisfy various other closing conditions, including that
there be no law enacted that prohibits the consummation of the
merger or the other transactions contemplated by the merger
agreement and no injunction issued by a court of competent
jurisdiction that will be continuing and prohibits the
consummation of the merger or the other transactions
contemplated by the merger agreement, and that the transactions
contemplated by the share exchange agreement between Intercell
and certain Iomai stockholders have been consummated. The
parties have satisfied the closing conditions requiring
termination of the waiting period under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and clearance by
the Committee on Foreign Investment in the United States. We
expect to complete the merger promptly following satisfaction of
the other closing conditions, which we currently expect to occur
during the third quarter of 2008.
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Q:
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Where can I learn more about Intercell?
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A:
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Information about Intercell is available from its 2007 Annual
Report, which can be obtained for free from its website at
www.intercell.com.
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Q:
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Who can help answer my questions?
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A:
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If you have any questions about the merger, including the
procedures for voting your shares, or if you need additional
copies of this proxy statement or the enclosed proxy (which will
be provided without charge) you should contact us, as follows:
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Iomai Corporation
Investor Relations
20 Firstfield Road
Gaithersburg, MD 20878
Telephone:
(301) 556-4478
Email: investors@iomai.com
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10
THE
COMPANIES
Iomai
Corporation
Iomai Corporation discovers and develops vaccines and immune
system stimulants, delivered via a novel, needle-free technology
called transcutaneous immunization (TCI). TCI,
discovered by researchers at the Walter Reed Army Institute of
Research, taps into the unique benefits of a major group of
antigen-presenting cells found in the outer layers of the skin
(Langerhans cells) to generate an enhanced immune response.
Iomai is leveraging TCI to enhance the efficacy of existing
vaccines, develop new vaccines that are viable only through
transcutaneous administration and expand the global vaccine
market. Iomai currently has four product candidates in
development: three targeting influenza and pandemic flu and one
to prevent travelers diarrhea. Iomai is a Delaware
corporation. Its principal executive offices are located at 20
Firstfield Road, Gaithersburg, Maryland 20878. The telephone
number at that location is
(301) 556-4500.
Iomais shares are traded on The Nasdaq Global Market under
the symbol IOMI. The common stock of Iomai is
registered under the Securities Exchange Act of 1934, as amended
(the Exchange Act) and, in accordance therewith,
Iomai is required to file reports and other information with the
Securities and Exchange Commission (the SEC)
relating to its business, financial condition and other matters.
Copies of such information are obtainable at the public
reference facilities of the SEC at 100 F Street, N.E.,
Washington, D.C. 20549. Such reports and information are
also obtainable by mail, upon payment of the SECs
customary charges, by writing to the SECs principal office
at 100 F Street, N.E., Washington, D.C. 20549.
Iomais filings with the SEC are also available to the
public from commercial document retrieval services, at the
internet website maintained by the SEC at
http://www.sec.gov
and at Iomais website at
http://www.iomai.com.
Intercell
AG
Intercell AG is a leading, vaccine-focused biotechnology
company. Intercell designs and develops vaccines for the
prevention and treatment of infectious diseases with substantial
unmet medical need. Intercell develops antigens and adjuvants
that are derived from its proprietary technology platforms.
Intercell has a number of strategic partnerships with
multinational pharmaceuticals firms, including Novartis,
Merck & Co., Wyeth, and Sanofi Pasteur, S.A.
Intercells leading product is a vaccine against Japanese
Encephalitis, which completed its Phase III clinical trials
in 2006. In December 2007, Intercell filed a Biological License
Application for the vaccine with the FDA as well as a Marketing
Authorization Application with the European Medicines Agency.
Among its other product lines, Intercell is developing and is at
various stages of testing a pseudomonas vaccine, a Hepatitis C
vaccine, and five other vaccines that are at pre-clinical stages
of evaluation. Its principal executive offices are located at
Campus Vienna Biocenter 6, 1030 Vienna, Austria. The telephone
number at that location is +43 1 20620 0.
Intercell is a joint stock corporation organized under the laws
of the Republic of Austria. Intercell is headquartered in
Vienna, Austria, with operations in Livingston, Scotland, an
office in Mooresville, North Carolina, and other affiliated
companies in Austria. Intercell is publicly traded on the Vienna
Stock Exchange under the symbol ICLL.
Zebra
Merger Sub, Inc.
Zebra Merger Sub, Inc. is a Delaware corporation that was
organized for the purpose of acquiring all of the outstanding
shares of Iomai and, to date, has engaged in no other activities
other than those incidental to the merger. Merger Sub is a
direct wholly-owned subsidiary of Intercell. Merger Sub is not
subject to the informational filing requirements of the Exchange
Act. The principal executive offices of Merger Sub are located
c/o Intercell
at Campus Vienna Biocenter 6, 1030 Vienna, Austria. The
telephone number at that location is +43 1 20620 0.
11
THE
SPECIAL MEETING
We are furnishing this proxy statement to our stockholders, as
of the record date, as part of our solicitation of proxies by
our board of directors for use at the special meeting.
Date,
Time and Place
The special meeting of our stockholders will be held on
August 1, 2008, at 9 a.m. local time, at
20 Firstfield Road, Gaithersburg, Maryland 20878.
Purpose
of the Special Meeting
At the special meeting, we will ask our stockholders to approve
and adopt the merger agreement. Our board of directors
unanimously recommends that our stockholders vote FOR the
approval and adoption of the merger agreement and FOR the
adjournment or postponement of the special meeting, if necessary
or appropriate, to solicit additional proxies.
Record
Date; Shares Entitled to Vote; Quorum
Only holders of record of our common stock at the close of
business on July 2, 2008, the record date, are entitled to
notice of and to vote at the special meeting. On the record
date, 25,745,083 shares of our common stock were issued and
outstanding and held by approximately 130 holders of
record. A quorum will be considered present at the special
meeting if a majority of all the shares of our common stock
issued and outstanding on the record date and entitled to vote
at the special meeting are represented at the special meeting in
person or by a properly submitted proxy. If a quorum is not
present at the special meeting, then it is expected that the
meeting will be adjourned or postponed to solicit additional
proxies. Holders of record of our common stock on the record
date are entitled to one vote per share on each matter submitted
to a vote at the special meeting.
All votes will be tabulated by the inspector of election
appointed for the special meeting who will separately tabulate
affirmative and negative votes, abstentions and broker
non-votes. Abstentions and broker non-votes are counted for the
purposes of determining whether a quorum exists at the special
meeting.
Vote
Required
The approval and adoption of the merger agreement requires the
affirmative vote of stockholders holding at least a majority of
the shares of our common stock outstanding on the record date.
Because the required vote of our stockholders is based upon the
number of outstanding shares of our common stock, rather than
upon the shares actually voted, the failure by the holder of any
such shares to submit a proxy or to vote in person at the
special meeting, including abstentions and broker non-votes,
will have the same effect as a vote against the approval and
adoption of the merger agreement. The proposal to adjourn or
postpone the meeting to a later time, if necessary or
appropriate, to solicit additional proxies in favor of the
proposal to approve and adopt the merger agreement requires the
affirmative vote of a majority of the shares of our common stock
present in person or by proxy and voting at the special meeting.
Intercell has informed us that at the close of business on the
record date, Intercell, Merger Sub and their affiliates did not
own any shares of our common stock outstanding on that date,
although they have rights under the share exchange and voting
agreements, as discussed on pages
52-54.
Pursuant to a voting agreement entered into with Intercell,
Iomai stockholders, including our executive officers, who own,
in the aggregate, approximately 51% of the outstanding shares of
our common stock as of the record date, have agreed, subject to
limited exceptions, to vote all of their shares in favor of the
approval and adoption of the merger agreement. The shares of
Iomai common stock subject to the voting agreement constitute a
majority of the common stock outstanding and entitled to vote at
the special meeting and therefore will satisfy the minimum vote
necessary to approve and adopt the merger agreement at the
special meeting. If the merger agreement is terminated in
accordance with its provisions, the voting agreement will also
terminate.
Shares
Owned by Our Directors and Executive Officers
At the close of business on the record date, our directors and
executive officers beneficially owned and were entitled to vote,
in the aggregate, 6,587,143 shares of our common stock
outstanding on that date. Pursuant to the voting agreement with
Intercell, our executive officers and New Enterprise Associates
(and its related entities), which is an affiliate of M. James
Barrett, the chairman
12
of our board, have agreed to vote any shares of our common stock
they own on the record date in favor of the merger agreement and
to take or refrain from taking certain related actions.
Voting of
Proxies
All shares represented by properly submitted proxies received
before the special meeting will be voted at the special meeting
in the manner specified by such proxies. Properly executed proxy
cards and proxies submitted by telephone and via the internet
that do not provide voting instructions will be voted FOR the
approval and adoption of the merger agreement and FOR the
adjournment or postponement of the special meeting, if necessary
or appropriate, to solicit additional proxies. Shares of our
common stock represented at the special meeting but not voting,
including shares of our common stock for which proxies have been
received but with respect to which holders of shares have
abstained, will be treated as present at the special meeting for
purposes of determining the presence or absence of a quorum for
the transaction of all business.
Only shares affirmatively voted for the approval and adoption of
the merger agreement, including shares represented by properly
submitted proxies that do not contain voting instructions, will
be counted as favorable votes for that proposal. If a
stockholder abstains from voting or does not furnish a valid
proxy, the stockholders shares effectively will count as
voted against the approval and adoption of the merger agreement.
Brokers or banks who hold shares of our common stock in
street name for customers who are the beneficial
owners of such shares may not give a proxy to vote those
customers shares in the absence of specific instructions
from those customers. If no instructions are given to the broker
or bank holding shares, or if instructions are given to the
broker or bank indicating that the broker or bank does not have
authority to vote on the proposal to approve and adopt the
merger agreement, then, in either case, the shares will be
counted as present for purposes of determining whether a quorum
exists, will not be voted on the proposal to approve and adopt
the merger agreement and will effectively count as votes against
the approval and adoption of the merger agreement.
We do not expect that any matter other than the proposal to
approve and adopt the merger agreement will be brought before
the special meeting. If, however, other matters are brought
before the special meeting, the persons named as proxies will
vote in accordance with their judgment.
Revocability
of Proxies
A stockholder can change a vote or revoke a previously-given
proxy at any time before the proxy is voted at the special
meeting. A stockholder may accomplish this in one of four ways.
First, a stockholder can send a written notice stating that the
stockholder would like to revoke the stockholders
previously-given proxy. Second, a stockholder can complete and
submit a new proxy bearing a later date. Third, a stockholder
can submit a later-dated proxy instruction by telephone or via
the internet. If a stockholder chooses any of these three
methods, the stockholder must submit the notice of revocation or
new proxy to us prior to the special meeting either by
telephone, via the internet or at Iomai Corporation, 20
Firstfield Road, Gaithersburg, Maryland 20878, Attention:
Investor Relations, as the case may be. Finally, a stockholder
can attend the special meeting and deliver a signed notice of
revocation or deliver a later-dated duly executed proxy to the
Secretary of Iomai or vote in person. Attendance at the special
meeting will not in and of itself result in the revocation of a
proxy or cause your shares to be voted. If you have instructed
your broker to vote your shares, you must follow the directions
provided by your broker to change these instructions.
Solicitation
of Proxies
We will bear the cost of our solicitation of proxies from our
stockholders. In addition to solicitation by mail, our
directors, officers and employees may solicit proxies from
stockholders by telephone or other electronic means or in
person. We will cause brokerage houses and other custodians,
nominees and fiduciaries to forward solicitation materials to
the beneficial owners of stock held of record by such persons.
We will reimburse such custodians, nominees and fiduciaries for
their reasonable out-of-pocket expenses in doing so.
STOCKHOLDERS SHOULD NOT SEND STOCK CERTIFICATES WITH THEIR
PROXIES.
A transmittal form with instructions for the
surrender of certificates representing shares of our common
stock in exchange for the $6.60 per share merger consideration
will be mailed to stockholders shortly after completion of the
merger.
13
THE
MERGER
While we believe that the following description covers the
material terms of the merger and the related transactions, this
summary may not contain all of the information that is important
to you. You should carefully read this entire proxy statement,
including the annexes, and the other documents we refer to for a
more complete understanding of the merger and the related
transactions.
Background
of the Merger
In August 2007, we announced interim data from a Phase 2 field
trial of our needle-free travelers diarrhea vaccine that
indicated that people who received the vaccine before traveling
to Mexico or Guatemala were significantly less likely to report
clinically significant diarrhea. In that study, we observed that
travelers who received our needle-free travelers diarrhea
vaccine were significantly less likely to be sickened as
compared with travelers who received a placebo. Based on the
results from this trial, we planned to move quickly to complete
our Phase 2 work for our travelers diarrhea vaccine in
2008, which could allow a Phase 3 efficacy study in travelers to
Guatemala and Mexico during summer of 2009, when the
travelers diarrhea season in Latin America is at its peak.
At that time, we recognized that the remaining development
program and potential commercialization of our travelers
diarrhea vaccine would require substantial additional cash to
fund those expenses. In particular, we estimated that we would
require between $100 to $130 million to fund our
travelers diarrhea program through licensure, including
$30 to $45 million in third-party clinical trial expenses,
and given our limited cash reserves of $26.4 million at the
end of the second quarter of 2007, we would likely need to raise
up to $100 million in additional funds to advance our
needle-free travelers diarrhea vaccine. Accordingly, we
adopted a strategy to identify and select leading pharmaceutical
and biotechnology companies as potential collaborators to assist
us in furthering development and potential commercialization of
this product candidate.
As part of this process, we commissioned a study from LEK
Consulting for the travelers diarrhea market which
determined that there was a large market for an effective
travelers diarrhea vaccine; potentially between
approximately $660 million and $800 million in annual
sales. This study was a top-level analysis of the revenue
potential of the travelers diarrhea market, and was based
on information from secondary sources and interviews with 38
travel medicine doctors in the US and EU. We recognized that at
a later time, we would need to commission a more detailed
assessment with more extensive primary research of physicians,
customers and experts, along with more thorough research on
pricing, market penetration and competitive products, in order
to develop a detailed business plan for this product. In the
fall of 2007, armed with the market study and the recent Phase 2
field trial data, we contacted a number of leading
pharmaceutical and biotechnology companies as potential
collaborators for this program. During this period, we underwent
program due diligence visits by several potential collaborators.
To increase the likelihood of contacting as many potential
partners as possible, in late November 2007, we engaged JSB
Partners, LP (JSB), a global transaction advisory
firm with relationships with a large number of pharmaceutical
and biotechnology companies, to run an auction process to
maximize our value for this program. Through its engagement, JSB
served as an external business development resource to prepare
materials to market our travelers diarrhea program to
potential partners and to make introductions to potential
partners beyond those with which we already had relationships.
With JSBs assistance, we systematically contacted 89
potential collaborators to apprise their interest in our
travelers diarrhea program. Ultimately, after contacting
89 companies, providing confidential materials to 17 of
those companies, and conducting discussions with nine of those
companies, we ended up with offers from four companies, each of
which we had wide-ranging dealings over a number of years. These
proposals included two modest proposals for our travelers
diarrhea program and two offers to acquire the entire company.
Of the nine companies with whom we had discussions, they
included three global pharmaceutical companies, two European
pharmaceutical companies and four biotechnology companies with
interests in infectious diseases, including Intercell. In the
end, we decided to not focus on discussions with the two
European pharmaceutical companies and three of the four
biotechnology companies because they were either not
sufficiently advanced in the negotiating process or not
committed to meet our timelines for concluding a transaction.
As part of this process, one of the companies we contacted was
Intercell. Since 2001, we have had periodic discussions with
Intercell regarding possible opportunities for collaboration on
various programs, including a face-to-face meeting in February
2007 between members of both companies senior management
for an in-depth review of both companies programs. At an
industry conference in early January 2008, our president,
Stanley C. Erck, met with Intercells chief executive
officer, Gerd Zettlmeissl, and our chief financial officer,
Russell P. Wilson, met separately with Intercells chief
financial officer, Werner Lanthaler. At these meetings,
Intercell stated that it was interested in a strategic
combination of the two companies. At the time, we indicated that
Iomai was not for sale and that our preference was for a
travelers diarrhea vaccine partnership, which could
complement Intercells travelers vaccine to prevent
Japanese Encephalitis.
14
On January 22 and 23, 2008, Mr. Erck, Mr. Wilson, our
chief scientific officer, Gregory Glenn, and our vice president
of business development, Kai Chen, visited Intercells
offices in Vienna, Austria to meet with Dr. Zettlmeissl,
Dr. Lanthaler, Intercells chief scientific officer,
Alexander von Gabain, and others from Intercell, to explore
possible collaborative opportunities. After the two days of
discussions, Intercell once again indicated that it was
interested in a combination of the two companies. Again, we
indicated that Iomai was not for sale and that we were
evaluating other potential offers for supporting our
travelers diarrhea program, which still remained our
preference.
At the February 14, 2008 meeting of our board of directors,
our president, Mr. Erck, summarized for the board of
directors the status of various partnering discussions, focusing
on particular terms under negotiation, including which of our
products the potential partners were exploring, the potential
cost-sharing arrangements and the scope of the proposal
partnerships. The discussion also covered Intercells
expression of interest regarding a potential business
combination transaction. Our board of directors confirmed that
the company was not for sale and intended to remain independent
because the proposal from Intercell did not properly value our
Company and we had the opportunity to obtain potentially
stronger terms in a partnering transaction, and charged
management to encourage Intercell to focus on partnering
transactions.
On February 22, 2008, we received a letter from Intercell
expressing its interest in engaging in discussions regarding a
potential acquisition of our company. The letter included a
non-binding term sheet that proposed a merger at a per share
cash price of approximately $2.86. Intercell noted its view that
there are significant synergies between the two companies, such
as excellent product fit in the travelers vaccine segment,
a territorial fit between Europe and the United States and a
complementary technology basis between Intercells antigen
and adjuvant discovery programs and our transcutaneous
immunization technology.
On March 7, 2008, members of senior management from both
Iomai and Intercell, including Mr. Erck, Mr. Wilson,
Dr. Zettlmeissl and Intercells head of finance,
Reinhard Kandera, met to further explore potential strategic
opportunities. At the time, we explored with Intercell potential
collaboration scenarios beyond the proposed transaction
structure. Intercell continued to press for an acquisition of
our company and, at the meeting, verbally offered an increased
per share price of $4.50 through a combination of cash and
stock. Intercell determined that, in order for Intercell to
increase its offer from the initial proposal, it would need to
provide some of the acquisition consideration in the form of
Intercell stock. The stock component enabled Intercell to
provide a more favorable offer to acquire Iomai. Intercell
indicated that since it was not interested at this time in
becoming a registrant under U.S. securities laws, its
shares would only be issued in the U.S. in a private
placement to a limited number of our stockholders pursuant to a
share exchange agreement. Our management indicated that the
company was not for sale, but that they would convey
Intercells proposal to our board of directors.
That same day, we received an indication of interest from a
division of a global pharmaceutical company (Company A), which
proposed an acquisition of all of the outstanding shares of the
company in cash. During the next several days, our management
consulted with members of our board of directors individually.
Based on the input from those conversations, management conveyed
to Company A that the company was not for sale and, in any
event, had received an acquisition proposal from another party
at a significantly higher price.
On March 20, 2008, our board of directors met to review the
status of our recent discussions with potential commercial
partners. Mr. Erck updated the board of directors on the
proposals from Intercell and Company A, both of whom had
expressed interest in a business combination as opposed to a
partnering arrangement. At that time, the board of directors
confirmed that our company was not currently for sale, but that
management should explore the interest in potential business
combinations. The board of directors determined that pursuing
those discussions would inform the companys evaluation of
options, and enhance the companys alternatives, in the
event a partnering transaction could not be negotiated that
addressed the companys financial situation. Mr. Erck
then discussed recent negotiations for a potential partnering
transaction with a global pharmaceutical company (Company B),
including proposed upfront and milestone payments, and
cost-sharing and royalty arrangements for our programs. After a
detailed discussion, our board of directors charged management
with pursuing improved terms for a partnering transaction. In
light of the terms then proposed by Company B, the board of
directors also charged management with seeking to negotiate
improved proposals from the entities expressing interest in
potential business combination transactions.
On March 26, 2008, our board of directors met again to
review the status of partnering discussions, along with other
business development initiatives. During the meeting, the
directors discussed recent interactions with particular
commercial partners, including negotiations around partnering
the travelers diarrhea program and other programs with
Company B. The discussion then turned to the companies that had
expressed specific interest in a business combination with our
company. The discussion covered the interactions during the last
month, the status of discussions, and options going forward. The
directors and management also discussed the companys cash
position, which was expected to fund current operations through
late July or perhaps early August 2008. The board of directors
confirmed our companys strategic goal of remaining
independent, but charged management with learning about
potential alternatives and the possibility of pursuing one of
those alternatives; consideration of which would depend upon the
outcome of negotiations with potential commercial partners and
other developments.
15
On April 2, 2008, we received a second unsolicited offer
from Company A. At this time, Company A provided us with a
non-binding indication of interest proposing that Company A
would acquire, in a negotiated transaction, all of the
outstanding shares of Iomai for cash, at a price of $3.70 per
share that was an increase from Company As original prior
all cash offer of $2.70 per share.
During March and April 2008, we actively engaged in discussions
with Company B and another global pharmaceutical company
(Company C) to improve the terms of potential
collaborations involving our programs. We exchanged multiple
term sheets with Company B for various programs; however, in the
end, the proposals from Company B were modest and did not
provide sufficient funding to allow us to stay independent
without a dilutive financing. At the same time, we had multiple
discussions with Company C, seeking to have Company C provide
some level of up-front funding and coverage of our costs for
one, or more, of our influenza programs. Both Company B and
Company C rejected proposals to consider strategic alternatives
with us, such as a potential acquisition at or above price
levels then being proposed by Company A and Intercell.
On April 4, 2008, the board of directors met again to
review developments in discussions with possible commercial and
strategic partners that had occurred since the March 20,
2008 meeting of the board of directors, including Company B
possibly
re-emerging
as a potential serious candidate for a partnering arrangement.
Our board of directors discussed the existing partnering
proposals and the two business combination proposals. Our board
of directors considered alternative potential paths, as well as
uncertainties on various fronts, and judged that, at this time,
remaining independent remained the strategic goal, but
acknowledged that this conclusion would require reconsideration
if we were not able to obtain stronger partnering proposals from
Company B or Company C. Our board of directors then provided
management with guidance for responding to existing indications
of interests for potential partnering and strategic transactions.
From April 7 through April 10, 2008, members of Intercell,
including Dr. von Gabain, Intercells Chief Operating
Officer, Thomas Lingelbach, Dr. Kandera and other members
of its senior management team, along with their legal and
financial advisors, visited our offices to conduct due diligence
on our operations, finances and development programs.
On April 18, 2008, we received a third proposal from
Company A. Once again, Company A provided us with a non-binding
indication of interest. In this letter, Company A indicated that
it would acquire, in a negotiated transaction, all of the
outstanding shares of Iomai for cash, at a price of $5.15 per
share, which was an increase from Company As two prior all
cash offers.
On April 19, 2008, we communicated to Intercell that its
proposal was substantially below another indication of interest.
Intercell wanted to enter into exclusive negotiations, so
Mr. Erck, after conferring with members of our board of
directors, indicated that we would not enter into exclusive
negotiations unless Intercells offer were well above $6.00
per share. Intercell then proposed a transaction at $6.60 per
share in cash and Intercell common stock, but insisted that its
proposal was conditioned upon us entering into exclusive
negotiations with Intercell until July 21, 2008 and was
further conditioned on obtaining the agreement of certain of our
large stockholders to vote their shares of our common stock in
favor of the transaction. After receipt of this proposal, our
management contacted Company A to discuss its latest proposal in
light of Intercells proposal. Company A determined not to
submit a competing proposal at that time.
At a meeting on April 20, 2008, our board of directors met
to review developments in discussions with possible commercial
and strategic partners that had occurred since the April 4,
2008 meeting of the board, including substantial increases in
the prices proposed by potential business combination
counter-parties. Mr. Erck recounted the background to our
collaboration discussions and outlined the current status of
those discussions, focusing on the most recent proposal from
Company B, in which Company B had made only minimal changes to
the financial terms. Company B continued to propose a
cost-sharing arrangement for our various programs that provided
for modest upfront and milestone payments coupled with a royalty
rate payable to us that management believed did not adequately
reflect our contribution to the development of the programs.
The terms also included options for Company B to acquire
exclusive licenses to other potentially valuable programs on
similarly unfavorable terms. In the end, managements
assessment was that these proposals from Company B would cause
us to surrender substantial future revenues associated with our
programs and would not provide us with sufficient funding to
allow us to stay independent without a dilutive financing.
Mr. Erck noted managements disappointment with the
terms of this proposal due to Company B being unwilling to agree
to sufficient upfront funding and cost sharing arrangements and
outlined the potential risks and benefits of pursuing this
licensing transaction, with particular focus on the impact on
our cash needs and resources, including the fact that, at the
end of March 2008, we had approximately $9.8 million in
cash and about $1.4 million in receivables due from the
U.S. Department of Health and Human Services that we could
reasonably expect to receive over the next few months. Based on
our monthly expenses, we estimated that we would, absent changes
in operations, run out of cash in late July, or possibly early
August 2008.
Our directors and management also discussed several matters,
including the lack of progress in licensing negotiations with
Company C, which management had earlier thought might lead to a
significant licensing transaction.
16
Mr. Erck then reviewed with the board of directors the two
business combination inquiries and noted the following
developments. Intercell began with a $2.86 per share proposal,
and had, through a series of increasing offers, ultimately
increased its proposal to $6.60 per share. Company A had
initially indicated an interest at buying Iomai at $2.70 per
share, and had, through a series of increasing offers,
ultimately increased its proposal to $5.15 per share.
Mr. Erck also reviewed the considerable back and forth
discussions with Intercell and Company A and provided an update
as to the status of those discussions as of April 20, 2008.
He noted that the offer from Intercell would expire at midnight
on April 20, 2008 and that the offer from Company A would
expire at 5:00 p.m. on the same day. Mr. Erck also
noted that Intercell stated that it would only proceed, however,
if the company agreed to negotiate exclusively with them. The
board of directors discussed the terms being proposed by
Intercell and highlighted for management the boards views
on terms for a potential transaction. While the board of
directors considered many factors other than market prices, it
noted that the proposed $6.60 price represented a premium of
(1) 191% to the closing price of Iomai common stock on
April 18, 2008 and (2) 517% to the closing price of
Iomai common stock the day prior to Intercells first
acquisition proposal. Legal counsel then briefly described the
board of directors fiduciary duties in a sale of the
company.
At the end of this discussion, management recommended that the
board of directors approve entering into exclusive negotiations
with Intercell. Our directors expressed support for this
approach but determined that Intercells request for
exclusivity through July 21, 2008 represented too long a
period, particularly in light of the companys financial
position. Mr. Erck again noted the significant price
increases in the proposals over the last several weeks and his
perception of the risk of losing the Intercell proposal if we
were unwilling to commit to exclusive negotiations at that time.
Our board of directors then charged management to negotiate a
possible business combination transaction with Intercell,
including agreeing to exclusivity for a period of up to
30 days. Our directors insisted that any contract that was
negotiated contain a fiduciary out to enable us to
accept a superior bid, subject to paying a
break-up
fee.
During April 20 through April 23, 2008, we had further
discussions with Intercell regarding the requirements of
Intercells proposal that certain large stockholders agree
to exchange their Iomai common stock for Intercell common stock
at the $6.60 value and vote their shares of our common stock in
favor of the transactions, as well as the terms of the
exclusivity letter required by Intercell.
On April 23, 2008, we entered into an exclusivity agreement
with Intercell and commenced negotiating the merger agreement.
The exclusivity agreement provided for a period of exclusivity
from April 23, 2008 through the end of May 12, 2008,
during which time we agreed to negotiate exclusively with
Intercell regarding a possible business combination transaction.
Between April 23, 2008 and signing of the merger agreement,
Iomai and Intercell and their respective outside counsel spent
considerable time negotiating terms of the merger agreement and
exchanged multiple drafts of the merger agreement in the process
of these negotiations.
On April 24, 2008, Mr. Erck, Mr. Wilson,
Dr. Zettlmeissl and Dr. Lanthaler met with New
Enterprises Associates, one of our large stockholders and an
affiliate of M. James Barrett, our chairman of the board, to
discuss the proposed terms of the transactions. On
April 25, 2008, Dr. Zettlmeissl and Dr. Lanthaler
met with Essex Woodlands Health Ventures, another of our large
stockholders, to discuss the proposed terms of the transactions.
Based on these discussions, each of these stockholders
separately indicated that, if Intercell were able to negotiate a
definitive contract with us on the proposed terms, they likely
would be amenable to supporting the transaction, including by
entering into the voting agreement and participating in the
share exchange on negotiated terms. On May 8, 2008,
Dr. Zettlmeissl and Mr. Kandera spoke telephonically
with Technology Partners, ProQuest Investments and Gruber and
McBaine Capital Management, other of our large stockholders, to
discuss the proposed terms of the transactions. On May 9,
Mr. Kandera conducted
follow-up
conversations with these stockholders. Based on these
discussions, each of Technology Partners, ProQuest Investments
and Gruber and McBaine Capital Management agreed to enter into
the voting agreement, and Gruber and McBaine Capital Management
agreed to participate in the share exchange with Intercell.
Prior to a board meeting on May 7, 2008, the directors were
provided with the then current draft of the merger agreement. At
the meeting, Mr. Erck summarized the process of negotiation
with Intercell since the April 20, 2008 meeting of the
board of directors. Management noted key negotiating points,
including the terms of the proposed interim financing and the
structure of and payment options regarding the termination fee,
and the proposed resolution of those points. Outside counsel
outlined other proposed terms of the transaction and reminded
the directors of certain legal issues to consider in evaluating
the process and the potential merger agreement with Intercell.
The directors asked questions about the negotiations and
provided feedback to management on proceeding with the
negotiations. Mr. Wilson, noted that Cowen and Company, LLC
(Cowen) had commenced analysis of the consideration
to be received in the potential transaction but that we had not
yet formally engaged Cowen. After discussion, the board of
directors authorized management to engage Cowen to provide a
fairness opinion to our board of directors.
A special meeting of our board of directors was held
telephonically on May 12, 2008 to discuss the proposed
terms of the transaction, with representatives of Cowen present
for a portion of the meeting. In advance of this telephonic
meeting, a final draft of the merger agreement and related
materials were circulated to our board of directors, along with
materials from Cowen relating
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to their analysis. At the meeting, Cowen explained the analysis
they had performed and delivered to our board of directors an
oral opinion, which was subsequently confirmed in writing, that,
as of the date of its opinion and based upon and subject to the
factors and assumptions set forth in its written opinion dated
May 12, 2008, the $6.60 in cash per share of our common
stock to be received by the holders of our common stock (other
than Intercell and its affiliates and the holders of our common
stock party to the share exchange agreement) pursuant to the
merger agreement was fair, from a financial point of view, to
such holders. Our board of directors also engaged in a review of
the key provisions of the merger agreement and business
considerations related to the potential transaction. On the
basis of our activities to date and our prior efforts to explore
third party interest in potential transactions, and after
extensive discussion, our board of directors determined that the
price then being proposed by Intercell for each share of our
common stock outstanding was the best per share price then
obtainable.
After further discussion among the participants on the call of
various matters related to the potential transactions with
Intercell, our board of directors approved the merger, the
proposed merger agreement and the transactions contemplated by
the merger agreement (including the related share exchange
agreement). The merger agreement, among Intercell, Merger Sub
and us, and other transaction-related documents were signed and
such execution was announced on May 12, 2008 in a joint
press release.
Recommendation
of Our Board of Directors
Our board of directors, by unanimous vote and after careful
consideration, (i) has approved and adopted the merger
agreement, including the merger and the other transactions
contemplated thereby, (ii) has determined that the terms of
the merger and the other transactions contemplated by the merger
agreement are advisable, fair to and in the best interests of
Iomai and its stockholders, (iii) recommends that Iomai
stockholders vote FOR approval and adoption of the
merger agreement and (iv) recommends that Iomai
stockholders vote FOR the approval of any proposal
to adjourn or postpone the special meeting, if necessary or
appropriate, to solicit additional proxies in the event that
there are not sufficient votes in favor of approval and adoption
of the merger agreement at the time of the special meeting.
Reasons
for the Recommendation of our Board of Directors
In evaluating the merger, the merger agreement and the
transactions contemplated by the merger agreement (including the
related share exchange agreement), our board of directors
consulted with our management, legal counsel and Cowen and, in
reaching its recommendation, our board of directors considered a
number of factors, including the following:
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Our Operating and Financial Condition; Prospects of our
Company.
Our board of directors considered its
knowledge and familiarity with our business, financial condition
and results of operations, as well as our financial plan and
prospects if we were to remain an independent company and our
short-term and long-term capital needs. Our board of directors
discussed our current financial plan, including the risks
associated with achieving and executing upon our business plan.
Our board of directors considered, among other factors, that the
holders of our common stock would continue to be subject to the
risks and uncertainties of our financial plan and prospects
unless our company were acquired. These risks and uncertainties
included risks relating to our ability to successfully develop
and market our current product candidates, potential
difficulties or delays in clinical trials, obtaining regulatory
approval for our product candidates, regulatory developments
involving current and future products and our ability to raise
sufficient funds to finance our operations and the potentially
dilutive terms of any such financing, as well as the other risks
and uncertainties discussed in our filings with the SEC.
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Strategic Alternatives.
Our board of directors
considered trends in the industry in which our business operates
and the strategic alternatives available to us, including
remaining an independent public company or pursuing a
transaction with another company in the industry, as well as the
risks and uncertainties associated with such alternatives. Our
board of directors also considered the fact that entering into
any negotiations with a third party, including Company A, would
not necessarily lead to an equivalent or better offer, and would
be subject to significant due diligence and negotiation that
could lead to the loss of the potential offer from Intercell.
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Transaction Financial Terms; Premium to Market
Price.
Our board of directors considered the
relationship of the merger consideration to the historical
market prices of our common stock. In light of our activities to
date and our communications about a potential strategic
transaction with other companies determined to be most likely to
be interested in engaging in a possible strategic transaction
with us, our board of directors determined that the merger
consideration to be paid in the merger and the shares of
Intercell common stock to be exchanged for certain
stockholders shares of our common stock pursuant to the
share exchange agreement, represented the best per share
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consideration currently obtainable for our stockholders. In
making that determination, our board of directors considered
that the merger consideration, represents a premium of
approximately:
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(i) 147% to the closing price on
May 9, 2008, and
(ii) 358% to the average closing price over the
last 90 trading days.
Our board of directors also considered an analysis that the mean
and median twenty trading day purchase price premiums that had
been paid in 22 selected biotechnology transactions selected by
Cowen were 53.4% and 41.2%, respectively. These transactions
represented biotechnology industry cash acquisition transactions
since 2003 valued between $100 million and
$500 million.
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Ability to Respond to Unsolicited Takeover Proposals and
Terminate the Merger Agreement to Accept a Superior
Proposal
. Our board of directors considered the provisions
in the merger agreement that provide for the ability of our
company, subject to the terms and conditions of the merger
agreement, to provide information to and engage in negotiations
with third parties that make an unsolicited proposal, and,
subject to payment of a termination fee and the other conditions
set forth in the merger agreement, to enter into a transaction
with a party that makes a superior proposal.
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Termination Fee Provisions.
Our board of directors
considered the termination fee provisions of the merger
agreement and determined that they likely would not be a
significant deterrent to competing offers that might be superior
to the merger consideration and the shares of Intercell common
stock to be exchanged for certain stockholders shares of
our common stock pursuant to the share exchange agreement. Our
board of directors considered that the termination fee of
$6,000,000 was equal to approximately 3.2% of our equity value,
which our board of directors believed to be a reasonable fee to
be paid to Intercell should a superior offer be accepted by us.
Equity value was calculated based on our fully diluted shares
outstanding, accounted for using the treasury stock method,
using the $6.60 per share cash consideration to be received in
the merger by holders of our common stock. Our board of
directors also considered the ability under the merger agreement
to pay Intercell the termination fee in shares of our common
stock in certain circumstances.
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Conditions to the Consummation of the Merger; Likelihood of
Closing.
Our board of directors considered the
reasonable likelihood of the consummation of the transactions
contemplated by the merger agreement in light of the limited
conditions in the merger agreement to the obligations of
Intercell and Merger Sub to close the merger, including that the
consummation of the merger was not contingent on
Intercells ability to secure financing commitments.
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Type of Consideration; Share Exchange Agreement.
Our
board of directors considered the forms of consideration to be
paid to different holders of shares of our common stock, and the
structure of the transaction.
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Timing of Completion.
Our board of directors
considered the anticipated timing of consummation of the
transactions contemplated by the merger agreement. Our board of
directors considered that the potential for closing in a
relatively short timeframe could reduce the amount of time in
which our business would be subject to the potential uncertainty
of closing and related disruption.
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Results of Process Conducted.
Our board of directors
considered the results of the process that had been conducted by
our company, with the assistance of our management and advisors,
to solicit proposals for partnering transactions, including the
resulting discussions Company A, Company B and Company C, and
the solicitation of interest from several other companies
thought to potentially have an interest in a transaction with
us, and the fact that none of these entities proposed a superior
transaction. Our board of directors also considered the ability
of other bidders to make a proposal to acquire shares of our
common stock at a higher price per share than the merger
consideration or in an all-cash transaction. Based on the
results of our prior efforts and our extended arms-length
negotiations with Intercell, our board of directors believed
that the merger consideration and the exchange of certain
stockholders shares of our common stock for shares of
Intercell common stock represented the highest price per share
of the shares that was reasonably attainable.
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Opinion of Cowen and Company, LLC.
Our board of
directors considered the opinion of Cowen, dated May 12,
2008, and rendered to our board of directors, as to the effect
that, as of that date and based on and subject to various
assumptions, matters considered and limitations described in its
opinion, the $6.60 per share cash consideration to be received
in the merger by holders of our common stock (other than
Intercell, Merger Sub, stockholders who have
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entered into the share exchange agreement with Intercell, and
their respective affiliates) was fair, from a financial point of
view, to such stockholders.
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Appraisal Rights.
Our board of directors considered
the availability of appraisal rights with respect to the merger
for our stockholders who properly exercise their rights under
Delaware law, which would give such stockholders the ability to
seek and be paid a judicially determined appraisal of the
fair value of their shares of our common stock, upon
the completion of the merger.
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Interim Financing.
Our board of directors considered
Intercells agreement to provide us with up to $5,000,000
of interim financing in order to support our operations, should
the timing of the completion of the merger present issues in
relation to our financial condition.
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Our board of directors also considered a number of uncertainties
and risks in their deliberations concerning the transactions
contemplated by the merger agreement, including the following:
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Restrictions; Termination Fee.
Our board of
directors considered the restrictions that the merger agreement
impose on actively soliciting competing bids, and the insistence
of Intercell as a condition to its offer that we would be
obligated to pay a termination fee of $6,000,000 under certain
circumstances, and the potential effect of such termination fee
in deterring other potential acquirers from proposing
alternative transactions.
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Failure to Close.
Our board of directors considered
that Intercells and Merger Subs obligation to
consummate the merger was subject to conditions, and the
possibility that such conditions may not be satisfied, including
as a result of events outside of our control. Our board of
directors also considered the fact that, if the merger was not
completed, the markets perception of our continuing
business could potentially result in a loss of collaboration
partners and employees and that the trading price of our common
stock could be adversely affected. Our board of directors
considered that, in that event, it would be unlikely that
another party would be interested in acquiring us at a valuation
near $6.60 per share. Our board of directors also considered the
fact that, if the merger was not consummated, our directors,
officers and other employees will have expended extensive time
and effort and will have experienced significant distractions
from their work during the pendency of the transaction, and we
will have incurred significant transaction costs, attempting to
consummate the transaction.
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Public Announcement of the Merger.
Our board of
directors considered the effect of a public announcement of the
execution of the merger agreement and the merger contemplated
thereby, including effects on our operations, stock price and
employees and our ability to retain key management and personnel.
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Pre-Closing Covenants.
Our board of directors
considered that, under the terms of the merger agreement, we
agreed that we will carry on our business in the ordinary course
of business consistent with past practice and, subject to
specified exceptions, that we will not take a number of actions
related to the conduct of our business without the prior written
consent of Intercell. Our board of directors further considered
that these terms of the merger agreement may limit our ability
to pursue business opportunities that we might otherwise pursue.
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Share Exchange and Voting Agreements.
Our board of
directors noted that our executive officers and certain
stockholders of our company (including New Enterprise Associates
(and its related entities), which is an affiliate of M. James
Barrett, our chairman of the board), who together controlled
approximately 41% of the voting power of our outstanding shares
of common stock as of May 9, 2008, agreed to vote their
shares in support of the adoption of the merger agreement
pursuant to a voting agreement. Our board of directors noted
that certain stockholders of our company, who together
controlled approximately 51% of the voting power of our
outstanding shares of common stock as of May 9, 2008,
agreed to exchange their shares for shares of Intercell common
stock pursuant to a share exchange agreement. Our board of
directors also noted that the share exchange and voting
agreements terminate if the merger agreement is terminated in
accordance with its terms.
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Cash vs. Stock Consideration.
Our board of directors
considered the fact that, subsequent to completion of the
merger, we will no longer exist as an independent public company
and that the nature of the transaction would prevent our
stockholders who receive the merger consideration in cash from
being able to participate in any value creation that we could
generate going forward, as well as any future appreciation in
value of the combined company, unless they separately acquire
Intercell common stock. Our board of directors noted the
possibility that the market price of Intercell common stock
might rise following closing of the merger and that stockholders
receiving cash would not benefit from that appreciation, but the
board also noted that stockholders receiving cash could elect to
use that cash to purchase shares of Intercell common stock. Our
board also considered the risk that the value of Intercell
common stock
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would depreciate and that stockholder who received shares of
Intercell common stock in the share exchange may ultimately sell
those shares for net proceeds below $6.60. The directors also
considered that the stockholders that are party to the share
exchange agreement might prefer an all cash transaction.
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Tax Treatment.
Our board of directors considered the
fact that gains from this transaction would be taxable to our
stockholders for U.S. federal income tax purposes,
including stockholders exchanging shares of our common stock for
shares of Intercell common stock who would not receive cash to
cover applicable taxes. The board of directors noted that those
stockholders would have relatively liquid shares of Intercell
common stock.
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Potential Conflicts of Interest.
Our board of
directors was aware of the potential conflicts of interest
between our company, on the one hand, and certain of our
executive officers and directors, on the other hand, as a result
of the transactions contemplated by the merger agreement. These
potential conflicts of interest included the potential severance
payments to our executive officers, the cash payments to be
received for options held by our directors and executive
officers and, in the case of Mr. Barrett, the cash payments to
be received for the outstanding warrants held by New Enterprise
Associates. See Interests of Our Directors and
Executive Officers in the Merger beginning on page 29.
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Our board of directors believed that, overall, the potential
benefits of the merger to our stockholders outweigh the risks of
the merger and provide the maximum value to our stockholders. In
analyzing the proposed merger, our board of directors and our
management were assisted and advised by legal counsel.
The foregoing discussion covers all material factors considered
by our board of directors. In light of the variety of factors
considered in connection with its evaluation of the merger, the
merger agreement and the transactions contemplated by the merger
agreement, our board of directors did not find it practicable
to, and did not, quantify or otherwise assign relative weights
to the specific factors considered in reaching its
determinations and recommendations. Moreover, each member of our
board of directors applied his own personal business judgment to
the process and may have given different weight to different
factors.
Opinion
of Cowen and Company, LLC
Pursuant to an engagement letter dated May 8, 2008, we
retained Cowen to render an opinion to the board of directors of
Iomai as to the fairness, from a financial point of view, to the
holders of Iomai common stock, other than Intercell and its
affiliates and the stockholders party to the share exchange
agreement, of the consideration to be received in the merger.
On May 12, 2008, Cowen delivered certain of its written
analyses and its oral opinion to our board of directors,
subsequently confirmed in writing as of the same date, to the
effect that and subject to the various assumptions set forth
therein, as of May 12, 2008, the consideration to be paid
in the merger was fair, from a financial point of view, to our
stockholders, other than Intercell and its affiliates and the
stockholders party to the share exchange agreement. There have
been no material changes in our operations, performance or in
any of the projections or assumptions upon which Cowen based its
opinion since the delivery of the opinion, and we do not
anticipate any such material changes.
The full text of the
written opinion of Cowen, dated May 12, 2008, is attached
hereto as Annex D and is incorporated by reference. Holders
of our common stock are urged to read the opinion in its
entirety for the assumptions made, procedures followed, other
matters considered and limits of the review by Cowen. The
summary of the written opinion of Cowen set forth herein is
qualified in its entirety by reference to the full text of such
opinion. Cowens analyses and opinion were prepared for and
addressed to our board of directors and are directed only to the
fairness, from a financial point of view, of the consideration
to be paid in the merger, and do not constitute an opinion as to
the merits of the merger or a recommendation to any stockholder
as to how to vote on the proposed merger or to take any other
action in connection with the merger or otherwise. The
consideration to be received in the merger was determined
through negotiations between us and Intercell and not pursuant
to recommendations of Cowen. Cowen has consented to the
inclusion of its written opinion in this proxy statement.
In arriving at its opinion, Cowen reviewed and considered such
financial and other matters as it deemed relevant, including,
among other things:
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a draft of the merger agreement dated May 12, 2008;
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certain publicly available financial and other information for
our company, and certain other relevant financial and operating
data furnished to Cowen by our management;
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certain internal financial analyses, financial forecasts,
reports and other information concerning our company (the
Iomai Forecasts) prepared by our management;
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Reuters estimates (Reuters Estimates) and financial
projections in Wall Street analyst reports (Wall Street
Projections) for our company;
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discussions Cowen had with certain members of our management
concerning the historical and current business operations,
financial conditions and prospects of our company and such other
matters Cowen deemed relevant;
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the reported price and trading history of the shares of our
common stock as compared to the reported price and trading
histories of certain publicly traded companies Cowen deemed
relevant;
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certain financial terms of the merger as compared to the
financial terms of certain selected business combinations Cowen
deemed relevant;
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based on the Iomai Forecasts and Wall Street Projections, the
cash flows generated by our company on a stand-alone basis to
determine the present value of the discounted cash
flows; and
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such other information, financial studies, analyses and
investigations and such other factors that Cowen deemed relevant
for the purposes of its opinion.
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In conducting its review and arriving at its opinion, Cowen,
with our consent, assumed and relied, without independent
investigation, upon the accuracy and completeness of all
financial and other information provided to it by us or which
was publicly available or otherwise reviewed by Cowen. Cowen did
not undertake any responsibility for the accuracy, completeness
or reasonableness of, or independently verify, this information.
Cowen relied upon, without independent verification, the
assessment of our management as to existing products and
services of our company and the validity of, and risks
associated with, the future products and services of our
company. In addition, Cowen did not conduct any physical
inspection of the properties or facilities of our company. Cowen
further relied upon the assurance of our management that they
were unaware of any facts that would make the information
provided to Cowen incomplete or misleading in any respect.
Cowen, with our consent, assumed that the financial forecasts
provided to Cowen were reasonably prepared by our management,
and reflected the best available estimates and good faith
judgments of our management as to the future performance of our
company. Our management confirmed to Cowen, and Cowen assumed,
with our consent, that the Iomai Forecasts and the Wall Street
Projections utilized in Cowens analyses, provided a
reasonable basis for its opinion.
Cowen did not make or obtain any independent evaluations,
valuations or appraisals of the assets or liabilities of our
company, nor was Cowen furnished with these materials.
Cowens opinion does not address, and Cowen expresses no
views with regard to, any legal matters. Cowens services
to our company in connection with the merger were comprised
solely of rendering an opinion from a financial point of view of
the consideration to be paid in the merger. Cowen expresses no
view as to any other aspect or implication of the merger or any
other agreement, arrangement or understanding entered into in
connection with the merger or otherwise. Without limiting the
generality of the foregoing, Cowen does not express any view
with respect to the share exchange agreement or any of the
transactions contemplated thereby. Cowens opinion was
necessarily based upon economic and market conditions and other
circumstances as they existed and could be evaluated by Cowen on
the date of its opinion. It should be understood that although
subsequent developments may affect its opinion, Cowen does not
have any obligation to update, revise or reaffirm its opinion
and Cowen expressly disclaims any responsibility to do so.
Additionally, Cowen was not engaged to be involved in any
determinations of our board of directors or our management to
pursue strategic alternatives or in the negotiation of any of
the terms of the merger. Cowen was not authorized or requested
to, and did not, solicit alternative offers for our company or
our assets, nor did Cowen investigate any other alternative
transactions that may be available to us.
In rendering its opinion, Cowen assumed, in all respects
material to its analysis, that the representations and
warranties of each party contained in the merger agreement are
true and correct, that each party will perform all of the
covenants and agreements required to be performed by it under
the merger agreement and that all conditions to the consummation
of the merger will be satisfied without waiver thereof. Cowen
assumed that the final form of the merger agreement would be
substantially similar to the last draft received by Cowen prior
to rendering its opinion. Cowen also assumed that all
governmental, regulatory and other consents and approvals
contemplated by the merger agreement would be obtained and that,
in the course of obtaining any of those consents, no
restrictions will be imposed or waivers made that would have an
adverse effect on the contemplated benefits of the merger.
Cowens opinion does not constitute a recommendation to any
Iomai stockholder as to how the stockholder should vote on the
proposed merger. Cowens opinion does not imply any
conclusion as to the likely trading range for Intercell common
stock following consummation of the merger or otherwise, which
may vary depending on numerous factors that generally influence
the price of securities. Cowens opinion is limited to the
fairness, from a financial point of view, of the consideration
to be paid in the merger. Cowen expresses no opinion as to the
underlying business reasons that may support the decision of the
our board of
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directors to approve, or our decision to consummate, the merger
or the relative merits of the merger as compared to other
business strategies or transactions that might be available to
our company. Cowens opinion does not address the fairness
of the amount or the nature of any compensation to any of our
officers, directors or employees, or any class of such persons,
relative to the consideration to be offered to our stockholders.
The following is a summary of the principal financial analyses
performed by Cowen to arrive at its opinion. Some of the
summaries of financial analyses include information presented in
tabular format. In order to fully understand the financial
analyses, the tables must be read together with the text of each
summary. The tables alone do not constitute a complete
description of the financial analyses. Considering the data set
forth in the tables without considering the full narrative
description of the financial analyses, including the
methodologies and assumptions set forth herein underlying the
analyses, could create a misleading or incomplete view of the
financial analyses. Cowen performed certain procedures,
including each of the financial analyses described below, and
reviewed with our management the assumptions on which such
analyses were based and other factors, including the historical
and projected financial results of our company. No limitations
were imposed by our board of directors with respect to the
investigations made or procedures followed by Cowen in rendering
its opinion.
Analysis of Selected Publicly Traded Companies.
To
provide contextual data and comparative market information,
Cowen compared selected historical operating and financial data
and ratios for our company to the corresponding financial data
and ratios of certain other companies (the Selected
Companies) whose securities are publicly traded and which
Cowen believes have operating, market valuation and trading
valuations similar to what might be expected of our company.
These Selected Companies were:
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Development stage infectious disease vaccine companies: Optimer
Pharmaceuticals Inc., Novavax Inc., Vical Inc.
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Development stage infectious disease companies: Pharmasset Inc.,
Ardea Biosciences Inc., Achillion Pharmaceuticals Inc., Anadys
Pharmaceuticals Inc., Replidyne Inc., Genelabs Technologies
Inc., Panacos Pharmaceuticals Inc., Inhibitex Inc.
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The following tables present the market capitalization of common
stock (referred to as the equity value) and the
equity value plus debt and less cash (referred to as the
enterprise value) of the Selected Companies.
Selected
Development Stage Infectious Disease Vaccine Companies
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Company
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Equity Value
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Enterprise Value
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($ in Millions)
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Optimer Pharmaceuticals Inc.
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$200.0
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$149.0
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Novavax Inc.
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169.7
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150.5
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Vical Inc.
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129.4
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69.2
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High
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$200.0
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$150.5
|
|
Mean
|
|
|
166.4
|
|
|
|
122.9
|
|
Median
|
|
|
169.7
|
|
|
|
149.0
|
|
Low
|
|
|
129.4
|
|
|
|
69.2
|
|
23
Selected
Development Stage Infectious Disease Companies
|
|
|
|
|
|
|
|
|
Company
|
|
Equity Value
|
|
Enterprise Value
|
|
|
($ in Millions)
|
|
Pharmasset Inc.
|
|
|
$344.2
|
|
|
|
$291.1
|
|
Ardea Biosciences Inc.
|
|
|
190.5
|
|
|
|
134.3
|
|
Achillion Pharmaceuticals Inc.
|
|
|
60.5
|
|
|
|
41.7
|
|
Anadys Pharmaceuticals Inc.
|
|
|
60.0
|
|
|
|
11.2
|
|
Genelabs Technologies Inc.
|
|
|
40.7
|
|
|
|
3.0
|
|
Replidyne Inc.
|
|
|
37.4
|
|
|
|
(40.8)
|
|
Panacos Pharmaceuticals Inc.
|
|
|
28.7
|
|
|
|
4.0
|
|
Inhibitex Inc.
|
|
|
28.3
|
|
|
|
(16.5)
|
|
High
|
|
|
$344.2
|
|
|
|
$291.1
|
|
Mean
|
|
|
98.8
|
|
|
|
53.5
|
|
Median
|
|
|
50.3
|
|
|
|
7.6
|
|
Low
|
|
|
28.3
|
|
|
|
(40.8)
|
|
The following table presents the range of the per share equity
values and the range of the per share equity values based on
enterprise values for our company implied by this analysis. The
implied per share equity value range was calculated by dividing
the mean and median equity values of the Selected Companies by
the fully diluted shares outstanding of our company (determined
pursuant to the treasury stock method). The implied per share
equity value range based on enterprise value was calculated by
subtracting the companys net debt from the mean and median
enterprise values of the Selected Companies and dividing that
result by the fully diluted shares outstanding of our company
(determined pursuant to the treasury stock method). The
information in the table is based on the closing stock prices of
the Selected Companies on May 9, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Iomai per Share Equity Value
|
|
|
|
|
Equity
|
|
Enterprise
|
|
Iomai per Share
|
|
|
Value
|
|
Value
|
|
Transaction Equity
|
Valuation Methodology
|
|
Basis
|
|
Basis
|
|
Value
|
|
Development Stage Infectious Disease Vaccine Companies
|
|
$
|
5.91-$6.01
|
|
|
$
|
4.89-$5.74
|
|
|
$
|
6.60
|
|
Development Stage Infectious Disease Companies
|
|
$
|
1.88-$3.61
|
|
|
$
|
0.77-$2.43
|
|
|
$
|
6.60
|
|
Although the Selected Companies were used for comparison
purposes, none of those companies is directly comparable to our
company. Accordingly, an analysis of the results of such a
comparison is not purely mathematical, but instead involves
complex considerations and judgments concerning differences in
historical and projected financial and operating characteristics
of the Selected Companies and other factors that could affect
the public trading value of the Selected Companies or our
company to which they are being compared.
Analysis of Selected Transactions.
Cowen reviewed
the financial terms, to the extent publicly available, of 33
transactions (the Phase II Transactions)
involving the acquisition of companies with lead product
candidates in Phase II development, which were announced or
completed since 1999, and in which the deal value exceeded
$20.0 million.
24
The following table presents the equity value and enterprise
value for each of the Phase II Transactions.
Selected
Phase II Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
Announced
|
|
Target
|
|
Acquiror
|
|
Equity Value
|
|
Enterprise Value
|
|
|
|
|
|
|
($ in Millions)
|
|
03/20/08
|
|
Avecia Biologics Limited (Biodefense Vaccine Business)
|
|
Pharmathene, Inc.
|
|
$
|
20.0
|
|
|
$
|
20.0
|
|
02/25/08
|
|
Proprius Pharmaceuticals, Inc.
|
|
Cypress Biosciences, Inc.
|
|
|
37.5
|
|
|
|
37.5
|
|
02/06/08
|
|
Dynogen Pharmaceuticals Inc.
|
|
Apex Bioventures Acquisition Corp.
|
|
|
98.0
|
|
|
|
98.0
|
|
12/05/07
|
|
Ester Neurosciences
|
|
Amarin Corp.
|
|
|
15.0
|
|
|
|
15.0
|
|
10/22/07
|
|
Celldex Therapeutics, Inc.
|
|
AVANT Immunotherapeutics, Inc.
|
|
|
115.0
|
|
|
|
115.0
|
|
10/15/07
|
|
Biolipox AB
|
|
Orexo AB
|
|
|
133.7
|
|
|
|
133.7
|
|
07/25/07
|
|
Systems Medicine, Inc.
|
|
Cell Therapeutics, Inc.
|
|
|
20.0
|
|
|
|
20.0
|
|
04/03/07
|
|
Hypnion, Inc.
|
|
Eli Lilly & Co.
|
|
|
315.0
|
|
|
|
315.0
|
|
03/12/07
|
|
Oxxon Therapeutics Ltd.
|
|
Oxford BioMedica PLC
|
|
|
30.6
|
|
|
|
24.8
|
|
01/31/07
|
|
Arrow Therapeutics
|
|
AstraZeneca PLC
|
|
|
150.0
|
|
|
|
150.0
|
|
11/15/06
|
|
Cabrellis Pharmaceuticals Corp.
|
|
Pharmion Corp.
|
|
|
59.0
|
|
|
|
55.0
|
|
11/06/06
|
|
Pipex Therapeutics
|
|
Sheffield Pharmaceuticals
|
|
|
21.7
|
|
|
|
23.5
|
|
10/12/06
|
|
RxKinetix
|
|
Endo Pharmaceuticals
|
|
|
20.0
|
|
|
|
20.0
|
|
06/08/06
|
|
TorreyPines Therapeutics
|
|
Axonyx
|
|
|
59.3
|
|
|
|
35.0
|
|
03/15/06
|
|
Vela Pharmaceuticals Inc.
|
|
Pharmos Corporation
|
|
|
29.7
|
|
|
|
29.7
|
|
01/09/06
|
|
Micromet AG
|
|
CancerVax Corp.
|
|
|
86.3
|
|
|
|
86.3
|
|
12/22/05
|
|
Miikana Therapeutics, Inc.
|
|
EntreMed, Inc.
|
|
|
21.2
|
|
|
|
21.2
|
|
12/15/05
|
|
Cyclacel Ltd.
|
|
Xcyte Therapies, Inc.
|
|
|
25.2
|
|
|
|
25.2
|
|
07/06/05
|
|
Ionix Pharmaceuticals Limited
|
|
Vernalis plc
|
|
|
22.0
|
|
|
|
22.0
|
|
05/12/05
|
|
Salmedix, Inc.
|
|
Cephalon, Inc.
|
|
|
160.0
|
|
|
|
135.0
|
|
01/27/05
|
|
BioPartners Ltd.
|
|
Minster Pharmaceuticals, Inc.
|
|
|
117.6
|
|
|
|
117.6
|
|
09/01/04
|
|
Zycos, Inc.
|
|
MGI Pharma, Inc.
|
|
|
50.0
|
|
|
|
50.0
|
|
09/01/04
|
|
Aesgen, Inc.
|
|
MGI Pharma, Inc.
|
|
|
32.0
|
|
|
|
32.0
|
|
04/29/04
|
|
Chrysalis BioTechnology, Inc.
|
|
OrthoLogic Corp.
|
|
|
27.5
|
|
|
|
27.5
|
|
10/14/03
|
|
Oculex Pharmaceuticals, Inc.
|
|
Allergan, Inc.
|
|
|
230.0
|
|
|
|
230.0
|
|
09/30/03
|
|
Axovan AG
|
|
Actelion Ltd.
|
|
|
45.4
|
|
|
|
45.4
|
|
02/25/03
|
|
Corvas International, Inc.
|
|
Dendreon Corp.
|
|
|
72.9
|
|
|
|
(9.9
|
)
|
12/31/02
|
|
Zentaris AG
|
|
Aeterna Laboratories, Inc.
|
|
|
51.6
|
|
|
|
51.6
|
|
01/07/02
|
|
Matrix Pharmaceutical, Inc.
|
|
Chiron Corp.
|
|
|
58.7
|
|
|
|
37.0
|
|
11/26/01
|
|
Gilead Sciences, Inc. (Oncology Assets)
|
|
OSI Pharmaceuticals, Inc.
|
|
|
170.0
|
|
|
|
170.0
|
|
02/19/01
|
|
Cantab Pharmaceutials plc
|
|
Xenova Group plc
|
|
|
90.1
|
|
|
|
73.1
|
|
12/01/99
|
|
Celtrix Pharmaceuticals, Inc.
|
|
INSMED Pharmaceuticals, Inc.
|
|
|
43.6
|
|
|
|
46.1
|
|
10/14/99
|
|
LeukoSite, Inc.
|
|
Millennium Pharmaceuticals, Inc,
|
|
|
572.9
|
|
|
|
551.6
|
|
High
|
|
|
|
|
|
$
|
572.9
|
|
|
$
|
551.6
|
|
Mean
|
|
|
|
|
|
|
91.0
|
|
|
|
85.0
|
|
Median
|
|
|
|
|
|
|
51.6
|
|
|
|
45.4
|
|
Low
|
|
|
|
|
|
|
15.0
|
|
|
|
(9.9
|
)
|
Cowen also reviewed the financial terms, to the extent publicly
available, of 10 transactions (the Infectious Disease
Transactions) involving the acquisition of companies in
the infectious disease industry, which were announced or
completed since 1999, and in which the targets lead
product candidate was not yet marketed and in which the deal
value exceeded $20.0 million.
25
The following table presents the equity value and enterprise
value for each of the Infectious Disease Transactions.
Selected
Development Stage Infectious Disease Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
Announced
|
|
Target
|
|
Acquiror
|
|
Equity Value
|
|
Enterprise Value
|
|
|
|
|
|
|
($ in Millions)
|
|
03/20/08
|
|
Avecia Biologics Limited (Biodefense Vaccine Business)
|
|
Pharmathene, Inc.
|
|
$
|
20.0
|
|
|
$
|
20.0
|
|
03/12/07
|
|
Oxxon Therapeutics Ltd
|
|
Oxford BioMedica PLC
|
|
|
30.6
|
|
|
|
24.8
|
|
01/31/07
|
|
Arrow Therapeutics
|
|
AstraZeneca PLC
|
|
|
150.0
|
|
|
|
150.0
|
|
07/19/06
|
|
Corus Pharma
|
|
Gilead Sciences
|
|
|
365.0
|
|
|
|
365.0
|
|
04/19/05
|
|
Peninsula Pharmaceuticals, Inc.
|
|
Johnson & Johnson
|
|
|
245.0
|
|
|
|
245.0
|
|
06/03/04
|
|
Panacos Pharmaceuticals, Inc.
|
|
V.I. Technologies, Inc.
|
|
|
27.0
|
|
|
|
27.0
|
|
03/21/03
|
|
RiboTargets Ltd.
|
|
British Biotech plc
|
|
|
40.9
|
|
|
|
30.3
|
|
07/31/02
|
|
Biosearch Italia SpA
|
|
Versicor, Inc.
|
|
|
260.7
|
|
|
|
151.5
|
|
03/22/02
|
|
Tibotec-Virco NV
|
|
Johnson & Johnson
|
|
|
320.0
|
|
|
|
320.0
|
|
02/19/01
|
|
Cantab Pharmaceuticals plc
|
|
Xenova Group plc
|
|
|
90.1
|
|
|
|
73.1
|
|
High
|
|
|
|
|
|
$
|
365.0
|
|
|
$
|
365.0
|
|
Mean
|
|
|
|
|
|
|
154.9
|
|
|
|
140.7
|
|
Median
|
|
|
|
|
|
|
120.1
|
|
|
|
111.6
|
|
Low
|
|
|
|
|
|
|
20.0
|
|
|
|
20.0
|
|
The following table presents the range of the per share equity
values and the range of the per share equity values based on
enterprise values for our company implied by this analysis. The
implied per share equity value range was calculated by dividing
the mean and median equity values of the Phase II
Transactions and Infectious Disease Transactions by the fully
diluted shares outstanding of our company (determined pursuant
to the treasury stock method). The implied per share equity
value range based on enterprise value was calculated by
subtracting the companys net debt from the mean and median
enterprise values of the Phase II Transactions and
Infectious Disease Transactions and dividing that result by the
fully diluted shares outstanding of our company (determined
pursuant to the treasury stock method).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Iomai per Share Equity Value
|
|
|
|
|
|
|
Equity
|
|
|
Enterprise
|
|
|
Iomai per Share
|
|
Valuation
|
|
Value
|
|
|
Value
|
|
|
Transaction Equity
|
|
Methodology
|
|
Basis
|
|
|
Basis
|
|
|
Value
|
|
|
Comparison to Phase II Transactions
|
|
$
|
1.93-$3.33
|
|
|
$
|
2.14-$3.55
|
|
|
$
|
6.60
|
|
Comparison to Infectious Disease Transactions
|
|
$
|
4.37-$5.55
|
|
|
$
|
4.49-$5.49
|
|
|
$
|
6.60
|
|
Although the Phase II Transactions and Infectious Disease
Transactions were used for comparison purposes, none of those
transactions is directly comparable to the merger, and none of
the companies in those transactions is directly comparable to
our company. Accordingly, an analysis of the results of such a
comparison is not purely mathematical, but instead involves
complex considerations and judgments concerning differences in
historical and projected financial and operating characteristics
of the companies involved and other factors that could affect
the acquisition value of such companies or our company to which
they are being compared.
Discounted Cash Flow Analysis.
Cowen estimated a
range of values for our common stock based upon the discounted
present value of the projected cash flows of our company
described in the Iomai Forecasts provided by our management and
the Wall Street Projections, for the fiscal years ended 2008
through 2012, and of the terminal value of our company at 2012,
based upon multiples of revenue. Cash flow was calculated by
taking projected EBIT and subtracting from this amount capital
expenditures, changes in working capital and changes in other
assets and liabilities and adding depreciation and amortization.
In performing this analysis, Cowen utilized discount rates
ranging from 25.0% to 35.0%, which were selected based on the
estimated industry weighted average cost of capital and clinical
and regulatory risk inherent in our pipeline. Cowen utilized
terminal multiples of revenue ranging from 2.5 times to 3.0
times, these multiples representing the general range of
multiples of revenue for selected precedent specialty
pharmaceutical transactions.
26
Utilizing this methodology, the per share equity value of Iomai
ranged from:
|
|
|
|
|
$5.00 to $7.85 per share, based on the Iomai Forecasts; and
|
|
|
|
$0.54 to $1.74 per share, based on the Wall Street Projections.
|
The following table presents the mean revenue estimates and mean
operating income (loss) estimates from the Wall Street
Projections used in this analysis for the fiscal years ended
2008 through 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected Financials
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
Wall Street Projections
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenues
|
|
$
|
16.0
|
|
|
$
|
24.0
|
|
|
$
|
35.5
|
|
|
$
|
77.2
|
|
|
$
|
92.3
|
|
Operating Income (Loss)
|
|
|
(29.8
|
)
|
|
|
(28.9
|
)
|
|
|
(26.8
|
)
|
|
|
(12.8
|
)
|
|
|
(6.0
|
)
|
The Wall Street Projections were not provided by us and are not
adopted by us as our projections. Our management provided Cowen
with its own Iomai Forecasts, which were used by Cowen and are
summarized in a table on pages 54-55.
Analysis of Premiums Paid in Selected
Transactions.
Cowen reviewed the premium of the offer
price over the trading prices one trading day and 20 trading
days prior to the announcement date of 22 selected transactions
in the biotechnology industry announced since 2003, in which the
target was a publicly traded company at the time of announcement
and the consideration to be received was comprised solely of
cash.
The following table presents the 22 selected transactions and
the one trading day premium and 20 trading day premium for each
selected transaction.
Selected
$100-$500 Million Biotech Transactions Since 2003Cash
Only
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium
|
|
|
|
|
|
|
|
|
|
|
|
1 Trading Day
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior to
|
|
|
20 Trading Days
|
|
Date
|
|
|
|
|
|
|
Value of
|
|
|
Announcement
|
|
|
Prior to
|
|
Announced
|
|
|
Target Name
|
|
Acquiror Name
|
|
Transaction
|
|
|
Date
|
|
|
Announcement Date
|
|
|
|
|
|
|
|
|
($ in Millions)
|
|
|
|
|
|
|
|
|
|
3/31/2008
|
|
|
Bentley Pharmaceuticals Inc
|
|
Teva Pharma Inds Ltd
|
|
$
|
356.5
|
|
|
|
9.3
|
|
|
|
1.6
|
|
|
2/26/2008
|
|
|
CollaGenex Pharmaceuticals Inc
|
|
Galderma Laboratories LP
|
|
|
419.6
|
|
|
|
29.7
|
|
|
|
38.8
|
|
|
2/20/2008
|
|
|
Encysive Pharmaceuticals Inc
|
|
Pfizer Inc
|
|
|
186.4
|
|
|
|
117.6
|
|
|
|
261.5
|
|
|
12/26/2007
|
|
|
Nuclear Solutions Inc
|
|
Inter-Americas Inc
|
|
|
102.9
|
|
|
|
134.4
|
|
|
|
177.8
|
|
|
10/30/2007
|
|
|
Bradley Pharmaceuticals Inc
|
|
Nycomed US Inc
|
|
|
349.4
|
|
|
|
25.0
|
|
|
|
8.9
|
|
|
10/1/2007
|
|
|
ViaCell Inc
|
|
PerkinElmer Inc
|
|
|
301.3
|
|
|
|
53.6
|
|
|
|
68.6
|
|
|
4/6/2007
|
|
|
Stratagene Corp
|
|
Agilent Technologies Inc
|
|
|
252.3
|
|
|
|
28.6
|
|
|
|
26.5
|
|
|
2/12/2007
|
|
|
Adeza Biomedical Corp
|
|
Cytyc Corp
|
|
|
445.9
|
|
|
|
54.5
|
|
|
|
65.2
|
|
|
11/24/2006
|
|
|
Inyx Inc
|
|
Investor Group
|
|
|
159.9
|
|
|
|
36.8
|
|
|
|
24.4
|
|
|
11/20/2006
|
|
|
CoTherix Inc
|
|
Actelion Ltd
|
|
|
417.6
|
|
|
|
20.5
|
|
|
|
77.6
|
|
|
11/15/2006
|
|
|
Embrex Inc
|
|
Pfizer Animal Health
|
|
|
150.4
|
|
|
|
42.6
|
|
|
|
43.6
|
|
|
8/14/2006
|
|
|
Tripath Imaging Inc
|
|
Becton Dickinson & Co
|
|
|
387.6
|
|
|
|
71.6
|
|
|
|
54.7
|
|
|
7/26/2005
|
|
|
BioSource International Inc
|
|
Invitrogen Corp
|
|
|
138.2
|
|
|
|
78.1
|
|
|
|
84.4
|
|
|
4/29/2005
|
|
|
Corixa Corp
|
|
GlaxoSmithKline PLC
|
|
|
300.8
|
|
|
|
47.7
|
|
|
|
51.7
|
|
|
4/19/2005
|
|
|
Orphan Medical Inc
|
|
Jazz Pharmaceuticals Inc
|
|
|
140.6
|
|
|
|
25.7
|
|
|
|
14.9
|
|
|
1/27/2005
|
|
|
Genencor International Inc
|
|
Danisco AS
|
|
|
487.2
|
|
|
|
(3.5
|
)
|
|
|
(9.8
|
)
|
|
1/27/2005
|
|
|
Genencor International Inc
|
|
Danisco AS
|
|
|
183.8
|
|
|
|
23.9
|
|
|
|
15.8
|
|
|
7/2/2004
|
|
|
Del Laboratories Inc
|
|
Kelso & Co
|
|
|
400.8
|
|
|
|
14.0
|
|
|
|
19.1
|
|
|
3/8/2004
|
|
|
Interpore International Inc
|
|
Biomet Inc
|
|
|
281.8
|
|
|
|
17.5
|
|
|
|
23.9
|
|
|
2/4/2004
|
|
|
Lannett Co Inc
|
|
Perrigo Co
|
|
|
197.8
|
|
|
|
(16.8
|
)
|
|
|
(13.5
|
)
|
|
6/2/2003
|
|
|
Ribapharm Inc
|
|
ICN Pharmaceuticals Inc
|
|
|
187.3
|
|
|
|
23.0
|
|
|
|
50.2
|
|
|
1/16/2003
|
|
|
3-Dimensional
Pharmaceuticals
|
|
Johnson & Johnson Inc
|
|
|
133.9
|
|
|
|
89.4
|
|
|
|
88.2
|
|
|
|
|
|
|
|
|
|
|
Median
|
|
|
|
29.1
|
|
|
|
41.2
|
|
|
|
|
|
|
|
|
|
|
Mean
|
|
|
|
42.0
|
|
|
|
53.4
|
|
27
Cowen then applied these premiums to the our common stock prices
one trading day and twenty trading days prior to May 9,
2008.
Using this methodology, the implied equity value per share of
our common stock ranged from:
|
|
|
|
|
$3.32 (median) to $3.65 (mean) per share, based on the one day
median and mean premiums of 29.1% and 42.0%, respectively, and
stock price; and
|
|
|
|
$3.39 (median) to $3.68 (mean) per share, based on the 20
trading day median and mean premiums of 41.2% and 53.4%,
respectively, and stock price.
|
The summary set forth above does not purport to be a complete
description of all the analyses performed by Cowen. The
preparation of a fairness opinion involves various
determinations as to the most appropriate and relevant methods
of financial analyses and the application of these methods to
the particular circumstances and, therefore, such an opinion is
not readily susceptible to partial analysis or summary
description. Cowen did not attribute any particular weight to
any analysis or factor considered by it, but rather made
qualitative judgments as to the significance and relevance of
each analysis and factor. Accordingly, notwithstanding the
separate factors summarized above, Cowen believes, and has
advised our board of directors, that its analyses must be
considered as a whole and that selecting portions of its
analyses and the factors considered by it, without considering
all analyses and factors, could create an incomplete view of the
process underlying its opinion. In performing its analyses,
Cowen made numerous assumptions with respect to industry
performance, business and economic conditions and other matters,
many of which are beyond our control. These analyses performed
by Cowen are not necessarily indicative of actual values or
future results, which may be significantly more or less
favorable than suggested by such analyses. In addition, analyses
relating to the value of businesses do not purport to be
appraisals or to reflect the prices at which businesses or
securities may actually be sold. Accordingly, such analyses and
estimates are inherently subject to uncertainty, being based
upon numerous factors or events beyond the control of the
parties or their respective advisors. None of Iomai, Cowen or
any other person assumes responsibility if future results are
materially different from those projected. The analyses supplied
by Cowen and its opinion were among several factors taken into
consideration by our board of directors in making its decision
to enter into the merger agreement and should not be considered
as determinative of such decision.
Cowen was selected by our board of directors to render an
opinion to our board of directors because Cowen is a nationally
recognized investment banking firm and because, as part of its
investment banking business, Cowen is continually engaged in the
valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private
placements and valuations for corporate and other purposes.
Cowen and its affiliates in the ordinary course of business have
from time to time provided, and in the future may continue to
provide, commercial and investment banking services to us,
including serving as a financial advisor on potential
acquisitions and as an underwriter on equity offerings, and have
received and may in the future receive fees for the rendering of
such services. In particular, in February 2006, Cowen acted as
co-lead manager of our initial public offering and, in March
2007, Cowen acted as exclusive placement agent of our private
placement. In the past two years preceding the date of its
opinion, Cowen received $1,448,901 for its services related to
our March 2007 private placement. The issuance of Cowens
opinion was approved by Cowens fairness opinion review
committee.
Pursuant to the Cowen engagement letter, we agreed to pay
$500,000 to Cowen for rendering its opinion, payable upon the
delivery of Cowens opinion. Additionally, we have agreed
to reimburse Cowen for its out-of-pocket expenses, including
attorneys fees, and have agreed to indemnify Cowen against
certain liabilities, including liabilities under the federal
securities laws. The terms of the fee arrangement with Cowen,
which are customary in transactions of this nature, were
negotiated at arms length between us and Cowen, and our
board of directors was aware of the arrangement.
Merger
Financing; Source and Amounts of Funds
Merger Subs obligation to complete the merger is not
conditioned upon its ability to obtain funds sufficient to do
so. Intercell has represented to us that it has sufficient funds
to pay the aggregate merger consideration and other amounts
payable pursuant to the merger agreement to consummate the
merger and the other transactions contemplated by the merger
agreement. The total amount of funds required by Merger Sub to
pay all the merger consideration and related fees and expenses
in connection with the merger is estimated to be approximately
$118,000,000. Intercell has advised us that it will provide the
required funds from cash on hand.
28
Interests
of Our Directors and Executive Officers in the Merger
In considering the recommendation of our board of directors with
respect to the merger, our stockholders should be aware that
some of our directors and executive officers have personal
interests in the merger that are, or may be, different from, or
in addition to, your interests. Our board of directors was aware
of the interests described below and considered them, among
other matters, when approving the merger.
CEO
Employment Agreement.
We have entered into an employment agreement with Stanley C.
Erck, our President and Chief Executive Officer. We have not
entered into any employment agreements with any of our other
principal executive officers. We entered into an employment
agreement with Mr. Erck as of May 18, 2000, that, as
amended, provides for his employment as President and Chief
Executive Officer and a position on the board of directors for
the term of the agreement. The agreement continues indefinitely
until either party terminates Mr. Ercks employment.
Mr. Ercks salary and bonus have been adjusted
annually by our board of directors, and Mr. Erck earned a
salary of $364,100 and a bonus of $126,980 for 2007 and a salary
of $375,100 for 2008, with a bonus to be determined.
Mr. Ercks employment agreement, as amended, provides
for certain payments and the acceleration of vesting of stock
options if his employment is terminated at any time following a
change in control see under
Severance Payments
to Executive Officers
for more details.
Mr. Ercks employment agreement also includes
covenants relating to the protection of our confidential
information, the assignment of inventions, restrictions on
soliciting our employees and restrictions on competing with our
business.
Executive
Change in Control Agreements.
We have also entered into change in control agreements with
Gregory M. Glenn and Russell P. Wilson, dated as of
December 1, 2005, that, as amended, provide that if, within
one year following a change in control (as defined in their
respective agreements), such officer is terminated without cause
(as defined in their respective agreements) or if such officer
terminates his employment for good reason (as defined in their
respective agreements), each of them is entitled to a cash
payment equal to his then current annual base salary (or, if his
base salary has been reduced in the sixty days prior to his
termination or at any time following a change in control, his
base salary in effect prior to such reduction), plus the higher
of his target incentive bonus for that year or his actual
incentive bonus for the prior year, as well as coverage under
our medical plans (including coverage for dependents, as
applicable) for twelve months following the date of termination,
at our expense. In addition, upon a termination as described
above at any time after a change in control, any unvested
employee stock options granted to such officer prior to or in
connection with the change in control immediately vest and
become exercisable. The definition of
change in
control
for the purposes of these agreements includes,
among other things, the acquisition by an individual, entity or
group of 40% or more of either our then outstanding common stock
or the combined voting power of our outstanding securities.
Common
Stock and Stock Options.
Each of Messrs. Erck, Glenn and Wilson is eligible annually
to receive an incentive bonus that our board of directors may
grant, at its sole discretion, to the executive, based on our
board of directors assessment of the executives
individual performance. Each of our non-employee directors is
entitled to receive an option to purchase 10,000 shares of
our common stock following each annual stockholders meeting.
For Messrs Erck, Glenn and Wilson, under the merger agreement,
each of their outstanding options to purchase shares of common
stock issued under our 1998 Stock Option Plan and 1999 Stock
Incentive Plan will be fully vested and exercisable no less than
30 days prior to the effective time of the merger, and upon
the consummation of the merger, to the extent not exercised
prior to the effective time of the merger, will be cancelled and
terminated and, in consideration of such cancellation and
termination, Intercell will, or will cause Iomai as the
surviving corporation to, promptly, and in no event later than
three business days after the effective time of the merger, pay
to such holders of options, an amount in respect thereof equal
to the product of (i) the excess, if any, of $6.60 over the
exercise price of each such option multiplied by (ii) the
number of shares of our common stock issuable upon exercise of
the option. No payments will be made with respect to such stock
options that have per share exercise prices above $6.60.
For Messrs. Erck, Glenn and Wilson, under the merger
agreement, each of their outstanding options to purchase shares
of common stock issued under our 2005 Incentive Plan that are
scheduled to vest prior to the effective time of the merger,
will be exercisable prior to the effective time of the merger,
and upon the consummation of the merger, to the extent not
exercised prior to the effective time of the merger, will be
cancelled and terminated and, in consideration of such
cancellation and termination,
29
Intercell will replace such option with a fully vested and
exercisable option to purchase shares of Intercell common stock.
Each of their outstanding options to purchase shares of common
stock issued under our 2005 Incentive Plan that are unvested by
its terms as of the effective time of the merger, upon the
consummation of the merger, will be cancelled and terminated,
and in consideration of such cancellation and termination,
Intercell will replace such option with an option to purchase
shares of Intercell common stock, subject to the same vesting
schedule the cancelled and terminated option had under
Iomais 2005 Incentive Plan. The exercise price and number
of shares subject to all such options to purchase Intercell
common stock will be determined consistent with the requirements
of Treasury
Regulation Section 1.409A-1(b)(5)(v)(D).
The method of determining the exercise price and number of
shares under the Intercell option is described in more detail in
Treatment of Our Stock Options and Warrants on
page 37.
Under the terms of our 2005 Incentive Plan, for options held by
our non-employee directors, each outstanding option to purchase
our common stock, to the extent not exercised prior to the
effective time of the merger, whether vested or unvested, will
be cancelled and will thereafter represent the right to receive,
in consideration for such cancellation, a cash payment equal to
the excess, if any, of the $6.60 per share merger consideration
over the per share option exercise price, multiplied by the
number of shares of our common stock subject to the option. No
payments will be made with respect to such stock options that
have per share exercise prices above $6.60.
The following table summarizes the ownership of options and
common stock by our executive officers and directors as of the
date hereof, and assuming the effective time of the merger is
September 15, 2008:
Executive
Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Granted Under 1998 Stock Option Plan or 1999
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Incentive Plan
|
|
|
Options Granted Under 2005 Incentive Plan
|
|
|
|
|
|
|
Exercise Price
|
|
|
Exercise Price
|
|
|
Vested as of
|
|
|
Unvested as of
|
|
|
|
|
|
|
Below Merger
|
|
|
Above Merger
|
|
|
Effective Time of
|
|
|
Effective Time of
|
|
|
Company
|
|
Name
|
|
Consideration
|
|
|
Consideration
|
|
|
Merger
|
|
|
Merger
|
|
|
Common Stock
|
|
|
Stanley C. Erck
|
|
|
621,149
|
|
|
|
|
|
|
|
181,250
|
|
|
|
343,750
|
|
|
|
25,000
|
|
Gregory M. Glenn
|
|
|
415,383
|
|
|
|
|
|
|
|
93,750
|
|
|
|
206,250
|
|
|
|
71,885
|
|
Russell P. Wilson
|
|
|
112,072
|
|
|
|
|
|
|
|
112,500
|
|
|
|
262,500
|
|
|
|
11,000
|
|
Non-Employee
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options Granted Under 1998
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Option Plan or 1999
|
|
|
Options Granted Under 2005
|
|
|
|
|
|
|
Stock Incentive Plan
|
|
|
Incentive Plan
|
|
|
|
|
|
|
Exercise Price
|
|
|
Exercise Price
|
|
|
Exercise Price
|
|
|
Exercise Price
|
|
|
|
|
|
|
Below Merger
|
|
|
Above Merger
|
|
|
Below Merger
|
|
|
Above Merger
|
|
|
Company
|
|
Name
|
|
Consideration
|
|
|
Consideration
|
|
|
Consideration
|
|
|
Consideration
|
|
|
Common Stock
|
|
|
M. James Barrett(1)
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
0
|
|
R. Gordon Douglas
|
|
|
23,076
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
0
|
|
Richard Douglas
|
|
|
23,076
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
3,461
|
|
F. Weller Meyer
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
50,000
|
|
Thomas Martin Vernon
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
(1)
|
|
Does not include any shares of common stock held by New
Enterprise Associates (and its associated entities) which is
subject to a share exchange agreement with Intercell. See
page 34 for discussion of the interests of New Enterprise
Associates.
|
The following table shows the approximate amount in cash that
each executive officer and director is expected to receive,
based on equity awards held as of the date of this proxy
statement, as a result of the cash-out of options and shares of
common
30
stock held by such individual upon the effective time of the
merger, and assuming the effective time of the merger is
September 15, 2008 and that each individual exercises all
stock options that are vested immediately prior to such
effective time:
Executive
Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
Name
|
|
Stock Options(1)
|
|
|
Common Stock
|
|
|
Stanley C. Erck
|
|
$
|
3,763,400.31
|
|
|
$
|
165,000
|
|
Gregory M. Glenn
|
|
$
|
2,483,216.77
|
|
|
$
|
474,441
|
|
Russell P. Wilson
|
|
$
|
788,314.68
|
|
|
$
|
72,600
|
|
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
Name
|
|
Stock Options(1)
|
|
|
Common Stock
|
|
|
M. James Barrett(2)
|
|
$
|
63,000.00
|
|
|
$
|
0
|
|
R. Gordon Douglas
|
|
$
|
194,302.44
|
|
|
$
|
0
|
|
Richard Douglas
|
|
$
|
194,302.44
|
|
|
$
|
22,843
|
|
F. Weller Meyer
|
|
$
|
66,600.00
|
|
|
$
|
330,000
|
|
Thomas Martin Vernon
|
|
$
|
66,600.00
|
|
|
$
|
26,400
|
|
|
|
|
(1)
|
|
Subject to applicable state and federal tax withholding and
other deductions and assessments as required by law.
|
|
(2)
|
|
Does not include any shares of common stock held by New
Enterprise Associates (and its associated entities) which is
subject to a share exchange agreement with Intercell. See
page 34 for a discussion of interests of New Enterprise
Associates.
|
The following table shows the approximate number of options
issued under our 2005 Incentive Plan for each executive officer
that are expected to be substituted by options to purchase
Intercell common stock, based on equity awards held as of the
date of this proxy statement, as a result of the substitution of
unvested Iomai stock options issued under the 2005 Incentive
Plan, upon the effective time of the merger, assuming the
effective time of the merger is September 15, 2008 and that
each officer exercises all stock options to purchase our common
stock that are vested immediately prior to such effective time:
Executive
Officers
|
|
|
|
|
|
|
Stock Options to be
|
|
Name
|
|
Substituted
|
|
|
Stanley C. Erck
|
|
|
343,750
|
|
Gregory M. Glenn
|
|
|
206,250
|
|
Russell P. Wilson
|
|
|
262,500
|
|
Potential
Severance Payments to Executive Officers.
Under Mr. Ercks employment agreement, as amended, if
Mr. Ercks employment is terminated without cause (as
defined in the agreement) or if he terminates his employment for
good reason (as defined in the agreement), he is entitled to a
cash payment equal to twice (A) his then current annual
base compensation (or, if his base compensation has been reduced
in the sixty days prior to his termination or at any time
following a change in control, his base compensation in effect
prior to such reduction), plus (B) the higher of his target
incentive bonus for the year of termination or his actual
incentive bonus for the prior year. Mr. Erck also is
entitled to coverage for himself and his dependents under our
medical plans for twelve months following the date of
termination at our expense.
Under Mr. Ercks employment agreement, Good
Reason means the occurrence of any of the following events:
(1) a material reduction in authority or areas of
responsibility;
31
(2) his base compensation is reduced by an amount greater
than five percent of his base compensation prior to such
reduction; or
(3) he ceases to be a member of the Board of Directors for
any reason other than for Cause.
Under Mr. Ercks employment agreement,
Cause means:
(1) a willful failure by Mr. Erck to substantially
perform his duties and responsibilities in accordance with his
employment agreement, other than a failure resulting from his
complete or partial incapacity due to physical or mental illness
or impairment;
(2) a willful act by Mr. Erck which constitutes
personal dishonesty, incompetence, gross misconduct or breach of
fiduciary duty involving personal profit or fraud which in each
instance is materially injurious to Iomai;
(3) a willful violation of any law, rule or regulation or
any final
cease-and-desist
order relating to the operation of the business of Iomai;
(4) a conviction of, or a plea of guilty or
no contest to, a felony or a crime involving moral
turpitude; or
(5) a breach by Mr. Erck of his representations and
covenants set forth in his employment agreement.
Under Messrs. Glenn and Wilsons change in control
agreements, as amended, within the first year following a change
in control (as defined in their respective agreements), if such
officer is terminated without cause (as defined in their
respective agreements) or if such officer terminates his
employment for good reason (as defined in their respective
agreements), each of them is entitled to a cash payment equal to
his then current annual base salary (or, if his base salary has
been reduced in the sixty days prior to his termination or at
any time following a change in control, his base salary in
effect prior to such reduction), plus the higher of his target
incentive bonus for the year of termination or his actual
incentive bonus for the prior year, as well as coverage under
our medical plans for himself and his dependents for twelve
months following the date of termination, at our expense.
In the event of such a severance-qualifying termination, the
following table shows the approximate amount of potential cash
severance payable to each executive officer following
termination of employment in 2008, based on compensation and
benefit levels in effect on July 2, 2008, assuming the
executive officers employment terminates under
circumstances that entitle the executive officer to severance.
|
|
|
|
|
|
|
Cash
|
|
Name
|
|
Severance(1)(2)
|
|
|
Stanley C. Erck
|
|
$
|
1,151,638
|
|
Gregory M. Glenn
|
|
$
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478,204
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Russell P. Wilson
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$
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415,268
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(1)
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Subject to applicable state and federal tax withholding and
other deductions and assessments as required by law.
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(2)
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These amounts include the value of continued benefits and
vacation accrued (as of June 30, 2008), due under the
agreements. We assumed in each case that termination is not for
cause, the executive does not violate his non-competition or
non-solicitation agreements with us following termination, the
executive does not receive medical and life insurance coverage
from another employer within one year of termination and the
executive does not incur legal fees requiring reimbursement from
us. We used the same assumptions for health care benefits that
we used for our financial reporting under generally accepted
accounting principles.
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Under Mr. Ercks employment agreement, as amended,
after a change in control (as defined in the agreement), upon
the termination of Mr. Ercks employment with the
company for any reason or upon his separation from the company
for any reason, all of his unvested options immediately vest and
become exercisable. Pursuant to the merger agreement, these
acceleration of vesting provisions would apply to any options to
purchase Intercell common stock that Mr. Erck received upon
the consummation of the merger and any future options to
purchase Intercell common stock he may receive.
Under Messrs. Glenn and Wilsons change in control
agreements, as amended, after a change in control (as defined in
their respective agreements), if either of Dr. Glenns
or Mr. Wilsons employment with the company is
terminated without cause (as defined in their respective
agreements) or if either of Dr. Glenn or Mr. Wilson
terminates his employment with the company for good reason (as
defined in their respective agreements), any unvested employee
stock options granted to either of them prior to or
32
in connection with the change in control immediately vest and
become exercisable. Pursuant to the merger agreement, these
acceleration of vesting provisions would apply to any options to
purchase Intercell common stock that Dr. Glenn or
Mr. Wilson received upon the consummation of the merger.
The following table shows the approximate number of options
issued under our 2005 Incentive Plan for each executive officer
that are expected to be substituted by options to purchase
Intercell common stock, based on equity awards held as of the
date of this proxy statement, as a result of the substitution of
unvested Iomai stock options issued under the 2005 Incentive
Plan, upon the effective time of the merger, assuming the
effective time of the merger is September 15, 2008 and that
each officer exercises all stock options to purchase our common
stock that are vested immediately prior to such effective time.
Such number of options to be substituted for options to purchase
shares of Intercell common stock set forth next to each
officers name forms the basis for the minimum number of
options that would immediately vest and become exercisable
assuming each officers employment with the company is
terminated immediately after the effective time of the merger in
a manner that would trigger acceleration of vesting under each
officers agreement:
Executive
Officers
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Stock Options to be
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Weighted Average
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Name
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Substituted
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Exercise Price
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Stanley C. Erck
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343,750
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$
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4.84
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Gregory M. Glenn
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206,250
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$
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4.53
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Russell P. Wilson
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262,500
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$
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4.62
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Director
and Officer Indemnification and Insurance.
Section 145 of the Delaware General Corporate Law permits a
Delaware corporation to include in its charter documents, and in
agreements between a corporation and its directors and officers,
provisions expanding the scope of indemnification beyond that
specifically provided by current law. We have included in our
by-laws provisions to limit or eliminate the personal liability
of our directors to the fullest extent permitted under Delaware
law, as it now exists or may in the future be amended. In
addition, our certificate of incorporation provides that our
directors will not be personally liable for monetary damages to
us or our stockholders for breaches of their fiduciary duty as
directors, except (a) for any breach of such
directors duty of loyalty, (b) for acts or omissions
not in good faith or involving intentional misconduct or a
knowing violation of law, (c) for unlawful payments of
dividends or unlawful stock repurchases or redemptions under
Section 174 of the Delaware General Corporate Law and
(d) for any transaction resulting in receipt by such person
of an improper personal benefit. In addition, our by-laws
provide that we will indemnify our directors and officers to the
fullest extent permitted by law, including if he or she is
serving as a director, officer, employee or agent of another
company at our request, against any and all expenses (including
attorneys fees), liabilities or other matters covered by
rights to which the directors and officers are entitled under
the by-laws, any agreement, vote of stockholders or
disinterested directors of otherwise, to any person who was or
is a party or is threatened to be made a party to or is involved
in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative and whether by or in the right of Iomai or
otherwise, by reason of the fact that he or she is or was a
director or officer of Iomai, or is or was serving at our
request as a director or executive officer of another
corporation, partnership, joint venture, trust or other
enterprise, including service with respect to an employee
benefit plan. Expenses for the defense of any action for which
indemnification may be available may be advanced by us under
certain circumstances. We maintain liability insurance which
insures our directors and officers against certain losses and
insures us with respect to our obligations to indemnify our
directors and officers.
Pursuant to the merger agreement, Intercell has agreed that any
rights to indemnification, advancement of expenses or
exculpation existing in favor of our directors or officers as
provided in our certificate of incorporation and our by-laws or
pursuant to any other agreements, in each case, in effect as of
the date of the merger agreement, shall survive the merger and
shall continue in full force and effect in accordance with their
terms. For six years after the effective time of the merger, to
the full extent permitted under applicable law, Intercell and
Iomai, as the surviving corporation, have agreed to indemnify,
defend and hold harmless our directors and officers against
losses, claims, damages or other liabilities with respect to
matters occurring at or prior to the effective time of the
merger. For at least six years after the effective time of the
merger, Intercell will cause Iomai as the surviving corporation
to maintain the same limits, terms and conditions of our current
directors and officers liability insurance in
respect of acts or omissions occurring at or prior to the
effective time of the merger, covering each person currently
covered by our directors and officers liability
insurance policy; provided that Iomai as the surviving
corporation may substitute policies containing terms with
respect to coverage and amounts no less favorable to the
directors and officers, and provided that Intercell and Iomai as
the surviving corporation are not obligated to pay more than
250% of the last annual aggregate premium paid prior to the date
of the merger agreement by Iomai in the aggregate to obtain such
coverage. Additionally, the merger agreement
33
provides that Intercell will have an option to cause coverage to
be extended under our current directors and officers
liability insurance by obtaining a six-year tail
policy on terms and conditions no less advantageous than our
current directors and officers liability insurance,
provided such tail policy can be obtained for no
more than 250% of the last annual aggregate premium paid prior
to the date of the merger agreement by Iomai in the aggregate to
obtain such coverage.
Restrictive
Covenants.
Mr. Erck is subject to non-competition and non-solicitation
provisions that apply for a period following termination of
employment with us equal to two years. Each of Dr. Glenn
and Mr. Wilson is subject to non-solicitation provisions
that apply for a period following termination of employment with
us equal to one year.
Interests
of New Enterprise Associates
Pursuant to the merger agreement, upon the consummation of the
merger, each outstanding warrant to purchase Iomai common stock
held by New Enterprise Associates 10, Limited Partnership, which
is an affiliate of our chairman of our board, M. James
Barrett, to the extent not exercised prior to the consummation
of the merger, will be cashed out, without interest, in an
amount equal to the product of (i) the excess of $6.60 over
the $5.25 exercise price of each such warrant multiplied by
(ii) the number of shares of Iomai common stock issuable
upon exercise of the warrant. As of the record date, New
Enterprise Associates 10, Limited Partnership held warrants to
purchase 550,535 shares of Iomai common stock.
Additionally, pursuant to the share exchange agreement, New
Enterprise Associates 10, Limited Partnership and NEA Ventures
2002, Limited Partnership, which are both affiliates of M. James
Barrett, have agreed to exchange all their shares of our common
stock into shares of Intercell common stock prior to the
effective time of the merger. Under the terms of the share
exchange agreement, each share of Iomai common stock held by New
Enterprise Associates 10, Limited Partnership and
NEA Ventures 2002, Limited Partnership will be exchanged
for the number of shares (rounded to the nearest whole share) of
Intercell common stock equal to $6.60 divided by the closing
sale price for Intercell common stock on the Vienna Stock
Exchange on the closing date of the share exchange (with such
closing sale price being converted from Euros to
U.S. Dollars). As of May 12, 2008, New Enterprise
Associates 10, Limited Partnership and NEA Ventures 2002,
Limited Partnership beneficially owned an aggregate of
6,972,332 shares of our common stock (including warrants to
purchase 550,535 shares of our common stock exercisable
within 60 days of May 12, 2008).
Material
U.S. Federal Income Tax Consequences
The following is a general summary of material U.S. federal
income tax consequences relevant to a stockholder whose shares
are converted to cash in the merger. The summary is based on
current provisions of the Internal Revenue Code, the regulations
issued thereunder, judicial decisions and administrative
rulings, all of which are subject to change, possibly with
retroactive effect.
This summary is for general information only and does not
purport to consider all aspects of U.S. federal income
taxation that may be relevant to stockholders.
The tax
consequences to any particular stockholder may differ depending
on that stockholders own circumstances and tax position.
For example, the following general summary may not be
applicable with respect to shares received pursuant to the
exercise of employee stock options or otherwise as compensation,
or with respect to holders of shares of common stock who or
which are subject to special tax treatment under the Internal
Revenue Code, such as life insurance companies, tax-exempt
organizations, financial institutions, S corporations,
trusts, stockholders liable for the alternative minimum tax,
dealers in securities or currencies, traders who elect to apply
a mark-to-market method of accounting, U.S. expatriates and
persons who are holding shares of our common stock as part of a
straddle, conversion, constructive sale, hedge or other
integrated transaction. This summary also is not applicable to
shares held by partnerships (or other entities or arrangements
that are classified as partnerships for U.S. federal income
tax purposes). If a partnership holds shares, the tax treatment
of a partner in the partnership will generally depend on the
status of the partner and the activities of the partnership. If
you are a partnership or a partner in a partnership holding
shares, you should consult your tax advisor. In addition, this
summary assumes that shares are held as capital
assets within the meaning of Section 1221 of the
Internal Revenue Code.
This summary does not address estate or gift tax or the
consequences of the transactions described herein under the tax
laws of any state, local or foreign jurisdiction.
We have not
and will not seek any opinion of counsel or any ruling from the
Internal Revenue Service with respect to the matters discussed
herein. Stockholders are urged to consult their own tax advisors
to determine the particular tax consequences to them (including
the application and effect of any state, local or foreign income
and other tax laws) of the merger.
34
U.S. Stockholders.
The following is applicable
to stockholders that are U.S. Stockholders. For
purposes of this summary, a U.S. Stockholder is a
beneficial owner of shares who or which is, for
U.S. federal income tax purposes, an individual who is a
citizen or resident of the United States, a corporation or other
entity treated as a corporation for U.S. federal income tax
purposes that is created or organized under the laws of the
United States or any political subdivision thereof, an estate
that is subject to U.S. federal income taxation regardless
of the source of its income, and a trust whose administration is
subject to the primary supervision of a United States court and
which has one or more United States persons who have authority
to control all of its substantial decisions or that has elected
to be treated as a United States person.
The receipt of cash by a U.S. Stockholder pursuant to the
merger will be a taxable transaction for U.S. federal
income tax purposes. Generally, a U.S. Stockholder who
receives cash in exchange for shares in the merger will
recognize gain or loss equal to the difference between the
amount of cash received by the stockholder pursuant to the
merger and the adjusted tax basis in the shares converted into
cash in the merger. Gain or loss will be calculated separately
for each block of shares (
i.e.
, shares acquired at the
same cost in a single transaction) converted into cash in the
merger. Any gain or loss recognized by such a stockholder will
be capital gain or loss, and will be long-term capital gain or
loss if such stockholders holding period for the shares
exceeds one year. In the case of non-corporate stockholders,
long-term capital gains are currently eligible for reduced rates
of taxation. The ability to use capital losses to offset
ordinary income is limited.
Non-U.S. Stockholders.
The
following is applicable to stockholders that are
Non-U.S. Stockholders.
A
Non-U.S. stockholder
is a beneficial owner of shares who or which is not a
U.S. Stockholder.
Any gain realized on the receipt of cash pursuant to the merger
by a
Non-U.S. Stockholder
generally will not be subject to U.S. federal income tax
unless:
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the gain is effectively connected with a trade or business of
the
Non-U.S. Stockholder
in the United States (and, if required by an applicable income
tax treaty, is attributable to a United States permanent
establishment of the
Non-U.S. Stockholder); or
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in the case of a nonresident alien, the individual is present in
the United States for 183 days or more in the taxable year
of that disposition, and other conditions are met.
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A
Non-U.S. Stockholder
described in the first bullet point above generally will be
subject to U.S. federal income tax on its net gain derived
from the merger in the same manner as a U.S. Stockholder at
regular graduated U.S. federal income tax rates. If a
Non-U.S. Stockholder
that is a foreign corporation is described in the first bullet
point above, it may in addition be subject to a branch profits
tax equal to 30% of its effectively connected income (or at such
lower rate as may be specified by an applicable income tax
treaty). An individual
Non-U.S. Stockholder
described in the second bullet point immediately above will be
subject to a flat 30% tax (or at such lower rate as may be
specified by an applicable income tax treaty) on its gain
derived from the merger, which may be offset by U.S. source
capital losses, even though the individual is not considered a
resident of the United States.
Backup Withholding.
A stockholder (other than exempt
stockholders including, among others, all corporations) that
converts its shares into cash may be subject to a 28% backup
withholding tax on such cash, unless the stockholder provides
its TIN and certifies that such number is correct, provides
other certifications, and otherwise complies with the applicable
requirements of the backup withholding rules. A stockholder that
does not furnish a required TIN or that does not otherwise
establish a basis for an exemption from backup withholding may,
in addition to backup withholding, be subject to a penalty
imposed by the Internal Revenue Service. Each
U.S. Stockholder should complete and sign the Substitute
Form W-9
included as part of the transmittal form sent to each
stockholder in conjunction with the effectuation of the merger
so as to provide the information and certification necessary to
avoid backup withholding. Each
Non-U.S. Stockholder
should complete and sign the appropriate
Form W-8
also included as part of the letter of transmittal in
conjunction with the effectuation of the merger.
If backup withholding applies to a stockholder, the paying agent
is required to withhold 28% from payments to such stockholder,
and the IRS may impose a penalty on such stockholder. Backup
withholding is not an additional tax. Rather, the amount of the
backup withholding can be credited against the U.S. federal
income tax liability of the person subject to the backup
withholding, provided that the required information is given to
the IRS. If backup withholding results in an overpayment of tax,
a refund can be obtained by the stockholder by filing a
U.S. federal income tax return.
Appraisal
Rights
Appraisal rights under Delaware General Corporation Law (DGCL)
are available to our stockholders with respect to the merger.
DGCL Section 262 requires that stockholders be notified not
less than 20 days before the special meeting to vote on the
35
approval and adoption of the merger agreement that appraisal
rights will be available. A copy of DGCL Section 262 must
be included with such notice. This proxy statement constitutes
our notice to our stockholders of the availability of appraisal
rights in connection with the merger in compliance with the
requirements of DGCL Section 262. If you wish to consider
exercising your appraisal rights, you should carefully review
the text of Section 262 contained in Annex E, since
failure to timely and properly comply with the requirements of
DGCL Section 262 will result in the loss of your appraisal
rights under Delaware law. Merely voting against approval and
adoption of the merger agreement will not satisfy the notice
requirements under Delaware law with respect to appraisal rights.
If you elect to demand appraisal of your shares of our common
stock, you must satisfy each of the following conditions:
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You must deliver to us a written demand for appraisal of your
shares before the vote with respect to the merger agreement is
taken. This written demand for appraisal must be in addition to
and separate from any proxy or vote abstaining from or voting
against approval and adoption of the merger agreement. Voting
against or failing to vote for approval and adoption of the
merger agreement by itself does not constitute a demand for
appraisal within the meaning of DGCL Section 262. Failure to
vote against approval and adoption of the merger agreement will
not constitute waiver of your appraisal rights.
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You must not vote in favor of approval and adoption of the
merger agreement. A vote in favor of the approval and adoption
of the merger agreement, by proxy or in person, will constitute
a waiver of your appraisal rights in respect of the shares so
voted and will nullify any previously filed written demands for
appraisal.
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If you fail to comply with either of these conditions and the
merger is completed, you will be entitled to receive the merger
consideration for your shares of our common stock as provided
for in the merger agreement, but you will have no appraisal
rights with respect to your shares of our common stock.
All demands for appraisal should be addressed to the Corporate
Secretary at Iomai Corporation, 20 Firstfield Road,
Suite 250, Gaithersburg, Maryland, 20878, and must be
delivered to us before the vote on the merger agreement is taken
at the special meeting, and should be executed by, or on behalf
of, the record holder of the shares of our common stock. The
demand must reasonably inform us of the identity of the
stockholder and the intention of the stockholder to demand
appraisal of his, her or its shares.
To be effective, a demand for appraisal by a holder of our
common stock must be made by, or in the name of, such
stockholder, fully and correctly, as the stockholders name
appears on the stock certificate(s) and cannot be made by the
beneficial owner if he or she does not also hold the shares of
record. If you hold shares in the name of a broker or other
nominee and you want to attempt to assert appraisal rights, you
must instruct your nominee to take the steps necessary to enable
you to assert appraisal rights. If you or your nominee fails to
follow all of the steps required by the statute, you will lose
your right of appraisal.
Within ten days after the closing of the merger, Iomai, as the
surviving corporation, will be required to send a notice that
the merger has become effective to each stockholder who
delivered to us a demand for appraisal prior to the vote and who
did not vote in favor of the merger.
Delisting
and Deregistration of Our Common Stock
If the merger is completed, our common stock will be delisted
from The Nasdaq Global Market, or Nasdaq, and will be
deregistered under the Exchange Act. As a result, our shares
will no longer be available for trading and we will no longer
file periodic reports with the SEC.
Structure
of the Merger
The merger agreement provides that, upon the terms and subject
to the conditions of the merger agreement, Merger Sub will be
merged with and into us and the separate corporate existence of
Merger Sub will thereupon cease, and we will be the surviving
corporation and all of our rights, privileges, powers,
immunities, purposes and franchises will continue unaffected by
the merger, except that all of our then outstanding capital
stock will be owned by Intercell, all outstanding stock options
will be cashed out or exchanged for options to purchase
Intercell common stock and thereafter cancelled and terminated,
and all warrants will only represent the right to receive cash
consideration, without interest, in an amount equal to the
product of (i) the excess, if any, of
36
$6.60 over the exercise price of each such warrant multiplied by
(ii) the number of shares of our common stock issuable upon
exercise of such warrant.
Effective
Time of the Merger
The merger will become effective when the certificate of merger
is duly filed with the Secretary of State of the State of
Delaware or at such later date and time as set forth in the
certificate of merger.
Charter
Documents, Directors and Officers of Iomai
The merger agreement provides that:
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our certificate of incorporation will be amended in the merger
to be virtually identical to the certificate of incorporation of
Merger Sub as in effect immediately prior to the closing of the
merger (except that the name of the surviving corporation will
be Iomai Corporation) and, as so amended, will be
our certificate of incorporation until changed or amended;
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the by-laws of Merger Sub as in effect immediately prior to the
closing of the merger will be our by-laws until changed or
amended;
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the directors of Merger Sub immediately prior to the closing of
the merger will be our directors until the earlier of their
resignation, removal or death or their successors are duly
elected or appointed and qualified, as the case may be; and
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the officers of Merger Sub immediately prior to the closing of
the merger will be our officers until the earlier of their
resignation, removal or death or their successors are duly
elected or appointed and qualified, as the case may be.
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The
Merger Consideration
Each share of our common stock issued and outstanding
immediately before the merger, other than treasury shares,
shares for which appraisal rights have been perfected, shares
held by Intercell or Merger Sub, and shares held by stockholders
party to the share exchange agreement, will automatically be
cancelled and will cease to exist and will be converted into the
right to receive $6.60 in cash, without interest. After the
merger is effective, each holder of a certificate representing
any of these shares of our common stock will no longer have any
rights with respect to the shares, except for the right to
receive the $6.60 per share merger consideration or, if
available, the right to receive payment of the appraisal value
of its shares upon compliance with the requirements of Delaware
law. Each share of our common stock held by us as treasury
shares or held by Intercell or Merger Sub at the effective time
of the merger will be cancelled without any payment.
YOU SHOULD NOT RETURN STOCK CERTIFICATES WITH THE ENCLOSED
PROXY.
A transmittal form with instructions for the
surrender of certificates representing shares of our common
stock will be mailed to stockholders shortly after completion of
the merger.
Treatment
of Our Stock Options and Warrants
Under the merger agreement, each outstanding stock option issued
under our 1998 Stock Option Plan and 1999 Stock Incentive Plan
(whether or not then vested or exercisable), will be fully
vested and exercisable no less than 30 days prior to the
effective time of the merger in accordance with the terms of the
plans. Upon the consummation of the merger, to the extent not
exercised prior to the effective time of the merger, such
options will be cancelled and terminated in accordance with the
terms of the plans and, in consideration of such cancellation
and termination, Intercell will, or will cause Iomai as the
surviving corporation to, promptly, and in no event later than
three business days after the effective time of the merger, pay
to such holders of options, an amount in respect thereof equal
to the product of (i) the excess, if any, of $6.60 over the
exercise price of each such option multiplied by (ii) the
number of shares of common stock issuable upon exercise of the
option. No payments will be made with respect to stock options
that have per share exercise prices above $6.60. The following
is the number of options under our 1998 Stock Option Plan and
1999 Stock Incentive Plan that have exercise prices under $6.60
that are outstanding as of July 2, 2008,
37
and the total amount of cash to be paid by Intercell upon
consummation of the merger in consideration of cancellation and
termination of such options:
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In-The-Money
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Amount to be
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Plan
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Options Outstanding
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Paid by Intercell
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1998 Plan
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7,961
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$
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43,762
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1999 Plan
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1,645,232
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$
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9,188,239
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Under the merger agreement and as a means to provide incentive
compensation to continuing employees of the surviving
corporation each outstanding stock option issued under our 2005
Incentive Plan that is scheduled to vest prior to the effective
time of the merger, will be exercisable prior to the effective
time of the merger, and upon the consummation of the merger, to
the extent not exercised prior to the effective time of the
merger, will be cancelled and terminated and, in consideration
of such cancellation and termination, Intercell will replace
such option with a fully vested option to purchase shares of
Intercell common stock, which will be exercisable during
specific exercise windows as provided by Intercells
Employee Stock Option Plan. For each outstanding stock option
issued under our 2005 Incentive Plan that is unvested by its
terms as of the effective time of the merger, upon the
consummation of the merger, such option will be cancelled and
terminated and, in consideration of such cancellation and
termination, Intercell will replace such option with an unvested
option to purchase shares of Intercell common stock, with the
same vesting schedule the cancelled and terminated option had
under Iomais 2005 Incentive Plan. We refer to all options
to purchase shares of Intercell common stock issued in
consideration of cancellation and termination of Iomai options,
as substituted Intercell options. As of July 2,
2008, there were 682,302 vested options and 1,966,556 unvested
options outstanding that were issued under our 2005 Incentive
Plan that, to the extent not exercised prior to the effective
time of the merger, would be cancelled and terminated in
exchange for substituted Intercell options upon consummation of
the merger.
Section 409A of the Internal Revenue Code was enacted in
2004. It is a broad provision that imposes significant
restrictions on payments that constitute nonqualified
deferred compensation within the meaning of
Section 409A. An individual who receives compensation that
is subject to, and in violation of, Section 409A is subject
to a 20% additional income tax and other adverse tax
consequences. In order to ensure that the substituted Intercell
options granted in exchange for cancelled and terminated Iomai
options are not subject to the adverse consequences of
Section 409A, the cancelled and terminated Iomai options
must be exchanged for substituted Intercell options in
accordance with the requirements of Treasury Regulation
Section 1.409A-1(b)(5)(v)(D).
With regard to the exercise price and number of shares subject
to substituted Intercell options, this regulation requires
(1) that the ratio of (a) the exercise price of each
substituted Intercell option to (b) the fair market value
of the shares subject to such substituted Intercell option on
the date such substituted Intercell option is granted may not be
more favorable to the option holder than the ratio of
(c) the exercise price of each cancelled and terminated
Iomai option to (d) the merger consideration, and
(2) that the aggregate value of the substituted Intercell
options (calculated as the difference between the fair market
value of the shares subject to such substituted Intercell
options and the exercise price of such substituted Intercell
options) multiplied by the number of shares subject to such
substituted Intercell options, may not be greater than the
aggregate value of the cancelled and terminated Iomai options
(calculated as the difference between the merger consideration
and the exercise price of such Iomai options) multiplied by the
number of shares subject to such Iomai options.
The exercise price of each substituted Intercell option shall be
determined by multiplying (1) the ratio of (a) the
exercise price of each cancelled and terminated Iomai option to
(b) the merger consideration, by (2) the fair market
value of Intercell common stock. In each case, the exercise
price of the substituted Intercell option will be determined on
the date of the option substitution (the date that the
substituted Intercell options are granted). For purposes of the
option substitution, the fair market value of Intercell common
stock is the closing sales price of Intercell common stock on
the Vienna Stock Exchange, as converted to U.S. Dollars, on
the day prior to the day the substituted Intercell options are
granted.
Once the exercise price of the substituted Intercell options has
been determined, the number of substituted Intercell options to
be granted will be calculated by dividing (1) (a) the
aggregate merger consideration for shares subject to the
cancelled and terminated Iomai options minus (b) the
aggregate exercise price of such options by (2) (a) the
fair market value of Intercell common stock minus (b) the
exercise price of the substituted Intercell options. Any option
to purchase fractional shares resulting from such calculation
will be cashed out at the time the substituted Intercell options
are granted.
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As an example, if 100 Iomai stock options were issued under the
2005 Incentive Plan with an exercise price of $4.40, and the
fair market value of Intercell common stock (as converted to
U.S. Dollars) is $48, then:
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the exercise price of the substituted Intercell options will be
$32 ($4.40 divided by $6.60, or 0.667, multiplied by $48);
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the number of substituted Intercell options will be 13 ((1)(a)
$660 minus (b) $440 divided by (2) (a) $48 minus
(b) $32); and
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$12 in cash will be paid in lieu of an option to purchase
fractional shares.
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Iomai, as the surviving corporation, will treat substituted
Intercell options for tax reporting and withholding purposes in
accordance with the regulations and other applicable guidance
under Section 409A of the Internal Revenue Code.
Under the terms of our 2005 Incentive Plan, for options held by
our non-employee directors, each outstanding option to purchase
our common stock, to the extent not exercised prior to the
effective time of the merger, whether vested or unvested, will
be cancelled and terminated and will thereafter represent the
right to receive, in consideration for such cancellation, a cash
payment equal to the excess, if any, of the $6.60 per share
merger consideration over the per share option exercise price,
multiplied by the number of shares of our common stock subject
to the option.
Upon the consummation of the merger, our 1998 Stock Option Plan,
1999 Stock Incentive Plan and 2005 Incentive Plan will
terminate, and all rights under any provision of any other plan,
program or arrangement providing for the issuance or grant of
any other interest in respect of the capital stock of Iomai will
be cancelled.
Under the merger agreement, upon the consummation of the merger,
each outstanding warrant to purchase common stock will only
represent the right to receive cash consideration, without
interest, in an amount equal to the product of (i) the
excess, if any, of $6.60 over the exercise price of each such
warrant multiplied by (ii) the number of shares of our
common stock issuable upon exercise of the warrant. Following
the merger, Intercell will, or will cause Iomai as the surviving
corporation to, honor the obligation to pay such amounts under
the warrants. No payment will be made with respect to warrants
that have per share exercise prices equal to or greater than
$6.60. As of July 2, 2008, there were warrants to purchase
2,079,639 shares of our common stock outstanding, all with
exercise prices of $5.25 per share. To the extent none of these
warrants are exercised prior to the effective time of the
merger, upon consummation of the merger, the warrants would
represent the right to receive an aggregate of $2,807,513 in
cash consideration.
The payments due to the holders of our stock options and
warrants may be reduced by the amount of any required tax
withholding.
Exchange
Agent
Intercell has designated American Stock Transfer and Trust
Company to act as exchange agent in the merger.
Surrender
of Stock Certificates
Once the merger is complete, Intercell will cause to be
deposited with the exchange agent (for the benefit of our
stockholders) the cash amounts required to pay the merger
consideration. At the effective time of the merger, shares of
our common stock (except for shares for which appraisal rights
may have been perfected, as described in Appraisal
Rights above):
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will no longer be outstanding;
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will automatically be canceled and retired; and
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will cease to exist.
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In addition, from and after the effective time of the merger,
each certificate formerly representing any such share of our
common stock will represent only the right to receive the $6.60
per share merger consideration which the holder of the
certificate is entitled to receive pursuant to the merger.
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No interest will accrue or be paid with respect to the merger
consideration. Until holders of certificates previously
representing shares of our common stock have surrendered those
certificates to the exchange agent, holders will not receive the
merger consideration due in respect of the shares formerly
represented by such certificates.
As soon as reasonably practicable after the effective time of
the merger but in any event no later than five business days
after the effective time of the merger, the exchange agent will
mail to each holder of record of shares of our common stock a
transmittal form and instructions for its use in delivering
certificates to the exchange agent in exchange for the merger
consideration due in respect of the shares formerly represented
by such certificates. After receipt of its certificates by the
exchange agent, together with a properly executed transmittal
form and such other documents specified in the instructions that
the exchange agent reasonably requires, the exchange agent will
deliver to each stockholder the $6.60 per share merger
consideration multiplied by the number of shares of common stock
formerly represented by the certificate(s) surrendered by the
stockholder. If a transfer of ownership of shares has occurred
but has not been registered in our transfer records, then a
check for the merger consideration applicable to such shares may
be issued to the transferee if the certificate representing the
shares is presented to the exchange agent accompanied by all
documents and endorsements required to evidence and effect such
transfer and by evidence that any applicable stock transfer
taxes have been paid.
Lost,
Stolen or Destroyed Certificates
If any certificate representing shares of our common stock is
lost, stolen or destroyed, the exchange agent will deliver the
applicable merger consideration due in respect of the shares
formerly represented by that certificate if:
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the stockholder asserting the claim of a lost, stolen or
destroyed certificate makes an affidavit of that fact; and
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if requested by Intercell, the stockholder posts a reasonable
indemnity or bond as security against any claim that may be made
with respect to that certificate against Iomai or Intercell
following the effective time of the merger.
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Unclaimed
Amounts
Any portion of the exchange fund that remains undistributed to
our stockholders six months after the effective time of the
merger will be delivered by the paying agent to Intercell, and
any of our stockholders who have not previously surrendered
their stock certificates will only be entitled to look to
Intercell for payment of the merger consideration due in respect
of the shares of common stock formerly represented by their
certificates. After the fifth anniversary of the effective time
of the merger (or immediately prior to the time such property
would escheat to or become property of a government authority)
the merger consideration with respect to any remaining stock
certificates which have not been surrendered will become
property of Intercell, subject to any applicable law. None of
the exchange agent, Iomai, Merger Sub or Intercell will be
liable for any amounts properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar
laws.
THE
MERGER AGREEMENT
The following description summarizes the material provisions
of the merger agreement and is qualified in its entirety by
reference to the complete text of the merger agreement. The
merger agreement included in this proxy statement as
Annex A contains the complete terms of that agreement and
stockholders should read it carefully and in its entirety
.
The Merger.
The merger agreement
provides that, following the satisfaction or waiver of the
conditions described below under Conditions to the
Merger, (i) Merger Sub will be merged with and into
Iomai and the separate corporate existence of Merger Sub will
thereupon cease and (ii) Iomai will be the surviving
corporation in the merger and will become a direct wholly-owned
subsidiary of Intercell. Each issued share of our common stock
(other than any shares owned by Intercell, Merger Sub, any other
wholly-owned subsidiary of Intercell or Iomai, by stockholders,
if any, who are entitled to and who properly exercise appraisal
rights under Delaware law, or any stockholders who are party to
the share exchange agreement) will be converted into the right
to receive $6.60 in cash, without interest thereon.
Vote Required to Approve
Merger.
The approval and adoption of the merger
agreement requires the affirmative vote of stockholders holding
at least a majority of shares of our common stock outstanding at
the close of business on the record date.
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Representations and
Warranties.
The merger agreement contains a number
of customary representations and warranties made by Intercell
and Iomai relating to themselves and their respective
subsidiaries. Iomai has made representations and warranties
regarding, among other things:
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its valid existence, good standing and qualification;
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its capital structure;
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its corporate power, authority and action;
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the authorization, execution, delivery and enforceability of,
and required consents, approvals and authorizations relating to,
the merger agreement and the transactions contemplated by the
merger agreement;
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the absence of certain violations as a result of the merger
agreement;
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its subsidiaries;
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its governmental filings, reports, SEC documents and statutory
financial statements;
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the absence of certain changes or events;
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litigation and investigations;
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the information supplied;
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its brokers or financial advisors and the opinion of Cowen;
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its compensation and benefit plans;
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the opinion of Cowen;
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tax matters;
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environmental matters;
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its compliance with applicable laws and its possession of
licenses and permits necessary to carry on its business;
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its intellectual property rights;
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its material contracts;
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its government contracts and regulatory compliance;
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labor and employment matters;
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its real properties;
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its insurance coverage;
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its transactions with its affiliates;
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that no state anti-takeover statute is applicable to the merger;
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its assets; and
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its compliance with the Foreign Corrupt Practices Act of 1977,
as amended.
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Intercell and Merger Sub have made representations and
warranties regarding, among other things:
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their due organization, good standing and qualification;
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the authorization, execution, delivery and enforceability of the
merger agreement and the transactions contemplated by the merger
agreement;
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the absence of certain violations as a result of the merger
agreement;
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the information supplied;
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the availability of funds necessary to consummate the merger;
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their brokers or financial advisors;
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litigation and investigations; and
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their ownership of our common stock.
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These representations and warranties were made to and solely for
the benefit of the parties as of specific dates. The assertions
embodied in such representations and warranties are qualified by
information contained in the confidential disclosure schedule
that we delivered in connection with signing the merger
agreement. Accordingly, such representations and warranties may
not be relied on as characterizations of the actual state of
facts or circumstances, since they were only made as of the date
of the merger agreement and are modified in important part by
the underlying disclosure schedules. Moreover, information
concerning the subject matter of such representations and
warranties may change after the date of the merger agreement,
which subsequent information may or may not be fully reflected
in our public disclosures.
Certain representations and warranties in the merger agreement
provide exceptions for items that are not reasonably likely to
have a Company Material Adverse Effect. For purposes
of the merger agreement, a Company Material Adverse
Effect means: any event, condition, change, occurrence or
development of a state of facts that, individually or in the
aggregate with all other events, conditions, changes,
occurrences or developments of a state of facts, is materially
adverse to (A) the business, operations, properties,
assets, liabilities (contingent or otherwise), condition
(financial or otherwise) or results of operations of Iomai or
(B) the ability of Iomai to timely perform its obligations
under the merger agreement in compliance with its terms or to
consummate the transactions contemplated by the merger agreement
and exchange agreements; provided, however, that no such event,
condition, change, occurrence or development of a state of
circumstances shall be considered in determining whether a
Company Material Adverse Effect has occurred to the extent that
it is proximately caused by:
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changes in economic or vaccine industry conditions in the United
States (and in each case to the extent that Iomai is not
disproportionately adversely affected);
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acts of terrorism, war or natural disasters occurring after the
date hereof (and in each case to the extent that Iomai is not
disproportionately affected);
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any loss of employees, customers or suppliers proximately caused
by the pendency or announcement of the transactions contemplated
by the merger agreement and exchange agreements (provided,
however, that any legal or contractual consequence of the
execution of the merger agreement or the consummation of the
transactions contemplated by the merger agreement and exchange
agreements that has not been disclosed to Intercell in the
merger agreement or the confidential disclosure schedule shall
not be excluded under this clause (3));
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any loss of funding under a government contract proximately
caused by the fact that Intercell is a
non-U.S. entity;
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changes in GAAP;
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the failure of Iomai to meet revenue, earnings or other internal
or analysts projections, in and of itself (it being
understood that any event, condition, change, occurrence or
development of a state of facts that may have caused or
contributed to any such failure may be deemed to constitute, in
and of itself, a Company Material Adverse Effect and may be
taken into consideration when determining whether a Company
Material Adverse Effect has occurred);
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any action taken by Iomai with Intercells written consent
or the taking of any action expressly required by the merger
agreement;
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a decline in Iomais stock price, in and of itself (it
being understood that any event, condition, change, occurrence
or development of a state of facts that may have caused or
contributed to any such decline may be deemed to constitute, in
and of itself, a Company Material Adverse Effect and may be
taken into consideration when determining whether a Company
Material Adverse Effect has occurred); and
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any legal proceedings commenced by any stockholder of Iomai
against Iomai or any member of Iomais board of directors
or Intercell arising out of the execution of the merger
agreement or the consummation of the transactions contemplated
by the merger agreement and exchange agreements.
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Conduct of Business Pending the
Merger.
During the period from the date of the
merger agreement until the earlier of the termination of the
merger agreement or the effective time of the merger, we have
agreed, subject to limited exceptions, that, among other things,
we (i) will conduct our business in the ordinary and usual
course consistent with past practice and will use all reasonable
best efforts to maintain and preserve intact our business
organization, to maintain our significant beneficial business
relationships with suppliers, contractors, distributors,
customers, licensors, licensees and others having material
business relationships with us, to retain the services of our
present officers and key employees and to comply in all material
respects with all applicable laws and the requirements of our
material contracts and (ii) will not, without the prior
written consent of Intercell:
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(A) acquire, sell, lease, transfer, encumber or permit to
be subject to any lien or dispose of any assets, rights or
securities that are material to us, or (B) terminate,
cancel or materially modify any material contract or enter into
any material commitment, transaction, agreement or line of
business;
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acquire by merging or consolidating with or by purchasing a
substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business, corporation,
partnership, association or other business organization or
division thereof;
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amend or propose to amend our certificate of organization or
by-laws;
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declare, set aside, make or pay any dividend or other
distribution payable in cash, capital stock, property or
otherwise with respect to any shares of our capital stock;
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purchase, redeem or otherwise acquire, or offer to purchase,
redeem or otherwise acquire, any shares of our capital stock,
other equity securities, other ownership interests or any
options, warrants or rights to acquire any such stock,
securities or interests, except for the acquisition of our
common stock (A) from holders of options or warrants in
full or partial payment of the exercise payable by such holder
upon exercise of options or warrants as in effect on the date of
the merger agreement or (B) from former employees,
directors and consultants in accordance with agreements
providing for the repurchase of shares in connection with any
termination of their services to Iomai;
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adjust, recapitalize, split, combine, subdivide or reclassify
any outstanding shares of our capital stock;
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except for (A) our common stock issuable upon exercise of
options outstanding on the date hereof or (B) our
outstanding warrants, issue, sell, encumber, dispose of or
authorize, propose or agree to the issuance, sale, encumbrance
or disposition by Iomai of, any shares of, or any options,
warrants or rights of any kind to acquire any shares of, or any
securities convertible into or exchangeable for any shares of,
our capital stock of any class, or any other securities in
respect of, in lieu of, or in substitution for any class of our
capital stock outstanding on the date hereof;
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incur, or modify in any material respect the terms of, any
indebtedness for borrowed money, or assume, guarantee or endorse
any such indebtedness of another person, except indebtedness
incurred, assumed or guaranteed in the ordinary course of
business consistent with past practice and not in excess of
$150,000 in the aggregate;
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make any loans or advances, except routine advances for
customary travel expenses to our employees in the ordinary
course of business consistent with past practice;
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other than to the extent required in a written contract or
agreement in existence as of the date of the merger agreement
and disclosed in the confidential disclosure schedules:
(A) grant or increase any severance or termination pay to
any current or former director, executive officer, employee,
consultant or independent contractor of Iomai, (B) execute
any
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employment, deferred compensation or other similar agreement (or
any amendment to any such existing agreement) with any such
individual, (C) increase the benefits payable under any
existing severance or termination pay policies or employment
agreements, (D) hire any officers (or promote an employee
into an officer position) or increase the compensation, bonus or
other benefits of current or former directors, executive
officers, employees (other than increases in compensation made
to employees in the ordinary course of business consistent with
past practice pursuant to such employees annual
performance reviews), consultants or independent contractors of
Iomai, (E) adopt or establish any Company Employee Benefit
Plan (as defined in the merger agreement), policy, program or
arrangement or amend in any material respect any existing
employee benefit plan, (F) provide any material benefit to
a current or former director, executive officer, employee,
consultant or independent contractor of Iomai not required by
any existing agreement or Company Employee Benefit Plan, or
(G) take any action that would result in its incurring any
obligation for any payments or benefits described in subsections
(i), (ii) or (iii) of Section 3.10(i) (without
regard to whether the transactions contemplated by the merger
agreement and exchange agreements are consummated) except to the
extent required in a written contract or agreement in existence
as of the date of the merger agreement;
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execute or amend (other than as required by existing employee
benefit plans or employment agreements or by applicable law) in
any material respect any employment, consulting, severance or
indemnification agreement between Iomai and any of its
directors, officers, agents, consultants, independent
contractors or employees, or any collective bargaining agreement
or other obligation to any labor organization or employee
incurred or entered into by Iomai;
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make any material changes in its reporting for Taxes or
accounting methods other than as required by GAAP or applicable
law; make or rescind any material tax election; file any amended
tax return with respect to any material tax; make any change to
its method of reporting income, deductions, or other tax items
for tax purposes; settle or compromise any material tax
liability or enter into any transaction with an affiliate
outside the ordinary course of business if such transaction
would give rise to a material tax liability;
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settle, compromise or otherwise resolve any litigation or other
legal proceedings material to Iomai or as would result in any
liability in excess of the amount reserved therefor or reflected
on the balance sheets included in our financial statements or
which relates to any of our intellectual property;
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pay or discharge any claims, liens or liabilities which are not
reserved for or reflected on the balance sheets included in the
our financial statements;
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adopt a plan of complete or partial liquidation (or resolutions
providing for or authorizing such liquidation), dissolution,
merger, consolidation, restructuring, recapitalization or
reorganization of Iomai (other than the proposed merger);
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abandon, cease to prosecute, fail to maintain, sell, license,
assign or encumber any of our intellectual property, permits, or
other material assets;
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(A) amend or terminate any material contract or any joint
venture, partnership or other similar arrangement,
(B) enter into any contract that, if entered into prior to
the date hereof, would have been required to be set forth in the
confidential disclosure schedules, (C) engage in any
transaction or series of transactions with any affiliate that
would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act, or
(D) intentionally or knowingly waive, release or assign any
material rights or claims under any material contract;
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authorize any new capital expenditures not included in our 2008
capital expenditure budget provided to Intercell prior to the
date of the merger agreement;
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fail to use reasonable best efforts to keep in full force and
effect all material insurance policies maintained by Iomai,
other than such policies that expire by their terms (in which
event we shall use reasonable best efforts so that such policies
will be renewed or replaced) or changes to such policies made in
the ordinary course of business consistent with past practice;
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enter into any license agreement with any person to obtain any
material intellectual property;
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enter into any agreement, arrangement or commitment that
materially limits or otherwise materially restricts Iomai, or
that would reasonably be expected to, after the effective time
of the merger, materially limit or restrict Intercell or any of
its subsidiaries or any of their respective affiliates or any
successor thereto, from engaging or competing in any line
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of business in which it is currently engaged or in any
geographic area material to the business or operations of
Intercell or any of its subsidiaries;
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take or cause to be taken any action that would reasonably be
expected to materially delay or prevent our consummation of the
transactions contemplated by the merger agreement and the
exchange agreements; or
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agree in writing or otherwise to take any of the foregoing
actions.
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Iomai Stockholders Meeting; Recommendation.
We
will take, in accordance with applicable law and our certificate
of incorporation and bylaws, all action necessary to convene a
meeting of holders of common stock as promptly as practicable
after the date the merger agreement was executed for the purpose
of considering and voting upon the adoption of the merger
agreement by our stockholders. Subject to our right to terminate
the merger agreement described below under the heading
Termination, the merger agreement must be
submitted to our stockholders at the stockholder meeting for the
purpose of adopting the merger agreement.
Alternative Acquisition Proposals.
The merger
agreement requires us to cease all existing discussions or
negotiations with any persons or entities with respect to any
offer or proposal or potential offer or proposal relating to any
transaction or proposed transaction or series of related
transactions, other than the transactions contemplated by the
merger agreement, involving:
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the direct or indirect acquisition (including by way of a
license) (whether in a single transaction or a series of related
transactions) of assets of Iomai equal to 15% or more of
Iomais consolidated assets or to which 15% or more of
Iomais revenues or earnings on a consolidated basis are
attributable,
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the direct or indirect acquisition of 15% or more of any class
of equity securities of Iomai,
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a tender offer or exchange offer that if consummated would
result in any person, entity or group (as defined in
Section 13(d) of the Exchange Act) beneficially owning 15%
or more of any class of equity securities of Iomai, or
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a merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving Iomai.
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Each of the above four bullet points is referred to in the
merger agreement as an Takeover Proposal.
Except as provided in the following two paragraphs, from the
date of the merger agreement until the earlier of termination of
the merger agreement or the effective time of the merger, we
will not and will not authorize or permit our officers,
directors, employees, investment bankers, attorneys, accountants
or other agents to directly or indirectly:
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solicit, initiate, or take any action to intentionally or
knowingly facilitate or encourage (including by way of
furnishing non-public information) the submission of, any
Takeover Proposal,
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approve or recommend any Takeover Proposal, enter into any
agreement,
agreement-in-principle
or letter of intent with respect to or accept any Takeover
Proposal (or resolve to or publicly propose to do any of the
foregoing), or
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participate or engage in any discussions or negotiations
regarding, or furnish to any person or entity any non-public
information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any
Takeover Proposal.
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Notwithstanding the foregoing, if in response to an unsolicited,
written Takeover Proposal made after the date of the merger
agreement (in circumstances not involving an intentional breach
or knowing violation of Section 6.8 of the merger
agreement), our board of directors reasonably determines in good
faith (after receiving the advice of Cowen or a financial
advisor of nationally recognized reputation) that such Takeover
Proposal constitutes, or is reasonably likely to lead to, a
Superior Proposal (as defined below) and with respect to which
our board of directors determines in good faith, after
consulting with and receiving the advice of outside counsel,
that not taking such action would be inconsistent with our board
of directors fiduciary duties to our stockholders under
Delaware law, then we may, at any time prior to the stockholder
vote adopting the merger agreement (but in no event after such
time):
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furnish information with respect to Iomai to the person or
entity making such Takeover Proposal (and its representatives),
but only pursuant to a confidentiality agreement in customary
form that, among other things, is no less favorable
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to us than the Confidentiality Agreement between Iomai and
Intercell, and provided such confidentiality agreement may not
include any provision calling for an exclusive right to
negotiate with Iomai, and we have given not less than
24 hours notice to Intercell of our intention to enter into
such confidentiality agreement and furnished Intercell with any
such information not previously provided to Intercell,
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conduct discussions or negotiations with such person or entity
regarding such Takeover Proposal, and
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to the extent permitted under the merger agreement, enter into a
binding written agreement concerning a transaction that
constitutes a Superior Proposal.
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For purposes of the merger agreement, a Superior
Proposal is any written offer, obtained after the date of
the merger agreement and not in intentional breach or knowing
violation of Section 6.8 of the merger agreement, to
acquire, directly or indirectly, for consideration consisting of
cash
and/or
securities, more than 50% of the outstanding voting equity
securities of Iomai or all or substantially all of the assets of
Iomai, and is on terms that the our board of directors
determines in its good faith judgment (after receipt of the
advice of Cowen or a financial advisor of nationally recognized
reputation and outside counsel), taking into account all
relevant factors, (i) would, if consummated, result in a
transaction that is more favorable to Iomai stockholders from a
financial point of view than the transactions contemplated by
the merger agreement (including the terms of any proposal by
Intercell to modify the terms of such transactions) and
(ii) is reasonably capable of being completed on the terms
proposed.
We have agreed to provide Intercell written notice of any
Takeover Proposal and any inquiry with respect to or that could
reasonably be expected to lead to any Takeover Proposal within
24 hours after receipt thereof. Such notice will include
the material terms and conditions of such Takeover Proposal,
request or inquiry including the identity of the person making
such Takeover Proposal or inquiry, and a copy of all written
materials provided by such person. We have also agreed to keep
Intercell fully informed on a current basis of the status,
including any change to the terms and conditions thereof, of any
Takeover Proposal or inquiry.
In the merger agreement, we have agreed that neither our board
of directors or any committee thereof will:
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fail to make, withdraw or modify, or propose publicly to
withdraw or modify, in a manner adverse to Intercell, the
recommendation or the approval or declaration of advisability by
our board of directors of the merger agreement, the merger and
the other transactions contemplated by the merger agreement and
the exchange agreements,
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approve or recommend, or propose publicly to approve or
recommend, any Takeover Proposal, or
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cause or permit us to enter into any letter of intent,
memorandum of understanding, agreement in principle, acquisition
agreement, merger agreement, option agreement, joint venture
agreement, partnership agreement or other agreement
constituting, or which is intended to or is reasonably likely to
lead to, any Takeover Proposal, or resolve or agree to take any
such action.
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Any failure or action described in the three bullets above is
referred to as a Company Adverse Recommendation
Change.
Notwithstanding the foregoing, our board of directors may, at
any time prior to the stockholder vote adopting the merger
agreement:
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withdraw or modify its recommendation or the approval or
declaration of advisability by our board of directors of the
merger agreement, the merger and the other transactions
contemplated by the merger agreement and the exchange agreements,
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recommend a Takeover Proposal that constitutes a Superior
Proposal, or
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to the extent permitted under the merger agreement, enter into a
binding written agreement concerning a transaction that
constitutes a Superior Proposal,
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provided that, among other things:
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our board of directors determines in good faith, after
consulting with and receiving the advice of outside counsel,
determines that not making a Company Adverse Recommendation
Change would be inconsistent with our board of directors
fiduciary duties to our stockholders under Delaware law,
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no Company Adverse Recommendation Change may be made in the
absence of a Superior Proposal unless such change is based upon
information that is unknown to our board of directors as of the
date of the merger agreement but becomes known prior to the
receipt of the stockholder vote adopting the merger
agreement, and
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no Company Adverse Recommendation Change may be made until the
third business day following Intercells receipt of written
notice of such determination by our board of directors (unless
the stockholders meeting is scheduled to convene during such
three business day period, in which case Intercell must be given
as much notice as possible in advance of such meeting).
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None of the foregoing restrictions will prohibit us or our board
of directors from (i) taking and disclosing to our
stockholders our position with respect to any tender or exchange
offer by a third party pursuant to
Rules 14d-9
and
14e-2(a)
promulgated under the Exchange Act, or (ii) making such
disclosure to our stockholders as in the good faith judgment of
our board of directors, after receipt of advice from outside
legal counsel, as required under applicable law and that the
failure to make such disclosure would cause our board of
directors to violate our fiduciary duties to our stockholders
under applicable law.
Employee Benefits.
Intercell has agreed to honor, in
accordance with their terms and applicable law, all Company
Employee Benefit Plans (as defined in the merger agreement) and
all accrued benefits thereunder; it being understood and agreed
that nothing can prevent Intercell from amending or terminating
any Company Employee Benefit Plan or other agreement in
accordance with its terms and applicable law. For a period of at
least six months following the consummation of the merger,
Intercell has agreed to provide our U.S. employees who are
retained by Intercell with employee benefits (excluding equity
and change in control plans, programs, or arrangements) that are
substantially comparable in the aggregate to those benefits
provided to such employees immediately prior to the effective
time of the merger; provided, however, that Intercell is under
no obligation to retain any Iomai employee or group of employees
other than as required by applicable law or an employment
agreement. For purposes of Intercells employee benefit
plans, programs and arrangements, Intercell has agreed, among
other things, to treat the prior service with Iomai of each
person who is an employee or former employee of Iomai
immediately prior to the consummation of the merger as service
rendered to Intercell
Indemnification and Insurance.
Intercell has agreed
that any rights to indemnification, advancement of expenses or
exculpation existing in favor of our directors or officers as
provided in our certificate of incorporation and our by-laws or
pursuant to any other agreements, in each case, in effect as of
the date of the merger agreement, shall survive the merger and
shall continue in full force and effect in accordance with their
terms. For six years after the effective time of the merger,
Intercell has agreed to indemnify, defend and hold harmless our
directors and officers against losses, claims, damages or other
liabilities with respect to matters occurring at or prior to the
effective time of the merger, and Intercell guarantees any such
obligations of the surviving corporation. For at least six years
after the effective time of the merger, Intercell will cause the
surviving corporation to maintain our current directors
and officers liability insurance in respect of acts or
omissions occurring at or prior to the effective time of the
merger, covering each person currently covered by our
directors and officers liability insurance policy on
the same limits, terms and conditions with respect to such
coverage and amounts; provided that Intercell may substitute
policies of at least the same coverage and amounts containing
terms no less advantageous to such directors and officers, with
such substitution not resulting in gaps or lapses of coverage
with respect to matters actually or allegedly occurring prior to
the date of the merger agreement, and provided that Intercell is
not obligated to pay more than 250% of the last annual aggregate
premium paid prior to the date of the merger agreement by Iomai
in the aggregate to obtain such coverage. Additionally, the
merger agreement provides that Intercell will have an option to
cause coverage to be extended under our current directors
and officers liability insurance by obtaining a six-year
tail policy on terms and conditions no less
advantageous than our current directors and officers
liability insurance, provided such tail policy can
be obtained for no more than 250% of the last annual aggregate
premium paid prior to the date of the merger agreement by Iomai
in the aggregate to obtain such coverage.
Stockholder Litigation.
We will have the right to
control the defense of any stockholder litigation related to the
merger agreement, the merger or the other transactions
contemplated by the merger agreement; provided that we must give
Intercell the opportunity to participate in the defense or
settlement of any such stockholder litigation. We will not make
any settlement with respect to any such litigation without
Intercells prior written consent.
Interim Financing.
Intercell has agreed to lend us,
at our option, up to a principal amount of $5,000,000 in
immediately available funds, in two installments of up to
$2,500,000 each, on August 1, 2008 and September 2,
2008, respectively; provided,
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however, that Intercell shall not be obligated to make any such
loan to us (a) upon the termination of the merger agreement
in accordance with its terms, (b) if the effective time of
the merger occurs prior to August 1, 2008, or (c) if
we have breached in any material respect any of our obligations
under the form of promissory note attached to the merger
agreement, and such breach has not been cured. Additionally,
Intercell is not obligated to make the second loan to us on
September 2, 2008 if the effective time of the merger
occurs after August 1, 2008 and before September 2,
2008. The loans will be evidenced by a single promissory note,
in the form attached to the merger agreement, as executed by
Iomai on the date of the merger agreement and payable to the
order of Intercell in an amount equal to the unpaid principal
amount of the loans. Under the terms of the promissory note, we
would be obligated to pay interest, in cash, at a fixed rate of
10% per annum, quarterly in arrears, on December 31,
March 31, June 30 and September 30 in each year until the
maturity date, beginning on December 31, 2008. The maturity
date of the promissory note is the date immediately following
the termination of the merger agreement by either Intercell or
us for any reason, and on such date, the aggregate unpaid
principal amount of the promissory note, together with accrued
and unpaid interest thereon, would become immediately payable.
The loans are not revolving in nature and no loan may be
reborrowed once it has been repaid. We must give Intercell at
least five business days irrevocable written notice of our
intention to receive a loan from Intercell.
Conditions
to the Merger.
Conditions
to Each Partys Obligation to Effect the
Merger
The merger agreement provides that the obligations of each party
to effect the merger are subject to the satisfaction or waiver
of certain conditions, including the following:
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the adoption by our stockholders of the merger agreement by an
affirmative vote of the holders of a majority of shares of our
common stock outstanding at the close of business on the record
date;
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the expiration or termination of the waiting period under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended;
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approvals by the Committee on Foreign Investment in the United
States or the expiration of the time period for the President of
the United States to block the consummation of the merger;
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no law enacted that prohibits the consummation of the merger and
no injunction issued by a court of competent jurisdiction that
will be continuing and prohibits the consummation of the
merger; and
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the transactions contemplated by the exchange agreements have
been consummated.
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Conditions
to the Obligations of Intercell and Merger Sub to Effect the
Merger
Intercell and Merger Sub will be obligated to complete the
merger only if each of the following conditions is satisfied or
waived:
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the representations and warranties of Iomai (i) contained
in Sections 3.1(a) (the first sentence), 3.2(a) and (c), 3.3(a)
and (b), 3.9 and 3.11 of the merger agreement shall be true and
correct (other than de minimis inaccuracies) as of the date of
the merger agreement and as of the closing date of the merger
(except to the extent expressly made as of an earlier date, in
which case as of such earlier date) and (ii) contained in
the merger agreement (other than in Sections 3.1(a) (the
first sentence), 3.2(a) and (c), 3.3(a) and (b), 3.9 and 3.11 of
the merger agreement) shall be true and correct (without giving
effect to any limitation on any representation or warranty
indicated by the words Company Material Adverse
Effect, in all material respects, in any
material respect, material or
materially) as of the date of the merger agreement
and as of the closing date of the merger (except to the extent
expressly made as of an earlier date, in which case as of such
earlier date), except in the case of this clause (ii), where the
failure of any such representations and warranties to be so true
and correct would not, and would not reasonably be expected to,
individually or in the aggregate, have a Company Material
Adverse Effect,
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Iomai shall have performed in all material respects all of the
obligations, and complied in all material respects with the
agreements and covenants, required to be performed by or
complied with by it under the merger agreement at or prior to
the closing date of the merger,
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Iomai has provided certificates executed by its chief executive
officer or chief financial officer certifying that the
conditions in the two bullet points above have been satisfied,
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there will not be pending or threatened any action, litigation
or proceeding by any governmental entity (i) seeking to
restrain or prohibit the consummation of the transactions
contemplated by the merger agreement or seeking to obtain from
Iomai, Intercell or Merger Sub any damages that are material in
relation to Iomai, (ii) seeking to prohibit or limit the
ownership or operation by Iomai, Intercell or any of
Intercells subsidiaries of any portion of the business or
assets of Iomai, Intercell or any of Intercells
subsidiaries, or to compel Iomai, Intercell or any of
Intercells subsidiaries to dispose of or hold separate any
portion of the business or assets of Iomai, Intercell or any of
Intercells subsidiaries, as a result of any transaction
contemplated by the merger agreement and the exchange
agreements, (iii) seeking to impose limitations on the
ability of Intercell or Merger Sub to acquire or hold, or
exercise full rights of ownership of, any shares of Iomai common
stock, including the right to vote Iomai common stock purchased
by it on all matters properly presented to Iomai stockholders,
(iv) seeking to prohibit Intercell or any of its
subsidiaries from effectively controlling the business or
operations of Iomai, or (v) which otherwise is reasonably
likely to have a Company Material Adverse Effect, and
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since the date of the merger agreement, no event, condition,
change, effect, occurrence or development shall have occurred
that, individually or in the aggregate, has had or would
reasonably be expected to have, a Company Material Adverse
Effect.
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Conditions
to the Obligations of Iomai to Effect the Merger
Iomai will be obligated to complete the merger only if each of
the following conditions is satisfied or waived:
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the representations and warranties of Intercell and Merger Sub
contained in the merger agreement shall be true and correct
(without giving effect to any limitation on any representation
or warranty indicated by the words Parent Material Adverse
Effect, in all material respects, in any
material respect, material or
materially) as of the date of the merger agreement
and as of the closing date of the merger (except to the extent
expressly made as of an earlier date, in which case as of such
earlier date), except where the failure of any such
representations and warranties to be so true and correct would
not, and would not reasonably be expected to, individually or in
the aggregate, have a Parent Material Adverse Effect (as defined
in the merger agreement),
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Intercell and Merger Sub shall have performed in all material
respects all of the obligations, and complied in all material
respects with the agreements and covenants, required to be
performed by or complied with by them under the merger agreement
and the share exchange agreement at or prior to the closing date
of the merger, and
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Intercell has provided certificates executed by its chief
executive officer or chief financial officer certifying that the
conditions in the two bullet points above have been satisfied.
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Termination of the Merger Agreement.
The merger
agreement may be terminated and the merger may be abandoned at
any time prior to the merger, whether before or after adoption
of the merger agreement by our stockholders:
(a) By mutual written consent of Intercell, Merger Sub and
us;
(b) By either Intercell or us, provided the merger has not
been consummated on or prior to September 15, 2008,
provided that the right to terminate under this clause (b)
is not available to any party whose failure to fulfill an
obligation under the merger agreement has been the cause or, or
resulted in, the merger not being consummated on or prior to
such date;
(c) By either Intercell or us if a court of competent
jurisdiction or other governmental entity has issued an order,
decree or ruling or taken any other action, or there exists any
statute, rule or regulation, in each case permanently
restraining, enjoining or otherwise prohibiting (collectively,
Restraints) the consummation of any of the
transactions contemplated by the merger agreement; provided,
however, that the party seeking to terminate the merger
agreement pursuant to this clause (c) will have used
reasonable best efforts to prevent the entry of and to remove
such Restraints and the right to terminate under this
clause (c) is not available to any party if the issuance of
such Restraint was primarily due to the failure of such party to
perform its obligations under the merger agreement;
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(d) By either Intercell or us if the necessary approval of
the Iomai stockholders is not obtained at a duly held meeting of
Iomai stockholders;
(e) By Intercell, if prior to the Iomai stockholder vote
adopting the merger agreement, (i) a Company Adverse
Recommendation Change shall have occurred, (ii) our board
of directors or any committee thereof shall not have rejected
any tender or exchange offer that is commenced or a Takeover
Proposal (replacing 15% in the definition thereof
with 50%) that is made in writing to our board of directors and
publicly disseminated within 10 business days of the
commencement or public dissemination thereof, or (iii) we
have intentionally breached in any material respect any of our
non-solicitation obligations under Section 6.8 of the merger
agreement;
(f) By Intercell, if (i) there shall have occurred any
event, condition, change, effect, occurrence or development of a
state of facts that, individually or in the aggregate, has had
or would reasonably be expected to have, a Company Material
Adverse Effect, and Intercell has provided us with written
notice 20 calendar days prior to the effect of such termination,
(ii) we have breached any of our representations or
warranties or failed to perform in any material respect any of
its covenants or other agreements in each case contained in the
merger agreement, which breach or failure to perform
(A) would give rise to the failure of a condition to the
obligations of Intercell and Merger Sub to effect the merger,
and (B) is incapable of being cured or has not been cured
by us within 20 calendar days after written notice has been
given by Intercell to us of such breach or failure to perform,
or (iii) any Iomai stockholder party thereto shall have
breached in any material respect any of its obligations under
the exchange agreement and such breach is incapable of being
cured or has not been cured by such stockholder within 10
calendar days after written notice has been given by Intercell
to such stockholder of such breach;
(g) By Iomai, if (i) Intercell shall have breached any
of its representations or warranties or failed to perform in any
material respect any of its covenants or other agreements in
each case contained in the merger agreement, which breach or
failure to perform (A) has had or would reasonably be
expected to have a Parent Material Adverse Effect, and
(B) is incapable of being cured or has not been cured by
Intercell within 20 calendar days after written notice has been
given by Iomai of such breach or failure to perform or
(ii) Intercell shall have failed to perform in any material
respect its obligations to provide interim financing under
Section 6.13 of the merger agreement or its obligations
under the related promissory note, the form of which is attached
to the merger agreement, and such failure to perform is
incapable of being cured or has not been cured by Intercell
within five business days after written notice has been given by
Iomai to Intercell of such breach or failure to perform; or
(h) By Iomai, if prior to the receipt of stockholder vote
adopting the merger agreement, (i) we have not
intentionally breached or knowingly violated our
non-solicitation obligations under Section 6.8 of the
merger agreement, (ii) our board of directors has received
a Takeover Proposal that it has determined in good faith, after
consultation with Cowen or a financial advisor of nationally
recognized reputation, constitutes a Superior Proposal,
(iii) we have notified Intercell in writing that we intend
to enter into a definitive agreement implementing such Superior
Proposal, attaching the most current version of such agreement
(including any amendments, supplements or modifications) to such
notice (a Superior Proposal Notice),
(iv) during the three business day period following
Intercells receipt of a Superior Proposal Notice,
(A) we shall have offered to negotiate with (and, if
accepted, negotiated in good faith with), and shall have caused
our respective financial and legal advisors to offer to
negotiate with (and, if accepted, negotiate in good faith with),
Intercell in making adjustments to the terms and conditions of
the merger agreement and (B) our board of directors shall
have determined in good faith, after the end of such three
business day period, and after considering the results of such
negotiations and the revised proposals made by Intercell, if
any, that the Superior Proposal giving rise to such notice
continues to be a Superior Proposal; provided, however, that any
amendment, supplement or modification to the financial or other
material terms of any Takeover Proposal shall be deemed a new
Takeover Proposal and we may not terminate the merger agreement
pursuant to this clause (h) unless we have complied with
the requirements of this clause (h) with respect to such
new Takeover Proposal, including sending a Superior
Proposal Notice with respect to such new Takeover Proposal
and offering to negotiate for three business days, in the case
of an amendment, supplement or modification to financial terms
or two business days, in the case of amendment, supplement or
modification to other material terms, and (v) our board of
directors concurrently approves, and we concurrently enter into,
a definitive agreement providing for the implementation of such
Superior Proposal.
In the event that the merger agreement is terminated for any
reason set forth above, the merger agreement will become null
and void and be of no further force or effect and there will be
no liability on the part of Intercell, Merger Sub or Iomai (or
any of their respective directors, officers, employees,
stockholders, agents or representatives), except for certain
enumerated exceptions; provided, however, that such a
termination will not relieve any party from liability for fraud
or the knowing and intentional breach of any of its
representations, warranties, covenants or agreements set forth
in the merger agreement.
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Termination Fee.
We have agreed to pay Intercell a
cash termination fee of $6,000,000 (Termination Fee)
if the merger agreement is terminated:
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By Intercell of Iomai pursuant to clause (b) or
(d) under the heading Termination above,
if a Takeover Proposal shall be pending or shall have been made
or remade to Iomai or shall have been made or remade directly to
our stockholders generally or any person shall have publicly
announced an intention to make a Takeover Proposal, and
thereafter we enter into a definitive agreement with respect to,
or consummate a transaction contemplated by, any Takeover
Proposal (replacing 15% in the definition thereof
with 50%) within 12 months of the date the
merger agreement is terminated (so long as, in the case of a
transaction that has not been consummated within such period,
such transaction is thereafter consummated);
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By Intercell pursuant to clause (f)(ii) under the heading
Termination above, if a Takeover Proposal
shall be pending or shall have been made or remade to Iomai or
shall have been made or remade directly to our stockholders
generally or any person shall have publicly announced an
intention to make a Takeover Proposal, and thereafter we enter
into a definitive agreement with respect to, or consummate a
transaction contemplated by, any Takeover Proposal (replacing
15% in the definition thereof with 50%)
within 12 months of the date the merger agreement is
terminated (so long as, in the case of a transaction that has
not been consummated within such period, such transaction is
thereafter consummated);
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By Intercell pursuant to clause (e) under the heading
Termination above;
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By Intercell or Iomai pursuant to clause (b) or
(d) under the heading Termination above
or by Intercell pursuant to clause (f) under the heading
Termination above, following any time at which
Intercell is entitled to terminate the merger agreement pursuant
to clause (e) under the heading
Termination above; or
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By Iomai pursuant to clause (h) under the heading
Termination above.
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For terminations by us pursuant to clause (h) under the
heading Termination above, we must pay
the Termination Fee to Intercell in cash no later than ten
business days following such termination; provided, however,
that if we have not paid such amount in cash by the tenth
business day following termination, then we are obligated to
immediately provide to Intercell, in lieu of cash, the number of
newly issued shares (rounded to the nearest whole share) of our
common stock equal to (A) $6,000,000 divided by
(B) $2.362, which is the average of the closing sale prices
for our common stock on the Nasdaq Global Market, as reported in
The Wall Street Journal for each of the 15 consecutive trading
days ending with the trading day immediately preceding the date
of the merger agreement (the Average Price). We are
also then obligated to promptly, and in any event within two
business days following conclusion of the ten business day
period following termination of the merger agreement, prepare
and file with the SEC, and have declared effective by the SEC as
soon as practicable following such filing, a resale shelf
registration statement on
Form S-3
covering such shares of our common stock issued to Intercell
pursuant to a registration rights agreement (in customary form)
to be agreed upon and entered into by the parties. We have
agreed to use reasonable best efforts to keep such shelf
registration statement continuously effective, in compliance
with the Securities Act and usable for resale of such shares
until the earlier of (1) the day on which Intercell no
longer holds any such shares issued in lieu of the cash
Termination Fee and (2) the first anniversary of the
issuance of such shares. Notwithstanding the foregoing, in no
event shall the number of shares issued to Intercell in lieu of
the cash Termination Fee exceed the number of shares equal to
19.9% of our common stock issued and outstanding as of the date
of the merger agreement, and if under any circumstance the
Average Price multiplied by the number of shares of our common
stock issued in lieu of the cash Termination Fee is less than
$6,000,000, then we will pay to Intercell such difference in
cash on the day of the issuance of the shares.
Notwithstanding anything to the contrary contained in merger
agreement, if we, prior to the receipt of the Iomai stockholder
vote adopting the merger agreement, receive an unsolicited,
written Takeover Proposal made in circumstances not involving an
intentional breach or knowing violation of Section 6.8 of
the merger agreement, and our board of directors reasonably
determines in good faith (after receiving the advice of Cowen or
a financial advisor of nationally recognized reputation) that
such Takeover Proposal constitutes, or is reasonably likely to
lead to, a Superior Proposal, then we will use reasonable best
efforts to fund the payment of the Termination Fee due in the
event of a termination by Iomai pursuant to clause (h)
under the heading Termination
above, in cash within ten business days following the date of
termination .
Intercell and Merger Sub have agreed that in the event Intercell
receives a Termination Fee, the receipt by Intercell of such
amount shall constitute the sole and exclusive remedy for
Intercell and Merger Sub, and such amount shall constitute
liquidated damages in respect of, any termination of the merger
agreement, provided no party is relieved from liability for any
intentional breach of the merger agreement prior to its
termination
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Consents and Approvals.
Under the merger agreement,
each of Iomai, Intercell and Merger Sub will use reasonable best
efforts to take, or cause to be taken, all action, and to do, or
cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to
consummate and make effective in the most expeditious manner
practicable, the merger and the other transactions contemplated
by the merger agreement, including (i) obtaining all
permits, consents, approvals, authorizations and actions or
non-actions required for or in connection with the consummation
of the merger and the other transactions contemplated by the
merger agreement and exchange agreements, (ii) the taking
of all steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, a governmental
authority, (iii) the obtaining of all necessary consents
from third parties, and (iv) the execution and delivery of
any additional instruments necessary to consummate the merger
and the other transactions contemplated by the merger agreement
and to fully carry out the purposes of the merger agreement.
Amendment.
The merger agreement may be amended by
action taken by or on behalf of the respective boards of
directors of the parties to the agreement at any time prior to
the effective time of the merger; provided that, after Iomai
stockholders have approved the merger, no amendment may be made
that in any way materially adversely affects the rights of such
stockholders (other than a termination of the merger agreement
in accordance with the provisions thereof) without the further
approval of such stockholders. The merger agreement may not be
amended except by an instrument in writing signed by the parties
thereto.
Waiver.
Any failure of any of the parties to comply
with any obligation, covenant, agreement or condition under the
merger agreement may be waived at any time prior to the
effective time of the merger by any of the parties entitled to
the benefit thereof only by a written instrument signed by each
such party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation,
representation, warranty, covenant, agreement or condition shall
not operate as a waiver of or estoppel with respect to, any
subsequent or other failure.
SHARE
EXCHANGE AND VOTING AGREEMENTS
The following description summarizes the material provisions
of the share exchange agreement and the voting agreement and is
qualified in its entirety by reference to the complete text of
the share exchange agreement and the voting agreement. The share
exchange agreement included in this proxy statement as
Annex C contains the complete terms of that agreement and
stockholders should read it carefully and in its entirety. The
voting agreement included in this proxy statement as
Annex B contains the complete terms of that agreement and
stockholders should read it carefully and in its entirety.
Share
Exchange Agreement
New Enterprise Associates, Essex Woodlands Health Ventures, and
Gruber and McBaine Capital Management (and certain of their
respective affiliates), have entered into a share exchange
agreement with Intercell, whereby each of them has agreed to,
among other things, exchange all shares of Iomai common stock
held by such stockholder into shares of Intercell common stock
prior to the effective time of the merger. As of the record
date, the stockholders who are party to the share exchange
agreement held approximately 41% of our outstanding common stock.
Under the terms of the share exchange agreement, each share of
Iomai common stock held by such stockholder will be exchanged
for the number of shares (rounded to the nearest whole share) of
Intercell common stock equal to $6.60 divided by the closing
sale price for Intercell common stock on the Vienna Stock
Exchange on the closing date of the share exchange (with such
closing sale price being converted from Euros to
U.S. Dollars). Intercell will register these newly-issued
shares with the appropriate Austrian authorities and apply to
list them on the Vienna Stock Exchange. The shares of Intercell
common stock issued in the share exchange will be issued
pursuant to a valid private placement in the U.S. and will
be restricted securities for the purposes of
U.S. federal securities laws.
In connection with the share exchange, Intercell will seek to
register an increase of its share capital (the Capital
Increase) in the Vienna Commercial Register (the
Commercial Register). Under the terms of the share
exchange agreement, Intercell must use its reasonable best
efforts to file an application for the registration of the
Capital Increase with the Commercial Register prior to the
opening of the Vienna Stock Exchange for trading on the business
day immediately following the share exchange closing date, and
in any event no later than the second business day following the
share exchange closing date. Intercell must use its reasonable
best efforts to take, or cause to be taken, all action, and to
do, or cause to be done, and to assist and cooperate with the
Commercial Register in doing, all things necessary, proper or
advisable to (i) discuss and seek pre-clearance with the
Commercial Register of the filing of the registration of the
Capital Increase in an attempt to expedite the review and
approval process with respect thereto and (ii) consummate
and make effective in the most expeditious manner practicable,
the registration of the Capital Increase in the Commercial
Register.
52
In connection with the application for the registration of the
Capital Increase with the Commercial Register, an independent
auditor must issue a report addressing the adequacy of the
in-kind contribution of the stockholders shares of Iomai
common stock to be provided to Intercell in exchange for the
Intercell shares. If (i) the report of the independent
auditor fails to conclude that the value of the
stockholders shares of Iomai common stock is at least as
high as the value of the Intercell shares, or (ii) the
Commercial Register does not accept the registration of the
Capital Increase within 15 days following the share
exchange closing date, then the right of the stockholders to
receive shares of Intercell common stock will automatically
terminate and Intercell will instead deliver to each stockholder
party to the share exchange agreement cash equal to the product
of (x) the number of such stockholders shares of
Iomai common stock and (y) $6.60. Intercell will pay such
cash, if applicable, to the stockholders within five business
days following the effective time of the merger.
Intercell and the stockholders may not amend or modify the share
exchange agreement (a) to increase or decrease, or change
the form of, the consideration to be paid to the stockholders
pursuant to the share exchange agreement, or (b) in a
manner that would reasonably be expected to materially delay or
prevent the consummation of the share exchange or the other
transactions contemplated by the merger agreement, in each case,
without the prior written consent of Iomai.
The closing of the share exchange is conditioned upon, among
other things, all of the closing conditions contained in the
merger agreement having been satisfied or, to the extent
permitted by applicable law, waived. The share exchange
agreement will terminate on the earliest of
(a) September 30, 2008, (b) Intercells
delivery of its newly issued shares or the alternative cash
consideration to the stockholders, (c) the termination of
the merger agreement in accordance with the termination
provisions thereof (please see The Merger
AgreementTermination of the Merger Agreement above
on page 49 for more details) and (d) the written
agreement of Intercell and the stockholders party to the share
exchange agreement.
Voting
Agreement
In connection with the merger agreement, our executive officers
and New Enterprise Associates, Essex Woodlands Health Ventures,
Gruber and McBaine Capital Management, Technology Partners Fund,
and ProQuest Investments (and certain of their respective
affiliates) entered into a voting agreement with Intercell. As
of the record date, the stockholders who are party to the voting
agreement held approximately 51% of our outstanding common stock.
Under the terms of the voting agreement, each of the above
stockholders irrevocably appointed Intercell as its proxy to
vote all shares of our outstanding common stock held by that
stockholder as of the record date:
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in favor of the merger and the adoption of the merger agreement
and the approval of the transactions contemplated by the merger
agreement, and any actions required in furtherance thereof;
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against any action or agreement that would result in a breach in
any material respect of any covenant, representation or warranty
or any other obligation of Iomai under the merger
agreement; and
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against (i) any extraordinary corporate transaction, such
as a merger, rights offering, reorganization, recapitalization
or liquidation involving Iomai (other than the merger),
(ii) a sale or transfer of a material amount of assets or
capital stock of Iomai or (iii) any action that is
intended, or would reasonably be expected, to impede, interfere
with, prevent, delay, postpone or adversely affect the merger or
the transactions contemplated by the merger agreement.
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During the term of the voting agreement, except as otherwise
provided therein, each stockholder agrees not to:
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sell, transfer, pledge, encumber, assign or otherwise dispose of
its shares, options or warrants, other than as permitted under
the share exchange agreement discussed above;
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grant any proxies or powers of attorney or enter into a voting
agreement (other than the identified voting agreement) or other
arrangement with respect to its shares, options or warrants;
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enter into, or deposit its shares, options or warrants into, a
voting trust or take any other action which would, or could
reasonably be expected to, result in a diminution of the voting
power represented by any of its shares, options or
warrants; or
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commit or agree to take any of the foregoing actions.
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53
Under the terms of the voting agreement, each stockholder agrees
not to exercise any appraisal rights or any dissenters
rights that such stockholder may have or could potentially have
in connection with the merger or the merger agreement.
The voting agreement will terminate on the earliest of
(a) September 30, 2008, (b) the termination of
the merger agreement in accordance with the termination
provisions thereof (please see The Merger
AgreementTermination of the Merger Agreement above
on page 49 for more details), (c) the written
agreement of Intercell and the stockholders party to the voting
agreement to terminate the voting agreement, (d) the
consummation of the merger, and (e) the date of any
modification, waiver or amendment to the merger agreement to
alter the merger consideration in a manner adverse to the
stockholders without the stockholders consent.
ADJOURNMENT
OR POSTPONEMENT OF THE SPECIAL MEETING
If at the special meeting the number of shares of Iomai common
stock present or represented and voting in favor of the approval
of the merger agreement is insufficient to approve the merger
agreement under Delaware law and under our certificate of
incorporation, our management may move to adjourn or postpone
the special meeting in order to enable our board of directors to
continue to solicit additional proxies in favor of the approval
of the merger agreement. In that event, we will ask you to vote
only upon the adjournment or postponement proposal and not the
merger proposal.
In this proposal, we are asking you to authorize the holder of
any proxy solicited by our board of directors to vote in favor
of adjourning or postponing the special meeting and any later
adjournments. If our stockholders approve the adjournment or
postponement proposal, we could adjourn or postpone the special
meeting, and any adjourned session of the special meeting, to
use the additional time to solicit additional proxies in favor
of the proposal to approve the merger agreement, including the
solicitation of proxies from our stockholders that have
previously voted against the merger proposal. Among other
things, approval of the adjournment or postponement proposal
could mean that, even if we had received proxies representing a
sufficient number of votes against the proposal to approve the
merger agreement, we could adjourn or postpone the special
meeting without a vote on the proposal to approve the merger
agreement and seek to convince the holders of those shares to
change their votes to votes in favor of the approval of the
merger agreement.
The adjournment or postponement proposal requires that holders
of more of our shares vote in favor of the adjournment or
postponement proposal than vote against the proposal.
Accordingly, abstentions and broker non-votes will have no
effect on the outcome of this proposal. No proxy that is
specifically marked AGAINST the proposal to approve the merger
agreement will be voted in favor of the adjournment or
postponement proposal, unless it is specifically marked FOR the
discretionary authority to adjourn or postpone the special
meeting to a later date.
Our board of directors believes that if the number of shares of
our common stock present or represented at the special meeting
and voting in favor of the proposal to approve the merger
agreement is insufficient to approve the merger agreement, it is
in the best interests of our stockholders to enable the board,
for a limited period of time, to continue to seek to obtain a
sufficient number of additional votes to approve the merger
agreement.
FINANCIAL
PROJECTIONS
We do not, as a matter of course, make public projections as to
future performance, earnings or other results, and we are
especially wary of making projections for extended periods due
to the unpredictability of the underlying assumptions and
estimates. However, in connection with the evaluation of
potential business combination and partnering transactions and
the merger agreement and the transactions contemplated thereby,
our board of directors reviewed a set of projections prepared by
our management regarding our future financial performance for
fiscal years 2008 through 2014 and also provided the projections
to Cowen for purposes of its financial analyses and in
connection with rendering its fairness opinion. We have included
below the material portions of these projections to give our
stockholders access to certain nonpublic information prepared
for purposes of considering and evaluating the merger. The
inclusion of this information should not be regarded as an
indication that we, our board of directors or Intercell
considered, or now considers, this information to be predictive
of actual future results, and such data should not be relied
upon as such. A summary of the projections are set forth below.
54
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2007A
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2008P
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2009P
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2010P
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2011P
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2012P
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2013P
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2014P
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(US$ in thousands)
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Revenues:
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|
|
|
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|
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Government contracts & grants
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$
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10,667
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$
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13,114
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$
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24,106
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$
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28,037
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$
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11,187
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$
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4,116
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$
|
327
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$
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68
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License/Milestones, net of royalty payments
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14,000
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8,500
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2,500
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25,000
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4,000
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Reimbursement of development costs
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8,736
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25,880
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41,884
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33,943
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11,389
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19,406
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Product Sales
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|
|
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Travelers Diarrhea
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28,044
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52,393
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74,566
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IS Panflu (Government stockpile)
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24,977
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128,008
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262,417
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|
|
|
403,467
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Total Revenues
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10,667
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35,850
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49,986
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78,422
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72,607
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196,558
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338,544
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478,101
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Cost of goods sold
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9,573
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50,449
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77,091
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109,633
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Gross Profit
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10,667
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35,850
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49,986
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78,422
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63,034
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146,109
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261,453
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|
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368,467
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Total R&D expenses
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31,605
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33,915
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|
48,515
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66,849
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|
|
|
53,209
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|
|
|
55,313
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|
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|
69,716
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87,299
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Total SG&A expenses
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8,172
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7,404
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7,892
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9,066
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|
|
|
11,460
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13,621
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15,771
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17,264
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EBIT
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(29,110
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)
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(5,469
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)
|
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(6,421
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)
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2,506
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(1,635
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)
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77,176
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175,966
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263,904
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Depreciation and Amortization
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2,153
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|
|
|
2,323
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|
|
|
2,768
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|
|
3,403
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|
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|
3,680
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|
|
|
4,566
|
|
|
|
5,190
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EBITDA
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(29,110
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)
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(3,316
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)
|
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|
(4,098
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)
|
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5,275
|
|
|
|
1,768
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|
|
|
80,856
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|
|
|
180,533
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|
|
|
269,094
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Interest Income
|
|
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1,144
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|
|
|
434
|
|
|
|
257
|
|
|
|
111
|
|
|
|
227
|
|
|
|
|
|
|
|
798
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|
|
|
3,665
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Interest Expense
|
|
|
(297
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)
|
|
|
(334
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)
|
|
|
(218
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)
|
|
|
(118
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)
|
|
|
(63
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)
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|
|
(31
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)
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|
|
(4
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)
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Other (expense) income, net
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(11
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)
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|
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|
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|
|
|
|
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Pretax Income
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$
|
(28,274
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)
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|
$
|
(5,369
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)
|
|
$
|
(6,382
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)
|
|
$
|
2,499
|
|
|
$
|
(1,471
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)
|
|
$
|
77,144
|
|
|
$
|
176,761
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|
|
$
|
267,569
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The internal financial projections were not prepared with a view
toward public disclosure, nor were they prepared with a view
toward compliance with published guidelines of the SEC, the
guidelines established by the American Institute of Certified
Public Accountants for preparation and presentation of financial
forecasts, or generally accepted accounting principles. In
addition, the projections were not prepared with the assistance
of or reviewed, compiled or examined by independent accountants.
The financial projections do not take into account any
circumstances or events occurring after the date they were
prepared. Projections of this type are based on assumptions that
are inherently subject to factors such as industry performance,
general business, economic, political, development, technology,
competitive, regulatory, market and financial conditions, as
well as changes to our business, financial condition or results
of operations, which factors may cause the financial projections
or the underlying assumptions to be inaccurate. Since the
projections cover multiple years, such information by its nature
becomes even less reliable with each successive year.
We advised Cowen that the internal financial information, upon
which the projections were based, are subjective in many
respects, but provided a reasonable basis for Cowens
opinion. The projections reflect numerous assumptions with
respect to industry performance, general business, economic,
market and financial conditions and other matters, all of which
are difficult to predict and are beyond our control. The
projections also anticipate favorable assumptions related to our
business, including partnering of our travelers diarrhea
program, that are inherently subject to significant economic,
political, development, technology, market, regulatory,
financial and competitive uncertainties, all of which are
difficult to predict and many of which are beyond our control.
As a result, there can be no assurance that the projected
results will be realized or that actual results will not be
significantly higher or lower than projected.
Accordingly, there can be no assurances that the projections
will be realized, and actual results may vary materially from
those shown. Readers of this proxy statement are cautioned not
to place undue reliance on the specific portions of the
financial projections set forth above. The inclusion of these
internal financial projections in this proxy statement should
not be regarded as an indication that we, Intercell, Merger Sub
and any of our or their respective affiliates, advisors or
representatives considered or consider the internal financial
forecasts to be necessarily predictive of actual future events,
and the internal financial projections should not be relied upon
as such. None of us, Intercell, Merger Sub nor our or their
respective affiliates, advisors, officers, directors, partners
or representatives can give any assurance that actual results
will not differ from these internal financial projections or
undertake any obligation to update or otherwise revise or
reconcile the internal financial projections to reflect
circumstances existing after the date such projections were
generated or to reflect the occurrence of future events even in
the event that any or all of the assumptions underlying the
projections are shown to be in error. Neither we, nor, to our
knowledge, Intercell or Merger Sub, intends to make publicly
available any update or other revisions to these internal
financial projections. No one has made or makes any
representation to any stockholder or anyone else regarding the
information included in these projections.
STOCK
OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL
STOCKHOLDERS
The following table sets forth information regarding beneficial
ownership of common stock as of July 2, 2008 by:
(i) selected executive officers and all of our directors
and (ii) any entity who, to our knowledge, owns 5% or more
of the common
55
stock on an as-converted basis. Unless otherwise indicated, the
address for each of the following stockholders is
c/o Iomai
Corporation, 20 Firstfield Road, Gaithersburg, Maryland 20878,
telephone
(301) 556-4500;
facsimile
(301) 556-4501.
Beneficial ownership is determined in accordance with the rules
and regulations of the United States Securities and Exchange
Commission. In computing the number of shares beneficially owned
by a person and the percentage ownership of that person, shares
of common stock subject to options or warrants held by that
person that are currently exercisable or exercisable within
sixty (60) days of July 2, 2008 are deemed
outstanding. These shares, however, are not deemed outstanding
for the purposes of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table
and pursuant to applicable community property laws, each
stockholder named in the table has sole voting and investment
power with respect to the shares set forth opposite that
stockholders name.
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|
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|
|
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Number of Shares
|
|
Percent of Shares
|
|
|
Beneficially
|
|
Beneficially
|
Name
|
|
Owned(1)
|
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Owned (%)
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Directors and Executive Officers:
|
|
|
|
|
|
|
|
|
Stanley C. Erck(2)
|
|
|
804,321
|
|
|
|
3.0
|
|
Gregory M. Glenn(3)
|
|
|
569,479
|
|
|
|
2.2
|
|
Russell P. Wilson(4)
|
|
|
229,803
|
|
|
|
*
|
|
M. James Barrett(5)
20451 Seneca Meadows Parkway
Germantown, MD 20876
|
|
|
6,979,832
|
|
|
|
26.5
|
|
R. Gordon Douglas(6)
265 Old Black Point Road
Niantic, CT 06357
|
|
|
28,653
|
|
|
|
*
|
|
Richard Douglas(7)
500 Kendall Street
Cambridge, MA 02142
|
|
|
32,114
|
|
|
|
*
|
|
Thomas M. Vernon(8)
2134 Spring Street
Philadelphia, PA 19103
|
|
|
11,500
|
|
|
|
*
|
|
F. Weller Meyer(9)
7600 Leesburg Pike, East Building, Suite 200
Falls Church, VA 22043
|
|
|
57,500
|
|
|
|
*
|
|
All directors & executive officers as a group
(8 persons)
|
|
|
8,713,202
|
|
|
|
31.3
|
|
5% Stockholders
|
|
|
|
|
|
|
|
|
Entities affiliated with New Enterprise Associates(10)
1119 St. Paul Street
Baltimore, MD 21202
|
|
|
6,972,332
|
|
|
|
26.5
|
|
Essex Woodlands Health Ventures(11)
435 Tasso Street
Palo Alto, CA 94301
|
|
|
2,802,686
|
|
|
|
10.9
|
|
Visium Asset Management, LP(12)
|
|
|
1,579,053
|
|
|
|
6.1
|
|
Gruber and McBaine Capital Management(13)
|
|
|
2,165,120
|
|
|
|
8.4
|
|
Entities affiliated with Glazer Capital(14)
|
|
|
1,310,796
|
|
|
|
5.1
|
|
|
|
|
*
|
|
Represents beneficial ownership of less than one percent of
our outstanding common stock
|
|
(1)
|
|
Options are calculated on an as exercised basis.
|
|
(2)
|
|
Includes 25,000 shares of common stock held by
Mr. Erck and 779,321 shares of common stock issuable
to Mr. Erck upon the exercise of options vested as of
60 days following July 2, 2008.
|
|
(3)
|
|
Includes 71,885 shares of common stock held by
Dr. Glenn and 497,594 shares of common stock issuable
to Dr. Glenn upon the exercise of options vested as of
60 days following July 2, 2008.
|
|
(4)
|
|
Includes 11,000 shares of common stock held by
Mr. Wilson and 218,803 shares of common stock issuable
to Mr. Wilson upon the exercise of options vested as of
60 days following July 2, 2008.
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56
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|
|
(5)
|
|
Includes 7,500 shares of common stock issuable to
Dr. Barrett upon the exercise of options vested as of
60 days following July 2, 2008, 6,417,187 shares
of common stock and warrants to purchase 550,535 shares of
common stock exercisable within 60 days of July 2,
2008, held by New Enterprise Associates 10, Limited Partnership
(as reported in schedule I of the voting agreement), and
4,610 shares of common stock held by NEA Ventures 2002,
Limited Partnership (as reported in schedule I of the
voting agreement).
|
|
(6)
|
|
Includes 28,653 shares of common stock issuable to
Dr. G. Douglas upon the exercise of options vested as of
60 days following July 2, 2008.
|
|
(7)
|
|
Includes 3,461 shares of common stock held by
Dr. R. Douglas and 28,653 shares of common stock
issuable to Dr. R. Douglas upon the exercise of options
vested as of 60 days following July 2, 2008.
|
|
(8)
|
|
Includes 4,000 shares of common stock held by
Dr. Vernon and 7,500 shares of common stock issuable
to Dr. Vernon upon the exercise of options vested as of
60 days following July 2, 2008.
|
|
(9)
|
|
Includes 50,000 shares of common stock held by
Mr. Meyer and 7,500 shares of common stock issuable to
Mr. Meyer upon the exercise of options vested as of
60 days following July 2, 2008.
|
|
(10)
|
|
Includes 6,417,187 shares of common stock and warrants
to purchase 550,535 shares of common stock exercisable
within 60 days of July 2, 2008, held by New Enterprise
Associates 10, Limited Partnership (as reported in
schedule I of the voting agreement), and 4,610 shares
of common stock held by NEA Ventures 2002, Limited Partnership
(as reported in schedule I of the voting agreement). Based
on information reported in an amendment to Schedule 13D
filed with the SEC on May 30, 2008, as the individual
general partners of NEA Partners 10, Limited Partnership, which
is the sole general partner of New Enterprise Associates
10, Limited Partnership, each of M. James Barrett, Peter J.
Barris, C. Richard Kramlich, Charles W. Newhall III, Mark W.
Perry, Scott D. Sandell and Eugene A. Trainor III may be
deemed to share voting and dispositive power with respect to the
shares held by New Enterprise Associates 10, Limited
Partnership.
|
|
(11)
|
|
Includes 2,802,686 shares of common stock held by Essex
Woodlands Health Ventures V, L.P. (as reported in
schedule I of the voting agreement). Based on information
reported in an amendment to Schedule 13D filed with the SEC on
November 17, 2007, James L. Currie, Martin P. Sutter, and
Immanual Thangaraj have the power by unanimous consent and
through the general partner of Essex Woodlands Health
Ventures V, L.P. (i) to cause Essex Woodlands Health
Ventures V, L.P. to buy and sell marketable securities of
portfolio companies and (ii) to direct the voting of such
securities. As a result, Messrs. Currie, Sutter, and
Thangaraj may also be deemed to have shared dispositive power
and voting power with respect to the securities held by Essex
Woodlands Health Ventures V, L.P..
|
|
(12)
|
|
Includes 1,404,053 shares of common stock held by Visium
Asset Management, L.P., and warrants to purchase
175,000 shares of common stock exercisable within
60 days of July 2, 2008 (as reported in the
Schedule 13G filed by Visium Asset Management, L.P. on
February 14, 2008). Based on information reported in the
Schedule 13G filed on February 14, 2008, by virtue of
his position as the managing member of JG Asset, LLC, Jacob
Gottlieb may be deemed to have sole voting and dispositive power
with respect to the shares owned by Visium Asset Management,
L.P.
|
|
(13)
|
|
Includes 1,833,411 shares of common stock held by Gruber
and McBaine Capital Management, LLC, 138,254 shares of
common stock held by Jon D. Gruber, and 175,955 shares of
common stock held by J. Patterson McBaine (as reported in the
Schedule 13G filed by Gruber and McBaine Capital
Management, LLC on January 29, 2008 and including warrant
exercises on May 27, 2008), and warrants to purchase
17,500 shares of common stock exercisable within
60 days of July 2, 2008. Based on information reported
in the Schedule 13G filed on January 29, 2008, Jon D.
Gruber, J. Patterson McBaine and Eric B. Swergold may be deemed
to share voting and dispositive power with respect to the shares
held by Gruber and McBaine Capital Management, LLC.
|
|
(14)
|
|
Includes 1,226,972 shares of common stock beneficially
owned by Glazer Capital, LLC and an additional 83,824 shares of
common stock beneficially owned by Paul J. Glazer (as reported
in the Schedule 13G filed by Glazer Capital, LLC on
June 20, 2008). Based on information reported in the
Schedule 13G filed on June 20, 2008, Paul J. Glazer
has sole voting and dispositive power with respect to 83,824
shares of common stock, and shared voting and dispositive power
with Glazer Capital, LLC with respect to 1,226,972 shares
of common stock.
|
57
OTHER
MATTERS
As of the date of this proxy statement, we know of no matters
that will be presented for consideration at the special meeting
other than as described in this proxy statement.
MULTIPLE
STOCKHOLDERS SHARING ONE ADDRESS
In accordance with
Rule 14a-3(e)(1)
under the Exchange Act, one proxy statement will be delivered to
two or more stockholders who share an address, unless we have
received contrary instructions from one or more of the
stockholders. We will deliver promptly upon written or oral
request a separate copy of the proxy statement to a stockholder
at a shared address to which a single copy of the proxy
statement was delivered. Requests for additional copies of the
proxy statement, and requests that in the future separate proxy
statements be sent to stockholders who share an address, should
be directed to Iomai Corporation, 20 Firstfield Road,
Gaithersburg, Maryland 20878, telephone
(301) 556-4500;
facsimile
(301) 556-4501.
Similarly, if you share an address with another stockholder and
have received multiple copies of our proxy materials, you may
write or call us at the above address and phone number to
request delivery of a single copy of these materials.
FUTURE
STOCKHOLDER PROPOSALS
Proposals to be included in the proxy statement.
If
the merger is completed, all shares of our common stock will be
held by Intercell, we will not have public stockholders and
there will be no public participation in any future meeting of
stockholders. However, if the merger is not completed, under SEC
rules, if a stockholder wants us to include a proposal in our
proxy statement and form of proxy for presentation at our 2009
Annual Meeting of Stockholders, the proposal must be received by
us, attention: Chairman of the Board, at our principal executive
offices by December 5, 2008.
Other proposals (not to be included in the proxy
statement).
Under our by-laws, a stockholder must
follow certain procedures to nominate persons for election as
directors or to introduce an item of business at an annual
meeting of stockholders. Among other requirements, these
procedures require any nomination or proposed item of business
to be submitted in writing to our Chairman of the Board at our
principal executive offices. Assuming our 2009 Annual Meeting of
Stockholders is not more than 30 days before or
30 days after May 14, 2009, if you wish to bring
business before the 2009 Annual Meeting, you must give us
written notice by February 28, 2009.
However, if at least 60 days notice or prior public
disclosure of the date of the 2009 Annual Meeting is given or
made and the date of the 2009 Annual Meeting is not within
30 days before or after May 14, 2009, notice by the
stockholder must be received no later than March 30, 2009.
If less than 60 days notice or prior public
disclosure of the date of the 2009 Annual Meeting is given or
made and the date of the 2009 Annual Meeting is not within
30 days before or after May 14, 2009, notice by the
stockholder must be received no later that 15 days after
the date Iomai sends notice of the 2009 Annual Meeting. If a
stockholder fails to provide timely notice of a proposal to be
presented at the 2009 Annual Meeting, the proxies designated by
the Board of Directors will have discretionary authority to vote
on the proposal.
SPECIAL
NOTE REGARDING FORWARD LOOKING STATEMENTS
The information contained in this proxy statement contains
forward-looking statements. These forward looking statements
include statements about our ability to complete the merger and
statements related to our internal financial projections.
When used in this proxy statement, we intend the words
may, believe, anticipate,
plan, expect, predict,
estimate, require, intend
and similar words to identify forward looking
statements. These forward looking statements involve
risks, uncertainties and other factors that may cause our actual
results, performance or achievements, to be far different from
that suggested by our forward looking statements. Such risks and
uncertainties include our inability to complete the merger and
the other risks and factors identified from time to time in
reports we file with the SEC or in public statements issued by
us. You should not place undue reliance on our forward looking
statements. We disclaim any obligation to update any of these
factors or to publicly announce the results of any revisions to
any of these forward looking statements.
58
WHERE YOU
CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
document we file with the Securities and Exchange Commission at
the facilities of the SEC located at 100 F Street,
N.E., Washington, D.C. 20549. Please call the Securities
and Exchange Commission at 1 800-SEC-0330 for further
information on its public reference rooms. Our Securities and
Exchange Commission filings also are available to the public at
its website at www.sec.gov.
THIS PROXY STATEMENT DOES NOT CONSTITUTE OUR SOLICITATION OF A
PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM
WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN SUCH
JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED
IN THIS PROXY STATEMENT TO VOTE YOUR SHARES AT THE SPECIAL
MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS
PROXY STATEMENT. THIS PROXY STATEMENT IS DATED JULY 10,
2008. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN
THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT
DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS
DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.
THE INFORMATION CONTAINED IN THIS PROXY STATEMENT SPEAKS ONLY AS
OF THE DATE INDICATED ON THE COVER OF THIS PROXY STATEMENT
UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE
APPLIES.
59
Annex A
Agreement
and Plan of Merger
dated as of May 12, 2008
among
Intercell AG,
Zebra Merger Sub, Inc.
and
Iomai Corporation
Table of
Contents
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Page
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ARTICLE 1 THE MERGER
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A-1
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SECTION 1.1. The Merger
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A-1
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SECTION 1.2. Effects of the Merger
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A-1
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SECTION 1.3. Closing
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A-1
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SECTION 1.4. Consummation of the Merger
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A-1
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SECTION 1.5. Organizational Documents; Directors and
Officers
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A-2
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ARTICLE 2 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
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A-2
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SECTION 2.1. Conversion of Merger Sub Capital Stock
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A-2
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SECTION 2.2. Conversion of Company Common Stock
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A-2
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SECTION 2.3. Exchange of Certificates
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A-3
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SECTION 2.4. Company Options
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A-4
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SECTION 2.5. Warrants
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A-5
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SECTION 2.6. Taking of Necessary Action; Further Action
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A-5
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SECTION 2.7. Adjustments to Prevent Dilution
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A-5
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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A-5
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SECTION 3.1. Organization
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A-5
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SECTION 3.2. Capitalization
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A-6
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SECTION 3.3. Authorization; No Conflict
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A-7
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SECTION 3.4. Subsidiaries
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A-8
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SECTION 3.5. SEC Reports and Financial Statements
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A-8
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SECTION 3.6. Absence of Material Adverse Changes, etc.
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A-9
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SECTION 3.7. Litigation
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A-9
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SECTION 3.8. Information Supplied
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A-10
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SECTION 3.9. Brokers or Finders Fees
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A-10
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SECTION 3.10. Employee Plans
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A-10
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SECTION 3.11. Opinion of Cowen
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A-11
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SECTION 3.12. Taxes
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A-11
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SECTION 3.13. Environmental Matters
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A-12
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SECTION 3.14. Compliance
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A-13
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SECTION 3.15. Intellectual Property
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A-15
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SECTION 3.16. Material Contracts
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A-17
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SECTION 3.17. Government Contract Regulatory Matters
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A-19
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SECTION 3.18. Employment Matters
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A-20
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SECTION 3.19. Real Property
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A-21
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SECTION 3.20. Insurance
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A-21
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SECTION 3.21. Affiliate Transactions
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A-21
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SECTION 3.22. State Takeover Statutes
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A-21
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SECTION 3.23. Assets
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A-21
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SECTION 3.24. Foreign Corrupt Practices Act
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A-21
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB
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A-22
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SECTION 4.1. Organization
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A-22
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SECTION 4.2. Merger Sub
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A-22
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SECTION 4.3. Authorization; No Conflict
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A-22
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SECTION 4.4. Information Supplied
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A-23
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A-i
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Page
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SECTION 4.5. Brokers or Finders Fees
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A-23
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SECTION 4.6. Available Funds
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A-23
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SECTION 4.7. Absence of Litigation
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A-23
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SECTION 4.8. No Ownership of Company Capital Stock
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A-23
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ARTICLE 5 CONDUCT OF BUSINESS PENDING THE MERGER
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A-23
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SECTION 5.1. Conduct of Business by the Company Pending the
Merger
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A-23
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SECTION 5.2. Conduct of Business by Parent Pending the
Merger
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A-25
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ARTICLE 6 ADDITIONAL AGREEMENTS
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A-25
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SECTION 6.1. Preparation of Proxy Statement; Stockholders
Meeting
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A-25
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SECTION 6.2. Employee Benefit Matters
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A-26
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SECTION 6.3. Regulatory Filings
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A-27
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SECTION 6.4. Public Statements
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A-27
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SECTION 6.5. Standard of Efforts
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A-27
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SECTION 6.6. Notification of Certain Matters
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A-28
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SECTION 6.7. Access to Information; Confidentiality
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A-28
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SECTION 6.8. No Solicitation
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A-28
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SECTION 6.9. Indemnification and Insurance
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A-30
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SECTION 6.10. Section 16 Matters
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A-31
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SECTION 6.11. Stockholder Litigation
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A-31
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SECTION 6.12. Estoppel Certificate
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A-31
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SECTION 6.13. Interim Financing
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A-31
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ARTICLE 7 CONDITIONS
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A-32
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SECTION 7.1. Conditions to Each Partys Obligation To
Effect the Merger
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A-32
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SECTION 7.2. Conditions to Obligations of Parent and Merger
Sub
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A-32
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SECTION 7.3. Conditions to Obligation of the Company
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A-33
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SECTION 7.4. Frustration of Conditions
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A-33
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ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER
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A-33
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SECTION 8.1. Termination
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A-33
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SECTION 8.2. Effect of Termination
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A-34
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SECTION 8.3. Fees and Expenses
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A-34
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SECTION 8.4. Amendment
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A-36
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SECTION 8.5. Waiver
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A-36
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ARTICLE 9 GENERAL PROVISIONS
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A-36
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SECTION 9.1. Notices
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A-36
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SECTION 9.2. Representations and Warranties
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A-37
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SECTION 9.3. Knowledge Qualifiers
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A-37
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SECTION 9.4. Interpretations
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A-37
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SECTION 9.5. Governing Law; Jurisdiction
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A-37
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SECTION 9.6. Counterparts; Facsimile Transmission of
Signatures
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A-37
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SECTION 9.7. Assignment; No Third Party Beneficiaries
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A-38
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SECTION 9.8. Severability
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A-38
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SECTION 9.9. Entire Agreement
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A-38
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SECTION 9.10. Enforcement
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A-38
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A-ii
Defined
Terms
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Affiliate
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A-21
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Agreement
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A-1
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Appraisal Shares
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A-2
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Authorizations
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A-14
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Average Price
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A-35
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Bankruptcy and Equity Exception
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A-7
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Bayh-Dole Act
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A-16
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Business Day
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A-37
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Certificate of Merger
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A-1
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Certificates
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A-3
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CFIUS
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A-8
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Closing
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A-1
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Closing Date
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A-1
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Code
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A-4
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Company
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A-1
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Company Adverse Recommendation Change
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A-29
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Company Board
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A-4
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Company Charter Documents
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A-6
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Company Common Stock
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A-1
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Company Disclosure Letter
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A-5
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Company Employee
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A-26
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Company Employee Benefit Plan
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A-10
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Company Financial Statements
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A-8
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Company Intellectual Property
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A-16
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Company Material Adverse Effect
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A-5
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Company Preferred Stock
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A-6
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Company Recommendation
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A-26
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Company SEC Reports
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A-8
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Company Stockholders Meeting
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A-26
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Confidentiality Agreement
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A-28
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Constituent Corporations
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A-1
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Contract
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A-18
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controlled by
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A-21
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Copyrights
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A-16
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Cowen
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A-10
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Current Government Contract
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A-19
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D&O Insurance
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A-30
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DGCL
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A-1
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DOJ
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A-27
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DPA
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A-8
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Drug Laws
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A-14
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Effective Date
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A-2
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Effective Time
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A-2
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Environmental Laws
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A-13
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Environmental Permits
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A-12
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ERISA
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A-11
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Exchange Act
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A-8
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A-iii
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Exchange Agent
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A-3
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Exchange Agreement
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A-1
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Exchange Fund
|
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A-3
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FDA
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A-14
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FDCA
|
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|
A-14
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FTC
|
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A-27
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GAAP
|
|
|
A-8
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GLP
|
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|
A-14
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Good Clinical Practice
|
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A-14
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Government Contract
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A-19
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Governmental Authority
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A-7
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Hazardous Substance
|
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|
A-13
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HSR Act
|
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A-8
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ICH
|
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A-14
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Indemnified Party
|
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A-30
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Indemnifying Parties
|
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A-30
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Informed Consent
|
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A-14
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Institutional Review Boards
|
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A-14
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Intellectual Property
|
|
|
A-16
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Interim Note
|
|
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A-31
|
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Internet Property
|
|
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A-16
|
|
Judgment
|
|
|
A-7
|
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Know-How
|
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A-16
|
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Law
|
|
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A-7
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|
Lease
|
|
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A-17
|
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Leased Real Property
|
|
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A-17
|
|
Lien
|
|
|
A-7
|
|
Loan
|
|
|
A-31
|
|
Loan Default
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Loans
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Material Contract
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Maximum Amount
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Merger
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Merger Consideration
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Merger Sub
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Nasdaq
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Option Consideration
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Options
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Outside Date
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Parent
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Parent Financial Advisor
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Patents
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Permits
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Person
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PHSA
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Proceedings
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Proxy Statement
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Representatives
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Required Company Stockholder Vote
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Sarbanes-Oxley Act
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SEC
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Section 262
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Securities Act
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Stock Plans
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Subsidiary
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Superior Proposal
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Superior Proposal Notice
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Surviving Corporation
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Takeover Proposal
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Tax Return
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Taxes
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Termination Fee
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To the knowledge of the Company
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Trade Secrets
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Trademark
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Transactions
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under common control with
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Voting Agreement
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Warrant
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A-v
Agreement and Plan of
Merger
(this
Agreement
), dated as of
May 12, 2008, among
Intercell AG
, a
joint stock corporation incorporated under the laws of the
Republic of Austria (
Parent
),
Zebra Merger Sub,
Inc.
, a Delaware corporation and wholly-owned subsidiary
of Parent (
Merger Sub
), and
Iomai Corporation
,
a Delaware corporation (the
Company
).
Introduction
The respective Boards of Directors of Merger Sub and the
Company, and the Management Board and Supervisory Board of
Parent, have approved the acquisition of the Company by Parent
on the terms and subject to the conditions set forth in this
Agreement.
In furtherance of such acquisition, the respective Boards of
Directors of Merger Sub and the Company, and the Management
Board and Supervisory Board of Parent, have approved and
declared advisable the merger (the
Merger
) of
Merger Sub into the Company, on the terms and subject to the
conditions set forth in this Agreement, whereby each issued and
outstanding share of common stock, par value $.01 per share, of
the Company (the
Company Common Stock
) not
owned by Parent, Merger Sub or the Company as of the Effective
Time shall be converted into the right to receive the Merger
Consideration.
Concurrently with the execution of this Agreement and as an
inducement to and condition of Parents willingness to
enter into this Agreement, each of the stockholders of the
Company listed on Schedule I hereto is entering into an
Exchange Agreement, dated as of the date hereof (the
Exchange Agreement
), the form of which is
attached hereto as Exhibit A, pursuant to which, among
other things, each such stockholder agrees to exchange all of
its shares of Company Common Stock for (i) shares of common
stock in Parent immediately prior to the Effective Time or
(ii) cash immediately following the Effective Time.
Concurrently with the execution of this Agreement and as an
inducement to and condition of Parents willingness to
enter into this Agreement, each of the stockholders of the
Company listed on Schedule II hereto is entering into a
Voting Agreement, dated as of the date hereof (the
Voting Agreement
), the form of which is
attached hereto as Exhibit B, pursuant to which, among
other things, each such stockholder agrees to vote its shares of
Company Common Stock in favor of this Agreement, the Merger and
the other transactions contemplated by this Agreement.
In consideration of the foregoing and of the representations,
warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1.
The Merger
. At the Effective Time, in
accordance with this Agreement and the Delaware General
Corporation Law (the
DGCL
), Merger Sub shall
be merged with and into the Company, the separate existence of
Merger Sub shall cease, and the Company shall continue as the
surviving corporation. For purposes of this Agreement,
(i) the corporation surviving the Merger after the
Effective Time may be referred to as the
Surviving
Corporation
and (ii) the Company and Merger Sub
are collectively referred to as the
Constituent
Corporations
.
SECTION 1.2.
Effects of the Merger
. The Merger shall
have the effects set forth in Section 259 of the DGCL.
SECTION 1.3.
Closing
. The closing of the Merger (the
Closing
) shall take place at 10:00 a.m.
(East Coast time) on a date to be specified by the parties,
which shall be no later than the second Business Day after
satisfaction or (to the extent permitted by applicable Law)
waiver of the conditions set forth in Article 7 (other than
any such conditions which by their nature cannot be satisfied
until the Closing Date, which shall be required to be so
satisfied or (to the extent permitted by applicable Law) waived
on the Closing Date), at the offices of Covington &
Burling LLP, 1201 Pennsylvania Avenue, N.W., Washington, DC
20004, unless another time, date or place is agreed to in
writing by the parties hereto (such date upon which the Closing
occurs, the
Closing Date
).
SECTION 1.4.
Consummation of the Merger
. On the
Closing Date, as soon as practicable after the Closing, the
parties hereto shall cause the Merger to be consummated by
filing with the Secretary of State of the State of Delaware a
certificate of merger or other appropriate documents (in any
such case, the
Certificate of Merger
) in such
form as required by, and executed in
A-1
accordance with, the relevant provisions of the DGCL and shall
make all other filings or recordings required under the DGCL.
The Merger shall become effective at such time as the
Certificate of Merger is duly filed with such Secretary of
State, or at such later time as Parent and the Company shall
agree and specify in the Certificate of Merger (the time and
date the Merger becomes effective being the
Effective
Time
and
Effective Date
,
respectively).
SECTION 1.5.
Organizational Documents; Directors and
Officers
. The certificate of incorporation of the Surviving
Corporation shall be amended at the Effective Time to conform to
Exhibit C, and as so amended, shall be the certificate of
incorporation of the Surviving Corporation until thereafter
amended as provided therein and under the DGCL. The By-laws of
Merger Sub, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until
thereafter amended as provided therein and under the DGCL. The
directors of Merger Sub immediately prior to the Effective Time
shall be the initial directors of the Surviving Corporation and
shall serve until the earlier of their resignation, removal or
death or their respective successors are duly elected or
appointed and qualified, as the case may be. The officers of
Merger Sub immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation and shall serve
until the earlier of their resignation, removal or death or
until their respective successors have been duly elected or
appointed and qualified, as the case may be.
ARTICLE 2
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.1.
Conversion of Merger Sub Capital Stock
.
At the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Merger Sub or the Company, each
share of Merger Sub capital stock will be converted into and
become one fully paid and nonassessable share of common stock,
par value $0.01 per share, of the Surviving Corporation.
SECTION 2.2.
Conversion of Company Common Stock
. At
the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Merger Sub, the Company or any
holder of shares of Company Common Stock:
(a) Each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than
(i) any shares to be canceled pursuant to
Section 2.2(b) and (ii) any Appraisal Shares) shall be
canceled and shall be converted automatically into the right to
receive $6.60 in cash (the
Merger
Consideration
) from Parent. As of the Effective Time,
all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be canceled and shall cease
to exist, and each holder of a certificate representing any such
shares of Company Common Stock shall cease to have any rights
with respect thereto, except the right to receive the Merger
Consideration upon surrender of such certificate in accordance
with Section 2.3, without interest.
(b) Each share of Company Common Stock held in the treasury
of the Company and each share of Company Common Stock owned by
Merger Sub, Parent or any wholly-owned Subsidiary of Parent
immediately prior to the Effective Time shall be canceled
without any conversion thereof and no payment or distribution
shall be made with respect thereto.
(c)
Appraisal Rights
. Notwithstanding anything in
this Agreement to the contrary, shares of Company Common Stock
that are outstanding immediately prior to the Effective Time and
that are held by any Person who is entitled to demand and
properly demands appraisal of such shares (
Appraisal
Shares
) pursuant to, and who complies in all respects
with, Section 262 of the DGCL
(
Section 262
) shall not be converted
into the right to receive Merger Consideration as provided in
Section 2.2(a), but rather the holders of Appraisal Shares
shall be entitled to payment of the fair value of such Appraisal
Shares in accordance with Section 262 (and at the Effective
Time, such Appraisal Shares shall no longer be outstanding and
shall automatically be canceled and shall cease to exist, and
such holders shall cease to have any right with respect thereto,
except the right to receive the fair value of such Appraisal
Shares in accordance with Section 262);
provided
,
however
, that if any such holder shall fail to perfect or
otherwise shall waive, withdraw or lose the right to appraisal
under Section 262, then the right of such holder to be paid
the fair value of such holders Appraisal Shares shall
cease and such Appraisal Shares shall be deemed to have been
converted as of the Effective Time into, and to have become
exchangeable solely for the right to receive, Merger
Consideration as provided in Section 2.2(a). The Company
shall serve reasonably prompt notice to Parent of any demands
received by the Company for appraisal of any shares of Company
Common Stock, and Parent shall have the right to participate in
all negotiations and proceedings with respect to such demands.
Prior to the Effective Time, the Company shall not, without the
prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands, or agree to
do any of the foregoing. Any portion of the Merger Consideration
made available by the Exchange Agent pursuant to
Section 2.3(a) to pay for Appraisal Shares shall be
returned to Parent upon demand.
A-2
SECTION 2.3.
Exchange of Certificates
.
(a)
Exchange Agent
. Prior to the Effective Time,
Parent shall enter into an agreement with such bank or trust
company as may be designated by Parent and reasonably acceptable
to the Company (the
Exchange Agent
), which
shall provide for the payment of Merger Consideration in
accordance with the terms of this Section 2.3. At or prior
to the Effective Time, Parent shall, or shall take all steps
necessary to enable and cause the Surviving Corporation to,
deposit with the Exchange Agent in accordance with this
Article 2, the cash necessary to pay for the shares of
Company Common Stock converted into the right to receive Merger
Consideration (the
Exchange Fund
). The
Exchange Fund shall not be used for any other purpose. Such
Merger Consideration deposited with the Exchange Agent shall,
pending its disbursement to holders of shares of Company Common
Stock, be invested by the Exchange Agent as directed by Parent
in (i) direct obligations of the United States of America,
(ii) obligations for which the full faith and credit of the
United States of America is pledged to provide for payment of
all principal and interest, (iii) commercial paper
obligations receiving the highest rating from either
Moodys Investor Services, Inc. or Standard &
Poors, a division of The McGraw Hill Companies or
(iv) money market funds investing solely in a combination
of the foregoing, or a combination thereof, as directed by and
for the benefit of the Surviving Corporation;
provided
,
however
, that no gain or loss thereon shall affect the
amounts payable hereunder and Parent shall take all actions
necessary to ensure that the Exchange Fund includes at all times
cash sufficient to satisfy Parents obligation under this
Agreement to pay the Merger Consideration. Any net profit
resulting from, or interest or income produced by, such amounts
on deposit with the Exchange Agent will be payable to Parent or
as Parent otherwise directs.
(b)
Exchange Procedures
. As soon as reasonably
practicable after the Effective Time but in any event not later
than five Business Days thereafter, the Exchange Agent shall
mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (the
Certificates
) whose shares were converted
into the right to receive the Merger Consideration pursuant to
Section 2.2, (i) a letter of transmittal (in customary
form which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in
surrendering the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation
to the Exchange Agent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be
required by the Exchange Agent, the holder of such Certificate
shall receive in exchange therefor the amount of cash which the
shares of Company Common Stock theretofore represented by such
Certificate entitle such holder to receive pursuant to the
provisions of this Article 2 and the Certificate so
surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock that is not
registered in the transfer records of the Company, payment may
be made to a Person other than the Person in whose name the
Certificate so surrendered is registered if such Certificate
shall be properly endorsed or otherwise be in proper form for
transfer and the Person requesting such issuance shall pay any
transfer or other taxes required by reason of the payment to a
Person other than the registered holder of such Certificate or
establish to the satisfaction of Parent that such tax has been
paid or is not applicable. Each Certificate shall be deemed at
any time after the Effective Time to represent only the right to
receive upon surrender in accordance with this Section 2.3
the Merger Consideration into which the shares of Company Common
Stock shall have been converted pursuant to Section 2.2. No
interest shall be paid or shall accrue on any cash payable to
holders of Certificates pursuant to the provisions of this
Article 2.
(c)
No Further Ownership Rights in Company Common
Stock
. The Merger Consideration paid upon the surrender for
exchange of Certificates in accordance with the terms of this
Article 2 shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company
Common Stock theretofore represented by such Certificates, and
there shall be no further registration of transfers on the stock
transfer books of the Company of the shares of Company Common
Stock which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented
to the Surviving Corporation or the Exchange Agent for any
reason, they shall be canceled and exchanged as provided in this
Article 2, except as otherwise provided by Law.
(d)
Termination of Exchange Fund
. Any portion of the
Exchange Fund which remains undistributed to the holders of
Certificates for six months after the Effective Time shall be
delivered to Parent, upon demand, and any holders of
Certificates who have not theretofore complied with this
Article 2 shall thereafter look only to Parent (subject to
abandoned property, escheat or similar Laws, as general
creditors thereof) for payment of their claim for Merger
Consideration.
(e)
No Liability
. None of Parent, Merger Sub, the
Company or the Exchange Agent shall be liable to any Person in
respect of any cash from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat
or similar Law. If any Certificate shall not have been
surrendered prior to five years after the Effective Time (or
immediately prior to such earlier date on which any amounts
payable pursuant to this Article 2 would otherwise escheat
to or become the property of any Governmental Authority), any
such amounts shall, to the extent permitted by applicable Law,
become the property of the Surviving Corporation, free and clear
of all claims or interest of any Person previously entitled
thereto.
A-3
(f)
Lost Certificates
. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by
such Person of a bond in such reasonable amount as Parent may
direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificate
the applicable Merger Consideration with respect thereto
pursuant to this Agreement.
(g)
Withholding Rights
. Parent shall be entitled to
deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company
Common Stock such amounts as it is required to deduct and
withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the
Code
) and the rules and regulations
promulgated thereunder, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by
Parent and paid to the appropriate taxing authorities, such
withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of
Company Common Stock in respect of which such deduction and
withholding was made by Parent.
SECTION 2.4.
Company Options
. Except as set forth on
Section 2.4 of the Company Disclosure Letter:
(a) As soon as practicable following the date of this
Agreement, the Board of Directors of the Company (the
Company Board
) (or, if appropriate, any
committee thereof administering the Stock Plans) shall adopt
such resolutions or take such other actions as may be required
to provide that each Option outstanding at the applicable time
described below (i) issued under either the 1998 Stock
Option Plan, as amended, or the 1999 Stock Incentive Plan
(whether or not then vested or exercisable) shall be fully
vested and exercisable no less than 30 days prior to the
Effective Time and (ii) issued under the 2005 Incentive
Plan that, under the terms of the 2005 Incentive Plan and the
applicable Option agreement, will vest prior to the Effective
Time shall be exercisable prior to the Effective Time. To the
extent that an Option issued under the 1998 Stock Option Plan,
as amended, or the 1999 Stock Incentive Plan that is vested and
exercisable pursuant to the terms of this Section 2.4 or
under the terms of the applicable Option Plan and the applicable
Option agreement is not exercised prior to the Effective Time,
such Option shall be cancelled and terminated, and converted at
the Effective Time into the right to receive a cash amount equal
to the Option Consideration for each share of Company Common
Stock then subject to the Option. If the Option Consideration
shall be zero or a negative number, the Option shall be
cancelled and terminated and no such cash payment shall be due
and owing. Except as otherwise provided below, any Option
Consideration due and owing shall be paid by Parent and the
Surviving Corporation as soon after the Closing Date as shall be
practicable and in any event, within three Business Days
following the Effective Time. Notwithstanding the foregoing,
Parent and the Surviving Corporation shall be entitled to deduct
and withhold from any Option Consideration otherwise payable
such amounts as may be required to be deducted and withheld with
respect to the making of such payment under the Code, or any
provision of state, local or foreign tax law.
(b) Each Option issued under the 2005 Incentive Plan that
is vested under the terms of the 2005 Incentive Plan and the
applicable Option agreement but is not exercised prior to the
Effective Time, shall be cancelled and terminated at the
Effective Time and the holder of such cancelled and terminated
Option shall receive as of the Effective Time a vested option to
purchase shares of Parent (the
Substituted Vested
Option
). Each Option issued under the 2005 Incentive
Plan that, under the terms of the 2005 Incentive Plan and the
applicable Option agreement, will not vest prior to the
Effective Time shall be cancelled and terminated at the
Effective Time and the holder of such cancelled and terminated
Option shall receive as of the Effective Time an unvested option
to purchase shares of Parent (the
Substituted Unvested
Option
). A Substituted Unvested Option will vest on
the same schedule as the corresponding Option under the 2005
Incentive Plan that was cancelled and terminated in exchange for
such Substituted Unvested Option. However, a Substituted
Unvested Option may be subject to accelerated vesting under the
terms of an option holders employment or change in control
agreement with Parent or the Surviving Corporation, as the case
may be. For the avoidance of doubt, the exercise price and
number of shares subject to the Substituted Vested Option and
the Substituted Unvested Option shall be determined in a manner
consistent with the objective that the substitution or
assumption of Options satisfy the requirements of Treasury
Regulations
Section 1.409A-1(b)(5)(v)(D).
The Surviving Corporation and its Affiliates shall treat the
Substituted Vested Options and the Substituted Unvested Options
for tax reporting and withholding purposes in accordance with
the regulations and other applicable guidance under
Section 409A of the Code.
(c) Prior to the Effective Time, the Company shall use
reasonable best efforts to make any amendments to the terms of
the Stock Plans and obtain any consents from holders of Options
that, in each case, are necessary to give effect to the
transactions contemplated by this Section 2.4 and,
notwithstanding anything to the contrary, payment may be
withheld in respect of any Option until any necessary consents
are obtained. Prior to the Effective Time, the Company shall
take all actions necessary to terminate all its Stock Plans,
such termination to be effective at or before the Effective Time.
(d) For purposes of this Agreement,
Option
Consideration
means, with respect to any share of
Company Common Stock issuable under a particular Option, an
amount equal to (i) the Merger Consideration per share of
Company Common Stock less (ii) the exercise price payable
in respect of each share of Company Common Stock issuable under
such Option;
Options
means
A-4
any option granted, and, immediately before the Effective Time
not exercised, expired or terminated, to purchase shares of
Company Common Stock pursuant to the Stock Plans; and
Stock Plans
means the Companys 1998
Stock Option Plan, as amended, 1999 Stock Incentive Plan and
2005 Incentive Plan.
SECTION 2.5.
Warrants
. No later than 15 calendar
days prior to the record date applicable to the Company
Stockholders Meeting, the Company shall deliver to each holder
of a Warrant any notice regarding the Transactions as required
by the Warrants. Each Warrant that is outstanding immediately
prior to the Effective Time and is not exercised prior to the
Effective Time shall cease to represent a right to acquire
shares of the Company Common Stock and shall be converted, at
the Effective Time, into the right to receive (upon surrender of
the warrant certificate) an amount in cash, without interest,
equal to the product of (a) the amount, if positive, by
which the Merger Consideration exceeds the per share exercise
price of such Warrant and (b) the number of shares of
Company Common Stock issuable upon exercise of such Warrant.
Following the Effective Time, Parent shall, or shall cause the
Surviving Corporation to, honor the obligations of the Company
under the Warrants. As used in this Agreement,
Warrant
means a Common Stock Purchase Warrant
issued by the Company pursuant to the Securities Purchase
Agreement dated as of March 2, 2007.
SECTION 2.6.
Taking of Necessary Action; Further
Action
. Each of Parent, Merger Sub and the Company shall use
reasonable best efforts to take all such actions as may be
necessary or appropriate in order to effectuate the Merger under
the DGCL as promptly as commercially practicable. If at any time
after the Effective Time, any further action is necessary or
desirable to carry out the purposes of this Agreement and to
vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers
and franchises of either of the Constituent Corporations, the
officers and directors of the Surviving Corporation are fully
authorized in the name of each Constituent Corporation or
otherwise to take, and shall take, all such lawful and necessary
action.
SECTION 2.7.
Adjustments to Prevent Dilution
. In the
event that the Company changes the number of shares of Company
Common Stock or securities convertible or exchangeable into or
exercisable for shares of Company Common Stock issued and
outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse stock split),
stock dividend or distribution, recapitalization, merger, issuer
tender or exchange offer, or other similar transaction, the
Merger Consideration shall be equitably adjusted.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the disclosure letter (
provided
,
however
, that a matter disclosed with respect to one
representation or warranty shall also be deemed to be disclosed
with respect to each other representation or warranty to which
the matter disclosed reasonably relates, but only to the extent
such relationship is reasonably apparent on the face of such
disclosure) previously delivered by the Company to Parent (the
Company Disclosure Letter
), the Company
hereby represents and warrants to Parent and Merger Sub as
follows:
SECTION 3.1.
Organization
.
(a) The Company is a corporation validly existing and in
good standing under the laws of the State of Delaware. The
Company has all requisite power and authority necessary to
enable it to own, operate and lease its properties and to carry
on its business as now conducted. The Company possesses all
licenses, franchises, permits, exemptions, clearances,
certificates, approvals and authorizations, and any applications
for, and supplements or amendments to, the foregoing
(collectively,
Permits
) from Governmental
Authorities, or required by Governmental Authorities to be
obtained, in each case necessary for the lawful conduct of its
business as now conducted, the lack of which, individually or in
the aggregate, has not had and would not reasonably be expected
to have a Company Material Adverse Effect. A
Company
Material Adverse Effect
means any event, condition,
change, occurrence or development of a state of facts that,
individually or in the aggregate with all other events,
conditions, changes, occurrences or developments of a state of
facts, is materially adverse to (A) the business,
operations, properties, assets, liabilities (contingent or
otherwise), condition (financial or otherwise) or results of
operations of the Company or (B) the ability of the Company
to timely perform its obligations under this Agreement in
compliance with its terms or to consummate the Transactions;
provided
,
however
, that no such event, condition,
change, occurrence or development of a state of circumstances
shall be considered in determining whether a Company Material
Adverse Effect has occurred to the extent that it is proximately
caused by (1) changes in economic or vaccine industry
conditions in the United States (and in each case to the extent
that the Company is not disproportionately adversely affected),
(2) acts of terrorism, war or natural disasters occurring
after the date hereof (and in each case to the extent that the
Company is not disproportionately affected), (3) any loss
of employees, customers or suppliers proximately caused by the
pendency or announcement of the Transactions (
provided
,
however
, that any legal or contractual
A-5
consequence of the execution of this Agreement or the
consummation of the Transactions that has not been disclosed to
Parent in this Agreement or the Company Disclosure Letter shall
not be excluded under this clause (3)); (4) any loss of
funding under a Government Contract proximately caused by the
fact that Parent is a
non-U.S. entity;
(5) changes in GAAP; (6) the failure of the Company to
meet revenue, earnings or other internal or analysts
projections, in and of itself (it being understood that any
event, condition, change, occurrence or development of a state
of facts that may have caused or contributed to any such failure
may be deemed to constitute, in and of itself, a Company
Material Adverse Effect and may be taken into consideration when
determining whether a Company Material Adverse Effect has
occurred); (7) any action taken by the Company with
Parents written consent or the taking of any action
expressly required by this Agreement; (8) a decline in the
Companys stock price, in and of itself (it being
understood that any event, condition, change, occurrence or
development of a state of facts that may have caused or
contributed to any such decline may be deemed to constitute, in
and of itself, a Company Material Adverse Effect and may be
taken into consideration when determining whether a Company
Material Adverse Effect has occurred); and (9) any legal
proceedings commenced by any stockholder of the Company against
the Company or any member of the Company Board or Parent arising
out of the execution of this Agreement or the consummation of
the Transactions.
(b) The copies of the Third Amended and Restated
Certificate of Incorporation and the Third Amended and Restated
By-laws of the Company (the
Company Charter
Documents
) which are incorporated by reference as
exhibits to the Companys Annual Report on
Form 10-K
for the year ended December 31, 2007 are complete and
correct copies of such documents and contain all amendments
thereto as in effect on the date of this Agreement. All such
Company Charter Documents are in full force and effect and the
Company is not in violation of any of their respective
provisions. The Company has made available to Parent correct and
complete copies of the minutes (or, in the case of minutes that
have not yet been finalized, a brief summary of the meeting) of
all meetings of stockholders, the Company Board and each
committee of the Company Board since January 1, 2005;
provided
,
however
, that the Company shall not be
obligated to furnish to Parent any minutes for meetings to the
extent that they discuss the Transactions or alternative
transactions considered by the Company Board.
SECTION 3.2.
Capitalization
.
(a) The authorized capital stock of the Company consists of
(i) 200,000,000 shares of Company Common Stock and
(ii) 25,000,000 shares of preferred stock, par value
$.01 per share (
Company Preferred Stock
). As
of the date of this Agreement: (i) 25,601,344 shares
of Company Common Stock were issued and outstanding;
(ii) no shares of Company Preferred Stock were issued or
outstanding; (iii) no shares of Company Common Stock were
held by the Company in its treasury; (iv) there were
outstanding Options to purchase 4,404,876 shares of Company
Common Stock and 4,818,507 shares of Company Common Stock
were reserved for issuance under the Stock Plans (including upon
exercise of the Options); and (v) there were outstanding
Warrants exercisable for 2,202,139 shares of Company Common
Stock and such number of shares of Company Common Stock were
reserved for issuance upon conversion of the Warrants.
Section 3.2(a) of the Company Disclosure Letter sets forth,
as of the date of this Agreement, each equity-based award and
Option outstanding under the Stock Plans indicating the
applicable Stock Plan and type of award such as an
incentive stock option (as defined in
Section 422 of the Code) or a nonqualified stock option,
the extent to which such award or option is vested and
exercisable or subject to acceleration, the date on which such
award or Option was granted, the Stock Plan under which such
award or Option was granted, the number of shares of capital
stock of the Company issuable thereunder and the expiration date
and exercise or conversion price relating thereto. All of the
Options have been granted solely to employees, consultants (who
are individuals) or directors of the Company. All Options have
been granted in accordance with the terms of the Stock Plans and
applicable Law, and, with respect to each outstanding Option,
the exercise price is no less than the fair market value of such
Option on the date of grant and the Option is not otherwise
subject to the requirements of Section 409A of the Code.
The Company has not declared or paid any dividend, or declared
or made any distribution on, or authorized the creation or
issuance of, or issued, or authorized or effected any
split-up
or
any other recapitalization of, any of its capital stock, or
directly or indirectly redeemed, purchased or otherwise acquired
any of its outstanding capital stock within the last twelve
months. The Company has not heretofore agreed to take any such
action that is pending as of the date of this Agreement, and
there are no outstanding contractual obligations of the Company
of any kind to redeem, purchase or otherwise acquire any
outstanding shares of capital stock of the Company other than as
provided in the Exchange Agreement.
(b) The issued and outstanding shares of Company Common
Stock have been, and all such shares of Company Common Stock
that may be issued prior to the Effective Time will be when
issued, duly authorized and validly issued, are fully paid and
nonassessable, and are free of preemptive rights. Other than the
Company Common Stock, there are no outstanding bonds,
debentures, notes or other indebtedness or securities of the
Company having the right to vote (or, other than the outstanding
Options and Warrants, convertible into, or exchangeable for,
securities having the right to vote) on any matters on which
stockholders of the Company may vote. There are no stockholder
agreements, voting trusts or other agreements or understandings
to which the Company is a party relating to the voting or
disposition of any shares of the capital stock of the Company or
granting to any Person or group of Persons the right to elect,
or to designate or nominate for election, a director to the
Company Board.
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(c) Except as indicated in Section 3.2(a), as of the
date of this Agreement, (i) no shares of capital stock or
other voting securities of the Company are issued, reserved for
issuance or outstanding, and (ii) there are no outstanding
securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which
the Company is a party or bound (A) obligating the Company
to issue, deliver, register or sell, or cause to be issued,
delivered, registered or sold, additional shares of capital
stock or other equity interests in, or any security convertible
or exercisable for or exchangeable into any capital stock of or
other equity interest in or other voting securities of, the
Company, (B) obligating the Company to issue, grant, extend
or enter into any such option, warrant, call, right, security,
commitment, contract, arrangement or undertaking, or
(C) that give any Person the right to receive any economic
benefit or right similar to or derived from the economic
benefits and rights occurring to holders of capital stock of the
Company.
SECTION 3.3.
Authorization; No Conflict
.
(a) The Company has the requisite corporate power and
authority to enter into and deliver this Agreement and all other
agreements and documents contemplated hereby to which it is a
party and to carry out its obligations hereunder and thereunder
and to consummate the Transactions. The execution and delivery
of this Agreement by the Company, the performance by the Company
of its obligations hereunder and the consummation by the Company
of the Transactions have been duly and validly authorized and
approved by the Company Board. No other corporate proceedings on
the part of the Company are necessary to authorize the execution
and delivery of this Agreement, the performance by the Company
of its obligations hereunder and the consummation by the Company
of the Transactions, except for the approval of this Agreement
by the holders of a majority of the issued and outstanding
shares of Company Common Stock (the
Required Company
Stockholder Vote
). No other vote of the Companys
stockholders is necessary in connection with this Agreement, the
Exchange Agreement, the Voting Agreement or the consummation of
any of the Transactions. This Agreement has been duly and
validly executed and delivered by the Company and, assuming the
due authorization, execution and delivery hereof by Parent and
Merger Sub, constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar Laws of general
application affecting or relating to the enforcement of
creditors rights generally and equitable principles of general
applicability, whether considered in a proceeding at law or in
equity (the
Bankruptcy and Equity Exception
).
(b) The Company Board, at a meeting duly called and held
prior to the execution of this Agreement, duly and unanimously
adopted resolutions (i) authorizing the execution, delivery
and performance of this Agreement, (ii) approving, adopting
and declaring advisable this Agreement, the Merger and the other
transactions contemplated by this Agreement,
(iii) authorizing, approving and declaring advisable the
Exchange Agreement and the transactions contemplated thereby,
(iv) authorizing, approving and declaring advisable the
Voting Agreement and the transactions contemplated thereby,
(v) determining that the terms of the Merger and the other
Transactions are fair to and in the best interests of the
Company and its stockholders, and (vi) authorizing the
submission of this Agreement to the Companys stockholders
for their approval and recommending that the Companys
stockholders adopt this Agreement. As used in this Agreement,
Transactions
means the Merger and the other
transactions contemplated by each of this Agreement and the
Exchange Agreement.
(c) Neither the execution and delivery of this Agreement by
the Company nor the consummation by the Company of the
Transactions nor compliance by the Company with any of the
provisions herein will (i) result in a violation or breach
of or conflict with the Company Charter Documents,
(ii) result in a violation or breach of or conflict with
any provisions of, or result in the loss of any benefit under or
constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in
the termination, cancellation of, or give rise to a right of
purchase under, or accelerate the performance required by, or
result in a right of termination or acceleration under, or
result in the creation of any Lien upon any of the properties or
assets owned or operated by the Company under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
deed of trust, license, contract, lease, agreement or other
instrument or obligation of any kind to which the Company is a
party or by which the Company or any of its properties or assets
may be bound, or (iii) subject to obtaining or making the
consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph
(d) below, violate any judgment, ruling, order, writ,
injunction or decree of any Governmental Authority
(
Judgment
) or any statute, code, decree, law,
ordinance, rule or regulation or orders of Governmental
Authorities (
Law
) applicable to the Company
or its properties or assets, other than any such event described
in items (ii) or (iii) which, individually or in the
aggregate, has not had and would not reasonably be expected to
have a Company Material Adverse Effect. As used in this
Agreement,
Lien
means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
(d) No consent, permit, approval, order or authorization
of, or registration, declaration or filing with, any Federal,
state, local or foreign governmental or regulatory (including
stock exchange) authority (a
Governmental
Authority
) is necessary to be obtained or made by the
Company in connection with the Companys execution,
delivery and performance of this Agreement or the consummation
by the Company of the Transactions, except for
(i) compliance with the DGCL, with respect to the filing of
the Certificate of Merger, (ii) compliance with and filings
pursuant to the
Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as
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amended, and the rules and regulations promulgated thereunder
(the
HSR Act
) and other applicable foreign
competition or antitrust laws, if any, (iii) the filing
with the United States Securities and Exchange Commission (the
SEC
) of a proxy statement relating to the
Company Stockholders Meeting (such proxy statement, as amended
or supplemented from time to time, the
Proxy
Statement
), and such reports under Section 13 or
16 of the Securities Exchange Act of 1934, as amended (the
Exchange Act
) and the rules and regulations
promulgated thereunder, as may be required in connection with
this Agreement and the Transactions, (iv) compliance with
the rules of The Nasdaq Stock Market LLC
(
Nasdaq
), (v) compliance with the
applicable requirements of the Committee on Foreign Investment
in the United States (
CFIUS
), pursuant to
Section 721 of the Defense Production Act of 1950 (codified
at 50 U.S.C. §2170) (the
DPA
),
(vi) compliance with the blue sky laws of
various states, (vii) completing any notice required under
the FDCA or similar Laws of jurisdictions other than the United
States, (viii) any such consent, approval, order,
authorization, registration, declaration or filing necessary as
a result of Parents status as an entity organized under
the laws of the Republic of Austria, and (ix) any such
consent, approval, order, authorization, registration,
declaration or filing, the lack of which, individually or in the
aggregate, has not had and would not reasonably be expected to
have or result in a Company Material Adverse Effect.
SECTION 3.4.
Subsidiaries
. The Company has no, and
has never had any, Subsidiaries. As used in this Agreement,
(i)
Subsidiary
means with respect to any
Person, another Person, an amount of the voting securities or
other voting ownership interests of which is sufficient to elect
at least a majority of its Board of Directors or other governing
body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly
by such first Person; and (ii)
Person
means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization, limited
liability company or other entity.
SECTION 3.5.
SEC Reports and Financial Statements
.
(a) Since February 1, 2006, the Company has filed with
the SEC all forms, reports, schedules, registration statements,
definitive proxy statements and other documents (collectively,
including all exhibits thereto, the
Company SEC
Reports
) required to be filed by the Company with the
SEC in a timely manner. As of their respective filing dates, and
giving effect to any amendments or supplements thereto filed
prior to the date of this Agreement, the Company SEC Reports
complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the
Securities
Act
), the Exchange Act and the Sarbanes-Oxley Act, as
the case may be, and the respective rules and regulations of the
SEC promulgated thereunder applicable to such Company SEC
Reports, and none of the Company SEC Reports contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The consolidated financial statements (including, in
each case, any related notes and schedules thereto)
(collectively, the
Company Financial
Statements
) of the Company contained in the Company
SEC Reports comply as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared
in conformity with United States generally accepted accounting
principles (
GAAP
) (except, in the case of
unaudited statements, as permitted by
Form 10-Q
of the SEC) applied on a consistent basis during the periods
involved (except as otherwise noted therein) and present fairly
the consolidated financial position and the results of
operations and cash flows of the Company as of the dates or for
the periods presented therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments).
(c) With respect to each annual report on
Form 10-K,
each quarterly report on
Form 10-Q
and each amendment of any such report included in the Company
SEC Reports filed since February 1, 2006, the principal
executive officer and principal financial officer of the Company
have made all certifications required by the Sarbanes-Oxley Act
of 2002 (the
Sarbanes-Oxley Act
) and any
related rules and regulations promulgated by the SEC, and the
statements contained in any such certifications are complete and
correct.
(d) The Company has established and maintains disclosure
controls and procedures (as such term is defined in
Rule 13a-15(e)
or
15d-15(e)
promulgated by the SEC under the Exchange Act); such disclosure
controls and procedures are designed to ensure that material
information relating to the Company required to be disclosed in
the Companys reports filed or submitted under the Exchange
Act is made known to the Companys principal executive
officer and its principal financial officer by others within
those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being
prepared; and, to the knowledge of the Company, such disclosure
controls and procedures are effective in timely alerting the
Companys principal executive officer and its principal
financial officer to material information required to be
included in the Companys periodic reports required under
the Exchange Act and to ensure that information required to be
disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in SEC rules and
forms.
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(e) The Company is in compliance in all material respects
with all current listing and corporate governance requirements
of Nasdaq, and is in compliance in all material respects with
all rules, regulations and requirements of the Sarbanes-Oxley
Act and the SEC.
(f) The Companys principal executive officer and its
principal financial officer have disclosed, based on their most
recent completed evaluation, to the Companys auditors and
the audit committee of the Company Board and to Parent,
(i) all significant deficiencies in the design or operation
of internal controls which could adversely affect the
Companys ability to record, process, summarize and report
financial data and have identified for the Companys
auditors any material weaknesses in internal controls and
(ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Companys internal controls.
(g) Since February 1, 2006, the Company has not
identified any material weaknesses in the design or operation of
its internal control over financial reporting. To the knowledge
of the Company, there is no reason to believe that its auditors
and its principal executive officer and principal financial
officer will not be able to give the certifications and
attestations required pursuant to the rules and regulations
adopted pursuant to Section 404 of the Sarbanes-Oxley Act,
without qualification, when next due. The Company maintains a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with managements general or specific
authorizations; (ii) access to assets is permitted only in
accordance with managements general or specific
authorization; and (iii) the recorded accountability for
assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(h) The Company has no liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise)
required to be reflected or reserved against on a consolidated
balance sheet of the Company prepared in accordance with GAAP or
the notes thereto, except liabilities or obligations that
(i) are accrued or reserved against in the most recent
Company Financial Statements included in the Company SEC Reports
filed prior to the date of this Agreement or are reflected in
the notes thereto, (ii) were incurred in the ordinary
course of business since the date of such Company Financial
Statements and, individually and in the aggregate, have not had
and would not reasonably be expected to have a Company Material
Adverse Effect, (iii) are incurred in connection with the
Transactions, (iv) have been discharged or paid in full
prior to the date of this Agreement in the ordinary course of
business, or (v) individually or in the aggregate, have not
been and would not reasonably be expected to be material to the
Company.
(i) Prior to the date of this Agreement, the Company has
made available to Parent complete and correct copies of all
comment letters from the SEC since October 3, 2005 through
the date of this Agreement with respect to any of the Company
SEC Reports and all correspondence since October 3, 2005
through the date of this Agreement from the SEC or the DOJ
relating to sales and other business practices of the Company.
As of the date of this Agreement, there are no outstanding or
unresolved comments in comment letters received from the SEC
staff with respect to any of the Company SEC Reports.
(j) To the knowledge of the Company, as of the date of this
Agreement, there are no SEC inquiries or investigations or
internal investigations pending or threatened, in each case
regarding any accounting practices of the Company or any
malfeasance by any director or executive officer of the Company.
Except as set forth in Company compliance reports made available
to Parent prior to the date of this Agreement, since
October 3, 2005 through the date of this Agreement, there
have been no internal investigations regarding accounting or
revenue recognition discussed with, reviewed by or initiated at
the direction of the principal executive officer, principal
financial officer, general counsel or similar legal officer, the
Company Board or any committee thereof.
SECTION 3.6.
Absence of Material Adverse Changes,
etc
. Between January 1, 2008 and the date of this
Agreement, the Company has conducted its business in the
ordinary course of business consistent with past practice and
there has not been or occurred:
(a) any event, condition, change, occurrence or development
of a state of circumstances which, individually or in the
aggregate, has had or would reasonably be expected to have a
Company Material Adverse Effect; or
(b) any event, condition, action or occurrence that, if
taken during the period from the date of this Agreement through
the Effective Time, would constitute a breach of
Section 5.1(b).
SECTION 3.7.
Litigation
. There are no suits, claims,
actions, proceedings, arbitrations, mediations, or, to the
knowledge of the Company, governmental investigations, informal
inquiries or requests for documents, whether by subpoena or
informal letter (
Proceedings
), pending or, to
the knowledge of the Company, threatened in writing against the
Company, against any of their respective directors, officers,
employees or agents or which affect the assets or operations of
the Company, except where such Proceedings would not reasonably
be expected to result in a Judgment for money damages in excess
of $150,000 and would not
A-9
reasonably be expected to result in material injunctive relief.
Neither the Company nor any of its properties is or are subject
to any material Judgment.
SECTION 3.8.
Information Supplied
. None of the
information supplied or to be supplied by the Company
specifically for inclusion or incorporation by reference in the
Proxy Statement will, at the date it is first mailed to the
Companys stockholders or at the time of the Company
Stockholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading and will not, at the time of the Company Stockholders
Meeting, omit to state any material fact necessary to correct
any statement in any earlier communication from the Company with
respect to the solicitation of proxies for the Company
Stockholders Meeting which shall have become false or misleading
in any material respect. The Proxy Statement will comply as to
form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder. No
representation or warranty is made by the Company with respect
to statements made or incorporated by reference therein based on
information supplied by Parent in writing specifically for
inclusion or incorporation by reference in the Proxy Statement.
SECTION 3.9.
Brokers or Finders Fees
.
Except for Cowen and Company, LLC (
Cowen
), no
agent, broker, investment banker, Person or firm acting on
behalf of the Company or under the Companys authority is
or will be entitled to any advisory, commission or brokers
or finders fee or similar fee or commission or
reimbursement of expenses from any of the parties hereto in
connection with any of the Transactions. The Company has
heretofore delivered to Parent a complete and correct copy of
the Companys engagement letter with Cowen, which letter
describes all fees payable to Cowen in connection with the
Transactions, all agreements under which any such fees or any
expenses are payable and all indemnification and other
agreements related to the engagement of Cowen.
SECTION 3.10.
Employee Plans
.
(a) Section 3.10 of the Company Disclosure Letter sets
forth all Company Employee Benefit Plans established,
maintained, adopted, participated in, sponsored, contributed or
required to be contributed to, or provided by, the Company and
under which the Company would reasonably be expected to have any
liability. As used in this Agreement,
Company Employee
Benefit Plan
means any welfare benefit plan within the
meaning of Section 3(1) of ERISA, any pension benefit plan
within the meaning of Section 3(2) of ERISA, and any other
material plan, program, policy, practice, agreement or
arrangement providing compensation or benefits in any form to
any current or former employee, officer, director, independent
contractor or consultant of the Company or any beneficiary or
dependent thereof, whether written or unwritten, formal or
informal, including any other pension, profit-sharing, bonus,
incentive compensation, deferred compensation, vacation, sick
pay, stock purchase, stock option, phantom equity, severance,
employment, consulting, independent contractor, unemployment,
hospitalization or other medical, dental, vision, life, or other
insurance, long- or short-term disability, change of control,
fringe benefit, cafeteria plan or any other plan, program,
policy, agreement or arrangement.
(b) With respect to each Company Employee Benefit Plan, the
Company has made available to Parent a true, correct and
complete copy of: (i) each writing constituting a part of
any written Company Employee Benefit Plan and all amendments
thereto, and all trusts or service agreements relating to the
administration and recordkeeping of the Plan; (ii) the
three most recent Annual Reports (Form 5500 Series)
including all applicable schedules (other than
Schedule SSA), if any, for each Company Employee Benefit
Plan that is subject to such reporting requirements;
(iii) the current summary plan description and any material
modifications thereto, if any, or any similar written summary
provided to participants with respect to any plan for which no
summary plan description exists; (iv) the most recent
determination letter (or if applicable, advisory or opinion
letter) from the Internal Revenue Service, if any, and any
pending applications for a determination letter; and
(v) all material notices given to such Company Employee
Benefit Plan or to the Company by the Internal Revenue Service,
Department of Labor, Pension Benefit Guarantee Corporation, or
other governmental agency relating to such Company Employee
Benefit Plan or provided to any such entity by the Company
Employee Benefit Plan or to the Company.
(c) Each Company Employee Benefit Plan that is intended to
be qualified within the meaning of
Section 401(a) of the Code has been the subject of a
favorable determination, advisory or opinion letter from the
Internal Revenue Service on which the Company is entitled to
rely, and no event has occurred and no condition exists that
would reasonably be expected to adversely affect the qualified
status of any such Company Employee Benefit Plan.
(d) The Company has (i) filed or caused to be filed
all returns and reports on the Company Employee Benefit Plans
that it
and/or
any
such plan are required to file and (ii) paid or made
adequate provision for all fees, interest, penalties,
assessments or deficiencies that have become due pursuant to
those returns or reports or pursuant to any assessment or
adjustment that has been made relating to those returns or
reports.
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(e) Each Company Employee Benefit Plan has been operated
and administered in all material respects in accordance with its
provisions and in compliance with all provisions of ERISA, the
Code and all Laws and regulations applicable to the Company
Employee Benefit Plans. All contributions required to have been
made to any Company Employee Benefit Plan (or to any person
pursuant to the terms thereof) have been made or the amount of
such payment or contribution obligation has been appropriately
reflected in the books of the Company.
(f) The Company has not engaged in any non-exempt
prohibited transaction, within the meaning of Section 4975
of the Code or Section 406 of ERISA, as a fiduciary or
party in interest with respect to any Company Employee Benefit
Plan. To the knowledge of the Company, no prohibited transaction
has occurred with respect to any Company Employee Benefit Plan.
(g) No Company Employee Benefit Plan is subject to
Title IV of ERISA or Section 412 of the Code, or is a
multiemployer plan within the meaning of
Section 3(37) of ERISA, and the Company has never
sponsored, contributed to, been required to contribute to, or
had any obligations or incurred any liability under any plan
that is subject to Title IV of ERISA or Section 412 of
the Code, or is a multiemployer plan within the
meaning of Section 3(37) of ERISA.
(h) The Company has not offered to provide life, health or
medical benefits or insurance coverage to any individual, or to
the family members of any individual, for any period extending
beyond the termination of the individuals employment,
except to the extent required by the COBRA provisions in ERISA
and the Code or similar provisions of state law.
(i) Neither the execution and delivery of this Agreement
nor the consummation of the Transactions, alone or in connection
with any other event (such as a termination of employment) will
(i) result in any payment becoming due under any Company
Employee Benefit Plan, (ii) increase any benefits otherwise
payable under any Company Employee Benefit Plan, or
(iii) result in the acceleration of the time of payment or
vesting of any such benefit. No benefit that is or may become
payable by any Company Employee Benefit Plan as a result of, or
arising under, this Agreement shall constitute an excess
parachute payment (as defined in section 280G(b)(1)
of the Code) that is subject to the imposition of an excise tax
under section 4999 of the Code or that would not be
deductible by reason of section 280G of the Code.
(j) Except for benefits that may become payable in
connection with the Transactions and that are set forth in
Section 3.10(i) of the Company Disclosure Letter, to the
knowledge of the Company no events have occurred or are expected
to occur with respect to any Company Employee Benefit Plan that
would cause a material change in the cost of providing the
benefits under such plan or would cause a material change in the
cost of providing for other liabilities of such plan.
(k) There is no other entity with which the Company is
considered a single employer under Section 414(b), (c), or
(m) of the Code.
(l) As used in this Agreement
ERISA
means the Employee Retirement Income Securities Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
SECTION 3.11.
Opinion of Cowen
. Cowen has delivered
to the Company Board its written opinion (or oral opinion to be
confirmed in writing), dated as of the date hereof, that, as of
such date, the Merger Consideration to be received by holders of
the Company Common Stock (other than Parent and its affiliates
and the stockholders of the Company party to the Exchange
Agreement) pursuant to this Agreement is fair, from a financial
point of view, to such holders of the Company Common Stock. A
written copy of such opinion will be provided to Parent as soon
as practicable after the date hereof. The Company has been
authorized by Cowen to permit the inclusion of such opinion in
its entirety
and/or
references thereto in the Proxy Statement, provided that the
opinion is reproduced therein in full and any such references
are in a form reasonably acceptable to Cowen and its counsel.
SECTION 3.12.
Taxes
.
(a) Except as, individually or in the aggregate, has not
had and would not reasonably be expected to have a Company
Material Adverse Effect, (i) the Company has timely filed
all material federal, state, local, and other Tax Returns
required to be filed by it in the manner prescribed by
applicable law and all such Tax Returns are true, complete and
correct; and (ii) all Taxes shown as due on such Tax
Returns have been paid in full, and the Company has made
adequate provision (or adequate provision has been made on its
behalf) for all accrued Taxes not yet due. The accruals and
reserves for Taxes reflected in the Companys
Form 10-K
for the fiscal year ended December 31, 2007 are adequate to
cover all Taxes accruing through such date. There are no Liens
on any of the assets, rights or properties of the Company with
respect to Taxes, other than Liens for Taxes not yet due and
payable or for Taxes that the Company is contesting in good
faith through appropriate proceedings.
A-11
(b) Except as, individually or in the aggregate, has not
had and would not reasonably be expected to have a Company
Material Adverse Effect, (i) any deficiency resulting from
any audit or examination relating to Taxes of the Company by any
taxing authority has been paid or is being contested in good
faith and in accordance with Law and is adequately reserved for
on the balance sheets contained in the Company Financial
Statements in accordance with GAAP; (ii) no deficiencies
have been asserted in writing against the Company as a result of
examinations by any state, local, federal or foreign taxing
authority that, by application of the same principles, might
result in a proposed deficiency for the same type of Tax for any
other period not so examined which deficiency (or deficiencies),
in either case, is not (or are not) adequately reserved for in
the Company Financial Statements; and (iii) there are no
outstanding written requests, agreements, consents, or waivers
to extend the statutory period of limitations applicable to the
assessment of any Taxes or Tax deficiencies (other than pursuant
to extensions of time to file Tax Returns obtained in the
ordinary course of business).
(c) The Company has not been a party to a listed
transaction within the meaning of Treas. Reg. Sec.
1.6011-4(b).
(d) The Company is not a party to any Tax sharing
agreement, Tax indemnity obligation or similar agreement,
arrangement or practice with respect to Taxes. The Company is
not a party to any advance pricing agreement or closing
agreement relating to Taxes with any taxing authority that
remains in effect.
(e) The Company has not been a member of an affiliated
group filing a consolidated federal income Tax Return (other
than a group the common parent of which was the Company). Except
for any liability that, individually or in the aggregate, has
not had and would not reasonably be expected to have a Company
Material Adverse Effect, the Company has not been notified in
writing that it will be required to incur any liability for
Taxes of any Person (other than the Company) under Treasury
Regulation Section 1.1502-6
(or any similar provision of state, local or foreign law) with
respect to any Tax claim that has been made by a taxing
authority with respect to such other Person.
(f) Notwithstanding any other provision of this Agreement,
the Company makes no representation or warranty as to the amount
of, or as to the existence or non-existence of limitations (or
to the extent of any such limitations) on, the Companys
net operating loss carryforwards, net capital loss
carryforwards, tax credit carryforwards, or any similar Tax
attribute.
(g) As used in this Agreement
Taxes
means all taxes, levies or other like assessments, charges or
fees (including estimated taxes, charges and fees), including
income, franchise, profits, corporations, advance corporation,
gross receipts, transfer, excise, property, sales, use,
value-added, ad valorem, license, capital, wage, employment,
payroll, withholding, social security, severance, occupation,
import, custom, stamp, alternative, add-on minimum,
environmental or other governmental taxes, imposed by the United
States or any state, county, local or foreign government or
subdivision or agency thereof, including any interest, penalties
or additions to tax applicable or related thereto. As used in
this Agreement,
Tax Return
means any report,
return, statement, declaration or other written information
required to be supplied to a taxing or other Governmental
Authority in connection with Taxes.
SECTION 3.13.
Environmental Matters
.
(a) The Company is and has for the past five years been in
compliance in all material respects with all applicable
Environmental Laws, which compliance includes obtaining,
maintaining and complying with all permits, notices, licenses,
consents, certificates, approvals and authorizations
(
Environmental Permits
), if any, required
under Environmental Laws in connection with the operation of the
Companys business or owned, leased or operated real
property, and no Environmental Permit is or will be subject to
review, revision, major modification or prior consent by any
Governmental Authority as a result of the consummation of the
Transactions.
(b) Except as, individually or in the aggregate, have not
had and would not reasonably be expected to have a Company
Material Adverse Effect:
(i) there are no pending or, to the knowledge of the
Company, threatened, demands, claims, investigations,
proceedings, information requests, complaints, administrative or
judicial orders, or notices against the Company or any property
currently or formerly owned, operated or leased by the Company
alleging non-compliance with or liability under any
Environmental Law;
(ii) there are no facts, circumstances or conditions
associated with the Company or its operations or any real
property currently or formerly owned, leased or operated by the
Company or any other property, including any property to which
the Company or any Person working at the request or direction of
the Company has arranged for the disposal or treatment of
Hazardous Substances, that would reasonably be expected to give
rise to any violation of any Environmental Laws or result in the
Company incurring any liability under and Environmental Law;
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(iii) the Company has not, in the course of its business,
sent or disposed of, otherwise had taken or transported,
arranged for the taking or disposal of (on behalf of itself, a
customer or any other party) or in any other manner participated
or been involved in the taking of or disposal or release of a
Hazardous Substance to or at a site that is contaminated by any
Hazardous Substance or that, pursuant to any Environmental Law,
(A) has been placed on the National Priorities
List, the CERCLIS list, or any similar state
or federal list, or (B) is subject to or the source of a
claim, an administrative order or other request to take removal,
remedial, corrective or any other response action under any
Environmental Law or to pay for the costs of any such action at
the site; and
(iv) any storage tanks (whether above or under ground)
previously located at any real property or facility currently or
formerly owned, operated or leased by the Company were at all
times maintained, operated, sealed, closed or disposed of in
accordance with all applicable Environmental Laws.
(c) There are no circumstances or conditions relating to
the properties, assets or business of the Company that would
reasonably be expected to prevent the operations, when used and
operated in the manner currently used and operated, from
continuing to operate in material compliance with all applicable
Environmental Laws.
(d) The Company has not assumed or retained by contract
(including leases) or other binding agreement or by operation of
Law, any liabilities of a third party arising under or pursuant
to any Environmental Law or has agreed to indemnify, defend or
hold harmless any third party for any liabilities arising under
or pursuant to any Environmental Law.
(e) The Company has made available to Parent copies of all
material environmental or health and safety assessments, audits,
investigations, or similar reports pertaining to the operation
of the Companys business and the operation or use of any
real property currently or formerly owned, leased, or operated
by the Company, to the extent in the possession, custody or
control of the Company.
(f) As used in this Agreement,
(i)
Environmental Laws
means any
federal, foreign, state or local statute, law, code, or legal
requirement, including regulations, rules, orders, judgments,
judicial decisions, permits, licenses, approvals, ordinances,
injunctions, directives and the common law, pertaining or
relating to pollution, the environment, natural resources, the
protection of the environment, or human health and safety,
including any of the foregoing pertaining to (A) the
presence, receipt, manufacture, processing, generation, use,
distribution, transport, shipment, treatment, handling, storage,
disposal, removal or remediation of any Hazardous Substance;
(B) air, water (including ground, surface and drinking
water), land surface or subsurface strata, noise, or odor
pollution; (C) the release or threatened release into the
environment of any Hazardous Substance, including emissions,
discharges, injections, spills, escapes, dumping or leaching of
any Hazardous Substance; (D) the protection of natural
resources, including wildlife, marine sanctuaries, wetlands and
all endangered and threatened species; (E) storage tanks,
vessels and containers whether above- or underground, abandoned,
disposed or discarded barrels, containers and other closed
receptacles; or (F) health and safety of employees and
other persons, and (ii)
Hazardous
Substance
means, whether alone or in combination and
whether solid, liquid or gaseous, (A) biologic agents or
vectors, genetically modified organisms (whether or not living),
culture, or serum that are (i) listed in the HHS and USDA
Select Agents and Toxins pursuant to 7 CFR Part 311,
9 CFR Part 121, and 42 CFR Part 73,
and/or
those
that are not otherwise exempt under NIH guidelines for Research
Involving Recombinant DNA Molecules (2002) or otherwise
subject to regulation by Environmental Law; (B) any
hazardous substance, as defined by the Comprehensive
Environmental Response, Compensation, and Liability Act,
(C) any hazardous waste, as defined by the
Resource Conservation and Recovery Act, and (D) any
chemical, pollutant, contaminant, waste, or hazardous, dangerous
or toxic material or substance, infectious or contagious
material or substance, special waste, medical waste, biomedical
waste, mutagenic or carcinogenic material or substance,
endotoxin, blood-borne pathogen or terms of similar import
including asbestos and asbestos containing material, buried
contaminants, regulated chemicals, flammable explosives,
radiation and radioactive materials, polychlorinated biphenyls,
oil, petroleum and petroleum products and by-products, lead and
lead-based paint, pesticides, natural or synthetic gas, nuclear
fuel, nuclear material, urea formaldehyde, bacteria, fungi, mold
or any material subject to regulation, investigation, control or
remediation under any applicable Law or that is capable of
causing harm or injury to human health, natural resources or the
environment or could give rise to liability or an obligation to
remediate under any Law, all as amended or hereafter amended.
SECTION 3.14.
Compliance
.
(a) The Company is not, in any material respect, in
violation of any Law applicable to it or by which any of its
properties or other assets or any of its businesses or
operations are bound or any rule, regulation, guideline,
guidance or requirement issued under any of the foregoing nor
has it received after January 1, 2006 any written notice or
other communication, whether written or non-written, from any
Governmental Authority of any violation or any investigation
with respect to any such Law.
A-13
(b) The Company is not, in any material respect, in
violation of the Federal Food, Drug, and Cosmetic Act
(
FDCA
), the Public Health Service Act
(
PHSA
), or the regulations and regulatory
guidance promulgated thereunder or similar Laws of any foreign
jurisdiction (collectively,
Drug Laws
),
including those relating to good laboratory practices, good
clinical practices, adverse event reporting, good manufacturing
practices, recordkeeping, and filing of reports. Except for
matters governed by Environmental Laws, which are addressed in
Section 3.13 hereof, the Company has not received after
January 1, 2006 any written notice or other communication,
whether written or non-written, from the United States Food and
Drug Administration (the
FDA
) or any other
Governmental Authority alleging any violation of any Drug Law,
including any failure to maintain systems and programs adequate
to ensure compliance with any applicable Law related to product
quality, including Good Manufacturing Practice,
Good Laboratory Practice, and Good Clinical
Practice as those terms are defined by FDA and in all
applicable Drug Laws, by the Company relating to any activity
that is subject to Drug Laws. The Company has not received after
January 1, 2006 any (i) notices of inspectional
observations (including those recorded on form FDA 483),
establishment inspection reports, warning letters, untitled
letters, (ii) notice of any intention to conduct an
investigation or review, or (iii) other written documents
issued by the FDA or any other Governmental Authority that
indicate lack of compliance with any Drug Law by the Company or
by Persons who are otherwise performing services for the benefit
of the Company.
(c) The Company has all material registrations,
applications, licenses, requests for approvals, exemptions,
permits and other regulatory authorizations (collectively,
Authorizations
) from Governmental Authorities
that are required to conduct the Companys businesses as
now being conducted, and such Authorizations are in full force
and effect in all material respects. The Company has filed all
material reports, notifications and filings with, and has paid
all regulatory fees to, the applicable Governmental Authority
necessary to maintain all of such Authorizations in full force
and effect. The Company is (and since January 1, 2006 has
been) in compliance in all material respects with the terms of
all Authorizations. Since January 1, 2006, the Company has
not received written notice to the effect that a Governmental
Authority was considering the amendment, termination, revocation
or cancellation of any Authorization. The consummation of the
Merger or any of the other Transactions, in and of itself, will
not cause the revocation or cancellation of any Authorization.
(d) All preclinical tests performed in connection with or
as the basis for any submission to the FDA or other comparable
Government Authority, filed under an IND, CTA, or other foreign
equivalent or that the Company anticipates will be submitted to
FDA or other comparable Governmental Authority either
(i) have been conducted in accordance, in all material
respects, with applicable Good Laboratory Practice
(
GLP
) requirements, including those contained
in 21 C.F.R. Part 58 or (ii) involved
experimental research techniques that were not required to be
performed by a registered GLP testing laboratory (with
appropriate notice being given to FDA or the applicable
Governmental Authority, if required), but employed procedures
and controls generally used by qualified experts in the conduct
of preclinical studies.
(e) The Company has no products with marketing approval
from any Governmental Authority. All human clinical trials to
the extent conducted by the Company or to the knowledge of the
Company by a third party on behalf of the Company have been and
are being conducted in material compliance with all applicable
requirements of Good Clinical Practice,
Informed Consent and, to the knowledge of the
Company, Institutional Review Boards, as those terms
are defined by FDA and in all applicable Drug Laws relating to
clinical trials or the protection of human subjects, including
those contained in the International Conference on Harmonization
(
ICH
) E6: Good Clinical Practices
Consolidated Guideline, and in 21 C.F.R. Parts 50, 54, 56,
and 312, and the provisions governing the privacy of patient
medical records under the Health Insurance Portability and
Accountability Act of 1996 and the implementing regulations of
the United States Department of Health and Human Services, and
all applicable comparable foreign Drug Laws. Neither the
Company, nor to the knowledge of the Company, anyone acting on
behalf of the Company, has received since January 1, 2006
any notice that the FDA or any other Governmental Authority or
institutional review board has initiated, or threatened to
initiate, any clinical hold or other action to suspend any
clinical trial or suspend or terminate any IND (or foreign
equivalent thereto) sponsored by the Company, or otherwise
restrict the preclinical research on or clinical study of any
Company product candidate. Notwithstanding the foregoing, any
representation is made only to the knowledge of the Company with
respect to activities by third parties to which the Company has
transferred its regulatory obligations under the provisions of
21 C.F.R. Section 312.52 or any comparable foreign
Drug Law.
(f) All clinical trials conducted by or on behalf of the
Company and the results of all such clinical trials have been
registered and disclosed in all material respects in accordance
with all applicable Drug Laws. The Company has filed all annual
and periodic reports, amendments and IND Safety Reports required
for any of its product candidates required to be made to the FDA
or any other Governmental Authority.
(g) All manufacturing operations conducted by or, to the
knowledge of the Company, for the benefit of, the Company with
respect to Company product candidates have been and are being
conducted in accordance, in all material respects, with
applicable current Good Manufacturing Practices as that term is
defined by FDA and in all applicable Drug Laws.
A-14
(h) There are no proceedings pending or, to the knowledge
of the Company, threatened against the Company with respect to
(i) a violation by the Company of any Drug Law, or
(ii) any alleged injuries to a participant in any clinical
trial conducted by or on behalf of the Company.
(i) The Company has provided or made available for review
all material preclinical and material clinical studies and
trials conducted by the Company or by a third party on behalf of
the Company regarding the efficacy and safety of its product
candidates.
(j) The Company has delivered or made available to Parent
all material correspondence and material meeting minutes
received from or sent to the FDA and any other similar
Governmental Authority, and all written reports of phone
conversations, visits or other contact with the FDA and any
other similar Governmental Authority, relating to any product
candidate of the Company or to compliance with any Drug Law,
including any and all notices of inspectional observations,
establishment inspection reports and any other documents
received by the Company since January 1, 2006 from the FDA
or comparable foreign Governmental Authorities which bear in any
way on the Companys compliance with regulatory
requirements of the FDA or comparable foreign Governmental
Authorities, or on the likelihood or timing of approval of any
Company product candidates.
(k) None of the Company or any officer, employee or, to the
knowledge of the Company, agent of the Company, has made an
untrue statement of a material fact or fraudulent statement to
the FDA or any other Governmental Authority, failed to disclose
a material fact required to be disclosed to the FDA or any other
Governmental Authority, or committed any act, made any
statement, or failed to make any statement, that would
reasonably be expected to provide a basis for the FDA to invoke
its policy respecting Fraud, Untrue Statements of Material
Fact, Bribery, and Illegal Gratuities, set forth in 56
Fed. Reg. 46191 (September 10, 1991). Neither the Company
nor, to the knowledge of the Company, any officer, employee or
agent of the Company has been convicted of any crime or engaged
in any conduct that would reasonably be expected to result in or
that has resulted in (i) debarment under 21 U.S.C.
Section 335a or any similar state or federal Law or
(ii) exclusion from participating in the federal health
care programs under Section 1128 of the Social Security Act
or any similar state or federal Law.
SECTION 3.15.
Intellectual Property
.
(a) Schedule 3.15(a) of the Company Disclosure Letter
sets forth a complete and accurate list of all Company
Intellectual Property (other than trade secrets, Copyrights,
Know-How and goodwill attendant to the Intellectual Property and
other intellectual property rights not reducible to schedule
form), including (i) a complete and accurate list of all
Patents, (ii) a complete and accurate list of all
Copyrights, and (iii) a complete and accurate list of all
Trademarks.
(b) The Company Intellectual Property is, to the knowledge
of the Company, enforceable and valid. None of the Company
Intellectual Property has been or is the subject of (i) any
pending Proceeding (including, with respect to Patents,
inventorship challenges, interferences, reissues, reexaminations
and oppositions, and with respect to Trademarks, invalidation,
opposition, cancellation, abandonment or similar Proceeding) or
any order restricting (A) the use of such Company
Intellectual Property or (B) assignment or license thereof
by the Company, or (ii) to the knowledge of the Company,
any threatened Proceeding or claim of infringement threatened or
made in writing or any pending Proceeding to which the Company
is a party. Schedule 3.15(b) of the Company Disclosure
Letter sets forth any and all settlements or agreements reached
with respect to any such Proceedings related to the Company
Intellectual Property.
(c) All Company Intellectual Property is owned or
exclusively licensed by the Company. The Company has the right
to assign, transfer or grant to Parent all rights in and to the
Company Intellectual Property that are being assigned,
transferred or granted to Parent under this Agreement free of
any rights or claims of any Person or any other Liens, and
without payment by any party of any royalties, license fees or
other amounts to any other Person.
(d) Schedule 3.15(d) of the Company Disclosure Letter
sets forth a complete and accurate list of all royalty, license
fee and other payment obligations with respect to the Company
Intellectual Property. No royalties, license fees or other
payment obligations would be owed to any Person in connection
with the marketing, sale, use or other exploitation of any
product currently in development by the Company after the
Effective Time.
(e) The Company has not assigned, transferred, conveyed, or
granted any licenses to any Company Intellectual Property to
third parties, or otherwise caused or permitted any Lien to
attach to any Company Intellectual Property or any Patents,
Know-How, Trademarks or other Intellectual Property or related
products that would have been Company Intellectual Property, but
for such assignment, transfer, license, conveyance or Lien.
Neither the Company nor, to the knowledge of the Company, any
other Person, is party to any agreements with third parties that
materially limit or restrict use of the Company Intellectual
Property or require any payments for such use. No other Person
has any proprietary, commercial, joint ownership, royalty or
other interest in the Company Intellectual Property or the
goodwill associated therewith. The Company has not entered into
any Contract (i) granting
A-15
any Person the right to bring infringement actions with respect
to, or otherwise to enforce rights with respect to, any of the
Company Intellectual Property, (ii) expressly agreeing to
indemnify any Person against any charge of infringement of any
of the Company Intellectual Property, or (iii) granting any
Person the right to control the prosecution of any of the
Company Intellectual Property. There are no existing agreements,
options, commitments, or rights with, of or to any third party
to acquire or obtain any rights to any of the Company
Intellectual Property.
(f) To the knowledge of the Company, there is no
unauthorized use, infringement, misappropriation or violation of
any of the Company Intellectual Property by any Person. The
marketing, sale, use or other exploitation of any product
currently in development by the Company does not presently and,
to the knowledge of the Company, will not, infringe or
misappropriate or otherwise violate, as applicable, the
intellectual property rights or other proprietary rights of any
Person and the Company has not received any written notice from
any Person, or has knowledge of, any claim or assertion to the
contrary.
(g) All issuance, renewal, maintenance and other material
payments that are or have become due with respect to the Company
Intellectual Property have been timely paid by or on behalf of
the Company. All documents, certificates and other material in
connection with the Company Intellectual Property have, for the
purposes of maintaining such Company Intellectual Property, been
filed in a timely manner with the relevant Governmental
Authorities. The Company has properly filed, prosecuted and
maintained all Patents and Trademarks included in the Company
Intellectual Property and have properly filed and maintained all
other Company Intellectual Property.
(h) The Company has taken all reasonable measures to
maintain in confidence all Know-How and to protect the secrecy,
confidentiality and value of all trade secrets included within
the Company Intellectual Property.
(i) To the knowledge of the Company there are no domain
names that consist of or include the Trademarks that are owned
or registered by any Person other than the Company or its
Affiliates
(j) The Company has complied with any and all obligations
pursuant to the Bayh-Dole Act, including with respect to any
Patents that are part of the Company Intellectual Property.
(k) As used in this Agreement:
(i)
Bayh-Dole Act
means the Patent and
Trademark Law Amendments Act, 35 U.S.C. §200 et seq.,
as may be amended or succeeded from time to time, and the
regulations promulgated thereunder.
(ii)
Company Intellectual Property
means
all Intellectual Property owned, licensed or used by the Company
that is material to or necessary for the conduct of the business
of the Company as currently conducted or currently contemplated
to be conducted in the future, including the marketing, use,
sale or other exploitation of any product currently under
investigation or in development.
(iii)
Copyrights
means: (A) all
copyrights (including copyrights in any package inserts,
marketing or promotional materials, labeling information or
other text provided to consumers), whether registered or
unregistered throughout the world; (B) any registrations
and applications therefor; (C) all rights and priorities
afforded under any international treaty, convention, or the
like; (D) all extensions and renewals of any thereof;
(E) the right to sue for past, present and future
infringements of any of the foregoing, and all proceeds of the
foregoing, including licenses, royalties, income, payments,
claims, damages (including attorneys fees), and proceeds
of suit; and (F) any rights similar to the foregoing in any
country, including moral rights.
(iv)
Intellectual Property
means
intellectual property rights, including Trademarks, Internet
Property, Copyrights and Patents, whether registered or
unregistered, and all applications and registrations therefor,
Know-How, confidential information, trade secrets, and similar
proprietary rights in confidential inventions, discoveries,
analytic models, improvements, processes, techniques, devices,
methods, patterns, formulations and specifications.
(v)
Internet Property
means:
(A) all websites and rights thereto; (B) all news,
information, illustrations, graphs, charts, artwork, photos,
data, audio, video, text or other content or combinations
thereof, in any form or media, used in Company websites; and
(C) all URLs, internet protocol addresses and corresponding
domain names, including all registrations and applications
relating thereto.
(vi)
Know-How
means any proprietary or
nonproprietary information related to the manufacture,
preparation, development (including research, pre-clinical and
clinical), or commercialization of a product, including data,
product specifications, processes, product designs, plans, trade
secrets, ideas, concepts, inventions, formulae, chemical,
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pharmacological, toxicological, pharmaceutical, physical,
analytical, stability, safety, quality assurance, quality
control and clinical information, technical information,
research information, and all other confidential or proprietary
technical and business information, whether or not embodied in
any documentation or other tangible materials, including any
trade secret or other rights therein.
(vii)
Patents
means: (A) all
national, regional and international patents and patent
applications, including provisional patent applications;
(B) all patent applications filed either from such patents,
patent applications or provisional applications or from an
application claiming priority from either of these, including
divisionals, continuations,
continuations-in-part,
substitutions, provisionals, converted provisionals, and
continued prosecution applications; (C) any and all patents
that have issued or in the future issue from the foregoing
patent applications described in clauses (A) and (B),
including utility models, petty patents and design patents and
certificates of invention; (D) any and all extensions or
restorations by existing or future extension or restoration
mechanisms, including revalidations, reissues, re-examinations
and extensions (including any supplementary protection
certificates and the like) of the foregoing patents or patent
applications described in clauses (A), (B) and (C);
(E) any and all licenses, royalties, income, payments,
causes of action, claims, demands or other rights occasioned
from or because of any and all past, present and future
infringement of any of the foregoing, including all rights to
recover damages (including attorneys fees), proceeds of
suit, profits and injunctive or other relief for such
infringement; and (F) any similar rights, including
so-called pipeline protection, or any importation, revalidation,
confirmation or introduction patent or registration patent or
patent of additions to any such foregoing patent applications
and patents.
(viii)
Trade Secrets
means trade secrets
(including those trade secrets defined in the Uniform Trade
Secrets Act and under corresponding foreign statutory and common
law), business, technical and know-how information, non-public
information, and confidential information and rights to limit
the use or disclosure thereof by any Person, including databases
and collections and all rights therein.
(ix)
Trademark
means: (A) all
trademarks, trade names, trade dress, service marks, logos,
trade styles, certification marks, collective marks, designs,
industrial designs and other identifiers of source and all other
general intangibles of a like nature, whether registered or
unregistered; (B) all registrations and applications for
any of the foregoing; (C) all extensions or renewals of any
of the foregoing; (D) all of the goodwill connected with
the use of and symbolized by the foregoing; (E) all rights
and priorities afforded under the United States common
law, under the common law of any other country
or jurisdiction, or under any international treaty, convention,
or the like; (F) the right to sue for past, present and
future infringement, misappropriation or dilution of any of the
foregoing or for any injury to goodwill; (G) all proceeds
of the foregoing, including licenses, royalties, income,
payments, claims, damages (including attorneys fees) and
proceeds of suit; and (H) any rights similar to the
foregoing in any country.
SECTION 3.16.
Material Contracts
.
(a) Set forth in Section 3.16(a) of the Company
Disclosure Letter is a complete and accurate list of the
following Contracts to which the Company is a party or by which
it is bound as of the date hereof (each such Contract, whether
or not set forth in such section of the Company Disclosure
Letter, a
Material Contract
):
(i) employment Contract, severance Contract, change of
control Contract or any employee collective bargaining agreement
or other Contract with any labor union;
(ii) Contract not to compete or otherwise restricting in
any material respect the development, manufacture, marketing,
distribution or sale of any products or services (including any
Contract that requires the Company to work exclusively with any
Person in any particular area) or any other similar limitation
on the ability of the Company to transact or compete in any line
of business, in any therapeutic area, with any Person, in any
geographic area or during any period of time;
(iii) Contract containing any provision that applies to or
restricts the operations or business of any Affiliate of the
Company in a manner described in Section 3.16(a)(ii);
(iv) Contract with (A) any Affiliate of the Company or
(B) any director or officer of the Company (other than any
Contracts of the type described in Section 3.16(a)(i) or
indemnification agreements);
(v) each lease, license, sublease or other occupancy right
or similar Contract with any Person (together with any
amendments or supplements thereto) (each, a
Lease
) under which the Company is a lessee,
lessor or sublessor of, or makes available for use, to any
Person (other than the Company), any real property or any
portion or any premises otherwise occupied by or owned by the
Company (referred to herein as the
Leased Real
Property
);
A-17
(vi) Contract (A) requiring or otherwise involving the
potential payment by or to the Company of more than an aggregate
of $150,000, (B) in which the Company has granted
development rights, most favored nation pricing
provisions or marketing or distribution rights relating to any
product or product candidate or (C) in which the Company
has agreed to purchase a minimum quantity of goods relating to
any product or product candidate or has agreed to purchase goods
relating to any product or product candidate exclusively from a
certain party;
(vii) Contract for the disposition of any significant
portion of the assets or business of the Company or any
agreement for the acquisition, directly or indirectly, of a
material portion of the assets or business of any other Person;
(viii) non ordinary course Contract for any joint venture,
partnership, material research and development project or
similar arrangement;
(ix) Contract involving Company Intellectual Property;
(x) Contract (other than trade debt incurred in the
ordinary course of business) under which the Company has
borrowed money from, or issued any note, bond, debenture or
other evidence of indebtedness for borrowed money to, any Person
in excess of $150,000;
(xi) Contract (including so-called take-or-pay or keepwell
agreements) under which the Company has directly or indirectly
guaranteed indebtedness for borrowed money, liabilities or
obligations of any Person, in each case other than
(I) endorsements for the purpose of collection in the
ordinary course of business and (II) ordinary course
Contracts relating to research and development of products;
(xii) except for Contracts covered by clause (x)
above, Contract under which the Company has, directly or
indirectly, made any advance, loan, extension of credit or
capital contribution to, or other investment in, any Person;
(xiii) Contract providing for any mortgage or security
interest in material property of the Company;
(xiv) confidentiality agreements with any full time
employee of the Company that is not substantially in the form of
the Companys form of confidentiality agreement;
(xv) Contract involving a supply or tolling agreement or
arrangement that commits the Company to purchase goods or
supplies relating to any product candidate for clinical studies
or commercial use;
(xvi) Contract involving a standstill or similar obligation
of the Company to a third party;
(xvii) Current Government Contracts;
(xviii) Contract, grants, agreements, cooperative
agreements or other transactions with any Governmental Authority
other than clinical trial Contracts and investigator initiated
study Contracts; and
(xix) Contract not entered into in the ordinary course of
business that is material to the Company and not required to be
disclosed in response to any other subparagraph of this
Section 3.16(a).
(b) Each of the Material Contracts is valid, binding and in
full force and effect and is enforceable in accordance with its
terms by the Company, subject to the Bankruptcy and Equity
Exception and assuming enforceability against the
counter-parties thereto. The Company is not in default under any
Material Contract, nor, to the knowledge of the Company, does
any condition exist that, with notice or lapse of time or both,
would constitute a material default thereunder by the Company.
To the knowledge of the Company, no other party to any Material
Contract is in default thereunder, nor does any condition exist
that, with notice or lapse of time or both, would constitute a
default thereunder of such other party. The Company has not
received any notice of termination or cancellation under any
Material Contract or received any notice of breach or default in
any material respect under any Material Contract which breach
has not been cured. Except as separately identified in
Section 3.16(b) of the Company Disclosure Letter, no
approval, consent or waiver of any Person is needed in order
that any Material Contract continue in full force and effect
following the consummation of the Transactions. The Company has
provided, or otherwise made available to Parent, complete and
accurate copies of all of the Material Contracts currently in
effect. As used in this Agreement,
Contract
means any loan or credit agreement, debenture, note, bond,
mortgage, indenture, deed of trust, license, lease, contract,
purchase order or other agreement, instrument or obligation.
A-18
SECTION 3.17.
Government Contract Regulatory Matters
.
(a) The Company has delivered or made available to Parent
complete and accurate copies of all Current Government
Contracts. Each of the Current Government Contracts is valid,
binding and in full force and effect and is enforceable in
accordance with its terms by the Company subject to the
Bankruptcy and Equity Exception, and further subject to the
Governmental Authoritys rights, including its right to
terminate each such Current Government Contract for the
convenience of the Governmental Authority. As used in this
Agreement,
Current Government Contract
means
any Government Contract, the period of performance of which has
not yet expired or terminated or for which final payment has not
yet been received. As used in this Agreement,
Government Contract
means any prime contract,
subcontract, grant, cooperative agreement, base ordering
agreement, pricing agreement, letter contract or other similar
arrangement of any kind, between the Company, on the one hand,
and (i) any Governmental Authority, (ii) any prime
contractor of a Governmental Authority in its capacity as a
prime contractor, or (iii) any subcontractor with respect
to any contract of a type described in clauses (i) or
(ii) above, on the other hand.
(b) The Company has complied in all material respects with
all statutory and regulatory requirements, including the Armed
Services Procurement Act, the Service Contract Act, the
Procurement Integrity Act, the False Claims Act, the Truth in
Negotiation Act, the Federal Procurement and Administrative
Services Act, the Federal Acquisition Regulation and related
cost principles and the Cost Accounting Standards, where and as
applicable to each of the Current Government Contracts and the
representations and certifications made by the Company with
respect to such Government Contracts were accurate in all
material respects as of their effective date and, to the extent
that any such certifications are on-going, the Company has
complied with all such certifications in all material respects.
The Company has not received any terminations or default, cure
notice or show cause notice in writing from a Governmental
Authority, which such notice or writing remains unresolved with
respect to any such Current Government Contract. No past
performance evaluation received by the Company, if any, with
respect to any such Current Government Contract has set forth a
default or other material failure to perform thereunder or
termination thereof.
(c) With respect to the Current Government Contracts, no
Governmental Authority, prime contractor or higher-tier
subcontractor under a Government Contract or any other Person
has notified the Company in writing of any actual or alleged
material violation or breach of any statute, regulation,
representation, certification, disclosure obligation, contract
term, condition, clause, provision or specification that would
be reasonably expected to materially affect payments under
Current Government Contracts or materially adversely affect the
award of Government Contracts to the Company in the future. The
Company has not received any written, show cause, cure,
deficiency, default or similar notice relating to the Current
Government Contracts; and the Company has not received any
written notice terminating any of the Current Government
Contracts for convenience or indicating an intent to terminate
any of the Current Government Contracts for convenience.
(d) The Company has not received any written or, to the
knowledge of the Company, oral, notice of any outstanding Claims
(as the term Claim is defined in FAR 2.101) or
contract Disputes (as the term Disputes is used in
the Contract Disputes Act of 1978, as amended, 41 U.S.C.
601
et. seq
.) to which the Company is a party
(i) relating to the Current Government Contracts and
involving either a Governmental Authority, any prime contractor,
any higher-tier subcontractor, vendor or any third party; and
(ii) relating to the Current Government Contracts under the
Contract Disputes Act.
(e) The Company has never been and is not now, suspended,
debarred or proposed for suspension or, to the knowledge of the
Company, debarred from bidding on any Government Contract. The
Company has not received written notice of the commencement of
any suspension or debarment actions with respect to any
Government Contract nor, to the knowledge of the Company, has a
Governmental Authority threatened to initiate a suspension or
debarment action against the Company or any of its officers or
employees. To the knowledge of the Company, there is no valid
basis for a Governmental Authority to initiate against the
Company a suspension or debarment action. The Company has not
received a negative determination of responsibility issued by a
Governmental Authority against the Company during the past three
years with respect to any quotation, bid or proposal for a
Government Contract submitted by the Company.
(f) In the past six years, the Company has not undergone
and is not undergoing any audit, inspection, survey or
examination of records relating to any Government Contract, the
Company has not received written notice of, or undergone, any
investigation or review relating to any Government Contract,
and, to the knowledge of the Company, no such audit, review,
inspection, investigation, survey or examination of records is
threatened.
(g) The Company performs no activities under Current
Government Contracts, and has no other relationships with any
other Person, that could result in an organizational
conflict of interest as defined in Subpart 9.5 of the
Federal Acquisition Regulation and agency supplements thereto.
A-19
(h) During the last five years, the Company has not made
any voluntary disclosure in writing to any Governmental
Authority with respect to any material alleged irregularity,
misstatement or omission arising under or relating to a
Government Contract.
(i) None of the Companys employees, consultants or
agents is (or during the last five years has been) under
administrative, civil or criminal investigation or indictment by
any Governmental Authority with respect to the conduct of the
Companys business.
SECTION 3.18.
Employment Matters
.
(a) The Company is not a party to or otherwise bound by any
collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is
any such contract or agreement presently being negotiated, nor,
to the knowledge of the Company, is there, nor has there been in
the last five years, a representation campaign with respect to
any of the employees of the Company. As of the date of this
Agreement, there is no pending or, to the knowledge of the
Company, threatened, labor strike, dispute, walkout, work
stoppage, slow-down or lockout involving the Company.
(b) Section 3.18(b) of the Company Disclosure Letter
sets forth a complete and accurate list of the name of each
officer and employee of the Company as of the date hereof,
together with each such persons actual position or
function, date of hire, seniority recognized to the extent
preceding hire dates, status as active or non-active and as a
U.S. citizen or lawful permanent resident, annual base
salary or wages and any incentive or bonus arrangement with
respect to such person in effect on such date and the amounts
expected to be earned under those arrangements for the current
fiscal year. The Company has not received any information that
would lead it to believe that any current officer of the Company
will resign from employment with the Company because of the
consummation of the Transactions.
(c) All employees of the Company are employed on an
at-will basis and their employment can be terminated
at any time without any amounts being owed to such individual
other than with respect to wages accrued before the termination.
The Companys relationships with all individuals who act on
their own as contractors or as other service providers can be
terminated at any time for any reason without any amounts being
owed to such individuals, other than with respect to
compensation or payments accrued before the notice of
termination. No employee is on disability or other leave of
absence, other than short term absences of less than three
weeks. The Company has complied, in all material respects, with
all Laws governing the employment of its employees and governing
the employment of
non-U.S. nationals
in the United States, including the Immigration and Nationality
Act 8 U.S.C. Sections 1101 et seq. and its
implementing regulations. The Company has not sponsored any
employee for, or otherwise engaged any employee working pursuant
to, a non-immigrant visa.
(d) The Company has not taken any action that, by itself or
in conjunction with any action of equal magnitude that may be
taken after the Effective Time, will require any compliance with
the Worker Adjustment and Retraining Notification Act of 1988,
as amended, or any other similar or comparable applicable Law.
(e) All amounts required by applicable Law to be deducted
or withheld from remuneration payable to employees of the
Company, and all employer premiums, contributions or amounts
payable by the Company thereon or in respect thereof, have been
so deducted and withheld and remitted, paid or contributed in
material compliance with applicable Law to the appropriate
governmental or regulatory authority.
(f) The Company has not used the services of workers
provided by third party contract labor suppliers, temporary
employees, leased employees (as that term is defined
in Section 414(n) of the Code). The Company has not used
the services of individuals who have provided services while
classified as independent contractors to an extent that they
would be eligible to participate in any Company Employee Benefit
Plan. All employees of the Company are employed in the United
States, and all of the terms and conditions of their employment
are governed exclusively by United States law and not the law of
any other jurisdiction.
(g) The Company has made available to Parent prior to the
date of this Agreement a current, accurate and complete copy of
each written material personnel policy, rule, or procedure
applicable to employees of the Company.
(h) The Company is not a party to, or otherwise bound by,
any consent decree or settlement agreement with, or citation by,
any Governmental Authority relating to employees or employment
practices.
A-20
SECTION 3.19.
Real Property
.
(a) The Company does not own any real property.
(b) The Company is the sole owner and holder of a valid
leasehold interest in each Lease free and clear of Liens other
than those Liens permitted under the applicable Lease and this
Agreement. The Company has delivered or otherwise made available
to Parent true, correct and complete copies of all Leases. The
Company has peaceful and undisturbed possession under each
Lease. To the knowledge of the Company, no party has a right to
occupy any of the premises subject to a Lease except for the
Company. There are not pending or, to the knowledge of the
Company, threatened condemnation or eminent domain actions or
proceedings, or any special assessments or other activities of
any public or quasi-public body that are reasonably likely to
materially adversely affect the Companys rights pursuant
to any Lease. No current use by the Company of the Leased Real
Property or any improvements thereon is dependent on a
nonconforming use or other approval from a Governmental
Authority, the absence of which would significantly materially
limit the use of any of the properties or assets in the
operation of the business of the Company. With respect to each
Lease under which the Company is a lessee, the lessee under such
Lease has no obligation to remove any tenant improvements,
alterations or installations existing at the Leased Real
Property as of the date hereof, prior to expiration or earlier
termination of such Lease.
SECTION 3.20.
Insurance
. Section 3.20 of the
Company Disclosure Letter sets forth a complete and accurate
list of all material insurance policies of the Company. There is
no claim made against an insurance company by the Company
pending under any such insurance policy. All insurance policies
of the Company are in full force and effect and provide
insurance in such amounts and against such risks as are
customary in the industry in which they operate. The Company is
not in breach or default, and the Company has not taken any
action or failed to take any action which, with notice or the
lapse of time, would constitute such a breach or default, or
permit termination or modification of, any of such insurance
policies. No notice of cancellation or termination has been
received with respect to any such policy except customary
notices of cancellation in advance of scheduled expiration.
SECTION 3.21.
Affiliate Transactions
. No present or
former officer or director of the Company or any Person owning
5% or more of the shares of Company Common Stock or any other
Affiliate, and no family member of any such Person, is a party
to any material loan, lease or other Contract with or binding
upon the Company or any of its properties or assets or has any
interest in any property owned by the Company or has engaged in
any transaction with any of the foregoing within the last
12 months preceding the date of this Agreement. As used in
this Agreement,
Affiliate
means, as to any
Person, any other Person that, directly or indirectly, controls,
or is controlled by, or is under common control with, such
Person. For this purpose,
control
(including,
with its correlative meanings,
controlled by
and
under common control with
) shall mean the
possession, directly or indirectly, of the power to direct or
cause the direction of management or policies of a Person,
whether through the ownership of securities or partnership or
other ownership interests, by contract or otherwise.
SECTION 3.22.
State Takeover Statutes
. No fair
price, moratorium, control share
acquisition or other similar antitakeover statute or
regulation enacted under state or federal laws in the United
States (with the exception of Section 203 of the DGCL)
applicable to the Company is applicable to the Merger or any of
the other Transactions. The action of the Company Board in
approving this Agreement, the Exchange Agreement, the Voting
Agreement and the Transactions, is sufficient to render
inapplicable to this Agreement, the Exchange Agreement, the
Voting Agreement and the Transactions, the restrictions on
business combinations (as defined in
Section 203 of the DGCL) as set forth in Section 203
of the DGCL.
SECTION 3.23.
Assets
. Except as, individually or in
the aggregate, has not had and would not reasonably be expected
to have a Company Material Adverse Effect, the Company has good
title to all the tangible personal property reflected in the
latest audited balance sheet included in the Company SEC Reports
as being owned by the Company or acquired after the date thereof
that are material to the Companys business (except
tangible personal property sold or otherwise disposed of since
the date thereof in the ordinary course of business), free and
clear of all Liens, except (i) statutory Liens for current
Taxes or other governmental charges not yet due and payable or
the amount or validity of which is being contested in good faith
by appropriate proceedings, (ii) Liens arising under
workers compensation, unemployment insurance, social
security, retirement and similar legislation, (iii) other
statutory Liens securing payments not yet due including builder,
mechanic, warehousemen, materialmen, contractor, landlord,
workmen, repairmen, and carrier Liens, (iv) purchase money
Liens and Liens securing rental payments under capital lease
arrangements, (v) such imperfections or irregularities of
title, claims, liens, charges, security interests, easements,
covenants and other restrictions or encumbrances as do not
affect the use of the properties or assets subject thereto or
affected thereby or otherwise impair business operations at such
properties, and (vi) mortgages, or deeds of trust, security
interests or other encumbrances on title related to indebtedness
reflected on the Company Financial Statements.
SECTION 3.24.
Foreign Corrupt Practices Act
. Neither
the Company nor any director, officer, agent or employee of the
Company has (a) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to
political activity or (b) made any unlawful payment to
foreign or domestic government officials or employees or to
foreign or domestic
A-21
political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, or any other
federal, foreign or state anti-corruption or anti-bribery Law or
requirement applicable to the Company.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and
warrant to the Company as follows:
SECTION 4.1.
Organization
. Parent is a duly
organized and validly existing stock corporation under the laws
of the Republic of Austria. Merger Sub is a corporation
organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Parent and Merger Sub has all
requisite power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, operate and lease its properties
and to carry on its business as now conducted, except for such
franchises, licenses, permits, authorizations and approvals, the
lack of which, individually or in the aggregate, has not had and
would not reasonably be expected to have a Parent Material
Adverse Effect. A
Parent Material Adverse
Effect
means any event, change, occurrence or
development of a state of facts that has, individually or in the
aggregate with all other events, changes, occurrences or
developments of a state of facts, a material adverse effect on
the ability of either Parent or Merger Sub to timely perform its
obligations under this Agreement or to consummate the Merger and
the other Transactions.
SECTION 4.2.
Merger Sub
. Merger Sub is a direct,
wholly owned Subsidiary of Parent that was formed solely for the
purpose of engaging in the Transactions. Since the date of its
incorporation, Merger Sub has not carried on any business or
conducted any operations other than the execution of this
Agreement, the performance of its obligations hereunder and
matters ancillary thereto.
SECTION 4.3.
Authorization; No Conflict
.
(a) Each of Parent and Merger Sub has the requisite
corporate power and authority to enter into and deliver this
Agreement and all other agreements and documents contemplated
hereby to which it is a party and to carry out its obligations
hereunder and thereunder. The execution and delivery of this
Agreement, the Exchange Agreement and the Voting Agreement by
Parent and Merger Sub (to the extent a party), the performance
by Parent and Merger Sub of their respective obligations
hereunder and thereunder and the consummation by Parent and
Merger Sub of the Transactions have been duly and validly
authorized by the Management Board and Supervisory Board of
Parent and the Board of Directors of Merger Sub. Except as set
forth in the Exchange Agreement, no other corporate proceedings
on the part of Parent or Merger Sub are necessary to authorize
the execution and delivery of this Agreement, the Exchange
Agreement and the Voting Agreement, the performance by Parent
and Merger Sub of their respective obligations hereunder and
thereunder and the consummation by Parent and Merger Sub of the
Transactions. No vote of Parents stockholders is required
in connection with this Agreement, the Exchange Agreement, or
any of the Transactions, other than the approval of
Parents stockholders in connection with revisions to
Parents stock option plan. Each of this Agreement, the
Exchange Agreement and the Voting Agreement has been duly and
validly executed and delivered by Parent and Merger Sub (to the
extent a party) and, assuming the due authorization, execution
and delivery by the Company (to the extent a party) and the
other parties thereto, constitute legal, valid and binding
obligations of Parent and Merger Sub, enforceable against Parent
and Merger Sub in accordance with their respective terms,
subject in each case to the Bankruptcy and Equity Exception.
(b) Neither the execution and delivery of this Agreement,
the Exchange Agreement and the Voting Agreement by Parent or
Merger Sub (to the extent a party), nor the consummation by
Parent or Merger Sub of the Transactions nor compliance by
Parent or Merger Sub with any of the provisions herein or
therein will (i) result in a violation or breach of or
conflict with the certificate of incorporation or by-laws of
Merger Sub or any of the organizational documents of Parent,
(ii) result in a violation or breach of or conflict with
any provisions of, or result in the loss of any benefit under or
constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in
the termination, cancellation of, or accelerate the performance
required by, or result in a right of termination or acceleration
under, or result in the creation of any Lien upon any of the
properties or assets owned or operated by Parent or Merger Sub
under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, contract,
lease, agreement or other instrument or obligation of any kind
to which Parent or Merger Sub is a party or by which Parent or
Merger Sub or any of their respective properties or assets may
be bound, or (iii) subject to obtaining or making the
consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph
(c) below, violate any Judgment or Law applicable to Parent
or Merger Sub or any of their respective properties or assets
other than any such event described in clauses (ii) and
(iii) above which, individually or in the aggregate, has
not had and would not reasonably be expected to have a Parent
Material Adverse Effect.
A-22
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental
Authority is necessary to be obtained or made by Parent or
Merger Sub in connection with Parents or Merger Subs
(to the extent a party) execution, delivery and performance of
this Agreement, the Exchange Agreement and the Voting Agreement,
or the consummation by Parent or Merger Sub of the Transactions,
except for (i) compliance with the DGCL, with respect to
the filing of the Certificate of Merger, (ii) compliance
with the HSR Act and applicable foreign competition and
antitrust laws, if any, (iii) the filing with the SEC of
such reports under Sections 13 or 16 of the Exchange Act,
as may be required in connection with this Agreement and the
Transactions, (iv) compliance with the rules of Nasdaq,
(v) compliance with the applicable requirements of CFIUS,
pursuant to Section 721 of the DPA, (vi) compliance
with the blue sky laws of various states,
(vii) completing any notice required under the FDCA or
similar Laws of jurisdictions other than the United States, and
(viii) any such consent, approval, order, authorization,
registration, declaration or filing, the lack of which,
individually or in the aggregate, has not had and would not
reasonably be expected to have a Parent Material Adverse Effect.
SECTION 4.4.
Information Supplied
. None of the
information supplied or to be supplied in writing by Parent
specifically for inclusion or incorporation by reference in the
Proxy Statement will, at the date it is first mailed to the
Companys stockholders and at the time of the Company
Stockholders Meeting or at the date of any amendment thereof or
supplement thereto, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not
misleading.
SECTION 4.5.
Brokers or Finders Fees
.
Except for Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the
Parent Financial Advisor
),
no agent, broker, Person or firm acting on behalf of Parent or
Merger Sub or under Parents or Merger Subs authority
is or will be entitled to any advisory, commission or
brokers or finders fee or commission from any of the
parties hereto in connection with any of the Transactions.
SECTION 4.6.
Available Funds
. Parent has or has
available to it sufficient funds to (a) pay the aggregate
Merger Consideration and other amounts payable pursuant to this
Agreement to consummate the Merger and the other Transactions
and (b) pay any and all fees and expenses of Parent and
Merger Sub in connection with the Merger or the financing
thereof.
SECTION 4.7.
Absence of Litigation
. There is no
action pending or, to the knowledge of Parent, threatened,
against Parent or any of its subsidiaries or any of its or their
respective properties or assets except as would not reasonably
be expected to have a Parent Material Adverse Effect. Neither
Parent nor its subsidiaries is subject to any Judgment, except
as would not reasonably be expected to have a Parent Material
Adverse Effect.
SECTION 4.8.
No Ownership of Company Capital Stock
.
As of the date of this Agreement, neither Parent nor Merger Sub,
nor any of their respective Affiliates, owns, or at any time
during the past three years has owned, any shares of the
Companys capital stock or any option, warrant or other
right to acquire any shares of the Companys capital stock.
ARTICLE 5
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1.
Conduct of Business by the Company Pending
the Merger
. The Company covenants and agrees that, during
the period from the date of this Agreement until the earlier of
the termination of this Agreement or the Effective Time, unless
Parent shall otherwise consent in writing, or except as
expressly permitted or required pursuant to this Agreement:
(a) The Company shall (i) conduct their business only
in the ordinary and usual course of business and consistent with
past practices and (ii) use reasonable best efforts to
maintain and preserve intact its business organization, to
maintain its significant beneficial business relationships with
suppliers, contractors, distributors, customers, licensors,
licensees and others having material business relationships with
it, to retain the services of its present officers and key
employees and to comply in all material respects with all
applicable Laws and the requirements of all Material Contracts.
(b) Without limiting the generality of the foregoing
Section 5.1(a), except as set forth in Section 5.1 of
the Company Disclosure Letter or as contemplated by
Section 2.4 and Section 2.5, the Company shall not
directly or indirectly, do any of the following without the
prior written consent of Parent (which consent shall (x) be
in the sole discretion of Parent with respect to those actions
prohibited by subsections (ii) through (vii), (x), (xi),
(xv), (xvi), (xxi), (xxii) and (xxiii), and (y) not be
unreasonably withheld or delayed with respect to those actions
prohibited by the remaining subsections):
(i) (A) acquire, sell, lease, transfer, encumber or
permit to be subject to any Lien or dispose of any assets,
rights or securities that are material to the Company, or
(B) terminate, cancel or materially modify any Material
Contract or enter into any material commitment, transaction,
agreement or line of business;
A-23
(ii) acquire by merging or consolidating with or by
purchasing a substantial equity interest in or a substantial
portion of the assets of, or by any other manner, any business,
corporation, partnership, association or other business
organization or division thereof;
(iii) amend or propose to amend the Company Charter
Documents;
(iv) declare, set aside, make or pay any dividend or other
distribution payable in cash, capital stock, property or
otherwise with respect to any shares of its capital stock;
(v) purchase, redeem or otherwise acquire, or offer to
purchase, redeem or otherwise acquire, any shares of its capital
stock, other equity securities, other ownership interests or any
options, warrants or rights to acquire any such stock,
securities or interests, except for the acquisition of Company
Common Stock (A) from holders of Options or Warrants in
full or partial payment of the exercise payable by such holder
upon exercise of Options or Warrants as in effect on the date
hereof or (B) from former employees, directors and
consultants in accordance with agreements providing for the
repurchase of shares in connection with any termination of their
services to the Company;
(vi) adjust, recapitalize, split, combine, subdivide or
reclassify any outstanding shares of its capital stock;
(vii) except for (A) the Company Common Stock issuable
upon exercise of Options outstanding on the date hereof or
(B) the Warrants, issue, sell, encumber, dispose of or
authorize, propose or agree to the issuance, sale, encumbrance
or disposition by the Company of, any shares of, or any options,
warrants or rights of any kind to acquire any shares of, or any
securities convertible into or exchangeable for any shares of,
its capital stock of any class, or any other securities in
respect of, in lieu of, or in substitution for any class of its
capital stock outstanding on the date hereof;
(viii) incur, or modify in any material respect the terms
of, any indebtedness for borrowed money, or assume, guarantee or
endorse any such indebtedness of another Person, except
indebtedness incurred, assumed or guaranteed in the ordinary
course of business consistent with past practice and not in
excess of $150,000 in the aggregate;
(ix) make any loans or advances, except routine advances
for customary travel expenses to employees of the Company in the
ordinary course of business consistent with past practice;
(x) other than to the extent required in a written contract
or agreement in existence as of the date of this Agreement and
disclosed in Section 3.10 of the Company Disclosure Letter:
(A) grant or increase any severance or termination pay to
any current or former director, executive officer, employee,
consultant or independent contractor of the Company,
(B) execute any employment, deferred compensation or other
similar agreement (or any amendment to any such existing
agreement) with any such individual, (C) increase the
benefits payable under any existing severance or termination pay
policies or employment agreements, (D) hire any officers
(or promote an employee into an officer position) or increase
the compensation, bonus or other benefits of current or former
directors, executive officers, employees (other than increases
in compensation made to employees in the ordinary course of
business consistent with past practice pursuant to such
employees annual performance reviews), consultants or
independent contractors of the Company, (E) adopt or
establish any Company Employee Benefit Plan, policy, program or
arrangement or amend in any material respect any existing
employee benefit plan, (F) provide any material benefit to
a current or former director, executive officer, employee,
consultant or independent contractor of the Company not required
by any existing agreement or Company Employee Benefit Plan, or
(G) take any action that would result in its incurring any
obligation for any payments or benefits described in subsections
(i), (ii) or (iii) of Section 3.10(i) (without
regard to whether the Transactions are consummated) except to
the extent required in a written contract or agreement in
existence as of the date of this Agreement;
(xi) execute or amend (other than as required by existing
employee benefit plans or employment agreements or by applicable
Law) in any material respect any employment, consulting,
severance or indemnification agreement between the Company and
any of its directors, officers, agents, consultants, independent
contractors or employees, or any collective bargaining agreement
or other obligation to any labor organization or employee
incurred or entered into by the Company;
(xii) make any material changes in its reporting for Taxes
or accounting methods other than as required by GAAP or
applicable Law; make or rescind any material Tax election; file
any amended Tax Return with respect to any material Tax; make
any change to its method or reporting income, deductions, or
other Tax items for Tax purposes; settle or compromise any
material Tax liability or enter into any transaction with an
Affiliate outside the ordinary course of business if such
transaction would give rise to a material Tax liability;
A-24
(xiii) settle, compromise or otherwise resolve any
litigation or other legal proceedings material to the Company or
as would result in any liability in excess of the amount
reserved therefor or reflected on the balance sheets included in
the Company Financial Statements or which relates to any Company
Intellectual Property;
(xiv) pay or discharge any claims, Liens or liabilities
which are not reserved for or reflected on the balance sheets
included in the Company Financial Statements;
(xv) adopt a plan of complete or partial liquidation (or
resolutions providing for or authorizing such liquidation),
dissolution, merger, consolidation, restructuring,
recapitalization or reorganization of the Company (other than
the Merger);
(xvi) abandon, cease to prosecute, fail to maintain, sell,
license, assign or encumber any Company Intellectual Property,
Permit or other material assets;
(xvii) (A) amend or terminate any Material Contract or
any joint venture, partnership or other similar arrangement,
(B) enter into any Contract that, if entered into prior to
the date hereof, would have been required to be set forth in
Section 3.16(a) of the Company Disclosure Letter,
(C) engage in any transaction or series of transactions
with any Affiliate that would be required to be disclosed under
Item 404 of
Regulation S-K
under the Securities Act, or (D) intentionally or knowingly
waive, release or assign any material rights or claims under any
Material Contract;
(xviii) authorize any new capital expenditures not included
in the Companys 2008 capital expenditure budget provided
to Parent prior to the date hereof, a copy of which is attached
as Schedule 5.1(b)(xvii);
(xix) fail to use reasonable best efforts to keep in full
force and effect all material insurance policies maintained by
the Company, other than such policies that expire by their terms
(in which event the Company shall use reasonable best efforts so
that such policies will be renewed or replaced) or changes to
such policies made in the ordinary course of business consistent
with past practice;
(xx) enter into any license agreement with any Person to
obtain any material Intellectual Property;
(xxi) enter into any agreement, arrangement or commitment
that materially limits or otherwise materially restricts the
Company, or that would reasonably be expected to, after the
Effective Time, materially limit or restrict Parent or any of
its Subsidiaries or any of their respective Affiliates or any
successor thereto, from engaging or competing in any line of
business in which it is currently engaged or in any geographic
area material to the business or operations of Parent or any of
its Subsidiaries;
(xxii) take or cause to be taken any action that would
reasonably be expected to materially delay or prevent the
Companys consummation of the Transactions; or
(xxiii) agree in writing or otherwise to take any of the
actions precluded by Section 5.1(b).
SECTION 5.2.
Conduct of Business by Parent Pending the
Merger
. Parent and Merger Sub agree that, during the period
from the date of this Agreement until the earlier of the
termination of this Agreement or the Effective Time, except as
contemplated by this Agreement, they shall not, directly or
indirectly, without the prior written consent of the Company
(which consent shall not be unreasonably withheld, delayed or
conditioned), take or cause to be taken any action that would
reasonably be expected to materially delay or prevent
Parents or its Affiliates consummation of the
Transactions.
ARTICLE 6
ADDITIONAL AGREEMENTS
SECTION 6.1.
Preparation of Proxy Statement;
Stockholders Meeting
.
(a) The Company shall, as soon as practicable following the
date hereof, prepare the Proxy Statement to be sent to the
stockholders of the Company in connection with the Company
Stockholders Meeting. Parent, Merger Sub and the Company shall
cooperate and consult with each other and their respective
counsel in the preparation of the Proxy Statement. The Company
shall not file the preliminary Proxy Statement, or any amendment
or supplement thereto, without providing Parent a reasonable
opportunity to review and comment thereon. Each party shall use
its reasonable best efforts to resolve, and each party agrees to
A-25
consult and cooperate with the other party in resolving, all SEC
comments with respect to the preliminary Proxy Statement as
promptly as practicable after receipt thereof and to cause the
Proxy Statement in definitive form to be mailed to the
Companys stockholders as promptly as reasonably
practicable following filing with the SEC. Each party agrees to
consult with the other party prior to responding to SEC comments
with respect to the preliminary Proxy Statement. Each of Parent,
Merger Sub and the Company agrees to correct any information
provided by it for use in the Proxy Statement which shall have
become false or misleading in any material respect and the
Company shall promptly prepare and mail to its stockholders an
amendment or supplement setting forth such correction. Each
party shall as soon as reasonably practicable (i) notify
the other parties of the receipt of any comments from the SEC
with respect to the Proxy Statement and any request by the SEC
for any amendment to the Proxy Statement or for additional
information and (ii) provide each other party with copies
of all correspondence between a party and its employees and
other authorized representatives, on the one hand, and the SEC,
on the other hand, with respect to the Proxy Statement.
(b) As soon as practicable following the date hereof, the
Company shall take all action necessary to establish a record
date for, duly call, give notice of, convene and hold a meeting
of its stockholders (the
Company Stockholders
Meeting
) for the purpose of seeking the Required
Company Stockholder Vote, regardless of whether a Company
Adverse Recommendation Change shall have occurred. The Company
shall, through the Company Board, recommend to its stockholders
that they adopt this Agreement and give the Required Company
Stockholder Vote (the
Company Recommendation
)
until and unless a Company Adverse Recommendation Change shall
have occurred. Unless a Company Adverse Recommendation Change
shall have occurred, the Company shall include the Company
Recommendation in the Proxy Statement and use its reasonable
best efforts to solicit from stockholders of the Company proxies
in favor of the adoption of this Agreement and shall take all
other action necessary or advisable to secure the Required
Company Stockholder Vote. Once the Company Stockholders Meeting
has been called and noticed, the Company shall not postpone or
adjourn the Company Stockholders Meeting without the consent of
Parent (other than (i) for the absence of a quorum or
(ii) to allow reasonable additional time for the filing and
mailing of any supplemental or amended disclosure which it
believes in good faith is necessary under applicable Law and for
such supplemental or amended disclosure to be disseminated and
reviewed by the Companys stockholders prior to the Company
Stockholders Meeting;
provided
,
however
, that in
the event that the Company Stockholders Meeting is delayed to a
date after the Outside Date as a result of either (i) or
(ii) above, then the Outside Date shall be extended to the
fifth Business Day after such date).
(c) Parent shall cause all shares of Company Common Stock
owned by Parent or Merger Sub, if any, to be voted in favor of
the adoption of the Agreement.
SECTION 6.2.
Employee Benefit Matters
.
(a) Parent agrees to honor in accordance with their terms
and applicable Law all Company Employee Benefit Plans listed in
Section 6.2 of the Company Disclosure Letter and all
accrued benefits thereunder; it being understood and agreed that
nothing in this Section 6.2(a) shall prevent Parent from
amending or terminating any Company Employee Benefit Plan or
other agreement in accordance with its terms and applicable Law.
(b) For a period of at least six months following the
Closing Date, Parent agrees to provide employees of the Company
who are located in the United States and retained by Parent with
employee benefits (excluding equity and change in control plans,
programs, or arrangements) that are substantially comparable in
the aggregate to those benefits provided to such employees
immediately prior to the Effective Time;
provided
,
however
, that Parent shall be under no obligation to
retain any employee or group of employees of the Company other
than as required by applicable Law or an employment agreement
listed in Section 6.2 of the Company Disclosure Letter.
(c) For purposes of all employee benefit plans, programs
and arrangements maintained by or contributed to by Parent and
its Subsidiaries (including, after the Closing, the Surviving
Corporation), Parent shall, or shall cause its Subsidiaries to,
cause each such plan, program or arrangement to treat the prior
service with the Company and its Affiliates of each Person who
is an employee or former employee of the Company immediately
prior to the Closing (a
Company Employee
) (to
the same extent such service is recognized under analogous
plans, programs or arrangements of the Company or its Affiliates
prior to the Closing) as service rendered to Parent or its
Subsidiaries, as the case may be, for purposes of eligibility to
participate in and vesting thereunder (but not benefit accrual);
provided
,
however
, that such crediting of service
shall not operate to duplicate any benefit or the funding of
such benefit. Company Employees shall also be given credit for
any deductible or co-payment amounts paid in respect of the plan
year in which the Closing occurs, to the extent that, following
the Closing, they participate in any other plan for which
deductibles or co-payments are required. Parent shall also use
reasonable best efforts to cause each employee benefit plan
maintained by or contributed to by Parent and its subsidiaries
(including, after the Closing, the Surviving Corporation) in
which Company Employees participate to waive any preexisting
condition that was waived under the terms of any Company
Employee Benefit Plan immediately prior to the Closing or
waiting period limitation which would otherwise be applicable to
a Company Employee on or after the Closing. Parent shall
recognize any accrued but unused vacation and sabbatical time of
the Company
A-26
Employees as of the Closing Date, in accordance with the terms
of such Company policies and Parent shall cause the Company to
provide such vacation and sabbatical time in accordance with the
terms of such Company policies but in no event will Parent be
obligated to extend or enlarge the benefits available under such
Company policies.
SECTION 6.3.
Regulatory Filings
.
(a) The Company, Parent and Merger Sub shall each, as
promptly as practicable (and in any event within 10 Business
Days) after the date of this Agreement, file or cause to be
filed with the Federal Trade Commission (the
FTC
), the United States Department of Justice
(the
DOJ
) and any comparable foreign
antitrust or competition authority any notifications required to
be filed under the HSR Act or comparable foreign antitrust or
competition Laws with respect to the Transactions.
(b) The Company, Parent and Merger Sub shall cooperate to
enable the parties to jointly prepare and file, as promptly as
practicable (and in any event within 10 Business Days) after the
date of this Agreement, with CFIUS, a notice of the Merger and
the other Transactions, and shall furnish any supplemental
information requested by CFIUS in connection therewith pursuant
to Section 721 of the DPA, and the applicable regulations
thereto.
SECTION 6.4.
Public Statements
. Each of the Company,
Parent and Merger Sub agrees that no public release or
announcement concerning the Transactions shall be issued by any
party without the prior written consent of the Company and
Parent (which consent shall not be unreasonably withheld or
delayed), except as such release or announcement may be
permitted by Section 6.8(d) or required by Law or the rules
or regulations of any applicable Governmental Authority to which
the relevant party is subject or submits, wherever situated, in
which case the party required to make the release or
announcement shall use its reasonable best efforts to allow each
other party reasonable time to comment on such release or
announcement in advance of such issuance, it being understood
that the final form and content of any such release or
announcement, to the extent so required, shall be at the final
discretion of the disclosing party. The parties agree that the
initial press release to be issued with respect to the
Transactions shall be in the form agreed by the parties.
SECTION 6.5.
Standard of Efforts
.
(a) Subject to the terms and conditions provided herein,
each of the Company, Parent and Merger Sub agrees to use its
reasonable best efforts to take, or cause to be taken, all
action, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective in the most
expeditious manner practicable, the Merger and the other
Transactions, including (i) obtaining all permits,
consents, approvals, authorizations and actions or nonactions
required for or in connection with the consummation by the
parties hereto of the Merger and the other Transactions,
(ii) the taking of all steps as may be necessary to obtain
an approval or waiver from, or to avoid an action or proceeding
by, a Governmental Authority, (iii) the obtaining of all
necessary consents from third parties, and (iv) the
execution and delivery of any additional instruments necessary
to consummate the Merger and the other Transactions and to fully
carry out the purposes of this Agreement. The Company shall have
the right to review and approve in advance all characterizations
of the information relating to the Company; Parent shall have
the right to review and approve in advance all characterizations
of the information relating to Parent or Merger Sub; and each of
the Company and Parent shall have the right to review and
approve in advance all characterizations of the information
relating to the Transactions, in each case which appear in any
material filing (including the Proxy Statement) made in
connection with the Transactions. The Company, Parent and Merger
Sub agree that they will consult with each other with respect to
the obtaining of all such necessary permits, consents, approvals
and authorizations of all third parties and Governmental
Authorities.
(b) In furtherance of, and not in limitation of the
foregoing, the parties shall use their respective reasonable
best efforts to respond promptly to any requests for additional
information made by the FTC, the DOJ, CFIUS or any other
Governmental Authority, and to cause the CFIUS review and the
waiting period under the HSR Act to terminate or expire at the
earliest possible date after the date of filing. The parties
agree not to extend directly or indirectly the CFIUS review or
any waiting period under the HSR Act or enter into any agreement
with a Governmental Authority to delay or not to consummate the
Merger and the other Transactions, except with the prior written
consent of the other parties hereto (which consent shall not be
unreasonably withheld or delayed). Each of Parent and Merger Sub
and the Company will (i) promptly notify the other party of
any written communication to that party from any Governmental
Authority and, subject to applicable Law, permit the other party
to review in advance any proposed written communication to any
such Governmental Authority and incorporate the other
partys reasonable comments, (ii) not agree to
participate in any substantive meeting or discussion with any
such Governmental Authority in respect of any filing,
investigation or inquiry concerning this Agreement, the Merger
or the other Transactions unless it consults with the other
party in advance and, to the extent permitted by such
Governmental Authority, gives the other party the opportunity to
attend, and (iii) furnish the other party with copies of
all correspondence, filings and written communications between
them and their Affiliates and their respective representatives
on one hand, and any such Governmental Authority or its staff on
the other hand, with respect to this Agreement, the Merger and
the other Transactions.
A-27
(c) Notwithstanding the foregoing or any other provision of
this Agreement, the Company shall not, without Parents
prior written consent, commit to any divestiture transaction or
agree to any restriction on its business, and nothing in this
Section 6.5 shall (i) limit any applicable rights a
party may have to terminate this Agreement pursuant to
Section 8.1 so long as such party has up to then complied
in all material respects with its obligations under this
Section 6.5, or (ii) require Parent to offer, accept
or agree to (A) dispose of or hold separate any part of its
or the Companys businesses, operations, assets or product
lines (or a combination of Parents and the Companys
respective businesses, operations, assets or product lines),
(B) not compete in any geographic area or line of business,
and/or
(C) restrict the manner in which, or whether, Parent, the
Company, the Surviving Corporation or any of their Affiliates
may carry on business in any part of the world.
SECTION 6.6.
Notification of Certain Matters
.
Promptly upon becoming aware thereof, the Company shall give
notice to Parent and Merger Sub of (a) any representation
or warranty made by it in this Agreement that becomes untrue or
inaccurate in any material respect or (b) the failure by it
to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it
under this Agreement. Promptly upon becoming aware thereof, each
of Parent and Merger Sub shall give notice to the Company of
(i) any representation or warranty made by it in this
Agreement that becomes untrue or inaccurate in any material
respect or (ii) the failure by it to comply with or satisfy
in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement. In no
event shall the delivery of any notice by a party pursuant to
this Section 6.6 limit or otherwise affect the respective
rights, obligations, representations, warranties, covenants or
agreements of the parties or the conditions to the obligations
of the parties under this Agreement. Notwithstanding the
foregoing, the failure of a party to deliver the notice required
by this Section 6.6, in and of itself, shall not give rise
to the failure of a condition to Closing under
Section 7.2(b) or Section 7.3(b), as the case may be,
unless the event or circumstance giving rise to the obligation
to deliver such notice shall, individually or in the aggregate
with other breaches, result in the failure of a condition to
Closing to be satisfied.
SECTION 6.7.
Access to Information; Confidentiality
.
(a) The Company shall, and shall cause the officers,
directors, employees and agents of the Company to, afford the
officers, employees and agents of Parent and Merger Sub, at
their sole cost and risk, reasonable access, at all reasonable
times from the date hereof through the earlier of the Effective
Time or termination of this Agreement in accordance with its
terms, to its officers, employees, agents, properties,
facilities, books, records, contracts and other assets and shall
promptly furnish Parent and Merger Sub all financial, operating
and other data and information as Parent and Merger Sub through
their officers, employees or agents, may from time to time
reasonably request. Parent and Merger Sub, at their sole cost
and risk, shall have the right to make such due diligence
investigations as Parent and Merger Sub shall deem necessary or
reasonable, upon reasonable notice to the Company and without
significant interference to Companys operations or
properties. No additional investigations or disclosures shall
affect the Companys representations and warranties
contained herein, or limit or otherwise affect the remedies
available to Parent and Merger Sub pursuant to this Agreement.
Notwithstanding anything in Sections 6.4 or 6.5, the
Company shall not be obligated to disclose any information if
doing so would (i) violate any applicable Law,
(ii) result in the loss of attorney-client privilege with
respect to such information or (iii) result in a breach of
an agreement to which the Company is a party.
(b) The provisions of the Confidentiality Agreement dated
as of January 14, 2008, between Parent and the Company (the
Confidentiality Agreement
) shall remain in
full force and effect in accordance with its terms.
SECTION 6.8.
No Solicitation
.
(a) The Company shall, and shall cause the Companys
directors, officers, employees, investment bankers, financial
advisors, attorneys, accountants, agents and other
representatives (collectively,
Representatives
) to, immediately cease and
cause to be terminated any discussions or negotiations with any
Person conducted heretofore with respect to a Takeover Proposal
(as hereinafter defined), promptly request and use reasonable
best efforts to obtain the return from all such Persons or cause
the destruction of all copies of confidential information
previously provided to such Persons by the Company or
Representatives to the extent any confidentiality agreement with
such Person so provides. From the date of this Agreement until
the Effective Time or, if earlier, the termination of this
Agreement in accordance with its terms, except as expressly
provided in this Section 6.8, the Company shall not, nor
shall it authorize or permit any Representative to, directly or
indirectly, (i) solicit, initiate, or take any action to
intentionally or knowingly facilitate or encourage (including by
way of furnishing non-public information) the submission of, any
Takeover Proposal, (ii) approve or recommend any Takeover
Proposal, enter into any agreement,
agreement-in-principle
or letter of intent with respect to or accept any Takeover
Proposal (or resolve to or publicly propose to do any of the
foregoing), or (iii) participate or engage in any
discussions or negotiations regarding, or furnish to any Person
any non-public information with respect to, or take any other
action to knowingly facilitate any inquiries or the making of
any proposal that constitutes, or may reasonably be expected to
lead to, any Takeover Proposal;
provided
,
however
,
that if in response to an unsolicited, written Takeover Proposal
made after the date hereof in circumstances not involving an
intentional breach or knowing violation of this
Section 6.8, the Company Board reasonably determines in
good faith (after receiving the advice of Cowen or another
financial advisor of
A-28
nationally recognized reputation) that such Takeover Proposal
constitutes, or is reasonably likely to lead to, a Superior
Proposal and with respect to which the Company Board determines
in good faith, after consulting with and receiving the advice of
outside counsel, that not taking such action would be
inconsistent with the Company Boards fiduciary duties to
the Companys stockholders under Delaware law, then the
Company may at any time prior to the receipt of the Required
Company Stockholder Vote (but in no event after such time),
(x) furnish information with respect to the Company to the
Person making such Takeover Proposal and its Representatives,
but only pursuant to a confidentiality agreement in customary
form that is no less favorable to the Company than the
Confidentiality Agreement (except that such confidentiality
agreement shall contain additional provisions that expressly
permit the Company to comply with the provisions of this
Section 6.8), provided that (1) such confidentiality
agreement may not include any provision calling for an exclusive
right to negotiate with the Company, (2) the Company
provides Parent with not less than 24 hours notice of its
intention to enter into such confidentiality agreement, and
(3) the Company advises Parent of all such non-public
information delivered to such Person concurrently with its
delivery to such Person and concurrently with its delivery to
such Person the Company delivers to Parent all such non-public
information provided to the Person making the Takeover Proposal
that was not previously provided to Parent, (y) conduct
discussions or negotiations with such Person regarding such
Takeover Proposal, and (z) to the extent permitted pursuant
to and in compliance with Section 8.1(h), enter into a
binding written agreement concerning a transaction that
constitutes a Superior Proposal. The Company shall ensure that
its Representatives are aware of the provisions of this
Section 6.8(a). Without limiting the foregoing, it is
agreed that any violation of the foregoing restrictions by any
Representative of the Company shall be deemed to be a breach of
this Section 6.8 by the Company. The Company shall provide
Parent with a correct and complete copy of any confidentiality
agreement entered into pursuant to this Section 6.8(a)
within 24 hours of the execution thereof.
(b) In addition to the other obligations of the Company set
forth in this Section 6.8, the Company shall promptly
advise Parent in writing, and in no event later than
24 hours after receipt, if any proposal, offer, inquiry or
other contact is received by, any information is requested from,
or any discussions or negotiations are sought to be initiated or
continued with, the Company in respect of any Takeover Proposal,
and shall, in any such notice to Parent, indicate the identity
of the Person making such proposal, offer, inquiry or other
contact and the terms and conditions of any proposals or offers
or the nature of any inquiries or contacts (and shall include
with such notice copies of any written materials received from
or on behalf of such Person relating to such proposal, offer,
inquiry or request), and thereafter shall promptly keep Parent
informed of all material developments affecting the status and
terms of any such proposals, offers, inquiries or requests (and
the Company shall provide Parent with copies of any additional
written materials received that relate to such proposals,
offers, inquiries or requests) and of the status of any such
discussions or negotiations.
(c) Except as expressly permitted by this Section 6.8(c),
neither the Company Board nor any committee thereof shall
(i) fail to make, withdraw or modify, or propose publicly
to withdraw or modify, in a manner adverse to Parent, the
Company Recommendation or the approval or declaration of
advisability by the Company Board of this Agreement, the Merger
and the other Transactions, (ii) approve or recommend, or
propose publicly to approve or recommend, any Takeover Proposal
or (iii) cause or permit the Company to enter into any
letter of intent, memorandum of understanding, agreement in
principle, acquisition agreement, merger agreement, option
agreement, joint venture agreement, partnership agreement or
other agreement constituting, or which is intended to or is
reasonably likely to lead to, any Takeover Proposal, or resolve
or agree to take any such action (any failure or action
described in clause (i), (ii) or (iii) being referred
to as a
Company Adverse Recommendation
Change
). Notwithstanding the foregoing, the Company
Board may, prior to the receipt of the Required Company
Stockholder Vote, (x) withdraw or modify the Company
Recommendation, (y) recommend a Takeover Proposal that
constitutes a Superior Proposal, or (z) to the extent
permitted pursuant to and in compliance with
Section 8.1(h), enter into a binding written agreement
concerning a transaction that constitutes a Superior Proposal,
if, in each case, the Company Board determines in good faith,
after consulting with and receiving advice from outside counsel,
that not making such Company Adverse Recommendation Change would
be inconsistent with the Company Boards fiduciary duties
to the Companys stockholders under Delaware law;
provided
,
however
, that no Company Adverse
Recommendation Change may be made in the absence of a Superior
Proposal unless such change is based upon information that is
unknown to the Company Board as of the date hereof but becomes
known prior to the receipt of the Required Company Stockholder
Vote;
provided further
,
however
, that no Company
Adverse Recommendation Change may be made until the third
Business Day following Parents receipt of written notice
of such determination by the Company Board and, in the case of
the actions described in clause (z) above, complying with
Section 8.1(h) unless the Company Stockholders Meeting is
scheduled to convene during such three Business Day period, in
which case Parent must be given as much notice as possible in
advance of the Company Stockholders Meeting.
(d) Nothing in this Section 6.8 shall prohibit the Company
Board from (i) taking and disclosing to the Companys
stockholders a position contemplated by
Rule 14e-2(a)
and
Rule 14d-9
promulgated under the Exchange Act or (ii) from making any
required disclosure to the Companys stockholders, if in
each case the Company Board determines in good faith, after
consultation with outside counsel, that not taking such position
or not making such disclosure would be inconsistent with the
Company Boards fiduciary duties to its stockholders under
Delaware law;
provided
,
however
, that in no event
shall the Company, the Company Board or any committee thereof
take, or agree or resolve to take, any action prohibited by
Section 6.8(c). Any
A-29
disclosure (other than a stop, look and listen or
similar communication of the type contemplated by
Rule 14d-9(f)
under the Exchange Act) made pursuant to this
Section 6.8(d) shall be deemed to be a Company Adverse
Recommendation Change unless the Company Board expressly
reaffirms the Company Recommendation.
(e) For purposes of this Agreement:
(i)
Takeover Proposal
shall mean any inquiry,
proposal or offer from any Person (other than Parent, Merger Sub
or any of their Affiliates) or group (as defined in
Section 13(d) of the Exchange Act) relating to (A) the
direct or indirect acquisition (including by way of a license)
(whether in a single transaction or a series of related
transactions) of assets of the Company equal to 15% or more of
the Companys consolidated assets or to which 15% or more
of the Companys revenues or earnings on a consolidated
basis are attributable, (B) the direct or indirect
acquisition (whether in a single transaction or a series of
related transactions) of 15% or more of any class of equity
securities of the Company, (C) a tender offer or exchange
offer that if consummated would result in any Person or
group (as defined in Section 13(d) of the
Exchange Act) beneficially owning 15% or more of any class of
equity securities of the Company, or (D) a merger,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving the Company, in each case, other than the
Transactions.
(ii)
Superior Proposal
means any written
offer obtained after the date hereof and not in intentional
breach or knowing violation of Section 6.8 to acquire,
directly or indirectly, for consideration consisting of cash
and/or
securities, more than 50% of the outstanding voting equity
securities of the Company or all or substantially all of the
assets of the Company, and is on terms that the Company Board
determines in its good faith judgment (after receipt of the
advice of Cowen or another financial advisor of nationally
recognized reputation and outside counsel), taking into account
all relevant factors, (A) would, if consummated, result in
a transaction that is more favorable to the holders of Company
Common Stock from a financial point of view than the
Transactions (including the terms of any proposal by Parent to
modify the terms of the Transactions) and (B) is reasonably
capable of being completed on the terms proposed.
SECTION 6.9.
Indemnification and Insurance.
(a) Parent and Merger Sub agree that all rights to
indemnification, advancement of expenses and exculpation by the
Company now existing in favor of each Person who is now, or has
been at any time prior to the date hereof or who becomes prior
to the Effective Time an officer or director of the Company
(each an
Indemnified Party
) as provided in
the Company Charter Documents, in each case as in effect on the
date of this Agreement, or pursuant to any other agreements in
effect on the date hereof, copies of which have been made
available to Parent, shall be assumed by the Surviving
Corporation in the Merger, without further action, at the
Effective Time and shall survive the Merger and shall remain in
full force and effect in accordance with their terms, and, in
the event that any proceeding is pending or asserted or any
claim made during such period, until the final disposition of
such proceeding or claim.
(b) For six years after the Effective Time, to the full extent
permitted under applicable Law (with the parties agreeing that
any limitations on a corporations ability to indemnify a
director or officer under Delaware Law shall be applicable to
the indemnification provided for under this Section 6.9(b)
notwithstanding that such limitations may not otherwise be
applicable), Parent and the Surviving Corporation (the
Indemnifying Parties
) shall indemnify, defend
and hold harmless each Indemnified Party against all losses,
claims, damages, liabilities, fees, expenses, judgments and
fines arising in whole or in part out of actions or omissions in
their capacity as such occurring at or prior to the Effective
Time (including in respect of this Agreement), and shall
reimburse each Indemnified Party for any legal or other expenses
reasonably incurred by such Indemnified Party in connection with
investigating or defending any such losses, claims, damages,
liabilities, fees, expenses, judgments and fines as such
expenses are incurred;
provided
,
however
, that
nothing herein shall impair any rights to indemnification of any
Indemnified Party referred to in Section 6.9(a).
(c) Parent shall cause the Surviving Corporation to maintain the
same limits, terms and conditions of the Companys
officers and directors liability insurance coverage,
which includes primary directors and officers
insurance and excess Side A coverage, in effect on the date of
this Agreement (the
D&O Insurance
), for
a period of not less than six years after the Effective Time,
but only to the extent related to alleged or actual actions or
omissions prior to the Effective Time;
provided
,
however
, that (i) the Surviving Corporation may
substitute therefor policies of at least the same coverage and
amounts containing terms no less advantageous to such former
directors or officers and (ii) such substitution shall not
result in gaps or lapses of coverage with respect to matters
actually or allegedly occurring prior to the Effective Time;
provided further
,
however
, that in no event shall
Parent or the Surviving Corporation be required to expend more
than an amount per year equal to 250% of current annual premiums
paid by the Company for such insurance (the
Maximum
Amount
) to maintain or procure insurance coverage
pursuant hereto;
provided further
,
however
, that
if the amount of the annual premiums necessary to maintain or
procure such insurance coverage exceeds the Maximum Amount,
Parent and the Surviving Corporation shall procure and maintain
for such six-year period
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as much coverage as reasonably practicable for the Maximum
Amount. Parent shall have the option to cause coverage to be
extended under the Companys D&O Insurance by
obtaining a six-year tail policy or policies on
terms and conditions no less advantageous than the
Companys existing D&O Insurance, and such
tail policy or policies shall satisfy the provisions
of this Section 6.9(c). Any such tail policy or
policies shall be provided by Parents insurer as of the
date of this Agreement or another insurer rated at least as high
as the Companys insurer as of the date of this Agreement.
(d) The obligations of Parent and the Surviving Corporation
under this Section 6.9 shall survive the consummation of
the Merger and shall not be terminated or modified in such a
manner as to adversely affect any Indemnified Party to whom this
Section 6.9 applies without the consent of such affected
Indemnified Party (it being expressly agreed that the
Indemnified Parties to whom this Section 6.9 applies shall
be third party beneficiaries of this Section 6.9, each of
whom may enforce the provisions of this Section 6.9).
(e) In the event Parent, the Surviving Corporation or any
of their respective successors or assigns (i) consolidates
with or merges into any other Person and shall not be the
continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any Person,
then, and in either such case, proper provision shall be made so
that the successors and assigns of Parent or the Surviving
Corporation, as the case may be, shall assume all of the
obligations set forth in this Section 6.9. The agreements
and covenants contained herein shall not be deemed to be
exclusive of any other rights to which any Indemnified Party is
entitled, whether pursuant to Law, Contract or otherwise.
Nothing in this Agreement is intended to, shall be construed to
or shall release, waive or impair any rights to directors
and officers insurance claims under any policy that is or
has been in existence with respect to the Company or its
officers, directors and employees, it being understood and
agreed that the indemnification provided for in this
Section 6.9 is not prior to, or in substitution for, any
such claims under any such policies.
SECTION 6.10.
Section 16 Matters.
Prior to the
Effective Time, Parent, Merger Sub and the Company shall take
all such steps as may be required to cause the transactions
contemplated by Section 2.4 and any other dispositions of
equity securities of the Company (including derivative
securities) in connection with this Agreement by each individual
who is subject to the reporting requirements of
Section 16(a) of the Exchange Act with respect to the
Company to be exempt under
Rule 16b-3
under the Exchange Act in accordance with that certain No-Action
Letter dated January 12, 1999 issued by the SEC regarding
such matters.
SECTION 6.11.
Stockholder Litigation.
The Company
shall give Parent the opportunity to participate in the defense
or settlement of any stockholder litigation against the Company
and/or
its
directors relating to the Merger or any of the other
Transactions, and no such settlement shall be agreed to without
Parents prior written consent.
SECTION 6.12.
Estoppel Certificate.
Promptly after
the date of this Agreement, the Company shall use reasonable
best efforts to obtain an estoppel certificate, in a form
reasonably satisfactory to Parent, from
ARE-20/22/1300
Firstfield Quince Orchard, LLC, the landlord of the Leased Real
Property located at 20 Firstfield Road in Gaithersburg,
Maryland, in which the Company is a tenant.
SECTION 6.13.
Interim Financing.
Parent hereby
agrees to lend to the Company up to a principal amount of
$5,000,000 in immediately available funds, in two installments
of up to $2,500,000 each, on August 1, 2008 and
September 2, 2008, respectively (each a
Loan
and collectively the
Loans
);
provided
,
however
, that
Parent shall not be obligated to make any Loan to the Company
(a) upon the termination of this Agreement in accordance
with its terms, (b) if the Effective Time occurs prior to
August 1, 2008, or (c) if the Company shall have
breached in any material respect any of its obligations under
the Interim Note and such breach has not been cured (the
circumstances set forth in clause (c), a
Loan
Default
);
provided further
,
however
,
that Parent shall not be obligated to make the second Loan to
the Company on September 2, 2008 if the Effective Time
occurs after August 1, 2008 and before September 2,
2008. The Loans shall be evidenced by a single Promissory Note,
in the form of Exhibit D attached hereto (the
Interim Note
), executed by the Company on the
date of this Agreement and payable to the order of Parent in an
amount equal to the unpaid principal amount of the Loans. The
Loans are not revolving in nature and no Loan may be reborrowed
once it has been repaid. The Company shall give Parent at least
five Business Days irrevocable written notice of the
Companys intention to receive a Loan from Parent. Such
notice shall specify the amount of the Loan, the date on which
the Loan will be made by Parent and the wire transfer
instructions for the Company bank account to which Parent shall
transfer an amount of funds equal to the full amount of such
Loan, and shall certify that, as of the date of such notice, no
Loan Default exists. The Companys acceptance of any Loan
shall constitute the Companys reaffirmation that as of the
date of such Loan, no Loan Default exists. Subject to the
proviso in the first sentence of this Section 6.13, Parent
shall make such Loan in accordance with such notice. All of the
other terms relating to the Loans are set forth in the Interim
Note.
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ARTICLE 7
CONDITIONS
SECTION 7.1.
Conditions to Each Partys Obligation
To Effect the Merger
. The respective obligations of each
party to effect the Merger are subject to the satisfaction or,
to the extent permitted by applicable Law, waiver on or prior to
the Closing Date of each of the following conditions:
(a)
Stockholder Approval
. This Agreement shall have been
adopted by the Required Company Stockholder Vote.
(b)
HSR Act
. The waiting period (and any extension
thereof) applicable to the Merger and the other Transactions
under the HSR Act shall have been terminated or shall have
expired.
(c)
CFIUS
. Either (i) CFIUS shall have provided
notice to the effect that review or investigation of the Merger
and the other Transactions has concluded, and that a
determination has been made that there are no issues of national
security of the United States sufficient to warrant further
investigation under the DPA, or (ii) the President of the
United States shall not have taken action to block or prevent
the consummation of the Merger and the other Transactions under
the DPA and the applicable period of time for the President to
take such action shall have expired.
(d)
No Injunctions or Restraints
. No Judgment issued by a
court of competent jurisdiction or by a Governmental Authority,
nor any Law or other legal restraint or prohibition, shall be in
effect that would make the Merger or the other Transactions
illegal or otherwise prevent the consummation thereof;
provided
,
however
, that the party seeking to
assert this condition shall have complied with the provisions of
Section 6.5.
(e)
Exchange Agreement
. The transactions contemplated by
the Exchange Agreement shall have been consummated, including
either (i) Parent has delivered the Exchange Shares (as
defined in the Exchange Agreement) to the Company stockholders
party to the Exchange Agreement or (ii) Parent is obligated
to deliver the Alternate Consideration (as defined in the
Exchange Agreement) to the Company stockholders party to the
Exchange Agreement immediately following the Effective Time.
SECTION 7.2.
Conditions to Obligations of Parent and
Merger Sub
. The obligations of Parent and Merger Sub to
effect the Merger are further subject to the satisfaction, or to
the extent permitted by applicable Law, the waiver on or prior
to the Closing Date of each of the following conditions:
(a)
Representations and Warranties
. (i) The
representations and warranties of the Company contained in
Sections 3.1(a) (the first sentence), 3.2(a) and (c),
3.3(a) and (b), 3.9 and 3.11 shall be true and correct (other
than de minimis inaccuracies) as of the date hereof and as of
the Closing Date (except to the extent expressly made as of an
earlier date, in which case as of such earlier date) and
(ii) the representations and warranties of the Company
contained in this Agreement (other than in Sections 3.1(a)
(the first sentence), 3.2(a) and (c), 3.3(a) and (b), 3.9 and
3.11) shall be true and correct (without giving effect to any
limitation on any representation or warranty indicated by the
words Company Material Adverse Effect, in all
material respects, in any material respect,
material or materially) as of the date
hereof and as of the Closing Date (except to the extent
expressly made as of an earlier date, in which case as of such
earlier date), except in the case of this clause (ii), where the
failure of any such representations and warranties to be so true
and correct would not, and would not reasonably be expected to,
individually or in the aggregate, have a Company Material
Adverse Effect.
(b)
Performance of Obligations of the Company
. The
Company shall have performed in all material respects all of the
obligations, and complied in all material respects with the
agreements and covenants, required to be performed by or
complied with by it under this Agreement at or prior to the
Closing Date.
(c)
Certificates
. Parent and Merger Sub shall have
received certificates executed on behalf of the Company by the
chief executive officer or chief financial officer of the
Company, certifying that the conditions set forth in
Sections 7.2(a) and (b) have been satisfied.
(d)
Litigation
. There shall not be pending or
threatened any Proceeding by a Governmental Authority
(i) seeking to restrain or prohibit the consummation of the
Transactions or seeking to obtain from the Company, Parent or
Merger Sub any damages that are material in relation to the
Company, (ii) seeking to prohibit or limit the ownership or
operation by the Company, Parent or any of Parents
Subsidiaries of any portion of the business or assets of the
Company, Parent or any of Parents Subsidiaries, or to
compel the Company, Parent or any of Parents Subsidiaries
to dispose of or hold separate any portion of the business or
assets of the Company, Parent or any of Parents
Subsidiaries, as a result of any Transaction, (iii) seeking
to impose limitations on the ability of Parent or Merger Sub to
acquire or hold, or exercise full rights of ownership of, any
shares of Company Common Stock, including the right to vote the
Company Common Stock purchased by it on all matters properly
presented to the stockholders of
A-32
the Company, (iv) seeking to prohibit Parent or any of its
Subsidiaries from effectively controlling the business or
operations of the Company, or (v) which otherwise is
reasonably likely to have a Company Material Adverse Effect.
(e)
Absence of Material Adverse Effect
. Since the
date of this Agreement, no event, condition, change, effect,
occurrence or development shall have occurred that, individually
or in the aggregate, has had or would reasonably be expected to
have, a Company Material Adverse Effect.
SECTION 7.3.
Conditions to Obligation of the
Company
. The obligation of the Company to effect the Merger
is further subject to the satisfaction, or to the extent
permitted by applicable Law, the waiver on or prior to the
Closing Date of each of the following conditions:
(a)
Representations and Warranties
. The representations
and warranties of Parent and Merger Sub contained in this
Agreement shall be true and correct (without giving effect to
any limitation on any representation or warranty indicated by
the words Parent Material Adverse Effect, in
all material respects, in any material
respect, material or materially)
as of the date hereof and as of the Closing Date (except to the
extent expressly made as of an earlier date, in which case as of
such earlier date), except where the failure of any such
representations and warranties to be so true and correct would
not, and would not reasonably be expected to, individually or in
the aggregate, have a Parent Material Adverse Effect.
(b)
Performance of Obligations of Parent and Merger
Sub
. Parent and Merger Sub shall have performed in all
material respects all of the obligations, and complied in all
material respects with the agreements and covenants, required to
be performed by or complied with by them under this Agreement at
or prior to the Closing Date.
(c)
Certificates
. The Company shall have received
certificates executed on behalf of Parent by the chief executive
officer or chief financial officer of Parent, certifying that
the conditions set forth in Sections 7.3(a) and
(b) have been satisfied.
SECTION 7.4.
Frustration of Conditions
. None of the
Company, Parent or Merger Sub may rely on the failure of any
condition set forth in Section 7.1 to be satisfied if such
failure was caused by such partys failure to act in good
faith or to use its reasonable best efforts to consummate the
Merger.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1.
Termination
. This Agreement may be
terminated and the Merger may be abandoned at any time prior to
the Effective Time, whether before or after this Agreement has
been adopted by the Required Company Stockholder Vote:
(a) by mutual written consent of Parent, Merger Sub and the
Company;
(b) by either the Company or Parent, if the Merger has not been
consummated on or prior to September 15, 2008 (the
Outside Date
);
provided
,
however
, that the right to terminate this Agreement
pursuant to this Section 8.1(b) shall not be available to
any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the Merger not
being consummated on or prior to the Outside Date;
(c) by either the Company or Parent, if any Judgment issued by a
court of competent jurisdiction or by a Governmental Authority,
or Law or other legal restraint or prohibition in each case
making the Merger illegal or permanently restraining, enjoining
or otherwise preventing the consummation thereof shall be in
effect and shall have become final and nonappealable;
provided
,
however
, that the party seeking the
right to terminate this Agreement pursuant to this
Section 8.1(c) shall have complied with the provisions of
Section 6.5 and the right to terminate pursuant to this
Section 8.1(c) shall not be available if the issuance of
such legal restraint or prohibition was primarily due to the
failure of such party to perform any of its obligations under
this Agreement;
(d) by either the Company or Parent, if upon a vote at a
duly held Company Stockholders Meeting the Required Company
Stockholder Vote shall not have been obtained;
(e) by Parent, prior to the receipt of the Required Company
Stockholder Vote, if (i) a Company Adverse Recommendation
Change shall have occurred, (ii) the Company Board or any
committee thereof shall not have rejected any tender or exchange
offer that is commenced or a Takeover Proposal (replacing
15% in the definition thereof with 50%) that is made
in writing to the
A-33
Company Board and publicly disseminated within 10 Business Days
of the commencement or public dissemination thereof (including,
for these purposes, by taking no position with respect to the
acceptance by the Companys stockholders of a tender offer
or exchange offer within such period, which shall constitute a
failure to reject such offer), or (iii) the Company shall
have intentionally breached or knowingly violated in any
material respect any of its obligations under Section 6.8;
(f) by Parent, if (i) there shall have occurred any event,
condition, change, effect, occurrence or development of a state
of facts that, individually or in the aggregate, has had or
would reasonably be expected to have, a Company Material Adverse
Effect, and Parent has provided the Company with written notice
20 calendar days prior to the effect of such termination,
(ii) the Company shall have breached any of its
representations or warranties or failed to perform in any
material respect any of its covenants or other agreements in
each case contained in this Agreement, which breach or failure
to perform (A) would give rise to the failure of a
condition set forth in Section 7.2, and (B) is
incapable of being cured or has not been cured by the Company
within 20 calendar days after written notice has been given by
Parent to the Company of such breach or failure to perform, or
(iii) any stockholder of the Company party thereto shall
have breached in any material respect any of its obligations
under the Exchange Agreement and such breach is incapable of
being cured or has not been cured by such stockholder within 10
calendar days after written notice has been given by Parent to
such stockholder of such breach;
(g) by the Company, if (i) Parent shall have breached any
of its representations or warranties or failed to perform in any
material respect any of its covenants or other agreements in
each case contained in this Agreement, which breach or failure
to perform (A) has had or would reasonably be expected to
have a Parent Material Adverse Effect, and (B) is incapable
of being cured or has not been cured by Parent within 20
calendar days after written notice has been given by the Company
to Parent of such breach or failure to perform, or
(ii) Parent shall have failed to perform in any material
respect its obligations under Section 6.13 or its
obligations under the Interim Note, and such failure to perform
is incapable of being cured or has not been cured by Parent
within 5 Business Days after written notice has been given by
the Company to Parent of such breach or failure to
perform; or
(h) by the Company, if prior to the receipt of the Required
Company Stockholder Vote, (i) the Company has not
intentionally breached or knowingly violated its obligations
under Section 6.8, (ii) the Company Board has received
a Takeover Proposal that it has determined in good faith, after
consultation with Cowen or another financial advisor of
nationally recognized reputation, constitutes a Superior
Proposal, (iii) the Company has notified Parent in writing
that it intends to enter into a definitive agreement
implementing such Superior Proposal, attaching the most current
version of such agreement (including any amendments, supplements
or modifications) to such notice (a
Superior
Proposal Notice
), (iv) during the three
Business Day period following Parents receipt of a
Superior Proposal Notice, (A) the Company shall have
offered to negotiate with (and, if accepted, negotiated in good
faith with), and shall have caused its respective financial and
legal advisors to offer to negotiate with (and, if accepted,
negotiate in good faith with), Parent in making adjustments to
the terms and conditions of this Agreement and (B) the
Company Board shall have determined in good faith, after the end
of such three Business Day period, and after considering the
results of such negotiations and the revised proposals made by
Parent, if any, that the Superior Proposal giving rise to such
notice continues to be a Superior Proposal;
provided
,
however
, that any amendment, supplement or modification
to the financial terms or other material terms of any Takeover
Proposal shall be deemed a new Takeover Proposal and the Company
may not terminate this Agreement pursuant to this
Section 8.1(h) unless the Company has complied with the
requirements of this Section 8.1(h) with respect to such
new Takeover Proposal, including sending a Superior
Proposal Notice with respect to such new Takeover Proposal
and offering to negotiate for (1) three Business Days, in
the case of an amendment, supplement or modification to the
financial terms, or (2) two Business Days, in the case of
an amendment, supplement or modification to any other material
term, in each case from such new Superior Proposal Notice,
and (v) the Company Board concurrently approves, and the
Company concurrently enters into, a definitive agreement
providing for the implementation of such Superior Proposal.
The party desiring to terminate this Agreement shall give
written notice of such termination to the other party.
SECTION 8.2.
Effect of Termination
. Upon the
termination of this Agreement pursuant to Section 8.1, this
Agreement shall forthwith become null and void and there shall
be no liability or obligation on the part of any party hereto,
except for the provisions of (i) Section 3.9,
(ii) Section 4.5, (iii) Section 6.4,
(iv) the last sentence of Section 6.6, (v) the
last sentence of Section 6.7(a),
(vi) Section 6.7(b), (vii) this Section 8.2,
(viii) Section 8.3, and (ix) Article 9,
which shall survive such termination;
provided
,
however
, that nothing herein shall relieve any party from
liability for any intentional breach of this Agreement prior to
such termination. The Confidentiality Agreement shall not be
affected by the termination of this Agreement.
SECTION 8.3.
Fees and Expenses
.
(a) Except as set forth in this Section 8.3, all costs and
expenses incurred in connection with this Agreement and the
Transactions shall be paid by the party incurring such expenses,
whether or not the Merger or any of the other Transactions are
consummated.
A-34
(b) In the event that, after the date of this Agreement:
(i) (A) a Takeover Proposal shall be pending or shall have
been made or remade to the Company or shall be pending or shall
have been made or remade directly to its stockholders generally
or any Person shall have publicly announced an intention to make
a Takeover Proposal and thereafter, (B) this Agreement is
terminated by the Company or Parent pursuant to
Section 8.1(b) or (d) and (C) the Company enters
into a definitive agreement with respect to, or consummates a
transaction contemplated by, any Takeover Proposal (replacing
15% in the definition thereof with 50%)
within 12 months of the date this Agreement is terminated
(so long as, in the case of a transaction that has not been
consummated within such period, such transaction is thereafter
consummated);
(ii) (A) a Takeover Proposal shall be pending or shall have
been made or remade to the Company or shall be pending or shall
have been made or remade directly to its stockholders generally
or any Person shall have publicly announced an intention to make
a Takeover Proposal and thereafter, (B) this Agreement is
terminated by Parent pursuant to Section 8.1(f)(ii) and
(C) the Company enters into a definitive agreement with
respect to, or consummates a transaction contemplated by any
Takeover Proposal (replacing 15% in the definition
thereof with 50%) within 12 months of the date
this Agreement is terminated (so long as, in the case of a
transaction that has not been consummated within such period,
such transaction is thereafter consummated);
(iii) this Agreement is terminated by Parent pursuant to
Section 8.1(e) (or by Parent or the Company pursuant to
Section 8.1(b) or (d) or by Parent pursuant to
Section 8.1(f) following any time at which Parent was
entitled to terminate this Agreement pursuant to
Section 8.1(e)); or
(iv) this Agreement is terminated by the Company pursuant to
Section 8.1(h);
then in any such event under clause (i), (ii), (iii) or
(iv) of this Section 8.3(b), the Company shall pay to
Parent a termination fee of $6,000,000 (the
Termination
Fee
). Any payment required to be made pursuant to
clause (i) or clause (ii) of this Section 8.3(b)
shall be made to Parent promptly following the consummation of
the transaction contemplated by the Takeover Proposal referred
to therein (and in any event not later than two Business Days
after delivery to the Company of notice of demand for payment
following such date); any payment required to be made pursuant
to clause (iii) of this Section 8.3(b) shall be made
to Parent upon the earlier to occur of (A) the date
occurring 90 days following the termination of this
Agreement by Parent and (B) the consummation of a
transaction contemplated by a Takeover Proposal; and any payment
required to be made pursuant to clause (iv) of this
Section 8.3(b) shall be made to Parent in cash no later
than 10 Business Days following such termination;
provided
,
however
, that if the Company has not
paid such amount in cash by the tenth Business Day following
termination, then the Company shall immediately provide to
Parent, in lieu of cash, the number of newly issued shares
(rounded to the nearest whole share) of Company Common Stock
equal to (A) $6,000,000 divided by (B) the average of
the closing sale prices for the Company Common Stock on the
Nasdaq, as reported in
The Wall Street Journal
for each
of the 15 consecutive trading days ending with the trading day
immediately preceding the date of this Agreement (the
Average Price
). The Company shall
promptly, and in any event within two Business Days following
conclusion of the ten Business Day period following termination,
prepare and file with the SEC, and have declared effective by
the SEC as soon as practicable following such filing, a resale
shelf registration statement on
Form S-3
covering the shares of Company Common Stock issued to Parent
pursuant to this Section 8.3(b) pursuant to a registration
rights agreement (in customary form) to be agreed upon and
entered into by the Company and Parent in connection with such
issuance. The Company shall use its reasonable best efforts to
keep such shelf registration statement continuously effective,
in compliance with the Securities Act and usable for resale of
such shares until the earlier of (y) the day on which
Parent no longer holds any shares issued pursuant to this
Section 8.3(b) and (z) the first anniversary of the
issuance of such shares. Notwithstanding the foregoing, in no
event shall the number of shares issued to Parent pursuant to
this Section 8.3(b) exceed the number of shares equal to
19.9% of the Companys Common Stock issued and outstanding
as of the date of this Agreement;
provided
,
however
, that if under any circumstance the Average Price
multiplied by the number of shares of Company Common Stock
issued pursuant to this Section 8.3(b) is less than
$6,000,000, then the Company shall pay to Parent such difference
in cash on the day of the issuance of the shares to Parent.
(c) Notwithstanding anything to the contrary contained in
this Agreement, if the Company, prior to the receipt of the
Required Company Stockholder Vote, receives an unsolicited,
written Takeover Proposal made in circumstances not involving an
intentional breach or knowing violation of Section 6.8, and
the Company Board reasonably determines in good faith (after
receiving the advice of Cowen or another financial advisor of
nationally recognized reputation) that such Takeover Proposal
constitutes, or is reasonably likely to lead to, a Superior
Proposal, then the Company shall use reasonable best efforts to
enable it to fund the payment of the Termination Fee pursuant to
Section 8.3(b)(iv) in cash within 10 Business Days
following the date of termination of this Agreement pursuant to,
and in accordance with the terms and conditions of,
Section 8.1(h), it being understood that such reasonable
best efforts shall include seeking and negotiating the terms of
a financing from third parties, including financial institutions
and the party making the Takeover Proposal (such financing may
include the sale of securities of the Company or the incurrence
of indebtedness by the Company) for purposes of funding the
payment of the Termination Fee pursuant to
A-35
Section 8.3(b)(iv);
provided
,
however
, that
no such financing shall (i) be consummated,
(ii) impose any obligations whatsoever on the Company, or
(iii) result in the payment (or obligation to pay) by the
Company of any fees or expenses unless and until this Agreement
is validly terminated by the Company pursuant to, and in
accordance with the terms and conditions of, Section 8.1(h).
(d) The Company acknowledges that the agreement contained in
Section 8.3(b) is an integral part of the transactions
contemplated by this Agreement, and that, without that
agreement, Parent would not enter into this Agreement. Each of
Parent and Merger Sub acknowledges and agrees that in the event
that Parent receives a Termination Fee payable pursuant to
Section 8.3(b), the receipt by Parent of such amount shall
constitute the sole and exclusive remedy for Parent and Merger
Sub, and such amount shall constitute liquidated damages in
respect of, any termination of this Agreement;
provided
,
however
, that nothing to the contrary in this
Section 8.3(d) shall relieve any party from liability, or
constitute the sole and exclusive remedy for, any intentional
breach of this Agreement prior to a termination of this
Agreement. If the Company fails to make payment of such fee
within the applicable time period specified in
Section 8.3(b) and Parent commences a suit to collect such
fee, the Company shall indemnify and reimburse Parent for its
fees and expenses (including attorneys fees and expenses)
incurred in connection with such suit and shall pay interest on
the amount of the payment at the prime rate as published in
The Wall Street Journal
in effect on the date the fee was
payable pursuant to Section 8.3(b).
SECTION 8.4.
Amendment
. This Agreement may be
amended by the parties hereto by action taken by or on behalf of
the respective Boards of Directors of the Company and Merger Sub
and the Management Board and Supervisory Board of Parent at any
time prior to the Effective Time, whether before or after
approval of this Agreement and the Transactions by the
stockholders of the Company;
provided
,
however
,
that after any such approval by the stockholders of the Company,
no amendment shall be made that in any way materially adversely
affects the rights of such stockholders (other than a
termination of this Agreement in accordance with the provisions
hereof) without the further approval of such stockholders. This
Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
SECTION 8.5.
Waiver
. Any failure of any of the
parties to comply with any obligation, covenant, agreement or
condition herein may be waived at any time prior to the
Effective Time by any of the parties entitled to the benefit
thereof only by a written instrument signed by each such party
granting such waiver, but such waiver or failure to insist upon
strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as
a waiver of or estoppel with respect to, any subsequent or other
failure.
ARTICLE 9
GENERAL PROVISIONS
SECTION 9.1.
Notices
. All notices and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if delivered personally, mailed by
certified mail (return receipt requested) or sent by overnight
courier, or by facsimile (upon confirmation of receipt) to the
parties at the following addresses or at such other addresses as
shall be specified by the parties by like notice:
|
|
|
|
(a)
|
if to Parent or Merger Sub:
Intercell AG
|
Campus Vienna Biocenter 6
1030 Vienna
Austria
Attention: General Counsel
Fax: +43 1 20620 165
with a copy to:
Covington & Burling LLP
1201 Pennsylvania Avenue, N.W.
Washington, DC 20004
Attention: Catherine J. Dargan
Fax:
(202) 778-5567
with a copy to:
Covington & Burling LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018
Attention: Stephen A. Infante
Fax:
(646) 441-9039
A-36
|
|
|
|
(b)
|
if to the Company:
Iomai Corporation
|
20 Firstfield Road
Gaithersburg, MD 20878
Attention: General Counsel
Fax:
(301) 556-4501
with a copy to:
Ropes & Gray LLP
One International Place
Boston, MA 02110
Attention: Paul M. Kinsella
Fax:
(617) 235-0822
Notice so given shall (in the case of notice so given by mail)
be deemed to be given when received and (in the case of notice
so given by cable, telegram, facsimile, telex or personal
delivery) on the date of actual transmission or (as the case may
be) personal delivery.
SECTION 9.2.
Representations and Warranties
. The
representations and warranties contained in this Agreement shall
not survive the Merger.
Section 9.3.
Knowledge Qualifiers
.
To the
knowledge of the Company
and similar phrases mean the
actual knowledge of the officers listed on Schedule III
hereto after reasonable inquiry.
SECTION 9.4.
Interpretations
. When a
reference is made in this Agreement to Articles, Sections or
Exhibits, such reference shall be to an Article, Section or
Exhibit to this Agreement unless otherwise indicated. The words
include, includes and
including when used herein shall be deemed in each
case to be followed by the words without limitation.
Any references in this Agreement to the date hereof
refers to the date of execution of this Agreement. The word
or shall not be exclusive.
Business
Day
means any day other than Saturday, Sunday or any
day on which commercial banks in New York, New York or Vienna,
Austria are authorized or required to close. The table of
contents, index of defined terms and headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. This
Agreement shall be construed without regard to any presumption
or rule requiring construction or interpretation against the
party drafting or causing any instrument to be drafted or
acknowledgment of the materiality of such information. No
summary of this Agreement prepared by any party shall affect the
meaning or interpretation of this Agreement.
SECTION 9.5.
Governing Law; Jurisdiction
.
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware regardless of
the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
(b) Each of the parties hereto (i) consents to submit
itself to the personal jurisdiction of any state or federal
court located in the State of Delaware or in the Court of
Chancery of the State of Delaware in the event any dispute
arises out of this Agreement, the Merger or any of the other
Transactions, (ii) agrees that it will not attempt to deny
or defeat such personal jurisdiction by motion or other request
for leave from any such court, and (iii) agrees that it
will not bring any action relating to this Agreement or any of
the Transactions in any court other than a state or federal
court located in the State of Delaware or the Court of Chancery
of the State of Delaware.
(c) Each of the parties to this Agreement irrevocably waives any
and all right to trial by jury in any legal proceeding arising
out of or relating to this Agreement or any of the Transactions.
SECTION 9.6.
Counterparts; Facsimile Transmission of
Signatures
. This Agreement may be executed in any
number of counterparts and by different parties hereto in
separate counterparts, and delivered by means of facsimile
transmission or otherwise, each of which when so executed and
delivered shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.
A-37
SECTION 9.7.
Assignment; No Third Party
Beneficiaries
.
(a) This Agreement and all of the provisions hereto shall be
binding upon and inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights,
interests or obligations set forth herein shall be assigned by
any party hereto without the prior written consent of the other
parties hereto and any purported assignment without such consent
shall be void, except that Parent and Merger Sub, upon prior
written notice to the Company, may assign, in their sole
discretion, any of or all of their respective rights, interests
and obligations under this Agreement to Parent or to any
wholly-owned subsidiary of Parent, but no such assignment shall
relieve Parent or Merger Sub of any of their respective
obligations hereunder.
(b) Nothing in this Agreement shall be construed as giving any
Person, other than the parties hereto and their heirs,
successors, legal representatives and permitted assigns, any
right, remedy or claim under or in respect of this Agreement or
any provision hereof, except that from and after the Effective
Time each Indemnified Party is an intended third party
beneficiary of Section 6.9, such Persons may specifically
enforce such provisions. No covenant or other undertakings in
this Agreement shall constitute an amendment to any employee
benefit plan, program, policy or arrangement, and any covenant
or undertaking that suggests that an employee benefit plan,
program, policy or arrangement will be amended shall be
effective only upon the adoption of a written amendment in
accordance with the amendment procedures of such plan, program,
policy or arrangement.
SECTION 9.8.
Severability
. If any provision of this
Agreement shall be held to be illegal, invalid or unenforceable
under any applicable Law, then such contravention or invalidity
shall not invalidate the entire Agreement. Such provision shall
be deemed to be modified to the extent necessary to render it
legal, valid and enforceable, and if no such modification shall
render it legal, valid and enforceable, then this Agreement
shall be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties shall be
construed and enforced accordingly.
SECTION 9.9.
Entire Agreement
. This Agreement
(including the Schedules and Exhibits hereto), the Company
Disclosure Letter, the Exchange Agreement, the Voting Agreement
and the Confidentiality Agreement contain all of the terms of
the understandings of the parties hereto with respect to the
subject matter hereof or thereof.
SECTION 9.10.
Enforcement
. The parties agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this
Agreement in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
[
The remainder of this page is intentionally blank.
]
A-38
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be executed as of the date first
written above.
IOMAI CORPORATION
Name: Stanley C. Erck
|
|
|
|
Title:
|
President, Chief Executive Officer,
|
Treasurer and Director
INTERCELL AG
Name: Gerd Zettlmeissl
|
|
|
|
Title:
|
Chief Executive Officer
|
Name: Werner Lanthaler
|
|
|
|
Title:
|
Chief Financial Officer
|
ZEBRA MERGER SUB, INC.
Name: Gerd Zettlmeissl
Name: Werner Lanthaler
[Signature Page to Merger Agreement]
A-39
SCHEDULE I
Stockholders
Participating in Share Exchange Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Warrants
|
|
|
Total
|
|
|
New Enterprise Associates 10, Limited Partnership
|
|
|
6,417,187
|
|
|
|
550,535
|
|
|
|
6,967,722
|
|
1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel: (410) 244-0115
Fax: (410) 752-7721
|
|
|
|
|
|
|
|
|
|
|
|
|
NEA Ventures 2002, Limited Partnership
|
|
|
4,610
|
|
|
|
0
|
|
|
|
4,610
|
|
1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel: (410) 244-0115
Fax: (410) 752-7721
|
|
|
|
|
|
|
|
|
|
|
|
|
Essex Woodlands Health Ventures V, L.L.C.
|
|
|
2,802,686
|
|
|
|
0
|
|
|
|
2,802,686
|
|
435 Tasso Street
Palo Alto, CA 94301
Attn: Jeff Himawan
Tel: (650) 543-1555
Fax: (650) 543-1504
|
|
|
|
|
|
|
|
|
|
|
|
|
Gruber and McBaine Capital Management signing on behalf of the
following accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
50 Osgood Place, Penthouse
San Francisco, CA 94133
Attn: Christine Arroyo
Tel: (415) 981-0655
Fax: (415) 981-6434
|
|
|
|
|
|
|
|
|
|
|
|
|
Lagunitas Partners LP
|
|
|
783,081
|
|
|
|
70,000
|
|
|
|
853,081
|
|
Donaghy Sales Inc.
|
|
|
65,700
|
|
|
|
0
|
|
|
|
65,700
|
|
Gruber & McBaine International
|
|
|
120,000
|
|
|
|
24,500
|
|
|
|
144,500
|
|
Karl Matthies Trust udt 7/25/05
|
|
|
12,000
|
|
|
|
0
|
|
|
|
12,000
|
|
Aaronel D. Gruber
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Gruber Partnership
|
|
|
2,000
|
|
|
|
0
|
|
|
|
2,000
|
|
Gruber Family Foundation
|
|
|
31,250
|
|
|
|
0
|
|
|
|
31,250
|
|
I & A Gruber Charitable
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Gruber Partnership 2
|
|
|
2,000
|
|
|
|
0
|
|
|
|
2,000
|
|
Irving & Aaronel Gruber
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Irving B. Gruber
|
|
|
1,000
|
|
|
|
0
|
|
|
|
1,000
|
|
Jamie deRoy
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Jon D. Gruber
|
|
|
14,000
|
|
|
|
0
|
|
|
|
14,000
|
|
Jon D & Linda W Gruber Trust
|
|
|
47,709
|
|
|
|
10,500
|
|
|
|
58,209
|
|
Lindsay Gruber Dunham
|
|
|
500
|
|
|
|
1,750
|
|
|
|
2,250
|
|
Jon D Gruber TTEE fbo Jonathan W Gruber Trust
|
|
|
5,750
|
|
|
|
1,750
|
|
|
|
7,500
|
|
Linda W Gruber
|
|
|
3,150
|
|
|
|
0
|
|
|
|
3,150
|
|
Terry Deroy Gruber
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Terry D. Gruber Trust
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Amanda McBaine
|
|
|
1,000
|
|
|
|
0
|
|
|
|
1,000
|
|
J Patterson McBaine
|
|
|
132,650
|
|
|
|
14,000
|
|
|
|
146,650
|
|
J Patterson and Susie McBaine Foundation
|
|
|
7,620
|
|
|
|
0
|
|
|
|
7,620
|
|
J. Patterson & Susan S. McBaine
|
|
|
11,000
|
|
|
|
0
|
|
|
|
11,000
|
|
Susan S. McBaine
|
|
|
1,000
|
|
|
|
0
|
|
|
|
1,000
|
|
J. Patterson McBaine TTEE of Turner H. McBaine
|
|
|
17,375
|
|
|
|
0
|
|
|
|
17,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
10,486,268
|
|
|
|
673,035
|
|
|
|
11,159,303
|
|
A-40
SCHEDULE II
Stockholders
Participating in Voting Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Warrants
|
|
|
Total
|
|
|
New Enterprise Associates 10, Limited Partnership
|
|
|
6,417,187
|
|
|
|
550,535
|
|
|
|
6,967,722
|
|
1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel: (410) 244-0115
Fax: (410) 752-7721
|
|
|
|
|
|
|
|
|
|
|
|
|
NEA Ventures 2002, Limited Partnership
|
|
|
4,610
|
|
|
|
0
|
|
|
|
4,610
|
|
1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel: (410) 244-0155
Fax: (410) 752-7721
|
|
|
|
|
|
|
|
|
|
|
|
|
Essex Woodlands Health Ventures V, L.L.C.
|
|
|
2,802,686
|
|
|
|
0
|
|
|
|
2,802,686
|
|
435 Tasso Street
Palo Alto, CA 94301
Attn: Jeff Himawan
Tel: (650) 543-1555
Fax: (650) 543-1504
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Partners Fund VI, L.P.
|
|
|
173,924
|
|
|
|
0
|
|
|
|
173,924
|
|
100 Shoreline Highway
Suite 282, Building B
Mill Valley, CA 94941
Attn: Sheila Mutter
Tel: (415) 332-9999
Fax: (415) 332-9998
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Partners Affiliates VII, L.P.
|
|
|
51,806
|
|
|
|
0
|
|
|
|
51,806
|
|
100 Shoreline Highway
Suite 282, Building B
Mill Valley, CA 94941
Attn: Sheila Mutter
Tel: (415) 332-9999
Fax: (415) 332-9998
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Partners Fund VII, L.P.
|
|
|
884,132
|
|
|
|
0
|
|
|
|
884,132
|
|
100 Shoreline Highway
Suite 282, Building B
Mill Valley, CA 94941
Attn: Sheila Mutter
Tel: (415) 332-9999
Fax: (415) 332-9998
|
|
|
|
|
|
|
|
|
|
|
|
|
ProQuest Investments II, L.P.
|
|
|
989,649
|
|
|
|
0
|
|
|
|
989,649
|
|
90 Nassau Street, 5th Floor
Princeton, NJ 08542
Attn: Pasquale DeAngelis
Tel: (609) 919-3567
Fax: (609) 375-1047
|
|
|
|
|
|
|
|
|
|
|
|
|
ProQuest Investments II Advisors Fund, L.P.
|
|
|
23,815
|
|
|
|
0
|
|
|
|
23,815
|
|
90 Nassau Street, 5th Floor
Princeton, NJ 08542
Attn: Pasquale DeAngelis
Tel: (609) 919-3567
Fax: (609) 375-1047
|
|
|
|
|
|
|
|
|
|
|
|
|
A-41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Warrants
|
|
|
Total
|
|
|
Gruber and McBaine Capital Management signing on behalf of the
following accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
50 Osgood Place, Penthouse
San Francisco, CA 94133
Attn: Christine Arroyo
Tel: (415) 981-0655
Fax: (415) 981-6434
|
|
|
|
|
|
|
|
|
|
|
|
|
Lagunitas Partners LP
|
|
|
783,081
|
|
|
|
70,000
|
|
|
|
853,081
|
|
Donaghy Sales Inc.
|
|
|
65,700
|
|
|
|
0
|
|
|
|
65,700
|
|
Gruber & McBaine International
|
|
|
120,000
|
|
|
|
24,500
|
|
|
|
144,500
|
|
Karl Matthies Trust udt 7/25/05
|
|
|
12,000
|
|
|
|
0
|
|
|
|
12,000
|
|
Lockheed Martin Master Retirement Trust
|
|
|
545,000
|
|
|
|
0
|
|
|
|
545,000
|
|
Stanley C. Erck
|
|
|
25,000
|
|
|
|
0
|
|
|
|
25,000
|
|
c/o Iomai
Corporation
20 Firstfield Road
Gaithersburg, MD 20878
Tel: (301) 556-4500
Fax: (301) 556-4501
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory M. Glenn
|
|
|
71,885
|
|
|
|
0
|
|
|
|
71,885
|
|
c/o Iomai
Corporation
20 Firstfield Road
Gaithersburg, MD 20878
Tel: (301) 556-4500
Fax: (301) 556-4501
|
|
|
|
|
|
|
|
|
|
|
|
|
Russell P. Wilson
|
|
|
11,000
|
|
|
|
0
|
|
|
|
11,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c/o Iomai
Corporation
20 Firstfield Road
Gaithersburg, MD 20878
Tel:
(301) 556-4500
Fax:
(301) 556-4501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
12,981,475
|
|
|
|
645,035
|
|
|
|
13,626,510
|
|
A-42
SCHEDULE III
Knowledge
Officers/Persons
Stanley C. Erck
Gregory M. Glenn
Russell P. Wilson
Kai Chen
Jin Sook Chung
Larry Ellingsworth
Sarah Frech
Merv Hamer
Kim Poffenberger
Robert Seid
A-43
EXHIBIT A
Exchange
Agreement
A-44
EXHIBIT B
Voting
Agreement
A-45
EXHIBIT C
Certificate
of Incorporation of Surviving Corporation
A-46
FOURTH
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
IOMAI CORPORATION
ARTICLE I
NAME
The name of the Corporation is Iomai Corporation (hereinafter
the Corporation).
ARTICLE II
REGISTERED
OFFICE AND REGISTERED AGENT
The registered office of the Corporation in the State of
Delaware is located at Corporation Trust Center, 1209
Orange Street, Wilmington, County of New Castle. The registered
agent of the Corporation at such address is The Corporation
Trust Company.
ARTICLE III
CORPORATE
PURPOSE
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
ARTICLE IV
CAPITAL
STOCK
The total number of shares of capital stock that the Corporation
shall have authority to issue is one thousand (1,000) shares,
which shall be shares of common stock with the par value of one
cent ($0.01) per share.
ARTICLE V
RESERVATION
OF RIGHT TO AMEND BYLAWS
In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the Corporation is expressly
authorized to adopt, amend or repeal the bylaws of the
Corporation to the fullest extent permitted by the provisions of
the General Corporation Law of the State of Delaware.
ARTICLE VI
ELECTION
OF DIRECTORS
The election of directors need not be conducted by written
ballot except and to the extent provided in the bylaws of the
Corporation.
A-47
ARTICLE VII
COMPROMISE
OR ARRANGEMENT BETWEEN CORPORATION
AND
CREDITORS
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them
and/or
between this Corporation and its stockholders or any class of
them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this
Corporation under Section 291 of Title 8 of the
General Corporation Law of the State of Delaware or on the
application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under Section 279
of Title 8 of the General Corporation Law of the State of
Delaware order a meeting of the creditors or class of creditors,
and/or
of
the stockholders or class of stockholders of this Corporation,
as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors,
and/or
of
the stockholders or class of stockholders of this Corporation,
as the case may be, agree to any compromise or arrangement and
to any reorganization of this Corporation as consequence of such
compromise or arrangement, the said compromise or arrangement
and the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the
creditors or class of creditors,
and/or
on
all the stockholders or class of stockholders, of this
Corporation, as the case may be, and also on this Corporation.
ARTICLE VIII
LIMITATION
ON LIABILITY
A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, except to the extent that
exculpation from liability is not permitted under the General
Corporation Law of the State of Delaware as in effect at the
time such liability is determined. No amendment or repeal of
this Article VIII shall apply to or have any effect on the
liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.
ARTICLE IX
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
1.
Indemnification
. The Corporation shall indemnify
each of its directors, to the maximum extent permitted from time
to time by law, and may indemnify each of its officers, to the
extent provided in the bylaws or approved from time to time by
the board of directors, in either case, except as set forth in
this Article IX, to the extent such person is or was a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact
that he is or was a director or officer of the Corporation, or
is or was serving at the request of the Corporation, as a
director, officer, employee, trustee, partner, member or agent
of, or in a similar capacity with, another corporation,
partnership, joint venture, trust or other enterprise, including
any employee benefit plan (all such persons being referred to
hereafter as an Indemnitee), or by reason of any
action alleged to have been taken or omitted in such capacity,
against expenses (including attorneys fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred (and not otherwise recovered) by Indemnitee or on
Indemnitees behalf in connection with the investigation,
preparation to defend or defense of such action, suit or
proceeding and any appeal therefrom.
2.
Advance of Expenses
. The Corporation shall, upon
request, advance payment of expenses incurred by an Indemnitee
who is or was a director of the Corporation in advance of the
final disposition of any matter, to the extent such advance is
permitted by applicable law, and the Corporation may advance
such expenses to an Indemnitee who is or was an officer of the
Corporation, to the extent permitted by applicable law and
provided for in the bylaws or approved from time to time by the
board of directors.
3.
Insurance
. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a
director, officer, trustee, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer, trustee, employee or agent
of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against the
person and incurred by the person in any such capacity, or
arising out of his or her status as such, whether or not the
Corporation would have the power or the obligation to indemnify
such person against such liability under the provisions of this
Article IX.
A-48
4.
Scope
. The indemnification provided in this
Article IX shall not be exclusive of other indemnification
rights arising under any bylaw, agreement, vote of directors or
stockholders or otherwise and shall inure to the benefit of the
heirs and legal representatives of such Indemnitee. Any
Indemnitee seeking indemnification under this Article IX
shall be deemed to have met the standard of conduct required for
such indemnification unless the contrary shall be established.
ARTICLE X
RESERVATION
OF RIGHT TO AMEND CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend, alter, restate,
change or repeal any provisions contained in this Certificate of
Incorporation, and other provisions authorized by the laws of
the State of Delaware at the time in force may be added or
inserted, in the manner now or hereafter prescribed by law and
all the provisions of this Certificate of Incorporation and all
rights, preferences, privileges and powers conferred in this
Certificate of Incorporation on stockholders, directors,
officers or any other persons are subject to the rights reserved
in this Article X.
[Remainder
of page intentionally left blank.]
A-49
IN WITNESS WHEREOF, this Fourth Amended and Restated Certificate
of Incorporation is signed
this day
of , 2008.
IOMAI CORPORATION
Name:
A-50
EXHIBIT D
Form of
Promissory Note
A-51
PROMISSORY
NOTE
May 12,
2008
FOR VALUE RECEIVED, IOMAI CORPORATION, a Delaware corporation
(the
Company
), hereby promises to pay to the
order of INTERCELL AG, a joint stock corporation incorporated
under the laws of the Republic of Austria (the
Lender
), in lawful money of the United States
and in immediately available funds, the principal sum of FIVE
MILLION UNITED STATES DOLLARS or, if less, the aggregate unpaid
principal amount of all Loans made hereunder in accordance with
Section 6.13 of the Merger Agreement (as defined below) by
the Lender to the Company on or after the date hereof, in either
case as such principal amount may be increased further due to
the compounding of interest in accordance with Section 1(b)
below, together with all accrued and unpaid interest thereon, in
the amounts, at the times, in the manner and subject to the
terms and conditions set forth in this Promissory Note (this
Note
). Capitalized terms used herein and not
otherwise defined shall have the meanings given to them in the
Agreement and Plan of Merger, dated as of May 12, 2008 (the
Merger Agreement
), among the Lender, Zebra
Merger Sub, Inc. and the Company. This Note is the Interim Note
referred to in Section 6.13 of the Merger Agreement.
|
|
|
|
1.
|
Payment; Principal and Interest.
|
(a) Principal Repayment.
The aggregate unpaid
principal amount of this Note shall be payable, together with
accrued and unpaid interest thereon, immediately following the
termination of the Merger Agreement by either the Lender or the
Company for any reason (the
Maturity Date
).
(b) Interest Payments.
The Company promises to
pay interest in lawful money of the United States of America on
the sum of the daily outstanding principal amount of each Loan
from the date hereof until payment in full, which interest shall
be payable at the fixed rate of 10% per annum (the
Interest Rate
). Interest on each Loan shall
be payable in cash at the Interest Rate to the Lender, quarterly
in arrears, on December 31, March 31, June 30,
and September 30 in each year (unless such day is not a Business
Day, in which event on the next succeeding Business Day), with
the first such payment becoming due and payable on
December 31, 2008;
provided
,
however
, that
the Company may, at its option, in lieu of a cash payment of
interest, increase the principal amount of the Loan by the
amount of such cash payment. Interest shall accrue in accordance
with the preceding sentence on any such increased principal
amount of such Loan. Interest shall be calculated on the basis
of a
365-day
year for the actual number of days elapsed. If the principal
amount hereof is not paid in full when due and payable, interest
at a rate of 12% per annum shall accrue on the balance of any
unpaid principal (and, to the extent permitted by law, any
overdue payment of interest);
provided
,
however
,
that in no event shall the rate of interest hereunder exceed the
applicable limits imposed by any applicable federal or state law.
(c) Limitations on Interest
Rates.
Notwithstanding any provision in this Note to
the contrary, the total liability for payments in the nature of
interest shall not exceed the applicable limits imposed by any
applicable federal or state interest rate laws. If any payments
in the nature of interest, additional interest and other charges
made hereunder are held to be in excess of the applicable limits
imposed by any applicable federal or state law, the amount held
to be in excess shall be considered payment of principal under
this Note and the indebtedness evidenced hereby shall be reduced
by such amount so that the total liability for payments in the
nature of interest, additional interest and other charges shall
not exceed the applicable limits imposed by any applicable
federal or state interest rate laws.
2. Place of Payments; No Setoff.
All amounts
payable hereunder shall be made for the account of the Lender at
such place as the Lender may designate to the Company in writing
from time to time. Each payment hereunder, whether for
principal, interest or otherwise, shall be made without setoff,
counterclaim, defense, condition or reservation of right.
3. Prepayments.
This Note may be prepaid in
whole or in part at any time and from time to time without
premium or penalty. Any such prepayment shall be applied first
to the payment of expenses due under this Note, second to
interest accrued on this Note and third, if the amount of
prepayment exceeds the amount of all such expenses and accrued
interest, to the payment of principal of this Note. A prepayment
of less than all of the unpaid principal amount of this Note
shall not relieve the Company of its obligation to make the
scheduled payment of the balance of the principal amount and any
accrued and unpaid interest on this Note on the Maturity Date.
The Company shall notify the Lender in writing of its intention
to prepay this Note at least five Business Days prior to any
such prepayment. Once given, any such notice shall be
irrevocable and the Company shall be bound to make the
prepayment specified in such notice.
A-52
4. Representations and Warranties.
The Company
hereby warrants and represents to the Lender as follows:
(a) Existence and Power.
The Company is a
corporation validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite power
and authority necessary to enable it to own, operate and lease
its properties and to carry on its business as now conducted and
to execute, deliver and perform the terms of this Note.
(b) Note Authorized; Binding Obligations.
The
execution, delivery and performance of this Note have been duly
and validly authorized and approved by all necessary corporate
action on the part of the Company and this Note constitutes a
legally valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to the
Bankruptcy and Equity Exception.
(c) No Conflict; Legal Compliance.
The
execution, delivery and payment of this Note will not:
(i) result in a violation or breach of or conflict with the
Company Charter Documents; (ii) result in a violation or
breach of or conflict with any provisions of, or result in the
loss of any benefit under or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination, cancellation of,
or give rise to a right of purchase under, or accelerate the
performance required by, or result in a right of termination or
acceleration under, or result in the creation of any Lien upon
any of the properties or assets owned or operated by the Company
under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, contract,
lease, agreement or other instrument or obligation of any kind
to which the Company is a party or by which the Company or any
of its properties or assets may be bound; or (iii) violate
any Judgment or any Law applicable to the Company or its
properties or assets.
(a)
Each of the following events shall be an
Event of Default
hereunder:
(i) The Company fails to pay timely: (A) the principal
amount due under this Note when the same becomes due and
payable, whether upon final maturity, upon the date set by the
Company in a written notice to the Lender for the prepayment in
whole or in part of the outstanding principal of this Note, or
otherwise; or (B) any accrued interest or other amounts due
under this Note on the date the same becomes due and payable or
within five calendar days thereafter; or
(ii) The Company (A) files any petition or action for
relief under any bankruptcy, reorganization, insolvency or
moratorium law, or any other law for the relief of, or relating
to, debtors, now or hereafter in effect; (B) applies for or
consents to the appointment of a custodian, receiver, trustee,
sequestrator, conservator or similar official for the Company or
for a substantial part of the Companys assets;
(C) makes a general assignment for the benefit of
creditors; (D) becomes unable to, or admits in writing its
inability to, pay its debts generally as they come due; or
(E) takes any corporate action in furtherance of any of the
foregoing; or
(iii) An involuntary petition is filed against the Company
(unless such petition is dismissed or discharged within
30 days), under any bankruptcy statute now or hereafter in
effect, or a custodian, receiver, trustee, sequestrator,
conservator, assignee for the benefit of creditors (or other
similar official) is appointed to take possession, custody or
control of any property of the Company; or
(iv) Any Change in Control occurs, which means
the occurrence of any of the following: (A) the
acquisition, by any group of Persons (within the meaning of the
Securities Exchange Act of 1934, as amended) or by any Person,
in either case who is or are not holder(s) of shares of the
Companys capital stock, as of the date hereof, of
beneficial ownership (within the meaning of
Rule 13d-3
of the Securities and Exchange Commission) of 50% or more of the
issued and outstanding capital stock of the Company having the
right, under ordinary circumstances, to vote for the election of
directors of the Company; (B) more than one-half of the
persons who were directors of the Company on the first day of
any period consisting of 12 consecutive calendar months (the
first of which 12 month periods shall commence with the
first day of the month immediately following the month during
which this Agreement was executed), cease, for any reason other
than death or disability, to be directors of the Company and
successors for such directors have not been approved by a
majority of the directors still in office who were directors at
the beginning of such period or whose election or nomination was
so approved; or (C) any merger or consolidation of or with
the Company or the sale of all or substantially all of the
property or assets of the Company, other the merger of the
Company with another entity in which the Company is the
surviving entity; or
(v) Any representation, warranty or other statement made by
the Company in this Note shall prove to have been false or
misleading in any material respect when made; or
A-53
(vi) The Company uses the proceeds of the Loans for any
purpose other than its working capital needs in the ordinary
course of its business and the payment of expenses incurred by
the Company in connection with the Transactions (excluding
payment of the Termination Fee); or
(vii) After the date hereof, the Company grants any Person
other than the Lender a Lien on all or any substantial part of
its assets.
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder
shall, at the option of the Lender so long as such Event of
Default is continuing in the case of Section 5(a)(i), (iv),
(v), (vi) or (vii), or automatically, in the case of
Section 5(a)(ii) or (iii), be immediately due and payable
by the Company;
provided
,
however
, that if the
Company fails to provide written notice to the Lender within
24 hours of the Company becoming aware of the occurrence of
an Event of Default under Section 5(a)(i), (iv), (v),
(vi) or (vii), then all unpaid principal, accrued interest
and other amounts owing hereunder shall be immediately due and
payable by the Company. In addition to the remedies herein, upon
the occurrence or existence of any Event of Default, the Lender
may exercise any other right, power or remedy granted to it by
the Merger Agreement or otherwise permitted to it by law, either
by suit in equity or by action at law, or both.
(b)
If the Company has not paid any amount owed to
the Lender in cash within 14 days following the date such
payment is due pursuant to Section 1(a) or
Section 5(a), as the case may be, then the Company shall
immediately provide to the Lender, in lieu of cash, the number
of newly issued shares (rounded to the nearest whole share) of
Company Common Stock equal to (i) the amount of all unpaid
principal, accrued interest and other amounts owing hereunder
divided by (ii) the average daily volume weighted average
price for the Company Common Stock on the Nasdaq, as reported by
Bloomberg, L.P. for each of the 10 consecutive trading days
ending with the trading day immediately preceding the last
trading day in such
14-day
period (the
VWAP
). The Company shall
promptly, and in any event within two Business Days following
conclusion of the
14-day
period following the date such payment is due pursuant to
Section 1(a) or Section 5(a), prepare and file with
the SEC, and have declared effective by the SEC as soon as
practicable following such filing, a resale shelf registration
statement on
Form S-3
covering the shares of Company Common Stock issued to the Lender
pursuant to this Section 5(b) pursuant to a registration
rights agreement (in customary form) to be agreed upon and
entered into by the Company and the Lender in connection with
such issuance. The Company shall use its reasonable best efforts
to keep such shelf registration statement continuously
effective, in compliance with the Securities Act and usable for
resale of such shares until the earlier of (y) the day on
which the Lender no longer holds any shares issued pursuant to
this Section 5(b) and (z) the first anniversary of the
issuance of such shares. Notwithstanding the foregoing, in no
event shall the number of shares issued to the Lender pursuant
to this Section 5(b) exceed the number of shares equal to
19.9% of the Companys Common Stock issued and outstanding
as of the date of this Note;
provided
,
however
,
that if under any circumstance the VWAP multiplied by the number
of shares of Company Common Stock issued pursuant to this
Section 5(b) is less than the amount of all unpaid
principal, accrued interest and other amounts owing hereunder,
then the Company shall pay to the Lender such difference in cash
on the day of the issuance of the shares to the Lender.
6. Waiver; Representations and Expenses.
The
Company waives presentment, notice of dishonor, protest and
notice of protest of this Note and all other notices or demands
in connection with the delivery, acceptance, performance,
default or endorsement of this Note, and shall pay all
reasonable out-of-pocket costs and expenses of collection when
incurred by the Lender, including, without limitation,
reasonable attorneys fees and expenses. No extension nor
indulgence granted from time to time shall be construed as a
novation of this Note or as a reinstatement of the indebtedness
evidenced hereby or as a waiver of the rights of the Lender
herein.
7. Notices.
Any notice or demand to be given to
Lender or the Company pursuant to this Note shall be in writing
(including by facsimile transmission; provided that any notice
or demand transmitted by facsimile shall be immediately
confirmed by a telephone call to the recipient at the number
specified on the signature pages hereof) and mailed, faxed or
delivered to the address or facsimile number specified for
notices on the signature pages hereof (or to such other address
as shall otherwise be designated by like notice by the Lender,
to the Company or by the Company to the Lender, as the case may
be). Except as otherwise provided in this Note, all such
notices, requests and communications shall, when transmitted by
overnight delivery, or faxed, be effective when delivered for
overnight (next day) delivery, or transmitted by facsimile
machine, respectively, or if delivered, upon delivery.
8. Successors and Assigns.
The provisions of
this Note shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns,
except that the Company may not assign or transfer any of its
rights or obligations under this Note without the prior written
consent of the Lender.
9. Headings.
Section and subsection headings in
this Note are included herein for convenience of reference only
and shall not constitute a part of this Note for any other
purpose or given any substantive effect.
A-54
10. Severability.
Whenever possible, each
provision of this Note shall be interpreted in such a manner as
to be valid, legal and enforceable under the applicable law of
any jurisdiction. Without limiting the generality of the
foregoing sentence, in case any provision of this Note shall be
invalid, illegal or unenforceable under the applicable law of
any jurisdiction, the validity, legality and enforceability of
the remaining provisions, or of such provision in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
11. Amendments and Waivers.
No amendment,
modification, forbearance or waiver of any provision of this
Note, and no consent with respect to any departure by the
Company therefrom, shall be effective unless the same shall be
in writing and signed by the Lender and the Company.
12. Governing Law.
This Note shall be governed
by, and construed in accordance with, the laws of the State of
Delaware regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof.
13. Entire Agreement.
This Note and
Section 6.13 of the Merger Agreement constitute the entire
understanding between the parties with respect to the subject
matter hereof and thereof, and all prior promissory notes and
all prior or contemporaneous written and oral agreements,
understandings, representations and statements with respect
thereto are merged into, and replaced and superseded by this
Note.
14. Waiver of Jury Trial.
To the extent
permitted by applicable law, the Company, by execution hereof,
and the Lender, by acceptance hereof, knowingly, voluntarily and
intentionally waive any right they may have to a trial by jury
in respect of any litigation based on this Note, or arising out
of, under or in connection with this Note or any agreement
contemplated to be executed in connection with this Note, or any
litigation arising out of any course of conduct, course of
dealing, statements (whether verbal or written) or actions of
any party with respect hereto. This provision is a material
inducement to the Lender to accept this Note.
A-55
IN WITNESS WHEREOF
, the Company has caused this Note to
be duly executed and delivered as of the date first written
above.
IOMAI CORPORATION
a Delaware corporation
By:
Name:
Title:
Notice Address:
20 Firstfield Road
Gaithersburg, MD 20878
Attention: General Counsel
Facsimile:
(301) 556-4501
with a copy to:
Ropes & Gray LLP
One International Place
Boston, MA 02110
Attention: Paul M. Kinsella
Facsimile:
(617) 235-0822
A-56
AGREED TO
AND ACCEPTED:
INTERCELL AG
an Austrian stock corporation
By:
Name:
Title:
By:
Name:
Title:
Notice Address:
Campus Vienna Biocenter 6
1030 Vienna
Austria
Attention: General Counsel
Facsimile: +43 1 20620 165
with a copy to:
Covington & Burling LLP
1201 Pennsylvania Avenue, N.W.
Washington, DC 20004
Attention: Catherine J. Dargan
Facsimile:
(202) 778-5567
with a copy to:
Covington & Burling LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018
Attention: Stephen A. Infante
Facsimile:
(646) 441-9039
A-57
Annex B
Voting Agreement,
dated as of May 12, 2008 (this
Agreement
), among Intercell AG, a joint stock
corporation incorporated under the laws of the Republic of
Austria (
Parent
), and each of the
stockholders listed on Schedule I to this Agreement
(each, a
Stockholder
and, collectively,
the
Stockholders
)
.
Introduction
Parent, Zebra Merger Sub, Inc., a Delaware corporation and
wholly owned subsidiary of Parent (
Merger
Sub
), and Iomai Corporation, a Delaware corporation
(the
Company
), propose to enter into an
Agreement and Plan of Merger, dated as of the date hereof (as it
may be amended or supplemented from time to time, the
Merger Agreement
), pursuant to which, upon
the terms and subject to the conditions thereof, Merger Sub will
be merged with and into the Company, and the Company will be the
surviving entity (the
Merger
).
As of the date hereof, each Stockholder is the record and
beneficial owner of the number of shares (the
Shares
) of common stock, par value $.01 per
share, of the Company (the
Company Common
Stock
), set forth opposite such Stockholders
name on Schedule I attached hereto (such Shares, together
with any other shares of capital stock of the Company acquired
by such Stockholder after the date hereof and during the term of
this Agreement (including through the exercise of any stock
options, warrants or any other convertible or exchangeable
securities or similar instruments), being collectively referred
to herein as such Stockholders
Subject
Shares
).
As a condition to its willingness to enter into the Merger
Agreement, Parent has required that (i) each Stockholder
agree, and each Stockholder is willing to agree, to the matters
set forth herein and (ii) each Stockholder that is party to
the Exchange Agreement, dated as of the date hereof (the
Exchange Agreement
), among Parent and such
Stockholders, agree, and each such Stockholder is willing to
agree, to exchange such Stockholders Subject Shares for
shares of common stock of Parent pursuant to the terms and
subject to the conditions of the Exchange Agreement.
In consideration of the foregoing and the agreements set forth
below, the parties hereto agree as follows:
Section 1.
Defined Terms
. Capitalized terms used but
not defined herein have the meanings set forth in the Merger
Agreement.
Section 2. Voting of Shares.
(a)
Voting
. Until this Agreement is terminated in
accordance with its terms, each Stockholder hereby agrees
(severally with respect to itself and not jointly) to vote (or
cause to be voted) all of such Stockholders Subject
Shares, at every annual, special or other meeting of the
stockholders of the Company, and at any adjournment or
adjournments thereof, or pursuant to any consent in lieu of a
meeting or otherwise:
(i) in favor of the Merger and the adoption of the Merger
Agreement and the approval of the Transactions, and any actions
required in furtherance thereof;
(ii) against any action or agreement that would result in a
breach in any material respect of any covenant, representation
or warranty or any other obligation of the Company under the
Merger Agreement; and
(iii) against (A) any extraordinary corporate
transaction, such as a merger, rights offering, reorganization,
recapitalization or liquidation involving the Company or any of
its subsidiaries (other than the Merger), (B) a sale or
transfer of a material amount of assets or capital stock of the
Company or any of its subsidiaries or (C) any action that
is intended, or would reasonably be expected, to impede,
interfere with, prevent, delay, postpone or adversely affect the
Merger or the Transactions.
(b)
Grant of Irrevocable Proxy
. Such Stockholder
hereby irrevocably grants to, and appoints, Parent and any
individual who shall hereafter be designated by Parent, and each
of them, such Stockholders proxy and attorney-in-fact
(with full power of substitution), for and in the name, place
and stead of such Stockholder, to vote, or cause to be voted,
such Stockholders Subject Shares, or grant a consent or
approval in respect of such Stockholders Subject Shares,
at every annual, special or other meeting of
B-1
the stockholders of the Company, and at any adjournment or
adjournments thereof, or pursuant to any consent in lieu of a
meeting or otherwise, with respect to the matters and in the
manner specified in Section 2(a) hereof;
provided
,
however
, that the foregoing proxy shall terminate
immediately upon termination of this Agreement in accordance
with its terms. Each Stockholder understands and acknowledges
that Parent is entering into the Merger Agreement in reliance
upon the Stockholders execution and delivery of this
Agreement. Each Stockholder hereby affirms that the irrevocable
proxy set forth in this Section 2(b) is given in connection
with the execution of the Merger Agreement, and that such
irrevocable proxy is given to secure the performance of the
duties of such Stockholder under this Agreement. Subject to this
Section 2(b), this grant of proxy is coupled with an
interest and may under no circumstances be revoked. Each
Stockholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done in
accordance herewith. Such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of
Section 212 of the Delaware General Corporation Law.
Section 3.
Fiduciary Responsibilities
. No
Stockholder executing this Agreement who is or becomes during
the term hereof a director or officer of the Company makes (or
shall be deemed to have made) any agreement or understanding
herein in his or her capacity as such director or officer.
Without limiting the generality of the foregoing, each
Stockholder (or a designee of such Stockholder) signs solely in
his, her or its capacity as the record and beneficial owner of
such Stockholders Subject Shares and nothing herein shall
limit or affect any actions taken by such Stockholder (or a
designee of such Stockholder) in his or her capacity as an
officer or director of the Company in exercising his or her or
the Companys or the Companys Board of
Directors rights in connection with the Merger Agreement
or otherwise and such actions shall not be deemed to be a breach
of this Agreement.
Section 4.
Representations and Warranties of
Stockholder
. Each Stockholder, severally and not
jointly, represents and warrants to Parent as follows:
(a)
Binding Agreement
. Such Stockholder has the
capacity to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. Such Stockholder has duly
and validly executed and delivered this Agreement and this
Agreement constitutes a legal, valid and binding obligation of
such Stockholder, enforceable against such Stockholder in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting creditors rights generally
and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
(b)
No Conflict
. Neither the execution and
delivery of this Agreement by such Stockholder, nor the
performance by such Stockholder of its obligations hereunder
will (i) require any consent, approval, authorization or
permit of, registration, declaration or filing (except for such
filings as may be required under the federal securities laws,
the HSR Act or CFIUS or as would not prevent, delay or otherwise
impair such Stockholders ability to perform its
obligations hereunder) with, or notification to, any
governmental entity, (ii) if such Stockholder is an entity,
result in a violation of, or default under, or conflict with any
provision of its certificate of incorporation, bylaws,
partnership agreement, limited liability company agreement or
similar organizational documents, (iii) result in a
violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, or acceleration) under any
contract, trust, agreement, instrument, commitment, arrangement
or understanding applicable to such Stockholder or such
Stockholders Subject Shares, or result in the creation of
a security interest, lien, charge, encumbrance, equity or claim
with respect to any of such Stockholders Subject Shares,
except, in the case of clause (iii), as would not prevent, delay
or otherwise impair such Stockholders ability to perform
its obligations hereunder, (iv) require any consent,
authorization or approval of any Person other than a
governmental entity, except, in the case of clause (iv), as
would not prevent, delay or otherwise impair such
Stockholders ability to perform its obligations hereunder
or (v) violate or conflict with any order, writ,
injunction, decree, rule, regulation or law applicable to such
Stockholder or such Stockholders Subject Shares. If such
Stockholder is a married individual and such Stockholders
Subject Shares constitute community property or otherwise need
spousal approval in order for this Agreement to be a legal,
valid and binding obligation of such Stockholder, this Agreement
has been duly authorized, executed and delivered by, and
constitutes a legal, valid and binding obligation of, such
Stockholders spouse, enforceable against such spouse in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting creditors rights generally
and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at
law).
(c)
Ownership of Shares
. Such Stockholder is
the record and beneficial owner of the Shares set forth opposite
such Stockholders name on Schedule I attached hereto
free and clear of any security interests, liens, charges,
encumbrances, equities, claims, options or limitations of
whatever nature and free of any other limitation or restriction
(including any restriction on the right to vote, sell or
otherwise dispose of such Shares), except for any such
encumbrances arising hereunder. There are no outstanding
options, shares of Company Common Stock subject to vesting or
other rights to acquire from such Stockholder, or obligations of
such Stockholder to sell or to dispose of, any shares of Company
Common Stock. Except as provided in Section 2 hereof, such
Stockholder holds exclusive power to vote the Shares set forth
opposite such Stockholders name on Schedule I
B-2
attached hereto. As of the date of this Agreement, the Shares
set forth opposite such Stockholders name on such
Schedule I attached hereto represent all of the shares of
capital stock of the Company beneficially owned by such
Stockholder.
(d)
Broker Fees
. No broker, investment banker,
financial advisor or other person is entitled to any
brokers, finders, financial advisors or other
similar fee or commission based upon arrangements made by or on
behalf of such Stockholder in connection with its entering into
this Agreement.
Section 5.
Representations and Warranties of
Parent
. Parent represents and warrants to the
Stockholders as follows:
(a)
Binding Agreement
. Parent is a duly
organized and validly existing stock corporation under the laws
of the Republic of Austria and has full corporate power and
authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Parent and the consummation of
the transactions contemplated hereby have been duly and validly
authorized by the Management Board and Supervisory Board of
Parent, and no other corporate proceedings on the part of Parent
are necessary to authorize the execution, delivery and
performance of this Agreement by Parent and the consummation of
the transactions contemplated hereby (except as described in
Section 4.3 of the Merger Agreement). Parent has duly and
validly executed this Agreement and this Agreement constitutes a
legal, valid and binding obligation of Parent, enforceable
against Parent in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting
creditors rights generally and by general equitable
principles (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(b)
No Conflict
. Neither the execution and
delivery by Parent of this Agreement, nor the performance by
Parent of its obligations hereunder will (i) require any
consent, approval, authorization or permit of, registration,
declaration or filing (except for such filings as may be
required under the federal securities laws, the HSR Act or CFIUS
or as would not be expected to prevent, delay or otherwise
impair Parents ability to perform its obligations
hereunder) with, or notification to, any governmental entity,
(ii) result in a violation of, or default under, or
conflict with any provision of its organizational documents,
(iii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, or
acceleration) under any contract, trust, agreement, instrument,
commitment, arrangement or understanding applicable to Parent,
except, in the case of clause (iii), as would not prevent, delay
or otherwise impair Parents ability to perform its
obligations hereunder, (iv) require any consent,
authorization or approval of any Person other than a
governmental entity, except, in the case of clause (iv), as
would not prevent, delay or otherwise impair such Parents
ability to perform its obligations hereunder or (v) violate
or conflict with any order, writ, injunction, decree, rule,
regulation or law applicable to Parent.
Section 6.
Transfer and Other
Restrictions
. Until this Agreement is terminated in
accordance with its terms:
(a)
Certain Prohibited Transfers
. Each
Stockholder agrees (severally with respect to itself and not
jointly) not to:
(i) sell, transfer, pledge, encumber, assign or otherwise
dispose of (collectively, the
Transfer
), or
enter into any contract, option or other arrangement or
understanding with respect to the Transfer of, such
Stockholders Subject Shares or any interest contained
therein (other than, if the Transactions are consummated, as
contemplated by the Exchange Agreement);
(ii) grant any proxies or powers of attorney or enter into
a voting agreement or other arrangement with respect to such
Stockholders Subject Shares, other than this Agreement;
(iii) enter into, or deposit such Stockholders
Subject Shares into, a voting trust or take any other action
which would, or could reasonably be expected to, result in a
diminution of the voting power represented by any of such
Stockholders Subject Shares; or
(iv) commit or agree to take any of the foregoing actions.
(b)
Efforts
. Each Stockholder agrees (severally
with respect to itself and not jointly) not to take any action
which would make any representation or warranty of such
Stockholder herein untrue or incorrect in any material respect
as of any time prior to the termination hereof or take any
action that would have the effect of preventing or disabling it
from performing its obligations under this Agreement. Subject to
Section 3 hereof, until this Agreement is terminated in
accordance with its terms, each Stockholder shall use such
Stockholders reasonable best efforts to take, or cause to
be taken, all actions reasonably necessary or desirable to vote
(or cause to be voted) all of such Stockholders Subject
Shares in accordance with Section 2(a) of this Agreement
(including executing and delivering additional documents as
Parent may request, at the cost and expense of Parent).
B-3
(c)
Additional Shares
. In the event (i) of
any stock dividend, stock split, recapitalization,
reclassification, combination or exchange of shares of capital
stock of the Company on, of or affecting any Stockholders
Subject Shares or (ii) any Stockholder becomes the
beneficial owner of any additional shares of Company Common
Stock or other securities entitling the holder thereof to vote
or give consent with respect to the matters set forth in
Section 2(a) hereof, then the terms of this Agreement shall
apply to the shares of capital stock or other securities of the
Company held by such Stockholder immediately following the
effectiveness of the events described in clause (i) or such
Stockholder becoming the beneficial owner thereof, as described
in clause (ii), as though they were such Stockholders
Subject Shares hereunder. Each Stockholder hereby agrees
(severally with respect to itself and not jointly), until this
Agreement is terminated in accordance with its terms, to notify
Parent of the number of any new shares of Company Common Stock
acquired by such Stockholder, if any, after the date hereof.
Section 7.
Appraisal Rights
. Each
Stockholder hereby agrees (severally with respect to itself and
not jointly) not to exercise any appraisal rights or any
dissenters rights that such Stockholder may have (whether
under applicable law or otherwise) or could potentially have or
acquire in connection with the Merger Agreement, the Merger and
the other Transactions.
Section 8.
No Solicitation
. Until this
Agreement is terminated in accordance with its terms, no
Stockholder shall, nor shall such Stockholder permit any
investment banker, attorney or other advisor or representative
of the Stockholder to, directly or indirectly through another
Person, solicit, initiate or encourage, or take any other action
to facilitate, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any
Takeover Proposal;
provided
,
however
, that any
action which is permitted by the Merger Agreement to be taken by
a Stockholder (or a designee of such Stockholder) in his or her
capacity as a director or officer or which is permitted by
Section 3 hereof shall not be prohibited by the foregoing.
Section 9.
Specific Enforcement;
Jurisdiction
. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with the terms
hereof or were otherwise breached and that the non-breaching
party shall be entitled to specific performance of the terms
hereof in addition to any other remedy which may be available at
law or in equity. It is accordingly agreed that the
non-breaching party will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any
state or federal court located in the State of Delaware or in
the Court of Chancery of the State of Delaware, the foregoing
being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the personal jurisdiction
of any state or federal court located in the State of Delaware
or in the Court of Chancery of the State of Delaware in the
event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such
court, and (c) agrees that it will not bring any action
relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a state
or federal court located in the State of Delaware or the Court
of Chancery of the State of Delaware.
Section 10.
Termination
. This Agreement
shall terminate and cease to have any force or effect on the
earliest of (a) September 30, 2008, (b) the
termination of the Merger Agreement in accordance with its
terms, (c) the written agreement of the parties hereto to
terminate this Agreement, (d) the consummation of the
Merger, and (e) in respect of any Stockholder, the
amendment, modification or waiver of the Merger Agreement to
alter the Merger Consideration in a manner adverse to such
Stockholder unless such amendment, modification or waiver has
been consented to by such Stockholder in writing prior to or
simultaneously with such amendment, modification or waiver;
provided
,
however
, that (i) Sections 9
through 20 shall survive any termination of this Agreement and
(ii) termination of this Agreement shall not relieve any
party from liability for any breach of its obligations hereunder
committed prior to such termination.
Section 11.
Notices
. All notices and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if delivered personally, mailed by
certified mail (return receipt requested) or sent by overnight
carrier or by facsimile (upon confirmation of receipt) to the
parties at the following addresses or at such other as shall be
specified by the parties by like notice: (a) if to Parent,
to the appropriate address set forth in Section 9.1 of the
Merger Agreement; and (b) if to a Stockholder, to the
appropriate address set forth on Schedule I hereto.
Section 12.
Certain Events
. Each
Stockholder agrees (severally with respect to itself and not
jointly) that this Agreement and the obligations hereunder shall
attach to such Stockholders Subject Shares and shall be
binding upon any person or entity to which legal or beneficial
ownership of such Stockholders Subject Shares shall pass,
whether by operation of law or otherwise, including such
Stockholders heirs, guardians, administrators or
successors.
Section 13.
Entire Agreement
. This
Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement and supersedes all
other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the
subject matter hereof.
B-4
Section 14.
Amendment
. This Agreement may
not be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement executed by
each of the parties hereto.
Section 15.
Successors and Assigns
. This
Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of the other parties hereto,
except as expressly provided by Section 6(a). This
Agreement will be binding upon, inure to the benefit of and be
enforceable by each party and such partys heirs,
beneficiaries, executors, successors, representatives and
permitted assigns.
Section 16.
Counterparts
. This Agreement
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, and delivered by means
of facsimile transmission or otherwise, each of which when so
executed and delivered shall be deemed to be an original and all
of which when taken together shall constitute one and the same
agreement.
Section 17.
GOVERNING LAW
. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF DELAWARE REGARDLESS OF THE LAWS THAT MIGHT
OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.
Section 18.
Severability
. If any provision
of this Agreement shall be held to be illegal, invalid or
unenforceable under any applicable law, then such contravention
or invalidity shall not invalidate the entire Agreement. Such
provision shall be deemed to be modified to the extent necessary
to render it legal, valid and enforceable, and if no such
modification shall render it legal, valid and enforceable, then
this Agreement shall be construed as if not containing the
provision held to be invalid, and the rights and obligations of
the parties shall be construed and enforced accordingly.
Section 19.
Several
Obligations
. Notwithstanding anything to the contrary
in this Agreement, the obligations of the Stockholders under
this Agreement are several and not joint. In no event shall any
Stockholder have any liability or obligation with respect to the
acts or omissions of any other Stockholder.
Section 20.
Headings
. The headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of
this Agreement.
[
The
remainder of this page is intentionally blank.
]
B-5
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed, individually or by its respective
officer thereunto duly authorized, as of the date first written
above.
Intercell AG
Name: Gerd Zettlmeissl
|
|
|
|
Title:
|
Chief Executive Officer
|
Name: Werner Lanthaler
|
|
|
|
Title:
|
Chief Financial Officer
|
Stockholders
:
New Enterprise Associates 10, Limited Partnership
|
|
|
|
By:
|
/s/ Eugene
A. Trainor III
|
A general partner of NEA Partners 10, L.P., the general partner
of New Enterprise Associates 10, Limited Partnership
NEA Ventures 2002, Limited Partnership
Vice President
Essex Woodlands Health Ventures V, L.P.
By: Essex Woodlands Health Ventures V, L.L.C.
Its Duly Authorized Representative
Technology Partners Fund VI, LP
By: TP Management VI, LLC
Sheila Mutter
General Partner
B-6
Technology Partners Affiliates VII, LP
By: TP Management VII, LLC
Sheila Mutter
General Partner
Technology Partners Fund VII, LP
By: TP Management VII, LLC
Sheila Mutter
General Partner
ProQuest Investments II, L.P.
ProQuest Investments II Advisors Fund, L.P.
|
|
|
|
By:
|
/s/ Pasquale
DeAngelis
|
Pasquale DeAngelis, Managing Member of the
General Partner
Gruber and McBaine Capital Management
|
|
|
|
By:
|
/s/ J.
Patterson McBaine
|
On behalf of the accounts listed below:
Lagunitas Partners LP
Donagby Sales Inc.
Gruber & McBaine International
Lockheed Martin Master Retirement Trust
Karl Matthies Trust udt 7/25/05
Name: Stanley C. Erck
Name: Gregory M. Glenn
|
|
|
|
By:
|
/s/ Russell
P. Wilson
|
Name: Russell P. Wilson
B-7
SCHEDULE I
TO
VOTING AGREEMENT
B-8
SCHEDULE I
Stockholders
Participating in Voting Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Warrants
|
|
Total
|
|
New Enterprise Associates 10, Limited Partnership
|
|
|
6,417,187
|
|
|
|
550,535
|
|
|
|
6,967,722
|
|
1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel:
(410) 244-0115
Fax:
(410) 752-7721
|
|
|
|
|
|
|
|
|
|
|
|
|
NEA Ventures 2002, Limited Partnership
|
|
|
4,610
|
|
|
|
0
|
|
|
|
4,610
|
|
1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel:
(410) 244-0155
Fax:
(410) 752-7721
|
|
|
|
|
|
|
|
|
|
|
|
|
Essex Woodlands Health Ventures V, L.L.C.
|
|
|
2,802,686
|
|
|
|
0
|
|
|
|
2,802,686
|
|
435 Tasso Street
Palo Alto, CA 94301
Attn: Jeff Himawan
Tel:
(650) 543-1555
Fax:
(650) 543-1504
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Partners Fund VI, L.P.
|
|
|
173,924
|
|
|
|
0
|
|
|
|
173,924
|
|
100 Shoreline Highway
Suite 282, Building B
Mill Valley, CA 94941
Attn: Sheila Mutter
Tel:
(415) 332-9999
Fax:
(415) 332-9998
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Partners Affiliates VII, L.P.
|
|
|
51,806
|
|
|
|
0
|
|
|
|
51,806
|
|
100 Shoreline Highway
Suite 282, Building B
Mill Valley, CA 94941
Attn: Sheila Mutter
Tel:
(415) 332-9999
Fax:
(415) 332-9998
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology Partners Fund VII, L.P.
|
|
|
884,132
|
|
|
|
0
|
|
|
|
884,132
|
|
100 Shoreline Highway
Suite 282, Building B
Mill Valley, CA 94941
Attn: Sheila Mutter
Tel:
(415) 332-9999
Fax:
(415) 332-9998
|
|
|
|
|
|
|
|
|
|
|
|
|
ProQuest Investments II, L.P.
|
|
|
989,649
|
|
|
|
0
|
|
|
|
989,649
|
|
90 Nassau Street, 5th Floor
Princeton, NJ 08542
Attn: Pasquale DeAngelis
Tel:
(609) 919-3567
Fax:
(609) 375-1047
|
|
|
|
|
|
|
|
|
|
|
|
|
ProQuest Investments II Advisors Fund, L.P.
|
|
|
23,815
|
|
|
|
0
|
|
|
|
23,815
|
|
90 Nassau Street, 5th Floor
Princeton, NJ 08542
Attn: Pasquale DeAngelis
Tel:
(609) 919-3567
Fax:
(609) 375-1047
|
|
|
|
|
|
|
|
|
|
|
|
|
B-9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Warrants
|
|
Total
|
|
Gruber and McBaine Capital Management signing on behalf of the
following accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
50 Osgood Place, Penthouse
San Francisco, CA 94133
Attn: Christine Arroyo
Tel:
(415) 981-0655
Fax:
(415) 981-6434
|
|
|
|
|
|
|
|
|
|
|
|
|
Lagunitas Partners LP
|
|
|
783,081
|
|
|
|
70,000
|
|
|
|
853,081
|
|
Donaghy Sales Inc.
|
|
|
65,700
|
|
|
|
0
|
|
|
|
65,700
|
|
Gruber & McBaine International
|
|
|
120,000
|
|
|
|
24,500
|
|
|
|
144,500
|
|
Karl Matthies Trust udt 7/25/05
|
|
|
12,000
|
|
|
|
0
|
|
|
|
12,000
|
|
Lockheed Martin Master Retirement Trust
|
|
|
545,000
|
|
|
|
0
|
|
|
|
545,000
|
|
Stanley C. Erck
|
|
|
25,000
|
|
|
|
0
|
|
|
|
25,000
|
|
c/o Iomai
Corporation
20 Firstfield Road
Gaithersburg, MD 20878
Tel:
(301) 556-4500
Fax:
(301) 556-4501
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory M. Glenn
|
|
|
71,885
|
|
|
|
0
|
|
|
|
71,885
|
|
c/o Iomai
Corporation
20 Firstfield Road
Gaithersburg, MD 20878
Tel:
(301) 556-4500
Fax:
(301) 556-4501
|
|
|
|
|
|
|
|
|
|
|
|
|
Russell P. Wilson
|
|
|
11,000
|
|
|
|
0
|
|
|
|
11,000
|
|
c/o Iomai
Corporation
20 Firstfield Road
Gaithersburg, MD 20878
Tel:
(301) 556-4500
Fax:
(301) 556-4501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
12,981,475
|
|
|
|
645,035
|
|
|
|
13,626,510
|
|
B-10
Annex C
Share
Exchange Agreement
dated as of May 12,
2008
among
Intercell AG
and
The Stockholders Listed
on Schedule I Hereto
Table
of Contents
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Page
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ARTICLE 1 DEFINED TERMS
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C-1
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SECTION 1.1. Defined Terms
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C-1
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ARTICLE 2 SHARE EXCHANGE
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C-1
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SECTION 2.1. Share Exchange
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C-1
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SECTION 2.2. Share Exchange Closing
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C-2
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
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C-2
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SECTION 3.1. Binding Agreement
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C-2
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SECTION 3.2. No Conflict
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C-2
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SECTION 3.3. Ownership of Shares
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C-3
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SECTION 3.4. Broker Fees
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C-3
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SECTION 3.5. Purchase for Own Account
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C-3
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SECTION 3.6. Ability to Protect his, her or its Own
Interests and Bear Economic Risk
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C-3
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SECTION 3.7. Receipt of Information
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C-3
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SECTION 3.8. Private Placement
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C-3
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SECTION 3.9. Legend
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C-3
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT
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C-4
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SECTION 4.1. Organization
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C-4
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SECTION 4.2. Capitalization
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C-4
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SECTION 4.3. Regulatory Reports
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C-4
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SECTION 4.4. Governmental Authority
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C-4
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SECTION 4.5. Authorization; No Conflict
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C-4
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SECTION 4.6. Broker Fees
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C-5
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SECTION 4.7. Valid Issuance
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C-5
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SECTION 4.8. Purchase for Own Account
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C-5
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SECTION 4.9. Ability to Protect its Own Interests and Bear
Economic Risk
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C-5
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SECTION 4.10. Private Placement
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C-5
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SECTION 4.11. Legend
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C-5
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SECTION 4.12. Disclosure
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C-5
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SECTION 4.13. Foreign Corrupt Practices Act; Etc
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C-6
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ARTICLE 5 ADDITIONAL AGREEMENTS
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C-6
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SECTION 5.1. Transfer and Other Restrictions
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C-6
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SECTION 5.2. No Solicitation
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C-6
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SECTION 5.3. Further Assurances
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C-6
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SECTION 5.4. Commercial Register
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C-6
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SECTION 5.5. Exchange Shares
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C-7
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SECTION 5.6. Alternate Consideration
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C-7
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SECTION 5.7. Payment of Taxes
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C-7
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SECTION 5.8. Public Statements
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C-7
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SECTION 5.9. Covenants with Stockholders; Merger
Consideration
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C-7
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SECTION 5.10. Fiduciary Duties
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C-7
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C-i
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Page
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ARTICLE 6 CONDITIONS
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C-8
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SECTION 6.1. Conditions to Each Partys Obligation to
Effect the Share Exchange
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C-8
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SECTION 6.2. Conditions to Obligations of Parent
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C-8
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SECTION 6.3. Conditions to Obligation of the Stockholders
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C-8
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ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER
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C-8
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SECTION 7.1. Termination
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C-8
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SECTION 7.2. Amendment
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C-9
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SECTION 7.3. Waiver
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C-9
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ARTICLE 8 GENERAL PROVISIONS
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C-9
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SECTION 8.1. Notices
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C-9
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SECTION 8.2. Representations, Warranties and Covenants
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C-9
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SECTION 8.3. Fees and Expenses
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C-10
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SECTION 8.4. Governing Law
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C-10
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SECTION 8.5. Specific Enforcement; Jurisdiction
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C-10
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SECTION 8.6. Successors and Assigns
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C-10
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SECTION 8.7. Company Consent Right
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C-10
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SECTION 8.8. Several Obligations
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C-10
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SECTION 8.9. Counterparts
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C-10
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SECTION 8.10. Severability
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C-10
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SECTION 8.11. Entire Agreement; Conflicts
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C-10
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SECTION 8.12. Headings
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C-10
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C-ii
Share Exchange
Agreement
, dated as of May 12, 2008 (this
Agreement
), among
Intercell AG
, a
joint stock corporation incorporated under the laws of the
Republic of Austria (
Parent
), and each of the
stockholders listed on Schedule I to this Agreement
(each, a
Stockholder
and, collectively,
the
Stockholders
)
.
Introduction
Parent, Zebra Merger Sub, Inc., a Delaware corporation and
wholly owned subsidiary of Parent (
Merger
Sub
), and Iomai Corporation, a Delaware corporation
(the
Company
), propose to enter into an
Agreement and Plan of Merger, dated as of the date hereof (as it
may be amended or supplemented from time to time, the
Merger Agreement
), pursuant to which, upon
the terms and subject to the conditions thereof, Merger Sub will
be merged with and into the Company, and the Company will be the
surviving entity (the
Merger
).
As of the date hereof, each Stockholder is the record and
beneficial owner of the number of shares (the
Shares
) of common stock, par value $.01 per
share, of the Company (the
Company Common
Stock
), set forth opposite such Stockholders
name on Schedule I to this Agreement (such Shares, together
with any other shares of capital stock of the Company acquired
by such Stockholder after the date hereof and during the term of
this Agreement (including through the exercise of any stock
options, warrants or any other convertible or exchangeable
securities or similar instruments), being collectively referred
to herein as such Stockholders
Subject
Shares
).
As a condition to its willingness to enter into the Merger
Agreement, Parent has required that (i) each Stockholder
agree, and each Stockholder is willing to agree, to exchange
such Stockholders Subject Shares for either
(A) shares of common stock with no par value
(
Stückaktien
) and each share representing a pro rata
amount of 1 of the aggregate nominal value of the
common stock of Parent (the
Parent Common
Stock
) immediately prior to the Effective Time of the
Merger or (B) cash immediately following the Effective Time
of the Merger, in each case pursuant to the terms and subject to
the conditions of this Agreement (the
Share
Exchange
), and (ii) each Stockholder that is
party to the Voting Agreement, dated as of the date hereof (the
Voting Agreement
), among Parent and such
Stockholders, agrees, and each such Stockholder is willing to
agree, to vote such Stockholders Subject Shares in favor
of the Merger Agreement, the Merger and the other Transactions.
In furtherance of the Share Exchange, Parent intends to increase
its share capital (the
Capital Increase
), by
issuing the Exchange Shares to the Stockholders under exclusion
of the statutory subscription rights of the shareholders of
Parent.
In consideration of the foregoing and of the representations,
warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE 1
DEFINED TERMS
SECTION 1.1.
Defined Terms
. Capitalized
terms used but not defined herein have the meanings set forth in
the Merger Agreement.
ARTICLE 2
SHARE EXCHANGE
SECTION 2.1.
Share Exchange
. Upon the
terms and subject to the conditions of this Agreement, each
Stockholder shall, pursuant to a
Contribution-in-Kind
Agreement, substantially in the form attached hereto as
Exhibit A (the
Contribution-in-Kind
Agreement
), exchange, assign, transfer and deliver all
of such Stockholders Subject Shares to Parent, or to any
direct or indirect Subsidiary of Parent designated by Parent, at
the Share Exchange Closing; and, in exchange therefor, except as
otherwise provided in Section 5.6, Parent shall issue,
exchange, sell and deliver to each Stockholder a number of
shares (rounded to the nearest whole share) of Parent Common
Stock (the
Exchange Shares
) equal to the
product of (a) the number of such Stockholders
Subject Shares and (b) the Exchange Ratio. As used in this
Agreement,
Exchange Ratio
means $6.60
U.S. Dollars divided by the Fair Market Value. As used in
this Agreement,
Fair Market Value
means the
closing sale price for the Parent Common Stock on the Vienna
Stock Exchange on the Share Exchange Closing Date, with such
amount being converted to U.S. Dollars using the conversion
rate from Euros to U.S. Dollars published in
The Wall
Street Journal
on the Share Exchange Closing Date.
C-1
SECTION 2.2.
Share Exchange Closing
.
(a) The closing of the Share Exchange (the
Share
Exchange Closing
) shall take place at 10:00 a.m.
(East Coast time) on a date to be specified by the parties,
which shall be no later than the second business day after
satisfaction or (to the extent permitted by applicable Law)
waiver of the conditions set forth in Article 6 (other than
any such conditions which by their nature cannot be satisfied
until the Share Exchange Closing Date, which shall be required
to be so satisfied or (to the extent permitted by applicable
Law) waived on the Share Exchange Closing Date), at the offices
of Covington & Burling LLP, 1201 Pennsylvania Avenue,
N.W., Washington, DC 20004, unless another time, date or place
is agreed to in writing by the parties hereto (such date upon
which the Share Exchange Closing occurs, the
Share
Exchange Closing Date
).
(b) At the Share Exchange Closing, each Stockholder shall
deliver to Parent certificates representing such
Stockholders Subject Shares, together with stock powers,
substantially in the form attached hereto as Exhibit B,
endorsed in blank and signed by each such Stockholder, and
promptly shall take all other actions reasonably necessary to
facilitate the recordation of Parent as the owner of such
Subject Shares in the books and records of the Company. Pursuant
to Section 5.5, and except as otherwise provided in
Section 5.6, as soon as reasonably practicable following
the registration of the Capital Increase in the Commercial
Register, Parent shall deliver to the Stockholders their
respective number of Exchange Shares by way of book entry
(electronic transfer).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder, severally and not jointly, represents and
warrants to Parent as follows:
SECTION 3.1.
Binding Agreement
.
(a) If such Stockholder is incorporated as a corporation,
then such Stockholder has the requisite corporate power and
authority and full legal capacity to enter into, execute and
deliver this Agreement, to perform fully its obligations
hereunder and to consummate the transactions contemplated
hereby. If such Stockholder is organized as a partnership, then
such Stockholder has the requisite partnership power and
authority and full legal capacity to enter into, execute and
deliver this Agreement, to perform fully its obligations
hereunder and to consummate the transactions contemplated
hereby. If such Stockholder is organized as a limited liability
company, then such Stockholder has the requisite limited
liability company power and authority and full legal capacity to
enter into, execute and deliver this Agreement, to perform fully
its obligations hereunder and to consummate the transactions
contemplated hereby. If such Stockholder is an individual, then
such Stockholder has the power and authority and full legal
capacity to, and is competent to, enter into, execute and
deliver this Agreement, to perform fully his or her obligations
hereunder and to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Agreement by such
Stockholder, the performance by such Stockholder of its
obligations hereunder and the consummation by such Stockholder
of the transactions contemplated hereby have been duly and
validly authorized and approved by such Stockholder. No other
proceedings on the part of such Stockholder are necessary to
authorize the execution and delivery of this Agreement and the
performance by such Stockholder of its obligations hereunder.
This Agreement has been duly and validly executed and delivered
by such Stockholder and, assuming the due authorization,
execution and delivery hereof by Parent, constitutes a legal,
valid and binding obligation of such Stockholder, enforceable
against such Stockholder in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting
creditors rights generally and by general equitable
principles (regardless of whether enforceability is considered
in a proceeding in equity or at law).
SECTION 3.2.
No Conflict
. Neither the execution and
delivery of this Agreement by such Stockholder, nor the
performance by such Stockholder of its obligations hereunder
will (a) require any consent, approval, authorization or
permit of, registration, declaration or filing (except for such
filings identified in Section 3.3(d) of the Merger
Agreement or as would not prevent, delay or otherwise impair
such Stockholders ability to perform its obligations
hereunder) with, or notification to, any Governmental Authority,
(b) if such Stockholder is an entity, result in a violation
of, or default under, or conflict with any provision of its
certificate of incorporation, bylaws, partnership agreement,
limited liability company agreement or similar organizational
documents, (c) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination,
cancellation, or acceleration) under any contract, trust,
agreement, instrument, commitment, arrangement or understanding
applicable to such Stockholder or such Stockholders
Subject Shares, or result in the creation of a security
interest, lien, charge, encumbrance, equity or claim with
respect to any of such Stockholders Subject Shares,
(d) require any consent, authorization or approval of any
Person other than a Governmental Authority, except, in the case
of clause (d), as would not prevent, delay or otherwise impair
such Stockholders ability to perform its obligations
hereunder, or (e) violate or
C-2
conflict with any order, writ, injunction, decree, rule,
regulation or Law applicable to such Stockholder or such
Stockholders Subject Shares. If such Stockholder is a
married individual and such Stockholders Subject Shares
constitute community property or otherwise need spousal approval
in order for this Agreement to be a legal, valid and binding
obligation of such Stockholder, this Agreement has been duly
authorized, executed and delivered by, and constitutes a legal,
valid and binding obligation of, such Stockholders spouse,
enforceable against such spouse in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws
affecting creditors rights generally and by general
equitable principles (regardless of whether enforceability is
considered in a proceeding in equity or at law).
SECTION 3.3.
Ownership of Shares
. Such
Stockholder is the record and beneficial owner of the Shares set
forth opposite such Stockholders name on Schedule I
attached hereto free and clear of any security interests, liens,
charges, encumbrances, equities, claims, options or limitations
of whatever nature and free of any other limitation or
restriction (including any restriction on the right to vote,
sell or otherwise dispose of such Shares), except for any such
encumbrances arising hereunder or under the Voting Agreement.
Such Shares represent all of the shares of capital stock of the
Company beneficially owned by such Stockholder. There are no
outstanding options, shares of Company Common Stock subject to
vesting or other rights to acquire from such Stockholder, or
obligations of such Stockholder to sell or to dispose of, any
shares of Company Common Stock.
SECTION 3.4.
Broker Fees
. No broker, investment
banker, financial advisor or other person is entitled to any
brokers, finders, financial advisors or other
similar fee or commission based upon arrangements made by or,
with the knowledge of such Stockholder, on behalf of such
Stockholder in connection with its entering into this Agreement.
SECTION 3.5.
Purchase for Own
Account
. Such Stockholder is acquiring the Exchange
Shares for its own account and not with a view to, or for offer
or sale in connection with, any distribution or sale thereof in
violation of the Securities Act of 1933, as amended, and the
rules and regulations of the Securities and Exchange Commission
(the
SEC
) promulgated thereunder (the
Securities Act
), and such Stockholder has no
present or contemplated agreement, understanding, arrangement,
obligation or commitment providing for the disposition of the
Exchange Shares, other than in compliance with the Securities
Act.
SECTION 3.6.
Ability to Protect his, her or its Own
Interests and Bear Economic Risk
. Such Stockholder, by
reason of his, her or its business and financial experience, has
the capacity to protect such Stockholders own interests in
connection with the transactions contemplated by this Agreement.
Such Stockholder is able to bear the economic risk of an
investment in the Exchange Shares and is able to sustain a loss
of all of such Stockholders investment in the Exchange
Shares without economic hardship if such a loss should occur.
SECTION 3.7.
Receipt of Information
. Such
Stockholder has received all the information he, she or it
considers necessary or appropriate for deciding whether to
acquire the Exchange Shares. Such Stockholder further represents
that he, she or it has had an opportunity to ask questions and
receive answers from Parent regarding the terms and conditions
of the Exchange Shares and the business and financial condition
of Parent and to obtain additional information necessary to
verify the accuracy of any information furnished to such
Stockholder or to which such Stockholder had access. The
foregoing, however, does not limit or modify the representations
and warranties of Parent in this Agreement or the right of such
Stockholder to rely upon such representations and warranties.
Such Stockholder has not received, nor is such Stockholder
relying on, any representations from Parent other than as
provided in this Agreement.
SECTION 3.8.
Private Placement
. Such
Stockholder understands that (a) the Exchange Shares have
not been registered under the Securities Act or any other
applicable U.S. federal or state securities laws by reason
of their issuance by Parent in a transaction exempt from the
registration requirements thereof (and that Parents
reliance on such exemption is predicated on such
Stockholders representations and warranties set forth in
this Article 3) and (b) the Exchange Shares may
not be sold unless such disposition is registered under the
Securities Act and applicable state securities laws or is exempt
from registration thereunder. Such Stockholder represents that
he, she or it is an accredited investor (as defined
in Rule 501(a) of Regulation D under the Securities
Act).
SECTION 3.9.
Legend
. Such Stockholder
hereby acknowledges and agrees that each certificate
representing an Exchange Share will bear a legend to the
following effect unless Parent determines otherwise in
compliance with applicable Law:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER U.S. JURISDICTION. THE SHARES
HAVE BEEN ACQUIRED FOR INVESTMENT AND NEITHER THIS SHARE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF, OTHER THAN ON THE VIENNA STOCK EXCHANGE, IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
C-3
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Stockholders as
follows:
SECTION 4.1.
Organization
. Parent is a duly
organized and validly existing stock corporation under the laws
of the Republic of Austria and has all requisite power and
authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to
own, operate and lease its properties and to carry on its
business as now conducted, except for such franchises, licenses,
permits, authorizations and approvals, the lack of which,
individually or in the aggregate, has not had and would not
reasonably be expected to have a Parent Material Adverse Effect.
SECTION 4.2.
Capitalization
. The
capitalization of Parent is as described in Parents most
recent periodic report filed with any applicable regulatory
authority as of the date of such report. Except with respect to
statutory rights under Austrian law that will be excluded by
resolution of the management board and the supervisory board of
Parent in accordance with the authorization granted by the
stockholders meeting dated 15 June 2007 in order to permit
the consummation of the transactions contemplated by this
Agreement, the issue and sale of the Exchange Shares will not
obligate the Company to issue any other equity securities to any
third party (other than the Stockholders) and will not result in
a right of any holder of Parents securities to adjust the
exercise, conversion, exchange or reset price under such
securities.
SECTION 4.3.
Regulatory Reports
. Parent
has filed all material reports required to be filed by it under
applicable Austrian law or with respect to any agency or self
regulatory authority or exchange rules to which Parent is
subject for the two years preceding the date hereof (or such
shorter period as Parent was required by law to file such
material) (the foregoing materials, including the exhibits and
amendments thereto, being collectively referred to herein as the
Regulatory Reports
) on a timely basis or has
received a valid extension of such time of filing and has filed
any such Regulatory Reports prior to the expiration of any such
extension. As of their respective dates, the Regulatory Reports
complied in all material respects with the requirements of all
applicable laws, rules and regulations and provided a true and
fair view of Parents assets and liabilities, financial
condition and results of operation and described the material
risks and material contingent liabilities to which Parent was
exposed. Parent has published all ad hoc information required to
be published by it under applicable Austrian law and such
information was correct in all material respects and not, in
light of the circumstances existing at the time, misleading when
published. The financial statements of Parent as of
December 31, 2007 included in the Regulatory Reports, if
any, comply in all material respects with applicable accounting
requirements and applicable laws, rules and regulations with
respect thereto as in effect as of December 31, 2007.
SECTION 4.4.
Governmental
Authority
. Except for regular audits by tax
authorities, to the knowledge of Parent, there has not been and
there is not pending or contemplated, any investigation by any
governmental agency, exchange or self-regulatory authority
involving Parent or, to the knowledge of Parent, any current or
former director or officer of Parent. No governmental agency,
exchange, court or self-regulatory authority has issued any stop
order or other order suspending the effectiveness of any
approval necessary for the Stockholders to enter into
transactions with respect to the Exchange Shares from and after
the date hereof.
SECTION 4.5.
Authorization; No Conflict
(a) Parent has the requisite corporate power and authority
to enter into and deliver this Agreement and all other
agreements and documents contemplated hereby to which it is a
party and to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement, the Merger
Agreement and the Voting Agreement by Parent and Merger Sub (to
the extent a party), the performance by Parent and Merger Sub of
their respective obligations hereunder and thereunder and the
consummation by Parent and Merger Sub of the Transactions have
been duly and validly authorized by the Management Board and
Supervisory Board of Parent and the Board of Directors of Merger
Sub. No other corporate proceedings on the part of Parent or
Merger Sub are necessary to authorize the execution and delivery
of this Agreement, the Merger Agreement and the Voting
Agreement, the performance by Parent and Merger Sub of their
respective obligations hereunder and thereunder and the
consummation by Parent and Merger Sub of the Transactions,
except for the approval of the Merger by Parent as the owner of
all the outstanding capital stock of Merger Sub. Each of this
Agreement, the Merger Agreement and the Voting Agreement has
been duly and validly executed and delivered by Parent and
Merger Sub (to the extent a party) and, assuming the due
authorization, execution and delivery by the Stockholders (to
the extent a party), the Company (to the extent a party) and the
other parties thereto, constitute legal, valid and binding
obligations of Parent and Merger Sub, enforceable against Parent
and Merger Sub in accordance with their respective terms, except
in each case as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws
affecting creditors rights generally and by general
equitable principles (regardless of whether enforceability is
considered in a proceeding in equity or at law).
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(b) Neither the execution and delivery of this Agreement,
the Merger Agreement and the Voting Agreement by Parent or
Merger Sub (to the extent a party), nor the consummation by
Parent or Merger Sub of the Transactions nor compliance by
Parent or Merger Sub with any of the provisions herein or
therein will (i) result in a violation or breach of or
conflict with the certificate of incorporation or by-laws of
Merger Sub or any of the organizational documents of Parent or
(ii) subject to obtaining or making the consents,
approvals, orders, authorizations, registrations, declarations
and filings referred to in paragraph (c) below, violate any
Judgment or Law applicable to Parent or Merger Sub or any of
their respective properties or assets other than any such event
described in this clause (ii) which, individually or in the
aggregate, has not had and would not reasonably be expected to
have a Parent Material Adverse Effect.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental
Authority is necessary to be obtained or made by Parent or
Merger Sub in connection with Parents or Merger Subs
(to the extent a party) execution, delivery and performance of
this Agreement, the Merger Agreement and the Voting Agreement,
or the consummation by Parent or Merger Sub of the Transactions,
except for those identified in Section 4.3(c) of the Merger
Agreement and the registration of the Capital Increase in the
Vienna Commercial Register (
Firmenbuch
) (the
Commercial Register
).
SECTION 4.6.
Broker Fees
. Except for
Merrill Lynch, Pierce, Fenner & Smith Incorporated, no
agent, broker, Person or firm acting on behalf of Parent or
Merger Sub or under Parents or Merger Subs authority
is or will be entitled to any advisory, commission or
brokers or finders fee or commission from any of the
parties hereto in connection with any of the Transactions.
SECTION 4.7.
Valid Issuance
. The Exchange
Shares have been duly authorized by all necessary corporate
action on behalf of Parent. When registered in the Commercial
Register and issued and sold against receipt of the
consideration therefor, the Exchange Shares will be duly
authorized and validly issued, fully paid and nonassessable, and
free of preemptive rights, other than statutory rights under
Austrian law that will be excluded by resolution of the
management board and the supervisory board of Parent in
accordance with the authorization granted by the stockholders
meeting dated 15 June 2007 in order to permit the
consummation of the transactions contemplated by this Agreement.
SECTION 4.8.
Purchase for Own
Account
. Parent is acquiring the Subject Shares for its
own account and not with a view to, or for offer or sale in
connection with, any distribution or sale thereof in violation
of the Securities Act, and Parent has no present or contemplated
agreement, understanding, arrangement, obligation or commitment
providing for the disposition of the Subject Shares.
SECTION 4.9.
Ability to Protect its Own Interests
and Bear Economic Risk
. Parent, by reason of its
business and financial experience, has the capacity to protect
its own interests in connection with the transactions
contemplated by this Agreement. Parent is able to bear the
economic risk of an investment in the Subject Shares and is able
to sustain a loss of all of its investment in the Subject Shares
without economic hardship if such a loss should occur.
SECTION 4.10.
Private Placement
. Parent
understands that (a) certain of the Subject Shares have not
been registered under the Securities Act or any other applicable
securities laws by reason of their issuance by the Company in a
transaction exempt from the registration requirements thereof
and (b) that such unregistered Subject Shares may not be
sold unless such disposition is registered under the Securities
Act and applicable state securities laws or is exempt from
registration thereunder.
SECTION 4.11.
Legend
. Parent hereby
acknowledges and agrees that each certificate representing an
unregistered Subject Share will bear a legend to the following
effect unless the Company determines otherwise in compliance
with applicable Law:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION. THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NEITHER THIS SHARE NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.
SECTION 4.12.
Disclosure
. Parent confirms
that neither it nor any officers, directors or Affiliates, has
provided any of the Stockholders or their agents or counsel with
any information that constitutes material, nonpublic information
(other than the existence and terms of the Share Exchange and
the issuance of Exchange Shares as contemplated by this
Agreement and the other Transactions). Parent understands and
confirms that each of the Stockholders will rely on the
foregoing representations in effecting transactions in
securities of Parent. To the knowledge of Parent, except for the
Transactions, no material event or circumstance has occurred or
information exists with respect to Parent or any of its
Subsidiaries or its or their business, properties, operations or
financial condition, which, under applicable law, rule or
regulation, required public disclosure or announcement by Parent
prior to
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the date hereof but which has not been so publicly announced or
disclosed. Parent acknowledges and agrees that no Stockholder
makes or has made any representations or warranties with respect
to the transactions contemplated hereby other than those set
forth in this Agreement and the Voting Agreement.
SECTION 4.13.
Foreign Corrupt Practices Act;
Etc
. Neither Parent, nor to the knowledge of Parent,
any Affiliate or agent or other person acting on behalf of
Parent or any Affiliate, has (a) directly or indirectly,
used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or
domestic political activity, (b) made any unlawful payment
to foreign or domestic government officials or employees or to
any foreign or domestic political parties or campaigns from
corporate funds, (c) failed to disclose fully any
contribution made by Parent (or made by any person acting on its
behalf of which Parent is aware) which is in violation of
applicable law, or (d) violated in any material respect any
provision of the U.S. Foreign Corrupt Practices Act of
1977, as amended.
ARTICLE 5
ADDITIONAL AGREEMENTS
SECTION 5.1.
Transfer and Other Restrictions
.
(a) Until this Agreement is terminated in accordance with
its terms, except pursuant to the Share Exchange contemplated
hereby or as otherwise permitted by Section 5.1(b), each
Stockholder agrees (severally with respect to itself and not
jointly) not to sell, transfer, pledge, encumber, assign or
otherwise dispose of (collectively,
Transfer
), or enter into any contract, option
or other arrangement or understanding with respect to the
Transfer of, such Stockholders Subject Shares or any
interest contained therein.
(b) At any time prior to the Share Exchange Closing Date,
the Stockholders may, by written notice to Parent, Transfer such
Stockholders Subject Shares to an Affiliate or other
Person solely for purpose of facilitating the Share Exchange and
the other transactions contemplated by this Agreement;
provided
,
however
, that any such Transfer shall
not impede or delay the consummation of the Share Exchange or
the other transactions contemplated by this Agreement or
otherwise impede any rights of Parent under this Agreement. Any
transferee pursuant to such a Transfer shall agree to be bound
by all of the provisions and obligations of this Agreement
applicable to the transferring Stockholder, including, without
limitation, the Share Exchange. No such Transfer shall limit or
affect such transferring Stockholders obligations
hereunder.
SECTION 5.2.
No Solicitation
. Until this
Agreement is terminated in accordance with its terms, no
Stockholder shall, nor shall such Stockholder permit any
investment banker, attorney or other advisor or representative
of the Stockholder to, directly or indirectly through another
Person, solicit, initiate or encourage, or take any other action
to facilitate, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any
Takeover Proposal;
provided
,
however
, that any
action which is permitted by the Merger Agreement to be taken by
a Stockholder (or a designee of such Stockholder) in his or her
capacity as a director or officer shall not be prohibited by the
foregoing.
SECTION 5.3.
Further Assurances
. Subject
to the terms and conditions provided herein, each party hereto
agrees to use its reasonable best efforts to take, or cause to
be taken, all action, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective
in the most expeditious manner practicable, the Share Exchange,
including (a) obtaining all permits, consents, approvals,
authorizations and actions or nonactions required for or in
connection with the consummation by the parties hereto of the
Share Exchange, (b) the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, a Governmental Authority, (c) the
obtaining of all necessary consents from third parties, and
(d) the execution and delivery of any additional
instruments necessary to consummate the Share Exchange to fully
carry out the purposes of this Agreement.
SECTION 5.4.
Commercial Register
. As soon
as practicable following the date of this Agreement, and in any
event, within two Business Days of this Agreement, Parent shall
apply to the Commercial Register for the appointment of an
independent auditor (
Sacheinlageprüfer
) (the
Independent Auditor
) to issue a report
addressing the adequacy of the in-kind contribution of the
Subject Shares to be provided to Parent in exchange for the
Exchange Shares pursuant to the
Contribution-in-Kind
Agreement. At the Share Exchange Closing, Parent and each
Stockholder shall execute a
Contribution-in-Kind
Agreement and a Subscription Certificate, substantially in the
form attached hereto as Exhibit C. Parent shall use its
reasonable best efforts to file an application for the
registration of the Capital Increase with the Commercial
Register prior to the opening of the Vienna Stock Exchange for
trading on the Business Day immediately following the Share
Exchange Closing Date, and in any event no later than the second
Business Day following the Share Exchange Closing Date. Parent
shall use its reasonable best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, and to assist
and cooperate with the Commercial Register in doing, all things
necessary, proper or advisable to (a) discuss and seek
pre-clearance with the Commercial Register of the filing of the
registration of the
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Capital Increase in an attempt to expedite the review and
approval process with respect thereto and (b) consummate
and make effective in the most expeditious manner practicable,
the registration of the Capital Increase in the Commercial
Register.
SECTION 5.5.
Exchange Shares
. The Exchange
Shares will be represented by one or more global certificates
(
Zwischensammelurkunde
), which will be issued by Parent
on the day of registration of the Capital Increase in the
Commercial Register. The Exchange Shares will be deposited with
Oesterreichische Kontrollbank Aktiengesellschaft
(
OEKB
) and an application for admission of
trading in the Prime Market Segment of the Vienna Stock Exchange
will be filed on the same day by Parent. Following the
registration in the Commercial Register and the admission of the
Exchange Shares for trading on the Vienna Stock Exchange, Parent
shall as soon as reasonably practicable, and in any event within
three Business Days, deliver the respective number of Exchange
Shares to each Stockholder by way of book entry (electronic
transfer) to the security account designated by such Stockholder
no later than the date the Exchange Shares are admitted for
trading on the Vienna Stock Exchange.
SECTION 5.6.
Alternate Consideration
.
(a) If (i) the report of the Independent Auditor fails
to conclude that the value of the Subject Shares is at least as
high as the value of the Exchange Shares, or (ii) the
Commercial Register shall not have accepted the registration of
the Capital Increase within 15 days following the Share
Exchange Closing Date, then the right of the Stockholders to
receive the Exchange Shares shall automatically terminate and
Parent shall instead be obligated, in full satisfaction of
Parents obligations under this Agreement, to deliver to
each Stockholder cash equal to the product of (x) the
number of such Stockholders Subject Shares and
(y) $6.60 U.S. Dollars (the
Alternate
Consideration
).
(b) Parent shall pay or cause to be paid the Alternate
Consideration to each Stockholder by wire transfer to an account
previously designated by such Stockholder within five business
days following the Effective Time of the Merger.
SECTION 5.7.
Payment of Taxes
. Parent
shall bear or pay, in respect of the Exchange Shares, any stamp
or other duties or similar taxes in connection with the issue,
transfer and delivery of the Exchange Shares to Stockholders in
accordance with this Agreement, and the execution, delivery and
performance of this Agreement.
SECTION 5.8.
Public Statements
. Each
Stockholder agrees (severally with respect to itself and not
jointly) that no public release or announcement concerning the
Transactions shall be issued by such Stockholder without the
prior written consent of Parent (which consent shall not be
unreasonably withheld or delayed), except as such release or
announcement may be (a) required by Law or the rules or
regulations of any applicable Governmental Authority to which
such Stockholder is subject or submits, wherever situated, or
(b) permitted by Section 6.8(d) of the Merger
Agreement to be made by such Stockholder (or a designee of such
Stockholder) in such persons capacity as a director or
officer of the Company, in which case the Stockholder required
to make the release or announcement shall use its reasonable
best efforts to allow Parent reasonable time to comment on such
release or announcement in advance of such issuance, it being
understood that the final form and content of any such release
or announcement, to the extent so required, shall be at the
final discretion of the disclosing Stockholder.
SECTION 5.9.
Covenants with Stockholders; Merger
Consideration
. Parent agrees that it will not
(a) enter into any material agreement, commitment or
understanding with any Stockholder with respect to any matter
related to this Agreement, the Voting Agreement, the
Contribution-in-Kind
Agreement or otherwise with respect to the Merger unless Parent
shall have provided each other Stockholder with all of the
rights and benefits provided pursuant to such agreement,
commitment or understanding, and (b) amend, modify or waive
any part of the Merger Agreement to alter the Merger
Consideration in any manner adverse to any Stockholder, without
the prior written consent (which consent shall not be
unreasonably withheld or delayed) of such Stockholder prior to
or simultaneously with such amendment, modification or waiver;
provided
,
however
, that for the avoidance of
doubt, the parties hereto acknowledge and agree that the
Stockholders shall have no consent right with respect to any
increase to the Merger Consideration.
SECTION 5.10.
Fiduciary
Duties
. Notwithstanding anything in this Agreement to
the contrary: (a) the Stockholder makes no agreement or
understanding herein in any capacity other than in the
Stockholders capacity as a record holder and beneficial
owner of its Subject Shares, and (b) nothing herein will be
construed to limit or affect any action or inaction by the
Stockholder (or a designee of such Stockholder) in such
persons capacity as an officer or director of the Company
in connection with this Agreement, the Merger Agreement or
otherwise, and such actions shall not be deemed to be a breach
of this Agreement.
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ARTICLE 6
CONDITIONS
SECTION 6.1.
Conditions to Each Partys
Obligation to Effect the Share Exchange
. The respective
obligations of each party to effect the Share Exchange are
subject to the satisfaction, by the party responsible for
fulfilling the obligation, or, to the extent permitted by
applicable Law, waiver, by the party entitled to the benefit
thereof, on or prior to the Share Exchange Closing Date of each
of the conditions set forth in Article 7 of the Merger
Agreement;
provided
,
however
, that for purposes of
this Section 6.1, (a) the phrase Closing
Date in Article 7 of the Merger Agreement shall be
replaced by the phrase Share Exchange Closing Date,
(b) the certificates required to be delivered pursuant to
Sections 7.2(c) and 7.3(c) of the Merger Agreement shall
not be required to be delivered on the Share Exchange Closing
Date, and (c) the condition in Section 7.1(e) of the
Merger Agreement relating to the transactions contemplated by
this Agreement shall be disregarded.
SECTION 6.2.
Conditions to Obligations of
Parent
. The obligations of Parent to effect the Share
Exchange are further subject to the satisfaction, or to the
extent permitted by applicable Law, the waiver on or prior to
the Share Exchange Closing Date of each of the following
conditions:
(a)
Representations and Warranties
. The
representations and warranties of each Stockholder shall be true
and correct (other than de minimus inaccuracies) as of the
date hereof and as of the Share Exchange Closing Date (except to
the extent expressly made as of an earlier date, in which case
as of such earlier date).
(b)
Performance of Obligations of the
Stockholders
. Each Stockholder shall have performed in
all material respects all of the obligations, and complied in
all material respects with the agreements and covenants,
required to be performed by or complied with by it under this
Agreement at or prior to the Share Exchange Closing Date.
(c)
Certificates
. Parent shall have received
certificates from each Stockholder certifying that the
conditions set forth in Sections 6.2(a) and (b) have
been satisfied.
SECTION 6.3.
Conditions to Obligation of the
Stockholders
. The obligation of each Stockholder to
effect the Share Exchange is further subject to the
satisfaction, or to the extent permitted by applicable Law, the
waiver on or prior to the Share Exchange Closing Date of each of
the following conditions:
(a)
Representations and
Warranties
. (i) The representations and warranties
of Parent contained in Sections 4.1, 4.2 and 4.5 through
4.11 shall be true and correct (other than de minimus
inaccuracies) as of the date hereof and as of the Share Exchange
Closing Date (except to the extent expressly made as of an
earlier date, in which case as of such earlier date) and
(ii) all other representations and warranties of Parent
contained in Article 4 shall be true and correct in all
material respects as of the date hereof and as of the Share
Exchange Closing Date (except to the extent expressly made as of
an earlier date, in which case as of such earlier date), except
that any such representation or warranty shall be true and
correct in all respects where such representation or warranty is
qualified with respect to materiality.
(b)
Performance of Obligations of
Parent
. Parent shall have performed in all material
respects all of the obligations, and complied in all material
respects with the agreements and covenants, required to be
performed by or complied with by it under this Agreement at or
prior to the Share Exchange Closing Date.
(c)
Certificates
. Each Stockholder shall have
received certificates executed on behalf of Parent by the chief
executive officer or chief financial officer of Parent,
certifying that the conditions set forth in Sections 6.3(a)
and (b) have been satisfied.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1.
Termination
. This Agreement
shall terminate and cease to have any force or effect on the
earliest of (a) September 30, 2008, (b) the
earlier of (i) the delivery of the Exchange Shares to each
Stockholder pursuant to Section 5.5 and (ii) the
payment of the Alternate Consideration to each Stockholder
pursuant to Section 5.6, (c) the termination of the
Merger Agreement in accordance with its terms and (d) the
written agreement of the parties hereto to terminate this
Agreement;
provided
,
however
, that (A) this
Article 7 and Article 8 shall survive any termination
of this Agreement and (B) termination of this Agreement
shall not relieve any party from liability for any breach of its
obligations hereunder committed prior to such termination.
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SECTION 7.2.
Amendment
. This Agreement may
not be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement executed by
each of the parties hereto;
provided
,
however
,
that with respect to the obligations of any individual
Stockholder under this Agreement, this Agreement may be amended
with the approval of such Stockholder and Parent subject to the
prior written consent of the other Stockholders, which consent
shall not be unreasonably withheld or delayed.
SECTION 7.3.
Waiver
. Any failure of any of
the parties to comply with any obligation, covenant, agreement
or condition herein may be waived at any time prior to the Share
Exchange Closing by any of the parties entitled to the benefit
thereof only by a written instrument signed by each such party
granting such waiver, but such waiver or failure to insist upon
strict compliance with such obligation, representation,
warranty, covenant, agreement or condition shall not operate as
a waiver of or estoppel with respect to, any subsequent or other
failure.
ARTICLE 8
GENERAL PROVISIONS
SECTION 8.1.
Notices
. All notices and
other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, mailed
by certified mail (return receipt requested) or sent by
overnight courier, or by facsimile (upon confirmation of
receipt) to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like
notice:
(a) if to Parent:
Intercell AG
Campus Vienna Biocenter 6
1030 Vienna
Austria
Attention: General Counsel
Fax: + 43 1 20620 165
with a copy to:
Covington & Burling LLP
1201 Pennsylvania Avenue, N.W.
Washington, DC 20004
Attention: Catherine J. Dargan
Fax:
(202) 778-5567
with a copy to:
Covington & Burling LLP
The New York Times Building
620 Eighth Avenue
New York, NY 10018
Attention: Stephen A. Infante
Fax:
(646) 441-9039
(b) if to a Stockholder, to the appropriate address set
forth on Schedule I hereto.
Notice so given shall (in the case of notice so given by mail)
be deemed to be given when received and (in the case of notice
so given by cable, telegram, facsimile, telex or personal
delivery) on the date of actual transmission or (as the case may
be) personal delivery.
SECTION 8.2.
Representations, Warranties and
Covenants
. The representations and warranties of each
Stockholder set forth in Article 3 of this Agreement and
the representations and warranties of Parent set forth in
Article 4 of this Agreement shall survive until the first
anniversary of the Share Exchange Closing Date. All covenants of
the parties contained in this Agreement that contemplate action
following the Share Exchange Closing shall survive the Share
Exchange Closing; all other covenants shall terminate at the
Share Exchange Closing.
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SECTION 8.3.
Fees and Expenses
. All costs
and expenses incurred in connection with this Agreement and the
Transactions shall be paid by the party incurring such expenses,
whether or not the Share Exchange or any of the other
Transactions are consummated;
provided
,
however
,
that any cost or expense in Sections 2.2, 5.3 and 5.7 that
arise solely as a result of Parents status as a
non-U.S. entity
shall be borne solely by Parent.
SECTION 8.4.
Governing Law
. This Agreement
shall be governed by, and construed in accordance with, the laws
of the State of Delaware regardless of the laws that might
otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 8.5.
Specific Enforcement;
Jurisdiction
. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with the terms
hereof or were otherwise breached and that the non-breaching
party shall be entitled to specific performance of the terms
hereof in addition to any other remedy which may be available at
law or in equity. It is accordingly agreed that the
non-breaching party will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any
state or federal court located in the State of Delaware or in
the Court of Chancery of the State of Delaware, the foregoing
being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto
(a) consents to submit itself to the personal jurisdiction
of any state or federal court located in the State of Delaware
or in the Court of Chancery of the State of Delaware in the
event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such
court, and (c) agrees that it will not bring any action
relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a state
or federal court located in the State of Delaware or the Court
of Chancery of the State of Delaware.
SECTION 8.6.
Successors and Assigns
. This
Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of the other parties hereto.
This Agreement shall be binding upon, inure to the benefit of
and be enforceable by each party and such partys heirs,
beneficiaries, executors, successors, representatives and
permitted assigns.
SECTION 8.7.
Company Consent Right
. Parent
and the Stockholders shall not amend or modify this Agreement
(a) to increase or decrease, or change the form of, the
consideration to be paid to the Stockholders pursuant to this
Agreement, or (b) in a manner that would reasonably be
expected to materially delay or prevent the consummation of the
Share Exchange or the other Transactions, in each case, without
the prior written consent of the Company. The Company is a third
party beneficiary of this Section 8.7.
SECTION 8.8.
Several
Obligations
. Notwithstanding anything to the contrary
in this Agreement, the obligations of the Stockholders under
this Agreement are several and not joint. In no event shall any
Stockholder have any liability or obligation with respect to the
acts or omissions of any other Stockholder.
SECTION 8.9.
Counterparts
. This Agreement
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, and delivered by means
of facsimile transmission or otherwise, each of which when so
executed and delivered shall be deemed to be an original and all
of which when taken together shall constitute one and the same
agreement.
SECTION 8.10.
Severability
. If any
provision of this Agreement shall be held to be illegal, invalid
or unenforceable under any applicable Law, then such
contravention or invalidity shall not invalidate the entire
Agreement. Such provision shall be deemed to be modified to the
extent necessary to render it legal, valid and enforceable, and
if no such modification shall render it legal, valid and
enforceable, then this Agreement shall be construed as if not
containing the provision held to be invalid, and the rights and
obligations of the parties shall be construed and enforced
accordingly.
SECTION 8.11.
Entire Agreement;
Conflicts
. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement
and supersedes all other prior agreements and understandings,
both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. In case of any conflict,
discrepancy, inconsistency or ambiguity of any provision of this
Agreement with any provision of the
Contribution-in-Kind
Agreement, then the provision contained in this Agreement shall
prevail and take precedence.
Section
8.12.
Headings
.
The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed, individually or by its respective
officer thereunto duly authorized, as of the date first written
above.
Intercell AG
Name: Gerd Zettlmeissl
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Title:
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Chief Executive Officer
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Name: Werner Lanthaler
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Title:
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Chief Financial Officer
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Stockholders:
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New Enterprise Associates 10, Limited Partnership
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By:
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/s/ Eugene
A. Trainor III
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A general partner of NEA Partners 10, L.P., the general partner
of New Enterprise Associates 10,
Limited Partnership
NEA Ventures 2002, Limited Partnership
Vice President
Essex Woodlands Health Ventures V, L.P.
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By:
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Essex Woodlands Health Ventures V, L.L.C.
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By:
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/s/ Jeff
Himawan
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Its Duly Authorized Representative
Gruber and McBaine Capital Management
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By:
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/s/ J.
Patterson McBaine
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On behalf of the accounts listed below:
Lagunitas Partners LP
Donagby Sales Inc.
Gruber & McBaine International
Karl Matthies Trust udt 7/25/05
Amanda McBaine
J Patterson McBaine
J Patterson and Susie McBaine Foundation
J. Patterson & Susan S. McBaine
Susan S. McBaine
J. Patterson McBaine TTEE of Turner H. McBaine
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Gruber and McBaine Capital Management
On behalf of the accounts listed below:
Aaronel D. Gruber
Gruber Partnership
Gruber Family Foundation
I & A Gruber Charitable
Gruber Partnership 2
Irving & Aaronel Gruber
Irving B. Gruber
Jamie deRoy
Jon D. Gruber
Jon D & Linda W Gruber Trust
Lindsay Gruber Dunham
Jon D Gruber TTEE fbo Jonathan W Gruber Trust
Linda W Gruber
Terry Deroy Gruber
Terry D. Gruber Trust
C-12
SCHEDULE I
Stockholders
Participating in Share Exchange Agreement
|
|
|
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|
|
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|
|
Shares
|
|
Warrants
|
|
Total
|
|
New Enterprise Associates 10, Limited Partnership
|
|
|
6,417,187
|
|
|
|
550,535
|
|
|
|
6,967,722
|
|
1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel:
(410) 244-0115
Fax:
(410) 752-7721
|
|
|
|
|
|
|
|
|
|
|
|
|
NEA Ventures 2002, Limited Partnership
|
|
|
4,610
|
|
|
|
0
|
|
|
|
4,610
|
|
1119 St. Paul Street
Baltimore, MD 21202
Attn: M. James Barrett and Louis Citron
Tel:
(410) 244-0115
Fax:
(410) 752-7721
|
|
|
|
|
|
|
|
|
|
|
|
|
Essex Woodlands Health Ventures V, L.L.C.
|
|
|
2,802,686
|
|
|
|
0
|
|
|
|
2,802,686
|
|
435 Tasso Street Palo Alto, CA 94301
Attn: Jeff Himawan
Tel:
(650) 543-1555
Fax:
(650) 543-1504
|
|
|
|
|
|
|
|
|
|
|
|
|
Gruber and McBaine Capital Management signing on behalf of the
following accounts:
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|
|
|
|
|
|
|
|
|
|
|
|
50 Osgood Place, Penthouse
San Francisco, CA 94133
Attn: Christine Arroyo
Tel:
(415) 981-0655
Fax:
(415) 981-6434
|
|
|
|
|
|
|
|
|
|
|
|
|
Lagunitas Partners LP
|
|
|
783,081
|
|
|
|
70,000
|
|
|
|
853,081
|
|
Donaghy Sales Inc.
|
|
|
65,700
|
|
|
|
0
|
|
|
|
65,700
|
|
Gruber & McBaine International
|
|
|
120,000
|
|
|
|
24,500
|
|
|
|
144,500
|
|
Karl Matthies Trust udt 7/25/05
|
|
|
12,000
|
|
|
|
0
|
|
|
|
12,000
|
|
Aaronel D. Gruber
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Gruber Partnership
|
|
|
2,000
|
|
|
|
0
|
|
|
|
2,000
|
|
Gruber Family Foundation
|
|
|
31,250
|
|
|
|
0
|
|
|
|
31,250
|
|
I & A Gruber Charitable
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Gruber Partnership 2
|
|
|
2,000
|
|
|
|
0
|
|
|
|
2,000
|
|
Irving & Aaronel Gruber
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Irving B. Gruber
|
|
|
1,000
|
|
|
|
0
|
|
|
|
1,000
|
|
Jamie deRoy
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Jon D. Gruber
|
|
|
14,000
|
|
|
|
0
|
|
|
|
14,000
|
|
Jon D & Linda W Gruber Trust
|
|
|
47,709
|
|
|
|
10,500
|
|
|
|
58,209
|
|
Lindsay Gruber Dunham
|
|
|
500
|
|
|
|
1,750
|
|
|
|
2,250
|
|
Jon D Gruber TTEE fbo Jonathan W Gruber Trust
|
|
|
5,750
|
|
|
|
1,750
|
|
|
|
7,500
|
|
Linda W Gruber
|
|
|
3,150
|
|
|
|
0
|
|
|
|
3,150
|
|
Terry Deroy Gruber
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Terry D. Gruber Trust
|
|
|
500
|
|
|
|
0
|
|
|
|
500
|
|
Amanda McBaine
|
|
|
1,000
|
|
|
|
0
|
|
|
|
1,000
|
|
J Patterson McBaine
|
|
|
132,650
|
|
|
|
14,000
|
|
|
|
146,650
|
|
J Patterson and Susie McBaine Foundation
|
|
|
7,620
|
|
|
|
0
|
|
|
|
7,620
|
|
J. Patterson &
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan S. McBaine Susan S. McBaine
|
|
|
11,000 1,000
|
|
|
|
0 0
|
|
|
|
11,000 1,000
|
|
J. Patterson McBaine TTEE of
|
|
|
|
|
|
|
|
|
|
|
|
|
Turner H. McBaine
|
|
|
17,375
|
|
|
|
0
|
|
|
|
17,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
10,486,268
|
|
|
|
673,035
|
|
|
|
11,159,303
|
|
C-13
EXHIBIT A
Form of
Contribution-in-Kind
Agreement
C-14
(subject
to the approval by the competent judge of the commercial
register)
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CONTRIBUTION IN KIND
|
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SACHEINLAGEVERTRAG
|
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AGREEMENT
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vom
[ ]
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dated as of [ ]
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abgeschlossen zwischen
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by and among
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INTERCELL AG
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INTERCELL AG
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(FN 166438 m)
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(FN 166438 m)
|
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Campus Vienna Biocenter 6
|
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Campus Vienna Biocenter 6
|
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A-1030
Wien
|
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A-1030 Wien
|
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|
(im Folgenden
INTERCELL
oder
übernehmende Gesellschaft
)
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(hereinafter
INTERCELL
or
Acquiring
Party
)
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und
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and
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[ ]
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[ ]
|
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|
[
registration number
]
|
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|
|
[
registration number
]
|
|
|
[
address
]
|
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|
|
[
address
]
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|
(im Folgenden
einbringende Gesellschaft
)
|
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|
(hereinafter
Contributing Party
)
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|
|
Präambel
|
|
|
|
Preamble
|
|
|
|
|
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|
INTERCELL beabsichtigt, ihr Grundkapital von derzeit
45.521.707,00 um [ ]
auf [ ] zu erhöhen. Die
einbringende Gesellschaft soll unter Ausschluss des
Bezugsrechtes der Aktionäre der INTERCELL zur
Übernahme des Kapitalerhöhungsbetrages in der
Höhe von [ ], zugelassen
werden. Die einbringende Gesellschaft bringt in Erfüllung
dieses Kapitalerhöhungsbetrages [ ]
Stückaktien an der [ ] (im Folgenden die
,,
Gesellschaft
), einer Aktiengesellschaft nach dem
Recht von Delaware, mit dem Sitz in [ ],
eingetragen im [ ] zu [ ], ein.
|
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|
INTERCELL intends to increase its share capital from
45,521,707.00 by [ ] to
[ ]. The Contributing Party shall
under exclusion of the statutory subscription rights of the
shareholders of INTERCELL subscribe for the new share capital in
the amount of [ ]. The Contributing
Party will fulfil the obligation by contributing
[ ] shares of Iomai Corporation
(hereinafter the
Company
), a Delaware
corporation, into INTERCELL.
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1.
|
|
Definitionen
|
|
1.
|
|
Definitions
|
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1.1
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|
Einbringende Gesellschaft
bedeutet [ ].
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1.1
|
|
Contributing Party
shall mean [ ].
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1.2
|
|
Einbringungsgegenständliche Aktien
bedeuten die in
Punkt 3. dieses Vertrages definierten Aktien der
Gesellschaft.
|
|
1.2
|
|
Contribution in Kind Shares
shall mean the shares of the
Company as defined in section 3. of this Agreement.
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|
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1.3
|
|
Gesellschaft
bedeutet [ ], eine
Aktiengesellschaft nach dem Recht von Delaware, mit dem Sitz in
Delaware und der Geschäftsanschrift 20 Firstfield Road,
Gaithersburg, Maryland 20878.
|
|
1.3
|
|
Company
shall mean Iomai Corporation, a Delaware
corporation with its registered office in Delaware and its
business address at 20 Firstfield Road, Gaithersburg, Maryland
20878.
|
|
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1.4
|
|
INTERCELL
bedeutet INTERCELL AG, eine Aktiengesellschaft
nach österreichischem Recht, mit dem Sitz in Wien, und der
Geschäftsanschrift Campus Vienna Biocenter 6, 1030 Wien,
eingetragen im Firmenbuch des Handelsgerichtes Wien zu FN 166438
m.
|
|
1.4
|
|
INTERCELL
shall mean INTERCELL AG, a stock corporation
according to the laws of Austria with its corporate seat in
Vienna, and its business address at Campus Vienna Biocenter 6,
1030 Vienna, registered in the commercial register of the Vienna
Commercial Court under FN 166438 m.
|
C-15
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1.5
|
|
bedeutet Euro, die gesetzliche Währung der
Mitgliedstaaten der Europäischen Währungsunion.
|
|
1.5
|
|
shall mean Euro, the lawful currency of the member
states of the European Monetary Union.
|
|
|
|
|
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|
|
1.6
|
|
Übergabestichtag
bedeutet der in Punkt 7.1 diese
Vertrages definierte Stichtag.
|
|
1.6
|
|
Transmission Date
shall mean the date as defined in
section 7.1 of this Agreement.
|
|
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|
|
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|
|
1.7
|
|
Übernehmende Gesellschaft
bedeutet INTERCELL.
|
|
1.7
|
|
Acquiring Company
shall mean INTERCELL.
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1.8
|
|
Vertrag
bedeutet dieser Sacheinlagevertrag samt seinen
Beilagen.
|
|
1.8
|
|
Agreement
shall mean this contribution in kind agreement.
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|
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2.
|
|
Interpretationen
|
|
2.
|
|
Interpretations
|
|
|
|
|
|
|
|
|
|
Überschriften
|
|
|
|
Headings
|
|
|
|
|
|
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|
|
Die Überschriften der einzelnen Bestimmungen dieses
Vertrages dienen ausschlieβlich zur Erleichterung des
Verweises und ändern, ergänzen, erweitern oder
schränken die Bestimmungen dieses Vertrages nicht ein. Sie
dienen auch nicht zur Auslegung der Bestimmungen dieses
Vertrages.
|
|
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|
The headings of all sections of this Agreement are for
convenience of reference only and shall not modify, alter,
expand, limit or serve for interpretation of any of the
provisions of this Agreement.
|
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|
3.
|
|
Vertragsgegenstand
|
|
3.
|
|
Subject Matter of the Agreement
|
|
|
|
|
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Die einbringende Gesellschaft hält [ ]
Stückaktien der Gesellschaft, über die
[ ] (im Folgenden
einbringungsgegenständliche Aktien
).
|
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|
The Contributing Party holds [ ] shares in
the Company. The shares are [embodied in
]
hereinafter
Contribution in Kind Shares
).
|
|
|
|
|
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|
|
4.
|
|
Firma und Sitz der beteiligten
Gesellschaften
|
|
4.
|
|
Company Name and Registered Offices of the Companies
Concerned
|
|
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|
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4.1
|
|
Einbringende Gesellschaft ist die [ ] mit dem
Sitz in [ ] und der Geschäftsanschrift
[ ] eingetragen im [ ] zu
[ ].
|
|
4.1
|
|
Contributing Party is [ ] with its corporate
seat in [ ] and its business address at,
registered in [ ] under [ ].
|
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4.2
|
|
Übernehmende Gesellschaft ist die INTERCELL mit dem Sitz in
Wien und der Geschäftsanschrift 1030 Wien, Campus Vienna
Biocenter 6, eingetragen im Firmenbuch des Handelsgerichtes Wien
zu FN 166438 m.
|
|
4.2
|
|
Acquiring Company is INTERCELL with its corporate seat in Vienna
and its business address at 1030 Wien, Campus Vienna Biocenter
6, registered in the commercial register of the Vienna
Commercial Court under FN 166438 m.
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5.
|
|
Übertragungsvereinbarung
|
|
5.
|
|
Transfer Agreement
|
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|
Die einbringende Gesellschaft bringt ein und überträgt
die einbringungsgegenständlichen Aktien,
[ ] an die INTERCELL. INTERCELL nimmt die
Einbringung an und übernimmt die
einbringungsgegenständlichen Aktien.
[Die einbringende
Gesellschaft indossiert die Aktien Nr an
INTERCELL und übergibt diesen. INTERCELL übernimmt die
indossierten Aktien Nr
].
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The Contributing Party contributes and transfers the
Contribution in Kind Shares that are [embodied in
] to INTERCELL. INTERCELL accepts the contribution and
takes over the Contribution in Kind Shares.
[The Contributing
Party endorses the share certificate number
to INTERCELL and hands it over. INTERCELL
takes the endorsed share certificates number
].
|
C-16
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6.
|
|
Gegenleistung
|
|
6.
|
|
Consideration
|
|
|
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|
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|
Als Gegenleistung für die einbringungsgegenständlichen
Aktien der Gesellschaft erhält die einbringende
Gesellschaft von INTERCELL [ ] Stück neue
Aktien der INTERCELL, die aus dem genehmigten Kapital der
INTERCELL gemäß Punkt 4.6 der Satzung der INTERCELL
unter Ausschluss des Bezugsrechtes der Aktionäre der
INTERCELL geschaffen werden. Der Ausgabebetrag einer neuen Aktie
der INTERCELL beträgt [ ].
|
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|
As consideration for the Contribution in Kind Shares of the
Company the Contributing Party will acquire [ ]
new shares in INTERCELL. These new shares will be created out of
the authorised capital of INTERCELL according to section 4.6 of
the Articles of Association of INTERCELL under the exclusion of
the statutory subscription rights of the shareholders of
INTERCELL. The subscription price of one new share of INTERCELL
is [ ].
|
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7.
|
|
Übergabestichtag
|
|
7.
|
|
Transmission Date
|
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7.1
|
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Die einbringungsgegenständlichen Aktien gehen am Tag der
Unterfertigung des gegenständlichen Vertrages auf die
INTERCELL über.
|
|
7.1
|
|
The Contribution in Kind Shares are transferred to INTERCELL on
the day of the signing of this Agreement.
|
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|
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7.2
|
|
Ein auf die einbringungsgegenständlichen Aktien
entfallender Bilanzgewinn steht der INTERCELL ab dem
[ ] zu.
|
|
7.2
|
|
The profit with regard to the Contribution in Kind Shares
belongs to INTERCELL from [ ].
|
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8
|
|
Gewährleistungen
|
|
8
|
|
Representations and Warranties
|
|
|
|
|
|
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|
Die einbringende Gesellschaft leistet im Hinblick auf die
einbringungsgegenständlichen Aktien bezogen auf den Tag der
Unterfertigung dieses Vertrages Gewähr dafür, dass sie
zivilrechtliche und wirtschaftliche Eigentümerin der
einbringungsgegenständlichen Aktien ist. Die
einbringungsgegenständlichen Aktien gehen frei von Rechten
Dritter, insbesondere Pfandrechten oder sonstigen
Sicherungsrechten und Belastungen auf Intercell über. Mit
Ausnahme der Eintragungsurkunde der Gesellschaft und der
übernehmenden Gesellschaft gegenüber offen gelegte
Verträge, bestehen keine Verträge oder Vereinbarungen
zwischen den Aktionären der Gesellschaft in Bezug auf die
einbringungsgegenständlichen Aktien.
|
|
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|
The Contributing Party represents and warrants with regard to
the Contribution in Kind Shares on the date of the signing of
this Agreement that the Contributing Party is the record and
beneficial owner of the Contribution in Kind Shares. The
Contribution in Kind Shares are transferred to Intercell free of
any third party rights including without limitation liens or
other security interests and encumbrances. Except the
Certificate of Incorporation of the Company and other agreements
that have been disclosed to the Acquiring Party, there are no
agreements or contracts between the shareholders of the Company
with regard to the Contribution in Kind Shares.
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9
|
|
Bevollmächtigung
|
|
9
|
|
Power of Attorney
|
|
|
|
|
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|
|
Die einbringende Gesellschaft ermächtigt und
bevollmächtigt hiermit Herrn Dr. Christian Hoenig,
Rechtsanwalt,
A-1010
Wien,
Schubertring 6, und die übernehmende Gesellschaft
bevollmächtigt Frau Dr. Elke Napokoj, Rechtsanwalt,
Donau-City-Straße 6,
A-1220
Wien,
gemeinsam Änderungen und Ergänzungen dieses Vertrages
vorzunehmen, soweit solche Änderungen und Ergänzungen
für die Durchführung der gegenständlichen
Einbringung und der Kapitalerhöhung bei der INTERCELL,
insbesondere im Zusammenhang mit dem Firmenbuch, erforderlich
oder zweckmäßig sind.
|
|
|
|
Contributing Party hereby authorizes and grants power of
attorney to Mr Christian Hoenig, attorney-at-law, A-1010 Wien,
Schubertring 6, and Acquiring Party hereby authorizes and grants
power of attorney to Ms Elke Napokoj, attorney-at-law,
Donau-City-Straße 6, A-1220 Wien, to make together such
amendments and modifications to this Agreement as may be
necessary for or conducive to consummating the contribution and
the capital increase of INTERCELL, in particular in connection
with the commercial register.
|
C-17
|
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|
10.
|
|
Geltendes Recht9
|
|
10.
|
|
Applicable Law 7
|
|
|
|
|
|
|
|
|
|
Der gegenständliche Vertrag unterliegt
österreichischem Recht unter Ausschluss der
Verweisungsnormen des österreichischen internationalen
Privatrechts.
|
|
|
|
This Agreement shall be subject to Austrian law without giving
effect the provisions on conflict of laws.
|
|
|
|
|
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|
|
11.
|
|
Beendigung
|
|
11.
|
|
Termination
|
|
|
|
|
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|
|
Dieser Vertrag wird unverbindlich, wenn die Durchführung
der Kapitalerhöhung nicht bis zum [ ] in
das Firmenbuch eingetragen worden ist.
|
|
|
|
This Agreement will become non-binding, unless the execution of
the capital increase is registered in the commercial register by
the end of [ ].
|
|
|
|
|
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|
|
12
|
|
Kosten, Abgaben und Gebühren
|
|
12
|
|
Costs, Duties and Fees
|
|
|
|
|
|
|
|
12.1
|
|
Die mit dem Abschluss und der Durchführung des
gegenständlichen Vertrages allenfalls verbundenen
Gebühren und Abgaben trägt die INTERCELL.
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12.1
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Any fees and duties associated with the conclusion and
performance hereof shall be borne by INTERCELL.
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12.2
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Die Kosten ihrer Berater und Vertreter haben die
Vertragsparteien jeweils selbst zu übernehmen.
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12.2
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Each Party must assume the costs of its own consultants and
representatives.
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13.
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Allgemeine Bestimmungen und Schlussbestimmungen
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13.
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Miscellaneous
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13.1
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Alle gemäβ dem gegenständlichen Vertrag
gegenüber einer anderen Vertragspartei abzugebenden
Mitteilungen, Benachrichtigungen, Berichte, Erklärungen und
Bekanntmachungen sind wirksam vorgenommen, wenn sie schriftlich
(auch per Telefax) an die folgenden Adressen erfolgen:
INTERCELL AG
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13.1
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All notices, notifications, reports, declarations and
announcements to be issued to another party pursuant hereto
shall be validly executed when made in writing (including by
fax) to the following addresses:
INTERCELL AG
T:...
E:...
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T:....
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F:...
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E:....
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[ ]
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F:....
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T:...
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[ ]
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E:...
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T:....
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F:...
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E:....
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F:....
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13.2
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Alle Änderungen und Ergänzungen des vorliegenden
Vertrages einschlieβlich dieser Schriftformklausel
bedürfen zu ihrer Wirksamkeit der Schriftform.
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13.2
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All modifications and additions hereto, including this written
form clause, shall require written form for validity.
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13.3
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Vereinbart wird, dass im Falle von mehreren einbringenden
Gesellschaften jede Gesellschaft nach diesem Vertrag einzeln und
selbstständig und nicht solidarisch haftet.
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13.3
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It is agreed that in case of several Contributing Parties they
shall be liable under this Agreement severally and not jointly.
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C-18
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13.4
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Sollten einzelne Bestimmungen dieses Vertrages aufgrund
gesetzlicher Bestimmungen nicht rechtswirksam oder ungültig
werden, so wird hiedurch die Gültigkeit der übrigen
Vertragsbestimmungen nicht berührt. Die Vertragsparteien
verpflichten sich, anstelle der nicht rechtswirksamen oder
ungültigen Bestimmungen solche zu beschlieβen, die dem
wirtschaftlichen Zweck der unwirksamen oder ungültigen
Bestimmungen am nächsten kommen. Dasselbe gilt, wenn bei
der Durchführung dieses Vertrages eine
ergänzungsbedürftige Lücke offenbart wird.
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13.4
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In the event individual provisions hereof are or become legally
ineffective or invalid based on statutory provisions, the
validity of the other provisions hereof shall not be affected
thereby. The Parties hereby agree, in place of the legally
ineffective or invalid provisions, to stipulate the provisions
which most closely approximate the economic purpose of the
ineffective or invalid provisions. The same shall apply if a gap
in need of filling is revealed upon the performance hereof.
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13.5
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Im Fall von Widersprüchen zwischen der deutschen und der
englischen Fassung dieses Vertrages gilt ausschlieβlich der
deutsche Text.
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13.5
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In case of any discrepancies between the German and the English
version of this Agreement the German version shall exclusively
prevail.
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,
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(Place)
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(Date)
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INTERCELL AG
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(Place)
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(Date)
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[ ]
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C-19
EXHIBIT B
Form of
Stock Power
FOR VALUE RECEIVED, the
undersigned, ,
does hereby sell, assign and transfer unto Intercell AG all of
the shares of common stock, par value $.01 per share, of Iomai
Corporation, a Delaware corporation (the
Company
), registered in its name on the books
of the Company represented by Certificate
No. herewith, and does
hereby irrevocably constitute and
appoint
as its attorney-in-fact to transfer said shares on the books of
the Company with full power of substitution in the premises.
[Stockholder]
Name:
Title:
C-20
EXHIBIT C
Form of
Subscription Certificate
C-21
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Zeichnungsschein
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Certificate of
Subscription
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Gemäβ Beschluss der Hauptversammlung vom 15.06.2007
und gemäβ Punkt 4.6. der Satzung ist der Vorstand der
INTERCELL AG, mit dem Sitz in Wien und der
Geschäftsanschrift Campus Vienna Biocenter 6, 1030 Wien,
eingetragen im Firmenbuch des Handelsgerichtes Wien unter FN
166438m, ermächtigt, das Grundkapital der Gesellschaft bis
15. Juni 2012 um bis zu EUR 5.200.000,00 durch Ausgabe von bis
zu 5.200.000 neue auf Inhaber lautende Stückaktien einmal
oder in mehreren Tranchen auf bis zu EUR 49.881.712,00 gegen
Bareinlage oder Sacheinlage unter gänzlichem oder
teilweisem Ausschluss des Bezugsrechtes der Aktionäre zu
erhöhen, wobei die Ausgabebedingungen, insbesondere der
Ausgabekurs, der Gegenstand der Sacheinlage, der Inhalt der
Aktienrechte, der Ausschluss des Bezugsrechtes sowie eine
allfällige Ausgabe der Aktien durch mittelbare Bezugsrechte
nach § 153 Absatz 6 Aktiengesetz vom Vorstand mit
Zustimmung des Aufsichtsrates festgesetzt werden.
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According to the resolution of the shareholders meeting as
of 15 June 2007 and according to Section 4.6 of the
articles of association, the management board of INTERCELL AG,
with its corporate seat in Vienna and its business address at
Campus Vienna Biocenter 6, 1030 Vienna, registered in the
commercial register of the commercial court Vienna under FN
166438m, is authorized to increase the Companys share
capital by 15 June 2012 by up to EUR 5,200,000.00 by
issuing up to 5,200,000 new shares with no-par-value registered
in the name of the bearer, once or in several tranches, to up to
EUR 49,881,712.00 against cash contribution or by issuing shares
against in-kind contribution under the exclusion of the
statutory subscription rights of the shareholders in total or in
part, whereas the terms of issue, in particular the issue price,
the object of the in-kind contribution, the content of the
shareholders rights, the exclusion of the subscription
right, as well as a possible issuing of the shares by way of the
indirect subscription right pursuant to Section 153 Para 6 of
the Austrian Stock Corporation Act are determined by the
management board upon approval by the supervisory board.
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Der Vorstand hat mit Beschluss vom [ ] und mit
Durchführungsbeschluss vom [ ] in
Ausnützung seiner Ermächtigung und mit Zustimmung des
Aufsichtsrates den Beschluss gefasst, das Grundkapital von
derzeit EUR 45.521.707,00 um EUR [ ] auf EUR
[ ] durch Ausgabe von [ ]
neuen, auf Inhaber lautenden Stückaktien der Kategorie
Stammaktien mit einem anteiligen Wert am Grundkapital von EUR
1,00 zum Ausgabebetrag von EUR [ ] pro Aktie
gegen Sacheinlage, und zwar gegen Einlage von
[ ] ..aktien an der Safarià
[ ] mit dem Sitz in [ ] und
der Geschäftsanschrift in [ ], eingetragen
[ ] zu [ ], zu erhöhen.
Die neuen Aktien sind mit Gewinnberechtigung ab dem
[ ] ausgestattet. Das Bezugsrecht der
Aktionäre wurde ausgeschlossen.
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By resolution of [ ] and by implementing
resolution of [ ], in utilization of its
authorization and upon approval by the supervisory board, the
management board decided to increase the share capital of EUR
45,521,707.00 by EUR [ ] to EUR
[ ] by issuing [ ] new shares
with no-par-value registered in the name of the bearer with a
pro-rata value in the share-capital of EUR 1.00 for an issue
price of EUR [ ] per share against in-kind
contribution, in fact against contribution of
[ ] shares in Iomai Corporation, a
Delaware corporation with its registered office in Delaware and
its business address at 20 Firstfield Road, Gaithersburg,
Maryland 20878. The new shares will carry dividend rights as of
[ ]. The shareholders subscription right
has been excluded.
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Der Aufsichtsrat hat am [ ] die Beschlüsse
des Vorstandes genehmigt und die entsprechende
Satzungsänderung beschlossen.
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On [ ], the supervisory board has approved the
resolutions of the management board and adopted the relevant
amendment of the articles of association.
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Die gefertigte
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The undersigned
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[
Firma]
[
Geschäftsanschrift]
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[
company name]
[
business address]
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erklärt hiermit, das gesamte Erhöhungskapital in der
Höhe von EUR [ ] zu übernehmen, indem
sie alle [ ] Stück neue auf Inhaber
lautende Stückaktien der Stammkategorie Stammaktien
zeichnet und übernimmt. Der Ausgabebetrag beträgt EUR
[ ] pro Aktie und daher insgesamt EUR
[ ]. Die Gefertigte bringt darauf
[ ] ... aktien an der [ ], mit
dem Sitz in [ ] und der Geschäftsanschrift
[ ], eingetragen im [ ] ein.
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herewith declares that it will accept the entire amount of the
increase capital in the amount of EUR [ ], by
subscribing and accepting all [ ] new shares
with no-par-value registered in the name of bearer in the form
of ordinary shares. The issue price is EUR [ ]
per share and thus, totals EUR [ ]. The
undersigned contributes [ ] shares in
Iomai Corporation [ ], a Delaware corporation
with its registered office in Delaware and its business address
at 20 Firstfield Road, Gaithersburg, Maryland 20878.
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Der Einbringungsvertrag über die Sacheinlage, wie oben
beschrieben, ist am [ ] abgeschlossen worden.
Der Gegenstand der Sacheinlage ist von INTERCELL AG bereits
erworben.
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The contribution agreement on the in-kind contribution as
described above was entered into on [ ]. The
object of the in-kind contribution has already been acquired by
INTERCELL AG.
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Diese Zeichnungserklärung wird unverbindlich, wenn die
Durchführung der Kapitalerhöhung nicht bis zum
[ ] in das Firmenbuch eingetragen worden ist.
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This Subscription Certificate will become non-binding, unless
the execution of the capital increase is registered in the
commercial register by the end of [ ].
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[ ]
C-22
Annex D
May 12, 2008
Board of Directors
Iomai Corporation
20 Firstfield Road
Gaithersburg, MD 20878
Ladies and Gentlemen:
You have requested our opinion as to the fairness, from a
financial point of view, to the holders of the common stock of
Iomai Corporation (the Company), other than
Intercell AG (Parent) and its affiliates and the
Exchange Shareholders (as defined below), of the Merger
Consideration (as defined below) to be received by such
stockholders pursuant to the terms of that certain Agreement and
Plan of Merger, to be dated as of May 12, 2008 (the
Agreement), by and among Parent, Zebra Merger Sub,
Inc. (Merger Sub) and the Company.
As more specifically set forth in the Agreement, and subject to
the terms, conditions and adjustments set forth in the
Agreement, Merger Sub will merge with and into the Company (the
Transaction) and, pursuant to the Transaction, each
share of common stock of the Company issued and outstanding
immediately prior to the effective time of the Transaction
(other than any shares held in the treasury of the Company or
owned by Merger Sub, Parent or any wholly-owned subsidiary of
Parent and the Appraisal Shares (as defined in the Agreement))
shall be converted into the right to receive $6.60 in cash (the
Merger Consideration). We further understand that,
in connection with the Transaction, certain holders of common
stock of the Company will enter into a Share Exchange Agreement
(the Exchange Agreement) with Parent pursuant to
which such holders agree to exchange their shares of common
stock of the Company for shares of common stock of Parent,
subject to the terms and conditions of the Exchange Agreement
(the Exchange Shareholders).
Cowen and Company, LLC (Cowen), as part of its
investment banking business, is continually engaged in the
valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private
placements and valuations for corporate and other purposes. In
the ordinary course of our business, we and our affiliates
actively trade the securities of the Company for our own account
and for the accounts of our customers and, accordingly, may at
any time hold a long or short position in such securities.
We have been engaged by the Company solely to render an opinion
to the Board of Directors of the Company in connection with the
Transaction and will receive a fee from the Company for
providing this opinion. In addition, the Company has agreed to
reimburse our expenses and indemnify us for certain liabilities
that may arise out of our engagement. In the two years preceding
the date of this Opinion, Cowen has served as placement agent to
the Company and has received fees for the rendering of such
services. Cowen and its affiliates also may in the future
provide commercial and investment banking services to the
Company and Parent and may receive fees for the rendering of
such services.
In connection with our opinion, we have reviewed and considered
such financial and other matters as we have deemed relevant,
including, among other things:
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A draft of the Agreement received May 12, 2008, which is
the most recent draft made available to Cowen;
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Certain publicly available financial and other information for
the Company and certain other relevant financial and operating
data furnished to Cowen by the Company management;
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Certain internal financial analyses, financial forecasts,
reports and other information concerning the Company (the
Company Forecasts) prepared by the management of the
Company;
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Reuters estimates (Reuters Estimates) and financial
projections in Wall Street analyst reports (Wall Street
Projections) for the Company;
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Discussions we have had with certain members of the management
of the Company concerning the historical and current business
operations, financial conditions and prospects of the Company
and such other matters we deemed relevant;
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The reported price and trading history of the shares of the
common stock of the Company as compared to the reported price
and trading histories of certain publicly traded companies we
deemed relevant;
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Certain financial terms of the Transaction as compared to the
financial terms of certain selected business combinations we
deemed relevant;
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D-1
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Based on the Company Forecasts and Wall Street Projections, the
cash flows generated by the Company on a stand-alone basis to
determine the present value of the discounted cash
flows; and
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Such other information, financial studies, analyses and
investigations and such other factors that we deemed relevant
for the purposes of this opinion.
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In conducting our review and arriving at our opinion, we have,
with your consent, assumed and relied, without independent
investigation, upon the accuracy and completeness of all
financial and other information provided to us by the Company or
which is publicly available or was otherwise reviewed by us. We
have not undertaken any responsibility for the accuracy,
completeness or reasonableness of, or independently to verify,
such information. We have relied upon, without independent
verifications, the assessment of Company management as to the
existing products and services of the Company and the validity
of, and risks associated with, the future products and services
of the Company. In addition, we have not conducted nor have
assumed any obligation to conduct any physical inspection of the
properties or facilities of the Company. We have further relied
upon the assurance of management of the Company that they are
unaware of any facts that would make the information provided to
us incomplete or misleading in any respect. We have, with your
consent, assumed that the Company Forecasts which we examined
were reasonably prepared by the management of the Company on
bases reflecting the best currently available estimates and good
faith judgments of such management as to the future performance
of the Company, and that such forecasts and the Wall Street
Projections utilized in our analyses provide a reasonable basis
for our opinion.
We have not made or obtained any independent evaluations,
valuations or appraisals of the assets or liabilities of the
Company or Parent, nor have we been furnished with such
materials. Our opinion does not address, and we express no view
with regard to, any legal matters. Our services to the Company
in connection with the Transaction have been comprised solely of
rendering an opinion from a financial point of view with respect
to the Merger Consideration. We express no view as to any other
aspect or implication of the Transaction or any other agreement,
arrangement or understanding entered into in connection with the
Transaction or otherwise. Without limiting the generality of the
foregoing, we do not express any view with respect to the
Exchange Agreement or any of the transactions contemplated
thereby. Our opinion is necessarily based upon economic and
market conditions and other circumstances as they exist and can
be evaluated by us on the date hereof. It should be understood
that, although subsequent developments may affect our opinion,
we do not have any obligation to update, revise or reaffirm our
opinion and we expressly disclaim any responsibility to do so.
Additionally, we were not engaged to be involved in any
determinations of the Board of Directors or the Companys
management to pursue strategic alternatives or in the
negotiation of any of the terms of the Transaction, and we have
not been authorized or requested to, and did not, solicit
alternative offers for the Company or its assets, nor have we
investigated any other alternative transactions that may be
available to the Company.
For purposes of rendering our opinion we have assumed, in all
respects material to our analysis, that the representations and
warranties of each party contained in the Agreement are true and
correct, that each party will perform all of the covenants and
agreements required to be performed by it under the Agreement
and that all conditions to the consummation of the Transaction
will be satisfied without waiver thereof. We have assumed that
the final form of the Agreement will be substantially similar to
the last draft reviewed by us. We have also assumed that all
governmental, regulatory and other consents and approvals
contemplated by the Agreement will be obtained and that in the
course of obtaining any of those consents no restrictions will
be imposed or waivers made that would have an adverse effect on
the contemplated benefits of the Transaction.
It is understood that this letter is intended for the benefit
and use of the Board of Directors of the Company in its
consideration of the Transaction and may not be used for any
other purpose or reproduced, disseminated, quoted or referred to
at any time, in any manner or for any purpose without our prior
written consent. This letter does not constitute a
recommendation to any stockholder as to how such stockholder
should vote with respect to the Transaction or to take any other
action in connection with the Transaction or otherwise. We have
not been requested to opine as to, and our opinion does not in
any manner address, the Companys underlying business
decision to effect the Transaction or the relative merits of the
Transaction as compared to other business strategies or
transactions that might be available to the Company. In
addition, we have not been requested to opine as to, and our
opinion does not in any manner address, the fairness of the
amount or nature of compensation to any of the Companys
officers, directors or employees, or class of such persons,
relative to the compensation to the public stockholders of the
Company.
This Opinion was reviewed and approved by Cowens Fairness
Opinion Review Committee.
Based upon and subject to the foregoing, including the various
assumptions and limitations set forth herein, it is our opinion
that, as of the date hereof, the Merger Consideration in the
Transaction is fair, from a financial point of view, to the
stockholders of the Company, other than Parent and its
affiliates and the Exchange Shareholders.
Very truly yours,
/s/ Cowen and Company
COWEN AND COMPANY
D-2
Annex E
SECTION 262
OF THE DELAWARE GENERAL CORPORATION LAW
RIGHTS OF APPRAISAL
(a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to Section 228 of
this title shall be entitled to an appraisal by the Court of
Chancery of the fair value of the stockholders shares of
stock under the circumstances described in subsections (b)
and (c) of this section. As used in this section, the word
stockholder means a holder of record of stock in a
stock corporation and also a member of record of a nonstock
corporation; the words stock and share
mean and include what is ordinarily meant by those words and
also membership or membership interest of a member of a nonstock
corporation; and the words depository receipt mean a
receipt or other instrument issued by a depository representing
an interest in one or more shares, or fractions thereof, solely
of stock of a corporation, which stock is deposited with the
depository.
(b) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a
merger or consolidation to be effected pursuant to
Section 251 (other than a merger effected pursuant to
Section 251(g) of this title), Section 252,
Section 254, Section 257, Section 258,
Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect
thereof, at the record date fixed to determine the stockholders
entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national
securities exchange or (ii) held of record by more than
2,000 holders; and further provided that no appraisal rights
shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for
its approval the vote of the stockholders of the surviving
corporation as provided in subsection (f) of
Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to
Sections 251, 252, 254, 257, 258, 263 and 264 of this title
to accept for such stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect thereof;
b. Shares of stock of any other corporation, or
depository receipts in respect thereof, which shares of stock
(or depository receipts in respect thereof) or depository
receipts at the effective date of the merger or consolidation
will be either listed on a national securities exchange or held
of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.
and b. of this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.,
b., and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under Section 253 of
this title is not owned by the parent corporation immediately
prior to the merger, appraisal rights shall be available for the
shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as
a result of an amendment to its certificate of incorporation,
any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all
of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this
section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is
practicable.
E-1
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or
(c) hereof that appraisal rights are available for any or
all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholders
shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for
appraisal of such stockholders shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such stockholders
shares. A proxy or vote against the merger or consolidation
shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as
herein provided. Within 10 days after the effective date of
such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not
voted in favor of or consented to the merger or consolidation of
the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to
Section 228 or Section 253 of this title, then either
a constituent corporation before the effective date of the
merger or consolidation or the surviving or resulting
corporation within 10 days thereafter shall notify each of
the holders of any class or series of stock of such constituent
corporation who are entitled to appraisal rights of the approval
of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock
of such constituent corporation, and shall include in such
notice a copy of this section. Such notice may, and, if given on
or after the effective date of the merger or consolidation,
shall, also notify such stockholders of the effective date of
the merger or consolidation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of
mailing of such notice, demand in writing from the surviving or
resulting corporation the appraisal of such holders
shares. Such demand will be sufficient if it reasonably informs
the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such
holders shares. If such notice did not notify stockholders
of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second
notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of
such constituent corporation that are entitled to appraisal
rights of the effective date of the merger or consolidation or
(ii) the surviving or resulting corporation shall send such
a second notice to all such holders on or within 10 days
after such effective date; provided, however, that if such
second notice is sent more than 20 days following the
sending of the first notice, such second notice need only be
sent to each stockholder who is entitled to appraisal rights and
who has demanded appraisal of such holders shares in
accordance with this subsection. An affidavit of the secretary
or assistant secretary or of the transfer agent of the
corporation that is required to give either notice that such
notice has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice,
each constituent corporation may fix, in advance, a record date
that shall be not more than 10 days prior to the date the
notice is given, provided, that if the notice is given on or
after the effective date of the merger or consolidation, the
record date shall be such effective date. If no record date is
fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next
preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the
merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a)
and (d) of this section hereof and who is otherwise
entitled to appraisal rights, may commence an appraisal
proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within
60 days after the effective date of the merger or
consolidation, any stockholder who has not commenced an
appraisal proceeding or joined that proceeding as a named party
shall have the right to withdraw such stockholders demand
for appraisal and to accept the terms offered upon the merger or
consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied
with the requirements of subsections (a) and (d) of
this section hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholders
written request for such a statement is received by the
surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal
under subsection (d) of this section hereof, whichever is
later. Notwithstanding subsection (a) of this section, a
person who is the beneficial owner of shares of such stock held
either in a voting trust or by a nominee on behalf of such
person may, in such persons own name, file a petition or
request from the corporation the statement described in this
subsection.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after
such service file in the office of the Register in Chancery in
which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded
payment for their
E-2
shares and with whom agreements as to the value of their shares
have not been reached by the surviving or resulting corporation.
If the petition shall be filed by the surviving or resulting
corporation, the petition shall be accompanied by such a duly
verified list. The Register in Chancery, if so ordered by the
Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the
surviving or resulting corporation and to the stockholders shown
on the list at the addresses therein stated. Such notice shall
also be given by 1 or more publications at least 1 week
before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or
such publication as the Court deems advisable. The forms of the
notices by mail and by publication shall be approved by the
Court, and the costs thereof shall be borne by the surviving or
resulting corporation.
(g) At the hearing on such petition, the Court shall
determine the stockholders who have complied with this section
and who have become entitled to appraisal rights. The Court may
require the stockholders who have demanded an appraisal for
their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After the Court determines the stockholders entitled to
an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including
any rules specifically governing appraisal proceedings. Through
such proceedings, the Court shall determine the fair value of
the shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation,
together with interest, if any, to be paid upon the amount
determined to be the fair value. In determining such fair value,
the Court shall take into account all relevant factors. Unless
the Court in its discretion determines otherwise for the good
cause shown, interest from the effective date of the merger
through the date of payment of the judgement shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve
discount rate (including any surcharge) as established from time
to time during the period between the effective date of the
merger and the date of payment of the judgement. Upon
application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding,
the Court may, in its discretion, proceed to trial upon the
appraisal prior to the final determination of the stockholders
entitled to an appraisal. Any stockholder whose name appears on
the list filed by the surviving or resulting corporation
pursuant to subsection (f) of this section and who has
submitted such stockholders certificates of stock to the
Register in Chancery, if such is required, may participate fully
in all proceedings until it is finally determined that such
stockholder is not entitled to appraisal rights under this
section.
(i) The Court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto.
Payment shall be so made to each such stockholder, in the case
of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock.
The Courts decree may be enforced as other decrees in the
Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in
the circumstances. Upon application of a stockholder, the Court
may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys fees
and the fees and expenses of experts, to be charged pro rata
against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights
as provided in subsection (d) of this section shall be
entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the
merger or consolidation); provided, however, that if no petition
for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholders demand for an
appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval
may be conditioned upon such terms as the Court deems just;
provided, however that this provision shall not affect the right
of any stockholder who has not commenced an appraisal proceeding
or joined that proceeding as a named party to withdraw such
stockholders demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days
after the effective date of the merger or consolidation, as set
forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the
surviving or resulting corporation.
E-3
IOMAI CORPORATION
FORM OF PROXY CARD
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF IOMAI CORPORATION
FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 1, 2008
The undersigned, as a stockholder of Iomai Corporation (the Company), hereby appoints
Stanley C. Erck and Russell P. Wilson, and each of them, with full power of substitution, as
proxies to
vote all shares of stock of the Company which the undersigned is entitled to vote through the
execution of a proxy with respect to the special meeting of stockholders of the Company (the
Special
Meeting) to be held at 20 Firstfield Road, Gaithersburg, Maryland 20878, on August 1, 2008 at 9
a.m.,
local time, or any adjournment or postponement thereof, and authorizes and instructs said proxies
to
vote in the manner directed on the reverse side.
Both proxy agents present and acting in person or by their substitutes (or, if only one is present
and acting, then that one) may exercise all of the powers conferred by this proxy.
Discretionary
authority is conferred by this proxy with respect to certain matters, as described in the
Companys proxy statement.
(Continued and to be signed on the reverse side)
SPECIAL MEETING OF STOCKHOLDERS OF
IOMAI CORPORATION
AUGUST 1, 2008
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
â
Please detach along perforated line and mail in
the envelope provided.
â
n
00030300000000000000 8
080108
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THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSALS:
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR
BLACK INK AS SHOWN HERE
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FOR
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AGAINST
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ABSTAIN
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To approve and adopt the Agreement and Plan of Merger, dated as of May 12, 2008, by and among Intercell AG, Zebra Merger Sub, Inc. and
the Company.
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2.
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To adjourn or postpone the Special Meeting to a later time, if necessary
or appropriate, to solicit additional proxies in favor of the proposal to
approve the Merger Agreement.
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You may revoke or change your proxy at any time prior to its use at the Special Meeting by
giving the Company written direction to revoke it, by giving the Company a new proxy or by
attending the Special Meeting and voting in person. Your attendance at the Special Meeting
will not by itself revoke a proxy given by you. Written notice of revocation or subsequent proxy
should be sent to Iomai Corporation, 20 Firstfield Road, Gaithersburg, Maryland 20878,
Attention: Russell P. Wilson, so as to be delivered at or before the taking of the vote at the
Special Meeting.
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FOR YOUR VOTE TO COUNT YOUR PROXY CARD MUST BE RECEIVED PRIOR TO THE
SPECIAL MEETING ON AUGUST 1, 2008. REGARDLESS OF THE NUMBER OF SHARES
YOU OWN OR WHETHER YOU PLAN TO ATTEND THE MEETING, IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED AND VOTED. IF YOU FAIL TO RETURN THE PROXY
CARD OR VOTE IN PERSON AT THE SPECIAL MEETING, IT WILL HAVE THE SAME
EFFECT AS A VOTE AGAINST THE MERGER.
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Returned proxy cards will be voted (1) as specified on the matters above; (2) in accordance
with the Board of Directors recommendations where no specification is made; and (3) in
accordance with the judgment of the proxies on any other matters that may properly come
before the meeting.
The shares represented by this Proxy will be voted in the manner
directed and, if no instructions to the contrary are indicated, will be voted FOR
adoption and approval of the proposals set forth above. By signing this proxy, you
hereby acknowledge receipt of the Notice of the Special Meeting and the proxy
statement dated July 10, 2008 and furnished herewith.
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To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
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PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE TODAY. YOU MAY REVOKE THIS PROXY IN THE MANNER
DESCRIBED ABOVE AT ANY TIME PRIOR TO THE TAKING OF A VOTE ON THE MATTERS
DESCRIBED HEREIN.
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Signature
of Stockholder
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Date:
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Signature
of Stockholder
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Date:
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Note:
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in partnership name by
authorized person.
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SPECIAL MEETING OF STOCKHOLDERS OF
IOMAI CORPORATION
AUGUST 1, 2008
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PROXY VOTING INSTRUCTIONS
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MAIL
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Sign, date and mail your proxy card in the envelope
provided as soon as possible.
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or -
TELEPHONE
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Call toll-free
1-800-PROXIES
(1-800-776-9437) in the United States or
1-718-921-8500
from
foreign countries and follow the instructions. Have your
proxy card available when you call.
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or -
INTERNET
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Access
www.voteproxy.com
and follow the on-screen
instructions. Have your proxy card available when you access
the web page.
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or -
IN PERSON
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You may vote your shares in person by attending
the Special Meeting.
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COMPANY NUMBER
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ACCOUNT NUMBER
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You may enter your voting instructions at 1-800-PROXIES in the United States or 1-718-921-8500 from
foreign countries or www.voteproxy.com up until 11:59 PM Eastern Time the day before the cut-off or
meeting date.
â
Please
detach along perforated line and mail in the envelope provided
IF
you are not
voting via telephone or the Internet.
â
n
00030300000000000000 8
080108
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THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSALS:
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
ý
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FOR
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AGAINST
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ABSTAIN
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1.
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To approve and adopt the Agreement and Plan of Merger, dated as of
May 12, 2008, by and among Intercell AG, Zebra Merger Sub, Inc. and
the Company.
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o
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2.
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To adjourn or postpone the Special Meeting to a later time, if necessary
or appropriate, to solicit additional proxies in favor of the proposal to
approve the Merger Agreement.
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You may revoke or change your proxy at any time prior to its use at the Special Meeting by
giving the Company written direction to revoke it, by giving the Company a new proxy or by
attending the Special Meeting and voting in person. Your attendance at the Special Meeting
will not by itself revoke a proxy given by you. Written notice of revocation or subsequent proxy
should be sent to Iomai Corporation, 20 Firstfield Road, Gaithersburg, Maryland 20878,
Attention: Russell P. Wilson, so as to be delivered at or before the taking of the vote at the
Special Meeting.
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FOR YOUR VOTE TO COUNT YOUR PROXY CARD MUST BE RECEIVED PRIOR TO THE
SPECIAL MEETING ON AUGUST 1, 2008. REGARDLESS OF THE NUMBER OF SHARES
YOU OWN OR WHETHER YOU PLAN TO ATTEND THE MEETING, IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED AND VOTED. IF YOU FAIL TO RETURN THE PROXY
CARD OR VOTE IN PERSON AT THE SPECIAL MEETING, IT WILL HAVE THE SAME
EFFECT AS A VOTE AGAINST THE MERGER.
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Returned proxy cards will be voted (1) as specified on the matters above; (2) in accordance
with the Board of Directors recommendations where no specification is made; and (3) in
accordance with the judgment of the proxies on any other matters that may properly come
before the meeting.
The shares represented by this Proxy will be voted in the manner
directed and, if no instructions to the contrary are indicated, will be voted FOR
adoption and approval of the proposals set forth above. By signing this proxy, you
hereby acknowledge receipt of the Notice of the Special Meeting and the proxy
statement dated July 10, 2008 and furnished herewith.
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To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.
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PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE TODAY. YOU MAY REVOKE THIS PROXY IN THE MANNER
DESCRIBED ABOVE AT ANY TIME PRIOR TO THE TAKING OF A VOTE ON THE MATTERS
DESCRIBED HEREIN.
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Signature
of Stockholder
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Date:
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Signature
of Stockholder
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Date:
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Note:
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each
holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please
give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in partnership name by
authorized person.
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Iomai Corp (MM) (NASDAQ:IOMI)
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